Reverse Mortgages & Trust Documents

Yesterday the National Reverse Mortgage Lenders Association (NRMLA) met with experts regarding trusts, conservatorships and their relationship to Reverse Mortgage Documentation.

Experts indicated the importance of the following:

• Providing the title company with a copy of the entire trust at the beginning of the application process. This allows for quick verification of how title on the property is held versus how the names of the borrowers are listed as Trustees on the trust.
• The trust must be revocable to qualify for a reverse mortgage. Any irrevocable trusts will need to be changed to revocable before the reverse mortgage can be funded.
• One of the most beneficial points discussed was how a couple can obtain a higher loan amount if one spouse is close to the age of 62 and the other is older.
  
• In this senerio one borrower could be 80 and the other 62. To qualify for a higher loan amount the borrower who is 62 could be deeded off of the property, while at the same time maintaining their current status as trustee of the trust. Because the elder spouce would receive a much higher loan amount for the reverse mortgage, and the younger spouce would ultimately receive the benefit of the trust and inherit the property this strategy would benefit both borrowers.

If you wish to review more information about Reverse Mortgages visit the resource page listed in the 'Links' section.