KLZ’s ask the experts proudly introduces Reverse Mortgage Radio. Hosted by reverse mortgage specialist, Bruce Simmons. For over 14 years, Bruce has delivered homeowners across the front range from costly monthly mortgage payments, relieving financial stress, while providing additional income for retirement. Bruce wants you to learn the truth about reverse mortgages, so you can make an informed decision for your retirement years. This is Reverse Mortgage Radio.
Bruce: Hello, and welcome to Reverse Mortgage Radio. I’m so glad you could join me today. We’re lucky to have a special guest that I’m going to introduce here shortly, but before we get there, I do want to let you know that my name is Bruce Simmons, I am the host of Reverse Mortgage Radio, and I’m the Reverse Mortgage Manager with American Liberty Mortgage, right here in Denver. Should you have any questions throughout the call, or throughout the show, or before or after, whenever, call me at 303-467-7821. 303-467-7821. That’s my direct line, and it will ring to me. I will answer, or it will go to my voicemail that I will listen to, and then return your call as promptly as possible. You can also visit me online at Reversemortgageradio.net. Reversemortgageradio.net. You can get the podcast of this show, or any of my past shows there as well, too. We’ve talked about all kinds of stuff over the years. I should say, over the months. I’ve been doing this years. I’ve been doing reverse mortgages for 15 years, but for the last few months I’ve been recording this show.
Reverse mortgage is an FHA insured loan, that’s specifically designed for people who are 62 and over, that allows you to convert a portion of the value of your home, into tax free money that you can use however you want. You never have to make a payment on the loan, as long as you, or your spouse are living in the home, as well as paying your property taxes, homeowners insurance, and maintaining the home. Those are the four requirements that you have. You have to live in the home. Pay your taxes. Pay your homeowners insurance. And maintain the home. You never have to make a payment, but what happens is you’re still charged interest. So that interest and mortgage insurance get added to the loan balance on a monthly basis.
So, your loan balance gets larger and larger and larger. There’s all kinds of safeguards. This is a very, very regulated loan. The government tells us … How much we can loan, tells us what we have to do beforehand, it tells us how we service the loan, what happens at the end of the loan, all this stuff. One of the requirements, one of the really, actually, a good requirement is that you’re required to talk to a reverse mortgage housing counselor prior to any kind of … Being able to sign the papers. Well, technically, you could sign papers, but they can’t order any appraisal until you’ve actually done that.
Today we’re so lucky to have an actual counselor on the phone with us today. And the thing is about this, is I’ve been doing reverse mortgages since January of 2003, is when I’ve started, so almost 15 years. And at that time, I remember hearing about a counselor, in Aurora, named Kathy Snow, and she’d been … She was probably one of the most experienced counselors at that time. She’s still doing it. I always recommend to people, I have to give a list of different counselors when I meet with people, it has to have five local counselors and then eight or nine call in counselors, people that you could talk to over the phone. I always recommend, if people can, that they go in person. I think the in person counseling is so much better than just talking to somebody over the phone. Where they could sit down with you, and they go through everything with you that you need to.
Welcome Kathy, on the Reverse Mortgage Radio. I appreciate you being here.
Kathy: Thank you.
Bruce: Can you tell me a little bit about yourself? How you got into the counseling business? And specifically how you ended up finding out about reverse mortgage counseling?
Kathy: I began as a housing counselor 27 and a half years ago. I originally came into this business to be on the pre-purchase side of housing counseling, as there was a need to come up with a program to help first time home buyers be able to afford to get into their first home. As a housing counselor, you are not only limited to pre-purchase, but also there was the opportunity, when it came about, to get into reverse mortgage counseling and we do foreclosure counseling, or mortgage delinquency counseling.
Reverse has always had my attention. Ever since it came out, ever since I found out about it, ever since I learned about it, it’s had my attention. And it’s kept it all these years. I’ve been in the business for about 27 years, but have always, always … This has been my baby as far as the housing counseling world.
Bruce: Why is that? If you don’t mind me asking.
Kathy: Just the interest in it. I have a huge passion for working with seniors, helping them understand this program. I know when I first heard about it, I was very confused about the program. I realized that it can take some time, and effort, to help somebody understand exactly how these mortgages work, and you might even remember, Bruce, when they first came out many, many years ago, there wasn’t a lot of talk about them. They were hush-hush in the very beginning when people were taking out reverse mortgage loans. Now, they’re just another loan, or tool in the toolbox, as we might say.
In the very beginning it was hush-hush about people taking out reverse mortgage loans, obtaining reverse mortgage loans. Seniors, more the generation, older the generation, money wasn’t even discussed a lot back in their time. So to try and get people to open up and talk about finances, and mortgage loans, and how much they owe, and how much they earn … That was something a lot of seniors didn’t really have any, I guess I’m going to say … use in discussing. They weren’t familiar with talking about those things, because for many, many years it was hush-hush.
Kathy: As the generations have come younger, we’re now dealing with the baby boomers, then of course money, and money management, and spending habits, and things of that nature are a lot more out to the forefront than they used to be. Even though I enjoy first time home buyers, and I enjoy helping somebody keep their house when it comes to foreclosures, its just been working with the seniors and the reverse mortgages, always been the top of my list of things to do.
Bruce: Yeah. That’s funny how you talk about people not talking about reverse mortgages way back when. Before, about six months before I learned about reverse mortgages, I had a customer call me and he asked me, “What do you know about reverse mortgages?” And I said, “You know, I don’t really know anything, but … ” And I went on to tell him I think the bank takes your house, and all these things that I’ve heard through the grapevine, just being in the mortgage business, which were totally false. That’s one of the reasons why people need to go see an independent counselor, isn’t it? The fact that they need to hear it from a disinterested, I hate to say disinterested, because obviously you’re interested in helping seniors, but a disinterested third party, that’s not … You’re not interested in the transaction one way or the other.
Bruce: That’s the good thing that I like about counseling. Now I know the program came out in 1988, is when it was signed, the first loans were made in ’89. Do you know when reverse mortgage counseling really started? Has this been from the very beginning that people have had to do counseling?
Kathy: Counseling sessions have been required since day one, when HUD brought out the program.
Bruce: Okay. I wasn’t sure about that.
Bruce: And, now, its gone through … The counseling has gone through a lot of changes, and every time the originators go through a change, counseling has to go through a change, I guess. And you have to learn about this. Is there some continuing education that you have to do? Or how do you … What does it take to become a reverse mortgage counselor?
Kathy: First of all, you have to be employed by a FHA approved housing counseling agency. But, second of all, we do have a certain amount of continuing education we have to take, or learn, or apply every year. We, like other people in the business, do have to be licensed, therefore, I do have to take a test to renew my license every three years. At this time, as well, then they go into see what additional training I have had, and whether that has been sufficient to take it forward as continuing education. Because there’s many components of this.
It’s not just the reverse mortgage program. If the reverse mortgage doesn’t work, then maybe there are other avenues, or ways that I can steer, or help somebody through the adversity that they might be having. So, as a counselor, whether it be for reverse or whether it be for mortgage default, you’re forever staying abreast of the ever changing world of mortgage loans. And in reverses in the differences of what can happen in the program. HUD has made changes throughout the years, yes, but it really hasn’t changed the overall picture of the reverse mortgage program, i.e., it is still taking a portion of someone’s equity, and changing it to available green dollars, and of course if there is a lien on the property, then those liens have to be paid off, up front, because the reverse mortgages always have to go into a first lien position. Therefore, any liens on the property must be paid for, and any additional, or extra money, of course the borrower has the ability to use as they choose.
Bruce: Great. So, I guess typically, when I meet with somebody, like somebody calls me, they’re listening to the show, and they call me and say, “I want to meet with you and talk about this reverse mortgage and see how it all works.” I meet with them for what I call an information meeting, and then I give them a list of counselors to call. Then they go talk to you. Now your job isn’t to talk them into or out of a reverse mortgage, right?
Kathy: Correct. No, my job is to strictly explain the program, discuss questions, answers, on how the program works. The ins and outs of it, the rules, the regulations that are involved with it. The mandatory obligation, that’s where seniors have to take over paying their taxes and insurance. That is a major one that becomes folks responsibility, that is also the only way that you can lose your home out of this program, is from not paying your taxes and insurance. Lately, the change that came about in April of 2015, where lenders had to start doing these mandatory financial …
Bruce: Financial assessment.
Kathy: Assessment, then of course, we started taking a stronger looks at budgets and stuff for clients, so that we’re not trying to have them go through all of this and find out, “Oh, sorry. You don’t have enough money, or it’s not something that you can do.” It’s not you, Bruce, nor my opinion to try to have seniors spend money for appraisals if it’s a deal that we can’t fit through. We try to look out, not only on trying to do a loan, or not make a loan, but also what’s in the best interest for the client.
Bruce: Great. Okay. Do you prefer if they talk to a loan officer before coming to see you, or would rather talk to them and have a blank slate, so you’re the first one they talk to about it?
Kathy: Honestly, to me it doesn’t matter either way. Sometimes, like you said, I am that initial up front information to the borrower, but even if I’m the up front contact, they might think that someone such as yourself, is still gonna have that informational meeting with the borrower, for to say, and I think sometimes we offset each other. In other words, I think a lot of times if I’ve met with them and then you’re talking with them about the reverse mortgage program, again, on your information session, I think a lot of what’s being heard is for a second time, and I think it allows people to say, “Okay. Well she said that, and he said that. I guess this is the way it must work.”
Like I said, it really doesn’t bother me, either way. Sometimes I’m the initial information, sometimes you are, or sometimes I’m the secondary information, and sometimes I feel like I’m more or less confirming what the lender has discussed with the borrower. I think it authenticates you guys as lenders on what you’re telling the client.
Bruce: Exactly. That’s what I tell people. I say, “Basically, when you go talk to the counselor, they should be telling you the same thing that I’m telling you.” And I always tell people that, “I don’t need you to do this loan to pay my mortgage. I want you to be … I want you to make the decision. I’m not going to try and talk you into it. My job is to present this information to you, so you have all the accurate information and can make an informed decision. That’s my main goal.”
Bruce: And then when they go talk to you, they should just be a confirmation of what I told them, or vice versa, like you said. So, that’s great. Is there anything specific that you like, or that people should know before going to see you?
Kathy: It’s funny you say that. The younger the generation we’ve gotten into, i.e., the baby boomers, of course, they are, to me, a lot more technically advanced. I think we nowadays … They have done their homework, they have done a lot more research about the reverse mortgage lines, particularly online. A lot of them, as you know, come to us very well educated about the program, how it works, and what it can do for them. Now if somebody doesn’t have access to the internet to computers, then of course we are their, or can be their only educational level. There’s really not anything that I look for somebody to know coming into the program, like I said, some people are far more educated with mortgage loans than others. That’s why we have a diversified world. I might be an expert in counseling, but I’m not an expert lender, such as yourself. To me we’re all an expert in our own fields.
Bruce: Exactly. Good. One of the things that I tell people, is if they go talk to a local counselor in person, such as yourself, there’s no charge. Since there’s no charge for them to come see you, how do you guys make your money? I get that question all the time, and I think I answer correctly, but I want to make sure. I want to hear it from you.
Kathy: For me, myself, I am actually a City of Aurora employee. And this is part of my job for the city as a housing counselor. My salary is actually paid from the City of Aurora.
Kathy: City of Aurora does receive grants and funding from different sources that assist or offset some of these monies that are paid to me, but reverse mortgage counseling dollars, I guess I’m gonna say, don’t make or break my program. Like you’re saying, the loan doesn’t make or break your budget deal. I have never really felt like I wanted to have to charge seniors for education.
Bruce: That’s a good policy. I agree with that.
Kathy: Let alone that I have a lot on my plate, and it would be a lot more record keeping for me, but I just haven’t really felt that there was a need to have to charge seniors, most are on limited incomes anyhow, to have to pay to get education.
Bruce: Good. And about how long does a typical session last? If somebody were to come to you?
Kathy: For me, a typical session is anywhere from an hour to two hours.
Bruce: Wow. So you go through a lot of stuff with them?
Kathy: Particularly now that HUD came out with a financial assessment, yes. We pay a lot more attention to income, and expenses. As you know, if the excess income, or the excess money is not enough, then we try and sit and talk about ways that maybe we can change the budget, i.e., putting someone’s health insurance from being paid every month, or car insurance from being paid every month, to maybe being paid quarterly, or every six months. So that it takes away from the actual monthly budget a little bit. Part of housing counseling is to try and get somebody on a “sustainable” monthly budget. It’s part of what comes with the territory when you start meeting with housing counselors.
Bruce: That’s a good policy, I guess, to make sure that okay … About how many people would you say you meet with every week for reverse mortgage counseling, specifically?
Kathy: That’s a two-sided question. Prior to October 1st, I was seeing anywhere from about 16 and 20 people a week.
Kathy: I was running three to four appointments a day. I was about four to six weeks booked out. That was just the norm. Colorado’s market was up, interest rates were down. A lot of people seeking the reverse mortgage to be able to pay off debt, pay off mortgages, with the money they were earning on the line of credit. It was also a good time to get into that. Now that HUD has made the changes, or since October 1st, I am very, very limited on counseling. I am only doing, maybe one or two a week, and with that being said, I also have had a supervisor above me that left the agency and I am therefore covering about 30 additional foreclosure files.
Kathy: Right now, at this moment, management has limited me to doing counseling for City of Aurora folks only. However, as you know, the majority of the time I handle the entire state of Colorado, or whoever would request counseling services. Hopefully, by the first of the year, I will be able to go back to a statewide counseling, but only if management, I think gets somebody in the position and gets them hired and relieves me a little bit of the foreclosure counseling that I’ve taken on.
Bruce: So your typical city employee, then, you do whatever you need to do, and they have you working all kinds of place, I guess?
Kathy: Well, foreclosures are extremely important as well as helping somebody hang on their house.
Bruce: Yes, I know.
Kathy: It’s a huge task, but also one that has to be monitored on a regular basis, and therefore, we do what we can.
Bruce: I’m surprised that there’s that many foreclosures in this market, still, though? That’s off topic, but …
Kathy: You never get away from disabilities, illnesses, lay offs.
Bruce: That’s too bad.
Kathy: Things like that. It’s always there.
Bruce: Let me ask you this, because there’s some times that I get calls from customers and they say, “Well, I got your name from a list that the counselor gave me.” Now, I give a list out to them of counselors. I guess do you give a list of local lenders out to people who are dealing with out-of-state lenders? If somebody is working with a company from California, and they’re not seeing them in person, do you recommend that they?
Kathy: We always wonder, or ask who or how the borrower got referred to us. Sometimes it’s from a local lender, sometimes it is an out-of-state lender. I have no problem if people want to work with out-of-state lenders, but a lot of times we’ve come to hear from clients that they didn’t think we had any local lenders.
Kathy: Just to set the record straight, we try to inform them, again, that there are both out-of-state lender, and in state lenders, and if they would like a list of local lenders, then yes we can get them a list. Mine has, I think, 10 or 12 people on it. Including a couple of Colorado Springs agencies for lenders. Like I said, we just try to make sure that there’s an overall picture for people that they don’t think that reverse mortgages have to be done through the mail, or over the phone. That you actually can sit down, face to face with somebody, and meet with a local reverse mortgage lender. Like I said, it’s two-fold. If someone is working out of state, that’s fine. I’m not gonna say nobody’s ever done a loan through somebody out of state, but on the other hand, we like people to know that … Put them on a fair playing ground, there are local lenders as well if they would rather do something face to face.
Bruce: Great. I really appreciate you being here Kathy. If somebody had a question for you, could they call your office. I know you do all different counseling, so if you’re listening and you’re worried about your son or daughter might have problems making their mortgage payments, or a first time home buyer, things like … All things that Kathy does. But, what number would they call if they did want to ask questions?
Kathy: Absolutely. They can call for any housing issues at all. My direct number is 303-739-7914. I may handle your call, or I may give you to somebody who does a little bit more pre-purchase counseling right now, or does rental assistance right now. I am not the only counselor in the office. There are a few other ones on staff, I may take your call, or it may be given to the person who is actually handling that portion of the program. Any housing counseling calls can come in to us all.
Bruce: Great. Once again, I appreciate you being on, and feel free to call me if you ever want to come back on again. I love the information. I know my listeners are very appreciative of it. So, thank you so much for being here.
Kathy: No problem. Thank you. And have a great day.
Bruce: You, too. Bye. Okay, that was Kathy Snow, with Aurora Housing Counseling, and if you missed the phone number it’s 303-739-7914. And she does all kinds of counseling. I’ve heard nothing but great things about her. Everybody that I’ve done a reverse mortgage for, whose talked to her with the counseling … Has had nothing but rave reviews for her. She’s a great person, I definitely recommend her to … Anytime I talk to customers. I can’t recommend and individual counselor, but I give the list, and I say, “Definitely deal with somebody local whenever possible.” It’s good.
You are listening to Reverse Mortgage Radio here on KLZ. My name is Bruce Simmons. If you have any questions about what you heard, or any future questions, call me directly at 303-467-7821. Again, it’s 303-467-7821. If you missed any part of this interview too., you can visit me online at Reversemortgageradio.net. Every Monday morning my web guy gets this podcast posted to my website so you can listen to the entire interview if you want.
That’s just one of the safeguards. I started mentioning about the safeguards with reverse mortgages. That’s just one of the many safeguard that are available with a reverse mortgage. I should say, required, actually, because it’s such a regulated program. A lot of people don’t understand that. They still … I still hear from people saying, “I thought that the bank took my home when I died.” Or, “I thought I had to deed the house to my bank.” All kinds of crazy misconceptions. I shouldn’t say crazy, because you hear them. I still hear them, and I see them in articles. Sometimes in financial magazines. An author, journalist, or whatever, is reporting something and will report the wrong things. I get an email from our public relations person … I’m part of what’s called the blog squad, with the National Reverse Lenders Association, and she’ll say, “This person didn’t tell this story correctly.” And we’ll log on and post the blog about why it’s wrong, or that this is the way it really works. Things of that nature.
We try to make sure that the information that’s getting out is accurate. That’s the key thing that I always, in doing this show, in having my website, in talking to people … I don’t care if you say yes or no to a reverse mortgage. I really don’t. What I want to do is make sure that you’re saying yes or no, based on accurate information. You can’t have accurate information by reading an article here or there. Or listening to a financial advisor whose against reverse mortgages. You need to also talk to somebody whose in favor. You need to hear both sides of the story, really. Just like politics, if you will. One of my favorite things with politics is listening to both sides. I’ll listen to a radio station that I disagree with sometimes so I know what the enemy is thinking. I know how I can combat it. That’s a different topic, exactly. Give me a call at 303-467-7821 with any questions. I really appreciate you listening today, and thank you so much for jointing me on Reverse Mortgage Radio. Have a great day.
Call reverse mortgage specialist, Bruce Simmons, of American Liberty Mortgage directly at 303-467-7821 to begin drawing equity from your home. Bruce will come to you anywhere in the front range, for an in person, no obligation consultation. Learn more about reverse mortgages and watch testimonial videos on Reversemortgageradio.net. MLS # 409914. Regulated by Division of Real Estate.