Last Updated March 21, 2013
The Professor's Background
He is Jack M. Guttentag, now Professor of Finance
Emeritus, formerly Jacob Safra Professor of International Banking, at
the Wharton School of the University of Pennsylvania. Earlier he was
Chief of the Domestic Research Division of the Federal Reserve Bank of
New York, on the senior staff of the National Bureau of Economic
Research, and managing editor of both the Journal of Finance (1974-77)
and the Housing Finance Review (1983-89).
Professor Guttentag has been a student of the home
loan market for many years, and his bibliography of scholarly articles,
books and monographs is large and diverse. He has also been an active
practitioner, serving as a consultant to many government agencies and
private financial institutions, including the Department of Housing and
Urban Development, USAID, Freddie Mac, Citicorp, Dominion Bancshares,
the World Bank, J.P. Morgan Securities, the New Zealand Bankers
Association, and many others. In addition, he has been a director of the
Teachers Insurance and Annuity Association, Federal Home Loan Bank of
Pittsburgh, Guild Mortgage Investments, and First Federal Savings and
Loan Association of Rochester.
Throughout his career, Professor Guttentag has been
concerned with the difficulties faced by consumers in the home loan
market. In 1985 he joined with Gerald Hurst, a colleague at Wharton, to
found GHR Systems, Inc. which developed a nationwide electronic network
that lenders use to deliver complex mortgage information quickly to
loan-officer employees, mortgage brokers, and consumers using the
internet. The company also provided easy-to-use tools that enabled loan
officers to act as consultants to borrowers during the origination
process, while speeding up the process. In August, 2005, GHR was
purchased by Metavante Corporation.
In 1997 Professor Guttentag began to phase out
his teaching at Wharton to focus his efforts more fully toward helping
consumers navigate the home loan market effectively. He began a
weekly column on mortgages that is nationally syndicated, and began the
development of this web site. The major purpose of both is to help
consumers make better decisions. He published The Pocket Mortgage Guide
in 2003 and The Mortgage
Encyclopedia in 2004, with a second edition in 2010; all were published
by McGraw Hill.
Certification of Loan Providers
In 2000, Professor Guttentag in collaboration
with several mortgage brokers developed Upfront Mortgage Brokers
(UMBs). Brokers who agree to do business in accordance with UMB
principles, and who display these principles prominently on their web
sites, were listed on this site for easy access by consumers. See
Upfront Mortgage Brokers.
In 2003, the certification process
was extended to internet-based mortgage lenders. See
Upfront Mortgage Lenders.
In 2006, it was further extended to
one internet-based lender (Amerisave) who discloses wholesale prices and
markups. See
A New Approach to Selecting a Loan Provider.
|
In 2006, Professor Guttentag transferred all
his intellectual property connected to UMBs, including
trademarks, to the Upfront Mortgage Brokers Association (UMBA),
a non-profit corporation. UMBA has taken over monitoring and
other functions, wth UMBs now listed on UMBA's web site,
www.upfrontmortgagebrokers.org. UMBA is supported by dues
paid by UMBs. The professor is chairman of the board of UMBA, an
unpaid position. In 2011, the professor began the development
of a loan origination network on this site, with participating
lenders subject to a new type of certification; they are
"Certified Network Lenders" (CNLs). Among other things, CNLs
transmit their prices and underwriting rules directly to the
network, with no intermediation by loan officers. See
Why Shop Here: Certified Network Lenders. In 2013, a similar
network based on similar principles was developed for reverse
mortgages. See
Where Does a Senior Go For Information About Reverse Mortgages? |
How This Web Site Is Supported
1. The site has never accepted advertising, and has
never been paid by UMBs.
2. The professor received a $60,000 grant from the
Ford Foundation in 2003 which was used largely to pay for the
development of the calculators on the site, and to defray some legal and
other costs involved in establishing the Upfront Mortgage Broker
program.
3. Under the arrangement with Amerisave in 2006
mentioned above, the Professor gets paid for borrowers who access
Amerisave through this site. The details of this arrangement are spelled
out in
http://www.amerisave.com/mortgageprofessor/Agreement.cfm
4. The professor was not paid by UMLs during
2003-2010. For a few months in 2011, he billed UMLs for traffic in
order to generate revenue needed for the development of the loan
origination site. The billing stopped when the Certified Lender Network
was formed.
5. CNLs pay the professor a fee each time a
prospective borrower requests contact with a specific lender. This
method of charging for leads is markedly different from those used by
lead-generation (LG) sites, such as Lending Tree or Lower My Bills.
- CNL borrowers shop anonymously until they
select a lender, at which point they provide their personal
information to that one lender. In contrast, LG borrowers must
provide personal identifying information to the site, which sells it
to 3 or 4 lenders.
- CNL borrowers receive on-line decision
support in connection with their selection of the best mortgage
type, interest rate/fee combination and the lender offering the best
deal on their package. LG borrowers do not.
- CNL borrowers are protected against price
"low-balling" and lock scams. LG borrowers are not.
- CNL borrowers have access to an ombudsman. LG borrowers don’t.
For more detail on these and other differences, see Why Shop Here: Superior to Lead Generation Sites.
