Banks are still suffering

6 more bank closings forced by the FDIC so far in 2009. Continued market weakness. If seniors still have a need for more cash flow in retirement we may have an answer for them.

Update on Reverse Mortgage

The rule changes we have been waiting for have been implemented. Horray!!
the new national maximum lending limit has been increased to at least $417,000 with some selected high cost areas currently at $625,000. This means that many more people can currently qualify for a reverse mortgage than ever before. The downside is that some home values have fallen enough that the equity ratio may no qualify for a Reverse Mortgage.
Determining if they are right for you is a simple process that lenders like myself can walk a client through. They are not credit driven they are equity driven. All homeowners must be over age 62, the house owner must have a reasonable equity position to be eligible, the zip code must be residential not agricultural or commercial. Generally with the answers to about 5 questions we can determine if you are likely to be able to get a HUD HECM Reverse Mortgage.

The new rule changes have reduced the fees a bank or lender can charge. The up front charges are minimal and typically are well under $600.

Alternative To Taking Social Security Benefits Early

A recent survey of over 600  seniors over 60 years of age  shows that almost 50% intend to start taking SS benefits at age 62. This significantly  reduces the amount you get paid every month for the rest of your life.

For most people less than age 65, tapping SS benefits early is a significant and very costly  mistake. It should not be done before investigating all of the other options that may ber available. A financial professional can  help you with this analysis. for many  a  HUD HECM Reverse  Mortgage may be the annswer. Other kinds of finanlcial alternatives should be investigated first. You need to maximize the income your current assets can  produce.

Reverse Mortgage Updates

There is a good chance that the government will implement new higher lending limits for HUD HECM Reverse Mortgage starting  in November. This may be really good timing for seniors dealing with the triple whammy of high inflation, falling asset values and dropping interest rates. This is really putting the squeeze on seniors or anyone with  a fixed income  or anyone with moderate income.

More details will follow when we get additional information. Providing Reverse mortgages nationally

financial-services@live.com

Is now the right time for a reverse mortgage

Many Seniors are being whipsawed by rising inflation and a brutal decrease in retirement assets. The major problem with this drop in asset value is that they have to reduce withdrawals or risk running out of assets to meet their retirement needs. This is a major problem for them. What are they to do? Well a HUD HECM Reverse Mortgage is one possible answer. Remember these are Federally guaranteed loans and they are not dependent on good credit or income. The proposal stage does not even require a social Security Number. Qualification is dependent on Age of the homes owners (all must be age 62 or over), the present market value of the house, and the equity in the house (present value minus first mortgage, any second mortgage and any liens.) Then you also need the residential zip code. All properties must be zoned  residential.

What is the benefit for the seniors.  They get to live in the house as long as either of them is alive and able to live in the home or until they  choose to sell. Their expenses drop immediately by the amount of the mortgage payment less taxes if withheld. their income increases immediately by the same amount they are now saving on taxes. their income may also increase further if they have sufficient equity to secure an equity line of credit or a monthly fixed income stream. Of course a Reverse  Mortgage is not right for every potential client! The only way to find out if it works in your particular situation or if it is right for you at all is to contact a Reverse Mortgage qualified lender.  You can evaluate this option and some other options that can ease the cash flow burden on on you or  the seniors in your life.

Congress Passes the $700 B Bailout bill

Congress finally got a Bailout bill passed. It is no longer the 3 page proposal from the president. It is now a Book full of pork and sweeteners but at least we got something done for a change. It should begin to ease the credit crunch and ease the fears in the world economic markets!! More information will follow this weekend.Lending should improve and  rates for mortgages, reverse Mortgages and auto, and business loans should get easier to get and rates should decrease a little bit.

The Economic Crisis Is Driving Up Interest Rates

Credit markets are still tight LIBOR Rates have increased this week to 6.88% up from less than 2.6% a week ago. LIBOR Rates and other similar Rate Indexes are used in the banking markets for things like mortgages and Reverse Mortgages. Other loans like car loans will also trend upwards in cost as a result of these index rate increases.  All of these loans will cost more in the near future. Traditional mortgage loans will be more expensive if a customer can get one at all.  Reverse Mortgages are not Credit driven so qualifying is easier if a family has credit blemishes on their record.

Wall Street Journal Interesting Article on Reverse Mortgages

The Wall  Street  Journal recently ran a short article that talked about the current bank credit  crunch and its impact on reverse mortgages.  Basically it  said that if you stick with a HUH HECM Reverse Mortgage that you are protected from the impact of the  credit crunch.  Your income stream is protected. Most of the Reverse Mortgages are  HUD guaranteed loans. There are some alternatives to the HUD HECM loans and according to the  article so far the income stream is still flowing to the loan holders. Hopefully, this will continue to be the case. If you stick with a government-backed reverse mortgage, your payments are guaranteed. And if you take your reverse mortgage as an up front one time  payment, there is no risk at all.  The government only guarantees a certain number of these loans per year so if you are interested don’t wait.

I dont know much about the  non  fererally  guaranteed products because I have not  sold them.

Reverse mortgages  most often are used to help older homeowners over age 62 that  are struggling with  mortgage payments, home maintenance or property taxes, paying for medical expenses or the costs related  to Long Term Care among other expenses. Instead of the borrower making payments to the lender, as with a regular mortgage, the lender makes a payment, or payments, to the borrower. Your cash flow improves dramatically as soon as the loan originates and your expenses decrease dramatically as well.  The borrower keeps control of the house and doesn’t have to pay back the loan as long as he or she lives there. When the homeowner dies, sells the house  or moves out, the loan comes due and must be paid within 12 months.  It is typically paid  off by selling the house, and any money left over goes to the homeowner or the homeowner’s estate. If the loan exceeds the value of the home at time of sale the HUD guarantees kick in and pay the lender the amount of the shortfall. The homeowner and the  estate are not liable for any shortfall. Of course if the house appreciates the homeowner reaps the rewards of the increase in value.

Fees are typically steep — up to about 6% of the home’s value but upfront costs are very reasonable ussually under $500.  Keep in  mind in many  cases these are loans of last resort for people who don’t have current income or do not have good  credit. They need to be evaluated from that perspective.   The HUD Guaranteed loans are  limited to people who are age 62 or older, and borrowing limits are capped. There’s a  good reference source  at www.reversemortgage.org.

The most common type of reverse mortgage is a  HUD Home-Equity Conversion Mortgage, or HUD-HECM, in which the Federal Housing Administration insures lenders’ and borrowers’ risk. Those loans, backed by federal-government insurance, are secure. But if you’re considering taking out such a loan, try to wait a few weeks: A housing law enacted earlier this year raised the lending limits for the HECM product. On or about Oct. 1, the Department of Housing and Urban Development is expected to announce those limits and start using them, says Peter Bell, president of the National Reverse Mortgage Lenders Association, a trade group in Washington, D.C.

There are also proprietary reverse mortgages — often with higher lending limits (and, sometimes, a minimum-age requirement of 60)  that aren’t government-backed but which get bundled and sold to investors.  It is getting tough to find any lenders offering the proprietary reverse-mortgage products. A year ago, there were about a dozen such products. At the present time there are only to one or two lenders who are offering the alternatives.

I offer  HUD HECM Reverse Mortgages in all 50 states.  I would be happy to discuss whether  a HUD HECM Reverse Mortgage might be right for your or a senior friend or family member.    How can I help you?

financial-services@live.com

When Is A Reverse Mortgage The Right Thing?

I met a a lady there.  We were talking about the economic mess and WAMU, and other recentban k failures.  She asked me what I  did and  I said I handled retirement assets,  reverse mortgages, and LTC and LTD policies. When I mentioned Reverse Mortgages she Asked are they ever a good idea?  I said yes they  certainly  can  be and gave here several examples from my  personal experience. I admitted they are not right for everyone but made a lot of sense for the clients that  I mentioned.  Remember many seniors are being battered  by rising expenses, have no means of increasing their income and for many of them their assets are being destroyed by the second market  collapse in 8 years. Most peoples assets have fallen 20% or more which pushes them into a spiral when assets loose value you have to draw a larger percentage of your assets to preserve your income all at the same time that expenses are spiraling upwards. YES  for many people a Reverse Mortgage or more correctly an HUD HECM Reverse Mortgage is a good or even a necessary thing. This is not the only technique we can evaluate that can  help seniors enjoy retirement or help boomers prepare for retirement. It is one very useful technique.

financial-services@live.com

Congressional Action on the Economic Bailout

Wow In less than a week  both houses of congress in a rare show of bipartisan support hve wourked out most of the kinks for a bill to support the economic bailout. Both the democrats and the republicans have given something up but there is a good chance that the  US as a whole will be in better financial shape after the bill is passed and signed by the president.

The result of passage will make it easier for homebuyers or owners to get credit or complete a mortgage process. This will help traditional mortgage seekers and Reverse mortgage holders as well.

financial-services@live.com