FINRA Changes Its Mind on Reverse Mortgages
Forbes published an article in the May 2019 issue that highlighted removing a negative connotation on the usage of reverse mortgages. FINRA’s report, “Reverse Mortgages: Avoiding a Reversal of Fortune” removed the term “a reverse mortgage as a last resort” from the report.
Barry Sacks authored a research study on the usage of a reverse mortgage line of credit in coordination with systemic portfolio withdrawals specifically as a hedge against the sequence of returns risk. After Sacks spoke with FINRA and going over his case study which was run through 10,000 Monte Carlo simulations, FINRA agreed to remove the negative connotation.
After reviewing with their compliance departments, several financial planning firms, have followed FINRA and have now opened the door to include the reverse mortgage line of credit as a possible component when speaking with long range financial planning clients.
To read the Forbes article click here.
This featured use of the reverse mortgage line of credit is used by retirees or future retirees who may or may not have a healthy portfolio but may not already have a source of funds not in the market they can access in down market years. It can serve as an insurance policy of sorts for a portfolio.
If you are a financial planner, we can have a brief conversation on this topic, I know the ins and outs of this product and would love the opportunity for a 15 minute conversation to show you the actual case study Mr. Sacks showed FINRA. Or if you are an consumer and would a copy of the article, I can send it to you as well.
All the best,
Kevin Walton, C2 Reverse.
Cell: 805-276-1942 NMLS 245923 DRE# 01453270 www.californiareversemortgage.bizCorporate: 858-312-4900 // Toll Free: 800-506-0632 // Mobile: 805-276-1942
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This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker # 01821025: NMLS # 135622. Loan approval is not guaranteed and is subject to lender review of information. Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender. The services referred to herein are not available to persons located outside the state of California.