It is always good to see or read fair and balanced media portrayals about Reverse Mortgages. Unfortunately there are not enough. Yesterday, Amy Hoak wrote a very fair article in Marketwatch about Reverse Mortgages. It is a worthwhile read. Here is the link to it:

http://www.marketwatch.com/story/reverse-mortgages-now-a-less-costly-lifeline-2010-06-28

 

Here is a presentation from Genworth (a division of GE that bought Liberty Reverse Mortgage a few years ago for $50 million dollars) that gives some basics about Reverse Mortgages. In my opinion, it is not as good as the guide I posted last week ("Your Reverse Mortgage Guide" which you can get here: http://activerain.com/blogsview/1709741/my-first-reverse-mortgage-giveaway) but it can be helpful with many of the basic questions and issues that surround Reverse Mortgages. I know it's redundant, but I want to explain how Reverse Mortgages work to as many people in the world as I can because I believe that the more people that understand a reverse mortgage, the more people that can be helped by them.

Here is a presentation I gave several times to people in the insurance industry (mostly Long-Term Care Insurance, but Life insurance, too) I think it's a great explanation how Reverse Mortgages work and some great, real-life examples of how Reverse Mortgages can help insurance agents and their clients. I reiterate that I believe that Reverse Mortgages are the most misunderstood financial products in the world and I am doing whatever I can to explain them to as many people as I can because I know that the more people that understand how a Reverse Mortgage works, the more people can be helped by them. Reverse Mortgages let you hold on to the things you love, especially your independence.

Here is a presentation that I have given at seminars about how Reverse Mortgages work. It is a little wordy and I am working on changing many of the slides, but if you read it, it gives a lot of useful information.My favorite part is about the misconceptions that people have about Reverse Mortgages. I still cannot believe how many intelligent professionals, many of whom serve the senior community, such as elder law attorneys and financial planners, still don't have a clue about how a Reverse Mortgage works. I can't tell you how many of them have told me that the lender keeps the Reverse Mortgage borrowers home. I still believe that Reverse Mortgages are the most misunderstood financial product in the world and I am trying to explain it to as many people as I can. Here is the presentation:

Before I start giving away more great stuff about Reverse mortgages, I wanted to give a few examples of completely worthless, and sometimes incorrect stuff that is out there about Reverse Mortgages, if you should happen to search for them. 

The first one is an article called "The 5 Key Reverse Mortgage Facts Before You Decide". Here is the link if you want to waste some time: http://www.articlesnatch.com/Article/The-5-Key-Reverse-Mortgage-Facts-Before-You-Decide/1269993

In fact almost none of the five things are remotely important in the decision to make about whether a Reverse Mortgage is right for you or not. "Take the counseling seriously" Are they serious? How about looking into what your financial needs are and whether a Reverse will satisfy them.

Another example is called "A Clear Picture Of What A Reverse Mortgage Is" Its is accurate, but not very helpful. Any explanation of a Reverse Mortgage that starts out with "With the reverse option you get a payment sent to you." is not really getting to the point, especially when in teh vast majority of Reverse Mortgages, it is not true. Here's the link: http://articles.directorygold.com/Article/A-Clear-Picture-Of-What-A-Reverse-Mortgage-Is/442579

There are so many examples of bad articles, confusing pieces and in most cases they are written by someone who either does not understand the product or is just unable to explain it clearly. What I am trying to do is undo these and explain Reverse mortgages in a way that ANYONE can easily understand them. This is not easy, but I will do it.

 

This is, in my opinion, the finest written report on how a Reverse Mortgage works. I think it is the clearest written, most descriptive explanantion of most of the details about a Reverse Mortgage. I believe that Reverse Mortgages are the most misunderstood financial product in the world. I belive that complicated financial derivatives are easier to explain and enjoy less misconception by the public than Reverse Mortgages do. I am making it my mission, my purpose, to explain how Reverse Mortgages to as many people as possible because I believe that the more people that understand Reverse Mortgages, the more people that will be helped by them. Here's the report; you can download it if you click on the link:

I am making my number one priority to educate as many people about Reverse Mortgages as possible.

I am going to give away, to anyone that asks for it, what I believ to be the finest written report about Reverse Mortgages that I know of. I have already posted three Reverse mortgage presentations on SlideShare and i will put more on there shortly.

I give this information freely because I believe that the more people that understand Reverse Mortgages, the more people can be helped by them. I believe that Reverse Mortgages are the most misunderstood financial product in the world today. Most professionals that serve seniors (e.g elder law attorneys, financial planners, etc.) don't understand them and this ignorance is hurting people throughout this country.

I will post much of what i am giving away on this blog, so stay tuned.

I thought this would be a lot easier. I know how much Reverse Mortgages help people. I have saved dozens of people from certain foreclosure. I have helped people who could not put food on their table, I have helped people help their children and I have helped people sleep at night, just by knowing that if an emergency comes up, they will have the money to pay for it.

No matter how much I help people and no matter how much I know and believe that I am doing the right thing, I still get frustrated every time I hear the same negative remarks about Reverse Mortgages: "They're no good" "Isn't that when the lender gets the home" "Aren't those the things where the borrowers get kicked out of their homes" and so on.

In every case, these remarks are made by people that have little to no understanding of how a Reverse Mortgage works.

I am going to dedicate my self to educating as many people as possible about Reverse Mortgages. I am going to giver away what I think is the best written report on Reverse Mortgages to as many people as I can, because I believe that the more people who know about Reverse Mortgages, the more people can be helped by them.

I'm still frustrated, but at least I'm trying to do something about it.

Bill Bischoff wrote stoday in SmartMoney that the tax benefits of a Reverse Mortgage for the heirs of the borrower may be much greater than the costs of the loan. 

His summary of what a Reverse Mortgage is and how it works is very well-written and he wrote that a Reverse Mortgage can possibly cause the stepped-up tax basis to eliminate or reduce the capital gains tax that they may have to pay.

Here's a link to this short and excellent article: 

http://www.smartmoney.com/Personal-Finance/Taxes/would-a-reverse-mortgage-affect-my-taxes/

 

 

It's no secret that fixed-rate Reverse Mortgages have been getting a much better execution in the secondary market. This means that the lenders are getting much more money when they sell the loans after they close.

Most lenders have been passing this on to the originators like me. Some have been covering some of the closing costs like the servicing fee or origination fee. The biggest closing cost is almost always the Mortgage Insurance Premium or MIP that is 2% of the appraised value (up to $625,500). The MIP is usually more than half of the closing cost total.

At first glance, Bank of America paying the MIP for fixed-rate Reverse Mortgages sounds great, but there are a few issues and complications that it can cause. here are three potential issues:

 1) Will the huge disparity in closing costs push people to take the fixed-rate loan, which requires a full draw at closing, instead of an adjustable-rate loan that gives them much more flexibility in how they take the money out?

2) Will these new closing cost reductions cause the borrowers confusion when they see that their adjustable-rate loan had $14,000 more in closing costs than their friends fixed-rate loan? (remember that for some borrowers a fixed-rate option is the right thing and for some, an adjustable-rate option is much better)

3) If the secondary market for reverse mortgages deteriorates in the future, will we be able to start charging borrowers for the MIP when they may not want to anymore?