If you haven’t heard about all of the fuss within the financial sector you must have been living under a rock. The demise of financial giants like Behr Stears, Indy Mac Bank not to mention many other smaller institutions has led the U.S. into a financial devastation like never seen before.

With the focus on the secondary market player Freddie Mac and Fannie Mae being bailed out by the U.S. Government to save us from financial ruin. The focus is now pointed at the mortgage brokers and new regulations along with reform measures to be put into place.

Anyone with half a brain could have seen this coming. How does a janitor or a McDonalds employee afford a 400K, 500K or even 600K+ home and think that they are only going to pay less than $1,500 to $2,000 per month for a mortgage?

Is anyone blaming the consumers for all of this mess? I mean if everyone had followed the old tried and true rules for obtaining a house this would have never happened. Who would have ever dreamed that an underwriter would approve a minimum wage earner for a ½ million dollar house?

The blame for this whole mortgage and real estate mess could be summed up in a word…greed. If it weren’t for some new fancy marketing for a single mortgage program most of this would have been avoided.

Stick with the basic rules and you wont go wrong. Only purchase what you can afford. A mortgage payment (PITI – principle, interest, taxes and insurance) should not exceed 36% – 49% of your gross adjusted income.

The target is on 36% this called the debt to income ratio. You have a top and bottom ration the top is called mortgage payment to income vs. the bottom which is the debt – income ratio.

Every loan officer, banker etc can pre-qualify you in under 30 minutes provided you supply them with the proper information and credit reporting. Bear in mind that the lower your credit scores are the less of a debt to income ration you can have.

Preparing future generations to avoid failure and acts of greed is important to their over all wealth, financial health and physical health by minimizing stress, pressure from over extension and worry.

So in closing play it smart and get the proper information before you buy a life of heart ache and misery, also if you can’t afford it in 30 years why drag the pain on for 40 or more?

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The president has just signed the Federal Housing and recovery Act of 2008. Legislation that will overhaul the Depression-era FHA and provide mortgage relief for 400,000 homeowners struggling with foreclosure woes.

This bill is also designed to quiet the jitters on Wall Street by offering some financial relief and additional accountability for the troubled, government-sponsored mortgage companies Fannie Mae and Freddie Mac.

While the bill started with a battle between the White House and the Democrats in Congress, bi-partisan support eventually led the President to withdraw his veto threat. Below are some highlights of this far reaching legislation.

Homeowner Relief Measures (Hope for Homeowners Act of 2008)

• The law creates a new program to back FHA-Insured mortgages for debt-laden homeowners. Up to $300 billion will be available through the voluntary program operated by a board consisting of the HUD and treasury secretaries, and a chairman of the Federal Reserve Board and the Federal Deposit Insurance Corporation. (FDIC)

• In exchange for new mortgages, homeowners will share future appreciation with the FHA. Borrowers must also meet a payment burden test to determine if they can afford a new mortgage.

• Banks must agree to relinquish their claims for a payment equal to 85% of the current value of the home.

• The homeowner relief program begins Oct. 1^st 2008 and ends on Sept. 30^th 2011.

New regulator for FHA

• The law creates a new, independent regulator called the Federal Housing Finance Agency to govern GSE’s (government sponsored enterprises). It will oversee Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

• The Treasury Department has been granted temporary authority to purchase debt and equity of Fannie Mae and Freddie Mac through 2009 to provide financial stability for the mortgage giants.

Modernization of FHA

• The law increases the FHA loan limit to 115% of area median home price with a cap at $625,000.

• Down payments of 3.5% will be required for any FHA loan

• Seller assisted down payment programs (such as Nehemiah) will end October 1^st

• The FHA mortgage insurance premium will increase to 3%.

• The FHA’s program for reverse mortgages is expanded with higher mortgage limits.

Tax Credits

• Provides new first-time home buyer tax credit which is equivalent to an interest free loan of 10% of the purchase price of the home (up to $7500) to be repaid over the course of 15 years. It will be available through July 2009 for taxpayers who meet adjusted gross income levels.

• Rules relating to the Low Income Housing Tax Credit will be simplified and states will see increased housing tax credit in 2008 and 2009 depending upon the size of the state.

• Allows a new standard deduction for homeowners who do not itemize on their tax returns.

Other Provisions

• The bill lengthens the time a lender must wait before starting foreclosure after a sooldier returns from service (from 3 to 9 months) and also provides returning soldiers with one year of relief from increases in mortgage interest rates.

• Enhances mortgage disclosures requirements to require lenders to inform borrowers of the maximum monthly payments possible under their loans.

• Provides additional funding for housing counseling and legal services to distressed borrowers.

• 44 billion will be provided for emergency Community Development Block Grant money to purchase and clean up abandon homes in areas blighted by foreclosures.

Source www.banking.senate.gov/public/_files

• Here is part three of this report var YAHOO = {\'Shortcuts\' : {}}; YAHOO.Shortcuts.hasSensitiveText = true; YAHOO.Shortcuts.sensitivityType = ["adult"]; YAHOO.Shortcuts.doUlt = false; YAHOO.Shortcuts.location = "us"; YAHOO.Shortcuts.document_id = 0; YAHOO.Shortcuts.document_type = ""; YAHOO.Shortcuts.document_title = "Real Estate IRAs: Secrets Revealed - Part Three"; YAHOO.Shortcuts.document_publish_date = ""; YAHOO.Shortcuts.document_author = "help@trustetc.com"; YAHOO.Shortcuts.document_url = ""; YAHOO.Shortcuts.document_tags = ""; YAHOO.Shortcuts.annotationSet = { "lw_1212114071_0":......
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Even though the “free fall” of the housing market has apparently stopped or could be ending soon depending on the information you research, investing in select California real estate commonly referred to as “land banking” is still the safer alternative to your typical cyclical market corrections and downturns.

It’s apparent that the hardest hit areas of the foreclosure explosion are starting to pick up in activity levels although the foreclosure rates will remain a significant problem in California until the mid to end of the year 2009.

Certain parts of the Bay Area and Southern California are starting to feel some improvement from increased sales compared to last year although many investors are still holding back before making any drastic decisions.

By contrast the land banking community goes unscathed from the violent turbulence felt for miles around in any given city in the nation. Quietly these passive investors are raking up the profits and not even batting an eye towards the chaos around them.

With the advent of bank owned (REO’s) properties and the vast count of mortgage derogatory payments and a stable and normal housing market is a long way off. Even with the onset of the housing bill coming into effect in early October the sign of a market upswing is quite a ways from appearing.

California will recover from this market correction; will your finances make the grade when all is said and done. Taking advantage of the real estate market is a great way to build wealth for the longterm. Risk is greatly minimized, profit potential is increased and assured when the proper real estate is chosen as a growth vehicle.

When you look at market volatility we are socially acceptant of the fact that stocks and mutual funds fluctuate almost every hour, minute or even second in some cases when there are strong public awareness campaigns.

When it comes to the real estate market the volatility is much less in comparison. Looking even further into land the fluctuation is almost eliminated. No structure to depreciate, no maintenance, no broken appliances or mortgage crisis to affect your investment.

Instead you wind up keeping your hair in your head instead of pulling it all out. Yes land is the truest choice for wealth, you can bank on the simple fact that it’s here today and it will be here tomorrow. No one is directly influencing your company stock prices, choosing the incorrect buy and sell cycle for your intangible assets.

Instead you keep growing your wealth day by day year by year until the point that it’s time to sell and reinvest your proceeds for the next harvest. Why complicate your investment strategy? Make the conscience choice to do the right thing for your life.

Stop being influenced by the main stream media, or your best friend or family. You need to choose what’s the best path for your prosperity and sanity as well. Choose correctly the first time and learn to bank on the development of outlying communities to promote profitability and performance into your life.

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When it comes to investing many individuals are leaving more money on the table then compared to the profits that they can realize. Loyalty is the simple practice of being true to your self and to your needs. Just like with a friendship you cannot go out and do bad deeds to those you hold near to your heart.

When it comes to your investments yo need to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run. You never count your money when your sitting at the table, there will be time for counting when the dealings done.

A little nostalgia for those who remember the gambler. Getting back to the issues at hand your loyalty to your investments directly reflects your overall success with your investments. Too many times people are influenced by the latest and greatest trends on the late night evening news or a friends recommendation without ever doing their own due diligence.

Speaking of the gambler are you risking your future profits by gambling on the next big thing? Part of your loyalty to successful investing is stick to your guns and knowing that you have put your investments to the litmus paper test.

Making sure that your choices are financially sound, safe and profitable. Leaving a minimal risk for loss. Land banking is one of the most loyal investments to it’s investors due to the fact that land is less susceptible to market and economic fluctuations.

We have seen the effects of emotions, unloyalness, investor jitters along with many other influences that are non human in some cases. Company performance and profitability along with decisions based for growth or repositioning has a direct effect on your stock picks dividends. The same goes for mutual funds, bonds and all the other intangible asset classes of investments.

Way to many factors come into play. Even in traditional real estate investing has it’s pitfalls when you place simple human emotion into the mix. The amount of rehabbing done, the types of appliances, fixtures, carpet, paint and so on.

When you design your rentals for your lifestyle you typically lose. You usually don’t recover the costs for beautifying your rental units. Again this is why human emotion has to be removed from the equation, staying loyal to your analytical research findings is the surest way to successful investing.

This is why your loyalty has to be true to not only your financial advisor or individual investments it must be true to your hearts desire. You have to know what you want going in and how long your willing to stay, as well as the most important question how will you ever get out.

Exiting too early or too late can be just as huge of a devastation as impulsive investing without the proper knowledge. Also building your portfolio with only one type of investments is a sure way to leave that all mighty dollar on the table. You need a mixture of real estate, liquid investments, and some alternative sources to enhance your portfolio.

Precious metal, semi-precious stones, debt instruments, real estate, stocks, bonds and mutual funds are the typical investment classes. We are also given choices of bank savings accounts, cd’s, money market accounts, IRA’s and various other platforms to choose from.

When it all boils down at the end of the day you have to be able to live with your decisions and sleep well at night. These are the traits of being loyal to your investments and true to your own needs. If you can stick to one course of action and follow your game plan you are sure to win.

Dropping your guard, straying away from your own morals and ethics even for a moment is a sign of not being loyal. You have to stick with your decisions and stick to your guns. Now get busy reacquainting your self with your portfolio investments. Then get intimate with them.

No one else but you knows where your loyalties lye. Bank on the fact that you can land on your target with some guidance, understanding and patience.

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