Creative Wealth Builder Club

Principal Reduction Programs Explained. Why Banks Would Do It.

admin — Mon, 26 Jul 2010 16:18:32 +0000

There is still much confusion for many regarding a mortgage principal reduction and why a lender would be so eager to consider such a thing. Unlike a loan modification, where a homeowner basically begs a lender for mercy in hopes of getting a lower monthly payment, and in some rare cases a principal reduction, a principal reduction program (PRP) is quite different in many ways. Incidentally, national statistics show that loan modifications are successful only 8 to 12% of the time depending on what lender is granting the modification. This average is way below the federal government’s HAMP projection. Short sale success is also hitting the skids, so a principal reduction seems to be the way to go these days and for good reason.

Let’s briefly discuss what constitutes a principal mortgage reduction and what motivations a lender has in allowing the reduction. First of all, think of a federally backed principal reduction program as the recent “Cash for Clunkers” program. Trade in your old, beat up mortgage for a new, government funded reduced mortgage. Who wouldn’t want that? A PRP is a TARP/private sector investor cooperative designed to stimulate the economy and get money moving again. Here are some examples on how a principal reduction can benefit all parties:

HOMEOWNER-
1. Existing mortgage bought by a private investor
2. Mortgage over-encumbrance reduced to fair market value
3. Monthly payment almost always comes down because interest rate is about 6 1/2% (based on newer reduced loan amount)
4. Old loan on record as paid in full. (looks good on credit report)
5. No qual. Owner just needs verified income to meet 40% DTI ratio

PRIVATE INVESTOR-
1. Can get cash flowing investments at huge discounts.
2. Product is plentiful and easy to get
3. No real estate headaches
4. Can buy in bulk without much competition
5. Can select their own inventory without having to take “junkers”

BANKS-
1. Easily and cheaply unload non performing assets
2. TARP (Troubled Asset Relief Program) endorsed
3. New money to lend
4. 80% of their losses are covered by fed after the sale!!!!!!! Banks lose nothing.
5. Company stock values return

A Principal Reduction Program like ULTIMATE MORTGAGE RELIEF is an alleged win-win-win. The only loser is the tax payer who will foot the bill. In my opinion, this PRP will ultimately bankroll the big private investment firms that are in reality in partnership with the banks, so the economic impact is yet to be revealed, but in the long run, it can’t be good. Short term however, there will be a new kind of “run on the banks”; the likes of which we have never seen.

There should be no shortage of participants, so now is a good time to position yourself for some easy Equity Holding Trusts using the “How to Make Money on Houses Nobody Wants” training. Why? Because with new restructured loans on abandoned homes, owners will need some new solutions for occupancy and long term asset protection. There will also be plenty of resident beneficiaries coming out of the woodwork that can now afford the new monthly payments.

The PRP will last for only another couple of years because TARP (free unlimited government bail out money) is scheduled to end when President Obama’s term in office concludes. It could be extended if he is re-elected. We’ll have to wait and see.

Mortgage Reduction – Relief – Removal? Confused? What’s Best for You?

admin — Thu, 22 Jul 2010 18:31:32 +0000

Let’s KISS! (Keep It Simple Students)

When evaluating what you are really trying to do, do you sometimes get confused? Does some of this LFC mortgage settlement and Ultimate Mortgage Relief principle reduction stuff seem to go over your head? Let me just say this. Don’t over evaluate. Keep it simple in your mind as to what you are trying to accomplish. What ARE you trying to do?

Well, you are challenging the “real party of interest” claim being made by the alleged lender using the LFC administrative process. Or, you are admitting and recognizing that the lender is in fact a “real party of interest”. You will then seek a remedy to cure your over-encumbrance and high monthly payments by allowing some private investors representing Ultimate Mortgage Relief to buy your property’s first mortgage note from the lender. This you do get a better payment and a reduced balance on what you owe. It’s just that simple.

It’s not rocket science. You either want the lender to prove status or you are okay with their claim to status regarding your mortgage. So, what do you see on the buffet table that pleases the eye? If you draw the conclusion that you are being ripped off by the lender and you want to do something about it, notify the lender to “proof up or get out”. When they refuse to accept your authority, take charge, take command, take action and take control using the step by step mortgage removal process. Then back it up with proper enforcement through court judgments and a quiet title action and/or negative averment.

If you feel like the lender is in the right, but you are a victim of economic circumstances and your property is grossly undervalued and your mortgage amount and monthly payments are too high but want to keep the property, use the Ultimate Mortgage Relief offer to get you back to financial stability. How easy is that? Now, consider this. If you can successfully implement either of these steps on one house, just think how much money you can make if you can “partner up” with 100 homeowners that need to do the same thing?

So, here’s what you need to do. Read up. Follow the plan step by step; either LFC or UMR. Don’t give up. Don’t get stressed out just because you don’t have all of the answers right at this moment. Keep moving forward. See it through to the very end. In the end, you will either have a property that is free and clear of mortgages, or you will have a property with a manageable mortgage at fair market value and a monthly payment you can handle or you will stand pat and keep making payments on your existing loan or you will lose your house to foreclosure and you will do nothing about it. Your choice.

Rapid Mortgage Elimination Strategies

ROBERT dieudonne — Wed, 15 Apr 2009 10:05:38 +0000

Amazing breakthough allows mortgage payers to eliminate their mortgage in 3 to 6 month. See you if you qualify. http://livingfreeandclear.com

In Every Market There is Opportunity – Even Now

Wed, 15 Apr 2009 10:05:38 +0000

Recent housing statistics reveal a downturn, if now an outright recession is more than looming in the nation’s housing sector. Recent statistics indicate the actual median price of houses is now declining in most regions of the county.
This is significant because over that past 30 years we have not …

Rating Banks Who Will Short Sale Mortgages

Wed, 15 Apr 2009 10:05:37 +0000

RE: Rating How Well Banks Are Willing to Short Sale Distressed Mortgages

On the surface it sounds good to attempt to rate banks for their willingness to short sale a mortgage,
when a buyer is facing foreclosure. You would most likely be obtaining very subjective, not objective data.

The major problem with …

The FED to The Rescue? Good or Bad?

Wed, 15 Apr 2009 10:05:37 +0000

Last week’s rescue by the federal reserve of the mortgage bond market was a positive sign, that the federal reserve (the FED), has finally recognized the risks inherent in the housing and mortgage market. Good for them. Of course the downsize is that the market could not …

3 Strategies to Get All The Cash and Deals You Can Handle

ROBERT dieudonne — Wed, 06 Feb 2008 21:35:42 +0000

Download This Week’s PODCAST Presented by T.J. Marrs
As heard on his radio program “Living Free and Clear”
Listen Live Wednesdays at 4 pm
on www.Voiceamerica.com
Heard weekly at http://tjmarrsradio.com
SUBJECT: Learn the 3 Real Estate Investing strategies that will get you more cash and more deals in 2008 than you ever imagined …

ROBERT dieudonne — Thu, 28 Jun 2007 06:29:52 +0000

ATTEND THE NEXT LEVERAGE YOUR WEALTH BOOT CAMP

Click on POSITINGS to see latest BLOGS, post your thoughts, and see the latest updates.

T.J.’s WEALTH MENTOR TIPS & STRATEGIES NEWSLETTER/BLOG:

"Turning Debt Into Wealth NOW"

The banks have a little secret that they really don’t want the general public to know. This week I want to discuss a subject that is near and dear to my heart as a real estate investor. To understand where I come from as an investor you must first understand where I came from. A few years ago, after I had started as a real estate investor, I quickly earned over $100,000.00 in the first 90 days of being in this business. That was real cash, real dollars earned. I quickly paid off a lot of debt, which was a good thing to do. But then I also slowed down my activity, and then the debt began to rebuild again. I quickly learned that I must have a debt management plan if I’m to be successful as an investor. In the upcoming weeks, you’ll be hearing more about our new Turning Debt into Wealth system.

I’m very excited to announce this program because it truly will show you how to get rid of your mortgage debt in as little as 3 to 9 years, without changing your monthly budget. Now what I’m about to tell you is not an illegal scheme or a way to avoid paying your debts. Quite the contrary

All we’re going to do is teach you how to employ the basic concept of timing and management to create a much simpler way to pay your monthly bills and, at the same time, dramatically reduce or eliminate your mortgage in much less time. To better understand this, you must understand that banks make money several ways. They make money on the "spread". The spread is simply the difference between the money that they have to pay out, such as the interest rate on savings accounts, and the income that they earn by lending money out at a higher rate. For example, if they pay you 2 percent on your certificate of deposit (CD) and they lend the money out at 6 percent, they’re making a 4 percent spread on other people’s money.

This is often referred to as the "OPM principle". Next, banks make money on "timing". This is to say, if they can hold your money longer they can make money on it on overnight, through the borrowing and lending of money. They also make money by having you pay your payments at the last possible date; therefore, accumulating the greatest amount of interest. Now I’m not suggesting that all you have to do is pay your payments earlier; it’s a little more complex than that. The way in which banks set up the very mortgage notes and debt structures that you pay, are geared to make you pay on the latest possible date and pay the highest possible amount of interest to them. With this system you’ll actually operate like the bank, in terms of the structure and timing of payments on all your bills. This system will not require you to change your overall monthly income of change your actual overall budget. But it will change the way in which you make those payments, so that is to your maximum advantage.

The elements of the plan include: 1. You could end up with as little as two bills to pay per month versus the number of bills you may be currently paying. How would you like to write just 2 checks per month to pay all your bills? 2. You may also end up by reducing your mortgage by 20 years or more.

For example, a 30-year mortgage may be reduced to as little as 9 or 10 years, or even less; thus, eliminating all of those payments that you no longer have to pay. 3. We’ll show you an investing strategy where you can take all that additional money saved and reinvest it into real estate; doing this over and over again. Imagine 10 or 15 years from now, when you have several properties now paid for, earning you income streams on several free and clear rental properties. Compare this to not having a system like this in place and having rentals that barely pay the mortgage payment. Or, compare this to retiring and having a mortgage payment to pay, versus just having a free and clear property to live in. This matter is so huge that we feel it will dramatically affect the overall U.S. economy if we can just get 20 percent of the population going to this new payment system. It’s our goal to lead the way for you and for our clients.

Announcements: We will soon have a series of upcoming tele-seminars on this and other related subjects, which you will certainly want to attend. Our newsletter subscribers will be invited to attend these events. For more details about real estate and investing training, go to www.tjmarrs.com.

Helping America Succeed, One Person at a Time.

Here are just a few additional areas our fully 2005 updated training contains:

* How to cash in on today’s amazing foreclosure market.

* 10 easy ways to buy property nothing down and with zero credit.

* How to get the deals other investors walk away from.

* How to get foreclosure sellers to call you first, every time.

* How to turn a bad deal into a great deal.

* How to get sellers to give you their homes for free.

* How being aware of the new HUD rules and how they will impact our business, will make you money while damaging your competition for not knowing the rules and how to take advantage of them.

* 31 ways to sell property and explosive speed and at above market prices.

Check out our book and course training links now T.J. Marrs

Join the newsletter that is like getting a Free 1 year course in real estate investing above.

Testimonials

ROBERT dieudonne — Wed, 27 Jun 2007 17:28:11 +0000

Testimonials Here are a just a few of the comments we have received from our students and attendees of our workshops and seminars:

….TJ’s presentation was excellent… I am ready to go out and make money! No one else prepares you for the real world better.

I EARNED $55,000 at close of first escrow! Steven M. .

…I am already wholesaling an average of 4 transactions a month, with a wholesale profit of about $2,000-$3000 cash each deal. With your help I am sure I will be able to perfect my deals so they become more profitable., thanks TJ Oscar M.

….TJ made comprehensive recommendations about my purchase and exit strategies for this deal. The cosmetic work and remodeling on this property are nearly done. Net profit from this deal will be between $22,000 and $30,000! AND ON MY SECOND DEAL… Since TJ had helped me analyze and negotiate a large enough equity position I was able to pick and choose which exit strategy I wanted to use. I will collect over $10,000 on this deal next week, even after paying the buyers agent’s commission and $2400 in repairs at closing, not a bad return for $2,000 down. Leaha Lewis

….I found my first deal within 3 weeks for a profit of almost $30,000…..I almost negotiated the deal for a $10,000 profit, TJ showed me how to find another $20,000 I never realized I could get out of the deal on my own. Unlike many real estate programs available, TJ’s program offers a "hands-on" like support training. His approach is very sound and workable. Many times the business of real estate can be intimidating. With TJ the intimidation is gone as walks you through each step and assures your success". Casey C.

Just so you know, I HIGHLY recommend the course to anyone just starting out or even seasoned investors. I would say this was the best money I could have spent period! Augustine Azevedo

It was step by step for me (the beginner) to include voice mails, business cards, etc… I’ve done numerous other courses and T.J. was step by step the Very Best… Rod A. Stinebacher

Within the last 3 months I have tied down 3 pre-foreclosure that will close next month netting $60,000.00. T.J’s coaching program is excellent. Anita Borgaise

T.J. Marrs’ seminar is presented in a clear, straight-forward manner. His material covers a wide variety of subjects beneficial to the investor, from marketing & negotiating to asset protection… and his emphasis on being honest & using integrity in your business dealings is very refreshing. THANKS! Donna Osborne

I had studied other real estate courses, and they all gave vague instructions on what to do, but did not explain how. TJ’s course gives specific instructions about what to say, why you’ll say it. and when to say it. I now have the tools I need to get started. Thanks TJ! Bonnie Dye

I want to thank you for helping me put $2,000 or more dollars in my pocket instantly, before I ever bought my first investment deal. I talked with you about a deal I was negotiating with a buyer. They only wanted to give me $3,000 for a down payment… TJ said I should ask them how much more CAN they can come up with (as part of my negotiating training)? By gosh I did just that… And they said they could come up with a total of $5,000 for a down payment. If I had not had TJ to ask that question of, I would not gotten the extra money from the buyer. Thank you TJ (NOTE: with a little more recommended patience, this student ended up getting over $30,000 cash down, in his pocket!) Steven B.

…..It has been wonderful working with TJ. He is definitely on the cutting edge of how to automate your real estate marketing system, and is always coming up with new ways to improve the system. Not only do we have great systems but a practical way to implement the strategies. Our business has really got a lot of momentum going since joining TJ’s team . His is never too busy to get back to us and is available to consult with us on the details of our transactions. Being new to this industry, I feel we have a safety net in all our transactions, because he has been there and done it, and can lead us as it’s through the path of little or no risk transactions. It is a great place to be, knowing that you have covered all your bases and protected yourself and our clients. I heartily recommend TJ to others who are ready to buckle up and takeoff. Elizabeth A. Portland, OR

….Just a quick letter to let you know how much we enjoyed our training sessions with you. The information was very beneficial to our investing profile as well as our personal life. Your knowledge and expertise in the field of creative investing and lease options is outstanding. We have gained a whole new outlook on how to buy real estate. We are currently working on applying the information you’ve provided to our investments and hope to work with you more in the future. Please feel free to use this letter as an endorsement to the quality of your program. Hope to hear from you soon and happy investing. Brad & Jim R. Ohio