1 Down 2 To Go.
I am telling all my investor partners that in 2 more years will be the time
to invest in California Real Estate. So in the meantime I go broke and my
kids starve. Having a conscience can really work against me. I am convinced
the money I don't make now will come back to me ten fold in a couple years.
Please go to East Coast Money.com to always check out the latest in Hot Shot
New York Investors getting ready to buy California Real Estate.
-Christopher Rockey
916.799.8472
Thursday, December 27, 2007
Wednesday, December 26, 2007
HURRY! We Have To Do Nothing
Mortgage mess has government scrambling, unless your hiding behind the Bush
Administration.
WASHINGTON (AP) -- After a slow and stumbling start, Washington is scrambling to prevent the unfolding mortgage crisis from pushing the country into recession during an election year. There is a strong feeling, though, that the government will need to do more to avert a financial disaster.
Former Treasury secretary Lawrence Summers advocates temporary tax cuts and emergency spending on the order of $50 billion to $75 billion. Such action could help the U.S. from slipping into what Summers, who served under President Clinton, fears could become the worst downturn since the steep 1981-82 recession.
Some Republicans are worried, too.
Both Martin Feldstein, who was President Reagan's top economic adviser, and former Federal Reserve Chairman Alan Greenspan have called for deeper government intervention.
So far, the Bush administration has opted for less dramatic measures. In fact, the administration came reluctantly to its biggest step taken - the "teaser freezer."
A deal with the mortgage industry will freeze the low introductory "teaser" rates for five years on some subprime mortgages - loans to people with spotty credit histories. Otherwise the rates will climb much higher, making the mortgages unaffordable for many.
A freeze could buy time for housing to rebound, making it easier for homeowners to refinance to affordable fixed-rate loans. But estimates are that only about 250,000 people will end up getting a freeze - a fraction of the 3.5 million home loans that could go into default over the next two-and-a-half years.
The administration also is working with Congress to increase the $417,000 cap on the size of loans that the big mortgage companies Fannie Mae and Freddie Mac can handle. This step could help in high-cost housing areas such as California.
So we still have a lot of talk. We can support our arguments with great physical
data which only a year ago we could speculating on. If it were me,
and I was President I would tell the people they dug there own graves, now go lye
in them!
Administration.
WASHINGTON (AP) -- After a slow and stumbling start, Washington is scrambling to prevent the unfolding mortgage crisis from pushing the country into recession during an election year. There is a strong feeling, though, that the government will need to do more to avert a financial disaster.
Former Treasury secretary Lawrence Summers advocates temporary tax cuts and emergency spending on the order of $50 billion to $75 billion. Such action could help the U.S. from slipping into what Summers, who served under President Clinton, fears could become the worst downturn since the steep 1981-82 recession.
Some Republicans are worried, too.
Both Martin Feldstein, who was President Reagan's top economic adviser, and former Federal Reserve Chairman Alan Greenspan have called for deeper government intervention.
So far, the Bush administration has opted for less dramatic measures. In fact, the administration came reluctantly to its biggest step taken - the "teaser freezer."
A deal with the mortgage industry will freeze the low introductory "teaser" rates for five years on some subprime mortgages - loans to people with spotty credit histories. Otherwise the rates will climb much higher, making the mortgages unaffordable for many.
A freeze could buy time for housing to rebound, making it easier for homeowners to refinance to affordable fixed-rate loans. But estimates are that only about 250,000 people will end up getting a freeze - a fraction of the 3.5 million home loans that could go into default over the next two-and-a-half years.
The administration also is working with Congress to increase the $417,000 cap on the size of loans that the big mortgage companies Fannie Mae and Freddie Mac can handle. This step could help in high-cost housing areas such as California.
So we still have a lot of talk. We can support our arguments with great physical
data which only a year ago we could speculating on. If it were me,
and I was President I would tell the people they dug there own graves, now go lye
in them!
Friday, December 21, 2007
You Have To Read This Article
I have never thought of Donna as a perfect 10 until today. Her enthusiasm
and sarcasm are boiled brilliantly together in this article.
Hat's Off!
ARM Freeze Yields Solution To All World Problems
By Donna Robinson - OP-ED COLUMNIST
Lets congratulate the Bush administration, the Federal Reserve and the democrat controlled Congress. It looks like they have come up with a breakthrough approach to problem solving that may finally end the world's problems once and for all.
The breakthrough came with the idea to freeze ARM rates so that borrowers will not be subjected to the terms of the agreements that they voluntarily signed. Combine that innovative thinking with the ongoing efforts to save Wall Street from its own irresponsible actions. It seems that the U.S. government and the federal reserve will finally succeed in realizing a foundational tenet of liberal politics - change the laws and the way financial markets work so that we can eliminate personal responsibility and individual accountability once and for all.
Just ignore the fact that the "full faith and credit" of the United States government will be undermined and perhaps destroyed. Never mind that every individual involved here has made decisions that they knew had risk and potential consequences.
Lets just ignore the terms of existing mortgage loans, let all borrowers in default off the hook, pass some new laws, and expand FHA so that the American taxpayer can be required to pick up the tab for a new round of subprime lending under the guise of "government guaranteed loans". That way we can avoid a financial meltdown, avoid consequences of our collective actions, and continue to expand this madness even further by making the same stupid financial decisions in the future at taxpayer expense.
But in pondering the situation in which we now find ourselves, I realized that in fact this line of reasoning may actually be used to save the world and solve all of the worlds major problems.
If we can simply decide to alter the way financial markets operate, change existing contractual commitments in the middle of the game, and in the process ignore the long term consequences of such ill advised actions, then lets just take this line of reasoning one step further and solve all of the worlds problems.
As soon as the U.S. government gets finished solving the world credit crisis, which may take another week or two, lets move on to some other major issues...
Global warming - How about a law that stops global warming by mandating that all future carbon emissions should fall to the ground and wash away with the next good rain storm?
Eliminate the threat of world pandemics like Bird Flu - How about a law that says that all birds who are sneezing or have a "runny beak" shall be required to stay at least 1000 feet away from any humans?
World Hunger - While we're at it, lets make sure that all of the oppressive regimes in the "third world" are required to feed all of their citizens until they get at least as fat as the average citizen of "first world" nations.
I know what you are thinking...these are obviously silly ideas that can't be enforced by passing laws...I rest my case.
Only one thing can solve the present financial crisis we find ourselves in, and that is to let the chips fall where they may. Let the free markets do their thing, let the accountability fall where it lies...at the feet of those who have made irresponsible financial decisions that they must be held accountable for. Let all involved learn their lessons, and learn that decisions have consequences, and that risk and reward go hand in hand.
We will never solve problems by ignoring them, failing to account for them or by trying to avoid the consequences of our actions. Borrowers who borrowed more than they could afford should learn that there is a price to be paid for such irresponsibility. Lenders who make loans to people who can't afford those loans need to understand that there are consequences for such irresponsible business practices. Investors seeking high returns need to understand that high risk follows high reward. All investments look good on paper, but reality can be a very different thing.
Until we are willing to confront our own financial irresponsibility by facing the consequences of our own personal decisions all the way down the financial "food chain", we will never reach a point of true financial stability again. America is already at a crisis point, and a potential turning point in our history that threatens to undermine our national stability and could well be our undoing in the near future. Only a return to integrity and personal accountability will stabilize the system and restore the "full faith and credit" of the United States of America.
Any financial system is only as good as the integrity and commitment of the individuals who are involved in it. When it's all said and done, it all boils down the the actions and decisions of millions of individuals. There is a reason why home buyers were once required to make substantial downpayments. And there is a reason why financial managers are expected to follow common sense rules of finance and investment.
Oh - I just thought of one more law we need to pass...let's recognize that the government is not our "baby-daddy". We don't need more "child support" to be paid by already over-burdened American taxpayers. Let's pass a law that says that all members of the U.S. Congress, and all state and local municipalities must manage taxpayer funds with sound financial principles so that the American taxpayers actually realize a solid return on their investment...Yeah, I know, this really IS the most ridiculous idea of all, but you can't blame me for daydreaming.
Contributed By: Donna Robinson
Donna Robinson is a licensed Realtor in Georgia. She is also a recognized real estate author, investing consultant and market analyst, as well as the Director of The Real Estate Arena.
and sarcasm are boiled brilliantly together in this article.
Hat's Off!
ARM Freeze Yields Solution To All World Problems
By Donna Robinson - OP-ED COLUMNIST
Lets congratulate the Bush administration, the Federal Reserve and the democrat controlled Congress. It looks like they have come up with a breakthrough approach to problem solving that may finally end the world's problems once and for all.
The breakthrough came with the idea to freeze ARM rates so that borrowers will not be subjected to the terms of the agreements that they voluntarily signed. Combine that innovative thinking with the ongoing efforts to save Wall Street from its own irresponsible actions. It seems that the U.S. government and the federal reserve will finally succeed in realizing a foundational tenet of liberal politics - change the laws and the way financial markets work so that we can eliminate personal responsibility and individual accountability once and for all.
Just ignore the fact that the "full faith and credit" of the United States government will be undermined and perhaps destroyed. Never mind that every individual involved here has made decisions that they knew had risk and potential consequences.
Lets just ignore the terms of existing mortgage loans, let all borrowers in default off the hook, pass some new laws, and expand FHA so that the American taxpayer can be required to pick up the tab for a new round of subprime lending under the guise of "government guaranteed loans". That way we can avoid a financial meltdown, avoid consequences of our collective actions, and continue to expand this madness even further by making the same stupid financial decisions in the future at taxpayer expense.
But in pondering the situation in which we now find ourselves, I realized that in fact this line of reasoning may actually be used to save the world and solve all of the worlds major problems.
If we can simply decide to alter the way financial markets operate, change existing contractual commitments in the middle of the game, and in the process ignore the long term consequences of such ill advised actions, then lets just take this line of reasoning one step further and solve all of the worlds problems.
As soon as the U.S. government gets finished solving the world credit crisis, which may take another week or two, lets move on to some other major issues...
Global warming - How about a law that stops global warming by mandating that all future carbon emissions should fall to the ground and wash away with the next good rain storm?
Eliminate the threat of world pandemics like Bird Flu - How about a law that says that all birds who are sneezing or have a "runny beak" shall be required to stay at least 1000 feet away from any humans?
World Hunger - While we're at it, lets make sure that all of the oppressive regimes in the "third world" are required to feed all of their citizens until they get at least as fat as the average citizen of "first world" nations.
I know what you are thinking...these are obviously silly ideas that can't be enforced by passing laws...I rest my case.
Only one thing can solve the present financial crisis we find ourselves in, and that is to let the chips fall where they may. Let the free markets do their thing, let the accountability fall where it lies...at the feet of those who have made irresponsible financial decisions that they must be held accountable for. Let all involved learn their lessons, and learn that decisions have consequences, and that risk and reward go hand in hand.
We will never solve problems by ignoring them, failing to account for them or by trying to avoid the consequences of our actions. Borrowers who borrowed more than they could afford should learn that there is a price to be paid for such irresponsibility. Lenders who make loans to people who can't afford those loans need to understand that there are consequences for such irresponsible business practices. Investors seeking high returns need to understand that high risk follows high reward. All investments look good on paper, but reality can be a very different thing.
Until we are willing to confront our own financial irresponsibility by facing the consequences of our own personal decisions all the way down the financial "food chain", we will never reach a point of true financial stability again. America is already at a crisis point, and a potential turning point in our history that threatens to undermine our national stability and could well be our undoing in the near future. Only a return to integrity and personal accountability will stabilize the system and restore the "full faith and credit" of the United States of America.
Any financial system is only as good as the integrity and commitment of the individuals who are involved in it. When it's all said and done, it all boils down the the actions and decisions of millions of individuals. There is a reason why home buyers were once required to make substantial downpayments. And there is a reason why financial managers are expected to follow common sense rules of finance and investment.
Oh - I just thought of one more law we need to pass...let's recognize that the government is not our "baby-daddy". We don't need more "child support" to be paid by already over-burdened American taxpayers. Let's pass a law that says that all members of the U.S. Congress, and all state and local municipalities must manage taxpayer funds with sound financial principles so that the American taxpayers actually realize a solid return on their investment...Yeah, I know, this really IS the most ridiculous idea of all, but you can't blame me for daydreaming.
Contributed By: Donna Robinson
Donna Robinson is a licensed Realtor in Georgia. She is also a recognized real estate author, investing consultant and market analyst, as well as the Director of The Real Estate Arena.
Thursday, December 20, 2007
.40 Cents On the Dollar Residentual Properties
If you are an investor or Realtor that knows investors that are cash players.
Let me know now. The bottom is falling and I have recently negotiated a deal
to allow investors to buy homes at .40C on the dollar. Minimum investment is
three million dollars cash and the best part is, most homes already have
tenants paying!
-Christopher Rockey
rockey_finance@yahoo.com
888.212.7577
Let me know now. The bottom is falling and I have recently negotiated a deal
to allow investors to buy homes at .40C on the dollar. Minimum investment is
three million dollars cash and the best part is, most homes already have
tenants paying!
-Christopher Rockey
rockey_finance@yahoo.com
888.212.7577
Wednesday, December 19, 2007
All Taxes Are Not Created Equal
While it's true that the Internal Revenue Service usually taxes every last cent we make, not every penny is taxed the same.
When it comes to ordinary wage or salary income, the U.S. tax system is progressive, with individual tax amounts currently spread over six income brackets. The tax rates begins at 10 percent and go as high as 35 percent. In between are the 15 percent, 25 percent, 28 percent and 33 percent brackets.
By stair-stepping tax brackets, our progressive taxation system means that all levels of income aren't taxed at the same rate. The first portion of your earnings is taxed at the lowest, 10-percent, rate. The subsequent rates start applying when your income hits a set level for your filing status.
This means that your income is then taxed at the applicable rate for each portion of your earnings that falls into a particular range. Each bracket also takes into account a taxpayer's filing status, such as single or married filing a joint return.
In addition, the tax bracket amounts are adjusted each year to reflect inflation. Here are the 2007 brackets, which you'll use when filing your 2007 return next year, and the 2008 tax brackets, which will give you an idea of your 2008 tax bill.
I would include the tax tables for you but I don't want some moron pointing his finger at me saying "He Told Me So." On that note, so why did I include this article?
Simply because it's a silly bureaucratic way for a major information source to dance around the question at hand. If I Foreclose will I get a 1099. The answer is YES!
The type of money you foreclose on determines the type of recourse your lender has
1099A Purchase money or 1099C Non purchase money.
-Christopher Rockey
When it comes to ordinary wage or salary income, the U.S. tax system is progressive, with individual tax amounts currently spread over six income brackets. The tax rates begins at 10 percent and go as high as 35 percent. In between are the 15 percent, 25 percent, 28 percent and 33 percent brackets.
By stair-stepping tax brackets, our progressive taxation system means that all levels of income aren't taxed at the same rate. The first portion of your earnings is taxed at the lowest, 10-percent, rate. The subsequent rates start applying when your income hits a set level for your filing status.
This means that your income is then taxed at the applicable rate for each portion of your earnings that falls into a particular range. Each bracket also takes into account a taxpayer's filing status, such as single or married filing a joint return.
In addition, the tax bracket amounts are adjusted each year to reflect inflation. Here are the 2007 brackets, which you'll use when filing your 2007 return next year, and the 2008 tax brackets, which will give you an idea of your 2008 tax bill.
I would include the tax tables for you but I don't want some moron pointing his finger at me saying "He Told Me So." On that note, so why did I include this article?
Simply because it's a silly bureaucratic way for a major information source to dance around the question at hand. If I Foreclose will I get a 1099. The answer is YES!
The type of money you foreclose on determines the type of recourse your lender has
1099A Purchase money or 1099C Non purchase money.
-Christopher Rockey
Here Come the Chineese
Another major American financial institution went on the international auction block Wednesday afternoon as Morgan Stanley announced it was accepting a $5 billion cash infusion from China Investment in return for a stake in the bank estimated to be as high as 9.9 percent. The Chinese company will be a passive investor and will not have a seat on its board or a role in management.
Morgan, one of the nation's largest investment banks had earlier in the day reported a huge fourth-quarter loss tied to an unexpectedly large $9.4 billion write-down in mortgages and other assets. This was nearly twice the $5 billion loss that analysts and market-watchers were expected as the bank went on the offensive to write down its exposure to losses from derivatives and mortgage securities.
We already know that the Chinese control our long term interest rates. We already know if the Chinese sold all the long term bonds they own, our 30 year rates will
double overnight. Now the Chinese are buying into our banking systems.
Let me get this straight, the Chinese, who have terrorist cells hiding within
there borders. Who can send us into a great depression any given day are now able
to leverage our own banks and possibly position themselves into our own system and use it against us.
Morgan, one of the nation's largest investment banks had earlier in the day reported a huge fourth-quarter loss tied to an unexpectedly large $9.4 billion write-down in mortgages and other assets. This was nearly twice the $5 billion loss that analysts and market-watchers were expected as the bank went on the offensive to write down its exposure to losses from derivatives and mortgage securities.
We already know that the Chinese control our long term interest rates. We already know if the Chinese sold all the long term bonds they own, our 30 year rates will
double overnight. Now the Chinese are buying into our banking systems.
Let me get this straight, the Chinese, who have terrorist cells hiding within
there borders. Who can send us into a great depression any given day are now able
to leverage our own banks and possibly position themselves into our own system and use it against us.
Tell Us Something We Don't Know
Homes in Sacramento are 59 percent overpriced, according to a recent analysis.
Sacramento trailed only six cities -- five of which are in California -- in a study of 100 housing markets by Local Market Monitor, which compared selling price to "equilibrium values." The equilibrium value was compiled based on such factors as economic and population growth, vacancy rates and construction costs.
The report found the median price of a home in Sacramento to be $366,900, compared to an equilibrium price of $230,900, a 59 percent difference in price. An overpriced market has a median home price more than 15 percent higher than the equilibrium price, according to the report published by CNN Money. The report did not specify if Sacramento included nearby cities.
The overall number of overprice markets fell in first-quarter 2006, compared to the same three-month period last year, dropping from 40 to 38. Of the 100 markets analyzed, 56 are fairly priced.
OK, I think we have all come to the reality that half our equity is going to be lost.
That's great how about an article on the emotional turmoil people will be going through that do decide to keep there house. Would you want to pay a four thousand a month payment on a house that is not worth more than a $1,700.00 a month payment for
the same qualified buyer. How about the hit on the interest rate people took to get a jumbo size loan when they have no need for that.
Think that mentality will effect the housing market?
-Christopher Rockey
Sacramento trailed only six cities -- five of which are in California -- in a study of 100 housing markets by Local Market Monitor, which compared selling price to "equilibrium values." The equilibrium value was compiled based on such factors as economic and population growth, vacancy rates and construction costs.
The report found the median price of a home in Sacramento to be $366,900, compared to an equilibrium price of $230,900, a 59 percent difference in price. An overpriced market has a median home price more than 15 percent higher than the equilibrium price, according to the report published by CNN Money. The report did not specify if Sacramento included nearby cities.
The overall number of overprice markets fell in first-quarter 2006, compared to the same three-month period last year, dropping from 40 to 38. Of the 100 markets analyzed, 56 are fairly priced.
OK, I think we have all come to the reality that half our equity is going to be lost.
That's great how about an article on the emotional turmoil people will be going through that do decide to keep there house. Would you want to pay a four thousand a month payment on a house that is not worth more than a $1,700.00 a month payment for
the same qualified buyer. How about the hit on the interest rate people took to get a jumbo size loan when they have no need for that.
Think that mentality will effect the housing market?
-Christopher Rockey
Fed Lending 20 Billion, Big Woopie
The Federal Reserve announced Wednesday that it was lending $20 billion to banks in the first of four special auctions designed to help alleviate the credit crunch on Wall Street.
The Fed said that it received requests for $61.6 billion in loans from 93 bidders - illustrating strong demand by banks that need short-term funds. The winning bidders will receive their loans, which will mature in 28 days, on Thursday.
Initially, stocks moved modestly higher Wednesday following the release of the auction results but headed lower in early afternoon trading. The price of bonds fell at first but wound up rallying later in the morning, pushing the yield on the benchmark 10-year U.S. Treasury note down to 4.09 percent. Bond yields and prices move in opposite directions.
This is obnoxious and absurd, what 20 billion dollars is supposed to help a
trillion and a half dollar problem and then they have the balls to make themselves sound like heroes.
They should be put to sleep like rabid animals. The only request I have seen or
heard of that was more ridiculous was directly from Hillary when she said we need a billion dollar fund to help. That narrow minded behavior is your first warning for
what could be.
Sorry to change my positive thinking but, I am now sick of people being lied to
and told "Every thing's going to be Fine." Horse shit if you ask me. We are going
to face one of the largest recessions since the depression.
-Christopher Rockey
The Fed said that it received requests for $61.6 billion in loans from 93 bidders - illustrating strong demand by banks that need short-term funds. The winning bidders will receive their loans, which will mature in 28 days, on Thursday.
Initially, stocks moved modestly higher Wednesday following the release of the auction results but headed lower in early afternoon trading. The price of bonds fell at first but wound up rallying later in the morning, pushing the yield on the benchmark 10-year U.S. Treasury note down to 4.09 percent. Bond yields and prices move in opposite directions.
This is obnoxious and absurd, what 20 billion dollars is supposed to help a
trillion and a half dollar problem and then they have the balls to make themselves sound like heroes.
They should be put to sleep like rabid animals. The only request I have seen or
heard of that was more ridiculous was directly from Hillary when she said we need a billion dollar fund to help. That narrow minded behavior is your first warning for
what could be.
Sorry to change my positive thinking but, I am now sick of people being lied to
and told "Every thing's going to be Fine." Horse shit if you ask me. We are going
to face one of the largest recessions since the depression.
-Christopher Rockey
Fed Lowering Interest Rates Still Not Helping
Mortgage application volume plummeted 19.5 percent during the week ending Dec. 14, according to the Mortgage Bankers Association's weekly application survey.
The trade group's application index fell to 653.8 from 811.8 the previous week.
Refinance volume tumbled 27.3 percent during the week, while purchase volume fell 10.6 percent. Refinance applications accounted for 53.2 percent of total mortgage applications, down from 57.6 percent during the prior week.
OK granted, December is always the slowest month of the year traditionally.
But 19.5 % are you kidding me.
Plan on reading big headlines in January saying "Mortgage applications up 10%"
"Economy turning" and "A Light at the end of the Tunnel."
All garbage of course because even mortgage applications do go up 15% in
January, we are still left with a 5% variance from December.
-Christopher Rockey
The trade group's application index fell to 653.8 from 811.8 the previous week.
Refinance volume tumbled 27.3 percent during the week, while purchase volume fell 10.6 percent. Refinance applications accounted for 53.2 percent of total mortgage applications, down from 57.6 percent during the prior week.
OK granted, December is always the slowest month of the year traditionally.
But 19.5 % are you kidding me.
Plan on reading big headlines in January saying "Mortgage applications up 10%"
"Economy turning" and "A Light at the end of the Tunnel."
All garbage of course because even mortgage applications do go up 15% in
January, we are still left with a 5% variance from December.
-Christopher Rockey
Tuesday, December 18, 2007
New Homebuilders Index Scraping the Bottom
A December reading of U.S. homebuilders' sentiment remained at a record low for the third straight month.
The National Association of Home Builders said Monday its housing market index, which gauges builders' perceptions of conditions and expectations for home sales over the next six months, came in at 19 in December. The number was at the lowest level since the index began in January 1985.
Index readings higher than 50 indicate positive sentiment. The seasonally adjusted index has been below 50 since May 2006, and declined for eight straight months this year, and has been unchanged since October.
Tighter lending standards, rising defaults among borrowers with weak credit and a sense of worry about the housing market's future have meant fewer buyers for hard-hit homebuilders such as D.R. Horton (DHI, Fortune 500), Pulte Homes (PHM, Fortune 500) and Centex (CTX, Fortune 500).
Many builders are "bracing themselves for the winter months when home buying traditionally slows, scaling down their inventories and repositioning themselves for the time when market conditions can support an upswing in building activity," David Seiders, the trade group's chief economist said in a statement.
That's likely to occur, he said, by the second half of next year.
Confidence dropped in the northeast, but inched up in the Midwest and South. It remained unchanged in western states.
Nationwide, new-home sales are projected to fall to 788,000 this year, down 25 percent from 1.05 million last year, the National Association of Realtors said last week. Sales are expected to drop further to 693,000 in 2008, according to the Realtors' group.
The National Association of Home Builders said Monday its housing market index, which gauges builders' perceptions of conditions and expectations for home sales over the next six months, came in at 19 in December. The number was at the lowest level since the index began in January 1985.
Index readings higher than 50 indicate positive sentiment. The seasonally adjusted index has been below 50 since May 2006, and declined for eight straight months this year, and has been unchanged since October.
Tighter lending standards, rising defaults among borrowers with weak credit and a sense of worry about the housing market's future have meant fewer buyers for hard-hit homebuilders such as D.R. Horton (DHI, Fortune 500), Pulte Homes (PHM, Fortune 500) and Centex (CTX, Fortune 500).
Many builders are "bracing themselves for the winter months when home buying traditionally slows, scaling down their inventories and repositioning themselves for the time when market conditions can support an upswing in building activity," David Seiders, the trade group's chief economist said in a statement.
That's likely to occur, he said, by the second half of next year.
Confidence dropped in the northeast, but inched up in the Midwest and South. It remained unchanged in western states.
Nationwide, new-home sales are projected to fall to 788,000 this year, down 25 percent from 1.05 million last year, the National Association of Realtors said last week. Sales are expected to drop further to 693,000 in 2008, according to the Realtors' group.
Monday, December 17, 2007
Excellent News For Less Than 1/10 of Troubled Homeowners
So-called FHA reform reached an important milestone on Friday when the U.S. Senate overwhelmingly approved its version of the legislation.
The bill, which passed by a vote of 93-1, seeks to make the Federal Housing Administration more relevant in the current housing and mortgage lending environment by expanding the agency, loosening some underwriting standards, and raising its current restrictive loan limit.
The FHA was established in 1934 to help borrowers, particularly those with low incomes, purchase homes by guaranteeing banks that those loans would be repaid should the borrower default. But the agency's loan limits have generally lagged behind those of Freddie Mac and Fannie Mae and as home prices climbed dramatically and lenders with looser underwriting standards proliferated the agency became less and less of a player in the mortgage market.
Over a ten year period ending last December the FHA's share of new mortgages fell from 9.1 percent to 1.8 percent according to Inside Mortgage Finance. A major reason for the slide is the FHA loan cap which, in many parts of the country such as both coasts, falls short of covering the purchase price of even a low end house.
FHA insured loans have been mentioned as a possible escape hatch for borrowers who may be unable to make payments on their current adjustable rate mortgages when their interest rates reset over the next year. The restrictive loan limits, however, make that impossible for many of those borrowers. There is also a theory that a more widely available federal guarantee would encourage lenders to make more loans in the current tight credit environment.
The Senate version of FHA reform would raise the limit on FHA loans from $362,000 to at least $417,000 which is the current limit on Freddie Mac, Fannie Mae, and Veterans Administration loans.
The FHA estimates that it may be able to help some 200,000 borrowers who are facing foreclosure with the new limits coupled with loosened underwriting standards which were announced by the president several months ago.
In October the House of Representatives passed legislation similar to that passed in the Senate but some differences between the two bills will have to be hammered out before a final version is sent to the president for his signature.
The House bill would raise the loan limit as high as $829,750 in certain areas of the country but the biggest stumbling block to a compromise is a feature of the House bill which establishes a new housing trust fund for troubled borrowers and would require FHA to contribute to it.
Also on Friday the Senate passed a separate borrower relief bill which would end, for three years, a provision in the tax code which has bitten many a homeowner after foreclosure or a loan workout. Under current rules the Internal Revenue Service requires lenders to send borrowers and the IRS a form detailing any loan amounts written off by the lender after a foreclosure, short sale, or loan restructure. The IRS treats that forgiven debt as ordinary income and taxes the borrower accordingly.
The House had earlier passed similar legislation but without the three year sunset provision.
In other mortgage news, Reuters reported on Friday that the hotline established by the HOPE NOW alliance had received 45,000 calls in the three days after its establishment was announced by President Bush. The hot-line provides foreclosure prevention counseling to borrowers who qualify for an interest rate freeze worked out between the Treasury Department and major lenders. The telephone number for the program is 1-888-995-HOPE.
The bill, which passed by a vote of 93-1, seeks to make the Federal Housing Administration more relevant in the current housing and mortgage lending environment by expanding the agency, loosening some underwriting standards, and raising its current restrictive loan limit.
The FHA was established in 1934 to help borrowers, particularly those with low incomes, purchase homes by guaranteeing banks that those loans would be repaid should the borrower default. But the agency's loan limits have generally lagged behind those of Freddie Mac and Fannie Mae and as home prices climbed dramatically and lenders with looser underwriting standards proliferated the agency became less and less of a player in the mortgage market.
Over a ten year period ending last December the FHA's share of new mortgages fell from 9.1 percent to 1.8 percent according to Inside Mortgage Finance. A major reason for the slide is the FHA loan cap which, in many parts of the country such as both coasts, falls short of covering the purchase price of even a low end house.
FHA insured loans have been mentioned as a possible escape hatch for borrowers who may be unable to make payments on their current adjustable rate mortgages when their interest rates reset over the next year. The restrictive loan limits, however, make that impossible for many of those borrowers. There is also a theory that a more widely available federal guarantee would encourage lenders to make more loans in the current tight credit environment.
The Senate version of FHA reform would raise the limit on FHA loans from $362,000 to at least $417,000 which is the current limit on Freddie Mac, Fannie Mae, and Veterans Administration loans.
The FHA estimates that it may be able to help some 200,000 borrowers who are facing foreclosure with the new limits coupled with loosened underwriting standards which were announced by the president several months ago.
In October the House of Representatives passed legislation similar to that passed in the Senate but some differences between the two bills will have to be hammered out before a final version is sent to the president for his signature.
The House bill would raise the loan limit as high as $829,750 in certain areas of the country but the biggest stumbling block to a compromise is a feature of the House bill which establishes a new housing trust fund for troubled borrowers and would require FHA to contribute to it.
Also on Friday the Senate passed a separate borrower relief bill which would end, for three years, a provision in the tax code which has bitten many a homeowner after foreclosure or a loan workout. Under current rules the Internal Revenue Service requires lenders to send borrowers and the IRS a form detailing any loan amounts written off by the lender after a foreclosure, short sale, or loan restructure. The IRS treats that forgiven debt as ordinary income and taxes the borrower accordingly.
The House had earlier passed similar legislation but without the three year sunset provision.
In other mortgage news, Reuters reported on Friday that the hotline established by the HOPE NOW alliance had received 45,000 calls in the three days after its establishment was announced by President Bush. The hot-line provides foreclosure prevention counseling to borrowers who qualify for an interest rate freeze worked out between the Treasury Department and major lenders. The telephone number for the program is 1-888-995-HOPE.
Friday, December 14, 2007
You Heard It Here First
Fannie Mae's CEO told shareholders Friday he does not expect a housing market recovery until late 2009, "at the earliest," and that the mortgage-finance company is strong enough to ride out the downturn.
Fannie Mae "will weather the turbulence of today's mortgage market and prosper when better conditions return," the president and CEO, Daniel Mudd, said as he and other top executives faced shareholders for the first time in three-and-a-half years at an annual meeting.
After posting a third-quarter loss of $1.4 billion, the largest U.S. buyer and guarantor of home mortgages recently cut its dividend and announced plans to sell $7 billion in preferred stock to raise capital to keep its cushion against risk within regulatory requirements.
One shareholder unconvinced by Mudd's assurances was investor activist Evelyn Y. Davis, who rose at the meeting and urged the government-sponsored company's directors to replace Mudd with Louis Freeh, the former FBI director elected to the Fannie board last spring.
Freeh is "the only one who would clean this up and really do this right," said Davis, whose mordant criticism of the company's leaders dominated much of the two-hour meeting.
Davis, who often peppers corporate CEOs with questions at shareholder meetings, said she would not vote for any of the directors standing for re-election other than Freeh. Freeh previously was general counsel and ethics officer of credit-card issuer MBNA Corp.
Despite Davis's protestations, the 12 Fannie directors — nine of whom came to the company after its accounting crisis in 2004 — were re-elected.
Mudd said Fannie Mae was "in a stronger position" because of the extensive changes to its management and operations over the past three years made in the wake of its $6.3 billion accounting scandal and with the recent steps taken to curb losses and buttress its finances.
He called them "extraordinary steps, but steps we believe are prudent."
The Fannie chief reaffirmed his gloomy forecast for the housing market, saying "This is the worst housing and mortgage market in recent memory, and we are still working our way to the bottom, in our view."
It was Washington-based Fannie Mae's first annual meeting since May 2004, five months before the accounting crisis erupted and led to the ouster of its highest executives, tarnished its reputation, and prompted federal regulators to fine it and impose restraints on its operations.
"We are rebuilding our culture," Chairman Stephen Ashley told the shareholders.
Fannie's stock price has been battered. On Friday, shares climbed $1 to $35.76, or about 50 percent below the high point of $70.57 over the past year.
__
On the Net:
Fannie Mae: http://www.fanniemae.com
Freddie Mac: http://www.freddiemac.com
Fannie Mae "will weather the turbulence of today's mortgage market and prosper when better conditions return," the president and CEO, Daniel Mudd, said as he and other top executives faced shareholders for the first time in three-and-a-half years at an annual meeting.
After posting a third-quarter loss of $1.4 billion, the largest U.S. buyer and guarantor of home mortgages recently cut its dividend and announced plans to sell $7 billion in preferred stock to raise capital to keep its cushion against risk within regulatory requirements.
One shareholder unconvinced by Mudd's assurances was investor activist Evelyn Y. Davis, who rose at the meeting and urged the government-sponsored company's directors to replace Mudd with Louis Freeh, the former FBI director elected to the Fannie board last spring.
Freeh is "the only one who would clean this up and really do this right," said Davis, whose mordant criticism of the company's leaders dominated much of the two-hour meeting.
Davis, who often peppers corporate CEOs with questions at shareholder meetings, said she would not vote for any of the directors standing for re-election other than Freeh. Freeh previously was general counsel and ethics officer of credit-card issuer MBNA Corp.
Despite Davis's protestations, the 12 Fannie directors — nine of whom came to the company after its accounting crisis in 2004 — were re-elected.
Mudd said Fannie Mae was "in a stronger position" because of the extensive changes to its management and operations over the past three years made in the wake of its $6.3 billion accounting scandal and with the recent steps taken to curb losses and buttress its finances.
He called them "extraordinary steps, but steps we believe are prudent."
The Fannie chief reaffirmed his gloomy forecast for the housing market, saying "This is the worst housing and mortgage market in recent memory, and we are still working our way to the bottom, in our view."
It was Washington-based Fannie Mae's first annual meeting since May 2004, five months before the accounting crisis erupted and led to the ouster of its highest executives, tarnished its reputation, and prompted federal regulators to fine it and impose restraints on its operations.
"We are rebuilding our culture," Chairman Stephen Ashley told the shareholders.
Fannie's stock price has been battered. On Friday, shares climbed $1 to $35.76, or about 50 percent below the high point of $70.57 over the past year.
__
On the Net:
Fannie Mae: http://www.fanniemae.com
Freddie Mac: http://www.freddiemac.com
Thursday, December 13, 2007
Bloomberg Update On the Brothers
Lehman Earnings Drop 12% After Mortgage Writedown (Update4)
Dec. 13 (Bloomberg) -- Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage-backed bonds, said earnings fell for a second straight quarter and losses from the collapse of the subprime market will extend into next year.
Fourth-quarter net income declined 12 percent to $886 million, or $1.54 a share, from $1 billion, or $1.72, a year earlier, the New York-based company said today in a statement. A drop in the value of mortgage-related securities and real-estate holdings cut revenue by $830 million. Lehman fell 3.1 percent on the New York Stock Exchange, less than Wall Street rivals.
Lehman's earnings exceeded analysts' estimates after revenue from trading stocks more than doubled, helped by private-equity gains and the firm's investment in hedge fund GLG Partners Inc. The board gave Chief Executive Officer Richard Fuld a $35 million stock award for the year as Lehman, the fourth-largest U.S. securities firm by market value, avoided the losses analysts predict Wall Street rivals Morgan Stanley and Bear Stearns Cos. will report next week.
``Lehman has seemed to limit its balance-sheet exposure to subprime, keeping the writedowns reasonable,'' said Benjamin Wallace, who helps manage $750 million at Grimes & Co. in Westborough, Massachusetts. ``They're still a big fixed-income player and that business will probably slow down further next year, so the share price isn't rewarding their performance yet.''
Lehman fell $1.89 to $59.93 in composite trading on the New York Stock Exchange at 12:49 p.m. The stock declined 21 percent this year through yesterday, compared with Morgan Stanley's 25 percent drop, Bear Stearns's 38 percent slide and Goldman Sachs Group Inc.'s 6.6 percent advance.
Revenue Decline
All four firms sank today on concern a Federal Reserve plan to provide financial companies with as much as $64 billion is failing to boost lending.
Lehman's fourth-quarter revenue fell 3 percent to $4.39 billion, with a record 62 percent coming from non-U.S. businesses. Return on equity decreased to 16.6 percent from 22.3 percent a year earlier. The company has reported two consecutive quarters of declining profits for the first time in five years, though earnings for the full year were a record $4.2 billion.
While fixed-income trading revenue declined 60 percent to $860 million in the quarter, equity trading more than doubled to $1.9 billion.
The GLG transaction contributed about $500 million in revenue for the quarter, risk management head Christopher O'Meara said on a conference call with analysts. That raised concern among analysts including William Tanona at Goldman Sachs that Lehman won't be able to repeat its better-than-expected performance in coming quarters.
Earnings `Quality'
``The quality appears less than optimal,'' Tanona, who rates Lehman ``neutral,'' said in a report to investors.
A lower-than-expected tax rate accounted for about 6 cents a share of the earnings beat, according to Merrill Lynch & Co. analyst Guy Moszkowski.
The earnings performance was ``not as good as it looks at first glance,'' UBS AG analyst Glenn Schorr, who recommends investors buy Lehman shares, said in a report.
Lehman's gross fourth-quarter writedown was $3.5 billion, O'Meara said. Residential mortgages and related assets accounted for $2.2 billion of that figure, and the rest came from commercial mortgages.
Lehman offset the losses with $2 billion it made on hedges, $320 million of gains from the sale of leveraged loans that were previously written down and a $320 million drop in the firm's liabilities, O'Meara said.
Writedown Totals
Those steps resulted in the $830 million revenue reduction, on top of the $700 million writedown the company reported last quarter.
Chief Financial Officer Erin Callan said on the conference call that debt markets would probably remain ``challenging'' in the first half of next year and further writedowns are likely.
``We're not trying to be too optimistic and we're not calling the bottom,'' Callan said in a conference call with analysts. ``We're trying not to be too concentrated in our risk for any asset class.''
Lehman executives said they used bets against ABX indexes, credit-default swaps and total-return swaps and other forms of hedging to protect against declines in mortgage-related assets.
Merrill, the third-largest U.S. securities firm, took an $8.4 billion writedown last quarter, and Morgan Stanley last month said it will report at least $3.7 billion of writedowns in the fourth quarter. Bear Stearns is writing down about $2 billion in the third and fourth quarters.
Limiting Losses
Lehman's investment-banking revenue fell 3 percent to $831 million, and fees from asset management increased 30 percent to $832 million.
The firm advised on 45 takeovers in the fourth quarter valued at $296.3 billion, more than three times what it handled a year earlier, according to data compiled by Bloomberg. It underwrote $24.8 billion of U.S. bonds in the quarter, down from $28.9 billion the previous year.
Lehman plans to eliminate 2,500 mortgage-related jobs and shut its subprime lending unit, BNC Mortgage LLC, after U.S. foreclosures rose to a record. BNC, which was making more than $2 billion of home loans a month last year, cut lending to $200 million a month before being closed.
Employee Ranks
Lehman had 28,556 employees as of Nov. 30, down from 28,783 at the end of the third quarter.
``This firm produced a respectable profit in a very difficult quarter,'' Credit Suisse Group analyst Susan Katzke said in a report today. Katzke, who rates the shares ``outperform,'' cut her profit estimate for 2008 by 50 cents to $7, citing a ``weaker economic outlook.''
Wall Street's biggest losses have come from collateralized debt obligations, which pool asset-backed securities according to varying degrees of default risk. Investors have become wary about even the CDOs that are supposed to have the least risk, driving prices down more than 70 percent. Lehman executives have said they don't own any CDOs that aren't fully hedged.
Lehman's so-called Level 3 assets, which are harder to value because market prices have become scarce, increased about $6 billion in the fourth quarter from the previous three months, O'Meara said on the conference call today. In the third quarter, the figure jumped 57 percent to $34.7 billion.
The ratio of Level 3 assets to total inventory rose to about 13 percent from 11 percent in the previous quarter, he said. While some of those were assets shifted from Level 2, where there are more market prices available, some were assets acquired during the period, he said.
The firm's subprime exposure was $5.3 billion at the end of the fourth quarter, O'Meara said, down from $6.3 billion in the previous period.
Dec. 13 (Bloomberg) -- Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage-backed bonds, said earnings fell for a second straight quarter and losses from the collapse of the subprime market will extend into next year.
Fourth-quarter net income declined 12 percent to $886 million, or $1.54 a share, from $1 billion, or $1.72, a year earlier, the New York-based company said today in a statement. A drop in the value of mortgage-related securities and real-estate holdings cut revenue by $830 million. Lehman fell 3.1 percent on the New York Stock Exchange, less than Wall Street rivals.
Lehman's earnings exceeded analysts' estimates after revenue from trading stocks more than doubled, helped by private-equity gains and the firm's investment in hedge fund GLG Partners Inc. The board gave Chief Executive Officer Richard Fuld a $35 million stock award for the year as Lehman, the fourth-largest U.S. securities firm by market value, avoided the losses analysts predict Wall Street rivals Morgan Stanley and Bear Stearns Cos. will report next week.
``Lehman has seemed to limit its balance-sheet exposure to subprime, keeping the writedowns reasonable,'' said Benjamin Wallace, who helps manage $750 million at Grimes & Co. in Westborough, Massachusetts. ``They're still a big fixed-income player and that business will probably slow down further next year, so the share price isn't rewarding their performance yet.''
Lehman fell $1.89 to $59.93 in composite trading on the New York Stock Exchange at 12:49 p.m. The stock declined 21 percent this year through yesterday, compared with Morgan Stanley's 25 percent drop, Bear Stearns's 38 percent slide and Goldman Sachs Group Inc.'s 6.6 percent advance.
Revenue Decline
All four firms sank today on concern a Federal Reserve plan to provide financial companies with as much as $64 billion is failing to boost lending.
Lehman's fourth-quarter revenue fell 3 percent to $4.39 billion, with a record 62 percent coming from non-U.S. businesses. Return on equity decreased to 16.6 percent from 22.3 percent a year earlier. The company has reported two consecutive quarters of declining profits for the first time in five years, though earnings for the full year were a record $4.2 billion.
While fixed-income trading revenue declined 60 percent to $860 million in the quarter, equity trading more than doubled to $1.9 billion.
The GLG transaction contributed about $500 million in revenue for the quarter, risk management head Christopher O'Meara said on a conference call with analysts. That raised concern among analysts including William Tanona at Goldman Sachs that Lehman won't be able to repeat its better-than-expected performance in coming quarters.
Earnings `Quality'
``The quality appears less than optimal,'' Tanona, who rates Lehman ``neutral,'' said in a report to investors.
A lower-than-expected tax rate accounted for about 6 cents a share of the earnings beat, according to Merrill Lynch & Co. analyst Guy Moszkowski.
The earnings performance was ``not as good as it looks at first glance,'' UBS AG analyst Glenn Schorr, who recommends investors buy Lehman shares, said in a report.
Lehman's gross fourth-quarter writedown was $3.5 billion, O'Meara said. Residential mortgages and related assets accounted for $2.2 billion of that figure, and the rest came from commercial mortgages.
Lehman offset the losses with $2 billion it made on hedges, $320 million of gains from the sale of leveraged loans that were previously written down and a $320 million drop in the firm's liabilities, O'Meara said.
Writedown Totals
Those steps resulted in the $830 million revenue reduction, on top of the $700 million writedown the company reported last quarter.
Chief Financial Officer Erin Callan said on the conference call that debt markets would probably remain ``challenging'' in the first half of next year and further writedowns are likely.
``We're not trying to be too optimistic and we're not calling the bottom,'' Callan said in a conference call with analysts. ``We're trying not to be too concentrated in our risk for any asset class.''
Lehman executives said they used bets against ABX indexes, credit-default swaps and total-return swaps and other forms of hedging to protect against declines in mortgage-related assets.
Merrill, the third-largest U.S. securities firm, took an $8.4 billion writedown last quarter, and Morgan Stanley last month said it will report at least $3.7 billion of writedowns in the fourth quarter. Bear Stearns is writing down about $2 billion in the third and fourth quarters.
Limiting Losses
Lehman's investment-banking revenue fell 3 percent to $831 million, and fees from asset management increased 30 percent to $832 million.
The firm advised on 45 takeovers in the fourth quarter valued at $296.3 billion, more than three times what it handled a year earlier, according to data compiled by Bloomberg. It underwrote $24.8 billion of U.S. bonds in the quarter, down from $28.9 billion the previous year.
Lehman plans to eliminate 2,500 mortgage-related jobs and shut its subprime lending unit, BNC Mortgage LLC, after U.S. foreclosures rose to a record. BNC, which was making more than $2 billion of home loans a month last year, cut lending to $200 million a month before being closed.
Employee Ranks
Lehman had 28,556 employees as of Nov. 30, down from 28,783 at the end of the third quarter.
``This firm produced a respectable profit in a very difficult quarter,'' Credit Suisse Group analyst Susan Katzke said in a report today. Katzke, who rates the shares ``outperform,'' cut her profit estimate for 2008 by 50 cents to $7, citing a ``weaker economic outlook.''
Wall Street's biggest losses have come from collateralized debt obligations, which pool asset-backed securities according to varying degrees of default risk. Investors have become wary about even the CDOs that are supposed to have the least risk, driving prices down more than 70 percent. Lehman executives have said they don't own any CDOs that aren't fully hedged.
Lehman's so-called Level 3 assets, which are harder to value because market prices have become scarce, increased about $6 billion in the fourth quarter from the previous three months, O'Meara said on the conference call today. In the third quarter, the figure jumped 57 percent to $34.7 billion.
The ratio of Level 3 assets to total inventory rose to about 13 percent from 11 percent in the previous quarter, he said. While some of those were assets shifted from Level 2, where there are more market prices available, some were assets acquired during the period, he said.
The firm's subprime exposure was $5.3 billion at the end of the fourth quarter, O'Meara said, down from $6.3 billion in the previous period.
Tuesday, November 20, 2007
alt="Mortgage And Real Estate News"Want to know how I'm making more money than ever
Most of my clients and readers call or write wondering how I'm doing.
The truth is financially, it's going REALLY well. I'm not going to
tell you my exact trading strategies, but, I will tell you this.
Short the US dollar on the Forex market and you will be meeting me
in the Bahamas for a 3 week vacation also!
-Christopher Rockey
Tuesday, November 6, 2007
Severe Changes Possibly Coming For Your Mortgage Broker
Sides are quickly being drawn over a pending bill before the House of Representatives which, if passed, will put in place some stringent new standards for mortgage underwriting and the regulation and compensation of mortgage brokers.
HR 3915 is expected to be voted on by the House Financial Services Committee on Tuesday, November 6. Favoring the bill are consumer groups such as the National Center for Responsible Lending, and in strong opposition are industry supports like the National Association of Mortgage Brokers (NAMB) and the Mortgage Bankers Association.
HR 3915, introduced by Representative Bradley Miller (D-NC) and cosponsored by 21 other members of the House, modifies three major sections of Truth in Lending Act (15 U.S.C. 1602), Title I deals with mortgage origination; Title II outlines minimum standards for mortgages, and Title III addresses high cost mortgages.
Here is a summary of the bill as it was submitted to the House.
Title I requires licensing or registration of mortgage originators. The Department of Housing and Urban Development is charged with creating a registry for originators who are not covered by state regulation or affiliated with depository institutions. The legislation appears to assume that those originators who are so affiliated are now appropriately regulated.
This section establishes a "Duty of Care" for mortgage originators which requires that they "diligently work to present the consumer with a range of residential mortgage loan products" that the consumer can qualify for and which are appropriate to his current circumstances and that the originator make full, complete, and timely disclosure to each such consumer which includes the comparative costs and benefits of each product, and nature of the originator's relationship with the consumer and that the originator discloses if he is or is not working as an agent of that consumer. The originator must also disclose any relevant conflicts of interest.
Originators are prohibited from "steering." The proposed law states that an originator may not receive, directly or indirectly, any incentives (and in the most controversial provision, expressly includes yield spread premiums in that definition) that are based on or vary with the terms of the loan.
Title II, which sets minimum standards for residential mortgages states that no creditor may make a residential mortgage loan unless he first makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated the consumer has a reasonable ability to repay the loan under its terms and to pay all applicable taxes, insurance, and assessments. This provision also extends to cases where a consumer has multiple loans against the same property; the originator is charged with taking into account the total payments on these obligations. These determinations about ability to repay must be based on a consideration of the consumers' current and expected income, credit history, other obligations, employment status, debt-to-income ratio and other financial resources other than any equity in the secured property. (The emphasis is ours.)
Under this ability to repay provision, adjustable rate mortgages which defer repayment of principal and/or interest (with the exception of reverse mortgages) must be evaluated on the basis of the payment needed to amortize the loan by its final maturity.
Title II also requires the originator of a subprime loan to determine that any refinancing will "provide a net tangible benefit to the consumer." Conventional loans are presumed to meet this requirement so long as the interest rate does not exceed the rate on comparable Treasury bills by 3 points (5 for junior liens) while subprime loans are acceptable if they are income verified, underwritten based on the fully-indexed rate plus taxes and insurance, are not negatively amortizing, and the creditors debt-to-income-ratio after the loan is funded will not exceed 50 percent. Loans must have either a fixed rate for the first 7 years or have a margin less than 3 percent over its index. Such a subprime mortgage is generally known as a Qualified Safe Harbor Mortgage.
Title II also prohibits subprime prepayment penalties and limits prepayment penalties on conventional loans to 3 years (or 3 months before reset on an adjustable rate loan). It bans mandatory arbitration on any residential mortgage and prohibits class actions against and provides other protections from liability for assignees of loans.
Title III creates special protections for high-cost mortgages which are defined as having points and fees in excess of 5 percent of the loan amount; OR an APR exceeding comparable treasuries plus 8 points (10 for junior liens); or a prepayment penalty above 2% of amount prepaid or extending longer than 30 months into the term of the loan.
The section also defines points and fees and sets rules for yield-spread premiums, prepayment penalties, single premium credit insurance, and other fees already contained in the existing Home Ownership and Equity Protection Act (HOEPA.) The definitions exclude bona fide discount points for conventional rate mortgages.
Title III also prohibits the following on high-cost loans: balloon payments; recommending or encouraging default; excessive late fees; call provisions; financing any points and fees or prepayment penalties; abusive modification or deferral fees and requires pre-loan counseling for high-cost mortgages.
The entire text of the legislation can be read here.
Opinions pro and con the legislation can be found at websites maintained by The Center for Responsible Lending (CRL), Mortgage Bankers Association (MBA) and National Association of Mortgage Brokers (NAMB).
Please share your opinions of HR 3915.
-Christopher Rockey
HR 3915 is expected to be voted on by the House Financial Services Committee on Tuesday, November 6. Favoring the bill are consumer groups such as the National Center for Responsible Lending, and in strong opposition are industry supports like the National Association of Mortgage Brokers (NAMB) and the Mortgage Bankers Association.
HR 3915, introduced by Representative Bradley Miller (D-NC) and cosponsored by 21 other members of the House, modifies three major sections of Truth in Lending Act (15 U.S.C. 1602), Title I deals with mortgage origination; Title II outlines minimum standards for mortgages, and Title III addresses high cost mortgages.
Here is a summary of the bill as it was submitted to the House.
Title I requires licensing or registration of mortgage originators. The Department of Housing and Urban Development is charged with creating a registry for originators who are not covered by state regulation or affiliated with depository institutions. The legislation appears to assume that those originators who are so affiliated are now appropriately regulated.
This section establishes a "Duty of Care" for mortgage originators which requires that they "diligently work to present the consumer with a range of residential mortgage loan products" that the consumer can qualify for and which are appropriate to his current circumstances and that the originator make full, complete, and timely disclosure to each such consumer which includes the comparative costs and benefits of each product, and nature of the originator's relationship with the consumer and that the originator discloses if he is or is not working as an agent of that consumer. The originator must also disclose any relevant conflicts of interest.
Originators are prohibited from "steering." The proposed law states that an originator may not receive, directly or indirectly, any incentives (and in the most controversial provision, expressly includes yield spread premiums in that definition) that are based on or vary with the terms of the loan.
Title II, which sets minimum standards for residential mortgages states that no creditor may make a residential mortgage loan unless he first makes a reasonable and good faith determination based on verified and documented information that, at the time the loan is consummated the consumer has a reasonable ability to repay the loan under its terms and to pay all applicable taxes, insurance, and assessments. This provision also extends to cases where a consumer has multiple loans against the same property; the originator is charged with taking into account the total payments on these obligations. These determinations about ability to repay must be based on a consideration of the consumers' current and expected income, credit history, other obligations, employment status, debt-to-income ratio and other financial resources other than any equity in the secured property. (The emphasis is ours.)
Under this ability to repay provision, adjustable rate mortgages which defer repayment of principal and/or interest (with the exception of reverse mortgages) must be evaluated on the basis of the payment needed to amortize the loan by its final maturity.
Title II also requires the originator of a subprime loan to determine that any refinancing will "provide a net tangible benefit to the consumer." Conventional loans are presumed to meet this requirement so long as the interest rate does not exceed the rate on comparable Treasury bills by 3 points (5 for junior liens) while subprime loans are acceptable if they are income verified, underwritten based on the fully-indexed rate plus taxes and insurance, are not negatively amortizing, and the creditors debt-to-income-ratio after the loan is funded will not exceed 50 percent. Loans must have either a fixed rate for the first 7 years or have a margin less than 3 percent over its index. Such a subprime mortgage is generally known as a Qualified Safe Harbor Mortgage.
Title II also prohibits subprime prepayment penalties and limits prepayment penalties on conventional loans to 3 years (or 3 months before reset on an adjustable rate loan). It bans mandatory arbitration on any residential mortgage and prohibits class actions against and provides other protections from liability for assignees of loans.
Title III creates special protections for high-cost mortgages which are defined as having points and fees in excess of 5 percent of the loan amount; OR an APR exceeding comparable treasuries plus 8 points (10 for junior liens); or a prepayment penalty above 2% of amount prepaid or extending longer than 30 months into the term of the loan.
The section also defines points and fees and sets rules for yield-spread premiums, prepayment penalties, single premium credit insurance, and other fees already contained in the existing Home Ownership and Equity Protection Act (HOEPA.) The definitions exclude bona fide discount points for conventional rate mortgages.
Title III also prohibits the following on high-cost loans: balloon payments; recommending or encouraging default; excessive late fees; call provisions; financing any points and fees or prepayment penalties; abusive modification or deferral fees and requires pre-loan counseling for high-cost mortgages.
The entire text of the legislation can be read here.
Opinions pro and con the legislation can be found at websites maintained by The Center for Responsible Lending (CRL), Mortgage Bankers Association (MBA) and National Association of Mortgage Brokers (NAMB).
Please share your opinions of HR 3915.
-Christopher Rockey
Tuesday, October 23, 2007
Third Quarter Reportings Shake The Market
Reuters News Service and the Associated Press are both quoting a story in the Wall Street Journal on Wednesday that the controversial CEO of Countrywide Mortgage, Angelo Mozilo, is under an informal investigation by the Securities and Exchange Commission (SEC).
Countrywide is the largest mortgage company in the country and Mozilo, its founder, is generally credited or blamed for the company's evolution from a mostly conventional lender into one where subprime products dominated.
Along with dozens of other companies Countrywide faced a liquidity crisis several months ago. Because of rising default rates among its loans 61 percent of its capitalization ($15 billion) evaporated during the first eight months of 2007 and its survival was in some doubt until Bank of America stepped forward to invest $2 billion in the company, Countrywide is still casting around for additional investors and a Reuters article on September 12 said that there were large numbers of $10 Countrywide October Puts outstanding. A Put is an option that allows an investor to purchase a stock at that price - essentially a bet that a stock price is going to fall before expiration of the Put. At that time Countrywide was trading at $16 and change. The stock, however, closed yesterday at $17.35. One year ago the stock was selling in the $40 range.
Countrywide has announced plans to eliminate 10,000 to 12,000 jobs - approximately 20 percent of its workforce - and will take a $125 to $150 million pretax restructuring charge resulting from the downsizing.
The SEC is apparently investigating a dozen or so companies, including Countrywide, in connection with the subprime mess but, according to The Wall Street Journal article it is taking a special if informal look at Mozilo.
At issue is the sale by Mozilo of some 130 million of his company's stock in the first six months of 2007. It seems that there is a rather large loophole... ahem, provision, in the rules against insider trading that allows an insider to set up what is called a 10b51 trading plan. Such a plan, once established, allows the insider to proceed with transactions such as buying, selling, or exercising options even if he or she subsequently comes into possession of information that might impact stock prices which is not available to the public.
North Carolina's state treasurer Richard Moore last week asked the SEC to investigate Mozilo's stock sales, claiming that there were changes made to the pre-set trading plans in the months before the company's stock fell. An SEC insider speaking under a guarantee of anonymity, however, said that the informal inquiry into Mozilo's stock activities had been going on for a while.
The SEC had no immediate comment on the report nor did Countrywide, but the agency has previously said it is "looking hard at the general issue of whether executives are illegally trading on insider information and using a preset trading plan to avoid suspicion."
Forbes lists the 68-year-old Mozilo as the nation's seventh most highly compensated chairman with a total compensation package of $141.98 million (approximately $48 million in salary.) Over the last five years his total compensation was $295.73 million. He is listed as the top-ranked executive within Forbes category of Diversified Financials.
Countrywide is the largest mortgage company in the country and Mozilo, its founder, is generally credited or blamed for the company's evolution from a mostly conventional lender into one where subprime products dominated.
Along with dozens of other companies Countrywide faced a liquidity crisis several months ago. Because of rising default rates among its loans 61 percent of its capitalization ($15 billion) evaporated during the first eight months of 2007 and its survival was in some doubt until Bank of America stepped forward to invest $2 billion in the company, Countrywide is still casting around for additional investors and a Reuters article on September 12 said that there were large numbers of $10 Countrywide October Puts outstanding. A Put is an option that allows an investor to purchase a stock at that price - essentially a bet that a stock price is going to fall before expiration of the Put. At that time Countrywide was trading at $16 and change. The stock, however, closed yesterday at $17.35. One year ago the stock was selling in the $40 range.
Countrywide has announced plans to eliminate 10,000 to 12,000 jobs - approximately 20 percent of its workforce - and will take a $125 to $150 million pretax restructuring charge resulting from the downsizing.
The SEC is apparently investigating a dozen or so companies, including Countrywide, in connection with the subprime mess but, according to The Wall Street Journal article it is taking a special if informal look at Mozilo.
At issue is the sale by Mozilo of some 130 million of his company's stock in the first six months of 2007. It seems that there is a rather large loophole... ahem, provision, in the rules against insider trading that allows an insider to set up what is called a 10b51 trading plan. Such a plan, once established, allows the insider to proceed with transactions such as buying, selling, or exercising options even if he or she subsequently comes into possession of information that might impact stock prices which is not available to the public.
North Carolina's state treasurer Richard Moore last week asked the SEC to investigate Mozilo's stock sales, claiming that there were changes made to the pre-set trading plans in the months before the company's stock fell. An SEC insider speaking under a guarantee of anonymity, however, said that the informal inquiry into Mozilo's stock activities had been going on for a while.
The SEC had no immediate comment on the report nor did Countrywide, but the agency has previously said it is "looking hard at the general issue of whether executives are illegally trading on insider information and using a preset trading plan to avoid suspicion."
Forbes lists the 68-year-old Mozilo as the nation's seventh most highly compensated chairman with a total compensation package of $141.98 million (approximately $48 million in salary.) Over the last five years his total compensation was $295.73 million. He is listed as the top-ranked executive within Forbes category of Diversified Financials.
Monday, August 13, 2007
Think Your Company Is In Trouble?
Be glad you don't work for one of the following companies. They are subprime
lenders that have been major lending forces in the United States over the last
several years. Every one of them are either out of business or no longer funding
deals. Do any of these match your mortgage statement.
"Imploded" Lenders:
117. Express Capital Lending
116. Deutsche Bank Correspondent Lending Group (CLG)
115. MLSG
114. Trump Mortgage
113. HomeBanc Mortgage Corporation
112. Mylor Financial
111. Aegis (Everything)
110. Alternative Financing Corp (AFC) Wholesale
109. Winstar Mortgage
108. American Home Mortgage / American Brokers Conduit
107. Meridias Capital
106. Fieldstone Mortgage Company
105. Nations Home Lending
104. Wells Fargo Alternative Lending Wholesale
103. Entrust Mortgage
102. Flick Mortgage/Mortgage Simple
101. Alliance Bancorp
100. Choice Capital Funding
99. Premier Mortgage Funding
98. Stone Creek Funding
97. FlexPoint Funding (Wholesale)
96. Starpointe Mortgage
95. Unlimited Loan Resources (ULR)
94. Freestand Financial
93. Steward Financial
92. Wells Fargo (Correspondent)
91. Altivus Financial
90. ACT Mortgage
89. Alliance Mortgage Banking Corp (AMBC)
88. Concord Mortgage Wholesale
87. Heartwell Mortgage
86. Oak Street Mortgage
85. The Mortgage Warehouse
84. First Street Financial
83. Right-Away Mortgage
82. Heritage Plaza Mortgage
81. Horizon Bank Wholesale Lending Group
80. Lancaster Mortgage Bank (LMB)
79. Bryco (Wholesale)
78. No Red Tape Mortgage
77. The Lending Group (TLG)
76. Pro 30 Funding
75. NetBank Funding
74. Columbia Home Loans, LLC
73. Mortgage Tree Lending
72. Homeland Capital Group
71. Nation One Mortgage
70. Dana Capital Group
69. Millenium Funding Group
68. MILA
67. Home Equity of America
66. Opteum (Wholesale, Conduit)
65. Innovative Mortgage Capital
64. Home Capital, Inc.
63. Home 123 Mortgage
62. Homefield Financial
61. First Horizon (Subprime)
60. Platinum Capital Group
59. First Source Funding Group (FSFG)
58. Alterna Mortgage
57. Solutions Funding
56. People's Mortgage
55. LowerMyPayment.com
54. Zone Funding
53. First Consolidated (Subprime Wholesale)
52. EquiFirst
51. SouthStar Funding
50. Warehouse USA
49. H&R Block Mortgage
48. Madison Equity Loans
47. HSBC Mortgage Services (correspondent div.)
46. Sunset Direct Lending
45. Kellner Mortgage Investments
44. LoanCity
43. CoreStar Financial Group
42. Ameriquest
41. Investaid Corp.
40. People's Choice Financial Corp.
39. Master Financial
38. Maribella Mortgage
37. FMF Capital LLC
36. New Century Financial Corp.
35. Wachovia Mortgage (Correspondent div.)
34. Ameritrust Mortgage Company (Subprime Wholesale)
33. Trojan Lending (Wholesale)
32. Fremont General Corporation
31. DomesticBank (Wholesale Lending Division)
30. Franklin Financial (Wholesale Operations)
29. Ivanhoe Mortgage/Central Pacific Mortgage
28. Eagle First Mortgage
27. Coastal Capital
26. Silver State Mortgage
25. ResMAE Mortgage Corporation
24. ECC Capital/Encore Credit
23. Lender's Direct Capital Corporation (wholesale division)
22. Concorde Acceptance
21. DeepGreen Financial
20. Millenium Bankshares (Mortgage Subsidiaries)
19. Summit Mortgage
18. Mandalay Mortgage
17. Rose Mortgage
16. EquiBanc
15. FundingAmerica
14. Popular Financial Holdings
13. Clear Choice Financial/Bay Capital
12. Origen Wholesale Lending
11. SecuredFunding
10. Preferred Advantage
9. MLN
8. Sovereign Bancorp (Wholesale Ops)
7. Harbourton Mortgage Investment Corporation
6. OwnIt Mortgage
5. Sebring Capital Partners
4. Axis Mortgage & Investments
3. Meritage Mortgage
2. Acoustic Home Loans
1. Merit Financial
Just because your mortgage statement has one of the names from the list on it does not mean you shouldn't pay your mortgage. They are all still servicing the loans
in some form or another!
-Christopher Rockey
lenders that have been major lending forces in the United States over the last
several years. Every one of them are either out of business or no longer funding
deals. Do any of these match your mortgage statement.
"Imploded" Lenders:
117. Express Capital Lending
116. Deutsche Bank Correspondent Lending Group (CLG)
115. MLSG
114. Trump Mortgage
113. HomeBanc Mortgage Corporation
112. Mylor Financial
111. Aegis (Everything)
110. Alternative Financing Corp (AFC) Wholesale
109. Winstar Mortgage
108. American Home Mortgage / American Brokers Conduit
107. Meridias Capital
106. Fieldstone Mortgage Company
105. Nations Home Lending
104. Wells Fargo Alternative Lending Wholesale
103. Entrust Mortgage
102. Flick Mortgage/Mortgage Simple
101. Alliance Bancorp
100. Choice Capital Funding
99. Premier Mortgage Funding
98. Stone Creek Funding
97. FlexPoint Funding (Wholesale)
96. Starpointe Mortgage
95. Unlimited Loan Resources (ULR)
94. Freestand Financial
93. Steward Financial
92. Wells Fargo (Correspondent)
91. Altivus Financial
90. ACT Mortgage
89. Alliance Mortgage Banking Corp (AMBC)
88. Concord Mortgage Wholesale
87. Heartwell Mortgage
86. Oak Street Mortgage
85. The Mortgage Warehouse
84. First Street Financial
83. Right-Away Mortgage
82. Heritage Plaza Mortgage
81. Horizon Bank Wholesale Lending Group
80. Lancaster Mortgage Bank (LMB)
79. Bryco (Wholesale)
78. No Red Tape Mortgage
77. The Lending Group (TLG)
76. Pro 30 Funding
75. NetBank Funding
74. Columbia Home Loans, LLC
73. Mortgage Tree Lending
72. Homeland Capital Group
71. Nation One Mortgage
70. Dana Capital Group
69. Millenium Funding Group
68. MILA
67. Home Equity of America
66. Opteum (Wholesale, Conduit)
65. Innovative Mortgage Capital
64. Home Capital, Inc.
63. Home 123 Mortgage
62. Homefield Financial
61. First Horizon (Subprime)
60. Platinum Capital Group
59. First Source Funding Group (FSFG)
58. Alterna Mortgage
57. Solutions Funding
56. People's Mortgage
55. LowerMyPayment.com
54. Zone Funding
53. First Consolidated (Subprime Wholesale)
52. EquiFirst
51. SouthStar Funding
50. Warehouse USA
49. H&R Block Mortgage
48. Madison Equity Loans
47. HSBC Mortgage Services (correspondent div.)
46. Sunset Direct Lending
45. Kellner Mortgage Investments
44. LoanCity
43. CoreStar Financial Group
42. Ameriquest
41. Investaid Corp.
40. People's Choice Financial Corp.
39. Master Financial
38. Maribella Mortgage
37. FMF Capital LLC
36. New Century Financial Corp.
35. Wachovia Mortgage (Correspondent div.)
34. Ameritrust Mortgage Company (Subprime Wholesale)
33. Trojan Lending (Wholesale)
32. Fremont General Corporation
31. DomesticBank (Wholesale Lending Division)
30. Franklin Financial (Wholesale Operations)
29. Ivanhoe Mortgage/Central Pacific Mortgage
28. Eagle First Mortgage
27. Coastal Capital
26. Silver State Mortgage
25. ResMAE Mortgage Corporation
24. ECC Capital/Encore Credit
23. Lender's Direct Capital Corporation (wholesale division)
22. Concorde Acceptance
21. DeepGreen Financial
20. Millenium Bankshares (Mortgage Subsidiaries)
19. Summit Mortgage
18. Mandalay Mortgage
17. Rose Mortgage
16. EquiBanc
15. FundingAmerica
14. Popular Financial Holdings
13. Clear Choice Financial/Bay Capital
12. Origen Wholesale Lending
11. SecuredFunding
10. Preferred Advantage
9. MLN
8. Sovereign Bancorp (Wholesale Ops)
7. Harbourton Mortgage Investment Corporation
6. OwnIt Mortgage
5. Sebring Capital Partners
4. Axis Mortgage & Investments
3. Meritage Mortgage
2. Acoustic Home Loans
1. Merit Financial
Just because your mortgage statement has one of the names from the list on it does not mean you shouldn't pay your mortgage. They are all still servicing the loans
in some form or another!
-Christopher Rockey
Tuesday, July 10, 2007
Market Update
California Foreclosure Sales Reach $12 Billion in First Half of 2007: Up 95% from January to June
DISCOVERY BAY, Calif., Jul 10, 2007 (BUSINESS WIRE) -- ForeclosureRadar(TM) (ForeclosureRadar.com) today released its June 2007 California Foreclosure Report. This unique monthly report includes previously unavailable auction sales data providing a far more timely and accurate picture of California's foreclosure marketplace.
ForeclosureRadar(TM) is the first statewide foreclosure information service to track each and every foreclosure auction throughout the state on a daily basis. Other foreclosure listing services rely primarily on documents recorded at the county which delays the reporting of actual foreclosure sales trends by weeks or even months.
A total of 6,960 homes were sold at auction in June with a loan value of $2.83 Billion in California. Riverside County had the highest number of foreclosure sales at 1,093 properties and $523M in loan value. Los Angeles County was second in terms of volume, but after adjusting for population, ranked 34th in the State. Yuba, Sacramento and San Joaquin Counties ranked 2nd, 3rd and 4th highest respectively with Marin County having the lowest foreclosure rate in California. Foreclosures now represent 16% of all new and resale home sales in the state.
According to ForeclosureRadar founder Sean O'Toole, "Lenders are building a significant REO inventory. Since January 1, 2007, a total of 29,696 California properties have been returned to the lender for an astonishing total loan value of $12 Billion. This is unprecedented." In June alone 6,552 properties were returned to the lender for a total of $2.69 Billion.
California Foreclosure Statistics By County
Population
Rank County NDF NTS Sales Per Sale
----------------------------------------------------------------------
1 RIVERSIDE 2392 1337 1093 1,787
2 YUBA 71 38 31 2,252
3 SACRAMENTO 1367 782 613 2,260
4 SAN JOAQUIN 660 389 290 2,297
5 STANISLAUS 475 290 203 2,534
6 SUTTER 64 46 32 2,858
7 MERCED 153 58 84 2,938
8 CONTRA COSTA 833 423 337 3,055
9 LAKE 23 27 20 3,205
10 SAN BERNADINO 1862 959 609 3,271
I have told my clients the same thing for years now.
"There Is Not A Graduate School In The U.S. That Does Not Teach Real Estate
Investing As An Important Way To Diversify Your Investment Portfolio."
-Christopher Rockey
DISCOVERY BAY, Calif., Jul 10, 2007 (BUSINESS WIRE) -- ForeclosureRadar(TM) (ForeclosureRadar.com) today released its June 2007 California Foreclosure Report. This unique monthly report includes previously unavailable auction sales data providing a far more timely and accurate picture of California's foreclosure marketplace.
ForeclosureRadar(TM) is the first statewide foreclosure information service to track each and every foreclosure auction throughout the state on a daily basis. Other foreclosure listing services rely primarily on documents recorded at the county which delays the reporting of actual foreclosure sales trends by weeks or even months.
A total of 6,960 homes were sold at auction in June with a loan value of $2.83 Billion in California. Riverside County had the highest number of foreclosure sales at 1,093 properties and $523M in loan value. Los Angeles County was second in terms of volume, but after adjusting for population, ranked 34th in the State. Yuba, Sacramento and San Joaquin Counties ranked 2nd, 3rd and 4th highest respectively with Marin County having the lowest foreclosure rate in California. Foreclosures now represent 16% of all new and resale home sales in the state.
According to ForeclosureRadar founder Sean O'Toole, "Lenders are building a significant REO inventory. Since January 1, 2007, a total of 29,696 California properties have been returned to the lender for an astonishing total loan value of $12 Billion. This is unprecedented." In June alone 6,552 properties were returned to the lender for a total of $2.69 Billion.
California Foreclosure Statistics By County
Population
Rank County NDF NTS Sales Per Sale
----------------------------------------------------------------------
1 RIVERSIDE 2392 1337 1093 1,787
2 YUBA 71 38 31 2,252
3 SACRAMENTO 1367 782 613 2,260
4 SAN JOAQUIN 660 389 290 2,297
5 STANISLAUS 475 290 203 2,534
6 SUTTER 64 46 32 2,858
7 MERCED 153 58 84 2,938
8 CONTRA COSTA 833 423 337 3,055
9 LAKE 23 27 20 3,205
10 SAN BERNADINO 1862 959 609 3,271
I have told my clients the same thing for years now.
"There Is Not A Graduate School In The U.S. That Does Not Teach Real Estate
Investing As An Important Way To Diversify Your Investment Portfolio."
-Christopher Rockey
Monday, July 9, 2007
Managing Your Mortgage Interest
I have had several people both clients and strangers ask me about the
"Money Merge Account" mentioned in the previous articles. I will allow you
to see the following link that should answer most of the good questions I
have been asked.
http://www.mortgagefreefinancial.com/mmaver3.asp
For any further questions feel free to e-mail me anytime.
-Christopher Rockey
rockey_finance@yahoo.com
"Money Merge Account" mentioned in the previous articles. I will allow you
to see the following link that should answer most of the good questions I
have been asked.
http://www.mortgagefreefinancial.com/mmaver3.asp
For any further questions feel free to e-mail me anytime.
-Christopher Rockey
rockey_finance@yahoo.com
Thursday, May 24, 2007
The RSS Feed
Starting today I'm going to incorporate RSS technology to my blog.
Please feel free to comment if you would like me to stop due to unrelated
topics.
-Christopher Rockey
Please feel free to comment if you would like me to stop due to unrelated
topics.
-Christopher Rockey
Saturday, May 5, 2007
Equity Repositioning and the "Rule Of 72"
In commercial Real estate you hear the words "Cap Rate" a lot. This refers to your
capitalization rate or in other words your positive return. In a good commercial deal
you may get a nice 6-9% cap rate (In our current Market) Let's say on the upper end you get that 9%. You feel like it's a good deal, it's secured with Real estate. The EIUL from the previous article can often raise less than that annually.
Now lets look at Albert Einstein's "Rule of 72." If you have a nicely diversified
portfolio with a great EIUL and some residential Real Estate, and you are making
an average annual return of 9%, divide that into 72 to see how long it takes your
investment to double. Just about 8 years right. Pretty straight forward.
Well what if I could tell you of a Real Estate "Joint Venture" That would make
you a multi millionaire using the rule of 72 by the time your EIUL or your
commercial Cap Rate come close to doubling. Wouldn't you want to know exactly
what I am talking about. If not, please click the white X in the red box in the top
right corner of your screen.
I am not going to explain the whole JVA in just this article because I want you
to really understand that the equation REO + Cash = WEALTH.
Ready to know more?
Please e-mail me and I will give you the details.
rockey_finance@yahoo.com
capitalization rate or in other words your positive return. In a good commercial deal
you may get a nice 6-9% cap rate (In our current Market) Let's say on the upper end you get that 9%. You feel like it's a good deal, it's secured with Real estate. The EIUL from the previous article can often raise less than that annually.
Now lets look at Albert Einstein's "Rule of 72." If you have a nicely diversified
portfolio with a great EIUL and some residential Real Estate, and you are making
an average annual return of 9%, divide that into 72 to see how long it takes your
investment to double. Just about 8 years right. Pretty straight forward.
Well what if I could tell you of a Real Estate "Joint Venture" That would make
you a multi millionaire using the rule of 72 by the time your EIUL or your
commercial Cap Rate come close to doubling. Wouldn't you want to know exactly
what I am talking about. If not, please click the white X in the red box in the top
right corner of your screen.
I am not going to explain the whole JVA in just this article because I want you
to really understand that the equation REO + Cash = WEALTH.
Ready to know more?
Please e-mail me and I will give you the details.
rockey_finance@yahoo.com
Monday, April 30, 2007
Roseville Selling When Priced Right
April 29, 2007
Roseville, CA Market Update for March 2007
Here are the latest real estate market statistics for Roseville, CA These numbers represent single family (SFR) homes and condos. The percentage of homes on the market where the asking price has been reduced: 42.5% **
Average February 2007 March 2007 % Change
Asking Price $455,278 $437,352 -3.9%
Sales Price $440,704 $426,814 -3.2%
% of Asking Price 97% 98% 1.0%
$/SQFT $224 $217 -3.1%
Days on Market 104 92 -11.5%
Total Transactions 100 126 26.0%
Roseville, CA Market Update for March 2007
Here are the latest real estate market statistics for Roseville, CA These numbers represent single family (SFR) homes and condos. The percentage of homes on the market where the asking price has been reduced: 42.5% **
Average February 2007 March 2007 % Change
Asking Price $455,278 $437,352 -3.9%
Sales Price $440,704 $426,814 -3.2%
% of Asking Price 97% 98% 1.0%
$/SQFT $224 $217 -3.1%
Days on Market 104 92 -11.5%
Total Transactions 100 126 26.0%
Wednesday, April 25, 2007
Serious Equity Management
I have had several readers tell me I have not told them anything they do not know.
Well this site is really meant to show people how easy equity management really is.
But I will touch on the mechanics of technological innovations which are sweeping
the largest world wide market.
The foreign exchange market :
The purpose of investing in money is to obviously make money.
We can invest in other countries money on the “World Foreign
Exchange Market” this is a simple process of making money on the
Volatility of spot price for various currency pairs. Just like the
Stock market we can short and long sell. We can effectively manage
Our risk through conservative stop orders. For example on a bad day
With starting a $10,000.00 account you could loose $500.00 this is the
Small amount of risk. This scenario could happen no more than 3 times.
Then our purchase pattern changes to the going pattern where you make
Your money back on the new position. This worse case scenario has never
Happened with this fund! Ever! Best case scenario you double your money
Every 90 days compounded. That means in 365 days, with a start fund of
The same $10,000.00 never pulling out the money on a monthly basis would
Potentially (conservatively) be worth $160,000.00. In a realistic market if
We re-invest using our conservative tools we plan to make half that.
Yes that means $80,000.00. Do you see why we manage so much money?
The following web-site gives you some of the basics on foreign exchange.
Before contacting me because I have seriously intrigued you with these
Numbers please read the following:
http://www.goforex.net/Setting_Up_Forex_Funds.pdf
-Christopher Rockey
916.799.8472
Well this site is really meant to show people how easy equity management really is.
But I will touch on the mechanics of technological innovations which are sweeping
the largest world wide market.
The foreign exchange market :
The purpose of investing in money is to obviously make money.
We can invest in other countries money on the “World Foreign
Exchange Market” this is a simple process of making money on the
Volatility of spot price for various currency pairs. Just like the
Stock market we can short and long sell. We can effectively manage
Our risk through conservative stop orders. For example on a bad day
With starting a $10,000.00 account you could loose $500.00 this is the
Small amount of risk. This scenario could happen no more than 3 times.
Then our purchase pattern changes to the going pattern where you make
Your money back on the new position. This worse case scenario has never
Happened with this fund! Ever! Best case scenario you double your money
Every 90 days compounded. That means in 365 days, with a start fund of
The same $10,000.00 never pulling out the money on a monthly basis would
Potentially (conservatively) be worth $160,000.00. In a realistic market if
We re-invest using our conservative tools we plan to make half that.
Yes that means $80,000.00. Do you see why we manage so much money?
The following web-site gives you some of the basics on foreign exchange.
Before contacting me because I have seriously intrigued you with these
Numbers please read the following:
http://www.goforex.net/Setting_Up_Forex_Funds.pdf
-Christopher Rockey
916.799.8472
Don't Forget The Most Important Part Of Your Purchase
There are two items I want to quickly touch on when it comes to your home purchase.
First, if you are purchasing for an investment, relax wait for the next cycle or
contact me to learn more about purchasing "Short Sales", Foreclosures, fixer uppers,
conversions, or any other investing purpose you may think of. Most importantly don't
forget, there is not a grad. school in the US that doesn't teach you to buy Real Estate for simple portfolio diversification. Second, while reading the following article and you did fall into the 2005 trap, remember, you have a beautiful home,
a wonderful place to live and eventually the market will turn!
-- You went a little large with that 2005 home purchase. It felt good. You bit off a lot in the form of a large adjustable-rate mortgage to get there, but you made it happen. The low 3.75% intro rate really helped. You knew it would eventually go higher, but hey -- home prices would go higher, and so would your income.
The problem is, it didn't happen.
Well, your income did rise, but so did your expenses: higher energy costs, growing family, rising taxes. Now about those home prices -- you know the rest of that story. See how home prices are flagging.
Now what? The honeymoon is about to end, and you're bracing yourself and your family for the inevitable. Your mortgage payment is about to go up, maybe by hundreds of dollars. And now is not a good time to join the stampede of foreclosures, preforeclosures, short sales and other forms of dire and unintended consequences.
What do you do? Panic? Probably not. Sure, it's a financial setback to see any cost go up a lot. But the secret to weathering any storm is to see it coming -- and plan accordingly. A lot of energy has recently gone into helping underwater homeowners avoid or deal with impending foreclosures.
Foreclosures? I'm guessing many of you will feel the pain or rising payments, but aren't in foreclosure land. You're not a subprime borrower. With a little planning and some modest sacrifices, you'll get over the hump. Here's how:
Know where you stand
The first step is to pick up the phone (or go in person) to your lender for exact figures. How big is the adjustment, when is it coming, and what will the next one be? Don't be reluctant. Human nature tells us to stick our heads in the sand when something bad happens financially. But know that lenders want you to plan and may even help.
Also, understand the full impact. Worst case, you might be looking at an extra $500 in interest payments after the reset. But for most it's tax deductible; the "net" impact is less.
If you plan far enough in advance, you may be able to save enough to get you over the hump. A $500/month adjustment is $6,000 a year. Not chump change, but not and an enormous sum, especially after tax effects are considered (in a 30% federal/state bracket, that $6,000 only costs you $4,200). If you could save enough to buy the home in the first place, you can probably save a good part of that $4,200 if you put your mind to it.
Find additional income sources
Obviously, if your costs go up, one solution to the problem is to expand your income. One way is to rent a room to a friend, relative, or insider. Not forever -- just until you can get your budget balanced again.
Or, find a small second job. Even a part-time retail job can pull $500 a month for about 15 hours a week. That goes a long way towards the reset, and you'll get a nice store discount besides (but don't spend it all!)
Refinance
I'm normally not a big advocate of bill consolidation loans, mainly because once smaller debts are wiped clean they have a way of reappearing. But consolidation can be a good way to offset a reset.
Why? Because reduced interest costs on credit-card and other high-cost debt can cancel out the increase in ARM interest, keeping your total interest costs relatively unchanged. This approach has risk, but makes sense with discipline.
The best idea, according to Eric Margolias, CEO of mortgage broker Source4HomeLoans, is to refinance into a fixed loan if at all possible. Fixed rates have stayed relatively constant, and with the ARM you remain exposed to rate increases. Prepare by fixing your credit, shopping at places like LendingTree.com and keep in mind that the percentage of fixed-rate applications being rejected is on the rise.
But for peace of mind -- and future financial prosperity -- "fixed" is probably where you should be anyway. Get there if you can.
Keep it in perspective
Margolias is adamant about looking at the bright side. Don't look at your ARM as a loan that got more expensive, but rather one that gave you a healthy discount in the beginning. You saved $6,000 a year initially on that $300,000 loan.
Tax implications aside, that's a big number -- where else can you get a discount large enough to buy a late model used car? It probably helped you get the home in the first place.
And finally, even if you don't successfully escape your ARM, history shows you're still in great shape. Two decades ago any mortgage under 10% seemed like a bargain. Today's interest rates -- even at the high end -- are among the lowest in history.
And that, as I see it, is the real bargain
-Christopher Rockey
First, if you are purchasing for an investment, relax wait for the next cycle or
contact me to learn more about purchasing "Short Sales", Foreclosures, fixer uppers,
conversions, or any other investing purpose you may think of. Most importantly don't
forget, there is not a grad. school in the US that doesn't teach you to buy Real Estate for simple portfolio diversification. Second, while reading the following article and you did fall into the 2005 trap, remember, you have a beautiful home,
a wonderful place to live and eventually the market will turn!
-- You went a little large with that 2005 home purchase. It felt good. You bit off a lot in the form of a large adjustable-rate mortgage to get there, but you made it happen. The low 3.75% intro rate really helped. You knew it would eventually go higher, but hey -- home prices would go higher, and so would your income.
The problem is, it didn't happen.
Well, your income did rise, but so did your expenses: higher energy costs, growing family, rising taxes. Now about those home prices -- you know the rest of that story. See how home prices are flagging.
Now what? The honeymoon is about to end, and you're bracing yourself and your family for the inevitable. Your mortgage payment is about to go up, maybe by hundreds of dollars. And now is not a good time to join the stampede of foreclosures, preforeclosures, short sales and other forms of dire and unintended consequences.
What do you do? Panic? Probably not. Sure, it's a financial setback to see any cost go up a lot. But the secret to weathering any storm is to see it coming -- and plan accordingly. A lot of energy has recently gone into helping underwater homeowners avoid or deal with impending foreclosures.
Foreclosures? I'm guessing many of you will feel the pain or rising payments, but aren't in foreclosure land. You're not a subprime borrower. With a little planning and some modest sacrifices, you'll get over the hump. Here's how:
Know where you stand
The first step is to pick up the phone (or go in person) to your lender for exact figures. How big is the adjustment, when is it coming, and what will the next one be? Don't be reluctant. Human nature tells us to stick our heads in the sand when something bad happens financially. But know that lenders want you to plan and may even help.
Also, understand the full impact. Worst case, you might be looking at an extra $500 in interest payments after the reset. But for most it's tax deductible; the "net" impact is less.
If you plan far enough in advance, you may be able to save enough to get you over the hump. A $500/month adjustment is $6,000 a year. Not chump change, but not and an enormous sum, especially after tax effects are considered (in a 30% federal/state bracket, that $6,000 only costs you $4,200). If you could save enough to buy the home in the first place, you can probably save a good part of that $4,200 if you put your mind to it.
Find additional income sources
Obviously, if your costs go up, one solution to the problem is to expand your income. One way is to rent a room to a friend, relative, or insider. Not forever -- just until you can get your budget balanced again.
Or, find a small second job. Even a part-time retail job can pull $500 a month for about 15 hours a week. That goes a long way towards the reset, and you'll get a nice store discount besides (but don't spend it all!)
Refinance
I'm normally not a big advocate of bill consolidation loans, mainly because once smaller debts are wiped clean they have a way of reappearing. But consolidation can be a good way to offset a reset.
Why? Because reduced interest costs on credit-card and other high-cost debt can cancel out the increase in ARM interest, keeping your total interest costs relatively unchanged. This approach has risk, but makes sense with discipline.
The best idea, according to Eric Margolias, CEO of mortgage broker Source4HomeLoans, is to refinance into a fixed loan if at all possible. Fixed rates have stayed relatively constant, and with the ARM you remain exposed to rate increases. Prepare by fixing your credit, shopping at places like LendingTree.com and keep in mind that the percentage of fixed-rate applications being rejected is on the rise.
But for peace of mind -- and future financial prosperity -- "fixed" is probably where you should be anyway. Get there if you can.
Keep it in perspective
Margolias is adamant about looking at the bright side. Don't look at your ARM as a loan that got more expensive, but rather one that gave you a healthy discount in the beginning. You saved $6,000 a year initially on that $300,000 loan.
Tax implications aside, that's a big number -- where else can you get a discount large enough to buy a late model used car? It probably helped you get the home in the first place.
And finally, even if you don't successfully escape your ARM, history shows you're still in great shape. Two decades ago any mortgage under 10% seemed like a bargain. Today's interest rates -- even at the high end -- are among the lowest in history.
And that, as I see it, is the real bargain
-Christopher Rockey
Market Update
In all fairness, I am not just using this site as a marketing tool to try to
get you to purchase a home and put your financial future in my hands. If that
is your impression please read the following article by a "Neutral Third Party."
California March 2007 Home Sales
April 12, 2007
A total of 39,800 new and resale houses and condos were sold statewide last month. That's up 27.5 percent from 31,228 for February, and down 31.0 percent from 57,675 for March 2006. An increase from February to March is normal for the season. Last month's sales made for the slowest March since 1997 when 36,498 homes were sold. March sales from 1988 to 2007 range from 29,356 in 1993 to 68,848 in 2005. The average is 46,256.
The median price paid for a home last month was $484,000, a new record. That was up 2.5 percent from February's $472,000, and up 3.0 percent from $470,000 for March a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,230. That was up from $2,196 in February, and down from $2,235 for March a year ago. The peak was $2,372 last June. Adjusted for inflation, mortgage payments are 8.3 percent above the spring 1989 peak of the prior real estate cycle.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers cover all sales, new and resale, houses and condos.
Indicators of market distress are moving in different directions. Financing with adjustable-rate mortgages is declining significantly. Foreclosure activity is rising but is still within the normal range. Down payment sizes are stable and flipping rates and non-owner occupied buying activity is down, DataQuick reported.
get you to purchase a home and put your financial future in my hands. If that
is your impression please read the following article by a "Neutral Third Party."
California March 2007 Home Sales
April 12, 2007
A total of 39,800 new and resale houses and condos were sold statewide last month. That's up 27.5 percent from 31,228 for February, and down 31.0 percent from 57,675 for March 2006. An increase from February to March is normal for the season. Last month's sales made for the slowest March since 1997 when 36,498 homes were sold. March sales from 1988 to 2007 range from 29,356 in 1993 to 68,848 in 2005. The average is 46,256.
The median price paid for a home last month was $484,000, a new record. That was up 2.5 percent from February's $472,000, and up 3.0 percent from $470,000 for March a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,230. That was up from $2,196 in February, and down from $2,235 for March a year ago. The peak was $2,372 last June. Adjusted for inflation, mortgage payments are 8.3 percent above the spring 1989 peak of the prior real estate cycle.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers cover all sales, new and resale, houses and condos.
Indicators of market distress are moving in different directions. Financing with adjustable-rate mortgages is declining significantly. Foreclosure activity is rising but is still within the normal range. Down payment sizes are stable and flipping rates and non-owner occupied buying activity is down, DataQuick reported.
Friday, April 20, 2007
Thought It Was Much To Easy Getting a Mortgage? You Were Right
My very first article on this informational site talks about "Only Needing a Pulse
to Purchase a home." Well it's all catching up to us now:
WASHINGTON -- Mortgage finance giant Freddie Mac has committed to buy as much as $20 billion in mortgages to help borrowers with high-priced loans stay in their homes, the company's chief executive said Wednesday.
The initiative by the government-sponsored company, the second-largest buyer and guarantor of home loans in the country, was disclosed by Freddie Mac Chairman and Chief Executive Richard Syron at a meeting on Capitol Hill. It came a day after federal regulators called on lenders to work with distressed borrowers unable to meet payments on high-risk mortgages to help them keep their homes.
Syron and the head of No. 1 mortgage financer Fannie Mae said Tuesday that the companies are developing new types of loans to aid homeowners in avoiding default. In a congressional hearing, Syron alluded to "a major effort to develop more consumer-friendly subprime products that will provide stable financing alternatives going forward."
The new products to be offered by Freddie Mac, and expected to be available by midsummer, will include fixed-rate mortgages as well as adjustable-rate mortgages with longer fixed-rate periods before resetting to higher rates.
Home-mortgage delinquencies and foreclosures have been surging in recent months, especially for people who took out subprime mortgages -- higher-priced loans for people with tarnished credit or low incomes who are considered greater risks. The distress has roiled financial markets and stoked anxiety that it could spill over into the broader economy.
Adjustable-rate mortgages, or ARMs, are especially prevalent in the subprime market. They are considered higher-risk loans because they typically draw borrowers in with an initial low "teaser" interest rate, which can spike upward after the first few years.
About 1.8 million adjustable-rate mortgages are resetting to higher rates this year and next, making foreclosures sure to continue rising, according to a new report by Congress' Joint Economic Committee.
"We'd better move long before that," Sen. Christopher Dodd, chairman of the Senate Banking Committee, said at a news conference following a "summit" he convened of regulators, mortgage industry executives and civil rights and consumer groups. The participants agreed "that we want to do everything possible to avoid foreclosures," said Dodd, a Connecticut Democrat.
In another move Wednesday, Washington Mutual Inc., one of the country's largest financial institutions, said it will refinance up to $2 billion in subprime mortgages to help borrowers avoid default and foreclosure, allowing them to apply for discounted fixed-rate home loans or other refinancing alternatives.
Subprime loans make up only about 6 percent of Seattle-based Washington Mutual's mortgage holdings, but they dealt a heavy blow to its first-quarter earnings, which slid 20 percent.
As housing prices continue to fall in many regions around the country, Washington Mutual has an interest in seeing borrowers repay rather than default because of the declining value of the collateral backing the loans. The Federal Reserve estimates it costs a bank $50,000 to foreclose on a home.
Foreclosures nationally in March spiked to 149,150, a 47 percent leap from March 2006, according to a survey conducted by RealtyTrac Inc. that was released Wednesday. Lenders repossessed one out of every 775 homes in March.
In California, recent surveys show foreclosures are mounting, with 11,033 recorded in the first three months of 2007. An estimated 1,505 of them were in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to La Jolla-based DataQuick Information Systems.
to Purchase a home." Well it's all catching up to us now:
WASHINGTON -- Mortgage finance giant Freddie Mac has committed to buy as much as $20 billion in mortgages to help borrowers with high-priced loans stay in their homes, the company's chief executive said Wednesday.
The initiative by the government-sponsored company, the second-largest buyer and guarantor of home loans in the country, was disclosed by Freddie Mac Chairman and Chief Executive Richard Syron at a meeting on Capitol Hill. It came a day after federal regulators called on lenders to work with distressed borrowers unable to meet payments on high-risk mortgages to help them keep their homes.
Syron and the head of No. 1 mortgage financer Fannie Mae said Tuesday that the companies are developing new types of loans to aid homeowners in avoiding default. In a congressional hearing, Syron alluded to "a major effort to develop more consumer-friendly subprime products that will provide stable financing alternatives going forward."
The new products to be offered by Freddie Mac, and expected to be available by midsummer, will include fixed-rate mortgages as well as adjustable-rate mortgages with longer fixed-rate periods before resetting to higher rates.
Home-mortgage delinquencies and foreclosures have been surging in recent months, especially for people who took out subprime mortgages -- higher-priced loans for people with tarnished credit or low incomes who are considered greater risks. The distress has roiled financial markets and stoked anxiety that it could spill over into the broader economy.
Adjustable-rate mortgages, or ARMs, are especially prevalent in the subprime market. They are considered higher-risk loans because they typically draw borrowers in with an initial low "teaser" interest rate, which can spike upward after the first few years.
About 1.8 million adjustable-rate mortgages are resetting to higher rates this year and next, making foreclosures sure to continue rising, according to a new report by Congress' Joint Economic Committee.
"We'd better move long before that," Sen. Christopher Dodd, chairman of the Senate Banking Committee, said at a news conference following a "summit" he convened of regulators, mortgage industry executives and civil rights and consumer groups. The participants agreed "that we want to do everything possible to avoid foreclosures," said Dodd, a Connecticut Democrat.
In another move Wednesday, Washington Mutual Inc., one of the country's largest financial institutions, said it will refinance up to $2 billion in subprime mortgages to help borrowers avoid default and foreclosure, allowing them to apply for discounted fixed-rate home loans or other refinancing alternatives.
Subprime loans make up only about 6 percent of Seattle-based Washington Mutual's mortgage holdings, but they dealt a heavy blow to its first-quarter earnings, which slid 20 percent.
As housing prices continue to fall in many regions around the country, Washington Mutual has an interest in seeing borrowers repay rather than default because of the declining value of the collateral backing the loans. The Federal Reserve estimates it costs a bank $50,000 to foreclose on a home.
Foreclosures nationally in March spiked to 149,150, a 47 percent leap from March 2006, according to a survey conducted by RealtyTrac Inc. that was released Wednesday. Lenders repossessed one out of every 775 homes in March.
In California, recent surveys show foreclosures are mounting, with 11,033 recorded in the first three months of 2007. An estimated 1,505 of them were in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to La Jolla-based DataQuick Information Systems.
Tuesday, April 17, 2007
Simple Investing 101: "Buy Low Sell High"
Here's an alarming fact about Sacramento's housing market: About one of every five existing homes on the market is a "short sale." That means the home is worth less than the value of the mortgage, and the lender is willing to accept less than full repayment of the loan to avoid foreclosure, says Tracey Saizan, president of the Sacramento Association of Realtors.
That, in turn, puts pressure on the remaining 80% of sellers, who have equity in their homes, to cut prices. The median price in the state capital, one of the most overheated metro areas during the real estate boom, fell 4.3% in December compared with December 2005.
"Sellers are having to give concessions and cut prices," Saizan says. "It's all about making the house show the best it can and aggressive pricing."
Though there's only a 4.3-month supply of homes for sale — a bit lower than the long-term average — that figure doesn't include the 3.5-month stock of unsold new homes that are also on the market, especially in some suburbs.
New-home sales in the fourth quarter were up nearly 57%, but that was compared with a dismal quarter at the end of 2005, according to The Gregory Group, a new home information and consulting firm. The median new home price fell 4.7% to $434,990, which doesn't take account of all the free goodies that builders are giving away, such as kitchen upgrades.
Still, builders are now seeing a decline in the number of buyers who are canceling their purchase contracts. "There is a sense that we are going through the tunnel, and the light at the other end is sunshine, not another train heading at us," says Greg Paquin of The Gregory Group.
Now you see my point of all this? Exactly the title of the article.
Give me a call, let's look at what we are going to do to help your
financial needs.
-Christopher Rockey
916.799.8472
That, in turn, puts pressure on the remaining 80% of sellers, who have equity in their homes, to cut prices. The median price in the state capital, one of the most overheated metro areas during the real estate boom, fell 4.3% in December compared with December 2005.
"Sellers are having to give concessions and cut prices," Saizan says. "It's all about making the house show the best it can and aggressive pricing."
Though there's only a 4.3-month supply of homes for sale — a bit lower than the long-term average — that figure doesn't include the 3.5-month stock of unsold new homes that are also on the market, especially in some suburbs.
New-home sales in the fourth quarter were up nearly 57%, but that was compared with a dismal quarter at the end of 2005, according to The Gregory Group, a new home information and consulting firm. The median new home price fell 4.7% to $434,990, which doesn't take account of all the free goodies that builders are giving away, such as kitchen upgrades.
Still, builders are now seeing a decline in the number of buyers who are canceling their purchase contracts. "There is a sense that we are going through the tunnel, and the light at the other end is sunshine, not another train heading at us," says Greg Paquin of The Gregory Group.
Now you see my point of all this? Exactly the title of the article.
Give me a call, let's look at what we are going to do to help your
financial needs.
-Christopher Rockey
916.799.8472
Learn how to pay off your mortgage by managing your interest
WHAT WOULD YOU DO IF YOU NO LONGER HAD A MORTGAGE PAYMENT?
Take more vacations? Purchase investment property?
Start your own business? Retire?
1) WHAT THIS ISN’T: This is not another mortgage offer or program which let’s face it…we are all sick of seeing in our mailboxes. This is not a bi-weekly payment plan or a program that requires you to come up with extra money to add to your principal. This is not a scam or illegal scheme. This is not a program that requires you to change your existing mortgage payment or refinance.
We appreciate you taking the time to actually read this. We know how busy you are.
THIS COULD CHANGE YOU AND YOUR FAMILIES FINANCIAL FUTURE.
2) WHAT THIS IS: Through an innovative program called the Money Merge Account or MMA, homeowners across the nation are paying off their 30-year mortgage in an average of 8 to 10 years or less without refinancing their existing mortgage…without increasing their monthly mortgage payments, and without any lifestyle changes. This is an interest-reducing program which combines innovative web-based software with banking systems that have been around for decades. This is a tool provides homeowners with one personalized easy-to-use online tool which when used an average of 10-minutes per month allows you the greatest time and interest savings imaginable. It’s simple…instead of the bank or your lender tying up your mortgage for 30-years with outrageous interest charges…this is you becoming the bank. In fact you may be surprised to learn that although this is new to the U.S., similar interest-reduction programs have been used in Australia, England and other areas for over 18 years now. Yes, that’s correct; many homeowners in other countries ACTUALLY own their homes 100% free and clear by making the same monthly payments that we do every day in the U.S….yet they pay them off in 1/3 to ½ the time.
Instead of your money just sitting in your checking or savings accounts waiting for you to pay expenses, the MMA program actually puts your money to work every minute it is in your account…significantly reducing interest on your mortgage. The MMA program consists of three main components: 1) your primary mortgage, 2) an advanced line of credit, 3) MMA online software.
The MMA works virtually just like your standard checking and savings account, except that it has the ability to offset large portions of interest on your mortgage each time you deposit income into your account. With the MMA only you have access to your money through checks, debits cards and ATM. The MMA is 100% secure, 128-bit encrypted, easy-to-use web-based system which allows you to monitor your account and interest savings 24 hours a day, 7 days a week. And again, the only person that has access to your money is you.
Sounds too good to be true?
Put meo the test. Call me at 916.799.8472 for a free, no obligation quote.
When I statred using this software I bought it just to get a friend off my back.
As it turns out, I am going to $218,000 in interest payments. That is the equivelant
of borrowing $300,000 on a 30 year fixed mortgage with a 2.57% interest rate.
-Christopher Rockey
916.799.8472
Take more vacations? Purchase investment property?
Start your own business? Retire?
1) WHAT THIS ISN’T: This is not another mortgage offer or program which let’s face it…we are all sick of seeing in our mailboxes. This is not a bi-weekly payment plan or a program that requires you to come up with extra money to add to your principal. This is not a scam or illegal scheme. This is not a program that requires you to change your existing mortgage payment or refinance.
We appreciate you taking the time to actually read this. We know how busy you are.
THIS COULD CHANGE YOU AND YOUR FAMILIES FINANCIAL FUTURE.
2) WHAT THIS IS: Through an innovative program called the Money Merge Account or MMA, homeowners across the nation are paying off their 30-year mortgage in an average of 8 to 10 years or less without refinancing their existing mortgage…without increasing their monthly mortgage payments, and without any lifestyle changes. This is an interest-reducing program which combines innovative web-based software with banking systems that have been around for decades. This is a tool provides homeowners with one personalized easy-to-use online tool which when used an average of 10-minutes per month allows you the greatest time and interest savings imaginable. It’s simple…instead of the bank or your lender tying up your mortgage for 30-years with outrageous interest charges…this is you becoming the bank. In fact you may be surprised to learn that although this is new to the U.S., similar interest-reduction programs have been used in Australia, England and other areas for over 18 years now. Yes, that’s correct; many homeowners in other countries ACTUALLY own their homes 100% free and clear by making the same monthly payments that we do every day in the U.S….yet they pay them off in 1/3 to ½ the time.
Instead of your money just sitting in your checking or savings accounts waiting for you to pay expenses, the MMA program actually puts your money to work every minute it is in your account…significantly reducing interest on your mortgage. The MMA program consists of three main components: 1) your primary mortgage, 2) an advanced line of credit, 3) MMA online software.
The MMA works virtually just like your standard checking and savings account, except that it has the ability to offset large portions of interest on your mortgage each time you deposit income into your account. With the MMA only you have access to your money through checks, debits cards and ATM. The MMA is 100% secure, 128-bit encrypted, easy-to-use web-based system which allows you to monitor your account and interest savings 24 hours a day, 7 days a week. And again, the only person that has access to your money is you.
Sounds too good to be true?
Put meo the test. Call me at 916.799.8472 for a free, no obligation quote.
When I statred using this software I bought it just to get a friend off my back.
As it turns out, I am going to $218,000 in interest payments. That is the equivelant
of borrowing $300,000 on a 30 year fixed mortgage with a 2.57% interest rate.
-Christopher Rockey
916.799.8472
Wednesday, April 11, 2007
What A Full Time Realtor / Loan Officer Needs To Know:
I did not start writing with the intent of being asked all the time "How Do You Do It?"
These are my 5 steps to success, enjoy.
How to Make Money in Real Estate
5 Steps:
Make A Living
In real estate it’s all about “location, location, location”
….in business it’s all about “cash-flow, cash-flow, cash-flow”.
Put systems in place.
Have separate business and personal checking accounts.
Pay yourself an after tax salary (putting aside1/3 for taxes is a good rule of thumb….note: IRS compounds interest daily).
When you have cash, but no cash flow, it’s better to borrow from yourself (savings/reserves) than on credit….but you must pay yourself back!!
Create A Surplus
The first place to create a business surplus is in your home budget - make cuts at home.
Get a budget booklet and keep it with you. Having it in your presence influences your thinking. It makes you aware and triggers your subconscious mind.
ATM card – use it for all of the “little stuff”. You will become more cognoscente of how much you are spending on the little stuff…it adds up.
Invest in peace of mind – put reserves into a savings account. Remember, when we are fearful, we make bad decisions.
Proper expectation: To save 1 month of reserve (at approximately $5K/mo. expense) it will take 1 year after you put away for taxes. Saving the first month of reserve is the hardest, but it does become easier.
Invest In Your Business
When your cash flow increases…you should increase your surplus from 1 month of reserves to 2 months, 3 months, and so on.
Invest in your business by giving yourself a break. Example: Hire a housekeeper or an assistant (hiring an assistant can duplicate your time). All of those things to do…”life stuff”…may have to do with how tired you might feel. The emotional payoff just might inspire you to make calls, write notes and do your client pop-bys.
Consider forming a team
Invest/Grow. Your business needs to be fed economically. Consider client parties, coaching, seminars, etc.
Continually analyze yourself and your growth opportunities.
Take Chips Off The Table
Use cash to reinvest in other opportunities to create wealth.
Taxation/Inflation – compounding interest. You are taxed on earnings, dividends & what you pass on after death. Inflation increases 3% on average (picture a water bottle with a 3% hole…eventually it will be empty). Inflation: If it currently costs you $125K a year to live today, then in order to live the same lifestyle 25 years from now, you’d need $ 250K a year.
Do diligent homework & research….then invest!
Separate Your Personal Finances From Your Business Finances
Run your investments as a separate business
Insulate yourself – you’ll make good decisions (Example: The market change)
Keeping business finances separate from family finances makes them both better
Great Points to Keep In Mind:
To start the process of working by referral….you need to generate leads.
Working by referral is a system. It is both simple and complex…simple to understand, but not to do.
2.25 written notes a day to clients, equals 50 each month. Take it one day at a time.
Create a tracking component – you can’t manage what you can’t measure.
Some of the top people in business invest 8 – 10% of their income into their business (example: coaching, seminars, etc.).
When you pay for personal growth….you value it more.
“Excellence is doing the best you can, with what you have, in the time frame allowed.”
“Success is not by chance…it’s by choice. Fortunes are made with the little choices.”
These are my 5 steps to success, enjoy.
How to Make Money in Real Estate
5 Steps:
Make A Living
In real estate it’s all about “location, location, location”
….in business it’s all about “cash-flow, cash-flow, cash-flow”.
Put systems in place.
Have separate business and personal checking accounts.
Pay yourself an after tax salary (putting aside1/3 for taxes is a good rule of thumb….note: IRS compounds interest daily).
When you have cash, but no cash flow, it’s better to borrow from yourself (savings/reserves) than on credit….but you must pay yourself back!!
Create A Surplus
The first place to create a business surplus is in your home budget - make cuts at home.
Get a budget booklet and keep it with you. Having it in your presence influences your thinking. It makes you aware and triggers your subconscious mind.
ATM card – use it for all of the “little stuff”. You will become more cognoscente of how much you are spending on the little stuff…it adds up.
Invest in peace of mind – put reserves into a savings account. Remember, when we are fearful, we make bad decisions.
Proper expectation: To save 1 month of reserve (at approximately $5K/mo. expense) it will take 1 year after you put away for taxes. Saving the first month of reserve is the hardest, but it does become easier.
Invest In Your Business
When your cash flow increases…you should increase your surplus from 1 month of reserves to 2 months, 3 months, and so on.
Invest in your business by giving yourself a break. Example: Hire a housekeeper or an assistant (hiring an assistant can duplicate your time). All of those things to do…”life stuff”…may have to do with how tired you might feel. The emotional payoff just might inspire you to make calls, write notes and do your client pop-bys.
Consider forming a team
Invest/Grow. Your business needs to be fed economically. Consider client parties, coaching, seminars, etc.
Continually analyze yourself and your growth opportunities.
Take Chips Off The Table
Use cash to reinvest in other opportunities to create wealth.
Taxation/Inflation – compounding interest. You are taxed on earnings, dividends & what you pass on after death. Inflation increases 3% on average (picture a water bottle with a 3% hole…eventually it will be empty). Inflation: If it currently costs you $125K a year to live today, then in order to live the same lifestyle 25 years from now, you’d need $ 250K a year.
Do diligent homework & research….then invest!
Separate Your Personal Finances From Your Business Finances
Run your investments as a separate business
Insulate yourself – you’ll make good decisions (Example: The market change)
Keeping business finances separate from family finances makes them both better
Great Points to Keep In Mind:
To start the process of working by referral….you need to generate leads.
Working by referral is a system. It is both simple and complex…simple to understand, but not to do.
2.25 written notes a day to clients, equals 50 each month. Take it one day at a time.
Create a tracking component – you can’t manage what you can’t measure.
Some of the top people in business invest 8 – 10% of their income into their business (example: coaching, seminars, etc.).
When you pay for personal growth….you value it more.
“Excellence is doing the best you can, with what you have, in the time frame allowed.”
“Success is not by chance…it’s by choice. Fortunes are made with the little choices.”
Thursday, March 29, 2007
I Think You all Have The Idea
I can't stress enough how valuable to you it is to buy a home to start your financial freedom.
It may seem like a huge step, or it may be more of a commitment than you were looking for
but the truth is, that if your reading this, there is something out there in your price range, so
go get it.
In the last article I mentioned Hedge fund Investing. This article is going to be based more
on what is known as an "Equity Index universal Life Policy" or E.I.U.L. The basics of
an EIUL is exactly what I have been discussing somewhat in every article, MANAGING YOUR
EQUITY. Let me give you a home equity scenario. Let's say that you are 3 years into a 30 year
fix on your home obviously leaving you 27 years until your home is paid off. Let's say you purchased this home for $300,000. in that 3 years I hate to tell you that you have only paid
down less than $10,000 to you principal balance. Ask how that is possible when your payments
are $2800.00 a month? You thought you have paid close to 75-80K toward your principal balance after all, you have paid over $100K in payments? Not true and this my friend is banking
lesson 101. This simple principal banker's call "Those Who Do Not Understand Interest Are Paying It." Check your "Truth In Lending" statement that your bank gives you every time
you borrow money. There is good news though. "Appreciation," your home gains value as it just sits there and does nothing. So let's say your appreciation is about 6% annually in an average
suburban market. After 3 years your $300,00 home is now worth roughly $360K. Would you
consider an interest only (To keep your payments the Same) cash out refinance. You can roll
that $60,000 into the EIUL and you have just diversified your investment portfolio. The mechanics of the EIUL are simple. It is a type of insurance that provides permanent protection,
has an unbundled premium structure, and has a flexible death benefit. Premium payments can be made according to the schedule in the policy, including "Stop and Go" and lump-sum unscheduled premium deposits. You can get into an EIUL that maintains a "Cash Value" and a tax free "Death Benefit." So why use your home equity? Because the cash value is invested and guaranteed by the insurance companies, of course there are caps and floors on how much they
will earn you but common companies like "New York Life" are paying 9% annually. Now are you
seeing the value? You just gained an extra 3% a year on your equity. Please contact me for more information on the EIUL, how it works and if you qualify for it. Every individual is different and this may not be the best deal for your specific goal. But I guarantee you what ever that goal may
be, I have an alternative income source that will help leverage your equity so your not paying back $730,000 on a $300,000 loan amount. Don't forget every time you pull cash out, you get
a higher tax write off because your loan amount goes up.
It may seem like a huge step, or it may be more of a commitment than you were looking for
but the truth is, that if your reading this, there is something out there in your price range, so
go get it.
In the last article I mentioned Hedge fund Investing. This article is going to be based more
on what is known as an "Equity Index universal Life Policy" or E.I.U.L. The basics of
an EIUL is exactly what I have been discussing somewhat in every article, MANAGING YOUR
EQUITY. Let me give you a home equity scenario. Let's say that you are 3 years into a 30 year
fix on your home obviously leaving you 27 years until your home is paid off. Let's say you purchased this home for $300,000. in that 3 years I hate to tell you that you have only paid
down less than $10,000 to you principal balance. Ask how that is possible when your payments
are $2800.00 a month? You thought you have paid close to 75-80K toward your principal balance after all, you have paid over $100K in payments? Not true and this my friend is banking
lesson 101. This simple principal banker's call "Those Who Do Not Understand Interest Are Paying It." Check your "Truth In Lending" statement that your bank gives you every time
you borrow money. There is good news though. "Appreciation," your home gains value as it just sits there and does nothing. So let's say your appreciation is about 6% annually in an average
suburban market. After 3 years your $300,00 home is now worth roughly $360K. Would you
consider an interest only (To keep your payments the Same) cash out refinance. You can roll
that $60,000 into the EIUL and you have just diversified your investment portfolio. The mechanics of the EIUL are simple. It is a type of insurance that provides permanent protection,
has an unbundled premium structure, and has a flexible death benefit. Premium payments can be made according to the schedule in the policy, including "Stop and Go" and lump-sum unscheduled premium deposits. You can get into an EIUL that maintains a "Cash Value" and a tax free "Death Benefit." So why use your home equity? Because the cash value is invested and guaranteed by the insurance companies, of course there are caps and floors on how much they
will earn you but common companies like "New York Life" are paying 9% annually. Now are you
seeing the value? You just gained an extra 3% a year on your equity. Please contact me for more information on the EIUL, how it works and if you qualify for it. Every individual is different and this may not be the best deal for your specific goal. But I guarantee you what ever that goal may
be, I have an alternative income source that will help leverage your equity so your not paying back $730,000 on a $300,000 loan amount. Don't forget every time you pull cash out, you get
a higher tax write off because your loan amount goes up.
Wednesday, February 28, 2007
Which Home To Purchase
When Purchasing a home there is one major thing that you need to consider immediately.
Are you buying a home strictly for investment or are you looking for a place to love enjoy
and call home. If your looking for an investment please read the next article as this one is
going to be geared more toward a primary residence.
It can be very tempting to buy a new home. The beauty, neighborhood, and warranty
are just a couple reasons to live in a new home community.
With that being said there are many questions that most first time home buyers should ask
there new home builder. Be sure to get the answers to even if the sales agent does not know!
1) Do you provide a soil report?
2)Do you have a public report posted?
3)What energy efficient features does you builder include?
4)What mold prevention procedures does your builder use?
5) Does the builder use a crushed rock or sand covering to lay the concrete foundation on?
6)What type of insulation does you builder use?
7)Is the attic insulated?
8)How many coats of stucco does the builder use?
9)What is your contract rescission period?
10)What options and upgrades come standard in your homes?
11)Who warranties the appliances?
12)What is the standard builder warranty?
13)How is the community developing?
14)Are there any "Proposed" Power Plants, Schools, Churches, or dump sites nearby?
You may be wondering why you care what the 100 page public report states or what the
70 page soil report says. To be honest the only reasons you ask those questions is to make sure
your builder is in compliance. If they are, the builder has that much more credibility to move
forward in the transaction. Sand or rock foundation that is the question. I have researched nation
wide to find out the correct answer to this question because many builders put up a good argument on what they feel is correct. My personal conclusion is simple, sand is cheaper
therefore cutting costs to the builder, and we have all heard the saying "The Wise Man Built
His House Upon A Rock."
Are you buying a home strictly for investment or are you looking for a place to love enjoy
and call home. If your looking for an investment please read the next article as this one is
going to be geared more toward a primary residence.
It can be very tempting to buy a new home. The beauty, neighborhood, and warranty
are just a couple reasons to live in a new home community.
With that being said there are many questions that most first time home buyers should ask
there new home builder. Be sure to get the answers to even if the sales agent does not know!
1) Do you provide a soil report?
2)Do you have a public report posted?
3)What energy efficient features does you builder include?
4)What mold prevention procedures does your builder use?
5) Does the builder use a crushed rock or sand covering to lay the concrete foundation on?
6)What type of insulation does you builder use?
7)Is the attic insulated?
8)How many coats of stucco does the builder use?
9)What is your contract rescission period?
10)What options and upgrades come standard in your homes?
11)Who warranties the appliances?
12)What is the standard builder warranty?
13)How is the community developing?
14)Are there any "Proposed" Power Plants, Schools, Churches, or dump sites nearby?
You may be wondering why you care what the 100 page public report states or what the
70 page soil report says. To be honest the only reasons you ask those questions is to make sure
your builder is in compliance. If they are, the builder has that much more credibility to move
forward in the transaction. Sand or rock foundation that is the question. I have researched nation
wide to find out the correct answer to this question because many builders put up a good argument on what they feel is correct. My personal conclusion is simple, sand is cheaper
therefore cutting costs to the builder, and we have all heard the saying "The Wise Man Built
His House Upon A Rock."
Wednesday, February 21, 2007
Investments Made easy
The first thing I want you to do is identify what the word investment really means.
If you look in the dictionary, "Investment" is defined as "to commit or use money or capital
for the purchase of property or a business, etc. with the expectation of profit." Pretty
straighforward right? One other point I want to make is the importance of Diversification.
Your investment portfolio should never have all your eggs in one basket. AVOID RISK
The first thing I want you to do is identify what the word investment really means.
If you look in the dictionary, "Investment" is defined as "to commit or use money or capital
for the purchase of property or a business, etc. with the expectation of profit." Pretty
straighforward right? One other point I want to make is the importance of Diversification.
Your investment portfolio should never have all your eggs in one basket. AVOID RISK
RISK:
- Risk of loss of principal
- Risk of loss of purchasing power, ie., inflation.
- risk of losing money due to inflationis the most misunderstood and largest risk retirees face. It can destroy their retirement security more often than the loss of principal
- Risk of taxation
In future articles I am going to show you all sorts of investment issues dealing with "Risk"
Until then be focused on your homes equity. Let me show you how to manage it using:
- Tic's
- Hedge Funds
- Money Merge Accounts
- Equity Index Universal Life policies
-Christopher Rockey
Wednesday, February 14, 2007
Simple Investing
Purchasing a home:
The purchase of a home is the very first step to Simple investing. Mortgage Brokers
and Lending Institutions have made it as easy as they possibly can to buy a home. Some
mortgage programs available literally require you to have a pulse to qualify for 100%
financing.
I mention Home buying first in "Simple Investing" because you can actually manage your
equity to work for you. You will have several options over time to set up retirement accounts
pay your mortgage off early (Often in 1/2 to 1/3 of the normal time) or get into other
investments which pay higher profits.
Imagine yourself as one of these people I mentioned earlier that "Just have a Pulse"
you know the type, the "Wandering Generality." Even this person with the proper teachings
can set him or herself up to be a successful millionaire by properly managing the equity
they have in there home.
Sounds hard to believe I know. But trust me it doesn't take a "Bullish" Real Estate Market
to use the techniques you will learn in the following articles.
-Christopher Rockey
The purchase of a home is the very first step to Simple investing. Mortgage Brokers
and Lending Institutions have made it as easy as they possibly can to buy a home. Some
mortgage programs available literally require you to have a pulse to qualify for 100%
financing.
I mention Home buying first in "Simple Investing" because you can actually manage your
equity to work for you. You will have several options over time to set up retirement accounts
pay your mortgage off early (Often in 1/2 to 1/3 of the normal time) or get into other
investments which pay higher profits.
Imagine yourself as one of these people I mentioned earlier that "Just have a Pulse"
you know the type, the "Wandering Generality." Even this person with the proper teachings
can set him or herself up to be a successful millionaire by properly managing the equity
they have in there home.
Sounds hard to believe I know. But trust me it doesn't take a "Bullish" Real Estate Market
to use the techniques you will learn in the following articles.
-Christopher Rockey
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