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Three things that will brighten your day.

1. Smile at least three people today.

2. Compliment at least three people today.

3. Give encouragement to at least three people today.

4. Be around three people who are optimistic.

5. Take at least three minutes thinking of soultions to a challenge.

6. Pause three seconds before reacting to a harsh comment.

7. Find three people who are dreamers. Share your dreams to them.

8. Find three solutions before saying a problem.

Key words: three, minutes, encouragement, give, share, take time, pause.

Two people were discussing speculative investment vehicles. They were talking about margins and stock options.

The other person took was slow to grasp the concept of options, margins, buying short or buying long.

I jumped in the conversation. Even though I do not gamble, I shared a sports betting analogy. I explained the recent Super Bowl game between the Patriots and Giants.

Patriots were favored by 11.5 points. Many love the Patriots. The mystic of the magical season blinds. As a result many placed their bet on the spread. There were people who also love the Giants; therefore, there were also people receiving the bets. In addition, there were astute investors or gamblers who knew about the Giants defense. They placed their bet with this key information. 

As I listen to the conversation, it dawned on me. Wall Street is also gambling. Yes, stock brokers do their homework. However, winning more, wanting more and greed blind people. Greed brings unstableness in the economy and more so in the mortgage business.

Wall Street has a direct impact on the mortgage loan interest rate. If business like: Microsoft, Apple, Coca Cola, McDonald's, IBM, Home Depot, Gap, GE, and companies do well, then, their stocks go up and bonds will be more favorable than the mortgage backed securities. As a result, mortgage rate will go down. This is one of the reasons our government is giving back our money so we can buy the computers, soft drinks, ovens, clothes, food, etc. As a result, companies will realize profit and in turn make the stocks go up. 

Key words: Stock, Miscrosoft, Apple, IBM, mortgage rate, Wall Street

I went to a convenience store to buy Trail Mix. I have been buying the dried fruit mix for over three years.

I was shock when I saw the new price. The old price was $1.89. Now, the price is $2.39, that is a 21% increase. It is a shocker; but eating dried fruits have benefits. I am willing the higher price.

The price increase is not an isolated case. It will happen everywhere.

The price of oil is one of the culprits. Food, cloths, and everything else we consume were transported by trucks, trains, ships, and/or planes. The high oil price is passed on to us, the consumers.

The banking industry with its lending practices will be more conservative. Banks want protect the bottom line. Therefore, lenders will be less prone to take risks to extend credit.

Your credit score is your financial friend or "enemy." Credit score determines your borrowing power and interest rate.

Here are some tips to possibly increase your credit score:

1) do not close accounts if you are planning to get a mortgage loan soon,

2) try not to get new loans of your are getting a mortgage loan soon,

3) do not charge to the limit of your credit cards. Charging one third of the limit is preferable. Watch out for the low limit cards; they get "maxed" fast,

4) access fewer accounts of credit cards. Base on our experience with borrowers, three or four cards,

5) pay bills on time.

Bank foreclosure impacts the industry. It creates a ripple effect. First, there are more homes in the market. As a result, the building industry slows down due to over supply of houses. The value of house go down. Then, less access to the equity of the property. Bank will charge fees someplace to recoup these losses.

The economy is constantly changing. However, there are opportunities at every situation.

Search word: bank, foreclosures, access, industry, slow down, consumer

A friend said, "Recession is coming. The economy is slowing down."

I said, "You may be right. However, are you going to recession too?"

Yes, the gloom and doom people are coming out of the woodwork. They  bombard you with the latest downbeat news. It will get more gloomy because of these folks.

The economy moves in a cyclical fashion. It goes up. It goes down. It expands and it contracts. This is a fact. It is inevitable.

How should we conduct ourselves in this changing environment? Here are four ideas:

1. Have faith. Believe dark moments of the economy shall pass. Be optimistic about life. Read encouraging books. Stop telling your sad stories. Learn the lessons from sad events and move on.

2. Develop your skills. Read books to upgrade you talents. I read four books a month. Two of which are writing improvement books. I discovered there is a writing bug in me. I need to know where this writing journey leads. I finished my nonfiction book manuscript and edited the draft 50 times. Yes, that fifty times. Each editing round takes 15 hours. Reading self help writing books propell my writing to a higher level.

3. Find people who are optimistic. Also, encourage your family members and friends to be optimistic. If they need help to see the brighter side of things, coach them. Create a personal contract with your inner circle to encourage one another. Have prior permission to stop each other in mid-sentence or mid-syllable when pessimism spew out of the mouth.

You can beat the recession of the mind. Have faith, believe, and be optimistic. Develop your skills. Find people who are optimistic.

When you follow these suggestions, you live a happier life and eventually beat the economic recession.

Word Search: recession, economy, slow down, Fed, rate 

Here are some industry lingos and other lingos that may interest you:

ZIP Code            Zone In Planning Code

Points                Can mean total closing costs

                            Can mean cost to buy down the rate

0 Closing Cost    Means the closing cost is not added to the loan amount,

                         about 4% of the loan amount, is rolled in the rate.

                         This means the rate will be about 1.25% higher.

                         There is no free lunch. But this type of add tingles the

                         greed in us.

Lowest Rate       This term tingles the greed in us. The truth is the cost to

                         your mortgage loan is nearly the same at the source.

                         What makes it different among lenders or brokers is the

                         income generated with your loan. Overhead is one of the

                         factors that determine the fees.

Okay, I will spare you. I will not sing. I've watched three episodes of American Idol. I like the audition. It helps me see the cross section of America. Also, it helps me see people with dreams.

The funny thing is American Idol is beginning to penetrate to the inner sanctum of my soul. It is not the singing. It it not the judges: Paula, Simon or Randy. It is about the dreams yearning to come out in the lives of the constants.

I have a dream. I have an aspiration. I have a dream of writing a book. More precisely, I have a dream of writing a book that transform lives. As for me, I already have rejections from book agents and publishers. I encourage myself knowing that J.K Rowlings (The Harry Potter lady) was rejected 11 times. Now, she is a billionaire.

I am willing to absorb rejections to see lives change. Okay, I have to confess. I dream the book will be a best selling blockbuster. Now, I just smile when rejection comes. It is part of the process. At the same time, I am one rejection closer to my dream.

I see myself in those contestants who dream to reach for the stars. I see those who excel and those who will go nowhere. The questions turns to you.

I see ATTITUDE, HUMILITY, and TEACHABILITY are big factors to progress forward.

The other fun part I like to observe is how Simon and Fox put together the final 24. There are talent, character, and business aspects of the decisions.

Here is my prediction. I predict Mr. Archuleta and Miss Malubay will the top 5. Both of of them are good singers. Here are some intrinsic character traits that push them higher. Both are young and humble. Mr. Archuleta, 17, will wow the young girls. For Miss Malubay, she shines as one of the top three on the ladies side and there is a back end financial gain for the organizers.

I assume organizers have a cut to their future income. Organizers set the path of the singers stardom. For example, American Idol finalist, Jasmine Trias went platinum in the Philippines. She packs fans with in 10,000 and 20,000 auditoriums.

As for me, I will not vote. I just watch and observe. There are so much to learn to become an American Idol. There are so much to gems to harvest in this arena.

Search: Fox, American Idol, Simon, Paula, Randy, singing, contest, tv

The foreclosure rate is now around 1.69% up from 0.58%. Of the mortgage loans outstanding, 1.69% is in foreclosure or on its way to being foreclosed.

Here is a sobering truth about subprime loans. According to Mortgage Bankers Association: Of all the loans, 13.1% are subprime fix and subprime ARM. These loans account for 55% of loans being foreclosed. Even though the subprime ARM loan is 6.8%, it accounts 43% of all foreclosures started.

This is a grim statistic. Thanks God, most of the loans I worked on were 30 years and 15 year fixed. I am not a fan of adjustable rates program. We had a few subprime loans; however, those were rescue loans to buy some tome for the client.

The impact of the foreclosures are:

1. Lenders are now going back to conservative underwriting guidelines. This will be adhered more closely to whet the appetite of Wall Street investors as they invest on mortgage backed securities. As a result, fewer borrower will qualify for mortgage loans.

2. Foreclosed properties will go back in the market. As a result, property values will go down because of the over supply.

3. The residential construction industry will also be affected. Because of the over supply of house, the residential construction industry will slow down. I just hope the commercial and governmental projects steam ahead during the next four years.

4. The whole economy will be affected. As the adjustable rates increase, there will be less cash available. As a result, less money will float in the economy. The bakers will have less customers. The car dealerships will have less customers, etc.

Congress passed the stimulus plan and the FED lowered the short term rate (not mortgage loans). These extra money coming back to consumers will  stimulate the economy. Just be careful with your credit card debts because credit card companies will come out strong to recoup their losses via higher card rates, and fees.

The economic tidal wave has arrived and more is coming. During these moments, take a positive view of life. If you are breathing, be thankful. If you have food to eat, be thankful. If you are alive, thank God.

In life, we are baked in the oven of circumstances to temper our character. During these moments, let us learn the lessons of life. Our economy goes in cycle. It goes up and down. There are opportuniteis during these times. This too shall pass.

I just read a startling statistic about risky loans. Since it may afftect you as homeowner, I just wanted to share this in the blog.

According to a recent survey, 1 out of 3 homeowners have no idea what kind of loans they have. Under better market conditions, that might be okay. But in the current market where it is predicted over 2 million homeowners will loose their home due to sudden, unexpected and devastating increase in their mortgage payments.

It is important you know exactly what kind of loan you have, and even more importantly if your loan adjusts your mortgage payments go up.

We'd be happy to meet touch base with you and conduct a Equity Review of you home and your loan, call us at 483-7400 or send your question through this Website.

Your credit scores determine your interest rate. A point or two higher with your credit scores may save you hundreds of dollars a month or even tens of thousands of dollars during the life of your loan. Here are some tips to raise your credit scores. I cannot really tell you the exact parameters to get higher credit scores. The credit scoring model is a closely guarded secret of the Fair Isaac Co (FICO).

During 2007, a loan officer and I closed more loans with credit scores near 800 FICO score. We had a couple of loans over 800. Here is some of the credit spending patterns of these clients:

1. The first one is obvious. They pay their bills on time.

2. Normally, each client has two to three credit cards that are charged less that 30% of the max limit. If the card has a max limit of $15,000, the card holder has a balance of less than $4500. Most times, they have $0 balance with their credit cards.

3. These clients do no have much store credit cards. Store cards have low limits like $500 or $1500. Since these cards can be maxded easily, it can create problem by lowering your credit scores.

4.  They do not close accounts credit cards right before they apply for a loan.

5. They do not open new loans right before applying for the mortgage loan. 

These are some tips to improve your credit score. Improving your credit will save you hundreds or even thousands of dollars.