Hud Asks To Expand Seniors’ Mortgage Program

A federal program that allows elderly homeowners to borrow against the value of their home and receive the money immediately should be continued because it helps financially strapped senior citizens, said Housing Secretary Henry Cisneros.

Cisneros asked Congress to approve legislation that would continue the Federal Housing Administration’s pilot program beyond its scheduled expiration date in 2000. The bill also removes the 50,000 limit on the number of mortgages that could be issued. The program has allowed more than 16,000 government-backed “reverse” mortgages to qualified homeowners over age 62. Participating homeowners can choose to receive payments month-to-month or in a lump sum. When the home is sold or the owner dies, the private lender recovers the amount of the loan plus interest.

Cisneros said the program is a boon for seniors who own homes but have insufficient income in their later years. The money helps many seniors to continue living in their homes or to pay for such things as bills, home repairs and travel.

Playing the competition can save on phone bill

Diane Harmon has a sure-fire way save on her long-distance calls: She threatens to go to the competition.

Not too long ago, after a competitor offered her $50 to switch carriers, the 49-year-old Alexandria, Virginia, consultant politely asked AT&T Corp. what they could do for her. A customer service agent gave her a $50 credit on her next bill to stick around, with nary a fight.

Harmon’s used the tactic to get everything from lower rates to simplified billing.

“I get anything anybody else is offering me,” said Harmon. “They don’t want to lose me.”

And for good reason. Harmon spends about $250 a month on long-distance calls, so it’s in AT&T’s best interest not to lose her over $50.

Executives at AT&T, MCI Communications Corp. and Sprint Corp., said they have an arsenal of giveaways to keep or steal customers who ring up as little as $25 a month in long-distance service.

All consumers have to do is ask.

Rothschild buys distressed securities

Wilbur Ross Jr. and his colleagues at Rothschild Inc. are setting up the Rothschild Recovery Fund to invest in distressed securities.

The new fund, which is offering $150 million of limited-partnership interests with minimum commitments of $5 million, “will seek to provide significant returns through opportunistic investments in distressed securities and through selected financing arrangements for companies in bankruptcy proceedings,” according to a copy of the private placement memorandum.

This is the first of several new private equity investments planned by Rothschild Inc., a New York investment banking firm that is jointly owned by the Rothschild family firms based in London and Paris.