Dear Senators McCain &  Kyl:

I urge you to consider the effects of HR3288 on the seniors of Arizona. This bill threatens to lower the amount of proceeds one is allowed to receive from a reverse mortgage because the House has decided that seniors, age 62 and older, are not able to properly manage their own loan proceeds. I am an expert in the field of reverse mortgages,in Arizona and have helped over 500 Arizona seniors stay in their homes with a reverse mortgage. None of my borrowers have ever used the proceeds of a reverse mortgage to purchase annuities or long term health care insurance, which seems to be the main concern of this bill. Although no one is quite sure how much the new calculations will affect the net loan proceeds, we are all sure they will be reduced. This comes at a time when nine out of ten seniors can’t qualify for this loan for several reasons, that I will detail later but more importantly this will surely put an end to the use of this product in Arizona by restricting it to the most equity rich customers, only, who generally don’t need the help. Seniors are suffering under the worst of employment and health care struggles only to find they can no longer entertain the thought of refinancing a home . My customers almost always use the majority, if not all, of the proceeds of the reverse mortgage, to pay off the existing mortgage on their homes, to have the benefit of living in the home without a monthly payment. Most of them have no other option but to leave the home, or foreclose. A good number of them have adult children and grandchildren living with them because of the current economy. I have done this work in Arizona for several years and have hundreds of satisfied customers that have literally been rescued by this loan. Please call me for a list of names and phone numbers. I can be reached at 602-507-6527. Furthermore, the proof of the effects of a proposed bill like this is already upon us in Arizona. We have seen many lenders go out of business and some are no longer taking applications from Arizona residents due to the declining market risk. There has been a new trend in the underwriting of reverse mortgages from Arizona as well. For instance, there can be an automatic cut in value by the lender, after a conservative appraised value was established by an FHA certified appraiser. There are already many, many hurdles to obtaining a reverse mortgage. This bill will completely snatch it away from the grasp of Arizona seniors. There are no longer many, if any, borrowers considering taking a large, lump sum equity release, through a reverse mortgage or any other mortgage for the purpose of making a large purchase or investment in risky financial products. Regulation of our industry is out of sight and I am bewildered by the stories I hear of unscrupulous lenders, taking advantage of seniors through reverse mortgages. It has got to be nearly impossible to do something like that in today’s lending environment. The numbers just are not there. How many of these cases are there and how many actually have been verified? Creating new laws to reduce the benefits of this program is not the answer. The results will be a disaster for the majority of good, law abiding citizens and perhaps, one or two bad apples will leave the business. Let’s concentrate on how to catch the criminals and not how to eliminate all of Arizona senior’s ability to live in their family home.
Michael Manfredi
Mortgage Concepts, LLC
Phoenix, AZ