AFC Reverse Mortgage

Financial Planning

admin — Wed, 05 Oct 2011 18:45:28 +0000

Estate and Financial Planning with Reverse Mortgages

Most FHA HECM reverse mortgages today are used by homeowners as a means to stay in their home or to improve their lifestyle, but as planners and advisors become more aware of the true cost of a reverse mortgage and as planning uses of reverse mortgages are developed, we believe the future of reverse mortgages may be in the area of estate and financial planning. New techniques are being developed and all planners should be familiar with this new tool.

NEW! A study soon to be released in the financial planning industry projects a higher end of life net worth for investors who use a Standby Reverse Mortgage HECM line of credit than for those who don’t. Dr. John Salter made a presentation about the study at the National Reverse Mortgage Lenders Association annual conference on Wednesday, October 26, 2011. Information on this new strategy can also be found in the AARP Magazine in their recent article (online Novemb er 2011) on options for getting money out of your home. Use our contact us form or give us a call if you’d like further information

Ms Colleen Moore, President of Golden Equity Mortgage of San Diego provided the following examples at the October 2008 annual meeting of the National Reverse Mortgage Lenders Association.

1. An elderly woman owned a 1.2 million dollar home but was running short of cash. To sell the home would have meant a $250,000 capital gain tax and finding a new place to live, but if she kept the home the heirs would likely inherit the home at a stepped up basis and thus avoid the $250,000 tax. The reverse mortgage suggested by the planner would be far less costly than paying the tax and would provide the cash for the elderly woman to remain in her home, a solution that pleased the entire family.

2. A woman with a large estate used a reverse mortgage lump sum to purchase a single premium life insurance policy that was placed in an irrevocable life insurance trust. Estate taxes saved were expected to far exceed the cost of the reverse mortgage.

Another planning possibility involves a couple in their 60′s drawing down on their 401K to pay $2000 per month on a $180,000 mortgage. A reverse mortgage would eliminate the mortgage payment and the drain on their 401K. After 10 years they would avoid having to draw $2000 x 12 x 10 = $240,000 in monthly payments from their 401K and the future balance in their 401K could potentially offset some or even all of the cost of the reverse mortgage. Should they get a reverse mortgage? That is something they should only decide with the advice of their financial advisors, but this example points out something about reverse mortgages that is sometimes overlooked – there is a substantial offsetting financial benefit to the homeowner in the future value of the payments not made (the cash retained) over the life of a reverse mortgage.

Our History

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AFC Reverse Mortgage is the latest reincarnation of a Lehigh Valley based lending business founded in 1947 by John and Anna Krajsa that has reinvented itself multiple times over the last sixty years. The company started out as a local small loan lender, grew into statewide wholesale mortgage banking, and then became a Fannie Mae energy loan lender offering low rate home improvement loans through over five hundred dealers in ten states.

The history of small businesses owned by the Krajsa family in the Lehigh Valley started in the 1920’s with Joseph F. and Agnes Krajsa who had emigrated to Allentown around 1906 from what is now the Slovak Republic. Joseph and Agnes epitomize the American Dream. They left Europe for a better life. They arrived penniless and could not speak English, and Joseph worked as a laborer in a wire mill. But they ended up owning a grocery store in Allentown and sending all three of their children to college.

Joseph extended a lot of credit to his customers over the years, and it was this part of the grocery business that John and Anna Krajsa found attractive. The lending business they started in the 1940′s offered consumer loans in amounts as low as $300 at a time when banks and other lending institutions limited their lending to commercial loans and consumer loans over $5000.

As banks entered the consumer lending market and innovative products such as credit cards came to dominate the small loan market, the next generation of Krajsas came on the scene, and the company moved into the mortgage business changing its name in 1980 to Allentown Financial Corporation (AFC).

In addition to operating as a mortgage lender, John Krajsa Jr and Peter Krajsa soon had the company funding the bulk of its growing portfolio through its own state registered public offering of investment certificates registered with the Pennsylvania Securities Commission.

Later in the 1980’s the company completed its first mortgage banking transaction and by the early 1990’s AFC was closing 30 to 40 mortgage loans per month which included loans from mortgage brokers around the state. In 1995 the company changed its name again, to AFC First, in recognition of the fact most of its business was now coming from outside the Lehigh Valley. AFC began offering FannieMae energy loans in 1997.

In 2003 FannieMae introduced the Krajsa brothers to the FHA HECM Reverse Mortgage which at the time was funded by FannieMae, and the AFC Reverse Mortgage program was born. AFC Reverse Mortgage, Inc. is now a free standing company with a product offering limited to reverse mortgages. AFC First continues to offer energy loans.

Over the years the Krajsas have participated actively in state and national trade associations, such as the Pennsylvania and American Financial Services associations. In the reverse mortgage world memberships include the National Reverse Mortgage Lenders Association (NRMLA), the National Council on Aging (NCOA) and the National Aging in Place Council (NAIPC).

HECM Lead Form

admin — Fri, 23 Sep 2011 13:09:43 +0000

[contact-form-7]

HECM Leads

admin — Thu, 22 Sep 2011 15:09:25 +0000

HECM Lead Program

The goal of our HECM Lead program is to provide your customer or client with the same professional service and customer care that they have come to expect from your organization. We offer only FHA HECM reverse mortgages so are not a direct competitor with most other institutions. That means that by working with us, you can satisfy your client’s needs and increase customer retention.

To Send us a Lead

Call 610-437-7230. Fax 610-437-7232. Or Fill Out the Online Form.

What We Do

For your customer or client:

We will work directly with your customer or client in their home, at your office, at our office, or any place of their choosing from the initial meeting through the closing. We will provide them with professional customer care and knowledge that comes from eight years in the Reverse Mortgage Business.

For you:

We will provide you with updates on the status of your client’s or csutomer’s Reverse Mortgage. We will provide a free seminar to better explain the Reverse Mortgage Program for you and your coworkers.

What You Do:

Decide your personal level of involvement: “Hands on” or “Hands off” approach.

Why AFC Reverse Mortgage:

Local: Loans processed by our staff in our Wescosville Office.
Knowledgeable: Our staff has closed hundreds of HECM loans since 2004.
Convenient: Your client will work with the same people from initial meeting through closing.
Fast: We process and close our loans in-house.
Free Consultations: We offer an initial meeting at a location and time chosen by our potential customer (such as their home or your office) to discuss the Reverse Mortgage Program.
HECM is Our Only Business: We are not a direct competitor.

Fees:
No fees paid for leads.

AFC Reverse Mortgage

Member of National Reverse Mortgage Lenders Association (NRMLA)
Member of National Aging in Place Council
Member of Greater Lehigh Valley Chamber of Commerce

Reverse Mortgage Seminars

admin — Mon, 20 Dec 2010 15:22:12 +0000

Thursday March 8th

6 p.m. Brookside Country Club 901 Willow Lane Macungie, PA 18062

Tuesday March 13th

Noon Brookside Country Club 901 Willow Lane Macungie, PA 18062

Lunch or Dinner will be provided. Please call 610-437-7230 to reserve your seat or register through our Contact Us page. We look forward to answering . . . → Read More: Reverse Mortgage Seminars

Reverse Mortgage News

admin — Tue, 22 Jun 2010 19:32:20 +0000

4 Ways to Tap Your House for Cash (“Standby Reverse Mortgage” Featured)
AARP Magazine December 2011

Lower Upfront Fees May Improve Demand for Reverse Mortgages
The Morning Call November 2010

Reverse Mortgage Are Not the Next Sub-prime
Washington Post January 2010

Reverse Mortgages Come To The Rescue
Washington Post August 2009

Reverse Mortgages Jump Into High Gear
Philadelphia Inquirer May 2009

GMA Report on Reverse Mortgages January 8, 2008
Read Report Online

PBS TEMPO Newsmagazine Report on AFC Reverse Mortgage
The Tempo report is #452 May 28 – June 1

John Krajsa Interviewed in Morning Call Article
Read Morning Call Article 12/16/2007