Posted by LJ on 10/16/07 9:38pm
Msg #216843

I am closing a loan tomorrow that Alice and Chris Montana

were talking about and was such a hot topic. Docs are the same except an Accelerated Agreement and a Direct Depost agreement. Couldn't believe it when I was called to do one. I never heard of them before and now I hear of it twice in a couple days. Weird. I'll let you know how it goes. I'm intrigued by it now that I am closing one and eager to learn more. I'm not interested in doing it due to we only have a couple years left on our mortgage. We're too late for sure.

Reply by LJ on 10/16/07 9:39pm
Msg #216844

Forgot to say that this is NOT from either of them. Diff co n/m

Reply by Charles_Ca on 10/16/07 9:47pm
Msg #216847

There are always people who are willing to give up their

responsibility and take what they perceive as the easy way out. The type of loan that is being discussed will do nothing but put these people in deeper debrt and sell them an expensive spreadsheet that they could have done in Excel themselve but it will have a fancy skin. It's a very expensive price to pay for something that they could have done themselves. I am sure that one of the pitfalls is that they will use the line of credit and then the program fails. If you dip into that line of credit the program is void but the salespeople never tell you that. You can see the whole program at:

http://www.slashmymortgagepayment.com

Reply by Joan_OH on 10/16/07 10:13pm
Msg #216853

Re: There are always people who are willing to give up their

If this is an "Equity Accelerator" loan, these loans are in the same category as "pick a payment" loan - not for everybody. Like Phil, we have one of these, but through CMG-GMAC. It is working for us, but I would imagine it would work for very few. You HAVE to have self control and still budget. I can see where a budget can go out the window with these and the equity line can quickly creep up if you are not careful.

Joan-OH

Reply by Loretta Reed on 10/16/07 10:34pm
Msg #216855

Re: There are always people who are willing to give up their

My self-control is out the window, we just got a Dunkin Donut here.

Reply by Charles_Ca on 10/16/07 10:48pm
Msg #216859

I thank goodness that we don't have Dunkin' Donuts here

or I'd weigh 500#. I used to start my day every day with Dinkin Donuts and coffee when I lived back East.

Reply by Sylvia_FL on 10/17/07 8:36am
Msg #216888

Re: I thank goodness that we don't have Dunkin' Donuts here

We have several Dunkin Donuts here, but I prefer Krispy Kreme - and the closest one is about 5 miles away.

Reply by BrendaTx on 10/17/07 8:43am
Msg #216890

OT I thank goodness that we don't have Dunkin' Donuts here

Just the words "Krispy Kreme" makes me want a donut and I have never HAD a KK donut...however, I swore off sweets and carbs last year about this time. I remain impervious to the siren song of carbs and sugar...I do, I do, I do...I swear I do. Can we change the subject?

Reply by Sylvia_FL on 10/17/07 8:48am
Msg #216893

Re: OT I thank goodness that we don't have Dunkin' Donuts here

OK - change of subject

:assing Brenda a ginormous box of Godiva chocolates::

Reply by Phillip/TX on 10/17/07 9:45am
Msg #216900

Krispy Kreme any day

I so love me some KK... the ones in Houston were forced to close, they were in debt like $3,000,000 to the KK company, they shut them off for supplies.

But every time I go to Dallas (closest place to get KK) I load up on them!!! I would/could never swear off sweets...

Reply by jba/fl on 10/17/07 9:48am
Msg #216902

Re: Krispy Kreme any day-oh, yes! About

2 miles away, but I manage to seldom go there. Am thinking now, but need to go another directin so am saved for the day.

Reply by Sylvia_FL on 10/17/07 10:50am
Msg #216913

Re: Krispy Kreme any day-oh, yes! About

That flashing "HOT" sign is calling you by name jba

Reply by jba/fl on 10/17/07 1:50pm
Msg #216951

Re: Krispy Kreme any day-oh, yes! About

Well, of course, it only flashes for "hot mamas" (or is that hot mamas flash-ing?)

Reply by Sylvia_FL on 10/17/07 6:27pm
Msg #217032

Re: Krispy Kreme any day-oh, yes! directin?

Your keyboard is really misbehaving today

Reply by Hugh Nations Signing Agents of Austin on 10/17/07 10:11am
Msg #216905

Re: Krispy Kreme any day

Phillip/TX bemoans:

***But every time I go to Dallas (closest place to get KK)***

There are three Krispy Kremes in Austin, a much closer -- and far more pleasant -- destination than Dallas.

There is substantial evidence that Krispy Kremes were the original manna from Heaven. And it is said that when Joshua fit the Battle of Jericho, he did so on a breakfast of Seaport coffee and three Krispy Kremes.

The best evidence I, a diabetic and an agnostic, have found that there is a God, and that he is vengeful, is that He has put a Krispy Kreme on my street.

Reply by Phillip/TX on 10/17/07 10:22am
Msg #216907

Re: Krispy Kreme any day

LOL that is good Hugh!!!

Reply by Charles_Ca on 10/16/07 10:46pm
Msg #216858

If it works for you that's grate, I suspect that it is

expected that you will continue to dip into the line of credit at whch point you will no longer be reducing your primary loan. Since I know GMAC well I am sure that they have carefully figured that out. If you can keep out of the line of credit you've got it made.

Reply by BrendaTx on 10/17/07 5:31am
Msg #216876

Re: There are always people who are willing to give up their

In a very elementary sense, isn't this about putting every spare penny out of your money merge account toward your loan while the money's not being used and pulling it back out when it is needed for other purposes thereby reducing debt faster?

To me, that $3500 cost for setting up something like that (the software) just seems a large fee to rake off the top when that amount could go against the mortgage principle.

Reply by jba/fl on 10/17/07 6:55am
Msg #216877

To me, it is basic: use Amortization Schedule (AS)-pay tons

of extra money at beg. of loan thereby reducing amount paid in interest over life of loan, plus reducing amt. of months left to pay. I am amazed at the number of people who don't know what AS is, don't know how to use to their advantage. I urge everyone to get one, then place w/mtg. pmt file and use each month.
When bor. complain of amt of fees, I trot out the AS as a way to recoup their fees paid by not paying that interest.

Reply by sue_pa on 10/17/07 7:36am
Msg #216880

another one

...When bor. complain of amt of fees, I trot out the AS as a way to recoup their fees paid by not paying that interest. ..

As I so often am, once again I am TOTALLY AMAZED at what you people do at the table.

Reply by CF on 10/17/07 9:12am
Msg #216897

Re: another one

I think that it is amazing that people will pay for something that is FREE. You can save your $3500.00 and pay it directly to your loan. Yes, you can use the AM schedule to your advantage. I cant believe that people will pay to do this. This sounds like a big scam to me. These people are going to loose their home over it....they will never keep their hands off the line of credit. Whatever....basic math can help you figure this one out on your own! I thought that it was common knowledge that if you paid 1 extra payment to principle per year that would cut about 12 years off your mortgage. Some companies what to charge you a bi-monthly fee....to set that up. It is called on-line banking....pay it 2 times or 50 times per month ( if you want to) ....you do not need to pay a fee to set that up. Wash Mut wanted to charge us around $750.00 to do it. We said NO- we can do it ourselves! Again....I am going to put $750 toward my payment and not pay someone else for what I can do myself. I guess that people can get "sold" anything these days!

Reply by LJ on 10/17/07 1:25pm
Msg #216945

Update on Accelerated Loan closing

Borrowers were reluctant to sign because of closing costs, but did anyway. They were over 7,000 on a 105k loan. They were shocked and so was I, but didn't say anything. They say they are looking forward to paying off their loan in 1/2 the time depositing all their cash into an account. They are opening a cash back credit card to pay household expenses and pay that off every month out of the line of credit account set up. Interesting. These people seemed very responsible people, as he has a very successful electric business. I think they have an honest shot at making this work for them. Would be interesting to see in 5 years or so how they are doing with it. Guess I'll never know.

Reply by Doris_CO on 10/17/07 1:51pm
Msg #216952

Re: Update on Accelerated Loan closing

They'll pay their credit card off with their line of credit? How does that save them anything?

Reply by jba/fl on 10/17/07 2:01pm
Msg #216955

Re: Update on Accelerated Loan closing

It saves them on further interest on the credit card. There will be new interest on LOC, which may or may not be higher, but as Charles.Ca said, these companies have researched behavior patterns and know that those w/cc's and mtgs and refi's are prone to not really taking control of their finances, and they want indentured financial slaves for as long as they shall live.

I am reminded of when I did sales: my trainer emphasised repeatedly that people do not buy products, they buy stories, therefore, your story must be convincing. This is an old dream (debt free) with new packaging (bright, shiney, new, improved, ultra....etc ad nauseum)

Reply by LJ on 10/17/07 2:22pm
Msg #216958

Another update: I've been home 3 hours and borrowers are

cancelling already. Mr BO took the paperwork up to his bank. His banker looked it over and talked him out of it. He wanted to be sure I didn't send the doc's back. I told him I had to send them back because they were signed. I told him he need to pull out his RTC, read it and follow the directions and make sure his wife signes hers also. He wasn't too happy with me that I am sending them back. (I am doing the right thing - right??). Once signed and we leave, the doc's get returned no matter what.
So, I guess this wasn't all that he was told it would do for him. With closing costs 7k it just doesn't make sense. I thought $3500 was high. He also said that he was afraid that the repairs he wanted to do on the home would cost more than expected and they would dip too far into this L/C. I'm so glad he got another opinion. Actually, I thought to myself if anyone could do it, they probably could. They were so on top of things and intelligent people. I guess they were more intelligent than I thought. I just called the company and gave them a heads up. I will be paid full fee.

Reply by JanetK_CA on 10/19/07 1:35am
Msg #217243

Re: Another update: I've been home 3 hours and borrowers are

It would be interesting to see how much they would save by simply applying that $3500 directly to the principal of their existing loan. Add $7000 in closing costs and it gets even more interesting. And if they are a couple who are really on top of things, then maybe they could pay an additional hundred or two per month against principal. At the end of one year, they would have paid down roughly $12-13k, significantly reducing the amount of interest owed. If their income level was such that they could pay more -- or if they get paid bi-weekly and made an entire extra payment each year... I'm no mathematician, but I'd be very interested to know how many years it would take to hit the break even point with some of these potential scenarios.

Count me in the group that doesn't think this program is worth it! I'm glad to hear of at least one couple that didn't get sucked into this. Kudos to their banker! (BTW, I would have done the same thing with the docs. They are the property of the lender; not ours to determine what is to be done with them.)