A Home Equity Conversion Program For Hawaii'S Elderly Homeowners

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A HOME EQUITY CONVERSIONPROGRAM FOR HAWAII'SELDERLY HOMEOWNERSGAIL M. KAITOResearcherReport No. 1,1984Legislative Reference BureauState Capitoltionolulu, Hawaii

FOREWORDT h i s r e p o r t on A Home E q u i t y Conversion Program f o r Hawaii's Elder1Homeowners was p r e p a r e d i n response t o House Resolution No. 19, adoptezd u r i n g t h e 1983 l e g i s l a t i v e sessionHouse Resolution No. 19 requested t h e O f f i c e of t h e LegislativeReference B u r e a u t o c o n d u c t a s t u d y on t h e p o s s i b i l i t y of r e p l i c a t i n g i nHawaii t w o t y p e s of home e q u i t y conversion programs c u r r e n t l y i n existence.In o r d e r t o p r o p e r l y i n f o r m t h e l e g i s l a t u r e o n t h i s subject, t h e scope o f t h es t u d y was broadened t o i n c l u d e discussions o f o t h e r home e q u i t y conversionprograms i n operation.We wish t o e x p r e s s o u r sincere appreciation t o t h e retirees whoresponded t o o u r s u r v e y as well as t o t h e f o l l o w i n g i n d i v i d u a l s f o r t h e i rSenior Researchassistance a n d guidance:Cullen Hayashida,Ph. D . ,Associate, K u a k i n i Medical C e n t e r ; Renji Goto, D i r e c t o r , Executive O f f i c e onA g i n g ; Gail H a r u k i ,Legislative Researcher, E x e c u t i v e O f f i c e on Aging;Carswell Ross, Program Specialist, E x e c u t i v e O f f i c e on Aging; Ray Higa,P r o p e r t y Valuation A n a l y s t , C i t y and C o u n t y o f Honolulu Department o fPh.D.,Finance, Real P r o p e r t y Assessment D i v s i o n ; Michael Hennessy,Assistant Professor i n Sociology, U n i v e r s i t y of Hawaii; B r o n w y n Belling,Associate D i r e c t o r , Reverse A n n u i t y Mortgage Program o f t h e San FranciscoDevelopment F u n d ; a n d Donna Guillaume, D i r e c t o r , B u f f a l o Home E q u i t yL i v i n g Plans Program.Samuel B . K . ChangDirectorF e b r u a r y 1984

TABLE OF CONTENTSPAGEFOREWORD.11. 11.INTRODUCTION2.HOME EQUITY CONVERSION MODELS. 4Loan Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Lender Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Sale Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Reverse I n s u r a n c e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10T h e Choice Among I n s t r u m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l i3.EXISTING HOME E Q U I T Y CONVERSION PROGRAMS.12B u f f a l o Home E q u i t y L i v i n g Plans (HELP) . . . . . . . . . . . . . . . . . . . . . . . . . .Musashino Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pennsylvania Home E q u i t y L i v i n g Program . . . . . . . . . . . . . . . . . . . . . . . .T h e Reverse A n n u i t y Mortgage Program oft h e San Francisco Development F u n d (RAM) . . . . . . . . . . . . . . . . . . . .RAM Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .RAM Statewide Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C o u n t y o f San Mateo RAM Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .D e e r i n g Savings Reverse Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Broadview Savings Equi-Pay Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B o i l i n g S p r i n g s Savings a n d Loan"Home Plus" Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .American Homestead's " C e n t u r y Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F o u r a t t Senior C i t i z e n E q u i t y Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F i r s t Senior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pilot Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.GOVERNMENT A C T I O N T O ENCOURAGE WIDER USEOF HOME E Q U I T Y CONVERSION INSTRUMENTS . . . . . . . . . . . . . . . . . . . .Federal Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23. 26State Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.POTENTIAL BENEFITS FROM HOME EQUITY CONVERSION . . . . . . . . . . . .National Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Statewide Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E l d e r l y Homeowners b y C o u n t y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E l d e r l y Homeowners b y Fee Simple a n dLeasehold O w n e r s h i p . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E l d e r l y Homeowners b y Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232830313132

6.INTERESTED POPULATION.Social A c c e p t a b i l i t y and Willingness. .t o P a r t c p a. t.e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Respondents' Household a n dHomeownership Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Respondents' Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .O t h e r Factors A f f e c t i n g Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .O t h e r I n d i c a t o r s o f Possible I n t e r e s t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.8.373740424445.47Program Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S e l f - s u s t a i n i n g Program Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F u n d i n g Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47495051PROGRAM ADMINISTRATIONFINDINGS AND RECOMMENDATIONSPart I .P a r t II .53F i n d i n g s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53FOOTNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55TABLES1.2.3.4.5.6.7.8.9.10 .11 .Home E q u i t y Conversion Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Estimates o f E l d e r l y Homeowner Population . . . . . . . . . . . . . . . . . . . . . . 311983 Claims f o r E l d e r l y Homeowner P r o p e r t yT a x Exemptions b y C o u n t y a n d O w n e r s h i p . . . . . . . . . . . . . . . . . . . . 32OARS Estimate of E l d e r l y Homeowner Income . . . . . . . . . . . . . . . . . . . . 33Census Estimate o f E l d e r l y Homeowner Income . . . . . . . . . . . . . . . . . . . . 34E l d e r l y Owned Homes b y Household lncome a n d35Owner Estimated P r o p e r t y Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Estimates o f Population Eligible f o ra Home E q u i t y Conversion Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Acceptability of Program A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38A c c e p t a b i l i t y o f Program B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Willingness t o Participate i n Program A . . . . . . . . . . . . . . . . . . . . . . . . . . 39Willingness t o Participate i n Program 5 . . . . . . . . . . . . . . . . . . . . . . . . . . 39APPENDICESAppendix AAppendix B-1Appendix 8 - 2Appendix C - IAppendix C-2Appendix DHouse Resolution No . 19 . . . . . . . . . . . . . . . . . . . . . . . . . .T y p e s a n d Cost of Services P r o v i d e db y t h e Musashino Plan . . . . . . . . . . . . . . . . . . . . . . . . . .Musashino Plan - Loans Allocated b y T y p e sof Services A p r i l 1981 t o March 1982 . . . . . . . . . . . .Ram Loan Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F o u r a t t Sale & Leaseback Examples . . . . . . . . . . . . . . . .Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .606365606769

A p p e n d i x E-1A p p e n d i x E-2A p p e n d i x F-1A p p e n d i x F-2A p p e n d i x F-3A p p e n d i x F-4Appendix F-5A p p e n d i x G-1A p p e n d i x G-2A p p e n d i x G-3A p p e n d i x G-4Appendix G-5Appendix HAppendix I-?A p p e n d i x 1-2A p p e n d i x 1-3A p p e n d i x 1-4A p p e n d i x 1-5Appendix JAppendix KM o r t g a g e Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Homeowners w i t h RemainingMortgage Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .L i v i n g A r r a n g e m e n t : A l l Homeowners . . . . . . . . . . . .L i v i n g A r r a n g e m e n t a n d Program AParticipation: Government Pensioners . . . . . . . . . .L i v i n g Arrangement a n d Program AParticipation: Senior C l u b Members . . . . . . . . . . . .L i v i n g A r r a n g e m e n t a n d Program BParticipation: Government Pensioners . . . . . . . . . .L i v i n g Arrangement a n d Program BParticipation: Senior C l u b Members . . . . . . . . . . . .Household Income: A l l Homeowners . . . . . . . . . . . . . .Household lncome a n d Program AParticipation: Government Pensioners . . . . . . . . .Household lncome a n d Program AParticipation: Senior C l u b Members . . . . . . . . . . . .Household lncome a n d Program BParticipation: Government Penisoners . . . . . . . . . .Household lncome a n d Program BParticipation: Senior C l u b Members . . . . . . . . . . . .O w n e r s h i p A r r a n g e m e n t : A l l Homeowners . . . . . . . .Desire t o Bequest: AIL Homeowners . . . . . . . . . . . . . .Desire t o Bequest a n d Program AParticipation: Government Pensioners . . . . . . . . . .Desire t o Bequest a n d Program AParticipation: Senior C l u b Members . . . . . . . . . . . .Desire t o Bequest a n d Program BParticipation: Government Pensioners . . . . . . . . . .Desire t o Bequest a n d Program BParticipation: Senior C l u b Members . . . . . . . . . . . .Money Needed t o Participate:A l l Homeowners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Comparison o f HELP Cost Componentsa n d Possible Costs i n Hawaii . . . . . . . . . . . . . . . . . . . .

SUMMARYT h i s s t u d y on A Home E q u i t y C o n v e r s i o n P r o g r a m f o r Hawaii's E l d e r l yHomeowners indicates t h a t home e s u i t v c o n v e r s i o n has t h e p o t e n t i a l t o a s s i s te l d e r l v homeowners i n need of a d d i t i b n a i income bv a l l o w i n s homeowners t od r a w h p o n t h e i r home e q u i t y w h i l e c o n t i n u i n g t o r e s i b e i n t h e i r homesT h i s r e p o r t sets f o r t h t h e v a r i o u s home e q u i t y c o n v e r s i o n models a n dd i f f e r e n t programs c u r r e n t l y in operation.T h e r e p o r t aiso c o v e r s t h ep o p u l a t i o n t h a t home e q u i t y c o n v e r s i o n m i g h t b e n e f i t a n d t h e p o p u l a t i o n t h a te x p r e s s e d i n t e r e s t i n t w o p r o p o s e d p r o g r a m s , as well as g o v e r n m e n t actionst h a t may encourage w i d e r use o f home e q u i t y c o n v e r s i o n a n d issues i n v o l v e di n a state-sponsored program.T h e r e p o r t concludes t h a t much education m u s t o c c u r b e f o r e i t can b ed e t e r m i n e d w h e t h e r t h e r e is a need o r demand f o r a s t a t e - s p o n s o r e d homee q u i t y c o n v e r s i o n p r o g r a m i n Hawaii.I n t h e i n t e r i m , it is recommended t h a tthe privatesectorb e encouraged t o o f f e rhomeequityconversiono p p o r t u n i t i e s a n d t h a t a l o n g - t e r m means o f f i n a n c i n g b e e x p l o r e d .

Chapter 1INTRODUCTIONT h e " g r e y i n g o f America" has been a focus of national a t t e n t i o n i nr e c e n t years and r i g h t l y so, a s dramatic demographic changes t a k i n g placewill have p r o f o u n d effects on all aspects o f o u r social, economic, a n d politicallives.T h e population o v e r 65 years o f age i n 1960 comprised 9.2 p e r cent oft h e t o t a l U.S. population. B y 1981, t h i s f i g u r e h a d risen t o 11.4 p e r c e n t o ft h e t o t a l population, a n d it is expected t o reach 1 3 . 1 p e r c e n t b y t h e y e a r2000. 'Hawaii, w i t h t h e nation's h i g h e s t l i f e expectancy, r a n k e d t h i r d amongt h e states i n terms o f e l d e r l y population g r o w t h between 1970 and 1980.'Hawaii's o v e r 65 population i n 1980 o f 76,150 persons comprised o n l y 7 . 9 p e rcent o f t h e population b u t these f i g u r e s a r e expected t o increase t o 142,000and 11.6 p e r c e n t b y t h e y e a r 2000.'T h e r a t e of g r o w t h i n t h e e l d e r l y population holds f r i g h t e n i n g prospectsf o r government e x p e n d i t u r e s f o r e l d e r l y related p r o g r a m s .I n 1978, t h e ns e c r e t a r y of t h e f e d e r a l Department o f Health, Education a n d Welfare,Joseph A . Califano, J r . , noted t h a t his department's programs would p a y o u ti n excess of 94 b i l l i o n t o person's 65 and o l d e r .A n o t h e r 18 b i l l i o n f r o mprograms u n d e r o t h e r f e d e r a l departments would raise t h e t o t a l t h a t y e a r t oan estimated 112 billion, o r f i v e p e r c e n t of t h e Gross National P r o d u c t . 'With t h e postwar " b a b y boom" t u r n i n g i n t o t h e "senior boom", real spendingwas expected t o reach 635 b i l l i o n a r o u n d 2025, c o n s t i t u t i n g more t h a n t e np e r cent of GNP, a n d more t h a n 40 p e r c e n t of t o t a l federal outlay . Recentb u d g e t a r y c o n s t r a i n t s a t a l l levels of government have r e s u l t e d i n d r a s t i cc u t s in human service programs and t i g h t e n i n g of e l i g i b i l i t y s t a n d a r d s .T h e emergence o f a new concept t h a t would allow e l d e r l y homeowners,who comprise t h e m a j o r i t y of t h e e l d e r l y population, t o help themselves r a t h e rt h a n r e l y on government assistance, t h u s is indeed timely. U n t i l r e c e n t l y , ahomeowner's o n l y way o f b e n e f i t t i n g f r o m home e q u i t y was b y selling t h e homeand moving.Home e q u i t y conversion i n s t r u m e n t s allow a homeowner t o usesome o r all o f t h e s t o r e d home e q u i t y t o enjoy a b e t t e r s t a n d a r d o f l i v i n gw i t h o u t r e l i n q u i s h i n g residency i n t h e home.T h e potential impact o f home e q u i t y conversion on a national scalebecomes s t r i k i n g l y a p p a r e n t w i t h s t a t i s t i c s showing t h a t 82 p e r c e n t of e l d e r l yhousehold heads o v e r 65 years o l d owned t h e i r homes i n 1976.6 Of theseI n d o l l a r terms,e l d e r l y homeowners, 84 p e r c e n t did n o t have a m o r t g a g e . 't h e amount of e l d e r l y - h e l d home e q u i t y has been estimated a t o v e r 5500b i l l i o n . ' What i s u n f o r t u n a t e about t h e s i t u a t i o n o f some e l d e r l y homeownersis t h a t although t h e y may h o l d a s i g n i f i c a n t amount o f home e q u i t y , t h e y alsohave incomes below national p o v e r t y levels.Theseconcept i nintroduced1979 whenfacts have l e d t o t h e development o f t h e home e q u i t y conversionrecent y e a r s . While almost u n h e a r d o f i n Hawaii, t h e concept f i r s ti n t h e e a r l y 1960s has aroused much a t t e n t i o n nationwide, Sincea major canference on home e q u i t y c o n v e r s i o n w a s held i n

HOME EQUITY CONVERSION PROGRAMWisconsin,i n t e r e s t e d i n d i v i d u a l s , scholars, a n d agencies h a v e c r e a t e d an e t w o r k s u p p o r t i n g t h e d e v e l o p m e n t o f d i f f e r e n t ideas a n d home e q u i t yconversion instruments.A national clearinghouse is c o o r d i n a t i n g researcha n d development e f f o r t s a n d disseminating information t o t h e public.Severalsmall-scaleresearch a n d demonstration p r o j e c t s h a v e been launched i nd i f f e r e n t areas of t h e c o u n t r y a n d a h a n d f u l o f p r i v a t e lenders a n d i n v e s t o r sa r e o f f e r i n g commercial p r o d u c t s .T h e 1981 W h i t e H o u s e C o n f e r e n c e o n A g i n g s u p p o r t e d t h e d e v e l o p m e n t o fv o l u n t a r y home e q u i t y c o n v e r s i o n i n s t r u m e n t s i n i t s h o u s i n g platfot-m.TheP r e s i d e n t ' s Commission o n H o u s i n g , i n i t s 1982 r e p o r t , s t a t e d : 'The Commission e n d o r s e s t h e c s e o f mechanisms i o a l l o k o l d e rhoneowners t o c o n v e r t t h e i r home e o u i t y i n z o i z c o n e t i h i l e r e m s i n i r gi n t l h e i r hcmes and reccmn;el:ds t h a t t h e Department o f Houshlg andUrban Development, t h e F e d e r a l fiorne Lcau Bank Board, and t h eI n t e r n a l Revenue S e r v i c e f a c i l i t a t e and e n c o u r a g e t h e u s e o f s u c hmechanisms.Home e q u i t y c o n v e r s i o n m a y a s s i s t t h e g r o w i n g e l d e r l y p o p u l a t i o n i nc o p i n g w i t h t h e r i s i n g c o s t o f l i v i n g as w e l l as t h e i n c r e a s i n g c o s t o fm a i n t a i n i n g t h e i r homes.A t t h e same t i m e , e q u i t y c o n v e r s i o n c a n p r o v i d e ameans o f c o p i n g w i t h s k y r o c k e t i n g h e a l t h c a r e c o s t s , p e r h a p s o n e o f t h emajor worries of t h e a g i n g .C a s h r e c e i v e d f r o m home e q u i t y c o n v e r s i o n m a yb e u s e d t o p a y f o r m e d i c a l c a r e as w e l l a s f o r p e r i o d i c h e a l t h a n d socials e r v i c e s r e c e i v e d i n t h e home.Such services a r e o f t e n essential t o a g i n gper-sons i n m a i n t a i n i n g i n d e p e n d e n t h o u s e h o l d s a n d t h e i r s e n s e o f d i g n i t y .Home e q u i t y c o n v e r s i o n i s n o t f o r e v e r y e l d e r l y h o m e o w n e r .Selling thehome a n d u s i n g t h e p r o c e e d s t o p u r c h a s e a u n i t i n a l i f e c a r e f a c i l i t y o ri n v e s t i n g t h e p r o c e e d s t o g e n e r a t e income f o r l i v i n g e x p e n s e s w i l l c o n t i n u e t ob e viable options f o r many e l d e r l y homeowners.Many e i d e r l y homeowners,however, w i l l choose t o remain i n familiar s u r r o u n d i n g s .M a n y homeownersw h o c o u l d u s e a d d i t i o n a l c a s h for m o r e c o m f o r t a b l e l i v i n g w i l l p r e f e r t o s c r i m po n themselves i n o r d e r t o leave t h e i r estates i n t a c t f o r t h e i r h e i r s .Whate q u i t y conversion p r o v i d e s is a choice n o t p r e v i o u s l y available.Home e q u i t yconversion, however, is n o t w i t h o u t i t s r i s k s a n d problems.Legal obstaclest h a t p r e v e n t more e f f e c t i v e use o f c e r t a i n i n s t r u m e n t s remain a n d r i s k s f o rb o t h t h e e l d e r l y homeowner a n d t h e l e n d e r o r i n v e s t o r e x i s t .T h e legalobstacies a n d r i s k s a r e b e i n g minimized,h o w e v e r , as a w a r e n e s s o f t h econcept develops.H o u s e R e s o l u t i o n N o . 19, a t t a c h e d as A p p e n d i x A , was a d o p t e d b y t h eTheH a w a i i H o u s e o f R e p r e s e n t a t i v e s d u r i n g t h e 1983 l e g i s l a t i v e s e s s i o n .resoitition requested t h e O f f i c e o f t h e Legislatibe Reference B u r e a u t o c o n d u c ta s t u d y o f " t h e f e a s i b i l i t y o f a l l o w i n g e l d e r l y p e r s o n s w i t h low incomes t o u s et h e i r e q u i t y i n t h e i r homes t o o b t a i n h e a l t h a n d social s e r v i c e s , f i n a n c i a lp a y m e n t s , or- b o t h , f r o m t h e S t a t e " .H . R . N o . 19 d e s c r i b e d t w o home e q u i t yc o n v e r s i o n p r o g r a m s c u r r e n t l y o p e r a t i n g i n B u f f a l o , hjew Y o r k , a n d M u s a s h i n oC i t y , J a p a n , as t h e b a s i s for- t h e B u r e a u ' s s t u d y .O t h e r home e q u i t yc o n v e r s i o n p r o g r a m models a r e o f e q u a l i n t e r e s t , h o w e v e r , a n d i n o r d e r t op r o p e t - i y i n f o r m t h e l e g i s l a t u r e t h e s c o p e o f t h i s s t u d y has b e e n e x p a n d e d t odiscuss t h e s e o t h e r models.A i t h a u g h d e f e r r e d payment loan p r o s r a m s f o rp a y m e n t o f p r o p e r t y t a x e s a r e often drscussed a s a rna!or f o r m of home e q u i t y

INTRODUCTIONconversion, t h e y w i l l n o t b e discussed i n t h i s r e p o r t because t h e counties a r ec u r r e n t l y s t u d y i n g t h i s issue.C h a p t e r 2 discusses basic home e q u i t y conversion models.T h i s isfollowed b y c h a p t e r 3's d e s c r i p t i o n o f d i f f e r e n t programs and c h a p t e r 4'so u t l i n e o f g o v e r n m e n t actions t h a t would allow w i d e r use o f home e q u i t yconversion.C h a p t e r 5 p r o v i d e s numerical indications o f potential benefitsf r o m home e q u i t y c o n v e r s i o n nationally a n d i n Hawaii while c h a p t e r 6 narrowst h e p o t e n t i a l l y e l i g i b l e p o p u l a t i o n i n Hawaii t o t h e p o p u l a t i o n w i t h a n i n t e r e s ti n e q u i t y conversion.C h a p t e r 7 discusses a d m i n i s t r a t i v e and financial issuesi n a home e q u i t y c o n v e r s i o n p r o g r a m w h i l e c h a p t e r 8 p r e s e n t s f i n d i n g s andrecommendations f o r a home e q u i t y conversion p r o g r a m i n Hawaii.

Chapter 2HOME E Q U I T Y CONVERSION MODELSHouse Resolution No. 19 d e s c r i b e d t w o home e q u i t y c o n v e r s i o n programsc u r r e n t l y i n operation a n d requested a s t u d y of t h e f e a s i b i l i t y o f a d o p t i n g aP r e l i m i n a r y research f o r t h i s s t u d y revealed t h a tsimilar p r o g r a m in Hawaii.many o t h e r home e q u i t y c o n v e r s i o n programs besides t h e B u f f a l o HELPp r o g r a m a n d t h e Musashino p r o g r a m e x i s t a n d t h a t o t h e r p r o g r a m s t r u c t u r e sm i g h t b e more w o r k a b l e o r a t t r a c t i v e i n Hawaii. T h u s , t h e s t u d y discussesas wide a r a n g e o f available a l t e r n a t i v e s as possible.B e f o r e d e s c r i b i n g t h e v a r i o u s p u b l i c a n d p r i v a t e home e q u i t y conversionmechanisms c u r r e n t l y in use, general models of loan, sale, a n d insuranceplans w i l l b e discussed i n o r d e r t o p r o v i d e an u n d e r s t a n d i n g o f basicp r o v i s i o n s o f t h e d i f f e r e n t programs a n d w h y some a r e more workable thanothers.'Table 1 compares t h e d i f f e r e n t mechanisms a n d t h e i r respectiveadvantages a n d disadvantages.D i f f e r e n t w r i t e r s h a v e used t h e terms " r e v e r s e mortgage", " r e v e r s ea n n u i t y mortgage", a n d "RAM" as g e n e r i c terms f o r t h e same i n s t r u m e n t andas d i s t i n c t i n s t r u m e n t s .Since " a n n u i t y " r e f e r s t o a n y series o f paymentsmade o r received a t r e g u l a r i n t e r v a l s , a n a n n u i t y c o u l d b e p a i d b y insurancecompanies o r b y i n s t i t u t i o n a l lenders such as b a n k s a n d savings a n d loani n s t i t u t i o n s . T o p r e v e n t m i s u n d e r s t a n d i n g , t h i s r e p o r t w i l l s p e c i f y when ana n n u i t y is p u r c h a s e d f r o m an i n s u r a n c e company a n d w i l l use t h e t e r mr e v e r s e mortgage when a l e n d e r o n l y is i n v o l v e d i n t h e t r a n s a c t i o n .Loan PlansLoans allow t h e homeowner t o d r a w on t h e homeowner's e q u i t y t h r o u g h aloan collateralized b y t h e home e q u i t y . Loans considered i n t h i s s t u d y d o noti n c l u d e t h e home e q u i t y loans o r l i n e s - o f - c r e d i t c u r r e n t l y b e i n g o f f e r e d b ycommercial banks, savings a n d loan associations, a n d b r o k e r a g e f i r m s .Thatt y p e of home e q u i t y i n s t r u m e n t does n o t address t h e needs o f low-incomee l d e r l y homeowners because t h e loans a r e amortized o v e r a r e l a t i v e l y s h o r tp e r i o d a n d r e q u i r e m o n t h i y repayments o f p r i n c i p a l o r i n t e r e s t , o r both, f r o mt h e owner.R a t h e r t h a n l i q u i d a t i n g t h e home e q u i t y , t h e s e loans f o r c e t h ehomeowner t o b u y b a c k t h e homeowner's e q u i t y i n t h e home while t h ehomeowner is s t i l l alive.'T h e f i x e d d e b t loan model, designed well b e f o r e t h e soaring i n t e r e s trates experienced i n t h e 1980s, was based on a homeowner making ani n t e r e s t - o n l y , nonamortized loan w i t h a lender a n d t h e n u s i n g t h e one-timelump sum disbursement t o p u r c h a s e an a n n u i t y f r o m an i n s u r a n c e company.T h e b o r r o w e r would p a y c u r r e n t m o n t h l y i n t e r e s t o n t h e loan while r e c e i v i n ga n n u i t y payments f r o m t h e i n s u r a n c e company f o r t h e remainder o f t h eb o r r o w e r ' s lifetime.T h e b o r r o w e r ' s d e b t , f i x e d a t t h e o u t s e t o f t h e loan,would b e r e p a i d u p o n t h e b o r r o w e r ' s death o r p r i o r sale o f t h e p r o p e r t y .Upon t h e homeowner's death t h e homeowner's estate w o u l d b e responsible f o rt h e t o t a l loan amount. T h e a n n u i t y was i n t e n d e d t o e n s u r e a f l o w of lifetimeincome t o t h e homeowner, t h u s r e d u c i n g t h e r i s k o f t h e homeowner o u t l i v i n gt h e loan t e r m a n d e x p e r i e n c i n g termination o f t h e income stream.The

Table 1HOME EQUITY CONVERSION MODELSAdvantdqesDisadvantdqesFIXED DEBT LOAUtiaeomer makes interest-only loan anduses the 1sun t o purchase anannuity fmm an insurance c-nyHaeomer r e t a i N a n e r s h i p of Propertywhile receiving w n t h l y p a w n t r f o rlifetiaeomer receives annuity payaentsfor l i f ePlan i s e a s i l y u n d e r s w as tk loananount stays fixed f o r i t s e n t i r e ternHaeomer Pays current i n t e r e r t on theloan and deducts i n t e r e s t fm. taxablef ncmeorInsurance capany deducts i n t e r e s tfron the g m r s annuity, remitsi n t e r e s t tn the lender, and remits thenet annuity t o the kxwmerH-merbenefits fm an appreciationi n property valueLoan can be renegotiated w i t h anappreciation i n property valueFor the lender:Insurance colapany assumes th r i s k f o rthe honwrner l i v i n g "too long*A n u i t i e st h a t can be paid are veryno p o s i t i v e net annuity i sw l andlpossible for sane hameowners becauseannuity r a t e r are always well belormortgage i n t e r e s t ratesHaeoroer continues ta be responsiblefor payaent o f property taxes, maintenancecosts, f i r e and casualty insuranceHaneowner way becae i n e l i g i b l e forg o v e r m n t b e n e f i t programs if annuitypayaents are treated as incaneLender receives i n t e r e r t incme throughout the l i f e of the loanUpon homeowner's death, estate i s respons i b l e f o r repayment of the t o t a l loanamuntHonwuner retains a e r s h i p of propertywhile receiving aanthly payrents f o r aternH a e a n e r continues to be responsiblefor P a m n t of Property taxes, maintenancecosts, f i r e and casualty insuranceHaneowner benefits frm an appreciationi n r o p e r t vvalueHcwomer's tenure i n the home i s notquaranteed and the homeowner may have t oi e l l the home t o repay the loanLoan principal i s repaid upon theh a w u n e r ' s death or sale o f thepropertyRISING OEBT LOANLender makes Periodic oaments t o thehweowner, v i t h each ahvbnce being aloan and generating r i s i n g indebtedness over timeAccumulated indebtedness i s repaidupon sale of the property, the home.owner's aeath, when the loan-tovalue r a t i o reacher a specifiedl e v e l , or on a specified dateLoan can be renegotiated v i t h anappreciation i n property valueP.maomei i s protec&d against l o s i n g am i o r Part of eauitv should earlv deathoc& as lender's recovery i s l i k i t e d tnthe accunulated debtt i a e o m e r i s protected against loss ofbenefits frm g o v e r m n t programs i f theloan advance i s emended w i t h i n thequarter received bbcause the payment i si n the form a loan advanceRISING OEBT LOAN WITHDEFERRED ANNUITYt o theLender nates periodic pa-ntshaeomer, w i t h each advance being aloan and generating r i s i n g indebtedness Over timeThe loon i s canDined v i t h the purchaseof a deferred abnuity. The ffirtgagedebt i s allowed to r i s e t o a specifiedl e v e l a t which point the annuity fnxnthe insurance conpany w u l d pay theloan i n t e r e s t ooly or the loani n t e r e s t and a nonthly p a p e n t to thehaeanerH

SUMMARY This study on A Home Equity Conversion Program for Hawaii's Elderly Homeowners indicates that home esuitv conversion has the potential to assist elderlv homeowners in need of additibnai income bv allowins homeowners to draw hpon their home equity while continuing to resibe in their homes

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With a home equity conversion loan the borrower does not have to make monthly payments to repay the loan. Home equity conversion loans do not have a predetermined maturity date, as do conventional loans. But it is a loan, and every loan must be repaid. Home equity conversion loans do not need to be repaid until the last surviving borrower dies.

financing for your Home Equity/Home Equity Line of Credit loan. This application will help you provide the information necessary to process your financial statement for your Home Equity/Home Equity Line of Credit loan request. If you are not able to provide all of the reques

qHome Equity Credit Line qFixed Rate Home Equity Loan qVariable Rate Home Equity Loan Date Received Log Number . 2/22 Non-Owner Occupied Fixed Rate Home Equity Loan Non-Owner Occupied Fixed Rate Home Equity Loan Fixed Rate Application 611 River Drive Elmwood Park, New Jersey 07407 1-800-363-8115 . FAX: (201) 797-5086 Loan Originator's Name

Home equity conversion plans can broadly be divided into loan plans and split equity plans. In the loan plans, the aged homeowner accumulates a debt to be paid off at some future time. In the split equity plans, the aged person sells the house and the equity is split into owner- ship rights that belong to the buyer-investor and occu- .

Callan Periodic Table of Investment Returns Returns Ranked in Order of Performance (as of June 30, 2019) Equity Cap Large-9.11% Equity Cap Large-11.89% Equity Cap Large-22.10% Equity Cap Large 28.68% Equity Cap Large 10.88% Equity Cap Large 4.91% Equity Cap Large 15.79% Equity Cap Large

AAPL UW Equity APPLE 情報技術 MSFT UW Equity MICROSOFT CORP 情報技術 AMZN UW Equity AMAZON.COM 一般消費財・サービス GOOGL UW Equity ALPHABET A コミュニケーション・サービス TSLA UW Equity TESLA 一般消費財・サービス GOOG UW Equity ALPHABET C コミュニケーション・サービス

fn-38905 (4/20) page 1 of 4 (prescreened offers only: personal code: ) type of loan applied for home equity credit line home equity bridge line no home equity loan home equity credit line increase

Engineering Mathematics – I, Reena Garg, Khanna Book Publishing . AICTE Recommended Books for Undergraduate Degree Courses as per Model Curriculum 2018 AICTE Suggested Books in Engineering & Technology w.e.f. 2018-19 BSC103 – Mathematics – II 1. Advanced Engineering Mathematics, Chandrika Prasad & Reena Garg, Khanna Book Publishing 2. Higher Engineering Mathematics, Ramana B.V., Tata .