A few years ago on a visit to Bulgaria we had saw the 100-year-old home of a wealthy village merchant which had become a museum. The outstanding feature of this home, a residence with many rooms and excellent construction, was the bedroom — there was just one. Virtually the entire room was one mattress (maybe 15 x 25 feet) and the whole family, including several generations, all slept in the same place.

Things have changed a bit.

It turns out that 29 percent of home sellers age 65 and older move into an active-adult community or senior-related housing, according to the National Association of Realtors.

This is an interesting number in that it represents a lot of money, but it also represents a new social trend — but which social trend?

___ Is the growth of senior-related housing a result of a decline in the number of adult children willing to aid older parents?

___ Is the growth in senior housing the result of a growing number of older parents who do not want to be a burden to their adult children?

___ Could it be that both seniors and adult children are happy for a little space?

___ Is it that senior community provide a social life that may be missing when seniors live alone?

___ Do many seniors believe that it’s great when adult children come to visit — and equally great when they leave?

___ Do many adult children welcome senior parents for a brief visit — and then relax when the parents leave?

___ Is better health simply allowing more seniors to live independently in traditional homes and communities?

I don’t know the answer — or that the list is complete — but what seems true is this: There will be more over-55 communities and projects in the coming years.

Reverse mortgage originations slowed during the first two weeks of March, according to the latest figures from HUD.

The newest report shows that 4,888 Home Equity Conversion Mortgages (HECMs) were originated from March 1st through the 15th, a number which is down 14.3 percent when compared with the last half of February. In the last part of February HUD endorsed 5,703 reverse mortgages.

Is this a big deal? That’s not clear, but it’s certainly a curiosity. Why would reverse loan originations decline as the weather improves nationwide and the economic news continues to be discomforting? If anything, you would expect an increase in reverse mortgage activity.

The early March figures suggest a strong need to watch the next set of figures from HUD to see if we have a blip in the marketplace or the start of a trend. If reverse mortgage numbers continue to decline then we would next need to ask why…

Millions of American homeowners have home equity lines of credit — HELOCs — with their lenders. This is money that can be accessed in times of emergency or to buy something large. Many HELOCs allow borrowers to withdraw as much as $100,000. As the money is paid back, it can be borrowed again and again during the term of the loan.

So far so good, but here is the problem. There are a growing number of reports that lenders are suspending the right of borrowers to make additional withdrawals form existing lines of credit. The reason: As home values have declined lenders are worried about houses that have more debt than value.

The good news is that I have not seen a single report where a reverse mortgage line of credit insured by HUD has been suspended. Unless someone knows differently, the FHA/HECM (Home Equity Conversion Mortgage) program seems to be working as planned.

You can see the issue here. Imagine having a regular line of credit with a $50,000 balance and counting on that money in an emergency. Imagine that you paid money up-front for the right to have that access to your equity.

Now imagine that your lender then suspends your right to access the money remaining on your line of credit because the value of your home has fallen or you were a few days late with a payment. The impact would be devastating.

If HUD is keeping its word and allowing full access to reverse mortgage lines-of-credit then it has good reason to get credit for doing something right.

The National Association of Reverse Mortgages Lenders is reporting that property values for seniors fell by $27 billion in the last quarter of 2007.

Still, says the Association, $4.22 trillion in equity remains, a massive storehouse of wealth.

The group’s finding are not surprising. Real estate markets in most areas have stalled if not declined, and seniors are as much a part of those local markets as anyone. There is not a magical fence around senior properties to defend them again marketplace ravages.

An important issue here will be to see how the numbers look in three months and six months. It would be great to see no further declines in value, but then it would also be great to see a lot of things.

The Association’s release is below:

OUTSTANDING SENIOR HOME EQUITY REMAINS SOLID
In spite of current home market lull, senior home equity is still in trillions

WASHINGTON, D.C. (March 25, 2008) – Consistent with current market conditions, senior home equity declined by $27 billion in Q4 2007 as measured by the National Reverse Mortgage Lenders Association/Hollister Reverse Mortgage Market Index (NRMLA/RMMI) Report. The consecutive quarter decline is attributable to the recent dip in overall home values across the nation.

As senior home equity depreciation accelerated, the NRMLA/RMMI index fell to 201.9 in Q4 07 from a revised Q3 07 level of 203.2. Despite this, the overall equity held by senior home owners (62+) remains strong at $4.22 trillion dollars. “The long-term prospect for this market continues to be very strong as an increasing number of baby boomers are wishing to remain in their homes and are in greater need of additional funds in their retirement years” stated Peter Bell, NRMLA’s Chief Executive Officer. “A 2005 study by the National Council On Aging estimated the potential market demand for reverse mortgages at 13.2 million older households. With such market potential, there is a prevailing long term confidence in the reverse mortgage market.”

With the U.S. demographic shifting upward and statistics such as the 2006 AARP study showing that 90% of Americans 60 and older wish to continue to stay in their home or community, reverse mortgages are increasingly seen as a positive market mechanism to accomplish this.

ABOUT NRMLA

National Reverse Mortgage Lenders Association (NRMLA) is the national voice of the reverse mortgage industry, serving as an educational resource, policy advocate and public affairs center for lenders and related professionals. NRMLA was established in 1997 to enhance the professionalism of the reverse mortgage business. Our mission is to educate consumers about the pros and cons of reverse mortgages, to train lenders to be sensitive to clients’ needs, to enforce our Code of Conduct and Professional Responsibility, and to promote reverse mortgages. Web site: www.NRMLAOnline.org

A new association for reverse mortgage counseling agencies has been formed to “support education initiatives and provide resources to improve the operational efficiency, consistency and financial sustainability of reverse mortgage counseling programs nationwide.”

While I am certain that operational efficiency, consistency and financial sustainability are important, I am vastly more concerned with a more prosaic issue: Can I confidently go to a mortgage counselor and know without question that such an individual is concerned with my best interests?

There is no way this is possible if a counselor is paid by a lender. And yet, HUD says that “funding for housing counseling is a major concern among participating agencies. In a change in this final rule, HUD is clarifying that it will allow for participating agencies to accept funding from lenders, as long as the relationship does not create a conflict of interest and that the relationship is disclosed to the client.”

How is it possible to both fund a counselor and have a counselor without an implicit conflict?

Hopefully by “financial sustainability” the new organization will fight for reverse mortgage borrowers — and a reversal of HUD’s unwise policy.

The release regarding the newly-formed National Housing Counseling Association is below:

Reverse Mortgage Counseling Industry Leaders Announce Launch of National Housing Counseling Association

WASHINGTON–(BUSINESS WIRE)–A coalition of reverse mortgage counseling agencies and elder care experts announced today a collaboration to launch the National Housing Counseling Association (NHCA).

NHCA will act as an independent organization to support HUD-approved 501(c)(3) housing counseling agencies in the delivery of reverse mortgage counseling services. Its principle goal is to support education initiatives and provide resources to improve the operational efficiency, consistency and financial sustainability of reverse mortgage counseling programs nationwide.

The association will build on existing best practices in the reverse mortgage counseling industry and will offer membership to all HUD-approved housing counseling agencies that provide reverse mortgage counseling and are prepared to meet HUD Home Equity Conversion Mortgage (HECM) counseling network standards and abide by the NHCA code of ethics.

“The association was created to ensure the availability and quality of reverse mortgage counseling for seniors,” said Chuck Stanley, NHCA spokesperson. “With the near exhaustion of available HUD funds for HECM counseling, and the delay in HUD’s borrower pay regulation, many counseling agencies are being forced to cut back on counseling services. NHCA has developed an industry-wide approach to accessing additional grant funds without the perceived conflict of interest associated with direct contributions by individual reverse mortgage lenders. We believe this approach will be a win-win for all reverse mortgage counseling agencies, their clients and the reverse mortgage industry as a whole.”

Participating agencies will have the benefit of accessing industry-leading “DirectConnect Reverse Mortgage Counseling Services™” software, which will be used to gather counseling session data for use in grant reimbursement and research purposes.

Jay Greenberg, executive vice president of the National Council on Aging (NCOA), added, “We are excited to assist the NHCA in increasing financial transparency and maximizing the value of the counseling and education experience for seniors.”

NHCA is currently endorsed by many HUD-approved counseling agencies, and agencies from each of the credit counseling trade organizations, American Association of Debt Management Organizations, Association of Independent Consumer Credit Counseling Agencies, and the National Foundation for Credit Counseling. These participating agencies are responsible for providing more than 80 percent of reverse mortgage counseling sessions done today: By Design Financial Solutions, Consumer Credit Counseling Service of Forsyth County, Consumer Credit Counseling Service of San Francisco, National Foundation for Debt Management, Lutheran Social Services of Duluth, Springboard and Money Management International (and its 120 CCCS branch offices throughout the country).

About National Housing Counseling Association

NHCA pledges help and support the delivery of high quality counseling to seniors, ensure the delivery of consistent, reliable counseling services meeting the business needs of lenders, and develop a sustainable source of revenue for counseling agencies to offset the cost of providing this much needed service. To learn more, or join the association, contact NHCA at info@nhcounselingassociation.org.

When the president signed the stimulus package, the pundits hailed the results as a life saver. Included therein was a tax break for business to invest in capital; an increase in the loan amounts FHA and government sponsored entities like Fannie Mae & Freddie Mac could offer; a provision for a 168 million dollar shot in the arm to the US economy.

In short the goal was to provide an economic full court press: tax breaks, pump money into the economy, increase loan sizes that would still fall into conforming loan amounts. A couple will receive $1200 gift from Uncle Sam.

However there is little chance that the economy will ever see this money, as most people, seniors included, will use the money to pay down debt.

I think more than a liquidity crisis, we have a psychological crisis. The banks and Wall Street do not like conventional or jumbo mortgages. It seems that no one trusts the quality of the underwriting nor the innovative mortgage programs that were created. No matter how much the Federal Reserve pumps money into the banking system, the banks are not eager to lend this money out as they have little confidence in the conventional mortgage lending system.

So the fundamental question becomes this: Where is a senior suppose to get funds for living their life? Because they are on fixed incomes, the easy-to-get mortgage commitments is a thing of the past. In fact, unless one can show income, assets and have credit in the 700s, the chances are not good that one will qualify for a conventional loan in today’s marketplace.

Therefore, the senior stimulus package remains the reverse mortgage. A senior, age 62 is not qualified using income, assets or credit score. It is enough if all owners have reached the magic age of 62 and own the home as their primary residence. No monthly mortgage payments are required. A major default headache (non-payment) is thereby removed.

However, without easily-available mortgage financing and reasonable guidelines for all borrowers, the value of homes in general will face a downward pressure. For seniors, this will mean less equity and thus access to less reverse mortgage financing because home values will fall below maximum “claim” amounts. The claim amount is the lesser of the FHA limit or the appraised value.

Attorney Dennis Haber is the author of the just-published, ground-breaking book, Piggy Bank Your Home: Tap Into The Power Of A Reverse Mortgage.

One of the most common questions from senior borrowers and their children alike is how the property value is determined on a reverse mortgage. This is a topic that requires a bit of discussion so I’ll try to unravel this great mystery here.

For most reverse mortgages (based on volume, over 90% of the reverse mortgages done are the FHA-insured HECMs) the appraisal will be done by an FHA-approved appraiser. The purpose of the appraisal is two-fold: first to determine the property value for purposes of the loan (remember, on a reverse mortgage, the property is the sole collateral — no other assets of the borrower are used), second, to be sure that the property meets FHA property standards.

The appraiser will be comparing the subject property (yours) to recent comparable SALES in the area. The appraiser must adhere to FHA guidelines when completing the report. For instance, comparable properties should be as close in proximity and style to the subject property as possible. In addition, the “comparable” should be a recent sale. So a home down the street from you that sold 1-1/2 years ago is probably not a good choice in today’s market. In addition, if you have a rancher style home on a half-acre lot, a condominium is not considered a good comparable.

As mentioned earlier, the property must meet FHA minimum property standards in order to obtain a reverse mortgage. But if you have been reading these posting with any frequency, you know that many seniors use reverse mortgage funds to make needed improvements to the property. There are provisions that make this possible.

The appraiser can note any “deficiencies” on the report and under certain circumstances; these deficiencies can be corrected with the use of reverse mortgage funds after settlement. The funds needed for repairs can be escrowed and then the repairs can be made within a designated amount of time (6 months is typical). For example, items such as exterior painting, roofing repair, and some plumbing issues may cost more than the borrower can pay out of pocket prior to settlement. In that case, the lender can arrange for an escrow and hold back the required repair funds at closing. Then, the borrower can close on the reverse mortgage, and do the repairs later. This is indeed an appropriate use of the reverse mortgage proceeds. This overview is very basic and your reverse mortgage consultant can guide you on the specifics of these provisions.

Contributor Sue Haviland — based in Baltimore, MD — has been a reverse mortgage specialist for more than five years.

J. R. Stevens writes and says that “I have applied and have approval for an HECM, but am most anxious for Congress to raise the loan lending limits for Reverse Mortgages. A possible national limit of $417,000 would enable me to obtain more from a RM.

“Bill S2338, the FHA Modernization Act of 2007 has been sitting (in conference?) since December 2007. Does anyone know if there is any possibility of this Bill becoming law any time soon? Is Congress working on it diligently or has it been brushed aside?”

You can track this bill at Govtrack.com.

There is a great political muddle in Washington. The magic question is what next? It is not at all clear if the FHA “modernization” plan will go anywhere. It is also not clear what will.

For instance, should we have tougher rules for lenders? Should lenders have a fiduciary obligation to get the best possible loan for borrowers? Should certain forms or loans be restricted or banned? (Think of option ARMs.) Should every loan require full documentation? Should the government buy up bad loans? Is that just subprime mortgages or all toxic loans?

J.R.’s point is well-made. He could do better if the reverse mortgage limit was increased. Will it happen? As the expression, stand by….

While the financial world looks more-shaky than anyone would prefer, HUD says the HECM program continues to boom.

For the last half of February, the 16th through the 29th, HUD says it insured 5,703 reverse mortgages. This is a very good number in general and an especially good number considering that the month was short a day or two.

HUD estimates that it may do 130,000 HECMs this year, a record if the prediction holds. Actually, the run-rate for the last half of February is above the projection.

We don’t know all the reasons for the growth of HUD-backed reverse mortgages but some reasons seem to stick out.

First, the program is better known than in the past.

Second, in a period of difficult economics, the FHA reverse mortgage program stands out as one of the better and saner mortgage options for those who qualify.

If the mortgage marketplace in general continues to erode you can bet that reverse mortgage volume will grow even more. The HECM is an asset-based loan at a time when an increasing number of people face declining incomes and weakened credit scores.

You undoubtedly have read the thousands of print articles that have been circulated throughout the Internet along with disparate thoughts and ideas that are reflected in the thousands of blogs. Accordingly, I have come to realize that what people believe about reverse mortgages can be split into just a few categories.

Category #1 It is just too good to be true.

Category #2 Closing costs are too expensive therefore stay away

Category #3 It is a wonderful program – do it

Category #4 It is bad for the heirs

Category #5 A lot of interest is due at the end of the loan. Stay away. And now there is a 6th category

Category #6 Reverse mortgages will become the next mortgage crisis.

So what is the truth? It can’t be good and bad. It can’t be right and wrong. ..So the question becomes how do you make a decision?

I believe that confusion reigns because people fail to look at all sides of the “equation”. Everything in life has its plusses and minuses. You can’t look at one side without looking at the other side. Yet that is how most of us make decisions.

In fact if we were to apply how we make “life event decisions” this is what it would like: When crossing the road, we would look one way instead of left and right; When running a business we would look at revenues, while ignoring expenses; When hiring a doctor, lawyer or accountant we would focus on their fee, rather than on their expertise.

In other words, we look at one thing to the exclusion of everything else.

The above noted categories evoke this kind of thinking. We are generally in a rush to come to a conclusion. And when a conclusion is reached, all thinking stops.

To say that it is too good to be true, or closing costs are expensive, or it is bad for the heirs, or it is a wonderful program, or the interest due increases or it is the next mortgage crisis, is merely a fast way to facilitate arriving at that conclusion.

Too many individuals focus on the features of the program only. There is no focus on what the program can do for the client. Both must be addressed. If after careful analysis you determine other options will work best, at least a decision was crafted based upon a view of reality.

There is a way to insure that you view the relevant issues from all sides. You need a loan officer and a company that lives the code of conduct promulgated by NRMLA (National Reverse Mortgage Lenders Association). This loan officer needs to possess fairness, integrity, competence, confidentiality, diligence and professionalism. These are the values promulgated by NRMLA in their new code of ethics.

In short, what all this means is that the person you deal with will help you reach the right conclusion after considering all the facts and circumstances. Yes, this means not pursuing the reverse mortgage if better options are available.

Attorney Dennis Haber is the author of the just-published, ground-breaking book, Piggy Bank Your Home: Tap Into The Power Of A Reverse Mortgage.

How do the ongoing ups-and-downs on Wall Street impact reverse mortgages?

Some 90 percent of all reverse mortgages are insured under the FHA HECM program, there have been few claims against a system which has collected enormous insurance fees, so reverse mortgages ought to be attractive to lenders and investors.

As reported in January, the program had about 375,000 reverse mortgages outstanding and only 1,609 claims. Theses were claims by lenders — there were no claims by borrowers.

Given the massive insurance premiums paid in by reverse-mortgage borrowers, the program should be in great shape. The only potential worry concerns falling home values.

Reverse mortgage lenders have the right to make “assignment claims” against HUD — that is, when the borrower has taken 98 percent of the maximum loan amount the lender can effectively sell the loan to HUD. This does not mean HUD has taken a loss — unless the value of the property goes below the loan amount at the time the loan ends. As I reported in January, HUD only had 109 assignment claim losses, a remarkably-small total.

HUD also had about 1,500 claims for loans that somehow failed.

The typical claim was about $18,000. That’s a bunch of money when multiplied by 1,609 claims — but no much in the context of 375,000 loans.

The FHA reverse mortgage program, if HUD’s figures are correct, seems to be unusually well-insured, even if claims rise significantly.

The real question is not will the HUD effort fail, but whether it’s too-well funded and fees should come down. No doubt a lot of private lenders and investors wished they had such a problem.

One of the most common questions from senior borrowers and their children alike is how the property value is determined for a reverse mortgage. This is a topic that requires a bit of discussion so I’ll try to unravel this great mystery here.

For most reverse mortgages (based on volume, over 90% of the reverse mortgages done are the FHA insured HECM), the appraisal will be done by an FHA approved appraiser. The purpose of the appraisal is two-fold:

First to determine the property value for purposes of the loan (remember, on a reverse mortgage, the property is the sole collateral — no other assets of the borrower are used); and

Second, to be sure that the property meets FHA property standards.

The appraiser will compare the subject property (yours) to recent comparable SALES in the area. The appraiser must adhere to FHA guidelines when completing the report. For instance, comparable properties should be as close in proximity and style to the subject property as possible. In addition, the “comparable” should be a recent sale. So a home down the street from you that sold 18 months ago is probably not a good choice in today’s market. In addition, if you have a rancher style home on a half-acre lot, then a condominium is not considered a good comparable.

As mentioned earlier, the property must meet FHA minimum property standards in order to obtain a reverse mortgage. But if you have been reading these posting with any frequency, you know that many seniors use reverse mortgage funds to make needed improvements to the property. There are provisions that make this possible. The appraiser can note any “deficiencies” on the report and under certain circumstances; these deficiencies can be corrected with the use of reverse mortgage funds after settlement. The funds needed for repairs can be escrowed and then the repairs can be made within a designated amount of time (six months is typical).

For example, items such as exterior painting, roofing repair, and some plumbing issues may cost more than the borrower can pay out-of-pocket prior to settlement. In that case, the lender can arrange for an escrow and hold back the required repair funds at closing. Then, the borrower can close on the reverse mortgage and do the repairs later. This is indeed an appropriate use of the reverse mortgage proceeds.

This overview is very basic and your reverse mortgage consultant can guide you on the specifics of these provisions.

——————————

Contributor Sue Haviland — based in Baltimore, MD — has been a reverse mortgage specialist for more than five years.

FINRA — the Financial Industry Regulatory Authority — has issued an Investor Alert warning folks that “if they are approached by a financial professional to do a reverse mortgage in order to fund a particular investment, they should keep in mind that all investments carry risk and costs – and the higher the promised return, the higher the risk. And, in some cases, those who sell the mortgages may profit from the sale of the proposed investment, giving them twice the incentive to talk someone into a loan they may not need.”

“Be Skeptical of Reverse Mortgages as Part of an Investment Strategy,” says FINRA. “If someone urges you to obtain a reverse mortgage to make an investment or purchase an insurance product or a security, such as a deferred annuity, be very skeptical, particularly if they are promising high returns. In essence, they are encouraging you to speculate with your home equity, which you may need for more critical purposes down the road. Also consider what will happen if the returns turn out to be less than promised, or worse, you lose the principal. If you cannot sustain that kind of low return or loss, you should probably not be making the investment with your home equity.”

The release from FINRA, which describes itself as “the largest non-governmental regulator for all securities firms doing business in the United States,” is below:

FINRA Warns Senior Investors About Reversing Fortunes With Reverse Mortgages

Washington, D.C. — The Financial Industry Regulatory Authority (FINRA) issued an Investor Alert today urging homeowners over the age of 60 to carefully weigh all of their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years.

A reverse mortgage is an interest-bearing loan secured by the equity in a home and can be helpful to homeowners having trouble meeting expenses. The FINRA Alert cautions homeowners that these loans – which are being aggressively marketed as an easy, cost-free way for retirees to finance lifestyles or to pay for risky investments – can jeopardize their financial futures.

The new Investor Alert, “Reverse Mortgages: Avoiding a Reversal of Fortune,” explains how these loans, often called “rising debt” loans, allow borrowers to convert their home equity to cash to be used for any purpose. The Alert advises homeowners considering these types of loans to use the funds wisely. The Alert goes on to warn investors that if they are approached by a financial professional to do a reverse mortgage in order to fund a particular investment, they should keep in mind that all investments carry risk and costs – and the higher the promised return, the higher the risk. And, in some cases, those who sell the mortgages may profit from the sale of the proposed investment, giving them twice the incentive to talk someone into a loan they may not need.

“Reverse mortgages are an extremely costly way to fund an investment,” said FINRA CEO Mary L. Schapiro. “Homeowners need to consider all the risks and explore all of their options before taking out a loan that may prematurely deplete their home equity, which is often a homeowner’s most valuable asset and most precious source of retirement security.”

The Alert explains that reverse mortgages were originally designed as a tool for aging, low-income homeowners to keep their homes. Now, as more and more Americans are retiring and sitting on large pools of home equity, they are beginning to use reverse mortgages as a way to finance a more extravagant retirement lifestyle than they could otherwise afford. The Alert reminds borrowers reverse mortgages should generally be a last resort and offers tips to anyone considering these types of loans.

For additional information, see the FINRA Investor Alerts Seniors Beware: What You Should Know About Life Settlements; Betting the Ranch: Risking Your Home to Buy Securities; Variable Annuities: Beyond the Hard Sell; and Equity-Indexed Annuities—A Complex Choice. More information is also available in the U.S. Department of Housing and Urban Development publication Reverse Mortgages for Seniors.

Fallout from the recent New York Times article (“Golden Opportunities,” March 2nd) concerning reverse mortgages continues.

In a letter to the editor, published by the Times on Sunday, Kevin R. Keller — Chief Executive with the Certified Financial Planner Board of Standards — wrote the following:

“When an unscrupulous salesman combines a reverse mortgage with a deferred annuity, it makes it all too easy to mislead seniors. What may look like a sensible investment to an elderly American rarely is. Without regulation prohibiting such a combination sale, the problem will grow only worse.

“Another need for regulation is to address the inherent conflicts of interest when counselors who are supposed to be acting in the best interests of clients are compensated by the company promoting reverse mortgages. We believe that a client’s best interests are served by a financial adviser who has earned a reputable credential and adheres to an enforceable code of ethics that articulates a fiduciary responsibility.

“Seniors can and should demand transparency, accountability and honesty when choosing how to invest their life savings.

Mr. Keller has this exactly right. We continue to believe that there are no circumstances where a lender or affiliated party should sell both reverse mortgages and annuities. The opportunities for abuse are just frequent.

HUD now allows lender-paid loan counselors, a farce which devalues every reasonable standard and appearance independence which borrowers should expect. How can counselors not seem like a puppets swinging in the wind when living on lender disbursements?

“To clarify the previous message sent on 11/20/07 regarding HECM counseling,” says HUD, “prospective HECM borrowers may not pay for HECM counseling services until FHA issues guidance. Lenders may continue to pay for these services, either on a case-by-case basis or through a lump sum contribution to a HUD-approved housing counseling agency.”

Does anyone feel this is fair?

One of the quickest ways to increase your closing ratio is to place yourself in front of the media. When I was first interviewed on the subject of reverse mortgages, I went through a rigorous testing procedure. I was taped. When we finished many hours later, the difference was remarkable. I sounded like the consummate professional I knew that I was.

To be successful in any interview you have to answer each question completely and professionally in a few sentences. Think you can do it?

For the next few minutes put everything aside. Go into a room where you will not be disturbed. Let’s pretend that you are on a radio show. I am interviewing you as a reverse mortgage expert.

“Mr/Miss.Mrs Jones, thank you for taking time out of your busy schedule to be here today. There has been so much talk about reverse mortgages. Can you tell our listeners what a reverse mortgage is”?

Now I know you know what a reverse mortgage is. Explaining it in a few sentences takes a lot of practice. If you have not properly prepared, you will stutter and what would come out would most likely be something like this: “We’ll you know it is a program that gives seniors money so they could live a better life. It is like better than getting a regular loan because with a regular loan the senior has to make monthly mortgage payments. No one likes to do that…………

“You have said nothing and you have embarrassed yourself.”Now watch the difference practice makes:………..

Can you tell our listeners what a reverse mortgage is?“A reverse mortgage is a special and different kind of loan that is easy to get. If you are
62 years of age, own a home and are using it as your primary residence you can access a portion of the equity to improve your life. What makes it special is that there are no income, asset or credit requirements; no personal liability; and no monthly mortgage payments are required”.There are many ways to answer this question. The important thing to remember is that it has to be your answer. You have to feel comfortable giving it. Go through the same process with the next set of questions. When you are done you will have the confidence to take the next step toward improving your career path.Here are some questions you are likely to get from reporters. See if you can answer each one with brief and plain language.What is the history of reverse mortgages?What are the advantages?