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Ana Said:

Would reverse ARMs help in resolving the subprime mortgage problem?

We Answered:

I think what you are proposing is basically a principal shifting account, where the banks agree to not accrue interest on a portion of the principal. If this were possible to do I believe that the banks would be offering it, the reason they are not is because they would lose, based on your numbers, 20% of their income from mortgage interest accounts.
If you saw the Bear Stearns--Countrywide etc failures you would realize that the economy is in such a slippery state that any shifting of income as you propose would put a bank in a precarious position...more bank failures is not a good thing.

So no I do not think that your plan is a good one.

What is needed is mandatory resturcturing of the sub prime market, which would reduce incomes, as above, but with "top and bottom" adjustments to allow both the lenders and the buyers to survive, there could be some hope. But the administration has said that they would not endorse such and act, and the congress does not appear to willing to act.

Stephanie Said:

Where are Mortgage interest rates headed for Spring 2008?

We Answered:

Traditionally, in the past as housing markets decrease, interest rates will decrease as well to spur more buyers to buy.

However, so much is up in the air. Interest rates are already at very low averages, and inflation will start climbing as the credit crisis hurts the banking industry. One card the Fed can play to lower inflation is to increase interest rates.

If it were to bet on things - I would say we will see another year or two of decreasing rates, before the Fed starts trying to correct for the escalating inflation by increasing interest rates which will eventually lead to increase in mortgage rates.

Mae Said:

What are the benefits of refinancing a reverse mortgage?

We Answered:

It may not help because the borrower would have to re-pay the origination fees. And the amount that could be borrowed would likely be much less because the home's value will be less under the current market conditions.

I very much doubt whether the difference in interest rates could be made up after re-paying all the necessary fees to refinance a reverse mortgage.

Oscar Said:

Would a reverse ARM be helpful in resolving the subprime mortgage problem?

We Answered:

sounds like a plan

Marilyn Said:

Has anyone you know used a reverse mortgage from FinancialFreedom.com?

We Answered:

I have had many of my social work clients use Financial Freedom for reverse mortgages. They are one of the oldest and most respected companies in the field. All the mortgages are FHA and backed by the government. What they do is assess your home and then based on your age they will give you a percentage of the worth as a reverse mortgage. You will never outlive your mortgage and you never have to pay anything back. When you do pass away or move out for over 12 months, your estate is settled by selling the home and what value is left after the mortgage is paid will go to your estate. Reverse mortgages can be great for those who need additional income after retirement and who arent concerned with leaving the total home value as part of their estate. None of your personal possessions are included in the loan. This is just like any other mortgage - on the home only. You can take monthly income or a line of credit which ever you prefer. While these mortgages arent for everyone they can be a wonderful source of income for most. The interest rates are low and regulated by the govt. This week the fixed rate was 5%. You have obviously never really investigated reverse mortgages since you have much wrong information in what you wrote.