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FINRA Removes ‘Last Resort’ from Investor Alert


January 20, 2014

The Funding Longevity Task Force convened their second quarterly meeting at the Security 1 Lending corporate offices in San Diego last week.  The stated goal of the task force is to eliminate reverse mortgage misconceptions among financial planners and regulators in order to benefit retired homeowners and the entire reverse mortgage industry.

The Task Force participants include Rita Cheng, CFP®, CEO of Blue Ocean Global Wealth, Barry Sacks, Ph.D., J.D, former physicist and a tax and pension lawyer, John Salter, Ph.D., CFP®, Associate Professor of Financial Planning Texas Tech University , Sandra Timmermann, Ed.D., former Director of the Mature Market Institute, and Shelley Giordano, Director of Business Development for Security 1 Lending. The Task Force reviewed recent findings from investigators including Gerald Wagner, Ph.D., Jack M. Guttentag, Professor of Finance Emeritus at the Wharton School of the University, and  Shaun Pfeiffer, Ph.D., an associate professor at Edinboro University of Pennsylvania. As academic investigation continues, the Task Force observed, there is growing proof that housing wealth, used conservatively early in retirement, sustains cash flow survival.

reverse mortgage news

The Task Force noted that, on the basis of recent research, FINRA has removed a statement from their published investor alert that a reverse mortgage should be used as a product of “last resort.” FINRA is a self-regulatory organization that performs financial regulation of member brokerage firms and exchange markets. “I am pleased that FINRA has made this important change to their Investor Alert, but there is still much work to be done.  The Task Force is now looking to engage the industry’s compliance officers and software companies to encourage the use of housing wealth as a financial planning tool, all  based on the solid research that has been done”, said Alex Pistone, SVP of Security 1 Lending.

The Task Force assembled by Security 1 Lending has pledged to continue its outreach, recognizing that research consistently proves the value of using a reverse mortgage as an integral part in the overall financial plan for many American retirees.

About Security 1 Lending

Security 1 Lending is the Retail Lending division of Reverse Mortgage Solutions, Inc. (RMS), a wholly owned subsidiary of Walter Investment Management Corp., which operates a coast-to-coast origination, servicing and issuing business. For more information on Security 1 Lending, visit for more information about RMS, visit

About Walter Investment Management Corp.

Walter Investment Management Corp. is an asset manager, mortgage servicer and originator focused on finding solutions for consumers and credit owners. Based in Tampa, Fla., the Company has over 6,200 employees and services a diverse loan portfolio. For more information about Walter Investment Management Corp., please visit the Company’s website at



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  1. Congratulations to the task force!!

    While the research is helpful and brings reason to the discussion of reverse mortgages, I appreciate what Torrey says as to raising the bar so the members of the financial advisor industry will view HECMs as a sound financial product by which their clients can manage longevity. While we are beginning to see success there is still a long way to go.

    None of us can be satisfied until HECMs are viewed as a first tier product to be considered in the accumulation, growth, and decumulation phases of retirement planning. What we need to understand is that not everyone agrees with some of the assumptions used in current research but that is not to say this research is faulty, not valuable and not extremely helpful in demonstrating that within certain ranges and circumstances, HECMs are a great answer for the cash flow needs of the mass affluent over 62 in light of ever increasing longevity. As Barry Sacks says, the mass affluent are those who are not quite affluent which is the vast majority of those over 62.

    HECMs are not mortgages of last resort. In fact when used in that matter, many times that is when HECMs are still effective but the least effective. As in business, in retiremen, cash is king. While income is something which brings cash over time, the earnings period is not always guaranteed and the cash is not always there when a qualified HECM prospect needs it. Not so with HECM proceeds to the extent that the HECM still has proceeds available.

    Shannon, thanks for pointing out this very significant development.

  2. Is anyone else in the industry questioning how Security One is always gathering that same task force together time and time again. Why isn’t any other company trying to build similar relationships?

    • Wealthone,

      There are others cultivating these relationships but none seems to have taken the direction that S1L has.

  3. I went ot the FINRA website to see if I could find this information and I did not see this language change. Is there a publication showing this information?

    Thank you:

    Donna Harrington
    NMLS # 506606

    • Donna,

      Please quote what you did find. Thanks.

  4. if you are current the bank will not do a short sale with you. That is the catch. You have to be benhid on your mortgage, further dropping your credit score in order to do a short sale which will drop your score further.if you are buying a house in the new state you will have difficulties getting a mortgage if you cant prove you can pay both notes.the drop in values has severly impacted the ability of people to simply pick up and move. We are looking at until at least 2011 before we have a shot at turning around. Probably longer.

    • Wealthone,

      I think you need to reread the document. Here are two key sentences at its conclusion: “Reverse mortgages can be a useful tool for certain older Americans who might otherwise face losing their homes. But for anyone else, they are an expensive option that may prematurely deplete your home equity.”

      That language is about as close as one can describe a mortgage as a loan of last resort without right out calling it such.

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