National Council on Aging Recommends
Reverse Mortgages for Long-Term Care
On Wednesday, January 26, 2005, the National Council on the Aging (NCOA),
headquartered in Washington, DC, published a report showing that reverse
mortgages can help an estimated 13 million American seniors pay for long-term
care, allowing many to remain independent in their homes.

The study, titled Use Your Home to Stay at Home, reports that an estimated 9.8
million elder households (aged 62 and older) are currently dealing with an
impairment that can make it hard to live at home. In total, these households could
access as much as $695 billion through reverse mortgages. For individuals, the
extra cash could go a long way to help with family care-giving and other long-term
care expenses. For example, a borrower aged 75 years old with a home worth
$320,000 could receive over $1,400 a month guaranteed for life as long as the
home remains their primary residence. The same plan would give the homeowner
about $2,400 each month for 10 years.

The publication of the report is the first of a multi-phased project focused on
educating policymakers, the healthcare industry, the aging community, and others
about the potential use of reverse mortgages to help reform America's long-term
care financing policies.

Source: National Council On Aging: Use your Home To Stay At Home – January 26, 2005

Another Record Year for the
Reverse Mortgage Industry
Reverse mortgage lenders originated double the number of federally-insured
reverse mortgages in the most recent federal fiscal year, ending September 30,
compared to the prior year, according to new government statistics.
Data from the U.S. Department of Housing and Urban Development show that
lenders closed a record 37,829 Home Equity Conversion Mortgages in FY 2004,
compared to 18,097 in FY '03.

The Top 10 markets include: Los Angeles, CA (3,345 HECMs insured); Santa Ana,
CA (2,164); San Francisco (1,666); New York, NY (1,406); Denver, CO (1,362);
Sacramento, CA (1,300); San Diego, CA (1,285); Detroit, MI (1,063); Coral Gables,
FL (1,009); and Chicago (912).

Through the first quarter of fiscal year 2005, reverse mortgage volume is up 32
percent, according to data supplied by the U.S. Department of Housing and Urban
Development. Between October 1 and December 31, HUD endorsed 9,436 Home
Equity Conversion Mortgages.

Source: National Reverse Mortgage Lenders Assoc.

New HUD Lending Limits
HUD announced in early January, that new, higher HUD 203(b) lending limits were
in effect in certain areas although the maximum HECM loan limit in the continental
US would remain unchanged at $362,790.

The new limits add several thousand dollars to the proceeds received by HECM
borrowers and are good news for many seniors that have previously not qualified
for a reverse mortgage because they owed more on a current mortgage than they
could receive through the program.

The lending limit for any specific area can be obtained from your reverse mortgage
planning specialist.