In the midst of such a crisis it is unfortunate that many financial advisors ignore the largest asset that could be used to fill the gap: the home. “Many households have a little-recognized asset that they could turn to for income in retirement- the equity in their home”, said Alicia Munnell, director of the Center for Retirement Research at Boston College.
Continue readingComing to a State Near You
Coming to a state near you. California, Illinois, Utah and Minnesota. What do these states have in common? Mandatory cooling off periods for reverse mortgage loans.
Continue readingNot in America
According to a recent article in the Daily Reckoning, Australia is facing a demographic bomb of sorts not unlike the U.S. with more than half of Australians projected to be age 50 or older by 2050. Today the Australian government spends $42 billion on the cost of aged care which is expected to balloon to $160 billion by mid century. Mathematically astonishing, economically unfeasible.
Continue readingFinancial Assessment Confusion
Which came first, the chicken or the egg? That rhetorical question came to mind when hearing various reports of loan officers who found some confusion surrounding the gathering of a prospect’s financial data prior to HUD counseling. Once such loan professional is…
Continue readingAssessment the Final Ripple from Housing Crash
Today marks the beginning of a new era for the Home Equity Conversion Mortgage: the Financial Assessment. As you watch today’s episode you are faced with an entirely new set of guidelines to qualify prospective reverse mortgage borrowers…
Continue readingHassle Free Loan?
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A Hassle-Free HECM or Long Term Success?
Last week the Washington Post published an article entitled “Window is rapidly closing to get hassle-free reverse mortgage”. It is a well-written article outlining the change the financial assessment brings but more importantly it outlines the HECM program’s history which lead to such a monumental overhaul of the program. “Interested in a reverse mortgage without a lot of hassles? Better get your application in fast. As of April 27, the federal government is imposing a series of extensive “financial assessment’ test that will make applying for a reverse mortgage tougher- much like applying for a standard home mortgage.”
Indeed the Home Equity Conversion Mortgage has moved from being based merely on age and equity to a fully-underwritten loan, all in the effort to reduce risks for both lenders and FHA. For a quarter century…
Download a transcript of this episode here.
Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.
An Open Dialog?
If there is one analogy I wish I could tell every financial professional it would be this: If you were a doctor and knew your patient would die in 10 years and didn’t tell them about a treatment that would prolong their life or possibly cure them would that be malpractice? I hope the answer would be a resounding yes!
Continue readingBipartisan Commission Open to HECMs
Recently a bipartisan commission was launched creating a task force to tackle the critical challenges of aging this year. The good news: the commission is positive about the role reverse mortgages play in the planning process.
Continue readingHECM Servicing Headaches
Fend for Themselves: The Industry Leader Update from Reverse Focus on Vimeo.
CFPB Report Exposes Substantial Frustrations Between HECM Borrowers and Some Loan Servicers
In the last year I have personally spoke with several reverse mortgage originators who are perplexed and frustrated with their past borrower’s experiences in dealing with some reverse mortgage servicers. Let me first say we are fortunate to have some excellent servicers in our space, but there are some major flaws with some as evidenced by a recent statement from the Consumer Financial Protection Bureau and in their recent report.
Personally I had a past borrower call me very upset after the servicer told him the reason his principal limit (or line of credit) decreased in a given month because it was linked to his most recent home value. With that in mind it is not surprising the Bureau states that some HECM servicers are contributing to ‘rampant’ consumer confusion about the loan. Stacy Canna, deputy director of the CFPB Office for Older Americans said at the American Society on Aging’s annual conference, “We heard from many consumers how complained about lack of response. They wrote letters, they called, they asked for callbacks and received either delayed responses or no responses.”
For some perspective, of the 1,200 HECM specific complaints received, 32 % or a total of 384 were servicer-related complaints between December 2011 though December 2014. In reviewing the report it would appear that…
Download a transcript of this episode here.
Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.
State of Readiness
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The Senate Special Committee on Aging Examines American Retirement Preparedness
With the obvious retirement crisis looming over both retirees and the U.S. government the Special Senate Committee on Aging received input from acamdics, researchers and retirement experts covering topics ranging from retirement savings accounts to reverse mortgages. The hearing was entitled “Bridging the Gap: How Prepared are Americans for Retirement?”.
The goal was to uncover potential solutions in the face of an increasing baby boomer segment reaching retirement while officials struggle to strengthen Social Security and other programs. In written testimony to the Senate members Alicia Munnell who heads the Boston College Center for Retirement Research wrote, “Many households have a little-recognized asset that they could turn to for income in retirement, the equity in their home. Generally, retirees think of their home equity more as an emergency reserve than a potential source of retirement income. However, given the challenge of ensuring retirement security, this view may be a luxury that many can no longer afford”.
Perhaps the government should reexamine the luxury of allowing American retirees to keep their home equity while receiving…
Download a transcript of this episode here.
Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.
