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Appraisal Rule Hurts Homeowners - Mortgage by Randy Newsletter - Nov 2009

Randy Mitchelson, Licensed Mortgage Professional — Wed, 18 Nov 2009 09:27:40 -0600

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, November 2009

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In Issue 20 We Touch On:

Appraisal Rule Hurts Homeowners

Secret Behind "Positive" Economic News

Foreclosure Prevention Tool Kit

As we enter the holiday season our government is doing its best to deliver gifts in the form of packages of stimulus cash. Since the American consumer has wised up and undertaken a strategy of paying down credit card and home equity debt and stashing any extra into savings, the government is trying to pick up the spending slack. The fact that there are so few prudent protectors of taxpayer money in Washington is a sad state of affairs. BREAKING NEWS: at the time of this writing, Congress has extended the First Time Homebuyer Tax Credit which was set to expire on November 30, 2009. The tax credit is now extended to home purchases put under contract prior to next April 30. Homeowners who have owned their current residence for at least five years are now eligible for a tax credit if they choose to sell their current home. We will focus more on this money saving opportunity in future newsletters.

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: New Regulatory Rule Is Hurting Consumers and Home Values

The Home Valuation Code of Conduct (HVCC) was implemented on May 1, 2009. The rule was created by the New York Attorney General Andrew Cuomo as an agreement between Fannie Mae and Freddie Mac (GSEs), their new regulator the Federal Housing Finance Agency, and the NY Attorney General's office. The intent of the rule is to reduce coercion of appraisers. However, the rule is overreaching, and has negatively impacted consumers across the country. The HVCC was never reviewed or voted upon by Congress, has failed to follow necessary regulatory procedure, and has the following effects on our income, home values and local property taxes:

1. The HVCC increases costs for those refinancing or purchasing a home. If a consumer changes lenders while shopping for a mortgage, multiple appraisals will be needed.

2. Because lenders are picking out-of-area appraisers to conduct appraisals, the appraisals are inaccurate and are lowering home values. This causes two negative results: it lowers home equity value even if you are not refinancing a home and, more importantly, these appraisal inaccuracies are lowering the tax base of your community. This requires taxpayers and voters in your area to either pay more taxes or experience reduced funds for schools, roads, and other service expenditures.

3. This single agreement, not voted on by Congress or issued by any Regulatory Agency, is costing consumers billions of dollars and making it harder than ever to refinance or purchase a home.

Personal Credit: Time For Year End Credit Report Inspection

One of the credit report strategies we coach people on is to spread out your access to free credit reports over an entire year. All consumers are legally entitled to receive one copy of their credit report from each of the three major credit bureaus (Experian, TransUnion and Equifax) one time per year. Reminder: this entitlement does not include free access to your credit score. Instead of inspecting all three versions of your credit history at one time, you can check one every four months. For those of you that already follow this strategy or even if you want to implement it now, this is a great time to do it. The distractions of the holiday season may cause you to delay doing this so why not cross it off your "To Do List" now? The only truly free web site that you can use to do this is www.annualcreditreport.com. 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: Beware Of Happy Headlines About Economic Growth

A series of cause and effects is leading our national economic statistics to return to positive territory. However, there is another story behind the numbers so consumers and investors should remain cautious. Follow along with this sequence of economic facts:

Consumers have been scarred by "The Great Recession" and continue to retrench, lowering their spending and increasing their savings (including paydown of debt)...

Less spending by consumers leads to higher inventory levels for manufacturers (i.e., more washer/dryers sitting in the warehouse)....

Higher inventories force manufacturers to slow production of new goods and accelerate consolidation via mergers and closures of plants and warehouses....

Closures and mergers leads to higher unemployment....

(Here's where it gets ironic)

Inventory levels have already been cut to the bone so manufacturers have to produce a little something. They can do this without hiring new staff. This small increase in production will lead to a higher Gross Domestic Product (GDP) which is the headline grabbing statistic we often hear about. The lesson here is to not get excited about rising GDP. Until we see a reversal in the unemployment trend our economy will continue to teeter.

Question of the Month: Where Can I Get Reliable Mortgage Help To Avoid Foreclosure?

The FDIC recently launched a new Foreclosure Prevention Initiative for consumers. For a free tool kit of valuable information on how to avoid unnecessary foreclosure, options to stay in a home and guidance on avoiding foreclosure scams, contact the FDIC at 1-877-ASK-FDIC (1-877-275-3342) or through the web at Foreclosure Prevention Tool Kit. Available at this link is an informational tool kit that includes:

1) "Is Foreclosure Knocking at Your Door?" brochure

2) "Beware of Foreclosure Rescue Scams" brochure

3) FDIC Consumer News, Spring 2009, with articles on getting a loan modification and avoiding foreclosure "rescue" scams

4) "Your Own Home" module in the FDIC's Money Smart adult financial education curriculum

Giving Back: Supporting Our Communities - Cash Back Program For Holiday Shopping

We all know about the constantly rising costs of college. Recent reports reveal that despite the economy, institutions of higher education continue to raise tuition rates. You may have your own kids to plan for or you might have nieces, nephews, cousins or friends with kids. Have you visited Upromise.com? This service provides a way for you to turn your everyday shopping into college savings which you can assign to any child in your life. Even people without their own kids can use Upromise.com to donate college savings to their friend's kids. This service is free, easy and secure. If you have ever purchased something on the Internet you should definitely check this out.

Most of us already go online to shop at Barnes and Noble or order from 1-800 Flowers and by linking to these sites through Upromise.com you will earn these rebates. That's it! No special codes or downloads. There are offline earnings too like at Mobil, Staples and McDonalds. Rebates are there for the taking at restaurants in your area and you also earn money back for buying everyday groceries at supermarkets and stores like CVS. The list of participating stores is huge and continues to grow.

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 5^th day of each month and we will do our best to include your information in the next issue.

Have a wonderful Thanksgiving. After celebrating a World Series win in New York City, including a ticker tape parade, it's nice to be settled at home again. We will get a rare chance to see our beloved Syracuse Orange play the Florida Gators in Tampa Dec 10 and then off to Disney for a few days of holiday magic.

Randy

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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.

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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 financial products. Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate 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.

SAMANA : THE DR'S RISING STAR By Guitze M. Messina

Randy Mitchelson, Licensed Mortgage Professional — Sun, 15 Nov 2009 23:16:21 -0600

S P E C I A L F E A T U R E S

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.

Click Here to see Related Articles

Sosua, Dominican Republic

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.

For more information:
CLICK HERE

NEW OPPORTUNITIES

Golf

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.

Email : Guitze M. Messina

Get Your Free Identity Score - Mortgage By Randy Newsletter - Oct 2009

Randy Mitchelson, Licensed Mortgage Professional — Sat, 17 Oct 2009 23:03:05 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, October 2009

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In Issue 19 We Touch On:

Obama Eases Underwater Refi Rules

Free Identity Score

Free Music Online

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.

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.

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.

Randy

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You have permission to publish this article electronically or in print as long as the following is included:

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.

Credit Score Myths - Mortgage by Randy Newsletter - Sept 2009

Randy Mitchelson, Licensed Mortgage Professional — Thu, 17 Sep 2009 01:22:03 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, September 2009

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In Issue 18 We Touch On:

New Truth In Lending Law

Credit Score Simulators

Home Purchase Timeline Tips

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....

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.

Fall is here and we are ready for baseball playoffs and the Food and Wine Festival at Disney.

Randy

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You have permission to publish this article electronically or in print as long as the following is included:

R.I.P. Colonial Bank - Mortgage by Randy Newsletter - Aug 2009

Randy Mitchelson, Licensed Mortgage Professional — Thu, 17 Sep 2009 01:17:25 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, August 2009

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In Issue 17 We Touch On:

R.I.P. Colonial Bank

Easier Access to Personal Loans

Foreclosure Impact on Credit Scores

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 3^rd largest FHA mortgage lender in the U.S. and 12^th 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.

Home sweet home.

Randy

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$8000 Tax Credit - Mortgage by Randy Newsletter - July 2009

Randy Mitchelson, Licensed Mortgage Professional — Fri, 17 Jul 2009 01:15:54 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, July 2009

=========================================================================================================================

In Issue 16 We Touch On:

$8,000 First-Time Homebuyer Tax Credit

Credit Tips for Divorcing Couples

Private Mortgages

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....

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.

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

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Free Loan Modifications - Mortgage by Randy Newsletter - June 2009

Randy Mitchelson, Licensed Mortgage Professional — Fri, 19 Jun 2009 09:40:01 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, June 2009

===============================================================================

In Issue 15 We Touch On:

Free Loan Modifications

Good & Bad of New Credit Card Regulation

Fixing Credit Report Errors

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....

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.

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!

Randy

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____________________________________________________________________________________

You have permission to publish this article electronically or in print as long as the following is included:

Improve Your Credit Score

Randy Mitchelson, Licensed Mortgage Professional — Mon, 18 May 2009 23:59:35 -0500

How Long Does It Take to Improve My Credit Score?

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.

Mortgage Law Would Hurt Consumers - Mortgage by Randy Newsletter - May 2009

Randy Mitchelson, Licensed Mortgage Professional — Mon, 18 May 2009 23:55:52 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, May 2009

======================================================================================================================

In Issue 14 We Touch On:

Politicians Write Bad Mortgage Legislation

Americans Put Away Credit Cards

Buying Credit Scores

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 Market: Politicians Endangering Consumers & Mortgage Professionals

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.

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

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You have permission to publish this article electronically or in print as long as the following is included:

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.

New Obama Mortgage Refi Law - Apr 2009 Mortgage by Randy Newsletter

Randy Mitchelson, Licensed Mortgage Professional — Mon, 27 Apr 2009 00:01:58 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, April 2009

==========================================================================================================================

In Issue 13 We Touch On:

$8,000 Tax Credit for First-Time Home Buyers

New Mortgage Refinance Law from Obama

Tax Tips for Divorcing Spouses

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

Visit the IC3 website for Internet crime prevention tips as well as a listing of known and on-going Internet schemes.

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.

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

____________________________________________________________________________________________________________________________________________

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.

New Company Law Enacted March 14th, 2009, Dominican Republic

Randy Mitchelson, Licensed Mortgage Professional — Sat, 21 Mar 2009 15:03:28 -0500

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):

• Minimum capital: RD$30,000,000 (approx. $850,000 US).

• 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.

Impact of Name & Address Typos & Variations on Your Credit Score - Mortgage by Randy Newsletter - March 2009

Randy Mitchelson, Licensed Mortgage Professional — Sat, 21 Mar 2009 14:56:11 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, March 2009

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In This Issue We Touch On:

Impact of Name & Address Variations on Credit Reports

Update on Futile Government Economic Intervention

Can "Bad" Economic News Be "Good"

March has turned into a very productive month in the office. Mortgage inquires are on the rise. Demand for credit seminars is growing as well. Fifth Third Bank hosted a credit seminar on March 19 in Naples. We welcome the new readers that attended and thank you for the great questions. On March 26 I will be presenting to a group of residents in Estero, Florida. If you would like to host a one hour credit seminar at your company (great employee perk or customer retention strategy) contact me for details. On to the news....

Mortgage Market: More Examples of Government "Pushing On A String"

Mortgage rates remained flat in recent weeks but the recent announcement by the Federal Reserve that they will begin purchasing hundreds of billions in mortgage backed securities and long term treasury notes is designed to artificially drive market rates lower. Remember, the Federal Reserve has already used all its bullets in cutting the discount rate (the rate the Fed charges for loans to commercial banks). Most of our variable rate credit cards, mortgages other adjustable rate loans are indirectly tied to the discount rate. That rate is just above zero so that tool has been exhausted and this new plan is the next in the long line of programs that have been released since last summer.

Remember the hoopla around the Hope for Homeowners program last summer? At last count, this program has helped a whopping 25 homeowners. Worse, the massive effort to encourage loan modifications is also failing, but not in the way you might expect. Loan modifications are indeed happening in great numbers (note: if you missed it read last month's newsletter on Nightmare Loan Mods). However, the untold story is that 55% of homeowners that benefit from a loan modification still end up defaulting on their mortgage after about 6 months.

Personal Credit: The Dreaded AKA and OKA on your Credit Report Could Cost 5+ Points

One of the lesser known factors in calculating a credit score involves the number of variations of your name and address that have been used to apply for credit over the years. AKA stands for "also known as" and OKA stands for "other known addresses". These two sections toward the end of your credit report capture a history of all the different versions that have been captured over time. If this list grows lengthy it can have a minor negative impact on your score. Five or ten points may not sound like much but for some people it can be the difference between a 715 score and 720 score which for some lenders means you would be in a lower tier of credit and have to pay a higher interest rate and/or higher down payment for a car or home.

Think about the process that takes place when you apply for a credit card or loan. Sometimes, you fill out a paper application which is then processed by another person who types in the information. Sometimes you dictate your personal information over the phone to a processor. In other situations you might type your own information on an Internet application. These different methods can give rise to mistakes, typos, inconsistencies, etc.

For example, let's use our Peanuts Gang friend Lucy van Pelt as an example (yes that is her real last name- don't you play Trivial Pursuit?!). Lucy goes on the Internet to apply for a credit card. She types Lucy in the first name field, "A" (for Anne) in the middle initial field and van Pelt in the last name field. Eventually, on the AKA section of Lucy's credit report it will show "Lucy A van Pelt". On Lucy's car loan application, there is no field required for middle name so upon submission of that application her AKA section will record "Lucy van Pelt". Then, Lucy goes to Target and they are running a 15% off promotion if you apply for a Target credit card. Lucy agrees, and they put her on the phone to provide her personal information. The Target rep on the phone listens to Lucy carefully and types "Lucy A Vanpelt" into the application (note the no space between van Pelt). Lucy becomes a psychiatric doctor and her public relations staff encourages her to change her name for publicity purposes to L. Anne Van Pelt because it "sounds cool and distinguished" and helps dismiss public association with her cartoon persona and negative perception about her qualifications as a doctor.

With her new alias and career, Lucy now buys a house. She shops around for a mortgage and her credit is pulled a few times using "L Anne van Pelt" and "L Ann van Pelt" and on one application with no middle name field she puts simply "Anne van Pelt". Lucy's career takes off with consistent appearances on Oprah and Dr. Phil, and she eventually meets and marries a Hollywood star named Charles Brown. Against her handlers' wishes, Lucy legally takes the last name of Brown and the happy couple buys a condo in the Bahamas. Lucy's name on the condo association application? You guessed it - "L Anne van Pelt Brown." However, the application form for the condo mortgage didn't have room for all 4 parts of Lucy's name so it says "L Anne Brown". The power company required a credit pull before they would extend Lucy and Charles credit to turn the lights on in their condo and on that credit check, the power company rep typed in "Ellen Van Pelt Brown" (say it out loud and you can hear how this could easily happen over the phone).

Already, there are 9 variations or "AKAs" recorded on Lucy's credit report. Women are especially susceptible to this credit challenge due to name changes from marriage (and divorce). Hispanics also face this challenge because in their culture many people have a surname included in their full name (ex. Carlos Enrique Ramiro Mendoza). Since most US credit applications only accept first, middle and last name fields, it is easy to see how a lot of AKAs can be generated.

We have not talked about OKAs, but it is the same concept. Small variations in your address due to typos (or putting Ave. instead of St.), combined with a number of legitimate address changes can create a long list of OKAs.

When you monitor your credit report throughout the year, keep your eye on these two sections of your report to help keep your history as clean as possible. Remember, that the impact of AKAs and OKAs is minimal, but for borderline credit scores can make a big difference.

Economy & Financial Insights: We Are In a Catch-22 Situation

When is bad economic data good news? If the data is "less bad" than prior months', it alerts us that a positive trend may be emerging. For example, retail sales are still slumping (bad news) but improved in February compared to previous months (good news). Housing prices continue to deflate (bad news for some) and are becoming more affordable in some neighborhoods (good news for first time homebuyers). However this deflation is keeping many homebuyers on the sidelines waiting...waiting....waiting for lower prices (bad news) and maybe a lower interest rate.

Last month we reported that our national savings rate had climbed to 2.8% in November. January 2009 data was recently released and our savings has climbed to 5% (good news). As people shift their behaviors and pay down debt, the flow of discretionary spending away from purchases continues to stall our economic recovery (bad news for retailers). For each piece of news there are almost always two opposing interpretations. Depending on which news source you are relying on, could influence your interpretation of the facts.

Question of the Month: Will My Credit Score Go Down if I Pull My Own Credit Report?

NO!!!! You have a legal right to a free credit report from each of the three credit reporting agencies one time per year. Accessing the three reports will NOT impact your score at all. This is one of the many myths out there about credit. The BEST source to access your free annual credit reports is www.annualcreditreport.com. Do not be fooled into using any other source. This free service will NOT provide you with your scores (ask yourself other than curiosity why do you need your score anyway) but you will get a complete credit history.

There are many television and Internet advertisements for "free" credit reports. Many of these are bait and switch gimmicks which involve you paying upwards of $30 to purchase your 3 credit scores and then the companies "give" you your credit report for free. Buyer Beware! If you are ever in doubt, just email me.

Giving Back: Supporting Our Communities -

The American Diabetes Association (ADA) annual Tour de Cure is a series of cycling events held in 40 states nationwide. This event raises millions of dollars for diabetes research. Click here to learn more about Tour de Cure and find the closest event to where you live. Our friend Adam rides in this event each year and as Adam says, "Diabetes does not take any time off just because the economy is down". Most of us know someone affected by diabetes and in their honor, let's support Adam's cycling team with whatever feels good from your wallet. It is easy and safe to do your part by making your tax-deductible donation on Adam's web page.

The ADA treats personal data such as credit card information as critical assets that must be guarded at all times against loss and unauthorized access. To ensure the security of credit card and personal information, this Web site employs industry-standard security methods, including the Secure Socket Layers (SSL) protocol for the encryption of transmitted data.

Randy

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___________________________________________________________________________________________________________________________________________

You have permission to publish this article electronically or in print as long as the following is included:

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.

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 (www.swfrtp.org) and Vice President, Strategic Planning for the Michelle's Angels Foundation (www.michellesangels.com). He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.

Nightmares of Loan Modifications - Mortgage by Randy Newsletter - February 2009

Randy Mitchelson, Licensed Mortgage Professional — Sat, 21 Mar 2009 14:51:35 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, February 2009

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In This Issue We Touch On:

Loan Modification Nightmares

Tips to Handle a Collection Agency

Benefit of Pre-Approval Letters

Is that a stimulus package in your pocket or are you just happy to see me? Just how many spouses of our elected officials used that line recently is the real $800 billion question! Now is a good time to buy stock in companies that manufacture printing machines. The government will be requiring a lot more printing presses to create all the money committed in this law. A necessary evil? Only time will tell, but no doubt our government has less than a stellar track record of positively impacting our economy with spending legislation. On to the news....

Mortgage Market: Another Potential Homeowner Nightmare: Loan Modifications

In the right circumstances, a mortgage loan modification can be an effective strategy for a homeowner who is behind on their payments due to job loss or other catastrophic life events. However, with the massive amount of delinquent homeowners combined with the rash of media attention the housing and mortgage market is receiving, unscrupulous people have started cold calling homeowners to offer loan modification services and making thousands of dollars in fees, much of which is unearned.

The scam goes like this.....you, the homeowner, regardless of whether you are behind on your loan, receives a phone call or email from a loan modification "specialist" offering a service which will allow you to skip making mortgage payments and eventually reduce your mortgage balance and future payments. The "expert" informs you that it will take several months before the bank gets serious about collecting on your loan so you can pocket all those unpaid mortgage payments. Then, when the bank finally comes after you, the loan modification company promises to represent you to renegotiate your loan balance and payments to get you a lower balance and payment. Sound too good to be true? It is.

First, if you are not behind on your mortgage, why in the world would you let someone convince you to stop making your payments to the bank? This will ruin your credit rating for years. One thing is true: banks, due to their huge backlog of bad loans, will take several months to begin aggressively coming after you. So what? By then, your credit is tarnished, you are wearing the scarlet letter of being a delinquent borrower, and your family name is duly recorded in the county public records as being sued for foreclosure. Heck of a triple crown there. Oh, and by the way, your fate is in the hands of that loan modification company that you already paid $2500 or more to. If you receive an offer like this, run away.

For anyone that is legitimately in trouble with their mortgage, there are a number of FREE services available to try first. Previous editions of this newsletter have addressed some so visit our blog site to read the back issues. As a last resort, retaining a competent real estate attorney to represent you in a loan modification effort is ok and many lawyers are achieving success getting folks a revised loan. If you are ever in doubt as to what to do, just get in touch with me for advice. Note: for my Florida friends please note that Florida State law BANS the collection of any upfront fees for loan modification services.

Personal Credit: How to Deal with a Collection Agency

Collection agencies purchase delinquent accounts from creditors like Home Depot, Sears, Verizon, etc.

It takes 4-12 months before the creditor gives up trying to collect a bad debt and they sell the account for pennies on the dollar to a collection agency. At that point, it is usually too late for the debtor to deal with the original creditor. The first step in working with a collection agency is to validate the debt. This is done by written request. You can contact me for a template of the letter. The letter should be sent via certified mail so that you have proof of it being received.

The letter accomplishes several things to protect you. First, you will require the agency to send you written proof that the debt is indeed yours. Second, the letter will prevent you from receiving harassing phone calls at home or work. Third, it puts the collection agency on a 30 day deadline within which they must comply with your request. Finally, the letter is written in such a way to inform the collection agency that you know your rights as a consumer and will not hesitate to exercise those rights to the fullest extent of the law if the collection agency fails to meet your conditions.

Economy & Financial Insights: We Are In a Catch-22 Situation

Roughly two-thirds of our economy is driven by consumer spending. Since most of us are spending less these days, our economy continues to spiral downward. Does that mean we should spend again?

People are learning how to be more frugal. Consumer oriented websites like wisebread.com are educating people about how to save on food bills and other everyday expenses.

Debt is also an addiction that many Americans are dealing with (not to mention our government). Our collective savings rate was 0% during the "boom" years and now that our economy has gone "ka-boom", our savings rate has already increased to 2.8% as of November, according to a Kansas City Star article. Today, people are more focused on paying down debt, but only a few years ago they were using their homes as ATM machines and their credit cards like water to buy new cars, new TVs, bigger houses, stainless steel appliances, front loading washers, game systems, iPods and anything else their heart desired. Good for the economy? Not in the short term, but over the long run, a reduction in our collective $52 trillion in debt is good for our financial standing in the world and our moral fabric.

Question of the Month: Do I Need a Pre-Approval Letter When Shopping for a Home?

Most licensed real estate and mortgage professionals will advise that you obtain a pre-approval letter from a bank or mortgage broker. There are several benefits of doing this. First, when you are house shopping, a seller will take you more seriously. When a seller has more than one party making an offer, a buyer that already has pre-approved financing will oftentimes be awarded the sale even if their bid was slightly lower than a competing party without a pre-approval. Second, it saves time down the road. Mortgages, on a good day, take a minimum of 2 weeks to get done and in these times of super scrutiny, 2 weeks can often turn into 4 weeks or more. To obtain a pre-approval you will need to provide preliminary documentation like a W-2 and paystub and in most cases a credit review. Therefore, a pre-approval gets the ball rolling earlier in the home buying process. Pre-approvals should not take more than 24-48 hours once the required documentation has been provided. They should be free of charge too (except for the cost of pulling your credit report)

Giving Back: Supporting Our Communities - CCCS: A Reliable Resource for Financial Counseling

Consumer Credit Counseling Service (CCCS) is a nonprofit organization dedicated to financial wellness. Whether you need help getting out of debt, or into a new home, CCCS has a team of nationally certified counselors that undergo continuous training and education so that they are always in the best position to help. There are other companies out there that offer debt consolidation services, etc but some of them are scam artists and are simply trying to profit from those that are in trouble already.

The boys of summer have arrived & spring training is underway....yet another perk of living in paradise.

Randy

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________________________________________________________________________________________

You have permission to publish this article electronically or in print as long as the following is included:

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.

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 (www.swfrtp.org) and Strategic Planning Director for the Michelle's Angels Foundation (www.michellesangels.com). He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.

Credit Scores Impacted by New FICO Model - Mortgage by Randy Newsletter - January 2009

Randy Mitchelson, Licensed Mortgage Professional — Sat, 21 Mar 2009 14:47:36 -0500

Mortgage by Randy

monthly update to our clients, colleagues, family & friends

By: Randy Mitchelson, January 2009

=========================================================================================================================

In This Issue We Touch On:

Government Marketing Gimmicks

New FICO Model Puts Your Score at Risk

Real Life Example - Should I Refinance?

The era of hope and change is upon us as we officially transition to the Obama presidency this month. Faced with economic and confidence challenges of historic proportions, Obama has an uphill battle. Although a honeymoon period is inevitable where the stock market rebounds, Congress passes trillion (yes with a "t") dollar stimulus legislation under the banner of job creation, and interest rates and fuel prices float within consumer friendly ranges, the honeymoon will end and reality will smack us in the face. No one can say for sure when. An international crisis could hasten things (terrorist attack, escalation of Israel's actions, Pakistani use of nuclear weapons, etc).

The popular question these days is how long will this recession last? Most predictions you read will be wrong and only right by accident. However, it is safe to say that there is plenty of more bad news to come and despite government's best efforts to borrow and spend at unprecedented levels, it is pure market forces that will rule the day. Just as it took several years to reach this point, it will take several years to work out of it. Economics is cyclical just like the seasons of the year.

What does all this mean to you? First, if you have a job, make yourself indispensable so that you keep it. If you are out of work, take the steps necessary to get working, even if it means a cut in pay. Save money and lower your luxury expenses (Starbucks, plasmas) so you have a cushion to fall back on. Keep stashing money into your retirement plan and in the short term consider investment options that are cash and highly rated corporate bond focused. Ease into stocks and stock funds on days when the market is the big news because of big declines.

Mortgage Market: Interest Rates Still Grabbing Headlines Thanks to Government Gimmicks

Mortgage rates are relatively unchanged since the last newsletter. However, based on headlines, you would be lead to believe that rates have continued on a sliding trend. The government entities that purchase many mortgages, like Freddie Mac and industry lobbyists like MBAA stole a marketing tactic from the banks to create the appearance of lower rates! They assumed points into their calculation of national average rates. The higher the points, the lower the rate. The desired outcome was achieved as mortgage rates are top of mind thanks to water cooler talk and nightly news stories.

Personal Credit: New Credit Score Formula May Impact Your Score

A more newsworthy headline that the media seems to have overlooked is that the formula is changing for how our credit scores are calculated. Remember hearing that in the news? Didn't think so, but you are getting the facts here. Starting this month, the 3 credit bureaus will begin offering lenders the latest formula from Fair Isaac (the company that owns the credit scoring formula commonly known as FICO). Fair Isaac says that the new score will do a better job predicting defaults than the current formula (used by more than 90% of US lenders). The new formula, called FICO 08, is more sensitive to your credit utilization and will penalize you even more if you use a high percentage of your available credit. Last month we explored the impact of banks slashing credit limits or closing your unused credit cards. FICO 08 will exacerbate the impact of these actions. Also, FICO 08 will be more harsh for consumers who have "thin" credit (i.e., not a lot of credit accounts).

It is not all bad news for consumers with FICO 08. Here are a few victories:

1.Small Collections: Unpaid medical bills and other small accounts under $100 will be ignored.

2.Serious Chargeoffs: FICO 08 will be more forgiving to consumers that have had a serious chargeoff IF their other accounts are in good standing (big if !).

3.Authorized Users: Despite massive efforts by credit bureaus to ignore "authorized users", consumer groups ultimately won this battle. Although there is corruption which goes on where people with good credit can "lease" their accounts to a person with bad credit for a fee, it was determined that the impact to spouses would be too severe. In other words, if the credit bureaus had their way, if a credit card was approved in a husband's name and the wife was listed as an authorized user, the account would not count toward the wife's credit score.

As always, if you need assistance navigating the sea of confusing credit report information, contact me about a credit analysis service where you can get a personalized action plan to manage to your credit.

Economy & Financial Insights: Lower Interest Rates Help Homeowners with Adjustable Rates

Last year we heard doomsday scenarios about how the housing crisis will be even worse in coming years as homeowners with various types of adjustable rate mortgages (ARMs) reach their first adjustment point. The rate indices used to do this forecast were much higher back then and have since declined significantly. In fact, homeowners facing a rate adjustment today are likely to see their payment decrease! By no means is this a cure to the housing woes. Due to job losses and risky investments in second and third homes, there are many people still facing foreclosure even if their rate is zero.

Nevertheless, market forces have once again trumped government action and the laws of supply and demand are helping the housing industry fight its way back to equilibrium. Housing inventory stills sits at about 12 months nationally and new foreclosures are hitting the market regularly. This piece of the housing puzzle will take a couple of years to be resolved.

For people who have saved for a home and managed their credit wisely and avoided carrying debt, this is a historically optimum time to purchase a home. Yes, you can get a loan and you have pick of the litter from all the homes on the market. These buyers are like kids in a candy store. Also, for investors with cash on hand this is also a great time to purchase depreciated homes for 50 cents or better on the dollar. In Southwest Florida, homes with boat access to the Gulf of Mexico can be purchased for $250,000 or less. Given the horrific winter this year, many Northerners are jumping at this chance to live the dream of relocating to paradise where they can fish, swim and sun year round in a state with no income tax, a commitment to "green" living, and baseball every spring.

Question of the Month: Should I Jump at an Offer to Refinance to 4.25% by Paying 2.125 Points?

This scenario was presented to me recently by a fellow alumnus from Rensselaer. It is a common scenario that homeowners face and although lowering your interest rate seems like common sense there is more to this scenario than meets the eye. A licensed mortgage professional should always perform a break even analysis for you to help with the decision making process. Guess what? Your bank will not do this. The break even analysis is useful once you have an answer to the all important question - how long do you plan on living in this house?

The table above displays the basic elements of this scenario. First, notice that that loan balance for the new loan would rise about $7000. This is due to closing costs of the new loan including the 2.125 points (do not be intimidated by points - it is simply a fee paid to the bank to lower your rate - and is just a percentage of the new loan amount - 2.125% x $277,000 = $5886). Second, notice that the new loan is only a 20 year term. This alone will lower the rate without paying points since the bank is taking on 10 fewer years of risk. The new loan will allow the borrower to save interest and build equity faster, but how long will it take to earn back the $7000 rolled into the new mortgage? The table tells us 46 months. If the borrower is a young couple planning to have children that will require a bigger home within the next 3 years, this is not a good deal. However, if the borrower sees themselves living here for a long time, then this could be a great option for them. Other factors to consider that are too detailed to explore here are:

1. Tax Implication: the new loan lowers your mortgage tax deduction

2. Retirement: the $7000 rolled into the new loan could be invested elsewhere a better rate of return

3. Flexibility: You can pay down your mortgage without refinancing by just sending a principal reduction payment, but by refinancing you are locked into that new higher payment

Giving Back: Supporting Our Communities - Free Money to Donate to College Fund

We all know about the constantly rising costs of college. You may have your own kids to plan for or you might have nieces, nephews, cousins or friends with kids. Have you visited Upromise.com? This service provides a way for you to turn your everyday shopping into college savings which you can assign to any child in your life. Even people without their own kids can use Upromise.com to donate college savings to their friend's kids. This service is free, easy and secure. If you have ever purchased something on the Internet you should definitely check this out.

In this economy, who else is giving away something of value?

Enjoy the pomp and circumstance of the inauguration as well as Superbowl XLIII.

Randy

___________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________________

You have permission to publish this article electronically or in print as long as the following is included:

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.

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 (www.swfrtp.org) and Strategic Planning Director for the Michelle's Angels Foundation (www.michellesangels.com). He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.

With new courses and resorts opening up, golf in the Dominican Republic just keeps getting better

Randy Mitchelson, Licensed Mortgage Professional — Wed, 21 Jan 2009 14:03:10 -0600

The Player's Paradise

LC Lambrecht

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Trip Planner: Dominican Republic

With new courses and resorts opening up, golf in the Dominican Republic just keeps getting better

From November - December 2008

by Mike Offit

To a man stranded in the desert with an empty canteen, the difference between natural spring water and a trickle from the tap is hardly relevant: It's all good. To a Northeasterner in February, his home course entombed in ice and snow, the thirst for golf is just as desperate. At times like this, the vision of a white ball sailing into the deep blue sky over the turquoise sea appears like a mirage, lingering with the faint sound of steel drums and the scent of rum, just out of reach.

Golf in the Caribbean used to rely on that winter longing, when sunburned visitors were happy to play burnt-out courses with ancient carts and jaded loopers (ever met a Jamaican caddie who didn't tell you he's the best in the land?). But much has changed in the past decade, and these days announcements of new courses and luxury resorts seem to come every week.

The Dominican Republic, home of the first truly magnificent course in the Caribbean, Teeth of the Dog at Casa de Campo, has seized the lion's share of this new bounty. Long one of the West's poorest nations, the D.R., as it's known, is enjoying a luxury boom that will vault it to the highest echelon of golf destinations, and not just in this region. Development on the island's eastern coast has reached a breakneck pace; meanwhile, a hidden jewel has been produced on the north coast that is among the most dramatic and spectacular layouts anywhere. A recent trip to the Punta Cana area revealed a modern airport with nonstop flights from the East Coast on major airlines, roads that have been vastly improved, and massive new mega resorts under construction at Cap Cana and Roco Ki. These newcomers join the long-established Puntacana Resort & Club to yield a collection of diverse and aesthetically thrilling golf resorts, all with a welcome focus on exquisite accommodations and great service.

Casa de Campo

The destination that paved the way for high-quality Caribbean golf, Casa de Campo, remains at the head of the pack-for now. Teeth of the Dog, the Pete Dye creation whose signature sixteenth hole illustrates many of the "World's Top 100 Courses" lists, still has loads of bite and requires a reliable draw to post a respectable score. Dye's ubiquitous waste areas and swarming bunkers greet you on the first four holes, and the wind and ocean join the fray at the fifth. Number eight plays to a blind green-over which, on my last visit, I boldly airmailed a shot into the ocean. When I got to the green, a local boy handed me my ball, retrieved from the surf, in exchange for a fresh dollar bill. I felt an urge to tell him about my birdie at seven to wipe the smirk off his face, but when my chip dropped in he gave me a polite round of applause, no extra charge.

The seven-thousand-acre Casa de Campo, the model for the huge new developments ninety minutes up the coast, also includes the Links Course, an inland track with lots of waste areas and lakes, and Dye Fore, which plays on the ridge of the Chavon River and sets up a number of blind shots and challenging stances, along with dramatic views and greens you might need a surveyor's transit to read. Although neither reaches the rigor or thrill of their famous elder sibling, I have found both to be enjoyable and generally well-kept. The resort also has a world-renowned polo and equestrian center and can accommodate almost any sporting desire you might have, from shooting to tennis to deep-sea fishing. The new and stunning Cygalle Healing Spa has invigorating plunge pools and natural skin preparations cooked up on site. As an aging golfer, I never fail to use my aches and pains as an excuse to indulge in some serious pampering, and Cygalle's eponymous manager and creator knows exactly what's needed.

Ultimately, what Casa de Campo has lacked is a world-class hotel. That should change next year, when Four Seasons is scheduled to open a two-hundred-room facility. Until then, the main lodging option at the resort is villa rentals, and although the in-house program for them offers good properties and a range of services, you need to be careful and pick your villa or you might not like the one you're assigned. Another option is to book through a private agency, such as Villas Caribe. You get what you pay for, and if you've come in search of great lodging (yes, some of the villas are beyond spectacular), it can get expensive very fast. The beach options at the resort are limited and not in the same league as those at the other resorts, but after a day spent navigating Dye's waste areas and bunker complexes, sand is usually the last thing I want to see.

Puntacana Resort & Club

The Puntacana Resort & Club was this area's pioneer. The brainchild of Frank Ranieri and Theodore Kheel, together with Julio Iglesias and Oscar de la Renta, the resort is virtually next door to the airport. P. B. Dye designed Puntacana's playable and well-maintained seaside La Cana Course, which has wide swaths of waste areas and plentiful, pristine bunkering-more Scottsdale than Scotland.

As on most island courses, the wind dictates the difficulty factor at La Cana. Club selection can be a riddle at the par-three fifth, where on a recent visit a stiff breeze mandated a knockdown shot rifled seaward that carried back to a devilishly humped putting surface. This impeccable course builds to two finishing oceanfront holes, the eighteenth being a superlative par five. My caddie recommended coming in from the right side, but that was a daunting play to a horseshoe-shaped green bent around a bunker. Fortunately, his read on my par putt was outstanding. Plucking the ball from the cup, I repaired to the comfortable, modern Caribbean clubhouse, where food and drink are served on palm-shaded terraces overlooking the pool and beach just beyond.

The resort takes pride in its casual sophistication, and management focuses on sustainability and contributions to the local economy and culture. A second eighteen, set to open this winter, will help sustain the golf culture: Tom Fazio's Corales Course works its way from some seriously reshaped headlands down to the sea. The eighteenth, an extraordinary par-four Cape hole, curls above a broad aquamarine bay, offering seven sets of tees and an opportunity to saw off as much of the dogleg as you dare, with the approach to a peninsula green playing directly into the prevailing wind. Owner Ranieri has dubbed it the Mother of All Golf Holes, but I suspect some may use a slightly racier epithet. The resort is loaded with activities away from the courses, as well, including horseback riding, diving, kayaking, tennis, and visiting a particularly elegant spa. Its Tortuga Bay hotel, offering one-to four-bedroom villas, is first-class and great for families.

Cap Cana

Also in this area is Cap Cana, the first of two massive resorts under way ten minutes to either side of Punta Cana airport. It feels as big as many Caribbean countries, and at present its vistas include an endless procession of heavy equipment along thirty-thousand acres of high ridges and oceanside flatlands. The master plan calls for at least five golf courses, a vast array of private residences (five thousand or more), and multiple hotels, restaurants and other facilities in a half-dozen or so distinct developments.

Cap Cana's flagship course, the Nicklaus-designed Punta Espada, opened in 2006, and it's a challenging, deeply engrossing day of golf. Every hole feels different (the Champions Tour played its first event here in April, and the course more than held its own). The long, sinuous second is a par five that plays from elevated tees to the ocean six hundred yards away, with an inlet that, together with the wind and yardage, makes it a true three-shot test. The tenth is a classic short par four, with a green that's reachable in theory-a branch of physics that maybe a Bear or a Tiger might understand but for me means a layup fairway wood and a short iron to avoid the huge waste bunker and lake guarding the island green. I recently played the par-three thirteenth, 249 yards over the roiled sea, with a three-wood, the wind pushing my ball to the back of the green and winning me a high five from my caddie. The seventeenth provides another long carry over water to a snaking fairway, and the second shot at eighteen, along the beach, requires precision to hit a green that teeters over the water, fighting the breeze all the way. A finishing par for me here in a light drizzle was a happy segue into an eight-year-old rum and a fat Dominican cigar.

This winter Cap Cana will open the second of a planned three Nicklaus courses, Las Iguanas. The Sanctuary Cap Cana hotel, a seaside recreation of Colonial village architecture, opened last January. (The Sanctuary Spa is due to open this winter.) The two Island Suites are particular beauties, with bedrooms and baths perched above the breaking waves. The more intimate Caletón Club & Villas hotel opened early this year, its one-to four-bedroom suites flanking a lovely oceanfront club. An entirely self-contained facility with two restaurants and bars, it already rates as one of the Caribbean's best walk-out beach hotels. The Marina Village is almost complete, and along with the myriad restaurants that will open on the property, it will have every possible amenity and activity, including a spa, the Racquet Sports Village, and several more hotels, managed by Altabella, Sotogrande, Ritz-Carlton and Trump.

Roco Ki

On the other side of the Punta Cana airport is the second big resort being developed here, the 2,500-acre Roco Ki. Its initial eighteen is the Legacy, a spectacular Nick Faldo design (see "Best New Courses of 2008,") that is serviced by a large Westin hotel. The course is nicely routed through dunes, marsh and forest, but it opens to the sea at seventeen, a delicate par three on a headland that's perhaps even more dramatic than Pebble Beach's famed seventh. Coming home from the back tees on eighteen demands a massive carry over a deep sea chasm to the broad and verdant fairway, which plays uphill to the commanding concrete skyline of the new hotel. Ultimately the development will include more hotels, a casino, endless diversions and perhaps three additional courses-though the designers will be hard-pressed to surpass that lovely par three.

Playa Grande

If you've led a good life, the Dominican Republic's ultimate reward for you is a round at a little-known gem on the north coast, Playa Grande. (Some may advise you to try Playa Dorada. Ignore them. It's a pedestrian, poorly maintained budget course.) Charter a helicopter, rent a plane, hire a car: Do whatever you must to get to Playa Grande, about an hour east of Puerto Plata airport. One of Robert Trent Jones Sr.'s last executed designs, the course sits on a high plateau at the edge of a tropical rainforest. When you pull up to its simple pro shop and 1970s-era clubhouse, there is a tang of ozone in the air from the fine salt mist rising above the cliffs. The first two holes are solid warm-ups, but at the par-three third, 236 yards across an overgrown ravine, you realize something very unusual is happening here. The tee shot on the par-five fourth hints at trouble right, and your caddie points the line to the bunker at the far corner of the dogleg. As you walk over a bridge and then down the fairway, the back of your neck may begin to tingle. Opening up to your right is an immense and jaw-dropping view, the Atlantic sweeping a hundred feet below you into a long, articulated cove and to infinity beyond. The second shot is a classic gambler's play: To gain a distant promontory green and go for eagle, you have to allow for a draw wind and aim for Europe.

The course has twelve oceanside holes, each of them remarkable and perched atop those Brobdingnagian cliffs. The view from the seventh tee, a par three across a huge cove, may be unequaled in golf, combining the sixteenth at Cypress Point and the eighth at Pebble Beach with a shot of steroids. The drive at the par-five twelfth spans another massive cove, this one receding to the left, begging you to cut the corner. At the thirteenth, great plumes of water jet from a concave cliff wall when the waves are up, a hissing geyser that requires total concentration so as not to pull your tee shot into the briny deep. At the green, the pristine mile-long strand that gives the course its name stretches ten stories below. The par-three seventeenth plays slightly uphill and straight out into the ocean on salt-burned grass that lends the hole an otherworldly aura, as if it ascends directly to heaven.

Playa Grande may not be a secret for long. The new owner, a European real estate group named Dolphin Capital Investors, has entered into a partnership with luxury leader Aman Resorts to develop a boutique hotel and villas on that fine shoreline, and has retained Rees Jones to tweak his father's masterpiece. But as of February, the course was still in fine condition, and I saw only a handful of golfers-fellow worshippers, if you will, at the Dominican Republic's ultimate altar of golf.

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Randy Mitchelson, Licensed Mortgage Professional — Wed, 21 Jan 2009 13:57:22 -0600