Traci Gregory, Financier

We are an FHA Direct Endorsed Lender

I’ve read with dismay about the people giving up their houses, going to credit counseling, trying to make ends meet.

The biggest bill most of us pay is for rent or for our mortgages, and for some reason the news makes it appear that there is no mortgage money when in fact there is quite a lot.

The credit crunch could affect mortgage money availablity, but it has not. 

I’ve been a mortgage banker for 20 years . . . and I know that refinancing a $250,000 mortgage that is at 7% ($1630/month)  to 6% or less ($1498/month)  would make a positive change in any budget.

• People with questionable credit can refinance with an FHA loan, even if their loan isn’t an FHA backed loan now.
• Streamline refinances are done with no appraisal, and in a lot of cases, reduced fees, to help homeowners stay in their houses.  For conventional AND FHA loans.

This is a time to hunker down, figure out how we’re going to get through the next few years, and giving up the time and money we have invested in our homes is not a good way to start a hard run!

I understand that Cobb County’s revenues for intangible taxes and real estate filing fees was averaging between $2 and $3 MILLION a month in 2007.  Now, they are at less than $300,000 a month.  Even the local government is feeling the pinch of the fall in real estate business.

I recommend that everyone who owns a home and is paying more than they are comfortable with look hard at all the options for refinancing and lowering their payments, particularly if they want to get into a 30 year fixed rate, plain vanilla, feel-safe-to-everyone mortgage.

I also highly recommend that the Real Estate Professionals in the area get more familiar with FHA and for people outside Cobb County, Rural Development loans.  THAT MONEY IS WAITING TO BE SPENT!

There IS down payment assistance money – for homeowners who don’t have cash to close.  We can revive the economy on a local level, but only if we don’t give up on it.

Bits and Pieces

So, the Donald is going to bail out Ed McMahon on his $4.8 mil mortgage.

Wonder how many regular guys he could bail out with that kind of money? 

~~~~~~~~~~

Countrywide Financial Corp. is the subject of yet another federal investigation: the Federal Trade Commission (FTC) is investigating for possible violations of federal laws in the servicing of its $1.49 trillion loan portfolio.

Aren't they the ones foreclosing on McMahon?

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From the Associated Press:
After a full six months of investigating appraisals in the US, an independent federal agency known as the Appraisal Subcommittee says the nationwide system set up to monitor appraisers because of the savings and loan crisis (?) did little to prevent appraisers, real estate agents and mortgage brokers from colluding to inflate home prices during the housing boom.

There just don't seem to be any appraisers with a backbone in this country . . . I read everywhere that they were coerced into high values . . . Please.

~~~~~~~~~~

From the Wall Street Journal:
Are Obama's tax cuts The New Tax Welfare? Is he proposing to create or expand government spending programs disguised as tax credits?

I didn't know he had thought up tax cuts - I thought he just wanted to make sure we were all at a 54% income tax level, in addition to paying for capital gains, and, oh, yeah, when we die . . .

Pax et bonum

Unsecured business lines of credit - up to $200K

In order to grow you business, or even start up your business using credit, you may have found you were expected to have a corporation aged for two or more years.

I've found a company that provides a solution: they supply established, aged corporations that are free of any taxes, judgments or other liabilities.

The service includes all necessary procedures to transfer the corporation into your name as well as assigning a designated registered agent. 

They provide:

• all necessary corporate documents,
• articles of incorporation,
  corporate resolutions and minutes.
• and a free year of registered agent service.

As part of an aged shelf corporation purchase, you may draft and file any name change, amendments or annual statements at no additional cost (State filing fees will apply) so you aren't stuck with Ajax Plumbing as your corporation.

Finally, you will receive a report showing that the company you purchased is free of liens and you can now move on to start building your corporate credit.

Just like personal credit, business credit has a score, often referred to as a "Paydex" score issued by Dunn and Bradstreet (D&B).  A perfect Paydex rating is 80 or higher. 

If you are considering bank financing for a business, you will need to have an established Paydex score as well as good personal credit. 

With this Corporate Acquisition program, you get help building a perfect Paydex score for your new corporation before submitting loan applications to anyone. Improves your chances for approval greatly.

Once your established corporation is "bank ready" they will develop corporate credit for you thru their networks of banks.   

It isn't free, or even cheap . . . however, you can finance the majority cost if your personal scores are 680 or higher.

The "flow" is in the graphic below:

I.O.U.S.A. the Movie

Unbelievable . . . Extreme Makeover' house faces foreclosure

From AP, ASSOCIATED PRESS:

More than 1,800 people showed up to help ABC's "Extreme Makeover" team demolish a family's decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.

Three years later, the reality TV show's most ambitious project at the time has become the latest victim of the foreclosure crisis.

After the Harper family used the two-story home as collateral for a $450,000 loan, it's set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but told WSB-TV they received the loan for a construction business that failed.

The house was built in January 2005, after Atlanta-based Beazer Homes USA and ABC's "Extreme Makeover" demolished their old home and its faulty septic system. Within six days, construction crews and hoards of volunteers had completed work on the largest home that the television program had yet built.

The finished product was a four-bedroom house with decorative rock walls and a three-car garage that towered over ranch and split-level homes in their Clayton County neighborhood. The home's door opened into a lobby that featured four fireplaces, a solarium, a music room and a plush new office.

Materials and labor were donated for the home, which would have cost about $450,000 to build. Beazer Homes' employees and company partners also raised $250,000 in contributions for the family, including scholarships for the couple's three children and a home maintenance fund.

ABC said in a statement that it advises each family to consult a financial planner after they get their new home. "Ultimately, financial matters are personal, and we work to respect the privacy of the families," the network said.

Some of the volunteers who helped build the home were less than thrilled about the family's financial decisions.

"It's aggravating. It just makes you mad. You do that much work, and they just squander it," Lake City Mayor Willie Oswalt, who helped vault a massive beam into place in the Harper's living room, told The Atlanta Journal-Constitution.

Checklist || 101 Things to consider when you're becoming a real estate investor (originally published Sunday, April 02, 2006)

101 things?

There are probably 1,001 things you should think about, strategize and take care of before you become an investor - But you won't, you'll do them as they occur, because if you didn't, if you stopped and did all of them, you'd put off buying houses til the list was complete! And, I don't recommend that at all.

You should

Prepare Financially

Prepare Legally

Prepare Professionally . . . and that's what this list is about.

These are things that no one would ever dream could affect a loan decision . . . and, after 20 years in this business, I've seen all kinds of things that can affect a loan decision. And affect it in a bad way. So here are some problems I've had to overcome for my clients, and some suggestions on how to do that ahead of time, not when you have just lost an underwriting approval.

Cell Phones

Do you, like everyone else, run your business from a cell phone? They aren't listed as a business phone number in the phone book . . . they're hardly listed ANYWHERE. In the world underwriters live in, businesses have listings in a phone book . . . or they have listings in the yellow pages . . . So, you need to establish your business as a real business in another way: Flyers, newspaper ads that you have cut out of the paper and saved to your computer so you can use and reuse them, a photograph of that car of yours that has the big sign, "We buy Ugly Houses". You get the picture.

How do you answer the cell phone that is your business? "Hello" "Yeah" "Whats happenin?"

When a lender calls to verify employment, they want to know that the number they are calling is a real business, not the cell phone number of someone you've asked to verify your employment for you. . . There are only two ways to answer the phone when that happens, and you might as well get into the habit now, before you need to, and they are: "Ugly House Buyers" or even easier, with your name.

When someone calls and gets your voice mail, is it a message your child recorded for you and you left it? Is that really what you want your renters to hear? Or the advisors you are PAYING to help you become a successful investor? Appraisers? Inspectors? City and County Government officials? Your mortgage banker? Do you want them to know they've called the right number and are leaving a message to which you will respond? Or, do you want them to wonder what you're thinking?

Do you have 30 seconds of dramatic music BEFORE your message? Do you want them to hear music or the message? And, will they wait through the music to get to your message? Think about it.

Email

If you're like the rest of the world, you have an email address that came with your internet access, or that you picked up at a free service . . . If you have your own website, I have some suggestions about that too, but this is about email addresses.

If your email address is moneymamma@hotmail.com or j479reo4429@excite.com what are you telling people? Perhaps money momma does express who I am to my children . . . but it certainly isn't who I am to other professionals, particularly those who pay me! (Don't send me email there - I made that one up!)

And sweetemotion@yahoo.com may mean a lot to other Aerosmith fans, but it doesn't make me think you're serious about your real estate career.

My suggestion is that you think of a professional email address, that is as simple as possible to have someone type in the first time . . . true, once it is in an address book correctly, you're home free, but if it goes in wrong the first time, you have a chance of losing mail to it every time someone wants to get in touch with you. Combining letters and numbers is a great rule for passwords . . . it just isn't for email addresses.

WEB SITES

If you're going to get a website, there are a LOT of things to consider, and one of the most important is the domain name you buy. You probably already know that top level domain names are going to help in search engines, and that you want to put all the information you can into them.

My websites are named for what they are: Georgia Mortgage Money.Com, Stock Loans Blog.Com, etc. etc. Most people don't actually type those names into their web browsers, they find them on Google, or they hit a link they've got in their email. When they do have to type them, I've found that not everyone in the world can actually spell Mortgage . . . so they may not have been the most perfect choices, but they do say what I've got . . .

When you have houses 4sale.com, and you tell people your website is "houses4 (thats the number 4) sale.com" you may realize the 4 that looks good in the url, or that was all that was available when you bought the domain, may not have been the best idea in the world.

And my last thought about websites - I'm a .com snob. I think most people are programmed to type .com, not .net, not .bz, or .us . . . . they think of websites as dot.com.

I think taking a url name that is .net, because the one you really wanted is already sold is a bad idea. When we're busy, thinking, juggling phones, typing urls or emails into a keyboard, our brains push .com into our fingertips, with no conscious effort. If you're .net, chances are you're giving someone with the .com name some of your business, and perhaps lots of your email.

I do think that if you have a successful website you probably should buy the extensions, just so someone else won't buy them to pick up some of your business, but I think the fallout is more likely to go to the .com website than the .biz.

And a simple solution to both the email and the website name is . . . your name. I bought tracigregory.com specifically for the email address traci@tracigregory.com - is really easy to tell people, and easy for them to remember. I've since started adding things to it, it is after all a domain that gets traffic, so there might as well be something on it worthwhile! And I could buy 100 other domain names that mean something about what I do . . . investorstrategy.com, realestateinvestinginfo.com OR wealthbuildingthrurealestate.com . . . and point them to that domain so that I picked up the search engine business I want, but had a really easy to remember email address and domain URL.

Our job is to make sure you have the money to do what you want to do building your portfolio. Your job is to find houses that work for you. Just makes sense to work together.

Trace

INNOVATIVE FINANCING

In the days where one only hears about the credit crisis and lack of liquidity, people are stymied on where to turn to finance their latest projects. While the reality is there has been a huge change in residential financing (probably for the better, and probably forever!) commercial lending programs have not been affected as much, although lately commercial lenders are finding it harder to sell their paper because of lack of liquidity in the market in general.

As it is harder to get the money to get projects off the ground, we’ve tried to stay ahead of the curve and maintain as many options for our borrowers as possible. While there are still straightforward choices like SBA loans and commercial loans for expansion, purchases and refinances, and Church loans based on tithing, we’ve found there are other forms of financing that aren’t as complicated or time consuming and for the most part also aren’t as costly as traditional financing.

I’ve added stockloans from Hedgelender to my portfolio of products and capital advances against credit cards.

The beauty of both programs is they are not based on applications, financial statements, tax returns or credit criteria. And they both fund VERY quickly.

Stock Loans can be used for any number of things, and can be made through a myriad of choices. Here are some highlights:

• Finance your real estate with interest-only repayment while still retaining participation in your stock portfolio;

• Refinance your MARGIN LOAN to remove the possibility of a call;

• Expand Your Business with interest-only repayment while still retaining participation in your stock portfolio;

• Diversity Your Investments while retaining beneficial ownership of your portfolio;

• Roll your Employee Stock Options into cash while continuing to participate in your stock.

Ironically, these loans run to the millions and sometimes tens of millions, and take 1/10th the time to process and fund. And, they are strictly based on the worth of the stock and the amount of shares traded; the ONLY collateral is the stock and . . . credit is NOT a criteria. Neither is purpose, as long as it is legal!

Capital Advances against credit cards is NOT a loan program - but is a purchase of future sales.

Like the stock loan, there is NO long application, financial statement requirement OR tax return requirement; Funds immediately based on credit card sales; factors ALL credit cards receivables - Visa, Mastercard, American Express and Discover.

Clients are using the money for expansion and renovation; Marketing and Advertising; purchase of new locations; Increases to inventory; purchasing much needed equipment Repairs and upgrades; buying out an existing partner; recapture of investment capital; even to pay bills and taxes.

Finer explanations and details are listed on my website PallasFinancier.Com.

CHANGES TO FHA MORTGAGE INSURANCE PREMIUMS

FHA Single Family Mortgage Insurance Starting Monday July 14, 2008, for the first time EVER, credit scores will determine loan terms on an FHA Loan Details are Borrowers with no score or at least  500 may get an LTV >90%; see matrix below. Borrowers with a score under 500 get a maximum LTV of 90%. Borrowers without scores will require manual underwriting. Depending on score, Upfront Mortgage Insurance Premiums will range from 1.25% to 2.25%. Depending on score, Monthly Mortgage Insurance will range from .50% to .55%. The premium is based on the borrower with the lowest score. If one of the borrowers has no score, then the Non-Traditional credit grade is used. Credit rescoring is allowed to improve a borrower's credit grade. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI. These changes apply to purchases, cash-out refinances, rate & term refinances, and non-delinquent FHA Secure refinances. UPFRONT AND ANNUAL MORTGAGE INSURANCE PREMIUM RATES Effective July 14, 2008  for Loan Terms Greater than 15 Years
All premiums are shown in basis points - 0.01%
	Credit Score
LTV	300-499	500-559	560-599	600-639	640-679	680-850	Alternative Credit
Less than 90%	175/50	175/50	150/50	125/50	125/50	125/50	150/50
90.01% - 95%	Not Available	200/50	175/50	150/50	125/50	125/50	175/50
Over 95%	Not Available	225/55*	200/55	175/55	150/55	125/55	200/55
* First time Homebuyers WITH HUD APPROVED COUNSELING will be charged 200 basis points for the upfront MI

Brad Inman on the collapse of the secondary housing market

Brad Inman is founder and publisher of Inman News.

In the afternath of the news about fannie mae, freddie mac and the NEW IndyMac FEDERAL BANK, Brad Inman made ten predictions about the collapse of the secondary housing market.

"...Those that do lend will revert to back-to-basics underwriting: perfect credit, large down payments, proof of income, personal character and good family upbringing.

"...Housing industry lobbyists will make the mortgage liquidity problem their number one policy issue in the next two years. They will argue that the sky is falling and it is.

"...Like so many parts of our American culture, the accessibility to unlimited and poorly scrutinized debt helped turn Americans into a sloppy group of consumers, which spawned greedy Wall Streeters, out of control lenders and starry-eyed investors."

Read all ten, and the rest of his article at Imagine housing without a secondary market

Housing Economic Recovery Act advances in the Senate - Do they read the bills they vote on? Really?

FreedomWorks, American Conservative Union,  Americans for Tax Reform ,  Citizens Against Government Waste,    Club for Growth,  Competitive Enterprise Institute,  and the National Taxpayers Union   have come together to urge the Senate to say NO to the Housing Economic Recovery Act, commonly known as the Dodd-Countrywide bailout bill.

Here’s an excerpt from their letter:

“The Dodd plan creates a new housing trust fund that will collect more than $530 million a year through a new levy on Fannie Mae and Freddie Mac. The trust fund in turn makes these funds available to politically active community groups like ACORN outside the normal appropriations oversight.

“In addition, the Dodd plan creates a new $300 billion facility that allows mortgage lenders to cherry-pick their worst performing loans and roll them into the FHA, shifting 100 percent of the loan liability to the taxpayer.”

http://www.freedomworks.org/uploads/dodd-frank-coalition.pdf

The THREE HUNDRED BILLION DOLLAR BAILOUT went to the Senate Floor today and advanced in the Senate with overwhelming support.

I'm thrilled that they are shouting we don't need more taxes so that Countrywide and others are empowered to keep doing business as usual . . . (I say Countrywide because from all appearances Countrywide will be one of the prime beneficiaries of this bill due to the overwhelming business it did in the sub prime market.)

The Housing Economic Recovery Act, if passed, will, after adding  $300 billion to the taxpayer’s burden, probably send those banks' worst loans to the FHA, which, you guessed it, will create another FIVE HUNDRED MILLION DOLLARS IN TAXES ON GSE's. (GSE's are Federal Home Loan Banks, Freddie Mac, Fannie Mae, Ginnie Mae, Federal Farm Credit Banks, Federal Agricultural Mortgage Corporation.)

These same issues are supported by findings released earlier this week by the Congressional Budget Office’s (CBO) scoring of legislation.

"Mortgage holders would have an incentive to direct their highest-risk loans to the program," the agency noted.

But the Congressional Budget Office thinks the FHA plan might only have a modest impact.

Despite up to $300 billion in loan guarantees, CBO's analysis of the Senate bill projects demand for only $68 billion through 2011.

"CBO estimates that approximately 400,000 loans would be guaranteed under this legislation with an average loan amount of $170,000 each. Thus, CBO estimates that FHA would require about $68 billion in loan commitment authority through 2011 to implement the program. "(The legislation would authorize FHA to provide up to $300 billion in loan guarantees under the new program)

AND   "...35 percent of the loans refinanced through the program will eventually default anyway."

CBO estimates that enacting this legislation would increase revenues by about $8.0 billion over the 2009-2018 period, net of income and payroll tax offsets. Over that period, we estimate that direct spending from those proceeds would total about $7.2 billion. The additional revenues would thus exceed direct spending by an estimated $800 million." Read the full text of the CBOs findings

So they've figured out how to arrive at a surplus in the budget, rather than a deficit by creating this whole new way of life for originators, lenders, sellers, servicers  . . . How about we just SPEND LESS MONEY?? Isn't that what you do when you don't have it?  You spend less.

Where do revenues come from for the federal government?  Regardless of who writes that last check,  ultimately, revenues come from taxpayers . . .

These bills are NOT going to improve the quality of life for most people . . . they will help lenders, who knew they had a parachute when they made these risky loans (REMEMBER THE S&L BAILOUT - they were bailed out with tax dollars).

And it will help people who probably shouldn’t have gotten a loan in the first place and may not pay it back even after this second chance.

Write your representatives. 

Stand Up and Be Heard, or you’re going to be paying for it for the rest of your life.

And, sadly, so will your kids.