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.

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

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

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

Financial Tsunami Devastates Retirees

2/03/2009

posted by N. Sioris

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A recent publication in AARP Bulletin Today, entitled "Tough Times For Retirees," describes the stark reality that many older Americans are facing as they witness their retirement savings being swept away by the financial tsunami that has devastated Wall Street and Main Street.

Millions of retired Americans are facing the prospect of getting by without the savings cushion they thought would be there for them in their old age. We have just witnessed the worst stock market crash since the Great Depression, and many retirees were not prepared for such a catastrophic event.

One retiree that was profiled in the article said: "That in the three months between August 31 and November 30, 2008, the market downturn reduced the value of his investments by about 32 percent." He went on to say that "I'm devastated. That is all the money I have left in the whole world. I don't know what to do."

Not Just A Financial Trauma

For retirees like him the 2008 market meltdown has not just been a financial crisis but an emotional trauma as well. Older adults have described feelings of embarrassment due to the possibility they will not have enough money to make it in retirement. Some report that they will be forced to rely on their children for support, something they want to avoid because they hate the thought of burdening their families.

The stock market decline has not only harmed retirees, but millions of boomers that were on the verge of retirement. Many workers have decided not to retire as planned. An AARP survey of workers age 50 and over showed that 59 percent said they were likely to postpone retirement.

The number of dollars lost in the market decline has been mind-boggling. According to The Investment Company Institute, as of October 31, 2008, the assets of the 4,800 stock funds had declined by $2.59 Trillion. $2.39 Trillion was attributable to market-related losses. The other $195 Billion decline represented the amount that investors pulled out of the funds.


A Reverse Mortgage Could Help

If you find your situation to be similar to those outlined in the AARP Bulletin Today article, you may wish to consider tapping into home equity through the use of a reverse mortgage. A reverse mortgage can supplement your retirement income, allow you to remain living in your home as the owner, and never make a payment on the reverse mortgage loan as long as you live in the home.

Request a reverse mortgage loan quote today!

AARP Reveals Impact of Mortgage Crisis On Senior Homeowners

10/07/2008

posted by N. Sioris

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AARP purchased a random sample of 2.5 million people from the credit reporting agency, Experian. Of that sample, approximately 1 million are age 50 or older. The objective for AARP was to determine the impact of the mortgage crisis on older homeowners.


The sample data covered a six month period from July through December 31, 2007. The data did not include historical data and does not shed light on what has happened since December, 2007.


Americans age 50 and over hold about 41 percent of all first mortgages. The data showed that more than 684,000 homeowners aged 50 and over were either delinquent in mortgage payments or actually in foreclosure at the end of 2007. This number represented 28 percent of the total delinquencies nationwide for that period.


The foreclosure rate among first mortgage holders age 50 and older in this sample is 0.24 percent. This compares to a rate of 0.50 percent among Americans under the age of 50, and to a nationwide average of 0.39 percent.


Foreclosure rates are higher for African-American and Hispanic homeowners than for Caucasian homeowners, in all age brackets. Among mortgage holders age 50 and over, African American and Hispanic borrowers both have foreclosure rates of 0.51 percent, compared to a rate of 0.19 percent for Caucasians. So while the elderly generally have lower foreclosure rates than younger households, rates among elderly minorities are quite high.

Subprime Loans

Having a subprime loan is associated with higher rates of delinquencies and foreclosures for all age groups, however, the negative impact of subprime lending appears to fall disproportionately on borrowers over the age of 50. Older borrowers of subprime first mortgages are 17 times more likely to be in foreclosure than older borrowers of prime loans.

High loan to value loans were prevelant among subprime loan offers. Consequently, as home values have fallen dramatically in many housing markets, the incentive to default has increased. When the owner's equity position is either at zero percent or negative, borrower's options for selling or refinancing out of a toxic subprime loan becomes nearly impossible. For Americans over the age of 50, a loan-to-value ratio that exceeds 100% is associated with a foreclosure rate that is roughly double that of the national average for all other borrowers.

The Foreclosure Impact

The impact of a foreclosure is often more significant for older households because the owners have less time and ability to recover from the financial losses associated with a foreclosure. This problem is likely to grow over time, because homeowners increasingly are carrying mortgage debt into their retirement years. By 2007, 53 percent of all owners with a head of household age 50 or older had a mortgage, up from 34 percent two decades ago.

*The above data was published in a recent report by AARP Public Policy Institute and written by Alison Shelton.