Overwhelmed With Medical Costs?

Most families are unprepared for the costs of aging and didn’t have the foresight to purchase Long Term Care insurance and are totally unprepared to handle all of the medical costs they will experience as a parent ages and needs additional medical care.

Along with the stress of possibly being a caregiver, is the additional stress of dealing with the Doctors and all of the associated costs they charge and possibly enormous hospital charges as well.

Funds from a Reverse loan can certainly help them, especially if they don’t currently have a mortgage on the property or if they do, it’s quite small.

Medi-Cal might be a solution for them if they live in California but they have to locate an Elder Law attorney who specializes in this particular area, who can help a family navigate the intricate process of applying for the insurance.   I am going to provide a copy of an article by Richard M. Seff who provides this specialized service for families.

“Is a loved one in a nursing home? Are you contemplating financial assistance but afraid of potentially losing what you worked so hard to gain? Do you sometimes struggle, feel overwhelmed, frustrated and confused? There’s hope…

You May Be Able to Obtain Medi-Cal to Cover the Growing Costs of Caring for Aging Loved One.

We know the little-known strategies that may save you from needless heartaches, protect your family’s financial security and prevent the potential loss of any hard-earned assets…including your lifesavings.

The decision to move a family member or loved one into a nursing home is one of the toughest and most difficult decisions you can ever make. Over time, caring for an aging or disabled loved one can seriously deplete your energy, your time and, of course, your bank account. ( I see it all too often in my elder-law practice!)

If you don’t know your rights and the different steps you can take right now, that difficulty can expand drastically.  For example…

•    Your nursing home bills can snowball out of control;
•    Your entire lifesavings can be drained if left unprotected;
•    Your income and standard of living can be seriously threatened

•    And in some cases your family home and other hard-earned assets can be lost.”

Richard Seff

Estate Planning Lawyer


I will share the remainder of his article in the next post.


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Boomers and Seniors Financial Insecurity

The news out of Washington to resolve the nation’s debt ceiling continues to drag on due to the inability for the Republicans in the House to come to a majority vote to pass their proposal, which as we all know will not get passed in the Senate.

What a mess and the financial markets are negatively reacting to this continued uncertainty as to whether or not the country will be able to pay their bills next month.   And if this does happen, this may mean that Social Security checks will not be going out to seniors which is unthinkable.  And now the latest figures are indicating that the Boomer generation is very worried about their financial future as well as their retirement funds have dropped to such low levels, that they will be unable to retire.

My personal feeling is one of frustration but I do feel that in the future the importance and value of Reverse loans will finally gain some respect.   As the population ages into the future, more people will make a Reverse mortgage part of their over-all financial plan & will be simply become another option for additional funds to live life and pay the bills each month.

Following is the remaining portion of the article that I posted yesterday:

Percentage of Economically Insecure Senors Surges to 75% and Counting

“Not only are 36% of seniors economically insecure, but also 40% of seniors are classified as financially vulnerable, meaning they’re neither secure nor insecure, for a total of 76% of seniors in what IASP calls an “economically precarious position.” And minorities have been hit especially hard, with 52% of African-Americans and 56% of Latinos experiencing economic insecurity.

Nearly half of single female seniors are at risk, too, at 47%, as women generally outlive men and thus face a higher chance of outliving their resources. This, says IASP, is especially true since women generally earn less than men and often spend less time in the workforce due to raising families and fulfilling caregiving duties.

In order to alleviate and even reverse these trends, says IASP, action must be taken. However, contrary to some proposals to “dramatically alter” Social Security or Medicare benefits, IASP says it’s better to work on policies and interventions designed to reduce expenses and boost income.
Suggestions along these lines include increasing asset-building opportunities throughout the life-course, expanding low-income housing options for seniors, and strengthening Social Security for vulnerable groups.”

By Elizabeth Ecker Published in Data, News, Reverse Mortgage 7/26/2011

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Financially Insecure Seniors

These are the most difficult times I have ever seen our country experience and no one is immune to the financial and economic insecurities that our nation is struggling through at this time.   Every day it seems as though we only hear more bad news…layoff’s, mass murders, another politician being exposed for some sort of sexual impropriety, climate change and on and on it goes.

I would prefer to post something cheery and encouraging here, as we all need something to make us laugh a little and put a smile on our face.   However, we are pretty powerless over the events that are unfolding each day and it simply comes down to ourselves and our families to make the most of where we find ourselves.

Some may find having those options more unlikely, especially if you happen to be a senior citizen.   More bad news….I am going to re-post and article in two parts that discusses the latest findings regarding how many seniors find themselves very, very financially insecure.

Percentage of Economically Insecure Seniors Surges to 75% and Counting

July 26th, 2011  |  by Elizabeth Ecker Published in Data, News, Reverse Mortgage

“Circumstances for retired seniors have gone from bad to worse, according to a July 2011 Research and Policy Brief, as household budgets are increasing while household assets drain away. The Institute on Assets and Social Policy (IASP) released a brief titled From Bad to Worse: Senior Economic Insecurity on the Rise, which examines the economic security of seniors and an increasingly common fear of outliving resources.

Declining household assets, inadequate household budgets, and increasing housing costs are the three main trends driving economic insecurity, says IASP. The number of households experiencing financial burden due to increased housing expenses rose to 50% in 2008, defined by the federal standard as 30% or more of a senior’s annual income going toward housing. And although many seniors have equity in their homes, says IASP, many of those homes require extensive—and expensive—maintenance, while other seniors are renters and don’t own their own properties.

Additionally, retirement assets are no longer as substantial as they once were, especially with the shift from defined-benefit plans to defined-contribution plans, and many senior households end up with a negative balance after taking care of necessary expenses.

Overall, economic insecurity among senior households experienced a notable rise from 27% to 36% between 2004 and 2008, the IASP found through using the Senior Financial Stability Index. And, says IASP, this began to happen even before the Great Recession, leaving the concern that seniors’ future prospects may get even worse.”

I will post the remaining part of this article on 7/29/11


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Reverse Mortgage Lending Limits

At this time, the clock is ticking on reducing the Lending Limits on the federally insured Reverse loan program that is for senors age 62 or older.   Currently the limit is set at $625,250 but it has been less in the past.   The most recent amount was at $417,000 but due to the difficulties in the real estate sector and home values continuing to fall,  the possibility of reducing the Lending Limit back to $417,000 is looming within the next several weeks.

At a time when seniors need more assistance than ever due to budget cutbacks on government sponsored programs and the potential for cutbacks on Medicare and Social Security,  using funds from a Reverse loan are the only remaining option for financial relief.   Hopefully, the current amount will remain in place and not reduced, eliminating the opportunity for a borrower to receive as much money as they can from a Reverse mortgage  for their medical and cost of living expenses.

There is a  pending bill,  H.R. 2508  that has been introduced as of Friday, July 15th., requesting that the current Lending Limits remain in place for FHA loans but it’s not known if it will be passed or not.    This would also include the “Forward” site of the loan program that has made home ownership possible for millions of Americans and it would keep that Lending Limit at the current amount of $729,750.

All we can do is wait for the House Committee on Financial services to review this important issue and there should be a hearing on it prior to October when the reduction would be taking place.

Let’s hope that that make the best decision for seniors,  First Time home-buyers, the housing market and not wound it any further,  just when everyone else is struggling in these difficult times and needs the resources to buy a home or stay in the one they currently own.

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Wells Fargo & Reverse Loans

In an effort to catch up on the latest news in the Reverse mortgage industry, I just found out that Wells Fargo is exiting it.   Long considered to be the leading lender for the FHA/HUD product, I was very surprised to hear this news.   Along with Bank of America who earlier stepped away from offering the loan, we see two very big players disappearing from the Reverse loan industry, along with Financial Freedom who left in March of this year.

With the continued uncertainty due to the wobbly economy and the housing market, they apparently feel that they would rather not risk originating loans when property values continue to decline, even though there is a greater need for it them now then  in previous years.  With the economic uncertainty,  concerns about Medicare and Social Security, more senors could be utilizing the funds from a Reverse loan to pay their monthly obligations and particularly any medical expenses.

The economy future is murky and my personal feelings are that we are a long ways from any recovery.  And as the need for the Reverse loan grows ( And it will), the amount of funds that a senior could receive will shrink.  The continual slide of the housing sector is directly affecting future of the government program and the financial security of  seniors financial safety net.

The housing crisis and it’s inability to recover is  mainly due to the continual foreclosure activity and is having a direct effect on Reverse mortgages.   Currently the HUD lending limit it set at $625,500 but as of this writing, they are considering reducing it back to a previous limit of $417,000 this coming October.

The immediate effect of the reduction will mean less money will be available to the senior homeowner and if anyone is “thinking” about using the loan, it’s imperative that they do so before the change in October.

The first step is to complete the counseling that is required by HUD and then meet with a Reverse Loan Consultant for further information.   Once this has been done, those who are considering the option of a Reverse mortgage will be able to make an informed decision as to whether or not to move forward on an application.

Fear, hesitancy, inertia or not making an effort to be informed only hurts ourselves.  Life will move on and it’s up to us whether or not we do too.

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