New Reverse Mortgage Requirements Coming Soon!

by Mike Poole, TowneBank Reverse Mortgage Specialist

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The Department of Housing and Urban Development has finally announced that the financial assessment as a requirement for qualifying for a reverse mortgage will come into effect on April 27, 2015. While the financial assessment was previously announced as an upcoming change last October, it was not implemented in the past year. The financial assessment is poised to be one of the biggest changes in the reverse mortgage industry while adding another safeguard for future borrowers.

The financial assessment came about, largely, because of the reputation of the reverse mortgage. What does the financial assessment mean for future borrowers and the reverse mortgage program? For the first time, credit and income will be taken into consideration when determining a borrowers’ eligibility. If a borrower has less than stellar credit and has had trouble keeping up with his/her payments, then a mandatory life expectancy set-aside will be required to ensure borrowers can make property taxes and homeowners’ insurance payments.

If a borrower has a sparkling payment history, however, then a set-aside will not be enforced. Documentation necessary to determine if a borrower will require life expectancy set-asides includes, but isn’t limited to, credit history documentation, asset verification, property charge verification and income verification.

For the reverse mortgage industry as a whole, this change is just another hurdle to overcome, and one that will strengthen the program in many consumers’ minds as a long-term retirement planning tool and NOT a loan of last resort. This has been the biggest struggle of all, changing public perception so that the reverse mortgage can finally be up considered as a respectable  retirement planning strategy.

Borrowers who are not in financial need, make their payments on time, and have all their retirement planned, may benefit more from the program as an alternative option. With the line of credit option, borrowers can use their equity when they want and/or need to in order to supplement their retirement. For borrowers who are considering the reverse mortgage, but may be thinking of waiting for various reasons, now is the best time to act.  The financial assessment may make some borrowers ineligible in the future, because there may not be enough equity to cover the required set-asides and other financial obligations such as property liens or credit card debt. In order to protect borrowers, HUD will have to ensure they can meet financial obligations in a timely manner. The financial assessment will do just that.

Interested in a reverse mortgage or simply want more information?  Give Mike Poole a call at (757) 513-1254 or via email at Mike.Poole@TowneBankMortgage.com.

Kit Kat

Ask Kit KatNYC Coyotes

Hook Law Center: Kit Kat, are there really coyotes in New York City?

Kit Kat: Yes, there are, and they date to 1994 in NYC. They first appeared there in the Bronx in Woodlawn Cemetery. We are talking about the Eastern coyote, and Urban Park Rangers believe they first were present in NY State in the 1930s. By the 1980s, they were ubiquitous. Some  believe they came east from central North America after the wolf was exterminated in the east, and as farms reverted to forested land. Others think they were here much earlier—perhaps around the time when European settlers replaced the native Indians.

Actually park officials say coyotes are quite harmless—at least to people. Now if you’re a cat or other small animal, you may want to avoid them. The key they say is to NOT feed them. Once they begin to associate humans with food, that’s when the encroachment and the nuisance behavior starts—getting into trash cans, approaching people in broad daylight, etc. If they are left to their natural tendencies, they will avoid human contact like the plague. In fact, Sgt. Jessica Carrero of the Urban park Rangers has only seen them 5x  in 13 years. The good news is they’re not pests; they’re actually helping nature to balance itself. Sarah Grimké Aucoin, director of the Urban Park Rangers, says, ‘They are occupying a niche not held by any other predator, and they perform services like controlling rodent populations.’

We are learning a lot about the Eastern coyote in NYC through the use of digital cameras activated by motion which are placed by researchers of the Gotham Coyote Project in strategic areas. They began their work in 2011. Quite cleverly, the cameras are placed at knee height and have a disc that smells like cheese as a lure. The cameras are checked every eight weeks. The Bronx seems to be their preferred abode. There are two large parks there—Pelham Bay Park and Van Cortlandt Park, and that’s where the most coyote sightings have occurred. Another favorite is Inwood Hill Park in Manhattan. So if you visit NYC, and you hear howling at night, your ears are not playing tricks on you. There really are coyotes in NYC!

(Lisa W. Foderaro, “That Howling? Just New York’s Neighborhood Coyotes,” The New York Times, (NY/Region) March 6, 2015)

Upcoming Seminars and Events

  • April 27 & 30, 2015 – The HLC Monthly Seminar Series for April is Veterans Benefits – How Proposed Changes Will Affect You!  The seminar is scheduled at 10 a.m. on Monday, April 27, 2015 at the Meyera E. Oberndorf Central Public Library,  4100 Virginia Beach Boulevard, Virginia Beach, VA and at 10 a.m. on Thursday, April 30, 2015 at the Hilton Garden Inn, 5921 Harbour View Boulevard, Suffolk, VA.  To register and reserve your seat, please call 757-399-7506 and ask for Debbie.
  • August 12, 2015 – Andrew Hook will be speaking to a group at Maryview Hospital in Portsmouth, Virginia.
  • August 21, 2015 – Andrew Hook will be speaking to a group at DePaul Hospital in Norfolk, Virginia.
  • August 27, 2015 – Andrew Hook will be speaking to a group at Mary Immaculate Hospital in Newport News, Virginia.
  • September 9, 2015 – Andrew Hook will be speaking at a Virginia Continuing Legal Education seminar, location TBA.

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