For Immediate Release

GENERATION MORTGAGE COMPANY BECOMES BETTER BUSINESS BUREAU ACCREDITED, EARNS A+ RATING

ATLANTA, Dec. 15, 2009-Generation Mortgage Company™, America’s largest privately owned reverse mortgage retailer and wholesaler, recently became a national Better Business Bureau Accredited Business. In addition, the business has earned an A+ Rating from the BBB.

“While those of us who work for Generation Mortgage know that we offer top quality service to our business partners and our boomer and senior homeowners nationwide, the rigorous Better Business Bureau accreditation process is one more way to prove that treating our clients fairly and honestly is the primary goal of our organization,” said President and CEO Scott Peters, Generation Mortgage Company. “We’re incredibly proud to have achieved the highest rating possible upon accreditation.”

Better Business Bureau ratings are determined by a proprietary formula. The organization grades from A to F with pluses and minuses. A+ is the highest grade and F is the lowest. The grade represents the Better Business Bureau’s degree of confidence that the business is operating in a trustworthy manner and will make a good faith effort to resolve any customer concerns. Details as to any issues identified by the Better Business Bureau are contained in each organization’s Reliability Report.

Businesses that apply for Better Business Bureau accreditation undergo a detailed review and commit to abide by a set of ethical standards for marketplace conduct. After accreditation, each business is monitored for continued adherence to BBB standards.

Licensed in nearly 50 states, Generation Mortgage offers FHA-insured HECM (Home Equity Conversion Mortgage) loans. The company is an Equal Housing Lender and a member of the National Reverse Mortgage Association.

About Generation Mortgage
Generation Mortgage Company is one of the nation’s leaders in reverse mortgage lending, and a member of NRMLA (National Reverse Mortgage Lenders Association). With its sole focus on reverse mortgages, Generation Mortgage Company offers seniors “A New Generation in Reverse Mortgages™” and pledges to deliver outstanding customer service, as exemplified by its loan Servicing – Generation services all its reverse mortgage loans and does not outsource them. For more information, visit www.generationmortgage.com.

Equal Housing Lender. NMLS #1319; Arizona Mortgage Banker License #0909296; Georgia Residential Mortgage Licensee #22292; 3 Piedmont Ctr, 3565 Piedmont Road NE, Ste 300, Atlanta, GA 30305; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act; In CT, licensed and DBA as Generation Reverse Mortgage, Inc.; Illinois Residential Mortgage Licensee # MB.6760368; Kansas Licensed Mortgage Company License #MC.0001660; Massachusetts Mortgage Lender-ML3240; ME License #SLM9169; Licensed by the Mississippi Department of Banking & Consumer Finance; Licensed by the New Hampshire Banking Department as Generation Mortgage Company d/b/a Generation Mortgage Company, Inc; Licensed at 51 JFK Parkway, Suite 114, First Floor West, Short Hills, NJ 07078, Phone # 973-218-2418 by the New Jersey Department of Banking and Insurance; NV – 800 N Rainbow BLVD, Ste 170, Room 164, Las Vegas, NV 89107, Phone #702-948-5031; Licensed by the Pennsylvania Department of Banking; Rhode Island Licensed Lender; TX SML License #68405, 27030 Masters Pkwy, Spicewood, TX 78669; Licensed by the Virginia State Corporation Commission #MC-4832; Also conducts business in AL, AR, CO, DC, DE, FL, HI, IA, LA, MD, MI, MN, MO, MT, NC, ND, NE, NM, OH, OK, OR, SC, SD, TN, UT, VT, WI, WV, WY. Not all products and options are available in all states. Terms subject to change without notice. ©2009 Generation Mortgage Company. All Rights Reserved.

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A reverse mortgage, or Home Equity Conversion Mortgage (HECM), can be a  great way to provide a solid financial future for yourself and your family. One thing that can make refinancing your home by doing a reverse home mortgage is if the lending limits in your area have increased. If you have had your reverse mortgage for a couple of years, it may be possible that the current lending limits could enable you to receive a lot more money. A year ago, the lending limit was raised from $417,000 to $625,500. This meant that whatever your home’s value was, you could not have received more than $417,000 for it. Now that it is raised – but only through January 1, 2010, you may be entitled to more money since the limits have been raised.

Interest rates can be a concern with any kind of loan, with a reverse mortgage loan, the higher the interest is the more that the balance will be reduced. When the interest rates on a reverse mortgage decrease, it enables you to have a cash flow longer. With the economy indicating that things might be getting better, the result could mean that your home’s value may be going back up. A higher value means that you will be able to receive more money if you refinance your HECM.

To ensure you are getting a better deal than what you already had. A government form  must be filled out by the reverse mortgage agent, called a “Home Equity Conversion Mortgage Anti-Churning Disclosure.” Its purpose is to actually calculate and record how much of a difference will be gained by the new HECM. The government dictates that you must gain at least three to five times as much as the cost that will be generated from it. There are some exceptions to this rule. If that is not going to happen, you will need to go through counseling for the HECM again

http://www.apply4reversemortgage.com

Latterly I originated a loan for a gentleman, Mr. Smith for the purpose of this article, who at first was terribly evasive about what he owed on his home. When Mr. Smith applied on my internet site he input that his home was free and clear. In our 1st conversation he reiterated that his home was free and clear. Later, he interpreted his statement and said that his home would be free and clear before we closed his new loan. That statement struck me as odd, so in my subsequent conversations I sought to discover exactly what he was talking about. What I discerned was that though Mr Smith had a vast awareness of reverse mortgages from his research, somewhere along the line he was given the wrong info about one aspect of the loan. He was under the misconception that his home needed to be free and clear to get a reverse mortgage

Media coverage of reverse mortgages has grown tremendously in the past few years, yet even with assistance from NRMLA ( national Reverse mortgage corporations organisation ) there are still several misconceptions about the product. Mr. Smith’s plan was to have his boy pay off his existing $162,000 mortgage prior to originating his new reverse mortgage. He was happy to learn that was a pointless step. After it closed, he planned on repaying as much as possible to his child from the loan proceeds.

Mr. Smith didn’t qualify for enough cash with the reverse mortgage to repay his entire loan. He was fortunate that his boy had the money available to gift him the difference of approximately $19,000. Understand that with a reverse mortgage all liens against the property need to be paid first. If there’s money left over then the borrower has the option to use the proceeds however they see fit. If there is a deficit, like the case of Mr. Smith, the borrower will need to cover the difference at closing. That may be done by use of the borrowers own funds or present. With a HECM ( Home Equity Conversion Mortgage ), borrowers can’t attract new debt to obtain their loan.

These misconceptions must be cleared up because plenty of people who should be doing a reverse mortgage won’t be doing one, simply because they had been given fake info at some specific point in their research or talks with pals and family. If Mr. Smith’s son did not have the fiscal wherewithal to pay down his dads loan, I am awfully certain that Mr. Smith would have written off the idea of a reverse mortgage and perhaps would have lost his home. The point learned is to consult a professional reverse mortgage advisor to be certain all is understood about this product.
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Since its inception when HUD started insuring reverse mortgages 20 years ago, anyone considering a reverse mortgage must receive counseling from a 3^rd party HUD approved counselor.  Now effective this October a new protocol has been put into affect.  To remain on HUD’s Counseling Roster, counselors must have passed the National HECM (Home Equity Conversion Mortgage) Counseling Exam.  Only counselors who are employees of HUD-approved housing counseling agencies can take the exam and then be eligible to counsel potential reverse mortgage borrowers.  Additionally they must have completed at least one HECM related training course within the past two years and meet some background check requirements.

With the intention to keep lenders from influencing counselors, lenders are required to provide potential borrowers with a list of 10 counselors, 5 are to be local and the additional 5 are the national counseling agencies.  Also according to HUD’s requirements lenders are prohibited to provide only one or two counselors and/or steering to a particular counselor.

The purpose of the third party counseling is to make sure potential borrowers are familiar with the terms of the loan, the costs, and advise them of other potential options.  The advantages can be if the potential borrowers have not talked with a lender or a lender has not provided the details they are getting the basics of the reverse mortgage.  If they have talked with a lender and the lender has done a good job explaining the reverse mortgage, the counselor will reiterate what the lender has explained.  Counseling sessions should generally take about an hour and HUD allows counselors to charge up to $125 commensurate with the time of the counseling session.

Through the years we, the ethical lenders,  have been amazed how counselors have not followed HUD’s requirements, steered to particular lenders, told borrowers they shouldn’t do the reverse mortgage, how they should take their reverse mortgage funds, charged the full allowable amount of $125 for only 15 minutes of counseling time, and a number of other violations of HUD’s regulations.

When we from Prestige Mortgage, LLC, Reverse Mortgages SIDAC, meet with our prospective borrowers we usually take an hour to two hours going through the details and the calculations, reviewing their situation and discussing options for their situation.  After the counseling session when we ask our borrowers how the counseling session went, we consistently hear, “They covered just what you did.”  This means our borrowers have received enough education to have a good understanding of the loan.

Besides the new protocol to be a counselor, there will be a new protocol for the counseling session.  Prior to the counseling session HUD is requiring that prospective borrowers receive calculation pages comparing programs, the amortization schedules, the Total Annual Loan Cost (TALC)  and a booklet titled, “Use Your Home to Stay at Home” published by the National Council on Aging.

From what we understand counselors will be doing a financial analysis.  Additionally counselors will be asking 10 questions in which borrowers will need to answer at least 5 correctly in order for them to receive the counseling certificate.  If they can’t answer the questions correctly then they will not receive the certificate and will need to wait a minimum of 7 days and then go through another “limited” counseling session to review the topics they didn’t understand.  And if counselors feel the prospective borrowers don’t comprehend the basic reverse mortgage details, they can withhold the counseling certificate.

The intention is to help borrowers assess their situation and whether the reverse mortgage is right for their financial situation.  While on the surface this sounds like a good idea, the concern is whether the counselor will be passing along their opinion and not letting the borrower really make their own decisions and withholding the counseling certificate if they choose based on their opinion.  This has happened in the past with counselors telling borrowers they should cut back on getting their hair done, not using the proceeds for a trip, shutting off their cable TV, etc..  I believe the discussion should be held however, the final decision should still be the borrowers.  And we have to consider what provides seniors their security, independence, dignity, control and choices of their life.  Visit my Blog articles: “Who Are We To Judge How Reverse Mortgage Funds Should be Used?”  and “Is Your Opinion of Reverse Mortgages Denying Seniors?”

I’m proud that we take so much time educating our borrowers and discussing their situation and options so they can make their decision based on the facts of the reverse mortgage.  Also that they have the information and knowledge to be able to answer the questions they will be asked during the counseling session.

With the new protocol of the counselors, I believe (hope) the best counselors will remain and the counseling sessions will provide the education without the opinions of the counselors being shared.  I also hope that the counselors will be following the required protocol knowing that if they don’t HUD is likely to pull their ability to counsel.  Time will tell if the new protocol of the counselors and the counseling session will benefit borrowers or make it more cumbersome and/or discouraging for the borrowers.

The best I can do is continue to educate borrowers on the facts of reverse mortgages, discuss their situation and options and respect them to make the decision best for their own situation and have the information they need when they go through the counseling session.

© 2009 Beth Paterson http://BethsReverseMortgageBlog.wordpress.com 651-762-9648