Monthly Archives: January 2017

Get up, and get on…

Facebook Chief Operating Officer Sheryl Sandberg spoke recently about the death of her husband, telling graduates at UC Berkeley that they will face adversity in life, but they can overcome it.

“Today I will try to tell you what I learned in death,” Sandberg said in a commencement address. “Dave’s death changed me in very profound ways. I learned about the depths of sadness and the brutality of loss,” she said. “But I also learned that when life sucks you under, you can kick against the bottom, break the surface, and breathe again.” In a little over a year since Sandberg’s husband, David Goldberg, died suddenly while they were on vacation in Mexico, she has opened up from time to time on Facebook.

Most recently, she wrote a post acknowledging that she never realized how challenging single motherhood was until she was forced to experience it for herself.

But in her speech to the UC Berkeley class of 2016, the “Lean In” author spoke candidly about the wisdom she has gained in the year since she lost her husband. “I have never spoken publicly about this before. It’s hard. But I will do my very best not to blow my nose on this beautiful Berkeley robe,” she said. She told the graduates that she was sharing her experience with them because they too will face challenges and set­backs, possibly more grueling than what they have encountered before.

“The question is not if some of these things will happen to you. They will,” Sandberg said. 5/15/2016 nbcnews.com http://www.nbcnews.com/news/us­news/sheryl­sandberg­opens­about­husband­s­death­uc­berkeley­commencement­n574206 2/2 “It is the hard days — the times that challenge you to your very core — that will determine who you are,” she said.

“You will be defined not just by what you achieve, but by how you survive,” Sandberg shared times in which she was heavily distraught over the loss of her husband, and the advice from loved ones: To pursue and make the most out of other options, to “lean into the suck,” to be grateful that the situation wasn’t more devastating, and other words of encouragement that helped her get through the year.

“When the challenges come, I hope you remember that anchored deep within you is the ability to learn and grow,” Sandberg said. “You are not born with a fixed amount of resilience. Like a muscle, you can build it up, draw on it when you need it.”

Tough words to follow. Here at Gofinancial, we are tested too, following a multitude of tests over many years now.

Getting a HECM can be like Sheryl says: ” when life sucks you under, you can kick against the bottom, break the surface, and breathe again”.  We’ve seen this phenomenal reconstruction happen so many times when our clients gain a new financial foothold on their lives after they were able to hook up to a HECM.

It will be best to reach out BEFORE a financial crisis in retirement. It will be so much easier to make the transition to enhanced financial balance when things are calm. In another story on this page, a discussion centers on whether it makes more sense to go with a HECM mortgage early or late in retirement. The assumption that you will need to balance finances with a HECM is strong and well chartered by a lot of other happy clients. The focus may be on when you transition to HECM, and not so much whether. (https://gofinancial.net/2017/09/now-or-last-resort/)

See contact information in navigation bar for details — https://gofinancial.net/home/. Consider stories on this page: https://gofinancial.net/2017/09/power-of-hecm/ https://gofinancial.net/2017/08/hecm-premiums/. Call and let us help, 928 345-1200. (Why should you trust me with this? Test me and find out! I can do a HECM analysis for you to see what you think. You’ll recognize the truth when you see it).

 

 

Using Reverse Mortgages to Fund Long-Term Care

January 10th, 2017

Longevity in America is at an all-time high, which means many people will be living for much longer after they retire. But this also means they will need to have more money to pay for things like long-term care.

There are numerous ways people can pay for health care in their later years, but one option worth exploring is a reverse mortgage line of credit, NerdWallet reports.

The line of credit in particular can be especially helpful for those homeowners who may not need extra funds right away, but may need to tap into them down the road if their health declines.

“As you use this available money, you don’t have to pay a monthly bill as you would with traditional home equity loans; the money is just subtracted from the equity in the home,” the article says. “The line of credit comes due either when you move out of your home or die, in which case you heard or estate could pay the loan back either through the sale of the home or other means.”

There is another case though in which the loan would become due and payable and that is if the borrower were to stop paying property taxes and homeowners insurance, or if they let the home fall into disrepair, which the article did not point out.

In addition to having the line of credit available to the borrower in case of medical emergencies, there are advantages of getting a reverse mortgage over a home equity line of credit (HELOC), the article points out.

Though a HELOC is a similar concept to a reverse mortgage line of credit, with a reverse mortgage the borrower doesn’t have to make monthly payments at all. The credit line with a reverse mortgage also has the opportunity to grow over time, but with a HELOOC it is usually a fixed amount that the lender could freeze or cancel at any time.

“Having as many resources as possible to cover long-term care needs is an important part of a holistic financial plan,” the article says. “A reverse mortgage line of credit can ensure you’ll have funds readily available at the time of need.”

We worry about social security — do you?

Consider what a downward adjustment of social security benefits would mean among those well into the retirement cycle, or those on the edge of joining up.

Following is a non political digest of what is really going on in the economy. Take you brain to the top floor and look around where the following leads. You’ll be concerned about your own stake in this discussion — social security — and you have every right to worry.

Some people reading this have jobs, some don’t, but regarding last week’s 156k nonfarm payroll number I received a note asking, “Back in the Bush I and Clinton eras we supposedly needed to create 325,000 jobs per month just to break even. Where did that 325k number come from or where did it go to? If we are happy about 156k jobs being created, aren’t we about 175k short every month? Did the Department of Labor change something? Am I missing something?”

I have my opinion, but for an answer I turned to the noted MBA economist Mike Fratantoni who replied, “US labor force growth had dropped by more than half over the past decade or so. This is largely a result of baby boomers reaching retirement age while subsequent generations are not big enough to fill their slots and continue rapid growth. Moreover, immigration has slowed considerably. Older workers are working at a higher rate than previous generations. But the labor force participation rate for someone in their 60s or 70s is still a fraction of someone in their 40s or 50s. And as baby boomers push into those age cohorts, the aggregate participation rate is dropping. All in, we now need just about 100k employment growth to keep the unemployment rate steady – so the 156k is good. The proof is that wages are now growing at their fastest pace in a decade. Demand exceeds supply, wages getting bid up.” (*A term often used by learned economists.)

While we’re on the economy, in Friday’s commentary I included a piece on the direction of rates. (“Are you positive that rates are going higher? Me neither, and there are reasons why rates may stay here or actually slide back down a bit. No one has a crystal ball…”) The write-up prompted Tom C. to contribute, “Rob, the reasons that interest rates may not go up as expected are complicated and are evolving. Your report discusses near term aspects to the markets and interest rates but does not get into the longer term economic issues like retiring/aging Baby boomers here, and an aging population in Japan and Europe, negative interest rates here and all over the developed world, Keynesian economics influence here, and in most of the major economies that increases the size of government and regulations that interferes with the growth of private enterprise.”

His note went on. “In the short run the 10-year range will be in the 2.00-2.75% range through mid-2018. That is, IF Trump achieves real tax reform, both corporate and individual, dramatically cuts superfluous business killing regulations, cuts down the size of government through his different cabinet appointees cutting their departments down, and killing bad regulations, if we get a good immigration plan that allows in needed immigrants, and keeps out the poorly skilled, and he does not start a trade war with China. Then we could see real GDP hit 3 plus percent by 2019 and interest rates on the 10-year could hit 4-5% by 2020. The real long term question is do we end up looking more like Japan/Europe or can we regain the entrepreneurial, free enterprise energy that propelled the US economy after WWII? Too many people want the world to be fair – but we cannot depend on government to save the day!” Thank you, Tom.

What about the overall job market in residential lending? I asked Jim Boghos, President of The Boghos Group. “With volume off as much as 40%, underwriters who moved for higher end comp plans are now at risk for layoff as most originators have operational capacity. The current mortgage job market is squarely focused on adding originations people. Competition for established producers is about to become as fierce as we have seen in recent years. In 2017, look for acquisition of small to medium size originators, recruitment of top performing branches and mortgage brokers continuing to convert to the lender side. Top shelf retail branches and regions originating north of $8 to $10 million per month are the main targets right now. Smaller branches have equal opportunity but the larger branches will be targeted as priority for its impact. Companies that offer excellent support, operational execution and financial transparency will control the deck. Also, make sure you have a compelling story to tell. If you don’t have one, you need to develop one because there are a ton of “me too” companies out there saying the same things hoping to recruit the same people.” Thanks Jim!

Recently the commentary mentioned a $45,000 settlement in Minnesota between a title company, which had a boat/dinner cruise for clients, and the Minnesota authority. Is taking clients on a cruise illegal? It prompted Louisiana attorney Marx Sterbcow to write, “The RESPA enforcement does seem to be getting extreme as I’m seeing state attorney generals in conjunction with provincial regulators issuing subpoenas or opening up actions involving really innocuous things such as…. a tin foil container full of ribs or hot dogs. This is starting to have a chilling effect as I’m seeing companies withdraw from all legally permissible marketing & Advertising because they are seeing their friends who provided 20 ribs or 50 hot dogs cost wind up having to pay $40k-100k in ESI document production and attorney’s fees. It’s a different environment and I don’t see this slowing down regardless of who heads up the CFPB.

“Here are two different cases involving different lead regulators however the same supporting regulator is the back-seat driver: one involves a bank/mortgage company and the other involves a real estate brokerage. Readers should pay close attention since if you bought someone a hot dog or threw down the ‘buy one get second hot dog free coupon’ you just violated the law under these and need to produce a receipt to the government so you can self-incriminate yourself in your own document production. And in both cases this is exactly what the government is seeking one simple pricing differential.

“Your readers should always remember that social media is the regulators best friend so those fun pictures you posted on Facebook or Instagram just cost you $50k in ESI production because you posted a picture of you and another settlement service provider eating a hot dog at the same event and the other settlement service provider posted, ‘Thanks for the hot dog!'” Thanks Marx!

Sleuthing around a little shows some state-level differences. For example, “Documents sufficient to show the value and frequency of any rebate, discount, abatement, credit, reduction of premium, special favor, advantage, valuable consideration or inducement, fee, kickback, or thing of value, including but not limited to free or discounted meals, provided to XYZ Mortgage in XXXXXX, Alabama. In lieu of providing the actual documents, you may provide a sortable Excel spreadsheet containing the date, value and description of the specified benefits provided.”

And in Florida, “Documents sufficient to show the value and frequency of any rebate, discount, abatement, credit, reduction of premium, special favor, advantage, valuable consideration or inducement, fee, kickback, or thing of value, including but not limited to free or discounted meals, provided to REALTOR Suzy Q or XYZ real estate company in XXXXXX, Florida. In lieu of providing the actual documents, you may provide a sortable Excel spreadsheet containing the date, value and description of the specified benefits provided.”

The topic prompted attorney Brian Levy to contribute, “While ‘anti-inducement’ laws that directly impact title and insurance companies in many states can be like RESPA on steroids, under RESPA itself, an enforcement authority needs to not only prove that the hot dog was a ‘thing of value,’ but also that it was ‘in return for referrals.’ As a native Chicagoan, I have deeply held opinions on what would constitute a hot dog that could be a thing of value (none of which would involve ketchup). I also believe, given the right narrative, that even if a hot dog is a thing of value, that it could be provided as a legitimate marketing expense (or even in response to a social convention) and not simply as a kickback for referrals. Frankly, (pardon the pun) the ‘hot dog as RESPA violation’ is a ridiculous case to bring and a hard one to win for the regulator. Still that doesn’t mean that a regulator with an axe to grind can’t make life tough on regulated entity by imposing huge discovery and legal defense costs to prevail.” Thank you, Brian!

Real estate agents are home buyers’ most important source of information about new homes after the Internet. Last year, 33% of buyers learned about their new homes via a real estate agent. Agents’ influence is not declining despite consumers’ use of the Web, and for most new home transactions, Americans still prefer a real estate agent. Last year, 87% of buyers purchased their home through a real estate agent or broker-a share that has steadily increased from 69% in 2001, per the National Association of Realtors.

And bankers and lenders have thoughts on this. “Together, realtors and MLOs can ease buyer concerns around confusing paperwork and unexpected costs, making the home buying process as seamless as possible,” said Ryan Bailey, Head of Mortgage, TD Bank. “We’re invested in making a positive impact, and this is part of what makes our bank different.”

As it turned out, TD Bank released the results of its Triple Play Conference Survey, which uncovered that despite realtors’ strong home buying outlook for 2017, they are losing sleep over the home buyer experience. As a value add for their buyers, realtors should partner with mortgage loan officers (MLOs) to offer a more seamless home purchase process, especially for first time homebuyers, who are expected to be driving the market in 2017.

Key findings of the survey include that Realtors expect sales to increase in 2017. Most (55%) realtors expect home sales to increase in 2017, and 70 percent of the realtors surveyed are expecting single-family homes to be the highest type of home in demand this year (versus condos/townhomes, multi-family homes and apartments). Technology is imperative to the home search. 44% of real estate agents said online home shopping via Zillow, Trulia and/or Realtor.com will be the biggest technology influence on the home buying process in 2017.

Realtors brought up buyers’ top concerns. The survey showed that the top two concerns for realtors in 2017 are home inventory and mortgage qualification. Realtors said that buyers’ top concerns are confusion around paperwork, followed by unexpected costs and concerns over financing.

What do agents value most in a mortgage loan officer? Most realtors (79%) look for efficient communication and responsiveness when working with an MLO, followed by guidance with navigating the finance process, competitive rates and expertise on managing the regulatory landscape.

A little boy returned from the grocery store with his mom. While his mom put away the groceries, the little boy opened his box of animal crackers and spread them all over the kitchen table.

“What are you doing?” asked his mom.

“The box says you shouldn’t eat them if the seal is broken,” said the little boy. “I’m looking for the seal.”

If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is, “Are You Sure that Rates are Going Higher?” If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

Rob

For archived commentaries, or to subscribe, go to www.robchrisman.com. Copyright 2017 Chrisman LLC. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.

“Those concerned about the facts here as it relates to  your own social security might want to talk to me about what you might do when social security tanks. This is just the facts. I think we have a solution to your worries — HECM EQUITY MORTGAGE WITHOUT PAYMENTS.” Warren Strycker NMLS247179, 928 345-1200. See “information” tab on home page for contact information.

 

 

Social Security will inevitably need to be altered — O’Reilly

Tip of the Day

“Protect Your Future…

…Because Social Security will inevitably need to be altered, you would be wise to immediately start saving as much money for retirement as you possibly can.” Bill O’Reilly.
 To confirm the jittery condition of social security benefits, the following was posted on Facebook from Senator Mike Lee. Regardless of the political nature of the comment or the truth of his accusation, here’s what he said:
“This is how it happens…

Last night (January 7, 2017) while you were sleeping the (U.S.) Senate voted to “steal” $150 billion dollars from the Social Security Trust Fund. I joined 34 of my colleagues in a vote to prevent this raid. I would like to thank Senator Rand Paul for leading the fight to protect  Social Security from the thieves in Washington, who seem to think that if they steal from the American people at night while they are sleeping that they will get away with it. I was proud to vote with Senator Paul on his point of order that would have protected Social Security, and I ask you to help me shine a light on what Washington has tried to hide from you in the darkness of night.

If everyone who sees this message shares it, it will reach millions of Americans. As someone who has been fighting for years to reform our broken government in Washington, I know it is exhausting, I sympathize with your frustration, and I understand your impatience. But don’t give up.

Washington wants you to give up.

Just remember, a vote to raid social security in the middle of the night in a desperate attempt to perpetuate an unsustainable spending addiction isn’t a sign of strength. It is a sign of weakness.

Editor’s Note: Those approaching or already into retirement should consider using home equity income (without payments) to shore up shortages to cover unexplained and unplanned financial events (HECM reverse mortgage) to escape this potential crunch in the event social security income is threatened in any way — See contact information in navigation bar for details.
https://gofinancial.net/2019/01/conservatives/

Must-Read HECM Financial Planning Articles, Posted here

January 4th, 2017

Reverse mortgage news coverage continued in 2016, with both mainstream media outlets and professional trade publications coming around to the idea of using home equity for financial planning purposes. And for good reason, too.

This past year saw stories on a variety of financial planning topics, including the reasons that forced some advisers to take another look at reverse mortgages in retirement, and how new rules from Social Security Administration and the Department of Labor stand to impact reverse mortgages.

(Editor’s Note: These articles and more posted here on Gofinancial.net for easy access as you plot y our own course through retirement income as Congress takes up the issue of Social Security income down the road. Contact us for assistance when it becomes obvious you need to gear up on this subject. )

While the reverse mortgage industry still has ways to go in its efforts to educate more financial planners about the merits of home equity in retirement income planning, the year 2016 was another productive step in the right direction.

Here are the top-10 most-read reverse mortgage financial planning articles of the last 12 months:

  1. January 4 — Reverse Mortgages Will Change Retirement Planning in 2016

The retirement planning world saw a number of policy changes in the previous year that had implications for how retirees plan in 2016. One of the most important changes: the Financial Assessment and enhanced consumer protection rules for reverse mortgages, according to an article from Forbes written by Jamie Hopkins, associate professor of taxation at The American College in Bryn Mawr, Pennsylvania.

  1. May 26 — Former Skeptics, These Financial Planners Now Accept Reverse Mortgages

There have been many changes to the Home Equity Conversion Mortgage program in the past few years, forcing financial planners who were once skeptical to now realize how these products can benefit their clients and, in some cases, their own businesses. Two financial planners, both self-admitted skeptics of reverse mortgages, chatted with RMD about why their view has changed on the product, and why one of them even went the extra mile and launched a mortgage broker business specializing exclusively on reverse mortgages.

  1. October 18 — Why Financial Advisors Must Accept Reverse Mortgages in Retirement Planning

The negative perception surrounding reverse mortgages not only stunts the growth potential for these products to reach a wider consumer audience, but also deters financial planners from recommending the use of home equity for retirement income planning. This is a concept brought to the forefront in the book, “Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement,” published this year by Wade Pfau, professor of retirement income at The American College and director of retirement research at McLean Asset Management.

  1. March 6 — Financial Planning Talking Points Every Reverse Mortgage Lender Should Know

Just like any relationship, whether emotional or professional, communication is integral to developing a meaningful connection that allows each of the parties involved to effectively understand the needs and wants of their partners. While the importance of meaningful communication may sound like a cover story worthy for the front pages of glam-mags like Cosmo and Vogue, this concept is critical for reverse mortgage professionals in their ongoing efforts to forge relationships with financial advisors and other retirement professionals.

  1. March 21 — Advisers Get Crash Course on Reverse Mortgage Financial Planning Strategies

A webinar hosted by the Retirement Experts Network alongside The American College served as an educational session to teach advisers how they can fit home equity into a client’s retirement income strategy. During the session, advisers received an overview of how reverse mortgages work, including their eligibility requirements, various spending options and the different possible uses for HECMs.

  1. September 12 — New Social Security Rules Play Into Reverse Mortgage Retirement Strengths

Changes to the Social Security program enacted this year are lending credence to reverse mortgages as a viable retirement income planning strategy, according to some retirement experts during a webinar hosted by the Retirement Experts Network. The webinar discussed how rules impacting Social Security claiming strategies, including “File and Suspend,” could offer an opportunity for retirees to incorporate a reverse mortgage into their retirement income planning strategies.

  1. April 12 — Reverse Mortgages Are the Epitome of Retirement Planning Efficiency

Effective retirement planning allows investors to maintain their lifestyles while also preserving a greater legacy. When it comes to creating a retirement income plan that achieves both of these goals, reverse mortgages are the epitome of efficient planning, says one retirement income expert.

  1. March 7 — Why One Financial Planner Launched His Own Reverse Mortgage Business

Recent rule changes and demonstrative research has helped some financial planners change their minds about the use of reverse mortgages in retirement planning. But while some have simply adopted a newfound liking toward these products, other newly enlightened planners are taking a more active approach to serve their clients’ reverse mortgage needs.

  1. April 4 — New Rule Offers Opportunities for Reverse Mortgage, Financial Planner Relationships

A Department of Labor rule this year that amends the definition of fiduciary under the Employee Retirement Income Security Act of 1974 is thought to create opportunities for financial advisers and reverse mortgage professionals to form new relationships. Although the rule does not address reverse mortgages directly, its impact on financial services providers has implications for the use of home equity in retirement.

  1. January 4 — Why This AARP Columnist Changed Her Mind on Reverse Mortgages

Thanks in part to various HECM program changes in recent years, reverse mortgages have been winning over everyone from financial advisers to community banks and the mainstream press, and even one nationally recognized personal finance commentator who changed her view on the product.

Over the course of an illustrious career, Jane Bryant Quinn has established herself as one of the nation’s most read and reliable voices for people trying to manage their money well. But it wasn’t until recently that she shifted her perception of reverse mortgages and the role they can play in retirement planning today.

There you have them—the top financial planning stories on reverse mortgages in 2016. Feel free to re-read, share and reference in your ongoing conversations about reverse mortgages and retirement.

Editor’s note: The top stories list is based on traffic data received on Reverse Mortgage Daily content compiled January 1, 2016 through the publication date of this article.

See contact information in navigation bar for details.

“Warming up to HECM mortgages”, Taylor