The Member Spotlight profiles thought leaders in the reverse mortgage space, seasoned and new, to get their insights on current issues. Meet Karen Keating, President of Tradition Title Agency, based in Bay Shore, New York. Karen is a title professional who has been active in the reverse mortgage space since 2004. She was among the first class of candidates to become a Certified Reverse Mortgage Professional (CRMP) in July 2010. Karen also serves on the Independent Certification Committee, which oversees and administers the designation.
When we asked Karen for advice on what steps can be taken to help ensure a smoother closing, she responded, “Loan officers need to spend more time with their borrowers explaining taxes and insurance. We get many phone calls from seniors the following year wanting to know why we didn’t pay their real estate taxes.”
Not only were you among the first group of CRMPs, you were also the first title professional. What was your motivation?
I feel if you are involved you should be involved 100%. My motivation for getting the CRMP was for me to be of added value to my clients (loan officers). You would be surprised regarding the questions we get from loan officers.
What are some common questions that borrowers ask during the closing, and what can loan officers be doing better to prepare their clients?
It can be frustrating for the title closer and the borrower if things aren’t properly explained before closing. I feel that the loan officer, or one of his representatives, should be present at the closing so he can answer the borrower’s questions. As a company, we have spent a good deal of time training our title closers on reverse mortgages. However, that is not our job as a title company.
Loan officers need to spend more time with their borrowers explaining closing costs and taxes and insurance. We get a lot of phone calls from seniors the following year wanting to know why we didn’t pay their real estate taxes. Couples should understand that they must have a joint account for receiving any wire transfers of reverse mortgage funds. I once participated in a closing with my business partner and his wife who had been legally married for over 40 years. I assumed they had a joint banking account. However, it was discovered at the closing they maintained separate bank accounts and the wife had a problem adding the husband to an existing account. The wife agreed to add him to the account and the file closed and funded.
My suggestion is that loan officers should explain and better prepare borrowers for the closing. Explain the details of the financial part of their loan and the meaning of the loan documents. I still get asked why there are two mortgages being recorded on the property (the lender’s and HUD’s).
What advice can you give lenders about picking the best possible title company?
I will share a situation that came up at a recent class I was teaching. One attorney explained that the borrower had a reverse mortgage and he was trying to sell his property. The title company didn’t understand how reverses work and was being uncooperative regarding the payoff letter from the servicer.
Another situation is if a title company only does the infrequent reverse mortgage. They are often unaware of how to accurately price the title work and what searches have to be ordered. This could cause the borrower additional money he didn’t need to spend.