“The American people will never again be asked to foot the bill for Wall Street’s mistakes,” Obama said yesterday. This bill is in response to the 2008 financial crisis. The so-called “FinReg” measure will establish an oversight council to monitor risk, set up liquidation powers for large firms and restrict leverage and proprietary trading. It is easily the strictest regulation of the financial sector since the 1930’s.*

To read many, many opinions and digest different perspectives, simply Google, “Financial Regulation Bill”.

May I offer my thoughts about the general direction of the government oversight as a small, independent mortgage broker? Capitol Hill seems to want to help the American people. I applaud that. However, I’m not so sure our politicians understand what’s really happening in our financial institutions. I will say that as a Broker, my industry has self-corrected, and I’m very proud to be a part of that change. We now have to be nationally licensed, and provide full disclosure with our fees. For example, if I disclose to a client that I could make up to 2.5% on a loan, I disclose the maximum amount of my earnings. Say your loan amount is $250,000. I could potentially make a total of $6,250.00. Once a loan is locked, it is then that my compensation is set. If my compensation rate increases by .125% or $312.50, I have to re-disclose to my client. Not to mention, once a settlement statement (HUD) is prepared, my initial estimate to my client is compared to the actual numbers on the HUD. If my estimate is off by more than 10%, I am responsible for those overages. The consumer is finally protected in the broker community!

I’m excited to be a part of this movement to increase awareness to my clients, and wish more than anything, I could do a loan for Barney Frank and Christopher Dodd. I also wish all mortgage originators/loan officers/planners would go to a flat fee system, like Realtors (typically Realtors receive 2.8% in Colorado for residential transactions) – wouldn’t that be simpler?

I would love to hear what you think about this new bill and any other thoughts you have about what our country has and is experiencing regarding our economy.

*Sourced USA Today, Reuters, NY Times

Megan McDonald, Licensed Mortgage Planner
Excel Home Lending, Manager
383 Inverness Parkway, Suite 130
Englewood, CO  80112
Cell: 303-717-9995
Off: 303-790-2022
Fax: 303-468-6133


(My guest blogger for this issue is Judy Larkins, Executive Director for Colorado Mediators & Arbitrators LLC)

Divorce is costly, both emotionally and financially.  Dividing joint obligations and marital assets, calculating child support, maintenance payments when warranted, his-and-her matching attorney fees…  If you are anticipating an empty pocketbook after the divorce is finalized, take heart! 

A financially savvy mediator may be tremendously helpful in providing sound guidance through an otherwise confusing process.   Mediation of all divorce agreements generally costs one to two thousand dollars, as opposed to each spouse hiring attorneys with initial retainers of five to ten thousand dollars each.

Mediation is a creative process that, when successful, culminates in workable agreements for a particular family’s situation, as opposed to what the letter of the law may dictate via a court order if the couple cannot agree.   

The mediation process may assist couples in identifying individual financial priorities: 

  • real estate (primary residence, second homes, and rental investments)
  • retirement funds
  • stock options
  • cars and recreational vehicles
  • collections, antiques, artwork, etc.

One spouse may value real estate ownership while the other spouse places greater significance on retirement funds.  A financially savvy mediator will assist the couple to evenly divide assets taking all factors into consideration.  This can be more involved than it appears on its face.  One common mistake is overlooking the tax ramifications in dividing assets by making dollar-for-dollar offsets rather than addressing the pre-tax versus non-taxable assets (retirement funds are usually pre-tax; equity gains for a primary residence are tax exempt up to $250,000 / $500,000 for certain joint returns) .*  For example, paying a marital settlement from a 401k withdrawal could cost a 10% penalty, tax on the withdrawal, and put the taxpayer in a higher taxable bracket for all income in the year that the withdrawal is made.  It may be more beneficial to use a Qualified Domestic Relations Order, or QDRO, where the assets are transferred “in kind” – from a pre-tax retirement account into the spouse’s own pre-tax retirement account.

Another decision-making challenge may be the family home; the housing market currently favors buyers.  The marital home is one of the largest investments a couple makes during a marriage.  Evaluating whether to keep the house until the market rebounds is an important consideration.   If it makes sense to keep the home, a financially savvy mediator will assist the couple in negotiating written agreements that address who will live in the home (a renter or one of the spouses), who gets the mortgage interest tax deduction, when a spouse has the right to demand the house be refinanced or placed on the market for sale, who will pay for the repairs along the way, how the equity will be divided when the house is eventually sold or refinanced, and other necessary agreements. 

When interviewing a mediator to assist in your divorce or post-divorce issues, ask questions to determine whether the mediator has expertise in the areas that are important to you.  An incomplete or bad agreement can be costly, and like all professions, there is a wide variance of financial and business experience between mediators.


Judy Larkins
Denver Divorce Services
4600 S Syracuse St. Suite 900
Denver CO 80237
Phone 303-864-9675
Email Hope@DenverDivorce.org

Judy Larkins has been in full-time practice since 2003.  A large part of her personal caseload has focused on divorce and family matters.  Judy specializes in high conflict cases and is very successful in bringing contentious matters to satisfactory conclusion.  She is a preferred provider for the  CLC Employee Assistance Program for domestic matters, and a panel arbitrator for FINRA (Financial Industry Regulatory Agency).  Judy is the Executive Director for Colorado Mediators & Arbitrators LLC dba CoMA.

(My guest blogger for this issue is Chad Rogers, of CMR Consulting.)

Anyone faced with the threat of foreclosure may decide to look into a short sale as an alternative. As a credit coach I am often asked “How does this affect my credit?” and the answer is, it will hurt either way. Chances are that someone that who is facing the threat of foreclosure has already started damaging their credit score by being in default, that is, behind on their payments. People have reported FICO score drops from 50 – 130 points from a short sale and 200 – 400 points after a foreclosure, but rarely, if ever, are there isolated changes in a credit report that make any point difference traceable. Others have reported no significant difference in credit score drops between the two. Either way, both are unhealthy behaviors for a credit score, no matter how you look at it.

Credit score aside, a short sale should be looked into for other reasons. The primary reason a short sale is better than a foreclosure is the waiting period before you will qualify for another home loan. You should always check with a reputable mortgage professional for their unique lender programs, but typically, you can get another FHA home loan in three years. If you are in arrears and a short sale is still granted by your lender, you may qualify to buy another home with a Fannie Mae backed mortgage within two years, regardless of whether the home is your primary residence. With a foreclosure, you may be eligible to buy another home in five years if the home was your primary residence, but the wait time can be as much as seven years. An investor typically must wait the full seven years with a Fannie Mae insured loan.

A loan application does not ask if you have had a short sale, but you are required to answer the question of whether you have ever had a property foreclosed upon in the last seven years. Even if you are fortunate enough to get it removed from your credit report, you still must disclose this information or you risk committing mortgage fraud, which is subject to investigation by the FBI.

Be aware that the homeowner may still owe the difference between the mortgage balance and what the discounted sale price was, resulting in a “deficiency judgment.” If granted, this judgment will affect a credit report as much as any other judgment. To avoid this, in negotiations, the bank needs to accept the payment in full without pursuit of any deficiency judgments. However, the homeowner would then need to declare that difference between the balance owed and the short sale by means of a 1099 tax form. A lender cannot do both! Another negotiating point can be how the bank will report the short sale to the credit bureaus, so use that to your advantage if possible.

To summarize, both short sales and foreclosures are harmful to your credit. However, with time (generally less time with a short sale), honest reporting, and informed negotiations with the bank handling the sale, the average person will be able to move on to a brighter future after the experience.

*Always obtain legal and tax advice before making a decision between a short sale or foreclosure.

Chad Rogers, CMR ConsultingChad M. Rogers
Credit Coach & Professional Networker
CMR Consulting
Phone: 303-725-7385
FAX: 1-888-422-1804

Chad M. Rogers, a loving husband, father, and real estate professional for over 8 years, decided to pursue a career path in credit coaching because he genuinely loves helping people obtain the goal of home ownership. He is passionate about helping along the success of others, hence his favorite quote by Alexandre Dumas – “Nothing Succeeds Like Success.” After years of success as a top-performing title representative, Chad opened CMR Consulting, which focused on bringing products and services to the real estate community. He soon recognized the need for a trustworthy credit coaching partner and therefore expanded CMR Consulting to include these much needed credit coaching services. CMR Consulting is now the premier coaching company dedicated to educating consumers on credit and debt resolution. The goal is to only work with the very best real estate professionals helping fill the void in service to the public. CMR Consulting continues to help companies, families, and individuals improve their bottom line and services.

With so many out of work or struggling to make ends meet in their current positions, more and more people are turning to vocational schooling as a way to transition into a new field and pad the all-important, but often lacking, Education section of their resumes. Many of these industry-specific programs offer accelerated, highly technical programs promising students the keys to a bigger paycheck and a better life. When considering these options, however, it is important to weigh the pros and cons.

On the bright side, vocational training typically takes less time than traditional college and graduates come out knowing exactly what job they now qualify for; but that kind of intense, focused curriculum generally comes at a price. Although there are moderately-priced trade schools out there, many vocational institutions match, and often exceed, the tuition of major universities. Student aid is available, in many of the same forms as conventional colleges – federal student loans, Pell Grants, bank loans, and scholarships, including many industry-specific offerings.

However, it is vitally important for prospective students to consider that the jobs they will most likely get upon graduation will be entry-level as they transition into their new field and gain real-world experience. As such, they need to evaluate whether the initial incremental increase in pay will enable them to deal with their new financial burden of student loan debt. Sadly, many vocational schools overpromise prospective recruits, quoting salaries and positions more appropriate to mid-career, or even management-level jobs. Students are often also talked into taking on loans far beyond their ability to repay.

With that understanding, however, a wise student, dedicated to their new field can find success and fulfillment. Education is certainly an important first step towards that “bigger paycheck and better life,” but the cost should not be such that any benefit (financial or emotional) is swallowed up by overwhelming debt repayment. According to the New York Times, The current administration is toughening rules which curb for-profit schools, which receive the bulk of their revenue from federal loans and grants, “from paying their admissions recruiters on the basis of enrollment numbers.” The Department of Education is working to bar programs “from loading students with more debt than justified by the likely salaries of the jobs they would pursue.”

Holiday Credit Card Tips

November 6, 2009

The jury is out on whether credit cards are good or evil. Some people are choosing to cut up their cards and use cash. I think in some cases and for some people, this is a great choice. For most, the reality is that the USA functions on credit, and you have to have good credit if you want to buy a house, a car, and often to get a job. If you know a bit more about credit cards, you can get ahead and stay in a powerful consumer position – educated and informed. Here are some things to be aware of when considering opening or using a credit card:
1) Department store credit cards don’t offer real savings.

1) Department store credit cards don’t offer real savings.

It’s always tempting to save 10-15% on a purchase at a store like Kohl’s, Target, Home Depot, etc. In some cases, it could be a great idea. Here’s when it’s not: carrying a balance on this type of card will quickly reverse the savings at the cash register and you could end up paying double or triple the original price.

Tip: Unless you’re going to pay the balance in full on your original purchase, and on future purchases (remember – it’s always good to use a credit card once every 6 months), then pass on opening your card.

2) Rewards programs can often cost more than buying the product outright.

Knowing what you’re spending, and when you can pay off your spending, is critical to utilizing a rewards card. Don’t get sucked into rewards deals just because the picture looks pretty. You should not use your rewards card to incur debt that you cannot afford simply to get the miles, points, or cash back benefits. In most cases you could have saved the money for that purchase and paid less than the amount of money you have to charge in order to accumulate the necessary points or miles on your reward program. Again, if you are already using your card for purchases, it makes sense to get the rewards, however you should not use the card just for the rewards.

Tip: www.mint.com. This is budgeting software I utilize, which has helped me paint a picture and create a budget for spending. Rewards come if you are secure in knowing what your spending habits are and you can stick to them

3) Prepaid and secured credit cards can cost you money.

Most often used by people who have bad credit or no credit, credit cards that require a cash deposit for collateral often come with high fees. If you fail to properly research and understand the terms and conditions of these forms of credit you may find up to 50% of your deposit is consumed by various fees. To avoid this, look for cards with low interest rates and minimal fees.

Tip: Go to your bank first and establish a relationship with a banker. They can explain the fees on their credit cards and help you through how to best utilize the card so you’re helping yourself, not hurting yourself.

4) Some credit cards do not report to credit reporting agencies.

Whether you are trying to establish credit or maintain a good credit score, you need to have your credit card activity reported to all three credit bureaus. Without this information, all of your efforts to properly manage your credit card account are for naught. Granted, properly managing your account will keep your finances in good order, but without the activity being reported to the agencies, no one will be the wiser. You don’t want your hard work and responsible behavior to go unnoticed by future lenders.

Tip: Confirm the card you are applying for will report your credit activity.

Sourced from www.creditinfocenter.com

For more helpful tips on ways to help protect and improve your credit score, please visit my website: http://www.mcdonaldlendingservices.com/Credit_Tips.html ; and, as always, please contact me with any questions or comments you may have. 

Megan McDonald, Licensed Mortgage Planner
Excel Home Lending
383 Inverness Parkway, Suite 140
Englewood, CO 80112
Cell: 303-717-9995
Fax: 303-468-6133

(My guest blogger for this issue is Aaron Nieman, owner of Aaron R Nieman Insurance Agency.)

You may have heard how lenders are now requiring that borrowers on townhomes and condos carry an HO6 policy. This is what some people call a Contents Insurance policy. An important question to ask is why do you think this is happening?

Let’s use an example with another insurance coverage that most people have. Imagine getting into a car accident and showing up at the repair shop to find that the insurance company had your vehicle completely repaired, except for the interior. You look inside the car and find no seats, steering wheel, dashboard… etc. Now they need additional money from you to buy and install these items. What would you do?

This is the same situation that banks are in should something happen to the condo or townhome they own, as they are the owner until you pay them off. If there is a fire, flood, or any insurable event, most master policies for homeowner’s associations do not cover the interior. This means that the carpet, cabinets, drywall, fixtures, and doors, to name just a few items in that condo, are not getting repaired. So, banks are now requiring that you carry a policy to cover this important asset.

In my opinion, this is something that was long overdue. This has always been a gap in coverage that leads to a lot of problems. In most cases, an HO6 policy can be as inexpensive as $12 a month, depending on how much coverage you need. However, with most insurance companies, adding this coverage will qualify you for a home auto discount on your auto policy, which will lower your auto insurance payment, bringing your net cost down.

While this may give you a brief overview of this issue, there is more to consider when looking at an HO6 policy. Some more important things to ask yourself and the insurance professional that you work with are:

— What is the amount that my interior needs to covered at?
— How much would I need to replace all of belongings?
— How does the deductible I choose for this policy effect the rate?
— Will this policy cover injury on property due to negligence (i.e. liability coverage)?
— What amount of liability coverage is appropriate for me?

Feel free to contact me anytime should you have any questions. Don’t just get a policy, understand why need it and make sure the coverage is appropriate for your situation.



Aaron R Nieman
Aaron R Nieman Insurance Agency
9785 South Maroon Circle Suite 312
Englewood, CO 80112
Office   303-645-8036
Cell      720-422-8190
Fax      303-645-8039

[Aaron Nieman is the owner and operator of the multi-award-winning Aaron R. Nieman Agency of American Family Insurance. The agency has been around for more than five years. J.D. Power & Associates awarded Aaron with the prestigious Award of Excellence for being in the top 20% for agent customer service in the field of insurance. Additionally, the agency has won multiple company awards. Aaron and his agency’s promise to his clients is that you will not receive better service with the right amount of coverage for a lower amount of premium.]

Maybe I’m wrong about what people want and expect from one person serving another. I am on a mission to figure out a formula that works – I hope you’ll consider responding to this.


How do YOU define “Customer Service”? – I’ve GOTTA KNOW! Do you want to feel special, or “enhanced” by the experience, or is your experience simply a process that you go through that is expected?


I think it depends, doesn’t it? If you’re buying a house, or dining in a restaurant, you probably expect different things.


Let me narrow it down so we can discuss this. I’m a Mortgage Broker. I set myself apart from other brokers by a high level of intentional service. The question for me is, what one client expects or wants, is totally different from another. How can I please everyone? Yes, I know…I can’t please everyone, but I still want the formula.


According to Wikipedia, Customer Service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer’s expectation.


Will these meet your expectations, but better yet, make you want to use that person or experience that thing again:


  Dressing professionally

  Smiling a lot

  Being enthusiastic and fun

  Going the extra mile (what is that, by the way?)


OR these


  Listening to your customer’s wants and needs, and meeting them

  Following through with your word – and if you can’t, letting your client know why

  Fixing the problem

  Empowering your customers to make the best decision for them and their family

  If you don’t know the answer, saying so and then finding out

  Being proactive, open, and honest


Maybe going the extra mile, smiling a lot and dressing well is part of the formula, maybe they just come naturally if you truly are providing a service. Would you judge me if I fixed your problem in jeans? Really though, I don’t wear jeans while I’m working, I’m just throwing that out to find out what matters to you.


So, what’s your formula for customer service?

Megan McDonald, Licensed Mortgage Planner
Excel Home Lending
383 Inverness Parkway, Suite 140
Englewood, CO 80112
Cell: 303-717-9995
Fax: 303-468-6133