Reverse mortgage trap fears,
Australia’s investment watchdog has called for better disclosure on reverse mortgage products after it found home-owners failed to understand the complex nature of the financial products and struggled to budget.
The Australian Securities and Investments Commission report, `All we have is this house’, found some older reverse mortgage holders were also being encouraged by their children to take out a reverse mortgages in ”inappropriate circumstances”, while many found it hard to resist the availability of a large amount of credit.
Reverse mortgages, where consumers borrow money against the equity in their home and repays the loan and interest when the home is later sold, have become increasingly popular with asset rich but cash poor retirees looking to self-fund their retirement.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 26th, 2007 with no comments.
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Reverse mortgage: What you need to know [Column],
Some time ago, a puzzled reader sent me an official-looking mailing she’d received, and today the letter carrier brought me my very own copy. Pretty exciting.
It starts with news about a new “2007 Government Regulated Senior Program,” that “protects seniors,” and it offers a “2007 Senior Benefit Update” along with a picture of a couple of flags. I’m invited to respond to the federal-sounding “Senior Information Processing Center.” And here’s what it’s all about:
Without once mentioning the words, somebody is selling reverse mortgages here. Nothing wrong with that. Nothing new either, of course. The Federal Housing Administration’s excellent Home Equity Conversion Plan has been around for years now.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 26th, 2007 with no comments.
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For mortgages in reverse, it’s a new chapter,
One part of the mortgage market is hot: reverse mortgages. And that’s giving older homeowners more options to tap the equity in their homes - but also is opening the door to more confusion and mistakes.
Only a year ago, homeowners interested in reverse mortgages had little to choose from beyond the plain-vanilla, government-backed products that have long dominated the market. Such mortgages essentially allow homeowners at least 62 years old to sell a large chunk of their home equity back to a bank or other lender in exchange for a lump sum, monthly payments or a line of credit.
Now nearly a dozen large banks and mortgage lenders have launched reverse-mortgage products with lower fees and larger payouts. One lender has reduced the minimum age requirement to 60; others are making loans on second homes and vacation rentals. “Jumbo” reverse mortgages - for houses valued at as much as $ 10 million - are becoming more common.
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Written by News & Feeds on November 26th, 2007 with no comments.
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Liberty Reverse Mortgage Releases Proprietary Jumbo Loan,
Liberty Reverse Mortgage announced today the release of its first proprietary Reverse Mortgage product. The Liberty Preferred(TM) loan gives Reverse Mortgage originators the opportunity to provide their clients a jumbo alternative that can be used for home purchase and higher home values.
“As our wholesale business continues to expand, having a growing suite of products is critical to give our Broker Partners flexibility in serving the increasing needs of the senior client base,” said Jesse Passafiume, Vice President of Wholesale and Correspondent Lending for Liberty. “The Liberty Preferred(TM) loan is just one of many products we will be rolling out in the coming months. Our new partnerships are providing the horsepower we need to accelerate product development.”
The Liberty Preferred(TM) features include:
– Home purchase option
– No mortgage insurance premium
– Loans on homes up to $4 million in value
– Aggressive premium pricing allowing Brokers to offset borrowers’
closing costs.
Found here.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 26th, 2007 with no comments.
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Australia: Brakes on reverse mortgages,
Although the reverse mortgage market grew strongly in recent years, a new Datamonitor report has shown signs that the sector is slowing down.
The Reverse Mortgages in Australia and New Zealand 2007 report found reverse mortgage advances increased by $385 million over two years, representing more than $624 million in 2006. But against that, the sector is only expected to grow a further $36 million in 2007, or a small six per cent growth on the previous year.
Kieran Dell, executive director at SEQUAL, said the amount of reverse mortgages in NSW had reduced by 32 per cent in the year up to June.
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Written by News & Feeds on November 26th, 2007 with no comments.
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Finally a reverse mortgage for younger boomers,
Lower age requirement and closing costs are key draws
Sixty-two, 61, 60 — The age requirements for one reverse mortgage product just got “younger.”
Melville, N.Y.-based Lender Lead Solutions recently introduced Simple60, a new reverse mortgage product available to homeowners aged 60 and older. Reverse mortgages offered to date require that borrowers be at least 62 years old.
“For every 100 people I talk with about reverse mortgages, I lose 20 to 30 of them because one spouse is younger than 62 or they don’t want to pay the higher closing costs attached to the entire value of the home,” said David Peskin, Lender Lead Solutions’ chief executive officer. “We do not anticipate the Simple60 to be a substitute for the HECM. Rather, we look at it as an add-on for borrowers fitting in a specific niche.
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Written by News & Feeds on November 26th, 2007 with no comments.
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New Zealand: Reverse mortgage caution,
In his retirement years Uncle Bill lived in a modest bungalow in Spreydon, Christchurch. After Aunty Mona’s death he forged a close relationship with our three children, and we saw a lot of him.We knew that Bill did not have much to come and go on, and he constantly complained about his bank mortgage.
It was only about $20,000, but his income was little more than the pension, and clearly the cost of servicing the mortgage was a drain on his resources.
Eight years ago Bill read an advertisement about a new loan product on the market, the reverse mortgage.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 26th, 2007 with no comments.
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Interview with Mark W. Seegmiller, loan officer,
Mark Seegmiller is a reverse-mortgage loan specialist with Mountain America Credit Union, Woods Cross Branch. He says the majority of reverse mortgages help pay health-care costs and are used for home repairs, and living expenses, and to repay existing mortgages.
Explain a reverse mortgage.
The formal term is Home Equity Conversion Mortgage (HECM). Reverse mortgages allow people who are at least 62 years old and who have equity in their homes to turn that equity into cash. Basically, you unlock equity in your home that you don’t have to pay back as long as you live there. The tax-free money from a reverse mortgage can be received as a lump sum, regular monthly payments, a line of credit or in any combination of these three options. There are very little out-of-pocket expenses, and most costs can be included in the loan. You, or your estate, pay the money back - plus interest - when you pass away, sell your home or permanently move out of your house. This government-backed program is supplementing seniors’ retirement incomes across the nation.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 26th, 2007 with no comments.
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Reverse Mortgages To Back Bond Issue,
Ginnie Mae Plan Is Designed to Raise Market’s Liquidity
Federal housing-finance agency Ginnie Mae plans to roll out as soon as today what it calls the first “standardized” bond issue backed by reverse mortgages, a move aimed at boosting liquidity for one of the fastest-growing markets targeting baby boomers.
The offering, expected to total about $120 million, consists of more than 1,000 government-insured reverse mortgages, which allow homeowners 62 years old or older to turn home equity into income they don’t have to repay until they sell their homes.
Such loans have grown rapidly in popularity in recent years, thanks to the nation’s aging population, a lack of retirement savings and the rapid house-price gains in the first half of this decade. At the same time, a lack of a liquid secondary market for reverse mortgages — where lenders can sell, as opposed to hold, the loans they make, just as what they do with traditional mortgages — has constrained this growth.
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Written by News & Feeds on November 26th, 2007 with no comments.
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Seek advice on reverse mortgage,
My mother recently handed her business down to my sister and is enjoying retirement.
And while my mom and her husband have enough savings to support their lifestyle, their beautiful mortgage-free large house is becoming more expensive to keep up. However, they don’t want to downsize yet.
So, when she asked me about accessing some of the money from the value of her house through a reverse mortgage, I told her to tread carefully.
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Written by News & Feeds on November 26th, 2007 with no comments.
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