Reverse Mortgage News

I am quite a bit behind in posting any new info and the reason is, I’ve been quite busy with new loans and clients the last quarter of the year.   My most recent client was 95 years old but most definitely of the mindset of an 45 old person.

She is a wonderful and funny woman and her little sis (who’s 88) had actually been helping her by paying for her care giving costs every month.  Finally the younger sister said that she should couldn’t do it anymore and researched the benefits of a Reverse loan for her big sister and ultimately was referred to me.

Imagine?   An 88 year old woman, paying $4000 a month to help her sister.   That’s love!   Anyway, the loan is done and they are both extremely happy and I enjoyed every moment of my time spent with them.  It’s this type of experience that makes this profession so rewarding.

There’s quite a bit of news in my industry and instead of me trying to explain it all, I’m just going to paste a press release from the National Reverse Mortgage Lender’s Asso./NRMLA instead.  

Press Release: New HUD Data Shows Growth in Reverse Mortgage Activity
January 8, 2009
                                                           FOR IMMEDIATE RELEASEContact:    Peter Bell, President, NRMLA202-939-1741, pbell@dworbell.com                 Darryl Hicks, Associate Director, NRMLA202-939-1784, dhicks@dworbell.com  Washington, D.C. – Despite turmoil in the broader mortgage market, data released in December by the Department of Housing and Urban Development shows that on a calendar year basis, the number of federally insured Home Equity Conversion Mortgages (HECMs) closed in 2008 grew 6.4% to 115,176 loans. “As more seniors try to figure out how to cope with today’s economic conditions, the HECM program takes on increased significance,” said Peter Bell, President of NRMLA. A more detailed analysis of HUD data conducted by Reverse Market Insight, Inc., a consulting firm based in Aliso Viejo, CA, indicates that three of the top 10 markets in the country are located in Florida.  Miami was the top market in the country by a  2 to 1 margin. FHA insured 9,561 HECM loans in the Miami metro area, followed by Los Angeles (4,126), Tampa (3,956), Santa Ana, CA (3,695), Baltimore (3,595), Phoenix (3,582), Orlando (3,556), Richmond, VA (3,493), Philadelphia (3,317) and Chicago (3,184) to round out the top 10.   Further analysis by RMI shows that 2,949 lenders originated at least one HECM loan in 2008, a 76.5% increase over the prior year. Bell anticipates newly enacted changes to the HECM—including a higher loan limit, lower fees, home purchase component, co-op eligibility and stricter consumer protections around cross-selling reverse mortgages with other financial services products—will lead to even more growth in the coming months. “The strong growth we’re seeing suggests the HECM program remains a strong and viable option for America’s seniors as they develop their financial plans for retirement ,” added Bell. “The HECM product is the most popular reverse mortgage offered today. Reverse mortgages are becoming a more mainstream financial planning tool for older homeowners. A reverse mortgage enables older homeowners (generally age 62+) to convert part of the equity in their homes into income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes either one or more payments to the borrower.  The loan is repaid when the borrower moves out of the property.  About NRMLA NRMLA is a nonprofit trade association, based in Washington, DC, whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners while educating both its members and consumers about the varied applications of this unique loan. Members sign a Code of Ethics and Professional Responsibility pledging to abide by guidelines that assure fair, ethical, and respectful practices in offering and making reverse mortgages to seniors. Details on NRMLA, reverse mortgages, and a list of reverse mortgage lenders in each state are available on NRMLA’s Web site, at http://www.reversemortgage.org. About Reverse Market Insight Reverse Market Insight is a leading provider of market research and data services for the reverse mortgage industry.  Founded in 2007 by industry veterans, RMI counts 7 of the top 10 reverse mortgage lenders as clients, and is the exclusive provider of market intelligence for the National Reverse Mortgage Lenders Association.  
 
 
All materials copyrighted © 2008 National Reverse Mortgage Lenders Association.

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How a Reverse Mortgage Made a Difference

In a previous post, I talked about how upset I was over a situation that a Senior had gotten herself into.   She had been referred to me to apply for a Reverse loan, as she was running out of money to pay her two mortgage payments and on top of this, she was extremely disabled as well.

I met with her to start the application process, when I discovered she owed too much on the two loans and the funds from a Reverse loan wouldn’t be enough to pay both of them off.   She had just received these loans in the beginning of ’08 and it was very obvious to me that she had been taken advantage of by the lender and the Loan Officer.

She was 100% disabled and receiving SSI, MediCal and Social Security and unable to work.   This was the only income that she had and she was in no position to be able to afford the two mortgage payments that she was now obligated to pay.   She was using the funds from the ELOC to make the payment on it and her actual income went to the other mortgage, care giving expenses, utilities, food and all other monthly bills.  Eventually she was going to run out of money and not be able to make any loan payments and then be faced with a foreclosure.

I was so angry at the lack of integrity, that the self-serving Loan Officer who originated her loan, was only concerned about their commission and felt nothing about this client’s security and the ability to remain in her home. 

But the good news is, I was able to help her and as of yesterday, she signed her loan documents for her Reverse loan. Fortunately, she received a small inheritance  last month and was able to provide enough money to buy down her existing loan balances so that the Reverse mortgage could be completed.

I feel very relieved for her, knowing that she can now stay in her house indefinitely because she won’t have to make any mortgage payments.   But I’m wondering how many other Seniors have used a conventional loan, taken the cash out to cover their expenses and are now out of money and facing foreclosure.

I bet that there are quite a few of them.  And what’s happened to those bad Loan Officers and Lenders?   They’re out of business but the damage that they caused by unscrupulous lending, is causing a lot of pain for families in this country.   And the Senior community has been wounded by them, too.

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Social Security Income

I am sharing an article on Social Security income that was written by Tom Hartfield.   He can be reached at tom@hartfieldFinancial.com

Estimating your future Social Security benefits used to be a difficult task, but not any longer. Every year, the Social Security Administration (SSA) provides a Social Security Statement to working taxpayers aged 25 and older. This statement, which is sent automatically two to three months before a taxpayer’s birthday, provides a report of how much the taxpayer and his or her employer paid in Social Security taxes and a summary of the estimated benefits the taxpayer may be eligible to receive now and in the future.

The Social Security Administration will also provide a statement to any taxpayer who requests one. To request a statement, simply submit a copy of the Social Security Statement request form (SSA-7004). You can obtain a copy by calling 800-772-1213 or by applying online at www.ssa.gov.

This form will ask you for a number of facts, including your name, Social Security number, date and place of birth, your mother’s maiden name, your previous year’s earnings and an estimate of your current and future earnings, and the age at which you plan to retire.
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Functional Flexibility Activities for Older Adults

By Lori Peppi Michiel, NASM, Certified Personal Trainer

For aging adults who have been inactive for six months or more and now are considering becoming active again or are post rehab, might want to consider flexibility training. It is a great way to start towards a healthier lifestyle if going forward from a de-conditioned state. This type of training may lack the high profile of cardiovascular exercise and strength training, but it can improve range of motion, decrease pain and soreness after exercise, improve posture and decrease muscle tension.  More importantly, stretching can make the difference in comfort when performing tasks such as putting a shirt or blouse on in the morning, reaching for a cup of tea or coffee or turning ones head when driving to be sure the coast is clear, etc.

Consider that most research studies suggest combining flexibility training with other activities such as balance, core, muscular endurance and (resistance training) into their workouts, along with some form of cardiovascular exercise. They all play an important roll in function.

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Seniors & the Holidays

Here are the five tips for keeping your aging parents happy throughout the Holidays in spite of any family turmoil and dramatics.   There’s always “one” in the family, isn’t there (?) that likes to stir things up.

Given these findings, Ellen and Andy Smith, owners of the local office of Comfort Keepers®, a franchised, in-home care services provider have provided the following tips for family members to address with their aging relatives this holiday season to ensure a happy and healthy time is had by all.

1.     Link Up with Like Minds: Senior groups plan activities like exercise, meals, games and trips for seniors wanting to get out of the house and expand their circle of friends. Look into these groups with your relative and find one that best fits their interests. Some local numbers to call: The Goebel Center in Thousand Oaks at 805-381-2744, the Camarillo Senior Center at 805-4824881, and the Simi Valley Senior Center at 805-583-6363

2.       Pick Up a Pen: Sending holiday cards is a wonderful way to spark a new kind of relationship between family members. Once these lines of communication have been opened, seniors will be more inclined to keep up with the correspondence long after the holiday season ends.

3.      Get in the Game: Brainteasers, memory games and mathematical puzzles are not only fun but can employ areas of the brain that aren’t regularly stimulated. Many experts recommend taking preventative measures against Alzheimer’s, including partaking in mentally stimulating activities, particularly crossword puzzles, scrabble, or brain teasers. Medical experts believe that these mind building hobbies help nourish the brain and build a buffer against diminished brain function. Try a few with your relative while you are in town and leave them with a few books or games that they can continue using after you leave.    Doctors in Japan have gone so far as to recommend the purchase of hand-held video brain-training games for elderly patients to stimulate their brains regularly at home. Google “brain games for seniors” for good ideas.

4.      Make a List and Check it Twice: Send your relative a list of possible gift ideas for other family members and review their purchases upon your arrival while helping them with wrapping. If you have the luxury of arriving prior to the holiday, accompany your relative on a shopping excursion to select the perfect presents.

5.      Hire a Helping Hand: If you are still concerned your relative is in jeopardy of mentally “checking out” when the holiday season comes to a close, discuss the possibility of hiring an in-home companion or CNA. Not only will this person be able to help with basic chores and activities, and personal care too if needed, but the caregiver will be able to provide much-needed social interaction for your loved one on a daily, weekly or live-in basis.

Ellen and Andy Smith own the local office of Comfort Keepers® which provides in-home Caregivers and Certified Nursing Assistant level care  for individuals needing assistance with activities of daily living. Services are tailored to the individual needs of each client, and helps seniors to continue living safely and in the privacy of their own home. Care duties include companionship, meal preparation, light housekeeping, grocery shopping, transportation, personal care assistance, accident prevention, and more. Comfort Keepers has over 550 independently owned offices worldwide.  Call 805-494-9900, 805-389-4600, or 805-526-6000

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