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Reverse Mortgages

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BUSINESS
July 28, 1999 | EDMUND SANDERS, Edmund Sanders covers financial institutions and fraud for The Times. He can be reached at (714) 966-5811 and at edmund.sanders@latimes.com
Seniors living in Laguna Woods may now take advantage of a unique reverse mortgage product under a program launched this month by Fannie Mae. Under the program, owners of co-ops in Leisure World will be able to gain the same access to reverse mortgages that other senior homeowners have had for years. Reverse mortgages allow seniors to tap into their home's equity. In most reverse mortgages, no monthly payments are due until after the senior dies or moves.
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BUSINESS
September 13, 2013 | By Kenneth R. Harney
WASHINGTON - For homeowners who were looking to the federal government's reverse mortgage program to supply lots of cash for their retirement years, here's a heads-up: The pipeline just got narrower. Pressed by Congress to slash losses, the Federal Housing Administration recently outlined a series of steps designed to limit the maximum amounts that seniors can draw down on their homes and to make qualifying for a reverse mortgage tougher. Starting in January, applicants for FHA-backed reverse mortgages for the first time will have to qualify under comprehensive new "financial assessments" - covering credit history, household cash flow and debt levels - to make sure they have the "capacity and willingness" to meet their financial obligations under the terms of the loan.
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REAL ESTATE
June 14, 1998 | ROBERT J. BRUSS, SPECIAL TO THE TIMES
For as long as I can remember, the lone crusader for senior citizen reverse mortgages has been Ken Scholen. His National Center for Home Equity Conversion has brought about the current abundance of reverse mortgages. Reverse mortgages pay people over age 62 either a lump sum or monthly payments, which need not be repaid until the homeowner either dies, moves or sells the home. Today, reverse mortgages are easily available from major lenders such as Fannie Mae, Transamerica, FHA and others.
BUSINESS
July 19, 2013 | By Kenneth R. Harney
WASHINGTON - Call it the estate-devouring, nightmare home loan you hope to never encounter: a reverse mortgage with a base interest rate of 9.95%, plus a 50% share for the lender of increases in value of the house after closing, plus a 2% "maturity fee" to sweeten the payout even more. On top of that, there's a $33,000 mandatory purchase of an annuity by the homeowner that is added to the principal balance and incurs compounding interest while lessening the lender's future payments to the homeowner.
BUSINESS
September 13, 2013 | By Kenneth R. Harney
WASHINGTON - For homeowners who were looking to the federal government's reverse mortgage program to supply lots of cash for their retirement years, here's a heads-up: The pipeline just got narrower. Pressed by Congress to slash losses, the Federal Housing Administration recently outlined a series of steps designed to limit the maximum amounts that seniors can draw down on their homes and to make qualifying for a reverse mortgage tougher. Starting in January, applicants for FHA-backed reverse mortgages for the first time will have to qualify under comprehensive new "financial assessments" - covering credit history, household cash flow and debt levels - to make sure they have the "capacity and willingness" to meet their financial obligations under the terms of the loan.
BUSINESS
December 3, 1995 | CARLA LAZZARESCHI
Q: I read recently that the number of reverse mortgages available to older homeowners would soon be increasing. How do I find out more about these mortgages and whether I can or should even want to qualify for one? --A.C.R. * A: Last month, the Federal National Mortgage Assn., the nation's largest provider of home loans, said it would begin next year to offer reverse mortgage to eligible older homeowners.
BUSINESS
August 25, 1999 | Sue McAllister
Federal and state regulators should ensure that seniors have access to unbiased financial counseling in order to protect against hazards associated with so-called reverse mortgages, Consumers Union said in a report. A reverse mortgage allows those over 62 who own their homes to borrow against the equity and then receive monthly or lump-sum payments from a mortgage lender.
BUSINESS
June 29, 1993 | Ron Galperin
A few months ago Evelyn Judisch felt like she was headed for financial ruin. Judisch, 83, had amassed $15,000 in credit card bills for medication needed to keep her 94-year-old husband alive. "It got to the point where it was too much," she recalled. A home equity loan was out of the question for her and her husband--who has since died--because they had barely enough income to get by.
BUSINESS
August 30, 1996 | JUDITH EVANS, WASHINGTON POST
Four years ago, Prestonia Morgan faced a financial crisis after her husband died of a stroke. Morgan didn't know whether she and her disabled daughter would be able to remain in their home, because they were losing part of her husband's pension and other retirement benefits. Morgan eventually solved her financial problems by taking out a reverse mortgage guaranteed by the Department of Housing and Urban Development's Federal Housing Administration.
NEWS
April 27, 1997 | Associated Press
The Senate approved a bill Friday intended to protect the elderly from con artists who charge exorbitant fees for reverse mortgages that provide cash to older homeowners. The legislation, approved on a voice vote, is an attempt to halt "thieves, con artists, swindlers masquerading as helpers to the elderly who are really nothing more than rip-off artists," said Sen. Alfonse D'Amato (R-N.Y.) the bill's key sponsor.
BUSINESS
April 12, 2013 | Liz Weston, Money Talk
Dear Liz: I try to watch out for my neighbors, a married couple in their early 90s. Two of their three sons, who are both in their 60s, want them to get a reverse mortgage. The couple's house is paid off as well as their cars. They pay all their monthly bills with Social Security and his pension. They have a living trust as well. Neither I nor the couple see any reason or upside but the sons are pressuring. Any input? Answer: A reverse mortgage is typically a last-resort option for elderly people who are strapped for cash and who have few options for generating income other than tapping their home equity.
BUSINESS
March 1, 2013 | By Kenneth R. Harney
WASHINGTON - Jeanette Ogle, a 92-year-old widow with a reverse mortgage on her house, got a huge birthday surprise recently: She did not lose her home at a scheduled foreclosure auction that had drawn scrutiny from federal and state agencies and consumer advocates. Because of obscure federal rules that critics say have snared unwitting elderly homeowners across the country, Ogle's home in Lake Havasu City, Ariz., had been set for foreclosure on Feb. 27, her birthday. But after interventions on her behalf by the federal Consumer Financial Protection Bureau, AARP and the Arizona attorney general's office, the auction was canceled.
BUSINESS
December 30, 2012 | By Kenneth R. Harney
WASHINGTON — You've probably seen the reverse mortgage pitchmen at work on your TV screen — former Sen. Fred Thompson and actors Robert Wagner and Henry "Fonzie" Winkler prominent among them — urging seniors to pull cash out of their homes through a loan program guaranteed by the federal government. But it looks as if the pitchmen will have fewer and smaller mortgages to sell in 2013. In a move aimed at controlling losses to its insurance funds, the Federal Housing Administration is clamping a moratorium on the most popular form of reverse mortgage — the so-called standard version, which allows large lump-sum drawdowns of cash at fixed interest rates.
BUSINESS
June 28, 2012 | By Jim Puzzanghera
WASHINGTON -- As the Consumer Financial Protection Bureau released a report Thursday warning of the risks of reverse mortgages, it also offered tips for people considering taking one out. The agency's four pages of guidance -- which urge caution -- is one of several resources online for older homeowners thinking of using a reverse mortgage to tap their home equity. Consumers Union , AARP , and the National Reverse Mortgage Lenders Assn. , an industry trade group, also offer detailed advice on how to approach the complex financial product.
BUSINESS
June 28, 2012 | By Jim Puzzanghera, Los Angeles Times
WASHINGTON - As some older Americans try to improve their finances by tapping home equity through reverse mortgages, many are at risk of ending up in a worse situation because of confusion over the complex terms of the loans, according to a new government report. There is a growing tendency for seniors to obtain the money at a younger age and in a lump sum instead of annual installments designed to spread the dollars through their retirement - problems that could accelerate as the baby boom generation goes gray, according to the report to be released Thursday by the Consumer Financial Protection Bureau.
BUSINESS
February 19, 2012 | By Lew Sichelman
The recent conviction of a Delray Beach, Fla., loan officer for his participation in a scheme to persuade seniors to refinance their reverse mortgages should serve as a warning to the friends and relatives of elderly people about the surprising ease with which senior homeowners can be exploited. That the loan officer and his co-conspirators, including a title agent, were creating false loan applications and pocketing the money casts a pall over the lending business. And with good reason, according to the National Council on Aging, which ranks homeowner/reverse mortgage scams as the eighth most prevalent scam specifically targeting seniors.
REAL ESTATE
March 12, 1995 | KENNETH R. HARNEY, SPECIAL TO THE TIMES
Thousands of senior homeowners will turn into more sophisticated mortgage shoppers under new proposals unveiled recently by the Federal Reserve Board. The proposals, expected to take effect this year, will force lenders offering reverse mortgages anywhere in the United States to make detailed new cost disclosures that allow consumers to readily compare the pros and cons of competing loans.
BUSINESS
February 5, 2012 | Liz Weston, Money Talk
Dear Liz: My healthy and active 82-year-old mother is faced with having to sell her home this year because she's running out of money. She has lived a very minimal lifestyle for many years as her savings dwindled, and her income is now basically Social Security. She owes $25,000 on a home worth more than $700,000 in a top school district. We don't know if we are jumping the gun with this sale. I could move in with her and pay rent for a year or two, although that would mean a longer commute for me and would just put off the day she has to sell.
BUSINESS
May 1, 2011 | By Lew Sichelman
Reverse mortgages may very well be a good choice for some seniors who need to tap into equity they have in their homes. But there are other options elder owners might also want to consider. For example, some state and local governments offer a less costly version of a reverse mortgage called a deferred payment loan (DPL). Generally, there are no origination fees and insurance premiums, and closing costs, if any, are very low. The interest rate on DPLs is low as well, if interest is charged at all. When it is, it's often on a fixed basis, meaning that the rate never changes.
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