Reverse

The February 2011 Issue

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Feature: HMBS as "Holy Grail" of Fixed-Income Securities

Before the mortgage-sparked national and global financial tsunami of 2008 which swept it and others into the rubbish of financial history, Lehman Brothers’ prowess in mortgage securitization (and all things mortgages) was the envy of Wall Street. For reverse mortgages, in the days when Fannie Mae was the sole buyer of whole HECM loans in the secondary market, Lehman supplied capital to launch the proprietary jumbo reverse mortgage market. It did not stop there. It dug deeper into reverse country with a number of strategic moves: the acquisition and consolidation of portfolio companies, such as Financial Freedom, Unity Mortgage, and
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Originating: The Rose Bowl's Uncanny Resemblance to the Reverse Mortgage Industry

Radio advertising for reverse mortgages is similar to ordering a mango smoothie at Denny’s off Alameda Street in downtown Los Angeles. Both sound so good when ordering but the final result placed in front of you will destroy your appetite and leave your mouth dry. For those that have made the mistake, I apologize for not getting the info to you sooner. For those I have saved, top shelf is appreciated. Today I am Rose Bowl-bound and this is my adventure to the Granddaddy of them all. I am on my way to Union Station to ride a train to
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Originating: I Want to Work with Fewer Referral Sources... Really!

The title of this piece might sound crazy, but follow me for a minute and see if you agree with me in the end. For a long time, I was the networking queen. I went to every senior-oriented industry event, and even some that were not senior-focused. I wanted to meet anyone and everyone that could possibly send me a reverse mortgage referral. I was going to keep in touch with them by phone and newsletter and whatever other method I could, because I was going to be darn sure I was the one who got these referrals. One day
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Marketing: The Poor-Taste Police

Some marketing ideas sound pretty good in theory. But in practice, they do not always come across the way the creator intended. Many reverse mortgage marketing pieces also probably sound good in concept, but there are regular examples of “good intentions gone bad.” Unfortunately, these attempts at promoting reverse mortgages ultimately damage the image of our industry and are counterproductive to our efforts to educate the public about this wonderful retirement planning tool. Some time ago I was browsing through my daily Google Alerts, a ritual where I read the various articles published that day mentioning reverse mortgages. I remember
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Originating: Reverse Lenders Have Reasons for Optimism, But Must Change as Their Customers Do

The reverse mortgage industry faced some serious and significant challenges in 2010, probably led by the continued decline in home prices, which meant many senior borrowers weren’t able to extract as much equity out of their homes as they previously thought – or any at all. The foreclosure epidemic continued to grow and spread. Many reverse mortgage borrowers defaulted on their loans because they couldn’t or didn’t make necessary tax and insurance (T&I) payments or required repairs on their properties. At the same time, the FHA raised its annual insurance premium on reverse mortgages to 1.25 percent, up from 0.5
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Last Word:The HECM Turned 21 Last Year! (Did I Miss the Party?)

When I turned 21 (a long time ago!) I partied until the wee hours of the morning. I was not one to pass up the opportunity to enjoy a few “adult beverages” in the company of other adults, and besides, 21 was the passage into adulthood and maturity. I thought I had grown up. The years prior to 21 were arrogant, smarter-than-my-parents days. I was self-centered and hated any kind of supervision or controls. These were halcyon days of “the good life.” I was at college and I could do anything I wanted, whenever I wanted. This newfound freedom led to
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Underwriting: Reform Brings Consequences for Originators

I was somewhat taken aback by a comment made by a mortgage professional during a recent holiday gathering. In essence, they said, "Besides, now that we are all TPOs, it is all the lenders’ responsibility and problem – they will tell us what to do, we just originate and process …” My reaction was a nervous thought: How many other mortgage professionals feel similarly? Have we gotten to a point where our ability to participate and perform in an industry has been so conflicted by change that – somewhat in desperation – the production force has embraced a mindless approach
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Older Workers Reach Record High

According to a report from the Employee Benefit Research Institute, the proportion of individuals who continue to work after age 55 has reached a record high.  Data from the U.S. Census Bureau indicates that the percentage of workers aged 55 or older has increased from a low in 1993 of 29.4 percent to 40.2 percent in 2010.   Older women who continue to work has seen a steady increase since 1993.  Staying in the 22 to 23 percent range from 1975 to 1993, increasing to 35.1 in 2010 For men, the percentage fell from a high of 49.3. percent
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WSJ: Boomers 401K Accounts Fall Short

According to a report in the Wall Street Journal, the typical household headed by a person aged 60-62 with a 401(k) account has less than one-quarter of the amount necessary to maintain their standard of living in retirement.  The analysis conducted by the Center for Retirement Research at Boston College utilized data compiled by the Federal Reserve. Using estimates of 401(k) balances from the end of 2010, the report reviewed the income those amounts would provide in retirement as compared to estimated income needs in retirement.  As a benchmark, the report used an assumption that retirees would need 85%
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