Hi, all.

Do you believe it's July already? I'm heading up to visit my sister, Catherine, and her husband for the July 4th weekend. I know that New York City has the greatest fireworks in the world on July 4th (thanks Macy's) but I really want to see small town fireworks this year like when we were kids. By the way, on my last trip to my sister's, we took a ride on the Erie Canal and went through a lock. It was something I've always wanted to do and it didn't disappoint! Here's a picture of me as the water level in the lock was going down.

My June 23rd Age Wise Living radio show was "Reverse Mortgages -- The New Retirement Strategy What You Need To Know." I had a wonderful time with Dennis Haber, author of Piggy Bank Your Home -- Tap Into The Power of a Reverse Mortgage, and learned lots about reverse mortgages. Unfortunately, we didn't get through all the questions so I asked Dennis to finish them up in this newsletter.

By the way, did you sign up for my great FREE teleclass "The 13 Steps to Successfully Resolving Your Eldercare Issues & Finally Getting a Good Night's Sleep!" on July 15th at 8a Eastern time? If not, don't worry. Just sign up by going to http://agewiseliving.com/tele-signup.

Until next week then . . . Have a very safe and happy 4th of July.

Did you know that the average time most baby boomers are involved in their parent's care is 15 years!

Mine was 17 years! That's a LONG time to be providing eldercare by trial and error!

The great news is that it doesn't have to be that way for you because I have poured all of my 25+ years of eldercare experience into developing The Ultimate Caregiver's Success System.

The Ultimate Caregiver's Success System is an amazingly comprehensive and information-rich resource that is guaranteed to address your most difficult questions, roadblocks, and communication breakdowns that are so typical for eldercaregivers. And helping caregivers avoid the problems is why I got into this in the first place!!!

Don't worry . . . The Ultimate Caregiver's Success System is not a boring text book with lots of technical or medical jargon that makes you more confused than when you started! In fact, Far from it!

Because no one has time and money to waste -- especially caregivers -- The Ultimate Caregiver's Success System is a very simple step-by-step and easy to follow program. The best part is that even though it's a system, you can jump around to the stuff you need right away.

The Ultimate Caregiver's Success System includes The Ultimate Caregiver's Success GUIDE which has checklists, examples . . . all kinds of information -- that makes the process easy to understand and more importantly, easy to be successful. In addition, the System includes 8 CDs -- 6 seminars, 1 CD of all the forms in the book, and 1 CD with my rolodex of resources.

The Ultimate Caregiver's Success System is perfect for you if you are…

• A member of the "sandwich generation" -- squeezed between raising children and care giving responsibilities for your parents, in-laws, or other aging loved ones.
• Completely stressed and struggling with your eldercare issues.
• Laying awake nights worrying if they are okay.
• Consumed with your time and drained financially and emotionally.
• Having problems at work and home because of your eldercare issues.
• Having conflicts with siblings or other family members that are sabotaging your efforts and undermining your relationships.
• Spending hours searching for solutions to your critical eldercare issues only to have your aging loved ones refuse to cooperate or even discuss them with you.
• Feel like your life is out of control and overwhelmed by where to turn for help.

ARTICLE: REVERSE MORTGAGES -- The New Retirement Strategy

I really hope you listened to the my radio show with Dennis Haber. If not, you can listen to the archive by going to the Variety Channel at VoiceAmerica.com or by cutting and pasting this link into your browser: http://www.modavox.com/voiceamerica/vepisode.aspx?aid=39143. However, we didn't get to all of the questions so here are the rest of Dennis's answers:

What are some common misconceptions about the program?

1. Only for the poor
2. The bank will own the home
3. The loan is due when the first borrower passes a way
4. One must be in good health in order to get a reverse mortgage
5. If during the term of the loan, the home appreciates in value, the lender gets the appreciation or a portion of same.

How long have reverse mortgages been around?

It was authorized by Congress in 1987. The program started in 1989. In 2007 and 2008 over 100,000 reverse mortgages have closed. (2007-107,000; 2008 112,000; and 2009 expected to exceed 112,000). In the first 10 years of the program 35,000 reverse mortgage loans closed. (7%) In the second ten years of the program 465,000 have closed to date (93%).

Are Reverse mortgages here to stay?

The answer is yes. However, reverse mortgages will be different in several respects:

Since the beginning of 2009, the margins have been increased by Fannie Mae. An adjustable rate loan is made up of two components. An index and a margin. Two indices are currently in use. The Constant Maturity Treasury (CMT) and the London Interbank Offered Rate (LIBOR). Think of the margin as the lender's profit. So index plus margin equals rate. For many years the program saw a static margin of 150 basis points. Today the margins exceed 300 basis points. These margins are expected to continue to rise. This means higher interest rates and lower benefit amounts. As of September 2009, the CMT index will be eliminated.

FHA may consider increasing the Mortgage Insurance Premiums charged on each HECM (Home Equity Conversion Mortgage) loan. An increase in the MIP insurance will increase the closing costs. It is the mortgage insurance that protects the borrowers and their estates from owing more than the value of the home when the loan is due. So in the event that the amount due is greater than the value of the home, the borrower is not on the hook for an amount greater than the value of the home. The heirs will not be liable for the difference in an arms-length transaction. However there is a technicality that one must be aware of. If the heirs or the borrowers wish to keep the home in the family, then the full amount is due.

In the future, because of the declining real estate markets and an increase in longevity, HUD (The Department of Housing & Urban Development) may decrease the principal limit factor. This helps determine the reverse mortgage benefit amount. So in the future, those that qualify will be receiving less money than those seniors that already have a reverse mortgage. This is one of the reasons that the best time to get one is now.

Counseling will be vastly different. Counseling has always been a way to get information. In the future, HUD will require that seniors answer a series of questions correctly. At that point a counseling certificate will issue. On the other hand, if the questions are not answered correctly, then another counseling session will be required. The significance of this is that the loan cannot be processed until the counseling certificate is received. A new mortgagee letter detailing this shift in emphasis will be promulgated by HUD.

It may also be conceivable that HUD may try to limit the availability of the program to those in dire straits. It may become a means tested program. This is just a feeling that I have.

Over the summer (2008) a new law (Housing & Economic Recovery Act) was passed by Congress. How does this law affect reverse mortgages?

1. Caps the origination fee that can be charged. The maximum fee is $6000. Without the law, the maximum origination fee today would be $12,510.
2. Prohibits selling of annuities at time the reverse mortgage is obtained.
3. A HECM is now available for home purchases.
4. It is expected in the near future, HUD will implement the HECM program for co-ops.
5. Restriction on cross selling of financial tools in conjunction/ the reverse mortgage
6. Provides a single national loan limit. That limit is now $625,500 (pursuant to the American Recovery and Reinvestment Act 2009).

What role does the federal government play with this program?

The federal government plays a substantial role. HUD issues rules by way of mortgagee letters. These rulings run the gamut. They cover such things as procedure, title issues, lender and borrower requirements, notifications, product requirements, borrower eligibility & property eligibility, etc.

For example, the latest mortgagee letter changed the procedure and process when a reverse mortgage is done on a condominium unit. It remains to be seen whether such rule change will make it harder or easier for the industry. I suspect that the process will be made infinitely harder when a condominium is involved. In essence, HUD now puts the burden of compliance upon the lender. Previously, the burden fell on HUD. I believe that this will make lenders weary about doing reverse mortgages on condos. I hope my thinking is incorrect.

Is it appropriate for one to obtain a reverse mortgage and then take that long ago forgotten vacation?

Many pundits say no. I strongly disagree. As long as one realizes that a reverse mortgage is the last pool of money that the home will create, the proceeds must be used wisely. AND it is for the senior borrower to determine this; not the government nor anyone else.

Remember, if you're struggling to help your aging loved one, I urge you not to wait for a crisis to develop. Please call me toll-free at (877) AGE-WISE or email me at Barbara@AgeWiseLiving.com for a complimentary "get acquainted" conversation. I'm here to help!

Dennis Haber, Esq. is Executive Vice President of the Agency for Consumer Equity in New York. He is a prolific writer of provocative reverse mortgage articles and has been published in the prestigious New York Law Journal. His book, Piggy Bank Your Home Tap into the Power of a Reverse Mortgage has been recently updated and translated into Spanish. His blog -- The Reverse Mortgage Blog -- helps keep the industry informed. He is also a leading originator of reverse mortgages. For more information about these and other points, please go to www.dennishaber.com.

Upcoming Live Seminars

For information about how to attend an AgeWiseLiving seminar and upcoming dates and locations, please go to Seminars.