Misconceptions about Reverse Mortgages

Myth #1:  You sell your house to the bank:
You always keep title to your house and have complete control over it. You will never lose your home due to non-payment of the loan. Once the loan is settled, you are no longer liable for the debt. 

Myth #2:  You can be forced to leave your home:
Reverse Mortgages backed by the Federal Housing Authority and the Department of Urban Development specifically indicate you cannot be forced to leave your home.

Myth #3:  Your home must be debt-free to qualify:
Even if you have a first mortgage or other debt, you may qualify. But Reverse Mortgage proceeds must first be used to pay off debts that effect title.

Myth # 4:  There are income qualifications that may disqualify you:
There are no income qualifications at all. The loan is based only on your age, the value of your home, the amount of equity you have and current interest rates.

Myth #5:  You will lose your Medicare and Social Security benefits:
Money you receive is a loan, not income. Therefore, your Medicare and Social Security benefits are not effected.

Myth #6:  Your heirs won't inherit anything:
When you are deceased, your heirs can repay the loan and keep the home or sell the home and use the proceeds to pay off the Reverse Mortgage.

Myth #7:  You will have to make a monthly payment:
There is never any monthly payment to make. The flow of payments is reversed. The lender pays you.

Myth #8:  My condominium does not qualify for a Reverse Mortgage:
Reverse Mortgages are not limited to single family dwellings. You can also receive a Reverse Mortgage on condominiums, multi-family dwellings and manufactured housing as well.

For more information call me at (206)930-5606

Ed Moda
Reverse Mortgage Specialist

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Predictions for our Real Estate Market for 2011

 Patrick Doty, Editor, Bellevue Home Team Blog

This is the magic question; isn't it?  Everyone wants to know with some predictability whats going to happen.   We all long to feel safer financially than we have in many months if not for the last 2 years and we have reason to give us some encouragement.

Our  local Bellevue market does seem to be turning around a little as we approach the front side of the bell curve here in mid-January and activity increases.  Aside from that, our local economy and real estate market are held up by businesses and industries that we are privileged to have in our community, like Microsoft, Google, Clearwire, Paccar, Weyerhaeuser, and Boeing causing our economic predictions to be a bit brighter than that of other parts of the country.  In my almost 21 years in real estate I have seen values come and go and we have cause to be optimistic about our real estate market as values, no matter how low they get will always rebound.  The magic question is to what level and the truth is no one really knows, however the upside is with lower prices and rates that are still relatively low, people are finding it a good time to purchase.  Rentals are also increasing as developers of commercial rental property are starting to rebound,.

 

Do you plan on buying or selling a home in 2011, if so where and why?

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Price Points: What you can buy for median price in King Count

By Lisa Pemberton-Butlery

                                                                                                                                                            BRYON ZIEGLER

This bungalow near Seattle's Columbia City neighborhood and Seward Park sold for $355,000 on Dec. 21.  Economists say the Great Recession technically ended nearly 18 months ago. But home sellers around the region are still reeling from its economic sting.

In November, the median sales price of a single-family home in King County continued to tumble — to $359,950, the lowest in more than five years.
Of course, for buyers, the deep price cuts mean more bang for the buck.
Here are six homes around the region that sold in November and December within $20,000 of King County's median sale price.
This turn-of-the-century bungalow — near Seattle's Columbia City neighborhood and Seward Park — has updated electrical and plumbing systems and a partially finished daylight basement with space that could serve as a third bedroom. The home's 6,180-square-foot lot has a fully fenced yard, which features a south-facing deck, a cottage shed and fruit trees.
Living area: 2,180 square feet
Bedroom/bathrooms: 2 bedrooms, 1 bathroom
Year built: 1912
Sold for: $355,000 on Dec. 21.

This Bainbridge Island home is centrally located and features an open floor plan. The kitchen has Zodiaq Quartz countertops, a pantry and an adjacent dining room. The home's nearly 3/4 acre wooded lot offers plenty of privacy and backs a lush greenbelt.

Living area: 1,770 square feet

Bedroom/bathrooms: 3 bedrooms, 2.5 baths

Year built: 1998

Sold for: $365,000 on Nov. 4

This rambler in the heart of the Bridle Trails community near Kirkland features an open floor plan. The home has been updated throughout with new white vinyl windows, crown molding, hardwood floors and modern lighting fixtures. The 9,450-square-foot lot is fenced.

Living area: 1,290 square feet

Bedroom/bathrooms: 3 bedrooms, 2 baths

Year built: 1969

Sold for: $350,000 on Dec. 15

This Sumner home features dark hardwood floors, stainless-steel appliances and a huge master suite with a five-piece bathroom and a walk-in closet. The home sits on a 7,427-square-foot lot and has an attached studio apartment with kitchen, full bath and separate entry.

Living area: 4,003 square feet

Bedroom/bathrooms: 5 bedrooms, 4.5 baths

Year built: 2008

Sold for: $369,950 on Dec. 15

Life on the 10th fairway at the Gleneagle Golf Course in Arlington is all about entertainment in this one-story home, which features a gourmet kitchen, vaulted ceilings, a great room and formal living and dining rooms. The 8,276-square-foot lot has a sprinkler system, garden space and a jumbo-sized third garage designed for a recreational vehicle.

Living area: 1,944 square feet

Bedroom/bathrooms: 3 bedrooms, 2 baths

Year built: 1996

Sold for: $359,950 on Dec. 16

This two-story, south-facing condominium near Lake Union in Seattle offers stunning views of the lake, the mountains and, of course, the city. The main level has floor-to-ceiling windows and an open kitchen and dining area. The lower level features a master suite with a full bath and a walk-in closet, and a second bedroom. There are decks on both levels of the unit.

Living area: 1,398 square feet

Bedroom/bathrooms: 2 bedrooms, 2.5 baths

Year built: 1992

Sold for: $350,000 on Dec. 7

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Purchasing a home with a Reverse Mortgage....great idea for some

Ed Moda,Reverse Mortgage Specialist
Email: emoda@acceptancecapital.com
Cell: (206)930-5606 Off: (425)458-2651

A Reverse Mortgage is a Government Insured program that was created by the FHA to allow Senior Citizens over the age of 62 to access the equity in their homes as tax-free income without making any monthly payments during their lifetime or until the home is sold.

There are no credit, employment or income requirements for the program which makes it much easier to get than a traditional loan. The actual name for the program is a Home Equity Conversion Program or HECM. Based on three determining factors, age, home value, and the banks interest rate, any senior can qualify to receive a portion of money to be used without restriction for their financial needs.

Reverse Mortgages loans have always been a great way to turn the equity in your home into tax free cash – without having to make monthly payments. Changes by Congress to the FHA-insured Reverse Mortgage program now allow seniors to buy a home with a Reverse Mortgage – with no credit score requirement or income verification!  Although this sounds too good to be true, Americans 62+ can now use the equity from the sale of their previous home, or other cash or savings, to move into a different home – just with a single down payment. You will never have to make another mortgage payment, as long as you live in the home as your primary residence, maintain your home, and pay taxes and insurance. Imagine the financial independence you can achieve by eliminating your mortgage payment once and for all. Best of all, if your home’s value appreciates during the term of the Reverse Mortgage you (or your heirs) keep any remaining equity after repaying the Reverse Mortgage loan.

Purchasing a home with a Reverse Mortgage is very similar to purchasing a home with a conventional mortgage.  Rather than determining a down payment based solely on the purchase price, the minimum down payment will be based on a factor of your age, interest rates, and the lesser of the home’s appraised value, purchase price, or FHA-imposed national lending limit.

Reverse Mortgage appraisals, inspections, contingencies, documents, and closings are virtually the same as those with a conventional mortgage. Because of the HUD-required independent borrower counseling, some Reverse Mortgage escrow periods may be slightly longer than that of a conventional mortgage – although this isn’t always the case

The basic eligibility requirements to purchase a home with a reverse mortgage are:

1.      All titleholders must be aged 62 or over

2.      The purchased home must be your principal residence

3.      The purchased home must meet HUD’s minimum property standards and be

either a single-family residence, a residence in a 1- to 4-unit dwelling, certain

condominiums, or an eligible manufactured home.

4.  The down payment must be from qualifying sources

5.  You must complete a HUD-approved counseling session

The basic benefits are:

1.      Eliminates Mortgage Payments

2.      No income or minimum credit score requirement 

3.      You keep the title

4.      Remaining equity goes to you or heirs, not the bank

5.      No pre-payment penalty

6.      FHA-insured

7.      Loan is non-recourse (This is a big Deal)

For more information about this program:

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King County home sales in December strongest since summer

The median price of houses sold in King County in December was $370,000, down 2.6 percent from December 2009's median of $380,000.

By Eric Pryne

Seattle Times business reporter

You've heard of Christmas in July? The real-estate market got just the opposite last month: July-like sales for Christmas.
More houses sold in King County in December than in any month since federal tax credits expired last summer and sent sales into decline, according to statistics released Wednesday by the Northwest Multiple Listing Service.
Buyers closed on 1,458 single-family homes last month — nearly as many as in July, and a whopping 34 percent more than November's total.
Winter usually is a slow season for home sales. They typically peak in summer, then tail off as days get shorter. December's closings usually fall short of November's.
That pattern apparently broke last month. Just four fewer houses sold in King County in December than in the same month in 2009, which was the best December since 2006.
Why the surge? Industry insiders and observers cited several possible influences:
• The market finally has worked its way through the lull it fell into after the tax credits' expiration.
• Buyers are climbing off the fence, even if they suspect prices will continue slipping, because they fear interest rates will rise and wipe out any savings.
• There may have been a push to get some long-languishing short sales — sales for less than sellers owe lenders — closed before year-end.
But there could be more to the surge than that, said Doug Davis, owner/broker at Hallmark Realty in Kirkland.
"There does seem to be a little bit of renewed optimism out there. Let's talk in two months and see if it's a trend," Davis said.
More numbers:
• The median price of houses sold in King County in December was $370,000, down 2.6 percent from December 2009's median of $380,000.
• King County condo sales last month slipped 4.5 percent from the same month in 2009. The median price, $225,000, was down 8 percent year-over-year.
• The median price of a single-family home that sold in Snohomish County in December was $265,250, off more than 7 percent from December 2009. Sales there fell more steeply, off 10 percent year-over-year.

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HUD investigates lenders' fair-housing practices

Federal officials have launched an investigation to determine whether 22 mortgage lenders have been discriminating against qualified African-American and Latino borrowers by denying them government-insured loans.

By JACOB ADELMAN

The Associated Press

Related

LOS ANGELES — Federal officials have launched an investigation to determine whether 22 mortgage lenders have been discriminating against qualified African-American and Latino borrowers by denying them government-insured loans.
The U.S. Department of Housing and Urban Development (HUD) said the inquiry is in response to complaints filed Dec. 7 by the National Community Reinvestment Coalition (NCRC) accusing 22 banks nationwide of violating fair housing laws.
The coalition said the lenders denied Federal Housing Administration-insured loans to borrowers with credit scores that met the federal standard of 580 to be eligible for the insurance against default, but the lenders set higher credit-score thresholds.
The Washington-based NCRC claims those requirements disproportionately harm black and Hispanic communities, since many minority borrowers' credit scores fall between the federal threshold of 580 and the higher benchmarks set by the banks.
The policies have "the effect of discriminating against African-Americans, Latinos, and residents of African-American and Latino neighborhoods across the nation," the group wrote in the complaints that it announced Dec. 8. The group also said the banks don't have a legitimate business reason to withhold mortgages from borrowers who meet FHA credit guidelines, since the government's insurance eliminates their risk.
"The decision by some banks to not follow the FHA's policy is cutting qualified borrowers off from accessing credit, and in doing so, causing harm to their ability to prosper, build wealth and for our economy to grow," NCRC President and CEO John Taylor said in a statement.
The complaints seek unspecified monetary damages and an injunction forcing banks to change their lending policies.

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Bellevue Towers developer turns project over to lenders

The region's biggest condo project ever has been transferred to its lenders after the developer sold less than a quarter of its units in almost two years.

By Eric Pryne

Seattle Times business reporter

The new owners of Bellevue Towers announced price cuts to try to spur sales at the 539-unit complex.

"This is an acknowledgment that prices today aren't what they were," Ira Glasser, an adviser to Morgan Stanley, said Monday.  At 43 and 42 stories, the project's two towers are the Eastside's tallest buildings. Gerding Edlen built them in large part with $275 million borrowed in January 2007 from a consortium of lenders led by Morgan Stanley.That loan matured a year ago, Glasser said, and the lenders have been paying the project's bills since then. The ownership transition was "an amicable and consensual agreement" to put the towers on new financial footing with minimal disruption, he added.

The Bellevue Towers takeover is the latest sign of how far the high-rise, high-end condo market has fallen since the real-estate bubble popped.Sales at most new projects have been sluggish. Some, including The Bravern in downtown Bellevue, have been converted to rentals until the market recovers.  Gerding Edlen, one of Oregon's most prominent developers, also has lost two Portland condo projects to lenders because of slow sales, according to The Oregonian.

Bellevue Towers was the firm's first large project in the Seattle area. It broke ground before the market tanked, and by early 2008 about one-third of the units had been presold.

By the time the buildings were completed in early 2009, many of those prospective buyers either couldn't or didn't want to close.  The project's financial status has been the subject of considerable speculation in Seattle's commercial real-estate community for months. The Morgan Stanley takeover comes as no surprise, said Seattle land-use economist Matthew Gardner.

But it probably doesn't signal an end to Bellevue Towers' challenges, he added.

In addition to the more than 400 unsold units, he said, more than 100 units remain on the market at Washington Square, the towers' closest high-rise competitor in downtown Bellevue.

"That's a lot of supply in a condo market that I don't believe has yet bottomed in terms of price," Gardner said.

When Bellevue Towers opened in February 2009, condo prices ranged from $399,000 to $4.4 million. A Gerding Edlen principal predicted the project, at Northeast Fourth Street and 106th Avenue Northeast, would sell out in two years.

Five months later, with less than 10 percent of the units sold, Gerding Edlen cut prices an average 20 percent. With the additional reductions announced last week, average prices are 30 percent lower than two years ago, Glasser said.

County records indicate just three condos have sold over the past three months. But 10 sales are scheduled to close this month, Glasser said, and 50 more are in the pipeline. Those 50 buyers are being contacted this week and offered the reduced prices, he added.

Traffic at the project's sales center is up, Glasser said, and the condo market appears to be on the upswing. "I think we can sell out in the next few years, if the economy lets us," he said.

In addition to the $275 million loan from the Morgan Stanley consortium, county records indicate Gerding Edlen also took out a $67 million "mezzanine" loan — something like a second mortgage — from Seattle real-estate investment company Washington Holdings to help build Bellevue Towers.

It's unclear whether that loan has been repaid. When contacted Monday, Washington Holdings CEO Craig Wrench declined to discuss the status of the debt.

But Glasser said the Morgan Stanley loan is the new owners' only debt.

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