Bulletin: NJ000078

Date:
January 14, 2004
To:
All Issuing Offices in New Jersey
RE:
Reverse Annuity Mortgages

Dear Associates:

We've had a number of questions in the past few weeks concerning Reverse Annuity Mortgages (Reverse Mortgages) and it seemed to be a good time for a review of requirements for these documents.

Because of the particular nature of these transactions, we require that copies of all reverse mortgage documents be provided to us prior to the closing date, and reviewed here in the State office to make sure they comply with the New Jersey reverse mortgage statute, N.J.S.A. 46:10B-18 et seq, also known as the Senior Citizen Homeowner's Income Security Act

At closing in addition to our standard underwriting requirements, you must do the following:

  1. Obtain proof that the borrower or borrowers are at least 60 years of age.

  2. Obtain a copy of the appraisal for the property to be mortgaged. For the mortgage to be effective in New Jersey, the mortgage amount may not exceed seventy percent (70%) of the appraised value of the property. Review the documents to be certain that the 70% figure is not exceeded.

  3. Reverse mortgages cannot contain any pre-payment penalties. Even though you may have cleared the form of the documents with the State Office, you must review the documents provided to you for closing to be certain that they meet this criteria.

As always, please call the State office if you have any questions.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
NJRB 5-33 Reverse Annuity Mortgage Endorsement (NJ adopted 2/1/94)