Reverse mortgage title examination is the title company’s test of whether a first-lien HECM can be insured, not a spelling bee and not a courtesy search. Jay Zayer, CRMP, is a reverse mortgage specialist at reversemortgage.coach. 24 CFR 206.35 requires the people on the note to hold the estate that will secure the loan. Exceptions — unreleased liens, vesting mismatches, use restrictions — have to clear. A grant deed in a drawer is not that exam.
A borrower in Tempe, Arizona, recently: Lyra, 67, occupies a house, holds a copy of a 1998 deed, and asked why we needed a prelim. Because 1998 is not today. See title errors for typos and corrective deeds. Stay here for the examination itself: prelim, exceptions, endorsements.
A HECM remains FHA-insured. A title exam is not a government land grant.
What does the title examiner actually look for on a HECM?
A chain that supports the vesting we will record. Liens that must be paid or subordinated. Taxes. HOA assessments. Easements that affect insurability. Trust vesting. A spouse or co-owner who is on title but not on the note. 24 CFR 206.27(b)(3) still treats an unsubordinated tax deferral as a problem. Super-priority HOA slices, if any, belong on the demand, not in a kitchen-table guess.
Lyra’s leftover cash still sits in the mid-30s to low-50s percent of appraised value, depending on age and expected rate — after those liens are paid. I will not quote a live cell. Run the Tempe worksheet with the live payoff, not with the 1998 memory. Do not interpolate HUD rows.
Counseling still costs $125–$175. The HUD certificate lasts 180 days. Arizona has no 1923.2(k) pause. Do not burn 180 days arguing that a drawer deed is a prelim.
Which title exceptions actually stop origination?
Anything that keeps the HECM from being a first lien the title company will insure. Unreleased HELOCs. Recorded judgments. Delinquent HOA assessments. Open estates. A fractional interest nobody will unify. See fractional interest. Confirm overlays with the underwriter. I will not originate hoping the exception “probably is old.”
Mortgagee Letter 2017-12 still charges 2.00% initial MIP of claim amount if the HECM endorses. Annual MIP is 0.50% of outstanding balance. 2026 files still use the $1,249,125 cap in Mortgagee Letter 2025-22. Origination is still capped at $6,000 under 24 CFR 206.31. Clearing title does not discount MIP. Paying MIP on a file that cannot record is a poor fee, because it should not happen.
If residual income requires a LESA, that set-aside is still origination-only. Title exceptions are not a LESA. They are a recording problem.
How is a trust or a missing spouse handled on the exam?
A revocable living trust that meets HUD’s tests can hold title. Channels often want an attorney opinion letter. That overlay is not a HUD form number I will invent. A spouse on title who will not sign is a vesting project, not a seminar story. Non-borrowing spouse rules still attach when HUD’s NBS framework applies. Confirm exhibits.
A second geography: a 75-year-old in San Luis Obispo whose California prelim showed an old HELOC. Same 24 CFR 206.35 test. Civil Code 1923.2(k) already added seven days after counseling. The reconveyance now sits on the critical path. Jay still quotes about 30 days on a complete refinance. Missing reconveyances are how 30 becomes 60.
An adjustable HECM after title insures still accrues at 1-month CMT plus lender margin. Expected rate still rounds to 0.125% under 24 CFR 206.3.
Heirs who later keep Lyra’s Tempe house repay the outstanding loan balance under 24 CFR 206.125(a)(2)(i). A clear prelim does not rewrite that subsection.
Who should not treat a drawer deed as the title examination?
This path does not help a household that wants me to skip the prelim because “we’ve owned it forever.” Occupancy is still 24 CFR 206.39. I work with multiple lenders. I will examine title. I will turn away a drawer-deed plan whose HELOC is still of record.
If leftover cash after 2.00% of claim amount is a token once the liens are paid, skip the loan. A title exam cannot invent equity. It can only tell the truth about who is in line ahead of FHA.
How fresh does the prelim have to be at closing?
Fresh enough that the title company will still insure. Lyra’s Tempe 1998 deed is not that. San Luis Obispo HELOC reconveyances have to land before recording. A prelim that aged while we waited on a payoff is how files re-exam. I will not originate on a search nobody will stand behind.
Ask the closer. Confirm overlays. I will not invent a HUD day-count for prelim freshness.
What if a deceased spouse is still on the old deed?
Then probate or a surviving-spouse affidavit has to clean vesting before a first-lien HECM can record. Lyra’s Tempe prelim will show it. San Luis Obispo files show it. I will not originate hoping the title company will ignore a dead name. See lost deed if the paper is missing. This page is the exam. That page is the missing instrument.
Confirm the overlay. Bring the death certificate. Do not mail a eulogy instead of vesting. Lyra’s drawer deed is still 1998. A dead name on title is a vesting project. I will examine title. I will not originate on a eulogy. Confirm the overlay before anyone books a notary. A prelim nobody will insure is not a closing date.