From: "Jeff Strickland" 
Newsgroups: alt.org.natl-assn-mortgage-brokers
Subject: Re: Equity Acceleration
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Date: Sat, 21 Apr 2007 23:06:40 GMT


"Ashley"  wrote in message news:XK6Wh.273$Fs6.44@trnddc03...
> First of all, I am not lying and we are not money lenders.
> Your discussion about HELOCs is getting at the idea our system employs.
> It works with any kind of mortgage and the homeowner does not refinance
> his existing note. We show the homeowner how to force changes to the
> amortization schedule by making precise equity transfers from HELOC to
> 1st mortgage. But he does not use money out of pocket.
>
> I respect your opinion, but you're simply not sufficiently informed on 
> what's available.
>
> If you would like to learn more, then contact me directly.
>

The point of a news group is to discuss topics in an open forum where 
participants and observers can gleem information they otherwise might not 
have or know. Technically, it is very poor form to sell products through a 
newsgroup, indeed many groups forbid commercial postings -- your post is a 
commercial post, by the way, because you are soliciting business.

It is not mathematically possible to pay off a mortgage without making 
larger payments than the amortization schedule calls for. Period. If one is 
not taking money out of his pocket, then the outstanding balance is not 
going down.

You can sell a product that pays the mortgage faster but does not change the 
buyer's standard of living IF the product captures all of the income dollars 
and reduces the principle amount immediately and vastly. The buyer/borrower 
still has bills to pay, and he pays them with HELOC dollars (checks issued 
at the onset of the mortgage), but the difference in total income and total 
outflow remains in the mortgage account and reduces the principle very 
quickly.

Alternatively, the buyer/borrower can change his standard of living by 
throwing extra cash at the principle every month and reduce the outstanding 
balance that way.

The difference in the two methods is that the first is a true Home Equity 
Line of Credit in a 1st Trust Deed position that gives the borrower access 
to as much as 90% of the equity value of the home without having to 
refinance, the latter method locks up the equity into the mortgage and 
requires a refi in order to gain access to any equity acquired. The first 
method, the HELOC 1st, effectively takes money from another savings vehicle 
and moves it to the mortgage. The effective APY of the savings dollars 
becomes the interest rate of the mortgage. Additionally, daily living 
expenses and regular bills that are paid through the HELOC checks will 
transfer those bills to mortgage interest, which then become a tax 
deduction.

Let's say you make $7000 per month. Your mortgage is $3000, and the rest of 
your bills -- utilities, credit cards, groceries, car payments, etc. -- add 
up to $2000. Your mortgage and bills are $5000, your income is $7000. These 
numbers would put $2000 into savings each month. If you had a HELOC 1st, 
then you would reduce your principle by that $2000 instead of collect 
interest on a passbook account. Another thing is that you get paid on the 
1st and the 15th, but don't make the house payment until the 25th. This 
parks yoru house payment for a minimum of 10 days not making any money at 
all. If your pay check was deposited directly to the HELOC account (a 
requirement of the program, by the way), then your principle is reduced from 
the day you get paid, not from several days after you write the check. You 
have a lower Average Daily Balance from which to calculate interest due, and 
you lower the balance more, and you pay for stuff with HELOC dollars that 
become mortgage interest that is deductable from income taxes.

It is a good program for the right kind of borrower.