Posted by: Corey Matelli | April 14, 2008

No Time Like The Present

I got a call from a recent client of mine. He was a bit disappointed that the appraisal on his home came in about $30,000 less than he expected. He is now re-considering whether or not he should get a reverse mortgage at this time.

While I totally understand the punch to the midsection that is the reality of the housing market these days, it’s a good idea to get the air back in your lungs before you react. This gentleman can really use a reverse mortgage. There’s no question. He will still get back quite a bit of needed money. However, what he thought he would get is not realistic right now.

I don’t know about you, but the biggest regrets in my life are not the decisions I made, but the ones I didn’t make. The opportunities which came and went without me on board. As John F. Kennedy once pointed, out, when written in Chinese, the word “crisis” is made of two characters. One represents danger, the other represents opportunity.

Opportunities, like crises, come when they come. They don’t always come when we want them to. Perhaps he should have gotten a reverse mortgage 3 years ago. Perhaps he should get one 3 years from now. The question is, can he afford to wait not just for the home values to reverse and trend upward, but for it to get to where he wants it to be? That may take several years.

For him, he needs the money now. When the home values eventually turn around and grow again, it will likely do so at a slower pace than we’ve enjoyed in the past. When it does, he can always refinance and capitalize on the recovery. But the fact is, his home value is as high right now as it’s going to be for some time. It’s going to go down further before it recovers and gets back to where it is now, and even longer before it gets back to where he thinks it ought to be.

While I don’t believe in pressuring people when considering a reverse mortgage, I do think that if you’re not able to wait 2, 3, 4 or even 5 years, now may be the time to act.

Opportunities typically don’t knock for long. I’d hate to see him painted into a financial corner in which his options change, and force him to move from the home he loves.  The unmade decision can cause a lifetime of regret.

Posted by: Corey Matelli | April 11, 2008

It Must Be Friday



We’ve just been informed that the Internal Revenue Service has simplified its 1040 forms for next year in the spirit of becoming a “kinder, gentler” IRS. It goes like this:

(A) How much did you make last year? ______

(B) How much do you have left?___________

(C) Send in amount on line B.

Have a great weekend!

Posted by: Corey Matelli | April 9, 2008

No Pushing!

Last week I had an appointment with a gentleman who was interested in a reverse mortgage. In fact, all indications were that he was going to take very little convincing. His wife had a debilitating stroke 7 months ago, and has been hospitalized ever since. She is unable to speak and her hands are permanently clenched. There is no hope for recovery. In essence, he’s waiting for her to pass, which may literally happen any time.

There is no question that he can benefit from tapping into the equity in his home, which he owns outright. However, when talking with him, he said that when his wife dies, he is going to sell the home and move to Tahiti where he owns property. He has very poor eyesight, and must depend on someone else to even drive him to the grocery store…or anywhere else. He said in Tahiti, he can get around by boat or taxi without any problems.

To be perfectly honest, I could have written a loan that day with little effort. However, I felt duty-bound to inform him that if he did not intend to live in the home for at least 4 or 5 years and he had no urgent need for the money, I would recommend holding off. He would have had about $13,000 in closing costs which would begin accruing interest from the day the loan funded. He may be selling the home within the year and not even use the money available to him within that time. I advised him that it may not make sense to pay $13,000 for something he didn’t truly need, which would only reduce how much money he would get when he sells the home in the not-too-distant future.

He agreed.

Once we moved off the topic of reverse mortgage, in a moment of transparency, he admitted he was lonely. This was the point that I knew it was time to take off the “business” hat and be his friend. He showed me around his home, telling me the stories of his travels across the United States and Europe. He shared stories from his days in the U.S. Navy during World War II. He also shared touching memories of his wife of nearly 60 years.

In parting, I told him that I hope his future works out exactly as he has planned. I mean, who wouldn’t want to live in Tahiti? But I also told him that if his circumstances change, a reverse mortgage will always be available to him. He told me of his friends who cautioned him to be wary that I might try to push him into getting a reverse mortgage and not educate him on what he would be signing. The look on his face and peace in his voice as he reached out and shook my hand and told me how much he appreciated my honesty and integrity in advising him to wait was more meaningful to me than a paycheck. It was then that I realized that I didn’t become his friend when the business portion of our conversation was over. I had become his friend during the business discussion.

The media and those with an ax to grind like to warn people of the “dangers” of reverse mortgages and unscrupulous, greedy professionals. I hope this story proves to you that there are many of us who sincerely put the senior first. This story is not about me. It’s about a man who has been grieving for 7 very long months. Nobody wants him to become a statistic and more fuel to the media fire of negativity.

Posted by: Corey Matelli | April 4, 2008

It Must Be Friday

An 80-year-old-couple are having problems remembering things, so they decide to see their doctor to find out if anything is wrong with them.

They see the doctor and tell him about the memory problems they’ve been having. After a check-up, the doctor tells them that they are physically fine but might want to start writing things down to help them remember things. They thank the doctor and leave.

Later that night while watching TV, the old man gets up from his chair. “Where are you going?” asks his wife.

“To the kitchen,” he replies.

“Will you get me a bowl of ice cream?” she asks.

“Sure,” he says.

She says, “Maybe you should write it down so you’ll remember.”

“I’ll remember,” he says.

“Well, I would also like some strawberries on top,” she says. “You had better write that down cause I know you’ll forget.”

“I can remember that,” he says, as he begins to loose his patience. “You want a bowl of ice cream with strawberries.”

“I would also like whip cream on top,” she adds, “I know you will forget that so you better write it down.”

Hopping mad he says, “I don’t need to write that down! I will remember just fine.” He fumes into the kitchen to get the food.

After about 20 minutes he returns from the kitchen and hands her a plate of bacon and eggs. She stares at the plate for a moment and says, “Hey, you forgot my toast!”

Have a great weekend!!

Posted by: Corey Matelli | April 1, 2008

Home Field Advantage

I had a meeting this morning with an associate friend who is a financial consultant for a large, well known bank. He called me yesterday because he is seeing a real influx of seniors coming to him with some real financial needs. John and I have known each other for over a year, and because of our association, he has a very good understanding of reverse mortgage, but he had some very specific questions which relate to people with whom he has recently come in contact. I thought it would be a good idea to share the questions and answers with you, since maybe you have similar questions.

One question John asked was if a couple may apply for a reverse mortgage even if one is hospitalized, possibly indefinitely. The answer is yes. As long as one of the borrowers is residing in the home securing the reverse mortgage, the rules of obtaining a reverse mortgage are met. This is also true for folks who have already obtained a reverse mortgage. The stipulation that the home is your “permanent” residence is met when any one of the borrowers does so.

This led to the natural follow up question; What defines the home as a “permanent residence”. Most simply put, you may not be gone from the home for longer than one year. Whether it’s for an extended vacation, health reasons, or anything else, you may be out of the home for as long as one year before the loan would be considered mature.

Another great question John asked is if the terms and payout of the loan will adjust should the home value drop after the loan is funded. The answer is no. Even if the value of the home plummets from where it was when a reverse mortgage was obtained, the terms at origination will not change. The only thing which can adjust during the life of the loan would be the interest rate unless, of course, you obtained a fixed-rate reverse mortgage. Just remember that if the value of the home decreases as a result of being in a significant state of disrepair, the loan may become due as this could be considered not keeping your end of the agreement.

One very important thing that I offer John is something he hadn’t thought of. He works for a bank which does not offer reverse mortgages. If their customers inquire about a reverse mortgage, they simply say they don’t provide them. This effectively sends their customers to a competitor who would not only love to fund their loan, but also try to lure them in for all their banking needs. Because I do not work for a bank, John and his colleagues can confidently, and without conflict, refer their customers to me. When the borrowers receive payments from their reverse mortgage, they will go directly into their accounts with John’s bank, not the one across the street.

If you currently work for a bank which does not offer reverse mortgages, I’d love to partner with you keep your depositors where they belong…with you. Give me a call or send me an email, and let’s work together to serve your customers they way they deserve.

If you’re looking to get a reverse mortgage and your bank doesn’t offer them, you might be a little hesitant to go into a “foreign” bank’s branch office to speak to someone who might only see you as a dollar sign with legs. Give me a call, and I’ll come to you…to your home field. I’m not looking to pull you to a new bank. I simply want to help you stay where you’re comfortable. Your bank, and your home. For your advantage.

Posted by: Corey Matelli | March 31, 2008

The Spirit of Seniors

Every now and then I come across stories about seniors which I believe are worth the departure from the typical reverse mortgage talk. You may have noticed my little tag line at the top of my page which suggests that I am “dedicated to the best in senior moments”. The phrase “senior moments” has become almost a comical one referencing our mental or physical fragility. But in reality, there are senior moments which often serve to inspire others.

Here’s a story of an 84 year old gentleman in Santa Rosa, CA. He was on his way home from the grocery store when a teenage assailant approached him with a knife, demanding the senior’s wallet. The 84 year old warned his attacker that he was making a mistake. The man calmly put down his grocery bags, and continued to inform the young man that he was a former Marine who had fought in three wars. He went on to say that he had been threatened with knives and bayonets before, so this was not going to scare him. His final warning to the would-be mugger was that he’d be sorry if he came any closer.

Yeah, he didn’t get the hint.

The kid took another step, and the senior dropped the assailant to his knees with a well-placed kick to the groin.

The senior then picked up his groceries, and left.

Semper Fi!

While we celebrate this senior and his moment, let me do the responsible thing and advise you that if you are ever in such a situation, it’s usually best to not resist. Your life isn’t worth losing over what may only be a few bucks in your wallet or purse. That stuff is replaceable.

You aren’t.

Have a great day!

Posted by: Corey Matelli | March 28, 2008

It Must Be Friday

A young man saw an elderly couple sitting down to lunch at McDonald’s. He noticed that they had ordered one meal, and an extra drink cup. As he watched, the gentleman carefully divided the hamburger in half, then counted out the fries, one for him, one for her, until each had half of them. Then he poured half of the soft drink into the extra cup and set that in front of his wife. The old man then began to eat, and his wife sat watching, with her hands folded in her lap.

The young man decided to ask if they would allow him to purchase another meal for them so that they didn’t have to split theirs.

The old gentleman said, “Oh no. We’ve been married 50 years, and everything has always been and will always be shared, 50/50.”

The young man then asked the wife if she was going to eat, and she replied, “It’s his turn with the teeth.”

Have a great weekend!

Posted by: Corey Matelli | March 27, 2008

The Business of Reverse Mortgage

Part of the problem of promoting yourself as a noble profession which serves the best interest of seniors is that the idea that you’re a business somehow rings as if you’re hypocritical. People who are in business clearly for the purpose of profit love to point fingers at reverse mortgage lenders and loan officers as “fixating on money”.

While the reverse mortgage industry is enjoying exponential growth, particularly in an era scarred by lenders in other mortgage arenas being thrown overboard in order to stay afloat, the key to our success is being ethical. As a member of the National Reverse Mortgage Lenders Association, (NRMLA), we are held to a stringent Code of Ethics. If you review this Code, you’ll see that it is essentially broken down into two sections.

  1. Values
  2. Rules

The values we are expected to uphold are listed as follows:

  • Fairness
  • Confidentiality (protecting the privacy of consumers)
  • Integrity
  • Competence
  • Diligence
  • Professionalism

The rules portion of the Code of Ethics more clearly defines how we perform our jobs and uphold these 6 values. My point in sharing this with you is that you see we are in an industry designed for seniors, but some seem to confuse us as a charity. Can one be charitable and very profitable? Does being one disqualify you from being the other? I do not think so. I would think most agree with me, yet, the criticism of reverse mortgage lenders and loan officers sure does cause one to wonder. Now don’t get me wrong. I am not saying we’re some kind of charity. We’re not. My point is that though we are in a business which is designed to be profitable, we also are legitimately passionate about assisting seniors and helping them achieve their goals.

We are ultimately in a business. As a loan officer, I let the banker mucky mucks in their suits and beautiful offices concern themselves with the profit stuff and business development. They have to make sure everything we are offering and doing meets with the standards set by NRMLA, RESPA, FHA, and all the watch dogs out there, not the least of which; the media. Reverse mortgages and those of us in this business are being watched very closely. I say bring it on. If you’ve got nothing to hide, it’s easy to sleep at night.

Personally, I’m in the people business. You can have your corner office on the top floor of a downtown skyscraper. I’m perfectly happy meeting people in their homes, looking at their family photos, listening to stories and making friends. Because I have to keep the roof over my head, keep food in the refrigerator, make car payments and all that other good stuff, I do need to be paid for what I do. Guilty. However, huge paychecks are not my motivation for doing this job. If they were, I would have quit it a long time ago because I could get bigger paychecks selling homes rather than helping seniors stay in theirs.

Posted by: Corey Matelli | March 26, 2008

Misconception #312

Hey there.  Remember me?  Yeah, I know…it’s been a few days since I’ve written.  Writer’s block hits us all at some point, I guess.

Yesterday, I ran into a blog post by a gentleman who posted his opposition to reverse mortgage.  He stated the usual half-truths, which I believe were not malicious, but genuinely out of not understanding the product or the population for whom reverse mortgages are designed.

The misconception in his column that I wish to address today is this:

“instead of leaving your children a home, you would be leaving them with a mortgage to pay off instead”

This comment does two different things.  First, it clearly indicates his concern is less with the senior, and more with the adult children.  I do not believe he has complete disregard for seniors, but it does suggest that the senior is somehow still obligated, if only morally, to sacrifice their good for that of their children.  In reality, there are very few people who would not want to leave something of material value behind for their children.   However, should that be done at the expense of the senior’s best interest?

The second thing this comment does is expose the author’s bias against reverse mortgage.  You see, a significant percentage of seniors still have mortgage debt, and many die before they have paid it off.  And many of those who are still living expect to die before they pay off their mortgage.  Having to deal with some kind of lien against the home is common.  This is not unique to reverse mortgage.

It should be understood that heirs are not saddled with the balance of a reverse mortgage. As with any lien against the home, the heirs may sell the home and pay off the balance owed.  Any funds above and beyond the loan balance is theirs.  This is no different for a reverse or “forward” mortgage.  And of course, if the heir(s) would like to keep the home, they may secure their own financing.  In most cases, they get a home below market value by only paying what’s owed.  What is unique about the reverse mortgage is that if, for any reason, the home is “upside down”, the heirs are not liable to pay the difference.

Can that be said of a conventional loan?

Reverse mortgages are non-recourse loans.  The lender will only receive the balance of the loan, or the fair market value of the home…whichever is less.  I met with a couple recently who have a negative amortization loan.  They are significantly upside down, and feeling the pressure.  They have absolutely no options.  They not only have payments, but selling their home won’t even bring them even.  They wish to God they could qualify for a reverse mortgage.

And so do their children.

Posted by: Corey Matelli | March 21, 2008

It Must Be Friday

Grandpa and Grandpa were sitting in their porch rockers watching the beautiful sunset and reminiscing about “the good old days,” when Grandma turned to Grandpa and said, “Honey, do you remember when we first started dating and you used to just casually reach over and take my hand?”

Grandpa looked over at her, smiled and obligingly took her aged hand in his.

With a wry little smile, Grandma pressed a little farther, “Honey, do you remember how after we were engaged, you’d sometimes lean over and suddenly kiss me on the cheek?”

Grandpa leaned slowly toward Grandma and gave her a lingering kiss on her wrinkled cheek.

Growing bolder still, Grandma said, “Honey, do you remember how, after we were first married, you’d kind of nibble on my ear?”

Grandpa slowly got up from his rocker and headed into the house. Alarmed, Grandma said, “Honey, where are you going?”

Grandpa replied, “To get my teeth!”

Have a great weekend!

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