Reverse Mortgage Guide

Usually when we think of reverse mortgages we think of financing for those aged 62 and above.

This age qualification is obviously artificial. There is no reason it could not be higher or lower, and now we have a lender who has lowered the age requirement.

Lender Lead Solutions says it’s “the first lender in the reverse mortgage industry to announce a product for seniors who are younger than the current Home Equity Conversion Mortgage (HECM) age requirement of 62 years old. This proprietary product also allows seniors over the age of 62 the opportunity to borrow a smaller amount of money with lower closing costs and reduced fees.”

“The growth of the senior market provides a tremendous expansion opportunity for new proprietary products in the reverse mortgage marketplace,” said David Peskin, chief executive officer of Lender Lead Solutions. “Census statistics tell us that the oldest of the baby boomers turned 60 last year, and more than 4.5 million seniors currently fall between the ages of 60 and 62. We feel this is the perfect time to introduce the Simple60 product.”

The company says that “more than 15% of consumers inquiring for a reverse mortgage are technically not qualified due to age. The Simple60 product benefits homeowners who are eager to access their equity earlier and provides lower closing costs than a traditional HECM reverse mortgage. Simple60 is a non-recourse loan that ensures loan debt will never exceed the value of the home. The tax-free proceeds are based on the homeowner’s age and value of the home.”

Is it a good thing to have a reverse mortgage available two years early? Considering the number of people who now have financial difficulties it may not be a bad idea.

Of course, it would be good to know more, such as: What percentage of a home’s equity can be borrowed? What are the closing costs? What’s the margin above the ARM index? What is the monthly fee? Etc.

As always with any reverse mortgage product, sign nothing until you have first spoken with an attorney who specializes in elder law and, as always, be sure to shop for rates and terms. Never, of course, rely on a “loan counselor” who is funded by a lender.

If you’ve been watching Wall Street for the past few weeks it has been difficult to ignore the elevator-like movements of the market.

Yesterday, Thursday, was a real study. Just read what the Washington Post had to say:

“The declines were sharp enough to trigger automatic trading curbs at the New York Stock Exchange, designed to limit wild market swings. The Federal Reserve added $41 billion to the financial system to help keep it operating smoothly, making it the biggest injection of funds since Sept. 11, 2001, attacks.”

It’s just a guess, but how many times do you think there have been automatic trading curbs when the market rises? How often do you think the Federal Reserve has increased the money supply to help homeowners?

If you’re interested in a reverse mortgage, consider something with a fixed rate to avoid the marketplace ups-and-downs which are part of life. And shop around so you have leverage.

You can see the full Post story at:

Stocks Tumble As Investors Get Bad News On Citigroup

What happens if your pension ends?

At a time when companies are going bankrupt or just going out of business, pensions are not ironclad. If you feel your pension may end, take a look at what the Pension Benefits Guarantee Corporation, a government agency, has to say about your rights.

This is important stuff because if you want money from a reverse mortgage to go along with a pension, you surely need the pension. A pension reduction could radically reduce your income and lifestyle, so read the PBGC material below with care.

1. Look for official notification

If your employer wants to end the plan, your plan administrator must notify you in writing that your plan is ending. You must get this notice, called the Notice of Intent to Terminate, at least 60 days before the “termination” date.

If PBGC is terminating the plan, we notify the plan administrator and often publish a notice about our action in local and national newspapers.

*In a standard termination, you should receive a second letter describing the benefits you will receive, called the Notice of Plan Benefits, generally no later than six months after the date proposed for your plan’s termination.

*In a distress termination, or a termination initiated by PBGC, our communication with you begins when we take over your plan as trustee. Initially we will provide you with general information about the pension insurance program and our guarantees.

We will be able to provide more specific information about your benefits after we have had an opportunity to review the plan’s records, assets, benefit liabilities, and your participation in the plan.

2. Complete all requests for information promptly

PBGC reviews your plan’s records to determine what benefits each person will receive. To ensure PBGC has the correct information, we will ask you to complete an information form.

*If you are already receiving pension benefits from your pension plan we will ask you to complete the Participant Information Form. (If you are already receiving a pension, we will continue paying you without interruption during our review. These payments will be an estimate of the benefits that PBGC can pay under the insurance program, and they may be less than you were receiving from your plan.)

*If you are not yet receiving pension benefits we will ask you to complete a Beneficiary Designation (not currently receiving pension benefits) Form.

Please return your information form to PBGC within 30 days of receipt.

3. Review information on benefits information

Review the “Your Guaranteed Pension” brochure included in our first mailing or explore the topics on our website:

What PBGC guarantees

Maximum monthly guarantee tables

PBGC payments

Payments to beneficiaries

Benefits for disabled participants

Domestic relations orders

Health insurance assistance

State life and health insurance guaranty association offices

Also, review the information on a special webpage we set up for each pension plan we trustee. Find your plan’s page.

4. Look for information meetings held by PBGC

In some cases, PBGC will hold meetings with participants to provide you with information about PBGC and discuss how we will process your benefits.

Meeting announcements will be posted on your plan’s webpage. Find your plan’s page.