Scott's Dollars and Sense

Myths and Misconceptions Surrounding Reverse Mortgages Have Prevented Many Senior Adults From Taking an Educated Look at This Unique Financial Tool

Reverse mortgages are a valuable financial tool for a portion of the senior adult community. Myths and misconceptions currently prevent a segment of seniors from understanding the reverse mortgage product and should be dispelled so that the senior adults whom this program was created for may be exposed to the facts, allowed to evaluate it on its own merits and take advantage of it if the investigation warrants so.

To meet with a growing demand from this population for this program, there have been new reverse mortgage programs created to address some needs not met by past reverse mortgages. There are now programs available for homes with higher values and lower closing costs. It is of the highest importance to seek out a reputable lender who can discuss all programs available and help find the one that best fulfills the specific needs of the client.

Reverse mortgages instill fear in some senior adults and their heirs. The myths and misconceptions exist for simple reasons such as when a senior adult looks to friends and family for answers, although their intentions are noble, they frequently convey inaccurate information. This often happens purely because of outdated information. This fear that exists prevents a portion of the senior adult population from thoroughly investigating the details associated to the different types of reverse mortgages available.

Bank of America reverse mortgage Sales Division Manager Sam Avaiusini states, "The top 2 myths and misconceptions we encounter are that the senior believes they will lose ownership of their home if they take out a reverse mortgage and that a reverse mortgage is only for a desperate or cash poor house rich senior homeowner." The fact is that the borrower(s) must remain on the deed with a reverse mortgage. Although a reverse mortgage can be used to remedy a desperate situation such as a foreclosure or excessive debt, it has other uses within a solid financial plan. Sam Avaiusini asserts, "...quite the contrary, we often see reverse mortgages used as a financial tool by secure senior homeowners." Another myth is that the lender takes ownership of the home when the loan is due and payable. A reverse mortgage becomes due and payable when the seniors cease to occupy the home as a primary residence, whether both pass away, sell the home or permanently move out. Any remaining equity in the home goes to their estate and they will never owe more than the home value even if the mortgage balance exceeds the value.

Many of the features of the reverse mortgage are misunderstood. For example, since there are no monthly payments to be made, there are no income or credit qualifying requirements. Reverse mortgages are regulated and insured by the government and require a third party counseling certificate prior to applying for the reverse mortgage. The proceeds of a reverse mortgage can be used for virtually any purpose, whether it's for paying off debts, paying real estate taxes, repairing or improving your home, buying a new car, eliminating an existing mortgage and payment, taking a vacation or supplementing retirement income to cover daily expenses.

Beginning January 2008, there will be 8,000 people per day turning 62 years old. There is a growing need for reverse mortgages and the more accurate and available the information for these programs is, the easier it will be to determine if it should be part of the senior homeowners financial plan.

I will be holding a Seminar on 1-15-08 starting at 7 PM in Danbury, CT. If you want more information and a Invitation sent to you them please email or contact me with your information.

SOMEBODY'S RAISING THEIR KID RIGHT! One Nation, "Under God."

One day a 6 year old girl was sitting in a classroom. The teacher was going to explain evolution to the children. The teacher asked a little boy: Tommy do you see the tree outside?
TOMMY: Yes.
TEACHER: Tommy, do you see the grass outside?
TOMMY: Yes.
TEACHER: Go outside and look up and see if you can see the sky.
TOMMY: Okay. (He returned a few minutes later) Yes, I saw the sky.
TEACHER: Did you see God up there?
TOMMY: No.
TEACHER: That's my point. We can't see God because he isn't there. Possibly he just doesn't exist.

A little girl spoke up and wanted to ask the boy some questions.
The teacher agreed and the little girl asked the boy: Tommy, do you see the tree outside?
TOMMY: Yes.
LITTLE GIRL: Tommy do you see the grass outside?
TOMMY: Yessssss!
LITTLE GIRL: Did you see the sky?
TOMMY: Yessssss!
LITTLE GIRL: Tommy, do you see the teacher?
TOMMY: Yes
LITTLE GIRL: Do you see her brain?
TOMMY: No
LITTLE GIRL: Then according to what we were taught today in school, she possibly may not even have one!
(You Go Girl!)

FOR WE WALK BY FAITH, NOT BY SIGHT" II CORINTHIANS 5:7

Don't forget to pass this on! I love this one. Everyone should send this to everyone they know, especially today with prayer restricted in schools. Forward if you believe in GOD!!!!

I was working on a loan, a HELOC for a customer for 5 months. His credit was ok at 657, no mortgage lates, but lates on other installment accounts. I normally can do this type of loan in 2 weeks, but he was stalling and rate shopping.

So the day came and he said okay what do you have for me, I replied well when I 1st offered it to you it was low at 7.25 % but rates have changed from 4 months ago so now you're looking at 8.845 because your FICO has dropped to a 590, and your DTI has increased because the Appraisal came back lower then what you thought it would. He expected 650 K but it came back at 576 K.

To make a long story short, I called and said ok we can close tomorrow all I need is your last paystub, since it's been so long underwriter wants to be sure that your making same avg. per week, to which he replied well I can goto XYZ bank and get 7.00 %, I said ok go ahead and good luck, I'll be here if it doesn t work out. He we replied well they can close in 10 days, the papers are ready to go, I said ok then Go. LOL.

So I waited 7 days and called he said I am pissed, I said in a surprising yet sarcasticvoice what happened  ?

Well he said I closed Friday but i am rescinding the loan because they just sent me something in the mail saying I can get 6.875 from same bank, a day after I closed, why didn't they tell me ? I said well banks are in business to make money just like Brokers, but I would of given him lower rate. So he rescinds the offer and last night I get a call that went a little something like this:

Him: Hey Scott buddy, it's JOE, how are you ?

Me: OK and you ?

Him: Great. Listen what kind of rate can you get me and can we close tomorrow ?

Me: Well I'll have to check with lender but all I should need is that paystub, and we should be able to close on Wednesday.

Him: Ok, what kind of rate are we talking ?

Me: Joe, does it really matter ? I mean 8, 8.5 ? but after 10 day you can call bank and lock at lower rate anyway so.....

Him: OK, I'll call you in A.M. and we can get this done.

My gut says he never had a lower rate or never closed the loan with bank, but rather was trying to see if I would lose money to make him happy....

My Advice to all, NEVER BE AFRAID TO CALL A CLIENTS BLUFF !

When you have an "I Hate My Job" day, try this. On your way home from work, stop at your pharmacy and go to the thermometer section and purchase a rectal thermometer made by Johnson & Johnson. Be very sure you get this brand.

When you get home, lock your doors, draw the curtains and disconnect the phone so you will not be disturbed. Change into very comfortable clothing and sit in your favorite chair. Open the package and remove the thermometer.

Next, carefully place it on a table or a surface so that it will not become chipped or broken. Now, the fun part begins: Take out the literature and read it carefully. You will notice that in small print there is a statement: "Every rectal thermometer made by Johnson & Johnson is personally tested."

Finally, close your eyes and repeat out loud five times, "I am so glad I don't work in thermometer quality control at Johnson & Johnson."

HAVE A NICE DAY AND REMEMBER, THERE IS ALWAYS SOMEONE ELSE WITH A JOB
THAT'S MORE OF A PAIN IN THE REAR THAN YOURS!

I hope this all made you laugh !

Ok all this is not my typical post about letters I used or Mortgage News. Last night at about 1 am a friend called on her way home from work. I was almost asleep but answered thinking she was having car trouble since she has an older car(1986 Subaru), no she called to inform me that I should not go into work on Thursday because we are going to get a huge storm that will dump 5-8 inches of snow on the Danbury, CT area. Well for those that know me I love sarcasm and humor so I decided to have some fun with her.

I said no way are you serious ? Do you think I should get up now and do my food shopping instead of waiting until tomorrow ? She was like no silly, you can go tomorrow meaning after work on Wednesday and you should be okay.  I was like phew ! Do you need me to go for you ? She was like umm well no I'll go myself but I am buying extra because we have another Nor Easter coming this weekend. I laughed a lil and said what a Nor Easter OMG but it's only December. In a excited voice she said I know, it's not even Christmas and we are getting this major storm, and not once but twice in the same week.

By now I was ready to hang up so I said as politely as I could " LISTEN LIKE I SAID IT'S DECEMBER, WHAT DO YOU EXPECT SUNSHINE AND TO GO SWIMMING "LOL. I love snow so as long as not ice who cares it's December we should have snow .

Ok, you may all now go back to work !