…in the NYTs on this article about the impact of the housing crunch on the high-end market:
“The first step for distressed homeowners, said Rhonda Porter, a certified mortgage planning specialist and broker in Seattle, is to pull out their loan documents and see what they say.”
Props to Rhonda, but no less an authority than Tanta over at Calculated Risk wasn’t particularly kind while shredding the article.
Fortunately she saved her worst for the author and the Geller dude, and rightly so.
That was my first shredding by Tanta. What’s amusing to me is that I was interviewed for over a half hour and all that was printed was one sentence!
I actually said that all home owners should review their mortgage note…not just distressed. I met with a client today who has an ARM adjusting in June, a bank (the friend of the family) was offering to refinance him into a 3 year ARM and had refused to provide the TIL. He was puzzled and once he understood how his current ARM works and that when it adjusts, his rate will probably be the same or possibly go down, you should have seen the relief on his face. This guy’s a smart fella, he just doesn’t do mortgages every day.
I enjoyed reviewing his ARM with him again and explaining the details of his mortgage. Often times, people are so emotional when they’re buying a home, some of the mortgage details may not sink in.
BTW don’t tell Tanta and her fans I just said that, they’ll claim I said all people should be on prozac! 😉
Come to think of it that is a fair question: What is a certifed mortgage planning specialist? Perhaps Rhonda can shed some light.
I was able to find this link: http://www.cmpsinstitute.org/public/what_is_cmps
Can someone please help me with the following?
Ms. Susan M. Wachter, professor of business and a RE specialist at Wharton said:
Today’s ARMs were “designed to fail, so you have to refinance,
Q-Diddy – You are right about the way they work but the education could be part of the problem. Admittedly my resources for this are circumstantial (perhaps Prof Wachter’s are better) but in IMHO they may have been designed to fail by having DTI’s that were already maxed at the ARM issuance rate. Any adjustment up would put the owner in a world of hurt. And interest rates have been historically low.
Rhonda – There was one followup comment on Calculated Risk that really made me think about the education that you try to get through to people.
Holden Lewis had an example of a person who could not find their ARM paperwork, so called the servicer to find out the Index, Margin, and Reset date so that she could do a review much like you were doing. They said they do not have it either, but a notice would be sent a few weeks prior to the reset and the information should be in there.
Admittedly there is a document retention issue, but things happen. So, in that type of a situation, where would the owner turn?
Q-Diddy, that quote about ARMS are designed to fail floored me. The client I talked to today is doing quite well with his 5/1 ARM-MTA that I talked him out of refinancing.
CMPS is a designation…you have to pass a 100 point exam (I can no longer remember what the pass/fail ratio was when I took it…I’m worn out)! They do promote several different speakers/topics–some that I never grasped…such as Doug Andrews and Missed Fortune (not sure if he’s still part of that dog and pony show). There is a lot of solid information there. The main reason for obtaining the CMPS designation is to differentiate yourself from other LO’s. A LO can also lose their CMPS designation if a valid complaint is filed against them. CMPS is also recognized by CFPs.
BMan, hopefully home owners keep their mortgage documents in a safe and sound place. It’s possible the escrow company or their original lender may have a copy. 🙂
BMan-
You’re right, I should be more sympathetic. A lot of homeowners don’t know how ARMS work or their impact, so there lies the inherent “design failure”
Back to Ms. Wachter:
Couldn’t the NYTs picked a better line to quote? Geez! I’m sure she has the credentials, but they made her sound like a total dumb azz!
BMan, I’m actually helping a client with a refi right now (out of a subprime ARM into an FHA–they were w/another LO originally and they’ve improved their credit scenario since the subprime mortgage)…anyhow… when she called the loan servicer to ask when her prepay was up, they told her they didn’t know! She had to bring her note to me to help her review when the mortgage was adjusting and when the prepay was over.
Trying to find loan docs? Call the escrow company who closed the transaction.
Just over the last week we’ve had several people asking us for information because it is tax season. Happens every year. Oh, the joy of explaining we are not CPA’s. In fact, LO’s call us frequently when consulting with a client who can’t find information and we help them out.
PS. In many counties you can look up the information online. (If you have an ARM, the info will most likely be there.)
It is one of the reasons why we place closing Docs on CD’s for clients: easy to quickly retrieve rather than digging in boxes for paperwork, unless they are digging in boxes trying to find the CD.
Rhonda,
I thought Tanta made clear she was just poking fun (or showing her annoyance; hard to tell sometimes) at your title as an example of the overuse of important sounding titles that are not, in fact, any indication of competance, at least not in Tanta’s eyes. (She is a tad judgmental….)
Water off your back feathers. If putting a long title after your name gets you more paying customers, go for it. Credibility with Tanta won’t put food on the table.
Patent Guy, JD, USPTO, BFD
Hi Rhonda,
All press is good for business.
I’m not a fan of the CMPS although I do like their code of ethics.
The bar is just set too low, and I don’t like the idea of training LOs how to be a junior financial planner and advising average joe clients how to “invest” their home equity by doing a cash out refi and putting the cash into the stock market. Oh but wait, the LOs probably refer their clients to stock sales people for this. So it’s a referral loop.
Why not just become a financial planner?
To me, this is the RIGHT way to go. LOs could really bring more credibility to the scene if they were also a financial planner. But maybe I’m getting ahead of myself.
What are the requirements for becoming a financial planner?
Jillayne, Becoming a Certifified Financial Planner takes a lot more time… I’ve passed my first CFP course 8 years ago and stopped there. I just couldn’t swing City U and starting off in a new mortgage career.
That is what attracted me to CMPS is that it is the only designation recognized by CFPs and if one were to go down that road, which eventually I may, this suits it.
PatentGuy, thanks…I’m not sure how many clients I’ve received due to the CMPS designation. 🙂 Tanta’s post certainly ruffled my feathers this morning…like you said…now it’s just water off my back feathers.
I’m amazed at how some people will find anything to attack…they must just enjoy it. It’s much like the media suppose, some may feel they need the drama attract readers.
I will chime in and say that the training at CMPS was competent, the information relevant, and the reference materials, and web site are useful.
That said, it is only a 3 day course, and some of it was filled with other stuff (mostly pitches to spend even more $$).
The CMPS designation may or may not help. There are few enough truly relevant training courses out there.
Since I’m giving props somewhat to CMPS, let me make a shout out to Jillayne’s classes, which are relevant, intelligent, and lively, if not as focused on revenue improvement.
Frankly, I would say her class has done more to improve my life, at substantially less cost. The impact on revenue is probably about the same.
Jillayne, I do have “professionals” who seek me out such as the money merge accounts and the financial planners who embrace “Missed Fortune” concepts. They can’t believe it when I tell them I’m not interested. With that said, these products are important to understand so they can explain to a consumer why or why NOT they should consider them. I get more people saying they want that mortgage with the low rates that the girl with the puppies has (option ARM) where this is not the best selection for them.
You have to understand and be trained on products to know the pros and CONS.
Not all CMPS drank the vendor kool-aid. But it does have me concerned to see CMPS shack up w/money-merge account lenders for their primary vendor (gold sponsor or what ever they call it) and I’ve written about it on Active Rain members only section.
Also, to echo Rhonda;
Folks are stirred up alot by the news about ARMs. I guess some of that is good for business, and some is bad.
We should be happy if someone asks about their ARM, and wants help to sort it out. It is NOT just an opportunity to “Sell” a loan, it’s an opportunity to show someone you might just care about something more than a warm dollar in your pocket.
Really, I think that is what Rhonda is talking about, being a Mortgage Professional (not being a quasi- financial advisor). Helping people understand their mortgage, it’s risks and benefits, giving them the best counsel you have to offer, and not trying to guess which way the stock market or mortgage market is going to blow. And reminding them that most of the time, they have the option to do nothing.
Today, we get to tell them about the coming benefit of staying in that ARM or HELOC (assuming it is currently adjusting) for the next 12 months or so (if it is an MTA based ARM, or a PR based HELOC).
If they just cannot stand being in an ARM (with it’s future risk vs present benefit, I understand that too.
A good night’s sleep is consistently undervalued today….
Rhonda:
I’d be interested to see your take on the “money merge” accounts, and offer my two cents.
Can I assume you are talking about the HELOC in 1st position Home Mortgage Accelerator stuff? And it’s similar companion “exclu$ive $oftware” (set up a side account, run your income and bills thru it, pay off your mortgage in half the time, etc.)?
Now that PR is so low, we should see these products crank up the advertising machine to the general population again.
Send me a link, if you have it, or write a new article…
What….you’re not busy are you? 🙂
OK, at the risk of being boring and treacly…
biliruben: Thanks for sticking up for Rhonda over there CR land. Seems that you may have some street cred over there?
Rhonda: No one deserves trashing like that! CMPS is just a name and a title, folks, and evidence that you took a course! What an effort expended to defend a perfectly logical suggestion, and a pretty normal association.
It does seem that Tanta relents, and points out that only one sentence was quoted from an unknown length of interview (Rhonda’s was by FAR the most logical quote in the article…know your mortgage!).
Finally, read the article, and at least some of the comments at CR. Tanta uncovers a slimy underbelly to an already distasteful article.
My sympathies, Rhonda. You deserve better.
Thanks, Roger. BTW if you log into the CMPS site, you’ll notice the banner ads for the money merge account lender.
I’m a little busy these you could say…helping home owners would be enough on a LO’s plate…as would staying on top of our ever changing guidelines and what programs are/are not available today.
I think the money merge account concept deserves a post of its own. When I was working in Los Angeles this ‘concept’ was starting to work its way through a couple of the African American mega-churches.
At the urging of a colleague who was considering one of these (a member of one of the churches), I looked through some of materials, and the arithmetic technically makes sense. However, it appeared to be pitched with a multi-level-marketing vibe heavy on buzz words and light on details.
Many scams (or high cost programs bordering on scams) have a kernel of truth packaged into a fee-rich structure. I’m curious to learn more and see if my first take was off base.
Rhonda, I know nothing about financial planners and their requirements. I’d love to read more about this sometime. Maybe a future blog post idea?
I get about 2 financial planners per month in my classrooms. They tell me they don’t do very many mortage loans but are licensed as LOs just in case their clients need a mortgage. They don’t charge a mortgage broker fee or earn any YSP on these deals; loan origination is just simply one of many services they do for their clients and they earn their fees in other ways, not via the mortgage loan.
This makes me wonder what a competent LO could do for his/her clients when that LO is also a financial planner.
I had never heard of them being called money merge accounts. I know this Home Ownership Accelerator Program fairly well.
A few yrs ago, some green younsgter came in touting the program, but had not been fully trained. I had investigated independently prior to the visit. Painful to watch!
My brief conclusion is that it has some advantages for the highly compensated, disciplined investor, who makes more than they spend.
Like they need the help! 🙂 They would succeed in MOST programs, including the much maligned Option Arm.
For those earning less than 150% of median income, I wouldn’t bother. Not much benefit for the increased risk, and increased bother managing cash flow.
I have heard of some software called that “mortgage professionals” have touted selling for a hefty chunk.
Lax, I see that you’ve made a comment while I composed mine.
Lax:
This is a core problem in lending AND financial services.
There are some great solutions out there, that are frequently misapplied, that benefit the seller of the solution, but often, not the buyer.
We never get to see the articles about borrowers and investors that are happy, and wealthier, from the use of more sophisticated loan and investment products, only the clueless and the ill-informed opportunists.
There is not much of a story in dog bites postman. Unless, I spose, the mailman gets a $50M settlement….
Finally, Rhonda, you know you’ve hit something when folks are ASKING you to write!
Thanks for being a good sport.
FYI, the comment thread on calculatedrisk has continued on past the 250 mark. Here is a brief update:
Tanta writes:
Calling someone a “bucket of scum” is hardly polite
Oh, yeah, I forgot to be polite to a scumbucket. Silly me.
We were talking upthread about the problem of reputable people (people like Rhonda) wanting to escape the taint of “mortgage broker” by adopting some fancy new title. I pointed out that the scum just adopt the new title, too. I was asked, basically, what the alternative is.
My alternative is to call a scumbucket a scumbucket. In other words, if I am “polite” to Geller, then I’ll use the same terms to describe him that I would use to describe Rhonda Porter. That forces Rhonda to try to find a new title, and the cycle rinses and repeats.
How about Rhonda (and Morgan and Jillayne and all our decent friends on the front end) just stick with being loan originators or RE agents of some sort and we scrape up the guts to call out the scumbuckets for what they are?
Perhaps we could reclaim our profession instead of trying rhetorically to escape its taint? Just askin’.
Tanta | 03.21.08 – 9:08 am | #
http://calculatedrisk.blogspot.com/2008/03/nyt-journalistic-malpractice-again.html
Jillayne:
Thanks
I’ll go to work on scrubbing out the scumbucket!
Not very rewarding, financially, distracting, actually. Smelly work, gets you no friends! 🙂
It WAS curious, upon rereading, two of the quotes came from CMPS folks. Why? Reporters don’t just pick up the Yellow Pages to get a quote….(who uses them anymore?)
Both quotes were sensible, and nothing in either was loaded with impropriety.
Could not find any reference to CMPS in Geller’s stuff, nor could I find Geller in CMPS. No evidence that he is a CMPS member.
It seems CMPS has been unfairly maligned.
Before the rants, I’m just stating that nothing here indicates the CMPS representatives quoted did or said anything inappropriate. I am NOT stating that CMPS representatives have never done anything wrong, OK?
I do believe that CMPS has taken away membership priveleges in the past, and reserves the right to, in the future, for unprofessional conduct.
Should I invite them (CMPS) to the discussion?
(I have no idea of the RCG protocol, but if a friend or associate was getting trashed in a meeting, and I thought it was unfair, it might merit an invitation?
Jillayne – I just read that and thought about posting it here myself.
Tanta is magnificent.
Jillayne, it’s not even worth a response on CR. Why should I respond to someone who’s calling me scum because of my designation?
Here I am in the blogosphere using my real name and not something made up to hide behind…and she’s decided to call me scum?
She has her undies in a wad because I care enough about my profession that I decided to take the best course available that time to distinguish myself above other LO’s not willing to make that commitment. A small bar to pass? You might think so. However many did not and tens of thousands have done nothing to advance themselves in their profession. I see no reason to defend my choice anymore.
I do also refer to my title as a “Licensed Loan Originator” and I do include CMPS. I’ve had some mortgage bankers give me grief over that which I find amusing. Like CMPS, we have to go through more hoops to be licensed…I’ll promote both “titles/designations” proudly.
It’s not worth a response on her site. I’m done. I see no reason to enter into discussion with people who attack like that. The only quote I had in the article was that home owners should review their mortgage notes. I’m amazed at the ugliness that was generated on that blog. And I was very touched by people who “defended my honor”–many from SB. 🙂
Roger,
I don’t think this post needs to become a CMPS rant discussion. Dustin was kind to give me some kudos for my “sentence” in an article in the NYT. Let’s stay on track.
I don’t think she called you scum, Rhonda, unless I missed something.
That’s just how she is. She’s doesn’t suffer fools easily. I rarely dare post over there.
IMHO, she doesn’t need controversy that her temper generates to generate traffic. Her posts are such high quality it isn’t necessary.
Rhonda,
I don’t think she was referring to you as “scum.” Her point, I think, is that reputable people within a profession that has many less than reputable members should not have to jump through hoops to distinguish themselves from their less scrupulous brethren. If society would stop being so permissive of those who are unethical and call them out with candor rather than playing nicey-nice, the cream would rise to the top without effort. Or something along those lines.
IE – I think she’s putting you in the cream category, and simply lamenting the efforts you have to make to distinguish yourself from the scum, FWIW.
I have not read the other posts over there, but am going off what was quoted here.
Thanks czb and biliruben. I’m over it…if Tanta was refering to me a reputable, it was a very backwards compliment at best.
I think she specifically gave Rhonda, Jilayne and Morgan a pass from scum-hood. Could have been more gracious about it. Lack of civility is rampant in the blogging venue, and should be called out (politely).
Jillayne characterizes CMPS as a class to teach novices how to suck equity out of homes to generate leads for financial planners.
I attended about 9 months ago, so I can speak from direct experience.
There’s lots of material, and there certainly was “sales stuff”. Everybody comes out with something different I suppose.
In my opinion, the majority of the curriculum was devoted to training LO’s in assisting investors in real estate, and understanding the issues of that market segment.
I studied hard, but had a nagging suspicion that the days of coaching novice landlords had already come to a close, now that EVERYONE is aware you can actually lose money on a home.