Still, that wanting to know has never left me and so I first attracted into my life United First Financial® whose award winning, flagship product, the Money Merge Account® system has, in just three years helped Americans pay back over $3,000,000 of principal debt. And now, the next part of the complete financial picture has also come into my life, the Banker’s Table® B.O.S.S. Banker’s Optimal System of Security, which recognizes four pillars in a person’s financial life.

1. Debt Elimination – Debt is the silent killer of your future hopes and dreams.

2. Wealth Building – Rule #1 of wealth building is to never lose the principal value of your investment. Rule #2 is never violate rule #1.

3. Retirement Planning – Retirement income can and will be predictable with UFirst Alliance.

4. Legacy Planning – Those you love the most are the most cherished asset of all.

____________________________________________________________

June 4th and 5th, Washington DC, Holiday Inn National Airport Hotel was a historic day. What happened?

It was the first ever Certified Legacy Advisor Training for UFirst agents to learn about the joining forces of The Bankers Table, B.O.S.S. (Bankers Optimal System of Security) system with the United First Financial Money Merge Account software Coaching and Education system to create a complete, comprehensive solution to today’s financial dilemma and an entire new way of banking for the American people.

There are always four players when it comes to banks functionality. First we must have a Saver, someone who wants to deposit some money into the bank. Next there is a Borrower, someone who wants to use the Savers money and is willing to pay for that use. Next we have to have the Banker who takes care of all the transactions and then of course the Bank Owner, the one who is making all the profits.

Well, how would you like to sit in the seat of all four players at the Banker’s Table yourself. How would you like to be the Saver, the Borrower, the Banker and your own bank owner?

By mimicking proven banking strategies for the express purpose of providing our individual families with ownership, control, security and freedom is a cherished safe harbor in these turbulent times.

We contend that the combination of the Money Merge Account system and B.O.S.S. create the most prolific and stable wealth accumulation tool available.

“Suppose there was a financial instrument with a track record stretching back 1,400 years, that was so solid it could survive the Great Depression intact; that earned untaxed interest at a competitive rate; that could be borrowed against at will regardless of credit conditions; and that could be used by individuals as well as major corporations and banks as a safe harbor during economic turmoil?

You’d call it a financial banker for scary times, and you’d be talking about mutual whole insurance. This is not the life insurance that only pays when you die…..”

- John E. Girouard,  Forbes.com 2/19/09

Choose to participate in this revolutionary change of personal and business economics and join us at the Banker’s Table!

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www.LocalAdExplosion.com

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If you would like more information or to find out if a Reverse Mortgage is right for you fill out the “How Can I Help You” form to the right –>

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Fortunately, Fair Isaac and Vantage Score have issued some public information about how they calculate credit scores. Let’s take a look at the various factors:

The five categories that determine your score, in order of importance, are:
35% Payment History
30% Amounts Owed
15% Length of Credit History
10% New Credit- (Average Age of Accounts)
10% Types of Credit (Mix Of Credit, Credit Cards, Installment Accts, Mortgage)

Payment History:
The top rated factor for both models is payment history. This is because lenders want to know a person’s payment history–past and present. This category can be broken down into three subcategories:
• Recency – This is the last time a payment was late. The more time that passes the better.
• Frequency – One late payment looks a heck of a lot better than a dozen.
• Severity – The “Hierarchy of madness” so to speak, rest on the logic that a payment 30 days late is not as serious as a payment 60 or 120-days late. Collections, tax liens and bankruptcies are credit score killers.

How much is owed:
The score looks at the total amount owed on all accounts as well as how much you owe on different types of accounts (mortgage, auto, etc). Using a higher percentage of the credit limits will worry lenders and hurt the credit score. People who max out their limits have a much greater risk of default.

Utilization:
When it comes to revolving debt-credit cards, the formula looks at the difference between the high limit and balances. For Example, let’s say your customer has a MasterCard with a credit limit of $10,000 and they have spent $2,000 of it. This is a 20% utilization ratio. The lower the ratio, the higher the credit score. So, if your client’s are looking for a quick credit score boost, have them pay down any accounts they can. Don’t expect this to be instantaneous as it can take up to 45 days for the credit bureaus to update reports.
One more important tidbit, CLOSED ACCOUNTS do not help and can hurt if there is a balance remaining. Therefore, tell clients not to close accounts.

Length of credit history / Depth of credit:
This is less important than the previous factors, but it still matters. It considers (1) the age of the oldest account and (2) the average age of all your accounts. It is possible to have a good score with a short history, but typically the longer the better. Young people, students, and others can still have high credit scores as long as the other factors are positive. If a person is new to credit then there is little they can do to improve a credit score. The only solution is to open an account and be patient.

New Credit / Recent Credit:
New credit is not always a bad thing. However, opening new accounts can hurt a credit score, particularly if a consumer applies for lots of credit in a short time and doesn’t have a long credit history. The score factors in the following:
• How many accounts the consumer applied for recently
• How many new accounts the consumer has opened
• How much time has passed since the consumer applied for credit
• How much time has passed since the consumer opened an account

The model looks for “rate shopping.” Shopping for a mortgage or an auto loan may cause multiple lenders to request your credit report many times each, even though a person is only looking for one loan. Auto dealers are notorious for running 3 to15 credit reports. This is called shot gunning the credit. Luckily, to compensate for this, the score counts multiple inquiries in any 14-day period as just one inquiry.

For most people, a credit inquiry will take less than five points off their score. However, inquiries can have a greater impact if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk. According to MyFico.com, people with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports.

Types of credit you use / depth of credit:
Both models want to see a healthy mix of credit, but they are vague on what this means. They recommend you have a balance of both revolving debts like credit cards and installment loans like auto loans or a mortgage.

For more information or to request help getting YOU out of Credit Prison, visit www.CreditRestorePros.com

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Get FREE Information! Name: Email: Company: Address: City: State: Zip Code: Phone: Current Advertising Methods: Are you satisfied with the results?: Monthly Advertising Budget:

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1. Loan Modification

2. Deed in lieu of Foreclosure

3. Short Sale Negotiations

1. Loan Modification

With the increase of interest rates on home loans, many homeowners with adjustable rate loans are faced with mortgage payments they can no longer afford.

Our job is to convince the current lender that it is better to lower the homeowner’s payment by lowering the interest rate or payment rate by creating a payment plan the borrower can afford, rather than to take the home with a foreclosure sale and lose money on the re-sale. Keep in mind, lenders lose money on bank owned properties as it will sell for less than market value, and they must pay a commission to a Realtor; and closing costs plus the cost of holding the property while they wait for a sale in a market that is depreciating.

We need to prove to the lender what the maximum payment is that borrower can afford by constructing a financial plan for the homeowner that the lender will approve.

Also, as the homeowner is often late with their payments and in foreclosure or soon to be in foreclosure, we need to ask the lender to take the delinquent payments and either forgive them entirely or place them on the back of the loan.

A rate reduction in most cases is the only possibility for a homeowner to retain their home –our fee is a risk that each homeowner must weight. Note: Our success rate on a workout program with a rate reduction is 98%.

Note: If we can prove you owe more that the value of the property and there is a second loan, we can convince that second lender to take a major reduction –of 50% to 80% — off the balance of the loan.

2. Deed in Lieu of Foreclosure

Under many conditions lenders will accept the property back from the borrower as full payment in order to save the time and expense of going through the foreclosure process.

Our job is to convince the lender it’s in their best interest to accept the property as payment in full.

This is not a simple plan as we must provide the lender with a complex detailed analysis of current value of the property –and future value. Then we must prove that the borrower cannot afford to make payment or sell the home any time soon or at all.

Note: a deed in lieu will also prevent the lender from filing a 1099 on their loss which is regular income to the borrower.

3. Short Sale Negotiations

We realize there is a large demand for this service and doesn’t seem to be very many companies that know what a Short Sale is, much less how to work with lenders to negotiate a Short Sale. Here is what we know:

· There is a right way to put together a Short Sale offer so a lender can justify settling for your offer. But most offers are badly done and leave a lot of cash on the lender’s table.

· While most Short Sales are on residential properties, they can be, and are, completed on commercial properties that are also in troubled areas.

Why would a lender allow the property to be sold and accept a loan payoff that is far less than the amount of the home loan and not come after the homeowner for the losses? Simple: to save time and money.

Here is what we do –we ask the investor to complete a very detailed list of information on the property and area, we review that information with the investor and create a plan to purchase.

We make a proposal to the lender using what we call the poison pill approach,

“Keep in mind it’s a lot less work and risk for the lender to take our offer.” The Department Manager of the lender will use our proposal to justify the sale price and protect his job.

For more information, visit www.AForeclosurePro.com

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And once you have had a bad credit rating it is almost impossible to avoid detection.
A network of credit reporting agencies keeps track of every person who buys on credit.
Each time you apply for credit, the prospective lender will check your credit with at least one of these agencies.

But Did You Know…both Employers and Insurance companies also make
determinations about you based on your credit score? That means that you could be paying higher insurance rates, or be passed over for that better job or promotion because your credit score is too low. We estimate the average person with below excellent credit scores could be penalized $12,924.00 or more each year for low credit scores! (See our report “Keeping Bad Credit Costs More Than Repairing It “ for more info)

It is easy to see how low credit scores have the ability to hold a family down, and keep
you from getting ahead.

How Do Credit Scores Work? (The Basics)
A Credit Score is a number assigned to a consumer that, based on 5 principal
determining factors, statistically determines the probability that you will become 90 days late or more on any loan obligation over the next 2 years.

- The FICO score is the most widely used scoring system, and is what most mortgage
lenders use.
- There are three (3) major credit bureaus in the U.S. who have business relationships
with thousands of creditors across the country, and that is why you may have three
"scores" that are being reviewed. Those creditors will "report" the information they have
about you to these credit bureaus at various times. They do not have to report their
information to the bureaus, and some creditors only report to one or two of the bureaus.

Therefore, it is very hard to increase your credit score if you don’t know to whom
your creditors are reporting.

- A credit score is calculated by taking all of the various information about your credit
profile and running that data through a computer model, where points are added and
subtracted based on a "perfect" credit model. (This "model" is proprietary information to the FICO organization) Once the calculation is complete, out pops a credit score for
that bureaus’ credit file on you.
- When we are referring to your credit score in the mortgage business, we are talking
about the middle score out of the three (not an average, but the actual score that is not
the highest or lowest).
- Credit scores are affected by almost everything about your credit data, ranging from
the length of time you have had an account, to the ratio of the balance available vs. the
balance owed. And of course there is the obvious negative impact of any derogatory
history.

The Good News – Rebuilding Your Credit

Millions of dollars are spent to convince you that nothing can be done about your bad credit. But it’s Not True!

If you are one of the millions of Americans who have had credit problems, do not despair. Even with negative items in your credit file, such as collections, late payments, liens, bankruptcies, or foreclosures, we can help! There is no kind of negative item that we do not regularly see removed from our members credit reports.

First Financial Freedom Foundation offers credit repair services through an affiliated attorney network. Everyone knows that under the law, if you are accused of anything, the burden of proof lies with your accuser. In other words, if the credit bureaus are going to promote and sell information about you that can cause you economic hardship, they must back it up to the full letter of the law. An Attorney enforces your consumer rights.

Congress has provided consumers the right to challenge information that is deemed to be inaccurate or information that is not properly validated under the law must be removed regardless as to whether it is accurate or not. Regardless of the accuracy, credit bureaus are often unwilling to invest the resources necessary or unable to get the credit grantor to invest the resources necessary to properly verify the disputed item.
Oftentimes, it becomes a matter of economics. If the case is presented properly, it is
often more difficult and expensive for the credit bureaus to substantiate the item
than to simply remove it.

The law requires more than a form letter to verify that an item is accurate. If the credit
bureau confirms an item on your report, the assigned attorney will “ratchet up” the
intensity of our challenge and represent it. This forces the bureau to invest additional
time and expense to conduct the new investigation.

For more information, visit our website at www.CreditRestorePros.com

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Simply put, Home Sellers should repair their credit before selling a home and buying a home. It’s easy to get out of focus when you concentrate on your current home’s selling price. Points, prepayment penalties and higher interest charges on your new home can easily erase all the profits you gained in the sale.”

There is a difference between strong credit and the credit needed to obtain a mortgage. Indeed, you can buy real estate with poor credit but you’ll pay higher, non-prime interest rates. Consider: a mortgage loan of $150,000, 30-year, fixed rate mortgage, interest rate of about 5.72% will cost approximately $870 monthly. With poor credit, the interest rate could easily exceed 9% costing over $1,200 in monthly mortgage payments. That means that, over the course of the mortgage, you could pay the price of a second home in mortgage payments simply because you didn’t take the time to repair your credit.

To review your credit rating, check www.annualcreditreport.com

To repair or improve your credit rating, visit www.CreditRestorePros.com

When buying a home or selling a home good credit can be a big difference in mortgage payments which could help you buy the home of your dreams or purchase an additional property, so do what you can to have the bets possible credit rating.

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Here is a great article and video on Reverse mortgages, from MSNBC.

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How did Americans progress from being the world’s economic leader to becoming the world’s economic anchor?

Friends and clients keep asking me, “What happened? Three years ago our economy was booming and our home values were rising at an intoxicatingly dizzy rate.  Last October, the US stock market was making historic highs. Today, home prices are dropping like the temperature in December, our stock market has lost over 40% of its value and we are being told that world economies are on the brink of a severe recession. How could things go so terribly wrong so very quickly?”

It is a hard question to answer, but I was sitting at ground zero originating mortgages while it was happening. I saw the beginnings and I believe I understand the beginnings. I can answer some of the questions about the latest developments provided the reader accepts my disclaimer that much of what is to follow is a combination of fact and personal opinion.  Robert Greenleaf said, “Only speak when what you are about to say will improve upon the silence.”

My desire is that these comments will add knowledge and insight to what the reader is seeing in the media and, by so doing, will improve upon the silence.

ONCE UPON A TIME

In the beginning, mortgage applicants were asked to answer two questions:

Question One:  Do you have the ability to repay the loan?

Question Two: Do you have the willingness to repay the loan?

An affirmative answer to the first question came from the verification of sufficient employment, income and assets to suggest that the ability to repay was present.

The answer to the second question was arrived at by examining the borrower’s credit history to determine whether or not he or she had repaid other debts. It was that simple.

Lending guidelines began to loosen during the mid 90’s. Loan programs sprang up that were designed to increase homeownership among Americans of average (and below average) economic means. The most egregious of these programs were referred to as subprime loans. The subprime loans were joined by loans sanctioned by the Community Reinvestment Act (CRA). Finally, along came the “liar loans” to complete a package that has led us to our presently dire circumstances.

SUBPRIME LOANS

Subprime loans were granted to people who could not give acceptable answers to Questions One and Two, as detailed above. Typically, such borrowers had less than perfect credit, sketchy job histories or little or no down payments. These loans carried a higher interest rate than “conforming loans”.  They also contained terms that allowed the rates to rise dramatically in years subsequent to the purchase date. Prepayment penalties made it difficult to “refinance out of” such loans. Subprime loans were land mines granted to people who had already demonstrated an inability (by their employment, income, asset and credit report status) to handle a mortgage. In the early days, these loans were made by banks other than Fannie Mae or Freddie Mac. The initial profitability of these loans eventually led Fannie and Freddie to offer their own versions of subprime; usually at less onerous conditions than the private versions.

The subprime loans were a pimple on an elephant’s back when compared to the massive number of mortgages originated. In a vacuum, their failure to perform might have had little effect on the overall economy. As we shall see, they did not exist in a vacuum.

COMMUNITY REINVESTMENT ACT LOANS

Congress passed the Community Reinvestment Act (CRA) in 1977.  It has been revised many times over the years since the initial passage. The primary purpose was to encourage lenders to increase access to mortgages for borrowers who lived in certain low to moderate-income areas that were deemed (by Congress) as not being serviced sufficiently. Lenders, at the urging of Fannie and Freddie, who were encouraged by Congress in the mid to late 90’s, began making mortgage money available to such borrowers at very liberal terms under very loose underwriting guidelines. Liberalizing the guidelines was the only way to make such funding available to the targeted areas because the socioeconomic makeup of the areas left most residents unable to qualify for mortgages under “conforming” guidelines; i.e., Questions One and Two, as noted above.

A study by the Joint Center for Housing Studies at Harvard University found that “data for 1993-2000 show home purchase lending to low-income, moderate-income neighborhoods grew by 94%–more than any other category.”

Like subprime loans, these loans were a very miniscule number when related to total mortgage financing. Like subprime loans, their failure to perform might not have had a significant effect on the overall economy if they had been operating in a vacuum. Like subprime loans, they were not operating in a vacuum.

LIAR LOANS

The initial profitability of loans with these relaxed standards led to more and more liberal lending guidelines. Eventually, reduced documentation mortgages became very popular. As an example, a “reduced-doc” loan might have excused the need for tax returns for a borrower who wanted to finance a house before he or she had filed their return. Such a borrower with excellent credit would obtain financing with a “stated income” loan. The loan carried a slight increase in the interest rate to compensate the lender for the increased risk of “trusting the borrower”. These loans eventually grew into “stated income/stated asset” or “no income/stated asset” or, in extreme cases, “no doc” loans. In theory, there was no problem with trusting the borrower because the guidelines called for excellent credit and a reasonable down payment. It was theorized that such a borrower would not lie about his or her income and assets. Theory did not hold up in the real world.

Incompetent and/or unethical lenders began to use these reduced doc loans to qualify people who could not pass Basic Question Number One; i.e., “can you afford to repay the loan?” Lenders, with the complicity of their borrowers (and borrowers, with the complicity of their lenders) began to lie about income and assets as a means of qualifying buyers for homes. Investors, mesmerized by the growing value of houses, used these same liar loans to qualify for multiple investment properties, their intentions being to flip the houses for quick profits. Buyers lined up at builders’ show rooms to place deposits on homes they never planned to occupy.

Can it be any mystery that these loans have not performed well?

Borrowers used these loans to purchase homes they could not afford. Investors used these loans to take dramatic risks in the housing market. With regard to the investors, the flaw was that investors do not get rewarded for taking risk. Investors get rewarded for buying cheap assets. Homes were certainly not cheap assets in the summer of 2005. Historically, investors who shovel money into ever-more risky assets have not been rewarded; they have been punished. Such has been the case with the investors who bought homes that they could not afford to hold.
The reader should understand that the lending guidelines were not flawed. The flaw was with unethical behavior and insufficient controls to ferret out the liars. The individual borrowers and their loan officers both committed loan fraud each time they originated such a loan by lying about the borrower’s qualifications. These lenders and borrowers could, still today, be prosecuted and fined or imprisoned. They were knowingly obtaining money in a fraudulent manner. These loans were criminal acts and they numbered in the millions. IT SHOULD BE POINTED OUT THAT NOT EVERY REDUCED DOC-LOAN WAS LOAN FRAUD, NOR SHOULD EVERY CLIENT OR EVERY LOAN ORIGINATOR BE HELD ACCOUNTABLE FOR THE NON-PERFORMANCE OF SUCH LOANS. REDUCED DOC LOANS WERE EXCELLENT LOANS AND HAVE PERFORMED WELL IN CASES WHERE THE GUIDELINES WERE FOLLOWED WITH HONESTY AND INTEGRITY. ALMOST EVERY “LIAR LOAN” IS AND WAS A “REDUCED DOC” LOAN, BUT NOT EVERY REDUCED DOC LOAN WAS OR IS A LIAR LOAN.

The negative impact of non-performing liar loans has been compounded by the fact that many of the borrowers returned every two or three years and used the increased equity in their homes to secure another liar loan in order to pay off credit card debt. Because their actual incomes were never truly enough to qualify for their total liabilities, they would have to buy groceries, gasoline, Christmas presents, etc., with credit cards, using their actual paychecks to struggle with the mortgage payment. Some of these purchase money loans made as early as 2000 had been refinanced at least twice by the time property values topped out in 2006, thereby tripling the initial exposure.

AND THE HOUSE OF CARDS CAME TUMBLING…

The issuance of subprime loans, CRA loans, liar loans and other lesser mistakes has caused a crash because of their cumulative effects. These three loan categories combined to create massive artificial demand from people who, without them, might never have been able to buy a home or, more likely, would have only been able to buy a less-expensive home. This demand was largely responsible for the insane increase in home values experienced from 2002 to 2006. Home values dramatically exceeded long term growth lines.

A key feature of subprime loans was their adjustment factors that would kick in after two years. Subprime borrowers would wake up one morning and find that their interest rate had gone from 7% to 11%, 12% or 13%. Faced with such a dramatic increase in monthly housing expense, the borrower would be faced with foreclosure. In the early days, this was not a problem because their numbers were miniscule. However, after several years of issuing subprime mortgage debt, the cumulative effect of these foreclosures began to weigh heavily on home prices. In many cases, entire neighborhoods had been financed with subprime mortgages.

As the subprime loans began to cave in, so did the CRA loans. In both cases, these loans had been made to people who could not reasonably answer Questions One and Two of the loan originator’s bible.  The impact of their failures put a top on home values.

Suddenly, the much larger number of borrowers who had liar loans began to experience trouble. The speculators who had purchased investment properties with the intention of quickly flipping them for a profit were stuck. Many of the investors had used reduced documentation loans to acquire the properties. They never meant to hold the properties for longer than a few months. They had no real reserves to carry the properties and they could not demand enough rent to offset the carrying costs. They could not sell the homes because values had topped out. They could not service the debt because they never really qualified.

The owners of primary residences who had secured their homes with fraudulent statements of income and assets were struggling to make the payments on their mortgages, automobile notes and credit cards. Suddenly, with no increase in equity, these homeowners could not stroll down to the bank for a new refinance that would “pay off” their credit card debt and give them new life. Suddenly, they found themselves unable to service their personal debt. They owed more on their homes than the homes were worth, so they could not refinance and they could not sell.

The failure of subprime and CRA borrowers to perform was only the catalyst for the current crisis. They put a top on the run-up in home values making it more difficult for investors and other troubled borrowers to service the debt or stave off the day of reckoning. The market imploded inwardly as the relatively small numbers of subprime and CRA problems pressured the far greater number of liar loan borrowers. Suddenly, home values were crashing and no one was safe, not even the “fully documented” buyer/borrowers who had adequately answered Questions One and Two.

COMPOUNDING THE PROBLEM-WHY IT IS GLOBAL

One reason that loan guidelines were relaxed and ethical behavior became so abhorrent was the lack of liability at all stages of the mortgage process. My mortgage company sells the mortgages that we originate.  Once we sell them, we are “off the hook” for their performance unless we are found to have committed some form of fraud. We sell the mortgages to larger mortgage companies or banks. These entities may continue to service the loans (send out statements and collect payments) but they sell the paper to Fannie, Freddie or an investment banker. They are then “off the hook”. The investment banker (or Fannie and Freddie) then packages the cumulative loans and sells them as “collateralized securities”. Now, even they are “off the hook”, theoretically. (Well, not exactly, as we shall see.) A better system of responsibility would have greatly encouraged the professionals to be more ethical and demanding in their efforts to secure acceptable answers to Questions One and Two. This issue, incidentally, has not yet been addressed. More regulation is not the answer. What is needed is more liability, at every stage of loan origination, for the future performance of the borrower. It is impossible to regulate morality. Extended, long-term payouts based on performance might induce a much higher degree of ethics and morality than a new stack of regulations.

The reason the problem has become so significant, in a global sense, is that these collateralized securities were significantly leveraged and often over-rated by national bond rating agencies. Investment bankers found that they could sell the securities with better returns by selling insurance on the bonds. Only, they did not exactly sell insurance.

They sold complex instruments called “credit default swaps” that supposedly served as insurance in case the mortgage bonds did not perform as expected (which they most certainly did not). These swaps were not called insurance (even though that was their intent), so they did not have to be regulated as insurance. As a result, they were not regulated, at all. This meant that the sellers of such swaps were not required to keep suitable “loss reserves”.

The bankers and insurance companies sold these highly leveraged mortgage backed securities using swaps as inducements to their customers. They did so with the assumption that home prices never really go down, so the bankers incorrectly assessed their risk. They were very wrong in their assumptions regarding risk. Home prices did go down, just like any other investment. The big banks, mortgage companies and insurance companies have not been able to “make good” on the bonds because they did not keep suitable reserves to cover losses.  Consequently, the US Treasury (actually, you and I) has to bail them out.

We can all play the blame game about who is at fault. None of that will change the circumstances and it is a little late to go back and perform quality control checks on ten years worth of high-risk loans.

WHY BAIL THEM OUT?

The ill-fated mortgage securities were sold to huge investors such as college endowment funds, retirement funds, corporate pension funds, foreign central banks, Russian billionaires, Saudi oil ministers and the Norwegian fishing villages made famous by the widely circulated stick figure explanation of the mortgage crisis. As you may imagine, the holders of these bonds are extremely displeased by the losses they have incurred as a result of buying securities that, in many cases, were triple A rated by our rating agencies and were covered by these swap arrangements. These angry bondholders are using whatever threatening language is available to them (no more oil, no more dollar reinvestment, higher tariffs, etc.) if the US does not stop the bleeding.

As a country, we must act quickly to recover lost credibility.  This is why Congress passed the bailout bill. The international community is withholding dollar investments and exacerbating an already critical circumstance with regard to the availability of credit. Without credit, economic activity stops. The bailout is an attempt to restart the wheels of commerce, wheels that run on credit.

Why give the money to the very Wall Street investment firms that are often credited with creating the problem? Remember that the mortgage-backed securities and swaps that have leveraged the housing problem into a crisis are very, very complex instruments. The very people who wrote the instruments are the only ones with the expertise to put the bailout money in proper position to shore up the damage. It is not as if Congress could give this money to a group of Washington bureaucrats and ask them to fix the problem.

Washington bureaucrats do not have the expertise or the trading facilities to fix something they did not create and do not understand. So, the foxes are being supplied with taxpayer money and being asked to repair the henhouse.

WILL WE LIVE HAPPILY EVER AFTER?

As a country, we have recovered from the Great Depression, the stock market collapse of 1987, the savings and loan failure, and several lesser calamities.  No one, not George Bush, nor the presidential candidates, not the Chairman of the Federal Reserve, not the Treasury Secretary, or the FDIC Chief and certainly not me, knows how or where this will end. Each disaster leaves us with a better idea of how to resolve the next one. In the current circumstance, I am hopeful that the securities being backed by taxpayer money will eventually become sufficiently valued to repay you and me, the taxpayers. I am confident that we will survive this current crisis.  It is not always the strongest or most intelligent that survives, but the one who is willing to adapt. I believe we, as a country, are adapting.

I believe our current economic crisis, and ones that preceded it, are like the forest fires that nature sends from time to time. The fire is terrifyingly hot and creates panic and devastation. But the aftermath is renewed life. Dead trees and underbrush are gone. New plants emerge where shadows and weeds existed. Animals return in new and healthier numbers. Life is renewed.

Our mortgage lending practices, starting with loan originators and buyers who ignored ethics and the laws of risk/reward at the bottom and extending to the bankers who sold questionable securities at the top, created a balloon of unsustainable home value, akin to the dead spots in the forest. This economic abnormality had to be corrected. The mortgage crisis is the fire that will eventually, after significant pain, put the economy back on firm ground.

WHEN WILL HOUSING AND THE GENERAL ECONOMY RECOVER?

Again, no one knows the timetable. We must adapt and move forward to create a recovery.

Residential housing has never been meant as a storehouse of value. Houses are built to store families, lives and dreams. The fact that home values almost always rise over the long term is a bonus to a home’s inherent function as a place of shelter, not a guarantee or a promise. Regardless of the anticipation of gain or the likelihood of gain, it is a home’s function as a shelter and a “living center” that is the reason people dream of home ownership. In today’s world, there are wonderful values in the housing market and the price bar for home ownership is returning to affordability. Americans of modest means are once again going to be able to own their own place.

There is an abundance of mortgage money available regardless of what you have heard about the credit crunch. People who can answer Questions One and Two in a satisfactory manner can still obtain mortgage money at reasonable rates.

Housing problems have always recovered from the bottom up. Housing markets do not start to recover with the sale of high-end, lakefront homes. They recover when Jim buys his first home, allowing Bob and his growing family to move up to a larger, more spacious home, thereby enabling Sam and Diane to buy their lakefront mansion.

This economic crisis has already been as terrifying as the raging forest fire. While it may be under control, the fire is not “out”. It will take some time for the economy to recover from this blow. The smart people will tighten their belts for the short term, purchase undervalued assets for the long term and look back on this as an opportunity. It is said that when God closes a door He opens a window. Adapt. Look for the window.

Steve Baker
Executive Director
First Financial Freedom Foundation
(615) 338-5956
sbaker@AFinancialPro.com
www.AFinancialPro.com

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NEW YORK – A “credit recession” sparked by the U.S. housing market downturn and excesses in structured finance may last more than two years, and the financial sector will undergo “massive consolidation,” leading Wall Street strategists said on Wednesday.

The fallout from deteriorating subprime mortgages and the broader housing and credit crisis will eventually lead to a healthier market, but not until after a prolonged purging process, Jack Malvey, Lehman Brothers Holdings Inc’s chief global fixed-income strategist, said in New York.

“We’re going through a tough spell with regard to credit,” Malvey said at a Securities Industry and Financial Markets Association conference.

The “subprime debacle” due to years of excess and easy credit will be followed by years of tight credit, Malvey said.

Malvey spoke a day after his company’s stock plunged to close at nearly a five-year low on concern that Wall Street’s smallest surviving major brokerage may need to raise more capital. On Wednesday, the Wall Street Journal reported that Lehman is seeking capital overseas.

Malvey said global diversification will be a “good remedy” for investors seeking to offset losses from the downturn. “This is the biggest blowup that we’ve had,” the strategist said.

Financial shares have been among the worst performers this year.

Financial earnings have suffered due to exposure to so-called structured finance debt and collateralized debt obligations, repackaged bonds whose underlying securities may be based on assets such as risky subprime mortgages.

Investment manager Loomis Sayles, one of the biggest U.S. bond fund managers, has been buying Lehman debt over the past several days, its vice chairman said on Wednesday.

“The credit is good at Lehman,” said Dan Fuss, vice chairman of Boston-based Loomis Sayles, which oversees more than $100 billion in fixed-income securities. Lehman’s common shares, which fell 18 percent over three days, are “dirt cheap,” Fuss said.

‘Massive consolidation’
Richard Bernstein, chief investment strategist at Merrill Lynch & Co Inc, said that in the last market cycle downturn, about 25 percent of financial firms — including brokers, banks and asset managers — “went away,” he said, referring to bankruptcies or mergers and acquisitions.

Only 7.0 percent of financial firms have failed or been acquired so far in this crisis, Bernstein said.

Like Lehman, Merrill’s earnings have suffered due to structured finance.

Bernstein also faulted U.S. government proposals to broadly modify U.S. mortgages, which may create a “moral hazard” that encourages future risky behavior, he said.

“Washington is misguided in focusing on mortgages,” Bernstein said. The federal government should focus on “job creation and people keeping their jobs,” Bernstein said. “That is the key to rectifying this situation.”

Five-year credit default swaps on Lehman Brothers widened by about 17 basis points to 275 basis points, or $275,000 a year for five years to protect $10 million of debt, according to data from Phoenix Partners Group.

Lehman Brothers’ bond spreads widened about 10 basis points overall, according to traders.

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Put an end to your credit problems… it costs MORE to keep bad credit than to RESTORE YOUR CREDIT STANDING. Why would you want to pay MORE to have so much LESS???

Automobile Financing: If you are financing a car and have bad credit, you are probably paying thousands of dollars more than you would pay once you had restored your credit. This extra interest shows up every month in a dramatically higher payment. One of the first things that our members often do once they have restored their credit is to refinance their automobile for a fraction of their current payment or buy twice the car at nearly the same payment. Take a look!

Home Mortgage: The “American Dream” of owning your own home is out of reach for most people with credit problems. As you see below, even mildly damaged credit will cost a small fortune in additional interest. This forces credit challenged consumers to raise families in less desirable neighborhoods and to pay off someone else’s mortgage for them leaving the credit challenged with only several years worth of rental receipts.

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It is difficult to fully restore your credit without paying your outstanding debts. However, paying off a debt can actually hurt your credit. Negative items on your credit report are allowed to stay on your credit report for a maximum of seven (7) years, except for bankruptcy that can stay for up to ten (10) years. This 7 or 10-year clock begins ticking at the date of last activity. Making a payment represents new activity and restarts the clock. When paying an outstanding debt, you will change the account status to paid collection, paid charge-off, satisfied judgement, or paid ‘was xxx days late”. This is still considered very negative and appears as though you had to be strong-armed by the credit bureau to pay the account. It is almost always prudent to have a professional help so as to not further damage your credit by trying to do the right thing.

Myth # 2 – If a negative item is successfully deleted from my credit report, it will just come right back on my report.

The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they have not heard from the credit grantor for 30 days since an item has been disputed. Should the credit grantor submit verification a week or two later, it will be re-inserted. (This is called a soft delete.) Most of the time the creditor simply fails to respond and the negative item is permanently deleted. If the creditor verifies the item the account may still be deleted later in the process as the challenging process is intensified.

Myth # 3 – There are items such as bankruptcies, foreclosures, and tax liens that are impossible to remove from the credit report.

There is no type of negative listing that our attorneys have not successfully removed from a credit report – thousands of times.

Myth # 4 – Disputing a credit report is easy.  Any consumer can do it themselves.

Disputing a credit report is easy. Getting results from the credit bureaus as a layperson is amazingly difficult, complex, and infuriating. The Federal Trade Commission receives more complaints against credit bureaus than any other type of business . In February 2000 the 3 major credit bureaus paid a fine of 2 ½ million dollars for ignoring consumers requesting information regarding their file. Remember the credit bureaus are primarily interested in protecting their profits. Investigating consumer disputes consumes these profits. Short of sparking a mass number of lawsuits, the bureaus do everything in their power to impede your progress with credit restoration. Restoring your own credit is like repairing your own transmission or representing your self in court; it is possible, but you have to be willing to invest the time to learn the processes, assume the risks of your inexperience and realize that it will probably take you longer and you probably will be less effective than a professional.

Myth # 5 – The credit bureau allows me to submit a 100-word explanation as to my side of the story. Creditors will read my statement and take it into consideration.

No known creditors consider the information submitted in you’re statement. This statement only verifies some of the negative items on your report. The 100-word explanation should be the first thing deleted from your credit file.

Myth # 6 – The credit bureaus are…a branch of the government, infallible, or otherwise above reproach.

The credit bureaus are publicly traded companies in business to impress stockholders. They are not government agencies. In fact, they are one of the most heavily regulated industries. The strict regulations stem from a public outcry of abuses and mistakes. A recent survey by an independent research group revealed that 70% of credit reports contained mistakes or errors. The prevalence of errors has lead to consumer protection legislation that allows consumers to challenge the bureaus and force the removal of inaccurate, outdated or unverifiable information.

Myth # 7 – I can create a totally new credit file by getting a federal tax ID number or changing a few numbers on my social security number.

This fraudulent scheme has proven to be complex, difficult and illegal. Lying on a credit application is a criminal offense and with the linking of computer systems it is virtually impossible to get away with. It is in your best interest to hire adequate representation and face the music by confronting the credit bureaus armed with the rights congress has granted you through the consumer protection laws.

Myth # 8 – If I build enough good credit, it will offset my bad credit and make me creditworthy.

Any amount of bad credit is devastating to your chances of being approved by a creditor. The approval is almost never in the hands of a human sitting across a desk from you. It is a computer achieving a point total. The slightest amount of negative credit will cause an auto loans interest rate to skyrocket. Generally, even a little bad credit (regardless of the amount of good credit) will cause you to be declined.

Myth # 9 – Nonprofit organizations like Consumer Credit Counseling Service (CCCS) can help me restore my credit.

Nonprofit debt counseling services assist people who are over their heads in debt and are seeking an alternative to bankruptcy. CCCS are funded and controlled by credit grantors and credit bureaus. When you are working with CCCS your creditors will often note this on your credit report. This is a huge red flag for prospective credit grantors – treated the same as Chapter 13 bankrutcy. Some of the very worst credit reports that we see are or have been participants in the CCCS or similar programs.

Myth # 10 – It is illegal for creditors to take off a negative-listing on my credit report. The law requires that these items remain on the credit report for at least seven (7) years.

When you speak to credit grantors, collection agencies, or credit bureaus, their typically under-educated staff may tell you all manner of such pseudo-legal nonsense. The law "limits" negative information from appearing longer than the legal seven (7) year maximum. The credit grantor or credit bureau may choose to delete the item whenever they see fit (Or, whenever our attorney convinces them to).

Give me a call and I will help you get started on the road to good credit! www.CreditRestorePros.com

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"…. the agency shall not be required to comply with paragraphs 2, 6, and 7 with respect to that dispute if they delete the tradeline within 3 days."

The Credit Reporting Agency can delete a disputed trade line for 30 days, then, the trade line can appear when the furnisher (creditor or collector) reports it again in the next cycle. That is because the CRA is not required to tell the furnisher you disputed it thanks to section 2 being omitted.

Further more , you lose your rights to request "Method of Verification" so you lose this powerful tool in the dispute process thanks to Paragraph 7 being omitted.

Never dispute errors on line if you want them permanently removed. if you are going to dispute items on your credit report, do it in writing, and do it by certified mail with a signed receipt.

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54 percent of the credit reports contained personal demographic identifying information that was misspelled, long outdated, belonged to a stranger. or was other wise incorrect.

According to Ed Mierzwinski, USPRIG Consumer Program Director, "It is outrageous that inaccurate credit reports could damage one-in-four consumers’s ability to buy a home, rent an apartment, obtain credit, open a bank account, or even get a job."

At First Financial Freedom Foundation , we help people fix this problem!

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Stop Foreclosure with Loss Mitigation Programs

Loss mitigation programs were established by the federal government and the mortgage industry in order to stop home foreclosures. They help foreclosure victims in default on their mortgages to find alternatives to home foreclosure. Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Our extensive experience and solid working relationships with mortgage lenders allows us help you avoid the common pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough assessment of your personal finances and analyzing your lender’s loss mitigation policies our professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem. We can help you save your home and credit history through a variety of loss mitigation options:

REPAYMENT PLAN

If you have incurred a short term financial hardship and your loan is two or more months past due, your loss mitigation specialist will also consider submitting a request for a payment plan to your lender for approval. Only after reviewing your financial situation will this option be considered. All clients must be able to show that they can afford this plan in order to be eligible.  Click here if you want to talk to a loss mitigation specialist about participating in this program.

SPECIAL FORBEARANCE

(FHA loans only)(Type I and II)

If you have incurred a short term financial hardship and your loan is 90 days to 365 days past due, the loss mitigation specialist will also consider submitting a request for a special forbearance. A special forbearance is designed to provide you with more relief than is possible with a regular repayment plan. Typical approval can result in spreading the repayment over 12 to 18 months. Type II – can be utilized in an unemployment situation whereby the promise of future employment is present. We have done VA loans that resulted 27-month repayment plans.  Click here  if you want to talk to a loss mitigation specialist about participating in this program.

LOAN MODIFICATION

If you have incurred a long term financial hardship, our office can assist you in supplying the appropriate information to lender to take the appropriate measures to modify the term(s) of your mortgage. This could lower the interest rate and/or extend the term of the loan resulting in lower payments. There are costs and fees associated with a modification that you will be responsible for. All property taxes must be current or you must be participating in an approved payment plan with your taxing authority to be eligible for a modification. Any additional liens or mortgagees must agree to be subordinate to the first mortgage. All requests are subject to your lender’s approval.   Click here if you want to talk to a loss mitigation specialist about participating in this program.

VA LOAN MODIFICATION/REFUNDING

A refunding is when the VA buys your loan from the lender. Refunding may give VA the flexibility to consider options to help you save your home that your current lender either could not or would not consider. When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized. Your new loan will be non-transferable without prior approval from the Secretary. If your interest rate was lowered and an assumption is approved, the interest rate will be adjusted back to the previous rate  Click here if you want to talk to a loss mitigation specialist about participating in this program.

DEED-IN-LIEU OF FORECLOSURE

If you have incurred a long term financial hardship and your house has been on the market (at fair market value) for at least 90 days, you may be eligible for a deed-in lieu of foreclosure. To be considered for this option, you must complete a financial package and provide a copy of your recent active listing agreement. Also, there cannot be any additional claims or liens (other the mortgage) against the property. If you are approved for a deed-in-lieu, you will be giving up all rights to the property and the property will be conveyed to your investor. In exchange for the deed-in-lieu, the lender may waiver all deficiency judgment rights. You may be asked to participate in a Short Payoff program before a deed-in-lieu of foreclosure is accepted  Click here if you want to talk to a loss mitigation specialist about participating in this program.

PARTIAL CLAIM

(FHA mortgages only) (Some Freddie Mac Investor loans)

The loss mitigation specialist may assist in requesting a partial claim if you qualify. You may be eligible if your loan is 120 to 365 days past due. A partial claim results in placing your past due payments into a subordinate mortgage (2nd mortgage) between you and the Secretary of Housing Urban Development. The partial claim note will require you to start making payments when you pay off the first mortgage. There is no interest. The partial claim can be for no more than 12 months of past due payments.

Click here if you want to talk to a loss mitigation specialist about participating in this program.

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