The Real Deal New York

Posts Tagged ‘Reverse Mortgages’

  • co-op

    Mary Ann Rothman and Arthur Weinstein

    Elderly co-op owners, especially in New York City, have been pushing for the federal government to make them eligible for a reverse mortgage program for years.

    The Department of Housing and Urban Development started drafting regulations a few years ago that would have expanded the Home Equity Conversion Mortgage program to include co-ops. A HUD spokesperson said the agency opted not to make the change because the “F.H.A.’s single-family programs are based on loans being secured by real property and the co-op structure does not meet this basic requirement,” according to the New York Times. [more]

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  • reversemortgageSome lenders that allowed elderly homeowners to take out mortgages without requiring a payoff during their lifetime are now shaking down surviving relations to pay back the loans.

    Homeowners older than 62 years of age qualify for a reverse mortgage, which allows them to borrow against the value of their home without being required to pay it back until after their death or when selling the property. [more]

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  • Reverse mortgages tightening up

    October 16, 2013 10:30AM

    From the October issue: For homeowners who were looking to the federal government’s reverse mortgage program to supply lots of cash for their retirement years, here’s a heads-up: The pipeline just got narrower. [more]

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  • More seniors set to tap reverse mortgages

    September 27, 2013 08:50AM

    Reverse_Mortgages_Interest_Rates.jpg

    A greater proportion of homeowners over 65 are carrying mortgage debt compared with past generations, and the burden is making it harder for them to hold on to their homes. About 30 percent of all homeowners aged 70 and older are facing mortgage payments according to the Consumer Financial Protection Bureau. In 2001, just eight percent of owners aged 75 or older faced mortgage debt, according to the Federal Reserve’s 2010 Survey of Consumer Finances. [more]

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  • Call it the estate-devouring, nightmare home loan you hope to never encounter: A reverse mortgage with a base interest rate of 9.95 percent, plus a 50 percent share for the lender of increases in value of the house following closing, plus another 2 percent “maturity fee” to sweeten the payout even more. [more]

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  • Jeanette Ogle, a 92-year-old widow with a reverse mortgage on her house, got a huge birthday surprise last week: She did not lose her home at a scheduled foreclosure auction that had drawn scrutiny from federal and state agencies and consumer advocates.

    Because of obscure federal rules that critics say have snared unwitting elderly homeowners across the country, Ogle’s home in Lake Havasu City, Ariz., had been set for foreclosure on Feb. 27, her birthday. But after interventions on her behalf by the Federal Consumer Financial Protection Bureau, AARP and the Arizona Attorney General’s office, the auction was canceled. [more]

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  • The U.S. Department of Housing and Urban Development has a birthday gift for 91-year-old widow Jeanette Ogle that should cause any senior to think twice before signing up for a government-insured reverse mortgage. Later this month, on Ogle’s 92nd birthday, her home in Lake Havasu City, Ariz., is scheduled for foreclosure — not because she did something wrong. Instead, she is expected to lose her house because during a refinancing in 2007, only her husband’s name was included on the reverse mortgage documents prepared by a loan broker. [more]

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  • FHA sets new rules for reverse mortgages

    December 28, 2012 11:30AM

    Former Senator Fred Thompson is a spokesperson for a AAG, a company that offers reverse mortgages.

    You’ve probably seen the reverse mortgage pitchmen at work on your TV screen — former Sen. Fred Thompson and actors Robert Wagner and Henry “Fonzie” Winkler prominent among them — urging seniors to pull cash out of their homes through a loan program guaranteed by the federal government.  But it looks like the pitchmen will have fewer and smaller mortgages to sell in 2013. In a move aimed at controlling losses to its insurance funds, the Federal Housing Administration (FHA) is clamping a moratorium on the most popular form of reverse mortgage — the so-called “standard” version, which allows large lump-sum drawdowns of cash at fixed interest rates.  [more]

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  • Wells Fargo is putting an end to reverse mortgages at the end of the month, the controversial home equity loan taken out by borrowers over the age of 62. According to the Wall Street Journal, the bank, which is the nation’s largest reverse mortgage issuer, said yesterday that it is no longer comfortable making those types of loans, given that home prices are still falling and that federal restrictions make it difficult to determine whether participating seniors will be able to continue paying their property taxes and homeowners’ insurance. Through the loan program, which is run through the U.S Department of Housing and Urban Development, aging borrowers receive regular payments from the equity of their homes, to be paid back when the home is sold, when the borrower dies, or when the borrower defaults on his or her property taxes or insurance obligations. … [more]

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  • Program aims to cut reverse mortgage costs

    December 10, 2010 12:37PM

    A new national government program introduced in October is seeking to reduce some of the expenses incurred from cashing in a reverse mortgage — which releases the equity in a property as cash that can be used for expenses, while at the same time paying off whatever remains on the mortgage. The Home Equity Conversion Mortgage Saver, or HECM Saver, trims the upfront insurance premium due at closing to 0.01 percent of a property’s value, from 2 percent, and the amount that can be borrowed is also reduced, by 10 to 18 percent, according to the New York Times. … [more]

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  • David Stevens

    Federal officials announced a new mortgage plan today targeted at senior citizen homeowners. The new reverse mortgage option is designed for homeowners taking out smaller loans than those offered in the standard federally insured reverse mortgage program. The new reverse mortgage option, known as the Home Equity Conversion Mortgage Saver, was created for homeowners who want to avoid the high cost of starting a standard reverse mortgage, according to David Stevens, commissioner of the FHA. “We have noted concerns that some senior citizens find that our fees are too high for them,” Stevens said. “In response, we created [the new program], which will provide seniors with a reverse mortgage option that significantly lowers costs.” TRD

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  • Senior citizens and retirees are increasingly looking for ways to regain financial security, according to recent usage data from Golden Gateway Financial’s (note: correction appended) online Reverse Mortgage Calculator. Over the past three months, the number of seniors using the tool increased by 90 percent, indicating that older homeowners are following the overall trend in reverse mortgage growth. Their research may be somewhat futile, however, with declining home values diminishing the amount of money available to older Americans through such loans. In addition, new federal regulations have cut reverse mortgage proceeds by 10 percent, and these stand to be reduced even further when a piece of legislation that temporarily increased mortgage limits expires at the close of 2009. TRD

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  • Amid the housing downturn, reverse mortgages for seniors are becoming increasingly popular. But these mortgages have high fees and require tapping into the mortgage holder’s home equity, which is not recommended for homeowners with any other alternatives, Wall Street Journal reporter Nick Timiraos told CNBC. Also, since home prices are falling, it is likely that home equity amounts are less than reverse mortgage amounts. According to the Federal Housing Administration, therefore, a homeowner would have to have no mortgage at all or a very small mortgage to be eligible for a reverse mortgage. The mortgages already have consumer protection, but John Dugan, controller of the currency, wants reverse mortgages to be more heavily regulated to make the process safer, according to CNBC’s Diana Olick. … [more]

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