Your Money: Pros and cons of reverse mortgage vs. home equity line of credit

Is a reverse mortgage right for you? Vested Land Services can help.

Karin Price Mueller writes a great column for the Star-Ledger where folks get to ask a finance or business related question.  One that intrigued me this week was this:

Q. I don’t get it. When people own their home, wouldn’t it be more advisable to get a home equity line of credit or loan than a reverse mortgage? At least a HELOC is low interest (right now) and tax deductible! If anything happens to the owner — death, bankruptcy — the funds are deducted from the sale of the house. Right?

— Curious

It's a good question because a lot of mystery surrounds reverse mortgages.  Frankly, they are not for everyone.

Here's part of the reply to Curious:

The major difference between a reverse mortgage and a home equity loan or line is that with a reverse mortgage, no payments are made by the homeowner while the homeowner remains in the home, said Howard Hook, a certified financial planner and certified public accountant with EKS Assoc. in Princeton.

Compare that to home equity loans, which are typically are amortized over a period of time whereby principal and interest is paid by the homeowner, he said. A HELOC requires interest to be paid for a period of time, and then at some point, both the principal and interest will be amortized.

I recommend you read the full column here.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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News about banking, real estate and finance

Vested Land Services LLC brings you news about banking, real estate and finance

'Bring It On,' Frank Tells Dodd-Frank Critics at Hearing
Bloomberg | July 23, 2014
It was 2010 all over again in the U.S. House Financial Services Committee. Barney Frank, the panel’s former chairman, returned to Washington today to sit before the committee and provide a feisty defense of that year’s regulatory overhaul, the Dodd-Frank Act that bears his name. The hearing split along partisan lines in support of and opposition to the wide-ranging law passed in response to the 2008 financial crisis.

Un-advertised Listings Distort Housing Inventory
CNBC | July 22, 2014
While the number of homes for sale nationwide is showing signs of inching up, inventories still remain constrained in many housing markets across the country. Could “pocket listings” — for-sale properties that aren’t marketed widely or posted on the MLS — be the real culprit?

U.S. Mortgage Applications Rise in Latest Week
Reuters | July 23, 2014
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.4 percent in the week ended July 18.

CFPB, FTC File Nine Lawsuits Against Deceptive Foreclosure Firms
HousingWire | July 23, 2014
The Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states are filings 9 lawsuits against companies and individuals that collected more than $25 million in illegal advance fees with false promises to prevent foreclosures. The CFPB is filing 3 lawsuits, while the FTC is filing 6 lawsuits.

Majority of Buyers Unaware of True Costs of Home Ownership
Realty Mag | July 23, 2014
While the majority of home buyers recently surveyed say they feel financially prepared for home ownership, many admit they aren’t sure what purchasing a home will actually cost them, according to a poll of more than 1,000 prospective home buyers conducted by Discover Home Loans.

7 Signs of a Soon-to-be-Hot Neighborhood
Inman News | July 23, 2014
Here are the top telltale signs of a soon-to-be hot market.

1 in 6 Homes Still Seriously Underwater as Home Price Growth Slows
HousingWire | July 24, 2014
Down 26% from 2013, but decline slowed with slowing price gains.

Community Bankers: CFPB Must Modify QM Rule
Mortgage Professional America | July 23, 2014
Community bankers are urging the Consumer Financial Protection Bureau to revise the current qualified mortgage rule.

U.S. Housing Turning the Corner, Inflation Creeping Up
Reuters | July 22, 2014
U.S. home resales hit an eight month-high in June, suggesting the housing market was gradually regaining momentum and would help the economy to stay on a higher growth path this year.

HUD Ranks No. 2 Ugliest Building in Washington
Reversed Mortgage Daily | July 22, 2014
The Department of Housing and Urban Development may have made a lot of headway of late on reverse mortgage program changes and bolstering its Mutual Mortgage Insurance Fund after several years of economic turmoil, but it’s still one of the ugliest buildings in Washington, according to a Buzzfeed compilation.


Vested Land Services is a proud member of the American Land Title Association which provided the above.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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FHA program falls short on "short refis"

FHA program falls short on "short refis"

We have written in the past about the Federal government's attempts to help homeowners who find that their home is worth less than the amount of mortgage liens.

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For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

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Per The New York Times, there is "scant interest" in one of these programs- the F.H.A. Short Refi Program.

The Federal Housing Administration’s Refinance of Borrowers in Negative Equity Positions program, more commonly known as the F.H.A. Short Refi, enables borrowers who owe more than their homes are worth to refinance into an F.H.A. loan with a lower monthly payment.

Unfortunately, the Times reports that only a

only about 4,600 F.H.A. loans have been originated under the program, a far cry from the 500,000 to 1.5 million borrowers the Department of Housing and Urban Development estimated could be helped when it announced the program in 2010.

Why did this program fail?  For two reasons- first, the program is optional, and, second, the nations largest sources of mortgage money, Fannie Mae and Freddie Mac, refuse to participate in the program.

You see, in order for this program to work, the lender must waive thousands of dollars in loan principal.  And who wants to do that.  Some have suggested that TARP money be used to buy down the loan balances but that will require regulatory changes for that to happen.

In the meantime, homeowners are still behind the 8 ball.

To read more, see the full column here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Cracking down on Illegal Mortgage Referrals - the first step

As a small family operated business we often run up against the big boys in the mortgage and real estate brokerage industries. Because of company tie-ins we are often shut out of the process and consumers then pay the price for shoddy services. An article from the New York Times about the Consumer Finance Protection Bureau shows that someone is looking out for the rights of consumers to shop around for services.

Last month, the bureau ordered RealtySouth, a major real estate company in Alabama, to pay a $500,000 penalty for failing to inform home buyers that they were under no obligation to use a title and closing service affiliate. RealtySouth consented to the terms of the order without admitting or denying the bureau’s findings.

Real estate companies are allowed to refer customers to affiliates like lenders and title services so long as they also provide a written disclosure that clearly explains that customers are not required to use the affiliate and have the right to shop around. In RealtySouth’s case, the firm’s printed purchase contracts explicitly directed buyers to its affiliate, TitleSouth, and buried the required disclosures in text about the benefits of its own services, according to the bureau.

What does that mean for the consumer? In our opinion the consumer is better served when there is competition for real estate related services. A service provider cannot have two masters. It is either the tied-in party or the consumer. Who would you choose?

Read the full article here.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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5 things you should know about home inspections.

From Realty Times-
Five Things You Should Know About Home Inspections. Written by Blanche Evans.

If you're hiring someone to inspect the home you want to buy, or you're a seller trying to find out if there are any hidden problems that need fixing before you put your home on the market, here are five things you need to know:

1. You can choose your home inspector. 

Your real estate professional can recommend an inspector, or you can find one on your own. Members of the National Association of Home Inspectors, Inc. (NAHI), must complete an approved home inspector training program, demonstrate experience and competence as a home inspector, complete a written exam, and adhere to the NAHI Standards of Practice and Code of Ethics.

2. Home inspections are intended to point out adverse conditions, not cosmetic flaws.

You should attend the inspection and follow the inspector throughout the inspection so you can learn what's important and what's not. No house is perfect and an inspection on any home is bound to uncover faults. A home inspector will point out conditions that need repair and/or potential safety-related concerns relating to the home. They won't comment on cosmetic items if they don't impair the integrity of the home. They also do not do destructive testing.

3. Home inspection reports include only the basics. 

A home inspector considers hundreds of items during an average inspection. The home inspection should include the home's exterior, steps, porches, decks, chimneys, roof, windows, and doors. Inside, they will look at attics, electrical components, plumbing, central heating and air conditioning, basement/crawlspaces, and garages. 

They report on the working order of items such as faucets to see if they leak, or garage doors to see if they close properly. Inspectors may point out termite damage and suggest that you get a separate pest inspection. The final written report should be concise and easy to understand. 

4. Home inspectors work for the party who is paying the fee. 

The NAHI Standards of Practice and Code of Ethics clearly state that members act as an unbiased third party to the real estate transaction and "will discharge the Inspector's duties with integrity and fidelity to the client." A reputable home inspector will not conduct a home inspection or prepare a home inspection report if his or her fee is contingent on untruthful conclusions.

The inspector should maintain client confidentiality and keep all report findings private, unless required by court order. That means it is your choice whether or not to share the report with others. If you're a seller, you don't have to disclose the report to buyers, but you must disclose any failure in the systems or integrity of your home.

5. Inspectors are not responsible for the condition of the home. 

Inspectors don't go behind walls or under flooring, so it's possible that a serious problem can be overlooked. Keep in mind that inspectors are not party to the sales transaction, so if you buy a home where an expensive problem surfaces after the sale, you won't be able to make the inspector liable or get the inspector to pay for the damage. In fact, you may not be entitled to any compensation beyond the cost of the inspection.

As a buyer, you need the home inspection to decide if the home is in condition that you can tolerate. You can use the report to show the seller the need for a certain repair or negotiate a better price. You can also take the report to a contractor and use it to make repairs or to remodel a section of the home.

One thing you should not do when buying a home is skip having the home inspected because of cost or undue pressure by the seller. A home inspection is reasonable, it can save you money in the long run, and it's required by many lenders, particularly for FHA loans. There's a reason why buyers should beware, and a home inspection gives you the information you need to make a sound buying decision.

Read the article.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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