Before the dramatic change in my life during the past year, we frequently enjoyed trips to Disney with our granddaughter.

Every year is a year of change, but some more so than others. Last year was a huge change for me. On a personal note, my ability to care for my husband at home changed. My husbands medical problems became unmanageable from home and it became clear that it was time for him to move to a nursing facility. This was a heartbreaking decision and one that I did not come by easily. I fought with doctors, replaced primary care physicians and changed nursing facilities, all with the intent of bringing him back home. But eventually change has to be faced. What you think you can prevent or overcome has to be accepted.

In his book, Life 101, Peter McWilliams said, “Acceptance is not a state of passivity or inaction. I am not saying you can’t change the world, right wrongs, or replace evil with good. Acceptance is, in fact, the first step to successful action. If you don’t fully accept a situation precisely the way it is, you will have difficulty changing it. Moreover, if you don’t fully accept the situation, you will never really know if the situation should be changed.” Eventually I had to accept that our lives together would be forever changed. I was moving from the role of wife and mate to healthcare surrogate, advisor, advocate and caregiver. Some things did not change: my love for my husband, the joy he has given me and my desire to be with him. But acceptance truly is the first step to successful action and after much avoidance of what had to happen, I did take that first step even though I felt like I was walking off a cliff.

As a Reverse Mortgage Specialist in Florida, I have encountered many seniors that cannot accept change. Yet often seniors experience more changes in their lives than any other segment of the population. As in my case, their spouses health changes, or in other instances they may experience a change in their own health. Family members may need to rely on them more, a spouse may pass away and a portion of income is lost (often a large portion), additional home assistance may be needed, mortgages become more difficult to pay, cost of living increases, home maintenance may be needed, 401K funds and investments lose value, medical expenses increase, funds for transportation may be required, the list is endless. And just like I experienced, it is difficult to accept. Often we feel loss of control and fight the inevitable, I know I did.

Eventually, as in the words of Maya Angelou, “The need for change bulldozed a road down the center of my mind”, I moved my husband to a facility that is better equipped to handle his daily medical needs and started taking small steps of acceptance. Often my reverse mortgage clients are just like me, they make small steps toward reaching a necessary decision. It’s almost funny how often I hear, “I wish I had done a reverse mortgage sooner” or “why are all my friends so negative about reverse mortgages?” The answer is change, no one likes it, yet change is more often a good thing. A Pinellas county reverse mortgage client saved her home from foreclosure, a St. Petersburg client no longer has to fast to make her mortgage payments, a Clearwater client replaced her car with reverse mortgage funds and a Tampa resident replaced his broken air conditioner. In every case there was change, positive change and life altering changing. While most people would say “but these were desperate people that had nothing else”, this government insured program is not the loan of last resort, as some may think. It has been the means to pay cash for a second home eliminating mortgage payments, the funds for a retirement fishing boat and money for a grandchild’s college education, all additional circumstances which resulted in positive changes.

With change as the constant, it is a matter of how you are going to handle the change. Are you going to follow my first reaction and try to stop it? Hide from reality? Deny it’s existence? Or will you exuberantly embrace it? For most of my clients change came first with an open mind, the willingness to learn the pros and cons of a reverse mortgage and the insight to realize the possibilities . . . the change of life that a reverse mortgage could provide. Maybe Oprah said it better than anyone, “If you want your life to be more rewarding, you have to change the way you think.” Oprah probably wasn’t talking about reverse mortgages, but I think the philosophy certainly can be applied. I’m not saying that you should run out and apply for a reverse mortgage today. I only ask that you are open to changing the way you think about reverse mortgages, about long term care, about retirement, about the future and discovering what rewards that may bring. Change truly is the constant, it’s just around the corner, are you ready?

I had hoped that alarm clocks would be ringing loud enough for every senior in a condominium to wake up and smell the coffee, but it seems that this has been a well kept secret and very few realize what this means to potential borrowing which includes Reverse Mortgages.

Time to know your options.

When the clock stops on February 1st, all condominium complexes will lose existing FHA approval.  New applications for FHA approval must be submitted.  Until new approvals are granted by the Federal Housing Administration, no new FHA loans will be available for condo purchases, FHA condo mortgages, including condo Reverse Mortgages. Even those projects that had been pre-approved previously will now have to be re-approved before the reverse mortgage will be issued.

Prior to this a condo owner could apply for approval and the lender involved would be required to use what is called a “FHA Spot Condo Affidavit.” This one-page document would be used when the condo had not been previously approved by the FHA. February 1^st the slate will be wiped clean, all projects which had already been on the approval list will go back to square one. Each project will have to acquire new approval through one of two processes:

1. HUD Review and Approval Process (HRAP) – This is now the standard process to receive approval for condominium projects.

2. Direct Endorsement Lender Review and Approval Process (DELRAP) – This form of approval is only given to those lenders who are already approved by HUD to give approval for condominium projects.

As we all know, the wheels of government do not move quickly and this process will be no exception. One rule is that no more than 15% of the owners can be more than 30 days in arrears. In today’s economy this could eliminate many condo complexes and create hardship for many seniors seeking a reverse mortgage. We all know seniors have been especially hard hit, maintenance fees have risen but seniors did not get an increase in their social security this year. Seniors are living on a fixed income with “un” fixed and rising costs. The need and desire for reverse mortgages is greater than ever.

Other rules include 50% of the units in a condo project must be owner occupied. Florida projects can have a high ratio of non-homesteaded units, again creating additional difficulty in achieving approval. However, bank owned and vacant units previously were counted in this ratio and under the new guidelines will no longer be calculated, which will be a plus to the new process. Also, the allowance for the number of units that can be financed with FHA loans will be increased from 30% to 50%, another plus.

Once a condominium project is approved by FHA, it will still need to be re-approved every two years. This enables FHA to ensure that the buildings are kept up and continue to meet their standards. The only exception will be for new buildings, which are approved for 10 years.

If you have been on my mailing list, you already knew this was coming. You have heard the clock ticking and probably were among the several condo owners that choose to complete the process prior to the new rules. Of course there is always a chance that the clock will again be re-set. Whatever happens, condominium owners have no guarantee that their home will meet the requirements set forth by HUD.

Golda Meir said, “I must govern the clock, not be governed by it.” You may be planning to retire better with a reverse mortgage. In which case, you need confirmation that your home will qualify. Tick, tick, tick, call me and know what your options will be.

I think if we give you a heart transplant it will solve your corn problem.

Does the title sound like a silly question? I don’t think anyone would answer “yes” to the titles question. But what do a podiatrist and a heart surgeon have to do with reverse mortgages? Is this like some silly riddle? No, the answer is, “absolutely nothing”, unless of course they are eligible and wish to apply. But it is the question that is my point.

Recently, I have read numerous articles about reverse mortgages in our local paper, none of them written by a licensed originator and none of them accurate. Do you see where I am going with the question? But the shame of the matter is that the source giving the information is presented as knowledgeable. Whether stated or implied by his designation, the average consumer would expect the source to be qualified because their advice has been put into print in a publication. And the truth of the matter is that what consumers read in the newspaper, they tend to believe, they look to their newspaper as a credible source of information. The St. Petersburg Times is no exception, if you subscribe, you probably accept what is published as “the truth”.Yet this can be far from it and you won’t read retractions on the front page, if they are even printed at all.

Earlier this month, the St. Petersburg Times ran a column by Scott Burns, a Chief Investment Strategist for Asset Builder out of Dallas, Texas. I know this because I looked him up online. In all of the information I was able to find on Mr. Burns, I saw no mention of his knowledge on Reverse Mortgages. However, he willingly made statements and gave advice on the product to a couple who currently have a mortgage and wanted to know if a reverse mortgage would be a viable solution to their cash shortage. Rather than admitting a lack of knowledge on the product or consulting with a licensed reverse mortgage expert, Mr. Scott choose to answer the question with erroneous information. Anyone who read the article and assumed that Mr. Scott was qualified to provide this information not only will have misconceptions, they may pass along what they read and create a snowball effect of more inaccuracies.

From the beginning with Mr. Burns statement regarding why people get a reverse mortgage to the final coup de grâce surmising current mortgages, the article was riddled with misinformation. Mr. Burns advised, “For you, a reverse mortgage would not be enough to pay off your existing mortgage, but it would provide a monthly payment almost large enough to cover your mortgage payment.” First of all, as a licensed Reverse Mortgage expert, I ran the scenario based on the information provided in the clients question. It was no surprise that the numbers would work well for the couple in question, thus eliminating their current mortgage. But the statement was also misleading by implying that the recipients could use the proceeds of the reverse mortgage to help them cover their current monthly mortgage payment. First and foremost, the current mortgage would be paid off with the proceeds and thus eliminated, hence there would never be a monthly payment.

After contemplating the damage done by such articles and the current needs of many seniors that I encounter, I thought it would be best to set the record straight with the editor of the section which printed this column. I made a well intended call and voiced my concerns as well as the correct information. Although I attempted to pass this along in a warm and friendly manner, I was met with a brick wall. Hence I gather the St. Petersburg Times is not interested in printing retractions that would provide seniors and other readers with correct facts.

So, back to my question, “Would you go to a Podiatrist for a heart transplant?” Of course not, nor should you ask for advice in regards to a reverse mortgage from a novice or an unlicensed and inexperienced non-professional. Should you consult with a financial advisor you know and trust? Yes, it is always encouraged, but get the details and facts from a licensed Reverse Mortgage Broker and expert like myself. Be properly informed and retire better. I am always more than happy to receive your calls and set the record straight.

My teenage passion

As a teenager I was involved in a 4-H horse club. My horse was my passion and I spent every moment I could steal with my horse. My friends and I performed in local 4-H horse shows and every summer anxiously anticipated spending a week at the Upper Peninsula State Fair. There we would bunk with 4-H kids from all over the U.P., we would groom and care for our horses daily and participate in various exhibitions. It was the highlight of my summers. Then sometime in my junior year, our club leaders gave us devastating news, the horse clubs were going to be eliminated from the fair to make room for more dairy cattle. No horses? How could this be? What could we do to stop this? My leaders response was, “you could write your Congressman.”

I still am not sure if my leader was serious when the remark was made but I took it very seriously. I went home from my 4-H meeting and did just that. I made my best argument for keeping the horse program and then sent my concerns off to my Michigan legislatures. Weeks passed, then one day, as I sat in algebra dreaming of anything but the figures on the blackboard, the high school secretary’s voice came over the intercom. I was being summoned to the principals office. Now let me clarify, this was not a regular occurrence. On the contrary, I had never been inside his office, so I was quite shook up by the order.

When I got to the principals office someone else was there as well, dressed in a suit and tie, there stood my Congressman. My Congressman! He had come to my high school to discuss the letter I had written. I then realized the power of every citizen and our individual ability to influence our government. I still believe in that power.

I want to encourage you, as a reader of this blog, to use your power to influence your US Congressmen. The House of Representatives passed HR 3288 late last week by a vote of 255-168. This bill includes three provisions for reverse mortgages. One of these provisions will lower the proceeds that seniors receive from the program. The reverse mortgage program has helped innumerable seniors stay in their home and live a more comfortable retirement. This program is in jeopardy. I urge you to contact your Congressman and urge him not to change the program. Let him or her know that you care about our seniors and their well being. Let Congress know that seniors cannot afford to be stripped of any more benefits. A reverse mortgage is a powerful financial tool that can make positive changes in the lives of seniors. It can enable seniors to age in place when they lack liquid assets to cover daily expenses. Congress is still contemplating huge reductions in medicare and medicaid. This is just one more lifeline that could be taken away. Please let your Congressman know that you support the reverse mortgage program and don’t want the benefits reduced. Don’t our seniors deserve better?

Write a letter or make a call to your Congressmen. You never know, maybe he or she will reach back out to you. Don’t be surprised, it can happen, I know, it happened to me!

P.S. The horse program was not eliminated at the Upper Peninsula State Fair, so you see, sometimes our government does work.

Katherine and Henry had a 30 year mortgage that was 10 years old. The original mortgage was for $31,000, after 10 years of payments they still owed over $27,000 to Bank of America. Every month they struggled to make the payment, by the end of the month Katherine was fasting from morning to night because there was not enough money left to buy groceries. Katherine is diabetic, fasting is detrimental to her health and can lead to devastating circumstances. She stated she wanted to give the home to her daughter, who already had her own home and who was not aware that her mother was sacrificing her health to stay current on her mortgage. She didn’t know her mother’s refrigerator was empty at the end of the month. I calculated an amortization schedule for their Bank of America mortgage, computing the interest that was paid monthly on their conventional loan. Each month approximately $180 of the couples social security money was going just to the interest on the loan. That $180 would have bought plenty of groceries to end Katherine’s fasting. Had they kept the loan for 30 years, the cost would have been over $50,000 in interest.

Many factors need to be considered when entering into a reverse mortgage. But the most important question I ask my client is, “Do you think this could give you peace of mind?” Isn’t that what we all want? The reasons for a reverse mortgage continue to vary from client to client. But consistantly my clients tell me that not only did the mortgage relieve them of financial burdens, it also gave them “peace of mind.” That to me, is priceless. Maybe the next time I close a reverse mortgage and relieve someone of a mortgage payment I’ll pick up some marshmallows, graham crackers and Hershey bars. We’ll have a mortgage burning party and make s’mores. Doesn’t that sound like fun?

My Grandparents Celebrating 60 years

When you are working with seniors on a daily basis you hear a lot of stories. Personal stories about their lives and stories about how they lost the money they had planned for retirement. Some stories are about the stock market, some are about unexpected costs, raising grandchildren and even giving Ron Pearlman $200,000 in his Ponzi scheme. Yes, I have a client who was one of his victims.

All of these stories make me think about my own grandparents. They were married a total of 62 years and during most of my life they were very financially stable. They both passed away before the government insured the HECM program, and I am not going to profess that they would have done a reverse mortgage. But they were taken for a large amount of money in a scheme that is equally as fraudulent as a Ponzi scheme. They are an example of how it can happen to anyone, at any time. Even to your own loved ones.

I call this plot the “Substitute Parent” Scheme. This one works extremely well with seniors who are trusting and generous and is perpetrated by sales people who profess that the senior target is “like a parent” to them. I recall this line well. I was in my grandparents kitchen, helping with the dishes when I heard Bill, the salesman, tell my grandfather how deeply he respected him and that he was “like a dad”. Red flags should have gone up and alarms should have rung. But being the perfect salesman, Bill was able to close the deal and took my grandparents for over a quarter of a million of their retirement dollars. To each of their last breaths, I believe they were both stunned as well as hurt. Trust was never an option with them, it was in their souls. They always trusted, they were always generous. They were the perfect mark.

My personal family experience gives me a greater respect for the word, trust. I never want to abuse that trust or take it for granted. My clients aren’t like a parent to me. They are my client, I am their advisor. A reverse mortgage isn’t for everyone, that’s why everyone doesn’t have one. But once a senior receives the funds of a reverse mortgage, they need to be even more diligent in watching their money and in watching out for those people who now profess that they are their new family. People who want to part them from their money. Myadvice in that regard, if you are looking to add to your family, go to an animal shelter and adopt a pet. The reward will be far greater and the adoration will be sincere and endless.

My grandfather had a dog, Timmy, he was devoted to my grandpa. I think if Timmy had ever met Bill, he would have bit him. Dogs have great instinct when it comes to people, Timmy would have known!

Recently I met Monica. When I went to her home, this very astute and young senior was just coming to face reality. The mortgage broker she had contacted when she first explored doing a reverse mortgage, convinced her to do an interest only mortgage. He promised her she would be put into a reverse the following year. This was despite the fact that the mortgage he originated had a three year prepayment penalty and by the time the three years were up she would not have enough equity to qualify. As it turns out, she already is in that situation. She never understood what her payments would escalate to and I had to break the bad news. When I got done reviewing her documents she stepped outside for a cigarette. I found her in her yard, crying…she didn’t want the granddaughter she was raising, to see her upset. This is the tough part of my job. I am now working with Monica and a firm that has been quite successful in negotiating with lenders to take short pay for the debt that is owed. I am saying a prayer that they will be able to convince her current lender to accept the funds of a reverse mortgage for the debt. The funds will be short of what she owes but this would keep her in the home she loves and enable her to continue to give her granddaughter a stable environment. This this would be a short pay reverse mortgage, not a short sale.

I will update you on Monica’s status from time to time. Wish me luck and say a prayer, she deserves a break. And as for the slimey snake that put her in this situation, he should lose his license and catch the swine flu! Nobody deserves it more!

• 94% stated the reverse mortgage had given them peace of mind
• 89% said it helped them have a more comfortable lifestyle
• 87% responded it improved their quality of life
• 79% gave it credit for helping them remain at home

The respondents to the national survey are similar to the clients I meet daily. My clients share their stories so I can realize the positive impact it makes in their life.

One of the couples I met were Alice and Jim who had been living in a house in Pinellas Park, their home had no mortgage and they had no debt. In January of 2006, they decided to sell their home and move into a senior condominium community. They purchased the condo with cash and immediately moved in, anticipating a quick sale of their house. In February they had a contract on their house, three days before the closing, the buyer died. They had no other offers. They found themselves strapped with property taxes on the house and the condo, maintenance fees on both and rising insurance costs.

Alice and Jim used their credit cards to pay their mounting bills, anticipating that the house would sell and they could pay off the cards. The value of the home fell, they still owned both properties. They continuously lowered the price of the house but finally accepted an offer to rent.

Alice and Jim had no means of paying off the credit card debt. Each month they had a cash shortage. The Realtor who listed their house recommended refinancing the house and/or condo, she referred them me. After a full analysis of their situation, it was obvious that a Reverse Mortgage was their best option. The reverse mortgage gave them all the money they needed to pay off their debts and an equity account for ongoing expenses. The real estate market is no  longer getting them down. Alice and Jim both told me they now have peace of mind. Even though they did not officially participate in the national survey, they validate what the results of that survey showed. I don’t know of any other financial product that has as many satisfied participants. That’s what I like most about my job.