SAMANA : THE DR'S RISING STAR, PT. 3 of 3 By Guitze M. Messina
In our previous two articles we have taken a tour through the history of Samana which led us to its cultural mix. We also saw some of its spectacular beauty from waterfalls to caves and from pond-like beaches to secluded islands.
Lastly, we talked about some of the wonderful luxury resorts that many Dominican investors have developed along some of the best international luxury brands.
In this, our last article of our series on Samana, we will take a closer look at the last of the small luxury resorts developed by Dominican investors and later we will take a closer look at the future of luxury in Samana, the new developments that will be started and what we see as opportunities that remain open in the luxury market in the most beautiful peninsula in the Caribbean, Samana.
Altamar Estillero
I have mentioned that Samana has some pond-like beaches with lush vegetation, and perhaps the image in mind is best represented by the beach in Altamar Estillero (www.altamarterr.com. The caress of the breeze in your body gives you a natural therapy of peace.
This is a small development that wants to take full advantage of a perfect location in Las Terrenas, and without being pretentious it just lets nature fill every sense of the visitor to its fullest. With a modern architecture and just meters away from the beach this is the perfect investment for those who just want natural simplicity without giving up the comfort and luxury that we deserve today.
The closeness to all of the advantages in Las Terrenas, helps the visitor enjoy many amenities that do not have to be included in the development. This reduces noise, traffic and provides all the peace and quiet that is the most important element in this small luxury development. I hope that all of the readers take a few minutes to look the web site and it will give you a quick idea about what Samana is all about, enjoy!
In the cards, Samana also has other luxury projects that will be started in the next few months and I would like to cover the ones that from our conversations with the developers will start construction shortly:
Angsana Samana Bay
Tourism & Leisure Consulting Magazine says that "We are certain that Angsana Samana Bay will help the country position itself as one of the high-quality destinations of the Caribbean." The Banyan Tree and Angsana brands are each known around the world for luxury and top of the line installations. The master plan for their Samana resort has it all, great marina design, restaurants, rental pool, a calm green beach with superb views from the apartments and villas and, most of all, attention to every detail, from architecture to the linens of each bed, everything is planned to be the best.
I invite all of our readers to take the time to see the website www.angsanasamanabay.com and if you are lucky enough to visit the area and see the location for yourself, you will have no doubt that paradise is looking at you through your own eyes. In a recent conversation with a sales executive from Nexus DR, the local firm that is handling the project; they expect to launch their pre-sales by January 2010 at the latest.
Terrazas de Coson
Another project that is scheduled to start in the next three months is Terrazas de Coson, www.terrazasdecoson.com - a project that has taken the environment into account at every step of their planning process. I had the privilege to speak to the engineer of the project and he was kind enough to explain the detail and care with which the owners are respecting the environment of the location.
The modern minimalistic design shows this respect for nature and at the same time tries to submerge the guest in it with open spaces, natural materials, and a low density design that will allow the owner to feel "one" with nature. The development will also have a boutique hotel and if all of these amenities were not enough, then the location will provide the rest, at just 10 minutes from Las Terrenas, which will allow one to find many more restaurants, delicatessens and the like, while enjoying the great scenery of the mountains and the beaches of Coson.
Looking back at the success to date of the developments that we have listed, we have seen a clear trend that in these tough economic times it has been the Dominican developers who saw beyond the current situation and invested despite the difficult economic climate.
It is clear that market conditions seem to favor these investments in Samana, and with the financial turmoil perhaps a bit more under control, foreign developers will soon be starting their postponed investments in the Samana area, and others will surely dive into one of the best and most lucrative destinations in the world, due to the large spread between construction costs versus sale prices.
A secure gated community that offers luxurious beachfront condominiums, Infiniti Blu stylishly incorporates living space with lush tropical gardens and a charming semi-private beach.
The first class ocean front development of 20,000 square meters (approximately 5 acres) combines spectacular views with a hi tech sophisticated infrastructure contained within European standard architectural detail.
The spacious Caribbean condos range from 159m2 (1711ft2) to 355m2 (3821ft2). Each one is carefully positioned so there is no need to cross a street while you walk through the tropical gardens to either of the two pools or to the beach, and is just a short five minute walk to town.
We feel that a luxury golf resort has enormous possibilities in Samana since none of the developments that are under construction have taken golf into consideration. The reality is that the DR has become the golf capital of the Caribbean and golf is the leisure sport "par excellence" so it is clear that Samana needs a top development that includes golf and a great brand. 6-star and Beyond
The DR has some great luxury developments but none has a 6 star hotel with villas and condos, that possibility is also a great opportunity that must be considered.
Unique Concepts and Brands
The DR has some of the most respected and important luxury brands included in its developments, but there is tremendous opportunities for a brand that is very "rare or perhaps not found in the American Continent" that alone has tremendous marketing power. The other possibility is a unique concept or design, something that you cannot find anywhere in the world. Samana is the perfect venue for such differentiation strategy; it just has to start as an idea.....
Conclusion
The future looks bright for Samana and for the Dominican Republic; in a year where tourism has declined in most countries we have received the same amount of visitors than in 2008 a rare exception.
Dominican investors have started a trend that now international developers are starting to follow, it just makes great business sense to invest where growth never stops. The reward has mostly come to the local developers that started the trend, but with better and more luxurious brands coming in, the international players are also going to have a good share of the profits.
The big winner is the typical buyer of luxury or retirement real estate; that looks for a piece of paradise, with zero property taxes, great ambiance, and a possibility to live beyond the simple "island life". The country is also benefiting since so many retirees are finding that they can make a contribution beyond "pure enjoyment" and they have started a new venture that they love in a country that grew in their hearts.
SAMANA HAS GREAT UNTAPPED POTENTIAL FOR FOREIGN INVESTORS AND DEVELOPERS ALIKE.
With this brief tour of our favorite destination on the island of Hispaniola, we have tried to show you what the Dominican Republic is doing to change its focus into Luxury tourism projects and development. We have noted how the Dominican developers that believed in the country have done well and continue to see great opportunities in the country which has maintained the highest growth rate in the Americas. Samana has great untapped potential for foreign investors and developers alike. For investors a place that has a bit of everything and for developers a country with high profit potential due to the large spread of cost of construction versus sale prices, perhaps a unique opportunity in a very competitive world.
We hope that you have enjoyed our stories of the different places, the history and the present of this wonderful land, if you have, then we have done our job, now it is your turn to come and "experience" for yourself what words will never be able to describe! See you then!
Author : Guitze M. Messina. Born in the Dominican Republic, Guitze is an industrial engineer by vocation and has worked in Puerto Rico and the Dominican Republic in that capacity. In 1996 Mr. Messina became a management consultant for various Dominican companies. In 2005 he joined Diesco Group, a new manufacturing facility that produces and markets plastics for the construction industry. These products save time, energy and money for builders and clients of large buildings and hotels. His work in this area has given Guitze the first-hand opportunity to work with the exploding luxury development real estate industry in the Dominican Republic.
It must be Fall. This week in Southwest Florida we saw our first temperature reading in five months that begins with a "6". That is not to brag, just a bit of reality of how hot we have had it since May. Speaking of "hot", the stock market has a lot of people excited. The Dow has ballooned 50% from its 2009 lows. Does that mean our recession is over? HECK NO! One has nothing to do with the other. The economy is driven by jobs and interest rates and credit. The stock market is driven by pure human emotion. Another 500,000+ of our fellow Americans lost their jobs last month. That was applauded by some politicians as a good sign since it was down from over 600,000 from previous months. A more accurate assessment is that we are "less bad". When you see the kinds of statistical games our government plays with employment data, you'll see just how silly it is to hang a hat on the figures as a sign that the worst is over.
The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage Market: Rates Drop and New Obama Rules Help More Homeowners Refinance
Interest rates remain low. 30 year fixed rates are hovering around 5.00%. While the availability of certain kinds of credit might still make getting a loan difficult, the price of that money has rarely been better. Borrowers have noticed this, too, and with the weeks-long gentle decline in rates has come increasing purchase and refinance activity. The Mortgage Bankers Association reported more than a 13% gain in purchase applications and an 18% gain for refis.
Existing homeowners that are upside down on their mortgage have new relief thanks to the Obama administration. Homeowners that owe 25% more than their home is worth may be eligible for refinancing assistance through the expanded Housing Rescue Program. For example, if your property is worth $200,000 but you owe $250,000 or less on your first mortgage, you may be eligible. Visit the Making Home Affordable website for more information about eligibility.
Personal Credit: Free Identity Score Service - Try It !
Identity Theft is the number one crime in the United States for the ninth year in a row. Even your author was victim to a perpetrator earlier this year. It can happen to anyone, anytime. My ID Score is a free service which provides you with a quick assessment of your risk profile. It only takes a minute to complete and there is some valuable information and insights available on their web site. Make note that in the fine print the owners of this service admit that they "may" market some credit related offers to you in the future. However, they promise not to sell your information and they also provide an email address to which you can send an opt-out request so that you do not receive marketing offers. Give it a try!
Several credit monitoring services are available. Check with your bank. Free Credit Reports 360 is another source and if you would like a free seven day trial, please contact me and I'll help you get set-up.
Get a detailed credit analysis, including all three credit scores, and personalized action plan and consultation for only $99 by contacting me.
Economy & Financial Insights: Significant Declines Continue In Consumer Debt
In the past couple of months, consumer debt has declined $15.5 billion and $21.6 billion respectively. Our collective frugality might be bad news for retail stores and restaurants, but American consumers are spending less and banks have cut down credit card lines too. Despite this, our country's debt bubble continues to balloon. In a futile attempt to stimulate our economy, the government is borrowing money faster than the printing machines can churn out the greenbacks. At some point down the road taxpayers will feel the punishment of these government actions (higher taxes). The Lesson here is that the more we can get our personal finances in order now, the better we will be able to absorb the tax increases and benefit cuts that will come later.
Question of the Month: The Lending Environment Seems To Be Getting Worse. Do You Agree?
Despite government efforts to make banks flush with cash to lend, the underwriting standards remain very tight. Loan applications that look good on paper are still slow to navigate their way to the closing table. Lenders are increasing down payment requirements on certain types of property (example: condos). Intense scrutiny of income, employment and appraisals makes it challenging for a lot of people to get a loan - and the low consumer confidence in our country keeps some people from considering the pursuit of a mortgage. Even private lenders, (yes, the Tony Soprano types) are very tight with their money despite being able to charge very expensive rates and fees to compensate for their risk. It is not all bad news however. Certain families have been able to take advantage of deeply discounted homes to become first-time homebuyers. These folks did the right thing over the last ten or more years. They saved their money. They established great credit. Their rewards for that discipline are available now.
Giving Back: Supporting Our Communities - Nashville Artists Donating Their Music
Do you like Nashville music? The rich history and tradition of the music industry in Nashville continues today. Music is a powerful medium which inspires, heals, educates and sparks all kinds of emotion and reaction from listeners. Check out over 40 inspirational tunes donated by a growing list of singer-songwriters in the free online jukebox at Michelle's Angels. These artists have written, recorded and/or performed with world class acts including Brooks and Dunn, Randy Travis and Faith Hill. Enjoy.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Have a safe Halloween. Not my favorite holiday but at least there will be extra chocolate in the house. Off to New York City the week of November 2 for a tradeshow so all you tri-staters can drop me a line if you want to meet up.
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other loan products. Through its network of partners, National Web Leads delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for lenders and internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
Summer fun is over and with school in full swing and the hectic holiday season just around the corner, these next few weeks are ideal for taking advantage of weekends. In these uncertain economic times, people are embracing the day-tripper mentality. Affordable, closer to home outings (to state and national parks for example) have replaced the extravagant beachfront resort rentals. Lay away plans and Christmas Club accounts are making a comeback at the stores as people keep their credit cards in their wallet. We are being smarter with our money but unless we teach the youth these valuable money and credit lessons, history is bound to be repeated. On to the news....
The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage Market: $8,000 Tax Credit Expiration Fast Approaching / Revised TILA Law
The first-time homebuyer tax credit program that provides up to $8,000 for new home purchases is expiring November 30, 2009. This leaves about eleven weeks for homebuyers to find, contract and close on a new home. An estimated 1.4 million buyers have already filed for the credit, with that number expected to grow by the time tax returns are due next April. For more information about this program check out the July 2009 Mortgage by Randy newsletter.
In other news, revisions to the Federal Truth in lending Act (TILA) went into effect July 30, 2009. Two significant consumer protections have been put in place:
1) Mortgage lenders must provide loan applicants a good faith estimate of loan costs within three business days of receiving a loan application
2) Mortgage lenders must provide a revised good faith estimate of loan costs if the Annual Percentage Rate (APR) changes outside a small tolerance range and wait an additional three business days before closing the loan to allow the customer time to review and digest the changes.
Although the intent of these rules is to help protect consumers the rules can also have the opposite effect of causing great amounts of stress. For example, if a sales contract has a closing date of September 29, but September 25 a fee for the required title insurance comes in higher than originally estimated thereby causing the loan APR to rise, the revised law mandates that the customer be issued new disclosures of costs and a three business day freeze is place on the loan transaction. Guess what? You're not closing September 29. Be aware of these rules and be prepared to work with them for better, for worse.
Personal Credit: Online Credit Score Simulators Help Consumers Make Good Decisions
There are several myths that continue to perpetuate among consumers about their credit scores. For example, some people refrain from pulling their own credit report thinking that it may cause their score to decline. Not true. Another myth that many people believe is that when they make good on a derogatory account that their credit score is automatically fixed. Not true.
Derogatory Accounts
Just because a negative account is paid or satisfied, it does not get removed from the credit file. It will be shown as paid, zero balance, but will remain in the history for 7 years from delinquency. A credit score is calculated using all of the information in a history, however, the most recent 2 years of activity has the heaviest weighting in the score formula. If you have collection accounts or late payments that are several years old, they have less of an impact on your score as time passes AS LONG AS the history after the date of those late payments has been clean.
Credit Score Simulator
Since the mathematical formulas for calculating credit scores are a secret, Equifax offers an interactive score simulator that predicts your FICO® score based on certain actions you could take. Mortgage by Randy readers can contact me for a Free 30 Day Trial which includes the score simulator as well as:
-Unlimited Equifax Credit Reports
-FREE 3-Bureau Credit Report
-FREE FICO® Score
-FREE Score Power Report - an explanation of what your score means and how it compares to national averages.
-Up to $1,000,000 identity theft insurance
Do not arbitrarily close out accounts without advice. This is not a credit rebuilding strategy. Regardless of any negative history, credit scores can improve over time as long as on-time payments are always made. Get a detailed credit analysis, including all three credit scores, and personalized action plan and consultation for only $99 by contacting me.
Economy & Financial Insights: Unsustainable Age Of Extravagance Fades Away
Recent economic studies confirm that Americans continue to be conservative with their spending. Purchase of non-essential items continues to drop. In addition, credit card balances are trickling downward. The age of extravagance we once knew that included regular trips to the day spa, purchases of fancy new appliances and electronics, and weekend outings to professional sports events, is behind us. Our new state of mind is that of basics only. With less credit available, pressure on wages and jobs, and the threat of higher taxes to pay for health care, Americans are slowly lowering their debt levels, but there is a long way to go. To compound things, the economic situations in other parts of the world, especially Europe, are much more bleak than in the U.S. Our collective economies are interlinked and so we must prepare for more repercussions down the road. Lesson: do not get comfortable
Question of the Month: How Long Does It Take To Close On A Home Purchase & What Happens?
There are several things to be aware in terms of timing BEFORE you sign a sales contract to purchase a home. Contracts stipulate the number of days that a buyer has to act upon various steps in the process. For example, one of the first things a buyer must do is arrange for a thorough home inspection. This will give the buyer peace of mind that there are no major issues with the home that would require repair and/or reduction in the sales price. Second, the sales contract will define the number of days the buyer has to provide proof of a loan commitment from a lender. Finally, the sales contract provides a closing date. Lenders have laid off a lot of staff and as a result are moving loan applications through their pipelines slowly. In addition, lenders are being super thorough with checking and double checking all aspects of a mortgage application like income and employment verification and appraisals. Give yourself 10-12 weeks between contract date to closing to have enough cushion in case some challenges pop up.
Giving Back: Supporting Our Communities - How To Protect Yourself: Charitable Solicitations
Everyone receives countless solicitations by mail and telephone asking for donations to what seem like worthy causes. The problem is how to distinguish between the legitimate charitable cause and the scam. You may want to contact the National Charities Information Bureau at (212) 929-6300, as well as other state and local consumer agencies, to determine if the charity you are donating to has any outstanding complaint. Copycat organizations may use names similar to a well-known charity in order to confuse you. Before you donate, make sure the charity to which you are giving is the charity you think it is.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Fall is here and we are ready for baseball playoffs and the Food and Wine Festival at Disney.
Randy
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other loan products. Through its network of partners, National Web Leads delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for lenders and internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
A month full of travel has delayed the release of this newsletter and it was a great feeling for my head to hit my own pillow last night. Back to School season is upon us. Let's use this as a reminder that kids need to learn about money, credit and loans early on in life so they are well prepared to make good decisions in the future. There are resources available to parents and teachers to help with these subjects and you can always contact me for advice. On to the news....
The current newsletter and all prior newsletters are archived at the MortgageByRandy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage Market: Retail Holds Steady While Commercial/Small Business Needs More Options
Little has changed in the retail mortgage market since last report. Rates have held steady and well qualified borrowers are having success refinancing or purchasing. Less than perfect loan scenarios involving condos, credit blemishes or small down payments are still a challenge in a lot of markets.
Small businesses are starving for more lending options. Recent reports indicate that the new SBA loans are not working due to restrictions about use of funds as well as the maximum loan sizes. One solution that small businesses can consider is private lending. Private lending bypasses banks and opens the door to small loan amounts. Online services like Prosper provide a convenient marketplace where borrowers and private lenders can "meet". The lenders are people who are willing to take a chance on other people.
For example, if a small business owner has $12,000 in credit card debt and is paying 18% interest, they can post their scenario on Prosper and offer to pay a private lender 11% for a fixed amount of time. This is a win-win for both sides. The business owner reduces their interest expense and the lender earns a better rate of return on their money than if it was invested in a savings account.
There are several other lending services available besides Prosper. For more information on how the process works, including collection of defaulted loans, how credit scores are used and how interest rates are determined, contact me.
Personal Credit: Do Foreclosures And Short Sales Have Different Impacts On A Credit Score?
The impact of foreclosures on credit scores is a recurring question we hear and there is conflicting information published on the Internet. First American Credco, a credit reporting agency recently published a definitive summary of their findings. The biggest myth that the report resolved was that a short sale would have a lesser negative impact on a credit score than a foreclosure. Whereas in theory this may make sense, the reality of a short sale situation makes it likely to be just as bad as a foreclosure.
In most cases, a short sale will also entail a public record, like a legal action by the lender against the borrower or a special code called MOP8 (method of payment) attached to the short sale tradeline. Both of these items would make the short sale have a similar impact on the credit score as a foreclosure. Also, if a homeowner is in default on their mortgage, chances are that they also have late payments on other accounts like credit cards, so the score would reflect all of the data, not just a single item.
Although a specific point value cannot be assigned to a foreclosure or short sale, it is safe to assume that a credit score will drop anywhere from 100-300 points depending upon the other factors considered. If a foreclosure is the only blemish amidst a long history of perfect credit, then the drop will be less. If the short sale is just another in a series of late payments on other accounts over the years, the drop will be more severe. Get a detailed credit analysis, including all three credit scores, and personalized action plan and consultation for only $99 by contacting me.
Economy & Financial Insights: More Bank Funerals Provide Reality Checks
The stock market rally which has pushed the DJIA north of 9,000 recently has caused quite the stir in the media and provided hope of an economic recovery. Unfortunately, this news is a false positive. Stock market fluctuations are not predictors of what is really happening in the economy.
The banking industry is still shaking out the weak players. On Friday, BB&T took control of Colonial BancGroup Inc., Alabama's third-largest state-chartered bank, after it was seized by regulators. Colonial's demise was the largest bank failure in Alabama history. It is the sixth-largest bank to fail in the United States and the largest of 74 U.S. banks to fail this year. Read that again....74 banks have failed just this year.
In addition, Taylor, Bean & Whitaker, the 3rd largest FHA mortgage lender in the U.S. and 12th largest overall collapsed August 8, putting almost 1,000 people out of work in the blink of an eye. It placed loans written by community banks and retail mortgage brokers on the secondary market. Unemployment has slowed from the record levels but that's a tough positive spin to tell the almost 600,000 people that are still losing their jobs each month.
Although the national panic button may have been set aside for the moment, it is still within arm's reach. Consumers should continue their pattern of reducing debt, building their liquid savings and avoiding risky investments - we have traveled far through this recession but have quite a bit further until we are out of the woods.
Question of the Month: What Is The Tax Credit Available On New Home Purchase?
Last month's article on the first time homebuyer tax credit contained a math error, but our loyal readers were all over it. The program that has been implemented rewards first-time homebuyers with a tax credit of 10% of the purchase price, up to $8,000. If you purchase a home for $250,000, then your tax credit would be $8,000 (we published $2,500 in error last month). Thanks go out to several subscribers that contacted me about the mistake.
Giving Back: Supporting Our Communities - Angel Artist of The Summer Announced
Nashville singer/songwriter Kim Parent has been chosen as the Summer 2009 Michelle's Angels Foundation Featured Angel Artist. In the studio, Kim's harmonies have graced recordings by Faith Hill, Tim McGraw, Jo Dee Messina, Reba Mc Entire, Jessica Andrews, Billy Ray Cyrus, Kenny Rogers, Phil Vasser, and many others. In concert, she has performed with Martina McBride, Rodney Crowell, Lynne Anderson and Tanya Tucker. For the past five years, she has been touring with Brooks and Dunn. Learn more about this gifted supporter of Michelle's Angels and hear her music in the online jukebox.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Home sweet home.
Randy
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other loan products. Through its network of partners, National Web Leads delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for lenders and internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
As we enter the "dog days of summer" our thoughts are on family outings and reunions, fishing trips, lakeside campfires and the beach. Personally, I am not participating in any of those fun things, but I hear about them through my "grapevine". Collectively, we are still saving our pennies, lowering our credit card spending and moving forward cautiously. As troubled as our own economy is reported to be, let's count our blessings that we do not face as tough a challenge as so many other countries. Debt is a much bigger problem in other countries compared to the US and inevitably there will be consequences to pay for that....the question is, how will the issues in these other countries impact our attempt at recovery here at home? On to the news....
The current newsletter and all prior newsletters are archived at the MortgageByRandy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage Market: First-Time Homebuyers Have 8,000 Reasons To Jump In To Real Estate
A lot of government programs have been rolled out in the past 12 months in an attempt to stimulate the economy and help rescue the real estate market. One good program that has been implemented rewards first-time homebuyers with a tax credit of 10% of the purchase price, up to $8,000. A tax credit is much more valuable than a tax deduction because it reduces the amount of taxes you owe dollar for dollar. If you purchase a home for $250,000, then your tax credit would be $2,500.
You qualify as a first-time homebuyer if you have not owned real estate property three years prior to the purchase of a primary residence. There is a broad definition of primary residence, but it must be a residence you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence.
To qualify for this tax credit the home purchase must happen between January 1, 2009 and December 1, 2009. The current combination of lower home prices and lower interest rates makes for an amazing opportunity to buy real estate. Add to that this $8,000 gift from the government, and renting a home just doesn't make much sense in many cases.
Personal Credit: Divorce Is Messy Enough - Manage Your Credit Correctly During the Unwind
Unfortunately, divorce rates are not improving in the United States. Judges and attorneys are keeping busy dividing up the assets in a marital estate. When a judge issues a ruling which documents who gets what, divorced couples are often in a hurry to embark on the new phase in their life. However, what some people do not realize is that despite what a judge declares, it does not get reflected in the credit reports.
For example, a judge may declare that an automobile belongs to the wife. If the loan for that car was done in both husband and wife, it will remain on both of their credit reports even though they are divorced. If the wife misses car payments, it will harm the ex-husband's credit even though he has nothing to do with that asset per the judge's decision.
To overcome these risks, divorcing couples must take responsibility to close all joint creditor accounts as soon as possible and get new credit established in their individual names. This includes credit cards, department store cards and any type of loan. In addition, I recommend that divorced couples monitor their credit reports more closely than normal and even consider registering for real-time credit monitoring service. That way, if any unintended fall out happens, they will be alerted to changes in their credit in real-time via email or text message.
Economy & Financial Insights: More Legislation Enacted To Curb Foreclosures
HOPE For Homeowners is a federal program launched in the final months of George W. Bush's term. It was trumpeted as a solution to save as many as 400,000 American families from losing their home. In fact, the program attracted about 50 (that's not a typo) applicants. The qualifications were just too tight.
In May, President Obama signed new legislation which bolsters HOPE For Homeowners and allows more people to qualify for help in getting a loan modified. The overriding philosophy behind this plan is that loans be based on a family's ability to repay the mortgage. Qualifications include:
-Loan must have originated on or before January 1, 2008;
-Owner cannot afford their current loan (maybe due to job loss for example);
-They must have made a minimum of six full payments on their existing first mortgage and did not intentionally miss mortgage payments;
-They do not own a second home;
-Their mortgage debt-to-income must be at least 31 percent;
-They did not knowingly or willfully provide false information to obtain the existing mortgage;
-Homeowners must agree to share both the equity created at the beginning of their new HOPE For Homeowners mortgage and any future appreciation in the value of their home.
Question of the Month: I Have Good Credit & Downpayment Money and Bank Still Said "No"
As far as the pendulum swung a few years ago to loosen the availability of credit to almost anyone, we are now seeing the exact opposite effect. Banks are turning good borrowers away strictly out of fear and overreaction of making another mistake. Applicants with high credit scores are being turned down for the slightest of reasons. Other borrowers who have enough liquid cash to buy a property outright are also being turned away.
The solution to this challenge can sometimes be found using private lenders or what is also called "hard money" lenders. There are pros and cons to this type of lending. The positives include fast-track applications with minimal paperwork, availability of smaller loan amounts (as little as $10 thousand), and common sense decisions. On the other hand, this type of financing is expensive. Rates are double-digit and fees are high. For certain borrowers, it is a good solution. Contact me for more information.
Giving Back: Supporting Our Communities - STEM Program Will Inspire Kids
STEM stands for science, technology, engineering and mathematics. Although the term has been around for many years, it has become a popular buzzword lately. Our country has a need to graduate more kids that pursue careers in these fields. Many higher paying jobs happen to be in these fields. In order to excite kids about these subject areas, it requires exposure at a young age, even first grade.
STEM runs a unique program that builds partnerships between government, schools, universities and corporations. It takes pressure off our teachers and delivers measurable results at a low cost. To learn more about STEM or to become a volunteer, give me a call at 239-851-6738.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Traveling to Nashville tonight for the annual Michelle's Angels Tribute Concert! Then to Orlando at the end of July before heading north to New York in early August for a family visit, my high school reunion and a tradeshow in Manhattan. Keep those loan scenarios and questions coming in !
Randy
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other loan products. Through its network of partners, National Web Leads delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for lenders and internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
Mortgage interest rates surged in the last 3 weeks (about 60 basis points) so refinances are slowing. Rates are still very low in historical terms so purchase money mortgage volume is steady. The Federal Reserve has engineered this rate environment dating back to their fourth quarter 2008 tactics so there is no worry about rates suddenly ballooning. A no point 30 year fixed mortgage costs 5.80% on average as of June 12. On to the news....
The current newsletter and all prior newsletters are archived at the MortgageByRandy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage Market: Politicians Can Do Some Good! Free Loan Modifications
The loan modification business is a scary place. There are both legitimate and unscrupulous companies operating which advertise their services to help people get their mortgages modified by the lender. Senator Mel Martinez (R) from Florida recently sent a newsletter with this story about a woman his office helped. If all it takes is a phone call to your senator's office, then the loan mod companies better watch out! This proves that people need not pay thousands of dollars to "specialists" to get modifications done.
LOAN MODIFICATION SUCCESS STORY WITHOUT USING A LOAN MOD COMPANY
Ms. Taylor was recently laid off and could no longer afford to make her mortgage payments. She submitted a hardship letter to her mortgage company asking for a reduction in her monthly mortgage payment. When she did not receive a timely response from her lender, Ms. Taylor contacted the Office of Senator Martinez for assistance.
A caseworker contacted the Office of Thrift Supervision, which oversees Ms. Taylor's lender. A representative from the Office of Thrift Supervision asked the lender to check on the status of Ms. Taylor's request. Following the request, the lender offered Ms. Taylor a forbearance plan to allow her time to find employment before her payments were restarted.
Share this story with anyone you know that is struggling with their mortgage payment due to job loss, unexpected medical issues or a death in the family...or any other legitimate reason.
Personal Credit: What If Your Credit Report Is Wrong?
You started monitoring your credit report more closely - great! Now what to do if incorrect information is found on it? The process is simple, but requires a small investment of time and follow-up and some organized record keeping. Credit bureaus must investigate any item that you claim is incorrect.
To initiate the process of correcting inaccurate information, compose a letter (contact me for a template) explaining exactly what is inaccurate and mail the letter (return receipt requested) to each credit bureau that the information is wrong on. If your letter involves information supplied by a creditor, the credit bureau will mail their own letter to the creditor to validate the information and the creditor has 10 days to respond. The credit bureau may grant an extension of this 10 day period upon request by the creditor up to 30 days. If the information is indeed incorrect the credit bureau must correct or delete the information within 30 days. You may request that the credit bureau send corrected reports to creditors who have received reports in the last six months or any employer who had received a credit report during the past two years.
Economy & Financial Insights: Obama Signs Credit Card Regulation - Will It Help or Hurt?
Commerce Department reported last week that the personal savings rate of American households in April rose to 5.7%, continuing an upward trend that Mortgage by Randy first reported in October 2008. People are using those extra dollars in their paycheck to pay down debt and create rainy day funds. In fact, the Wall Street Journal reported April 30 that Visa said total dollar purchases made using its debit cards surpassed credit-card volume for the first time in the last quarter of 2008. The growth of credit card use has finally come to a halt.
In a bid to aid consumers hit hard by the recession, lawmakers submitted a bill subsequently signed into law by President Obama May 22. The legislation stops retroactive rate increases, requires companies to post credit-card agreements online, ends the practice of shifting payment dates, and requires statements to be mailed 21 days before a payment is due. NOTE: this law goes into effect in February 2010 so the banks have plenty of time to play by the old rules and squeeze consumers for all they can.
Although the provisions of this law are intended to help protect consumers, there are some potentially negative consequences to be prepared for. First, if you are a consumer that pays the full credit card balance each month and takes advantage of cash-back or airline rewards, there is a chance that your bank will impose an annual fee next year to make-up for the losses they incur from this new law. Some rewards programs may be pared back with higher redemption rates and caps. Third, fewer promotional rates may be available.
Question of the Month: How Long Will Information Stay On My Credit Report?
The answers to this question are governed by the federal Fair Credit Reporting Act (FCRA). Positive information may stay on indefinitely, but generally is removed after ten years. Accurate negative information like late payments or collection accounts may remain on your credit report up to seven years and MUST be deleted at that point. Bankruptcies and unpaid tax liens may remain on your report for up to ten years. Judgements can remain until the record is satisfied. Keep in mind that although negative information may be on the report, the older it gets the less impact it has on the score, especially once the negative items become greater than two years old.
Giving Back: Supporting Our Communities - Mitchelson Scholarship Foundation
High school graduation season is upon us. Once again, the Larry Mitchelson Scholarship Foundation will be selecting an aspiring art student to receive a cash award to help them pursue higher education. Previous winners are profiled on the foundation web site. As the students progress in their career they can submit updates and pictures of their art work. Your generous donations can be conveniently made securely on the foundation Facebook page or use the mailing address on the web site.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Traveling to New York City next week to work with Chris Coulthrust, the smartest person I know. Our annual Fourth of July fireworks viewing party will be July 3 in Estero. Then, on to Nashville July 17 for the Michelle's Angels Tribute Concert! If you love great live music, celebrating with fun people and contributing to a great cause, join us the weekend of July 17 for a one of a kind concert at The Listening Room in downtown Nashville. Less than 200 seats are available and tickets are FREE. Contact me to reserve yours seats!
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other loan products. Through its network of partners, National Web Leads delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for lenders and internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
It only takes a few months to destroy a good credit history, but it takes much longer to rebuild it. The answer to today's question is "it depends". One tool that will help rebuild credit is to monitor it closely using a service like Identity Lookout. Belive it or not, in some situations, it may make sense to NOT pay off a debt since it could cause more harm than good to the overall credit profile.
Credit scoring is far from cut and dry. The formula considers up to 50 variables, each with a different weighting. More than 1/3 of a credit score is based on the last 24 month payment history, with heavier statistical weighting given to the most recent 12 months. If your credit score is 600 and you pay off the remaining $7,000 of your auto loan or lease, do not expect an overnight jump in your score for these reasons:
1) Some creditors take up to 2-3 months to report payment history to the credit bureaus.
2) If you had one or more 30 day delinquencies within the past 24 months that could hold your score down more than the payoff brings it up.
3) About 1/3 of a score is tied to the ratio of debt owed to available credit. If the $7,000 payoff on that car loan represented a small percentage of your overall debt load then the impact on the score will be mitigated.
Projecting the impact on a credit score by a specific action like a payoff can only be done in context of your overall credit profile. Make sure you have constant access to changes in your credit profile by subscribing to a real-time monitoring service like Identity Lookout.
April ended with another seminar and more homeowners getting educated with the latest news about the property insurance, real estate, self-directed IRA, mortgage and credit markets. Feedback from the Estero, Florida audience was favorable and many thanks to fellow presenters Jerry Elliot (Oswald Trippe Insurance), Dina Cecere (Dina Cecere Realty), Paul Cecere (Centennial Lending Solutions) and Austin Hardy (Entrust). On to the news....
The current newsletter and all prior newsletters are archived at the MortgageByRandy blog space. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news...
Mortgage rates have bounced in a tight range since March and there is not anything on the horizon to make them deviate one way or the other in the short-term. This steadiness of low rates helps make new home purchases more affordable and homeowners with adequate equity can refinance into a lower rate. The damage caused by loose underwriting rules, overly optimistic home buyers and some shady mortgage originators is not forgotten. New legislation continues to be debated which has the good intention of better regulating the industry. However, there are components of several pieces of legislation which, if passed into law, will hurt consumers, small businesses and appraisers.
One example is Senate Bill 896. This bill contains an amendment which outlaws the consumer's ability to finance, including through rate or principal, any origination fees or costs permitted. This means that consumers will no longer be able to obtain a no point loan or no point/no closing cost loan and will be forced to bring money to the closing table! The major ramifications of this amendment are:
1. Significantly increase consumers' costs
If mortgage brokers can no longer occupy a competitive place in the market, consumers will be forced to other competitors, which will cause upward pressure on pricing because these entities will find themselves in a position to charge consumers even more.
2. Legislatively pick winners and losers
Consumers who are unable or unwilling to come to the table with a 20% down payment and all of their closing costs and origination fees will be forced to turn to other financial institutions that may not be local or easily accessible, or will be denied access to mortgage credit altogether.
3. Destroy small business
Mortgage brokers are small business professionals who rely on yield spread premium (YSP) as a tool to provide consumers with the no-cost mortgage loans they typically demand.
Just as the pendulum of greed and spending dominated consumer behavior a few years ago, now the pendulum swings too far in the opposite direction. Elected officials are trying to put their own personal stamp on legislation which on the surface demonstrates to voters that they are doing something about the mortgage crisis. Unfortunately, too many of these politicians lack the knowledge to understand the repercussions of their actions.
Personal Credit: Take Steps to Check Credit History with All Three Credit Bureaus
Reviewing your credit history regularly is just as important as changing the batteries in your smoke detectors every six months and getting the car oil changed every 5,000 miles. If you neglect to do these things you increase your risk for bigger problems later on. Remember to check your credit with each of the three major credit bureaus.
"Looking at one is a useless endeavor; you need to look at all three," says Howard Dvorkin, president of Consolidated Credit Counseling Services in Fort Lauderdale, Florida. "People tend to pull one and think everything is the same on all of them. That's not normally the case."
The reports will have different information because it's a voluntary system, and creditors subscribe to whichever agency they want -- if any at all. If you have not checked your credit history at all, then get all three reports to ensure accuracy. Otherwise, consider looking at one of the three every four months to monitor changes.
Economy & Financial Insights: Notice Your Mailbox is Lighter These Days?
A recent study by Mintel Comperemedia revealed two significant findings. First, Americans are using their credit cards less. Instead, 43% of Americans are using their debit cards more often. The second finding is that banks have reduced the number of credit card offers sent to our mailboxes. In the first quarter of 2009, lenders cut solicitations in half (compared to 4Q 2008) in response to rising delinquencies and chargeoffs. While the lenders save a few trees, consumers are continuing to improve spending discipline. Although spending is a key driver of our economic growth, these behavioral changes by banks and consumers are a necessary building block to better financial health.
Question of the Month: Is it Possible to Obtain Your Score on AnnualCreditReport.com for a Fee?
First, always use AnnualCreditReport.com to access your free reports. This is the only site where you can get the free reports guaranteed to you by law. Television and other ads for "free" credit reports all have a catch of some sort that require you to pay money. The law does not entitle you to free credit scores.
When you visit AnnualCreditReport.com and progress through the screens to order your free report, there will be an attempt to upsell you to purchase scores. Typically it's about $10 per bureau. If you are committed to spend about $30 to acquire all 3 scores, you might want to consider getting a monthly subscription for credit monitoring which includes the scores and also provides the additional peace of mind of being notified of any changes.
Giving Back: Supporting Our Communities - Mitchelson Scholarship Foundation
High school graduation season is upon us. Once again, the Larry Mitchelson Scholarship Foundation will be selecting an aspiring art student to receive a cash award to help them pursue higher education. Previous winners are profiled on the foundation web site. As the students progress in their career they can post updates and pictures of their art work. Your generous donations can be conveniently made securely on the foundation Facebook page or use the mailing address on the web site.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Nashville in July! If you love great live music, celebrating with fun people and a contributing to a great cause, join us the weekend of July 17 for a one of a kind concert at The Listening Room in downtown Nashville. Only 200 seats are available so contact me now to reserve!
Randy
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar Newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an Internet lead generation service matching consumer finance lenders with customers. Through its network of partners, National Web Leads delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for lenders and internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle's Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
April marks the first anniversary of this newsletter. The feedback from readers has helped improve the content, the delivery and the heart that goes into each publication. The newsletter is read by a variety of people. Some are bankers that not only benefit personally from the information, but are then able to add value to their client relationships. The newsletter is also used by real estate professionals and developers to stay current on changes and trends in the mortgage market. The largest constituency of subscribers are heads of households that have busy careers and on-the-go families. The newsletter gives them a quick update on matters that they can use in their everyday lives and pass the knowledge on to their children, colleagues and friends.
In April 2008, the first newsletter, it was written that we wanted to address common needs that people have when it comes to mortgages and personal finance, namely people are:
(1) thirsty for accurate, easy to digest knowledge.
(2) skeptical of what they hear from competing print & television media.
(3) looking for a reliable, trusted advisor to address personal financial questions.
Over the past year we hope that this newsletter has at least partially addressed those needs. Our commitment is there to continue delivering valuable content. Thank you for reading! On to the news....
The current newsletter and all prior newsletters are archived at our blog space mortgagebyrandy.spaces.live.com. Bookmark it and share with your friends and family. You can enter your own comments and feedback as well. Time for the news...
Mortgage Market: Congress Enacts Bigger and Better Tax Credit of up to $8000
A tax credit of up to $8000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit that we wrote about in 2008, the new credit DOES NOT HAVE TO BE REPAID! Please note that for purposes of this law, the purchase date is defined at the closing date of the transaction.
Notice the words "up to" $8000? To calculate the credit on a specific transaction multiply the home purchase price by 10 percent. In other words, to get the full $8000 credit, the purchase price would have to be $80,000 or higher. There are some income guidelines that must be met as well that are too detailed for this newsletter but the details can be accessed at the Federal Housing Tax Credit website.
This program is available to certain non-resident aliens as well. To apply for this tax credit, complete IRS Form 5405.
Personal Credit: Protect Yourself by Staying Aware of Internet Schemes
Internet crime schemes that steal millions of dollars each year from victims continue to plague the Internet through various methods. The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). The IC3 gives the victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. IC3 accepts online Internet crime complaints from either the person who believes they were defrauded or from a third party to the complainant. They can best process your complaint if they receive accurate and complete information from you. Therefore, IC3 requests that you provide the following information when filing a complaint on their website:
• Your name
• Your mailing address
• Your telephone number
• The name, address, telephone number, and Web address, if available, of the individual or organization you believe defrauded you.
• Specific details on how, why, and when you believe you were defrauded.
• Any other relevant information you believe is necessary to support your complaint
Economy & Financial Insights: Tax Tips for Anyone Involved in a Divorce
Tax filing is hard enough, but for those involved in a divorce, it can be even more confusing. Before a divorce is settled, tax filing decisions have to be made like, "Do I file with my spouse or without them?" and "If I file separately, who gets to claim the kids or itemize deductions?" Always consult with a tax professional so all options can be explained and, if possible, both spouses should be present. Worse case, the divorce attorneys representing each spouse should confer.
Both divorcing spouses may not claim the same deductions (kids, mortgage interest, etc), unless they file jointly. If the IRS uncovers double dipping of deductions by the spouses filing separately, one or both of them will be in for a painful, costly and time consuming experience. If one spouse files separately quicker than the other in order to get all the deductions then follow this back-up strategy: the other spouse should work with their tax professional to calculate the cost of the other spouse claiming all the deductions and then have their divorce attorney request that the court consider that the deduction hogging spouse has used a marital asset for their own purpose. To get answers to other specific divorce questions, send me an email and I will refer you to a reliable source.
Question of the Month: My Mortgage is Current but I Need Help - What Are My Options?
Many homeowners are experiencing interest rate adjustments to their mortgage which make their new payment out of reach, especially if someone in the family has lost a job or experienced unexpected medical challenges. It is frustrating for diligent homeowners who have worked extra hard and made sacrifices to make each payment on time only to learn that their lender is unwilling to help unless they fall behind in their payments. This counterintuitive practice may now have a solution thanks to new Obama legislation that just went into effect last month.
President Obama's new mortgage refinance program (just announced in March 2009) may help homeowners, even if their mortgage is as much as 105% of the value of the home. This program only applies for primary residences. Lenders will be paid financial incentives ($1000 per year per loan) through this new government program to help struggling homeowners (sort of a bribe). Lenders should now be more willing to lower the interest rate on some loans so that the monthly payment is no more than 31-38% of the homeowner's gross monthly income. Also, under this program, homeowners will receive up to $5000 ($1000 per year for 5 years) to reduce the balance owed if they make on time mortgage payments throughout those years (a means of balance forgiveness).
To get started, homeowners must first call their lender. When talking to the lender keep good notes about who you spoke to and when as well as the information provided. If the lender refuses to help, the next call should be to the Hope Now Hotline (toll free 888-995-HOPE) and speak with a federally certified housing counselor.
Avoid working with companies that are advertising that they can help modify mortgages for a fee (see Feb 2009 Mortgage by Randy newsletter on Loan Modification Nightmares). Work through these other options first. Do some homework and become informed by reading the details on the Hope Now website as well as HUD website.
Giving Back: Supporting Our Communities - Calling All Angels to Author Personal Experiences!
Do you believe in angels? The Michelle's Angels Foundation is seeking volunteers to author either one-time or regular contributions to their online newsletter. Its mission is to provide love, hope and assistance to those facing any one of a wide range of illnesses or life's challenges. The Foundation's website serves as the principal vehicle to aid others and their loved ones. If you have personal experience (albeit with a spouse, parent or child) with any of life's many illnesses, like cancer, the information that you can share will be invaluable to others that are faced with similar challenges. Submit your contact information to Michelle's Angels and one of the organization's founders will be in touch to see how you can help.
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Nashville in July! If you love great live music, celebrating with fun people and a contributing to a great cause, keep the weekend of July 10 open on your calendar and find a way to get to Nashville. Details coming soon!
Randy
Mortgage by Randy newsletter, Copyright 2009 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy, accessible at mortgagebyrandy.spaces.live.com. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC (www.nationalwebleads.com), an Internet lead generation service matching consumer finance lenders with customers. Through its network of partners, National Web Leads, LLC delivers innovative Web 2.0 software solutions such as lead generation platforms and real time desktop widget and mobile reporting tools for internet marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Finance Chairman of the Southwest Florida Regional Technology Partnership Inc. (www.swfrtp.org) and Vice President, Strategic Planning for the Michelle's Angels Foundation Inc. (www.michellesangels.com). He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
The President of the DR has signed into law the formation of Dominican Limited Liability Company’s
This will allow future American LLC integration with Dominican LLC's without going through the previous complicated processes. The pricing on the island continues to drop, which once the economy settles the pricing will be in line to create new sales.
DR Corporate Alert:
New Company Law Enacted March 14th, 2009, Dominican Republic
President Fernández signed into law on December 11, 2008, a new company law (Law #479-08") which will revolutionize the way business is done in the Dominican Republic. The most important innovation brought about by the new statute is the creation of two new business entities: the "Sociedad de Responsabilidad Limitada or SRL" (Limited Liability Company or LLC) and the "Empresa individual de Responsabilidad Limitada or EIRL (Limited Liability Individual Business). The "Sociedad Anónima or S.A.," currently the entity of choice of 99% of Dominican businesses, has been amended to make it the vehicle for medium or large businesses. Here are the characteristics of the two new business entities (SRL and EIRL) and the most important changes made to the S.A. Limited Liability Company (SRL):
• Based mostly on the current LLC's in French Company Law with certain similarities with American LLC's.
• Chief company officer(s): one or various managers ("gerentes"). Must be individuals.
• Minimum of two shareholders; maximum of 50. Spouses may be the sole shareholders.
• RD$100,000 minimum capital (full amount must be paid up and deposited in a bank in order to be able to record company at Business Registry).
• Shares not readily transferable, depending on wishes of shareholders.
• Shareholders' liability limited to their investment in the company.
• Ideal for small or family businesses. Limited Liability Individual Business (EIRL):
• No shareholders; one sole individual owns the business.
• Owner must be an individual; companies cannot be an owner.
• Owner's liability limited to his or her investment in the company
• No minimum capital.
• Chief Officer(s): the owner and the manager. The owner may be the manager.
• Ideal for businesses owned by a single individual. Sociedad Anónima (SA):
• Board of Managers (“Consejo de Administración) required with a minimum of 3 members.
• “Comisario de Cuentas” required. (The Comisario de Cuentas is an independent company officer in charge of overseeing the company accounts. Comisarios de Cuentas must be Certified Public Accountants).
• Tougher criminal penalties for SA managers compared to SRL managers.
The new law will come into effect on June 19, 2009. By then, every S.A. must comply with the new requirements IF its shareholders wish to remain as an S. A. If, on the other hand, shareholders wish to convert their S.A. into an SRL (LLC) or an EIRL (Individual Business), the conversion period will start on June 19, 2009. Guzman Ariza attorneys have been active participants in the changeover process. Fabio J. Guzman-Ariza and Alfredo A. Guzman, senior partner and associate, respectively, in the firm, partnered with the Fermin Taveras Law Firm in the preparation of the regulations that will be used by the Business Registries ("Registro Mercantil") in the new process. They have also prepared for publication in April 2009 a book of company forms for the SRL’s and the EIRL’s, and a comparative study on the operation of the SRL’s. Clients who have incorporated in the Dominican Republic are invited to contact their attorney at Guzman Ariza for a FREE consultation on how to proceed.
Guzman Ariza Attorneys at Law, Dominican Republic Santo Domingo - Sosua - Las Terrenas - Punta Cana - Samana - Cabrera - S. Fco. de Macorís Guzman Ariza is the first and only national law firm in the Dominican Republic, with 27 lawyers distributed in seven offices covering the Santo Domingo metropolitan area, including Juan Dolio and Boca Chica, the northern part of the island-Sosua, Cabrera, Las Terrenas, Samana, San Francisco de Macoris- and the southeast- Punta Cana, Miches and Macao. Our attorneys have concentrated their practice in servicing the business and personal needs of international corporations and individuals, especially in the following areas: Real Estate Law, Corporate and Business Law, Litigation, Trademarks, International Tax Law, Immigration and Family Law. Guzman Ariza is the exclusive member for the Dominican Republic of the State Capital Law Firm Group, an organization of 140 law firms practicing in the capital cities of 72 countries, in the 50 state capitals of the United States, the 10 Canadian provincial capitals, as well as in business and financial centers around the world. As a member of the Group, Guzman Ariza is able to assist clients more effectively in international transactions in conjunction with other law firms affiliated to the Group. Member firms of the State Capital Law Firm Group practice independently and not in a relationship for the joint practice of law.
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F E A T U R E S 
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