The Case For Lots of Thought

There’s no shortage of published and posted financial analysis and commentary, much of it less valuable than dust or dog hair. A bright exception is Malcolm Berko, a curmudgeon who faithfully fails to fall in line.

Berko appears in a number of newspapers and you can find him online as well. I like him because he writes well, thinks clearly, plainly tells investors what’s up and what’s down and has no hesitation when it comes time to criticize corporate leaders who have screwed up their companies.

Oh yes, there’s also the little matter of a spat with Wall Street because he often writes columns which are unflattering. Continuing in that tradition, if you want to read a remarkable write-up of the Madoff mess, take a look at Financial watchdog looks more like lapdog in the January 14th issue of the Joliet Herald News.

While I am against columnist worship because no one, including this writer, is right all the time, Berko is right a lot of the time and because of that I was interested to discover that he has a reverse annuity mortgage, or RAM. As he tells readers:

“I probably know more about RAMs,” he says in the Kankakee Daily Journal, “than most RAM experts because I spent over six months reading hundreds of articles, interviewing a dozen RAM salespeople, talking to some RAM specialists at the U.S. Department of Housing and Urban Development, and researching 21 of the hundreds of mortgage companies that promote these things. I probably did this to excess. But last year I signed pages and pages of papers putting the equity in my house to work for my wife and me. Now, we get a tax-free check every month for $1,757.92.”

Now this is interesting: One of the brightest financial people around has a reverse mortgage. Not only that, he did it the right way.

Not everyone has the ability to do what Berko did in terms of research, but he surely has the right idea. He took his time — six months — before making a decision. He spoke to lots of people. He got contrasting views. He spoke to more than one salesman. He read.

Berko’s approach is precisely what we’ve advocated since this blog was started — and probably why this blog gets huge amounts of traffic. If you want a reverse mortgage that’s great. They work for some people, they don’t work for others and you need to know the difference. Because all people are different, the decision you make and what’s right for you may not be right for the next person. That’s okay. It only matters that you make the choice which is best for you.

One suggestion we have which is not mentioned by Berko is that many prospective borrowers will benefit enormously by using an attorney who specializes in elder law.

For the full story, see: Malcolm Berko — Take time to research RAM, the Kankakee Daily Journal, Jan. 26th.

This entry was posted on Thursday, January 29th, 2009 at 3:18 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.