Monthly Archives: August 2017

When Does a Reverse Mortgage Become Due and Payable?

Whether you have a HECM or NOT, this reminder is that as one gets older, sometimes we forget important stuff — like property taxes. Counties aren’t very good about keeping you informed. It’s always smart to check into county records from time to time and make sure your taxes are paid. Consequences can be horrific.

Such is also true if you have any kind of mortgage.

Once a triggering event occurs, the reverse mortgage loan becomes due and payable. A reverse mortgage loan becomes due and payable when one of the following circumstances occurs:

All borrowers have died. When this happens, the heirs have several options. They may choose to:

  • repay the loan and keep the property (generally, with a HECM, the heirs may pay the lesser of the mortgage balance or 95% of the current appraised value of the home)
  • sell the property (for at least the lesser of the loan balance or 95% of the fair market value of the home in the case of a HECM) and use the proceeds to repay the loan
  • deed the property to the lender, or
  • abandon the property and let the lender foreclose.

(If you take out a HECM and have a non-borrowing spouse, your spouse may be able to remain in the home after you die, and the loan repayment will be deferred, so long as certain criteria is met. The rules are different depending on whether you took the loan out before or after August 4, 2014. Learn more in Nolo’s article New Rule – Spouses Not Named on Reverse Mortgages Are Protected From Foreclosure.)

The property is sold or title to the property is transferred. If the home is sold or title transferred, the loan becomes due and payable. Generally, if the property is sold, the escrow company will accept the purchaser’s money and pay off the reverse mortgage along with any other liens on the property. If you transfer ownership of the home—for example to a relative—the loan becomes due and payable.

The borrower no longer uses the home as a principal residence. The borrower can be away from the home (for example, in a nursing home facility) for only up to 12 months due to physical or mental illness; however, if the move is permanent, then the loan becomes due and payable.

The borrower fails to meet the obligations of the mortgage. The terms of the mortgage will require the borrower to pay the property taxes, maintain adequate homeowners’ insurance, and keep the property in good condition. (In some cases, the lender might create a set-aside account for taxes and insurance.) If the borrower does not pay the property taxes or homeowner’s insurance, or if the property is in disrepair, this constitutes a violation of the mortgage and the lender can call the loan due. The lender must usually allow the borrower to cure the default to prevent or stop a foreclosure. Though, reverse mortgage lenders are known for foreclosing on elderly homeowners for relatively minor mortgage violations.

After the Loan Becomes Due and Payable

Once the loan becomes due and payable, the borrower owes the lender:

  • the amount of money the lender has disbursed to the borrower, plus
  • interest and fees accrued during the life of the loan.

To avoid a foreclosure, the borrower must

  • correct the default
  • pay off the debt
  • sell the property for the lesser of the loan balance or 95% of the appraised value (or an heir may satisfy the debt by paying the lesser of the loan balance or 95% of the current appraised value), or
  • deed the property to the lender.

“Let’s talk about it”, says veteran loan officer, Warren Strycker. (See contact information under “information” on Home Page or call 928 345-1200. “Foreclosure on your home is a scary scenario and can be triggered by forgetting to pay your property taxes. Whether you have a mortgage or not, Pay your taxes.

JOIN THE HECM “CLUB” — We are ready to help. Call 928 345-1200.

By Warren Strycker, licensed loan originator

“I am a fully licensed Mortgage loan originator in the state of Arizona, a member of the Yuma County Chamber of Commerce and a trusted 12-year veteran in the mortgage industry. My job has been to assist neighbors 62 years or older to extract cash, equity dependent, to assist in retirement income without requiring monthly mortgage payments as long as you reside in the home as your principle residence, maintain taxes, homeowner’s insurance and HOA (if applicable).

I have a HECM loan and have helped many others acquire one. If you are interested, please contact me, Warren Strycker, 928 345-1200 and ask questions. I can do a HECM loan evaluation to see if you qualify. I’ve been a “neighbor” for a long time. Thanks for taking the time to consider how a HECM loan could benefit you now.”

I am not rich or famous, but I am focused and ready to help when I am needed — 928 345-1200. I have an iPhone and a Bluetooth on my ear. You can call now. I know what to do for you, and if you and God wills, I happily will.

I work with the United States Government on a program called the Home Equity Conversion Mortgage (HECM), a focus on retirees and their incomes and the HUD program, now resuported by HUD secretary Ben Carson — a program you can trust to put you on a firmer financial footing if you are 62 and have home equity you want to spend now. My lender is Patriot Lending and they are super to work with.

And, you don’t have to feel lesser because you firm up your resources in retirement. This is not a free government program and there is EVERY reason to be proud to move into it.

This is not a free lunch. Private money makes this program run. Investors get involved because the government guarantees the result. It works because a lot of good people work together for the common good, including me.

HECM, as it is called, has more than 50 years of history, begun then by President Reagan and reaffirmed by every president since, most recently by HUD Secretary Ben Carson.

I have worked HECM with people to reorganize their finances for 12 years now, so I have a pretty clear picture of what it takes to use it. I hope you’ll believe me when I talk about some of the following people I’ve worked with lately …

Bill and Jackie…

… had to borrow money on their credit card for a $5000 AC they needed.  It’s often hot in Arizona and they didn’t have the money — so they put it on their credit card. The payments got in the way and we paid off that balance on their card. Life is better for them now and they have no more payments to make. Yes, it feels good to have helped them.

Deana…

…lost considerable money in the market and needed more money in her budget to get by. The HECM helped her pay her bills and put some money aside to back up her budget which had depended on income from market profits now missing. I notice she made a few improvements on her nice little home in Yuma.

Marybeth and Jack…

…had a car payment in the way and the budget was so slim, every month was a nightmare making ends meet. The HECM paid off the car loan and the budget was balanced with money to spare. That loan closes this week, and these folks are happy with the results — just happened that their home is a singlewide manufactured so there was the problem with foundation. Most lenders wouldn’t touch it – but we did. The loan will close in a couple of weeks and they won’t have to pay the big car payment. Life will be better for them.

This is not rocket science. So many of these stories have happy endings. I hope you’ll look for one of  your own now. Tell me your story — let’s get started.

If you are one of those, I hope you’ll join me on this webpage and learn what you can to help make your life more secure financially. I’ve done this many times for folks here in Arizona – many times, so I know what to do for you. A recent client told me she trusted me. Best news I get these days.

This webpage is a focus on the HECM – now two years old this month – these pages contain information from the financial experts in this industry who explain the program we call the Home Equity Conversion Mortgage – what you probably call the Reverse Mortgage.

I’ve had one of these HECMs for a bunch of years now and I know quite a bit about the program after twelve years here in Arizona explaining it so many times to folks just like you, eager to get a new approach to their retirement finances.

What I’ve done on Gofinancial webpages is record for you what others of far greater wisdom than I have said and written about the Home Equity Conversion Mortgage – now more than 50 years of history being improved and promoted by so many just like me to help people work through their retirement finances more efficiently.

We agree with President Reagan, the HECM is an important retirement tool — and I have become a licensed loan officer to help people try one of these on for themselves. I hope you will think it is important enough to look into it.

That’s what this webpage is all about. Hands on HECM education from some of the strongest leaders in the industry – authentic information you can use to make a good decision.

I hope you will make regular visits to this webpage and that you will unload your questions on me by phone or email, so we can answer them promptly.

In the end, my hope is that I can help you make life better because you were able to put a HECM in your life that will relieve the financial pressures of retirement some of you are beginning to feel now.

I want to do a HECM ANALYSIS for you that gathers information about equity, loan costs and benefits. You’ll learn a lot and I’ll be able help you understand just what a HECM can do for you.

I hope you’ll get to know more about me as you truly consider a HECM. I’m waiting for your call now… will you ask me to help?

I’m Warren Strycker. I will serve in this capacity as long as I can be faithful, honest and trusted.  You can call now. I will keep the door open as long as I can.

928 345 1200

“This is going to become one of the key means of funding retirement in the future.”, says Merton https://gofinancial.net/2016/06/merton/

 

 

 

 

 

 

 

 

On my honor

On my honor, I will do my best. To do my duty to God and my country and to obey the Scout Law; To help other people at all times; To keep myself physically strong, mentally awake and morally straight.

Boy Scout Law

  • Trustworthy,
  • Loyal,
  • Helpful,
  • Friendly,
  • Courteous,
  • Kind,
  • Obedient,
  • Cheerful,
  • Thrifty,
  • Brave,
  • Clean,
  • and Reverent.

Product vs. Process — a case for “good vibes”.

By Stephen Kelley, CSA

Updated:   08/07/2017 08:04:50 AM EDT

I have said it several times and written it in dozens of places, including books, columns, radio scripts (such as they are) and workshops: A good financial plan must be both financially and emotionally sound. I can create the most financially secure plan the world has ever seen, but unless it makes you feel emotionally secure it’s worthless.

There are many factors that cause people to worry about their money. These can be the vast unknowns, the conflicting advice people get from others who have a stake in their money, fear of losing money, fear of missing opportunities, and not knowing how to start. In my mind, these factors are in one way or another about the same thing, losing control. When we are working and have regular income, we can be more sanguine about things like market volatility. However, once we have gotten into that convertible with Thelma and Louise and driven over that ledge, it’s much more difficult. Everything that happens can have a significant, and in many cases damaging, impact on our livelihoods.

Our goal is to not only provide better outcomes for people as far as lifestyle and cash flow are concerned, but to also provide better quality of life. Fortunately, the tools we use and the philosophy behind our planning process fit this objective very nicely.

Job one in any planning process is to determine what a client really wants out of life.

Far too often, people spend all their time thinking about products and strategies, rather than process and outcomes. I believe this is a sure road to failure.

You see it in our media all the time. Many of the financial “gurus” on TV or radio get stuck in this trap. You might have heard one on TV saying, “we will never sell an annuity,” or another claiming permanent life insurance is the worst product ever sold, or another opining about avoiding reverse mortgages at all costs. My question is why? They would say because they are “bad products.” I would say they are just products that are frequently misused because they are misunderstood.

Here’s an example that just happened today, right before I sat down to write this. A man who has had some tough luck in his life came in to try and figure out how to make the best out of a very tough situation. He has a house worth around $225,000 on which he owes $80,000. In addition, he has a rental unit that brings in about $600 a month, and a Social Security benefit of $1,550 per month at full retirement age. He works in a manual job making around $16 per hour, is 64, and didn’t know what to do.

His need is about $2,000 a month. I recommended he work as long as he can and delay Social Security until at least full retirement age. If he can get to 70, that would be $2,100 a month. It turns out he has another 17 years to go on his $80,000 mortgage with a payment of $550 per month. I asked what his goal for the house was, and after he told me it was to be there for the duration, I recommended he consider a reverse mortgage.

The result of these moves would be an extra $550 per month in his pocket from paying off his house, plus about $33,000 in cash from the reverse mortgage. The delay in Social Security benefits brings that to over $2,000 a month. His final numbers would be $1,500 per month in expenses, with $2,100 a month in Social Security plus any rent he gets from his unit, which is now about $600 per month.

Of course, we then had the conversations about delaying his Social Security payouts and the desirability of the reverse mortgage. He mentioned a friend had urged him to start receiving Social Security right away, or else he could “lose” his benefits. His friend was also quick to point out how “bad” reverse mortgages are, and how he should avoid them at all costs.

Let’s look at each. First, what’s the real benefit Social Security provides? Is it about the money you can collect early, when you are working, just to make sure you get what’s coming to you? Or is it about establishing a lifelong income plan that will make you financially and emotionally secure for life? I would say it’s very much the latter. As for the reverse mortgage, his objection was, “but when I sell it there won’t be any money left.”

My response, so what? He has no kids and is never married. He wants to live in the house until he can’t any more. And while he’s living, his number one issue is cash flow. These needs are supported by the reverse mortgage, in fact, all of these are exactly what they were designed for.

When you hear the noise about various products being good or bad, pause for a moment. Ask yourself what outcome you are looking for. If the products being suggested support that outcome, and that outcome really is what you want, go for it. After learning everything you can about it, of course.

Stephen Kelley can be heard, along with his co-host Mark Perkins, on the Free-to-Retire Radio Hour on Saturday at 7 a.m. on 610 WGIR and Sunday at 12 p.m. on 980 WCAP. Steve conducts workshops on Maximizing Social Security and The Other 60% – More Now, More Later. He is the author of several books, his latest ones being “Ready-Set-Retire” and “Tell Me When You’re Going to Die and I’ll Show You How Well You Can Afford to Live.” His financial planning practice, Safety First Financial Planners is located at 33 Main St. in Nashua. He can be reached at 603-881-88a11.

EDITOR’S NOTE: Yes, there is a case for a thing called “vibes”. I sat in a Lincoln MKZ and the seat “felt good” to me. I bought it right there. A lady recently bought a car and said she could stand outside with the door open and just sit down on the seat. She didn’t have to stretch to get in. The car “felt good”. Those looking at the Reverse Mortgage may “feel good” or “not” and that may explain the entire process for them. Others knew it from the first. A Reverse Mortgage made perfect sense to them. A new spiritual quality has entered the HECM discussion.