Reverse Mortgages from Gefen Financial Corp. Enabling older homeowners to turn home equity into tax-free income.

Gefen Financial Corp Dovid Winiarz President and Chief Mortgage Manager .... Helping people manage the debt through mortgage and equity financing since 1986

Dovid Winiarz President and Chief Mortgage Manager ....

Helping people manage the debt through mortgage and equity financing since 1986

Reverse Mortgage Program Enables homeowners age 62 and older to tap the equity they have in their home and receive tax-free income No repayment is required until the home is no longer their principal residence There are no income, asset, employment or credit requirements to participate

Enables homeowners age 62 and older to tap the equity they have in their home and receive tax-free income

No repayment is required until the home is no longer their principal residence

There are no income, asset, employment or credit requirements to participate

Some Benefits of the Loan The homeowner always retains title and ownership of the home Cash advances can be used for any purpose No Fixed Maturity Date Tax-free income will not affect Social Security or Medicare benefits

The homeowner always retains title and ownership of the home

Cash advances can be used for any purpose

No Fixed Maturity Date

Tax-free income will not affect Social Security or Medicare benefits

Eligibility 62 years of age or older (Revocable Trusts, Guardianships, Conservatorships, DPOA’s) Own home free and clear or have a balance that can be paid off with the reverse mortgage Occupy property as principal residence Agree to attend a informational session with an approved counseling agency

62 years of age or older (Revocable Trusts, Guardianships, Conservatorships, DPOA’s)

Own home free and clear or have a balance that can be paid off with the reverse mortgage

Occupy property as principal residence

Agree to attend a informational session with an approved counseling agency

Principal Residence The property must be the principal residence of each borrower Married spouses or other co-borrowers may be living apart because one of them is in a health care facility; however At least one borrower must be living in the home in order for the HECM to close

The property must be the principal residence of each borrower

Married spouses or other co-borrowers may be living apart because one of them is in a health care facility; however

At least one borrower must be living in the home in order for the HECM to close

Properties Eligible 1 - 4 Unit Dwellings Town homes / Condominiums PUD’s Manufactured / Mobile Homes (FHA Standards) Life Estate Leasehold Interest in Property Co-op’s (Pilot in NY State only)

1 - 4 Unit Dwellings

Town homes / Condominiums

PUD’s

Manufactured / Mobile Homes

(FHA Standards)

Life Estate

Leasehold Interest in Property

Co-op’s (Pilot in NY State only)

How much can be received? Age of the youngest homeowner Current interest rate Market value of home County where property is located

Age of the youngest homeowner

Current interest rate

Market value of home

County where property is located

Payment Plan Options Term monthly payments for a specified period of time Tenure monthly payments for as long as homeowner occupies the property Line of Credit payments received upon request Combination of Above

Term

monthly payments for a specified period of time

Tenure

monthly payments for as long as homeowner occupies the property

Line of Credit

payments received upon request

Combination of Above

Payment Plan Flexibility In the HECM program, the borrower may change payment plans at any time This flexibility enables the homeowner to reshape the loan as circumstances change Administrative charge of $20

In the HECM program, the borrower may change payment plans at any time

This flexibility enables the homeowner to reshape the loan as circumstances change

Administrative charge of $20

Settlement Costs Origination Fee Mortgage Insurance Premium (MIP) Traditional “FHA Allowable” fees

Origination Fee

Mortgage Insurance Premium (MIP)

Traditional “FHA Allowable” fees

Origination Fee This fee covers the lender’s administrative costs in processing and underwriting the loan Borrower is permitted to finance a minimum fee of $2,000 and no more than 2% of the Maximum Claim Amount

This fee covers the lender’s administrative costs in processing and underwriting the loan

Borrower is permitted to finance a minimum fee of $2,000 and no more than 2% of the Maximum Claim Amount

Mortgage Insurance Prem. Reduces the risk of loss in the event that the outstanding balance, including accrued interest, MIP, and fees, exceeds the value of the property at the time the mortgage is due and payable A one-time non-refundable initial MIP equal to 2 % of maximum claim amount A monthly MIP equal to one-twelfth (1/12) of the annual rate of 0.5 % of the balance

Reduces the risk of loss in the event that the outstanding balance, including accrued interest, MIP, and fees, exceeds the value of the property at the time the mortgage is due and payable

A one-time non-refundable initial MIP equal to 2 % of maximum claim amount

A monthly MIP equal to one-twelfth (1/12) of the annual rate of 0.5 % of the balance

FHA Allowable Fees Appraisal Title Insurance Credit Report Recording Fee Termite Report Flood Zone Certification Document Preparation

Appraisal

Title Insurance

Credit Report

Recording Fee

Termite Report

Flood Zone Certification

Document Preparation

Adjustable Interest Rate Set by the U.S. Treasury Securities rate adjusted to a constant maturity of 1 year Monthly (Margin: 150 bps) or Annually (310 bps) Adjustments

Set by the U.S. Treasury Securities rate adjusted to a constant maturity of 1 year

Monthly (Margin: 150 bps) or Annually (310 bps) Adjustments

Servicing Fee Lender is permitted to charge a servicing fee Fee is established at closing as a monthly figure (Currently, $30) The amount necessary to pay this fee is calculated and set aside at closing The lender adds this fee to the borrowers outstanding balance monthly

Lender is permitted to charge a servicing fee

Fee is established at closing as a monthly figure (Currently, $30)

The amount necessary to pay this fee is calculated and set aside at closing

The lender adds this fee to the borrowers outstanding balance monthly

Consumer Protections Non-Recourse No Prepayment Penalty Three Day “Right of Revision” Advance Disclosures Third Party Counseling

Non-Recourse

No Prepayment Penalty

Three Day “Right of Revision”

Advance Disclosures

Third Party Counseling

Counseling Requirement Ensures the participant understands how the program works Examine options other than a reverse mortgage that might better meet the needs of the client Provided by a HUD-approved agency

Ensures the participant understands how the program works

Examine options other than a reverse mortgage that might better meet the needs of the client

Provided by a HUD-approved agency

After Loan Closing Annual Payment of Property Taxes Annual Payment of Homeowners Insurance Maintenance of Property To Make Repairs, if required

Annual Payment of Property Taxes

Annual Payment of Homeowners Insurance

Maintenance of Property

To Make Repairs, if required

Termination Actions All the borrowers have died or sold the property Property is no longer principal residence of at least one borrower for a period exceeding 12 months Borrower refuses to fix property in disrepair Borrower violates any other covenant

All the borrowers have died or sold the property

Property is no longer principal residence of at least one borrower for a period exceeding 12 months

Borrower refuses to fix property in disrepair

Borrower violates any other covenant

Recovery of Mortgage Proceeds When the borrower does not occupy the property for 12 consecutive months Loan must be repaid in one lump payment Usually the loan balance is paid from sale proceeds of the home A non-recourse loan

When the borrower does not occupy the property for 12 consecutive months

Loan must be repaid in one lump payment

Usually the loan balance is paid from sale proceeds of the home

A non-recourse loan

Requirements for Appraisals Property must meet Minimum Property Standards for existing properties

Property must meet Minimum Property Standards for existing properties

Required Repairs (Less than 15%) Repairs that are estimated to cost less than 15% of the maximum claim amount can be completed after closing At closing, the borrower must establish a repair set aside at least equal to 150% of the cost or repairs, plus a repair administration fee

Repairs that are estimated to cost less than 15% of the maximum claim amount can be completed after closing

At closing, the borrower must establish a repair set aside at least equal to 150% of the cost or repairs, plus a repair administration fee

Tax Effects Payments received by the borrower are not taxable, as they are loan payments

Payments received by the borrower are not taxable, as they are loan payments

Limited Liability The “non-recourse” provision of the program limits the borrowers liability to the net sale proceeds from the sale of the property No deficiency judgement may be taken against the borrower or the estate

The “non-recourse” provision of the program limits the borrowers liability to the net sale proceeds from the sale of the property

No deficiency judgement may be taken against the borrower or the estate

Prepayment The loan may be repaid either in whole or in part, at any time without penalty If the loan is repaid if full, this will terminate the loan and further draws would be unavailable A partial repayment can be used to increase the monthly payment or set up a line of credit (revolving credit)

The loan may be repaid either in whole or in part, at any time without penalty

If the loan is repaid if full, this will terminate the loan and further draws would be unavailable

A partial repayment can be used to increase the monthly payment or set up a line of credit (revolving credit)

Effect on Public Benefits Proceeds are considered a loan and not as income Will not effect Social Security, Medicare or others programs that are not based on need

Proceeds are considered a loan and not as income

Will not effect Social Security, Medicare or others programs that are not based on need