Closing a HECM is signing a note and recording a lien. Title stays in your name. The old mortgage is paid off from proceeds. Financed fees and the 2.00% initial MIP (Mortgagee Letter 2017-12) come out of the principal limit. Jay Zayer, a CRMP who originates in California and Arizona, treats closing as paperwork and payoff, not a transfer of ownership.
On a refinance of your principal home, federal rescission usually holds funds for three business days. You should not schedule contractors for the signing afternoon.
What you sign, and what gets recorded
You sign a HECM note, a mortgage or deed of trust, HUD settlement disclosures, and state-specific reverse-mortgage notices. California Civil Code reverse-mortgage disclosures appear in California files. Arizona files use the federal packet plus state licensing disclosures.
The recorder files the security instrument. Title insurance insures the new first lien. If a second-lien HECM was the product, the senior loan remains. Most standard HECMs are first liens that pay off prior mortgages.
You receive a copy of the settlement statement. Keep it. Heirs will need it.
What happens to your old loan and to leftover funds
The closing agent wires the existing-mortgage payoff. Any leftover principal limit is disbursed per the payment plan you chose: lump sum (within 24 CFR 206.25), line of credit, tenure, term, or a combination. Unused line funds stay with the servicer, not as a cashier’s check for the full credit line.
If repairs were required, a repair set-aside or completion escrow may hold money after recording. That is not “the bank keeping your house.” It is construction-style holdback.
Confirm leftover cash against the closing disclosure so the number is not a surprise at the table.
What the days after recording are for
Rescission, then funding, then a first servicing welcome letter. Change your insurance mortgagee clause to the new servicer. Do not cancel coverage during the gap. Set a calendar reminder for occupancy certifications.
For the papers you should have brought into origination, see documents needed. For the wait before you even reach the table, see how long it takes.
What actually happens, in order, on signing day?
Here is the sequence a refinance HECM table usually follows.
- The closer confirms identity, vesting, and that every required borrower (and any signer title requires) is present with current ID.
- You review the closing disclosure against the last good-faith numbers. Initial MIP of 2.00% of maximum claim amount (Mortgagee Letter 2017-12) and origination under 24 CFR 206.31 should already be visible as line items, not surprises.
- You sign the HECM note, the security instrument, and the state reverse-mortgage packet. California Civil Code reverse-mortgage notices appear here. Arizona files use the federal packet plus licensing disclosures.
- The notary completes acknowledgments. The title company later records the mortgage or deed of trust. You still own the house.
- The closer explains the three-business-day TILA rescission window when the loan refinances a principal dwelling (12 CFR 1026.23). Purchase HECMs do not use that clock.
- After rescission expires and conditions clear, the old mortgage is wired off and leftover funds follow the payment plan.
A HECM for Purchase table is tied to the real-estate contract instead. Funds move when the purchase funds, not when a rescission period ends.
Who should not sit at a HECM closing table?
This product does not help a household that needs cash the same afternoon they sign a refinance. Rescission holds those proceeds. It does not help someone who still occupies a different house as the real home; 24 CFR 206.39 requires this property to be the principal residence. It does not help a spouse who was left off the note and the counseling certificate in the hope of “aging up” the factor. Closing cannot repair that origination choice.
Jay turns away files that treat the table as the moment to decide whether to stay. That decision belongs in counseling and in a net-sheet comparison, not in a notary lobby.
Walk through a failure mode that is specific to this day: the payoff letter expired yesterday, the first-mortgage servicer will not extend it by email, and the closer cannot wire a stale figure. Recording then waits. The three-day rescission clock does not even start cleanly until the package is right. A current payoff is not clerical nicety. It is the difference between a funded HECM and a signed stack that sits.
Picture a 64-year-old in Chico who arrives with a contractor scheduled for the next morning. On a refinance, that contractor should not be on the calendar. Funds are not theirs yet. On a purchase HECM, the contractor is the wrong person to book before the deed records.
After funding, the first servicing letter names a company that is often not the originator. Change the insurance mortgagee clause. Ask where occupancy certifications will be mailed. Those two tasks prevent the first month of servicing from becoming a default letter.