Banking Regulators to Start Collecting Reverse Mortgage Data

The Office of Thrift Supervision within the Department of the Treasury is soliciting comments on a proposed new schedule for Annual Supplemental Consolidated Data on Reverse Mortgages for its Thrift Financial Report (TFR).

With the volume of reverse mortgage activity expected to dramatically increase, the agencies said they need to collect information from financial institutions involved in the reverse mortgage activities to monitor and mitigate risks.

Specifically, the OTS sounds more concerned with proprietary products:

For example, proprietary reverse mortgages structured as lines of credit, which are not insured by the federal government, expose borrowers to the risk that the lender will be unwilling or unable to meet its obligation to make payments due to the borrower. Additionally, in those circumstances in which housing prices are declining, there is the risk that the reverse mortgage loan balance may exceed the value of the underlying collateral value of the home.

The U.S. Department of Housing and Urban Development provides a monthly report for reverse mortgages endorsed for federal insurance, by fiscal year, for those loans that are part of the federally sponsored HECM program.

While this monthly report provides information such as average expected interest rates, average property values, average age of the borrower, and the number of active insured accounts, there is no aggregate monthly data nor is there institution-specific information that identifies the institutions participating in the program.

For proprietary reverse mortgage loans, there is no known data on the volume of reverse mortgages, dollar amounts outstanding, or the institutions offering these products.

Therefore, OTS is proposing that a new Schedule RM—Annual Supplemental Consolidated Data on Reverse Mortgages be added to the TFR to collect reverse mortgage data on an annual basis beginning on December 31, 2010.

The other federal banking agencies are similarly proposing new items for the Call Report to collect reverse mortgage data on an annual basis beginning on December 31, 2010.

Collecting this information will provide the agencies the necessary information for policy development and the management of risk exposures posed by institutions’ involvement with reverse mortgages.

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Banking, Money and Finance : Live Well Financial: Getting a Reverse Mortgage Online: Dos and Don’ts

(Prudent Press Agency)--- Looking for a company that handles reverse mortgages online is easy, just type in “reverse mortgages” in your search engine and the results that will come back to you are quite staggering. However, looking for a good reverse mortgage company online, such as livewellfinancial.com is quite a challenge, and there are many pitfalls that you should avoid at all costs.

Here is a list of dos and don’ts that can help you both find a very good and reliable reverse mortgage company, and at the same time avoid those thieves and scammers just trolling around cyberspace, looking to make a quick buck. True, these are sound, basic advice, but you’d be surprised just how many people can forget these things in the face of a really good deal.

DO: Scout around and canvass

Like when buying a car or looking for a good school for your kids, you won’t just get the first one that comes by. These are big decisions in life, and getting a reverse mortgage is also a big financial decision. You should look around the Internet, ask your local Better Business Bureau, or simply ask friends and family whether they can refer someone to you. Online, if a website has a lot of referrals and testimonials, like Live Well Financial, this can be a very good sign, however, it won’t hurt to still be a little careful with whom you do business with.

DO: Get all the needed information first

You never charge into a war without a loaded gun, and so you should never get into a reverse mortgage contract before making sure that you know what you need and what you’re getting into. Thieves and crooks will often use your ignorance to slip one over you, whether it is an unnecessary charge or consultation, so it’s best to come prepared.

Livewellfinancial.com will not only give you the basic information that you need free on their website, but should you have any other questions, you can either contact their customer support team online, or get a free financial counseling session from them.

DON’T: Give away sensitive information on the Internet

There are two pitfalls that you have to avoid when giving out sensitive information on the Internet, such as complete name, addresses, SSS numbers, credit card numbers and the like. Reputable company would never ask those kinds of information online, as there are a lot of hackers and cyber thieves out there who are great at extracting this kind of information, even if the data is encrypted and secure. Also, companies that ask for this kinds of information can be quite dicey, because there are times when they are really just hackers looking to make a quick buck off your credit card number.

Livewellfinancial.com is a site that requires you to become on-premises when you get a reverse mortgage to give your sensitive information. This is to ensure a quick and secure transaction between you and the company.

DON’T: Sign anything that you don’t understand completely

A lot of reverse mortgage companies employ a really old trick in the book. Use a lot of complicated jargon and terms to confuse the client, and then slip in a clause or two about very high fees, interest rates and other such things. Don’t ever put your signature on a contract that has even one part that you don’t understand, and always, always, always read the fine print.

Livewellfinancial.com offers you a service that is direct-to-the-point and very easy to understand, so that you know what you’re getting into, and what you’re going to get.

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Reverse mortgages should have fixed interest rates

I'm glad to see that the government has considered reverse mortgages in the stimulus package. But still not enough has been done.

This has been one of the biggest rip-offs in the banking business -- and directed at seniors, which is inexcusable.

The biggest problem with the reverse mortgage is not the exceedingly high origination costs, the maintenance costs or the low ceiling on loans, but the fact that there is no fixed interest rate. The approximate rate you quote in your article is 4%, but who knows what the interest rate will be in five or 10 years.

With rates at a historic low, this is an unseemly burden to seniors and their heirs.

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