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Home Equity Conversion (HECM) Deed of Trust
Reverse Mortgage Deed of Trust
- Start with a brief description of what a reverse mortgage deed of trust is, then lead readers into the rest of the post by explaining how we’ll go into more detail below and answer questions about why there are two deeds of trust and how the recorded amount is calculated
What is a reverse mortgage deed of trust?
- Provide a more in-depth explanation of the “First and Second Trust Deed Note” also known as “Two Deeds of Trust” (or mortgage, depending on where the borrower lives)
- Explain how HUD is trying to protect the borrower
- Explain how the amount of the deeds of trust are much higher than the amount they agreed to borrower
Why do reverse mortgage loans have two deeds of trust?
- The first deed secures the lender’s position, while HUD assumes the second position because it insures that the homeowner will continue to receive loan payments if the lender is unable to make those payments (https://www.mlsreversemortgage.com/why-do-reverse-mortgages-have-2-notes-and-2-deeds-of-trust/)
What is the difference between the two deeds of trust?
- Go into more detail about how the two deeds are different — the first mortgage and note can be for both fixed and adjustable rate reverse mortgages and must be reviewed by the borrower during the application process. The second mortgage and note don’t need to be reviewed by the borrower during the application process, but the relationship of the second mortgage and note must be explained. The second deed allows HUD to step in and make loan payments if the original lender is unable to. (https://www.mlsreversemortgage.com/why-do-reverse-mortgages-have-2-notes-and-2-deeds-of-trust/)
How is the deed of trust recorded amount calculated?
Refer to the section “How the recorded amount is calculated”
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