Posted on January 18, 2012 by Erin
It may be a new year, but it’s looking like the housing market may continue to be less than wonderful. In some parts of the country, home values are still declining and many people can’t seem to sell their homes. One of the ways seniors can tap into their home equity is to get a reverse mortgage.
It was reported in the Wall Street Journal that reverse mortgages are once again gaining steam. More lenders are beginning to offer the product again that allows you to take a loan against the equity you already have in your home. MetLife originated 171% more reverse mortgages in 2011 than they did in 2010! The program is tailored for homeowners ages 62 and up who want to stay in their home for a while and want to eliminate their monthly mortgage payments.
We can help you find a reputable lender in your area that can give you information on the program and tell you exactly how much money you can qualify for.
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Posted on September 29, 2011 by Erin
Stories of people doing good things are hard to come by and that’s why we wanted to include one in our blog. It’s no secret that many seniors throughout the U.S. are having a difficult time staying in their homes as values continue to decline. One option that could help seniors is getting a reverse mortgage, and a non-profit organization in North Carolina is helping do just that.
The Foundation For Homeowners is a group that helps seniors by providing free counseling services to those in danger of losing their homes. People never want to be forced from their homes against their will and through reverse mortgages, the foundation can help seniors continue to stay in their homes. The president of the foundation, Lolita Stevenson said, “We focus only on those seniors that want the reverse mortgage but are not qualifying for various reasons.” The foundation works with the homeowner to make any repairs that may need to be done to get them up to code for a reverse mortgage loan. Sometimes they may even be able to work with homes that may be considered a short sale. Currently, The Foundation For Homeowners is counseling between 15 and 20 seniors a month and their success rate for getting seniors reverse mortgages is between 70-75%.
Thinking about getting a reverse mortgage? See if one is right for you.
See how strong your current retirement strategies are by using our Retirement Calculator.
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Posted on August 22, 2011 by Erin
The Department of Housing and Urban Development (HUD) announced last week that they will be extending the $625,000 maximum loan amount for a Reverse Mortgage through December of this year. There has been major support in pushing Congress to approve this extension. According to the Mortgage Bankers Association, the temporary loan limits have benefited consumers and the housing market during these very turbulent times in our economy. With the extension, homeowners who live in high home value areas can continue to be approved for a loan of up to $625,000.
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Posted on July 12, 2011 by Erin
Think you can’t retire early? Or even at the age you had been hoping for? It seems like all the news about retirement lately has been negative – pensions being eliminated, retirement funds being depleted, Social Security benefits being cut and so on and so on. There is one major decision people can make to keep the dream of early retirement alive and that is whether or not they want to sell their home and move to a cheaper town. Many people want to stay in the home where they raised their children or stay in the community they have loved for so long. But for many people who live in expensive cities and have a lot of equity invested into their homes, moving may be the best bet to landing that early retirement.
For example, the average home price in San Francisco, CA is $813,000. The same home would cost you closer to $259,000 in Lexington, KY. And if you downsized to a smaller house, that price difference would be even bigger. For many folks who are beginning to reach retirement age, the burden of taking care of the large house that they raised their children in is too much. And sometimes the idea of starting over in a new place can be an exciting adventure.
What are your plans? Are you planning to stay where you are? Or are you thinking about moving to a less expensive community?
Curious to compare cost of living expenses in your town to others? Try Bankrate.com’s cost of living calculator.
Not sold on the idea of moving and want to stay in your home? See if a reverse mortgage may be right for you.
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Posted on June 20, 2011 by Erin
As many of you have probably heard by now, last Thursday, Wells Fargo announced it will soon exit the Reverse Mortgage business. With this announcement and Bank of America’s same announcement back in February, many are wondering why exactly the two largest providers of the loan, backed out.
The best explanation of this is that the Reverse Mortgage loans were viewed as just too risky by these banks. A Reverse Mortgage allows people age 62 and older to access the equity in their home. The homeowner is required to continue to make payments of their property taxes and homeowner’s insurance – which is where Wells Fargo saw a problem. The banks are not allowed to asses the homeowner’s ability to continue to make these payments and unfortunately, many cannot afford to continue to make their payments. If the homeowner falls into default, the bank finds themselves responsible for the delinquent borrower’s payments. This risk proved too much for Wells Fargo. Fortunately, there are still many other companies that provide these much needed loans to seniors. Unfortunately, with fewer companies competing against each other, we could begin to see a rise in fees.
Wells Fargo will be taking new application for a Reverse Mortgage until June 30th.
Read more about why Wells Fargo decided to exit the Reverse Mortgage business, here.
Thinking about getting a Reverse Mortgage before a possible raise in fees? We can help you find a trusted lender.
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Posted on May 10, 2011 by Erin
Last week, Housing Secretary Shaun Donovan was given the opportunity to stand before the Senate Banking Committee and plead his case on The Department of Housing and Development’s (HUD) 2012 appropriation request. Donovan argued it is critical that Congress restore funding for HECM counseling – HUD is requesting $168 million.
Just a few weeks ago, 88 million dollars was eliminated from fiscal year 2011′s budget for counseling. This is an issue for seniors because HUD guidelines require HECM counseling before borrowers are allowed to go through with the loan process. According to Donovan, if funding is not restored, after October 1st of this year, the expense will fall on seniors who are interested in a HECM Reverse Mortgage.
Posted on April 8, 2011 by Steve
Of course this doesn’t mean we won’t overshoot to the downside of the trendline.
Posted on October 14, 2009 by Julius
California Governor Arnold Schwarzenegger, more or less fondly known as The Governator, signed seven mortgage finance-related bills into state law this past Monday. These laws are designed to cut down on fraudulent mortgage practices.
Senate Bill (SB) 36: regulates the licensing requirements for residential loan originators in compliance with the federal Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act.
SB 237: requires appraisal management companies (AMCs) and appraisers register with the Office of Real Estate Appraisers and subjects appraisers to the provisions of the Real Estate Appraisers’ Licensing and Certification Law.
SB 239: raises the crime of mortgage fraud from a misdemeanor to a felony and makes it easier for prosecutors to obtain fraudulent loan documents to investigate cases.
Assembly Bill (AB) 260: places restrictions on subprime loans and prohibits originators from “steering” borrowers, or encouraging borrowers to buy riskier loan products when they are eligible for affordable products. It also gives state regulatory agencies the authority to suspend or revoke the licenses of real estate lenders and mortgage brokers that violate the state’s lending laws.
AB 329: sets guidelines for reverse mortgages originated for elderly borrowers — those over 65 years old — requiring specific disclosures and offering counseling service referrals. Originators are also prohibited from selling other financial products to a reverse mortgage borrower.
AB 957: gives the buyers of foreclosed property the right to choose local escrow officers to complete transactions. It prohibits the seller of a residential property from requiring the buyer to use an escrow service company or purchase title insurance chosen by the seller.
AB 1160: requires originators to provide borrowers with a mortgage summary document translated in the language the contract was verbally negotiated.
Posted on February 22, 2009 by Steve
In case you haven’t seen it here’s the Chicago Tea Party video by Rick Santelli.
I live in a pretty wealthy area full of nice houses where the median price is around $1M, which to date has been pretty insulated from the housing price downturn.
So it was more than a little surprising to hear that some people in our area are lining up to get a bailout on their loans – some of which are Negative Amortization Interest Only loans. Whether or not they’ll be successful is questionable since the Refinance option is only for Fannie and Freddie owned conforming mortgages – however the Loan Modification component looks like it may help anyone. We have heard stories of people in this area getting their Jumbo(> $729K loans) written down to 3-4% for 30 years and in some cases principle reductions. Here’s the executive summary for the Homeowner Affordability and Stability Plan.
Most Americans are current on their mortgages and are paying their debts – many of them have taken big hits to their retirement savings account and other investments. I understand the idea that you want to prevent the blight of foreclosed houses in areas where there are no buyers. However in towns like ours and many others that are attractive to people – there are plenty of buyers out there – many of whom have been renting due to the recent housing bubble. By subsidizing people who bought houses they can’t afford – we are perpetuating artificially high housing prices and rewarding poor decision making and supporting the heads I win / tails you lose philosophy that promulgated excessive risk taking by Wall Street and Sub Prime borrowers. It’s the same problem – people saw no downside and if we use tax payer dollars to pay down million dollar mortgages – we are just continuing the problem.
If we allow markets to hit and clear at their natural prices – then we’ll create sustainable communities and healthy markets. If we do otherwise we create all kinds of incentive problems and turn everyone into a welfare seeker that is focused on how to get their bailout vs. how to contribute constructively to society. Some people may “lose” their homes (which in many cases they don’t have equity in), but people need somewhere to live so investors will buy the houses and then rent them back out for a profit, which brings private capital back into the markets – so people shouldn’t be homeless they just won’t “own” taxpayer subsidized houses.
What do you think?
Posted on February 22, 2008 by Steve
I just read the NY Times article on a proposed “HomeOwner Rescue Plan” for people who’s houses are now worth less than their mortgages. In the both the article and the comments there are a number of people who say that unless this bailout happens, then millions of people could lose their homes or have to severely curtail their lifestyles and that this is un-acceptable in America. The main rationale seems to be that if some people bear economic pain then it could hurt everyone else. Some of the proposals include forgiving mortgage amounts that are above the current value of the house. The last time I checked the only people offering “pay what you can afford” plan are charities. If we start forgiving debts and freezing ARMs then we’re letting the US government into the business of re-writing private sector contracts. When Hugo Chavez in Venezuela nationalizes Exxon assets - he gets demonized…but if the US Nationalizes the debt of people who bought houses they can’t afford that’s saving the country?
There is and will be a lot of economic pain as a result of this mess, but it’s better that the economic pain is born by the people who made the bad decisions versus people who made good decisions and lived within their means. People who make good economic decisions tend to use resouces efficiently – if the US wants to maintain its position in the world, then we need to use our resources efficiently. It should be a net positive if we reward (or don’t punish) people who’s values and actions are aligned with prudent decision making and efficiency vs. the “I need it now” mentality that has been at the fore until recently.
Reminder to self – blog on the Marshmallow Test in the near future
There are plenty of people in the US that used the loose credit environment to take on debt that they could not afford, so that they could live an unsustainable lifestyle. That’s their decision – but I shouldn’t have to pay higher taxes, so to pay off their new Lexus or whatever lifestyle choice they made. If someone didn’t take the time to understand the loan they were getting – well – tough cookies – hopefully they’ll learn a lesson and won’t make the same mistake next time.
Let’s not forget that the vast majority of people out there are not going to lose their homes. If some people lose their houses – well there are lots of renters out there that I’m sure would be happy to buy them up at rational prices. If housing prices come down – well then more people can afford to buy houses. There are plenty of people out there who have been waiting to buy houses at prices that won’t keep them in debt the rest of their lives – just because some people decided they couldn’t wait that doesn’t mean I want to pay for their house/car/RV/Vegas vacation/etc.
It’s better for us to clear out this mess all at once – if the government tries to bail out homeowners – it will just extend the period of pain before this is worked through and re-direct the resources of the productive prudent people in this country to subsidize people who paid irrational prices for their houses.
Below an interesting chart to put housing prices in perspective.
![[housingmarket_nytimes.jpg]](http://bp0.blogger.com/_SfxDExxUukY/RvpYc_LhARI/AAAAAAAAAJM/Pe3JgMUfGXU/s1600/housingmarket_nytimes.jpg)
![[housingmarket_nytimes.jpg]](http://bp0.blogger.com/_SfxDExxUukY/RvpYc_LhARI/AAAAAAAAAJM/Pe3JgMUfGXU/s1600-h/housingmarket_nytimes.jpg)
