Wealth Builder University Blog

Mortgage Market Woes: A time for Risk AND Attitude Adjustments

I clipped the following from the NY Times as I felt it gives us a pretty good indication of what to expect in the months and even years ahead. Could this 'subprime' melt down make the S&L crisis look like a 'cake walk'? Is there any relationship here between the 'junk bond' years and 'subprime' years? Regardless, I was pleased with the announced proactivity from the administration and FHA. Is it possible for public and private organizations to collaborate on processes and products that might help to alleviate capital market fears? I would suggest that consumers find ways to communicate and 'exploit' their individual economic-carrying-capacity as an effective strategy in negotiating work-out terms with lenders. This might require increased transparency and a willingness to be more accountable to a lender to avoid what historically would be a foreclosure. With today's technology there are ways to achieve better data for both borrowers and lenders to make better financial decisions through the next several years. Thank You FHA/HUD and the administration for 'stepping up'. As a People now, let's do our part.

Greg Johnson, Co-founder
www.wealthbuilderuniversity.com
www.wealthdollars.com

clipped from thelede.blogs.nytimes.com Bernanke provided additional context and information surrounding the Fed’s decision on August 17 to lower the discount rate, broaden the terms on discount window borrowing and issue a revised economic statement. In particular, the deterioration of financial market conditions combined with the tightening of credit in the first two weeks of August had appreciably increased the downside risks to growth. More specifically, the further tightening of credit conditions increased the risk that the weakness in the housing sector would be deeper and more prolonged than expected, with possible adverse affects on consumer spending and housing more generally.

Subprime-FHA-The FED-Gramlich & YOU

Mr. Gramlich, we wish you all the best in this moment of challenge. Unless one knows better they might very well mistake your words below as comments in ref to our current subprime and capital market woes which you have warned us about for years.

As a People we can learn from your own self-inquiry and answers as they relate to your personal circumstance. Despite how bad things are or still might get, what do we do now? As you said for yourself, personally, we..."make the best of it".

As a People, beyond even making the best of it we have an opportunity to create solutions. The easiest place to start is with ourselves. What is the financial well being 'in our own house'? What are we doing now to ensure our financial health and well being? Are these really simplistic questions? Perhaps. But the answers are not as evidenced by massive debt and underfunded retirement accounts. Ask yourself, AM I WHERE I WANT TO BE? Is there something for us all to learn from Gramlich's personal experience and professional outlook?

Greg Johnson, Co-Founder
www.wealthbuilderuniversity
www.wealthdollars.com

clipped from www.nytimes.com “This whole thing, I have to say, is tremendously unfair, that it hit. But it did hit, and what do you do now? You make the best of it.” For more than a decade, even before he was named a governor of the Federal Reserve Board in 1997, Mr. Gramlich was warning of dangers in the housing market, a stance that has made him a sought-after expert in the current crisis. As chairman of the Neighborhood Reinvestment Corporation, he urged legislators to better protect consumers against predatory lenders, and toughen regulation of mortgage lenders and banks. Nonetheless, his efforts met resistance within the Fed and on Capitol Hill, and even he admits he could have pushed earlier for reform. Still, in June, he published a timely book, “Subprime Mortgages: America’s Latest Boom and Bust,” that has linked his name once more to the home loan situation, which he says he never could have expected would become so dire.

Credit Score Financial Literacy

Greetings from the classic musical city of Vienna, Austria, where my wife Eva and I are visiting relatives, before returning home to LA.

The world is sooo small if you have access to the internet.

I came across an intriguing question on the bank rate website.

Your Boss Can Pull Your Credit. Who Else? 
By Steve Bucci • Bankrate.com

Dear               Debt Adviser, My husband's boss is rumored to periodically view credit reports of his employees. Can a boss do this and how do we stop this from happening? Thanks! Carol

See the continuation below for Steve Bucci's answer.

Alex Weiss, co-founder
www.WealthBuilderUniversity.com

Financial Literacy from Jerusalem

Greeting from Jerusalem.

I am looking out of my hotel room window with a view of sunrise coming over the Tower of David in the Old city of Jerusalem.

It's awe inspiring thinking of the great people of history that have seen the exact same sight.

All of this while reading an email from a friend who is in the business of helping people improve their financial position, Dave Ireland of InvestInYourDebt.com . His goal is to "eliminate all debt on the planet".

There is so much danger facing people who want to make the right decisions but just do not have 'Trusted Advisors' that know what they are doing and have the client's best interest as their prime objective.

Dave's client asked him if he should use the extra money he has to pay off his mortgage or put it someplace where he has-

" an investment which will get me a min. of 5% per month".

NOTE: A good idea without good implementation is not really a good idea.

Regards from across the ocean.

Alex Weiss, co-founder
www.WealthBuilderUniversity.com

PS Click on the continuation for the question and Dave's answer.

Financial Literacy - Simple Math, A Recent History

One of my guru's is Todd Ballenger of KendallTodd, Inc.

Below is part of a recent post to his BLOG which speaks for itself.

What will the standards of financial literacy look like for the next generation?

Good luck to us all.

Alex Weiss, co-founder
www.WealthBuilderUniversity.com

Financial Contagion and the Evolution of Math

 

Last week, I purchased a combo meal at a Burger King NC. The cost was $4.57. I handed a $5 bill to a young man at the counter, and reached into my pocket to see what spare change I could liberate from the dark and noisy front left pocket. He had rung up the 'out of $5.00' when I handed him $.07 in lose change. Expecting him to hand me back $.50, he paused - and calmly called for his manager.

This reminded me of an email I got some time ago about the shifting evolution of math education. Our continued orientation and focus relates to using arithmetic and their own goals to help the consumer navigate through their decisions related to borrowing. Borrowing from an industry that lowered eligibility requirements over the last several years while continuing to the ignore suitability requirements of that borrowing - hence the subprime hangover.

I learned math (basic arithmetic) in the 70's, and really related to a math teacher's recent perspective on how math was being taught in some schools ...

Teaching Math In 1960:

A logger sells a truckload of lumber for $100.  His cost of production is 4/5 of the price.  What is his profit?

Teaching Math In 1970:

A logger sells a truckload of lumber for $100.  His cost of production is 4/5 of the price, or $80. What is his profit?

Teaching Math In 1980:

A logger sells a truckload of lumber for $100. His cost of production is $80.  Did he make a profit?

Teaching Math In 1990:

A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Your assignment: Underline the number 20.

Teaching Math In 2000:

A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20. What do you think of this way of making a living?

Saga of the US Mortgage Industry

This posting is for those of you might have concern reading the recent headlines about the turmoil in the mortgage industry.

As a Certified Mortgage Planning Specialist,  I am a proud member of the CMPS Institute.

I received the attached article , "Saga of the US Mortgage Industry", today from the CMPS chairman and CEO, Gibran Nicholas.

Read the article and you will agree, the sky is not falling.  As a matter of fact, it is still up there and "very secure".

Alex Weiss, co-founder
www.wealthbuilderuniversity.com

Financial Literacy for Children

There is a good article this morning at bankrate.com entitled "Four Fiscal Lessons You Need to Teach Your Kids"

It covers the following:

•	Differentiate between needs and wants
•	Share the secrets of saving
•	Instill smart spending habits
•	Keep out of credit quicksand

I just happened to be speaking my one of our grandchildren this weekend and realized that he had no concept of the 'miracle of compounding'.

Here is a interesting and impressive question to get the point across.

How thick would a sheet of 8.5 x 11 paper if folded in half 50 times?

For those of you who want to try doing the folding, assume that the paper is cut on each fold and stacked, since the paper, once folded a few times, would be too thick to fold again.

And for those of you who are really compulsive, here are a few facts. The paper is:

• 8.5 x 11
• Bond
• Cotton Fiber
• Flat Finish
• 24 pound

If you think you have a handle on financial literacy, here is a follow up question.

How thick would the folded paper be if it were taxed at 33% after each fold?

The answer is on the continuation page.

Good luck

Alex Weiss, co-founder
www.wealthbuilderuniversity.com

Financial Literacy advice from my daughter

Hopefully we all reach a stage in life when we get paid back for for our investment in our children with pride in what they are and/or do.

This morning I got the following from my daughter Pessy.

I hope it makes your life a little safer.

Alex Weiss, co-founder
www.wealthbuilderuniversity.com

PS I would have given the name of the person who wrote it but I did not get it in the email.

ATTORNEY'S ADVICE --NO CHARGE

Read this and make a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice! 

A corporate attorney sent the following out to the employees in his company.