| As industry professionals, we often have an | | | | a line of credit). At first I felt that he may be |
| opportunity to sit in on conference calls on | | | | correct, reverse mortgage fees with the |
| market trends and other things that affect | | | | mortgage insurance premiums, etc can be high so |
| reverse mortgages and the senior borrowers | | | | I thought that $37,000 sounded very low and |
| who get them. We were on one today that | | | | maybe not worth the investment...until I saw that |
| echoed something that we have been saying so it | | | | his father also paid off a $156,000 existing lien on |
| seems that it's to a point where we should pass | | | | his home that was a higher interest rate and he |
| this information on to everyone. Reverse | | | | was making a mortgage payment of over |
| Mortgages have gained in popularity but it seems | | | | $1,025.00 per month that he really could not |
| that there has been an increasing amount of | | | | afford. This was another deal that the press could |
| negative press lately and many senior borrowers | | | | have had a field day with if they only reported |
| have become hesitant to consider this financing | | | | that he paid $15,000 in total costs to receive |
| tool available to borrowers age 62 and older. Is a | | | | $37,000 without taking into consideration that he |
| Reverse Mortgage a safe loan and is now a good | | | | paid off his existing debt and never had to make |
| time to get one? Those are two questions we | | | | another payment for life and he now had a line of |
| hear all the time and we say ABSOLUTELY to | | | | credit in the amount of $37,000 available to him |
| both! | | | | for his use. |
| With regard to the safety and all the negative | | | | As to the second question regarding whether or |
| press as of late, the reverse mortgage is | | | | not now is a good time. Now is an excellent time. |
| probably the safest loan available to any borrower | | | | Aside from the borrower's age and the property |
| at any age even though it is available only to | | | | location, the other factors that determine how |
| borrowers age 62 and above. The borrowers | | | | much money borrowers can receive on their |
| must obtain third-party counseling and should have | | | | reverse mortgage are the property's value and |
| their family members and/or trusted financial | | | | the interest rates. Property values have been |
| advisors involved in the entire process. As is the | | | | declining for a while now and are projected to |
| case with anything in which people are involved, | | | | continue to go down at least through the end of |
| there is a possibility that someone, somewhere, | | | | 2008. Now is the perfect opportunity to make |
| will try to take advantage of others. However, | | | | the most of the property's value before they fall |
| every article I've read so far about abuse related | | | | to a lower level and the borrower does not |
| to reverse mortgages, were centered around one | | | | qualify for as much money. And then there is the |
| of two things; either the person originating the | | | | interest rate part of the equation. The fully |
| reverse mortgage was selling another product to | | | | indexed rate for a HUD HECM is below 5% which |
| relieve the senior homeowner of their reverse | | | | means that the borrower will receive the |
| mortgage funds, or someone felt the proceeds | | | | maximum amount of cash available under the |
| did not benefit the borrower enough for the fees | | | | program. |
| they had to pay. This is why we say that the | | | | The bottom line is that now is the best possible |
| family and financial advisors of the borrowers | | | | time to get a reverse mortgage and borrowers |
| should also be involved in the process. Do not to | | | | and family members should take a good look at |
| obtain your reverse mortgage from anyone selling | | | | their options. If you have been holding back |
| other products. | | | | because of an article you read with some horror |
| Also, some of the press is not deserved and | | | | story, consider the circumstances and make sure |
| misreported. One of the closing statements that | | | | you have the safeguards in place. Don't let |
| was recently brought to me by the son of a | | | | uninformed or biased reporters or authors push |
| reverse mortgage borrower who was livid | | | | you one way or the other, take a good look and |
| because his father paid what he felt was way too | | | | see if it's right for you and if it is, now is a great |
| much in fees to only get $37,000 in cash (actually, | | | | time to be a reverse mortgage borrower! |