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Officially, at reverse-loans.net, we do not have a stance on reverse mortgages but rather choose to inform our readers of the good and bad of the financial tool so that you can make your own decision. (more…)
Written by charles dennis on May 22nd, 2008 with no comments.
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I may be a little late on this recent NBC Nightly News segment on the dangers of reverse mortgages. A friend sent me this link to share with you. Remember, not any one loan product is right for everyone. But neither is every loan product bad for everyone. If you think Option ARM mortgages were bad, then you must have never meet an investor that needed cheap money for a short time used to make big money when the market was buzzing. To each his own:
Written by charles dennis on May 20th, 2008 with no comments.
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Having AARP, endorse a product geared for seniors is about as good as it gets. In fact, I’d say it probably goes right up there with getting in Oprah’s book club. As a financial tool, reverse mortgages can be a great option, but for the sophisticated person, the reverse mortgage is usually just the tip of the iceberg. Since I have been writing this blog, I have come across a new phenomenon in the industry of saavy seniors using these funds to pay for life insurance policies or other big loss/big reward type of financial tools.
The American Association for Retired Persons also supports reverse mortgages as a valid financial option, but urges borrowers to carefully consider whether the reverse mortgage is the correct product to meet their needs. To that end, borrowers should determine whether there are less costly options to access needed cash, make a long-term plan for managing assets, and develop a clear understanding of the reverse mortgage product.
If you have a story, please share in the comments.
Written by charles dennis on May 19th, 2008 with no comments.
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Tapping into equity,
Risky reverse mortgages become viable option as baby boomers seek ways to weather housing slump, surging costs
A house increasingly is more than a roof over the head for aging Sonoma County residents - it is a tool for financing retirement.
A growing number of retirees are tapping equity in their homes by taking out reverse mortgages. These loans, created solely for homeowners 62 or older, never have to be repaid as long as the borrower lives in their home.
Most use reverse mortgages to pay off their existing loans, wiping out their monthly mortgage payment. Others use them to draw a steady stream of cash out of their homes every month, supplementing other sources of income.
“It’s become more of a mainstream financial tool. Reverse mortgages are becoming a household word,” said Bronwyn Belling, who manages an education project on reverse mortgages for AARP.
But these mortgages are not for everyone. They are far more costly than home equity loans. There also could be benefits to selling and moving to a less expensive home.
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Written by News & Feeds on May 14th, 2008 with no comments.
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Mortgage loan officer makes life-saving call,
It’s a good thing mortgage loan officers are so persistent.
The first time Matt Pitters — who works for Melville-based World Alliance Financial Corp. — called Flora Bartley of Temple, Texas, last month, she hung up on him. He allowed that this isn’t an unusual response to telephone sales calls, but said protocol required that he give it another try — just to make sure the hang-up was intentional.
The second time he called, Pitters said, “She was kind of mumbly and hard to understand, but she did say, ‘Help me,’ and that’s not normal.”
Keeping the potential reverse-mortgage borrower on the line, Pitters called local emergency responders and gave them Bartley’s address.
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Mortgage loan officer makes life-saving call
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Written by News & Feeds on May 14th, 2008 with no comments.
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Use reverse mortgages for clean power [Opinion],
My parents built one of the first solar-paneled homes in New Bedford. They got three decades of free heat from the system, and when it broke down they invested in a modern photovoltaic system.
I live in the Bay Area and have seen first-hand the excellent work Van Jones has been doing around clean energy. He is a major force in the Apollo Alliance as well as the new group Green For All.
Another person who could be a major player in clean technology could be Congressman Barney Frank as chair of the Financial Services Committee. He could develop a financing tool for investing in clean energy. I personally believe that a reverse mortgage could serve as a model for solar investment (see cleanenergyrm.org).
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Use reverse mortgages for clean power [Opinion]
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Written by News & Feeds on May 14th, 2008 with no comments.
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McCaskill urges Nixon to go after scam reverse mortgage marketers,
U.S. Sen. Claire McCaskill wants more protection for senior citizens who are targeted by unscrupulous mortgage lenders. Specifically, she’s concerned about lenders selling reverse mortgages.
McCaskill is frustrated with companies sending misleading marketing materials that aim to rope elderly people into an expensive loan that can leave them penniless.
A reverse mortgage is a loan against your home that you don’t have to pay back as long as you live there. Unlike a regular mortgage, with a reverse mortgage, your debt rises and your equity shrinks.
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McCaskill urges Nixon to go after scam reverse mortgage marketers
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Written by News & Feeds on May 8th, 2008 with no comments.
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What happens when a senior has equity in his home but can’t qualify for a reverse mortgage? A traditional line of credit you may say? But what if you have no real means of paying the HELOC back? Then you share a situation with 64 year old John Thiel.
“He didn’t qualify for a reverse mortgage because he didn’t have enough equity in his property, because the market value went down and because from one year to the next, his loan for $112,000 jumped to $121,000 for the payoff,” Dunbar said.
Dunbar said the value of Thiel’s home dropped 32 percent from last year, when he applied for a refinance loan in May 2007. The lower market value and Thiel’s age means the most he can get in a reverse mortgage loan is $70,406.
“In his situation, he could lose his house. Unless he can come up with $650 on a monthly basis, and that’s all but roughly $240 of his income,” Dunbar said.
Thiel’s story was told in the April 17 edition of the Record-Bee. He said despite community response to his story, not a drop of money has landed in a WestAmerica bank account named “Save our home” that he opened. Lake County Bee Record.
Written by charles dennis on May 1st, 2008 with no comments.
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Is it a good idea to raise mortgage limits across the country during the same time when home values are falling? Depends on which side of the financial aisle you live on? While conventional rates have increased, reverse mortgage rates still lag behind. That could be a good thing in that it will afford seniors and their advisers to become better versed in reverse mortgages and their uses.
While loan limits for conventional mortgages recently were raised with the passage of the Economic Stimulus Act of 2008, those seniors hoping to tap into additional home equity via the nation’s most popular reverse mortgage are stuck with the same loan ceilings — at least for now.
The Federal Housing Administration (FHA), a branch of the U.S. Department of Housing and Urban Development, insures the Home Equity Conversion Mortgage program, which accounts for nearly 85 percent of the reverse market. The program has insured more than 240,000 reverse mortgages since 1990, while private jumbo reverse plans also have been available. Full Article.
Written by charles dennis on May 1st, 2008 with no comments.
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