Tag: Virginia

The Scarlett O’Hara Approach, or Hope Is NOT A Strategy

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

A friend of mine has a crystal ball sitting on his desk, and taped to its base is a sign that reads, “Temporarily Out Of Service.”

Too bad – because right about now most of us could really use a crystal ball.

Most financial professionals agree that planning for our future is as much art as it is science, and that determining how much money we’ll need to get us through the golden years is akin to trying to predict the future.

This said, however, there is general consensus on what doesn’t work.

The Scarlett O’Hara Approach, or Hope Is NOT A Strategy

Scarlett O’Hara might have been very surprised to learn her approach to bad news – “Tomorrow is another day” – has a name. Optimism bias, also known as unrealistic optimism, is a common trait that causes people to believe they are at low risk of experiencing a negative event. Adolescence is heavily associated with optimism bias, a bias that frequently leads to an increase in risky behaviors. In the medical realm, optimism bias causes individuals to put off measures that contribute to good health.

And for many, optimism bias causes us to believe financial matters will get better on their own as we head into retirement.

Rick Gow, wealth management advisor with Lara, Shull, and May in Falls Church, Virginia, says, “A measure of pessimism is not bad when you’re planning for retirement. You can’t just ‘hope’ you’re going to have enough to get you through the most expensive years of life. A plan is of paramount importance.”

With life expectancies now extending into the 90’s, most of us are eventually going to draw upon every savings “bucket” we have available. And that’s where the FHA Reverse Mortgage comes in.

Reverse Mortgage was never intended to be a replacement for a sound financial retirement plan. However, it can play an important role in augmenting what is already in place, and slow the burn-through rate on investments and other retirement instruments.

If you, or someone you know, would like to look into the potential benefits of a reverse mortgage, give me a call. I always love hearing from you.

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

So What is the “Fiscal Cliff,” Anyway?

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

You’re wondering what the Fiscal Cliff is all about? Here are the main issues:

In 2013, tax cuts for individuals will expire, along with long-standing tax breaks for businesses. Taxes for President Obama’s health care law will kick in, as will spending cuts enacted by Congress as part of the debt-ceiling deal. Long-term jobless benefits will also expire.

So What?

Here’s what: The Congressional Budget Office (CBO) estimates that if all these items occur, an estimated $600 billion will disappear from the U.S. economy in 2013, and push the country into a double-dip recession. Given that Europe is officially in a recession for the second time in four years, if our leaders don’t act now our economy is going to fall headlong over the same cliff.

And keep your head on a swivel regarding inflation. While the latest Producer Price Index and Consumer Price Index reports show inflation remained tame at the wholesale and consumer levels in October, inflation can quickly get out of hand.

What does this mean for home loan rates?

Inflation is the arch enemy of mortgage rates. However, home loan rates should continue to benefit from the uncertainty in Europe. This is because investors will likely continue to see our bond market – including mortgage bonds – as a safe haven for their money. But inflation is a very real threat to home loan rates: if inflation hits, look for mortgage rates to go up.

The bottom line is this:

Home loan rates remain near historic lows, making now the best time ever to talk with the seniors in your life about extinguishing their “forward” mortgage with a HECM Refinance. Also, there has never been a better time to use a HECM for Purchase to get into a home appropriate for aging in place. It’s hard to say how much longer rates will stay this low.

Call me with questions you or your clients might have – I always love hearing from you.

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 · Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Virginia’s Livable Home Tax Credit Program

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

Did your parents want to leave their home when they retired? Do you wish to leave yours?

If you do, you are overwhelmingly in the minority: fully 95% of people polled state they wish to age in place. But what if the layout of the home just doesn’t work?

Tax Incentives for Improving Accessibility in the Home

For individuals with accessibility issues in the home, Virginia’s Livable Home Tax Credit (“LHTC”) program provides financial incentives for improving accessibility in residential housing. The credit applies to the purchase of a home or to the retrofit of a current home.

Tax credits up to $5,000 are available for the purchase or construction of an accessible residence, or up to 50 percent of the cost of retrofitting an existing home, not to exceed $5,000. If the tax credit exceeds the eligible individual’s tax liability, the credit may be carried forward for up to seven years.

It is important to note: applications must be filed with the Virginia Department of Housing and Community Development (DHCD) by February 28, 2013 for a purchase or retrofit completed in 2012.

For more information visit the DHCD website at www.dhcd.virginia.gov/LHTC

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Potato Skins and Emerging Trends: Aging In America

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

Charles, Jr., always preferred the name Chuck. But in his years as a scrappy street-fighter in Providence, Rhode Island, he was simply called “Bull Dog.” The aptness of that description I will leave unaddressed.

Chuck was the only son of Charles, Sr. and Elizabeth, New England socialites who came into fast money when Charles, Sr., a chemist, patented a durable fabric blend for Pullman sleeper cars. Wanting nothing to do with his parents’ new-found wealth, Chuck dropped out of high school to run bets for an off-track gambling ring. Not yet out of his teens, he was a heavy drinker, ruthless fighter, and on several occasions narrowly escaped police sweeps.

Around 2:30 Sunday afternoon, December 7th, Chuck and a friend were walking to join a game of nine-pin. One street over they heard yelling, and thinking a fight had broken out, ran to join the fray. What they found changed their lives, their nation, and indeed the whole world. What they found, of course, was news of Pearl Harbor.

Chuck’s particular journey led him into the U.S. Eighth Army Air Corps, proudly referred to as “The Mighty Eighth.” On its twenty-second mission his B-24 was shot down, and Chuck and the one other surviving crew member spent the remainder of the war in Stammlager Luftwaffe #17b, otherwise known as the infamous Stalag 17.

Hunger, cold, vermin, illness, and despair defined life for the 4000 men in the camp. Chuck, wanting documentation of the men’s lives, worked alongside two other corpsmen to create photosensitive paper, done by coating scraps of paper with a potato skin emulsion. The paper was then placed into a light-tight box, with only the smallest of holes carefully punched in one end. These photos exist to this day in a book called Kriege Memories, self-published after the war by Chuck and one of his fellow corpsmen.

Chuck, now gone, told me his story several years ago. As the daughter of an aerospace engineer, I gathered details of his story the way others collect baseball memorabilia, Indian head nickels, or teacups. I have Chuck’s photos, several Western Union telegrams, Red Cross communications, and his letters home that were never posted.

For me in some ways this account has grown richer over the years. Some of the power comes from the photos themselves, arrestingly clear despite their fundamentally unstable original medium, and their having been stored for years before being preserved.

But part of the elemental power is simply this: this was a generation that did what it took, with what was at hand, to get the job done. And though we are losing this generation, these qualities still persist.

This week past I met with…a “family.” My client, the homeowner, is well past 80, widowed, and in need of companionship, light housekeeping, transportation, and help with medications. Living with her is a male companion, a long-time friend, who is several years her junior. Also in the home is a pre-teen boy and his mother, who lost her own home when she was laid off from her HR job. She is now back to work, and well on her way toward regaining financial stability.

Messy, right?

Oddly, no.

In fact, I have been in households composed of blood relatives that were far less functional, far less kind, and in far greater distress.

Life is really just stitched-together stories, so I asked my client to tell me the story of her household. The simplicity, elegance, and bald-faced honesty were arresting: she said, in effect, “I have a house, they needed a home. I need help, they have youth.”

Even now this is a generation that does what it takes, with what is at hand, to get the job done.

And, as it turns out, my client and her new, blended family are far from being an isolated phenomenon. In fact, it is one of the fastest-growing household trends…

And more on that in my next post.

Let me know what you’re seeing – I always love hearing from you.

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

My Retirement Goal? Get Old, Get Sick, and Move Out of my Home

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

How many times has this happened to you: you ask someone their goals for retirement and they say, “Get old, get sick, move out of my home, and die in a care facility”?

Can I hazard a guess as to the answer?

New Numbers, No Surprises

In a new study entitled United States of Aging, jointly sponsored by National Council on Aging, USA Today, Florida Public Television, and United Healthcare, 2,250 Americans aged 60 and older were queried on a variety of aging-related issues.

Turns out, a whopping 90% of respondents say they wish to age in place. And nearly 3 in 4, or 74%, plan to make adaptive changes to their home in order to make possible aging in place. ⁱ

I just have to ask: Does this surprise anyone?

Senior Strategies, Booming Business

Russell Glickman, Washington, D.C. area universal design specialist and winner of the National Association of Remodeling “National Remodeler of the Year” award, says:

I am seeing definite trends in remodeling. As clients make design changes they’re asking more about long-term, universal design, such as first-floor bedroom suites. Also, lot of Baby Boomers are asking about their parents. They’re not really focused on themselves yet, but they’re planning to move their parents into the home. Then later, when they are at that point, they’ll modify the space for themselves.

With many Americans projected to live well into their 90’s, staying in the home as long as possible is often the most significant cost-containment strategy available.

But containing costs is only half the equation. More available money is the other half.

Alicia Munnell, director of the Center for Retirement Research at Boston College, says, “I see a future where people in their 60s are having dinner with friends and the conversation leads to: ‘Where are you getting your reverse mortgage?’ It will be the norm. It is going to take a while, but we will have a cohort of people entering retirement who only have $100,000 in their 401(k) plans.”ⁱⁱ

New Normal = “Old” Normal

We all are used to hearing the term “the new normal.” Truth is, “old” is the new normal, and we’re all – or soon will be – facing issues of aging.

And as we age, hopefully with grace, in dignity, and with financial soundness, the FHA Reverse Mortgage is likely to play a central role in helping many Americans achieve these goals.

Give me a call with your questions. I always love hearing from you.

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

ⁱhttp://www.ncoa.org/assets/files/pdf/united-states-of-aging/2012-survey/8-2-12-United-States-of-Aging-Full-Findings-FINAL.pdf
ⁱⁱ(http://reversemortgagedaily.com/2012/08/15)

Thickness, Congestion, Repugnance…And the Preservation of Dignity

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

This week past my friend Jean and I took a road trip from sweltering Washington, D.C. to almost as sweltering Gloucester, Massachusetts. On the way we stopped in Boston to visit Jean’s parents, where she introduced me as the “geekiest friend” she knows.

I thought this unfair: she must have at least one geekier friend.

In any event, on the trip I listened with rapt attention to a lecture by Harvard professor Alvin E. Roth, the George Gund Professor of Economics at Harvard Business School.

The lecture carries the remarkably boring title, “What We Have Learned From Market Design,” and discusses three elements that trip up markets, whether we’re talking about kidney transplants, adoption…or, presumably, the hottest new iPhone.

Basically, the three elements are as follows:

Thickness: do enough people need what you offer?

Congestion: can enough be produced to make it widely available?

Repugnance: is what you offer socially acceptable?

Now, I’m a Reverse Mortgage Specialist, a mortgage banker. Seniors – or their adult children – come to me for money. So why did Dr. Roth’s lecture captivate me? And why do you care?

One of the biggest challenges facing us is how, as a nation, we are going to keep our seniors – our parents, friends, neighbors, the older members of our communities – safe, sound, and secure as they retire, relocate, and move ever deeper into old age. And much of this revolves around their housing.

And that’s where Dr. Roth’s lecture comes in:

Thickness: In America, 10,000 – TEN THOUSAND – boomers a day turn 62. The U.S. Census Bureau defines a mid-sized town as one having 250,000 people. That means every 25 days enough people in America turn 62 to fill a city – an entire mid-sized city. We are talking about lots and lots and lots of people – 76 million, to be precise – who over the next 18 years are going retire, move…and in many cases, need additional funds to make it through retirement. People, lots of people, need, or will need, an FHA HECM, also known as a reverse mortgage.

Congestion: Under current guidelines, to qualify for a reverse mortgage a person must be at least 62 and have sufficient home equity to pay off any existing loans on the home. The reason credit score, employment, or income doesn’t matter is because the borrower does not pay back the loan; the home pays back the loan once the borrower no longer needs the home. As long as we have homeowners, we have what we need to keep those homeowners in their own home.

Repugnance: I’ll be blunt – the old, pre-FHA reverse mortgage had a wretched history. However, the new FHA HECM is federally insured, federally regulated, and very closely monitored. This is as it should be – after all, we’re talking about your parents and mine, your neighbors and mine, and, eventually, you and me. Nonetheless, despite all the meticulous oversight, addressing fear of my loan product is a big part of what I do. With the huge educational programs and advertising campaigns over the past few years, the perception has begun to change, but misunderstandings still abound.

We’re all in the same boat: day by day we get older, our parents get older, and the nation’s financial situation gets a little more strained. The fear of running out of money in retirement dogs many of our seniors. Ask seniors and they’ll tell you: reduced circumstances and the attendant loss of dignity is not far from their thoughts. Fortunately, there are options.

If you or someone you know would like to talk, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

To watch Dr. Alvin E. Roth’s lecture go to:   http://www.youtube.com/watch?v=7qrYC0Ojf-o

Reversing Years’ Worth of Skepticism

by ReverseLady, posted in FHA HECM, Retirement Planning, Reverse Mortgage

Even if they don’t adhere to it, most people have at least heard of the “bucket” strategy of saving for retirement. Basically, it’s a method of asset allocation, a way to diversify investments and save for the day you’re no longer working full time.

But here’s a question you might not know the answer to: for most people, what is the biggest – and best funded – bucket?  Cash equivalents? Fixed-income securities? Pension?

Answer: No, no, and no. For most people, the single biggest “investment bucket” is their home.

You can think about it this way: you might have designated several buckets. But if you didn’t put sufficient money into them during the working years, those buckets are not going to get you through retirement. However, most Americans paid into their home, even during the past few years when times were tough.

But here’s the problem: after spending years pouring the first fruits of one’s income into the home, that money is frozen, tied up in an illiquid asset. It’s an investment, certainly. But it’s not one easily converted into an income stream for retirement.

Increasingly, however, drawing upon that bucket by means of an FHA reverse mortgage is being recommended as a way to meet seniors’ financial needs during retirement.

FHA reverse mortgages have been around since 1988. But until recently, the financial planning community viewed them as the dirty underbelly of financial products.  It was the rare financial planner who saw any legitimate use for them whatsoever, let alone who used them in a strategic way.

However, within the past few years scores of scholarly studies have shown both the near-term and long-term positive impact of reverse on standard of living, financial portfolios, and estates.

In “How Important Is Asset Allocation To Financial Security in Retirement?” authors Munnell, Orlova, and Webb with Center for Retirement Research at Boston College state:

…[F]inancial advice…tends to focus on financial assets, applying tools that give prominence to the asset allocation decision. But most people have little financial wealth, and financial tools are often silent on the levers that will have a much larger effect on retirement security for the majority of Americans. These levers include delaying retirement, tapping housing equity through a reverse mortgage, and controlling spending [emphasis added].

Of particular interest to many financial planners is that, when set up as a monthly payment option, a reverse mortgage basically annuitizes the home – and it’s a considerably bigger annuity than most people would have been able to establish in the years they were supporting their family, helping with college tuitions…and paying their mortgage.

Rick Gow, wealth manager with the independent investment firm Lara, Shull, and May in Falls Church, Virginia, cites the example of a 66-year-old with a house valued at $400,000.

After subtracting closing costs, the retiree could receive a tax-free, monthly check of $1,252 for as long as the home remains the primary residence. By the time the homeowner turns 85, disbursements would total more than $289,100; by age 95, the total payouts would be over $435,600.

If the homeowner were to take a onetime, lump sum payout, he or she would receive approximately $256,800.  A third option would set aside that amount in a line of credit, the balance of which grows over time, tax free.

There is also a newer, reduced fee FHA reverse mortgage, called the HECM Saver. The over-all payout is less with this option, but Gow points out the lower closing costs make it a good option for some.

The majority of Americans fear running out of money in retirement more than they fear death, according to a May, 2012 AARP bulletin. In an America where 10,000 boomers a day turn 62, the FHA reverse mortgage has an increasingly pivotal role to play in retirement planning.

I always love hearing from you. Call me at any time with questions.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Babies Don’t Have Dumb Ideas

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

When my daughters were teenagers I often said the biggest difference between teens and babies is that babies don’t have dumb ideas yet.

But both teens and babies have this in common: just a couple years later, both are more capable, more independent, and better able to care for themselves.

It’s tough to acknowledge, but I now have to add my mother to the comparison.

My mother is probably the most gifted person I know: brilliant, beautiful, funny, well read, extensively traveled, graceful and poised.

But she is getting old, and her proficiency in daily tasks is falling away at a relentless pace. And, unlike either babies or teens, a couple more years is not going to make the issue any better.

NPR Morning Edition’s Jessica Smith, in “Baby Boomer Money Squeeze Worsens, Multi-Gen Households Rise” (June 6, 2012), writes,

Roughly 78 million baby boomers are moving into their retirement years now. At first, they will be the “young” old. Legions of retired boomers soon will be walking around the mall, volunteering with community groups and taking grandchildren on trips.

At first, that can be good for the economy. But this immense generation, born between 1946 and 1964, will keep aging. Based on current medical outcomes, most of the people who live beyond age 85 will end up with dementia or other disabilities that require costly care.

Here’s how fast the numbers will ratchet up: In 1990, only about 3 million Americans were over the age of 85. Today, the figure is 6 million. By 2050, the United States will be home to about 19 million people older than 85, according to U.S. Census projections.(http://www.npr.org/2012/06/05/154001412/baby-boom-money-squeeze-is-set-to-get-tighter)

Almost 20 percent of advanced elderly Americans now live with their aging adult children, putting tremendous pressure on “leading edge” boomers who are hitting traditional retirement age. Boomers tended to have fewer children, later in life, which in some cases has resulted in their still having dependents at home at a time previous generations would have been saving intensively for retirement. Additionally, many middle-aged parents find themselves helping grown children who have lost jobs, homes, and businesses – the classic “sandwich generation” squeeze, made more intense by a prolonged recession.

We are a becoming a nation of the old and the older, the squeezed and the very squeezed.

Writes Ms. Smith, “For individuals, families, local government officials and federal taxpayers, this demographic shift will drain dollars and attention, and force extremely difficult decisions about living arrangements, as well as end-of-life care.”

When we have these talks about taxes and government, what kind of numbers are we talking about?  The primary number to watch is the national debt: in 1970, when boomers were young, the national debt ran about 28 percent of gross domestic product. It now stands at 70 percent.

And, as in the case of my mother, a couple more years is not going to make this issue any better.

According to Centers for Medicare and Medicaid Services, Medicare will remain solvent until 2024. Starting last year, Social Security already began paying out more than it takes in.

As former U.S. Comptroller General David Walker, a federal spending expert says, “Government has grown too big, promised too much and waited too long to restructure. It is going to spend less over time … which means that individuals will have to plan, save and invest for the future.”

Plan, save, invest…and take out a reverse mortgage, according to research put out by Boston College in May, 2012.

….but more in my next piece about several watershed reverse mortgage articles published this spring by major research institutions.

Laurie

         Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank ·                   20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Too Much Life Left At The End Of The Money

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

Monday I had lunch with a Morgan Stanley wealth adviser. He is a charming conversationalist with a gift of giving animated accounts of issues he encounters.

Among the many things we discussed was the fact that, for the first time in his 27 years in the field, he has started having the following financial discussion with young couple:

  • Save for your kids’ college education
  • Save for retirement
  • Save to support your parents, not if – but when – they run out of money

Gone, according to him, are the days we could expect an inheritance from our parents. Rather, most of us will watch our parents live to deplete their own savings, and will have to step in to financially support them in their last years. I myself, as one immersed in financing for seniors, certainly see this trend playing out.

It was like reading a contrived movie script when I got back to my Middleburg Bank office after lunch and read the following Wall Street Journal headline: “Counting on an Inheritance? Count Again.” The subtitle read, “The bad news: Many baby boomers are likely to get less money from Mom and Dad than they thought. The worse news: They may have to help their parents financially instead.”

For many Americans, too much life left at the end of the money is a reality. According to the WSJ article:

…a 65-year-old man has a 60% chance of living to age 80 and a 40% chance of reaching 85. For women, the odds are 71% and 53%, respectively. All of this has made the 85-and-over age bracket the fastest-growing segment of the population. In an era of low interest rates, volatile financial markets, and rising costs for health and long-term care, finding money to cover those years isn’t always easy.

From the side of the desk I sit on, I would change this last sentence to read, “…finding money to cover those years can be nearly impossible.”

However, that picture can change dramatically if proceeds from an FHA-insured reverse mortgage (FHA HECM) are added to the equation. In fact, the Journal article goes on to say:

…there are several steps families should consider, financial planners say. Among them: Have parents recalibrate their budgets, downsize to a smaller residence, buy an annuity or longevity insurance to lock in a lifelong income, or take out a reverse mortgage.

I have often said the FHA HECM is as close to a miracle product as you are ever going to see in the world of finance. It’s not a fit for everyone, but for many, not only is it a good option, it is an excellent option. It lifts the burden on the upcoming generation, and allows seniors to live out their final years in the dignity and comfort of their own home.

A separate product, the FHA HECM for Purchase, is a purchase loan available for the senior who needs to relocate into a home better suited to aging in place.

Call any time. I always enjoy hearing from you – and I love walking you through your reverse mortgage questions. Talk to you soon.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com ·

www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

READ THE FULL ARTICLE AT: http://alturl.com/b3cpm

FHA Weighs Rule Reversal, Boon for Condo Sales?

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
Daily Real Estate News | Tuesday, May 22, 2012

The Federal Housing Administration is reportedly considering revising rules that many in the real estate industry have called overly strict and that have left many condo units ineligible for FHA’s low-downpayment mortgages.

For example, one sticking point under the FHA’s rules has been that “individual condo units cannot be sold to buyers using FHA-insured mortgages unless the property as a whole has been approved for financing,” The Wall Street Journal reports. However, condo association boards are increasingly opting not to obtain recertification of their buildings for FHA loans due to its tightened regulations against condo units.

FHA’s regulations “have had an enormous impact on individuals,” says Moe Veissi, president of the National Association of REALTORS®. More condo unit residents are finding they are unable to sell their unit because the condo board hasn’t obtained approval from FHA, Veissi told The Wall Street Journal. This then can have a roll-over affect that negatively impacts the price of condo units in the buildings then.

Half of all condo buyers tend to use FHA mortgages, and it’s an important source of lending for first-time and minority home buyers, Christopher L. Gardner, managing member of FHA Pros, a consulting firm that helps condo boards obtain FHA approvals, told The Wall Street Journal.

FHA officials say they are willing to reconsider some of their rules that have raised such an outcry among condo owners, lenders, and real estate professionals. For example, one rule the FHA is reportedly reconsidering is its stance on non-owner occupancy. As of now, FHA requires that no more than 50 percent of the units in a condo building be non-owner occupies. “This rule alone has made large numbers of condominiums in hard-hit markets ineligible for FHA financing, where investors have purchased units for cash to turn into rentals,” The Wall Street Journal reports.

FHA also is reportedly revisiting its condo rules on how many owners in a building can be delinquent on their fees. As of now, FHA refuses to approve a project if more than 15 percent of the condo units are 30 days or more late on their condo association fees, The Wall Street Journal reports.

Source: “Condo Sales May Become Easier if FHA Revises Rules Governing Mortgages,” The Wall Street Journal (May 18, 2012)