Reverse Mortgage As An Alternative To Foreclosure

I just came across a great article written by an Oregon Real Estate Broker. She talks about using a reverse mortgage to stop foreclosures against senior homeowners. Some seniors who even have their house paid off but are behind in property taxes just a few thousand dollars are facing foreclosure because they don't know that they have any options.
I recently was able to help a senior couple who had lived in their home over 20 years save their home from a Sheriff's Sale. It was one of the most satisfying transactions I have ever done in this business and my clients were truly grateful.
If you know any senior homeowners who may be having a hard time making ends meet, I would love to talk to them.
Here is a link to the article.

New Scam Targets Elderly Homeowners with Reverse Mortgages

We came across this story about a new scam targeting seniors with reverse mortgages.

Because it's so new, there isn't an official name for it, so we are calling it the "Reconveyance" scam.

Basically, the con is to scare seniors into paying the scammers to ensure they have clean title.

To read the article, click here.

Using a Reverse Mortgage as a financial planning tool

Using home equity as part of their retirement planning was never part of the equation for Older Generations according to Financial Planning.

Older generations considered the home something to be preserved, paid off free and clear before retirement and left to heirs as a legacy. However, many in the industry feel it’s time to reconsider and a reverse mortgage as an integral part of a client’s long-term portfolio and to figure out strategies for leveraging clients’ homes that go beyond basic reverse mortgages

“Historically, the previous generation was dead set against ever using the house to fund retirement,” says Brad Davis, vice president of retirement income solutions for Nationwide Financial. And financial planners often view their job as asset preservation rather than the drawing down of assets. “When advisors talk to clients about assets for retirement, home equity really hasn’t been part of that discussion,” says Sandra Timmerman, director of the MetLife Mature Market Institute (MMI).

In the past many advisors have viewed reverse mortgages as complicated and expensive, used primarily by seniors in lower income brackets as a last-ditch solution says FP.

Yet seniors have a sizable portion of their net worth tied up in their homes. In today’s economy, even affluent clients may need to reconsider utilizing their home equity as a resource. “A lot of affluent people have been hit hard by the stock market crash, lost their shirts investing in real estate or perhaps their golden parachute or retiree pension has evaporated,” says Barbara Stucki, PhD, director of the Reverse Mortgage Initiative for the National Council on Aging. “What may at one point have seemed like a secure future may seem less so now, and they may need to fall back on assets [such as the home] they once would not have considered using.”

House Money

Benefits Check Up from the NCOA

The National Council on Aging has a great website that can help seniors find benefits that they might not be aware of. You can go through the checklist and get all the benefits you deserve. Find and enroll in federal, state, local and private programs that help pay for prescription drugs, utility bills, meals, health care and other needs.

Making Reverse Mortgages Part of Older Americans Month

May is Older Americans Month, which the Obama administration has declared is part of the theme of "Age Strong, Live Long."



As part of this theme, Pulitzer Prize-winning journalist Saul Friedman is back writing about reverse mortgages. He writes that there is a way for older Americans to protect themselves against too many medical bills, high property taxes and the downers in your retirement savings plans by using a reverse mortgage.

"I am referring to the federal government’s reverse mortgages which too many beleaguered older Americans have ignored. Some don’t want to mortgage a home that’s free and clear; some are discouraged from tapping the equity in their homes by children who are waiting for their inheritance.

So here’s some welcome news for older Americans who own their homes and can use some extra income and cash. The up-front costs for many FHA-guaranteed reverse mortgages have gone down, which means the possible proceeds will go up by as much as $10,000.

I’m referring to the most popular and safest reverse mortgage, the Home Equity Conversion Mortgage, fondly known as the HECM. It is the safest for the lender as well as the homeowner-borrower because it is backed, insured by the Federal Housing Administration which has never defaulted on a mortgage that it has guaranteed.

Indeed, of all the mortgages that have fallen on hard times, or have been the subject of scandalous behavior by bankers and investors, the HECM has been largely untouched by these troubles. Last year, the Department of Housing and Urban Development raised to $625,000 the value of a home that could qualify for a HECM.

Gray Matters: Safest Reverse Mortgage

The Financial Health of Aging Seniors

With our current economic challenges, those of us looking forward to retirement need to be well-informed about our financial needs in coming years. And not only pre-retirees, but individuals already in retirement need to be wise to the changing economic environment. The good news is there are trained professionals who keep abreast of changes in the current economy, changes in laws and changes in government programs for the elderly. Professionals in this field are equipped to handle everything from help with retirement savings accounts, investment advice, guidance on government programs, estate planning or even new funding options such as reverse mortgages. A little planning prior to retirement will allow you to maintain your current lifestyle; whereas, a lack of planning may require you to live on an extremely tight budget. For those already retired, taking time right now to deal with financial problems instead of waiting for a crisis to happen is well advised.

A large number of retired individuals feel that they have planned well for the future only to find that rising medical costs, damage done to investment portfolios (by the current economy) and many other factors have caused them to go into debt. According to an article in "USA Today" seniors are racking up debt like never before. Elderly individuals who are in debt live with a constant burden over their heads. Most of these people are on fixed incomes and have no way of paying off credit cards and home equity loans that continue to mount to cover household budget deficits. In order to meet ongoing payments, seniors often forego purchasing medications and skimp on food budgets. They live like hermits -- never going out and pinching every penny -- in order to pay their obligations.

Most of these people worked hard their entire lives and managed their debt. They never anticipated the rising costs of prescriptions, expensive medical care or depletion of savings by living too long. The good news is there is help for these individuals. Here are just a few examples of some relief options that could be available. There are many more besides these.

Reverse mortgages - A Home Equity Conversion Mortgages (HECMs), also known as a reverse mortgage, is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage". For those seniors who are less fortunate financially but own a home, a reverse mortgage can allow them to remain in the home by creating extra income.

Life settlements -- A life settlement enables older individuals, businesses and other organizations to sell life insurance policies they currently own – but no longer want or need – for an amount greater than the cash surrender value. In some cases the value can be 2-3 times the cash surrender value. Even some term life insurance policies with a conversion option to permanent coverage can qualify for a life settlement.

Government Programs -- Some government programs such as food stamps provide temporary financial help for food. Other programs provide subsidized housing, help with medical expenses and provide tax credits. For veterans there is free health care, inexpensive prescriptions and disability income. Area agencies on aging offer individual counseling, legal help and advice with Medicare costs. (National Care Planning Council)

For some, living on a fixed income and dealing with debt can be an overwhelming burden. There are knowledgeable professionals and debt relief strategies that can assist in easing this burden. The National Care Planning Council keeps a list of financial advisers and attorneys who specialize in this area of planning at www.longtermcarelink.net.

The Unexpected Caregiver | Myths of Reverse Mortgages, Part II with Beth Paterson

Here is part 2 of the radio interview with Keri Berit, The Unexpected Caregiver, and Beth Paterson. Beth is a fantastic reverse mortgage originator from Minnesota and this part talks about a lot of the myths regarding reverse mortgages. She also shares stories of some of her clients and how the loan has changed their lives.

The Unexpected Caregiver | Myths of Reverse Mortgages, Part II with Beth Paterson