Kirk's Blog

Long Beach, Ca. Community Garage Sale sponsored by Kirk Mulhearn and Shelly St. Denis of Prudential California Realty.

Prudential California Realty/Gem Mortgage — Tue, 03 Nov 2009 12:44:31 -0600

Cal Heights, Long Beach, Ca. On November 14^th, 2009, between the hours of 8:00 am and 3:00 pm, over seventy residents of the Cal Heights neighborhood located in area of Bixby Knolls will be hosting a Community Garage Sale. All kinds of items will be available, for sale.

The Community Garage Sale came about when Shelly St. Denis and Kirk Mulhearn went through the community and asked who would possibly like to participate, expecting possibly fifteen to twenty households in the quad between Wardlow on the South, 37^th on the North, Atlantic Ave on the West, and Orange Ave. to the East.

Is it too late to sign up? Unfortunately, yes, it is too late to sign up because October 29^th was the last day to sign up.

Will there be more Community Garage Sales in the future? Yes, we are planning another Garage Sale in the summer of 2010.

Does it cost any money for me to participate? If you sign up with Prudential California Realty and RSVP in time there will be no charges; however, if you miss the dead line and you still want to sign up, there may be a late fee due to the City of Long Beach.

Kirk Mulhearn, a Long Beach Real Estate Broker co-manages Prudential California Realty, "The Bixby Knolls Office," and a Net Branch of, GEM Mortgage, a direct lender specializing in FHA, VA, and Conventional financing. Contact him at: 562-989-4608 ext. 110

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Long Beach, Ca. The real protocol of how to purchase Bulk REO Properties

Prudential California Realty/Gem Mortgage — Wed, 02 Sep 2009 00:50:27 -0500

Long Beach, Ca. Bulk Purchase of REO, notes and distressed assets through one of the largest

resellers of lender owned assets in the United States and an approved asset manager

under the U.S. Governments (Public-Private Investment Program) for the

disposition of bulk REO/Distressed assets through the FDIC.

In order for new and/or prospective buyers to get a better understanding of how to buy

wholesale bulk real estate assets through this program we have prepared the following flow chart.

Should you have any additional questions please call:

Step 1

NAA Representative will assist Buyer in preparing the following for submission:

1. Letter of Intent

2. Executive Summary/Profile

3. Non Compete Non Disclosure Agreement

Step 2

Prospective New Buyer (Buyer) to be considered for bulk inventory purchase must meet or have

phone interview with NAA Representative.

During this meeting/interview the following will be determined:

1. Mutually suitability of Buyer with NAA business model and goals.

2. Buyer previous history/track record in bulk purchase(s)

3. Buyer capital capacity for bulk purchase(s).

4. Buyer business plan for off load or resale of units.

Step 3

Buyer submits Letter of Intent and Executive Summary/Profile to NAA Representative>

NAA Representative reviews paperwork>

NAA Representative submits package to NAA Managing Partner>

NAA Managing Partner Committee reviews for:

1. Letter of Intent for suitability and availability in current marketplace.

NAA Legal Department reviews:

1. Executive Summary/Profile of Buyer for background review.

Step 4

Upon successful completion and approval of Letter of Intent and Executive

Summary/Profile, NAA Representative and Managing Partner will meet or conference with

Buyer to review process and product availability.

Buyer will provide satisfactory evidence of capital resources Proof of Funds to match with

Letter of Intent target purchase.

Step 5

A price quote/product list will be generated within 5 business days and sent to Buyer for

review.

Step 6

Buyer has 48 hours to review and either decline or enters into agreement by signing and

ratifying NAA generated purchase agreement. A final Product List is generated and

incorporated into purchase agreement.

Step 7

Buyer places 10% of the purchase price into mutually agreed upon escrow holder.

Buyer has between 5-15 business days to perform all due diligence and approve the final list of acceptable properties. Time factor will be determined by size, complexity of the transaction

and logistical considerations. Time factor will be determined by negotiation in advance of ratified

purchase agreement. The final list of accepted properties must be equal to or greater than 90% of

the "Letter of Intent", otherwise the pricing is subject to review and or renegotiation.

Step 8

Day 6-16/ or 1 business day after due diligence period

Deposit is equal to 10% of the purchase price goes "Hard" (Non Refundable). The receipt of the

Deposit will activate the contract.

Designated escrow agent works with the designated Title Company to get deeds issued and

titles cleared of any liens or encumbrances. (Note: Partial Closings may occur weekly until total

takedown has been completed.)

Title prepares Preliminary Title Report and HUD statement.

Step 9

Day 30 Remainder of Outstanding Funds must be deposited in escrow.

Notes:

In consideration of the requirements of the product sources, it must be taken into account the live

nature of the assets. Live assets are not guaranteed to remain available and are subject to going

under contract at any time prior to being secured.

Information Completeness is extremely important. Particularly in respect to the executive

summary, track record and financial capacity. The reason that we are able to purchase

discount or wholesale real estate assets from the financial institutions at the prices and ongoing

availability (while other competitors become blocked out of the market) is that when we place an

order we have one of the highest "pull through" rates in our industry. This allows us to continue

to offer the products we do, at great discounts to our clients on an ongoing basis.

We need to know who we are really dealing with and their ability to complete a purchase with us.

The moment we begin researching and finding the discounted assets our clients order, we are

employing staff man-hours and our financial outgo begins. We are looking for serious business

people who are ready, willing and able to complete the orders they create in their Letter of

Intent's as we are able to fill the Letter of Intent parameters.

Once the Balance of Funds has been satisfied we will entertain subsequent orders.

The entire sales process generally plays out over a period of approximately 25-30 business

days or less (5-6 weeks).

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Long Beach, Ca. Tidal Wave of new regulations hit the mortgage business

Prudential California Realty/Gem Mortgage — Mon, 31 Aug 2009 20:19:36 -0500

Long Beach, CA. Two years ago, there were over 90000 mortgage brokers nationwide. Last year, less then half of those applied for the stringent new licensing requirments demanded by State governments. Now, less then 36% of those people who applied for their licenses have reapplied to continue to practise as mortgage brokers. The bottom line is that there is much less choices for consumers and much hire cost to get a mortgage in today's real estate market.

Home buyers need to be aware of what the State of California will do with the implementation of the SAFE act, it stands for Secure and Fair Enforcement for Mortgage Licensing Act. In a few weeks California will enact the SAFE Act which means individuals will have to obtain their own licenses if they want to operate as loan brokers. According to the California Mortgage Bankers Association, individual loan officers can no longer latch onto a company license and must obtain their own.

A spokesman for the trade group noted the "act should pass here in the next few weeks, which will be a much bigger change than in some other states that already individually license loan officers." California also is working on major legislation to reorganize and consolidate all the financial/real estate agencies and departments, and create a new consumer-focused department but no further action is expected until next year.

What does that mean - more regulatory oversight, and for those of you that every worked in a banking environment, it will arrive for the mortgage banker and broker full force. Quick refresher on trying to maintain compliance with this issue. By the end of this year's legislative season, it is anticipated that each state, with the exception of Minnesota, will have passed legislation that implements the requirements of the S.A.F.E. act. The state legislation will require that mortgage originators meet the minimum requirements set forth in the S.A.F.E. act -- such as fulfilling pre-licensure education requirements -- and potentially meet more restrictive state requirements to the extent a state law goes beyond the act's requirements. Pursuant to the S.A.F.E. act, NMLS has been tasked with establishing standards for originator examination and education requirements. NMLS completed the development of its national examination required under federal law, allowing loan originators to register and providing access for completion. Though it has gotten off the ground, NMLS is continuing to work with state regulatory agencies in connection with preparing and releasing state-specific examination components.

Bottomline: Prepare to for full government intervention in the real estate markets to the point of nausea. These new laws are poignant examples of what happens when the regulation pendulumn swings far too much to the other side.

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John Wooden, a young man for the new century

Prudential California Realty/Gem Mortgage — Wed, 08 Jul 2009 14:07:33 -0500

Long Beach, Ca. In our lives it is worthy to aspire to greatness. Sometimes society only recognizes success by revenue, money, or sales statistics which is wrong when you look at the big picture. There are many ways to measure success. What we need to do as a society is to rediscover who we are as a nation. The human spirit is a grand creation that has unlimited potential. It is only when we surrender our dreams that we lose. For most people, life is a struggle, scratching out an existence in this very challenging world. However, just surviving is not living life to its fullest.

Recently, I interviewed a real estate agent who was on a National Championship team under the great Hall of Famer, John Wooden. Unfortunately, for this past champion player, the lessons learned on the basketball court did not transfer into success in the real estate profession, he had not made a sale in over twelve months. This is sometimes the case, a great player used to a certain type of success in physical sports languishes in the mental challenges of the business world.

But whatever your opinion, let us take a quick look at the success of John Wooden, he started coaching College basketball back in 1946. It took him twenty years to win the National Championship. Wow, what was he doing for 20 years?---building his finely tuned basketball machine, his philosophies, his character, his pyramid of success.

The point is that too many people put the emphasis on the actual Championships rather then the road that was travelled to get there. Let us all reflect on that even when our lives feel challenged or depressed that there is a Championship with your name on the Trophy, if you really desire it.

Some great quotes from John Wooden

"Consider the rights of others before your own feelings, and the feelings of others before your own rights."

-John Wooden

"Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.”

-John Wooden

"You can't live a perfect day without doing something for someone who will never be able to repay you."

-John Wooden

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King California, naked and broke, cuts off $10000 new construction credit

Prudential California Realty/Gem Mortgage — Mon, 06 Jul 2009 17:52:49 -0500

Long Beach, CA. As California grapples with the largest State deficit on record, it has cut off the $10000 tax credit for first time home buyers seeking money back for investing in new constructed housing, Sacramento announced last week.

Will California be able to balance its budget in time to avoid massive lay offs? Or, will it continue to, “kick the can down the alley,” as the Governor likes to say in regard to the legislatures inability to address formulating a government that spends within its means?

Last Thursday, the State of California began issuing IOUs in lieu of its normal checks as an emergency measure on how to deal with the situation….Today, Wells Fargo decided to tell the State of California they will accept their IOU's until July 10th. Thereafter, they will no longer accept the IOU's for deposit. We understand BofA has said the same thing:

Wells Fargo & Company (NYSE:WFC) said today it will accept registered warrants issued by the State of California from its retail and business customers for a limited time. It will begin accepting the registered warrants for deposit on July 2, 2009 and stop accepting them no later than July 10, 2009. “We’re very disappointed, as are many Californians, that California has taken the unfortunate step of issuing IOUs in lieu of its payments to some businesses and individuals,” said Lisa Stevens, head of Community Banking for Wells Fargo in California. “Wells Fargo has a long history of taking extraordinary measures to help our customers and will accept registered warrants from our customers, but only for a limited time, to allow them time to make other arrangements. We are reluctant to take this step, but are doing so to help our customers who are not at fault and with the expectation that the Legislature and Governor will complete the budget within days. We join all Californians in urging our Legislature and our Governor to take the appropriate steps as soon as possible to resolve this budget crisis.”

This week a flood of treasuries:

There will be an auction this week of 65 Billion in treasuries. If demand is not real strong, it will mean that our rates cannot go lower than the level you are currently seeing and you should consider locking your rate depending on how the market absorbs this large amount of bonds.

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Cap and Trade

Prudential California Realty/Gem Mortgage — Thu, 02 Jul 2009 18:04:54 -0500

Long Beach, Ca. As you may be aware, last week on Friday, the House passed by a 219-212 vote and energy bill commonly referred to as "Cap and Trade" because it puts "caps" on the carbon emissions from every U.S. company and industry and imposes trade limits and tariffs on imports. Proving no industry is immune from the hand of the Federal government and global climate activism, the Cap and Trade bill has some provisions that are very detrimental to the real estate industry, and especially in Southern California where real estate short sales consist of over 50% of closings and many sellers simply do not have the funds to bring their properties up to the standards required by the new law if it passes through the Senate and is signed into by Obama.

As part of the legislation every existing home sold in the United States using FHA financing will require an energy audit, paid for by the seller. The audit will cover all appliances, water, gas, heat, cooling; all energy systems will be audited to see if they meet federal standards. If any system or appliance fails to meet the standards the house cannot be sold until it is retrofitted to meet the new standards. The standards are being set to achieve a 20% improvement in energy usage.

You list a home built in 1960 with elderly owners who have lived in the home since 1988 and have not retrofitted the home since purchasing the home almost 21 years ago. What are the chances the home will meet the new federal standards? If the buyer is not an FHA buyer they may not need to worry about it but the market is now limited to mostly FHA buyers because conventional loans require a minimum of 10% down wherein FHA only requires 3.5% down. What if you have a qualified buyer, but they are only qualified using FHA financing? Many sellers may not take their offer because they do not want to go through the energy audit and retrofit. Many banks may wait until a conventional loan offer comes in; thus, shutting out many sales opportunities in an already hurting industry.

The Cap and Trade bill as passed by Congress is discriminatory against FHA buyers and sellers--typically the lower income and first time buyers in our market. Our current market in Long Beach, Californis and indeed; the nation is still reeling from a devastating period. Fortunately because of FHA financing we have increased sales, Cap and Trade will kill much of this market.

The real estate industry needs to fight this bill and specifically this provision before it gets adapted by the Senate. Please contact CAR, NAR and Senator Feinstein and Boxer, plus encourage your colleagues to do the same to kill this bill before it goes any further.

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New Trends in California Mortgage Financing

Prudential California Realty/Gem Mortgage — Mon, 29 Jun 2009 11:36:34 -0500

Long Beach, CA. We wanted to share information about how buyers finance in today's marketplace. Below is a lot of information for your review. Our job is answer questions and help guide you for the best decision.

As we know, the $8,000 federal tax credit for first time buyer's drove the marketplace the past several months to where it is primarily a seller's market for entry level home prices Six months ago, it was a buyer's market. To qualify for this rebate you wlll have to fill out IRS form 5405 that when you file with your 2009 federal taxes determining the amount and eligibility of this important tax credit. Please review with your tax preparer.

The State of CA through CalHFA has down payment/closing cost assistance available based on household income. A first time buyer (someone who has not owned property in three years) is eligible for 3% of the sales price for down payment and/or closing costs assistance. Please visit www.calhfa.ca.gov where you may become more familiar with their programs. Currently, 1st mortgages from CalHFA are difficult to acquire due to lack of product. As a result, buyers will get a standard FHA or a FHA Energy Efficiency Mortgage and combine it with a CalHFA CHDAP 2nd mortgage (3% of the sales price) for closing cost assistance. The CHDAP is a silent second mortgage with no payments and a 3.25% interest rate as long as you live; do not refinance; or sell the property. The buyer makes the traditional 3.5% FHA down payment.

Cities have down payment assistance programs based on income and property sales prices. The income limits are often mirrored by the income limits we see with CalHFA. Also, cites have these programs based on specific properties too. This allows the buyer an opportunity to purchase a home that otherwise would not exist.

FHA has three standard popular programs available for buyers.

1. The standard FHA 1st mortgage has only a 3.5% down payment requirement. Two years ago less than 10% of all owner occupied purchases utiilized FHA. Now, more than 75% of the same purchases use FHA financing and the percentage grows as conventional financing is more restrictive and difficult to get.

2.The FHA Energy Efficiency Mortgage allows up a buyer to finance energy efficient improvements (i.e. windows, doors, hot water heater, dishwasher, insulation, heating/air conditioning). The amount of money is based on the sales price (generally 5% of the sales price may be available for improvements). This was increased from a previous limit of $8,000 just a few weeks ago!

3. The FHA 203(k) Streamline allows a buyer to finance improvements and non structural repairs (flooring, paint, kitchen and bathroom fixtures/cabinets, appliances, pool equipment). The maximum amount is $35,000. Please see the attached HUD document outlining this valuable program.

Given the condition of many properties, the FHA 203(k) Streamline is more and more popular. I have personally provided this mortgage and have a couple in escrows right now with more buyers out shopping using this financing. The FHA Energy Efficiency Mortgage may be combined with the FHA 203(k) Streamline for maximum financing. The repairs/upgrades require use of a licensed general contractor and allow the normal close of escrow. A buyer of mine in San Diego bought a duplex with a pool that was bank owned for $340,000. We financed $43,000 (using 203(k) and Energy Efficiency combined) for the repairs/upgrades. The bottom line is the improved property value exceeded $400,000! The client made money day one! The beauty is ONE 30 year fixed payment!

One important aspect of FHA is the FHA Sreamline Refinance programs the home owner may utilize if interest rates decline after the home is purchased. This important refinance allows the buyer to refinance with a benefit to the buyer (lower home payment) without the cost of an appraisal; without declaration of income and assets! This simplified refinance right now is being/has been utilized by home owners who utilized FHA last year. Many are financing 6% plus interest rates into interest rates in the middle 5% range with the issue of an appraisal!

There are teacher and veteran programs available. The VA financing allows 100% financing. The CALSTRS financing for those who work for a public school system allows an 80% 1st mortgage and a 17% second mortgage with no payments for five years! Plus, there are other specialty finance programs.

About me and Golden Empire Mortgage (GEM). This has been my full time job for more than seventeen years. I work/am available six and one half days a week. Focus, listening, and execution of a game plan is how I operate. My client (you) is the only person I care about in a transaction by law and ethically. It is my job to protect your interests period.

GEM is a direct lender processing, underwriting, loan documenting, and funding the loan in our name. Our underwriters have delegated underwriting authority from numerous banks. What this means is we can approve a mortgage for Bank of America without having to ask B of A for permission to fund the mortgage. Our FHA underwriters are approved by HUD and banks for approving FHA loans. This allows us to look at many of the national lenders on a daily basis for the best rates and programs. For example, Bank of America has been very aggressive with their FHA interest rates. The past few weeks, GMAC (now that they have some issues resolved) has become aggressive too. The bottom line is the client (you) benefit as we seek out the best rates and terms. All of our lending functions are done here in California by Californians. We do not outsource our operations.

Not just another Open House at 4641 N. Cerritos, Long Beach, Ca

Prudential California Realty/Gem Mortgage — Fri, 01 May 2009 14:21:51 -0500

Long Beach, Ca. I remember one day my father took me to some homes he was building in Hacienda Heights in the early 1970’s. He was so proud to show me how the homes were built into the hills. I was nonplussed and told him that I wanted an “action job like being an army man, a fireman or maybe even a policeman.” He laughed and found much pleasure in those statements. Although not a civil servant, a guess today proved that being a real estate broker can be an action packed job.

Fast forward almost 40 years and I find myself putting together an open house in Bixby Knolls. A beautiful listing by Mr. Mike De Martino. The property at 4641 N. Cerritos, in Bixby is a beauty with over 2000 sq. feet featuring 3/4 inch oak floors throughout, brand new Dynasty Omega cabinets in the kitchen and baths. Definitely a handsome contribution to Long Beach, California’s real estate repertoire.

I smile when I think of the hectic day we had when holding this home open. There were no less then 15 couples that came through the open house, all interested and most were definitely qualified.

Although the home appears rather humble on the outside, after you pass through the courtyard wall, you enter into an enchanted and peaceful world. The pineapple fountain dribbles and splashes a greeting to you as you enter through the courtyard giving the home a feeling of privacy.

You stroll down the path to the main entrance door which is all glass. A benefit of having a security door at the courtyard is that you can have a lot of glass doors opening up into the courtyard which really makes the house breath and flow.

As you enter the foyer, there is a partition wall separating the Family/Living area and Kitchen form the bedrooms’ hallway. The layout is an open plan which makes the home feel very large. In fact, the spacious 10000 sq. foot lot is well utilized. Even more French doors open into the garden in the rear which makes the back patio feel like another outdoor room.

If you are considering purchasing in Bixby Knolls and interested in seeing a finely staged home, take the time to see this home.

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Secrets of Success: Ten ways to provide better Customer Service.

Prudential California Realty/Gem Mortgage — Wed, 15 Apr 2009 01:50:18 -0500

Long Beach, Ca. Unfortunately, in today's world, when we hear the words "customer service," too often we draw a blank when thinking of when was the last time we really experienced it. However, good service is still there, you just have to look out for it and when you find it, acknowledge it and make sure that you support the institutions that provide it.

For those of us over forty years of age, we can still remember the marvel of, "Full Service," at the local filling station growing up. If you opted for the full service, you would have a young man greet you at your vehicle, he would pump the gas for you, check your oil and tire pressure; of course, he would notify you if there was something awry, then he would finish off by cleaning your windshield to a sparking clarity. Can you imagine this approach in your local "service station," today?

Another example of great customer service is easily understood when having a positive fine dining experience. The entire dining affair becomes a pleasant and memorable adventure. You are greeted by the maitre d', welcomed and seated by the host, acknowledged by the waiter, played to by the musician and even possibly visited by the Chef. Each person that you meet enhances the experience, fills the voids, and rounds out and completes the evening. Like the layers of servers, the food also comes in waves or courses. It proves that there is an exchange going on between the service provider and the customer.

Still another way to witness good service is if you have ever traveled First Class across the Continent or overseas, there is simply no comparison to "Coach." You are pampered, given hot towels to rejuvenate your skin, complimentary cocktails, and the best meals, normally, you have plenty of legroom and a protective steward at your call ready to assist you in any matter. It makes the time go faster and can actually be fun not to mention comfortable.

This concept of good customer service is dumbfounding to most Americans these days, but it doesn't have to be that way. You see, understanding how to provide excellent customer service should be a primary and mandatory philosophy of every enterprise and every customer, too. . Let us revisit the idea of customer service and really hammer out what it means to, "Serve others."

And now something that may shock you.....your success in experiencing service depends on your own disposition. This idea of providing service is what life is all about. Learning how to take care of your fellow man is a simple and basic exercise of etiquette and civility. Learning how to communicate, treat, and relate to others is paramount to understanding the fundamentals of providing good service.

If you want to find out quickly how another person really is on the inside, just buckle up and drive through a heavy traffic jam with him. Here, the real person will definitely come out. You will soon see either total profanity, crass shouting and screaming, and lewd gestures issuing from the driver if he has no concept of decency and service or; on the other hand, the refined citizen will drive in a more giving and generous style that is not only safer and steady, but can actually make the whole experience enjoyable. What is the real difference between the two drivers?

Although there are countless ways to better serve each other, we can boil the whole concept of good service down to several factors:

Creativity. This is where you can discover the service artist in yourself. What is it about your product or service that gives your own custom signature and style of doing business.
Attention to detail. Here, in what appears to be the smallest of matters in a transaction, we see where the true Masters of Service really shine. What happens, is that by carefully thinking out every step and stage of the experience of working with the customer, and making sure that each stage runs smoothly, the entire experience is raised in the level of service that the client experiences.
Acknowledging others. Learning how to address your clientele, and making sure that they understand that you are aware of their presence and quickly respond to their needs makes the customer secure and happy.
Knowing your clients. Building personal relationships creates longevity and loyalty in a customer base.
Planning for success. Structuring and designing the experience your clients are going to participate in requires careful attention and a blue print for the direction of how your customers will be treated.
Putting other needs above our own. Sacrificing or giving yourself up to your client is a great act. Putting them above yourself in regard to giving them the necessary time, attention, and service, even when you have other things to do.
Learning to listen to the customer. Remembering that body language communicates a lot more then what we can verbally. Understanding how to listen and observe a customer so that you can read between the lines and take care of their concerns.
Consistency and discipline of routine. Clients come back to a business because they are attempting to return to the same positive experience that they had during a previous exchange.
Being aware of the big picture. Almost like a pilot who is flying a jumbo jet, you have to be aware of the big picture of what is going on, where you are at in the process, what are the prevailing weather conditions, and constantly in communication with the passengers.
Follow up. Reaching out to the customer after the close of the transaction. This sets a service provider above the rest of the competition

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Success Tip of the Day: Understanding Roadblocks in your life

Prudential California Realty/Gem Mortgage — Sun, 12 Apr 2009 12:53:23 -0500

Long Beach, Ca. Just the idea of a physical road block may conjure up frustration and lost time on the road to where you are going in life. But I would like to point out that within every roadblock that you may be facing, that there are probably some good reasons for them and that there are strategies on how to deal with them in your lives.

Roadblocks, in the physical sense, are often built by authorities, civil servants, to protect the traveler from unseen dangers. If the traffic was allowed to pass through unhindered, there may be a tragic accident resulting from unseen road conditions ahead.

So, as much as you may want to proceed, we need to figure out what is really in your best interests. It is more likely that a roadblock can be a good thing; that is, a signpost to adjust your aim, to rethink and reassess your plans, to slow down, an to reconfigure your approach.

Roadblocks are like loud neon signs that say, "Danger, caution, do not approach this way," and further evidence that life does not unfold perfectly into every whim that you may have. That true success comes from reinventing an idea over and over again until the idea is perfected. Because there is no true perfection in this world, we are faced with ever changing conditions which must be adapted to in order to survive and prosper. Learning about life means learning about the road conditions that we face on it. Having knowledge about what obstacles are on the road will make us more knowledgeable drivers and better pilots.

Roadblocks come in many varieties. For example, small business not being able to get a business loan from a bank. This is very evident in the current market dynamics. Everyone who actually needs a loan can't seem to get it. So, the traditional approach of going to a bank for a business loan has to be re-analyzed.

What are the options that a small business has in lieu of the traditional bank loan? Carefully delineate what all your options are. Instead, consider raising capital from private sources instead. There are many types of private investors. The market itself will dictate whether or not your business plan is worthy to be financed. You might check out local venture capital firms, or investment clubs. Be prepared to pay higher interest rates and even to give up part of your ownership in order to get your dream off the ground.

The whole process is part of living. The roadblock is pointing you to another direction. Find the right way and have fun getting there!

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Credit Scores & How They Are Calculated

Prudential California Realty/Gem Mortgage — Wed, 08 Apr 2009 16:34:34 -0500

Long Beach, Ca. Wow, with more and more workers getting laid off (depending on your State, unemployment figures are shifting up between 8.25% -15%), we have to address the credit issue as both agents and home buyers. You see, the old models are quickly becoming archaic when you have a good family, suddenly late on payments, because of a lay off or less hours at work. This is transcending into the home buying and refinance markets in that more and more people’s credit scores are dropping below 620, which is an industry standard now for the minimum FICO required by HUD on FHA purchase money loans. There are a few lenders that go below that but charge a premium in points. Below is an open letter written by my friend Steve Manos describing how your credit scores are calculated. It is adviseable to retain someone like Steve, who can periodically review your credit, and for a nominal fee, keep your scores high.

A credit score is a number that lenders use to help them determine their creditworthiness. It is generated through statistical models using elements from your credit report; however, your score is NOT physically stored as part of your credit history on the credit file. Rather, it is typically generated at the time that a lender requests your credit report, and is then included as part of the report. That is because your credit score is a "fluid" number, and it changes as the elements on your credit report change. For example, payment updates or a new account could cause your scores to fluctuate. Designers of credit scoring models review a set of consumers, often over a million, who opened loans at the same time, and determine who paid their loans and who did not. The credit profiles of the consumers' who defaulted on the loans are examined to identify common traits they exhibited at the time they applied for the loan (such as number of open accounts ;amount of outstanding balances; number and severity of late payments;type, number and age of accounts ;recent credit inquiries, etc.) The designers then build statistical models that assign weights to each variable, and these variables are combined to create a credit score. Below is a pie chart breaking down the percentages of each considered category that is used to calculate your score:

Few consumers get a perfect FICO score, and nearly half get under 700. Here is a breakdown of the U.S. population :

Score of 800-850 : 13%

Score of 750-799 : 27%

Score of 700-749 : 18%

Score of 650-699 : 15%

Score of 600-649 : 12%

Score of 550-559 : 08%

Score of 500-549 : 05%

Score under 499 : 02%

For years I have been warning my clients to ignore all the fake credit score companies and fake credit score monitoring companies, and only purchase your credit scores from www.myfico.com/12, or get your free credit reports from www.annualcreditreport.com. Experian is making a killing promoting their fake report/report monitoring site to unsuspecting consumers who do not read the fine print when they obtain their "free" credit reports, and end up actually subscribing to a monthly credit report monitoring service. I recently watched a video countering Experian's profitable little scam...When I found out who made the video I was shocked ! It was made by the Federal Trade Commission (FTC). This new commercial is the FTC's latest attempt to warn the public about these catchy commercials featuring " singing pirates". Watch the video here:

http://www.youtube.com/watch?v=krG2d7OK8MM.

How are FICO credit scores calculated and what determines your FICO score? The formula for creating those scores works like this :

FICO first sorts each person into one of ten credit categories so that , for instance, people with " thin files " -not a lot of credit history-are compared only against other people with " thin files " .

The FICO formula then starts with a neutral score - about 600 points - and begins adding and subtracting points based on the activity shown in the consumer credit file, said Craig Watts, a Fair Isaac spokesperson.

FICO scores are based only on what is in the consumer's credit file - and that file can be different from one credit bureau to the next. So it's not uncommon for the same person to find that his or her FICO scores at Trans Union is different from that at Equifax or Experian.

That is why at Center for Better Credit we feel it is more important than ever to enter into any long term financing deal with as high a FICO credit score as possible from all 3 of the major credit bureaus. Not just to save a lot of money on interest over the life of the loan, but in todays lending "climate" it is important to have higher scores just to even be approved. Please contact us with any specific questions. All of our contact information is at bottom of e-mail.

Sincerely;

Steven J. Manos

President

Center For Better Credit

3857 Birch Street No.630

Newport Beach, CA 92660

A Non-Profit Corporation Dedicated To Informing And Helping Consumers

Deal With Their Credit Issues & Resolve Their Credit Problems.

(949) 200-7507 Phone

(949) 553-1746 Fax

(714) 277-8583 Cell

(800) 359-0455 Toll Free

www.centerforbettercredit.com Website

What? I Get $18,000.00 for buying a home from the Government.

Prudential California Realty/Gem Mortgage — Fri, 27 Mar 2009 16:17:45 -0500

Long Beach, Ca. There has been a lot of confusion in the marketplace about what are the exact tax credits that a home buyer may receive from both the State of California and the Federal government. Chuck Barger, of Prudential California Realty, has prepared the simply summary below which makes is very easy to understand. If you are a homebuyer, this makes buying a property even more attractive this year! If you are an agent, you should be screaming this from the roof tops! Everyone benefits from tax credits, and you might just qualify for both of to $18,000.00 in credits.

I. Federal Tax Credit

1. Credit is 10% of Purchase Price, not to exceed $8,000.

2. Escrow must close between January 1, 2009 to November 30, 2009, inclusive.

3. Federal Credit is a “Refundable-Credit” earned whether or not taxpayer owes Federal Tax. Example, home-buyer owes zero Federal Tax, would receive a tax “refund” of $8,000.

4. Credit does not have to be repaid to Government, unless home-buyer sells or moves to another principle residence within THREE years of purchase.

5. Home-buyer is “First-Time” or has not owned a home from July 1, 2006 to June 30, 2009. Must be Owner Occupied as Principle Residence.

6. Income Levels: Tax Credit starts to phase out for an Individual Taxpayer with a modified adjusted gross income from $75,001 to $95,000 (or $150,001 to $170,000 for joint filers). The credit is eliminated entirely for an individual over $95,000; jointly $170,000.

7. Taxpayer can claim credit for either tax year 2008 or tax year 2009. If 2008 returns already filed, taxpayer can file an amended return and receive tax “refund”. Use IRS form 5405.

8. If Escrow closed from April 9, 2008 to December 31, 2008, would fall under 2008 law.

II. State of California Tax Credit

1. 5% of purchase price, not to exceed $10,000

2. Escrow must close between March 1, 2009 to February 28, 2010

3. Property must be “New Home”; that is, must be certified that the home has never been occupied; single family residence only.

4. Must be Owner Occupied as Principle Residence; must reside in home for TWO YEARS minimum to avoid paying back State Tax Credit.

5. Tax Credit is NON-REFUNDABLE; that is, it must be taken as an offset against State Taxes owing. It is taken over THREE successive taxable years. Starting in 2009 or 2010- maximum credit is $3,333 per year.

6. Home-buyer does not have to be a First-Time buyer to receive State Tax Credit.

7. Income Levels- no maximum income levels.

8. Tax Credit year begins in 2009 or 2010, depending on escrow closing date; use form FTB 3582A.

Summary: Credit may not be given if buying from relative or as gift. Home-buyer can receive BOTH credits. Time is of essence; must close within deadlines.

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New FHA underwriting will eclipse many potential home buyers

Prudential California Realty/Gem Mortgage — Mon, 16 Mar 2009 17:52:05 -0500

Long Beach, Ca. More good news on the loan origination front. We are seeing both more production in regard to loan applications, since February, the estimated US fundings this year have increased by $400 billion dollars. A lot of that is due to conventional refinancing. In the first quarter, we are expected to fund $.43 trillion that’s up from $.294 trillion in the fourth quarter of 2008.

Three Ways that FHA Underwriting is becoming tighter

Somethings to be aware about with FHA financing: Pretty much FHA financing is the only game in town right now for home purchases because there are no more 100% financing sub-prime loans. Understand that FHA is a full doc program that requires lenders to prove up that the borrowers are employed and have the funds to close. Nevertheless, what we are seeing is the FHA loan program morphing into a quasi-conventional type of product. This is not good for the borrowers or the real estate agents.

More and more banks are requiring a minimum FICO score of 620 wherein in the past you could fund a loan with a 580 score or less. The requirement has raised to 640 to 660 for jumbo FHA loans.
In addition, as of today, many lenders are no longer are accepting alternative lines of credits from home buyers that don’t have three lines of credit established on their credit reports.
You are currently required two FHA appraisals instead of one if you are funding an FHA Jumbo loan, this could cost a home buyer $700-$1000 up front for appraisals vs. the old

$350-$500 that we used to pay.

We are hearing more information on the 105% refinance program from the agencies. And it is not good if it is a Freddie Mac loan. The Wall Street Journal article reports that the new refinancing program doesn't allow borrowers to shop around for the lowest fees. “Brad German, a spokesman for the government-backed provider of funding for mortgages, said any borrower with a Freddie-backed loan who wants to refinance under the program needs to do so through the company that services his current loan. Borrowers with Fannie-backed loans will be able to seek refinancings under the program from more than 30,000 lenders nationwide. While Fannie is letting borrowers shop around, those deemed a higher risk are hit with fees that can total 3% or more of the loan balance, the WSJ reported. Freddie's maximum fee on these refinancings is 0.25%.

Kirk Mulhearn, a Long Beach Real Estate Broker co-manages Prudential California Realty, "The Bixby Knolls Office" and a Net Branch of GEM Mortgage, a direct lender specializing in FHA, VA, and Conventional financing. Contact him at: 562-989-4608 ext. 110

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Friday the 13th

Prudential California Realty/Gem Mortgage — Fri, 13 Mar 2009 15:18:26 -0500

Long Beach, Ca. Since this is Friday the 13th, have you ever wondered the origin of fear for this date. It can be attributed to a number of past historical events. Something different then mortgage information that you can use at your next trivia get together.

One reference is to the Knights Templar rose to prominence in Europe between 1096 and 1307. Their downfall came on Friday 13th October 1307. This date saw the catastrophic destruction of the Knights Templar at the hands of King Philip of France and his puppet Pope Clement V. Some say this event, in which the Templar's were burnt at the stake, gave birth to the superstition associated with Friday 13th. Others have noted that you should be aware of naming your children with 13 letters in their name, they may be cursed for example, Jack the Ripper, Charles Manson. Ok, then back to some mortgage information.

More Mortgage News

CalHFA - Date for the return of this product is still undetermined. Calls to their office and staff still indicate they do not know when the program will begin accepting registrations, regardless that the State budget has been passed. And we want socialized medicine.

2008 FHA and Agency Conventional Loan Limits – although we had a major press announcement earlier about the new FHA Loan Limits, We have announcements from Countrywide aka Bank of America, and U. S. Bank for FHA 2008 loan limits only at this time. We are still waiting on others. Conventional is still on hold as people make adjustments to systems, and loan pooling to handle the higher loan amounts. Again, our best guess is early April.

CNBC published an interesting slideshow depicting the states with the highest foreclosure rates. Can you guess which state has the highest rate per number of existing households with impending foreclosures? You might find this interesting. Anyone for a second home in the state with the highest foreclosure rate? I am sure you will find a real bargain. I give you a hint, You can visit their recreational sites and come away a winner or a loser. http://www.cnbc.com/id/29655038

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A few things to be happy about in the real estate markets.

Prudential California Realty/Gem Mortgage — Fri, 13 Mar 2009 15:11:43 -0500

Long Beach, Ca. As the weather starts to warm a little, home buyers have come out in droves.

Some buyers are hesitating and watching the economic situation a little too closely in that some have decided to hold off. My cautions to all, we have to focus on the positive of our market place and look to the happy side of living in these opportunistic times. Don’t hesitate to purchase a home if you qualify, need a home, and have the ability to make the mortgage payments. Remember, there is a federal tax credit of $8000.00 for first time home buyers that does not have to be paid back!!!

Freddie Mac declared a 4Q net loss of $23.9B, which forced the value of assets below its liabilities. Freddie said that it will need an additional $30.8B in federal aid.

We have already seen Retail Sales and Jobless Claims bounce….just a little. Retails Sales, expected to drop .5%, were “only” down .1% after being up 1.8% last month. In addition, the number of U.S. workers filing new claims for jobless benefits rose 9,000 last week to 654,000, a shade higher than expected, and the four-week average of new jobless claims rose to 650,000 from 643,250 the week before. (This was the highest reading since October 1982.)

We have seen an up tick in your loan applications. Requests loans raised 11.3 percent in last week, driven by a 13.1 percent growth in refinancing demand, the Mortgage Bankers Association reported. Applications for purchases climbed 7.1 percent. GREAT long-term mortgage rates, which dropped to 4.96 percent, stimulated the market.

Finally, today Mr. Madoff, who made off - no pun intended for the victims, with billions of people's money from the largest ponzi investment scheme to date, said he was sorry and ashamed. Here is the story and link to CNBC article and a number of links of resources that are available for people who have been become victims of this sad situation. http://www.cnbc.com/id/29598454

Kirk Mulhearn, a Long Beach Real Estate Broker co-manages Prudential California Realty, “The Bixby Knolls Office” and a Net Branch of GEM Mortgage, a direct lender specializing in FHA, VA, and Conventional financing. Contact him at: 562-989-4608 ext. 110

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The sky is the limit with the new FHA loan sizes!

Prudential California Realty/Gem Mortgage — Tue, 10 Mar 2009 12:26:16 -0500

Long Beach, Ca. Real Estate agents and home buyers need to understand the implications of the new FHA loan limits as spelled out below. Sometimes this can be a little confusing with FHA loan structure so let’s analyze a couple of examples.

First, understand that the FHA loan limit is based on the sales price minus the required 3.5% down payment and does not include the required Mortgage Insurance Premium (MIP) of 1.75% which is usually financed on top of the base loan amount.

Second, Remember that if your base loan amount is above the old conforming loan limit of $417,000.00 then you will be subject to JUMBO FHA pricing which normally costs between .5% and .75% more then conforming rates.

For example, if your sales price: $432,124.00

Down pay ment would be(3.5%): $15,124.00

Base Loan Amount: $417,000.00 (This is a conforming FHA Loan)

Add the MIP Fee(1.75%) $7298.00

Your Total Loan Amount $424,298.00*

Even the total loan is greater then $417,000.00, it is not considered an FHA Jumbo because the mortgage limits are related to the base loan amount.

New FHA Mortgage Limits

The American Recovery and Reinvestment Act of 2009 (Recovery Act), signed into law on February 17th, 2009, provides for new FHA Mortgage Limits, effective March 6, 2009. These new limits are calculated at the higher of the previous 2008 loan limits or the 2009 loan limits implemented by the Housing and Economic Recovery Act (HERA).

The new loan limits have been implemented and effective in the Mortgage Pricing System’s products since March 6, 2009. Current clients of Mortgage Pricing Systems can be confident in accurate qualification and pricing of FHA products. If you are not a client of Mortgage Pricing Systems, you must check with your Product and Pricing Eligibility provider regarding the status of this required change to FHA loan qualifications.

Loan limits vary by county and can be reveiwed at:

https://entp.hud.gov/idapp/html/hicostlook.cfm.

The new maximum loan limits are as follows:

New 2009 FHA 48 States AK and HI

1-Family $ 729.750 $ 1,094,625

2-Family $ 934,200 $ 1,401,300

3-Family $ 1,129,250 $ 1,693,875

4-Family $ 1,403,400 $ 2,105,100

Kirk Mulhearn, a Long Beach real estate broker manages, “The Bixby Knolls Office,” of Prudential California Realty and co-manages a GEM Mortgage net branch which specializes in originating FHA, VA, and Conventional Financing.You may contact him at: 532-989-4608 ext. 110

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How to avoid being eaten by loan fees !

Prudential California Realty/Gem Mortgage — Mon, 09 Mar 2009 12:28:38 -0500

Long Beach, Ca. While the economy continues to wind down, American families look for anyway possible to save money. The question is: How can I save money on my next loan transaction? To help you we have listed several ways below on how to lower your costs:

Shop for a home mortgage as if you were shopping for any other product. That is, compare the Good Faith Estimate of at least two retail loan companies to get an idea of what is the least expensive way of finding a mortgage.
See if the lender is offering any special discounts. There are sometimes programs wherein the lender rebates up to $1000.00 in fees to assist clients get into a property.
Ask you real estate agent to make sure that the Seller absorbs your closing costs; that is, the Sellers legally can pay for a portion, if not all of your closing costs but you have to write that and negotiate it into the transaction.

Meanwhile, on the big scene, AIG asked for a fourth round of government assistance, threatening that if they did not receive it that their could be a systemic collapse in the credit markets. Excuse me, didn’t that already happen? The favorite joke going around my clients’ is that everyone’s 401-K has been adjusted to a 201-K considering that many have already lost 50% of last years equity value. Then you have Obama claiming that stocks are a great value and that everyone should be investing? What the #@*!!!!

Rumors have it that AIG may need up to an additional $200 billion dollars on top of the $160 billon that they have already received to squash the insurance needs that its clients have on defaulting Mortgage backed Securities and Collateral Debt Obligations.

You see, what we had was a super sized insurance company insuring high flung financial bets placed by Investment banks on paper products known as: “DERIVATIVES.” These “products” were given AAA ratings by companies like Moodys and Standard and Poors, who were lobbied with millions of dollars by the same Investment Banks hocking the paper. Then one day, surprise, the whole house of cards(derivatives) came down and the American tax payer got left with the bill! Is this really what the founding fathers had in mind?

What does this all mean to a family attempting to purchase a new home? Bottom line is to get your money into hard assets like real estate. Real estate has always been a natural hedge against inflation in that no matter how much the dollar is inflated, the real asset still has utilitarian value (you can live in it, but you can’t live in a stock portfolio).

You may contact him at: 532-989-4608 ext. 110

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Long Beach, Ca. Southern California Broker looking for Bulk REO packages

Prudential California Realty/Gem Mortgage — Fri, 06 Mar 2009 12:22:59 -0600

Long Beach, Ca. Our Company has been in business for over 42 years, we are looking for small bulk REO packages in Southern California, preferrably in Orange County. If you have successfully closed a transaction like this, we are interested in a $3 million to $5 million dollar package. We are a cash buyer. Contact information is listed below:

Kirk Mulhearn, a Long Beach Real Estate Broker,manages Prudential California Realty. "The Bixby Knolls Office," he also co-manages net branch of GEM Mortgage, a direct lender specializing in the FHA, VA, and conventional financing. You may contact him at 562-989-4608 ext. 110

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Give me Financial Liberty or Give me Financial death

Prudential California Realty/Gem Mortgage — Fri, 06 Mar 2009 12:03:59 -0600

Listen to the great American Founding Father here: http://www.youtube.com/watch?v=mtQTEoV2jUo

Long Beach, Ca. Patrick Henry gives a masterful speech that would light and ignite, fire and explode the minds of men. Take nine minutes of your day and reflect upon his weighty words...his determination and commitment to his cause sounds out even today, over 230 years later....where are our leaders like him today?

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What your Appraiser needs to know about HUD FHA appraisals

Prudential California Realty/Gem Mortgage — Wed, 04 Mar 2009 20:13:36 -0600

Long Beach, CA. Recently, Mike Simpfenderfer, Co-manager of the Bixby Knolls GEM Mortgage Branch submitted this important letter to all appraisers working with our lending company. Please take the time to quickly review the following missive and share it with your appraiser if you are involved with a FHA loan transaction:

This WILL affect values as too many listing agents are overpricing homes today. More than 90% of financing today is FHA. In 2006 FHA came out with an appendix to the 4150 guide called Valuation Protocol. This was a guide to completing the appraisal. Recently HUD has begun to use this guide thoroughly in the review process of the appraisal. Appraisals not meeting the guidelines are rated as deficient and the deficiency is charged against the underwriter as well the lending institution. Many appraisers have never read this guide but continue to do FHA appraisals believing that they are following acceptable procedures. Common issues that we are seeing from HUD reviews:

Comparable sales do not reflect the type of financing and/or percentage of concessions
All improvements are not included on the sketch or dimensions of all improvements are not detailed. This includes patios, pools, spas, detached garages etc.
Appraisers are required to inspect the attic with at least a "head and shoulders" inspection and indicate this on the report.
Appraisers are to indicate that all utilities are on and all systems are operating. If utilities are not on this requires the appraisal to be marked "subject to" and a condition called out for this
Appraisers are to indicate that the property meets HUD guidelines
Number of cars that can be parked in the driveway is missing (this seems to be important to HUD for some strange reason)

Many appraisers are not calling for repairs because the contract is written "as is". The property must still meet HUD guidelines regardless of the contract. Buyers and sellers must understand this Other common errors:

Appraisers are indicating on page 1 that there is a stove but then later indicate it is missing or photos show it is missing. If there is no stove it must indicate this throughout the report and any appropriate adjustments must be made.
There is clear evidence of peeling or chipping paint on homes built prior to 1978 and the appraiser did not call for abatement per HUD guidelines
Pools must be filled with water as this is considered a heath and safety issue by HUD and our investors
Properties with septic systems must indicate if connection to sewer is available
Square footage of comparable sales do not bracket the subject and appraiser fails to comment on why bracketing cannot be achieved. Bracketing means that out of at least 3 closed sales one must be smaller in size, one larger in size and one approximately the same size.
Lack of landscaping or condition of landscaping that would require an adjustment

Investor issues with appraisals include:

Using older sales in a declining market with no negative adjustments. Investors expect to see these adjustments or the appraiser must justify using no adjustments.
Listings should be adjusted for a list versus sales price

Hopefully this helps you understand the appraisal conditions you see on your approvals.

Kirk Mulhearn, a Long Beach Real Estate Broker, manages Prudential California Realty, "The Bixby Knolls Office," and co-manages a net branch of Gem Mortgage, a direct lender originating FHA, VA, and Conventional loans. Kirk Mulhearn may be contacted at: 562-989-4608 ext. 110

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How to Finance Boarded up REO Properties with FHA 203-K Financing

Prudential California Realty/Gem Mortgage — Wed, 04 Mar 2009 18:05:15 -0600

What is FHA 203(k) Financing?

Long Beach, CA. This US Governments housing program has been in existence since the 1990’s. Its purpose allows a home buyer the opportunity to finance into a 30 year fixed mortgage upgrades and repairs they want up to $35000 above and beyond the sales price. Below outlines how these funds may be utilized.

Finance your kitchen appliances such as refrigerator, stove built in microwave, dishwasher, hot water heater, built in trash compactor as part of your 30 year fixed FHA loan. Energy efficient appliances may be eligible for additional rebates from the local utility company. As just signed by rebates from the local utility company. As just signed by President Obama, buyers may qualify for up to a $1500 tax credit for energy efficient upgrades too!

Repairs financed may include: new carpeting, install or refinish hardwood floors, install energy efficient windows, replace a worn leaky roof, replace damaged or worn out kitchen and bathroom fixtures; termite clearance !!!

Get the electrical and plumbing updated and upgraded.

Mixed use properties eligible

Subject to maximum percentage of commercial use.

1-4 unit owner occupied homes

Single family residences, condos and townhomes allowed.

Licensed general contractor generally needed and required.

Close escrow in 60 days

Today, we will see three homes with 30 year fixed payments of $1288, $1304 and $2214 respectively!

$289,000 List Price for

9209 Laurel Street Bellflower, Ca 90706

$289,000 list price

$10,115 3.5% FHA down payment

$278,885 base loan amount

$20,000 FHA 203(k) added for upgrades

$298,885 base loan amount

$1,004.00 per month 1^st mortgage 5.5% 30 year fixed FHA 203(k)

$50.00 per month estimated home owners insurance

$301.04 per month estimated property taxes

$136.99 per estimated private mortgage insurance

$2,214.76 per month PITI

Estimated closing costs based on a 640 credit score is 4% to 4.5% of the sales price. If the seller pays all closing costs, cash needed is:

$10,115 down payment

$425 FHA 203(k) appraisal

$275 inspection

$10,815 total estimate cash needed

Proposed items to upgrade:

Replace Roof

Energy efficient water heater/dishwasher

Paint interior

$149,000 List Price for

5545 Lime Avenue Long Beach, Ca 90805

$149,000 list price

$5,215 3.5% FHA down payment

$143,785 base loan amount

$30,000 FHA 203(k) added for upgrades

$173,785 base loan amount

$1,004.00 per month 1^st mortgage 5.5% 30 year fixed FHA 203(k)

$50.00 per month estimated home owners insurance

$155.21 per month estimated property taxes

$79.65 per estimated private mortgage insurance

$1,288.86 per month PITI

Estimated closing costs based on a 640 credit score is 4% to 4.5% of the sales price. If the seller pays all closing costs, cash needed is:

$5,215 down payment

$425 FHA 203(k) appraisal

$275 inspection

$5,915 total estimate cash needed

Proposed items to upgrade:

All new energy efficient windows and exterior doors

Flooring

All light fixtures

Energy efficient water heater

Wall furnace heater

Paint interior and exterior

$160,000 List Price for

38 East Platt Street Avenue Long Beach, Ca 90805

$160,000 list price

$5,600 3.5% FHA down payment

$154,400 base loan amount

$20,000 FHA 203(k) added for upgrades

$174,400 base loan amount

$1,007.55 per month 1^st mortgage 5.5% 30 year fixed FHA 203(k)

$50.00 per month estimated home owners insurance

$166.67 per month estimated property taxes

$79.93 per estimated private mortgage insurance

$1,304.15 per month PITI

Estimated closing costs based on a 640 credit score is 4% to 4.5% of the sales price. If the seller pays all closing costs, cash needed is:

$5,600 down payment

$425 FHA 203(k) appraisal

$275 inspection

$6,300 total estimate cash needed

Proposed items to upgrade:

All new energy efficient windows and exterior doors

Flooring

All light fixtures

Energy efficient water heater

Wall furnace heater

Paint interior and exterior

Repair kitchen cabinets/install new sink

Kirk Mulhearn, a Long Beach Real Estate Real Estate Broker manages the Prudential California Realty office in Bixby Knolls, he also co-manages a GEM Mortgage Net Branch, a direct lender specializing in FHA, VA, and conventional financing. He can be reached at 562-989-4608 ext. 110

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www.longbeachrealestateandloans.com

A New Era of Responsibility?....Renewing America's Promise?

Prudential California Realty/Gem Mortgage — Fri, 27 Feb 2009 01:42:40 -0600

Long Beach, Ca. The new 3.5 trillion dollar national budget, the largest on record, named, "A New Era of Responsibility: Renewing America's Promise." Was rolled out today by the wonderful people running this great nation. Let us analyze the name....there is a lot in a name:

A new era of responsibility?

Who is going to be held responsible? It appears that the tax payers of this nation will definitely be held more responsible because Obama's multi-Trillion dollar budget will raise taxes by $989 Billion dollars over 10 years!!!!!

Then there's the quizzical: Renewing America's Promise?

Again, may we ask, who is being promised what? With all of the money being pumped into social services, perhaps the all knowing legislature should take a careful look at California's new poor push social services to the brink to get an idea of what is really going on in the heartland.

After all, maybe it's time to start from scratch: What is the basis for a healthy, industrialized, and modern civilization? All Empires of antiquity at their lean beginings, started off with a some form of economic base. Either it was an agri-based country: Egypt and Rome or a trading power: Venice and Greece. The point being that there was some kind of economic foundation that allowed the economy to flourish without government intervention. In the United States, we reached a high point in the last century when our manufacturing base was the envy of the world. The problem that the United States has today, is that many of these manufacturing jobs have been exported simply because of the cost of labor and pensions in the United States have simply priced it out of the global market place. When Auto workers in Detroit require $70/hr while Chinese industrial workers can be hired and retained for $200/month it is evident the world is out of balance. How can the United States recover with out a manufacturing base?

Meanwhile, the head of our Treasury attempts to manufacture a new securities industry, read: Time to Break up the Big Banks

Mortgage Brokers are squeezed out of the market. The market share for those people in the wholesale mortgage channel continues to shrink. Mortgage brokers accounted for just 16.6% of all new residential loans originated in the fourth quarter, the lowest on record since National Mortgage News began tracking originations 15 years ago. As recently as mid-2007 wholesale -- where broker-sourced loans are table funded -- accounted for 28% of production. The 30 or so table funders reporting to NMN and the Quarterly Data Report originated roughly $50 billion in mortgages through loan brokers. All lenders -- using retail, wholesale and correspondent means -- funded $300 billion in product during 4Q,

The Financial Stability Initiative allows for a refinance by the agencies to 105% LTV. William Longbrake, a member of the board at First Financial Northwest, Renton, Wash., said it's "entirely possible" the ceiling could rise above 105% once the government-sponsored enterprises determine the procedures they will follow regarding refinancing upside down loans.

Another Wholesaler slips away. Wednesday, Chase bailed on their warehouse business. "After consideration and review, the Correspondent Lending Business at Chase has decided to no longer offer warehouse financing. This product does not fit within the long-term strategy of our firm."

Great Speech, but where's the beef?....several more pounds of flesh from you and me.

Prudential California Realty/Gem Mortgage — Wed, 25 Feb 2009 12:16:03 -0600

Long Beach, Ca. After an exceptionally inspiring and charismatic speech, our National Leader gave some of the best sound bites I have ever heard last night in an extremely populist speech. Indeed, to watch many of the star struck senators and congressmen anxiously line up to have their programs autographed by Obama makes one wonder about the head rush of euphoria going through the law makers of our country as they prepare trillions of more spending bills. However, the real problem with all of the bail out and stimulus projects with the government pumping trillions of even more money into our economy is that it is going to all have to be paid back with interest for by the next several generations of Americans at a very heavy economic cost to the economy.

Federal Reserve Chairman Ben Bernanke expects the country's down cycle to continue through at least June but believes growth could resume later this year if "actions taken by the [Obama] administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability." Wow, he is dumping the responsibility of the economic future of America on to the backs of Congress after the FED had a Monopoly on money making decisions for almost a century, nice spin.....

So far, it is being reported that 90,000 borrowers are at least three months behind in their mortgage payments have been invited to take part in Fannie Mae and Freddie Mac's streamlined modification program, which seeks to lower monthly payments to 38 percent of a borrower's income via interest-rate reductions, longer terms and principal reductions. However, Federal Housing Finance Agency chief economist Patrick Lawler says, "Early indications are that several of the program guidelines should be liberalized to reach a broader population and to create a lower, more affordable payment." Joseph Evers, deputy comptroller at the Office of the Comptroller of the Currency, told lawmakers yesterday that roughly 57 percent of Fannie and Freddie's loan modifications made in the first quarter of last year defaulted again within six months of the modification when the borrower fails to pay their taxes.

The cram down provision we have talked about before is now under consideration by the U.S. House that would let bankruptcy judges reduce principal owed on mortgages and make other changes, insisting that the proposal would boost mortgage rates and lenders' losses. The proposed legislation could help more than 1 million struggling homeowners, says the Congressional Budget Office, which estimates that 350,000 of them likely will file for bankruptcy during the next decade. In a letter to administration officials, the Mortgage Bankers Association said, "Judicial modification should be a last resort and only available where other non-judicial options have been exhausted or are not available." As we have said this will only increase the cost of future home loans, but we will have to see how this works.

How confident are you about the economy? Yesterday it was reported that Consumer Confidence fell to its lowest level since 1967, which is when the survey began. We did see a little price improvement yesterday due to Ben Bernanke's remarks, along with a decent 2-yr auction, but then prices sank somewhat. Bernanke conjectured that the recession could last into 2010, along with assuring the market that the government does not desire to nationalize the big banks, most notably Citi and BofA. The Treasury Department sold $40 billion in two-year notes at a yield of .961% ($32 billion in 5-year notes today and $22 billion in 7-year notes tomorrow) As everyone in mortgage banking knows, the Fed is focusing on purchases of agency debt and mortgage-backed securities as well as extending loans to the private sector to jump-start business and consumer lending - some dealers report that they are the ONLY buyer. You heard correctly, the FED is the only buyer. It is a very serious situation when only the FED shows up to buy. That is why we have kept saying to you about the pricing, it is in a artificial bubble. For the marketplace to work, we need to see other people develop the confidence to become buyers

Kirk Mulhearn, a Long Beach real estate Broker is the Manager for Prudential California Realty, "The Bixby Knolls Office," and Co-Manager for a net branch of GEM Mortgage, a direct lender that originates FHA, VA, and Conventional Loans.

He may be contacted at: 562-989-4608 ext. 110

Subscribe to this blog at: www.longbeachrealestateandloans.com

Despite all the bail outs, Government Underwriting tightens while AIG begs for another 60 billion

Prudential California Realty/Gem Mortgage — Tue, 24 Feb 2009 12:04:57 -0600

Watch the video here: http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

Long Beach, Ca. Take the time to watch the Frontline video, "Inside the Meltdown." It covers pretty well what the government has been addressing for the last six months. It definitely is making it very clear that the more money that is being pumped into the banking system is not necessarily having the results that Washington and the Treasury would like to see. Most interesting is how Hank Paulsen had so easily jettisoned the "moral hazard" argument off the wagon. In fact, it seems that we are being sucked into even more bail outs because the basic idea is to prolong the pain rather then make serious adjustments to our economy, government, political structure and the Republic(more on that later on).

Back at the ranch. One frustrating aspect of this whole real estate down turn is how the banks have completely did a 180 degree turn on underwriting to the point of almost being ridiculous! The pendulum has swung so far the other way that if the lenders are not careful, only a handful of borrowers will be left to be able to purchase!

See the new changes in underwriting below:

FHA
Standard

· Lowered the maximum LTV for cash-out refinance transactions to 85%.

• Increased the minimum credit score requirement on Standard FHA to 620. This requirement applies to all FHA loan types including streamline refinance transactions.

o Credit reports utilized for streamline refinances seasoned 12 months or more need only contain the mortgage payment history and the credit scores.

o Streamline refinances seasoned less than 12 months require a full credit report and must meet additional credit parameters.

o If a full credit report is provided when not required, the Underwriter
has approval discretion based on the overall merits of the file.

Jumbo
• Increased the minimum credit score on FHA Jumbo purchase and rate-term refinance transactions to match the minimum credit score on cash-out at 660. FHA Jumbo is defined as base loan amounts > $417,000 for a 1-unit

property, or > $533,850 for a 2-unit property.

The Obama administration's housing stability plan does not address jumbo mortgages, leaving borrowers with loans too big for purchase by Fannie Mae and Freddie Mac with few options to reduce their payments. Even those with stable incomes, 20 percent equity and good credit cannot refinance in the current market, forcing some to tap into 401(k) plans or other investments to pay down their mortgages so that they are eligible for a fixed-rate conforming loan. Some banks are setting jumbo rates high to discourage borrowers, and realty professionals say some upscale communities are experiencing additional home-price declines in response to the inability of borrowers to obtain jumbo loans. GMAC has offered some fairly aggressive pricing on their jumbo ARMS, and are rumored to be close to offering a lower 30 year fixed rate as well.

AIG may ask the government for another $60B (bringing total to $210B) and attempt to convert the outstanding preferred shares to common stock to try and reduce the pressure on the company's cash flow. Isn't it great when you have an unlimited checkbook. Global equities and US stock futures are down. Right now, the futures market is pricing in a 74% chance that the Fed keeps rates somewhere between 0 and .25% through June 24th, 2009. Currently, the Ten Year yield is at 2.75% (2.85% yesterday) Mortgaged Backed Securites are trading in a narrow range and are currently down .125% in price from yesterday close.

Kirk Mulhearn is the Manager for the Long Beach office of Prudential California Realty, "The Bixby Knolls Office." In addition, Mr. Mulhearn co-manages a branch of GEM Mortgage, a direct lender that originates Conventional, FHA, and VA loans. He may be contacted at: 562-989-4608 ext. 110

Subscribe to this blog at: www.longbeachrealestateandloans.com

Long Beach Mortgage Report: CalSTRS is one of the easiest best loans to get

Prudential California Realty/Gem Mortgage — Mon, 23 Feb 2009 12:37:29 -0600

Long Beach, CA. Notice to all school teachers: Take advantage of the 80/17/3 CalSTRS lending program as soon as you can. This is no doubt the easiest way to purchase a home if you are a school teacher. The way it works is like this: The investor will make a first trust deed at 80% of the sales price. There will also be a silent second trust deed behind the first trust deed at the same interest rate as the first for five years. Today's rate is 5.5% for both the first and silent second for a 30 year fixed loan. The only down payment required from the teacher is 3% of the sales price! Note this is .5% less then what HUD is requiring through an FHA loan and better pricing, too! If you are a school teacher, contact Kirk Mulhearn at 562-989-4608 ext. 110 and get pre-qualified and your DU Certificate today.

Surprise, nationwide new homes sales fell to an annualized rate of 324000 units, that means that less then 27000 new homes are moving a month. It is very evident that some of the best buying opportunities are in the existing homes inventory on the multiple listing services. We need to absorb the available housing that we have rather then continue to build. Although, builders are trying to be very creative in giving bonuses, free kitchen appliances, and upgrades the sales will still be sluggish until the credit markets ease up.

Last week the equity market continued in negative territory waiting for the government to decide to nationalize or provide more capital to the Banks. Bank regulators said they stand "firmly" behind the nation's banks and will begin examining this week whether they have enough capital to survive if the downturn in the economy becomes any sharper. Banks that are not able to raise money privately will have access to government funds. Treasuries have fallen this morning, especially on the long end of the curve, on speculation that the government may purchase up to a 40% stake in Citi, leading to more treasury auctions to fund this transaction. Stock market is currently down 80 plus points. Gold is $989, oil is $40.00 a barrel and the Ten Year yield is at 2.85% (2.76% on Friday). The 30 year fixed MBS market is current off .125% from the close on Friday.

Part of this bank examination is where the regulators will conduct "stress tests" on the financial condition of the nation's 20 largest banks in an effort to determine how they will fare if the ongoing economic slump deepens. The tests come as concerns mount among analysts and investors regarding the Treasury Department's broad plan to shore up America's banking system, details of which may not be available for weeks. As further proof of the distress banks are under, Citigroup reportedly was in active negotiations with regulators this past week concerning plans for the federal government to take a larger ownership interest in the bank.

Meanwhile several Republican governors are debating President Obama's economic stimulus package and how to address budget shortfalls at the state level. At the annual winter meeting of the National Governors Association, some governors said the GOP should compromise with Democrats, but their more conservative colleagues said they should reject new spending and taxes to regain the trust of the party's base. And in the case of upmanship, the California Governor said he will accept any bailout money other states would not accept. Those of you in California, now know the State budget passed, get ready for some added serious money to come from your wallet for taxes and when you register your vehicle

It is truly insane to raise taxes during an economic downturn; nevertheless, our politicos in Sacramento did just that! Look, the State of California has over 200000 employees, and they have hired over 70 people a day, either directly or indirectly for the last 10 years. No wonder, we are sinking into the Pacific.

And last week, Secretary of State Hillary Clinton urged China to continue buying U.S. Treasury bonds to help finance President Barack Obama's stimulus plan, saying "we are truly going to rise or fall together." Do you think she could have told them to buy Mortgaged Backed Bonds as well? If you think we have it bad, consider being one of the over 25 milllion Chinese that have been recently terminated. Reason? Lack of export demand; especially from the USA.

Kirk Mulhearn, a Long Beach Real Estate Broker and Professional Mortgage Planner can be reached at: 562-989-4608 ext. 110

Subscribe to the blog at: www.longbeachrealestateandloans.com

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"You can't live a perfect day without doing something for someone who will never be able to repay you."

-John Wooden