Posted by Laura Vestanen on 12/10/07 8:12pm
Msg #225402

Trend to prepare for: Mortgage Accelerator Helocs

Regular loan refi work has become low pay, slow pay, and no pay. TCs and SSs are treating us badly.

BUT

Two sectors of the refi group are worth marketing for: Reverse Mortgages and Mortgage Accelerator Helocs. This post talks about the latter.

Helocs optimized to build equity at maximum speed are powerful and terrific tools. I think they are so effective I will personally get one when I buy new property next year.

Only those borrowers with a strong positive cash flow and lots of discipline can realize the benefits of these MA Helocs. The MA Heloc is tied to the borrowers' home equity so misusing this tool and winding up in foreclosure could easily happen.

ARMs in the wrong hands were destructive. We all saw that. So did the Feds. That's why we have so many foreclosures and why the subprime biz was shut down. A MA Heloc in the wrong hands is just as devastating.

In my humble but educated opinion, the only loan originators capable of helping borrowers to determine whether a MA Heloc is right for them include:
Financial Planners
Accountants
Tax Attorneys

UFF, MMA, and other companies have found many NSAs to tout their wares. Wares include software and access to counselors. After several dozen of hours of research including long phone conversations and emails, my personal opinion is this:
The products truly do what they promise
Both are hugely overpriced
NSAs are not the ethical choice for promoting these systems

You can learn how these MA Helocs work by reading some pro-consumer information I posted on my website last spring:
http://www.ProfessionalNotary.com/3.html
Most relevant sections:
1. MORTGAGE ACCELERATORS (top of page)
MaxMyEquity (bottom of page)

Learn and arm yourself.

All the professionals I have named above (Financial Planners, Accountants, Tax Attorneys) are too busy right now to contact until January 8. End of year crunch. Do your homework and cold call them in person January 9.

They will get busy again starting March 5 due to tax deadlines. Your marketing window is short: January 9 - March 5. After that, you can only contact them after May 1. (By the way, if you want to spend a Hawaiian vacation in the company of super geeks with super-boring IRS war stories, Hawaii and Miami are your destination "hot spots" from April 16 to 31. Not pretty.)

Marketing tips:
Tell them you are an experienced NSA with x hundred signings under your belt.
You understand MA Helocs and want to work with them.
Your competition is unworthy because......

MA Helocs are very sophisticated financially. The LO wants a sophisticated notary. I get $300 for these signings. I am the only NSA my LO would ever consider using. He schedules his appts around my vacations. That's because I am the only notary who understand these specialized Helocs in our county. Since our county is huge (our county's square miles times four equals the state of New Jersey), I get all the MA Heloc work for hundreds of miles.

You can too.

Best of luck,
LauraV

Reply by Susan Fischer on 12/10/07 8:39pm
Msg #225405

Thank you, Laura. What great info. You're my Notary Santa.

One Q: MAs available in all states?

Reply by Allison_MI on 12/10/07 8:45pm
Msg #225406

Re: Thanks Laura, good info

Congratulations on your success and thanks for sharing this information. Good Stuff to know!

Reply by Joan_OH on 12/10/07 8:57pm
Msg #225407

This is my Reality

I have one of these Mortgages through CMG/GMAC for almost a year now. Last January, when I closed, CMG said I could choose my title company, but they had preferred pricing with Chicago Title. I went with it and I must say, my title officer was terrific. When I asked about a closer, they said they are required to use BankServ (a Chicago affiliate). I told them absolutely NOT! I picked and paid my own notary who was approved because she was already working for the local Chicago office and was Chicago title approved.

Now you may get $300 for these, but I am willing to bet you $300 that a BankServ Notary is not getting $300. As a matter of fact, they would have probably gotten $50.

Having one of these, my opinion is if I were to close one, I have absolutely no business doing anything else but obtaining signatures. With these, everything about these loans should be known by the borrower before they ever see the notary and there should be absolutely no questions at the table. I can understand why a LO would want a sophiticated, businesslike person to close these since they are targeting sophiticated and financially savy clients. I can bet that you are just the type of notary an LO would want for one of these - professional, but knows when to keep quiet and refer questions. If I were an LO for one of these, this is what I would want and I would pay $300 to NOT have a $50 unknown notary go in and possibly represent me and my product poorly.

Glad you found this great client.

Joan-OH

Reply by Carolyn Bodley on 12/11/07 8:55am
Msg #225461

Re: Bi-Weekly is not new

They've been around since the early '90's. Every other week one-half of a mortgage payment was deducted from our checking -- thus, we made 26 payments a year. The 25th and 26th payments (the 13th month) went entirely towards principal allowing a 15-year mortgage to be paid off in 10 years.

People can do it themselves and make a 13th month on their own, but it would take discipline.

Reply by Carolyn Bodley on 12/11/07 9:31am
Msg #225466

Re: Joan, no reason why this posted under your post n/m

Reply by Gary_CA on 12/11/07 11:44am
Msg #225488

That's not what we're talkin' about.

MA Heloc's aren't about bi-weekly payments... it's a little long and complex, but here's the reader's digest version.

You refi with a HELOC that has an ATM card and you auto deposit your paycheck to that account... then you spend less than you make but you spend everything from the HELOC.

When you spend the balance goes up, when you make the balance goes down. Instead of (or in addition to) building a balance in a savings account you're building equity in your home. By making payments frequently you pay little or no interest on the withdrawls you're making for your daily expenses and you keep pushing the balance down down down.

Okay, it's got more moving parts than that, but that's it in a nutshell.

Reply by Carolyn Bodley on 12/11/07 11:59am
Msg #225489

Re: In Laura's link, she talks about bi-weekly mortgages n/m

Reply by Ernest__CT on 12/10/07 10:42pm
Msg #225414

Laura has given us an early Christmas present!

Full disclosure: I bought her Reverse Mortgage book and am devouring it. I have no other relationship, business or otherwise, with her.

I have been in conversation with two _local_ financial planners regarding MA HELOCs. Both wanted names from me (of course) but I did what you who have been reading my Posts over the years would expect: I declined because it would be unethical.

Please, all NSAs, do not be tempted by a "finder's fee"! If you feel that the MA HELOC would be a good fit for a borrower, please call afroresaid borrower and say the equivalent of "I just heard about ... would you be interested?" Then _drop it._

The fees for software vary wildly, and are very different packages. Make up your own mind after careful comparison if you are thinking about one for yourself. If you are familiar with Micro$oft Excel and are _very disciplined_, you can do the math yourself.

Reply by Joan Bergstrom on 12/10/07 11:54pm
Msg #225428

Re: Laura has given us an early Christmas present!

Laura book on Reverse Mortgage is brilliant and it is certainly "thinking outside of the box."

I am also interested in this new vehicle.

Reply by Susan Fischer on 12/10/07 11:57pm
Msg #225429

"Do the math myself... Oh, Ernest, you kidder you... n/m

Reply by Ernest__CT on 12/11/07 12:55am
Msg #225435

oops! sorry. n/m

Reply by sue_pa on 12/11/07 7:47am
Msg #225453

I did a loan (regular refi) last week for a man who was going to sell this software on the side. He was leaving the next a.m. for a seminar in I believe salt Lake City to get proper training. Apparently (I wasn't paying a lot of attention because I kept trying to shut him up and keep his mind on the task at hand) getting other people to come on board is a big key in this business. He thought we should connect and I'd be able to give him great contacts. He TOTALLY didn't understand why I wanted no parts of this and how or why I could get in trouble when he had such a great product to offer. I guarantee if these companies have infomercials that this guy should be sitting front row.

I don't know how these work but I didn't think the HELOCs are anything except a HELOC. I thought the software that 'spends' the money is the key to the success.

As stated above, doing the loans is no problem - getting involved in any other phase via finder's fee or whatever can lose you clients quickly.

Reply by Linda Juenger on 12/11/07 8:34am
Msg #225457

I'm a bit confused. Is the MA program your are talking

about the same as the borrower deposits ALL of his money into an account and you draw out of it as you need it with any remaning balance goes toward the mortgage. Am I understanding this correctly?

If I am correct, there was a very very lengthly discussion about this several weeks ago.

Reply by sue_pa on 12/11/07 8:53am
Msg #225460

Re: I'm a bit confused. Is the MA program your are talking

Yup. He called it a money merge account. The software calculates something in here for you (at a cost of I believe $3500). I've read about this several times throughout the past few months (I believe Glena from NV first brought it up) but I haven't read enough to grasp the real details. This guy the other night just kept at me about all the people I've closed for who MUST have equity to get a HELOC and then purchase this program from him.

Reply by Ernest__CT on 12/11/07 10:01am
Msg #225474

From talking to people first hand, sue_pa is right.

$3,500 for the software is correct.

The thing will work. But so will have the willpower and the use of an Excel spreadsheet. The key is "willpower"!

Reply by Philip Johnson on 12/11/07 10:20am
Msg #225476

Macquarrie & First Tennessee mortgage will

setup a first position heloc for you without having to cough $3500.00 in some magic software. I have one and for me it has worked out very well and I was able to do it without a financial planner, just me and my calculator doing the math.

Reply by Charm_AL on 12/11/07 10:20am
Msg #225477

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

Reply by BrendaTx on 12/11/07 5:02pm
Msg #225534

**Since our county is huge (our county's square miles times four equals the state of New "Jersey"**

Laura, you might want to check your math. I'm thinking about New Jersey...by your "four times as big as NJ" description, your home county would have to be around 35,000 square miles...which is larger than ten to fifteen of the smaller states....for instance your county would have to be larger than West Virginia.

Reply by Laura Vestanen on 12/11/07 5:18pm
Msg #225536

Wording was bad.
Should have read
our county's square miles times four equals THE SQUARE MILES OF the state of New Jersey.

Whatcom County
2,119 square miles
quickfacts.
census.
gov


New Jersey:
8,722 square miles
www.
enchantedlearning
.com

Sorry about url formatting. NotRot wouldn't let me post them the usual way.

Reply by BrendaTx on 12/11/07 6:00pm
Msg #225541

**Sorry about url formatting. NotRot wouldn't let me post them the usual way. **

Interesting. I have been having a problem like that also...part of the time and then the rest of the time...none whatsoever.