Housing Bailout good for Reverse Mortgages??

The housing market was the leading story in all media outlets for the past week. The main focus was the nations foreclosure rates and the strength of the banks that hold the mortgages for these homes. The housing bill (HR 3221) that was passed draws most attention to the emergency funds for Fannie Mae and Freddie Mac.

But there is some GREAT news to bill HR 3221 regarding Reverse Mortgages. The bill addresses two aspects of reverse mortgages that have sometimes made them unattractive to potential borrowers:

1. Fees. Most borrowers pay hefty upfront fees for a reverse mortgage, which reduces the amount of money available to borrow. There are many stories of unethical companies taking advantage of homeowners with this loan program.

Now... this housing bill limits origination fees for federally insured reverse mortgages to 2% for up to $200,000 of a home's value, plus 1% for the amount that exceeds $200,000. This is a great way to keep mortgages companies in check! I hate stories of people being taken advantage of.

2. Loan limits. The size of a reverse mortgage is based on the borrower's age, current interest rates and the home's value. In the past, however, the maximum home value for a federally insured reverse mortgage was capped at $200,160 to $362,790, depending on where the homeowner lived.

Now... loans limits will go to $417,000, and that the high cost area adjustments to a max of $625,500 will take effect on January 1. This is great news because it will free up more money for seniors taking out a lump sum of funds, or setting up monthly installments.

A few other points to address in the new bill regarding Reverse Mortgages are:

• Home Purchase products will become available
• Requirements on counseling protocols and quality of such counseling.

This new bill is great news for seniors wanting to secure a reverse mortgage today. Its a great day also for loan originators like myself, because it will weed out unethical loan officers and their companies, and gives us more freedom with higher loan amounts to work with homeowners who may of otherwise not have been in the right equity position to take advantage of such a great program. I think now, more than ever, seniors and their families can have confidence in a reverse mortgage, and the doors it can open for a senior financially.

Be sure to call me anytime to discuss the new changes to this program, or any other questions you may have.

Baby Boomers and Assets

The Reverse Mortgage is becoming a more popular form of financing, especially for Baby Boomers.

Today I found an article regarding Baby Boomers and the number of them going into retirement. Did you know that by the year 2030, studies by the US Census Bureau show 1-in-5 Americans will be 65 or older? This is quite a percentage of our public in retirement. There are 78.2 million baby boomers in America today.

I would think that these boomers have many concerns. One recent study I read showed that, as the baby boomers are getting older, they are finding themselves facing many issues. Health, finances, and more often, they are facing the issue of elderly parents. In my own family, my parents have taken on the responsibility of caring for my grandmother vs. her being in a nursing home or assisted living. The next challenge for them may be their own desires to retire in the next 5 years.

One other growing concern for boomers looking to retire is the amount of money needed in reserves for the lifestyle they wish to maintain. Studies show that the oldest of the Baby Boomers today are best prepared, while middle-class people now retiring face a 24% cut in their standard of living.


Have you asked yourself... "How does my retirement plan look?" With the very real possibility of living to age 90 or 100 combined with the volatility of inflation and investment returns, there is a very possible risk of outliving ones assets.


I'd encourage you to contact your financial advisor to see if your plan is stable and to visit possible future scenarios. Also know that I am a true believer that a reverse mortgage can be a great tool for you to unlock your monthly income potential by eliminating your mortgage payments. Be sure to contact me if you would like more information or a one on one evaluation of your homes potential.

Retired? What are your priorities?

Two things come to mind when I reflect on spending time with my grandparents as a child. One is that they always jumped at a chance to have my sister and I come see them. Second was that their home in the country was so well kept. The landscaping, the flowers, the pond, and all the trails in the woods were awesome.

I truely enjoyed spending time at my grandparents home.

Today I read an interesting article about the priorities of retirees'. I learned that my grandparents may not be much different than most.

A survey conducted by Thrivent Financial asked over 800 adults between the ages of 60 and 74 what they would rate their top 6 everyday activities to be.

No surprise that men rated "working in the yard" #1 (28 percent) where as women surveyed rated "Spending time with grandchildren and family members" the top of their list (36 percent).

While these two activities were in the top two for both genders, the remaining 4 activities they listed, closely mirrored one another in level of priority. These 4 remaining items were:

• Enjoying things like playing golf, shopping, and going out with friends.
• Pursuing hobbies
• Volunteering in the community
• Watching where your money goes, clipping grocery coupons, etc.

Another interesting survey result was that the average income for these retirees' ranged from $40,000 to $79,999.

If you were to list your top six past times in retirement, would you place the same importance as this survey?

To read more on this survey, the full article can be found at this link. Full Article.

If you are getting closer to retirement, and thinking of your top 6, contact me today and lets discuss your current mortage and debt positioning.