April 2016 | The Moon Valley Tattler | 602-765-0902
R-E-S-P-E-C-T THE WRITE STUFF BY GERRY JOHNSON Apologies to Aretha Franklin. “The reverse mortgage has won some new respect.” This was the opening line from an article printed in the Wall Street Journal on March 21, 2016 by Robert Powell. The article was entitled “New Math on Reverse Mortgages.” Powell points out that as recently as a decade ago financial advisors felt that the RM was only for those of us that “didn’t prepare financially for retirement.” However, newly enacted safeguards have made this a product which many advisors are now integrating into sound retirement strategies. He defines Reverse Mortgages as “loans that give homeowners an advance on their home equity and allow them to delay repayment until the home is sold.” Another tenet of a RM is that the borrower can stay in the home, payment free, as long as they are able. The loan of choice is the Home Equity Conversion Mortgage (HECM) insured by FHA (HUD). This loan has the most safeguards and fits the needs of the vast majority in the senior’s market. You must be at least 62 to qualify. Since there is no monthly payment on principal and interest with a Reverse Mortgage, and since the borrower or their estate never has to pay off more than the home will sell for, the only real risk of default is failure to pay property taxes and homeowners insurance, and failure to keep the home in reasonable condition. Yet in 2014, nearly 12% of HECM borrowers were in default on their taxes and insurance. The Reverse Mortgage Stabilization Act of 2013 now prevents homeowners, in most cases, from taking all their equity at once. About 40% of the funds available (Principal Limit) won’t be dispersed until the beginning of the second year of the loan. Also, to qualify borrowers must demonstrate that they are able and willing to pay property taxes and HO insurance. The Lender can insist that an “impound set aside” be established from the funds available, and that the servicer of the loan pay these items as they come due. One more safeguard that has been enacted is protection for the non-borrowing spouse. Now, if a spouse does not qualify (too young) to be on the loan and outlives the borrowing spouse, they can stay in the home as long as they comply with the provisions of the loan and are able. There is too much content in this article to include in this piece. Next month I will write about the advantages and suggested financial-planning strategies
associated with a Reverse Mortgage. If you are even remotely interested in a Reverse Mortgage, I encourage you to find a knowledgeable mortgage loan officer that specializes in this product and discuss how it would work for you. This is a complicated subject – include your trusted financial advisor(s). - Gerry Johnson -
WANTED
B LO C K WAT C H E R B Y B L A N C H E LU K E S WANTED - Helpers to spread the word. Seems like there is a lot of things going on in our community that could be prevented or abated with a more visible Block Watch. Why isn’t there a sign in every window? Oh I know, you don’t want the bad guys to know we are a proactive community. And yet two times in the last few years Block Watch signs were given with the candles to every house. Did you know that the biggest challenge any community has is Apathy. Let the other guy or neighbor deal with the problem, I am too busy, why don’t the police do something? , However if it strikes closer to you i.e. your property, then I hear: so what are you or the police going to do about such and such! We have no magic bullet, we do have 1650 homes in Moon Valley, which probably equates to at least 3300 adults. Surely we can gather like minded people to put their heads together and come up with a plan to. So until we get a regular Block Watch meeting place I will be at the Moon Valley Park (7th Ave & Coral Gables) on the third Saturday of the month which is April 16th and May 21st from 3:30 to 4:30 pm Won’t you join me! Perhaps an hour out of our busy schedules, we can come up with a plan. Also, please feel free to email me at moonvalleybw@cox.net. Blanche
Considering buying a home or refinancing your mortgage?
A Supporting Voice for Moon Valley Since 1970 Passionate about residents, community businesses, and local organizations. - Founder of Moon Valley Block Watch -
GERRY will get you
pre-approved and help you find the best mortgage for your needs! - ACCESSIBLE - KNOWLEDGEABLE - RESPONSIBLE -
Experience | Service | Commitment
Gerry Johnson
Senior Loan Officer Reverse Mortgage Specialist
602.390.6422
gjohnson@peoplesmortgage.com NMLS-183091 AZ-0911738 | CA-DBO183091
Full-service REALTOR® since 1984 Specializing in Residential Real Estate National Seniors Certification to help in relocation
blanche@moonvalleyrealty.com ABR, e-PRO, GRI, IRES, SFR, SRES
Moon Valley resident since 1974 NMLS-6274 | AZ-0904164 | CA-CRMLA4130661/FLL603L266, Licensed by the Department of Business Oversight Under the California Residential Mortgage Lending Act
Join us April 16th for a Block Watch Get Together Moon Valley Park Saturday 3:30 to 4:30pm, 7th Avenue and Coral Gables 35