September 2009

Reverse Loans in the News

Sometimes it’s a challenge for me to keep up with what’s going in in the Reverse loan industry because there have been so many changes and developments over the last year.   I’m not always on top of writing regularly in this site, due to my frantic schedule but I would like to share some new information today.

Currently the HUD lending limit for the nation is $625,500 but there is some discussion to reduce that amount to the previous figure of $417,000 due to the continual decline in property values, etc.   If you have a home that is valued above 417K and you’ve been “thinking’ about doing the loan, now is the time to move forward before it’s too late to get the larger amount of funds.

Other news concerns the possibility that  HUD may offer a slightly different Home Equity Conversion Mortgage, otherwise known as HECM…to be considered a “mini” version of the standard loan.

At this time there is very little information as to how this product would benefit the senior population, as it is still under development.   But it sounds to me that it might be a Fixed rate however the borrower would receive less money and HUD does have some concerns that it could set off  a potential refinance climate and possibly result in “churning” which is never good for investors.

Another topic concerns property taxes.   Many seniors are finding themselves unable to pay their property taxes because they lack the income to do so.   The result is they are losing thier homes due to back taxes and are being forced out of their residences.

If they are able to acquire a Reverse mortgage, they will have the funds to pay the taxes and keep their home from going to auction, plus….if they are in foreclosure proceedings; they can also use funds from a Reverse loan to pay off the existing loan and all the fees associated with the foreclosure process and keep their home.

Just a few tidbits of information and good news, something that we all need.

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“Nothing but the Truth” Or is It?

I’m a wee bit behind lately in keeping up on new posts, as I’m always overwhelmed with too much to do and so many things that I want to share and talk about.   I had intended to say something about our guest speaker at our last Ventura County Adult Abuse Prevention Council breakfast  ( I’m a Board Member) and never got around to it.

Mitchell A. Karasov was our guest speaker at VCAAPC breakfast and as an attorney, he specializes in Elder Care law and abuse issues.   He particularly discussed the issues of financial abuse that are typically committed by family members of the senior and the usual scams that abound in our current economic climate that target seniors.

He also spoke about Probate Conservatorships, trust administration, Medi-Cal planning and many other topics but too much to go into here, today.  I’ll go into these issues in a later post.

Another area of concern is the fact that most seniors will not be receiving an increase in Social Security benefits which is obviously due to the current economic conditions.   And just when they need the money more than ever, it won’t be available.   Most of the funds that seniors do receive is used for medical expenses and we know that they aren’t getting any cheaper, are they?

But my “Hot Button” for the day is a recent article that was published in Consumer Reports that was hugely inaccurate, inflammatory and will only acerbate the already incorrect opinion about Reverse mortgages to the public.

Frankly, I am angry about this type of bias and reporting that is being done by the media.   Rarely is it correct and I have to wonder what in the “heck” that they have against the senior community?   Are these idiots afraid that their parents won’t leave them an estate?

This type of irresponsible reporting hurts, wounds and scares older people.   They’re afraid that they will lose their home, that the bank will take it and nothing will be left for their heirs.


Please go to the following link if you’d like to know more about what was said and why so much of it is incorrect.

NRMLA []  (You may have to cut & paste this into your browser to pull it up.)

I’m for defending the rights of seniors to live as they please and this kind of propaganda doesn’t help to stem their fears of the future.   The benefits of using a Reverse loan are immense and immeasurable.   In the eight years that I have been a consultant, I have never had one client tell me that they regret doing the loan.  All they feel is relief and gratitude knowing that they had this option for their life.

Check out the article and the response from NRMLA, The National Reverse Mortgage Lenders Assoc.

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Reverse Loan Consultant