The “Mortgage Professor,” otherwise known Jack Guttentag, finance professor emeritus at Wharton School of Business, has made a foray into reverse mortgages via an online shopping resource for senior borrowers seeking reverse mortgage product information.
Guttentag, who has written extensively about reverse mortgages and has long advocated their use as a retirement solution, has developed an online calculator that compares different reverse mortgage products—by lender—for online shoppers. The site will receive a referral fee charged to the loan provider selected by the senior for the work done in helping the senior understand the product that best meets his or her needs.
“After [seniors] learn the rudiments, they may not understand the [reverse mortgage] implications down the road. One thing we focused on is showing them what is going to happen depending on the selection they are going to make,” Guttentag told RMD. “We show what happens to debt and the credit line for unused borrowing power… it’s not understood and is a very powerful feature when conditions can be different down the road.”
While the site does not originate mortgages, it allows users to enter information and then select different calculators based on all of the different product options available. For example, users can see combined product choices such as Maximum Credit Line With Specified Monthly Tenure Payment or Maximum Tenure Payment with Specified Credit Line.
The calculator incorporates the best pricing available from the lenders it partners with. Currently, Guttentag is partnering with four lenders with others in process, he tells RMD.
The charge to the lenders, if selected, is $150.
“We have the only facility that allows seniors to compare different HECM options, including option combination such as cash withdrawal plus credit line. In making such comparisons, seniors can see not only the transaction features but also the implications for future changes in debt, credit lines, and modified credit lines – the latter are the lines a borrower can switch into from a payment plan,” Guttentag says. “We are constantly tweaking the program to make it simpler to use, but the fact is that HECMs are complicated and many if not most seniors using the program will need help, which we are there to provide.”
Editor’s note: The Mortgage Professor does not sell leads. Rather, the site charges the one loan provider selected by the senior for the work done in helping the senior understand, assess and select the HECM option that best meets their needs.
Written by Elizabeth Ecker