Laura Riffel's Blog

Red Flag Rule Effective November 1st. Are you Compliant??

laurariffel — Mon, 19 Oct 2009 20:31:50 +0000

Red Flags Rule in Effect November 1, 2009. Are you prepared?

If you’re not, you could be fined up to $3,500 for EACH INDIVIDUAL VIOLATION.

Some of you may have heard that the Federal Trade Commission (FTC) passed a regulation in 2008 called the Red Flags Rule. The FTC created this rule in order to protect consumers from identity theft. This rule was supposed to take effect in May of 2009, but was postponed until August 1, 2009 and then again until November 1, 2009. There is no indication that the FTC is going to extend the deadline, so it appears that everyone must be compliant starting November 1, 2009.

The Red Flags Rule makes it mandatory for all businesses which regularly participate in the decision to extend, renew, or continue credit (loan companies, real estate agents, broad scope of professionals), including setting the terms of credit to develop and implement a written Identity Theft Prevention Program designed to prevent, detect, and mitigate identity theft with regards to existing and new accounts. The Red Flag rule also pertains to anyone who renders services for a consumer and then bills the consumer for the service at a later date. Thus this rule is so far reaching that it even applies to many attorneys and doctors in addition to mortgage lenders and servicers.

In order to avoid regulatory enforcement actions (which include civil fines up to $3,500.00 for each individual violation and injunctive relief which includes having to comply with the Red Flag Rule and sending the FTC documents, reviews, and other items the judge grants in favor of the FTC), a business must:

a) First, identify red flags which include: those sources of information that could be altered by a person which would allow that person to be able to open an account with your business in someone else’s name; credit report notices; addresses that are not consistent with other information; social security numbers which are on the death notice list; social security numbers that could not have been issued during the time the person obtained the number; mail to a person that keeps getting returned to your business; customer claims not to receive the information that has been sent to them; and other things that are specific to the industry of your business.

b) Second, create procedures for detecting the identified red flags in the day to day operations of your business.

c) Third, create guidelines for the steps that need to be taken once a red flag is identified.

d) Fourth, create a policy on how and when the above steps will be revised.

e) Fifth, once the program is created in the previous steps, the Plan must be approved by the board of directors or appropriate committee of the board. If the business does not have a board of directors, then someone in senior management must approve the Plan.

It is not enough to make sure that the policy is created. The business must appoint someone to follow-up and ensure that the business is taking the appropriate steps that are outlined in the Plan. Each branch office will need its own plan and accountable person.

You must comply with all of these steps by November 1, 2009. That means that the business must identify its potential red flags, create a plan, have the plan approved, have someone accountable for ensuring that the plan is complied with and implement the plan by November 1, 2009.

There are some do it yourself sites and I know an attorney who has already done the work for you. They provide a plan and a power point for training purposes, and this way you can say it was done by an attorney if the fed ever comes knocking on your door.

Loan Modification vs. Short Sale

laurariffel — Thu, 19 Mar 2009 21:25:14 +0000

Our in house Short Sale Expert – Rex Riffel – has written the following article on Short Sales versus Loan Modifications. If you know of anyone who is facing the potential loss of their home, there are options. You can also go to www.RexNow.com for more complete information.

Laura
_______________________________________________________

Know your options to Foreclosure

We have a lot of clients now who are having trouble making their loan payments and it’s driving them crazy. They are the type of people who have always paid all their bills on time and it’s eating them up inside.

Let’s stop and think about this for a moment. When they made the agreement to pay on their home loan their business was going fine or they had a job. They had no idea that the market was going to do a full scale melt down and the bottom was going to fall out so fast that everyone would be left spiraling in the dust.

When they made their agreement they were thinking even if the loan adjusted up they would still find a way to handle it. They would work extra hours or cut back on luxuries, whatever it took to keep their house payments current. It never occurred to them that they might be out of business or out of work or that their investments would be cut in half. It was just never factored into the equation.

Now they find themselves out of work or with failing business and being financially crushed by a high balance loan and house that is so upside down they couldn’t sell it and get out even if they wanted too.

Time for a reality check. You are not responsible for the market. It changed in a huge way and now you need to deal with the current situation. If this situation applies to you first realize that you are not the only one. I heard a statistic the other day that one out of every four homeowners currently owes more on their home than it is worth. If you are one of them and you cannot make the payments then you need to know your options:

1-Get a better job that pays more. The upside is that this will solve most of your problems. The downside is that this may not actually available. If you can’t just go out and get a higher paying job then you need to look at the other options.

2-Foreclosure. The upside is that you get to live in your house without making payments until the bank finally sells the house and evicts you. The downside: Foreclosure is a very bad mark on your record that will stay with you and keep you out of the housing market for a long time. You may also owe taxes on the difference between what the bank sells the house for plus all costs of sale and what you owe on the house.

The new debt relief bill has just been extended until 2012 so there may be some relief for you, especially if your loans are the original loans you secured when you purchased the property. Talk to your accountant and attorney before you make any decisions. I am neither and do not give that kind of advice.

3-Get a loan modification. The upside is that if you are offered an acceptable loan modification it will reduce your monthly payments. If they modify the principle balance it will actually lower the amount you owe on your house. The downsides are that you may not qualify for a loan modification or the loan modification they offer you may not address the real problem; a high balance loan that you will be stuck with for a very long time.

It is also unlikely that they will reduce the principle balance owed but it is always the first thing we request when we do loan modifications for our clients. Unfortunately it is rarely offered. What you normally get is a lowered interest rate and whatever you haven’t paid is tacked onto the balance of the loan. There is also a cost to do loan modification, usually $2500 or more if you hire a company to negotiate the loan modification for you. The fee is often in phases where a fee is collected each time a phase of the loan modification is completed. In our office we charge for the loan modification in three phases and if at any time we are unable to move forward to the next phase the loan modification stops and our clients get their money back for the unfinished phases.

What loan modification companies won’t tell you is that a substantial percentage of successful loans that have been modified eventually end up as foreclosures or short sales. So it is important to really look at it realistically at your modified loan and decide if you can make the new payments or not. If not you need to choose foreclosure or do a short sale. I would never recommend a foreclosure because the Short Sale is almost always a much better option that solves a lot of the issues.

4-Do a Short Sale on your property. (By the way, when I say, “Do” a Short Sale” I mean; “Hire me,” to “Do” a Short Sale… for you if you are in Southern California) The upside (regardless of who you hire) is that you will still be able to live in your current house for an extended period without making any payments.

In fact, the short sale process is anything but short. When we negotiate a short sale with a bank we are dealing with disinterested paper pushers with huge stacks of papers on their desks that need to be pushed in a very specific order. Unfortunately (or fortunately, depending on how you look at it) your papers look just like the ones in front of them and the pushers of paper really don’t care whether you or the buyer is in a hurry to close the transaction. It can take months and months to complete a short sale. Normally it’s 3 to 9 months (or longer) to complete a short sale. However when we do a short sale we have ways of getting the house on and off the market in one weekend so there is minimal disruption to your life. Most of our seller clients don’t really care if it takes a long time to close the transaction though because the longer it takes the less they pay.

The short sale is used to stop a foreclosure. During the short sale process the foreclosure is put on hold while we work with the paper pushers to get the short sale through. However, the foreclosure process will resume if the seller decides not to cooperate with the short sale anymore, (meaning; they won’t sign necessary paperwork or let people into the house for inspections, etc.). Foreclosure will also resume if the bank decides not to accept a short sale, this is why it is important for us to get the right price for the house. Most banks would seriously consider accepting a short sale however because it ultimately still costs them less than going through a full foreclosure.

There is also zero cost to sell your home when we do a short sale. We’ve done hundreds of short sales and we always negotiate all the fees directly with the banks. Our clients never pay a dime for us to do a short sale!

This is in drastic contrast to the normal costs of selling a house like Real estate fees, escrow, title, getting the house ready for sale, termite repairs, requests from the buyers, and the list goes on and on. Selling a house can be expensive…but not when you do a short sale!

Probably the biggest benefit to doing a short sale is the opportunity for a fresh start. That fresh starts the minute that the home owner stop making the house payments, and once the house is sold they will also be out from under the burden of the high balance loan that would otherwise be with them for a very, very long time. Most home sellers can be back in the housing market within 24 months after doing their short sale.

What’s the downside? The bank may not approve the short sale and then the house would eventually go into foreclosure. Other downsides are the possibility of owing taxes on the difference between what the house sells for minus what you owe on it. (This is the same for a foreclosure). If it is an original purchase money loan, however, it is unlikely that there will be taxable consequences thanks to the debt relief act that was just recently extended to 2012. Check with your accountant to be sure. There is also the negative mark on your credit report, but a short sale is no where near as damaging as a foreclosure. Short sales are actually the responsible and proactive thing to do when you can’t make the house payments and your only other real option is foreclosure. A short sale shows the banks that you are doing everything in your power to relieve you and the bank of the burden and you are actively doing something about it.

No one knows for sure what the future will bring and I am completely unqualified and (unlicensed) to give any tax or legal advice so you should seek that kind of information from qualified individuals with those kinds of credentials. But this is the way it looks to me right now. I’ll keep you updated if things should change.

Rex.

Warren Buffett on Manufactured Housing

laurariffel — Tue, 03 Mar 2009 21:38:10 +0000

It is not a widely known fact that Warren Buffett’s company, Berkshire Hathaway, is the largest investor in the Manufactured/Mobile Home sector via their Clayton Homes and 21st Mortgage Division. There has been much speculation recently as to how Manufactured Housing has been affected in the recent credit crisis and resulting foreclosure fallout. Is Manufactured Housing a safe investment? Are the borrowers more susceptible to foreclosure pressures than the conventional borrowers in residential housing? I say, if you have a question, go straight to the source of knowledge. Below is an excerpt from the Berkshire Hathaway 2008 Annual Report specifically regarding Manufactured Housing.

After reading, I think there will be a renewed understanding why our security, The Guardant Investment Fund, opted to invest only in the manufactured housing notes and why we have continued success and high returns for our investors, even in tough economic times.

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Warren Buffets’ comments in his (just out) 2008 annual report about the Manufactured Housing Industry
I will write here at some length about the mortgage operation of Clayton Homes and skip any financial commentary. I do this because Clayton’s recent experience may be useful in the public-policy debate about housing and mortgages. But first a little background.

Clayton is the largest company in the manufactured home industry, delivering 27,499 units last year. This came to about 34% of the industry’s 81,889 total. Our share will likely grow in 2009, partly because much of the rest of the industry is in acute distress. Industrywide, units sold have steadily declined since they hit a peak of 372,843 in 1998.

At that time, much of the industry employed sales practices that were atrocious. Writing about the period somewhat later, I described it as involving “borrowers who shouldn’t have borrowed being financed by lenders who shouldn’t have lent.”

To begin with, the need for meaningful down payments was frequently ignored. Sometimes fakery was involved. (“That certainly looks like a $2,000 cat to me” says the salesman who will receive a $3,000 commission if the loan goes through.) Moreover, impossible-to-meet monthly payments were being agreed to by borrowers who signed up because they had nothing to lose. The resulting mortgages were usually packaged (“securitized”) and sold by Wall Street firms to unsuspecting investors.

This chain of folly had to end badly, and it did. Clayton, it should be emphasized, followed far more sensible practices in its own lending throughout that time. Indeed, no purchaser of the mortgages it originated and then securitized has ever lost a dime of principal or interest. But Clayton was the exception; industry losses were staggering. And the hangover continues to this day.

This 1997-2000 fiasco should have served as a canary-in-the-coal-mine warning for the far-larger conventional housing market. But investors, government and rating agencies learned exactly nothing from the manufactured-home debacle. Instead, in an eerie rerun of that disaster, the same mistakes were repeated with conventional homes in the 2004-07 period: Lenders happily made loans that borrowers couldn’t repay out of their incomes, and borrowers just as happily signed up to meet those payments. Both parties counted on “house-price appreciation” to make this otherwise impossible arrangement work. It was Scarlett O’Hara all over again: “I’ll think about it tomorrow.” The consequences of this behavior are now reverberating through every corner of our economy.

Clayton’s 198,888 borrowers, however, have continued to pay normally throughout the housing crash, handing us no unexpected losses. This is not because these borrowers are unusually creditworthy, a point proved by FICO scores (a standard measure of credit risk). Their median FICO score is 644, compared to a national median of 723, and about 35% are below 620, the segment usually designated “sub-prime.” Many disastrous pools of mortgages on conventional homes are populated by borrowers with far better credit, as measured by FICO scores. Yet at year end, our delinquency rate on loans we have originated was 3.6%, up only modestly from 2.9% in 2006 and 2.9% in 2004. (In addition to our originated loans, we’ve also bought bulk portfolios of various types from other financial institutions.) Clayton’s foreclosures during 2008 were 3.0% of originated loans compared to 3.8% in 2006 and 5.3% in 2004. Why are our borrowers – characteristically people with modest incomes and far-from-great credit scores – performing so well? The answer is elementary, going right back to Lending 101. Our borrowers simply looked at how full-bore mortgage payments would compare with their actual – not hoped-for – income and then decided whether they could live with that commitment. Simply put, they took out a mortgage with the intention of paying it off, whatever the course of home prices.

Just as important is what our borrowers did not do. They did not count on making their loan payments by means of refinancing. They did not sign up for “teaser” rates that upon reset were outsized relative to their income. And they did not assume that they could always sell their home at a profit if their mortgage payments became onerous. Jimmy Stewart would have loved these folks. Of course, a number of our borrowers will run into trouble. They generally have no more than minor savings to tide them over if adversity hits. The major cause of delinquency or foreclosure is the loss of a job, but death, divorce and medical expenses all cause problems. If unemployment rates rise – as they surely will in 2009 – more of Clayton’s borrowers will have troubles, and we will have larger, though still manageable, losses. But our problems will not be driven to any extent by the trend of home prices.

Commentary about the current housing crisis often ignores the crucial fact that most foreclosures do not occur because a house is worth less than its mortgage (so-called “upside-down” loans). Rather, foreclosures take place because borrowers can’t pay the monthly payment that they agreed to pay. Homeowners who have
made a meaningful down-payment – derived from savings and not from other borrowing – seldom walk away from a primary residence simply because its value today is less than the mortgage. Instead, they walk when they can’t make the monthly payments.

Home ownership is a wonderful thing.

My family and I have enjoyed my present home for 50 years, with more to come. But enjoyment and utility should be the primary motives for purchase, not profit or refi possibilities. And the home purchased ought to fit the income of the purchaser. The present housing debacle should teach home buyers, lenders, brokers and government some simple lessons that will ensure stability in the future. Home purchases should involve an honest-to-God down payment of at least 10% and monthly payments that can be comfortably handled by the borrower’s income. That income should be carefully verified. Putting people into homes, though a desirable goal, shouldn’t be our country’s primary objective. Keeping them in their homes should be the ambition.

Clayton’s lending operation, though not damaged by the performance of its borrowers, is nevertheless threatened by an element of the credit crisis. Funders that have access to any sort of government guarantee – banks with FDIC-insured deposits, large entities with commercial paper now backed by the Federal Reserve, and others who are using imaginative methods (or lobbying skills) to come under the government’s umbrella – have money costs that are minimal. Conversely, highly-rated companies, such as Berkshire, are experiencing borrowing costs that, in relation to Treasury rates, are at record levels. Moreover, funds are abundant for the government-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.

This unprecedented “spread” in the cost of money makes it unprofitable for any lender who doesn’t enjoy government-guaranteed funds to go up against those with a favored status. Government is determining the “haves” and “have-nots.” That is why companies are rushing to convert to bank holding companies, not a course feasible for Berkshire. Though Berkshire’s credit is pristine – we are one of only seven AAA corporations in the country – our cost of borrowing is now far higher than competitors with shaky balance sheets but government backing. At the moment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one.

New Video on Deferred Sales Trust

laurariffel — Wed, 28 Jan 2009 23:52:55 +0000

The video is part of a campaign to Qualified Intermediaries (QI) in an effort to assist them in getting their clients to their ultimate goals when entering a 1031 exchange – long term capital gains tax deferral. The video explains how QIs can utilize the Deferred Sales Trust as a rescue option in a failed 1031. The speaker is a partner in the law firm Rimel & Nichols in Orange County, California.

The DST can be utilized by end users, ie tax payers, by going to www.New1031Alternative.com

Lower Interest Rates equal Economic Stimulus

laurariffel — Wed, 17 Dec 2008 18:03:12 +0000

For those of us who didn’t overspend and take loans we didn’t qualify for on homes with inflated value, there is some good news on the horizon today.

Just like gas prices have dropped, interest rates have hit 4.5% for a thirty year fixed with no points. If you are able to qualify (document income), have a loan amount below $417,000, and estimate you have a loan to value that does not exceed 80% at today’s value, you may want to consider a refinance to lower your payments.

Take advantage of the closest thing to an economic stimulus we may see at this level. Feel free to contact me to do a quick analysis of your situation to determine if a refinance is appropriate for you…or someone you know! Or don’t call me, call your favorite loan officer…but don’t hesitate. Money markets are tight right now. FNMA and FHLMC are in conservatorship. Things are tenuous. But banks still need to make quality loans to quality borrowers…with a caveat of course. You have to actually qualify. State income loans are a thing of the past for now. If and when they come back, I anticipate they will be for self employed and commission individuals only.

Best of Luck!

Consider In-Service Distribution to an IRA

laurariffel — Wed, 03 Dec 2008 19:53:57 +0000

This is a great article. An unknown legal option for 401(k) holders is an in-service distribution. This allows a greater flexibility for investments, especially in trying economic times. It is not allowed by all third party administrators of company plans, but for those who are eligible it can be a phenomenal hedge against loss in the traditional markets.

By Jim Lentini – The Signal, Santa Clarita Valley

If you are a participant in a company sponsored 401(k) plan, there may be some benefit for you to consider an in-service distribution to an IRA. While it is important to save as much as possible for your retirement, it is also important to make your retirement dollars work as hard as possible; so an in-service withdrawal might make sense for you.

Employees may roll over their retirement plan accounts to an IRA when they retire or quit. However, many people do not realize that certain retirement plans assets can be rolled over to an IRA even while they are still “in-service.” Many retirement plans offer the opportunity for in-service withdrawals.

Why consider an in-service withdrawal?
While all qualified retirement plans offer tax-deferral, IRAs offer compelling tax advantages over 401(k)s and other retirement plans. You may want to consider an in-service withdrawal to an IRA if:

* You need the assistance of a financial adviser. Most retirement plans don’t offer participants personal advice based upon them as individuals. By moving your assets into an IRA, you could work with a financial professional of your choice on a customized solution for your overall retirement plans and goals.

* You are unhappy with the range of investment options. Some plans offer too few investment choices, others offer far too many. You might prefer fund options not offered through your company plan. Or, you want to consider a plan that offers guarantee options not offered in company sponsored plans. Guarantees are important anytime in retirement planning, but especially in times of volatility, like now!

* You want to be able to stretch your distributions. Most retirement plans like 401(k)s require a lump sum distribution upon the death of the participant. That means beneficiaries have to receive the money and pay taxes on it almost immediately. If those assets were in a IRA instead, your heirs would be able to stretch their receipt of money over a much longer time, thereby maximizing the tax deferral, and minimizing the income taxes owed. Also, working with a professional adviser will offer more tax advantage options for your consideration.

* You are planning a home purchase and might need money. IRAs offer greater flexibility for home purchase. A distribution from an IRA used for the down payment of a home would not have the 10 percent penalty assessed in a 401(k), if you are over 59. This also applies to withdrawing funds from an IRA for college education.

* You have doubts about the financial health or longevity of your company. While not common, there have been well publicized instances of corporate plans being frozen or lacking funds in their accounts (remember Enron?).

* IRAs may offer significant benefits like greater flexibility and control, but they don’t offer the following 401(k) options:
1. You cannot borrow from an IRA, unlike a 401(k), which offers loan options.
2. Creditor protection is stronger on ERISA-protected plans like a 401(k). IRAs offer some creditor protection but it is based on state law and frequently requires you to file for bankruptcy.
3. Required Minimum Distributions don’t start in a 401(k) plan until you stop working. In an IRA, they must begin at age 70 1/2.

The IRS requires employers to give each employee a copy of the retirement plan’s Summary Plan Description. If you don’t have one, ask your human resources department for a copy and review it with your financial adviser. Your adviser should have experience with in-service withdrawals and can offer you guidance as to whether or not this strategy would be beneficial for you. If you decide an in-service withdrawal would be right for you, your adviser can also help you complete the paperwork and set up the accounts properly for your retirement goals.

Why TICs are a bad idea for 1031 Exchanges

laurariffel — Tue, 02 Dec 2008 19:58:10 +0000

It is unfortunate that it takes a massive economic failure to point out shortfalls in a very dramatic way. This market has been tough on everyone, some more than others. Unfortunately, there has been a proliferation of Tenants-In-Common or TICs being used for 1031 exchange purposes. I say unfortunate because there are issues inherent to the basic structure of TICs that I have felt made them a high risk proposition for 1031 purposes.

The biggest financial fear about so-called “1031 TIC” real estate investment deals appears to be turning into reality: One of the largest “tenants in common” or “TIC” firms — with 8,300 individual investors and office and retail properties valued at $2.4 billion — has filed for Chapter 11 bankruptcy protection.

The firm, DBSI of Boise, Idaho, was part of an investment wave that followed a 2002 ruling by the IRS. That ruling said owners of commercial and residential income properties could fulfill the tax-deferral requirements of Section 1031 of the Internal Revenue Code by investing in tenants-in-common ventures.

Under Section 1031, investors who seek to avoid or defer capital gains taxes on their properties can exchange their interests for “like kind” real estate, provided they follow IRS guidelines.

In 2002, the IRS ruled that tenants-in-common arrangements — under which as many as 35 investors own fractional interests in individual properties — can qualify as vehicles for 1031 exchanges. For example, an owner of a small retail shopping strip might exchange into a TIC that owns a much bigger and more valuable downtown office building.

The tenants-in-common owners could thereby avoid immediate taxation of capital gains and end up with bigger and theoretically higher-quality real estate – tax free – in the process.
The TIC structure comes with built-in problems, however. Their fractional interests generally are not liquid investments — it’s tough to sell them if you need to pull out money..

Some critics also say TIC ventures pay too much for their commercial properties, and that investors have been charged excessive fees to participate.

DBSI managed the activities of dozens of office, retail and other commercial properties in 30 states, but says it got caught up in the real estate downturn and credit crunch. Now its eight thousand-plus individual investors are stuck in illiquid TICs … and waiting to hear what happens to them next.

The DBSI bankruptcy comes on the heels of recent advisories from the Federal Trade Commission and the Treasury Department warning investors about potential dangers in 1031 exchanges.
Bottom line: Section 1031 exchanges — structured and facilitated by independent, qualified intermediaries — can be a great way for small scale and large investors to save on taxes.
TICs may also fit into the equation, but only if investors fully understand all the risks, including, now in the wake of the DBSI implosion, the possibility that their TIC may go belly up, leaving investors waiting in line at the bankruptcy court hoping for pieces of the remains.

As I have said frequently, there are other options available for individuals looking to get out of a property while deferring capital gains tax consequences. If finding another property is not an option and TICs seem too risky, there are two other options that are highly underutilized, primarily due to the newness of the products.

My first and favorite is the Deferred Sales Trust(tm). This is an advanced tax and estate planning tool that can provide tax deferrals AND cash flow. I am not able to do it justice in a paragraph, but you can visit www.New1031Alternative.com to find out more.

My newest and interesting choice is a carve out from a company that does land development in the path of progress. The company will allow an investor to 1031 exchange into a portion of one of their developments. The investor owns the carved out portion of the project outright, or with a carry back mortgage and leaseback if needed. Again, this is a broad stroke illustration.

If you need more information to make a better determination for your self, please don’t hesitate to contact me. I am the point in contact for both methods and can put you in touch with the appropriate individuals who can provide more detailed information pertinent to your situation and assist you in finding the appropriate alternative to the TIC for your 1031 needs.

Ever wish you could see the Future? Economic Predictions

laurariffel — Wed, 19 Nov 2008 22:59:22 +0000

There was a point in time that we felt we could see the future. In June of 2005, the CEO of my company wrote an article. When the real estate market was surging with sales activity enabled by loan programs with ridiculous terms enhanced with the most liberal of underwriting consideration and little thought to the future consequences, we were throwing a flag on the field. We felt that the lending practices of giving one unqualified borrower money to bid up the value against another unqualified borrower led to the unstable state of affairs in property valuation. At the time we were ridiculed by many in the industry who said that we didn’t understand the real estate market, it was not like the stock market, and housing would always appreciate.

I found that we were not the only ones laughed off the stage. Check out the video at YouTube -

The Prediction by Peter Schiff

In this beautiful little clip, someone has taken the time to pull out all the predictions Peter Schiff, consultant to Ron Paul with a sixth sense in the financial markets, from back in primarily 2006. When everyone else was saying property values would improve, financial stocks were healthy and stable, he was the sole voice of the doom he saw on the horizon. (note the urgency to purchase Lehman, Bear Sterns and Goldman Sachs stock by other talking heads…all of which are either gone or severely hurt by the financial crisis)

This is important, at least in my mind, because this man was tuned into (even more so than we were) to the enormous storm on the horizon. What is he saying about today’s market conditions and prospects for economic recovery?

Peter Schiff – 10.28.08 Part 1
Peter Schiff – 10.28.08 Part 2

I found this discussion illuminating and depressing. I don’t cherish the idea that our current situation may not be coming to an end soon. I had one associate say that they thought the worst would be behind us in the next two months. While I wish this were true, wishing does not make it so. I don’t believe recovery will begin anytime in 2008, let alone in January. This is the warning shot, the word from God to Noah to prepare the ark because the rains are coming. Proper planning and setting expectations for a massive disaster level crisis is better preparation than taking the ostrich approach.

While no one can truly see the future (except maybe John Edwards…but his predictions only deal with your dearly departed wanting you to know where the keys to the safe were hidden before their untimely demise), I believe Peter Schiff has proven with some degree of reliability that he has a clue where we are headed. Take a look and really listen. Let me know what you think.

Either way, batten down the hatches, kids. I think it is going to be a bumpy ride into the foreseeable future.

Market Opportunity for your IRA

laurariffel — Mon, 17 Nov 2008 19:36:56 +0000

Guardant Investments, Inc. is returning over 10% to investors through the Guardant Investment Fund with compounded growth possible through re-investment. Ideal for Self Directed IRAs, the Guardant Investment Fund, LLC is returning OVER 10% to investors even in today’s current market conditions.

What is stopping you from making a change to your IRA? You may have some issues with the current custodian, and some employer plans don’t allow you to take your IRA elsewhere…but what about the rest of you?

Do you have an IRA at a PREVIOUS EMPLOYER? Take a lesson from the employees at Bear Sterns or Enron. Get that money out of there and fast. Even if you don’t chose to self direct, leaving your money with a previous employer is dangerous to your retirement.

In the news every day you hear about people who have to put off retirement due to the amount of money they lost in the stock market. I personally know past clients who have lost over 800K in the recent downturn.

I urge everyone to look at the health of their retirement accounts holistically. To be truly diversified, an IRA should have stocks, bonds, & REAL ESTATE. Even with a small IRA, Real Estate diversification is possible through mortgage or investments funds like the Guardant Investment Fund, LLC. Don’t wait for the market to turn around to do what you should have been doing all along.

If you want to investigate more about self directed IRAs, go to www.penscotrust.com . Pensco has an extensive education and seminar section. It just may get you thinking that this market is not a killer, but an opportunity maker.

My Documents in a Box

laurariffel — Fri, 07 Nov 2008 23:10:48 +0000

I have posted documents regarding the Guardant Investment Fund on Box.net, an online service for document retreival and distribution. The documents are the basic legal documents required to assist an prospective investor in making a decision about the feasibility of the investment.

Included in the document list is also the First Amendment to the Offering Circular. This document is important because of how it modifies the offering. Prior to January of last year, we were limited to 25% of our fund being from qualified funds, also referred to as ERISA funds. The Employee Retirement Income Security Act of 1974, or ERISA, protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire. We changed our offering to allow 100% ERISA funds. It placed more requirements on us as fund managers and more tracking work to be done to assure that no laws against self-dealing were broken even unintentionally.

The reason we made these changes were simple. What better way to prove that the Guardant Investment Fund, LLC is a fantastic option and alternative to traditional investment options through your IRA than to optimize our ability to provide this service? We no longer face the potential of turning away an investor because we have exceeded the 25% typical standard.

In my opinion, this is critical information for the end user investor. So many people have lost a fortune investing their retirement money in the stock market. So many people have not had a choice, or more importantly, DIDN’T KNOW THEY HAD A CHOICE. Self Directed IRAs are not new. They have been around since 1974 when ERISA was originally legislated.

How different would your retirement portfolio look if 20% were invested in real estate (or related assets, such as deeds of trust or the Guardant Investment Fund)? Think about the appreciation of your home in the time that you have had an IRA. I would venture to bet that even with the recent decline in real estate value, with few exceptions most people have realized incredible growth in value. Using Guardant Investment Fund as an example, with a 10% return rate and compound growth available, in 5 years you would have realized a 13% return. In 10 years that would be 17%.

Of course I would like you to take a look at the Guardant Investment Fund as an viable alternative for a portion of your IRA portfolio. I have reached my goal, however, if the idea of Guardant Investment Fund causes you to take a closer look at your retirement account and start thinking about the possibilities. The list of available opportunities is stunning. The list of items you can not invest in with your IRA is much more manageable. You can not invest in 1) life insurance, 2) collectibles, or 3) S Corporations…and even the last option is slowly changing.

Don’t take my word on it. Check out Pensco Trust. They have a phenomenal education section on their website at www.penscotrust.com. They offer webinars, seminars, and customer service second to none. You owe it to yourself to investigate the benefits of self directing.

To see my documents, you may go to my LinkedIn profile at http://www.linkedin.com/in/laurariffel to see the list of documents available under my box.net account or you may go to http://www.trustguardant.com to see the Offering Circular and First Amendment to the Offering Circular. The documents there are by no means comprehensive, but will give you a start on what private placement offerings in the State of California look like.

These securities are being offered and sold only to residents of the State of California pursuant to a permit granted by the California Commissioner of Corporations. The Commissioner of Corporations neither recommends nor endorses the purchase of these securities, nor has the commissioner passed upon the accuracy of the information set forth herein. After reviewing the offering, if interested in more information such as the operating agreement and subscription agreement, please complete the following contact information or call directly, 714-680-0101.