With an increasing number of seniors in danger of losing their homes as values continue to fall in many regions, one North Carolina non-profit organization is providing the solution by way of reverse mortgages. And it is starting to see success.
The Foundation For Homeowners, based in Raleigh, North Carolina, provides counseling services to seniors who are facing losing their homes. Through the work of four counselors, the non-profit gains referrals through reverse mortgage companies and helps seniors stay at home through reverse mortgages. The target segment is seniors who may not be able to qualify for any number of reasons, at which point the Foundation For Homeowners reaches in to assist.
“We try to remain the bridge at the time when a home is the most familiar and comfortable place to be,” says Lolita Stevenson, president of the foundation. “We focus only on those seniors that want the reverse mortgage but are not qualifying for various reasons.”
The foundation is currently counseling between 15 and 20 seniors each month, with a success rate of 70-75% who are able to obtain a reverse mortgage, Stevenson estimates.
That success is predicated on whether the borrower is willing to do the work involved to get the loan qualified, she says, but the foundation can often help to present solutions such as budget restructuring or home repairs, before the senior goes back to reapply. Sometimes the services include working with lenders to make a short sale reverse mortgage happen, although the time frame can be variable.
Through industry referrals and word of mouth, the foundation is poised to gain more counselees, who face a minimal administrative fee of $35 for the services. The funding for the foundation is private, and comes in large part from industry contributions.
“There used to be the opportunity for seniors to subordinate any differences when trying to get reverse mortgages,” says Stevenson, who has reverse mortgage industry experience. “Then the Department of Housing and Urban Development issued a mortgagee letter in 2010 that said they could no longer subordinate.”
The Foundation for Homeowners is working to fill the need.
“We will negotiate with lenders and find funding to bridge that gap,” Stevenson says.
Written by Elizabeth Ecker