Reverse Mortgages:  An Escape Route From Foreclosure
by: Marilyn Melia

If you’re facing foreclosure, coming up with a monthly mortgage payment may seem an impossible task, especially if you’re retired with limited money coming in. The solution may be right in your own home, through the careful use of a reverse mortgage.

Unlike a regular mortgage, which requires that you repay a lender for a loan to buy a house, a reverse mortgage is a loan to you that’s secured by the value of your home. The loan is normally repaid, with interest, from the proceeds when you or your heirs sell the house.

The minimum age to qualify for a reverse mortgage is 62. But the older you are, and the greater the value of your home, the more you can borrow—which could be the key to saving your home from foreclosure.

When 66-year-old Ruby Clark of Decatur, Ga., got into financial trouble from a subprime loan, a reverse mortgage turned out to be her best rescue option.

Clark, who has lived in her three-bedroom house since 1970, remembers the evening in 2006 when her trouble started with a call from a mortgage company. “They said I could get a loan and get money back to do some of the things I had been wanting,” she said. “I was so far down in the dumps that what they said sounded really good.”

A widow with a daughter in college, Clark had been struggling to maintain her home. She agreed to borrow $121,450 in a subprime mortgage, and used some of the money for new gutters and other repairs.

…continue reading from aarp.com
 

If you are interested in more information about a Reverse Mortgage, please visit www.ctreversemortgage.com.

Congressional Funding Holds Key to Reverse Mortgage Program
San Antonio Business Journal – by Tamarind Phinisee

Reverse mortgages, also known by their formal name, Home Equity Conversion Mortgages, or HECMs, are popular with older Americans because of the financial security they offer. However, mortgage industry leaders say the HECMs could be more difficult to obtain moving forward if the insurance
fund that covers them does not receive the necessary appropriations from Congress.

Both the House and Senate appropriations committees have each approved $150 million in appropriations for fiscal year 2011 (beginning Oct. 1) for the FHA’s Mutual Mortgage Insurance Fund, which insures reverse mortgages.

However, only the House has so far voted to approve the legislation.

Legislative sources say that since this money is part of Congress’ larger overall budget for fiscal year 2011, final legislative approval for the appropriations could come as late as September.

The fund is used to repay mortgage loans if the borrowers can’t repay the loans.

Read more: Congressional funding holds key to reverse mortgage program – San Antonio Business Journal

If you need more infomation about the current state of Reverse Mortgages in the Connecticut area, visit www.ctreversemortgage.com

New Protocol: Counselors Not Able to Withhold HECM Certificate

When the US Department of Housing and Urban Development releases the new HECM counseling protocols, RMD has learned that counselors will no longer have the ability to withhold a counseling certificate if borrowers can’t demonstrate they comprehend basic reverse mortgage concepts.

It was previously reported  that as part of the new protocols, counselors would be required to ask 10 questions from a list of 20 items provided by HUD. If borrowers were unable to answer at least 5 questions correctly, they would not to be eligible to receive a certificate at that time. Counselors were required to offer additional counseling (probably a limited counseling session to address the topics missed) and until the borrower could meet the 5 question threshold, the counselor was forbidden from issuing a certificate.
 

Read more from Reverse Mortgage Daily…

If you are interested in a Reverse Mortgage and have questions, please visit www.ctreversemortgage.com.

Application Process For A Reverse Mortgage

The application process for a reverse mortgage generally takes about 30-45 days from start to finish and has five major steps. However, the longest part of the reverse mortgage process is the decision-making process that leads up to the application.

The average reverse mortgage applicant begins considering a reverse mortgage six months before completing an application. The homeowner passively researches reverse mortgages using resources such as this site for several months. They next request information from a local reverse mortgage specialist. The homeowner invests one to two months meeting with the specialist in person and reviewing the good faith estimate and other loan documents.

Step 1. Intial Application

The application legally authorizes the lender to begin the application process but the lender can not incur any costs on your behalf until Step 2 (counseling) is completed. The application is not binding and can be canceled at any point during the process. The application will specify the reverse mortgage fees, interest rates, and loan amounts.

Step 2. Reverse Mortgage Counseling

Even though the application has been completed, the lender is not legally permitted to incur any costs on the applicant’s behalf (such as ordering the appraisal) until the applicant has submitted a signed HECM Counseling Certificate. This is proof that the appliant has completed the mandatory counseling session with a HUD-approved counseling agency. The counseling can be completed before or after the initial application in most states.

Step 3. Appraisal

The appraisal establishes the legal value of the applicant’s property. The reverse mortgage appraisal is a special one — it must be conducted by an FHA-approved appraiser (not all appraisers have this approval) and it must follow a specific FHA format. This means that even if a homeowner has already has an appraisal, it will most likely have to be re-appraised.

Step 4. Underwriting

The lender will confirm the applicant’s legal ownership of the property by conducting a title search and purchasing title insurance. They will also work with the applicant to clear up any issues with trusts, unpaid liens against the title, bankruptcies, etc. Once the lender has finished underwriting, the application’s status will be changed to “clear to close” status. This means that everything has been completed and the final closing date can be set.

Step 5. Closing

The lender and the applicant set a closing date when a notary or attorney meets with the applicant to sign the final closing documents. This is the applicant’s opportunity to review the closing documents to make sure that the interest rate, fees, and loan amounts are the expected amounts. Once signed, the application goes into a three-day ”right of recission” period. This means that even though the closing has taken place, the applicant can still cancel the application with no penalty for three business days after the closing.

Immediately after this waiting period, the title company will issue a check to the homeowner (typically by overnight mail). If the applicant was using a reverse mortgage to pay off an existing mortgage, the title company will also send the mortgage payoff amount to the bank.

Source 

If you are interested in a Reverse Mortgage, please visit www.ctreversemortgage.com or call 203-439-9400 Ext 421.

Pumping Up Your Reverse Mortgage

New ‘jumbos’ are giving retirees the cash they need to stay in their houses

From the living room of her Huntington Beach home, Jean Ingram enjoys sweeping views of pristine California wetlands and, off in the distance, Catalina Island. She and her late husband paid $135,000 for the 2,200-square-foot Tudor-style home in 1978, and it’s now valued at about $1.2 million. Yet until late last year, the 69-year-old widow, awash in home equity but light on monthly income, feared she would have to sell.

Ingram was able to hold on to the house by taking out a jumbo reverse mortgage on the property–"jumbo" because the amount was $388,000, and conventional reverse mortgages would not offer as much on a $1.2 million home. Either way, these financial deals allow homeowners 62 and older to take the equity out of their houses without having to make monthly payments to the bank.

Read more…

For more information about how CT Reverse Mortgage can enhance your retirement, visit www.ctreversemortgage.com.

Eligibility Requirements

In general, to qualify for a reverse mortgage the youngest homeowner must be 62 years old or older and have sufficient home equity (about forty percent).

Determining whether or not there is sufficient equity in the home is an FHA calculation that takes into account:

    * Current interest rate
    * Whether the rate will be variable or fixed
    * Age of the youngest homeowner
    * Location of the property

You can use the online reverse mortgage calculator to find out if you have sufficient equity and what the loan principal limit would be.

Things that do not affect eligibility for a reverse mortgage:

    * Income
    * Credit history
    * Discharged bankruptcy
    * Health of the homeowners

Frequently asked questions:

    * If a homeowner is not 62 but they are permanent disability, can they qualify?
          o No. The FHA only looks at age to determine reverse mortgage eligibility and makes no exceptions for disability or Social Security status.
   

* Can someone qualify if they have a mortgage?
          o Yes. More than half of people who take out a reverse mortgage use it to pay off their existing mortgage so they can stop making monthly payments.
   

* Do all 62-year olds who own their home qualify?
          o No. About one third of homeowners who want to get a reverse mortgage are not eligible because they don’t have enough equity built up in their home. The younger the homeowner is, the more equity they need to have to qualify.
   

* What happens if there isn’t enough home equity to qualify?
          o This is called a “shortfall.” This means that the reverse mortgage would not provide enough money to pay off the existing mortgage on the home — it is coming up “short.” In this situation, some homeowners chose to make up the difference by paying down the balance on their mortgage by the amount of the shortfall so that they can qualify for the reverse mortgage. However, most people who want a reverse mortgage and have a shortfall don’t have enough money to do this.

Source

If you are thinking about a Reverse Mortgage, visit us at www.ctreversemortgage.com for more information.

Do You Have Enough to Retire?

Do the Math.

Just how much are you going to need in order to retire comfortably?

It may be the biggest financial question in your life. With 80 million baby boomers now heading into the flight path for retirement, it’s a pressing one, too.Yet a horrifying number of people have never even asked it — and may not know how to find answers.

Earlier this month, a survey from the Employee Benefit Research Institute, a leading nonprofit in the retirement field, found that fewer than half of workers, 46%, had tried to calculate how much they would need for a comfortable retirement.

Read more…

Visit www.ctreversemortgage.com for information about how a Reverse Mortgage can help you in Connecticut.

Would a Reverse Mortgage Affect My Taxes?

While real estate remains in the doldrums, many older individuals own homes that are still worth plenty. Some of these folks may be “house rich” but “cash poor.” Taking out a reverse mortgage could solve that problem, but what are the tax implications? Good question. Before answering, let’s cover the basics on how reverse mortgages work.

Reverse Mortgage Basics

When you take out a regular home loan, you have to make monthly principal and interest payments to the lender. With a reverse mortgage, the lender makes one or more payments to you, the borrower. No payments to the lender are required until a triggering event occurs — such as when the homeowner dies or moves out. Meanwhile, the accrued interest builds up, and the loan balance gets larger rather than smaller. That’s why it’s called a reverse mortgage!

Read more: Would a Reverse Mortgage Affect My Taxes?

For more information about a Reverse Mortgage in Connecticut, visit www.ctreversemortgage.com.

New Scam Targets Elderly Homeowners with Reverse Mortgages

Just in the last two months we have received calls from two former borrowers who had been targeted for a new scam. It seems that there is a new way to try to separate borrowers from their money and at this time we don’t know if it is aimed specifically at Reverse Mortgage borrowers or all borrowers, but since the borrowers calling us are all homeowners 62 and over, we know they are targeting senior borrowers for certain.
 

Read more here

For more information please visit www.ctreversemortgage.com.

Reverse Mortgage Explained – How does a Reverse Mortgage Work?

You may be thinking about getting extra cash from the home you own as a way to supplement your monthly living expenses. This article will explain how a reverse mortgage loans work and how to find the best quotes by these kinds of providers. Another name for these type of loans are called reverse annuity mortgages.

How Does a Reverse Mortgage Work?
Here is simple way a reverse mortgage is explained. If you are over the age of 62 years and are looking for some extra monthly cash, and you own your home you live in, you can convert part of the equity of your home into cash without selling your home or paying another new monthly bill. You don’t have to pay back the money your receive, unless you move out of your home, sell your home, or if you die. At that time, you are required to repay the reverse mortgage loan during those instances. In most cases the reverse mortgage income is tax-free and there usually isn’t any income restrictions.

What are the Best Reverse Mortgage Loans?

Read more…

For more information about how CTReverse Mortgage can help you, visit www.ctreversemortgage.com.