News Release from the National Reverse Mortgage Lenders Association
May 10, 2001
FOR IMMEDIATE RELEASE
Contact: Glenn Petherick, Director of Communications,
Reposted by Ted Lewicki of Pillar Financial Corporation
Seniors Discover New Health Care Financing Options in Reverse Mortgages
- Free, New Consumer Guide Available -
Washington, DC - Paying for health care has become an important issue for older Americans and their adult children. As medical costs continue to rise for prescription drugs, in-home care, and physical rehabilitation, seniors are having to shoulder a larger share of the financial burden or turn to their children for help.
Fortunately, many seniors are discovering a relatively new solution for covering health care costs. It's a reverse mortgage, a unique loan that enables senior homeowners to convert part of the equity in their homes into income without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. Funds obtained from the reverse mortgage are tax-free.
Reverse mortgages have already helped out seniors like Dorothy Rogers of Hampton, NH, and William Ellis of Vancouver,WA, whose stories are profiled in a new booklet offered free from the nonprofit National Reverse Mortgage Lenders Association in Washington, DC. The booklet, called Using Reverse Mortgages for Health Care, may be obtained by contacting NRMLA (toll-free 1-866-264-4466, 202-939-1792, and asking for the health-care guide.
After her husband passed away, Ms. Rogers used a reverse mortgage to help make ends meet. "I had a horrendous time paying for things," she said. "Every time I went to the grocery store, I'd have to choose between prescription drugs or food. In the end, what I was getting from Social Security was going almost entirely to medicine. I thank God every day that I got a reverse mortgage."
When Mr. Ellis' wife, Beulah Marie, suffered a debilitating stroke, they decided to build a first-floor bedroom in their house to make her more comfortable. "I didn't want to get another mortgage because that would have meant making a monthly payment, so the next logical step was to get a reverse mortgage," commented Mr. Ellis. "The reverse mortgage really helped out."
"We're hearing more stories every month about how reverse mortgages are helping seniors live more comfortably and maintain control of their financial lives," commented Peter Bell, president of the National Reverse Mortgage Lenders Association. "In a very short time, we expect that the reverse mortgage will gain recognition as an important personal financial management tool due to its versatility and the powerful impact it can have on seniors' lives."
Borrowers can choose to receive the funds from a reverse mortgage as a lump sum, monthly income (for up to life or as long as they occupy the house), line of credit, or a combination of monthly income and line of credit. Borrowers can use the funds any way they wish - for home repairs and improvements, medical costs, in-home care, education, or supplemental retirement income. Borrowers make no monthly payments on a reverse mortgage during its term. The loan becomes repayable when the borrower sells the home or permanently moves out. In addition, the repayment amount can't exceed the value of the home.
Seniors can use funds from a reverse mortgage to pay for a variety of health-care related expenses, including:
- In-home care;
- Prescription drugs and other health-related expenses that may not be covered by Medicare;
- Home modifications that make the home safer and more comfortable for senior living;
- Comfort-oriented services, such as grocery delivery, meal delivery, or transportation; and,
- Long-term care insurance and Medigap insurance.
To educate consumers about reverse mortgages, NRMLA has created a second booklet called The NRMLA Guide to Reverse Mortgages. This free booklet answers frequently asked questions, provides detailed information on the loan origination process, and includes a Code of Conduct for lenders, so that consumers can know their rights when working with a lender. The booklet may be obtained by calling NRMLA at 1-866-264-4466 (toll-free) or 202-939-1792, and asking for the Consumer Guide.
Reverse mortgages are originated largely by private lenders. The most popular type of reverse mortgage product is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA), an arm of the U.S. Department of Housing and Urban Development (HUD). More than 40,000 HECMs have been made since 1989.
NRMLA is a nonprofit trade association, based in Washington, DC, whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners, while educating both its members and consumers about the varied applications of this unique loan. Members sign a Code of Conduct pledging to abide by guidelines that assure fair, ethical, and respectful practices in offering and making reverse mortgages to seniors. For more information on reverse mortgages or for a list of lenders in each state who have pledged to abide by NRMLA's Code of Conduct.
Ted Lewicki, Pillar Financial Corporation, offers a unique, Senior Care Package, a financial package specially designed for seniors, according to their individual needs. http://www.pillarmortgage.com
Pillar Financial Corporation
3129 Dixie Hwy
Waterford, MI 48328
Servicing: Oakland County, Addison Township, Auburn Hills, Berkley, Beverly Hills, Bingham Farms, Birmingham, Bloomfield Township, Clawson, Commerce Township, Farmington, Farmington Hills, Ferndale, Franklin, Hazel Park, Highland Township, Holly, Holly Township, Huntington Woods, Independence Township, Keego Harbor, Lathrup Village, Lyon Township, Madison Heights, Milford, Milford Township, Northville, Novi, Oak Park, Oakland Township, Orchard Lake, Orion Township, Oxford Township, Pleasant Ridge, Pontiac, Rochester, Rochester Hills, Royal Oak,
Southfield, South Lyon, Troy, Walled Lake, Waterford Township, West Bloomfield Township, White Lake Township, Wixom