Certified Mortgage Planner

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In the United States Certified Mortgage Planner is a designation for the purpose of establishing a new professional category in the mortgage sector: one that arose as a response to criticisms of the mortgage banking industry. It is often confused with the similar term mortgage planner.^{[citation needed]}

The term has no tangible meaning in other nations.

Contents 1 Origins of the term 2 Tasks of a Certified Mortgage Planner 3 Training 4 Benefits and criticisms 4.1 Benefits 4.2 Criticisms 5 References

[edit] Origins of the term

The terms Certified Mortgage Planning and Certified Mortgage Planner were first used by the NAMP (National Association of Mortgage Professionals)^{[citation needed]}. The term was coined to mark a clear distinction between the new approach to mortgage origination and the existing practices encompassed by mortgage brokering.

Proponents of mortgage planning, such as NAMP, argue that mortgage brokers have no fiduciary obligation to the consumer and are essentially independent contractors. This is in contrast to other related occupations, such as real estate agents, where agency is more clearly defined.

While mortgage brokering license requirements do exist, they are maintained on a state level, and enforcement is often difficult.^{[citation needed]} This factor, in conjunction with the rise in unconventional mortgage products between 1999 to 2006, has led to some brokers taking advantage of unsuspecting consumers.^[1]

To fulfill demand from some consumers for agency or advisory services, some mortgage professionals took an arguably different approach, and created the concept of Certified Mortgage Planning. While superficially simple, mortgages are very complex financial products that are difficult for some lay consumers to understand. Certified Mortgage Planners aim to educate consumers into the nuances of home loans, and assist them to find the most beneficial mortgage product and payment strategy.^{[citation needed]}

[edit] Tasks of a Certified Mortgage Planner

Certified Mortgage Planners work in concert with other finance professionals, including Certified Financial Planners^{[citation needed]}, 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.

[edit] 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^{[citation needed]}. 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.^{[citation needed]}

[edit] Benefits and criticisms

[edit] Benefits

Proponents of Certified 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 Certified 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.^{[citation needed]}

[edit] Criticisms

Critics of the mortgage planning approach counter this claim with the statement "sometimes people just want a mortgage and then to be left alone". That is, savvy buyers are capable of shopping among mortgage brokers rather than have a mortgage agent shop for them, regardless of how knowledgeable, ethical or affordable they are.^{[citation needed]}

Another criticism stems from the claim that mortgage planning is not a new concept, and seems to have grown out of the "debt management" movement popular in the late 1990's.^{[citation needed]} The concept of "Upfront Mortgage Brokers" who will fully disclose their compensation can be seen as another example of this broader trend.

Lastly, there are very few nation-wide standards on what fiduciary/agency allegiances a Certified Mortgage Planner is supposed to have. Certified Mortgage Planners gain certification from private institutions, with certification not being necessarily consistent.^{[citation needed]} This issue, plus the fact that the title Certified Mortgage Planner is often confused with Mortgage Planner, makes the overall term confusing to consumers.

[edit] References

1. ^ Mortgage-Trapped: Homeowners With New Exotic Loans Aren't Always Aware Of the Risk Involved, Washington Post January 14, 2007

^{[citation needed]}