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Reverse Mortgages on the Verge of Financial Planning Breakthrough?

18.05.12

“I’m reasonably positive [the Saver] will become an important part of our planning in the future,” Evensky told the publication.

Evensky and colleagues at Texas Tech have worked on a yearlong study on the use of reverse mortgages in retirement planning that is expected to be published soon. In speaking with groups of financial professionals about the research, Salter told RMD he has received positive feedback from the planning community. In the meantime, Evensky says the studies indicate that use of the reverse mortgage Saver product will significantly increase the survivability of a retiree’s portfolio in retirement.

Statements from those like Evensky, who are highly regarded in the financial planning community, have the potential to reach an largely untapped market. And some lenders may already be seeing an immediate benefit.

“We have already begun to market to the younger demographic, and this article has strengthened our message,” says Mike Gruly of 1st Financial Reverse Mortgages. ”The fact that the message comes from a respected member of the financial planning industry instead of the lending industry itself attracts more serious listeners, and is creating more serious dialogue.

Source: Reverse Mortgage Daily

HUD bans 3 S. Fla. bank officials after reverse mortgage conviction

18.05.12

HUD's action indefinitely keeps the four from conducting business with the federal government.

"HUD will not tolerate those who abuse the mortgage system and target elderly borrowers for their personal gain," HUD Secretary Shaun Donovan said in a statement.

Gendason and Incandela, as loan officers at 1st Continental Mortgage with offices in Fort Lauderdale and Boca Raton , were accused of soliciting customers to obtain a reverse mortgage loan through California-based Genworth Financial Home Equity Access Inc.

The two used their positions at the bank to find financially vulnerable elderly borrowers and pressure them to refinance their existing mortgages into an FHA-insured reverse mortgage or Home Equity Conversion Mortgage, according to court documents. A reverse mortgage allows borrowers, who are at least 62 years of age, to convert the equity in their homes into a monthly stream of income, or a line of credit.

Prosecutors said Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers' properties to qualify for a reverse mortgage. Based on the false documentation, Genworth approved and the FHA insured more than $2,572,813 in reverse mortgage loans, prosecutors said.

Source: Sun-Sentinel