Christopher M. The company began modestly with seven employees, primarily focusing on aiding homeowners and homebuyers directly through his or her refinance and purchase needs. Thus, began the Retail Lending division. By , the company had outgrown its office space and relocated to its current corporate office location in San Ramon, California.
In , the company opened a Wholesale Lending division, mainly focusing on correspondent lending to achieve better pricing at a retail level. CMG Mortgage, Inc. Great success was found in the product and by early , the company was breaking its own production records.
CMG Financial was awarded a U. This marked an exciting time for the organization as it began to expand the product's availability in the market. As the housing market began to show signs of recovery, CMG Financial surged in growth again and launched a new business channel, Correspondent Lending, which allowed the company to partner with other organizations as an investor by purchasing closed loan volume.
Today, this channel represents one of the largest growth opportunities for the company as independent mortgage bankers look for alternative funding sources.
The CMG plan has since been rebranded as all-in-one mortgages with other lenders offering the loans as well. With CMG plans, paychecks are deposited directly into the mortgage account, and that amount reduces the mortgage balance.
These types of mortgages allow borrowers to pay down their mortgage balance faster. As checks are written against the account during the month, the mortgage balance rises. Any amount deposited in the account that is not withdrawn through the check-writing process is applied to the mortgage balance at the end of the month as repayment of principal.
The CMG plan is similar to the offset mortgage plans used in the U. Offset mortgages cannot be used in the U. In the U. There are potential benefits of the CMG mortgage plan. First, when the paycheck or other deposit is deposited in the account, it reduces the mortgage's average monthly outstanding principal balance. When the outstanding principal balance goes down, it may reduce the interest charged.
Interest accrues daily under this type of plan. So, even if that principal balance at the end of the month is equal to what it was at the beginning of the month, you have paid off interest.
As a result, the mortgage term is substantially shorter, and additional interest charges are saved. The potential drawbacks of the CMG mortgage plan are that it might carry a higher interest rate than more traditional mortgages and that a borrower can accomplish the same early retirement of principal by making unscheduled principal payments on a conventional amortizing mortgage.
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