Reverse Mortgages Get Cheaper

I am not a big fan of reverse mortgage unless the homeowner needs the money.  Genworth has gotten rid of their monthly servicing charge which can save the borrowers thousands of dollars.  Make sure you consult an honest and knowledgeable Mortgage Professional. 

“Genworth Financial Inc., Bank of America Corp., Wells Fargo & Co., OneWest Bank’s Financial Freedom unit and other lenders also have dropped or reduced their origination or servicing fees, or both.

Why are lenders cutting costs now? To drum up business. From Oct. 1, 2009, to March 31, 2010, home-equity-conversion mortgage volume fell 22% from the same period a year earlier. One reason: In response to falling home values, the Department of Housing and Urban Development last October cut the amount of equity that reverse-mortgage borrowers could extract by 10%.”

http://online.wsj.com/article/SB20001424052702304628704575186211956006190.html?mod=djemITP_h

An Alternative To A Reverse Mortgage

Reverse mortgages can be expensive so some are giving their parents a private reverse mortgage.  It sounds like it could be a good idea if you have the cash to do it. 

It’s pretty interesting article that talks about the pros and cons of doing it.  Always make sure to consult your CPA and Financial Planner before doing it. 

“When Wayne Tew, a credit-union president in Las Vegas, realized that his parents needed money, he bought their house and leased it back to them, freeing up their cash for a new car and travel. The son claimed tax deductions for the home’s depreciation. And after his mother died four years ago, he sold it for a small profit.”

http://online.wsj.com/article/SB10001424052748704194504575031532356220378.html?mod=rss_Money  

Mortgage Fraud

Although this article talks about the fraud with reverse mortgages this can and does happen with normal refinance.

“Last month, the owner of the Orlando, Fla., title company that handled his loan admitted to stealing more than $1 million from several reverse-mortgage holders, including Mr. Ford. Bank of America Home Loans, a unit of Bank of America Corp., says the title agent never sent it the money required to pay off Mr. Ford’s mortgage. As a result, Mr. Ford says, the bank recently threatened to foreclose on his seven-acre ranch in Archer, Fla.”

http://online.wsj.com/article/SB10001424052970204044204574362641338197748.html#mod=todays_us_personal_journal 

Mortgage Fraud Is Increasing

Yep that’s right.  There is more going on today and that is why you have to be careful about you deal with.

“The number of mortgage-fraud cases the FBI is investigating is on the rise as scammers prey on unsuspecting homeowners behind on their mortgage payments and nearing foreclosure.

“Considering that there could be more than 3 million foreclosures starts in 2009, it is safe to assume that frauds and scams will affect a large number of American homeowners,” said Travis Hamel Olsen, president of the National Short Sale Center, in a news release this week. The firm facilitates short sales on behalf of homeowners and real estate agents.”

http://www.marketwatch.com/story/mortgage-fraud-cases-nearly-double-in-2-years?siteid=rss

Demand For Reverse Mortgages Rises

Below is a great article about the demand for reverse mortgages is increasing.  A reverse mortgage can be very expensive but if someone age 62 or older needs money, it is a great way to access the equity and not make payments. 

http://online.wsj.com/article/SB123264214889606533.html