REVERSE MORTGAGES WHAT CAN I EXPECT TO LEARN ABOUT REVERSE MORTGAGES (In no particular order) What IS a Reverse Mortgage? Does the Bank OWN my home? Is there a minimum age? Who qualifies for a Reverse Mortgage Reverse for Purchase Program and Reverse for Refi Benefits of Reverse Mortgage Seven ways a borrower can receive their funds Fixed Rate vs. Adjustable Rate (Why is Adjustable usually better?) What’s a LESA?

REVERSE MORTGAGES WHAT CAN I EXPECT TO LEARN ABOUT REVERSE MORTGAGES Common Misconceptions What does the term HECM mean? Occupancy Requirements Closing Costs Income Qualifications Why is this considered a Negatively Amortized Loan? Do I lose all my Equity? What happens to my children’s inheritance? AND MUCH MUCH MORE!

REVERSE MORTGAGES HOW WILL THE CLASS BE TRAINED There are several ways that training will take place today. Reading the Reverse Mortgage Comparison Handout (The key parts) Power Points (Mostly used as outline – NOT to be read word for word!) I, your instructor, will be the readers digest condensed version of all the material. Your active participation is VERY WELCOMED!

REVERSE MORTGAGES RULES FOR THIS CLASS ASK as many questions as you want during the entire presentation. There are more questions about Reverse Mortgages than any other subject. Your active participation is welcome.

REVERSE MORTGAGES RULES FOR THIS CLASS This is a 1.5 hour class (1.5 credits) There will be a few breaks during the class totaling 40 mins Please feel free to make notes on your handouts Make sure you have signed in / out and your info is correct

REVERSE MORTGAGES IMPORTANT QUESTION FIRST – I have an Important question for you…….. Show of hands ….. How many of you feel that Reverse Mortgages are BAD?

REVERSE MORTGAGES IMPORTANT QUESTION As you can see, MANY of you have a negative view of Reverse Mortgages. By the end of this class I guarantee that almost everyone in this room will have a more positive outlook about Reverse Mortgages. I accept this as a challenge in all my classes.

REVERSE MORTGAGES EXAMPLES OF COMPLETED REVERSE MORTGAGES Allow me to give you a few examples of Reverse Mortgages that I have completed over the years. Grandma in OH 3 Different Families in Brooklyn Couple in Midwest

REVERSE MORTGAGES 30,000 FOOT OVERVIEW Reverse mortgages have been around in the United States for more than 40 years but have only come into vogue in the past 10 years or so. They are gaining in popularity every day as more and more borrows are reporting happy stories about their Reverse Mortgages.

REVERSE MORTGAGES 30,000 FOOT OVERVIEW A Reverse Mortgage is still a mortgage. The big difference is that a Reverse Mortgage does not require a monthly mortgage payment to the lender (Principal & Interest – P&I). Taxes and Insurance are still required* to be paid same as if the home was owned FREE and CLEAR. * Fully paid off homes are not required to pay Homeowners Insurance

POLLING QUESTION #1

Reverse Mortgages are used in the United States to help seniors 30,000 FOOT OVERVIEW Reverse Mortgages are used in the United States to help seniors “AGE IN PLACE”. Since most retirees have not saved enough for retirement they can now access their illiquid home asset without selling their home.

REVERSE MORTGAGES 30,000 FOOT OVERVIEW Borrowers still retain ownership of their homes just as in a traditional forward mortgage. The current Reverse Mortgages are backed by HUD / FHA program of the United States of America.

POLLING QUESTION #2

REVERSE MORTGAGES BREAKDOWN OF ACCESS TO FUNDS Allow me to explain the following ways to access funds: Cash Out (May be limited to 60% 1st Year) Tenured Payment Term Payment Line of Credit (LOC) Several combinations of the above

REVERSE MORTGAGES UNDERSTANDING THE COMPARISON WORKSHEET You have been provided a handout of a sample Reverse Mortgage Comparison Worksheet. We will work from that handout for most of the class and finish with Reverse Mortgage Jeopardy! Your worksheet will look something like the following form on the next slide:

UNDERSTANDING THE COMPARISON WORKSHEET REVERSE MORTGAGES UNDERSTANDING THE COMPARISON WORKSHEET

POLLING QUESTION #3

WHAT HAVE YOUR LEARNED TODAY? REVERSE MORTGAGES WHAT HAVE YOUR LEARNED TODAY? As I go around the room, please tell the class ONE thing that you learned in todays class.

Doug Vairo www.loanofficerstore.com Cell: 646-529-2560