Helping Your Clients to Stay at Home Sept. 26, 2013

Transcription

1 Helping Your Clients to Stay at Home Sept. 26, 2013 Audio: , passcode

2 Agenda Senior Housing- National Overview Economic Security Home Equity planning Reverse Mortgage 101 HECM Counseling Benefit Programs/Falls Prevention Awareness Resources 2

3 Senior Housing- Nationally Americans aged 50+ represent 28% of all housing delinquencies and foreclosures 3 out of 5 seniors households of color spend more than 30% of their income on housing costs Seniors face choices- Downsizing/Selling Renting Assisted living/nursing homes Aging in Place 3

4 Senior Housing- Nationally What resources are available? HUD s website: ormation_for_senior_citizens Includes information on how to find a Foreclosure Counselor How to avoid scams How to find an affordable apartment How to identify housing discrimination Information on Section 202 4

5 Economic Security: Home Equity Many older adults are house rich but cash poor. They own their homes, but don t have enough income to make ends meet. We help seniors explore how to use their home equity wisely. Home Equity Advisor: Reverse Mortgage Counseling

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7 Reverse Mortgage 101 A reverse mortgage is a loan against home equity providing cash advances to a borrower, and requiring no repayment until a future time. How is a reverse mortgage different from other means of accessing home equity? No income requirements (until Jan. 2014) You do not need to make monthly repayments 7

8 Reverse Mortgage 101 The primary features of a Reverse Mortgage are: Borrower can access cash from their own home equity The cash can be accessed in a variety of forms, known as payment plans It is a non-recourse loan The borrower retains the title of the home Must keep the home in good repair, and pay property taxes and insurance The amount of the loan advances generally depends on the value of the home, the age of the borrower, and the cost of the loan (that is, the loan fees and interest rate). 8

9 Reverse Mortgage 101 The Home Equity Conversion Mortgage (HECM) is the Reverse Mortgage that dominates the market. A HECM is the FHA insured product and to be eligible you must: Be 62 or older Occupy the home as your primary residence Own your home- existing mortgage must be paid off before or at closing Live in an eligible property *More eligibility rules to come 9

10 Reverse Mortgage 101 In order to obtain a HECM (Home Equity Conversion Mortgage) the borrower MUST complete a counseling session NCOA is an approved HECM counseling provider 10

11 Reverse Mortgage 101 What does a HECM counselor do? Unbiased, third party education What is covered in a HECM counseling session? Basics, costs, fees, alternatives, benefits, payment plans, and much more. What tools to counselors use? Benefits CheckUp, the Financial Interview Tool, Loan Calculation Software What qualifications do HECM counselors hold? Exam, training, apply for HUD approval, under counseling agency supervision What consumer protections are in place? Counseling itself, withholding the certificate, comprehension questions, anti-steering 11

12 Reverse Mortgage 101 How can borrowers receive their cash advances? Single Disbursement Lump Sum *New as of Oct. 1, 2013 Term Tenure Line of Credit Combination of these 12

13 Reverse Mortgage 101 What tools do counselors use? 13

14 Reverse Mortgage 101 Example of a topic in FIT: FALLS Why? What barriers do falls create for reverse mortgage borrowers? Limitations in activity, loss of independence, institutionalization Long-term effects of injuries Disability Dependence on others Lost time from work and household duties/responsibilities Reduced or lost productivity Reduced quality of life Death Falls also adversely affect families, employers and whole communities 14

15 Reverse Mortgage 101 Over 60% of reported falls occur in the home Use a safety checklist to look for the home fall risks in A primary care provider can provide a referral to get a professional home safety evaluation Once hazards are identified, make changes for safety 15

16 Reverse Mortgage 101 A variety of higher cost strategies might be considered with the reverse mortgage funding: No-step entry ways Non-slip flooring installed Easy-to-reach light switches, especially from a doorway Light switches/lighting installed at the top/bottom of stairs Lever door and faucet handles to replace knobs that may be hard for arthritic hands Lower counter tops and knee room under sinks Contrasting edge on counter top 16

17 Reverse Mortgage 101 What tools do counselors use? What tools do counselors use? 17

18 Weatherization Assistance Program Dept. of Energy funds states, territories, and tribes to provide grants that enable low-income families to permanently reduce their energy bills by making their homes more energy efficient People with SSI are automatically eligible More information: 18

19 Low Income Home Energy Assistance Program (LIHEAP) Block grant to states and territories from the U.S. Administration for Children and Families (HHS) Most funds expended in winter Community agencies administer grant locally Helps with home heating and cooling costs 19

20 Home Equity With the right consumer protections, robust counseling, and access to benefits and discussions of alternatives, a timely draw down on home equity can play a role in economic security, however: Reverse Mortgages are NOT for everyone 20

21 Reverse Mortgage Counseling Should a client wish to learn about Reverse Mortgages, please do encourage them to seek counseling! NCOA RMCS Network 21

22 Want to know more? NCOA just released a Q & A on reverse mortgages- please feel free to share! 22

23 Additional Resources CFPB s Office on Older Americans has a lot of advice for older adults to avoid financial exploitation, including re: housing Can order bulk publications (for consumers) at: Topics include: Avoiding foreclosure Considering a reverse mortgage Avoiding mortgage scams 23

24 Additional Resources 24

25 Amy Ford Director, Reverse Mortgage Counseling Services Network NCOA