Tag: Estate Planning

Remember When? Mortgage Debt and the Older Homeowner

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
Laurie MacNaughton – July 7, 2015

Remember when paying off your mortgage before retirement was a thing? Remember? Now, barely 40% of homeowners aged 60-65 live in a paid-off home.

But remember when seventy was old? Today I know seventy-year-olds who have started second careers, who run marathons, or who take ten days off work to volunteer in health clinics in Kibera.

It’s just a different world we live in – different opportunities, different expectations, different needs.

But there are attendant challenges in this new world.

No matter how gifted, how fit, how determined, at some point most people either have to slow down or just plain want to. But here’s the thing: if you’re still paying on your home, the first fruits of your monthly income go right back out the door to pay the mortgage. Also, like everyone else, most people in their 60’s or 70’s saw steep investment losses during the recession, losses that are harder to recover the older you are.

Added to the mix are these facts: boomers, in general, had babies later, and many are still footing kids’ college tuitions in the years when previous generations were saving for retirement. People also relocate more often, and later in life, so by the time they retire many people haven’t lived in their home 30 years.

If we had a magic wand, most of us would get rid of our mortgage debt. If granted three wishes, we’d gain back what our 401k lost – and add to it a mound of gold. If we had a genie, we’d have her undo that adverse health event. But needless to say, most people will have to look to other solutions.

Last week I met with a retired medical doctor. In addition to running a thriving medical practice, he had taught at one of the nation’s preeminent universities – until he suffered a stroke three years ago. “I never thought I’d be in a position of worrying about money,” he said to me.

“I have a substantial amount of equity in my home, so I tried to get a line of credit to help with cash flow. But I was told I couldn’t qualify because I’m no longer working. I really didn’t see this coming.”

Fortunately, the loan officer at his bank understood reverse mortgages. She gave the retired doctor my name – and it looks like he’ll be able both to get rid of his monthly mortgage payment and establish a line of credit for use in the future.

“When [the loan officer] first said ‘reverse mortgage’ I just about had another stroke,” the doctor told me. “I really thought she was nuts, because I was under the impression the bank owned the house with a reverse mortgage.”

His comment was one I hear so often it made me want to print up a cue card. It would say the following:

No – the bank doesn’t own the house.                                                                                                                                No – you don’t have to move if you use up your line of credit.                                                                                             No – the kids don’t have to pay back the reverse mortgage.                                                                                              Yes – you can sell the home and move if you want to.                                                                                                      Yes – you can always call me even after your loan closes.

A reverse mortgage is a home equity loan for the years when having a monthly mortgage payment can be a back-breaker. It can be a miracle for adult children struggling to bankroll their parents’ longevity. It can make aging in place possible.

A reverse mortgage is not a fit for everyone – just as homeownership is not a fit for everyone.

But as I’ve said many times, no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA-insured reverse mortgage might help during retirement, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] is a freelance writer and a Reverse Mortgage Consultant at Southern Trust Mortgage. She can be reached at: 703-477-1183, or Laurie@MiddleburgReverse.com

Ten Reasons Not to Read The Motley Fool

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

Laurie MacNaughton

Ok, enough is enough – what started off as sloppy journalism unbefitting a widely-read publication that purports to “help people take control of their financial lives” has become flat-out obnoxious as it spreads through the news channels.

I’m speaking about Peter Bennett’s poorly-reasoned, poorly-researched piece on reverse mortgage, published yesterday in The Motley Fool. The first time I was emailed a link and asked to comment I was willing to be forbearing: year’s end is historically slow in the financial markets, and doubtless the reporter was compensating by resorting to a favorite whipping boy.

Then I was sent the piece again for comment. And again. And…yet again. And pathetically, each was from a different news outlet. Apparently, fact-checkers for every major American publication are in Boca for the New Year, and left their cell phones in their hotel room.

So let me address some of most laughable, some of the most sensationalistic, and also some of the rudest and most elder-demeaning statements made by Motley Fool reporter Peter Bennett.

Bennett lists 10 reasons not to consider a reverse mortgage, and nearly each point becomes more fantastical. I have picked out his first couple points and last couple points, and analysed them sentence by sentence.

Point 1. High fees

Statement: Closing costs for a typical 30-year mortgage might run $3,000.

Reply: True. But they might not run $3,000. Closing costs are contingent upon many factors, and to pull a number from thin air is presumptuous and subject-matter ignorant.

Statement: For a reverse mortgage, they could run as much as $15,000.

Reply: True, but they might not run $15,000. There are many, many factors that determine closing costs, and in some cases closing costs could be, well, the $3,000 Bennett seems fond of.

Statement: That’s a lot of money just to access the equity in your own house.

Reply: Says who? If closing costs are this high it typically means there is a “forward” mortgage being paid off. A monthly mortgage payment is the single biggest monthly expenditure for most seniors, and a refinance that reduces their payment $70 a month just isn’t going to do the trick as far as putting them on solid financial footing. What they need is NO monthly mortgage payment, and a financial buffer. A reverse mortgage is the only main-stream refinance product available that can provide both, and that creates a solution to the cash flow problem so common during retirement.

Statement: Reverse mortgages come with more regulations than a regular mortgage so that accounts for some of the additional fees.

Reply: Baloney. Check your facts, Mr. Bennett.

Statement: Lenders also charge more because they claim they take on unique risks, in that reverse mortgages aren’t based on your income or credit score.

Reply:  Again I say baloney and check your facts. Or, better yet, cite your references.

Point 2. Property taxes and homeowners insurance to pay

Statement: With a reverse mortgage, the property remains in your name.

Reply: Score one for the “B” – he got this one right.

Statement: And because the property is in your name, you are responsible for paying all property taxes.

Reply: Um, do you know how this works, Mr. Bennett? They’re already paying property taxes themselves if they have no mortgage, and if they do have a mortgage, they’re escrowing for them. They’re already paying. This is not a new concept for a homeowner aged 62 or older. AND, many older homeowners qualify for a property tax reduction or for a property tax waiver. Their reverse mortgage does not impact their eligibility for this.

Statement: The lender also requires that you continue to carry homeowners insurance.

Reply: This is also not a new concept for a homeowner. And it is really rather demeaning to suggest the mature, experienced homeowner is not aware of homeowners insurance.

I’m going to skip several points here, each of which contain line after remarkable line of trash talk. But the last two points are so bad I can’t skip them.

Point 9. Stringent repayment rules

Statement: Typically, when the last remaining borrower living in a reverse mortgage property dies, the FHA requires loan servicers to send a letter showing the balance of the loan due.

Reply: No “typically” here: the servicer is required to send a statement of the balance due.

Statement: Upon receipt, the heir or estate administrator has 30 days to declare whether the loan will be repaid or the home sold.

Reply: By federal mandate there is an automatic 6-month period to sell or refinance the home, with two additional, six-month extensions possible.

Statement:  If no decision is made, the lender can initiate foreclosure proceedings.

Reply:  If no decision is made on any financed home, the lender can initiate foreclosure proceedings – and no 6-month grace period is tendered in the case of a “forward” mortgage. It’s just plain rude to imply homeowners and their families are unaware that homes with financing have to be dealt with.

Point 10. Heirs get less

Statement: As every month passes, the homeowner with a reverse mortgage sees debt increase and equity home equity (sic) decrease.

Reply: This is an appalling presentation of half the story. The amount the lender has lent collects interest, which will be repaid along with the loan, once the last person on the mortgage has permanently left the home. However, if homeowners have a line of credit, that line accrues a compounding growth month over month – imagine it’s a lump of bread dough sitting on the counter, getting bigger over time. The line of credit will grow even if the home goes down in value.

Statement: That equation doesn’t benefit heirs, so if you planned on leaving your heirs a little something, it will probably be very “little.”

Reply: Want to know what really doesn’t benefit heirs, Mr. Bennett? Adult children of aging parents burning through their own retirement funds at a double pace as they struggle to help finance their elderly parent’s longevity. If that older parent, however, can be self-pay through the end of life, his/her adult children stand a much greater chance of enjoying financial survival in their own retirement.

So to the armchair critics of reverse mortgage I say this: check your facts. Do your research. And don’t sit in judgment on those striving to maintain their own independence and dignity during retirement.

If you have questions regarding reverse mortgage, or would like to receive published research on the contribution reverse mortgage can make toward financial survivability in retirement, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Southern Trust Mortgage.

She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

How the “Back End” of a Reverse Mortgage Works

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage
Laurie MacNaughton and Neil Sweren © 2014

Realtors, home owners, and family members frequently have questions regarding how the “back-end” of a reverse mortgage (or HECM) works. The answer to the question depends upon whether the property with the reverse mortgage is underwater at the time the last person on title permanently vacates the home.

Selling the home if the house is NOT underwater

If the loan balance is less than the current property value, the sale is handled like any other home sale. There is nothing unusual about paying off a reverse mortgage with one exception: there are certain time constraints the lender MUST follow once the last person on title no longer occupies the home as his/her primary residence.

If the property is not underwater the reverse lender provides a written payoff statement. At closing, the loan balance is paid off – just as would be the case with any other mortgage.  After the loan is paid off, any and all remaining equity goes to the seller, which typically is the borrower’s heirs or estate.

Selling the home if the property IS underwater

If the loan balance exceeds the property value the process is a little different.

HECM payoffs are not negotiated like other short sales or short payoffs.  The lender must accept as satisfaction of the lien the first offer that is at least 95% of the home’s current appraised value.

HECM loans are non-recourse in nature, so the borrower and his/her estate CANNOT be held responsible for any shortfall.  This is true even if the borrower has millions in other assets.  The house repays what it can, and any shortfall is covered by the FHA insurance fund.

It is important to understand this is not a short sale, and that there is no negotiation required or permitted. The lender is prohibited by HUD from accepting less than 95% of the home’s appraised value.

What if the heirs want to keep the home?  

The lender does not care how the reverse mortgage is paid off, only that it is paid off. If the family desires to keep the property, the loan can be satisfied by refinancing or by paying off what’s due.

In an underwater situation, the 95% figure noted above holds true for family members who want to purchase the home: heirs can buy the home for 95% of the appraised property value – which is not the full loan amount.

Important note on time frames

It is important to note there are mandated time constraints placed upon the lender, and the clock starts ticking the day the last surviving borrower no longer occupies the property. Once the home is unoccupied, the borrower or his/her estate have six months to pay off the loan. In addition to the initial six months, up to two three-month extensions can be requested (for a total of one year) if more time is needed.

Extensions are not automatic; documentation that the home is listed for sale, a sale is pending, or that a family member is applying for financing on the home will be required in order for an extension to be granted.

Communication is key

The loan servicer should be contacted immediately once the home is vacant. Reverse mortgage servicers deal with “back-end” situations every day and help borrowers and family members through the process. However, they can’t help if they don’t hear from anyone. All reverse mortgage servicers send monthly loan statements to borrowers. Those statements contain all loan and contact information necessary to make contact with the lender.

If you have questions regarding an FHA-insured reverse mortgage, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Atlantic Coast Mortgage.

She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

Fed Survey: One-Third of U.S. Households Unprepared to Retirement

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

 

 Reposted from National Reverse Mortgage Lenders Association, ©2014
The Federal Reserve Board published the results of a new online survey this week, which found that 31 percent of non-retired respondents have no retirement savings or pension, including 19 percent of those ages 55 to 64.

Additionally, almost half of adults were not actively thinking about financial planning for retirement, with 24 percent saying they had given only a little thought to financial planning for their retirement and another 25 percent saying they had done no planning at all. Of those who have given at least some thought to retirement planning and plan to retire at some point, 25 percent didn’t know how they will pay their expenses in retirement.

According to the survey, the Great Recession pushed back the planned date of retirement for two-fifths of those ages 45 and over who had not yet retired, and 15 percent of those who had retired since 2008 reported that they retired earlier than planned due to the recession. Among those ages 55 to 64 who had not yet retired, only 18 percent plan to follow the traditional retirement model of working full time until a set date and then stop working altogether, while 24 percent expected to keep working as long as possible, 18 percent expected to retire and then work a part-time job, and 9 percent expected to retire and then become self-employed.

The survey was conducted on behalf of the Board by GfK, an online consumer research firm. Data collection began September 17, 2013, and concluded on October 4, 2013. Just over 4,100 respondents completed the survey. To view the survey’s key findings visit www.federalreserve.gov/econresdata/2013-report-economic-well-being-us-households-201407.pdf

And the WINNER for Most Embarrassing Is…

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
What would be the most embarrassing thing for you to admit? Your weight? Your age? Your bank balance?
For most Americans, it’s none of these. It’s their credit score.

According to a new poll conducted by National Foundation for Credit Counseling, 37% of respondents nationwide indicate the element of their life they would least like divulged is their credit score. Next on the list of embarrassing secrets? Credit card debt.

That these two go together really shouldn’t come as any surprise, as they are often closely linked.

How Credit Scores Work

Credit card debt is one of the most highly-weighted factors in credit scores, and it works like this: think of a jar. That jar represents the limit on your credit card. When the jar is full, you have hit the max on your card. You have filled your jar with debt – and that’s not good. In fact, if your jar is more than 30% full of debt, you will start to see it significantly impact your credit score. And no one needs to tell you it’s hard to dig out from under credit card debt.

Good Advice Gone Bad

Many seniors have credit card debt. There’s no question about that. And many seniors are having a hard time managing that debt – there’s no question about that, either.

But here’s the place I think a lot of financial advice gets wacky – almost mean. When you ask seniors how they accrued so much debt, the answers rarely include lavish expenditures, exotic travel, or irresponsible habits. Rather, most tell stories of illness, unexpected home or auto repairs, or assistance to distressed family members. Often I work with leading-edge boomers taking care of advanced-elderly parents, causing a double draw-down on retirement savings. To preach a gospel of austerity to a widow struggling to pay off her husband’s final illness goes beyond uninformed thoughtlessness; this is rank insensitivity bordering on cruelty.

What are the Options?

In retirement, options often become limited by health, skill set, and available employment. Selling the home and moving in with family is indeed an option, and for some it is a good option. Selling the home and renting is not currently a good option for many, as rents are at historic highs. “Forward,” or traditional, lines of credit can, in certain cases, make sense. However, with a forward line of credit, the homeowner acquires yet another monthly payment, which renders the loan of dubious assistance.

For many, the way forward is going to include a many-faceted solution set, including a reverse mortgage. With a reverse mortgage, one of the potential options includes a line of credit that can be drawn against in emergencies, and which does not require a monthly repayment. The debt is repaid when the last person on title to the home permanently leaves the home.

No one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA reverse mortgage might help with your retirement plans, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton is a freelance writer and a Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 Direct or Laurie@MiddleburgReverse.com

 

Laurie MacNaughton [NMLS# 506562] ∙ Reverse Mortgage Consultant, President’s Club ∙ Middleburg Mortgage ∙ 8190 Stonewall Shops Square ∙ Gainesville, VA 20155 ∙ 703-477-1183 Direct ∙ Laurie@MiddleburgReverse.com∙ www.MiddleburgReverseLady.com

 

 

Stick to What You Know, Suze

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, Retirement Planning, Reverse Mortgage

I don’t own a television – I never have. And, frankly, I cannot imagine any scenario under which I would want one. This fact is material to what I say next:

Suze Orman needs to butt out of discussions on topics she clearly does not know well.

In order here is a bit of background leading up to this admittedly snarky statement.

This past week I attended an event where a woman said to me, “I don’t really know much about reverse mortgages, but Suze Orman doesn’t like them – so that’s enough for me.” I mentioned I didn’t know who Suze Orman was, and the woman, clearly shocked, answered, “Suze Orman? She’s on TV. She’s America’s financial guru.”

STRIKE THREE, Suze. You’re out, girlfriend.

Strike one is this: for one television personality to impose her opinion upon her entire viewing audience displays presumptuousness beyond measure. Where does she get off saying the 6,000,000 million Americans over the age of 62 have the same needs, and can be told, out of hand, a reverse mortgage should be a last resort? This is particularly audacious in light of the many scholarly pieces published within the past three years showing so-called “reserve reverse” mortgages – those established early and used to augment other savings – greatly increase odds of financial survival in retirement. She’s out of date, off base, and apparently not well read.

Strike two: in her online transcript Orman says, “I would much rather you base your retirement on other income sources—your savings, Social Security, and a pension.” I would love to meet the person who says, “By golly, I would never have thought of that. Use my Social Security, pension, and savings to cover my living expenses? Thank God for Suze Orman, or I would have missed that altogether.”

To this point I say this: one of the worst things I see in the course of my job is the person doing what I call a “rescue reverse” – the person who has drained all other financial buckets, and is now turning to a reverse mortgage as a last resort. Many times, indeed, perhaps most times, had this person done a reverse mortgage when he still had other monies available, he would not be left wondering if his money would last. This is not hypothetical: the studies have been done, and these by major universities and retirement research institutes.

And…strike three? “America’s financial guru.” America’s financial guru? There are 360,000,000 Americans. That’s a lot of people for one “guru.” I’m surprised Janet Yellen, Ben Bernanke, Harold Evensky, Robert Shiller, or any of the other 54 Americans to win the Nobel Prize in economics didn’t make the list.  And anyway, who says she’s America’s financial guru? It’s like saying Sandra Bullock is America’s sweetheart. Thank you, but I reserve the right to pick my own sweetheart – and my own financial advisor.

No one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA reverse mortgage might help with your retirement plans, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS 506562] is a freelance writer and Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 or Laurie@MiddleburgReverse.com.

Contemplations of a Crummy Magician

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

I stood waving my hands in front of the paper towel dispenser like some feeble magician trying to conjure paper towels, when the thought occurred to me: I frankly can’t remember the last time I heard someone complain about the rigors of pulling a paper towel from its dispenser. Electric paper towel dispensers solve a problem that never was a problem.

This got me to thinking: how many other fixes fix problems that aren’t problems? And if you can believe it, I actually came up with several – but that’s a different commentary altogether. It’s the corollary that hit home.

Finite choices

Remember functions? Those funky f(x) equations in math class? Basically, a function says if I do this, I get that – one solution for each problem.

Fortunately, most day-to-day issues have many solutions. But here’s the thing: the farther one travels into retirement, the more limited options become.

Most of us are going to need additional options if we’re going to enjoy what experts call “financial survival in retirement.” Not a cool term…but a very real problem.

Larger solution sets

In what I consider one of the most encouraging transformations in the history of the reverse mortgage product, I am seeing a regular stream of clients referred from the financial planning community. Seniors seeking informed input are turning to an informed source, namely their financial professional. Of course, I’ll never know how many financial professionals steer their senior clients away from reverse mortgage – but I do know an increasing number tell me they view reverse mortgage as a legitimate financial tool when used in concert with a comprehensive financial plan.

Financial professionals refer clients to me well before catastrophe strikes, before clients’ means have dwindled, before financial limits are reached – before the financial boat plunges over the cliff of desperation.

Planners understand that more financial buckets equal a better outcome – and they understand that a reverse mortgage is simply an additional bucket.

Real solutions for real life

I hear the same stories everyone else in the financial industry hears: seniors unable to return to full-time employment. A spouse lost, and the resulting 50% drop in income. A catastrophic event – or a chronic condition that became financially catastrophic. Or, simply, too much life left at the end of the money.

A real problem meets a real solution

Unlike the motion-detecting paper towel dispenser, reverse mortgage is a real solution to a real problem.  When put in place preemptively, before it’s just a crisis management tool, reverse mortgage can be part of a sound retirement plan.

No one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA reverse mortgage might help with your retirement plans, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS 506562] is a freelance writer and Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 or Laurie@MiddleburgReverse.com.

The Eternal Question of the Potato Chip Purchase

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

Ok – to be honest, here’s a question I never thought to ask: at what age do people buy the most potato chips?

Or how about their first home? How old on average is the person buying that luxury car? For that matter, at what age does a person’s spending peak?

Turns out, all these age-related questions have highly predictable answers.  And because the answers are highly predictable, there are trends you can pretty much hang your hat on, particularly when it comes to expenses related to aging.

On February 11 the weekly Congressional Budget Office reported:

Beyond 2017, CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades. That projected slowdown mainly reflects long-term trends—particularly, slower growth in the labor force because of the aging of the population. (Read the full report at: http://www.cbo.gov/sites/default/files/cbofiles/attachments/45098-Testimony_Senate.pdf)

But who is responsible for paying for aging-related costs? That was a question posed to nations around the globe by the Pew Research Center. In January of this year Pew reported the U.S. is one of only four countries that believe seniors should be self-pay throughout retirement. In fact, 46% of U.S. respondents believe the elderly should be financially self-supporting, topping by a fairly wide margin the other three nations, which include South Korea, Germany and Britain.

Frankly, count me squarely among the 46%. I don’t want my daughters footing the bill for my retirement years: they’re going to need for their own retirement every penny they can save.

However, saying you want to be self-pay and actually achieving it are two different things. In fact, according to some studies, in the U.S. nearly 70% of seniors receive family assistance – both financial and physical.

There are no easy answers to financing longevity. It would be nice to think someone holds the magic solution to financial issues related to aging. Expecting the government to come up with the solution clearly is not going to work. Hoping for a miracle is a long shot, and hitting the lottery a longer shot still.

It’s going to take planning, creativity, help from family, friends and faith communities, and cooperation at the hyper-local level to get most Americans through retirement with as much independence and dignity as possible.

Fortunately Americans in general, and boomers in particular, are characterized by creativity, resilience, and determination, and I, for one, think we’re up for the challenge.

And, as I have said many, many times: reverse mortgage is going to play a role for many of us.

Reverse mortgage was never meant to be the full financial solution to retirement needs.  For most of us, there is not going to be one all-inclusive solution that meets evolving needs in retirement. However, when combined as part of a comprehensive plan, reverse mortgage funds will combine to fund our ever-increasing longevity, and make aging in place possible for many.

Oh, and by the way – age 42, 31, 53, and 46. Just in case you were wondering.

Laurie

Laurie MacNaughton [NMLS 506562] is a freelance writer and Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 or Laurie@MiddleburgReverse.com.

Alien Abductions, Anyone?

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
Laurie MacNaughton [506562]

This past week an article on reverse mortgage appeared in the online edition of CNNMoney, a publication with a solid history of well-written, well-researched financial news. Last week’s piece, however, entitled Reverse mortgages: Safer, but far from risk-free, is chock full of inaccuracies, muddled concepts, and inflammatory comments, and is altogether unworthy of an esteemed publication. Just about the only way the reporting could be worse was if it included interviews with victims of alien abductions.

The article’s subtitle reads, About 10% of reverse mortgage borrowers go into default. Apparently, author Les Christie failed to read the report from which this statistic was taken. Or is it rather that CNNMoney editorial staff jobs have been outsourced to piecework editors in India? Whichever the case, the inaccurate reporting is inexcusable.

Accurate information on FHA-insured reverse mortgages is not hard to come by – but it does require at least a minimum of fact-checking, and – gasp – a careful reading of the publicly-available congressional reverse mortgage audit.

If this blogpost were simply a rant about yet another sensationalistic slam aimed at reverse mortgage, it would not be worth the reading, much less the writing.

But here’s the thing: something far larger is at stake here, namely, the financial well-being of an already fearful, highly vulnerable sector – Americans heading into retirement and those already well into their retirement years.

With every inflammatory, factually-inaccurate, poorly-researched piece, seniors grow yet more fearful of a product that has a long track record of success when used as part of a long-term financial plan. Les Christie and CNNMoney do seniors no favor by presenting obsolete objections, inaccurate figures, and wrongly-interpreted statistics.

Reverse mortgage was never intended to meet every financial goal in retirement. However, it can create a federally-insured financial safety net, an extra financial “bucket,” to draw upon in the retirement years.

If you would like to learn more about how FHA-insured reverse mortgage may help meet your retirement goals – or would just like to talk – give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS 506562] is a freelance writer and Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 or Laurie@MiddleburgReverse.com.

Soldiering Through: Men on the Front Lines of Caregiving

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
Laurie MacNaughton

When my firstborn was barely two she and her best friend, a little boy named Willoughby (really), spent the afternoon playing with an assortment of stuffed toys. While Willoughby practiced drop-kicking the animals against the wall, Jessica sat diapering them. When I fed them peanut butter sandwiches for lunch, Jessica nibbled hers into a rainbow; from his, Willoughby manufactured a gun.

Assertions of my feminist friends notwithstanding, as the mother of girls I firmly believe it is the easy province of a woman to care for the weak, the sick, the young, the aged. And, be it nurture or nature I think these tasks come harder to men. Thus, I have unqualified respect and admiration for what seems to me to be an increasing number of adult sons serving as primary caregivers for aged and infirm parents.

I am just returned from visiting my own mother whose agonizing last chapter is rapidly drawing to a close. Seated beside her, hour after hour, is my oldest brother. A retired Bell Labs particle physicist and former Ivy League professor, this caregiving role is not an easy fit. Yet there he sits, tending her unglamorous, repetitive, relentlessly-increasing needs. I took his place as much as possible during my stay, and invariably he headed for bed in an attempt to catch up on months’ worth of missed sleep.

For my part, when my mother slept I returned phone calls. Back-to-back I spoke with two men, one a prospering real estate broker who, weekends, travels a thousand miles each way to help with his mother’s care; I then spoke with an aging adult son serving as primary caregiver for his advanced elderly father. Not many days earlier an elder law attorney called me in reference to a client trying valiantly to honor his mother’s wish to age in place, despite her degenerative condition.

Then tonight, Thanksgiving night, as I drove home from the airport I took a call. An unspoken universe of sacrifice implicit in the adult son’s one statement hit home in a way he could scarcely imagine: “My concept of normality has gone to pot,” he said simply.

Nothing more need be said, my friend. Well am I aware of what you have forgone to care for your mother. And well I know how meager is the support for a man serving on the front lines in this role as primary caregiver.

Residential managed care has an indispensable function in today’s world. Professional in-home caregivers are invaluable, and hospice a godsend. But rarely are any of these the full solution to aging parents’ needs. It is appropriate that family cares for family – and there simply is no substitute for family.

So men – those of you who diaper and dress and swab and shower an aging parent, who mop and launder and scour and scrub until late into the night: you are an example to all of us privileged to know you.

And if you would like to talk about help financing your aging parents’ needs – or would just like to talk – give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS 506562] is a freelance writer and Reverse Mortgage Consultant at Middleburg Mortgage, a Division of Middleburg Bank. She can be reached at: 703-477-1183 or LMacNaughton@MiddleburgBank.com.