“Anytime I had a conversation like this, I had to say at the beginning that I have $150,000 in Longbridge,” she said. “I had to do it all the time. I’m just as happy to be out, for my academic life.”
This article was provided by Bloomberg News.
How America's Most Hated Home Loan Is Staging A Comeback
March 13, 2019
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This disdainful article is misguided on several fronts. Why shouldn't a useful retirement tool such as a reverse mortgage (RM) make a comeback? Several protections have been added to the product--such that many seniors don't even qualify anymore--to make an illiquid asset liquid for the senior homeowner. I originate RMs and I can cite case after case where the emotional and financial relief expressed by the senior and his/her family upon closing was palpable. If you're independently wealthy and you wish to leave an asset intact to your heirs, you can safely ignore the benefits of an RM. Easy peasy. The practical reality is, there's a retirement crisis in this country. Many seniors are house rich and cash poor. A paid-in-full house is an illiquid asset until sold and that's all. At the very least, I'd recommend an RM line of credit, which accrues no interest until it's used. Is there a cost to put a line of credit in place? Yes; that's the cost of turning an illiquid asset into a liquid asset with no subsequent monthly payments required. I suspect that the disdain displayed in this article comes from the fact that the proceeds of an RM can't be used to purchase the products offered by Financial Advisors. When and if that changes, we'll see Financial Advisors singing the praises of RMs. Guaranteed.