Renewed Interest In Reverse Mortgages

2/27/2009

posted by N. Sioris

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As the economy continues to unravel on every front, more retirees are turning to Reverse Mortgages to sustain their lifestyle and provide the needed cash to weather the financial storm. Even people that thought they planned well and have diversified portfolios, are having to re-think their retirement strategies.

Many seniors really don't want to touch their investments right now, and yet many cannot wait years for those investments to recover in order to draw on them. So while retirees watch in dismay as both their home values and their investments plunge to new depths, many are turning to reverse mortgages to get through these troubled times.


HECM Reverse Mortgages - New Lending Limit - $625,500.

A ray of hope emerged earlier this week when HUD announced the immediate implementation of the new higher National loan limit for FHA insured HECM reverse mortgages. The previous loan limit was $417,000. As part of the Economic Stimulus package a TEMPORARY increase for FHA/HECM reverse mortgages for the balance of 2009, is now $625,500.

The higher reverse mortgage loan limit is particularly beneficial for people that have homes with a value higher than $417,000. With the new $625,500. lending limit they can now access a much higher amount of equity.


Virtually No Other Jumbo Reverse Mortgages Available

Additionally, since the credit crunch started last fall, virtually all of the proprietary "Jumbo" reverse mortgage products that had been offered previously have dried up. The absence of any jumbo reverse mortgage loan products, left many homeowners with high value homes, disappointed by the small loan amount offered by FHA versus their equity and home value.

If you are someone that never thought you would need a reverse mortgage before or if you have a high value home and have previously been disappointed by the loan amount offered, you may want to take a second look at this option.

Request a no obligation reverse mortgage quote today!

The Anatomy Of The Credit Crisis

2/24/2009

posted by N. Sioris

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Anyone interested in a simplified visual explanation of the very complicated process that took place in the financial markets that lead us to the disasterous place that we all find ourselves in today, should take a couple of minutes to view these excellent videos by Jonathan Jarvis, a graduate student at the Art Center College of Design in Pasadena, California. What an awesome job he did with a very complex subject!

Standard of Living Will Permanently Change As a Result of Financial Meltdown

2/23/2009

posted by N. Sioris

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Check out these two video clips from Yahoo finance. Howard Davidowitz, retail industry consultant and chairman of Davidowitz and Associates speaks bluntly about the state of our standard of living. At the most basic level, he says that Americans had better get used to a permanent change in life style and standard of living.

He says "The end of rampant consumerism is ultimately a good thing. But the unraveling of an economy built on debt-fueled spending will be painful for years to come." He foresees higher savings rates and people trading down in both the goods and services they buy - as well as their aspirations.

Reverse Mortgage Could Ease Pain For Bernie Madoff Victims

2/20/2009

posted by N. Sioris

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Each day that goes by we hear more tragic stories of those that have been vicimized by Bernard Madoff - and his $50 Billion Ponzi Scheme that he allegedly mastermined.

The video clip below is one such heartbreaking tale of Ian and Terry Thiermann from California. They lost their entire life savings of seven hundred thousand dollars. Now at age 90, Ian Thiermann has been forced to go back to work. Fortunately, a neighborhood grocery store "created" a job for him as a greeter.


Could A Reverse Mortgage Help Them?

In the video clip you will hear that he and his wife still have a mortgage. With their sudden loss of fortune, one wonders if they have thought about the possibility of taking out a reverse mortgage. A reverse mortgage loan would eliminate their current mortgage balance and leave them mortgage payment free for as long as one or both of them continue to live in their home.

I hope they decide to consider a reverse mortgage as partial help with their monthly budget. It could relieve some financial stress.

Reverse Mortgage Loan Limit Increased To $625,500.

2/18/2009

posted by N. Sioris

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President Obama's $787 Billion economic stimulus package included a new higher national FHA - HECM Reverse Mortgage loan limit of $625,500. The previous loan limit was $417,000. nationally except in HI, Alaska and Puerto Rico.

The new higher loan limit of $625,500. is particularly good news for several reasons:

1. Due to the current financial meltdown on Wall Street there are no longer any lenders in the market that are willing to loan "Jumbo" loan amounts on a reverse mortgage. That left anyone with a high value home - (for example $450,000. or higher,) access to such a small amount of their equity, that it was hardly worth their while to even bother with an FHA/HECM reverse mortgage.

2. The new higher loan limit of $625,500. will now offer anyone with a home value of approximately $417,000. or higher access to substantially more money than under the previous limit.


Two Caveats To The New Lending Limit:

1. Under the new law, the higher loan limit will only be available for loans originated for the balance of 2009. (It is possible that Congress could request an extension of this time frame, but as of now, it will expire at the end of the year.)

2. Lenders will not be able to process or close loans based upon the higher loan limit until HUD issues an official "Mortgagee Letter" allowing the implementation of the new guidelines as set forth in President Obama's Stimulus Package.

As a side note, one would hope that since there is a possibility that the higher lending limit will permanently expire at the end of this year, that HUD will act quickly to get this provision implemented. After all it is not called a "Stimulus" package for nothing.

If you are interested in receiving a reverse mortgage loan estimate based upon the new higher lending limit, click here or call our offices toll free at: 1-888-269-1098

"Inside The Meltdown" Frontline Details The Financial Collapse

2/17/2009

posted by N. Sioris

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Watch this fascinating expose of what went on behind the scenes in Washington and Wall Street as prestigious investment banks and AIG cascade toward the most severe financial meltdown since the Great Depression. PBS's Frontline details the historic avalanche that took place at lightening speed.

Will The Pension Benefit Guaranty Corp. Be Next In Line For A Bailout?

2/17/2009

posted by N. Sioris

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The Pension Benefit Guaranty Corporation was created by Congress in 1974. Its purpose is to guarantee the retirement security of workers covered by defined-benefit pension plans. It insures more than 29,000 employer-sponsored benefit pension plans and the pensions of 44 million workers and retirees.

The deepening recession spells trouble for PBGC, which all ready has an $11 Billion deficit that more than likely will grow larger as Corporate America continues to falter through the worst economic crisis since the Great Depression. As companies report shortfalls in their pension funds, it is certain that The Pension Benefit Guaranty Corporation will be forced to take over the pension plans of a rising number of bankrupt businesses.

The future financial health of PBGC is difficult to forecast. It hinges on interest rates, the length of the recession and the agency's ability to successfully "play" the market with its own investment portfolio.

Currently the agency has $63 Billion in assets. However, it is obligated to spend $74 Billion on pension benefits in the coming years. PBGC might have time to rebound, but over the long term it could become insolvent and require a bailout.

The agency gets its money from premiums paid by companies that sponsor the pension plans along with revenue that it earns from its investments. The corporation's balance sheet has taken heavy hits in recent years. Nine of the ten largest pension plan terminations in the agency's history, including United Airlines, Bethlehem Steel and Kaiser Aluminum, have taken place since 2001.

When a pension plan is terminated, the agency takes over and pays the benefits to the retired workers. However, the retirees may not get the full amount that was promised by their company. The maximum guaranteed amount from the PBGC is currently $54,000 per year for someone that is retiring at age 65.

Some pension experts shrug off the agency's $11 Billion deficit. They note that the 35 year old corporation has operated at a deficit for most of its existence. They say the agency has many years to recoup its losses and fulfill its obligations to pensioners.

But to those "experts" I say what President Obama and many folks in Congress have been saying recently, and that is: "These are uncharted waters that we are in today." Are we really able to predict the future based upon the past?

60 Minutes Exposes World Savings' Lending Practices That Ultimately Brought Down Wachovia

2/15/2009

posted by N. Sioris

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Kudos to Scott Pelley and 60 Minutes for another great investigative report about the culprits that brought down the U.S. economy and some of the largest banks in America.

How did the mortgage industry destroy itself and set off an economic collapse that ruined the finances of millions of Americans? Executives tend to hold themselves blameless, saying that no one could have seen the disaster coming.

Well, judge for yourself after you hear the story of Paul Bishop, who worked at the nation's second largest savings and loan. World Savings Bank was among the industry's most admired mortgage lenders. But Bishop says the kind of lending practices he saw were leading to a world of trouble that would ultimately result in billions in losses and a federal investigation.

"Three years before the housing market crash, Paul Bishop says he warned his superiors at World Savings that many of the mortgages they were granting were misleading and predatory.

Home Prices To Plunge Another 11 Percent This Year

2/11/2009

posted by N. Sioris

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According to Mark Zandi, Chief Economist and co-founder of Moody's Economy.com, housing prices will dip another 11 percent before bottoming out at the end of 2009. If Zandi is right about when we will hit the bottom, then by that time the slide will have cut home values by 36 percent nationally. Of course some areas will have been hit by much larger losses. For example, Southeast Florida and parts of California are expected to realize losses of more than 50 percent.

Zandi qualified his statement by saying; "Presuming we see strong action by policymakers to help support the economy and the housing market, prices will begin to recover by the end of this year."

Demand for new and existing homes began to fall in 2005, marking the end of a five year U.S. housing boom fueled in part by easy credit for subprime borrowers. Existing home prices tumbled from an average high of $230,200. in July 2006 to $175,400. in December, 2008 according to the National Association of Realtors.

In another forecast this week from a Houston based housing market researcher, Metrostudy; housing starts are estimated to plunge 47 percent to 483,000 in 2009.

Retirees Are Battered By $12 Billion Loss of Dividend Payouts

2/10/2009

posted by N. Sioris

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The most severe decline in dividend income is expected to take $12 Billion out the pockets of shareholders in the coming months. Dividends are being cut at the fastest pace in 50 years. Many of the dividend cuts are coming from U.S. companies whose investors have been relying on dividends to provide income during this recession.

Retirees that have all ready been battered by steep market declines are now facing the loss of cash flow that many rely heavily upon to supplement their annual cash flow.

All ready this year, seven companies in the Standard & Poor's 500 Index have decreased their dividends. If the trend continues, this will be the worst year for dividend cuts since 1958, when annual payments fell 8.4 percent, according to S&P.

Of the seven companies that said they will cut dividends in 2009, six are in the financial industry and all reduced their payouts by at least 50 percent. The largest decrease has come from Bank of America, which said it will slash its dividend from $1.28 a share annually down to 4 cents a share. That alone, wiped out $6.2 billion in annual cash payments to investors.


Could It Be Worse Than The 50 Year Record?

Howard Silverblatt, senior index analyst at S&P, is quoted as saying; "It is easy to say this is going to be the worst in 50 years, but the bigger question is whether it is going to be much worse than that."

One solution for retirees that own a home with little or no mortgage balance is a reverse mortgage. A reverse mortgage allows seniors age 62 and older to tap home equity in order to supplement retirement income. No mortgage repayment is required as long as the home is occupied by the senior. Their are no income or credit qualifications, and the money is non-taxable.

Request A Free Reverse Mortgage Quote Today!

AARP Warns Seniors About Misleading Mail Scams

2/09/2009

posted by N. Sioris

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The latest scam alert from AARP was published in AARP Bulletin Today. AARP wants seniors to be aware of deceptive and misleading advertising mailers being sent to older homeowners. The unsolicited mailings are disguised to look like they are government sponsored or from a government agency.

The article goes on to give an example of a Reverse Mortgage mailer that masqueraded as an official government offering. The post card was sent from "National Data Research." (sounds pretty official doesn't it?) The headline read: "New Government Program for Seniors Over 62." It then goes on to say: "It is your Legal Right as a United States Taxpayer to receive all the information available to you."

According to AARP, what was not disclosed in the mailer is that it's real purpose is to collect senior's contact information so it can be sold to reverse mortgage vendors, which often times leads to more unwanted mail and telephone solicitations.

Although the current tough economic times make everyone feel a bit less secure than usual, try not to fall victim to over hyped, pie in the sky offers that after first blush are not at all what they seem to be. If you suspect an offering to be other than what it appears to be, you can always check out a bonafide government entity online.

You can also check The Privacy Rights Clearinghouse website. It offers tips on how to remove yourself from mailing lists. The Federal Trade Commission offers advice on how to recognize phone scams.


Read the complete AARP Scam Alert Article Here.

AARP Offers "Real Relief" - An Online Resource

2/05/2009

posted by N. Sioris

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As retirement accounts continue to shrink, job losses accelerate, families lose their homes, and the cost of food and health care skyrocket, AARP and the AARP Foundation have launched a new online resource site called "Real Relief."

Real Relief was created to assist older Americans weather this unprecedented economic storm. This one-stop online site emphasizes jobs and job training, and
financial issues like money management and investment help.

According to the Department of Labor, 4.9 percent of age 55 and older workers were unemployed last month. This is a 58 percent increase from one year ago and is the highest figure since 1983.

While workers of all ages are facing layoffs as a result of the worst economic downturn in decades, those workers age 50 and older are especially vulnerable. And for those that have all ready retired, the economy could have a serious impact on their investments and retirement savings, jeopardizing their financial security in future years.

A few of the resources that can be found at the AARP Real Relief site are:

• Tools and resources for retirees who may be facing economic challenges.

• Tips on protecting your money - avoiding scams - choose a financial planner

• Help with taxes and money management: Free tax preparation services

• Public benefits and public assistance programs

• Tips of job seekers - Job search strategies

• Money saving tips - where and how to cut back on expenses

Market Meltdown Illustrates The Importance Of Retirement Planning

2/04/2009

posted by N. Sioris

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If there is one thing we have all learned during the last 6 to 12 months, it is how crucial solid retirement strategies are for our financial well being over the long term. Diversification, risk management, and age appropriate investments are just a few of the lessons that we should all take away from this economic disaster. Below are a couple of interesting stories that I notices over the last few days, that speak to this topic.


Wall Street Crushes Retirement Plans For Former Economics Journalist

It seems that no one is immune from the effects of the devastation taking place on Wall Street and Main Street.
A former economics journalist and recent retiree, Robert Lyle was caught short with too much of his savings in stocks. Now his retirement income is much less than what he had planned for. He wishes he had an old-fashioned pension instead of a 401(k).

Listen to his story at this NPR link.



Helping Mom With Retirement

The issue of what adult children can and should do to help assure that their parents are financially prepared for retirement is one that's getting more attention as lifespans increase and we become increasingly reliant on our personal savings to fund our post-career lives.

If a parent isn't on the ball with their own retirement planning, it may be time for adult kids to step in.

Indeed, a global study of inter-generational issues released early last year by The Hartford found that more than a quarter of Americans 45 and older say they are currently caring for both children and parents or older relatives. Given how badly the retirement savings of many retirees have been hit by the market meltdown, I wouldn't be surprised if that number has already increased or will over the next few years.

Read the complete CNN Money.com article here.

Financial Tsunami Devastates Retirees

2/03/2009

posted by N. Sioris

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A recent publication in AARP Bulletin Today, entitled "Tough Times For Retirees," describes the stark reality that many older Americans are facing as they witness their retirement savings being swept away by the financial tsunami that has devastated Wall Street and Main Street.

Millions of retired Americans are facing the prospect of getting by without the savings cushion they thought would be there for them in their old age. We have just witnessed the worst stock market crash since the Great Depression, and many retirees were not prepared for such a catastrophic event.

One retiree that was profiled in the article said: "That in the three months between August 31 and November 30, 2008, the market downturn reduced the value of his investments by about 32 percent." He went on to say that "I'm devastated. That is all the money I have left in the whole world. I don't know what to do."

Not Just A Financial Trauma

For retirees like him the 2008 market meltdown has not just been a financial crisis but an emotional trauma as well. Older adults have described feelings of embarrassment due to the possibility they will not have enough money to make it in retirement. Some report that they will be forced to rely on their children for support, something they want to avoid because they hate the thought of burdening their families.

The stock market decline has not only harmed retirees, but millions of boomers that were on the verge of retirement. Many workers have decided not to retire as planned. An AARP survey of workers age 50 and over showed that 59 percent said they were likely to postpone retirement.

The number of dollars lost in the market decline has been mind-boggling. According to The Investment Company Institute, as of October 31, 2008, the assets of the 4,800 stock funds had declined by $2.59 Trillion. $2.39 Trillion was attributable to market-related losses. The other $195 Billion decline represented the amount that investors pulled out of the funds.


A Reverse Mortgage Could Help

If you find your situation to be similar to those outlined in the AARP Bulletin Today article, you may wish to consider tapping into home equity through the use of a reverse mortgage. A reverse mortgage can supplement your retirement income, allow you to remain living in your home as the owner, and never make a payment on the reverse mortgage loan as long as you live in the home.

Request a reverse mortgage loan quote today!

A Reverse Mortgage Can Help Seniors Stay At Home

2/02/2009

posted by N. Sioris

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Aging in their own homes is what most senior citizens desire. William Novelli, the CEO of AARP said "Seniors want to live well and they want to live comfortably and they want to live in familiar surroundings." A reverse mortgage is one way that some seniors have been able to continue living in their own homes on their own terms.

With the current financial crisis hitting every city and every state, many government programs and agencies aimed at overseeing nursing homes and assisted living facilities to make sure elder abuse is not occurring have either lost funding all together or have had their funds cut drastically.

Consequently, aging in place in their own homes is becoming not only the preferred choice for seniors but the most desirable from a government funding point of view also. Instead of looking to family or the government for care-giving assistance, most people would prefer to take care of themselves.

Many seniors are using the proceeds of a reverse mortgage to make the necessary safety improvements to their homes, in order to be able to safely remain living independently. Home modifications and aids can be as simple as grab bars and elevated dishwashers to the more complicated like walk-in bathtubs, wheelchair ramps and motorized scooters.

Age and home equity are the primary keys to successfully being able to obtain a reverse mortgage. With enough equity, usually about 40 to 50 percent, seniors can stay in their home indefinitely - without any repayment of the reverse mortgage loan.

See if you qualify for a reverse mortgage today!