The Mortgage PRO!

HOW FAST DO YOU DRIVE YOUR HARD DRIVE?

2007-03-28T13:12:00.000-07:00

It often intrigues me to find, that with regard to many things, people don't perceive something I call, "How Things Work." One day I suppose I may write a book; for how things work applies to everything!

Friends and associates alike often do not understand why and how their computers slow down in performance. While the causes of such diminishing performance are many, there are some that typify those that are most consistent. Many already know to delete the contents of their "cookie" folder as well as the "Temporary Internet Files" and their “Temp” folder. However, did you know that there are a multitude of "trace" elements left behind your web surfing in numerous areas of your computer you likely don't know about? I am not a true geek as I am constantly learning but I know enough to be dangerously efficient when it comes to optimizing daily computer performance. I am self taught which can be dangerous… lol

With trial and error I have discovered that which works!

Over time I have discovered methods and means to accomplish efficiency and where in the past much of the process was done by hand, we now have software that handles all of those concerns. I am always looking for value added and provide as much to others in every thing I do. It is to this end that I offer these solutions to you. Some you may be aware of while others may be new to you. Take what you can use and benefit from the value I have suggested and discard the rest. I use all of that which I am about to share with you… FOR FREE!

These are POWERFUL solutions to the issues of optimization and performance given no hardware changes that will enhance performance such as increasing random access memory (RAM).

Let me begin by describing the windows operating environment as a child with a toy box. When you fire up your computer, Windows (the child) says, “OK. It’s time to play!” Windows the child, then proceeds to throw all of its toys out onto the hard drive. Every time you open any software, its simply the child taking more toys out of the toy box. Later when you are through using your Word Processor or Internet Explorer or any software, you are essentially telling the child to put its toys away. Just like a child, not all the toys get put away! They certainly are not put away in a collated fashion!

The truth is that when you close a file some fragments of that file may still remain under the couch, behind the refrigerator and in the corner. And you KNOW you told that child to put everything away! Well, kids will be kids won’t they?

In fact, in prior versions of Windows, resources could easily compromise the speed at which your computer ran. The reason for that is due to the fact that when the child fails to put things back AND IN ORDER, the read arm on your hard drive, when you tell it to find a file, is forced to rummage through files that are not contiguous, files that are not in order and files that are fragmented. Fragmentation leaves gaps between files of open and or occupied space. Every fraction of space is read by the read arm when it is searching for that which you told the child to find. Because it has to look at everything that is in and out of order as well as looking at open space, speed of access is compromised. "Tech heads" referred to it as “Latent Seek Time.” The time it takes to find and present on screen, those things you’ve asked the child to find. This is why is is important to “DEFRAG” your hard drive at least once a month if not more depending on how much you use your computer.

When you “DEFRAG” your hard drive you are telling the child “widows” to put its toys away and to put them away in a contiguous and collated manner so that files have no drive space between them which makes the “Latent Seek Time” speed up. Unlike your children, the child “windows” actually knows where everything is. It just takes time to go get it when it does not end up with everything in order. When your hard drive is defragged you have optimized your computers ability to move quickly addressing your commands. If you are fortunate enough to own “Norton’s System Works,” I believe it was from 2003 (not free), it has a defragging tool that goes a step further and offers a better optimization of your drive space by not only defragging the drive but arranging intuitively, those files it knows you access the most and places those files on the drive for the fastest access possible. It does this by re-arranging file position/allocation to place those things necessary for ultimate seek time speed closest to the center of the disk. Obviously, the first would be the operating system files, High Memory allocation space, swap file space and then the files you access most often with those you use the least way out on the hard drive and at the end of contiguous file placement leaving nothing else on the drive but open free space.

HERE ARE THE SOLUTIONS I RECOMMEND.

First let me tell you that there is nothing wrong with Internet Explorer. I know that many are now using Firefox and Mozilla rather than Internet Explorer. It seems that many don’t know how to keep their computers updated and optimized.

I am going to give you several tasks to perform in the following order:

1) First thing you should do is update windows and if you don't have it set up for automatic updates than you should set it that way. To update windows go to:

http://update.microsoft.com/microsoftupdate/v6/default.aspx?ln=en-us

2) I suggest you defrag your hard drive no matter what windows defrag utility

tells you about not needing to do it.

3) Update your “Webroot” Spy Sweeper (excellent program) software or set it to update every time you logon to windows. In addition to what you are currently using may I suggest you also use as a cross check against Spyseeper; AVG Anti-Spyware 7.5. You can download it free at:

http://free.grisoft.com/doc/avg-anti-spyware-free/lng/us/tpl/v5

4) You should be running an Anti-Virus program. AVG also has an

excellent Anti-Virus program that has a small footprint on your hard drive

unlike Nortons.

You can download the free version at:

http://free.grisoft.com/doc/avg-anti-virus-free/lng/us/tpl/v5

5) Another feature that keeps your computer running optimally is to delete traces

of web surfing. Many people know how to delete the contents of your

“Cookie” folder as well as the “Temporary Internet Files” folder and the

“Temp” folder but do you know that surfing the net leaves traces in the

I.E. “History” folder? There are a good number of other “log files” you are

not likely to know about in XP that also need purging to keep your

computer running optimally. To do all this and discover all the files I refer to

I suggest two free downloads that will handle these issues and do it on

auto-pilot EVERY time you logon to windows if you set them this way; they

are CCleaner and Webroot’s “Windows Washer.”

You can download CCleaner at:

http://www.filehippo.com/download/dfd2c33821e6c294ab7e186cf58ea0eb/downloa/

To get the latest free version of Webroots’ “Windows Washer” go to:

http://www.webroot.com/consumer/products/windowwasher/?rc=266&ac=383&wt.srch=1&wt.mc_id=383

Once on this website look in the lower right hand column to find “Try Window Washer for Free.” Underneath this link it tells you to download the “trial” version. Do that and if it does expire on you hit me up and I will send you a permanent executable file. Once you have both CCleaner and Windows Washer you can set Windows Washer to run when XP opens. CCleaner you will run manually. This way you can test both software types and decide. CCleaner is not a trial version so if Windows Washer expires you will still have CCleaner. CCleaner is actually VERY fast; much faster than Windows Washer. I like them both and have kept them both. You will be amazed at how many trace element files receive data from the internet that eventually slows down your computer.

One last item that is highly significant is that XP has a file called “Prefetch.” It is another file that logs heavily from internet surfing.

THIS FILE CAN BE PURGED COMPLETELY! THERE IS NEVER ANY HARM IN DELETING EVERY SINGLE FILE INSIDE THE “PREFETCH” FOLDER! If you have never purged this file it can contain hundreds of trace elements or thousands depending on how long you owned your computer or how much you surf the net. It can eat up drive space! Both CCleaner and Windows washer can be set to purge this file simply be naming it.

Yes, you can tell either one of these software to add any file you choose to be purged BUT DON’T unless you know the consequences.

I suggest you DO NOT set either one to purge the Prefetch file. The reason is that the software will constantly ask you, per line item, are you sure you want to purge this file. It is a complete nuisance and will cause a novice to say that the software sucks. Therefore, do it manually at least once a week and certainly when you think about it. The prefetch file is located in XP’s “WINDOWS” folder.

There are two “WINDOWS” folders in XP. One is inside the “Documents and Settings” folder in Windows “Explore.” The correct file can be found by right clicking on the “Start” button in the lower left hand side of your system tray. You will get a pop-up box and inside it select “Explore.” This opens the “Start Menu” which shows the system “tree” where all the files on your hard drive are located. Scroll down to find the “Windows” folder. It will be located lower in the system “tree” below the “Programs” folder. (Note: both “Windows” folders will be found using this description. Just know that if you don’t see the “Prefetch” folder inside the “Windows” folder you are viewing, that you selected the wrong one. Now… go find the other one.)

Once you see the prefetch folder “Left” click on it. It will open up and display all the files inside the folder on the right hand side of the split screen. Go to the top of the “Prefetch” window that it switched to (it will say “Prefetch” in the upper left hand corner of the window.) and select “Edit.” A drop down list appears; click on “Select All.” This will turn every file on the right hand side of your “split screen” blue, as it has now been selected/highlighted. Next place your curser over any part of the blue highlighted area and right click it one time. A pop-up box appears and inside of it, select “Delete.” When the “Delete” properties box pops up, simply click “YES.” It is asking are you sure you want to delete all these files.

DONE! I know this description was lengthy and cumbersome but it tells you how to get to that file the fastest way. You could have simply searched for it through the “File Search” attribute in XP but I want you to know there that file resides in your system tree.

Ok, doing these things sounds very involved but trust me… Once you have the software installed and running, the only thing to do by hand is the prefetch purge and that… only once one a week depending on your surfing habits. The only other thing I suggest is that you run Defrag a minimum of once a month unless you are on your computer every day. Then you may want to do it more often.

May I suggest you run Defrag at night after you are through using your computer? That way it will not draw resources while you are running the net or using other programs. XP can handle it but if you have not defragged in a long time or perhaps never, it can take a very long time to complete defragging your hard drive.

Actually, this was a very good explanation along with suggested resources that you can use to optimize your computer. I don’t know about you but I have saved this to a file on my desktop in the event I want to share this information again. You may want to do the same. I hope this helps.

Warmest Regards,

L. D. Walls, The Mortgage Pro!
Mortgage Broker, Planner & Trusted Advisor, C.L.O., CalPERS

23272 Mill Creek Dr., Suite #100
Laguna Hills, CA 92653
213.700.1968

EMAIL: stocktec1@go2themortgagepro.com
WEB SITE: http://www.go2themortgagepro.com/Intro.aspx
BLOG SITE: http://www.themortgagepro.blogspot.com

Is an Interest-Only Loan the Right Loan For You?

2007-03-02T06:52:00.000-08:00

Interest-only loans have been generating a lot of interest over the last couple of years. As they become more readily available to the average consumer, more and more people are considering interest-only loans as a possible solution to their financial needs. But interest-only loans are simply not for everyone.

During the initial interest-only term of the loan, borrowers experience lower than average monthly payments. These payments may fluctuate based on the highs and lows of the market, but typically remain much lower than those of a traditional mortgage. But what happens after the interest-only period has passed?

Depending on the loan and the lender, borrowers have a few options after the interest-only period of an interest-only loan has expired. They may choose to pay the entire balance in full, which can be a huge financial burden. They may choose to refinance, in which case new loan-processing fees and closing costs enter the fray. Or they may choose to make payments on the balance for the remainder of the loan term, at which point the monthly payments skyrocket. So, who exactly would benefit from an interest-only loan the most?

• THOSE WHO WORK FOR IRREGULAR COMMISSIONS OR BONUSES

Lower monthly payments allow these borrowers to keep up during lean months and make larger payments when bonus time comes around.

• THOSE WHO WILL BE GENERATING SUBSTANTIALLY MORE INCOME IN THE NEXT SEVERAL YEARS

Career fast-trackers who will generate more income will be more able to handle the increased monthly payments after the interest-only period has ended.

• THOSE WHO WILL INVEST THE SAVINGS GENERATED BY AN INTEREST-ONLY LOAN

Those who place the savings generated from an interest-only loan over a traditional mortgage into an investment vehicle with a high confidence of return will be more capable of handling the principal payments, and may even be able to pay off the entire balance at once.

• THOSE WHO LIVE IN AN AREA WITH A HIGH-COST HOUSING MARKET

Some regions (such as those on the East and West Coasts) have particularly high-cost housing markets. Low interest-only payments allow borrowers to afford homes more easily in such inflated housing markets.

• THOSE WHO EXPECT TO MOVE BEFORE THE INTEREST-ONLY PERIOD IS OVER.

Those who expect to live in a home for only a few years would do well to consider an interest-only loan. They will benefit from low interest-only payments without the soaring costs afterwards.

As you can see, interest-only loans aren't tailored for everyone. The initial savings offered by interest-only loans are tempered by the deferred principal payments that come due afterward. Whether an interest-only loan seems like it may be a good fit or not, if you're thinking about refinancing your mortgage or looking for a home, please give me a call at 213-700-1968 today! There's no reason to box up your financial goals and wait around. Visit my website www.go2themortgagepro.com and see all that I have to offer!

Sincerely,

L. D. Walls, The Mortgage Pro!
23272 Mill Creek Dr., Suite #100
Laguna Hills, CA 92653
213.700.1968
EMAIL: stocktec1@go2themortgagepro.com
WEB SITE: http://www.go2themortgagepro.com/Intro.aspx
BLOG SITE: http://www.themortgagepro.blogspot.com/

Saving for a Down Payment?

2007-03-02T05:10:00.000-08:00

Saving for a down payment isn’t as daunting as you might think. In addition to your cash savings, there are many resources you can tap into to help with your down payment. Here’s a quick list of some of the most common ways buyers gather their down payment funds.

TIPS FOR ACCUMULATING A DOWN PAYMENT

• BORROW THE DOWN PAYMENT FROM YOUR RETIREMENT PLAN
Check the provisions of your retirement plan.
You can borrow funds from a 401(k) plan for a down payment
or make a withdraw from an Individual Retirement Account.

• SELL SOME INVESTMENTS

• GIFT FROM FAMILY
Parents and other family members are often anxious
to help children buy their first home.
They may have the means to give you a gift of money for a
portion or all of your down payment.

• DOWN PAYMENT ASSISTANCE CHARITIES
If a willing and able family member is not available, you
also have the option of turning to a non-profit organization
for down payment assistance. You can learn more about down
payment assistance charities by visiting my website:

www.go2themortgagepro.com.

LOW DOWN PAYMENT AND NO DOWN PAYMENT MORTGAGES

Don’t let the thought of saving for a down payment deter you from purchasing a new home. There are many low down payment and even no down payment programs available. I’d be glad to help you find a loan option that meets your financial situation. Give me a call at 213-700-1968 or e-mail me at StockTec1@go2themortgagepro.com to set up a time to meet that is convenient for you.

I look forward to hearing from you.

Stay Focused,

L. D. Walls, The Mortgage Pro!
23272 Mill Creek Dr., Suite #100
Laguna Hills, , CA 92653
213.700.1968
EMAIL: stocktec1@go2themortgagepro.com
WEB SITE: http://www.go2themortgagepro.com/Intro.aspx
BLOG SITE: http://www.themortgagepro.blogspot.com/

Are you paying for Private Mortgage Insurance (PMI) unnecessarily?

2007-03-02T04:35:00.000-08:00

PMI, also known as Private Mortgage Insurance, is a supplemental insurance policy you may be required to obtain in order to get a mortgage loan. PMI is provided by private (non–government) companies and is usually required when your loan–to–value ratio – the amount of your mortgage loan divided by the value of your home – is greater than 80 percent. PMI isn’t a bad thing – it allows lenders to accept lower down payments on homes, which in turn helps many of us buy our home.

HOW IS PMI CALCULATED?

PMI is calculated by your mortgage lender and covers the lender for a percentage they think will make them whole if they have to sell your property in foreclosure. Your PMI premium is fixed based on plan type (loan–to–value ratio, loan type, loan term, etc.) and is not related to your particular credit history or other individual characteristics. PMI typically amounts to about one–half of one percent of your mortgage amount, according to the Mortgage Bankers Association, and the premium payment is usually rolled into your monthly mortgage payment. On a $200,000 mortgage, you may be paying $1,000 per year for PMI.

HOW CAN YOU ELIMINATE YOUR PMI INSURANCE?

For loans made after July 1999, lenders are required by federal law to automatically cancel PMI when the loan balance falls below 78 percent of your purchase price not when you achieve 22 percent equity, which will happen much more quickly with rising property values. (Certain "higher risk" loans are excluded.) You do, however, have the right to cancel PMI (for loans made after July 1999) once your equity reaches 20 percent, regardless of the original purchase price.Keep track of your principal payments, and what other homes are selling for in your neighborhood. If your loan is under five years old, chances are you haven’t paid down much principal – it’s been mostly interest. Since property values in many parts of the country have gone through the roof lately, you can earn you 20 percent equity even if you haven’t paid down much principal.When you think you’ve reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments! You will need to notify your mortgage lender that you want to cancel PMI payments and you’ll need to submit proof that you have at least 20 percent equity. A state certified appraisal on the appropriate form (URAR– 1004 uniform residential appraisal report for single family homes) is the best proof there is – and most lenders require one before they’ll cancel PMI.

WE CAN HELP YOU ELIMINATE PMI!

If you think you have at least 20 percent equity in your home by now, send me an e–mail at StockTec1@go2themortgagepro.com and I’ll be happy to let you know at what price homes in your neighborhood are currently selling. I’ll also include a list of appraisers in the area who can complete an appraisal for your property to see if you can eliminate your PMI insurance. If you can avoid paying hundreds of dollars a year to insure someone else’s risk, it’s worth starting right away.

Stay Focused,

L. D. Walls, The Mortgage Pro!
23272 Mill Creek Dr., Suite #100
Laguna Hills, , CA 92653
213.700.1968
Web Address: http://www.go2themortgagepro.com/Intro.aspx
Emai Address: stocktec1@go2themortgagepro.com

Tip of The Month

2006-08-17T00:38:00.000-07:00

Tell the truth

Mortgage Originators have a special responsibility to deal ethically and honestly with customers. If you are licensed by the Department of Real Estate in your state it is required by law. Half-truths are not whole truths; they are whole truths missing half the information which is likely to be misleading. Do not tolerate partial, incomplete or misleading disclosures. Business-owners and managers establish an office's corporate policy with regard to ethics, and they should be extraordinarily ethical and honest. Employees should associate themselves only with owners, managers and colleagues who have good reputations in the industry.

Do you have a "HOT" business or marketing tip?
E-mail it in 75 words or less to stocktec1@go2themortgagepro.com, Subject: Tip of the Month

An Interview with God

2006-04-25T04:56:00.000-07:00

INFLATION REPORT

2006-03-08T22:00:00.000-08:00

WASHINGTON, Mar 01, 2006

-- U.S. personal incomes rose 0.7% in January, but higher inflation eroded most of the gains, the Commerce Department reported Wednesday.

Consumer inflation increased 0.5% in January on higher energy costs. Core inflation, which strips out food and energy costs to give a better view of underlying inflation pressures, increased 0.2%.

Core inflation has risen 1.8% in the past 12 months, down from 1.9% in December and just below the 2% lid the Federal Reserve would like to keep on inflation. It's the lowest year-over-year core inflation since March 2004.

Real disposable incomes - after inflation and after taxes - increased 0.1% in January, the weakest gain since August. Real disposable incomes are up 2.2% in the past 12 months. Real consumer spending - adjusted for inflation - increased 0.4% in January, the weakest since October. In nominal terms -- that is, not adjusted for price changes -- consumer spending rose 0.9%, the biggest gain since July.
The personal savings rate fell to negative 0.7%, the lowest since August. Savings have been negative for eight of the past 10 months.

The divergent inflation numbers - with headline inflation soaring 0.5% but year-over-year core inflation moderating - puts the Fed's dilemma in stark terms. While the Fed focuses on core inflation as its policy target, it cannot afford to unleash inflationary forces.

The Federal Open Market Committee is expected to boost its overnight lending rate to 4.75% in four weeks, and will likely add another rate hike in May or June, analysts say. In the report, the government also revised third-quarter income figures higher by about $20 billion annualized. If past years are any gauge, fourth-quarter incomes could be boosted much higher in later revisions, as year-end bonus incomes are reported. Income from wages and salaries increased 0.7% in January, the biggest increase since July. Real spending on durable goods increased 1.3%. Real spending on nondurable goods also rose 1.3%. Real spending on services fell 0.3%, largely reflecting lower heating bills.

Who We Are

2006-03-02T01:39:00.000-08:00

"Let's make 2006 YOUR best year!"
L. D. Walls, C.L.O. CalPERS, Mortgage Broker,
Planner & Trusted Advisor

We are “Mortgage Planners” and “Trusted Advisors” to our clients. We help our clients successfully manage their home equity to increase liquidity, safety, rate of return, and tax deductions. We are not traditional loan officers or commoditized application takers. Our role is to help our clients integrate the loan that they choose into their over-all long and short term financial and investment plan to help minimize taxes, improve cash flow and minimize interest expense.

We understand that the largest asset on a family’s balance sheet is their home. We’ve discovered many people mismanage the equity in their home. They have goals to try and pay off their home the smartest, quickest way possible, but may go about it the wrong way. Most people devote the largest portion of their incomes to housing. Consequently, how you handle the purchase of your home will have far-reaching implications on virtually every facet of your financial life, including your ability to save, pay for college and plan for retirement.

Too often, people buy homes in a vacuum, without considering how that purchase is going to affect other aspects of their lives. This can be a big mistake, and therefore you must recognize that owning a home holds very important implications for the rest of your financial plan. Although a fine goal, owning a home is not the ultimate financial planning goal, and in fact how you handle issues of home ownership may well determine whether you achieve financial success.

One of the top 100 Financial Planners in the country, Bert Whitehead, CFP, wrote in his book, Facing Financial Dysfunction, “Use your mortgage to convert wealth to capital. Your mortgage provides positive leverage, good debt that promotes long term financial freedom. It is actually much more risky from an asset allocation standpoint to have a home paid off and few other assets, than to have a mortgage and a more balanced investment portfolio.”

Steven Drozdeck and Lyn Fisher in their book, Wealth Management Teams says, “If you want to get rich, don’t look at the guy at your own level, look at the wealthy and ask, ‘What are they doing differently....and why?’” They go on to say, “For middle class America, properly managing their home’s equity over time can be the difference between being able to retire when they want to, versus not being able to retire at all.”

Take a look at what professional mortgage planning can do for you. Give us a call and see how our advice makes the difference. Help us understand what’s important about a home loan to you.

GO 2 MY WEBSITE !

Use the link at the very bottom of this page, on the left, to go to my website. Once there, please refer to the Loan Application button in the header above and fill out a full application or use the short form.

Additionally, you may be simply looking to ask a question about buying or selling a home in which case please use one of the buttons in the right hand column (Got A Question?, Home Status Report, Looking to Buy?, Looking to Sell?) and we will get back with you quickly with the answers you are looking for.

Use our calculators to check your scenarios but keep in mind, while the tools we supply here at The Mortgage Pro! are amazing, they are no substitute for a one on one consultation with a qualified mortgage planning professional.

Best Regards,

L.D. Walls, The Mortgage Pro!

Monday Jan. 30, 2006 Rate Lock Advisory

2006-01-30T10:08:00.000-08:00

Rate Lock Advisory

2006-01-13T19:47:00.000-08:00

Friday's bond market has opened in positive territory following the release of this week's most important economic data. The stock markets are nearly unchanged with both the Dow and Nasdaq down only 1 point. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

The Commerce Department reported this morning that sales at retail establishments rose 0.7% last month. This was lower than revised forecasts of a 1.0% increase, indicating that consumer spending was not as strong as thought. This is great news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy.

The second piece of data released today was December's Producer Price Index (PPI). The Labor Department said that the overall PPI more than doubled forecasts, rising 0.9%. However, the good news came in the more important core data that showed a 0.1% increase, falling short of the 0.2% that was expected. This eased inflation concerns since the increase in the overall reading is being attributed to fuel prices that can be volatile month to month.

This morning's news is good for the bond market and I believe opens the door for bonds to move higher and mortgage rates to drop. Accordingly, the lock/float recommendations are being adjusted.

Next week brings us the r! elease o f a couple of reports. The first comes Tuesday with the release of December's Industrial Production data. Later in the week the Consumer Price Index (CPI) will be posted along with the Fed Beige Book. Look for more details in Sunday's weekly preview.

The bond market will close early today ahead of the Martin Luther King Day holiday and will reopen Tuesday morning. Both the stock and bond markets will be closed Monday.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers

Excitement Brews at The Mortgage PRO!

2006-01-06T00:48:00.000-08:00

This will be our BEST YEAR EVER!

I am committed to providing our clients with the very best financial consulting in the market. Several weeks ago I invested in a powerful web presents at http://www.go2themortgagepro.com/Intro.aspx

This very sophisticated web site provides for the highest level of security encryption in the industry. It integrates seamlessly into my LOS (loan origination software) from anywhere in the world. Clients are now able to fill out a 1003 loan application form online in the privacy of their homes or office… even on the road wirelessly, thus saving time. If they cannot finish at that moment, it’s OK. They may return later using their own password and username they choose and complete the forms and submit them directly into my LOS. It also accepts faxes through an 800 number that turns documents into a form that accepts electronic signatures eliminating the need for so called “wet-documents.” That means that lenders can accept these electronic signatures over the internet! This is a tremendous time saver.

At the same time I invested in and have been training on the most powerful software in the market aimed at examining unique sales situations that mortgage planners like myself encounter every day, such as purchase decisions and refinance analysis. I believe this will elevate The Mortgage PRO! to the highest level of service in the industry. The makers of this software spent hundreds of thousands of dollars developing it.

The Mortgage PRO! recognizes that the typical loan officer has become little more than an application taker. The suite of programs helps to correct that situation by using detailed reports and analyses in order to demonstrate how small changes in loan terms can have a great effect on a client’s long-term financial objectives.

The ultimate aim of The Mortgage PRO! is to elevate a loan officer to the rank of “Trusted Advisor and Mortgage Planner.” The path from client education to client retention can be greatly enhanced when the “Trusted Advisor and Mortgage Planner” demonstrates knowledge of different scenarios and offers practical examples about how the client can meet all of their investment goals.

If individuals like lawyers and tax accountants can have loyal clients who make decisions based on their acknowledged wisdom and experience, loan officers can provide a valuable service too.

“Today’s mortgage market is very competitive and traditional loan officers are being commoditized.” Steven Marshall, CEO of Strategic Equity said. “Having successfully originated and closed over $1 billion in home loans in my lending career,” he continued, “I am always looking for the best tools and systems to position myself as a mortgage planner. “This is the best software on the market for helping officers integrate the home loan into the client’s financial plan,” Mr. Marshall pointed out. “I personally use it and recommend the software to all of the mortgage planners that I certify in my Strategic Equity Program,” he noted.

At Pacific Coast Lending in Agoura Hills, Calif., president Mark Klein closes $250,000,000 in loans a year and is consistently among the Top 50 Mortgage Originators in the country.

He explained that his company started in 1992, specializing in working with professionals in the financial service industry and business owners. They are a 100% referral-based company and position themselves as financial planners who specialize in mortgage consulting. PCL has been involved with this software for many years, acting as original beta testers.

The total cost and consolidation analysis modules allow "Trusted Advisors and Mortgage Planners" to present all possible loan options to clients, ensuring that they receive the best possible loan for their needs.

In addition, the software also helps "Trusted Advisors and Mortgage Planners" by showing that paying points and fees now can actually help the client in the long run.

First on the agenda for a new "Trusted Advisor and Mortgage Planner" is building a client database. The software can import a database or help someone create one from scratch, easily and fairly quickly. One caution though, the database will be at the heart of the entire implementation undertaking. It should be thought out carefully and managed judiciously. To facilitate the process, The Mortgage PRO! will provide our new users an easy-to-follow training video. The database can be sorted by client name, zip code, loan balance and interest rate in either ascending or descending order, and filters can be applied to select records that fall between parameters.

RateWatch is a useful module that compares monthly payment to the current market and shows how a monthly pre-payment plan can decrease the time period of the loan and ultimately save the borrower money as well. It is presented in a one-page report that can be mailed in a standard business envelope via snail mail or emailed. It is something that we send out to keep The Mortgage PRO! name and product line in front of our clients.

The Mortgage PRO! suggests to our officers that they select five programs from our list and include current loan data. The program allows for five conforming and five jumbo mortgages and automatically includes the client’s current data shown in the database. If the client calls in to learn more, The Mortgage PRO! suggests that the next step should be a run of the Total Cost Analysis.

My favorite module is the Total Cost Analysis. It develops a total cost analysis using four scenarios, a term reduction table showing how to become debt free faster by applying more dollars each month toward the principle, and a monthly table showing the tax benefit of a loan. It seems to me that The Total Cost Analysis module gives the "Trusted Advisor and Mortgage Planner" the best advantage since the fine points of various loan combinations are not generally apparent to the typical owner/purchaser.

This module is one of the prime examples of how the loan officer qualifies as a "Trusted Advisor and Mortgage Planner" by using this software. The Mortgage PRO! has several more modules available ranging from Rent vs. Own, to PMI Analysis, to Equity Repositioning and more.

The Mortgage PRO! says, “This is the best software on the market for helping officers integrate the home loan into the client’s financial plan... bar none.”

If you are an industry insider and are interested in finding out how to acquire this remarkable software, please contact me. Make 2006 a great year!

All the best,

The Mortgage PRO!

Getting a Home Loan May Get Tougher Soon.

2005-12-19T17:29:00.000-08:00

If you have been thinking about buying a home but have been sitting on the fence lately and buying into the possibility that home prices may be falling soon, you better get off that fence fast!

The "Speak" on the street is that pressure is building that could make landing that precious home loan more difficult to get.

This past week the "FED" raised the discount rate another 25 basis points. This is in an effort to continue to keep inflation in check. However, the first rates adversely affected are those tied to Adjustable Rate Mortgages (ARMS) and shorter term financing such as credit card rates (the so called short end of the yield curve which are associated with short term treasury notes).

As rates are beginning to ratchet up on ARMS, the "FED" is planning to tighten underwriting rules on home loans. The ARM rates, that don't sit still, are seen as especially risky. Another popular loan type that the FED is scrutinizing are those that require little or no documentation about the borrowers' income, expenses or ability to repay the loan. These are known in the industry as "No Income/ No Assets" (NINA's)or Stated Income Stated Assets type loans where the lender does not verify either of these important components to qualifying. There are a number of other names given to loans with minimal income and or asset verifications.

For the last 6 years or so buyers have been able to deal with record-setting and skyrocketing home prices through the use of low interest rates along with the increasing numbers of easy qualifying loans which include Option ARMS, Interest Only Loans and the like along with 40 year terms to get the payment even lower.

ARMS come with initially lower rates, hence smaller payments that lend borrowers more leverage to buy more expensive homes or homes for which they may not have otherwise qualified. In the land of high home prices fixed-rate mortgages (FRMS) with their higher rates and higher mortgage payments are pricing a growing number of would-be home buyers out of the market.

ARMs, however, could begin to price home owners out of their home.

ARMs' cheaper initial rates are tied to home loan indexes, the interest rate starting point to which margins are added to set and move the actual ARM rate. The indexes are up and rising this year, nearing levels double what they were at some points last year.

The popular prime rate, for example, is now at 7.25 percent compared to just 5 percent a year ago and a static 4 percent for the last half of 2003 through the first half of 2004.

Federal monetary system experts are concerned too many home owners may soon be saddled with home loans they can't afford as their monthly payment rises beyond their financial reach.

In the third quarter, mortgage research firm Loan Performance said 33 of first mortgages approved by lenders were nontraditional loans, compared with 1 percent five years ago.

Within the next week or two, federal monetary officials plan to release a second set of guidelines aimed at lenders with portfolios heavy with the riskier loans. The feds want lenders to roll back the number of originations on riskier loans through tighter underwriting standards. That will make it more difficult for home buyers to land a loan, especially home buyers already on the border line of qualifying for a mortgage.

"Too many consumers have been attracted to products by the seductive prospect of low minimum payments that delay the day of reckoning, but often make ultimate repayment of growing principal far more difficult," said Comptroller of the Currency John C. Dugan in an early December speech to the Consumer Federation of America.

"At the same time, too many lenders have been attracted to the product by the prospect of booking immediate revenue without receiving cash in hand, a process that often masks underlying credit problems that could ultimately produce substantial losses," Dugan added.

Earlier this year, on May 16, coinciding with a heightened level of warnings about escalating home prices, industry fraud, the potential for higher interest rates and other concerns, the Federal Reserve, along with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration, issued the joint "Credit Risk Management Guidance For Home Equity Lending".

The advisory said the quality of lenders' home equity portfolios was of concern, especially if "interest rates rise and home values decline. Sound underwriting practices and effective risk management systems are essential to mitigate this risk."

However, months later, rather than tighten requirements for home loan approvals, almost 40 percent of domestic banks reported that over the past two years they had increased the maximum size of primary mortgages they were willing to provide, while about 30 percent, indicated that over the same period they had increased the maximum size of second mortgages, according to the Federal Reserve Board's "October 2005 Senior Loan Officer Opinion Survey on Bank Lending Practices".

What's more, about one-fourth of those surveyed said that they had narrowed spreads of mortgage rates over an appropriate market base rate (which means there are more loans with attractive rates available) and that they had increased the maximum loan-to-value ratio on such loans (which means borrowers are allowed to carry even greater debt loads).

In his speech, Dugan dissected a payment option mortgage to reveal what could be a very rude awakening for some borrowers.

During the first five years of payment options, the loan allows the borrower to select from a menu of payment possibilities, low to high. If the borrower chooses the lower monthly payment he or she will pay little if any of the principal during the period. Meanwhile, the loan balance grows, amortizing negatively until the sixth year when payments are adjusted to ensure the principal is paid off over the remaining 25 years of the loan.

With a typical $360,000 payment option mortgage that begins with a 6 percent interest, monthly payments could increase by 50 percent in the sixth year if interest rates do not change. If rates jump two percentage points, to 8 percent, monthly payments could double.

"Is this an appropriate product to mass market to customers who may be looking at the less than fully amortizing minimum payment as the only way to afford a larger mortgage -- at least for the five years before the onset of payment shock?"

Dugan also asked, "And are lenders really prepared to deal with the consequences including litigation risk - of providing such products in markets where real estate prices soften or decline, or where interest rates substantially increase?"

Only time, and the fed's second advisory this year, will tell. We will have to wait and see.

Find Hidden Gold

2005-12-19T15:00:00.000-08:00

New Loan Limits Create Refinance Opportunities for You!

Find some hidden gold this month! For example, just in time for the holidays, Fannie Mae and Freddie Mac announced a gift to the industry: the conforming loan limit for single-family homes in the continental United States will rise to $417,000 in 2006, an increase of almost 16 percent over the 2005 limit of $359,650.

When loan limits increase, some clients with whom I assisted with mortgage planning in the past may now qualify for loans at lower interest rates if their loan now falls within conforming rather than jumbo loan limits.

This adjustment could mean a significant reduction in your payment. On a 30-year, $417,000 loan at last year’s jumbo rate of 6.375%, a new conforming rate of 6% would mean a $101 difference in payments each month, or more than $1200 a year, without any change in interest rates.

How can you best take advantage of this information? Well, The Mortgage Pro gift-wraps it for you! With one phone call to my office (213-700-1968) the power of this savings can be analyzed for you.

What Causes Mortgage Rates To Change?

2005-12-14T22:37:00.000-08:00

Did you know that one or more rate changes per day is normal?

Actually, it is unusual not to have at least one rate change in a day. Most people do not know that. Rate quotes can change when you call back later that same day. In the lending business, a rate change can also include a change in the point cost for the same rate. In other words, a rate can be no points in the morning, then later that day cost ¼ point. That is a rate change to lenders. Did you also know that mortgage rates are not directly affected by what Alan Greenspan does? Many times a fed rate cut can cause mortgage rates to go up. Mortgage rates change primarily based on: 1) the perception of inflation, 2) times of uncertainty and 3) the movement of money in and out of the stock market--that's it. When a piece of economic data shows weakness or uncertainty in the economy, rates tend to fall. The opposite is also true. A drop in the unemployment rate, a rise in durable goods orders, a rise in the consumer confidence index--rates go up. These influencing factors can present themselves at any time, many without warning, affecting mortgage rates instantly. There is no "delay". It doesn't take time to "filter down" like some people think. Reading the paper for quotes doesn't really work because the information is old by the time you read it. Radio, TV and billboards are not the answer because the details are always missing. They just want to get you on the phone. Competitive lenders can deliver nearly identical rates to each other. Most borrowers don't ask the right questions and focus only on the interest rate. Try to think MATH and as it pertains to you. That's all that matters.

Is A Direct Lender Better Than A Mortgage Broker?

2005-12-14T22:35:00.000-08:00

NO!

First, if a couple of lenders were always the cheapest, everyone would eventually know about them, right? Over the last several years, we have seen amazing advances in home mortgages. Today’s homebuyer has the widest variety and the most unusual types of loans ever available. Mortgage brokers have dozens more of these loan programs for customers than any single lender. And most of the time, they can provide better deals. This is because they represent the WHOLESALE rates of these lenders. These are rates and fees not available to the public. For example, ABC Bank might be quoting you 5.5% and 1 point for a loan. A broker representing the very same bank can also quote the same rate and fee. The broker is probably paying NO points for that loan. They add the point back and keep it for themselves. They can also quote ¾ of a point and beat the retail quote of that bank. This is the essence of broker competitiveness. The “best deal” is always changing from lender to lender. A broker has so many sources and receives so much up to date pricing, you are more likely to save money than not. Next time a big national lender tells you that the broker is only a middle man and therefore cannot beat their deal, get it in writing.

The bottom line is that there is no one source that is the cheapest. The only other way most lenders can compete with one another is to somehow convince the public that they have some "secret way" of providing lower than market rates. The market is the market and you pay for it one way or another. Work with a mortgage professional that can explain it all in make sense terms.

How Do I Get The Best Rate?

2005-12-14T22:33:00.000-08:00

It is NEVER about the best rate.
IT IS ABOUT THE BEST MATH, PERIOD!

There is NO other answer than that.

I was recently working with a couple with very high incomes and FICO scores. The husband was a long time friend of mine whom I told early on, that I DO NOT play the rate shop game. That I am trusted by my clients as their mortgage planner and advisor. It was not until I had gotten deep into the negotiating process with several of my investors and had developed several options from which they may choose, that I was informed that they (he), had selected another lender who claimed to have a lower rate. In fact, the rate was only 1/8th lower than mine. However, they were charging one point (1%) origination on the loan plus an additional $2,500. When I asked, "If they are charging you 1 percent to originate the loan, what was the additional $2,500 for?" He said that he was not paying for an appraisal nor a credit report.

He and I negotiated one point too but I was not charging an additional $2,500! I knew immediately what he WAS paying for. He was paying to buy that rate down! An appraisal for his home would have cost $350 while the credit report would have cost $50... if that much. So he was paying $2100 to buy the rate down 1/8th of a point! I suggested he ask them why the $2,500 fee and he still decided to go with them; This after they delayed closing his loan for 3 months which cost him a full point on his rate by the time he talked to me. BAD DECISION! Frankly, his decision made absolutely no sense financially. Still, I recognize a persons right to make a bad decision. Obviously he did not trust me.

Here is the deal. First, lower rates come with more points and fees. That's not the real issue either. There is a break even point to contend with when paying points and fees, tax deductions to figure out and your available cash. In the case of a purchase loan, points are tax deductible in the year that you pay them. That is good, but then again, so is the interest you think you are saving. With a refinance, the points are usually only deductible over the full term of the loan. That could be 30 years, making the benefits and the break even point years down the road. So why do so many lenders advertise really low rates with all of those points and fees? Because they know most consumers look at the rate, not the math. That advertising strategy works really well. How about the lowest APR? Often, the more points you pay, the lower the rate and APR. True, but not the answer. Get that loan officer/application taker to take apart each rate and fee quote to find out what the best MATH is for you, period!

It only takes a few seconds for the professionals at The Mortgage PRO! to do it. We are "Mortgage Planners" and "Trusted Advisors." After that, it's your decision.

Dollars don't just make "cents," they can make you wealthy! Trust and Integrity is EVERYTHING!

Comments from a Road Trip to Palm Springs

2005-12-12T08:12:00.000-08:00