The Infinite Banking Concept

Wealth Transfer in America

In 2007 the personal savings rate was negative for the first time since the Great Depression. Americans are now spending more than they are making. How is that possible? The previous 10 years saw record breaking growth in both the stock and real estate markets, yet most households need the incomes from both parents to make ends meet. This has changed the fabric of our lifestyle. We are spending less time with our kids and more time at our jobs. The value of family and community has diminished. Why? Well, the answer is that most of us are trying to keep pace with the neighbors. We measure success by what we have. This leads to ever increasing family expenditures. C. Northcote Parkinson observed that “a luxury once enjoyed becomes a necessity.” So, must we go backward in order to go forward? No. The problem is not what you buy but how you buy it. Did you know that roughly one-third of every disposable dollar goes to pay the interest on financed expenses? The amount is staggering! We are bombarded by financial institutions with offers to finance practically everything. They clearly understand the economic power of financing and therefore encourage us to do it at every turn. Just the fact that the banks mail us vast amounts of credit card applications tells you what? They must be making A LOT of money. With their pockets full don't expect any changes.
So, if the banks won't change then what can you do? Well, you must seek to put yourself in control of your money. Therefore, you must treat yourself like a banker and create your own system of banking. The only way to avoid the transfer of interest and the opportunity costs that accompany it is to put yourself in a position where you have the choice to use your money or someone else's. This means that you must save enough until you can choose to pay cash or finance. If you pay cash you should pay yourself back. As long as you borrow money from others you will be forced to transfer some of your wealth away. Doing this will allow you to regain control and take charge of your financial future. Ask yourself this question: “If you had your own banking system how would you view borrow money from the local bank?” Borrowing from yourself and paying it back means that you get every penny back. Interest charges are gone forever. Not only do you recapture the interest that you were previously sending to various financial institutions but you also recapture the principal. By transferring the financing from the local bank to your personal banking system the cost of your purchases are significantly reduced.
You may be wondering what the difference is between a local bank and your personal baking system. Well, the condensed answer is that the local banks are federally chartered institutions that require vast amount of time and capital to start. But banking itself is merely a way of transferring wealth from savers to borrowers. What exactly is banking?

What additional advantages would you enjoy by becoming your own banker?
Purchase a car and increase your wealth by doing it.
How many cars have you owned over your lifetime? How much have you spent on those cars? How did you factor in the interest paid? What about the lost opportunity cost on those dollars? Did you pay cash, finance or lease? No matter how you bought the car you unknowingly transferred some of your money away. How?

1. If you financed your purchase then there's the obvious wealth transfer in the form of interest payments to the bank.
2. If you paid cash then your wealth is being transferred because that money is no longer earning interest for you.

What about your credit cards, student loans, home loans, business equipment, etc.? How much money do you think you transfer away to the financial institutions every year in the form of interest payments and finance charges? What would those dollars be worth today had you been able to keep them? You may be asking yourself is this even possible? The answer is: ABSOLUTELY! We can show you a process whereby you can recapture every penny of your principal and interest, regardless of the cost…just like a bank does! You’ll earn interest on that recaptured money as well and through the Velocity of Money Multiplier Effect your wealth will increase much faster than if you had not borrowed it. Get your own customized analysis to see how you create wealth from Personal Banking.

It's about the banking process, not a financial product.

Are you looking for a magic pill to cure your financial woes? Well, this isn't it. If you're looking for a get-rich-quick product then you'll have to keep searching. What we teach is a process to systematically turn the tables on the traditional financial institutions. Conventional financial planning would dictate that in order to build wealth you need to:

1. Achieve higher rates of return
2. Spend less on your current lifestyle to save more and
3. Maximize your contribution to your company's qualified retirement plan

The first question that most financial advisors will ask you is “how much money do you currently have?" The next question is usually, “where is it?" Once they know where your money is they will usually start telling you about how their products are better. Very few advisors will spend time talking with you about the money transfer problems that erode your wealth. After all, it's much easier to sell someone a product and go on your way because anything more than that takes more time and energy. To illustrate the point that products are not as important as the process let us assume that we're going to send you to play in the Master Tournament, golf's most prestigious event. We have two things to offer you but you can choose only one. You can have the clubs of any golfer who's ever played the game or who can have their ability. Which one would you choose? Of course you would want their ability, or swing. This is what we're teaching people with the Perpetual Banking Concept. Unnecessary wealth transfers are the fundamental problem. The process that we teach solves this problem and eliminates the staggering cost of financing. Learn how to use financing as a tool!

Tax free 401k? Now you can get your tax deferred growth to come out tax free. Proper retirement planning is crucial. How would you like to have 33% of your nest egg taken away at the time that you need it most? What if your current savings isn't enough to sustain you and your spouse through retirement? Who will take care of you during your final years? Most qualified retirement plans do two things:

1. They defer the tax and,
2. The tax calculation.

Which one of these two things are you looking for? Well, since most of us are smart shoppers, we decide that it's best not to pay our taxes today and defer them until some date in the future. You're undoubtedly looking for the tax deferred growth. I have two questions for you. What tax bracket will you be in when you retire? What deductions will you have when you take the money? If you're like most people you'll be in the highest tax bracket and you'll have the least deductions when you retire. What does that mean? Well, it means that the IRS will be taking more of your money at retirement. What if you could change that? What if you could still get the tax deferred growth during your accumulation years but have the money come out tax free during the distribution years? That means that you get to keep every cent and the IRS can't touch it. Check with us to see how well you’ve planned for retirement.

Enjoy a tax free income stream that will last longer than you will.

One of the greatest benefits of becoming your own banker is the creation of a tax free income stream. Wouldn't it be great if that income stream continued to grow while you spend it down? And at the time of your passing, wouldn't you like to pass your nest egg on to your family and children tax free? Definitely! When you learn and apply the process that we teach not only do you have a wealth building machine for yourself but you can create a legacy that you can leave for future generations.

Who is in control of your money and financial destiny? Is it the government, your employer or financial advisor who is steering your ship?

Are you in control of your financial destiny or are you relying on someone else to get you through? Do you expect the government to provide you with Social Security and Medicare benefits? Maybe you feel your employer's defined benefit plan will be enough to take care of you and your family. Or do you feel that your financial adviser has your financial future well in hand? Who's in control and who makes the rules? Does the government guarantee your Social Security and Medicare? Absolutely not! They can change the rules whenever they desire. Social Security is sorely under-funded. In 1950 there were 16 workers paying in to the system for every 1 worker receiving Social Security Benefits. In 2004 there were 3 workers paying in to the system for every one worker receiving benefits. And soon that ratio will drop to 2:1. But that's just part of the problem. People are living longer these days with a greater life expectancy. The longer they live the longer that the government must pay those benefits. Federal Reserve Chairman Ben Bernanke stated that unless Social Security and Medicare are revamped, the massive burden from retiring baby boomers will place major strains on the nation's budget and the economy. Betting your future on your employer is extremely risky too. Defined benefit plans are in extreme danger and you may end up losing a substantial chunk of your retirement benefits. And how good is your financial advisor? If you don't take control and seek the financial education that's necessary then your financial destiny is left to the discretion and experience of your advisor. Unfortunately, most financial professionals will only talk to you about their products. Very few will spend time discussing money transfer problems because it takes more time and energy. It's much easier for them to sell you a product and then go on their way. We focus on educating our clients about the process and the benefits of eliminating unnecessary wealth transfers. Click here to find out how we can help you eliminate wealth transfers in your life.

If rate of return is important, what is the return on tax free?

Most financial professionals would have us believe that rate of return is the most important factor for growing your investments. Therefore, their primary focus is on the products and “where you have your money." We disagree with this philosophy. By becoming your own banker and eliminating the staggering costs of traditional financing you can dramatically increase your wealth building potential. To illustrate this point let’s assume that I am the greatest financial planner in the world and I can get you a 100% return on your investment every single year for the next 20 years (See chart below). Comparing the growth in a tax free account and a taxable account is staggering. We’ve used tax rates of 0%, 17% and 27% respectively for 3 fictional clients. Many people are in higher tax brackets! Now, I have performed equally well for each of these 3 clients. What’s the difference? Will getting a higher rate of return solve the problem? Absolutely not! The bigger issue is the tax paid on those gains. So, which one client would you prefer to be? Of course you'd want the tax free plan. Contact us to find out what the effective rate of return on your investments is!

Pensions are in deep trouble, how safe are you?

44 million Americans are covered by traditional pension plans. Are you one of them? Currently there are about 30,000 defined benefit plans that are under funded to the tune of $450 billion. According to government estimates, in 2005, so many large U.S. companies grossly mismanaged their pension funds that their total deficit reached a record $353.7 billion and smaller companies ran up a total pension deficit of $100 billion. Jim Lange, the author of a bestselling book entitled “Retire Secure! Pay Taxes Later: The Key to Making Your Money Last as Long as You Do," states that “you, and only you, are responsible for funding your retirement. You can no longer depend on your employer and it's hardly worth mentioning that Social Security isn't going to get you very far. As corporate icons like GM, Verizon, IBM, Sears, Lockheed Martin, Motorola, Circuit City and Hewlett Packard declare pension freezes, Americans need to reevaluate their retirement plans." The band-aids that the government has put in place are too-little too-late. The Pension Benefit Guarantee Corporation, which is funded by U.S. taxpayers, is charged with bailing out employers who renege on their promises. In 2000 the PGBC had a $9.7 billion surplus. Six years later they had an insurmountable deficit of $28 billion. The Pension Protection Acts of 2006 and 2007 do not do enough to address the severity and time sensitivity of this crisis. People will need to rely more on themselves rather than the government or their employer. Contact us to get back in control of your financial future.

Grow your nest egg predictably year after year no matter what happens to the stock, bond or real estate markets.

What would it look like if you could have a guarantee? Guarantees provide security and give us peace of mind. Well, if could get a guaranteed rate of return without subjecting your nest egg to the volatility of the stock, bond and real estate markets wouldn't you want it? Our financial markets are subject to increased volatility these days due to global integration and technology advancements that have led to lightning quick communication. Events worldwide impact our markets immediately and vice versa. Whether it's an economic boom in China, the Hurricane Katrina disaster in the Gulf Coast or an OPEC decision to slow oil production, our local and national markets can be subject to immediate spikes and slides. Once again, who is in control of your financial destiny? With pensions, Social Security and Medicare in disarray; an ever increasing national deficit making the U.S. the world's largest debtor; and countries such as China beginning to pull money out of the U.S. to put towards building their own economy, how safe do you feel your nest egg is? This is where the Infinite Banking System comes in. If you're interested in maximizing your opportunities and limiting market and tax liabilities then it's worthwhile to find out more about becoming your own banker from one of our financial strategists.
Contact us now!

Housing Meltdown

What would you do if you lost your home equity?

How would you feel if you had an extra $50,000-$100,000 in liquid cash just in case you lost your job, or became disabled?

What if there was a way to participate in the upside of the housing market, and never lose your home’s value?

What if you could also participate in the upside of the stock market, but never lose your account’s value?

Who do you have in your corner protecting you from these losses?

Housing Meltdown
Why home prices could drop 25% more on average before the market finally hits bottom

So, you think the housing bust is bad? Prepare for worse to come. BusinessWeek says national home prices could plummet an additional 25% over the next two or three years. The charts and tables on the following slides tell the story of why prices could fall so much and what the fallout might be.

Room to Fall
Starting in 2000, home prices soared far above their long-term trend. They've only just started to return to normal. This chart shows the history of home prices adjusted for inflation going back to 1890, compiled by Yale University economist Robert Shiller. The black line is BusinessWeek's calculation of the long-term trend growth rate: just 0.4% a year after inflation.

Coast To Coast
A 20% decline in home prices would wipe out all of the home equity of two-thirds of all people who bought houses in the last year, Zillow.com estimates. The bars show the percentage of recent buyers in each market whose home equity would be wiped out by a further 20% price decline.

Optimism
These regional pie charts show the results of a December survey of 1,509 homeowners asking whether they thought their home's value had risen or fallen over the past year. The survey was conducted by Harris Interactive for Zillow.com. Beneath each pie chart is Zillow.com's estimate of the actual change in house prices for the region over the past year.

Why Housing Prices Won’t Plunge ... And Why They Will
In the war of words over the outlook for housing, both the optimists and the pessimists have plenty of ammunition. If home prices really fall an additional 25%, Washington's rescue program is likely to seem seriously inadequate. So far the Bush Administration is pushing two main ideas: FHASecure, which offers new mortgages to certain well-qualified borrowers, and Hope Now, a private-sector program to streamline the modification of unaffordable loans. But FHASecure isn't open to people who are underwater on their mortgages—in other words, those who most need help. And the Hope Now alliance doesn't seem to be coping successfully with the mounting backlog of loan delinquencies. The other big Washington initiative, to crack down on loose lending practices, could be ineffective and even counterproductive, because it's making loan funding less available right when it's needed most.

The next big reform ideas may hark back to President Franklin D. Roosevelt. Many of the housing market's props today—including Fannie Mae and the Federal Housing Administration—were launched during the 1930s. If things get bad enough, say some analysts, it could raise interest in renewing another innovation of the Depression years, the Home Owners' Loan Corp., which lent money directly to hard-pressed borrowers to prevent foreclosure. If enough banks get into trouble, Congress might even create something roughly parallel to the 1980s-era Resolution Trust Corp., which cleared up the savings and loan crisis by shutting down weak thrifts, thus wiping out the investments of the owners, and then selling off their assets to the highest bidders. And with homeownership no longer seeming like such a sure thing, national housing policy could become more evenhanded toward renters. Congress is weighing the creation of a National Affordable Housing Trust Fund that would build, rehabilitate, and preserve 1.5 million units of housing for the lowest-income families over the next 10 years. The national homeownership rate has already fallen about one percentage point from its peak, to 68.2% in last year's third quarter. However things unfold, the changes are likely to be wrenching. The bigger the boom, the harder the fall.

Checklist For A Housing Bust
Okay, you're convinced that tough times are ahead for housing. What should you do? Here are some ideas that could ease the pain.
· re-position your home equity now, while you can, in a safe, liquid, side fund!!
· equity management could increase your net spendable income by as much as 50%

Call us now @ 512-864-7979 to learn how!!!

Largest Expense is Still Housing

Based on the new Consumer Expenditure Survey, housing’s share of average spending increased over a full percentage point from 32.7% to 33.8%, making it the continued king of cash flow consideration for the average consumer.

Not only is it the largest expense, but in prior consumer surveys the consumer feels they have the least 'control' over their housing related expenses. Energy costs, property taxes, home owners insurance, mortgage interest, all tend to create a feeling that housing expenses are totally outside their control... which is an accurate statement for most house owners. Their options are to sell the house and rent, or to consider more closely monitoring their housing related expenses, controlling the things they can control, letting the rest go. That's a form of liability management, just helping people consider what they can, and clarifying for them what they can't.

One interesting consideration of the CES study is the expenses are considered interest only for all expenses, so principal does not show up as an expense to the consumer, yet they do feel it in their overall cash flow. As you can see from the chart, the level of pain is relatively higher for the lower income earners, but still makes up over 30% for the high income earner. This trend is actually pushing home ownership rates in the US down, and putting more pressure on rents, as the median rent in the US jumped 6% in 2006 after stay relatively flat for many years. If that increases, selling and renting becomes less attractive as well.

When you consider the emotional impact of the lost equity, you can see why consumers want more guidance if their real wealth declines, even if it is simply letting them know that things will be ok. The forthcoming mortgage resets in the first quarter of this year will continue to put upward pressure on housing related expenses and further challenge savings ability of the typical consumer.

Will We Repeat Our Mistakes?

We have to continue to wonder how the psychological impact of the housing market will impact the economy. When you look at real wealth, it is slowly decreasing. What has the greater impact for most people, loss of wealth or loss of cash flow?

We think about consumer confidence as something we can measure on the whole, but like the saying 'all real estate is local', all 'consumer confidence is personal.' What really strikes at the heart of the consumer is cash flow, with wealth a more distant second. Most consumers make their most important decisions based on short term cash flow considerations, and less often do they think in terms of long term wealth. If their house loses $50,000 in value, that is a real impact to their wealth that is fundamentally more painful that a loss of $500 a month from an ARM reset, but if you look to your personal confidence, most will agree that $500 a month has a far greater impact on your outlook, spending, and general willingness to take action. The FED is worried about consumer confidence because worried consumer reduce spending, and that creates new pressures on our economy.

Much of our wealth, and our cash flow of the recent years has come from Mortgage Equity Withdrawals (MEW), and in the last measured third quarter of 2007 there was a 55% drop in loans that removed equity at the closing (meaning cash out loans), and for many even with the lowered federal interest rates we'll see some increase in housing payments, meaning less disposable income.

Consumers tend to remove equity from their house in one of two ways: selling the house or refinancing the house. Selling the house has been tracked most often to higher savings - the lump sum can be positioned in what is a one time decision for the client, whereas cash out and home equity lines take greater discipline and financial stewardship, these smaller lump sums are more quickly consumed for goods versus savings. As house prices drop, real estate sales have slowed this exchange of wealth from capital gains of real estate appreciation. Stricter lending guidelines have made it more difficult for consumers to reposition wealth already in the house, putting greater pressure on spending behavior.

We are seeing signs of life in the mortgage refinance side of the housing equation. Consumers see news on the lower interest rates from the Fed. The MBA refinancing index moved back above 4000 for the first time since March of 2004... that's a 20% jump in applications, and in just 5 weeks we see a doubling of prior loan activity. We again may see some behavioral shifts in the way the consumer views savings that comes from cash flow, cash out, or property sales as they need to think about their own liquidity.

The main reason the Fed needs to lower rates (as the real impact on housing may not help the economy for some time), is the consumers increasing reliance on credit card debts (rising) and mortgage lending (decreasing)... as mortgages tighten, consumers fall back on credit and that creates a debt sprial that can be devastating... this is again a problem of behavior (overspending), or too much month at the end of their money.

Many believe 2010 is when we can expect to see housing back in full swing again, but right now there is a real opportunity to capitalize on current rate trends, and congressional politics. To imagine that I might refinance a $700k mortgage to an FHA loan, or that the government may offer tax free bonds for pools of bail out money to consumers, is pretty hard to imagine... but they are trying to avoid a bigger calamity, and many believe interest rates have no where to go but down for the next 6 months - making the 5,000 ARM resets per day all the more exciting for you and your consumer as LIBOR and PRIME become more and more attractive, and we set ourselves up again for consumers refinancing into short term lower interest rates... When will the Fed be able to tighten again if we bail ourselves out with cheap money? This time around, let's see if we can save more, spend less, and better manage our own liquidity.

Real Estate Assets - declining...

I've been interested of late in the Case-Shiller approach to valuing real estate growth in the US. As opposed to the http://www.ofheo.gov/ site where the US Government provides real estate data, the Case-Shiller uses paired sales, meaning they record when a house is purchased, and then when it is sold, divide by the number of years and come up with the real actual rate of growth for those properties. Most importantly, they do all property sizes, whereas the OFHEO site provides data only on conforming properties, further skewing the real impact of declines in higher property value markets.
In a recent report they shared that residential real estate held by households and non-profits reached $22.4 Trillion, great than the $19.3 Trillion held by the same group in domestic stocks. This isn't net wealth inside the house, which is now around $13 Trillion after subtracting for mortgage liabilities, but we're seeing how big an impact house wealth and mortgage borrowing has on our U.S. financial and psychological fitness. The Case-Shiller index is seeking to better compare an investment in your house to other stock, bond and fixed income investments, and they recently put out a detailed report on their Forecast, which is recapped below for your review:
Forecast Summary
The current housing recession is expected to run through early 2009 and will ultimately be severe enough to be characterized as a housing crash. Home sales are exptedted to hit bottom in early 2008, declining by over 40% from their peak, housing starts will reach their nadir in mid-2008, falling by 55%, and house prices are expected to decline by 12% through early 2009. After accounting for the plethora of non-price discounts home sellers are offering to buyers, effective house-price declines peak to trough will total well over 15%.

7 Predictions for 2008

Seven Predictions For Your
Business in 2008

2008 has started off to produce an extremely volatile marketplace for loan officers across the country. And it is just the beginning. In this interview, Dave Savage -CEO of Mortgage Coach - and Tom Griffith - a thought leader in the industry extremely knowledgeable of today’s economy, market and how it relates to loan officers - provide their top 7 predictions for 2008 affecting the mortgage industry and how to turn those trends into opportunities. Through solutions, strategies and sales tools this call will give you all the knowledge you need to make 2008 a profitable year.

Purpose: What are the top 7 predictions for the mortgage industry in 2008. And how can you, based off of those events and trends, turn them into golden opportunities.

The 7 Predictions are:
1. Volatility in the marketplace
2. Dropping interest rates
3. Record number of loans resetting and recasting
4. Record number of short sales and the amount of real estate that’s not selling housing market that is not moving.
5. Financial Challenges in the marketplace - What does it mean when the typical American is having challenges?
6. Seller Buydowns – How can this be an affective tool in the real estate market?
7. Different types of stimulus packages - The government is intervening, how do you leverage this into opportunity.

1) Volatility – Prices are up, prices are down within the matter of days and even hours. They are moving all over the place and it’s very difficult to see a trend. Volatility, if you’re a trader is optimal because that’s when you profit the most. But for a loan officer, volatility can be very difficult when trying to meet with clients. Yes, it is no news that today we are seeing change but what really is extraordinary is the magnitude.

Advice for a volatile market is never play the market. But when you find a rate that you like, lock it down immediately. You don’t want to tell a client that you missed an opportunity. This is called a Talk & Lock Policy. Bottom line, when rates drop during the course of a transaction you can always choose to pass that along to the client or not. But don’t tell people you’re going to provide a rate when that rate may not be available tomorrow; because in a volatile market it may not be there. In the future, it’s important for originators to understand that the market will move & it may not be predictable. An example of a massive flux in the market is the 4 hour mini refi boom that hit earlier this year. This small window of opportunity opened and shut within 4 hours. You can expect to see more of these small windows throughout the year.

Key Takeaways:
• Talk and Lock strategy. If there is an opportunity to save money you can’t loose money taking a profit. Presenting a money-saving strategy to a client, locking it in and closing it as quick as you can is an excellent best practice in a market like this.

• Establish expectations upfront with clients. Educate and prepare them for today’s volatile market. This is a critical component because when you call your clients and notify them it’s go
time, they have to trust you enough to act fast without hesitation.

2) Dropping interest rates (This prediction is bundled with prediction #1 Volatility because in some ways they are cause and effect) Rates dropping deserves its own category because net, throughout the year, it is going to be a good refi year for those originators that are focused - The ones that set those client expectations. A good Mortgage Coach resource that will set these expectations is a Mortgage Under Management Agreement. This letter was introduced to us by Jeremy Forcier and all it is, is a letter of agreement between you and your client that if a rate drops, you have the authority to lock it down immediately. You’ll have all of the paper work ready and it will just be a matter of sending it to your client for their signature. This is a sure way not to miss a big opportunity.

Key Takeaways:
• Mortgage Under Management agreement. All of your clients should be signed up for this plan
• Sending out RateWatch to your database. Your clients need to know that you are constantly
monitoring the market and their mortgage decisions. And this will put you foremost on their
minds.

3) Record number of loans resetting and recasting.
As loans reset, values are going to drop and there is going to be a lot of fear instilled by the media. This creates a ton of misinformed people that love to give advice, especially to your clients. At this highly publicized time, you need to be the first to educate your clients by providing high-value tangible evidence. You need to get in front of your database with this information so your clients can take action on. A Mortgage Coach resource that accomplishes this is the Total Cost Analysis, so you can quantify and dollarize the value of one ARM strategy verses another; also called ARM management. The other tool is the index analyzer, this can be found on indexanalyzer.com. This is a great tool because it really helps you showcase different indexes in a graphical format. You can take that information and put it in the TCA and you have
just made yourself the obvious choice. Best way to harvest all of these recasts and resets is properly managing your database and consistently sending out RateWatch reports and the TCA to really show how it all works.

Another takeaway is go out and build a reputation with all CPAs, financial planners,
realtors and let them know that you have a new service called a reset/ recast review .
Show them a case study, then when they have a client that is in that situation. They
think of you and you’ve just won a referral.

Key Takeaways:
• Successful strategy is educate yourself, learn the trends in the market place and know what
you can and can’t do. Then get in front of your database with real info that clients can take action on.
• Total Cost Analysis. To quantify results.
• Indexanalyzer.com. A great tool that allows you to showcase different indexes in a graphical
format.

4) Short sales & real estate sales going down. How should loan officers change their business because of values going down and short sales? To be ahead of the game, you have to really understand what’s going on with values. According to NAR (National Association of Realtors), this value correction actually started in the summer of ‘05. Existing home sales and construction began to decline in the summer of ‘05. This is important because you have to communicate to clients that no, the sky is not falling. This is not a new thing. In fact, there is a positive out of this. We’ve been in a time of rapid expansion, were everything began to inflate. At some point that has to stop. And a healthy free market says, when inventory begins to go too far, it has to start to contract down again. The good news is, it is behaving as though it is a healthy market, and that’s not being said on the news. The media message that is out there says the market is crashing. In order to be sophisticated and understand that in a healthy market when it has moved to far from the norm, it has to begin to come back. And that’s what the market is doing right now. Fact: what goes up, must go down. Nobody knows how far down it will go but you have to be optimistic. Make sure you are well read on the subject. Read source information on the market. Make sure you know your market based on there zip codes. Don’t let your clients know more about your particular market than you. The action is working with realtors that are focusing on short sales.

Key Takeaways:
• You must educate yourself on the market, here are some resources. Real estate is always local and it is vital to be a master of your local market. Gather tangible information that you can go out and talk to people about. Here are some resources: Read the NAR, multiple listing service RMLS , watch the price and trend data. An interesting perspective on why 2008 is a good year to be in real estate comes from Chief Economist of the NAR Dr. Lawrence Yun, look it up. Gary Shilling has an index on his web site, valuable tool. Watch and read the financial markets, like the currency marketplace because it does relate to the industry. Mortgage Market Guide has good information. Foreclosureradar.com, only valuable to Californians but it is a really good source of information.
• Separate yourself from the doom and gloom of the media. It is important that when you sit down with clients you remain optimistic and separate yourself from every other negative message they hear.
• Strategic alliances. To find strategic alliances you must find those real estate professionals that work in this short sale market. There are some great opportunities out there.

5) Homeowners facing financial challenges. There is financial stress everywhere, which may result in an increase of divorce, foreclosures and bankruptcy. It’s very important for you to go out and build relationships with those folks. Originators should use the Total Cost Analysis and Ratewatch report to show people the values of their assets and how it can solve a lot of their problems. Additionally, the Mortgage Coach has introduced Divorce Planning Services with Jonathan Klein as a new service to introduce to your clients. Jonathan Klein is charging a $1,000 consulting fee for adding this service to his business and he is teaching other loan officers to do the same. If you want to learn more about this, contact me @ sean@providentloans.com

6) Seller Buydown Strategy. This strategy will help package some of the stale listings in the market that are having challenges. This is one of the top 2 strategies that you, as a mortgage professional, can take to the real estate market. So not only are you increasing your referral business, but you’re also helping realtors sell and package homes, helping homeowners, and the market. This really makes you a valuable source when times are tough and it will make a huge impact on increasing your referral business

Key Takeaways:
• if you're interested in learning this strategy, please contact me @ sean@providentloans.com

7) Government intervention. The increase in conforming loan limits and guideline improvements for FHA are examples of the interesting ways the government is intervening. It’s a trend that will present itself throughout the year with additional special programs. The advice we offer to take advantage of this evolving marketplace is make sure you are FHA approved. Today the new buzz is that FHA is the new subprime. FHA is the tool to help get things done when things are not conforming. More than ever, you have to be ready to use this tool today.