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Jack M. Guttentag
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Jack M. Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania. He served as chief of the Domestic Research Division of the Federal Reserve Bank of New York; was a member of the senior staff of the National Bureau of Economic Research; and was managing editor of both The Journal of Finance and The Housing Finance Review. Prof. Guttentag has been advising consumers and the media on mortgage-related issues since assuming emeritus status in 1997. Comments and questions can be left at

Entries by Jack M. Guttentag

The Senate Banking Committee Proposes Adoption of an Untried Model to Replace Fannie Mae and Freddie Mac

(3) Comments | Posted April 15, 2014 | 6:37 PM

Fannie Mae and Freddie Mac, once the twin kingpins of the home loan market, have been languishing in Federal conservatorship since September 6, 2008. While their continued presence is an embarrassment to many on both sides of the political aisle, it is generally understood that the agencies can't be axed...

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Alternative Ways to Pay Off Your Mortgage Early

(0) Comments | Posted April 1, 2014 | 3:43 PM

A standard fully-amortizing mortgage pays off the balance over the term. With a 30-year term, this requires 360 monthly payments, while a 15-year term requires 180 payments. Many lenders, however, offer special loan repayment programs that promise to pay off the balance before term, without imposing much of an added...

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Making Your Extra Mortgage Payments Count

(0) Comments | Posted March 26, 2014 | 12:14 PM

Homeowners with a mortgage usually want to reduce their interest cost by paying down the loan balance as fast as possible. This article is about what borrowers can and cannot do on their own. Next week I look at various schemes that claim to make the task easier.


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Unmarried Couples Buying a House Together May Also Be Buying Trouble

(0) Comments | Posted March 19, 2014 | 3:52 PM

More and more couples, both mixed and same-sex, are electing to live together without getting married, and often this includes purchasing a home together. This is a major decision fraught with potential consequences if and when they decide to split.

Set the Ground Rules For a Split Before the...

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Mortgage Issues of Married Couples: From Loan Qualification to Breakup

(0) Comments | Posted March 11, 2014 | 3:28 PM

When a married couple purchases a house with the help of a mortgage, they become subject to a wide range of legal rules and custom-based practices at every stage of the process. This article will summarize some of the major issues that arise.

Qualifying For a Standard Mortgage:


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Builder Financing May Be Troublesome

(0) Comments | Posted March 4, 2014 | 3:45 PM

"I purchased a home from builder XYZ for $320,000, and have a $10,666 Realtor rebate coming back to me. (2/3 of 5% of $320,000). The builder had me sign a paper that says the Realtor rebate can only be used to pay settlement costs. In addition, if I use XYZ's...

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Should Condo Owners Press Their Boards to Seek FHA Approval?

(0) Comments | Posted February 20, 2014 | 7:43 PM

If a condo meets FHA approval, purchasers of units in the condo are eligible for FHA financing. This is advantageous to existing residents who want to sell their units, or may want to in the future. It is also advantageous to existing residents who want to stay put but anticipate...

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Will Mortgages Ever Be Transacted in Bitcoins?

(0) Comments | Posted February 14, 2014 | 10:43 AM

That this question gets asked with increasing frequency is an indication of how far the bitcoin phenomena has come. Readers should recognize that any answer at this point has to be highly speculative.

Real estate transactions won't be executed in bitcoins before bitcoins become a generally acceptable medium of...

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Breaking the Logjam on HECM Reverse Mortgages (Part II)

(0) Comments | Posted January 28, 2014 | 11:41 AM

The first article of this series discussed some modest initiatives my colleagues and I have taken to help enlarge the market for HECMs. These included a monograph on matching HECM options to senior needs, a senior-friendly calculator showing the amounts seniors can draw under different payment options, and...

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Breaking the Logjam on HECM Reverse Mortgages (Pt. I)

(0) Comments | Posted January 22, 2014 | 3:00 PM

People reaching retirement age are living longer than ever, and retiring with less capacity to maintain their living standards. With good reason, this situation has been termed a "retirement funds crisis."

Yet most retiring seniors own homes in which they have significant equity, which could be unlocked by taking...

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Will CFPB's New Mortgage Disclosure Forms Help Borrowers Select the Best Mortgage Type?

(0) Comments | Posted January 9, 2014 | 11:04 AM

The Consumer Financial Protection Bureau (CFPB) has developed two new disclosure forms designed to make the mortgage process more manageable for borrowers. The first two articles in this series showed that the new disclosures will not protect borrowers from unjustified price changes while the loan is in process,...

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If Borrowers Owned Their Appraisals, They Could Shop for a Mortgage Effectively

(1) Comments | Posted January 4, 2014 | 12:29 AM

The Consumer Financial Protection Bureau (CFPB) has developed two new disclosure forms that will replace three forms administered by HUD and the Federal Reserve. The adoption date was recently extended to August 2015, which hopefully will allow CFPB to make some needed improvements. This is the second of a three-part...

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Will Borrowers Now Be Protected Against Unjustified Price Increases?

(0) Comments | Posted December 27, 2013 | 4:24 PM

The following is an email I received today, which I have edited down to the essentials:

I just received a revised Good Faith Estimate (GFE) and Truth in Lending (TIL)... Compared to the original GFE, the new one has a new insurance charge of $620... A lender rebate of $300...
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Can You Use the Good Faith Estimate to Shop Mortgage Prices?

(0) Comments | Posted December 17, 2013 | 9:44 AM

Under federal law, every home mortgage borrower must be provided with a Good Faith Estimate of Settlement Costs (GFE) within three days of receipt of the borrower's application. The GFE was administered for many years by HUD, which made substantial improvements to it in 2010. Shortly thereafter, responsibility shifted to...

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The HECM Reverse Mortgage Program Gets a Makeover

(0) Comments | Posted November 19, 2013 | 1:53 PM

Last month, FHA announced a series of sweeping changes in the HECM reverse mortgage program, most of which have already taken effect. The changes are a response to increasing losses suffered by FHA in connection with the extensive misuse of the program. A disproportionate number of borrowers were drawing as...

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Is the 'Too Big to Fail' Problem Too Big to Solve? (Last of Three)

(2) Comments | Posted October 29, 2013 | 5:07 PM

Previous articles in this series have described the major sources of public policy paralysis in dealing with the "too big to fail" problem. One source of paralysis is the operating premise that government regulation of systemically important (SI) firms can eliminate the risk that any of them will fail. Not...

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Is the "Too Big to Fail" Problem Too Big to Solve? Part II

(0) Comments | Posted October 16, 2013 | 11:26 AM

My previous article argued that existing public policy toward the "too big to fail" problem was based on an unrealistic premise: that capital requirements can be used to eliminate the risk of failure by systemically important (SI) firms -- those whose failure would threaten the stability of the world financial...

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Is the "Too Big to Fail" Problem Too Big to Solve?

(4) Comments | Posted September 30, 2013 | 11:49 AM

There seems to be almost universal consensus that using public funds to protect large institutions from failure, commonly called "bailout," is bad policy. There is nothing like a consensus, however, on what should be done about it, and execution seems to be floundering. Three approaches have emerged, only one of...

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Fix Up a Home Before Selling It, or Not?

(7) Comments | Posted August 28, 2013 | 3:13 PM

Recently I put my home up for sale, and because it needed a new roof, deck, and septic system, came face to face with this question. This article is based heavily on that experience, in which I made a serious mistake that other sellers can avoid.

Attend to Cosmetics:...

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Using a Reverse Mortgage to Avoid Impoverishment

(2) Comments | Posted July 17, 2013 | 6:44 PM

Retirement has become a frightening prospect for millions of Americans who haven't made adequate financial preparation for it, yet face the likelihood of living much longer than any prior generation of retirees. The Center For Retirement Research at Boston College reports that more than half of all households will not...

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