Reverse Mortgage & Longevity

The due date on a Reverse Mortgage is when you turn 150.  If you live too long, they send somebody by with a pillow, except they forgot with supercentenarian Jeanne Calment. Jeanne Calment was born in 1875 and died in 1997 at 122 years old.  She smoked for over a hundred years, and outlived her attorney who signed a deal to buy her apartment by paying her a monthly sum until her death.  Calment was 90 at the time and her attorney 47.  When he passed away thirty years later, his wife had to carry on making the payments, which amounted to more than double the apartment’s value. A Reverse Mortgage is not for everybody.  There are disadvantages that you and your family need to be aware of; however, there can be benefits too.  A Reverse Mortgage may help you to be better able to afford medicine, food, and basic expenses—depending on your situation, a Reverse Mortgage may help you live longer and more comfortably.  Seek competent financial counseling when considering a Reverse Mortgage.   Read More

Liquidable Language in the History of Home Loans

Before amortization, you would have an interest payment, then you would have a reoccurring balloon that went over like a lead balloon sinking finances and putting people out of their homes.  Then along came a formula that was level over the term of the loan, completely covered the principal and interest, and terminated at the end of the loan. Today, most Americans do not have a loan for more than three to five years.  It is weird to see someone pay off a 30-year loan.  Circumstances change, and a homeowner may sell or refinance. Before 1981, the word “securitize” was not a word.  It is not synonymous with “security,” though they sound very similar, like how “liquidable” drops a syllable from “liquidate-able.”  Securitize is not the same as security. Homeowners bought mortgages from banks, banks bundled the mortgages and sold them to Wall Street, where they got traded as securitized assets.  Then, when homeowners defaulted, that word “securitize” turned out to be a bad word in liquidable language.  Suddenly a whole bunch of houses showed up in the Financial District and you cannot trade houses the way you can trade stocks. The concept of a home loan amortized over 30 […] Read More

HARP Refrain

The view made it irresistible…the mortgage made it toxic.  Numbers hit home when income does not add up to the house payment, and the house payment is way more than the current property value. About 22.5 percent of American Dreamowners are sunk in negative equity, their mortgage balances exceeding the property values in the present market.  While many homeowners would benefit from a lower mortgage rate, closing expenses can be cost prohibitive to refinance.  The revised HARP (Home Affordable Refinance Program) is an instrument to address that problem and should be music to the ears of underwater homeowners. The old HARP was out of tune with its expectations, playing to 800,000 home loans instead of its anticipated audience of 4 to 5 million.  With revisions, HARP 2.0 is supposed to have an amplified effect. To qualify for HARP 2, your loan had to be sold to Fannie Mae or Freddie Mac before June 2009.  (To research your loan with Freddie or Fannie, go online to www.freddiemac.com/mymortgage or to www.fanniemae.com/loanlookup.) While the new HARP may be more harmonious with homeowner needs, banks can choose not to chime in.  Even if a homeowner meets all requirements for the new HARP program, the […] Read More