A great presentation on HECM mortgage products for consumers, realtors and financial planners. Baby boomers need alternatives and they need them now. Call me to discuss if you are in Miami Florida
This document provides an overview of reverse mortgages, including what they are, why someone may want one, eligibility requirements, how much can be borrowed, payment options, interest rates, the loan repayment process, and the steps involved in getting a reverse mortgage. Key points include:
- A reverse mortgage allows homeowners aged 62+ to borrow against the equity in their home and receive payments instead of making them.
- Funds can be used for any purpose and are not considered income for programs like Social Security.
- Maximum loan amounts depend on the home value, age of borrowers, and interest rate.
- Borrowers have options to receive funds as a lump sum, monthly payments, line
This document provides an overview of reverse mortgages. It explains that a reverse mortgage allows homeowners aged 62 or older to borrow against their home equity and receive payments instead of making payments. The document outlines eligibility requirements, how much can be borrowed, payment options, interest rates, and the loan repayment process. It also summarizes the steps involved in obtaining a reverse mortgage, including education, counseling, application, processing, underwriting, and closing. Common questions about reverse mortgages are addressed.
This document provides an overview and analysis of reverse mortgage loans in the United States. It discusses the history and key features of reverse mortgages, including eligibility criteria, loan disbursement options, and how the amount that can be borrowed is determined based on the homeowner's age and interest rates. The document also analyzes the various costs associated with reverse mortgages, such as origination fees, mortgage insurance premiums, interest expense, and servicing fees. It provides examples of how these costs are calculated and can accumulate over the life of the loan.
fannie mae Discussion of Credit Book of Business 2006finance6
The document discusses Fannie Mae's single-family mortgage credit book of business as of June 30, 2007. It characterized the book as having a historically disciplined approach to risk management and being highly diversified by origination date, geography, and product type. It also discussed Fannie Mae's exposure to Alt-A loans, which represented 12% of the single-family book, and subprime loans, which represented 0.2% of the book. The document noted that credit losses were expected to increase in 2007 from very low levels in recent years due to economic and housing market challenges.
The document summarizes the Main Street Lending Program (MSLP) established by the Federal Reserve to provide support to small and medium-sized businesses during the COVID-19 pandemic. It describes the three types of loans offered through the program - the New Loan Facility, Priority Loan Facility, and Expanded Loan Facility. It provides details on loan sizes, terms, fees, and the role of the Federal Reserve and eligible lenders. It also outlines restrictions on borrower compensation, stock repurchases, dividends, debt repayment, and use of funds to qualify for the program.
Dr Michael Kumhof: "The Chicago Plan Revisited"Global Utmaning
The document summarizes the key aspects of the Chicago Plan, which proposed separating the monetary and credit functions of banking by requiring banks to back deposits 100% by public reserves. This would eliminate banks' ability to create money through lending and make money creation and issuance a public function. The Chicago Plan is argued to have six main advantages: 1) reducing public and private debt levels, 2) eliminating bank runs, 3) boosting economic output up to 10%, 4) better controlling bank-lending driven business cycles, 5) avoiding liquidity traps, and 6) not causing inflation according to monetary theory and history.
The document discusses preparing for retirement with a variable annuity product called the Northwestern Mutual Select Variable Annuity. It outlines key features like tax-deferred growth, guaranteed death benefits, and options for guaranteed retirement income. Concerns around running out of money, health costs, and inflation in retirement are addressed through the annuity's features and investment options.
The document summarizes the key aspects of the Chicago Plan, an economic reform proposal from the 1930s. It proposes:
1) Separating money creation and credit functions of banking so that deposits are fully backed by central bank reserves.
2) Credit can no longer be created by banks through lending but must be funded by other means like loans from the treasury or equity.
3) This transition dramatically reduces public and private debt levels while maintaining the money supply, preventing inflation. The Chicago Plan aims to create a more stable financial system by limiting bank-driven credit booms and eliminating bank runs.
This document provides an overview of reverse mortgages, including what they are, why someone may want one, eligibility requirements, how much can be borrowed, payment options, interest rates, the loan repayment process, and the steps involved in getting a reverse mortgage. Key points include:
- A reverse mortgage allows homeowners aged 62+ to borrow against the equity in their home and receive payments instead of making them.
- Funds can be used for any purpose and are not considered income for programs like Social Security.
- Maximum loan amounts depend on the home value, age of borrowers, and interest rate.
- Borrowers have options to receive funds as a lump sum, monthly payments, line
This document provides an overview of reverse mortgages. It explains that a reverse mortgage allows homeowners aged 62 or older to borrow against their home equity and receive payments instead of making payments. The document outlines eligibility requirements, how much can be borrowed, payment options, interest rates, and the loan repayment process. It also summarizes the steps involved in obtaining a reverse mortgage, including education, counseling, application, processing, underwriting, and closing. Common questions about reverse mortgages are addressed.
This document provides an overview and analysis of reverse mortgage loans in the United States. It discusses the history and key features of reverse mortgages, including eligibility criteria, loan disbursement options, and how the amount that can be borrowed is determined based on the homeowner's age and interest rates. The document also analyzes the various costs associated with reverse mortgages, such as origination fees, mortgage insurance premiums, interest expense, and servicing fees. It provides examples of how these costs are calculated and can accumulate over the life of the loan.
fannie mae Discussion of Credit Book of Business 2006finance6
The document discusses Fannie Mae's single-family mortgage credit book of business as of June 30, 2007. It characterized the book as having a historically disciplined approach to risk management and being highly diversified by origination date, geography, and product type. It also discussed Fannie Mae's exposure to Alt-A loans, which represented 12% of the single-family book, and subprime loans, which represented 0.2% of the book. The document noted that credit losses were expected to increase in 2007 from very low levels in recent years due to economic and housing market challenges.
The document summarizes the Main Street Lending Program (MSLP) established by the Federal Reserve to provide support to small and medium-sized businesses during the COVID-19 pandemic. It describes the three types of loans offered through the program - the New Loan Facility, Priority Loan Facility, and Expanded Loan Facility. It provides details on loan sizes, terms, fees, and the role of the Federal Reserve and eligible lenders. It also outlines restrictions on borrower compensation, stock repurchases, dividends, debt repayment, and use of funds to qualify for the program.
Dr Michael Kumhof: "The Chicago Plan Revisited"Global Utmaning
The document summarizes the key aspects of the Chicago Plan, which proposed separating the monetary and credit functions of banking by requiring banks to back deposits 100% by public reserves. This would eliminate banks' ability to create money through lending and make money creation and issuance a public function. The Chicago Plan is argued to have six main advantages: 1) reducing public and private debt levels, 2) eliminating bank runs, 3) boosting economic output up to 10%, 4) better controlling bank-lending driven business cycles, 5) avoiding liquidity traps, and 6) not causing inflation according to monetary theory and history.
The document discusses preparing for retirement with a variable annuity product called the Northwestern Mutual Select Variable Annuity. It outlines key features like tax-deferred growth, guaranteed death benefits, and options for guaranteed retirement income. Concerns around running out of money, health costs, and inflation in retirement are addressed through the annuity's features and investment options.
The document summarizes the key aspects of the Chicago Plan, an economic reform proposal from the 1930s. It proposes:
1) Separating money creation and credit functions of banking so that deposits are fully backed by central bank reserves.
2) Credit can no longer be created by banks through lending but must be funded by other means like loans from the treasury or equity.
3) This transition dramatically reduces public and private debt levels while maintaining the money supply, preventing inflation. The Chicago Plan aims to create a more stable financial system by limiting bank-driven credit booms and eliminating bank runs.
This document discusses the proposed regulation of leverage in the financial industry following the 2008 financial crisis. It provides background on leverage and how it contributed to the crisis. Specifically, it discusses how the SEC's 2004 rule changes allowing investment banks to calculate their own capital requirements led to significantly higher leverage ratios of 30-40x. This extreme leverage made firms like Lehman Brothers and Bear Stearns unable to withstand the housing market downturn. In response, regulators proposed nearly doubling leverage ratio requirements for banks to prevent future crises. However, the document argues these new rules are too burdensome and will not achieve their aims.
Financial freedom through reverse mortgageProjects Kart
The document discusses reverse mortgages as a tool for financial freedom for senior citizens in India. It notes that housing wealth makes up a large portion of wealth for many elderly Indians and reverse mortgages allow them to access this equity to meet living expenses without having to sell their home. The document covers the concept and workings of reverse mortgages, including eligibility requirements, valuation, risks for lenders and borrowers, and the potential market size in India based on demographics and home ownership rates. It also discusses the objectives and methodology of a research study analyzing awareness and demand for reverse mortgages among Indian seniors.
The document is a presentation about reverse mortgages developed by the National Reverse Mortgage Lenders Association for educational purposes. It discusses what a reverse mortgage is, how it works, recent changes that make it safer and more affordable, and how people are using reverse mortgages to supplement retirement income, pay off debts, defer social security, and afford longer retirements. The presentation aims to help homeowners determine if a reverse mortgage could fit into their retirement plans.
This document provides information about immediate fixed income annuities as a way to guarantee income for life after retirement. It discusses factors like life expectancy, the risks of outliving savings, and how annuities provide guaranteed lifetime income through payout options like life only or joint-survivor. The document also covers taxation implications and factors to consider when evaluating different annuity products and insurance companies.
1. The document provides information about reverse mortgage loans for homeowners aged 62 and older. It explains that a reverse mortgage allows homeowners to convert home equity into tax-free funds without monthly payments as long as they live in the home.
2. The proceeds can be used for any purpose and are disbursed as lump sums, monthly payments, or a line of credit. The maximum loan amount depends on the home value, interest rate, and borrowers' age.
3. Borrowers retain ownership and there are no repayment requirements as long as terms are met, such as paying taxes and insurance. When the last borrower dies or moves out permanently, the loan balance must be repaid.
PROBLEMS AND PROSPECTS OF REVERSE MORTGAGE INRamees Ali
This document discusses reverse mortgages in India. Reverse mortgages allow senior citizens over age 60 to receive periodic payments from a lender using their home as collateral while remaining in their home. The study examines the status and future prospects of reverse mortgages in India, identifies risks associated with them, and analyzes their potential welfare benefits for senior citizens. It reviews National Housing Bank regulations and processes, surveys senior citizens' awareness and opinions, and concludes that reverse mortgages provide an unconventional retirement tool but also carry risks like foreclosure that require safeguards.
The document discusses the benefits of fixed annuities for retirement planning. It notes that retirees face significant financial challenges, including rising healthcare and living costs. Fixed annuities offer guaranteed returns, provide a stream of income for life, and allow for tax-deferred growth. Immediate annuities provide guaranteed lifetime income, while deferred annuities allow for long-term accumulation of assets on a tax-deferred basis before receiving income.
The document discusses net worth and how it is calculated. It defines net worth as assets minus liabilities. Assets are divided into liquid, semi-liquid, and non-liquid categories. Liabilities are divided into short-term and long-term debts. The document also discusses debt-to-equity ratios and strategies for increasing net worth such as higher investment returns, reducing debt, and saving more regularly. Two examples of calculating net worth statements and debt-to-equity ratios for individuals are provided.
This document discusses annuities as safe money products that can help preserve wealth and provide financial growth and secure retirement. It provides information on different types of annuities including fixed annuities, which offer guaranteed minimum interest rates and tax advantages, and variable annuities, which carry investment risk. The document outlines benefits such as tax deferral, death benefits, and guarantees as well as factors to consider like fees, liquidity, and maturity dates when evaluating annuities.
This document is a life insurance policy illustration for a Variable Universal Life Insurance policy for Valued Client. It provides assumptions used in the illustration, including personal details of the client, initial death benefit and premium amounts, investment allocations, charges, and other policy details. The purpose is to show how the underlying investments could affect the policy surrender value and death benefit over time. It also notes that rates of return and values shown are not guaranteed except where clearly labeled.
A Modified Endowment Contract (MEC) is a special type of cash value life insurance
policy that requires extra attention because of the tax laws associated with it. The
federal tax law definition of “life insurance” limits your ability to pay certain high levels
of premiums. Potentially, any insurance policy that accumulates cash value can be
classified as a MEC, either when the policy is issued, or in later years.
Please review my information package explaining how reverse mortgages can help mature adults lead a more productive quality of life. Using a grown credit line that grows over time with no impact to social security or personal income tax liability
The document discusses the benefits of a reverse mortgage for seniors aged 62 and older. A reverse mortgage allows homeowners to convert equity in their home into tax-free cash without having to make monthly payments. Borrowers can use the funds for supplemental income, paying off debts, home repairs, or leaving an inheritance. The loan does not become due until the borrower dies or moves out permanently, and the FHA insures that no debt passes to heirs.
What is the difference between Whole Life and Indexed Universal Life for Reti...Michael Grigsby
I get asked a lot about how Whole Life insurance differs from Indexed Universal Life insurance, particularly when it comes to retirement planning. In this presentation, I note the similarities between these forms of permanent insurance, the differences, and why you might use one instead of the other.
Training for Financial Professionals: Reverse Mortgages & Retirement Plans - ...George Omilan
In addition to paying off mortgages and balancing debt, a Reverse Mortgage can be a great retirement tool. Learn the many retirement planning strategies where a Reverse Mortgage could be an asset. A Tool for Financial Professionals.
The document discusses the benefits of a reverse mortgage line of credit (HECM LOC) for a 62-year-old couple with a $625,500 home and no mortgage. The initial LOC of $266,963 would grow to $509,469 in 10 years and $972,262 in 20 years without any withdrawals. Research from retirement experts argues that a HECM LOC provides flexible access to home equity that can grow over time, acts as insurance if home values decrease, and allows for improved retirement outcomes compared to alternatives like HELOCs. The HECM LOC offers advantages like no monthly payments, an indefinite loan term, and funds that are not reduced or revoked by the lender as long as obligations are
This document discusses the proposed regulation of leverage in the financial industry following the 2008 financial crisis. It provides background on leverage and how it contributed to the crisis. Specifically, it discusses how the SEC's 2004 rule changes allowing investment banks to calculate their own capital requirements led to significantly higher leverage ratios of 30-40x. This extreme leverage made firms like Lehman Brothers and Bear Stearns unable to withstand the housing market downturn. In response, regulators proposed nearly doubling leverage ratio requirements for banks to prevent future crises. However, the document argues these new rules are too burdensome and will not achieve their aims.
Financial freedom through reverse mortgageProjects Kart
The document discusses reverse mortgages as a tool for financial freedom for senior citizens in India. It notes that housing wealth makes up a large portion of wealth for many elderly Indians and reverse mortgages allow them to access this equity to meet living expenses without having to sell their home. The document covers the concept and workings of reverse mortgages, including eligibility requirements, valuation, risks for lenders and borrowers, and the potential market size in India based on demographics and home ownership rates. It also discusses the objectives and methodology of a research study analyzing awareness and demand for reverse mortgages among Indian seniors.
The document is a presentation about reverse mortgages developed by the National Reverse Mortgage Lenders Association for educational purposes. It discusses what a reverse mortgage is, how it works, recent changes that make it safer and more affordable, and how people are using reverse mortgages to supplement retirement income, pay off debts, defer social security, and afford longer retirements. The presentation aims to help homeowners determine if a reverse mortgage could fit into their retirement plans.
This document provides information about immediate fixed income annuities as a way to guarantee income for life after retirement. It discusses factors like life expectancy, the risks of outliving savings, and how annuities provide guaranteed lifetime income through payout options like life only or joint-survivor. The document also covers taxation implications and factors to consider when evaluating different annuity products and insurance companies.
1. The document provides information about reverse mortgage loans for homeowners aged 62 and older. It explains that a reverse mortgage allows homeowners to convert home equity into tax-free funds without monthly payments as long as they live in the home.
2. The proceeds can be used for any purpose and are disbursed as lump sums, monthly payments, or a line of credit. The maximum loan amount depends on the home value, interest rate, and borrowers' age.
3. Borrowers retain ownership and there are no repayment requirements as long as terms are met, such as paying taxes and insurance. When the last borrower dies or moves out permanently, the loan balance must be repaid.
PROBLEMS AND PROSPECTS OF REVERSE MORTGAGE INRamees Ali
This document discusses reverse mortgages in India. Reverse mortgages allow senior citizens over age 60 to receive periodic payments from a lender using their home as collateral while remaining in their home. The study examines the status and future prospects of reverse mortgages in India, identifies risks associated with them, and analyzes their potential welfare benefits for senior citizens. It reviews National Housing Bank regulations and processes, surveys senior citizens' awareness and opinions, and concludes that reverse mortgages provide an unconventional retirement tool but also carry risks like foreclosure that require safeguards.
The document discusses the benefits of fixed annuities for retirement planning. It notes that retirees face significant financial challenges, including rising healthcare and living costs. Fixed annuities offer guaranteed returns, provide a stream of income for life, and allow for tax-deferred growth. Immediate annuities provide guaranteed lifetime income, while deferred annuities allow for long-term accumulation of assets on a tax-deferred basis before receiving income.
The document discusses net worth and how it is calculated. It defines net worth as assets minus liabilities. Assets are divided into liquid, semi-liquid, and non-liquid categories. Liabilities are divided into short-term and long-term debts. The document also discusses debt-to-equity ratios and strategies for increasing net worth such as higher investment returns, reducing debt, and saving more regularly. Two examples of calculating net worth statements and debt-to-equity ratios for individuals are provided.
This document discusses annuities as safe money products that can help preserve wealth and provide financial growth and secure retirement. It provides information on different types of annuities including fixed annuities, which offer guaranteed minimum interest rates and tax advantages, and variable annuities, which carry investment risk. The document outlines benefits such as tax deferral, death benefits, and guarantees as well as factors to consider like fees, liquidity, and maturity dates when evaluating annuities.
This document is a life insurance policy illustration for a Variable Universal Life Insurance policy for Valued Client. It provides assumptions used in the illustration, including personal details of the client, initial death benefit and premium amounts, investment allocations, charges, and other policy details. The purpose is to show how the underlying investments could affect the policy surrender value and death benefit over time. It also notes that rates of return and values shown are not guaranteed except where clearly labeled.
A Modified Endowment Contract (MEC) is a special type of cash value life insurance
policy that requires extra attention because of the tax laws associated with it. The
federal tax law definition of “life insurance” limits your ability to pay certain high levels
of premiums. Potentially, any insurance policy that accumulates cash value can be
classified as a MEC, either when the policy is issued, or in later years.
Please review my information package explaining how reverse mortgages can help mature adults lead a more productive quality of life. Using a grown credit line that grows over time with no impact to social security or personal income tax liability
The document discusses the benefits of a reverse mortgage for seniors aged 62 and older. A reverse mortgage allows homeowners to convert equity in their home into tax-free cash without having to make monthly payments. Borrowers can use the funds for supplemental income, paying off debts, home repairs, or leaving an inheritance. The loan does not become due until the borrower dies or moves out permanently, and the FHA insures that no debt passes to heirs.
What is the difference between Whole Life and Indexed Universal Life for Reti...Michael Grigsby
I get asked a lot about how Whole Life insurance differs from Indexed Universal Life insurance, particularly when it comes to retirement planning. In this presentation, I note the similarities between these forms of permanent insurance, the differences, and why you might use one instead of the other.
Training for Financial Professionals: Reverse Mortgages & Retirement Plans - ...George Omilan
In addition to paying off mortgages and balancing debt, a Reverse Mortgage can be a great retirement tool. Learn the many retirement planning strategies where a Reverse Mortgage could be an asset. A Tool for Financial Professionals.
The document discusses the benefits of a reverse mortgage line of credit (HECM LOC) for a 62-year-old couple with a $625,500 home and no mortgage. The initial LOC of $266,963 would grow to $509,469 in 10 years and $972,262 in 20 years without any withdrawals. Research from retirement experts argues that a HECM LOC provides flexible access to home equity that can grow over time, acts as insurance if home values decrease, and allows for improved retirement outcomes compared to alternatives like HELOCs. The HECM LOC offers advantages like no monthly payments, an indefinite loan term, and funds that are not reduced or revoked by the lender as long as obligations are
A reverse mortgage allows homeowners aged 62 or older to convert equity in their home into tax-free cash without having to make monthly payments. Recent changes have made reverse mortgages safer and more effective for retirement planning by limiting how much equity can be borrowed and providing mortgage insurance. People are using reverse mortgages to pay off existing mortgages, supplement retirement income, finance home renovations for aging in place, and have emergency funds. A reverse mortgage may be suitable for homeowners looking for ways to maximize their retirement savings and income as part of a balanced retirement plan.
In this edition of Return On Investment, we have included information on the following topics:
1. The Importance of Risk Control
2. Are You Nearing the Age of 71?
3. Pension Reform: The CPP is Set to Change
4. Transferring Wealth: Preparing Your Heirs
5. Unclaimed Balances: Are Funds Owed to You?
6. Year-End Tax Planning Considerations
Securing Retirement withHome Equity Conversion Mortgages.
HECM Basics
Borrower Protections
Fees/Costs
Product Misconceptions
Loan Amounts
Accessing Funds
Retirement Strategies
Right-Sizing the Home
Retirement Planning Using Home Equity
Home Equity: The 4th component
Using home equity can help supplement retirement income and provide increased cash flow.
Provides tax-free cash*
Requires no monthly mortgage payments**
Homeowners stay in their home & retain title
The document provides information about BBVA Compass, including:
1) It discusses the causes of the mortgage crisis and credit crunch, tracing it back to legislative changes in the 1970s that loosened mortgage requirements.
2) It provides an overview of BBVA Compass, noting it has over $65 billion in assets and 717 branches across the Sunbelt region.
3) It highlights BBVA Compass' strong capital and liquidity positions and conservative lending practices that position it well in the current economy.
The document summarizes findings from a survey of professionals in private capital markets and privately-held businesses. Key findings include:
1) Significant declines in lending across all private capital market segments due to reduced credit quality and demand, with mezzanine finance being the only segment to increase in size.
2) Privately-held businesses have high return expectations but show signs of struggle, with many reporting decreased access to capital and increased competitive pressures and failure risks.
3) While businesses are optimistic about fundraising prospects, their qualification rates are actually lower than reported, especially for smaller companies.
The document discusses the Home Affordable Affordability and Stability Program which has three main areas of focus: the Home Affordable Refinance Program, the Home Affordable Modification Program, and restoring confidence in FNMA and FHLMC. It provides details on how the refinance and modification programs work, including eligibility requirements, underwriting processes, incentives, and potential issues.
Financial Guarantee 1[1] Music [Recovered] 5 01 09BPANGEL13
The document proposes a financial guarantee program for commercial and mixed-use real estate mortgages in Pennsylvania. It would provide down payment guarantees through surety bonds or policies, allowing borrowers to obtain full financing from lenders rather than pay a large down payment themselves. The program would benefit borrowers by avoiding draining their cash, lenders by enabling full loans with minimal added risk, insurers through premiums, and the state via increased real estate transactions stimulating the economy.
Financing Energy Efficiency: Overview and Lessons (Aceee presentation)HarcourtBrownEF
This document discusses financing options for energy efficiency upgrades. It provides details on several successful existing programs, including Keystone HELP which offers unsecured personal loans for energy upgrades at rates from 4.99-6.99%. It also describes Manitoba Hydro's on-bill tariff program which allows customers to finance upgrades through repayments on their energy bill at a subsidized 4% rate. The document emphasizes the importance of simple, streamlined programs delivered through contractor networks in order to scale up energy efficiency investments.
Financing Energy Efficiency: Overview and Lessons- ACEEE presentationHarcourtBrownEF
This document discusses financing options for energy efficiency upgrades. It provides details on several successful existing programs, including Keystone HELP which offers unsecured personal loans for energy upgrades at rates from 4.99-6.99%. It also describes the Manitoba Hydro Power Smart program, one of the most successful on-bill loan programs with over $200 million lent through 50,000 loans at a subsidized 4.9% rate. The document advocates for making financing programs simple and expanding successful existing models.
The document discusses the valuation of pension liabilities and proposes an alternative accrual rate method. It argues that:
1) Current market-consistent discount rate methods can introduce large errors in liability valuations compared to the implicit accrual rates in contribution and benefit promises.
2) Pension liabilities should be valued based on accumulated contributions plus accrued interest, similar to insolvency procedures, rather than discounted projected benefits.
3) This accrual rate method provides a more objective, accurate and time-consistent valuation that better reflects the original commitments made.
The document provides answers to questions about the Homeowner Affordability and Stability Plan, which aims to help homeowners refinance or modify their mortgages to more affordable terms. It addresses questions for borrowers who are current or at risk of foreclosure on their mortgages regarding eligibility, refinancing or modifying terms, costs, the application process, and what to do if facing foreclosure.
The document provides information on retirement planning and debt optimization strategies. It discusses developing a realistic picture of retirement income and expenses, estimating sources like Social Security and pensions and factoring in healthcare costs. It suggests living for 6 months on projected retirement income to determine if it's realistic. It also outlines strategies to pay off debt, like paying more than minimums, focusing on highest interest rates first, or consolidating with a lower rate loan. While the strategies make sense theoretically, it can be difficult to implement them fully in practice due to competing financial needs.
Chapter 21
Capital Formation
Learning Objectives
1. Explain the differences between debt and
equity financing and the sources of each.
2.Explain the factors that influence the
desirability of alternative sources of
financing.
3.Explain what an investment banker does.
4.List the major bond rating agencies and
explain their role in the debt market.
5.List some of the pros and cons of retiring
debt early.
Two Key Questions
These questions will inform our discussion
of capital formation in the healthcare
industry:
1. How much capital is needed?
2. What sources of capital financing are
available?
1. How much capital is needed?
2. What sources of capital are available?
Two Key Questions, cont.
Distribution in Hospitals
How is the financing structure changing?
Courtesy of Cleverley & Associates
Three Ways to Generate
New Equity Capital
1. Profit retention: using net income to increase
equity (topic discussed extensively in GRIE
discussions)
2. Contributions: using philanthropic gifts to
increase equity
3. Sale of equity interests: using the issuance
of new ownership interest to increase equity
Contributions/Philanthropy
Giving USA 2016: The Annual Report on Philanthropy for the Year 2015. Researched and written by Indiana University Lilly Fami ly School of
Philanthropy.
Contributions/Philanthrop,
cont.
Giving USA 2016: The Annual Report on Philanthropy for the Year 2015. Researched
and written by Indiana University Lilly Family School of Philanthropy.
Contributions/Philanthrop,
cont.
• KEYS TO SUCCESS
1. Case statement: Defines why you need money
2. Designated development officer: Does not need to
be full-time; incentives should relate to giving
expectations
3. Trustee and medical staff involvement: People give
to people, not to organizations
4. Prospect lists: Know who in the community are prime
prospects for giving
5. Programs for giving: Variety of methods and means
to encourage giving
6. Goals: Define realistic targets for long-range planning
Issuance of Equity
• Taxable firms have relied heavily on equity
issuance to raise capital for years
• Interest in not-for-profit firms has been
generated by raising capital through using
restructured organizations and taxable
entities to raise capital
(Example of not-for-profit organizational structure on
next slide)
Issuance of Equity, cont.
FIGURE 21-1 A Parent Holding Company
Long-Term Debt
Financing
• KEY CHARACTERISTICS
1. Cost
2. Control
3. Risk
4. Availability
5. Adequacy
Long-Term Debt
Financing, cont.
KEY CHARACTERISTICS
1. Cost
• Interest rates are the most important
characteristic that affects the cost of alternative
debt financing.
Key term: coupon rate: fixed return of a long-term
debt instrument
Key term: basis point: 1/100th of 1%
• Issuance costs are simply those expenditures
that are essential to consummate the financing
• Reserve requireme ...
World Financial Group, Inc. is a financial services marketing company that offers various financial products and services through its affiliates. It has insurance agency affiliates in several states that offer insurance products. World Financial Group, Inc. and its insurance affiliates are affiliated companies headquartered in Johns Creek, Georgia.
World Financial Group, Inc. is a financial services marketing company that offers various financial products and services through its affiliates. It has insurance agency affiliates in several states that offer insurance products. World Financial Group, Inc. and its insurance affiliates are affiliated companies headquartered in Johns Creek, Georgia.
World Financial Group, Inc. is a financial services marketing company that offers various financial products and services through its affiliates. It has insurance agency affiliates in several states that offer insurance products. World Financial Group, Inc. and its insurance affiliates are affiliated companies headquartered in Johns Creek, Georgia.
Similar to Far white paper tap into potential retirement wealth 012916 (20)
The SVN® organization shares a portion of their new weekly listings via their SVN Live® Weekly Property Broadcast. Visit https://svn.com/svn-live/ if you would like to attend our weekly call, which we open up to the brokerage community.
AVRUPA KONUTLARI ESENTEPE - ENGLISH - Listing TurkeyListing Turkey
Looking for a new home in Istanbul? Look no further than Avrupa Konutlari Esentepe! Our beautifully designed homes provide the perfect blend of luxury and comfort, making them the perfect choice for anyone looking for a high-quality home in the city.
With a wide range of apartment types available, from 1+1 to 4+1, we have something to suit every need and budget. Each apartment is designed with attention to detail and features spacious and bright living areas, making them the perfect place to relax and unwind after a long day.
One of the things that sets Avrupa Konutlari Esentepe apart from other developments is our focus on creating a community that is both comfortable and convenient. Our homes are surrounded by lush green spaces, perfect for enjoying a peaceful stroll or having a picnic with friends and family. Additionally, our complex includes a variety of social and recreational amenities, such as swimming pools, sports fields, and playgrounds, making it easy for residents to stay active and socialize with their neighbors.
https://listingturkey.com/property/avrupa-konutlari-esentepe/
BEST FARMLAND FOR SALE | FARM PLOTS NEAR BANGALORE | KANAKAPURA | CHICKKABALP...knox groups real estate
welcome to knox groups real estate company in Bangalore. best farm land for sale near Bangalore and madhugiri . Managed farmland near Kanakapura and Chickkabalapur get know more details about the projects .Knox groups is a leading real estate company dedicated to helping individuals and businesses navigate the dynamic real estate market. With our extensive knowledge, experience, and commitment to excellence, we deliver exceptional results for our clients. Discover the perfect foundation for your agricultural aspirations with KNOX Groups' prime farm lands. These aren't just plots; they're the fertile grounds where vibrant crops flourish, livestock thrives, and unique agricultural ventures come to life. At KNOX, we go beyond selling land we curate sustainable ecosystems, ensuring that your journey toward agricultural success is seamless and prosperous.
The SVN® organization shares a portion of their new weekly listings via their SVN Live® Weekly Property Broadcast. Visit https://svn.com/svn-live/ if you would like to attend our weekly call, which we open up to the brokerage community.
Dholera Smart City Latest Development Status 2024.pdfShivgan Infratech
Explore the latest development status of Dholera Smart City in 2024. Discover the progress, infrastructure, and future plans of India's first greenfield smart city.
Stark Builders: Where Quality Meets Craftsmanship!shuilykhatunnil
At Stark Builders our vision is to redefine the renovation experience by combining both stunning design and high quality construction skills. We believe that by delivering both these key aspects together we are able to achieve incredible results for our clients and ensure every project reflects their vision and enhances their lifestyle.
Although we are not all related by blood we have created a team of highly professional and hardworking individuals who share the common goal of delivering beautiful and functional renovated spaces. Our tight nit team are able to work together in a way where we pour our passion into each and every project as we have a love for what we do. Building is our life.
Living in an UBER World - June '24 Sales MeetingTom Blefko
June 2024 Lancaster County Sales Meeting for Berkshire Hathaway HomeServices Homesale Realty covering the following topics: 1. VA Suspends Buyer Agent Payment Plan (article), 2. Frequently Used Terms in title, 3. Zillow Showcase Overview, 4. QuickBuy commission promotion, 5. Documenting Cooperative Compensation, 6. NAR's Code of Ethics - Mass Media Solicitations, 7. Is it really cheaper to rent? 8. Do's and Don't's when Terminating the Agreement of Sale, 9. Living in an UBER World