Jack Kemp: A reverse remembrance
Cheryl Olsome was a traffic-stopper in her prime. Even at 55, with four grown boys under her maternal belt, she retains her drop-dead Nordic beauty: Tall, blond and elegant. You cannot tell from her calm presence that she has any cares in the world. But appearance can fool us. Beneath the beauty, underneath the mild make-up, below her Nordic calm is an ocean of worry. She worries about her family’s financial survival. She agonizes about her husband’s acute joblessness. She frets about their retirement security for they have depleted their savings and the 401k account they had when her husband Peter had steady employment. For more than 30 years, Cheryl Olsome was a stay-at-home mother, and she successfully raised four sons. The last boy will leave home for college in September, and Peter and Cheryl Olsome’s nest in south Minneapolis will be empty. Far from celebrating her liberation from child-rearing, Cheryl is deeply concerned about their future. For most of the last 30 years, Peter, her husband of 33 years, was handsomely employed in the printing business. His single income was robust and secured enough to keep the Olsomes squarely in the middle-class lifestyle column: A nice, old, four-bedroom stucco home in south Minneapolis, two family cars, a cabin in northern Minnesota, a boat, vacations and other extras … life was good. The printing industry’s collision with digital technology came and life has never returned to normal for the Olsomes. In a three-year period, Peter was laid off four times, each time the new temporary job came with lower hourly pay and no benefits or health coverage. That was how the careful savings and the 401k from the formerly secured job disappeared. Today, they are barely getting by on the meager income from Cheryl’s substitute teaching position in one of the school districts in Metro Twin Cities. The job provides healthcare coverage because she is a “permanent” substitute. That is helping. The Olsomes’ story and those of millions of homeowners like them across the country illustrates the necessity and the rightness of the Obama Refinance Plan that became operational in late April. The Olsomes’ mortgage payment is nearly $1,000 a month. It consumes almost 80 percent of her take-home pay. The home’s value is down and a refinance will cut their interest cost by 50 percent and save them almost $300 dollars a month. It will preserve their shelter from potential foreclosure and give them ReverseAbility SM* when she turns 62 in about seven years. Peter will hit that mark in three. “It is the only asset we have left,” Cheryl said. As she spoke of the relief that will come to her and Peter when they close on their refinance under the Obama Plan, the raw human dimension of the President’s economic recovery strategies came into sharp focus for me. It reinforced the premise of Part One of my recent book, Think Reverse! In Think Reverse!, I proposed that, in an age of deep economic uncertainties about retirement, the home, the senior homeowner’s reverse-capacity has become the new pillar of retirement security. Her words also reminded me of Jack Kemp, who died in early May. Jack Kemp’s words inspired the theme of Part One of Think Reverse! Jack was a rev-angelist almost two decades before I coined that word in my book. He believed reverse mortgages can change seniors’ lives. In the last few years of his very useful life, that belief led him to become an investor in Generation Mortgage Company, a top-10 reverse mortgage lender in the nation. As Secretary of U.S. Department of Housing and Urban Development (HUD) in the Reagan Administration, Jack Kemp was present at the inception of the Home Equity Conversion Mortgage (HECM) and the modern reverse mortgage industry. The words which inspired Part One of my book came from his preface to the first HECM guide in 1989 … “… my hope is that this idea [reverse mortgage] will eventually become a pillar of security for older Americans and a foundation for greater dignity, hope and financial independence for their retirement years.” Think of Cheryl and Peter Olsome and of millions like them across our land whose only asset is their home, their shelter, their homestead. The Obama Plan assures that Jack Kemp’s hopes for the Olsomes of America will endure. Jack Kemp was an American original. We will miss him. * ReverseAbility is a trademark of AdvisorNet Mortgage LLC. The word was coined by AdvisorNet Mortgage President Vaughn C. Kavlie, CMPS. It means the ability to convert a senior’s home equity into reverse mortgage cash for living. It also has a wider life-planning meaning that is unique to AdvisorNet Mortgage’s way of doing business. Author and columnist, Atare E. Agbamu, CRMS is director of reverse mortgages at Minneapolis-based AdvisorNet Mortgage LLC. A member of the BusinessWeek Market Advisory Board, Agbamu is author of Think Reverse! and more than 100 articles on reverse mortgages. Through his advisory firm, ThinkReverse LLC, Agbamu advises financial professionals, institutions and regulators across the country. In a 2007 national report on reverse mortgages, the AARP cited Agbamu’s work. He can be reached by phone at (612) 436-3711 or (612) 203-9434.