My New Blog

News Release
	January 28, 2010
	Fannie Mae Announces 3.5 Percent Seller Assistance on HomePath® Properties Incentive Part of Ongoing Effort to Stabilize Neighborhoods WASHINGTON, DC — Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010. "Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help," said Terry Edwards, Executive Vice President of Credit Portfolio Management. "Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home." Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.

The above news release was issued by FannieMae and can be found on their website.  This is exciting news for homebuyers.  Now you can buy a home owned by FannieMae and they will credit you with either 3.5% of the sales price to be applied against your closing costs OR against the cost of new appliances - your choice.  PLUS you can purchase with as little as 3% down.  BUT you must act quickly.  In order to qualify for this program you must be in contract on the home and close on the home before May 1, 2010.

To learn more call (888) 474-1213 and ask to speak with Terrence Tormey at Benchmark Lending, or e-mail him at terry.tormey@benchmark.us.

Remember, ACT NOW to receive this benefit!!

www.BenchmarkLendingSolutionsUSA.com

False Illusions and What You Need to Know

Homebuyer Alert…

For prospective homebuyers who are on the fence about making a home purchase, the next few months represent a countdown of sorts for two reasons.

The first of these, the coming expiration of huge tax incentives, may be a bit more obvious to most borrowers. April 30, 2010 is the last day to enter into a home purchase contract and still potentially qualify for a federal income tax credit of up to $8,000 for first-time homebuyers and up to $6,500 for repeat homebuyers. The credit can be claimed only on contracts that close by June 30, 2010.

Secondly, beyond the waning benefit of the Federal income tax incentive, another form of stimulus will soon disappear, as the Federal Reserve winds down a program that has been keeping home loan rates artificially low.

Rate Alert…

The lowest rates of 2009 were driven down to their attractive levels because of the Federal Reserve Bank's Mortgage Backed Securities (MBS) purchase program. Home loan rates have an inverse relationship with the value of MBS. When these securities trade higher on the market, rates move lower and vice-versa. So when the Federal Reserve originally agreed to be a big buyer, it helped provide a market for MBS, which helped keep prices high and, as a result, helped push home loan rates low.

And while the Federal Reserve continues that program through the end of March 2010, the reality is that the Federal Reserve's “extension” was really more of a rationing intended to prevent home loan rates from spiking as the program is phased out. It’s sort of like weaning the market off of its life-saving treatment instead of forcing it to go cold turkey.

Already, some in the media have mistakenly reported the extension of the program through March as good news, telling consumers that rates will continue to decline, and remain low into the spring. This gives a false sense of security that homebuyers and refinancers simply cannot afford.

The problem is…

Those reports do not accurately report what’s going on or where rates are really headed. That can have a very costly impact on consumers who may miss out on historically low rates if they listen to these media outlets.

Here’s what’s really going on…

In May 2009, the Federal Reserve's purchases of MBS (Mortgage Backed Securities) peaked at an average of $25 Billion per week. As of November, the average weekly purchases dropped down to $14 Billion. At the end of November, the Federal Reserve had already used over 80% of the allocated funds for MBS, meaning less than 20% remained to be used over four months.

Making the problem worse is that the Federal Reserve now has less money available to purchase MBS while at the same time, the supply of these securities has increased as a result of refinance and purchase activity that was triggered by lower rates.

Why is that important?

As the Federal Reserve now has fewer funds to last through the remaining months of the program, its ability to keep rates low will wane.
As the Federal Reserve's program winds down and ends, we will likely see two (2) things happen.

• First, we will probably see higher levels of volatility—with rates sometimes shifting dramatically in the middle of the day. That means it is more important than ever for buyers to work with a knowledgeable mortgage professional who has a finger on the pulse of the market at all times and can provide trusted, proven advice.

• Second, since MBS (Mortgage Backed Securities) will have less support from the Federal Reserve Bank, rates are likely to rise over time.

In short, while rates are still very good, they may not be for long.

What should you do to protect yourself?

First and foremost, work with a knowledgeable mortgage originator who studies and monitors the market.

Second, don’t be fooled by media stories that only report the headlines and don’t understand the underlying implications of the Federal Reserve’s actions. If you ever hear something in the news but aren’t sure what it means to your situation, feel free to call or email me for in-depth answers and advice.

Finally, if you haven't yet explored how the current rate environment might benefit you or someone you know, let’s arrange a time to sit down and discuss your unique situation as well as your short- and long-term goals. Remember, rates are still very good, but they may not be for long.

To learn MORE please call (888) 474-1213 and ask to speak with Terrence Tormey.

Terrence Tormey - Benchmark Lending

terry.tormey@benchmark.us

www.BenchmarkLendingSolutionsUSA.com

Should You Refinance?

There is really only one person who can decide whether or not you should refinance your mortgage. And that person is you. Many homeowners have benefited financially from a mortgage refinance, but whether or not it's the right thing to do depends on your own financial circumstances.

With that disclaimer out of the way, let us discuss some financial scenarios when mortgage refinancing makes sense.

Mortgage Refinance - Quick Definition

Before we talk about scenarios when it makes sense to refinance, let's briefly define what exactly a mortgage refinance is. Basically, refinancing takes place when you pay off your current mortgage with a new one.

At first this might seem pointless. After all, a mortgage is a mortgage, right? Wrong. The whole point of refinancing a mortgage is to take advantage of a better interest rate and/or to extend or shorten your repayment term in order to save you money and to improve your monthly cashflow.

For example, if you have improved your credit score since your first mortgage loan, you would likely qualify for a better interest rate on a new mortgage loan. In such cases, you can pay off your old mortgage with a new one, and enjoy a lower interest rate on the new loan. This of course means you will pay a smaller mortgage each month. That's the primary goal of mortgage refinancing.

When to Refinance

Now that we understand what it means to refinance a mortgage, let's talk about scenarios when it makes sense to do so. As a general rule of thumb, it's probably a good time to refinance if the new interest rate is less than your current interest rate.  The objective is to save money on a monthly basis in order to improve your monthly cash flow.  More money in your pocket every month means life gets easier for you to maintain the life that you are currently living. And you will probably sleep better at night.  In such cases, the money you would save each month would certainly make up for the upfront costs of refinancing your mortgage (origination fees, etc.).

Another scenario might occur if your income has increased. If you are making more money than when you first took out your mortgage (and you can afford a higher mortgage payment), you could refinance the mortgage to shorten the term of your mortgage. If the current interest rate is lower for the shorter-term mortgage, it would make sense to refinance the mortgage. Or, you might wish to make larger principal payments against your mortgage to pay it off sooner. These are all possibilities with a mortgage refinance.

A third (and common) refinancing scenario occurs when home owners trade their adjustable-rate mortgage (ARM) for a fixed-rate mortgage. At this time, home foreclosures have gone way up. This is largely due to Adjustible Rate Mortgages that are adjusting and catching the homeowners off guard with much higher interest rates and correspondlingly higher monthly payments. Many people in this scenario have refinanced to a fixed-rate mortgage. This strategy allows the homeowner to lock in a more favorable fixed rate for the life of the loan. No more surprises!

Using a Refinance Calculator

In every case of refinancing a mortgage there is a certain mathematical "break even" point. This is the point at which it makes mathematical sense to refinance your mortgage. In other words, the money you save will exceed the money you pay to take on a new loan. To calculate whether you would benefit from a refinance visit www.BenchmarkLendingSolutionsUSA.com/mortgagecalculators and scroll down to the "refinance calculators."

Refinance calculators can help you determine this break-even point by comparing your monthly savings (after refinancing) to the amount you would pay if you did not refinance. If you would like advice on whether or not it is the right time for you to refinance, contact me.

Terrence Tormey
(888) 474-1213

terry.tormey@benchmark.us or ttormey@BenchmarkLendingSolutionsUSA.com

Rates Have Hit All-Time Low Levels Again!

In case you haven't caught the news, home loan rates have done it again, dropping to their lowest level...ever. Not only has the 30 Year Fixed rate returned to its lowest all time level, rates across the board are at their lowest levels.

Yes, that means, go ahead and choose your flavor – 30 Fixed, 15 Fixed, 5/1 ARM or 1/1 ARM – all loan types hit their lowest levels of the year! For the weekly Freddie Mac survey of all lenders, this is the first time that all have been at their lowest level.

You must understand, though, that rates are artificially low! Last November, Ben Bernanke and the Fed put into place a program to lower rates. That program though is nearing its end, as the Federal Reserve has purchased over $1 Trillion of mortgage backed securities this year and with less than 20% of allocated funds left in the program, rates are sure to increase. The only questions remaining are by how much and when.

The chart above shows the 30 Year Fixed Rate over the last 11 months. The first red arrow shows what took place when interest rates shot up in May, rising nearly 0.75% in a matter of days. And just as when the holidays come and go this month, the rates that are available today are likely to take off as well, only this time for good.

Interest rates that were in effect prior to the implementation of the announcement of the Fed's program last year were well above 6.00% and a return to those levels cannot be ruled out. If you are looking to refinance or currently shopping for a loan, lock your loan quickly to take advantage of the lowest rates we are likely to ever see in the future.

Remember, the reason I wanted you to see where rates have been this year is also to see how quickly they can rise. If you would like to know how I can help you, call me today. Waiting could cost you an opportunity to have an even bigger smile on your face when you say "Happy Holidays!" this month.

For more information CALL (888) 474-1213 and speak with Terrence Tormey or e-mail him at terry.tormey@benchmark.us or visit www.BenchmarkLendingSolutionsUSA.com

Using your IRA as an instrument to invest in Real Estate

Many investors have become disenchanted with recent stock market volatility, stories of corporate scandal and corruption. In addition to impacting retirement account values, these events have also strained investor confidence. It is no wonder then that more and more investors are pushing their advisers to offer Self-Directed IRAs (SDIRAs) that allow them to invest in alternative assets which they believe will provide greater diversification and control over their retirement nest eggs.

What You Should Consider:

While the list of alternative investments includes a wide-ranging group of assets — including private equities, hedge funds and mortgages — one area that has captured the greatest level of interest is real estate.

Typically, real estate comprises 60% of clients’ alternative asset investments. Some real estate advisers suggest that falling prices, combined with increasing inventory, is creating new investment opportunities. As prices begin to fall, the pendulum may swing past center to create oversold conditions, providing opportunities to buy real estate at low prices. Some areas in the U.S. may already be starting to experience this phenomenon.

Another factor to consider is that many real estate investors are being squeezed out of the market due to the current credit crisis. This has created a "unique opportunity" for cash-rich retirement plan investors. These investors are either purchasing the real estate outright, through a partnership or LLC. It is estimated that the first of more than 78 million baby boomers will begin to retire this year. This group controls more than $14 trillion dollars in retirement plan assets. These assets are being “rolled-over” from employer-based plans to individual retirement accounts. Many baby boomers have already begun to shift away from traditional equity investments to those that generate income, such as, income producing property. Add these factors with the possibility of equity appreciation, and it is clear why real estate is growing in popularity.

Opponents of using the SDIRA to invest in real estate focus on key concepts which they believe have a profound effect on individual financial strategies. Before engaging in any transaction prudent investors are wise to consider them. First, profits personally made in real estate, if long-term, are taxed at the capital gains rate of 15%. When a SDIRA sells a piece of real estate there are no taxes due at the time of sale. However, when the owner takes a distribution from their retirement account, the proceeds will either be taxed at their ordinary income rate (for a traditional SDIRA) or are tax-free under the Roth SDIRA.

Additionally, SDIRA investors cannot depreciate property or write off interest from their mortgage on their personal tax return. Another important issue concerns the access and use of property held inside the SDIRA. Neither the account holder nor his or her family members may have personal use of said property; doing so would result in a prohibited transaction. SDIRA firms, such as Trust Administration Services can help educate investors about how to use a self-directed retirement account to invest in alternative investments and other investments.

Any investor that has been intimately involved in a real estate transaction is already familiar with the basic requirements of buying real estate in a SDIRA. There are other issues which must also be considered, such as ensuring the proposed investment is not a prohibited transaction. This is why choosing the right self-directed retirement plan custodian is important. Important factors to consider when selecting a self-directed IRA custodian include experience, a consistent service record, organizational structure and wealth of expertise.

After the proper SDIRA custodian has been selected, the investor should request and complete the appropriate forms for their Traditional, Roth, SEP, Simple, Individual 401(k) or other qualified plan(s). The SDIRA adviser will guide the individual through this process. Once the account is established, the SDIRA custodian will forward the transfer form to the resigning custodian, whether that is a brokerage firm, mutual fund, insurance company, bank or trust company. Upon receipt the prior custodian will transfer the assets to the new SDIRA. A high-quality SDIRA adviser will make the process seamless for investors.

Ongoing market volatility, combined with the need of baby boomers to generate income, and retire securely, is causing investors of all shapes and sizes to take a hard look at their investment allocations to ensure there is a proper mix of opportunity and risk. As investors needs change, alternative assets and self-directed retirement accounts will become important tools to diversify and grow retirement wealth.

What the Mainstream Headlines Won't Tell You About Housing

$800,000.

That's about what the median home in San Francisco sold for at the height of the boom three years ago. Then the bust came, and prices fell 45%, according to the Case-Shiller home price index.

But a funny thing has been happening lately... something people haven't really noticed...

Home prices in San Francisco actually bottomed in March. According to the Case-Shiller Index, they've been up every month since... up nearly 4% in the latest month.

On the other side of the country in Florida, the same thing is happening. Again, people are almost refusing to notice... But for 11 consecutive months, home sales in Florida have INCREASED over the same period last year.

Meanwhile, homes in Florida are now ridiculously affordable.

The median home price in Florida is now $147,600. That's almost a P&I mortgage payment of about $650 a month with 20% down at current rates. The median household income in Florida is about $50,000, roughly $4,000 a month before tax. That's about 16% of your household income – way below any rules of thumb about debt to income ratios.

From coast to coast, housing affordability is better than it's ever been, getting a big boost from two things: the housing bust and very low mortgage interest rates. The pile of government incentives has helped too.

I'm seeing what I love as an investment... It's an ideal situation that's rare, but incredibly important if you can recognize it. It's when people's emotional opinions are clearly at odds with the reality of the numbers.

The numbers for housing are really great right now. But after three years of losses, people are sour on housing.

Three years ago, we had the opposite situation... The numbers for housing were terrible. Housing was completely unaffordable and builders were building at a frantic rate. But people were incredibly enthusiastic.

Today, the value is there. What will cause prices to climb again? Of course, when the supply of homes available for sale shrinks is when prices shall go up again…its Economics 101. And guess what? We're there...

Right now; fewer homes are available for sale than at any time in the last 40 years (adjusting the supply for the growth in the U.S. population). If I hadn't crunched the numbers myself, I wouldn't believe it.

Even better, when you do the simplest, dumbest comparison – the price of homes versus the supply of homes – you get exactly what you'd expect: When the supply of homes gets low, home prices rise.

David Dreman agrees...In 1980, he literally wrote the book. It's called Contrarian Investment Strategies. In it, he recommended going heavily into stocks. In the current issue of Forbes magazine, Dreman recommends U.S. residential real estate:

If inflation hits hard, the chief culprit of the bear market – real estate – is likely to be one of the best investments in the years ahead.

Buy a home if you don't already have one or a second home if you can afford one.

Good investing.

Regards,

Terrence Tormey

Benchmark Lending

1540 Route 138 West

Bldg. 1, Suite 108

Wall, New Jersey 07719

Office: (888) 474-1213

Office: (732) 993-3639

Fax: (732) 280-6240

terry.tormey@benchmark.us

www.BenchmarkLendingSolutionsUSA.com