Korene's Blog

A recent study shows a direct link between car ownership in a given neighborhood and mortgage foreclosure rates.

The Natural Resources Defense Council conducted the study, "Location Efficiency and Mortgage Default," by comparing 40,000 mortgages in Chicago, San Francisco, and Jacksonville, Fla., along with U.S. Census data on neighborhood conditions, incomes, and car ownership.

The study found that, as the average number of vehicles per household in a neighborhood rises, so does the probability of foreclosure, after controlling for income.

"Add urban sprawl to the list of sources for our current financial mess," said David Goldstein, co-director of the nonprofit public health and environmental advocacy organization's Energy Program.

"It was not just predatory lending or lax standards. The connection between transportation costs and mortgage default cannot be ignored. The sooner we address it in our lending and development practices, the sooner we will start to see a more stable real estate sector."

The council defines location efficiency as a measure of the transportation costs in a given area. Transportation costs accounted for 17 percent of Americans' average annual household expenditures in 2008, according to the U.S. Bureau of Labor Statistics. Those without cars or with fewer cars would save money on vehicle lease or purchase costs, maintenance, gas, insurance and parking, the council said.

Due to higher energy costs, homebuyers are increasingly factoring in commuting costs and energy efficiency when purchasing a home, according to the National Association of Realtors. Commuting costs and heating and cooling costs were at least "somewhat important" to 78 percent and 88 percent of homebuyers, respectively, according to the association's 2009 Profile of Home Buyers and Sellers.

The real cost of housing should be calculated as a combination of mortgage and transportation costs, the council said. The rate of vehicle ownership, which reflects neighborhood compactness, walkability and access to public transit, is "key to predicting mortgage performance," and both urban planners and mortgage underwriters should change their policies accordingly, the council said.

"In all three cities, the results were the same -- if your only choice is to drive, you have much less economic flexibility -- flexibility that can protect you from foreclosure in tough times," said Jennifer Henry, real estate sector manager in the council's Center for Market Innovation.

"Knowing that now, aggressive investment in public transportation and walkable communities makes even more sense. And investing in transit will not just improve our economy by avoiding future foreclosures -- but create jobs to get things humming right now."

If mortgage lenders take into account a location's transportation costs, they would more accurately be able to gauge the borrower's ability to afford the home, the council said.

It gave the example of two hypothetical borrowers in Chicago: Both have credit scores of 680, a total debt-to-income ratio of 41 percent, and a home-to-value ratio of 80 percent. But one borrower lives in a neighborhood where the median vehicle ownership per household is one car per $33,000 of household income and the other lives in a neighborhood where that ratio is one car per $58,000 of household income.

The first has a 9.9 percent risk of foreclosure; the second, a 7.2 percent chance. That means that even if the second borrower has a debt-to-income ratio up to 62.5 percent, changing nothing else, that borrower's risk of foreclosure will be the same as the second borrower.

Location efficiency also helps maintain home values, the study said, pointing to an August 2009 study that showed that homes in neighborhoods where goods, services and fun things to do are located within walking distance can command a price premium of $4,000 to $34,000 over otherwise similar homes in less walkable areas (see story).

Based on the results of its study, in addition to changes in mortgage underwriting, the council recommended that land-use planners put "smart growth" policies in place that encourage more compact urban development, invest in areas that have already been developed and preserve open space, and improve public transit systems as well as bicycle- and pedestrian-friendly infrastructure.

Policies to reduce dependence on automobiles would also provide great benefits to the environment, including land conservation, a reduction in watershed pollution, and lower carbon dioxide emissions, the council said.

The Home Energy Saver online service is designed to help consumers identify the best ways to save energy in their homes, and find the resources to make the savings happen.

The Home Energy Saver was the first Internet-based tool for calculating energy use in residential buildings. The project has been sponsored by the U.S. Department of Energy (DOE), as part of the national ENERGY STAR Program for improving energy efficiency in homes, the U.S. Environmental Protection Agency (EPA), the US Department of Housing and Urban Development's PATH program, the California Air Resources Board, the California Energy Commission's Public Interest Energy Research (PIER) program, and Touchstone Electric Cooperatives.

The Home Energy Saver quickly computes a home's energy use on-line based on methods developed at Lawrence Berkeley National Laboratory. Users can estimate how much energy and money can be saved and how much emissions can be reduced by implementing energy-efficiency improvements. All end uses (heating, cooling, major appliances, lighting, and miscellaneous uses) are included. A detailed description of underlying calculation methods and data is provided a comprehensive report. The Home Energy Saver's Energy Advisor calculates energy use and savings opportunities, based on a detailed description of the home provided by the user. Users can begin the process by simply entering their zip code, and in turn receive instant initial estimates. By providing more information about the home the user will receive increasingly customized results along with energy-saving upgrade recommendations.

CLICK HERE TO START YOUR ONLINE ENERGY AUDIT

The recession has led to new tax credits and deductions.

The changes along with increases in the standard deduction, personal exemption, alternative minimum tax exemption, and a  few others may bring a little extra cash to some people during these economic hard times OR NOT.

Lawmakers tried to aid the ailing auto industry by producing a new deduction for sales and excise taxes incurred in the purchase of a new car. That's on top of the Cash for Clunkers program, which brought hundreds of thousands of people into auto showrooms around the country.

The first-time homebuyers credit was expanded to allow for a reduced credit for long-time homeowners who buy and move to another residence. The National Association of Realtors estimated that about 4.4 million people already have or will claim the credits before they expire.

And to put a little more money in consumers' wallets, the Making Work Pay tax credit kicked in last spring. Tax withholding tables were revised downward to give individuals up to $400 and couples up to $800. The result: more take-home pay for about 95 percent of working families.

There's a catch, though.

People with more than one job, couples in which both spouses work and some Social Security recipients may have received too much of a credit because of the way the program was set up. "It may wind up that they owe taxes or the big refund they expected might not be as big as they thought," said Barbara Weltman, author of J.K. Lasser's "1001 Deductions and Tax Breaks 2010" and "Small Business Taxes 2010."

Taxpayers have a new form, Schedule M, to claim the credit. However, like other changes to tax-rate brackets and personal exemptions, most workers already are seeing its benefits in their take-home pay. Weltman said the form isn't that complicated. "The shock is going to be whether you owe more than you think," she said.

The Treasury Department's inspector general for tax administration estimated that more than 15 million people could be affected. The extra tax bill could be up to $400 for individuals or couples or $250 for Social Security recipients.

So why give people the money in the form of lower withholding if there's a chance the government will take it back?

I think at the time lawmakers were just more concerned about getting the money into the hands of Americans and giving the impression of helping the American voter than they were with the long term economic effects this generated.

By the same token, the Internal Revenue Service says some taxpayers whose withholding was at or near zero may not have benefited from the credit during 2009. These people are predominantly low- or moderate-income workers.

It is important that people review their withholdings for 2010 because the tax credit will still be in effect.

Schedule M isn't the only new form for the 2009 tax year.

People who don't itemize their deductions are entitled to take a standard deduction. For 2009, it's $11,400 for married couples filing jointly, $5,700 for individuals and $8,350 for heads of households. As in the past, the standard deduction is bigger for people who are blind or 65 or older. If that's all you're claiming for your standard deduction, there are no extra forms to file. The IRS predicts that the majority of those claiming the standard deduction will fall into this category.

The standard deduction is not standard any more. Tax law changes passed by Congress in 2009 allow some taxpayers to increase their standard deduction even more, by adding to it the property taxes they paid, their sales or excise taxes on the purchase of a new car, or net federal disaster losses.

Taxpayers will have to file the new Schedule L to claim the higher standard deduction.

You have a full-page schedule that you have to figure out for your standard deduction.  If you are not using a computer program like TurboTax or somethig similar you are coming to be lost.  Even tax practioners and tqax experts have no idea with so many changes.

Homeowners can increase their standard deduction by a maximum $1,000 for joint filers or $500 for individuals if they paid state or local real estate taxes. The home has to be used for personal use. Business or investment properties do not qualify.

Think of all the people who bought a new car, truck, motorcycle or motor home after Feb. 16, 2009.  They can add the sales or excise tax they paid to the standard deduction, provided that the vehicle cost less than $49,500. The deduction begins phasing out for individuals with incomes above $125,000 or joint filers earning more than $250,000. The deduction only applies to new vehicle purchases so if you bought a used car or leased a car, you are out of luck. Those who itemize deductions also may qualify for the motor vehicle sales tax deduction — provided they meet the income limitations.

The sales tax deduction is separate from Cash for Clunkers, which gave people rebates if they traded in cars for more fuel-efficient ones. The government estimated that nearly 700,000 people turned in gas guzzlers under the program in exchange for rebates of $3,500 or $4,500. If you did get a rebate, it is not taxable income.  If you bought a car under the Cash for Clunkers program you can also deduct the sales tax.

When you add to motor vehicle sales tax deduction, Cash for Clunkers, the credit for certain hybrid models you may find that 2009 was a great time to buy a new car.

Let us not forget the homebuyer tax credits that have helped raise sales of new and existing homes.

There actually are three versions of the homebuyer tax credits. If you were a first-time homebuyer in 2008, the credit actually was a long-term loan that has to be repaid over 15 years. For first-time home buyers in 2009, the credit was a true credit; it doesn't have to be repaid. And long-time homeowners who purchased a home on or after Nov. 6, 2009 are eligible for a smaller credit.

The credits expire April 30, 2010 but as long as you have a binding contract by that date you can still get the credit if you close by June 30, 2010.

Because of the  the IRS is putting in place new systems to verify claims to the homebuyers credit because of fraud potential. The IRS expects to begin processing tax returns claiming the credit in mid-February, after testing is completed. Some of these early taxpayers claiming the homebuyer credit may see tax refunds take an additional two to three weeks according to the IRS.

Congress also created the American opportunity education credit. The credit of up to $2,500 for college expenses is an expanded version of the Hope credit, available to students for the first four years of college instead of just the first two. Although the credit still phases out at higher incomes, those limits are higher than under Hope. Students must be enrolled at least half-time.

Hiring help
OK, not just any help. But if you need to pay for child care because you are donating time to a nonprofit organization or you are doing charitable work you can deduct that fee from your 1040 form. That's right — if you pay someone to babysit because you're working for someone for no pay, you can write it off. Admirable to be sure, but it seems like a long way to go around the bend to save a little on your tax bill.

Medically necessary massages
Since this deduction was originally written into the tax code in 1962, accountants and tax lawyers have made sure their clients are keeping all their doctor's notes. The rule states that anything that your doctor prescribes as "medically necessary" can be deducted from your taxes.

That means that if your doctor tells you to get therapeutic massages you can keep the receipts and knock that expense off as deductible. The same goes for aqua therapy (backyard pool installation and maintenance anyone?) and restrictive diets (make that call to Jenny Craig).

However be aware that the IRS combs through medical deductions very carefully so don't try to get creative or it could end up costing you much, much more.

Shipping Fido
So FedEx won't really overnight your family's pooch — but you can deduct the expenses associated with moving any of your personal effects due to a job-related relocation. And, as a personal effect, your favorite animal's transportation can be written off your personal taxes.

Attorney fees for illegal activity
It's true. While you are required to pay taxes on any income earned through illegal activity such as theft, bribery or drug-dealing, if you are unfortunate enough to get caught, the good news is you can write off the cost of hiring an attorney to defend you during your trial.

To ride the wind
Concerned about the environment? Not worried about what your neighbors think? Consider installing a wind energy system and you could get a tax write-off. Put up one of those attractive wind turbines that dot the plains and Uncle Sam will repay your environmental kindness with a nice little break on your tax return.

Houseboat ahoy!
Most of us know that you can deduct the interest you pay on your mortgage but we typically tend to envision a neat single-family home surrounded by a white picket fence. However if you got a loan to finance a houseboat that you call home (provided it has sleeping, cooking and "toilet facilities"), you can write that interest expense off as well. I wonder if the Captain, Gilligan and his crew split the write-off?

If you are a small business owner the list of potential tax breaks can sound just downright strange.

Anything that is can be demonstrated to be a legitimate "ordinary and necessary" business expense can be deducted.

So that means you might be able to deduct the following:

Jetting off to Jamaica
If you decide to reward your employees with a company retreat in Bob Marley's home country, or to plan your company's next strategy meeting in sunny Barbados the tax man will allow you to write it off. In fact any business meetings held in some of the most beautiful places in this hemisphere including Barbados, Costa Rica, Dominica, the Dominican Republic, Grenada, Guyana, Honduras, Jamaica, Saint Lucia and Trinidad and Tobago — not to mention Canada, Mexico and any U.S. state or territory — can be claimed as a legitimate, and deductible, expense.

Captain Ahab would approve
To help Native American Eskimos in his home state preserve their cultural heritage and custom of whale-hunting, former Senator Ted Stevens was able to insert a $10,000 deduction for qualified whale-hunting expenses in the American Jobs Creation Act of 2004.

So if you're a whaling captain recognized by the Alaska Eskimo Whaling Commission you can write off money that you shell out for whale-related work expenses like repairing your boat or buying food for your crew.

Shipping sheep
If you are a farmer and you need to pay for sheep — or any other qualified form of livestock including "fur-bearing animals" — to be shipped to your ranch, you can write if off on your taxes.

Remember this is my blog!  It is not tax advice but food for thought.  You need to consult your own tax practitioner to get the legal and proper advice that applies to you.

Death is seldom a topic we want to deal with.  Death and dying are subjects we seldom talk about because most of us do not want to think of telling our family members, friends, or those we work closely with goodbye.  If we ignore the legal, business, and financial sides of death or dying, we hope it will not happen until we are much older or more ready to deal with it. 

As baby boomers get older, so do their parents. Yet many adult children know little about their parents' assets. In fact, only 30 percent of adult children have an ongoing dialog with their parents about financial issues, according to a survey by the American Association of Retired Persons (AARP). We have all heard stories of families torn apart by bickering over assets. Here's a checklist to help avoid that nightmare.

Despite the lack of discussion, it's likely that at some point, your parents' affairs will become your responsibility.   Be prepared because your siblings' or even your adult children's affairs will become your responsibility.

Even if everyone in your family gets along, tensions and unforeseen misunderstandings can arise if you don't have the necessary information. In addition, lengthy legal processes await those without a well thought-out estate plan.

The following checklist provides the documents a family needs to know about:

In addition, there are three basic documents you should be able to easily locate:

Even with all the right documents, estate planning isn't a do-it-yourself project. Consult your financial adviser or lawyer to guarantee that your family's intentions become reality.

Being prepared and informed is not morbid or intrusive.  It is intelligent, thoughtful, and necessary. 

Flooding is the most common natural disaster in the country. It's a phenomenon that people have come to associate with states along the Gulf Coast, since year after year we see images of beachfront homes battered by storms. As bad as those images are, some of the most damaging floods that follow hurricanes occur hundreds of miles inland. And well north of the Gulf Coast region, residents of Massachusetts,

Each year, the U.S. suffers $2 billion in property damages from flooding.      If you live in a high-risk area, your home stands a 26 percent chance of flood damage over the course of a 30-year mortgage.      Roughly one quarter of all claims paid out by the National Flood Insurance Program (NFIP)are from homes located in low-to-moderate risk areas.       All 50 states are subject to floods and flash floods. Flash floods combine the destructive powers of water with frightening and unpredictable speed and often bring 10 to 20 foot walls of water rushing down on unsuspecting areas.       If you are unsure what your flood risk is, go to the NFIP Web site and use the calculator. It can help you determine your need for coverage based on the likelihood of natural disasters.       Keep in mind that even homes in low risk areas are vulnerable to flood damage from non-natural sources like faulty plumbing or new development projects where the ground isn't properly graded.       Click here for tips from FEMA to help secure your property. And you can find information about evacuating pets here.

One More Risk     Finally, in addition to the damage water can cause, don't forget that a flooded home can provide ideal conditions for the growth of dangerous mold spores. Damage from mold or mildew resulting from the after-effects of a flood is covered by flood insurance, but each case is evaluated on an individual basis.

New Hampshire and southern Maine were hit with record-breaking rainfall in 2006, resulting in the state's worst floods since the 1930s, closing schools and businesses and making homes inhabitable.

Still, not all water-related disasters can be blamed on nature. A flood doesn't always mean heavy rainfall and overflowing rivers rushing through the streets and into homes. New land development projects sometimes lead to flooding if the construction alters the natural runoff pattern, making it hard for the ground to absorb water. In other words, floods can happen almost anywhere, to anyone.

In spite of the common occurrence, a typical homeowner's policy does not include coverage for flood damage. That's why it's wise to get additional federally backed insurance coverage. In fact, if your mortgage is backed by the federal government, or if your home is located in a high-risk zone, you are probably required to have flood insurance.

Certainly, anyone whose home includes plumbing is vulnerable to water damage and should consider flood insurance. In fact, the Federal Emergency Management Agency (FEMA) warns that everyone can suffer losses from floods.

The need for flood insurance is even more real for homeowners who live in flood plains without failsafe controls, such as dams. Many people mistakenly believe they will be covered by federal aid in the event of a flood caused by nature. That's only true if the area is declared a federal disaster area by the President, which is a condition that occurs in less than 10 percent of all weather emergencies. The good news is, a presidential declaration is not required in order for a flood policy to pay off - making coverage invaluable.

Even if you do receive federal money to repair damage to your home, you should know these funds are generally a loan, not a grant, and have to be paid back with interest.

Here's an example of the difference insurance can make: A $50,000 FEMA loan at four percent for 30 years will result in a payment of around $240 per month, or $2,880 per year. On the other hand, a flood insurance policy that provides $100,000 in protection may cost you only $33 per month, or roughly $400 per year. The bottom line is, if you want to be sure you can recover financially after a flood, you need to provide your own protection.

Like any policy, you can purchase various levels of coverage. But a standard flood policy includes: structural damage; furnace, water heater, and air conditioner; flood debris clean up; and flooring, such as tile and carpeting. You can also step-up a policy to cover the contents of your home, such as furniture, jewelry, and clothing.

Where Can You Buy Coverage?

Not all homes qualify for coverage. For instance, flood insurance for beachfront or ocean-side property may not be available for the obvious reasons.

FEMA reports that more than 19,000 communities have agreed to tighter zoning and building measures to control floods. That means residents of these communities can buy coverage from the National Flood Insurance Program (NFIP), which currently protects the interests of 4.4 million flood policyholders nationwide.

More than 200 private-sector insurance companies write and service flood insurance policies, under the umbrella of the NFIP, which is backed by the federal government and overseen by FEMA. The funds to support these policies are not taxpayer dollars, but paid for by the premiums collected from flood insurance customers. Check the NFIP Web site to learn whether your community is a participant.

How Expensive is Flood Insurance?

Premiums for flood insurance vary widely, depending on individual risk. In determining price, flood insurance underwriters consider several factors including the property's elevation, proximity to bodies of water, and whether the dwelling has a basement. The average flood insurance policy premium costs around $500 per year, according to FEMA, with deductibles ranging from $500 to $5,000. For homes in a low-to-moderate risk area, an annual premium may be as low as $112.

Cities may participate in a Community Rating System in order to secure discounted flood insurance rates for residents. This involves a voluntary program that encourages floodplain management activities that reduce the likelihood of losses, increase awareness of flood insurance, and facilitate accurate rating of the area. Ask your agent if your community is a Community Rating System participant. Here is a list of other questions to ask:

Questions to Ask Your Flood Insurance Agent (Source: FloodSmart.gov)	Answer
Does my community participate in the National Flood Insurance Program?
Which flood zone do I live in?
Does my community participate in a Community Rating System?
If so, what is my community's CRS rating and do I qualify for a CRS rating discount?
What exactly will be covered in case of flood damage?
How much will it cost to purchase coverage for my building and contents and how do I determine which level to choose, appropriate to my risk?
How will my premium cost change if I choose a higher or lower deductible?
Are there any hidden expenses I should be aware of?

A TAXING TIME OF YEAR

It's that time again...time to start gathering all of that dreaded documentation to send to good old Uncle Sam! Recent stats say the IRS audited 1 out of every 97 returns last year, so it pays to be careful. And even though this may seem like a very painful process, taking just a few simple steps right now will make your tax filing far easier and more accurate.

Keep it together. Make a quick list of all the documents or statements that were needed to complete your return last year - or call your tax planning professional for a checklist. Use this as a checklist to make sure you have a good start on the documents you may need this year. As you receive tax documents in the mail, grab your checklist, and mark the item as received. Then, keep all of the tax documents together in a large file or envelope marked "2007 TAXES."

Do the math. According to the IRS, the most common mistake on tax returns is bad math—from transposed numbers to downright incorrect data. And with one form leading to the other, those errors can make a huge impact. So even if you use tax software, you're not off the hook--since they only add the info YOU put in. Double-check entries carefully.

Every last cent. The IRS receives copies of your Form 1099 earnings each tax season. So, they know how much you make in interest and dividend income, and they will use that info to double-check your filing information. Make sure you collect all your earnings statements and document them on your return.

Sign on the line. It sounds almost silly, but forgetting to sign a return is actually a fairly common oversight. And the IRS won't process a return that doesn't have a signature. So, make sure you sign to avoid resubmitting your paperwork and possibly paying late-filing fees.

Remember, there isn't a lot of room for error when you're dealing with the IRS. A slight miscalculation could mean the difference between getting a return and writing a check--or worse, paying a penalty. It pays to work with a tax professional. If you need a referral, contact me - I'm happy to help!

DID YOU KNOW...THAT THE FED AUDITS 1.03% OF PERSONAL RETURNS? AND IF YOUR INCOME IS IN THE RANGE OF $100K TO $1 MILLION - THAT PERCENTAGE GOES UP TO 1.77%?

Following Your Dream or Living a Vision

The fourth step is for you to make a list of everything you could possibly think of that you will have to do to achieve your goal. The more comprehensive your list, the more motivated you will become, the more intense will be your desire and the more you will believe it possible.

One of the things that hold people back is even if they get to the point of a written goal; they do not take the time to lay out a list of all the little things they will have to do to get there. And with additional experience, you will add new items to your list until it finally becomes complete.

The fifth step of goal setting is for you to take your list and organize it into a plan. A plan is really quite simple. It is a list organized by priority and importance. You decide what you will do first and what you will do later. You decide what is more important and what is less important. And most of all, you decide upon the one thing that is more important than anything else that you can do immediately to begin moving more rapidly towards your goal.

Step number six is for you to “take action!” This is the big killer for most people. They are procrastinators. They have great ideas combined with great hopes and dreams. They may even get to the point of writing down their goals. But when it comes to taking action, they always have a reason or excuse to procrastinate to put it off until a later time. However, as the Bible says, “Faith without deeds is dead.”

It is when you launch toward your goal that you begin to feel the desire and power that goes along with goal setting. And once you have launched toward your goal, it is much easier for you to continue moving in that direction.

Step number seven is for you to do something every day to move you toward your major goal. Never let a day go by without you engaging in some action that helps you move another step in the direction of what you really, really want in life.

Remember, you can’t hit a target that you can’t see. And if you don’t know where you are going, any road will get you there. The simple seven step act of deciding exactly what you want, writing it down, setting a deadline, making a list, organizing the list into a plan, taking action on the most important item on your list and then doing something every day towards your goal will change your life and your future in ways that you cannot even dream of today.

May I suggest you help your friends and family by recommending them to me and my website to your friends and family whether they are looking to buy, refinance, have debt, want to be financially responsible, or want to build a sound financial base?

www.klcsloanteam.com

Korene Clopine-Seaman, CMPS, CMA 
Senior Mortgage Advisor
Pacific Coast Mortgage, Inc
6991 E. Camelback Rd, Suite C-250
Scottsdale, AZ 85251
#BK 0905081
Direct Phone: 623-340-0934
Direct Fax: 623-218-1807
Email: korene@klcsloanteam.com
website: www.klcsloanteam.com

We hear stories every week of the year regarding business, the economy, natural disaster, finances, health, child care, religion, faith, politics, scandal, violence, and crime.  It can make you numb to the needs and hurts of others.

Some weeks ago we have heard of the major earthquakes in the South Pacific and the following tsunami waves, the loss of lives, families, homes, and businesses. We heard of the murders at Fort Hood in Texas and the family murders in Georgia and Florida.

Just after Thanksgiving we heard of another financial failure this time in Dubai and of more banks and businesses collapsing.  A number of national and international businesses, hugh financial institutions, and even a number of our own industries said "So  Long" in 2007, 2008, and 2009 then closed the doors.

A few weeks ago we heard the President's plan for the direction the war effort would be taken and the desired outcome of his hopes and plans.

We hear lots of news and stories of pain, suffering, grief, loss, and failure.  We hear too few stories or news related to joy, laughter, relief, or rejoicing. 

BUT do we realise that like fingers on your hands or pieces of a puzzle they all are related and have cause and effect to each other?

In my work as a mortgage banker and loan originator I meet new people almost every day.  I hear conversation threads that most people don't hear a lot of.  In more and more conversations I am hearing from people what they have done or are doing to help how they can. 

I spoke to one family whose children are in college.  They went through their garage and attic to find all the children's toys, athletic gear, and electronic toys they could find.  They have had "Repair and Building Parties" with neighbors and friends because they want to have gifts for children at Christmas, for donations to schools, churches, daycares, shelters, etc.

I found in my own home it was better for me and for others to stop storing and start sharing and caring.  It may be called alot of things but for me it was called "Doing What I Can" or "Pay Things Forward".

Another family went through their garage and attic and found furniture, lamps, wall decorations, clothing, bedding, dishes, and electronic items like games, recorders, televisions, etc to repaid, cleanup, mend, or make useful and made donations to the Salvation Army, Goodwill, and other similar useful helpful organizations.

The amount of donations received by various organizations is down the last couple of years thus they are unable to help so many people who are hurting and in such dire need.  In a nation where we have to park our cars outside because the garage is full of storage or when we have to pay $150 to $1000 per month to store our "out of season, out of size, out of use, don't you think it is time to "Doing What I Can" or "Pay Things Forward"?

I found I could help someone else while cleaning spaces and decreasing my household hazards, lower my potential for fire damage all while helping someone else. 

My Grandpa was a very practical man with a big heart, a lot of common sense, and the kind of man who lead his family by example.  He and my Grandma would donate used clothing, bedding, dishes, furniture, books, etc on a regular basis to help others and to pay it forward.

You will NEVER miss what you share with others and you will always reap a harvest of good will by sharing, caring, and "Paying It Forward".

Let's ALL make 2010 a better year by making this world a better place for all of us.

Korene Clopine-Seaman
Senior Mortgage Advisor
Pacific Coast Mortgage, Inc.
6991 East Camelback Road, Suite C250
Scottsdale, AZ  85251
AZ BK # 0905081
Direct Phone: 623-340-0934
Fax:  623-218-1807
korene@klcsloanteam.com
www.klcsloanteam.com
Listings Of Referral Partners: www.klcsreferralpartners.xpresslistings.com  

There's No Place Like Home for the Holidays is a phrase that stirs deep emotions. The very idea of spending the most precious time of the year in a warm safe place surrounded by friends and family is the very essence of the perfect Christmas.

People will travel half way around the world to be with the people who matter most to them.

That is what I wish for you and your family, and it tears at my heart that for one reason or another more than a few of us will not have a perfect Christmas. As we gather with our loved ones, let us keep those less fortunate in our thoughts and prayers.

With prolonged wars, the collapse of the faux economy, political and business corruption on too many fronts and too much scandal to keep track of, there’s plenty for us to be concerned about.

In looking for someone to blame, many people have been looked for scape goats while others are quick to believe that American families are responsible for their own problems, while in reality there is more than enough blame to go around.  To understand this better, see my blog at: http://www.klcsloanteam.com/blog  of August 7, 2009 "Who Should We Blame?"  and November 16, 2009  "When the Housing Bubble Burst Hits Home"

I mention how the blame has been deflected unto the middle class because so many of the comments to articles about loan modification and foreclosure I read are, shall we say, uncompassionate. Or, the guilty rantings of someone not yet touched by the looting of the economy. This isn’t just any Christmas; it is one following a year in which an extraordinary number of people had their hopes and dreams crushed.

And, it comes at a time when our communities’ resources to help the less fortunate are being slashed due to local and state budget shortfalls.

What can we do? Work on our gratitude and our charity.  It is amazing how much we have in storage that we do not need or use that IF we could donate it to a non-profit or charity or a family in need, we would help someone in need, pay it forward anonomously, and get rid of our stoarage problems.

Let’s remember our brave young men and women in the armed forces stationed around the world placing themselves in harms way in service to their homeland. May our gratitude and our prayers bring them safely home to raise their families in homes of their own. They are not immune to many of the statistics represent many families this year.

For the families of those who are away doing their duty, they will feel the absence of their loved ones like no other time of the year.Don't forget their families who must sacrifice so much for our benefit and comfort.

Remember to our emergency respondersm while able to spend part of the holidays with their families, will be at work just as though Christmas was any other Friday. Many other workers will be on duty including, but not limited to, lowly paid security guards who are the ground level eyes and ears of security, protection, and law enforcement; doctors, nurses and other hospital personnel; utilities and maintenance workers, and more. We should take a moment to respect and be grateful for what they do.

There are those who are altogether homeless. Some have chronic issues, but the majority are simply victims of the economy, an illness, or an accident. The average age of a homeless person is nine.

There was a time, not that long ago, when we helped each other. Neighbors may have been a significant distance away, and yet, we were closer as people than we are today. We have become conditioned, indifferent, and judgmental of each other in a way that is very un-Christmas.

A hundred years ago, America was feeling the hangover from the investment boom associated with the construction of a cross national railroad and the building of factories. The workers who came to the cities were no longer needed and the economy contracted.

William Sydney Porter was a short story writer of the era. Under the pen name “O. Henry”, he wrote a tale that demonstrates what the essence of real giving is.

The Gift of the Magi was written in 1906.

A young couple, Della and Jim, have been impacted by a downturn in the economy, (sound familiar?). With Christmas the next day, neither has money for a gift for the other.

Each, has a treasure that they prize above all else; Della, her knee length hair, and Jim, a pocket watch given to him by his father.

Jim returns home on Christmas Eve to a hairless Della holding a platinum chain for his watch. Surprise! Jim sold the watch to buy Della a set of tortoise shell combs for her now departed hair.

It isn’t what you get, it’s what you give. I’m not talking about fancy wrapped presents or money, I’m talking about really giving, starting with a grateful and charitable attitude. If you are home for the holidays, you have much for which to be grateful.

Who Should We Blame?

A very good friend of mine and I were engaged in a discussion regarding a news item we had both heard while we shared a meal and some time together this last week.

The topic of conversation was regarding alot of promises a person of prominence had made and appeared to be making everytime he spoke or was being quoted by members of the various news organizations and the press corps.  That conversation led to a another matter until we were talking about the economy, the housing market, unemployment, and people who were in a state of real dispair and pain.

Like so many other  conversations, this conversation came back to the subject of "Who should we blame for one of the worst financial collapses in world history?  Now, I talk to people who are doing "A-OK" and everyone else is just greedy, foolish, or worse according to some folks.

I remember writing a paper when I was in college on the "Great Depression".   At the time, we did not have the internet (Al Gore hadn't invented it yet), or personal computers (Bill Gates was still in high school), or fax machines (we did have tele-type machines but they were real expensive), oh but we did have cars, telephones, color television, and talking movies...So, one evening when I got a bit homesick for my Grandfather's voice, I called him and visited abit then asked him about his thoughts and recollections of the "Great Depression".  I do not remember a great deal of what he said but one thing he said remained with me.  What he said was this, "Mostly, it seems that everyone was buying and selling.  What they were buying and selling was just paper or an idea written on paper and then they went looking for someone who would pay more for the paper than they had paid for it."

I remember thinking that was really foolish and I would make sure I never did anything that foolish.  OH YEAH!  Most of us who bought and sold any of the following in  the late 1990 through the early 2005-2007 did just that.  Did you buy and sell real estate ( not that you would use but you hoped someone else would buy it from you at a higher price or would agree to pay your mortgage and give you a profit for nothing down and nothing into it), vehicles or toys (that depreciate as soon as the title is transferred to your name), stocks and bonds (that were backed not by real hard value but by someone else buying the paper from you), or something else that you did not want to impress someone you did not care about, for something you had not real or solid use for with money you did not have, and in the end could not afford unless someone else bailed you out or everything continued to get more of the same so you could pond it off on someone else?

I did! Most of us did.  In fact most all of us bought into the Madison Avenue lie that the Winner in the Game of Life is He or She Who Has the Most Toys in the End.  That statement is so false.  Our current economy and situation today is the price of our foolishness.  We spent, spent, and spent some more.  We are still spending.  It is totally rediculous to believe we can spend our way out of this economic mess.  Our children, grandchildren, and great grandchildren will not rise up and call us blessed or the Greatest Generation.  They are going to call us foolish.  We have learned nothing from history and we are not paying attention to those around us who are crying in despair.

Here in Phoenix, this week, we see such a tragic example of one family in such pain.  If you watched the news channels or read the newspaper, you probably saw the same story I did.  It reached into my inner soul and just tore the heart and soul right out of me.

The story was of a young family that consisted of a father, mother, and two young children who had all the trapping of success and the American Dream.  They had a home in one of the more upscale Scottsdale neighborhoods.  They were well liked, friendly, outgoing, and moving upward.  They had all the toys and the symbols of happiness and success.

The story was not in the toys or the symbols.  Their story was of murder and suicide because the house of cards was crumbling, then how alone and defeated someone felt.  This is the same or similar story we will hear all too often.  Maybe not to the depths and permanence of this story but I hear of families breaking up, friendships being thrown away, or people giving up because the things that used to be the measure of who and what they were/are really are worthless or worth little.

Family, friends, neighbors, casual acquintences are important.  One human life is worth more than all the bailouts and all the toys.  It costs us little in the long scheme of things to reach out a hand and lift someone up.

How does all of this matter to me and my family and our situation, you may ask?  We are like pieces of small bamboo.  By ourselves, we break easily.  When we knit and ban together we become strong and can stand against the tides as they beat against us.  Unless we as people and we as Americans start caring and helping and banding together, we will sink into the mire that so many other countries have done in the past.  Two hundred plus years is not a long time in the time clock of world history.  Our short life span is not much in the terms of the suffering of mankind.  BUT if each one of us, we spread a little kindness, reach out and positively help our fellowman, regardless of what we get back, we as individuals and collectively, we as a nation, will be better, stronger, and thrive together not just survive.

What is most important is not what you do for or to me or about me but what I know about, can say, and will build on the person we each see everyday in the mirror.  Have a Great Week!

May I suggest you help your friends and family by recommending them to me and my website to your friends and family whether they are looking to buy, refinance, have debt, want to be financially responsible, or want to build a sound financial base?                 www.klcsloanteam.com

My full contact information is shown in the signature area of this blog and on my website at www.klcsloanteam.com. My telephone number is (623) 340-0934.

I thank you and they will too!

Sincerely,

Korene L. Clopine-Seaman
CMPS, CMA, RRDS, LMB
Senior Mortgage Advisor
Pacific Coast Mortgage, Inc
6991 E. Camelback Rd, Suite C-250
Scottsdale, AZ 85251
#BK 090581
Direct Phone: 623-340-0934
Direct Fax: 623-218-1807
Email: korene@klcsloanteam.com
website: www.klcsloanteam.com

You will want to reference or include a "Bookmark This Site" or "Favorites" to my website www.klcsloanteam.com

We are approved to act as a mortgage bank and / or broker in the following states for HUD, FHA, VA, USDA, Reverse, and Conventional loans:

Arizona License #AZ BK 090581, California License #CA CFL 6039961, Colorado License #CO 20061159979 Florida #FL 528512 Hawaii, Missouri New Mexico License #NM 00329, Nevada License #NV 426 and we are currently expanding our licenses in other states.

A growing number of homeowners around the country are using a foreclosure defense that may help them retain their homes. It’s called “Produce the Note” and we want you to know this is not a mere technicality that should be treated lightly by the lender or by the Court.

Everyone needs to understand the importance of this issue. When a lender can’t produce the original note, allowing a foreclosure to proceed puts the homeowner at risk of owing that debt again to another party in the future. Therefore, great caution must be taken before a judge can allow someone who can’t produce the original note to cash in on your home.

What if Your Lender CAN’T Produce the Note?

So, what happens when the lender tells the Court it can’t produce the original note, because it is lost? Let’s start with the basics. If a lender wants to foreclose on a property, it has to be able to show that it is, in fact, the appropriate person to whom the money is owed. That right to foreclose belongs ONLY to the person who has legitimate POSSESSION OF THE ORIGINAL NOTE - not a copy, not an electronic entry, but the original note itself with the original signature of the person(s) who allegedly owes the money along with appropriate raised notary seal and signature. So, if you are faced with a foreclosure, you have every right to demand that the person or entity trying to take your property, first prove to the Court that they have the legal right do to so in the first place by proving they have legal possession of the original promissory note.

In my opinion, an original mortgage note is much like legal tender and should be guarded and protected as such by the person holding such an asset. Loosing an original mortgage note is like loosing a $100 bill or a gift card or a lottery ticket. What if I scratched that million dollar ticket and just stuck it somewhere and misplaced it? Do you think I could just show up at lottery headquarters and claim my prize without having the winning ticket? The same principle applies to the person or entity claiming to be the legal holder of an original mortgage note. He who holds the note holds the key.

What the Lender Must Do

What often happens, however, is that the lender claims it doesn’t have the original note, because that note has been lost or destroyed. If the lender is making such a claim, the law requires the lender to prove all of the following under the “Uniform Commercial Code”, which is a set of laws governing commercial transactions that many states have adopted. It contains a specific provision on this subject (Section 3-309) which states that a person can enforce a promissory note without having the original, BUT only under certain limited circumstances.

1. The person or entity has to swear and attest that it no longer has the original note;
2. The person or entity has to prove that it was properly in possession of the note and was entitled to enforce it WHEN it lost possession of the note;
3. The person or entity has to prove it didn’t “lose” possession simply because it transferred the note to someone else (i.e., it’s not really lost); and
4. The person or entity has to prove that it cannot produce the original note because the instrument was destroyed or its whereabouts cannot be determined or it was stolen by someone who had no right to it.

All of these matters have to be definitively proven by the person or entity trying to foreclose on the property. It is not the obligation of the borrower to prove or disprove any of this. The borrower can challenge the right of the person or entity trying to foreclose and demand proof.

The Court’s Important Role

It is up to the Court to determine whether the lender has satisfactorily proven why it no longer can produce the original note. The Court also has to be satisfied that when the original note was lost, the person trying to foreclose on the property had possession of the note at the time it was lost. Until the Court has been satisfied of all of this, the foreclosure cannot proceed.

It is also important for the Court itself to understand that this issue is not merely a “technicality” and the judge should not be satisfied with anything less than full proof of this issue. The Court itself needs to appreciate the fact that if it should agree that an original note has been legitimately lost (and allows the foreclosure to proceed) it is the borrower who is still at risk.

Why? Because incredibly, even if a Court has found that the original note is lost and the foreclosure sale is finalized, if someone later turns up with the original note and proves that it is the proper holder of the note, and not the person who foreclosed on the property, the original borrower is STILL LIABLE.

That’s right. Someone took your home and the Court allowed it because it believed that the lender proved that the note was lost and it was the proper party. Then someone legitimate shows up in the future with the actual note and you still owe that person the money even though your property was taken with the blessing of the Court. Trust me, this is a very serious issue regarding post foreclosures and post pre-foreclosure short-sales. It has happened to three of our own clients! These homeowners had the need to sell their property by means of a negotiated short-sale (so they could avoid a foreclosure) only to find out that the entity claiming to have the legal right and authority to enter into such negotiations and accept such settlements sold their note to another entity and weren’t even aware of it. Several months later, the newly assigned lenders (now claiming to be the rightful owners of our client’s original notes) have since come forward and have also filed suite seeking to recover their entire outstanding principle balances owed to them (prior to the homeowners closing their short-sale transactions with the wrong note holders).

How fair is that? It’s not! That is why homeowners need to start fighting back when someone is trying to take their home by foreclosure, especially since an overwhelming percentage of mortgages granted over the last 3 to 5 years have been packaged into securities and re-sold and re-assigned numerous times since the inception of the borrower's original note and mortgage. In some states, homeowners have better than a 50/50 chance of being successful in defending themselves against a completed foreclosure. Why wouldn’t anyone who owns a home do everything in their power to protect and defend it?

Korene Clopine-Seaman, CMPS, CMA
Senior Mortgage Banker
Pacific Coast Mortgage, Inc
6991 East Camelback Road Suite C-250
Scottsdale, AZ 85251
Direct Phone 623-340-0934
Fax 623-218-1807
korene@klcsloanteam.com
www.klcsloanteam.com

When you’re out shopping this holiday season, you may wonder if the price of the item you’re holding in your hand is really a good deal. Here are five ways to use your smartphone to find out if you can buy that item cheaper online or somewhere else.

1. If you have an iPhone, download and install the free ShopSavvy App from the App Store. When you are in a store looking at a product, open up the app, point the red line of the barcode scanner at the barcode of the item and wait for the app to beep to confirm that the code was recognized. Allow the app to use your location so you can see how much the item is selling for at nearby stores and online.

2. If you have a phone that runs the Android operating system, such as the Droid from Verizon, myTouch 3G or G1 from T-Mobile or the HTC Hero from Sprint, you can download the ShopSavvy app for free from the Android Market.

3. If you have a BlackBerry, you can download a free bar code scanning app called “edocrab.” Be aware that the app may be not available for all BlackBerrys. To download it, visit appworld.blackberry.com/webstore/content/3196 on your computer and click “Get it Today.”

4. If your phone can’t access the Internet or run apps, you can get prices for an item on Amazon by text message. To see how much something costs, send a text message to 262966 (AMAZON), with the name of the item you want to buy (i.e. ” Nikon D90?). You’ll get a text message back with the price of the item on Amazon as well as instructions for buying the item from your phone.

5. In addition to the barcode scanning apps, there’s also a free Amazon app for iPhone, Android phones and BlackBerrys, which makes it easier to search for items, order them and access your wish lists and other account information. You can get the app in the iPhone App Store and the Andorid Market, and BlackBerry users can download it by visiting amazon.com/bb on their BlackBerry web browser.

Most of all when you are out shopping, remember this, "Long after the presents are opened, the toys played with, the clothing worn, the trips taken, etc., it is not the money you spent but the thoughts and love that remain and are the MOST IMPORTANT when choosing that gift."

Wishing you and yours the very best of the Christmas season of peace, joy, love, and happiness.

Korene L. Clopine-Seaman
Senior Mortgage Advisor
Pacific Coast Mortgage, Inc
6991 East Camelback Rduite C-250
Scottsdale, AZ  85251
AZ BK# 090581

Lowering Your Electric Bill

With Christmas decorations, family gatherings, seasonal parties, and all the cooking, football games, etc, we all need to save some money.  For many people, the monthly cost of the electric bill represents one good place to cut down on expenses, especially in homes that use it for heating. Fortunately, you don't have to live in the dark or freeze to cut your monthly bill by as much as 20-30%. That can add up to hundreds saved over the course of a year, money that can be used for something else.

For electrically heated (or air-conditioned) homes, the savings is largest. An average electric wall heater consumes 1500 watts or 1.5 kilowatts (KW). In a home that is heated or cooled by electricity, space heating accounts for nearly half the total electricity consumed. The next largest percentage is water heating, about 14%.

Those two items alone represent low-hanging fruit to pluck if you're after savings on your electric bill.

Lowering the temperature on your home water heater, a safe and easy exercise for all modern models, makes it simple to reduce the amount of electricity you use. Most water heaters are set several degrees higher than necessary to keep scalding-temperature water in the tank at all times.

They're set that way to provide hot water as quickly as possible. But you can trade off a few extra seconds of waiting time at the sink, by lowering that temperature by 5-10 degrees Fahrenheit. That also makes your faucet water safer, since the maximum temperature water it will produce is below the level that will burn. That's especially important with children around who sometimes aren't as careful or experienced with the hot/cold water controls.

Lowering the amount of electricity used for space heating (or cooling) is equally easy, and you don't have to suffer by conserving here and there.

In most homes, there are several rooms that rarely get occupied during the day, alternating with others that don't get used at night. At night - with everyone in bedrooms - the home office, living room, kitchen, and (if you have one) laundry room are typically unoccupied.

Just lower the thermostat for these to around 50F in winter and you'll find that it takes less electricity to heat them up in the morning than it does to keep them heated all night. If you have a programmable thermostat, you can set it to go on automatically a half hour before waking and you will never know the difference.

Keeping the doors on bedrooms closed will help isolate the two parts of the house at the two different times. Keeping them closed (or nearly so) at night keeps the heat from the bedroom from leaking out, and vice versa during the day. Keep the laundry room and any spare bedrooms closed all the time except for the short periods they're in use.

The same ideas apply to cooling your home as to heating. If you use an air conditioner, close off ducts to rooms when they're not in use and keep doors mostly closed.

Naturally, ensuring that your home is well insulated is a must for long term savings. But replacing or improving it can be very expensive and the payoff (while real) accumulates over years. For short-term, high-return savings look to the things you can control around the home.

We all want the American Dream of owning our own home. The pursuit of that dream and idea that one could have it all with the unbridled demand of having everything right now lead in part to the current economic crisis in America.

What happens to your credit when the housing bubble burst hits your house?

There are five main changes that have occurred all too often when the housing bubble burst at someone's house.  What are they and how do they impact ones credit and the future is a question I get asked a lot.  They are:

(1) Loan Modification
(2) Short Sale
(3) Deed-in-Lieu of Foreclosure
(4) Foreclosure
(5) Bankruptcy

The least damaging is the Loan Modification.  There are seven things you need to know about Loan Modifications

At the heart of the loan modifications is the conviction that restructuring distressed mortgages will keep struggling borrowers in their homes and help insert a floor beneath plummeting property values. With $75 billion dedicated to reworking troubled loans, that's a big bet — especially considering that a top banking regulator said in December, 2008 that almost 53 percent of loans modified in the first quarter of 2008 went bad again within six months. But supporters argued that mortgage modifications need to be properly engineered to work—and many early ones were not. To that end, Congress, HUD, and the Obama administration unveiled the plan to restructure at-risk loans and help as many as four million home owners avoid foreclosure. Here are seven things you need to know about the loan modification programs.

1. Payments, not prices: The plan centers on the belief that struggling borrowers will stay in their homes—even as values decline sharply—as long as they can make their monthly payments. Although not everyone agrees with this, billionaire investor Warren Buffett endorsed the philosophy in his  letter to shareholders. "Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its mortgage (so-called “upside-down” loans)," Buffett wrote. "Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay."

2. Thirty-one percent: To that end, the plan requires participating loan servicers to reduce monthly payments to no more than 38 percent of the borrower's gross monthly income. The government would then chip in to bring payments down further, to no more than 31 percent of the borrower's monthly income. In lowering the payment, the servicer would first reduce the interest rate to as low as 2 percent. If that's not enough to hit the 31 percent threshold, they would then extend the terms of the loan to up to 40 years. If that's still not enough, the servicer would forebear loan principal at no interest. The plan does not, however, require servicers to reduce mortgage principal.  Richard Green, the director of the Lusk Center for Real Estate at USC said "For underwater loans, if you don't write down the balance to be less than the value of the house, people still have an incentive to default," Green says. "Writing down the principal first instead of last makes sense to me."

3. Cash incentives: To encourage participation, servicers will be paid $1,000 for each modification and will get an additional $1,000 payout each year for as many as three years, as long as the borrower continues making payments. Borrowers, meanwhile, can get up to $1,000 knocked off the principal of their loan each year for as many as five years if they make their payments on time. Neither party can receive the cash incentives until the modified loan payments have been made for at least three months.

4. Financial hardship: The current plan is an effort to help responsible homeowners ensnared in the historic housing slump and painful recession—not speculators. As such, only owner-occupied, primary residences with outstanding principal balances of up to $729,750 are eligible. Occupancy status will be verified through documents, such as the borrower's credit report. In addition, the program is designed to target homeowners who are undergoing "serious hardships"—such as a loss of income—which have put them at risk of default. To participate, borrowers will have to sign an affidavit of financial hardship and verify their income with documents. "If we would have had such stringent verification over the last four or five years, we probably wouldn't be in as bad a position as we are in," says Richard Moody, the chief economist at Mission Residential. But while Moody has no objection to such verification, obtaining documents from so many homeowners could be an onerous effort. "It's going to be a very time-consuming process," he says. Only loans originated on or before Jan. 1, 2009, are eligible, and modified payments will remain in place for five years. Now lenders are free to begin modifying loans.

5. Net present value: To determine if a particular mortgage will be modified, the servicer will perform a so-called net present value test. The test compares the expected cash flow that the loan would generate if it is modified with the expected cash flow it would generate if it isn't. If the modified loan is expected to produce more cash flow for the mortgage holder, the servicer is to restructure the loan. Howard Glaser, a U.S. Department of Housing and Urban Development official during the Clinton administration, called this component of the plan "clever," arguing that it would work to ensure broad participation. "When you apply the formula, the loans that are modified are the ones that are in the best economic interest of the investors to modify," Glaser says. "The federal subsidy for the payment on the modification…tips the scale toward modification as a better deal for the investor."

6. Second liens: The plan also addresses the issue of second liens—such as home equity loans or home equity lines of credit—by offering incentives to extinguish them. But key details on this component of the plan remained unclear. "Distinguishing the second lien is really important," Green says. "[But] exactly how they are going to convince the second lien holder to do this is not clear to me at all."

7. Will it work? Moody argues that while the plan may reduce foreclosures for primary residences, it could lead to a spike in defaults for another group of homeowners. Although Moody supports the administration's efforts to focus the initiative on primary residences, Moody notes that "it could be the case that a lot of [real estate speculators] have been just hanging on waiting to see exactly what the details are of this [plan]," Moody says. Now that it's clear the plan leaves speculators out, "we could actually see a spike in foreclosures or at least mortgage defaults among this group."

Glaser, meanwhile, worries that lenders have been overwhelmed by inquiries from homeowners looking to participate. "Millions of borrowers have been calling their lenders to see whether or not they are eligible," he said. "And the financial services industry does not have the capacity to handle these inquiries."

Depending on if you missed payments or how the lender or servicer reported it to the credit agencies, the loan modification may be a black mark on your credit for 2 to 4 years.

A Short Sale

 A short sale is a sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan. Short sales appear on your credit report as "pre-foreclosure in redemption", not as "debt discharged due to foreclosure" Less impact on your credit score
All mortgage debt is fully discharged

As Foreclosures Rise,
More Sellers and Lenders Consider Short-Selling

The headline news recently was that the number of mortgages entering the foreclosure process rose to a record level. Of the nearly 44 million mortgages, about 0.58 percent — that's 254,590 — or one out of every 172 loans, have been officially foreclosed.

Foreclosure occurs when borrowers have not made two or more payments and lenders respond by filing a legal notice and commencing a legal proceeding to take possession of the home.

The record number of foreclosures does not appear to be evenly spread around the country. According to the Mortgage Bankers Association, the rate of mortgages in foreclosure would have fallen if not for big jumps in foreclosures in local markets of California, Florida, Nevada and Arizona, where investors who bought on speculation that values would rise are walking away from property that is now worth less than they owe. Also, in regions of Ohio, Michigan and Indiana, areas marked by large job losses in manufacturing are seeing big increases in foreclosures.

A Foreclosure Alternative

The prospect of foreclosure is difficult for a homeowner, but there is another option.

A little-known alternative, once more commonly used in the real estate downturn of the early '90s, is the "short sale," which works like this: A homeowner falls behind on his or her mortgage payments, usually due to a job loss, rising debt payments, or both. Facing a situation in which the home value has fallen and cannot be sold for the amount of the mortgage owed, the homeowner works out a deal with the lender to sell the home for whatever the market will bear. If the amount of the sale is for less than the amount owed on the mortgage, the lender gets the proceeds and discharges the remaining debt. The homeowner will have to leave the house as soon as it is sold.

Alternatively, with a foreclosure, homeowners who can no longer make payments are served with a notice of foreclosure, which essentially informs them to either bring the loan current or face the home being taken over and sold at a public auction, after which the homeowner will face eviction proceedings. While this process is going on, the homeowner can live in the house rent-free for up to a year, depending on that state's foreclosure and eviction laws. But this fact alone does not mean the foreclosure is better; in fact, it may be worse.

Lose the House, but Not Your Credit

According to sources in the mortgage industry, people who agree to a short sale with the lender do far less damage to their credit rating than those who go through foreclosure.

While in both cases, short sale and foreclosure, the delinquent mortgage will negatively affect their credit rating, at least short sellers avoid having a "debt discharged due to foreclosure" on their credit reports. Mortgage and credit experts say that, after bankruptcy, having a foreclosure on your credit report is the worst result and will reduce your credit score by over 250 points. You could also have to wait up to three to seven years to qualify for a mortgage at a reasonable rate.

Short sales show up on a credit report as a "pre-foreclosure in redemption" status and can result in a credit score reduction of 100 points or less. After the sale, the mortgage may show up as "discharged." People who successfully complete a short sale may also qualify for a mortgage at a reasonable interest rate in as little as 18 months. So, if buying a home is a future goal, then a short sale is the better option for many.

Homeowners cannot simply decide that they want to unload a home with a short sale; the lender must agree to it. The key to getting a lender to go along is to demonstrate two things: that you have no other financial resources to pay the mortgage, and that the sale price the buyer is willing to pay is the fair price the market will bear. If a lender believes it can get more for the house by taking possession of it and selling it themselves, then they will not go along with a short sale.

To begin the process of a short sale, you first need to call the lender and speak directly with the person in the loan workout or short sale department. At GMAC ResCap, a large residential mortgage lender, there is a "foreclosure prevention department" with people trained to work with homeowners in exactly this situation. Their motivation is summed up by Steve Nelson at that company: "We pretty much know what our loss is going to be if we foreclose. If a short-seller results in a payoff that's better than that number, we're talking all day long with people who want to put a short sale together." Some lenders report a three- to four-times rise in the number of short sales over the past year.

People who want to go this route should contact a local real estate firm and ask to work with a real estate agent who has actual experience with short sales. These specially trained agents will know the process and deliver the documentation that the lender requires to authorize the short sale. The agent can also find a buyer that is qualified to complete the transaction.  I have worked with a number of such real estate agents in our service area and would be please to recommend one  or two or three to you for your consideration if needed

If all goes as planned, the lender will receive all of the proceeds, typically not enough to pay off the loan. The remaining balance of the loan is discharged. But a homeowner agreeing to a short sale should also get legal advice to protect his or herself from future claims of the lender. In some states, only purchase mortgages are fully discharged. For all other types of debt (equity loans, refinancing, etc), the homeowner can be held personally liable for repayment in the future. For this reason, a lawyer's advice will include getting the lender to agree to fully discharge all mortgage debt involved in the short sale.

Buying a Short Sale Home

Buyers who can find a short-sale can get a good deal. The advantages of buying a property through a short sale include buying at a discounted price and buying a house where the sellers are still motivated to sell the home and may take care of it until it is sold.

Some buyers think they can get a better deal by waiting to buy a house when it goes into foreclosure, but buying a house through foreclosure is risky business and not for first-time buyers or inexperienced real estate investors. You should get advice from an experienced professional. Hire a lawyer to help you with the eviction process if the home is occupied. Sometimes, tenants who are sued for eviction can retaliate. When sellers realize they will lose their home to foreclosure, they often stop caring for it. Many states require buyers to make certain disclosures to the owners, and failure to do so on the proper forms and in the required timeframes can result in fines, lawsuits, and even cancelation of the sale and loss of your money.

It's typically advised to work with a realtor with experience in short sales, because they can help you research the market to find the properties where foreclosure notices have been filed as well as how much is owed by the lender. Typically, this can be done at the county registrar of deeds. They can also approach these homeowners for you to let them know that they are aware that the foreclosure notice has been filed and that, if the owner is interested, there is a buyer who could work with them to complete a short sale.

Even if you find a home where the owner is willing to work out a short sale, don't assume the lender will go along with it. Once the seller agrees to your offer, your agent will need to send it to the lender for approval, and you will not have a deal until the lender OKs it.

Expect a lender to negotiate a higher price; they will want to know they are getting paid the most they can get for the house. Since the lender is paying the realtor's commission, it will likely ask your agent to lower his commission, or you to pay some of it. Typically, the lender will not bear the cost of items that are typically paid for by sellers, such as inspections, and the lender will agree only to sell the property if the buyer agrees to buy it in "as is" condition. This makes it all the more important for a buyer of a property through a short sale to make an offer contingent upon approving a through home inspection.

Foreclosure

Foreclosure is the legal and professional proceeding in which a mortgagee, or other lien holder, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lien holders can also foreclose the owner's right of redemption for other debts, such as for overdue taxes, unpaid contractors' bills or overdue homeowners' association dues or assessments.

The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that "the lender has foreclosed its mortgage or lien". If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgement.

Types of Foreclosure

The mortgage holder can usually initiate foreclosure at a time specified in the mortgage documents, typically some period of time after a default condition occurs. Within the United States and many other countries, several types of foreclosure exist. Two of them – namely, by judicial sale and by power of sale – are widely used, but other modes of foreclosure are also possible in a few states.

Foreclosure by judicial sale, more commonly known as Judicial Foreclosure, is available in every state and required in many, involves the sale of the mortgaged property under the supervision of a court, with the proceeds going first to satisfy the mortgage; then other lien holders; and, finally, the mortgagor/borrower if any proceeds are left. As with all other legal actions, all parties must be notified of the foreclosure, but notification requirements vary significantly from state to state. A judicial decision is announced after pleadings at a (usually short) hearing in a state or local court. In some fairly rare instances, foreclosures are filed in Federal courts.

Foreclosure by power of sale, which is also allowed by many states if a power of sale clause is included in the mortgage or if a Deed of trust was used instead of a mortgage. In some states so-called mortgages are actually deeds of trust. This process involves the sale of the property by the mortgage holder without court supervision. It is generally more expedient than foreclosure by judicial sale. As in judicial sale, the mortgage holder and other lien holders are respectively first and second claimants to the proceeds from the sale.

Other types of foreclosure are considered minor because of their limited availability. Under strict foreclosure, which is available in a few states including Connecticut, New Hampshire and Vermont, suit is brought by the mortgagee and if successful, a court orders the defaulted mortgagor to pay the mortgage within a specified period of time. Should the mortgagor fail to do so, the mortgage holder gains the title to the property with no obligation to sell it. This type of foreclosure is generally available only when the value of the property is less than the debt ("under water"). Historically, strict foreclosure was the original method of foreclosure.

Acceleration

The concept of acceleration is used to determine the amount owed under foreclosure. Acceleration allows the mortgage holder to declare the entire debt of a defaulted mortgagor due and payable, when a term in the mortgage has been broken. If a mortgage is taken, for instance, on a $100,000 property and monthly payments are required, the mortgage holder can demand the mortgagor make good on the entire $100,000 if the mortgagor fails to make one or more of those payments. The mortgage holder will also include any unpaid property taxes and delinquent payments in this amount, so if the borrower does not have significant equity they will owe more than the original amount of the mortgage.

Lenders may also accelerate a loan if there is a transfer clause, obligating the mortgagor to notify the lender of any transfer, whether; a lease-option, lease-hold of 3 years or more, land contracts, agreement for deed, transfer of title or interest in the property.

The vast majority (but not all) of mortgages today have acceleration clauses. The holder of a mortgage without this clause has only two options: either to wait until all of the payments come due or convince a court to compel a sale of some parts of the property in lieu of the past due payments. Alternatively, the court may order the property sold subject to the mortgage, with the proceeds from the sale going to the payments owed the mortgage holder.

Process

The process of foreclosure can be rapid or lengthy and varies from state to state. Other options such as refinancing, a short sale, alternate financing, temporary arrangements with the lender, or even bankruptcy may present homeowners with ways to avoid foreclosure. Websites which can connect individual borrowers and homeowners to lenders are increasingly offered as mechanisms to bypass traditional lenders while meeting payment obligations for mortgage providers.

In the United States, there are two types of foreclosure in most common law states. Using a "deed in lieu of foreclosure," or "strict foreclosure", the noteholder claims the title and possession of the property back in full satisfaction of a debt, usually on contract. In the proceeding simply known as foreclosure (or, perhaps, distinguished as "judicial foreclosure"), the property is subject to auction by the county sheriff or some other officer of the court. Many states require this sort of proceeding in some or all cases of foreclosure to protect any equity the debtor may have in the property, in case the value of the debt being foreclosed on is substantially less than the market value of the immovable property (this also discourages strategic foreclosure). In this foreclosure, the sheriff then issues a deed to the winning bidder at auction. Banks and other institutional lenders may bid in the amount of the owed debt at the sale but there are a number of other factors that may influence the bid, and if no other buyers step forward the lender receives title to the immovable property in return.

Other states have adopted non-judicial foreclosure procedures in which the mortgagee, or more commonly the mortgagee's servicer's attorney or designated agent, gives the debtor a notice of default and the mortgagee's intent to sell the immovable property in a form prescribed by state statute. This type of foreclosure is commonly referred to as "statutory" or "non-judicial" foreclosure, as opposed to "judicial". With this "power-of-sale" type of foreclosure, if the debtor fails to cure the default, or use other lawful means (such as filing for bankruptcy, which temporarily stays the foreclosure) to stop the sale, the mortgagee or its representative conduct a public auction in a similar manner to the sheriff's auction. The highest bidder at the auction becomes the owner of the immovable property, free and clear of interest of the former owner, but possibly encumbered by liens superior to the foreclosed mortgage (e.g., a senior mortgage or unpaid property taxes). Further legal action, such as an eviction may be necessary to obtain possession of the premises.

Defenses - The Constitutional Issue of Due Process has affected the ability of lenders to foreclose property. In Ohio, the Federal District Court has dismissed numerous foreclosure actions by lenders because of the inability of the alleged lender to prove that they are the real party in interest. In Colorado, on June 19, 2008, a District Court Judge dismissed a foreclosure action because of failure of the alleged lender to prove they were the real party in interest.

"Strict foreclosure" is an equitable right available in some states. The strict foreclosure period arises after the foreclosure sale has taken place and is available to the foreclosure sale purchaser. The foreclosure sale purchaser must petition a court for a decree that cuts off any junior lien holder's rights to redeem the senior debt. If the junior lien holder fails to do so within the judicially established time frame, his lien is canceled and the purchaser's title is cleared. This effect is the same as the strict foreclosure that occurred at common law in England's courts of equity as a response to the development of the equity of redemption.

In most jurisdictions it is customary for the foreclosing lender to obtain a title search of the immovable property and to notify all other persons who may have liens on the property, whether by judgment, by contract, or by statute or other law, so that they may appear and assert their interest in the foreclosure litigation. In all US jurisdictions a lender who conducts a foreclosure sale of immovable property which is the subject of a federal tax lien must give 25 days' notice of the sale to the Internal Revenue Service: failure to give notice to the IRS results in the lien remaining attached to the immovable property after the sale. Therefore, it is imperative the lender search local Federal Tax Liens so if parties involved in the foreclosure have a federal tax lien filed against them, the proper notice to the IRS is given. A detailed explanation by the IRS of the Federal Tax Lien process can be found.^[4]

The US congress passed, and President Bush signed into law, a temporary change to the tax code. For the period Jan. 1, 2007, through Dec. 31, 2009, homeowners do not have to pay tax on canceled debt.^{[citation needed]}

Contesting a foreclosure

Because the right of redemption is an equitable right, foreclosure is an action in equity. To keep the right of redemption, the debtor can ask an equity court for an injunction. If repossession is imminent the debtor must seek a temporary restraining order. However, the debtor may have to post a bond in the amount of the debt. This protects the creditor if the attempt to stop foreclosure is simply an attempt to escape the debt.

A debtor may also challenge the validity of the debt in a claim against the bank to stop the foreclosure and sue for damages. In a foreclosure proceeding, the lender bears the burden of proving that there was a valid debt. There is case law to support the debtor's case: First National Bank of Montgomery vs. Jerome Daly, 1969, in the Justice Court State of Minnesota the Judge ruled in favor of the debtor on December 9, 1968: IT IS HEREBY ORDERED, ADJUDGED AND DECREED: 1.That the Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach, Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office. 2.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void. 3.That the Sheriff’s sale of the above described premises held on June 26, 1967 is null and void, of no effect.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.

Foreclosure auction

When the entity (in the US, typically a county sheriff or designee) auctions a foreclosed property the noteholder may set the starting price as the remaining balance on the mortgage loan. However, there are a number of issues that affect how pricing for properties is considered, including bankruptcy rulings. In a weak market the foreclosing party may set the starting price at a lower amount if it believes the real estate securing the loan is worth less than the remaining principal of the loan.

In the case where the remaining mortgage balance is higher than the actual home value the foreclosing party is unlikely to attract auction bids at this price level. A house that went through a foreclosure auction and failed to attract any acceptable bids may remain the property of the owner of the mortgage. That inventory is called REO (real estate owned). In these situations the owner/servicer tries to sell it through standard real estate channels.

Further borrower's obligations

The mortgagor may be required to pay for Private Mortgage Insurance, or PMI, for as long as the principal of his primary mortgage is above 80% of the value of his property. In most situations, insurance requirements are sufficient to guarantee that the lender gets some pre-defined percentage of the loan value back, either from foreclosure auction proceeds or from PMI or a combination thereof.

Nevertheless, in an illiquid real estate market or following a significant drop in real estate prices, it may happen that the property being foreclosed is sold for less than the remaining balance on the primary mortgage loan, and there may be no insurance to cover the loss. In this case, the court overseeing the foreclosure process may enter a deficiency judgment against the mortgagor. Deficiency judgments can be used to place a lien on the borrower's other property that obligates the mortgagor to repay the difference. It gives lender a legal right to collect the remainder of debt out of mortgagor's other assets (if any).

There are exceptions to this rule, however. If the mortgage is a non-recourse debt (which is often the case with owner-occupied residential mortgages in the U.S.), lender may not go after borrower's assets to recoup his losses. Lender's ability to pursue deficiency judgment may be restricted by state laws. In California and some other states, original mortgages (the ones taken out at the time of purchase) are typically non-recourse loans; however, refinanced loans and home equity lines of credit aren't.

If the lender chooses not to pursue deficiency judgment—or can't because the mortgage is non-recourse—and writes off the loss, the borrower may have to pay income taxes on the unrepaid amount if it can be considered "forgiven debt." However, recent changes in tax laws may change the way these amounts are reported.^{[citation needed]}

Any liens resulting from other loans taken out against the property being foreclosed (second mortgages, HELOCs) are "wiped out" by foreclosure, but the borrower is still obligated to pay those loans off if they are not paid out of the foreclosure auction's proceeds.

Renegotiation alternative

In the wake of the United States housing bubble and the subsequent subprime mortgage crisis there has been increased interest in renegotiation or modification of the mortgage loans rather than foreclosure, and some commentators have speculated that the crisis was exacerbated by the "unwillingness of lenders to renegotiate mortgages". Several policies, including the U.S. Treasury sponsored HopeNow initiative and the 2009 "Making Home Affordable" plan have offered incentives to renegotiate mortgages. Renegotiations can include lowering the principal due or temporarily reducing the interest rate. A 2009 study by Federal Reserve economists found that even using a broad definition of renegotiation, only 3% of "seriously delinquent borrowers" received a modification. The leading theory attributes the lack of renegotiation to securitization and a large number of claimants with security interest in the mortgage. There is some support behind this theory, but an analysis of the data found that renegotiation rates were similar among unsecuritized and securitized mortgages. The authors of the analysis argue that banks don't typically renegotiate because they expect to make more money with a foreclosure, as renegotiation imposes "self-cure" and "redefault" risks.

Bankruptcy

Myth: I'll just file bankruptcy and start over; it seems so easy.
Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.

Bankruptcy -- That word sends chills up the spine. If you are facing the prospect of bankruptcy or in the middle of it right now, you know it's a living nightmare. It can devastate your job, destroy your marriage and steal your peace of mind.

Why Avoid Bankruptcy?

Bankruptcy is not something I recommend any more than I would recommend jumping off a bridge without a parachute. Are there times when good people see no way out and file bankruptcy? Yes, but I will still talk you out of bankruptcy if given the opportunity. Very few people who have been through bankruptcy would report that it is a painless wiping-clean of the slate, after which you merrily trot off into your future to start fresh.

Don't let anyone fool you. I seen those that have been through bankruptcy and have worked with bankruptcy for decades, and it is not a place you want to visit. Bankruptcy is listed in the top five life-altering negative events that we can go through, along with divorce, severe illness, disability, and loss of a loved one. I would never say that bankruptcy is as bad as losing a loved one, but it is life-altering and leaves deep wounds both to the psyche and the credit report.

Types of Bankruptcy

Chapter 7 Bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 Bankruptcy, more like a payment plan, stays on your credit report for seven years. Bankruptcy, however, is for life. Loan applications and many job applications ask if you have ever filed for bankruptcy. Ever. If you lie to get a loan because your bankruptcy is very old, technically you have committed criminal fraud.

Most bankruptcy cases can be avoided with proper help, such as certified counselors. Your counselors may make suggestions that involve extensive amputation of stuff, which will be painful, but bankruptcy is much more painful. If you take the thoughtful step backward to get on solid ground instead of looking at the false allure of the quick fix that bankruptcy seems to offer, you will win more quickly and easily. I know many who have experienced the pain of bankruptcy, foreclosure, and lawsuits. Most will tell you, "Been there, done that, got the t-shirt, and it is not worth it."

Haven't Filed Bankruptcy Yet?

The number of bankruptcies in the US is rising at a dangerous speed. This is a serious problem! How can you know if you're on the road toward bankruptcy? Here are 7 warning signs:

1. Not using a budget
2. No control over spending
3. No emergency fund
4. Having a house you can’t afford
5. Owning a car you can’t afford
6. Using credit cards
7. Having student loans

Bankruptcy can creep up on you no matter how great things may be going for you right now. If you see the warning signs in your life, it is time to make some serious changes. It is time to take control of your money instead of it controlling you! But it starts with you making the decision! Check out the beginning steps to steer yourself clear of bankruptcy:

• Build up a beginner emergency fund of $1,000. Sock this money away as quickly as possible. Emergencies will happen so be prepared.
• Start living on a monthly budget. Make sure you cover the basics first - housing, utilities, food and transportation. Then use what is left over to aggressively pay down debt.
• Attack your debt! Evaluate what you can sell to cut your debt. Consider taking on a part-time job to accelerate your climb out of debt. Sell so much stuff that the kids think they're next!
• Add to the emergency fund. Once you are out of "crisis mode" (all debt but the house paid off) focus on getting 3-6 months of expenses in your emergency fund. When it's fully funded, you can start making your money work for you!
• Use a program like Money Merge to help you accelerate your debt reductions and monitor your purchasing and budget directions.

What is Bankruptcy?

Bankruptcy is a process established by a set of federal laws that is designed to give debtors a “fresh start” by canceling many of their debts through an order of the court.

Bankruptcy also allows creditors who are owed money a chance to get their designated share of any money the debtors can afford to, or are obligated to, pay back.

When a bankruptcy is filed, creditors have to stop any attempt to collect a debt, at least temporarily. There is usually immediate relief from creditor pressure, and a bankruptcy can stop a pending foreclosure sale of your home, a garnishment of your wages, or a threatened repossession. Most creditors cannot call, write or sue you after you have filed bankruptcy.

Long Term Effects of Bankruptcy

Life Change

Bankruptcy is listed in the top five life-altering negative events that we can go through, along with divorce, severe illness, disability, and loss of a loved one. Very few people that have gone through bankruptcy would say that it is just a painless cleaning of your debts, where afterwards you can easily begin your new life.

Credit

A chapter 7 bankruptcy, which is a total bankruptcy, will stay on your credit report for 10 years.

A chapter 13 bankruptcy, which is similar to a payment plan, can stay on your credit report for 10 years, but some consumer credit reporting agencies remove the chapter 13 after seven years. If you are applying for a job with a salary of more than $75,000 a year, you can be asked if you have ever filed bankruptcy.

There is no time limitation to this; anytime you apply for a job for the rest of your life you can be asked this question. Also, when you apply for credit or life insurance that is worth more than $150,000, you can be asked if you have ever filed for bankruptcy. There is also no time limitation to this question. If you lie to get a loan or insurance because your bankruptcy is very old, technically you have committed criminal fraud.

As you can see there are many things to consider.  The first and most important is to consult the experts.  I do not do loan modifications, I do not do short sales, I do not work with foreclosure issues, nor do I do work as an attorney with bankruptcies but I can recommend some very knowledgeable and experienced EXPERTS to you who do one or all of these areas of expertise.  Whatever you are facing, do not travel any of these paths on your own.  The least credit hit will be a minimum of at least two years on your credit and can be as long as a life time.

May I suggest you help your friends and family by recommending them to me and my website to your friends and family whether they are looking to buy, refinance, have debt, want to be financially responsible, or want to build a sound financial base?                 www.klcsloanteam.com

My full contact information is shown in the signature area of this blog and on my website at www.klcsloanteam.com. My telephone number is (623) 340-0934.

I thank you and they will too!

Sincerely,

Korene L. Clopine-Seaman
CMPS, CMA, RRDS, LMB
Senior Mortgage Advisor
Pacific Coast Mortgage, Inc
6991 E. Camelback Rd, Suite C-250
Scottsdale, AZ 85251
#BK 090581
Direct Phone: 623-340-0934
Direct Fax: 623-218-1807
Email: korene@klcsloanteam.com
website: www.klcsloanteam.com

You will want to reference or include a "Bookmark This Site" or "Favorites" to my website www.klcsloanteam.com

We are approved to act as a mortgage bank and / or broker in the following states for HUD, FHA, VA, USDA, Reverse, and Conventional loans:

Arizona License #AZ BK 090581, California License #CA CFL 6039961, Colorado License #CO 20061159979 Florida #FL 528512 Hawaii, Missouri New Mexico License #NM 00329, Nevada License #NV 426 and we are currently expanding our licenses in other states.

Fixed-Rate or Adjustable-Rate Home Loan

Home loans are as different as the people they’re written for. Home buyers may choose between the most common forms of home loans – fixed-rate or adjustable-rate loans. If you’re unsure of what these terms mean, these tips may help you decide which is right for you.

Fixed-Rate Loans

Fixed-rate loans are written with an interest rate that does not change over time. It doesn’t matter if your loan is brand new or if you’re about to pay it off. The interest rate will not change.

Initially, you’re paying very little principal with each monthly payment. Most of the payment will go toward interest. Over time the amount you pay toward principal and interest will change as you pay down the interest at the front of the loan.

However, choosing a fixed-rate loan does not mean you’re limited to paying “just” your regular payment. You may choose to pay an additional amount, noted as going toward principal, with each payment or send a second separate payment during the month that would be applied entirely toward the principal.

This type of mortgage is great for people who don’t like to take risks with their finances, or who like to plan ahead. You will know exactly what your payment is each month and can budget for it accordingly.

Adjustable-Rate Loans

The adjustable-rate mortgage (ARM) loan, however, is exactly what it says it is. The interest rate you pay for your mortgage will change periodically based on the financial index. Ultimately, this means your payments may increase or decrease dramatically based on what the market is doing.

Of course, you still have the option to make additional partial or full payments with this type of loan. If you specify that any extra payment goes directly to principal, you could still pay off your home earlier. Unfortunately, if the interest rates change and that part of your payment increases, any extra you’ve paid toward principal may not matter.

This type of mortgage is good for home buyers who are prepared to take some risk in order to receive a lower interest rate. During the initial part of the loan, you will have lower monthly payments that can allow you to use your money elsewhere.

Some lenders will write a mortgage with an initial fixed-rate and then switch to an adjustable-rate. The length of the fixed-rate period may be as short as 6 months or could last as long as 10 years. If you know you’re not going to stay in your home longer than 5 years, this might be an option to consider.

If you do choose to go with an ARM, you may want to set aside money in a savings account so you’ll be prepared rather than shocked when your payments increase. Of course, the reverse is also true; if your payments are reduced, you would probably want to continue paying the same payment stipulating that the extra go toward principal. You may also choose to place any leftovers from the payment into an account for future changes.

Buying a home is an exciting and frustrating task but one that people embark upon every day. Your home loan is going to be different that your friend’s and family’s, but that doesn’t mean you have to go into the process without knowledge. Use these tips about fixed-rate and adjustable-rate loans to your advantage to get the best mortgage for you.

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Request your personalized FREE mortgage analysis or pre-qualification Today by calling me at 623-340-0934 or by emailing me at korene@klcsloanteam.com

Korene Clopine-Seaman
CMPS, CMA, RRDS, LMB
Senior Mortgage Banker
Pacific Coast Mortgage, Inc
6991 East Camelback Road Suite C-250
Scottsdale, AZ 85251
Phone 623-340-0934
Fax 623-218-1807
Free 24 Hour Consumer Tip Hot line 800-466-2531
korene@klcsloanteam.com
www.klcsloanteam.com
www.NARLO.com/30326

We are approved to act as a mortgage bank, broker and / or lend in the following states for Conventional, HUD, FHA, VA, USDA, Reverse,  and Commercial lending. 

Arizona License # AZ BK 0905081, California License # CA CFL 603 9961, Colorado License # CO 20061159979, Florida License # FL 528512,  Hawaii, Missouri, New Mexico License # NM 00329 , Nevada
License # NV 426 and are expanding our lending to other states. 

In the last fews weeks we have all read and heard a lot of "...The Greatest" and I wonder what yardstick the speaker or author was measuring against, who sets the standard, and who determines who gets to be measured.  So I decided to look at a number of "GREATEST..." and see what it is that they have in common.  This is what I found.

12 Characteristics of the
Greatest of the GREATEST

Whether you are taking on a new role or looking to improve your professional success in your career, industry, or profession sometimes it takes a little help or direction to help you move in the right direction. I offer you the following character traits to help you learn from others who have had what it takes to be successful in YOUR pursuit of GREATNESS:

1. The Greatest Now What They Truly Want. At some point in their lives, the greatest have a “LIGHT BULB GLOW IN THE DARK!” moment when their vision becomes clear. Suddenly they realize what they really, truly want to achieve. They find their passion! When that happens they are ready to strive for greatness. They are ready to pay the price.

2. The Greatest Want IT More. We all want to be great. Only the greatest of the great are willing to do what it takes to be GREAT. The greatest do not just think about their desire for greatness; they act on it. They have a high capacity for work. They pay the price that that others will not do, and they spend more time doing it to achieve the goals that others only dream about. When everyone else is playing, resting, or sleeping, the greatest are practicing, thinking, planning, improving, and striving to reach their goals.

3. The Greatest Are Constantly And Forever Striving To Get Better. They are always looking for ways to learn, apply, improve, and grow. They stay humble but hungry. They are lifelong learners. They never think they have “arrived” because they know that once they think that, they will start sliding back to the place from which they came.

4. The Greatest Do Ordinary Things Better Than Everyone Else. For all their greatness, the greatest are not that much better than the others. They are simply a little better at a lot of things. Everyone thinks that success is complicated, but it is really simple. In fact, the greatest do not do anything different. The greatest just do the ordinary things the best.

5. The Greatest Stay Concentrated On The Focal Point. Success is all about the fundamentals, and the fundamentals are little and ordinary and often boring. It’s not just about practice, but focused practice. It’s not just about taking action, but taking zoom-focused action. It is about practicing and perfecting the fundamentals time and time and time again and then time again until ALL aspects are perfected and the best they can achieve...

6. The Greatest Are Mentally Stronger. Today’s world is no longer a sprint or a marathon. It’s a series of sprints combined with a boxing match. You are not just running; you are getting hit along the way. The greatest are able to respond to and overcome all of this with mental and emotional toughness. They are able to tune out the distractions and stay calm by being focused and energized when and where it counts. We all get knocked down and stubble or fall at time. The greatest look at their purpose and plan, pick them self up, learn from the fall or failure, and pursue with even more determination and courage their goals and not linger over the past except to learn and grow from these times.

7. The Greatest Overcome Their Fear. The greatest of the greatest have fear, but they overcome it. Everyone has fears. To beat your enemy, you must know your enemy. Average people shy away from their fears. They either ignore them or hide from them. However, the greatest seek them out and face them with the purpose of conquering them.

8. The Greatest Seize The Moment. When the greatest are in the middle of their performance, they are not thinking “What if I win?” or “What if I lose?” They are not thinking “What if I make a mistake or miss the shot?” They are not interested in what the moment produces but are concerned only with what they produce in the moment. When all eyes are watching, they rise to the occasion. As a result, the greatest define the moment rather than letting the moment define them.

9. The Greatest Are Secure Enough In Who and What They Are To Share What They Have Learned Without Being Threatened BY Someone Else's Success. Their success is defined not by clawing to get over others but reaching to lift others up to the level they have already achieved while constantly striving to achieve more, to become more, and to learn more themselves.

10. The Greatest Leave A Legacy. The greatest live and work with a bigger purpose. They leave a legacy by making their lives about more than themselves. This larger purpose is what inspires them to be the greatest and strive for greatness over the long term. It helps them move from success to significance.

11. The Greatest Make Everyone Around Them Better. They do this through their own pursuit of excellence and in the excellence they inspire in others. One person in pursuit of excellence raises the standards of everyone around them. They do this in their work, life, and relationships with others…The point is to strive to be your greatest and inspire others to be their greatest, because it is in the striving where you find greatness, not in the outcome.

12. The Greatest Tap into a Power Greater Than Themselves. The greatest are conductors, not resistors. They do not generate their own power, but act as conduits for the greatest power source in the world. It is not always politically correct, but you cannot talk about greatness without talking about God. It would be like talking about breathing without mentioning the importance of air or oxygen.  It can not be done!

Korene Clopine-Seaman
CMPS, CMA, RRDS, LMB
Senior Mortgage Banker
Pacific Coast Mortgage, Inc
6991 East Camelback Road, Suite C-250
Scottsdale, AZ 85251
BK# 0905081
Cell Phone 623-340-0934
Direct Fax 623-218-1807
Free 24 Hour Consumer Tip Hot line 800-466-2531
Office Message Phone: 480-481-2800 Please leave a message for Korene
korene@klcsloanteam.com
www.klcsloanteam.com
www.NARLO.com/30326

Are You Taking Advantage of
Existing Homeowners Tax Credits?

I was talking to a client of mine the other day.  Naturally, our topic of conversation got to the economy and of course the problems of homeowners.  One topic lead to another until we were discussing the Tax Credit for First Time Home Buyers.   You know you can not leave an opening like that for me...I will jump right through it most every time.

I have had a page on my website since early this year that talks about and lists a number of the tax credits that are available for existing homeowners. Even though energy prices have come down some, we should continue to think about going green and energy conservation. The IRS is giving enticements to homeowners to make energy efficient  improvements in their homes.

For a complete list of Energy related credits such as new heat pumps and Hybrid cars etc, Click on  Energy Related Tax Credits, in the ENERGY CONSERVATION section in the Library below.

In last year's stimulus package, taxpayers are providing incentives to each other for a 10% tax credit of the cost of new windows, doors, roofing, insulation, furnaces, air-conditioning systems and heat pumps. The old rules had a lifetime maximum of $500 total credit.

The remodeling industry rightly said the meager 10% credit was not enough reason to undertake major renovations. As you may know a tax credit lowers your total tax due dollar for dollar. If you owe the IRS $500  and have a $200 credit, that $500 gets lowered to $300. A tax deduction, however means you can reduce the amount of taxable income that you owe taxes on. The real benefit is seen after your apply your tax bracket. Anytime you figure it out, a Credit is better than a Deduction.

In order to both increase economic activity (remodeling) and expand energy efficiency, the tax credit for homeowners is now at 30% of the cost. It also tripled the lifetime maximum to $1,500. It is retroactive from Jan 1, 2009 and expires at the end of 2010.
 
For specific information on new Windows and Doors CLICK HERE

 The new provisions also apply to newly added systems such as solar-energy panels, water heaters and geothermal heat pumps.

A lot of what is included in the above actions are considered "energy Star" approved. You can get a better picture of what is and is not covered at http://www.energystar.gov/index.cfm?c=products.pr_tax_credits

Korene Clopine-Seaman, CMPS, CMA, RRDS, LMB
Senior Mortgage Banker
Pacific Coast Mortgage, Inc
6991 East Camelback Road, Suite C-250
Scottsdale, AZ 85251
BK# 0905081
Direct Phone 623-340-0934
Direct Fax 623-218-1807
Free 24 Hour Consumer Tip Hot line 800-466-2531
Office Message Phone: 480-481-2800 Please leave a message for Korene
korene@klcsloanteam.com
www.klcsloanteam.com
www.NARLO.com/30326

Just say ‘I know my rights
... and stick up for them...
Step 1 in protecting yourself 

The questions are all too familiar, and all too intimate:

"Can I see your driver's license?"

"Can I have your phone number?"

"Do you have another form of ID?"

But how do you answer? It seems that to shop is to be interviewed. Everywhere you go, you are asked invasive questions. And every time you look at the news, you see another company is losing consumers' data.

So you would probably rather not answer those kinds of questions, but can you say “no”?

Yes, say legal experts. In fact, sometimes of those questions are against the law or violate credit card association terms and conditions.

Of course, if you refuse to provide the requested information, a company can refuse to do business with you. Sticking up for yourself is almost certain to lead to a small scene at the store, something I call "data bickering." And since it seems like everyone asks questions like these all the time, it's not practical advice to “just say no.” But it helps if you can say, “I know my rights.”

First in an occasional series, "What do you do if ... ?"

Well-placed complaints can be surprisingly effective. But hitting a store where it counts -- at the cash register -- is more effective than complaining through government agencies. Here are some tips:

1. TELL THEM THEY ARE BREAKING CREDIT CARD RULES
Recently, I shopped at a small furniture store that requires a driver's license for credit card purchases. The clerk even enters the number into a computer. When I balked at this, she cited company policy.

It turns out, the store’s policy violated Visa policy. On page 28 of Visa's merchant agreement (available here as a .pdf file), the association informs merchants that they are not permitted to require additional identification for credit card purchases.

Complaining is simple. Call your credit card issuer (your bank) and tell them. They will in turn pass the complaint along to the acquiring bank (the store's bank). That might sound like a meaningless paper trail exercise, but it isn’t. Violation of Visa terms can actually get a merchant knocked off the credit card network, which is nearly the death penalty in today's retail world. Visa officials wouldn't discuss this, because the company is in a quiet period prior to its upcoming initial public offering of stock. But from prior interviews about another common violation of Visa rules – requiring a minimum purchase amount for using a credit card -- I know it doesn't take many complaints for Visa to get on a retailer's back.

Of course, few store owners know about the alternative identification rule, and clerks probably won’t believe you when you tell them. But even if you can't talk a clerk out of a demand to see and copy your license, your complaint can still call in heavy hitters after the fact. So you might get some satisfaction from saying simply, "Asking me for this information is in violation of your merchant agreement. Keep doing it and you might not be able to accept credit cards."

There are some exceptions to this rule you should know about. The key one -- if you hand a clerk a credit card that's not signed, the clerk is obliged to ask for an alternate ID.

2. ASK IF THEY TAKE OUT THE TRASH
The problem is much broader than phone number or license number requests by retail clerks. Unfortunately, there aren’t many rules governing other data bickering situations.

Betsy Broder, assistant director of the privacy and identity theft division at the Federal Trade Commission, says consumers who refuse to give up personal information don't really have any special legal protections. There is no overriding privacy law that limits the information businesses can collect.

There are a couple of narrow laws that give consumers limited protection. The Gramm-Leach-Bliley Act governs certain kinds of financial information, and essentially makes it illegal for banks to share your account information with other entities. The Health Insurance Portability and Accountability Act (HIPAA) offers similar protections about sharing of health information. But that doesn't stop medical offices from asking for your Social Security number within earshot of other patients, or from using it cavalierly as an identifier on basic forms.

When a nurse asks for your SSN, it's hard to say “no.” Here’s how one federal worker I spoke with addressed that situation recently: she refused to give her SSN to a nurse, who subsequently insisted the staffer couldn't get treatment without placing a number on the form. Eventually, the staffer took that request literally and filled in a random 9-digit number and informed the nurse that she had used dummy data on the form. She got her treatment. (She also refused to let me use her name, for obvious reasons).

Without taking such extreme measures -- note, the staffer doesn't endorse supplying fake SSNs -- there are FTC directives that you can invoke. Any entity that collects information like Social Security numbers (including you, if you hire a nanny or some such) must properly dispose of that information. Failure to do so could result in an FTC lawsuit. In other words, if a store writes your driver's license number on a piece of paper and leaves it on a counter, it could be in violation of the FTC data disposal rule. Broder said the agency has yet to file a case of that nature, but you might get the attention of a clerk simply by asking, "Is your company in compliance with the FTC data disposal rule?"

As a follow-up, you might ask how long the company plans to keep the information on file. For fun, tell the clerk that TJ Maxx ended up losing driver's license numbers it had collected five years earlier, and it recently ended up paying nearly $100 million to settle lawsuits surrounding the incident. That was an expensive mistake.

3. TELL THEM THEY ARE BREAKING THE LAW
As a last resort, you might also announce to the clerk that he or she may very well be breaking state law by asking for personal information in credit card transactions.

Chris Hoofnagle, a privacy law expert at the University of California, Berkeley, points out that California law expressly prohibits companies from requiring additional information when accepting credit cards. Stores can't make note of your phone number or address. They can't even hint to consumers that such information is required. Here's the relevant section of law:

Companies cannot "require as a condition to accepting the credit card as payment ... the cardholder to write any personal identification information upon the credit card transaction form or otherwise," the law says. And companies cannot "utilize, in any credit card transaction, a credit card form which contains preprinted spaces specifically designated for filling in any personal identification information."

Note: A retail company can ask to see a photo ID card, but it cannot write down or store this information.

The California law has teeth. Consumers can sue companies that require additional information with credit card transactions and win big money. Civil penalties of $250 for the first violation and $1,000 for subsequent violations are awarded to consumers when companies break this law.

So here's a pretty effective thing to tell a clerk who's about to violate your privacy:

"If you write down that number, you might as well reach into your cash register and give me $250, because it's going to cost you."

If you don’t live in California, I live in Arizona,  check with your state’s consumer protection statutes before invoking this language. If you don’t know where to begin, call your state attorney general’s consumer protection office.

Unfortunately, there are few other laws to protect consumer privacy. Ditto on rules to discourage over-collection of information, or to provide "expiration dates" on data that is collected and stored far beyond its usefulness to the company.

"That's why companies are not really thinking about what they are gathering, or how long they are keeping it," said Rob Douglas, a privacy expert who operates IDAlert.info. "And we've become such sheep giving it away. It's a rarity that consumers object to data collection.”

It doesn't have to be that way. When asked for data, just say “NO” – at least initially. If you're told you will have to leave the store or medical office, then you'll have to make a choice, and often you will decide to surrender the information. But before you do, put up a bit of a fight. The more you complain, the more uncomfortable you make a clerk or a company, the more you'll make the folks at headquarters reconsider their need to know everything about you.

More importantly, you will take a bit step in keeping your identity Safe and Secure..

WITH GAS PRICES edging ever higher, it's little surprise that many would-be vacationers plan to postpone their road trips this summer and even this fall and winter.

"This is basically a price issue," says Mike Pina, a spokesman for AAA, which predicts that fewer drivers will take to the road throughout the summer months. "Consumers are stuck with high fuel prices, higher airfares — which are due to higher fuel prices — and a softening economy."

For those who still plan on braving the highways, the usual tactics — shopping around for cheaper gas¹ or using a gas rewards² credit card — will prove much less effective than in years past. Instead, the only way drivers will see any substantial fuel savings is to stay on top of their car's maintenance and start driving more conscientiously.

"You can't control prices at the pump, but you do have some control over how much fuel you use," says Rozanne Weissman, a spokeswoman for the Alliance to Save Energy. The nonprofit recently launched the Drive Smarter Challenge³, a web site that helps consumers figure out how much they can save annually, just by changing their driving habits. "When you add these seemingly small things together, it adds up to hundreds of dollars in savings."

A potential $733 from now until Labor Day, in fact, if you try everything on my list:

(Note: Unless otherwise stated, my calculations for each example assume the car stays true to its advertised average mileage per gallon, will be driven 4,500 miles over the 16-week summer period — mileage amount is calculated based on Edmunds.com estimate that the average person drives roughly 15,000 miles per year — and that the price of gas is $3.80 a gallon. Estimates of fuel economy and savings come from research by the Federal Trade Commission, FuelEconomy.gov, the Alliance to Save Energy and Edmunds.com.)

Prime Your Vehicle
Thanks to normal wear and tear, cars become less fuel-efficient over time. And while it's impossible to alter your car in a way that would increase its fuel economy beyond the manufacturer's estimated mileage per gallon — the Environmental Protection Agency has tested and dismissed hundreds of products that claim to do just that — you can get your car back in top-notch shape and maximize its fuel efficiency. Here's what you can do and how much you can save:

Check your tires: $29
Under- or overinflated tires change the way a car handles, both adding drag and accelerating wear, says Weissman. That, in turn, reduces fuel efficiency by 3.3%, according to the Alliance to Save Energy. Look at your driver's side door panel or owner's manual to find out the proper inflation for your tires and make sure to check the pressure at least once a month. Over the course of 4,500 miles of summer driving, a 2008 Acura RL owner could save $29.

Forgo premium fuel: $86
Unless you drive a Dodge Viper or other high-end sports car that lists premium fuel as a requirement in its owner's manual, you should use regular unleaded gas, says Phil Reed, consumer advice editor for Edmunds.com⁴. "[Premium fuel] boosts engine performance, but not fuel economy," he says. "The savings in price would be far greater." Someone in California, for example, filling his 2008 Saab 9-3 weekly with $3.98-a-gallon unleaded (87 octane) instead of $4.31 premium (91 octane) would save $86 over the course of the summer.

Get a tune-up: $129
"Maintaining your vehicle is one of the most important things you can do to aid fuel efficiency," says Shruti Vaidyanathan, principle vehicle analyst for the American Council for an Energy Efficient Economy. A faulty engine can reduce fuel economy by 4%, for example, while a clogged air filter knocks off about 10%, according to FuelEconomy.gov, a Department of Energy-sponsored site. Fixing up a 2004 Dodge Grand Caravan before driving 4,500 miles over the summer saves $129.

Change Your Behavior
Driving responsibly is the key to reaping some of the fastest and most substantial gas savings, says Reed. But only if you practice these driving behaviors consistently. Here's how:

Slow down: $95
If you speed, you might as well be paying $4 a gallon (or more) for gas. Every five miles per hour you drive above the speed limit adds 20 cents per gallon to your fuel bill, according to the Alliance to Save Energy. A 2008 Mazda CX-7 owner who consistently drives 10 miles above the speed limit over 4,500 miles of summer driving, for example, will pay an extra $95. Don't trust yourself to stay within the limit? Use cruise control.

Combine errands: $107
Cars use much more energy for cold starts (i.e; when the car hasn't been driven in a couple of hours and the engine is cool), says Vaidyanathan. In fact, making several cold-start trips, say, to the store, the dry cleaners and the babysitter, will consume twice as much fuel than if you combine errands and make them all in one run, according to FuelEconomy.gov. An owner of a 2008 Ford (F⁵) Focus, who combines 10 errands (each requiring 10 miles of driving) into two weekly trips could save $107 over the course of the summer.

Let go of your aggression: $95
Rapid acceleration and hard braking reduce fuel economy by about 10%, according to the Alliance to Save Energy. Pushing your car to the limit constantly burns more fuel than maintaining a steady speed. It also adds to wear and tear. A 2008 Jeep Liberty owner who drives 4,500 miles at steady speeds without riding the brakes could save $95 over the course of the summer.

Pack light: $17
Hauling a cargo carrier, kayaks or other gear on top of your car decreases fuel economy by about 5%, according to FuelEconomy.gov. "They affect your car's aerodynamic performance and adds drag," explains Jim Kliesch, senior engineer for the Union of Concerned Scientists, an environment-focused nonprofit. Overpacking the trunk doesn't help, either. Every 100 pounds of added weight reduces fuel economy by about 2%, reports the Federal Trade Commission. By packing two 50-pound suitcases instead of four, and foregoing the rooftop cargo carrier, the owner of a 2008 Chevrolet Impala could save $17 over the course of a 1,300-mile road trip.

Swap vehicles: $25
If you have more than one vehicle, drive the more fuel-efficient one, advises Kliesch. "Don't discount even a small difference in miles per gallon," he says. It adds up over time. A family splitting 4,500 summer driving miles 80-20 between a 2008 Honda (HMC⁶) Accord and 2008 Honda CRV instead of 50-50 could save $25 in gas.

Look for gas incentives: $150
To help lure in visitors, hotels and tourism boards are offering incentives⁷ to help offset travel costs such as discounted room rates or gas station gift cards. Hotel chain Best Western is offering $25 with any two-night stay through Dec. 14. Yet more offers stem from individual chain properties, or bed and breakfasts. Spend your week's vacation at the High Haven House Bed & Breakfast Inn⁸ in Martha's Vineyard, Mass., and get a gas card for $75 to $150, depending on where you're from. Someone driving a 2008 Toyota Prius from Atlantic City, N.J., could get there and back on about $64 in gas, reaping an $86 profit on the gift card offer.

Have a Safe and Enjoyable driving experience!

I want to send you a reminder that IF you are a FIRST TIME HOME BUYER -  if you have not owned a home for 3 years and mobile or manufactures homes without land do not count - you have less than 100 days to complete the process of purchasing a home to qualify for the $8000 Tax Credit stimulus incentive.  Call me today at 623-340-0934.  Let me help you get into a home and money to help you decorate it.

I recently wrote an article about buying a foreclosed home or potential foreclosure property,. In that article I discussed the various ways in which you could obtain ownership of a foreclosure. Here is a quick summary of the three scenarios:

• A pre-foreclosure where you buy directly from the home owner before the bank takes over. (this usually is known as a short sale)
• At an auction where you may be in competition with other buyers.
• From a Real Estate Asset Management company or the bank itself. This is known as an REO aka Real Estate owned.

Here is what you need to know about scenario #3 ~ buying a bank owned home. The opportunity to buy a bank owned home is one that many buyers often consider due to the fact that there is a prevailing belief that you can buy them for 50 cents on the dollar or less. While as a general rule many bank owned properties do represent a good Real Estate value, you are more likely to be able to purchase one for around 5-20% less than the going rate for a similar comparable property.

Buying a foreclosed home however, is not for the timid at heart and there are many things that buyers need to be aware of going into a REO transaction. One of the first things you should investigate when you become interested in an REO property is the present market value. This is something a skilled local buyer's agent can do find to help you. A realtor that knows the local inventory and recent sales data should be hired to help you with the transaction. I strongly recommend you engage a buyer’s agent. While a banks goal is to get rid of their REO inventory as fast as they can, do not expect the bank to consider silly low ball offers especially when the home is first listed for sale. In many cases the price has already been set aggressively to begin with. Like every other seller the banks goal is to maximize the price they receive for a property. I have never seen a bank accept anything less than 10% under the asking price but your buyer’s agent will be able to tell you how aggressive you can get with your offer.

What most people fail to understand is that banks have to demonstrate to shareholders, investors and auditors that they attempted to get the highest price possible. It is not uncommon for a bank to reduce the price of a home in their inventory after it has been on the market for a while. A bank after all is not in the business of holding or maintaining real estate. Do not make the poor assumption that banks are desperate sellers and will do anything to clear out their properties. This is rarely the case!

In order for a bank to consider accepting your offer you are going to want to make sure you have been pre-approved by a lender. Most banks will not even consider an offer without proper financial documentation. If you are making a cash offer with no financing contingency be prepared to show the bank proof that you have the funds in an account somewhere. Most banks will require this as well. Some banks may also ask you to get pre-approved through them as well although it cannot be a requirement to do so due to RESPA laws. RESPA stands for Real Estate Settlement Procedures Act as is designed to protect consumers.

Often times with a bank owned property patience is a virtue. In many cases the bank will take days to respond to your offer. Also remember that on weekends banks do not conduct business so you are losing a few days in the week. The process can be even longer if you find yourself competing with multiple offers on the property

When you buy a bank owned property be prepared to be buying it "AS IS". Most banks will not make repairs to a property unless it would effect the buyers ability to finance the property. Some of the things that more than likely a bank would be willing to remedy could include:

• Structural issues
• Toxic Mold issues
• Termite or other insect problems
• Plumbing or heating system issues
• Electrical issues especially if it involves a safety hazard
• Septic systems ~ some states require a passing inspection in order to close

While these are things many banks would consider remedying, don't assume that it would happen in all circumstances. Every bank is different in how they operate and make decisions. Do not expect a bank to make minor, updating, or repairs - it is not going to happen! You may be able to possibly get a credit for some repairs at closing but do not expect it.

Most banks have their own contracts that they use. You will be expected to sign their standard form and in most cases you will not be able to make any changes to it! I have seen attorneys and realtors try and more often than not they are rebuffed and their client’s offer is rejected. With a bank owned home you will just sign the banks form and that will be considered the Purchase and sale.

In most circumstances you will be given the opportunity to conduct inspections even though the property is being sold "as is". It is important that your buyer’s agent makes sure that you have proper contingencies in place that cover your ability to inspect the property for such things as the structure, pests, mold, radon , water, and others. You will want the right to terminate the contract if these do not meet local or national standards. Be aware that the bank is going to want these inspections to be done immediately.

Lastly, banks will prefer that the closing will be sooner rather than later. You will not see the same flexibility that you could possibly get with some traditional home sellers. As a rule of thumb, most banks will want the closing to take place in 4 weeks or less.

One really important clause that you find in many bank owned contracts is the penalty if you do not close according to the stated contract date. In most cases there is a $100 or more dollars a day penalty for not closing on time! You better make sure your ducks are in order when buying one of these properties.

One little known issue that most consumers would not think of but that has hit close to home with me is the lack of great representation of the part of realtors working with bank owned homes. Honestly, I have seen some of the worst real estate agent representation where the listing agents entire book of business is REO property. The issue starts with the fact that banks have not divvied up the business well. There are far too many realtors that have a stranglehold of all of a particular bank’s REO business. There has been some talk about banks breaking up the monopoly that some realtors have on the bank owned inventory but so far that has not happened.

The most important thing to remember is that while many bank owned properties can offer exceptional values there is quite a bit to know. It is very important to and in your interest of having professionals in your corner who can guide you and protect your interests is. I always recommend to my clients that they use a good buyer’s agent, especially when buying a bank owned home.

Once again, a reminder that IF you are a FIRST TIME HOME BUYER -  if you have not owned a home for 3 years and mobile or manufactures homes without land do not count - you have less than 100 days to complete the process of purchasing a home to qualify for the $8000 Tax Credit stimulus incentive.  Call me today at 623-340-0934.  Let me help you get into a home and money to help you decorate it.

10 Ways To Save Big Money On Your Taxes
Your Accountant May Not Have Told You!

Have You Ever Felt More Aggravated
With Our Government and Tax System ?

You cannot pick up a paper or watch TV, without seeing another story about budget deficits, cuts in spending, and the worst news of all:

More Increases To Your Taxes!

Yet, the answer government always seem to come up with to the economic mess we are in, is to take more of our hard earned dollars and add more government programs and TAXES.

We all know this is still the greatest place on the planet to live and work. As messed up as we are, there is no other country that can compare with the opportunities we have. And that's why it feels so bad when we see our incentives to earn, save and invest being taken away

I remember things I learned as a kid. They were in my history book, it was called civics back then. They were from a time in our past. When the public took a stand. When the public (you and I)  had had enough. When the public realized that the powers that be were interested in a different agenda. One of endless, unfair taxation. From which the famous slogan our founding fathers formed their rallying cry:

NO Taxation Without Representation!

Think about it. This was the rallying cry that our nation was formed on! Yet…we have somehow let ourselves fall back into a situation where we once again have tax monsters that are thrust upon us without our agreement or consent! It is truly taxation without representation.

For example, let's look at the list of taxes we all have to pay:

1. Federal, state, and local income taxes.
2. Sales taxes.
3. Real estate property taxes.
4. Personal property taxes.
5. Entertainment or Use taxes.
6. Gasoline taxes.
7. Ad valorem taxes.
8. Estate taxes.
9. Import duty taxes.
10. Sin taxes. (Cigarettes, booze, etc.)
11. Travel taxes. (Hotel, airline, etc.)
12. Excise taxes.
13. Highway taxes.
14. Utility Usage and Replacement taxes.
15. Government Program taxes (Medicare, Social Security Taxes, just to name a couple)
And on and on and on.

Not only does the list of taxes keep getting bigger, the rates keep getting bigger as well.

Any time a governmental body finds themselves in a fix due to mismanagement, their answer is always the same:

Raise Taxes!

We need the tax revenue to keep things going. Everybody has to pay their fair share! After all, the taxpayer won't notice.

Right. Give me a break. Let's talk about paying your "fair share."

Is it fair that huge corporations get special mention in tax laws to reduce their burden or to get bailouts because they are TOO Big  to fail?  When they go broke, we bail them out, and now the government (we, the Public) own them but the bureaucrats mismanage them, Again or Still or More!

Is it fair that giant developers get tax breaks to build their buildings?

Is it fair that by creating new jobs, employers get to pay more payroll taxes?

Is it fair that lower income earners pay a much higher percentage of their income in "flat" taxes?

Is it fair that the top 10% of earners pay over 50% of all income taxes?

Is any of this fair? No, it sure isn't!

But, then, my dad always told me that life wasn't fair.

That I would have to learn how to become "street smart" and find the best way to live my life. On my own.

The world doesn't care about your own personal situation. You won't get any medals for being successful. And you won't get yelled at for failing.

All you will get is whatever you make your life. On your own.

And what we are really talking about here is one of the most powerful notions of our lives.

A word that is so important, yet one that often seems to elude us.

What am I talking about?

Control!

Or, in other words, the power to determine your own destiny. Control. An emotion that we all want. That we all need. You see, the lack of control makes us feel like we cannot guide our lives the way we want to. Not being in control is scary. It is disturbing. It can be very disappointing.

There are so many areas of our life where we do not have much, if any, control.  Which can cause us to feel a loss of peace of mind.  For isn't being in control, really the foundation of happiness and peace?

When you know you can steer your life in the direction you want, don't you enjoy each day a little more? Don't you sleep better at night? Don't you love your family just a little more?

Sure you do. That is why we all strive to work so hard. To gain more control.
And yes, having more money does provide more control.

As the old saying goes, "Money cannot buy happiness, but it can sure rent it for a while!"   And paying less in taxes, puts more money in our pockets, which puts more control in our lives!

Yet, when you look at the long list of taxes we all have to pay, I want you to notice an interesting fact:

Of all the taxes we are stuck with, only a couple of types are really controllable!

Most of the items on the list are either built into the prices of things we pay, or applied as a percentage of the value of something.

If you want to buy some beer, you will pay the sin and sales taxes, without any option to get around them.   

If you want to go on a trip, you will pay the airline and hotel taxes, with zero say in the matter.

And so on.

There are a couple of interesting exceptions to this "pay without choice" rule. As a matter of fact, these exceptions are so big, that the fact they even exist is truly amazing.

What am I talking about? How about some of the biggest taxes you have to pay both during and after your life?

Yes, Federal income and estate taxes!

Let's look at a little bit of background here before I get to the specific methods of reducing these taxes.

As you probably know, these taxes have been around for a long time. And the way we are taxed on them keeps changing like the weather.

You see, originally, they were established to increase revenue to the US Treasury across the board. But, then, they were manipulated to encourage (or discourage) certain behaviors. For example, builders want us to buy houses, and eventually the Congress put a tax break in the code for deducting the interest we pay on a mortgage.

And so on. Congress uses the taxation of our income and estates as a "carrot and stick" to direct our financial lives. In the seventies, during the recession, they added a tax credit for hiring new employees. They increased the tax savings for businesses who buy new equipment. Etc., etc.

So, since they use these taxes to push us one way or another, a very interesting result has been created:

Income And Estate Taxes Can Be Significantly Raised Or Lowered By The Way You Arrange Your Financial Affairs!

Think about that. It is incredible. You can literally decide how much in estate and income taxes you pay, based on decisions you make with your money! And, you can do this 100% legally! (Make sure you understand that all we’re suggesting is following the tax laws as they are written! We NEVER suggest or advocate that you do anything that is not’t 100% legal!)

There isn't any other area of taxation that allows you such flexibility. Or that can cause you so much grief, if you set yourself up wrong.

And, yes, you can set yourself up the right way, much easier than you think.

But, first, let's define the "right way."

Well, my definition of "the right way" is paying the least amount of taxes of anybody you know in the same income bracket!

Yes, that's right, two families can have the exact same income, and one can pay way less in taxes. A lot less. Let me give you an example:

*******

Al and Kathy earn the same amount of income as their inlaws, Dan and Mary. They both have houses in the same price range, in the same neighborhood, and have the same number of kids.

They work for the same company, and have the same company benefits available to them.

As a matter of fact, they are the same in almost all respects, except for one.

Al and Kathy pay several thousand dollars less than Dan and Mary in income taxes! That extra money has been used for years to build up enough money to pay for their children's education. And to buy all kinds of investments. And to go on nice vacations. And so on.

Dan and Mary have no idea how they will pay for college. Or retire. Or reach any of their goals.

How can this be? Well, it is because Al and Kathy have taken advantage of the tax laws and Dan and Mary have never bothered! They thought they were too busy. Or that the IRS would hang them. Or that the loopholes weren't for them. Or a thousand other excuses.

But you know what? Excuses don't put money in your pocket.

Careful planning of your finances to reduce the taxes can put money right where it belongs... in your possession!

*******

So, what kinds of things did Al and Kathy do? How about:

(NOTE- THESE STRATEGIES DO WORK. HOWEVER, YOU MUST NOT RUN OUT AND DO ANY OR ALL OF THEM WITHOUT PROPER TAX COUNSEL FROM A QUALIFIED TAX ADVISOR! IT WILL BE NECESSARY TO COORDINATE ALL OF YOUR FINANCIAL ISSUES TO MAKE SURE YOU ARE MAKING THE RIGHT MOVES. TAX PLANNING CANNOT BE DONE IN A VACUUM. YOU MUST TIE TOGETHER ALL OF THE PIECES OF THE PUZZLE!)

1. They took a hard look at their company benefits, and found out there were almost ten choices that they had to make. And by making the right choices, they were able to save big money on their taxes. Some of the opportunities they discovered involved the proper use of their 401(K) deductions, the medical, life and dental insurance "cafeteria" options, their stock purchase plan, expense reimbursements, and so on.

There are literally dozens of tax breaks that employees can take advantage of, through their company benefits. Most people choose the options that their coworkers choose, as they discuss these issues over lunch. Or, they pick the benefits based on a "quick and easy" selection while watching the news before they go to bed. And, then, the booklets that describe all the choices get put in a drawer, and never again see the light of day .

This is a big mistake. It is amazing how much money in taxes is flushed away because most employees eyes glaze over at the thought of picking these choices. The books sound very complicated, and many times the explanations provided by the company are poor, at best.

The best answer is to coordinate your benefit package with your other personal finances. If you choose options based on "getting it over with", it is like choosing a medicine from your cabinet based on whichever one is in front, and easy to get to. You may not waste any energy, but you might not get well either!

2. They took advantage of the tax savings from using IRA's. Now, many people think you can't do IRA's if you have a retirement plan at work, and that may or may not be true, depending on your income. But, either way, using IRA's is an excellent way to defer taxable income on the earnings in the account.

One of the big myths about IRA's is that there is no way around paying a penalty if you take the money out before age 59 1\2. Not necessarily true. Did you know there is a loophole that allows penalty free withdrawals before that age? Yes, it exists, and almost no one knows about it! If you annualtize (take annual distributions) over a minimum of five years or until age 59 ½ whichever is longer, the penalty is eliminated! Do you think this time frame may help, over a period of years with something like college funding? (Kind of interesting, isn't it? Let your college funding investments grow without taxes, and then use the money without penalty!)

3. Home financing. With the elimination of many tax deductions, your home may still be an excellent tax shelter. All it takes is some planning to determine what is the proper amount of mortgage to have, and then by maximizing your interest deductions, you will save considerable taxes.

For example, when you buy a new home, all the interest up to a one million dollar mortgage is deductible. When refinancing, only an additional $100,000 of equity may be used to create new tax deductions. Let's take a look at what would happen if you refinanced and added the interest deduction of an extra $100,000 mortgage. You would have $8,000 in new deductions (assuming an 8% interest rate) which would save you as much as $2,480 in taxes!

Kathy and Al refinanced their home several times over the last decade, still have a big equity position, and have saved thousands in taxes! Of course, don't forget there are all kinds of variables that need to be addressed BEFORE YOU MAKE ANY FINANCING DECISIONS!

4. Overpaying withholding taxes is a big mistake. Let's look at an example: Kathy and Al, being good students of tax reduction, have set themselves up to save $4,800 in taxes for this year. If they kept their withholdings at the same level, they would get a big, huge refund next year. This "loan" they would be making to the IRS is free of interest, and would cost them several hundred dollars of interest that they may never see.

On the other hand, by changing their withholdings, they end up getting $400 per month extra take home pay, NOW, which they can invest somewhere to get interest instead of giving it to the IRS!

It is a big misconception that you cannot increase your exemptions on your W-4, without getting the IRS all over your back. You are allowed under the law to only withhold the amount of taxes you expect to pay. Actually, as long as you end up within 90% of your final liability, you won't even get a penalty when you pay the balance with your return!

Never, ever give them money that is yours. Never be afraid of doing what the law allows!

5. Tax credits. Most people are familiar with tax deductions, which are expenses you can write off against other income, to reduce your taxable income. However, many people are not aware of tax credits, which are much better than deductions. Actually, they are incredible, because they reduce your taxes dollar for dollar!

Let me explain. If you get a deduction of $1,000. let's say on a mortgage, it will save you about $300 in taxes. (Assuming a 30% average tax bracket.) If you had a $1,000 tax credit(s), you would save $1,000 in taxes! These credits, then, can be as much as three times better than deductions of the same amount!

There are several types of credits, such as child care, earned income, rehabilitation, low income and affordable housing, elderly credit, and so on. They all have been entered into the tax code to give certain groups, or types of expenses, a tax advantage.

If you don't get all the credits you deserve, you may be overpaying!

6. Real estate. People mistakenly believe that owning various kinds of real estate will not help them out tax wise. That is simply not true. Real estate still offers all kinds of tax breaks which include (but are certainly not limited to):

A. Use of losses up to $25,000 against other income. (Under certain circumstances.)

B. Deferring gains on personal residences, and exchanges of investment property.

C. Renting to family members.

D. Offsetting taxable income.

E. Tax credits.

F. Vacation properties.

And so on. The list of creative tax savings that can be achieved with real estate is surprising. The IRS, and some of the popular press, have made it seem that all is lost with real estate as a tax savings item. Not true at all! What has disappeared, is the highly leveraged, risky real estate deal, that was designed to do nothing but lose money.

Now, the first and foremost desire, is to make money, and shelter as much tax as possible while doing so. This area of tax planning is not simple, so caution must be used every step of the way. (As is true with all tax planning!)

Our friends have carefully implemented a few buildings, on a positive cash flow basis, with major tax advantages!

7. Tax advantaged industries. Yes, the insurance industry is a tax haven, and will always be likely to have some special laws around, just for it.

You can spend time wondering why, or you can use their heavily favored status to your advantage! Just like Kathy and Al.

Most products sold by life insurance companies allow either tax deferred or tax free treatment of your invested dollar, with some of the lowest risk factors around. (CD's and treasury bills may be the only lower risk items that we are aware of, but they don't offer the tax advantages of insurance products.)

There are tax deferred annuities, cash value insurance plans, and variable annuities. All have tax deferred status, and cash value life insurance, can actually allow tax free withdrawals! Not all these products are the same, and you should make sure the person you are dealing with works with sound institutions. Assuming that is the case, you will be amazed at how much extra money you may end up with, down the road, by not paying taxes as you go!

All these investments have very unique positions in the tax laws, and should be investigated at every opportunity.

8. Charitable giving. We have explained charitable giving strategies to people who had not been inclined to give before, we showed them why they should become givers. People who were previously inclined to give, become bigger givers! Why?

Because, the Congress has to encourage giving from the private sector, and there are many opportunities to reduce your taxes, while helping needy religious or social organizations at the same time.

Talk about a win win story!

Most people, like Kathy and Al, think of charitable giving as leaving a bag of clothing to the Salvation Army at your front door. Yes, this is a form of giving, but certainly only the tip of the iceberg when it comes to using the tax code to enhance the recipient's and your position!

For example, there is a strategy that allows you to sell assets that have gone up in value, without paying any capital gains tax! Yes, you heard me right. No taxes!

Here's how it works. Let's say you bought some stock in a company several years ago for $1,000, and because of your wisdom in purchasing the stock, it is now worth $100,000! If you go to sell the stock, you would pay somewhere around $30,000 in taxes. If you correctly utilized a charitable remainder trust, your tax could be as low as ZERO! (Or, a savings of the whole $30,000!)

Not too shabby. As a matter of fact, the entire amount of money you saved in taxes will be available for you to invest for income. How about that? Sound interesting, or what?

By the way, this law has been around forever, and almost no one takes advantage of it. Why? Beats me. But, now you know, so keep it in mind.

9. Starting or properly utilizing a small business. Let me tell you that the tax savings that may be realized from a small business are possibly the best shelter ever. And I am not talking about some big enterprize, although that's fine too. If you have a business, my guess is that you are still overpaying your taxes. (Yes, even with your accountant.) Over the years, I have been able to save lots of tax dollars for my business clients, by being proactive instead of reactive!

Most business tax preparers are used to answering your questions, instead of telling you what you should be asking!

Anyway, whether you own a business now, or are thinking about it, you can't beat all the tax breaks allowed for business. If you want to start a little enterprize out of your home, you can take advantage of the same tax breaks that Fortune 100 companies can use! As long as you make an effort to make money in three out of five years, you can use all of the business tax savings items, with great joy.

Kathy and Al changed their entire life by starting a business. Other folks who already have a business, are making the business tax breaks work for them as hard as they do for themselves!

A very brief list of tax savings opportunities include (but are not limited to):

A. Tax free loans.

B. Retirement plans.

C. Deferrals of income, and speeding up deductions.

D. Deductions for insurance, and other benefits for you and your family.

E. Travel and entertainment.

F. Education, expense and other reimbursements.

G. Automobile use for the business.

H. Deductions for businesses run out of the home.

I. Tax advantaged income from leasing to your business.

J. Transferring income to family members

K. Deducting "startup costs."

L. Increased use of certain tax credits.

And on and on and on!

I could fill a library with all the advantages you have as a taxpayer who happens to own a business. Why not fill your own library with all the tax savings ideas for your family?

10. Careful planning. THIS IS REALLY THE GREATEST SECRET OF ALL!!!

Most of you do not plan for your family's finances, the way you even plan a vacation or a trip to visit your mom.

Those activities are planned very carefully. When you will leave. What you will do before you go. What you will bring with. How you will get to the airport. What you will do with your bags. Which seats to take. What time you arrive. Renting a car. Etc., etc.

DO YOU TAKE THE TIME TO PLAN FOR YOUR OWN FUTURE IN SUCH LAVISH DETAIL??

I think you probably do not. Be realistic with yourself.

Yet, this planning makes the difference between arriving at your destination, happy and excited, or having no clue where you are, or even where you want to be! This last secret may not sound as interesting as the others, because it requires more mundane tasks, but,

IT IS ONE OF KEY WAYS OF BEATING THE BANKER, THE IRS, AND EVERYONE ELSE WHO IS AFTER YOUR MONEY!

Imagine this...

*******

Bill and Sarah were shaking their heads as they left the accountants office. "How come we never seem to get anywhere with our taxes?," asked Sarah to no one in particular.

Bill was still shaking his head as they got into the car. "You know, I swore that we would get a handle on it this year, and we just let the whole year go again!," Bill mused.

Sarah replied, "Well, we had a lot to do last year, and we have a lot going on this year, too! I hope we can find the time to get things on a more even keel."

"Yeah, I know," said Bill. "But, you know we have to run up to school next month for Larry's graduation. And Leslie will be coming back from her trip right after that. Oh, yeah, your mom is going to need help with that addition on her home I promised her. I almost forgot about that!"

"You did forget that Gerry's coming in for a visit after Labor Day. You know we have to show him a good time after the divorce and all."

"Geez!" Bill exclaimed. "I also know the company is going through that restructuring, and I'll be out of town a lot. I talked to Jay, and he said that our group would be real busy coordinating the new division."

They drove away in silence, both of them lost in thought. They were thinking about how busy they would be, and had already started to commit a terrible sin.

BELIEVING THAT THEY WERE TOO BUSY TO REDUCE THEIR TAXES!

You know, there is a saying that is very true for Bill and Sarah: (As well as most Americans)... They are so busy earning a living, that all they will have, is just a living! And they will continue to overpay their taxes. Year after year after year!

*******

I'll bet you don't have any doubts why.

This little story exaggerates a point, yet not really by that much. Bill and Sarah's only problem was that they did absolutely no tax planning. Their agenda was carried out by a tried and true American formula:

PUTTING OUT WHATEVER FIRE IS THE HOTTEST!

Not the ideal way to manage your life, is it?

As a matter of fact, those who have taken the time to plan, are more likely to have more money than those who don't plan. Especially when it comes to taxes. Planning regularly, and often, is your best weapon. It really is!

Al and Kathy, our tax savings experts, found that planning turned their lives into a cottage of comfort. Warm, safe and devoid of panic and confusion. It's a nice little place to be.

I'll bet you feel the same when you open that door and walk in. It isn't that hard to get to this home. All it takes is some knowledge and a little bit of effort.

Just like it takes to make your house a home! And in order to get into this house... you need to have CONTROL! Control of how you arrange your money....

To Keep The Tax Man's Greedy Little Hands Out Of Your Pocket!

If you feel like the government has the control over you, that can be fixed very quickly. But, the initial step must be yours. Taking that first step into a new life of lower taxes is really all up to you.

Just by the fact that you have read this report, I'll bet you are curious. Curious to see if you can do something to gain the control back. That's great. Curiosity is always the mother of new directions, and newfound freedom!

If any of this makes sense, you probably have some questions. Maybe lots of them. That is good! If I have stimulated you to think about this, then I have done my job!

Now it's time to do yours and get with a qualified tax professional who can help you pay the least amount in taxes you legally can! (AGAIN, DO NOT TAKE ANY ACTIONS REGARDING YOUR TAXES WITHOUT FIRST GETTING ADVICE FROM A QUALIFIED TAX PROFESSIONAL! REMEMBER, WE ARE ONLY ADVOCATING THAT YOU HIRE A QUALIFIED TAX PROFESSIONAL WHO WILL ADVISE YOU ON 100% LEGAL TAX REDUCTION STRATEGIES!)

DISCLAIMER – NOTHING IN THIS REPORT IS TO BE SUBSTITUTED OR TO BE CONSTRUED AS FINANCIAL, LEGAL, OR ACCOUNTING ADVICE, OR ADVICE OF ANY KIND. THE INFORMATION CONTAINED HEREIN IS SOLELY INTENDED TO BE INFORMATIONAL, AND NOT TO BE CONSTRUED AS ADVICE OF ANY KIND. THE READER ASSUMES ALL RESPONSIBILITY FOR ANY FINANCIAL, LEGAL OR ACCOUNTING ACTIONS THEY TAKE, AND UNDERSTAND THAT THE READER MUST CONSULT WITH THE APPROPRIATE PROFESSIONALS BEFORE TAKING ANY ACTIONS REGARDING THEIR FINANCIAL, LEGAL OR ACCOUNTING SITUATION. THE READER HOLDS THE AUTHOR, PUBLISHER, OR ANY DISTRIBUTORS OF THIS REPORT HARMLESS FROM ANY CONSEQUENCES THAT RESULT FROM ANY FINANCIAL, LEGAL OR ACCOUNTING ACTIONS THE READER TAKES UNDER ANY AND ALL CIRCUMSTANCES.

You all know that I live in sunny "but it is a dry heat" Arizona.  Some of this may not be exactly the same where you live but it is always good sense to save money where possible. ... Try it, you will like these ideas as you put the cool cash in your pocket.

Ways to Save on Cooling Costs

Heating and air conditioning usually represent the biggest portion of home energy bills. As we head into the hottest part of the year, here are some ideas from author and home improvement expert Don Vandervort that will help you stay cool...and save money in the long run:

Get 'In the Zone': Creating heating and cooling zones that let parts of your house become warmer and cooler than other parts is a great way to save both energy and money. If your home has a ducted system and wasn't originally designed with a zone system in mind, you can have a professional install a series of motorized dampers in certain ducts that will create a zone effect.

Install Room Air-Conditioning Units: If your family spends a majority of time in one room or area of your home, like the family room or TV room, you can install a window unit or portable unit in that room and use that unit for part of the day instead of turning on your central air conditioning. You can always turn your central air conditioner on for those times of the day when your family is dispersed throughout the house.

Install Ceiling Fans: The latest technology means that ceiling fans achieve better air circulation and can now help you save as much as 30% on your energy bill. Be sure to look for the Energy Star designation for energy efficiency.

Inspect Your Ductwork: Recent research has shown that central heating and cooling systems that use ductwork can lose as much as 50% of their energy through leaks. It is important to have your ductwork inspected by a contractor every three years to make sure your system is operating at maximum efficiency.

Install Heat-Recovery Ventilators (HRVs): Not only do HRVs get rid of air contaminants like odors, dust, and mold, they also grab much of the cold or heat from the outgoing air and recycle it back into your home with the incoming fresh air. These units are especially helpful if your home is tightly sealed.

For even more great home tips and ways to save this summer season, visit www.hometips.com.

Home ownership is a dream shared by millions of people around the world. Knowing what you can afford will make buying a home easier, but how do you know what you can afford? These tips will give you an idea of what to know about pre-qualifying for a loan before you start looking for a new home.

One of the biggest reasons why you’d want to pre-qualify for a loan is that you’ll have an idea of what price range house to look at. If you know you only pre-qualify for $100,000, you won’t be tempted to get your heart set on a house in a higher price range. It will also keep you from embarrassing yourself by not offering enough for a house.

Another benefit of pre-qualifying is that it can make receiving a mortgage quicker. You’ll already have established a relationship with the lender, so you know you can work with them which could make the process less nerve-wracking.

The following list shows the items you’ll need to provide to a lender for them to make a pre-qualification determination:

Income: W-2 tax forms for each wage earner for the past two years

Employment: Names, addresses, and phone numbers for each wage earner for the past two-three years

Creditors: List of all creditors owed money including the total amount owed as well as monthly payment and account numbers

Residence: Addresses of the last two places you lived. Provide the landlord’s name, address, and telephone number if you were renting. If you had previously owned a home, provide the name, address, and telephone number of the mortgage holder

Banking: Bank statements for the last three months

Pay stubs: Pay check stubs from the past month

Tax forms: If you’re self-employed, you’ll be expected to provide complete tax forms for the past two years

Gift letter: If you’ll receive gift money to help you buy the home, you must have a signed letter declaring the money as a gift

Divorce decree: If you’ve been recently divorced, you will be expected to provide a copy of the divorce decree as well as proof of any child support or alimony you’ll receive

Supporting documents: If you have other income such as social security, stock dividend interest, or something else, you’ll want to have that information available

Sales contract: Provide a copy of the purchase/sales contract if you have already found the house you’d like to purchase

The Loan Officer, once they have the above information will also ask if you have a down payment . There are many programs still available with downpayments of less than 3 % and Veterans may obtain loans with no money down within certain limits.They may also expect you to give them permission to run a credit check on you and anyone else that will be responsible for paying the loan. You may also be expected to supply 2 to 5 percent of the loan amount for closing costs.

When you’re searching for a home, knowing what you can afford to spend will actually help you find the perfect home for you. Having the knowledge of what to know about pre-qualifying for a loan will make the process much easier.

For Contact information

Korene Clopine-Seaman, CMPS, CMA, RRDS, LMB

Email: korene@klcsloantream.com

or you can apply directly for a loan on my website at www.klcsloanteam.com/myloanapplication

Or you can call 623-340-0934

SET FOR LIFE
A SPECIAL CONFIDENTIAL REPORT

10 Ways To Save Big Money On Your Taxes
That Your Accountant May Not Have Told You!

The BEST time to do tax planning is now NOT in Febuary, March, or April.  Your professional tax planner and advisor is not rushed or hurrying for his next appointment, either.  GET the best TAX PROFESSIONAL YOU CAN FIND.  For goodness sakes do not do this on your own or with the advice of a computer program or your neighbor's cousin's nephew's girlfriend's brother's best friend the family has known since the first grade.  

           Have You Ever Felt More Aggravated With Our Tax System?

You cannot pick up a paper or watch TV, without seeing another story about budget deficits, cuts in spending, and the worst news of all:

                                More Increases To Your Taxes!

Yet, the answer, government always seem to come up with to the economic mess we're in, is to take more of our hard earned dollars.  We should all know this is still the greatest place on the planet to live and work. As messed up as we are, there is no other country that can compare with the opportunities we have. And that's why it feels so bad when we see our incentives to earn, save and invest being taken away

I remember things I learned as a kid. They were in my history book. They were from a time in our past. When the public took a stand. When they had had enough. When they realized that the powers that be were interested in a different agenda. One of endless, unfair taxation. From which a famous slogan was derived:

                                       Taxation Without Representation!

Think about it. This was the rallying cry that our nation was formed on! Yet…we have somehow let ourselves fall back into a situation where we once again have tax monsters that are thrust upon us without or agreement or consent! It is truly taxation without representation.

For example, let's look at the list of taxes we all have to pay:
    1. Federal income taxes.
    2. State income taxes.
    3. Local income taxes.
    4. Sales taxes.
    5. Real estate property taxes.
    6. Personal property taxes.
    7. Ad valorem taxes.
    8. Gasoline taxes.
    9. Import duty taxes. 
    10. Sin taxes. (Cigarettes, booze, etc.)
    11. Travel taxes. (Hotel, airline, etc.)
    12. Excise taxes.
    13. Highway taxes.
    14. Death taxes
    And on and on and on.

Not only does the list of taxes keep getting bigger, the rates keep getting bigger as well.  Any time a governmental body finds themselves in a fix due to mismanagement, their answer is always the same:    Raise Taxes!     After all, they won't notice. We need the tax revenue to keep things going. Everybody has to pay their fair share!  Right. Give me a break. Let's talk about paying your "fair share."

• Is it fair that huge corporations get special mention in tax laws or in government bailouts to reduce their burden or their problems? 
• Is it because they are TOO BIG to fail or that too many of us commoners "little people" just do not speak up at the poll and we get side talked into looking at something else come time to vote. 
• Is it fair that giant developers get tax breaks to build their buildings? 
• Is it fair that by creating new jobs, employers get to pay more payroll taxes? 
• Is it fair that lower income earners pay a much higher percentage of their income in "flat" taxes?
• Is it fair that the top 10% of earners pay over 50% of all income taxes?

Is any of this fair? No, it sure isn't.  But, then, my dad always told me that life wasn't fair.  That I would have to learn how to become "street smart" and find the best way to live my life. On my own.  The world doesn't care about your own personal situation. You won't get any medals for being successful. And you won't get yelled at for failing.  All you will get is whatever you make your life. On your own.  And what we are really talking about here is one of the most powerful notions of our lives. A word that is so important, yet one that often seems to elude us. 

What am I talking about?  Control!  Or, in other words, the power to determine your own destiny.  Control. An emotion that we all want. That we all need. You see, the lack of control makes us feel like we cannot guide our lives the way we want to. Not being in control is scary. It is disturbing. It can be very disappointing.   There are so many areas of our life where we do not have much, if any, control. Which can cause us to feel a loss of peace of mind. For isn't being in control, really one of the foundation corner posts of happiness and peace?

When you know you can steer your life in the direction you want, don't you enjoy each day a little more? Don't you sleep better at night? Don't you have the freedom to love your family just a little more?  Sure you do. That is why we all strive to work so hard. To gain more control. And yes, having more money does provide more control.  As the old saying goes, "Money cannot buy happiness, but it can sure rent it for a while!"  And paying less in taxes, puts more money in our pockets, which puts more control in our lives!

Yet, when you look at the long list of taxes we all have to pay, I want you to notice an interesting fact:     Of all the taxes we are stuck with, only a couple of types are really controllable!  Most of the items on the list are either built into the prices of things we pay, or applied as a percentage of the value of something. If you want to buy some beer, you will pay the sin and sales taxes, without any option to get around them.  If you want to go on a trip, you will pay the airline, hotel, car rental taxes, with zero say in the matter.  And so on.

There are a couple of interesting exceptions to this "pay without choice" rule. As a matter of fact, these exceptions are so big, that the fact they even exist is truly amazing.   What am I talking about? How about some of the biggest taxes you have to pay both during and after your life?   Yes, Federal income and estate taxes!

Let's look at a little bit of background here before I get to the specific methods of reducing these taxes.  As you probably know, these taxes have been around for a long time. And the way we are taxed on them keeps changing like the weather.  You see, originally, they were established to increase revenue to the US Treasury across the board. But, then, they were manipulated to encourage (or discourage) certain behaviors. For example, builders want us to buy houses, and eventually the Congress put a tax break in the code for deducting the interest we pay on a mortgage.And so on.

Congress uses the taxation of our income and estates as a "carrot and stick" to direct our financial lives. In the seventies, during the recession, they added a tax credit for hiring new employees. They increased the tax savings for businesses who buy new equipment. Etc., etc. So, since they use these taxes to push us one way or another, a very interesting result has been created: 

Income And Estate Taxes Can Be Significantly Raised Or Lowered By The Way You Arrange Your Financial Affairs!

Think about that. It is incredible. You can literally decide how much in estate and income taxes you pay, based on decisions you make with your money! And, you can do this 100% legally! (Make sure you understand that all wI am suggesting is following the tax laws as they are written! I will NEVER suggest or advocate that you do anything that isn’t 100% legal!) There isn't any other area of taxation that allows you such flexibility. Or that can cause you so much grief, if you set yourself up wrong.  And, yes, you can set yourself up the right way, much easier than you think.

But, first, let's define the "right way."  Well, my definition of "the right way" is paying the least amount of taxes of anybody you know in the same income bracket!  Yes, that's right, two families can have the exact same income, and one can pay way less in taxes. A lot less. Let me give you an example:

                                                    *******

Al and Kathy earn the same amount of income as their in-laws, Dan and Mary. They both have houses in the same price range, in the same neighborhood, and have the same number of kids.  They work for the same company, and have the same company benefits available to them. As a matter of fact, they are the same in almost all respects, except for one.  Al and Kathy pay several thousand dollars less than Dan and Mary in income taxes! That extra money has been used for years to build up enough money to pay for their children's education. And to buy all kinds of investments. And to go on nice vacations. And so on.

Dan and Mary have no idea how they will pay for college. Or retire. Or reach any of their goals.  How can this be? Well, it is because Al and Kathy have taken advantage of the tax laws and Dan and Mary have never bothered! They thought they were too busy. Or that the IRS would hang them. Or that the loopholes weren't for them. Or a thousand other excuses.    But you know what? Excuses don't put money in your pocket.  Careful planning of your finances to reduce the taxes can put money right where it belongs... in your possession!

*******

So, what kinds of things did Al and Kathy do? How about: (NOTE- THESE STRATEGIES DO WORK. HOWEVER, YOU MUST NOT RUN OUT AND DO ANY OR ALL OF THEM WITHOUT PROPER TAX COUNSEL FROM A QUALIFIED TAX ADVISOR! IT WILL BE NECESSARY TO COORDINATE ALL OF YOUR FINANCIAL ISSUES TO MAKE SURE YOU ARE MAKING THE RIGHT MOVES. TAX PLANNING CANNOT BE DONE IN A VACUUM. YOU MUST TIE TOGETHER ALL OF THE PIECES OF THE PUZZLE!)

1. They took a hard look at their company benefits, and found out there were almost ten choices that they had to make. And by making the right choices, they were able to save big money on their taxes. Some of the opportunities they discovered involved the proper use of their 401(K) deductions, the medical, life and dental insurance "cafeteria" options, their stock purchase plan, expense reimbursements, and so on.

There are literally dozens of tax breaks that employees can take advantage of, through their company benefits. Most people choose the options that their co-workers choose, as they discuss these issues over lunch. Or, they pick the benefits based on a "quick and easy" selection while watching the news before they go to bed. And, then, the booklets that describe all the choices get put in a drawer, and never again see the light of day .

This is a big mistake. It is amazing how much money in taxes is flushed away because most employees eyes glaze over at the thought of picking these choices. The books sound very complicated, and many times the explanations provided by the company are poor, at best.

The best answer is to coordinate your benefit package with your other personal finances. If you choose options based on "getting it over with", it is like choosing a medicine from your cabinet based on whichever one is in front, and easy to get to. You may not waste any energy, but you might not get well either!

2. They took advantage of the tax savings from using IRA's. Now, many people think you can't do IRA's if you have a retirement plan at work, and that may or may not be true, depending on your income. But, either way, using IRA's is an excellent way to defer taxable income on the earnings in the account.

One of the big myths about IRA's is that there is no way around paying a penalty if you take the money out before age 59 1\2. Not necessarily true. Did you know there is a loophole that allows penalty-free withdrawals before that age? Yes, it exists, and almost no one knows about it! If you annuitize (take annual distributions) over a minimum of five years or until age 59 ½ whichever is longer, the penalty is eliminated! Do you think this time frame may help, over a period of years with something like college funding? (Kind of interesting, isn't it? Let your college funding investments grow without taxes, and then use the money without penalty!)

3. Home financing. With the elimination of many tax deductions, your home may still be an excellent tax shelter. All it takes is some planning to determine what is the proper amount of mortgage to have, and then by maximizing your interest deductions, you will save considerable taxes.

For example, when you buy a new home, all the interest up to a one million dollar mortgage is deductible. When refinancing, only an additional $100,000 of equity may be used to create new tax deductions. Let's take a look at what would happen if you refinanced and added the interest deduction of an extra $100,000 mortgage. You would have $7,000 in new deductions (assuming an 7% interest rate) which would save you as much as $2,170 in taxes!

Kathy and Al refinanced their home several times over the last decade, had a big equity position, and have saved thousands in taxes! Of course, don't forget there are all kinds of variables that need to be addressed BEFORE YOU MAKE ANY FINANCING DECISIONS!

4. Overpaying withholding taxes is a big mistake. Let's look at an example: Kathy and Al, being good students of tax reduction, have set themselves up to save $4,800 in taxes for this year. If they kept their withholdings at the same level, they would get a big, huge refund next year. This "loan" they would be making to the IRS is free of interest, and would cost them several hundred dollars of interest that they may never see.

On the other hand, by changing their withholdings, they end up getting $400 per month extra take home pay, NOW, which they can invest somewhere to get interest instead of giving it to the IRS!  It is a big misconception that you cannot increase your exemptions on your W-4, without getting the IRS all over your back. You are allowed under the law to only withhold the amount of taxes you expect to pay. Actually, as long as you end up within 90% of your final liability, you won't even get a penalty when you pay the balance with your return!  Never, ever give the IRS money that is yours. Never be afraid of doing what the law allows!

5. Tax credits. Most people are familiar with tax deductions, which are expenses you can write off against other income, to reduce your taxable income. However, many people are not aware of tax credits, which are much better than deductions. Actually, they are incredible, because they reduce your taxes dollar for dollar!  First Time Home Buyers, here is $8000. if you do things correctly and on time.

Let me explain. If you get a deduction of $8,000. let's say on a mortgage, it will save you about $2,400 in taxes. (Assuming a 30% average tax bracket.) If you had a $8,000 tax credit(s), you would save $8,000 in taxes! These credits, then, can be as much as three plus times better than deductions of the same amount!

There are several types of credits, such as child care, earned income, rehabilitation, low income and affordable housing, elderly credit, and so on. They all have been entered into the tax code to give certain groups, or types of expenses, a tax advantage. If you don't get all the credits you deserve, you may be overpaying!

6. Real estate. People mistakenly believe that owning various kinds of real estate will not help them out tax wise. That is simply not true. Real estate still offers all kinds of tax breaks which include (but are certainly not limited to):   A. Use of losses up to $25,000 against other income. (Under certain circumstances.)
        B. Deferring gains on personal residences, and exchanges of investment property.
        C. Renting to family members.
        D. Offsetting taxable income.
        E. Tax credits.
        F. Vacation properties.
And so on. The list of creative tax savings that can be achieved with real estate is surprising. The IRS, and some of the popular press, have made it seem that all is lost with real estate as a tax savings item. Not true at all! What has disappeared, is the highly leveraged, risky real estate deal, that was designed to do nothing but lose money.

Now, the first and foremost desire, is to make money, and shelter as much tax as possible while doing so. This area of tax planning is not simple, so caution must be used every step of the way. (As is true with all tax planning!)

Our friends have carefully implemented a few buildings, on a positive cash flow basis, with major tax advantages!

7. Tax advantaged industries. Yes, the insurance industry is a tax haven, and will always be likely to have some special laws around, just for it.

You can spend time wondering why, or you can use their heavily favored status to your advantage! Just like Kathy and Al.  Most products sold by life insurance companies allow either tax deferred or tax free treatment of your invested dollar, with some of the lowest risk factors around. (CD's and treasury bills may be the only lower risk items that we are aware of, but they don't offer the tax advantages of insurance products.)

There are tax deferred annuities, cash value insurance plans, and variable annuities. All have tax deferred status, and cash value life insurance, can actually allow tax free withdrawals! Not all these products are the same, and you should make sure the person you are dealing with works with sound institutions. Assuming that is the case, you will be amazed at how much extra money you may end up with, down the road, by not paying taxes as you go!

All these investments have very unique positions in the tax laws, and should be investigated at every opportunity.

8. Charitable giving. We have explained charitable giving strategies to people who had not been inclined to give before, we showed them why they should become givers. People who were previously inclined to give, become bigger givers! Why?  Because, the Congress has to encourage giving from the private sector, and there are many opportunities to reduce your taxes, while helping needy religious or social organizations at the same time.  Talk about a win-win story!  Most people, like Kathy and Al, think of charitable giving as leaving a bag of clothing to the Salvation Army at your front door. Yes, this is a form of giving, but certainly only the tip of the iceberg when it comes to using the tax code to enhance the recipient's and your position!

For example, there is a strategy that allows you to sell assets that have gone up in value, without paying any capital gains tax! Yes, you heard me right. No taxes!  Here's how it works. Let's say you bought some stock in a company several years ago for $1,000, and because of your wisdom in purchasing the stock, it is now worth $100,000! If you go to sell the stock, you would pay somewhere around $30,000 in taxes. If you correctly utilized a charitable remainder trust, your tax could be as low as ZERO! (Or, a savings of the whole $30,000!)  Not too shabby. As a matter of fact, the entire amount of money you saved in taxes will be available for you to invest for income. How about that? Sound interesting, or what?

By the way, this law has been around forever, and almost no one takes advantage of it. Why? Beats me. But, now you know, so keep it in mind.

9. Starting or properly utilizing a small business. Let me tell you that the tax savings that may be realized from a small business are possibly the best shelter ever. And I am not talking about some big enterprise, although that's fine too. If you have a business, my guess is that you are still overpaying your taxes. (Yes, even with your accountant.) Over the years, I have been able to save lots of tax dollars for my business clients, by being proactive instead of reactive!  Most business tax preparers are used to answering your questions, instead of telling you what you should be asking!

Anyway, whether you own a business now, or are thinking about it, you can't beat all the tax breaks allowed for business. If you want to start a little enterprise out of your home, you can take advantage of the same tax breaks that Fortune 100 companies can use! As long as you make an effort to make money in three out of five years, you can use all of the business tax savings items, with great joy. Kathy and Al changed their entire life by starting a business. Other folks who already have a business, are making the business tax breaks work for them as hard as they do for themselves!

A very brief list of tax savings opportunities include (but are not limited to):
    A. Tax free loans.
    B. Retirement plans.
    C. Deferrals of income, and speeding up deductions.
    D. Deductions for insurance, and other benefits for you and your family.
    E. Travel and entertainment.
    F. Education, expense and other reimbursements.
    G. Automobile use for the business.
    H. Deductions for businesses run out of the home.
    I. Tax advantaged income from leasing to your business.
    J. Transferring income to family members
    K. Deducting "start-up costs."
    L. Increased use of certain tax credits.

And on and on and on!  I could fill a library with all the advantages you have as a taxpayer who happens to own a business. Why not fill your own library with all the tax savings ideas for your family?

10. Careful planning. THIS IS REALLY THE GREATEST SECRET OF ALL!!!

Most of you do not plan for your family's finances, the way you even plan a vacation or a trip to visit your mom.  Those activities are planned very carefully. When you will leave. What you will do before you go. What you will bring with. How you will get to the airport. What you will do with your bags. Which seats to take. What time you arrive. Renting a car. Etc., etc.  DO YOU TAKE THE TIME TO PLAN FOR YOUR OWN FUTURE IN SUCH LAVISH DETAIL??  I think you probably do not. Be realistic with yourself.

Yet, this planning makes the difference between arriving at your destination, happy and excited, or having no clue where you are, or even where you want to be! This last secret may not sound as interesting as the others, because it requires more mundane tasks, but,

IT IS ONE OF KEY WAYS OF BEATING THE BANKER, THE IRS,
AND EVERYONE ELSE WHO IS AFTER YOUR MONEY!

Imagine this...

*******

Bill and Sarah were shaking their heads as they left the accountants office. "How come we never seem to get anywhere with our taxes?," asked Sarah to no one in particular.  Bill was still shaking his head as they got into the car. "You know, I swore that we would get a handle on it this year, and we just let the whole year go again!," Bill mused.

Sarah replied, "Well, we had a lot to do last year, and we have a lot going on this year, too! I hope we can find the time to get things on a more even keel."

"Yeah, I know," said Bill. "But, you know we have to run up to school next month for Larry's graduation. And Leslie will be coming back from her trip right after that. Oh, yeah, your mom is going to need help with that addition on her home I promised her. I almost forgot about that!"

"You did forget that Gerry's coming in for a visit after Labor Day. You know we have to show him a good time after the divorce and all."

"Geez!" Bill exclaimed. "I also know the company is going through that restructuring, and I'll be out of town a lot. I talked to Jim, and he said that our group would be real busy coordinating the new division."

They drove away in silence, both of them lost in thought. They were thinking about how busy they would be, and had already started to commit a terrible sin.

BELIEVING THAT THEY WERE TOO BUSY TO REDUCE THEIR TAXES!

You know, there is a saying that is very true for Bill and Sarah: (As well as most Americans)... They are so busy earning a living, that all they will have, is just a living! And they will continue to overpay their taxes. Year after year after year!

*******

I'll bet you don't have any doubts why.

This little story exaggerates a point, yet not really by that much. Bill and Sarah's only problem was that they did absolutely no tax planning. Their agenda was carried out by a tried and true American formula:

PUTTING OUT WHATEVER FIRE IS THE HOTTEST!

Not the ideal way to manage your life, is it?

As a matter of fact, those who have taken the time to plan, are more likely to have more money than those who don't plan. Especially when it comes to taxes. Planning regularly, and often, is your best weapon. It really is!

Al and Kathy, our tax savings experts, found that planning turned their lives into a cottage of comfort. Warm, safe and devoid of panic and confusion. It's a nice little place to be.

I'll bet you feel the same when you open that door and walk in. It isn't that hard to get to this home. All it takes is some knowledge and a little bit of effort.

Just like it takes to make your house a home! And in order to get into this house... you need to have CONTROL! Control of how you arrange your money....

To Keep The Tax Man's Greedy Little Hands Out Of Your Pocket!

If you feel like the government has the control over you, that can be fixed very quickly. But, the initial step must be yours. Taking that first step into a new life of lower taxes is really all up to you.

Just by the fact that you have read this report, I'll bet you are curious. Curious to see if you can do something to gain the control back. That's great. Curiosity is always the mother of new directions, and new-found freedom!

If any of this makes sense, you probably have some questions. Maybe lots of them. That is good! If I have stimulated you to think about this, then I have done my job!

Now it's time to do yours and get with a qualified tax professional who can help you pay the least amount in taxes you legally can! (AGAIN, DO NOT TAKE ANY ACTIONS REGARDING YOUR TAXES WITHOUT FIRST GETTING ADVICE FROM A QUALIFIED TAX PROFESSIONAL! REMEMBER, WE ARE ONLY ADVOCATING THAT YOU HIRE A QUALIFIED TAX PROFESSIONAL WHO WILL ADVISE YOU ON 100% LEGAL TAX REDUCTION STRATEGIES!)

I AM NOT A TAX PLANNING OR ADVISING EXPERT.  I am a top notch financial mortgage and interest expert.  I would be pleased to help you get the best mortgage possible and or help you get out debt sooner than you think, and you don't rob a bank, print funny money, take a second job, get rid of the kids or change your financial budget but you do save yourself and your family thousands and even hundreds of thousands of dollars of interest and debt payments.  Email me or call me and I will be pleased to help you.

DISCLAIMER – NOTHING IN THIS REPORT IS TO BE SUBSTITUTED OR TO BE CONSTRUED AS FINANCIAL, LEGAL, OR ACCOUNTING ADVICE, OR ADVICE OF ANY KIND. THE INFORMATION CONTAINED HEREIN IS SOLELY INTENDED TO BE INFORMATIONAL, AND NOT TO BE CONSTRUED AS ADVICE OF ANY KIND. THE READER ASSUMES ALL RESPONSIBILITY FOR ANY FINANCIAL, LEGAL OR ACCOUNTING ACTIONS THEY TAKE, AND UNDERSTAND THAT THE READER MUST CONSULT WITH THE APPROPRIATE PROFESSIONALS BEFORE TAKING ANY ACTIONS REGARDING THEIR FINANCIAL, LEGAL OR ACCOUNTING SITUATION. THE READER HOLDS THE AUTHOR, PUBLISHER, OR ANY DISTRIBUTORS OF THIS REPORT HARMLESS FROM ANY CONSEQUENCES THAT RESULT FROM ANY FINANCIAL, LEGAL OR ACCOUNTING ACTIONS THE READER TAKES UNDER ANY AND ALL CIRCUMSTANCES.

Focus on What Makes You Unique

We are all blessed with special talents that make us unique. Some people discover their talent at a young age and from then on focus their lives on honing it until they are rewarded by society. We call the most successful of these people stars or “pros”.

But I’m not just talking about sports or movie stars. Stars exist in every realm. There are star salespeople and star mothers and star teachers and so on. The question you need to ask yourself is, what makes you uniquely valuable? What is it that you have to offer? One of the saddest things I see as I get older are people I love who have given up on their dreams. When I see friends working at jobs I know they aren’t passionate about, I realize they have forgotten what it is that makes them unique.

Are you spending time at work doing something you are uniquely good at? Do you know what you are uniquely good at?

Here are a few life-changing questions you should ask yourself today.

• What is it that I am really good at?

• What do I enjoy so much that I would do it for free if I had $20 million?

• What would I stop doing tomorrow if I had $20 million?

• What would I do differently with my life if I had just three weeks, three months or three years to live?

• What do others regularly tell me I am good at?

If you answer these questions honestly, the answers can change your life. I know because it changed mine. I had a heart-to-heart talk with myself about 18 years ago when I woke up to the fact life was precious and I only had now to do what I had to do and wanted to do and asked myself those questions. The answers surprised me.

The first thing I realized was that if I had three weeks or three months or thirty years left to live, I wouldn’t spend it doing what I was doing. I wanted to be doing what made me happy and had lasting value to and for others. The next thing I realized was that money was but a tool. Yes, a vital tool but still a tool and not my goal.

This realization got me off my duff and forced me to focus on what I really wanted to do with my life. I have been doing what I enjoy and what I am very good at for the last 7 1/2 years. I found I had spent a great deal of my life enjoying the outcome of my work but did not necessarily enjoying all of the requirements of the work. It also made me realize that I could not do everything by myself so I found some GREAT referral partners.  Now I work to bring value to those referral partnerships and I enjoy working them.

I can tell you from firsthand experience that once you discover and start working on what you are uniquely talented at, your passion will take you to places in life you cannot even imagine right now. And chances are that your income will grow in a major, long-term way as a result!

Discover who you are today and never live with regrets!  You were born with two eyes and two feet .  Thye both point forward...Learn from the past but live in the present and keep your eyes on the goals toward the future.

DOWNsizing Can Be Economical, Green, and Smart

The recent downturn in the economy has many homeowners scrambling to find ways to cut their household expenses. Many who are in the market to purchase a home have turned their attention to smaller, “greener,” and more energy efficient homes. The current glut of “McMansions,” some with values 40% to 65% less than their original price, is an indication that many buyers are considering a change.

Downsizing is not for everyone.  It can bring significant and unexpected changes for those who approach the concept without reflecting upon the consequences. If you are considering buying a smaller home, you should do your homework before taking the plunge.  You must realize that your new home may not accommodate guests as readily as a larger one did.  Your current furniture may not fit.  You may not have the same space for crafts or projects. You may not be able to entertain as many or as much as you did at a larger home. Significantly changing your lifestyle can be difficult, and for some, almost impossible. It’s best to analyze the possibilities upfront.

If you are one of the thousands who have decided that less is better, the benefits can be surprising. To begin with, there are numerous financial advantages to buying or building smaller, and owners will experience other benefits that cannot be measured in dollars. Smaller homes are easier to clean, maintain, and afford their owners more time for other interests. Downsizing also forces us to get rid of the clutter and unnecessary items that some amass over decades.

I downsized in January of this year.  It some ways it was great and provided many benefits and opportunities.  In other ways it has been the living definition of the pits.  Collections that I started as a child or items given me by favorite family members who are now gone or work items I use in my home office, all no longer have a place to be that does not look clutter or out of place and space.  So you must make painful or ill-timed decisions that you might not be wanting to make right at that moment.  Before you downsize, decide what you can readily handle and make the decision of how, where, etc you will be disposing of the remainder of your household treasures.  This will save you at time, effort, energy, even expense when you move and you will get comfortable in your new home that much more quickly.

Not to be minimized, however, the financial benefits appeal to most everyone. Taxes and insurance can be dramatically less, and smaller homes require less furniture and “stuff.” Selling a larger, more expensive home may also generate extra dollars that can be used for savings, investments, and college tuition; and for some lucky sellers, the sale may provide the funds to be mortgage free on their new home. Even if a mortgage is necessary, it will probably be less than the original, providing additional cash flow that may be used to improve lifestyle or add to or start that retirement fund that will be wanted and needed.  If you are like me, you will find the yard will be smaller thus freeing your time to do other projects or activities.

Smaller, more efficient homes require less energy, cost less to heat and cool, and are more environmentally friendly. Buying a smaller home also causes the owner to be more aware of impulse purchases, since there will be less space for personal items or additional belongings.

I read less of the mail as a result of my downsizing as I still have items to get rid of and I do not have space for one more no essential and so I do not go shopping and there no extra expenditures.

Why Buyers Want to Deal
with Only One Real Estate Agent

Are you in the market for a new home?  There’s so much to consider when looking at houses. One thing you may wonder about is YOUR real estate agent.  Is there a good reason why buyers would want to deal with only one real estate agent as opposed to more than one?

The biggest reason for using only one real estate agent is building a great working relationship.  If you are using more than one real estate agent, you may find it hard to establish trust with each one. Using only one real estate agent will allow you to establish rapport, trust, and good communication to get you the best house possible.

If you are working with more than one agent, things can be difficult. You may forget to convey certain requirements to all of the agents in the same manner. You may be looking for in a house is a large master bathroom or another specific feature. Failing to let one real estate agent know of your desires could mean spending a great deal of time looking at houses that do not meet your requirements but you had failed to convey that to ALL the real estate agents you are working with.

A good real estate agent will do more than merely show you houses. They will begin the process by getting to know you. They will interview everyone involved to determine the type of house you want, what features are important, how much you can afford to spend and would like to spend, and what specific area or location you may be interested in living.

In actuality, the interview process allows the real estate agent to know what your family want and needs in a house and will give the real estate agent the information he or she needs to make that a reality. They will be able to sort through the inventory of houses on the market to find the ones that will meet your family’s requirements. This will allow you to focus on viewing specific homes that meet ALL your criteria when it comes time to look at houses instead of going to see every house on the market that meet some of your needs in the area or location you are interested in purchasing.

When you are starting the home buying process, a professional real estate agent will also help you by referring you to an experienced and knowledgable professional mortgage advisor to help you be sure of the financing you can qualify for as well as what you are comfortable in paying for your new home.  The loan qualification is vital to make sure if you have any credit issues or are needing extra time to get your loan approved, you know as quickly as possible so a purchase contract is not written without being sure you can obtain the necessary financing for it thus not incurring additional costs, penalties or forfeiting deposit money. This will enable both you and the agent to know how much house you can afford. Having this information may further reduce the number of houses you will have to view before finding the that suits you.

Ultimately, having a good working relationship with their clients is to the real estate agent’s benefit, as well. They will know what the buyer is looking for and be able to provide the highest level of customer service possible to help the buyer get into their dream home.

Depending upon where you live, the real estate agent may ask you to sign a buyer-broker contract. This contract basically says you will not use another agent when looking for your new home. There is usually a time limit associated with this contract from as little as three months to as much as three years. Read the terms of the contract before signing it to avoid having to deal with an agent you’re not comfortable with.

Having one real estate agent will increase your chances of finding the house you want, being able to negotiate a price that you can afford, and aid you in buying that house. Imagine the headaches you could face if you worked with more than one. Reducing the stress of buying a house is why buyers want to deal with only one real estate agent when looking for a house. Make sure it is a Buyer's Agent who will only be representing YOUR interests!

If you do not have a realtionship with a real estate agent at this time, please let me know and I will recommend one to you that I know is a professional, has great customer service skills, and is a buyer's agent.  If you like you may check my website for a referral and go to the realtor or referral professional pages as well.  I am currently adding information and contact information to the real estate agent referral pages so not all the links or sheets are complete yet.  

Do not forget we have a deadline of completion of the purchase prior to November 30, 2009 to take advantage of the $8000 First Time HomeBuyer Tax Credit program.  You will want to get started as soon as possible on the loan application to take full advantage of this program!

Should You Lock in the Rate?

Being a first-time homebuyer can be stressful. There’s so much to learn. Even people who have bought homes before can find the process stressful. To reduce the stress you experience, consider why you might want to lock in the rate before beginning the process.

The process for purchasing a home basically follows this order:

Unfortunately, the interest rate may change dramatically from the time you start the process to when you actually close on the house. To avoid a large change in interest rate, and potentially add hundreds if not thousands to the price of your home over the course of the loan, you can lock in the rate when you fill out the application.

There are 2 different decisions to make about rates. One, the interest rate and points can both be locked in to protect you from any changes in the market however you would still be locked in if rates fall. This is like buying a stock. Once you have entered your price you can’t cancel it if the stock price goes down.

The second option is to allow both the interest rate and points to float which could greatly add to your final costs if rates go up. This simply means that you are subject to market fluctuations which could be to your benefit or detriment.

Find out how long processing your loan will take. This will enable you to choose the right time to ask for the interest and points to be locked in. In most cases the lender will hold the interest rate for up to 60 days.

Some lending institutions will allow you to lock in the interest rate and points for longer than 60 days, some considerably longer than 90 days. However, if you choose this option you’ll be expected to choose one loan and stick with it. You may also pay a higher fee for having the interest rate and points locked in for an extended period of time. The longer the rates are held in check, the more you’ll pay in fees. You may also have to pay an upfront lock fee which is non-refundable should the loan not be completed before the lock in date.

Any good real estate agent will recommend locking in the interest rate as soon as you can to avoid paying too much. By locking the interest and point rates, you’re guaranteed to receive those rates at closing as long as the lock is in place. This means your loan will have to be completed and the house closing done before the lock in date expires.

Be sure to get all rates, including locks, in writing separate from your application. You’ll also want to ensure the actual lender is offering the lock. Ask them to include a written confirmation of how the fees will be refunded or credited at closing. This will save you a good deal of headache and stress when you close on your house.

Ultimately, you want to get the best interest rate and points possible for your personal situation and goals when buying a home. You knew why you wanted to lock in the rate already, but now you know how and will have a better chance of getting that interest rate and locking it in to avoid surprises at closing.

I am available to help you with your purchase or refinance or maybe a mortgage tune-up review would be helpful...Call me and I will help you!