NCOA Now One of Five Reverse Mortgage Counseling Intermediaries

Reblogger Charles Stallions
Real Estate Broker/Owner with Charles Stallions Real Estate Services

Original content by Larry Morris

WASHINGTON, April 8 /PRNewswire-USNewswire/ -- The National Council on Aging (NCOA) has officially been named by the U.S. Department of Housing and Urban Development (HUD) as one of five national counseling intermediaries for seniors interested in a reverse mortgage.

A reverse mortgage allows homeowners age 62 and older to convert a portion of their home equity into cash while they continue to live at home for as long as they want. Anyone considering a reverse mortgage must first receive counseling from an HUD-approved agency before they can apply for this type of loan.

"In this difficult economic climate, many older Americans are turning to their homes as a source of funds," said James P. Firman, NCOA president and CEO. "It is especially important that they and their families understand what a reverse mortgage entails as they consider this financial option."

NCOA offers telephonic counseling to clients nationwide through its Reverse Mortgage Counseling Services (RMCS) network. The network consists of exam-qualified counselors from nine senior service agencies, including Area Agencies on Aging and Aging and Disability Resource Centers, in eight states (CA, MT, MN, LA, IN, OH, MD, NV). RMCS counselors also offer face-to-face counseling in their local areas.

The toll-free number for the NCOA counseling network is 800-510-0301. Seniors can call this number to schedule a counseling session that will educate them about cost and features of a reverse mortgage. RMCS counselors also review the challenges of living at home, and help homeowners find benefits programs they may qualify for through NCOA's BenefitsCheckUp(R). The fee for counseling is $125. NCOA waives this fee for seniors who are facing financial challenges such as foreclosure, and for those with modest incomes (under $20,000 for single homeowners, and under $30,000 for couples).

"What makes NCOA's reverse mortgage counseling network unique is that our counselors have a deep understanding of the broad range of issues and options that older people face when they are considering whether this loan is the right choice for them. The new toll-free number and official HUD status expand NCOA's service in improving consumer knowledge about reverse mortgages, especially for those who are vulnerable and disadvantaged," Firman added.

In 2007, about 82 percent of the households headed by people age 65 to 74 were homeowners, as were almost 78 percent of those age 75 and older. The proportion of seniors with some type of home loan has grown to 32 percent in 2007.
For a current fact sheet on reverse mortgages, visit the news room at www.NCOA.org.

The National Council on Aging is a nonprofit service and advocacy organization headquartered in Washington, DC. NCOA is a national voice for older Americans -- especially those who are vulnerable and disadvantaged -- and the community organizations that serve them. It brings together nonprofit organizations, businesses and government to develop creative solutions that improve the lives of all older adults. NCOA works with thousands of organizations across the country to help seniors find jobs and benefits, improve their health, live independently and remain active in their communities. For more information, visit www.ncoa.org.

What is a Reverse Mortgage and how does it work?
A reverse mortgage allows homeowners age 62 and older to convert a portion of their home equity into cash while they continue to live at home for as long as they want.

Two types of reverse mortgage loans are available:
•    Home Equity Conversion Mortgage (HECM) - loans offered by the U.S. Department of Housing and Urban Development (HUD) that are insured by the FHA. HECM borrowers must receive counseling from an independent, HUD-approved counseling agency before taking out this loan.
•    Proprietary reverse mortgages - designed for seniors with high value homes.

Unlike conventional mortgages, there are no income or credit requirements. Borrowers do not need to make payments as long as they continue to live in the home, but as the homeowner, they are still responsible for paying property taxes, hazard insurance, and maintaining the home.
The money borrowers receive is tax-free, and can be used for any purpose. Borrowers can receive payments in various ways, such as fixed monthly payments or a lump sum.

Older Americans and Home Equity
•    In 2007, about 82 percent of the households headed by people age 65 to 74 were homeowners, as were almost 78 percent of those age 75 and older.
•    The proportion of seniors with some type of home loan has grown from 23 percent in 1999 to 32 percent in 2007. Most of these loans are conventional mortgages or home equity loans.
•    The annual number of reverse mortgage loans has risen from about 6,600 loans in 2000 to over 112,000 loans in fiscal year 2008.
•    Reverse mortgage borrowers represent about 1 percent of the mortgage market.

Recent Federal Legislative Changes
The Housing and Economic Recovery Act of 2008 includes several ways to make it safer and less costly for seniors to take out a reverse mortgage. Under the new law:
•    The amount a senior can borrow was increased to $625,500 nationally.
•    The origination fee is reduced to 2 percent of the first $200,000 borrowed and 1 percent for any amount after that. The minimum origination fee is $2,500 and cannot exceed $6,000.
•    Lenders cannot require borrowers to buy other financial products (such as annuities or insurance) as a condition for a reverse mortgage.

NCOA's Role
NCOA is working with policymakers and the aging community to make the reverse mortgage market work better for vulnerable seniors, and to help older homeowners understand their options and risks so they do not lose the home equity they have spent a lifetime to accumulate.

NCOA became a HUD HECM Counseling Intermediary in 2007, and created a counseling network -- Reverse Mortgage Counseling Services -- as a pilot project to encourage social services agencies to offer reverse mortgage counseling . NCOA was added to the national roster of reverse mortgage counseling intermediaries in 2009. We are now expanding this service to further improve consumer education for seniors.

NCOA is a member of the National Housing Counseling Association (NHCA). NHCA's mission is to improve the quality and transparency of reverse mortgage counseling.

If you have any questions, or need help with a Reverse Mortgage in the Portland, Oregon area, visit me at www.pdx-mortgage.com.

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