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More seniors are staying in their homes due to the economy. Also, the Consumer Protection Bereau releases a combination of GFE and Truth and Lightning Disclosures.
See the new disclosures at the links below:
New Disclosures
Watch the full episode. See more Nightly Business Report.
Watch the video to learn more about the risks of health & not staying in the home with a reverse mortgage.
Senator McCaskill discusses whether or not lenders have the best interest of seniors in mind.
Home values, loan amounts, and the way seniors use home equity conversion mortgages impact the Federal Housing Administration’s potential liability for its reverse mortgage program, recent studies show.
If the Department of Housing and Urban Development had used the same home appreciation models for fiscal year 2010 as it did in prior years, there would be no need for a $798 million subsidy appropriation for the HECM program, HUD officials told the Government Accountability Office in a study mandated by Congress.
And reverse mortgages with term or tenure plans are much less likely to be assigned to the FHA than line-of-credit loans, a Federal Reserve Board economist found in her own research of the HECM program.
HUD made a number of improvements to its cash flow model in 2008, partly because of a HUD Office of the Inspector General’s audit that found material weaknesses, said the GAO in a July 30 report. That year HUD began to incorporate national house price appreciation and interest rate forecasts from IHS Global Insight, an independent source for economic and financial forecasts, the report said.
To read the rest of the story – visit Reverse Mortgage Alert
As more seniors tap into their home equity to deal with the growing uncertainties of retirement, a report released by the MetLife Mature Market Institute calls for a comprehensive approach to educate and protect seniors on how to use home equity for financial planning.
Approximately 14% of seniors are taking cash out of their house through either a home equity loan or reverse mortgage, according to “Tapping Home Equity in Retirement: The MetLife Study on the Changing Role of Home Equity and Reverse Mortgages,” released yesterday. It found 35% viewed their home as collateral for a loan.
The study, jointly conducted with the National Council on Aging, indicates that older homeowners are using home equity to increase income security, to deal with unexpected expenses, and to improve debt management, according to a news statement. It highlights options such as using a reverse mortgage for delaying Social Security collection, consolidating credit card debt, and for paying out-of-pocket home and health care expenses with the credit line option.
“Our research on baby boomers indicates that they are more open than previous generations to tapping home equity and considering reverse mortgages to help fund their retirement,” said Sandra Timmermann, director of the MetLife Mature Market Institute, in the statement. “With the right guidance and policy protection, reverse mortgages can be an important financial option for boomers who do not have adequate savings.”
The report emphasizes that consumer education must be part of any new efforts aimed at increasing the use of reverse mortgages.
“The financial services industry, policymakers, and consumer advocates cannot be complacent about the potential benefits and risks of using home equity to address the challenges facing older Americans,” said Barbara R. Stucki, director of the NCOA’s Reverse Mortgage Initiative, in the statement. “We need to work together to educate consumers, create cost-effective financial products, and promote public policies that strengthen consumer protections for older homeowners.”
To complement the study, MetLife released “The Essentials: Reverse Mortgages,” a free guide to consumers.
