Senior Equity Financial, Inc.

>Why are there so many reverse mortgage experts overnight?

Posted by Craig Phillips on 12:41 pm - Sun, Feb 01 2009


We are amazed how many companies and people have jumped into the reverse mortgage market. This is good and bad. We welcome competition as this will only help get the awareness of reverse mortgages out there, but we still have a long way to go in educating homeowners on the various strategies of using a reverse mortgage properly in retirement. As competition grows, we will continue to see more programs become available, which is great, because this allows for different options to be used in different situations.

5 years ago it was an even playing field. Everyone had the same margins and it really did not matter who you were working with. This is not the case anymore. Now multiple margins and interest rate indices are available. Also, fixed rate reverse mortgages add another great component for those pulling out large sums of money initially. Fixed rate reverse mortgages will differ between companies as well. We are always monitoring which companies are offering the best rates to assure we pass the savings onto our customers.

What bothers us about all these overnight “experts” jumping into reverse mortgages is the inaccurate information we hear out there from customers and advisors we work with. A lot of this is no fault to the individual or company offering reverse mortgages, but simply due to a lack of experience in the industry.

Many individuals entering this business do not understand the patience and time commitment it takes to help people understand their options. This is not like a ‘forward’ conventional mortgage where you have a house you are purchasing or refinancing and there is a time sensitive situation to get the transaction complete. When you are in or approaching retirement, you need to make sure your decisions are well thought out. A mortgage is a large financial decision, whether it is a reverse or forward mortgage.

We look at the challenges our industry is facing and how many homeowners may not have been properly educated on the loans and programs available. We truly believe it is the responsibility of the mortgage professional to not only understand the programs themselves, but to be certain they have properly educated the homeowner on their options and terms of the loan program they choose.

This is where understanding the proper way to utilize a reverse mortgage is more important than ever. Not only do we sit down with individuals and discuss short term goals, but we also want people to think about longer term goals to assure they are making good planning decisions. Our goal is to treat people with honesty and respect and make sure you are aware of all margins, indexes, and programs available in the industry. Our industry needs to earn back the respect that many people who are no longer in this industry ruined.

>Is the Credit Crunch Effecting Reverse Mortgages?

Posted by Craig Phillips on 12:36 pm - Mon, Dec 29 2008

Everyone I talk to asks me how the credit crunch is affecting reverse mortgages.  This is a great question as there are many different aspects of the credit crunch which are helping reverse mortgages and other aspects which are having a negative impact.  Home value is one factor impacting reverse mortgages.  Due to the increased amount of foreclosures and distressed sales, the Fair Market Value of homes has significantly declined over the last 12 months.  We have witnessed home appraisals ranging from 5% to 30% below tax assessed value.  Since many towns base their tax assessment valuations on sales from the prior year many will not be representative of current market value.  It is important to know this if you are considering selling or refinancing your home.