Greetings from the metropolis of Cedar Crest, NM.

My ten year old son, Colt, loves football.  Colt’s football season came to an end this past weekend and he was devastated.   In an effort to pick up his spirits, I promised him that we would practice basketball this coming Monday.  My words of basketball did not keep the tears back….but he did realize that a new season of basketball was just around the corner.  Colt knew football would come to an end….just did not realize how quickly the last day would come….but we all knew it would come.

No truth in politics and YES…..that includes the politicians

As we go through this very difficult economic season, we hear the cries and shouts from all corners of the class ladder.  Turn on the TV or any AM radio station and you will hear the desperate voices…complaining and blaming.  With every complaint and every tear….there is a politician ready to listen and ready to wipe the tears.  But we all know there is no truth in politics…no matter what party you follow.  So when I see the bumper sticker with the face of a politician and the word “HOPE”….I laugh to myself.  Hope where there is no truth….how foolish are we?

We told you so…..

But….underneath the media stories and the political ads lies a small group of individuals that saw this coming.  These individuals are not all on the same page and do not all agree with each other…BUT…they saw it coming. I am not saying these people saw it coming a year ago or two years ago….but some saw it several years ago and some saw it decades ago.

These sophisticated and not so sophisticated individuals wrote articles and books of what is to come.  Others just created websites of the coming gloom and doom.  There were those that studied the cycles and based on history, predicted this economic down turn.  There were others that studied conspiracy theories going back hundreds of years ago.

No matter how they came to the same conclusion…..they all saw it coming.

The “I told you so” group

There are a handful of “I told you so” prognosticators.  Most of the have to do with the stock market, a few with real estate, the others with the banking system.  But if you are interested….here is how I started down this path…..

1) Prophecy by Robert Kiyosaki. Like most of you, as a budding entreprenuer, I started out with the series of Robert Kiyosaki books.  Rich Dad, Poor Dad got me thinking differently.  Robert’s book Prophecy…just got me thinking.  Mostly about stocks and retirement funds, the discussion on cycles was very intriguing to me.

2) The Next Great Bubble Boom by Harry S. Dent.  Again…mostly about stocks….but real estate is also mentioned.  This book freaked me out…a little.  But….Harry is almost on the money….so now it freaks me out a lot!  I think it is worth a read…I will probably read it again.

3) The Pirates of Manhattan by Barry J. Dykes.  This is a newer book but worth a read.  A little on the conspiracy theory (okay…a lot) but very interesting and a bit demoralizing.  If that hopelessness feeling does not hit you with this book…the next one might do it.

4) The Creature from Jekyll Island by G. Edward Griffin is the “king” of all conspiracy theory books I have come across regarding the banking system.  This is a great book if you want to understand banking system from it’s roots….but this is a text book…not an easy read…but the conspiracy stuff reads like a novel.  Per Griffin….everything that is happening today was part of a plan devised in early nineteen hundreds.  Griffin wrote this in the early 90’s.  To give you a better feel for the book…Congressman Ron Paul endorses it.

Did we not all see it coming?

We all knew the end was coming….but did we just choose to ignore it?  In some cases, I knew it was coming and took action.  In other cases….I ignored what was coming and I may possibly pay for it.  Either way….we are all going to pay for it….right?

Until next time….rob

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Tags: banking, collapse, Economy, meltdown, mortgage meltdown

Stated income loans have been a touchy subject for many regulators trying to blame some one for the mortgage meltdown. Some individuals go as far a calling these loans “liar loans” because in a number of instance the income was inflated. Right or wrong there is a need for stated income loan. Self-employed individuals see the biggest benefit from stated income loans, but as lending guidelines have tightened up over the last year, so has the language of the stated income loans. Stated Income Loans have now transformed into Asset Based Stated Income Loans. With these loans underwriters are now paying careful attention to assets, employment history, and reason ability of stated income.

For investors this will become very important because individual now will need to have legitimate companies with web sites, yellow page ads, and internet presence. They will also need to create cash reserves to help substantiate and protect their stated income amount. The other alternative is to use tax returns to qualify and for those that like to write off as much income as possible this can be a dead end.

Asset Based Stated Income Loans are ideal for self-employed/salaried borrowers with excellent credit. No tax returns or other written verification of income. Assets are required to be verified with at least two months statements.

What is often required for a stated income loan:

1. ASSETS - Liquid assets are now required to equal at least 6 times your stated income. If you state that you make $10,000 per month we will require at least $60,000 in your bank accounts.
2. EMPLOYMENT HISTORY – We look for individuals to be self employed or 1099 income for at least 2 years. We require a business license or a letter from your CPA verify your employment history.
3. REASONABLITY – If your income is over $25,000 per month underwriter will look to substantiate the dollar amount. They will look for your sources of business. Items like a website, yellow pages, dex pages, magazine advertising, and new paper ads are resources an underwriter looks at to determine the scale of your business.

Asset based stated income loans are designed to utilize verified assets to support the income stated on the application.

Tags: asset based stated income loans, financing investment properties, investment loans, mortgage meltdown, state income loans, troy schuricht

“I’m melting,” said the Wicked Witch after being doused with water in the land of Oz.

Well folks, looks like the economy is melting having been doused with a hefty dose of reality.

A new report today by the Joint Economic Committee of Congress, says the New York Times, is predicting some two MILLION foreclosures just by the end of next year—this “on homes purchased with subprime mortgages.”

The report is apparently far more dire than the prediction by the Bush administration of only half a million or so foreclosures. Surprised? Come now.

So, what does this mean in terms of money lost?

The report says 71 BILLION dollars will go down the drain due to lost real estate wealth caused by foreclosures on subprime loans alone.

And, it gets worse. Listen to this: Says the report, as quoted by the Times, “An additional $32 billion would be lost because foreclosed homes tend to drive down the prices of other houses in the neighborhood.”

Sort of like guilt by association–only, in this case, it is financial loss by association.

The real news is that hardly a day goes by when what we thought we all knew about the full extent of the problem gets tossed aside by new figures or a new private or government report.

Now, in Oz, you’ll recall, the whole damn mess began because that house happened to fall on a witch. If The Wiz was being penned today, the witch would have died of a coronary after her subprime mortgage tanked.

Tags: Economy, mortgage meltdown, subprime