Making Ends Meet: Lifesavers Part 2

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Making Ends Meet With Reverse Mortgage Help

Reverse Mortgage To Help Pay DebtReverse mortgages offer one solution to many of today’s pressing financial issues, such as dwindling retirement funds, minimal Social Security checks (next year’s increase is just a drop in the proverbial bucket), necessary home repairs/improvements, and much more.

Grateful reverse mortgage qualifiers eagerly express how a reverse mortgage helped them make ends meet. Here’s one woman’s thank-you letter to her reverse mortgage company (Security One Lending):

“I’m writing to let you know how satisfied we are with our reverse mortgage. You know how I hesitated in the beginning. But you never pushed! You and your colleagues were so supportive. You explained over and over again so that I fully understood the process.

“We were in dire financial stress, running low on money at the end of the month, not able to save any, and you showed us a way out. Thank you so much.

“I will say Kathy (Halliday) is an invaluable assist to your company. She was a lifeline when I needed one. Everyone I met or worked with was so considerate and helpful. My! How you must have gotten tired of my phone calls! But, none of you ever left me hanging.

“Yes! We would recommend a reverse mortgage to all our friends, as long as they choose your company to handle it. It has freed up our lives and given us a better quality of life in our retiring years. Thank you for your direction and guidance.”

Reverse Mortgages Help pay Debt

The Redding Record Searchlight reported how two senior men found reverse mortgage to be the answer for their financial needs. Frank Cheatham, an 80-year-old Redding resident who owns two paid-off duplexes, opted for a reverse mortgage to help his son pay down debt. Since his son would inherit the properties someday, the reverse mortgage made use of a future bequest to solve an immediate need. Cheatham also used some of the reverse mortgage loan for home maintenance.

For 68-year-old Burney resident Rod Armstrong, a reverse mortgage became the means to supplement his Social Security and other retirement income. The retired airline pilot says he and his spouse updated their home’s carpeting, and are planning a few trips as well.

Both Cheatham and Armstrong deposited their reverse mortgage loans into accounts they can draw from as the need arises — a smart move.

October 2011 Top 100 Lenders Report

reverse mortgage news

*** HERE’S LINK TO OCTOBER REPORT DUE TO BAD LINK. ***
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Download the October Top 100 HECM Lenders Report Here

While Wells Fargo’s trailing HECM endorsements remain in the system, we are beginning to see a pattern in the top 10 HECM lenders in recent months. Even if we experience lower endorsement volume industry-wide for fiscal year 2012 the top players will most likely see tremendous gains in endorsements as market opportunities are seized upon.

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House Rich, Cash Poor?

Meeting Seniors Financial Challenges

Many people look forward to retirement as a time of leisure, when they can finally relax and do what they wish: take a trip, play golf, or embrace a lifelong passion such as music or art.

But if they’re hurting for money, none of these dreams will be easily realized. A recent study from Banker’s Life & Casualty found 14 percent of Baby Boomers have no retirement savings, while 55 percent of middle-income Boomers’ retirement accounts have balances under $100,000. The good news: many of these soon-to-be-retirees have significant equity in their homes.

The evolution of the reverse mortgage industry can serve the new Baby Boom seniors, who may be bewildered to suddenly find themselves house rich, yet cash poor.

Here are three key elements of reverse mortgages, then and now:

  • 1961: The first reverse mortgage is created by a savings and loan executive as an act of kindness, to help a struggling widow make ends meet;
  • 1989: Reverse mortgages become a federally insured program through the Housing and Community Development Act, signed into law by President Reagan;
  • 2000: HUD begins requiring third-party reverse mortgage counseling as a consumer safeguard. Shortly thereafter, telephone counseling (in addition to in-person counseling) becomes available.

Today, with reverse mortgage information available through AARP and HUD, and backed by FHA insurance, reverse mortgages are a viable way for qualified seniors to tap their home’s equity to meet living expenses in later years.

Two common concerns you may also want to address at the outset:

  • A homeowner can’t “outlive” the life of the loan. As longevity spirals upward, this has become a frequent misperception. There is no reason for a client to fear losing their home with a reverse mortgage, as long as at least one borrower remains on the property, and pays the property taxes and insurance on time.
  • The reverse mortgage never has to be repaid by the aging homeowner, unless and until the property owner decides to move or sell, or vacates the home for more than one year.

How to Build Trust Part 2: Trust and the Aging Process

The process of aging makes one more vulnerable when it comes to trust

While it’s true that people don’t change dramatically just because they grow older (see Marketing to the Mature Homeowner/Part 1), there is one area in which aging makes us more vulnerable: trust.

As people age and watch spouses, friends and family members die, the lyrics from The Cure’s tune, Trust, may express how they feel: There is no one left in the world that I can hold onto / There is really no one left at all. Lack of a support system can and does affect older adults psychologically.
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The response to these transitions can either be fear, in which seniors become less confident in people overall, or outreach, where, in their desire to connect, they misguidedly place their faith in everyone from the caller who tells them they’ve just won a sweepstakes, to the salesperson who suggests a risky investment.

Because such unscrupulous individuals and businesses often prey on older adults’ loneliness or hope, it behooves reverse mortgage professionals to understand the concerns unique to this cohort group.

To build a strong relationship with older reverse mortgage prospects:

  • Allow plenty of time to get acquainted. Regardless of whether they seem secure or anxious, many mature adults (particularly “older” seniors, 75+) love having a new audience for their stories, especially those revolving around something as precious as their lifelong home;
  • Develop a strong sense of their personal situation. Is a reverse mortgage a prudent move for them — or are they simply enjoying the regular contact visiting with you offers, even if this takes place over the phone?
  • Go slowly. In our frenetic world, it’s easy to forget that the spryest senior will likely operate at a somewhat slower pace than you do. Be willing to explain information more than once, and in different ways, until it’s clear your prospect comprehends all the specifics.
  • Reach out. Going the extra mile might be a cliché, but doing so never is. If a senior turns out to be an excellent reverse mortgage prospect in every way, yet clearly thrives under your attention, reach out: make a home visit if possible, bring a small gift, find a referral for another need they mention. These demonstrations of caring will not only help seal the deal; your kindness also boosts your client’s quality of life.

Reverse Mortgage Relationships with Seniors