trust, poa, conservatorships and life estatesservices.nrmlaonline.org/nrmla_documents/poas...
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PREMIER REVERSE CLOSINGS 1
Trust, POA,
Conservatorships and
Life Estates
Presented By: Alissa Prieto
VP, Eastern Regional Sales Manager
347-281-0342
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PREMIER REVERSE CLOSINGS 2
Trusts
A relationship created at the direction of an individual,
in which one or more persons hold the individual's
property subject to certain duties to use and protect it
for the benefit of others.
Must meet State, Lender, HUD and Title guidelines
Trustee and borrower must sign documents
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PREMIER REVERSE CLOSINGS 3
Settlement/Closing Needs:
Full copy of trusts and any amendments
Trust Certifications are allowed only in certain states
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PREMIER REVERSE CLOSINGS 4
Trusts Have Three Parties
Settlor/Trustor – creator of the trust
Trustee – fiduciary who is authorized to act on behalf
of the trust
Beneficiary – normally the settlor/trustor
Immediate beneficiary
Contingent beneficiary
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PREMIER REVERSE CLOSINGS 5
Trust Checklist: All borrowers must be the immediate beneficiaries and
all immediate beneficiaries must be borrowers
Correct trust received
Verify trustee(s)
Trustee has the power to borrow
Signed and notarized copy
Revocable for HECM Loans
Irrevocable (only acceptable to some lenders)
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PREMIER REVERSE CLOSINGS 6
Deceased Trustee
Need original county-certified death certificate.
Closer/Settlement Officer will notify of any vesting
change.
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PREMIER REVERSE CLOSINGS 7
Deceased Settlor
Trust may divide into sub-trusts
One or more of the sub-trusts may be irrevocable
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PREMIER REVERSE CLOSINGS 8
Incompetent Borrower
Successor trustee(s) to sign in the event that trustee is
deemed incompetent
POA or Conservator to sign on behalf of the borrower
as individual
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PREMIER REVERSE CLOSINGS 9
Vesting Trust issues:
Missing trust or pages of the trust
Possible irrevocable trust
Trust but title reflects as individual
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PREMIER REVERSE CLOSINGS 10
How to Execute the Documents
Vesting: John Smith and Jill Smith, Trustees of the
Smith Family Trust dated 7/29/2011
Signature: _________________
John Smith, Trustee
Signature: _________________
Jill Smith, Trustee
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PREMIER REVERSE CLOSINGS 11
Reasons for Trust Denial
Irrevocable
Trust Certification with insufficient information or
deceased party
Incomplete copy
A-B Trust involving a deceased party
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PREMIER REVERSE CLOSINGS 12
Reason for Trust Denial
No Power to Borrower
All borrowers are not immediate beneficiaries
All immediate beneficiaries are not our borrowers
Not executed
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PREMIER REVERSE CLOSINGS 13
Power of Attorneys
800.542.4113
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PREMIER REVERSE CLOSINGS 14
Power of Attorney
A legal document appointing another person to
manage the principal’s financial affairs.
USES: Mentally incompetent principal
Physically incompetent principal
Competent principal, but prefers not to sign
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PREMIER REVERSE CLOSINGS 15
Example POA
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PREMIER REVERSE CLOSINGS 16
Power of Attorney
Financial POA is required. We can not utilize a
Medical POA .
Original POA is required at closing and must record
with Mortgage/Deeds Of Trust if POA is not already
recorded.
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PREMIER REVERSE CLOSINGS 17
Types of POAs Standard-
Effective upon signing. Doesn’t have durable verbiage. Lenders may reject a standard POA if the borrower is unable to sign the loan application.
Durable-
Continues to be effective even after a borrower becomes incompetent.
Springing-
Only becomes effective after the borrower becomes incompetent.
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PREMIER REVERSE CLOSINGS 18
Competent Borrower Durable or Standard POA is normally acceptable but
must be reviewed to insure that it meets guidelines.
Competent borrower must be counseled and sign the
initial loan application.
Principal’s Affidavit signed and notarized by the
borrower (settlement to provide).
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PREMIER REVERSE CLOSINGS 19
Incompetent Borrower
Either a Durable or a Springing POA may be
acceptable but must be reviewed prior to approval.
May need 1 or 2 letters from a medical doctor to
demonstrate the borrower is currently incompetent.
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PREMIER REVERSE CLOSINGS 20
Requirements for a
Doctor’s Letter
Doctor’s letterhead
Dated
Doctor’s signature
Include that the party can no longer handle their
financial affairs
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PREMIER REVERSE CLOSINGS 21
What a POA Can’t Do
In most cases, it can’t be used for self-serving purposes.
Can’t be used to sign on behalf of a trustee, unless both
the POA document and the trust specifically allows for
it.
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PREMIER REVERSE CLOSINGS 22
All POA’s Must Have the Following:
Power to deal with real property
Power to borrower, mortgage, encumber, or
hypothecate.
Be properly signed and notarized
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PREMIER REVERSE CLOSINGS 23
Signing using a POA
Sally Borrower by Joe Agent as her attorney in fact
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PREMIER REVERSE CLOSINGS 24
Reasons for POA Denial
Lack of power to borrow
Improper notary acknowledgement
Lack of durability language
Invalid signatures
Lack or insufficient number of witnesses
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PREMIER REVERSE CLOSINGS 25
Reasons for POA Denial
Springing POA
Insufficient Doctor’s letter
POA form doesn’t conform to state guidelines
Missing original POA
Principal’s competency at time of execution
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PREMIER REVERSE CLOSINGS 26
Conservatorships
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PREMIER REVERSE CLOSINGS 27
Conservatorships
A Court Action designed to protect the interests of a person determined to be incompetent
Conservator must be appointed for the Estate. A Conservator is frequently appointed for the Borrower’s Person (for health care) and Estate (for property).
Also referred to as a Guardianship in some states
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PREMIER REVERSE CLOSINGS 28
The court must approve the reverse mortgage and
normally this is done by an Order.
Title and settlement need a copy of the letters of the
conservatorship.
If the letters of conservatorship or the court order
authorizing the reverse mortgage haven’t been recorded
by the county recorder then we will require an original
or court certified copies.
Conservatorships
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PREMIER REVERSE CLOSINGS 29
How to Execute Documents
Jane Smith, Conservator of the Person and Estate of
John Smith, a Conservatee
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PREMIER REVERSE CLOSINGS 30
Life Estates
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PREMIER REVERSE CLOSINGS 31
Life Estate Life estates may be either granted or reserved in a deed.
The Life Tenant must be our borrower and the
Remainderman can be anyone as long as they are 18
years and older.
Both the Life Tenant and the Remainderman will need
to sign the loan documents.
Liens incurred by the Remainderman can attach to the
property.
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PREMIER REVERSE CLOSINGS 32
How to Execute Documents
Vesting: John Smith, as to a Life Estate and Susie Smith
as to the Remainder
Signature: ___________________
John Smith
Singature: ___________________
Susie Smith, Remainderman
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PREMIER REVERSE CLOSINGS 33
Questions?
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PREMIER REVERSE CLOSINGS 34
DISCLAIMER
This information provided herein is up to date as of June 19, 2012. Information
may vary by Underwriter and State. It is always best to check with your Account Manager or Closing Officer as to current
requirements.
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PREMIER REVERSE CLOSINGS 35
Your loans and borrowers deserve the best treatment in the industry; that’s why it’s important to pick a
partner where reverse mortgages take center stage.
THANK YOU!
800.542.4113
www.PRClosings.com