additional comments on
"Implode-O-Meter Inventor Talks Reverse and COVID19"

1. Eugene H Krabs says:

   April 14, 2020 at 6:45 am

   Refreshing. I like this guy.

   Sorry, not much of a Barry fan…

2. Mary Jo Rueck says:

   April 14, 2020 at 9:18 am

   Excellent Interview with a great new perspective. Thanks so much for sharing this with us.

3. Mark W says:

   April 14, 2020 at 9:55 am

   Does an FHA reverse mortgage have mortgage insurance regardless of the LTV?

   1. Mike Peerless says:

      April 15, 2020 at 7:20 am

      Yes, always.

   2. Sarcasm Detector says:

      April 16, 2020 at 3:48 am

      You pay an upfront fee on a Reverse, around 2.5%, and that’s it. It gets added to the pool that pays off the balances when a home is sold and under water.

      1. James E. Veale, CPA, MBT says:

         April 18, 2020 at 5:36 pm

         Sarcasm,

         Not exactly.

         If you have a $200,000 appraised value home, fees can be as high as 5.5% of the appraised value of the home and if that loan is providing you with $96,000 in gross proceeds, then the percentage raises to 11.2% of the gross proceeds of the loan. Most interest is determined by the amount of proceeds taken, not the value of the home; some believe that consumers need the information expressed in terms of the available gross proceeds, somewhat like APR (but is based on net available proceeds which the gross available proceeds minus all financed upfront costs).

         However, if your home is appraised at $900,000, your upfront costs might be as high as 2.8% of the appraised value of the home and if available proceeds are say $375,000, then the percentage rises to about 6.75% of the available proceeds.

         Remember that some upfront costs can be negotiated and thus the percentages shown above somewhat reduced.

         But costs on a HECM do not end with those charged upfront. There is also ongoing FHA MIP accruing at an annual rate of 0.5% (but charged and thus compounded monthly) on the average unpaid principal balance.

         Finally, there is also accrued interest. BUT all of these charges can generally be added on to the unpaid principal balance which is payable as noted by Martin Andelman in his presentation at loan termination. Many HECM borrowers do not pay any of these costs until the loan is terminated.

         On the other hand property charges not related to the HECM itself must be paid directly by borrows as required (semi-annually, annually or even monthly) by the vendor. They include homeowners’ insurance, flood insurance (if applicable), legally required HOA dues, land lease payments, and property taxes along with all other required property charges.

   3. James E. Veale, CPA, MBT says:

      April 18, 2020 at 4:59 pm

      Mark,

      There are two types FHA MIP costs. The upfront MIP is 2% of what HUD calls the maximum claim amount which is the LOWER of the appraised value at closing or the FHA HECM lending limit which right now is $765,600. So if your home appraises at $500,000, your initial MIP cost is $10,000. If your home is appraised at $800,000, your initial MIP would not be $16,000 but 2% of $765,600 or $15,312. This does not vary by the amount of proceeds that are available to borrowers at closing nor does it vary by the size of the loan at closing. This fee can be financed through lowering the available proceeds by the amount of this cost.

      On top of that The second type of MIP charged is a monthly accrual at the annual rate of 0.5% (but charged and thus compounded monthly) on the average unpaid principal balance of the loan for that month. So if the average unpaid principal balance of the loan for the month is $500, then the accrual for the month will be 21 cents but if that average balance is $100,000 for the month, the MIP accrual for that month will be $41.67.

      Beyond these two is the accrual of interest for the month which is based on the terms of the HECM you obtain.

4. Alan says:

   April 15, 2020 at 4:51 am

   Hello, I was looking for that company that does application processing that was being advertised here a few months ago. What was the name and link to that company?

5. Bryan Buck says:

   April 21, 2020 at 11:22 am

   Would like for them to have at least mentioned the exorbitant fees associated with reverse mortgages.

6. Robert Lowe says:

   April 29, 2020 at 12:25 pm

   Great Video

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