Although many reverse mortgage lenders are busy helping seniors with these types of home loans, the latest HECM reverse mortgage endorsements show a small decline. Senior Bank Services is a nationally known website that provides valuable information about products that senior citizens would be interested in. The main source of traffic to this website is from those looking for reverse mortgage information, and localized pages for reverse mortgage lenders to be contacted from interested consumers about reverse mortgages. The latest information that shows the decline in HECM endorsements is less than a couple percent, but states like California continue to grow in reverse mortgages for seniors. To find out more about reverse mortgages, or to speak with a licensed mortgage professional who specializes in these types of loan products visit,
A HECM reverse mortgage is the only reverse mortgage insured by the U.S. Federal Government. It also constitutes most of all the reverse mortgages done in this country. Individuals 62 or older and have equity in their homes can apply for this type of loan. The different between a traditional mortgage and reverse mortgage is, seniors that receive a reverse mortgage do not have to make mortgage payments. They are still responsible for taxes and insurance as well as maintaining the home. A popular trend in reverse mortgages is using one to buy a home, called a HECM purchase, or reverse purchase. The senior places a large down-payment on the home when buying and then lives there without the worry of making a mortgage payment. To learn how to buy a home using a HECM purchase, or to speak with a reverse mortgage specialist call the number provided.
About the Company: SeniorBankServices. com is a nationwide reverse mortgage information website that offers reverse mortgage information and connects prospective clients to qualified licensed reverse mortgage brokers and lenders to homeowners in Riverside, San Diego, Los Angeles, and San Bernardino, and throughout the state of California. The company and its partners follow all rules and regulations regarding reverse mortgages. To learn more about reverse mortgage lenders in San Diego, or any other loan product, visit the company website.
fore more information http://www.prweb.com/releases/hecm-reverse-mortgages/reverse-mortgage-lenders/prweb12751848.htm
Friday, May 29, 2015
Tuesday, May 26, 2015
Now it’s tougher to get a reverse mortgage
New federal rules that kicked in last month may make it harder for some people to qualify for reverse mortgages. But they’ll also make it more likely that those who do receive reverse mortgages will have fewer worries about them.
Reverse mortgages are FHA-insured loans available to homeowners age 62 or older that let the borrowers convert their home equity to cash without making monthly payments; they’re repaid when the borrower sells the home, moves or dies. A 65-year-old with a $250,000 home might be allowed to borrow $127,000 with a reverse mortgage, according to the Boston College Center for Retirement Research.
The new financial assessments
Under the new rules (which sprang from a 2013 law), to get a reverse mortgage, you’ll now be subject to what’s known as a “financial assessment” — much like what lenders do when sizing up applicants for regular mortgages. Lenders will now review the income, cash flow and credit reports of prospects.
Basically, you’ll need to prove that you have the “willingness” and “capacity” to continue paying your home’s property taxes and insurance premiums. If the assessment convinces the reverse mortgage lender that you won’t have the cash to make those home-related payments, you may be rejected. That’s because a reverse mortgage borrower who fails to pay property taxes or homeowner’s insurance could be tossed out of the home and the house could then go into foreclosure.
“I think these changes are positive overall,” says Phil Stevenson, a Certified Reverse Mortgage Professional and principal of PS Financial Services in Coral Gables, Fla. “They’ll affect 5% to 10% of potential borrowers and, in reality, those are the ones who probably shouldn’t have done reverse mortgages in the past.”
The new rules will undoubtedly make the reverse-mortgage application process more complex, though, and will lengthen the time it’ll take for loan approval, at least initially.
read more: http://www.marketwatch.com/story/now-its-tougher-to-get-a-reverse-mortgage-2015-05-23
Reverse mortgages are FHA-insured loans available to homeowners age 62 or older that let the borrowers convert their home equity to cash without making monthly payments; they’re repaid when the borrower sells the home, moves or dies. A 65-year-old with a $250,000 home might be allowed to borrow $127,000 with a reverse mortgage, according to the Boston College Center for Retirement Research.
The new financial assessments
Under the new rules (which sprang from a 2013 law), to get a reverse mortgage, you’ll now be subject to what’s known as a “financial assessment” — much like what lenders do when sizing up applicants for regular mortgages. Lenders will now review the income, cash flow and credit reports of prospects.
Basically, you’ll need to prove that you have the “willingness” and “capacity” to continue paying your home’s property taxes and insurance premiums. If the assessment convinces the reverse mortgage lender that you won’t have the cash to make those home-related payments, you may be rejected. That’s because a reverse mortgage borrower who fails to pay property taxes or homeowner’s insurance could be tossed out of the home and the house could then go into foreclosure.
“I think these changes are positive overall,” says Phil Stevenson, a Certified Reverse Mortgage Professional and principal of PS Financial Services in Coral Gables, Fla. “They’ll affect 5% to 10% of potential borrowers and, in reality, those are the ones who probably shouldn’t have done reverse mortgages in the past.”
The new rules will undoubtedly make the reverse-mortgage application process more complex, though, and will lengthen the time it’ll take for loan approval, at least initially.
read more: http://www.marketwatch.com/story/now-its-tougher-to-get-a-reverse-mortgage-2015-05-23
Thursday, May 21, 2015
Mortgage rates climb for 4th week in a row
Mortgage rates inched up this week after days of volatile trading that sent the 10-year Treasury yield on a wild ride. Meanwhile, homebuyers remained reluctant to borrow for a second straight week, even as builders geared up to break more ground.
2015%30-year fixedMarAprMay3.703.803.904.004.10
30 year fixed rate mortgage -- 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 4.03 percent from 4.01 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.29 percent. Four weeks ago, it was 3.79 percent, and the rate has increased four weeks in a row. The mortgages in this week's survey had an average total of 0.23 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.07 percent. This week's rate is 0.04 percentage points lower than that 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.23 percent from 3.22 percent.
The benchmark 5/1 adjustable-rate mortgage rose to 3.19 percent from 3.17 percent.
The benchmark 30-year fixed-rate jumbo rose to 4.13 percent from 4.09 percent.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-052115.aspx
2015%30-year fixedMarAprMay3.703.803.904.004.10
30 year fixed rate mortgage -- 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 4.03 percent from 4.01 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.29 percent. Four weeks ago, it was 3.79 percent, and the rate has increased four weeks in a row. The mortgages in this week's survey had an average total of 0.23 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.07 percent. This week's rate is 0.04 percentage points lower than that 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.23 percent from 3.22 percent.
The benchmark 5/1 adjustable-rate mortgage rose to 3.19 percent from 3.17 percent.
The benchmark 30-year fixed-rate jumbo rose to 4.13 percent from 4.09 percent.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-052115.aspx
Tuesday, May 19, 2015
Amazingly, Securitization Of Mortgages Actually Worked
Matt Levine makes a lovely point over at Bloomberg . One which is entirely contrary to current received wisdom. That point being that securitization of mortgages actually worked, actually did what it said it would. And this is true despite even the lying about what was going into those packages.
Start from the basic macroeconomic point of what was going on. The desire is to spread the risk around, to slice and dice the risk even, of lending money to people to buy houses. This is one of the functions of financial markets and it’s the entire economic point of having speculation. There’s people out there who really don’t want to be carrying risk at all. Either from temperament or for sound business reasons. There’s also people out there with a much greater appetite for risk than most other people. So, what we’d like to do is transfer that risk from those who don’t want it to those who do. The most obvious example of this is in a futures market. The farmer is growing grain, the baker making bread. Neither of them is particularly keen on carrying the risk that the price of wheat (one’s output, for the other an input) is going to vary as a result of, say, summer rains or not in the Ukraine. But there’s plenty of people out there who are happy to bet on there being rain in the Ukraine this summer or not. So, the farmer sells a futures contract, the baker buys one: and in the middle we’ve that froth of speculation. The speculators are carrying the risk as the price for both the farmer and the baker is now set. Reducing risk on those who don’t want it and adding it to those who do is a synonym for us all becoming richer.
ADVERTISING
There’s also mathematics that we can use to transfer risk: risk pooling we can call it. This is what insurance is based upon. That my house might burn down has a very low probability (that probability perhaps changing dependent on how often I try to make french fries on return from the bar). But it would be devastating if it did. Across the whole population we know that some houses will burn down each year. Pool the risks of any one house burning down, everyone pays a small premium and there’s the funds to compensate those poor saps it does happen to.
see more: http://www.forbes.com/sites/timworstall/2015/05/14/amazingly-securitisation-of-mortgages-actually-worked/
Start from the basic macroeconomic point of what was going on. The desire is to spread the risk around, to slice and dice the risk even, of lending money to people to buy houses. This is one of the functions of financial markets and it’s the entire economic point of having speculation. There’s people out there who really don’t want to be carrying risk at all. Either from temperament or for sound business reasons. There’s also people out there with a much greater appetite for risk than most other people. So, what we’d like to do is transfer that risk from those who don’t want it to those who do. The most obvious example of this is in a futures market. The farmer is growing grain, the baker making bread. Neither of them is particularly keen on carrying the risk that the price of wheat (one’s output, for the other an input) is going to vary as a result of, say, summer rains or not in the Ukraine. But there’s plenty of people out there who are happy to bet on there being rain in the Ukraine this summer or not. So, the farmer sells a futures contract, the baker buys one: and in the middle we’ve that froth of speculation. The speculators are carrying the risk as the price for both the farmer and the baker is now set. Reducing risk on those who don’t want it and adding it to those who do is a synonym for us all becoming richer.
ADVERTISING
There’s also mathematics that we can use to transfer risk: risk pooling we can call it. This is what insurance is based upon. That my house might burn down has a very low probability (that probability perhaps changing dependent on how often I try to make french fries on return from the bar). But it would be devastating if it did. Across the whole population we know that some houses will burn down each year. Pool the risks of any one house burning down, everyone pays a small premium and there’s the funds to compensate those poor saps it does happen to.
see more: http://www.forbes.com/sites/timworstall/2015/05/14/amazingly-securitisation-of-mortgages-actually-worked/
Thursday, May 14, 2015
Cautionary tales: Reverse mortgages could lead to problems
FAIRWAY, KS (KCTV) -
Reverse home mortgages are complicated and not for everybody.
They are designed for seniors - 62 or older - to borrow against their home's equity. But where there is money, there are scammers.
With a regular mortgage, homeowners make monthly payments to a lender. In a reverse mortgage, a lender pays the homeowner.
The loan is repaid when the homeowner passes away, sells their home or when the home is no longer their primary residence.
That means if someone decides to sell the family home, they are not going to get as much.
"If you have a reverse mortgage on your house, and you've had it for several years. the more money you get, the more money you're going to owe on your house the less money you're going to get when you sell it," said Aaron Reese with the Better Business Bureau.
Reverse home mortgages aren't for everybody, but they do have their benefits.
"It is a really great vehicle for seniors who choose to age in place. And they don't want to out-live their money, so they'll have a little extra money available," said Victoria Duke, a professor of Law and reverse mortgage expert.
The federal government highly recommends talking to a counselor who can walk someone through the process and help them decide if it's best for them.
If the lender doesn't offer that, that is a red flag. Another red flag is who to make the check out to.
"He said, 'you are going to have to pay us $800 for three months. can you afford that?' I said, 'I guess so,'" one mortgage scam victim said.
Just last year, a metro man was charged with ripping off a 70-year-old Excelsior Springs woman in a reverse mortgage scam.
The Housing of Urban Development says Robert Todd convinced her to write the checks to him instead of the bank.
"Oh, I was mad, really upset," the victim said.
Luckily, she got her money back once Todd was charged.
"If you're looking to get a reverse mortgage, you're going to want to get some outside advice. Talk to a financial adviser or someone you know and trust that is good with finances and might know what is your best option," Reese said.
Scammers love using reverse home mortgages because they think senior citizens are easy targets.
Read more: http://www.kctv5.com/story/29056290/cautionary-tales-reverse-mortgages-could-lead-to-problems
Reverse home mortgages are complicated and not for everybody.
They are designed for seniors - 62 or older - to borrow against their home's equity. But where there is money, there are scammers.
With a regular mortgage, homeowners make monthly payments to a lender. In a reverse mortgage, a lender pays the homeowner.
The loan is repaid when the homeowner passes away, sells their home or when the home is no longer their primary residence.
That means if someone decides to sell the family home, they are not going to get as much.
"If you have a reverse mortgage on your house, and you've had it for several years. the more money you get, the more money you're going to owe on your house the less money you're going to get when you sell it," said Aaron Reese with the Better Business Bureau.
Reverse home mortgages aren't for everybody, but they do have their benefits.
"It is a really great vehicle for seniors who choose to age in place. And they don't want to out-live their money, so they'll have a little extra money available," said Victoria Duke, a professor of Law and reverse mortgage expert.
The federal government highly recommends talking to a counselor who can walk someone through the process and help them decide if it's best for them.
If the lender doesn't offer that, that is a red flag. Another red flag is who to make the check out to.
"He said, 'you are going to have to pay us $800 for three months. can you afford that?' I said, 'I guess so,'" one mortgage scam victim said.
Just last year, a metro man was charged with ripping off a 70-year-old Excelsior Springs woman in a reverse mortgage scam.
The Housing of Urban Development says Robert Todd convinced her to write the checks to him instead of the bank.
"Oh, I was mad, really upset," the victim said.
Luckily, she got her money back once Todd was charged.
"If you're looking to get a reverse mortgage, you're going to want to get some outside advice. Talk to a financial adviser or someone you know and trust that is good with finances and might know what is your best option," Reese said.
Scammers love using reverse home mortgages because they think senior citizens are easy targets.
Read more: http://www.kctv5.com/story/29056290/cautionary-tales-reverse-mortgages-could-lead-to-problems
Tuesday, May 12, 2015
Nomura, RBS Defective-Bond Suit Loss Seen Spurring Deals
Nomura Holdings Inc. and Royal Bank of Scotland Group Plc may face $500 million in damages for what a judge called an “enormous” deception in the sale of defective mortgage-backed securities, a ruling that may spur other banks to settle similar claims tied to the 2008 financial crisis.
Nomura and RBS were excoriated in a 361-page opinion by U.S. District Judge Denise Cote in Manhattan, whose ruling followed the first trial of claims that banks sold flawed securities to government-owned mortgage companies. After a three-week trial, Cote said they misled Fannie Mae and Freddie Mac and set a damages formula that may result in the government winning about half its original claim of $1 billion.
“The offering documents did not correctly describe the mortgage loans,” Cote, who heard the case without a jury, wrote Monday. “The magnitude of falsity, conservatively measured, is enormous.”
Before the trial, FHFA had reached $17.9 billion in settlements with other banks, including Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc. The ruling against Nomura and RBS may encourage other banks to settle mortgage-related suits brought by regulators and private investors rather than face the bad publicity and cost of an adverse judgment, said Robert C. Hockett, a professor at Cornell Law School.
“They look pretty bad,” Hockett said in an interview. “They look like the strategy has blown up in their faces.”
Cote ordered the Federal Housing Finance Agency, which filed the case, to propose how much the banks should pay as a result of her ruling.
‘Consistently Candid’
“Nomura is confident that it was consistently candid, transparent and professional in all of its dealings with Fannie Mae and Freddie Mac,” Jonathan Hodgkinson, a U.S.-based spokesman for the bank, said in an e-mailed statement. Nomura will appeal, he said.
Linda Harper, a U.K.-based spokeswoman for RBS, declined to comment on the decision.
FHFA is pleased with the ruling and “looks forward to submitting proposed damages,” the agency’s general counsel, Alfred M. Pollard, said in an e-mailed statement.
see more: http://www.bloomberg.com/news/articles/2015-05-11/nomura-loses-trial-over-toxic-mortgage-after-16-banks-settle
Nomura and RBS were excoriated in a 361-page opinion by U.S. District Judge Denise Cote in Manhattan, whose ruling followed the first trial of claims that banks sold flawed securities to government-owned mortgage companies. After a three-week trial, Cote said they misled Fannie Mae and Freddie Mac and set a damages formula that may result in the government winning about half its original claim of $1 billion.
“The offering documents did not correctly describe the mortgage loans,” Cote, who heard the case without a jury, wrote Monday. “The magnitude of falsity, conservatively measured, is enormous.”
Before the trial, FHFA had reached $17.9 billion in settlements with other banks, including Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc. The ruling against Nomura and RBS may encourage other banks to settle mortgage-related suits brought by regulators and private investors rather than face the bad publicity and cost of an adverse judgment, said Robert C. Hockett, a professor at Cornell Law School.
“They look pretty bad,” Hockett said in an interview. “They look like the strategy has blown up in their faces.”
Cote ordered the Federal Housing Finance Agency, which filed the case, to propose how much the banks should pay as a result of her ruling.
‘Consistently Candid’
“Nomura is confident that it was consistently candid, transparent and professional in all of its dealings with Fannie Mae and Freddie Mac,” Jonathan Hodgkinson, a U.S.-based spokesman for the bank, said in an e-mailed statement. Nomura will appeal, he said.
Linda Harper, a U.K.-based spokeswoman for RBS, declined to comment on the decision.
FHFA is pleased with the ruling and “looks forward to submitting proposed damages,” the agency’s general counsel, Alfred M. Pollard, said in an e-mailed statement.
see more: http://www.bloomberg.com/news/articles/2015-05-11/nomura-loses-trial-over-toxic-mortgage-after-16-banks-settle
Friday, May 8, 2015
Mortgage rates move higher for second week in a row
Mortgage rates moved higher for the second week in a row, according to the latest data released Thursday by Freddie Mac.
The 30-year fixed-rate average spiked to 3.8 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.68 percent a week ago and 4.21 percent a year ago. The jump of 12 basis points was the biggest gain by the 30-year fixed-rate average since November 2013 when it soared 19 basis points.
The 15-year fixed-rate average climbed to 3.02 percent with an average 0.6 point. It was 2.94 percent a week ago and 3.32 percent a year ago. The 15-year fixed rate surpassed 3 percent for the first time since March 19.
Hybrid adjustable rate mortgages were mixed. The five-year ARM average rose to 2.9 percent with an average 0.4 point. It was 2.85 percent a week ago and 3.05 percent a year ago. The five-year ARM has stayed below 3 percent since March 12.
The one-year ARM average fell to 2.46 percent with an average 0.4 point. It was 2.49 percent a week ago and 2.43 percent a year ago.
Len Kiefer, Freddie Mac deputy chief economist, cited German government bond yields for the upturn.
“Mortgage rates rose this week to the highest level since the week of March 12 as a selloff in German bunds helped drive U.S. Treasury yields above 2.2 percent,” Kiefer said in a statement.
“The U.S. trade deficit reached $51.4 billion in March to the highest level since 2008. Also, the Institute for Supply Management’s manufacturing index was unchanged in April, but manufacturing employment contracted as the index fell below 50 for the first time since May 2013.”
see more at: http://www.washingtonpost.com/blogs/where-we-live/wp/2015/05/07/mortgage-rates-move-higher-for-second-week-in-a-row-2/
The 30-year fixed-rate average spiked to 3.8 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.68 percent a week ago and 4.21 percent a year ago. The jump of 12 basis points was the biggest gain by the 30-year fixed-rate average since November 2013 when it soared 19 basis points.
The 15-year fixed-rate average climbed to 3.02 percent with an average 0.6 point. It was 2.94 percent a week ago and 3.32 percent a year ago. The 15-year fixed rate surpassed 3 percent for the first time since March 19.
Hybrid adjustable rate mortgages were mixed. The five-year ARM average rose to 2.9 percent with an average 0.4 point. It was 2.85 percent a week ago and 3.05 percent a year ago. The five-year ARM has stayed below 3 percent since March 12.
The one-year ARM average fell to 2.46 percent with an average 0.4 point. It was 2.49 percent a week ago and 2.43 percent a year ago.
Len Kiefer, Freddie Mac deputy chief economist, cited German government bond yields for the upturn.
“Mortgage rates rose this week to the highest level since the week of March 12 as a selloff in German bunds helped drive U.S. Treasury yields above 2.2 percent,” Kiefer said in a statement.
“The U.S. trade deficit reached $51.4 billion in March to the highest level since 2008. Also, the Institute for Supply Management’s manufacturing index was unchanged in April, but manufacturing employment contracted as the index fell below 50 for the first time since May 2013.”
see more at: http://www.washingtonpost.com/blogs/where-we-live/wp/2015/05/07/mortgage-rates-move-higher-for-second-week-in-a-row-2/
Thursday, May 7, 2015
Mortgage rates rise to highest level of the year so far
Mortgage rates jumped this week after the yield on the 10-year Treasury note hit its highest level in two months. The increase in rates spurred a drop-off in refinances, but purchases are still up.
The 10-year Treasury yield, which mortgage rates tend to follow, reached its highest level since March 6 after a weeklong sell-off in European bonds.
"Obviously, rates are up. The real question is what is driving it right now," says Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. "It's not necessarily U.S. growth inflation. It's what's happening in the European markets."
Dissipating worries over deflation in the eurozone prompted a global sell-off in government bonds.
2015%30-year fixedFebMarApr3.703.803.904.00
30 year fixed rate mortgage -- 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.99 percent from 3.86 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.37 percent. Four weeks ago, it was 3.82 percent. The mortgages in this week's survey had an average total of 0.23 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.08 percent. This week's rate is 0.09 percentage points lower than that 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.17 percent from 3.07 percent.
The benchmark 5/1 adjustable-rate mortgage rose to 3.19 percent from 3.11 percent.
The benchmark 30-year fixed-rate jumbo rose to 4.07 percent from 3.97 percent
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-050715.aspx
The 10-year Treasury yield, which mortgage rates tend to follow, reached its highest level since March 6 after a weeklong sell-off in European bonds.
"Obviously, rates are up. The real question is what is driving it right now," says Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania. "It's not necessarily U.S. growth inflation. It's what's happening in the European markets."
Dissipating worries over deflation in the eurozone prompted a global sell-off in government bonds.
2015%30-year fixedFebMarApr3.703.803.904.00
30 year fixed rate mortgage -- 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.99 percent from 3.86 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.37 percent. Four weeks ago, it was 3.82 percent. The mortgages in this week's survey had an average total of 0.23 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.08 percent. This week's rate is 0.09 percentage points lower than that 52-week average.
The benchmark 15-year fixed-rate mortgage rose to 3.17 percent from 3.07 percent.
The benchmark 5/1 adjustable-rate mortgage rose to 3.19 percent from 3.11 percent.
The benchmark 30-year fixed-rate jumbo rose to 4.07 percent from 3.97 percent
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-050715.aspx
Tuesday, May 5, 2015
Family-funded reverse mortgage can help elderly parents keep home
WASHINGTON — Could there be a way to help senior homeowners with their cash flow needs without saddling them — and ultimately their families — with high costs?
That's a key question at a time when millions of seniors are flooding into their post-retirement years, many of them with equity in their homes but insufficient income to handle expenses over the long term. If they want to stay in their homes, they can opt for a government-insured reverse mortgage, which may provide them cash in exchange for repayment plus interest after they die, move out or sell. Or they can apply for a home equity line of credit from a bank.
But there are problems with both choices. The dominant government-insured reverse mortgage program comes with high upfront lender fees, mortgage insurance premiums and newly toughened financial qualification requirements. A home equity credit line may be difficult for seniors to obtain because they cannot qualify on credit or debt-to-income grounds in today's stricter underwriting environment.
As of Friday nationwide, however, some seniors had a new option — one that ties into increasingly popular "peer-to-peer" lending. It's a family-funded reverse mortgage known as the "Caregiver" loan. It allows any number of children and grandchildren to pool resources to provide a flexible line of credit at interest rates far below what commercial reverse mortgage lenders charge and with far fewer hassles. In intra-family lending, there's no bank or mortgage company. Family members are the bank.
Here's a simplified example: Say you and two siblings want to help Mom and Dad, who are in their late 70s. You and your siblings are all doing well enough that you have at least some cash to spare. Ultimately, you want to retain your parents' house for the estate once your parents pass away, keep costs to a minimum and only sell the property when you, not a faraway bank, choose to.
So you sit down with Mom and Dad and determine that, at least for the foreseeable future, they will need about $1,500 in additional income a month. You and your siblings agree to apportion the payments among yourselves in some way, maybe a commitment of $500 a month each for a period of years. You also pick an interest rate that achieves a good result for you and your parents — say 3% annually. That's much lower than a commercial lender could charge but higher than what you've been earning on your bank deposits or money market funds. There are no required fees upfront — hey, it's Mom and Dad.
What you need at this stage is help with putting all the details of your agreement into a legally binding reverse mortgage, recordable at the local courthouse. Enter National Family Mortgage, a Massachusetts company that has helped facilitate and service nearly $290 million in intra-family home loans in recent years — typically parents helping kids buy first homes. Now National Family is expanding its menu to include reverse mortgages.
see more at: http://www.latimes.com/business/realestate/la-fi-harney-20150503-story.html
That's a key question at a time when millions of seniors are flooding into their post-retirement years, many of them with equity in their homes but insufficient income to handle expenses over the long term. If they want to stay in their homes, they can opt for a government-insured reverse mortgage, which may provide them cash in exchange for repayment plus interest after they die, move out or sell. Or they can apply for a home equity line of credit from a bank.
But there are problems with both choices. The dominant government-insured reverse mortgage program comes with high upfront lender fees, mortgage insurance premiums and newly toughened financial qualification requirements. A home equity credit line may be difficult for seniors to obtain because they cannot qualify on credit or debt-to-income grounds in today's stricter underwriting environment.
As of Friday nationwide, however, some seniors had a new option — one that ties into increasingly popular "peer-to-peer" lending. It's a family-funded reverse mortgage known as the "Caregiver" loan. It allows any number of children and grandchildren to pool resources to provide a flexible line of credit at interest rates far below what commercial reverse mortgage lenders charge and with far fewer hassles. In intra-family lending, there's no bank or mortgage company. Family members are the bank.
Here's a simplified example: Say you and two siblings want to help Mom and Dad, who are in their late 70s. You and your siblings are all doing well enough that you have at least some cash to spare. Ultimately, you want to retain your parents' house for the estate once your parents pass away, keep costs to a minimum and only sell the property when you, not a faraway bank, choose to.
So you sit down with Mom and Dad and determine that, at least for the foreseeable future, they will need about $1,500 in additional income a month. You and your siblings agree to apportion the payments among yourselves in some way, maybe a commitment of $500 a month each for a period of years. You also pick an interest rate that achieves a good result for you and your parents — say 3% annually. That's much lower than a commercial lender could charge but higher than what you've been earning on your bank deposits or money market funds. There are no required fees upfront — hey, it's Mom and Dad.
What you need at this stage is help with putting all the details of your agreement into a legally binding reverse mortgage, recordable at the local courthouse. Enter National Family Mortgage, a Massachusetts company that has helped facilitate and service nearly $290 million in intra-family home loans in recent years — typically parents helping kids buy first homes. Now National Family is expanding its menu to include reverse mortgages.
see more at: http://www.latimes.com/business/realestate/la-fi-harney-20150503-story.html
Friday, May 1, 2015
Mortgage rates rise, even in a weak economy
Mortgage rates increased this week as yields on government bonds spiked. Still, rates will likely stay low down the road as an economy recovering from a severe winter keeps the Federal Reserve from raising interest rates too soon.
Housing picture mixed
After last week's good housing data, the state of the home market looked more conflicted this week. New home sales disappointed in March, falling 11.4 percent, while the volume of mortgage applications fell 2.3 percent last week from the previous one, according to the National Mortgage Bankers Association. That included a 4 percent decline in refinances and a flat reading on purchase applications.
Those downbeat reports were balanced out by Standard & Poor's/Case-Shiller Home Price Index on April 28, which showed values in 20 cities increased in February 0.9 percent month over month (seasonally adjusted) and 5 percent year over year (non-seasonally adjusted). Pending home sales for April edged up 1.1 percent, the third straight month of increases, according to an April 29 report from the National Association of Realtors.
2015%30-year fixedFebMarApr3.703.803.904.0030-year fixed02/11/2015 : 3.90%
30 year fixed rate mortgage -- 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.86 percent from 3.79 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.44 percent. Four weeks ago, it was 3.82 percent. The mortgages in this week's survey had an average total of 0.22 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.09 percent. This week's rate is 0.23 percentage points lower than that 52-week average.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-043015.aspx
Housing picture mixed
After last week's good housing data, the state of the home market looked more conflicted this week. New home sales disappointed in March, falling 11.4 percent, while the volume of mortgage applications fell 2.3 percent last week from the previous one, according to the National Mortgage Bankers Association. That included a 4 percent decline in refinances and a flat reading on purchase applications.
Those downbeat reports were balanced out by Standard & Poor's/Case-Shiller Home Price Index on April 28, which showed values in 20 cities increased in February 0.9 percent month over month (seasonally adjusted) and 5 percent year over year (non-seasonally adjusted). Pending home sales for April edged up 1.1 percent, the third straight month of increases, according to an April 29 report from the National Association of Realtors.
2015%30-year fixedFebMarApr3.703.803.904.0030-year fixed02/11/2015 : 3.90%
30 year fixed rate mortgage -- 3 month trend
The benchmark 30-year fixed-rate mortgage rose to 3.86 percent from 3.79 percent last week, according to the Bankrate.com national survey of large lenders. One year ago, that rate was 4.44 percent. Four weeks ago, it was 3.82 percent. The mortgages in this week's survey had an average total of 0.22 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 4.09 percent. This week's rate is 0.23 percentage points lower than that 52-week average.
Read more: http://www.bankrate.com/finance/mortgages/mortgage-analysis-043015.aspx
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