The reverse mortgage was invented decades ago to help seniors facing economic hardship access the equity in their homes. Between 1990 and 2010, more than 660,000 reverse mortgages were issued, according to the AARP. Today, the products are aggressively marketed through ads featuring Boomer-friendly spokespeople such as Henry Winkler (the Fonz from Happy Days). But these products are complicated, expensive and ripe for abuse, which lead a reader named Fred to ask:

“What is your opinion about reverse mortgages? So many financial planners are pushing this sort of thing, but I heard that fees are steep.”

Home Equity Conversion Mortgage (HECMs) are the most popular reverse mortgage available. They are federally insured and offer certain borrower protections. Seniors who either own their homes outright or have low mortgage balances can take out reverse mortgages and convert their equity into cash — either as a lump sum, monthly payment or line of credit, or some combination of the three.

There are no income or credit requirements, and the loan has no monthly payment. Instead, the lender pays the homeowner, and the reverse mortgage balance rises as a result, accruing interest and fees. Lenders get repaid when the owner either moves or dies, and the home is sold. HECMs are insured by the Federal Housing Administration, so if for the sale price of the home falls short of the loan amount, FHA pays the lender the difference.

“Reverse mortgages are full of pitfalls and they are very expensive — but they are very valuable to the people for whom they work,” says Margot Saunders, at counsel with the NCLC. “If you are sitting on a mortgage and you can afford to make payments on it, and have home equity and other assets, this is probably not a good idea. But if you are 85 years old and have $250 a month in income and a $500,000 house, it’s a great idea no matter how much it costs, because the lender will give you money you don’t otherwise have.”

In short, these pricey loans can be a lifeline for low-income seniors. What they aren’t is a cost-effective source of cash to buy sports cars or dream vacations, although the industry has aggressively marketed them that way. Lenders have also falsely pitched reverse mortgages as some kind of government benefit program, or part of the economic stimulus plan — and been sued by states for doing so.

The amount someone can borrow depends on their age and the amount of equity in the home, but the maximum is $625,500. (The loan limit was raised in 2009 as part of the federal stimulus law and is set to expire Dec. 31, after which it reverts to $417,000.)

The Risky and Expensive Sides of the Lifeline

Reverse mortgages also come with hefty fees, which can run as high as 5% of your home’s value by some estimates. The FHA charges everyone who gets one a mortgage insurance premium fee of either 0.01% or 2% up front, as well as ongoing annual fees. The HECM Saver loan, created in October 2010, has lower fees, but typically higher interest rates and more restrictions on borrowing. Consumers also have to pay a fee up front for third-party counseling to make sure they have a clear understanding of their options.

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Reverse Mortgage: Is it a Good Idea?

North Texas home foreclosures are continuing to retreat from the record highs set last year.

Foreclosure filings for September are down 19 percent from a year ago, the seventh month in a row that foreclosure postings in the Dallas-Fort Worth area have fallen year-over-year.

Foreclosure filings in the D-FW area have now been lower in 10 of the last 12 months, according to the latest data from Foreclosure Listing Service.

For next month’s foreclosure auctions, lenders have scheduled 4,774 homes for forced sale. So far in 2011, home foreclosure filings are down 12 percent from the same period last year.

“For the first time in 11 years, year-to-date residential postings declined,” said George Roddy, president of the Addison-based foreclosure tracking firm.

Some of the declines may be due to delays by lenders in processing the foreclosures, Roddy said.

Late loan payment rates, while improved from a year ago, remain high.

With September’s foreclosure sales filings, the biggest decline is in Denton County, where they are down 28 percent. Foreclosure postings were 19 percent lower in Dallas County.

So far in 2011, 42,380 homes in the four-county area have been threatened with foreclosure. That’s down from more than 48,000 foreclosure filings at the same time last year.

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NEW YORK (CNNMoney) — Borrowers who were overcharged by Countrywide Financial more than three years ago are finally going to get what’s due to them.

The Federal Trade Commission said Wednesday that, as a result of a settlement reached with the mortgage lender more than a year ago, it is sending out checks totalling nearly $108 million to more than 450,000 former Countrywide borrowers.

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Susan Goldfarb of Albany, N.Y. spent last summer avoiding her backyard. “Our mosquito problems were just above and beyond,” she says. “No matter what we did, from sprays to candles to bug zappers, we just couldn’t get them to stop breeding in our yard all summer long.” Goldfarb spent the winter reading up on ways to keep spring and summer rains from puddling in her yard. That way, by spring she was able to begin construction on a major home improvement: a drainage system.

Knowing what season-appropriate changes to make to your home is often hard to pinpoint. Here’s a list of seven top home improvements, repairs, additions and adjustments to make to your home to get the most out of it, and out of spring!

Spring Home Improvement Ideas

NEW YORK (Money) — My fiancé and I are saving up to buy a house in the not-too-distant future. We want to take advantage of the housing market, but he’s skeptical about whether this is the best time to buy. When do you think prices will go up? — S.R., Los Angeles

I can understand your fiancé’s reluctance given that house prices continue to weaken. The S&P/Case-Shiller Home Price Index released last week showed that prices fell nationally in the first quarter of this year.

That’s the third quarter in a row prices have dropped, taking them back to mid-2002 levels. Meanwhile, at the end of March the monthly index that tracks 20 large metro areas dipped below its previous low of April 2009, essentially confirming a double-dip in home prices for much of the country.

As for your city, Los Angeles, the stats weren’t quite as bad as those of the 20-metro area index of which it’s a part. Prices in L.A. still remain about 5% above their trough of May 2009, although they fell again in March, the eighth month in a row.

On a decidedly more positive note, though, your hometown did make our list of the Top 10 Turnaround Towns. Whether that turnaround will be in progress by the time you’re ready to buy is anyone’s guess.

But given the recent lackluster jobs report and the million-plus homes in foreclosure, I don’t think anyone is expecting a robust about-face anytime soon. But that doesn’t mean you and your hubby-to-be shouldn’t be out scouting the market for a house to buy.

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NEW YORK (CNNMoney) — Home prices are already a third off their highs, but this summer could bring the real discounts.

Buyers are still cautious, and anxious sellers will have to price aggressively to get them off the fence.

That could result in a “summer clearance sale,” predicts Pete Flint, CEO of Trulia, the real estate web site.

“We don’t imagine a stampede of buyers, like outside of Macy’s on Black Friday,” he said. “We see this more akin to January sales where retailers are trying to get rid of stock before it gets stale.”

Several factors, he said, will lead to blow-out prices:

Accelerating price drops: Home prices have already reached their lowest level since the housing bubble burst, and are now at 2002 levels. Sellers will feel the pressure to make deals before their homes lose even more value.

Bloated inventory: There are boatloads of homes on the market, more than eight months worth at the current rate of sales. Many are distressed properties — short sales and bank repossessions. Such homes are selling at discounts up to 50%.

Tight credit: Some homebuyers still can’t obtain mortgages, limiting demand.

Unemployment: While the job picture has brightened, unemployment is still around 9%. People without jobs don’t buy homes, obviously, but high unemployment also rattles working people. Lacking the confidence that their jobs are secure, they may not look to buy.

These forces could all come to a head this summer, according to Flint, because of the cyclical nature of homebuying. Buying takes off in spring as many young families hope to make their moves before the new school year.

“By the end of the homebuying season, sellers will become increasingly desperate,” said Flint.

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There is no such thing as guaranteed safety inside a tornado. Freak accidents happen; and the most violent tornadoes can level and blow away almost any house and its occupants. Extremely violent F5 tornadoes are very rare, though. Most tornadoes are actually much weaker and can be survived using these safety ideas…

Prevention and practice before the storm: At home, have a family tornado plan in place, based on the kind of dwelling you live in and the safety tips below. Know where you can take shelter in a matter of seconds, and practice a family tornado drill at least once a year. Have a pre-determined place to meet after a disaster. Flying debris is the greatest danger in tornadoes; so store protective coverings (e.g., mattress, sleeping bags, thick blankets, etc) in or next to your shelter space, ready to use on a few seconds’ notice. When a tornado watch is issued, think about the drill and check to make sure all your safety supplies are handy. Turn on local TV, radio or NOAA Weather Radio and stay alert for warnings.

Forget about the old notion of opening windows to equalize pressure; the tornado will blast open the windows for you! If you shop frequently at certain stores, learn where there are bathrooms, storage rooms or other interior shelter areas away from windows, and the shortest ways to get there. All administrators of schools, shopping centers, nursing homes, hospitals, sports arenas, stadiums, mobile home communities and offices should have a tornado safety plan in place, with easy-to-read signs posted to direct everyone to a safe, closeby shelter area. Schools and office building managers should regularly run well-coordinated drills. If you are planning to build a house, especially east of the Rockies, consider an underground tornado shelter or an interior “safe room”.

Know the signs of a tornado: Weather forecasting science is not perfect and some tornadoes do occur without a tornado warning. There is no substitute for staying alert to the sky. Besides an obviously visible tornado, here are some things to look and listen for:

1. Strong, persistent rotation in the cloud base.
2. Whirling dust or debris on the ground under a cloud base — tornadoes sometimes have no funnel!
3. Hail or heavy rain followed by either dead calm or a fast, intense wind shift. Many tornadoes are wrapped in heavy precipitation and can’t be seen.
4. Day or night - Loud, continuous roar or rumble, which doesn’t fade in a few seconds like thunder.
5. Night - Small, bright, blue-green to white flashes at ground level near a thunderstorm (as opposed to silvery lightning up in the clouds). These mean power lines are being snapped by very strong wind, maybe a tornado.
6. Night - Persistent lowering from the cloud base, illuminated or silhouetted by lightning — especially if it is on the ground or there is a blue-green-white power flash underneath.

Source:

Storm Prediction Center - Roger Edwards - Norman, Ok

NEW YORK (CNNMoney) — Malynda Williams didn’t set out to be a real estate tycoon. But the 40-something has managed to acquire four properties over the past three years, and she’s looking for more.

“I started out trying to get something going for after I retire,” Williams said. “I never thought it would be this, but I really love it.”

Her first buy came in October 2008, a vacation home on the Texas Gulf Coast, 225 miles south of her home base in College Station. She and husband John planned to retire there someday.

“My husband used to travel for work in the oil fields,” she said. “We knew it was reasonable to buy a home there, and the people are so friendly.”

They bought a four-bedroom place for $540,000 in Aransas pass near Rockport, a city of 8,000 residents on Aransas Bay.

The area boasts a nice beach and great fishing. Visitors from all over the world make it their base for trips to Aransas National Wildlife Refuge. Rockport is also home to many “winter Texans,” northerners escaping the big chill.

John soon sold his business building natural gas facilities, and began spending time in Rockport. Malynda kept her retail consulting job for Xerox in College Station. To be able to stay in Rockport most of the time, she decided to install a home office and hired a cabinet maker to put it in.

The cabinet maker mentioned that he also builds vacation homes to rent, and a light bulb went off. “I can do that too,” Williams said to herself.

Williams found a two-bedroom on the water for $250,000. It sleeps 12, has its own dock and provides easy access to great fishing waters. “There was very little work to do on it and the deal included the furnishings,” Williams said. (Ask the Expert: ‘Should I buy a vacation home?’)

The next purchase was a five-bay storage property she bought for $119,000 in April 2010. She and John use it for their own stuff, but it came with a 750 square foot apartment, which she rents for $600 a month. (Latest home price forecasts in your area.)

The latest deal came this past winter and seemed, at first, like a steal. Williams paid just $140,000 for a six-bedroom, five-bath, “lodge-like” house a few blocks off the shore, but a problem cropped up.

“The home is 2,180 square feet,” she said, “and 460 of that, right in the middle, was a mobile home. Its axles were rusting.”

A previous owner, maybe two, must have expanded the living space of the mobile home by building wings all around it. Fixing the axles involves tearing out the core and rebuilding it. That will improve the house but cost upwards of $25,000.

Williams had been getting calls from renters since she first put the rental online in late March, at $1,800 a week and up. Now, she can’t book until June when the repair is finished, so there’s lost income.

She rents out the homes for short-stays — weekends, weeks or months. That’s more work, because she has to manage the bookings and supervise maintenance and cleaning crews. But it’s also more profitable, as long as tourists keep coming.

She set the weekly rates at $900 to $1,500 for the two-bedroom, and the house has been booked about 70% of the time, bringing in $40,000 or so a year. Williams said that’s enough to cover all expenses and turn a tidy profit.

That setback has not discouraged Williams. As early as later this year, she plans on adding to her five properties, which includes the old College Station residence, now rented out. She figures she can handle as many as 10.

She paid cash for her three of her acquisitions but she got the cash for the most recent by borrowing against the couple’s investment portfolio of stocks and bonds.

That means lower closing costs, and the interest rate on the loan against her portfolio is less than that of a mortgage.

She has also started to manage vacation home rentals for other owners, which only adds lightly to her work, since she’s already doing that for her own properties.

This new career will be a perfect retirement fit, she thinks, providing extra income and — just as important — fun.

“I can’t be idle,” she said, “and I don’t want to be tied to a desk.”

Full Story on CNN Money

For a long time I have resisted teaching & sharing Feng Shui for the worry that some people would see it as just plain weird.  Having practiced it fervently for the past two years I can no longer keep quiet. It has been a life changing experience & one worth sharing.  There are depths of the teaching that I too do not fully understand quite yet.  As a matter of fact, there are people that have dedicated their lives to learning it & still may not be masters.  I challenge you that if you have thought “that’s just too much to learn” or “I don’t have time to read all the books”…. Don’t let that stop you.  There are benefits to applying even some of the minor methods.  Over a period of time I will share more & more, but just for today I’ll share a getting started point.

Like a breath of fresh air, with a little time & care you can improve the energy flow & over all “feel” of your space…  I definitely recommend it for home & work, but lets start with home.  What your eyes take in the moment you awake or walk in your door sets the tone for your inner peace or lack thereof.  Of course, I’m not referring to a spiritual peace, that can only come from God.  I am referring to the internal stress or aggrivation we feel when things are out of order.  If you do not feel that, then you may have gotten use to it & I would be willing to bet that your surroundings are chaos.  In this case people are blocking the feeling & that is an even deeper issue.

Lets begin with clutter.  Never underestimate the effect of clutter on your life.  Whenever I meet people that need my help in decor & they tell me they are “stuck” & just don’t know where to begin, they are usually inendated with clutter. Where clutter accumulates, energy stagnates.  If you are wanting to go on the journey to a more peaceful, more serene you, then I urge you to begin clearing today.  In the first effort you should have an awareness of how many things you are moving & either move or discard twenty-five things.  Don’t mull over each item, just getting moving with them….. Grab one… On to the next & so on! Moving energy is healthy energy. Just think what happens to a pool of still water… Soon it becomes murky & begins to smell. A lot of times people with all this “stuff” say that they can’t find the desire to begin. They constantly feel tired. No wonder you are tired. You are sitting in a box of stagnant energy.  Just begin to move these things…especially the things that have no meaning & you will marvel at how light you will feel in body, mind, & spirit.

Source:

Living Free With Feng Shui

(c) Amanda Barker - All Rights Reserved

WASHINGTON (CNNMoney) — The House passed a bill Tuesday to kill a signature Obama administration program that helps homeowners stay in their homes but has faced criticism as ineffective.

The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.

The program taps the federal bailout that saved the big banks, providing incentives to mortgage servicers to modify mortgages for borrowers behind on their payments.

“To many struggling Americans seeking permanent mortgage relief, HAMP offered little more than false hope. More homeowners have been kicked out of the program than have received permanent relief,” Rep. Darrell Issa, the California Republican who chairs the House Oversight Committee, said in a statement.

The bill’s path in the Senate is uncertain. President Obama has vowed to veto it.

Already, House Republicans have passed three other smaller programs designed to help families and neighborhoods dealing with foreclosure. What makes the HAMP program different is the widespread criticism it has received, from both Republicans and Democrats, for being ineffective.

“It would put an end to the poster child for failed federal foreclosure programs,” said Rep. Judy Biggert, an Illinois Republican.

On Tuesday, 50 House Democrats wrote Treasury Secretary Tim Geithner a letter, urging him to reform the program, saying “HAMP must change to meet its potential.”

“Yes, the HAMP program has a lot of problems,” said Rep. Barney Frank, a Massachusetts Democrat, on the House floor. “But, the absence of any program leaves homeowners worse off.”