Savvy Senior Sources…Talking With Experts TV Show Released

Posted on May 18, 2015 by Beth Paterson, CRMP

I’m excited to announce the release the new TV show, Savvy Senior Sources…Talking With Experts that I host and produce. The series of TV shows talk with experts for guiding your way through resources A to V in areas that seniors, their families, caregivers, and trusted advisors will find helpful for planning, aging in place with the ability to stay in their homes and remain independent or where to turn if and when going through the transition. The shows give viewers the opportunity to “meet” the trusted providers of senior services before making a phone call to them.

Brought to you from Savvy Senior Sources, LLC, Reverse Mortgages SIDAC and GWG Life, LLC are proud sponsors of the shows.

Please tune in and subscribe to the YouTube Channel Savvy Senior Sources to be notified when the new shows are broadcast. https://www.youtube.com/channel/UCmgVGVbfY6-RcHkeBc7WmPQ/feed

Enjoy the shows!

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.

Food For Thought to Fulfill Key Roles of Social Workers

Posted on March 4, 2015 by Beth Paterson, CRMP

During March we recognize and honor Social Workers for the value they bring to our seniors.

In a variety of roles, with their knowledge and experience in providing resources, social workers assist our seniors. Social Workers are inspiring to improve lives and assisting with problem solving as well as resolving issues that may negatively impact the community. I’d like to offer some food for thought to fulfill their key roles.

Over ninety percent of seniors want to remain in their home. They are comfortable living in the home and community with their memories where they raised their children, know the neighbors, are familiar with the grocery store and the pharmacy. They feel safe and warm in their familiar surroundings. With the home as their identity it gives them comfort being in their long time home. So let’s talk about a couple ways to help fulfill the desires of seniors, improve their lives and help them stay in their home and their community.

Home care services are an option to help seniors who need some assistance to remain in their home. Everything from short time-frames to 24 hour care, including recovery care and respite care or even nursing level of care is available. Home care services can help seniors live at home indefinitely. The one-to-one ratio of care versus 1.5 or more of care per person in a nursing home offers safety.

Their services offer:

Companionship and socialization – home care aides can watch TV with them, play cards, do their hobbies, take seniors to the movies or watch them at home, shopping, or even travel with them.
Ensuring meals are prepared and eaten even providing someone to talk with during the meal
Medication reminders
Bathing, housekeeping, running errands
Escorting to appointments
Anything needed to maintain their life in their home

An assumption is often that one needs to move to assisted living, a nursing home or care center. What is not realized is that rent in assisted living can be $3,000 to $4,000 per month. Additionally home care services are added on to the rent bringing the monthly costs to over $5,000 to $8,000. Nursing home care can run $6,000 to $12,000 a month depending on a single or double room, the facility amenities and level of care.

Wondering how to pay for home care and keep the seniors in their home? A reverse mortgage may be the solution. A reverse mortgage is a home equity loan with special terms for senior homeowners 62 and older. Reverse mortgage facts are:

Borrowers own home, no one else does.
Seniors can stay in their home as long as it’s their primary residence (in the case of a couple as long as one is still in the home).
Borrowers won’t lose their home because of a reverse mortgage if they abide by the terms of the loan – they don’t have to make monthly mortgage payments but do need to pay property taxes, hazard insurance and maintain the property or they may face foreclosure.
Funds are generally not considered income for tax purposes.
Loan is government insured and guaranteed to be there for them.
There is no personal liability to them or their heirs when the loan is repaid, as a non-recourse loan the loan is repaid from the property only.
They or their heirs get to keep any remaining equity after the loan is paid off if the home is sold for more than the loan balance.

Consider this…

They can access more funds if their mortgage is currently paid off or has a low balance.
Their cash flow improves when their current mortgage or lien payment is eliminated.
They’ll have extra cash for whatever they need or want!
They can still receive Medical Assistance, Elderly Waiver or other public benefits and do a reverse mortgage.

I have often heard how seniors and their families have benefited from using a reverse mortgage to pay for home care. “Once we realized that we could only relieve the stress on us by contracting 24-hour [at home] nursing care for grandma, a reverse mortgage was the only way to do it.” Liz wrote me. Another borrower, Robert, did not want to go to a nursing home, yet he needed long term care. George, Robert’s son, decided they should do a reverse mortgage to pay for the home health care needed to keep Robert at home where he had raised his children. Robert is happy because he is living where he chooses. George is happy the family can fulfill Robert’s wishes of staying in his home and still receive the needed care.

Ruth had ALS and wanted to stay in her home until she passed. Working with her Social Worker and home care company she did a reverse mortgage. Last week I received a call from her daughter telling me her mom had passed away in her home as she desired. The reverse mortgage had helped her fulfill the dream of her staying in her home and receiving the 24-hour care she needed.

Giving seniors the freedom to stay in their home fulfills their desires of remaining in their home close to their memories and familiar surroundings. Social Workers offering home care and reverse mortgage options fulfill the Social Workers role of inspiring to improve lives, assisting with problem solving and resolving issues as well as having a positive impact on the community.
Happy Social Work Month to all our social workers!

Originally posted in 2010, Updated 2015
© 2010-2015 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

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-1c5

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 Experiences with Getting Our Reverse Mortgage

Posted on February 24, 2015 by Beth Paterson, CRMP

Happy With Reverse Mortgage Actual reverse mortgage borrowers have good things to say about their reverse mortgage experiences. Let me share what some of our Minnesota reverse mortgage borrowers have said.

Dave shared, “Having had an accident that eliminated my of my teeth, total dental implants was required. Without a reverse mortgage I could not have raised the money to have the implants done. It was a great relief to be able to smile again and eat sweet corn again.”

To increase his cash flow Bernie did a reverse mortgage and had this to say, “After talking with 2 other reverse mortgage representatives, receiving apologies for non-functioning DVDs, and talking to an attorney, I chose Reverse Mortgages SIDAC. It is so helpful to deal with local persons. Both Beth and Steve followed up with everything. They were very helpful in personal visits and phone calls. Beth has also been helpful with other senior issues.”

Larry and Karen* did the reverse mortgage to stabilize their finances. They found Reverse Mortgages SIDAC to be friendly, courteous and respectful of them. Additionally they shared they found that all pertinent information was discussed regarding reverse mortgage options and costs and the details were explained so they understood them. They also felt that they were informed of what to expect during the processing and kept informed of the status through the process. In addition they said they received explanations of the forms that were signed at closing. Overall they shared their experience was positive.

Mike shared, “Without the help and knowledge of Beth Paterson who first told me about the reverse mortgage to buy I would never have been able to get our beautiful new townhome, which my wife needs because of her mobility to navigate a lot of stairs. I owe Beth a big debt of gratitude. She is the best! She is knowledgeable and she cares and worked tirelessly for us.”

Wayne recommends us stating, “Reverse Mortgages SIDAC is very customer focused and will settle for no less than what the applicant request’s objectives are. They knew the “system” very well and lead the borrower though it step by step. Above all, Reverse Mortgages SIDAC is respectful and honest.”

Helping them out of foreclosure, Gary and Cathy* said, “Thanks so much! Beth and Steve you guys are the best!”

Satisfied Reverse Mortgage Borrower Yvonne wrote, “My experience with Beth and Steve was very enjoyable. I was always able to reach one of them. I paid off my mortgage, so eliminated the monthly mortgage payment! It has made a big difference in my quality of life to have that additional income every month.”

To supplement her income, Marilyn did the reverse mortgage, sharing, “I didn’t really want to have to do this reverse mortgage because I’m too proud. But thank goodness it was there for me. Steve was so very helpful as was Beth. At closing all documents were in order perfectly. I’m very glad I reached out to this company. Everything went so well.”

Bonnie did the reverse mortgage to “secure my retirement” allowing her to retire. Of her experience she said, “Beth and Steve were wonderful! Caring, efficient, thoughtful. All are words that describe them and their service – I had contacted a nationally advertised company but did not feel at all comfortable with them. I went with Reverse Mortgages SIDAC because they are local and knowledgeable about Minnesota and my needs here.”

“Having Beth and Steve to guide me through every step of the process was the blessing that made a reverse mortgage possible. We were able to complete the process in time to obtain the maximum possible funds under the old system, making my dream of remodeling possible,” Matthew stated.

These are just a few of the experiences reverse mortgage borrowers have had. Keep them in mind as you hear about reverse mortgages and are considering one. Work with a reverse mortgage originator who is local, specializes and has experience in reverse mortgages, is ethical adhering to the NRMLA pledge and takes their time to give you the details so you understand the reverse mortgage and will have a positive experience and find the benefits. If you’re in Minnesota, give us a call.

*Some names changed to protect privacy.

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 to expect working with Reverse Mortgage Originators: Our pledge to our borrowers

Posted on February 7, 2015 by Beth Paterson, CRMP

Reverse Mortgage Borrower Satisfed with process I’ve heard from borrowers that when they have inquired about reverse mortgages from some lenders they sometimes feel pressured, receiving numerous phone calls, wanting to send them the counseling information and an application before they are ready to make a decision.

I happen to be sitting at the kitchen table with a homeowner informing her about reverse mortgages, providing her with all the details and facts and answering her questions when she received a call from another loan officer. She kindly explained to the caller that she was actually meeting with me face-to-face, a local originator and was not interested in further communication from them, the caller. Before hanging up, even though she had said she was taken care of, the other loan officer said they were still going to call her back. She expressed frustrations that they didn’t listen to her and that she had also received other calls pressuring her before she had heard about me.

As professional reverse mortgage originators we should respect your decisions and not pressure you into making a decision. Those of us who specialize in reverse mortgages and are members of the National Reverse Mortgage Lenders Association (NRMLA) pledge to a Code of Ethics and Professional Responsibility. Pledging to serve you with integrity and keep your best interests as our primary consideration, here is the pledge other NRMLA members and I have made that we will:

Know and comply with all State and Federal laws and regulations that protect reverse mortgage borrowers
Present you with the full range of reverse mortgage products available from our company.
Clearly explain the terms, benefits and costs of each product we present.
Inform you of your responsibilities as a reverse mortgage borrower including paying real estate taxes on time, keeping the property properly insured and maintaining the home in sound condition.
Work with you and, if you request, with your family and financial advisors either face-to-face or on the telephone as frequently as you choose to educate you, answer any and all questions and help you assess whether a reverse mortgage might be beneficial to you.
Explain the benefits of and statutory requirement that you have reverse mortgage counseling.
Provide you with a list of HUD-approved independent housing counseling organizations that employ exam qualified counselors to serve you. The choice of the organization is yours and yours alone.
Help you prepare for your counseling session to make it most effective by providing you with questions you might ask and information you should be prepared to provide to the counselor.
Prepare loan comparison projections and an amortization table for the loan being proposed to review at your counseling session.
Not charge any fees prior to the completion of mandatory counseling.
Help you analyze your financial ability to meet your responsibilities under the reverse mortgage.
Recommend that you seek professional advice if you are receiving assistance from SSI, Medicaid or other government programs.
Recommend you seek professional tax advice when appropriate.
Allow you to decide when to close on the reverse mortgage loan and not pressure you to make a decision.
Provide you with opportunities during the loan process to change your mind and not take the loan.
Pay off the existing liens shown of record, verify taxes are paid, and make sure that you have proper insurance upon closing.

Beyond the NRMLA pledge, there is a select group of specialists, the Certified Reverse Mortgage Professionals (CRMP), who have taken the extra step and demonstrated their knowledge and competency in reverse mortgages by having a minimum of two years’ experience, personally closing 50 or more loans, earning 12 hours of continuing education courses specific to reverse mortgages and ethics, passed a rigorous exam as well as a background check. Each year CRMPs must complete an additional 12 hours of continuing education to remain certified. CRMPs are dedicated to upholding the industry high standards of ethical and professional practices.

I am proud to say I have earned the CRMP designation. You can find a list of the other CRMPs on the NRMLA website.

Additionally Reverse Mortgages SIDAC has their own Code of Conduct that we adhere to.

As you explore the reverse mortgage option, make sure you are working with a reverse mortgage specialist who has experience with and knowledge about reverse mortgages, not just the title, one who adheres to the NRMLA Pledge to Reverse Mortgage Borrowers and even more specifically one who is a CRMP as well as one you are comfortable and respects you.

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.

Think you don’t need a reverse mortgage? Think again… Maybe you’ll WANT one.

Posted on February 23, 2014 by sidac

I sometimes have people say to me they don’t need a reverse mortgage. Have you said or thought this? Have you thought a reverse mortgage should be a last resort or one should wait until they are older before doing one? Let’s explore how a reverse mortgage can help you with your retirement planning and long term care planning needs. And why doing a reverse mortgage now rather than later may be to your advantage. You might then decide you want one.

A reverse mortgage is a mortgage like any other mortgage, using the equity in one’s home, but has special terms for homeowners 62 and over. There are no income or credit score qualifications for the interest rate and no monthly mortgage payments required. Homeowners maintain the title; the reverse mortgage lender does not own the home. Borrowers are responsible for paying their property taxes and insurance as well as maintaining the home. Reverse mortgage borrowers are highly protected – more so than with any other loan.

The Loan Amount, referred to as the Principal Limit, of the HUD insured Home Equity Conversion Mortgage (HECM) reverse mortgage is based on the age of the youngest borrower, the lesser of the home value or FHA Lending Limit, the program chosen and the Expected Interest Rate. HUD allows certain types of properties to qualify: single family homes, duplexes or 1 to 4 unit properties as long as the home owner is living in one of the units, townhomes, FHA approved condos, and manufactured homes that meet HUD’s requirements.

Let’s compare doing a reverse mortgage now to waiting before doing your reverse mortgage.

	TODAY	10 Years from Now	Barb wrote: “Having a Reverse Mortgage has given me monetary independence and I never realized how important having cash available would be until I fell in October 2013 and broke my right shoulder. Without the Reverse Mortgage money I would have been ‘up a creek without a paddle’. Financial independence saved the day.”
AGE	63	73
HOME VALUE	$200,000	$263,000 (based on Moody’s Analytics Factors)
AVAILABLE (Approximate net after fees)	$92,729	$130,626*
Based on open-ended credit with current Expected Interest Rate of 5.21%; Closing costs of $5,871 plus FHA up-front Mortgage Insurance Premium of .5%; drawing 60% or less in 1^st 12 months; annual FHA Mortgage Insurance Premium (MIP) is 1.25%. The Expected Rate is used to calculate the Principal Limit/Loan Amount and for estimated projections on the loan. Growth Rate in this example based on assumption of Expected Interest Rate of 5.210%. Actual Line of Credit Grows based on current interest rate plus 1.25%. So if interest rate is higher, funds in the line of credit will grow faster. These are estimates, the actual amounts are based on many factors. Different assumptions would result in different numbers.

* If the interest rate is higher, and it is likely that it will be in the future, less funds would be available.

While it may look like it’s to your advantage to wait until you are older, look at what happens if you do the revolving credit reverse mortgage now and leave the funds in a line of credit for your future use.

Funds in the reverse mortgage Line of Credit grow and this is the advantage of doing the reverse mortgage now. Here’s an example of future funds available if at the age of 63 you draw less than 60% in the 1st 12 months and you have $92,729 in your line of credit initially:

Line of Credit Available*	No Draws	After Draw of $5,600 Each Year	Jerry stated, “The Reverse Mortgage enables us to live in our home without mortgage payments. Line of credit will grow for our future needs. The whole package is a win-win for my wife and me.”
Age 68	$136,488	$92,557
Age 73	$188,364	$101,624
Age 83	$358,756	$134,739
Based on open-ended credit with current Expected Interest Rate of 5.21%; Closing costs of $5,871 plus FHA up-front Mortgage Insurance Premium of .5%; drawing 60% or less in 1^st 12 months; annual FHA Mortgage Insurance Premium (MIP) is 1.25%. The Expected Rate is used to calculate the Principal Limit/Loan Amount and for estimated projections on the loan. Growth Rate in this example based on assumption of Expected Interest Rate of 5.210%. Actual Line of Credit Grows based on current interest rate plus 1.25%. So if interest rate is higher, funds in the line of credit will grow faster. These are estimates, the actual amounts are based on many factors. Different assumptions would result in different numbers.

Consider the amount you will have in the line of credit available for your retirement needs or long term care needs when doing the reverse mortgage now.

You can pull all or some of the line of credit funds out as you desire or the payment plan can be changed during the life of the loan, for example, you may change from having some or all of your funds in the line of credit to receiving monthly payments.(1)

Even when you use some of the funds each year you will be taking advantage of having the additional money you need annually plus still having funds in your line of credit for future use.

The Principal Limit or Loan Amount is based on age with the older one is receiving more funds. At the current Principal Limit Factors the increase is approximately 1% for each year. This is lower than the line of credit growth rate. With this taken into consideration, in just 5 years the funds in the line of credit with no draws will likely be higher than if you wait the 5 or 10 years to do a reverse mortgage.

Lucy* stated, “Having done the reverse mortgage has given me a new sense of security.”

Have No Monthly Mortgage Payments, Lower Interest Expense, Funds for Needs or Wants for Retirement Planning or Long Term Care Planning or Needs

In addition to a lower interest rate(2) with a reverse mortgage, eliminating your monthly payment will improve your cash flow because you don’t have to pay out that monthly payment each month. While the loan balance will rise because you are not making payments, the reverse mortgage is non-recourse which means there is no personal liability to you or your estate if the loan balance is higher than what the home can be sold at fair market value in the future. When the loan is being repaid, if the loan balance is lower than what the home can be sold for, the borrower or the estate receive the difference.

You have the funds to use during the term of the loan for whatever you need or want. By doing the reverse mortgage earlier you have use of funds that otherwise would go toward your monthly mortgage payments. Why not improve your cash flow sooner than later?

You do have the option of making payments with your reverse mortgage – it’s just not required. You can choose when, how often and how much you want to pay.

If you make the payment(s) on the reverse mortgage, the payments will reduce the loan balance. And with the adjustable rate, open-end reverse mortgage the payment will increase the Line of Credit meaning the funds are available in the future. And over time the funds available are likely to exceed the home value at the time the reverse mortgage was initiated. Additionally, using Moody’s Analytics, the line of credit is likely to grow faster than the home is appreciating.

Consider if you do the reverse mortgage now, let the line of credit grow and in 8 years you have a medical situation. If you have a conventional mortgage you’ll have to balance paying mortgage payments with paying medical bills. With the conventional mortgage if you don’t pay your mortgage in a few short months you are likely to be facing foreclosure.

If you are choosing to make monthly mortgage payments on the reverse mortgage, you could stop the payment being they are not required and therefore eliminating the risk of foreclosure from not making the monthly mortgage payments. You have the option of resuming making payments if you choose. You still need to pay your property taxes, keep hazard insurance on your home and pay home owner association dues if applicable.

Take advantage of doing the reverse mortgage now while the interest rate is low. And then when the interest rate does increase, the line of credit will grow even faster (the growth rate is determined by the interest on the loan plus 1.25%). The line of credit will grow regardless of the home values increasing or decreasing.

In waiting to do a reverse mortgage until you feel you have a need, you are taking risks. For example:

Reduced Loan Amount or Principal Limit

Over the last few years HUD has reduced the calculation of the Loan Amount (Principal Limit). We don’t know if HUD may find it necessary to decrease this again and/or increase the FHA Mortgage Insurance Premiums. Waiting may mean less funds are available if HUD reduces the Loan Amount or Principal Limit.

Higher Expected Interest Rates Equals Less Funds Available

With FHA Reverse Mortgages the Expected Interest Rate is calculated weekly and is used to determine initial funds available. The Expected Interest Rate is considered a long term projection of future interest rates. As the Expected Interest Rate changes to a higher rate, in the future less initial funds could be available to borrowers. It is unknown as to the timing of when the rates may rise but at some point they will likely go up.

Properties that qualify

HUD already has restrictions on condos that are not FHA approved making it difficult to do a reverse mortgage on condos. (The spot condo approval was removed in 2010.) We are seeing lenders add manufactured homes, log homes, berm, and rural homes to their list of ineligible homes. While there are still some lenders who continue to lend on these properties based on HUD’s requirements, this may change in the future and they are likely to tighten the underwriting requirements for these types of properties. If you are in one of these properties you should look at doing a reverse mortgage now while it’s still an option.

Higher Valued Home Owners Should Do A Reverse Mortgage Before The Lending Limit Is Reduced

Currently the FHA HECM (Home Equity Conversion Mortgage) Lending Limit is $625,500. At some point this rate could be reduced to a lower national limit or be based on a lending limit in the county where one lives (as is currently with a Forward FHA). What this means is that if your home is valued more than the Lending Limit amount you can receive is based on the Lending Limit rather than the home value. For example if your home is appraised at $700,000, currently we would use $625,500 to determine the reverse mortgage Principal Limit. A lower Lending Limit would make a big difference on the amount one can receive. If you have a higher valued home look at doing your reverse mortgage now instead of waiting.

What would it be like for you to have security knowing you readily have funds available in your Line of Credit during your retirement years and the benefit of improved financial health?

You may not need a reverse mortgage now but it may benefit your retirement and long term care planning if you do one now.

(1)Consult with an Elder Law Attorney or financial consultant regarding the impact of pulling all your funds from a line of credit will impact Medicaid.
(2)Historically the HECM open-end credit reverse mortgage interest rate has been lower than what one can generally qualify for with a conventional mortgage.

Some information used in this article obtained from nu62(sm)

*Name changed to protect privacy

*As of April 27, 2015 income and credit are used for the Financial Assessment to determine borrower’s ability and willingness to pay property taxes and insurance into the future

Topic first published 2009; Updated 2014
© 2009-2014 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

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-FD

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.

Changes Are Inevitable and They Are Coming To Reverse Mortgages Soon

Posted on August 19, 2013 by sidac

The HECM reverse mortgage the "cheese" that is changing.

The HECM reverse mortgage is the “cheese” that is changing.

Seems no one likes change mainly because of fear, fear of change and fear of the unknown. But change is a part of life and so we need to accept and adapt. In the book, “Who Moved My Cheese?” by Spencer Johnson, M.D., the characters of this parable, mice Sniff and Scurry, and little people being the size of mice, Hem and Haw, search through a maze looking for their cheese, which kept moving. While Sniff and Scurry kept moving forward to find their cheese Hem and Haw hemed and hawed.

Those of us in the reverse mortgage industry as well as you, prospective borrowers, are in the maze and the FHA insured, Home Equity Conversion Mortgage or HECM reverse mortgage is the “cheese” that is moving. We don’t know exactly what direction the HECM will take, what we do know is after The Reverse Mortgage Stabilization Act of 2013 was passed giving HUD authority to make the changes to improve the fiscal safety and soundness of the program, changes will be taking place with reverse mortgages in the very near future.

As we navigate through the maze of the HECM reverse mortgage we are looking at the likely changes:

The amount of the principal limit or maximum funds available to borrowers will be less.
Additionally we expect that borrowers may be restricted on the amount of money they can draw up front.
Financial assessments will be implemented to determine one’s ability to pay taxes and insurance.
Borrowers may be required to set aside funds for taxes and insurance payments.
Some homeowners may no longer qualify for the reverse mortgage based on these changes.

As the characters in “Who Moved My Cheese?” reacted differently, we are all going to be reacting differently to the changes. Which character are you going to be like?

Are you going to be like Sniff and Scurry who saw the changes coming and take action and move forward now?
Or like Haw and realize if you stay in the same situation you could be worse off than if you take action now?
Or are you going to be like Hem and let your fear keep you waiting too long for the most funds available and/or long enough you may not qualify for the new program?

Age only matters if you’re cheese… or doing a reverse mortgage.

My suggestion is if you, or someone you know, are considering a reverse mortgage, do not let your fear keep you from moving forward. Be like Sniff and Scurry and move forward now to find the “cheese” and take advantage of the current reverse mortgage program before the changes go into effect so you still receive the biggest benefits.

If you are in Minnesota and want to ensure you are locked into the current reverse mortgage program before it changes, please contact my office to answer your questions and to assist you. For other states contact your local reverse mortgage originator for assistance.

And for me, I’m taking the paths of Sniff and Scurry, by accepting that changes happen, anticipating the changes, as well as adapting to the changes as they are necessary for the survival of the reverse mortgage program. As I wrote when some lenders exited the reverse mortgage industry, We Are Not Chicken Littles – The Sky Is Not Falling, the reverse mortgage will remain a viable option but it will be different than it is today. I will continue to be here even after the changes have taken place to assist seniors to remain in their home and have funds for their needs and wants through reverse mortgages.

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-Z0

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.

Have Senior Homeowners With Reverse Mortgages And Tax Defaults Really Gone Into Foreclosure and Lost Their Homes? You Are In For A Surprise!

Posted on October 28, 2012 by sidac

With all the media hype that seniors are losing their homes because they have a reverse mortgage and have tax defaults, the latest data shows the homework wasn’t done before reporting their stories. Trying to paint a negative of reverse mortgages is widespread without the data to back it up.

The fact is rather than foreclose, reverse mortgage servicers made advancements on behalf of borrowers for their insurance and property taxes defaults. And since January 2011 when FHA introduced loss mitigation tools the servicers have been working with the borrowers who were delinquent on their property taxes and insurance. As a result, 20% of those in these situations have been repaid. Another 60% of the defaulted borrowers have begun making repayments.

According to HUD’s Director of Single Family Program Development, Karin Hill, the default rate for the more recent Home Equity Conversion Mortgages (HECMs) is lower than the loans done previously with the worst performing being from 2007 and 2008 which account for just under 40% of all those in default.

The first four years after origination the probability of default increases then slowly declines over time noted Hill. Younger borrowers (62 to 65) are the most likely to default however they are making more repayments than older borrowers.

While we haven’t received data on those who have not made repayments, servicers and HUD remain committed to assist senior homeowners to remain in their home. It shouldn’t be assumed that reverse mortgage borrowers have gone into foreclosure. It’s important to remember that even without a reverse mortgage in place, these homeowners who haven’t paid their property taxes face foreclosure or tax forfeiture through the county. The reverse mortgage is not the reason senior homeowners go into foreclosure.

While the headlines report senior homeowners are losing their homes because of a reverse mortgage and tax defaults, the data shows otherwise; it’s just more myths about reverse mortgages.

Resource: The National Reverse Mortgages Lenders Association (NRMLA); data presented at the 2012 Annual Meeting & Expo by senior HECM managers.

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.

Are Reverse Mortgage Property Tax Defaults Really Due To The Reverse Mortgage? …They Are Not The Only Reason Seniors Lose Their Home

Posted on October 21, 2012 by sidac

There is a lot of talk about the issues of reverse mortgage defaults causing borrowers to go into foreclosure and lose their homes because of not paying their taxes and insurance… claiming that the tax defaults are a reason one should not do a reverse mortgage. The media and so-called senior advocates are pushing this point hard. Are you aware that anyone who doesn’t pay property taxes on one’s property can face foreclosure?

If one has a conventional mortgage and doesn’t pay their taxes, the lender will pay the taxes on behalf of their borrower and increase the homeowners mortgage payments to cover the taxes. If they let their homeowners insurance drop, the lender will place “forced” insurance on the property and pass the costs along to the borrower.

Even if one doesn’t have a mortgage, a reverse or conventional, one can lose their home for not paying their taxes – the counties foreclose on them. Here in Minnesota the county claims the property as a tax forfeiture.

Ann, a 65 year old woman called me inquiring about a reverse mortgage stating she owed over $20,000 in back taxes and was facing tax forfeiture in just a few short months. Ann had no other debt and her home was worth more than $300,000. Based on her situation, she wouldn’t qualify for a conventional or “forward” mortgage. Someone had suggested the reverse mortgage a solution to her situation.

I explained the details of the reverse mortgage: A reverse mortgage is a loan with special terms for those 62 and older. As an FHA insured loan HUD oversees the Home Equity Conversion Mortgage or HECM providing protections like no other financial option. With the HECM there are no income or credit score qualifications* and no monthly payment requirements. The home would remain hers with the title in her name. And the reverse mortgage funds could pay off her tax debt and she could leave the remaining funds in a Line of Credit with a growth rate for future needs including paying her property taxes going forward. Or if she chose she could receive monthly payments, a lump sum or a combination of these options.

The loan would be due and payable when the home was no longer her primary residence or on her 150th birthday. If at the time the loan was due and payable and the home was sold for more than the loan balance she or her estate would receive the difference in funds. Or if the loan balance was higher than what the home could be sold for, as a non-recourse loan she or her estate would not have to come up with the difference, the FHA Mortgage Insurance covers the difference to the lender.

In her situation she would have had a large line of credit that would allow her funds to pay her taxes and insurance going forward… and some other life necessities or a little extra here and there to maintain or improve the quality of her life.

There are many homeowners who lose their home for not paying their property taxes. When one gets behind on their taxes, they also reduce their option of qualifying for a conventional mortgage, especially with the tighter credit and income qualifications.

And think about it, if one doesn’t have insurance on their home and there is a fire or a storm that destroys the home, the homeowner loses their home and they don’t have money to rebuild.

Another consideration regarding reverse mortgage defaults is they are minimal compared to conventional or “forward” mortgage default foreclosures. I’m sure some of the forward foreclosures included seniors who had been sold a mortgage without consideration on whether they would be able to make payments in the future. In fact I know of an 80+ year old woman who did a 30-year mortgage… what was the likelihood she would be able to make mortgage payments for 30 years? A reverse mortgage would have been a better loan choice for her.

When the senior homeowners with forward mortgages have had “life happen” and they couldn’t make the payments, they also didn’t qualify for a reverse mortgage because they owed more than the reverse mortgage proceeds, they went into foreclosure. (We often receive calls from seniors in this situation and have to say we can’t do the reverse mortgage for them.) If these seniors had done the reverse mortgage initially instead of doing the forward mortgage, they would be benefitting from no mortgage payments and having funds to pay their taxes and insurance as well as for their other needs.

Reverse mortgages make a huge positive difference in the life of senior homeowners; the majority of reverse mortgage borrowers are satisfied with their reverse mortgage. Reverse mortgages shouldn’t be discounted because a small percentage are in default.

When reverse mortgage borrowers haven’t paid their taxes the lenders/servicers work with the borrowers to find ways to help them including sending them to counselors who work with borrowers to find a way to assist them address the issue.

Unfortunately, Ann’s brother had told her reverse mortgages are bad and she shouldn’t do one and she listened to him. Consequently the county foreclosed on her. She not only lost her home and a place to live, she lost the $280,000+ in equity. Whereas a reverse mortgage could have saved her home from foreclosure and she would have been able to pay her taxes and remain in her home with funds for other needs or desires including paying her future taxes and insurance.

So you see, reverse mortgage tax defaults are really defaults on taxes with a reverse mortgage in place and are not the only reason seniors can lose their home – they happen with conventional or no mortgages at all as well. The media and politicians should stop attacking the reverse mortgage industry as the bad guys and gals – counties across the country are foreclosing on seniors’ homes too.

*To address the issue of tax and insurance defaults, in the near future we anticipate financial assessments with the reverse mortgage to determine if the borrowers are able to pay property taxes and insurance into the future.

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.

Do You Go To A Plumber For Health Issues? Then Why Would You Receive Advice on Reverse Mortgages From A Politician?

Posted on October 14, 2012 by sidac

In a conversation with a woman the other day when I told her I specialize in reverse mortgages she said, “I’ve talked with a Minnesota politician who said people shouldn’t do a reverse mortgage.” So I asked her the question, “Do you go to a plumber for your health problems?” “Of course not!” was her adamant reply. No we don’t, when we have health issues we go to the health professional who specializes in the area of our problem such as cancer or heart.

I went on to explain to this woman that I know the politician she had talked with and I too have had conversations with them. Their concern is that one should have an understanding of the reverse mortgage, the terms and details, not that one shouldn’t do one. In addition I pointed out that the state of Minnesota in their Own Your Future campaign is suggesting people consider reverse mortgages as a way to pay for their long-term care. Additionally I explained that because the politicians don’t specialize in reverse mortgages they can’t provide all the details and facts about them. Her response was, “Ohhhhh, I see.”

Everyone has their area of specialty, the doctor, the attorney, the politician; mine is reverse mortgages. I can’t advise you on health, legal issues or laws in areas I am unfamiliar, don’t specialize or am not licensed. Just because I grocery shop doesn’t make me a specialist in groceries or the grocery store.

Before deciding that a reverse mortgage shouldn’t be done based on the comment or opinion of a politician, media, friend or relative talk with a reverse mortgage specialist to get the facts and decide whether a reverse mortgage may be right for your circumstances. One who specializes in reverse mortgages can provide details and calculations for your personal situation. Invite your family or other trusted advisors to be involved in the informational meeting so they also receive the facts and details. You can then have a discussion and trust that you are making an informed decision.

Linda did just that, she talked with her financial advisor and with me and has decided that a FHA HUD Home Equity Conversion Mortgage (HECM) reverse mortgage is right for her situation. Doing one to eliminate her current mortgage payments and improve her cash flow (she doesn’t have to make mortgage payments with her reverse mortgage), she feels the relief from stress on figuring out how she would be able to continue to make her mortgage payments.

Do you go to the plumber for your health issues? Then why go to a politician for reverse mortgage details and facts? Explore the related stories linked below and through out this blog; learn how reverse mortgages have made a difference in the lives of those who received the facts and understood the details.

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.

“Own Your Future Minnesota” Campaign Launched – How are you personally preparing for your long-term care needs?

Posted on October 2, 2012 by sidac

The Own Your Future Minnesota campaign is part of a national educational campaign of the U.S. Department of Health and Human Services that promotes personal preparation for long-term care. The campaign is to bring awareness as well as urge Minnesotans of the need to plan for their later years when they are likely to need long-term care.

Own Your Future is important to Minnesota! Between 2010 and 2030 Minnesotans over age 65 will grow by 107%. Those over 65 have a 70% chance of needing long-term care. In 2030 over 325,000 elderly would need to be served if Medicaid (Medical Assistance) had to serve all with insufficient income. This could cost $5 Billion by 2030. Because of the enormous growth in the aging population and the number without resources, Medicaid will be strained to provide support for all these individuals.

Own Your Future Minnesota is encouraging people to have discussions, and be aware of options to pay for their long-term care including considering personal savings, long-term care insurance, life insurance options, annuities, and using ones home equity including reverse mortgages. Additionally they are encouraging people to discuss and plan their advance care which refers to their legal documents.

With the October 2nd launch, Governor Mark Dayton and Lieutenant Governor Yvonne Prettner Solon are urging all Minnesotans age 40 to 65 to own their future by mailing a letter to them.

“Planning for long-term care helps to ensure choice, control and peace of mind for the individual,” said Lt. Gov. Yvonne Prettner Solon. “The sense of security and comfort that comes with having a plan is something all Minnesotans should enjoy.”

The first phase of Minnesota’s Own Your Future initiative includes a new website, public service announcements, internet advertising, community meetings and other employer and grassroots organizations. The website offers options for planning at various ages, tools for your planning covering your personal, financial, housing and advance care planning, as well individual’s stories.

Future phases of Own Your Future will look at development of affordable financial products to help people pay for long-term care and evaluation of possible changes to Medicaid to better align with and encourage private payment for long-term care.

As a member of the Advisory Panel, and on the speakers bureau, through the coming year I will be doing presentations around the Twin Cities to bring clarity on what is long-term care, the impact it has on individuals and their families, why plan ahead along with options and resources to consider.

I’m proud and excited to be part of this important state initiative as the reverse mortgage industry representative.

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

Tag Archives: Senior Advocacy

Our Experiences with Getting Our Reverse Mortgage

What to expect working with Reverse Mortgage Originators: Our pledge to our borrowers

Changes Are Inevitable and They Are Coming To Reverse Mortgages Soon

Have Senior Homeowners With Reverse Mortgages And Tax Defaults Really Gone Into Foreclosure and Lost Their Homes? You Are In For A Surprise!

Are Reverse Mortgage Property Tax Defaults Really Due To The Reverse Mortgage? …They Are Not The Only Reason Seniors Lose Their Home

Do You Go To A Plumber For Health Issues? Then Why Would You Receive Advice on Reverse Mortgages From A Politician?