Hi Kelly,

I do reverse mortgage closings also. I have noticed in the loan documents that there is usually a form for the borrower to sign in which he indicates whether or not the loan proceeds will be used for estate planning purposes, and if so the loan is not going to go through final approval and funding.

I agree that it can be something that makes retirement a little easier for the elderly. I will be retiring in about another 10 or 15 years, and this is something that I am considering depending upon the equity in my house. If my house doubles in value again during that time, I probably will sell it, down size to a condo , and use the excess proceeds to either buy an income producing property or for a conservative investment. If on the other hand the value declines, I may consider a reverse mortgage, and live here without mortgage payments for the rest of my life.

I think that the sub prime implosion has demonstrated that better policing of mortgage transactions is needed. I think special attention needs to be given to reverse mortgages. I did a closing last year, and recently received a call from the title insurer. It seems that the mortgagor only held a life use in the property. The legal title holders had not been parties to the transaction. The title insurer was on the hook. They believe that it was either a mistake in the title search or that the title insurance agent failed to pick up on it when he issued the policy. Hard to conceive of someone not reviewing the deed at the beginning of the application process.