Corey's Blog

No Pushing!

Corey Matelli (Reverse Mortgage Company) — Wed, 09 Apr 2008 10:52:44 -0500

Last week I had an appointment with a gentleman who was interested in a reverse mortgage. In fact, all indications were that he was going to take very little convincing. His wife had a debilitating stroke 7 months ago, and has been hospitalized ever since. She is unable to speak and her hands are permanently clenched. There is no hope for recovery. In essence, he's waiting for her to pass, which may literally happen any time.

There is no question that he can benefit from tapping into the equity in his home, which he owns outright. However, when talking with him, he said that when his wife dies, he is going to sell the home and move to Tahiti where he owns property. He has very poor eyesight, and must depend on someone else to even drive him to the grocery store...or anywhere else. He said in Tahiti, he can get around by boat or taxi without any problems.

To be perfectly honest, I could have written a loan that day with little effort. However, I felt duty-bound to inform him that if he did not intend to live in the home for at least 4 or 5 years and he had no urgent need for the money, I would recommend holding off. He would have had about $13,000 in closing costs which would begin accruing interest from the day the loan funded. He may be selling the home within the year and not even use the money available to him within that time. I advised him that it may not make sense to pay $13,000 for something he didn't truly need, which would only reduce how much money he would get when he sells the home in the not-too-distant future.

He agreed.

Once we moved off the topic of reverse mortgage, in a moment of transparency, he admitted he was lonely. This was the point that I knew it was time to take off the "business" hat and be his friend. He showed me around his home, telling me the stories of his travels across the United States and Europe. He shared stories from his days in the U.S. Navy during World War II. He also shared touching memories of his wife of nearly 60 years.

In parting, I told him that I hope his future works out exactly as he has planned. I mean, who wouldn't want to live in Tahiti? But I also told him that if his circumstances change, a reverse mortgage will always be available to him. He told me of his friends who cautioned him to be wary that I might try to push him into getting a reverse mortgage and not educate him on what he would be signing. The look on his face and peace in his voice as he reached out and shook my hand and told me how much he appreciated my honesty and integrity in advising him to wait was more meaningful to me than a paycheck. It was then that I realized that I didn't become his friend when the business portion of our conversation was over. I had become his friend during the business discussion.

The media and those with an ax to grind like to warn people of the "dangers" of reverse mortgages and unscrupulous, greedy professionals. I hope this story proves to you that there are many of us who sincerely put the senior first. This story is not about me. It's about a man who has been grieving for 7 very long months. Nobody wants him to become a statistic and more fuel to the media fire of negativity.

Reverse Mortgage vs. REX Agreement

Corey Matelli (Reverse Mortgage Company) — Mon, 10 Mar 2008 11:42:06 -0500

Over the weekend, I received the following question from a reader in Illinois:

Corey - do you have any thoughts on the REX Agreement? They have been advertising a lot here in Chicago and I’d like to understand how it works better. They are extremely complicated and seem rife with potential pitfalls.

Real Estate Equity Exchange, or REX, is not technically a loan. Unlike reverse mortgages, which are available in all 50 states, REX agreements are only available in California, Colorado, Illinois, Florida, New Jersey, North Carolina, Virginia and Washington state. The homeowner and real estate investment company establish an agreement into which the investment company receives as much as 50% of the earned equity from the point of the agreement to the point of sale, or 50 years (40 in Illinois, 30 in North Carolina), whichever comes first. It is very complicated, but just about any financing tied to your home will be. But this is particularly complicated. I have heard commercials positioning REX Agreements as an alternative to reverse mortgage, but it is in no way designed for the same market as reverse mortgages.

REX agreements typically do not pay out as much money as a reverse mortgage, and are not designed specifically for seniors. In fact, homeowners of any age may qualify for REX agreements. Reverse mortgages can pay out more than 60% of the home's value, while REX agreements typically only pay 10% to 15%. The amount the homeowner gets is directly linked to what percent of the future change in value of the home they agree to sign over. With the REX, the investment company agrees to make 2 payments to the homeowner. The first payment, the "advance", is paid to the homeowner right away once the agreement is entered. The second, or "remaining" payment, is made at the end of the REX agreement. The agreement ends when the homeowner sells the home, or the aforementioned time limits are reached.

Like reverse mortgages, annual income is not an issue. However, unlike reverse mortgage where it's irrelevant, a REX agreement requires the homeowner have a FICO score of at least 680. And remember, REX agreements are not loans, so it cannot be assured that the proceeds will be tax free, as they are in a reverse mortgage. The following quote is taken directly from the REX & Co. website, saying that to their understanding, "under current tax law a homeowner entering into a REX Agreement should be able to defer the tax impact of receiving the Advance Payment".

The pre-payment fees mentioned above can be steep. If you sell the home or otherwise want out of the agreement within the first year, the penalty is 25%. This penalty is reduced by 5% per year for 5 years.

Because reverse mortgages are designed for and exclusively available to senior homeowners, there are a few things to consider. First, many seniors still face monthly mortgage payments. In fact, a recent survey shows that 40% of seniors between 62 and 75 expect to retire with mortgage debt, with many expecting to never pay it off. As such, reverse mortgages are designed to help seniors retire their mortgage payments, and in most cases, also provide them with financial resources available to them in monthly installments, a line of credit, a lump sum, or any combination of the three. REX agreements do not require that your current mortgage to be paid off, so it is possible that you will still have to pay the mortgage balance in addition to what you'll owe the investment company at the end of the agreement.

As you might assume, the homeowner's responsibilities to the agreement include keeping up on homeowners insurance, property taxes and keeping the home in a decent state of repair. But what is also cause for default is if the homeowner exceeds the agreed upon principal amounts secured by the home. In other words, if you end up in a financial pinch where you need to tap into the equity of your home, you likely will not be able to do so without having to end your REX agreement and pay them. This means you will probably have to sell the home, or get a reverse mortgage in order to do so.

One other significant difference is that townhomes and condos do not qualify for REX agreements, while they do qualify for reverse mortgages, in most cases.

This is just a summary and does not include all the ins and outs of REX agreements or reverse mortgages. I will not say that REX agreements are not valid or a good option for some. I will say that it is not designed for the best interests of the same people for whom a reverse mortgage is designed.

Thank you to Mark for asking this very good question. If you have a question you'd like me to answer, please feel free to email me anytime at corey@forwardbyreverse.com.

Reverse Mortgage and Golf

Corey Matelli (Reverse Mortgage Company) — Thu, 28 Feb 2008 13:31:32 -0600

I was speaking with a friend of mine yesterday about the piece I wrote the other day on my main blog site regarding the other reverse mortgage guy who was trying to convince my client to not meet with me. During the conversation with my friend, who is also in the reverse mortgage business, I came up with, what I thought, was a pretty good analogy. So with that, I offer you this...

ANALOGY ALERT!

I like to golf. Not because I'm good at it, because I'm not. But because it's just a great game, and golf courses are typically beautiful places. Trees, water...and often times, wildlife can all be found during a round of golf. And I suppose I should also mention that I will spend part of my day playing in the sand, as well. <Sigh>

I digress.

The point I was making is that in golf, you may be competing against others to get a better score, but more accurately, your real competition is the course, itself. As much as I may want to beat my golf partners, I really have no control over their game. You see, you don't play defense in golf. I can't go stand in front of the hole while they're putting and swat away a good shot as if I were a goalie. All I can do is play my game as best I can, and that's really about it.

This is my attitude about my business, as well. I am going to do the very best I can in educating people about reverse mortgage, and if it's right for them or their loved ones, terrific. If they feel I'm right for them, terrific. I am not going to stand at their front door and swat away another reverse mortgage professional they may want to talk to. My goal is to educate the people I meet with as best I can. In the process, I do hope that they will consider me knowledgeable and personable. Thankfully, when discussing reverse mortgage, I'm much better at keeping things in the fairway and out of the trees, sand and water.

Like golf courses, no two people are the same. They all contain their own set of challenges. In golf, you may find two holes with the exact same yardage from the tee to the pin. However, there may be many variables which keep them from being identical. One could dog leg left, while another may bend to the right. One may be uphill, the other downhill. One may have water, another may have heavy trees. You get the idea. In reverse mortgage, you may find people in a situation which, on the surface, looks just like something else you've experienced. But when you spend time with them, you realize there are some significant differences and challenges. On the surface, two families I met with last week seem the same. However, their family and financial situations are very different. One has children who are very well off, financially, and very independent. In another case, the parents want to help their child get out of some credit problems. One family's home is in great shape with only some cosmetic issues they want to address. The other's roof has dry rot and is endangering their homeowners insurance coverage.

There is no defense in golf, and no two courses are the same. The same is true in reverse mortgage. Play your game to the best of your ability, keep getting better at it, and you'll find success. The difference is, when you improve in business, the client wins.

How sweet is that?

Reverse Mortgage = Economic Stimulus

Corey Matelli (Reverse Mortgage Company) — Thu, 31 Jan 2008 13:30:40 -0600

In some of my daily reading yesterday, I came across an interesting fact I had wondered about, but never really researched. I found that the average senior between the age of 65 and 74 spends 92% of their income. This is startling, but not to be outdone, seniors 75 and older spend 98% of their income.

On Tuesday, the House approved a plan by a margin of 385 to 35 which excludes a great many seniors because they do not have sufficient income. However, there is some noise being made which would allow seniors to include their Social Security payments as income, thus helping them benefit from this plan.

Senator Max Baucus, Chairman of the Senate Finance Committee, is pushing this proposal because the House plan excludes a huge segment of the population who need it most. Seniors.

“America’s seniors have worked hard all their lives, and are major contributors to our economy. So my proposal will give America’s seniors the same rebate as any wage earner. Rebates for seniors and payroll taxpayers, extended unemployment insurance, and tax relief for struggling businesses will put more cash into the American economy right away."

Senator Baucus then released the following statement:

“Statistics show that American seniors are a prime demographic for an economic stimulus package. But more than 20 million seniors could be left out of the planned Federal tax rebate unless Congress acts – just because they don’t have at least $3000 in earned income, or enough taxable income to get the full proposed credit.

“The Finance Committee plan would allow almost all seniors to receive a $500 rebate by showing at least $3000 of Social Security income on a 2007 tax return. America’s seniors have worked hard all their lives. Many live on fixed incomes, and struggle to pay their medical and heating bills. Seniors deserve to be included in any rebate program. And a rebate to seniors works for America’s economy – here’s how:1

“Seniors are significant contributors to American economic activity.

“Economists agree that consumer spending, fueled by tax rebates, can boost America’s economy. Americans over 65 are responsible for 14 percent of all consumer spending.

“Seniors spend – exactly what America’s economy needs now.

“Americans over age 65 spend 92 percent of their incomes within a given year – that’s higher than any other demographic group over the age of 25. Households headed by a person over age 75 spent an even higher percentage of their income – 98 percent.

I have seen many critics of reverse mortgage view these statistics as, "you made your bed, now you have to lie in it." They figure that if you didn't plan sufficiently, that's your fault. They tend to look at these statistics as irresponsible spending. I see it differently. In order to keep up with the demands of the cost of living, seniors have to spend a nearly all of their significantly reduced income in order to survive!

While I applaud the efforts of those who want to help seniors benefit from this stimulus package, I don't think a $500 annual check is going to be enough. I would just like you to think about these statistics, and then consider how reverse mortgages have given seniors more margin. If a reverse mortgage can broaden that margin from 92-98% down to 62-68%, that's pretty significant, right? What about dropping it to 32-38%? You'd be crazy not to, wouldn't you?

If you, or someone you know is in the category of spending virtually all of your income just to survive, you have to consider a reverse mortgage.

Lastly, I've believed this all along, but didn't have the data to prove it until now. Reverse mortgages are good for the economy by enabling seniors to be more financially viable.

The Promise of Reverse Mortgage

Corey Matelli (Reverse Mortgage Company) — Mon, 28 Jan 2008 10:36:02 -0600

Over the weekend, I was alerted and alarmed by an article with this headline, "Ensure Your Old Age Is Trouble Free With A (name deleted) Reverse Mortgage".

Folks, no one and nothing can ensure a trouble free life. Be wary of anyone who does. Even if it's just to get your attention about something good, like a reverse mortgage.

Since the inception of my blog, I have been very outspoken against critics of reverse mortgage because of their misrepresentations, either out of ignorance or just plain closed-mindedness. Let the record show that I am equally outspoken when someone tries to promise something which is impossible to deliver by a reverse mortgage.

I do not know the person or entity who wrote this article or headline, or the company behind it. I can't say they are crooks or irresponsible or any such thing. I will say that this claim is irresponsible. In addition to it being way off base, it also gives substance to critics' arguments.

Reverse mortgage is a wonderful tool for senior homeowners to tap into the equity in their homes to gain tax-free income, whether by monthly installments, lump sum, or leaving it in a reservoir line of credit...or any combination of the three. Seniors have used reverse mortgages to simply rid themselves of their existing mortgage payments, to take care of long overdue home repairs or improvements, to enable them to purchase necessary medical care, to help their children and/or grandchildren with their pursuits...the list is endless. You can use the funds for anything you want.

What a reverse mortgage can't do is promise you a "trouble free" life. The infusion of money can liberate you from a great many things, but it can't do that. Nothing can. There is no room for hyperbole and promises which cannot be delivered when working with seniors. Well, when working with anyone, for that matter. But I am passionate about seniors, and I get very concerned when people and businesses make irresponsible claims in order to elevate themselves.

I debated in my head whether or not I would write this article and start the week with this tone. I thought, "people are smarter than to be swayed by comments like that". But then I remembered all the recent news of people, smart people, good people who are crying to the media because they trusted people who made them promises they couldn't deliver.

Friend, I can't promise you that your future will be "trouble free". I can promise you that a reverse mortgage can and will do what it is designed to do. I can promise you what I can and will do for you. As humans, we have limitations. Be cautious of anyone who makes offers which extend beyond these limitations.

Don't be swayed by empty promises. Instead, reverse mortgage helps you live a life OF promise.

The Simplicity of Reverse Mortgage

Corey Matelli (Reverse Mortgage Company) — Thu, 24 Jan 2008 10:00:28 -0600

You may recall a few weeks back that I wrote about Mr. and Mrs. M. Their reverse mortgage closed and was funded on New Year's Eve. They're a lovely couple in a beautiful home. We chat on average of about once a week just for fun. Once the weather clears up, Mr. M and I have a standing golf date at the course where he serves as a volunteer marshal.

Back while their loan was being processed, after they had completed the application, after they had gone through their mandatory independent counseling, I got a call from Mr. M. He sounded rather concerned. In fact, he sounded rather cryptic. They had a very important question, but he didn't want to ask it over the phone. He insisted that we meet in person. Normally, this wouldn't bother me at all. But they knew I lived 2 hours away, and demanding a face-to-face meeting would require a little doing on my part. But of course, that wouldn't be a problem. So I drove up to meet with them a couple days later.

During the entire drive, I just kept wondering what the problem might have been. They hadn't even given me a clue. So I just went over everything in my head that I had told them and given them in writing. I had given them and explained to them the amortization schedule, the Total Annual Loan Cost, they had a side-by-side comparison of several different reverse mortgage loans to help them determine which would fit them best. Let's see...ummm, the appraiser had already been to their home and gave a glowing report.

What could it be that is this important?

I got to their home to find they had my seat at the table all ready for me. Mrs. M. had her little notebook out, just as she did in our previous visits. I was prepared for them to ask me just about anything. That is, anything but the question they actually had for me. I mean, I had prepared responses to legal questions, tax questions, estate planning questions...you name it. Then they laid it on me.

When do we start our monthly payments?

Within the blink of an eye, my mind began to process this question. They opted for a fixed rate reverse mortgage, which means they would receive their entire benefit in one lump sum. In other words, unlike other loans, they cannot receive monthly payments. Surely they don't mean when they start sending monthly payments.

We want to know when we start making our monthly payments.

At this point I'm both stunned and relieved. You called me and asked me to come up here for that question? There must be more than that! I'm quite certain I have explained to them the single most unique aspect about reverse mortgages which makes them so appealing and beneficial to seniors. The fact that you have no payment obligation as long as you remain in your home. I also know that this was explained to them during their counseling. I know it's in the documentation I gave them. They've been considering reverse mortgages for 4 years!

I learned in this moment a valuable lesson. You can go over every single detail about reverse mortgages. You can go over the complexities of them and how they work. You can give them documents, spreadsheets, booklets, DVDs. They can go through counseling, talk to advisors and family. But sometimes, just sometimes, it's the simplest fact that they want to make sure they understood correctly. It is not "too good to be true". Sometimes they have so much data rolling around in their heads that their eyes glaze over, and the simplest and most fundamental of facts somehow gets buried beneath it all.

Our meeting lasted all of about 20 minutes. We had a very nice time. When I answered their question and they looked at each other with a silent, "that's what I thought", their expressions changed to that of great relief. When it was time for me to leave, they each walked me to the door, then stood out on their front porch, arm in arm, and waved to me as I pulled away.

That is a picture I'll never forget. It was simple, but it meant so much.

The Emotions of Reverse Mortgage

Corey Matelli (Reverse Mortgage Company) — Tue, 22 Jan 2008 12:35:49 -0600

There was an article in USA Today on Friday entitled Reverse mortgages aren't for everyone which has caused a bit of a stir. I participated in some of the online conversation which caused at least one individual to question my credibility because, in his mind, I was using "emotion" to sell reverse mortgages. This seems to be his comeback to anything anyone says which is pro-reverse mortgage.

This reminds me that many professionals are educated beyond their humanity. Everything is numbers. It's not about people and what they want, it's about how smart I am and you're stupid or a crook if you disagree with me.

If you are a senior, or someone you love is, one very important quality you should look for in anyone you might be looking to do business with is their humanity. When meeting with potential clients during the consultation stage, I make it a point to make myself as transparent as they are. I'm asking a lot of personal questions about them in determining their values. Knowing where they put a premium will help me learn how to serve them best. So I do my best to let them know what is important to me, as well. I will talk about my family, my friends, my interests so they know where my heart is. I have clients who ask me every time I talk to them how my parents are doing. I love that. We have personal relationships as well as a professional one.

As no two people are the same, no two situations are identical. These critics do not adapt to their clients, they expect everyone to adapt to them. This will not work when working with seniors. They deserve better.

Anyone who pounds you with emotional stories and reasons to get a reverse mortgage, or anything...I would likely be skeptical about what they're trying to compel me to do. Anyone who is all about the numbers and not listening or interested in my goals...I'm going to be equally skeptical. The key is balance. It's wise to align yourself with an expert in their field. Just the same, it's a key to find someone who is in tune with what is important to you.

Remember, reverse mortgages are about you. You must grasp hold of this in order to recognize professionals who also understand this, and you won't fall victim to those who don't.

The Mechanics of Reverse Mortgage

Corey Matelli (Reverse Mortgage Company) — Thu, 17 Jan 2008 17:57:29 -0600

If you've read my blog or spent any time with me, you probably know by now that I love using analogies and metaphors. In that light, I write this post.

You will hear financial "experts" insist how complicated reverse mortgages are. Well, my car is a pretty complicated piece of machinery, but all I need to know is how to fill the gas tank, take it regularly to get the oil changed, tires rotated and other fluids checked and filled, and just drive responsibly. Every single time I've gotten in it, I turn the key, and VROOM, it starts. I couldn't tell you how it does, but it does.

Yes, under the hood, reverse mortgages have a lot going on. But to the borrower, most of what's under there is up to the lender to maintain. The borrower simply needs to make sure, like the oil change, they keep up on their property taxes, homeowners insurance, and keep the home in a good state of repair. We'll send you a monthly statement showing you exactly how your reverse mortgage vehicle is performing.

With that being said, I think that before one gets a reverse mortgage, they should be sure and do more than simply kick the tires. You and I should spend a lot of time together talking and listening to one another. We should ask each other a lot of questions to determine if it's right for you. I have no desire or interest in leading you into something that doesn't work or will be an inappropriate vehicle for you because I don't need you calling me and showing up at my door angry and upset, pointing at the smoking mess I led you to. I'd much rather see you zoom by, honking, smiling and waving with the wind in your hair as you live your life of financial independence.

Like cars, there are many different reverse mortgage vehicles out there. When at a car lot, you can choose between sedans and pick-up trucks, SUVs and sports cars. With reverse mortgages, you have fixed rate and adjustable rates. Jumbo loans or the Home Equity Conversion Mortgage, (HECM), and then many variations of each of them. I'll then prepare for you a customized comparison of each of these. I'll show you how they work and how they will perform for you in the future. You will be able to see which fits your situation the very best. Or, you may find that none of them do. One way or the other, you will be equipped to make an educated decision.

Understand that there is a lot to a reverse mortgage loan, and I will not hide anything from you. But that also means that once you get a reverse mortgage, the maintenance is actually quite simple. And like a good, dependable car, it will comfortably, safely and reliably take you from where you are, to where you want to be.

Above All Else, Serve The Client

Corey Matelli (Reverse Mortgage Company) — Wed, 16 Jan 2008 11:49:10 -0600

A couple months ago, I was going through my files of people who had gotten a reverse mortgage in the past. I came across a lady, I'll call her Mrs. A. I noticed that she had gotten her reverse mortgage several years ago, when the lending limit in her area was considerably lower. Also, since she got her original loan, several new reverse mortgage products have been released. I ran the new numbers and found that she could potentially benefit greatly from a refinance with a new reverse mortgage.

When I called Mrs. A, she was particularly concerned with making sure I was being honest with her. I told her that I do not work directly for the lender with whom she got her original reverse mortgage, but I am authorized to represent them and offer their loan products to qualified seniors. That was not satisfying to her. She absolutely refused to even speak to anyone who wasn't directly employed by her original lender, so she hung up quite abruptly.

Though I'd like to think I might have handled the conversation differently if I were her, I really tried to put myself in her shoes. The poor lady has probably received tons of letters, postcards and phone calls from so many people and companies that she felt like a piece of raw meat in the lion cage. I was so convinced that if she took the time to listen to the facts, she might really be pleased with what a re-fi could do for her.

I could have lied to her and told her I work for the company in question. Heck, she'd never know. I have all their paperwork and promotional materials. But I don't do business that way. Fortunately, I have a very good friend who works with the company she has her original loan with, so I gave Lisa a call. I told her she really ought to call Mrs. A and let her know what she can get by refinancing. Lisa called her, sufficiently convinced Mrs. A that she is employed by her lender, and they were able to have a series of productive conversations.

Fast forward to today. Mrs. A is signing her closing documents today, and is so excited, Lisa is bringing balloons to the signing. Though I didn't write the loan, I have a great feeling inside that I really took care of Mrs. A, though indirectly. Her reservations weren't personal against me. She probably doesn't even remember my name. That is not what is important. Right now, she's excited that she has a considerably deeper financial reservoir provided by her new reverse mortgage.

It's not about me, it's about them.

Congratulations Mrs. A!

Advantages To Being "Over The Hill"

Corey Matelli (Reverse Mortgage Company) — Sat, 12 Jan 2008 12:24:33 -0600

You know, we spend our lives climbing and climbing. It takes a lot out of you, doesn’t it? The phrase “over the hill” is clearly understood as a euphemism for being past your prime, or even irrelevant. If you’ve ever hiked up a hill or climbed a mountain, you’ll find that the best view and vantage point is…the top. When you reach this plateau, you gain a perspective almost impossible to achieve from any other place or any other way. The picture you see below is one I took not long ago while visiting the Pine Mountain Lake area of Northern California.

Once you’ve reached that place of perspective and even peace, you soak it in. You savor every detail. The sound, the sight, the smell. Then, you begin your descent. Isn’t the hike down much easier? You’re going with gravity, not against it. Life is the same way. Or at least, it should be. You’ve climbed all your life. You’ve now reached the top of the hill. You have perspective on life that others cannot obtain until they get there themselves. You can try to tell others of the view, but they can’t fully grasp it’s majesty until they witness it themselves.

Your remaining years should be less stressful and taxing. The descent is by no means easy, but it should be easier. Reverse mortgage is a wonderful tool which more and more American seniors are using to ease the natural strain their golden years bring, and allowing them to enjoy the view. If you, or someone you know is feeling a financial strain, at least take the time and give me a call to get the facts. It’s not the answer for everyone, but it certainly is for many.

Now, on a lighter note, here are 7 perks to being “over the hill” I recently read:

There is nothing left anymore to learn the hard way
Things that you buy now won’t wear out
Your investment in health insurance is finally paying off
Your secrets are safe with your friends because they can’t remember them anyway
Your joints are more accurate meteorologists than the guy on TV
You can get into a heated argument about pension plans
You can eat dinner at 4:00 in the afternoon

Have a great weekend!

Refinancing a Reverse Mortgage: Success Upon Success

Corey Matelli (Reverse Mortgage Company) — Tue, 08 Jan 2008 16:03:08 -0600

Last night I had the privilege of speaking with a very nice couple, to whom I will refer as Mr. and Mrs. G. They obtained a reverse mortgage loan back in July of 2001. At the time, their home was appraised at $415,000, and the federal lending limit in their county was $239,250. The full amount of their benefit was just under $150,000.

Fast forward to today. They are now 80 and 79 years old, respectively. Their home is currently valued, conservatively, at over $650,000. The federal lending limit in their county is nearly $130,000 higher than it was when they got their original loan 6 and a half years ago.

The first question I asked them was simple. You've had the loan for nearly 7 years, how do you feel about reverse mortgages and how it's fit into your life? They each expressed very positive comments about how it has helped them greatly. They simply have used the proceeds of the loan as a go-to for significant expenditures which inevitably come up in life. Home repairs, auto repairs, etc. After nearly 7 years of having their reverse mortgage, their balance is $83,000.

In our discussion last night, we looked at the fact that while their balance is $83,000, their home has appreciated in value approximately three times that much. They still have way more to leave their heirs now, nearly 7 full years after getting their reverse mortgage, than they did when they got it.

Mr. and Mrs. G stand to gain significantly with a refinance of their original reverse mortgage. They now have many options available to them which didn't exist back in 2001. Among them is the fixed rate reverse mortgage. After paying off their current balance, a fixed rate Home Equity Conversion Mortgage, (HECM), will give them over $173,000 in tax-free cash. They also have the option to choose another adjustable rate HECM with a very low interest rate. This will give them in the neighborhood of over $220,000 after paying their current balance. And now, because of their home's appreciation, they qualify for a jumbo reverse mortgage. This has a higher interest rate, but the lending limit is the value of their home, which in this case is about $300,000 higher than the HECM lending limit of $362,790. The jumbo loan, after paying their current balance, would net them well over $320,000.

Based on how they've utilized the funds from their original reverse mortgage, they may not need all of this money. But having it available to them whenever they need it provides them the peace of mind they need to live a financially stress-free life. Should the unforeseen happen, they are more than adequately equipped to face life's financial challenges...while still being able to leave behind a very nice inheritance for their children.

This is a perfect example which refutes the baseless claims of critics who insist that obtaining a reverse mortgage will absolutely wipe out any hope of an inheritance, that you will exhaust your equity, and that it is the next "subprime" mess. Ask Mr. and Mrs. G. They love it, and they're ready for more.

Mr. and Mrs. M

Corey Matelli (Reverse Mortgage Company) — Sun, 06 Jan 2008 22:32:52 -0600

2007 went out on a very positive note for Mr. and Mrs. M. I was introduced to this special couple just a few months ago through a family friend of theirs who is a CPA and familiar with me and what I do. Referrals are always wonderful, but this one was particularly special because of the nature of the relationship between this couple and my CPA friend. She wasn't simply referring a client, she was referring a couple with whom her family has had a special relationship for decades.

Mr. M had been contemplating getting a reverse mortgage for over 4 years. He's a golfer, and he would ask friends of his what they thought of reverse mortgages. He got mixed opinions, but he kept looking into it. He wasn't ready back them, but when the time was right, he called someone he trusted. When he called his friend, the CPA, she not only endorsed the reverse mortgage program, but told him she also knew someone she and they could trust with this important matter.

A few short years ago, Mr. M suffered a serious stroke. Though he is living a healthy and active life now, he knows that he's not getting any younger and that he would be more at peace making sure his wife had no financial obligations which would overwhelm her or jeopardize their home in case anything happened to him. They live in a beautiful home in a quiet and clean neighborhood near Sacramento. They had lived in San Jose for decades before they decided to downsize and move to a more affordable community. They have one adult son who is living a comfortable life of his own, out of state.

I'm very excited for Mr. and Mrs. M. When we talked on New Year's Eve, I could hear in each of their voices the joy they had knowing their mortgage payments were done, in addition to the sizable deposit in their bank account. One of the special memories I have of my new friends is the last time I visited them. After spending 30 or 40 minutes with them, they each walked me out, stood on the porch, arms around each other and waved to me as I drove off. Mr. M and I have a standing golf date once the weather improves.

Congratulations Mr. and Mrs. M! And Happy New Year!

Reverse Mortgage vs. Foreclosure

Corey Matelli (Reverse Mortgage Company) — Thu, 27 Dec 2007 12:14:45 -0600

Over two months ago, I wrote an article about how reverse mortgage can be a tremendous solution for seniors in avoiding foreclosure.

This week, The Wall Street Journal has a story of a 62 year old woman in Atlanta, GA who did just that. Her mortgage payment took up 70% of her monthly income from her Social Security and pension. She intended to get a job, but complications from her diabetes and back surgery made that impossible. The WSJ article goes on to say that elder law and other attorneys are seeking reverse mortgages for their clients as a viable weapon against foreclosure.

Yesterday another story hit about a town in New York which would "let" seniors work part-time jobs for $7 per hour to help them pay their property taxes. The plan is also in place in Colorado, Massachusetts, South Carolina, among other states.

Are you kidding me??

"People shouldn't have to sell their house, move away to a place with less taxes, leave behind their family and friends," said Town Supervisor Paul Feiner.

Judging by the fact that he mentioned them paying taxes elsewhere ahead of leaving behind their loved ones, I'd say he's more concerned with the lost tax revenue.

Anyway, I do agree with the Supervisor in that people should not be forced to leave their home because of money issues. They shouldn't be forced to take on jobs, and I'm willing to gamble that they're not very glamorous ones, at that. If they want to move, hey, I'll help load up the truck. If they want a job, God bless 'em. Many seniors, as illustrated in these two stories, face enough obstacles in their lives. If having more money in their pocket helps them face and overcome these obstacles, a reverse mortgage may very well be just the ticket.

Visiting The Parents

Corey Matelli (Reverse Mortgage Company) — Wed, 26 Dec 2007 17:36:20 -0600

Like millions of people around the world, I visited my parents over the past several days for Christmas. I am fortunate in that they only live 2 hours away, so I get to see them relatively often. Many Americans only see their parents once a year, or maybe every other year as they alternate between in-laws and their own parents.

When you don't see your parents often, it can be startling to see what aging has done to them. Many adult children don't recognize their parents' need until they see it face-to-face.

Many in-home care providers see a spike in interest during the month of January after adult children return home realizing their parents need some assistance at home. For many seniors, all they need is a little something to help them lead more independent, fulfulling lives. In many cases, the adult children, the "sandwich generation", have their own financial responsibilities and can't afford to financially support their parents. This might be a good time to look into a reverse mortgage to unlock that equity, and thus, unlock your parents' independence. In other cases, maybe more significant care and attention might be needed.

Below are some clear warning signs that intervention is needed.

1. Mail and bills are left to pile up. The simple act of opening and filing mail becomes overwhelming. Managing a checking account also can become too much for a parent to handle.

2. The house is cluttered or unkempt. This is especially troubling if a parent has always been neat and orderly.

3. Food in the refrigerator is uneaten or spoiled. Shopping, cooking and cleaning become too much trouble. A parent might eat just enough to get by, but suffer nutritionally. Losing weight can be another sign that a parent is not eating a nutritious diet.

4. There are signs of scorching on the bottoms of pots and pans. A result of short-term memory loss, this is a dangerous sign that parents are forgetting about pots left on the stove, causing a fire hazard and threatening both the individual’s and the surrounding neighbors’ safety.

5. The parent wears the same clothing over and over again and has other personal hygiene issues. Doing laundry has become physically challenging, particularly if the washing machine is in the basement. Or there may be a fear of falling in the tub or shower.

6. Doctor’s appointments are missed. Sometimes this is simply a product of not having transportation and not knowing how to access ride options.

7. The parent makes repeated phone calls at odd hours. When a parent telephones friends or family at odd hours, it may be a sign of memory loss or a cry for help, a sign of depression or isolation. Arranging for a daily check-in phone call, a regular volunteer visitor or getting involved with a local senior center could make all the difference.

8. The parent forgets to take medication. A sign of short-term memory loss or depression, this isn’t just a quality-of-life issue but a real risk factor.

9. The parent shows inappropriate behavior, clothing or speech. You may hear about this from a neighbor, someone who has noticed that your parent is not dressing appropriately for the weather, for instance. That’s a sign that he or she might be confused.

10. The parent shows symptoms of depression. A frequent problem for many older people who feel isolated and alone, like a prisoner in their own homes, depression causes marked changes in behavior and routine. Feelings of hopelessness or despair, lack of interest in once pleasurable activities, crying, listlessness and not wanting to get dressed can all be indications of a problem.

Source: Senior Citizen’s Guide, a resource guide and directory

The Rest of the Story

Corey Matelli (Reverse Mortgage Company) — Wed, 05 Dec 2007 13:32:30 -0600

As I have delved into the wonderful world of blogging and daily browsing of the internet for all things reverse mortgage, I have realized that there is a never ending parade of people disseminating misinformation and half-truths about reverse mortgage. These are commonly written by people who seem rather passionate against reverse mortgages in general. I have come to the conclusion that such folks are either;

opposed to reverse mortgages because they don't know the truth, or...
spreading untruths because they're opposed to reverse mortgages

Either way, these people sure make my days spicy! I enjoy reading these articles and sharing the truth they have left out, or sharing with them real life stories which blow their theories out of the water. The problem is that some people have been educated right out of their humanity. There is very little compassion or willingness to understand what is often times more important to people. To them, it's all about what looks good on paper or a computer screen.

The element of my job which I love the most is getting to know my clients. Learning what is important to them. Listening to their stories. Everyone has a story. Seniors have a lot of them. If these skeptics would sit down and listen, I think their tunes would change. You can learn more from listening, I have found.

Go figure.

I love my job. I love my clients. I love those who I have met who decided a reverse mortgage isn't right for them at this time. Seniors are wonderful. Even when they decide now isn't the time, I sure am richer for having met them and spending time with them.

Do you have a story to share? I'd love to listen to it.

Social Security "Increase"

Corey Matelli (Reverse Mortgage Company) — Wed, 17 Oct 2007 15:33:21 -0500

You all probably have already read this, but for the sake of context:

Social Security Going Up by 2.3 Percent

By MARTIN CRUTSINGER, AP Economics Writer

Wednesday, October 17, 2007

(10-17) 08:49 PDT WASHINGTON, (AP) --

Come January, Social Security benefits for nearly 50 million Americans are going up 2.3 percent, the smallest increase in four years. It will mean an extra $24 per month in the average check, the government announced Wednesday.

The cost of living adjustment means that the monthly benefit for the typical retired worker in 2008 will go from $1,055 currently to $1,079 next year.

The adjustment, announced by the Social Security Administration, will go to more than 54 million Americans. Nearly 50 million receive Social Security benefits and the rest get Supplemental Security Income payments aimed at helping the poor.

The 2.3 percent increase is the smallest since a 2.1 percent rise in 2004. It compares to an increase of 3.3 percent last year and a jump of 4.1 percent in 2006, which had been the biggest advance in 15 years.

The COLA is based on the change in consumer prices from the July-September quarter of this year compared to the same period last year. Benefit payments have been tied to inflation since 1975.

Advocacy groups for the elderly said that the small increase announced Wednesday underscored the need to revamp the cost-of-living adjustment to better reflect prices paid by retired people, including the money they spend on health care.

"Social Security is supposed to protect seniors in need — but with 5 million seniors below the poverty line, it's clear the system is failing them," said Shannon Benton, executive director for the league.

The Senior Citizens League said a study it has done showed that in eight key spending areas, people over the age of 65 have lost 40 percent of their purchasing power since 2000, reflecting such factors as a doubling in the price of gasoline and home heating oil over that period.

This news can be very scary, or even depressing, to many who are already having difficulty meeting the financial burdens of increased property taxes, insurance, health care, gas prices and so forth. Yet so many are living in relative gold mines of equity which can relieve so much stress.

Reverse mortgages may be just the answer for the people who would find this news the most troublesome. Obviously, the government isn't the answer. Even if the senior thinks selling their home is the answer, we all know now is not the best time to consider that option. Our homes don't only protect us from the elements related to weather conditions, but also the storms of life.

Be A Professional Burden Bearer

Corey Matelli (Reverse Mortgage Company) — Tue, 09 Oct 2007 19:27:46 -0500

Stress

A lecturer when explaining stress management to an audience, Raised a glass of water and asked "How heavy is this glass of water?"
Answers called out ranged from 20g to 500g.
The lecturer replied, "The absolute weight doesn't matter. It depends on how long you try to hold it. If I hold it for a minute, that's not a problem.
If I hold it for an hour, I'll have an ache in my right arm.
If I hold it for a day, you'll have to call an ambulance.
In each case, it's the same weight, but the longer I hold it, the heavier it becomes."
He continued, "And that's the way it is with stress management. If we carry our burdens all the time, sooner or later, As the burden becomes increasingly heavy, We won't be able to carry on."

I received this in an email from a friend today. How true is this? What we were able to handle so easily a year ago, 5 years ago, 20 years ago is now a real burden. There is no shame in that whatsoever. In times like this, it's important to have people you can count on to help carry our burdens. Many seniors find themselves feeling the weight of financial burdens. What they need is a friend who will come beside them and help them carry the burden. I work in the field of reverse mortgage. While a reverse mortgage may be just the ticket, it's more important that they see a friend in us. We have such an incredible calling to be Jesus to someone who genuinely needs to see Him and experience Him, but might not otherwise come to a church. Be willing to listen to what someone else is going through. You just may be the one God sent to help them bear their burden today.

Is The Glass Half Full, Or Half Empty? Maybe It Doesn't Matter

Corey Matelli (Reverse Mortgage Company) — Tue, 09 Oct 2007 19:19:06 -0500

Stress

A lecturer when explaining stress management to an audience, Raised a glass of water and asked "How heavy is this glass of water?" Answers called out ranged from 20g to 500g. The lecturer replied, "The absolute weight doesn't matter. It depends on how long you try to hold it. If I hold it for a minute, that's not a problem. If I hold it for an hour, I'll have an ache in my right arm. If I hold it for a day, you'll have to call an ambulance. In each case, it's the same weight, but the longer I hold it, the heavier it becomes." He continued, "And that's the way it is with stress management. If we carry our burdens all the time, sooner or later, As the burden becomes increasingly heavy, We won't be able to carry on."

I received this in an email from a friend today. How true is this? What we were able to handle so easily a year ago, 5 years ago, 20 years ago is now a real burden. There is no shame in that whatsoever. In times like this, it's important to have people you can count on to help carry our burdens. Many seniors find themselves feeling the weight of financial burdens. What they need is a friend who will come beside them and help them carry the burden. While a reverse mortgage may be just the ticket, it's more important that they see a friend in us. What a great opportunity we have to be a friend in need, and a friend in deed.