are reverse loans safe? new reverse loan rules

Reverse Mortgage Misconceptions

In my previous post, I discussed the negative image of the Reverse loan and where it came from and how we in the industry, are still plagued by this perception that is no longer true.

In spite of the amount of television ads and the many qualified resources for accurate information about the FHA loan program, there are still many people that continue to believe that they are a terrible option for a senior to use to access their equity.

Not true.

And I have to wonder how many seniors chose not to take advantage of the HECM program when it would clearly benefit them, due to their fear and lack of credible information.

I do not work for a BIG Lender, I am employed by a Broker and I work independently from my home office and I always, always meet potential clients personally in-their-homes.

See what my clients are saying!

I do not advertise and neither does my Broker and I conduct my business 100% referral based. From former clients, Bankers, Trust and Elder Law attorneys and Financial Advisors. I have built relationships with them over the course of many years and they know that they can trust me to take excellent care of their clients.

That is how I transform mistrust and lack of credibility. And most importantly, I do not pester them to apply for the loan. It takes time to make a decision and it has to be the best one for the client. Not me.

However, an excellent resource for information that is accurate and correct is to chose one of the HUD Counseling agencies and request a telephone appointment for Reverse loan counseling. They generally charge between $125 to $150 for an hour session, but it’s worth it and will give a person a better grasp of the loan and how it may or may not benefit them.

Here is a link to HUD for a list of approved counseling agencies.

https://www.hud.gov/program_offices/housing/sfh/hecm/hecmlist

So “whatever you have heard”, don’t believe your neighbor, friend, hairdresser, financial advisor or anyone that is not qualified or knowledgeable about Reverse mortgages.

Because they simply do not know anything.

Only “what they have heard”.

August 4, 2017 Documentation for Reverse Loans No Comments

Reverse Loan Paperwork

Reverse mortgage loan applications need the following documents from the borrower and it’s very important that they provide everything that is needed to process their loan in a timely manner.

How quickly a loan funds and closes mainly depends upon the borrower’s cooperation in providing whatever the lender as requested.

Copy of photo I.D. Typically a current Driver’s License or a Passport
Copy of Social Security Card or a Medicare Card
Copy of Social Security Awards Benefit Letter. These are mailed out each December and show how much Social Security income will be received in the following year.
(2) Months of checking acct statements ( All pages) to show SS deposits or any other payments such as a pension/retirement check.
Most recent statement for any existing mortgage(s)
Copy of Homeowners Insurance Declaration Page
Complete copies of most recent quarterly statements for investments and or 2 months of bank statements. All pages.
Copy of Trust if one is in place. The new loan will record in the name of the Trust.
Name and Phone number for the management company if there is a Home Owners Association.

If the borrower is currently employed or receiving income from rental properties, the following items will also be required along with the list above this line.

(2) Years Federal Tax Returns – All Schedules
(2) Years W’2’s and any 1099’s
Most recent Year-to-Date Pay Stub for the previous 30 days.

Yes, I know. It’s a lot of documentation and it’s very similar to what is needed for a traditional loan. However, it continues to quite easy to be approved for a Reverse loan compared other mortgages.

See what my clients are saying!

Plus, you won’t have any payments to make on it, so don’t be intimidated by this list.

If the reader has any questions about this or anything else about Reverse loans, please call me. I’m here to help you through the confusion.

October 31, 2014 Financial Planning and Retirement, Reverse Mortgages No Comments

New Regulations for Reverse Loans

An article that was recently published by Bankrate discussed the new regulatory changes to the FHA Reverse mortgage program for seniors and how these new regulations make this even a safer and more viable option for retirement planning.

Plus it also mentions the option to use a Reverse loan to purchase a property if a senior wants to “down size” from there current home that may be too large and costly for them, to something smaller.

Here is the second part of the summary of the article plus a link to the entire piece.

Bankrate: New Rules Make Reverse Mortgage Viable

October 23rd, 2014 | by Cassandra Dowell Published in News, Reverse Mortgage

“Another major change noted is when the Federal Housing Administration, or FHA, announced its HECM for Purchase Program, which enabled qualified seniors to downsize or relocate by using a reverse mortgage to purchase their new home, thereby saving on closing costs.

‘Given the use of actuarial tables in determining the loan amount, it’s going to be a smaller draw as a result,” Ramsey Alwin, vice president of economic security for the National Council on Aging, tells Bankrate. “That may squeeze out some of the individuals who are in crisis mode. But generally speaking, the new policies strengthen the product, protect the consumer and make it well-poised to be an important long-term financial planning tool, most likely for the more moderate- to higher-income population.’

However, concerns regarding reverse mortgages remain.

“There may be more predatory products created that are then attractive to the cash-poor, house-rich individual,” Alwin says. “We need to be vigilant about our consumer protections and consumer awareness for those individuals.”

Overall, the industry may see an uptick in reverse mortgages among finically savvy baby boomers, says Peter Bell, president of the National Reverse Mortgage Lenders Association.

“If instead you take a reverse mortgage as a standby line of credit — a standby cash reserve that enables your other assets to remain intact and continue to grow in value or generate income — you end up with a greater amount of wealth to fund longevity,” he says.

Click here for the entire article: