Just a little story about something that happened with me this week. Being that I have taken on more of an educational roll in my career as of late, I found out that I'm entitled to some pretty reasonable insurance rates on my homes and car because of my chosen profession. Well, I've had one insurance agent that I've worked with for years...someone I'm loyal to and go to every single time I have an insurance need (except health insurance...for that, I go to myself being that I'm licensed to provide it). I called on the other insurance company last week because I wanted to find out for sure if they were able to lower my insurance rates and sure enough, they were able to lower the rates and by quite a bit.

What am I to do NOW? I've been loyal to my agent for years but, here's a chance for me to save some money during times where I really need to save some money!

Well, here's what I did. In my mind I truly felt the need to share this with my agent. After all, he's been my "go to" guy for years and the last thing I would want to do is get a new insurance policy without at least giving him a chance to match or beat my new quote. He's been good to me for years and he deserves to know if I'm shopping around for a new agent or for an additional agent. For all I know he may have just been off his game the last year or so and didn't think to look into my situation. After all, it's not like I ever asked him to do that so, I certainly can't fault him for that, could I?

Here is my email to my agent this morning:

"Ken,

I'm writing because I've been introduced to a company that specializes in giving insurance to educators. They are able to beat the homeowners quote on my Taft Street property by nearly $400 per year in exchange for me insuring my primary for about $70.00 more per year. This is something I am exploring and felt compelled to share that with you should you have anything you'd like to share or if you would like to try to match or beat their offer.

Will you please let me know? I'm looking to make a decision by weeks end.

Hope you are doing well.

Thanks.

Kurtis"


Why did I handle this situation the way I did? For me, it's simple. I've had clients leave without me knowing it and it felt pretty bad, especially when I never had the chance to compete. I can't imagine doing the same thing to my agent, especially since I've experienced first hand what it feels like to lose a client and not even know it. I later found out in most instances that it wasn't because they didn't like me, it was just because they were offered something a bit better than what they currently had and for whatever reason, were afraid to tell me about it. Shopping around is smart, not offensive and not something that anyone should be ashamed of. It's the right thing to do. I do it, you do it, most everyone does it. For me, I choose to give those who I've been with for years the right to compete fairly with other agents. His client base is his livelihood and he deserves a chance.

Even as I write this email my agent is shopping around for a new policy and I have no doubt I'll hear back from him any minute now. I feel better already.

Give those who you've trusted in the past a chance to compete with someone new. You will preserve your relationships, they will thank you for the opportunity and openness and you'll feel much better about the decision you ultimately make, whether you choose to work with a new person or stick with the ones you've already got, I promise.

Have a great week!

To Your Happiness,

Kurtis Kooiman, CMPS
Certified Mortgage Planning Specialist
Silverstar Finance, Inc.
Society of Financial Awareness
Kurtis's Active Rain
Kurtis's LinkedIn
Bus: (714) 892-1002 Ext. 313
Fax: (714) 892-1092

Parting Thought: "A good goal is like a strenuous exercise - it makes you stretch." ~ Mary Kay Ash

Quote of the Week:

"Anyone who has never made a mistake has never tried anything new."

Albert Einstein
Physicist


Will Homeowners and Buyers Lose $45,000?

Ann Arbor, MI August 13, 2009 – Federal Reserve officials met yesterday and issued a statement saying that their program to purchase $1.25 trillion of mortgage-backed securities will be winding down by the end of year. “The Fed is the single largest buyer of mortgage bonds in the market today,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “The way mortgage companies set their interest rates is by figuring out the price that Fannie Mae and Freddie Mac are willing to pay them for the mortgage. Fannie and Freddie set their price by figuring out what investors on the bond market are willing to pay them for the Mortgage-Backed Securities (mortgage bonds) that they issue. When the Fed stops buying mortgage-backed securities, the demand for these bonds will be much less, and mortgage rates will go higher.”

Since the Fed began purchasing mortgage bonds and intervening in the mortgage markets, interest rates on fixed rate mortgages have dropped a full percentage point below where they would be otherwise. “Take out the Fed’s subsidy, and mortgage rates are likely to drift back up by at least one percent,” Nicholas said. “A one percentage point increase in mortgage rates – from 5.25% to 6.25% - would cost an extra $127 per month and $45,730 in interest over the life of a $200,000 30 year mortgage. This is exactly what could happen in 2010 once the Fed stops buying mortgage bonds.”

Fed officials have been signaling for some time that their unprecedented interventions in the mortgage markets may come to an end or even be reversed once the economy begins to improve. “While we don’t believe the Fed will start selling mortgage bonds right away, we do believe that rates will start drifting higher in 2010 once the Fed stops purchasing mortgage bonds,” said Nicholas. “After all, it’s not every day that the Fed spends a whopping $1.25 trillion to subsidize mortgage rates. Take out this enormous subsidy, and the average person with a $200,000 mortgage who refinances or buys a house stands to lose $45,000 over the life of their home loan. That is why homeowners and buyers should really talk to their Certified Mortgage Planning Specialist and take advantage of this window of opportunity to refinance or buy a home while rates are artificially low.”

I hope that you found this information to be useful and informative.

Whether you're considering a refinance or buying a new home, don't make the mistake by trying to time the market. You may live to regret that mistake for many years to come!

Have a great week.

To Your Success,

Kurtis Kooiman, CMPS
Certified Mortgage Planning Specialist
Silverstar Finance, Inc.
Society of Financial Awareness
Kurtis's Active Rain
Kurtis's LinkedIn
Bus: (714) 892-1002 Ext. 313
Fax: (714) 892-1092

Parting Thought: "A good goal is like a strenuous exercise - it makes you stretch." ~ Mary Kay Ash

So the question is, do you qualify for the any of the new mortgage programs?

Hopefully I've helped clarify some of the confusion...unfortunately, there's probably more coming. =)

All the best,

Kurtis Kooiman, CMPS
Certified Mortgage Planning Specialist
Silverstar Finance, Inc.
Society of Financial Awareness
Bus: (714) 892-1002 Ext. 313
Fax: (714) 892-1092

Parting Thought: "Education is the ability to listen to almost anything without losing your temper or your self-confidence." ~ Robert Frost

FHA Launches New Program to Help Lenders Refinance Troubled Loans

The Federal Housing Administration (FHA) rolled out the new Hope for Homeowners (H4H) program on October 1. The program was created as part of the larger Economic Recovery Act of 2008 passed by Congress this summer, and is aimed to help struggling borrowers avoid foreclosure by refinancing into more affordable, sustainable, FHA-insured mortgages.

H4H lets lenders and servicers with homeowners at risk of default or foreclosure turn "beyond-their-means" home mortgages into new government-backed 30-year fixed rate loans with lower payments. FHA said that given their fiduciary responsibilities and financial obligations, lenders should assess their portfolio and perform a cost-benefit analysis to determine the feasibility of offering the program to struggling homeowners.

Lenders will take a loss on the difference between the original principal obligation and the new loan, which is set at 90 percent of the current appraised value. It may be a more valuable option for the lender to provide homeowners with an affordable monthly mortgage payment through a loan modification, rather than accepting the losses associated with declining property values under a new H4H loan. Participation in the program is up to individual lenders, but as the FHA points out, in many instances they may find it is less expensive than foreclosure and disposition of property. Upon participation in the program, the FHA will also give lenders an interest in FHA's share of any future appreciation in the property.

Lenders that determine the H4H program is a feasible and effective option for mitigating losses must assess the borrower's eligibility using the following criteria:

- The existing mortgage must have originated on or before January 1, 2008.
- Existing mortgage payment(s) as of March 1, 2008 must exceed 31 percent of the borrower's gross monthly income.
- The homeowner did not intentionally default, does not have an ownership interest in other residential real estate, and has not been convicted of fraud in the last 10 years.
- The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced.

Under the new program, FHA can insure up to $300 billion in mortgages. The Congressional Budget Office (CBO) estimates that the new H4H program will save at least 400,000 homeowners from foreclosure. The program is effective through September 30, 2011.

For FHA's full explanation of the Hope for Homeowners program, including Fact Sheets and FAQs, click here.

Who are you going to choose to work with during these times?

Our team at Silverstar Finance understands what's going to be involved in getting this process done efficiently. As the banks start to get named, banks will be flooded with applicants and will likely be overwhelmed with the process. Your clients, our clients, your friends and family, our friends and family need to have an ally with them to help them communicate with the bank effectively and get the documentation to the bank in a package that looks great and has them qualified. We all know that working directly with a bank can be frustrating and ineffective, and that's now even before this package hits the market place with full force. The sooner people inquire, the better off they will be. Please consider sharing this email with your database. Your friends, family, and clients are looking for answers and while this government idea may not be the very best solution for everyone, it's certainly a step in the right direction.

Silverstar Finance has been serving Southern California and most Western States for 10 years. Refer to a company you can trust to do right by you and your clients.

Have a great week!

Kurtis Kooiman
Certified Mortgage Planner
Silverstar Finance, Inc.
(p) 714-892-1002
(f) 714-892-1092

Society of Financial Awareness
(p) 714-892-1002
(f) 714-892-1092

Only Successful People Fail

"When you make a mistake, don't look back at it long. Take the reason of the thing into your mind, and then look forward. Mistakes are lessons of wisdom. The past cannot be changed. The future is yet in your power."

~Phyllis Bottome
1884-1963, Novelist and Lecturer


Good Afternoon!

Well, what can I say? These times are difficult and we all know it. While I see amazing opportunity in every downturn for those who have prepared for it by seeking pro-active advice from their team of experts, I'd rather take a moment to share with you exactly what has happened that has created the need for a 700 BILLION dollar "bailout." It's not really a bailout by the way, it's just what the media is calling it. I would like to give full credit to Barry Habib for the expert insight below:

"Crazy times. Whatever the political posturing, a plan needs to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".

Each day lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and if your neighbor was under duress because they got very ill, divorced, lost their job and was forced to sell their home quickly they may have sold it super cheap. Now, does that mean your house is worth that super cheap price? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.

Why is this so bad? Because as lenders mark down their assets the amount that they have loaned previously becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices. And this makes the vicious cycle continue.

And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages, are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. Its got some A paper, B paper, C paper, and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this the opportunistic shorting done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posture from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on."

Hope that cleared up at least part of the confusion with what's going on right now.

The congress is set to vote on the bill this evening. My opinion is that the bill will pass. I think that congress has now seen what will happen (777 point loss in the markets in one day) if they decide to vote it down again and I'm quite positive that there has been some major lobbying done this week to ensure its passing. If not, ouch.

Money doesn't create happiness, we all know that. It does, however, create a comfortable retirement. It's necessary that you work with a Certified Financial Planner and a Certified Mortgage Planner. If you are not working with one, you really do need to call or write me now. It's THAT important. If the past few weeks isn't enough to convince people of this, then being absolutely broke would be the only viable wake up call. That's not an option for you so, please, do the right thing.

The best way to refer me is to give me your referrals name and phone number and tell them to expect my call. I always have time to help you, your friends, and your family with their financial needs. Your referrals are appreciated.

Have a great week and keep an eye on your money.

To Your Success,

Kurtis Kooiman, CMPS
Certified Mortgage Planning Specialist
Silverstar Finance, Inc.
Society of Financial Awareness
Bus: (714) 892-1002 Ext. 313
Fax: (714) 892-1092

Parting Thought: of the population is controlled by money. The effect is lack of money. The cause is middle-class thinking." ~ Steve Siebold