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rick dudley Asked:

Are you familiar with mortgage acceleration programs? (not bi-weekly payment or prepayments). These programs are already quite common in Europe and other countries now. Are you currently using an acceleration program or recommending acceleration programs to your clients. There is a lot of information avaiable on the internet these days and the approach seems solid but I wanted to get some opinions from people in the industry tonight. Thanks, Rick [San Jose CA]



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Answer Provided by: Deborah Manning [03/09/2009]

You have the keys to a mortgage acceleration program in your own hands right now. You simply need to pay toward principle a bit extra each month. Make sure you denote on your check that the extra funds are to be paid toward principle and you should be fine. One warning. Recheck your loan docs about application of principle. There are some sneaky loans that have a warehousing provision that allow the holder of the note to apply additional funds to any past check with your servicer. Generally, the interest coffers are filled up first, then the principle coffers are satisfied during any particular 30 day perior of time.