SSRN-id2749368

Electronic copy available at: http://ssrn.com/abstract=2749368

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Aging in Place: Analyzing the Use of Reverse Mortgages to Preserve

Independent Living

Summary Report of Survey Results

March 15, 2016

Research Study Team: Stephanie Moulton (PI),* Cäzilia Loibl, Donald R. Haurin, J. Michael Collins, Stephen Roll, Olga Kondratjeva,

and Wei Shi

*Contact Information: Stephanie Moulton; [email protected]; John Glenn College of Public Affairs, The Ohio State University, Columbus, Ohio, U.S.A.

Acknowledgement and disclaimer: We acknowledge funding from the John D. and Catherine T. MacArthur Foundation for a grant award entitled, “Aging in Place: Analyzing the Use of Reverse Mortgages to Preserve Independent Living,” 2012-14, Stephanie Moulton, PI. The work that provided the basis for this publication was also supported by funding under a grant with the U.S. Department of Housing and Urban Development (Grant title: “Aging in Place: Managing the Use of Reverse Mortgages to Enable Housing Stability,” 2013-2015, Stephanie Moulton, PI). The substance and findings of the work are dedicated to the public. The authors and publishers are solely responsible for the accuracy of the statements and interpretations contained in this publication. Such interpretation does not necessarily reflect the view of the Government. Suggested citation: Moulton, Stephanie, Cäzilia Loibl, Donald R. Haurin, J. Michael Collins, Stephen Roll, Olga Kondratjeva and Wei Shi. 2016. Aging in Place: Analyzing the Use of Reverse Mortgages to Preserve Independent Living. Survey Report. Columbus, Ohio: John Glenn College of Public Affairs, The Ohio State University.

mailto:[email protected]

Electronic copy available at: http://ssrn.com/abstract=2749368

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Contents

Preface: Study Background............................................................................................................. 3

1. The Reverse Mortgage Decision ............................................................................................... 13

2. Reverse Mortgage Counseling .................................................................................................. 19

3. Reverse Mortgage Loan ............................................................................................................ 23

4. Reverse Mortgage Termination ................................................................................................ 26

5. Reverse Mortgage Not Obtained .............................................................................................. 28

6. Personal Finance ....................................................................................................................... 30

7. Housing Situation...................................................................................................................... 38

8. Health Status ............................................................................................................................. 45

9. Financial Capability .................................................................................................................. 53

References ..................................................................................................................................... 57

Appendix: Survey ......................................................................................................................... 59

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Preface: Study Background

Equity in a home can serve as an important source of supplemental income in retirement. Indeed, home equity makes up a substantial portion of wealth for senior households. Approximately 80 percent of households aged 65 or older own a home (U.S. Census Bureau 2015) and equity in owner-occupied homes comprises the primary source of wealth for most seniors (Sinai and Souleles 2013; Consumer Finance Protection Bureau 2012). However, homeowners may not be willing to sell their homes to access the equity, and may be unwilling or unable to make additional payments that are required to borrow equity from their home using a traditional mortgage.1 Reverse mortgages are designed to address this tradeoff by allowing seniors to draw down equity without selling their home, and without a monthly mortgage payment. The reverse mortgage loan and the accumulated interest is repaid when the individual dies, moves out, sells the home, or is foreclosed upon due to unpaid property taxes and homeowner’s insurance, which remain the obligation of the borrower. The most widely used reverse mortgage product is offered by Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program, first initiated in the Housing and Community Development Act of 1987 (Pub.L. 100-242). Reverse mortgages are designed to improve the financial stability of seniors by providing a way to “supplement Social Security, meet unexpected medical expenses and make home improvements” (U.S. Department of Housing and Urban Development 2006). During the 1990s, reverse mortgages were largely unknown, with fewer than 1 percent of eligible homeowners using this product (Eschtruth, Sun, and Webb 2006). In the past decade, the market has greatly expanded. Figure P1 plots HECM originations by federal fiscal year. Since program inception, nearly 1 million loans have been originated, more than 80 percent since FY2006, with peak volume in FY2009 (National Reverse Mortgage Lenders Association 2016).

1 For example regarding the desire of seniors to stay in their homes, by one AARP study, 95 percent of persons 75 and older agreed with the statement “What I’d really like to do is stay in my current residence as long as possible” (Bayer and Harper 2000).

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Figure P1: HECM Originations per Federal Fiscal Year

Source: National Reverse Mortgage Lender’s Association (2015)2

Demand for equity extraction may increase over the next decade with aging of the baby boomer population, many of whom are retiring with low levels of savings and relatively high levels of mortgage debt (Lusardi and Mitchell 2013). Given the large proportion of household wealth held as home equity and the desire of seniors to stay in their homes as long as possible, prior studies tend to estimate relatively high demand for reverse mortgages that has yet to be realized (Venti and Wise 1991; Merrill, Finkel, and Kutty 1994; Rasmussen, Megbolugbe, and Morgan 1995; Mayer and Simons 1994; Costa-Font, Gil, and Mascarilla 2010). A few descriptive studies examined the differences between seniors obtaining reverse mortgages and seniors in the general population (Rodda, Herbert, and Lam 2000; Redfoot, Scholen, and Brown 2007). In prior studies, those seeking reverse mortgages tended to be older (although the average age has declined from 76 years of age in 2000 to 73.5 years of age in 2006), and were more likely to be female-headed households. They also tended to be better educated than the general population. As expected, they tend to have lower incomes than the general population, about 40 percent lower than the median income for other seniors (DeNavas-Walt, Proctor, and Lee 2006). At the same time, reverse mortgage borrowers tended to have more home equity than non-borrowers. In 2007, AARP conducted a survey of about 1,500 households who had considered reverse mortgages in the prior few years (Redfoot, Scholen, and Brown 2007). The AARP survey assessed motivations for seeking reverse mortgages, experience with the reverse mortgage process and a limited array of outcomes—primarily tied to the use of funds and satisfaction with the product. At that time, a majority (about 90 percent) reported that the reverse mortgage has “given them peace of mind,” “helped them have a more comfortable lifestyle,” and “improved their quality of life”. Seventy-nine percent agreed with the statement that a reverse mortgage “helped them remain at home” (Redfoot, Scholen, and Brown 2007). While the AARP survey sheds light on senior experiences with reverse mortgages, it provides limited information about the longer-term outcomes of borrowers in terms of their financial and personal well-being. More than one-third of the AARP respondents had only considered a reverse mortgage in the year before the survey, with 90 percent considering the reverse mortgage in the prior three years. Further, substantial changes in the economy and in the reverse mortgage 2 https://www.nrmlaonline.org/2015/01/22/annual-hecm-endorsement-chart

020,00040,00060,00080,000

100,000120,000140,000

1990

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market since 2007 highlight the need for updated research on borrower experiences. Aging in Place Study

The Aging in Place study is a multi-phase research project being conducted by researchers at The Ohio State University, in partnership with a certified reverse mortgage counseling agency, ClearPoint Credit Counseling Solutions, with funding from The MacArthur Foundation and The U.S. Department of Housing and Urban Development (HUD). The goal of the study is to provide a better understanding of the relationships between borrowing through a reverse mortgage and older adults’ financial security, well-being, and independence in older age. The research population includes about 30,000 seniors who were counseled by ClearPoint for a reverse mortgage between 2006 and 2011. Before obtaining a HECM loan, prospective borrowers are required to complete counseling with a certified counseling agency. The study dataset includes demographic information, indicators of financial health, and credit and debt attributes obtained from credit files for households who provided consent as part of the counseling process. In addition, data on loan outcomes has been provided by HUD, including data on whether or not the counseled senior took out a reverse mortgage, the type of mortgage taken, and draw amounts and termination outcomes. Finally, the study includes the administration of a survey to collect data on senior experiences with reverse mortgages, as well as longer term outcomes of household well-being. This report provides a summary of the responses obtained through the survey. The purpose of this summary is descriptive. An important goal of the broader Aging in Place study is to estimate the impact of reverse mortgages on longer term financial stability and well-being. This will require longer-term tracking of borrowers to estimate the outcomes of households who obtained reverse mortgages using comparison households who did not. The current survey can only descriptively compare the responses of seniors who were counseled and obtained a reverse mortgage to those who were also counseled and who did not obtain a reverse mortgage. Of course, there are likely substantial differences between the contexts of these two groups, many of which the survey cannot measure. The survey design does not allow for conclusions about whether reverse mortgage borrowers behave differently, or have different experiences than non-borrowers. However, the survey does hold promise of some important insights. Aging in Place Survey

The Aging in Place Survey was administered in phases from January, 2014 through July, 2015. A pilot survey was administered and analyzed from January, 2014 to June 30, 2014, with the full launch of the survey commencing July 1, 2014. All 30,000 counseled households were included in the sample population, with representation from three groups of respondents: (1) those who decided not to take out a reverse mortgage; (2) those who took out a reverse mortgage and retained it as of the survey date; (3) and those who took out and then terminated their reverse mortgage as of the survey date. The survey was administered by the Center for Human Resource Research (CHRR) at The Ohio State University, in partnership with ClearPoint Credit Counseling Solutions. ClearPoint mailed an advance letter to counseled households to invite their participation in the survey and to inform

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them that they would be contacted in the near future by the research team. Counseled households were given three options for completing the survey: (1) self- administered, online, via a customized web-link; (2) self-administered, by mail, via a paper survey; or (3) by telephone with a trained interviewer. The invitation letter provided a link to the online version of the Aging in Place survey and included a toll-free number to call to set up a time to complete the survey over the telephone with an interviewer, or request a paper copy of the survey by mail. Participation in the survey was voluntary. Respondents were entered into a drawing to receive one of six $100 gift cards, regardless of whether or not they completed the entire survey. Survey respondents were provided with information about the study and asked for consent to use their data for research purposes prior to proceeding with the survey. The administration of the survey lasted an average of about 30 minutes per respondent. All survey responses are confidential, with data securely maintained following a protocol approved by the Institutional Review Board (IRB) at The Ohio State University. No identifying information on participants is shared with anyone outside of the research team. All survey responses are reported in the aggregate. Survey Sample and Response Rate

The initial population for the survey included 29,702 households who had been counseled by ClearPoint for a reverse mortgage between 2006 and 2011. Of the 29,702 households, viable contact information (including a working telephone number) was available for 16,653 households at the time of survey administration. The remaining 13,049 contacts were deemed not viable for the following reasons: phone number disconnected or no longer in service, with no forwarding information (52%); no contact information provided in the participant’s file (32%); phone number blocked (9.5%); death of both household members, with no alternative contact person provided (4.5%); and technical errors in the information provided (2%). The 16,653 households were contacted by mail, phone and email (when available) with an invitation to complete the survey. 1,918 responded to the request and were provided with information about the survey, for a response rate of 11.5%. Of the 1,918 responding, 1,779 (93%) consented to participate in the survey, and 1,761 completed at least the first set of questions on reverse mortgage status.3 These 1,761 respondents are the base sample for the analysis of survey results. Respondent and Non-Respondent Characteristics

We compare the characteristics of respondents and non-respondents using the administrative study data linked to the survey data. This allows us to identify the extent to which the survey respondents are representative of the larger counseling sample. We compare respondents to both viable non-respondents as well as non-viable respondents. Table P.1 presents the proportion of households in the three groups, by year of counseling. The majority of households responding to the survey (and consenting) were counseled in the year

3 In total, 1,779 households consented to participate in the survey; however, 17 households did not complete the first set of questions about the status of their reverse mortgage decision, and thus are excluded from the analysis.

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2010 (38%) or 2011 (37%), followed by 2008 and 2009 (about 10% each year), and about 4% counseled in 2006 or 2007. The most common respondent would thus be 4 to 5 years post-counseling at the time of the survey, with a smaller proportion of respondents (14%) 6 to 9 years post counseling. This is generally representative of the proportion of households counseled in each year among non-respondents, with a higher proportion of the households in the non-viable group counseled in the earlier years (2008 or earlier). Table P.1: Comparison of Respondents and Non-Respondents, by Year of Counseling

2006 2007 2008 2009 2010 2011 Year

Missingi Total Response, Consent

N 28 42 185 185 678 660 1 1,779 Percent across years 1.57 2.36 10.4 10.4 38.11 37.1 0.06 100 Percent within year 3.3 3.55 4.42 4.93 6.83 6.97 0.3 5.99 Response, No Consent

N 3 1 13 12 60 50 0 139 Percent across years 2.16 0.72 9.35 8.63 43.17 35.97 0 100 Percent within year 0.35 0.08 0.31 0.32 0.6 0.53 0 0.47 No Response

N 310 467 1,741 1,700 5,353 4,991 173 14,735 Percent across years 2.1 3.17 11.82 11.54 36.33 33.87 1.17 100 Percent within year 36.51 39.44 41.56 45.27 53.93 52.73 51.8 49.61 Not Viableii

N 508 674 2,250 1,858 3,835 3,764 160 13,049 Percent across years 3.89 5.17 17.24 14.24 29.39 28.85 1.23 100 Percent within year 59.84 56.93 53.71 49.48 38.64 39.77 47.9 43.93 Total

N 849 1,184 4,189 3,755 9,926 9,465 334 29,702 Percent across years 2.86 3.99 14.1 12.64 33.42 31.87 1.12 100 Percent within year 100 100 100 100 100 100 100 100 See p. 60 for consent language Source: Aging in Place study administrative data, linked to Aging in Place survey data by respondent i Missing indicates that administrative data, including year, is missing for the observation ii Not viable includes phone number disconnected/no longer in service, no forwarding information; no contact information; phone number blocked; death of both household members, no alternative contact person; technical errors in the information Next, we consider the distribution of respondents and non-respondents by HECM status (Table P.2). Overall, a higher proportion of households who obtained and retained their HECM responded to the survey, comprising about 68% of the survey respondents. By contrast, households who did not obtain a HECM comprised about 26% of the survey population. Households who did not obtain a HECM were much more likely to be in the group of not-viable respondents (comprising more than half of this group). It is possible that those not obtaining HECMs were more likely to relocate after counseling, thus contributing to lack of viable contact information for these households.

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Finally, households who obtained and subsequently terminated their HECMs comprise about 6% of the survey response group. This is slightly higher than their overall representation in the total counseling population, and much higher than the proportion in the non-response group (less than 2%). As would be expected, more than three quarters of households terminating their reverse mortgage lacked viable contact information. Later waves of the survey administration specifically targeted households who did not take out a reverse mortgage and those who had terminated their reverse mortgages, in an attempt to increase the number of respondents in these groups. Table P.2: Comparison of Respondents and Non-Respondents, by HECM Status

Did not Obtain HECM

Obtained & Retained HECM

Obtained & Terminated

HECM

Status Missingi Total

Response, Consent N 471 1,205 103 0 1,779

Percent across status 26.48 67.73 5.79 0 100 Percent within status 3.43 8.52 6.79 0 5.99 Response, No Consent

N 47 89 3 0 139 Percent across status 33.81 64.03 2.16 0 100 Percent within status 0.34 0.63 0.2 0 0.47 No Response

N 6,263 8,030 269 173 14,735 Percent across status 42.5 54.5 1.83 1.17 100 Percent within status 45.66 56.8 17.74 51.95 49.61 Not Viableii

N 6,935 4,813 1,141 160 13,049 Percent across status 53.15 36.88 8.74 1.23 100 Percent within status 50.56 34.05 75.26 48.05 43.93 Total

N 13,716 14,137 1,516 333 29,702 Percent across status 46.18 47.6 5.1 1.12 100 Percent within status 100 100 100 100 100 Source: Aging in Place study administrative data, linked to Aging in Place survey data by respondent i Missing indicates that administrative data, including HECM status, is missing for the observation ii Not viable includes phone number disconnected/no longer in service, no forwarding information; no contact information; phone number blocked; death of both household members, no alternative contact person; technical errors in the information In addition to general sample distributions, we examine differences in the respondent and non-respondent groups on specific demographic, financial, credit and housing indicators available in our administrative datasets. Table P.3 presents summary statistics for the survey population, and then tests for statistical differences in the mean characteristics compared to the no response group, and the not viable group. The summary statistics are drawn from three different administrative datasets: household demographic characteristics at the time of counseling, credit attributes data at the time of counseling, and HUD HECM loan data as of July, 2014 for all HECM borrowers in our sample’s counseling population. The sample sizes are slightly different

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in the three datasets; not all households had complete credit attribute data at the time of counseling, and only households obtaining HECMs are included in the HUD HECM loan dataset. Table P.4 shows these same summary statistics for just the survey respondents, but further broken down by HECM status: if the respondent had not obtained a HECM, had obtained and still retained the HECM at the time of the survey, or obtained but had terminated the HECM at the time of the survey. In terms of household financial characteristics, the average survey respondent had a monthly income of about $2,403 when they attended counseling, with a median amount of $1,840 in non-housing assets. About 45% of respondents reporting zero non-housing assets at the time of counseling. These numbers are slightly lower for respondents who did not obtain a HECM. Non-respondents and those not viable tend to have significantly lower monthly incomes and fewer non-housing assets. The average survey respondent was 70 years old at the time of counseling, and about one-third of respondents were single female-headed households—similar to the distribution in the non-response and non-viable populations. The survey was only administered in English; thus, it is not surprising that survey respondents are significantly less likely to be Hispanic than non-respondents, and are significantly less likely to report that English is not their native language (1% of survey respondents, compared to 7% of non-respondents). Among survey respondents (all of whom received counseling for a reverse mortgage), those who did not obtain a HECM were more likely to be black. With regard to the highest level of education completed, survey respondents tend to have more education: 17% have a four-year college degree, compared to only 11% of the non-respondent population, and 9% of the non-viable population. With regard to mortgage debt, two-thirds of survey respondents had any mortgage debt at the time of counseling, prior to obtaining the HECM. The average LTV of respondents at the time of counseling was just under 30 percent—with no significant differences between respondents and non-respondents. Among respondents, those who did not obtain a HECM and those who obtained but terminated the HECM had the highest level of mortgage debt. Turning to credit attributes, the average survey respondent had a credit score of 699 at the time of counseling which is significantly higher than the average score of 684 for non-respondents and 665 for those without viable contact information. Among respondents, those who did not obtain a HECM have lower credit scores on an average with a score of 677, compared to over 700 for those who did obtain a HECM. A very small proportion of households was in foreclosure at the time of counseling or had experienced a recent bankruptcy. Survey respondents have a significantly higher amount of revolving credit available from which they could borrower, and this number is highest for respondents who obtained a HECM. Respondents overall are also slightly less likely to have been past due on their mortgage at the time of counseling than non-respondents; however those respondents who did not obtain a HECM are twice as likely to have been past due at the time of counseling than those who did obtain a HECM. About 7 percent of survey respondents had a prior tax lien on their credit record at the time of counseling, which is significantly lower than the proportion of non-respondents with a tax lien, although non-borrowers are worse off than their borrower peers, with 12% having a tax lien.

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Finally, merging in HECM loan data from HUD, we consider attributes of the HECM loan among those respondents and non-respondents who originated a HECM after counseling. Across all groups, the average proportion of available equity extracted at the time of origination is 77 percent of the Initial Principal Limit (IPL), with a median of 95 percent among survey respondents.4 This reflects the relatively high proportion of households originating fixed rate, full draw mortgages from 2009 to 2011—the peak years of counseling for households in our sample. The last thing that we consider is the proportion of households who originated a HECM and subsequently experienced default for not paying their property taxes and homeowners insurance premiums. Default occurs when a HECM borrower does not make their property tax or insurance payment, and there are no available funds left on the HECM from which the lender could make the payment. Lenders must advance the funds, and proceed to call the loan due and payable if the borrower does not cure the default within two years. This has been a growing problem for HUD during our sample period, with approximately 12% of households in the HECM program as a whole experiencing technical default as of 2014 (Moulton, Haurin and Shi 2015). Among our survey respondents, 11% had ever experienced default, and 3.5% were in severe default, which we define as owing $2,000 or more in property taxes and homeowners insurance and not making debt repayments as of July, 2014. These proportions are relatively similar to the non-response sample. However, of the households lacking viable contact information in our sample, one in five had experienced technical default, and nearly one in ten were in severe default as of July, 2014. This comparison indicates that survey respondents are not necessarily representative of the broader study population of households counseled by ClearPoint for a reverse mortgage during our study period. Survey respondents tend to be in a better financial position at the time of counseling, with relatively higher incomes, assets and stronger credit portfolios than non-respondents. Further, respondents tend to have obtained a higher level of education than non-respondents. Respondents who originated a HECM are less likely to have experienced severe default on their property taxes and insurance than non-respondents. These differences should be kept in mind when interpreting the results of the survey. The remaining sections of the report summarize the survey responses by topic, with each topic corresponding to a set of questions on the survey. The corresponding survey text for each question is provided in Appendix A, with the page number for where the question can be found given at the base of each table.

4 The Initial Principal Limit (IPL) is the maximum amount of money that a borrower could obtain from a reverse mortgage, which is a function of the borrower’s age, the expected interest rate and the value of the home. For the average HECM borrower, the IPL is about 60 percent of the home’s value. The IPL increases with the age of the borrower at origination, and decreases as interest rates rise.

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Table P.3: Household Characteristics, by Survey Response Status

Response, Consent No Response Not Viablei

Demographics Mean (Median) Mean Mean Years since counseling 4.61 (4.34) 4.71 ** 5.04 **

Monthly income 2,403 (2,003) 2,286 * 2,019 ** Non-housing assets 60,111 (1,840) 45,284 ** 33,889 **

Zero non-housing assets 0.448 0.505 ** 0.586 ** Hispanic 0.039 0.108 ** 0.125 **

Race, white 0.699 0.642 ** 0.587 ** Race, black 0.151 0.161

0.176 **

Race, Asian 0.007 0.009

0.009 Unmarried, male 0.171 0.144 ** 0.156 Unmarried, female 0.330 0.339

0.340

Age, youngest hhld member 70.12 (69) 70.192

70.815 * Non-English Speaking 0.012 0.069 ** 0.086 **

Education, HS graduate 0.242 0.331 ** 0.312 ** Education, some college 0.240 0.203 ** 0.176 ** Education, 4 YR college 0.165 0.112 ** 0.094 ** Education, post-graduate 0.082 0.050 ** 0.039 **

Education, missing 0.172 0.179

0.245 ** Home debt at counseling 77,719 (42,894) 72,718

68,653 **

Home value at counseling 265, 392 (200,000) 252,963

227,459 ** Has any mortgage 0.657 0.637

0.591 **

LTV at counseling 0.286 0.282

0.282 N 1,778 14,562 12,889

Credit Attributes Mean (Median) Mean Mean Revolving debt to income 0.225 0.236 0.196 **

Installment debt to income 0.209 0.233 0.236 * Foreclosure, started 0.015 0.020 0.022

Bankruptcy, 12 months 0.012 0.010 0.012 No revolving credit available 0.064 0.093 ** 0.108 **

Revolving unused amount 29,178 (13,005) 24,108 ** 19,814 ** FICO score 699 (716) 684 ** 665 **

Past due mortgage 0.049 0.058 0.070 ** Tax lien 0.078 0.102 ** 0.112 **

N 1,696 13,658 11,868 HECM Indicators Mean (Median) Mean Mean

HECM, initial draw (% IPL) 0.774 (0.947) 0.778 0.777 HECM T&I Default, Ever 0.110 0.126 0.207 **

HECM T&I Default, Severe 0.035 0.050 * 0.087 ** N 1,161 8,299 5,954

Note: t-tests for significant differences in means between the response group and each group *p<.05; **p<.01 i Not viable includes phone number disconnected/no longer in service, no forwarding information; no contact information; phone number blocked; death of both household members, no alternative contact person; technical errors in the information See p. 60 for consent language

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Table P.4: Household Characteristics for Survey Respondents, by HECM Status

Did not obtain RM Obtained and retained RM

Obtained then terminated RM

Demographics Mean (Median) Mean (Median) Mean (Median) Years since counseling 4.47 (4.20) 4.67(4.40) 4.49 (4.22)

Monthly income 2,308 (1,914) 2,437 (2,024) 2,451 (2,052) Non-housing assets 64,249 (1,104) 58,919 (2,300) 55,128 (1,150)

Zero non-housing assets 0.43 0.45 0.47 Hispanic 0.04 0.04 0.05

Race, white 0.61 0.73 0.71 Race, black 0.24 0.12 0.13 Race, Asian 0.00 0.01 0.02

Unmarried male 0.19 0.16 0.25 Unmarried female 0.30 0.34 0.37

Age, youngest hhld member 69.24 70.33 71.83 Non-English Speaking 0.01 0.01 0.00

Education, HS graduate 0.24 0.25 0.19 Education, some college 0.24 0.24 0.29 Education, 4 YR college 0.17 0.17 0.15 Education, post-graduate 0.09 0.08 0.08

Education, missing 0.15 0.18 0.17 Home debt at counseling 80,662 (45,199) 75,375 (42,794) 91,666 (28,169)

Home value at counseling 216,609 (167,000) 273,965

(200,000) 388,264 (253,00) Has any mortgage 0.69 0.65 0.56 LTV at counseling 0.35 0.27 0.19

N 471 1204 103 Credit Attributes

Revolving debt to income 0.18 0.24 0.26 Installment debt to income 0.22 0.20 0.25

Foreclosure, started 0.02 0.01 0.03 Bankruptcy, 12 months 0.02 0.01 0.01

No revolving credit available 0.11 0.05 0.05 Revolving unused amount 24,737 (6,651) 30,356 (15,180) 35,712 (13,849)

FICO score 677 707 703 Past due mortgage 0.08 0.04 0.04

Tax lien 0.12 0.06 0.09 N 447 1153 96

HECM Indicators HECM, initial draw (% IPL)

0.78 0.70

HECM T&I Default, Ever

0.11 0.09 HECM T&I Default, Severe

0.03 0.03

N 1062 87

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1. The Reverse Mortgage Decision

1.1 Borrower and non-borrower status of survey respondents

The first set of questions on the Aging in Place survey asked participants about whether or not they decided to obtain a reverse mortgage, and if yes, the current status of the loan. Of the 1,779 seniors consenting to participate in the survey, 1,761 provided a response to this first set of questions. These 1,761 respondents become the base sample size for the remaining analysis of survey responses in this report. For each question, we indicate the number of respondents as well as the number who do not respond to the question, which includes those who reported “don’t know” (DK), decline to respond (refuse), or skip the question (missing). Percentages shown are calculated as a percent of respondents for each question (“N (Respondents”), excluding non-responses. In terms of the reverse mortgage decision, 68% of respondents reported obtaining a reverse mortgage, and still having the reverse mortgage as of the time of the survey (N=1,192). About 6% obtained a reverse mortgage, but had terminated it by the time of the survey (N=102). Respondents were asked about their reasons for termination, including sale of the home, which was the most frequently provided reason for termination, refinancing it to another reverse mortgage, repaying or refinancing it with a non-reverse mortgage loan, and foreclosure. About one quarter of Aging in Place survey participants, 27%, decided against obtaining a reverse mortgage after completing counseling (N=467).

Table 1.1 Survey Respondent Status Status of Reverse Mortgage N % Did not obtain 467 27% Obtained, retained 1,192 68% Obtained, terminated 102 6% If terminated: Sold home 46 45%

Refinanced to another RM 28 27% Repaid or refinanced with non-RM loan 19 19%

Foreclosed 7 7% Other 2 2%

N (Respondents) 1,761 N (DK/Refuse/Missing) 18 See p. 61 for survey questions

1.2 Satisfaction with the decision to obtain or not obtain a reverse mortgage

Reverse mortgage borrowers in this survey expressed satisfaction with their decision to obtain a reverse mortgage. On a scale from 1=very dissatisfied to 5=very satisfied, the average rating of respondents who retained their reverse mortgage was 4.2 and the average rating of those who terminated their reverse mortgage was 4.0. The average rating of respondents who decided against obtaining a reverse mortgage was 3.6 on this satisfaction measure.

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Broken down by the distribution of respondents selecting satisfied or very satisfied:

• “Very satisfied” with the reverse mortgage decision—Among active borrowers, more than half, 54%, reported that they were “very satisfied” with their decision to obtain a reverse mortgage. Terminated borrowers ranked second, with 48% indicating they were “very satisfied” with their decision. Among non-borrowers, 42% were “very satisfied” with their decision to not take out a reverse mortgage.

• Reverse mortgage borrowers are satisfied with reverse mortgage decision—Among active borrowers, 83% reported that they were “satisfied” or “very satisfied” with their decision to obtain a reverse mortgage. By contrast, only 15% reported being somewhat or very dissatisfied with their decision.

Table 1.2 Satisfaction with Reverse Mortgage Decision

Satisfaction Did not

obtain RM

Obtained and retained

RM

Obtained then terminated

RM Very satisfied 42% 54% 48% Somewhat satisfied 18% 29% 29% Neither satisfied nor unsatisfied 10% 3% 4% Somewhat unsatisfied 12% 8% 7% Very unsatisfied 18% 7% 11%

N (Respondents) 448 1176 100 N (DK/Refuse/Missing) 19 16 2

See p. 62 for survey question(s) 1.3 How counselees first learned about reverse mortgages

Aging in Place survey participants were asked how they first learned about reverse mortgages. Advertisements, in particular television advertisements, were by far the most frequent primary information source, selected by 57% of the sample: 47% of respondents learned about this financial product from TV advertisements and 10% from print, internet or radio advertisements. Further, about 18% of Aging in Place survey respondents first heard about reverse mortgages from family, friends, church or a community organization, 10% from a lender who worked for a bank or mortgage company, and 9% from someone other than banking and financial counseling/advising professionals. There are a few notable differences by reverse mortgage status:

• Did not obtain a reverse mortgage—This group of survey participants was more likely than those who obtained a reverse mortgage to first learn about this financial product from advertisement: 63% reported ads as their initial source.

• Obtained and terminated a reverse mortgage—This group of survey participants were the least likely to first learn about a reverse mortgage through advertisement: 47% reported it as their initial source.

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Table 1.3 How Counselees first Learned about Reverse Mortgages

Did not obtain RM

Obtained and retained

RM

Obtained then

terminated RM Total

Advertisement Subtotal: 63% 55% 47% 57% Television advertisement 53% 46% 33% 47% Newspaper or magazine 7% 6% 9% 7%

Internet advertisement 3% 2% 5% 2% Radio advertisement 1% 1% 0% 1%

Family/Friend/Community Subtotal: 15% 19% 15% 18% Friend or neighbor 8% 9% 6% 9%

Family member or relative 6% 9% 9% 8%

Church or community organization 1% 0% 0% 0%

Bank or mortgage company 8% 10% 13% 10%

Professional financial advisor 3% 6% 12% 5% Information from AARP 2% 1% 1% 1% Other 9% 9% 12% 9%

N (Respondents) 444 1085 85 1614 N (DK/Refuse/Missing) 23 107 17 147

See p. 62 for survey question(s) 1.4 Initial reasons for considering reverse mortgages

The Aging in Place survey asked respondents about the reasons they considered obtaining a reverse mortgage. Respondents could select multiple reasons. The most commonly chosen reason, selected by 42%, was to gain extra income for everyday expenses (other than health needs). Second was to pay off mortgage debt (39%) and to pay off non-mortgage debt (such as credit cards, personal loans, and other debts; 26%). Other initial plans for the reverse mortgage loan were to pay for home improvements (24%), to provide financial help for family members (19%), to postpone using other sources of retirement income (16%), and to pay for ongoing health or disability-related expenses (14%). About 10% of survey respondents obtained a reverse mortgage as a means to lock in home equity in case of declining housing prices, and fewer than 10% were planning to use the reverse mortgage to finance a big purchase (such as a car or vacation) or to purchase a new property. There are a few notable differences by reverse mortgage status:

• Did not obtain a reverse mortgage —Among respondents who decided against a reverse mortgage, the order of initial reasons is slightly reversed. The most often selected reason for looking into reverse mortgages was to pay off mortgage debt: 44% of non-borrowers indicated this item as an initial reason. Covering everyday expenses was a close second: 41% of non-borrowers indicated this reason. Home improvements ranked third (28%), repaying non-mortgage debt ranked fourth (23%) and supporting family

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ranked fifth (19%). • Obtained and terminated a reverse mortgage —Reverse mortgage borrowers who had

terminated their reverse mortgage by the time of the survey indicated a distinctly different, more evenly distributed ranking of their initial reasons. While everyday expenses were still the most frequently selected item of the list of reasons, it was selected by only 38%. Second-most important reasons were repaying mortgage debt (24%) and paying for ongoing health or disability-related expenses (23%) as well as repaying non-mortgage debt (22%) and supporting family members (18%).

Table 1.4 Primary Reasons for Considering a Reverse Mortgage

(Select all that apply) Did not

obtain RM Obtained and retained RM

Obtained then

terminated RM Total

Everyday expenses 41% 42% 38% 42% Pay off mortgage 44% 39% 24% 39% Pay off non-mortgage debt 23% 27% 22% 26% Home improvements 28% 22% 21% 24% Financial help to family 19% 19% 18% 19% Postpone other retirement income 18% 15% 10% 16% Health or disability expenses 13% 14% 23% 14% Lock-in home equity 13% 9% 6% 10% Big purchase 6% 6% 6% 6% Purchase new property 5% 3% 5% 4% Other 13% 16% 18% 15%


See p. 63 for survey question(s)

1.5 How reverse mortgage borrowers spent the funds from their reverse mortgage

After providing their initial plans for the reverse mortgage, Aging in Place survey participants were asked about the actual ways the money from the reverse mortgage was spent. The same list was provided as in the previous question. Survey participants could select up to three items. Overall, the planned and actual uses of reverse mortgage funds were similar. The top three actual uses of the reverse mortgage among active borrowers were to gain extra income for everyday expenses and to repay mortgage debt (36% and 35% of respondents, respectively) and to repay non-mortgage debt (31%). Expenses for home improvement ranked fourth (29%) and payments for health or disability-related reasons ranked fifth (15%). About 15% of survey participants provided reasons that were not part of the list. Notable differences by reverse mortgage status:

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• Obtained and terminated a reverse mortgage—Among respondents who had terminated their reverse mortgage at the time of the survey, the actual uses of the reverse mortgage are slightly different. Repaying mortgage debt only ranks fifth (selected by 21% in this group), behind everyday expenses (29%), paying off non-mortgage debt (27%), paying for home improvements (24%) and health or disability-related expenses (23%).

Table 1.5 Use of Reverse Mortgage Funds

(Select all that apply) Obtained and retained RM

Obtained then terminated RM Total

Everyday expenses 37% 29% 36% Pay off mortgage 37% 21% 35% Pay off non-mortgage debt 31% 27% 31% Home improvements 29% 24% 29% Health or disability expenses 14% 23% 15% Financial help to family 13% 13% 13% Postpone other retirement income 9% 9% 9% Big purchase 7% 7% 7% Purchase new property 2% 5% 2% Other 14% 20% 15%

N (Respondents) 1,169 99 1,268 N (DK/Refuse/Missing) 23 3 26

See p. 63 for survey question(s) 1.6 Reasons for paying off mortgage debt among those who indicated mortgage debt as an

initial reason for looking into a reverse mortgage

Often, reverse mortgage borrowers use a reverse mortgage to pay off a current mortgage. By definition, reverse mortgages can be the only lien on the property, and thus homeowners with an existing mortgage must pay off their current mortgage prior to obtaining a reverse mortgage. Aging in Place survey respondents who reported considering a reverse mortgages with the intent of paying off forward mortgage debt were asked about their motivations. The most commonly reported motivation was to eliminate the monthly mortgage payment. This reason was selected by 67% of non-borrowers, 69% of active borrowers, and 41% of terminated borrowers. Not being able to afford the monthly mortgage payment was the second-most common motivation among active reverse mortgage borrowers (40%), but was a less common motivation for terminated borrowers (28%) and those households who did not obtain a reverse mortgage (25%). Further, the desire to pay off a home equity loan or other loan on the home ranked as one of the top three motivations for all survey respondents, followed closely by the desire to get rid of a mortgage with a high interest rate. Of the survey respondents considering a reverse mortgage to payoff mortgage debt, those who obtained and subsequently terminated their reverse mortgage were more than twice as likely to

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report “being behind on their mortgage payments” (24%) or “facing foreclosure” (17%) as a motivation for a reverse mortgage, compared to active borrowers.

Table 1.6 Reasons for Paying off Mortgage Debt



Obtained then

terminated RM Total

Get rid of mortgage payments 67% 69% 41% 67% Unable to afford mortgage payments 25% 40% 28% 36% Payoff home equity loan 29% 20% 28% 22% High interest rate 27% 18% 24% 21% Behind on mortgage payments 19% 10% 24% 13% Facing foreclosure 13% 8% 17% 10% Adjustable Interest Rate 14% 6% 7% 8% Other 20% 12% 14% 14%



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2. Reverse Mortgage Counseling (All Survey Participants)

2.1 Remembering receiving reverse mortgage counseling

Over nine of ten Aging in Place survey participants remembered the reverse mortgage counseling session. These numbers were similar across non-borrowers, active borrowers, and those who had terminated their reverse mortgage.

Table 2.1 Remember Receiving Counseling

Did not


Obtained and terminated RM Total

Yes 94% 94% 93% 94% No 6% 6% 7% 6%


See p. 61 for survey question(s) 2.2 Knowledge of different decision items at counseling

Aging in Place survey participants were asked whether, knowing what they know today, they felt like they were informed about four key items at the time of reverse mortgage counseling: different ways to receive the proceeds from the reverse mortgage, their responsibility to pay property taxes and homeowner’s insurance, the fact that mortgage balances increase over time, and, if they were married, the implications of not having their spouse on the deed to the home. Respondents felt best informed about the responsibility to pay property taxes and homeowner’s insurance: 99% among active reverse mortgage borrowers and 90% of non-borrowers indicated this. Respondents also felt quite well-informed about the different ways to receive the reverse mortgage money, for example a credit line, a lump sum, or a monthly payment: about 92% of active borrowers and 86% of non-borrowers confirmed that they knew about it at counseling. In response to the other knowledge items:

• Implications of having a non-borrowing spouse—Knowledge levels differed for married counselees and their understanding of the implications of removing or not having the spouse on the deed. Only 42% of non-borrowers, 47% of active borrowers, and 59% of terminated borrowers felt they were informed about this item at the time of counseling.

• Growth of loan balance over time—Knowledge levels also differed about the fact that

reverse mortgage loan balances increase due to accumulating interest and mortgage insurance premiums. Only 54% of non-borrowers, 71% of active borrowers, and 66% of terminated borrowers felt they were informed about it at the time of counseling.

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Table 2.2 Well Informed About the Following at the time of Counseling

Did not



Different ways to receive money (e.g. credit line, lump sum, monthly payment, etc.) 86% 92% 91% 90%

Responsibility to pay property taxes and homeowner's insurance 90% 99% 100% 97%

Increasing loan balance due to accumulating interest and mortgage insurance premiums 54% 71% 66% 66%


(If married at time of counseling): Implications of removing or not having spouse on deed 42% 47% 59% 46%

N (Respondents) 199 567 39 805 See p. 65 for survey question(s)

2.3 Experience with counselor and loan officer

When asked about their experience with reverse mortgage counselor and loan officer, about nine in ten borrowers and non-borrowers confirmed that the reverse mortgage counselor provided enough information to inform their decision about a reverse mortgage. The approval rate was slightly lower for reverse mortgage loan officers: 76% of non-borrowers, 86% of terminated borrowers, and 90% of active borrowers confirmed that the reverse mortgage loan officer provided enough information to inform the decision. In addition, counselees were asked whether or not they felt pressured to take a reverse mortgage:

• Pressured by counselor—Fewer than 10% of Aging in Place survey participants felt pressured by the counselor to obtain a reverse mortgage. Pressure was more often reported by non-borrowers (9%) compared to borrowers (4% of active borrowers).

• Pressured by loan officer—About the same portion of non-borrowers and terminated borrowers, just over one in ten in each group, reported feeling pressured to obtain a reverse mortgage by their loan officer. In contrast, only 5% of active borrowers reporting feeling pressured by the loan officer.

A follow-up question inquired whether loan officers exerted pressure on consumers to take the reverse mortgage as a fixed rate, lump sum loan (all proceeds at closing). About 13% of terminated borrowers remembered this kind of pressure, compared with only 7% of non-borrowers and 7% of active borrowers.

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Table 2.3.1 Experience with Counselor and Loan Officer, by RM Status

Did not



RM counselor provided enough information to inform RM decision 84% 91% 94% 89%

Felt pressured by RM counselor to take out RM 9% 4% 6% 6%

RM loan officer provided enough information to inform RM decision 76% 90% 87% 86%

Felt pressured by RM loan officer to take out RM 11% 5% 12% 7%

Felt pressured by RM loan officer to take out RM as a fixed rate, lump sum loan (all proceeds at closing) 7% 7% 13% 7%


See p. 65 for survey question(s) In addition to considering experiences by status of the reverse mortgage, it is interesting to compare experiences of survey participants based on their overall satisfaction with the decision to obtain or not obtain a reverse mortgage. Aging in Place survey participants who were satisfied with their decision to obtain or not obtain a reverse mortgage felt particularly well informed by their counselor (94% confirmed) and loan officer (92% confirmed). They reported few instances of pressure from their counselor and loan officer (4% reported pressure). In contrast, a smaller number of dissatisfied survey respondents reported having received enough information from their counselor (74%) and loan officer (67%). A greater number of dissatisfied study respondents remembered feeling pressured by the counselor (11%) and loan officer (15%). Table 2.3.2 Experience with Counselor and Loan Officer, by Satisfaction w/RM Decision

Satisfied Not

Satisfied Total

RM counselor provided enough information to inform RM decision 94% 74% 89%

Felt pressured by RM counselor to take out RM 4% 11% 6%

RM loan officer provided enough information to inform RM decision 92% 67% 86%

Felt pressured by RM loan officer to take out RM 4% 15% 7%

Felt pressured by RM loan officer to take out RM as a fixed rate, lump sum loan (all proceeds at closing) 6% 12% 7%



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2.4 Influential individuals

A number of people may influence the decision to obtain or not obtain a reverse mortgage. Aging in Place survey respondents reported that the spouse or significant other provided the largest influence: 17% of non-borrowers, 25% of active borrowers, and 24% of terminated borrowers reported this influence. The reverse mortgage loan officer was another large source of influence: 24% of active borrowers, 26% of terminated borrowers, and 16% of non-borrowers noted this influence. Third in line was the reverse mortgage counselor: 22% of active borrowers, 21% of terminated borrowers, and 13% of non-borrowers mentioned this influence. Besides these top-three sources of influence, children were another frequent source of influence for the reverse mortgage decision: 12% of non-borrowers, 14% of active borrowers, and 21% of terminated borrowers mentioned this. Friends, financial advisors and attorneys played a smaller role when consumers made the decision whether or not to obtain a reverse mortgage.

Table 2.4 Individuals with Influence on the Reverse Mortgage Decision




Significant other or spouse 17% 25% 24% 23% RM loan officer 16% 24% 26% 22% RM counselor 13% 22% 21% 20% Children 12% 14% 21% 14% Financial advisor 6% 10% 12% 9% Friends 7% 9% 7% 8% Attorney 3% 5% 1% 4% Other people 12% 7% 13% 8%


See p. 66 for survey question(s) 2.5 Alternatives to reverse mortgage

Non-borrowers were asked about alternatives that they pursued to meet their financial needs. This group reported reducing non-essential and essential expenses (48% and 26%, respectively) and refinancing their first mortgage (20%) as the top-three actions taken to meet their financial needs. In fact, one in four respondents reported originating and/or refinancing a forward mortgage instead of taking out a reverse mortgage. Refinancing was preferred to taking out a home equity loan or a second mortgage on their home, two actions that were only reported by 12% of respondents. A small number indicated to have sold their home (6%), pointing to a preference for aging in place.

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Table 2.5 Actions Taken to Meet Financial Needs Instead of Reverse Mortgage

Did not Obtain

RM Cut back on non-essential expenses 48% Cut back on essential expenses 26% Refinance first mortgage 20% Receive help from a government program 15%

Take out a home equity loan or second mortgage 12% Return to work 10% Borrow money 9% Sell home and move 6% Take out payday loan or cash advance 6% Go through foreclosure 3% Move in with family or friends 1%

N (Respondents) 431 N (DK/Refuse/Missing) 17

See p. 66 for survey question(s) 3. Reverse Mortgage Loan (Borrowers Only)

3.1 Reverse mortgage and quality of life

Those who originated a reverse mortgage were asked to reflect on the extent to which they agreed with the statement, “Having a reverse mortgage improved the quality of my life.” The majority of respondents, 76% of active borrowers and 65% of terminated borrowers, agreed with the statement.

Table 3.1 Statement “Reverse Mortgage Improved Quality of Life”

Obtained and retained RM


Strongly agree 42% 27% 41% Agree somewhat 34% 38% 34% Neither agree nor disagree 13% 18% 14% Disagree somewhat 6% 9% 6% Strongly disagree 5% 7% 5%



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3.2 Amount owed on reverse mortgage

Aging in Place survey participants were asked, “If you were to sell your house today, about how much would you owe on your reverse mortgage?” Respondents reported an average outstanding loan balance of $156,500, with a standard deviation of $137,818. About half of respondents reported a remaining loan balance of $100,000 or more. By contrast, only 10% reported a remaining loan balance of less than $25,000.

Table 3.2 Amount Owed on RM


Less than $25,000 10% $25,000 to $ 49,999 9% $50,000 to $99,999 25% $100,000 or more 56%


See p. 67 for survey question(s) 3.3 How long reverse mortgage money lasted

A question at the core of reverse mortgage borrowing is whether the money from the reverse mortgage last longer, shorter or about the same amount of time that a consumer originally anticipated. Over half of Aging in Place survey participants, 59%, said that the money lasted about the same amount of time they anticipated, 27% said it lasted shorter, and 14% said it lasted longer than expected. About 19% did not know the answer to this question, refused it or left it blank. Those who terminated their reverse mortgage were slightly more likely to say the funds lasted shorter than they expected (34%). There are notable differences in the length of time reverse mortgage funds have lasted based on whether or not respondents agreed with the statement that the reverse mortgage improved the quality of their lives. Those agreeing that the reverse mortgage improved the quality of their lives were more likely to report that the reverse mortgage lasted about the same amount of time (64%) or longer than they anticipated (15%), compared to those who did not agree with the statement. Nearly half (47%) of those disagreeing with the statement that the reverse mortgage improved the quality of their lives reported that the funds lasted shorter than they had anticipated.

Table 3.3.1 How Long did RM Funds Last, by RM Loan Status



Longer 14% 9% 14% Shorter 26% 34% 27% About the same 59% 57% 59%



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Table 3.3.2 How Long did RM Funds Last, by RM Quality of Life RM money lasted longer, shorter or same as anticipated

RM improved quality of life Total

Agree Do not agree Longer 15% 10% 14% Shorter 21% 47% 27% About the same 64% 43% 59%


See p. 68 for survey question(s) 3.4 How much money extracted at closing

Oftentimes, reverse mortgage borrowers extract a large proportion of available funds at closing. Aging in Place survey participants were asked to estimate the amount of funds they extracted up front, including money used to pay off existing mortgages or other debt and excluding money used to pay up front closing costs or mortgage insurance premiums. The largest group of borrowers, 50%, recalled taking a lump sum of less than $25,000 up front. The next largest group of borrowers, 21%, recalled withdrawing $100,000 or more up front. Large up front draws would be expected given the loan level data reported in Table P.3, indicating that the average survey participant withdrew more than 77% of their available funds at closing.

Table 3.4 Initial Withdrawal, by RM Status



Less than $25,000 50% 44% 50% $25,000 to $50,000 11% 13% 12% $50,000 to $100,000 17% 18% 17% $100,000 or more 21% 25% 21%


See p.68 for survey question(s)

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4. Reverse Mortgage Termination (Borrowers Who Terminated Their Reverse Mortgages Only)

4.1 Ways reverse mortgage was terminated

A reverse mortgage can be terminated in different ways. As reported in Table 1.1 of this report and replicated in Table 4.1 below, 45% of the survey participants who had terminated their reverse mortgage at the time of the survey reported that they sold the home, 27% refinanced with another reverse mortgage, 19% refinanced with a forward mortgage, 7% lost their home to foreclosure, and 2% took other actions to terminate their reverse mortgage.

Table 4.1 Ways Terminated RM Sold home 45% Refinanced to another RM 27% Refinanced with non-RM loan 19% Foreclosed 7% Other 2%


See p.69 for survey question(s) If the home was sold to repay the reverse mortgage, 54% of Aging in Place survey participants had not purchased a new home at the time of the survey, whereas 46% had done so. 4.2 Reasons for selling home and terminating the reverse mortgage

There are different reasons reverse mortgage borrowers might sell their homes and terminate a reverse mortgage. About 32% of Aging in Place survey participants with terminated reverse mortgages had sold their homes because they desired to live in a smaller home. The desire to live closer to family or friends and to be released from maintenance duties associated with owning a home ranked second, each reason being reported by 27% of terminated borrowers who sold their homes. Death of a spouse or significant other and overly high property taxes ranked third, each being mentioned by 22%. The cost associated with home maintenance and the desire to live in a more accessible community was the fourth most prominent reason, each mentioned by 19%. High cost of homeowner’s insurance and the need for a more accessible home were ranked fifth, each mentioned by 16% of terminated borrowers, as reasons for selling the home.

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Table 4.2 Reasons for Selling Home, Among Terminated Borrowers Desire smaller home 32%

Closer to family/friends 27%

Avoid maintenance 27%

Property taxes too high 22%

Death of spouse/significant other 22%

Cost of maintenance 19%

Desire more accessible community 19%

Needed more accessible home 16%

HO Insurance too high 16%

Needed nursing care/assisted living 14%

Live in retirement community 11%

N (Respondents) 37

N (DK/Refuse/Missing) 0 See p. 69 for survey question(s)

4.3 Selling home earlier or later

A follow-up question inquired about the timing of the home sale for terminated reverse mortgage borrowers. About 22% of this group of survey participants stated that they sold their home at about the same time as they originally planned, 31% sold earlier than they originally planned, and 47% later than they initially thought they would when they took out the reverse mortgage.

Table 4.3 Selling home (and terminating RM) earlier or later than originally thought when took out RM

Earlier 31% Later 47% About the same 22%



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5. Reverse Mortgage Not Obtained (Non-Borrowers Only)

5.1 Reasons for deciding against obtaining a reverse mortgage

The Aging in Place survey provided a list of 13 reasons for the decision to not obtain a reverse mortgage. Survey participants who decided against a reverse mortgage after the mandatory counseling session indicated three top reasons for this decision: a desire to own their home completely, free of any mortgages; the understanding that the amount of money from a reverse mortgage was too small; and finding another way to meet financial needs. Each of these three items was selected by about a third of the study respondents (35%). Moreover, 30% of counseled seniors reported that they or their properties (or both) were ineligible for the reverse mortgage. About 28% of non-borrowers reported a desire to have the home remain in the family and/or leave the home as an inheritance to children. A similar number of respondents indicated the high cost of a reverse mortgage as a reason for deciding against it (28%). Table 5.1 Reason For Not Taking RM You liked knowing that you own your home completely free of any mortgages 35%

The process of taking out a reverse mortgage was too complicated 15%

The amount of money that you would have received was too small 35%

You did not trust the loan officer offering you the loan 11%

You found another way to meet your financial needs 35%

Your children or family members did not want you to take out a reverse mortgage 10%

The costs of the reverse mortgage were too high 31% You wanted to sell your home and move 6%

You wanted the home to remain in the family/leave to children 30%

Your spouse was under age 62 and you did not want to take him/her off the deed 3%

Your property was not eligible 24% A financial planner/financial professional advised against RM 2%

You were not eligible 19% Other 24% N (Respondents) 430 N (DK/Refuse/Missing) 37

See p. 72 for survey question(s) 5.2 Reasons for selling home

A small number of non-borrowers, about 6%, indicated that they sold their home instead of taking out a reverse mortgage. These respondents were asked to indicate reasons for selling their homes. The main reason for selling the home was to avoid the maintenance duties associated with homeownership (50%). Other reasons were the costs of property taxes and homeowner’s insurance (mentioned by 42% each). The desire to live in a smaller and more accessible home ranked next among non-borrowers (39% selected each category).

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Table 5.2 Reasons for Selling Home (If No Reverse Mortgage) Avoid maintenance 50%

Property taxes too high 42%

HO Insurance too high 42%

Needed more accessible home 39%

Desire smaller home 39%

Desire more accessible community 39%

Live in retirement community 35%

Cost of maintenance 31%

Closer to family/friends 19%

Needed nursing care/assisted living 15%

Death of spouse/significant other 15% N (Respondents) 26

N (DK/Refuse/Missing) 0 See p. 73 for survey question(s)

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6. Personal and Financial Well-Being (All Respondents)

6.1 Types of assets

To estimate Aging in Place survey participants’ net worth, survey respondents were asked about the assets they own besides their primary residence. A list of seven asset categories was offered and respondents were asked to provide an estimated dollar value for each item. For respondents who were uncertain about the value of their assets, four categories were also provided (less than $25,000; $25,000 to $49,999; $50,000 to $99,999; and $100,000 or more). Overall, more than 80% of survey respondents reported having positive value in some form of non-housing asset, with 88% of active reverse mortgage borrowers reporting such assets compared with 84% of terminated borrowers and 83% of non-borrowers. The sum of non-housing assets was highest among terminated borrowers: it averaged $135,549 with a median of $21,750, compared with $99,982 (median: $21,500) for active borrowers, and $98,237 (median: $12,500) for non-borrowers. The most common asset held by survey respondents is the value of their vehicle: with 76% of active borrowers reporting some positive value, compared to 69% of non-borrowers and 65% of terminated borrowers. The median auto value is modest, ranging from $4,000 (non-borrowers) to $7,000 (active borrowers). Approximately one-third of survey respondents reported no value in checking or savings accounts. Active borrowers were more likely to report value in these accounts (69%) compared to 60% of non-borrowers and 66% of terminated borrowers reporting a positive value. The median amount is quite low: $2,000 for active borrowers, $1,750 for terminated borrowers and $376 for non-borrowers. One in four survey respondents reported having some value in a retirement account, with a smaller share reporting positive value in a non-retirement investment account or annuity. Terminated borrowers reported relatively higher values in their retirement accounts, with a mean of $39,805 compared to $26,262 for active borrowers and $28,453 for non-borrowers. About one in five survey respondents reported having positive value invested in real estate other than their primary residence. Active borrowers reported the highest average value in other real estate relative to terminated borrowers or non-borrowers. A small proportion of survey respondents reported holding value in a business or farm, or reported some other type of asset not included in the survey list.

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Table 6.1 Self-Reported Assets


Obtained and terminated RM

%>0 Mean Median %>0 Mean Median %>0 Mean Median Real estate property other than primary residence 18% 37,944 0 17% 53,679 0 19% 40,948 0 Checking and savings accounts 60% 15,937 376 69% 13,376 2,000 66% 18,947 1,750 Retirement accounts 19% 28,453 0 25% 26,262 0 25% 39,805 0

Annuities 10% 9,583 0 13% 12,762 0 8% 17,020 0 Other non-retirement investments 14% 20,642 0 20% 20,341 0 16% 17,343 0 Cars, boats, or other transportation 69% 10,625 4,000 76% 12,797 7,000 65% 10,423 5,000 Businesses or farms 6% 8,783 0 5% 8,513 0 2% 12,093 0 Other 7% 4,214 0 10% 5,930 0 13% 19,919 0 All Non-Housing 83% 98,237 12,500 88% 99,982 21,500 84% 135,549 21,750

N (Respondents) 414

1049

86

N (DK/Refuse/Missing) 53 143 16

See p. 74 for survey question(s) 6.2 Estimated monthly income

In a typical month, the estimated gross household income from all sources, such as wages, Social Security, retirement pensions, annuities, and any other retirement income averages about $2,700 among survey respondents, for an annual income of about $32,000. Monthly income amounts by borrower status are qualitatively similar, within a few hundred dollars.

Table 6.2 Estimated Monthly Income

Did not


Obtained and terminated

RM Total Mean 2,652 2,748 2,512 2,710 Median 2,000 2,146 2,300 2,100

N (Respondents) 343 932 78 1,353 N (DK/Refuse/Missing) 124 260 24 408

See p. 76 for survey question(s) 6.3 Estimated monthly income change since counseling

The Aging in Place Survey asked respondents whether their household income has been about the same, increased by more than 10 percent, or decreased by more than 10 percent since reverse mortgage counseling. The majority of survey respondents indicated that it had stayed about the same. About 70% of active borrowers, 65% of non-borrowers, and 68% of terminated borrowers provided this answer. Distributions are roughly similar by borrower status.

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Table 6.3 Self-Reported Change to Income Since Counseling

Did not obtain

RM Obtained and retained RM


About the same 65% 70% 68% 68%

Increased at least 10% 19% 16% 15% 17%

Decreased at least 10% 16% 14% 17% 15%

N (Respondents) 399 1048 84 1534

N (DK/Refuse/Missing) 68 144 18 227 See p. 76 for survey question(s)

6.4 Social Security benefits

The majority of survey participants reported receiving Social Security benefits for retirement or disability at the time of the survey. Only 2% of respondents with a reverse mortgage reported not receiving Social Security benefits, compared with 4% of respondents who did not obtain a reverse mortgage and 9% of respondents who had terminated their reverse mortgage.

Table 6.4 Social Security

Did not



Received social security benefits

Yes 96% 98% 91% 97% No 4% 2% 9% 3%

N (Respondents) 430 1122 91 1643 N (Missing) 37 70 11 118

For married respondents: Spouse received social security benefits

Yes 88% 93% 86% 92% No 12% 7% 14% 8%

N (Respondents) 155 477 28 660 N (Missing) 13 29 2 44

See p. 75 for survey question(s) 6.5 Monthly expenses relative to income

In a typical month, most survey participants found that their expenses were about the same as their income. This was reported by 50% of active borrowers, 45% of non-borrowers and 41% of terminated borrowers. The remainder of respondents reported expenses that were not equal to income:

• Expenses greater than income—A little over a quarter of survey participants reported a monthly deficit, with a slightly higher proportion of non-borrowers (32%) and terminated borrowers (31%) reporting deficits, compared to active borrowers (26%). The average monthly deficit was quite high: $575 for non-borrowers, $905 for active and $1,080 for terminated borrowers. The median deficit is comparable to the mean, at $400 for non-borrowers, and $500 for both active and terminated borrowers.

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• Expenses less than income—Another quarter of survey participants reported a monthly

surplus, or the ability to save some money after paying for expenses. About 25% of active borrowers reported a surplus, compared to 24% of non-borrowers and 28% of terminated borrowers. The average surplus is fairly high, at $1,162 for non-borrowers, $908 for active and $756 for terminated borrowers. The median is lower, at $500 for non-borrowers, $600 for active and $750 for terminated borrowers.

Table 6.5 Monthly Expenses Relative to Income

Did not obtain RM Obtained and

retained RM Obtained then terminated RM

% Amount Deficit/ Surplus % Amount

Deficit/ Surplus % Amount Deficit/ Surplus

Expenses greater than Income (Monthly Deficit)

Mean 32% ($575) 26% ($905) 31% ($1,080)

Median ($400) ($500) ($500)

Expenses less than Income (Monthly Surplus)

Mean 24% $1,162 25% $908 28% $756

Median $500 $600 $750

Expenses equal to Income 45% 50% 41%


See p. 77 for survey question(s) 6.6 Satisfaction with different aspects of life

The Aging in Place survey asked respondents about their satisfaction with different areas of their lives as of today, on a scale from 1=very dissatisfied to 5=very satisfied. On average, reverse mortgage borrowers are about as satisfied as non-borrowers with “life as a whole”, where the average borrower rating is 3.7 compared to a rating of 3.6 for non-borrowers. Non-borrowers reported significantly lower levels of satisfaction with regard to four aspects of life: financial situation, condition of residence, family life, and daily life and leisure activity. While the average ratings are statistically lower, the magnitude of the difference is small.

34

Table 6.6 Satisfaction with Different Aspects of Life, Average Ratings*

(1: Not at all satisfied- 5: Completely satisfied)

Did not obtain RM



RM

Anova test of different mean satisfaction by

status: Prob > F Life as a whole 3.61 3.71 3.73 0.22 [435 / 32] [1124 / 68] [102 / 4] Condition of residence 3.87 4.14 4.01 0.00 [435 / 32] [1136 / 56] [102 / 3] City or town of residence 4.00 4.10 4.09 0.17 [433 / 34] [1137 / 55] [102 / 2] Daily life and leisure activity 3.65 3.77 3.88 0.05 [436 / 31] [1129 / 63] [102 / 2] Family life 3.83 3.98 3.92 0.03 [426 / 41] [1112 / 80] [102 / 6] Present financial situation 2.97 3.19 3.31 0.00 [435 / 32] [1127 / 65] [102 / 8] Health 3.39 3.42 3.30 0.59 [433 / 34] [1130 / 62] [102 / 14] * N (Respondents) / N (DK/Refuse/Missing) in brackets See p. 73 for survey question(s)

6.7 Debt stress, food insecurity and money to cover required prescriptions

A follow-up question inquired about how much stress Aging in Place survey participants felt from their total debt load, on a scale ranging from 1=no stress at all to 5=a great deal of stress. On average, stress levels were low, ranging between “not very much stress” and “some stress.” Debt stress differed significantly among the three groups. It was highest among non-borrowers, reaching a stress score of 2.6 on a scale ranging from. Active borrowers followed with average stress scores of 2.4 and terminated borrowers reported a debt-stress score of 2.3. While these differences are statistically significant, the magnitude of the differences is small.

Table 6.7.1 Amount of Stress Caused by Financial Debt, Average Ratings

(1: Not stress at all- 5: Great deal of stress)

Did not obtain RM



Anova test of different mean debt

stress by status: Prob > F

Mean stress 2.63 2.40 2.29 0.00 N (Respondents) 420 1118 87

N (Not Applicable) 47 74 15 See p. 73 for survey question(s)

Respondents were asked if they ever suffered from food insecurity or had difficulty affording their medication due to lack of money. Non-borrowers were twice as likely as active borrowers (16% versus 8%), and somewhat more likely than terminated borrowers (11%) to report that they did not always have enough money for food. Non-borrowers were also slightly more likely than

35

active borrowers or terminated borrowers to report that they sometimes took less medication than what was prescribed to them because of costs (20% versus 14% and 18%, respectively).

Table 6.7.2 Always had enough money to buy food

Did not obtain



No 16% 8% 11% 10% Yes 84% 92% 89% 90%



Table 6.7.3 Sometimes delayed taking medications or filling prescriptions because of cost

Did not obtain



No 80% 86% 82% 85% Yes 20% 14% 18% 15%

N (Respondents) 433 1096 85 1614


6.8 Significant events following counseling

The Aging in Place Survey asked respondents to identify life events that may have occurred since receiving counseling for a reverse mortgage. Among a list of eight life events, it was serious illness, injury or disability that was reported most often: 34% of terminated borrowers, 31% of active borrowers, and 25% of non-borrowers had experienced it themselves or for their significant other since the time of counseling. Increases in living costs were reported by 18% of active and terminated borrowers and 19% of non-borrowers. Loss of job or wages was ranked third and reported by 15% of active and 12% of terminated borrowers. Among non-borrowers, loss of job or wages was the second-most often cited life event (20%) and increases in cost of living ranked third (19%). On average, events were reported to have occurred an average of 1.78 years after the time of counseling across all groups, with a shorter duration until the event for terminated borrowers (1.32 years post counseling), and the longest duration until the event for active borrowers (1.87 years post counseling).

36

Table 6.8 Significant Events: Incidence and Average Number of Years After Counseling that Event Occurred

Did not obtain

RM



Total

% Years

% Years

% Years

% Years Serious illness/injury/ disability of self or spouse

25% 1.60

31% 1.87

34% 1.32

30% 1.78

Increase in living costs 19% 1.81

18% 1.69

18% 1.25

18% 1.70

Loss of job or wages 20% 1.64

15% 1.36

12% 1.50

16% 1.46

Loss of spouse or other household member

16% 1.68

12% 2.08

11% 1.33

13% 1.90

Retired from job 14% 1.63

13% 1.31

5% 2.00

13% 1.42

Added new household member

15% 2.16

11% 2.38

12% 1.80

12% 2.28

Stopped working (self or spouse) for health reasons

10% 1.62

11% 1.42

9% 0.33

11% 1.43

Received inheritance or large financial gift

4% 1.88

5% 2.46

5% 2.60

5% 2.32

Any other events that affected financial situation

52% 1.17

55% 1.22

40% 1.11

54% 1.21

N (Respondents) 429 N/A

1096 N/A

91 N/A

1616 N/A

N (DK/Refuse/Missing) 38

96

11

145 See p. 77 for survey question(s)

6.9 Probability of leaving relatives an inheritance

Survey participants were asked about the chances, from zero to 100, of leaving an inheritance to relatives other than their spouse or partner. The largest group of survey participants was 100% certain that they would make a bequest: 39% of non-borrowers, 40% of terminated borrowers, and 33% of active borrowers responded in this way. On the other hand, almost one-third of survey participants, only slightly fewer than the 100% group—reported a zero percent change of leaving an inheritance to kin: 32% of active borrowers, 30% of non-borrowers, and 26% of terminated borrowers indicated no chances of leaving an inheritance.

37

Table 6.9 Probability of Leaving Relatives an Inheritance

Did not



0% 30% 32% 26% 31% 1-25% 8% 9% 7% 8% 26-50% 12% 15% 16% 14% 51-75% 5% 5% 4% 5% 76-99% 6% 6% 7% 6% 100% 39% 33% 40% 35%

N (Respondents) 378 985 81 1444 N (DK/Refuse/Missing) 89 207 21 317 See p. 78 for survey question(s)

38

7. Housing Situation (All Respondents)

7.1 Living Arrangements

Survey participants were asked about their current living situation. Whether a survey participant owned a home, rented, or had other living arrangement was related to their borrowing status. By definition, all active borrowers owned their homes. The majority of active borrowers owned a single family home (90%), while a few had a condo or apartment (10%). Among terminated borrowers, 78% owned a home, 8% were renting, 7% were living in an assisted living facility or nursing home, and 7% had other living arrangements (predominately, living with family). Non-borrowers were most often homeowners (93%). About 5% were renting, 1% were living in an assisted living facility or nursing home, and 1% had other living arrangements.

Table 7.1 Living Arrangements

Did not obtain



Rent 5% 0% 8% 2% Condo/apartment 3% 0% 8% 1% Single family home 2% 0% 0% 1%

Own 93% 100% 78% 97% Condo/apartment 12% 10% 9% 11% Single family home 80% 90% 69% 86%

Assisted living/nursing home 1% 0% 7% 1% Other 1% 0% 7% 1%



7.2 Value of home

Aging in Place survey participants who owned a home were asked to estimate (1) how much their home would be worth if it was sold today and (2) how much they owe on their home today, including all mortgages or liens. Reverse mortgage borrowers were separately asked to estimate the amount owed on their reverse mortgage if they sold their home today, and this estimate was used to calculate total mortgage debt for this group. Active borrowers provided the highest average estimate of their current home value as of the time of the survey: $275,303 and a median value of $200,000. Active borrowers also reported the highest amount of mortgage debt: survey participants reported an average of $136,077 owed on the reverse mortgage. Those not obtaining a reverse mortgage reported lower average housing values ($203,577), and reported lower average mortgage debt ($65,041). The average loan to

39

value (LTV) for non-borrowers and terminated borrowers is around 40 percent, compared to an average LTV of 61 percent for active reverse mortgage borrowers.

Table 7.2 Estimated Home Value and Debt

Status of Respondents Statistics Estimated home

value Estimated debt value

Estimated LTV

Did not obtain RM Mean $203,577 $65,041 0.40 Median $150,000 $40,000 0.33 SD $268,521 $87,187 0.46 Min $12,500 $0 0.00 Max $3,500,000 $580,000 4.00 Sample Size 345 352 334

Obtained and retained RM Mean $275,303 $136,077 0.61 Median $200,000 $100,000 0.61 SD $273,131 $132,002 0.47 Min $10,000 $0 0.00 Max $4,000,000 $1,300,000 5.94 Sample Size 988 1072 980


Mean $349,167 $118,802 0.42 Median $227,500 $74,000 0.29 SD $290,263 $141,208 0.66 Min $18,000 $0 0.00 Max $1,400,000 $483,000 4.50 Sample Size 60 63 60

Total Mean $260,720 $118,530 0.55 Median $185,000 $85,000 0.55 SD $274,923 $126,829 0.49 Min $10,000 $0 0.00 Max $4,000,000 $1,300,000 5.94 Sample Size 1393 1487 1374

See p. 79 for survey question(s) 7.3 Monthly housing costs, mortgage and rent payments

Survey participants were asked a variety of questions related to monthly housing costs, including monthly mortgage payment (without property taxes and insurance) or monthly rent amount. Below, we provide information on monthly housing costs for households without reverse mortgages at the time of the survey. Reverse mortgage borrowers have no monthly mortgage payment. Comparisons of property tax and homeowner’s insurance payments for all survey respondents are provided in the subsequent section. About 71% of non-borrowers had a mortgage at the time of the survey, compared with just under 50% of households who had terminated their reverse mortgages. The average mortgage payment, excluding property taxes and homeowners insurance was $389 for non-borrowers and $143 for

40

terminated borrowers. For those not owning a home, rent payments ranged from an average of $880 for non-borrowers to an average of $1,472 for terminated borrowers.

Table 7.3 Monthly Housing Costs: Non-Borrowers and Terminated Borrowers

Proportion with

Mortgage Mortgage Payment Monthly Rent

Did not obtain RM Mean 71% $389 $880 Median 100% $291 $748 SD 45% $491 $740 Min 0% $0 $136 Max 100% $2,950 $3,500 Sample Size 467 339 19


Mean 49% $143 $1,472 Median 0% $0 $1,100 SD 50% $422 $1,092 Min 0% $0 $515 Max 100% $2,374 $3,400 Sample Size 102 62 9

Total Mean 67% $351 $1,070 Median 100% $175 $796 SD 47% $489 $893 Min 0% $0 $136 Max 100% $2,950 $3,500 Sample Size 569 401 28

See p. 79 for survey question(s) 7.4 Other housing costs- utilities, property taxes & homeowner’s insurance

All survey participants were asked about other housing costs, including amounts paid for monthly utilities, as well as annual amounts for property tax and homeowner’s insurance (when applicable).

• Monthly utility costs—Average monthly expenses for water, gas, and electric etc. ranged from $270 for non-borrowers to $303 for active borrowers. Median values ranged from $190 (terminated borrowers) to $250 (active borrowers).

• Annual property tax—In a typical year, tax payments ranged from an average of $1,619 among non-borrowers to an average of $2,330 among terminated borrowers. Median values ranged from $1,000 (non-borrowers) to $1,500 (active borrowers).

• Annual homeowners insurance—Insurance premiums ranged from an average of

$1,049 among non-borrowers to an average of $1,314 among active borrowers. Median values ranged from $800 (non-borrowers) to $1,000 (active borrowers).

41

Table 7.4.1 Other Housing Costs

Status of Respondents Statistics Monthly

Utility Cost Annual

Property tax Annual Homeowners'

Insurance Did not obtain RM Mean $270 $1,619 $1,049

Median $240 $1,000 $800 SD $202 $2,030 $1,120 Min $0 $0 $0 Max $2,000 $20,000 $16,050 Sample Size 320 338 329

Obtained and retained RM Mean $303 $2,268 $1,314

Median $250 $1,500 $1,000

SD $262 $2,710 $1,492

Min $0 $0 $0

Max $4,000 $32,699 $19,000

Sample Size 591 1027 1002 Obtained then terminated RM Mean $276 $2,330 $1,235

Median $190 $1,400 $850

SD $198 $2,544 $1,602

Min $0 $0 $0

Max $800 $14,000 $12,000

Sample Size 51 62 60 Total Mean $291 $2,117 $1,248

Median $250 $1,400 $975

SD $241 $2,572 $1,422

Min $0 $0 $0

Max $4,000 $32,699 $19,000

Sample Size 962 1427 1391 See p. 80 for survey question(s)

Survey respondents were also asked about changes in property taxes since the time of counseling. Among borrowers, the majority reported increases in annual property taxes since the time of counseling for a reverse mortgage: 53% of active borrowers and 50% of terminated borrowers estimated tax increases. Of those reporting tax increases, the average amount in the sample was about $400 per year. About one-third of reverse mortgage borrowers said that property taxes stayed the same since the time of reverse mortgage counseling. Fewer experienced a decline in property taxes. This was reported by 11% of active borrowers (an estimated $681) and 14% of terminated borrowers (an estimated $2,817). Non-borrowers reported in about equal numbers that property taxes stayed the same or that they increased (43% and 44%, respectively). About 13% of non-borrowers experienced a decrease in property taxes, on average $702.

42

Table 7.4.2 Change in Annual Property Taxes

Did not obtain RM



Total

% Average

% Average

% Average

% Average Increased 44% $393

53% $394

50% Sample size

too small

51% $397 Decreased 13% ($703)

11% ($681)

14%

12% ($770) Stayed the same 43% N/A

36% N/A

36% N/A

37% N/A

N (Respondents) 356 N/A

1058 N/A

64 N/A

1478 N/A N (DK/Refuse/Missing) 40

54

6

100

See p. 82 for survey question(s) Survey respondents were also asked if they were current on their property tax payments. Recall that this is self-reported as of the time of the survey, which may differ from the administrative data on missed property tax payments provided by HUD as of July, 2014 and reported in the Preface of this report. Most survey participants reported being current on their property taxes. Respondents not obtaining a reverse mortgage were more than twice as likely to report being past due on property taxes- 5% compared to 2% of active reverse mortgage borrowers. The average amount overdue ranged from $1,449 (active borrowers) to $4,221 (non-borrowers).

Table 7.4.3 Current on Property Taxes

Did not obtain RM



Total

% Mean Amt.

Overdue

% Mean Amt.

Overdue

% Mean Amt.

Overdue

% Mean Amt.

Overdue Current 95% N/A

98% N/A

99% N/A

97% N/A

Not Current 5% $4,221

2% $1,449

1% Sample size

too small

3% $2,751 N (Respondents) 369

1073

67

1509

N (DK/Refuse/Missing) 27

39

3

69 See p. 82 for survey question(s)

7.5 Age of home and expected tenure

On average, the homes of survey participants were built between 1970 and 1975. Survey respondents moved into these homes in the late 1980s or early 1990s, having lived in their homes between an average of 20 and 25 years at the time of the survey.

43

Table 7.5.1 Age of Residence: Year Home Built, Year Moved In

Did not



Year home built 1970 1972 1975 1971 N(Respondents) 413 1085 85 1583

N(DK/Refuse/Missing) 54 107 17 178 Year moved in 1991 1989 1995 1990

N(Respondents) 424 1101 86 1611 N(DK/Refuse/Missing) 43 91 16 150

See p. 80 for survey question(s) For Aging in Place evaluation, it is useful to also consider the distribution of planned tenure in their homes. Most survey respondents planned to stay in their homes for more than seven years. The desire to remain in their homes for a longer period of time was stronger among active borrowers: 14% planned to move in less than seven years, compared to 24% of terminated borrowers and 19% of non-borrowers.

Table 7.5.2 Years Plan to Stay in Current Home, Distribution

Did not obtain



Less than 3 years 8% 5% 10% 6% 3 to 7 years 11% 9% 14% 10% More than 7 years 81% 86% 76% 84%



7.6 Condition of home

Survey participants were also asked about attributes of their current homes, where they reside the majority of the time.

• Number of bedrooms—The average home had three bedrooms, ranging from 2.9 (terminated borrowers) to 3.1 bedrooms (active borrowers). To the extent that number of bedrooms proxies for the size of the home, the average size of homes is similar between active borrowers and non-borrowers.

• Barriers in homes—Between 24% (terminated borrowers) and 26% of homes (active and non-borrowers) had stairs, a steep pathway, or other barriers that could make it hard to stay in the current home over time.

• Social network nearby—Active borrowers reported most often, 88% of the time, that

they have family, friends, or other people nearby that can be relied on for help with a problem or emergency. Eighty-four percent of terminated borrowers and 81% of non-borrowers reported this kind of close-by social network.

44

• Second homes—Only a small number of survey participants owned or rented another

home, such as a vacation home, to live in part of the year. About 6% of non-borrowers and active borrowers reported owning or renting a second home.

Table 7.6.1 Housing Attributes

Did not obtain



Avg. # bedrooms 3.08 3.10 2.91 3.09

% with stairs 26% 26% 24% 26%

% with family or friends nearby 81% 88% 84% 86%

% who rent another home 6% 5% 3% 5%

% who own another home 0% 1% 2% 1%

N (Respondents) 428 1117 88 1633


Survey participants were also asked about the condition of their homes. Active borrowers rated the condition of their home highest: 86% reported it to be “good” or “very good.” Eighty percent of terminated and 76% of non-borrowers rated the condition of their homes equally high. In contrast, 1% of active borrowers, 3% of terminated borrowers, and 5% of non-borrowers rated the condition of their home as “poor” or “very poor.”

Table 7.6.2 Condition of Primary Residence

Did not obtain



RM Total Very good 48% 58% 59% 56% Good 28% 27% 22% 27% Average 19% 13% 16% 15% Poor 4% 1% 3% 2% Very poor 1% 0% 0% 0%



45

8. Health Status (All Respondents)

8.1 Current health self-rating

Survey participants were asked to rate their current health status. The average respondent rated their health as “good,” representing a score of 2.9 which is at the midpoint of a scale ranging from “excellent”=1 and “poor”=5. There are no statistically significant differences in overall health ratings between borrowers and non-borrowers.

Table 8.1 Current Health Self-rating

Did not



Excellent 12% 12% 19% 13% Very good 27% 28% 26% 28% Good 29% 30% 28% 29% Fair 21% 19% 15% 19% Poor 11% 11% 13% 11% Average Rating* 2.92 2.88 2.78 2.89


* 1(Excellent) - 5(Poor); Anova test of different mean satisfaction by status: Prob > F = 0.5694 See p. 83 for survey question(s)

8.2 Change in health since reverse mortgage counseling

When asked about changes in health since reverse mortgage counseling, the responses were similar across groups of borrowers. The largest group of survey participants reported that their health stayed about the same: 55% of non-borrowers, 52% of active borrowers and 52% of terminated borrowers provided this response. About one in three respondents reported that their health has worsened over time: 37% of active borrowers, 35% of non-borrowers, and 33% of terminated borrowers were in worse condition. In contrast, only one in ten respondents reported improved health. Similar responses were provided for the health of spouse or partner.

46

Table 8.2.1 Change in Health, Self

Did not



Significantly improved 4% 3% 3% 3% Somewhat improved 7% 8% 12% 8% Stayed the same 55% 52% 52% 53% Somewhat worsened 27% 29% 19% 28% Significantly worsened 7% 8% 14% 8% Average change in health* 3.28 3.32 3.28 3.31


* 1(Significantly Improved) - 5(Significantly Worsened); Anova test of different mean change by status: Prob > F = 0.5846 See p. 83 for survey question(s)

Table 8.2.2 Change in Health, Spouse

Did not



Significantly improved 3% 2% 0% 2% Somewhat improved 5% 7% 7% 6% Stayed the same 55% 50% 57% 52% Somewhat worsened 28% 28% 30% 28% Significantly worsened 9% 13% 7% 12% Average change in health* 3.35 3.41 3.37 3.4


* 1(Significantly Improved) - 5(Significantly Worsened); Anova test of different mean change by status: Prob > F = 0.7074 See p. 84 for survey question(s)

8.3 Number of hospital or nursing home overnight visits in past two years

Survey participants were also asked about the number of times they stayed overnight in a health care facility in the last two years, as this can be an indicator of health status. About one-third of survey participants reported staying in a hospital or nursing home at least one time in the past two years. Terminated borrowers reported by far the highest number of overnight visits to hospitals or nursing homes: an average of 4.5 nights for the respondent and 2.8 nights for their spouse or partner. In contrast, non-borrowers reported less than one night (0.8 night for self, 0.9 nights for spouse) and active borrowers about one night (1.0 nights for self, 1.1 nights for spouse).

47

Table 8.3 Number of Hospital or Nursing Home Overnight Visits in Past 2 Years

Did not



Any visit, self 33% 39% 38% 37% # of visits, self 0.80 1.05 4.47 1.17


Any visit, spouse 30% 35% 34% 34% # of visits, spouse 0.94 1.14 2.78 1.17


See p. 84 for survey question(s) 8.4 Difficulty with everyday tasks

Older adults may have difficulty with everyday tasks because of health or memory problems. Survey participants indicated greatest difficulties with household chores, yard work, or simple home repairs: 42% of active borrowers, 41% of non-borrowers, and 35% of terminated borrowers reported these difficulties. Climbing one flight of stairs without resting was ranked second among Aging in Place survey participants: 31% of non-borrowers, 30% of active borrowers, and 30% of terminated borrowers indicated this difficulty. Shopping for groceries ranked third in this list of difficult everyday tasks. It was checked by 20% of active and non-borrowers and 19% of terminated borrowers. Less taxing were bathing or showering and money management tasks, which were selected as difficult by about 11-12% of respondents.

48

Table 8.4 Percent Reporting Difficulty with Everyday Tasks

Did not obtain



Household chores, yard work, or simple home repairs 41% 42% 35% 42%

Climbing one flight of stairs without resting 31% 30% 30% 30%

Shopping for groceries 20% 20% 19% 19%

Bathing or showering 13% 12% 15% 12%

Managing own money (paying bills, keeping track of expenses) 11% 10% 16% 11%

N (Respondents) 407 1056 81 1544


8.5 Memory and ability to think quickly

Survey participants were also asked about their memory: “how would you rate your memory at the present time.” About half of respondents rated their memory at the present time as “very good” or “excellent.” About 59% of active borrowers, 59% of non-borrowers, and 53% of terminated borrowers provided this positive response. Fair and poor rating of one’s memory was highest among terminated borrowers: 20% provided this response, compared to 12% of active borrowers and 14% of non-borrowers.

Table 8.5.1 Memory Self-Rating

Did not



Excellent 25% 20% 21% 22% Very good 33% 39% 32% 37% Good 27% 29% 28% 28% Fair 11% 10% 10% 10% Poor 3% 3% 9% 3%


The ability to think quickly received similar responses. About 61% of non-borrowers and 59% of active borrowers rated their ability to think quickly as “very good” or “excellent.” Only 52% of terminated borrowers provided the same rating. This group indicated more often than the two other groups that their ability to think quickly was “fair” or “poor.”

49

Table 8.5.2 Ability to Think Quickly

Did not obtain



Excellent 26% 22% 20% 23% Very good 35% 37% 32% 37% Good 24% 30% 26% 28% Fair 10% 8% 11% 9% Poor 4% 3% 9% 3%



8.6 Life expectancy

Survey participants were asked questions about their life expectancy. When asked to estimate the life expectancy of someone with their health status and gender, terminated borrowers estimated an average age of 90.2 years, non-borrowers of 88.5 years, and active borrowers of 88.1 years.

Table 8.6 Self-Reported Life Expectancy

Did not obtain



Average life expectancy 88.43 88.00 89.13 88.34

N (Respondents) 357 904 70 1331

N (DK/Refuse/Missing) 110 288 32 430

See p. 85 for survey question(s) 8.7 Health insurance

The majority of survey participants (92%) were covered by Medicare Part A (Hospitalization) and 89% were covered by Medicare Part B (Routine health expenses like doctor visits). Almost two-thirds of respondents, ranging from 60% to 67%, were also covered by Medicare Part D (Prescription drug benefit). There are some differences based on borrowing status:

• Medicaid—Active reverse mortgage borrowers were less likely to report receiving Medicaid. About 17% of terminated and non-borrowers and 10% of active borrowers reported receiving Medicaid.

• Employer health care plans—Active borrowers and non-borrowers were more likely to be enrolled in a private plan from an employer (including state retirement pension systems), relative to terminated borrowers.

50

• Private health care plans—Between 27% and 35% of survey respondents were covered through a private plan purchased directly. Reverse mortgage borrowers were more likely to report purchasing private plans than the non-borrowers or terminated borrowers.

Table 8.7 Health Insurance

Did not



Medicare Part A 90% 93% 95% 92%

Medicare Part B 89% 89% 84% 89%

Medicare Part D 60% 63% 67% 62%

Medicaid 17% 10% 17% 12%

Veterans Affairs CHAMPVA or TRICARE (formerly CHAMPUS) 14% 11% 8% 12%

Private plan from an employer (includes state retirement pension systems) 18% 17% 14% 17%

Private plan purchased directly 27% 35% 30% 33%

Other 8% 13% 13% 11%

N (Respondents) 414 1093 86 1593


See p. 85 for survey question(s) 8.8 Monthly health care expenses

Survey participants were asked to provide an estimate of how much they spend in a typical month on health care expenses. Median reported regular health and medical expenses (such as doctor visits, prescriptions, or co-pays) are relatively similar between survey respondents. Non-borrowers have higher reported average monthly expenses of $380. Active and terminated borrowers reported average monthly health and medical expenses of $169 and $195, respectively. The median values are $55 and $60, respectively, for these two groups of borrowers. Health and life insurance premiums were higher among active borrowers, at $189 per month, compared to terminated and non-borrowers, who reported average monthly premiums of $134 and $139, respectively. Median values ranged between $75 and $100.

51

Table 8.8.1 Health Care Expenses

Status of Respondents Statistics Monthly regular health expenses

Monthly health and life insurance premiums

Did not obtain RM Mean $380 $139

Median $50 $75

Sample size 344 357 Obtained and retained RM Mean $169 $189

Median $55 $100

Sample size 905 892 Obtained then terminated RM

Mean $195 $134

Median $60 $100

Sample size 70 63 Total Mean $256 $173

Median $50 $95

Sample size 1319 1312

See p. 86 for survey question(s) Survey participants were also asked if they were receiving home health care. Only 5% of survey participants reported receiving home health care. It was highest among terminated borrowers: 8% reported receiving these services. Among all households in the survey, average expenses for home health care services were particularly high for terminated borrowers, at $230 per month. Active and non-borrowers reported average costs of $47 and $27 for these expense items. Average monthly home health care expenses among those receiving such services ranged from $800 for non-borrowers to $2,946 among terminated borrowers. Median values ranged from $225 to $486 for these groups.

52

Table 8.8.2 Home Health Care

Status of Respondents Statistics

Monthly home health care

services expense

Average monthly home health care

expenses among those receiving it

Receiving home health care

Did not obtain RM Mean $27 $800 3%

Median $0 $225 0%

Sample size 384 13 384 Obtained and retained RM

Mean $47 $994 5%

Median $0 $333 0%

Sample size 1016 48 1016 Obtained then terminated RM

Mean $230 Small sample size 8%

Median $0 $486 0%

Sample size 77 6 77 Total Mean $51 $1,131 5%

Median $0 $326 0%

Sample size 1477 67 1477

See p. 86 for survey question(s) 8.9 Long-term care insurance

Survey respondents were asked if they had any long-term care insurance other than government programs like Medicare or Medicaid. A slightly higher percentage of active borrowers responded “yes” to this question than those who had terminated or had never taken a reverse mortgage (18% versus 13%).

Table 8.9 Long-term care insurance other than Medicare or Medicaid

Did not obtain RM



Percent with insurance 13% 18% 13% 16% N (Respondents) 412 1,076 84 1,572 N (DK/Refuse/Missing) 55 116 18 189 See p. 86 for survey question(s)

53

9. Financial Capability (All Respondents)

9.1 Financial risk tolerance

Survey participants reported very low risk tolerance overall, with regard to their financial investments. They scored an average of 2.6 on a risk-tolerance scale ranging from 1=”not at all willing to take financial risks” to 10=”very willing to take financial risks.” Active borrowers reported an average risk-tolerance score of 2.5, terminated borrowers of 2.6, and non-borrowers of 2.7. In terms of the distribution, about 58% of active borrowers selected “not at all willing to take risks,” compared with 55% of non-borrowers and 51% of terminated borrowers.

Table 9.1 Average Willingness to Take Financial Risk



2.7 2.5 2.6 2.6 * (1: Not at all willing - 10: Very willing) See p. 87 for survey question(s)

9.2 Financial planning horizon

In deciding how much of their income to spend or save, people are likely to think about different time periods. In planning their and their family’s saving and spending, the largest group of survey participants focused on the next few months: about 35% of active borrowers and non-borrowers, and 30% of terminated borrowers indicated this present-oriented planning horizon. About one-third of survey participants planned their finances for one to less than five years. About one-quarter of survey participants reported at least five-year planning horizons.

Table 9.2 Planning Horizon

Did not obtain



Few months 35% 35% 30% 35% 1 year 18% 18% 26% 19% Few years 18% 19% 21% 19% 5-10 years 17% 18% 13% 18% > 10 years 12% 10% 10% 10%


9.3 Estate planning

At least half of survey participants had a written will, a living will and/or health care power of attorney. These estate-planning tools were more frequently reported among reverse mortgage

54

borrowers than non-borrowers. For instance, 72% of borrowers had a written will compared to 60% of non-borrowers. Trust and estate plans were less common among survey participants: less than one in five non-borrowers and active borrowers used these financial products, although 30% of terminated borrowers had a trust.

Table 9.3 Estate Planning

Did not



Written will 60% 72% 77% 69%

Trust 18% 23% 30% 22%

Estate plan 16% 17% 17% 17%

Living will and/or health care power of attorney 57% 66% 73% 64%

N (Respondents) 423 1104 88 1615



9.4 Primary bill payer

The majority of survey participants indicated that they usually handled bill paying in their household. About 76% of active borrowers, 75% of non-borrowers, and 66% of terminated borrowers were the primary bill payer. A particularly large group of about 24% of terminated borrowers had someone else handle their household bills.

Table 9.4 Primary Bill Payer

Did not



Self 75% 76% 66% 75% Other 12% 12% 24% 13% Self with other 13% 12% 10% 12%



9.5 Financial literacy

Survey participants were asked a series of three questions to measure their financial literacy: Question 1: “Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After 5 years, if you left the money to grow in the account, do you think you would have: more than $102, exactly $102, or less than $102?”

55

Question 2: “If 5 people all have the winning numbers in the lottery and the prize is 2 million dollars, how much will each of them get?” Survey participants were asked to provide the amount in an open-ended question format. Question 3: “A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage, but the total interest paid over the life of the loan will be less. True or false?” As expected, survey participants provided the highest number of correct responses for the third financial literacy question. On average, 84% answered this question correctly. Question 1 was answered correctly by 81% and Question 2 by 68%.

Table 9.5.1 Financial Literacy Questions

Did not



Financial Literacy Q1

Correct Answer 80% 80% 85% 81%

Incorrect Answer 20% 20% 15% 19%

N (Respondents) 394 1026 86 1506

N (DK/Refuse/Missing) 73 166 16 255 Financial Literacy Q2



N (Respondents) 324 875 74 1273

N (DK/Refuse/Missing) 143 317 28 488 Financial Literacy Q3



N (Respondents) 380 1004 83 1467


See p. 88 for survey question(s) Most respondents were able to answer all questions correctly. Fifty-one percent of terminated borrowers, compared with 44% of active borrowers and 39% of non-borrowers, answered all three questions correctly. About a third of respondents answered two questions correctly, and the remainder answered only one or zero questions correctly.

56

Table 9.5.2 Number of Questions Answered Correctly

Did not obtain



0 8% 4% 6% 5% 1 23% 21% 11% 21% 2 30% 31% 32% 31% 3 39% 44% 51% 43%


See p. 88 for survey questions

57

References

Bayer, Ada-Helen , and Leon Harper. 2000. Fixing to stay: A national survey of housing and home modification issues. Washington: AARP.

Consumer Financial Protection Bureau. (2012). Reverse mortgages: report to Congress. Consumer Financial Protection Bureau.

Costa-Font, Joan, Joan Gil, and Oscar Mascarilla. (2010). Housing wealth and housing decisions in old age: sale and reversion. Housing studies 25.3: 375-395.

Davidoff, Thomas. (2015). Can 'High Costs' Justify Weak Demand for the Home Equity Conversion Mortgage? Review of Financial Studies 8(28): 2364-2398; Available at SSRN: http://ssrn.com/abstract=2146988

DeNavas-Walt, Carmen, Bernadette D. Proctor, and Cheryl Hill Lee. 2006. Income, poverty, and health insurance coverage in the United States: 2005, Current Population Reports: Consumer Income. Washington: U.S. Census Bureau.

Eschtruth, Andrew D., Wei Sun, and Anthony Webb. 2006. Will reverse mortgages rescue the baby boomers?, Issue in Brief Number 54. Boston: Center for Retirement Research at Boston College.

Haurin, D.R., Ma, C., Moulton, S., Schmeiser, M., Seligman, J., Shi, W. (2014). Spatial variation in reverse mortgages usage: House price dynamics and consumer selection. Journal of Real Estate Finance and Economics, forthcoming.

Lusardi, Annamaria and Mitchell, Olivia S. (2013). Older adult debt and financial frailty. Michigan Retirement Research Center Research Paper No. 2013-291. Available at SSRN: http://ssrn.com/abstract=2376493

Mayer, Christopher J., and Katerina V. Simons. (1994). Reverse mortgages and the liquidity of housing wealth. Real Estate Economics, 22 (2): 235-255.

Merrill, Sally R., Meryl Finkel, and Nandinee K. Kutty.(1994). Potential beneficiaries from reverse mortgage products for elderly homeowners: An analysis of American housing survey data. Real Estate Economics 22.2 : 257-299.

Moulton, Stephanie, Donald Haurin and Wei Shi. (2015). An Analysis of Default Risk in the Home Equity Conversion Mortgage (HECM) Program. Journal of Urban Economics 90: 17-34. Available online at: http://authors.elsevier.com/a/1RfOnLPdATAcz.

Nakajima, Makoto and Telyukova, Irina. (2014). Reverse Mortgage Loans: A Quantitative Analysis. FRB of Philadelphia Working Paper No. 14-27. Available at SSRN: http://ssrn.com/abstract=2494405

The National Council on the Aging. 2005. Use your home to stay at home: A guide for homeowners who need help now. Washington.

Rasmussen, David W., I. F. Megbolugbe, and B. A. Morgan. (1995). Using the 1990 public use microdata sample to estimate potential demand for reverse mortgage products. Journal of Housing Research 6.1: 1-23.

Redfoot, D. L., Scholen, K., & Brown, S.K. (2007). Reverse mortgages: Niche product or mainstream solution? Report on the 2006 AARP national survey of reverse mortgage shoppers (2007-22). Washington, D.C.: AARP Public Policy Institute.

Rodda, David T., Christopher Herbert, and Hin-Kin Lam. 2000. Evaluation report of FHA's Home Equity Conversion Mortgage Insurance Demonstration, U.S. Department of Housing and Urban Development. Washington.

Shan, H. (2011). Reversing the trend: The recent expansion of the reverse mortgage market. Real

http://ssrn.com/abstract=2376493

58

Estate Economics, 39(4), 743-768. Sinai, T. & N.Souleles. (2013). Can owning a home hedge the risk of moving? American

Economic Journal: Economic Policy, 5(2), 282-313. Szymanoski, Edward J. 2010. Home Equity Conversion Mortgage: Overview of HECM

insurance model and risk management in the recession, Presentation: US Department of Housing and Urban Development, Office of Policy Development and Research (PD&R).

U.S. Department of Housing and Urban Development. 2006. HUD strategic plan FY 2006 - FY 2011. Washington.

U.S. Census Bureau. 2015. Housing vacancies and homeownership (CPS/HVS): 2015. Table 7. Homeownership rates by age of householder. Washington.

Venti, Steven F., and David A. Wise. (1991). Aging and the income value of housing wealth. Journal of Public Economics 44.3: 371-397.

59

Appendix: Survey

The appendix gives the numbering from the original survey in the Survey Question column, and the corresponding table in the Table in Report column. Where there are questions which have no corresponding table, the Table in Report column is left blank. Table in Report

Survey Question

1. Introduction Module All survey participants should complete this section

Welcome! You are about to begin The Ohio State University's Aging in Place survey. We are partnering with the nonprofit organization, Consumer Credit Counseling Services of Atlanta—also known as CredAbility—to get feedback from households who at one time considered a reverse mortgage. You are completing this survey as someone who received counseling for a reverse mortgage from CredAbility within the past 6 years. CredAbility provided us with your contact information so we could follow up and hear from you about your experiences. The survey will take about 30 minutes to complete. Your feedback is very important to us. If you have any questions as you complete the survey, or if you would prefer to complete the survey over the telephone, please call us at 1-866-442-6654.

1.1.1 Are you…

1. A person who participated in the reverse mortgage counseling session?

2. The spouse or partner of a person who received counseling for a reverse mortgage? If yes, please answer all questions on behalf of your spouse or partner.

3. A power of attorney of a counseled person? If yes, please answer all questions on behalf of the counseled person.

Study Information

Before we get started, we'd like provide you with some important information about the study. We are going to ask you some questions about reverse mortgages, your finances and your housing situation. This research will help us understand more about the reverse mortgage process, and whether or not reverse mortgages are helpful to those that decide to get them. Through this study, we hope to improve the reverse mortgage process in the future for

60

Table in Report

Survey Question

people like you. Your participation is completely voluntary, and you may refuse to answer any questions or stop the interview at any time without penalty or loss of benefits to which you are otherwise entitled. The results will be used for research purposes only. Your responses will be connected with administrative data already collected as a standard part of the counseling process and updated by CredAbility on a regular basis, including credit report data and mortgage information. By agreeing to participate, you also agree to allow us to use your administrative data for research purposes only. If you refuse to participate in this study, the administrative data which has been collected by CredAbility will not be used in this research. Efforts will be made to ensure that the information you provide as a part of this study will be confidential and all identifying information will be removed. The risks are minimal to taking part in this research. You may experience short-term discomfort in answering sensitive questions. Also, as with any data collection process, there can be a minimal risk of breach of confidentiality. However, this risk is very low because of our University's high data security measures. We will work to make sure that no one sees your survey responses without approval. But if you choose to do the survey yourself, either over the internet or using paper and pencil, there is a chance that someone could access your online or paper responses without your permission. In some cases, this information could be used to identify you. We encourage you to keep your survey in a private place and to close your internet browser after completing the survey. As a thank you for agreeing to participate in the survey, you will be entered into a drawing to receive one of five, $100 Visa gift cards. Completion of the survey is not required to be entered into the drawing. The odds of winning a gift card are approximately 1 in 1000. Winners will be selected on or before May 1, 2014 and will be notified by email, telephone or letter. If you have any questions about your rights as a research participant, or to talk to someone who is not a member of the study team, please contact Ms. Sandra Meadows in the Office of Responsible Research Practices at 1-800-678-6251. For questions about the research, or if you feel you have been harmed by taking part in the study, you may contact Dr. Stephanie Moulton, project director, at 614-247-8161.

Table P.1, Table P.2, and Table

1.1 Now, do you agree to participate in this research? Please circle the answer. 1. Yes. Please continue with the survey and return it in the included

envelope.

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Table in Report

Survey Question

P.3 2. No. Please stop taking the survey now and return it in the included envelope.

Table 2.1 1.2 Most people go through counseling, either in person or over the phone,

when they are considering a reverse mortgage. Do you remember receiving counseling for a reverse mortgage? Please circle the answer.

1. Yes 2. No

1.2.1 If you answered “2. No” for 1.2: Do you remember considering a reverse

mortgage in the last seven years? Please circle the answer.

1. Yes. Please treat any questions asking about reverse mortgage counseling as if they are asking you about the time you were considering a reverse mortgage

2. No. Please continue with the survey and answer “not applicable” to any questions about reverse mortgage counseling.

Table 1.1 1.3 Did you obtain a reverse mortgage? Please circle the answer.

1. Yes; please continue with Question 1.4 2. No; please continue with Question 1.5

1.4 If you answered “1. Yes” for 1.3: Which of the following describes the current status of your reverse mortgage? Please circle the answer.

1. You still have the original reverse mortgage on your house 2. You refinanced the original reverse mortgage with another reverse

mortgage 3. You sold the house and terminated the reverse mortgage 4. You still live in your house but repaid the reverse mortgage 5. You refinanced the reverse mortgage with another type of loan 6. Other, please specify: _____________________ 7. Not applicable 8. Don’t know 9. Refuse to answer

Table 6.10 1.5 At the time of reverse mortgage counseling, would you say you were

single, married, living with a partner, widowed, separated, or divorced?

1. Single 2. Married 3. Living with a partner

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Table in Report

Survey Question

4. Widowed 5. Separated 6. Divorced 8. Don’t know 9. Refuse to answer

1.6 Currently, would you say you are single, married, living with a partner, widowed, separated, or divorced?

1. Single 2. Married 3. Living with a partner 4. Widowed 5. Separated 6. Divorced 8. Don’t know 9. Refuse to answer

1.7 How many people currently live in your household including yourself?

_______ (number of people including yourself) 8. Don’t know 9. Refuse to answer

2. Reverse Mortgage Counseling Module

All survey participants should complete this section

Table 1.2 2.1 Would you say you are very satisfied, somewhat satisfied, neither satisfied nor unsatisfied, somewhat unsatisfied, or very unsatisfied with your decision to obtain or not obtain a reverse mortgage?

1. Very satisfied 2. Somewhat satisfied 3. Neither satisfied nor unsatisfied 4. Somewhat unsatisfied 5. Very unsatisfied 8. Don’t know 9. Refuse to answer

Table 1.3 2.2 How did you first learn about the reverse mortgage? 1. Family member or relative 2. Lender who worked for a bank or mortgage company 3. Professional financial advisor 4. Friend or neighbor 5. Church or community organization

63

Table in Report

Survey Question

6. Newspaper or magazine 7. Television advertisement 8. Internet advertisement 9. Radio advertisement 10. Information from AARP 11. Other, please specify: _____________________ 98. Don’t know 99. Refuse to answer

Table 1.4 2.3. What were the primary financial reasons that you originally considered a

reverse mortgage? You may choose all that apply:

1. To pay off mortgage debt 2. To pay off non-mortgage debt (such as credit cards, personal loans, and

other debts) 3. To pay for ongoing health or disability-related expenses 4. To pay for home improvements (such as home modifications, building

an addition, etc.) 5. To gain extra income for everyday expenses (other than health needs) 6. To afford a big purchase (such as a car or vacation) 7. To provide financial help to your family 8. To postpone using other sources of retirement income 9. To purchase a new property 10. To lock in access to your home’s equity in case your home declined in

value 11. Any other reason not listed here, please

specify:___________________ 98. Don’t know 99. Refuse to answer

Table 1.5 2.4 If you took out a reverse mortgage: Of the options just mentioned, what are

the primary ways that you have spent the money from your reverse mortgage? You may circle up to three items below.

1. To pay off mortgage debt 2. To pay off non-mortgage debt (such as credit cards, personal loans, or

other debts) 3. To pay for ongoing health or disability-related expenses 4. To pay for home improvements (such as home modifications, building

an addition, etc.) 5. To gain extra income for everyday expenses (other than health needs) 6. To afford a big purchase (such as a car or vacation) 7. To provide financial help to your family 8. To postpone using other sources of retirement income

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Table in Report

Survey Question

9. To purchase a new property 10. Any other reason not listed here, please specify:

__________________ 98. Don’t know 99. Refuse to answer

Table 1.6 2.4.1 If you marked “1. To pay off mortgage debt” in 2.3 or 2.4: You said that

you wanted to pay off mortgage debt. Please circle if any of the following are reasons that describe why you wanted to pay off mortgage debt.

1. You were behind on your mortgage payments 2. You were facing foreclosure 3. You had a high interest rate on your mortgage 4. You had an adjustable rate mortgage and your payment increased 5. You could no longer afford to make your monthly mortgage payment 6. You didn’t want to have a monthly mortgage payment 7. You wanted to pay off a home equity loan or other loan on your home 8. Other, please specify: ___________________ 98. Don’t know 99. Refuse to answer

2.4.2 If you marked “1. To pay off mortgage debt” in 2.3 or 2.4: Were

property taxes and homeowner’s insurance included as part of the monthly mortgage payment you were looking to pay off? (This is often referred to as an “escrow” for taxes and insurance).

1. Yes 2. No 8. Don’t know 9. Refuse to answer

65

Table in Report

Survey Question

Table 2.2 2.5 Knowing what you know today about reverse mortgages, please circle “yes” or “no” if you felt like you were informed about the following items at the time of reverse mortgage counseling:

Yes=1 No=2 N/A = Not applicable

DK = Don’t know

RF = Refuse to answer

a. The different ways to receive your money, for example a credit line, a lump sum, or a monthly payment 1 2 N/A DK RF b. Your responsibility to pay property taxes and homeowner’s insurance 1 2 N/A DK RF c. If you were married at the time of counseling: The implications of removing or not having your spouse on the deed 1 2 N/A DK RF d. The increasing loan balance due to accumulating interest and mortgage insurance premiums 1 2 N/A DK RF

Table 2.3.1 and Table 2.3.2

2.6 Now, we’d like to know about your experiences with your counselor and loan officer. Please circle “yes” or “no” to the following questions.


DK = Don’t know


a. Did the reverse mortgage counselor provide you with enough information to inform your decision about a reverse mortgage? 1 2 N/A DK RF b. Did you feel pressured by the reverse mortgage counselor to take a reverse mortgage? 1 2 N/A DK RF c. Did the reverse mortgage loan officer provide you with enough information to inform your decision about a reverse mortgage? 1 2 N/A DK RF d. Did you feel pressured by the reverse mortgage loan officer to take a reverse mortgage? 1 2 N/A DK RF e. Did you feel pressured by the loan officer to take the reverse mortgage as a fixed rate, lump sum loan (all proceeds at closing)? 1 2 N/A DK RF

66

Table in Report

Survey Question

Table 2.4 2.7 Below is a list of individuals who might have influenced your decision to take or not take a reverse mortgage. Please circle “yes”, “no”, or “not applicable” as to whether or not this person was influential to your decision:


DK = Don’t know


a. Your reverse mortgage counselor 1 2 N/A DK RF b. Your reverse mortgage loan officer 1 2 N/A DK RF c. Your children 1 2 N/A DK RF d. Your significant other or spouse if you were married or living with a partner at the time of counseling: 1 2 N/A DK RF e. Your financial advisor 1 2 N/A DK RF f. Your attorney 1 2 N/A DK RF g. Your friends 1 2 N/A DK RF h. Other people 1 2 N/A DK RF

Table 2.5 2.9 If you took out a reverse mortgage and still have it: Below are some different actions people might take to meet their financial needs. Since the time of counseling, please circle all the actions that have been taken to help meet your financial needs in addition to or instead of the reverse mortgage:

1. Return to work 2. Receive help from a government program (such as Medicaid or SSI) 3. Borrow money from friends or family 4. Take out a payday loan or cash advance 5. Cut back on essential expenses (such as medical visits or food) 6. Cut back on non-essential expenses (such as entertainment, dining, or

travels) 7. None of these 8. Other, please specify: ____________________________ 98. Don’t know 99. Refuse to answer

2.9.1 If you did not take out a reverse mortgage, or if you took out a reverse mortgage and later terminated it: Below are some different actions people might take to meet their financial needs. Since the time of counseling, please circle all the actions that have been taken to help meet your financial needs in addition to or instead of the reverse mortgage:

1. Take out a mortgage or home equity loan 2. Sell your home and move 3. Go through foreclosure 4. Move in with family or friends 5. Refinance your first mortgage

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Table in Report

Survey Question

6. Return to work 7. Receive help from a government program (such as Medicaid or SSI) 8. Borrow money from friends or family 9. Take out a payday loan or cash advance 10. Cut back on essential expenses (such as medical visits or food) 11. Cut back on non-essential expenses (such as entertainment, dining, or

travels) 12. None of these 13. Other, please specify: ____________________________ 98. Don’t know 99. Refuse to answer

3. Reverse Mortgage Loan Module

Complete this section only if you took out a reverse mortgage

Table 3.1 3.1 Consider the following statement: “Having a reverse mortgage improved the quality of my life.” Do you strongly agree, agree somewhat, neither agree nor disagree, disagree somewhat, or strongly disagree?

1. Strongly agree 2. Agree somewhat 3. Neither agree nor disagree 4. Disagree somewhat 5. Strongly disagree 8. Don’t know 9. Refuse to answer

Table 3.2 3.2 If you still have your reverse mortgage: If you were to sell your house

today, about how much would you owe on your reverse mortgage? $______________________________ 8. Don’t know. Please provide us with your best estimate:

$_______________ 9. Refuse to answer

3.2 If you repaid your reverse mortgage or refinanced it with a different type

of loan: If you were to sell your house today, about how much would you owe on all mortgages?

$______________________________ 8. Don’t know. Please provide us with your best estimate:

$_______________ 9. Refuse to answer

68

Table in Report

Survey Question


3.3 Did the money from your reverse mortgage last longer, shorter or about the same amount of time that you originally anticipated?

1. Longer 2. Shorter 3. About the same 8. Don’t know 9. Refuse to answer

Table 3.4 3.4 Thinking about when you first got your reverse mortgage, about how much money did you take out up front? Include money used to pay off mortgage or other debt, but do not include the amount to cover up front closing costs or mortgage insurance premiums. (Enter “0” if you did not take out any money up front but instead put all of the money in a credit line or took the proceeds as monthly payments).


$_______________ 9. Refuse to answer

3.4.1 If you entered more than $0 in 3.4: Of the amount you took out up front,

about how much did you use to pay off mortgages or other debt? $______________________________ 8. Don’t know. Please provide us with your best estimate:

$_______________ 9. Refuse to answer

3.4.2 If you entered more than $0 in 3.4: Of the amount you took out up front, about how much did you use to spend on purchases like a car, vacation, or gift?


$_______________ 9. Refuse to answer

3.4.3 If you entered more than $0 in 3.4: Of the amount you took out up front, about how much did you use to save or invest for the future?


$_______________ 9. Refuse to answer

69

Table in Report

Survey Question

4. Reverse Mortgage Termination Module Complete this section only if you terminated your reverse mortgage after taking one out

Table 4.1 4.1 Below are different ways that people might terminate their reverse mortgage loan. Please circle which of the following best fits your situation.

1. You sold your home 2. You repaid the loan and kept your home 3. You lost your home to foreclosure 4. Other, please specify: ________________________ 8. Don’t know 9. Refuse to answer

4.1.1 If you answered “2. You repaid the loan and kept your home” in 4.1:

Below are different ways that people might repay their reverse mortgage loan. Please circle “yes” or “no” if any of the following describes how you paid off your reverse mortgage.


DK = Don’t know


a. You got a new forward mortgage or home equity loan 1 2 N/A DK RF b. You received life insurance proceeds 1 2 N/A DK RF c. You sold other assets 1 2 N/A DK RF d. You received an inheritance 1 2 N/A DK RF e. Other, please specify: _________________________ 1 2 N/A DK RF

Table 4.2 4.2 If you answered “1. You sold your home” in 4.1: There are different reasons people might sell their homes. Please circle if any of the following were reasons you sold your home. You may circle all that apply.

1. You had a desire to live closer to family or friends 2. You no longer wanted the maintenance associated with owning a home 3. You had a desire to live in a retirement community 4. You needed nursing care or assisted living 5. You had a desire to live in a home in which you could move around

more easily 6. The cost of property taxes was too high 7. The cost of homeowner's insurance was too high 8. The costs associated with home maintenance were too high 9. You had a desire to live in a smaller home

70

Table in Report

Survey Question

10. Death of your spouse or significant other 11. You had a desire to live in a community with nearby services,

amenities, and transportation options 98. Don’t know 99. Refuse to answer

Table 4.3 4.3 If you answered “1. You sold your home” in 4.1: Did you put your house

up for sale earlier, later, or about the same time that you initially thought you would when you took out your reverse mortgage?

1. Earlier than you thought 2. About the same time as you thought 3. Later than you thought 8. Don’t know 9. Refuse to answer

71

Table in Report

Survey Question

4.3.1 If you answered “1. Earlier than you thought” or “3. Later than you thought” in 4.3: About how many years earlier or later did you put your house up for sale?

____________ (years) 8. Don’t know. Please provide us with your best estimate:

_______________ 9. Refuse to answer

4.4 If you answered “1. You sold your home” in 4.1: About how much money did you get from the sale, if anything, after paying off your reverse mortgage?


$_______________ 9. Refuse to answer

4.5 If you answered “1. You sold your home” in 4.1: Did you purchase a new home after selling your home?


4.5.1 If you answered “1. Yes” in 4.5: Below are different ways that people finance a new home purchase. Please circle “yes” or “no” if this was a way that you financed your home purchase:


DK = Don’t know


a. With proceeds from the sale of your last home 1 2 N/A DK RF b. With a new reverse mortgage for purchase 1 2 N/A DK RF c. With a new traditional mortgage 1 2 N/A DK RF d. With money given to you by family or friends 1 2 N/A DK RF e. With other assets (such as retirement accounts) 1 2 N/A DK RF

5. Reverse Mortgage Declined Module Complete this section only if you did not take out a reverse mortgage after counseling

72

Table in Report

Survey Question

Table 5.1 5.1 Below are different reasons that people may decide not to take out a reverse mortgage. Please circle if any of the following were reasons you decided to not take out a reverse mortgage. You may circle all that apply.

1. You were not eligible 2. Your property was not eligible 3. If you were married at the time of counseling: Your spouse was under

age 62 and you did not want to take him/her off the deed 4. The costs of the reverse mortgage were too high 5. The amount of money that you would have received was too small 6. You wanted the home to remain in the family and/or leave your home

as an inheritance to your children 7. You liked knowing that you own your home completely, free of any

mortgages 8. You wanted to sell your home and move 9. Your children or family members did not want you to take out a reverse

mortgage 10. You found another way to meet your financial needs

11. The process of taking out a reverse mortgage was too complicated 12. You did not trust the loan officer offering you the loan 13. A financial planner or other financial professional told you not to take

out a reverse mortgage 14. Other, please specify: _________________________ 98. Don’t know 99. Refuse to answer

73

Table in Report

Survey Question

Table 5.2 5.2 If you circled “8. You wanted to sell your home and move” in 5.1, or if you sold your home since the time of counseling: Below are different reasons people might want to sell their homes. Please circle if any of the following were reasons that you wanted to sell your home. You may circle all that apply.

1. You had a desire to live closer to family or friends 2. You no longer wanted the maintenance associated with owning a home 3. You had a desire to live in a retirement community 4. You needed nursing care or assisted living 5. You had a desire to live in a home in which you could move around

more easily 6. The cost of property taxes was too high 7. The cost of homeowner's insurance was too high 8. The costs associated with home maintenance were too high 9. You had a desire to live in a smaller home 10. Death of your spouse or significant other 11. You had a desire to live in a community with nearby services,

amenities, and transportation options 98. Don’t know 99. Refuse to answer

6. Personal Finance Module


Table 6.6 6.1 People experience different levels of satisfaction with certain areas of their life. Please circle if would you say that you are completely satisfied (CS), very satisfied (VS), somewhat satisfied (SS), not very satisfied (NVS), or not at all satisfied (NAS) with the following areas of your life: CS VS SS NVS NAS DK RF a. Your life as a whole these days 1 2 3 4 5 DK RF b. The condition of the place where you live 1 2 3 4 5 DK RF c. The city or town you live in 1 2 3 4 5 DK RF d. Your daily life and leisure activities 1 2 3 4 5 DK RF e. Your family life 1 2 3 4 5 DK RF f. Your present financial situation 1 2 3 4 5 DK RF g. Your health 1 2 3 4 5 DK RF

Table 6.7.1 6.2 Now, we’d like to know how much stress you feel from your total debt. Would you say that the total debt you are carrying causes you a great deal of stress, quite a bit of stress, some stress, not very much stress, or no stress at all?

1. A great deal of stress 2. Quite a bit of stress 3. Some stress 4. Not very much stress

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5. No stress at all 7. Not applicable 8. Don’t know 9. Refuse to answer

Table 6.7.2 6.2.1 In the last two years, have you always had enough money to buy the food

you need?


Table 6.7.3 6.2.2 Sometimes people delay taking medication or filling prescriptions because of the cost. At any time in the last two years have you ended up taking less medication than was prescribed for you because of the cost?


Table 6.1 6.3 Now we’d like to ask about the different types of assets that you might have. Please provide an estimated dollar amount of each of the items you may have below. If you do not have this type of asset, you can circle “not applicable” If you select “don’t know” for any of the assets below, please circle “DK” and write in a range from one of the following options (if you don’t know the range, just circle “DK” and leave the space blank): DK =

Don’t know

a. Less than $25,000

b. $25,000 to $49,999

c. $50,000 to $99,999

d. $100,000 or more

N/A = Not applicable


1. Any homes or real estate property other than your primary residence $_______

DK A B C D N/A RF

2. Money in checking and savings accounts $_____

DK A B C D N/A RF

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3. The value of any retirement accounts you have, such as IRAs, 401ks, 403bs, 457s or any other funds $_____

DK A B C D N/A RF

4. The value of other non-retirement bonds, stocks, mutual funds, money markets, CDs, or other financial holdings $_____

DK A B C D N/A RF

5. The value of any businesses or farms you may own, in whole or in part. (If you own a portion of a business or farm please list just the value of the amount of that farm or business that belongs to you) $______

DK A B C D N/A RF

6. The value of any annuities $_____

DK A B C D N/A RF

7. The value of any cars, boats, or other transportation $___

DK A B C D N/A RF

8. Any other assets, please specify: ____________ $________

DK A B C D N/A RF

Table 6.4 (con’t below)

6.4 Do you currently receive Social Security benefits for retirement or disability?

1. Yes

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2. No 8. Don’t know 9. Refuse to answer

6.4.1 If you answered “1. Yes” in 6.4: When did you begin receiving benefits?

Enter a calendar year (e.g. 2003) ___________ 8. Don’t know 9. Refuse to answer

Table 6.4 6.4.2 If you were married or living with a partner at the time of your reverse

mortgage counseling or afterward: Does (or did) your spouse or partner receive Social Security benefits for retirement or disability?


6.4.3 If you answered “1. Yes” in 6.4.2: When did your spouse or partner

begin receiving benefits?

Enter a calendar year (e.g. 2003) ___________ 8. Don’t know 9. Refuse to answer

Table 6.2 6.5 In a typical month, what is your estimated gross household income from all

sources, such as wages, Social Security, retirement pensions, annuities, and any other retirement income? Do not include the money you receive from a reverse mortgage.


$_______________ 9. Refuse to answer

Table 6.3 6.5.1 Thinking about the amount per month from the last question, has your

income been about the same, increased by more than 10 percent, or decreased by more than 10 percent since you received counseling for your reverse mortgage?

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1. About the same 2. Increased, it is more than 10 percent HIGHER 3. Decreased, it is more than 10 percent LOWER 8. Don’t know 9. Refuse to answer

Table 6.8 6.6 Below are different events that may have occurred since you received

counseling for a reverse mortgage. Please circle if any of the following events occurred since your counseling. You may circle all that apply (continued on next page). If you mark any of the following events, please write in the year this event happened in the space immediately below the event.

1. Loss of your spouse or other household member due to moving out, divorce, separation or death Year: ________

2. You added a new household member (who lives with you) Year: ________

3. Retirement from your job Year: ________

4. Loss of job or wages Year: ________

5. You (or your significant other) had a serious illness, injury or disability Year: ________

6. You (or your significant other) had to stop working because of health reasons Year: ________

7. You received an inheritance or large financial gift Year: ________

8. You experienced an increase in your living costs Year: ________

9. Any other events that affected your financial situation, please specify: ______________________________ Year: ________

Table 6.5 6.7 In a typical month, do you find that your expenses are greater than your

income, less than your income, or about the same as your income?

1. Greater than your income 2. Less than your income 3. About the same as your income 8. Don’t know

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9. Refuse to answer 6.7.1 If you marked “1. Greater than your income” in 6.7: About how much do you have to borrow or draw from other resources to cover your expenses in a typical month?


$_______________ 9. Refuse to answer

6.7.2 If you marked “2. Less than your income” in 6.7: About how much do you have left over from your income after paying all your expenses in a typical month?

$______________________ 8. Don’t know. Please provide us with your best estimate:

$_______________ 9. Refuse to answer

Table 6.9 6.8 Thinking about an inheritance you (and your spouse or partner) might

leave to any relatives other than your spouse or partner, what are the chances, from zero to 100, that you will leave any inheritance? Include property and other valuables that you might own as well as money here. “00” indicates "absolutely no chance of leaving an inheritance" and "100" indicates that you are "absolutely certain you will leave an inheritance."

00---10---20---30---40---50---60---70---80---90---100 8. Don’t know 9. Refuse to answer

7. Housing Module

All survey participants should complete this section The following questions are about your current home, where you live six months of the year or more. If you have more than one home, pick the home that you consider to be your primary home to answer these questions.

Table 7.1 7.1 Do you currently own your home, rent your home, or have some other living arrangement?

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1. Own 2. Rent 3. Some other living arrangement. Please specify: ________________ 8. Don’t know 9. Refuse to answer

7.1.1 Please circle if you live in any of the following communities: 1. Retirement community 2. Assisted living facility 3. Nursing home 4. None of the above 8. Don’t know 9. Refuse to answer

7.1.2 Please circle which of the following best describes your living space

1. Single family home 2. Condominium 3. Apartment 4. None of the above 8. Don’t know 9. Refuse to answer

Table 7.2 7.1.3 If you answered that you own your home in 7.1: If you were to sell your

house today, how much do you think it would be worth? This is often called the appraised value. If you have more than one home, respond about your primary residence.

$______________________________ 8. Don’t know. Please provide your best estimate: $________________ 9. Refuse to answer

7.1.4 If you answered that you own your home in 7.1: Not including your reverse mortgage (if applicable), how much do you owe on your house today, including all mortgages or liens against your property? Please enter “0” (zero) if you do not have a mortgage or lien against your property.


Table 7.3 7.1.5 If your answer to 7.1.3 is more than “$0”: How much is your monthly

mortgage payment? Include property taxes and homeowner’s insurance if they

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are collected as part of your monthly mortgage payment. $______________________________ 8. Don’t know. Please provide your best estimate: $________________ 9. Refuse to answer

7.1.6 If your answer to 7.1.4 is more than “$0”: Does the amount above include property taxes and homeowner’s insurance?


7.1.7 If you answered that you rent your home in 7.1: How much do you pay for rent each month?

$______________________________ 8. Don’t know. Please provide your best estimate: $____________ 9. Refuse to answer

Table 7.4.1 (con’t. below)

7.1.8 How much do you pay for utilities, such as water, gas, and electric each month, if they are not included in your rent or mortgage payment?


7.1.9 Please estimate how much you spend per month, if anything, on

condominium fees, community fees, or homeowner’s association fees: $______________________________ 8. Don’t know. Please provide your best estimate: $____________ 9. Refuse to answer


7.2 Thinking about where you currently live, about when was your home built?

Enter a calendar year, for example 1970 ____________ 8. Don’t know. Please provide your best estimate: ________________ 9. Refuse to answer

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7.3 About what year did you move into your current home?

Enter a calendar year, for example 1970 ____________ 8. Don’t know 9. Refuse to answer

7.4 How many more years do you plan to stay in your current home? ____________years 8. Don’t know. Please provide your best estimate: ________________ 9. Refuse to answer


7.5 Does your residence have stairs, a steep pathway, or other barriers that could make it hard to stay in your current home over time?


Table 7.6.2 7.6 Thinking about where you live most of the time, would you rate the

condition of your home as very good, good, average, poor, or very poor?

1. Very Good 2. Good 3. Average 4. Poor 5. Very Poor 8. Don’t know 9. Refuse to answer


7.7 How many bedrooms do you have in your home? ____________ bedroom(s) 8. Don’t know 9. Refuse to answer

Table 7.4.1 7.8 In a typical year, what are your estimated expenses for property taxes?


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7.8.1 In a typical year, what are your estimated expenses for homeowner’s insurance?

$______________________ 8. Don’t know. Please provide your best estimate: $_____________ 9. Refuse to answer

Table 7.4.3 7.9 If you answered that you own your home in 7.1: Are you current on your

property taxes? 1. Yes 2. No 8. Don’t know 9. Refuse to answer

7.9.1 If you answered “2. No” in 7.9: About how much do you owe for past due property taxes?


Table 7.4.2 7.10 If you answered that you own your home in 7.1: Have your annual property taxes increased, decreased, or stayed the same since the time of your counseling for a reverse mortgage?

1. Increased 2. Decreased 3. Stayed the same 8. Don’t know 9. Refuse to answer

7.10.1 If you answered “1. Increased” in 7.10: By how much did your property taxes increase?

$______________________________ 8. Don’t know. Please provide your best estimate: $_____________ 9. Refuse to answer

7.10.2 If you answered “2. Decreased” in 7.10: By how much did your property taxes decrease?

$______________________________ 8. Don’t know. Please provide your best estimate: $_____________ 9. Refuse to answer

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Table 7.6.1 7.11 Do you have family, friends, or other people nearby that you can rely on for help with a problem or emergency?


7.12 In addition to your primary residence, do you own or rent another home, such as a vacation home, where you live part of the year?

1. You own another home 2. You rent another home 3. You do not own or rent any other home 8. Don’t know 9. Refuse to answer

8. Health Module


Table 8.1

8.1 Thinking about your current health, would you rate your health as excellent, very good, good, fair or poor?

1. Excellent 2. Very good 3. Good 4. Fair 5. Poor 8. Don’t know 9. Refuse to answer

Table 8.2.1 8.2 Thinking about your health since the time you were first counseled for a

reverse mortgage, would you say that your health has significantly improved, somewhat improved, stayed the same, somewhat worsened, or significantly worsened?

1. Significantly improved 2. Somewhat improved 3. Stayed the same 4. Somewhat worsened 5. Significantly worsened 8. Don’t know

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9. Refuse to answer

Table 8.2.2 8.2.1 If you are currently married or living with a partner: Thinking about your spouse or partner’s health since the time you were first counseled for a reverse mortgage, would you say that your spouse or partner’s health has significantly improved, somewhat improved, stayed the same, somewhat worsened, or significantly worsened?

1. Significantly improved 2. Somewhat improved 3. Stayed the same 4. Somewhat worsened 5. Significantly worsened 8. Don’t know 9. Refuse to answer

Table 8.3 8.3 How many different times were you a patient in a hospital or nursing home

overnight in the last 2 years? ___________times 8. Don’t know. Please provide your best estimate: ________________ 9. Refuse to answer

8.3.1 If you are currently married or living with a partner: How many different

times was your spouse or partner a patient in a hospital or nursing home overnight in the last 2 years?

___________times 8. Don’t know. Please provide your best estimate: ________________ 9. Refuse to answer

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Table 8.4 8.4 Below are some tasks that people may have difficulty with because of health or memory problems. Please circle “yes” or “no” if you (or your spouse/partner) have difficulty with the following tasks.


DK = Don’t know

RF = Refuse

to answer

a. Climbing one flight of stairs without resting 1 2 N/A DK RF b. Bathing or showering 1 2 N/A DK RF c. Shopping for groceries 1 2 N/A DK RF d. Managing your money, such as paying your bills and keeping track of expenses 1 2 N/A DK RF e. Household chores, yard work, or simple home repairs 1 2 N/A DK RF

Table 8.6 8.5 Thinking of someone with your health status and gender, to what age would you expect them to live?

____________ (age in years) 8. Don’t know 9. Refuse to answer

8.5.1 Thinking of the age you just mentioned in 8.5, do you expect to live about the same number of years?


8.5.2 If you answered “2. No” in 8.5.1: To what age do you think you will live?

____________ (age in years) 8. Don’t know 9. Refuse to answer

Table 8.7 8.6 Please select all health insurance types you have from the following types

of health insurance, not including vision or dental insurance (you may select more than one).

1. Medicare Part A (Hospitalization) 2. Medicare Part B (Routine health expenses like doctor visits) 3. Medicare Part D (Prescription drug benefit)

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4. Medicaid 5. Veterans Affairs CHAMPVA or TRICARE (formerly CHAMPUS) 6. A private plan from an employer (including state retirement pension

systems) 7. A private plan purchased directly 8. Other plan, please specify: __________________ 98. Don’t know 99. Refuse to answer


8.7 Now we would like to know about how much money you spend each month on health care. In a typical month, what are your estimated expenses from the following: 1. Regular health and medical expenses (such as doctor visits, prescriptions, or co-pays)

$_______ DK RF

2. Health and life insurance premiums $_______ DK RF 3. Home health care services $_______ DK RF

Table 8.9 8.8 Not including government programs like Medicare or Medicaid, do you currently have any long-term care insurance?


Table 8.5.1 8.9 Part of this study is concerned with people's memory, and ability to think about things. First, how would you rate your memory at the present time? Would you say it is excellent, very good, good, fair or poor?

1. Excellent 2. Very good 3. Good 4. Fair 5. Poor 8. Don’t know 9. Refuse to answer

Table 8.5.2 8.10 Second, how would you rate your ability to think quickly at the present

time? Would you say it is excellent, very good, good, fair, or poor?

1. Excellent

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2. Very good 3. Good 4. Fair 5. Poor 8. Don’t know 9. Refuse to answer

9. Financial Capability Module


Table 9.1 9.1 We are on the last section. Next are some questions about your preferences. There are no wrong or right answers, just answer what sounds right for you. How willing are you to take risks with your financial investments? Please use a 10-point scale, where 1 means “Not at all willing” and 10 means “Very willing.”

Please circle one of the following 1—2—3—4—5—6—7—8—9—10 98. Don’t know 99. Refuse to answer

Table 9.2 9.2 In deciding how much of their income to spend or save, people are likely

to think about different time periods. In planning your or your family’s saving and spending, would you say that you most often think about the next few months, the next year, the next few years, the next five to ten years, or longer than ten years?

1. The next few months 2. The next year 3. The next few years 4. The next five to ten years 5. Longer than ten years 8. Don’t know 9. Refuse to answer

Table 9.3 9.3 Below are different types of plans that some people may have. Please

circle “yes” or “no” if you have the following:


DK = Don’t know

RF = Refuse

to

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answer a. A written will 1 2 N/A DK RF b. A trust 1 2 N/A DK RF c. An estate plan 1 2 N/A DK RF d. A living will and/or health care power of attorney 1 2 N/A DK RF

Table 9.4

9.4 Who in your household usually handles bill paying?

1. You 2. Someone else 3. You with someone else 8. Don’t know 9. Refuse to answer


9.5 To end the survey, we are going to ask you a few math questions. It’s OK if you pick the wrong answer; just take your best guess. First, suppose you had $100 in a savings account and the interest rate was 2 percent per year. After 5 years, if you left the money to grow in the account, do you think you would have: More than $102, exactly $102, or less than $102?

1. More than $102 2. Exactly $102 3. Less than $102 8. Don’t know 9. Refuse to answer

9.6 Next is a question about winning the lottery. If 5 people all have the winning numbers in the lottery and the prize is 2 million dollars, how much will each of them get?

$____________________ 8. Don’t know 9. Refuse to answer

9.7 Last question: Do you think the following statement is true or false? “A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage, but the total interest paid over the life of the loan will be less.”

1. True 2. False 8. Don’t know

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9. Refuse to answer

10. Thank You All survey participants should complete this section

10.1 If you currently have a reverse mortgage: We’d like to let you know that the nonprofit organization, CredAbility, may be offering free financial counseling over the telephone to homeowners with reverse mortgages within the next few months. If they do offer free financial counseling, would you be interested in participating? Please circle the answer.

1. Yes 2. No 3. Maybe 8. Don’t know 9. Refuse to answer

10.1.1 If you answered “1. Yes” to 10.1: What is the best way to reach you to

provide additional information about this resource? 1. E-mail. Please provide your address:________________ 2. Phone number. Please provide your phone number: _____________ 3. Mailing address. Please provide your mailing address: ___________

10.2 Thank you for taking time to complete the survey. We appreciate your

thoughts! As a thank you for your time, you will be entered into a drawing to receive one of five $100 gift cards. Winners will be notified on June 1, 2014, by email, letter and/or telephone. Please provide us with your most recent contact information so that we can notify you if you are selected. Your contact information will not be shared with anyone outside of the research team. Preferred e-mail: _________________ Preferred phone: _________________ Preferred home address: ____________________ Refuse to answer Please mail the completed survey to: Center for Human Resource Research 921 Chatham Lane, Suite 200

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Columbus, OH 43221-2418 USA

Documents

SSRN-id2749368