Episodes

Episode 156: Selling Equity As New Way To Access The Value of Your Home In Retirement With David Shapiro

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A home is typically one of the largest individual assets we must include in a retirement plan. However, it’s also one of the most illiquid ones. We’ve had several episodes exploring the role of home equity loans in solving the problem. Today, we look at a second option – selling part of the equity in your house to a third party. David Shapiro, Founder and CEO of EquiFi Corporation explains the new product and the benefits it potentially offers.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned:

Equifi:

Home page

David on Linkedin:
https://www.linkedin.com/in/dshapiro1/

 

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Episode Transcript

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[paul_tyler]: hi this is paul tyler and

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[ramsey_d_smith]: oh

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[paul_tyler]: welcome to another episode of the annuity
show ramsey how are you

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[ramsey_d_smith]: fantastic

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[paul_tyler]: good i had a great trip with
the mark fitzgerald down to the medicarians conference

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[paul_tyler]: in las vegas

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[ramsey_d_smith]: m

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[paul_tyler]: last week and we had some great
conversations i think you heard a few of

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[paul_tyler]: them

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[ramsey_d_smith]: i

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[paul_tyler]: wow

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[ramsey_d_smith]: listened to all the ones you sent
me the really fantastic

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[paul_tyler]: yeah

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[ramsey_d_smith]: conversations and some real real hitters you
managed

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[paul_tyler]: oh

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[ramsey_d_smith]: to get on the get on the
podcast with you as fantastic

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[paul_tyler]: ah no great conversation and well

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[ramsey_d_smith]: m

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[paul_tyler]: we’ll release

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[ramsey_d_smith]: oh

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[paul_tyler]: them a little later the summer but
you now just a superb conference

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[ramsey_d_smith]: oh

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[paul_tyler]: that jane wine rub put on and
it was actually a really

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[ramsey_d_smith]: oh

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[paul_tyler]: good intersection ween you know companies in
the senior health care market startups um and

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[ramsey_d_smith]: at

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[paul_tyler]: traditional distribution and kind of that

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[ramsey_d_smith]: oh

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[paul_tyler]: actual is going to be kind of
a zone

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[ramsey_d_smith]: yeah

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[paul_tyler]: we’re talking about today um and i’ll
start with we’re gonna be talking about homes

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[paul_tyler]: homes are at such an important asset
class for for most retires you know for

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[paul_tyler]: typical people retiring social security and home
equity are probably the two biggest assets they’ve

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[paul_tyler]: got to to work with and and
use for

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[ramsey_d_smith]: oh

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[paul_tyler]: income in later years

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[ramsey_d_smith]: oh

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[paul_tyler]: now how do you convert that home
into

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[ramsey_d_smith]: yes

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[paul_tyler]: retirement income probably the most common strategy
is downside sell sell our house you know

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[paul_tyler]: they take the proceeds move somewhere smaller
cheaper tax rates are lower and you freed

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[paul_tyler]: up this equity i mean that’s an
expense i very disruptive way to solve that

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[paul_tyler]: problem we’ve had rams your friend don
on several times talking to us about hecham

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[paul_tyler]: loans reverse mortgages as a potential

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[ramsey_d_smith]: yeah

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[paul_tyler]: solution today

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[ramsey_d_smith]: oh

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[paul_tyler]: we have david chipero

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[ramsey_d_smith]: yeah

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[paul_tyler]: who is founder in c equify corpse
ration to talk about another approach to david

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[paul_tyler]: i’m going to say nondisruptively allow retires
the tap into their value of their home

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[paul_tyler]: to provide a stable

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[ramsey_d_smith]: oh

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[paul_tyler]: income and retirement so welcome to our
show david

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[david_shapiro]: well thank you it’s great to be
here

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[ramsey_d_smith]: oh

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[paul_tyler]: yes and

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[david_shapiro]: yeah

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[paul_tyler]: you actually

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[ramsey_d_smith]: yes

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[paul_tyler]: are this is actually start up company
that we’re going to talk about today correct

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[david_shapiro]: yeah yeah yeah

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[paul_tyler]: yeah

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[david_shapiro]: yeah we’re an aging start up because
we started in two thousand sixteen but because

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[david_shapiro]: of the way that we’re coming to
market the regulatory piece of the business

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[paul_tyler]: yeah

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[david_shapiro]: takes an exceedingly long or at a
time so

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[ramsey_d_smith]: oh

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[david_shapiro]: but

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[paul_tyler]: uh

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[david_shapiro]: yeah we launched in we launched in

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[paul_tyler]: h

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[david_shapiro]: late january early february but ye

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[paul_tyler]: yeah

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[david_shapiro]: yeah

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[paul_tyler]: interesting all right well

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[david_shapiro]: yeah

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[paul_tyler]: well tell tell us about your company
and tell us about the product that you’re

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[david_shapiro]: yeah

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[paul_tyler]: offering

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[david_shapiro]: sure

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[paul_tyler]: oh

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[david_shapiro]: so what led me to this was
you know

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[paul_tyler]: oh

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[david_shapiro]: a career in the annuity space basically
designing annuities for insurance

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[paul_tyler]: yah

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[david_shapiro]: companies train stockbrokers back in the old
days and

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[paul_tyler]: oh

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[david_shapiro]: financial planners on how important it is
to save for retirement

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[paul_tyler]: oh

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[david_shapiro]: and you know i i built a
company called in fo one with the fur

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[david_shapiro]: sas model

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[ramsey_d_smith]: ah

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[david_shapiro]: that had every variable annuity on our
platform it was all cloud based back in

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[paul_tyler]: oh

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[david_shapiro]: nineteen ninety seven nineteen ninety eight when
bill gates was talking about the internet and

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[david_shapiro]: so we built this eco system around
annuities and it allowed advisors to look at

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[david_shapiro]: all the annuities on the product illustrate
them you know screen scrape in their clients

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[david_shapiro]: data and trade it would go through
pershing or d t c or the whatever

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[david_shapiro]: firm the was the clearing firm and
equify is fundamentally using the exact same eco

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[david_shapiro]: system but

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[ramsey_d_smith]: oh

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[david_shapiro]: it’s focused you know you said paul
primarily

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[ramsey_d_smith]: m

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[david_shapiro]: on the baby boomers that want to
retire in place and

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[paul_tyler]: oh

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[david_shapiro]: as you said

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[ramsey_d_smith]: oh

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[david_shapiro]: the home

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[ramsey_d_smith]: yeah

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[david_shapiro]: is

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[ramsey_d_smith]: yeah

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[david_shapiro]: you know the average american has

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[paul_tyler]: oh

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[david_shapiro]: seventy to seventy five per cent of
their wealth is in their home um and

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[david_shapiro]: so being able to give people access
to that in a form that isn’t debt

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[david_shapiro]: that

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[paul_tyler]: yeah

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[david_shapiro]: doesn’t have a current interest rate doesn’t
have an crude interest

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[paul_tyler]: a

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[david_shapiro]: um provides them the flexibility to stay
in their home the rest of their lives

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[david_shapiro]: was

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[paul_tyler]: oh

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[david_shapiro]: the gating factor for me to create
equify which we did in two thousand sixteen

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[david_shapiro]: and we’re

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[paul_tyler]: oh

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[david_shapiro]: organized delaware public benefit corporation so our
intent

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[ramsey_d_smith]: m oh

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[david_shapiro]: is to help people create

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[ramsey_d_smith]: yeah

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[david_shapiro]: wealth and manage

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[ramsey_d_smith]: ye

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[david_shapiro]: the wealth that they have in the
most important asset that they own which is

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[david_shapiro]: their home

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[ramsey_d_smith]: ah

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[david_shapiro]: um and that’s that’s kind of what

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[ramsey_d_smith]: oh

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[david_shapiro]: led to to this journey and the
product is purely a trade between

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[ramsey_d_smith]: m

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[david_shapiro]: a home owner that has equity and
their home once to access that equity doesn’t

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[david_shapiro]: want have it in the form of
a loan and there’s an investor on the

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[david_shapiro]: other side that says hey you know
i’d love to get some exposure to home

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[david_shapiro]: price appreciation and if i can be
a silent investor with the home owner just

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[david_shapiro]: take the ride on the appreciated value
of the home

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[paul_tyler]: yeah

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[david_shapiro]: then that’s a great

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[paul_tyler]: yeah

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[david_shapiro]: deal for us so it’s it’s designed
to be

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[paul_tyler]: oh

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[david_shapiro]: a very fair trade between a home
owner and an investor allows both parties us

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[david_shapiro]: to feel that you know they’ve entered
to an agreement that they both can live

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[david_shapiro]: with and it provides the benefits to
both and and in the middle of that

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[david_shapiro]: is the distribution of product and we
exclusively provide the product through financial advisors insurance

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[david_shapiro]: agents mortgage mortgage brokers folks like that
that already

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[ramsey_d_smith]: m

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[david_shapiro]: have a trusted relation ship with the
consumer

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[ramsey_d_smith]: so can you talk a little bit
about

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[david_shapiro]: yeah

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[ramsey_d_smith]: what the actual transaction looks like what
is it you know so t zero starting

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[ramsey_d_smith]: point you know i’m i’m seventy

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[paul_tyler]: oh

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[ramsey_d_smith]: years old i owned my house

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[paul_tyler]: yeah

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[ramsey_d_smith]: and

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[david_shapiro]: hm

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[ramsey_d_smith]: then i

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[paul_tyler]: yeah

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[ramsey_d_smith]: enter into a you now transaction with
equify and you know t plus a week

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[ramsey_d_smith]: later or hover long it takes i’ve
now i’ve now entered into

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[paul_tyler]: oh

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[ramsey_d_smith]: an equifye contract

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[david_shapiro]: hm

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[ramsey_d_smith]: um what’s different what do i what
do i have i still own my house

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[david_shapiro]: you’re

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[ramsey_d_smith]: um

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[david_shapiro]: still in your house

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[ramsey_d_smith]: but and so how much of my
house would i typically what i typically own

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[ramsey_d_smith]: like how would you typically would equify
or

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[paul_tyler]: a

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[ramsey_d_smith]: equifys investors what percentage

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[paul_tyler]: oh

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[ramsey_d_smith]: of a house would you typically purchase
in one of the transactions

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[david_shapiro]: yeah

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[paul_tyler]: oh

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[david_shapiro]: we can go up to thirty five
per cent

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[paul_tyler]: yeah

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[david_shapiro]: of the value of the home sometimes
a little bit more than thirty five percent

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[david_shapiro]: um so let’s just take an example

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[ramsey_d_smith]: oh

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[david_shapiro]: let’s say you’ve got a million dollar
home and for purposes of this since thirty

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[david_shapiro]: seven per cent of the homes in
the country have no mortgage

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[paul_tyler]: oh

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[david_shapiro]: let’s assume that there’s no mortgage on
the home so we’ve got a million dollar

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[david_shapiro]: home let’s say the home owner wants
to get four hundred thousand dollars out of

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[david_shapiro]: their home let’s max it out and
say we can give him forty

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[ramsey_d_smith]: ah

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[david_shapiro]: per cent right so we basically

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[ramsey_d_smith]: hm

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[david_shapiro]: advance them forty per cent of the
value of their home and then since the

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[david_shapiro]: home is got a value of a
million dollars we

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[paul_tyler]: oh

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[david_shapiro]: put in three hundred thousand dollars of
what we call protected equity that sits on

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[david_shapiro]: top of the four hundred thousand that
we put in and then when the home

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[david_shapiro]: owner dies sells the property or chooses
to repay for that forty per cent they’re

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[david_shapiro]: going to give us you know half
of the value of the home above their

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[david_shapiro]: protected equity

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[ramsey_d_smith]: yeah

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[david_shapiro]: so the homes a million dollars we
put up for hundred thousand there’s three hundred

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[david_shapiro]: thousand that we don’t share in at
all and then anything above that plus the

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[david_shapiro]: appreciation in the home we would take
fifty percent and they would take fifty percent

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[david_shapiro]: if it was three hundred thousand dollar
instead of a four hundred thousand which is

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[david_shapiro]: thirty per cent we would probably take
thirty seven thirty eight per cent and they’d

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[david_shapiro]: have four hundred thousand in protected equity
that’s that’s in it plays out very nicely

214
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[david_shapiro]: in pictures

215
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[ramsey_d_smith]: i

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[david_shapiro]: it

217
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[ramsey_d_smith]: was going to say that

218
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[paul_tyler]: yeah

219
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[ramsey_d_smith]: that

220
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[david_shapiro]: yeah

221
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[ramsey_d_smith]: is that is that is

222
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[paul_tyler]: oh

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[ramsey_d_smith]: a transaction that that definitely would benefit
from a

224
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[paul_tyler]: oh

225
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[ramsey_d_smith]: would benefit from an illustration or

226
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[david_shapiro]: yes

227
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[ramsey_d_smith]: you know

228
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[david_shapiro]: yeah

229
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[ramsey_d_smith]: you know a picture so you can
understand so of what the parts are like

230
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[ramsey_d_smith]: what what exactly the terms are for
the protected equity etcetera but

231
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[david_shapiro]: yeah

232
00:08:06,515 –> 00:08:10,622
[ramsey_d_smith]: fundamentally so let’s maybe let’s just stick
with sort of like the general outcome so

233
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[ramsey_d_smith]: if i once i’ve engaged in this
transaction

234
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[paul_tyler]: yeah

235
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[ramsey_d_smith]: with you like how is

236
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[paul_tyler]: yeah

237
00:08:15,509 –> 00:08:20,595
[ramsey_d_smith]: it how is it you know how
is it different than a typical reverse mortgage

238
00:08:20,533 –> 00:08:20,815
[david_shapiro]: yeah

239
00:08:20,655 –> 00:08:23,698
[ramsey_d_smith]: why am i in a the consumer
why am i in a better position

240
00:08:24,213 –> 00:08:32,807
[david_shapiro]: yeah so i think the better question
is based on each individual right so we

241
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[david_shapiro]: don’t necessarily

242
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[ramsey_d_smith]: oh

243
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[david_shapiro]: believe that there is a right or
a wrong

244
00:08:35,819 –> 00:08:35,981
[ramsey_d_smith]: yeah

245
00:08:35,892 –> 00:08:38,957
[david_shapiro]: so think that if you’re an advisor
and you’re working

246
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[ramsey_d_smith]: oh

247
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[david_shapiro]: with you know

248
00:08:39,659 –> 00:08:39,882
[ramsey_d_smith]: oh

249
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[david_shapiro]: a client of yours

250
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[ramsey_d_smith]: yeah

251
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[david_shapiro]: that is in this position

252
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[paul_tyler]: oh

253
00:08:43,124 –> 00:08:46,510
[david_shapiro]: you should be presenting them a he
lock you can’t really

254
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[paul_tyler]: a

255
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[david_shapiro]: you know with

256
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[ramsey_d_smith]: oh

257
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[david_shapiro]: finn registered rep can’t recommend a key
lock because of the fender restrictions on utilizing

258
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[david_shapiro]: home equity particularly if you’re going to
be utilizing that toby security

259
00:08:58,650 –> 00:09:00,151
[paul_tyler]: m oh

260
00:09:00,533 –> 00:09:03,518
[david_shapiro]: so but they should make them aware
of their options one would be a key

261
00:09:03,598 –> 00:09:07,905
[david_shapiro]: lock you know paul you started that
with they could sell their home right and

262
00:09:08,306 –> 00:09:14,156
[david_shapiro]: re locate and you know get a
smaller place there verse mortgage presents a

263
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[paul_tyler]: yeah

264
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[david_shapiro]: different opportunity because

265
00:09:15,779 –> 00:09:16,086
[ramsey_d_smith]: oh

266
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[david_shapiro]: it doesn’t have a current interest rate
it has

267
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[ramsey_d_smith]: oh

268
00:09:19,104 –> 00:09:20,206
[david_shapiro]: an accruived interest rate

269
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[ramsey_d_smith]: oh

270
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[david_shapiro]: and

271
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[ramsey_d_smith]: yeah

272
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[david_shapiro]: you can’t

273
00:09:22,110 –> 00:09:22,313
[paul_tyler]: oh

274
00:09:22,370 –> 00:09:26,256
[david_shapiro]: be on a heem heck mortgage which
is the most popular

275
00:09:25,830 –> 00:09:27,330
[paul_tyler]: oh

276
00:09:26,496 –> 00:09:32,647
[david_shapiro]: government guaranteed reverse mortgage you can’t have
a first mortgage so one differential

277
00:09:32,670 –> 00:09:33,015
[paul_tyler]: yeah

278
00:09:32,807 –> 00:09:37,294
[david_shapiro]: between us and reverse mortgage is if
somebody has a mortgage on their home and

279
00:09:37,555 –> 00:09:38,677
[david_shapiro]: it’s at a four per

280
00:09:38,610 –> 00:09:40,230
[paul_tyler]: yeah

281
00:09:38,797 –> 00:09:42,864
[david_shapiro]: cent or three percent you know they
may not want to pay that off just

282
00:09:42,904 –> 00:09:47,191
[david_shapiro]: to get the reverse mortgage which today
is going to be starting at probably a

283
00:09:47,311 –> 00:09:52,219
[david_shapiro]: six and a half per and you
know adjustable rate interest so that that’s one

284
00:09:52,259 –> 00:09:55,665
[david_shapiro]: of the things that they need to
consider and then the thing i think that

285
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[david_shapiro]: that

286
00:09:56,369 –> 00:09:56,389
[ramsey_d_smith]: m

287
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[david_shapiro]: most differentiates us is that

288
00:09:58,499 –> 00:09:58,519
[ramsey_d_smith]: m

289
00:09:59,451 –> 00:10:01,274
[david_shapiro]: our market with aging

290
00:10:01,200 –> 00:10:01,220
[paul_tyler]: m

291
00:10:01,355 –> 00:10:05,822
[david_shapiro]: baby boomers the older people get they
don’t want to mortgage they don’t want to

292
00:10:05,882 –> 00:10:12,513
[david_shapiro]: have you know a current payment they
don’t want to see a accruing inter rate

293
00:10:12,573 –> 00:10:17,241
[david_shapiro]: where every statement that they get pay
the balance is going up

294
00:10:17,309 –> 00:10:18,029
[ramsey_d_smith]: yeah

295
00:10:17,321 –> 00:10:20,627
[david_shapiro]: and up and up it’s not going
to ever go down so i think that

296
00:10:20,437 –> 00:10:20,579
[ramsey_d_smith]: yeah

297
00:10:21,047 –> 00:10:27,138
[david_shapiro]: you know that’s real limitation end frankly
the other issue with reversed mortgages is that

298
00:10:27,598 –> 00:10:30,864
[david_shapiro]: you know there’s a cost to our
product there’s a cost to reverse mortgage there’s

299
00:10:30,904 –> 00:10:31,324
[david_shapiro]: a cost to

300
00:10:31,349 –> 00:10:31,752
[ramsey_d_smith]: yeah

301
00:10:31,385 –> 00:10:33,909
[david_shapiro]: a hey lock with reversed mortgages

302
00:10:33,407 –> 00:10:33,548
[ramsey_d_smith]: yeah

303
00:10:34,229 –> 00:10:34,430
[david_shapiro]: and

304
00:10:34,590 –> 00:10:35,220
[paul_tyler]: yeah

305
00:10:34,610 –> 00:10:36,814
[david_shapiro]: with he locks a lot of that
call t is

306
00:10:36,749 –> 00:10:36,931
[ramsey_d_smith]: oh

307
00:10:37,314 –> 00:10:39,638
[david_shapiro]: you know is built into the spread
on the interest

308
00:10:39,434 –> 00:10:39,454
[paul_tyler]: i

309
00:10:39,739 –> 00:10:40,580
[david_shapiro]: rate but

310
00:10:40,649 –> 00:10:40,890
[ramsey_d_smith]: oh

311
00:10:40,660 –> 00:10:43,124
[david_shapiro]: just the up front cost we were
looking at

312
00:10:42,987 –> 00:10:43,148
[ramsey_d_smith]: yeah

313
00:10:43,665 –> 00:10:48,052
[david_shapiro]: a comparison one of our financial planters
r i s and sacramento has a client

314
00:10:48,193 –> 00:10:48,393
[david_shapiro]: that

315
00:10:48,690 –> 00:10:48,710
[paul_tyler]: m

316
00:10:48,974 –> 00:10:53,041
[david_shapiro]: wants to use our product and the
apples apples comparison to get

317
00:10:53,430 –> 00:10:53,651
[paul_tyler]: oh

318
00:10:53,481 –> 00:10:56,186
[david_shapiro]: you know four hundred thousand dollars out
of their home

319
00:10:57,210 –> 00:10:57,472
[paul_tyler]: oh

320
00:10:57,248 –> 00:10:59,151
[david_shapiro]: the reverse mortgage just the cost

321
00:10:58,919 –> 00:10:59,226
[ramsey_d_smith]: oh

322
00:10:59,211 –> 00:11:05,361
[david_shapiro]: to originate it with twenty eight thousand
dollars our product was twelve thousand dollars

323
00:11:05,138 –> 00:11:05,159
[ramsey_d_smith]: m

324
00:11:05,501 –> 00:11:10,430
[david_shapiro]: so much more expensive up front and
then the other issue with reversed mortgages is

325
00:11:10,570 –> 00:11:13,314
[david_shapiro]: that you don’t know what the lie
of bill ty to the estate is going

326
00:11:13,355 –> 00:11:17,802
[david_shapiro]: to be so with our product you
know exactly if we’re putting up that you

327
00:11:17,842 –> 00:11:20,827
[david_shapiro]: know forty per cent which is a
lot right and we’re going to take half

328
00:11:20,927 –> 00:11:24,293
[david_shapiro]: of the of the net equity in
the home you know upon their death or

329
00:11:24,393 –> 00:11:29,982
[david_shapiro]: sale whatever they know that fifty percent
of their home can be managed in the

330
00:11:30,042 –> 00:11:34,510
[david_shapiro]: estate where with the reverse mortgage you
just don’t know what that balance is going

331
00:11:34,550 –> 00:11:40,660
[david_shapiro]: to be you know in until there
are so for financial planning purposes it’s it’s

332
00:11:40,720 –> 00:11:41,401
[david_shapiro]: a difference that we

333
00:11:41,400 –> 00:11:41,664
[paul_tyler]: oh

334
00:11:41,461 –> 00:11:43,264
[david_shapiro]: think you know helps helps our

335
00:11:43,620 –> 00:11:43,901
[paul_tyler]: oh

336
00:11:43,685 –> 00:11:46,109
[david_shapiro]: cause in you know setting that comparison
up

337
00:11:46,320 –> 00:11:46,626
[paul_tyler]: oh

338
00:11:46,550 –> 00:11:47,772
[david_shapiro]: and then reputationally

339
00:11:47,999 –> 00:11:48,260
[ramsey_d_smith]: oh

340
00:11:48,233 –> 00:11:51,017
[david_shapiro]: oh you know i don’t want to

341
00:11:51,479 –> 00:11:51,680
[ramsey_d_smith]: oh

342
00:11:51,698 –> 00:11:53,742
[david_shapiro]: malign the reverse mortgage industry but

343
00:11:54,060 –> 00:11:54,301
[paul_tyler]: oh

344
00:11:54,363 –> 00:11:55,565
[david_shapiro]: there is a historical

345
00:11:55,765 –> 00:11:55,949
[ramsey_d_smith]: yeah

346
00:11:56,747 –> 00:12:00,874
[david_shapiro]: a legacy fear of reverse mortgages that
built there early in the

347
00:12:00,869 –> 00:12:01,153
[ramsey_d_smith]: oh

348
00:12:01,114 –> 00:12:01,775
[david_shapiro]: in the industry

349
00:12:02,026 –> 00:12:02,189
[ramsey_d_smith]: yeah

350
00:12:02,436 –> 00:12:02,877
[david_shapiro]: um

351
00:12:03,330 –> 00:12:03,350
[paul_tyler]: m

352
00:12:03,398 –> 00:12:06,543
[david_shapiro]: and so you know you have to
deal with that general generation

353
00:12:06,360 –> 00:12:06,601
[paul_tyler]: oh

354
00:12:06,603 –> 00:12:08,386
[david_shapiro]: ally as well because a lot of
the

355
00:12:08,849 –> 00:12:09,179
[ramsey_d_smith]: oh

356
00:12:08,927 –> 00:12:10,069
[david_shapiro]: baby boomers had

357
00:12:10,020 –> 00:12:10,324
[paul_tyler]: oh

358
00:12:10,350 –> 00:12:13,374
[david_shapiro]: parents of theirs that you know looked
at a reverse

359
00:12:13,230 –> 00:12:13,511
[paul_tyler]: oh

360
00:12:13,434 –> 00:12:18,298
[david_shapiro]: mortgage and felt that it was not
not appropriate for them so the reverse mortgage

361
00:12:18,338 –> 00:12:19,479
[david_shapiro]: industry has some baggage

362
00:12:19,530 –> 00:12:19,772
[paul_tyler]: oh

363
00:12:19,560 –> 00:12:22,122
[david_shapiro]: that that they have to deal with
historically

364
00:12:22,829 –> 00:12:23,130
[ramsey_d_smith]: yah

365
00:12:23,101 –> 00:12:25,067
[paul_tyler]: well well and you kind of you

366
00:12:25,098 –> 00:12:25,238
[ramsey_d_smith]: yah

367
00:12:25,107 –> 00:12:25,549
[paul_tyler]: know alluded

368
00:12:25,483 –> 00:12:25,744
[david_shapiro]: oh

369
00:12:25,589 –> 00:12:25,649
[paul_tyler]: to

370
00:12:25,619 –> 00:12:25,905
[ramsey_d_smith]: oh

371
00:12:25,689 –> 00:12:29,390
[paul_tyler]: this earlier which is when people

372
00:12:29,443 –> 00:12:30,011
[david_shapiro]: yeah

373
00:12:29,470 –> 00:12:31,093
[paul_tyler]: say is this good product or bad
product well

374
00:12:31,418 –> 00:12:31,439
[ramsey_d_smith]: m

375
00:12:31,434 –> 00:12:32,816
[paul_tyler]: it always starts with

376
00:12:32,819 –> 00:12:33,749
[ramsey_d_smith]: yeah

377
00:12:33,777 –> 00:12:34,819
[paul_tyler]: two words it depends

378
00:12:35,493 –> 00:12:35,635
[david_shapiro]: yeah

379
00:12:35,961 –> 00:12:39,126
[paul_tyler]: now now if my goal you know
ramsey

380
00:12:39,043 –> 00:12:39,325
[david_shapiro]: oh

381
00:12:39,587 –> 00:12:41,691
[paul_tyler]: i’m thinking if i’m goin to do
one of these things i think there are

382
00:12:41,731 –> 00:12:45,477
[paul_tyler]: two goals i have tell me challenging
me on the question because maybe i’m not

383
00:12:45,577 –> 00:12:46,579
[paul_tyler]: thinking of this way one is

384
00:12:46,829 –> 00:12:48,239
[ramsey_d_smith]: yeah

385
00:12:47,240 –> 00:12:55,033
[paul_tyler]: i want to maximize my income available
for my house two leaves something probably you

386
00:12:55,093 –> 00:12:58,819
[paul_tyler]: know as much as i possibly can
to my my survivor so think i have

387
00:12:58,879 –> 00:13:02,405
[paul_tyler]: two goals now david i can see
two different scenarios taking place here

388
00:13:02,369 –> 00:13:02,531
[ramsey_d_smith]: yeah

389
00:13:02,565 –> 00:13:06,132
[paul_tyler]: one is let’s say t zero ramsey

390
00:13:06,523 –> 00:13:06,543
[david_shapiro]: m

391
00:13:06,934 –> 00:13:07,656
[paul_tyler]: housing market

392
00:13:07,402 –> 00:13:07,423
[david_shapiro]: m

393
00:13:07,796 –> 00:13:12,306
[paul_tyler]: is it’s index to a hundred you
know by the time i pass on it’s

394
00:13:12,406 –> 00:13:12,587
[paul_tyler]: now

395
00:13:14,189 –> 00:13:14,435
[ramsey_d_smith]: yeah

396
00:13:14,650 –> 00:13:19,257
[paul_tyler]: two thirty five yu know what it
was you know prior huge

397
00:13:19,499 –> 00:13:19,702
[ramsey_d_smith]: yeah

398
00:13:19,618 –> 00:13:20,339
[paul_tyler]: appreciation

399
00:13:20,806 –> 00:13:21,373
[david_shapiro]: hm

400
00:13:21,201 –> 00:13:25,668
[paul_tyler]: one scenario other scenarios you know is
pretty flat market you know only we only

401
00:13:25,708 –> 00:13:31,358
[paul_tyler]: had i appreciate david how do those
each of those how would these instruments perform

402
00:13:32,019 –> 00:13:32,219
[paul_tyler]: you know

403
00:13:32,939 –> 00:13:33,689
[ramsey_d_smith]: yeah

404
00:13:33,040 –> 00:13:36,586
[paul_tyler]: reverse mortgage versus what you’re doing those
are my two goals

405
00:13:37,093 –> 00:13:37,215
[david_shapiro]: yeah

406
00:13:37,127 –> 00:13:37,608
[paul_tyler]: max mis

407
00:13:37,539 –> 00:13:37,661
[david_shapiro]: yeah

408
00:13:37,708 –> 00:13:39,356
[paul_tyler]: income max that’s what i’m leaving

409
00:13:39,803 –> 00:13:41,125
[david_shapiro]: yeah well and

410
00:13:41,359 –> 00:13:41,479
[ramsey_d_smith]: we

411
00:13:41,405 –> 00:13:45,132
[david_shapiro]: the two factors that you have to
take into account are what’s the

412
00:13:45,779 –> 00:13:46,769
[ramsey_d_smith]: oh

413
00:13:46,170 –> 00:13:46,312
[paul_tyler]: ye

414
00:13:46,233 –> 00:13:47,235
[david_shapiro]: forward looking

415
00:13:47,150 –> 00:13:47,352
[ramsey_d_smith]: yes

416
00:13:47,816 –> 00:13:48,537
[david_shapiro]: interest rate

417
00:13:48,691 –> 00:13:48,855
[ramsey_d_smith]: yes

418
00:13:48,958 –> 00:13:49,579
[david_shapiro]: over time

419
00:13:49,690 –> 00:13:49,913
[paul_tyler]: yes

420
00:13:49,829 –> 00:13:50,193
[ramsey_d_smith]: oh

421
00:13:49,860 –> 00:13:51,482
[david_shapiro]: versus what’s the home appreciation

422
00:13:51,450 –> 00:13:52,620
[paul_tyler]: oh

423
00:13:51,743 –> 00:13:55,569
[david_shapiro]: our time and i mean that’s you
know that’s an unknown that you know each

424
00:13:55,629 –> 00:14:00,297
[david_shapiro]: person is going to have to answer
for for themselves so i think it becomes

425
00:14:01,078 –> 00:14:02,741
[david_shapiro]: it is it is a financial decision

426
00:14:02,759 –> 00:14:02,964
[ramsey_d_smith]: yah

427
00:14:03,883 –> 00:14:06,808
[david_shapiro]: but there are other elements you know
like just not wanting

428
00:14:06,629 –> 00:14:06,830
[ramsey_d_smith]: yah

429
00:14:06,868 –> 00:14:11,195
[david_shapiro]: to have a mortgage or the whole
estate thing but

430
00:14:11,190 –> 00:14:11,391
[paul_tyler]: yeah

431
00:14:11,275 –> 00:14:15,342
[david_shapiro]: it is it is a financial equation
that is not

432
00:14:15,809 –> 00:14:16,619
[ramsey_d_smith]: yah

433
00:14:15,883 –> 00:14:19,809
[david_shapiro]: it’s not perfect because we can’t you
know we can we can’t see that far

434
00:14:19,870 –> 00:14:20,010
[david_shapiro]: into

435
00:14:19,919 –> 00:14:20,123
[ramsey_d_smith]: yeah

436
00:14:20,050 –> 00:14:20,531
[david_shapiro]: the future

437
00:14:20,280 –> 00:14:21,000
[paul_tyler]: yeah

438
00:14:21,569 –> 00:14:21,877
[ramsey_d_smith]: oh

439
00:14:21,813 –> 00:14:21,973
[david_shapiro]: and

440
00:14:22,140 –> 00:14:22,421
[paul_tyler]: yah

441
00:14:22,233 –> 00:14:22,634
[david_shapiro]: that’s one

442
00:14:22,559 –> 00:14:22,741
[ramsey_d_smith]: oh

443
00:14:22,674 –> 00:14:23,496
[david_shapiro]: of the reasons that

444
00:14:23,908 –> 00:14:24,109
[paul_tyler]: yah

445
00:14:24,357 –> 00:14:28,724
[david_shapiro]: that i think that reverse mortgages you
know most of them are on an adjustable

446
00:14:28,824 –> 00:14:34,494
[david_shapiro]: rate because the way that their structure
you know with heckhams you really can’t get

447
00:14:34,554 –> 00:14:37,679
[david_shapiro]: a lot out if you’re doing a
lump sum in a fixed interest rate you

448
00:14:37,719 –> 00:14:41,265
[david_shapiro]: can get very little out of your
home so to the reverse mortgages are variable

449
00:14:41,325 –> 00:14:46,834
[david_shapiro]: rate and that adds a unknown that
you know that’s hard to quantify ours is

450
00:14:47,095 –> 00:14:48,918
[david_shapiro]: fully quantified but you’re right paul

451
00:14:48,839 –> 00:14:49,140
[ramsey_d_smith]: oh

452
00:14:49,078 –> 00:14:49,158
[david_shapiro]: if

453
00:14:49,560 –> 00:14:49,862
[paul_tyler]: oh

454
00:14:49,799 –> 00:14:52,804
[david_shapiro]: if home price is appreciated higher than

455
00:14:52,650 –> 00:14:52,994
[ramsey_d_smith]: i like

456
00:14:53,045 –> 00:14:55,249
[david_shapiro]: we assume in our you

457
00:14:55,238 –> 00:14:55,259
[ramsey_d_smith]: m

458
00:14:55,289 –> 00:15:00,517
[david_shapiro]: know illustrations than you know the investor
but but they’re but they’re in lock step

459
00:15:00,678 –> 00:15:05,446
[david_shapiro]: right the you know the investor in
the home one are sharing that in lock

460
00:15:05,506 –> 00:15:11,976
[david_shapiro]: step so um i think that’s probably
the the safest way to look at it

461
00:15:12,059 –> 00:15:12,283
[ramsey_d_smith]: oh

462
00:15:12,377 –> 00:15:15,142
[david_shapiro]: without being able to know what the
future is going to be

463
00:15:15,150 –> 00:15:15,395
[paul_tyler]: yeah

464
00:15:15,182 –> 00:15:15,342
[david_shapiro]: like

465
00:15:15,929 –> 00:15:17,692
[ramsey_d_smith]: i mean it just highlights you know
there’s their

466
00:15:18,420 –> 00:15:18,722
[paul_tyler]: oh

467
00:15:18,794 –> 00:15:23,521
[ramsey_d_smith]: there the are different complexities for each
of these solutions i mean they just fundamentally

468
00:15:23,541 –> 00:15:24,864
[ramsey_d_smith]: they have very different risk profiles

469
00:15:25,225 –> 00:15:25,407
[david_shapiro]: yes

470
00:15:25,284 –> 00:15:27,428
[ramsey_d_smith]: and that’s at the heart of your
your your

471
00:15:27,399 –> 00:15:27,420
[paul_tyler]: m

472
00:15:27,628 –> 00:15:28,433
[ramsey_d_smith]: your question paul

473
00:15:28,813 –> 00:15:29,533
[david_shapiro]: oh

474
00:15:29,903 –> 00:15:36,638
[ramsey_d_smith]: is yeah i in an environment where
home prices are flat to down and interest

475
00:15:36,698 –> 00:15:40,745
[ramsey_d_smith]: rates are spiking then the hakim loan
is kind of a tough call right

476
00:15:41,040 –> 00:15:41,242
[paul_tyler]: right

477
00:15:41,226 –> 00:15:41,833
[david_shapiro]: hm

478
00:15:42,448 –> 00:15:47,837
[ramsey_d_smith]: and an en iron ment where home
prices are expanding dramatically and interest rates are

479
00:15:47,917 –> 00:15:53,676
[ramsey_d_smith]: low then then he may be the
better one in some sense you got to

480
00:15:53,716 –> 00:15:53,756
[ramsey_d_smith]: do

481
00:15:54,750 –> 00:15:54,971
[paul_tyler]: yeah

482
00:15:54,958 –> 00:15:56,641
[ramsey_d_smith]: if you do a monte carlo analysis
but

483
00:15:56,643 –> 00:15:56,784
[david_shapiro]: yeah

484
00:15:57,162 –> 00:15:57,262
[ramsey_d_smith]: as

485
00:15:57,592 –> 00:15:58,320
[paul_tyler]: oh

486
00:15:57,803 –> 00:16:02,691
[ramsey_d_smith]: it seems to me like a fiduciary
advisor is they’re thinking about um providing

487
00:16:02,543 –> 00:16:02,563
[paul_tyler]: i

488
00:16:02,751 –> 00:16:05,316
[ramsey_d_smith]: a menu to their to their customers

489
00:16:05,160 –> 00:16:06,300
[paul_tyler]: oh

490
00:16:06,277 –> 00:16:09,943
[ramsey_d_smith]: in addition to sort of factoring in
those preferences that you were talking about david

491
00:16:09,960 –> 00:16:09,980
[paul_tyler]: m

492
00:16:10,003 –> 00:16:10,644
[ramsey_d_smith]: which is i

493
00:16:10,680 –> 00:16:11,820
[paul_tyler]: oh

494
00:16:10,745 –> 00:16:14,371
[ramsey_d_smith]: want to i want something that’s alone
versus now an equity share like that

495
00:16:14,463 –> 00:16:15,313
[david_shapiro]: yeah

496
00:16:14,591 –> 00:16:17,015
[ramsey_d_smith]: that decision which may be is much
sort of

497
00:16:17,040 –> 00:16:17,383
[paul_tyler]: oh

498
00:16:17,055 –> 00:16:18,117
[ramsey_d_smith]: a personal preference thing

499
00:16:18,420 –> 00:16:18,684
[paul_tyler]: oh

500
00:16:19,709 –> 00:16:23,956
[ramsey_d_smith]: addition to this notion of well what
is the risk propel i want to have

501
00:16:24,036 –> 00:16:26,981
[ramsey_d_smith]: vcvfthis house you know over the course
of the next ten or fifteen twenty years

502
00:16:27,061 –> 00:16:30,547
[ramsey_d_smith]: so it’s look i think there need
to be more answers like i think i

503
00:16:30,567 –> 00:16:31,388
[ramsey_d_smith]: think you need to have more

504
00:16:31,410 –> 00:16:31,430
[paul_tyler]: m

505
00:16:31,729 –> 00:16:36,633
[ramsey_d_smith]: ways to sort of peel this onion
effectively so i think it’s you know you’re

506
00:16:36,673 –> 00:16:40,697
[ramsey_d_smith]: bringing another practical solution which is very
interesting now i had

507
00:16:40,674 –> 00:16:40,716
[paul_tyler]: a

508
00:16:40,737 –> 00:16:44,031
[ramsey_d_smith]: a question about i had a question
about costs

509
00:16:43,890 –> 00:16:44,071
[paul_tyler]: oh

510
00:16:44,512 –> 00:16:47,937
[ramsey_d_smith]: about maintenance cost so one of the
other things that often seems that sort of

511
00:16:48,037 –> 00:16:51,884
[ramsey_d_smith]: not get discussed enough and where i
think sometimes people get into trouble you know

512
00:16:51,964 –> 00:16:55,790
[ramsey_d_smith]: with with their homes is that you
know when they get a reverse mortgage as

513
00:16:55,870 –> 00:16:57,974
[ramsey_d_smith]: they take money out right which is
great

514
00:16:57,715 –> 00:16:58,303
[david_shapiro]: hm

515
00:16:59,076 –> 00:17:03,463
[ramsey_d_smith]: but sometimes they get sometimes property taxes
and other sort of maintenance costs end up

516
00:17:03,523 –> 00:17:10,316
[ramsey_d_smith]: being the problem that comes up so
under your under your construct dohomoners still bear

517
00:17:10,436 –> 00:17:14,585
[ramsey_d_smith]: all of those all of those maintenance
of property tax costs et cetera or is

518
00:17:14,605 –> 00:17:15,647
[ramsey_d_smith]: there any sharing of that

519
00:17:16,033 –> 00:17:18,277
[david_shapiro]: no because we don’t go on title
we’re

520
00:17:18,120 –> 00:17:18,140
[paul_tyler]: m

521
00:17:18,317 –> 00:17:18,858
[david_shapiro]: not owners of

522
00:17:18,889 –> 00:17:19,012
[ramsey_d_smith]: yeah

523
00:17:18,918 –> 00:17:22,724
[david_shapiro]: the home so they pay the property
taxes you know they pay their insurance

524
00:17:23,399 –> 00:17:23,682
[ramsey_d_smith]: oh

525
00:17:23,786 –> 00:17:25,709
[david_shapiro]: you know we do have provisions

526
00:17:26,040 –> 00:17:26,385
[paul_tyler]: oh

527
00:17:26,949 –> 00:17:27,131
[ramsey_d_smith]: yeah

528
00:17:27,192 –> 00:17:32,481
[david_shapiro]: where e can step in and if
they fall behind we can make what we

529
00:17:32,489 –> 00:17:32,509
[ramsey_d_smith]: m

530
00:17:32,541 –> 00:17:35,846
[david_shapiro]: call preservation payments and then we just
tack those on to

531
00:17:35,918 –> 00:17:35,939
[ramsey_d_smith]: m

532
00:17:35,926 –> 00:17:39,873
[david_shapiro]: the back end and you know they
are you know they are required to just

533
00:17:39,973 –> 00:17:44,501
[david_shapiro]: maintain the home it doesn’t require them
to improve the home um so if if

534
00:17:44,581 –> 00:17:47,786
[david_shapiro]: the home is in disrepair and they
haven’t improved it then there

535
00:17:47,802 –> 00:17:48,869
[ramsey_d_smith]: hm

536
00:17:47,846 –> 00:17:49,028
[david_shapiro]: is an adjustment at the

537
00:17:48,989 –> 00:17:49,232
[ramsey_d_smith]: oh

538
00:17:49,068 –> 00:17:53,996
[david_shapiro]: back end you know to take into
account the cost of you know making

539
00:17:53,880 –> 00:17:54,101
[paul_tyler]: oh

540
00:17:54,056 –> 00:17:57,983
[david_shapiro]: that home you know up dating whatever
maintenance that needs to be done

541
00:17:58,269 –> 00:17:58,290
[paul_tyler]: m

542
00:17:58,424 –> 00:18:00,447
[david_shapiro]: that gets factored in but you

543
00:18:00,480 –> 00:18:00,722
[paul_tyler]: oh

544
00:18:00,487 –> 00:18:01,689
[david_shapiro]: know that that’s kind of the only

545
00:18:01,528 –> 00:18:01,650
[paul_tyler]: yeah

546
00:18:01,729 –> 00:18:03,152
[david_shapiro]: way that we can attack that

547
00:18:04,993 –> 00:18:05,113
[ramsey_d_smith]: so

548
00:18:05,180 –> 00:18:05,261
[paul_tyler]: ah

549
00:18:05,694 –> 00:18:10,622
[ramsey_d_smith]: another another another item that we talked
about of leading up to this conversation

550
00:18:10,537 –> 00:18:10,558
[david_shapiro]: m

551
00:18:10,743 –> 00:18:14,529
[ramsey_d_smith]: was who you’re going to de fund
this so the tire

552
00:18:14,522 –> 00:18:14,542
[paul_tyler]: i

553
00:18:14,629 –> 00:18:15,971
[ramsey_d_smith]: mortgage industry or also of

554
00:18:15,960 –> 00:18:16,224
[paul_tyler]: oh

555
00:18:16,011 –> 00:18:17,314
[ramsey_d_smith]: like ll call it the mortgage

556
00:18:17,323 –> 00:18:17,624
[david_shapiro]: oh

557
00:18:17,354 –> 00:18:21,761
[ramsey_d_smith]: of mortgage equivalent industry ultimately is funded
by pools of assets that can be insurance

558
00:18:21,801 –> 00:18:22,142
[ramsey_d_smith]: companies

559
00:18:22,132 –> 00:18:22,153
[david_shapiro]: m

560
00:18:22,182 –> 00:18:24,505
[ramsey_d_smith]: that can be institutional investors in some
cases it’s

561
00:18:24,420 –> 00:18:24,664
[paul_tyler]: oh

562
00:18:24,853 –> 00:18:24,873
[david_shapiro]: m

563
00:18:25,187 –> 00:18:31,497
[ramsey_d_smith]: venture capitalists it’s pension funds sovereign wealth
funds and now you are

564
00:18:31,440 –> 00:18:31,702
[paul_tyler]: oh

565
00:18:31,818 –> 00:18:35,063
[ramsey_d_smith]: you would mention that you’re building a
product that you think is

566
00:18:34,980 –> 00:18:35,242
[paul_tyler]: oh

567
00:18:35,604 –> 00:18:38,550
[ramsey_d_smith]: particularly interesting to sort of one set
of investors so tell

568
00:18:38,483 –> 00:18:38,603
[david_shapiro]: yeah

569
00:18:38,591 –> 00:18:39,054
[ramsey_d_smith]: us about that

570
00:18:39,011 –> 00:18:39,780
[paul_tyler]: yeah

571
00:18:39,244 –> 00:18:44,272
[david_shapiro]: yeah our product is specifically designed to
meet the needs of both the investor and

572
00:18:44,352 –> 00:18:49,681
[david_shapiro]: the home owner and our targeted investor
long term our insurance companies to hold this

573
00:18:49,741 –> 00:18:53,608
[david_shapiro]: on their balance and he rated security
so when we designed our product

574
00:18:53,249 –> 00:18:54,089
[ramsey_d_smith]: yeah

575
00:18:53,708 –> 00:18:58,756
[david_shapiro]: and you’ll note that in the example
there’s thirty percent equity on top right that

576
00:18:58,937 –> 00:19:00,860
[david_shapiro]: there’s thirty percent equity in the home

577
00:19:01,959 –> 00:19:01,980
[paul_tyler]: m

578
00:19:02,463 –> 00:19:08,112
[david_shapiro]: we needed to have that thirty per
cent cushion because when the rating agencies stress

579
00:19:08,272 –> 00:19:10,336
[david_shapiro]: this asset the asset back security

580
00:19:10,500 –> 00:19:10,721
[paul_tyler]: yah

581
00:19:10,917 –> 00:19:12,139
[david_shapiro]: the first thing they do is

582
00:19:12,089 –> 00:19:12,210
[paul_tyler]: yah

583
00:19:12,279 –> 00:19:14,883
[david_shapiro]: take an overnight drop in home prices
thirty

584
00:19:14,648 –> 00:19:14,669
[ramsey_d_smith]: m

585
00:19:14,923 –> 00:19:15,264
[david_shapiro]: per cent

586
00:19:15,210 –> 00:19:15,472
[paul_tyler]: oh

587
00:19:15,925 –> 00:19:16,326
[david_shapiro]: and then they

588
00:19:16,278 –> 00:19:16,419
[paul_tyler]: yeah

589
00:19:16,386 –> 00:19:18,349
[david_shapiro]: look at eight to twelve year recovery

590
00:19:17,910 –> 00:19:19,050
[paul_tyler]: oh yeah

591
00:19:18,950 –> 00:19:19,050
[david_shapiro]: so

592
00:19:19,740 –> 00:19:19,981
[paul_tyler]: oh

593
00:19:19,751 –> 00:19:22,095
[david_shapiro]: for us to get a rated security
we needed to have that

594
00:19:22,149 –> 00:19:22,170
[paul_tyler]: m

595
00:19:22,155 –> 00:19:25,621
[david_shapiro]: thirty per cent and that’s one of
the reasons that we have that piece

596
00:19:25,479 –> 00:19:25,500
[paul_tyler]: m

597
00:19:25,681 –> 00:19:31,531
[david_shapiro]: of the equity rum and you know
eventually you know when we create these asset

598
00:19:31,571 –> 00:19:35,838
[david_shapiro]: back securities insurance companies will be able
to hold those in you know the kinds

599
00:19:35,918 –> 00:19:40,105
[david_shapiro]: of volumes that we need to be
able to meet the demand from the consumer

600
00:19:40,346 –> 00:19:40,546
[david_shapiro]: i mean

601
00:19:41,078 –> 00:19:41,099
[ramsey_d_smith]: m

602
00:19:41,448 –> 00:19:42,209
[david_shapiro]: the residential

603
00:19:42,270 –> 00:19:43,440
[paul_tyler]: oh

604
00:19:42,589 –> 00:19:43,371
[david_shapiro]: residential homes

605
00:19:43,289 –> 00:19:43,612
[ramsey_d_smith]: yeah

606
00:19:43,431 –> 00:19:45,134
[david_shapiro]: in the country or what closing in
on

607
00:19:45,147 –> 00:19:45,308
[ramsey_d_smith]: right

608
00:19:45,935 –> 00:19:51,685
[david_shapiro]: forty trillion dollars thirty seven thirty eight
trillion dollars there’s twenty trillion dollars of twenty

609
00:19:52,005 –> 00:19:58,175
[david_shapiro]: twenty six trillion dollars now of equity
in homes so the massive scale of this

610
00:19:58,356 –> 00:20:03,044
[david_shapiro]: and and you consider the fact that
we’re only working through financial advice ers and

611
00:20:03,444 –> 00:20:07,731
[david_shapiro]: folks that have a trusted relationship and
they’re integrating the home into the

612
00:20:07,709 –> 00:20:07,953
[ramsey_d_smith]: oh

613
00:20:07,771 –> 00:20:11,578
[david_shapiro]: financial planning process you know there’s we
have to have significant

614
00:20:11,549 –> 00:20:11,856
[ramsey_d_smith]: yeah

615
00:20:12,139 –> 00:20:15,965
[david_shapiro]: capital to come into the market and
the security ation s the only way to

616
00:20:16,025 –> 00:20:19,271
[david_shapiro]: do that and and that you guys
know that that takes a long time you

617
00:20:19,291 –> 00:20:20,933
[david_shapiro]: know i was fortunate enough back

618
00:20:20,888 –> 00:20:20,909
[ramsey_d_smith]: m

619
00:20:21,054 –> 00:20:23,237
[david_shapiro]: in two thousand and seventeen

620
00:20:23,558 –> 00:20:23,579
[ramsey_d_smith]: m

621
00:20:23,878 –> 00:20:23,978
[david_shapiro]: to

622
00:20:24,090 –> 00:20:24,352
[paul_tyler]: oh

623
00:20:24,119 –> 00:20:28,706
[david_shapiro]: spend an hour and a half with
luraneri you know who created the mortgage back

624
00:20:28,766 –> 00:20:30,089
[david_shapiro]: securities and

625
00:20:31,080 –> 00:20:31,710
[paul_tyler]: yeah

626
00:20:31,491 –> 00:20:35,417
[david_shapiro]: you know i have to admit that
when i designed this product initially i designed

627
00:20:35,458 –> 00:20:40,125
[david_shapiro]: it in two thousand and five so
i had my first year witty company back

628
00:20:40,185 –> 00:20:44,753
[david_shapiro]: in two thousand five which was you
know well before the housing crisis then nate

629
00:20:45,033 –> 00:20:48,059
[david_shapiro]: adventures was an investor oppenheim and bernhimerphones

630
00:20:47,969 –> 00:20:48,113
[ramsey_d_smith]: ye

631
00:20:48,199 –> 00:20:48,339
[david_shapiro]: were

632
00:20:48,360 –> 00:20:48,723
[paul_tyler]: yes

633
00:20:48,399 –> 00:20:49,721
[david_shapiro]: investors and

634
00:20:50,288 –> 00:20:50,309
[ramsey_d_smith]: m

635
00:20:50,543 –> 00:20:52,145
[david_shapiro]: you know then we morgan stanley

636
00:20:52,049 –> 00:20:53,639
[ramsey_d_smith]: oh

637
00:20:52,205 –> 00:20:52,326
[david_shapiro]: was

638
00:20:52,230 –> 00:20:53,100
[paul_tyler]: oh

639
00:20:52,366 –> 00:20:53,808
[david_shapiro]: gonna securitize

640
00:20:53,849 –> 00:20:53,990
[ramsey_d_smith]: ye

641
00:20:53,888 –> 00:20:56,753
[david_shapiro]: the asset and then the housing crisis
came so i’m sitting

642
00:20:56,641 –> 00:20:56,802
[paul_tyler]: yeah

643
00:20:56,833 –> 00:20:57,254
[david_shapiro]: with lou

644
00:20:57,173 –> 00:20:57,194
[ramsey_d_smith]: a

645
00:20:57,454 –> 00:20:59,878
[david_shapiro]: in two thousand seventeen and i said
i’m just curious how

646
00:20:59,939 –> 00:21:00,202
[ramsey_d_smith]: yeah

647
00:20:59,958 –> 00:21:02,342
[david_shapiro]: long did it take before the first
mortgage

648
00:21:02,379 –> 00:21:02,400
[paul_tyler]: m

649
00:21:02,663 –> 00:21:06,549
[david_shapiro]: security you know how long did it
take you to get from concept to the

650
00:21:06,609 –> 00:21:08,192
[david_shapiro]: security and he said twelve years

651
00:21:08,648 –> 00:21:08,669
[ramsey_d_smith]: m

652
00:21:08,713 –> 00:21:09,174
[david_shapiro]: and i said so

653
00:21:09,141 –> 00:21:09,264
[paul_tyler]: wow

654
00:21:09,254 –> 00:21:11,377
[david_shapiro]: i said okay well i’m about in
that fall part

655
00:21:11,639 –> 00:21:11,659
[ramsey_d_smith]: m

656
00:21:12,539 –> 00:21:12,639
[david_shapiro]: so

657
00:21:13,500 –> 00:21:13,722
[paul_tyler]: yeah

658
00:21:14,062 –> 00:21:14,583
[david_shapiro]: i don’t know i’m

659
00:21:14,508 –> 00:21:14,729
[ramsey_d_smith]: right

660
00:21:14,603 –> 00:21:15,224
[david_shapiro]: going to feel bad

661
00:21:15,238 –> 00:21:15,360
[paul_tyler]: yeah

662
00:21:15,304 –> 00:21:18,069
[david_shapiro]: about that it does take time but
you know i think now

663
00:21:17,999 –> 00:21:18,323
[ramsey_d_smith]: oh

664
00:21:18,209 –> 00:21:18,890
[david_shapiro]: we are within

665
00:21:19,417 –> 00:21:19,538
[ramsey_d_smith]: yeah

666
00:21:19,531 –> 00:21:24,820
[david_shapiro]: within a year maybe a little less
than that three quarters of a year to

667
00:21:24,880 –> 00:21:31,371
[david_shapiro]: get a rated security out and there
have been three securitizations of our competitors products

668
00:21:31,992 –> 00:21:36,259
[david_shapiro]: they haven’t been rated nor can they
be rated the design of our competitors products

669
00:21:36,339 –> 00:21:41,965
[david_shapiro]: don’t allow for securities tion um either
either they have a ten year term on

670
00:21:42,026 –> 00:21:44,147
[david_shapiro]: them that’s problematic to the rating agencies

671
00:21:44,069 –> 00:21:44,229
[ramsey_d_smith]: yeah

672
00:21:44,408 –> 00:21:46,509
[david_shapiro]: or they’re based on home price

673
00:21:46,409 –> 00:21:46,592
[ramsey_d_smith]: yeah

674
00:21:46,589 –> 00:21:48,451
[david_shapiro]: appreciation and a shock loss you

675
00:21:48,402 –> 00:21:48,959
[ramsey_d_smith]: yeah

676
00:21:48,511 –> 00:21:53,307
[david_shapiro]: know would blow it out so we
feel that we’re perfectly positioned to be the

677
00:21:53,348 –> 00:21:58,656
[david_shapiro]: leaders in a rated security and that’s
why we’re working you know primarily with insurance

678
00:21:58,696 –> 00:21:59,498
[david_shapiro]: companies and

679
00:21:59,610 –> 00:21:59,893
[paul_tyler]: oh

680
00:21:59,738 –> 00:22:03,665
[david_shapiro]: with the hedge fund the private equity
fun that own insurance

681
00:22:03,540 –> 00:22:03,560
[paul_tyler]: m

682
00:22:03,725 –> 00:22:07,191
[david_shapiro]: companies because they’re the best partners for
us to achieve that

683
00:22:08,540 –> 00:22:13,509
[paul_tyler]: yeah well capital charges are can be
very consequential as you know we

684
00:22:13,889 –> 00:22:14,172
[ramsey_d_smith]: oh

685
00:22:14,170 –> 00:22:18,657
[paul_tyler]: at a prior company we we put
a lot of effort into trying to partner

686
00:22:18,697 –> 00:22:23,746
[paul_tyler]: with a company down you know so
stepping in and providing jumbo

687
00:22:23,498 –> 00:22:23,519
[ramsey_d_smith]: m

688
00:22:24,006 –> 00:22:24,787
[paul_tyler]: reverse mortgages

689
00:22:24,613 –> 00:22:24,633
[david_shapiro]: m

690
00:22:24,968 –> 00:22:25,789
[paul_tyler]: right on hecham

691
00:22:25,563 –> 00:22:25,684
[david_shapiro]: yeah

692
00:22:26,871 –> 00:22:32,180
[paul_tyler]: loans and the yell look right now
compared to rams investing in a

693
00:22:32,219 –> 00:22:32,482
[ramsey_d_smith]: oh

694
00:22:32,520 –> 00:22:34,444
[paul_tyler]: corporate bonds the challenge

695
00:22:34,242 –> 00:22:34,445
[ramsey_d_smith]: like

696
00:22:34,484 –> 00:22:35,365
[paul_tyler]: though david was the

697
00:22:35,669 –> 00:22:36,117
[ramsey_d_smith]: oh

698
00:22:36,126 –> 00:22:38,190
[paul_tyler]: was a capital charge and i can’t
remember what the rating

699
00:22:38,699 –> 00:22:38,960
[ramsey_d_smith]: oh

700
00:22:39,071 –> 00:22:41,996
[paul_tyler]: you know was hat were determined but
it was enough to sort of take the

701
00:22:42,036 –> 00:22:43,619
[paul_tyler]: yield down like below

702
00:22:44,288 –> 00:22:44,309
[ramsey_d_smith]: m

703
00:22:44,323 –> 00:22:44,833
[david_shapiro]: oh

704
00:22:44,500 –> 00:22:51,612
[paul_tyler]: quickly below corporate bonds do you have
any indication that you’ll end up um you’ll

705
00:22:51,652 –> 00:22:56,019
[paul_tyler]: be rated higher on the n c
scale and sort

706
00:22:56,129 –> 00:22:56,469
[ramsey_d_smith]: yeah

707
00:22:57,064 –> 00:23:00,417
[paul_tyler]: a reverse mortgage sitting on a insurance
balance sheet

708
00:23:00,733 –> 00:23:01,875
[david_shapiro]: well are you talking about

709
00:23:02,175 –> 00:23:02,195
[ramsey_d_smith]: a

710
00:23:02,296 –> 00:23:05,761
[david_shapiro]: scenario where the insurance company so that’s
a jumbo

711
00:23:05,559 –> 00:23:05,580
[paul_tyler]: m

712
00:23:05,861 –> 00:23:07,664
[david_shapiro]: so they would be holding those on
their balance seat

713
00:23:07,590 –> 00:23:08,550
[paul_tyler]: oh

714
00:23:07,684 –> 00:23:09,147
[david_shapiro]: those aren’t securitized right they were

715
00:23:09,150 –> 00:23:09,210
[paul_tyler]: no

716
00:23:09,167 –> 00:23:09,528
[david_shapiro]: just holding

717
00:23:09,391 –> 00:23:09,571
[paul_tyler]: not

718
00:23:09,568 –> 00:23:09,688
[david_shapiro]: him on

719
00:23:09,692 –> 00:23:09,832
[paul_tyler]: not

720
00:23:09,728 –> 00:23:10,109
[david_shapiro]: their balance

721
00:23:09,933 –> 00:23:10,736
[paul_tyler]: securitized

722
00:23:10,149 –> 00:23:10,269
[david_shapiro]: sheet

723
00:23:10,418 –> 00:23:10,439
[ramsey_d_smith]: m

724
00:23:10,930 –> 00:23:11,090
[david_shapiro]: yeah

725
00:23:10,997 –> 00:23:11,198
[paul_tyler]: right

726
00:23:11,250 –> 00:23:11,351
[david_shapiro]: so

727
00:23:11,459 –> 00:23:11,640
[paul_tyler]: hold

728
00:23:11,571 –> 00:23:11,831
[david_shapiro]: so the

729
00:23:11,800 –> 00:23:12,041
[paul_tyler]: holding

730
00:23:11,912 –> 00:23:12,252
[david_shapiro]: surplus

731
00:23:12,082 –> 00:23:12,262
[paul_tyler]: these

732
00:23:12,292 –> 00:23:12,493
[david_shapiro]: strain

733
00:23:12,463 –> 00:23:12,624
[paul_tyler]: yeah

734
00:23:12,573 –> 00:23:15,277
[david_shapiro]: for that was probably fifteen percent right

735
00:23:15,080 –> 00:23:16,069
[paul_tyler]: ah that sounds

736
00:23:15,878 –> 00:23:16,199
[david_shapiro]: um

737
00:23:16,129 –> 00:23:16,634
[paul_tyler]: about right

738
00:23:17,080 –> 00:23:17,240
[david_shapiro]: yeah

739
00:23:17,520 –> 00:23:17,761
[paul_tyler]: oh

740
00:23:17,738 –> 00:23:17,759
[ramsey_d_smith]: m

741
00:23:18,282 –> 00:23:22,249
[david_shapiro]: and so that and that’s problematic with
the asset back

742
00:23:22,230 –> 00:23:22,394
[paul_tyler]: yes

743
00:23:22,329 –> 00:23:24,212
[david_shapiro]: security we think that we’re going to
get

744
00:23:24,570 –> 00:23:24,936
[paul_tyler]: oh

745
00:23:25,379 –> 00:23:25,664
[ramsey_d_smith]: oh

746
00:23:25,695 –> 00:23:26,175
[david_shapiro]: senior

747
00:23:27,209 –> 00:23:28,019
[ramsey_d_smith]: oh

748
00:23:27,898 –> 00:23:29,561
[david_shapiro]: a senior a at

749
00:23:30,719 –> 00:23:30,962
[ramsey_d_smith]: oh

750
00:23:31,043 –> 00:23:32,245
[david_shapiro]: single a or a triple

751
00:23:32,197 –> 00:23:32,318
[ramsey_d_smith]: yeah

752
00:23:32,306 –> 00:23:33,728
[david_shapiro]: b at the worst so

753
00:23:33,719 –> 00:23:33,980
[ramsey_d_smith]: oh

754
00:23:33,870 –> 00:23:34,132
[paul_tyler]: oh

755
00:23:33,888 –> 00:23:35,972
[david_shapiro]: it’s a whole different you know it’s
in an

756
00:23:35,948 –> 00:23:36,090
[paul_tyler]: yeah

757
00:23:36,089 –> 00:23:36,109
[ramsey_d_smith]: m

758
00:23:36,112 –> 00:23:40,101
[david_shapiro]: ice it’s an ice to it’s the
surplus trains going to be a lot less

759
00:23:41,379 –> 00:23:44,545
[ramsey_d_smith]: who holds the rest of it so
you’ve got right the senior

760
00:23:44,370 –> 00:23:46,009
[paul_tyler]: yeah

761
00:23:44,665 –> 00:23:45,266
[ramsey_d_smith]: trunch is what

762
00:23:45,303 –> 00:23:45,445
[david_shapiro]: yeah

763
00:23:45,326 –> 00:23:46,768
[ramsey_d_smith]: the insurance companies are going to buy

764
00:23:47,183 –> 00:23:47,325
[david_shapiro]: yeah

765
00:23:47,449 –> 00:23:48,772
[ramsey_d_smith]: and then you’re going to have you
know

766
00:23:49,020 –> 00:23:49,243
[paul_tyler]: oh

767
00:23:49,312 –> 00:23:52,578
[ramsey_d_smith]: lower trenches and i guess maybe like
an equity trunch or something equivalent

768
00:23:52,483 –> 00:23:52,584
[david_shapiro]: oh

769
00:23:52,980 –> 00:23:53,242
[paul_tyler]: oh

770
00:23:53,079 –> 00:23:56,645
[ramsey_d_smith]: sort of thinking of it in the
framework of a like a collateral ized dead

771
00:23:56,673 –> 00:23:56,813
[david_shapiro]: yeah

772
00:23:56,745 –> 00:23:57,266
[ramsey_d_smith]: obligation

773
00:23:57,456 –> 00:23:58,379
[david_shapiro]: yeah yeah exactly

774
00:23:59,269 –> 00:24:03,656
[ramsey_d_smith]: who are the who’s going to retain
the know all the risk all the risky

775
00:24:03,696 –> 00:24:04,598
[ramsey_d_smith]: or trenches do you think

776
00:24:04,719 –> 00:24:04,740
[paul_tyler]: m

777
00:24:04,999 –> 00:24:06,734
[ramsey_d_smith]: do you see his target audience for
those

778
00:24:06,743 –> 00:24:06,883
[david_shapiro]: well

779
00:24:07,020 –> 00:24:07,261
[paul_tyler]: oh

780
00:24:07,063 –> 00:24:10,128
[david_shapiro]: that’s where i think the hedge funds
come in the you know the hedge

781
00:24:10,092 –> 00:24:10,619
[ramsey_d_smith]: hm

782
00:24:10,168 –> 00:24:11,691
[david_shapiro]: funds come in insurance

783
00:24:11,550 –> 00:24:11,791
[paul_tyler]: oh

784
00:24:11,751 –> 00:24:13,514
[david_shapiro]: companies that have other arms

785
00:24:13,470 –> 00:24:13,691
[paul_tyler]: oh

786
00:24:13,955 –> 00:24:17,000
[david_shapiro]: that you know a lot of insurance
companies want to buy the a b vertical

787
00:24:16,829 –> 00:24:17,133
[ramsey_d_smith]: oh

788
00:24:18,422 –> 00:24:18,662
[david_shapiro]: and then

789
00:24:18,728 –> 00:24:18,749
[ramsey_d_smith]: m

790
00:24:18,863 –> 00:24:20,944
[david_shapiro]: got you now then you’ve got the
equity trench which is

791
00:24:20,909 –> 00:24:21,539
[ramsey_d_smith]: yeah

792
00:24:21,085 –> 00:24:23,847
[david_shapiro]: you know when we do them you
know we’ll be we’ll be holding the equity

793
00:24:24,027 –> 00:24:26,189
[david_shapiro]: trench so but

794
00:24:26,372 –> 00:24:26,575
[ramsey_d_smith]: got

795
00:24:26,409 –> 00:24:26,609
[david_shapiro]: you know

796
00:24:26,635 –> 00:24:26,696
[ramsey_d_smith]: it

797
00:24:26,690 –> 00:24:29,252
[david_shapiro]: lots of interest in the a and
the b

798
00:24:30,000 –> 00:24:30,263
[paul_tyler]: yeah

799
00:24:31,141 –> 00:24:31,262
[ramsey_d_smith]: yeah

800
00:24:31,981 –> 00:24:32,485
[paul_tyler]: interesting

801
00:24:32,329 –> 00:24:36,636
[ramsey_d_smith]: so by the way i think i’m
just want to make a circle back to

802
00:24:37,337 –> 00:24:41,344
[ramsey_d_smith]: your description of this structure earlier on
because now i think took me a while

803
00:24:41,364 –> 00:24:42,746
[ramsey_d_smith]: but i think i got it right
so

804
00:24:43,008 –> 00:24:43,573
[david_shapiro]: hm

805
00:24:43,527 –> 00:24:45,811
[ramsey_d_smith]: let’s go back to example of the

806
00:24:45,789 –> 00:24:45,810
[paul_tyler]: m

807
00:24:47,013 –> 00:24:48,676
[ramsey_d_smith]: it’s a it’s a it’s a million
dollar loan

808
00:24:49,325 –> 00:24:49,345
[david_shapiro]: h

809
00:24:49,437 –> 00:24:50,098
[ramsey_d_smith]: right and

810
00:24:50,032 –> 00:24:50,893
[david_shapiro]: m yeah

811
00:24:50,439 –> 00:24:51,521
[ramsey_d_smith]: you you your

812
00:24:51,510 –> 00:24:51,712
[paul_tyler]: oh

813
00:24:51,581 –> 00:24:54,606
[ramsey_d_smith]: organization puts up forty per cent so
you you give

814
00:24:54,510 –> 00:24:54,652
[paul_tyler]: oh

815
00:24:54,726 –> 00:24:57,210
[ramsey_d_smith]: four hundred thousand dollars to the participant

816
00:24:57,566 –> 00:24:58,153
[david_shapiro]: hm

817
00:24:57,750 –> 00:24:58,032
[paul_tyler]: oh

818
00:24:57,911 –> 00:25:03,361
[ramsey_d_smith]: right so if the let’s let’s use
two scenarios one scenario is the value of

819
00:25:03,381 –> 00:25:04,042
[ramsey_d_smith]: the house doubles

820
00:25:04,050 –> 00:25:04,354
[paul_tyler]: oh

821
00:25:04,663 –> 00:25:06,105
[ramsey_d_smith]: over the course of the ensuing years

822
00:25:06,688 –> 00:25:07,243
[david_shapiro]: hm

823
00:25:06,826 –> 00:25:07,047
[ramsey_d_smith]: so it

824
00:25:07,050 –> 00:25:07,311
[paul_tyler]: oh

825
00:25:07,107 –> 00:25:08,790
[ramsey_d_smith]: goes to two million dollars so then

826
00:25:09,090 –> 00:25:09,313
[paul_tyler]: oh

827
00:25:09,230 –> 00:25:10,292
[ramsey_d_smith]: you will you will then

828
00:25:10,162 –> 00:25:10,183
[david_shapiro]: m

829
00:25:10,352 –> 00:25:16,122
[ramsey_d_smith]: get back if i’m correct you’ll get
back you’ll get back

830
00:25:15,960 –> 00:25:16,122
[paul_tyler]: yeah

831
00:25:16,522 –> 00:25:19,988
[ramsey_d_smith]: your original four hundred thousand dollars plus
fifty per

832
00:25:20,010 –> 00:25:20,237
[paul_tyler]: oh

833
00:25:20,028 –> 00:25:21,651
[ramsey_d_smith]: cent the price appreciation so

834
00:25:22,260 –> 00:25:22,521
[paul_tyler]: oh

835
00:25:22,272 –> 00:25:25,416
[ramsey_d_smith]: equify would get nine hundred thousand dollars
back in that scenario is that

836
00:25:25,815 –> 00:25:26,015
[david_shapiro]: well

837
00:25:25,857 –> 00:25:26,257
[ramsey_d_smith]: is that right

838
00:25:26,115 –> 00:25:26,416
[david_shapiro]: now so

839
00:25:26,340 –> 00:25:26,440
[paul_tyler]: ye

840
00:25:26,656 –> 00:25:26,756
[david_shapiro]: so

841
00:25:26,999 –> 00:25:27,019
[ramsey_d_smith]: m

842
00:25:27,037 –> 00:25:29,240
[david_shapiro]: think of it think of it the
house sells

843
00:25:29,150 –> 00:25:29,230
[ramsey_d_smith]: no

844
00:25:29,441 –> 00:25:31,604
[david_shapiro]: right so we know with the ending
value of the houses

845
00:25:31,720 –> 00:25:31,881
[ramsey_d_smith]: yeah

846
00:25:32,105 –> 00:25:34,649
[david_shapiro]: and then the closing statements the easiest
way to look at that so

847
00:25:34,659 –> 00:25:34,680
[paul_tyler]: m

848
00:25:34,750 –> 00:25:35,210
[david_shapiro]: the closing

849
00:25:34,958 –> 00:25:35,389
[ramsey_d_smith]: m yeah

850
00:25:35,270 –> 00:25:37,094
[david_shapiro]: statement we get back r four

851
00:25:38,116 –> 00:25:38,236
[ramsey_d_smith]: yeah

852
00:25:38,396 –> 00:25:39,679
[david_shapiro]: the home owner gets

853
00:25:39,630 –> 00:25:40,429
[paul_tyler]: yea

854
00:25:39,920 –> 00:25:43,617
[david_shapiro]: three hundred right because they’re protected

855
00:25:43,481 –> 00:25:43,665
[ramsey_d_smith]: right

856
00:25:43,718 –> 00:25:47,631
[david_shapiro]: equity we don’t share in and anything
above that is split fifty fifty

857
00:25:50,379 –> 00:25:56,547
[ramsey_d_smith]: okay so even though it was a
million dollar was a million dollar house but

858
00:25:56,687 –> 00:26:02,811
[ramsey_d_smith]: you’re of the original principle amount you
will have a claim on on seven hundred

859
00:26:02,851 –> 00:26:04,416
[ramsey_d_smith]: thousand dollars worth then

860
00:26:06,103 –> 00:26:07,451
[david_shapiro]: um nope

861
00:26:07,620 –> 00:26:07,781
[paul_tyler]: well

862
00:26:07,712 –> 00:26:07,853
[david_shapiro]: the

863
00:26:07,861 –> 00:26:07,921
[paul_tyler]: no

864
00:26:08,074 –> 00:26:08,295
[david_shapiro]: home

865
00:26:08,161 –> 00:26:10,265
[paul_tyler]: no ud be the appreciation right so

866
00:26:10,559 –> 00:26:10,781
[ramsey_d_smith]: yeah

867
00:26:10,565 –> 00:26:10,686
[paul_tyler]: tell

868
00:26:10,623 –> 00:26:11,533
[david_shapiro]: yeah

869
00:26:10,746 –> 00:26:11,747
[paul_tyler]: me if i’m getting it right so

870
00:26:12,003 –> 00:26:12,763
[david_shapiro]: yeah

871
00:26:12,288 –> 00:26:16,275
[paul_tyler]: the million dollar house goes to two
million ramsey see if i understand this

872
00:26:16,252 –> 00:26:16,413
[ramsey_d_smith]: yeah

873
00:26:16,335 –> 00:26:22,445
[paul_tyler]: so so you keep three hundred i
was in david you get you split fifty

874
00:26:22,545 –> 00:26:25,771
[paul_tyler]: fifty of the hundred the million that
went up is that right so you

875
00:26:25,741 –> 00:26:25,821
[ramsey_d_smith]: oh

876
00:26:25,791 –> 00:26:27,073
[paul_tyler]: would get half a million is that

877
00:26:27,029 –> 00:26:27,869
[ramsey_d_smith]: yeah

878
00:26:27,133 –> 00:26:30,018
[paul_tyler]: right or am i wrong here see
how i understood

879
00:26:30,069 –> 00:26:30,229
[ramsey_d_smith]: that’s

880
00:26:30,078 –> 00:26:30,218
[paul_tyler]: this

881
00:26:30,249 –> 00:26:30,349
[ramsey_d_smith]: what

882
00:26:30,373 –> 00:26:30,656
[david_shapiro]: oh

883
00:26:30,710 –> 00:26:32,151
[ramsey_d_smith]: that was my original version so that’s

884
00:26:32,070 –> 00:26:32,312
[paul_tyler]: okay

885
00:26:32,211 –> 00:26:35,735
[ramsey_d_smith]: like that’s nine hundred thousand bucks on
the up side in the upside scenario

886
00:26:36,514 –> 00:26:36,655
[david_shapiro]: yeah

887
00:26:36,736 –> 00:26:38,498
[ramsey_d_smith]: but it sounds like it’s more complicated
than that

888
00:26:38,743 –> 00:26:40,354
[david_shapiro]: yeah no it’s it’s

889
00:26:41,044 –> 00:26:41,206
[ramsey_d_smith]: yeah

890
00:26:41,436 –> 00:26:43,038
[david_shapiro]: now so all right so the

891
00:26:43,200 –> 00:26:43,489
[paul_tyler]: oh

892
00:26:43,539 –> 00:26:44,441
[david_shapiro]: math isn’t you know

893
00:26:45,809 –> 00:26:46,416
[ramsey_d_smith]: oh

894
00:26:45,930 –> 00:26:46,233
[paul_tyler]: oh

895
00:26:45,963 –> 00:26:47,225
[david_shapiro]: i’ll turn it over in my c

896
00:26:47,348 –> 00:26:47,369
[ramsey_d_smith]: h

897
00:26:47,405 –> 00:26:48,668
[david_shapiro]: i o at some point in time

898
00:26:48,540 –> 00:26:48,560
[paul_tyler]: m

899
00:26:48,748 –> 00:26:48,868
[david_shapiro]: he’s

900
00:26:48,759 –> 00:26:48,840
[ramsey_d_smith]: no

901
00:26:48,908 –> 00:26:48,928
[david_shapiro]: a

902
00:26:48,921 –> 00:26:49,162
[ramsey_d_smith]: worries

903
00:26:48,968 –> 00:26:49,489
[david_shapiro]: lot better at

904
00:26:49,500 –> 00:26:50,430
[paul_tyler]: yah

905
00:26:49,529 –> 00:26:50,230
[david_shapiro]: that so

906
00:26:51,179 –> 00:26:51,504
[ramsey_d_smith]: yah

907
00:26:51,794 –> 00:26:53,768
[david_shapiro]: so it went from what one million
to two million

908
00:26:53,670 –> 00:26:54,676
[paul_tyler]: one million to two million

909
00:26:54,449 –> 00:26:54,910
[ramsey_d_smith]: one million to

910
00:26:54,963 –> 00:26:55,124
[david_shapiro]: yeah

911
00:26:54,970 –> 00:26:55,450
[ramsey_d_smith]: two million

912
00:26:55,400 –> 00:26:55,541
[paul_tyler]: yeah

913
00:26:55,445 –> 00:26:56,188
[david_shapiro]: okay all right

914
00:26:56,072 –> 00:26:57,854
[ramsey_d_smith]: they got four hundred thousand dollars up
front

915
00:26:58,204 –> 00:26:58,348
[david_shapiro]: yep

916
00:26:58,536 –> 00:26:59,097
[ramsey_d_smith]: and now there’s

917
00:26:59,113 –> 00:27:00,343
[david_shapiro]: oh

918
00:26:59,277 –> 00:27:02,602
[ramsey_d_smith]: there’s a there’s a one million dollar
gain so in my view

919
00:27:02,743 –> 00:27:03,167
[david_shapiro]: oh

920
00:27:02,823 –> 00:27:05,888
[ramsey_d_smith]: as i understand it the one million
dollar game is split fifty fifty between you

921
00:27:05,948 –> 00:27:06,733
[ramsey_d_smith]: and the home on a right

922
00:27:06,973 –> 00:27:13,372
[david_shapiro]: yeah so the two millions now down
to one six after we get our money

923
00:27:13,472 –> 00:27:13,692
[david_shapiro]: back

924
00:27:13,590 –> 00:27:13,772
[ramsey_d_smith]: yeah

925
00:27:14,033 –> 00:27:14,233
[david_shapiro]: right

926
00:27:14,679 –> 00:27:14,901
[ramsey_d_smith]: okay

927
00:27:15,235 –> 00:27:15,335
[david_shapiro]: and

928
00:27:15,312 –> 00:27:15,536
[paul_tyler]: okay

929
00:27:15,535 –> 00:27:19,002
[david_shapiro]: then three hundred goes to the home
owners down to one one

930
00:27:20,015 –> 00:27:20,258
[ramsey_d_smith]: okay

931
00:27:20,713 –> 00:27:21,718
[david_shapiro]: and that’s what’s split

932
00:27:22,440 –> 00:27:25,367
[paul_tyler]: okay all right so we’re close we
were

933
00:27:25,353 –> 00:27:25,474
[david_shapiro]: yeah

934
00:27:25,427 –> 00:27:25,708
[paul_tyler]: close

935
00:27:26,653 –> 00:27:26,915
[david_shapiro]: oh

936
00:27:26,800 –> 00:27:35,655
[paul_tyler]: so that is potentially right this is
where potentially rising super rising home environment ramsey

937
00:27:35,773 –> 00:27:35,976
[david_shapiro]: oh

938
00:27:36,456 –> 00:27:37,357
[paul_tyler]: maybe i go with a home

939
00:27:37,589 –> 00:27:37,930
[ramsey_d_smith]: yeah

940
00:27:37,858 –> 00:27:38,580
[paul_tyler]: the hecham right

941
00:27:39,238 –> 00:27:39,378
[ramsey_d_smith]: yeah

942
00:27:39,741 –> 00:27:40,122
[paul_tyler]: it feels

943
00:27:39,949 –> 00:27:40,111
[ramsey_d_smith]: yeah

944
00:27:40,643 –> 00:27:40,764
[david_shapiro]: yeah

945
00:27:40,663 –> 00:27:43,828
[paul_tyler]: if my goal is to leave money
that i will never see

946
00:27:45,009 –> 00:27:45,132
[ramsey_d_smith]: yeah

947
00:27:45,374 –> 00:27:45,841
[paul_tyler]: my kids

948
00:27:46,193 –> 00:27:50,199
[david_shapiro]: yeah i think that the way we
look at it is we just look at

949
00:27:50,240 –> 00:27:50,841
[david_shapiro]: historical

950
00:27:50,460 –> 00:27:50,480
[paul_tyler]: m

951
00:27:51,201 –> 00:27:55,248
[david_shapiro]: you know we look at you know
look back on twenty years of home price

952
00:27:55,328 –> 00:27:56,029
[david_shapiro]: appreciation

953
00:27:55,548 –> 00:27:55,629
[paul_tyler]: what

954
00:27:56,209 –> 00:27:57,692
[david_shapiro]: you know the last

955
00:27:57,700 –> 00:27:57,760
[paul_tyler]: it

956
00:27:57,772 –> 00:27:57,992
[david_shapiro]: five

957
00:27:57,840 –> 00:27:57,981
[paul_tyler]: was

958
00:27:58,033 –> 00:28:01,458
[david_shapiro]: years are going to level out and
who knows what’s going to happen

959
00:28:01,409 –> 00:28:01,589
[ramsey_d_smith]: yeah

960
00:28:01,518 –> 00:28:05,184
[david_shapiro]: in the future but i mean that’s
the best way for us to analyze anything

961
00:28:05,245 –> 00:28:05,745
[david_shapiro]: is look at where

962
00:28:05,640 –> 00:28:05,863
[paul_tyler]: oh

963
00:28:05,805 –> 00:28:10,153
[david_shapiro]: interest rates have been look at where
home price appreciation has been and then o

964
00:28:10,294 –> 00:28:13,249
[david_shapiro]: make our own view of take our
own view of what the forward looking is

965
00:28:14,211 –> 00:28:14,591
[paul_tyler]: okay well

966
00:28:14,793 –> 00:28:14,914
[david_shapiro]: yeah

967
00:28:14,852 –> 00:28:16,394
[paul_tyler]: maybe let’s just stick there in the
last couple

968
00:28:16,263 –> 00:28:17,173
[david_shapiro]: yeah

969
00:28:16,454 –> 00:28:17,797
[paul_tyler]: few minutes we have about a

970
00:28:17,894 –> 00:28:18,077
[david_shapiro]: yeah

971
00:28:17,937 –> 00:28:22,965
[paul_tyler]: forward looking view of housing now i
don’t judge me on the source but

972
00:28:22,903 –> 00:28:22,923
[david_shapiro]: m

973
00:28:23,005 –> 00:28:23,626
[paul_tyler]: i’m really looking

974
00:28:23,553 –> 00:28:24,103
[david_shapiro]: hm

975
00:28:23,687 –> 00:28:23,747
[paul_tyler]: at

976
00:28:24,119 –> 00:28:24,380
[ramsey_d_smith]: yah

977
00:28:25,289 –> 00:28:25,690
[paul_tyler]: head lind

978
00:28:25,668 –> 00:28:25,808
[ramsey_d_smith]: yah

979
00:28:25,770 –> 00:28:28,254
[paul_tyler]: is rams can pick you can tell
me what new source this is

980
00:28:28,160 –> 00:28:28,180
[ramsey_d_smith]: m

981
00:28:29,055 –> 00:28:34,444
[paul_tyler]: property prices plunge up to twenty percent
across parts of uses buyers

982
00:28:34,123 –> 00:28:34,143
[ramsey_d_smith]: a

983
00:28:34,505 –> 00:28:40,735
[paul_tyler]: shun the market amid buy inflation and
spiking interest rats okay ramsey that was tailing

984
00:28:40,682 –> 00:28:41,219
[ramsey_d_smith]: okay

985
00:28:40,795 –> 00:28:46,204
[paul_tyler]: mail caseshiyeah

986
00:28:42,429 –> 00:28:42,570
[ramsey_d_smith]: gainst

987
00:28:42,523 –> 00:28:42,543
[david_shapiro]: m

988
00:28:42,631 –> 00:28:43,778
[ramsey_d_smith]: that clearly a conservative

989
00:28:43,515 –> 00:28:44,083
[david_shapiro]: hm

990
00:28:43,838 –> 00:28:44,321
[ramsey_d_smith]: new source

991
00:28:45,046 –> 00:28:45,889
[david_shapiro]: yeah yeah

992
00:28:46,545 –> 00:28:48,488
[paul_tyler]: but so david you know what’s the
outlook is

993
00:28:48,523 –> 00:28:49,243
[david_shapiro]: yeah

994
00:28:48,528 –> 00:28:54,196
[paul_tyler]: this you know this rise off of
you pandemic everything low interest rates everybody moving

995
00:28:54,216 –> 00:28:59,465
[paul_tyler]: out of te city now flation comes
up what’s the you if we are going

996
00:28:59,485 –> 00:29:03,734
[paul_tyler]: to invest in your enterprise how do
you how do you look at the housing

997
00:29:03,774 –> 00:29:04,515
[paul_tyler]: market over the next

998
00:29:04,619 –> 00:29:04,880
[ramsey_d_smith]: oh

999
00:29:05,057 –> 00:29:05,758
[paul_tyler]: ten twenty years

1000
00:29:06,043 –> 00:29:06,523
[david_shapiro]: sure and

1001
00:29:06,659 –> 00:29:06,860
[ramsey_d_smith]: oh

1002
00:29:06,904 –> 00:29:11,131
[david_shapiro]: you know for our investors you know
they don’t really care about the next three

1003
00:29:11,191 –> 00:29:12,193
[david_shapiro]: years they’re looking

1004
00:29:12,180 –> 00:29:12,544
[paul_tyler]: oh

1005
00:29:12,313 –> 00:29:17,321
[david_shapiro]: out you know that we expect that
the average duration on any one is going

1006
00:29:17,381 –> 00:29:18,624
[david_shapiro]: to be you know

1007
00:29:18,660 –> 00:29:18,882
[paul_tyler]: oh

1008
00:29:19,505 –> 00:29:20,707
[david_shapiro]: eight to twelve years

1009
00:29:20,400 –> 00:29:20,705
[paul_tyler]: oh

1010
00:29:20,827 –> 00:29:24,594
[david_shapiro]: something like that right so and that’s
why it’s good for insurance companies it’s a

1011
00:29:24,654 –> 00:29:25,575
[david_shapiro]: great long asset

1012
00:29:25,470 –> 00:29:25,673
[paul_tyler]: yes

1013
00:29:25,715 –> 00:29:27,238
[david_shapiro]: to put on their balance sheets to
match up

1014
00:29:27,210 –> 00:29:27,960
[paul_tyler]: oh

1015
00:29:27,318 –> 00:29:29,301
[david_shapiro]: against annuity liabilities life

1016
00:29:29,130 –> 00:29:30,720
[paul_tyler]: yeah

1017
00:29:29,381 –> 00:29:33,929
[david_shapiro]: liability it’s perfect for them so when
you look out i don’t think

1018
00:29:33,929 –> 00:29:35,099
[ramsey_d_smith]: my

1019
00:29:33,989 –> 00:29:37,315
[david_shapiro]: that there’s going to be this huge
bubble that’s going to burst i think that

1020
00:29:37,816 –> 00:29:38,957
[david_shapiro]: we’re going to go from

1021
00:29:38,610 –> 00:29:38,895
[paul_tyler]: yeah

1022
00:29:39,639 –> 00:29:44,346
[david_shapiro]: you know eighteen and twenty percent crazy
home price appreciation

1023
00:29:43,830 –> 00:29:44,134
[paul_tyler]: oh

1024
00:29:44,887 –> 00:29:46,069
[david_shapiro]: down to you know

1025
00:29:46,799 –> 00:29:47,413
[ramsey_d_smith]: ye

1026
00:29:47,412 –> 00:29:48,513
[david_shapiro]: two three four

1027
00:29:48,270 –> 00:29:48,571
[paul_tyler]: oh

1028
00:29:48,894 –> 00:29:50,056
[david_shapiro]: i mean you know we

1029
00:29:50,099 –> 00:29:50,662
[ramsey_d_smith]: oh

1030
00:29:50,176 –> 00:29:51,178
[david_shapiro]: track that data

1031
00:29:51,870 –> 00:29:52,323
[paul_tyler]: my

1032
00:29:52,039 –> 00:29:54,363
[david_shapiro]: every quarter we get up dated forward

1033
00:29:54,360 –> 00:29:55,440
[paul_tyler]: oh

1034
00:29:54,423 –> 00:29:55,365
[david_shapiro]: looking views on

1035
00:29:55,319 –> 00:29:55,583
[ramsey_d_smith]: oh

1036
00:29:55,665 –> 00:29:56,807
[david_shapiro]: on home price appreciation

1037
00:29:56,941 –> 00:29:57,022
[ramsey_d_smith]: no

1038
00:29:57,609 –> 00:30:02,657
[david_shapiro]: and what we’ve seen the trend over
the last two quarters is that the urban

1039
00:30:02,917 –> 00:30:09,228
[david_shapiro]: areas are still holding at very loud
forward looking h p s like we we

1040
00:30:09,368 –> 00:30:12,273
[david_shapiro]: cap our assumption at four per cent
but but

1041
00:30:12,232 –> 00:30:12,435
[ramsey_d_smith]: yes

1042
00:30:12,553 –> 00:30:13,735
[david_shapiro]: what we’re finding is there’s

1043
00:30:13,678 –> 00:30:13,779
[paul_tyler]: it

1044
00:30:13,796 –> 00:30:19,405
[david_shapiro]: still areas that are six eight you
know whatever the rural areas are the areas

1045
00:30:19,505 –> 00:30:20,326
[david_shapiro]: that have softened

1046
00:30:20,370 –> 00:30:21,060
[paul_tyler]: oh

1047
00:30:20,647 –> 00:30:26,637
[david_shapiro]: and they’ve dropped you know anywhere from
you know half a per cent to one

1048
00:30:26,677 –> 00:30:27,038
[david_shapiro]: and a half

1049
00:30:26,910 –> 00:30:27,131
[paul_tyler]: yes

1050
00:30:27,118 –> 00:30:30,904
[david_shapiro]: per cent and we’re just seeing the
flight that pandemic led

1051
00:30:30,810 –> 00:30:31,052
[paul_tyler]: oh

1052
00:30:31,004 –> 00:30:34,089
[david_shapiro]: to people getting out of the city
you know most

1053
00:30:34,050 –> 00:30:34,273
[paul_tyler]: oh

1054
00:30:34,149 –> 00:30:34,210
[david_shapiro]: of

1055
00:30:34,199 –> 00:30:34,504
[ramsey_d_smith]: oh

1056
00:30:34,250 –> 00:30:39,078
[david_shapiro]: those people are gone and you know
the rural areas are the ones that are

1057
00:30:39,639 –> 00:30:45,749
[david_shapiro]: suffering right now but now long term
i think it’s going to normalize and investors

1058
00:30:45,809 –> 00:30:45,989
[david_shapiro]: in our

1059
00:30:46,049 –> 00:30:46,919
[ramsey_d_smith]: yeah

1060
00:30:46,069 –> 00:30:49,775
[david_shapiro]: product i don’t think are are you
know they care a little bit about the

1061
00:30:49,836 –> 00:30:50,316
[david_shapiro]: short term

1062
00:30:50,219 –> 00:30:50,319
[ramsey_d_smith]: ye

1063
00:30:50,376 –> 00:30:53,502
[david_shapiro]: but they really are looking for long
term return long term investments

1064
00:30:53,669 –> 00:30:53,932
[ramsey_d_smith]: oh

1065
00:30:55,800 –> 00:30:56,610
[paul_tyler]: yeah

1066
00:30:56,804 –> 00:30:56,947
[david_shapiro]: yep

1067
00:30:56,870 –> 00:30:58,372
[paul_tyler]: interest now here’s a curve

1068
00:30:58,180 –> 00:30:58,200
[ramsey_d_smith]: m

1069
00:30:58,412 –> 00:30:59,314
[paul_tyler]: ball so our

1070
00:30:59,288 –> 00:30:59,309
[ramsey_d_smith]: m

1071
00:30:59,354 –> 00:31:03,621
[paul_tyler]: mutual acquaintance kinjjqoyis going o come up
to a form we have next week in

1072
00:31:03,661 –> 00:31:05,724
[paul_tyler]: one of the panels is discussion is
on

1073
00:31:05,669 –> 00:31:05,930
[ramsey_d_smith]: yeah

1074
00:31:05,985 –> 00:31:09,591
[paul_tyler]: climate and what that means for retirement
so climate housing

1075
00:31:09,388 –> 00:31:09,509
[ramsey_d_smith]: yeah

1076
00:31:09,631 –> 00:31:11,995
[paul_tyler]: i just watched this house get washed
away in

1077
00:31:11,943 –> 00:31:11,984
[ramsey_d_smith]: he

1078
00:31:12,055 –> 00:31:12,936
[paul_tyler]: yellowstone right

1079
00:31:13,673 –> 00:31:13,796
[david_shapiro]: yeah

1080
00:31:14,078 –> 00:31:19,527
[paul_tyler]: you know with a flooding um what’s
what’s how do you how are you goin

1081
00:31:19,567 –> 00:31:25,536
[paul_tyler]: approach and look at values of homes
in areas that may be impacted by climate

1082
00:31:25,576 –> 00:31:25,956
[paul_tyler]: may not just

1083
00:31:26,012 –> 00:31:26,177
[ramsey_d_smith]: yes

1084
00:31:26,016 –> 00:31:27,018
[paul_tyler]: be coast hilarious right

1085
00:31:27,083 –> 00:31:27,926
[david_shapiro]: yeah yeah yeah yeah

1086
00:31:28,470 –> 00:31:28,670
[paul_tyler]: middle

1087
00:31:28,589 –> 00:31:28,730
[david_shapiro]: yeah

1088
00:31:28,731 –> 00:31:32,103
[paul_tyler]: mountains rybrok new york where i am
right it’s a

1089
00:31:32,103 –> 00:31:32,784
[david_shapiro]: yeah yeah

1090
00:31:32,806 –> 00:31:32,968
[ramsey_d_smith]: yes

1091
00:31:33,247 –> 00:31:33,408
[paul_tyler]: yeah

1092
00:31:33,645 –> 00:31:36,189
[david_shapiro]: yeah you know the answer is

1093
00:31:36,638 –> 00:31:36,659
[ramsey_d_smith]: m

1094
00:31:37,712 –> 00:31:43,802
[david_shapiro]: the question is not one that we’re
going to answer because it’s the investor right

1095
00:31:44,363 –> 00:31:47,809
[david_shapiro]: so you know when we talk to
investors and you know

1096
00:31:47,849 –> 00:31:48,899
[ramsey_d_smith]: yeah

1097
00:31:48,129 –> 00:31:51,715
[david_shapiro]: to finance our product you know we
can’t use warehouse financing

1098
00:31:51,293 –> 00:31:51,313
[ramsey_d_smith]: i

1099
00:31:51,755 –> 00:31:54,981
[david_shapiro]: because there’s no interest rate on our
product right there’s no cash flows on the

1100
00:31:55,021 –> 00:31:55,341
[david_shapiro]: product

1101
00:31:55,529 –> 00:31:55,870
[ramsey_d_smith]: yes

1102
00:31:55,722 –> 00:31:57,886
[david_shapiro]: so we we what’s forward flow agreements
which is

1103
00:31:57,940 –> 00:31:58,041
[ramsey_d_smith]: ah

1104
00:31:59,248 –> 00:32:00,770
[david_shapiro]: financing where an

1105
00:32:00,840 –> 00:32:00,963
[paul_tyler]: ye

1106
00:32:00,850 –> 00:32:01,331
[david_shapiro]: investor

1107
00:32:01,079 –> 00:32:01,829
[ramsey_d_smith]: yeah

1108
00:32:01,451 –> 00:32:04,877
[david_shapiro]: advances us the money to fund the
equity

1109
00:32:04,830 –> 00:32:06,579
[paul_tyler]: oh

1110
00:32:05,358 –> 00:32:09,505
[david_shapiro]: and then we sell that asset back
to them so you know we can provide

1111
00:32:09,525 –> 00:32:10,967
[david_shapiro]: them guidance but they’re the

1112
00:32:10,950 –> 00:32:11,030
[paul_tyler]: and

1113
00:32:11,067 –> 00:32:16,537
[david_shapiro]: ones like there’s one insurance company that
you know just is scared to death that

1114
00:32:16,737 –> 00:32:22,286
[david_shapiro]: california is going to burn and doesn’t
want more then like a ten percent exposure

1115
00:32:22,346 –> 00:32:22,947
[david_shapiro]: to california

1116
00:32:22,769 –> 00:32:23,849
[ramsey_d_smith]: yeah

1117
00:32:23,007 –> 00:32:27,435
[david_shapiro]: real estate so we just have to
fill you know if we were to take

1118
00:32:27,515 –> 00:32:32,944
[david_shapiro]: capital from them we’d have a much
smaller box to fill so it’s clearly a

1119
00:32:32,984 –> 00:32:33,405
[david_shapiro]: problem

1120
00:32:33,540 –> 00:32:34,920
[paul_tyler]: yeah

1121
00:32:34,387 –> 00:32:39,036
[david_shapiro]: and the investors are the ones that
are going to define you know very specifically

1122
00:32:39,337 –> 00:32:41,200
[david_shapiro]: how how much of a concern that

1123
00:32:41,159 –> 00:32:41,382
[ramsey_d_smith]: oh

1124
00:32:41,261 –> 00:32:41,721
[david_shapiro]: is to them

1125
00:32:43,439 –> 00:32:47,085
[ramsey_d_smith]: so i mean as i listened to
you it’s i mean it’s remarkable you you’re

1126
00:32:47,145 –> 00:32:49,469
[ramsey_d_smith]: serving many masters here right you’ve got

1127
00:32:49,274 –> 00:32:49,417
[david_shapiro]: yeah

1128
00:32:50,110 –> 00:32:55,849
[ramsey_d_smith]: you’ve got the consumer you have you’re
certainly going to have regulators and

1129
00:32:56,229 –> 00:32:56,250
[paul_tyler]: m

1130
00:32:56,593 –> 00:32:56,854
[david_shapiro]: oh

1131
00:32:56,819 –> 00:33:02,168
[ramsey_d_smith]: and you have you have investors and
you have lots of different types of investors

1132
00:33:02,508 –> 00:33:07,476
[ramsey_d_smith]: the person that’s going to buy the
top conches the insurance company and be very

1133
00:33:07,516 –> 00:33:09,940
[ramsey_d_smith]: differ than the people that buy by
the risk of your trenches

1134
00:33:10,446 –> 00:33:10,993
[david_shapiro]: hm

1135
00:33:10,521 –> 00:33:15,009
[ramsey_d_smith]: when you talk about what you just
said there that that some some of those

1136
00:33:15,209 –> 00:33:18,835
[ramsey_d_smith]: some of those investors are going to
want to kind of pass out certain certain

1137
00:33:18,895 –> 00:33:19,957
[ramsey_d_smith]: regions and things like that

1138
00:33:20,093 –> 00:33:20,215
[david_shapiro]: yeah

1139
00:33:20,340 –> 00:33:20,645
[paul_tyler]: oh

1140
00:33:20,418 –> 00:33:20,438
[ramsey_d_smith]: i

1141
00:33:20,479 –> 00:33:20,601
[david_shapiro]: yeah

1142
00:33:20,498 –> 00:33:23,643
[ramsey_d_smith]: mean it becomes a you know in
some sense it becomes a very

1143
00:33:23,608 –> 00:33:23,629
[paul_tyler]: a

1144
00:33:23,723 –> 00:33:25,526
[ramsey_d_smith]: sort of complicated puzzle it’s

1145
00:33:25,574 –> 00:33:26,083
[david_shapiro]: define

1146
00:33:25,587 –> 00:33:26,789
[ramsey_d_smith]: definitely a complicated puzzle

1147
00:33:27,003 –> 00:33:27,144
[david_shapiro]: yeah

1148
00:33:27,650 –> 00:33:29,934
[ramsey_d_smith]: but you know sometimes complexity there’s a
situation you know

1149
00:33:29,940 –> 00:33:30,241
[paul_tyler]: oh

1150
00:33:29,974 –> 00:33:32,698
[ramsey_d_smith]: if you know with that kind of
value add you may

1151
00:33:32,730 –> 00:33:32,977
[paul_tyler]: yes

1152
00:33:32,819 –> 00:33:33,880
[ramsey_d_smith]: you know you may ultimately

1153
00:33:33,750 –> 00:33:33,770
[paul_tyler]: m

1154
00:33:34,121 –> 00:33:36,665
[ramsey_d_smith]: be you know well compensated for that
i know if you can talk about it

1155
00:33:36,725 –> 00:33:42,996
[ramsey_d_smith]: but what as you talk to investors
what kinds of return bogies are they looking

1156
00:33:43,076 –> 00:33:47,144
[ramsey_d_smith]: for in what are you are you
giving them as a range is that

1157
00:33:47,183 –> 00:33:47,363
[david_shapiro]: well

1158
00:33:47,184 –> 00:33:47,686
[ramsey_d_smith]: something you can

1159
00:33:48,044 –> 00:33:48,204
[david_shapiro]: yeah

1160
00:33:48,348 –> 00:33:48,730
[ramsey_d_smith]: discuss

1161
00:33:48,425 –> 00:33:49,727
[david_shapiro]: yeah it’s interesting

1162
00:33:49,312 –> 00:33:50,295
[ramsey_d_smith]: or is that the secret sauce

1163
00:33:50,088 –> 00:33:51,390
[david_shapiro]: no no it’s interesting

1164
00:33:51,469 –> 00:33:51,614
[ramsey_d_smith]: yeah

1165
00:33:51,650 –> 00:33:58,281
[david_shapiro]: and i personally think that there’s a
lot of gold in the in the complexity

1166
00:33:58,421 –> 00:34:02,789
[david_shapiro]: because people that don’t you know this
is a huge market right it’s probably the

1167
00:34:02,829 –> 00:34:04,812
[david_shapiro]: largest asset class out there right

1168
00:34:05,100 –> 00:34:05,241
[paul_tyler]: yeah

1169
00:34:05,313 –> 00:34:10,281
[david_shapiro]: so coming up with a complex solution
in an asset class that is in the

1170
00:34:10,662 –> 00:34:16,411
[david_shapiro]: you know trillions and trillions of dollars
is worth the work associated with it so

1171
00:34:16,530 –> 00:34:16,796
[paul_tyler]: oh

1172
00:34:16,972 –> 00:34:17,453
[david_shapiro]: i don’t mind

1173
00:34:17,460 –> 00:34:17,701
[paul_tyler]: oh

1174
00:34:17,533 –> 00:34:22,602
[david_shapiro]: complexity doesn’t bother me at all i
mean it does not fare well for us

1175
00:34:22,862 –> 00:34:28,872
[david_shapiro]: right trying to raise capital from a
venture investor it is too complicated for venture

1176
00:34:28,772 –> 00:34:28,854
[paul_tyler]: ah

1177
00:34:28,932 –> 00:34:29,373
[david_shapiro]: investors

1178
00:34:29,490 –> 00:34:29,731
[paul_tyler]: yes

1179
00:34:29,553 –> 00:34:29,654
[david_shapiro]: and

1180
00:34:29,639 –> 00:34:30,329
[ramsey_d_smith]: yeah

1181
00:34:29,774 –> 00:34:31,777
[david_shapiro]: i’m too old for adventure investors anyway

1182
00:34:31,829 –> 00:34:32,489
[ramsey_d_smith]: yeah

1183
00:34:32,138 –> 00:34:33,720
[david_shapiro]: so but the

1184
00:34:33,741 –> 00:34:33,881
[paul_tyler]: yeah

1185
00:34:33,780 –> 00:34:39,630
[david_shapiro]: strategic investors that see the value of
this particularly those that have distribution you know

1186
00:34:39,750 –> 00:34:47,223
[david_shapiro]: the insurance companies um you know it’s
fine now the really important question is the

1187
00:34:47,303 –> 00:34:51,350
[david_shapiro]: pricing on the product and with interest
rates moving up the cost of equity is

1188
00:34:51,390 –> 00:34:56,198
[david_shapiro]: going to move up so it’s not
dollar for dollar you have to look at

1189
00:34:56,558 –> 00:35:00,545
[david_shapiro]: other you can’t just look at the
now two hundred and fifty or three hundred

1190
00:35:00,605 –> 00:35:05,894
[david_shapiro]: basis point rise in interest rates as
a guide to how much the equity cost

1191
00:35:05,994 –> 00:35:10,321
[david_shapiro]: should be because that really needs to
be a function of h p a credit

1192
00:35:10,381 –> 00:35:15,590
[david_shapiro]: risk stuff that right so we do
think that there will be a relationship in

1193
00:35:15,650 –> 00:35:22,101
[david_shapiro]: the cost of equity to to that
that right now it’s much more narrow than

1194
00:35:22,161 –> 00:35:26,809
[david_shapiro]: it’s ever been because we haven’t had
any pricing impact but we’re going to in

1195
00:35:26,829 –> 00:35:28,832
[david_shapiro]: the next few months and we think
that

1196
00:35:29,072 –> 00:35:29,153
[paul_tyler]: ah

1197
00:35:29,253 –> 00:35:33,460
[david_shapiro]: you know we’ll probably go from a
nine percent i r r to the investor

1198
00:35:33,560 –> 00:35:34,902
[david_shapiro]: to probably something closer to a

1199
00:35:34,919 –> 00:35:34,939
[ramsey_d_smith]: m

1200
00:35:35,163 –> 00:35:37,086
[david_shapiro]: per cent i r r but

1201
00:35:37,166 –> 00:35:37,829
[ramsey_d_smith]: hm

1202
00:35:37,286 –> 00:35:40,031
[david_shapiro]: it’s not going to be it’s not
going to be two or three hundred bass

1203
00:35:40,071 –> 00:35:40,972
[david_shapiro]: points and

1204
00:35:41,001 –> 00:35:41,505
[ramsey_d_smith]: sure i just

1205
00:35:41,493 –> 00:35:41,573
[david_shapiro]: and

1206
00:35:41,546 –> 00:35:42,575
[ramsey_d_smith]: for right

1207
00:35:42,435 –> 00:35:46,602
[david_shapiro]: it’s the same the same the same
problem that anyone is going to have interest

1208
00:35:46,662 –> 00:35:48,326
[david_shapiro]: rates ye entirely you’re going

1209
00:35:48,139 –> 00:35:48,283
[ramsey_d_smith]: yeah

1210
00:35:48,386 –> 00:35:49,510
[david_shapiro]: up so i don’t think we get
singled

1211
00:35:49,411 –> 00:35:49,512
[ramsey_d_smith]: ah

1212
00:35:49,570 –> 00:35:49,670
[david_shapiro]: out

1213
00:35:50,890 –> 00:35:50,970
[ramsey_d_smith]: so

1214
00:35:51,060 –> 00:35:51,181
[paul_tyler]: uh

1215
00:35:51,271 –> 00:35:54,724
[ramsey_d_smith]: for the benefit of our our audience
when you say h pa that’s home price

1216
00:35:54,754 –> 00:35:54,915
[david_shapiro]: price

1217
00:35:54,785 –> 00:35:55,327
[ramsey_d_smith]: appreciation

1218
00:35:54,996 –> 00:35:56,708
[david_shapiro]: appreciation yeah yeah

1219
00:35:57,020 –> 00:35:57,241
[ramsey_d_smith]: okay

1220
00:35:57,220 –> 00:35:57,460
[paul_tyler]: okay

1221
00:35:57,462 –> 00:35:57,763
[ramsey_d_smith]: all right

1222
00:35:57,845 –> 00:35:58,810
[david_shapiro]: yeah exactly

1223
00:35:58,783 –> 00:35:58,963
[paul_tyler]: well

1224
00:35:59,168 –> 00:35:59,309
[ramsey_d_smith]: eh

1225
00:35:59,364 –> 00:36:00,566
[paul_tyler]: well this is a great conversation

1226
00:36:00,308 –> 00:36:01,269
[ramsey_d_smith]: m yeah

1227
00:36:01,087 –> 00:36:06,697
[paul_tyler]: ramsey any other thoughts or questions this
is a very different take on a common

1228
00:36:06,777 –> 00:36:07,658
[paul_tyler]: problem people have

1229
00:36:08,459 –> 00:36:11,884
[ramsey_d_smith]: like i i grew up in a
world of financial

1230
00:36:11,842 –> 00:36:11,863
[david_shapiro]: m

1231
00:36:11,945 –> 00:36:17,213
[ramsey_d_smith]: complexity so i always find these things
you know very interesting at the same time

1232
00:36:17,354 –> 00:36:22,823
[ramsey_d_smith]: you know i always now and my
my post complex career i also focus on

1233
00:36:22,863 –> 00:36:23,063
[ramsey_d_smith]: and well

1234
00:36:22,980 –> 00:36:23,940
[paul_tyler]: oh

1235
00:36:23,083 –> 00:36:24,205
[ramsey_d_smith]: how do we how do you make

1236
00:36:24,120 –> 00:36:24,812
[paul_tyler]: oh

1237
00:36:24,245 –> 00:36:25,748
[ramsey_d_smith]: it sort of palatable for the consumer

1238
00:36:25,890 –> 00:36:26,760
[paul_tyler]: oh

1239
00:36:26,068 –> 00:36:29,854
[ramsey_d_smith]: and and i thought it was very
interesting that you were very clear from the

1240
00:36:29,894 –> 00:36:34,121
[ramsey_d_smith]: beginning that the distribution here is though
someone like a financial advisor that

1241
00:36:34,043 –> 00:36:34,184
[david_shapiro]: yeah

1242
00:36:34,162 –> 00:36:38,769
[ramsey_d_smith]: can can put it make it part
of a menu and help a help a

1243
00:36:38,829 –> 00:36:43,517
[ramsey_d_smith]: consumer get to the get to the
right place i think i agree with you

1244
00:36:43,798 –> 00:36:44,723
[ramsey_d_smith]: that fun mentally

1245
00:36:44,383 –> 00:36:44,486
[paul_tyler]: met

1246
00:36:44,865 –> 00:36:50,806
[ramsey_d_smith]: that that that the house value being
house poor is like a big problem especially

1247
00:36:50,826 –> 00:36:53,050
[ramsey_d_smith]: in places like california where you know
where you live

1248
00:36:53,359 –> 00:36:53,893
[david_shapiro]: hm

1249
00:36:54,060 –> 00:36:54,282
[paul_tyler]: yeah

1250
00:36:54,192 –> 00:36:59,140
[ramsey_d_smith]: and so people need solutions people need
solutions there and so new and creative ones

1251
00:36:59,200 –> 00:37:01,603
[ramsey_d_smith]: i think are are great to have

1252
00:37:01,650 –> 00:37:03,060
[paul_tyler]: oh

1253
00:37:01,663 –> 00:37:05,547
[ramsey_d_smith]: and again i keep on going through
the formula in my head i’ve got it

1254
00:37:05,608 –> 00:37:07,230
[ramsey_d_smith]: now sure i got it now

1255
00:37:07,230 –> 00:37:08,670
[paul_tyler]: oh

1256
00:37:08,091 –> 00:37:08,292
[ramsey_d_smith]: um

1257
00:37:08,212 –> 00:37:08,750
[david_shapiro]: m ah

1258
00:37:09,013 –> 00:37:13,300
[ramsey_d_smith]: and and anyway good luck with good
luck with your journey it sounds like you’ve

1259
00:37:13,320 –> 00:37:18,228
[ramsey_d_smith]: been at it for a while and
and you’re bring you know another another solution

1260
00:37:18,470 –> 00:37:19,220
[ramsey_d_smith]: market which is great

1261
00:37:19,293 –> 00:37:21,066
[david_shapiro]: yeah exactly well thanks for having

1262
00:37:21,020 –> 00:37:21,180
[paul_tyler]: yeah

1263
00:37:21,086 –> 00:37:21,328
[david_shapiro]: me guys

1264
00:37:22,082 –> 00:37:25,070
[paul_tyler]: hey well david thanks so much and
and if people want to get in touch

1265
00:37:25,110 –> 00:37:28,098
[paul_tyler]: with you or learn more about the
company where should they go

1266
00:37:28,903 –> 00:37:30,185
[david_shapiro]: uhequifi dot com

1267
00:37:30,030 –> 00:37:30,485
[paul_tyler]: oh

1268
00:37:30,586 –> 00:37:31,908
[david_shapiro]: is the easiest just

1269
00:37:32,549 –> 00:37:32,792
[ramsey_d_smith]: my

1270
00:37:32,549 –> 00:37:34,032
[david_shapiro]: it’s a contraction of equity

1271
00:37:33,927 –> 00:37:34,049
[ramsey_d_smith]: right

1272
00:37:34,072 –> 00:37:34,573
[david_shapiro]: in finance

1273
00:37:34,649 –> 00:37:34,890
[ramsey_d_smith]: oh

1274
00:37:34,993 –> 00:37:40,122
[david_shapiro]: q u i f i dot com
we’re on linked in were on facebook so

1275
00:37:40,262 –> 00:37:40,727
[david_shapiro]: easy in

1276
00:37:41,510 –> 00:37:41,830
[paul_tyler]: okay good

1277
00:37:41,849 –> 00:37:41,990
[ramsey_d_smith]: yeah

1278
00:37:41,910 –> 00:37:42,070
[paul_tyler]: we’ll

1279
00:37:42,043 –> 00:37:42,166
[david_shapiro]: yeah

1280
00:37:42,090 –> 00:37:43,772
[paul_tyler]: put that in show so listen david
thanks

1282
00:37:43,832 –> 00:37:46,654
[paul_tyler]: so much ramsey it was great and
for all the listeners to keep the

1283
00:37:46,619 –> 00:37:47,369
[ramsey_d_smith]: yeah

1284
00:37:46,674 –> 00:37:51,919
[paul_tyler]: feedback coming and join us again next
week for another episode of that annuity show

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEpisode 156: Selling Equity As New Way To Access The Value of Your Home In Retirement With David Shapiro

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