What Does a 10 Year Treasury Below 1.5% Mean for Home Buyers?

A weak jobs report pushed the yield on the 10 year treasury to below 1.5% for the first time in history.  If you didn't think we're living through historic times, you better change your tune quickly.  Read more...

If you have been on the fence about refinancing or purchasing a home, think of it this way.  Back in the early 1980's, Paul Volker, the Chairman of the Federal Reserve at the time pushed interest rates up to historic highs to quell inflation.  At that time you could have bought a 30 year treasury bond at rates upwards of 14%.  Imagine locking in a rate like that!

Well, you now have the same opportunity on the other end of the spectrum.  In 5 - 10 years, we'll be astounded that rates were this low.  It will also put massive upwards pressure on housing prices.

Home values move in relation to supply and demand. Assuming it takes a few years for rates to move away from these historic lows, we can expect a very limited supply of homes for sale in the future as homeowners will want to hold onto their cheap mortgages.  First time home buyers and those home owners forced into moving due to a relocation or family expansion will find very few homes for sale.  With low supply comes high prices.  Additionally, they'll have to pay higher rates for their mortgage.

If I were a betting man, I'd begin buying home builder stocks in the very near future because only new supply will keep prices from skyrocketing out of control.

What's the More Valuable Brand, Facebook or Wells Fargo?

According to a new global brand value ranking by BrandZ, the Wells Fargo brand is worth nearly $40 billion (number 14 on the list) while the Facebook brand clocks in at $33 billion (number 19).

Wells Fargo certainly has done a better job at maintaining stability during tumultuous times in the mortgage business.  Back in February, BrandZ Finance named it the top world bank brand.
Read the entire report here: 

Here are the top 10 most valuable brands, according to BrandZ:
1  Apple
2  IBM
3  Google
4  McDonald's
5  Microsoft
6  Coca-Cola
7  Marlboro
8  AT&T
9  Verizon
10  China Mobile

First Time Homebuyers in Florida to Receive LIFT...

There's one bank trying to help neighborhoods in Florida out of the doldrums.  Wells Fargo NeighborhoodLIFT program will kick off the Florida leg in Miami and make its way to Tampa, Orlando and Jacksonville.  It's already been offered in Atlanta, Las Vegas, Phoenix, Houston and Los Angeles.

Wells Fargo has a 5 year goal of $9 million in down payment assistance grants and homebuyer support programs along with $300 million in new home loans in Miami alone.

Read more

RATES DROP TO RECORD LOWS.... AGAIN: According to a Freddie Mac survey, rates on 30-year and 15-year fixed mortgages fell to record lows.  This is the third straight week rates have dipped.

The average 30-year rate went down 3.79 percent.  The 30 year was 3.83% last week.  It's now at its lowest point since the 30 year mortgage came into being in the 1950s. The 15-year declined to 3.04 percent.  

Unfortunately, the low rates haven't helped home sales. While 30-year rates have been below 4% since early December, resales fell in March.  We're still way below healthy levels.  

If you are in the process of refinancing or buying a home, I recommend locking in your rate now.  Yes, it may go a little lower but if it does, it will only be a slight drop.  But a movement to the upside will happen one of these days ... better to be locked in when it occurs.

Can I get Rid of PMI with a HARP 2.0 Refinance?

I hear this question all the time.  The short is answer is probably not.  The longer answer goes like this...

When you refinance with the HARP program if you currently have PMI, you will be required to keep PMI on your loan.  On the other hand, if you do not currently have PMI, you won't be required to add it EVEN IF your house is now underwater.

HARP was created for those homeowners that owe more on their mortgage than their home is worth and were therefore unable to take advantage of today's low rates.  With a HARP 2.0 loan, the value of the home has no bearing on your getting approved for a refinance.

The only requirements are: you've made the last 6 payments on time and no more than one 30 day late in the 6 months prior to that.  

Your current mortgage must be held by Fannie Mae or Freddie Mac.  IT DOES NOT MATTER WHERE YOU SEND YOUR PAYMENTS!!  The company that receives your payments is your mortgage servicer, they may or may not own your loan and they probably don't.  Check to see if your loan is with Fannie Mae here - http://www.fanniemae.com/loanlookup/

If it's not, check if it's with Freddie Mac here: https://ww3.freddiemac.com/corporate/

Now if your loan is with Fannie or Freddie and you are sending your loan payments to one of the large lenders such as Wells Fargo, Bank of America or Chase, call and ask if they have any special HARP loan offers.  I know for example, that Wells is refinancing their current eligible mortgages with no lender closings costs at all.

But even with no closing costs, you should compare rates... no closing costs is only good if your rate is very close to the rates you can get by paying closing costs.  To compare your quote with other lenders, check Mortgage123.com

An experienced mortgage professional can help you too.  If you want to discuss your personal situation, you may give me a call at 347-766-2674.  Leave a message and I will get back to you prompt

More Government Hand Holding May be Coming...

The Consumer Financial Protection Bureau (CFPB) thinks that comparing mortgage offers is still too confusing for borrowers.  And since the CFPB agrees with all mankind that an upcoming Dodd-Frank provision against upfront fees such as discount points and origination fees is not consumer friendly, they are planning on using their exemption authority to rewrite part of those rules.


Unfortunately, they are considering a "Flat Fee" proposal which every mortgage banker and broker are against as well as more intelligent consumers.  See, while the CFPB understands that by eliminating discount points and origination fees the cost of mortgage credit will go up for everyone.  Because in most cases, if a lender or broker can earn fees directly from the borrower, they can in turn, pass a lower rate mortgage through to the borrower.


But what they don't seem to understand based on their Flat Fee proposal is that the compensation received from originating mortgage varies based on the loan amount.  Originators earn more for larger mortgages, as well as they should.  Does a Ford dealer earn as much on a car as a Mercedes Benz dealer?  No.  Should real estate commissions be the same no matter what the sales price of a home was?  No.


So why would a flat fee origination fee work in the mortgage business?


It won't.


It's really a shame that law makers feel they can abolish fair trade.  A simple regulation that forces originators to disclose 2 offers... one with discount points and one without... is that so difficult?  Am I missing something?


Here's what the director of the CFPB, Richard Cordray said -  “Mortgages today often come with so many different types of fees and points that it is hard to compare offers,We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.” 


Transparency?  That word is brandished about like plastic patio furniture in a hurricane.  Transparency?  


Here's the conversation between myself and a borrower recently.  


BORROWER:  I'm not sure if I should pay discount points for that lower rate, Ron.  What do you think?
ME: How long do you think you will stay in this home, Mr. Borrower?

BORROWER:  Well, they're going to bury me here, Ron.

ME: Do you see any other reason that you might pay off this mortgage within the 1st 5 years or less?
BORROWER: Nope.. can't see how that would happen.  It would be nice if I end up living another 30 years with this same mortgage being that the rate is so low.
ME:  Well, you'll recoup the discount points in under 5 years because of the lower monthly payment.  Then you'll continue to have a lower monthly payment for the next 25 years.
BORROWER:  Sounds like you're suggesting I pay the discount points.
ME: It makes sense to pay discount points if you're holding the mortgage for more than 5 years.  And the longer you do, the more sense it makes.
BORROWER:  Okay, let's go with the points.
ME:  Agreed.
Was that really so hard that we need more regulations?  


Nanny state?  


It wouldn't surprise me if in 2025, all mortgage borrowers will be required to sit with a housing counselor (provided by the government) before they are allowed to take out a mortgage.  

Breaking News - "Nanny State" Infiltrates the Mortgage Industry

The Dodd-Frank Act of 2009 mandates that regulations are drafted that will require lenders to evaluate every borrower's ability to repay the requested loan.  Seems as the Consumer Financial Protection Bureau is perceiving this mandate to mean that lenders MUST verify every borrower's income, assets and debt.

I place this right in line with putting left turn red lights at even the most remote intersections.

A friend of mine wants to purchase a home in Florida.  He has very high credit scores - all above 750.  He would like to put 50% down on a $160,000 home, borrowing $80,000.  He can verify the assets are his own but they happen to be in blue chip, dividend paying stocks that he doesn't want to sell.  Unfortunately, the dividend income is not enough to qualify for the loan.

Mind you, he has enough money to pay off the loan at any time. A lender would have a lien on a property that is fully half borrower equity.

He can't get a loan.  
Shouldn't we be calling common sense "uncommon sense" since so little of it seems to exist today?

If You Thought Banks Are Being Conservative, Just Wait

Remember Dodd-Frank? Of course you do. That's the Act that was passed in 2009 that according to one law firm, requires that regulators create 243 new rules, conduct 87 studies and issue 22 periodic reports. (See report).    

Some of those new rules pertain to the development of so called "qualified" mortgages.  The rule is supposed to rid us once and for all of negative amortization loans, interest only loans and no income check loans - you know, all those loans that supposedly put us in the dog house back in 2008.  Pay no attention to the fact that those loans were available for many, many years without any problems.  It was only when Wall Street learned they could sell God awful loans within packages of good loans that the housing market was brought to its knees  It certainly was NOT the availability of some creative loans.

The Consumer Financial Protection Bureau (doesn't that sound like they have your best interest at heart?) is the regulatory body that will be responsible to draw up new definitions of what lenders can do with their mortgage offerings  And no less than 33 lobby groups have warned the CFPB that restrictive interpretations of said "qualified" mortgages will be another blow to the weak housing market.

So how strict will they be?  Here's my guess - no negative amortization, no "teaser" rates, no interest only loans and no no income check loans.  Just like we have today.  Hmmm.  Of course most housing markets in the country are still stuck in neutral.  Why don't we just keep it that way until someday, another politician decides its time to open things up again.  But that won't happen until we are first forced to sit through more of this agony.

Who Gets a Share of This $25 Billion?

After many months of negotiation, the largest multi-state settlement since the tobacco settlement of 1998 has been handed down to the 5 largest loan servicers in the country:


Ally/GMAC
Bank of America
Citi
JP Morgan Chase
Wells Fargo
(Links take you to each banks home assistance page)

The settlement is supposed to provide up to $25 billion in relief to distressed borrowers along with direct payments to states and the federal government.  These lenders/servicers are being punished for routinely signing foreclosure related documents without the presence of a notary public and without really knowing whether the facts they contained were correct. Both practices are in violation of federal law.  


The settlement provides benefits to borrowers whose loans are owned by the settling banks as well as to many of the borrowers whose loans they service.


If you have a loan that was funded by or is being serviced by (meaning you make payments to them), visit the following website that was created by the Attorneys General that negotiated the settlement:  http://www.NationalMortgageSettlement.com

Nothing to do with Mortgages but....

I just had to post this amazing NASA footage from onboard the Space Shuttle's Solid Rocket Boosters. The video is incredible but to really experience it, turn up your sound. The sound was remastered by the guys at Skywalker Sound. Yup... those guys. As in Lucas Film. Sit back and enjoy and watch it to the end, it'll be worth it.   XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

How To Know When Real Estate Hits Bottom

By viewing real estate in the same manner as successful investors look at other investments, we can ascertain if the time is near to once again consider real estate for investment purposes or at least to make a first time home purchase or upgrade.

Whether you’re wishing to purchase your first home or considering an upgrade and you’re waiting to buy at the bottom, a number of indicators are saying that we’re probably very close.

Consider the 3 criteria that successful investors look for before investing- and this is in just about any market - stocks, commodities, real estate, collectibles - you name it:
1) Cheap Prices
2) The general public either hates it or at the least, they are ignoring it
3) Signs pointing to the start of an uptrend

Okay.  I know that makes sense to you especially if you’re a contrarian.  But what’s considered cheap?  Well, I’d have to say that it depends on the investment but for real estate, I think we can juxtapose “cheap” with “affordable".  One reason for the housing crisis of 2006 - 2008 is that homes prices in many areas grew to unaffordable levels for the people that lived in those areas.  But today, home prices are more affordable than at any time since 1987 - that’s a a quarter of a century!

Now, I don’t want to just throw a fact like that out there without substantiating the it so let me explain.

If we agree that the 3 primary factors influencing housing affordability are median home prices, median household income & current mortgage rates, we can easily come to the same conclusion.

According to census.gov, (http://www.census.gov/const/uspricemon.pdf) the October 2011 median home price was $212,300. That’s just about 20% below the high of $262,600 reached in March of 2007.

Median Household income dropped to $49,445 at the end of 2010, the most recent government announcement.  I think we can assume that it would be even lower today. But using those figures, we see that in order to purchase a home at the median house price, a family earning the median household income would have to spend over 4 times their income (4.29 to be exact).  That number is very close to the historical mean.  Back in 2006, it would have taken over 5 times median income to purchase the median priced home.

But when we consider interest rates, everything changes.  As we well know, interest rates are extremely low... lower than they have been since the early days of this century.  Using the average rate of a 30 year fixed rate mortgage and assuming a 20% down payment, we conclude that a family would take on a mortgage payment of $811 to purchase a median priced home.  On an annual basis ($811 X 12 = $9,732) the mortgage payment consumes 19.7% of our median household income.  I challenge you to find such a low percentage at any time in the past 50 years.  But let me save you the time... you won’t find it.

I did find this chart which dates back to 1987.

So if we can reasonable assert that “affordable” could mean “reasonable” as regards to prices, could we make the argument that “very affordable” means “cheap”?  If you agree with that assertion, then I assume you would come to the same conclusion that we have - Real estate is cheap today.

That takes care of our first requirement.  Now let’s look at requirement number 2 - that an investment should be hated, or ignored.  Well, let me ask you… when was the last time you saw a positive leaning real estate article in the news?  When real estate does gets coverage, it’s been negative.  And this has been going on for years now.

Let’s take a look at people’s opinions from the industry itself.   The National Association of Home Builders Sentiment Index hit a bottom September 2011. Since then it has risen for the past 4 months.  This shows that real estate was hated but is turning a corner.  Which is what we are looking for as our 3rd requirement.

You can see the chart for the National Association of Home Builders Sentiment Index here - http://www.bloomberg.com/apps/quote?ticker=USHBMIDX:IND.  YOu can clearly see that the index dropped like a stone from 2007 to 2009.  It’s been trying to bounce back but has not had 4 straight months of increases for many years.  So we see a reversing trend.  

Now take take a look at this chart which shows median home prices for newly built and existing homes.

People aren’t talking about it yet but we're actually seeing an uptrend in new home prices.  The trend (the 12-month moving average) is still down in existing home prices but if you look at the dotted line, you can see that we’re actually up last month versus the same month a year ago.  

A few other personal observations:  A real estate agent friend operating in the Tampa area can’t believe that there is any negative sentiment towards real estate at all.  She says she is busier today (January of 2011) than she has been since 2006.  On an even more personal note, my mortgage company Mortgage One is experiencing an increase in our Purchase to Refinance ratio.  With rates once again bouncing along at all time lows, we have plenty of refinance business.  But we are definitely seeing more and more purchase loan applications.  A great sign.  Plus our commercial division is extremely busy.  If businesses are seeking financing, what does that tell you?  It tells me that the economy is picking up and that is another push real estate can use.

In conclusion, if you were holding off until the market bottomed before you stepped in to buy real estate, don't hold off any more. It's time to put your money to work.  While there’s always a chance of a “dead cat bounce”, our indications show that the trend is in the process of reversing itself.

By buying real estate now, you'll be buying at the best value in American history. By holding out to buy something just a bit cheaper, you may miss the best real estate deal you will ever get.

So if you're on the fence, get off it.  It’s time to take the plunge.

Fair disclosure - I own a fair amount of real estate and if I can convince enough people that they should buy real estate, it may make my properties worth more.  Here’s hoping!

CitiGroup to Stop Accepting Loans from Mortgage Brokers

CitiGroup announced that they will exit the mortgage broker business.  JP Morgan Chase and Bank of America have already pulled out.

How ironic that the one major bank still working with brokers is a bank that never offered an Option ARM loan.  Wells Fargo originates 1 out of every 4 mortgages in the U.S., has a market cap greater than any other bank in the United States, and never blamed mortgage brokers for the credit crisis.

Possibly it's because Wells Fargo knows that no broker ever devised a loan program, no broker ever approved a loan application and no broker ever packaged a bad loan with a portfolio of good loans.  That was all compliments of the banks and Wall St. yet brokers played the fall guy for the crisis even though they were never anything other than salespeople for the banks.

And dare I say it, even more ironic is the fact that while mortgage brokers are now required to complete an initial 20 hours of training, passing an exam not to mention an additional 8 - 11 hours of continuing education annually, bank loan officers are completely exempt from these requirements.  It seems that eliminating consumer choice in the name of "protection for the common good" is the new American way.

How very sad.

In Football, It's Called "Piling On". In Real Estate, It's Just Madness

Fannie Mae and Freddie Mac Announce New Risk Fees for High FICO Score Borrowers

 

Even though mortgage rates are low, borrowers will find that the cost of obtaining a  mortgage is rising as higher fees hit more borrowers, even those with great credit scores.

Well now... directly from Fannie Mae and Freddie Mac (by way of a USA Today article) we see our friendly government mortgage entities are looking to squeeze more money out of the very best mortgage borrowers. Yes - those unusual folks with credit scores above 740 will now be penalized with a "risk fee" if they want to borrow more than 75% of the appraised value or purchase price (whichever is less) of the home.

So now, in order to NOT get hit with a risk fee of somewhere between  .25% and 1.5%, a mortgage borrower will need to have a 740 "middle" FICO score or higher AND must also put down 25%!

According to Keith Gumbinger of mortgage research firm HSH.com, 88% of all borrowers will have to pay some amount of "risk fee".  Do you think that these fees have anything to do with the fact that out government is essentiall bankrupt and is looking to collect extra fees from wherever they can?

According to Amy Bonitatibus of Fannie Mae, the fees are "intended to more accurately reflect changing risks in the housing market".  Is she saying that more higher credit score borrowers are defaulting on their loans? Or that values are still on a slippery slope with no way of knowing which way they are headed next?

The one thing I will say is this - real estate markets cannot stabilize until we see more lenders lending to the residential buyers out here. Currently, the U.S. mortgage market is a monopoly - it's nearly all government money now. So they can do whatever they want; they have no competition. And unfortunately, at current rates, we won't soon be seeing any new lenders entering the arena. When long term rates finally climb back above 6%, we should start seeing some non-government lending. And for me, that time cannot come soon enough.

Loan Modifications - The New Bank Scam?

Suze Orman explains what happens when your "trial" mortgage modification is rejected for a permanent modification. It ain't pretty.

This Upcoming Economic Reports

With Christmas falling at the end of the week, we may see larger reactions to news stories because of light trading volume due fewer traders on the job.


There will however be 6 new economic reports released in this holiday shortened week.  No earth shattering news is expected but if you are planning to close on mortgage before the new year, I would advise you to lock in your interest rate if you haven't already done so.  Remember, good news for the economy is often bad news for rates so not seeing any indication of extremely bad news says to me that there's a better chance of rates going up slightly during these next 2 weeks than down.


Two of the reports are scheduled for Tuesday. We have the final revision to the 3rd Quarter GDP and November’s Existing Home Sales report.  If there is a strong upward revision, this could hurt rates somewhat but probably nothing dramatic will come of this release.  The Existing Home Sales report is from the National Association of Realtors.  It should not affect rates much.  If it comes in much stronger than expected, then we'll see some pressure on rates.


On Wednesday, we'll see New Home Sales data from the Commerce Dept.  Like the Existing Home Sales report, I don't expect to see rates react very strongly unless the news is much different than what is expected. We'll also get November’s Personal Income and Outlays data.  This gives us a measurement of consumer spending habits.  Consumer spending makes up 2/3's of the economy so if the actual news varies greatly from what is expected, rates could be affected.  Current expectations are for small increases in income and spending.  If the increases are not there, this would help rates.  Also on Wednesday comes the revised University of Michigan Index of Consumer Sentiment for December.  Any variant from the expected reading could affect rates.


On Thursday we'll receive November's Durable Goods Orders. This report provides a measurement of the strength of the manufacturing sector.  Current expectations are for a small increase of 0.5%.  If the report shows a decline, then that would indicate weakness and could positively impact interest rates.


My recommendations would be to lock in your rate if you expect to close before the end of the year otherwise, I would float the rate.

Former Countrywide CEO Requesting a Dismissal of Fraud Suit

Anthony Mozilo was the CEO of Countrywide as it became one of the major players in the subprime mortgage market. The federal government is seeking injunctions and civil penalties against Mozilo, former President David Sambol and former Eric Sieracki. It also wants to ban them from serving as officers or directors of any public companies.

The Wall Street Journal reported that Mozilo's attorneys filed a motion to dismiss the suit for inaccuracies and omissions in the federal suit.

http://www.google.com/hostednews/ap/article/ALeqM5j9HbWqnjWztmI2vAj2S_Wv0mMUBgD9AH95OG0

I'm no fan of Mozilo but honestly, isn't this process becoming just a bit ridiculous? Our government adds layers upon layers of laws and regulations only to allow people and companies to take advantage of consumers anyway. Everything is fine as long as the bubble keeps inflating. Then, when the bubble bursts, the government goes out on a witch hunt to finf those that took the most profits and looks to burn them at the stake.

There's so much money being spent to draft up all these laws. Why not put some some of that taxpayer money into policing the laws already passed? Instead, they let things go as long as people are making money. Then, when the proverbial S**T hits the fan, then they spring into action. Of course, by then, millions have lost their life savings so somebody's head needs to roll, right?

The One Tax Strategy You Must Implement

We all know that most of the government stimulus money handed out to banks was freshly printed, right? The government has been printing money as if there was no tomorrow. Have you given any thought to how that will affect your your financial future? One result of all this "stimulus" money will be that we can bet on higher tax rates in the very near future.

If you do anything to help secure your future, you must protect yourself from increasing tax rates that are coming. Fortunately, there is a wonderful opportunity just ahead that will dramatically assist you in protected your hard earned assets.

According to the public awareness firm the Peterson Foundation, the government's debt was $184,000 per person last year - 2008. Just total up your family members and times that by $184,000 and you will see your family's share of the government's debt. A family of four has to cover $483,000 in government debt.

The debt breaks down like this:

Medicare: $36,300,000,000,000 (that's $36.3 Trillion!)

Social Security: $6,600,000,000,000

Public held debt, civilian and military retirement benefits and other liabilities and miscellaneous expenditures: $13,500,000,000,000

The total comes to over $56 Trilllion dollars which breaks down to $184,000 for every person in the country! These figures come from the U.S. Treasury itself.

So what does it mean?

It means the government will need to raise this money in the future. How? By taxing us. How else can they cover it? But here's the problem with the way taxes get paid...did you know that 43% of all those filing returns pay no taxes at all? It's true.

So who pays taxes? The top 25% of taxpayers - and that's you if you're earning $66,000 or more (in 2007). The top 25% paid 87% of the taxes collected in this country. So can we agree that the top 25% of all taxpayers will be paying this enormous debt?

And that's the current deficit. Ever seen that large billboard in Manhattan that ticks off the growing deficit? It shows the government debt piling up... minute by minute, second by second. The national debt grows by a few billion dollars every day! Sickening.

But there is something you can do to protect your family's finances... and that of your heirs, too. Would you like to know how?

Well, first let me say that the government actually wants you to do this... even though it will hurt them in the future. But they need money NOW! So they changed some rules for 2010 and you simply must take advantage of this rule change. Who knows how long it will last?

If you weren't aware - a Roth IRA grows tax free. It does this because you must invest after tax dollars into one. Then it grows tax-free. Compare this to a traditional IRA which allows you to take a tax deduction in the year that you contribute to one. But on a Roth, you've already paid taxes on that money so your future withdrawals, including any gains are tax-free!

Originally, IRA's were thought to be great because you could get a tax deduction now, and in the future, you'll be in a lower tax bracket so the withdrawals will be taxed at a lower rate. But that thinking is flawed. Even though you may feel that we are taxed to the hilt, in fact, today's tax brackets are historically very low. With government policies of today we can pretty much bet on higher tax brackets in the future.

So here's what you need to do. You must convert your traditional IRA's into Roth IRA's. The reason more people don't do this is because you will have to pay taxes on the amount converted. So there is an additional tax liability. But there's good news.

The government will allow you to spread any tax liability on a converted IRA over a three year period. As an example, if you convert $50,000 to a Roth IRA and that creates a $15,000 tax liability, you'll be allowed to pay $5,000 per year over the next 3 years. But now, that money will grow in your Roth IRA tax-free. You'll be able to withdraw it tax-free. And you'll be able to withdraw it without all those traditional IRA rules, like having to begin withdrawing at a certain age, etc.

So when the government raises taxes, your retirement savings will be safe. You'll even be able to pass your Roth IRA to your children and grandchildren tax-free.

This rule kicks in for 2010 so speak to your tax advisor. I am sure he will agree that this is a great move for your future.

So, just to recap, convert your traditional IRA to a Roth IRA. Pay the taxes over the next three years at today's lower tax rates. Then, watch your Roth grow tax-free. Wait as long as you like before withdrawing from your Roth. Pass it on to your heirs if possible... it will continue to grow tax-free. Leave a legacy!

Who Is Watching Where the Money Goes?

This is really ugly. It's a couple of months old but if you want to see a snippet of how our government is handling all the bailout money, watch this video.

Taylor, Bean & Whitaker Ceases Operations

After many years of providing mortgages through it's mortgage broker network, Taylor, Bean and Whitaker closes shop after the Feds barred the company from originating any new FHA loans. Ginnie Mae also terminated the company's ability to issue mortgage-backed securities.

With no FHA or conventional financing to offer, the company had no alternative but to close up shop. The management sent emails to everyone expressing their disappointment that a less drastic option was unavailable. Realize that we're not talking about a small shop - TBW had over 2,000 employees.

Federal authorities "raided" the company's main offices in Ocala, Florida on August 3, 2009. Did you notice the quotes around "raided"? It's such a made for media term - it makes you think of the days of Elliot Ness and Al Capone. But the feds performed a site visit examination after TBW failed to submit a required financial report. It was also stated that the company did not disclose certain irregular transactions that subsequently "raised concerns of fraud".

The company was incorporated in 1982 as a small town retail mortgage firm. But in the past decade or so, TBW had grown substantially to become one of the top mortgage wholesalers in the country.

What this closure means is another stake in the heart of the mortgage brokerage industry. Look - I'm not saying that Taylor Bean was completely above reproach - I personally have never had any direct dealings with the firm. But through my many years in this industry, I had never heard a disparaging remark about them. As far as I know, this company was one of the better mortgage lenders out there. And now they are gone. And now there is one less competitor, one less company for a broker to choose from.

Where is the mortgage industry headed? Well, we are pretty much there already. Mortgage borrowers can choose from Government loans or from a small sprinkling of small local lenders that still portfolio their own loans. Just try to find a broker these days - there are less and less every day. I hope you can see that YOUR CHOICES ARE BEING ELIMINATED! Now you may choose a fixed rate - oh, you can choose 30 or 20 or even 15 years or one of a couple of adjustable programs left - 5, 7 or 10 year fixed rate products that convert to floating rates after the fixed rate portion ends. That's about it! And this is good for consumers?

Will My Mortgage Loan Modification Hurt My Credit Score?

For the majority of people looking to obtain a loan modification, their credit score is the least of their worries. Already behind on their mortgage payments, they know their score is already trashed.

But much has been said about lenders modifying mortgages for borrowers that are not currently delinquent. Homeowners have been requesting modifications after salary pay-cuts, pregnancies, loss of jobs, and other valid reasons. Some of these modifications are being granted to people with excellent credit. Their high scores are important to them.

So if you have an excellent FICO score and ask for a modification, will it hurt your score? You may be in for a rude awakening... READ MORE