Reverse Loan Consultant

Last Saturday the 23rd, I participated in an event that was offered by the County of Ventura and the Veterans Adminstration for the third year in a row.   I have been at each one and I really love doing this event and meeting the Veterans who represent the different generations that have defended our country in the last several wars.

It’s always a delightful, insightful and funfilled afternoon talking and visiting with them and hearing their stories when they are willing to share them with you.   John Castaneda was one that I spoke to and is a Viet Nam Veteran and he was a tail gunner in a Helicopter unit.   Unfortunately, I misplaced my notes where I wrote down a web page address regarding his unit.   Otherwise I would post it here, but I will be talking with him

again regarding his sister and I’ll get that information, then.

When I have it, I will publish here.  And he’s also written a manuscript about his experiences in “Nam” and would like some advice about how he can have it published or released in some fashion to the public.   Anyone out there interested in helping?   Let me know! 

Another gentleman that I met was Jesse who is 93 years old and a Veteran of WWII.   I’m not certain, but I believe that he was with his granddaughter and he really loved the fact that I asked to take his picture.   What an amazing guy.   I sure wish that I had more information on him to share in this blog.

But that’s all that I have.   I feel that these guys are walking history and it’s really important that we talk with them and hear there stories while they are still with us. 

I am involved with many community events as a Reverse loan consultant and I have noted recently, that more people are open to the possibility of using a Reverse loan.   It seems that some of the fear and ignorance regarding it, are slowly disappearing….but very slowly.

Instead of the public avoiding eye contact with me and generally staying FAR AWAY from my disply table, they are actually approaching me with an open mind and many questions.   Such as John.   He’s quite concerned about his sister’s situation, since she does not have enough income each month to make her mortgage payment and the rest of her bills and he’s worried that she will lose her home in a foreclosure.

I gave him some figures showing how much she could receive if she used a Reverse loan, but he said she’s very stubborn and afraid and it will be difficult for him to talk to her about it.   Hopefully that won’t happen and maybe I can meet with both of them in the future and personally give her the information.  He’s stressed about it and wishes she would be more open before it’s too late to do anything.

In closing, here’s a photo of me and George J. Compton, Col. USA (Ret.).   George is the County Veteran Services Officer and he’s very passionate about his “Vets”.   He’s a decorated Viet Nam Veteran; the Purple Heart AND he was in charge of the invasion of Panama a number of years ago, booting out Noriega!

He is the “go-to” guy for any Veteran or a family member that needs to know more about their benefits, as there are many.   And he also writes a column in The Ventura County Star.   Anyone in Ventura can reach him at: 805-385-6366

A common question that comes up, is the reverse loan offered by the government?   And the answer is yes for a certain type, while there are some other programs that are available for larger loan amounts and they are called proprietary reverse mortgages.

The most popular program is the one offered by FHA/HUD, federal agencies and it’s called the “Home Equity Conversion Mortgage, otherwise know as “HECM”.   A reverse loan is highly regulated by federal and state laws and are considered to be the safest loan in the lending industry.

In 1989 HUD selected 50 lenders that would  offer the first FHA reverse loans. Previously they were being done but were a terrible option for a senior.   Typically there was equity sharing with the lender and sometimes the borrower was required to purchase an annuity.  Due to these earlier loans and how awful they were, the reputation of the loan became tainted and it’s been a bit difficult to overcome the old persona.

But once the federal government stepped in and developed regulations to protect the senior, they have become an excellent option for additional funds for living expenses or any other purpose.

Their popularity has increased substantially in the last three years as seniors have recognized the benefits from having the loan and the peace of mind knowing they money at hand in the event of an emergency or for monthly expenses and especially for prescription and medical costs.

Counseling by a HUD approved agency is required of all applicants and with the additional overview of the federal government, a reverse loan is an excellent and safe option for a senior to have access to their equity and know that their funds are insured, completely safe and protected.

The problem with using them is their unreliability.   As of this time there are many more choices for a Reverse loans than there were a few years ago, making it extremely difficult to present each one in such a limited format.

And if you don’t answer the questions correctly on the calculator, you will not receive the right figures and everything will be off.   The other issue is that they must be updated each week as the interest rates on each loan progam changes on a weekly basis.

If the administrator for the site isn’t on top of this and not updating the rates each week and if the individual who is requesting a quote enters any of the information  incorrectly that is needed to determine a loan amount , the end result will obviously be wrong. 

Due to the fact that there are so many different Reverse loan programs these days, it’s impossible to list each one within the confines of a calculator, and it will result in limited information for the consumer.  And if the consumer tries different calculators from several web sites, they will probably come up with many differing figures, further confusing them.

As a professional, I would be remiss in providing a method that is at best, “sort of, maybe, kind of” the numbers that a person wants to see but are typically wrong.  For anyone to make a decision as to whether or not the loan is appropriate, it’s best to speak with a trained Reverse loan consultant who can give you many examples for your review.

Please feel free to contact me if you wish further details, as there is no obligation on your part to do business with me.   I personally feel that it’s crucial to illustrate the correct figures as of the time of the inquery and to be educated on the benefits of the loan.

I had attended one my my Chamber breakfasts this morning and I mentioned the difficulty that adult children are facing with their senior parents.   As of this time, there are 20 million people that are either financially assisting their parents or doing some sort of care giving.   And in many cases they are doing both.

This puts extreme pressure on the entire family and typically the one who is providing the care giving becomes quite ill within a year.   The solution is to use funds from a reverse loan to pay for professional help and relieve the family of this hellish situation.

After the breakfast, someone approached me with this identical situation.   The immediate family is overwhelmed, angry, in pain and suffering with guilt.   The senior parents, well…they’re angry, too.

She said that she would pass on my name to her friend and hopefully she will contact me and if a reverse loan isn’t a solution, I can at least point them in the right direction for an assessment of the parents’ conditions and possibly have a professional care giver come in for a few hours each week and provide some relief for the family.

In all of the hoopla regarding the passage of H.R 3221 a week ago, nothing was mentioned in the media about the provision regarding Reverse loans.   The FHA Home Equity Conversion Mortgage (HECM) will have it’s lending limit increased nationwide to $417,000.

In the greater metropolitan areas, that figure could be $625,500!   In either case, these amounts will be the same throughout the United States and no longer based on the previous method of using the amount designated by a County.

As of this time, there is ongoing discussion as to whether the 417K will be the “floor” and the $625,500 the ceiling but until that is decided it could cause a delay in moving forward with these new figures.

There is also a provision that will allow the funds from the HECM to be used for a home purchase.   This could be very signaficant for a senior wishing to relocate but unable to qualify and make mortgage payments on a traditional loan.

I don’t have any additional details on it as of this but the time.  But the projection is for it to be available sometime in November.

The loan origination fee has been reduced by .50% but in actuality, the overall cost to the borrower doesn’t change, because of the higher lending limits. This is because the Mortgage Ins. Premium  (MIP) that is charged by FHA, is based on the lending limit and since they are going to be higher, pretty much washes out the savings gained from the lower origination fee.