This Week's Reverse Mortgage Rates: December 29, 2009

This week's reverse mortgage rates are below. The rates will be effective from December 29, 2009 to January 4, 2010.

APR:
HECM LIBOR 225: 2.481
HECM LIBOR 250: 2.731
HECM LIBOR 275: 2.981

Expected Rates:
HECM LIBOR 225: 6.12
HECM LIBOR 250: 6.37
HECM LIBOR 275: 6.62

Despite the APR remaining nearly unchanged this week, expected rates rose significantly, up more than a point since last week. Hopefully rates will drop back down in 2010.

Happy New Year everyone!

This Week's Reverse Mortgage Rates: December 23, 2009

One of my favorite parts of my old blog was reporting on the weekly reverse mortgage rates. While I have been on a hiatus for the past six weeks, I am delighted to be able to report on the week's reverse mortgage rates again. And while the APR appears to have dropped one point on the LIBOR from six weeks ago, the expected rates are higher now than they were then. Without further ado:

APR:
HECM LIBOR 225: 2.482
HECM LIBOR 250: 2.732
HECM LIBOR 275: 2.982

Expected Rates:
HECM LIBOR 225: 5.94
HECM LIBOR 250: 6.19
HECM LIBOR 275: 6.44

Due to the snow and the holiday season, these rates are from December 23, 2009 to December 29, 2009.

Mortgage Market Troubles Grew in the Third Quarter

The troubles in the US housing market are far from over. Data released by the Office of Thrift Supervision and the Office of the Comptroller of the Currency found that the percentage of current and performing mortgages dropped in the 3rd quarter. It was the sixth consecutive quarter during which a drop was seen.

According to the report, over one million homeowners have a foreclosure in progress. And the problems in the mortgage market continue to be varied. 27.9% of Adjustable Rate Mortgages (ARMs) are either seriously delinquent or in foreclosure. "Prime borrowers," those with good credit scores considered the most desirable borrowers for mortgages, have seen the percentage of their ranks at risk of losing their homes double over the past year. 3.6% of prime borrowers are more than 60 days late on their mortgages--more than double that of last year.

Even with a growing number of borrowers choosing to walk away from their mortgages on underwater properties, these numbers are still troubling for both the industry and the government. While many argue that the economy is improving, an increase in the number of borrowers who cannot afford to make payments on their homes is not a good sign. It means that many remain out of work, property values are still low, and the market is depressed.

Fannie Mae and Freddie Mac Join Citigroup in Suspending Foreclosures for the Holidays

Fannie Mae and Freddie Mac announced that they are suspending all evictions from single-family homes and two-to-four unit properties from December 19, 2009 to January 3, 2010—essentially providing those facing foreclosure a reprieve. “No family should have to face the prospect of being evicted during the holiday season,” said Michael J.Williams, President and Chief Executive Officer of Fannie Mae.

Citigroup meanwhile, announced that they would suspend foreclosures for 30 days, from December 18, 2009 to January 17, 2010. The Citigroup suspension includes both evictions and foreclosure notices. Nearly 2,000 Citigroup borrowers were due to have their homes sold, and another 2,000 were due to receive foreclosure notifications during this period. They will now get a reprieve through the holidays.

In a press release, Sanjiv Das, President and Chief Executive of CitiMortgage said, “We hope that with this suspension we can make the holidays a little less stressful for our customers who are going through a very difficult time.”

New York Times Story on Difficulty of Getting Mortgage Modification Hurts Forward and Reverse Industry

An article in The New York Times over the weekend highlighted the importance of good borrower publicity—and the damage that one bad test case can do. With the Obama Administration’s Making Home Affordable Plan coming under increased scrutiny, the newspaper profiled the case of a woman with good credit who, after losing her high-paying marketing job at the height of the recession, began to struggle with her mortgage payments. She was never late on her payments, but as her savings began to dwindle and her credit card debt increased, she sought help from a housing counselor who advised her to participate in the program and began seeking a loan modification from her lender, Washington Mutual (which had been purchased by JP Morgan Chase).

However, after making her trial payments on time for five months, the woman is back at the beginning. Why she is back there is debatable through a series of “he said, she said,” in the article. The bank appears to have been concerned about her income, but with a new job paying her $100,000/year, this seems to not be an issue. The phone tag, difficulty getting to the proper person, receipt of conflicting information, and mounds of paperwork certainly could not have helped. She was reported to credit agencies and threatened foreclosure while making her agreed upon lower payments through the trial modifications.

Clearly, this woman’s story may not have been the norm. But in an industry that receives more bad press than good, stories such as this one continue to be damaging. Chase is made out to be the “bad guy,” and the reader feels sympathy for this woman who is simply trying to make her payments on time.

While every case is different, the forward and reverse mortgage industries must keep an eye out for stories like these, and do their best to avoid them. It seems obvious, but a story like this can hurt the forward industry, the Making Home Affordable program, and even the reverse industry. The banks are not all bad and most loan officers really do want to help their clients stay in their homes. But stories and cases such as this one can drive away people who could really benefit from these programs and the expertise of those in the industry.

Serengeti Communications Discusses How to Reach Seniors Using Social Media

Last week I attended SES Chicago, one of the leading conferences in the search marketing industry and the last conference of 2009. As part of the conference, I attended a panel sponsored by Serengeti Communications on Social Media. I asked them how they recommended marketing to seniors—is social media something that can be used to reach seniors? The response I received was a resounding yes.

Liana Evans, Director of Social Media at Serengeti, reminded the attendees that the fastest growing group on Facebook is women over the age of 55. Seniors tend to be very active in Forums. Eons is a site just for women over 55, and one that is growing rapidly. She reminded the group that, “It’s about what’s in it for me.” What is the benefit to the senior of being a part of a particular community or sharing their experiences? In addition, usability was stressed as an important aspect when marketing to seniors. Can they see it? Older audiences tend to need bigger fonts. Is the contrast good enough for seniors? A light font on a dark background or two similar colors might be sub-optimal. Is it easy for the senior to share? The panel advised those present to therefore focus on usability, not search. The question at hand should be, “Can you make it consumable for your audience?” If a site is consumable, the rest will follow.

The panel then discussed how to engage users who are not tech savvy or only have limited online access. They recommended that companies start with those who are already online, utilizing email or Facebook. Then research where they are and what they are doing. Seniors are online, but their behavior is different than other demographics. Attendees were advised to figure out where the conversation amongst seniors is already taking place noting that people, especially seniors, are reluctant to leave the communities they are already involved in.

With more and more reverse mortgage companies turning to the Internet as a way to reach potential borrowers, Serengeti’s advice is a helpful reminder that the Internet is no longer just for those under 55. However, many potential marketing possibilities have yet to be tapped.

Significant Financial Legislation Passes House

My Friday was spent on the phone with Washington as significant financial legislation passed through the House of Representatives, including a Reverse Mortgage Amendment proposed by Congresswoman Dina Titus (D-NV) and Congresswoman Jan Schakowsky (D-IL). The amendment gave the new Consumer Financial Protection Agency (CFPA) authority to investigate and pass resolutions concerning reverse mortgages, as well as the responsibility for drafting a new disclosure that combines the Truth in Lending Act disclosure and the Good Faith Estimate.

The Reverse Mortgage Amendment passed the house with bipartisan support, while the Financial Services Bill passed with a much slimmer margin. The legislation still has to go through the Senate and be signed into law by Obama, both of which are not likely to happen until next year. Nonetheless, the passage of the bill in the House paves the way for some sweeping changes to the way the financial system (and reverse mortgage industry) is regulated in the future.

To see the articles I wrote for Reverse Mortgage Daily on this topic, see below:
Reverse Mortgage Amendment Passes the House with Overwhelming Support
Reverse Mortgage Amendment Proposed to Consumer Financial Protection Agency Bill

Financial Services Bill Debated in Congress

I spent a decent amount of today watching the debate on the Financial Services Bill in Congress. The bill, H.R. 4173, is an omnibus bill sponsored by the Barney Frank, a Democrat from Massachusetts. While the debate was not the most substantive, the bill contains a lot of important provisions that will have an effect on the reverse mortgage industry, as well as on the lives of consumers.

One Republican from New Jersey spoke out against requiring disclosures to be translated into any language other than English, as is proposed in the bill. But his objections were besides the point-- California already requires disclosures to be delivered in languages other than English. If the borrower cannot understand the disclosure, how will they know the information in it? Disclosures in languages other than English put the borrower at risk for increased discrimination.

The Financial Services Bill is expected to come to a vote in the House tomorrow. I wrote an article on some of the issues in the bill, which can be found at Reverse Mortgage Daily.

Life Becoming Harder for the Elderly in Rural Areas

A heartbreaking article in today's New York Times focused on the plight of elderly people living (often alone) in rural areas. Calling their situation a "plight" is controversial- many of them clearly have chosen their lifestyles by choice. Nonetheless, access to medical care and companionship in aging towns is low. One of the people profiled in the story is a 96 year old man who drives 8 miles each day to have lunch at the senior center in town. However, he worries that he will be unable to pass the test to renew his drivers license, isolating him. The fact that populations have aged to such a degree is something that many might overlook.

In Northwest Nebraska, some counties have median ages of 45-50, more than 10 years older than the national average, and are some of the oldest places in the country. While the news that rural America is starting to die out and age is not exactly new, it's still important to recognize. As Congress debates cuts to healthcare that are likely to disproportionately affect seniors in rural areas, it's important that awareness of these issues grow. While reverse mortgages may be able to help some of these seniors, without the necessary resources and services, financial sustenance no longer becomes the issue.

SES Chicago

This week is SES Chicago, a Search Engine Strategies conference that's taking place in Chicago. I thought that most of the attendees would be from agencies, so I have been surprised to find that many of them are like me-- either self-employed or working for small companies. I even met others in the mortgage industry and eldercare industries. I've learned a lot about marketing to seniors, and how to phrase things in a way that makes sense for the industry. I look forward to sharing my knowledge, once the conference completes.

The Role of Reverse Mortgage Loan Officers in Spotting and Reporting Elder Abuse

This morning Reverse Mortgage Daily published an article I wrote on Elder Abuse. The piece covered the session on Elder Financial Fraud at the NRMLA Reverse Mortgage Annual Conference in San Diego last month. The comments on the piece on Reverse Mortgage Daily raised an interesting question: What role, if any, should loan officers have in spotting and reporting elder abuse? Clearly, it is not the main purpose of their job. But I do think that loan officers are in a unique position to spot and report elder abuse. They often visit a senior's home, and, in seeing the condition of the home and learning the senior's financial information, can be exposed to red flags that an outsider might not see.

Someone compared elder abuse to the difficulty spotting child abuse when a child is beaten, but I do not think they are anywhere near the same thing. The question of corporal punishment for a child by their parent is very different than cases of elder abuse. Elder abuse involves seniors, many of whom are frail, incapacitated, or otherwise dependent on their child. I have a hard time thinking of a situation where slapping a senior would ever be seen as appropriate, but this question is not related to elder abuse, especially elder financial abuse.

Some of the clearest elder abuse cases involve seniors living in squalid conditions, being deprived what they need for survival. A home visit will reveal those things, for example. Elder financial abuse may be harder to spot, but if the senior does not understand the product and/or the child is planning to take all the money, those might be red flags.

While spotting elder abuse may not be part of a reverse mortgage loan officers "job description," they are in a position to make an impact. By educating them and empowering them to do so, they might be able to make a difference in the lives of some seniors who need help. And isn't that what a reverse mortgage is supposed to do anyway?

Wonder Where Your Leads Went? Now You Know

Ever wonder what happened to lead volume recently? A statistic provided by First American CoreLogic may contain the answer. 23% of US home buyers are underwater, meaning their home is less than their mortgage, and making them ineligible for a reverse mortgage. In some states, the numbers are even more staggering. In Nevada, 30% of homeowners owe 50% or more of their home's equity. For more information, see the article I wrote for Reverse Mortgage Daily on this topic.

Of Past, Present, and Future

I apologize for not writing sooner. It had been (and continues to be) my intention with this blog to write daily. However, as I have been contributing heavily to Reverse Mortgage Daily, it's been harder to provide exclusive stories to Reverse Mortgage Minute. I only plan to write a story once-- and Reverse Mortgage Daily is, at least for now, getting first priority.

There are many stories that I write that don't fit in Reverse Mortgage Daily, for whatever reason. Some I just write for myself. Those will wind up here.

In addition, moving forward, I will start linking to my stories on Reverse Mortgage Daily so that my readers will still have access to the same news and information I think is so important, even if I'm not the one breaking the story.

Without further ado, this week's stories with more to come:

HUD OIG Reiterates Faith in Reverse Mortgage Program
Advertising Compliance: Big Issue Facing Industry
HECM Fraud Investigations Underway Says HUD OIG