What Happens After You Sign the Final Documents
There will be a large number of documents to sign. The most important of these will be the Deed of Trust, the Loan Note and the Loan Agreement. There will also be more disclosures and other pieces of paper attending to the details.
Because many of the documents need to be notarized, a notary will be necessary during the signing. In many cases, a 'signer' will be sent to your home. The 'signer' is a notary and additionally will walk you through the signing of all the other documents. Other times you might go to the escrow office or to the lenders office to sign these documents. In no case may the loan originator act as notary in this transaction.
Once the documents are signed, they will be sent to the lender's funding department. It will be verified that all documents were properly signed. If not, it may be necessary to overnight the document to you to be signed. In some cases, it is necessary to redraw all the documents and have you sign all of them with a notary in attendance again. To avoid this, the 'signer' will usually double check to make sure all the signatures, initials where needed and other blanks are filled in.
On a refinance, one of the forms you signed was a 3 day “Notice
of Right to Cancel”. (This is not the case with a purchase.
A purchase is usually effective on the day noted in the purchase
contract.) During the next 3 business days, the loan will not fund
in case you should change your mind. Usually, on the 4th day,
the lender will send the correct amount of money to cover
any costs the title company will be receiving or paying (i.e., a
lien such as a mortgage company) to the title company. On the
5th day, the title company will pay anyone due payment including any
advance you have requested. If you requested money to be wired
to you, it will usually happen on this day. They will also
record this as a real estate transaction with the county. It
is probably easiest to think of receiving the funds of a reverse
mortgage as a calendar week from the date you sign the final
Note: information recorded with the county is public information. You will start receiving junk mail wanting you to refinance to a better rate and/or a lower payment or saying you are eligible for a refund of the FHA Mortgage Insurance Premium (MIP). Since they can see the name of your lender, they may mention this lenders name so you pay attention to their letter. The people sending you this junk mail will frequently not know you have a reverse mortgage with no payment at all. You may throw this away. Any legitimate mail from your lender will come in an envelope with their return address and/or their logo. You may wish to sign up for the “Do Not Mail” list to avoid junk mail in general.
Once the loan has been completed, your file will be sent to the servicing center. The service center will then send you a letter telling you they have your file and are setting you up in their system. This letter will include their address, phone number and operating hours. If you have a line of credit being set up, they will also send you instructions you will need when you wish to transfer funds to your bank account. It is not unusual for it to take 3-4 weeks to set up the Line of Credit. Please put your instructions for LOC access where you can find it.
If you are going to receive monthly payments, the first check will frequently be direct deposited. If the loan funded near the end of the month, it may come in the mail the first time even if you signed up for direct deposit. It will then be direct deposited after that.
If you have any repairs to be completed, you have 6 months from now. Once the service center receives your file, they will send you a letter with guidelines for completing the work.
You might also consider setting up a Power of Attorney. This would allow the servicing center to talk to someone helping you in case there comes a time when you are unable to do so yourself.
From here, most of your contact will be with the servicing center. They will send you a statement every month recapping any money you withdraw from your line of credit, interest and fees charged to you and it will have your current balance owed and the balance still available on your line of credit. If you have any questions, they will usually be the source for answers since they are they only ones with a computer with your account information in it.
Your Responsibilities After Closing
Like any other mortgage or like any responsible homeowner, you are expected to:
- Pay property taxes
- Keep adequate property insurance up-to-date
- Maintain the home