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10 Reasons Why Someone Would Get a Reverse Mortgage

May 1, 2022     no comments

Unlock the value in your home with the federally-insured Home Equity Conversion Mortgage (HECM) program, designed specifically for homeowners aged 62 and older.  This non-recourse loan offers a secure way to access your home's equity without the obligation of monthly payments. While reverse mortgages may not be the perfect fit for everyone, they hold powerful benefits for certain individuals.  Here are 10 compelling reasons why a reverse mortgage could be a wise financial strategy for those who qualify. 1.  Budget breathing room/peace of mind Older adults live on... Read Full Article

This Little-Known LESA Growth Feature Is a Game Changer

April 21, 2022     2 comments

This Little-Known Reverse Mortgage Feature Could Be a Game Changer Qualifying for a reverse mortgage is tougher for some people today than it has been in the past. That’s because new underwriting standards have been developed in the past year to ensure that these loan products are safer for the borrowers who use them. As of April 27, 2015, all prospective reverse mortgage borrowers are subject to a Financial Assessment, in which a lender will analyze a loan applicant’s financial history to determine if a reverse mortgage is suitable for... Read Full Article

Warning: Avoid These 3 Reverse Mortgage Mistakes

April 20, 2022     1 comment

Reverse mortgages can be valuable retirement tools but must be used responsibly.  Like many other financial products, the effectiveness of reverse mortgages is only as good as the judgment of the borrowers who use them. For homeowners age 62 and older, a reverse mortgage can provide an additional source of cash flow to supplement retirement savings.  With a reverse mortgage, borrowers receive the lender's proceeds as their home equity. These funds are considered loan advances, not income.  Because of this, they are not subject to state or federal income tax. ... Read Full Article

How Reverse Mortgages Finally Became Safe

April 15, 2022     6 comments

The decision to take out a Home Equity Conversion Mortgage is big, and you may wonder how safe this government-insured loan program is.  While reverse mortgages aren't suitable for everyone, the HECM program has several built-in protections to keep borrowers safe. Safeguard #1 - Federal guarantee One of the program's most significant protections is that the FHA insures it.  (Federal Housing Administration).  As the borrower, you pay an upfront mortgage insurance premium when you take out a reverse mortgage, which varies depending on the loan program you choose.... Read Full Article

How to Use a Power of Attorney for a Reverse Mortgage

March 29, 2022     62 comments

I have the Durable Power of Attorney for my parents, who are age 83 and 73.  They own their home.  I am considering applying for a Reverse Mortgage for them.  What do I need to do? This is a great question, and you picked a perfect time to ask it.  It is much better to find out what you need to do with a Power of Attorney (POA) before you get started than to figure it out as you go along. HUD has some guidelines for using... Read Full Article

Here are 3 Reverse Mortgage Examples in 2024

March 22, 2022     18 comments

Is there an example of how a reverse mortgage works? We get this question all the time from borrowers, family members, and even others in the lending industry and other professional industries who don't understand the product.  Almost everyone seems to have an opinion on reverse mortgages, often based on virtually no factual knowledge. Often, people base their opinions on something they heard; some report they read from a reporter who may not have had all the information themselves, was looking to make a sensational article or was just... Read Full Article

Bank of America Reverse Mortgage Review (2024 Update)

March 22, 2022     16 comments

Back in the early 2000s, much of the volume of reverse mortgages in the U.S. was attributed to big banks, including Bank of America. Today, that landscape has changed.  Bank of America began in the reverse mortgage space with a small retail channel, before ramping up its operations through the acquisition of Seattle Mortgage reverse mortgage business in 2007. The company then grew as both a retail and wholesale lender, meaning it offered HECM loans through its retail branches and closed loans that were originated by mortgage brokers across the... Read Full Article

HUD to Require Second Appraisal on Some Reverse Mortgages

March 21, 2022     15 comments

HUD announced today that reverse mortgage lenders could not close loans to be insured under the HECM program unless they have the reverse mortgage appraisal submitted and approved by FHA in advance.  Note that this does not say until HUD does something.  It says that the loans cannot be closed unless HUD does something on the loan before it is approved or closed. This was a huge announcement.  For the first time, HUD is stepping into the origination process of the loans and requiring lenders to submit a loan or... Read Full Article

How to Use a Reverse Mortgage Repair Set-Aside

March 21, 2022     10 comments

Hello ARLO, My mom's house is in Martinsville, IN. During a healthy economy, the house was worth around $200,000. It requires some repair. Who pays for the appraisal to determine the home value? And, are there arrangements where if repairs are required as a condition of the loan approval, can proceeds from the loan be placed towards the repair? In other words, we don't have the funds readily available to make the repair. Are there steps in the process that will tell us if we really should not go forward... Read Full Article

AAG – Nations #1 Reverse Mortgage Lender Sells Loan Portfolio

January 7, 2022     6 comments

For several years I had had borrowers tell me that this was the last-ditch pitch they received from a loan originator from a well-known competitor.  When that company could not match or beat the rate and fee structure, we offered the client their reverse mortgage transaction. They argued with the borrower that they should close a loan with their company because they were not selling the servicing on their loans, even though the loans cost more in fees and, in most instances, the rates were higher. It often meant that... Read Full Article