Is anyone else getting a Reverse Mortgage Loan in Brazos County?

Is anyone else getting a Reverse Mortgage Loan in Brazos County or in the Brazos Valley?

The answer to this is yes…many are taking advantage of the equity in their homes and taking out a reverse mortgage. I can prove that to you by showing you a list from the Brazos County Property Records.

It’s been my experience that before senior citizens sign their final documents they want to know if anyone else in this area is taking advantage of the benefits of a reverse mortgage loan. Naturally, if you are considering a reverse mortgage you would like to know if others have decided to do it, or if you are the “guinea pig”. Rest assured that you are not a guinea pig. You are not alone if you are considering taking out a reverse mortgage.

There is a way you can gauge for yourself how many reverse mortgage loans are being taken out on properties in Brazos County. Here is a picture of one page of the reverse loan mortgages which have taken place in Brazos County within the last year.

All of the loans listed in this picture are the type of reverse mortgage I am most familiar with, the Home Equity Conversion Mortgage or “HECM”. The HECM is a reverse mortgage product which is backed by the government through the USA Department of Housing and Urban Development.

Wait! Back up…where did that information come from?
I got this picture from a site called Texas Land Records (http://www.texaslandrecords.com/). I took what is called a “screenshot” of the results I found when using the Texas Land Records, and searching the index of property transactions in Brazos County, Texas. In my search, I “told” the site that one of the parties to the transaction would be “U S A HOUSING & URBAN DEVELOPMENT” (Usually you will see the name of this agency as "USA Department of Housting and Urban Development" or HUD, however the clerk's office has indexed the agency's name as it is writte just before the opening parenthesis.) The reason this search provides a list of properties which have taken out a HECM reverse mortgage is because the USA Department of Housing and Urban Development is involved in every single HECM reverse mortgage made.

If you want to try this search for yourself, follow these instructions:
1) Go to Texas Land Records (http://www.texaslandrecords.com/).
2) Near the top on the gray bar across the screen click “Counties”.
3) Next you will see a big “2” on the right hand side of the page and there will be a list of counties underneath it. Click on “Brazos”.
4) At that page, near the top on the gray bar across the screen click “Free Search”.
5) Next, you will see a box to input Business/Last Name. In that box enter “U S A HOUSING & URBAN DEVELOPMENT”. You must enter this accurately and just as I have or it will not find any records.
6) Just below that you will see a drop down box where you can choose “Document Type”. Go down to select “Equity Lien”.
7) Hit “Search Now”.

If everything was done correctly you will find the same results I showed you up above in the picture. As you can see, “many” people in Brazos County have taken out reverse mortgages over the past year.

Why is this information available on the internet?
The trick I just showed you is not a commonly known way to get information. It is a well-kept secret. The truth is that most people have no idea this information exists either online or in the courthouse.

Most lawyers wouldn’t think of it…and not many reverse mortgage loan officers or bankers would.

However, many years ago I was an independent public records retriever for companies who needed public records pulled from the courthouse clerks’ offices. I became familiar with the public records in courthouses I learned how much valuable information is available…IF you know where to look. I am sharing this information with you now because I know you may like to verify that you aren’t a pioneer in the reverse mortgage trend.

Is this information available at the courthouse?
Yes. Deed records, deeds of trust (mortgages) and many other types of documents are recorded at the courthouse. In fact, if since 1967 you have purchased or sold a piece of property in Brazos County there will be a record of it at Texas Land Records and in the County Clerk’s office. If you would like to visit the Brazos County Courthouse in person to take a look at these records first hand, you can find the courthouse at 300 E. 26th Street, Bryan, TX 77803. Go in the main entrance. The County Clerk’s office is immediately to your right.

Is this information available for counties other than Brazos?

Yes. At this site alone you can locate indexes to property records for the following counties:

Bee County

Brazos County

Cameron County

Cherokee County

Denton County

Ector County

Grayson County

Hays County

Hidalgo County

Kaufman County

Madison County

Midland County

Nacogdoches County

Panola County

Potter County

Robertson County

Rockwall County

Rusk County

Scurry County

Smith County

Taylor County

Upton County

Walker County

Wichita County

Wise County

Contact a Reverse Mortgage Loan Officer

If you will please send me the following information by email, I will send you the names and contact information of the loan officers I personally know in this area. If you prefer to fax this information to me you can fax it TOLL FREE to 1-877-548-2536. Just print this out, fill it in and fax it. It will come to my private fax.

If you prefer they call you, I can also have them contact you by phone.

Phone Number (only if you want a call):

___________________________

eMail:

___________________________

Your name:

___________________________

Year of Birth (so that it can be determined how much you may receive):

___________________________

Address of property (to figure your property value):

___________________________

Spouse's name:

___________________________

Year of Birth:

___________________________

HECM or the HomeKeeper?

Which type of reverse mortgage is better for me, the HECM or the HomeKeeper?

This article will not give you answers conclusively but will give you an idea of which one might be better for you.

Two examples are presented below. Example #1 shows a better deal on amount of cash available with a HECM. Example #2 shows a better deal on amount of cash available with the HomeKeeper.

Example #1:

The following numbers are based on a person with a birthdate in 1933 and whose home is estimated to be worth $100,000. As you can see, simply put, if you have a home worth up to $350,000 (or thereabouts) you will come out with more money with a HECM.

A comparison follows:

1) A single lump sum advance of
HECM $61,704
HomeKeeper $33,455

2) OR a creditline account of
HECM $61,704
HomeKeeper $33,455

,,,that grows larger each year by
HECM 5.29%
HomeKeeper 0%

...so, if unused, available credit in 5 years would be
HECM $79,862
HomeKeeper $33,455

...in 10 years would be
HECM $103,363
HomeKeeper $33,455

3) OR a monthly loan advance for as long as you live in your home
HECM $394
HomeKeeper $289

4) OR any combination of lump sum at closing, creditline account, and monthly advance

Example #2:

The following numbers are based on a person with a birthdate in 1933 and whose home is estimated to be worth $350,000. If your home is worth $350,000, then the HomeKeeper will give you more money at closing.

A comparison follows:


1) A single lump sum advance of
HECM $130,765
HomeKeeper $132,144

2) OR a creditline account of
HECM $130,765
HomeKeeper $132,144

...that grows larger each year by
HECM 5.29%
HomeKeeper 0%

...so, if unused, available credit in 5 years would be
HECM $169,244
HomeKeeper $132,144

...in 10 years would be
HECM $219,047
HomeKeeper $132,144

3) OR a monthly loan advance for as long as you live in your home
HECM $836
HomeKeeper $1,143

4) OR any combination of lump sum at closing, creditline account, and monthly advance

(The above charts and the following information was taken from AARP’s reverse mortgage information pages. This is the link: http://www.rmaarp.com/.)

These comparisons only include the HomeKeeper and the HECM.

Important Information About These Figures:

If you currently owe any debt on your home, and do not pay it off before getting a reverse mortgage, you must take at least that amount as a lump sum advance at closing, and use it to pay off your debt at that time. This would reduce the amount of cash available to you in a single lump sum, creditline or monthly advance. If you do not qualify for enough cash to pay off any debt on your home at closing, you cannot get a reverse mortgage.

For example, if you still owe $20,000 on a mortgage or home equity loan and do not pay it off before closing a reverse mortgage, you would have to qualify for at least $20,000 in a lump sum from a reverse mortgage, and then use it to pay off your debt at closing. If you qualify for more than $20,000, you could take the rest in cash at closing, leave it in a creditline, or take it as monthly advances.

All estimates on this page are based on monthly-adjusting interest rates in the HECM program, maximum origination and servicing fees, and an approximate national average closing cost total. Interest rates are current for the week of December 11th, 2007. Actual loan amounts available depend on the rates in effect when a loan is closed, and the actual origination fee and closing costs charged. Actual loan amounts available also depend on the appraised value of your home and current equity limits in each program. These estimates reflect Fannie Mae's year 2005 equity limit and the 203-b equity limits from HUD's web site as of December 10. HUD limits are subject to change during the year.

Creditline growth projections show maximum potential future available credit assuming continuation of the current creditline growth rate (which could increase or decrease) and no creditline draws. The more credit you use sooner, the less cash will remain available. To see how credit used affects cash remaining, click

All of the figures on this "Loan Estimates" page are provided for illustrative and educational purposes only.

Mortgage Insurance Premium ("MIP") Explained

MIP is one of the costs involved in a reverse mortgage. For an overview of all of the most usual costs, please review this link.

An explanation of Mortgage Insurance Premium on the HECM reverse mortgage according to AARP follows:

HECM insurance guarantees that you will receive your promised loan advances and not have to repay the loan for as long as you live in your home, no matter:

--how long you live there;
--what happens to your home's value; and
--what happens to your lender.

You pay for this insurance in two parts:

--2% of your home's value (or 2% of the 203-b limit in your area, whichever is less) is charged "upfront" at closing; and
--0.5% is added to the interest rate charged on your rising loan balance.

This two-part mortgage insurance premium (MIP) can be financed with the loan. The MIP also guarantees that your total debt can never be greater that the value of your home at the time the loan is repaid. It makes it possible for you to keep getting your monthly loan advances or growing creditline as promised even if:

--you live much longer than others your age;
--your home's value grows very little, not at all, or declines, or;
--your loan balance catches up to—and then is limited by—the value of your home.

As a government program, HECM insurance does not make a profit. The premiums paid by all borrowers are used to continue making loan advances to—and limit the amount owed by—the borrowers who live the longest and whose home values grow the least or decline.

But the MIP is a substantial cost. The upfront portion on a $250,000 home, for example, can be as much as $5,000. The cost of the 0.5% added to the interest rate depends on how much money you borrow, when you borrow it, and the interest rate on the loan.

For a 74-year-old borrower living in a $250,000 home in May of 2006 who borrows one-half of the maximum loan amount at closing, the total amount paid during her remaining life expectancy (12 years) could be about $7,800

(This information was taken directly from AARP’s website. The link you will find this on is here: http://www.aarp.org/money/revmort/revmort_federal/a2003-03-21-whatarecosts.html.)

How the Lender Participates and Makes Money

• Any FHA-approved lender may originate HECM loans.

• Lenders earn an origination fee and either earn servicing fees or sell servicing rights to other companies.

• Fannie Mae purchases HECM loans, and several companies offer loan servicing systems or services.

• Lenders are protected against loan losses that occur because the nonrecourse feature limits how much a borrower must repay.

• HECM loans may be assigned to HUD when the total loan balance equals 98% of the Maximum Claim Amount.

• HECM insurance benefits may equal up to that amount

What Your Obligations Are

Simply put you must continue to

• maintain the property,
• insure the property,
• pay taxes on the property,
• occupy the property.

Unless borrowers choose to pay and provide evidence of paying property taxes and insurance, lenders are authorized to make these payments from HECM proceeds.

Lenders are also authorized to use the loan to pay for property repairs if they are needed to maintain HUD property standards

The borrowers must continue to occupy the property as primary residence (where at least one
borrower spends the majority of the time). Borrower may reside elsewhere for a maximum of 12 consecutive months, due to physical or mental illness.

At this point, if a determination is made that it is unlikely that the borrower would return, the home would no longer be considered owner-occupied and the loan could become due and payable.

Federal Guarantees in a HECM Loan

In a HECM Loan there are two things that the federal government will guarantee:

• If the borrower chooses a monthly pay out: In the event of lender default, HUD will continue to make payments to the borrower based on the original terms of the loan.

• A HECM is a "non-recourse" loan, which means that a borrower can never
owe more than the value of the property at the time the loan is repaid.

Costs of a Reverse Mortgage Loan

This article is pretty cut and dried and similar to what you will read on other websites. However, I have made a few comments below which are in italics. You might want to take a look at those. One in particular is about loan origination fees. You can read another article about loan origination fees here: Why are the Loan Origination Fees so High?

After you read this article, take a look at this one for more information on the costs of the loan: How Much Will I REALLY Get?

=============

The Costs of a Reverse Mortgage Loan

Except as noted, all costs can be financed, that is, added to the loan balance (amount owed).

• Property Appraisal: The loan officer will ask you for this up front. It is generally an advance payment of about $350, but may be refunded to borrower and added to loan balance at loan closing.

• Credit Report: generally an advance payment of about $25 for a simplified credit report, but may be refunded to borrower and financed with the loan. It doesn't really matter what your credit is however, they need to assure that your property isn't the subject of freshly instigated lawsuit which will result in a judgment lien about the time your loan is about to close.

• Standard Closing Costs: title search and insurance, surveys, required inspections, recording fees, mortgage taxes, etc.

• Hazard or Flood Insurance Premiums: replacement value coverage is required; may require advance premium to be paid at closing if coverage is increased.

• Origination Fee: varies by lender, but cannot exceed the greater of $2,000 or 2% of the Maximum Claim Amount, which is the lesser of the home's appraised value or HUD’s maximum mortgage insurance limit for the area, which is also known as HUD’s 203(b)(2) limit. (A little secret I have learned along the way is that often your loan officer cannot waive any part of the origination fee. The lender requires that all the origination fee be collected. There's no bargaining room there. Your loan officer is working for a lender. Out of the $2,000.00 or more of the amount of the origination fee your loan officer will keep between $200.00 and $500.00. The lender will get the rest. Often the loan officer is not making any other compensation for their time except the portion of the origination fee they receive.)

• Mortgage Insurance Premium: up-front payment equals two percent of the Maximum Claim Amount, paid or financed at closing, plus an annual premium of 1/2 percent, or 50 basis points, charged on the rising loan balance. (My experience is that the Mortgage Insurance Premium is usually the same exact amount as the origination fee. The two are not related but the calculations of them both fall about in the same range.) An additional explanation of MIP can be found here.

• Servicing Fee: flat monthly charge, if not included in interest rate; cannot exceed $30 per month for HECMs with annually adjusting interest, and $35 per month for HECMs with monthly adjustable interest. (The servicing fee on a regular loan is figured into the loan costs as well and taken through interest and points. In a reverse mortgage the servicing fee is calculated and set aside as an amount against your maximum claim amount. In other words if you are entitled to get $50,000.00 the servicing fee will be calculated at an amount which will come off the top of that $50,000.00. Usually this runs around $3,000 to $5,000.)

• Interest is charged on all payments made to the borrower and on all loan costs that have been added to the loan balance. Borrower may select a rate that is subject to change either once a year or once a month.

• Annually adjustable interest cannot vary by more than 2 percentage points per year, or 5 points over the life of the loan. Monthly adjustable interest has no annual cap and a current lifetime cap of 10%.

• Interest rate adjustments do not affect the amount of a monthly advance, but they do change the rate at which a creditline grows larger. They also affect how quickly the HECM loan balance grows.

The Basics of Reverse Mortgages

The common characteristics of all reverse mortgages are relating to homeownership, loan advances, loan cost financing, loan balances, repayment, and debt limits. Here are the basics of reverse mortgages:

A. The senior citizens retain the title to their home.

The lender does not own the home, and does not automatically "get" the home when the borrower dies. So if your kids are against you getting a reverse mortgage tell them that they can extend you a non-recourse loan now and there won't be a reverse mortgage loan, or they can pay off the balance and keep the home when you die. Or, your executor can pay off your home with other assets of your estate.

However, during the life of the loan the borrower is still responsible for taxes, insurance, and upkeep. That's important to remember.

The borrower’s estate or heirs must pay off the loan upon the borrower’s death or it will belong to the lender.

B. About the amount of the loan.
The amount of the loan advances generally depends on the value of the home, the age of the borrower, and the cost of the loan (that is, the loan fees and interest rate).

The greatest amounts are generally available to the oldest borrowers with the most valuable homes who take loans that have the lowest costs.

C. It does cost to get a reverse mortgage. However...
The fees involved in getting the loan fees can generally be "financed," that is, added to the loan balance at loan closing. This means, in effect, that some or all of the cost of setting up the loan (closing costs, origination fee, insurance premium) can be paid with an extra loan advance at closing.

D. The loan balance (amount owed) rises over time. It grows because the borrower keeps getting loan advances and being charged interest on the outstanding balance while making no repayment until a future time.

E. No repayment is required on most reverse mortgages for as long as the borrower lives in the home as a principal residence. When the last surviving borrower dies, sells the home, or permanently moves away, then the full loan balance becomes due and payable.

F. There is a "non-recourse" limit on the borrower’s repayment obligation. This important consumer safeguard means that the total amount owed by the borrower can never exceed the value of the home at the time the loan becomes due and payable. In seeking repayment, the lender does not have recourse to anything other than the home’s value.

1) Even if the loan balance grows to be greater than the home’s future value, what the borrower owes is limited by the value of the home.

2) The non-recourse feature protects the borrower and the borrower’s estate and heirs from "deficiency judgments," that is, from being required to pay back more than the home’s value.

Three Basic Types of Reverse Mortgages

In a nutshell, there are three types of reverse mortgages.

1. Single-Purpose
2. Government Insured Reverse Mortgages
3. Proprietary Reverse Mortgages

Single-Purpose

This type probably isn't why you visited this site to read up on reverse mortgages. Single-purpose reverse mortgages are offered by some state and local government agencies. Each loan can only be used for a single purpose, hence the name "single-purpose".

For example, some are limited to home repairs, others to paying property taxes. These plans generally have maximum income eligibility requirements, but the cost is usually very low or moderate.

Government Insured Reverse Mortgages
Federally-insured reverse mortgages are called Home Equity Conversion Mortgages (or HECMs" which you may hear people pronounce as "Heck-ums"). This is the type of loan I am most familiar with and will discuss the most while writing this blog. The HECM loan is insured by the FHA.

Proprietary Reverse Mortgage
Proprietary reverse mortgages come from private companies; they are developed, owned, and insured by private companies. According to a source I use to learn about reverse mortgages offered by the Neighborhood Reinvestment Training Institute they are the most expensive type of reverse mortgage, and generally only provide competitive loan advance amounts on the most highly valued homes. At present, one of these plans is available nationwide, and the other is available in the most populated states.

The two most popular proprietary reverse mortgages available in the United States are:

--"Cash Account" from Financial Freedom

--"Home Keeper" from Fannie Mae.

In another article I will revisit the three basic types and compare them.

Introduction to the Writer

Greetings from Texas!

My name is Brenda Stone and I am a resident of College Station, Texas. (More about who I am can be found here.)

(College Station is home to the Texas Aggies of Texas A&M University as well as a part of a metropolitan statistical area (MSA) which is located in Brazos County, Texas; our MSA is most commonly known as the Bryan - College Station Area.)

If you need a reverse mortgage loan officer you are at the right place. I am not a reverse mortgage loan officer, but I personally know some very special people who are. If you will allow me to, I will connect you with one of them. I have had the opportunity to observe many reverse mortgage loan officers with Texas borrowers and transactions in many Texas counties which involve reverse mortgage loans.

There are thousands of websites on the internet which discuss reverse mortgages. This site offers a little something different than those. My "non-expert" status might provide a different perspective on reverse mortgages than the information which is available online at this time.

This website, however, is specifically for those of you in Texas and especially for those in the Brazos Valley.

If you live in Bryan or College Station, Texas or one of the outlying communities such as Hearne, Caldwell, Madisonville, Nacogdoches, Lufkin, Navasota, Brenham, Centerville, or Cameron (plus many others) you have found the right website to visit. I have been in all of those counties visiting with borrowers while they signed their final documents. I have heard their last minute questions and listened carefully to their comments about their loan officers.

I found out that some of them did not ever meet with their loan officer and everything was handled by phone. I will not give you their names. They sit off in an office somewhere (maybe not even in Texas) doing nothing but handling paperwork and phone calls.

On the other hand I learned that other loan officers who live in Texas met with the borrowers as often as necessary and that they kept their borrowers informed every step of the way. Those are the reverse mortgage loan officers I kept a list of.

This is a place to begin your research and to consider your options on a reverse mortgage loan. In addition to reverse mortgage loan information--as this site grows-- I am hope to also include you will also find helpful information and resources for senior citizens in the Brazos Valley.

I hope you find this to be a unique reverse mortgage website. Here you will find information and questions answered which other websites will not answer for you. This is because I know the questions you have and the concerns that borrowers have on the day they sign their important reverse mortgage loan documents…questions that other websites have not had first hand knowledge with.

This is the first time of many that I will say this: Read at your own risk. I am not a lawyer. I am not a certfied reverse mortgage counselor. Everything here is just my opinion and based on my perspective gained from having acted as a notary when I attended reverse mortgage loan closings with loan officers who hired me regularly.

If you like the information you find here, I have a a few respected friends who are loan officers in the reverse mortgage business. I trust them to handle your mortgage in an upfront, punctual, professional and considerate manner. I have never seen them drag their feet or be unprepared to get a loan processed yet. Please email me if you would like their information so that you may contact them. My email is revmortblog@gmail.com. (As stated above you can learn more about who I am here.)

When you email me please give me the following information:

Name:

Year of Birth:

Address:

Spouse's name:

Year of Birth:

With this information I can provide my loan officer friends in my referral network with enough information to prepare for your call.

Please read the following:

If you are seeking to do more than gather information, you must contact a broker or lender yourself. I will provide you contact information for one of two friends who originate reverse mortgages.

In this blog I provide general information on reverse mortgages as a fixed-income marketer for my friends who are licensed reverse mortgage lenders. Again, I am not a mortgage broker, originator, underwriter, or lender.

I do not solicit, process, place, or negotiate residential mortgage loans. I do not accept or offer to accept applications for residential mortgage loans, assist or offer to assist in the processing of applications for residential mortgage loans, or negotiate or offer to negotiate the terms or conditions of residential mortgage loans.

Your email will NOT be sold or given out without permission. Only include your phone number if you want me to have a loan officer contact you directly.

Thank you! Brenda Stone