Reverse Mortgage Question:

[RSW]

Ok! Here is an interesting question: When doing a reverse mortgage FHA appraisal do you mark the assignment type as "refinance" or "other" when the borrower does not have a current mortgage? I have really never thought of it before. The borrower's have had a current mortgage on most of the appraisals I have done. What say you?

 

[Meandering]

I say that's a darn good question.

Call the HOC and ask, and tell us what they said.


.

 

[Mr Rex]

What does having a current mortgage have to do with being a refinance? A reverse mortgage is a refinance as the borrower is financing property they already own aka refinance.

 

[Tom Woolford]

I check other and put in HECM

 

[Vermonter]

What does having a current mortgage have to do with being a refinance? A reverse mortgage is a refinance as the borrower is financing property they already own aka refinance.

Agree. The borrower is "refinancing" the property. A previous loan may or may not be involved.

 

[RSW]

What if the borrower never had a mortgage on it to begin with?

 

[JSmith43]

The term, refinance, in common lender usage, means the loan is being put on the property for purposes other than purchasing the home.

If you think there is any confusion, by all means insert a bit of narrative. In my opinion, that will confuse lender clients compared to if the appraiser simply marks refinance for a RM unless, of course, it is a RM for purchase. Then it is a purchase.

One thing an Other check box will probably do is trigger an automated decision to review the appraisal Darned software prescreening.

There could be reasons that an appraisal might be ordered centered around the 03/2005 form 1004 other than for refinancing or purchase money mortgage. I guess the Other box & narrative field would come in handy then. There's my take on it.

 

[Mr Rex]

What if the borrower never had a mortgage on it to begin with?

Cash is a form of financing.

 

[RSW]

Here is the Webster definition of refinance:

re•fi•nance
verb \ˌrē-fə-ˈnan(t)s, (ˌ)rē-ˈfī-ˌ, ˌrē-(ˌ)fī-ˈ\
: to get a new loan to pay (an older debt) : to finance (something) again
Full Definition of REFINANCE
transitive verb
: to renew or reorganize the financing of

intransitive verb
: to finance something anew

 

[sputnam]

It's a refinance