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Hecm

The Tontine: A 17th Century Solution to a 21st Century Problem

Jack M. Guttentag | Posted 07.25.2015 | Business
Jack M. Guttentag

The tontine is an investment scheme where each of a group of participants pays a specified sum into a fund and receives a pro rata share of the income generated by the fund, but when a participant dies their share is divided among those remaining. As the number of participants dwindles, those remaining receive increasingly large distributions.

St. Louis Couple Uses HECM Mortgage To Buy Dream Home In Florida

Buck Wargo | Posted 06.28.2015 | Fifty
Buck Wargo

Andy and Beatrice Hollimon had endured Midwest winters for decades, and it was time to fulfill their dream of moving south.

Reflections on Mandatory Counseling

Jack M. Guttentag | Posted 06.13.2015 | Business
Jack M. Guttentag

I have written many articles on regulatory prohibitions and mandatory disclosures in the mortgage market, most of it critical, but this is my first look at mandatory counseling. Except for reverse mortgages, it has not been much used until recently.

Why Small Home Mortgage Loans Are Hard to Find

Jack M. Guttentag | Posted 05.20.2015 | Money
Jack M. Guttentag

Providing small mortgage loans at non-subsidized prices affordable to the borrower has always been a challenge. The core problem is that the high cost of originating and servicing a mortgage loan is no smaller for a small loan than for a large one, but there's more to it.

Reverse Mortgage Prices and Closing Costs: A Look at the Options

Jack M. Guttentag | Posted 06.25.2015 | Business
Jack M. Guttentag

Senior homeowners looking to shop the HECM reverse mortgage market for the best price, meaning the lowest interest rate and origination fee, have a major problem. Unlike the standard mortgage market where price data are available from many sources (including third party multi-lender sites), in the reverse mortgage market prices are hard to find.

After March 2, Reverse Mortgage Borrowers Will Have to Prove They Are Not Deadbeats

Jack M. Guttentag | Posted 03.27.2015 | Business
Jack M. Guttentag

Applicants with plenty of equity in their homes might find that the fully-funded Set-Aside imposes no burden on them at all, in which case the underwriting costs could be avoided. There is no reason why lenders and borrowers should not have that option.

Transitioning From a Standard Mortgage to a Reverse Mortgage

Jack M. Guttentag | Posted 03.01.2015 | Business
Jack M. Guttentag

In my father's generation, very few people still had a mortgage to pay when they reached retirement age. Now it is common. But retired homeowners may now have an option my father did not have.

To Avoid Outliving Your Money, Take a HECM Reverse Mortgage Before Interest Rates Rise

Jack M. Guttentag | Posted 02.11.2015 | Business
Jack M. Guttentag

This use of the HECM reverse mortgage program as a type of insurance policy employs the credit line feature of the program. The senior uses her borrowing power to draw the largest line available, and lets the line sit unused until she needs it.

Don't Expect Much From Unregulated Regulators

Jack M. Guttentag | Posted 11.11.2014 | Business
Jack M. Guttentag

The seeds of this article were planted in my brain some 30-odd years ago, when I did a consulting project for HUD, for which they contracted to pay me...

Shoud Seniors Buying a House Do It With a Reverse Mortgage?

Jack M. Guttentag | Posted 11.11.2014 | Business
Jack M. Guttentag

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.

A New Challenge to the HECM Reverse Mortgage Program

Jack M. Guttentag | Posted 11.11.2014 | Business
Jack M. Guttentag

The United States today faces a retirement funds crisis: a rapidly growing number of persons who are retiring without the financial capacity to support themselves during ever-increasing life spans.

When to Reject a HECM Reverse Mortgage, and When to Consider One

Jack M. Guttentag | Posted 11.11.2014 | Money
Jack M. Guttentag

Some seniors don't qualify for a reverse mortgage, either because they are not old enough (you must be at least 62), or because the difference between...

Breaking the Logjam on HECM Reverse Mortgages (Part II)

Jack M. Guttentag | Posted 11.11.2014 | Business
Jack M. Guttentag

There is another log contributing to the HECM logjam that is more formidable. It is a poorly functioning market, with little price competition and no protection against "lock abuse" -- an inflated price after the senior is committed to the transaction.

The HECM Reverse Mortgage Program Gets a Makeover

Jack M. Guttentag | Posted 11.11.2014 | Business
Jack M. Guttentag

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.

Using a Reverse Mortgage to Avoid Impoverishment

Jack M. Guttentag | Posted 11.11.2014 | Business
Jack M. Guttentag

Nobody wants to spend their twilight years hoping they die before reaching the point of impoverishment.