Reverse Mortgage Guide

For seniors in need there are alternatives to reverse mortgages, reports syndicated columnist Lew Sichelman, writing in the Chicago Tribune.

Sichelman says that seniors might want to look into “deferred-payment loans” from state and local governments to make home repairs, accessibility modifications and improvements to reduce energy usage.

Generally, says Sichelman, with DPLs “there are no origination fees; insurance premiums and closing costs, if any, are very low.

“The interest rate on DPLs is fixed, if it’s charged at all. And many programs charge simple rather than compound interest, so interest isn’t charged on interest. Some even forgive part or all of the loan if you remain in the house for a specified period of time.”

Sichelman also points out that some jurisdictions offer property-tax-deferral loans. Essentially the idea is that the local community pays your property taxes as long as you live in your home — and then re-coups the money when the property is sold.

This is interesting stuff and Sichelman does a good job explaining the programs in general.

For the full story, see: Look before slamming it into reverse

HUD has come out with new reverse mortgage regulations. The Department now says that “based on feedback from reverse mortgage counseling providers and cost data collected by HUD, HUD has determined that a HECM counseling fee of $125 per counseling session constitutes a reasonable and customary fee, and does not exceed a level so as […] read more

For too long, too many lenders have been enlisting advertising campaigns that have overstepped the boundaries of reasonableness and fairness. NRMLA — the National Reverse Mortgage Lenders Association — has now set the bar with its first ethics ruling regarding advertising standards for reverse mortgage lenders.
At its eastern regional meeting in Philadelphia, NRMLA issued guidelines […] read more

Reverse mortgage activity continues at a record pace.
HUD reports that as of mid-April it had received 73,840 home equity conversion mortgage (HECMs) applications so far in fiscal 2008, the accounting period that began October 1st. This compares with 59,913 reverse mortgages in the same period during FY 2007.
HUD to date has insured 59,413 HECMs, compared […] read more

Even the rich are getting stung by declining economic conditions, according to a new study by Bell Investment Advisors in Oakland.
Bell’s third annual Affluent Boomer Survey of 500, high-net-worth individuals who turn 60 this year found that:
___Almost 30 percent of affluent boomers say they feel more financial stress now than just six months ago.
___More than […] read more

When I got into this business six years ago, there was one proprietary (private brand) reverse mortgage program and three standard programs. These included the government-insured HECM, which came in two varieties: The monthly adjustable (with a margin of 150 basis points — 1.5 percent) and the annual adjustable (with a margin of 210 basis […] read more

The Santa Rose (CA) Press Democrat has a great story regarding how a reverse mortgage was used to save a home from foreclosure.
“Facing foreclosure on her Sebastopol home and Petaluma rentals,” Anna n-ha(cq) Millee used a reverse mortgage to pull cash out of the properties and pay off her lenders,” according to One borrower’s return […] read more

The Federal Reserve has now proposed new standards for credit cards, steps that should have been taken years ago.
As you check out the astonishingly-abusive practices which the Fed wants to end take a look at your credit cards. If there is any debt that ought to be paid off in full, it’s credit card debt. […] read more

A new study has found that roughly a quarter of those who are actively planning for retirement actually pull funds from retirement accounts.
The study by the Wall Street Journal and the Harris Interactive Personal Finance Poll found that the “most common reasons for premature withdrawals from retirement investment products include a family member losing a […] read more

Reverse mortgages are truly like diamonds in the rough. At first glance, they may not look like much. However, their special features give rise to surprising benefits. These benefits make it a thing of beauty.
An unprocessed diamond, after all, does not look like the finished product we know it to be. Charcoal, graphite […] read more

The figures for the first half of HUD’s fiscal year are now available and they show substantial reverse mortgage activity.
According to HUD’s report, during the first six months of the fiscal year (in the world of government accounting, the fiscal year starts October 1st), the Department had received 762,266 single family program applications (up almost […] read more

Writing in the St. Paul Pioneer Press, Lori Swanson, Minnesota’s attorney general, said on Sunday that “in 2006 President Bush signed the Deficit Reduction Act. One major change in the law was to limit the equity a Medicaid recipient can have in his or her homestead. At the urging of the financial industry, Section 6014 […] read more

Sen Claire McCaskill(D-MO), the author of S. 2490 — the Reverse Mortgage Proceeds Protection Act — a bill that would end the “marketing or sale of an annuity as a condition of obtaining any home equity conversion mortgage” — has asked Missouri Attorney General Jay Nixon to look into the way reverse mortgages are marketed […] read more

Do you know your pension benefits?
Not what you’re “supposed” to get, but what you will actually get — especially if your employer has not fully funded the plan?
The Pension Rights Center says that the Labor Department is considering a better form to explain pension benefits — or the declining availability thereof.
You can see the form […] read more

The Office of Federal Housing Enterprise Oversight reports that “U.S. home prices rose approximately 0.6 percent on a seasonally-adjusted basis between January and February, according to OFHEO’s new monthly House Price Index. For the 12 months ending in February, U.S. prices fell 2.4 percent. Since its peak in April 2007, the index is down 3.1 […] read more

Clearly reverse mortgages are changing the lives of seniors all across this country. The numbers tell a rather compelling story. Of all the reverse mortgages that have closed since 1990 (the year these loans started to close), Ninety -two percent have closed since 2000. Sixty percent of all these loans have closed in the last […] read more

Why do people get a reverse mortgage? According to the Consumer Credit Counseling Service of Greater Atlanta, the #1 reason is because the homeowner’s budget is too tight.
It may be that the results of a survey of 213 reverse mortgage borrowers taken by the group apply to Atlanta area but not elsewhere. That said, the […] read more

Kiplinger Magazine, an excellent financial resource, has a brief reverse mortgage item in the May issue entitled “How to Size Up a Reverse Mortgage.”
Essentially the article advocates running all the numbers before selecting a reverse mortgage product. Toward that end it points to the reverse mortgage calculator at Golden Gateway Financial.
Fill in a few blanks […] read more

Lillie writes and asks:
“Why does it take five months or more to get this “Bill” finished. Why does our goverment always help the “Seniors”. Who can we contact to get this moving before I die… 90 years young and want this. born April 14,1918″
Happy birthday Lillie! How great to be 90, to follow legislation and […] read more

The latest figures from HUD continue to show strong reverse mortgage demand.
For March, the Department reports that 12,204 applications for home equity conversion mortgages (HECMs) — HUD’s term for reverse mortgages.
During the same period, 9,663 reverse mortgages were actually insured by HUD.
So far in fiscal 2008 — the period that began October 1st — HUD […] read more