Wondering if you meet the qualifications for a reverse mortgage?
Thanks to reverse mortgages, many senior homeowners have been able to make home improvements, travel, pay off medical expenses, or supplement their income by tapping into their home equity. Reverse mortgages have become much safer, more accessible, and more popular thanks to the current Federal Housing Administration (FHA) rules.
There are several different reverse mortgage programs, which vary based on how you choose to receive your funds (one lump sum, monthly payments, or a line of credit), the value of the home, and how the loan is insured. Qualifications for reverse mortgages differ based on the program that is optimal for your situation.
The FHA-insured reverse mortgage or Home Equity Conversion Mortgage (HECM) is the most common reverse mortgage and comes with specific application requirements, including:
Age Requirement
Since reverse mortgages are for seniors, at least one of the borrowers must be 62 or older to qualify for the HECM program. If you or your spouse is not 62 years or older, the younger spouse can be considered a non-borrowing spouse on the loan. The spouse who is not at least 62 can remain in the house after the death of the spouse who is 62 years or older, but they will not have access to the related funds. A younger spouse could also affect the amount of funds available to you.
Home Ownership
When qualifying for a reverse mortgage, you must own the home outright or have substantial home equity. Even if you have an existing mortgage, qualifying for a reverse mortgage may still be possible if your equity is 60% or more. The reverse mortgage would pay off your mortgage and any other property liens before issuing any additional available funds to you.
You must live in the home as your primary residence. Though you may own other homes, vacation homes are ineligible for reverse mortgages. Multi-unit homes may be eligible if you live in one of the units. Some manufactured homes, condominiums, and townhouses may be eligible if they meet HUD requirements. Ultimately, to decide if your home meets the qualifications for a reverse mortgage, an appraisal will need to take place.
Financial Requirements
The borrower(s) must meet with a HUD-approved reverse mortgage counselor before applying for a reverse mortgage loan. The session is to ensure that the borrower comprehends the reverse mortgage process and understands the loan terms and the associated costs.
One of the qualifications for a reverse mortgage is that the borrower must show that they have the ability and are willing to meet loan obligations, including upkeep of the property and staying current on property taxes and insurance. The lender must financially assess all reverse mortgage applicants to determine their ability to fulfill loan obligations. If it is determined that the borrower may not have the financial ability to stay current on home maintenance, taxes, and insurance, a portion of the reverse mortgage proceeds may be set aside to cover these costs.
Other Considerations
A few other things to keep in mind when applying for a reverse mortgage are:
A current appraisal will be required.
Reverse mortgage loan amounts are based on current interest rates.
Closing costs can usually be financed in the reverse mortgage with no out-of-pocket costs to pay at closing.
Have Questions? Let Northwest Reverse Mortgage Help!
It may seem a bit daunting considering all the rules for qualifying for a reverse mortgage. That’s where Northwest Reverse Mortgage can help. Our reverse mortgage specialists can help you determine if you qualify and give you the best options for your circumstances. Contact us today to set up an appointment to get started!
If you are considering getting a reverse mortgage, you may have done some research or even know someone who has one. Getting a reverse mortgage is an excellent way for people 55 years and older to convert their home equity to cash that they can use for additional retirement funds, home improvements, or medical expenses. Reverse mortgages allow the homeowner to remain in their home during retirement and retain the title to the property. Instead of making monthly mortgage payments, the mortgage company pays the homeowner as an advance on the equity in the home. The money is generally not taxable and does not affect Medicare or Social Security benefits. A win-win, right? It can be. Here are 6 essential things to consider before getting a reverse mortgage.
THERE ARE COSTS
Just like a traditional mortgage, reverse mortgages have costs involved. As with most mortgages, you can expect to pay origination fees and closing costs at closing. There may also be some ongoing servicing fees that are charged by the servicing company to service the loan monthly. Depending on your lender and type of reverse mortgage, you may also have to pay mortgage insurance. Ask your loan officer before closing if you have any questions about the costs of your reverse mortgage. We take the time to explain these costs upfront and communicate any changes throughout the loan so these costs and fees won’t be a surprise at closing.
HOMEOWNER RESPONSIBILITIES
The homeowner is still responsible for some of the same things that most homeowners must do with any mortgage. Since property or real estate taxes are not included in the loan, the homeowner is responsible for ensuring that property taxes are paid. You must also obtain and pay for homeowner’s insurance and keep the coverage current. The homeowner must keep the property in good condition and make sure that it is maintained properly. Failure to do any of these requirements could result in the lender requiring repayment of the loan. Nonpayment of taxes, insurance, or failure to upkeep the property could trigger a maturity event with many mortgages, reverse mortgages included.
HEIRS COULD BE AFFECTED
If your equity is used up by the amount of money you draw from your reverse mortgage, the assets will be reduced for your heirs. Your heirs may purchase the home by paying off the loan if they want to retain ownership. Even if the amount owed is more than the appraised value, your heirs would only need to pay the appraised value to purchase the home because reverse mortgages are non-recourse loans. Be aware that if you want to bequeath the family home, a reverse mortgage must be repaid by turning it over to the lender, selling it, or paying off the loan. Consider if you were to pass away with a traditional mortgage still on your home and the balance due was more than the value of your home. Most banks want the full amount due for the loan and can go after your estate to pay off this debt. Getting a reverse mortgage could be a protection for your heirs in this case as reverse mortgages are non-recourse loans.
PROTECTION FOR SPOUSES
With some federally insured HECM reverse mortgages, even if your spouse did not sign the loan paperwork, they can usually remain in the home if you die. However, they will no longer receive payments or have access to any funds in the LOC since they are not on loan. The loan will not have to be repaid until the spouse dies, sells the house, or moves out. Nowadays when getting a HECM reverse mortgage, spouses who are not 62 or older can be included on the loan as a non-borrowing spouse which gives them the right to remain in the home as long as they maintain the terms of the loan and don’t trigger a maturity event. They will not have any access to any funds that were previously available in the line of credit before their spouse passed. For couples who have a non-borrowing spouse, they should consider refinancing their reverse mortgage when the spouse becomes 62 or older in order to allow them access to the full benefits of getting a reverse mortgage.
THINK ABOUT INTEREST
Some reverse mortgages offer fixed-rate loans, while others have variable rates. If your loan has variable rates, be aware that they will fluctuate with the market. Fixed-rate loans often require that you take your money all at once in one lump sum. The interest is not tax-deductible either until the loan is paid off.
NOT ALL REVERSE MORTGAGE COMPANIES ARE THE SAME
Some reverse mortgage companies may use high-pressure tactics to promote other financial products. Always look for knowledgeable, experienced, local reverse mortgage brokers that put your interests first and work to find the optimal program for you. Look for professionals familiar with your local market who offer you alternatives, so your reverse mortgage fits your needs. Our experts at Northwest Reverse Mortgage not only provide opportunities, but we also spend time with you, answering all questions and concerns about getting a reverse mortgage.
GETTING A REVERSE MORTGAGE WITH NORTHWEST REVERSE MORTGAGE
At Northwest Reverse Mortgage, our goal is to find the optimal solution for your financial security during retirement. Our loan officers not only help you obtain the reverse mortgage package that is right for you, but we also take the time to educate you and assist you in making the best choices. Check out our satisfied clients’ testimonials, and give us a call for a no-obligation consultation.
You have probably seen commercials and heard your friends discuss reverse mortgages but they sound complicated. We get that so, we have broken down some of the basics around “How Does a Reverse Mortgage Work?” in this article.
Reverse mortgages are loans for seniors 55 and older who want to convert the equity in their homes into funds that they can use now.
Reverse mortgages are similar to regular mortgages in that they are both loans, using your home as collateral. In a traditional mortgage, you purchase a home and pay the monthly lender payments based on the amount borrowed. In a reverse mortgage, the homeowner either owns the home outright or has considerable equity in the home, which is used as the loan’s collateral and the homeowner receives cash from the lender.
What Are The Requirements For a Reverse Mortgage?
Reverse mortgages are not for everyone. There are various requirements to qualify for these loans. Age is the first qualifier, with the minimum age being 62 for the HECM reverse mortgage and 55 for various proprietary loans. There is no maximum age. The borrower must also either own the home free and clear or have substantial equity in the house. The U.S. Department of Housing and Urban Development (HUD) requires that the borrowers complete a counseling session before taking out a reverse mortgage, which walks applicants through the pros and cons of having a reverse mortgage.
The borrower must also occupy the property as a primary residence. Vacation, seasonal, and unoccupied properties do not qualify for a reverse mortgage. The borrower must not be delinquent on any federal debt and must have sufficient funds to pay for property taxes, homeowner’s insurance, mortgage insurance, and possession of a home in good repair.
Though the borrower still owns the home, just like with a traditional mortgage, the mortgage is payable in full if they die or move. If the borrower dies, their heirs will need to pay the mortgage in full, either with their funds or with equity from the home’s sale. If the house sells and cannot satisfy the loan balance, the heirs are not responsible for shortages. When wondering “How Does a Reverse Mortgage Work?” Northwest Reverse Mortgage is your local broker with the answers you need.
How Are Funds Distributed With a Reverse Mortgage?
There are generally two types of reverse mortgages: Variable Rate and Fixed Rate.
With a variable rate, a borrower may receive a higher limit to the principal if they are older or if the property has a greater value or a lower interest rate. The variable rate options for receiving your proceeds include:
Equal monthly payments
A line of credit
A combination of payments plus a line of credit
With a fixed rate, the homeowner generally receives a lump sum payment. Speak with your lender about all the options available to you. They will help you determine the best way to proceed, usually based on how you plan to use the distribution. Some ways that homeowners use the funds from a reverse mortgage include:
Medical expenses, including home accessibility improvements
Home improvements or repairs to the home
Supplement to retirement income
How Does A Reverse Mortgage Work?
A reverse mortgage makes it possible for homeowners 55 and older to use the equity in their homes to cover necessary expenses and supplement their income to live more comfortably during retirement. The experts at Northwest Reverse Mortgage can help you understand “How Does a Reverse Mortgage Work?” walk you through the process and determine the type of reverse mortgage that will best suit your needs. We are licensed professionals and serve homeowners in the northwest: California, Oregon, Washington, and Idaho. Contact us today with questions, or visit one of our convenient locations for more information.
You may have heard about reverse mortgages and thought they weren’t suitable for you. You may think they are too confusing or that you probably won’t qualify. However, reverse mortgages offer simple solutions to homeowners 62 and older who want extra funds for paying bills, traveling, or assisting in medical expenses by using the equity in your home. Reverse mortgage experts can easily walk you through the steps in determining if you qualify and which type of reverse mortgage is right for you.
What Is a Reverse Mortgage?
A reverse mortgage is a loan for homeowners 62 years old or older who have equity in their home and want to turn that equity into cash while remaining in their home. Funds can be received as a fixed monthly payment, a lump sum, or a line of credit. Unlike a traditional mortgage, a reverse mortgage does not require you to make payments. Instead, the debtor can pay the loan once the homeowner sells the home, takes out another loan to pay it off, or it is paid by their estate if the homeowner dies.
There are generally three types of reverse mortgages:
Single Purpose Reverse Mortgages
Proprietary Reverse Mortgages
Home Conversion Mortgages
Our team of reverse mortgage specialists can help you tailor the mortgage to best fulfill your needs and help determine the best package for you and your family.
Single Purpose Reverse Mortgages
Single-purpose reverse mortgages are usually offered by some state and local government agencies and non-profit organizations. Many homeowners may qualify for these loans if they fall within the low to moderate-income brackets. As the name suggests, these loans are used for one specific purpose, such as home repairs or property taxes. Though they are the least expensive type of reverse mortgage, there are more constraints on how the money is used.
Proprietary Reverse Mortgages
Proprietary Reverse Mortgages are private loans offered by specific companies and are not FHA insured. If you own a higher-valued home, you may be able to get a more significant advance since you are not bound to the same set of limits and qualifications of an FHA-insured HECM program. Unlike the single-purpose reverse mortgage, the funds can be used for any reason. The individual lender determines the amount they can loan, sets the criteria for qualifications, and usually comes with lower up-front costs.
Home Equity Conversion Mortgages (HECM)
Home Equity Conversion Mortgages (HECM) are the most common type of reverse mortgage for which seniors qualify. Home values-based below the conforming loan limit (currently up to $765,600) are federally-insured and are backed by the Department of Housing and Urban Development. Like Proprietary Reverse Mortgages, the funds can be used for any purpose. The amount you can borrow depends on several factors, such as age, the appraised value of your home, current interest rates, etc. HECM for Purchase or H4P is a reverse mortgage that allows seniors to buy a new principal home with proceeds from a reverse mortgage. The borrower does not have to make mortgage payments and does not have to repay the loan until they leave the residence permanently.
What to Consider When Shopping for Reverse Mortgages
When trying to decide which type of reverse mortgage is right for you, there are a few things that you may want to consider before choosing:
What will you be using the funds for? To supplement your retirement income, you may need it to cover regular monthly expenses. Maybe you need a single lump-sum payment to fund home improvements or a large medical bill. How you receive your payments may help determine the type of reverse mortgage you choose.
The value of your home may determine your reverse mortgage type. If your home exceeds the upper limit on HECMs, you may need to use a proprietary reverse mortgage.
Your financial situation and the equity in your home could determine the best fit for a reverse mortgage.
Speak with a reverse mortgage specialist to discuss your personal preferences, the amount of money you need, and how you want to spend your retirement years. They can help you determine the best reverse mortgage options for you.
Reverse mortgages allow seniors to comfortably remain in their homes, using the equity they have built through the years. Each homeowner has specific wants and needs, and at Northwest Reverse Mortgages, our team of specialists will expertly guide you through all the options available to make the best, most informed decision. Still, have questions? Check out our frequently asked questions, or contact Northwest Reverse Mortgage today to set up an appointment to discuss how a reverse mortgage can benefit you!
Reverse mortgages have become popularized by television commercials anchored by celebrities. To some, they may seem too good to be true. But reverse mortgages are not all Hollywood glitz and glamour. They are a way for homeowners, now as young as 55 or older, to convert the equity in their homes into spendable cash. Though not for everyone, many seniors are using their home equity to fund their retirement, cover expenses, and remain in their homes without worries of budget constraints. Reverse mortgages can make this possible but you need to know the pros and cons of a reverse mortgage before you get a reverse mortgage.
Consider the Pros and Cons of a Reverse Mortgage
Pros:
You Can Better Manage Expenses During Retirement.
Once you retire, your income may substantially decrease. And you may encounter expenses that were unplanned, such as medical-related costs that are not covered by insurance or home or vehicle repairs. Depending on your retirement income, a reverse mortgage can also generate funds for other expenses that your regular budgeted income won’t cover. With a reverse mortgage, you can use the funds in any way you want, so you can preserve your wealth, while also mitigating risk.
You Don’t Have to Pay Taxes on the Income.
The funds from a reverse mortgage are not considered income because they are proceeds of a loan. But with a reverse mortgage, you do not have to pay back the loan until you move from your home or trigger a maturity event, like passing away. At that time, the loan could be repaid with the money from the home’s sale, or other funds if the heirs desire to retain the home.
Line of Credit Like a Security Net.
Many homeowners decide to apply for a reverse mortgage on their home, not just because they need the money, but because they realize the investment strategy or insurance policy potential that can extend retirement savings and provide tax-free income while keeping you in your home.
A reverse mortgage can allow you to leverage your home as an asset to maintain other investments when used with discretion. Using funds from your reverse mortgage instead of accessing other retirement savings can allow you to avoid tax implications, penalties or other costs.
You Don’t Have to Move.
Often, homeowners find that they cannot afford to live in their home when their income decreases due to retirement. But moving is stressful and expensive. A reverse mortgage allows homeowners aged 55+ to age in place in the home and neighborhood where they are comfortable.
You Are Protected if the Balance Exceeds Your Home’s Value.
Reverse mortgages can sometimes exceed the value of the home. Sometimes the cost of the loan, when added to the balance, or the natural swing in the real estate market, could make the homeowner’s reverse mortgage balance greater than the property’s fair market value. With reverse mortgages, lenders cannot attach liens or lay claims against other property of the mortgage holder or their heirs. This is known as a non-recourse feature and makes reverse mortgages one of the safest mortgage options. You will never be required to pay back more than the value of the home, even if the loan balance is higher.
Your Heirs Have Options.
Even if you have a reverse mortgage, your heirs will still have options if you pass away. Of course, they can sell the home and retain any funds over the loan amount. They could take out a mortgage to pay off the reverse mortgage and then use the property however they like. Because reverse mortgages are made specifically for seniors and are non-recourse, the program is built with the natural cycle of life in mind. When you pass away with a reverse mortgage, your heirs will need to contact your servicing company and keep in touch with them about their plans with the home. To learn more about what happens upon a maturity event like the homeowner passing, read our blog here.
Cons:
You Have To Pay for It.
As with any loan, there are costs to borrowing money. You will encounter typical expenses such as closing costs, but unlike a traditional mortgage, you will not be making a monthly mortgage payment on the balance.
You Could Inadvertently Violate Other Program Requirements.
If you currently qualify for Medicaid or Supplemental Security Income programs, there are certain asset restrictions to benefit from the programs. Carrying too large of a balance in your bank account could cause you to violate those requirements, so getting the advice of Medicaid or SSI Advisor is best before finalizing a reverse mortgage. Most will be able to help you stay within your restricted asset requirements or steer you to other programs that may be beneficial.
Learn More About your Reverse Mortgage Options
Reverse mortgages may not be for everyone, but they provide a way to live a comfortable, secure retirement for homeowners aged 55+. Northwest Reverse Mortgage will help you choose the right plan for you. We walk you through the pros and cons of a reverse mortgage, help determine your eligibility and explain the different types of reverse mortgages available. Contact us today to set an appointment, or take our quick assessment to find out if a reverse mortgage is right for you! Our Loan Officers will reach out after we receive the assessment to provide your personalized snapshot of options.
There are many mortgage lenders operating nationally which operate off of successful wholesale lending models, some of which have the resources to advertise phone numbers attached to centralized call centers. In addition to providing a lot of loan volume, these companies can also be powerful sources of education for reverse mortgage borrowers across the country, even for those borrowers who may not end up transacting with those larger lenders.
For many borrowers — especially seniors who may prefer having easy access to a loan originator in their own backyard — the touch of a local operation can be essential to capturing their business. For those reverse mortgage lenders who specialize in offering a local touch, there is very little substitute for connecting with a borrower at that more personal level. Additionally, forward loan officers unaware of reverse mortgage options need to be educated about when a reverse mortgage would make more sense for a senior client.
These are some of the perspectives shared in a webinar hosted by RMD earlier this summer, which focused on the topic of local reverse mortgage business and the differences it can have with larger operations.
The importance of the local touch for some borrowers
The educational value of large print ads or national television commercials devoted to the reverse mortgage product category should certainly never be understated in any conversation about an industry that is very reliant on customer education. However, even if a lender had the most persuasive ad in the world, there are some borrowers who will simply never be captured by a phone number to a call center. For those seniors, the local touch is key according to Jeff Foody, president of Northwest Reverse Mortgage based in Clackamas, Ore.
“The local presence is important,” he says. “These are people that don’t want to call the call centers out of California or Florida, they want to deal with somebody who is local, they want to know that in the event that something goes wrong, they can go knock on our office doors and see somebody’s face. That never happens, but they at least want to have that feeling they know that they can.”
It goes beyond just having the ability to knock on an office door, though. It also goes to a simple preference for supporting businesses which operate locally, a principle which some borrowers can simply never be shaken from.
“They want to know that they’re keeping the business local. Even though we know the appraisers are being pulled from pools in the area, they want to know that they’re working with people that are all local, it’s a comfort level to them,” he explains. “I can’t tell you the number of calls that I get on a weekly basis from people that were looking for reverse mortgage information. They might’ve called one or two of those big national companies, they got a DVD or they got information, and then they ended up calling us because we’re local. I’d say we get tons of those [types of clients] because people prefer to deal with that local feel.”
The ‘system’ of non-reverse loan officers
Whether rightfully or wrongfully, some loan originators across the forward and reverse sides who operate at a less personal level than the local practitioners may also create a perspective in a borrower’s mind that they are sniping for business at any cost, Foody says. As well-meaning as originators in banks, credit unions, and lenders are, some borrowers may harbor a perception that is difficult for them to shake.
“When all you know is a hammer, everything looks like a nail,” he says of these perspectives. “And if all you know is a 30-year fixed, everything looks like a 30-year fixed.”
However, there are some loan originators even at the local level who can fall into that mindset not because there’s anything wrong with them, but because they’re also not aware of other options including a reverse mortgage, particularly if all they’re familiar with is the forward side of the business.
“I worked with a local mortgage bank, and created a reverse mortgage division for this local mortgage bank,” Foody says. “I had been with them for around eight years, and one of their top loan officers referred me to do a reverse mortgage for her parents. I went in to meet with them for the first time and as I was trying to get through the numbers and the figures, it turned out that this loan officer had just refinanced her parents into a 30-year fixed about a year prior.”
Though Foody had been with the bank for a long time up to that point, he asked the forward originator why her parents were not referred to him at the time the forward loan was refinanced, and it was simply because a reverse had never occurred to her before that point.
“It’s up to us to educate them,” Foody says. “A lot of those referral partners, part of their issue is they don’t want to be the ones to suggest a reverse mortgage to a client if they don’t feel comfortable and confident in explaining what a reverse mortgage is. We all know that reverse mortgages still have a negative connotation amongst a lot of people, and they don’t feel like they’re comfortable educating people about it, that’s our job to do that.”
Education as a path forward, and its importance locally
Foody is adamant that these issues can be overcome as long as the industry at all levels — but perhaps particularly at the local level — takes the time and effort to adequately educate clients and referral partners about how a reverse mortgage can be applied to a senior’s financial situation.
“The only way that you overcome obstacles is through education,” he says. “And so, we have to go out there and educate these potential referral partners. We’ve got to do a lunch-and-learn at the bank or at the credit union, sit down, and explain to them what reverse mortgages are. Inevitably, you’re going to change their perception about what a reverse mortgage is if you can educate them and overcome the obstacles.”
Part of having the authority to educate about reverse mortgages specifically, at least for Foody, comes from specialization. As a reverse mortgage practitioner who has never engaged directly in traditional mortgage business, he knows that using that information will immediately declare to borrowers or students at continuing education classes that he has a specific dedication to the reverse space.
“What we don’t do as a company is any traditional forward mortgages,” he said. “I’ve never done one, all I do is reverse mortgages. And for me, that’s my pitch: I say to banks, credit unions, and other mortgage companies, ‘I don’t do what you do, and you don’t do what I do. Let me help you do the reverse mortgage. If we get into it and the appraisal comes in low and I can’t make the reverse mortgage work, I’ll refer it back to you.’”
This helps those partners to understand the value and potential power of specialization, as well as the potential benefit a reverse mortgage can offer a client, Foody says.
It is no secret that seniors are at an increased risk of fraud and often lose more in a fraud event than other demographics. On June 8th, 2021, the Portland, OR FBI released an article outlining one small subset of elder fraud: Real Estate Fraud. The article detailed schemes in which a fraudster takes advantage of their victims through real estate transactions. One of the many ways real estate fraud takes place is through fake reverse mortgage scams. We take this very seriously and want to do everything we can to continue educating and protecting seniors from fraud.
As you can imagine, this information has us well-respected and reputable reverse mortgage professionals absolutely infuriated.
Elder fraud takes hold when the victim is not informed about the subject matter or does not have access to accurate information from a reputable source. They are often unconnected from local resources, do not have a support network, and in many cases, the senior has a need for increased cash flow or assistance with their home or care making them vulnerable to nefarious folk with friendly faces. It is widely believed that many elder abuse cases go unreported due to the shame of “allowing” themselves to become victims in the first place. They don’t want anyone to think they can’t handle their personal affairs or have lost control. This type of fraud is deeply despicable and often leaves the victim’s life and retirement in shambles. Protecting seniors from fraud is something we all can help with.
As a company that serves people aged 55+ with reverse mortgages exclusively, this article hits too close to home. Since our inception, our goal has been to educate and empower our neighbors in and nearing retirement with the information they need to make the optimal decision for their situation. Having accurate information and a trustworthy source to call on with questions can be the difference between becoming a victim of fraud or not. Even if you don’t want a reverse mortgage or you don’t know what a reverse mortgage is; get educated about the basics so you can empower yourself and your older friends and clients with accurate and trustworthy facts from a reputable source.
Reverse mortgages have undergone many changes over the years making them one of the safest mortgage products available today. They are made specifically for people aged 55+ to establish and protect financial security in retirement. The reverse mortgage options have changed so much over the years that now there are even proprietary loans and lines of credit available in many areas- all with no monthly mortgage payments required. The evolution of the reverse mortgage program and products has turned this loan-of-last-resort into a viable financial tool used by many savvy retirees to establish and maintain a better quality of life.
Northwest Reverse Mortgage is approved by the National Mortgage Licensing System and the States of Oregon, Washington, California and Idaho to offer every reverse mortgage loan available. We are a well-known and respected company, here to serve you and yours. Consider us your personal resource for all things reverse mortgage. We are proud to educate and empower our elders and accept that protecting seniors from fraud is one of our missions. Together, we can help more people sniff out these fraudsters and protect themselves from despair.
June 15th is World Elder Abuse Awareness Day, and COVID 19 has only increased our need for thoughtful and diligent work.
Elder abuse includes far more than physical harm, and during the growing isolation of the last year, rates of fraud, neglect, and financial exploitation increased. The National Center on Elder Abuse (NCEA) is working harder than ever to protect our seniors, and their efforts are gaining momentum.
While abuse rates may have increased, the underlying realities and the NCEA’s work to prevent and address these are not new. For almost 30 years the NCEA has fostered relationships among multiple public and private agencies like the Social Security Administration (SSA) and Consumer Financial Protection Bureau (CFPB) as well as industry leaders and trade organizations working with senior clientele.
These partnerships have also spun off other inter-agency collaborations. The CFPB and FDIC have worked together to make available free, educational materials to help financial professionals and family members avoid, recognize, and report various forms of elder abuse. Anyone interested can download materials from the FDIC Website or CFPB’s Resource Center.
The NCEA also works to directly shape policy informed by research. However, addressing elder abuse takes more than just reporting and legislation, and the best prevention is a social, rather than individual, effort. The greatest risk factors are related to isolation, and so many are looking for programs that build relationships. One law enforcement initiative is working to Connect Communities & Neighbors.
Our team at Northwest Reverse Mortgage recognizes that our senior clients are invaluable community members, but they are also often uniquely vulnerable. That’s why we are committed to protecting and educating the people we serve and their families. We are glad for the many professionals and agencies who share these priorities.
If you suspect you or a loved one have been the target of elder fraud, you can call the National Elder Fraud Hotline for help: (833) FRAUD-11 (833-372-8311).
An Oregon-based reverse mortgage brokerage has decided to mark a milestone of customer savings through a $1,000 donation to a local senior center, commemorating the savings it has provided to its reverse mortgage customers in terms of the amount of forward mortgage payments they have been able to forego as a result of getting a reverse mortgage while also aiming to give back to the local community the business operates in.
The move is also being made in an effort to demonstrate the consultative approach that the reverse mortgage business takes with its senior clients, in the hope of showing local community members the differences between the actions of a reverse mortgage industry participant when compared with the longstanding reputational concerns that some people maintain about the reverse mortgage product category.
Northwest Reverse Mortgage
Clackamas, Ore.-based Northwest Reverse Mortgage has only been in operation for the past couple of years, but its president and owner Jeff Foody has been involved in the reverse mortgage industry since 2002. Prior to starting his own reverse mortgage brokerage, Foody had helped to establish a reverse mortgage operation inside a local bank. After staying there for seven years, Foody saw that there was a limited amount of bandwidth the organization made available to the reverse side when compared to the traditional, forward mortgage side.
Jeff Foody
“There’s really only so much bandwidth that they’re really willing to give the reverse division,” Foody told RMD in an interview. “So, I broke off to create my own reverse mortgage-only brokerage about two years ago. Our idea is that we are set up with all of the major investors to be able to offer to clients every option: we want to be able to sell all the jumbos, we want to be able to sell whatever else there is. If a client can do a reverse mortgage, we want to make sure that we have the ability to do it for them.”
As of right now the brokerage is licensed in Oregon, Washington and Idaho and expects to be approved to operate in California soon. Instead of going with an approach defined by either the hyper-local focus or having a big call center operation, Foody describes a desire to fit comfortably in the middle between those two kinds of scales. While he aims to hire some people who may not have reverse mortgage experience, that doesn’t necessarily mean he’s interested in hiring people on the forward mortgage side, he says.
“[Forward loan officers] are just used to a different type of selling,” Foody says. “They’re used to market rate changes, heavy pressure, creating a false sense of urgency to be able to help people move along quickly, and I don’t think that has ever worked in this atmosphere. I’m looking for people that have a history of information sales. I want them to inform and to educate [across] these life cycles for these clients.”
Some of his clients, Foody says, began the process of looking into a reverse mortgage as long as 18 months ago, while having yet to submit a formal application.
“That’s commonplace in the reverse mortgage industry,” he says. “Forward mortgage people would have stopped calling on the sixth or seventh phone call, at least that’s been my experience.”
While he acknowledges that he is generalizing, he also says that it helps to have a clear idea of hiring people who demonstrate an ability to be involved with clients for the proverbial long haul, he says.
A milestone of forward mortgage payment savings
When it comes to the recent milestone that Foody’s company reached, internal metrics demonstrated that the company had reached the threshold of saving its clients an estimated $1 million in forward mortgage payments. This is because of the data they absorb when taking on a new client, and the company’s desire to fully grasp why it’s involved in the reverse mortgage business, Foody says.
“We like to track how much money we’re saving clients,” Foody tells RMD. “For every client that we do a traditional reverse mortgage for that had a previously-existing mortgage payment, we track what their mortgage payment was. We have an Excel spreadsheet for every loan that we close, we track what they would have been making in mortgage payments. So, it may have been a year ago, and if they had $1,000 per month mortgage payment, then after a year, we would have saved them $12,000 in mortgage payments.”
For all the company’s closed loans, the company tracks what their monthly mortgage payments would have been, and the figures are updated monthly. By that metric, the company reached a milestone it wanted to mark in some way.
“Last month [we hit the point] where we’ve saved [our clients] $1 million in monthly mortgage payments,” he explains. “There are three different indicators we like to track: we like to track money saved, we like to track our purchases and we like to track the amount of foreclosures that we save people from. Those are just our key indicators [that helps] keep our focus on what matters to us. And I know a lot of people do like closed loans and loan volume, but we don’t want to get away from why we’re really doing what we’re doing, which is to save people from having to make those mortgage payments, new purchases or foreclosures.”
A reverse mortgage brokerage gives back
When aiming to determine the best way to mark the milestone, early discussions revolved around the creation of some kind of award to internally recognize the work of the company’s employees, but the discussion eventually pivoted toward a donation that could be meaningful for seniors in the local community, Foody says.
When brainstorming, the company’s business development specialist brought up the idea of doing something involving the community of Gresham, Ore. due to her involvement with the town’s chamber of commerce, which eventually turned into more serious discussions surrounding the idea of making a tangible impact on its local senior community.
“While we do have the advantage of low interest rates, we want to be an impactful business that’s going to be here for a very long time in our local communities,” Foody explains. “And so, we want to make sure that while we’re benefiting from the low interest rates and the amount of business that we have coming in, we recognize that there are people out there that aren’t as fortunate [who could use some] help. The Gresham Senior Center, in particular because of [our Business Development Specialist] Breazy Wirth’s relationship in the Gresham Chamber of Commerce and those relationships, she was aware of their particular needs.”
That’s what led Northwest Reverse Mortgage to make a $1,000 donation to the Gresham Senior Center as a way to mark the milestone of saving its customers an estimated $1 million in forward mortgage payments, but Foody is quick to say that he hopes they can make similar donations to other local senior centers in need of help.
“We’d be happy to help and find other opportunities to be able to serve some of those other senior centers that are in need, too,” he says. “This was just the one center because we had a relationship with them, but by all means that doesn’t mean that they were the only ones that needed it. I’m sure they all do.”
The importance of good industry visibility, social responsibility
It also speaks to the way that Foody wants the reverse mortgage industry to be perceived by others in the community, since it should come as no surprise to reverse mortgage industry participants that there are some in communities around the country who look to reverse mortgage companies with skepticism.
“I know that we’re a small industry, and it always seems to have been a small industry,” he says. “But that doesn’t necessarily mean that we can’t make an impact. My expectation is that reverse mortgages will become a lot more mainstream within the next five-to-seven years as people start to become more educated and more aware of the safeties that are in place for this program. I just hope that as the small industry grows, we don’t lose that sense of trying to do the right thing and trying to protect these clients.”
Keeping in mind the specialty represented by the reverse mortgage product category is key to differentiating it from more traditional loan options, Foody says.
“My fear is that these loans will become more like traditional mortgages, and they kind of get swept under the rug and treated the same as every other type of loan,” he says. “I don’t ever want to see that happen. I want to see the protections and the safeguards, and also the social responsibility that we feel is [inseparable from] these loans. I don’t ever want to see that change.”
View the original article by Reverse Mortgage Daily here.
Article written by Chris Clow and published in the Reverse Mortgage Daily May 13th, 2021
NW Reverse Mortgage celebrates milestone, donates $1,000 to nonprofit organization Gresham Senior Center
In celebration of hitting an amazing milestone, an Oregon company donated to a Gresham nonprofit center dedicated to uplifting local seniors.
Northwest Reverse Mortgage presented a check for $1,000 to the Gresham Senior Center Wednesday morning, May 5. This donation commemorates the company saving customers more than $1 million in monthly mortgage payments, collectively.
“It’s important to keep this facility open and functional — they are making a difference for so many in the community,” said Breazy Wirth, business development specialist. “We hope others follow in our footsteps by making donations to the local senior centers in their areas.”
The donation comes at a crucial time for the Gresham Senior Center, 600 N.E. Eighth St., as it continues to rebound from a difficult year that saw fundraisers shuttered and finances hit a dire place. The money will help handle looming utility bills and other payments.
“This helps us get through the pandemic until we can safely reopen,” said Paul Nasiatka, president of the center.
Northwest Reverse Mortgage is a local company dedicated to guiding people aged 55 and older to a more secure future through accessing home equity or purchasing a new home with a reverse mortgage. Learn more at nwreverse.com
Jeff Foody discusses the huge milestone his company hit and why it is so important to support our local senior centers in the interview below on KOIN’s AM Extra.
Jeff Foody was featured on FOX’s GOOD DAY OREGON discussing how the impacts of the economic shutdown during COVID have negatively affected seniors and how his company used a major milestone as an opportunity to give back.
Northwest Reverse Mortgage is passionate about supporting our local communities!
Did you know you can give back to your community without giving anything? Your Fred Meyer Rewards Card makes this possible! Sign up for their Community Rewards program today to help your local non-profit. When you shop at Freddie’s, your non-profit is sent additional rewards, so you aren’t giving up anything- it is an additional perk of being a Fred Meyer rewards member. Check out the simple video below for directions on how to set your card up for the Non-Profit of your choice!
*Northwest Reverse Mortgage is not affiliated with Fred Meyer in any way.
There are many other opportunities to help the charities in your local area; here are a few ideas:
Call your local senior center and ask them about the ways you could donate or be of service with your skills.
Some charities, like the Gresham Senior Center, are accepting cans and bottle donations that they return for cash. Their bottle drop program helps sustain them while they have minimal income.
Consider donating the proceeds of your garage or estate sale to a local charity.
Host a challenge or event to encourage donations.
Like your local senior centers on social media, sign up for their newsletter, and share their posts.
Many senior centers provide a service like quilting or foot care, for example. Find out what services your local senior centers provide and become a customer.
Northwest Reverse Mortgage is committed to our communities; taking these simple steps could help our local charities get more much-needed funding. Donating or volunteering with a local charity not only helps our communities, it makes you feel good and can lead to a better quality of life.
Article written by Christopher Keizur and published in the Gresham Outlook May 7th, 2021
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Jeff Foody
Founder
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