Graduated home buybacks.


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You don't need to pay back for whatever length of time that you live in the home ... On the other hand, offer you're home. Then again, for all time move out of you're home. The sum you owe becomes bigger ...
Transcripts
Slide 1

Graduated house buybacks AFCPE Extension Pre-Conference November 19, 2008 Susan E. Cosgrove, AFC Mississippi State University Extension Service

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Reverse Mortgage Introduced in 1989 Special kind of home credit Home Equity Conversion Mortgage (HECM) Converts value into money

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Who\'s Eligible All proprietors must be no less than 62 years old for most Reverse Mortgages All proprietors of the home must apply and sign advance papers Owners of a solitary family one-unit homes are qualified properties

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How can it work? A credit against your home You don\'t need to pay back for whatever length of time that you live in the home Can be paid at the same time OR, as a standard month to month advance OR, on occasion and in sums you pick

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How can it work? Paid back, in addition to intrigue when the last living borrower passes on Or, offer your home OR, for all time move out of your home The sum you owe becomes bigger after some time As your obligation develops bigger, value develops littler Still in charge of property duties, protection, and repairs

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Growth in Reverse Mortgages Grew from about 8,000 in 2001 to more than 107,000 a year ago The normal credit sum grew 80 percent to $138,700 amid the same era More than 450,000 HECMs have been subsequent to 1989

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Housing & Economic Recovery Act of 2008 Intended to help seniors by reining in expenses and extortion connected with graduated house buybacks

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Housing & Economic Recovery Act of 2008 - Provisions incorporate… Amount a senior can get were expanded to $417,000 (went from $200,160 to $362,790)

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Housing & Economic Recovery Act of 2008 – cont. Beginning charge - Cut to 2% of the principal $200,000 acquired 1% for any sum after that Cannot surpass $6,000 Law allows for top to modify in view of yearly rate increment in CPI

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Housing & Economic Recovery Act of 2008 – cont. Loan specialists precluded from obliging borrowers to buy protection, annuities, other comparative items, as a state of getting a house buyback

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Who\'s A Target - Some Seniors Are Victimized Seniors who are rich in home value yet poor in real money Victim to business people who utilize high-weight attempts to close the deal and corrupt strategies to sign them up for the home loans paying extravagant charges purchasing superfluous protection approaches - annuities

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Unscrupulous sales representatives searching for a fast approach to make a powerful commission Some sales representatives call themselves " enlisted monetary gerontologists " or confirmed senior consultants Use forceful deals techniques Enticing radio and TV promotions, and regular postal mail Sell other budgetary items that are pointless and accompany strong expenses

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Unscrupulous Sales Pitch

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Unscrupulous Salesperson Recruitment

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Important Key Decisions Choosing a Counselor Considering Options and Timing Estimating Leftover Equity Picking an Interest Rate Sharing the Decision

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Reverse Mortgage Counseling

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QUESTIONS?!?!

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Reverse Mortgages Developed by: Evelyn Edwards Vice President of Community Reinvestment BancorpSouth – Mid MS Region Updated by: Susan E. Cosgrove Family Resource Management Area Extension Agent Mississippi State University Extension Service