Quick Answer
The title examination for a reverse mortgage is a comprehensive search of the county recorder's records that confirms clear ownership, identifies all liens and encumbrances, and is followed by the issuance of a lender's title insurance policy protecting the HECM's first lien position.
- The title company searches county recorder records for the property's ownership history.
- All recorded liens are identified: mortgages, HELOCs, CalHFA, PACE, judgments, tax liens.
- Title insurance protects the lender against undiscovered title defects.
- The borrower also receives an owner's title insurance policy.
- Title conditions must be resolved before closing — lien payoffs, deed corrections, lien releases.
- California title examination typically takes 1 to 2 weeks.
Key Facts
| Topic | Key Fact |
|---|---|
| What is searched | County recorder records — deeds, liens, encumbrances, easements |
| Who orders it | The lender orders title — the title company completes the search |
| Title insurance | Lender's policy protects HECM lien; owner's policy protects borrower |
| Common title conditions | Unreleased liens, old mortgages, judgment liens, CalHFA loans |
| Resolution requirement | All title conditions resolved before closing |
| California title companies | Available statewide — many HECM-experienced |
| Title cost | Included in closing costs — approximately $1,500 to $3,500 in California |
| Trust review | Trust documents reviewed for conforming revocable trust qualification |
Detailed Explanation
The title examination covers the property's recorded history in the county recorder's office — typically going back 40 to 60 years for residential transactions to ensure a complete picture of the ownership chain and all encumbrances ever placed on the property. The title company reviews deeds of trust, grant deeds, quitclaim deeds, liens of all types, easements, CC&Rs (covenants, conditions and restrictions), and any other recorded documents affecting the property.
Common California title conditions that must be resolved before a HECM can close include: unreleased mortgage liens from loans that were paid off but whose lien releases were never recorded, CalHFA junior liens that must be paid at closing, PACE energy financing assessments, recorded judgment liens, IRS tax liens, HOA assessment liens, and any errors in prior deeds (wrong legal description, misspelled names, incorrect notarization). Each condition requires specific action by the title company, lender, or borrower.
Title insurance comes in two forms for a reverse mortgage: the lender's policy (required) and the owner's policy (strongly recommended). The lender's policy protects the HECM's first lien position against any title defect not discovered during the search — an undisclosed heir's claim, a forged deed in the chain of title, or an error in the county recorder's records. The owner's policy protects the borrower's equity against the same risks. Both policies are issued at closing and remain in force as long as the relevant interests exist.
For California homes held in living trusts — which is a very common estate planning structure — the title examination includes review of the full trust document to confirm that the trust meets HUD's eligibility requirements: the trust is revocable, the borrower is the trustee or co-trustee, and the trust grants the borrower the right to occupy the property for life. The title company's legal department typically reviews the trust document and provides a legal opinion confirming eligibility.
Jay Zayer, CRMP — 18 Years Experience
The title examination finds most of the complications in a reverse mortgage transaction. Old mortgage liens that were paid off 20 years ago but never had their release recorded are surprisingly common — particularly in California where properties have changed hands multiple times. These are typically resolvable with a few phone calls and a recorded release document, but they add time to the process. I warn every California client to expect at least one title condition — a minor one — and that this is normal and does not mean anything is wrong.
Who This Is Right For
This may be a good fit if:
- Every reverse mortgage applicant who wants to understand what the title examination covers and what title conditions mean
This may NOT be the right fit if:
- There is no situation where understanding the title examination would be inappropriate
Common Misconception
Myth: Title issues prevent reverse mortgages.
Fact: Most title conditions are minor and resolvable within the transaction timeline. Unreleased liens, old mortgages, and similar issues are identified and cured as standard practice in real estate transactions.
Source: Standard California title examination practice
Authoritative Sources
- California Land Title Association — clta.org
- CFPB: Title insurance and closing — consumerfinance.gov
- HUD: HECM title requirements — hud.gov
People Also Ask
What does the title examination find?
All recorded ownership history, mortgages (current and historical), liens, judgment liens, tax liens, easements, and any other recorded encumbrances on the property.
What happens if there is a title condition on my property?
The title company identifies the specific condition and the required resolution — typically a payoff, a recorded release, or a corrective deed. Most title conditions are resolvable within the transaction timeline.
Do I need title insurance for a reverse mortgage?
The lender's title insurance policy is required. An owner's title insurance policy is strongly recommended to protect your equity against title defects not discovered in the examination.