Janet French's Thoughts, Ideas and Updates

How To Shop Around?

Silverstar Finance Inc. — Fri, 02 Oct 2009 15:51:21 -0500

Shopping Around?

Here’s the Inside Scoop on How to Do It Right!

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS…RUN…DON’T WALK… RUN…TO A LENDER THAT DOES!

What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)

What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, visit www.SilverstarFinance.com and hit the “market update” link at the top of the page – this is where we put recent news and blog posts that are important to you when it comes to buying, refinancing, or investing).

When Bernanke and the Fed “change rates”, what does this mean… and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call).

Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

Be smart... Ask questions… Get answers!

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life… but we do this every single day. It’s your home and your future. It’s our profession and our passion. We're ready to work for your best interest.

Shopping…Part Two

Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to “shop” effectively.

First - IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS. But you didn’t really need us to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?

Second - YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case; expect very little advice, experience and personal service. Worst case; expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if you want the cheapest quote – head on out to the Internet, and we wish you good luck. Just remember that if you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – we are not the cheapest. Of course our rates and costs are very competitive, but we have also invested in the systems and team we need to ensure the top quality experience that you deserve.

Third - MAKE CORRECT COMPARISONS. When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.

Fourth - UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

Fifth - UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.

Ask questions. Get answers.

New Disclosures Mean Longer Waiting Times and Missed Deadlines

Silverstar Finance Inc. — Thu, 13 Aug 2009 13:41:43 -0500

Never underestimate a small group of dedicated individuals to change the world.

~Margaret Mead

As you may or may not know, there have been some MAJOR changes made in lending industry. One in particular that we would like to bring to light is the new HERA/TILA (Truth in Lending) regulations pertaining to loan disclosures. Please keep reading, as this is important to all of us!

Here is a summary of what we are referring to:

These new disclosure requirements--which are the result of the Home Ownership and Equity Protection Act (HOEPA) and the Housing and Economic Recovery Act (HERA) passed by Congress in 2008--are intended to protect consumers from deceptive lending.

While lenders are still formalizing their compliance policies, it appears that the slightest change in a loan could trigger re-disclosure requirements that could add days or even weeks to closing dates.

This means that when we send out our initial disclosures to clients to sign at the time of application and we don't have a rate locked in and/or fees settled on, for a number of reasons (property has not been found yet, lender has not been picked, etc.), if there is a change of 1/8th in the APR - Annual Percentage Rate (more OR less), we must re-disclose. Which means that clients will need to resign all documentation and have it re-verified.

Just like the HVCC regulation (new appraisal guidelines), we don't think we will completely grasp the impact of the new HERA/TILA regulation until all the procedures are put in place by lenders. One thing is for certain, there will be an increased number of missed closing dates, expensive lock extensions and frustrated borrowers. We will always do everything in our power to limit this frustration, however, a lot will be in the hands of the lending institution. Our current business practice is to disclose, disclose, disclose, but unfortunately we broke our rate-quoting crystal ball, so there will be times when a re-disclosure, under these new guidelines, is inevitable. Preparation is key.

Based on these changes, there is opportunity for failure in scheduling closing dates that are unmanageable, which can cost buyers money from blown rate locks and extended closing dates with some sellers. In an effort to under promise and over deliver we meet with all of our clients one-on-one at their initial strategy planning session. Communication is key not only with our clients but with their Realtors, Escrow, Title and other parties to the transaction.

We want to make sure you are aware and not caught off guard. These changes affect everyone who is purchasing a home or refinancing their existing mortgage.

If you have any questions meet with our T.E.A.M. ~ Trusted Equity and Asset Management ~ and get them answered.

What....Worry? Why?

Silverstar Finance Inc. — Thu, 30 Jul 2009 18:49:23 -0500

"We should never allow ourselves to be bullied by an either-or. There is often the possibility of something better than either of those two alternatives." ~ Mary Parker Follett

Something to think about.

45% of retirees aged 55-75 surveyed in April 2009 have either not calculated how long their assets are anticipated to last during their retirement years or they have never given the issue any thought.
~source: Society of Actuaries

Are you prepared?

Are you saving $$ on autopilot each month?
Is your debt under control or managed correctly? Especially your Biggest Debt...your mortgage?
Do you have a financial plan in place?
Do you know what tax laws can benefit or hurt you?

Consider this...

People are living longer and working longer than planned.
"Bad" debt is eating away at your retirement.
Is much of your financial growth being lost because of the current financial turmoil?
Taxes ARE increasing like it or not. Do you know how to protect your hard earned income?

"Getting Fiscally Fit" is just one of the employee benefit workshops that we offer to help business owners and managers offer their team to help become happier and more productive employees.

Here are the things we discuss during our 1 hour workshops at places of business, groups, organizations, etc.:

How to overcome the roadblocks to financial success.
Creating and maintaining a financial blueprint.
How our daily habits influence our financial fitness.
How to develop our own action steps to financial freedom.
The need to identify cash flow traps.
Why tax-planning vs. tax-preparation can put dollars back into your monthly cash flow.

Before you quit reading, consider the statistics presented by the Society of Actuaries. People are concerned, stressed and fearful about their futures. Wouldn't it feel great knowing that you have helped a co-worker or employee lay the right path to a successful financial future?

If you answered YES then read on..

If you would like to host one of these events or you would like your employer to host one of these events so that you can get started on working on the answers to the question above, all you need to do is forward this email to someone in your Human Resources or Employee Benefit Department and/or reply with the person in charge of scheduling these kinds of benefits.

We are a 501(c)(3) non-profit organization that provides corporations, family businesses and organizations with financial education through seminars and workshops. Our 20 plus seminars cover a wide variety of topics meaningful to everyone.

We offer these seminars at NO CHARGE. You and your team will obtain useful information that will help identify your financial needs. As an employer, family business owner, or organization you will be receiving / providing a valuable, but yet NO COST SERVICE. As for us, we benefit by the exposure that we gain in the community.

Our seminars are NOT SALES EVENTS. We do not endorse any specific products nor companies. Our primary purpose is to provide general financial education to the community.

Feel free to research us more at www.sofa.org.

Are Banks Withholding Foreclosed Homes to Prop Sales?

Silverstar Finance Inc. — Thu, 23 Apr 2009 14:29:55 -0500

The Question Remains,

What is Really Happening in the Real Estate Market?

Lenders for months have been holding back a high volume of homes in the foreclosure pipeline that could further depress home values if they are released at once into the market, industry experts say. The artificially created shortage of foreclosed homes for sale comes when there is a strong resurgence of home buying, with consumers finding, often to their surprise, that they must make multiple offers to compete for a diminished supply of bargain homes.

Meanwhile, financial institutions have been encouraged by federal and state lawmakers to slow the foreclosure process to provide more time to work with borrowers on mortgage modifications in an effort to reduce foreclosures.

So where does this game playing lead us?

Scott Anderson, vice president and senior economist with Wells Fargo, said by withholding a portion of foreclosed properties from the market, lenders may deliberately be preventing home prices from falling as fast as they otherwise would.

So don't be fooled by a low supply of homes and a perceived surge in home buying...

A tally by one company that closely monitors foreclosures showed only about a third of repossessed houses are being actively marketed. If this "phantom supply" of bank-owned houses is put up for sale at once, Anderson said, it would probably prompt another steep plunge in property values.

The median price of an Inland house has dropped 43 percent in San Bernardino County and 39 percent in Riverside County in the past year, but the rate has slowed in recent months.

Statistics confirm that banks are keeping foreclosed houses off the market much longer than usual, said Rick Sharga, senior vice president of RealtyTrac, a company that monitors foreclosure trends nationally. Sharga said RealtyTrac studied the 234,716 bank-owned California homes in its database as of the end of November and discovered that only 34 percent were advertised through the state's dozens of multiple listing services, which is how bank-owned properties are normally marketed. "We were frankly stunned by that," Sharga said. Usually repossessed houses are processed, fixed up and listed for sale within 30 days, he said.

While the gradual release of foreclosed properties helps to prop up prices, it also could prolong the real estate recession.

Foreclosure Hiatus

Also, the foreclosure process has been interrupted repeatedly by federal and state moratoriums designed to encourage lenders to modify loans to help financially stressed homeowners keep their homes. Two large government-controlled lenders, Fannie Mae and Freddie Mac, in November imposed holiday suspensions of foreclosure-related evictions that were repeatedly extended until March 31.

In California, legislation took effect in September that requires lenders to give borrowers 30 days notice before taking the first step toward foreclosure. And starting this summer, loan servicers in the state must delay for 90 days the foreclosure of owner-occupied homes or have a comprehensive loan modification program. As the moratoriums expire, the number of foreclosures is expected to spike. So GET READY...this is definitely the time to buy deeply discounted properties and interest rates are fantastic too!

Meanwhile a surge of first-time home buyers and investors, attracted by low prices and mortgage rates and government tax incentives, are competing for a diminishing number of homes for sale. Buyers are snapping up foreclosed houses, many of which receive multiple offers, faster than they can be replaced by new foreclosures.

"At the rate they are dishing out these repos (repossessed houses) it will be years before they all sell," said Kershaw of Prudential Realty, who claims that the banks are missing out on a great opportunity to clear out their foreclosures. "It is spring and we are in the big buying season. This is probably not the time to choke the market with no inventory. It is like not having iPods at Christmas time," said Kershaw. RISMEDIA, April 22, 2009.

Don't Miss Out Like the Banks Are

If you are considering buying property or your clients are, not snooze, it may take longer than you think and you will risk missing a GREAT opportunity by not be prepared.

Have a super successful day!

BREAKING NEWS...Are You Financially Literate?

Silverstar Finance Inc. — Wed, 22 Apr 2009 11:42:54 -0500

Did you know?

It's Financial Literacy Month. And to long with this, please read this perfect quote to think about as you go through this very changing period of time.

"What is" is always shifting. Be aware of the shift in order to create the life I want.

Please take a moment to watch my SHORT, yes it's true, it's only 1:56 mins, video

PRESIDENT OBAMA URGES MILLIONS TO REFINANCE THEIR MORTGAGE

Quote of the Week:

"There are 7 to 9 Million people across the country, who right now, could be taking advantage of lower mortgage rates."

~Barrack Obama

CLICK ME TO READ MSNBC ARTICLE

CLICK ME TO WATCH OBAMA'S PRESS CONFERENCE

Please remember, we are able to orchestrate the new programs available and are excited about the programs that are being released in the next few weeks.

Part of being qualified for this new program is that your existing loan must be owned by Fannie Mae or Freddie Mac. Click on each of the links below to find out if you are a candidate.

Does Fannie Mae Own Your Mortgage?

If you are indeed a candidate, great, inquire to find out what I can do for you right away.

New Home Sales Climb + Record Interest Rate Lows

Silverstar Finance Inc. — Thu, 26 Mar 2009 17:44:05 -0500

Great News!!!

It's really nice to finally hear some good news on the home front. Sales of new single-family homes jumped 4.7 percent from January to February, the Commerce Department reported today. And interest rates are hitting all time lows since 1971.
But...Better compared to what?

What you are NOT hearing is that there is STILL a lot of volatility in the market. Now you may be aware of this but it's important to keep that in perspective and definitely within your focus, especially when you are advising your clients on the right steps to take over the next few years. I couldn't believe it, this morning on one of the major news channels, I actually heard the newscaster say that interest rates hit an all time low today of 4.375%! I couldn't believe what I was hearing. Over the last 2 days interest rates have gone up .125% each day and 2 days ago we were on average at 4.75% for a conforming 30 year fixed loan, $417,000 or less. Take care who you get your information from.

So how does the volatility play out?...

A FEW STATES - 50% of the foreclosure action that took place last month on nearly 291,000 troubled properties nationwide occurred in just 3 states. And guess who is in the top 3? That's right California along with Florida and Arizona (source: RealtyTrac).

While the unexpected increase in home sales and interest rates dropping was welcomed by many including the financial markets, sales of new homes were down 41% from a year ago. February's numbers were the second worst on record, surpassed only by January's annual sales rate of 322,000 homes..

So, although this is good news, in reality, we're really just bouncing off the lows and we have a ways to go. It's important to always be prepared for the worst so that you and your clients aren't taken by surprise.

You can always count on us to provide you and your clients w up to date and insightful market views on real estate and mortgages. So keep checking back for more...

Obama Plan - Can You Benefit?

Silverstar Finance Inc. — Mon, 09 Mar 2009 19:04:29 -0500

So the question is, do you qualify for the any of the new mortgage programs?

Since last week, I have been contacted repeatedly by clients, friends and family wanting to know if they qualify for any of the mortgage relief programs that have been signed into law over the past few weeks.

More details have been released by Fannie Mae and Freddie Mac on how they will handle refinance transactions authorized by the Home Affordable Refinance program. The complete details of both programs can be found by accessing the program guides from Fannie Mae and Freddie Mac, but I will point out some of the highlights below to help answer your questions.

Lenders and investors are in a holding pattern as they determine if and when and how they will accept these transactions. Even though this legislation has passed - they are not all required to participate. In all cases loans will have to be refinanced with the existing owner of the loan today. Meaning, if Fannie Mae is the owner of your loan, the loan must be delivered to Fannie Mae and underwritten according to their guidelines. The same is true for Freddie Mac.

So how do you know if your loan is owned by Fannie or Freddie?

You have the ability to do this by contacting your loan servicer (company that sends you your mortgage statement) and asking...or you can do this by using the links below. If you need help, I can submit the information for you, simply send me a copy of your current mortgage statement. Note that your property address must be entered exactly as the agency has it on file, or it may not be found (ie: Rd or Road? St or Street?

Does Fannie Mae Own Your Mortgage?

Does Freddie Mac Own Your Mortgage?

Let's look at the guidelines for both Fannie Mae and Freddie Mac and some of the key factors I see that will impact or enhance your ability to participate. Even though these are some of the highlights, you can also read more detailed guidelines on your own.

One key point to remember is that these are the guides from the Freddie and Fannie. And just as participation in the programs is voluntary, individual lenders and servicers may choose to implement constraints that deviate from the guidelines on their own.

Fannie Mae

Qualifications for a refinance

You must be receiving either a lower mortgage payment or moving to a more stable type of product like an Adjustable Rate Mortgage to a Fixed-Rate.

The maximum loan amount can only be 105% of your homes value. There is no limitation if you have 2 mortgages but 2nd lien holders will need to re-subordinate and that probably wont be that easy.

If mortgage insurance (PMI) does not exist on the loan today, it will not be required on the new loan. If PMI does exist on the loan, the loan will be required to be re-insured and re-qualified through the existing PMI company.

The availability for appraisal waivers will exist in limited situations.

Applications can be taken now but loan findings may not be available until early April or May but again, each lender may or may not be participating.

Freddie Mac

The Freddie Mac guidelines are somewhat similar to Fannie Mae's, but they are a bit more vague at this time. Although Freddie Mac initially stated that these refinances may ONLY be conducted by the loan servicer or one of their retail channels, I have learned that they are looking at options that could enable more mortgage brokers, like me, to be involved in refinances under this program.

Bottom line - it is still too early to see how this will all play out. If you are truly in financial hardship then other options might be a better way to go.

And if you are truly not in financial hardship and you are looking at options just because the value of your home has dropped then most likely you will not qualify for any of these options. If you HAVE to sell your home, call me to discuss alternative options, there are many.

And if you don't then like many of us, we all get to just sit tight and wait for home values to go up again in the future...and they will.

Additional Resources:

Fannie Mae

Freddie Mac

Does Fannie Mae Own Your Mortgage?

Does Freddie Mac Own Your Mortgage?

Hopefully I've helped clarify some of the confusion...unfortunately, there's probably more coming. =)

Get the Scoop on Interest Rates and Premium Pricing

Silverstar Finance Inc. — Fri, 23 Jan 2009 14:55:06 -0600

What Lenders Learned During Prior Refi Booms

First off, what is happening with interest rates and reduced yield spread premium? 15 years ago it wasn't uncommon to see nice buy-up schedules on many products, with an increased yield spread premium being offered in return for a higher interest rate. But then along came the refinancing frenzy of 1993 and 1998, followed by the grand daddy refi bonanza of 2002 to 2003. As home loan rates dropped ever lower over the years, you can imagine how the investors felt as they watched loans turn around to be paid off in a relatively short time, as increasingly lower rates made it attractive for clients to refinance, sometimes multiple times in a year. These losses on loans were very costly to lenders.
So...after learning their lesson many times over...the lenders got smarter and started to reduce the amount of par premiums, followed by making those premiums more expensive by demanding even higher rates in return for a smaller premium and have now nearly eliminated that premium pricing which cost them so much money in the past.

Now, who would have ever thought that a credit score of 680 or an LTV of 90% would be considered such risky business? But it's been a tough year for everyone, including Freddie and Fannie, and risk-based pricing is one measure they can take to protect themselves. Previously adjustments could fairly easy to build into the rate, with a small bump up in rate. But those days are gone, often leaving the borrower with no choice but to pay points for the adjustment. This can be frustrating to clients who don't understand why the recent pricing adjustments have to translate into potentially thousands of dollars in cash out of pocket.

Bottlenecks in the Pipeline Keep Rates Artificially Inflated

But wait there's more...Investors have been slammed with the recent uptick in volume, at a time when they have both shrunk in number and depleted their head count, in an effort to slash costs. So while the increase in volume is certainly a good thing, it is apparently "too much too soon" for some investors to handle...and the only way to slow down the volume is by an increase in pricing. And why wouldn't they want to do this??? If their capacity is maxed out, raising rates helps increase profits while making the workload manageable by slowing down the flow of incoming files. Not great for us but good for them.

The bottom line is - smart consumers cannot just call a lender and say: "what's your rate and closing costs?" There are simply so many unknowns with the combination of credit score, loan to value percentages, property type, etc... that it is imperative for your clients to speak with a trusted mortgage advisor before making any final decisions about a property.

We are here to provide honest, straightforward advice. We will take ongoing care of you and anyone you refer to us in the same upfront fashion as we always have and this level of service does not end when a transaction is complete. Adapted from MMG

What Do You Think? ....Is Attitude is Everything!

Silverstar Finance Inc. — Thu, 15 Jan 2009 17:14:40 -0600

"A good goal is like a strenuous exercise- it makes you stretch."
~Mary Kay Ash

For some reason, when we can't see the future clearly, we tend to see things as becoming worse rather than better. However, the optimistic attitude that gave us the world we now live in is what is needed to take advantage of the fantastic opportunities all the despair and market uncertainty is generating today.

Attitude is Everything>

Much of life is about striving to improve - whether that's in our relationships, our professional accomplishments, or in our financial well-being. But success does not come by accident. Decide to achieve your goals and then get the help you need to implement them and be successful!

Read the full article =>> Attitude is Everything!

Real Estate, Rental Income and Your Estate Plan

Silverstar Finance Inc. — Fri, 09 Jan 2009 17:48:51 -0600

I was in the process of recording a video this week but I'm loosing my voice and the video was just not turning out so great.

So ....Continuing on from "Why Houses Make Great Investments"...that I wrote to you about a couple of weeks ago.

What a GREAT environment we're in for buying real estate....yep that's right, I said "Great". I'm sure you've read or heard by now how fantastic interest rates are, hopefully you read my email from last week. =) And...you know that homes are on sale and investment earnings are down.

So, how does this affect your plan?

People who are self-employed who will not be getting a pension from their employer, myself included, need do some extra planning to put money aside for our retirement. And now, especially in today's income and investment environment, it's difficult to have enough money to save, right?!

Alright so even if you aren't self-employed and you're expecting a pension, how secure is it? Probably not something you are going to rely on solely, right?

So what are your alternatives. Although there are many, real estate happens to be an excellent choice. Think about your own Estate / Retirement plan, you do have one right? Use this simple form below to start thinking about how rental income can help your bottom line.

Estate Building Plan

Situation:

You want to be able to retire with a secure annual income of:
$____________ or $_________/month.

Problem:

Social Security will not produce all that you need.
Your Pension will only produce annual income of $___________
or you are Self-Employed and do not have a pension plan.
You do not expect to get a BIG inheritance. =(

Proposed Solution:

Acquire ____ rental houses.
Live long enough to have your tenants pay off your house!! =) Or at least paid off way down!
Your real estate portfolio will produce the extra passive income that you desire. And...you get to collect the income along the way, even before you are retired.

** Here's an idea: Have each house represent a specific purpose in your plan. One house pays for your insurance. One house pays your mortgage on your primary residence. One house pays for your vacations etc.

On the chart below, I've listed 3 types of income, the tax benefits and how much can end up in your pocket. I used a self employed person to keep it simple. Keep in mind these are just general numbers, everyone has their own unique situation.

Now....think of it this way, just imagine how you will feel if you have all 3 types of income working for you? Happy, Secure and Financially Free?

2009 is going to be a golden year for purchasing real estate and ultimately will set you up for an incredible retirement, if you plan ahead and develop the right exit strategy. Do not wait, the market is changing rapidly and you have to be prepared in advance.

Next week, I'll show you how real estate can be a fantastic hedge against coming inflation.

All the best wishes for you and your family in 2009.

Why Houses Make Great Investments

Silverstar Finance Inc. — Wed, 26 Nov 2008 12:33:46 -0600

Happy Thanksgiving!!

I know there is a lot to be thankful for this year and definitely in the coming year at least in the opportunities the current housing market is presenting. If you want to buy investment property or a beautiful home to live in, there are significant discounts and benefits that you wont want to miss out on. Peter Drucker said this.....

"The only thing we know about the future is that it will be different."

This applies now more than ever. Each day we are getting new "exploding" news about this bank or that institution, who are we bailing out today, who is going under today... etc. etc. etc. All we hear about is the negative, there is a lot of positive too, you just need to know where to see it or hear it. Hint....these emails and our daily market update, Silverstar Blog or Market Update

My personal goal is to purchase at least 10-15 houses in the next 2-3 years to hold for cash flow and long-term appreciation. Of course, I'd love to have the passive income!!! This is not a difficult goal to achieve in this market and it requires preparation and the right plan.

Reasons Why I Believe that Houses Make a Better Investment than Condos or Other Real Estate.

Well one thing you can count on for sure is inflation over time and the value of cash flow.

This chart shows you the value of cash flow over time with rental income increasing by 5% per year. You don't have to want to own 12 properties to make a significant impact on your annual income. Just 4 houses, cash flowing $1,000 per month each can replace an $80k income per year in just 10 years. It's really not a difficult thing to do. You simply need to know what goals you want to accomplish, the right path to get there and the exit strategy you plan on implementing.

Suppose you decide to hold 4 houses long-term for cash flow and then have 2 other homes that you will sell in the future after the property has gained appreciation for a chunk of cash? Think back, as if you had sold a house 2 years ago or so at the height of the market.... If I had sold one of my rental properties, I would have make over $150k in just a few years. That's pretty significant!

I want to help you develop a plan, put it in action and manage it along the way. Support is important and necessary to achieve your BIG financial goals. You have to think anyway so why not think BIG!!!

Have a super Thanksgiving Holiday full of everything and everyone you are thankful for.

There are Two Ways to Make Money with Real Estate...Want to Know How?

Silverstar Finance Inc. — Mon, 24 Nov 2008 12:30:13 -0600

It sure is crazy what's happening out there and I completely understand many of the concerns I've been hearing from you. That's why I spend my time studying the market everyday and proactively staying on top of the changing landscape in the lending industry, so I can help you make great, well-considered choices for you and your families future.

So Why Buy Real Estate Now?

Many people are struggling to decide if it's the right time to buy real estate. Although we haven't seen the bottom yet, who knows exactly when that will happen? I don't have a crystal ball, do you?

But what do we know for certain? There are Two Ways to Make Money with Real Estate

Buy a property for less than it is worth. Either buying it below the market or buying it on better than market terms. Then you can rent it and hold for appreciation, increased rental income / cash flow and then eventually sell it. See the short video below on cash flow and increasing rents...
Buy a property and add value to it. Developing it, remodeling or changing it's use. This is a lot more difficult to do and I wouldn't recommend it until you have mastered Buying Right the first way to make money in real estate.

Video Link

Right now, you can Save Tens of Thousands of Dollars Buying a Home that is deeply discounted So Why Wait? Who knows for certain what next year will bring, higher interest rates? More stringent lender guidelines? Job layoffs? The odds are high that all of these will occur based on what is happening today so why take your chances at a later day if you qualify now? It just doesn't make sense!

It's true when you hear that it's best to Buy Low and Sell High, right? However, what do most of us do? Sell low and Buy High, it's human nature to make emotional financial decisions and 9 times out of 10, it's not a good decision!

What if we spent thirty minutes reviewing your situation and goals so we could see if it may make sense for you to act now and so you could do so with confidence? How would that make you feel?

The old adage, "When Life Gives You Lemons, Make Lemonade", couldn't be more true! Instead of lemonade, let's take this opportunity to make money now and for your future!

Stay tuned...next week I'm going to continue on this series showing you the enemies of capital build up and how to best combat them.

Season to Give....Wait, Shouldn't This Be All Year Long?

Silverstar Finance Inc. — Wed, 12 Nov 2008 19:45:49 -0600

This past year, I became a member of the Huntington Beach Kiwanis, hbkiwanis.org/ and this has been one of the best decisions that I have ever made. Not only are our members fun, energetic, giving and passionate about what Kiwanis stands for but it feels great each day knowing that I get to help someone less fortunate in our community.

So who are these Kiwanians anyway?

We are women and men of our community from all walks of life who spend lunchtime once a week with their fellow members to hear informative programs. A former mayor of our city, business owners, civic and charitable-entity leaders are active members. There are doctors, attorneys, service business owners, and retired industry executives and public servants.
Our main reason for joining the Kiwanis family is a desire to give back to our community by participating in one of the many worthwhile projects funded by the Foundation. Colette's House, Project Cherish, Project Self Sufficiency and scholarships to qualifying Key Win's and Key Club seniors just to name a few....

One of our exciting events coming up is the Harbour Lights Holiday Boat Parade! happening on December 7th. You can get the details here: Boat Parade. All monies raised are 100% donated to the Kiwanis Foundation to support projects like Clothe the Children and Holiday events for children in need.

In addition, we have a Golf Tournament in March 2009 at the Old Ranch Country Club that you wont want to miss. Details here: Golf Tournament. Not only will this be an extremely fun event but our goal is to raise over $50,000 to fund out ongoing programs.

Please come and join us at these events, I guarantee you wont be disappointed!!!

Cheers! Janet
SilverstarFinance.com
714-892-1002 x.311

22 Ways to Get Funds to Close an FHA Loan...Continued....Did I say Sweat Equity???

Silverstar Finance Inc. — Tue, 04 Nov 2008 17:50:47 -0600

FUNDS TO CLOSE for FHA

As the up and downs continue, many of my clients call wondering how they are going to get the funds needed to purchase a home. There are many alternatives available depending on their own particular situation but FHA may be the answer they are looking for. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

After today's election, I believe that many people are wondering if the market will return to "normal". Personally I think we are in for a very long hall in regards to the ups and downs of not only the real estate market but the economy in who. Regardless of anyone's personal views, it is always prudent that to meet with your client to determine how much and from where they are going to get their down payment and closing cost funds. Below are just 3 of the 22 Important Ways to know well ahead of the closing date before your client starts shopping. Make your transactions smooth sailing from start to finish by being knowledgeable from day 1.

Gift Funds~
An outright gift of the cash investment is acceptable if the donor is the borrower’s relative, the borrower's employer or labor union, a charitable organization, a governmental agency or public entity that has a program to provide homeownership assistance to low- and moderate-income families or first-time homebuyers, or a close friend with a clearly defined and documented interest in the borrower.

The gift donor may not be a person or entity with an interest in the sale of the property, such as the seller, real estate agent or broker, builder, or any entity associated with them. Gifts from these sources are considered inducements to purchase and must be subtracted from the sales price. No repayment of the gift may be expected or implied. (As a rule, we are not concerned with how the donor obtains the gift funds provided they are not derived in any manner from a party to the sales transaction. Donors may borrow gift funds from any other acceptable source provided the mortgage borrowers are not obligors to any note to secure money borrowed to give the gift.)

This rule also applies to properties of which the seller is a government agency selling foreclosed properties, such as the Veterans Administration or Rural Housing Services. Only family members may provide equity credit as a gift on a property being sold to other family members.

Documentation Requirements~ The lender must document the gift funds by obtaining a gift letter, signed by the donor and borrower, that specifies the dollar amount of the gift, states that no repayment is required, shows the donor’s name, address, telephone number and states the nature of the donor’s relationship to the borrower. In addition, the lender must document the transfer of funds from the donor to the borrower, as follows:
1. If the gift funds are in the homebuyer's bank account, the lender must document the transfer of the funds from the donor to the homebuyer by obtaining a copy of the canceled check or other withdrawal document showing that the withdrawal is from the donor's account. The homebuyer's deposit slip and bank statement that shows the deposit is also required.
2. If the gift funds are to be provided at closing.
3. If the transfer of the gift funds is by certified check made on the donor's account, the lender must obtain a bank statement showing the withdrawal from the donor's account, as well as a copy of the certified check.
4. If the donor purchased a cashier's check, money order, official check, or any other type of bank check as a means of transferring the gift funds, the donor must provide a withdrawal document or canceled check for the amount of the gift, showing that the funds came from the donor's personal account. If the donor borrowed the gift funds and cannot provide documentation from the bank or other savings account, the donor must provide written evidence that those funds were borrowed from an acceptable source, i.e., not from a party to the transaction, including the lender. "Cash on hand" is not an acceptable source of the donor's gift funds.
Regardless of when the gift funds are made available to the homebuyer, the lender must be able to determine that the gift funds ultimately were not provided from an unacceptable source and were indeed the donor's own funds. When the transfer occurs at closing, the lender remains responsible for obtaining verification that the closing agent received funds from the donor for the amount of the purported gift and that those funds came from an acceptable source.
Trade Equity~
The borrower may agree to trade his or her real property to the seller as part of the cash investment. The amount of the borrower's equity contribution is determined by subtracting all liens against the property being traded (along with any real estate commission) from the lesser of that property's appraised value or sales/trade price.

Value must be determined by a residential appraisal no more than six months old. Evidence of ownership also is required. Additionally, if the property being traded has an FHA-insured mortgage, assumption processing requirements and restrictions apply. Please be aware that there are additional industry restrictions to this provision.

Employer's Guarantee Plans~
If the borrower’s employer guarantees to purchase the borrower's previous residence as the result of relocation, the borrower must submit evidence of the agreement and the net proceeds must be guaranteed.

All is not lost however simply because you or your client does not have enough savings...stay tuned for info. on rent credit, 401(k), disaster relief plans, private savings clubs and so much more.

22 Ways to Get Funds to Close an FHA Loan...Continued

Silverstar Finance Inc. — Thu, 16 Oct 2008 15:51:05 -0500

FUNDS TO CLOSE for FHA

With the extreme ups and downs of the current market, I know many of my clients are wondering how they are going to get the funds needed to purchase a home. But within the FHA guidelines, there are many alternatives. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

As we approach the end of the year, there are many people who are wondering if they should scramble to buy a home now or wait until early next year. Whether your client decides to purchase now or wait, it is prudent that you meet with them to determine how much and from where they are going to get their down payment and closing cost funds. Below are just 3 of the 22 Important Ways to know well ahead of the closing date before your client starts shopping. Make your transactions smooth sailing from start to finish by being knowledgeable from day 1.

Collateralized Loans~
Funds can be borrowed for the total required investment as long as satisfactory evidence is provided that the funds are fully secured by investment accounts or real property. Such assets may include stocks, bonds, real estate (other than the property being purchased), etc. We can also use funds that have been borrowed against collateralized assets such as a car, boat, etc.

In addition, certain types of loans secured against deposited funds, such as signature loans, the cash value of life insurance policies, loans secured by 401(k)s, etc., in which repayment may be obtained through extinguishing the asset; do not require consideration of a repayment for qualifying purposes. However, in such circumstances, the asset securing the loan may not be included as assets to close or otherwise considered as available to the borrower.

An independent third party must provide the borrowed funds. The seller, real estate agent or broker, lender, or other interested third party may not provide such funds. Unacceptable borrowed funds include signature loans, cash advances on credit cards, borrowing against household goods and furniture and other similar unsecured financing.

Sales Proceeds~
The net proceeds from an arms-length sale of a currently owned property may be used for the cash investment on a new house. A fully executed HUD-1 Settlement Statement must be provided as satisfactory evidence of the cash sales proceeds accruing to the borrower. If the property has not sold by the time of underwriting, loan approval must be conditioned upon verifying the actual proceeds received by the borrower. The lender must document both the actual sale and the sufficiency of the net proceeds required for settlement.

Sale of Personal Property~
If the borrower intends to sell personal property items (cars, recreational vehicles, stamps, coins, baseball card collections, etc.) to obtain funds required for closing, the borrower must provide a satisfactory estimate of their worth, in addition to conclusive evidence the items have been sold. The estimated worth of the items being sold may be in the form of published value estimates, such as those issued by automobile dealers, philatelic or numismatic associations, or a separate written appraisal by a qualified appraiser with no financial interest in the loan transaction. Only the lesser of this estimate of value or the actual sales price is considered as assets to close.

All is not lost however simply because you or your client does not have enough savings...stay tuned for info. on trade equity, 401(k), employers guarantee plans, sweat equity and so much more.

22 Ways to Get Funds to Close an FHA Loan

Silverstar Finance Inc. — Tue, 23 Sep 2008 22:45:05 -0500

FUNDS TO CLOSE for FHA

With DAPS (Down payment Assistance Programs like Nehemiah) going away and the increased requirement of 3.5% buyer contribution, I wanted to share with you the FHA guidelines of FUNDS TO CLOSE. ***Some of these FHA guidelines may have additional investor and industry restrictions so verification per loan is necessary.

So how is your client going to get the necessary funds to qualify for an FHA loan and close their loan on time? After all...they've been looking for months and months and now they finally found the right home, got their offer accepted and you're ready to help them move right on in.

Below are just 3 of the 22 Important Ways to know well ahead of the closing date and quite honestly, you should know these before you start looking for a home or helping a client look for a home. If your mortgage broker or lender does not know these restrictions and possibilites, it's time to look for someone who is informed and can help to make your transacitons smooth sailing from start to finish.

Earnest Money Deposit~
If the amount of the earnest money deposit exceeds 2 percent of the sales price or appears excessive based on the borrower's history of accumulating savings, the lender must verify with documentation the deposit amount and the source of funds. Satisfactory documentation includes a copy of the borrower's cancelled check. A certification from the deposit-holder acknowledging receipt of funds and separate evidence of the source of funds is also acceptable. Evidence of source of funds includes a verification of deposit or bank statement showing that at the time the deposit was made the average balance was sufficient to cover the amount of the earnest money deposit.

Savings and Checking Accounts~
A verification of deposit or VOD, along with the most recent bank statement, may be used to verify savings and checking accounts. If there is a large increase in an account, or the account was opened recently, the lender must obtain a credible explanation of the source of those funds.

Seller Contributions~
While FHA permits seller and other parties to make contributions of up to six percent of the sales price of a property toward a buyer's actual closing costs and financing concessions, this policy applies exclusively to the provision of mortgage financing. Other expenses paid on behalf of the borrower must result in a dollar-for-dollar reduction to the sales price (i.e., carpet allowance, etc). When someone other than a family member has paid off debts, the funds used to pay off the debt must be treated as an inducement to purchase and the sales price must be reduced by a dollar-for-dollar amount in calculating the maximum insurable mortgage. FHA deems the payment of consumer debt by third parties to be an inducement to purchase. Buyer must still have their required contribution (i.e., 3.5%) into the mortgage.

All is not lost however simply because you or your client does not have enough savings...stay tuned for info. on gift funds, collateralized loans, employers guarntee plans, sweat equity and so much more.

Homebuyer Down Payment Assistance Getting Eliminated - You'd Better Jump On it Quick

Silverstar Finance Inc. — Fri, 29 Aug 2008 11:37:58 -0500

be+DO=have

"My greatest point is my persistence. I never give up in a match. However down I am, I fight until the last ball."

~ Bjorn Borg, tennis player

Washington has been busy lately. In one of the most rapidly approved bills in memory, the Housing and Economic Recovery Act was passed into law, and could have significant implications on the housing and mortgage industry. The constant volatility in the market requires constant change and A LOT of persistence and perseverance. You can count on me to stay ahead of the game. And while there is a lot to share with you, I wanted to reach out to let you know a couple of things that could impact you or someone you know and care about right away.

The first thing that stands to impact many homebuyers is the elimination of what is known as seller down payment assistance for FHA loans. Seller down payment assistance is where a home seller contributes money to a down payment assistance company who in turn provides a legal grant to the homebuyer. This has helped over 900,000 families obtain homeownership since 2000.

However, as the legislation is written, this will be eliminated for homebuyers effective October 1. There is currently some discussion as to when the hard date will be in effect, as to whether someone who is in process of buying a home will need to have their loan application in process.

That said, if you or someone you know needs the ability to implement down payment assistance as a tool to buy a home, get on it quickly. The clock is ticking.

Another opportunity for you to get help with purchasing a home in California may be in the form of a grant. To read more, visit this website: First Time Home Buyer Grants in California

The other really interesting piece that I mentioned last week is that for first time homebuyers, they have a window to qualify for up to a $7,500 tax credit. The tax credit will be 10% of the purchase price of a home, up to a maximum of the full $7500 credit. The tax credit will have to be paid back over a period of 15 years…but Washington just provided first time homebuyers a 15-year interest free loan to help them buy a home! There are other qualifying factors here, but I will save them for anyone that would like to know more.

The bill is 789 pages long and you can expect that I will be passing along other pertinent information as to how it may impact you. Or if you prefer, pick up the phone and give me a call. There is a lot that is being said in the media and I want to make sure you get all the information that could help you save thousands of dollars.

If you would like a report discussing if ..... Now Is the Time to Buy?, you can download it from the link. Take a moment to read it and then pass onto your friends and family.

I Survived Real Estate 2008

Silverstar Finance Inc. — Tue, 26 Aug 2008 15:58:37 -0500

This past Saturday, August 23rd, I attended the event I Survived Real Estate 2008 at the Nixon Library. This event was for two purposes. The first to raise awareness and create solutions for the ailing Real Estate Industry and the second was to raise funds for the Susan Komen Foundation. Both purposes were accomplished with great success.

Several people who are well known in the Real Estate industry, city government officials, leading Economists, professors and real estate investors attended. The panelists were given the opportunity to talk about their thoughts and opinions of what has caused the real estate mess, what is currently happening to solve these problems and potential solutions for the industry. Later in the evening, the panelists debated about their position and then commented on solutions that Bruce Norris of The Norris Group recommended. To me this was the best part, to see different panelists going head to head.

A few of the solutions that were put on the table by Bruce Norris were well thought out and seemed to offer true potential vs. the many several laws that the fed is passing or attempting to pass which won't seem to have much of an impact on a broad basis.

One solution is to put a 5 year moratorium on the due on sale clause which will allow buyers to take over existing financing. Not only will this allow a buyer to qualify easier or in essence not qualify at all but more importantly, this will allow sellers to get out of their finanical trouble and reduce the sheer number of foreclosures on the books.
Another solution is to bring back the HUD 203(k) program to allow investors to help rehabilitate neighborhoods and reduce neighborhood blight.
Another is put an end to the 90 day required holding period for investors who buy properties, rehab and then sell them. This law currently requires investors to hold their properties for 90 days before they can sell to a buyer who is using FHA financing.

What I took away from the event is really the necessity to look forward and take action now. Vacancies across the nation are heading to 6% which in turn will cause huge areas with neighborhood blight. Keep in mind that blight doesn't just happen in the lower income neighborhoods, it happens everywhere. So would you rather live next door to a vacant home that is getting more and more run down with each passing day? Or, would you rather live next door to a property that purchased by an investor, fixed up and then sold to a family who is going to love and take care of their beautiful new home?

Real estate investors can be the solution to a looming problem but lets not wait until this event next year to get our voices heard. Take action by being invovled with groups like TNG and other investor related groups even if you aren't a real estate investor yourself. If you're a Realtor, Mortgage Consultant, Lender etc. this affects all of us and we can all make a difference.>/p>

I'm still truly looking forward to this event next year not only because it's a great way to get information and ideas flowing between a variety of industries that can make a difference but it's also an excellent learning tool and a place to meet a lot of fun and interesting people.

I know the event was recorded & will be available in the near future. Go and check out their website for to see reviews and additional resources. I Survived Real Estate 2008

The real estate training that TNG offers is outstanding and vital to being successful in today's real estate market. Don't miss out!!! The Norris Group

Many thanks to The Norris Group for their hard work and effort.

Janet & Larry French, Silverstar Finance ~ Gold Sponsors with Mary & Ken Johnston

$7500 Tax Credit Available to You....Want to Cash In?

Silverstar Finance Inc. — Tue, 26 Aug 2008 12:47:47 -0500

Get On The Path

"Opportunities multiply as they are seized." ~Sun Tzu, Military Strategist

First-time buyers and people who have not owned a home in the past three years will get a $7,500 tax credit if you purchase a home on or after April 9, 2008 or if you purchase one before July 1, 2009.

Income limitations are:

Married couples with incomes less than $150,000 qualify for the entire tax credit. The tax credit phases out for married couples with incomes between $150,000 and $170,000. Couples with incomes exceeding $170,000 do not qualify for the tax credit.
Singles with an income less than $75,000 qualify for the entire tax credit. The tax credit phases out for singles with incomes between $75,000 and $95,000. Singles with incomes exceeding $95,000 do not qualify for the tax credit.

The tax credit is really an interest-free loan from the government that must be paid back over fifteen years, in increments of $500 a year.

If you die, your heirs do not have to pay back the remaining balance. (a small consultation!)
If you sell your home before fifteen years have passed and your home's appreciation is less than the amount you have to pay back, the loan is forgiven.
If you turn your home into a rental or investment property, you must pay back the balance due.

Opportunity: For everyone who has been sitting on the sidelines getting prepared to purchase a property, now is your time to not only purchase a home that is on Sale but also have an extra tax advantage as well. In essence it's free money. ** It's also important to verify with your CPA or account that you will benefit from this tax credit, don't assume. =)

********************************************************************************************************************************

To learn more about How to Buy Real Estate Today - What is Different this Time Around? Spend 2 hours with us on Saturday, September 20th at 10am...well ok, 9:45 so that you can get a delicious bagel and coffee.

True, this real estate market Requires Different Strategies and Qualifications this time around, but that doesn't mean it's a bad time to buy real estate. Now is the time to Find out What the Opportunities are and How to Take Advantage of them.

Hopefully it won't be like the last time when you said, "I should have or wish I would have purchased a property last time. I could have had a home worth more than double what I bought it for!!!" Are you going to look back and say that again? No, of course not because you are coming to come to this event and find out the steps you need to take and the benefits that you stand to gain.

RSVP at http://SilverstarFinance.com/events

Even Alan Greenspan Thinks So

Silverstar Finance Inc. — Mon, 25 Aug 2008 16:27:36 -0500

Right now we are in a Different time…right? And like any rough time in our economy, being positive and truthful is necessary. Most of what you are hearing and seeing is negative and down right depressing. But I have to say, if you’ve been reading any of my blog entries [ come on, I know you have =) ], you will have noticed that there are a lot of positive things happening in the real estate market.

When was the last time that you could buy a home in Southern California at such a discount? And when was the last time you could buy cash flowing investment real estate? And think of how much lower your property taxes will be or could be? Like I've said, Better is Always Different.

Well Guess What??? The time is now, even Alan Greenspan agrees.

Alan Greenspan told the Wall Street Journal last week that we are witnessing a 100-year event. That could possibly mean that in his opinion our housing crisis surpasses that of the great depression of the 1930s. (Different)

“The truth is, this problem will not be fixed from the top down. It will only be fixed from the bottom up. Courageous positive individuals need to take action now to clear excessive inventory (one house at a time) before pricing will normalize.” (Better)

Even though the government is trying to implement new policies to help homeowners survive, the market turn around will ultimately come from homes being bought by people who are qualified to buy their first home and investors who are purchasing rental properties. Everyone needs a roof over their head so don’t think that real estate is a bad investment or it’s a bad time to buy.

True, this is a different (better) time to buy that and requires different strategies and qualifications. Knowing what it takes to buy a foreclosure or an auction properties based on experience, not based on what someone else is saying is important. Knowing the importance of financial security and how to help you develop a road map to manage your debt and cash flow is equally important. Silverstar has been helping our clients for years develop their blue print in order to achieve success. Change is good, working with someone who changes is even better.

Take advantage of the knowledge and information that is being offered whether to you. Whether you attend one of Silverstar’s classes or another outside event or you schedule a debt strategies consultation with me or one of your finanical consultants. Take the time and do it right. If you don’t, will you look back with hindsight and be mad that you didn’t? The cost is minimal and the returns are infinite!

Financial Road Map = Financial Success = Peace of Mind

Loan Modifications....What are they? Who do they apply to?

Silverstar Finance Inc. — Mon, 28 Jul 2008 19:48:33 -0500

With foreclosures steadily on the rise, one of the questions that has been surfacing is the possibility of homeowners simply walking away from their mortgage because they owe so much more than someone who just bought a foreclosure on the same block.

I've heard the term "buy & burn" used lately to describe someone who goes and purchases a new home that could even be in the same neighborhood at a cheaper price and then turn around and walk away from their current home and loan. The resulting default or foreclosure wont matter to them at this point because they've already closed escrow on a new less expensive home. I guess they just have to make sure they are set for a few years while their credit takes a huge hit.

Yes this is fraud and it is definitely NOT the right thing to do but people are doing it. I'm not sure if it is desperation or simply they don't feel obligated to stick to what they originally agreed on. Either way, I think people that are doing this will definitely get what's coming to them down the road and I don't know how they could sleep at night.

What happened to personal responsibility? I guess if these people were lending out their money, they'd be ok with someone sticking it to them as well?!! ha ha. It's just sad that so many people made really bad choices and now they are just dumping their problems onto everyone else across the board! Okay, Ok enough with my personal tirade....back to the point.

This morning I received an email questioning someone simply walking away from their home from a past referral. I'm going to paraphrase his email.

"The past 2 years has flown by and along my travels I was activated from the Naval Reserves and found my self in Kuwait for the last 10 months. To my surprise when I returned I was in shock ..."Like Every One Else" over the housing market and the price of gas ! WOW what a year can do. We purchased in Murrieta 12/15/06 for $478,000 and just last week the County assessor had us valued at $384,000... very modest considering that the county would like to keep our taxes instead of losing them. I love the location of our home and when we purchased we never intended to (get rich quick) ... It was long term. I am just concerned that when all the neighbors start to walk away from there homes.... because they are ... My justification for waiting out the market starts to waver. I have been reading all about the FED trying to help the home owners that are on the verge of foreclosing by helping them with promise notes or $$$ against what there homes are worth now to refinance into fixed rates. My question is they love to use the term "struggling home owners" does that mean the home owner that has decided not to pay there mortgage for months and are ready to walk away or does that mean they will take a consideration all homeowners that would like to better there way of life by renegotiating there home loans."

Back to personal responsibility. If you are a homeowner and you truly can't afford to make your new adjusted loan payments then a Loan Modification is what you should be looking into, NOT walking away from your commitment and obligation.

A Loan Modification is a negotiated change in the terms of a mortgage in order to meet a of homeowners current situation. A homeowner has to show TRUE finanical hardship and document their hardship as well. Your loan terms will be negotiated with your current lender to lower your interest rate, lower your payment, forgive past due balances and late fees and possibly even lower your principal balance.

Hardship has to be in the form of lost employment, military service, death of a spouse or co-borrower, failed business, job relocation, illness and divorce are a few of the reasons for hardship. In addition to submitting all of your monthly bill statements, you will need to write a hardship letter and document that actions that you have taken thus far to remedy your situation. Although this isn't necessarily Easy, it's the right way to go about improving your situation.

The cost of a Loan Mod can vary and I can only speak for my company but if we don't think someone qualifies for a modification after reviewing all of the necessary documents then fees will be refunded.

I'm sure we will be hearing a lot more about Loan Modifications over the next few months. I'm always open to questions so don't be shy.

Call on Your City to Ban Plastic Bags Too!

Silverstar Finance Inc. — Mon, 28 Jul 2008 12:02:17 -0500

For along time now, I've been bringing my own bags when I grocery shop. Whether I bring a canvas bag or old paper bags, the point is to recycle and quit using plastic.

Last week I saw the headlines....

L.A. City Council votes for ban on plastic shopping bags

The council plans to ban plastic carryout bags in the city's stores by 2010, unless the state imposes a 25-cent fee on those who request them.

~By David Zahniser,

Council members said they hope an impending ban would spur consumers to begin carrying canvas or other reusable bags, reducing the amount of plastic that washes into the city's storm drains and the ocean. "This is a major moment for our city, to bite the bullet and go with something that is more ecologically sensitive than what we've ever done before," said Councilman Bill Rosendahl,

I strongly encourage you to talk to your Chamber of Commerce and council members to get them moving in the same direction as LA City. Many of us are part of networking groups and members of the local chambers so it wont require us to go out of our way to simply bring up the conversation about why this is so important and how this can positively affect our cites and environment. And, as an added benefit, not only do you get to spend time networking with people in your community but you are creating a positive name for you and/or your company in your local community....just a little marketing on the side!

First, help take a step in the right direction by simply carrying a reusable bag to the market when you shop. Next, simply strike up a conversation with people in your local government / council to spark the ideas and get them thinking. These are two easy steps that don't require a lot of time but can make a BIG difference. Have a beautiful day!

Great Big Dreams Require Great Big Thoughts & Little Tiny Steps

Silverstar Finance Inc. — Thu, 10 Jul 2008 14:35:24 -0500

This quote is a perfect fit for what I talk about in my video today:

“The great thing in this world is not so much where you are, but in what direction you are moving.” And it’s completely up to you!! ~ Oliver Wendell Holmes

Great Big Dreams Require Great Big Thoughts & Little Tiny Steps from Janet French on Vimeo.

It’s really quite simple to enlist the help of a Trusted Advisor team. All it takes is one simple phone call to schedule a short 1-2 hours of your time to sit down with me and get your finances on track. From that point forward, all you need to do is keep committed, meet with us annually and let us handle the rest. Now you’re on your way to a balanced life!!

And if even if it’s not the time to refinance your loan, you may be thinking, “What on earth could a mortgage consultant do for a client that doesn’t need a loan? After all, the loan is closed…what else is there???”

Answer: A LOT, A LOT, A LOT! Let me give you just one example. Imagine if every single family that borrowed on a “sub-prime” or “prime” loan had met with their debt advisor in person to discuss their overall debt management plan? That discussion would involve:

* Taking a look at where you are today and where you want to go.
* Reviewing your original plan & your original commitments, if this is an annual review (ask me about that).
* Discussing if you need to make adjustments or you need a complete new strategy (and we’ll help you make it happen).
* Getting to look at your current credit report
* And most importantly, addressing all of your questions and concerns regarding your overall financial plan and your future loan adjustments.

It’s important for you to realize that a true and trusted advisor tells a client what they need to hear, not what they want to hear. Just imagine that your neighbor just went into foreclosure and now YOUR home value is lower. If your neighbor was given that type of valuable advice a year ago, how would YOUR situation be different today! I hope you’re getting what I’m saying now. A true mortgage and/or asset manager earns their income after a transaction is closed and ongoing into the future, not before or during. This housing market is precisely why it’s so very important.

Oh, by the way, several people have called me recently to tell me that their original broker / company has gone out of business. Remember, I’m happy to meet with anyone who wants to be supported by and committed to working with a trusted advisor even if I wasn’t the one that originated the loan.

Keep this in mind, a year from now what will you wish you started today?

How Do You Look at Your Mortgage?

Silverstar Finance Inc. — Tue, 08 Jul 2008 14:46:05 -0500

Like with anything else, simple advice is never appropriate in all circumstances. It all depends upon your particular situation. Today's personal finances are much more complex. A house and mortgage are not just a component of a proper financial strategy. You need to examine all of the other factors of your finances such as your assets, liquidity, tax situation, credit, and your credit availability.

Your mortgage is not "just" the loan on your home; it is an important piece of your overall financial picture. A better way to look at your mortgage is to examine it in the context of your entire portfolio. A piece of real estate is an asset to your portfolio. The mortgage on that piece of real estate determines how much of that asset is leveraged versus how much is tied up with real cash.

Sure, you might have some equity or not at this point but your payments are the same, your tax deductions may be less and you still have x amount in savings and are struggling to put enough money away for retirement. Ask yourself, has much changed in your life since your property value had increased so dramatically over the previous years or you refinanced last time to pay off high interest credit cards and are they still gone?

How long would you be able to survive if you lost 100% of your "job" income right here, right now? 1 month? 2 months? 3 months if you're lucky? Unfortunately, home equity doesn't seem so great now, does it? Bet you wish you had some investments working for you, right or a nice cushion of liquid cash available to use as needed?

Right now is the best time to start planning. Ask your clients have they been meaning to buy real estate as part of their retirement plan or are they working with a good finanical team who is going to give them sound advice that works in the long run and not a quick fix?

Planning isn't always the most fun thing to do but if your clients just lost their income source or their mortgage payments are starting to adjust and they haven't done a plan, it may be too late to save their home and now they have to sell it or foreclose.

It is important to be a part of the solution and not simply bury our head and hope things work out, especially in today's economy. From my experience, most people want help but they simply need some encouragement to do so.

Wouldn't it feel great to know that YOU are the reason your client gets to have a fabulous retirement or the reason their children get to go to college??? Be the foundation of their finanical team, help them change their perspective and see a new light at the end of a long and often dark tunnel!!

Turning Your Obstacles Into Opportunties

Silverstar Finance Inc. — Mon, 23 Jun 2008 19:01:31 -0500

As we enter the 2nd half of 2008 ALREADY!!!! I know can you believe how fast time is flying???

Take a moment to reflect and think about a couple of questions.

Are you in touch with the goals you set out to accomplish at the beginning of the year or period for that matter?

Do you want to buy a property?

Are your credit scores good enough?

Do you have enough money for a down payment?

Are you saving enough money to retire on happily?

Do you want to increase your business returns and client satisfaction?

Has the negativity of the media gotten you down? Do you feel like you have already missed a chance in a lifetime?

Successful people buy stock in the themselves and keep their eye open for chances of opportunity no matter what the economy is doing. No matter what the ups and downs of the real estate market are.

Having an attitude of "I can make things happen independent of what the crowd is doing or independent of outside influences" is important to reaching your goals.

Focus on what you can control which is what is happening right now. There is so much that we can't and what would be the benefit of that? Change your obstacles into opportunities...its ALL Choice!

So now that you've thought about it for a minute or two, what is it that you've been putting off?

Buying a home or investment property?

Improving your credit scores?

Finding out why a reverse mortgage is an expensive alternative?

What it takes to buy a foreclosure property?

What systems you need to implement to improve your business?

My advice is to get some guidance or coaching. Enroll someone to help keep you accountable. Think about it this way, would you rather put off going to the dentist only to find out that you have a mouth full of cavities and fuzzy yellow teeth? OUCH and YUK! Or would it be far less painful and easier to go twice a year for a simply cleaning?

When you make investments in yourself, you'll thrive. And just imagine the incredible impact you will have on your life and those lives that you touch. And truly the bottom line is do you want to avoid "Fuzzy-Yellow, Financial "Teeth"?

Here is a video version of this email if you choose to check it out. Turning Your Obstacles Into Opportunities

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How Do You Look at Your Mortgage?

Turning Your Obstacles Into Opportunties

"A good goal is like a strenuous exercise- it makes you stretch."
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