James Eccleston Discussed Risks of "Mortgaged Investments" on FirstBusiness

pecific areas of concern will continue to include brokers who recommend that investors use a mortgage to purchase investments. Ms. Schapiro minced no words: “I will go out on a limb here and say that 99% of the time, a recommendation that an investor mortgage his or her home in order to speculate in the securities market IS UNSUITABLE and subject to potential enforcement action.” The NASD already has brought enforcement actions against stockbrokers for recommending the mortgaged investment strategy. The grave concern exists, according to the NASD, because mortgages are worse than margin loans (because mortgages can be much larger loans), mortgages risk more than life savings (mortgages risk one’s home), and mortgages require investment returns sufficient to pay the mortgage interest.

For further discussion of this topic, one may view James Eccleston's interview with PBS Television by clicking on the above image, or on the links below:
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