Reverse 2020

“I’m tired,” said my old friend Carlene. “I just want to stay in this house and die here.”

Carlene and I had been driving around town checking out apartments for her to rent. She couldn’t afford the loan payment on her house anymore and she had decided to sell to acquire funds to live on.

“Let’s have a drink,” she said, as she collapsed into her easy chair and fired up a cigarette. It had been a rough afternoon. Carlene was arthritic and weak.

“I’d rather be back on the ranch digging ditches and skinning rabbits than dragging my old carcass around town with the likes of you,” she said. 

“Thanks a lot,” I said. 

“Ha! I’m just gettin’ your goat, kid,” she said. She cackled and blew smoke.

“And don’t worry, I am gonna list my house with you. You don’t have to kill me first.”

She hurled a folded-up newspaper at me. “What do you think about this?”

An advertisement was circled: “Reverse Mortgage. Over 62 years old? Let your home’s equity pay you income! Stay in your home with no payments! Free consultation!”

This was back in the early 1990’s, and I had never heard of a Reverse Mortgage. 

“Sounds fishy,” I said. 

“I called the 800 number,” she said, “and some loan guy is coming here tomorrow. You want to be here?” In other words, she expected me to be there.

The loan guy drove 90 miles to meet Carlene. He laid out the Reverse Mortgage plan, and it seemed too good to be true, so I called a local loan person I knew. 

“It’s a new product,” she said. “We don’t have it here yet, but my understanding is that it’s a Government-backed loan, and perfect for older people who want to stay in their home. It’s a cash flow tool, drawn from the equity in their home.”

Carlene signed up for that Reverse Mortgage and it fit her situation like a glove. About a month later, no more house payments for Carlene. In fact, she now received a check every month.

“Pour us a drink and let’s celebrate,” said Carlene. She fired up a cigarette. “Well sir, I know you’re sad you have to wait till I die to list my house now.”

“What? No….!”

“Ha! Got your goat again, kid!”

Fast forward to 2020, and we now find the Reverse Mortgage has evolved into the Home Equity Conversion Mortgage, or HECM, pronounced in the slang version as “Heccum.” 

People over 62 can now use the HECM loan for buying a home, not just staying in their home, like Carlene did.

I stopped by the office of my Loan Officer friend, the one I call Big Jim, and asked him, “Do you have a good example of a recent beneficiary of the Heccum loan?”

“Many,” said Big Jim. “But my client, and now friend, Kay, calls me regularly saying she still can’t believe she was able to buy a bigger home than she could have with a conventional loan, and she has no house payments!”

“No payments,” I said. “It seems too good to be true.”

“Exactly,” said Jim, “it’s one thing the Government got right.”

I have a great brochure on the HECM, thanks to Big Jim. If you would like me to send it to you, just call text or email me, with the question, “What the heck is a HECM?”