Finances Taboo Topic for Senior Citizens and Their
Children, Finds Reverse Mortgage Firm
Seniors considering reverse mortgages lowering
their home values, new housing legislation helps older
Americans, says reverse mortgage lender in other studies
Aug.
14,
2008 - Half of all senior citizens participating in a recent survey said
that they have never had an in-depth conversation about their financial
situation with their adult children, according to a survey for Golden
Gateway Financial, a marketer of reverse mortgages to senior
citizens. The company also recently released analysis showing seniors
are lowering their home values and that the new
federal housing legislation benefits seniors.
In
total, only twelve percent of all seniors surveyed have spoken with
their children and developed a sound plan to address their financial
challenges. This, says the poll sponsor, reveals a critical need for a
more open financial dialogue between older Americans and their children.
The online survey was conducted by Crestwood
Associates for Golden Gateway Financial, which describes itself as the
Web's most comprehensive financial resource for senior citizens and
retirees.
Highlights of this study include:
● Approximately half of all senior citizens and
adult children surveyed responded that they had not spoken about their
parents' financial situation
● Roughly one quarter of seniors who have
spoken with their children still have not found a solution to their
parents' financial difficulties
● Two thirds of senior citizens who had not
spoken with their children declared that they did not want to discuss
finances with them in the future
● Only a third of adult children surveyed
reported having confidence in their parents' retirement finances
"In
speaking with seniors and their families it is obvious that finances
remain an awkward topic of conversation," said Eric Bachman, founder and
CEO of Golden Gateway Financial.
"With mounting economic pressures and the recent
government legislation that will give seniors even more financial
options, it is critical for families to discuss their concerns and
create a solid financial plan for retirement and beyond," said Edgar
Kully, Crestwood Associates' Principal.
"Adult
children should not be concerned about financial role reversal," he
added
New Report Shows
Senior Citizens Coming to Grips with Falling Home Values
Golden Gateway released second quarter usage data
from its online reverse mortgage calculator at the end of July, showing
that visitors to the companys Website are entering lower home values
when compared to first quarter data. The nationwide average reported
home value fell by 2.5% when compared to first quarter 2008.
This drop in perceived home value by prospective
reverse mortgage borrowers reflects a similar drop in actual home value
as reported by the
most recent S&P/Case-Shiller Home Price Index.
Additional observations from the report:
● California recorded one of the largest
individual market self-reported home value drops at more than 9.5% when
compared to first quarter 2008
● The average national age of visitors to
Golden Gateway Financial rose slightly to 69.5 years old from 68.6 years
old in the first quarter
● Slightly less than half of all borrowers were
single or sole owners of their home
A complete listing of fields and data for the
second quarter of 2008 as well as regional market breakdowns is
available by contacting Golden Gateway Financial.
Highlights are below.
Reverse Mortgage Calculator National Averages
Q1 '08
Q2 '08
Average
age
68.6
69.5
Average
home value
$
449,200
$
438,000
Percentage with existing mortgage
51.4%
53.4%
Average
existing mortgage debt
$
157,500
$
159,700
This report clearly demonstrates that senior citizens are financially
aware consumers who understand the impact of the economy on their
overall financial health, said Eric Bachman, founder and CEO of Golden
Gateway Financial.
These individuals are exploring reverse mortgages
as an option, and doing so with a realistic sense of how it can help
them pay off existing debt or augment their current level of income.
The company says its award winning online
reverse mortgage calculator has been recognized as an important
resource for seniors by the Wall Street Journal. It allows users to
enter basic information to manipulate reverse mortgage loan parameters
and then compare lenders based on those fields.
Golden Gateway Financial makes anonymous and
aggregated data from these basic entry fields publicly available on a
quarterly basis.
Benefits of
Housing and Economic Recovery Act of 2008 for America's Senior Citizens
This Housing and Economic Recovery Act of 2008 was
designed to aid homeowners in distress and to support Fannie Mae and
Freddie Mac, however, it also includes important changes that will
dramatically affect senior citizens through changes to the standard
Federal Housing Administration HECM reverse mortgage product.
Portions of the Housing and Economic Recovery Act
of 2008 that directly impact senior citizens and reverse mortgages
include:
1. A single national reverse mortgage lending
limit of up to $625,000
● Benefit to seniors: Expands the amount of
equity available through an FHA insured reverse mortgage
2. Home purchase using a reverse mortgage
● Benefit to seniors: Provides more ways to
leverage a reverse mortgage, including using the proceeds from the sale
of one property to downsize into another
3. Co-op provisions
● Benefit to seniors: Allows seniors to stay in
their own home and community, especially in urban areas
4. Fees capped at two percent on the initial
$200,000 loan amount and one percent on the balance thereafter with a
cap of $6,000
● Benefit to seniors: Reduces total cost of a
reverse mortgage
5. Prohibitions on requiring the purchase of
annuities and other financial products
● Benefit to seniors: Protects senior citizens
from predatory individuals
6. Restrictions on cross-selling financial
products
● Benefit to seniors: Protects senior citizens
from predatory individuals
7. Requirements on counseling protocols, funding
and practices
● Benefit to seniors: Helps seniors to become
more educated and empowered borrowers
This legislation is a solid first step in
alleviating the mounting economic pressures on senior citizens, said
Bachman. These actions will provide borrowers with much greater
flexibility in leveraging the equity that is rightfully theirs, but we
must continue to find even more aggressive and innovative ways to assist
senior citizens.
Editors Notes:
The study concerning financial discussions between
parents and children surveyed senior citizens and the adult children of
seniors, but not necessarily matched pairs. All participants had
directly researched or purchased financial services in the past. The
survey asked both groups individually whether they had spoken with their
families about their parents' financial health as well as the results of
that conversation. Actual percentage responses are available by visiting
About Golden Gateway Financial
Golden Gateway Financial (www.GoldenGateway.com), located in Oakland,
California, is a comprehensive resource for senior citizens, baby
boomers and soon-to-be retirees to assess their financial health at
retirement. Through a unique set of online tools and clear and unbiased
communication, the company helps individuals address "The Great American
Retirement Dilemma." The tools enable users to better assess the
security of their nest egg and to make intelligent choices to fully
enjoy what should be the best years of their lives. The company also
operates the industry's premiere reverse mortgage service with a
proprietary reverse mortgage calculator and a team of trained counselors
to help seniors better understand the product, evaluate whether it is
right for them, and identify their ideal lending partner.
For more information about reverse mortgages or to
access Golden Gateway Financial's suite of online retirement assessment
tools and resources, visit
http://www.GoldenGateway.com.
About Crestwood Associates
Crestwood Associates (www.crestwoods.com), located in Kirkland,
Washington, is a market research firm serving both the private and
public sector.
Keep up with the latest news for senior citizens, baby
boomers
Seniors considering reverse mortgages lowering
their home values, new housing legislation helps older
Americans, says reverse mortgage lender in other studies 
"In
speaking with seniors and their families it is obvious that finances
remain an awkward topic of conversation," said Eric Bachman, founder and
CEO of Golden Gateway Financial. 
"Adult
children should not be concerned about financial role reversal," he
added