HECM Reverse Mortgage Interest Rates

8/18/2009

posted by N. Sioris

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Below are the interest rates for HECM reverse mortgage loans effective August 18, 2009. This week's rates are unchanged from last week. Seniors will receive the same initial loan benefit amount that they would have received last week.

Free Reverse Mortgage Counseling

8/04/2009

posted by N. Sioris

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Two major credit counseling agencies that offer HECM (home equity conversion mortgage) reverse mortgage counseling for senior homeowners considering getting a reverse mortgage loan, have announced that they will offer reverse mortgage counseling for FREE.

The usual fee for reverse mortgage counseling is $125.00 and is normally required to be paid by the reverse mortgage borrower. Lenders are not allowed to pay for reverse mortgage counseling on behalf of the senior borrowers. For some seniors, this is a financial hardship.


The Good News Is

Good news for reverse mortgage borrowers was recently announced by NCOA (National Council on Aging) and MMI (Money Management International.) Both of these organizations are now offering reverse mortgage counseling at no charge to senior homeowners applying for a reverse mortgage loan.

Both of these agencies have counselors that are certified by HUD and AARP to conduct reverse mortgage counseling in order to assist older homeowners in evaluating the pros and cons of getting a reverse mortgage loan.

Reverse mortgage counseling is a mandatory requirement for all FHA/HECM, government insured reverse mortgage loan applicants.

Find out more about AARP HUD Reverse Mortgage Counseling here.

How To Qualify For A Reverse Mortgage Loan

7/20/2009

posted by N. Sioris

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A reverse mortgage loan allows homeowners 62 and older a safe way to tap into home equity without the burden of making future monthly payments.

And, because a reverse mortgage loan does not require monthly payments or any re-payment as long as the borrower lives in the home, there are no income or credit qualifications to be met in order to qualify for a reverse mortgage loan.


TO QUALIFY FOR A REVERSE MORTGAGE LOAN THE CRITERIA ARE:


All Owners on the title to the home must be 62 years or older.

The home must be the primary residence for the borrower(s).

The home should have no mortgage or the mortgage balance

should be small enough to be paid off by the reverse mortgage loan



Not all properties qualify for a reverse mortgage loan. Some that do not, are manufactured/mobile homes built before June, 1976 and any mobile or manufactured home that is on rental land.

Not all co-op properties qualify. If your property is a co-op check here for more reverse mortgage loan information. You can also call us at 1-888-269-1098.

In most cases Agricultural land does not qualify for a reverse mortgage loan.

You can read a more detailed description of how to qualify for a reverse mortgage loan here.


You may also wish to request a free reverse mortgage loan quote today.


See exactly what a reverse mortgage loan might provide for you in the way of supplemental monthly income, a line of credit to be used as needed, or a lump sum pay out to you all at once.

There has been increased interest in a reverse mortgage loan as a result of the current credit crisis that we are facing. Many people that have lost substantial stock market assets are now turning to a reverse mortgage loan so that they don't have to liquidate depressed assets.

Still other senior homeowners have actually saved their homes from foreclosure by using a reverse mortgage loan. They not only save the home but they become mortgage payment free for as long as they live in the home.

Reverse Mortgage - NOT a Loan of Last Resort

6/18/2009

posted by N. Sioris

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Despite the fact that the media continue to refer to a reverse mortgage as a "loan of last resort" reverse mortgages are still in high demand. It is unfortunate that some so called advisers or financial experts still do not have a comprehensive understanding of how much of a life saving tool a reverse mortgage can be for many senior homeowners.

It certainly can be argued that a reverse mortgage is an expensive option on its' face. However, how expensive is it actually, if you have no other way to supplement your retirement income? I always say, "It is expensive if you don't need the money, but it is NOT expensive if you do need the money." Think about it. If you have no ability to income qualify for a loan or mortgage that requires repayment on a monthly basis, and you do not have good credit or a high credit score, how is it that you are going to be able to access your home equity in any traditional fashion?

Some will argue that you can always get a HELOC - Home Equity Line of Credit without having to prove your income. Well, that was possibly the case a year or two ago, but not now. Even people with stellar credit histories and high credit scores are seeing their home equity lines of credit frozen and or closed arbitrarily and without notice. Underwriting standards for new home equity loans today are very strict and require full documentation of income, credit, and assets. How many retirees can pass this type of credit scrutiny?


You Could Sell Your Home To Get The Cash

Of course, you could sell your house. Then you would have the cash from the sale. But at what price in today's declining market? Is that going to really be the answer to your money problems? More than likely, not. After all, if you sell your home and get some cash from the sale, you still have to live somewhere, right? And how much will that cost? How long will the sale proceeds actually last?

So, pleeeease...........stop listening to the same old tired saw: "A Loan of Last Resort." I find it pretty ironic that all of these talking heads never offer up an alternative solution, after they throw the baby out with the bath water. These two clips are representative of the typical incomplete, half-truth reporting being done at a time of serious financial difficulty for almost every American citizen, young and old. Shame on them!



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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.

Reverse Mortgage Saves Tennessee Woman's Home

6/09/2009

posted by N. Sioris

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We are thrilled to report that Lorraine Zickefoose, from Alcoa, Tennessee will not lose her home through a Wells Fargo foreclosure. We first reported her story on this blog on May 21st. Since then her church, her community and a dedicated mortgage broker worked tirelessly to raise money and then negotiate a settlement with Wells Fargo to save her home.

She successfully used a reverse mortgage loan for the bulk of the proceeds to satisfy her current "forward" mortgage. After eight months of effort, the mortgage broker was finally able to get the lender to agree to reduce the mortgage balance by approximately $17,000.

In the end they were able to save Lorraine's home from foreclosure. But according to comments from the mortgage broker, Wells Fargo was less than cooperative throughout the process. It makes you wonder, if it was the recent publicity that finally made the behemoth bank back down and come to a reasonable settlement for the 73 year old Tennessee resident.

Read The Full Story Here.

Long Term Care Expenses Put Retirees at Risk

4/02/2009

posted by N. Sioris

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The diabolical collapse of the stock market that has devastated retirement savings for millions of retirees as well as workers, has brought attention to the fact that nearly two-thirds of U.S. households are at risk of not being able to maintain their standard of living after retirement if long term health care costs are factored into the equation.

According to a study conducted by the Center for Retirement Research at Boston College, 65 percent of households will have insufficient income to cover the costs of nursing home care and other end-of-life long term health care costs.

Alicia Munnell, director of the Center for Retirement Research said, "the cost of health care will create such an unexpected hardship on unprepared retiring baby boomers that it's imperative to sound the warning now." She has been concerned for years about the imminent retirement crisis caused by several problems. Those problems include a Social Security system that will fall short of being able to provide current levels of support, insufficient personal savings, and rapidly escalating costs for health care.

Current estimates indicate that one third of people age 65 today will need to enter a nursing home for at least three months. Some will need to stay for an extended period of time.

End-of life health care costs are high. Hiring a home health care aide for four hours a day, five days a week costs nearly $20,000. per year. The cost of a private nursing home is $77,000. per year.

Options for funding this type of care include relying on Medicaid, buying long term care insurance, selling the family home and tapping into home equity through a Reverse Mortgage Loan.

However, even if households work to age 65 and annuitize all their financial assets, including the proceeds from a Reverse Mortgage Loan on their homes, The National Retirement Risk Index has shown that 44 percent of people will still be "at risk." "At risk" means they will be unable to maintain their standard of living during retirement.

Renewed Interest In Reverse Mortgages

2/27/2009

posted by N. Sioris

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As the economy continues to unravel on every front, more retirees are turning to Reverse Mortgages to sustain their lifestyle and provide the needed cash to weather the financial storm. Even people that thought they planned well and have diversified portfolios, are having to re-think their retirement strategies.

Many seniors really don't want to touch their investments right now, and yet many cannot wait years for those investments to recover in order to draw on them. So while retirees watch in dismay as both their home values and their investments plunge to new depths, many are turning to reverse mortgages to get through these troubled times.


HECM Reverse Mortgages - New Lending Limit - $625,500.

A ray of hope emerged earlier this week when HUD announced the immediate implementation of the new higher National loan limit for FHA insured HECM reverse mortgages. The previous loan limit was $417,000. As part of the Economic Stimulus package a TEMPORARY increase for FHA/HECM reverse mortgages for the balance of 2009, is now $625,500.

The higher reverse mortgage loan limit is particularly beneficial for people that have homes with a value higher than $417,000. With the new $625,500. lending limit they can now access a much higher amount of equity.


Virtually No Other Jumbo Reverse Mortgages Available

Additionally, since the credit crunch started last fall, virtually all of the proprietary "Jumbo" reverse mortgage products that had been offered previously have dried up. The absence of any jumbo reverse mortgage loan products, left many homeowners with high value homes, disappointed by the small loan amount offered by FHA versus their equity and home value.

If you are someone that never thought you would need a reverse mortgage before or if you have a high value home and have previously been disappointed by the loan amount offered, you may want to take a second look at this option.

Request a no obligation reverse mortgage quote today!

Standard of Living Will Permanently Change As a Result of Financial Meltdown

2/23/2009

posted by N. Sioris

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Check out these two video clips from Yahoo finance. Howard Davidowitz, retail industry consultant and chairman of Davidowitz and Associates speaks bluntly about the state of our standard of living. At the most basic level, he says that Americans had better get used to a permanent change in life style and standard of living.

He says "The end of rampant consumerism is ultimately a good thing. But the unraveling of an economy built on debt-fueled spending will be painful for years to come." He foresees higher savings rates and people trading down in both the goods and services they buy - as well as their aspirations.

Reverse Mortgage Could Ease Pain For Bernie Madoff Victims

2/20/2009

posted by N. Sioris

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Each day that goes by we hear more tragic stories of those that have been vicimized by Bernard Madoff - and his $50 Billion Ponzi Scheme that he allegedly mastermined.

The video clip below is one such heartbreaking tale of Ian and Terry Thiermann from California. They lost their entire life savings of seven hundred thousand dollars. Now at age 90, Ian Thiermann has been forced to go back to work. Fortunately, a neighborhood grocery store "created" a job for him as a greeter.


Could A Reverse Mortgage Help Them?

In the video clip you will hear that he and his wife still have a mortgage. With their sudden loss of fortune, one wonders if they have thought about the possibility of taking out a reverse mortgage. A reverse mortgage loan would eliminate their current mortgage balance and leave them mortgage payment free for as long as one or both of them continue to live in their home.

I hope they decide to consider a reverse mortgage as partial help with their monthly budget. It could relieve some financial stress.

Home Prices To Plunge Another 11 Percent This Year

2/11/2009

posted by N. Sioris

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According to Mark Zandi, Chief Economist and co-founder of Moody's Economy.com, housing prices will dip another 11 percent before bottoming out at the end of 2009. If Zandi is right about when we will hit the bottom, then by that time the slide will have cut home values by 36 percent nationally. Of course some areas will have been hit by much larger losses. For example, Southeast Florida and parts of California are expected to realize losses of more than 50 percent.

Zandi qualified his statement by saying; "Presuming we see strong action by policymakers to help support the economy and the housing market, prices will begin to recover by the end of this year."

Demand for new and existing homes began to fall in 2005, marking the end of a five year U.S. housing boom fueled in part by easy credit for subprime borrowers. Existing home prices tumbled from an average high of $230,200. in July 2006 to $175,400. in December, 2008 according to the National Association of Realtors.

In another forecast this week from a Houston based housing market researcher, Metrostudy; housing starts are estimated to plunge 47 percent to 483,000 in 2009.

Retirees Are Battered By $12 Billion Loss of Dividend Payouts

2/10/2009

posted by N. Sioris

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The most severe decline in dividend income is expected to take $12 Billion out the pockets of shareholders in the coming months. Dividends are being cut at the fastest pace in 50 years. Many of the dividend cuts are coming from U.S. companies whose investors have been relying on dividends to provide income during this recession.

Retirees that have all ready been battered by steep market declines are now facing the loss of cash flow that many rely heavily upon to supplement their annual cash flow.

All ready this year, seven companies in the Standard & Poor's 500 Index have decreased their dividends. If the trend continues, this will be the worst year for dividend cuts since 1958, when annual payments fell 8.4 percent, according to S&P.

Of the seven companies that said they will cut dividends in 2009, six are in the financial industry and all reduced their payouts by at least 50 percent. The largest decrease has come from Bank of America, which said it will slash its dividend from $1.28 a share annually down to 4 cents a share. That alone, wiped out $6.2 billion in annual cash payments to investors.


Could It Be Worse Than The 50 Year Record?

Howard Silverblatt, senior index analyst at S&P, is quoted as saying; "It is easy to say this is going to be the worst in 50 years, but the bigger question is whether it is going to be much worse than that."

One solution for retirees that own a home with little or no mortgage balance is a reverse mortgage. A reverse mortgage allows seniors age 62 and older to tap home equity in order to supplement retirement income. No mortgage repayment is required as long as the home is occupied by the senior. Their are no income or credit qualifications, and the money is non-taxable.

Request A Free Reverse Mortgage Quote Today!

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.