FEATURE/New mortgage concept opens in Colorado

Business Wire, July 9, 1996

CHARLOTTE, N.C.--(BUSINESS WIRE FEATURES)--July 9, 1996-- Beginning this month (July), a new concept for home mortgage loans is available to borrowers in Colorado.

The concept could potentially revolutionize the mortgage industry in Colorado and nationwide in future months and years.

The loan, now available for both financing the purchase of a home or refinancing an existing home mortgage in a growing number of states, has several unique characteristics. It represents the most dramatic change in the structure and benefits of a home loan since the adjustable-rate mortgage was introduced more than 12 years ago ... and with considerably more benefits under current tax laws.

With the new loan, the principal balance does not amortize (reduce) with each payment. It remains the same throughout the loan's term even though the monthly after-tax payment is about the same as would be paid with a traditional mortgage.

The money that would normally be used to reduce the principal is, instead, available to fund a special universal life insurance policy that builds cash value on a tax-deferred basis for the borrower with every payment. At the end of the term, there is enough cash value accumulated in the fund to pay off the loan, plus provide a substantial tax-free lump-sum payment or income stream to the borrower.

Alternatively, the cash accumulation can be used by the borrower as part of the down payment on another home, or it can reduce the term of the mortgage. Typically, a conventional 30-year loan can be paid off in 20 to 26 years using this system if the cash value is used for that purpose.

Another advantage is a significant tax benefit. Since the principal balance does not reduce, the tax-deductible interest portion of each payment remains at its highest level.

Also, the loans are insured. If the borrower dies during the mortgage term, the loan is paid off by the insurance company. That means the family home passes debt-free to the heirs.

This mortgage concept is new in the United States, but not in Europe. In fact, it's now the "mortgage loan of choice" in the United Kingdom, where it comprises the vast majority of home mortgage loans.

The loan concept -- appropriately named the "Money-Back Home Loan" -- was brought to the United States by Investment Mortgage Corp. (IMC).

Other major business partners actively participating in the program are a prominent European bank; Mellon Mortgage Co., one of the nation's largest mortgage banking companies; Jefferson-Pilot, a top-rated life insurance company; AT&T, provider of the InView software program designed specifically to illustrate MBHL offerings in Europe and North America; and Newport Capital Funding Services, the marketing, training and production arm for the group.

"Our mortgage product is based on the success-proven concept in the U.K., but the details are adapted to the U.S. market, meeting the precise needs of consumers and conforming with all current laws in this country," said Garry Brooks, president of Newport Capital Funding Services.

For more information on the Money-Back Home Loan, call Investment Mortgage Corp. at 800/806-6222, or Newport Capital at 714/443-0810.

CONTACT: Investment Mortgage Corp.

Roger Pell, 800/806-6222

or

Newport Capital

Garry Brooks, 714/443-0810

or

The Woodard Agency

Jim Woodard, 805/658-6697