SOURCE: Mortgage Professor LLC

Mortgage Professor LLC

July 21, 2015 06:00 ET

The Mortgage Professor's New Approach to Counseling Seniors on the Benefits and Costs of Reverse Mortgages

PHILADELPHIA, PA--(Marketwired - Jul 21, 2015) - Many senior homeowners with unmet financial needs ignore reverse mortgages as a fund source because of their complexity, and because they know that the mortgage loan officers on whom they would depend for information are paid on commission.

Dr. Jack Guttentag, Chairman of The Mortgage Professor, has designed a new counseling approach that gives seniors the information they need while eliminating the counselor's financial interest in the outcome. 

According to Dr. Guttentag, the HECM Reverse Mortgage is one of the trickiest of all financial instruments, creating the greatest need for effective counseling. HECMs are already subject to mandatory counseling but Guttentag claims that it is largely misdirected. "It protects consumers only against mistakes of commission -- taking a reverse mortgage when they would do better without one, which is a rare event. The big source of mistakes, affecting untold millions of seniors, are mistakes of omission. This is when seniors who might benefit from a reverse mortgage do nothing, for a variety of reasons including the fear of being exploited. "

His remedy is a counseling facility directed to mistakes of omission by seniors who don't know whether a reverse mortgage would meet their needs or not. Seniors can make an appointment for a free counseling session at The counselors are loan officers and mortgage brokers who use The Mortgage Professor's state-of-the-art HECM calculator to identify the consumer's options in a HECM transaction. No salesmanship is involved because the counselors are not licensed to originate HECMs for the seniors assigned to them. The counselor has no financial interest in whether the senior borrows or not.

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