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The "F-bomb" is all over the internet and even being played up by the media today. No, I am not talking about that one, rather the "FEAR" factor. You cannot hardly turn on the TV, radio, or even computer without getting hit by news that the DOW is down over 700 points for the 8th straight day. CNBC, CNN, ABC, CBS, blogs, etc. all are adding to that fear factor and even the so-called financial gurus like Suze Orman are playing off those fears, telling everyone that "cannot sleep at night" to get out of the markets.

And then we wonder why the markets have collapsed as much as they have?

The media is in it for money. You can't tell me that there aren't people making a fortune off the stocks collapse and the fact ALL markets are tanking. I guarantee there are a lot of people making a killing off it, the media included in all likelihood.

Now, is that reason to get out of the markets right now? NO. Should you transfer funds or even change strategies? Not likely. Have your really "lost money?" Not unless you react as you cannot realize a loss unless you sell, just ask the IRS that question.

What should you do?

NOTHING, except maybe stop watching the news if it drives you crazy. Emotions are running the markets and fear is a very strong emotion. Once traders become rational in their thoughts again, and fears subside, the markets will return to normal, the DOW will eventually climb even higher than it was, and the world be acting completely different. It just takes time!!!

Look at history since it tends to repeat itself. Does it really matter if we go through another "Great Depression?" Maybe, depending on your financial situation, but as a whole, probably not.

Ever stop and think that maybe we need a crash in the markets to return to normalcy? I remember that in 2001, noone wanted to even mention recession, that is until 9/11 happened. Once a recession was announced, what happened? The markets tanked, then recovered.

What is so different now? Well, we have TMF that has finally been uncovered. What is TMF? Total mismanagement of funds. This doesn't just include the banking executives which are now falling left and right (though exiting with millions). No, it comes down to even the homeowner whom used their home as an ATM machine, bought more house than they should have, or mismanaged their finances some other way. Look at it closely and we can blame just about everyone in some way or another, but what does that accomplish?

Now, is government intervention the best solution? Not likely as history shows that while it may minimize the "valley", it also makes that valley last longer, so we can expect that the pain will continue so long as the government keeps up their actions. That being said, we will come out of this and the economy will return, as will the housing market, and even access to credit.

The best thing we all can do is stop reacting to our emotions and take back control. Once the fundamentals are reestablished, the markets will be able to recover. In the long run, nothing will have changed as the cycle will complete itself and things will look much better. When exactly will that happen? A large part of that is up to us.

These days, all you have to do is read the paper or turn on your TV and you will think that your money, especially your investments, are rapidly becoming worthless. Even many of the so-called financial gurus, such as Suze Orman, are telling you to get out of the markets, especially if you "feel" afraid of where they might be headed. Before you act on your emotions, think about it with your emotions removed.

Leaving your emotions out of your decision making, especially when it comes to finances, is very hard to do. However, making financial decisions using your emotions virtually guarantees that decision will be the wrong one. Fear is the biggest emotion that gets people to make stupid financial decisions. Love is the other big one.

Studies have shown that keeping your money in the stock market for the long run will yield a decent rate of return. If you take any 20 year span of the S&P 500 and look at the rate of return, you will end up with over 10%, even in today's crashing environment. However, studies also show that if you miss just a few of those best performing days, namely the top 5, your rate of return becomes negative. That's right, if you miss just the top 5 trading days, you will no longer have that 10% rate of return, instead you will be losing money.

So, why would you take your money out after the market crashes? Why would you change your investment plan. In fact, you should actually be acting opposite of what your emotions are telling you and start investing more money as the market crashes. Now, whether or not you invest when the market is down will depend on your strategy as well, but it does present a good opportunity.

In the current state of the economy, chances are we will see the Dow Jones Industrial Average drop significantly further. In fact, in the traders psyche, I feel the Dow needs to get at least below 10,000 before we can get back to a bull market (one where we see the Dow making significant gains long term).

To use myself as an example, I have not changed any of my investments around even when I knew that the market was going to tank. Since I also run a mortgage planning business, I have been following the ramifications for a long time and even forecasting some of what we have seen. You can check out my Florida Mortgage Report for more on that if you want. What I do is continue to contribute the same amount to my 401k and leave the rest alone since I know the market will recover in due time.

What should you do? Chances are you should be doing the same is me...nothing. If you have some extra discretionary money, you may even want to invest it at this time. Everything runs in cycles, including the market. That means that even if the market tanks significantly more, it will recover and climb higher as well, all in due time. Remember, you do not actually "lose" money until you sell it or transfer between funds. Knowing that will help you maintain your focus as well.

In these troubled times, it is more important than ever to maintain your investment strategies, even adding money to them, and keeping your emotions out of your decisions. Make sure you have an emergency fund, cash available easily that is not in a HELOC (Home Equity Line of Credit) or other credit vehicle, and a financial plan in place. Keep moving toward those financial goals and dreams and stay the course, which will likely make financial freedom a reality for you.

If you have been reading the Florida Mortgage Report for a while, you undoubtedly have read some of the posts about home equity and how easily it can be wiped out in a disaster. Every year as hurricane season approaches, I inform readers to make sure their home equity is prepared and protected, something that is not on any other emergency preparedness list out there.

Yesterday, just prior to jumping on the airplane to return to Miami, Florida, I learned that a Captain I flew with last month lost his home to Hurricane Ike. His home WAS located in Galveston, Texas. The reason I learned of his loss was through a company wide email. Now, I have not talked with him, but the email was to solicit assistance for him and his family, so I can only assume he was not fully prepared.

The truth of the matter is he and his family are not alone. The vast majority of Americans are ill prepared to deal with a disaster which causes the loss of one's home. Living under the false belief that home equity is a safe investment can yield financially disastrous results, a point seen after every disaster from fires, earthquakes, tornadoes, hurricanes, and the list goes on.

Insurance is not the only way to protect your home equity, in fact it may be of least importance to you. Most Americans, especially those focusing on paying off their mortgages the fastest ways possible, are placing themselves dangerously close to financial ruin. The reason is they are not prepared for the financial crisis that follows a disaster that takes their home.

I am only going to focus on hurricanes in this post, but every type of disaster requires its own planning and your mortgage needs to be an integral part of that plan. In hurricanes, you have two types of damage, windstorm and flooding. In this Captain's case, his home was located on the barrier islands and likely got more flood damage than windstorm, which presents a virtually unknown problem for those with homes over $250,000.

In the aftermath of every hurricane, you will find a large number of foreclosures, many due at least in part to this unknown fact. That fact is that flood insurance only pays out up to $250,000 and that leaves homes like this Captain's with a huge loss. Even if he has enough money to live, which is another problem most Americans are ill prepared for, he is going to take a major loss, a perfect example of home equity wiped away in a moment.

Adding to this family's problems is the fact they had a business that was lost as well. Many families that have businesses fail to plan ahead for the loss of income, or even destruction, of the business as well. As a result, when the business is lost in a disaster, they are hit twice as hard as they need to deal with not just the loss of their home, but a loss of income as well.

Most families that have their homes lost will struggle to find a new place to live, which is on top of their emotional loss associated with the destruction of their home and "memories". Most families that lose their home to a disaster, such as this family did, will have a mortgage that needs to be paid in addition to a new rent payment, and without an emergency plan, they will likely be faced with a choice, pay for their rent and have a place to live, or pay for their mortgage on an uninhabitable home. Sure, they can have their mortgage payments waived, however that time period will only be a few months and the rebuilding of their home will take much longer, even years.

Are you prepared for such a situation?

Take the time now, before it is too late for your own family, and make sure you have an appropriate plan to protect yourself, your finances, and your home's equity in case of a disaster. Having your equity trapped in your home actually places you in greater danger of losing it all, which is especially true if you do not have a sufficient enough emergency fund in place. Develop your comprehensive plan and incorporate your mortgage into that plan to maximize your protection.

Also, do not fall into the trap of believing a HELOC (Home Equity Line of Credit) can be used as an emergency fund. I have seen many financial advisors recommending them for exactly that reason, with families finding out the hard way that during disasters, they cannot access the funds. If your money is in the form of home equity and not cash, you will not be able to access it if your home is damaged or destroyed, so tap into now, before it is too late.

In the meantime, please pray for those affected by the hurricanes this season, especially for Hurricane Ike victims.

Unless you have been asleep or not paying attention to the news today, you have undoubtedly heard about Lehman, Bank of America (B of A), Merrill and AIG. With the news sending the DJIA down over 500 points today, traders are comparing the move to Black Monday of 1987, dubbing this as Black Sunday.

The good news for homeowners, or homeowner wannabes, is that mortgage rates drop when bad things happen in the stock market, or bad news develops surrounding the economy. That is, except for news of higher inflation, which causes mortgage rates to climb. Today is a good day for mortgage rates to say the least, and is probably a good day for you overall (more on that later).

Lehman filed for bankruptcy protection, essentially killing themselves. Since the government has stepped in to save Bear Sterns and recently bailed out Fannie Mae and Freddie Mac, it only seems right for them to continue their bailout program and save Lehman as well. After, the Fed cannot play favorites, right?

Next on our list is the announcement that Bank of America (B of A) will buy out Merrill Lynch, putting an end to 94 years of independent trading. Bank of America did make a bid to buyout Lehman, but walked away from it, favoring the bull of Merrill instead. Barclays also bid and balked in regards to purchasing Lehman, proving that none in their right minds would touch Lehman with a ten-foot pole. That means the Fed should be all over it, possibly next weekend.

Oh, and how can I not mention AIG, the world's largest insurer, struggling to stay afloat as well. AIG is looking for someone to lend them $40 billion and they may face insolvency today if the S&P cuts their rating and causes nearly $18 billion in collateral calls and swap payments. AIG has asked for Bernanke's help and, believe it or not, Bernanke and his gang turned their backs on them. I guess they will play favorites after all. Wait, I figured it out. They will go to great lengths to bail out financial institutions, but when it comes to insurance companies, they just let them fall.

You can bet these moves will not be good for the job market, or the economy in general, but it will help to lower mortgage rates, at least for the short term.

So, why is this all potentially good for you?

Besides the fact mortgage rates are ticking lower as a result, allowing you to potentially (still rather difficult, but doable) to access cheap money to buy a home or other investment, you likely have a great opportunity. As the "herd" heads for the hills, now is the time to buy up the solid leftovers and take advantage of when the herd comes back to the feast.

Remember, not too long ago, I warned of the effects of letting emotions enter into your financial decisions. Well, don't let your emotions rule you now, develop a plan of attack and get investing while the getting is cheap.

Many have inquired about my take on the government's takeover of Fannie Mae and Freddie Mac, even some in the media. I had been sitting be the wayside, actually taking care of business, and had set the issue on the back burner, until now.

Just why in the heck did the government take over Freddie Mac and Fannie Mae? And is it all for the better,or worse?

The obvious reason the government wanted to take over these two mortgage behemoths was to calm the markets, even to indirectly send mortgage rates lower in another feeble attempt to spur the housing market. After all, all other attempts failed, why not calm the mortgage backed securities market's fears by backing the money by the government?

...Read More Over at the Florida Mortgage Report...