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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

Should Home-Sellers Pay the Settlement Costs of Buyers?

(0) Comments | Posted July 21, 2016 | 3:47 PM

"In an effort to sell my house I agreed to pay up to $8,000 of the buyer's closing costs. Is there anything I can do to keep the amount as far below $8,000 as possible?"

At this point, no. If you agreed to pay "up to" $8,000...

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How to Unleash the HECM Reverse Mortgage Market - Part 2

(0) Comments | Posted July 17, 2016 | 5:03 PM

Last week's article indicated that the HECM market is not a shoppers market because the product is not well-defined, the prices charged are obscure, and HECM borrowers have no reason to be confident that the product selected will be delivered at the agreed-upon price. HECMs are offered in a gotcha...

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How to Unleash the HECM Reverse Mortgage Market - Part 1

(0) Comments | Posted July 11, 2016 | 10:22 AM

The need for a robust reverse mortgage market is large and growing. At the end of 2015 there were about 24 million homeowners aged 65 and over, with the number growing by about a million each year. The Center For Retirement Research at Boston College estimates that more than half...

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Four Ways to Purchase a House With a Reverse Mortgage

(0) Comments | Posted June 28, 2016 | 1:54 AM

Many home purchasers are seniors. Some become homeowners for the first time, but most have been and want to remain homeowners. They just don't want to remain in their current house. They may want a house that has no stairs, or one that is closer to family or friends, or...

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The Mortgage Document Deluge: Did TRID Help? (Part 4 of 4)

(0) Comments | Posted June 20, 2016 | 11:19 AM

The TILA-RESPA Integrated Disclosure Rule (TRID) was put into force on August 2015 by the Consumer Financial Protection Bureau (CFPB). The documents required by TRID that were discussed in the first 3 parts of this series dealt with the relatively easy parts of the mortgage closing process: junk documents that...

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The Mortgage Document Deluge: Did TRID Help? (Part 3 of 4)

(0) Comments | Posted June 14, 2016 | 11:33 AM

In Parts 1 and 2 of this series, I explained how the large number of documents involved in a mortgage closing can be divided into 4 groups that should be viewed differently by borrowers. In this installment I review the categories I refer to as the "Educational Documents" and the...

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The Mortgage Document Deluge: Did TRID Help? Part 2 of 4

(1) Comments | Posted June 6, 2016 | 9:15 PM

Everyone who has ever closed a real estate transaction knows that the number of documents that must be signed at the closing table is enormous - I refer to this as the "Mortgage Document Deluge". A major purpose of this series of articles is to help borrowers cope with the...

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The Mortgage Document Deluge: Does TRID Help? (Part 1 of 4)

(0) Comments | Posted May 31, 2016 | 11:49 AM

The TILA-RESPA Integrated Disclosure Rule (TRID), in development by the Consumer Financial Protection Bureau (CFPB) for several years, became effective October 3, 2015. One of its major purposes was to help borrowers understand and cope with the deluge of documents they must read and sign prior to closing on a...

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3 Decisions Seniors Must Make Before Selecting a HECM Reverse Mortgage

(0) Comments | Posted May 23, 2016 | 11:30 AM

Every senior considering a reverse mortgage must make 3 decisions. The first applies to draw options - the combination of upfront cash, monthly payment and credit line that best meet the borrower's needs. I have written about this in the past and will not discuss it further here. While it...

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Assuring Price Integrity In a Dysfunctional Market: Introducing the HECM Reverse Mortgage Price Checker

(0) Comments | Posted May 8, 2016 | 1:01 PM

You are a senior who finds an advertisement for reverse mortgages appealing, except that you don't trust ads to tell the whole truth about anything. You have a well-justified fear that if you respond to the ad, a glib sales person will take over the process, perhaps seducing you into...

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Becoming a Homeowner When You Don't Currently Qualify For a Mortgage

(0) Comments | Posted May 3, 2016 | 11:42 AM

Lease-to-own contracts (LTOs) and land contracts (LCs) are different legal ways to transfer occupancy of a property from an existing owner who does not want to occupy it to someone else who does, but who cannot qualify now for the financing required to purchase it outright. Both LTOs and LCs...

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Confronting the Three HECM Reverse Mortgage Decisions

(0) Comments | Posted April 25, 2016 | 7:15 PM

This article describes the three major decisions that must be made in taking out a HECM reverse mortgage. The purpose is to alert potential borrowers to the information they will need to make the best decisions possible, and where to get it. A second purpose is to help those who...

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Payday Loans: The Worst Abuse Is Not Regulated

(3) Comments | Posted April 20, 2016 | 10:50 PM

Hardly a day goes by when my email inbox does not contain an offer to lend me $1,000 or so, no questions asked. The internet is a cost-effective way of identifying and soliciting potential clients for payday loans. Potentially, it could also be a way to regulate the worst abuse...

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Should You Take a Reverse Mortgage Now, or Would It Be Better to Wait? (When Does 'Watchful Waiting' Become Procrastination?)

(6) Comments | Posted April 11, 2016 | 6:27 PM

One of the important ways in which reverse mortgages differ from forward mortgages is the difference in the urgency to proceed. A prospective home buyer who needs a mortgage to make the purchase is under the gun to have the mortgage approved and fully processed before the sale date. In...

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Shift Control of Appraisals to Mortgage Borrowers: Some Further Thoughts

(3) Comments | Posted April 6, 2016 | 1:30 PM

In our current housing finance system, appraisals are issued in the name of the lender to whom a prospective borrower has applied for a loan, and it is not transferable to another lender. In last week's article, I argued that mortgage borrowers who paid for appraisals should own...

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Proposal: Shift Control of Appraisals to Mortgage Borrowers

(0) Comments | Posted March 24, 2016 | 10:48 PM

There are two ways to make the home loan market much more efficient by empowering borrowers. The first is to authorize borrowers to order their own appraisals. The second (considered next week) is to eliminate misleading features of the Annual Percentage Rate (APR).

Appraisals in the Current System


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Will a HECM Reverse Mortgage Leave Nothing for My Heirs?

(0) Comments | Posted March 22, 2016 | 10:34 PM

That seems to be a fear of many seniors, who are caught in a conflict between wanting to provide a bequest to their family when they die, and wanting to enhance their own lives in the meantime. The fact is, however, that the HECM program is designed to serve both...

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5 Ways a HECM Reverse Mortgage Can Ease the Retirement of Homeowners

(0) Comments | Posted March 21, 2016 | 12:52 PM

First Way: Use a HECM to Pay Off an Existing Mortgage Carrying a Monthly Payment

Many homeowners today choose to retire, or are obliged to, before they have fully paid off their mortgage. With their income reduced, the required monthly mortgage payment can become heavily burdensome....

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Mortgage Repayment: Questions About Weird Tricks For Paying Down the Balance Faster (Fourth of a Series)

(0) Comments | Posted March 10, 2016 | 11:29 AM

The phrase "weird trick" seems to have great sales appeal, judging from the frequency with which it appears in my in-box. I see weird tricks for lowering blood pressure, losing weight, improving sexual prowess, reversing diabetes, and accelerating the pay-down of a mortgage balance. This last group of tricks I...

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Paying Off Your Mortgage Faster: Questions About Systematic Extra Payment Plans (Third of a Series)

(0) Comments | Posted March 1, 2016 | 11:43 AM

For many borrowers, it is easier to accelerate the pay down of a mortgage balance if the process of making extra payments is routinized. Then the extra payments become a habit. The questions posed below apply to plans of this sort.

Q: What is a biweekly mortgage and how does...

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