Satori Alliance | Financial Counseling | Real Estate Investment Products | Financial Guidance Seminars

Satori Alliance is a Silicon Valley coaching and training enterprise that teaches wealth building strategies, financial mastery, and balanced living.

Vision

To be a leader in teaching our clients to create and manage sufficient wealth to fulfill their dreams, support their families and communities, then give back by teaching others to do the same.

Our mission is to to shift peoples’ experience of money and finances from scarcity and struggle to abundance and even joy.  With confidence and actionable knowledge clients learn from the experts to “Build A Life They Love then live it without compromise”.

We stand for a future in which everyone achieves financial freedom and independence, healthy and happy families, and vibrant alive relationships; in short, a lifetime experience of being fulfilled.

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 I answered the phone and after greetings, Jenny said, I saw your retirement planner and have some questions.  Continue I said.  Well, what you’re doing sounds wonderful and I wish it were for us, but I don’t see it’s relevance.  I asked her to explain with that trite old phrase - A penny for your thoughts:

Well my husband’s hours were cut by 25% and for 14 months, we’ve glared at our life savings being reduced by 39%.  I know that’s exact because we watch it closely.  Years ago we took a seminar that taught us how to budget and plan.  For years now, every quarter we take a weekend away from the kids and our usual life to update our dreams and goals.  We then discuss how we’re going to make them happen.

Six months ago we chose to stop our get-away-weekends, to cut expenses.  Since then planning has stopped.  Why I questioned?  It’s just too depressing getting worse everywhere.  We feel like we’ll be better off if we just don’t look for 2 or 3 quarters.  We’re hoping it will be better by then.

Fear of finances dominates the general public or “The Masses” so intensely that people struggle to avoid it.  The consequence, they continue loosing more and more wealth, without conversations that inspire them to think outside the box.  Perhaps they could change their situation entirely, thereby controlling the very situation that has been controlling them.

We talked, Jenny got re-acquainted with their dreams about a vacation in the summer, the winter, new cars and a new timeshare they planned to buy.  Looking closer at the real numbers and discussing their meaning, they could see they were on track for their dreams and future they wanted, although it now required extending their retirement plans 6 years out.

Over the next two weeks, I noticed in our coaching sessions a sense of hope and inspiration re-appeared, a genuine excitement about being able to live the life they love.  They did it by buying a resale timeshare at fire sale prices and getting a different car.  Also booking 3 vacations instead of two far in advance with two other couples, which reduced the cost and only required a deposit.

The time value of money compounded over 19 years, in their case, made a big difference in their planning for the future.  The lessons here: Manage your fear & look ahead, take decisive action toward your goals, and always be willing to pay a penny for a thought that just might give you your world!

A common thread in todays’ world is how busy we all seem to be.  As you grind your teeth, sweat that next deadline and do your best to get through email and return calls, do you wonder if it’s possible to think about abundance and joy, let alone have that experience?

Occasionally you meet one of those rare people who appears to have life figured out AND is enjoying it - Amazing!  How do they do that having some of the same stuff to deal with that you do?

Just for a moment, with nothing else to pay attention to, see if you can imagine the experience of having these 7 habits fully developed in your life:

1. Build every day with the raw materials of your values and the vision of the future you want to live.  For this habit to be developed, DISCIPLINE is the practice.
2. Live life moment by moment.  PLANNING is a habit to master since the next moment is upon us.  Choose how to use it, or let it pass and deal with the next… oops, that one just went by.
3. A part of abundance is wealth.  What you have and need to live now, and what you will need in order to accomplish what you are going for.  The skill for this is FINANCIAL GOALS, a practice that will get you to and through your retirement years.
4. Sweep away tired uninspiring goals and replace them with an inspiring life purpose, from which an endless supply of relevant goals will emerge.  The practice to develop here is REGULAR REVIEWS.
5. Fight fear with action and get yourself an accountability partner who will hold you to account to accomplish your desires.  INTEGRITY is the practice of saying what you will do, by when, then doing just that.
6. Nourish yourself and others in small ways every day with simple things; like cleaning up your vocabulary and never complaining to anyone who cannot make a positive impact on the object of your complaint.  How many of us “Tell The Truth” in a negative way about our financial situation?  This is complaining and only ensures that things stay as they are, or get worse.  ANTICIPATION or POSITIVE EXPECTATION are skills well worth the time and practice to develop.
7. Finally, CELEBRATE everything you can.  There is much to celebrate if you look for it.  If you have trouble with this one, start an appreciation journal and commit yourself to write in it daily.

Live life by design, think about your credit, your budget, the impact of financing, saving, and investments on your long term planning.  Biggest of all, is your plan abundant enough to live a joyous life?

Try this     (click to follow) new tool to build a great plan in a short session.

Would you like advance warning about where to put your money?

Today we got a read on one of the direct consumer indicators in the economy, the consumer price index (CPI).  From our friends at Mortgage Market Guide, this from their glossary:

“The Consumer Price Index (CPI) is a measure of the average price level paid by urban consumers (80% of population) for a fixed basket of goods and services. It reports price changes in over 200 categories. The CPI also includes various user fees and taxes directly associated with the prices of specific goods and services.”

I mention this because this “basket of goods and services” is now costing you less.  In fact costs to the consumer have not dropped this much since 1950.  This is a reflection of how much consumers are NOT buying and how much providers are reducing prices to get us to buy.  Should we count our blessings?  Is this Nirvana?

It is for the moment because the impact this low inflation reading has on interest rates is high, meaning that the pressure to increase interest rates we’ve seen in recent weeks is subsiding.  For those of you in mortgage financing transactions, this gives you just a little tiny bit of additional time to close your deals at the low rates you wanted before the HAMMER drops!

The hammer you ask?  Well the current fiscal stimulus program has doubled our national debt for the sake of economic stimulation and growth which will occur in the next few quarters.  However, not without its own cost, the hammer - INFLATION!

In times of high inflation hard assets (gold and real estate for example) increase in value and securities (stock market and the dollar) or soft assets decline.

Words for the wise. . .

“3 Insider secrets to help you predict where interest rates will be headed”

While this seems like a promising headline, for the last few weeks the mortgage backed securities market and the stock market have resumed their previous predictable pattern of behavior which is good news, or is it?

For years those in the mortgage lending industry were able to with relative confidence learn to predict where interest rates were headed by what was happening, in general, in the stock market and the bond or treasury market.  I don’t at all mean to suggest that anyone could accurately determine what rates would be but those with experience would “study the tea leaves” and make a relatively good prediction and hit it more times than not.

1 - When bond yields are up mortgage interest rates will move down.  Even though these two are not related but are distant cousins, it was a pretty reliable assumption.

2 - If the stock market is doing well the bond market tends to react in the opposite direction.  This used to be reliable because if investors liked putting their money in equities (stock) they would usually take it out of securities (bonds) to do that.

3 - Talk about the threat of inflation and the bond market would sell off and rates would rise within a few days and stay up in a protective mode until the conversation changed or inflationary fears subsided.

For the past year or so, these have not been dependable measures to predict where interest rates are headed due to the overall lack of enthusiasm and trepidation about the financial markets.  Interest rate behavior was pressured down, they stayed there & nothing negative about the market would have much of an effect on rates.  It has been a hay-day of low, good rates so to speak. . .

My friend Ray Avanzino presents a very straight up picture of current market conditions, check out his work.  Bottom line, the fear of inflation surrounding the increase in federal debt is increasing and therefore the bond market has sold off more dramatically than ever in the past.  This usually means higher rates and indeed they have gone up quite a bit in the last 2 weeks.  However, higher rates threaten our fragile recovery so now the pendulum is poised to swing the other direction so as not to slow down or stall what little recovery we might have going.

The lending industry is doing all it can to get clients locked and closed before major increases threaten already weak business.  So if you are in line, hopefully you have a skilled agent who can see these trends developing and will tell you when to achieve your home run for this cycle.

As usual, please comment, don’t be afraid, you’ve got a couple of minutes, just do it!

Howard Steele is a mortgage consultant with Plaza Loans

In Campbell California.  Howard has the unique perspective of having sold real estate as a Realtor as well as arranging financing for his clients.  In these conversation with Silicon Valley Realtors I have relationships with, I encourage their opinion on market conditions for the benefit of the reader.  So here is how Howard see’s it:

As a mortgage consultant the questions that I am often asked is “how are you doing in the real estate and mortgage market?”

Actually there are a surprisingly strong number of qualified buyers who are actively searching for that perfect first or second home.  Yet, since the majority of the homes for sale are either “short sales” or bank owned properties known as REO’s (Real Estate Owned) there are some large obstacles in the path to home ownership.

To buy a home as a short sales one is enrolled in a long process of waiting for a bank to agree to take less money than what is owned on the first loan or even worse, the second currently on that property.  Since banks work at their own pace and their loss mitigation departments are definitely overworked, timing translates into 3 to 6 months of hoping that this bank will agree to the sale and allow the buyer through.  Most buyers and agents do not have patience for this.

Bank owned properties are no easier since banks know that if they market the house for considerably less than actual value they can create a bidding war.  Any family making an offer on those homes needs to be prepared to make an offer substantially over the list price just as they did in the heyday of real estate several years ago, just to have a chance to buy the home.

Transaction are taking longer, the buyers are more frustrated and more research and negotiations are required to assemble successful transactions.

Thanks Howard for your insights and I guess if we are to draw conclusions from Howard’s subtle coaching it would be, build a relationship with a qualified and aware professional you trust then be patient!

  If you are a gambler, today’s increase in 10 year treasury yields and the subsequent predictable increased interest rates may be just what the doctor ordered.  Because today’s increase is now the steepest ever since the last record set on August 13, 2003, gamblers are “in the zone” with heavy speculation about whether future interest rates will come back to their low levels we’ve enjoyed since December 10, 2008, or continue to rise.

If you are not a gambler and one of the many currently in or considering getting in a mortgage lending transaction, this is one of those times where market activity may change your plans.

In An Unfair Advantage I discuss several ways that mortgage lenders lock interest rates.  Discussing this today is a bit like closing the barn door after the horses have gotten out but never-the-less an effective conversation.  My strong recommendation is read this and call your lender to have them tell you if you are locked or not and if you are, do they have enough control to close your loan before your “better than market rate” will expire:

Locking in the rate

Not an exact science, there are a lot of ways you could lock in your loan interest rate.  Here are some useful guidelines:

Rates are locked for different periods of time.  The specific period of time has mostly to do with the time required to close the transaction - they could be 15, 30, 45, 60, 120 days or more.  Each of these periods carry additional costs as they increase.  When locked, over 90% of lenders will not allow any changes to the locked rates up or down, within the lock period.  If a transaction extends beyond the lock period, the borrower will likely be charged to extend the rate, 1 week at a time, regardless of who caused the delay.  Here is a list of some common practices among lenders for locking the rate:

• Upon loan application when the loan comes in to the lender
• At the request of the borrower any time during the process
• The lender or borrower may want to time the locking of their interest rate with market performance. While not advised, this is a practice that should be left to highly experienced professionals who even then will be correct 75% of the time instead of 50/50 like everyone else.
• At final loan approval since the closing at this point is guaranteed and the cost to lock is the lowest.

If you have not locked your rate at this point or you are preparing to enter a transaction, discuss the impact of today’s market activity on your file with your lender and if it changes your qualifications.  Even though this may not be an issue for you since rates will not likely rise more than .25 - .375%, it is still a good conversation to have for you and your lender.

  As a real estate investor you are different than the previous version recently retired with these improvements:

1. You have money
2. You are a keen observer of value, growth, and cash flow

For those of you looking for the ultimate value, it is not foreign to you to do what the herd is not yet doing because when they are, it’s too late.  John Bell, an entrepreneur from New Jersey, in his commitment to help reduce debt for his clients, has researched the West Florida area and gives us some compelling results.  Since there has been little in the news, good or bad, about Florida, this is worth your attention.  Thanks John!

Florida’s West Coast Looking better!
Last year the Cape Coral area of Florida had the highest foreclosure rate in the country but now Real Estate climate in the Cape Coral, Florida area and on the Gulf Coast of Florida are showing signs of improvement: First-time home-owners are suddenly entering bidding wars with real estate speculators from as far away as Spain and Germany. Sales in February outpaced those at the peak of the boom, with some houses getting more than 50 offers and selling above their asking price

Banks in these markets are dumping foreclosed properties, attracting cash-rich speculators who are looking for cut-rate bargains and first-time buyers are finally rushing in, lured not only by plunging prices but also government incentives like ultra low interest rates and hefty $8,000 tax credits.   

This doesn’t mean the national bust is over -  but prices have fallen so much in some areas that shoppers are getting interested again, improving the balance between buyers and sellers. It also does not mean prices will surge all too quickly but heavy buying should at least begin to put a floor under prices. “Are we at the bottom?” asks Christopher Thornberg, an economist with Beacon Economics. “We are getting close and just as Florida, and Las Vegas led the nation into the housing bust, those areas could provide the template for a national recovery. . .

Local Resources:
Sunbelt Realty, property listings: http://www.larryguinnc21.com/      
Cape Coral Florida’s Real Estate Guide: http://www.bestcapecoralrealty.com/
Cape Coral Chamber of Commerce: http://www.capecoralchamber.com/

To contact John Bell directly send email to jdbell@optonline.net for a dose of personalized care and concern.

I heard it said at a sales meeting last night that people are downsizing in a way that takes them “Back to their roots” of family, close social gatherings, & needs type purchases instead of wants.  Further, that this is becoming a trend and a new way of life.

On the NBC Today Show a couple of days ago, there was a piece on the values of real estate.  One of the claims was that according to NAR (National Association of Realtors) the average home size desired now has dropped to a taste over 2,000 square feet, several hundred square fees less than just 1.5 years ago.

As I look around, I certainly do see examples of all this but how wide spread is it?  I am now working to build a larger consensus.

I’m working with an Intern who’s major is finance at a local university who put a 6 questions survey together to help answer the questions above in more detail.

Please take 5 minutes and answer these few questions; you may even win a prize for doing it.  Then after you do it, have others take it, he thinks we can get 1,000 responses in a very short while.  Right on Daniel!

The Financial Preferences Survey =  Click Here

Lets discuss your views too

Cheers. . .Danno

I am noticing an increased amount of stress and hassle around the mortgage financing process, and it’s not all about the still present overwhelming volume of business the industry is trying to absorb.

Let’s look as some trends and then with your indulgence, I’ll make a radical conclusion about the direction the industry is headed:

• We have more sophisticated Underwriting engines that automate the process of approving or declining applications for financing.  The decisions themselves are no less complex, in fact may even be more so due to the increasing amount of regulations, guidelines to manage, and government intervention and now even government ownership to protect us from ourselves.
• Advanced 800 answering services that feature voicemail jail in ever more sophisticated technology like voice commands, intensely personal data entry requests, and long waits that need I say can end up in a scripted call with someone in another country.
• Keeping up with longer transactions and less clients that qualify is taking its toll on the mortgage professional, taking a lot more energy at 1/2 their previous income.
• Emerging government intervention and control of FNMA (Fannie Mae), FHLMC (Freddie Mac), and now even partial ownership of the banking system.
• Understanding how to navigate this landscape is a skill that only experienced professionals have and even they have little or no time to invest guiding their clients the way they used to.  In part, we can look to the volume of lending, but another perspective is their declining compensations.
• Power in transactions is shifting.  The most dramatic of these shifts is the new practice of randomly assigning appraisers to a transaction through a handful of national companies not connected to any lender, but whose process guarantees no appraiser will have a close working relationship with any lender.

This is the erosion of the most basic need of the consumer in a complex transaction and the desire of every professional, SERVICE!  While currently not pleasant, we are moving toward an automated system of obtaining financing in the future.  In fact the day is coming where you will likely carry a data card similar in size to a credit card in your purse or wallet that contains all information necessary to be qualified for and obtain a mortgage loan.  This will work for roughly 30% of the population who are the best qualified, who easily meet the criteria, and who don’t mind trading speed and convenience for cost.

However, for the rest of us, like trying to deal with credit bureaus; we will never completely understand how to navigate the criteria and guidelines that will control our ability to get mortgage financing.

We could turn to a loan representative in one of our favorite lending firms whose job it is to deal with all those who do not fit the automated standards.  Doing this, we would need to overlook the inherent conflict of interest working with someone who will be compensated for selling that company’s products.  Ask yourself, would they have your interest, or selling a loan first, on their list of objectives?

The independent mortgage consultant is emerging as a more practical, valuable, and viable solution to this increasing dilemna.  A consultant is compensated for working specifically for you and paid by you for what you want to accomplish.  This can be the most balanced relationship in business.

In part 1 John & Georgia were frantically sampling today’s mortgage landscape for one of those 30 year loans we all hear about that are now in the high 4’s & low 5% range.  As you remember, thay have a hybrid fixed to ARM loan that is about to convert to an adjustable and felt the only move that made sense was to get a new fixed rate.  See Do You Really Need to Refinance - part 1.

What was your conclusion?  Or better said what would have been the right thing for you to do if you had to choose? 

John & Georgia did not fully understand their current loan.  They mistakenly concluded that once the loan was an adjustable, their rate and payments would skyrocket, they would not be able to afford the new payments, loose control, and have to deal with yet higher future payments. 

We examined a 3 year chart of this index to see the unusually low and attractive rates this index is serving up.  They could see the most severe changes occurred from August of 07 through January of 09, and surmised that degree of activity is not likely to repeat itself as the economy recovers very slowly and index values rise.  This index being a 12 month running average, this could take some time.

So here are the facts they used to choose:

• New interest rate in August (index + margin) will be close to 3.25%
• New monthly payment for 1 year will be $1,018 per month saving them $744.67 each month for that year.
• Their current loan balance stays the same, a savings of $3,900 over refinancing
• The additional monthly cash savings could be saved to be applied to principal later if they need to or used for any other purpose like payment relief in case John does loose his job.

Taking the conservative approach, John and Georgia now look several years out to make some assessments about what might happen and the impact of that.  Below is a chart representing their calculations based on these assumptions:

• Their interest rate increases 1.25% each year
• They continue making interest only loan payments until the option discontinues
• They save the difference each month in and account that has a 3.25% rate of return
• If property value increases in 3-5 years they will sell and move to a larger home.

John & Georgia chose to stick with this index, the adjustable portion of the loan and direct what they save to either additional down payment in the future when they purchase again or, if they are fortunate with their finances and employment, to begin college savings accounts for their two children.