Reverse Mortgage Blog Information on HUD, FHA, HECM Reverses for Seniors

Do you need your investments to perform better or a reverse mortgage?

American Pacific Mortgage - Reverse Mortgages — Sun, 27 May 2012 12:22:54 -0700

Do you need your investments to perform better or a reverse mortgage?

A recent article in the Wall Street Journal tells us it doesn’t matter if your investments perform well…. most retirees don’t have enough savings to matter. Author Tom Lauricella goes on to say that home equity is still most people’s largest asset and with the help of a reverse mortgage it can make up for their shortfall in investments.

Read the full article: Savings Fall Short for Most Retirees

There are various strategies in utilizing home equity with reverse mortgages to supplement retirement income. One is to take social security at a later age to increase the payment and use home equity funds from the reverse mortgage for financial support until social security kicks in. Or take social security starting at age 62 or 65 and take out a reverse mortgage line of credit with a growth feature. As expenses increase in the future, take advantage of the increased line of credit.

To find out how much you can receive from a reverse mortgage click here

Or call Maggie O'Connell directly at 800-684-9438

Banks Exit Reverse Mortgages: Financial Freedom, BofA, Wells...now Met

American Pacific Mortgage - Reverse Mortgages — Sun, 20 May 2012 10:25:33 -0700

What’s Going on with Reverse Mortgages?

Financial Freedom/Indy Mac, Bank of America, Wells Fargo… now Met Life … Why have all these large companies who offered reverse mortgages, stepped away from this helpful loan for seniors?

The reason Met Life provided was “uncertain marketplace and regulatory environment,”. The big banks didn’t want to devote the resources to comply with the new and complicated laws, particularly at a time when they require a greater focus to their core banking or insurance business than ever before. To read more about Met Life’s departure from reverse mortgages, read: MetLife Exits Reverse Originations, Selling Portfolio to Nationstar

The departure of these companies creates a new landscape in the origination of reverse mortgages. These large companies were great at placing reverse mortgage originators at a local level and encouraging face to face meetings with their clients. These ‘knee to knee’ meetings helped both the originator understand the senior and their needs and helped the senior better understand how the reverse mortgage can work for them so they could make well educated decisions. This has been the core of reverse mortgage origination since the first reverse mortgage was offered over 20 years ago. The trends for the new largest reverse mortgage companies are shifting to a call center approach which may work for some types of clients. But prospective reverse mortgage borrowers will still be able to find originators who focus on the personal customer service necessary to establish trust at a time when trust is the most important quality in a reverse mortgage loan originator. You just need to know where to look! www.ReverseMortgageStore.com

Maggie O’Connell specializes in Reverse Mortgages at American Pacific Mortgage in California and Nevada, call Maggie at 800-684-9438, Maggie@rmstore.net Cal DRE# 01151456 #01215943 NV #45747 #164 NMLS #279499 #1850 Read Maggie’s verified 5 star customer reviews.

Equal Housing Lender

Have You Prepared Your Power of Attorney Document?

American Pacific Mortgage - Reverse Mortgages — Fri, 18 May 2012 06:38:04 -0700

Have You Prepared Your Power of Attorney Document?

It's very important to have in place, a Durable General Power of Attorney for financial transactions in the event you become incapacitated. Many families are now assisting their aging parents in finding ways to pay for in-home care. A natural place to look for the money to pay for home care is home equity. An excellent tool to tap into that equity is a reverse mortgage. But if the aging parent is not of sound mind and cannot make financial decisions on their own, a previously executed power of attorney will allow a trusted person to make decisions on their behalf and contract for them on the reverse mortgage, completing the counseling, signing the reverse mortgage application and final loan documents.

When using a power of attorney document in the reverse mortgage transaction, one must present a current doctor's letter stating something to the affect that the elderly homeowner is unable to make decisions for him or herself, and the doctor must also state the date or time period the incapacity took place. This is to assure the person was competent at the time he or she executed the power of attorney document. Often, the POA is used in conjunction with a living trust. You should also renew the POA every few years. Be sure to save the original notarized copy of power of attorney document as it must be recorded at the completion of the reverse mortgage transaction.

Maggie O’Connell specializes in reverse mortgages at American Pacific Mortgage in California and Nevada, call Maggie at 800-684-9438, Maggie@rmstore.net Cal DRE# 01151456 #01215943 NV #45747 #164 NMLS #279499 #1850

How to Structure Public Assistance (Medicaid, Medi-Cal and SSI) with Reverse Mortgages

American Pacific Mortgage - Reverse Mortgages — Tue, 10 Apr 2012 05:45:21 -0700

If you are looking into supplementing your retirement income through a reverse mortgage and you are on Medicaid (Medi-cal) or Supplemental Security Income (SSI) or want to maintain eligibility for these programs in the future, it is important to understand these service’s asset limitations. The reverse mortgage must be structured properly so you can receive the benefits of these need’s based programs and at the same time, receive the benefits of the reverse mortgage.

Reverse Mortgage proceeds can be received in various ways, through a lump sum, line of credit, monthly payment or a combination. Since the reverse mortgage is a loan and not income, the proceeds do not affect eligibility for these programs. Where you need to be careful is holding the reverse mortgage proceeds in your bank account. If you draw from reverse mortgage funds and put it in your bank account, it then is considered your asset which has strict limitation on these needs based programs.

In California and Nevada in 2011, asset limits for Medicaid and SSI benefits were $2,000 for an individual and $3,000 for a couple. So if you took a lump sum draw and put it in the bank, you would be ineligible for public assistance benefits. Social security currently does not have asset limits and is not affected by the amount of assets in you bank account.

Let’s look at other ways of taking the reverse mortgage proceeds. With a reverse mortgage line of credit, you take draws as needed. By spending the money and not keeping it in the bank, you would not affect your eligibility. The same holds true for monthly payment draws. If you draw money that will be spent and not put in reserve, you will not be going over your maximum asset requirement.

A reverse mortgage is great for increasing cash flow, but it is very important to make informed decisions about how you want to receive the loan proceeds. Look into your state’s requirements and determine how a reverse mortgage can affect your eligibility before deciding on the right payment plan for you.

I'll be happy to calculate how the reverse mortgage can be structured to best provide for your needs.

American Pacific Mortgage Awared #31 Top Mortgage Company in America

American Pacific Mortgage - Reverse Mortgages — Sun, 01 Apr 2012 15:22:47 -0700

I’m proud to work for a top mortgage company in the USA! We were recently awarded #31 by Mortgage Executive Magazine among the top 100 Mortgage Lenders.

Click here to view the full list: top 100 lenders

Free FHA HECM Reverse Mortgage Counseling now available! HUD approved counselors.

American Pacific Mortgage - Reverse Mortgages — Fri, 30 Mar 2012 14:47:05 -0700

Now is the time to get HUD Reverse Mortgage counseling for HECM loans for seniors. Maybe you don't know if you want a reverse mortgage or not and you're hesitant to contact a reverse mortgage lender. That's okay! You can now get reverse mortgage counseling at no cost because of HUD grants for reverse mortgage counseling. I am a reverse mortgage loan originator and I can help you find a counselor by providing you with a free list and the NCOA booklet, 'Use Your Home To Stay at Home', the California disclosure and the document, 'Preparing for Your Counseling Session'. You also need the 3 page calculation sheets that includes the reverse mortgage comparison, amortization schedule and TALC disclosure. With all this information you will be ready to schedule your free counseling session. If your home is in California or Nevada I can help you! Complete the form below and I'll get the counseling information to you. I'll need your date of birth, home value and mortgage balance to run the calculations, so give me a call if you want the calculation sheets.

Fill out my online form.

How Does The Reverse Mortgage Line of Credit Grow?

American Pacific Mortgage - Reverse Mortgages — Sat, 24 Mar 2012 17:35:19 -0700

The reverse mortgage line of credit is a wonderful thing. It won’t be taken away from you if your value drops (like conventional HELOCs). You’re not charged interest on the money until you take draws. And a really great feature is the amount available in your reverse mortgage credit line increases over time.

The rate of the increase is the same as the interest rate plus ongoing mortgage insurance premium (mip) charged on your loan balance. The only rate option for a line of credit is the variable rate option. The growth in the line of credit varies depending on the movement of the index of your reverse mortgage.

Typical indexes are the one month LIBOR or one year treasury bill. The rate and mip is viewed as an annual figure, for example, the rate may be 3% plus mip of 1.25% or 4.25%. So to calculate an estimate of the line of credit increase in a year, take the net principal limit (or available creditline) and multiply by 4.25%. For a $100,000 credit line would increase by approximately $4,250 that year. Keep in mind, compounding is taking place which helps the growth. As you draw down your line of credit, the available funds become smaller and the growth is less because it is based on that lower amount.

Reverse mortgage amortization schedules help you view the potential growth. They also show the potential increase in the loan balance or amount you will owe. The standard amortization schedule provided with FHA – HUD Comparison Sheets are based on an ‘expected rate’. We don’t know what your rate will be in the future because of the variable rate feature, so by using the expected rate you will hopefully get an idea of future balances on your reverse mortgage.

The reverse mortgage credit line is a way to maximize your reverse mortgage funds while minimizing your reverse mortgage loan balance. A win-win!

Reverse Mortgage Description, How They Work, Who Qualifies and the Plain Facts

American Pacific Mortgage - Reverse Mortgages — Thu, 22 Mar 2012 19:55:59 -0700

This booklet provides a simple way to learn about reverse mortgages. Enjoy!

Who to Choose For Your Reverse Mortgage Lender

American Pacific Mortgage - Reverse Mortgages — Sat, 17 Mar 2012 17:35:45 -0700

This short video set on a snowy day describes who Maggie O'Connell is and how she helps senior homeowner's understand reverse mortgages and go through the reverse mortgage loan process..

Can you get a reverse mortgage when your home is paid off?

American Pacific Mortgage - Reverse Mortgages — Sun, 04 Mar 2012 21:53:22 -0800

This is a question I am asked on occasion and it catches me by surprise every time because it seems to be such a basic part of reverse mortgages. That is, tapping equity to use in retirement. But it reminds me also that reverse mortgages remain a mystery to some.

A reverse mortgage is wonderful for people who don’t have an existing mortgage. Since you don’t have a mortgage to pay off, there are more available funds to you in a line of credit or monthly tenure or term

payments.

Remember, a reverse mortgage is structured like a regular mortgage in that you are borrowing money and promising to pay it back. Instead of paying your loan back every month, like conventional HELOC’s or fully amortizing mortgages that require you to make monthly payments, you delay the final payment until one of the maturity events.

When you sign up for a reverse mortgage, you agree to pay the entire balance at a later time, when you move away from the home permanently, sell the home or the last borrower passes away or any one maturity event takes place. Upfront fees, interest and mortgage insurance charges are added to the reverse mortgage loan balance.

The HECM reverse mortgage is insured through the FHA or Federal Housing Administration, a department of HUD. If your home value ends up lower than your mortgage balance, (upside down reverse mortgage) you or your heirs are not responsible for the difference. Your home alone stands for the debt. The FHA insured HECM

reverse mortgage is considered a non-recourse loan.

When the reverse mortgage loan becomes due as a result of reaching one of the maturity events, the reverse mortgage servicing department will allow time for the loan balance to be paid through the sale of the home or other means.

The reverse mortgage provides many different solutions for many seniors. The tax free aspect of a reverse mortgage makes it a valuable tool for people who are trying to stretch their assets as far as they can. It allows older homeowners to tap into their home equity to provide for themselves during retirement.

Maggie O'Connell

Reverse Mortgage Specialist

800-489-0986

Do You Qualify For A Reverse Mortgage?

American Pacific Mortgage - Reverse Mortgages — Sun, 04 Mar 2012 20:57:09 -0800

Do You Qualify For A Reverse Mortgage?

The first qualifier is age, all borrowers must be at least 62 years old. Older borrower’s get more money than younger because it is expected they will hold the loan for a shorter period of time.

If you have a mortgage, we must look at the principal balance of your existing mortgage in relation to your home value. With reverse mortgages, we don’t have clear loan to value (LTV) ratios like forward or conventional mortgages.

We calculate the LTV based on the youngest homeowner’s age, expected interest rate and home value. So we just need to run your information in a reverse mortgage calculator to determine how much is available to you. You will find reverse mortgage calculators on the web but requesting a customized calculation will assure the rate and term option that works best for you and a more accurate estimate.

If your current mortgage balance is within the lending limits of the reverse mortgage, it will be paid off. You no longer have mortgage payments to make! Remaining funds can go to you in a direct payment of cash or in a line of credit or monthly payments to you.

If you don’t have an existing mortgage, even better! All of the available reverse mortgage proceeds are available to you in the line of credit, cash or a regular monthly stipend.

When the last remaining homeowner leaves the home permanently, the loan will become due as a maturity event has taken place.

CLICK HERE to sign up for reverse mortgage updates or send a note to Maggie.

When A Reverse Mortgage Becomes Due, How Long Do Heirs Have to Repay?

American Pacific Mortgage - Reverse Mortgages — Sun, 04 Mar 2012 12:05:47 -0800

When A Reverse Mortgage Becomes Due, How Long Do Heirs Have to Repay?

The Reverse Mortgage Deed of Trust states the reverse mortgage is due immediately upon the death of the last borrower (or sale of home or permanently moving away). If you take the word, 'immediately' literally, it seems time is no time for clearing out the property, getting the home ready for sale and going through the sale or refinance process. So you need to know what‘immediately’ really means. How long do the heirs have to pay off the reverse mortgage? I talked with the major reverse mortgage servicing lenders and they told me they follow Hud’s guidelines, so let’s look at the HUD guidelines for answers. In the HUD Handbook 4330.1 13-34, it details the lender’s requirements in getting the mortgage paid and settled.

If the mortgagor or the mortgagor's estate fails to

repay the outstanding balance on a due and payable mortgage or if

the mortgagor fails to deed the property to the mortgagee within

the prescribed time, the mortgagee must begin foreclosure

proceedings within 3 months. The Field Office may authorize the

mortgagee to delay the beginning of foreclosure proceedings

longer than 3 months if a sale by the mortgagor or the estate is

in process. If the estate is making a reasonable effort to sell

the property, these extensions should be granted in 3-month

intervals with the entire period not to exceed 12 months.

Each lender servicing agent will have a slightly different policy or timeline, so it is important that you talk with the servicing department early and often during the process.

Please understand, if you or your estate are making a diligent effort to get the home sold or refinanced and you are communicating with the servicing agent frequently and requesting extensions if needed, you will find a very reasonable time frame to get the reverse mortgage paid off and settled.

Questions To Ask To Help Select the Best Reverse Mortgage Option For You.

American Pacific Mortgage - Reverse Mortgages — Sun, 26 Feb 2012 14:15:47 -0800

Questions To Ask To Help Select the Best Reverse Mortgage Option For You.

To help determine the best option for you, ask yourself the following questions:

Is a large part of the available funds being used to pay off a mortgage or debt?

Will you be living in your home beyond 5-7 years?

Is a fixed rate more appealing to you over a variable or adjustable rate? Will you sleep better at night knowing your interest rate is fixed?

If the answer is yes to some or all of these questions, you may be inclined to prefer the fixed rate option which requires a lump sum draw of cash at the closing of the reverse mortgage. If you are satisfied with a reduced amount, you may opt for the ‘saver’ option to keep up front costs low. Many of the fixed rate options carry no loan origination fee also keeping costs down.

Or, are you looking for a way to afford to stay in your home, need to supplement your income and want to access money over time?

Do you have a small mortgage and debt, or no mortgage at all?

A line of credit or monthly payment tenure option may be best for you. If you can settle for a lower line of credit, the saver plan will definitely save you in upfront costs (that accumulate interest and are paid when you leave your home permanently). And if you want a monthly payment, be sure to request printouts for the variable rate saver option. The payment to you is typically not a lot less than the standard option.

Only the variable rate option will provide for a line of credit or monthly payment to you.

The factors involved in your decision to get a fixed or variable rate are different for reverse mortgages than they are for conventional mortgages. Since you don’t have to make payments, a variable rate doesn’t carry the risk for not being able to afford a payment if rates go up dramatically. It will have an impact in the amount that will be paid back in the end and may affect the remaining equity at that time. But if you don’t need the lump sum, taking it all at once will accumulate interest at a faster rate from day one. I’m not trying to convince anyone to choose one rate option over the other, I am only pointing out differences between the options and trying to help you explore the best option for you.

Sometimes I witness people influenced by family members or professionals who recommend the fixed rate without understanding these details between the two options. I advocate education and exploration because this is the second most important decision to make regarding your reverse mortgage. Getting opinions of others is important, but more important is to read and learn and put together the pieces of the puzzle yourself. The first important decision, of course, is deciding to get a reverse mortgage in the first place.

Just Because You’re Old Doesn’t Mean People Can Tell You What To Do!

American Pacific Mortgage - Reverse Mortgages — Sat, 18 Feb 2012 17:37:15 -0800

Just Because You’re Old Doesn’t Mean People Can Tell You What To Do!

This article caught my attention. Son tried to evict 98 year old mother from home The son of a 98 year old woman tries to evict his own mother from her home She had signed the home over to him years earlier. And he’s not a compassionate person obviously. But she doesn’t want to leave her home. Most seniors I meet have an adamant desire to remain in their home until they ‘go out feet first’ as many say. The first lesson we can learn is, don’t sign your house over to your children. Revocable Living Trusts are the best instrument to retain title and control and avoid costly probate.

The elderly mother could have done a reverse mortgage to pay someone to care for her and the money from the reverse mortgage could have been used to modify her home and make is safe and comfortable for an elderly person. Of course, not everyone has a son who would force his mother out of HER home. But seniors should take control of their assets and have a full estate planning package done including power of attorney, health care directive or living will and the revocable living trust and record the property in the name of the trust.

I have witnessed clients who had to get costly conservatorships because they did not complete a simple power of attorney document . It’s also not a bad idea to have a capacity test done to make it very clear that you are not incapacitated at the time the power of attorney was executed to assure It will be acceptable at the time it is activated.

The woman stood her ground, went to court and was awarded the right to stay in her home. Good for her! I see far too many people who do what their children say even if it is against their own wishes and desires. Just because you are old doesn’t mean you can’t make decisions on how you live your life. So make it clear in a legal document in advance and hopefully you’ll get what you wish for!

What Is The Best Reverse Mortgage Option For You, Fixed or Adjustable Rate, Lump Sum or Credit Line?

American Pacific Mortgage - Reverse Mortgages — Thu, 26 Jan 2012 18:13:55 -0800

The most common and important discussion I have with my clients is regarding the payment plan and interest rate option. Someone I’ve been talking with over the past 2 years announced she was ready to do the reverse mortgage and wants the most money she can get. She stated very emphatically that she wanted the fixed rate with a lump sum draw. So I suggested we talk further and I started asking questions.

How long do you intend to stay in your home? She felt five years was the maximum time she would live there as the home is large and property maintenance is demanding. She had tried to sell her home but the market was too poor and she didn’t want to ‘give away’ the home that was the result of built up equity in all the homes she and her husband (now deceased) had bought and sold over their lifetime together. She had a mortgage to pay off that amounted to about one-half of the reverse mortgage proceeds. The lump sum she would have to draw with the fixed rate option would just be put into the bank earning less than one percent interest, where she would be accruing interest and mortgage insurance over 6% on the reverse mortgage loan.

I suggested we look at the variable rate option because she could keep the extra funds in the line of credit which would not be charged interest until she took draws. In addition, the available money in the line of credit grows at the same rate of interest plus mortgage insurance as charged on the balance, currently 3.77%. And if rates increase, she would benefit from more growth in her line of credit. She said she was terrified of variable rates as she heard people have lost their homes because of mortgages where rates went up and they could no longer afford the payment. I pointed out that since no payments are required, you don’t have the same risk as forward loans. Of course, higher interest rates cause the loan balance to increase more rapidly and she would owe more at the end (when she leaves the home permanently or sells). On the other hand, her line of credit would increase more. She liked that idea because that increasing available line of credit is a hedge against the home dropping in value. Even if the home value was less than the line of credit in the future, she could still take all of the money out. It’s not like a conventional HELOC where the lender can cancel the credit line at any time. Also, since she expected to be in the home for no more than five years, the risk of high interest rates is lower.

Then we compared amortization schedules between the fixed rate with the lump sum draw and the variable rate where she just drew the amount of the mortgage and upfront fees that were financed. It wasn’t too many years before the fixed rate balance was twice that of the variable rate, even using a higher rate than today’s rate on the variable option.

In many cases the fixed rate lump sum is best, especially if you expect to stay in your home for a long time or the rest of your life and if you have a large mortgage to pay off. You will find the upfront costs are typically lower with the fixed rate option also.

Knowing your goals, what is important to you and understanding the programs in depth helps you choose the best option for your needs. Let’s have a conversation!

Reverse Mortgages Really Can Be Low Cost Despite What You Read!

American Pacific Mortgage - Reverse Mortgages — Thu, 19 Jan 2012 16:33:33 -0800

If you get your education on reverse mortgages from what you hear in mainstream news, you are missing out on a very important fact. Reverse mortgages are not expensive. The media loves to tell you that it is a program of last resort and the costs are too high, but in reality, reverse mortgages can have lower cost than conventional loan programs. The HECM Saver option was introduced recently and it really does save a lot of money in upfront costs. It makes sense to do a reverse mortgage even if it's a relatively short time frame you are looking at. Maybe you want to sell your home but the market is just too poor right now. A reverse mortgage can step in and fill a financial void.

The HECM Saver fixed rate option has no origination fee and the upfront mortgage insurance is just .01%. (for a $200,000 home, that's just $20)

Please don't rely on the misconceptions you hear and read when you can get the facts and details from a reverse mortgage expert.

I suggest you request a quote to find out exactly what is currently available.

Send your request for details here: request proposal

Being Grateful

American Pacific Mortgage - Reverse Mortgages — Fri, 23 Dec 2011 14:44:40 -0800

I’m been in a reflecting mood lately, maybe because it’s almost Christmas or maybe because my father recently passed away and it’s the 20 year anniversary of my mother’s passing. Whatever it is, I’m taking advantage of this time to look back and truly be grateful for the upbringing I had and be grateful for what my parents did for me and what I had to do for myself. We certainly weren’t wealthy, I suppose we would have been considered lower middle class. We ate well as my mom was an expert in preparing a healthy meal with pennies. Schools were good, even had music departments and small enough that I could participate in any sport or club. There wasn’t a lot to do so sitting at the table after school to complete homework and practicing the piano or trumpet didn’t make me feel like I missing out on anything. Stepping out to the basketball hoop in the driveway for a game of ‘around the world’ or ‘pig’ with one my brothers provided a good release (and I became a pretty good shot) Everyone dressed average so there was no feeling of being substandard, and when I reached an age to learn to sew, I had a variety of clothes … something that surely would not be ‘accepted’ in today’s standards.

My Dad was the sole wage earner as a barber with the price of a haircut very low. Family vacations were hitching up the little trailer and heading for a mountain lake or wooded creek with plenty of fishing, fun swimming, camp fires, running around the woods and just a wonderful time. gave me a great love for the mountains and nature. I didn’t stay in a hotel until I was out of the house and on my own. Even our big trip to Disneyland found us in the trailer park across from the park. That was fine…. and it had a pool! (Although I always wondered what staying in a hotel was like). And we never went on an airplane. We didn’t even go to places like Yosemite, although it wasn’t that far away….” too touristy”. My Dad had never been to Yosemite in the 70 years he lived in California…. and he didn’t care. But we fished the most out of the way trout streams you could imagine.

Christmas was always magical and fun. Santa stayed alive far longer than he does for today’s kids. I’ll never forget the Christmas when I kind of thought I would get a new bicycle and there under the tree was a box. Of course, a bicycle could not fit in that box, and when I opened it, there was an air mattress. I knew it would be great fun on the lake next summer and I thanked my parents and gave them hugs (even though it was used!) Then a smile came on my parent’s faces and they led me to the garage and there was a shiny new bike with a leopard banana seat and streamers hanging from the handlebars. It even had shiny fenders so I could ride on wet streets. What a great Christmas that was! What a great childhood…. lucky me!

Memories As I Write Out My Christmas Cards

American Pacific Mortgage - Reverse Mortgages — Wed, 21 Dec 2011 18:53:47 -0800

I spent the weekend writing Christmas cards to my past reverse mortgage clients. It provided an opportunity to reflect .... the joy I felt knowing how the program I introduced to my clients that made their lives better in so many ways, the privilege I continue to enjoy as I enter their homes and become a part of their lives. Often, as result of referrals, particularly Rob Black’s recommendation, people developed a trust in me quickly. It made me uncomfortable as I felt and continue to feel they must learn the details of the program and trust themselves in the decision. But at one meeting, a gentleman said he trusted me and I blushed and worked harder to help him understand the topic and he interrupted and said, “You should say thank you when someone says they trust you, that's the highest compliment you can receive”. Now, every time someone says they trust me, I smile and look into their eyes and express a sincere appreciation for the complement they just gave me.... and go back to an even more concentrated effort to help them understand fully the details of the important program they are considering. They are about to make one of the most important decision of their lives…. “At a time when they can't afford to make a mistake.” (A comment a past client made).

I am so very blessed to get to know such a wide variety of people with so many experiences that later generations can’t and will never experience ever again. I gain a first hand knowledge of their lives and how they live now and overcame obstacles during their lives, the hardships they faced and challenges they continue to face as they age. Working in California and the San Francisco Bay Area with the incredible variety of people that I got to personally know and become involved in their lives has been a blessing for me. I have been able to witness many different cultures, from the black woman in Oakland who had two social security numbers because of her childhood work in the cotton fields in the south with their bosses walking up and down the rows assigning numbers as they went. The world war II vets who experienced unthinkable and heroic actions during the war but live simple lives wanting no more than paying their bills, maintaining their modest homes and making sure their wives will be okay if they die first. The woman who quickly warned me that she lived alone so when she talks, it’s like opening the flood gates, but all so interesting. This was a European woman in her beautiful home in the hills of Santa Barbara who surprisingly had 2 concert grand pianos, tucked together like a puzzle in her living room. My lifelong learning at the keyboard came to fruition when we dug through her piano benches and played duets throughout the afternoon and every time I visited the city joined her for our afternoon soirée. She commented, you’ll easily find me… I’ll be the one jumping up and down as you approach! The elderly woman in Daly City whose daughter was looking for a source of funds to pay for her home care as the most important thing was to keep her in her home…. to allow her to die peacefully in her own bed…. the beautiful piano in her living room…. the Beethoven piece I conveniently had memorized provided a profound sense of joy that you could see in her face and tears….. The German woman in the Sunset district of San Francisco with the cold fog outside, and just as cold inside because she couldn’t afford heat (by the way… her home valued at $800,000) who kept music active in her life as I could see her spinet piano in the center of her living room with music and lighting that made it obvious this was the most important piece of furniture in the home. After commenting on her piano, I quickly learned she played, but her greatest love was singing, and she even wrote her own songs with the aspirations of recording them. We put off the main reason I was there and I sat at the piano playing the introduction to her love song she recently wrote…. Her shaky voice starting in…. the tenderness she expressed, the joy in her tone. How blessed I am!

My past clients understand what a reverse mortgage can provide…. And remind me over the years how important that money has been for them. The Walnut Creek woman who invited me to her home after remodeling…. stating “I polish my equity every day” as she stood in her beautiful new kitchen, leaning over her lovely granite countertops. The woman who was facing foreclosure and the lender relentlessly sending notices and refusing to give her more time …. as she made numerous trips to the emergency room with a heart condition…. who now happily announces her health has improved dramatically and her blood pressure back to normal since the reverse mortgage closed and she no longer has the stress of losing her family home of 60 years.

These memories mean so much to me, Merry Christmas to All!

HECM Lending Limits to Remain at $625,500 Through 2012

American Pacific Mortgage - Reverse Mortgages — Fri, 02 Dec 2011 15:55:00 -0800

We received great news from HUD that the HECM Lending Limits will remain at the high level of $625,500 through 2012. This means that seniors with high value homes can receive a percentage of their home value, up to $625,500. If the home appraises for more than that amount, we will use $625,500 as the home value and provide reverse mortgage funds based on the age of the youngest homeowner. The minimum age for a reverse mortgage is 62 years old and the older you are, the higher principal limit or amount of funds is available. There are no payments required on the loan as long as one borrower remains in the home. So go ahead and retire!

HECM Reverse Mortgage Lending Limits to Remain at $625,500 says FHA Commissioner

American Pacific Mortgage - Reverse Mortgages — Wed, 26 Oct 2011 18:15:16 -0700

At the National Reverse Mortgage Lender’s Association annual meeting, The FHA Acting Commissioner, Carol Galante told reverse mortgage lenders that HUD plans to keep the lending limits or maximum claim amount at the current $625,500 level. This is great news for potential HECM reverse mortgage borrowers with high value homes and those who wish to purchase high value homes using a reverse mortgage.

The current lending limit was raised as part of the stimulus package in 2009 and recently extended through December 31^st, 2011. We are still waiting for HUD to issue a mortgagee letter making this new extension official. I’ll keep you posted.

What Exactly Is A Reverse Mortgage & Do I Qualify?

American Pacific Mortgage - Reverse Mortgages — Sun, 21 Aug 2011 15:04:25 -0700

First, let’s review a standard ‘forward’ mortgage. You borrow money and promise to pay it back (typically monthly & amortized over 15 to 30 years). You allow a Deed of Trust to be recorded against your property as a security instrument. The deed of trust allows the lender to foreclose if you don’t pay according to the terms. A reverse mortgage works exactly the same except the terms of how the loan is paid back is different. Instead of making monthly payments, you let the interest accrue onto the loan balance. You agree to pay the lender when you move away permanently, sell or the last remaining borrower passes away. You also agree to pay your property taxes, homeowners insurance and keep up the general maintenance of your home. With both types of loans, there is no transfer of title.

To be eligible, you and your spouse must be at least 62 years old and have substantial equity in your home, or in the case of a reverse mortgage for purchase, a large down payment. For the exact loan to value (LTV) for a reverse mortgage, please request a personal profile. Because there are no mortgage payments required, the lender isn’t interested in your ability to make payments so your income or credit are not a determining factor in qualifying for the reverse mortgage. Although judgments must be addressed and you can’t be delinquent on any federal loan.

If you meet these qualifications, your home will be appraised and the amount available to you will be based on the appraised value or maximum claim amount, whichever is less. Currently, the national HECM maximum claim amount is $625,500 until Dec. 31, 2011, and scheduled to drop to $417,000 on January 1, 2012. The amount available to you will be a calculation based on your appraised value or maximum claim amount, the age of the youngest borrower and the expected interest rate at the time the loan documents are drawn.

You decide on the rate type, fixed or variable and the payment plan that suits you best, lump sum, line of credit, monthly payment or combination. The fixed rate option requires a lump sum draw at closing.

“But what about my heirs?” That’s a question I hear all the time. Please understand that you are not putting any liability on the heirs of your home. There are two possibilities when your loan matures (upon sale, move, or death) either you have equity left or you don’t, your loan balance may even be higher than your home value depending if your home appreciates or not. If there is equity remaining, your heirs may sell the home and keep the profits or keep the home and pay off the reverse mortgage, probably through refinancing. There are no deficiency judgments as the home alone stands for the debt.

A reverse mortgage is safe! With an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment." You must understand your obligations, including occupying your home as your primary residence, keeping up maintenance of your home and keep property taxes and homeowners insurance current.

A Description of Reverse Mortgage Rate Options and Payment Plans

American Pacific Mortgage - Reverse Mortgages — Sat, 20 Aug 2011 19:26:13 -0700

Once you decide you want to get a reverse mortgage, the next important decision is the rate option selection. For people with large mortgages to pay off, it’s a fairly easy choice with the fixed rate lump sum option. But if you need little cash initially and want to use the funds gradually over time, the line of credit or monthly payment option may be best and for this you must choose a variable rate option. Then there’s the choice of standard or saver. If you want the maximum dollar amount you must pay the full 2% MIP. If you can get by with a lower amount of money, you can save quite a bit by opting for the saver option. Remember, all of the closing costs are financed into the loan except the cost of the appraisal.

HECM Standard Fixed Rate This program has a fixed rate for the life of the loan. Rate options begin in the mid-4% range.Lower rates tend to have higher origination fees although currently we offer zero origination fee on very low fixed rate options. The only payment plan for the fixed rate program is a lump sum at closing.

HECM Standard Monthly Adjustable Rate The interest rate on this program can adjust every month with a lifetime rate cap of 10 points above the start rate. It is tied to the one month LIBOR index with margins ranging from 2.25% to3.0%. At this time, there is no monthly servicing fee charged.

Payment plan options include line of credit, monthly payments (term or tenure), lump sum of cash or a combination. Interest accrues only on the amount taken out so the loan balance does not rise as rapidly as with a lump sum draw. The available credit line has a growth rate equal to the interest and mip charged on the balance.

HECM Saver Program (Fixed or Adjustable Rate) This program became available Oct. 1, 2010. It works like the above rate options, the difference is that the MIP is set at 1/10 of 1% of the home value or lending limit (.01%). The money available is reduced from the ‘standard’ options.

Mortgage Insurance Premium MIP HUD/FHA charges 2% of the principal lending limit or appraised value (whichever is lower) for up front mortgage insurance on the standard option and .01% on the saver option.

The ongoing mortgage insurance is added to the unpaid principal balance at a rate of 1.25%. This mortgage insurance goes to HUD/FHA and makes the HECM program possible as it removes the risk from the lender who can offer very competitive interest rates and provides safety for borrowers.

I often spend a lot of time talking with my clients about each option as every scenario is different and it is very important to explore these choices thoroughly.

FHA - HECM Saver Reverse Mortgage Really Does Save Money in Upfront Closing Costs!

American Pacific Mortgage - Reverse Mortgages — Sat, 20 Aug 2011 15:37:25 -0700

It’s been almost a year since the HECM Saver came on the reverse mortgage market so I thought it was appropriate to write about my experiences with this program. The HECM Saver is designed for senior borrowers who want to reduce the up front fees and in exchange take a lower line of credit, lump sum or monthly payments. The up front mortgage insurance is reduced to .01% of the home value or maximum claim amount which is a drastic reduction from the standard 2.0%. On a home valued at $600,000, the MIP goes from $12,000 to $60. The amount of money available to the borrower is reduced to approximately 10% to 18% from the HECM Standard option.

It’s taken a while to catch on, but I’m noticing more people interested in the saver option lately. A reason it is becoming more popular could be because of the lower rates available now. A few months ago, fixed rates for the lump sum option and variable rates for the line of credit or monthly payment option, were a ½ point to ¾ point higher than the standard option. Currently, we offer the HECM Fixed Saver at 5.06%% and the ARM Saver at a 2.75% margin.Currently there is no servicing fee with these options. Just like the standard option, the available line of credit increases at the same rate that’s charged on the loan balance. If you think about it, this is a good way to secure your equity from further drops in home value. Some of my clients have secured a line of credit and not used it. Because they took it out when values were high, they now have a credit line availability actually higher than their home values of which they have full access!

The HECM Saver seems to suit people who want to preserve their equity but also provide a financial cushion for themselves. Many pay off mortgages and get rid of mortgage payments forever. So now, when you hear someone say, “Don’t get a reverse mortgage, the fees are too high” you can tell them to get educated before they spout off! The HECM Saver is an excellent alternative to standard Home Equity Lines of Credit.

Reverse Mortgage Lending Limits Set To Sunset on Dec. 31st 2011

American Pacific Mortgage - Reverse Mortgages — Fri, 12 Aug 2011 19:25:14 -0700

The FHA maximum claim amount for HECM Reverse Mortgages has been $625,500 since President Obama increased it in the stimulus package in 2008. It is schedule to go back to $417,000 on December 31^st2011 unless Congress votes to extend it. In the San Francisco Bay Area, this means many older homeowners will not qualify for a reverse mortgage as their existing mortgage to be paid off will be higher than the reverse mortgage will allow. For example, 72 year old homeowner with a home valued at $600,000 would now get $392,000 or pay off a mortgage up to that amount without bringing in additional cash. On October 1^st, that same $600,000 home will only provide $272,000. Folks, that’s $120,000 less! If that isn’t a good enough reason to start your reverse mortgage now, consider this: fixed rate reverse mortgages are in the mid 4% range (may even go back down to and some fixed rate options have no origination fee.

Consider a reverse mortgage as part of your smart financial plan. If you are drawing money from your retirement plan (paying taxes) and paying towards mortgage payments, it’s smart to get a reverse mortgage and get rid of those mortgage payments forever. Draw less funds, lower your taxes and enjoy life more.

Give me a call, Maggie O’Connell and let’s talk. No sales talk, but good solid information and ideas on how to structure your retirement in a better way utilizing a FHA government insured reverse mortgage. (800) 489-0986 and for more information go to www.ReverseMortgageStore.com

Why I Love Doing Reverse Mortgages

American Pacific Mortgage - Reverse Mortgages — Fri, 12 Aug 2011 17:16:36 -0700

I work in the reverse mortgage field because I love what they do for people. Reverse mortgages really makes a difference in their lives. I know because my clients tell me. And I feel it’s important to educate and inform because for some reason, reverse mortgages are a target for misconceptions and down right false statements. First of all people seem to love to give financial advice on this particular program, even if they don’t know a thing about it. They use words like.. don’t do it… the bank owns your house, your kids won’t get anything.. I advocate education and evaluation and stop the ill-gotten advice givers in their tracks. Maybe they don’t want a reverse mortgage, fine, but spreading incorrect information and giving unwarranted financial advice is wrong. I want the people I work with to help in this mission of encouraging people to evaluate the program for themselves. What a shame when a person could really benefit from a reverse mortgage and they don’t even look into it because of some loudmouth’s harsh words.

Let’s take a look at how the reverse mortgage works. Older homeowners can borrow against the equity in their homes without having to make monthly payments. Funds are advanced to the borrower and interest accrues, but the outstanding balance isn’t due until the last borrower leaves the home, sells or passes away. Now let’s look at an older couple who is making mortgage payments. They are pulling money out of their 401k (paying taxes on it) and paying it into their mortgage payment. They may even be putting their social security income into a taxable status because of the investment draws. Instead of spending down investments that may otherwise grow, spend down equity with a reverse mortgage. Having a mortgage on your home doesn’t affect appreciation. And you’re protecting yourself from further depreciation as you have secured the equity at the current value. If you set up a line of credit and ‘let it ride’, the growth in the line of credit could exceed a depreciating home value and you could conceivably draw more than the home is worth at some point in the future. I have clients in that position currently, with a credit line higher than the home value.

I visited one of my clients after she had completed a remodeling project she did by using some of her reverse mortgage proceeds. She proudly pointed to her new granite countertops and said, “I polish my equity every day”. Another who was able to purchase a new home with a reverse mortgage and live near her daughter and grandchildren. It made such a difference in all their lives as she was able to keep the grandchildren at her home after school until their parents came home from work.. Another who used some of the reverse mortgage proceeds to give money for a down payment so her son could purchase a home at an incredibly low price and begin to build equity for their family. Another who was drowning in debt from medical bills and was able to clear it all and begin to regain her health because the tremendous stress was lifted.

I love to help people get reverse mortgages and know that I really helped make a difference in their lives.