Our Reverse Mortgage Blog

So you are ready to downsize or make a change in homes. You have equity that you plan to use on your new purchase. You have no existing mortgage. The home you are selling is going to provide you with enough money to make an "all cash" offer. You do not want a mortgage payment anymore. Sounds great, doesn't it!

Here is an idea. Save about have of your money, use a reverse mortgage to purchase the new property. Do monthly payments going forward (you wanted that) and now you still have the rest of the money invested and making you more money to use at a later time.

This new government insured reverse purchase mortgage allows this to happen! Now you have choices! Find out what your maximum benefit would be by getting a free reverse-for-purchase analysis. Call (800) 710-9502 or go to http://www.WashingtonReverse.com and click on "reverse calculator". 

On July 19th, the State of Washington corrected a problem causing many lenders to leave Washington back on June 12, 2008.  Previously exempt mortgage bankers then had to be licensed under the Consumer Loan Act. Provisions within that Act prohibited lenders licensed under the Act to originate any mortgage that had negative amortization. Reverse mortgages operate in this manner. The result was that only FDIC banks that do not have to adhere to State laws like this one, were the only places left to get a reverse mortgage.

This has no changed. Since July 19, lenders licensed under the Consumer Loan Act will once again be able to do reverse mortgage loans. This provides increased competition and has already proven to be a winner for senior consumers. All lenders offering reverse mortgages will still originate and process your loan in the same way, using guidelines set forth by HUD. An even playing field with more choices for you.

Thanks to the State for acknowledging their error and only taking a little over 1 year to fix the problem!

On June 12th, Gov. Gregoire signed a new Bill which greatly reduced the ability of several fine lenders offering reverse mortgages to work within the State of Washington. In an effort to protect citizens from mortgage originators previously exempt from licensing under the Mortgage Brokers Practices Act since they were Mortgage Bankers, not Brokers, all those exempt had to be licensed under the Consumer Loan Act. Good intentions, but in doing so, the newly licensed companies found that State Law regarding the Act prohibited them from doing certain types of mortgages. Even though the State was made aware of this mistake, (acknowledged it as an error), they desided to take no action until sometime next year when they come back in session.

What seniors are now left with, is a couple of lenders that have banking operations in the State and a few brokers that may or may not have the best interest of seniors in mind. Those brokers offering reverse mortgages are limited further since several of the reverse mortgage lenders have decided not to get licensing under that act. A further check that I did resulted in finding that certain lenders offering the reverse mortgage product were charging the maximum allowable fees in regards to the origination fee and the monthly fee.

I would encourage all seniors to write to their various representatives, senators, and the governor and demand that the licensing be restructured in a way that allows for the lenders that were previously offering reverse mortgages to once again be allowed to offer them. It will benefit seniors in having greater loan choices. 

This past week the US Senate passed their version of an FHA reform bill allowing for changes to government loan, including the increase of loan limits in certain counties of the U.S. Since the House already had passed their version of the bill, word has it that the two will get together soon to hammer out the final version to send to the President for signing.

Lenders have anticipated that this will help many people purchase homes using FHA and seniors will benefit by having raised maximum mortgage benefits for Reverse Mortgages. Stay tuned for more information as these changes take effect. As you plan your financial future going into 2008, you should consider getting a free reverse mortgage benefit analysis to have a clear picture of what is available to you. You can start to get this by CLICKING HERE.

Many people think that a reverse is only for senior home owners that have a lot of equity in their homes and want to use it to refinance. While that is true, any senior having equity and wanting to purchase to perhaps downsize, can use a reverse mortgage to fund the purchase of a new home. Careful and thorough planning with a professional mortgage advisor specializing in reverse mortgages can provide all the details to make a smooth transaction possible.

The key on purchasing using a reverse is to find out what your maximum benefit amount is prior to the purchase and then orchestrate the transaction to only put a down payment in place that reaches the maximum benefit amount. Any left over money, can of course be invested and held for greater rate of return or used on other things.

It definitely is worth a look for anyone considering a downsize.

Since many lenders are now scurrying to find how to increase their loan production, reverse mortgages have now become a target for the loan officer wanting to make a quick buck.  Many loan magazines are now full of advertisements showcasing the reverse mortgage as the next big niche to go after in the industry.

What this means to you as a senior citizen is that you have to be careful about your choice of who you are going to deal with. While the government insured HECM loan has many guidelines and qualifications to protect the senior, many loan originators that cannot offer these loans are now pushing their own versions of reverse mortgages as they try to grab a "piece of the pie".

Check out the person you are intrusting your reverse mortgage business with. Are they an approved FHA lender? Have they been trained to do reverse mortgages? How long have they been in the industry? Do they readily answer all your questions to your satisfaction? Are they listed as reverse mortgage professionals with any organization?

Check them out. Be careful and try to use someone that you can trust.

Click here to go to our upcoming seminar page. We have started local reverse mortgage seminars at senior centers.

http://www.WashingtonReverse.com/seminars

You probably have heard about the "sub-prime" mortgage meltdown going on right now in the United States. Over the last several years, lenders have made it easier and easier to get loans. People with credit issues, unable to document income, instability in employment, and other issues have been allowed to obtain mortgages. Default rates have soared and many investors are now seeing that they should have not done these loans. Many people also got loans that had an interest rate change within 2 or 3 years that in some cases, nearly doubled their mortgage payments. Due to these loans, over 120 lenders have closed there doors since January with more to follow. New guidelines for qualifying for loans have been put in place and we are seeing the industry head back to common sense lending.

All this said, we see little impact on government insured reverse mortgages. These very stable loans continue to help seniors enjoy the freedoms of using built up equity to enhance their lifestyle while staying in their home.

If you happen to be a senior that has one of the loans currently, you would be wise to get a mortgage analysis from an experienced lender to help you plan your mortgage for the future. We would be happy to provide a free mortgage analysis for you. Just give us a call or contact us through this website.

Currently, reverse mortgages can be done on any home that has the capability of having a mortgage placed on it. This would be single family homes, condominiums, manufactured homes on land, duplexes, triplexes, and fourplexes that are owner occupied by the senior.

Many lenders may do reverse mortgages, yet some lenders will still not do lending on manufactured homes, whether on land or in a park. This brings up a point...If you have a manufactured home that sits in a mobile home park where you do not own the land, it is not classified or taxed as real estate and therefore is not eligible for the reverse mortgage.

I will enter more information into the blog if and when I find a reverse for "in-park" manufactured homes.