AARP Reverse Mortgage - Five Things To Consider

9/13/2009

posted by N. Sioris

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AARP has worked tirelessly with HUD to improve consumer protections and safeguards for FHA insured reverse mortgages, commonly referred to as HECM (home equity conversion mortgage) reverse mortgages. AARP has authored an extensive array of great reverse mortgage consumer guides as well as short reports and tips to assist seniors in making the right decision when considering a HECM reverse mortgage.

One AARP reverse mortgage report is entitled: "5 Questions To Ask Before Considering A Reverse Mortgage"


The Five Questions Covered In The Report Are:

* Do you really need a reverse mortgage?

* Can you afford a reverse mortgage?

* Can you afford to start using up your home equity now?

* Do you have less costly options?

* Do you fully understand how these loans work?


Here is the link to the AARP reverse mortgage report.

As always, AARP is doing its' best to educate you and make sure that you proceed with caution if you are considering a reverse mortgage. Reverse mortgages are not the end all and be all for everyone. But for those that they are right for, they can be exactly the appropriate financial tool to help sustain a comfortable lifestyle during retirement.

Planning For Retirement - Has The Model Changed?

9/03/2009

posted by N. Sioris

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The foundation for a solid retirement plan has traditionally been characterized as a three-legged stool. The three legs are pensions, Social Security, and personal savings. However, recent financial trends suggest that the three-legged stool approach may becoming less reliable.

The savings rate for Americans has significantly declined sine the 1980s. It reached its lowest level since the Great Depression in 2004. Recently, however, it has been gradually trending upward. (Probably out of fear and devastating investment and asset loses.)


Exacerbating the savings shortfalls is the near elimination of defined benefit plans by corporate America. This reality leaves many Americans facing a retirement with less guaranteed income.

As the cost of living continues to rise, many retired Americans find it hard to make ends meet. To maintain their standard of living, some older homeowners are beginning to turn home equity into monthly income through a reverse mortgage home loan. This approach is gaining momentum and is just now starting to be explored by financial planners and financial advisers. It is becoming obvious that a new paradigm is emerging as a result of the greatest loss of wealth since the 1930s.

Researchers estimate that close to 78% of older households do not have sufficient assets to sustain them through retirement. Baby Boomers are also concerned about their ability to maintain their standard of living as they get older. People that expect inadequate or unreliable retirement income are more likely to plan to use a reverse mortgage home loan as a vehicle to access home equity in later life.

If you are one of those people that are stressing over how to supplement your retirement income, you may want to find out how much of your home equity might be available to you from a reverse mortgage home loan. Ask for your personalized reverse mortgage loan quote today.

HECM Reverse Mortgages - Quick Overview

8/30/2009

posted by N. Sioris

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Although HECM (home equity conversion mortgage) reverse mortgages have been in existence for more than 20 years, the general public still finds them a bit mysterious. They actually are not that difficult to understand, once you start grasping the basic facts about how they actually work. Once you have an understanding of the basics, you will be able to determine whether HECM reverse mortgages are worth considering for your situation.


Facts At a Glance

*You retain title to your home. The bank does NOT own your home and
the bank does not get your home after you pass away. Your home remains part of your overall estate and can be passed to your heirs.

* The are NO monthly mortgage payments required.

* You do not have to repay the loan as long as you live in your home.

* The money you receive from your home is TAX-FREE.

* The money can be used for whatever you like...no restrictions.

* The money you receive does not affect your Social Security or Medicare benefits.

* HECM reverse mortgages are often times used to pay off an existing mortgage balance.

* Reverse mortgage loans can substantially improve the quality of your retirement life.

* You or your estate are never financially responsible if your home is worth less than the balance of your reverse mortgage at the time you permanently leave your home.

* HECM reverse mortgages are considered "non-recourse" loans, meaning that the home stands alone for the debt.

* You can buy a house with a reverse mortgage and never make a monthly mortgage payment on the new house as long as you live there.

* HECM reverse mortgages do not require credit, income, or medical qualifications.

* All owners on the title to the home must be a minimum of 62 years old.

* The home must be your primary residence.

* HECM reverse mortgages require substantial home equity, usually at least 40% or more.


Now that you have glanced over the basic facts, you may wish to find out if you qualify for one of the HECM reverse mortgages that are currently available. Just click the button below for your personalized reverse mortgage quote.

AARP-HUD Approved Reverse Mortgage Counseling

8/13/2009

posted by N. Sioris

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Anyone interested in applying for a HECM (home equity conversion mortgage) reverse mortgage loan must first complete mandatory reverse mortgage counseling and obtain a counseling certificate of completion. The reverse mortgage counseling certificate is valid for 6 months. AARP-HUD approved reverse mortgage counseling is a highly recommended resource for obtaining your required reverse mortgage counseling certificate.

The borrower must provide the reverse mortgage counseling certificate to whatever lender he or she chooses to use to obtain the reverse mortgage loan. The lender is not allowed to begin the application process until the borrower presents them with a reverse mortgage counseling certificate of completion.


Is Reverse Mortgage Counseling Really Necessary?

Reverse mortgage counseling is one of the safeguards that HUD implemented to insure that reverse mortgage borrowers and their families have a full understanding of the pros and cons of a reverse mortgage loan. HUD worked closely with AARP and other groups when designing the criteria for the reverse mortgage counseling sessions as well as the training program for the HUD certified counselors.

Because of AARP's involvement in setting up the criteria mentioned above, it is understandable that some of the best qualified counselors can be contacted directly through AARP Reverse Mortgage Counseling offices. The toll free number for AARP reverse mortgage counseling is - 1-800-209-8085.


You can read more about AARP Reverse Mortgage Counseling here.

Retirees Unable to Sell Their Homes and Downsize

8/06/2009

posted by N. Sioris

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The worst economic crisis since the Great Depression is taking its' toll everywhere you look these days. One segment of the population - retirees, are finding themselves stuck in their homes. Many, had planned to sell the "large family home" for a substantial profit and downsize to a home or community that would be more suitable for their golden years' lifestyle.

One component of the retiree's previously well thought-out plan, may have been affording to live in an assisted living community or having in-home-care assistance. For many, those things are now simply unaffordable and unobtainable. Home values have declined across the country, and in some areas drastically declined, (i.e. Florida, California, Nevada, Arizona, Michigan, Ohio.)

Seniors are not able to sell their homes for anywhere near the values that their homes were just a year or two ago. Furthermore, if they are willing to list their homes at drastically reduced prices, many are still not selling or even receiving any offers. Consequently, many senior citizens are trapped in their homes. They are not able to access their home equity through a sale, and the sale if it did take place, would yield far less profit to feather their retirement nest egg than they had planned.

One thing that a senior homeowner can do is, get a reverse mortgage. A reverse mortgage home loan allows seniors, 62 years or older to tap into the equity that still remains in their homes, without ever having to make any monthly mortgage payments for as long as they live in the home. The money they get from a reverse mortgage can be used for whatever purpose they choose. So, if in-home-care is a priority, then at least through this financial tool they might be able to afford it.

Find out if you still have enough equity left for a reverse mortgage loan.

Or use our reverse mortgage calculator.

More People Turn To Reverse Mortgages

8/01/2009

posted by N. Sioris

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With the economy in crisis, more people than ever before are feeling insecure about retirement. Whether you are all ready retired or thinking about retirement, there is a lot of insecurity surrounding this topic. AARP released a report called, "Retirement Security or Insecurity? The Experience of Workers Aged 45 and Older."

As people live longer and fewer corporations offer defined benefit plans it has become more challenging than ever to prepare adequately for retirement. Combining those two realities with the fact that most retirement nest eggs are tied to the stock market, and you have more than enough insecurity to go around. Below is a chart taken from the AARP Retirement report that illustrates how the current economy has affected Americans in or approaching retirement.

"During the past 12 months, workers at least 45 years old report many ways that recent changes in the economy have affected them or their family. As seen in Figure 1, over half (56%) have found it more difficult to pay for such basic items as food, gas, and medicine, while slightly fewer helped a family member pay bills (47%) and found it more difficult to pay for utilities such as heating and cooling, or phone service (45%.)"




Some people are choosing to get a reverse mortgage to help out with shortfalls in the areas mentioned in the AARP survey. Possibly you are someone that might be able to financially benefit if you get a reverse mortgage. Feel free to contact us if you want to find out if this solution could be right for your situation.

HECM Reverse Mortgage - Could Be Your Bailout

7/31/2009

posted by N. Sioris

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HECM reverse mortgages offer a higher lending limit than ever before. At the end of last year FHA changed their antiquated way of determining loan limits by simplifying it into one National loan limit of $417,000.



However, shortly after that, the economy careened off a cliff sending everyone scrambling to hold on to whatever might be left of their stock market portfolios and retirement assets. As the financial meltdown's tentacles choked off bank liquidity and literally froze credit, President Obama had to implement drastic measures to try to stimulate the economy.

By early February of this year, the Economic Stimulus package was passed. Included in the stimulus was a provision that temporarily increased the national loan limit for HECM reverse mortgages all the way up to a whopping $625,500. Wow, that's huge!!

The increase to $625,500. helps in several ways. First, it allows folks with home values higher than $417,000. to access a much greater amount of their equity through HECM reverse mortgages, than they would have been able to at the lower limit of $417,000.

Secondly, because of the banking crisis, the lenders that previously offered jumbo reverse mortgages to people with high value homes, stopped offering those loans. Consequently, HECM reverse mortgages are almost the only viable option available in today's market, regardless of home value.


BUT ONLY UNTIL THE END OF 2009

The loan limit increase for HECM reverse mortgages is due to expire at the end of 2009. At that time the loan limit will revert back to $417,000. unless Congress decides to extend the provision.
If you have a high value home, and think that you may need to access your home equity through a government reverse mortgage, you may not want to procrastinate. Take advantage of the stimulus package now and create your own personal bailout plan.

When Is It A Good Time To Get A Reverse Mortgage?

7/29/2009

posted by N. Sioris

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Over the weekend I was invited to a get-together where there were people from all different age groups. Several of the older attendees knew that I work in the reverse mortgage field. One gentleman in his mid 70's pulled me aside and said, "My wife has been saying that she is nervous about what will happen financially if I pass away before she does." He went on to say that she suggested that maybe they should get a reverse mortgage. He then asked me, "Do you think she is right, should we go ahead and get a reverse mortgage, is now a good time?"


Do You Need The Money?

My first question to him was; "Do you need the money?" He said, "No, we're fine right now, but if she doesn't have my retirement income if I should pass away, she's worried that she might not be able to finish paying off the mortgage and maintain the bills." As it turns out they have less than a hundred thousand dollar mortgage balance on their home that's worth in excess of three hundred thousand. They are not strapped for monthly income and they have some other assets as well.

My short answer to him was, "No, I wouldn't get a reverse mortgage at this time." He took a step back and looked at me with a puzzled expression on his face. He obviously wanted a more in depth explanation for my answer. So we had a long chat and the bottom line is that my advice to him was that if the scenario he presented does happen, then his wife can go ahead and get a reverse mortgage at that time. By then she will be older, hence eligible for a higher loan-to-value percentage, and their loan balance will be less or possibly even non-existent.


A Light-Bulb Moment

During our conversation it became clear (once again for about the hundredth plus time) how mis-understood HECM reverse mortgages are. This charming gentleman had no idea that even though there are no mortgage payments required on HECM reverse mortgages, there is deferred interest accumulating on the loan from day one, and will be deducted from his estate or heirs inheritance when the home is sold or refinanced at the time the loan is paid back. From the look on his face as I explained how the loan is a "rising debt" loan, I could tell he was truly experiencing a light-bulb moment.

To get a reverse mortgage when you do not really need the money makes these loans a very expensive proposition. But, as I told him, "HECM reverse mortgages are expensive if you don't need the money. However, they are NOT expensive if you do need the money and you have no alternative assets."

AARP Says Majority of Reverse Mortgage Borrowers Are Satisfied

6/15/2009

posted by N. Sioris

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An AARP survey concluded that the majority of reverse mortgage borrowers that have taken out a reverse mortgage are happy with their decision. The AARP survey also said that a reverse mortgage has greatly improved the lives of the senior homeowners that have tapped into their home equity through a government insured HECM reverse mortgage loan. The video below is a testimonial that supports the AARP reverse mortgage survey. The couple in the video are representative of thousands of satisfied retired homeowners that have taken advantage of a reverse mortgage in recent years.

AARP Advice For Keeping Banks Out of Your Pocket

5/31/2009

posted by N. Sioris

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AARP has a great article describing seven ways to keep the banks from making up for their lost profits at your expense. Even though President Obama just passed the new credit card reform bill, it will not take effect for over 9 months.

Meanwhile, the banks are scrambling to devise ways that they can make up for the anticipated lost profits that they will experience once the bill takes effect. AARP offers some great tips on what you can do to protect yourself from the new tactics that banks have all ready started to impose. Don't let the banks use you as their scapegoat and by all means don't let them reach into your pocket to line their pockets.

Read what AARP has to say here: Seven Ways To Beat The Bank

Reverse Mortgage Bill Vetoed In Minnesota

5/22/2009

posted by N. Sioris

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Yesterday, Tim Pawlenty, governor of Minnesota vetoed SF 489, which would have had unintended and detrimental consequences for senior homeowners in Minnesota that would like to take advantage of accessing home equity through the use of a reverse mortgage loan.

If passed, the bill would have increased the right to rescind (cancel) period from the current three days, to ten days on the closing of a reverse mortgage loan. It also would have imposed a suitability requirement as well as added restrictions on the cross selling of other financial or insurance products at the time a person takes out a reverse mortgage.


National Oversight Is All Ready In Place - No Need For Over-Kill

HUD in conjunction with AARP and NRMLA (National Reverse Mortgage Lenders Association) have collectively taken action to strengthen the protections for seniors on a National basis. In some cases, when states step in and try to implement additional regulations, we see that what actually happens is that the regulations become more confusing and sometimes contradict each other. The so-called "unintended consequences" of meaning well, can backfire and actually cause less availability of a much need product, like a reverse mortgage. We saw that very thing happen in the state of Washington about a year ago. It took until just a couple of weeks ago to get that "unintended consequence" amended, so that now senior citizens in Washington state have full access to competitive reverse mortgage lenders and products.

Had it not been for Governor Tim Pawlenty wisely choosing to veto this bill, something similar could have happened to senior homeowners in the state of Minnesota. Take a look at his comments about his decision below.

Minnesota_Reverse_Mortgage_Veto

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AARP Keeping an Eye on Reverse Mortgage Cross Selling

4/06/2009

posted by N. Sioris

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Even though new legislation was passed last year to prevent sales people from selling additional financial products to seniors when they take money from their homes through a reverse mortgage, AARP says they are getting reports that some people are still engaging in these tactics.

According to Bronwyn Belling, project manager for the AARP Foundation's Reverse Mortgage Education Project, "Despite the new laws, we are still hearing reports of reverse mortgage lenders selling high priced annuities and other investments to borrowers. Regulators are paying close attention to this problem, and we are going to continue to watch it very closely."


If you are interested in reading more about the legislation requiring a firewall between companies and sales people that sell reverse mortgages and sales people that sell other financial investments, such as annuities and life insurance products, you may want to read a couple of our previous blog posts that provide further details on this topic.

Changes to Reverse Mortgages

AARP Monitors Seminars

AARP Tells Washington To Fix Health Care

3/26/2009

posted by N. Sioris

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AARP has launched an effort called "Divided We Fail," which is a national bi-partisan effort designed to attract attention to the absolute necessity for health care reform in this country. AARP believes that all Americans should have access to affordable, quality health care.

According to their website, Divided We Fail is taking on this challenge so that Americans can achieve long-term financial security and get the health care they need. Their goal is to rally individuals, policymakers, and business leaders to this cause through a number of ways, which may include:

• strengthening Social Security
• making affordable, quality health care available for all
• making prescription drugs more affordable for all
• creating incentives to save for retirement, or
• expanding job opportunities so people can keep working and contributing to society as they get older.

AARP intends to mobilize its' members and the public to demand solutions.


The Divided We Fail Platform outlines the main areas of emphasis for the organization. They include:

• Affordable health care, including prescription drugs, and these costs should not burden future generations.
• Wellness and prevention efforts, including changes in personal behavior such as diet and exercise, should be top national priorities.
• Long-term care choices that- allow people to maintain their independence at home or in their communities with expanded and affordable financing options.
• Social Security must be strengthened without burdening future generations.
  Our children and grandchildren should have an adequate quality of life when they retire.
• Workers should be provided with financial incentives to save, have access to effective retirement plans, and should be able to keep working and contributing to society regardless of age.
• Americans of all ages should have access to tools to help manage their finances and save for the future. There should be better, easy to understand information to help increase financial literacy and manage money wisely.

The Motto: "Divided We Fail, but together we can do anything."

If you are interested in getting involved with Divided We Fail, check out these links at the AARP website:

Get Involved

Take The Pledge

Activist Resources

Retirees Can Benefit From Suspension of Required Minimum Distribution (RMD)

3/23/2009

posted by N. Sioris

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With the obliteration of Trillions of dollars of investment wealth as a result of the stock market meltdown, retirees can take a small amount of solace from the one-year suspension of the required minimum distribution (RMD) rule.

The RMD rule normally requires folks that are age 70 1/2 or older to take a specified amount of money out of their IRA, 401(k) or similar retirement accounts on an annual basis. The amount you must take out is based on age and account value at the end of the previous year. However, late last year Congress passed temporary legislation waiving the penalty if you do not take out the required amount. Under normal circumstances the penalty is an onerous 50 percent of the amount that you should have taken out of your account(s).

The temporary tax-law change allows seniors some flexibility about how much to withdraw from retirement accounts. Some may choose not to withdraw anything in order to give their balances time to recover from the decline. Others may wish to take only what they absolutely need in order to get by.

Financial and tax experts suggest that for anyone that has the ability to use income from other sources, they should keep withdrawals to a minimum in order to avoid locking in stock market losses. The experts also point out that not drawing down on these accounts now will help them last longer into the future.


A Word of Caution:

Tax law is complicated and everyone's situation is unique. This post is not to be construed as tax advice. Please check with your personal tax adviser regarding the strategy that will be best suited for you.

Seniors Will Get $250.00 Stimulus Checks In May

3/04/2009

posted by N. Sioris

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In May 2009, senior Social Security recipients and retirees will receive $250.00 per person from Uncle Sam, as part of the economic stimulus plan.

The senior payment figures are; $250.00 for individuals, $500.00 for couples that both receive Social Security benefits. This will include retirees, older veterans, Supplemental Security Income (SSI) beneficiaries, and people with disabilities.

Unlike the previous rebate distribution program in 2008, recipients will not have to file a tax form in order to receive the money. It will simply show up in the regular Social Security distributions - either through direct deposit or a check in the mail.

Federal and State retirees who do not receive Social Security benefits also qualify to receive the payment but may have to file a 2009 tax return in order to receive it.

The House of Representatives draft of the stimulus package, which was approved in January did not include the senior payment, however it did end up in the Senate approved bill after Montana Democrat, Max Baucus, Chairman of the Senate Finance Committee proposed it. The Senate provision was also strongly promoted by Democrat Senator, Sheldon Whitehouse, of Rhode Island.

AARP supported the measure from the beginning. AARP sent a letter to lawmakers arguing that many retirees would be ineligible for "workers' tax credits" but were in need of hardship relief. AARP cited research that shows that older people tend to spend such cash payments immediately.

You can read more about the Social Security's Economic Recovery One-Time Payment by clicking here.

You can also link to Frequently Asked Questions about the the payments by clicking here.

AARP Warns Seniors About Misleading Mail Scams

2/09/2009

posted by N. Sioris

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The latest scam alert from AARP was published in AARP Bulletin Today. AARP wants seniors to be aware of deceptive and misleading advertising mailers being sent to older homeowners. The unsolicited mailings are disguised to look like they are government sponsored or from a government agency.

The article goes on to give an example of a Reverse Mortgage mailer that masqueraded as an official government offering. The post card was sent from "National Data Research." (sounds pretty official doesn't it?) The headline read: "New Government Program for Seniors Over 62." It then goes on to say: "It is your Legal Right as a United States Taxpayer to receive all the information available to you."

According to AARP, what was not disclosed in the mailer is that it's real purpose is to collect senior's contact information so it can be sold to reverse mortgage vendors, which often times leads to more unwanted mail and telephone solicitations.

Although the current tough economic times make everyone feel a bit less secure than usual, try not to fall victim to over hyped, pie in the sky offers that after first blush are not at all what they seem to be. If you suspect an offering to be other than what it appears to be, you can always check out a bonafide government entity online.

You can also check The Privacy Rights Clearinghouse website. It offers tips on how to remove yourself from mailing lists. The Federal Trade Commission offers advice on how to recognize phone scams.


Read the complete AARP Scam Alert Article Here.

AARP Offers "Real Relief" - An Online Resource

2/05/2009

posted by N. Sioris

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As retirement accounts continue to shrink, job losses accelerate, families lose their homes, and the cost of food and health care skyrocket, AARP and the AARP Foundation have launched a new online resource site called "Real Relief."

Real Relief was created to assist older Americans weather this unprecedented economic storm. This one-stop online site emphasizes jobs and job training, and
financial issues like money management and investment help.

According to the Department of Labor, 4.9 percent of age 55 and older workers were unemployed last month. This is a 58 percent increase from one year ago and is the highest figure since 1983.

While workers of all ages are facing layoffs as a result of the worst economic downturn in decades, those workers age 50 and older are especially vulnerable. And for those that have all ready retired, the economy could have a serious impact on their investments and retirement savings, jeopardizing their financial security in future years.

A few of the resources that can be found at the AARP Real Relief site are:

• Tools and resources for retirees who may be facing economic challenges.

• Tips on protecting your money - avoiding scams - choose a financial planner

• Help with taxes and money management: Free tax preparation services

• Public benefits and public assistance programs

• Tips of job seekers - Job search strategies

• Money saving tips - where and how to cut back on expenses