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.