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SURVEY -MORE THAN 50% WOULD RECOMMEND LOAN TO FAMILY, FRIENDS BY TOM KELLY -11/16/2011 - INMAN NEWS™ The leader of Boston-based Marttila Strategies, a public-opinion research firm, has worked for a wide variety of elected officials in all regions of the United States, including V.P. Joe Biden, former presidential candidate John Kerry, Massachusetts Gov. Deval Patrick, and other members of the U.S. House and Senate.
The company also was employed to measure and promote numerous successful ballot issues around the country.But seldom has his research produced a more satisfied contingent as those his company polled regarding their experiences with reverse mortgages. While the financial product received a black eye for early versions that included an equity share with the lender, Marttila Strategies' recent survey revealed that today's seniors are extremely happy with their reverse loans.
"Rarely does a research program provide such decisive results as this one has," Marttila told Lew Sichelman of National Mortgage News. "These attitudes belie the negative accounts that have been widely reported in the media."
Some of the recent negativity surrounding reverses has come from adult children who have seen their folks swayed into buying questionable annuities with their reverse mortgage funds. While reverse mortgages had a reputation for sky-high costs, rates and fees have come down. Fixed-rate programs are now in place, and counseling is mandatory before any loan can be processed.
Reverse mortgages are available to seniors aged 62 and older who have significant home equity. They are designed to enable elderly homeowners to borrow against the equity in their homes without having to make monthly payments, as is required with a traditional "forward" mortgage or home equity loan. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells or passes away.
Borrowers may draw down funds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments for as long as they continue to live in the home. Homeowners also have used a combination of those plans, for example a lump sum at closing with an ongoing credit line.
When the house is sold, or the last remaining borrower dies or moves out of the home, the loan amount plus the accrued interest is repaid. The borrower can't owe more than the value of the home.
Marttila Strategies issued three national surveys and conducted six focus groups to determine how 3 different cohorts felt about reverse mortgages.
The groups included adult children with at least one surviving parent who indicated that their parents' mortgage balance was less than half what the house was worth; seniors who owe less than 50 % of their home's equity but do not hold reverse mortgages; and owners who have had reverse mortgage for at least 2years.
Presented with a 10-point scale, with 10 representing the maximum level of satisfaction, 43 percent of the respondents gave their mortgages the highest rating possible, a 10. 32% percent graded their loans at between 6 and 9.
In addition, more than half would "definitely" recommend a reverse mortgage to another family member or friend, and 28 % more would "probably" do so. Only 15 % said they definitely would not recommend the loan.
The data also revealed four salient facts: •Seniors (and their adult children) are deeply worried about the current economic situation, and the consistent sentiment is that the nation is facing "tougher times" ahead.
•An overwhelming majority of seniors think that their best financial strategy is for them to pay their bills and not worry about leaving an inheritance. Their adult children agreed. •Seniors want to stay in their homes for the rest of their lives.
•More than 40% of the respondents worry that they will not have enough money in the future to lead the life they would want.
An example of the last point was recently shown in Idaho. AARP reported that there was a 93 % increase in just 9 years in the number of those 50 years old and older taking out, or planning to take out, a reverse mortgage. Nearly 7 % of this group lives in poverty, the third-highest rate in the Western region.
According to the U.S. Census, Idaho is the 39th most populated state but it is seventh for the percentage of people 50 and older who have taken out, or are planning to take out, a reverse mortgage. It's time to recognize that a majority of seniors are pleased with their reverse mortgages. Can you say the same about your friends with conventional, "forward" loans?

Economic Crisis Leads to More Children Living with Grandparents, Up 64%

The number of children living with their grandparents has shot up 64% to 7.8 million in the past 18 years, a new U.S. Census Bureau report shows.

This is a large increase from 1991, when 4.7 million children lived with a grandparent, and AARP reports it could be a result of the economic crisis.

Most of these children living with their grandparents also live with at least one parent, at 76%, down only slightly from 1991′s 77%.

Demographically, white children have seen the biggest increase in living with grandparents, as the figure nearly doubled from 5% to 9%. However, there hasn’t been a huge shift for black and Hispanic children, whose percentages went from 15% and 12% in 1991, respectively, to 17% and 14%. NewImage

It seems that grandparents are a common substitute for kids who don’t live with their parents, as 64% of blacks, 55% of whites, and 61% of Hispanic children not living with parents live solely with grandparents. Asian children, on the other hand, only live with grandparents 35% of the time, when not living with parents.

A recent Gallup poll shows that caregiving often takes a physical toll on caregivers, with caregivers aged 65 or older scoring lower on a physical health index than non-caregivers of the same age.The full Census report can be viewed here.Written by Alyssa Gerace

Can a Retiree Get a Mortgage? By JUNE FLETCHER published online Wall Street Journal

Q. I want to buy a retirement home in North Carolina for $263,000. I am selling my home in New Jersey, where I have lived for many years. Although I could pay all cash for the home I'm buying, I'd prefer to take advantage of current low interest rates and not to tie up so much of my money in real estate. The problem is, I'm 69. Would anyone give me a mortgage at my age? And if they did, would I be foolish to take it?--Little Silver, N.J.

A. As long as you pass a lender's scrutiny in terms of income, debt-to-income, credit and all the other factors any loan applicant must meet, you should be able to get a mortgage.

In fact, any lender who refused you just because of your age would be guilty of violating the federal government's Equal Credit Opportunity Act. The act makes it illegal to discriminate against someone because of age, among other factors, provided that the applicant has the capacity to enter into a contract.

You also are eligible for any type of loan available, including conventional, Federal Housing Administration and Veterans Affairs, if you meet the program guidelines. Some of these loans require low or no down payments and no private mortgage insurance, which would maximize your available cash.

If you should die before the mortgage is paid off, the unpaid balance will become a lien that is tied to the property. Your heirs will have to either make the payments, sell the home to pay off the mortgage and any other liens, or refinance the loan.

Because you are older than 62 and have presumably amassed considerable equity in your current home, you also have another option, a reverse mortgage. The most popular of these loans is FHA's Home Equity Conversion Mortgage, or HECM. This program allows you to convert the equity in your home into cash. You access the money in a fixed monthly amount, a line of credit, or both. You can use the cash for whatever you want.

Thanks to the Housing and Economic Recovery Act of 2008, you may be able to purchase a new home and get a reverse mortgage in a single transaction, which will avoid the need for a second closing. Provided that you and the property you want to purchase qualify for the program, you won't have to pass any income or credit checks. And you will be able to roll closing costs into the mortgage.

There are some caveats. Among them: You will have to meet with a HECM counselor, who will talk about eligibility requirements and alternatives to the mortgage. You will have to pay cash for the difference between the total proceeds that you receive from the HECM and the sales price. You must own your current property outright or have a small mortgage balance. You can't be in arrears on any federal debt, and the home you buy has to be a primary home and a one-to-four unit property that meets FHA's minimum property requirements for health and safety.

If you are building a new home, construction has to be completed and you will need a certificate of occupancy. Also on the downside: Reverse mortgages can be expensive—overall, they tend to be more costly than traditional loans—and they will reduce the amount of equity you have in your home. Moreover, some consumer advocates are wary of them, and some banks have stopped making them.

I don't know enough about your financial situation to recommend what the best course of action is for you. But I can say that given the current state of the housing market, it will probably be years before you will see much appreciation on your new home. So whatever choice you make, I think you are right to free up at least some cash, and not sink it all in real estate.

Aging in place by Amara Grace. Aging in place. It’s a relatively new term for a very old concept: remaining in your own home as you grow older. Once upon a time, this wasn’t an issue. Extended families ensured that someone would be available to look after Grandma should the time come when she needed assistance.

Today, when even nuclear families are something of a novelty, the picture has radically shifted. While many people live healthy, active lives well into their 80s and 90s, and are able to care for themselves in their own homes, others require assistance at some stage due to circumstances such as poor health, an accident, or a similar need that precludes their ability to continue managing independently.

For people who are healthy and want to stay in their own home as they age, a reverse mortgage can be a key vehicle to make this a reality. The first step in generating reverse mortgage leads with this population is determining whether aging in place is in a senior’s best interest.

Here are seven guidelines you can use to help homeowners decide whether aging in place makes sense for them, and if so, whether to explore a reverse mortgage — or whether it would be prudent to consider other housing options. Aging in place can serve a senior well if:

They have sufficient equity in their home to qualify for a reverse mortgage (LTV)

Their health is generally good, and they’re mobile.

They have a network of local family, friends, and neighbors they can rely on.

They drive, and alternate transportation is readily accessible.

They live in a safe neighborhood.

Their home can be modified to address changing needs.

They’re outgoing, well connected, and able to reach out for social support.

But, what if one partner later becomes ill or requires assistance?

How Reverse Mortgages Can Help Seniors Age In Place, Part 2

Whether an older person is considering housing alternatives in the near term, or planning ahead with an eye on possible future needs, it makes good marketing sense for reverse mortgage professionals to become familiar with the range of senior living arrangements available, which will maximize your reverse mortgage marketing efforts.

Over the last decade, the options for senior housing have broadened as the older population has expanded, and more attention and resources have been redirected towards eldercare services.

While most people hope to be able to remain in their own home as they grow older (see How Reverse Mortgages Can Help Seniors Age In Place/Part 1), there may come a time when one partner needs more support. Of course, the good news to share is that, if a couple previously opted to remain in their home and initiated a reverse mortgage, the reverse mortgage will stay in effect as long as one member of the couple continues to live there.

The scope of choices for senior housing and residential care includes:

Villages. The phrase “it takes a village” once applied to raising children; with the explosion of the elder population, it’s the newest concept for the other end of the life spectrum. Villages enable seniors to remain in their own homes with access to specialized programs and services, such as household help or transportation, for an annual fee. Villages are an ideal target market for reverse mortgage leads.

Independent Living: Also known as a retirement community or senior housing, Independent Living refers to a residence in a community of seniors who dwell in small, easy-to-maintain, private apartments or houses within a cluster. The minimum age used to be 62; now “active adult communities” often welcome new residents at 55, when many people are still working. Typically, independent living communities provide assistance with outside maintenance, but no onsite medical care. These residents may also be an excellent resource for reverse mortgage marketing.

Assisted Living: Assisted Living refers to a residential facility for people who need some help with medication reminders or personal care. While there is daily contact with supervisory staff, medical care in an Assisted Living facility is minimal.

Nursing Home (Skilled Nursing Facility): People requiring extensive medical care (such as after a hospitalization) often move into a nursing home. This does not necessarily indicate a permanent decision to leave one’s primary residence, however. One 96-year-old woman needed 24-hour care after she fell and broke her hip, and was placed in a skilled nursing facility after leaving the hospital. When she was able to return home, she hired a full-time attendant. Since her time away from home was under one year, she retained her reverse mortgage with no penalties.

How Reverse Mortgages Can Help Seniors Age In Place, Part 3

Each year, more than 22,000 agencies nationwide provide home care services to over two million people, and as the population ages, these numbers will continue to grow.

Like the senior described in How Reverse Mortgages Can Help Seniors Age In Place/Part 2, who was able to return home after a serious accident because she hired a live-in attendant, a helping hand may be the deciding factor in whether a senior is able to age in place — and thus, whether they’re a reverse mortgage lead.

It’s helpful for reverse mortgage professionals to know what care is available, so you can suggest these options to seniors (or their loved ones) to help them remain at home as they age.

Here are 7 services that can make it easier to age in place:

Homemaker Services – Help with household maintenance: cooking, light cleaning, laundry, grocery shopping, and other household tasks.

Personal Care – Assistance with a variety of daily living activities such as bathing, dressing, grooming and eating.

Companion – From daily telephone calls from a “buddy,” to regular friendly visits.

Health Care – Skilled care that can include nursing visits, as well as speech, occupational, physical, or respiratory therapy.