Seniors Growing As Share Of Home Purchasers Due To Reverse Mortgage

Older Americans are a significant mainstay of home ownership in the US.  Home ownership among those 65 or older is stable at 80%.

In 1982, the home ownership rate was less than it is today in every age demographic other than seniors.  The hardest hit group are those under 35, where home ownership has dropped 12%.

And seniors are not just sitting on the sidelines clipping their coupons.  The biggest growth demographic, last year, for home purchasers was the 65-74 crowd jumping from 10% of total home sales to 13%.

Many seniors are opting for FHA Reverse Mortgages to either downsize or to borrow funds for renovating their existing homes to suit their current needs.  The Reverse mortgage brings an added benefit as it eliminates their monthly mortgage payment.

Disclosure of Congressional Fees in New Mortgage?

Federal Housing Financing Agency Director, Mel Watt stated that GSE funding of several affordable housing trust fund initiatives, targeting rehabilitation and management of low income rental housing, enacted by congress back in 2008 and never implemented, because of the mortgage melt down, will begin January 1, 2015.

His mandate, that a small portion of revenues at Freddie Mac and Fannie Mae be earmarked for these initiatives, has Republican lawmakers livid.  However, their arguments centering around some future cataclysmic financial crises necessitating the status quo, a restructure or replacement of the GSE’s is being undermined by their profitability.  Fannie and Freddie stand to earn combined profits of $25b in 2014.  

Remember, only those who have taken out a mortgage since 2008 have repaid the U.S. Treasury for the $188b bail out.  It was paid for with increased fees charged to borrowers.  This funding of the affordable housing initiatives will be paid for with these increased fees which will be collected from current and future borrowers.

Home owner taxpayers are paying more for their mortgages in order to fund social programs that they are, for the most part, unaware of.

Dodd-Frank limits what I can charge you for your mortgage and mandates my full disclosure to you, of all charges you are paying. I am subject to dire financial consequences if I, or my staff, do not fully comply with these disclosure regulations.

Why is Congress not required to fully disclose it's actions to it's taxpayers?

Did you know that, in addition to the taxes you are paying, several extra dollars are being added to your mortgage closing costs in order to fund  public and low income housing grants?  Did you?
I believe that maintaining Fannie Mae and Freddie Mac is probably worth using them as a conduit for the distribution, to low income tenants, of these extra charges to home buying taxpayers.  It would just be nice for our lawmakers to have to play by the same “transparency” rules that we in the mortgage industry have been mandated by them to follow.

Why So Many Reverse Mortgage Ads

My buddy Mark Fogarty noted, in his recent column in the National Mortgage News, that the U.S. Census Bureau’s American Housing Survey states that there are:

• 76 million owner occupied homes in the U.S.
• 49 million have a mortgage
• 27 million homes are free and clear
• Seniors own 14 million free and clear homes
• Only 421,000 seniors have a reverse mortgage

Now I know why we are seeing so many reverse mortgage ads on television.  They are the sweetest of the mortgage opportunity sweet spots.

Concierge Program with Victoria Robinson

This home has been enrolled in our concierge program.  Take a look and see how we are helping get this property sold.  Listed by Victoria Robinson with Coldwell Banker Legacy.

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FHA Fundings In 2014

FHA fundings will decline again in fiscal 2014 and are projected to continue to drop to their lowest levels since 2004.  HUD forecasted 2014 FHA fundings at $191 Billion.  Actual fundings came in at $134 Billion, down 30% from initial projections.
HUD independent auditors project fundings dropping again in 2015 to $124 Billion and again to $113 Billion in fiscal year 2016.

Why?  FHA’s insurance premiums are at their highest point ever.  The recent increases in FHA insurance can cost a home buyer between $200 and $400 more per month more than ever before.

Concerned industry advocates, including the National Association of Realtors and the Mortgage Bankers Association are appealing to legislators to agree to immediately lower FHA premiums.  They cite tens of thousands of potential homebuyers are being priced out of the housing market.

Congress is reticent to do so, noting that although there has been significant financial improvement at HUD, their statutory required capital ratio of 2% will not be fully met until late 2016.

So, we now find FHA loans being adversely selected by borrowers who don’t quality for high ratio, lower cost Fannie and Freddie loan programs, which carry more stringent credit requirements than does FHA.

What effect do you think this phenomena will have on the FHA insurance fund going forward?  Adverse selection is never good and is usually the precursor of a negative experience.

Take A Vacation And Help The Economy!

Between 1976 and 2000, we Americans took an average of 20 vacation days.  Since then, we have averaged just 16 days a year.  These vacation days include national holidays so, when you factor out Christmas, New Year’s day, Thanksgiving, Memorial Day, Labor Day, Veterans day, Martin Luther King day etc.,  most Americans no longer take a two week vacation.

This means that Americans, on average, do not take 169 million vacation days a year.  This lack of vacationing costs the U.S. economy $275 billion, annually, in lost spending.  This equates to 1.7% of the country’s GDP, proving that time is money!

Thanks to Dr. Elliot Eisenberg for this one.

Good News For FHA

The Federal Housing Administration went from having a net worth of -$1.1 Billion to a current net worth of +$4.8 Billion.  That is a 500% improvement since the 2008-09 mortgage melt down.  The improvement has been gained on the backs of those who obtained FHA mortgages since 2008.  So, only those American taxpayers, who obtained a mortgage in the last 6 years, have paid the price to recapitalize FHA, not every American taxpayer as the politicians would have you think.

These relatively few American taxpayers paid for recapitalization with increased annual mortgage insurance premiums, which have risen to a whopping 1.35% of the mortgage, balance per year.  Now that FHA is recapitalized, there are a few in congress who are suggesting that the annual insurance premium be lowered in an effort to stimulate borrowing and home purchases.

Concierge Program - 10128 2nd St NW

This home has been enrolled in our concierge program.  Take a look and see how we are helping get this property sold.  Listed by Todd Havens.

This 1 acre property has a great location and tons of potential! Lots of land with tall, mature trees next to the MRGCD irrigation ditch. Seller says that an irrigation gate may be installed. All city utilities are on the property including new electrical service. There is a tall privacy fence surrounding the back yard. There are several old structures on the property, including many garage spaces and covered carports or horse stalls. All are old and/or in need of minor or major repair. Some residential areas may be restorable to living condition?? (with major renovation) Or, bulldoze and start over? Property has been used as residential and commercial business property in the past. There are many possible options. 

http://101282ndstreetnw.utour.me/