“Our Reverse Mortgage Is Great. Gives Us Some Elbow Room.” And More Testimonies by Reverse Mortgage Borrowers

Posted on September 25, 2011 by Beth Paterson, CRMP

While some people will say they have heard bad things about reverse mortgages I haven’t been able to get the real definition of “bad” or the reasons behind these statements. However, actual reverse mortgage borrowers have lots of good things to say about their reverse mortgage. Let me share some of them here.

“The reverse mortgage has allowed me to be able to breathe again and alleviate $tress” S.R.

“My reverse mortgage gives me financial security due to my fixed income.”

“It was a good experience. The extra money each month is wonderful.” D.M.

“Since my cash assets have been spent down over twenty years of retirement, it became pertinent that my $750 mortgage payment needed to be ended. I got this far in life seventy eighty years, without a monthly pension. Now I have funds to supplement my Social Security Income.” D.W

“It’s great not to have to make mortgage payments.” M.L.

“I did the reverse mortgage to have extra money every month for expenses. It gives me a little more financial freedom.” J.F..

“After retiring I found that my income was too little for the active life I was used to, with trips to family and a modest vacation each year. But bills were piling up and I needed a real solution to stay in my home. I have my dignity and security back again.” E.B.

“The reverse mortgage allows me to have more means to meet future needs. Having it has taken some of the fear away that I had for the future” C.G.

“I did the reverse mortgage to pay medical bills, credit cards and other debts. It has made my life less stressful.” C.J.

“The reverse mortgage has allowed me to stay in my home with comfort to do things with my family.” J.T.

“With joy and delight I have felt hope and even vision anew in knowing that this home belongs to me. It comes with a challenge for me to realize that I am accountable in using these funds to achieve goals otherwise not possible.” B.L.M.

“Affords me the ability to retire and make ends meet.” S.G.

“The Reverse Mortgage helps out a great deal and solves many problems.” C.C.

“As a senior citizen, I had been having some concerns with my finances. Being on a limited income made much needed household repairs and property tax payments very difficult to meet. I was going to have to make a choice soon about whether to continue to live in my house, or move on to an apartment. The costs of continuing to live in my home were getting beyond my means, but I wasn’t ready to leave the home that I had raised my children in. I decided t use the equity in my house to make life easier and meet the financial obligations that I had.” S.M.

“We can now continue to travel to Florida every winter.” L.C.

“A reverse mortgage means I’ll have a place to live even in case of serious illness.” D.B.

“It helps me keep up with bills I cannot cover with my limited income. It also allowed me to remodel my home to improve it’s value and be more comfortable. I greatly appreciate it.” R.D.

“It is really great not to have to be concerned about where the money will come from for my long term care insurance policy payment and emergency repairs. It has relieved us of a great deal of stress and makes grocery shopping a lot easier too.” M.S.

“After six years of non-payment of property taxes, nearly four years of confession of judgement, and the home I had lived in for nearly 69 years within weeks of tax forfeiture, the Reverse Mortgage lender Beth Paterson, I worked with came to the rescue with a Reverse Mortgage. The property taxes are now current for the first time in a decade, and I have a line of credit of approximately $100,000.” R.W.J.

“The only way we could comfortably stay in our home of 42 years” S.H.

“Once we realized that we could only relieve the stress on us by contracting 24-hour nursing care for grandma, a reverse mortgage was the only way to do it.” L.T.

“I didn’t have money to keep up with my living expenses so I did a reverse mortgage. I paid some bills and my credit cards and have some additional funds for future needs.” J.D.

“The relief I feel from not having to make a mortgage payment each month is so great! Now that my credit card is paid off, I will only need occasional one-time draws from my Line of Credit. To continue living in my home and travel and pursue some hobbies.” E.B.

Keep these testimonies in mind and share them when you hear reverse mortgages are “bad.” As you can tell, actual borrowers think they are great!

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-ut

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Facts Are Needed About The 101 year-old Woman Who Did A HECM Reverse Mortgage And Was Evicted

Posted on September 18, 2011 by Beth Paterson, CRMP

This last week headlines across the country talked about the eviction of a 101 year-old Detroit woman with a FHA insured HUD Home Equity Conversion Mortgage (HECM) reverse mortgage. In reading the articles and viewing the TV media pieces I find that facts were missing or misconstrued about this situation and reverse mortgages. While Ms. Texana Hollis is returning home, her story leaves a lot of misinformation about reverse mortgages and the benefits they provide to the many borrowers. Let’s take a look at the misconceptions of Ms. Hollis situation.

Foreclosure/eviction of Ms. Hollis was not due to reverse mortgage but due to lack of payment of taxes, a requirement of the loan (all mortgages as a matter of fact).
Ms. Hollis son and POA facilitated her in getting the reverse mortgage but didn’t follow through on assisting in making sure the terms of the loan were followed, i.e. he or other family members ignored the requirements to pay property taxes, insurance and maintain the home.
I’ve seen statements such as “signed the house over to a reverse mortgage.” A reverse mortgage is a mortgage with special terms for seniors 62 and older. The title remains in the borrower’s name – they are not signing the house over to anyone, they are taking out a mortgage with a lien against the property. My blog article “Beware Of Reverse Mortgage Misstatements – The Fact Is Reverse Mortgage Lenders Do NOT Own The Home!” addresses this fact.
Articles state that the son failed to make payments on the mortgage. Payments are not required on a reverse mortgage. One of the special terms of the reverse mortgage is that the borrower can have access to funds without making monthly mortgage payments. The loan is repaid when the home is no longer the primary residence of the borrower(s). The amount repaid includes the funds received up-front or through monthly payments or draws on the line of credit along with the closing costs, interest and on-going FHA Mortgage Insurance Premiums (MIP).
Ms. Hollis’ reverse mortgage funds were used for home repairs. It appears from several sources that they were also used by the son for his purchase of a car, donations to a church and other things. If this is the case, this is financial exploitation, NOT the fault of the reverse mortgage and NOT reverse mortgage fraud as some articles indicated.
Statements such as, “Ms. Hollis only learned about the eviction when the police arrived and carried out her belongings” are misleading. In reality loss mitigation notices were sent by HUD, however it appears that those who were taking responsibility to “assist” Ms. Hollis ignored these notices. I’ve seen statements that her son who is her POA didn’t tell her about the notices because he “didn’t want to worry her.” In some reports he has admitted to ignoring and throwing the notices away. She personally may not have been informed of the eviction because her family intercepted the notices. Don’t blame HUD or the reverse mortgage for actions of her family. If her family didn’t respond to notices it is neglect on their part (i.e. the son/POA) – not HUD or the reverse mortgage.

And now let’s look at the facts of the misconceptions of reverse mortgages which have been shared along with this story and other media coverage.

The bank does not own the home and the title is not passed to the bank. The title remains in the name of the borrower(s) as long as the home is the primary residence of the borrower. If the borrower does not abide by the terms of the loan (pay property taxes, insurance and maintain the home, the home may go into foreclosure just as with a conventional mortgage.)
One report stated that a danger of the reverse mortgage is if one spouse passes or goes into senior housing, the other may have to pay back the loan. In reality as long as one borrower remains in the home, the loan does not become due and payable until they, the second spouse, is no longer in the home as their primary residence. If a non-borrowing spouse (one that is not on title with the reverse mortgage) is the one remaining in the home, yes, the loan is due and payable because the borrower (the one on title) is no longer in the home as their primary residence – this is the terms of the loan.
HUD Home Equity Conversion Mortgages (HECM) are FHA insured. As with a conventional/forward FHA mortgage, borrowers pay an up-front Mortgage Insurance Premium (MIP) as well as an on-going MIP. The benefits to FHA insuring the reverse mortgage include:
- Guaranteeing the funds are available for you.
- Guaranteeing the lender against default or shortfalls
- Keeping the interest rates lower, the interest rates have historically been lower compared to other mortgages.
- Providing a line of credit growth rate (available only with reverse mortgages).
- Ensuring as a reverse mortgage it is a non-recourse (no personal liability) loan. If the loan balance is higher than what the home can be sold for at fair market value, FHA will cover the difference because one has paid the MIP.
- Requiring counseling by a third party HUD trained and approved counselor.
- The HECMs are highly protected. See my Blog article “You Need To know Reverse Mortgage Borrowers Are Highly Protected.”
“The Government will step in” is another statement I’ve heard. The government doesn’t “step in,” borrowers are paying the FHA Mortgage Insurance to receive the above listed benefits.
And of course we have the all too common statement that reverse mortgages are expensive. Unfortunately, many do not look at the costs of a conventional mortgage, they just make blanket statements without really doing the comparison as I have done. I’ve written blog articles to address this misstatement:

I think it’s important to note that with a forward FHA mortgage, the up-front Mortgage Insurance Premium is 2.25% vs the 2% on the FHA reverse mortgage. So the forward FHA mortgage is more expensive than a reverse mortgage.

Ms. Hollis story has a happy ending, she is being allowed to return to her home of 50+ years according to HUD spoke’s person Brian Sullivan. Unfortunately the story still led to a lot of misinformation and misunderstanding about reverse mortgages giving them a bad name. It would be nice if the media would provide corrections and facts about these valuable and beneficial options for seniors.

Update September 24, 2011: Facts are still needed! The revere mortgage took a hit in the media with misinformation about this viable option for seniors yet we still don’t know if this was a reverse mortgage or a conventional/2nd mortgage that was on Ms. Hollis’ home. However it appears it was NOT a Reverse Mortgage but a 2nd mortgage on the home… or maybe for non-payment of taxes. Earlier in the week another article reported:

“Action News also found out the background on what really happened and why Texana and her son Warren Hollis were evicted from their home.

“At first, it was thought that Texana’s son had signed a reverse mortgage on the house or that maybe it was a back-taxes issue.

“It turns out that Warren took out a second mortgage on the home in return for $32,000. He claims the money was spent on repairs for the house. He also admits to buying a car with the money and donating some of the money to his church.

“He says the remaining $5,000 was used to pay a number of other expenses. Warren Hollis defaulted on the second mortgage and never told his mother what was going on or that he was receiving eviction notices and warnings. The news broke her heart and she had no time to prepare for being evicted.

“The house no longer belonged to Texana Hollis or her son Warren – who had been living with her. It belonged to HUD. The agency had asked for a court order to have the occupants removed from the home.

“One of the judges from the 36th District Court granted that order several weeks ago and the order was carried out on Monday.

Read more: http://www.wxyz.com/dpp/news/region/detroit/hud-will-give-home-back-to-evicted-101-year-old-detroit-woman-texana-hollis#ixzz1Z1RmVafp

And in another story it was reported that it was brought on by HUD due to many years of non-payment of taxes.

I wonder if we will ever know all the details and what type of mortgage it was or if it was for non-payment of taxes…

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Questions About Reverse Mortgages Continue Receiving Misinformation As Responses

Posted on September 11, 2011 by Beth Paterson, CRMP

Recently I saw a question on an on-line forum wondering if the questionnaire’s relative should be doing a reverse mortgage. They stated that the relative who is in their mid-60’s and in great health recently remarried a woman who likes expensive things. This relative evidently has a monthly fixed income of $8,000 and an expensive home and wants to do a reverse mortgage. With concern over the new wife “bleeding him dry” they “want to protect him.” They asked for others experience and opinions on reverse mortgages.

Now before you go off and start stating this person shouldn’t be doing the reverse mortgage because reverse mortgages are bad and/or expensive or the person should be able to live off of $8,000 a month as replies to the questions stated, read my reply:

There is a lot of misinformation about reverse mortgages. Most articles in the media, politicians, so called “financial advisors” who write and/or comment about reverse mortgages and those mortgage professionals who don’t offer them, friends or neighbors with the statements that they are “bad” are based on their own opinions, not on the facts. They have not talked with those of us in the reverse mortgage industry to get the facts. So don’t base your opinion or decision on these sources.

You don’t go to a plumber if you are having health problems, right? You go to a doctor, and not just a generalist but a specialist in the area of need. Well the same should be true with a reverse mortgage – go to a reverse mortgage specialist to get the facts to make your decision.

See my blog post, “Seventeen Facts about Reverse Mortgages That You May Not Know.”

A reverse mortgage is a mortgage with special terms for seniors 62 and older. Some of the differences include income and credit scores are not considered to qualify and monthly mortgage payments are not required. Rather than a 15 or 30 year term, the loan is due and payable when the home is no longer the primary residence of the borrowers or on the 150th birthday of the youngest borrower. In addition, the reverse mortgage is non-recourse, which means if the loan balance is higher than what the home can be sold for there is no personal liability to the borrower or their heirs. If the home is sold for more than the loan balance, the borrower or their heirs receive the difference.

Often thought of or stated as expensive, the costs are actually comparable to a conventional mortgage except for the FHA Mortgage Insurance Premium. See a side-by-side comparison at “Comparing Reverse Mortgage Closing Costs To A Conventional Mortgage – You’ll Be Surprised They Are Not That Different.” And because the interest rates are historically lower than conventional mortgages, in the big picture the reverse mortgage can be less expensive.

Generally seniors don’t qualify for a conventional mortgage. And even if they do, one needs to consider that payments are required. What happens if “life happens” and one can no longer make the payment? They could be facing foreclosure. I often get calls from those who took out a conventional mortgage and can no longer make the payments and now want to do a reverse mortgage. Unfortunately, I often have to say that there are not enough funds from the reverse mortgage to pay off their current mortgage (a requirement of the reverse mortgage). They would have been better to do a reverse mortgage in the first place.

Now with that said, just like anything, a reverse mortgage is not right for everyone. While there are no limitations on how the funds can be used one should consider if they will have funds to cover taxes, insurance, maintaining the home as well as other needs in the future.

It sounds like in this situation there is more concern about the new wife’s spending habits. Are you or others concerned about the new wife eating away at an inheritance? Because reverse mortgage proceeds use the equity, there may be less inheritance for heirs – this can be considered a negative of the reverse mortgage.

I would suggest a conversation with your relative to understand their reasons for a reverse mortgage. Is the pension and income paying for the everyday lifestyle but they want extra to enjoy life such as traveling or modifying their home to be prepared for the future? Do they have a financial and estate plan in place? Do they have long term care insurance to cover needs of their future? Have they talked with an elder law attorney to set up a will or trust to determine that the inheritance will go to his heirs and not all go to his new wife?

After helping them get the facts and looking at options, keep in mind it is his decision in the end. You might check out, “Who Are We To Judge How Reverse Mortgage Funds Should Be Used?

Find a reverse mortgage originator who specializes in reverse mortgages (not conventional mortgages) who has experience and will provide you with the facts and details. Look for one who has the client’s best interest in mind, not just their own. Work with one who is local – not doing applications through the mail (for example I originate in Minnesota and meet with borrower’s and their relatives in person.). And see if your relative will allow you to be part of the meetings with the originator and the counseling. “What to Consider When Talking With Reverse Mortgage Lenders” will help you know questions to ask reverse mortgage originators and determine who you should have assist you with a reverse mortgage.

To get facts and details on reverse mortgages, explore my website, http://www.RMSIDAC.com and other articles on my blog, http://www.BethsReverseMortgageBlog.wordpress.com.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

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Monthly Archives: September 2011

Facts Are Needed About The 101 year-old Woman Who Did A HECM Reverse Mortgage And Was Evicted

Questions About Reverse Mortgages Continue Receiving Misinformation As Responses