Leon Williams

Why Use a Realtor Instead of An Unlicensed Foreclosure Consultant If You Are Short Selling Your House?

The current mortgage crisis has created a tremendous focus on our profession as real estate agents. Sacramento foreclosures have created distressed homeowners who are looking to Realtors® for answers to their problems and workable solutions. As a Realtor® it is my duty to present accurate information with a level of competency about this subject to homeowners and their families. As a Realtor® I have found this sorely lacking with some confusion, fear and frustration amongst my brothers and sisters. Unfortunately, in response to the overwhelming situation unlicensed "Foreclosure Consultants" are popping up and coaching families through this, and are giving the public the perception that their Realtor® is ill equipped to help them.

Civil codes takes very seriously anyone who represents themselves as a foreclosure consultant because they gain the trust of a homeowner during a very vulnerable time period and gives the consultant the opportuny to take advantage ofthe situation in an investment scam. Because Realtors® must uphold a code of ethics and a standard of business practice, it's clear that the public would be best served by seeking the advice of a licensed and trained agent for the current market conditions.

As Realtors® who have transactions that involve a home in foreclosure, we are cautious and document thoroughly our recommendations and demonstrate our ability to negotiate the short sale process. In the event of an unsuccessful short sale and a foreclosure results, it would be prudent to have documentation as to why it happened.

As a Realtor® who is a Pre-Foreclosure Coach, I have created a simple, informative presentation that addresses the homeowner's options, the foreclosure timeline, and creative strategies that make sense. It will help you assess your situation quickly and allow you to determine what course you may want to take.

If you would like to set up a free Pre-Foreclosure Coaching consultation please complete the Contact Form and someone will contact you within 24 hours. Don't let the amount of Sacramento Foreclosures stress you.

How Not To Turn $20 Into A $75,000 Disaster!

This is What Happens When You Don't Use "Total Asset Optimization Principles"

Anyone With A Job Can Build A Nest Egg On "Steroids"

Whether your financial status is considered lower income, middle income, upper income, or super rich you have the ability to grow a nest egg on "steroids". It's the system that you put in place that determines if you will be the "robbing Peter to pay Paul" person in life or the "everything seems to fall in your lap" person. The choice is yours.

Root of All Evil

To understand how "NOT" to turn $20 into a $75,000 disaster I have to first lay some ground work on this "thing" called "Total Asset Optimization". Let's begin this discussion by emphatically stating, I Believe the lack of "Total Asset Optimization" is one of the largest contributors to strife in American Society. I believe passionately that the lack of knowledge and ability to grow in our financial lives causes many "ills" for the American people. Gang Violence, hatred and intolerance, divorce and the subsequent breakup of the family unit, road rage, jealously and a host of problems stems from our inability to prosper not only financially, but in all areas of our lives, and is rooted in our self-worth or lack thereof.

"Get Your Financial House In Order And Save The World"

The Have's And The Have Not's

Because the prevailing barometer of human value in this country seems to be "who has the largest home, biggest boat, best designer clothes and accessories, etc, we are constantly setting ourselves up for failure. Heck, with this kind of barometer all you have to do is drive to work in the morning and after watching all of the people in traffic driving new expensive cars that they can't afford but bought anyway, you can feel pretty bad about yourself by the time you arrive. This constant between the "have's and the have not's" has been raging like an indiscriminate virus wreaking havoc upon the social economic layers of our society.

Total Asset Optimization Defined

Let's break the phrase apart. The word "Total" is easy, Webster defines it as:

Total - 1. "An entire quantity or amount". 2. "Complete".

Now let's look at the word "Asset". Webster has several definitions for this but focusing on our use of it we get:

Asset - "An item of value owned". And if we further define "Value" we get: Value - 1. "A fair return or equivalent in goods, services or money for something exchanged". 2. "The mandatory worth of something". 3. "Relative worth, utility or importance".

And lastly, let's look and the meaning of "Optimization":

Optimization - An act, process, or methodology of making something (i.e. a design, system, or decision) as fully perfect, functional, or effective as possible.

So we can say our definition of "Total Asset Optimization" is:

The process of taking every area of your life that has value, and designing and implementing a system whereby each of those areas operate as fully perfect and as effective as possible.

In Real Life

In real life Total Asset Optimization is akin to looking at the various parts of our lives like the parts of an automobile. Ask yourself the question, is the quality of your life like a 3-cylinder Yugo (lower income), where it gets you around but don't try to climb any steep grades of pavement? Is it a nice comfortable family car or van (middle income) that's great for getting a lot of people inside (kind of one size fits all), but not very exciting? Is it a nice luxury car with all the trimmings of apparent success (upper income)? Or is it a high performance vehicle that goes 0-60 in 5.2 seconds (super rich)? Whatever car it is they all have one thing in common, parts that work interchangeably. Whichever type of car represents your life (lower income, middle income, upper income, super rich), unless all the parts of your life are working in unison and operating at optimum efficiency, your life as a whole will show it's inefficiencies and run as efficiently as the weakest part.

Remember, the weakest link in the chain will always determine the overall effectiveness of any strategy.

Getting Off My "ASS" ets

What is the first thing that comes to mind when I mention the word "ASSET"? Probably money, stocks, bonds, cash in savings, etc. If I asked 100 people that question I would probably get the same answer 100 times. If I ask those same 100 people, what the most important thing in their lives were you would not get those same answers. We spend the majority of our lives chasing things that are not the most important to us and we wonder why most of us never attain them. Answers you would get would be things like family, friends, relationships, spirituality, education, wisdom, learning, integrity, etc. This brings me to a particular point. We all have to take assessment of our life and come up with a plan on how we are going to attain meaningful balance. When I am speaking with my clients I will forward principles taught to me by Douglas Andrew, Author of the bestselling Missed Fortune books. Doug is on the board of Empowered Wealth LC. This is a company started by the man who taught Doug these principles, Lee Brower. I briefly want to mention that Empowered Wealth organizes life's "ASSETS" into four quadrants shown below.

Assets

And as we said above, when I ask most people what their most important "ASSETS" are that they own? I have never had anyone say the lower left quadrant (financial assets). They will usually be in the upper left or right quadrants.

We always begin the conversation with our clients about all four quadrants so that when we are discussing their financial assets, we are doing so with the most important assets on their mind. How often do you see people with lots of financial assets but are still so miserable that you would consider them "poor and destitute". The one thing that I wish to impart here is everything you do financially is rooted with all four of these quadrants in mind. What you will see me teach you is primarily about growing the financial assets, however it is usually very difficult and unfulfilling unless you grow them in unison with the upper quadrants. When you "OPTIMZE" the upper quadrants the lower quadrants seem to grow on steroids.

Some of the Most Mundane Decisions Cost Us Dearly!

The average working taxpayer might look at the phrase, "Total Asset Optimization" and think that can't possibly apply to them. What I am about to share with you is the same principle whether I am talking about $200,000 home or a $2,000,000 home. I am here to tell you that some of the most mundane decisions we make in our lives can have rippling effects on our ability to save and grow money for emergencies, college, vacations, or retirement. A couple of years ago, I believe it was December 2006; we had an unbelievable cold spell in Sacramento. It was extremely difficult to keep your water pipes from freezing. I was driving through this neighborhood of working class homes and I saw three emergency sewer cleanup trucks parked at three different homes on the same block. Driving passed that scene I immediately envisioned an imaginary movie where I all but played out the chain of events that took place leading up to this incident.

The next day as I was driving past these homes again I decided to stop and inquire about the circumstances of those emergency sewer trucks parked outside the day before. My curiosity had gotten the better of me and I just had to know if the movie I had played in my head was correct. Well as it turned out, it was pretty much as I had envisioned. After speaking with the homeowners, I learned that all three homeowners did not have the optional sewage coverage in their homeowner's insurance policy that might have paid for the damage.

By The Way...

The optional insurance coverage which is rarely offered by the insurance agent because of the way people shop for insurance coverage, is usually only $20 - $40 extra per year if it's available by that particular carrier.

In fact, the way most people shop for insurance and just about every other financial service is "How much is your policy going to cost me". No thought is given to finding the professional who will assess your situation thoroughly and suggest proper coverage based on your particular set of circumstances. Most agents understand that most consumers don't want to hear that. They believe and rightly so, that most consumers just want to choose whoever is going to quote them the lowest premium. That is of course until they actually have to use the policy. By the way, all three homes were flooded with sewage causing at least $15,000 in damage based on my experience with other homeowners I know who were in similar situations. Now, imagine if we were talking about a $2,000,000 home. In any case, at least two of the homeowners did not have an Emergency Fund readily available and could not get a home equity loan as they had either purchased their home incorrectly (they did not use a Certified Mortgage Planning Specialist) and had no equity or no safe side fund. And remember, the more expensive the home the higher the damage amount.

Who is To Blame?

All of the people in the transaction above, Realtor, Loan Officer, Title Agent, Appraiser, Insurance Agent, etc. in that home purchase transaction, all had different agendas. Including the homeowner, as all they were trying to do was find the cheapest insurance they could. Where was the person that was looking at the transaction and providing the consumer with information as to the correct size house to purchase, correct mortgage product that would fit in with their long term and short term payment, investment and cash flow decisions. Where was the insurance professional who would properly assess the client's needs and not just attempt to beat out the competition?

What Did The Mistake Really Cost?

In the example above it really was not a $15,000 mistake you see two of the homeowners had to take the funds necessary to repair the damage from sources meant for building retirement. Let's say that over the next 20 year period that $15,000 would have accumulated at 6% compounding yearly. In twenty years that would be $49,712.36. At 8% that would be a whopping $74,058.75 blunder! Wow. I never knew a $20 bill could be worth so much! The lesson was this, because the homeowner was only concerned about the individual pieces and the how those pieces worked together, the trivial $20 to $40 per year they would have spent turned into a $15,000 catastrophe then mushroomed into a $50,000 - $75,000 avalanche.

What Should You Take Away From This

Ok Leon, you've been spouting off at the mouth, what does all this really mean? Well it means;

1. Everything we do had lasting repercussions and reverberations throughout the universe.
2. It doesn't matter where you are in your financial life you can grow your assets by following time tested principles.
3. If you do not worry about the upper quadrants of your assets, even if you do manage to accumulate financial assets they will not last very long because your most important assets are lacking in substance.
4. Anytime you meet with a financial professional in any area; real estate, mortgage, financial services, insurance, taxes, listen to see what questions that professional asks you. If they are not at all concerned with how this particular decision you are making affects the other areas of your life, RUN!
5. The same as #4, but RUN REALLY FAR!!!

Leon C. Williams

Financial Strategists

Online Business Card - http://bizcard.leonwilliams.me

leon@lucafinancial.com

Subprime Mortgage Meltdown Leaves Borrowers Facing Crisis

With credit requirements tightening, borrowers have fewer choices in mortgage loans

Sacramento, CA, July 7, 2008-As record numbers of foreclosures pervade the subprime market, lenders are becoming more and more anxious, and as a result, they're tightening their mortgage loan guidelines. These more stringent guidelines, many of which relate to credit scores, are making it difficult to impossible for individuals with less-than-perfect credit to secure the loans they need-whether to buy a new house or refinance a loan to keep their homes out of foreclosure.

"Borrowers are facing a very difficult time these days," explains Leon Williams, Certified Mortgage Planning Specialist and Asset Optimization Specialist, with NueStart Financial Services, a mortgage brokerage company based in Sacramento, CA. "For instance, last year a borrower could get into a 30 year fixed with a 500 score, and now they need a 580 to qualify. Lenders are much more cautious these days."

Traditionally, the subprime market has offered a less stringent standard of underwriting mortgage loans, providing borrowers with lower credit scores the opportunity for financing where traditional lenders may have turned them down. Now that the subprime segment is not only losing players, but also subjecting borrowers to more scrutiny, fewer opportunities exist for certain borrowers to secure financing. One of the primary difficulties that current borrowers of subprime products face is the inability to secure financing to replace adjustable rate mortgages that have adjusted to a higher interest rate, sending the monthly payment skyrocketing above the initial minimum payment amounts.

Despite the fact that the industry is seeing much more stringent policies among lenders of subprime and nontraditional loan products, guidelines for underwriting standard loans have remained largely unaffected. The Federal Reserve Board's Senior Loan Officer Opinion Survey on Bank Lending Practices released in May 2007, states that policy toward standard loans remains largely unchanged. Over half of the banks that responded to the survey reported tightening standards on subprime loans, nearly half did the same for nontraditional loans, but only 15 percent said they changed requirements for prime residential mortgages.

It remains to be seen how the prime market will be affected by the subprime crisis in the future. "The bottom line is that regardless of the market, there are always good people in need of mortgage financing," states Williams. "The key is to get them into mortgage loans that can help them thrive. For some, that takes credit repair or some form of analysis to help them improve their credit scores. A person's credit score can be improved upon with some help."

Credit repair is increasingly becoming a necessity for borrowers with subprime credit scores. "A whole segment of the lending industry is disappearing," explains Edward Jamison, president of Los Angeles-based Jamison Law Group, PC, a national credit repair and restoration company. "Because lenders are tightening their requirements for credit scores, borrowers with less-than-perfect scores are finding that they have fewer and fewer options. Credit repair can be their only recourse, or can be a means to getting into a better loan."

"Today's top mortgage professionals have the resources to assist their clients in a wide range of issues effecting their financial well being, whether that's recommending a financial planner or a credit repair specialist," states Steven Marshall, president of Strategic Equity, a Seattle, Washington-based company providing training to the mortgage industry. "This business is no longer about simply saying yes or no to a loan request. For today's top professionals, it's about being a knowledgeable and well-connected resource for the borrower to get the absolute best loan for their financial situation."

Despite the slowing real estate market and subprime crisis, prime refinance activity is still strong. According to Freddie Mac, refinances accounted for over 40 percent of the total number of loan applications for the first quarter of 2007. Of those refinance loans, 82 percent resulted in a new loan balance at least 5 percent greater than the unpaid balance of the original loan. In the first quarter of 2007, Americans completed an estimated $70.5 billion in cash out refinances nationwide, just slightly below the $77 billion that was cashed out in the fourth quarter of 2006.