Friday, December 5, 2008

Weekly Poll Results for December 5th

The question of the week was Your estimate for when the economy will begin recovery?

The results were as follows:

100% of the responders said 2009

This is encouraging that the majority of the people at least in our little community are optimistic about our economic chances for next year. Does this have something to do with the incoming Presidential administration? Perhaps it is more a positive responce to the efforst of the Feds to stave off a deeper recession?

Time will tell. We will continue our efforst to inform and encourage your participation so that we can all benefit from a greater understanding of the financial world we live in!

We thank those that took time to participate in the survey. Unfortunately no one left any comments with their contact information so we were not able to do any interviews. Hopefully this week we will be able to provide an interview along with the poll results.
Please remember to not only participate in the poll but to drop a comment with your contact info so we can interview you!

Tuesday, December 2, 2008

Poll of the week results for week ending 11/28/2008

The question posed in last weeks poll was What will have a bigger impact on the economy from new president?

The results were as follows:
60% said Ending the war in Iraq
20% said A new stimulus package
20% said A foreclosure moratorium
The overwhelming majority feel that ending the costly war in Iraq will free up enough capital that we can focus on rebuilding our economy at home.
We thank those that took time to participate in the survey. Unfortunately no one left any comments with their contact information so we were not able to do any interviews. Hopefully this week we will be able to provide an interview along with the poll results.
Please remember to not only participate in the poll but to drop a comment with your contact info so we can interview you!

Wednesday, November 26, 2008

Feds change mind AGAIN now will buy bank assets

Okay so this sounds like a childrens playground sage we know, but the Feds now say they WILL buy the troubled assets with the TARP (trouble assets relief program) funds that they were given.

News on this development and the speed with which they announced they will try to put it onto the street drove mortgage rate strikingly low today. The market saw 5.25% par pricing on a 30 year fixed interest rate today! This is excellent news for everyone and shows just how quickly the market would be able to recover if only people would get off their overpaid behinds and make things happen.

With pricing flirting with the bottom range of 5% one has to wonder if it's too much to ask Santa for a mortgage note for christmas that start with a 4!

Wednesday, November 12, 2008

Feds change mind and WON'T buy troubled assets

So the single most important factor that the FED gave in passing the $750B bailout was to buy troubled mortgage assets off banks and sell them later for a profit.

Today they reversed the entire principle the bailout was based on!

Just when we think it's gotten so insanely crazy that there is no human way possible to get any more wild...

Now they claim they want to invest in credit card companies (they made American Express a bank so that they can claim easier money from the Gov) and auto companies. Incredible is all we can say about today's revelations.

"I believe we have taken the necessary steps to prevent a broad systemic event. Both at home and around the world, we have already seen signs of improvement," Paulson said in a speech at the Treasury Department.

This is the same guy that said at the very beginning that the economic troubles were confined to the subprime loan market only. He read that one a tad bid wrong when it spread to the entire US economy and eventually the world!

As an industry insider I can tell you that banks ARE NOT lending and have only further tightened their restrictions on borrowers. We look forward to seeing how this news will play out with interest rates, lending restrictions, and the overall health of the economy.

Monday, November 10, 2008

Obama Economic Policy that affects you part I


Well we told you we would show you the plans of whoever was elected in laymens terms. this is part I of our look at the policies of our new President Elect Barack Obama.

The problem:
According to a report from Credit Suisse, 6.5 million loans were expected to fall into foreclosure over the next five years. That's based on home prices dropping 10% in 2008 and 5% in 2009, before rising 3% in future years.

The Center for Responsible Lending estimated in August that nearly 2.2 million foreclosures would occur due to defaults on subprime loans from late 2008 through the end of 2009. More than 40 million homes in neighborhoods surrounding those foreclosures would suffer price declines as a result, causing a $352 billion total decline in property values, or an average $8,667 per home.

All those extra homes on the market drives prices down which cripples lenders assets on the books and further aggrivates our economic woes.


Hope for Homeowners (H4H). This plan went into effect in October 2007 and it aims to allow a new lender to issue a government backed mortgage at 90% of the current appriased value. The old lender will have to write off the difference. This may be acceptable to them since they would loose even more if they had to foreclose.

Foreclosure Mortatorium - Obama has called for a few month stop on all foreclosures. During this time banks will be forced to look at homeowners that are attempting to make payments in good faith but need a modificaiton to the loan to help them keep the house.

Bankruptcy reform - Obama has called for bankruptcy reform that would allow a judge to modify a loan if a lender refuses to do so.

Regulations such as:
  • Crackdown on mortgage fraud - crack down on mortgage fraud, create new criminal penalties for mortgage professionals guilty of fraud and require "industry insiders" to report suspicious activity
  • Better loan disclosure - provide potential borrowers with a "Homeowner Obligation Made Explicit," or HOME, score which would give them an easier, standardized way to compare mortgage products and compare the full costs of the loans.
  • Universal mortgage credit - His proposed 10% universal mortgage credit for homeowners who don't itemize their taxes could provide an average of $500 to 10 million homeowners, most of whom earn less than $50,000 per year
  • Improve housing affordability. Obama has proposed creating an Affordable Housing Trust Fund to create "thousands" of new affordable housing units annually
  • Build sustainable communities.

We hope this helps understand the stated goals of our new President. What is clear is that this is going to be his top priority when he gets into office. The above mentioned changes along with an aggressive stimulus package is expected early next year.

As always we'll keep you in the loop. Look for part II of his financial policies coming soon...

Sunday, November 9, 2008

Weekly Poll Results for Nov 7th

The poll question was What would you do if in foreclosure?

50% of respondents said they would chain themselves to the home and call the police
50% of respondents said they would get a job or do whatever else it takes to keep the home.

Both answers make it clear that people DO NOT want to walk away from their homes and let them foreclose.

These are troubling economic times and many people are upside down on their homes and facing ARM resets. People in this situation need to immediatly contact their lenders and ask about a loan modification. This will allow the lender to review their financial situation and possibly reduce the interest rate or principle balance in order to lower the total monthly payment for the homeowner.

This is a solid tool that all homeowners in trouble should be pursuing right now with their lenders.

We look forward to interviewing one of our readers weekly about your poll selections so please don't forget to leave a comment when you vote on the weekly poll.

Monday, November 3, 2008

Happy November... lets hope it's better than October!

We hope everyone have a safe and fun filled Halloween this year. With five children we always have a big event with halloween and it's a great time. This year was no exception.

We are tracking rate improvements this morning thankfully. Last month ended pretty brutally with mortgage interest rates on the rise even in the face of huge stock market volatility and a Fed Fund rate that saw itself cut down to 1%!

The rest of this year looks to promise even more volatility and surprises. We expect interest rates to continue to their roller coaster ride in the 5.5% to 6.5% range through the end of the year. Consumer sentiment is down, jobs are down, we expect to see the bleakest holiday shoppping season in recent history, and it's still tougher than a wrestling a greased pig to get qualified for a loan. On top of that we get to pick our next President tomorrow.

We hope you stay tuned as we keep you up to date with the inner workings with simple explanations of this historic financial and political environment we are living in. Don't forget to vote on the poll of the week and also leave a comment if you wish to be interviewed!

Saturday, November 1, 2008

Mortgage Company Goes Green

Anyone who has ever bought a home knows that the process involves mountains of paperwork. There are applications, disclosures, bank statements, pay stubs, and a never ending supply of other forms that require signatures when buying a home. In today’s day and age mortgage companies are finding it both cost effective and environmentally friendly to attempt to decrease the amount of hard copy paper that has to be transferred around and “go green”
There are a number of ways that Florida based Five Stars Mortgage has managed to do this.

The first is right at the beginning with the loan application. Through the online loan application a potential homeowner can input all of the necessary information and avoid having to use hard copy papers for the loan application. This allows the information to be automatically delivered to a loan officer that can immediately follow up with and finish the application process for a client.
Once the application is taken the loan officer can email a client all of the necessary loan paperwork that would require their signatures. There is a new product in the industry that is accepted by banks and lenders nationwide that allows for e-signature of the online documents. This avoids so much paperwork alone that if every mortgage company in America used it we could put a significant impact on the paper use in our country. The signed digital documents are delivered back to the lender without having to have printed signed, and then faxed back to the mortgage company where they would have had to once again print the documents.

These digitally signed documents can then be uploaded into bank websites where they can be underwritten without having to print them out once again. Now at this point you have saved from having to manually print this same set of documents three separate times. This is hundreds of sheets of paper you have saved in one loan scenario!

Once the file is being underwritten by the bank the client can access up to date status of their loans by logging into the Five Stars Mortgage and entering their tracking number in the loan tracker field. Through this interface each client can track the status of their loan in real time 24-7. In addition florida mortgage companies can update all of the other parties involved such as appraisers, realtors, inspectors, and loan officers through online tracking software and email. This allows everyone to stay in direct communication on a regular basis and ensures the loan moves faster through the entire process. Ask any realtor and they will tell you that communication during the loan process is invaluable to helping them do their jobs.

Finally the closing day comes and the client will have to manually sign ONE time documents that can be dispersed to all appropriate parties. In the near future we believe that even the final closing will involve a digital signature that will be used to send back to the lender, and even recorded digitally at the courthouse to have a complete paperless loan transaction.

These are just some of the ways that Five Stars Mortgage and the rest of the mortgage industry are attempting to do their part to responsibly manage their environmental footprint. Staying ahead of the curve with technology is the best way to benefit home buyers and other partners in the industry during these trying economic times. We look forward to the financial recover of the nation but until then every little bit helps!


Friday, October 31, 2008

4th week of October weekly poll results

The topic of last week's poll was: Which President will do more for average homeowners?

Surprisingly the results were that 33% of the respondents felt that Senator Barack Obama would do more and 66% of the respondents felt that Senator John McCain would do more for the average homeowners.

This does not follow the polls we are seeing play out with the major news networks. Perhaps your seeing some breaking news from our little corner of the internet world that will herald unexptected results at the polls next Tuesday.

We plan to provide detailed information about the person that is elected next week and their proposed financial plans. We will post their plans here for all to see in laymans terms so that we can hold them to their word on the issues!

Thank you to all the participants. We would like to recognize and possibly interview one respondent from each topic choice each week. If you take the time to take the poll please leave a comment and include your contact information so we can highlight you, your company, and your views here on the blog!

Thanks to all who continue to visit and help us shape this resource into a forum for what you need. Make sure you vote on the poll of the week!

Tuesday, October 21, 2008

Mortgage rates drop with new confidence


For weeks we have been hovering around the 6.5% 30 year fixed. Yesterday we saw a path to the 5.5% rates we enjoyed for a very short period when the Feds took over conservatorship of Fannie & Freddie. Yesterday par was slighly below 5.875%. We believe that possibly by the end of the month we can get back to the sweet spot of 5.5% par rates!

The way these rates rise and fall can be a complicated subject. We will stive to keep you abreast of the most up to date information available as always. Confidence thanks to many outside factors has help MBS (mortgage backed securities) gain footing in recent days with banks and investors.

Could it be? Is it possible? Is rational thinking coming back to the markets? Probably not, but lets all take advantage while it lasts. This may be part of the "dead cat bounce" you hear about where we get a few glimmers of hope amongst our downward spiral.

We tend to be a bit more optimistic and think we may have seen a floor in recent weeks and the markets are trying to stratch their way back to normalcy.

Stay tuned and we'll continue the discussions with you as always about whats happening and how it affects you!

Saturday, October 18, 2008

The tranformation of mortgage jobs in Florida

Five Stars Mortgage has released a new commentary on the state of mortgage jobs in Florida. In it they offer tips and strategies for mortgage professionals attempting to survive this unprecedented downturn. Here is in excerpt from the article:

"The effective of the global credit crisis has hit particularly hard on the financial sector and in particular with mortgage jobs. It has been estimated that as of September of 2008 we have lost a minimum of 65,400 jobs in the mortgage industry! While job numbers accross the nation have also declined, this number of jobs in the mortgage industry has hit many families very hard.

In previous articles we have addressed the underlying causes of the housing bubble and subsequent meltdown. We have seen how the blame flows from top to bottom in the mortgage industry. Our thoughts and prayers however, must go out to the over 65,000 workers and their families who have had to start over in a brand new career due to no fault of their own in most cases...

click to read the article entitle "The Future of Mortgage Jobs in Florida"

Friday, October 17, 2008

Results of weekly poll: Do you support the $700B bailout bill?

Well the results of our latest poll are in. The question was "Do you support the $700B bailout bill?". The results represent exactly what we expected to see:

  • 40% of responders said yes
  • 40% of responders said NO
  • 20% of responders said they didn't understand it

We feel this is probably pretty indicative of the state of the country. People are split right down the middle as to whether this was a good idea or not and a large portion of the country doesn't really understand this whole problem or this particular fix for it at all. No doubt it is a complicated problem but it is one we hope to help those 20% wrap their heads around so they can make educated decisions at the polls regarding the issues as they relate to our economy & more specifically the mortgage markets.

We welcome any and all questions from those 20% so that we can help explain in simple terms exactly what the major causes of our current dillema are. No question is too dumb! People need to talk more about the situation and help our elected officials in making the RIGHT choices in fixing this mess.

Thank you to all the participants of this week's poll and please continue to participate in the polls and with questions or comments.

Tuesday, October 14, 2008

Big Ben Bernanke and Sir Henry Paulson speak - Markets react

Mr. Bernanke and Mr. Paulson both spoke this morning about their plans to utilize the tools empowered unto them to avert our financial meltdown from further damage.

Both speakers spoke with a confidence that we have not seen in quite some time from either of them. The markets appear to also gain confidence from their speach. The short of it is that they do indeed intend to buy commercial paper as backstop for banks as well as invest taxpayers money in shares of banks. Bernanke still feels that the root of the problems are confidence on the part of investors. Mr. Paulson agrees and feels that lack of confidence in mortgage backed securities is the biggest concern. All of their efforst are meant to restore confidence to the market and get lenders back to lending again.

We have seen EXTREME tightening from lenders with regard to conditions and hanging up loans trying to find ways not to fund them. These are not risky loans we are talking about my friends. These are poeople ranging from 700-800 FICO's that are having problems getting simple refinances done.

Rates remain fairly unchanged with some slow progress toward dropping. This is extroardinary when stocks are rallying and a good sign we feel for short terms rate watchers. Most lenders have not released rates this morning yet be we suspect 6.25% or so to be par on a 30 year fixed. Stay tuned and we'll keep you up to date.

Monday, October 13, 2008

Columbus day ends with biggest one day gain since 1933!

Well the investors have spoken. They apparently feel that the worst of the credit crisis is finally behind us. Lets all hope they are right.

Investors rallied and the DOW was up more than 900 points! This is the largest one day point rise in a single day in history folks. Just another day in the volatile market we are becoming accustomed to. One day we might see one of our biggest banking firms go down and less than two weeks later the biggest one day increase in points in history. Everyone having fun yet?

Experts think that the world focus and steps announced to help ease the afflicted global credit crisis was one of the major contributors to todays meteoric rally. Of course today was a holiday and there was no technical data to help shower us with the usualy wonder news.

Lenders were closed today so no interest rates were released. We will have to wait and see how this new confidence will play out with the rates tomorrow. Experts are hot & cold depending on who you listen to. We tend to be optimistic and hope that last week marked the literal bottom of this whole credit crisis and we can at least hold that mark or improve on it from here on out.

Check back tomorrow and we'll see how rates look and get a whif of some techinical data to see how strong this rally will be!

Columbus day mark a glimmer of hope for stocks and interest rates?

Happy Columbus Day!

Stay tuned for round two of the bailout feedback here on our little blog.

Stock Markets are set for a bit of a rally as global meetings over the weekend addressed the global recession concerns.

Rates rose last week from 5.875% to 6.125% on a 30 year fixed! Generally when stocks do well interest rates rise... so what does a small rally mean for rates today? Stay tuned and we'll keep you up to date as the information begins to roll in today.

Saturday, October 4, 2008


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New Software Product helps Mortgage Companies create a “Green” Business Environment for a paper intensive industry.

ATLOS, LLC (Automated Tracking Loan Origination System) loan software is a new web-based mortgage loan processing and document management system that provides a completely paperless environment for any mortgage company...Big or Small. This is one of the first truly green solutions specifically tailored for a paper intensive mortgage industry. ATLOS was originally an internal system for a New Orleans based mortgage company. After Hurricane Katrina destroyed this company’s office, the owner knew his internal software was something many other mortgage companies could benefit from. It allowed his company to retain all customer loan data when most mortgage companies in New Orleans lost everything including their paper files. Today, ATLOS, LLC has launched and is having a great response in the mortgage industry.

ATLOS includes a host of features not readily available to mortgage companies. These features allow mortgage companies to streamline workflows thereby reducing costs. Loan fraud prevention is also built into ATLOS.

In today’s mortgage lending industry, real-time answers and online functionality are crucial for survival and success. With web-based technology, ATLOS finally gives mortgage companies the freedom of anywhere/anytime functionality.

Below is a description of the main features:

- Web-Based Loan Origination With ATLOS mortgage companies have access to their loan information any time anywhere. There is no cumbersome installation. Mortgage companies can greatly reduce IT expenses. All that’s needed to utilize ATLOS is a PC and the Internet.
- Hosted Paperless Loan File Manager With ATLOS mortgage companies get online electronic storage of all loan files. Mortgage companies can eliminate all paper files, along with the timely and costly delivery fees that can be associated.
- Integrated Payroll & Billing Features With ATLOS, mortgage companies can automate all payables and receivables. Mortgage companies can create fast commission calculations through a completely customizable platform.
- Web Conferencing With ATLOS, mortgage companies can communicate with anyone, directly through ATLOS using video, audio, chat, and desktop sharing.
- Much More ATLOS incorporates an Integrated Internet phone, message board, calendar, contacts, reports, and fraud alerts.

Friday, October 3, 2008

Bailout Bill Passes!

The house passed the bailout legislation today. The vote for passage of the Senate-amended bill was 263 to 171.

Remember that the Dow dropped over 700 points the last time they couldn’t get this bill passed and so today’s passage marks a possible turnaround for the economic slowdown we have been seeing.

Some of the major benefits we expect to start to see once implemented include:

- Once the Government purchases the mortgages from Banks they will have the flexibility that the banks DO NOT to modify loans which will help stem the surging foreclosures that we have been experiencing.
- Confidence will slowly return to wall street which will lead to lower 30 year interest rates spurring more home purchases
- Banks will have more liquidity and hopefully will be able to approve more credit worthy borrowers for new loans also decreasing the glut of housing on the market today.

These three major points will all with the underlying problems that at dragging down the economy. That is that there are too many homes available on the market and not enough qualified buyers to purchase them up. The rising foreclosure both adds to this as well as hurts the banks and their ability to lend.

We will keep you updated with the actual results as they become live as the bill goes into effect. Watch next week as we delve into the other major legislation that recently went into effect regarding the changes to FHA and the new HOPE initiative!


House barely passes vote to move Bailout bill vote forward today

This is not encouraging news at all. Many house republicans have come out speaking optomistically about the passage of the legislation, but this vote to move forward with debate and vote today barely passed!

We are hoping that this is not a sign of the fate of the bill's vote today. Leaders have said that they would not bring the legislation for vote without having enough support to pass it, but the fact that President Bush and his VP have been placing frantic calls to the house Republicans to garner last minute votes is scary.

A decision by the House to amend the bill would delay enactment of the proposal because the Senate, which passed a bill late Wednesday night, would have to go back and vote again.
If House leaders at any point think they don't have the votes for passage, they could pull the bill from the floor rather than vote on it.

We as well as the rest of the country will be keeping a close eye on this afternoon's planned vote. Either we may very well be seeing the bottom of our financial crisis this week or... it was nice knowing you all. We stand ready to see where we go from here.

Wednesday, October 1, 2008

Interesting new blog

Check it out. very interesting blog that we are supporting

Tuesday, September 30, 2008

$700B Bailout? NO… stimulus package

This is no bailout of Wall Street that we are dealing with. This is a bailout of our entire economy and possibly even the global economy. This credit crisis has reached critical mass in record time. If the Government does not act immediately we are about to see a depression that will make the Great Depression look like a walk in the park.

Let us take a look at what is really being proposed and how it will affect each of us and Wall Street in detail. It’s important that the American People begin to understand exactly how important it is that we enact this legislation yesterday!

What will it do?

This article is not going to go into depth about how we got into this situation. Let’s take a look at what exactly this proposed “Bailout” stimulus package will do. The proposal is for the Government to purchase up to $700B in distressed assets from banks at a discounted price. These assets will be held by the government until such as time as they can be resold for a potential profit in the future.

In simple terms this is all that is being proposed for this economic “Bailout” stimulus package being considered.

How Does that Help?

Great question. Once these distressed assets are removed from the books they will be able to free up those funds and make a fresh start at incurring more safe assets that will yield profits. This instant liquidity will allow banks to once again lend each other and the consumers of the United States of America credit again in a more responsible and profitable manner. This will reverse the current credit freeze that is in place in our Country. Over time the market will begin to gain confidence in these types of assets and the economy will return to normal.

This is the basic theory of how the stimulus proposal will help.

How Do I Benefit?

The question here should be how I will be hurt if it is not enacted immediately. Without this package being signed into law we expect to see an immediate and swift decline in the US Financial markets that will quickly infect all other aspects of the economy. More and more banks will continue to fall which will either require further intervention on behalf of the Feds or a steep and precipitous depression in our global economy.

- Housing prices will fall at an even faster pace that we are have seen thus far.
- Stocks will fall DRAMATICALLY and CONSISTENTLY causing massive losses to your 401K and any other stock market portfolios
- Your HELOC and credit card balances will be lowered or frozen
- Mortgages will be near impossible to attain except for the elite borrowers with plenty of money and liquidity

In essence you will be living in a modern great depression. This is not an option that should be allowed to come to fruition. It is important that every American educate them about what is happening and push their elected officials to act NOW without partisanship.

In the mortgage market we are seeing interest rates on the 30 year fixed slowly climb. Interest rates doing up on top of home values decreasing, stock market falling, and credit markets tightening all add up to only one thing… that is pain for you and me.

Silver Lining?

If our Government can pull it together and get something workable passed we predict that all of this doom and gloom can be reversed. It won’t be an overnight turn around but within the next 12 months we think that the market will gain some confidence, home values will finally level off in mid to late 2009, and interest rates should remain relatively low assuming inflation stays in check. Depending on which President we elect in November will be the biggest deciding factor after this stimulus legislation that will ultimately decide our economic fates. Hey… one thing at a time lets get this nuclear bomb behind us before we consider the impact of the two Presidential candidates plans for our futures.

We’ll be sure to keep everyone updated and try to translate as much as possible into every man terms the events and the impacts of this financial crisis as it develops!

Monday, September 29, 2008

New Florida Mortgage Blog Opened

Another authority site for Florida Mortgage news we have found is:

Visit often for all the industry specific inside information about mortgage, rates, and real estate.!

Friday, September 26, 2008

n Depth Look at the $7,500 tax credit

The $7,500 tax credit for first time homebuyers was signed into law as part of the 2008 American Housing Rescue and Foreclosure Act. To qualify for this tax credit, you must close on your new house between April 9, 2008 and July 1, 2009.

Now this sounds like a great incentive to help stimulate home buyers into jumping into the real estate market and helping to dry up some of this excess housing we are floating in. I see this tax credit being plastered all over Florida mortgage company and home builders marketing materials. There are some very important aspects of this "tax credit" that is not being disclosed to buyers. If you don't do some homework on your own you may be in for a big surprise when you find out it's not so much a tax credit as it is an interest free loan that must be PAID BACK!

Now before we get into how this payback is structured, let’s first see how much you qualify for. That's right the law says you can qualify for "up to" $7,500, but that is not necessarily how much you will get.

Here is a breakdown of how it works:

The “first-time home buyer credit” is a temporary refundable, repayable tax credit equal to 10% of the purchase price of a home, up to $7,500 for singles and married couples filing jointly. (Singles who buy a house together get only $3,750 each, as do married couples filing their tax returns separately.)

The income limit is $75,000 for a single and $150,000 for joint borrowers. If your income is above those limits there is a convoluted formula that can be used to determine the diminished amount of tax credit you will qualify for.

Confused? Here's an example...

Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.

Now lets learn about how you repay this government loan (oops... we meant tax credit)

Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

So be prepared that two years after you claim your "tax credit" you will begin repaying the loan back annually at $500 per year until the loan is repaid or you sell that home.

This is some of the detailed information that you should be aware of prior to claiming your tax credit. We are not suggesting anyone NOT claim the credit merely that you be aware so you are not shocked in two years time when the Gov. begins requesting their money back. Hey... it's still an interest free loan! Oops, we meant tax credit :)


Tuesday, September 9, 2008

Feds takover Fannie Mae & Freddie... rates plummet

So the inevitable has finally happened. A few months back the government authorized themselves the power to take over Fannie Mae and Freddie Mac "should the need arise". Yesterday the government finally pulled the trigger on their carefully planned take over of the mortgage giants that are responsible for about $6 trillion dollars in mortgage debt between the two of them. This debt is now no longer held by the independent Fannie Mae & Freddie Mac. It is now you and I, the average tax payer that is responsible for half of the mortgage debt in the U.S.

Make no mistake; this is the largest government bailout of a financial company in U.S. history. The Government will immediately invest about $30M of liquidity into these companies, but in reality most experts agree that the Government will invest at least $250 Billion into the two firms before it is over. These are companies that reported about $14 Billion dollars in losses over the last year.

Why would the Government do such a thing you ask?
They never had a choice!

Had the Gov. not stepped in now and engineered this indefinite Gov. "conservatorship" the fall of these two behemoths was inevitable. Had we seen either or both of these companies fall it would undoubtedly have been the end for the U.S economy and likely a catalyst for a global meltdown. This is big stakes folks. There was no way Uncle Sam was going to let these companies fall, and hey if you are going to bailout the biggest financial firms in the country... why not make a little money while your at it right!

The Gov. will be given nearly 80% of preferred stock in the companies with a guaranteed 10% annual return. All those other investors holding stock are now in 2nd place if anything should happen being Uncle Sam :)

What does this mean to the average Joe?

Well here is the good news. The day after the Feds shot their bazooka at the financial meltdown, the 30 year interest rates fell from 6.25% down to 5.5% overnight! This is in large part because interest rates are risk based. The lower the risk the lower the rates. Now that Uncle Sam is taking charge the market is GUARANTEED by the Fed Gov. to not fail. No matter how much cash it takes to stay afloat Uncle Sam is willing to foot the bill. This means far less risk and therefore far lower rates. We are predicting that very soon we will see par interest rates in the low 5% range!

This not only provides lower rates but also more liquidity into a strangled credit market. The spigot just got opened a little further and we are now drizzling mortgage financing instead of dripping it. So in addition to lower rates and more liquidity we are predicting that the actual cost of banks lending money will decrease which should drive some investor interest back into the mortgage backed securities. This "could" result in slightly less stringent underwriting standards allowing more people to snatch up some of the excess housing inventory that is hammering home prices.

New construction has already decreased significantly so lower rates, more affordable loans, and more accessible financing could be the catalyst to get us on the road to a housing recovery.

What about the future of Fannie & Freddie?

This is where the Gov. is flying blind. Their hands were forced to step in and their "conservatorship" is open ended. This means that the truly hard decisions will be left to whoever becomes president of the United States in our next elections cycle and their Congress. Senator McCain has hinted that he would like to see the companies broken up or at the very least down sized considerably. Senator Obama on the other hand has seemed to tend toward more regulation but allowing them to remain more unchanged.

Yet another reason to stay on top of politics this year and delve deeply into the policies of our two candidates!

Here is to hoping you and your family can take advantage of the lower rates and cheaper financing... hey... you paid for it!


Tuesday, August 5, 2008

Is a Florida Cash out Refinance for you?

There are many factors that you should consider before doing a cash out refinance. Overall one typically cashes out to pay off other debts and consolidate them for monthly savings. Some people just want to have extra cash to do remodeling projects or to take a dream vacation. The reasons for cashing our on your home are as varied as the families that take out the loans!

One school of thought is that the equity in your home does nothing for you while it sits there. Especially in today's declining real estate market. The average depreciation on home values this year has been 13% nationwide. That is money lost to those with equity in their homes! Consider that by taking out as much cash as possible and investing it into money making ventures such as stocks, other business ventures, other real estate, etc... one can actaully use the equity as a means of making more money. The cost of taking the money must be weighed by the ability to pay it off and make a profit with the monies taken against the mortgage of the house. We have seen calculations that show by cashing out equity in your home and using those funds to make more money you can cut as much as 15 years off of the life of the loan. It requires a good game plan and a very strict hand to accomplish this, but for many this concept can be the key to a future of self employement and early retirement.

For others owning the home is the primary concern. They want to pay off the house as early as possible just for the pride of knowing they own their home and don't have to share ownership with a bank or lender. The above mentioned methods are one way to accomplish this in record time. If you lack the knowledge or willpower required to do that then perhaps a cash out refinance is not for you.

The number one reason for doing a florida cash out refinance is to save money monthly by paying off other debts. Cashing out and paying of car loans, credit cards, student loans, medica debts, and other bills not only saves money monthly but it also builds your credit score. The key to saving money is to ensure that you get the lowest rate possible on your new loan. It is important to work with a reputable company that can acquire the lowest rates possible on your new loan. For many families in the U.S. doing a cash out refinance free's up montly expenses and allows them to finally be debt free and save money monthly for a rainy day.

One cannot stress enough the predicament we are in with our housing market in the U.S. With equity disappearing faster than most could have ever predicted it is vitally important to act quickly if you are considering a cash out refinance in Florida. Our market is declining at a rate far quicker than the national average. Some areas of Florida are seeing values declined at a rate of 3% monthly. Don't leave equity on the table if you have been thinking of doing a refinance NOW is the time.

More information is available on the web at

Tuesday, January 8, 2008

Federal Reserve officials disagreed sharply in early December about whether the Fed should cut interest rates aggressively or not at all, according to minutes released Tuesday of Fed board meetings held in November and December.

Ultimately, the Fed board of governors and the Federal Open Market Committee decided to cut two key interest rates by a quarter-percentage point on Dec. 11.

Three of the 12 Fed regional banks requested a relatively large half-point cut in the largely symbolic discount rate at the Dec. 11 meeting, while two requested no cut at all, the minutes released Tuesday showed. The other seven banks requested a quarter-point cut.

The minutes reveal more disagreement about the course the central bank should take than had been seen in either the Dec. 11 statement or in the minutes of that day's FOMC meeting.

Subprime lending has all but vanished in the wake of last year's meltdown. 100% Florida mortgages are still available at increasingly lower rates due to these ongoing rate cuts.