A New York Mortgae Planners View:

It Seems like everyone is considering to modify there loan these days. Especially that Sheila Bair who is the Chairman of the Federal Deposit Insurance Corporation (FDIC) said, "We will very aggressively pursue loan-modification strategies for unaffordable loans to make them affordable on a long-term, sustainable basis." therefore I feel the need to clarify the option that an individual has and the ramifications it might have.

First of all it is not ethical to modify unless you are really in need and cannot survive otherwise. Just because you can and the bank will agree is thievery. Its not the lenders fault that you made a bad investment, Man up and take responsibility.

To cut to the chase, If it is a Primary residence, and the balance of the loan is less then a 2 Million dollars before forgiving, it makes scenes to modify or trying to get the lender to forgive a portion of the loan since there will not be a tax problem for you on the portion forgiven.

However if the loan you are trying to get a portion of it waived is on an investment property or if the loan portion forgiven is more then 2 million dollars the lender will send you a 1099C in the end of the year and you will have to pay on the forgiven part income tax on top of the money that you earned this year, a real problem in some cases.

 Things to look out for

1. Primary residence only.
2. Original loan you got when you bought the house, Sorry no cash-out refinance allowed.
3. loan balance before forgiveness was less then 2 million or 1 million if you are single or file separate.

If you criteria doesn't fit then don't do it you will have to pay tax on the forgiven part.

True Story

Jack did a modification on a 3,000,000 dollar loan and he did not ask his mortgage planner or his CPA beforehand. He negotiated the loan down to $1,000,000 and saved $10,000 dollar a month by doing so. At the end of the month Jack got a 1099 from the lender in the amount of $2,000,000.

Jack called his accountant and the accountant said he will have to pay taxes on the 2,000,000 which he was forgiven an amount of $700,000 and he will have to file for bankruptcy in order to get out of the bill.

Don't be like jack black contact professionals and don't rely solely on your Loss mitigator, ask your accountant and your CMP, CMPS before you make a move.

Sincerely

Joel Silberstein
Certified Mortgage Planner, CMPS

 Please check out what are your option of you cannot continue to pay your mortgage. click here.

In the You Magazine issue of November which I distribute to my database monthly there is a link to a powerful simple truth video. I was moved to tears with the positive message reinforcements while looking at beautiful scenic picture and listening to beautiful music just a few words flash onto the screen . The power of that is amazing. its a real science of mind programing that most people don't know about. A story can be told with great detail but it will not move you deep inside. However reading the same story, on a PowerPoint slide-show with scenic pictures of the sun and nature with a combination of music can be really power-full and it can move your behaviour in the direction of the content.

Transformational Idea, Look at such a power-full slide show everyday for 10 minutes before your start the day and it will invigorate you.

To Test the theory for your self click here.

For more of such content for your mind and body and financial health, please subscribe to this on-line magazine free to you it will be delivered right into your email evrey month.

For a Sample of this months You Magazine Issue please click here

To subscribe click here

Sincerely

Joel Silberstein
Certified Mortgage planner, CMPS

Many people ask why if the fed cuts interest rates why did mortgage rates go up???

Another one, Why if the EU cut its interest rate why did the US dollar get stronger against the Euro and the Canadian and Against the yen etc.

Another question, why did the global stock markets gain yesterday when Australia cut its interest rate with 3/4, more then expected?

Here it is. I hate to break it to you but the truth is that the Fed's mission is not to provide low mortgage rates.

Copied from the Federal Reserve site itself and here it is,

"Today, the Federal Reserve's duties fall into four general areas:

• conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
• supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
• providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system"

Reading through their mission statement in their own words did you see anywhere the word mortgages?

Here is the real story, we live in a world economy and we compete in a world economy, the players are the common people and the governments of the world. As in matter of fact there is a World bank where the big boys like USA federal reserve, and The bank of England, and the European Union etc. have accounts and pay membership dues.

 The US has income just like we all are trying to have. The US income Consist of,

• Interest rates that it gets from Banks who borrow from them.
• The tresury bonds.
• Consumers and business taxes.
• Customs taxes.

Now if the US would to cut its interest it charges the banks who they lend to, would that limit the income for the US? Of course it will and if the US has less income they are perceived as weaker.

But if all your competition all cut their interest rates at the same time, the you are as strong as your competition! therefore when the EU cuts its rate, Australia cut its rates the US dollar strengthens.

Of course the interest rate cuts is intended to stimulate the US economy and it is a wise investment of the governments part, the short term is still a major factor and investors play by it daily.

Now back to the first question, Why when the fed cuts the Interest rates it does not reflect in mortgage rates?

And the answer is it that the fed does not directly control that!  eventually it will reach a point where the mortgage rates are influenced and will follow the US interest rate trend, but it has no real correlation.

I hope I clears it up a little and if you have question or comments please do so and lets get educated.

Sincerely

Joel Silberstein
Certified Mortgage Planner,CMPS

Consumer Aleret on the Federal Reserve Website

Release Date: November 4, 2008

For immediate release

 BEAWARE: FEDERAL RESERVE WILL NEVER SOLICIT YOU!

The Federal Reserve Board on Tuesday alerted the public to instances of questionable solicitations directed at consumers. These solicitations promise consumers access to personal loans through a nonexistent Federal Reserve lending program.

Under this fraudulent scheme, targeted individuals are told that that they can work through a broker to access a Federal Reserve program that extends sizable secured loans to consumers. Consumers are encouraged to deposit large sums of money into a bank account, under the guise of a security deposit, in order to receive the purported loan.

The Federal Reserve is advising consumers that it has no involvement in these solicitations and does not directly sponsor consumer lending programs. The matter has been referred to the appropriate authorities for action.

Consumers are strongly urged to verify the legitimacy of potential service providers before entering into a business transaction. Individuals seeking personal finance options are encouraged to do business only with reputable lenders and to shop around for the most favorable loan terms.

Consumers with questions about solicitations that they suspect may be fraudulent are encouraged to contact the Federal Reserve Board Consumer Help Center at http://www.federalreserveconsumerhelp.gov or by calling 1-888-851-1920.

Spread to your Database they Will forever be grateful!

Well you sure heard about inflation right? that's when prices rise and the dollar looses its buying power due to fast growing demand.

Deflation is the exact opposite of that. that's when demand falls so short that prices will have to come down to move products off the shelf. So whats the problem you might ask?

Well 2 fold:

1.  First of all for existing loans. existing loans which will be paid back in an deflationary environment will be paid back with more expensive dollars then the dollar borrowed, real bad for consumers.
2. It will further push economy in a stand still almost stone age like, because nobody wants anything so why would anybody pay you for anything?

A Little bit trivial but not as much as you would like.  with talks of economic recession on the horizon and company's cutting back, with interest that low and a tight credit market there is actuial a possibility of deflation.

Idea to capitalize on : Stock up on money and lend it during a deflationary ENVIRONMENT YOU WILL GET BACK DOUBLE ITS WORTH.

You always need money when things go well, and when things do not. When all goes well you want to have asses to cash to capitalize on it. When things do not go so well you need it for security reasons!

Make sure you make the right choice with yours!

Joel Silberstein
Certified Mortgage Planner, CMPS
917.660.3630
joel@joelsilberstein.com