Congratulations!  You are pursuing a career in the lucrative world of real estate investing.  The sky's the limit.  Isn't it' We are all bound by the same 24 hours in each day.  Our current unique lifestyle is a result how each one of us has used this precious time.

Here are a few tactics, out of many, that will help you to multiply your efforts every day.

1. Don't sweat the small stuff: A properly worded agreement which rewards your renters for not calling you throughout the month can free up hours per week.  Close your eyes and imagine your tenants fixing their own clogged toilets, leaky sinks, burnt light bulbs, cracked windows and other small mishaps that are destined to occur.  Offer a discount of a few dollars for each month the tenant doesn't call you to fix minor maintenance issues.  This gives your tenants a reason NOT to call you over the minor issues that may arise.

2. Meet your neighbors: Whenever you get a new property, whether you plan on fast-turning or holding it, meet your new neighbors.  There are three main reasons to do this.  The first is to see if they know anyone that may want to move in or buy your property.  The second is to see if they know of anyone else in the area that may be interested in selling or if they know of any vacant properties nearby.  The third critical reason is to ask them to call you immediately if they notice anything suspicious on or around your property.

3. Use Technology. It is your friend: Before I got myself an automated voicemail system I can't tell you how many hours I wasted every week talking to wannabe buyers/sellers.  Describing the property, price, terms, directions, etc. can be done automatically by a recorded message you provide.  Get yourself a free or cheap voice mail system that can screen out the time wasters before you talk to them.  A perfectly worded message can drive more buyers to a property than you ever could alone.

4. Add me as a friend: Before Facebook and Linkedin we actually had to network with people in real life.  Looking for leads does not and should not be done solely by you.  Multiply your efforts looking for potential slam-dunk deals; let everyone know the type/price/condition/area of properties you are currently seeking.  Remember to excite the new bird-dog's greed gland by telling him/her how much they will make if they send you information that leads to an executed deal.  Bird-dogs should collect as much information off a FSBO sign as possible, take pictures if needed, or grab the address if property looks abandoned. People to tell: tenants, sellers, buyers, friends, family, mail men and women, city workers, fedex drivers, trash men, everyone and everyone.

*Important note:  Depending on your area it may be illegal to give a commission or cutback to someone other than a licensed Realtor.  So be aware of legal loopholes around this obstacle.

Remember don't just stay busy; use your time effectively.  As human beings it is so easy to get tied up doing mundane tasks that distract can you from your real money making agenda.  It's amazing that making just a few tweaks to your routine/system can free up so much time and attract tons more qualified leads.

- J. Fed

Photo: adactio

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Improve Your Productivity: 4 Great Ways to Clone Yourself While Real Estate Investing

I've been curious lately about the end of the Mortgage Backed Security (MBS) purchases by the Federal Reserve in March.  The Fed is planning to end the program in less than 60 days on March 31st.  Currently they stand at about 94% having purchased 1.17 trillion of the 1.25 trillion allocated to purchase these securities.

So while they've nearly fulfilled the entire program, I did some digging and found there's starting to be some chatter about them extending the program.  We, of course, can recall to the first-time buyer credit extension being announced just as the initial credit was expiring.  The Fed states rates will remain unchanged over the course of the next 6 months meaning they believe the next 2 quarters are critical to gauge if the economy strengthens.   The MBS program has been keeping consumer mortgage rates low and many fear a full 1% rise in rates when the program expires.

Although the Fed recently restated its intent to cease the program on March 31st, there are multiple opinions amongst the Fed Presidents.  During an interview with Nightly Business Report, New York Federal Reserve President William Dudley said, 'Obviously, if mortgage rates were to back up a lot and if that had big consequences for the economy, the we very well could rethink the issue about whether or not we wanted to buy more mortgages.'  In a separate interview with the Associated Press, Dudley liked the situation to the Fed driving a car.  'If there's a sharp turn in the road the Fed will adjust course.  Nothing is on auto-pilot,' he said.

Dudley believes there is a good amount of liquidity in the marketplace now which will step in when the program expires.   Whether you are for or against government intervention, there is obvious stimulation of the lending markets by this program.  The larger banks are shoring up their balance sheets and paying back TARP funds.  Last week PNC Bank just announced it was paying back its $7.6 billion dollar loan.  Bank of America, Citibank, and Wells Fargo have paid back their TARP loans already with interest.   As the liquidity increases within the banks, they'll start buying the mortgage securities again which should help maintain low rates.

Interest rates crept over 5% last week according to Freddie Mac's mortgage survey.  That was the first increase in mortgage rates in 2010.  With the Fed being concerned about the rates, any extension in the MBS purchasing program will likely have to do with where rates are in 60 days.   For real estate investors the value in the low rates is not only cheap money but ensuring certain types of loans, particularly non-seasoned rate and term refinances, continue to be available.  Many investors are currently using this loan to take out bridge financing or hard money when they purchase foreclosures and fix them.  This 2 structure loan allows them to do these transactions with less than a traditional 20% down payment.

Whether you buy and hold, wholesale, or broker investment transatctions, what the Fed does on March 31st can impact your business significantly.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Fed Leaving Door Open to Extend Mortgage Backed Security Purchases

When you're driving on the highway, have you ever noticed that anyone who drives slower than you is a moron and those who drive faster are maniacs' It's human nature to think that there is something wrong with those who don't act the way we think they should. It's certainly true in real estate.

Today I saw an online status update from a friend who is a short sale specialist. She was lamenting a deal lost to a “greedy” lien holder. To be fair, she is very intelligent, hard working, and a good person ' she was merely venting some frustration. However, “greed” is a word that has crept into the vernacular and is used to symbolize the economic ills of today.

Everyone's Greedy

Think about how often the word greedy is thrown around today. We have greedy bosses, greedy bankers, greedy lenders, greedy investors ' let's not forget the greedy landlords! From the lowly janitor lamenting the fact that his greedy boss wouldn't give him a ten cent raise, to the President of the United States scolding the greedy executives on Wall Street, everyone is getting in on the act. But is it fair'

Isn't everyone just trying to protect his or her own interests' It's a jungle out there and it certainly is survival of the fittest. The investor wants to get the best deal on a property, the seller wants to get the best price he can, and the banker wants to get the best terms on the money he is about to lend. Does that mean they're all greedy'

The Front Lines

The foreclosure crisis has certainly seen its share of greed. You had hordes of novice investors trying to make a fast buck as the bubble inflated. Now you have all of those trying to do the best they can as the bubble deflates. Those involved in the short sale arena are on the front lines of this battle. The crux of the problem is that a short sale can't take place without the cooperation of the lien holders.

From a real estate agent's perspective it is stupidity and greed that keeps them from cooperating. Sometimes they're right, but not always. There could be other factors at play besides greed. Sure, a lien holder may be wiped out in foreclosure if they hold a junior position. What if they feel they can get a better deal or that they may have a chance of recovering some of their investment by not agreeing' A lender in first position may be protected by private mortgage insurance and do better in a foreclosure than they would in a short sale.

The very basis of capitalism is that people are motivated by profit. That also means it is important to minimize loss. It is incumbent on everyone to protect his or her own interests. That often means that someone doesn't get what they want. Does that make the other party to the transaction greedy' If it does, so be it.

The point is ladies and gentlemen that greed, for lack of a better word, is good. ' Gordon Gekko in Wall Street

Image: Annie Mole

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Those Greedy SOBs!

I love landlords. I get the majority of my deals from landlords who are sick of dealing with tenant hassles. The biggest payoff comes when you get a call from a landlord who wants to sell you multiple properties, such as 3, 10, 20 and maybe even 50 houses at once.

So what do you when a landlord calls and has several houses to sell at once'

Well, last week this happened to me and a partner. We got a call from a landlord who had four properties he wanted to sell. The guy is older and he just doesn’t want to deal with them anymore. The first thing to do when you get a call like this is to evaluate each property at a time.

So, we talked with the seller and got the complete details on all four properties on four deal sheets. Now, once we had the complete information on these four properties, we had to evaluate them and run the comps and the rental comps. On three of the properties there is plenty of cash flow and the numbers look good. However, the fourth property has negative cash flow of about $100 a month.

What to do with this negative cash flow property'

When talking with the seller about this he basically said, “overall, on the four properties you get a lot of cash flow.” He’s right. But once again, I evaluate each property individually. Just because three properties cash flow, that doesn’t mean I should take on one property with negative cash flow. To me, that’s nonsense.

I don’t care if I’m buying one property, or a package of four. Every property I buy must meet the same rigorous standards and must have cash flow and a certain amount of equity. The investors who don’t do this and who aren’t “ruthless” when it comes to evaluating a property are the ones who complain that this business is difficult and it’s tough to make money.

Remember, you always make your money going in.

So with this particular landlord we are still in the negotiating phase and inspecting the properties. We plan to buy three of the properties subject-to and get several hundred dollars a month in cash flow.

That’s the beauty of this business. Just one phone call from a landlord with multiple properties could take you from zero deals ever done, to four deals done and a positive cash flow of $900. And I think all of us could use an extra $900 a month.

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

How to Handle a Landlord with Multiple Properties for Sale

Superbowl Commercials are the probably the most watched commercials year round.

Superbowl Sunday is the day people can’t help be excited about: from the fans, to the players, to the coaches, and yes, even the Sponsors…

And that’s exactly who I want to talk about this year… The Sponsors!

After doing a little bit of research, I found out that each Superbowl Spot (Ad)  for 2010 will cost anywhere between 2.5 Million and 2.8 Million…EACH! 30 to 60 seconds to “sell” america on a product or service doesn’t seem like much time, but if the ad is compelling and can generate a significant response, then time doesn’t really matter. It’s all about the delivery.

You see, when you throw up an ad on craigslist to advertise your real estate services or maybe a property you’re trying to sell, it doesn’t matter how long or how short the ad is. What matters is if the ad is able to convert (generate a response).

I’ve seen 3 line ads pull 10 times better than 3 paragraph ads and vice versa.

Would you pay $3Million to air your ad during the Superbowl…for one second' Miller Did…

I’m not sure how many sales this ad helped bring Miller, but I’d imagine it helped alot. Because this was a really short ad, it went completely viral and people kept talking about…even to this day. Not only that, but of course, Miller is already a recognizable brand.

'Miller High Life is all about high quality and great value, so it wouldn't make sense for this brand to pay $3 million for a 30-second ad,' said High Life senior brand manager Kevin Oglesby, in a press release. 'Just like our consumers, High Life strives to make smart choices. One second should be plenty of time to remind viewers that Miller High Life is common sense in a bottle.'

If people talk about you…and it’s in a good way…expect a boost in your business!

If you’re going to watch the Superbowl, I want you to take notes while watching the commercials, and look closely for what really grabs your attention.

I mention that last question because I believe that Dennys had the best special offer for 2009. Watch the video below to see what I mean.

Why would they do that' It’s simple…they wanted business. Sure everyone that went got a free meal, but at the end of the day, they could easily make money from drinks, desserts, extra orders, tips, etc… and they may have even gotten some repeat business.

Their response to this was so great that when I went there on Tuesday to claim my free grand slam, they had lines out the door and handed many of us a coupon for a rain check (same free offer of course).

Overall, as you take notes, I want you to see how you can begin implementing these concepts in your own advertising.

It’s kind of along the same lines as what Winston Westbrok wrote about when it comes to learning from Junk Mail.

Don’t you think there’s something to gain from an ad that someone litterally paid millions of dollars for'

When it comes to marketing, you must put sincere thought into each ad that you write. The better the ad, the better the conversion. Plain and Simple!

Make sure to split test your ads against one another. You could really love the ad, but the response could be horrible. You could have negative or mixed feelings about the ad, but the leads just pour in as a result of it. Your personal feelings about the ad don’t matter as much as the response by others and the leads you generate from it.

Have a great day!

To Our Success,

J. Lamar Ferren
New Breed Investor

ps. What helps your ads to convert the best' Have long ads performed better for you or short ones'

PPs. Who do you think will win the Superbowl…Saints or Colts'

Photo: JohnSeb

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Superbowl Commercials 2010 | Why You Should Take Notes

1) On the ethics of 'strategic default'' ' I understand where Scott is coming from on this post, but some parts of the country are in such a bad position you have to start questioning it. Imagine being in a home you owe $600,000 and today it is only worth $350,000. At some point a common sense mathematical look has to take place.

2) The Appraisal System Blows. Especially Non-Local Appraisers. ' HVCC has been one of my most talked about items over the last 7-8 months. Even in a market that has been having slow appreciation they are still valuing at declining prices.

3) Licensing to Realtors Property Resource (RPR) and Others ' Things to Consider ' RPR is coming, will your MLS be participating' If they have not decided yet you may want them to read this.

4) Treasury Updates HAMP Guidelines, Might the Program Work Now' ' So HAMP was a failure, but now we are going to have new HAMP guidelines which should make the process of failure much quicker. When can we stop with all this feel-good bs and get down to something that would really work to fix the housing crisis.

5) Real Estate 101: Representation ' Jay makes a very strong case on why calling the listing agent on the sign may not be the best way to get the best deal on the house. Who do you represent' Who represents you' Does it matter'

6) Cut foreclosures by slicing real estate fees ' I debated including this. On one hand do I really want to give this (excuse my language) moron the platform' On the other hand it is always good to know what people are saying about you. And if you are a real estate agent the foreclosure mess is your fault because you earn to much money. Try telling that to the agent who’s average yearly commission is around $20,000. Oh and he is just wrong about the secret commission too.

7) Part-Time Realtor: Full-Time Problem ' It always amazes me how many real estate agents are part-time. I don’t let it bother me that only 27% of agents are full-time' I recently heard that 7% of agents did something like 93% of all the transactions in the last year which means most of those part-time agents are not doing anything anyways so it does not bother me to much. Almost every career has people that do it part-time, real estate will never be any different.

8) 10 Home Features Buyers Want ' When you are working with buyers do you know what they want in a house' Here is the answer, no need to wonder anymore. Afterall we know all buyers are the same.

9) No Brown Nosing Required. Your RAISE Is Ready When You Are. ' This is one of the main reasons I got involved with real estate. Who likes to be told what they are worth' In real estate you can determine how much you make in a year. Just depends on what you are willing to put into it.

10) 'Life of a Realtor' Video ' This one is for pure entertainment purposes.

Img. Sam Churchill

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

The Ten Best in RE.net This Week: Feb. 6, 2010 Edition

There is a service offered in a select number of counties called, Property Fraud Alert, which, after you sign-up, runs a query against any new documents recorded within the county of your choice.  The primary purpose for this service is to help stop mortgage and property fraud.  If any document recorded within your county lists your name as either the grantor (person granting title to real estate, or “seller”) or the grantee (person being granted title to real estate, or “buyer”), you are immediately sent an email alert containing the following information:

This notification service will aid you in taking prompt action if, for instance, someone fraudulently records a document at the county, listing you as the seller of your home, which you aren’t selling! I personally signed-up for this service about a year ago after I had stumbled upon the website.  I had forgotten all about my (free) subscription to this service until one day I received an email that stated the following:

ALERT:

Dear subscriber, a document has recently been recorded that matches the monitor criteria you have provided McClelland, Justin.

The document information is:

Location: Champaign, IL

Document Number: 2009R35226

Document Type: OTHER DEEDS

Recorded Date: 12/15/2009 12:00:00 AM

Matched Party Name: GRANTEE JUSTIN MCCLELLAND

Please visit www.propertyfraudalert.com/nextsteps or call 1-800-728-3858 for information.

If you feel you have received this message in error or you wish to modify your monitor criteria, please contact Property Fraud Alert Customer Service at 1-800-728-3858

This alert came within hours of me recording a contract on a house at the county recorder's office.  So 'watch your back' and sign-up with Property Fraud Alert.  It's free of charge in most counties.

Image by Txspiked

This Article is Copyright © 2004-2009 BiggerPockets, Inc. All Rights Reserved.

Property Fraud Alert Service ' Watch Your Back!

AP - Homebuyers spurred by low interest rates and government incentives helped lift Beazer Homes USA Inc.'s sales in the last three months of 2009, but the builder only turned a profit because of a hefty tax gain.

Reuters - More and more consumers are giving greater priority to paying credit card debt than making a mortgage payment, showing increased financial duress, according to a report released on Wednesday.

Reuters - Demand for home loans rose to a six-week high on a mini refinance wave, with borrowers pushing to lock in rates before they climb later this year, the Mortgage Bankers Association said on Wednesday,

Reuters - Pending sales of existing U.S. homes edged up as expected in December, while home vacancies rose in the fourth quarter, pointing to a slow and painful recovery for the troubled housing market.

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Does the Obama Administration really want to clean up this mess'

Indymac and the FDIC

Indymac closed it’s doors and was seized by the FDIC in July 2008

Indymac now is OneWest Bank

The assets of Indymac Bank were sold to OneWest Bank by the FDIC in March 2009

Steve Munchin John Paulson George Soros

So who owns OneWest Bank' Goldman Sachs VP Steven Munchin along with left-wing progressive billionaire George Soros and John Paulson… Yes, the brother of Hank Paulson, remember the ex-Secretary of the Department of Treasury aka ex-CEO of Goldman Sachs'

———————————————————————-

(Remember: Indymac was one of the largest holder of the Option mortgages. If you don’t recall, the option mortgages are the mortgages that you only pay a 1% interest rate and the actual rates will fluctuate around the the actual rates offered, so if the actual rate was 6% then the Indymac homeowner deferred 5% of his/her payment to the back of the loan AND that increases the amount owed to the bank, aka, the mortgage balance. Furthermore, in a depreciating environment where home values have declined by 50% in a lot of areas, it looks uglier and uglier for the tax payer! Let me continue…)

———————————————————————-

Mortgage Problem Step 1

Mortgage Problem Step 2

Mortgage Problem Step 3

Mortgage Problem Step 4

Mortgage Problem Step 5

Mortgage Problem Step 6

Mortgage Problem Step 7

More From Consumer Mortgage Reports

Barney Frank 2009 Porker of the Year With President Barack Obama As The ‘Write In’ Favorite

Chairman Frank garnered the lion's share of the votes as a result of his relentless and garrulous role in the failure of the government-sponsored enterprises Fannie Mae and Freddie Mac, the two mortgage government-sponsored enterprises (GSE), which were taken into government conservatorship in September of 2008 after they began to collapse. The two GSEs, which own or guarantee half of the nation's $11 trillion home mortgages, have been on life support with $112 billion in taxpayer funds since then and taxpayers could be liable for trillions in bad loans on their balance sheets. – Source: cagw.org

Among GSE defenders, Chairmen Frank is without any notable contenders. He secured their lavish franchises and fended off all efforts to confirm GSE oversight even when it has become crystal clear that GSE executives had manipulated profit statements, given themselves huge bonuses based on bogus details, and steered the companies into such a dangerous condition that they threatened the complete monetary structure. In one of his most outrageous arguments, he told The New York Times on September 11, 2003 that the GSEs were 'not facing any type of financial crisis'[t]he much more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.' During a 2003 committee hearing, he casually proclaimed that he didn't want 'the same type of focus on safety and soundness that we have in Office of the Comptroller from the Currency and the Office of Thrift Supervision. I wish to roll the dice a little bit much more in this situation towards subsidized housing.'

As recent as January 22, 2010, Chairman Barney Frank made this striking declaration, Frank said that his finance committee will now endorse 'abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance.' Source: http://www.nytimes.com/2010/01/23/business/23fannie.html

More From Consumer Mortgage Reports

Incentive Part of Ongoing Effort to Stabilize Neighborhoods

WASHINGTON, DC ' Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.

“Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help,” said Terry Edwards, Executive Vice President of Credit Portfolio Management. “Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home.”

Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.

You can call 1-888-577-8338 to qualify for a mortgage.

More From Consumer Mortgage Reports

Treasuries and mortgages continue their erratic ways this morning and opened strong after a small decrease in prices yesterday.

The stock market had improved yesterday but, so far this morning the indexes in pre-market trading were indicating a lower opening as that market keeps swinging.

This morning in the equity market, Bank of America reported another loss, its third in the last five quarters and the revisiting of the news last week that China is moving to cool their economy.

More From Consumer Mortgage Reports

Most troubled homeowners don’t realize they are hurting their credt by entering President Obama’s trial mortgage modification program (HAMP).

It’s typically true that many people who apply for the Home Affordable Modification Program are already delinquent in their mortgage payments, but add in the fact the amount of time a trial period takes, typically 3 to 6 months, this may only add to the pain.

Under the president’s plan, troubled borrowers can have their monthly mortgage payments reduced to 31% of their pre-tax income, however, homeowners are first put in a trial modification for several months to prove they can handle the new terms by making timely mortgage payments and to give the bank time to collect the necessary income and hardship verification documents. This is where it gets dicey…during this trial period and according to industry guidelines, loan servicing companies are ordered to report borrowers to the credit bureaus according to their status before they entered the modification – either current or the number of days delinquent. Additionally, borrowers’ accounts are also designated with a code indicating they are in a partial payment plan.

The coding alone can impact credit scores. This is a measure of a consumer’s financial health and range from 300 to 850 under the FICO system. The severity depends on how many payments the borrower missed before entering the program. Those who were current in their mortgages could see their scores fall up to 100 points, according to the Treasury Department.

More From Consumer Mortgage Reports

Fed HOEPA Amendments May Signal Final Goodbye To Stated Income

Stated income loans used to be commonplace in the industry. The guidelines were so loose, many called them “liar loans.” Well the credit crisis has devastated this program. One-by-one, the alternatives are going away. The latest' The Federal Reserve Board’s HOEPA (Homeownership Equity Protection Act) rule amendments effective October 1 require the lender to verify income on all “high-cost” loans. That in itself would not be a big deal if the amendments did not take the rule one step further.

The definition of high-cost loans has been changed from 8.0% over comparable Treasury securities to 1.5% over comparable securities. This means that the APR of loans we are doing every day may require a special Section 32 Disclosure as well as the requirement that the lender has to verify all income and assets. Bottom line is: Liar Loans Are Gone!

More From Consumer Mortgage Reports

Watch This Video!

More From Consumer Mortgage Reports

I just read the largest company in the United States is hiring a person with only 2.5 years of actual experience and no experience as a CEO. The funny part of that is, their experience is actually only in upper management…..wow'''' Why would such a large organization do that'

Ooops, my mistake, what I meant to say is that some citizens of the United States did exactly that with the current president.

If you wanted a great speaker, you should have elected Tony Robbins. He has real life CEO experience.

READ THIS FROM Wikipedia:

Socialism refers to a broad set of economic theories of social organization advocating public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation. Modern socialism originated in the late 19th-century intellectual and working class political movement that criticized the effects of industrialization and private ownership on society. Though often conflated with the thought of Karl Marx, Marx merely saw socialism as a stage in the ineluctable transition from capitalism to communism.[3][4][5]

More From Consumer Mortgage Reports

The reigning credit crunch has disturbed the financial equilibrium of many people around the globe. Aftermath of subprime mortgage crisis was felt the world over and the housing market is yet to recuperate fully. With such a situation prevailing, there are many who successfully manage to tap the equity in their homes. It has been made possible due to reduction in the mortgage rates.

Refinancing activities increased
Statistical data indicates that the fixed rate mortgage for a 30 year loan term dropped by 1.3 points from 6.46% to 5.14% during the period October 2008. The fixed rate mortgage rates for a 15 years loan term has also registered a sharp decline from 6.19% to 4.91%.

Reports also suggest that mortgage refinance escalated by 60% during the 2nd week of December 2008 (according to Mortgage Bankers Association). The increase in mortgage refinance activity could be traced as there were marked changes in the refinance index of Mortgage Bankers Association which keeps a track of all the refinance loan applications.

Mortgage refinance has gone down well with consumers who think they are being able to save a good deal by making lower mortgage payments. The amount that the consumers are saving is being spent mostly for building up an emergency fund or to save it for the rainy day.

Eligibility criteria for mortgage refinance are still stringent
Even though consumers are trying hard to utilize their property by opting for refinancing, not all are qualifying for the same. There are 2 reasons for this. The first reason is that the norms and requirements for qualifying for refinance have been made more stringent. The second reason is that the housing values have declined drastically.

Creditors are usually giving preference to borrowers having 20% equity in their property. However, a borrower can opt for private mortgage insurance in the event he has less than 20% equity in the property.

Refinance is a good option when there are several debts that need to be settled. It is better to opt for refinancing even if the rate available is 1% less than interest rate, the homeowner is currently paying. With the bursting of the housing bubble, lenders have become very cautious and tend to disqualify any loan application that appears to be a risky deal for them.

Related Posts

If the “The Root Cause Of Our Economic Problems Is The Housing Foreclosure Crisis” as Senator Dodd States, then all the bad mortgages and the $700 Billion Bailout is not necessary.

Or maybe he is ass backwards and it was Wall Street with their aggressive mortgages and the Federal Reserve who encouraged folks to go out and get adjustable rate mortgages and did not do their jobs anyway regardless of Wall Street.

Remember it is the Federal Reserve that monitors and controls the financial markets in the United States!

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Maybe Greenspan should not have raised the target rate 17 consecutive sessions after he went out and told everyone to go out an get adjustable rate mortgages.

Look that one up.

Seems like the Federal Reserve failed to do their job, again!

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The Federal Open Market Committee (FOMC) decided today to lower its target for the federal funds rate 50 basis points to 1 percent.

The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.

In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate in coming quarters to levels consistent with price stability.

Recent policy actions, including today's rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside risks to growth remain. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action was: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve  Banks of Boston, New York, Cleveland, and San Francisco.

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The Federal Reserve yields enormous power over the health of the nation’s economy AP Personal Finance Editor Trevor Delaney explains how setting interest rates is one of its most powerful tools.

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Hi Friends . . . . . I’m against the $85,000,000,000.00 bailout of AIG.
Instead, I’m in favor of giving $85,000,000,000 to America in a “We Deserve It Dividend.”

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child.

So 200,000,000 might be a fair stab at adults 18 and up.

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a “We Deserve It Dividend.”

Of course, it would NOT be tax free.

So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife team has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family'

Pay off your mortgage – housing crisis solved.

Repay college loans – what a great boost to new grads.

Put away money for college – it’ll be there.

Save in a bank – create money to loan to entrepreneurs.

Buy a new car – create jobs.

Invest in the market – capital drives growth.

Pay for your parent’s medical insurance – health care improves.

Enable Deadbeat Dads to come clean – or else.

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And, of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it…we’re going to do a $85 billion bailout, let’s bail out every adult US Citizen 18+!

As for AIG – liquidate it. Sell off its parts.
Let American General go back to being American General. Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.”
But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom'
I trust my fellow adult Americans to know how to use the $85 Billion “We Deserve It Dividend” more than do the geniuses at AIG or in Washington DC.

And remember, This plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh…I feel so much better getting that off my chest.

Kindest personal regards, Birk

T. J. Birkenmeier, A Creative Guy & Citizen of the Republic.

PS: Feel free to pass this along to your pals as it’s either good for a
laugh or a tear or a very sobering thought on how to best use $85
Billion!!

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