Matt Malouf

Did you see the good news? Title insurance giants First American Corp. and Fidelity National Financial Inc. reported great news on the average number of title insurance orders per day. Fidelity saw orders leap from 5,000 orders per day in October and November to 14,200 title insurance orders per day in January. First American said that orders jumped from around 5,500 orders per day to 10,000 per day in January. Fidelity said that the second week in January was especially good with orders of about 16,000 per day.
How good is business for these two title insurance giants? Fidelity has already received permission to raise its rates by 10% in California and First American is right behind them asking for a 10% increase in the golden state. Fidelity Chairman William Foley told a conference call that the company has already revised its rates in 21 states with some being increased by as much as 20%.

Are increased orders per day from 5,000 to 14,200 or by 184% evidence of a bottom? Are increases in rates between 10% and 20% evidence of a bottom? Every investor has to decide for themselves, but it is great to get good news for a change.

Seller financing can refer to one of two things:

1. The seller can act as a bank and rather than receiving all or a portion of their equity at close, they can "lend" it to the buyer and receive a regular payment as agreed. They may receive no payments, interest only payments, principal only payments, or a combination. It could be an interest only loan, or an amortized loan. Additionally it could carry either a fixed rate interest payment or a variable rate. These will vary depending on the agreed upon terms of the contract between the buyer and the seller.
2. The seller can allow the buyer to "take over" the loan that he or she has in place. This can be done in two ways. The first way is called an "assumption", wherein the lender formally allows the buyer to assume the loan. This entails approval of the buyer's credit, and often a modification of existing loan terms. The other method is called a "subject to" where the lender is not contacted, and the buyer purchases the property "subject to" the existing financing. This can be financially risky in many ways, since many loans have acceleration clauses which permit the lender to call the loan due if the property is transferred. However, more often than not the lender will not exercise the "due on sale clause" if the payments are being made on the underlying mortgage(s). In the rare event that a lender does call the loan due then an investor could quickly sell the property or pay off the loan using any one of the various financing options available.

Strategies to help you pay off debt

Always pay more than the minimum.

By only paying the minimum amount due each month, you are likely paying the credit card companies thousands of additional dollars in interest. Instead of only paying the 2 or 3 percent minimum outstanding balance, cut out some luxuries to pay off debt. Do you shop too much to keep up with the latest fashions? Go out for dinner and order drinks and dessert? Cut some of these luxuries out and apply the extra money to your debt repayments. To pay off debt takes time and dedication!

Focus your debt payments to pay off your debt

To quickly pay off debt you can focus all your repaying power onto the one or two credit accounts that carry the highest interest rates. Also, try and transfer as much debt as you can from higher interest carrying accounts to the lowest interest rate accounts. As you begin to pay off your debt, you will increasingly have more and more amounts of money to pay off the debt! This is because money that was previously spent on interest will now be sitting in your bank account paying you interest!

Empty your savings account

And use the money to pay off debt! Most bank accounts don't earn nearly the amount of interest as you are likely paying on your credit balances. Taking into account federal and state taxes and you would have to be earning a significant more amount of money than you probably are.

Borrow through your life insurance to eliminate debt

If you have life insurance that carries a cash value...borrow against the policy! Even though you are basically borrowing against yourself, it will most likely be at a much lower rate than you are paying on your outstanding debt balances. Pay off debt with insurance when you know you'll be able to replenish the account in the near future. Any money borrowed against the account and not repaid back will be deducted from the face value of the policy whenever you end up kicking the bucket.

Ask friends and family to help you pay off debt.

In a worst case scenario you can always look to friends and family for financial help. If you can convince them to lend you money to pay off debt, then you'll probably garner a favorable interest rate. The downside is that borrowing money is one of the fastest ways to cause family strife. Be very careful with this option and use it as a last resort. Certainly write up a written contract including the repayment schedule.

Consider a home equity loan

If you own your own home and have built up some equity, consider taking out an equity loan or line of credit to pay off debt. The interest on a home equity loan will probably be somewhere between 8% and 10%, but with the tax advantages, the effective interest will be somewhere closer to 5% to 7%. By applying the proceeds of the loan to you outstanding debt, you will be able to favor a much lower interest rate. The only thing to watch out for is you don't go rack up more credit card debt after you just paid off your balances. Then you will have lost some of the equity in your home and also have racked up additional debt! Now you are twice as worse off as when you started! Watch out!

Paying off your debt by borrowing from your 401k.

If you have a 401k it could be another great source of funds to pay off debt. Many 401k plans allow the participant to borrow either 50% of the accounts value, or $50,000, whichever is smaller. Interest rates are usually about one to two percent above prime, and thus much cheaper than that found on credit card accounts.

Negotiate with your creditors about your goals to become debt free

If all else fails and you're still feeling the squeeze of debt then consider informing your creditors of your financial situation. Let them know that you are considering filing for bankruptcy and that if they are unwilling to negotiate you will be forced to file for bankruptcy. To pay off debt you can ask for a lower repayment schedule, request a lower interest rate, and remember that they will do anything they can to at least get some of the money back.

If all else fails, consider bankruptcy.

When debt repayment is impossible consider filing for bankruptcy. The fact that you filed for bankruptcy will be apparent on your credit report for 10 years making it difficult to obtain credit during this period. There are two types of bankruptcy Chapter 7 and Chapter 13. Chapter 7 allows discharge of almost all your debts. The debts not discharged include alimony, child support, taxes, loans obtained through filing false financial statements, loans not listed in the bankruptcy petition, legal judgments against the petitioner, and student loans. Even though Ch 7 lets you get out of paying most of your creditors, you will likely lose much of the property you own to pay back your debts. But in general, you usually get to keep your car, tools of your trade, your home, and much of your personal property. Ch 13 is a bit different. It's called the wage-earner plan because if forces you to give up control of your finances to the bankruptcy court, but it allows you to keep your personal property. The court maps out a plan for you to pay back your creditors over of a three-to-five-year period, and is based on your financial resources at that time.

Many people are concerned that now might not be a good time to invest commercial properties. However, consider these interesting facts:

Commercial properties have held their value despite the recent downturn in housing prices
Foreclosed homeowners are moving back to apartments and pushing vacancies down
Office and retail property owners who are worried about the economy are more willing to sell on creative terms Private lenders, tired of the stock market, are looking for other places to place their funds
In addition to it being an excellent time to invest in commercial properties, you'll find that commercial investing offers you four wonderful advantages:

Increased Cash Flow: If your rental home doesn't have a tenant, you won't have any income coming in. Unfortunately, you still have to pay all the expenses! If you own a twenty-unit apartment building, however, you still have the other eighteen units sending you payments even if two tenants leave.

The Manager Deals With It: Because you have multiple tenants all in one location, you can afford to hire full-time property managers for your properties. This means more free time and relaxation for you.

Predictable Cash Flow: Unlike the one-year leases common for homes, commercial tenants are usually locked into your lease for multiple years. In addition to paying the rent, they also pay for the taxes, insurance, and property upkeep.

Cash Flow & Property First, Borrower Second: When you buy a single family home, the lender looks at you and your credit first and the property second. With commercial properties, the lender looks first at the cash flow, then at the condition of the property, and lastly at the borrower's credit rating.
It is important to choose the type of commercial investing that best matches your particular needs and interests. Here are the advantages and disadvantages of the various types of commercial investments:
Apartment Building Investments: Apartments are great commercial real estate investments because they're easy to find, banks love to lend on them, and they're great cash flow generators. We recommend you invest in at least one apartment building before you consider investing in any of the other commercial asset types.

Retail Centers Investments: Retail centers (also called shopping centers or malls) are great commercial property asset types for certain investors. These properties are leased out on a long-term triple net lease basis where the tenants pay for all the expenses. What does this mean for you as a commercial real estate investor? Your rates of return won't go down over time as the taxes and expenses go up. As a matter of fact, as rents go up over time, your returns just keep getting better and better.

Office Building Investments & Warehouse Investments: This type of investing can't be beat for passive income generation. A triple net lease is used, which means the tenants pay for their rent and maintenance/repairs, property insurance, and real estate taxes. After the tenants pay for all of the expenses and you pay the mortgage, the rest goes into your pocket. You can even hire a property management company to find the tenants for you.

Hotel Investments & Resort Investments: This investment type is not for the beginning commercial real estate investor. However, experienced commercial real estate investors find this type of asset to be fun and highly profitable to own. It's highly recommended that, as an investor, you do not attempt to operate the investment property - just invest in the hotel or resort, then lease it to another company to operate it.

Land Development Investments: This is one of the most exciting types of commercial real estate investing. It can also be an area that will teach you some quick and painful lessons if you jump in without know what you're doing. If you take land that isn't yet fit for building through the development approval process, you can dramatically increase the value of the land and your profit. Starting small allows you to get comfortable with the land development process before tackling the more challenging investments requiring the investor to raise millions of dollars.

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Fallacy #1: A poor score will haunt me forever.
Fact: Just the opposite is true. A score is a snapshot of your risk at a particular point in time. It changes as new information is added to your credit bureau files. Scores change gradually as you change the way you handle credit. For example, past credit problems impact your score less as time passes. Lenders request a current score when you submit a credit application, so they have the most recent information available. Therefore by taking the time to improve your score, you can qualify for more favorable interest rates.

Fallacy #2: My score determines whether or not I get credit.
Fact: Lenders use a number of facts to make credit decisions, including your FICO score. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high.

Fallacy #3: Credit scoring is unfair to minorities.
Fact: Scoring considers only credit-related information. Factors like gender, race, nationality and marital status are not included. In fact, the Equal Credit Opportunity Act (ECOA) prohibits lenders from considering this type of information when issuing credit. Independent research has been done to make sure that credit scoring is not unfair to minorities or people with little credit history. Scoring has proven to be an accurate and consistent measure of repayment for all people who have some credit history. In other words, at a given score, non-minority and minority applicants are equally likely to pay as agreed.

Fallacy #4: Credit scoring infringes on my privacy.
Fact: Credit scoring evaluates the same information lenders already look at - the credit bureau report, credit application and/or your bank file. A score is simply a numeric summary of that information. Lenders using scoring sometimes ask for less information - fewer questions on the application form, for example.

Fallacy #5: My score will drop if I apply for new credit.
Fact: If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called inquiries) will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score.

Fallacy #6: Paying off a collection will raise my FICO score.
Fact: Paying off a collection can actually reduce your score. Since the guideline for credit scoring software is the date of last activity, recent payment on a collection account has a negative impact on your score. The old derogatory item has become a current derogatory and will reduce your score. What is the best way to handle this? These items need to be negotiated with the creditor to be deleted, rather than reported as paid.