SOURCE: Mortgage Professor LLC

Mortgage Professor LLC

August 31, 2015 06:01 ET

Mortgage Professor Unveils the Kosher HECM Reverse Mortgage(SM)

PHILADELPHIA, PA--(Marketwired - Aug 31, 2015) - Effective immediately, homeowners aged 62 or over can obtain a Kosher HECM Reverse Mortgage through

The standard HECM reverse mortgage is a beautifully designed financial instrument that can make life better for millions of senior homeowners, but a dysfunctional delivery system has discouraged many seniors from taking advantage of it. The Kosher designation distinguishes HECMs delivered through a new channel, which has been under development for several years, designed to eliminate the dysfunctional features of the existing channel. The major differences are as follows:

Option Optimization Calculator: HECMs offer seniors a range of options for drawing funds (such as a monthly payment, upfront cash draw, or unused credit line) which introduces complexity and a danger that the senior may make poor choices. The Kosher calculator allows a senior to see exactly what the options are, and the changes in the senior's future finances that will result from any combination of options taken now.

Option Support by Disinterested Experts: Because some seniors cannot navigate the Kosher calculator on their own, a group of "option experts" is available to offer seniors free and disinterested help in assessing Kosher HECM options when the seniors are in an exploration stage.

Competitive Pricing: Lenders who are prepared to price HECMs competitively post their interest rates and origination fees on, where seniors can select the one quoting the best price on their desired options package. Since the price includes both an interest rate and an origination fee, the Kosher calculator shows the rate/fee combination that generates the lowest cost over a future period specified by the senior.

Lock Price Protection: The Kosher network pricing system assures that the price that is locked shortly before the closing is identical to the price quoted to a new shopper. The senior can verify the lock price on the Kosher calculator.

Availability of Low-Cost or No-Cost Options: The lenders posting prices on the Kosher network offer multiple combinations of interest rate and upfront origination fees. This meets the needs of seniors with different expectations regarding how long they will have the reverse mortgage -- including seniors with short time horizons who seek HECMs with low or no upfront costs.

Availability of Ombudsman: The built-in protections notwithstanding, something may go wrong. If it does, the Mortgage Professor or his designee will act as ombudsman for the senior.

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 1996.

Contact Information

  • For more information:
    Jack Pritchard
    for The Mortgage Professor