The only condition that is required by a potential applicant for a Reverse Mortgage, is that they must be not less than 62 years of age. And if there are two applicants, the loan amount will be determined by the age of the younger borrower.
Sometimes a situation will occur when one of the borrowers isn’t 62 and in that case they both can’t apply for the loan. What is not recommended (although some Loan Officers will tell you it’s okay), is to remove the younger borrower from the Title of the property, have the older one apply for the loan and THEN PUT THE YOUNGER PERSON BACK ON THE TITLE.
The problem with this reasoning, is that it’s called fraud. And how would a senior look in jail? And what about the shifty Loan Officer? They got their commission and could care less about the client. The other potential issue, is that what if the older borrower dies?
The younger survivor may not be in the position to qualify for a Reverse Mortgage that would be large enough to pay off the current balance and they would have to sell and vacate their home.
I caution anyone against doing this in order to receive funds from a Reverse loan, as it could be a very dangerous and costly mistake and could cause heartbreak for the borrowers and potentially their children as well.
There has been some concern by the Senior community that Reverse Mortgages are in trouble along with the rest of the Mortgage industry. With the huge issues facing all of us at this time, some Seniors and their families are worried that a Reverse loan isn’t safe and won’t considering using one at this time to help with financial problems.
Other than the decline in the property values across the country, the Reverse Mortgage industry is a safety zone for Seniors who are struggling in these very difficult economic times. But if a Senior is considering using the funds from a Reverse Mortgage to retire an existing loan, there might be a problem.
And that would be the appraised value of the property. If the mortgage to be paid off is particularly large and depending on the age of the borrower(s), there’s a possibility that a Reverse loan cannot be done if there is not enough equity.
The need and value of the Reverse loan is more important than ever, given that the Senior community is trying to exist on a fixed income, which is certainly not enough these days, to cover the costs of living. If you think that things are tough for you, consider what it must be like to be a Senior trying to stretch their dollars every month, eating less and in some cases, not able to afford their medical prescriptions.
And if a Senior has a mortgage payment to make, sometimes they just can’t do it and they find themselves in foreclosure. Even more of them are going into bankruptcy, as they are trying to live off of credit cards and when the money is used up, they of course can’t make the payments that are owed.
The bleeding can be stopped by using a Reverse Mortgage and so can a foreclosure. It’s ridiculous and appalling that a Senior should have to lose their home and dignity when the answer is right at hand.
In the previous post, I started to discuss the Adult Protective Services in Ventura county, CA. and being a guest speaker at their staff meeting. In closing that post, I mentioned that in the event that a senior is in the process of a foreclosure, a Reverse mortgage can be used to pay off the existing loan and cancel the foreclosure proceeding and save the home.
It is extremely important for the public and professionals to know of this option, given the current foreclosure crisis at this time. If a senior can’t make their mortgage payment, they have the option of doing the Reverse mortgage, paying off their loan and being able to remain in their home.
About 15 people were at this discussion and given the significance of the day, I felt that it was very important to recognize their commitment to prevent and help seniors and dependent adults from becoming victims of individual terrorism. I congratulated them on their work and compassion and how important their mission is to help the helpless.
As a Reverse loan consultant and representing the Reverse Mortgage industry, I am quite concerned about some individuals who may financially abuse a senior by selling them a Reverse Mortgage and then use the funds from it to purchase unnecessary insurance products or annuities with deferred payments and high surrender fees.
This has occured and I have come across two situations where a senior had done a Reverse mortgage and then purchased this type of an annuity. Purchasing any type of insurance product is not a condition to completing a Reverse mortgage and it is very unfortunate when something like this happens.
A Reverse mortgage is in of itself, a built-in annuity without any prepayment penalties or income taxes and it allows the borrower the ability to access the funds anytime whenever they should need additional money. To use the funds to purchase an annuity simply does not make any sense.
As a Board member of the Ventura County Adult Abuse Prevention Council (VCAAPC) , I have learned quite a bit more about abuse in general and the unfortunate ways that it can occur. Sometimes it is a family member who is the only caregiver to their parent and is overwhelmed by the responsibility and not able to handle the stress or it’s a “trusted” advisor.
And at this time, there are approximately 20 million adult children of seniors throughout the United States who find themselves in this situation, causing enormous emotional stress, physical problems and financial loss.
Funds from a Reverse Mortgage could eliminate this problem and bring relief to the senior and the family members.
On September 11th. last week, I was the guest speaker at Adult Protective Services, a division of the Human Services Agency in the County of Ventura, CA. Because I am a Reverse loan consultant and I meet with seniors regularly, I have made it a point to become better informed as to the issue of senior abuse.
The Adult Protective Services (APS) provides information and protection not only for the senior community but also for children and dependent adults that may have physical or mental limitations and could experience financial or physical abuse. Their services are free of charge to the community and are mandated by law.
Originally I was to speak only about 30 minutes on Reverse loans but there were so many questions that the time ran over and I still wasn’t able to cover all of the important information and benefits that can be gained from using a Reverse loan and how it can have a positive impact on a senior’s quality of life.
Many of the questions concerned loan amounts, interest rates, costs and how the money could be used, MediCal and the heirs. I answered these questions as throughly as possible but there were more areas that we didn’t get to.
One of those being the issues of seniors losing their homes through foreclosures. It’s very important to know that if they are in the process of a foreclosure, a Reverse loan can be used to pay off the existing mortgage debt and save the homeowner from losing their home.
I will continue this topic in the next post.
I’m a member of a group called, “MAPS” an acronym for Marketing & Admissions Professionals for Seniors. We had a breakfast meeting yesterday at a residential care facility called Seasons at Northridge.
They offer assisted living and memory care services in beautiful surroundings and have many services to offer the senior resident and their families. Assuring them that their parent is being well cared for by a highly trained and professional staff.
If you would like more information, contact Regina Wyman at 818-886-5181. Their senior residentail facility is in the Los Angeles area and they do have a website. www.oakdaleheights.com
The speaker at our meeting was a volunteer from AARP. He explained to us how AARP was originally started by a retired school principal here in California fifty years ago. Without going into the details, I was really surprised by this as I didn’t know that!
Herb discussed the development of AARP over the last fifty years and all of the programs that are now offered to their members. I’m sure that some people are aware of them and there are too many of them for me to list, but the selection is huge. I would suggest going to their website for information.
In my previous post regarding the Veterans HealthFair, I mentioned John who was a ‘Nam Vet and in a helicopter unit. I just now found my notes that I wrote down about him, along with the website that talks about his unit. He was a door gunner in the 116th., Aviation Co. (As Hel).
Gosh, I hope that I have the right. Here’s the info: