What changed the mind of one Chicago Tribune Columnist?
It is admirable to have strongly-held beliefs. It is even more laudable when one changes their position based on new facts and insight. That’s exactly what happened for one Chicago Tribune financial columnist.
“My views on reverse mortgages have become somewhat more favorable”. This introductory quote leads the Tribune’s recent article “Reverse Mortgages Have Improved, but the Buyer Still must beware”. Like many other financial professionals, columnist Elliot Raphaelson believed that reverse mortgages should only be used as a last resort. A belief that was often codified in financial planning organizations like FINRA, which later removed this phrase from their advisories.
Raphaelson fairly points out a historic and reputation-challenging problem, that many individuals…
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1 Comment
It was astonishing to read the following: “Second, more lenders now offer them with … more attractive line-of-credit options.” Raphaelson then goes on to say: “Third, with a reverse mortgage your credit line can increase over time. (The lower the interest rate, the higher the potential increase.) Shelley Giordano, author of “What’s the Deal with Reverse Mortgages” (People Tested Media), does an excellent job explaining this.”
So what happens when Mr. Raphaleson finds out that lenders are not offering more attractive line-of-credit options. He cannot even describe how the line of credit increases. Worse he does not realize that Shelley was only discussing HECMs at that point. What happens when he realizes that getting the highest available proceeds for a HECM may not provide the highest growth. After all in the middle of a paragraph on growth he states: “(The lower the interest rate, the higher the potential increase.)”
So in stating “my views on reverse mortgages have become somewhat more favorable,” will his views change when he finds out that some of the ideas he expressed are wrong? There is far too much wiggle room to think of Raphaelson as a strong friend of the industry just yet.