Reverse mortgages on the rise in Deschutes County

Reverse mortgages on the rise in Deschutes County

By Mac McLean
Courtesy photo

Frances and Ken Byrum faced a difficult choice last year when they lost a supplemental insurance plan that paid most of their medical bills.

The couple, respectively 69 and 81, could pay the plan’s premiums by taking money out of an individual retirement account and draining their retirement savings faster than they had planned.

They could also sell the house they’d shared for more than 14 years and move to a smaller place that was easier and cheaper for them to maintain.

Or, the Byrums could borrow against their home’s equity with a reverse mortgage and use its proceeds to wipe out some existing debt and create a small financial cushion that could help the couple the next time they needed some extra cash.

“It was a big decision on our part,” Frances Byrum said. “There’s times I think we regret (getting the loan), but at that time we really didn’t have a choice.”

According to records obtained by The Bulletin, 62 Deschutes County homeowners, including the Byrums, took out a reverse mortgage on their homes in 2014. This represents a 59 percent increase from the total number of reverse mortgages the county’s homeowners took out in 2013, and comes after a few years of slight decreases in the county’s total reverse mortgage volume since 2010.

Meanwhile, the state’s overall reverse mortgage volume fell sharply over this 5-year-period and is now less than half of what it was in 2010.

Reverse mortgage lenders and housing counselors say the county’s increase is likely due to an improving real estate market that allows homeowners to have more equity in their homes they can borrow upon to get these loans. It could also be a sign the county’s homeowners are seeing reverse mortgages as more than just a “loan of last resort” that can help retirees who are caught unprepared for a major expense and have no other way to get funds.

“When you really understand how this product works, it can be an unbelievable financial planning tool,” said Larry Melton, the reverse mortgage manager with Director’s Mortgage, which is one of the 28 lenders that issued a reverse mortgage in Deschutes County last year.

The loans

Technically known as home equity conversion mortgages, reverse mortgages are a 50-year-old financial product insured and regulated by the Federal Housing Administration that lets people who are 62 or older get a loan based exclusively on the amount of equity they have in their homes.

People can borrow an amount equal to between 52 percent and 75 percent of their home’s assessed value, depending on their age and other factors — the maximum allowed is $625,000 — and can get this money in the form of a single lump sum payment, a series of regular monthly payments that last for a period of time, a line of credit they can use whenever they need it or any combination of these three.

Unlike a traditional mortgage where borrowers must make monthly payments, the balance of a reverse mortgage and any taxes or fees it has accrued comes due only when the last surviving borrower dies, sells their home or leaves it for a period of more than 12 months. The total amount due is usually deducted from the home’s sale price but can also be paid back with cash if the borrower or survivors don’t want to sell the house.

Borrowers do not need to make any payments on the loan as long as they live in the house, though they must stay current on their home’s tax and insurance payments to avoid going into default on the loan and losing their home through foreclosure.

Since September 2010, the Federal Housing Administration has required prospective reverse mortgage borrowers to complete a two-hour counseling session as part of their application process. The session includes a 10-question quiz to make sure they understand the product, and prospective borrowers are presented with a list of alternatives that may solve their financial situation without forcing them to borrow against the equity of their home.

“We have to discuss all of the options that are available to them,” said Shelley Nelson, default intervention manager with NeighborImpact’s HomeSource program. Her organization runs one of only five FHA-certified home equity conversion mortgage counseling programs in the state of Oregon and the only one that is located east of the Cascades.

Nelson said those options typically include selling the home and moving into a smaller place or with their children, friends or other family members. Prospective borrowers may also qualify for Medicaid, Veteran’s Aid and Attendance or another government program that can help retirees pay their long-term care or medical bills, she said, explaining the primary focus of a counseling session is to make sure the borrower knows all of the risks and responsibilities associated with a reverse mortgage before they take out a loan.

“At the end of the day, it’s a really good solution for some people but not for others,” she said, explaining people typically move ahead with their plans to get a reverse mortgage after they’ve finished one of these counseling sessions.

The borrowers

The Byrums thought about getting a reverse mortgage so they could wipe out some debt when Frances Byrum became eligible for one of these loans about seven years ago. But they instead refinanced their home with a traditional mortgage worth $85,000 in 2009 that cost about $750 a month.

Frances Byrum said she and her husband didn’t have any problems making this monthly payment until her former employer started phasing out the supplemental insurance coverage it gave retirees a couple years ago.

“It just put more expenses on us,” she said, explaining the company started making its retirees pay part of the premiums for this insurance coverage before it canceled the program entirely last year. “We were just kind of floating along and couldn’t handle the extra expense.”

The Byrums borrowed enough through their reverse mortgage to pay off what they owed on their 5-year-old loan and put another $10,000 into a savings account they could use in case of an emergency.

Frances Byrum said this was a huge boost for their financial situation, and keeping their house made it possible for the couple to take in her daughter and grandson when the two of them needed a place to live.

“Where would we be if we hadn’t done it?” she said.

Nelson said most of the people she sees through her counseling service have an existing mortgage on their house and can keep up with its payments until an unforeseen expense, or in some cases the death of a spouse, pushes them over the edge financially.

She said reverse mortgages help people in these situations because they give the borrower a chance to wipe out what’s left on the standard mortgage.

The rise

When the real estate market tanked after the housing crash in 2008, people simply didn’t have enough equity — the appraised value of a house minus its mortgage debt — to qualify for a reverse mortgage. That, though, is changing, Nelson said.

According to a report from the Beacon Appraisal Group, the median price for a home in Bend climbed by more than 73 percent from $186,000 in January 2012 to $322,000 in January 2015 (the median price has since dipped slightly). The median sale price for a home in Oregon climbed by only 22 percent during that time, which is a sign people may still not see a huge increase in the amount of equity in their homes statewide and one of the reasons reverse mortgage volume is low statewide.

Frances Byrum said she saw a 20 percent increase in the value of her southeast Bend home between the time she got her traditional mortgage in 2009 and her reverse mortgage in 2014.

Melton, with Director’s Mortgage, said the improving housing market is probably the biggest reason there was an uptick in the county’s reverse mortgage volume last year. He said borrowers are also learning more about how the product works and that its uses aren’t limited to homeowners who have fallen on hard times.

“There’s lots of scenarios where a person might use it,” he said, explaining he gets a lot of referrals from attorneys, accountants and financial planners who think a reverse mortgage might be a good fit for their clients.

Melton said he’s helped people get a reverse mortgage so they can pay for a vacation, buy a new car or give their grandchildren some extra money so they can go to college. Some of his clients live off the interest they get from a trust and would rather borrow against their home’s equity than reduce the trust’s principal and the amount of income they get each year.

Mike Dawson falls into this second category of reverse mortgage borrowers. Three years ago, Dawson and his wife, Tina Jiang, bought a three-story house off Cooley Road they planned to renovate and sell to raise a substantial amount of money for their retirements. But they ran out of money before they could finish the project and turned to a reverse mortgage because given their circumstances, it was the only loan that they could get.

“We’re retired,” said Dawson, who couldn’t find a bank in Oregon that would give him a no-documentation loan. “We have no income outside of Social Security but we have plenty of equity in our home.”

This article was originally published in The Bulletin on Oct. 23, 2015

447 thoughts on “Reverse mortgages on the rise in Deschutes County

  1. Pingback: SpytoStyle.Com
  2. Pingback: future university
  3. Pingback: fue
  4. Pingback: fue
  5. Pingback: fue
  6. Pingback: fue
  7. Pingback: future university
  8. Pingback: future university
  9. Pingback: fue
  10. Pingback: fue
  11. Pingback: exipure
  12. Pingback: fitness
  13. Pingback: leg curl machine
  14. Pingback: mma cage
  15. Pingback: élastiques sport
  16. Pingback: free chat avenue
  17. Pingback: chat free now
  18. Pingback: Taonga Cheats 2023
  19. Pingback: naked
  20. Pingback: leaked
  21. Pingback: porn
  22. Pingback: xnxx
  23. Pingback: Lockout Service
  24. Pingback: sunblock
  25. Pingback: valentines gift
  26. Pingback: valentine pillow
  27. Pingback: valentine pillow
  29. Pingback: 24 hour Locksmith
  30. Pingback: Mobile Legends
  31. Pingback: Click Here
  32. Pingback: Click Here
  33. Pingback: Click Here
  34. Pingback: Angry Birds 2 2022
  35. Pingback: Big Farm 2023
  36. Pingback: Star Stable game
  37. Pingback: Click Here
  38. Pingback: allure beauty box
  39. Pingback: allure beauty box
  40. Pingback: allure beauty box
  41. Pingback: allure beauty box
  42. Pingback: Allure Beauty Box
  43. Pingback: Allure Beauty Box
  44. Pingback: 37c in f
  45. Pingback: Click Here
  46. Pingback: ronnivet
  47. Pingback: bird store
  48. Pingback: hand-feeding
  49. Pingback: canary seeds
  50. Pingback: Le duo review
  51. Pingback: Click Here
  52. Pingback: Click Here
  53. Pingback: Click Here
  54. Pingback: Click Here
  55. Pingback: Click Here
  56. Pingback: Click Here
  57. Pingback: Click Here
  58. Pingback: Click Here
  59. Pingback: Click Here
  60. Pingback: Click Here
  61. Pingback: Click Here
  62. Pingback: Click Here
  63. Pingback: best skincare
  64. Pingback: best beauty 2023
  65. Pingback: allure beauty box
  66. Pingback: best beauty 2023
  67. Pingback: Click Here
  68. Pingback: allure January
  69. Pingback: allure January
  70. Pingback: Click Here
  71. Pingback: Click Here
  72. Pingback: Click Here
  73. Pingback: spaceros
  74. Pingback: Click Here
  75. Pingback: Click Here
  76. Pingback: Click Here
  77. Pingback: Click Here
  78. Pingback: Click Here
  79. Pingback: Click Here
  80. Pingback: Click Here
  81. Pingback: emigrar a Canada
  82. Pingback: emigrar a Canada
  83. Pingback: Click Here
  84. Pingback: Click Here
  85. Pingback: Click Here
  86. Pingback: Click Here
  87. Pingback: 슬롯사이트
  88. Pingback: florarie florisis
  89. Pingback: florisis
  90. Pingback: florisis online
  91. Pingback: Click Here
  92. Pingback: Click Here
  93. Pingback: Click Here
  94. Pingback: Click Here
  95. Pingback: Click Here
  96. Pingback: Click Here
  97. Pingback: Click Here
  98. Pingback: Click Here
  99. Pingback: Click Here
  100. Pingback: Click Here
  101. Pingback: Click Here
  102. Pingback: Click Here
  103. Pingback: Click Here
  104. Pingback: Click Here
  105. Pingback: Romance Flowers
  106. Pingback: Städfirma
  107. Pingback: skolstädning
  108. Pingback: fönsterputsning
  109. Pingback: veckostädning
  110. Pingback: cheap iron account
  111. Pingback: Refer A Friend
  112. Pingback: formation agents
  113. Pingback: Terra Luna
  114. Pingback: cold wallet crypto
  115. Pingback: Google reviews
  116. Pingback: casinos
  117. Pingback: 슬롯사이트
  118. Pingback: dad jokes meme
  119. Pingback: 2023 Books
  120. Pingback: death
  121. Pingback: online memorial
  122. Pingback: deles
  123. Pingback: deles
  124. Pingback: deles
  125. Pingback: IRA Empire
  126. Pingback: traveling sons
  127. Pingback: sons games
  128. Pingback: little kids stuff
  129. Pingback: shoes
  130. Pingback: Solid Wood Chair
  131. Pingback: buy cheap sex doll
  132. Pingback: Torso sex doll
  133. Pingback: bitcoin news
  134. Pingback: Fishdom 2023
  135. Pingback: Chirurgie Tunisie
  136. Pingback: best startup books
  137. Pingback: Triangles
  138. Pingback: Triangle
  139. Pingback: 30 60 90 Triangles
  140. Pingback: 30 60 90 Triangles
  141. Pingback: Triangle
  142. Pingback: Jaipur luxury tour
  143. Pingback: Damac hills
  144. Pingback: Higher education
  145. Pingback: Marketing program
  146. Pingback: Bureaucracies
  147. Pingback: Centrifuges
  148. Pingback: GPA Calculation
  149. Pingback: Sedation Dentistry
  150. Pingback: future university
  151. Pingback: MBA tuition fees
  152. Pingback: Dental clinics
  153. Pingback: Academic Advising
  154. Pingback: sms onay
  155. Pingback: steroid sat脹n al
  156. Pingback: ozempic fiyat脹
  157. Pingback: steroid sat脹n al
  158. Pingback: pull ups
  159. Pingback: magasin crossfit
  160. Pingback: butterfly pecs
  161. Pingback: Fiverr Earn
  162. Pingback: Fiverr Earn
  163. Pingback: Fiverr Earn
  164. Pingback: Fiverr Earn
  165. Pingback: Fiverr Earn
  166. Pingback: Fiverr Earn
  167. Pingback: Fiverr Earn
  168. Pingback: Fiverr Earn
  169. Pingback: Fiverr Earn
  170. Pingback:
  171. Pingback:
  172. Pingback:
  173. Pingback:
  174. Pingback:
  175. Pingback: shipping broker
  176. Pingback: flatbed broker
  177. Pingback: Dossseer
  178. Pingback:
  179. Pingback: french bulldog
  180. Pingback:
  181. Pingback:
  182. Pingback: chocolate frenchie
  183. Pingback: chiweenie dog
  184. Pingback: dog kennel
  185. Pingback: jute rugs
  186. Pingback: SEO in Kuwait
  187. Pingback: Piano Removals
  188. Pingback: greek life jewelry
  189. Pingback: bikini
  190. Pingback: clima hoy ny
  191. Pingback: 18k gold plated
  192. Pingback: future university
  193. Pingback: future university
  194. Pingback: future university
  195. Pingback: future university
  196. Pingback: future university
  197. Pingback: BoostGrams
  198. Pingback: slot nexus
  199. Pingback: Fiverr.Com
  200. Pingback: Fiverr.Com
  201. Pingback: Fiverr
  202. Pingback: Warranty
  203. Pingback: Piano trade-in
  204. Pingback: FUE
  205. Pingback: FUE
  206. Pingback: FUE
  207. Pingback: FUE
  208. Pingback: FUE
  209. Pingback: FUE
  210. Pingback: Storage solutions
  211. Pingback: Storage solutions
  212. Pingback: Moving company
  213. Pingback:
  214. Pingback: FiverrEarn
  215. Pingback: FiverrEarn
  216. Pingback: FiverrEarn
  217. Pingback: FiverrEarn
  218. Pingback: FiverrEarn

Comments are closed.