MORTGAGE RATES REPORT

It's About How Hard You Get Hit And Keep Moving Forward

I'm going to give you a glimpse at greatness.  Amazing advice.  Tony Robbins couldn't give it to you this straight.  Zig Ziglar couldn't.  Only Rocky Balboa, the mythical but realistic character, created by Sylvester Stallone, could impart this wisdom.

From the sixth and final offering in the Rocky series:

I'll admit that I'm biased.  I grew up in Philly.  I was 10 years old when Rocky hit the theaters.  I ran up the Philadelphia Art Museum steps in high school at least 1000 times.  I identify with the Rocky character on so many levels.

I ordered Rocky Balboa, the final movie in the series tonight, and cried when I heard this.  Rocky is talking to his son who is a young man now.  His son is upset by his decision to fight, once again.

Here's the important line:

It ain't about how hard you you hit.  It's about hard you can get hit and keep moving forward.   How much you can take and keep moving forward.  That's how winning is done !   

Now if you know what your worth, now go on and get what your worth !   But you got to be willing to take the hits.  And, not pointing fingers and saying you ain't where you wanna be because of him or her or anybody.

Cowards do that and that ain't you!  You're better than that !

We're all better than that.  Thanks, Rocco.

Six Rules For Relevancy in Your Clients' Eyes

I've learned many lessons since I started as a financial services consultant some 19 years ago.  Perhaps the most important thing we, as a financial advisers can learn is that we must always establish relevancy in our client's mind.  If we're not giving advice that is VALUED, whether that value is perceived or real, by the client, we're dead in the water.

Here are some observations, or guidelines (I hate the word "rules") about how to remain as a trusted adviser in your client's eyes.

CLICK FOR THE SIX RULES

How To Read An Appraisal

Realtors should ask for a copy of the appraisal, both listing agents and buyer's agents.  If you are unclear about whether you have access to it, have the buyer and the lending institution sign a waiver before you execute a contract.  The waiver pierces the "privacy issue" we lenders love to throw in your face.

Who owns the appraisal? The lender owns the appraisal; the borrower pays for it and is entitled to it after the loan funds or is declined.  Lenders have 90 day to furnish it to the borrower.  The waiver, accepted by the lender and borrower requires immediate access to the appraisal report.

Appraisals are opinions of value and limiting conditions of that value by a human being.  They are not an edict from the Almighty above.  They are folded, spindled, and mutilated by 1-3 people before the value is accepted (especially nowadays).  Underwriters disagree, alter, and guess about value after reading an appraisal report.

Here are the quick things you should look for:

READ ON

The final section (or addenda) should include the appraiser's license and e&O policy.

Robert Kiyosaki: A Man For All ?

One of the most controversial writers in the past ten years has been Robert Kiyosaki, the author of Rich Dad, Poor Dad. Mr. Kiyosaki has said the things that everyone wanted to know but was afraid to ask; how are rich people different from poor people? He has written over 15 books about practicing techniques that wealty people use to acquire wealth through real estate, minimize taxes, and build businesses.

His first book, Rich Dad, Poor Dad, is most likely a piece of factional fiction (or fictional faction) about two different but influential personalities in his life.  I am somewhat disappointed in the way he "slams" his biological father.  He portrays him to be a man who really never "got it" when it comes to getting rich and implies that for all his education he wasn't all that "smart".  His biological father rose to the office of Superintendent of Schools in the State of Hawaii; I'd call that a pretty talented individual who worked hard to provide for his family.  I think Mr. Kiyosaki could have shown that "hero" a bit more respect in his writing.

His "Rich Dad", the father of a childhood friend, taught him and his friend some of the secrets to wealth.  His basic rules were to build businesses through "systems", minimize taxes through incorporating and investing in real estate, and pursuing entrepreneurial ventures. Al of these are excellent strategies to gather wealth.  While his storytelling gets the messages across extremely well, I feel that Mr. Kiyosaki trivializes the challenges of all three rules and makes them sound a whole lot easier than they are.

One of his books that really intrigued me was his second, Cash Flow Quadrant. He essentially breaks down the the way we earn money.  The book outlines the importance of paying yourself first (before the gov't) and the difference between good debt and bad debt.  Good debt is money you borrow to acquire or grow appreciating assets (mortgages or busines loans) while bad debt is associated with depreciating or no assets.

Cash Flow Quadrant also takes you through the four stages of earning money.  I feel that the best lesson from this book is that the WORST place to be is self-employed.  I also believe that this book influenced a generation of Realtors to think of their practice as a business" and contributed to the meteoric rise of "teams" in real estate these past ten years.

I met Mr. Kiyosaki in Phoenix (when I lived there) in 1999.  I found him engaging, committed, funny, and positive.  There have been many claims that his advice is recycled platitudes about money.  There have been questions about the veracity of his wealth claims.  Critics claim that his success came from MLM and selling books to MLM wannabes.  Critics also claim the his claims about his personal net-worth are inflated and unverified.  A cult-like following has developed from his readers and it is difficult to have a discussion with "true believers"about any criticism

In summary, Mr. Kiyosaki's books and articles are good reads with useful information. Like everything you read about "instant financial success" you should take them with a grain of salt.  Nonetheless, his simple approach of telling the truth about the naivete of the common man combined with his positive attitude to equality of opportunity makes his books worthy. His success in business is immaterial to the fact that he has made a tremendous impact on the lives of many through education.  Kind of like his Poor Dad did.

You definitely want to check out his books at the public library and will want a few for his personal library.

I am Facing Foreclosure

If you receive a notice of default (NOD) for your mortgage, you need to act quickly.   A NOD is a notification given if you have not made payments by the predetermined deadline (usually specified in your Deed of Trust).  It spells out repayment  (sometimes called curing) schedules and spells out  the foreclosure process and timeline.

You have until five business days before the foreclosure sale to cure the default. To cure the default you have to pay off missed payments, late charges, and fees for initiating the foreclosure. If you do not cure the default, the trustee can take steps to hold a foreclosure sale.

Four Steps You MUST take to prevent a Foreclosure in California.

HARD MONEY in California: Shylocks or Saviors?

Lenders throughout time have been a hated class because of the interest they charge for the money they lend.  Shylock, Shakespeare's character from the Merchant Of Venice, really didn't advance the lending industry's cause.  The underlying subplot in the Merchant of Venice was the Anti-Semitism displayed towards Shylock.  That Anti-Semitism was a result of xenophobia.  That same xenophobia exists today by the real estate industry's "old-timers" who fail to grow with the times and recognize hard money lenders for what they are; a much-needed niche in the mortgage market.

Alton Gary Simpson of Broker Magazine, published by Source Media, wrote a featured story in the June, 2007 issue about the growth of Hard Money Lending and the void these lenders fill .  I think you'll find, after reading the article, that hard money loan brokers are actually some of the more responsible originators in the industry.

An excerpt from the article:

"Private mortgages are really meant to be temporary loans," noted Brian Brady, managing director of World Wide Credit Corp., San Diego. He added that private mortgages can act as a Band-Aid for someone who has suffered some sort of financial setback and needed to buy time until they can get their financial house in order. He cited the example of a spouse who has gone back to work, thus increasing household income, but because of late mortgage payments or payment defaults, the homeowner's credit score is too low to meet the requirements of traditional lenders. After two years, the homeowner should be in a position to refinance into a lower interest rate product. The irony that this was the same argument advanced by subprime lenders not so long ago was not lost on Mr. Brady, who originates both hard money and traditional loans. "We want to solve people's problems rather than perpetuate them," noted Mr. Brady.

Another excerpt from the article:

He was also very vocal about his feelings on what has been occurring in the mortgage market for the past few years. "In the summer of 2003, the rock star at the barbecue or picnic was the mortgage broker," said Mr. Brady. "When that's happening you've got to realize that something's wrong. We're supposed to be the geeky guys sitting in the corner trying to get you a home loan, not the center of attention at parties." He referenced the irrational exuberance of tech bubble day traders in the 1990s and junk bond brokers in the 1980s. The mortgage industry veteran stated that the traditional mortgage marketplace of the past five years suffered from too little income verification and blamed inadequately trained originators for the crisis. "As home prices were appreciating, it was relatively easy to ignore loan suitability," said Mr. Brady. "The subprime 'implosion' was a direct result of the 'explosion' in subprime lending and high LTV stated-income products."

Check out the full article here.

Is it "Lights Out" For Subprime?

I wrote a tongue-in-cheek post about the subprime loans’ collapse about three months ago. I wanted to show the history of securitization of home loans and explain that many of these defaults may actually be “buried” in mortgage pools. I pontificated that the expected debacle from the collapse may not be as bad as we think. Hmmm…maybe I’m wrong?

Bloomberg.com reports today that hedge funds are petitioning the Securities and Exchange Commission to be vigilant of mortgage pool manipulation. Simply put, mortgage pool manipulation is “burying the bad loans in the back of the breadbox”.

READ ON

Five Weeks and Counting

Opening Day is July 18th.  Our Realtor Soiree is on July 20.

To see Opening Day Pics from 2006,click here.

 

Great Real Estate Weblogs From Across the Nation

• Long Beach Real Estate- Laurie Manny
• RSS pieces- Great industry weblog- Mary McKnight
• Sellsius Blog- Fun RE.net Community Blog
• Bloodhound Blog- Greg Swann
• Celebration Florida Homes- Colleen Kulikowski
• Kitsap Real Estate Blog- Rich Jacobson and Mark Flanders
• Long Beach Real Estate- Laurie Manny
  
• Cleveland Real Estate News-Carole Cohen
  
• Sacramento Real Estate Voice- Gena Reide
  
• Luxury Home Digest- Roberta Murphy (right here in Carlsbad)
  
• Henderson Real Estate- John Novak
  
• Manhattan Beach Real Estate- Kaye Thomas
  
• Denver Real Estate- Kristal Kraft
  
• St Paul Real Estate- Teresa Boardman
  
• Eastern Conecticut Real Estate- Linda Davis
  
• Charlotte Real Estate Voice- Leigh Brown
  
• Virginia Real Estate Homes- Lenn Harley
  
• Michigan Real Estate- Maureen Francis
  
• Columbus Best Blog- Maureen McCabe
  
• Manhattan Blog- Mitchell Hall

SHAKE YOUR ASS-ets: Read the Directions!

Why don't men ask for directions?    Because we're men- we can do anything!

Um...not so.  Most of you ladies out there have broken your husband of this bad habit.  I know my wife, Debra, did after two months of dating.  Today, it's quite simple to log into into Google Maps and get door-to-door directions to most addresses in the USA.   In fact, this amazing piece of technology has created more harmonious mating in a generation of young bucks.  I predict it will ultimately drive down the divorce rate in this nation.

As simple as it is to use Google Maps, I still buy bicycles for my daughter, dump the the contents of the box on the living room floor, run and get tools, build a unicycle, yell for my wife and THEN read the directions for assembly.  Until Google comes up with a solution for that, I'll continue to be a moron.

if you want to see a funny example of stupid man tricks, read The Bawld Guy's post about what he calls "purposeful planning".  There's a picture of a man on a ladder that will frighten you and cause you to rethink some of the stupid man tricks we attempt.

It's the same thing with college or retirement planning.  I learned that my "sweet spot" in the mortgage business is in financial planning.  I got my "basic training" in Villanova, PA, my "advanced training" in Plainsboro, NJ, and practiced the craft on Wall Street and in my mortgage career.  I'm ready to advance my training to serve you better.

This week, I'll be headed for Sin City.  I'll be attending a combination education show and rally led by Mortgage Planning Magazine editor, Steven Marshall.  While I'm excited about the quality of speakers in the industry, I'm particularly jazzed to hear from Tony Robbins and Chris Gardner (the subject of the movie, The Pursuit of Happyness).

I considered pursuing the CMPS designation; our industry's first attempt at professional designations but decided that I'd better serve you, the homeowner looking to retire wealthy, by studying the more rigorous discipline the Certified Financial Planner designation requires.  Next month, I start the post-graduate Executive Financial Planning program offered by San Diego State University; I hope to advance to a Master's degree after passing the CFP test.   Maybe I can pledge a fraternity again now that I'll be back on campus.

I'm thankful to the Bawld Guy, Jeff Brown, for his encouragement to "master' this field of study.  Those of you who don't know the Bawld Guy would do well to meet him.  He's just a regular guy who happens to have a keen mind and an intuitive touch for growth markets.  He's a retirement planner disguised as a real estate broker.  I've seen the product of his work; people my age with more after-tax income from their investments than their day jobs produce.

Before we jump into that, you gotta read the directions.  I'll be learning how to do just that this summer.