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Q: How does the EQUITYMAX® program differ from my lender's system?
A: The EQUITYMAX® method
1.Establishes individual restricted use holding accounts (FDIC insured) that provide security.
2.Utilizes the Federal Reserve Bank's ACH method of funds transfer.
3.Produces monthly bank statements that record the payment history and provide the audit trail to ensure accurate loan balances.
The lender's system in most cases is a monthly coupon system that requires a payment be mailed to the lender which will be posted to the account. All transactions are controlled by the lender.
Q: What is the advantage of the EQUITYMAX® program over the lender system?
A: The EQUITYMAX® program is a pro-active payment method that gives control to the borrower for accurate and timely principal and interest payments. The EQUITYMAX audit trail records all scheduled principal and interest payments as well as additional principal payments in the form of monthly statements to each borrower. The EQUITYMAX program gives you the control of the accounting system, the crediting system, the penalty system, the late charge system, the payment history and the arrears system.
Q: Will the EQUITYMAX® system of managed mortgage payments work on any mortgage loan?
A: EQUITYMAX® can be implemented on simple interest loans that have no prepayment penalties (consult your loan documents for details of your contract's provisions). These can include FHA and VA, adjustable or fixed interest rate, 15 and 30 year loans in any state in the United States. Loans that offer a reduced payment option that increases the length of loan's amortization (so-called negative amortization loans) must have the EQUITYMAX® transfers based on the full monthly payment amount to achieve the illustrated savings.
Q: How will EQUITYMAX® achieve the illustrated savings of interest charges on my mortgage loan?
A: By accelerating the principal reduction of the loan through an approximate 8% increase in your payment amount. This 8% (approximate) increase amount is collected and disbursed differently under our two programs: semi-monthly and bi-weekly.
Q: Is it possible to contribute to additional principal reduction over and above the 8% (approximate) increase built into the EQUITYMAX® transfers?
A: YES. You can designate any additional "optional" amount that you choose to be added to each semi-monthly or bi-weekly transfer. Or, occasional additional amounts can be routed through the program at your request. Consult your loan documents for prepayment conditions or limitations imposed by your lender.
Q: Why semi-monthly or bi-weekly transfers?
A: Budgeting and discipline. Semi-monthly and bi-weekly transfers are budget-friendly whether you are paid weekly, bi-weekly, semi-monthly or monthly. Commitment to this managed mortgage system provides and maintains the discipline needed to get consistent results.
Q: How often does EQUITYMAX® transfer semi-monthly payments?
A: Twice each month on the 10th and 25th (other dates available) days of the month. When these dates fall on non-banking days, transfers will occur on the first banking day after the 10th and 25th. The 8% (approximate) payment increase is collected with each transfer.
Q: How often are the semi-monthly transfers forwarded to my lender?
A: Monthly. Lenders generally do not accept "partial payments". The savings of interest charges are achieved through accelerated principal reduction generated by an increase in your payment amount, not by increased frequency of payments. One full payment (two semi-monthly transfers) must be in your Restricted Use Holding Account prior to transferring each monthly payment to your lender. Principal reduction payments (the 8% approximate increase amount) are forwarded to the lender monthly on the semi-monthly plan.
Q: Why is an individual restricted use account opened at the holding bank for each EQUITYMAX® member?
A: To make use of the Federal Reserve Bank's ACH (Automated Clearing House) method of electronic funds transfer for instantaneous movement of semi-monthly or bi-weekly transfers from your personal bank. These individually insured, accounts provide the utmost security for your funds. Monthly bank statements record your payment history and provide an audit trail to ensure accurate loan balances.
Q: Once I am enrolled in the EQUITYMAX® program, will my mortgage loan require any further attention from me?
A: Yes. Keep in mind that the EQUITYMAX® program is simply a payment system. The loan contract is still between you (the borrower) and the lender. All communication from the lender regarding the loan will still go directly to you. This means that all notices of changes from your lender that affect your loan payment must be forwarded to EQUITYMAX. These would include interest rate changes, escrow/impound payment changes, lender address changes, transfer/sales of the loan to a new lender, etc.
Q: What if my loan is sold or I buy another home?
A: Call EQUITYMAX® to transfer your payment plan to your new lender.
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