Author: Preferred Customer

Volume 18 Issue 5 May 2024

This Newsletter
Is brought to you by:

John Doe
Senior Loan Officer
Ajax Mortgage
111 Mortgage Way
Mortgagetown, MD, 11111
(301) 555-1212
(800) 555-5555
Ajaxmrtg.com

Specializing in
Residential Purchases
Residential Refinances
Commercial Properties
Home Equity Loans

More Jobs Than People?

Every month we have been singing the same refrain – the job market is hot. Except there is a limit to the number of jobs that can be created. And not every person qualifies for every job. For example, if there are many job openings for doctors, it is not likely that most of us can apply. In other words, the unemployment rate is not likely to drop to zero. On the other hand, we can’t create more jobs than the employable population. So, let’s take a look at our history.
For the decade of 2011 to 2020 the economy added just over 20.0 million jobs, or approximately 200,000 per month. For a perspective, we lost between 8.0 and 9.0 million jobs in the previous two years during the Great Recession. Therefore, some of this was “catch-up” as we started that decade with a high unemployment rate and ended it with a low unemployment rate. This decade we started the exact same way due to the pandemic recession. We lost almost 9.0 million jobs in 2021. Because of the pandemic, the recovery was much faster, and we have gained over 14.0 million jobs in the past two and a third years, bringing the
unemployment rate right back down.
Seem like too many jobs? Not really, if you take a normal year of 1.5 to 2.0 million jobs gained and subtract the 9.0 million jobs we had lost in 2021 from 14.0 million gained, we are now just about caught up. We have added 5.0+ million jobs net in the past three and a third years. Why does it seem like too many jobs were added? For one, many left the work force during the pandemic which brought down the labor participation rate. This rate has been coming back slowly and is just now approaching the rate seen just before the pandemic – alleviating some of the job shortages. Thus, the answer is that we have not created too many jobs. But if we keep adding at this rate, we could be asking the question again.....q

Continued on Page 3

Did You Know…
Zillow research shows that more than 80% of prospective home buyers consider climate risks as they shop.
Although this trend is seen across generations, Millennial and Gen Z shoppers – who comprise 54% of all home buyers – are more likely to consider climate risk when deciding where to buy a home compared to other generations.

Selected Interest Rates
April 18, 2024
30 Year Mortgages———7.10%
2023 High (Oct 19)—–—–—7.79%
2023 Low (Jan 26)———6.09%
15 Year Mortgages———6.39%
10 Year Treasuries—–—–4.63%
Sources—Fed Reserve, Freddie Mac
Note: Average rates do not include
fees and points. Information is
provided for indicating trends only
and should not be used for
comparison purposes.

In This Issue

P2 The Mom & Dad Advantage || P2 How Heirs Should Handle a Reverse Mortgage After Death
P3 More Jobs Than People? || P4 Aging in Place
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The Mom
& Dad
Advantage

More than one-third (36%) of Gen Zers and millennials planning to purchase a home soon expect to get a cash gift from family to help fund their down payment, according to a new survey from Redfin. Young homebuyers are also getting financial assistance from family members in different ways.
Approximately one in every six (16%) Gen Zers and millennials say they will utilize an inheritance to help fund their down payment, while roughly 13% intend to live with their parents or other family members to save money for down payments. “Nepo-homebuyers have a growing advantage over first-generation homebuyers. Because housing costs have soared so much, many young adults with family money get help from Mom and Dad even when they have jobs and earn a perfectly respectable income,” said Redfin Chief Economist Daryl Fairweather. “The bigger problem is that young Americans who don’t have family money are often shut out of homeownership. Many of them earn a perfectly good income, too, but they aren’t able to afford a home because they’re at a generational disadvantage; they don’t have a pot of family money to dip into. This contributes to wealth inequality and often prevents young people from gaining economic ground.” ......q
Source: Mortgage Point

How Heirs Should Handle a...

I’m constantly hearing from heirs of reverse mortgage holders who are wondering what they should do now that the last borrower on the loan has passed or had to move to assisted living. Many heirs have no idea what their options or obligations are or how long they must do them.
If you have a reverse mortgage or have a family member who has a reverse mortgage, you need to arm yourself with this information. Even if you or your relative is not ready to move out of their reverse mortgaged property now, this can save you or your family a lot of grief later.
Do These Things Now Before the Borrower Leaves the Home
The loan becomes due and payable when the last original borrower permanently leaves the property. There are a lot of things you can do before the mortgage holder leaves the home to help make the process smoother later.
Most people are not aware that the lender has restrictions – the lender cannot deal with anyone who is not authorized to speak with the lender on the borrowers’ behalf due to financial privacy laws. Reverse mortgage borrowers should contact their lender as soon as they know who will be settling their affairs, give the lender written authorization to communicate with their heirs on all things relating to the loan and authorize them to act on all things relating to the loan. Borrowers can add anyone to the title at any time without affecting the loan if at least one of the original borrowers also remains on the title. You may also wish to consider a family trust on which your heirs are successor trustees.
Check with your estate attorney, but if your heir is already on the title before you pass or it becomes a matter of trust change and not a probation, you may be able to eliminate a huge delay for them when settling the property. It may still require a probation action, but your attorney will advise you on that. Your heirs cannot sell or take out a new loan unless they hold title to the home.
Reverse mortgage borrowers should also make sure that your heirs know where you keep your reverse mortgage statements. They will need to access them later.
Heirs Should Act Deliberately But Without Delay
Once the time comes that the borrower has left the home and the heirs must make a decision to keep the home, sell it or let the lender take it back, the heirs need to be able to do so quickly so that excessive interest and fees do not add up and they do not risk foreclosure (assuming they do not intend to surrender the home to the lender). Interest accrues the entire time the loan remains outstanding, so the balance keeps rising during this time. If the lender begins foreclosure, that action adds costs to the payoff should the heirs decide to keep or sell the home.
The best initial step is for heirs to take the most recent reverse mortgage statement the borrower received from the lender and review the outstanding balance on the statement (hence why we talked about knowing how to access them). Contact a local real estate professional and determine from local sales of similar homes the most probable selling price of the home.
If there is still equity in the home, it would be in the heirs’ best interests to sell the home or keep the home. But heirs can only immediately sell the home or begin the process to place a new loan on the property if they hold the tile.
What If The Heirs Want to Keep the Home?
If the heirs want to keep the home (with or without equity), they must decide to repay the reverse mortgage. This probably will require a new loan to repay the existing loan, unless they have the cash available.
To place a new loan on the property or to sell it, the heirs will still need to have the title transferred into their own names if that was not resolved previously. Remember, under the reverse mortgage, heirs can choose to repay the loan at the amount owed or 95% of the current value, whichever is less. If the heirs want to keep the home, they will never have to repay more than 95% of the value of the home regardless of the loan balance.
If the heirs do not wish to keep the home, they can choose to walk away from the home, and the lender can look to neither the heirs nor the estate to repay the obligation – just the property. The lender would take the property by foreclosure, or the heirs could deed the property back to the lender in lieu of foreclosure. (There are no bad credit implications whatsoever to heirs for such an action.) If heirs choose to let the lender take the home at this point, this is a choice they can freely make, but not one they have to make out of desperation.
By having the authorization granted, the title cleared and the heirs ready to act quickly and knowledgably when needed, heirs are not frustrated or overwhelmed when the time comes that they must act. All the roadblocks can be removed in advance so that heirs can make an unhurried decision, free from the pressures of looming foreclosure. The effects of advance planning can mean not only peace of mind, but also savings of thousands of dollars in unnecessary fees due to delays and foreclosure actions.…q
Source: Forbes

“…Many heirs have no
idea what their options
or obligations are…”

Page Two

…Reverse Mortgage After Death
Continue from Page 2

More Jobs Than People?...
Continued from Page 1

“...there is a limit to the number of jobs that can be created...”

©2024, All rights reserved
The Hershman Group www.originationpro.com
1-800/581-5678

Page Three

My goal is to
provide expert
advice and
direction for my clients with an overall goal of providing a real estate finance transaction that exceeds their
goals and
expectations.
— John Doe
Senior Loan
Officer

Aging in Place

The number of older Americans planning to remain in their current homes as they age is increasing, according to recent data released by Redfin. The real estate company surveyed baby boomers (60-78 years old) and a small segment of the silent generation (ages 79 and up) in February 2024.
Findings indicate that 78% of older homeowners plan to stay in their current homes as they age. The next most common plan is moving to a 55-plus community, with 20% of respondents planning to or having already done so. A smaller group (10%) said they plan to move in with adult children, and 6% plan to move in with friends. There were 838 respondents representing the baby boomer generation and 62 respondents from the Silent Generation, all of whom are homeowners. The results from baby boomers who rent their homes were similar, according to Redfin analysts.
“Aging in place is already contributing to the housing shortage and is likely to continue doing so. The fact that the vast majority of baby boomer homeowners plan to age in place could prolong the shortage of homes for sale,” Redfin data journalist Dana Anderson commented in her report. Freddie Mac surveyed 55 and older on their housing plans in 2021, comparing the results with the same survey performed in 2016. In 2016, 63% of respondents planned to age in place, while that percentage increased to 66% in 2021. Baby boomers staying put is one reason inventory remains at historic lows, according to a separate Redfin analysis...q
Source: National Mortgage Professional
Source: Fast Company

In This Issue:
More Jobs
Than People?

Joe Customer
Joe’s Appliance Center
111 Center Way Drive
Suite 1005
Happyville, VA 20000

Address Correction Requested

John Doe
Senior Loan Officer
Ajax Mortgage
111 Mortgage Way
Mortgagetown, MD, 11111
(301) 555-1212
(800) 555-5555
Ajaxmrtg.com