Reverse Mortgage May Affect Your Eligibilty for Federal Assistance

While reverse mortgages have been a gift for many seniors, the increase in income can adversely affect some the eligibility for many seniors looking to qualify for government assistance.  This only make sense right?  If your eligibility for Medicare was high with modest income, it should inversely shrink with the rise in income from a reverse mortgage.

For example, reverse mortgages may have tax consequences, affect eligibility for assistance under federal and state programs, and have an impact on the estate and heirs of the homeowner.

Getting additional income for daily living out of the home that’s paid for may sound great, but it’s important to understand what you are doing and how it affects your financial situation. If you consider reverse mortgage an option to explore, seek help for an unbiased opinion of the consequences both the pros and the cons. There are trained Home Equity Conversion Mortgage counselors (HECM) available to help. Throughout the country, many of them work for community action agencies.

Always consult a financial planner, tax consultant or personal attorney before considering a reverse mortage.  The $500 or so fee a professional may charge could save you hundreds of thousands down the road.  And if you can not afford to pay for a professional, consider consulting local community assitance programs funded by the governemnt or non profit industries.

California Reverse Mortgage Information

The California Reverse Mortgage climate is continuing to grow strong.  After a record numbers and as credit becomes easier to obtain expect many more reverse mortgages to be completed this year.  With Los Angeles and Orange County leading the way rest assured that the impact of the economy has helped to erode much of the equity that was created during the boom years.

One fact that is easy to forget is that unlike much of the population seniors happen to have been fortunate enough to have owned their home outright before California real estate prices began to grow.

Federal Office
Location
HECM
Loans
Sep-2001
to
Feb-2009
FRESNO 7,866
LOS ANGELES 22,150
SACRAMENTO 12,706
SAN DIEGO 6,928
SAN FRANCISCO 11,932
SANTA ANA 19,835

While the Housing of Urban Development has yet to release complete totals for 2008, the numbers below show that demand is still high with strong numbers for 2009.

Calendar
Year
HECM
Loans
Sep-2001
to
Feb-2009
2001 452
2002 2,390
2003 4,272
2004 11,569
2005 14,719
2006 23,955
2007 18,599
2008 5,461

The California Reverse Mortgage is dominated by Wells Fargo Reverse Mortgage loan officers.  With competitive rates and aggressive agents combined with falling fees on reverse mortgages, Wells Fargo has found a good niche in the mortgage market.

Top California HECM Lenders HECM
Loans
Sep-2001
to
Feb-2009
WELLS FARGO BANK NA 19,569
FINANCIAL FREEDOM SENIOR FUNDI 6,575
SEATTLE MORTGAGE COMPANY 4,965
LIBERTY REVERSE MORTGAGE INC 4,850
WELLS FARGO HOME MORTGAGE INC 3,747
HOME CENTER MORTGAGE 1,951
SENIOR FUNDING ASSOCIATES 1,660
REVERSE MORTGAGES OF CA IN 1,459
PACIFIC REVERSE MORTGAGE INC 1,456
CALIFORNIA REVERSE MORTGAGE CO 1,426
NEW HORIZONS REVERSE MORTGAGE 1,417
LIBERTYSTREET FINANCIAL GROUP 1,194

When Your 401(K) Loses 35%

401 k value loss
401 k value loss

The easiest answer of course, is to fire your financial or retirement planner.  But what to do when you are your financial planner or even worse you can’t get a hold of your planner? It starts with you not being afraid to talk to your account custodian.  While almost everyone, including families, was affected by the recent drop in the market, nearly 40% as of this post for the year, things can get a lot worse before they get better.  I am not financial expert, nor should you take my advice, but what you can take away is that when your money is at stake, there is no such thing as a bad question.  CNN Money expert, Walter Updegrave, recommends,

Ask for more transparency

Whatever the particulars of your situation, this much is clear: You are upset about the performance of your account and you aren’t getting enough feedback from your adviser to know whether the path he wants you to stay on is the right one.

Here’s what I recommend. Go back to your adviser and explain that you need to know what course it is exactly that you are on and why you should stick to it. I’d ask to see how my portfolio is divvied up between Continue reading When Your 401(K) Loses 35%