HappySeniorHomeOwners Blog

This question is paramount in the mind of many Homeowners that have a Reverse Mortgage on their homes, as well as with their heirs, future and present. NONE of the generalized information provided here is to be construed as legal advise, I am not an attorney. You should consult with a competent attorney.

For the purpose of this post, I will refer ONLY to the US Congress created, HUD regulated, FHA Insured "Home Equity Conversion Mortgage" - H.E.C.M. Reverse Mortgage the only one available today and the most numerous one. A few years ago, there were several "proprietary" Reverse Mortgages which might have different set of terms and conditions. You should check with a competent attorney to determine which type you have.

Let's get one thing clear, the HECM Reverse Mortgage was created to help the Senior Homeowner, nobody else. Period. The Borrower owns the property, but Lender has some rights given by the mortgage. Neither the Lender nor the Government own or want the property. Period.

As a Senior with a HECM Reverse Mortgage on my home, and a Reverse Mortgage Specialist Loan Originator for over 7 years, I can vouch for the fact that it has helped many, many Seniors. For MANY it has been a blessing.

Now, lets start by saying that a HECM Reverse Mortgage is a Non-Recourse loan. In simple terms it means that the Lender (Mortgagee) CAN NOT collect one penny more than "the lesser of the balance due or the value of the home", either from the Homeowner (Borrower) in life, or from the estate. Not a penny more. Period  Lets see some samples to make it clear.

Sample 1):  Property Sold or refinanced or loan paid off.
Home Value            $300,000
Balance due:           $200,000
Remaining Equity: $100,000  This Equity belongs to Homeowner in life or to estate.

Sample 2):  Property "underwater"
Home Value  $300,000
Balance due: $350,000
Shortfall:     ($  50,000) 

The amount owed, will depend on several factors:
1) how many years ago the Reverse Mortgage done.
(2) the amount of proceeds advanced to the Borrower. (3) Plan chosen and Interest Rate of the loan.

An external factor which is the increase or decrease in value of the property does not affect the balance due. It does affects whether the balance due will be smaller or greater than the value of the home

The Homeowner paid a FHA required Mortgage Insurance Premium at closing and monthly. This MIP compensates the Lender for this shortfall once the property is foreclosed and sold, sold in a Short Sale, or "given" to the Lender In a "deed-in-lieu-of-foreclosure" arrangement and sold, 

The Lender can not, repeat CAN NOT recover this amount from the Borrower or the heirs. The heirs can choose to pay the shortfall to the Lender and keep the property.

Now, let's see what happens when the LAST Borrower passes away. By the terms of most loans whether traditional or HECM, at death the loan becomes inmediately due and payable. The Borrower no longer exists. Lenders subscribe to services which notifies them of the death of a Borrower. Heirs should notify Lender as soon as possible.

However, HUD rules generally allows for a "reasonable" amount of time in 90 days increments, not to exceed one (1) year. In other words, heirs have UP TO a year to pay off the balance due as descibed above. Heirs must show they are doing "due dilligence" to solve the problem. During that time, heirs should communicate and cooperate constantly with the Loan Servicer and seek their help and guidance. Most will try to help you. If heirs do not cooperate, Servicer does not have to wait one year to initiate the foreclosure procedures.

Please note that interest, MIP premiums, and service fees (if any) accrue until the loan is paid off in full.

I have tried to simplify the process to make it easier to understand. I sincerely hope that it is helpful. Again, this should not be construed to be legal advise. You are welcome to post your comments or questions, but please consult a competent attorney.

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).  Follow me in Facebook: http://Facebook.com/RodKohlyLO    To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Talk about doing business in China!
Just a few days ago I visited the Great Wall just outside Beijing . This had been one of my dreams for many years. Now at 71 I finally had the opportunity and took it.

Upon arriving at the Base entrance to the Wall, I observed an elderly American couple and their family. The gentleman was in a wheelchair and had a cane. I thought how brave and figured it was better to see it from the base than not at all.

Since there are close to 300 or more very steep steps to reach the Wall from that point, I inmediately knew that I was NOT going to make it to the top. Period. No way!  Being there would have to suffice for me.

Well up I went, by the 2nd rest about 60-70 steps up, that was it for me. I had to sit, catch my breath, rest and grab the stunning views. Suddenly the elderly gentleman came and sat by me. Here was 84 years old Floyd from Florida who had climbed the same number of steps, cane and all. Talk about pleasant surprise and embarrasement! He had made it as far as I did (his wife did not try). I applauded him and we sat and talked for a while. I even gave him my business card and talked about Reverse Mortgages for a while.  Maybe I could deduct my trip expenses from my taxes!

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español). 

Follow me in Facebook: http://Facebook.com/RodKohlyLO   

To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Today I met a 62+ years old Gentleman at my office who was asking for information for a Reverse Mortgage for his 80+ years old uncle and aunt.

He told me that he had gotten a Reverse Mortgage on his own home when he turned 62, but that his younger wife, had to be taken off Title. The hair in the back of my neck stood up like ...

I asked him if he realized the consequences of such an action. He said that the Loan Originator had told him (or he understood) that if he passed away his wife could stay in the Home for the rest of her life with the Reverse Mortgage. Also, that once the Wife turned 62, she could be added to his loan. Nothing could be farthest from the truth.

This matter is, in my opinion, so grave that I strongly, repeat STRONGLY, advise my borrowers in writing againt doing it, and that they should seek competent legal counsel. I request that both sign it acknowledging they understand. This is done even if the person coming off Title is not a spouse.

UNLESS, the Borrower runs the risk of loosing the home to foreclosure and the funds from the Reverse Mortgage would be enough to pay off the old mortgage. Then it could be considered.

HUD requires that if an owner is coming off Title, that owner MUST participate in the required Counseling session and advise the Counselor of the fact.

IF the Loan Originator said that, it would be in my opinion, grossly negligent. He could have said it out of ignorance or irresponsibility in an effort to make a sale. Either way…

From my own experience I have seen countless times where people hear what they want, not necessarily what is being said. Who knows what really happened.

Why is it so important?
1) Heirs have UP to 1 year to pay off the Reverse Mortgage balance due.
Read http://www.HappySeniorHomeOwners.com/AfterDeath

2) Once the Spouse turns 62 years of age, you can NOT add him or her to the current loan. You have to do a new reverse mortgage with all the closing costs, no discount. The balance due on the old Reverse Mortgage MIGHT be too high for the amount that a 62 year old Borrower might get.

If you are thinking of getting a Reverse Mortgage contact me 786-262-6486 or Rodkohly@GMail.com . If you must take an owner off Title, please also consult competent legal counsel

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español). To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Your comments will be appreciated. Post here or send them to RodKohly@GMail.com   *   For most answers call me at 786-262-6486  or visit http://RodKohlyMortgages.com   (English-Español).  Follow me in Facebook: http://Facebook.com/RodKohlyLO    To tell a friend visit  http://RodKohlyMortgages.com/tellfriend.aspx

It covers:
Annuities
Reverse Mortgages
Long-Term Care
Identity Theft
Senior Stories
Video Library
Vluable Resources

http://www.myfloridacfo.com/OnGuard

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).  Follow me in Facebook: http://Facebook.com/RodKohlyLO    To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

For Florida residents, the Department of Highway Safetyand Motor Vehicles has an EMERGENCY CONTACT INFORMATION Form: This valuable service will allow you to provide emergency contact information to law enforcement in the event of any emergency. This information may save crucial time if ever it becomes necessary to contact family members, or other loved ones. This service is only available to individuals holding a current Florida Driver License or Florida Identification Card.   https://services.flhsmv.gov/eci/

Brochure: http://www.flhsmv.gov/images/BrochurePrint.pdf 

ESPANOL

INFORMACION DE CONTACTO DE EMERGENCIA - Florida Department of Highway Safety and Motor Vehicles: Este servicio le permitirá proporcionar información de contacto de emergencia en caso de que ocurra una emergencia. Esta información puede ahorrar tiempo crucial si fuera necesario comunicarse con miembros de la familia u otros seres queridos. Este servicio sólo está disponible para las personas que tienen una licencia de conducir de la Florida o una tarjeta de identificación de la Florida vigente.
Https://services.flhsmv.gov/eci/
    haga clic en enlace de espanol
Folleto en ingles solamente: http://www.flhsmv.gov/images/BrochurePrint.pdf

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).  Follow me in Facebook: http://Facebook.com/RodKohlyLO    To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

H.A.R.P. 2 Program

"Home Affordable Refinance Program"  HARP2

The Federal Government will release in March 2012 the Guidelines by which Lenders will be able to do this new Refinance Program for Florida Property Owners who owe more than what their property is worth.

It is expected to be for a principal Residence, a 2nd Home or an Investment property.

This will be limited to Fannie Mae and Freddie Mac loans and it will be voluntary for your Lender to participate. In other words, it might not be offered to you by your Lender. You may apply with a Lender like Banking Mortgage Services Corp.

Get ahead of the crowds! The 1st required step is to determine if your loan is Fannie Mae & Freddie Mac. The 2nd step is to determine if your Loan-to-Value ratio is within certain acceptable range. I can do this research without any cost or obligation to you, and notify you as soon as HARP2 Guidelines are published.

(Florida Property Owners Only)

For the Fannie Mae and Freddie Mac Search Please Click here: http://RodKohlyMortgages.com/HARP2SearchForm

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://www.RodKohlyMortgages.com  
(English-Español). 
Follow me in Facebook: http://Facebook.com/RodKohlyLO   
To tell a friend visit  http://www.RodKohlyMortgages.com/tellfriend.aspx

SAVE YOUR CUSTOMER VALUABLE TIME. And. Your Own. As you may already know, there are no more "Condo Spot Approval" for non FHA approved condos. As of 2011 FHA has let all Condominum approvals expire. All Associations MUST reapply for the new 2 year approval. Most Associations have not reapplied or been approved yet.

If your Buyer is looking for FHA approved condos, to save your Buyer's and your own time I STRONGLY suggest you do the following BEFORE you start showing properties:
1) Click here: http://RodkohlyMortgages.com/FHACondoLookup and I will do a search for you and send you a List of HUDs FHA Approved Condos for you in up to 5  Zip Codes. (Florida Only) 
2) In your MLS condo/townhome search template, input the name of the APPROVED condos ONLY in the "Complex" (or other name) field, and save ithe search parameters with your Buyer's name.
3) Your MLS will show you ONLY the Listings in those condos. You must do this periodically as new approvals will show up in the future. Those are the ones you will show...

If you do not do this, you will be showing MANY condos that CAN NOT get FHA financing, until a long, costly, complicated application process is completed by the Association, without any guarantee of approval by FHA.

This will save your and your Buyer's time as you will show them ONLY those condos you know they can buy with FHA Financing. You should educate your Buyer to prevent them from doing wild searches in the www and making them and you waste valuable time. They will try, Oh, Buyers will try, but you are the Professional that will narrow their search and save them time and effort. Time is money! Good Luck!

We are a FHA Approved Florida Licensed Lender. http://RodKohlyMortgages.com/ConventionalFHA

Check out Miami-Dade County's 1st Time HomeBuyer Down Paymment Assistance Programs (no condos)
http://RodKohlyMortgages.com/1stTimeBuyerMDC  

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com * For most answers call me at 786-262-6486 or visit http://RodKohlyMortgages.com (English-Español). Follow me in Facebook: http://Facebook.com/RodKohlyLO To tell a friend visit http://RodKohlyMortgages.com/tellfriend.aspx

1^ST TIME HOME BUYERS

DOWN PAYMENT ASSISTANCE PROGRAMS - MIAMI-DADE COUNTY, Florida

Qualifying 1^st Time HomeBuyers are able to PURCHASE a primary residence (SFR or Townhouse) in Miami-Dade with Down Payment Assistance from Miami-Dade County, Florida. A person who has not owned a property in the last 3 years, might be considered a 1^st Time Buyer.

HAP PROGRAM	SHIP PROGRAM
Purpose: Program will provide a Zero Percent interest, forgivable loan for qualifying low to moderate income 1st Time Homebuyer households.   (changes effective 2/14/2012)	Purpose: Program will provide qualifying low to moderate income 1st Time Homebuyer households,a 2nd mortgagre with very low monthly payments (depending on income). From the 10th year on, you would pay the normal amortization at very low Fixed Annual Rate.
Up to $4,500 or $7,000 applicable to Down Payment or Closing cost. Benefit based on family size # _____ and total Household Income. $___________ Borrower must invest 1% or 3% from their own funds. Gifts and Sellers Contributions up to 6% acceptable Credit Score of 620 or higher Must qualify for the FNMA, FHA or FMAC 30 years fixed rate All Borrowers must occupy the home. Loan forgivable after living 10 years. Sales-Purchase Contract MUST have 60-90 days to close.	Up to $80,000 applicable to Down Payment or Closing cost. Benefit based on family size # _____ and total Household Income. $___________ Borrower must invest minimum of 1% own funds. Gifts and Sellers Contributions up to 6% acceptable Credit Score of 620 or higher Must qualify for FHA 30 years fixed rate. All Borrowers must occupy the home. REO/Short Sales MUST have 60-90 days to close after Bank Acceptance. Sales-Purchase Contract MUST have 60-90 days to close.
Properties: Miami-Dade only. Maximum Value $423,750, Single Family, Townhomes. FHA acceptable. Condos FHA Approved ONLY. Immediately inhabitable.	Properties: Miami-Dade only. Maximum Value $205,000, Single Family, Townhomes. FHA acceptable.  Condos FHA Approved ONLY. Immediately inhabitable.
Miami-Dade County Homeownership Assistance Program	Miami-Dade County State Housing Initiative Partnership (SHIP) Program

Note: Information subject to errors and omission and may change without prior notice. Programs subject to change and/or availability of Funds.

Request Information online: Click here

http://RodKohlyMortgages.com/1stTimeBuyerMDC

Call me for more information at 305-445-9003 ext 118 or Mobile: 786-262-6486 or email me at RodKohly@GMail.com or eFax at 786-345-0783

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).  Follow me in Facebook: http://Facebook.com/RodKohlyLO    To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx 

 Caregivers - Florida!

My motto is “I Understand You!”

It has never been so true than when I am reaching Florida Caregivers. For 7 short years I took care of my Mother until the day she passed away on January 2010 at age of 93. Her last word to me that morning were "Thank you my son"

You as Caregiver must be asking yourself many questions: (from Reverse Review Aug 2011)

1) Where will my parent(s) be safest and healthiest?
2) What do(es) my parent(s) want? Several studies indicate that they want to stay in their own home as long as possible.
3) How will we, as a family communicate and make decisions?
4) How will they or we pay for Care?

It is easy to see that a Reverse Mortgage can help with costs of aging-in-place:
1) Allows for temporary, even repeated, stays at hospitals or nursing homes (under 1 year)
2) Ease caregiver’s efforts
3) Pay Medical expenses
4) Adult day care
5) Transportation services.
6) Errand and companionship services
7) Pay for medical alert system.
8) Upgrading the home to make it safer and healthier for them. Check out the National Association of Home Builders for their new designation “Certified Aging-in-Place Specialist” (CAPS)

You should consider if a Reverse Mortgage could help your Parent(s) and the Caregiver. Call me at 786-262-6486  or email me at RodKohly@Gmail.com.

For useful Links for Caregiving services and information visit my  http://HappySeniorHomeowners.com/CareGivers

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).  Follow me in Facebook: http://Facebook.com/RodKohlyLO    To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Well, It Happened!

Last Friday, one of the Major HECM lenders, said that effective Nov 14, 2011 all new applicants for a Reverse Mortgage will have to be qualified for: Credit History and Financial capacity.

This was cleared by FHA recently in an effort to stem the growing numbers of Reverse Mortgage Borrowers that are defaulting on the payment of their property taxes and insurance, an obligation under their mortgage. This default will lead to the foreclosure of the home.

Many Seniors were taking out a Reverse Mortgage to solve the inmediate problems, but when the money ran out, they got in trouble again by not paying taxes and insurance. This new measure MIGHT "theoretically" prevent this from happening. 

Now, this is only the first Lender applying this evaluation. It is not obligatory, but all Lenders will be following their lead. It is inevitable.

Now, what are some the changes that this one MAJOR Lender will be requiring for Borrowers that apply after Nov 14, 2011. This rule does not apply to those who applied before that date.

CREDIT ASSESMENT: to determine that the Borrower has demonstrated the willingness to manage their current financial commitments.

In plain english: if they have mortgages, show NO late payments for the last 24 months, or show extenuating circumstances.  Other items may apply.

Prior to this, if you were in foreclosure a Reverse  Mortgage could be used to pay off the mortgage and you could save the home. NO LONGER. This is the most worrisome to me. I have helped many Seniors to get out of foreclosure.  Now many will lose their homes because of this.
2) alternative credit might be used: utility bills, , water, telephone, medical bills, department store credit, etc..,, extenuating circumstances, etc..

FINANCIAL ASSESMENT: to determine that the Borrower will have enough income to pay taxes and insurance in addition to living expenses. It is a complex formula that takes income, assets and investments as well as the funds to be received from the Reverse Mortgage into consideration.

To make it short and sour, I my opinion. It would eliminate the vast majority of Seniors who now badly NEED a Reverse Mortgage but do not have the income or good credit. Some will loose their homes. Many will have to continue to struggle with today's economy.

One of the MAJOR attractions of the Reverse Mortgage as we knew it, it was that your Credit or Income was NOT important. That is lost.

Again, the purpose of these changes is to allow the HECM Reverse Mortgage Program to survive this crisis. This I can understand.

The Reverse Mortgage FHA insured HECM Program IS STILL a wonderful help for many Florida Seniors. Don't write it off, don't wait any longer... 

Now, I suggest that even if you feels that you or your parents would not qualify, please inquire. I will run some numbers and get a feeling for your own particular situation. Call me today 786-262-6486 or email RodKohly@Gmail.com

Your comments will be appreciated. Post here or send them to RodKohly@Gmail.com   *   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

 Update Nov 7, 2011

Financial Planning Professionals
CPA, CFP, Estate Attorneys, Insurance Agents (Florida)

Deluge of  Foreclosures will soon happen.

Everywhere, experts are saying that the Banks have a great backlog of foreclosures pending. They will happen.

To me it is VERY sad to see Senior Home Owners that will be loosing their homes because they can not pay the monthly mortgage payments on their homes.

I do have to say, that many Seniors, could have avoided the foreclosure had they done a Reverse Mortgage when they should have done it.

Many ignored or chose to ignore the nature of the Program. "The bank takes my home", "the Government takes my home", "My children oppose it" , etc… etc…

Many asked the butcher, the plumber, the beautician, instead of asking the Reverse Mortgage professional.  Many asked attorneys, accountants and financial planners who ignored the nature of the Program or were prejudiced.

I have heard those misconceptions repeated over and over again over the years I have been doing Reverse Mortgages.

The truth is that many, with enough equity,  could have paid off their mortgage and lived payment free for the rest of their lives (as long as they live the home). When the home values wre higher it was easier to do and maybe have some money left. Today it is harder but it is still possible.

Today, we could still help many Seniors that are facing foreclosure (single family homes, townhomes and FHA approved condos) by refinancing their current mortgage. We are doing this everyday

If you know a Senior who is in danger of foreclosure ask them to call me at 786-262-6486 or visit my bi-lingual website. All they can loose is their home.

http://HappySeniorHomeOwners.com/InForeclosure

http://HappySeniorHomeOwners.com/EnForeclosure (Espanol)

Your comments will be appreciated. Post here or send them to RodKohly@Access4less.net   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Many families and counselors that once opposed having their parents do a Reverse Mortgage, are now re-considering the possibility that a Reverse Mortgage might be a solution to their quality of life.

1) now there is far more knowledge of the Reverse Mortgage and how it works. Many now know that the Senior does NOT loose the home.

2) many that were formerly helping or planning to help their parents, find themselves in difficult financial position and unable to help.

3) many thought they would be loosing their inheritance.

I am a Senior with a Reverse Mortgage on my home for several years now,

It make me very sad when persons that once refused to consider it, now call find that home values have come down so much, that now the amount that they could received from a Reverse Mortgage, is not sufficient to pay off the present regular mortgage.

Many of those persons are now even loosing their homes in foreclosure.

Not only values have gone down, but the amount a borrower can receive from a Reverse Mortgage has been reduced repeatedly by HUD. So it is a double dip in the last few years.

October 1st, 2011 is the date in which HUD wil make changes to the Program. Reductions are expected. Any borrowers that applies for and is Counseled before that date, can choose to keep the old Program if it is more convenient. Don't waste time. Call today. 7 days a week.

 
Your comments will be appreciated. Post here or send them to RodKohly@Access4less.net   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

To estimate the value of a home, the 1st step I do is check the County's "Market" or "Just" Value from the Tax Roll. Several other steps follow to get an un-official idea. The ONLY valid opinion will be an appraisal done by a Licensed authorized appraiser.

The reason I comment on this is that I have seen different changes insome of the homes I have to analyze.  The 2011 Market Values were updated just recently.

For Miami Dade County, from 2010 to 2011, I have seen properties that have decreased in Market Value from several thousands to twenty-thirty thousands of Dollars or more.

However, I saw a condo which increased $1,000 in Market Value.

While it is a insignificant increase, it indicates that you can not apply the rule that all values are decreasing or increasing across the County. Each area has to be analyzed individually

While the property "for sale"  inventory has decreased considerably, many of the sales have been for cash for foreclosures or "short sales" by investors and have not added considerably
to the average value of the neighborhood.

As the foreclosed property inventory is released by the Banks, that will continue to affect the price of homes. I believe that this will go on for a few years yet.

If you have been thinking of applying for a Reverse Mortgage, don't continue waiting for values to go up. As long as you have sufficient equity, most probably you will be able to do it.

Don't forget that today rates are so low that it increases the amount you can get. If home values start to increase, interest rates will go up and erode the amount you can get from a Reverse Mortgage.

Therefore, you can deduce that you, most probably, will NOT benefit from continuing to wait.

Also, after October 1st we are expecting HUD to decrease the amount you can get, and increase the requirements you must meet in order to get a Reverse Mortgage

Your comments will be appreciated. Post here or send them to RodKohly@Access4less.net   For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Comments by a Realtor who read my Blog and sent me an email

" Thank you for your blog – I think its very helpful for seniors who will be in a strict budget after they retire without adding mortgage payments to it. I did it in my condo a couple of years ago and could not be happier – in my case I was able to pull out all the equity out because I knew the home prices were going down – this has given me a great peace of mind.

Thanks again and good luck in your business! "

Lilly

Your comments will be appreciated. Post here or send them to RodKohly@Access4less.net. For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

 According to Reverse Mortgage Daily on august 30, 2011,

"The financial assessment, which has been discussed by Department of Housing and Urban Development officials in recent months, is now being spearheaded by an industry effort toward best practices that lenders can use to help ensure borrowers do not end up in tax and insurance default."

"A special task force has been appointed by the National Reverse Mortgage Lenders Association to review the latest draft of the industry financial assessment that would be used to assess whether borrowers can meet the tax and insurance payments on their loans. The task force, a seven-member committee of NRMLA board members, will identify data sources and help direct analysis that will aid in developing an assessment further."

Your comments will be appreciated. For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

Well, a couple of days ago it was announced by HUD the the Reverse Mortgage Maximum Loan Limit of $625,500 will be extended until December 31 2011.

This is a welcome temporary reprieve for the senior homeowner with homes valued today at more than $417,000. IT IS TEMPORARY, December 31 is just around the corner.

Still we have to see what other changes HUD comes up in October. Keep your fingers crossed

Your comments will be appreciated. For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

October is coming!!!!  October is coming!!!!

Early every October is the time in which HUD puts into effect the changes to the HECM Reverse Mortgage Program.
 
For the past few years, those changes have represented reductions on the proceeds you could get compared to the previous year and other changes (not always for the best).

For new applicants,  this year points to possible reductions of the proceeds, and/or the Maximum Loan Limit from $625,500 to a smaller amount, stricter Counseling requirements, etc...

If you already have a Reverse Mortgage, this will not affect you. But, it will affect any new applicant who applies after September 30th.

If you or someone you know, have not applied for a Reverse Mortgage yet, call me today at 786-262-6486. Everyday that goes by, the less time you or they have. 

Your comments will be appreciated. For most answers call me at 786-262-6486  or visit http://HappySeniorHomeOwners.com   (English-Español).   To tell a friend visit  http://www.happyseniorhomeowners.com/tellfriend.aspx

I am sure you have heard or read about this recently. It is true. But how can that be?

One of the conditions of all Mortgage contracts (it is a contract) is that the Borrower continue to make property tax, HO/Flood insurance and  if a condo, Maintenance fee. It is an obligation.

Some reverse mortgagors (borrowers) have used all the funds from the proceeds (advances) from their Reverse. This could happen because they spend it all, or had to pay-off a high mortgage on their home, mismanagement, abuse, etc...

When these items are not paid by the Senior, the Mortgagee (Lender) would take it out of any balance of the proceeds there is an a Line of Credit or Tenure monthly advances left. If there are no funds left, the Lender would have to advance those funds from their own money and increase the outstanding debt of the Reverse Mortgage.

However, that is not really contemplated in the contract. It is not the Lender's obligation to do so. Since home values have been decreasing, and many outstanding balances are higher than the values, neither them nor FHA are very happy. I'll explain.

FHA (Federal Housing Administration) insured the reverse mortgage. Therefore if the value of the home is lower that the outstanding balance of the mortgage, when that property is sold (as a short sale or a foreclosure), FHA would have to pay the Lender the deficiency between the proceed from the sale and the debt.

While the reverse mortgages in default are only about 5% of the total mortgages, it is not a happy situation for anybody. The numbers are growing.

To help reduce the risk of it happening with new Borrowers, HUD might be requiring that Borrowers demonstrate that they will have the means to pay for those items in the future. This most probably will be part of the new HECM Counseling and it will determine f the Senior will be issued a Counseling Certificate or not.

One solution couldl be setting aside part of the proceeds, in escrow, if available. It appears that will be done in the future. However, that might mean that not enough fund may be available to payoff the mortgage or to provide adequate monthly advances to the Senior.

The idea of a HECM Reverse Mortgage is for the Senior to stay at home. I know, I have one.
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