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EPISODE #757
More layoffs are expected in February and March
One lender’s recent filings indicate that more employees will be laid off in February and March.
Other Stories:
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[Reverse Mortgage Daily] HECM counseling agency shuts down reverse info center.
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[San Francisco Gate]Â In a down market a reverse mortgage replaces portfolio withdrawals
1 Comment
That is an interesting financial planning story but proves nothing. It is a plan and plans have a strong tendency to change over time.
It seems at least some of the portfolio, if not all. Is in a taxable retirement plan since the plan is subject to RMDs and thus the RMDs are subject to ordinary income tax rates. So what is the marginal income tax rates (federal and California) in this case?
Since the product is proprietary and the rate is adjustable, what was the margin and is the index the one year CMT? In the midst of the atmospheric rivers hitting California and a pending El Nino, are home values holding up? This is not a HECM and thus its freeze, reduction, and termination rules related to the line of credit are far more reflective of a HELOC than a HECM.
Will the appreciation on the whole house outstrip the compounding interest on the UPB. Remember the models appearing in the articles in the last decade plus on this strategy focused mainly on HECM Savers not adjustable rate proprietary reverse mortgage products with starting interest rates in excess of the S & P 500 historical growth rate. It seems we are lost in the trees and can no longer see the forest due to the trees.
Early last year when testing some of the math calcs in a then recent article, the authors did not seem to understand that reverse mortgages compound monthly rather than annually. I would love to see the calcs backing up the claims made in the article but that seems doubtful.