Will Merritt

The Federal Housing Administration shook up Washington's mortgage and real estate leaders last week by announcing that it's shifting its entire production line to risk-based pricing -- starting this summer.

FHA plans to abandon its 74-year policy of charging all borrowers the same insurance premiums and interest rates, and to move to a system where applicants who present high risks -- low credit scores and low downpayments -- pay higher premiums.

Though private mortgage insurers have been using this approach since the mid-1990s, it's a big move for FHA. Currently the agency charges a standard one and a half percent up front premium, and a half percent annual renewal premium -- all of which are folded into monthly mortgage payments.

Under the new system, applicants with FICO scores below 560 and downpayments below five percent, will be charged a two and a quarter percent premium up front and 0.55 percent annually.

Low risk borrowers will almost all pay less than they do today: A 1.25 percent premium up front, and annual renewals of half a percent with downpayments of 10 percent or more. High FICO borrowers with score above 680 making downpayments of less than 5 percent will also save on upfront premiums, paying one and a quarter percent.

The switch should be good news for the majority of FHA new customers. Officials say the FHA program in 2008 is attracting a bumper crop of higher credit quality applicants with scores in the high 600s and 700s.

FHA's volume is also booming -- it's doubled in the past six months and could hit a 20 percent market share this year, according to mortgage banking industry analysts.

Though some Democrats in Congress and private mortgage insurance competitors have criticized FHA's risk-based pricing plan, the agency says it has both the legal authority and the business "imperative" to prevent losses to its insurance fund caused by low-FICO home buyers, especially those using seller-funded downpayment "gifts."

In its official outline of its plans in the Federal Register last week, FHA rejected criticism that low-income borrowers will pay more. To the contrary, a statistical analysis of FHA's 2007 vintage of customers found that applicants with lower incomes had higher FICO scores on average than applicants with higher incomes.

All of which means that anybody with solid credit -- irrespective of income -- should get a better deal from the new FHA approach than they would have gotten under the old system.

In the current credit crunch, that's gotta be good news.

Here's a question which ought to cause some thought: Why is it -- if we're in the middle of a mortgage meltdown -- that interest rates are both low and falling?

With fewer lenders, fewer loan products and tougher qualification standards you might reasonably expect nervous investors to want higher rates to compensate for more risk. Instead, we're seeing just the opposite.

• Freddie Mac reported that interest levels for 30-year fixed-rate financing dropped to 5.88 percent plus .4 points last week. This rate is not much above the historic levels reached during the summer of 2003 when fixed rates dipped to 5.21 percent with .5 points.

• The one-year LIBOR rate hit 2.51 percent in March, according to HSH.com, a financial publisher. A year ago the index was at 5.32 percent.

• The ever-conservative 11th District Cost of Funds Index is at 3.56 percent -- down from 4.3 percent a year ago.

The declines we're seeing with interest rates appear to make no sense -- unless the supply of mortgage money continues to remain at exceptionally high levels. That's apparently the case, otherwise how else can one explain today's mortgage levels?

For most of us the reason why rates have fallen doesn't actually matter. What does matter is that rates are low relative to both recent levels and historic standards. Whether such bargain-basement interest levels will continue cannot be assured -- and that's reason enough to speak with a mortgage professional like Will Merritt www.tampabayloanofficer.com if you have an interest in financing or refinancing real estate at this time.

The Law of Attraction is potentially one of the most powerful tools you'll ever have as a Real Estate Agent. Why? Because it helps you to train your mind into a successful and prosperous mindset. In other words, if you practice the Law of Attraction you're always looking at the opportunities for growing your business rather than the obstacles.

If you're not getting the results you want with the Law of Attraction, it's possible that you might be making these common mistakes:

1. Failure to switch focus

It may be that when you start looking at what you don't like about your business, i.e. the difficult clients, the "fallen transactions," and the continual need to prospect, you may be focusing on what you "don't want," instead of what you do want. The Law of Attraction states that you get what you focus on. Focus on the difficult clients long enough, and that's what you will bring more of.

2. Failure to identify what you "do want"

You may be spending so much time and energy trying to eliminate what you don't want, like unqualified clients; you may not be getting clear on what you do want. If you don't want unqualified clients, then what are the characteristics that you really want in prospective clients?

If you're like most people, you want prospective clients to be qualified, committed, and motivated. Then focus on that. Whenever your mind wanders, keep coming back to what you want to create.

3. Focusing on current circumstances

According to the Law of Attraction, current circumstances do not have to define you. They are based on your old decisions and your old beliefs. Now that you are learning the Law of Attraction, you have a chance to start fresh.

Never mind your current conditions, instead ask yourself, "What do I want to create?" Set your intention and don't waver.

4. You get worried about the "how to"

According to the Law of Attraction, "how to" is the domain of the universe. You don't have to know the details. You just have to know what you want, and why you want it. Let the Universe figure out the "how".

5. You take "frantic action," rather than "inspired action"

Frantic action is fear-based. You are being reactive rather than proactive. Inspired action" means that you're listening to your intuition, rather than on your linear mind. Intuition will come to you in the form of "Ah Ha" and gut instincts. Inspired action will feel good and it will feel right.

6. You may be forgetting to "visualize"

In the Law of Attraction, there is the saying, "whatever you visualize, you will materialize." It may be that in your business, you haven't taken some quiet time to visualize your desired outcome, for example, earning $500,000 a year on a steady basis (or whatever your ideal income is).

When you take time to visualize yourself having the prosperity you desire, then you can create the feelings of having it now. Since like energies attract like energies, whatever you radiate comes back to you multiplied. It pays to visualize.

7. The biggest mistake people make

The biggest mistake that people make with the Law of Attraction is that they fail to do it consistently and effectively.

For example, after watching "The Secret," you may be inspired for a while to wake up focusing on gratitude. Then when the inspiration of the movie wears off, you may get busy and forget to be grateful for what you have. This is an example of an inconsistent use of the Law of Attraction.

Another and more serious mistake people make in implementing the Law of Attraction is that they "wing it." They have no systematic, step-by-step procedure to follow.

To effectively and successfully use the Law of Attraction, use a solid 5 step process:

• Identify what you don't want,

• Identify what you do want,

• Find a feeling place of having what you want,

• Clear your opposing beliefs,

• Take inspired action.

If you follow these 5 steps, perhaps with the help of a mentor or a coach, you will maximize the effectiveness of the Law of Attraction. No longer will the Law of attraction seem like a mystery to you!

Practice these 5 steps consistently, and you will be building a solid foundation for the Law of Attraction to work for you.

It's definitely one of the hottest subjects in Washington right now: Fannie Mae's and Freddie Mac's agreement last week to totally overhaul their appraisal practices, under pressure from New York Attorney General Andrew Cuomo.

Cuomo had been investigating the two company's standards on appraisals in connection with widespread foreclosure losses on subprime and other mortgages.

New York State filed a suit last November charging that an appraisal unit of First American Corp. illegally caved into pressure from Washington Mutual Bank to raise property valuations to allow loan deals to go through.

Both firms denied the allegations. Some of the loans involved were intended for purchase by Fannie Mae or Freddie Mac, and that opened the door to Cuomo's probe into both companies' practices on appraisal quality.

The new agreement is scheduled to take effect next January 1st. It will immediately affect anywhere from half to 70 percent of all new home mortgages, and is expected eventually to be adopted by much of the mortgage industry.

Here are the key changes:

Number One (and most controversial): Mortgage brokers will be prohibited from selecting appraisers for any loan that is to be sold to Fannie or Freddie. The apparent rationale is that appraisers say brokers too often interfere with -- or try to influence -- their work.

Not surprisingly, brokers are outraged by the change. The National Association of Mortgage Brokers said it is exploring legal remedies to block the plan.

Change Number Two: Lenders no longer will be able to use affiliated or in-house appraisal management companies for valuations on mortgages purchased by Fannie or Freddie. That would be huge for firms like Countrywide Bank, which heavily uses appraisals produced by its in-house LandSafe unit.

Third Big Change: Fannie and Freddie will set aside $24 million to create a new, independent organization to review complaints from appraisers about interference and to monitor nationwide compliance with the new appraisal rules.

Appraisers generally support the new agreement. The Appraisal Institute, the largest professional group for the industry, said it would work to help further the goals of the Fannie-Freddie reforms.

Gary Crabtree, a member of the Institute and an appraiser in Bakersfield, California, told Realty Times that "this is a big deal. The dishonest, inexperienced and unethical appraisers are the ones that received most of the work (during the boom years) because they were willing to sell their souls (to brokers and lenders) for a lousy 250 to 300 dollars."

The new Fannie-Freddie standards, he said, should help drive them out of the business

Again the bad putting more in the way of us good mortgage professional. Again just enforce and go after the voilators to the full extent of the law and this mess will go away for good. Everyone please get with your local NAMB rep to get links to prevent this from happening.

How many of your feel like you have your feet on the break and gas at the same time?????

You can't open the newspaper or listen to tv or radio without hearing about how bad everything is. Everywhere you look someone is telling us the sky is falling. The media would have you believe that the apoclypse of our way of life is inevitable!

Let's face it folks, it;s easy to follow the crowd and run scared. We are a aware that the media has no clue and how dangerous this pessimistic view is to people's perspective. We are not hearing about people or companies that are trriving because bad news sells better! Make sure you are not one that is following the crowd and burying your head in the sand. Use everyone else's panic (most of which is just perceieved) to your advantage. In a good way folks! Most successful people EXPAND. Use this to obtain better prices on rent, ads, printing, etc also use it to get better terms. If you use this fear correctly it can pay huge dividends for you. YOU MUST GO AGAINST THE GRAIN. Instead of shutting down and lettinf fear created by the media turn into a reator of life not an actor. This view of life will be much more beneficial to you and your business.

On another level, as business owners, we need to think about and plan how we will deal with our customers, clients and patients.The doomsayer viewpoint that is spoon-fed to them daily is affecting their perception of reality, causing your customers, clients and patients to tighten their spending due to FEAR! When your base income gets scared it can affect your income base unless youare proactive and proactive NOW! I want to get something clear that you are NOT victims. There are NO victims, only volunteers!!!! WE ARE RESILNT! WE ARE STRONG! You are powerful, creativeand intelligent and you must not buy into the media's song of destruction. If you do, it wil be your downfall and become a self-fulfilling prophecy. The attitude that the sky is falling will keep you from seeing opportunities that are being presented to you. You must have a strong belief in yourself and your abilities to prosper no matter what. The mass population tends to buy into the predictions of so called financial "experts" and what the medis reports about how bad the econcmy is or will be. When you buy into this mass belief you inknowingly limit opportuntie that could create money and happiness.

Clearly we all want to live life to its best, but most folks are reacting to life instead of actually planning for life. Let's get Real as business owners and entrepreneurs that there is always going to be drama and unexpected things happen that take our time and life energy. REDEFINE what we want on a regular basis. We can not fall behind simply becuase we have not taken time to define what we wnat and to adjust to our ever changing reality.

You must open our mind to the perspective that creating wealth and abundance has a lot to do with internal decisions and external actions and littel todo with the state of the national economy. We must rise above popular belief. Abundanceis a mindset not an external condition that controls your destiny.

History has recorded that more millionaires are created during the great depression than an other time. The people that believed in themselves were willing to take calculated risks. These people made tremendous amounts of money because they believed in themselves, looked for opportunities and had prosperity consciousness. Thye did not let fate control their future, instead they took charge of their own destiny with their thoughts and their actions! If you study history you will find that there are many successful people who mad more money during times of recession than when its booming.

I wanted to share the above with you becasue I have noticed all the focus on negative news has affected the perceptions of what is possible. We are being brainwashed by the warped news to not trust our instincts. Remember that you have the responsibility of choosing your own destination in life and every time you make a choice, you set in motion the power of the mind. Consider each thought to a seed planted for life. There is no limit in life except the limits youset yourself. Be aware of negative choices because they use the same mental principles as positive ones. Accept the fact that you are 100 percent responsible for what you choose for your self. STOP paying attendtion to the constant preaching of gloom and doom. Pull yourself out of that hole and start to ask yourself honestly.... What so I really want in life? What are you willing to so to achieve those desires? Start reading uplifting books and materials that will inspire you to make you realize your potential. Write down your desires, dreams and wants! TODAY! WHAT YOU FOCUS ON EXPANDS!

Lets all achieve more this month and the rest of the year!