Lessons Learned in Caring for an Elderly Parent

The mortgage industry may be what brings us together, but there are many other aspects of life we all have in common.  One area of life we share is the caring for our parents in their later stages of life.  I would like to share with you my experience concerning this and ask others who have or are dealing with the care of their parents to share their experiences to help others prepare with this part of life.

I have been doing my best to care for my 95-year-old father, living on his own in San Antonio, TX while living and working in Denver, CO.  My father is a widower and is suffering from dementia.  He will not move to Colorado and will not move into any type of assisted living or nursing facilities.  Last year I was with him over 4 months out of the year, a week here… 10 days there.  It changes your ability to make a living and causes a financial drain with traveling and supporting your family.

I wish I had sat down with my father years ago and discussed his finances, his wishes, and needs – my wife urged me to do so.  He was doing fine.  I thought there was no need and put this off.  But, in a New York minute, situations and urgency change everything.

I am writing this to share in hopes others will also share experiences and provide some form of guidance.

My stepmother passed away in 2011.  My step-sister, since that time, has been a God-send in helping me and visiting my father.  She would spend a day with him every week, take him on doctor appointments, drive him around town to get out of the house and take him to her home on holidays that I could not be there.  But, that changed when she and 3 generations of her family were gunned down in the First Baptist Church in Sutherland Springs, TX on November 5, 2017.  Her name was Karla Holcombe – she is incredibly missed.

I have been paying all my father’s bills for the last 5 years and am jointly on all accounts.  My father’s wishes have always been to pass in his home.  But, physical and mental health can sometimes, as well as, distance cause issues to honor our parent’s wishes.

Let me share some of the issues:  solicitors preying on him for donations, Realtors wanting to sell his home, scammers trying to sell everything, fake bill collectors, home cleaners stealing, hearing loss, not eating, falling down, leaving the stove on and trying to heat up his dinner plate, loneliness,  new roof from hail damage, not taking his medication, short-term memory loss… and the list goes on.  But, I would not trade any of these issues or others that will occur for me caring for my father.  He’s the only father I have, and I love him.

Please take the time, make your parents take the time, to discuss their desires when they are unable to function on their own.  Do it sooner than later.  Get involved in their finances to prepare for the costs.  Assisted living starts at $2,600/month for a basic studio, but if they have meals prepared or someone to clean, the cost just increases.  The cost can escalate to $4,000-$10,000/month, very quickly.  Check into a long-term health care plan and buy them now.  Get as much coverage as you can, costs will only escalate.  Medicare does not go far and as far as Medicaid is concerned, you parent’s assets must be virtually nil.  Seek the advice of your CPA and attorney for setting up a trust.  In order to get full Medicaid assistance, the trust needs to be set up at least 5 years prior to applying.  But, then you must be aware of any tax implications down the road.  For example, my father’s home is free and clear, but if I put it in a trust now the most that he would receive is approximately $600/month in assistance.  When I sell the house (upon his passing) I would be hit with a 28% tax on the difference when he bought the home in 1976 and what it would sell for today – approximately $58,000.  There are local organizations who can guide you to different services, but in my case found they all wanted $2,800 (and up) just to complete paperwork and applications you can do on your own.

Meet their primary physician.  Find out what prescriptions have been prescribed.  Check online for the purpose and any side effects.

I have 4 different Power of Attorneys for my father.  You must check with an attorney who specializes in this based on your states statutes, rules, and regulations.  Don’t forget the DNR and have them recorded with the county.  Have at least 5 copies of each ready and accessible.  Make sure the caregivers have a complete set.  Why?  Because when your parent must go to the emergency room or is admitted to the hospital, they will need to have a copy at that time.  They do not keep them on file.

Reach out to your state’s health care.  Ask for their advice.  Find out what issues they have with your parents living alone if any.  Find out about your exposure and liability – yes, there can be some.

I have installed 7 cameras in his home to watch after him.  He does not know they are there.  They have motion sensors and work in the dark.  You might think I am violating his privacy, but when he has fallen I know and can get someone there quickly.  Yes, I know about the device he can wear around his neck that calls for assistance when needed, but what good is it if he does not wear it?

I have removed the doors from the rooms in his home for the convenience of wheelchair and walker accessibility.

I have installed 5 grab bars in the shower and bathroom.  You want them at least 30 inches long and installed at an angle so they can work their way up.  I have a shower seat as well.

Consider taking away the checkbook and all credit cards.  Set up auto pay on everything that you can.

Remove all firearms.  This is not a 2nd amendment issue, it is solely about safety.

I have hospice seeing my father.  Their caregiver is there 3 times a week, a registered nurse is there once a week, their social worker is there twice a month and their minister is there twice a month.  Medicare will cover this, but if he is admitted to the hospital, I have to start their paperwork again, so Medicare is not billed by 2 different organizations.

I hired a caregiver 5 days a week for at least 3 hours each visit.  This can run anywhere from $18-$30/hour depending on what you have them do.  An issue here is that you want to have the same person with your loved ones to establish a personal relationship for trust.  Companionship and interaction is a must.  Loneliness is a killer.  Please take time to research online the health caregiver organizations.  Interview the caregiver with your parents.  Find out about their experiences with your parent’s situation.  I also ask that everyone call me when they arrive and leave to keep track of hours to compare with my bill.

Another issue is medication.  The caregiver cannot take the pills out of the pill bottles.  I had to purchase those weekly pill containers and replenish them constantly.  Then health care providers can then give them their medication.  It’s a liability issue.

Have copies of their driver’s license, id cards, social security cards, wills, health insurance policies, Medicare cards, home insurance policies, life insurance policies and all contact information for everyone they come in contact with and that provide services for them.  Scan them in and have access on your computer and cell phone.  The same goes for any emergency services, utilities, water, doctors, next door neighbors, etc.

It’s also a good idea to have a lockbox on the front door with a set of keys to the house for access for the caregivers, police, fire department, ambulance and neighbors in case of an emergency and services needed.

I hope some of this can help you in caring for your parents.  He’s the only father I have and no matter what I will be there for him and do everything I can.

Written by Bart Bartholomew, an instructor with MTI.

 

10 Steps To Becoming a Mortgage Loan Officer

We receive questions on a regular basis concerning the process to become licensed as a loan officer.  Becoming a mortgage loan officer can be as simple as 1.. 2… 3…, or actually 1 to 10.

Step 1:  It all beings with the State where you want to be licensed

Each state will require a minimum of 20 hours of pre-license education.  In addition, some states may require certain state-specific education.
Check your state requirements here:  State Licensing Requirements

Step 2:  Enroll in a pre-license course with MTI – That’s so easy… just click the link below.

Get me into a class now!

Step 3:  You’re going to need an NMLS ID number – that’s simple too… just a few minutes.

You will need to create a user account with the Nationwide Mortgage Licensing System and Registry (NMLS).  There is no cost to do this and it only takes a few minutes.  Select the link below then select create an “Individual Account.”
Need My Number Please

Step 4:  School Time!  Complete your pre-license education

Step 5:  The work beings.  Study, Study, Study

Be sure to prepare yourself for the NMLS national test.  Most students will spend 40-60 hours of study to prepare.  It’s not an easy test, but if you follow the instructions of your fabulous MTI instructor, you should be prepared!

Step 6:  GO ACE THAT TEST!

Step 7:  Where do you want to work?

Finding the right place to work as an MLO might take a little time.  If you know someone in the industry, find out where they work and why.  You’ll want to find a company that has your values and provides the right customer service you intend to provide.  Loan officer compensation can vary from company-to-company, but money shouldn’t be your only consideration.  Remember if the company isn’t run well, your compensation won’t matter, because you won’t close any loans!  But, now that you’re ready to be licensed, there will be many companies in your area wanting to hire you!

Step 8:  Complete your registration with NMLS and file your papers with the state

The job is never complete until the paperwork is done.  You will need to complete your NMLS registration using your NMLS account, complete your fingerprinting and file your MLO license application with the state.

Step 9:  YOUR LICENSE IS ISSUED!

Now it’s official… you’re a licensed mortgage loan officer!  After you’re done partying, it’s time to start helping!

Step 10:  Help hundreds achieve homeownership!

Now you’re a well-educated, licensed, loan officer and it’s time to turn your attention to helping hundreds of consumers in your area make one of the largest financial decisions of their life… how to properly finance their home.  Because you are well-trained, you’ll be there to guide them to the right decision and you’ll be there to make obtaining a mortgage a pleasant experience.  Along the way, you may make a lot of money… and that’s not bad at all!

 

Visit our website for more information and skills-development courses – MTIProEd.com

Understanding Mortgage Rates

Written by:  Glenn B. Bartholomew

Every day I am asked if the interest rates for home mortgages went down.  Every time the Federal Reserve has changed the short-term bank borrowing rate, I get many phone calls asking me about what the new mortgage rates are and how low or high they are going to go.

It’s time to help everyone understand the differences between short-term interest rates and the long-term interest rates.  I apologize for not getting to his sooner.

The Federal Reserve just recently increased the short-term interest rate, but interest rates have barely moved, not to mention initially went lower.  Remember this:  The Federal government controls short-term interest rates, but do not control long-term interest rates.

Most people believe that the short-term and long-term rates are the same or are in tandem.  Nothing is farther from the truth.  What the Federal Reserve controls directly are the federal funds rates.  This is what the media is always referring to when they say Ms. Yellen is either raising or lowering the rates.  This is the rate that banks charge each other for overnight loans.  Some of these areas that are directly and quickly influenced are credit card rates, auto loans and any other loans that are short-term (less than 10 years).

The Federal government can and does influence long-term rates, but DOES NOT have any direct control over them.  The reason for this is that mortgages are long-term loans heavily influenced by long-term rates.  Especially the rate of the 10-year U.S. Treasury securities.

The bottom line to all of this is quite simple.  The stock market loves short-term rate cuts, but the long-term bond market hates them.  When short-term rates are cut, you are adding to the money supply, that has the potential to become inflationary.  Long-term lenders have a fear of inflation that will eat away at the value of their money.

The beneficiaries of short-term rate cuts are banks, which borrow very large amounts of short-term money, much of it to fund high-interest credit card loans.

Long-term rates are also important.  Rising long-term rates undermine the effect of falling short-term rates.  A good example of how all this goes full circle is that one of the major factors stimulating consumer spending on big-ticket items like cars (short-term finance rates), has been the money homeowners are taking out of their houses by refinancing or taking out second mortgages (long-term interest rates).  If the refi market or purchase market is slowed down by higher mortgage rates, or no mortgage rate reduction, consumer spending could be hurt.

So you see, the Federal Reserve isn’t the most all-powerful person the media tries to make us all believe they are.  They cannot cut short-term interest rates blithely.  They have to worry about the long-term bond market as well.  All this while trying to stimulate the economy, short-term.

A hat tip to Glenn B. Bartholomew for providing this easy-to-follow understanding of market interest rates.

Proposed TRID changes a mixed bag for housing industry

Since TRID was implemented in 2015, the CFPB has dealt with a deluge of complaints and suggestions from the housing industry on the disclosures (Loan Estimate and Closing Disclosure.) After working with industry professionals, the CFPB recently released a 283-page proposal of amendments to the law, pleasing some and exasperating others.

The National Association of Realtors got what they wanted most – to allow lenders to share the Closing Disclosure with “third parties” after receiving consumer consent. The implementation of TRID created problems for real estate agents who couldn’t get access to the CD, an issue they hadn’t dealt with before TRID.

Alternately, lenders were disappointed that the proposal didn’t include some of the amendments they lobbied for. Lenders were looking for an amendment that would allow them to correct errors after a loan closing, and a release from liability for technical violations. Additionally, title companies were denied an amendment that would require the calculation for title insurance fees on mortgage disclosures to be more accurate. They say TRID is causing consumers to receive unclear information about their title insurance costs.

Also included in the proposal:

  1. An amendment to extend the rule’s coverage to co-op units so lenders don’t have to defer to state law. It also adds tolerance provisions of total payment that potentially help lenders reduce liability.
  2. Proposal also addresses “black hole” problem – when a borrower pushes back a loan’s closing date after the Closing Disclosure is made, forcing the lender to absorb increased costs. Under the proposal, lenders would be able to use the CD to reflect changes in costs that would otherwise trigger issuing a revised estimate.
  3. Exempting down payment assistance programs from a 1% limit for recording fees and transfer taxes, solving compliance issues for housing finance agencies.
  4. Technical corrections to affiliate charges
  5. Calculating cash to close
  6. Amendments on construction loans
  7. Clarification on decimal places and rounding issues that have caused headaches

The CFPB has opened the public comment period on the proposal until October 18th.

What do you think of the proposed changes? Let us know in the comments!

Democrats and Republicans outline opposing housing policies in party platforms

 

Ahead of the major conventions, both parties released their official party platforms – documents that outline fundamental goals and give a glimpse into what their agendas will be should they win in November. Both platforms describe housing policies, though neither goes into a lot of detail on how those goals may be achieved.

The Republican housing platform boils down to an emphasis on deregulation, releasing government conservatorship of Fannie and Freddie, and possibly abolishing the CFPB.

Highlights:

  • Definitely restructure CFPB, possibly get rid of agency altogether
  • End the use of disparate impact to enforce fair lending laws – counter to Supreme Court decision of 2015
  • Reduce regulatory burdens they say reduce access to affordable mortgages for many Americans
  • Scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders to avoid future taxpayer bailouts

Not surprisingly, the Democratic platform outlines opposing goals to the Republicans. Many of their policies are designed to build upon the housing reforms passed under the current Democratic administration, such as the recently passed Affirmatively Furthering Fair Housing law and support for the CFPB, created by Democratic Senator Elizabeth Warren under Obama.

Highlights:

  • Provide more federal resources to the people “struggling most” – such as the disabled, minorities and veterans
  • Create more affordable rental units by increasing the budget of National Housing Trust Fund
  • Modernizing credit scoring to expand access to mortgages for borrowers with nontraditional credit history
  • Continue conservatorship of Fannie and Freddie
  • Defending and strengthening The Fair Housing Act

Which platform do you think will benefit the Americans more? Let us know in the comments!

Interest Rates and the Fed’s Control

The current state of the U.S., and world economies, has brought the talk of interest rates (and potential Fed rate cuts) bank into mainstream media.  Because of this, how many times (per day) are you fielding calls from borrowers asking when mortgage rates will be going down?

The media portrays the Federal Reserve as the “all-powerful” decision maker for mortgage interest rates, that as soon as the Fed hints or suggests at a rate cut, mortgage interest rates start crashing through the floor.  Most borrowers believe that the short-term interest rates (controlled by the Fed) and long-term interest rates (such as those connected with mortgage loans) are the same or are in tandem.  Nothing could be further from the truth.

When the media discusses the possibility of potential rate cuts, it is common to start hearing from borrowers asking if interest rates for home mortgages went down and how low they are expected to go.  The problem is the Federal Reserve is only cutting the short-term interest rates.  The Federal government controls short-term interest rates, but do not control long-term interest rates.

What the Federal Reserve controls directly are the Federal Funds Rates.  This is what the media refers to when they say the Fed is either raising or lowering rates.  This is the rate that banks charge one another for overnight loans.  Some of the interest rates that are directly and immediately influenced, by a Fed rate change, are credit card rates, auto loan rates and other loans that have short-terms (less than 10 years duration).

The Federal government can and does “influence” long-term interest rates (such as those connected with mortgage loans), but DOES NOT have any direct control over them.  The reason is mortgages are long-term loans heavily influenced by long-term interest rates.  Especially the rate of 10-year U.S. Treasury Securities.

To understand how little control the Federal government has over the long-term rates, think back to last December when the Fed raised short-term interest rates a quarter point.  At that same time, the Treasury rate and mortgage rates FELL sharply.

The bottom line to all of this is quite simple.  The stock market loves short-term rate cuts, but the bond market hates them.  When short-term rates are cut, you are adding to the money supply.  That has the potential to become inflationary.  Long-term lenders have a fear of inflation, which can eat away at the value of their money.

The main beneficiaries of short-term rate cuts are banks that borrow large amounts of short-term money, much of it to fund high-interest credit card loans.

Long-term rates are also important.  Rising long-term rates undermine the effect of falling short-term rates.  A good example of how all this comes full circle – one major factor stimulating consumer spending on big-ticket items, such as cars, has been the money homeowners take out of their homes, by refinancing or taking out a second mortgage.  If the refinance market, or purchase market, are slowed by higher mortgage interest rates, consumer spending may be affected.

So you see, the Federal Reserve isn’t the most all-powerful entity the media tries to make us believe.  They cannot just cut short-term interest rates carefree.  They have to worry about the long-term bond market as well.  All of this while attempting to stimulate the economy, short-term.

Rebranding a mortgage giant: Nationstar becomes “Mr. Cooper”

Non-bank mortgage servicing giant Nationstar settled a huge class action law suit in November, 2015 over requiring homeowners to purchase “forced placed insurance.” They settled the case for $77 million and have attempted to bounce back from years of bad publicity since the housing crisis. Recently, the company announced they will rebrand as Mr. Cooper, a mortgage company with a customer-first approach to doing business.

“If there’s any industry that’s sort of old-school and old-fashioned, it’s mortgage … so we’re trying to think of ourselves more as a consumer product company that embraces technology,” said Kevin Dahlstrom, Nationstar’s chief marketing officer. The company opened their headquarters in suburban Dallas less than a year ago. Mr. Cooper is planning on putting a lot of money and effort into revamping their website and investing in mobile apps, according to The Dallas Morning News.

Nationstar also plans to combine its originations and servicing business under the Mr. Cooper brand umbrella. The company currently has over 2.5 million existing customers. CEO Jay Bray discussed the new name with online the publication Housing Wire.

Bray said that when customers have a positive mortgage experience, it’s because of “connection with an individual,” and Mr. Cooper is meant to represent that.

“So Mr. Cooper is meant to be that advocate, that person that’s going to connect with the customers to deliver a better experience and be an advocate for them day in and day out,” Bray said. “And when you talk to the customers about (Mr. Cooper), it’s been very positive as well.”

Bray said the launch of Mr. Cooper also includes a “completely new web and mobile experience” that the company anticipates launching in the first half of 2016, as well as “new products and service offerings designed to remove the worry in the home loan process and reward customers over the life of their loan.”

Will the new name be enough to turn around the company’s image? Let us know what you think in the comments.

Need a way to look at real estate listings on a map?

For years, the apartment search website Padmapper has been using a simple but effective way to let renters see the available listings in their neighborhood of choice. You visit the site, type in the neighborhood you want to live in, and voilà, all the apartments for rent in that area populate your screen. The app got more sophisticated over time – now you can narrow your search parameters by number of bedrooms, bathrooms, price range and “walkability.”

Realtor.com rolled out a similar app for real estate, useful for home buyers and mortgage professionals alike. The app is similar to Padmapper, but includes more high quality photos and sale information, along with the mapping feature.

Ever taken a stroll through a nice neighborhood and wondered what it might cost to buy a house there? The app has a “nearby” function that lets the user see all the homes being sold within a mile of where they are standing. You can also narrow your search to look for open houses, new listings, and even recent foreclosures.

What happened to Trump Mortgage?

There’s been a lot of media coverage in the last few months on Trump’s failed business ventures, including Trump Airlines, Trump University and GoTrump.com. But fewer people are aware of the short-lived Trump Mortgage, an endeavor that got off the ground in 2006 and cratered less than two years later, after the housing market crash. So, what exactly was Trump Mortgage?

In 2006, Trump opened a mortgage brokerage that operated out of Trump Tower in Manhattan, during the housing bubble right before it burst. The company had a goal of generating $3 billion worth of mortgages, but ended up hitting only $1 billion before going out of business.

With more attention focused on Trump business ventures recently, publications like The Washington Post, CNN Money and Time have taken a closer look at what happened to the NY mortgage company, especially in light of comments Trump himself has made on the campaign trail.

Trump has said that he predicted the crash, saying in 2015 that he knew the housing market “was a bubble that was waiting to explode.” He’s also said the downfall of Trump Mortgage was the result of poor management, and he had very little to do with it.

However, The Washington Post points out that during the launch of Trump Mortgage at a glitzy press event in 2006, Trump seemed exuberant about entering the mortgage business. He introduced CEO EJ Ridings (a supposed Wall Street expert with years of experience), joking that if the company wasn’t a big success, “you’re fired.” It turned out Ridings had been introduced to Trump by his son, Donald Trump Jr. Ridings had grossly overinflated his qualifications, having only spent 3 months at a Wall Street firm and a few years as a mortgage broker before that.

CNN Money points out that before Trump Mortgage launched in 2006, he gave an interview to CNBC about the new venture. When asked what he thought about the future of housing, given concerns of a bubble, he said it was a great time to start a mortgage business. He also wrote a blog titled “The Housing Bubble: Doom and Gloom Don’t Pay” for Trump University students. He wrote, “You need to take risks in business. Are you the type of person who takes advantage of positive situations when they present themselves, riding them out as long as they last? Or do you heed every message of doom and gloom, avoiding risks that could be some remarkable opportunities?”

In 2007, NY business magazine Crain’s published a piece about the rise and fall of the company. They reported that Trump “downplayed his role in the failure.” Trump said he simply licensed his name to the mortgage company, and had no ownership stake.

Trump Mortgage didn’t end there. Brooklyn-based company Meridian Financial took on the Trump moniker, becoming Trump Financial. Its CEO David Brecher said, “I could not think of another branding name that has as much clout.” Trump Financial quietly exited the market two years later.

Was Trump’s decision to start a mortgage business in 2006 just bad timing, or a terrible business decision all-around? What do you think? Let us know in the comments!

Rocket Mortgage – what was the deal with that Super Bowl ad?

Should obtaining a mortgage online be as easy as buying a pair of shoes? That was the assertion made in Quicken Loans’ recent Super Bowl ad for their new app, Rocket Mortgage. The app touts that it can get users a mortgage in “less than 10 minutes.” The app launched in late 2015 and has over a thousand downloads.

Amid cute animal ads for ketchup, energy drinks and outdoor gear – the Rocket Mortgage ad stood out for its gutsy claims that obtaining a mortgage online would not only be easy, but patriotic. The ad claimed that more home buying would be good for the economy since it would lead to more spending, “further stoking demand for necessary household goods, as our tidal wave of ownership floods the country with new home owners, who now must own other things. And isn’t that the power of America itself?”

The ad has been criticized on social media for “promoting a lending environment similar to the years leading up to the housing crash and the Great Recession,” according to CNNMoney. Quicken Loans President Jay Farner defended the ad, saying that all the loans are fully underwritten and strict lending standards will remain intact.

According to Market Watch, Rocket Mortgage might appeal to younger buyers who are eager to make purchases online, even for big ticket items like cars and vacations.

The CFPB responded to the ad in a tweet, by reminding borrowers of their Know Before You Owe initiative and encouraging home buyers to take their time and ask questions during the mortgage process.

What did you think of the ad? Let us know in the comments!