Joel Silberstein Brooklyn NY Certified Mortgage Specialis

New York According to Deutche bank half of all mortgages to be underwater by 2012.

The headline of this article poses the following questions,

•1. What is that underwater mean? We know that an iceberg is mostly underwater and can do great damage. Obviously that underwater doesn't make it worthless.

•2. If it is underwater whose problem is it the banks or the consumers.

Underwater mortgages means, that you owe more on the house then its value. In other words the collateral is not enough of a security to the bank, which leads me into the answer for the second question,

Whose problem is an underwater mortgage, and the answer is the banks /lenders. When a consumer buys a piece of property if it is for the long term which means 7-10 years time the consumer already profited. 1) Tax deduction on mortgage interest, depreciation on value regardless if it does in fact depreciate or not. 2) By owning property they hedged against inflation and the erosion of the dollar 3) appreciation and most of the time tax free.

The only who stands to lose in an underwater mortgage situation is the lender, because the lender has to factor in collateral and security for their money, and an underwater mortgage or a declining economy offers no security for them the recoup their money quickly. But don't worry for the bank they got other ways and techniques to stay in business most likely they will make it up in rates and upfront fees.

In summary my message is, don't let the headlines scare you, it is merely an estimate that lenders need to make for themselves and not yours the consumer. As long as your plan for real estate is long term which it should be, and you are working with a Certified Mortgage Planning Specialist who is capable of advising you on the most recent cutting edge financing techniques you're in good hand and continue to buy real estate because it will make you wealthy.

For a consultation you can contact

Joel Silberstein
Certified Mortgage Planning Specialist, CMP
www.mortgageplannerview.com

Surviving a job Loss is by properly preparing for job loss. If you have a good job and you earn a good living make sure you have 6- 12 months of cash reserve put away in the bank. Don't have it invested just have it sitting in an account.

With news that Microsoft will cut an unspecified amount of jobs,

Pfizer announced that it will layoffs will be folded into a larger round undertaken by the combined company, which expects to shed more than 19,000 workers.

General Motors Corp. (GM) -- will lay off 2,000 more workers.

Home Depot the nation's biggest home improvement retailer said it would shed 7,000 workers.

Sprint said it would cut about 8,000 jobs.

Steel giant Corus Group said it would cut 3,500 jobs around the globe, 000 jobs.

Caterpillar the world largest Heavy Construction machinery will cut 20,000 jobs.

Dutch bank and insurance firm ING (ING) said it would eliminate 7,000 positions.

You cannot control the world but you certainly can prepare for survival. If you have a good job you need to built up an emergency cash account.

If you have equity in your house I would strongly suggest the following,

1. Refinance and cash out some equity, Preferably you should build up a emergency cash account of 12 months of your current income since it can take that long for someone to find a new job. If your spouse works as well you should include her income in the emergency cash account as well. This is what banks do, they borrow money from Uncle Sam for a cheap rate and they are hording cash right now to weather the storm.
2. If you cannot borrow that much at least built up 6 months of living expenses.

The most important thing when someone looses a job is not "Oh thank god I don't have a mortgage" it is how am I going to put food on the table. So if you are currently a high earning individual and you and you can cash out $150,000 you can survive a long time including to pay the mortgage in case of job loss. You have to plan for unemployment just like you plan for life insurance needs.

This what Mortgage planning is all about, planning security with the mortgage, as opposed to paying it off and ignoring all other factors like economy and retirement taxation and cash flow. For now it is all about Survival.

Sincerely,

Joel Silberstein
Certified Mortgage Planner, CMPS

www.joelsilberstein.com

FAQ by client's in today's market.

• Will signing a 4506 trigger an audit: No! A 4506 is a document order from to get a transcript of your taxes from the IRS system. it is not a reporting form, and every lender is pulling transcripts from the IRS to substantiate that your tax documents are real.

• Does it make sense to wait until rates come down?I don't think so because it is not a given that rates will come down. if there is the Slightest scare of inflation rates tend to go up. if there is more bad numbers from the Mortgage Bankers Association regarding default's rates might go up since it is more risk. Therefor don't wait if it is good now go for it refinance purchase or whatever it is you need to do.

• What do I do with the savings from the mortgage is there where to invest these days? Oh please, if you look at the market it is going to rebound maybe not today maybe not tomorrow but it will have to regain at least 80% of where it is currently at, that puts you in a wining position. keep in mind wealth keeps on flowing from stocks into housing and from housing into stock if it gets stuck at any pint in time at in any of the ssector's it stand the chance to loose its value.
• Should I Modify my loan even if I am able to make my payments? NO why would you? didn'tyou sign the document that you are going to pay back this amount each andevery month? If you lost your Job or have a difficult situation, the first thing you ought to do is to look for a new job and rain in a cash flow. If you cannot meet you monthly liability's then call your lender and try negotiating with them to drop the rate temporarily until you catch up and then you will pay the difference later once you have the cash or at the sale of the house.

• My lender told me that they will not modify the loan should I default on my loan so they'll take me more serious?It is highly unethical to stop making payment to lender just because you want a break from the payments. if it really an issue most lenders will settle with you even before you default on the payments. Sometimes when your income is low that despite the modification it will still be above your capability then the lender will refuse to modify disregarding the fact if you are in default or not. A great solution would be you short sale the house to a friend or relative and you lease back from your friend with an option to buy in few years. So your friend can make money off real estate you save your house and might even buy it back for less then original price. keep in mind though that if you modify you might need to wait 4 years to be able to get a new mortgage on your name.

• I recently opened a business and am making 4,000 a month should i tell my lender about it when they are asking fir a hardship letter when trying to modify the loan?. Tel them but mention to them that according to current underwriting guidelines self employment income needs to be averaged over 2 years. and if you just opened a business's they cannot count the full income as qualifying income.

• Should I consider Chater7 Bankruptcy if i have so much debt? Without rendering legal advice i can render practical advice there is a limit to how many times you can go bankrupt in a 10 year period of time. ttherefore make sure you exhaust other option before so you can reserve this tool for when all other options are not feasible.

There is allot of pain in the market because we are coming form the past if we can think about the future things always look brighter!

So lets go out there and make a bright future for ourselves.

Sincerely

Joel Silberstein
www.joelsilberstein.com

What a great lesson from HSBC on how to be profitable real estate.

HSBC Sold its headquarters building in LONDON for 1.09 billion pounds in May 2007 to a Spanish Company which agreed to lease them back at an annual rate of 43.5 million pounds a year.

Now they will buy back that same building for 838 Million Pounds. a 250, 000,000 pound profit. Hay anybody would be willing to deal with this kind of a weight gain in year ;-)

In addition to a nice chunk of profit at a time when banks struggle with write-offs, HSBC also gained its said 43.5 Million pounds the agreed leaseback they offered to their landlord.

It teaches us a very valuable lesson, That the primary goal of owning real estate is its gain and not just the idea of owning it. Although this s a Strong emotion it should come in secondary to profit.

Summary of lesson

• To sell when prices are high
• Negotiate a low leaseback so you can stay in the property for cheap rent (rent is cheap since everybody is buying hence rent is cheap)
• leave an option to buyback (hidden or unhidden)
• Buy before you are certain if the market is rock bottom or not, take your chance because either way you will make a huge profit. Waiting for the market to hit rock bottom is often impossible since we only know that the market reached its bottom is when it is already passed us.
• do it again and again and again

It is a great time to be alive it is a great time to learn investment's and real estate and it is a great time to take action

Sincerely

Joel Silberstein
Certified Mortgage Planner, CMPS
The Silberstein Group
917.660.3630
joel@Joelsilberstein.com
www.joelsilberstein.com

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.