The growing demographic category of elderly homeowners has drawn a New Zealand-based reverse mortgage company to Canada to compete with Canadian Home Income Plan, which has a monopoly in the market.
Canadian Home Income Plan is a subsidiary of publicly traded Home Equity Income Trust, which also operates CHIP Mortgage Trust.
Privately held Senior’s Money International operated in Australia, New Zealand, Ireland, Spain, Headquartered in Mississauga, Seniors Money Canada will initially offer its reverse mortgage product in Southwestern Ontario, with lower interest rates than its rival. (more…)
Written by charles dennis on August 30th, 2007 with no comments.
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August 29, 2007 — In an attempt to expand their already growing image as the pros in the Reverse Mortgage industry, Fidelis Mortgage signed an agreement with Radio Advantage in Dallas, representing broadcasting legend Pat Summerall. Mr. Summerall recorded a new 60 second radio spot which is currently airing in the Baltimore, Maryland area. “The partnership with Mr. Summerall will ensure that we gain a much larger share of the Reverse Mortgage market than we already have in Maryland” says Eric Rittmeyer, President of Fidelis Mortgage.
With Reverse Mortgages continuing to break records year over year, it is important that homeowners 62 and over understand how they work. With rising healthcare and energy costs, many senior homeowners are finding it more and more difficult to stay in the home they love. In response to the apparent financial problem’s seniors are facing, the U.S. government created a solution to help seniors enjoy their retirement years. The solution is the Reverse Mortgage. Insured by the Federal Government, the Home Equity Conversion Mortgage (HECM), enables homeowners 62 and over to convert part of their homes’ equity into tax free income without having to sell their home, give up the title, or take on monthly mortgage payments. (more…)
Written by charles dennis on August 30th, 2007 with no comments.
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Greetings on this 4th of July. I received this great press release in my inbox and wanted to share. Enjoy the holiday!
WASHINGTON, June 28 /PRNewswire/ — Americans age 62 or older hold an estimated $4.3 trillion of home equity according to the NRMLA/Hollister Reverse Mortgage Market Index (RMMI). Although the reverse mortgage industry has seen tremendous growth in the last five years, only a little more than 300,000 reverse mortgages have been originated in its short history, representing less than 1% market penetration.
The index, launched today by the National Reverse Mortgage Lenders Association (NRMLA) and The Hollister Group is the first market indicator to collect critical market, housing and demographic data, and to track and project the market for reverse mortgages.
In the first quarter 2007 alone, there was a $19 billion increase in senior home equity. This increase was reflected in a 0.4% increase in the RMMI to 205.6 from 204.7 in the prior quarter. The index will reflect the current value of (more…)
Written by charles dennis on July 4th, 2007 with no comments.
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This story was first posted at Army Times.
The proposal — currently pending before the House Veterans’ Affairs Committee — would allow the Veterans Affairs Department to provide a home equity conversion mortgage, or HECM, to U.S. veterans. Under the plans, sponsored by Rep. Michael Michaud (D-Maine), veterans age 62 and older could receive monthly payments from the VA that would be based on how much equity they have in their home and how long they would like to receive monthly payments. The payments would have to be repaid, with a fee, when the home is sold either by the veteran or by survivors.
Opponents say the bill does not provide anything that the existing Federal Housing Administration loan program doesn’t. Keith Pedigo, the VA’s loan guaranty service director, said the FHA program may be better, he said, because it fully insures lenders against “all losses,” while the VA only guarantees a percentage of a mortgage, generally one-quarter of the full amount. Full Story
Written by charles dennis on June 27th, 2007 with no comments.
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In yesterday’s LA Times, we find one of the first true green light articles for reverse mortgages from a major newspaper. But of note, were the words of Housing and Urban Development Secretary Alphonso Jackson described reverse mortgages as “the bright spot in today’s housing market,” adding that “their significance will only increase as more baby boomers reach retirement.” Wow I did not know the government was in the business of well (more…)
Written by charles dennis on June 26th, 2007 with no comments.
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Seth Sutal
Associated Press
Jun. 12, 2007 09:41 AM
Q. What is a reverse mortgage?
A. A reverse mortgage is a financial tool that lets you take money out of your home to help fund your retirement. However, financial advisers caution that they’re not for everybody, and should probably not be your first choice for supplementing your income.
They’re called “reverse” mortgages because instead of paying back a loan to a bank and building up equity, or ownership, in your house, the bank is paying you out part of the equity in your home in cash, either in a lump sum, regular payments, a line of credit or some combination. The debt incurred would be paid off once the home is eventually sold, typically once the person who took out the loan moves out, sells the home or dies.
These types of loans are relatively new, but more people are using them.
Darryl Hicks, spokesman for the National Reverse Mortgage Lenders Association, an industry group, says Congress passed a law in 1988 creating a reverse mortgage loan program that was guaranteed by the U.S. Department of Housing and Urban Development, or HUD.
Issuance of those loans has grown since then from a few thousand a year to 85,639 in 2006, up from 48,493 the year before, according to data compiled by the association from HUD.
Taking out a reverse mortgage is an option some people choose if they have a fair amount of equity in their home, need income, are at retirement age, and don’t want to sell or leave their home.
John Rother, the policy director for AARP in Washington, cautions that the fees involved with getting a reverse mortgage can be high - some $20,000 to $25,000. He also says you’re likely to get more money in your pocket if you sell the home.
“If your only objective is getting money, you’re better off selling,” Rother said. “This is not something you want to do casually - this is really more of a last resort.”
Rother also pointed out a factor referred to as “longevity risk.” If you elect to receive monthly payments over a fixed period of time and that span runs out while you’re still alive, you could suddenly lose that income while still being liable for upkeep on the house, taxes and insurance.
Bob Jazwinski, a CPA and financial planner based in Hermitage, PA, says he also counsels clients to think of reverse mortgages only as a last resort. He recommends considering alternatives such as selling the home and investing the proceeds in a way to generate income.
Jazwinski says that even if you do take out a reverse mortgage, in many cases you can only draw down some 40 percent to 50 percent of the equity value in the home. The rest will go to cover interest costs as well giving the lender a cushion in case the value of the home declines.
“There is a price to be paid - and that is the interest cost of the funds borrowed, and that accumulates over time,” Jazwinski said.
Written by charles dennis on June 14th, 2007 with no comments.
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Whenever I consider retirement from a good career, unless I put on my thinking cap I always thought about it as leaving the workforce cold turkey and riding off into the sun set. If not cold turkey, then going from working a 9-5 in April with a paycheck to living in a beach front condo in May with a full pension. But for most Americans, myself included thats not retirement, thats what we call winning the lotto. The San Diego Tribune gives a great picture of what a normal near term retiree will look like. While the article is long anyone considering retirement and using their home equity as a part of the strategy, should read closely here.
Bonnie Daly has a pretty long list of “to-do’s.”
First, she’d like to work as a docent for a local art museum. Then, it’s off to get some training to further her nursing skills. Later, she’d like to do some pro bono therapy work and maybe even join the Peace Corps at some point.
When exactly the 71-year-old San Diego resident will be able to get started on all this is a big question. Full Story here.
Written by charles dennis on June 11th, 2007 with no comments.
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