“What do we know about this shady company . . .”
Gawker didn’t do the research, and jumped to a conclusion all in one sentence.
People wonder why nobody buys newspapers. Now these tools run internet based rags. You can’t even GIVE propaganda away.
As for Thompson, I admit having the same strange feeling. There is a MASSIVE demand for RM’s to back securities based on them. These securities are selling like hotcakes.
For me, this market for RM’s is looking bubblish. The point on which these RM’s pivot is the appraisal of the underlying asset - the home.
A veteran in their home for 40 years, that bought for $25,000 (2,500 sf) is probably being offered a LOT less than what they would have 6 years ago to be sure. They are probably being offered less than what the market will bear as well.
Bank sits on fully paid off assets until the market recovers. The veteran makes $175,000 on a $200K RM, but in reality the bank probably makes another $50K to $100K in future equity on the asset. The geezer, they figure, would never realize that in this market. Since the bank will outlive the geezer, the bank vultures the extra 100 kilobucks.
Who loses? The estate, probably. Maybe the kids that have been footing the bills.
Truly, RM’s are EXACTLY like taking candy from babies at this point. Every time the housing market falls, the assets the geezers are sitting on go up in value to the bank.
More than that, the banks making the RM’s are picking up the assets from failed banks MINUS the bad loans, which are being picked up by the taxpayer (the inheritors of geezers estate). The big banks are being turned into absolute monsters right now in all of this. It is ALL UPSIDE for them. Community banks are getting killed.
I agree with your statements regarding Reverse Mortgages (RM) in your post #30.
I am not sure how they work. Lets say I own my home outright and its worth 100 grand in todays market.
Thanks in advance