Typical Stages of the Loan Process

Awareness

Consumer (senior homeowner or adult child) learns about Reverse Mortgages from article, advertisement, direct mail, word-of-mouth, etc.

Inquiry of Information

Consumer seeks more information by contacting a Lender - Web Resource, HUD, Fannie Mae, AARP, National Center for Home Equity Conversion, or Financial Planner.

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Counseling

Consumer needs to get required counseling. Counseling must be received from an approved housing agency. The Counselor explains different options and makes sure Consumer is eligible for a Reverse Mortgage.

Effective Action - Application/Disclosure

Consumer fills out application and selects payment option(s). Lender discloses to Consumer estimated total cost of the loan, as required by Federal Truth in Lending Act. Consumer provides Lender with required documents.

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Processing

Lender processes loan, ordering appraisal, title work, lien payoffs, etc. With the recent increase of mortgage refinancing, due to the low interest rates, the appraisers have been experiencing longer turn around times - nationwide

Closing

Following approval, closing (signing) of loan is scheduled. Closing papers and exact figures are prepared. Closing costs are normally financed as part of the loan.

Disbursement

Consumer has three business days after signing papers in which to cancel, after which the loan is disbursed. The Borrower may use the loan proceeds for any purpose. The Lender disburses payments to the Borrower and sends periodic statements.