Why Are People So Resistant to Reverse Mortgages?

Posted on February 17, 2012 by Beth Paterson, CRMP

I was at a resource provider network meeting the other morning when a Minnesota County government agency talked about their financial and foreclosure counseling services. When I mentioned they should keep in mind that a reverse mortgage should be considered for homeowners over 62 the response was resistance. Here’s how the conversation went.

Me: “Keep in mind that a reverse mortgage may be an option for your clients who are homeowners 62 and over.”

Agency: “Our clients don’t qualify for a reverse mortgage.”

Me: “Why do you say that? Are they homeowners 62 and over?”

Agency with hesitancy: “Some, but not many.”

Me: “Well for those 62 and over a reverse mortgage may help them.”

Agency, again with hesitancy: “They are in foreclosure.”

Me: “But a reverse mortgage may help save their home from foreclosure.”

Agency, defensively: “But one spouse may not be 62.”

Me: “The requirement is that both borrowers be 62 so the younger one would need to be removed from the title, and while that is risky and not normally recommended, if it’s a matter of losing their home or being able to stay in their home, the reverse mortgage may be an option. It’s at least worth considering.*”

*I suggest they talk with an attorney so they are aware of the risks of removing a younger person from the title.

Agency: “But there may not be enough funds to pay off their mortgage.”

Me: “We can work with the banks to negotiate them taking the reverse mortgage proceeds as a payoff. It’s been done where the banks accept the reverse mortgage as a payoff. It can be a challenge but it is at least worth a discussion and a try. We have done some amazing things.

“All I’m saying is that instead of saying there aren’t options, we can’t help, the reverse mortgage should at least considered as an option and explored for those over 62.”

This conversation raises the question, why are people resistant to reverse mortgages when it can make such a difference in the lives of seniors?

Are they so hung up that it’s not their agency solving the problem they don’t think anyone can? Or is it they don’t want someone else to help? Are they afraid that someone else can help and they can’t? Is it because their funding depends on them solving the problem and it’s more beneficial to them to not help and not provide all options? Is it because they are a non-profit government agency and we are a private for-profit company? Is it they don’t think I should get paid for my services (after all as a government non-profit agency and as paid staff they are making a salary with sick days and vacation days while I’m commissioned, no paid sick or vacation days.)? Or is it they just don’t understand reverse mortgages?

I don’t understand why they or others wouldn’t want to offer an option that may benefit the seniors even if it’s not their program that solves the problem. Even if it helps just one person/couple, isn’t it worth it?

A reverse mortgage is a mortgage that has special terms for those 62 and older to use their equity while they still own and live in the home. Income and credit aren’t considered to qualify for an interest rate and monthly payments are not required during the term of the loan. The loan is due when the home is no longer the primary residence of the borrower(s).

The most common reverse mortgage, and only one available in Minnesota, is the HUD Home Equity Conversion Mortgage or HECM which is insured by FHA. The borrowers pay a FHA Mortgage Insurance Premium (MIP).

When the loan is being paid off, the borrower or the estate keep any difference between the loan balance and the sale price. As a non-recourse loan, if the loan balance is higher than the sale price on the home, the lender is repaid the fair market value and the borrower doesn’t have to pay the difference – the FHA MIP covers the difference. The loan documents spell out there is no personal liability to the borrower or their estate, unlike conventional mortgages that can get funds from the estate to cover the loan balance.

One of the other meeting attendees commented to me after the meeting, “It appears they don’t really care to be helping people.” That’s a sad impression to give when you are an agency paid to help the community.

I believe we all need to work together and offer options to help, whether non-profit, government or private for-profit. If the reverse mortgage is considered and explored but is not the right option, I want to be able to know about other options and people who may help so I can do referrals to someone who might be able to assist them. This is why I attend provider network meetings to learn about resources and options.

I wish others wouldn’t be so resistant to reverse mortgages when they can make such a difference for seniors.

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-xc

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.

“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!

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.

Minnesota 7-Day Cooling Off Period Law is Disservice to Seniors

Posted on July 17, 2011 by Beth Paterson, CRMP

It’s coming up on a year since the Minnesota law went into effect requiring a 7-day cooling off period in addition to the Federal 3-day recission period on all refinances. No matter how much I explain that the law was put into place by legislators with the intention of protecting them, since then every borrower has complained about waiting an extra 7 days. Borrowers have stated:

“I’m being treated like a child, not letting me decide that I’m ready to proceed.”
“Why do I have to wait extra time, I’ve already waited long enough.”
“How fast can we close? I’ve already made up my mind.”
“I took a year to decide, I don’t need more time.”
“This takes away my dignity.”

Or variations of the above but all with the same message.

Borrowers have the right to cancel their loan at any time during the processing which usually takes 30 to 45 days. They are in control of whether they want to proceed or not during the entire time. And after closing they have the Federal 3-day recission period during which time they can also choose to cancel their loan. The additional 7 days is an irritation rather than a protection!

Consequently the Minnesota law makers did nothing to protect seniors when they passed this unnecessary law in the 2010 Minnesota Legislation. If they really want to protect seniors they should look at other things that would be true protections, not putting in unnecessary regulations.

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

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.

What Gives You A Sense of Independence? A Reverse Mortgage May Provide You These Freedoms!

Posted on July 2, 2011 by Beth Paterson, CRMP

What gives you a sense of independence? When I think of independence I think of having freedom of choices and not relying on others. We all want our independence including seniors. How can seniors maintain that independence, have freedom of choices and not rely on others, the government or their children? A reverse mortgage provides independence for home owners 62 and older.

Having one’s own funds for home repairs, going out to lunch with friends, traveling, visiting family across the country, purchasing a new car, paying medical bills or for medications; paying for help with housework, meal preparation, yard work or transportation, whatever is desired can give that feeling of independence. Being able to pay off a mortgage to improve cash flow to to save one’s home from foreclosure gives one relief and freedoms.

While some assistance may be needed for seniors to remain in their home, not relying on children or the government for help and being able to choose a home care agency of their choice will give them the sense of independence. Using the equity in one’s one with a reverse mortgage can provide seniors the funds for their independence.

“Now I have my dignity back and my independence” was what Edna exclaimed after her reverse mortgage was closed.

Another Minnesota reverse mortgage borrower, Bea, said, “With a reverse mortgage you begin to have independence anew and you begin to feel more secure. Being free from monetary anxiety, you have better control over spending your equity.” The reverse mortgage allowed Bea to pay off a mortgage, then to travel to family weddings and reunions. Several years after she initially did her reverse mortgage more recently Bea is using her reverse mortgage funds to pay for home care that is needed to keep her independent and at home.

Ted, age 91 and Anna age 87, Minnesota homeowners, were proud and didn’t want to discuss their financial situation. However, their son-in-law finally talked to them about doing a reverse mortgage. When I met them and we started the reverse mortgage process, the children and I were told they were doing the reverse mortgage so they could put new linoleum on their kitchen floor. Once the loan was closed I was informed by their children that they had indeed put in the new linoleum along with new windows and they bought some new furniture. The kids were going to Ted and Anna’s and were told, “Don’t pull in the drive way, we just had it blacktopped.” When Ted and Anna went out to eat with their kids, they could pay for their kid’s meals too making them feel good that they could treat their children to a meal.

Then one day Anna and her daughter were sitting at the kitchen table and Anna shared that before their reverse mortgage they used to go 3 days at the end of month without food or even milk because they would run out of money from their Social Security. As they were sitting there and looking at the paper, Anna exclaimed, “Look, Depends are on sale, I can now stock up.”

While Ted and Anna were too proud to let their children know their financial situation initially and they didn’t want to depend on them to assist with their living expenses, once they signed the reverse mortgage documents they kept their independence and had funds for their needs and desires. This also improved their dignity.

A reverse mortgage insured by FHA, an agency within HUD, is known as a Home Equity Conversion Mortgage or HECM. As one of the most protected financial options available for seniors, it allows them to use the equity in their home without looking at income or credit scores to qualify. With no monthly mortgage payments, cash flow can be improved by receiving money in monthly payments, a line of credit, lump sum or a combination of these.

The title remains in the borrower’s name and the loan is not due until the home is no longer the primary residence, when they die, sell or move or on their 150th birthday. Repaid from the sale of the property, as a non-recourse loan if the loan balance is higher than what the home can be sold the borrower or their heirs are not responsible for the difference. If the home is sold for more than the amount due then the borrower or their heirs keep the difference.

As you bring out the red, white and blue, hang your flags and gather with family to celebrate the independence of this great country of ours, ask what independence means to your loved ones. What is needed to help them remain independent and in their home, not relying on the government or on you, their children. Then explore a reverse mortgage, get the facts about them, and see if it might be an option for their situation to maintain their independence. Happy Independence Day!

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.

We Are Not Chicken Littles – The Sky Is Not Falling In the Reverse Mortgage World!

Posted on June 22, 2011 by Beth Paterson, CRMP

With Bank of America and Wells Fargo exiting the reverse mortgage industry along with the picture the media paints, I’m reminded of the story of Chicken Little thinking the sky is falling, looking at the doom and gloom. Or jumping to the conclusion that because they have left the industry the reverse mortgage option is going away.

However, the sky is not falling in the reverse mortgage world! Reverse mortgages are still available and a viable option for senior home owners.

There are still lenders lending, some new ones even entering the industry. FHA is still insuring the Home Equity Conversion Mortgage (HECM), covering the risks for the lenders when the home values drop. Investors are still investing in reverse mortgages. Servicers are still servicing reverse mortgages.

HUD still guarantees the funds are available for borrowers. Monthly payments are still not required. The loans are still non-recourse which means no personal liability to the borrower or the estate if the loan balance is higher than what the home can be sold for at the time the loan is due and payable; the FHA Mortgage Insurance Premium covers the difference. Reverse mortgage borrowers still have protections including the required counseling by a third-party HUD trained and approved counselor. The HECM Standard, HECM Saver and HECM Home Purchase programs are all still available.

Seniors still own their home. The majority of people want to remain in their home. Staying in one’s home can be less costly than moving and renting in senior housing. The reverse mortgage remains a viable option to help seniors remain in their home.

Reverse mortgage interest rates are still low. The funds can still be received in monthly payments, line of credit, a lump sum or a combination of these. The line of credit still has a growth rate. The monthly payments to the borrowers can still be received as tenure/for life or structured as one needs. Reverse mortgage funds are still generally considered tax free. Social Security and Medicare are still not affected by a reverse mortgage. Medicaid (Medical Assistance in Minnesota) can still be received with a reverse mortgage.

The funds can still be used for: Paying off current mortgages and helping one out of foreclosure. Paying for home repairs and home modifications, medical expenses, home care and long term care. Paying taxes and protecting other assets. Fulfilling dreams or whatever one needs or wants.

In the world of Reverse Mortgages SIDAC, we are NOT Chicken Littles, the sky is NOT falling. We ARE STILL offering reverse mortgages through lenders who are committed to helping seniors stay in their home and have security, independence, dignity and control.

This material my be re-posted provided it is re-posted in its entirety and without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-s1

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.

A Reverse Mortgage Should Be A Last Resort… To What?

Posted on June 7, 2011 by Beth Paterson, CRMP

So called senior advocates often state a reverse mortgage should be a last resort. My question is to what?

A Home Equity Loan? To qualify for a home equity loan or a traditional loan a lender looks at a borrowers’ credit, income, assets, and ability to make payments. Most seniors don’t qualify for a home equity loan.

Even if a senior does qualify now, if “life happens” and they have to juggle making a mortgage payment or having funds for other expenses, their stress level increases. And if they don’t make their mortgage payments they could be facing foreclosure.

I receive calls on a regular basis from seniors who did a home equity loan or traditional loan just a few years ago and now they can’t afford the payments. When I run the calculations more times than not I find there are not enough proceeds from the reverse mortgage to pay off their current mortgage, a requirement of the reverse mortgage, mainly due to lower home values. But could also be due to the reverse mortgage qualifying factors:

the amount one qualifies for with a reverse mortgage is determined by the age of the youngest borrower (the older one is the more one will receive)
the home value (determined by a FHA appraisal)
the Expected Interest Rate of the program chosen (the higher the interest rate above the 5% FHA floor, the less funds are available)

A combination of these factors could mean there are not enough funds to pay off a current mortgage at a later date. For example, even though one is older in three or four years, the interest rate could be higher and the home value lower meaning less funds available.

The reverse mortgage as a “last resort” to a home equity loan or traditional mortgage is not generally a wise decision – one could have larger issues in the future.

A last resort to selling and moving? The time it takes to sell the lower home values, the real estate costs and moving costs can be prohibitive for selling and moving to be a better option to a reverse mortgage. In addition most seniors want to stay in their home. See comparisons of costs in my article, “I Want To Stay in My Home – Don’t Tell Me To Sell!” and “Be Educated About Your Options Of Care And Financing The Care.”

A Loan from a family member or friend? Or help from a family member? Is there someone who can and is willing to help financially? What happens if “life happens” to them, i.e they lose their job or have health problems? This could negatively impact finances for everyone, cause stress for everyone and impact relationships. Again, generally not a better option to a reverse mortgage.

Skimping on necessities? “Getting by” without a reverse mortgage? Doing without to preserve equity for what may be future needs or to leave an inheritance for heirs? Living from Social Security check to Social Security check just to get by and maybe doing without some of the things in life that give us dignity such as having lunch with friends, getting one’s hair done, or having cable TV… is this really a good option over a reverse mortgage? Why should one be warned off a reverse mortgage rather than living life comfortably? Or as Ed, a reverse mortgage borrower stated, “the reverse mortgage gives us some elbow room.”

Not having debt but waiting, saving the equity? Why attempt to preserve equity from one’s home for the future or as an inheritance for heirs? For what? Why shouldn’t one enjoy the extra luxuries in life such as buying a car, taking a dream vacation having funds to attend a family reunion or wedding? A reverse mortgage could help one remain independent, protect other assets, have security knowing one has funds for what one needs or wants as well as have control and choices of one’s lifestyle.

As a senior advocate myself, I help seniors review all their options and educate them on the reverse mortgage so they can make an informed decision and the choice of what best fits their needs.

A true senior advocate will stop stating a reverse mortgage should be a last resort and see that in the big picture the reverse mortgage is generally the best solution sooner than later. At least it should be reviewed as a valid option for seniors. And then let the senior make their own personal decision.

My question remains, a reverse mortgage should be a last resort to what? Mary and Larry, who did a reverse mortgage, stated, “A last resort? When one is retired it is the last resort. Our reverse mortgage has been wonderful to meet our needs and maintain our lifestyle.”

Reverse Mortgages Give Reasons For Hope

Posted on April 22, 2011 by Beth Paterson, CRMP

As I was reflecting on the hope that this season brings I got to thinking about the reasons the reverse mortgage gives hope to seniors. Here are some of the reasons for hope with a reverse mortgage. Yes, the list is long but seniors have a long list of wants and needs for hope. With a reverse mortgage one will be able to:

Stay in one’s home where they may have raised their family, are familiar with the neighborhood and their neighbors and where they usually want to remain.
Pay off a current mortgage to eliminate the monthly mortgage payments.
Save one’s home when faced with foreclosure or tax forfeiture.
Have improved cash flow with no monthly mortgage payments.
Have funds for making home improvements or home modifications.
Retire and not feeling like you have to work just to have money to pay the bills.
Have cash flow to be able to pay taxes.
Have funds to pay for home health care.
Have funds for some assistance with home care or companion services.
Have funds for adult day services.
Have funds for medical expenses and prescriptions.
Afford going to the dentist.
Afford new eye glasses.
Have funds for the needed hearing aid.
Have funds to cover long term care expenses.
Cover everyday living expenses.
Not rely on credit cards.
Not rely on children.
Have funds for the little extras in life, like:
- getting one’s hair done,
- having cable TV,
- buying groceries,
- going to lunch with friends,
- treating their children to dinner,
- going to community plays or the theater or a concert,
- taking the grandchildren to the zoo or a movie,
- Depends (I had a client say with their reverse mortgage they could now afford to by Depends),
- being able to do hobbies.

Purchase a more dependable car
Afford transportation if one can no longer drive.
Afford the travel for the family wedding or reunion.
Take the vacation they have dreamed of all their life.
Protect some of their other retirement funds or investments where there might be taxes or penalties on withdrawals.
Purchase a new home to downsize and/or move closer to family
Have funds for emergencies.
Reduce financial stress.
Have funds to full fill needs and goals.
To live with security, independence, dignity and control.

I have helped seniors where a reverse mortgage has fulfilled all of these reasons and more, providing hope for their future (visit the links below for some stories). A reverse mortgage has given hope to thousands of Minnesota seniors so they can remain in their home with security, independence, dignity and control even during trying times. If you know a senior who is looking for hope for one of the above reasons, a reverse mortgage may be their answer.

To determine if a reverse mortgage is right for one’s situation, talk with an experienced licensed reverse mortgage expert to get the facts. Learn some of the facts at our website: www.RMSIDAC.com. “What to Consider When Talking With Reverse Mortgage Lenders” will help you determine questions to ask when choosing your originator.

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/pxPEm-pQ

Related articles of stories on how seniors have used the reverse mortgage and how it’s made a difference in their lives:

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.

I’m In The Reverse Mortgage Industry Because…

Posted on April 16, 2011 by Beth Paterson, CRMP

We received a call the other day from the daughter of a reverse mortgage client who we had closed several years ago. Her mother, Mildred, had been in foreclosure, in fact in this situation the sheriff’s sale had already happened.

Because credit scores and income are not required to qualify for a reverse mortgage and there were enough funds to pay off the mortgage, Mildred qualified for the reverse mortgage and we were able to save her home from foreclosure and redeem it from the sheriff’s sale. With no monthly mortgage payments the reverse mortgage has allowed Mildred to live in her home with improved cash flow.

As she has done through the years, Mildred’s daughter was calling just to say, “hello.” During the calls she always let us know how her mother is doing and what’s happening in her life as well. She reported that her mother is happy that she is still able to be living in her home. She’s doing well and now goes to adult day services to provide her some socialization.

It’s a pleasure to get these calls and hear how our clients are doing. I’m in the reverse mortgage industry because I am able to make a difference in one’s life so they can remain in their home as they so choose. It’s an honor to have our clients and their family members call to just say “hello” and let us know how they are doing. Even years after the closing it’s rewarding to hear we have made a difference in their life. I’m blessed to be in the reverse mortgage industry and help our Minnesota seniors and their families.

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.

Can’t Afford To Retire? Maybe There’s An Answer!

Posted on August 16, 2010 by Beth Paterson, CRMP

With mortgage payments due, retirement funds decreased or decreasing it is harder for seniors to retire. However, there may be the option to retirement.

Working a 40 hour week at a very physically demanding job, Len continued to work in order to cover their mortgage payments. After hearing about a reverse mortgage, they contacted me, got educated with the facts and decided to proceed. Once their reverse mortgage was closed and their conventional mortgage paid off, eliminating mortgage payments Len was able to retire. With no mortgage payments, he and his wife, Maricarol are now enjoying their retirement, living in their Minnesota retirement home close to their children giving them the opportunity to spend more time with their children and grandchildren. They said, “Without the reverse mortgage Len would not have been able to retire.”

Trying to make ends meet and make his mortgage payments, Jack is still working. Having completed his Home Equity Conversion Mortgage (HECM) application, he is anxious to get to the date of his closing so his mortgage will be paid off with the reverse mortgage and his cash flow improved.

A mortgage with special terms for seniors, a reverse mortgage allows those 62 and over to keep the title, remain in their home with no income or credit score qualifications, no monthly mortgage payments, and a due date when the home is no longer their primary residence or their 150th birthday. (A jumbo reverse mortgage does have a credit score qualification, however.) Considered a lien against the property the IRS generally does not consider the reverse mortgage loan advances to be taxable income.

Offering more flexibility, the reverse mortgage proceeds can be received in monthly payments (for life or structured to borrowers needs), line of credit (with a growth rate), lump sum or a combination of these.

The loan amount is determined by the home value, age of the borrower (the older one is the more they can access), interest rate and program chosen. The fixed rate option requires all proceeds to be drawn as a lump sum, the adjustable rate allows the flexibility of the funds to be received in monthly payments or a line of credit. One’s circumstances will help decide which program is best for their situation.

At 79, Mike was still working to supplement his Social Security income. Then he injured his knee and couldn’t work any more. Without his work income he couldn’t afford to cover his living expense, which included a $700 mortgage payment, let alone his additional medical expenses.

Mike did a reverse mortgage and with his proceeds, his conventional loan was paid off as well as some other bills. He now has a better cash flow because he doesn’t have to make any mortgage payments. And having chosen the monthly payment option, and he is receiving monthly payments to replace his working salary.

He’s very relieved that he doesn’t have to worry about where the money is going to come from to make his mortgage payment or maintain his lifestyle. Even with his knee healed he doesn’t have the need to work and he doesn’t have to worry about losing his home if he couldn’t make a mortgage payment. He now has security, independence, dignity, and control during his retirement.

If you know someone 62 and older thinking they can’t afford to retire, have them explore a reverse mortgage. Being educated with the facts the reverse mortgage may well be their answer to retiring.

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.

Minnesota Reverse Mortgages SIDAC

Minnesota Reverse Mortgage Information, Facts and News from the Experts Excelling in Service

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