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The Biggest, Fastest Growing Opportunity in Mortgage Is the Reverse Mortgage--Position Yourself to Capitalize by Choosing a Reliable, Expert Partner.
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Program Questions
Broker Questions
Program Questions-
Q.
What is a reverse mortgage?
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A.
A Reverse Mortgage is a special type of loan that allows a homeowner to convert a portion of the equity in his/her home to eliminate mortgage payments and even gain tax-free income without losing the title to the home. The accumulated equity derived from mortgage payments and appreciation can be paid to the borrower. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer uses the home as their principal residence. Most Reverse Mortgages offered by Liberty are FHA-insured and guaranteed. A small percentage of available Reverse Mortgages offer built in private insurance.
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Q.
How do clients qualify?
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A.
Clients must be 62 or older and own a home with some equity. They don't need any income to qualify. If your client currently has a mortgage, that's okay -- we can pay it off with a Reverse Mortgage. Clients can even have bad credit, as long as there are no current government liens against their home.
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Q.
How can your clients use the money?
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A.
The money from a Reverse Mortgage can be used for any purpose, from making ends meet to living retirement dreams. The top reasons for funds used given typically by borrowers are:
- Paying off debts, primarily mortgage and credit cards
- Home repairs and remodeling
- Living expenses
- Travel
- Health care or long-term care
- Easing the financial burden on their children
- Education
- Hobbies
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Q.
Will your clients lose their home?
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A.
Absolutely not. Your client remains the homeowner and he/she can stay in the home for as long as he/she desires. In effect, the borrower is being paid to live at home. The program is regulated and insured by the Federal Housing Administration. By law, the homeowner can't be forced to sell or move. And no payments are due on the Reverse Mortgage until your client no longer lives in the home.
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Q.
If no monthly payments are required, how is the reverse mortgage paid back?
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A.
This isn't a home equity loan. The loan is paid back when your client moves out of the home, sells it or all the people on the title have passed away.
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Q.
What if my client wants to leave the home to the kids?
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A.
It's their home. Your client can still leave it to their children or to anyone he/she chooses. The heirs can pay off the loan any number of ways, such as the following:
- Sell the house;
- Refinance the debt; or
- Use other funds to pay off the Reverse Mortgage.
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Q.
How much cash can my client get?
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A.
The amount depends on your client's age and the value of the home.
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Q.
What do the experts say about this program?
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A.
Many financial counselors, senior advocates and published reports suggest that a Reverse Mortgage can be a smart way to secure a financial future during retirement.
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Q.
Are there any costs?
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A.
As with any loan, there are closing and other costs, all of which can be paid with the money generated by the Reverse Mortgage but there are NO out-of-pocket costs to the homeowner.
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Q.
Will my client have to pay any taxes?
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A.
In general, the IRS does not consider proceeds from a Reverse Mortgage to be taxable income. Your client is still responsible for property taxes, homeowner's insurance and for all home upkeep and maintenance. You must recommend that they consult a tax professional.
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Q.
Will this loan affect my client's Social Security or Medicare benefits?
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A.
HECM payments do not affect Social Security or Medicare benefits because those benefits are not based on the assets of the recipient. However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.
If your client does not spend HECM advances in the month received, then such funds are considered part of his/her liquid resources and may adversely affect your client's eligibility for SSI. Regulations vary for state-administered programs such as Medicaid, Aid for Dependent Children (AFDC) and food stamps. Therefore, we suggest that you refer them for a consultation with a benefits specialist at your local Area Agency on Aging or the local offices for these programs to determine how HECM payments may affect their particular situation.
Broker Questions-
Q.
Why do I need an FHA license?
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A.
More than 80% of the Reverse Mortgages originated are HECM loans. They are FHA-insured loans that require a HUD-approved loan originator.
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Q.
What makes Liberty Reverse the company to partner with for my reverse mortgage business?
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A.
Liberty Reverse is the third-largest originator of Reverse Mortgages in the nation. We focus exclusively on Reverse Mortgages, allowing us to develop unparalleled product expertise and deliver superior, personal customer service.
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Q.
How long does it take to close a reverse mortgage?
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A.
Liberty Reverse's average processing time, from start to finish, is 45 days, including the counseling certificates. Your clients can have a big impact on processing time if appointments are made quickly and the property is in good shape.
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Q.
How do I get paid on the loans I close?
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A.
There are three separate programs to choose from. All of them pay you directly out of escrow when the loan closes.
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Q.
How do I market for Reverse Mortgage business?
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A.
The same way you generate your regular business. Your database and personal network is the best place to start. If you don't have many 62-year-old borrowers, don't worry. Your younger borrowers have parents and grandparents. Get creative and call your Broker Care Coordinator to be connected to our marketing experts.
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Q.
What are the processing differences in a Reverse Mortgage?
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A.
Processing a Reverse Mortgage is unique in that there are no income or reserve requirements. The borrower is qualified based on his/her age, property and liens. The biggest challenges are different than a traditional product.
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Q.
Do you offer a "private" or "jumbo" product?
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A.
Yes. The Liberty Preferred(TM) Jumbo was released in early December 2007 and is currently offered in CA, WA, OR and FL. FHA approval is required in order to originate this product. Please contact our Broker Care department with any additional questions you may have.
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Q.
Is there a broker agreement?
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A.
The Originator and Wholesale programs require a traditional broker agreement. The Advisor program simply requires a HECM Advisor Agreement.
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Q.
Why would I want to pursue Reverse Mortgage business?
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A.
The first wave of baby boomers turns 62 in 2008. Reverse mortgages are projected to grow by 455% by 2009. This increase in demand will ensure this product remains an important tool in your toolbox long into the future.
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Q.
How do I calculate the total loan amount?
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A.
Use the Liberty calculator on our Web site.
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Q.
How are interest rates calculated?
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A.
We upload rates weekly into the calculator on our Web site.
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Q.
I have a lead - where do I start?
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A.
Go to the Sign Up Now page.
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