HUD

Social Security is Increasing for 2018

But don’t get excited about this awesome news, because it’s only increasing 2% which on the average, will boost up benefits 20 to 25 bucks a month.

Just imagine how you could spend that extra money you will be receiving beginning in January of next year.  Ummm, let’s see?  I can think of a number of thrilling possibilities.

New tennis balls in lots of different colors for your Walker.  Or extra money to blow at the Dollar Tree Store where one can find so many awesome deals, especially the junk from China.

Or maybe a couple cocktails at a Denny’s restaurant where you can get a Senior Discount when you order some of their nutritious food.

“Yes”, I am being sarcastic I know.   But really only 2% increase?

I may look very youthful in my picture on this website, but I’m a senior too and if I wasn’t working I would be standing on a street corner begging for money and food.

I’m lucky however, because I enjoy being a Reverse Loan Consultant and meeting many wonderful and amazing people who are considering using the funds from a Reverse loan to pay for medical expenses   ( I just had a partial knee replacement in August.), home improvement, care giving or maybe simply taking that long “talked about, one day we will go to Maui” and finally doing it.

The number one concern of everyone, but especially seniors is out-living their retirement funds ( If they have any) and not being able to afford to remain in their home for the rest of their lives.

But there is an option, a wonderful option and no one should be “scared” to look into the FHA  government insured loan program just for seniors affectionately referred as the HECM.

Its smart to find out if you would benefit from it or not, plus it’s better than being reduced to groveling each month for enough money to pay on going expenses and staying awake at night in a state of fear.

Oh and by the way.   I have a Reverse loan on my home that I used to pay off two mortgages I had at the time during the height of the Recession and Financial “crash”.  So unlike the majority of any of my competitors,  I’m qualified about the advantages of using the loan because of my own experience.

And I’m glad I did.  It was a great decision at the time and I don’t regret it.

If I hadn’t taken advantage of using a Reverse mortgage for my own situation, I would have lost my home in a foreclosure as I was quickly running out of money.

Whew!

 

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Reverse Loan Counseling

Before anyone can apply for the FHA Reverse loan, they have to complete counseling with a HUD approved counseling agency.

If anyone would like a copy of the list, please contact me and I will send it to you without any obligation on your part.

I haven’t been doing any video in quite some time and today I decided that I would and then post it here.  I certainly hope it works just fine.

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Seniors and Housing Debt

Although the amount of equity that is retained by American seniors exceeds 5 Trillion dollars, there are many who will not be able to retire because they are burdened with a mortgage payment.

Unfortunately, some seniors applied for Lines-of-Credit or did a traditional refinance on their property and took a lot of funds out at the close of escrow the last several years.

A much better option would have been to apply for the HECM Line-of-Credit and only use the funds as needed and not be obligated for a money mortgage payment.

A new report was recently published by HUD’s office of Policy Development and Research discussing this concern and what options seniors will have in the future to manage their housing debt.

I will post a summary of the findings in the next three posts.

HUD: Reverse Mortgages Provide Solution to Retirees’ Housing Needs

By Jason Oliva

“Baby Boomers and senior homeowners have the potential to reshape the nation’s housing market. But as a growing share of this demographic carries mortgage debt into retirement, they will need to seek additional solutions to improve their financial situations. For many, this could mean tapping into home equity through a reverse mortgage, according to a new report from the Department of Housing and Urban Development.

The broader housing market has shown positive signs of recovery in the years following the financial crisis, but several challenges remain, especially for older homeowners nearing retirement, according to a report recently issued by HUD’s Office of Policy Development and Research.

A rising percentage of older homeowners are carrying mortgage debt as they approach and enter retirement. Among owners aged 65 and older, 40% had mortgages in 2014, according to the Joint Center for Housing Studies of Harvard University.”

 

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New Regulations for Reverse Loans

An article that was recently published by Bankrate discussed the new regulatory changes to the FHA Reverse mortgage program for seniors and how these new regulations make this even a safer and more viable option for retirement planning.

Plus it also mentions the option to use a Reverse loan to purchase a property if a senior wants to “down size” from there current home that may be too large and costly for them, to something smaller.

Here is the second part of the summary of the article plus a link to the entire piece.

Bankrate:  New Rules Make Reverse Mortgage Viable

October 23rd, 2014 | by Cassandra Dowell Published in News, Reverse Mortgage

“Another major change noted is when the Federal Housing Administration, or FHA, announced its HECM for Purchase Program, which enabled qualified seniors to downsize or relocate by using a reverse mortgage to purchase their new home, thereby saving on closing costs.

‘Given the use of actuarial tables in determining the loan amount, it’s going to be a smaller draw as a result,” Ramsey Alwin, vice president of economic security for the National Council on Aging, tells Bankrate. “That may squeeze out some of the individuals who are in crisis mode. But generally speaking, the new policies strengthen the product, protect the consumer and make it well-poised to be an important long-term financial planning tool, most likely for the more moderate- to higher-income population.’

However, concerns regarding reverse mortgages remain.

“There may be more predatory products created that are then attractive to the cash-poor, house-rich individual,” Alwin says. “We need to be vigilant about our consumer protections and consumer awareness for those individuals.”

Overall, the industry may see an uptick in reverse mortgages among finically savvy baby boomers, says Peter Bell, president of the National Reverse Mortgage Lenders Association.

“If instead you take a reverse mortgage as a standby line of credit — a standby cash reserve that enables your other assets to remain intact and continue to grow in value or generate income — you end up with a greater amount of wealth to fund longevity,” he says.

Click here for the entire article:

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Financial Advisors and Reverse Loans

The obligation of a Financial advisor to their client, is to to guide them in their investments to develop a healthy portfolio of funds and also protect those funds from running out, by managing the account and providing guidance to the clients on an ongoing basis.

For many years, Advisors have felt that a Reverse loan defeats the purpose of protecting their clients’ assests and due to lack of knowledge about the FHA loan program and how they function, the Advisor would not consider them as an option to protect their client’s principle from being drawn down.

But recently an article was published in Financial Advisor magazine to the industry,  about how they can utilize a Reverse mortgage to extend the life of their clients investments without any tax consequences.  It is simply a matter of the Advisor being more open to learning about this unique federal loan program for seniors and what it could mean for their business in the coming years  because the future of financial planning  will be  rapidly changing as the Boomers begin to consider retirement and new methods  and options for financial planning  will need to adapt to the changes as they appear.

I will be posting some comments in two parts from Reverse Mortgage Daily with the first one here:

 

Reverse Mortgages on the Verge of Financial Planning Breakthrough?
Posted By Elizabeth Ecker On April 18, 2012 @ 6:36 pm In News,Retirement,Reverse Mortgage | No Comments

An article [1] published Wednesday in Financial Advisor magazine demonstrates the way in which a reverse mortgage can preserve the portfolios of retirees who have investments. On the heels of another recent article written for financial planners on the same topic, it is beginning to sound like a sea change for the reverse mortgage industry and its work with financial planners.

Featuring an interview with nationally-recognized retirement expert Harold Evensky, the Financial Advisor article [1] details the Saver option for use by baby boomers who are planning for retirement.

“I’m reasonably positive [the Saver] will become an important part of our planning in the future,” Evensky told the publication.

Evensky and colleagues at Texas Tech have worked on a yearlong study on the use of reverse mortgages in retirement planning that is expected to be published soon. In speaking with groups of financial professionals about the research, Salter told RMD [2] he has received positive feedback from the planning community. In the meantime, Evensky says the studies indicate that use of the reverse mortgage Saver product will significantly increase the survivability of a retiree’s portfolio in retirement.

Part 2 to follow on 4/20/12

 

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