Announcer: Welcome to Creating Wealth with Jason Hartman, President of Platinum Properties Investor Network in Costa Mesa, California.  During this program, Jason is going to tell you some really exciting things that you probably haven’t thought of before and a new slant on investing, fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible.

Jason is a genuine self-made multimillionaire, who not only talks the talk, but walks the walk.  He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities.  This program will help you follow in Jason’s footsteps on the road to financial freedom.  You really can do it.  And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.

Jason Hartman: Hello and welcome to another edition of the Creating Wealth Show.  This is your host, Jason Hartman and this is Show No. 91.  Thanks for joining us today.

First of all, we wanted to tell you about a couple of upcoming events.  We have a totally new workshop.  This will be the first time and we hope you’ll join us on Thursday, March 19, for the financial self-defense workshop.  This will be a very interactive workshop with a different room arrangement.  So if you are a regular listener, if you’ve attended our other events, this one will be where we put the tables in a U-shape around the room and it will be very interactive.  There will be a lot of exercises and interactive things where you’ll roll up your sleeves and be fully engaged.

So it should be a very interesting night.  That’s Thursday, March 19, here at our office in Costa Mesa.  Dinner will be provided, and it’s from 6:00 – 9:00 p.m., Financial Self-Defense Workshop.  Register for that at www.JasonHartman.com\Events.

Also, our next educational event for “Creating Wealth in Today’s Economy” is Saturday, April 4, and that’s from 9:30 a.m. – 3:30 p.m.  We have breakfast, lunch, and ice cream social being served at that.  Thousands and thousands of people have been through that program and we get very good feedback on it, so we hope you’ll join us for that.

Today, we’re going to answer a few listener questions, and also have an interview with a guest, who is heading up the Reverse Mortgage Association.  If you’re not familiar with reverse mortgages, it is a very interesting and unique way to extract money from properties.

Now, this isn’t completely available for investors yet, but my prediction is that it will come to all types of properties eventually, non-owner occupied and owner occupied now.  But it is an interesting thing.  You certainly should know about it.  It mostly applies to seasoned citizens, people who have a lot of equity in their property, but don’t want to sell their property, and want to derive income from the property.  So it’s just an interesting take even if it doesn’t apply to you.  It’s a pretty creative type of financing and you should be aware of it as a real estate investor.  Again, you have to be aware of things, even if you’re not using them personally, just to know about them, and to expand your knowledge.

So after Brittney asks a few of your questions, we will get on to the interview on reverse mortgages.  Hey, Brittney, how are you doing?

Brittney: Good.  Thanks for having me again.

Jason Hartman: Well, your 15 minutes of fame is lasting a long time, isn’t it?

Brittney: It is.

Jason Hartman: What’s our first question?

Brittney: Our first question is from John from Scottsdale.  John asks, “What would it take for you, Jason, to speak to a group of hundreds of investors here in Arizona?”  Now, I don’t know if I should be answering this or if Jason should be answering this, but you can give me a call if you would like to book Jason for a speaking engagement to your group, association, and real estate group.  You can contact me, 714-820-4267, or go ahead and shoot me an email.  That’s pr@jasonhartman.com.

Jason Hartman: Yeah, Brittney’s my public relations coordinator and she does a great job at that.  And I would be happy to come out to Scottsdale, Arizona.  I had a second home in Scottsdale for a while and I love it out there.  It’s really a fun place, lots of cool stuff to do.  Never buy a second home.  I think I had that property vacant for two years and I slept there a total of 11 nights, I believe.  I finally decided to rent it out.  I still own the place.  And Arizona, by the way, hasn’t been such a great market in which to invest, depending on when you bought because that was one of the bubble markets just like California.

But you know, I’ve never lost money on a real estate deal, and that’s the great thing about your income properties.  As long as you have staying power and the property is a sustainable investment, you can keep it through the storm, and that’s exactly the plan.

So yeah, I’ll be glad to come out and speak to your group.  Just talk to Brittney and she will make arrangements.  Thanks for your interest.

Next one.

Brittney: Next question is from Mark and he’s from Tucson.

Jason Hartman: Hey, another Arizona person.  Hi, Mark.

Brittney: He says, “In this market, what is the most accurate way to figure the full cash value of a property when you have CMAs that are 3 – 6 months old of the sold properties in the subdivision that you’re buying a property to flip?”

Jason Hartman: Well, good question.  First of all, a CMA stands for either Comparative Market Analysis or Competitive Market Analysis, depending on whom you’re asking.  Residential real estate, meaning anything four units and under, is pretty much sold by comparison, whereas commercial properties are sold by the income approach.  And there is one other approach that values properties and that is the cost approach.

In fact, mentioning the cost approach, I just should throw this out there to all of you.  We have bank-owned properties and some new properties and builder closeouts from time to time that are selling below cost of actually construction.  These deals are so good that you basically get the land for free and you pay for less than the cost of actual construction.  And on that impromptu show that we did a few shows ago, where our client David Porter came in and talked to us, he talks about a story where his insurance agent for one of the properties he bought through us required him to get a lot more insurance than he actually paid for the house.  And he said, “Why?”  I’m objecting.

And they said, “Look, you bought that house so cheap.  It would cost a lot more to rebuild it and if it burns down, we’re going to have to pay to rebuild it.”  He obviously got quite a good bargain there, and the insurance cost is rather low in comparison to the incredible deal he got.  If you want one of those incredible deals, call one of our investment counselors here, contact us through the website, www.JasonHartman.com, and we will be glad to help you find investment properties well, well below the cost of construction, and essentially with free land.

So to your question, there are a lot of comparison sites you can use, like Zillow and a whole bunch of others out there, and they vary in their accuracy.  But you know what the best market analysis is for any property?  List it for sale and sell it because the ultimate market analysis is the meeting of minds between a buyer and a seller, and if you want to know what something’s worth, just sell it.  But you may not want to actually sell it, so you need to know what it’s worth anyway.

If the comps are old, you need to adjust.  You take the most recent three comparable sales and then you adjust for the market.  You may put it on the market to test the market.  It sounds like what you’re saying here is that nothing has really sold in this particular area recently.  And so, for example, if the comps say six months ago that the property was worth $200,000.00 and there are three comps and they are similar properties, similar types of locations, then the market has gone down 10 percent since then in the last six months.  Then you just take that comparable price, adjust 10 percent down, and your market value is going to be somewhere in that range.  If the market has gone up 10 percent, which it probably hasn’t in Tucson, I know unfortunately, you adjust up or down based on what the market trend in the overall city has been.  And the market trend in the overall city is pretty easy to find.

Use your judgment, but that’s really all I can tell you on that without knowing more details.  Are we done with questions?

Brittney: That’s it for now.

Jason Hartman: All right, great.  Let’s go into our short interview on reverse mortgages, and again, if this is something you can’t use personally, it’s something you definitely want to know about.  And on the next show, I’m going to be talking – no guest – just on some of the mistakes investors commonly make when investing.  I think you’ll find that interesting.  Let’s listen in to the interview now, and I hope you can join us for some of these upcoming events.  Thanks for listening.

Interview with Peter Bell

Jason Hartman: It’s my pleasure to welcome Peter Bell to the show.  Peter is President of the National Reverse Mortgage Bankers Association, and this is a very interesting topic that has not received enough mainstream press, in my opinion, and it will be interesting to hear from Peter about the reverse mortgage industry, the regulatory environment, the mechanics of the reverse mortgage, and how it works, and who it might be good for.  Peter, welcome to the show.

Peter Bell: Well, thank you, Jason, but let me before we go further correct one fact here.  Just to get the name right, we are the National Reverse Mortgage Lenders Association, not the Reverse Mortgage Bankers Association because it is lenders, who may be bankers, but may also just be lending companies that are engaged in this business.

Jason Hartman: That’s a good correction.  And you are based in Washington, D.C., which I kind of call the new financial capital of the world.  Not London or New York anymore since we have all these government bailouts and everybody flying in for money nowadays.  What’s going on in the reverse mortgage industry and maybe give us a little history on it first?

Peter Bell: Sure.  It’s actually a very interesting time to be headquartered in Washington, of course, with all the activity.  And with our particular field, in the reverse mortgage field, the federal government has been a partner for us for a long time.  We’ll get into that a little bit more later on in the interview.  But we work with a federal guarantee, a FHA insured loan that’s the primary product, so we could come back to that.

But the history of the organization is that reverse mortgages have been around for a long time, but the industry as we know it today really got going in the late ’80s when Congress passed a law to create a FHA insured reverse mortgage product, the Home Equity Conversion Mortgage program, often referred to as the HECM, the acronym for it.

In the years since that was created, the program has grown.  The past couple of years we’ve been experiencing increases in volume anywhere from 40 – 100 percent per year as more and more seniors learn about the reverse mortgage and the flexibility it provides to help address a number of different financial needs.

Jason Hartman: So if the government-sponsored program, if you will – I’m not sure I’m using the right word there – started in the ’80s with the HECM, where did the reverse mortgages really start?  I mean it’s such an innovative idea.  How long ago did we first have those?

Peter Bell: Oh, the concept goes back as far as the middle Ages, where there was a concept of people essentially selling their homes, but with a lifetime right to occupy.  So they got the money today, but still had the opportunity to stay in the homes.  And they have been very common in Europe on a relatively informal basis.  In fact, when I first got involved in this business in the mid-90’s, there was a story going around about a woman that had a beautiful apartment on the Champs-Elysees in Paris, and when she was 80, she sold it to a 65-year-old gentleman under those types of agreements, and she ended up outliving both him and his son.  So she was in the property for another 25 years after selling it at 80 years old.

So it’s been around a long time.  It came to this country probably in the ’70s, 1970s, and there was a fledgling private market in it.  And in the mid- to late ’80s, policy advocates thought of taking a looking at it, recognizing that reverse mortgages would be a useful tool for senior homeowners who often have a very significant proportion of their wealth tied up in their homes, and that many of them were living cash-constrained lives, yet they had all this wealth that was surrounding them in the house.  So the idea was to give them access to that wealth to meet their living expenses, without having to move out of the house or take on new payments.

At that point in time, policymakers decided that perhaps if the federal government stepped up to the plate and provided a credit enhancement, that a reverse mortgage product could be designed that would be more consumer friendly than what was being done in the private market at the time.

Jason Hartman: Now, are all reverse mortgages really under the FHA guidelines or are there multiple choices?

Peter Bell: At the moment, the FHA insured program is probably 97 – 98 percent of the volume that’s being done.  That had been the case until a few years ago, and then we saw the introduction of a number of proprietary reverse mortgage products, which were beginning to grow and flourish prior to the credit crunch a year and a half or so ago, and in the period since then, the proprietary products have all been withdrawn from the market.  So I imagine we will see those products reintroduced at some point in time, but for right now, the entire market really is comprised of the FHA insured reverse mortgage product.

Jason Hartman: And with the FHA product, what is the maximum loan amount?

Peter Bell: Loans are underwritten based on the value of the property, and there is an FHA loan limit that kicks in.  So they’re based on the lesser of the actual value of the property or the maximum FHA loan limit.  Today, the current FHA limit is $417,000.00 across the country, with exceptions for a few areas in Hawaii and Alaska where there are higher limits.

And the legislation pending in Congress now, the economic stimulus bill, actually has, in the House version that’s pending, an increase from $417,000.00 to $625,500.00.  That’s not in the Senate version, so we’re waiting to see how that comes out of conference.

Jason Hartman: So it really just follows the regular FHA loan limits for a purchase, for example, then.

Peter Bell: More or less.  At the moment, the forward mortgage FHA limits are a bit higher than that.  Right now, they’re at $625,500.00, whereas the reverse is at $417,000.00.  So depending on what happens with this legislation, we may get parody with the forward mortgages, although there’s also a provision in that same building that would bring the forward mortgages from $625,000.00 to $729,000.00.

Jason Hartman: So we will wait and see what happens there.  Can you tell us a little bit about the mechanics of a reverse mortgage?

Peter Bell: In a reverse mortgage transaction, the loan is created based on two key concepts.  Let’s try to explain two key concepts that will help the listeners understand this.  The first one is what we call the maximum claim amount in HUD terms and that is lesser of the actual value of the property or the FHA loan limit for the area, which means that if a property were worth $350,000.00, the maximum claim limit would be the $350,000.00.  If a property were worth $500,000.00, the governing factor would be the $417,000.00 limit, so $417,000.00 would be the maximum claim amount.

So we start with that number, the maximum claim amount.  And then the amount of money that’s available to the borrower is what we call the initial principle limit.  So there are two terms – maximum claim amount and initial principle limit.

The initial principle limit is a percentage of that maximum claim amount, based on the borrower’s age and the lenders expectation of the interest accrual over the life of the loan.  So a younger borrower would get a smaller initial principle amount available than an older borrower would because it’s presumed that the younger borrower will have the loan outstanding longer, so therefore, there will be a lengthier period of time of interest accrual than there is for an older borrower.

And to have a rule of thumb, the percentage that’s available as the initial principle limit is roughly the borrower’s age less ten applied against the maximum claim amount.  So for a 75-year-old, they would get roughly 65 percent of the value of the property or the maximum FHA limit made available to them.

Jason Hartman: They would get the value or $417,000.00, whichever is lower, in that example, right?

Peter Bell: Right and they would get the percentage of that.  So if it’s a 75-year-old, they would get roughly 65 percent of that number, either the value or the $417,000.00.

Jason Hartman: And if they’re older, they get a higher sort of loan-to-value ratio.

Peter Bell: They would get higher.  If they were 85 years old, they would get perhaps 75 percent of that.  They could either take the full amount available upon closing the loan as a lump sum, or they could establish it as a line of credit and just call the lender to draw down money whenever they want to, or they could have the lender calculate life tenure payments, which are fixed monthly payments that would flow to them as long as they continue to live in the home as their primary residence.

Jason Hartman: Now, is there a minimum age?

Peter Bell: Sixty-two years old for the federal program.  When there were proprietary products in the marketplace, there were some that went down to 60 years old, but for the most part, 62 is the eligible age.

Jason Hartman: Tell us more.  It’s so interesting because you have to really sort of adjust your thinking when you come from the traditional world of real estate finance, where you have loan-to-value ratios.  You have no thinking about an actuarial table, which is really a major part of the underwriting guideline of a reverse mortgage, right?

Peter Bell: That is correct, yes.

Jason Hartman: In terms of the other mechanics, a lot of people have had home equity lines of credit where, recently, in this huge financial crisis we’re having, those lines have been called in.  That didn’t account for credit that was already out and being used, so if the money was borrowed, a lender could not say, hey, give it back to us, anything other than on the actual terms of that line of credit.  But if that hadn’t been borrowed yet, a lot of times the lenders are saying we’re going to cancel your line or reduce it dramatically, and this has happened to quite a few of our clients.

Any chance of that happening in a reverse mortgage?  You have that maximum claim amount, and if you didn’t take it in a lump sum, I would be kind of concerned that maybe the lender would change their mind.  Can they do that?

Peter Bell: No, there’s no provision for them doing that in the program at this point in time.  So everything is established up front and the amount available remains the amount available.  And in fact, if the client decides to structure the loan as the line of credit, there’s an interesting feature in that the unused balance in the line of credit is actually adjusted upwards each year so there’s growth in the line of credit.

For instance, if somebody had a $300,000.00 value home, and to make things simple, their age yielded them 50 percent, so they had $150,000.00 available to them, and they left that in the line of credit, a year from now, they would have more than the $150,000.00 available to them.  They’d have roughly, at today’s interest rates, roughly $158,000.00 available to them.

And essentially, what’s going on there is just like the older borrower has access to more money than a younger borrower because now they’re a year older, there’s an upward adjustment in what’s available to them.

Jason Hartman: Very interesting.  Very interesting.  What about cost, fees, processing time?  I mean I assume it’s sort of the normal deal.  They come and appraise the property and take 30 – 45 days like a traditional mortgage loan.

Peter Bell: Yes, it does take 30 – 45 days.  Thirty days would be fast.  Forty-five days would be probably typical, and sometimes, depending on whether there are trusts involved in the ownership structure of the property, it might take a little bit longer.

But yes, there is an appraisal and that’s where the numbers come from to govern the size of the transaction and in terms of fees, the fees are somewhat analogous to forward mortgage fees, where there is an origination fee, which is what the lender earns for originating the mortgage, for making the loan.  There is an FHA mortgage insurance premium that is paid to the federal government for the FHA guarantee that’s on the loan.  And then there are your typical mortgage fees.  There might be a document preparation fee, title insurance, recordation taxes that get paid to the municipality or the locality where the loan is being recorded.

So the fees are somewhat in line with what forward mortgages are.  A few differences though, sometimes in a forward mortgage, you could trade off upfront fees and have a slightly higher interest rate so that you pay those fees, in effect, each month as you make payments.  But since we don’t have any payments throughout the entire life of the loan, we don’t have the option to do that.  So all the fees are up front on the reverse mortgage.  However, they are typically paid out of the proceeds available so the borrower needn’t have any cash up front to pay.  They could all come out of the loan proceeds.

Jason Hartman: So that’s what we need to know about the process then, and the maximum loan amounts, and the minimum age available for a reverse mortgage.  Now, this is –

Peter Bell: One other important aspect of the process:  Because this loan was created for a class of clientele that’s considered to be vulnerable, there is a mandatory counseling requirement on it.  So every single borrower or prospective borrower, before they can actually formerly apply for the reverse mortgage, needs to go meet with an independent third party reverse mortgage counselor at a HUD approved counseling agency to go through a session that reviews the transaction they’re contemplating, looks at their recurring expenses for maintaining their household, and make sure they understand the transaction, the implications it might have on their estate, and also to review other options that they might want to consider.

Jason Hartman: Yeah, there’s certainly no shortage of people taking advantage of the elderly, are there?  So that’s good that that safeguard is in there.

Peter Bell: So if a borrower decides that they’re interested once they meet with a lender, before the lender can proceed, they need to refer them out to one of these independent counselors.  The borrower needs to go complete that session and return to the lender with a counseling certificate.  And once they do that, then the lender can proceed with the application process.

Jason Hartman: If the property is in a more rural area, or not a big town or city, can they do that counseling by phone, or does it need to be done personally?

Peter Bell: Yes.

Jason Hartman: They can.

Peter Bell: Yes.  The counseling is available by telephone.

Jason Hartman: So that’s a little bit about the process and it’s great to know that.  Thank you for that info.  In every industry, in every new industry, and the reverse mortgage as a real sort of industry is rather new, there are always sort of – when it’s the Wild West, there are the people out there who kind of take advantage of the system, they take advantage of people, and then an industry usually, as it becomes a little more established, it kind of gets cleaned up, if you will.

Can you tell us about the history of that in the reverse mortgage industry?  And the reason I ask you is because I have had discussions with people who, as soon as I say reverse mortgage, they became a little suspicious.  What’s going on there?  And you’ve already sort of alluded to some of the safeguards.

Peter Bell: Sure.  Well, to some extent, I think the product suffers from that old adage, “If it sounds too good to be true, it probably is.”  So it makes a lot of people wary of reverse mortgages because it is a very good opportunity in a lot of cases.

But there have been situations over the years that have been widely reported in the press about reverse mortgage abuses, and they fall into a few different areas, and a lot of the misunderstandings are based on some of the early things that occurred.  But the first one was there were a number of people that went around that sold what they were presenting as reverse mortgages, but which, in fact, were not.  They were actually balloon loans, where people got money up front, but there was a date at which the loan became due and payable, with all the accrued interest.  And if they couldn’t pay it, they would lose their house.  Those are not reverse mortgages.

In a true reverse mortgage, the borrower never has to pay until they permanently leave the home, either because they choose to move out and sell it or because they pass away.  So there’s never a due date that they could lose their house for prior to them deciding that that’s the case or them passing away.

So that was one area.  There were some reverse mortgage products when I got started in the business about 12 years ago that had an equity sharing feature, where a borrower was able to choose a lower interest rate to accrue on the loan in exchange for agreeing to give the lender some percentage share of the future appreciation of the property.  Some were smaller shares.  Some of them were as much as 50 percent of the appreciation.

Subsequent to that, there was a large run-up in property values.  There were a number of instances where people might have gotten a few hundred thousand dollars of benefit from the reverse mortgage, but the property appreciated several hundred thousand dollars more on top of that.  So when the heirs went to repay the reverse mortgage after Mom passed away, they found that they had to pay back the funds that had been advanced, the accrued interest, plus also give away a few hundred thousand dollars more in that equity appreciation participation.

And those seemed egregious at the time because of the size of that appreciation.  If those same loans had come due today, they would not seem as egregious because values have come down.  But at the time, they seemed huge, so there were a number of lawsuits around that.  The fact is, though, that there are no products in the marketplace today that have an equity share feature and there have not been for probably six or seven years now.

Jason Hartman: Now, is that in just the reverse mortgage market that you mentioned the equity share feature because I am starting to see these types of “creative” loans – I’m not sure they’re bad necessarily – in the forward mortgage market?

Peter Bell: Well, it does go on in the forward market, but that’s not really my area.  And there are other equity release products that were based on a share of equity appreciation.  They also disappeared from the market over the last year or two as the credit crisis has grown.  But there were some interesting ones, one called the REX and another one called Equity Key that did give people a chance to draw some money out of the equity in their home in exchange for giving up a share of the future appreciation.

Jason Hartman: We’ve had someone on talking about that on a show about a year and a half ago.

Peter Bell: They were very interesting products.  I mean I actually thought about using one myself on my home in Washington and taking the proceeds to buy a second home in Colorado, where I spend a lot of time.

Jason Hartman: Talk a little bit about, if you would, the financial planning side of a reverse mortgage.  There really are some great benefits in terms of estate and tax planning it sounds like.

Peter Bell: Well, there are.  There are a lot of different segments to the reverse mortgage market, and the typical view of who a reverse mortgage borrower might be to the public at large is somebody that’s hard-pressed financially and they need the cash from the reverse mortgage in order to make ends meet on a day-to-day basis.  And while that is a lot of the market, that clearly is not the entire market.  There are borrowers that are needs based like that.  There are borrowers who are security oriented, that are doing fine on their retirement income, but want to create some sort of stand-by reserve in case they have any financial shocks, in case they need major home repairs that they don’t have the savings for, or have uncovered healthcare expenses, or want to pay for homecare services.

And then there are lifestyle borrowers who are looking to add an element of discretionary spending to their lifestyle, either to travel or do some remodeling of their home, make a major purchase, give money to their families.

And then there are people that use it as part of their financial plans.  For instance, we find there are some people that want cash for current things that they want to do, and they have substantial assets, but they find for one reason or another that they don’t want to cash in those assets right now.  They may have stocks, for instance, that they feel are depressed in value right now and they’d rather hang onto those until they come back in value rather than sell them and lock in those losses.

Or, alternatively, they may have stocks that have appreciated in value and if they were to cash those in, they’d trigger a large capital gain.  So instead, their strategy is to pull money out of the house, which is not a taxable event, and actually creates a depletion of value in the estate so it could help save on estate taxes later on, and then it lets them preserve the asset that’s highly appreciated, like the stock, and let that be passed through the estate, where the heirs can benefit from the step up in basis when the stock is passed onto the next generation.

So there’s a lot of implications and the loans are used in a lot of different circumstances for a lot of different objectives.

Jason Hartman: Good stuff.  How many companies are offering the reverse mortgages?  I assume this market is definitely growing.

Peter Bell: Yes, there are companies entering the business all the time, and it’s a range of companies that are involved.  They range from small, local mortgage brokerages, or mortgage banking companies, right on up to major financial service conglomerates, like Genworth, Metlife, Bank of America, Wells Fargo.  So they run the whole gamut, and more and more are entering all the time.  There are probably about 1,500 companies around the country right now that are offering reverse mortgages.

They all need to be approved by HUD in order to offer the FHA program, so they’re all HUD approved and HUD supervised lenders.

Jason Hartman: Anything you want us to know in closing about reverse mortgages?

Peter Bell: Well, I think it’s a very interesting product that people are often quick to dismiss, although those that dismiss it tend to be people that don’t fully understand it.  If you look at the surveys that have been done from people who have the reverse mortgages, there’s an enormous degree of satisfaction expressed.  AARP did a study last year that showed that 93 percent of the reverse mortgage borrowers interviewed said that the loan had a very significant, positive impact on their life and they would strongly recommend it to other people that felt that they need or desire to get some cash out of their residential asset.

Jason Hartman: And I would say I would agree with that.  I’ve long been interested in this type of mortgage.  Fortunately, I’m too young to qualify.  I don’t need one, but I think it’s a good option for people.  I really do.  It’s good that there are lenders out there and it’s good to see the industry is growing and it’s more established and more regulated.  And on your website, which by the way, is very helpful, you have a code of conduct, code of ethics, a lot of regulatory information, what’s going on in the government side, a lot of good resources there.  Do you want to mention the website, Peter?

Peter Bell: Yes, it is www.reversemortgage.org.  Reverse mortgage all one word with no space between them, .org, and that is our consumer website.  We also have one for professionals in the trade, which is www.nrmlaonline.org.

Jason Hartman: Excellent.  Well, great to have you on the show today, Peter.  We very much appreciate it.  You heard it from the horse’s mouth, so to speak.  That’s Peter Bell, President of the National Reverse Mortgage Lenders Association.  Thank you so much for joining us, Peter.

Peter Bell: Thank you, Jason.  We appreciate the opportunity to spread the word about reverse mortgages.

Jason Hartman: My pleasure.

Announcer 1: Copyright, the Heartland Media Company.  All rights reserved.  This show is designed to provide general advice and education concerning real estate for investment purposes.  Nothing contained in this show should be considered personalized investment advice because every investor’s investment strategy and goals are unique.  You should consult with a licensed real estate broker, agent, or other licensed investment advisor before relying on any information contained in this show.

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Likewise, rents are based on market conditions outside of the control of HMC and property owners.  During periods of economic downturn or recession, rents can decrease as the number of qualified tenants decline or the number of rental properties on the market expands.  There can be no assurances if the rents do fall, that they will shortly return to previous high levels.

HMC is not qualified to advise on tax or legal matters.  Please consult the appropriate professional for such advice.

While HMC would like to verify the details of properties offered throughout its network, it is impossible to check every aspect of every property everywhere in the country.  Therefore, it is very important for perspective investors to inspect properties in person whenever possible and to do their own due diligence as to the condition of the property, the features of the neighborhood, community facilities, and regional demographics before writing a purchase order or entering into a contract to buy.

Also, neither HMC nor its agents or affiliates can guarantee that any property will appreciate or be positive cash flow either from close of escrow or during subsequent periods.  Therefore, it is essential that investors have an adequate financial reserve to cover periods of vacancy, instances of late or uncollectable rents, fix-up and maintenance costs, legal fees for evictions, and related actions, and management fees.  It is also essential that investors not over leverage themselves and purchase more property than they can reasonably afford.

Our affiliation with brokers, sales agents, and management companies that are independently owned and operated are not under the management or control of HMC.  While HMC may receive compensation in the form of referral fees, no employment or agency relationship exists between us and the affiliated individuals and companies referred to the above.

Any claims, representations, or statements of fact made by brokers, agents, management companies, or their representatives should be verified independently by the investor before entering into any purchase agreement.

By using any of the services offered throughout this website or by participating in HMC sponsored events or by purchasing property through the referrals from HMC, investors waive any or all claims against HMC, its presenters, speakers, agents, and affiliated companies that may arise, from statements, actions, representations, recommendations, or warranties made by referral real estate agents, loan brokers, property managers, new home builders, sales agents, or vendors.

HMC and affiliated companies will rely on this waiver as a condition for referring investors to those referred to above.  In general, HMC acts as a facilitator or matchmaker between investors, brokers, and/or properties.  As in relationships, a matchmaker introduces two hopefully compatible parties, but whether they live together happily ever after is up to them once the introduction is made.  HMC is not qualified to advise on tax or legal matters.

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Duration:  39 minutes