consumer financial protection bureau

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) is seeking information from consumers about their reverse mortgage experiences. They will use the information that is submitted to determine whether new regulations are needed and to inform their suggestions to Congress. If you have a reverse mortgage or considering a reverse mortgage, tell the CFPB what you think…

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Creating Retirement Income with Reverse Mortgages

Who ever thought that it would make sense to get a mortgage that would decrease your home equity? Well in certain instances it does. Lending philosophies have changed over history and they will continue to change in the future.
Before the Federal Housing Administration (FHA) existed only 50% financing was available for an American to buy a home. FHA created the pathway to home ownership for low and middle income Americans.
FHA was created in 1934 when the housing industry was defunct. Americans didn’t own in those days they rented. The American dream to own a home was for many, just that a dream. FHA changed all that. The US government created FHA to help military families buy homes. They insured the financing which would have been other wise unattainable to those families. Starting in the 1950’s FHA made it possible for Middle America to become homeowners. This government program created the pathway for our housing market to grow and make it common place for home ownership. Currently, most every homeowner is financed through a private institution because FHA paved the way.
In the 1980’s Congress started to study reverse mortgages and their potential of helping the elderly in financing care and retirement. FHA began to insure reverse mortgages. In 1988 Fannie Mae announced its intention of purchasing reverse mortgages insured by FHA. Reverse mortgages like most programs started as a pilot program. FHA’s insurance assured these loan programs become successful. Now, as our society grows older, and we are living longer, a reverse mortgage can make the difference between getting older in poverty, just getting by or supplementing retirement income to make a more comfortable retirement lifestyle.
So why consider turning your equity into cash? Americans are not good savers. AARP says that a majority of Americans are counting on Social Security for most of their retirement income. The challenge is that Social Security’s intake will fall short of its expenses in 2017 by some estimates. This is the year when the first of the Boomers turn 70 and will be counting on Social Security to fund a majority of their retirement. Boomers haven’t saved enough money for retirement. What might make sense to supplement retirement income?
The largest asset that most Americans own is their home. The home they worked to pay off or near pay with years and years of payments. Why would a Reverse Mortgage make sense for a senior or a senior boomer in the future? Because it will make the difference between working part time to make ends meet or not, paying for medicine or medical care or not, paying for long term care or depending on the government for care or not. A Reverse Mortgage can make a difference in people’s lives. A Reverse Mortgage can create a life with the security of never losing their home, never making another house payment and creating retirement income they can count on.
When the “Silver Tsunami” hits I predict a paradigm shift in how we view our largest asset.
FHA has created paths for us in the past and I believe they have again now. I think you’ll see hybrid reverse mortgage products that will be designed to help fund our retirement. In Australia for example, you can attain a reverse mortgage on a commercial property. I think that a paradigm shift on how we can best use the largest asset that many Americans will own during their lifetimes is occuring. It is my belief that Reverse Mortgages will be as common and as important to the American retirement plan as the IRA or 401k.
Angella Conrard is a Reverse Mortgage Advisor and the President/Founder of the National Aging in Place Council – OC. For more information on current products visit her website www.reverse-your-mortgage.com. Or contact Angella Conrard directly at 1-866-949-7030.
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ARE YOUR PARENTS RUNNING OUT OF MONEY FOR RETIREMENT OR CARE?

Your parents have always been thrifty. They helped you through college and were very careful about saving for retirement, but lately you notice that they aren’t going out very often, they are very careful when they shop, they often complain about the high cost of fuel or their utility bills. Your parents are not alone. Even some of the best laid plans can come up short. With medical costs rising in the double digits, exponential rising fuel costs and lower returns on investments, their nest egg might be coming up short.

Our parents have traditionally relied on a three component retirement plan: Social Security, pension and savings. Your parent’s average Social Security check is $1,002. You’ve read it in the news, you’ve seen it on sixty minutes, pension plans are under funded and benefits are being cut. That leaves your parents with their nest egg to retire on. It may be enough now. They are getting by with a few hundred dollars here and there from you and your siblings but what about as they get older? Are they pinching penny’s and still do not have quality of life? Money for travel? Extras? What if they need in home care? A couple of hundred dollars might pay for someone to come in for a three or four days. Then what?

A reverse mortgage may be the answer. If you haven’t heard of them, your parents have. They are being inundated with advertisements in the mail for them every week. These loans are increasing in volume every month. So why doesn’t anyone know about them? They haven’t hit the mainstream yet, but they will. Reverse mortgages are a special type of loan strictly for senior citizens. In the past they have had a bad reputation because in the early years of introduction there were predatory lending practices that occurred and many senior signed over a portion of the equity in their homes, “equity sharing programs”. Well thanks to the federal government reverse mortgages have been cleaned up. They are federally insured and heavily federally regulated. Reverse mortgages have turned into an empowering financial tool for seniors that can make the difference in whether or not a senior has to work part-time at Wal-Mart to make ends meet or live comfortably in their retirement years.

Here’s how they work. To attain a reverse mortgage you must be 62 years old or older. They are very similar to an equity loan except that there are NO PAYMENTS for the life of the loan. The senior qualifies of a percentage of their equity to be turned into cash. The amounts of their proceeds are based upon the senior’s age, the value of their home and their homes location. If there is a first mortgage on the home this must be paid out of the proceeds. Paying off the mortgage in itself is often times a substantial increase of cash flow each month for a senior. Can you imagine if you didn’t ever have to make another house payment?

These loans are exceptionally flexible and safe. Before a senior can even submit a loan application they must attend an independent counseling session paid for by the federal government to insure that they understand the loan completely. This counseling session is independent from the lender and the originator and has no cost to the senior. And did I mention that these loans have NO OUT OF POCKET COSTS and NO PAYMENTS FOR THE LIFE OF THE LOAN! Reverse mortgages also have no credit requirements. The senior can take the proceeds in a number of ways. They can set up a line of credit that they can draw on as needed. The credit line grows at the same rate as the loan if unused and does not count as loan principle until used. They can receive a lump sum of cash up front at closing; they can set up a guaranteed monthly tenure payment for life, or a combination of these.

One of our clients, a very active woman of eighty did part time catering to make ends meet. After she refinanced with a reverse mortgage, she paid off her first mortgage, she set up a credit line of $25,000.00 that she can draw from at anytime; she took $25,000.00 at closing and set up a guaranteed tenure payment of $1000.00 per month for the rest of her life. Formally she worked part time and worried. Presently, she travels, gets massages and has peace of mind.

Reverse mortgages have changed and make financial sense. If your parents need money for quality of life either for things they want or things they need. Reverse mortgages may be the answer. Call me and get the facts about how a reverse mortgage can help the senior in your life.

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If You Are Over 60 Years Old, This Free Benefits Online Search Tool Is a Must See

The National Council on Aging created an online tool that helps seniors tap into billions of dollars in Benefits to help pay for healthcare, food and utilities. The Benefits Check Up Tool helps people over 60 years old sift through over 2000 federal, state and private benefit programs they’re eligible for based on their financial…

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Is Insurance the Answer to Long Term Care Planning?

A recent USA Today article states that there is an increase in seniors living over the age of 90. According to author Haya El Nasser “The number of people living to age 90 and beyond has tripled in the past three decades to almost 2 million and is likely to quadruple by 2050”. Seniors who…

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10 Most Affordable Cities for Retirement

The AARP has published the 10 Most Affordable Cities for Retirement.

The 10 most affordable places are located in the following states. Click a state name to see which city made the cut, and why.

From AARP: http://www.aarp.org/home-garden/livable-communities/info-07-2011/affordable-cities.print.html

 

How to Get the Facts in Researching Reverse Mortgages

You have seen them on TV, you have received dozens of pieces of junk mail regarding them, but where do you get the facts and how do you decide if a reverse mortgage is right for you? The best resource for reverse mortgage facts is professional or non-profit organizations. Many reverse mortgage lenders will provide…

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Reverse Mortgage Borrower Educated Herself and Dispelled Myths -Testimonial

Image via Wikipedia Ms. C of Hueytown Alabama initially made an inquiry of reverse mortgages in January of 2010. Like most borrower’s she started her research online. She had heard of all kinds of bad things about reverse mortgages. Many of her friends told her not to do it. She heard things like the bank…

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