Page 14 - Boca Club News - July '19

Page 14, Boca Club News
Legal

Reverse Mortgages Update

By Michael J Posner, Esq., a partner presupposes that the heirs deserve the home even though their property going forward.
in Ward Damon, a mid-sized real parents needed and got to enjoy the benefits of the reverse As a result of the number of reverse mortgage foreclosures,
estate and business-oriented law mortgage money; and there was a revamping of the HUD program in 2017 to
firm serving all of South Florida, 5. Many foreclosures occur simply because reverse partially address such issues. First, the mortgage insurance
with offices in Palm Beach County. mortgages were granted before the crash, and the monies premiums charged to fund the government’s guarantee of
He serves as the HUD Foreclosure given were based on a higher pre-crash value. Combined with the loan has changed. Instead of a floating premium of up
Commissioner for the State of the accrued interest over 10 to 15 years (a key to how these to 2.5% based on the amount of money advanced at closing
Florida. They can be reached at (561) work, seniors pay nothing during the term of the loan) and all and during the loan’s first year, a lump sum of 2% is taken
594-1452 or by e-mail at mjposner@ the costs of sale (as high as 8% for real estate commissions, at closing. This could result in higher premiums for some
warddamon.com. taxes, transfer taxes and title insurance), there is little to no borrowers.
In 2015 I explained reverse mortgages in this column. equity left to interest the heirs or the estate to consider selling However, the monthly mortgage insurance premium has
Recently, an article published in USA Today on June 13th, the properties. been reduced from 1.25% to 0.5%, saving borrowers on the
(tinyurl.com/y36lvwjp) basically claimed that reverse As a Florida HUD Commissioner, I have handled accrued monthly charges at a rate of about $166 for each
mortgages were simply predatory lending designed to hundreds of reverse mortgage foreclosures for HUD. In $50,000 borrowed. The new rules will benefit borrowers who
steal seniors’ and the heirs’ homes without any benefit or only one instance was a foreclosure based on the failure to use their available funds at closing, but likely cost seniors
knowledge. The flaw in the article is that it fails to clearly pay taxes. All other cases were either abandonment of the who open a reverse mortgage as a line of credit for future
mention several important facts: home or death. HUD is only obligated to wait one year after use without drawing out funds.
1. Without the loans, many seniors would have been abandonment of the home or death to begin the foreclosure In addition, the new guidelines have reduced the amount
forced to sell their homes anyway, due to their inability to action, but in all cases HUD gave the family more time to that can be borrowed. The maximum amount is a complicated
pay maintenance costs (such as major structural repairs, and decide whether to sell or walk away. In all my years as a formula based on the value of the home, the age of the
roofs) existing loans (which may be burdensome) or taxes HUD Commissioner, I have never received a complaint from borrower and the interest rate. Lowering the amount borrowed
and insurance; a senior or beneficiary that HUD has “stolen their home.” will likely reduce the number of foreclosures, benefiting both
2. No one forced these seniors to take the loans and spend As I stated in 2015, there are several criticisms of the seniors and the guarantee fund.
the money they received, even if spent frivolously; reverse mortgage program. High upfront costs are still an A reverse mortgage can be a great tool for many
3. A majority of foreclosures occur not due to defaults issue and frequently not properly discussed with borrowers. homeowners, but it is a program that should be carefully
relating to non-payment of taxes or insurance, but due to Interest rates are higher than conventional loans. High reviewed to ensure that it fits an individual’s needs.
either abandonment of the home (residing in the home is a pressure sales tactics (including late night tv ads) have Discussions with a CPA, your children and a HUD loan
condition of getting and keeping the loan) or death; encouraged seniors to take out reverse mortgages, then spend counselor are a must before taking out a reverse mortgage.
4. Claiming that the heirs lost out on getting the home all of the money on vacations and gifts, without consideration
due to the reverse mortgage is a false premise, because it of the ability to pay taxes and insurance and maintain the
Senior Savvy

Beware of Accepting that Facebook Friend Request;

It May Just Promise You a Heart Attack

By Jordana Balsam, SOFLO new career choice. I’m sure it works for you (I don’t need cause serious health problems, not reverse them. Beware of
Matchmaker, Gut Health Coach, to see your before and after pictures). I get it, you believe in anything claiming to provide “energy” (a feeling we can all
Holistic Nutritional Consultant. your product so much that you are not only a representative, use, especially as we age) as they have ingredients that can
When it comes to Facebook but you’re also a customer. Thank you, but no! provoke a heart attack, as well as cause diabetes and other
friendships, I have one simple rule. For the most part, the MLM pyramid schemes can be very serious health issues down the road.
I will gladly accept your request. very misleading. The most popular product is probably Lesson Learned: If we just became Facebook friends a
After all, I’m touched that you want weight loss shakes that promise to give you energy and build minute ago, let’s get to know each other first. My suggestion
to be my friend. Although you are a muscle and clear your mind, help you focus. All relevant is to send me a cute dog video or a funny meme instead.
total stranger, I welcome you into my topics for the senior community who may be looking for Leave the weight loss, energy, anti-aging claims to your
online life, as I can always use more people to validate my ways to prevent or even promise to reverse aging. doctors (unless, of course, they are also your Facebook
social media feelings. But I will immediately delete you if These drinks, pills and other food sources promising the friends; then you’re on your own to decide!)
you start filling up my feeds with any of the following: world are often laden with toxic chemicals that can, in fact,
1. Politics (either side) Contrary to your belief, your daily
rant is not going to persuade me to change my view. Your
opinion does not matter to me; after all, we just became
friends a minute ago, so let’s get to know each other first.
Share a funny meme, tell a joke, post a family pic, but do
not go off about what’s wrong with this country. No need
to state the obvious. We all know America needs a major
reboot.
2. Hate – I truly do not get this. Do you really think that
your negative comments, bullying, or shaming of any kind
is a turn on? I’d like to believe that, for the most part,
people are good. But the few and far between who fill my
feed with nastiness, you will be immediately deleted. And
if you follow up your nasty comment with an outlandish
narcissistic selfie on a giant yacht surrounded with women
half your age, well you won’t even get a “Buh” to the “bye.”
And lastly, the most important one of all that mostly
relates to older people vulnerable to scams:
3. MLM, or any attempt of any kind to sell me anything
(unless it’s a dog, in which case I will sincerely consider it).
For those of you who have found your second calling with
the new side gig of selling beauty products, diet shakes or
any “health/weight loss programs” – first of all, good for
you! I am glad you found your way and are happy with your

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