W-b Twp. 
Tax Reporting Problem And Solutions Discussed 
The Subject Of Taxes Was Discussed Monday Night At The Township Council's 
Regular Meeting At The Municipal Building.

30-point Performance Keys Nanticoke Win

By PAMELA C. TURFA; Times Leader Staff Writer
 Monday, February 03, 1997 &nbsp;&nbsp;&nbsp;&nbsp;Page: 1C 





For 20 or 30 years, you made payments on a home mortgage, little by little
building up the equity and erasing the debt. &nbsp;&nbsp;&nbsp; 
 Now, if you are at least 62 years old, you can reverse the process and make
the home you own -- or almost own -- pay money to you. &nbsp;&nbsp;&nbsp; Reverse mortgages are neither widely utilized nor the solution to all money
woes. &nbsp;&nbsp;&nbsp; 
 But for house-rich, cash-poor seniors, a reverse mortgage can be the way to
supplement their retirement income. &nbsp;&nbsp;&nbsp; 
 With a reverse mortgage, the lending agency gives you an annuity or line of
credit up front. The payback on a reverse mortgage typically is not due until
the house is sold -- either because you move or because you die. &nbsp;&nbsp;&nbsp; 
 Typical reverse mortgage customers include individuals in their late 70s,
more often widowed than married, who are feeling an income squeeze but who
really want to stay in their homes. &nbsp;&nbsp;&nbsp; 
 They may be facing a crisis situation -- unexpected medical expenses, for
example. &nbsp;&nbsp;&nbsp; 
 Or they may have a limited income and increasing home expenses -- home
repairs, higher property taxes, &nbsp;&nbsp;&nbsp; 
 In taking out a reverse mortgage, "you truly are buying your home's
equity," says Diane Bruhl, director of marketing for the Ever Yours reverse
mortgage plan of Household Bank. Household Bank, which markets its program
through Household Finance Corporation branches, is one of a handful of
national reverse mortgage programs. &nbsp;&nbsp;&nbsp; 
 Other sources of reverse mortgages are the Federal Housing Administration;
Fannie Mae, the mortgage loan program backed by the federal government; and
mortgage companies that operate regionally. &nbsp;&nbsp;&nbsp; 
 Nationally, there are about 40,000 reverse mortgages in the program, which
has been available for less than 10 years. &nbsp;&nbsp;&nbsp; 
 Seniors trade in equity in home for money &nbsp;&nbsp;&nbsp; 
 Reverse mortgages are available only to seniors -- home owners age 62 and
older -- and the home must be paid for or almost paid for. &nbsp;&nbsp;&nbsp; 
 Because the reverse mortgage, by law, can be the only mortgage, the income
from the reverse mortgage must be used first to satisfy the original lien. &nbsp;&nbsp;&nbsp; 
 "What they're giving up, ultimately, is the equity in their home. In
exchange, they're getting money," Bruhl says. &nbsp;&nbsp;&nbsp; 
 The amount of money the home owner may be able to secure through a reverse
mortgage is influenced by a handful of factors -- the value of the home, the
life expectancy of the home owners, location and even time. &nbsp;&nbsp;&nbsp; 
 Albert and Mary Frances Sellers of Radnor, outside Philadelphia, have had
experience with two types of reverse mortgages -- the Fannie Mae reverse
mortgage and a reverse mortgage offered by Household Bank. &nbsp;&nbsp;&nbsp; 
 Albert Sellers says he learned the hard way to shop around and ask
questions. &nbsp;&nbsp;&nbsp; 
 The Sellerses -- he's 80 and she's 72 -- are owners of a $450,000 farmhouse
in the countryside near Valley Forge. Sellers inherited the home from his
parents, and he doesn't want to sell if he can continue to pay taxes on the
property and his wife's medical expenses. &nbsp;&nbsp;&nbsp; 
 Because the Sellerses have no children, inheritance wasn't an issue. &nbsp;&nbsp;&nbsp; 
 But staying in the home he was born in was. &nbsp;&nbsp;&nbsp; 
 Fannie Mae provided him a reverse mortgage of $60,000 but required him to
spend half to make house repairs, leaving him with less money than he needed. &nbsp;&nbsp;&nbsp; 
 He also made a critical mistake: He took all of the money available out
from the beginning, and interest began to accrue immediately on the total. &nbsp;&nbsp;&nbsp; 
 He then turned to the Household Bank mortgage -- which offered him a
slightly larger mortgage of about $75,000 -- for the money to bail him out of
the government program. &nbsp;&nbsp;&nbsp; 
 The result: He's now mortgaged to Household Bank, and has invested the
money remaining from the Fannie Mae reverse mortgage. Sellers believes he can
pay his bills. &nbsp;&nbsp;&nbsp; 
 "As long as we can keep paying our taxes we can stay here as long as we
want," he says. &nbsp;&nbsp;&nbsp; 
 Know what you are getting into &nbsp;&nbsp;&nbsp; 
 Home owners should do their homework before signing up for a reverse
mortgage, caution some groups, including the Federal Trade Commission and the
American Association of Retired Persons. &nbsp;&nbsp;&nbsp; 
 Those groups advise seniors considering a reverse mortgage to: &nbsp;&nbsp;&nbsp; 
 Realize that a reverse mortgage will reduce the inheritance you leave your
children. For some families, the parents' needs are more important than the
inheritance. &nbsp;&nbsp;&nbsp; 
 Talk to family members. Although the decision is ultimately the home
owners', an open discussion of money issues with other family members can be
helpful. &nbsp;&nbsp;&nbsp; 
 "Children often have a big influence on the decision that is made, because
it does affect their inheritance," Bruhl says. &nbsp;&nbsp;&nbsp; 
 Understand that all reverse mortgages are not alike. Consumers should shop
around before making a decision. &nbsp;&nbsp;&nbsp; 
 Ken Scholen of the National Center for Home Equity Conversion, a non-profit
consumer organization, offers these rules of thumb: &nbsp;&nbsp;&nbsp; 
 Federally insured reverse mortgages generally are best for people whose
homes are valued up to and slightly above the median for the community. &nbsp;&nbsp;&nbsp; 
 Fannie Mae is usually best for owners of homes above the median value. &nbsp;&nbsp;&nbsp; 
 Private plans might provide the most money for the highest-value homes. &nbsp;&nbsp;&nbsp; 
 Among the issues to consider: amount of the loan, how the money will be
paid, additional charges such as mortgage insurance, interest rate and how
interest is computed, and when the mortgage is due. &nbsp;&nbsp;&nbsp; 
 Talk to an attorney or accountant before making a decision. &nbsp;&nbsp;&nbsp; 
 Consider other options to a reverse mortgage, including selling the home
you are in and moving to a smaller home or an apartment. &nbsp;&nbsp;&nbsp; 
 "Usually, (moving is) the last thing on anyone's mind if they're thinking
about reverse mortgage," Scholen says. &nbsp;&nbsp;&nbsp; 
 The question to ask: "At your age, if you could get X for your house, what
money would you have if you invested it safely?" &nbsp;&nbsp;&nbsp;

More Money On The House For House-rich, Money-poor Seniors, Reverse Mortgages Can Provide Money For Retirement