Money Merge Accounts, and the like, are a relatively new loan program in the United States that is a good program.  However, it does not serve the vast majority of Americans very well and our research shows that it is another case of "buyers beware". 

So, where did this program come from?  The program originated in Australia and is also used widely in the UK.  At least one third of Australians use this type of program.  However, Australia's loan offerings are completely different.  In Australia, the 30 year fixed rate does not exist, they offer "fixed rate" loans that are similar to our 3 and 5 year Adjustable Rate Mortgages (ARMs).  Since Americans can utilize the 30 year fixed loan as a hedge against rising interest rates, especially now that we are in an inverted yield curve, they can utilize other mortgage strategies and be in a position to pay off their mortgage faster. 

Robert D. Ashby, a Certified Mortgage Planning Specialist and owner of Solid Rock Mortgage Corporation, has done a lot of research on this program before he decided to add the program to his business.  "After lengthy review of its benefits, we see that this program will benefit about 15% or so of Americans better than our other strategies," Mr. Ashby said.  "For that reason, we felt it was a worthwhile addition to our services.  We chose to add CMG's Home Ownership Accelerator."

Our research pointed out that there are a lot of companies out there using false and misleading information to make the product look a lot better than it is.  When we asked Mr. Ashby about the research, he added, "If you are interested in this product and think it may be the best thing for you, find someone who doesn't sell only that product.  People selling only one solution will generally not be working with your best interests in mind."

In fact, we found that companies and representatives selling this type of product only were misrepresenting "reality." They were using how amortization tables were in favor of banks and stating things like your fixed rate is not really a fixed rate because of this, claiming the rate was as high as 580%.  Also, they use one sided comparisons to prove their product is better, such as stating that the tax deductibility of the mortgage is a myth.

There are some good companies to be aware of out there that are trying to promote this product honestly.  United First Financial's main site and CMG's representatives are among the best in trying to provide facts, not merely fiction.  One of UFF's representatives had a non sanctioned website that provided misinformation, so don't rely on just one website if you are looking for more information on these products.

There are many more misrepresentations regarding this product, so the borrower needs to do their own research and see if it truly is in their best interests to be in this program.  We recommend using a mortgage professional that offers various loan programs that clearly possesses the skills and expertise in developing a plan that has your best interests in mind, not theirs.

In a recent issues of the Wall Street Journal, there was an article about the latest mortgage fraud issues surrounding the "save your home from foreclosure" scams.  According to RealtyTrac, a foreclosure data service, more than one million borrowers have gone into foreclosure so far in 2006.  This represents a 27% increase from the same period a year ago.

So with the number of foreclosures on the rise, the number of foreclosure scams have risen also.  Foreclosure fraud typical is where acompany comes in to save the borrower's home from foreclosure by buying the home and then leasing it back to the borrower for a period of 1 or 2 years, allowing the borrower to rebuild their credit and buy the home back.  This process in and of itself is not fraud, however there are many companies doing this that never intend to sell the home back to the borrower and many do not even allow the borrower to stay in the home after the sale is completed.  In most of these cases, the borrower loses most, if not alll, of their equity while being evicted from their home. 

Another type of scam to watch for comes in the form of a "foreclosure consultant".  These types of scams result from a company charging an upfront fee to supposed negotiate with the borrower's lender to postpone or avoid foreclosure.  The reality here is that many of these do not negotiate at all, and most that negotiate are doing the same negotiations you could do yourself.  If you are facing foreclosure, contact your lender and try to negotiate yourself first.  In many cases where job loss or other sudden financial crisis occurs, lenders will work with you at least for a few months.

Currently there are only 10 states that have legislation in place to deter foreclosure rescue fraud.  They are:  California, Colorado, Georgia, Illinois, Maryland, Minnesota, Missouri, New York, Ohio, and Rhode Island.  Their goal is to prohibit the charging of upfront fees before performing the agreed upon services, ensuring that homeowners receive a substantial and fair amount of their home equity when entering into a sale/leaseback transaction, and to give foreclosure investors a reasonable chance to profit, with some states saying setting a minimum percentage of fair market value for purchasing the property.  Illinois is an example of this last goal, where that require the purchase price to be at least 82% of the property's fair market value in certain cases.

Things to remember if you find yourslef in need of a foreclosure rescue service:

• Make sure the transaction is structured in an ethical manner that protects the interests of all parties involved.
• Check with a real estate attorney to determine how best to structure these types of transactions to comply with all aplicable laws.

Many people who are searching for home loans are looking for the cheapest and are open to bait and switch tactics.  What we see happening a lot in the mortgage industry, and Bankrate.com is even being sued for allowing this ti happen on their website, is a mortgage company will offer a lower rate and will nto disclose all of the terms.  This makes the borrower beleive they will get the best deal by pursuing that lender, only to find out just prior to closing (or at closing) that the loan they are about to sign for is not the same deal as was originally agreed to. 

Mortgage companies use various reasons for the difference in rates and fees to justify the change.  Things like, your credit score changed, you never locked the rate, when the underwriter reviewed the loan, you no longer qualified for that rate, and the list goes on.

Durign our research to protect you, the consumer, we have reviewed and highly recommend the use of an Upfront Mortgage Broker.  They are a group that was conceived by Jack Guttentag, a nationally syndicated columnist and well-known expert on mortgage loans.  Professor Guttentag developed the idea as a result of his experience and he has a website that highlights information about UMBs and mortgage related topics.  This website can be found at http://www.mtgprofessor.com/.  UMBs have agreed to work according to specific guidelines, which can be found at the Upfront Mortgage Brokers Association website.

What is the Difference between a UMB and a typcial Mortgage Broker?

Upfront Mortgage Brokers (UMBs) disclose their fees to customers in advance and in writing.  If they receive any compensation from the lender (Yield Spread Premium or YSP), they disclose that as well.  Customers of UMBs pay the broker's fee plus wholesale loan prices.  Alternatively, mortgage brokers (MBs) add a markup to the wholesale prices and then quote the resulting "retail prices" to customers.  Most MBs reveal their markup only in required disclosures after the application has been submitted and some never discloe the exact amount until the HUD-1 closing statement.  The customer usually does not see the HUD-1 until the closing table or 1 day prior, and very few know where to look regarding total broker compensation.

The biggest difference is that UMBs interests are closely aligned with their customers.  As such, they represent borrower's in shopping for loans.  MBs, conversely, shopping the market are often in conflivt with their customers interests.  An example would be when a loan type that meets the borrower's needs is not the one with the largest markup for the MB.  This is just one example of many where UMBs are working more for the customer than a typical MB.

Additionally, UMBs credit any third party rebates they may receive from lenders or home sellers.  These rebates are applied to the orgiginally agreed upon compensation, and may result in lower cash to close.  Typical MBs normally pocket these as added compensation and may never be shown clearly to the customer. 

So, why would you choose a UMB over a typical MB?  Most consumers do not obtain more than a few mortgages in their lifetime and do not have the time to learn everything about mortgages and the mortgage process.  The basic nature of this process allows for non-UMBs to "mark-up" the interest rate and/or increase fees during the process.  The net result is that the loan would end up costing more than it should.

There is no guarantee that a consumer using a UMB will obtain the lowest rate or lowest fees.  But, customers utilizing a UMB will have the best opportunity to obtain the lowest price and will certainly be treated fairly in regards to broker compensation.

If you would like more information about the Upfront Mortgage Brokers Association, vist their website at http://www.upfrontmortgagebrokers.org/.  They have a search feature to help you find a UMB that can assist you.  Also, be sure to read the post on Mortgage Planner vs. Mortgage Broker that should be up in the next few days.  There are a few Mortgage Planners who are also UMBs.  This we believe is the best of the best for you, the consumer.

The National Mortgage Advocate was formed to provide guidance to consumers when searching for their next purchase or refinance transaction.  While we will provide educational material on assisting clients in learnign their various options, we are also unforgiving in our attacks on false and/or misleading websites as was the case in a recent blog.

Recently we blogged about Money Merge Accounts and what we believed to be the truth, unfortunately was not.  More about that shortly, but on to the real story.

In our blog, we attacked not the program itself, but the information posted on the site.  The information presented many misleading statements and false information.  For that reason we forged a relentless approach to that site and proceeded to tear about their very fabric.  We proceeded to highlight only a few items shown on the site, bringing their misleading statements to light and showing our readers that the site cannot be trusted and therefore, cannot receive our recommendation. 

Ultimately, we would do our best to steer consumers away from the site.

Through the comments made, we became aware that the site in question was not the real site of the company and that the information posted to the site was not authorized.  The real company, United First Financial has taken the necessary steps to "turn off" the website and terminate the broadcast of false information. 

We commend them for the expeditious procedures to protecting the consumer and allowing real information to be shown. 

As stated earlier, we are now in the process of reviewing the real information and will make a post accordingly once that review is done.  We however, did not want to wait until that time to say that are misssion here was mostly a success.

We succeeded in our mission in the fact that our post had the desired effect of shutting down that site and protecting the consumer.  We cannot call it a complete success in that, while our post did nto attack the program itself, it did prevent the real company from possibly helping some consumers that may have benefited from it.

For those of you reading this post now, understand that our mission is to protect the consumer and provide valid information for guidance to them.  We need your help.  If you hear of a website you believe is misleading the consumer, providing false information or otherwise treating consumers unfairly, please let us know.  We have proved with our recent post, that they can be stopped!

We do believe strongly in the mortgage planning process, particularly in those with the CMPS designation, but we also understand that there are other valid options.  With that in mind, please feel free to register on our website and after approval, you can submit articles to be reviewed and possibly posted.  We already have one AR member posting information.  We need more and again, we need your help in protecting the consumer.

Please visit our site at www.nationalmortgageadvocate.com and contact us if you have any questions.  Thank you.

Yesterday, you may have heard that Fed Chairman Ben Bernanke spoke of his concerns for the American borrower.  He stated that with the explosion of financial choices, consumers must sharpen their assessment of whether certain mortgages or other investment products makes sense for them.

This comes on the heals of a 58-page report from the Federal Reserve Bank of Chicago that shows that Americans need to seek the services of professional mortgage planners to assist them in properly integrating their mortgage into their overall financial and investment plans.  For that, we recommend seeking a Certified Mortgage Planning Specialist (CMPS) in your area to ensure your mortgage planner has gained enough knowledge to serve your needs. 

"Some evidence, including recent Federal Reserve research on consumers holding adjustable-rate mortgages, suggests that awareness could be improved, particularly among borrowers with lower incomes and education levels," Bernanke said.

Bernanke asked, among other things, whether borrowers are aware of the terms and conditions of their loans and if consumers are sufficiently well-informed to be wary of potentially misleading marketing tactics and whether they can shop effectively among lenders.  The National Mortgage Advocate (NMA) was developed to provide education, guidance and advice to assist customers in this way. 

We are glad to see that the Federal Reserve Banks are starting to understand what we have been advocating for years...Proper education, research, guidance and advice is the key to the success of the American borrower and seeking a professional mortgage planner, particularly a CMPS designee, is key to ensuring that success.

With numerous unscruplous lenders and ill-qualified mortgage personnel, the consumer needs to find a way to ensure they are being treated fairly and getting the best value for their money.  For more information on the NMA, please visit our website or contact us.

This blog information has been removed due to the implications to the company highlighted.  The website we reviewed regarding this company was an unauthorized site which provided incorrect information.  A new blog will be posted when we have a chance to review the CORRECT information. 

Please disregard the comments made below as they are reactions to the original information.  Once the new post is available, a link will be provided here...

For more information on the NMA, visit http://www.nationalmortgageadvocate.com/.

It has been a long time coming, but we finally got around to posting the site after deciding on the technology we wanted to use.  There is some information uploaded already, with plenty to come.  So what are we about...

The National Mortgage Advocate is an group concerned with what is happening in the mortgage industry.  With so many unscrupulous loan officers and mortgage brokers, it is hard to not get taken for a ride.  For that reason, The National Mortgage Advocate website was formed to assist the borrower in finding a true professional and seeking appropriate guidance.

There are many facets to finding a true mortgage professional.  For starters, it depends on your location.  Not all mortgage companies serve all states, in fact, there are many companies that prefer to handle only the state they are located in.  If you are interested in learning the various items you need to cover before settling on one (or a few) mortgage brokers, please read on.

As was said, There are many facets involved in finding a true professional in the mortgage industry and certainly in finding the one that will best serve your needs.  We started out talking about your location.  While you need to make sure that the company is licensed in your state, that may not be the only qualification you are looking for regarding location.

The facts are that many mortgage companies can do business in multiple states.  The problem with this is that many loan officers make mistakes regarding the laws of your particular state since they have many to cover.  This could be simple disclosure issues or other minor problems, but delays and possibly failure to close may result.  To avoid this issue, you can either choose a mortgage company that has loan officers handling only one state at a time, or our recommendation would be to use a company who only services that state.  You may even want to take this a step further and find a mortgage broker in the same area as your property, but don't limit it too much.

Another factor to measure into your search is the level of service you want.  In this matter, remember the phrase "you get what you pay for" and don't get caught up in the heavily advertised sites either.  Cheapest is not necessarily best and many .com lenders bait and switch you or advertise unrealistic rates.  Most of the heavily advertised companies do this, so you will likely pay more, get a different rate, and be left with less than excellent service by going with them.  They are usually less educated as well and many do not even really understand the industry, what drives interest rates, or what loan is best for you.  Make sure to read the post about the four questions you need to ask your loan officerto ensure you are at least dealing with a professional.

Another way of finding a mortgage company is through their professional affiliations.  Are they a member of their state's mortgage broker association, such as Florida Association of Mortgage Brokers (FAMB)?  Are they affiliated with the National Association of Mortgage Brokers?  What about the Upfront Mortgage Brokers Association?  Do their affiliations go beyond the normal mortgage industry associations?  You should research who they are affiliated with and what that organization is about.  This can eliminate a large number of companies from your list.

If you would like to take the level of service up a notch and actually seek professional mortgage advice and learn how a mortgage can be integrated into your financial plan, then look only at Certified Mortgage Planning Specialist (CMPS) designated professionals.  This shows their dedication to learning what is best for you, strategies involved, tax advantages, and how a mortgage can be used as a financial tool.   There is a test involved after the hours of training which ensures their level of knowledge.  To maintain the designation, they are required to take eight hours of continuing education each year. 

If you would like to learn more about how to find the mortgage professional that is best suited for your needs, browse the articles on this site and if you have any further questions, contact us and we will be happy to guide you along the best we can.