This is the inaugural podcast of the TexasLending.com crew. This is one of our shows from our weekend show on KLIF. In it we discuss mortgage rates, lending for first time homeowners, and the housing market in general. 

Kevin: Happy good afternoon to everybody! It’s the TexasLending.com ordered show. Kevin Miller here with our friends Jeff Collins, George Court. We’re here talking about your home loan today. Just finishing up the musical styling of Brian Burns. He did the Texas version of I’ve Been Everywhere. I got a hold of him about ten years ago and he put that together for us. I’m actually going to go see him this week. We have to spruce it up a little bit. We have some old info on there. We have some old addresses, some old license numbers… We’re going to get that all up to speed this week.

Jeff: But the cities themselves, we’re going to keep the cities or are we going to add some more cities or are we going to go state-wide? I mean, like the whole country. What are we going to do?

Kevin: I don’t know, man. I don’t know. It’s all up in the air.

Jeff: We are loaning in Texas, Kansas, Detroit, Michigan… We loan in…

George: California.

Jeff: California. Yes. Everywhere!

Kevin: Just a little different ring to it.

Jeff: Okay. Okay. Well, that’s why I don’t write songs.

Kevin: Well, here we are, talking about your home loan today. We want to share with you all the things about your home loan. Your purchase, your refinance, home equity. We are here for reverse mortgage.

Jeff: Yeah.

Kevin: FHA, VA, USD, Jumbo. We are doing it all here at TexasLending.com. We got them, as they say, and we want to help you out. Make sure you give us a call today. We want to take your call on the air.

It is a big year. As a matter of fact, in four days, the year will be 10% over. We’ll be 10% into the New Year already, four days from now, as we’re in our 36^th day of the year at that time. So it’s interesting that we look at the first one tenth of the year, and we say what happened, and I can tell you, DFW is blowing it out of the water in home buying right now. We are killing it. TexasLending.com is up 300% in mortgage purchase applications since December. The people applying and signing up to say, “I am going to go and find myself a house,†including the ones that are coming back with contracts, our company—our refinances are flat. I mean, they’re the same as December. But purchases are up 300%. That’s big! So we have got a lot of good things coming right here in our backyard. We are going to be closing hundreds and hundreds of loans by month here by March in the home purchase market based on what we’re writing right now.

That’s a lot of money right now. It’s about—we’re talking about 40 to 50 million dollars a month just in DFW home purchases this summer that TexasLending.com will be providing. We look forward to you giving us a call. We look forward to closing your loan quickly with our fast track home purchase program. If you don’t know what that means, we get your loan in and we get your pre-loan application. It’s your credit; your income and we verify that stuff and make sure that you’re good to go when it comes to getting that home purchase contract. Once you get that home purchase contract, we call that the fast track because then we just have to get title survey, insurance and appraisal. You can get that loan closed in maybe10 to15 days, as long as you go through our fast track program. Not many people can do that. Not many people are right here in your backyard ready to offer that. You can come in and see us. You can get us a call. You can apply by Semaphore but you need to make sure that we– we don’t have anyone that’s trained in that yet, but you know what, we will. If that’s what you want to do, we will get them trained.

Jeff: I’m sorry. Trained at what?

Kevin: Semaphore.

Jeff: Sema—

Kevin: Yeah, the flags. Flags. Yeah.

Jeff: Okay. Navy, the flags?

Kevin: Yeah.

Jeff: Okay. For those people that can hear us on a ship right now.

Kevin: It’s just, yeah. Maybe. Maybe you’re stranded on a hill somewhere out there, in maybe McKinney.

Jeff: Okay.

Kevin: And, you know, you’re…

Jeff: And you happen to pack flags with you?

Kevin: You ran out of your phone. You ran out of juice.

Jeff: Okay. But you remembered to pack your flags?

Kevin: Yeah, your flags. Just in case you ran out of juice, yes.

Jeff: Okay. Okay.

Kevin: Yes. There are all kinds of ways of applying for loans here.

Jeff: Yeah. That’s great.

Kevin: So anyway, we want you to go to our website. We want you to go to our website now. Hey, you know what, typically on this show people call us, and the number to call is 888-787-5543. 888-787-KLIF. You can call us, or you you can text us. I’m going to give you this number. You can text us a question. 800-346-8047. 800-346-8047. Actually, that’s my ex-girlfriends number. No, I’m only kidding.

[Laughing 9:58]

Jeff: That would be awesome though.

Kevin: She’ll go, “Hey! What the…â€

Jeff: Hold on. I got an ex-wife’s number. Hold on. Let me call up her number really quickly.

Kevin: So, anyway. So…

Jeff: That would be pretty funny actually.

Kevin: That’s actually Jeff’s mistress’ number. So, go ahead.

Jeff: Don’t do that. Don’t do that. Okay, thank you.

Kevin: I don’t want to give out your mistress’s number.

Jeff: Yeah. Shhh!

Kevin: 800-346-8047. 800-346-8047. George Court’s sitting here, wondering what he got himself into today. His afternoon was going peachy in the 45 degree weather, and now he’s in the hot seat. Mr. Court, welcome!

George: Thank you, Kevin. Glad to be here.

Kevin: We have, we are right now, a majority of reverse mortgage specialists here. We have George who is the manager of our reverse mortgage team. We have Jeff here who moonlights as a home purchase loan officer, but also is, primarily, a reverse mortgage specialist.

George: Yes, absolutely. He knows it cold.

Jeff: Yeah, thank you very much. No pun intended there, right?

Kevin: Yeah.

Jeff: Hey, listen. This is going to be an exciting time because that’s exactly what we’re going to talk about today is reverse mortgages. Now, hold on, before you go changing that radio dial. Yes, reverse mortgages are for those who are 62 and older. However, if you are under the age of 62, make sure you stick around because this applies to you as well. Being able to help perhaps your parents that might be in a particular financial situation. You’ll truly understand what reverse mortgages are really all about and you’ll be able to actually help them get one. You’ll understand all of this as we really unpack the myths behind reverse mortgage, coming up in the next break right here, so…

Kevin: Now, a lot of things going on. The rates have come down a little bit. The stock market’s off about 700 points from the tight earlier this year. We are now in the situation where rates are moved back in about a quarter percent of where they were at the end of the year. Your 30 year fixed are somewhere around 4 and a quarter to 4.3, seven five. 4 and a quarter to 4.3, seven five and if you have an APR below 4.55 there, you’re doing a good job. So there are different qualifications for these loans. You need to have a good credit. Your loan sizes that are between 175,000 and 417,000, they’re going to qualify for the best interest rates. If your loan amount’s a little bit smaller, your rate might be a little bit higher. If you don’t have 20% equity, if you have less than that, your rate’s going to be a little bit higher. If your credit scores are low, your rate will be a little bit higher. But most people are qualifying for 30 years between 4 and a quarter and 5 and a quarter. Somewhere in that ballpark, most people are in that for their rate. Of course, your APRs are typically higher than that. Call us for details, the 15 years are back under three and a half percent. If you’re up four and half or five and you want to get into that 15 year mortgages, get that refinance done– Hey, I want to tell you something. People think refinancers are dead. It’s still over 50% off the entire mortgage market right now. It was 80% of the market, right?

Jeff: Mhm

Kevin: Refinances dropped about—they’re now about 67% since last May.

Jeff: Okay.

Kevin: However, 67% of 80, it has dropped a tremendous amount but the purchase market has also fallen nationwide. DFW, Houston, Austin, San Antonio… Texas, not that way. Texas is leading the nation in the home buying aspects. You know, we have the nice weather down here in the winter. It’s not 400 below zero. Our Michigan branch, out near Lake Michigan, they texted me this week. They have three and a half feet of snow outside their doors and during the day, the wind is blowing so hard with that wind chill and everything. It becomes—even when it’s not snowing, it’s like a blizzard outside. A two foot drift will come up right in the middle of the door, right in the middle of their day. So how do you go shopping for homes in that?

Jeff: With a bobsled or…

Kevin: How do you build a house in that stuff?

Jeff: With flags! What we talked about earlier.

Kevin: That’s why we talk so fast in the North. You only have about four months in a year that you can get out there and dig a hole and put a basement in and put a house on top of it.

Jeff: You’ve got to move fast.

Kevin: You’ve got to move fast, man. You know the reason we talk so fast, though? We’ve talked about it in this show before.

Jeff. Okay, no.

Kevin: Because maybe we never done it before. Actually, it was quite fun when we were kids because when we were standing out waiting for the school bus to come—by the way, back in the 1970s, yes, your parents would drop you off at the school bus when it was 40 below and leave you there with your friends. First thing you would do is you’d take your nostrils, you squeeze them, then you breathe into your nose and it freezes your nose shut.

[Laughing 14:24]

Kevin: Bur if you don’t talk fast enough, your lips would freeze shut and it’s 40 below. You got to talk pretty quick. You’ve got to talk really fast because it’s the only way you can actually talk in that kind of…

Jeff: You know, that really explains a lot about you now, though. As an adult. Those childhood actions that you did.

Kevin: Fear of freezing to death?

Jeff: Well, the whole nose. The pinching of the nose and the lack of oxygen. Things of that nature. It’s starting to all make sense. Hey, give us a call.

Kevin: That’s why I moved to Texas. I had to be around people just like me.

Jeff: Yeah.

Kevin: Right?

Jeff: Really?

Kevin: I don’t know man. I just—so I came down here and now, everyone talks really slow down here.

Jeff: That’s because that’s the Texas attitude, Sir. You know…

Kevin: It’s not the attitude.

Jeff: Yes it is. We’re going to let you pull on in. If you need to pull on in, come on by.

Kevin: It’s like the Weather Channel. The weather channel always has everything being affected by the weather.

Jeff: That’s why we call it the Weather Channel.

Kevin: The super bowl being affected by the weather and they take ownership of earthquakes. They take ownership of anything that happens on Earth as weather. They go out there and they go, “Well, we’re in charge of reporting this because we are the Weather Channel.†But one of the things is, I do want to say, is the thing that happens here in Texas, that the reason people talk so slowly, is—I’ve figured this out. I figured it out. It’s because the weather. When it is a 170 degrees out on August 15^th…

Jeff: Okay.

Kevin: You better be talking slow, or you going to start breaking a sweat just talking! You’re going to break a sweat from just talking to somebody.

Jeff: Okay.

Kevin: Now, that doesn’t happen in Michigan.

Jeff: Right.

Kevin. That doesn’t happen up there.

Jeff: Because you guys never hit a 100. Period.

Kevin: We only get a 100 like once—about three times every 20 years or so. Yeah.

Jeff: Okay.

Kevin: It will get up there.

Jeff: Okay.

Kevin: It’s kind of humid, too, because there are a lot of lakes up there. There’s a lot of water. It’s just a steam bath. But, you know, when it does get warm and it is that way. But we’re here talking about your home loan!

Jeff: You would think so!

Kevin: We’re talking about your home loan!

Jeff: At least that’s what I thought we were signed on before!

Kevin: You can call us about the weather if you wish and you can call us about your home loan. We’re going to get into reverse mortgages in a little bit. But yes, rates are down. Home purchases activity in DFW is hot. We have hundreds, I’m telling you, hundreds of people out there shopping for homes right now that applied for loans with us in January. If you’re getting your home for sale and you want to get it sold now, it’s a good time for you. I was talking to a builder just last week: Peter Shattick with Shattick Homes. He’s one of our friends and we were just talking to him and he says, “Biggest thing for us is just finding places to build houses. Because people are buying houses like crazy.†If you are a builder and you have a home for sale, you know what he says the biggest issues is though? He said homes that face south. He says that’s your opportunity. Homes that face south. Certain demographics don’t buy homes that face south. It’s like against their religion or whatever it is. Maybe it’s this just an old—it’s an old custom and so, they’re up there. They have some homes for sale that are facing south right now with some pretty good deals, is what he said. We’ll get him on there to dispel that myth if I’m wrong, but that’s what he told me this week. I grew up in a home that faced south and I said I love that. That always reminds me, the sun’s always got to come up to the left.

Jeff: Right.

Kevin: It’s going to fall on the right and that’s what I’m used to in my life.

Jeff: I wonder if that has something to do with back in the day. In the sense of before AC and heaters, that you would open up the windows, and that actually created these air drafts. So if your home is facing a certain direction…

Kevin: Absolutely.

Jeff: Then that’s what it’s all about.

Kevin: Not only that. In the afternoon sun, when it is 170 and you don’t have air-conditioning and that sun’s beating down, you don’t want your—you know, it depends on where that sun is coming from. I don’t know why they don’t want it coming from the South but people picking their homes—I don’t care.

George: Yeah.

Jeff: I would like to just have the door. I think that’s pretty important whether it’s facing South or North.

Kevin: Other people do… But builders know that. Maybe builders can chime in and give us a little bit more idea or maybe you grew up with a family that says, “No, never buy a home that faces this direction.†Over in certain parts of the world, they like building their homes on mountains, right? So for that extra protection, you know, for…

Jeff: Maybe it’s because that’s all they have.

Kevin: I guess enemies and other things. Tornados.

Jeff: Yeah.

Kevin: If you’re on a side of a mountain, you’re probably not going to have a tornado steaming through.

Jeff: We almost moved to the Carolinas. In there’s beautiful mountain ranges out there and everything. It was kind of interesting because there’s some flat land and there are some mountains. Some of the houses, the way they engineered them all, as far as the mountain part, it was just absolutely beautiful. I mean, they built these things into the mountain. It wasn’t just sitting on the mountain. It was actually part of the mountain.

Kevin: We all want to do that. We just don’t have the energy to go out there and architect it and then have someone build it because then you have to go find that loan for it. Well, we’re here to help you with that loan decision. We’re here to help you out make some decisions. Call us today, up here at the station. 888-787-KLIF. 888-787-5543. Call our office right now. Melanie has been here since 8 in the morning. She is ready to go. She is warmed up by now. She had to do some calisthenics earlier. You know, high steps and things like that. But she was warming up in the morning you don’t want her coming into it cold answering your phone. She’s warmed up now. She has been here about 5 hours. Call her at 972-387-4600. 972-387-4600. The thing about Melanie, and everyone says it when they meet her, you think that her smile is fake because she has a constant smile on her face.

Jeff: Right.

Kevin: Now you got—no one, you can’t have Melanie. None of you can have her. We have her.

Jeff: So there’s no recording calls going on right now.

Kevin: No one can have her. We love the smiling Melanie. We love that she’s here every day and when you say you love her smile, she smiles more. Then, it’s just a great thing to have her around your office, to have someone like that. So, you can give us a call. You can talk to a smiling Melanie if you’re having a down day. She’ll lift you right up.

Jeff: Smiling Melanie.

Kevin: It’s supposed to – I was looking at the weather for tomorrow and it had three rain droplets, and a snow signal.

Jeff: Okay.

Kevin: That’s like, I don’t know if that means they’re trying to tell me you have three fourths a chance of rain or a quarter chance of snow or it’s supposed to snow tomorrow night.

Jeff: Maybe it’s a gradual thing. It will start out as rain and then move into snow. What do you think?

Kevin: You know what?

Jeff: Does it really matter?

Kevin: You’ve been reading the weather.

Jeff: I actually support the Weather Channel for what it is, being the Weather Channel. So, yeah, absolutely. More to come. Just stick around. Believe it or not, we’re going to dive head on in to the reverse mortgage world and find out what it’s truly all about. Right here on the News Information 570-KLIF.

Jeff: Let me tell you something. I’ve actually watched two YouTube videos on how to learn to properly play the cowbell.

Kevin: Okay, so you need to watch a third.

Jeff: That’s petty harsh. George Court. A special guest.

Kevin: Is that one in the afternoon during workday, or…

Jeff: No, no, no. It would never be on company time. Okay, so absolutely not. Now then, George Court, a very special guest. We’re going to talk about reverse mortgages. We’re going to be able to unpack a lot of what this is all about. So George, welcome to the show. Hit the cowbell and then we’re going to go ahead and do…

Kevin: Go easy.

Jeff: You gotta aim for it. You gotta aim…

Kevin: Don’t break the stick!

Jeff: Dude, it’s not really… Okay. You got anger issues, man!

George: I do!

Jeff: We really need to talk about that anger here in a little bit.

George: You facilitate that.

Jeff: Oh… Give me back the stick.

Kevin: I think it might be one of my new hiring mechanisms. You can tell by the way someone plays the cowbell whether they’re fit for your culture.

Jeff: Okay.

Kevin: I think it’s one of our new things.

Jeff: Yeah.

Kevin: We’ve seen it. People come in now. They’re hitting the cowbell and we get a little bit of glimpse into how long we’ll want them to actually talk on the radio with us.

Jeff: Oh, I’ll tell you this… Let’s see what Phil thinks.

Kevin: You’re going to need another stick. Let’s see if you have a second batch.

Jeff: Ask Phil what he thinks about the cowbell. How would he hit the cowbell?

Kevin: Hey Phil, you are on the air here with us here in Dallas. Don’t mind us, man.

Phil: Okay.

Kevin: We’re just trying to get by. Manage the mortgage business and it takes a lot.

Phil: You mean I don’t have to make a comment about the cowbell?

Kevin: It’s all yours, man! You are on Dallas live!

Phil: No, actually I am calling you for advice. Rather than giving you guys advice about the cowbell. I’ll tell you what. I’m curious about a purchase reverse mortgage. I understand that this is a possibility, but I’ve been doing a little research online about it and just want to get your guy’s opinion because I know you all are experts.

Kevin: You know what’s interesting? I’m going to start out first because we’ve got a reverse mortgage specialists here. They’re going to answer all questions about what reverse mortgage is.

Phil: Right. Okay.

Kevin: What I can tell you, that waiting for the reverse purchase mortgage to come out, is like waiting for a license to do mortgages in California. We started it two years ago; a year and 8 months ago. It came through two weeks ago. I’ve got 15 state licensed in two weeks or less. We waited for a year and 8 months to get our California license done.

Kevin: Now I’m segueing into—we’ve been waiting for how long to get that home purchase reverse mortgage loan guys.

George: A lifetime. But it is getting closer, there’s no question but we don’t know when it’s going to happen.

Phil: Okay, I thought that you’ve already—I thought that it had already been approved.

George: It has been approved. Everything is taken care of except for a few modest things like—the title insurance industry is not clear on just what sort of title insurance they’re going to be able to offer in the resolution of that particular thing is not going to happen before—easily before March.

Phil: Okay, is this a state by state approval process or will this be a national one-size-fits-all for every state… What will the determining factors be?

George: We were the singular state that didn’t allow the reverse mortgage purchase. The other 49 were all set to go.

Kevin: We’re the only state in the country that doesn’t allow cash-outs on VA and FHA loans!

Phil: Yeah, alright, so…

Kevin: So we’re just, we are special that way.

Phil: Actually, my plan is to—our plan is to sell our house here in the Dallas area and probably move to Florida. Are you guys doing business in Florida at this point?

Kevin: Yes, we are. We are licensed in about 16 states; Florida being one of them. We did get our California license and as soon as we get Arizona, we’ll pretty much have every Southern border state. I think except for Mississippi and Georgia. We still have to get those, too, but from South Carolina across—yeah.

Phil: Okay, alright. So, is the reverse mortgage for purchase available in Florida right now? If I find a house down there next week, could I potentially do it that way?

George: Yes, you could. It’s been in place since the inception of the program and we have a properly licensed reverse specialist for the state of Florida who can help you.

Kevin: I want to point out something about the title insurance thing. Insurance companies in Texas are governed, right? By the Texas Department of Insurance. They govern the insurance and how things can be done in this state. So, yes, they are going to be particular rules about how they do those things. Just again, I’m going to back to the cash-out rules. There are particular things that title companies do on Texas cash-out loans that are required, that are not required in other loans. To make sure that the title companies can properly insure those mortgages in case—this is a homestead state, right? There are certain rules regarding, you know, these kinds of loans they have to make sure they get it just right.

Phil: That brings up a couple of questions. Is Florida homestead state also?

Kevin: I believe that it is, yes. But we do loans down in Florida and—it’s just a different rule down there, you know. Again, this Texas home equity rule, which is one of the reasons that the HECM loans down here had some issues in the beginning. The home equity conversion mortgages, the reverse mortgage, is a cash-out. But they kind of separated it from the Texas cash-out loan statutes. It actually falls under an FHA loan. So it’s a completely different loan. It fall under different rules for a lot of different purposes, a lot of different regulations are different than that. So you have this Texas cash-out thing they got to mix in with the home equity conversion mortgage thing, which is going to mix in with the homestead thing, which is going to mix in with the home purchase. They have to figure out how they’re going to make that work here in Texas, different than in any other state. Though Florida is fine and you can get one down there any time.

Phil: Do you know what the down payment needs to be? It looks to me like it’s gotta be somewhere in the 45% range. Does that sound about right to you?

George: That’s about right. It’s all a function of your age.

Phil: Yeah, well I’m…

George: It could well be closer to 50%.

Phil: Okay.

George: How old are you?

Kevin: How young are you, Phil?

George: You’re always more politically correct.

Kevin: Yeah, sorry I have to make sure you’re asking the question right. How experienced are you, Phil? So anyway, the thing is, if you’re—like my grandmother lives down there. She’s 90. She would probably have to put 20… 25% down.

Phil: Yeah. Well, I’m about…

Kevin: Is it about 25%?

George: 25 to 30. It’s really been ratcheted back.

Kevin: Yeah.

Phil: I think, for me, it’s going to be in the 40 or 45% range. I’ll be 71. My wife will be 69.

Kevin: Yeah.

Phil: When we do this.

George: 45 is a good estimate.

Phil: Yeah, that’s probably close enough to the ballpark. You know, there’s always an issue when you need money from the house that you’re selling to buy the house that you want to buy. Do you know if there’s a way to get all the paperwork done for the purchase reverse mortgage? Then, once I sell my house here in Dallas, have that money available so that as soon as I find something in Florida, you know, we’ll be able to go forward with this?

George: You can get all the preliminary paperwork taken care of.

Kevin: I would suggest it because you have to go through some counseling to get a reverse mortgage. You want to get that out of the way and some other things. Things that are easier during the process for reverse mortgage. But sometimes, for some reasons, even though you have all the documentations, sometimes they just take time.

Phil: That’s my concern. Okay. Well guys, I appreciate it.

George: But do call us.

Phil: Oh, I will. Yeah, I will. I called you today, didn’t I?

George: Absolutely! Absolutely!

Kevin: We have that team up here that does reverse mortgages and they specialize in it and we’re happy to help you out. Thanks for your call, Phil!

Phil: Thank you.

Kevin: Alright. Good luck with things.

Jeff: Whoa, whoa, whoa. Phil, are you still there?

Kevin: I think…

Phil: I’m here.

Jeff: Okay. Phil, you liked the cowbell, didn’t you?

Phil: You want an honest answer on that?

Jeff: Well, no.

Kevin: Depends. Here’s the deal.

Phil: I think I just gave you one, didn’t I?

Jeff: Yeah, maybe you did. Hey, Phil, I think we lost ya! Didn’t we just lose Phil? That’s so sad.

Kevin: You’re breaking up.

Jeff: That is so sad.

Kevin: You’re breaking up. Thanks, Phil.

Jeff: We appreciate the call.

Kevin: So anyway, see Jeff, now… Jeff, I can tell now you’re getting a little self-conscious about your cowbell over here.

Jeff: No, it just drives me to do it more.

Kevin: Yeah.

Jeff: The folks that don’t do it, they just haven’t learned to appreciate it yet. That’s all and I get that. That’s a learning curve! Not everybody is where I’m at, Kevin. I can’t expect the rest of the world to be where I’m at.

Kevin: This is talk radio 517 KLIF. You’re listening to the TexasLending.com mortgage show. We are taking your phone calls up here. We have all lines open at 888-787-KLIF. 888-787-5543. Call our office. Melanie Morris is there. She wants to take your phone call at 972-387-4600. She is going to get you in touch with a loan consultant right away. I already told you that they’re looking at rain, maybe ice, maybe snow tomorrow night. Monday is not going to be fun. Get your application in today. The hardest working people in the show business and mortgage business anyway. They work here on Saturday. If you want to mext us, you can mext us at 800-346-8047. That’s 800-346-8047.He’s looking at me. What’s wrong?

Jeff: Mext. Is that the flag thing again?

Kevin: That’s the mortgage text. The mext.

Jeff: The mext.

Kevin: Yeah.

Jeff: Did you just create a word?

Kevin: Yeah!

Jeff: I told you about doing that!

Kevin: There is sexting. There is mexting.

Jeff: No there’s not! What are you doing?

Kevin: If you can’t spell mortgage, lext us because it’s a loan text.

Jeff: So there’s lexting or mexting. I’m going to vote for mexting. If we’re going to really do this, I’m going to say mexting is the way to go.

Kevin: Yeah, mhm.

Jeff: Okay.

Kevin: Yeah.

Jeff: So, the number again, so people get even more confused… Is what?

Kevin: The number is 800-346-8047.

Jeff: That’s for mexting purposes only. Don’t try anything else on that. Just mext on.

Kevin: Yeah. But if you’re eating a taco while you’re doing it, can we call it a text-mext? If you want?

Jeff: We could. How about we ask George Court a little bit more about the whole reverse mortgage. I mean, he is our special gust here today… George?

George: Well, thank you Jeff. You introduced me by talking about debunking the myths that exist?

Jeff: Right.

George: Well, the number one myth that we deal with every day is, “The bank is going to take my house.â€

Jeff: Right.

George: We don’t want your house. We really don’t want your house. We’re not going to take your house.

Kevin: Look what happened the last time the banks had to take everyone’s house.

Jeff: It didn’t work out too well!

Kevin: Do you really think the banks wanted anybody’s house? They wanted to get loans paid back. They wanted interest. They don’t want to go sell these things. They don’t want your house. They don’t. They didn’t make money off of this thing. Well maybe they did. No one else did. They did. I mean, they got the bail out but…

Jeff: That really has nothing to do with the whole reverse mortgage though. I mean, a lot of the fear is the idea of lack of knowledge. I mean, people do. They get fearful when they don’t really know what’s going on. So what else, George?

George: Since you mentioned the fear, the big fear that we’ve seen people afraid of doing the reverse mortgage has caused them to put off making a decision they’ve gotten themselves into some really dire circumstances. People who are on the verge of foreclosure, coming to us in the last minute. Fortunately we are able to help many of them but no proper planning.

Jeff: Well, and that’s about place to be in al sincerity. The reverse mortgage, yes, can help rescue folks. But more importantly, the reverse mortgage can be a preventative tool. But it just hasn’t been exhibited as such.

Kevin: I fully understand people’s apprehension to get a reverse mortgage. I mean you’re sitting out there and you’re wondering, “Is this the right place? Should I’d be getting into this? Am I putting myself in a good position?†It’s like when you’re walking into this studio with Jeff and his cowbell. You know, we are actually….

[Laughing 37:00]

Kevin: we have to slowly… we have to…

Jeff: It’s okay. I understand.

George: But at least you’re across the desk from it.

Jeff: The cowboy and cowbell envy. That’s what it’s called.

Kevin: Okay. So anyway, we’ve talked about it before. It’s not a decision for many people about whether they want reverse mortgage. Many people need it because they can’t make their mortgage payment anymore and they want to stay in their home another 30 years. They just can’t make the payment. Or they know they’re going to be out of a job within 5 years because they’re going to retire. They don’t want to have to sit there and worry about whether they’re going to make their mortgage payment. They want to stay in the house, so they can think: “Okay, all I want to do is pay my taxes and insurance and then live of my pension, my social security, whatever I’ve saved up.†They don’t want have to think about those other things.

George: That’s a preventative aspect of the reverse mortgage. Being able to look ahead and being able to say: “I know that this is going to be financially challenging.†So why not go ahead and have that off before it even happens.

Kevin: People don’t want to have to file bankruptcy. It’s a business’s decision. I’m not saying that getting a reverse mortgage is that but I’m saying it’s an opportunity for you. There are choices out there that allow you to get some peace of mind back in your life. To stop the stress. I know you’re stressing out. Maybe you’re not eating well. Maybe you’re not sleeping well and you’re thinking and maybe you have a relative who is going through this. Maybe you haven’t thought about them much and what they’re going through.

Jeff: Right.

Kevin: And I talked to my grandmother five years in advance and said, “If you ever need it, it’s there for you.†I will never talk someone into getting a reverse mortgage. It’s not what it’s here for. It’s there if you need it, man. So we’re here to offer. We’re here to provide it for those who need it because the people who get it are the most grateful clients that we have.

George: Absolutely.

Kevin: They’re the most grateful of the clients that we can possibly have and they’re shell shocked when it’s over. They say, “I just can’t believe the pressure that was taken off my life. I can stay in my home for the rest of my time, paying taxes and insurance, and I’ve never realized…†They never realize how stressed they were.

Jeff: Yeah.

Kevin: They said, “I didn’t realize how stressed I was!†Have you ever been like that? Where something got taken off, the weight off your back, and you go and, “I didn’t realize how stressed I was until it happened.â€

Jeff: Yeah, over my ex-wife. Now let me tell you something real quickly. George has got an incredible case right here before him but we’re going to dive into that when we come back from that break. Not only that. We still have coming up. Are you smarter than the loan officer? An opportunity to be able to win a gift card. All you have to do is call in and stump Kevin. I mean it’s really that simple. So that number. You want to go ahead and get on the phones. 888-787-5543. Again. 888-787-5543. That and a whole lot more! Picking Kevin as mine, coming up! Right here on News and Information. 570-KLIF.

Jeff: Oh, yeah. There you go. I tell you. That’s beautiful! Is that not awesome? It’s just cowbell!

George: Keep practicing.

Kevin: that’s why we don’t allow margaritas before the show.

Jeff: Feel the cowbell! From the side. From the top. Side. Top. Here we go. Beautiful. Beautiful! Brought to you by TexasLending.com’s mortgage power hour.

Kevin: We’re not going to allow you into any of the highway lanes this afternoon.

Jeff: Right. Somebody has to come pick me up. Take me home. Somebody help pick me up. George Court. This very special guest. Thank you very much for joining us.

George: Thank you.

Jeff: Help us to understand a little bit more about reverse mortgages and I really do believe that by us going to the phones right now we have a young lady, perhaps? We want to be, you know, yeah.

Kevin: Hey, Bree. You’re on the air with us. Kevin, Jeff and George. How are you?

Bree: Just fine and very, at this point, frustrated with reverse mortgages and not because I don’t understand…

Kevin: Now, Bree. Here on the call screen… Bree? It’s says, you’re in Daingerfield, Texas, is that right?

Bree: That’s true.

Kevin: Are you telling me that you’re getting no respect…

Jeff: Uh-oh.

Kevin: … from your reverse mortgages?

Jeff: Uh-oh. That was… That was…

Bree: Well, we have to deal with people like in Houston or California or…

Kevin: Okay.

[Laughing 44:28]

Kevin: That’s why they invented beer, Bree.

Bree: Not only that but they think, because I’m 75 years old, I don’t understand what a reverse mortgage is and I certainly do.

Jeff: Right.

Bree: It’s a HECM. It’s just, all it is, it’s a home equity loan that your interest accrues against the principle for the duration of the loan.

George: You’re hired.

Jeff: You got it! You’re coming to work for us!

Kevin: Yeah.

Jeff: Absolutely.

Kevin: You say you have a frustration with it? What’s the frustration?

Bree: Oh, the first frustration is, is that they cannot tell you exactly, and they should be able to for my age, what the ratio is, the loan ratio to value. And then they…

Kevin: The people you are talking to?

Bree: Uhuh. They can’t tell me a definite number.

Kevin: Are you talking to someone who specializes in reverse mortgages or are they kind of doing this on the side?

Bree: Yes, if I name the company, you would know them right away.

Kevin: Well, we have people here who specialize in them. We have about five people. That’s all they do, is reverse mortgages. When you call up, if they don’t know the answer they will make one up for you, Bree.

George: No, we wouldn’t.

Bree: But that’s just it, I don’t want one to…

Kevin: Oh, you want us to make it… no, actually, I’m only kidding. We actually have… We actually know how…

Bree: Then I have a situation where they—I know that there are two private mortgage insurance points. I mean there are two ways you can look at that rate of the private mortgage insurance that you’re going to pay.

George: Okay, yes. Well, you’re actually going to pay FHA’s mortgage insurance.

Kevin: So you’re paying Mortgage insurance to the Government through HUD and George, explain that.

George: You’ve got two options. Do you have—do you owe anything on your house now?

Bree: I owe—well, this is the deal. I’m buying this house. I was in the process of buying the house and then what happened was, the seller hadn’t paid his taxes on the house for 5 years so he owed some other liens against it. So, I had to go in and negotiate a short sale on the house. And so I will owe $38,000. The net on the house is $38,000.

Kevin: What’s the value of the home?

Bree: I would think—well, the tax appraiser appraises it at $117,000.

Kevin: Okay.

Bree: It’s a house with six acres and it has a carriage house on there, as well as the residence.

Kevin: Okay. So, you want to buy it and then you want to turn around and get a reverse mortgage on it?

Bree: Well, I wanted to. I delayed going into a reverse mortgage because I knew that Texas had passed the new law regarding buying the house.

Kevin: Yeah, it’s like, they passed the law that allows it. Now they just have to make sure that everyone in the industry is lined up to do it. It’s kind of like they passed this whole ObamaCare thing. They just have to make sure that they have a website that will work. Until it does, it’s not working out that well. It’s not that same scenario. It’s more logistical here. The insurance companies still have —the title insurance companies still have to get their ducks in a row to make sure that they have all the procedures in place to make sure that when they go to insure these properties, they’re not bumping into unwanted things.

George: So the two different mortgage insurances that you’re talking about have to do with how much you’re going to borrow.

Bree: In other words, let’s say that I was going to borrow $90,000. I mean, let’s say that my loan to value would be $90,000. Let’s say that I’m purchasing the house of the value of that. Let’s say that the appraised value of the house is $90,000.

George: Okay. So the loan that you’re going to get before any closing costs are considered, would be about 59% of the value of the home?

Bree: 59%?

George: Right.

Bree: That’s a true number?

George: That’s a true number.

Bree: At 75. I was born in 1938.

George: Right. That’s 75 years old.

Bree: Right. So, what would your rate on the private mortgage insurance be?

George: Good question. If you’re only taking—it’s a complicated answer. You’re eligible to borrow two different amounts. If you take a smaller amount, the smallest amount…

Bree: mhm

George: That you’re able to take, it’s going to be one half of 1% initially. But if you take the maximum amount that it’s available to you, it’s going to be two and half percent of the amount that you’re—of the amount of the value of your home. So, there’s a considerable difference, but you have to come out of pocket with a lot more money if you take the cheaper alternative.

Bree: Well, that’s another thing.

Kevin: When you say “you have to come out of pocketâ€, are you talking because she’s going to put some money down.

George: She’s going to be buying the house and she’s going to be making a down payment. The down payment requirement is going to be larger in the cheaper alternative, greater in the more. The down payment requirement is going to be less in the more expensive version of the thing.

Kevin: Mhm.

Bree: But you wouldn’t take 59% of the $90,000?

George: 59% of $90,000 and then there’s an option where you can agree to take less than that amount. Some 60% of the amount that’s available to you. If you take 60% of it, then you pay a lot less in the way of…

Kevin: You pay less insurance, but you’re going to pay way—talk take $10,000, you’re going to give away $10,000 so you don’t have mortgage insurance on the mortgage. But you’re not going to be paying the mortgage insurance. It’s just going to come out of the loan. You’re going to be paying the taxes and insurance on the property.

Bree: Right.

Kevin: The mortgage insurance is something that’s going to be financed.

Bree: I know it’s financed, but, when they do the… I got the three comparisons, alright? It looks like to me, like they explained to me, I said “well what happens to this other $4,000†and he said, “Well, on the adjustable rate, well you just don’t get that, you know. You only get one payment upfront, and then the rest of it you just lose.â€

George: Well, what happens is… Let me explain it to you this way.

Bree: Alright.

George: There’ll be a mortgage on the property that you’re not paying. Let’s say you get—I’m just going to throw a number out. $50,000, okay? That’s your reverse mortgage amount.

Bree: Alright.

Kevin: Let’s say the interest rate is, call it it’s 5%. I’m just going to throw that number out there. So every year that you’re in the home, you’re going to be compounding 5% on top of that principle balance.

Bree: Right.

Kevin: So after one year, you’ll have $52,500 you owe.

Bree: Right.

Kevin: Well, you’re not just giving all that money away if you didn’t borrow the money and let’s say you decided three years from now to not to sell the home, you’ll probably still have some equity in that property and you can sell it. You’d recoup some of that money. If you stay there for the duration and as long as you don’t watch the cowboys (because that will shorten your duration), then you’ll be able to –  as long as you stay there for the duration – yes, then the interest would accumulate. It would compound to the point where someday the interest will surpass possibly the value of the house, compared with the interest plus the principle.

Bree: Yeah, I understand that part. But I don’t understand when they give you the three comparisons, the libor.

Kevin: Uhuh.

George: Mhm.

Bree: On the three comparison where you can go the adjustable rate or you can go the …

George: The fixed. The saver fixed.

Bree: Yeah, the saver fixed or the other way. It was about five and a half percent. Oh that was the fixed rate.

Kevin: Are you guys saying that the saver fix has been disbanded?

George: Back in September. The actual saver program went away. So…

Bree: Right.

George: So all of the numbers that they’ve thrown at you and those comparisons, it’s all rather confusing. Really, the kind of thing I would feel most comfortable with, getting with you on the phone, outside of here.

Bree: Uhuh.

Kevin: So, you guys can sit it down and talk about it. But I tell you. You know, the one thing to think about is, the reason that it’s such a big decision – theses reverse mortgages – is there’s so much equity on the table. That’s the real deal here. I mean people—if you’re staying in your home, you’re going to be paying taxes and insurance anyway. Everyone is doing that, whether they have a mortgage or not. Whether your home is paid off or not. You’re paying taxes on the property and insurance to make sure that it can get re-built. But the real question is, when you’re getting into these mortgages, it’s not like you can borrow 95% of the value of your house. Or 90%. We’re talking about a loan that’s going to be 50 to maybe 75% of the value of your house and you’re leaving all that equity out there. That’s where people – you know, the amount of money you’re getting – I can tell you, the government came out and they changed the rules this year, Bree.

Bree: Right.

Kevin: When they changed the rules, what they did is this. They said, one, we’re going to take more. The government did. You’re going to get less.

Bree: Right.

Kevin: And you’re going to like it. The problem is, now you’re dealing with us to go and get you the loan. Us lenders, we in the lending community. It kind of creates more of—actually more anxiety, a little bit more mistrust, because in this industry, a lot of that was created a couple decades ago leading up to 7 our 8 years ago. Where these mortgage companies are now riding some pretty good business but we’re stuck with some pretty tight regulations and offer some opportunities to you, the consumer, that might not sound attractive but they’re the ones that are insuring the loan. We have to give them that. The FHA is ensuring the property, and so they’re going to make guidelines to make sure that they’re solvent. Especially in these reverse mortgages because a lot of these homes will, someday, have principle and interest values more than the actual appraised value of the home. So someone’s going to be eating that because you know that, as a bank, that is accruing that in their books as a profit. Then, when they have to take the house back, but you know, 50 years from now they might not have as much profit as they thought.

Bree: Well, but they might not be taking the house back.

Kevin: That’s right.

Bree: Because you have… once you are deceased, you have 18—the state has 18 months to liquidate on the house. You know, re-finance it…

Kevin: I’m thinking about 12 months there. Yeah, your heirs, or whoever that is, has 12 months to be able to refinance it or resell it. If there’s equity in it. If they want it, then they have that opportunity. But you’re really educating a lot of people out there today, Bree, with your questions. You’ve brought lot of things to light here, I think people—you can have a very sound, practical, discussion about these loans. You can give very educated about them, so when it does come time, like it may come time for you when you want to get this loan, at least you’re educated on it. You’re not coming into it blind and we want you to be as fully educated on the deal as we are because that’s just a choice. Do you need it? Do you want it? If you want it, we can get it to you. If you don’t, hopefully there are options that you can use that are giving you peace of mind.

George: The great thing about this.

Bree: I’ll tell you what educated me most is when I was at my counseling. I already have my counseling certificate.

Jeff: Excellent!

Bree: I had—it was greater Dallas counseling services that did the counseling for me. They were excellent in explaining to me a lot about, you know, the bottom-line numbers.

Kevin: Yeah, that’s one of the things to bear. Everyone’s going to go through counseling before you get one of these loans. And so, I’m glad that we had this talk on the show about reverse mortgages today, and Bree, we’re going to let you go for now because we’re running out of time.

Bree: Right.

Jeff: You do need to make sure that she calls in. If you don’t mind, if you have a pen and paper in front of you, if you could, just call our office because we have some reverse mortgage professionals right here, right now. They can give you those numbers that you’re looking for. The percentage breakdown and everything. They’re going to be able to really answer those questions. It seems like you still don’t have a really solid answer on. So, that number to call is 972-387-4600. Again, it’s 972…

Bree: Mhm. I have it.

Jeff: Okay. Great. 387-4600.

Bree: I will say this, for everyone that’s out there. All of my family, my sisters have reverse mortgages and live in the Dallas area. It’s the best thing that can happen for us senior citizens.

Jeff: Thank you very much.

Kevin: And you know that there are people out there scaring people and are not getting these loans and losing these houses. I appreciate you bringing that to light and sharing your story because, yeah, and your family’s story because they are useful for a lot of people. They can stay in their home and just pay taxes and insurance and not worry about a principle payment that you are running into.

Bree: You can continue to re-model. You can take some of that money and do some re-modeling that you want for later on. A special bathroom etc.

Jeff: You can make cookies with the money and send me a couple of cookies maybe, too? That’d be nice. Around Christmas? I’m just saying. I mean you don’t have to. Just a thought.

Bree: Okay.

Jeff: Hey, give us a call, ok? Let one of our licensed professionals really break this down for you because it’s not too late for you to really be able to do business with us, especially since you already had counseling. Make sure that you pick the company that’s going to work best for you. So give us a call.

Bree: I am.

Jeff: And let us have a chance. Okay?

Bree: I certainly will. I’m going to call you back in a few minutes.

Kevin: Fantastic, Bree.

Jeff: Fantastic. Thank you very much.

Kevin: And actually, we’ll be off the air in a couple of minutes and if you want George and Jeff, you guys will probably be upstairs fielding hundreds of phone calls.

George: We’re looking for Bree’s call.

Kevin: And you can call us during the week. You can call us now. If you have a family member, if you’ve been driving around and maybe got stuck on this channel and said, “Okay, I’m just going to listen to this, listen to what these people have to say.â€

Jeff: Because the button broke? “Oh Man, the button, I cannot get off this! I cannot get of this channel!â€

Kevin: Yeah. Yeah, well.

George: It’s because you like more cowbell. That’s really what this is about.

Kevin: Okay, well, we have about a minute left. We’re just going to start winding this thing down here.

Jeff: We didn’t give away any gift card. Here, let me win a gift card.

Kevin: We slow talked with Bree, so I didn’t have to, you know…

Jeff: Okay, so I get a chance. So because we don’t have anybody, we’ll give George a chance. George, ask Kevin a question. Any question except for country music and you can walk away with a gift card.

Kevin: He knows how dangerous that is. It’s a loaded gun.

Jeff: Okay. Go.

George: Country music, huh?

Jeff: No, no, no.

George: But I want to ask about country music!

Jeff: Okay, then you don’t qualify. Okay. Back in the sixties…

Kevin: Allen Jackson.

Jeff: Dang it!

Kevin: Because that’s the only answer that I’ve got.

Jeff: That’s good.

Kevin: That’s the only thing I know. Allen Jackson. Yeah. I heard there is a guy named George Strait.

Jeff: Or Tito Jackson, depending on who you want to do. Listen, coming up next week, alright. This has been a phenomenal show. George, thank you very much for taking the time to be able to share your expertise. Coming up next week, we’ve got Chris Johnson discussing the benefits of going into a 15 year versus a 30 year. What’s the difference between a 30 and a 15, we’re going to have all of that being able to be discussed right here next week on news and information 570 KLIF.

Kevin: So long everyone.

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