From MMG Weekly
Last Week in Review
"The fact that an opinion has been widely held doesn't mean that it's not utterly absurd." Bertrand Russell True words - and last week was one that was full of opinions that moved the financial markets - here are some highlights.
The week began with bank analyst Mike Mayo spewing out a negative forecast, which included his thoughts that loan losses by financial institutions would ultimately exceed levels from the Great Depression. This was followed by word from hedge fund giant George Soros that the US banking system is insolvent and that the economy won't recover in 2009.
However, as mentioned in many previous newsletters, the recent changes to mark-to-market should prove to have a positive impact on the economics and overall operations of financial institutions. Why? Because the recent ruling to look at mark-to-market accounting in a more relaxed light will free up the banks' capital ratios and allow them to do more lending, which will help their profitability, as well as ultimately help the economy unlock as businesses and consumers are once again able to borrow and use credit in a more normal fashion.
Lo and behold...as earnings season began last week, there was already evidence of this playing out as true, when Wells Fargo said Thursday that it expects record 1st quarter earnings and that their Wachovia acquisition was exceeding their expectations. In addition, the New York Times said Thursday that the US banking system overall may be in better shape than most people think.
As you can see in the chart below, Stocks hit an all time high in October 2007...until mark-to-market accounting practices were instituted. And notice also that Stocks reversed course, and have been on a strong rise since early March of this year, buoyed simply by the speculation that there would be a change in mark-to-market, which was finally announced on April 2nd by the Financial Accounting Standards Board.
Chart: Dow Jones

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. And this is exactly what happened in the early part of the week when Stocks were plagued by the negative opinions mentioned above. However, Stocks rallied on the good news that ended the week, causing Bonds and home loan rates to give back some of the gains they had made, ending the week unchanged to slightly worse from where they began. The Bond market closed early Thursday and both the Stock and Bond markets were closed Friday in observance of the holiday weekend.

Bills.com’s top eight tax topics that filers should know

1. Maximize deductions: Consult with a tax advisor to receive all qualified tax deductions. Remember that donations to nonprofit organizations of money, vehicles, clothing and household items, or stocks or other investments should be included as well as contributions to retirement accounts, medical savings accounts, health savings accounts and 529 college savings plans.
In addition, medical and dental expenses that exceed 7.5% of adjusted gross income as well as flexible spending account contributions for expenses such as child care and medical care should not be overlooked. Some health insurance premiums, such as those for self-employed individuals or people who cannot choose to purchase health insurance at work are also included, as well as student loan interest and some education expenses.

2. Take credit for economic impacts: Ask a tax advisor how you are affected by any losses in investments, or how a job loss affects current or future tax.

3. Deduct an investment in America: Taxpayers who bought a first home in 2008 can claim a maximum $7,500 income tax credit on their 2008 tax return. That credit must be repaid in $500 increments on future annual tax returns. Americans who purchase a first home between Jan. 1, 2009, and Dec. 1, 2009, may be eligible for a tax credit of up to $8,000, which does not need to be repaid. Home buyers can claim this credit on their 2008 tax return (either filed on time or with a six-month extension) or on the 2009 tax return.

4. Get paid back for green improvements: 2008 investments in home energy efficiency - such as solar systems, geothermal heat pumps or small home wind turbines - qualify for a credit for 30% of the equipment cost, up to $2,000. (That limit no longer applies in 2009). Energy-saving home improvements, such as windows, exterior doors and high-efficiency heating or air conditioning equipment, bring a 10% credit for 2008, with a maximum credit of $200 per category. In 2009 and 2010, the credit will be 30%, up to a maximum $1,500 total, with no category cap.

5. When a refund is not great: Some people are disappointed if they do not get a refund. But a refund means the taxpayer gave the IRS an interest-free loan. For most people, that cash would serve them better in their wallets every week. Those who have a sizable refund coming should talk with a tax advisor about completing a new W-4 with their employer and choosing a number of exemptions that will provide for the most appropriate withholding of taxes.

6. File on time: Filing late incurs penalties and interest for those who owe money to the IRS. If a return is filed more than three years late, the filer forfeits any refund on that return. The penalties for not paying tax owed with a filed return are much less than the penalties for not filing a return with an unpaid balance. Filers who are considering not filing a return because they cannot pay the bill are probably better off filing and avoiding the substantial late-filing penalties. When individuals or couples cannot pay because of a death in the family, serious illness, financial records lost in a natural disaster, or a reason the IRS deems “reasonable cause,” the IRS might waive penalties for those who contact the agency to negotiate solutions.

7. Get an extension: If for some reason a taxpayer cannot complete his or her return, he or she can file for an extension (IRS Form 4868). Keep in mind that this is an extension to file, not an extension to pay taxes owed. Penalties might still apply, but they will be less than if the person simply does not file.

8. Get help: Specialists, often found at or through reputable debt settlement firms, can negotiate directly with the IRS on behalf of consumers who owe $10,000 or more. Tax relief specialists usually are attorneys, enrolled agents or certified public accountants with special training and experience. They can navigate the intricacies of IRS forms and calculations, help consumers understand the criteria the IRS imposes, and then help them get back into good standing with the IRS.

“Tax filing season is a necessary evil,” Ewing said. “With appropriate preparation, you can make sure you are paying only what you owe and no more.”

For more information, visit www.bills.com.

It has been 5 days since my last post

When I began this blog 6 weeks ago I set up a reminder for myself to post every 3 days. Until this week I've been able to keep up with that commitment. Yesterday I spent an hour or so reading various news pieces relative to mortgage and real estate in an effort to come up with a topic of my own. Now here it is Saturday morning and 5 days since my last post and 5 days before the deadline for filing 2008 income taxes. In between all of this I've got an increasing number of really terrific customers and I am so grateful and having so much fun helping them navigate the market and make sense of the opportunities this market presents.

Thinking about all of this a children's nursery rhyme song keeps running around my brain
'I like my job, I like it fine. Nobody has a better job than mine.'
and I'm smiling because it's so simple yet so true for me.

Also, twitter message to my phone this morning prompted me upon a quote by American Physicist, Richard Feynman
'If you have any talent, or any occupation that delights you, do it and do it to the hilt. Don't ask why, or what difficulties you may get into.'

I realized, rather than struggling with 'blogger's block' I'd just sort of do a quick brain dump. Most people respond well to this. Others become suspicious of what my motives might be or percieve it as a lack of experience. But it's okay. I'm not the type of person that will nod in agreement as someone slops up or sells garbage believing or acting like it's vanilla ice cream. Nor am I intimidated by rank. In people and in practice, I respect authenticity most. Status quos are not reality. I don't think being popular for being unpopular is necessarily a bad thing.

I'm doing this to the hilt!

A while back I had a need and then along came a solution, something new that I 'could really use' , I bought it, employed it and as I'd anticipated, life's load was a little lighter because of this "thing".
1am; 26 days later, plastered over front pages and news wires around the globe: It's that same "thing" but now it's new and improved, it's ULTRA-thing. That lighter load suddenly is a real drag.
Introducing loan modifications without all that messy payment default stuff.
Housing Affordablity Plan Fact Sheet From the Treasury Dept. Mar 4, 2009

Cramdown

Jill Korenaga

Housing Shortage?

Jill Korenaga

MortgageAngel Blog Project

MortgageAngel Blog
day of creation: Saturday February 28, 2009 1:51:09 PM
Prepare me to appropriately provide content that is necessary for today's real estate and mortgage market. Guide and inspire me to deliver information in a meaningful way. ~Laus Deo~