Tag Team Mortgage SchemesAmey Stone
Here's how this real estate-related financial scheme goes: A mortgage professional convinces you to refinance your home, pulling out a chunk of equity. Then he or she refers you to a financial planner or investment advisor who persuades you to buy a bunch of financial products with that freed up cash that may be either unnecessary or too risky. Both financial pros earn big commissions along the way.
"There are many financial planners and mortgage advisors who may inappropriately recommend that homeowners pull equity from their homes, and use it to make riskier investments elsewhere without any determination of suitability," said Leon Morris, executive director of the Mortgage Institute For Financial Services Professionals (MIFSP), in a press release I received today.
I've never heard of the MIFSP before, but I have had friends tell me of the exact scenario the release describes.
It seems like offering new courses in "mortgage based financial planning" (a term the MIFSP has trademarked), is an idea whose time has come.