Is All Debt Bad? Dan Hultquist

Part 2

Is all debt bad? An interview with Dan Hultquist

Is all debt bad or are there times when debt can work to your advantage? Also, the pressures today’s retirees face.

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James McCarron September 27, 2021 at 5:45 am

Audio poor, difficult to understand

Reply September 27, 2021 at 1:53 pm

It is clear that not all debt is bad even Dave Ramsey modifies his position when it comes to affordable mortgages as does Suze Orman.

Dave Ramsey is Dave Ramsey and Suze Orman is Suze Orman. Neither are all that well educated in financial matters. Both have ardent followers and both are overly aggressive.

Right now HUD’s portfolio of HECMs including those in assignment is shrinking. Since 2013, it has shrunk by over 20%. Proprietary reverse mortgages have yet to catch on to any degree at all. Further the average age of HECMs is increasing. Our overemphasis on refinances has resulted in slightly downward secular stagnation in the count of Traditional HECMs (in older terms, HECM Refinances) and H4Ps on a national basis. To the unbiased outside observer, we are a shrinking industry and even to some, appear to be a dying industry. Even our long-time industry investors are expressing concerns.

Characteristically some in leadership are trying to counter the dying image by exaggerating the potential size of the HECM endorsements for this calendar year. Some have estimated that the total will be 65,000 endorsements. Where that estimate is coming from is not clear. So far through August 2021, there are less than 34,000 HECM total endorsements BUT about 40% of those are HECM (or in older terms, HECM-to- HECM) Refinances. To get to 65,000 by the end of the year will require over 31,000 endorsements in this month (September 2021) and the following three months. We have not experienced a total of over 31,000 HECM endorsements for any four consecutive month period since December 2009. The average total endorsements for the first eight months of this calendar year is less than 4.200 HECM endorsements per month. Based on the HECM endorsement performance so far this year, getting past 52,000 total HECM endorsements for this calendar year seems unlikely at best. So why estimate total HECM endorsements at 25% higher than can be reasonably exected? What has been or will be gained by such exaggerations?

When it looks like the industry will produce less than 32,000 new borrowers this calendar year, why are we spending so much energy attacking one detractor? Would we not be much better off trying to demonstrate how reverse mortgages solve the cash flow needs of senior homeowners in retirement rather than stirring up our detractors? While I admire the efforts of Harlan and Dan, continued attacks against Dave Ramsey, in particular, could prove to be VERY, VERY counterproductive.


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