August 23, 2011 by Mark Dotzour

Have you heard anyone talk about specific plans to encourage job growth in America? I haven’t either. I hear lots of talk about how job growth is “sluggish” and that hiring is not rebounding as it should at this stage of the economic cycle. Our leaders in Washington appear to be bankrupt of ideas for promoting job growth in America. So everyone can complain and point fingers at others and try to blame them, but none are willing to come out and say what America needs to resume its normal path of business expansion.

Here is what I hear directly from business owners when I’m on the road. There are several reasons why they don’t want to hire people right now. Here they are in a nutshell:

■Complete uncertainty regarding the future cost of health care for business owners

■Two thousand pages of bank regulation that has yet to be enacted

■Regulation of health care and health insurance

■Regulation of off-shore oil drilling

■Regulation of oil-shale deposits

■Complete uncertainty about future income tax rates

■Complete uncertainty about future capital gains tax rates

When business owners are unsure about their future, what do they do? Nothing! They just try to survive until the storm is over. They also hoard cash, like almost $2 trillion at this point. Our economy is not going to recover until businessmen and women regain confidence in the future opportunities in our country.

So how can our leaders in Washington encourage businesses to start to hire again? First, they need to let businesses know that they are not the enemy. Businesses need to be encouraged and know that government is working with them, not against them.

We are creating such a hostile environment for businesses that we could be in for a long period of economic stagnation in America. What would a business-friendly agenda look like? Well here it is.

Imagine if the President and Congress came out with a bi-partisan plan to:

1.Repeal the health-care nightmare.

2.Repeal Dodd-Frank, and come up with 15 pages of meaningful bank reforms.

3.Tell China to stop manipulating their currency and buy something produced by Americans.

4.Roll back EPA regulations to 1999 levels.

5.Roll back all other business regulations to 1999 levels.

6.Announce an airtight plan to reduce the deficit to zero in seven years.

7.Lower corporate tax rates to stop companies from fleeing America.

8.Foreclose on four million homes and sell them to private sector investors.

You may think that this sounds like Alice in Wonderland. But actually these are the issues that are killing economic opportunity in our great country. Either we address them, or we look more and more like Japan every day. Let’s do it! Now.

Source:  Real Estate Center

On Friday, August 5, credit rating agency Standard & Poor's (S&P) downgraded the United States' credit rating one notch from AAA to AA+. Though this was an historic decision, as the United States had held it's AAA rating from S&P since 1941, it wasn't a surprising one. S&P had previously said it would lower the rating if Congress did not reduce the federal deficit by $4 Trillion over 10 years (the Debt Ceiling/Deficit Reduction Bill passed on August 2 only called for a deficit reduction of $2.4 Trillion over the next 10 years). In addition, S&P also downgraded certain entities linked to US debt, including Fannie Mae and Freddie Mac.


So what does this mean...both for our economy and home loan rates?

Maintaining our AAA credit rating reinforces the United States' role as the reserve currency of the world or a place where investors will place their money as the ultra safe haven. This is a key factor for our continued economic recovery.

But it's important to keep in mind that S&P is currently the only credit rating agency that has downgraded the United States. Both credit rating agencies Moody's and Fitch have maintained the United States' AAA rating. Also, with the ongoing credit crisis in Greece and other parts of Europe, most of the world still sees the United States as a safe place to invest their money. This bodes well for our economy and also our Bond Market, including Mortgage Bonds, to which home loan rates are tied.

The bottom line is that home loan rates remain near their historic best levels, but about the only thing that is certain in the markets right now is the volatility. If you've been thinking about buying or refinancing a home, give me a call or send me an email to see if you could benefit from this situation.

Title is the legal documentation that bestows ownership of real property. This is to be indicated in Part II of the 1003 Uniform Residential Loan Application as "manner in which title will be held."

The decision of how the title will be held should not be put off until the last minute since it has a great impact on future tax planning, the financial future of the borrower(s) and their respective heirs, and the choice of the lender.

It is most important for the mortgage consultant to work hand-in-hand with the borrower's financial planner or tax consultant to assist their mutual client in order to make decisions that work best for their particular scenario.

For example, most married couples would consider holding title with Joint Tenancy. But if one spouse has a good credit history while the other has damaged credit that may prevent funding of the loan, it would be advantageous to place title in the name of the spouse with the good credit rating.

Common ways to hold title are broken down into options that fall under the categories of sole ownership or co-ownership. Many states permit the holding of title in a living trust, but some lenders do not accept those terms. There are ways around this, but this is where the financial planner and the mortgage planner can make a tremendous difference by working together.