Sunday, December 02, 2007

query: why do I have to sign a quit claim deed to get a reverse mortgage

I find this query extremely disturbing. I can think of no reason that you would need to sign a quit claim deed to get a reverse mortgage.

Please contact your attorney or at the very least have someone you trust - NOT THE MORTGAGE LENDER OR TITLE AGENT - review the situation.

You can also contact HUD's predatory lending section directly for assistance using this e-mail address:

hsg_predlend@hud.gov

4 comments:

Brendan said...

Perhaps the Quit Claim Deed will be held in trust by a third party until the total of the reverse mortgage is paid out, upon which the deed will be recorded.

Just a thought--I haven't seen any reverse mortgages with this arrangement, although I have seen Land Contracts set up with it.

Diane Cipa, The Closing Specialists® said...

Well, what would be the purpose? A reverse mortgage is a lien and remains a lien until paid in full/satisfied. Why would the ownership change after the proceeds were paid out? Thanks for the comment Brendan, but I don't see land contracts and reverse mortgages as anywhere near the same ballpark. ;)

Renee Kovacs, NSA/UNAA said...

There could be a few valid reasons, I think the question is just far too general. It might be a private RM, and the lender might require the property to be taken out of a trust. It could be that one of the RM borrowers is not vested on title. It could be that there's a third interest that is being taken off, such as a son or daughter.

Diane Cipa, The Closing Specialists® said...

Absolutely, but the professional talking with these folks isn't doing a good job of making the reason clear and easily understood. If the borrower in a reverse mortgage transaction is at all unsure, I always want them to have eyes they trust on the transaction to make certain they are not being victimized by a predator.

I'd like to puke every time I see a lead generator advertising to the subprime predator crowd about how much money they can make in the reverse mortgage market.

We have a demographic that is vulnable and the vultures are circling.