You may not have realized it, but your home is a unique combination of savings and investing.  Throughout your life, you have built home equity from two distinctly different processes, and in most cases both. 

The first process is amortization and the second is appreciation.  When you combine both of these processes, time will help you build a valuable savings and investment machine.

First, amortization works like this:  for example you bought your home for $100,000 with a 20% down payment and you borrowed the difference of $80,000.  Over the course of the term of the mortgage, you make your monthly payments.  Over time, you continue to reduce the mortgage balance and at the same time your home equity is building.   At the end of few years,  you now have a $100,000 in equity.  So in reality, amortization looks a lot like savings.

Next, appreciation mirrors more like an investment.  Investments have a tendency to go  up and down over a period of time, but in most cases the investment will grow if you retain it long itself.  In reality appreciation is a lot more fun than amortization, because we know that many times the appreciation will grow even faster than amortization, but not always.

When you combine amortization and appreciation, the result is home equity.  It is this home equity that makes home ownership such a good investment.  It’s one of the very few investments you can make that return both a place to live and a place to leverage.

If you have built up home equity, now may be the time to see if you can put that home equity to work for you with a reverse mortgage.  Want to know more….
********************************************************
For a free informational package on reverse mortgage programs,
call Sam Collins, Delaware Financial, 877-266-9500 toll-free.
********************************************************
For more information or to ask a question, you can email
Sam by using the contact form at the top of this page.
********************************************************
If you want to see how much you qualify to receive,
for your reverse mortgage, you are welcome to use our
Free reverse mortgage calculator:
http://www.seniorsrighttoknow.org/calculator.html

When I hear about senior homeowners facing foreclosure, I find this subject tremendously troublesome.  It seems I am encountering more and more senior homeowners experiencing the possibility of foreclosure, which leads to losing their home and no place to live.  

Case Study: 

Here is one of my most recent encounters with a senior facing foreclosure. I received a call from a senior who was in a panic.  She was a 78 widower and was quite upset about her situation.  She indicated she was going to foreclosure on June 15^th.  Now this was June 3.  I went to work quickly to meet with her that day to determine exactly all the facts.   I was able to meet with her two hours later.  I found that she had only one mortgage for about $19,000 with a home value of about $125,000.

It was obvious during our meeting, our client was very nervous and concerned about the idea of losing her home.  By the next day I had contacted the court, the appraiser, she had her counseling completed, and the foreclosure stopped.  No doubt our Senior was quite happy and relieved she would not be living on the street.

I hope you never have to face the threat of having a foreclosure, however knowing what to do and the resources available are important.  Here are a few:

 Q: What Happens if I Miss My Mortgage Payments?

Foreclosure may occur. This is the legal means that your lender can use to repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. If that happens, you could lose your home,

Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if possible.

Q: What Should you Do?

DO NOT IGNORE THE LETTERS FROM YOUR LENDER. If you are having problems making your payments, call or write to your lender’s Loss Mitigation Department without delay. Explain your situation. Be prepared to provide them with financial information, such as your monthly income and expenses. Without this information, they may not be able to help.

Stay in your home for now. You may not qualify for assistance if you abandon your property.
 Contact a HUD-approved housing counseling agency. Call (800) 569-4287 or TDD (800) 877-8339 for the housing counseling agency nearest you.

Q: What Are Your Alternatives?

You may be considered for the following:

Special Forbearance. Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses. You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.

Mortgage Modification. You may be able to refinance the debt and/or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem and can afford the new payment amount.

Deed-in-lieu of foreclosure. As a last resort, you may be able to voluntarily “give back” your property to the lender. This won’t save your house, but it is not as damaging to your credit rating as a foreclosure.

You may qualify if:

• you are in default and don’t qualify for any of the other options;
• your attempts at selling the house before foreclosure were unsuccessful; and

Q: How Do I Know if I Qualify for Any of These Alternatives?

Your lender will determine if you qualify for any of the alternatives. A housing counseling agency can also help you determine which, if any, of these options may meet your needs and also assist you in interacting with your lender. Call (800) 569-4287 or TDD (800) 877-8339.

Q: What other things should you be aware?

Yes. Beware of scams! Solutions that sound too simple or too good to be true usually are. If you’re selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty. Be especially alert to the following:

Equity skimming. In this type of scam, a “buyer” approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. The “buyer” may suggest that you move out quickly and deed the property to him or her. The “buyer” then collects rent for a time, does not make any mortgage payments, and allows the lender to foreclose. Remember, signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.

Phony counseling agencies. Some groups calling themselves “counseling agencies” may approach you and offer to perform certain services for a fee.  Be careful.  Check with the local chamber of commerce or the state division of consumers.

Q: Are There Any Precautions I Can Take?

Here are several precautions that should help you avoid being “taken” by a scam artist:

Don’t sign any papers you don’t fully understand.

Make sure you get all “promises” in writing.

Beware of any contract of sale of loan assumption where you are not formally released from liability for your mortgage debt.

Check with a lawyer or your mortgage company before entering into any deal involving your home.

If you’re selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact your state’s Attorney General, the State Real Estate Commission, or the local District Attorney’s Consumer Fraud Unit for this type of information.

Q: What Are the Main Points I Should Remember?

Don’t lose your home and damage your credit history. Call or write your mortgage lender immediately and be honest about your financial situation.

Do not sign anything you don’t understand. And remember that signing over the deed to someone else does not necessarily relieve you of your loan obligation.

Act now. Delaying can’t help. If you do nothing, You stand the chance of losing your home  and your good credit rating.

Always consult with a trusted friend, accountant or lawyer when  faced with  the  likeness of a foreclosure.

“The freedom of not having to pay out that $640 every month was unbelievable, especially when you’re retired,” said the woman in the Courant.

Because they have other sources of retirement income, the couple has not touched the $200,000 line of credit. “We can use it if we want or let it sit there. It gives us peace of mind to know we’ve got that $200,000 line of credit,” she said.  ”You do have to sell the house after either my husband or I would pass, but our kids are O.K. with that.”

The article also details how the HECM for purchase program allows seniors to streamlies the process of downsizing by allowing them to use a HECM to purchase a home in a single transaction, to reduce closing costs.

“People were doing this anyway,” said Susanna Montezemolo, vice president of federal affairs at the Center for Responsible Lending. “This new category of reverse mortgage reduces costs.”

Unlike a traditional home equity loan or second mortgage, repayment of either type of reverse mortgage is not required until the homeowner dies, moves or sells the home.

“A lot of people think that once you run out of the money, it triggers a repayment event,” Harrington said. “That’s not the case.”

Despite some of the negative press around the product, Jeff Lewis, Chairman of Generation Mortgage, said most of the negatives floating around are dramatically overstated.  ”As long as you maintain your home and pay your property taxes and insurance, you can’t be forced to leave. Homeowners still retain title and ownership to their homes during the life of the loan, and can choose to sell it at any time,” Lewis said.

To read the full article,  Let the Buyer Beware

Recently there have been significant changes by lenders to the FHA insured  HECM (Home Equity Conversion Mortgage)  fixed rate, reverse mortgage program.  In essence these changes mean:

More Cash for Senior Homeowners! 

Here are the most noteworthy changes to the HECM Fixed program:

1.  The service fee set asides is now zero.  Yes, in most cases eliminated. 

2.  The monthly service fee is now zero.  Most lenders have eliminated this fee.

What does this mean for you and other 62 or older homeowners?

Previously, lendrers calculation included a monthly service fee for the life of your reverse mortgage loan.  These charges amounted up to $35.00 per month servicing fee.  Now this monthly serving fee charge has been  reduced to zero by most lenders. The previous calculations included thousands of dollars in the calculation that was set aside to pay this monthly fee, which resulted in less net money or funds available for you when you complete a reverse mortgage.
  

For many senior homeowners eliminating the service fee set aside can increase the amount of cash you receive significantly.  This is a huge savings for you and means now you can receive $2,000 to $ 5,000+ more money at closing because of the FHA monthly service fee set aside now being reduced to zero.

More changes:

Many lenders have reduced their reverse mortgage origination fees on the fixed rate reverse loan significantly.   This can mean as much as $2500 or more at closing in reduced origination fee.  Net result of these changes mean more cash for you.

These changes combined can effectively provide $5,000 - up to $ 10,000 extra cash back in your pocket at the time of closing. These changes are a huge additional benefit for senior homeowners who are 62 or older.  Also, these changes can mean some homeowners who did not qualify previously, may qualify now.

If you thought that the FHA reverse mortgage closing costs were too expensive, these changes can be a  major savings opportunity for you.

How long will these changes last?

We are not sure how long this offer will remain and suggest that you still weigh your financial options.  But considering that nothing lasts forever, these changes do present clear and present reasons for consideration. Please note these changes may vary by lender.
  

If you are serious about a reverse mortgage loan, this may be the time for you to get a new estimate of what these great savings will mean for you!

If you have any questions about these changes, do not hesitate to contact us with your questions or concerns.

Last December, I was contacted by a senior couple who applied for a reverse mortgage.  Their primary goal for doing the reverse mortgage was to rid themselves of two mortgages totaling around $90,000.   Mrs. Z, wanted to fully retire and did  not have to worry about working.  Mr. Z was unable to work, because of  severe arthritic joint pain.

We took the application and ordered the appraisal.  Unfortunately the home value came in around $10,000 less than we expected.  This unexpected drop in value, left the loan shortfall.  Shortfall  is when there is not enough equity (based on appraised value) to cover the amount of money owed on the residence.  In the case of Mr. & Mrs. Z the shortfall was around $3800 and they did not have enough reserves to cover the difference.  Therefore, unfortunately we were unable to do their reverse mortgage in December.

Finally, some good news.  About a month ago, we announced several changes in our programs.  Our fixed rate HECM (reverse mortgage) program, no longer has a service fee set aside in it’s calculations, thereby yielding around $4500 more to Mr & Mrs. Z.  Plus, our fixed mortgage program no longer has an origination fee, thereby yielding another $3000 for Mr. & Mrs. Z.  The bottom line new calculation resulted in Mr. & Mrs. Z yielding about $3400 in cash,  plus being able to pay off their two mortgages and eliminating their mortgage payment, yielding an additional cash flow of $12,000 per year. 

Finally, some good news for seniors who may have had a shortfall in the past.   
**************************************************
For a free informational package on reverse mortgage programs,
call Sam Collins, Delaware Financial, 877-266-9500 toll-free.
********************************************
For more information or to ask a question, you can email
Sam by using the contact form at the top of this page.
**********************************************
If you want to see how much you qualify to receive,
for your reverse mortgage, you are welcome to use our
Free reverse mortgage calculator:
http://www.seniorsrighttoknow.org/calculator.html

One of the very first questions I am asked when meeting with my senior homeowner clients is, “Why are the closing costs to do a reverse mortgage are so expensive?”    Thanks to recent changes within the reverse mortgage lending community, senior homeowners can now enjoy a much lower than ever expected costs to do a reverse mortgage.

Specifically most of the recent changes have affected the fixed rate HECM product.  Most lenders have eliminated the service fee aside and some have eliminated or reduced origination fees.  The bottom line is this; some of the highest cost associated with doing a HECM fixed mortgage have been significantly reduced. 

The winner with all these changes are senior homeowners.  Why?  Because these reduced cost measures mean more money in the pockets for senior homeowners, making a good deal ever better.
**************************************************
For a free informational package on reverse mortgage programs,
call Sam Collins, Delaware Financial, 877-266-9500 toll-free.

********************************************
For more information or to ask a question, you can email
Sam by using the contact form at the top of this page.
**********************************************
If you want to see how much you qualify to receive,
for your reverse mortgage, you are welcome to use our
Free reverse mortgage calculator:
http://www.seniorsrighttoknow.org/calculator.html

Post by Sam Collins

The perfect storm!  You are retired, living on social security and a very small pension.  The electric company knocks on your door and informs you the electric is being turned off in 30 minutes!  Oh my!

Last Thursday, I received a call from a frightened daughter, who explained to me the scenario just described.  Her Mom was desperate because her electric had been turned off.  The only glimpse of hope was her Mom owned her home with no mortgage, “Could I help them with a reverse mortgage?”

My team sprung into immediate action to visit with the daughter and her Mom that evening.  With flashlight in hand, I completed an application and by noon the next day, the daughter and her Mom had taken HUD counseling.  

The next day we attempted to help get the electric turned back on in the house.   Unfortunately, there was over $6000 past due.  Not to detail it all, the Mom had been very benevolent and found herself in a pickle, unable to pay her electric.   To top things off the house needs some repairs, but nothing that cannot be solved with a reverse mortgage. 

Thanks to her daughter, her Mother will be able to stay with her, why we continue to work with social services to restore her electric.  I feel confident we will have things on track soon, electric restored; Mom back in her home where she wants to live without worry!  Yes, a reverse mortgage can help and improve seniors lives!  
**************************************************
For a free informational package on reverse mortgage programs, call Sam Collins, Delaware Financial, 877-266-9500 toll-free.

********************************************
For more information or to ask a question, you
can email by using the form at the top of this
page or contact me at the email below.
**********************************************
If you want to see how much you qualify to receive,
for your reverse mortgage, you are welcome to use our
Free reverse mortgage calculator:
http://www.seniorsrighttoknow.org/calculator.html

Sam Collins, President, Senior Advisor
Delaware Financial Capital Corp.
Licensed Mortgage Banker, DE, MD
Licensed by the PA Dept. of Banking

This is based on the best information currently available and is not meant as financial or medical advice.

As governmental agencies write regulations to support the health care law, there will certainly be unintended consequences,  for sure, and some things will change. Many will be affected in some way by the coming changes to the nation’s health care system. Some people will have greater access to care at more affordable prices. Some will see little or no change in benefits, yet others will see increases.  The affects of these changes will be interesting - get ready for the ride.

Here is an example:
 A family of two, husband 73, wife 70, retired, and insured through Medicare with a supplemental Medicare Advantage Plan.

• Annual income: $65,000

• Effect on coverage: Medicare will pay for an annual checkup, and deductibles and co-payments for many preventive services and screenings will be eliminated. The so-called Medicare prescription drug doughnut hole will gradually narrow every year until it is eliminated in 2020. If the couple’s drug expenses cause them to fall into the so-called prescription “doughnut hole,” they could receive a $250 rebate this year and starting next year get a 50 percent discount on all brand-name drugs until the hole is closed in 10 years.

Also, their coverage could be affected by a Medicare pilot program scheduled to begin in 2013. It would test making single, “bundled” payments to hospitals and doctors for certain procedures, rather than making separate payments to the facility and physicians – encouraging them to work together to control quality and costs. It would move medical charges away from the fee-for-service system that pays providers separately for individual services – an arrangement critics say leads to doctors and hospitals delivering more services, but not better care.

• Effect on pocketbook: No additional taxes, but the Medicare Advantage plan, which is run by insurers under contract with the government, will see a significant drop in subsidies, potentially leaving this couple and as many as 10 million other Medicare Advantage beneficiaries with higher premiums or reduced benefits.

Here is an example:
 An insured - through Medicaid.  A single man, 82, retired, living in nursing home

• Annual income: $23,000

• Effect on coverage: No significant change, although some additional preventive services may be covered at no additional cost.

• Effect on pocketbook: No additional taxes.
 

Consult with your Medicare plan, consultant, tax advisor, and visit http://www.medicare.gov for more information.
(Source:  Research RT,  Washington Post, New York Times, Wall Street Journal, Kaiser Family Foundation, U.S. Census Bureau, U.S. Department of Health and Human Services)
*****************************************
For a free informational package on the reverse mortgage program, call Sam Collins, Delaware Financial, 877-266-9500 toll-free.

********************************************
For more information or to ask a question, you
can email by using the form at the top of this
page or contact me at the email below.
**********************************************
If you want to see how much you qualify to receive,
for your reverse mortgage, you are welcome to use our
Free reverse mortgage calculator:
http://www.seniorsrighttoknow.org/calculator.html

Sam Collins, President, Senior Advisor
Delaware Financial Capital Corp.
Licensed Mortgage Banker, DE, MD
Licensed by the PA Dept. of Banking

I can’t help but tell you this story about Ms. P.  

When I met her, she was very timid and scared.  She told me things were good about 2 years ago.  She and her Mother lived together and things were going along just fine, until unfortunately her Mom passed away.  When that happened Ms. P saw the household income shrink by over 50%.  

Ms. P for the past 2 years was sweating every month, while her credit card debt kept growing larger and soon the payment were getting higher.  After 2 years the wheels on the bus were starting to unravel.  The credit card company froze her credit card limit,  pumped up the rate, and there you have a disastrous financial position, which could lead to the  possibility of the loss of her home.

Ms. P and I worked out a cash flow budget and soon we saw the problem.  Ms.P was going negative cash flow $500 per month, hence growing credit card debt.  Ms.P said she had looked for a  job to supplement her  shortfall, but no one would hire her.  You see, she was missing quite a few of her teeth and was very self conscious of her appearance.  Hence, she lacked confidence during her job interviews. 

Fortunately for Ms. P, she and her Mother had paid down the mortgage, so she had equity and was able to do a reverse mortgage.

Today, her loan was funded.  She came into the office and  was singing our praises.  She was one happy lady.  She said the first thing she wanted to do was get an appointment to have her teeth fixed.  (isn’t that great!)  Next, she was going to the bank and pay off her high interest credit card. 

Ms, P, said this past week was the first time she has been able to sleep for over a year without having to wake up wondering how she going to feed herself and pay her bills.

(*name & photo’s changed to protect client’s identity)

For a free informational package on the reverse mortgage program, call Sam Collins, Delaware Financial, 877-266-9500 toll-free.

********************************************
For more information or to ask a question, you
can email by using the form at the top of this
page or contact me at the email below.
**********************************************
If you want to see how much you qualify to receive,
for your reverse mortgage, you are welcome to use our
Free reverse mortgage calculator:
http://www.seniorsrighttoknow.org/calculator.html

Sam Collins, President, Senior Advisor
Delaware Financial Capital Corp.
Licensed Mortgage Banker, DE, MD
Licensed by the PA Dept. of Banking