Satori Alliance

Satori Alliance is a personal and real estate finance consultancy and training enterprise.

Vision

To transform peoples’ experience of money and finances through a training enterprise that develops “A Life You Love”.  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 abundance and joy without compromise.

They really are and also notoriously inefficient.  Factor this into soaring energy costs, and you’ve got a good reason to transform a drafty fireplace into an efficient heating source.

What makes traditional fireplaces inefficient?  Hot air rises, thus much of the air heated by the fire escapes through the chimney.  When a fireplace isn’t in use, the draft pulls conditioned air from your home making your heating system work harder and energy bills rise.

How can you improve fireplace efficiency?  Take measures to reduce heat loss via the chimney and to direct more heat into your home.  Here are a few strategies:

Dampers:  Most fireplaces have a throat damper - an iron plate that controls airflow.  When the fireplace isn’t being used, keep the damper closed.  And consider replacing it with a top sealing damper which mounts at the top of the chimney and seals tightly to eliminate drafts.

Firebacks:  A cast iron or stainless steel fireback on the rear fireplace wall helps to radiate heat outward.  And firebacks usually feature decorative designs that can enhance your home decor.

Doors:  Tempered glass doors with adjustable air openings help maximize efficiency when your fireplace is in use.  When it’s not, close the fireplace doors to keep warm air in your home.

Grate Heaters:  These units are alternatives to conventional fireplace grates.  They pull in air, heat it, and blow the heated air into the room.  Some are even equipped with thermostats to automatically turn the fan on and off.

Inserts:  Gas or wood-burning inserts are insulated systems that burn more efficiently and create greater heat output.  Note: The EPA recommends that you have a certified technician install a wood-burning insert.  Also check emission requirements in your area and have your chimney inspected and cleaned before installation.

As always, I appreciate the opportunity to provide energy-saving tips.  This edition happens to arrive on a spare-the-air day so don’t experiment with burning today.  Boost the efficiency of your fireplace so that it generates increased warmth as well as holiday ambiance at a lower cost too.

Thank you to a long time colleague Steven Larson for the inspiration for this post

Thank you for reviewing this and for your comments.

I am a LinkedIn member, have nearly 1,300 front line connections and 11,000,000 total.  I’ve have had a 30+ year career instantly displaced by the recent down turn in the economy.  Fortunately I took action quickly and am now leveraging those years to help others who may be in financial difficulty in these times. 

In the months to come, employment or a job may not be sufficient to survive.

My questions is this:  I’ve started a continuity group supported by 14 Tele-course calls on personal finances from the basics of budgeting clear through effective retirement planning.  See my profile and this link - Don’t Let Your Finances Ruin Your Personal Life. 

I’ve noticed people will readily discuss their financial situation and most specifically how poor it is, how much they would like it to change but when offered the opportunity to make something happen to change it, nearly 95% of the population stop short, don’t engage, and continue their bad habits and to suffer nedlessly. 

What ideas do you have that would made a difference for yourself, something that would have you take action, learn even the basics of how to get exactly what you want from life, even in times like these?

Again, Thanks - Dan

Caught it! - Now What?

On this the first day after Barack Obama was voted our 44th president, the questions and assertions are flying.

All the way from speculation about massive deflation followed by epic inflation, to the black community’s shining enthusiasm, to the client who now believes he should sell his investment properties.

What will happen next and how will we know?

Do we tell our extravagant spendthrift children that the gravy train has left the station, not to return for year?  OR, is it time to sit in the recliner & discuss with the family how there will soon be health care for all?

Nobody can really say though everyone is sharing wildly today.

Personally I believe life will go on.  And without dramatic differences as many believe.  We will have all our usual breakdowns and concerns about our finances, our families, our relationships, and all areas of our life.  Then there will be all the conversation that continues to give us hope for the future that things will get better, - or worse, which ever side of a topic you are on.  And that’s really the whole point!

It really will go the way each of us says it will go and what we rally for, just like we did to win this elections.

I have historically voted to the right side of issues but this time, well, it seems it’s time for a change, so now -

Lets see how this dog and his pack hunt!

Everyone with one of these loans should make this choice:

First, ARM is an acronym for Adjustable Rate Mortgage.  The most popular form of these loans was and still is referred to as a hybrid which means it combines both fixed and adjustable terms.  Hybrid’s have an initial fixed portion of 3, 5, 7, or 10 years, then the loans converts to the adjustable portion, changing every 6 months or 1 year thereafter for the remaining term of the loan which is typically 30 years.

Some lenders sold these products as fixed rate loans, never discussing the adjustable portion with their clients.  These clients, believing they have a fixed rate loan, may be in for a shock.  But will that shock be a bad one?

Many consumers got one of these loans knowing they had the first few years as a fixed rate, planning to either move, move up or refinances.  All of these options assumend a new loan which everyone figured would be available and likely at the same or slightly different rates.  Currently, both of these choices can’t be easily done and likely won’t be for 1-2 years.  Again a shock to the Silicon Valley mortgage holder.  But will that shock be a bad one?

Al purchased a property in July of 2005 using a 5-1 ARM.  His loan balance was $656,000, his interest rate was 5.75%, he has a 10 year interest only payment option which many of these loans had, and he has no pre-payment penalty.  His plan was to take some of his equity, improve his property then sell it to buy a bigger home for his expanding family.

Al now has a breakdown! the improvements were completed in 2006 about 1 year after he got the loan.  He planned to sell in mid 2008.  Well that didn’t happen and Al is now looking at what to do.  His loan rate will reset in July of 2010 to what ever rates are at that time according to the terms of the adjustable rate portions of his loan.  His questions is should he reset or refinance now to avoid an uncertain future.

What Would You Do?

1. Refinancing now, closing before the end of 2008, Al will get a 30 year fixed rate loan with full payments for about 6.375% an increase in monthly payments of about $1,035.
2. Refinancing in January 2009 Al will get the same loan at an interest rate of about 7.25% with a payment increase of about $1,417.
3. Al Could keep his existing 5.75% for another 20 months & take his chances when the loan Resets on getting the same or better rate in the adjustable portion.  His loan has a 1 year treasury index whose value is currently 1.91, his loan has a margin of 2.75, and these two added together equal 4.66% which is where his rate would be if it adjusted today.

For these types of loans the most popular indices are:

• LIBOR - 6 month = 3.23%, 1 year = 3.34% - - 60% of US mortgages have this index
• Treasury Securities - 1 yr CMT = 1.91%, 12 month MTA = 2.47% - - 25% of US mortgages have one of these index values
• COFI & other regional bank issues - COFI 2.69% - - 15% of US mortgages have these index values

The vast majority of Margin values are:

• Prime loans or A paper = 1.875% - 2.75%
• Sub-Prime or B & C paper = 3.25% - 4.75%

There are other terms of your loan, your life, and the economy which must be considered when evaluating whether to refinance or reset like interest rate caps and pre-payment penalties.  The costs of refinancing, your goals and plans for the future, stability of your credit and you employment, and most importantly what the expectations are for index values should also be considered when making these choices.

Al decided to refinance now and here’s how he chose:

1. He’s guaranteed to get a fixed rate loan below 7%
2. He is not paying costs out of pocked, they are all included in the new loan preserving cash
3. His current job is secure and he is mildly concerned about the future of his company which could negatively impact his qualifications to get a new loan
4. He is concerned his home may drop in value making it impossible to refinance
5. Index values are low right now but as the economy recovers and expansion takes hold, they will rise, increasing the risk he will pay higher rates when his loan resets.
6. Even though Al considers himself aggressive in taking risk, he felt that now is a time to adopt a more conservative approach with so much uncertainty at hand.

The San Jose Mercury ran an article last week about these mortgages that is worth reading. To see it click here

To learn more about or see current index values & their movement see Mortgage-X

If you’re concerned about your situation, put it in a comment or drop me a line Contact Dan

 Last February, conforming loan limits were TEMPORARILY increased from $417,000 to $729,750 for single family homes in high cost housing areas. Effective January 1^st the limit will drop to $625,500.

 A campaign by mortgage and real estate industries for legislation to extend the limit got put on the back burner by legislators due to the need to address the credit crisis.

 And, let’s face it; the legislative attitude towards the mortgage industry in the present and in the foreseeable future is not friendly. It is not politically prudent to do anything that could be perceived as helping any of us who may still be in that business.  Of course extending the limit would be good for the mortgage business. But what many politicians seem to miss is the fact that extending the limit will also benefit consumers in high cost housing areas.

 Elected national representatives with constituents in lower cost areas may not care much about legislation to help those in high cost areas. And there are more of them.  So don’t look for legislative help. The temporary limit will expire at the end of 2008.

 We spoke of a certain sense of urgency in our August 4^th Bulletin because of the December 2008 expiration.  Obviously nearly three months have passed, making it more urgent now.  But also, several lenders are giving notice that these loans must be funded before December 1^st. Even though legislation allows them to fund loans with temporary limits through the whole month, lenders are not required to make them available that long.

 So buyers and borrowers have less than two months to take advantage of the higher limits. That’s not much time. Buyers and sellers in the $750,000 to $800,000 price range; take note.

 If that’s all you need to know, you can skip the figures that follow. If you need numbers for a specific transaction, call your loan consultant.

 Buyers with limited down payments are best served by FHA loans requiring only 3% down payment. Until next January (and maybe this December) a buyer can purchase a home for $752,320 with $22,750 down and a 97% FHA loan of $729,750 (present loan limit). 

 But when the limit changes, buyers with 3% down will feel some hurt. With the new $625,500 loan limit, the maximum purchase price for a 97% loan will be $644,840.  So a buyer with roughly $20,000 for down payment can buy a home in the $640,000 price range.

 That’s a $112,000 hit in price range. The difference in quality and available inventory between $650,000 and $752,000 is huge.

 Conforming loans typically go to 90% of purchase price, so we’re talking about 10% down. So, when the limit expires 90% financing will be available to a purchase price of $695,000.

 Buyers in the price range from $750,000 to $800,000 - you should evaluate thoroughly the risks of waiting.  You should know that the conforming loan limit is expiring sooner than you might think. And rates for loans above conforming are not only significantly higher, they are much harder to get at any rate.

 Call your loan consultant for specifics. Take advantage of the temporary limit if you can.

George Remsberg has been a friend of mine and business colleague in mortgage lending for more than 10 years.  He has written this for me and will be featured in more productions coming up.  If you are in the mortgage business, by visiting his website listed below, you can get an automated version of his “Mortgage Momo’s” which comes our weekly formatted with your name and company logo and information - Thanks George!

©2008MortgageMemos.com

INVENTORY CHANGE - SILICON VALLEY

FOR THE FOURTH QUARTER OF 2008

(AREAS 1 through 23, that is: Gilroy through Sunnyvale)

Class 1 Properties (single family homes):

Overall Change from 9/27/08 to 10/18/08:

________________________________________________________________________

Class 2 Properties (condominiums or townhomes):

Overall Change from 9/27/08 to 10/18/08

Yes there is still money available! - If you are qualified, can afford the payment, are willing to buy or refinance property at current reduced values, and have good reserves after the transaction is complete, there is a loan for you, and it’s not tough to get.  Here’s some advice:

1. Many lenders have closed their doors & stopped doing business.  You do not want to have your transaction placed with one of them just before they go out.
2. Several national mortgage lenders have gotten proprietary.  This means you could only get financing with that firm directly, they no longer work with or accept loans from Mortgage Brokers.  An example of this is Bank of America.
3. Mortgage Bankers, which are a class of lender between brokers and direct lenders fund their loans through pre-arranged credit lines then within 30 days sell them.  These credit lines have been negatively impacted by the stalled credit markets causing these lenders in a few cases to renege on loan approvals.  This can cause real disruption in the lives of everyone in the transaction.
4. There is still an over-abundance of lending sources and their conversations are ever more creative to survive so choose your hiring standards carefully & stick to them.  May I suggest professionalism, experience of more than 10 years, and someone who will listen to what you care about?
5. Now more than ever, if you have trusted advisers in your life stay close, let them know how much you appreciate their advice, and absolutely follow it without question.  After all, in their area of expertise, they know more than you do - sort-of a flashlight on a dark road!

Yes there are still buyers who want to and are buying - I recently heard though unverified that 91% of the 1,800 pending sale transactions in Santa Clara County involve bank owned or seller distressed property - WOW!

If you’re afraid, frozen, or even paralyzed about your current finances, the real estate market, or general economic situation, I have a solution - contact me!

Finally, in my years in business I can recall many conversations with clients who said “boy if property values would just come down a little and there weren’t so many trying to buy, I’d buy several”.  Now is you chance, and there are some great homes available at fire sale prices where you would love to live.

According to an ancient story there was a king who was continuously torn between happiness and despondency.  The slightest incident would cause him great pain and upset and turn his happiness into disappointment and despair.  The king finally got tired of his situation and began to look for a way out.  He sent for a wise man in his kingdom who was reputed to be enlightened.

When the wise man came, the king said to him “I want to be like you.  Can you give me something that will bring balance, serenity, and wisdom into my life?  I will pay any price you ask.”

The wise man said “I may be able to help you but the price is so great that your entire kingdom would not be sufficient payment for it.  Therefore, it will be a gift to you if you will honor it.”  The king gave his assurance and the wise man left.

A few weeks later the wise man returned and handed the king an ornate box carved in Jade.  The king opened the box and found a simple gold ring inside.  On the ring there was an inscription that read This Too Will Pass. “What is the meaning of this?” asked the king.  The wise man said, “wear this ring always.  Whatever happens, before you call it good or bad, touch the ring and read the inscription.  That way you will always be at peace.

In these times where every direction we turn reveals an abundance of bad news and sadness, you and I must remain centered on our dreams and the possibility that the future holds for all of us, and it certainly does.  This will cause the direction and results we seek.  To continuously engage with bad news of course will replicate that in your life as well.  Guard carefully the thoughts you think.

May I recommend you read this and more in A New Earth - Awakening to Your Life’s Purpose by Eckhart Tolle.  Life happens in cycles and as intense as this one is, the upside which is on its way will certainly be quite AMAZING!

It is common these days to have long protracted conversations with real estae clients.  It’s also common that many clients have expectations from previous experiences that do not serve them now.

Jane did not communicate with me when she promised (http://www.satorialliance.com/ive-had-it-up-to-here-does-quality-matter/ ).  I sent an E-mail reminder, no reply.  I sent another 3 days beyond her action deadline, “Been real busy, will get back to you in a couple of days”.  Three days later, no reply.  I make a reminder phone call & leave a voice mail, no reply.  I send another  reminder e/m 2 days later, Reply: “I’m going to talk with a broker as well to be assured I get the best rates in Silicon Valley”.

So, for now this two week process of taking care of Jane hangs in the balance of who will say they have the best rate for Jane.  Delivering on that promise is another topic.  While Jane has been shopping for her mortgage like she does with so many other commodoties, mortgage interest rates have increased nearly .5%, something she could have avoided saving herself $166./month which she will now have to pay unless further increases occur before she makes her choice.

Times are different, the lending process is different, and in Jane’s case 4 major lenders supply all the mortgage product to all bankers and brokers who affer it at essentially the same price.  Expectations from a different real estate and financing market will cost you if they are no longer effective.

You will only know that if you get QUALITY ADVICE!

Yesterday I saw a sound bite where Joe Biden was angrily hollering at a rally for Obama “I’ve had it up to here” and the story went on with some embattled retort to something said in the McCain camp.  What are they training us about who they are?  Does it really matter what they say and to whom?  Are we seeing what’s in their heart (which will lead the country) from the media reports, which by-the-way includes this very post?

I had a conversation with a potential mortgage loan client yesterday (we’ll name her Jane) who contacted me from a directive on her monthly loan statement.  She has a fixed loan with a lower rate than current yet it’s going to convert to an adjustable rate in 1.5 years.  Her dilemma is should she refinance now or wait until the fixed rate portion is over.  Excellent question to be asking.  What do you think I told her to do?  Write your answer down right now. . .

We all know the headlines and turmoil in mortgage lending.  “I’ve had it up to here” with the talking heads in the newsrooms across the country in TV, Radio, and all across the Web that have made sure we are absolutely clear how “BAD” this “CRISIS” really is.  I’m getting calls from scared clients I’ve carefully developed for 25 years asking me questions about what they should be doing with the fear they are experiencing.  I’ve had it up to here with conversations that generate fear.  So now it’s up to me!  What should we do, what is the RIGHT thing to do, what is the BEST thing Jane could do - Is there really a crisis to do anything about, or is the doing that people are doing, the real crisis that’s being created?

I discussed Jane’s qualifications after several days of collecting her real #’s.  I researched her actual loan terms & we discussed how that loan would work down the road.  We looked at what the rate would be today if it converted and speculated about that conversion formula and resulting interest rate.  Jane shared with me her living plans and some of her dreams for the next 2-5 years.  We talked about a refinance, the timing, available lenders and programs, costs involved, and options to all of these she could control or not.  This conversation lasted about 40 minutes as she asked for clarification of her own concerns plus some I raised.

Jane and I completed the call.  She now has answers to critical questions she’s been struggling with.  More important, she’s settled, she’s peaceful, she has options.  The difference for her is she now has actual facts she understands and can verify, she can now live the future exactly the way she wants, and that’s real power!

Will I get her business and be paid for supporting her, I sure need and want it these days, but what matters is the honor and respect that just having quality facts produced for Jane.  She can now choose what’s best for her.  To find out what she chose, and if you were right, come back next week which is when I find out.

Basic communication has only 4 parts and can get complicated or distorted when we forget where we are in the process and stop paying attention.

Each part of the process takes time to develop, be fully expressed and experienced.  Moving on too quickly creates that uneasy feeling of being incomplete.

Communication primarily deals with Thought, Feelings, Beliefs, or Memories.

In its purest form, communication is Creation, bringing something into existence in language from nothing - Thinking is not communication, it’s thinking!

 BEFORE - What happened, the experience that precedes communication

Usually something happens that triggers thought, feelings, beliefs, or memories (past tense) or inspirations (present or future tense).

 Part 1 - What happened (the event)

Responsibility and ownership of experiences in my life is important for me and only me.  I can’t speak for someone else’s experience, only my own.  Examples are somebody said something to me, I saw something, I heard something, I tasted something - some physical sensory experience in my life happened.

 Part 2 - What did I experience, do, or say as a result of what happened

What was my experience of what happened?  What reaction did I have to it?  What did I think it meant, what did I do, say, or believe, how was I inspired, saddened or did I anticipate, even worry about, what was I afraid of.

If we are honest and look deeply, in this part of communication we get in touch with or learn from our automatic reactions to life’s endless situations and conclusions we made about our past.  Now we have a choice; unconciously continue that behavior or choose something better and different.

 Part 3 - Clean up the mess

Here we apologize for causing upset or damage in the life of those who experienced what we said or did.  This is the hardest part of any communication because we are vulnerable and exposed; we tell on ourselves, we reveal the jerks, the animals that we are on automatic pilot.  Since this will continue for the rest of our lives we must get good at cleaning up after ourselves.  The only alternative is a path of destruction behind us.  We are always 100% responsible for being the cause of what happened (Part 3).  Realizing this, we now communicate from our heart, our deepest inner being, that we caused suffering then ask to be forgiven sincerely and with compassion for those we care about.

Part 4 - Make a new promise

Having seen what happened, recognizing the mess we made, and being committed to behaving better, we can now make a new promise about future behavior.  At this point in effective communication, these promises come from our deepest foundational values in life, and can only be promised sincerely once we’ve been through all 4 steps in the sequence.  That doesn’t mean long conversations, although at first it may until we get the practice down.

So yes it takes skill and practice to ask “What Happened”!