New Report Shows That as Economy Weakens the Makeup of Seniors Evaluating Reverse Mortgages Changes

Data Shows Depreciating Home Values Hurting Oldest of Americans; More Researching Reverse Mortgages to Offset Investment Losses

OAKLAND, CA--(Marketwire - March 17, 2009) - Golden Gateway Financial, a comprehensive financial resource for seniors and retirees, today released new usage data from its online Reverse Mortgage Calculator that showed more senior citizens are researching reverse mortgages to offset investment losses. The company also reported on the potentially devastating implications for seniors of the continuing drop in home values as documented by the most recent S&P/Case-Shiller Home Prices Indices(1).

Taken together, the data shows that many of America's oldest homeowners are being squeezed on all sides and that their homes are no longer a guaranteed source of extra cash. Unfortunately, many of these homeowners face the prospect of a continued recession denying them the ability to recoup these losses in their lifetimes.

"For many older Americans, the time to act to stave off continuing losses is now," said Eric Bachman, founder and CEO of Golden Gateway Financial. "Retirees who are unable to tap their investments or even return to work are turning to their home as their last line of defense, only to find its value is greatly diminished. This economy is effectively rewriting the financial rules of retirement."

The Changing Face of Reverse Mortgage Borrowers

Findings from the Golden Gateway Financial Reverse Mortgage Calculator show that over the course of 2008 borrowers underwent a fundamental shift in how they viewed reverse mortgages as a retirement finance vehicle. On the heels of poor performing third quarter financials, less than half of the individuals researching reverse mortgages in the fourth quarter of 2008 held a forward mortgage on their property. This means that in addition to those interested in paying off a forward mortgage or avoiding foreclosure issues, a growing class of borrowers are considering a reverse mortgage to help offset investment losses or to buy time for their portfolios to recover.

Additional observations from the data include:

--  Age and other determining factors remained roughly consistent, while
    home values continue to drop by 6.9% on a national average and as much as
    31% in California
--  On average, borrowers could have earned approximately $134,000 in up-
    front proceeds in 2008 from a reverse mortgage, with California borrowers
    potentially earning the most at more than $195,000 (see attached map of
--  The national average for percent of loan to home value (LTV) for those
    who held a forward mortgage was slightly more than a third at 36%

               Reverse Mortgage Calculator National Averages

                              Q1 ‘08      Q2 ‘08      Q3 ‘08      Q4 ‘08
                            ----------  ----------  ----------  ----------
Average age                       68.6        69.5        69.7        69.2
                            ----------  ----------  ----------  ----------
Average home value          $  449,200  $  438,461  $  428,786  $ 412, 627
                            ----------  ----------  ----------  ----------
Percent with existing
 mortgage                         51.4%       53.4%       53.8%       46.1%
                            ----------  ----------  ----------  ----------
Average existing mortgage
 Debt                       $  157,575  $  159,700  $  146,217  $  149,683
                            ----------  ----------  ----------  ----------

* For state specific data, please contact Golden Gateway Financial

Home Prices Hurting Oldest of Americans the Most

In addition to its own calculator data, Golden Gateway Financial measured the impact of home price changes over the course of the calendar year 2008 as provided in the most recent S&P/Case-Shiller Home Prices Indices on older Americans. Tracking home price changes from the beginning of the first quarter 2008 to the end of the fourth quarter 2008 shows a steep drop-off in value for many of the top real estate markets. For example, once vibrant markets like Phoenix, Las Vegas, and San Francisco are down more than thirty percent from the first quarter of 2008.

For older Americans considering tapping their home equity to help fund their retirement, a drop in home value corresponds to a similar loss in cash available through a reverse mortgage. Those potential borrowers already hurt by investment or job loss should consider locking in their home value now in order to avoid future declines in available equity.

"For these borrowers it makes sense to avoid selling stocks or other assets at or close to the bottom when a reverse mortgage allows them to participate in the potential upside of a rebound in property values," continued Mr. Bachman.

The table below shows how the drop in average home value as determined by the S&P/Case-Shiller Indices impacts the amount of money available through a reverse mortgage in sample markets. All numbers are based on an initial home value of $200,000, and calculations were analyzed on March 10, 2009.

                     One Year
                     Change in              Q1 2008    Q4 2008
                       Home                 Upfront    Upfront   Reduction
                       Price                 Cash       Cash      in Cash
                      Index(1)     Age     Available  Available  Available
                     ---------  ---------- ---------- ---------- ---------
National Average         -18.2%      78-79 $  136,777 $  110,642 ($ 26,135)
                     ---------  ---------- ---------- ---------- ---------
Atlanta                  -12.1%      78-79 $  136,777 $  121,084 ($ 15,693)
                     ---------  ---------- ---------- ---------- ---------
Detroit                  -21.7%      78-79 $  136,777 $  107,126 ($ 29,651)
                     ---------  ---------- ---------- ---------- ---------
Las Vegas                -33.0%      78-79 $  136,777 $   90,695 ($ 46,082)
                     ---------  ---------- ---------- ---------- ---------
New York                  -9.2%      78-79 $  136,777 $  125,301 ($ 11,476)
                     ---------  ---------- ---------- ---------- ---------
Phoenix                  -34.0%      78-79 $  136,777 $   89,241 ($ 47,536)
                     ---------  ---------- ---------- ---------- ---------
San Francisco            -31.2%      78-79 $  136,777 $   93,313 ($ 43,464)
                     ---------  ---------- ---------- ---------- ---------

* For additional markets and age brackets, please contact Golden Gateway

Golden Gateway Financial's award winning online reverse mortgage calculator has been recognized as an important resource for seniors by the Wall Street Journal. It allows users to enter basic information to configure reverse mortgage loan parameters and then compare lenders based on those fields. Golden Gateway Financial makes anonymous and aggregated data from these basic entry fields publicly available on a quarterly basis.

Golden Gateway Financial recently launched a new Reverse Mortgage for Purchase Calculator to offer borrowers assistance in understanding how changes in federal reverse mortgage guidelines could help them.

For more information about reverse mortgages or to access Golden Gateway Financial's industry-leading suite of online retirement assessment tools and resources, please visit

About Golden Gateway Financial

Golden Gateway Financial (, located in Oakland, California, is a comprehensive resource for senior citizens, baby boomers and soon-to-be retirees to assess their financial health at retirement. Through a unique set of online tools and clear and unbiased communication, the company helps individuals address "The Great American Retirement Dilemma." The tools enable users to better assess the security of their nest egg and to make intelligent choices to fully enjoy what should be the best years of their lives. The company also operates the industry's premiere reverse mortgage and life settlement services with proprietary calculators and products for each, and a team of trained counselors to help seniors better understand the products, evaluate whether they are right for them.

(1) Nationally, Home Price Declines Closed Out 2008 with Record Lows According to the S&P/Case-Shiller Home Prices Indices (Press Release), Standard & Poor’s, February 24, 2009

Contact Information: Press Contact: Michael Azzano Cosmo PR 415.596.1978

Potential 2008 Reverse Mortgage Payouts