Scott Tucker's Reverse Mortgage Marketing Blog

"Shouldn't reverse mortgages allow repair set-aside money released in draws?"

I just closed a reverse mortgage on Friday, where the folks need nearly $5,000 in work done to the house, post-funding.

I had a licensed contractor go out and quote it, and they can either choose to have him do the work for them, or the husband, who just retired from doing maintenance work for the Chicago Housing Authority, can do all the work himself, if he wants to save a few bucks.

Everytime I have a contractor go out and quote a job, I hear the same gripe, "what do you mean I can't get ANY money until ALL the work's been done and inspected?"

"You mean I can't get a draw for materials? No draw for partial labor?"

Contractors can't seem to come to understand that although the money for repairs is escrowed in a
set-aside account, by the reverse mortgage servicer, that there ain't nothin' I can do about it: they can't get ANY money until ALL the work has been done and inspected.

So this poses the question: shouldn't reverse mortgages allow repair money to be released in draws for material & partial labor?

Sure seems that way to me.

Now in this reverse mortgage, I can get some money lump sum for these borrowers, and they can get materials from the lump sum money.

After the work is done and inspected, they can get the repair set-aside funds released to them.

But in many reverse mortgage transactions, like a short refinance into a reverse mortgage to avoid foreclosure, there is no extra money that we can deliver to the borrower or contractor to pay for materials and/or partial labor.

The current system of not releasing repair set-aside money in draws is not working for our seniors. And something should be done about it.

Please comment below...

Sincerely, your friend,

Scott Tucker

P.S.: This message was sent to you using InfusionSoft. Go here right now to get InfusionSoft for free!

P.P.S.: If you're not getting my monthly coaching calls, with reverse mortgage experts in the field, why not? It's only $1 to try 'er out!

"Ed McMahon: a treasure lost..."

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"Is Fannie Mae killing reverse mortgage broker profitability?"

Back in late March or so, Fannie Mae slashed the premium it would pay for the reverse mortgages it buys.

It used to be, I could do a reverse mortgage on a $400,000 house, get $6,000 from the borrower, and then get another 150 basis points (1.5%) on the delivered loan amount, from the lender.

So let's say I paid-off an existing forward mortgage of something approaching $300,000.00, and with all the bells and whistles, like appraisal and what-not, the delivered loan amount was $300,000.

In that case, I could get $4,500.00 from the lender in SRP.

But now things are far different.

I might only get 50 or so basis points (BPS or 0.5%) for the delivered loan amount.

And that, on $300,000 of delivered loan amount is only $1,500.00.

Sure, I can still get the $6,000.00 from the reverse mortgage borrower, provided the house is worth $400,000 or more, but the back-end in this example has been slashed by $3,000.00.

Or, if you consider front & back GROSS fees in this example, we've gone from $10,500.00 GROSS to $7,500.00 GROSS

Now folks who have never run a business...or who have never performed the kind of intensive, full-service, "hand-holding" financial services work that you & I do on a daily basis, might think, "what's the big deal? That's still a lot of money."

But it's not. That's right, I said it. It's not.

The reason why is the only thing that matters when it comes to keeping the doors open and the lights on is...

NET profit.

You can't stay open on GROSS receipts alone. Look at GM, Chrysler, AIG.

You have to be making a NET profit to stay in business, and to help our nation's seniors.

A lot of folks in Washington think that you can make things "less expensive" by passing a law. But the truth is that you cannot.

What you CAN do by passing a law is make things cost less for some, more for others, and make things totally unavailable for an entire group of people.

Many reverse mortgages that may have made sense to the broker in the past, no longer make sense.

That is, worse than zero NET profit, you LOSE money doing them. Ask me how I know.

Say you help a senior with a $100,000 house?

You get the $2500 minimum fee from the borrower, based upon the home value, and then...say you delivered a loan amount of $75,000, because you paid-off an existing forward mortgage, or because they took a lump sum?

And you got 50 BPS (0.5%) SRP on that delivered loan amount...

Then you only got $375 in SRP!

That's a total GROSS fee now of only $2875.

And it may have very likely cost you $3,000.00 to create the lead!

And 3 months to close!

Here's the danger for the CONSUMER: brokers now have ZERO incentive to help seniors with lower-value properties.

Please comment below to tell me what you think!

Sincerely, your friend,

Scott Tucker

P.S.: Do you need to get a handle on your lead generation and follow-up? Get InfusionSoft CRM right now for free!

"Reverse mortgages are NOT the next sub-prime..."

"Can you please give me a hand with JP Morgan Chase & Co.?" [senior in foreclosure, short refi, reverse mortgage]

Here's a press release I'm sending-out today, to try to help someone who JP Morgan Chase & Co. refuse to help...

FOR IMMEDIATE RELEASE:

CONTACT:
Scott Tucker
NewCastle Home Loans, LLC
Voice: 773-327-3094
Fax: 773-327-2842

JP Morgan Chase & Co. Refuse Reverse Mortgage Pay-Off to Save Home of Disabled Montgomery, IL Man, 74-years-old, from Foreclosure Auction; Faces June 8th Sale Date

Montgomery, IL, June 1, 2009 – Leo Bormann, age 74, is a retired bricklayer who has recently had two heart attacks and a stroke.

He can no longer work, in any capacity, and has been unable to make his mortgage payments to JP Morgan Chase & Co. for months now.

His Social Security and bricklayers pension total $1,974 per month, but JP Morgan Chase & Co. want $1,939 per month of that money just to cover the principal and interest on his mortgage.

That would only leave him with $35 per month, but wouldn’t cover his property taxes & homeowner’s insurance, let alone groceries and utilities.

JP Morgan Chase & Co. have now moved to auction his home. And on Monday, June 8th, the Kendall County Sheriff’s Office will do just that.

Local real estate investors expect the $260,000 Montgomery home to auction for just $78,000, or 30 cents on the dollar; a $182,000 loss for federally-subsidized JP Morgan Chase & Co.

But Scott Tucker, a reverse mortgage originator, at NewCastle Home Loans in Chicago says “Chase turned-down my offer to pay-them-off ‘only’ $100,000 ‘short,’ with an FHA-insured, payment-free reverse mortgage, that would leave Mr. Bormann in his home, for the rest of his life, with no monthly mortgage payments to make."

"He could even leave the house to his kids,” Tucker says.

Tucker continued, “Chase has taken taxpayer bailout money, and now they seek to kick Leo out, at age 74. And they’ll lose $182,000 at auction, but they could do the right thing, and lose ‘only’ $100,000 on a short refi’ into a reverse mortgage. It’s just plain cruelty and elder abuse if you ask me.”

“Leo’s Social Security and pension are more than enough to cover his property taxes, homeowner’s insurance, groceries, and utilities. It’s Chase’s $1,939 mortgage payment that’s the problem,” Tucker says.

OTHER CONTACTS FOR THIS STORY:

Kendall County Sheriff Richard A. Randall: 630-553-7500

U.S. Rep. Bill Foster, attn: Meghan Auker, 866-324-6128, meghan.auker@mail.house.gov

JP Morgan Chase & Co.: Joe Evangelisti, Media Relations: joseph.evangelisti@jpmchase.com

Pierce & Assoc., PC (represents Chase), Ms. Milton, 312-476-5840, CMilton@atty-pierce.com

ABOUT SCOTT TUCKER – Scott Tucker is the Author of Reverse Mortgages…from Z to A (Advantage Media, July 2009, $14.99), a Member of the National Council on Aging, the National Reverse Mortgage Lenders Association, and Life Member of the VFW and American Legion. Tucker is an active duty Veteran of the U.S. Navy. Tucker is a reverse mortgage originator for NewCastle Home Loans, LLC, a Chicago company. He may be reached at 773-327-3094.
- END –

Any help you could lend, would be much appreciated. I could especially use contact info for an executive at JP Morgan Chase & Co. who could approve this short refi.

Sincerely, your friend,

Scott Tucker
NewCastle Home Loans, LLC
Voice: 773-327-3094
Fax: 773-327-2842

"E-mail Governor Pawlenty TODAY to veto SF 489/FH 528!" [reverse mortgage 10-day right-of-rescission]

There's a bill, SF 489/FH 528, on Governor Pawlenty's desk that would impose a 10-day right-of-rescission on reverse mortgages written in Minnesota.

This would of-course cause loans to fund, per federal law (RESPA), after 3-days, but still give the senior the right to cancel their reverse mortgage AFTER they've gotten the reverse mortgage lender's money.

In 48% of all reverse mortgages, an existing "forward" mortgage is paid-off, on behalf of the senior, by the reverse mortgage lender, to erase their monthly mortgage payments, for the rest of their life.

But if the Governor signs SF 489/FH 528 into law, reverse mortgage lenders would have to somehow "un-pay-off" those forward mortgages, and other debts the senior elected to have paid-off, from their reverse mortgage proceeds.

Huh?

Clearly, this bill cannot work in practice, and all reverse mortgage lenders will stop lending in Minnesota, harming the state's seniors greatly.

Please call, fax, and/or e-mail Governor Pawlenty TODAY, and urge him to veto SF 489/FH 528.

Here's his e-mail address.

Sincerely, your friend,

Scott Tucker

P.S.: Please sign-up for my monthly reverse mortgage newsletter.

P.P.S.: Please buy Christopher Cruise's e-book on reverse mortgages.

"How to fill reverse mortgage seminars..."

A lot of folks ask me how I get most my reverse mortgage business, and how I fill my reverse mortgage seminars.

The answer to both, is that I first target by home value, shooting for $400,000.00 houses.

Then I pick a banquet hall, that can do a lunch seminar, that's in the middle of that area.

I use Google Maps to find the banquet hall. I search Google Maps for "<<ZIP Code>> banquet hall."

Get it?

Then I send postcards to folks that are a certain radius around that banquet hall, inviting them to a free, educational lunch seminar, on reverse mortgage.

I mail those postcards to all the folks in that area, who qualify for reverse mortgages, but don't yet have them.

Then, at the lunch seminar, I teach an educational lunch seminar on reverse mortgages, telling the folks in attendance all the pros & cons of reverse mortgages.

Telling them all the cons establishes a lot of trust, in that you're not hiding anything from them. 

Here's the outfit I use, for the list, printing, postage, & 1-800# RSVP hotline.

Ask for Ed Waldman, the head honcho over there. And please tell him I sent you.

When you do so, you'll get 500 free mail pieces, with your order of 5500 postcards.

Or, if you don't speak with Ed for some reason, please put discount code "ST509" on your order form, and he'll see to it that you get your 500 free mail pieces. :0)

Yes, there is something in it for me. But given all I've shared with you today, that's fair enough, isn't it? :-)

Please tell me what you think, by commenting below...

Sincerely, your friend,

Scott Tucker

P.S.: Please sign-up for my monthly reverse mortgage newsletter.

P.P.S.: Please buy Christopher Cruise's e-book on reverse mortgages.

 

"Here's how to get endless reverse mortgage referrals..."

You know how when you ask for "a referrals" from your reverse mortgage borrower, and you get a blank stare?

No, it's not that they didn't hear you, and they're not "losing it" either.

The problem is that you need to narrow things down a bit for them.

In Bob Burg's book, Endless Referrals, one technique he teaches for getting referrals is to ask your reverse mortgage borrower for a referral from a specific group of people that they can visualize in their minds.

Here are some examples:

1. Guys from the VFW.

2. Guys from the Masons.

3. Ladies from church.

Get it?

Please tell me what you think, by commenting below... :0)

Sincerely, your friend,

Scott Tucker

P.S.: Please sign-up for my monthly reverse mortgage newsletter.

P.P.S.: Please buy Christopher Cruise's e-book on reverse mortgages.

 

"Reverse mortgage seminars at funeral homes?"

This morning my Google News Alert for "reverse mortgage" returned to me an article from the Nashua (New Hampshire) Telegraph, about an upcoming reverse mortgage seminar in a funeral home.

Not only that, but the story indicated that they also plan on discussing financial planning, and pre-paid funeral.

After you read the article, please tell me what you think of it, by commenting below... :0)

Sincerely, your friend,

Scott Tucker

P.S.: Please sign-up for my monthly reverse mortgage newsletter.

P.P.S.: Please buy Christopher Cruise's e-book on reverse mortgages.