Posted by Charm_AL on 12/11/07 4:04pm
Msg #225523
Laura V...re: MA helocs, R/Ms etc...
I don't know if you saw this before it was buried..so I'm reposting 
I was solicited a few months ago by a company selling the software and getting me a website to direct people to - MML concept. Cash up front. Immediately, I thought Amway and Herbalife...I did some research on it and basically, along with respected opinions of a few here came up with more confusion. The only thing I'm not confused about is that it can be potentially financially devastating in the wrong hands!
Of the Accelerator programs, there are two basic choices...
CMG's Home Ownership Accelerator - I believe this software moves it around for you and is much easier to understand. I also think the money is more liquid with the HOA, as it is a real loan
Ufirst Multilevel marketing software - You do it yourself using their software and his feature makes it only your business, no one else sees your finances all the time. Requiring a re-fi and a heloc.
MMA is software, costing upward of $3,500. It requires you to move money manually from to heloc then to closed ended first mortgage losing time and interest savings. You must do this consistently and have solid discipline and discretionary income, the utmost importance in using this method. The math works, but you must stay close to a zero balance on the heloc after paying your bills and maintaining your monthly budget. I thought, wow, what a great way for the borrower to get even further in debt because he will lean on the heloc for a rainy-day situation.
There are basically two schools of thought I've found.
You can pay off your mortgage without having to first refinance, then open a heloc and use it as your checking account. (yes, it allows the cash that would be sitting in your checking account to earn for you), but the argument I've heard is 'if you are diligent and disciplined, why would you even need this and spend the money for the software? Just put the extra toward your principal every month.
Then there are those who have crunched the numbers 47 ways to Sunday and are devout believers that this works and are doing it. Like Laura says, they are pros in financial planning, cpa's and tax attnys. I would hate to be sold this program by anyone not licensed.
On another note, I'd love to close these but at the same time it scares me that more unethical people would be pushing these, not knowing what they are doing or for that matter not caring, just to make a buck. I can just see the writing on the wall in 5 yeas about how this screwed as many people as the sub-primes if it's mass marketed.
Laura, I would love to talk to you personally about this.
Also, I'm interviewing for a Reverse Mortgage Specialist position tonight, it's commission (which I love) and it's originating, also something that won't tie me down to a corporate desk all day.
I hear that the jumbo reverse was introduced this year in AZ., and is insured as a HECM. I thought it would be a proprietary loan. In California, it might really fly. I know there are some ridiculously high priced home communities in my area, but I can't see many seniors in them.
For instance if you have million dollar home an owe 200k on it, you would draw that, pay it off, get out of the P&I burden every month. Turn around, take another 100k, have a supplemental income of $4,057., and still have hundreds of thousands in equity.
I firmly believe that everyone should study the reverse process, I strongly feel this is the future with the boomers getting ready to retire and living many more 'healthy' years than in the past.
I can't ever see my Mom, who is getting ready for retiring, sitting around knitting like my Grandmother did. She and her hubby are A type personalities and will need to move to a warmer climate and spend til they can't move 'no-more'
My in-laws are in their 80's and going strong. My Mom-in-law is 80 an the only pill she takes is a vitamin. Plays piano at church every Sunday and has Bridge club at various friend's homes every Sunday, take care of a huge home and land, a private lake anddd... they drive all over the nation! They are busier than me with 4 kids! They will never reverse because they don't have to, Thanks to careful disciplined living and investing.
Sorry for the long wind...it'll be gone by lunch time
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