Well, it’s about the most beautiful June day you could ask for, and I’m sitting here thinking about winter.  I like to be proactive, and the cost of the coming winter troubles me personally, so I’m taking steps now to alleviate both heat loss and simultaneously seeking out alternative ways of heating my house.  But if the cost of the winter coming troubles me on a personal level, at least I have things I can do about it: I can cut back on non-essentials, I can buy a pellet stove, etc.  What the cost of fuel will do to my clients who are seniors on a fixed income, however, doesn’t just trouble me, it scares me.  I recently read an article (http://www.fosters.com/apps/pbcs.dll/article?AID=/20080523/GJNEWS_01/178779174/0/FOSTERS01 ) that bothered me so much on a human level that it has inspired me to find out all I can - now, in June - about help with the high cost of winter heating for 2008/2009.  For anyone who is a senior reading this and thinks they may need help this winter, please know that there ARE places that exist solely to assist people like yourself - promise yourself that you will ask.  If you are not a senior, this is from the article mentioned above:  “…people should be aware of their neighbors. The elderly person at the end of the block might seem content, but it wouldn’t hurt, he said, to check in on them once in awhile. People on fixed incomes are especially at risk for financial problems especially as the cost of living continues to skyrocket.”  I couldn’t have said it better myself.  If my own parents didn’t have a reverse mortgage to draw upon, I’d certainly be sitting down with them to find out the impact the cost of oil was having on their monthly budget.  On the local level, your Town or City Hall is a good place to start.  A half hour conversation with Janice Marshall at the Town of York Senior Center (207-363-1036) yielded some excellent and little-known information about where seniors might go for assistance.  Most New England towns and cities have someone like Janice who is ready to help.  The Maine State Housing Authority (http://www.mainehousing.org/ENERGYPrograms.aspx?oProgramCategory=4) has programs for both fuel assistance and for grants and low-interest loans to help make houses more fuel efficient.  They can be reached in Augusta at 1-800-452-4668.  Your Maine Area Agency on Aging may also have information on local resources.  Call 1-877-353-3771 to contact the Area Agency on Aging in your county, or click on the following link: htttp://www.maine.gov/dhhs/beas/resource/aaa.htm.  In New Hampshire, one of my favorite agencies is ServiceLink.  Picking up the phone and calling your local ServiceLink office will put you in touch with kind, knowledgeable people whose sole reason for walking in the door of their job every day is to help seniors and others find the help they need.  On the web, you will find ServiceLink information at http://www.nh.gov/servicelink/index.html or you can call 1-866-634-9412.  Now, my profession is reverse mortgages, particularly in Maine and New Hampshire, and it’s darned cold around here in the winter.  Many of us live in houses a couple of hundred years old, the windows haven’t been replaced in a dog’s age, and the furnace is thirty years old and oil looks as though it’ll head towards $5 a gallon before our summer’s out.  A reverse mortgage can help.  If you live in Maine or New Hampshire and have been considering a reverse mortgage, now, in June, might be just the time to take a more serious look.

Please follow this link to an article I wrote with the above title that was published in the York Independent in October 2007.

http://yorkindependent.net/news/2007/2007_10_19/071019_LCS_SM_seniors.cfm

It’s been a long time since I wrote anything here, but it’s good to be back.  I have been spending a great deal of time not only with reverse mortgage clients, but in my capacity as Corporate Sponsorship committee chair for the Alzheimer’s Association, Maine Chapter.  My efforts on behalf of Memory Walk 2008, the largest fundraiser of the year, are just about at an end.  Over the past few months, I have made the decision to change companies.  Though I had never met him in person, I have spoken with and known Rob Mitchell for the past couple of years.  He’s one of the few people in the reverse mortgage industry that had my complete trust to do what’s right for the client, which for me must be at the core of the client/originator relationship.  When Rob told me in February that he was creating his own firm focusing exclusively on reverse mortgages and described to me the extensive research, thought and planning that had gone into creating that company, I was extremely impressed.  When he asked me to be one of his first hires, I didn’t hesitate.  I know a good thing when I see it (that’s why I’ve been married so long)!  It still makes me laugh when I think that over hours of conversation this winter, Rob and I rarely talked about money.  Our talks tended to revolve around ethics, ethics, ethics and more ethics.  Rob is actually on the committee of the National Reverse Mortgage Lenders Association to develop professional standards for our industry as we work to keep the “sharks” out.  It’s rare to have someone at the head of a company that you’re actually proud to work for, but that’s what I have.  Coastal Finance is the name of the firm: our home office is at Crown Colony in Quincy, Massachusetts, although I will continue to live and work in the Seacoast area of Maine and New Hampshire.  As of this writing, June 9, the web site is in its final phases and our television/radio advertising campaign has yet to begin, but soon you’ll start to see advertising for Coastal Finance - check us out! 

Recently I gave a presentation on reverse mortgages.  During the question and answer period at the end, I was asked “What is the most common misconception about reverse mortgages?”  Without hesitation, I replied “That the bank takes your home in the end”.  Though I know where it comes from now, I’m still surprised that this idea has persisted this long.  Somehow it had even entered my consciousness even before I knew anything about reverse mortgages, because I remember asking the reverse mortgage specialist who came to talk to my parents “Can my parents lose their home?”  I think I asked that poor man that question about ten times!  So, where does this myth come from?  It comes from many years ago when some very early reverse mortgages had what was termed “Equity Sharing” or “Equity Appreciation” features.  It meant that at the end of the day, the bank DID own a large chunk of the home.  This feature has never been a part of the federal reverse mortgage program, which accounts for over 90% of the reverse mortgages written in the country.  As for the rest, very few banks that offer reverse mortgages have retained this feature, although every now and then you might find one.  In fact, not only does a lender not own the home in the end, they don’t even want to (and if you’ve ever had to sell a home, you know part of the reason why!)  Reverse mortgages come due when the last borrower is no longer using the home as a primary residence, but the lender doesn’t particularly care where the money comes from to pay what is owed.  It may come from inherited assets like a life insurance policy because the borrower has passed away, it may come from the proceeds of the sale of the house, or from a mortgage company if the heirs decided to take out a regular mortgage on the home.  Having no payments as long as you live in the home is the big difference between a reverse and a regular mortgage, but in other ways it behaves the same.  Just as with a regular mortgage, the bank doesn’t own your home - ever.  You can put it up for sale whenever you want,  leave it to whomever you want, and all that good stuff.  A reverse mortgage is simply a lien from a lender, and the only people who ever own the home are the ones on the deed.

It’s taken me a while to realize it fully, but there are many people I speak with who are initially unclear on how their reverse mortgage specialist (me) fits into the reverse mortgage process.  I had my moment of clarity while driving home from an initial client appointment on a snowy night in December.  The woman that I met with had asked me several times about which banks had reverse mortgages.  Thinking that she was interested in shopping around, I told her about the reverse mortgage products available through the lenders I use most often, and also explained that some local banks had proprietary reverse mortgage programs of their own and those would have to be investigated by her on a case-by-case basis.  Later in the conversation, we went over my role in the process and I outlined exactly how the steps of getting a reverse mortgage unfolded.  On my way home, somewhere around Kennebunk, it hit me that she hadn’t been asking about the banks so that she could shop around, she had asked because she hadn’t understood what my role was and thought that she was the one who was supposed to go find herself a reverse mortgage by calling around to different banks.  Hers was just the latest example, but I think this issue is unclear often enough to warrant explanation.

Here’s how it works:  when a client makes contact with me, usually by phone, we have a conversation regarding why they are interested in a reverse mortgage and I answer any and all questions they have at the time, often offering them books, DVDs and web sites that they may want to use to continue their research.  Sometimes, we completely digress and start talking about the Red Sox, but this is more prevalent from April to October.  If they would like me to come to their house and sit down with them and whoever else they’d like to be there, I do that, bringing with me all the necessary paperwork, amortization schedules, etc.  My job, my role, is to help them determine if a reverse mortgage is a good fit for their needs and wants at that point in their lives.  It is not to sell them a reverse mortgage, because while it is often an excellent option, it isn’t the only one.  I stay as long as they need me to, and make myself available for any questions that may arise later, however small.

If the client decides that they’d like to go forward with a reverse mortgage, my function at that time is to go over with them the best reverse mortgage for their situation.  Maybe it’s a fixed rate reverse mortgage, rather than an adjustable.  Maybe it’s a “jumbo” reverse mortgage as opposed to a federally insured HECM.  As an independent mortgage company, GIA Mortgage can use any lender with which it chooses to do business.  If I worked directly for a bank, say Alpha Bank, I could only offer Alpha Bank’s reverse mortgages.  If Alpha Bank didn’t have a reverse mortgage product available to people under the age of 62, and I had a client who was 60, I couldn’t help that client.  As an independent, we can choose to work with those lenders who do offer reverse mortgages to people under 62.  The main point is that GIA Mortgage is not the lender.  It is the go-between between the client and the lender.  Then my clients and I sit together and fill out the lender’s application.  Although it’s not required, generally there’s a lot of conversation and laughter during the filling out of the application, and discussion of the Red Sox if applicable.  I forward the application for processing to our home office in Worcester, Massachusetts, leave my clients a list of any paperwork they may need to collect and forward to our office, order an appraisal at the appropriate time, give the client instructions on how to complete the necessary third-party counseling, and generally keep in close contact during the entire time between application and closing.  Closings usually take place at the client’s home with either a notary public or attorney.  While I’m not required to be at the closing because I have nothing to sign, I always go simply to be there for my client, unless I’m completely unable.  After the closing, sometimes my clients and I go out to lunch (which on one lovely occasion was followed by a trip to the bookstore at the mall, because we’re both diehard book lovers).  The whole thing is pretty painless, and a reverse mortgage without any home repair or title issues can be accomplished very quickly.

Occasionally there are issues with the home that the appraiser will find that require repair.  When this occurs, my role is somewhat expanded.  For instance, one of my New Hampshire clients had a problem with cracks in the foundation of the home, so I located a foundation company, met the contractor at the home, went into the basement with him to show him the problem, then sat in the kitchen with the contractor and my client and discussed a time frame for the repairs.  We went ahead with the closing, and technically my job was done.  This contractor, however, needed a little prodding to be held to the stated time frame, so my client and I did some tag-team prodding for a month or so.  When the job was done, my client needed to have a final inspection in order for the lender to release the amount of money they had held back for repairs, but had a difficult time getting the answers she needed from the lender.  She called me, and I ran interference for her with the lender and appraiser until everything was settled.  Then we went out to lunch.

And that, in a nutshell, is what GIA Mortgage and I do.