Protecting Your Family

The single most important document in your estate conservation strategy might not be your will or any of the other instruments that you probably paid an attorney to create such as Revocable Living Trusts. In fact, what is likely to be your single most valuable asset will convey directly to your heirs without going through probate or any of the typical estate distribution channels.

In this case, the asset is your retirement savings, and the document is the retirement account beneficiary form. Because your beneficiary designations will override any instructions in your will regarding who will inherit your IRA or employer-sponsored retirement plan, ensuring that the correct beneficiary is named on the account form might be the easiest, most inexpensive step you can take toward a sound estate conservation strategy.

Yet experts say it is fairly common for beneficiary designation forms to be outdated. This can be an especially serious problem when a beneficiary was named years ago and the designation was never reviewed. Then, because of life events — marriage, divorce, birth, or death — the named beneficiary is no longer the person whom the account owner wishes to inherit the money. If this information doesn't come to light until the account owner’s death, it’s too late to do anything about it. The custodian of the plan has no choice but to follow the instructions on the form, even if it means the decedent’s children are deprived of their inheritance because a former spouse or now-estranged family member was the designated beneficiary.

Fortunately, there’s an easy fix to avoid this scenario. Regularly reviewing and updating your beneficiary designations can help ensure that your loved ones inherit your retirement savings.

Foreclosures Stoppage Awaiting Obama's Plan

Citigroup, Chase, Bank of America, Wells Fargo, Morgan Stanley, Bank of New York, and greed to suspend foreclosures to give time to the Obama administration as it continues to craft a housing plan to modify mortgages for troubled borrowers.

Citigroup will halt foreclosures through March 12, or until a plan is completed, the company said Friday. Wells Fargo said its moratorium is in place until a plan is announced. The other lenders said foreclosures will be stopped on owner-occupied homes until March 6.

Fannie Mae and Freddie Mac said they will suspend foreclosure sales involving occupied single-family and two- to four-unit residential properties through March 6.

New Condo Guidelines for Fannie Mae loans

Fannie Mae has issued new guidelines that Florida condos and condo conversions, and, in some cases, old condos, must meet before it will fund loans:

• At least 70 percent of the units in new condos must be pre-sold.

• No more than 10 percent of units can be owned by a single entity.

• No more than 15 percent of units in all condos can be more than 30 days past due on association fees.

• No more than 20 percent of a condo can be devoted to commercial use.

• All condos, new and old, must have fidelity insurance, which protects association funds from fraud.

• The seller is not allowed to help with down payments or offer other perks, like deductions of association fees, unless they are disclosed.

• Condos must have hazard insurance.

• When investors buy in established projects, at least 51 percent of units must be owner-occupied.

**If the condo you wish to purchase or refinance has any of these issue, it may still be possible to go FHA. Contact me with the address and I can check whether or not the project is approved by them...

Rates Plummet to mid 4's

US Treasury begins purchasing FNMA and FHLMC Backed Securities - On Monday January 5, 2009, The US Treasury initiated their purchase of mortgage backed securities as previously announced on November 25, 2008. As a result, mortgage rates have plummeted to the mid 4's causing a renewed interest in refinance applications and those buyers willing to jump back into the real estate market yet another incentive to buy now.

HOW TO - Break The Cycle of DEBT

With all that has happened over the last three short years; from the housing crisis causing mortgage companies to go out of business (or get absorbed) ceasing lending as we knew it, to the stock market crash and the Credit collapse…to our personal rising debt trying to make ends meet in this crap economy where layoffs and downsizing are the norm. Not to mention the Trillion Dollar debt of our own government which have been “surfing” their debt for years with no solid plan to deal with it…has given me a sore distaste for borrowing money.

Let’s face it, if we all lived within our means, only bought what we could afford, and saved up instead of borrowed money to buy large items, none of us would be suffering right now.

Up to this point, I have never thought of debt as a negative but rather a tool to create more wealth. That was, of course, until I lost the means to pay that debt off. I now understand that we as a society have it all wrong. DEBT IS NOT OK and we cannot continue down this road and expect to be fine.

One can argue that the only exception to this are mortgages on investment properties, but due to the drastic drops in home values, we are learning the negatives of leverage the hard way on that as well. If you have purchased or refinanced within the last 4 years, chances are you are now upside-down on your equity.
-Average homeowners stay in their homes for 7.1 years [NAR®]. With an average 7% mortgage, they will sell their homes still owing over 90% of the principal. If they continue this trend, they will NEVER pay off a home in their lifetimes!
-85% of Americans have a true net worth of less than $250! - Social Security Administration
-The average savings of a retired couple is only $7,000!
HOW DO WE BREAK THE CYCLE?!?
Step 1- You have to stop taking on new debt.
If you cannot stop the flooding, how can you keep from drowning? Which brings us to…

Step 2- Make a list of ALL your expenses. Click here to download my spreadsheet
This is vital as you need to know exactly how much you are spending every month and compare it to your net income. If you have money left over (discretionary income) then you are on the road to financial freedom. If not, look hard to see what can be cut or adjusted. Even if you only have $1 left over, you are on your way!

Step 3- Invest in a program that will guide you to financial freedom.
Make no mistake; this undertaking will require discipline and determination. The idea is to payoff your highest rates or highest monthly payments first to free up cash flow that can then be applied to your next debt paying it off quicker and so on until you are debt free.

Step 4- DO IT AND LIVE IT! Becoming debt free will not happen overnight, but imagine 8-13 years from now with NO Mortgage, NO credit card debt, NO car loans, and taking ALL that money you would have spent on interest and investing it in a safe 2-5% return over the next 10-20yrs. We are talking Hundreds of Thousands of dollars set aside for your retirement!

This is real and this is the pyridine shift we need to make as a society if we ever wish to regain balance and power.