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Reverse Mortgage News for Seniors
More Senior Citizens Looking to Their Homes to Help
Fund Their Retirement
Survey finds older Americans carrying surprising
amount of debt
 Sept. 10, 2007 – If you have your eye on your
parent's home and assume you will inherit it someday, you may be
counting your chickens before they hatch. Fewer senior citizens today
plan to pass their homes on to their children and it appears it is
because they plan on using their home as part of their retirement
funding, according to the newest Senior Sentiment Survey by Financial
Freedom.
The 2007 Financial Freedom Senior Sentiment Survey
measured the opinions of “young seniors” aged, 62-75 on a variety of
topics from retirement planning to family affairs to general quality of
life issues.
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In the 2006 Senior Sentiment Survey, 42% of the
seniors polled, selected the response; “Leave it to my heirs…” when
asked about future plans for their homes.
In this year’s survey, only 25% indicated this
option as “very likely” or “somewhat likely”.
In contrast, 54% of seniors responded that they
would keep access to their homes as a retirement asset until they are
forced to make a decision.
“When you realize that the home is most Americans’
largest asset, it’s impossible to ignore the power of the home to assist
in funding retirement regardless of the strategy,” said Michelle Minier,
CEO of Financial Freedom.
“Clearly, a growing number of seniors are beginning
to consider retirement funding strategies that incorporate their home.”
Depending on their future situations, selling the
home is the most popular strategy, with 12% of seniors indicating they
already plan to sell it and 38% of seniors indicating they will sell if
they have limited financial choices. Fewer seniors would leverage their
homes, with 13% of seniors indicating they would use a reverse mortgage,
or other home equity loan to access the wealth tied up in their homes.
Confidence in Retirement Income
The majority of seniors (83%) indicated that they
were confident, or at least somewhat confident in their retirement
income. However, only 56% were confident when asked about their greatest
concerns for retirement years, 83% said “remaining healthy” followed by
18% who said “having enough money.”
Strategies for Saving, Funding Retirement
Despite strong confidence, when asked to choose
from a list of specific strategies they might employ to fund retirement,
● 37% of seniors said they would work either part time (33%) or full
time (4%),
● 14% said they would sell their home and move into a smaller one, and
● 9% said they would sell their belongings.
● Taking out a reverse mortgage rounded out the top five answers,
garnering 6% of the responses.
Debt in Retirement
While seniors ranked avoiding debt as their top
saving strategy during retirement, a surprising 27% expect to have debt
in retirement and 40% expect to have mortgage debt. Seniors revealed
some startling trends:
Non-mortgage Debt
● 59% of seniors with debt have at least $15,000
and 12% have more than $100,000;
● 17% never expect to pay it off;
● Health care expenses topped the list of sources
of debt, followed by auto loans and home repairs;
● Men tend to be more in debt than women.
Mortgage Debt
● 63% owe at least $50,000;
● 31% owe more than $100,000;
● 56% expect it will take 10 years or more to pay
it off;
● 11% never expect to pay it off.
This is the fourth annual survey from Financial
Freedom, a Subsidiary of IndyMac Bank F.S.B. (Indymac Bank).
Editor’s Notes:
About Financial Freedom
Financial Freedom Senior Funding Corporation, a
subsidiary of IndyMac Bank, F.S.B., headquartered in Irvine, California,
is the largest originator of reverse mortgages in the United States.
Financial Freedom originated over $5 billion in loan fundings on $15.2
billion in home value in reverse mortgages in 2006 and is now the
largest servicer of reverse mortgages with a servicing portfolio of
over 130,000 loans.
Financial Freedom developed the industry’s first
reverse mortgage software, the Reverse Mortgage Analyzer, to help
lenders compare the benefits between the HECM, Fannie Mae and the Cash
Account products. The Reverse Mortgage Analyzer has been a powerful tool
since 1997 and is the industry standard with more than 28,000 registered
users. In addition, this RMA software application has been used to train
counselors.
Financial Freedom is also founding member of the
National Reverse Mortgage Lenders Association. NRMLA is a nonprofit
trade association, based in Washington, DC, whose mission is to support
the continued evolution of reverse mortgages as an important financial
option for senior homeowners while educating both its members and
consumers about the varied applications of this unique loan. For more
information, visit the Financial Freedom Web site at
www.financialfreedom.com.
Members sign a Code of Conduct pledging to abide
by guidelines that assure fair, ethical, and respectful practices in
offering and making reverse mortgages to seniors. For more information,
visit the NRMLA Web site at www.reversemortgage.org.
About Indymac
IndyMac Bancorp, Inc. (NYSE: IMB) (Indymac) is
the holding company for IndyMac Bank, F.S.B. (Indymac Bank), the 7th
largest savings and loan and the 2nd largest independent mortgage lender
in the nation. Indymac Bank, operating as a hybrid thrift/mortgage
banker, provides cost-efficient financing for the acquisition,
development, and improvement of single-family homes. Indymac also
provides financing secured by single-family homes and other banking
products to facilitate consumers’ personal financial goals.
With an increased focus on building customer
relationships and a valuable consumer franchise, Indymac is committed to
becoming a top five mortgage lender in the U.S. by 2011, with a
long-term goal of providing returns on equity of 15 percent or greater.
The company is dedicated to continually raising expectations and
conducting itself with the highest level of ethics.
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