Posted by Grammyzoom on 6/25/10 9:41am
Msg #342480

A few more words about Reverse Mortgages!

I am really surprised by the comments here about RMs. I love doing them. For the most part the borrowers have been given so much information about their loan that you don't really need to go through the documents as much as a forward loan. I found that when I do try to explain things it only confuses the borrowers.

Yes, they are elderly. Yes, they like visiting and yes they sometimes have difficulty writing their name. But if you spend just a few minutes at the onset of the signing getting to know them a little bit, listen to their stories etc. they are happy and ready to sign. We have done 100's of RMs and they usually do not take any more time than any other signing and they just make you feel good. It is nice to spend a little time with people who may be really lonely and you leave them a little happier. And it is wonderful to see those people who are getting these loans for financial survival be in a safer and happier life in their Golden years.

So, please, anyone reading these posts, please try to look at the Reverse Mortgages with different eyes, you will not regret it!

Reply by Linda_H/FL on 6/25/10 9:53am
Msg #342484

I agree and disagree here...

Agree: I like doing them too - most borrowers are very well informed, and if they don't get it they have supporting family members that do...in fact, for the most part they probably understand their loan better than we do and better than regular borrowers do...and the borrowers are so pleasant and polite...

Disagree: I disagree in that they take the same amount of time - some do - most take longer due to physical limitations or they just sign slower...and most of the packages are a bit bigger than normal (I've had one or two under 100 pages - most are bigger)...AND they take longer as many of the elderly just want the socializing time...

But..I like them...wish I had more..

Reply by bagger on 6/26/10 8:47am
Msg #342606

Re: I agree and disagree here...

I had one of the worst yesterday!
1. Reverse Mortgage.
2. Son has POA
3. Trust involved!!!

It took forever for son to sign Jane Doe by John Doe as her Attorney in fact, OR Jane Doe, trustee etc. etc. etc.

Reply by Linda_H/FL on 6/26/10 2:12pm
Msg #342643

Re: I agree and disagree here...heh...

And I had 2 yesterday - afternoon with broker - very nice signing AND brokers says I'll be back as he can pick his signing agent...WOOT!...

Second one BofA - no faxbacks - great fee ... took about 90 minutes BUT that was because he was looking for LO's number for question...placed 3 calls and no answer at any so we signed away anyway and he'll call LO on Monday....retired chiropractor and his wife...great people..

Yes I'm sure some can be a pain...I've not had a really bad one yet though...lengthy yes...bad, no...guess I'm lucky...

Reply by Linda_H/FL on 6/25/10 10:00am
Msg #342486

Okay...how did you do that???

I just got a call for a RM for today!!!! Wow...you're good!!....LOL

Reply by Linda_H/FL on 6/25/10 10:14am
Msg #342489

Mutter mumble grumble....

Closing at 3...getting me docs at 1:30...agreed I can move to 3:30 but no later (that's cutting it close here)...and I can't contact borrowers in advance....

Being reassigned

Reply by Notarysigner on 6/25/10 10:40am
Msg #342491

I do um but don't like to. Looking with my lying eyes I see

fear, desperation, coercion concerning the ones I've done. Then there's the ones wIth the POA and in a trust. When I leave I feel like I've committed a crime.

I probably shouldn't do them because my heart is not in it. Just downsizing is a much better choice in my opinion.

I know, everybody doesn't have family and I am sad because of it.

Reply by Grammyzoom on 6/25/10 11:36am
Msg #342498

Just one more thing and then off to signings. YEAH!!!!

One example: I did one signing with a woman whose income per month was $900. Her mortgage was $800 a month. (Husband died). She drove an elderly gentleman around to appointments to make food money. When we completed the signing she laid her head on her table and sobbed with joy. Her life was about to change.

This is typical in our area and I am happy and proud to be a part of this.

Have a wonderful day and weekend everyone!

Reply by Linda_H/FL on 6/25/10 12:27pm
Msg #342512

Another example

Gentleman signer - taking RM because his late wife's medical bills from her cancer treatment were all but burying him and he wanted to be able to keep their home...so both of us through teary eyes sign this package ...

Reply by Hugh Nations Signing Agents of Austin on 6/25/10 11:40am
Msg #342501

I wholeheartedly agree, Carol

Perhaps as a former reverse mortgage loan officer I am prejudiced, but one of the reasons I became an RMLO is that I liked doing them. I find the borrowers almost uniformly appreciative of my work. And it is such a treat for me to run across one of our few remaining WWII vets, and prod him for accounts of his service. One of the highlights of my work as a signing agent was the time I did a reverse for a former B17 ball turret gunner. Those guys are rare as a Speedy Closings check actually being in the mail. The mortality rate was astronomical. The reason is evident in The Death of the Ball Turret Gunner, only a five-line poem but one of the most quoted to come out of WWII:

The Death of the Ball Turret Gunner

From my mother's sleep I fell into the State,
And I hunched in its belly till my wet fur froze.
Six miles from earth, loosed from its dream of life,
I woke to black flak and the nightmare fighters.
When I died they washed me out of the turret with a hose.

They just aren't making them like The Greatest Generation anymore.

Reply by Linda Juenger on 6/25/10 11:48am
Msg #342504

Re: I wholeheartedly agree, Carol

2 of my most memorable Reverse's were a very sickly gentleman who had no children. He could now afford to have day nurse's come and stay with him in his own home instead of a nursing home. He said he knows the day will come, but until then he wanted to be at home. Another one I just did was a gentleman (still very active) took out the Reverse to put 2 grandkids through college. He said that was the best thing he could do for them to give them a chance in this world. I thought it was wonderful, what a super grandpa he was. He said his son was all for it too. Both of these gentleman knew exactly what they were doing and was the best thing for them.

Reply by Notarysigner on 6/25/10 12:04pm
Msg #342507

Re: I wholeheartedly agree, Carol

obviously, as we are different so are our experiences. My neighbor across the street (I didn't do hers) had a bucket in her living room to catch the rain this winter because she can't afford to make the roof repair and the company that has her reverse mortgage doesn't feel it's necessary.

Having your home in tip top shape should be a prerequisite but some folks just don't understand why. They didn't plan on living ten - 15 years more. We all have choices to make don't we.

Reply by Sylvia_FL on 6/25/10 12:22pm
Msg #342509

Re: I wholeheartedly agree, Carol

"They didn't plan on living ten - 15 years more. We all have choices to make don't we"

A little OT but this brought to mind:

And yet the thought of death brings me no fear. That World than this to me hath more of cheer: I deem life but a loan which God hath made. And I'll repay it when the time is here.

Reply by Linda Juenger on 6/25/10 1:59pm
Msg #342533

aw, Sylvia. Brought a tear reading your response. So true n/m

Reply by Sylvia_FL on 6/25/10 2:28pm
Msg #342537

Re: aw, Sylvia. Brought a tear reading your response. So true

of course I didn't write that - but it is a favourite of mine.
Comes from The Rose Garden of Omar Khayyam.
He wrote some beautiful poetry.

Reply by Paul2_FL on 6/25/10 2:28pm
Msg #342536

Re: I wholeheartedly agree, Carol

Like others here I've had good and bad RM signing. However, for the most part, they have been good. You get to meet some very interesting people who want to share some of their life's experiences with anyone willing to listen. Whenever I accept an RM closing, I always try to allow an extra 1/2 hour to the average signing time for this reason.
One RM story always sticks in my mind: An elderly lady was originally going to leave her home to her son who lived in another state. Her home was almost paid for and worth a lot of money. It was decided between her and her son that once she sold her house she would move in with him and his wife. Before putting her home up for sale she went for a week's visit to her son to see what accommodations they had for her. Upon arriving she was led down into a finished basement by her daughter-in-law and told this is where she would be staying. She told her daughter-in-law she didn't like it because there wasn't any windows and she would feel confined. She asked why she couldn't stay in the spare room upstairs? The daughter-in-law stated the "that room is reserved for my sister when she comes to visit". When her son came home from work that day she discussed this with him but he sided with his wife. The following day she cut her visit short and left for home. Her son was ticked and his last remark to her was "you make your own bed and lie in it".
She did! She planned to stay in her house and, with the cash she could get from the RM, take trips abroad and elsewhere. Her overall plan was to make sure her son and daughter-in-law didn't get a dime!

Reply by Ilene C. Seidel on 6/25/10 3:48pm
Msg #342546

Re: I wholeheartedly agree, Carol

How terribly sad the Son took offense to his Mom's concerns. I would do the same thing don't leave them a dime and enjoy the life she has left.

Reply by bob/IA on 6/25/10 8:10pm
Msg #342577

Re: I wholeheartedly agree, Carol

good for her!

Reply by Susan Fischer on 6/26/10 1:21am
Msg #342591

Re: I wholeheartedly agree, Carol - me too...so many

fabulous people, wonderful stories,k improved lives...

Hugh, I'm crying so hard,kl cant' see...

Reply by CopperheadVA on 6/25/10 2:31pm
Msg #342538

Here in Virginia, I have not found that the borrowers are well-informed about the paperwork involved with a RM. In my mind I question what type of counseling they received because they don't seem to be familiar with a lot of the docs in the package (this pertains to the ones I've personally done - I understand that other notaries have had good experiences with RM's). I've done two where the L/O was present - that was very helpful and those went smoothly. The very first one I did, the signer and her three adult children had no clue about any of the paperwork and it was a fiasco. They were hostile towards me as well. I felt totally sandbagged by the TC and L/O on that one.

Reply by Notarysigner on 6/25/10 3:05pm
Msg #342541

I guess I must be on the wrong side virtual world,....Ooh well that's the norm for me.

Reply by CF on 6/25/10 3:13pm
Msg #342542

I have not done many of these...but my fair share. I have only had a couple come through that we really a "dream come true" scenario. Most of the ones that I have done...seem to have inflated fees and low value....the borrowers were only getting a one time lump sum and it seemed to me very short sighted of what the situation was going on around them.

It appears to me that the deals that make monthly payments to the home owner are better than than lump sum payouts. But who am I....they knew what they were signing and they had family members their that knew the figures. One deal was such a low payout...that the closings costs were almost 40% of of the lump sum.

I still think that there is a lot of gray area here for people to get taken advantage of. I have been turning them down for the last 1 1/2. I have not been impressed with what I have saw on the papers. Of course, people will argue about it...but I do not want to get called into question on any of these deals. JMO

Reply by Notarysigner on 6/25/10 3:47pm
Msg #342545

I feel the same. Glad there's someone else out there also who has some "different" views.

Reply by Hugh Nations Signing Agents of Austin on 6/25/10 5:47pm
Msg #342563

***I still think that there is a lot of gray area here for people to get taken advantage of...I do not want to get called into question on any of these deals.***

As a former reverse mortgage loan officer, who wrote the darned things, I take a bit of umbrage at the implication there may be something shady about them. There simply is no other financial instrument where a homeowner can use the value of their home to improve their current living circumstances, never make another house payment, and live in their home payment-free till they die -- and on the bank's nickel if they live long enough.

I think that's a pretty good deal, and I'm hard-pressed to understand why you would indicate there is something unsavory about them. What is it that you find so reprehensible that you refuse to accept such signings?

Reply by CF on 6/26/10 9:41am
Msg #342610

Hugh....I do not doubt that you are one of the good guys...

I am sure that the loans that you originated were to help people!! This is nothing personal against RM's or yourself

I was speaking of the ones that I notarized and even though I am not a LO....I can read what is in black and white...and IMO it was not a long term solution for a long term cash flow shortage. One package that I remember, specifically, was a women who had just lost her husband and only had about $600 per month to live on. She did a RM and got about $35K in a lump sum and paid about $12K (around 35% in costs?) in closing costs and that was the max amount that she could get. The family even questioned the appraisal and it seemed low to me too for the area. But again....what do I know- nothing- I am not an appraiser or a loan originator. It is real easy to keep telling yourself that. (not for me..but that is besides the point)

From what I have noticed is that the few that were a really good situation for the owners...were people that were pretty much financially secure and this was just "icing on the cake" for them. A gentlemen who had a pension of about $5K per month and who's children were professionals did a RM. His wife had passed and he and his girlfriend were both doing the transactions to use the money to travel and enjoy life. He was set....his family was set...they did not need the equity in the house...so why not do it was the thought process. He was going to get monthly payouts and it seemed that his appraisal and costs were more in proportion to the long term scenario. I closed the girlfriend a week later and they were as happy as could be. She was also financially set.

All I am saying is that the people that seemed to need it the most...were not going to have a long term gain or long term financial security out of doing it. I have saw it more than one time this way. For the women that took out the $35K...I can be certain that it was not a long term solution for her...and I wonder what she is doing now. This was about 3 years ago.

This is just my opinion...as stated previously I am not a LO and I have no idea what the approval process is and what is place to make people understand what they are really doing.

Reply by Linda_H/FL on 6/26/10 10:16am
Msg #342618

Re: Hugh....I do not doubt that you are one of the good guys...

" A gentlemen who had a pension of about $5K per month and who's children were professionals did a RM. His wife had passed and he and his girlfriend were both doing the transactions to use the money to travel and enjoy life. He was set....his family was set...they did not need the equity in the house...so why not do it was the thought process. He was going to get monthly payouts and it seemed that his appraisal and costs were more in proportion to the long term scenario. I closed the girlfriend a week later and they were as happy as could be. She was also financially set. "

See? This to me is the WRONG reason to take a RM and, in the long run, IMO is just plain stupid. At $5k/month plus in income, why not just pay off the existing mortgage (if any) at probably a far lower interest rate and just live mortgage free?? For that matter, if he and his family were "set" and they "didn't need it" - sell the property, bank the funds and live mortgage free. Did he not realize the encumbrance at the end in terms of the final payoff? Many people have the attitude of "I'll be dead" - yeah, well, you're still leaving that debt to SOMEONE...to me if you can go debt free, now or in the long term, why not..

I think it's a great tool for people who have low monthly income and are struggling to make ends meet...the relief of not having the burden of a monthly payment and the peace of mind it brings is immense. But to abuse it, such as I feel the first person did,.....ugh

I'm not a LO either, so maybe I misunderstand the whole thing - I'll report back when we get our first RM!!...LOL

Reply by Hugh Nations Signing Agents of Austin on 6/26/10 12:23pm
Msg #342630

I don't think it could have happened that way

***She did a RM and got about $35K in a lump sum and paid about $12K (around 35% in costs?) in closing costs and that was the max amount that she could get.***

Missing in your account is the value of the property, the balance on her existing loan, and the age of the borrower. All of those impact the amount a borrower receives; the younger the borrower, for example, the longer the lender normally has to wait before the loan is paid back. That aside, though, it is NEVER cheap to take out a loan where the lender can go almost 40 years without being paid off and without drawing down even interest during that period; and may actually confront going years in which the loan payoff is negative, and grows more negative every month.

Specifically, in the case you cited, RM appraisals are no different from other real estate appraisals. If the appraisal for that loan was low, it would have been similarly low for a sale or a refinance. That has nothing to do with a reverse mortgage. Secondly, RM fees are capped by the federal government. I know of no circumstance in which RM fees can reach 35 percent of a loan. Offhand, I would say you have failed to take into account the payoff on the existing loan.

She would have gotten more if she had just refinanced, that is true. But then, 30 days after the refinance, she would begin making house payments again. She would have gotten more if she had sold. But then she would not have had a place to live. The entire reason for the existence of reverse mortgages is so that seniors can have an expectation that they can live in their home till they die. Your objections to reverse mortgages might carry more weight if you could offer a viable alternative, and there are none.

As to them being of questionable nature, there is no other mortgage that is as closely supervised by the federal government as a reverse mortgage.

Reply by CF on 6/27/10 11:23am
Msg #342694

Perhaps I did not account if there was a balance on

the existing loan....I do remember the figures of the closing costs and lump sum payout. It stuck me as being off...so maybe the was an existing balance that needed to be accounted for.

Like I had said before - I am not a loan originator or an appraiser.

Reply by Frank/NC on 6/25/10 3:46pm
Msg #342544

I have met some of the nicest people doing RMs. Only encountered once or twice when a relative was there "overseeing" everything and thoroughly read everything as well as explained it to borrowers. Other than that they are good to do.

Reply by Yoli/CA on 6/25/10 5:55pm
Msg #342564

I've done about 10 - 12 or them and each one was a joy.

I've met some wonderful people who are willing to share their experience with me. Knowing this now, I allow additional time for an RM (and charge accordingly) and prepare myself for a bit of history. It's a wonderful travelogue through the eyes of those who lived it.

Reply by Shirley Koch on 6/25/10 7:02pm
Msg #342570

I think RMs are great. Personally I plan to use my own home as a retirement vehicle when the time comes. Sorry, but no one has struggled along with me to make the mortgage payments every month, so I don't plan on leaving it to anyone (I have one son).