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Certified Mortgage Planners, represent what amounts to a new professional category in the Mortgage sector: one that arose as a response to legitimate criticisms of the mortgage banking industry. Early use of the term 'mortgage planning' was used by NAMP, the National Association of Mortgage Professionals, to contrast with 'mortgage brokering' which is usually plagued with problems of murky consumer understanding of the mortgage broker's fiduciary obligations and agency. Mortgage brokers, unlike real-estate agents, have no fiduciary obligation to the consumers. The agency problem in mortgage brokering is somewhat similar to the dual-agency problems that used to plague the real-estate industry in the United States until recently. The agency problem may be compounded when home buyers are referred to certain mortgage brokers by their own buyers agents in exchanged for undisclosed rewards. The argument for the need of having a consumer agent for mortgage shopping is that mortgages, while superficially simple, are very complex financial products that are difficult for the lay consumer to understand. While most mortgage shoppers know about the basic parametric terms of a mortgage, the nuances of ARMs, pre-payment penalties, call-ins, insurance, and approval for special situations such as deferred "section-1" clearances, are difficult for non-experts to understand and can result in a consumer getting "virtually locked-in" to a broker that their buyer's agent recommended so that a real-estate transaction will go through. The argument against consumer agency is that savy buyers can shop amongst mortgage brokers rather than have a mortgage agent shop for them so it is irrelevant how much and how the mortgage broker gets paid. There is also a trend to have "Upfront Mortgage Brokers" that will fully disclose their compensation. However, there are little nation-wide standards on what fiduciary/agency allegiances a 'mortgage planner' is supposed to have and the term has recent been more widely used to refer to a mortgage professional who gives other financial planning advice such as debt consolidation and this is what the rest of this article refers to. TASKS OF A CERTIFIED MORTGAGE PLANNER Certified Mortgage Planners work in concert with other finance professionals, including Certified Financial Planner s , to ensure that Consumer home finance products are in alignment with Market Trends , both current and historic. The deliverable of a Certified Mortgage Planner is a "Mortgage Plan" designed to maximize Home Equity while wisely managing Debt . BENEFITS AND CRITICISMS Proponents of mortgage planning argue that consumers often only tap into home equity during times of personal financial crisis. They argue this strategy can lead to serious misallocations and miscalculations that heavily impact the long term financial picture of borrowers. To counter this, supporters of mortgage planning recommended that consumers work closely with financial planners and mortgage planners to create a plan of action that takes into account the larger market forces and their own long-term goals. Critics of this approach counter this claim with the statement "sometimes people just want a mortgage and then to be left alone". Mortgage planning is not a new concept and seems to have grown out of the "debt management" movement popular in the late 1990's. TRAINING Mortgage Planners must have regional mortgage Licensing , undergo structured training, and pass a battery of tests in order to be certified by private Certified Mortgage Planning institutions . They must also pursue and document ongoing training regarding the mortgage banking industry, the Markets that impact home finance products, the role of interfacing with Financial Services professionals, and the methods, means, and ethics associated with advising consumers on home mortgages. One additional benefit is that when "the wheels come off the bus" CMP's will be there with unique financing strategies that attract buyers to realtor's listing. |
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