Reverse Your Mortgage

Long Term Care for Senior Veterans

 

In the year 1919 President Woodrow Wilson proclaimed November 11 as Armistice Day to honor those Veterans who served during World War I. On November 11, 1954, Armistice Day was proclaimed a legal national holiday and the name was changed to "Veterans Day" to honor all veterans of all wars.

Every November 11, ceremonies are held throughout the United States honoring Veterans of wars. A National Ceremony is held at Arlington Cemetery at the Tomb of the Unknown Soldier, where the laying of the presidential wreath and military playing of “Taps” is presented.
Since its establishment in 1930, the Department of Veterans Affairs has evolved to supporting and aiding the nation’s veterans in numerous ways. One of these services for example, the Veterans Health Administration, is the largest single provider of medical care in the United States. Its 22 regions with 154 hospitals and their associated 875 outpatient clinics offer the following services.

Hospital, outpatient medical, dental, pharmacy and prosthetic services
Domiciliary, nursing home, and community-based residential care
Sexual trauma counseling
Specialized health care for women veterans
Health and rehabilitation programs for homeless veterans
Readjustment counseling
Alcohol and drug dependency treatment
Medical evaluation for disorders associated with military service in the Gulf War, or Treatment for exposure to Agent Orange, radiation, and other environmental hazards
HISA grants
Other special benefits

The Department of Veterans Affairs provides three types of long term care services for veterans.

The first are health care benefits provided to veterans who have service-connected disabilities, who are receiving VA Pension or who are considered low income. These services include free medical care, possible free prescription drugs, orthotics and prosthetics, home renovation grants for disabilities, home care, assisted living, domiciliary care, nursing home care, and a possible host of other services or benefits.

The second benefit is state veterans homes. The majority of these homes offer nursing care but some may offer assisted living or domiciliary care. The Department of Veterans Affairs in conjunction with the states helps build and support state veterans homes. Money is provided to help with construction and a federal subsidy of $72.71 a day is provided for each veteran using state veterans nursing home services. These homes are generally available for most veterans and sometimes their spouses and in some cases for so-called "Goldstar parents." Veterans homes are run by the states, sometimes with the help of contract management. There may be waiting lists in some states.

The third benefit for veterans is disability income programs. The most familiar of these benefits is an income for service-connected disabled veterans called "Compensation." The least known of these is a program officially called "Pension" but popularly known as the "aid and attendance benefit."

• All active-duty veterans who served at least 90 days during a period of war are eligible for Pension and the additional income from aid and attendance or housebound allowances. A single surviving spouse of such a veteran is also eligible.
• All qualifying veteran applicants over the age of 65 are eligible for pension but must meet income and asset tests. Applicants under the age of 65 must in addition be totally disabled to qualify. Disability does not have to be service-connected.
• A surviving spouse can be any age and there is no need for disability.

The aid and attendance benefit can pay additional income to provide for the costs associated with home care, assisted living, nursing homes, adult day care and other unreimbursed medical expenses. It can also pay for a family member other than a spouse to be the care giver. The amount of payment varies with the type of care, recipient income and the marital status of the recipient. Here are some examples of how this benefit can help veterans.

Example #1
The National Care Planning Council receives many calls from family members of veterans, asking if there is any help available to them. One such call came from a woman who had been juggling her job and caring for her father in her home for over five years. She had just lost her job and with no income, did not know how she would keep her home or give her father the care he needed. She read an article that had been written by the National Care Planning Council and published in her local newspaper and called their phone number. The article mentioned that a member of the family -- not including a spouse -- can be paid through VA to provide care for a loved one at home who is either a war veteran or the surviving spouse of a war veteran. Her father is a war veteran. When told that she could get an additional $1,644 a month through her father by providing her father's care she was shocked. She was also extremely grateful and ended up sobbing into tears over the phone when she found out about the benefit and realized it would help her keep her home and her father may probably get a check for her retroactive previous care from VA worth tens of thousands of dollars.

Example #2
Another recent caller’s mother is 89 years old and has been in assisted living for four years. As a widow of a veteran she did not qualify for the Aid & Attendance Pension 4 years ago because her assets were too high. In the meantime she has been using up her assets along with her income to pay for the assisted living. The local veterans service office has not been helpful in getting this claim approved even though she had reached the allowable asset limit over two years ago. The family was considering putting her in a less desirable facility under Medicaid. The family knew this would be devastating for their mother. Her health was still good and she had many friends and comforts at the assisted living.

The National Care Planning Council directed the caller and his family to a more cooperative veterans service office that will submit the claim and likely get it approved retroactively so that this woman can get a check for roughly $40,000 worth of previous care costs for which she was not reimbursed. In addition, she will likely get the full benefit of $1,056 a month to help pay the cost of the assisted living where she is happy.

These types of claims require medical evidence in order to receive a rating for aid and attendance or housebound allowances. These ratings must be received or certain non-medical expenses associated with long term care are not deductible from income. Special rules also allow for deducting the annual anticipated cost of month-to-month long term care from household income in order to meet the income test. This special treatment requires special documentation and evidence. In addition, those households with substantial assets will be denied for a Pension income unless those assets are below a certain level determined for each case by VA. The personal residence, personal vehicles and personal property are exempted from this asset test. Finally, evidence must be supplied every year in January that the anticipated costs for the previous year were actually incurred or VA will likely demand for its money back.
The National Care Planning Council has compiled the necessary forms, rules and information about claims together in one book titled “How to Apply for the Veterans Aid & Attendance Pension Benefit.”

This book contains information about how a typical applicant receives a successful pension award. VA often tells callers to go ahead and fill out the application but generally provides no information on the special treatment of annualization of anticipated recurring medical costs. The claims form also contains no information on this important issue. One simply has to know how to do it. This crucial information can make the difference between a successful award and being declined. All necessary forms for filing a claim are in the book.

Veterans who have substantial assets may need to do some estate planning and realigning of assets to qualify. An expert in this area should be sought to help with the application in order to avoid lengthy delays in awarding a benefit or a possible denial of benefits. For a list of individuals or companies in your area who understand how to get this benefit go to http://www.longtermcarelink.net/ref_veterans_consultants.htm

To learn more about this benefit go to http://www.veteransaidbenefit.org/

Highlights and Trends from the National Reverse Mortgage Lenders Association 2009.

I have just returned from the national Association meeting on reverse mortgages. It certainly was a whirlwind of information, considering today’s economy and real estate environment. Here are a few highlights from the meeting:

1.    Trends in FHA, by law. FHA must have a positive cash flow. It cannot have a shortfall. Last year, the reverse mortgage program had $800 million shortfall and requested resources from Congress. It was denied. In order to sustain the program HUD cut the by 10%. A HUD official from the single-family housing program, commented if housing values continue to decline, HUD may have to further make changes ( reduce reverse mortgage proceeds further) to maintain the integrity of the program.

2.    There will be changes in reverse mortgage counseling protocol. HUD counselors will be required to assess household budgets. This will help the counselors gather information so that they can help borrowers decide whether a reverse mortgage makes sense for their financial situation.

3.    Financial materials will be required to be provided in advance to borrowers. Prior to their counseling. These materials may be provided may be provided by the lender. The borrower has chosen to work with.

4.    There will be no more on-demand reverse mortgage counseling sessions.

5.    Counselors will be required to make sure the clients fully understand how a reverse mortgage works. They will be asking a series of questions of the potential borrower during the counseling session.

6.    HUD is seriously working on developing what is called an ”HECM Mini”. This is a reverse mortgage for borrowers 62 years old and older similar to the current HECM products. The difference will be that the borrower will not be required to take the full amount of the proceeds. This is an option for seniors who do not need as much money of a reverse mortgage. This HECM Mini will be at least a year in the making.

7.    There recently was a legislative notice of non-concurrence. In regards to reverse mortgages and co-ops. This means there will be further delay on the mortgagee letter to allow reverse mortgages to be done on co-ops. When asked, Meg Burns, head of single-family housing at HUD about this delay, she gave the opinion that they would be able to resolve this issue by the first quarter of 2010.

8.    There is a new standardized good faith estimate that will be implemented in January 2010.

9.    There have been 650 reverse mortgage is used for purchase to date.

10.   Mortgage insurance is required on reverse mortgages. It has been long perceived as expensive loan due to the insurance. It was commented by Meg Burns had a single family housing at HUD that the current structure of mortgage insurance on reverse mortgages is the least expensive. There has been talk for years, about reducing the upfront premium and increasing the ongoing percentage a borrower pays in mortgage insurance on reverse mortgages. HUD is still considering a restructuring of the program. But it was reiterated that by law, FHA, must have a positive cash flow. A 1% up front premium will be considered.

11.   Demand is still growing on reverse mortgages.

12.   There is over 93% satisfaction rate amongst borrowers who have attained a reverse mortgage.

13.   FHA and the housing Commissioner are focusing on risk. The current housing market has created this focus.

14.   On a positive note, Ginnie Mae A Federal Corporation that insures mortgage-backed securities is ensuring reverse mortgage securities.

15.   There is an increased investor and Wall Street interest in reverse mortgage securities.

16.   Floating-rate products are attractive to banks.

17.   As the market expands, it will make way for the development of jumbo reverse mortgages. However, it was the general opinion that we are at least 12 to 18 months before the development of jumbo reverse mortgages. The property value will have to be $1 million or more in order to make sense in the utilization of a reverse mortgage.

18.   HUD is concerned about tax and insurance defaults amongst reverse mortgage recipients.

19.   Ethical advertising is a must in the reverse mortgage business. Anything less will not be tolerated. Association members are asked to help police the industry and keep our industry clean. The Association has published updated guidelines and requirements in the advertising of reverse mortgages.

20.   Condominium projects approved prior to October 1, 2008 will need to be recertified. They can be recertified by HUD or an approved lender. Every two years all projects will need to be preapproved. It takes a local HUD office, approximately 4 to 8 weeks, with proper documentation to approve a project. Associations subject to lawsuits may come up against some difficulties in getting approved. HUD recognizes nuisance lawsuits, however the projects subjected to these lawsuits will need to submit supporting documents, and will be considered on a case-by-case basis.

21.   The average borrower of reverse mortgage is 74 years old.

22.   The average borrower’s income is $2500 a month.

23.   The average borrower has a $1000 shortfall. Every month.

24.   When surveyed, three years later, reverse mortgage borrowers showed a 91% improved financial situation.

25.   Reverse mortgage program is 20 years old.

26.   30% of loans that are currently done are FHA. 8% of FHA loans are in default.

65+ Up Looking for Work - Unemployment rate for 45+ is 6.3%

We new that the baby boomers wre going to work longer. There are more than 1/3 more  workers  over 65+ in the job market than in 2001. There are more than one half a million workers 65 and older who want to work and are looking. Click Here to Read More.

$625,500 FHA LENDING LIMIT EXTENDED THROUGH DEC. 2010 -FINALLY, SOME GOOD NEWS OUT OF WASHINGTON!

House Approves Loan Limit Extension; House, Senate Leaders Reach Agreement on Home Buyer Tax Credit
The House and Senate approved a continuing resolution that includes a provision that would extend current loan limits for FHA and the government-sponsored enterprises through next year.
Additionally, Senate leaders announced they have agreed to an extension of the $8,000 first-time home buyer tax credit through April 30. The popular credit, which has strong support from the Mortgage Bankers Association (MBA), is set to expire Nov. 30.
The CR, which keeps the federal government running through Dec. 18, passed the House on a 247-178. The Senate vote was 72-28.
MBA commended both chambers on their actions. "Given the lack of a private secondary mortgage market, FHA, Fannie Mae and Freddie Mac are pretty much the only game in town," said MBA Chairman Robert Story Jr., CMB. "Extending the current loan limits through 2010 will allow more loans to qualify for these important programs and will help keep mortgage credit more accessible and affordable for qualified borrowers."
The CR provision would keep in place current conforming loan limits of $625,000 ($729,750 in designated high-cost areas). Without approval from the Senate, those limits will expire on Dec. 31.
MBA and other industry trade groups sent a letter this week to leadership of the House and Senate urging Congress to pass legislation “as soon as possible” to extend current higher loan limits. The letter called the higher limits a “key component of the economic recovery efforts because they help make affordable loans available for a broader spectrum of consumers who want to purchase a home or refinance an existing mortgage.”
"As we try to maintain the momentum of the housing recovery, providing affordable financing for qualified borrowers is critical," Story said. "Extending the loan limits, along with other initiatives such as extending and expanding the homebuyer tax credit, will help restore stability to the housing and mortgage markets."  

Meanwhile, members of the Senate said they substantially reached an agreement on extending the first-time home buyer tax credit, adding it to a bill that would extend expiring unemployment benefits.
The amendment would extend the existing $8,000 tax credit for first-time home buyers and offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period within the past eight years. Under the amendment, home buyers would be required to be under contract by April 30 and close before July 1.
MBA has supported extension and expansion of the tax credit, noting that the Internal Revenue Service recently reported that more than 1.4 million taxpayers have benefited from the tax credit, enacted by Congress as part of the Housing and Economic Recovery Act of 2008.
“MBA believes the first-time home buyer tax credit has had a stimulating impact on our economy, and MBA supports extending and expanding it so it can help more buyers and sellers,” MBA said in a recent Call to Action from its grassroots advocacy arm, the Mortgage Action Alliance. “Our fragile economy is just beginning to show signs of stabilizing. We should not jeopardize our recovery by letting this tax credit expire. The home buyer tax credit is helping hundreds of thousands of Americans realize the American dream, and it is creating thousands of jobs that rely on homeownership .

As a side note, the original bill did not include the provision to includes reverse mortgages in the extension of the 625,500 FHA lending limit extension. Lobbyists, including AARP and the National Reverse Mortgage Lenders Association were key in adding reverse mortgages to the extension.

Community Aging Services and Senior Centers

Community Aging Services and Long Term Care
There are many private, religious and government organizations across the country that provide supportive services for older people. Many of these services center around helping people stay in their homes and avoid having to go to live in an institution or perhaps move in with family. Because of the emphasis on helping people remain independent, many community aging programs could be viewed as long-term care programs. In fact it's probably just a matter of semantics; long-term care and community aging services are just two sides of the same coin. Other community services may provide socialization or training opportunities. Community aging programs might include:

• Meals served in community centers or delivered to the home
• Community Senior Center activities and training
• Transportation and shopping services for people who can't drive or leave their homes
• Home repairs, snow shoveling, telephone support, caregiver support, care management, legal services, energy and weatherization services, housing subsidies, home health care, counseling and much more
• Adult day care
• Protection from abuse
• Help with health insurance and government entitlement programs

Private support groups might be the Red Cross, women's auxiliaries or foundations. Many religious communities support activities for their elderly members as well as nonmembers. Both private and religious groups often provide services for free to people with little income and few assets. They may, however, charge people for services who have adequate income or assets. Many of these groups may also operate nursing homes and assisted-living facilities.

Senior centers are often the focal point for all aging services in a community. Experts or contact people are housed in senior centers and can provide many services in the center itself or refer out to other organizations that can help. The community served meals or congregate meals in senior centers are a means for attracting older people into the centers. Seniors can then be exposed to the many services that are available.

Government support for aging services comes from the Older Americans Act, passed in 1965. This act, over the years, has produced a large network of care providers and local government managers called Area Agencies on Aging. This network also includes federal agencies, state agencies as well as local area agencies and is called the "national aging network".

The National Aging Network
The Older Americans Act establishes an effective interrelationship between the federal government, State aging units and local service coordinators called Area Agencies on Aging. All three centers of service, the Federal, the state and the local engage in detailed future planning in order to accomplish their jobs. Input at the local level is received from diversified advisory boards representing stakeholders in the elder community. Community meetings and feedback from patrons of senior centers are also used in the planning process. Over the past 44 years, a great deal of thought and energy and research has gone into devising a delivery system that is both efficient and cost effective. In fact, the 29,000 service providers nationwide providing care under the act are the largest single network of long-term care providers in the country.

Local agencies on aging represent geographic areas in a state that can be serviced effectively by that local unit. Area agencies on aging normally contract with local for profit or nonprofit or public providers to deliver benefits. An agency may be allowed to provide directly, supportive services, nutrition services, or in-home services if it can prove a case for providing these services more effectively. An agency may also provide directly, case management services and information and assistance services depending on the methods used for such services in that state. Agencies may also use employees from cooperating or sponsoring counties or cities to staff and administer programs such as senior centers. Much of the work performed comes from dedicated volunteers who are both individuals and employer sponsored teams. This entire aging network system seems to work very well in accomplishing the goals of the Older Americans Act.

Why Is the Older Americans Act Important?
The decade from 1960 to 1970 was a period of social unrest and change. We lived through an unpopular war which resulted in student protests and mass demonstrations. Hippies, it seems, were everywhere and we were experiencing the so-called sexual revolution. It was a exciting time when civil rights were being extended to all Americans.

During this same period a number of organizations were lobbying Congress for the rights of older Americans. An outcome of this effort was not only the 1965 creation of Medicare and Medicaid but also the passage of the Older Americans Act. The act was designed to protect elderly Americans, including Indians, from unfair discrimination in the workforce as well as providing protection and services to help older people stay independent and remain in their homes.

Although the initial emphasis was directed more towards civil rights and recognition of the dignity of the elderly, over the years, new provisions of the Older Americans Act have become more focused on providing long-term care services for older Americans. These benefits are designed to help frail, memory-impaired, disabled, poor and socially needy elderly remain in their homes and avoid the cost of elder care institutions. And more recently, funds were provided under the act to support caregivers of the elderly and elderly grandparents babysitting or raising minor children at home.

The OAA provides benefits to all Americans over the age of 60. And employment benefits are available for all Americans over the age of 55. The act itself stipulates reauthorization or amendment on an ongoing basis and since 1965 the OAA has been changed and updated 14 times. The year 2005 is designated as a reauthorization year and Congress is busily working on additions to the act. Because of the constant additions, the Older Americans Act has become a giant mishmash of thousands of words, redundant sentences and hundreds of rules and procedures. It's our guess that the complexity of the act probably requires states to hire attorneys to run their aging departments. Notwithstanding, members of the care community who provide administration and services with the Older Americans Act work around the complexity of its rules in serving the aging community.

Funding for the services required under the OAA is provided by Congress yearly. These funds are then distributed to states, territories, the District of Columbia , Indian tribes and native Hawaiians on a formula basis which provides minimum funding levels to small population groups and sparsely populated states and proportional funding levels based on state elderly populations of the majority of the other states. Because of its large elderly population, as an example, California receives almost 10% of the money. And because of its high proportion of older people, Florida is next. Ten states receive 52% of the money.

Funds are provided in the form of grants for various programs authorized under the act and states have some limited latitude in administering these monies in local areas. Certain of the mandated programs require matching funds from state and local governments. Other program funds do not require matching dollars. Many states chip in additional funds to maintain their programs and these funds often exceed matching requirements. States, counties and cities recognize the value of these services and are often generous in providing additional funds, buildings, office space and other in-kind economic benefits. For every dollar provided by Congress local governments provide about two dollars in direct money, in-kind services from volunteers, community voluntary contributions and cost sharing funds.

The federal appropriation for 2005 was $1,369,028,000 and the breakdown for specific spending categories is listed below. Notice that over half of the dollars goes towards nutrition services which are typically weekday meals provided in community settings or delivered at home as well as incentive programs to help the elderly maintain proper nutrition.

• Congregate Nutrition Services, Home-Delivered Nutrition Services, and Nutrition Services Incentive Program (money from the Department of Agriculture), 52.1%
• Home & Community-Based Services, 25.9%
• National Family Caregiver Support Program, 11.7%
• Grants for Native Americans, 1.9%
• Program Innovations Grants, 1.7%
• Preventive Health Services, 1.6%
• Protection of Vulnerable Older Americans, 1.3%
• Program Administration, 1.3%
• iAging Network Support Activities Grants, 1%
• Alzheimer's Disease Demonstration Grants, 0.8%
• White House Conference on Aging, 0.3%
• Senior Medicare Patrols (HCFAC), 0.2%

Find your state Area Agencies on Aging or State Aging Services

Senior Citizen Centers
The first Senior Center in the country opened in 1943 in the Bronx, New York and was called the William Hodson Community Center . By 1961 about 218 senior centers had opened all across the country. The first Senior centers were operated by cities or nonprofit or religious organizations. Funding came from government, community donations and fees from people using the facilities. In the early days some federal funding came from Title XX of the Social Security act but funding for Title XX has been decreasing and much of that money today is being used for other programs. In 1972, the Older Americans Act was amended to provide funding for senior centers as this was considered to be an important piece of the aging network. Today, there are estimated to be about 15,000 senior centers across the country serving about 10 million older Americans annually. About 6,000 of these centers receive part or all of their funding through the Older Americans Act.

Senior centers act as a focal point for older Americans to receive many aging services. They are a vital part of the aging network. For Area Agencies on Aging, the senior center has become a place where many AAA services can be provided, where outreach and targeting can occur and where feedback can be received from the elderly. The most common services offered at a senior center are:

• Health and wellness programs
• Arts and humanities activities
• Intergenerational programs
• Employment assistance
• Community action opportunities and social networking opportunities
• Transportation services
• Volunteer opportunities
• Educational opportunities Information and referral
• Financial assistance
• Senior rights counseling and legal services
• Meal and nutrition programs
• Leisure travel programs

Larger senior centers in major cities may offer additional specific services because they serve a large and diverse group of patrons. Here are some examples:

• Education classes, perhaps through a local college
• Foot care
• Health clinics
• Haircuts
• Daily exercise
• Telephone friends
• Support groups for Alzheimer's caregivers
• Support for Parkinson's disease
• Low vision and diabetes services
• Weekly health speakers
• Grocery shopping
• Many and varied classes for personal growth and learning
• Special events and fundraisers such as auctions, raffles, sales, bazaars, rummage sales, bingo, special meals and parties, fashion shows and facility rentals

Most elderly people are aware of senior centers in their neighborhoods but for those who are not familiar with the program, senior centers are listed under that title in the Yellow Pages.

For more information about community resources go to the National and State Care Planning Councils websites http://www.longtermcarelink.net/a15state_councils.htm

PreNeed (Pre-Paid) Funeral and Burial Plans

Advantages and Disadvantages of Prepaid Plans
One way to plan in advance for the end of one's life is to sign a formal contract called a "preneed funeral plan." With this plan, money to pay for a funeral and/or burial is held in a trust, in an escrow account or paid through an insurance policy on the life of the person desiring the plan. Parts of or all of the funeral service and burial are designed in advance and pre-funded in advance and the family has little to do but show up.

This type of planning has become very popular in recent years. A survey conducted by the AARP in 1999, found that two out of five people over age 50 had been approached to pre-purchase funerals and burial goods and services. An AARP survey in 1998 indicates that 32% of all Americans over age 50, roughly 21 million people, have prepaid some or all of their funeral and or burial expenses (but not necessarily through a formal preneed plan). Breaking that down; about 25% of the over age 50 population have prepaid for their burials (cemetery plot, mausoleum or niche), 18% have prepaid for headstones, urns, caskets , grave liners or vaults, opening and closing of graves and so on and 13% have prepaid for goods or services from a funeral home or funeral director. The same survey indicates that over $25 billion is being held in preneed trust funds. Roughly another $25 billion is waiting to be paid out in life insurance benefits. Prepaid or preneed funerals and burials are big business.

Funerals and burials funded privately by the family, or paid from an individual life insurance policy and arranged informally through a funeral home or funeral director are generally not subject to state regulation. Any formal arrangement through a second party or involving a contract is subject to regulation in all states. Each state has adopted different rules as to who can sell these plans, what the plans can provide, what contract provisions must be, how the plan is to be funded and what recourse purchasers might have in the event of fraud or default. All states call these regulated plans "preneed" funeral and burial arrangements.

Here are some advantages as to why one would want to buy a preneed plan for funeral and burial services and goods.

• It provides peace of mind knowing these arrangements have been made in advance.
• It avoids the burden on family members to make decisions when they are most vulnerable to manipulation.
• It allows one to virtually control from the grave by determining in advance the funeral products, funeral services, burial products and burial services that one would prefer having for final arrangements.
• It helps the family to avoid taking loans, arranging finance plans, raiding savings or selling assets to pay for a funeral and burial.
• It guarantees (for many contracts) that if products and services currently purchased are not available in the future, equivalent substitutes will be provided at no additional cost.
• It locks in guaranteed prices (available with some contracts) forever.
• It allows for inflation in future costs (for those contracts that do not guarantee prices) by investing money in an interest-bearing account or buying life insurance that increases in value over time.
• Depending on the contract, it may allow for transfer to another funeral home or for partial or full refund.

Unfortunately, there are also problems with prepaid, preplanned final arrangements.

• With some trust fund and insurance funding options there may be no refund if someone wants to cancel the plan in the future.
• If a purchaser moves to another state there may be no transfer options or there may be different rules governing the funding option.
• In some contracts, interest earnings on investments resulting in excess money not needed for the plan may be retained by the funeral home or funeral director.
• On installment plans interest may be charged but not credited to the account.
• In certain insurance funded contracts, the ownership or death benefit may be irrevocably assigned to the contract holder (funeral home), preventing the purchaser from enjoying ownership rights in the policy.
• In certain insurance funded contracts, a growth in the death benefit over time that exceeds the cost of the preneed plan services and goods may be pocketed by the contract holder (funeral home) instead of being refunded.
• If the contract provider goes out of business or fails to secure 100% of the funds for future payment, there may be no recourse to get all of the money back that was put in.
• If certain services or goods that were purchased initially are not available in the future, but more expensive versions might be, the family may be forced to pay extra for those items.
• In certain insurance funded plans, if the insured dies too soon, there may have been a waiting period in which few or no benefits are paid at death, thus forcing the family to pay out of pocket for the funeral.
• Certain unscrupulous providers may have failed to provide an itemized list of services and goods or failed to identify properly, specific services and goods, thus allowing the provider in the future to substitute less expensive items or to leave out services and goods that were originally anticipated in the agreement.

What Services and Goods Can Be Prepaid?
All states allow for prepaid plans for funeral services and merchandise. This would include such things as picking up the body, embalming and restoration, rooms or chapel for viewing and funeral services, casket, vault or grave liner, transportation, permits, death certificates, obituaries and so forth. Almost all states allow for prepaid burial services and merchandise as well. Only about six states do not allow it. Burial services and merchandise might include opening and closing the grave, grave markers, vaults or grave liners, mausoleums or niches. Cemetery plots are excluded from prepaid plans in all states.

The AARP has excellent information for consumers on planning for funerals. Quoting from the AARP:

"Most states have a licensing board that regulates the funeral industry. You may contact the board in your state for information or help. If you want additional information about making funeral arrangements and the options available, you may want to contact interested business, professional and consumer groups."

To find a planner in your area you may also contact the National Care Planning Council at inquiry@longtermcarelink.net or call 800-989-8137

Planning for Elder Years

Planning for Your Elder Years: IF we were to ask an older person what his or her most important concerns for aging are, we would get http://ping.fm/ceZL7

E Street interview by AARP’s Sheilah Kast, on Retirement Living TV is an frank & excellent discussion on reverse mortgages.

HUD Reduces Reverse Mortgage Proceeds by 10% -Housing Values/Economy affect FHA Program

For the first time in the history of the FHA Reverse Mortgage program, it is running at just under an $800 million dollar deficit.

FHA insures reverse mortgages against lender losses and borrower owing more than their home values when their reverse mortgage loans become due.* until recently the FHA reverse mortgage program has never run a deficit. But with falling real estate values, FHA has been paying more on claims.

In order to preserve the program helping older home owners to access their equity HUD posted a Mortgagee Letter 09-43 lowering proceeds by 10%.

All loans with case numbers (loans) after October 1, 2009 will be affected.

It is unfortunate the program has been affected by the economy; however I commend HUD in taking into account the importance of preserving the reverse mortgage program. Over 93% of consumers who attain a reverse mortgage are very happy with them. In the appropriate situation, reverse mortgages change the lives of the better older homeowners.

A couple of years ago I thought the reverse mortgage industry was on its way to developing a market where FHA reverse mortgages would take a back seat to the proprietary products. Then the recession hit. This reduction of proceeds on FHA reverse mortgages is part of the “reset” that is happening across our economy on multiple levels. The program will survive. We will continue to help senior homeowners improve the quality of their lives with this program. It will just be a less money. The reality is that some consumers will have to, some will have to and some will have to become very creative in order to ride out the shift in our society.

* See: Reverse Mortgage post 1/19/09 they said I can never owe more than my home value, HUD clarifies what is true when your reverse mortgage becomes due

if you have a reverse mortgage question, call Angella Conrard, Reverse Mortgage Advisor at 866-949-7030 or log onto www.reverse -your -mortgage.com

US Census Process Beginning, Be Cooperative but Cautious

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft. The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. 

 Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data. The big question is - how the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

 If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice.  Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

 Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

 While the Census Bureau might ask for basic financial information, such as a salary range, it will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.

 Eventually, Census workers may contact you by telephone, mail, or in person at home. However, they will not contact you by Email, so be on the lookout for Email scams impersonating the Census. Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

 For more advice on avoiding identity theft and fraud, visit www.bbb.orghttp://www.bbb.org