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

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

Hindsight is always 20/02 But the problem is you can only see what you understand. in example looking at struggling businessman coming out shining through a rough market, the person who does not understand business principles does not how he pulled it through. Versus a business knowledgeable person does know and can identify the principles that this struggling business person cling-ed to that help him through the rough market.

I just heard today about a 59 year old executive in the jewelery manufacturing business expressing fear that he will loose his job. He never bought a house because he was always afraid that if he might looses his job, where is he going to pay the mortgage from.

He never invested in real estate due to lack of knowledge of the real estate business.

He never invested in the stock marketdue to his lack of knowledge of the stock market.

You see the theme? He was always holding to his job and being good at what he was doing, but he wasn't growing,which brings us to the following financial principles.

1. Buy assets (Real estate or Stocks Bonds etc)that will go up in value.
2. Educate your self about these assets.
3. Change is inevitable, growth is a choice so the choose to grow and change will be easy!

Rich dad says: the difference between the poor and the rich is, The poor buy liability's, and the rich buy assets.

Owning your House is vital to your total financial picture the time to buy is now!

For Real estate financing advice please call me at 917.660.3630

or send me an email to Joel@joelsilberstein.com

Sincerely

Joel Silberstein
Certified Mortgage Planner, CMPS

The Silberstein Group
Brooklyn NY 11219

Although we are going through unprecedented times the basics financial principles have not changed.

•1.    You actually have to qualify for a mortgage.

•2.    You have to save up some money for a down payment. Lenders want you have a reason to work through hardships and not get dumped along with the house.

•3.    The mortgage has to be properly planned because it does have the ability of robbing your life's savings.

•4.   The mortgage has the ability to provide you with a comfortable retirement. Speak to your Certified mortgage Planner about that.

•5.   Invest invest and keep investing. A down market will only increase your chances of hitting it big. it is called dollar cost averaging here is the technique from about.com

"Instead of investing assets in a lump sum, the investor works his way into a position by slowly buying smaller amounts over a longer period of time. This spreads the cost basis out over several years, providing insulation against changes in market price."

Strongest lesson is to see what the herd is doing and to do just the opposite. When nobody is buying Real Estate you buy.

When everybody is pulling out of the stock market due to fear, you do the opposite and start investing.

The idea is consistency and measured. Avoid fear and greed!

For more information on investing and equity management please contact me at

917.660.3630 or send me an email at joel@joelsilberstein.com.

Sincerely

Joel Silberstein
Certified Mortgage Planner, CMPS
The Silberstein Group