Jennifer Lauren Ruspini,ABR,SRS,e-Buyer

For years, reverse mortgages have been sold as a way for cash-strapped seniors to get some extra cash. But falling home prices, lending rules and growing instances of fraud could make these loans an incredibly risky proposition for some borrowers.

With a reverse mortgage homeowners 62 years of age or older can convert the equity in their home into a loan that they won't have to pay back until they either die or move out. If they move out, the borrower either has to cough up the cash or sell the home, a move so difficult in today's housing market that they could end up facing foreclosure

Here's what you or your parents should consider before getting a reverse mortgage.

Can you afford to stay in your home - as long as you live?

Once you take a reverse mortgage, the bank expects you to maintain the house. That may not only become difficult physically, but financially as well.

"The problem is that if you can't afford to maintain the house, then you probably can't afford to move either - unless you're sure that your home will be sold before the bank moves to foreclose. (If you move to a nursing home, you have up to a year to return to your home.)

http://www.ruspinirealty.com

The highest compliment my clients/business partners can give me is the referral of their friends, family and associates.

Federal Housing Rescue Plan Launches
The Obama Administration's program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.

Six of the nation's largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.

Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.

The plan calls for loan servicers to reduce interest rates so a family's monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.

Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments-and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.

Source: CNN, Tami Luhby (04/16/2009)

Banks Consider Sale-Leaseback Deals
Although the current financial troubles of many banks are in part attributable to their real estate-related transgressions, they are looking to their corporate real estate holdings to help bail them out.

For example, HSBC is considering sale and leaseback deals for its headquarters buildings in New York, London, and Paris. The sales are expected to raise more than $4 billion.

Also, Credit Suisse is considering a similar deal involving two London office buildings for about $600 million.

The logic behind these moves is simple: Sale-leaseback deals generate cash. Then, the operating leases are little more than a footnote on the balance sheet.

While the value of commercial real estate worldwide has fallen in the last 12 months and financing can be hard to find, analysts say it is still a good strategy for cash-strapped banks.

Source: Dow Jones, Molly Neal (04/16/2009)

Federal Housing Rescue Plan Launches
The Obama Administration's program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.

Six of the nation's largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.

Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.

The plan calls for loan servicers to reduce interest rates so a family's monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.

Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments-and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.

Source: CNN, Tami Luhby (04/16/2009)

You don't have to be rich to get audited. To protect yourself, get a receipt for any donation you plan on deducting. And keep those receipts for seven years-unless it suspects you of outright fraud, that's how far back the IRS will go with an audit. From your realtor