Reverse Mortgage Resources & Information

National Aging in Place Week

Reverse Mortgage Resources — Tue, 12 Sep 2006 13:50:00 +0000

NRMA reports that activities the commemorate National Aging in Place Week are starting to take shape in communities around the country. It was first celebrated in 2003 and is scheduled this year from October 8-14.
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Is There A Cost For Couseling?

Reverse Mortgage Resources — Fri, 08 Sep 2006 17:43:00 +0000

Currently, there is no cost to the consumer for counseling. However, HUD is considering a proposal to make counseling a borrower-paid expense to be disclosed on the HUD-1 (escrow closing statement).

Who Provides HECM Counseling?

Reverse Mortgage Resources — Wed, 06 Sep 2006 14:12:00 +0000

According to the NRMLA Summer publication, HUD has approved approximately 800 non-profit organizations nationwide to provide HECM counseling. There are counselors who do mostly face-to-face counseling,and then there are individuals who are part of HUD's nationwide telephone counseling network.

Either type of counselor can advise a prospective borrower in-person. Except in special circumstances, only counselors who are part of the telephone counseling network can conduct nationwide (except North Carolina which permits face-to-face only) phone counseling.

Non-network counselors may only counsel over the phone if the client resides in the same state as the counselor or a contiguous state, and if the client has a mobility or medical problem which restricts travel, or if no counseling is located within 50 miles of the client's home.

Most telephone counseling is conducted by one of three entities approved by HUD in Mortgagee letter 2005-44: National Foundation for Credit Counseling, Money Management International and AARP.

When a senior calls AARP, a he/she is given a list of counselors and their telephone numbers. The other agencies automatically route the senior to the next available telephone counselor, no matter where that counselor is located, or to the nearest branch if the person requests a face-to-face counseling session.

HECM Counseling

Reverse Mortgage Resources — Wed, 30 Aug 2006 04:33:00 +0000

Arguably the most important consumer protection built into the reverse mortgage program is the requirement that the prospective borrower must first meet with an independent third party counselor approved by the U.S. Department of Housing and Urban Development (HUD) before signing a loan application or incurring any fees for the reverse mortgage. Each counselor is trained thoroughly and test to assist a senior interested in obtaining this product.

NRMLA states that by law, a couselor must review other options, with the senior, that are available including housing, social services, health and financial alternatives such as sale-leaseback financing or property tax deferral programs. They also need to inform the borrower of the tax consequences affecting eligibility under state or federal programs and the impact on the estate and their heirs.

HUD Proposes Program Changes

Reverse Mortgage Resources — Wed, 23 Aug 2006 20:09:00 +0000

The U.S. Department of Housing and Urban Development will be issuing several mortgagee letters in the near future that make beneficial changes to the FHA reverse mortgage program, according to Meg Burns, Director of HUD's Single Family Program Development Division.

Addressing a luncheon crowd at the fifth annual Reverse Mortgage Day of Texas, held in Austin, on July 26, Burns noted the following program changes that HUD is in the final stages of reviewing:

A mortgagee letter to make counseling a borrower-paid expense disclosed on the HUD-1 form.
A mortgagee letter to extend the principal limit lock period from 60 days to 120 days
A mortgagee letter to eliminate an existing requirement that borrowers present a Photo ID.
HUD has already implemented a new policy whereby the department provides 10 days advance notice of any FHA loan limit increases. This, in turn, gives lenders an opportunity to obtain more funds for their clients.

Both Burns and FHA Commissioner Brian Montgomery are speaking at NRMLA's Annual Meeting & Expo in San Francisco, September 28-30. Attendees will have an opportunity to ask more detailed questions about the HECM program, and other FHA issues. To learn more about the Annual Meeting visit NRMLAOnline.org.

HECM volume Cap Removed

Reverse Mortgage Resources — Tue, 22 Aug 2006 18:28:00 +0000

The Reverse Mortgage Advisor Volume 9.2, Summer 2006 reads "House Passes Legislation that Removes HEVM Volume Cap, Implements National Loan Limit". The the article states that the U.S. House of Representatives passed legislation, with a vote of 415-7, known as the Expanding American Homeownership Act of 2006 (H.R. 5121), which would make substantial improvements to the FHA HECM program. President Bush issued an immediate statement thanking the House and urged the Senate to pass its own version, S.3535.

This initiative, passed on July 25, would create a single national loan limit for the HECM program equal to the conforming Freddit Mac loan limit ($417,000 in 2006); establish a "home purchase" option tha would allow people to use a reverse mortgage to purchase newer housing that better suits their needs; and remove the volume cap on the numbe rof HECM loans that FHA can insure. read more...

Access Greater Amounts of Equity

Reverse Mortgage Resources — Fri, 18 Aug 2006 18:40:00 +0000

Financial Freedom has Launched a new version of its "jumbo" product, called the Cash Account Advantage, as reported in the Reverse Mortgage Advisor Summer edition. This will enable them to be competitive with the federally insured Home Equity Conversion Mortgage by enabling homeowners living in properties valued between $450,000 and $750,000 to access greater amounts of equity. read more...

Reverse Mortgage Movie

Reverse Mortgage Resources — Thu, 17 Aug 2006 18:04:00 +0000

Signing Pro has been featuring their Reverse Mortgage movie titled "What About Me" at NRMLA conferences for the past two years. The movie includes a narration with real life scenerios played by seniors ranging in age from 63 to 93.

Your potential clients will enjoy the story lines and relate easily to the characters, while at the same time assisting seniors in understanding the benefits of what a Reverse Mortgage can do to enhance their future. For a nominal fee Reverse Mortgage Loan Agents can embed their logo, photo and phone number into the story line.
To view the movie trailer visit our Reverse Mortgage Resource Center at www.signingpro.com.

43% Not Saving Enough to Retire

Reverse Mortgage Resources — Fri, 28 Jul 2006 18:17:00 +0000

Study: 43% not saving enough to retire well

On June 6, 2006 an article written by Kathy Chu with USA Today stated that a new retirement study provides further evidence that a growing number of Americans are at risk of a diminished standard of living once they stop working.

The Center for Retirement Research's new retirement-risk index, released Tuesday, shows 43% of working households were in danger in 2004 of having too little income to fund their retirement.

But the study probably understates the proportion of retirees at risk. Its projections assume that people retire at age 65, cash in on their home equity through a "reverse mortgage" and exchange their assets for a stream of income by buying an immediate annuity. read more...

Take a Break in Maui, Hawaii

Reverse Mortgage Resources — Thu, 27 Jul 2006 21:14:00 +0000

One of the most important comments that every seminar leader suggests you do is take some time for you. Take a Vacation! And Maui is the greatest place to do this. There's nothing better than some rest and relxation to refresh your state of mind and develop creative ideas. The flights are amazingly low if you search around on the web and until November you can catch low season condo rates to make your stay more comfortable. Bring a loved one who has been waiting for you to give them your special time.

I've included a website where you can preview fun activities and get an idea of what's going on around the island of Maui, Hawaii. vacationinwailea.com

Seniors Stay At Home with Chronic Conditions

Reverse Mortgage Resources — Wed, 26 Jul 2006 20:42:00 +0000

The National Council on aging says that Seniors with a chronic health condition have unique needs when deciding to take out a reverse mortgage. I s the impaired elder able to stay at home and for how long? A person's level of impairment will affect how long the loan funds will last that will pay for the services that assist in maintiaining an at home status. For a severly impaired elder, it may be best to sell the house and move them to a place that offers more support.

Key Facts

By the year 2030, 20% of all U.S. Residents will be over age 65. According to the U.S. Bureau of the Census 1996, 32 states will have populations the size of Florida.
The National Council on Aging states that 13% of households where the youngest owner is age 62 and older (2.5 million) need help with ADLs (Activities of Daily Living) or IADLs (Instrumental ADLs). 16% have difficulty with these activities, but can still do them on their own.
The U.S. Department of Health and Human Services 2003, Alzheimer's Association 2005 noted that more than 2/3s of all older people who need help with everyday tasks live at home, including more than 70% of those with Alzheimer's disease.

Medicaid and private long-term care insurance companies typically use this measurement to determine and define losses in ability that may qualify a person for benefits. People who are unable to perform two or mor ADLs without help are regarded as having a sever impairment and usually quality for benefits. Measuring the functionality of physical ability reflects a person's ability to manage their environment and take care of themselves.

IADLs - Limitations with activities such as shopping, cleaning, cooking, using the telephone, and money management. Often these activities can be accomplished with a minimum of outside help. Difficulties with household activities is often a sign that the elder is becoming frail and will need more help in the near future.
ADLs- Limitations that require daily attendtion for aging at home. This might include feeding oneself, bathing, dressing, transferring from a bed to a chair, and using the bathroom safely.

Kiplinger Speaks Out

Reverse Mortgage Resources — Thu, 27 Jul 2006 18:01:00 +0000

Kiplinger's Finance Report states that reverse mortgages allow homeowners 62 and older to borrow a portion of the equity and receive payments in a lump sum, as monthly income or via a line of credit. No repayment is due until you move, die or sell the house. But a reverse mortgage, which involves heavy up-front fees, makes no sense if a senior has to move into a nursing home after only a few years.

To stay at home longer and make the best use of a reverse mortgage, seniors could use the money to add ramps or refit bathrooms to accommodate a wheelchair. Home equity can also pay for in-home assistance. As a result, says Peter Bell, president of the National Reverse Mortgage Lenders Association, the law may create greater demand for quality home-care services and help keep seniors out of nursing homes. read more...

U.S. News & World Report

Reverse Mortgage Resources — Thu, 27 Jul 2006 17:41:00 +0000

For seniors with little cash and lots of value socked away in their home, the reverse mortgage is rapidly gaining popularity as a way to raise money without having to move.

From July 2005 through March of this year, the federal government insured 48,088 reverse mortgages, up more than 20,000 from the previous year. And in May alone, a record 8,414 reverse mortgages were approved.

Essentially, seniors are borrowing against the value of their homes without needing to pay the money back until they move out or die. read more...

NRMLA Washington Report

Reverse Mortgage Resources — Wed, 26 Jul 2006 17:35:00 +0000

Another Big Month in June
The U.S. Department of Housing and Urban Development endorsed 7,572 reverse mortgages in June and 55,659 thru the nine months of fiscal year 2006. FHA endorsed 43,131 loans for all of FY2005. Year-to-date totals represent a 83 percent increase over the 30,404 loans endorsed during the same period last year. To view the latest HECM Activity Report, please visit NRMLAOnline.org.

Roll of Reverse Mortgages

Reverse Mortgage Resources — Thu, 20 Jul 2006 16:05:00 +0000

The reverse mortgage is a valuable "safety net" for seniors with low incomes, and those who need hight levels of care. Lenders can play a key role to help ensure that older homeowners have the resources they need to assist seniors in aging at home by:

Filling the public funding gaps - Older homeowners have an extremely difficult time pulling together funding from public programs that currently do not work together.
Expanding funding options - Most public programs target seniors who have limited financial resources or run out of money paying for care.
Providing rapid access to funds - Public services are often overburdened. Many programs have large waiting lists because the available funds aren't able to meet required demands.

It is so difficult to make financial decisions when a senior reaches the crisis point. Older homeowners must learn to plan ahead to ensure that reverse mortgage funds for living at home will be available when they need them. Planning ahead with a reverse mortgage assists a senior by:

Utilizing planning solutions - Borrowers have more options to deal with the risk of needing help at home, even if they have not been able to plan far in advance.
Reducing the fear of an empty bank account - Additional cash from reverse mortgages gives impaired elders the flesxibility to fill unanticipated needs and avoid a cash crunch.
Providing the "glue" that holds financial plans together - These loans can assist in putting seniors back in a position to use their existing financial resources strategically.

Thinking strategically into the future with a reverse mortgage is the best support a senior can utilize to reduce the fears connected with leaving or losing their home. Many seniors have worked all of their lives to pay off their home. Today, utilizing their home as their bank will assist in their future peace of mind.