Deborah Nance - Corona Reverse Mortgages Advisor - Southern California

Save these dates! Let your friends, neighbors, coworkers and family know that if they have questions about their home and the process of foreclosure, loan modifications, short sales, and deed in lieu of foreclosure that they need to be at this seminar. This free 90 minute presentation is a great first step to understanding where to go for help. Presented by HELP "Homeowner Education Learning Program" a non-profit agency, this seminar will educate troubled homeowners about the options available to them. Knowledge is power.

HELP USA Also provides professionals within real estate and related fields an excellent 2 day class that will certify them as "HELP Certified Professionals" I recommend going to the homeowners free seminar first. There you will get fired up to become an educated, top notch professional. Please click on my link to HELP on the right side of this page.

FREE HOMEOWNER SEMINAR SCHEDULE

December 7th, 2009
6:30pm-9:30pm
Moreno Valley Senior Center
25075 Fir Avenue
Moreno Valley, CA

December 9th, 2009
5:30pm-8:30pm
Temecula Public Library
30600 Pauba Road
Temecula, CA 92592

90 Minute Seminar Agenda

Topic: Can, or Should I keep My Home?
Introduction:

-Panel Members, present and not. Web Site resources and introduction to blog.
-What happened? In brief, how did we get here?
-Prediction of the market in general.
-Time frames for foreclosure process / Why the banks don't foreclose? / Should I stay if I'm not making my payments?
-Try To Modify, If To No Avail, Short Sale! Never Walk Away.
-Credit damage and when will I be able to buy again? Take action early!
-Modify? Short Sale? Foreclose? Understanding why each situation is unique. One size does not fit all.
-Why is it better to cooperate with a Short Sale than to just let the bank foreclose?

Statistical Data:

-Power Point presentation providing current data to help clarify what is happening in the region by the numbers.

Modifications:

-What's legal and what's not.
-Who's legally set up with The Department of Real Estate.
-What you must know to avoid being a victim.
-Why are we hearing stories of great success when I've been waiting for months?
-What is the Banks motivation?

Taxes:

-What is Prop-8?
-I paid 300k but I'm paying taxes based on 450k, why?
-What if I can't pay my property taxes?
-What are the potential tax consequences under a short sale, foreclosure, forbearance, modification, etc.
-What is the difference between what the Franchise Tax Board is doing and the IRS?
-What exactly is debt relief? Does the lender have to give me a 1099 for said relief?
-Can I file bankruptcy against these future taxes?

Q&A:

*Please note-All information is deemed reliable and was researched prior to this presentation. The presenters are expressing their opinions only and are not offering any legal advice. The County of Riverside is not endorsing any company or individual. All attendees are encouraged to seek individual advice structured around their own unique circumstances.

HECM - Home Equity Conversion Mortgage) We pronounce it "Heckum"

• FHA defines "HECM for Purchase" as a real estate purchase where title to the property is transferred to the HECM borrower, which the borrower will occupy as a principal residence, and, at the time of closing, the HECM first and second liens will be the only liens against the property.

There are 3 Major Benefits To Senior Homebuyers

• Gives homebuyers who are downsizing more purchasing power than if they had to pay all cash
• Designed to allow your seniors to purchase a new principal residence and obtain a Reverse Mortgage within a single transaction by eliminating the need for a second closing.
• Buyers do not have to "qualify" for monthly payments on the new purchase transaction. A significant detail to senior homebuyers on a fixed income.

Other Benefits to Senior Homebuyers

• Eliminates Monthly Mortgage Payments
• Borrower Maintains The Title
• Loan Is Non-Recourse
• Remaining Equity Goes To Borrower Or Borrower's Heirs, Not The Bank
• No Pre-Payment Penalty
• FHA-Insured
• Usually No Income Verification Or Credit Score Requirement (If buyer is retaining their former home as rental property there are income requirements)

* Certain transactions will require "qualification" - ask your Reverse Mortgage Specialist for specific details.

An Example - Bob and Betty Buyer are purchasing a single story home and selling their two story family home.

• Bob is 76 and Betty is 75
• The clients' proceeds on their existing home after all expenses will be approximately $152,000.00
• With $152,000 to put into a new home and a HECM loan the clients have the purchasing power to obtain a home valued at up to $350,000 with no monthly mortgage payments - EVER!

I am happy to provide training and expertise to you on the HECM For Purchase. Please email me or contact me through the links on this blog. The training class is 1 hour in length and makes for a fun, learning experience to prepare you for this next great step in your life.

Deborah Nance, Reverse Mortgage Professional for Corona, the Inland Empire and Southern Californa.

I've been reading posts, listening to the news and the talking heads and I have an idea. Not an original one to be sure. But one worth posting.

Small business seems to have been completely left out of any economic stimulus, with the government figuring that all their printed dollars used to bail out Wall Street and Auto Manufacturing will somehow filter down to small business. I'm no economist and I hope that some of that money does... but I know that there is something I can do personally and I am challenging each of us to do the same.

Patronize a small business in your community TODAY. Make it your goal to do business with small, professionally run businesses. Alternatively or in addition, give/donate to a local charity who can help our local troubled neighbors to get through this tough time.

I'm thinking of all I have to do today and how I can use my neighborhood businesses to get it done. I'll have to buy more moving boxes. Check. I need a hostess gift. Check. My car needs an oil change and a wash. Check.

What are you going to do? Please post it! Or better yet - post what you've done to help your community small businesses tonight after your done.

What Is Reverse Mortgage? (edit/delete)

Reverse Mortgages are a type of home loan. Most reverse mortgages are a HUD/FHA insured home loan that allows you to liquidate some of your equity in order to payoff existing mortgages as well as generate additional cash flow. They are called HECM Loans. HECM stands for Home Equity Conversion Mortgage.

There are 3 types of HECM Loans.

• Adjustable Rate HECM (the original FHA Reverse Mortgage!)
• Fixed Rate HECM
• HECM For Purchase (either Fixed or Adjustable)

Reverse Mortgages are regulated and insured by the Federal Housing Administration (FHA). By law, you can never be forced to sell your home or move. You will always retain the title to your home, and you can still leave your home to your children or whoever you choose. You will never have to make a monthly mortgage payment (although you can if you wish!). Even if your reverse mortgage balance should outgrow the value of your home, a payment is never due. In fact, there is almost no risk of losing your home if you will always do the following:

• Live in the home as your Primary Residence (at least one spouse must live in the home)
• Keep the home insured and property taxes current.
• Keep the home in good condition.

Who Qualifies?

• Senior Homeowners with enough equity, over the age of 62.
• Most 1 to 4 family Residences qualify.
• FHA Approved Condominiums
• Post 1976 Manufactured Homes on their own lots.*

Some of the best features of an FHA Reverse Mortgage are the methods that you can access the equity in your home!

• Lump Sum - Take all the money you are entitle to in cash/direct deposit at the close of escrow.
• Tenure Payments* - Monthly payments to the homeowner for as long as they live in the home!
• Credit Line* - Leave the funds in a line of credit (that has a guaranteed growth feature!) to be accessed as you need it - Even if you have run out of equity and are upside down.
• * Both the Tenure and Credit Line Options are not available on the Fixed Rate Reverse Mortgage.
• Any combination of the options listed above.

As with all other FHA Home Loans, a reverse mortgage is a "Non Recourse" loan. This means that the lenders only security for repayment of the loan is the home itself. The lender has no rights to lien any other assets of the borrower or their estate. Only the home itself can be used as the lenders recourse to a foreclosure. If the home is worth less than the outstanding balance of the reverse mortgage then the lender must go to FHA for reimbursement of any loss. The loss will not generate any judgements or liens against the borrower or their heirs.

To see if you or your clients may benefit from a reverse mortgage please email me the following information. I will not call you unless you ask me to and provide your number, but in order to get you a decent estimate I need the following information.

• Birthdays of all persons on title to the home.
• Home Value. (if you provide your address I can do a value check for you)
• Current Home Loan and Equity Loans on the property.
• Zip Code

Deborah Nance, Reverse Mortgage Professional for Corona, the Inland Empire and Southern Californa.

Thursday evening, October 29, I attended a meeting for the California 62^nd Assembly District on Economic Recovery. I was a volunteer for the HELP - Homeownership Education Learning Program booth, giving homeowners and homebuyers information about free classes put on by the organization.

While I was there a distinguished older gentleman came to our table. I asked him how he was doing with his home loan. With a glum look on his face and a soft voice, he said, "I don't think you can help me, I have a reverse mortgage."

I answered, "I'm sure I can help you, because reverse mortgages are my expertise! Tell me about your loan."

"I got it a couple of years ago when my home was worth a lot more than it is now. I can't sleep at night because the balance is higher than what the house is worth and I don't know what they are going to do. Will they take the house from me? I keep getting mail telling me I better do a loan modification or refinance before the rate resets and they say my mortgage is $425,000,00!! I've never had a mortgage for that amount! There must be a mistake on my credit report. I don't know what to do, can you help me?"

I took his hand and said to him. "I think I can put your mind at ease."

I proceeded to give him a quick lesson in the mechanics (blessings) of a reverse mortgage. I explained to him that no matter how high the balance of the loan became, he would never be required to make payments and it would never be foreclosed on if he did four things:

1. Paid his property taxes. (He had)
2. Kept the home insured. (It was)
3. Maintained the home. "Of course!" he said.
4. Lived in the home. "Where else would I live?"

Then I asked him if he knew whether or not he had a line of credit on his reverse mortgage, and he told me that according to his statement there was a line of credit of about ten thousand dollars. That was good news and I shared with him that no matter what happened to the home value that his line of credit was secure, insured by FHA to be available to him when he needed to take the money. (Note: Traditional HELOC's will lower, freeze or cut off lines of credit when value or borrower credit declines - just when you need it most.) I explained that the ten thousand was a nice little cushion should he have any emergencies and that if he did not use it, the funds available to him would continue to GROW EVEN IF THE HOME VALUE CONTINUED TO DECLINE! What peace of mind for a senior.

I then explained to him that because he had received his reverse mortgage a few years ago the margin was likely very low, meaning his current interest rate was probably in the twos! He agreed that was true. I shared how with a low rate like that the balance would not grow as fast as with a higher rate and that there was a possibility in 4 or 5 years if home values came back up that he could actually be in an equity position again. But, even if that didn't happen he would never have to leave the home as long as he did the four things I had told him.

I also explained to him that on a reverse mortgage, because the lenders are obligated to make line of credit funds available with a growth factor, and because the balance grows over time, a formula was established for determining the principal amount shown on the recorded deeds of trust. That formula is 1.5 times the home value, or FHA lending limit, whichever is less. So, if his home had appraised for $284,000 a few years ago, the lender would have multiplied that amount by 1.5 to determine the figure posted to the deed of trust - $425,000.00 I shared with him that the balance owed on the loan could be more or less than that and that he should look to his monthly statement to see how much was owed. I joked with him that if he lived to 100 his loan balance could be even higher than the 425.

Then he learned from me that no matter the loan balance, when he sold (or passed away and the kids sold it), the MIP Insurance on the loan would insure that he would never have to pay any amounts owing over the sale proceeds, as long as it was an arm's length transaction. However, if there was equity, then he (or his heirs) could sell and the remaining funds after payoff belonged to him. The bank only has a loan on the home, they do not have any ownership.

After our conversation, I could see he was feeling better. He was smiling and standing up straighter. I asked him if he thought he could sleep tonight and he answered, "Oh yes, you've taken a huge weight off my shoulders!" It made me feel so awesome to have put his mind at ease! I was higher than a kite! I gave him my business card and told him, that if he ever got to the point again that he was losing sleep over his reverse mortgage to please call me! I would be happy to keep him grounded with facts, not scare tactics or fiction.

If you (or your parents) are concerned about an existing reverse mortgage, you might be just fine. Remember to do the four things:

1. Occupy the home.
2. Keep current on property taxes.
3. Keep the home insured.
4. Maintain the home.

As long as those four things are done, you will not be foreclosed on, even if the amount owed is more than the home value, and you will never be asked to make a payment on the loan. I hope that this information will bring peace of mind to senior homeowners that may be wondering....please pass it on.

As always I welcome and encourage your comments and feedback.