Reverse Mortgage News

The reverse mortgage industry has an interesting event taking place this weekend in Las Vegas. It's the Reverse Mortgage Success Expo, a convention designed to assist reverse mortgage professionals in doing better business.

The business of reverse mortgage loans is a tricky one right now. On the one hand, it's a highly competitive business in which finance professionals must work to market themselves as better than the alternatives in the market. On the other hand, attempts to keep the senior community safe from bad lending have included cracking down on aggressive marketing tactics.

The Reverse Mortgage Success Expo is likely to provide lenders with information about how to toe this line. The answer, of course, is to offer good reverse mortgage loans and to provide customers with all of the information that they need to make good choices.

Speakers at the expo will be sharing information on everything from gaining an understanding of the senior market to looking at all of the different reverse mortgage loans available these days. The professionals who attend this event will likely emerge with plans to make some changes in the way that they address their reverse mortgage business. It'll be interesting to see what those changes are.

Question of the Day: Where does a reverse mortgage expo fit into the current crackdown on aggressive reverse mortgage lending?

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We know that the main reason that seniors get a reverse mortgage loan is so they can stay in their homes despite the fact that they've lost a significant portion of their income to retirement. However, that doesn't tell us what the reason is that the reverse mortgage itself has become such a popular option across the nation. To understand that, we need to take a look at the bigger picure of the housing crisis in America.

There are many people who would have sold their homes ten years ago if they'd entered retirement at that time but who have opted now to stay in their homes using a reverse mortgage loan. That's because their home values have declined since that time. It's not easy to sell a home on the market today and the stress combined with the lower sale price makes it something that not many seniors want to undertake.

Seniors have good reasons for wanting to stay in their homes but they also have good reasons for wanting to move after retirement. There isn't just the cost to consider. The upkeep of a large home can be too much for an elderly individual. The danger of a mutli-story home increases as you get older. But these people are opting to stay in their homes now anyway because it's not worth it to try to sell them.

The reverse mortgage loan is acting as a method of resolving the impact of the housing crisis on the average senior in America today. Learn more here.

Question of the Day: What percentage of seniors do you think would sell their homes instead of getting a reverse mortgage if the market for home sales improved?

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California is a state which is facing some of the worst home foreclosures in the nation (behind only Nevada according to one set of data). This means that a whole lot of people are out of a home, a situation which one woman found herself in recently but managed to prevent through the use of the reverse mortgage loan.

This was an interesting case because the woman was facing foreclosure not only on her own home but was also in danger of losing a rental properties that she had. The rental properties had been in her family for a long time and she didn't want to lose them both for financial and nostalgic reasons. The woman originally looked into a home equity loan but she didn't qualify for it because of a change in the status of her income related to the loss of tenant income at those properties.

Ultimately, she chose the reverse mortgage loan as a means of taking out a lump sum of cash, paying off the money that she owed to lenders and fixing up the rental properties so that they could once again begin taking in income. She was happy with the decision; it's another case of the reverse mortgage working like it should.

The full story is here.

Question of the Day: Is the reverse mortgage a good loan option for people facing foreclosures of their rental properties?

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Take a look at the chart above and you can easily see that the past seven years have been marked by significant and steady growth in the reverse mortgage loan industry. There has been over a ten-fold increase in the dollar amount of reverse mortgages funded during that stretch of time. Additionally, there has been year-upon-year growth with particularly large leaps in the past two years.

Part of that growth can be attributed to the decline in the housing economy which has caused seniors to look into keeping their homes through a reverse mortgage rather than selling them for a lower value than they'd like. Part of that growth can also be attributed to more widespread awareness of the existence of reverse mortgage loans as well as more widespread availability of lenders.

Learn more here.

Question of the Day: What do you think the chart above will look like in the next three years?

If you're interested in getting information about reverse mortgage loans, you're probably going to turn to a reverse mortgage lender. Alternatively, you may turn to someone involved in senior issues (such as a local AARP representative). However, you might want to seriously consider turning to a third party option such as the financial planner.

Here are just a few of the ways that a financial planner can help you with a reverse mortgage loan:

- The financial planner provides an outside perspective on the value of the reverse mortgage loan as it applies to your personal finances. A lender may be biased by wanting to make the loan to you.

- The financial planner can help you figure out what type of reverse mortgage loan you should get, how you should take payments and what will ultimately work out best for you in the long run in terms of the details of the loan.

- The financial planner can help you to budget the reverse mortgage loan so that you can achieve the financial goals that you desire without compromising your financial stability.

- The financial planner can act as an ongoing resource if your financial situation changes in the years after taking out a reverse mortgage loan.

In other words, the financial planner plays an advisory role which assists you in making the decisions that you'll need to make about every step of getting and using a reverse mortgage loan. This can be immensely helpful to the borrower, especially considering how confusing the changing terms of reverse mortgage loans can be!

Question of the Day: What are the negatives of using a financial planner to assist you with a reverse mortgage loan?

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More and more people are looking at reverse mortgages as a good method of assisting them in keeping their homes despite the decline in the housing economy and their own shift in finances (usually caused by retirement). The reverse mortgage can be a great method of accessing the money you need in your later years while keeping your home. However, there's a stipulation to the reverse mortgage home that you need to think about seriously before you move forward with obtaining the reverse mortgage. That stipulation is that you must remain in the home in order to not owe money on the property.

There are several groups of people who will want to think about this before obtaining a reverse mortgage loan. They include:

- Anyone who was hoping to get a reverse mortgage loan to assist them in affording their additional rental properties. Although there are some success stories where this can work (when a reverse mortgage is taken on the primary residence), it's a risky way to go.

- People who will likely end up in a nursing home. Most reverse mortgage loans are based on terms which stipulate that the loan must be repaid after the owner of the home has been out of the home for twelve months. This means that you'll have only a year after moving to a nursing home to determine what to do with your home and the loan that is owed on it. This can be difficult for some families.

- People who will eventually move in with their adult children. This is due to the same reason as the nursing home issue although it is significantly less of a problem. For one thing, you can generally plan better for this situation. Moreover, there are options which include having the adult children move into your home instead of vice versa which will mitigate the problems here.

- People with multiple residences. You can only get a reverse mortgage loan on your primary residence so you'll need to work with a financial advisor to determine which loans are appropriate and which are not.

Despite these considerations, people within these groups may ultimately find that the reverse mortgage loan is the best choice for them. This is particularly true in the current housing economy. But it's certainly something to think about before signing on that loan.

Question of the Day: Which group of people is most impacted by the stipulation on the reverse mortgage loan that you must live in the home in order to get and keep the loan?

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In the recent past, many people began advising that a reverse mortgage loan could be used by savvy seniors who were in a position to invest the money and make a profit. Recently, AARP has been warning seniors that seminars committed to instructing you on how to do this type of reverse mortgage investing are risky scams that should be avoided. So what's the truth - can the reverse mortgage loan be used for investment or should you stop thinking about it as a method of getting rich quick?

The general rule of thumb to follow here is not to use the reverse mortgage loan as a method for investment unless you're already knowledgeable about the investment industry. There have been some people who are familiar with investments that are able to turn a profit using their reverse mortgage money. These are people who know how to make low-risk, high-reward investments with the cash that they are able to access. And they are people who are able to then use that cash to pay off their loan and put the rest in the bank.

Unfortunately, most people don't have that kind of savvy investment skill. The average person is taking a big risk when investing money and it makes sense not to take that risk with money that is on loan. You certainly shouldn't be doing it because someone at a seminar told you to do so. As with all financial matters, think carefully about making your choices and work with an unbiased financial planner to settle the details.

Question of the Day: Should seniors ever use the reverse mortgage loan as a method of gaining money for making investments?

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The reverse mortgage loan is considered to be one of the leading options for seniors seeking additional income today. That's because the current state of the housing economy doesn't encourage the sale of the home. Additionally, the general loan market isn't necessarily as positive right now as the reverse mortgage loan market. However, it should be noted that there are alternatives to the reverse mortgage loan that could also work in the current economy.

Three of these alternatives are:

- Deferred payment loans. These are loans available to seniors to assist them in fixing up their homes. They tend to be lower in cost than reverse mortgage loans and may suit some seniors.

- Rent out a portion of the home. It is possible for seniors to modify their homes at a low cost in order to create separate living quarters which can be rented out to gain additional income.

- Sharing a home. It's probably been a long time since you had a roommate but it might not be a bad idea. This is an ideal option for single seniors who have single friends that they might like to live with.

Learn more about these options here.

Question of the Day: Would sharing a home be a plausible alternative to the reverse mortgage loan for most people?

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In some ways, the timing of a reverse mortgage loan matters. For example, it's a requirement that you must be over a certain age (usually 62) to qualify for a reverse mortgage loan which means that starting to think about it earlier than this doesn't make a lot of sense. Additionally, changes in the housing economy and the devaluation of homes may contribute to the role of timing in getting a reverse mortgage. But timing isn't the only thing to consider when thinking about getting a reverse mortgage loan.

The reverse mortgage loan may or may not be impacted by the change in the value of the home over time. If the value of the home drops considerably, the senior may decide that a reverse mortgage isn't worth it based on the new value of the home. Alternatively, the senior may decide that obtaining a reverse mortgage to stay in the home makes more sense than selling the home in a bad market.

What is more important than timing is to look at all of the pros and cons of the reverse mortgage for the individual. What alternatives do you have to getting a reverse mortgage loan to meet your financial and housing needs? What would you do with the money from a reverse mortgage loan and is that a necessity or a luxury? These kind of considerations can be just as important (if not more so) as the timing of a reverse mortgage loan.

Question of the Day: How important to you is the timing of obtaining a reverse mortgage loan?

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The reverse home mortgage is something that has traditionally been unique to the American market. However, there are several other places throughout the world that are increasingly using the reverse mortgage to assist their growing senior population in being able to afford life after retirement. One of the leaders in international reverse mortgage loans has long been India but Canada could soon start giving that country a run for its money.

Canadian reverse mortgage loans require that the borrower be age sixty or over. The population of Canadians that falls into this category is expected to double in the next twenty five years. As it does, more and more people are going to be interested in the reverse mortgage loan as a viable option for enhancing their income stream. In planning for this, several new reverse mortgage lenders are beginning to crop up in the country.

Learn more about the Canadian reverse mortgage industry here.

Question of the Day: What other countries would you expect to have a big reverse mortgage market growth in the next twenty five years?

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An article on finances for seniors that comes out of India's Financial Express frames the idea of retirement as a sort of "second inning" for their lives. The idea is that they have done so well in the first inning of the game of life that they can relax a little and take a breather during this second inning. Unfortunately, it's increasingly common for seniors to enter this second inning in a position that requires them to continue to run at a full pace because they haven't established financial stability during the first inning of their lives.

The article points to three different simple goals that seniors are trying to achieve for this second inning of life:

- Financial security. Seniors want to know that their money isn't going to disappear day by day.

- Steady stream of income. In order to achieve financial stability, they need to have income instead of just relying on savings.

- Emergency funds to deal with medical conditions associated with aging.

The reverse home mortgage may be a way of meeting all three of these "second inning" goals.

Question of the Day: Does it make sense to frame the idea of retirement as a sort of "second inning" in life?

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The reverse mortgage loan has typically been a product that has been ignored by the senior market in Australia. However, financial planners in Australia are now recommending that the reverse mortgage loan should be given more attention by people in the country who are entering or living in their retirement years.

Of course, just like anywhere else in the world, not all financial planners agree that the reverse mortgage loan is an ideal solution. And just like anywhere else, the reverse mortgage solution tends to be highly personal. Some seniors in the country will benefit from it and others will find that there are different methods of meeting their financial needs.

However, the point remains that people in Australia may not be as aware of the potential benefits of the reverse mortgage loan as people in America. As a result, some financial planners suggest that awareness should be raised to give seniors there more options.

Learn more here.

Question of the Day: Would it be a benefit to seniors in Australia if the reverse mortgage became a more widespread option there?

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You might not have heard of Koko Taylor but she's a well-known woman in her niche. She's a blues singer who has been performing for years. She continues to play live concerts to fans despite the fact that she is pushing eighty and has failing health.

You can imagine the commitment of those fans to the singer. Because of their devotion to her, they've been saddened to find out that she is being hassled by the IRS for taxes that she reportedy owes. She is said to owe the government $400,000.

The blues business doesn't pay a lot of pennies so Koko doesn't have that kind of money. The solution that she turned to was the reverse mortgage loan. She figured that she could get home equity to pay off at least part of the IRS amount due. However, this amount would not cover the total owed so the IRS said "no deal". Koko isn't sure now what she's going to do.

Question of the Day: Does it sound like a reverse mortgage loan would be a good move for koko Taylor?

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Getting a reverse mortgage loan is only a beneficial thing if you understand both the pros and cons of this type of loan. You should always make sure that you have all of the information about a loan''s drawbacks before proceeding with the loan.

A recent Motley Fool article identified four major traps that a reverse mortgage borrower should be aware of when considering this type of loan. Those traps were:

- Limitations on the amount of money that can be obtained from a reverse mortgage loan.

- The fact that you may be better off waiting on the loan until you''re a little bit older if you''re in a position to be able to do so.

- The temptation to take out more money from the reverse mortgage loan than you actually need which damages you financially in the end.

- The fact that there are high fees associated with the reverse mortgage loan.

It''s great to look at the benefits of the reverse mortgage loan and all that they can do for you. However, you need to go into any loan relationship with open eyes. As a result, you must consider the drawbacks of the reverse mortgage before determining whether *or* not it''s the right loan for you.

Question of the Day: What are the benefits which outweigh these reverse mortgage drawbacks?

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The reverse mortgage market has been operating on the idea that the baby boomer generation is going to give an even bigger boost to the industry than has already been seen to date. That's due to the fact that this is a large generation that is just about to enter reitrement age and is typically in the position of being financially strapped for cash. However, new suggestions indicate that this trend may not be as widespread as initially thought.

The thing is that baby boomers tend to approach aging differently from their parents' generation. It is of much less importance to them that they remain in their current home upon retiring. This means that they are less inclined than their parents to seek out financial means of staying at home solely for the sake of keeping the house.

Furthermore, baby boomers are a much more active generation than their parents are. This means that more of them will travel the world without maintaining a home. It also means more of them will work part-time after retirement. As a result, there will be less need among them for the reverse mortgage loan than there is for the current generation. Of course, there are also considerably more baby boomers than current retirees so the numbers may still go up for the industry in the coming years.

Question of the Day: Do you think the average baby boomer will have an interest in reverse mortgage loans?

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As interest has grown in the reverse mortgage industry, different alternatives to the reverse mortgage have cropped up to meet the different needs of different borrowers. One of the most interesting of those has been the REX reverse mortgage.

With this type of loan, the borrower does not have to pay exorbitant fees and interest rates for the loan. Instead, the borrower gives a certain percentage of the future home sale price to the lender. In other words, you would agree to give ten percent of the future value of the home to the lender in exchange for an up front home equity loan now.

What's interesting is that there are now beginning to be alternatives to the REX reverse mortgage. This niche reverse mortgage alternative is popular enough to have spawned similar-but-different types of loans. One of those is the Equity Key Program.

The Equity Key Program is very similar to the REX reverse mortgage. However, there are some differences. The most important difference is that the Equity Key Program can be used for second homes and investment properties. Like the reverse mortgage, REX can only be used on the primary home. Additionally, REX is open to any age group whereas Equity Key targets the 65-85 year age group which is looking at reverse mortgage loans.

Question of the Day: Do you find it interesting that there are now alternatives to alternative reverse mortgage loans?

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There are many different reasons that a senior citizen may need the money from a reverse mortgage loan. Home renovations, costs of travel and an inability to afford the mortgage payments are common reasons that people seek out assistance from a reverse mortgage. But perhaps the most common reason that the reverse mortgage is needed is because of rising medical expenses.

Even those seniors who have good health insurance typically have to pay a percentage of the costs of their medical care. (One hundred percent of medical costs is rarely, if ever, covered by insurance.) As we get older, our medical costs rise and the amount that we're paying because of that percentage goes up.

This occurs, of course, in direct proportion to our income going down as a result of retirement. The reverse mortgage comes in to play because it can provide the monthly income necessary to assist the senior in paying for these ongoing medical costs while also reducing the payments the senior is making towards the home.

Question of the Day: Is the reverse mortgage a good option for paying senior medical costs?

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Many people think that the math surrounding a reverse mortgage is complex. Indeed, it can be in the sense that you need to factor in a number of numbers in order to determine how much of a loan you need and how to budget that loan. However, there's a really simple equation to consider when you're first starting to think about the pros and cons of the reverse mortgage loan.

You see, we discuss a lot of different reasons that one might need a reverse mortgage loan. However, the reasons all boil down to one core reason that people require a reverse mortgage loan: they need money. The equation that you need to consider is whether your income is more than or less than your expenses.

After retirement, many people find that there is more money going out each month than coming in. Income drops and expenses rise. If they do so in a great enough proportion, you may find that your expenses exceed your income. Basic math will tell you that this means that you're going to run out of money. If you do this simple equation and come out with a negative number then you need to look at a reverse mortgage loan.

You will certainly need to make a lot of different financial decisions related to the reverse mortgage and budgeting to use it well. A financial planner can help you with that. But you really don't need professional help to determine if your expenses exceed your income.

Question of the Day: Do you think that this simple reverse mortgage equation is enough to determine whether or not you need a reverse mortgage?

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The reverse mortgage loan is designed to be useful to seniors over the age of sixty two. Often, the reverse mortgage is taken out by couples entering retirement who are trying to figure out how to afford an active lifestyle together despite a decrease in income after leaving their jobs. However, it may be more likely than women will be more active in getting a reverse mortgage loan than their male partners will be.

There are several reasons that a woman may be more inclined to get a reverse mortgage than a man may be. These reasons include:

- Women usually live longer than men. This means they will outlive their partners and need to find a way to continue paying expenses which may even include the funeral costs for the spouse. This results in a need for emergency funding which can come from the reverse mortgage loan.

- Retiring women typically have less access to retirement income than men do. Men have traditionally been better at setting up savings accounts, 401K plans and stocks. This is changing but the current generation continues to favor the male income after retirement.

- Women may be more inclined to make plans that benefit the whole family. The reverse mortgage loan can pay for the elderly woman to live along, relieving her family of the burden of having to care for her. Whole-family thinking is more common among women than men.

Men and couples certainly take an interested in the reverse mortgage today but the elderly female may be the most likely candidate for a reverse home mortgage loan.

Question of the Day: Are women more likely to look into reverse mortgage loans than their male counterparts are?

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The business of banking is a business that relies on the health of the economy. As anyone living in America should know, the state of our economy is a little bit precarious right now. While most people are still earning a decent income and living in the homes they own, declining wealth and problems with home foreclosures are hardly unheard of. As a result, banks haev suffered a bit in recent years.

The one thing that seems to be keeping banks afloat is the reverse mortgage loan. The reverse home mortgage has grown steadily despite the fact that other home mortgages and savings options are in decline. This has allowed banks to stay in business and to keep people employed. It has even allowed some banks to hire reverse mortgage specialists in a time when many people are not finding work as easily as in the past.

Most people know that the government issued stimulus checks to people this year based on the idea that people can spend the money and generate business in their communities which helps strengthen the economy there. This points to the fact that we all need to be engaging in monetary transactions if we want the economy to thrive. The reverse home mortgage is one area where that is happening.

Question of the Day: Does the reverse home mortgage benefit the economy overall?

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It has recently been pointed out by mortgage companies that the reverse home mortgage is a terrific way for a senior to deal with overwhelming credit card debt. It's not just the fact that paying off the debt is made possible which causes this proclamation to ring with truth.

Here are some of the other reasons that seniors with credit card debt problems may find the reverse mortgage to be helpful:

- The reverse mortgage loan does not require you to have good credit so it's a unique loan option for the senior who is trying to figure out how to consolidate, pay off or otherwise deal with debt.

- Finding a responsible way to pay off credit card debt can significantly reduce the financial burden that the senior feels. This burden is caused by the fact that post-retirement income makes the idea of paying off the debt feel hopeless. Finding a solution can greatly reduce that feeling.

- The reverse mortgage may be the only solution that a fixed-income retiree has in a changing economy which makes it otherwise difficult to get loans.

- The reverse mortgage is specifically designed to meet the needs of seniors which means that it is set up to consider the fact that seniors probably have credit card debt that they can't pay off.

Credit card debt after retirement can be extremely stressful which can lead to health and emotional health problems. The reverse mortgage may be one answer.

Question of the Day: Should a reverse mortgage be used to pay off senior credit card debt?

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The reverse mortgage home loan is something which can be a really positive financial move for those seniors who are working with reputable lenders and who fully understand what they are getting in to when taking out the loan. Unfortunately, the market includes some shady lenders that are out to make a buck at the expense of seniors who don't know how to protect themselves from reverse mortgage scams. Luckily, we're a country that cares more about its elderly citizens that we often show and people are banding together to reduce the problem of reverse mortgage scams in order to improve the loan for those seniors who really need it.

There are many different people who have been working together to reduce this problem. The federal government and FBI are increasing their regulations and cracking down on predatory lenders in order to make sure that reverse mortgage scams are less possible in this country. Senior advisors from groups like AARP and mortgage lenders from reputable companies are coming together to make sure that borrowers are truly educated about the reverse mortgage loan before obtaining it. And even lawyers are helping out by advocating for those seniors who have been taken in by a scam.

One such case of a lawyer helping out someone who was swindled can be read here. In summary, the borrower faced home foreclosure due to confusion about a bad reverse mortgage loan. A concerned lawyer immediately wrote up a stay of foreclosure and helped the problem get sorted out. We need to protect each other in this way.

Question of the Day: What can you do to reduce reverse mortgage scams in America?

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