Millions of Americans Waking Up To The Reality

That Their Homes Have Lost Value.

Major mortgage lenders have been mailing letters to home

Owners telling them that their Home Equity Lines Of Credit (HELOC) have been shut down.

Lenders have been quietly accessing and reappraising home values. Lenders are now exercising their rights to ‘shut off’ or in some cases terminate existing HELOCs. They do this when they believe that the property has lost value. This is happening across the country to borrowers with stellar credit as well as those will troubled credit.

When this happens there is no clear path to regaining access to your HELOC. All those expense closing costs and points for that HELOC you thought you had….lost.

This is a partial list of the Mortgage Lenders who are sending Heloc freeze letters now.

Bank of America- Heloc Freeze pending

Countrywide-  Heloc Freeze already sent

Chase- Heloc Freezes Sent

CitiGroup-  Heloc Freeze under review

National City- Heloc Freeze Sent

Suntrust- Heloc Freezes

USAA Federal Savings-  Heloc freeze status unknown.

Washington Mutual- Heloc Freeze Likely as acquisition by chase nears

If you need the HELOC money for some upcoming expense we suggest you take it out now before its too late.

How Can My Lender Freeze My HELOC?

What Can You Do Now……..

You just received notice in the mail that your Home Equity Line Of Credit is frozen or best case the amount you can borrow is just reduced.

The money in your HELOC was going to go to pay for college tuition, a new car or maybe health expenses. You paid hundreds and sometimes thousands to secure the HELOC in the first place…

What can you do now?

Short Answer. Nothing.

Lenders has the right to reappraise your home at any time. If they think your home has depreciated they can cancel your HELOC.

They are now doing this across the country. Your credit score does not play into this decision.

Lenders can cancel (or call the loan due) when they suspect:

1. Fraud (in application)
2. You do not meet repayment terms (ie lates and non- payment)
3. Your actions adversely affects collateral (insurance waste taxes and like)

Lenders Can Freeze or reduced HELOCs when:

1. They determine the value of property declines
2. They reasonably believe you will be unable to fulfill your payment obligations
3. You become in default of material obligation.

Free Instant Free Download of Tim and Julie Harris’s 7 Part Agent Short Sale Secrets Crash Course www.AgentShortSaleSecrets.com. Instant Free Download.

By Julie Harris

Did you set specific goals for 2008? What are/were you planning?

Define what that means. For some people that means spending more time with their family than they’ve ever spent before. For some that means three more transactions. What does it mean to you?

It’s time to check up on yourgoal setting. One of the first things to do is to look at where you are. Here’s an exercise called ‘Grade Your Life’. There’s more to life obviously than doing transactions and specific financial goals. This is for every area of your life.

Take your pencil and write at the top of your paper Grade Your Life’. This exercise has specific rules to it and you’re not allowed to think about it or mull it over. You have 45 seconds to complete it after you’ve written this down. Again, don’t think about it just do it.

The grading scale goes from ‘A’ to ‘F’ just like normal. ‘A’ is doing fantastic, ‘F’ is that you consider you’re failing at that certain part of your life and most people are somewhere in between.

Here are the categories:

1. Income

2. Savings/investment

3. Wealth

4. Close, personal relationships

5. Friendships

6. Health and fitness

7. Knowledge and skill

8. Wisdom

9. Spiritual development

All of us have different definitions for each of these categories. It doesn’t matter it means something to you and that’s the only thing that’s important here. Take 45 seconds and write down your initial reaction of how you grade yourself. Don’t think about it just do it.

This is where we start with goal setting. In order to know what you want you have to know where you are. This is a great exercise to know where you are today. Write this down.

“You’ll accomplish more through movement than through meditation.”

–Anonymous

Your brain is about 100 times as active once you get in the movement. Your mind actually loves physical activity. It’s something to consider. How does that relate back to your goals?

Look at how you rated yourself and ask yourself, what am I doing? The ones that you’ve graded yourself an A+ that’s fantastic. What are you doing to keep yourself there?

The ones where you want to have a higher grade throughout 2008, how do you do that? What is the action? What is the movement that it will take to get you there?

Most major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOCs) – and I don’t want you to be caught off guard by this development. If you were planning on using your HELOC for spring home improvements or college tuition chances are the money has been–or will be–shut off.

You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value. Many of our students who do BPOs are reporting to us a dramatic increase in BPO requests from lenders for this reason.

From Countrywide..sent to borrowers before Countrywide Froze Helocs:

‘Important message about your loan: At Countrywide Home Loans we are committed to helping customers sustain homeownership. As part of the commitment, and in keeping with its sound risk-management and responsible lending practices, Countrywide Home Loan is reviewing and analyzing home equity lines of credit in its servicing portfolio.

As you know, home values in many areas of the country have declined. We believe that the decline in the value of your property, from its original appraised value at the time your loan was made is significant. In accordance with the terms of your Home Equity Credit Line Agreement and Disclosure Statement (Agreement), we have elected to suspend further draws against your account as of the Effective Date above.’

On Friday, the Los Angeles Times reported that Countrywide notified many homeowners they’ve lost their right to borrow against their credit lines:

‘ Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They’ve been told by their lender that they can no longer take money out on their credit lines because sinking home prices have left them with little or no equity.

Among the lenders taking such action is Countrywide Financial Corp., which sent 122,000 letters to customers last week telling them they could no longer borrow against their credit lines. In some cases, according to the company, the borrowers are now “upside down” — the total debt on the home exceeds the market value of the property.

Calabasas-based Countrywide, the nation’s largest mortgage lender, says it uses computer modeling that factors in changes in home prices to determine which customers will have their money tap shut off. ’

Will we see a Chase HELOC freeze, or a Bank of America HELOC Freeze? What will that do to the economy?

If there was any question that consumers were feeling the pinch before…just wait until they are told that their homes are worth LESS than what they owe. Or in the word of Coutrywide…’Significantly Less” Think that will have an effect on the economy..think this will make consumers feel more confident about housing?

Free Instant Free Download of Tim and Julie Harris’s 7 Part Agent Short Sale Secrets Crash Course www.AgentShortSaleSecrets.com. Instant Free Download.

By Tim Harris

“Is the life that I’m living worth what I’m giving up to have it?”

– Richard Branson

Ask yourself that question. The answer will be something different to everyone. If you want to do something different or if you want your life to be different or if you’re feeling like you’re not in a place that you want to be financially, think about that quote.

If you find yourself thinking that you want 2008 to be better than 2007, especially in the time you’re spending at work, start with this question, am I thinking of real estate as a transaction-based business or as a relationship business?

The two are diametrically opposed and have nothing to do with each other.

You’ll know you’re a transaction-based person if you’re intently focused on making more contacts, if you’re intently focused on setting more appointments and constantly thinking of people as a number versus someone you can help. There is no other way to burn yourself out faster than thinking of real estate that way.

We are in a relationship business, a people helping business.  We are here in the real estate business at a time when sellers have never needed us more. There has never been a time in your careers when sellers have so desperately needed your services.

When you are great, when you are trying to move forward and trying to focus on what’s best for that seller they will stand in line to do business with you. Sellers aren’t just numbers they’re people that can help.

If you’re feeling frustrated or it seems things are little harder than they should be you have to start by asking yourself that question. Am I in a transactions business, a people helping or relationship business?

If you find your mindset is that of transactions and you’re feeling burned out, chances are those two things are related.

By Tim Harris

“The most expensive information is bad information.”

– Richard Branson

How does this apply to you?  You find yourself in what is unquestionably the most troubling and challenging real estate market in the history of the country that’s the truth and the bottom line. This is the most challenging real estate market that we’ll ever face. There will be more property depreciation over the next 12-24 months than we’ve seen even compared to the great depression.

It’s quite amazing. The most expensive information is bad information or information providers.  It doesn’t matter if it comes in the form of coaches, trainers, office managers or brokers.  If they’re not telling you to take a hard look at everything you’re doing from working with sellers to buyers, your listing presentations, buyer presentations and everything that worked for you so well in that hot seller’s market has to be challenged now.

A lot of the things you said and did would work quite well in the previous market, but in this market if you’re not for example:

• Learning the new scripts that are necessary for getting prices down and convincing sellers they need to sell now versus waiting for the market to worsen,
• Showing buyers how to overcome their fear of overpaying,
• Learning short sale skills or the new presentation skills,
• If you’re getting information from any source that’s telling you not to challenge your beliefs about information, knowledge, expertise and not telling you to move forward and better yourself in order to serve sellers and buyers at a higher level…

Then you’re stuck in the past, move on.

By Tim Harris

Bill Phillips is the author of Body for Life among other great books. Aside from being a famous nutritionist he’s known for helping people lose weight as well as a remarkable business person. He sold his business not so long ago for $350 million dollars.

He started that business Body for Life and the whole EAS food supplement business out of his basement. He started that business along the same lines as you started your real estate businesses in small one-man shops. It wasn’t even 15 years after he started it that he sold it for $350 million dollars.

A question asked of Bill was about his a.m. ritual; his morning schedule. What does he do in the morning and to this day he sets his mindset in the direction of success and being able to attract to him so many positive things. These are things he shares:

1. He starts every morning by reading something inspiring, which gives him a positive mindset.
2. He has two to three minutes of silence and thinks about what he just read.

This way he can engage his brain using higher energies more focused on his intention. Some say it would be similar to a meditation, but it’s more in line with gearing his brain toward attracting what he wants to attract in his life. This is a guy that just sold his business for $350 million dollars so he’s probably someone to listen to.

3. He exercises to get his body’s energy flowing.

He suggests everyone start out by doing a 20 minute walk or some sort of dynamic motion in the body. Taking a walk, doing push-ups, jumping jacks anything for 20 minutes, plus or minus will get your mind working. Dynamic motion will put you in a mindset of positive energy, because you’ll have energy flowing through your body.

Energy flowing through your body, especially when you started out with reading something positive and motivational will put your powers in motion and put you in a place to help other people and put your attraction powers on full force. Keep these thoughts in mind.

Choosing the correct clients

By Julie Harris

Oddly enough in real estate you may have noticed that the most motivated clients, the ones that have to buy or sell are also the easiest ones to work with. Ask yourself if you have any pesky listings, the people who are bugging you about every little detail and yet not cooperating when you ask them to correct the feedback items. Do they actually have to sell their house, because it seems that the people who have the luxury of time often are the ones who abuse it the most?

Think about that, start practicing the concept of cultivating lilies and avoid leaches. Lilies are people and projects that repay you the effort that you put in and these people are the battery chargers.

The leaches are people who take from you even when you’re not talking to them. We don’t drop the leaches frequently enough in real estate, because it may be the only deal we’re working on yet it’s the same thing that drives the business into the ground, because you’re working with the wrong people.

Go through your leads, go through the people who are listed with you and ask yourself am I working with a lily or a leach? Who is sucking the life out of your time and your daily schedule? Who is dominating your thoughts?

Do they have to sell or buy? Probably not. Could you cut them lose and work with the lilies? What can you do to cultivate lilies today? If you don’t have enough lilies in terms of the people you’re already dealing with what can you do to create more? How can you cultivate more?

Can you call back all the leads sitting on your desk? Some of you use the Internet to your advantage and you have great leads from your website, but you haven’t done anything with them. Some held open houses last weekend and haven’t called those people back. Some prospect every day, you make the initial contact and if you don’t get anything on that contact what happens to that lead? Are you continuing to follow-up?

When a For Sale by Owner comes onto the market everybody calls them, but who follows up? Cultivate the lily, the people who actually have to buy or sell, who can use your services and who appreciate what you do every day. If somebody falls into that leach category cut them loose you don’t need that kind of stress.

Real estate can be hard enough on its own without somebody abusing your time and not appreciating you. Give before you get. Be of service, but make sure you’re working with lilies. Think about that as you go forward with your day.

This is an open appeal to US Treasury Secretary Hank Paulson and US
Housing and Urban Development Secretary Alphonso Jackson. And all the
lenders who participated in Project Lifeline.

Stop procrastinating what must happen and happen now to save housing and the millions and millions of families who are experiencing this crisis. None of the programs the government has proposed to stave off the deepening housing crash will help.

What wont work:

Stopping all foreclosures for 30 days is not the solution.
Freezing mortgage rates is not the solution.
Easier financing from the FHA is not the solution.
Mailing checks to people…not the solution.

Why?

Simple, millions and millions of American homeowners are ‘upside down’ in their homes They owe more on their homes than they are worth. Its clear that this trend towards the devaluing of homes is going to continue.

Homeowners with adjusting mortgages can’t refinance when they are ‘upside down’.

No lender is going to do a mortgage on a home where there is negative equity.
We have yet to see the true onslaught of foreclosures. We have yet to see the onslaught of builders dumping their inventory. Last but not least we have yet to see home prices drop to the point where buyers will start re-entering the market in mass. Until that happens there will continue to be a massive worsening problem with housing. This problem if left unchecked will cause not only a recession in the US but a global recession as well.

Here Is The Only Solution To This Massive Problem.
Short Sales.

Lenders have to make the short sale process faster and easier. Lenders simply have to avoid the REO inventory. Its not possible that the lenders can afford to handle the sheer amount possible REOs.

They literally can’t afford to. They know this. Thats one of the reasons they are delaying the foreclosure process. In many parts of the US home owners are missing 3,6 and sometimes 12 payments before a NOD is even filed.

Now, before its too late the government has to motivate the lenders to do short sales. There has to be some sort of ‘Short Sale Fast Track’. When this happens the lenders will have to take some sort of loss. But, the loss to doing a short sale is far less expensive and damaging vs the foreclosure. Less damaging to the lenders and the homeowners.

Here is why:
1) When a foreclosure happens in a neighborhood its been proven that all area homes are devalued. If you think its bad now–just wait until all the ‘Foreclosure’ signs are in the yards of millions of homes for sale.

2) The average foreclosures costs a lender $50,000. That’s just in the processing and holding. Not the actual loss on the investment.

3) Doing short sales is far less damaging to the borrowers credit. The government and the lenders have to get their collective heads out of the sand now. These little Band-Aides that they are doing now won’t work.

Bottom line, the least damaging solution to this crisis is short sales. No question.

Free Instant Free Download of Tim and Julie Harris’s 7 Part Agent Short Sale Secrets Crash Course www.AgentShortSaleSecrets.com. Instant Free Download.

By Julie Harris

Today’s message is a short quote and a short thought, but something that has long-term meaning that you can take forward in your everyday practice, so pay attention.

“To succeed try to see how much you can give for a dollar instead of how little you can give for a dollar.”

– Henry Ford

How do you apply this to your real estate business?   Are you giving your customers, your clients, your leads, other agents you’re dealing with, your team if you have a team, your assistant if you have an assistant, everything you’ve got? Are you giving them as much as you can for what you’re earning or are you doing as little as possible?

We all have days where we’re kicking back doing as little as possible, but on a day-to-day basis when you’re in business.  Remember you have a choice every day, you’re either self-employed or self-unemployed in this business. On the days that you’re actually at work are you at work? Are you giving it everything you’ve got in every aspect of what you do?

I want you to keep this thought moving forward not just today, but for the rest of this week, the rest of this year as well as the rest of your career, give it all you’ve got. These are things that you’re going to see long-term results for. This is when clients call us and say you’re not going to believe this.  This past client of mine just referred me a couple of deals, I can’t believe it.  Believe it, that only happens to people who give it all they’ve got.