Success is not to be pursued; it is to be attracted by the person you become.
Someone once asked me the question, “How can I have more opportunities come into my life?” It is a good question—but I think my answer might have surprised them a bit.
I bypassed the obvious (and necessary) points about hard work, persistence and preparation. They actually were very hard workers. And they had the great attribute of being seekers, on the outlook. So what were they missing?
Attraction—the most valuable point.
I always thought opportunities and success were something you went after. Then I found out that I needed to turn it around. Opportunities and success are not something you go after necessarily but something you attract by becoming an attractive person.
That's why I teach development of skills. If you can develop your skills, keep refining all the parts of your character and yourself, your health, your relationships so that you become an attractive person—you'll attract opportunity. Opportunity will probably seek you out. Your reputation will probably precede you and someone will want to do business with you.
All of the possibilities are there by working on the philosophy that success is something you attract.
The key is to continue making yourself a more attractive person by the skills you have, the disciplines you have, the personality you've acquired, the character and reputation you have established, the language and speech you use—all of that refinement makes you more attractive.
Personal development is the never-ending chance to improve not only you, but also to attract opportunities and affect others.
Unless you change how you are, you’ll always have what you’ve got.
The latest housing data offers a challenging environment: Fewer people are applying for mortgages, rates are inching upward, the average price of rent is more than inching up, yet mortgage delinquencies are dropping. If anything, the housing market is not boring.
The new Mortgage Bankers Association (MBA) Builder Application Survey data found mortgage applications for new home purchases in July were down four percent from the previous month. The average loan size of new homes decreased from $321,678 in June to $316,995 in July, while conventional loans composed 63.4 percent of loan applications and FHA loans occupied 18.8 percent. The MBA estimated that new single-family home sales were at a seasonally adjusted annual rate of 534,000 units last month, which is an increase of 7.7 percent on an adjusted basis from the June pace of 496,000 units but a 2.2 percent decrease on an unadjusted basis. “Mortgage applications to home builder subsidiaries for new homes declined at a rate in line with the slowdown observed in the overall purchase mortgage market,” said Lynn Fisher, MBA’s vice president of research and economics. “This was driven in part by an increase in interest rates relative to earlier in the spring. Nonetheless the number of builder applications was still up 15 percent compared to a year ago.”
On the other end of the housing spectrum, new data from Zillow determined that renters should now expect to put 30.2 percent of their monthly income toward rent, which represents the highest income-to-housing percentage ever recorded. In comparison, Zillow said that home buyers should expect to pay 15.1 percent of their income towards mortgage payments.
In some major markets, the income-to-housing percentage is rough for both buyers and renters—Zillow cited San Jose, where renters and buyers need to budget about 42 percent of their incomes towards housing. "Our research found that unaffordable rents are making it hard for people to save for a down payment and retirement, and that people whose rent is unaffordable are more likely to skip out on their own healthcare," said Zillow Chief Economist Svenja Gudell. "There are good reasons to rent temporarily—when you move to a new city, for example—but from an affordability perspective, rents are crazy right now. If you can possibly come up with a down payment, then it's a good time to buy a home and start putting your money toward a mortgage."
Zillow added that mortgage payments will continue to be affordable, even in the event of a rise in mortgage rates. And speaking of rising rates, Freddie Mac’s latest Primary Mortgage Market Survey (PMMS) found average fixed mortgage rates on the upswing for the first time in four weeks.
According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 3.94 percent with an average 0.6 point for the week ending Aug. 13, up from last week when it averaged 3.91 percent but considerably lower than the 4.12 percent of a year ago. The 15-year FRM this week averaged 3.17 percent with an average 0.6 point, up from last week when it averaged 3.13 percent but lower than the 3.24 percent of last year.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.93 percent this week with an average 0.5 point, down from last week’s 2.95 percent and last year’s 2.97 percent. And the 1-year Treasury-indexed ARM averaged 2.62 percent this week with an average 0.3 point, up from last week’s 2.54 percent, but below last year’s 2.36 percent.
Sean Becketti, chief economist at Freddie Mac, noted that a mix of factors ranging from a positive July jobs report to the tumult in the Chinese economy to the potential of a September rate hike from the Federal Reserve is creating more than a little uncertainty. “Headed into the fall, we'll likely see continued interest rate tension, with dollar appreciation weighing against possible Fed rate hikes leaving the rate outlook clouded," said Becketti.
If there is any aspect of housing where uncertainty is not present, it would be in the delinquency rate. The MBA’s latest National Delinquency Survey found the delinquency rate for mortgages on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.30 percent of all loans outstanding at the end of the second quarter, which is the lowest level since the second quarter of 2007.
The delinquency rate decreased 24 basis points (bps) from the previous quarter and 74 bps from one year ago, while the percentage of loans on which foreclosure actions were started during the second quarter was 0.40 percent, a decrease of five bps from the previous quarter and the same rate as a year earlier. The serious delinquency rate—the percentage of loans that are 90 days or more past due or in the process of foreclosure—was 3.95 percent, down 29 bps from the previous quarter and down 85 bps from the second quarter of 2014; this was the lowest level since the fourth quarter of 2007.
Marina Walsh, MBA’s vice president of industry analysis, noted that the national delinquency picture is still skewered in regard to how the states handle this aspect of housing. "While only 40 percent of loans serviced are in judicial states, these states account for a growing majority of loans in foreclosure,” Walsh said. “For states where the judicial process is more frequently used, 3.41 percent of loans serviced were in the foreclosure process, compared to 1.15 percent in non-judicial states. States that utilize both judicial and non-judicial foreclosure processes had a foreclosure inventory rate closer that of the non-judicial states at 1.36 percent.”
According to recent data released from the Education Department, 6.9 million Americans are in default on their federal student loans. In other words, they have not made a payment in at least 360 days, which the Education Department defines as the threshold for default. The figure of nearly seven million, which translates to about 17 percent of all federal loan borrowers, is up six percent, or 400,000 borrowers, from this time last year.
The figure does not take into account those who are not making payments, but are below the official threshold for default. Recent data suggests the number of delinquent federal student loans, payments that have not been made in 90 or more days, has increased to 11.5 percent, up from 11.1 percent from last year.
According to the Federal Reserve Bank of New York, the total student loan debt in the US as of March 31, 2015, which includes federal and private loans, stood at a staggering $1.19 trillion dollars, an increase of $32 billion from the previous quarter and $78 billion from one year earlier. This is a larger figure than either total auto loan ($968 billion) or total credit card ($684 billion) balances in the US. WalletHub notes, “Save for mortgages, student loans constitute the largest component of household debt for Americans.”
According to the same WalletHub study, Pennsylvania ranks first on the list of states with the highest proportion of students with debt and third on the list of states with the highest average student debt. California, Oregon and New York are the top three on the list of states with the highest student debt as a percentage of the income-adjusted cost of living. West Virginia has the highest unemployment rate for people aged 25 to 34 and ranks fifth on the list of states with the highest percentage of student-loan balances in past-due or default status.
For those who default, a litany of possible harsh consequences awaits. According to the Federal Student Aid website, some of these include:
● The entire unpaid balance of your loan and any interest is immediately due and payable.
● Your loan account is assigned to a collection agency.
● The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.
● Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This process is called wage garnishment.
The Economic Policy Institute notes, “The cost of higher education has grown far more rapidly than median family income, leaving students with little choice but to take out loans which, upon graduating into a labor market with limited job opportunities, they may not have the funds to repay.”
The EPI explains that from 1983-84 to 2013-14, adjusting for inflation, the cost of attending a private four-year college, including tuition, room and board, and fees, increased by 125.7 percent. The cost of a public four-year college rose by 129 percent during the same time period.
The Economic Policy Institute further writes, “The Great Recession has had lasting effects on employment prospects of young people entering the workforce after graduating from high school or college. Despite officially ending in June 2009, the recession left millions unemployed for prolonged spells, with recent workforce entrants such as young graduates being particularly vulnerable.”
For college graduates, ages 21-24, the unemployment rate, according to the EPI research, currently stands at 7.2 percent, whereas in 2007 it was 5.5 percent. Furthermore, the underemployment rate is 14.9 percent, which was 9.6 percent in 2007. The EPI defines underemployment as “those who are working part time but want and are available to work full time (‘involuntary’ part timers), and those who want and are available to work and have looked for work in the last year but have given up actively seeking work (‘marginally attached’ workers).”
The struggle for the 7 million and counting who have not made a payment on their loans in close to a year is not the result of some character flaw or a sense of “entitlement” that is often ascribed to them, the generation described as “millennials.” The growing student debt crisis is an indictment of capitalism, an economic system that places profit before human needs and strangles the right to an education and the ideals it represents.
Recent reforms to Mexico's mortgage regulations, aimed at making mortgage transfers from one bank to another less costly for borrowers, may hold back the upward movement of lending rates on mortgage loans when interest rates eventually rise, says Fitch Ratings. The reforms encourage lender competition and limit the benefit of higher net interest incomes that normally accompany rising interest rates.
Mexico's reforms were enacted in January 2014 under the Law of Transparency and Promotion of Competition within Guaranteed Credit, which took effect Aug. 20. The timing of the effective date is relevant because although the eventual US rate increases are expected to have a positive knock-on effect for upward pressure on Mexican domestic mortgage rates, we expect a slower and smaller magnitude response versus pre-reform.
Mortgage transfers have been possible in Mexico, but their high costs have deterred most customers from choosing to transfer in order to obtain a better rate. When customers did make transfers, banks could not reasonably count on winning most of those customers' banking business, as they tended to stick with their original lender for nonmortgage business.
Mexico is hoping that better transferability of mortgage loans will result in competition that aids home affordability across the market. Mexico's mortgage borrowers (especially bank customers) have exhibited relatively low delinquency rates and a good history of growth, albeit from a relatively small base. Mortgage loans are typically granted to customers with ample positive credit history who have demonstrated strong payment ability. Thus, with loan demand from enough good customers remaining solid, more lenders may be drawn to the market.
The average interest rate on mortgage loans offered by banks has fallen to 10.59% as of June 2015 from an average of 12.80% in 2008. A more comprehensive measure of mortgage expenses, including interest rates and fees (a mortgage's total annual cost) dropped to 13.15% as of the end of June, about 0.17% lower than year-end 2014.
Fitch expects Mexican banks to continue achieving fair growth in mortgage lending as slower increases in rates should keep mortgage rates competitive for borrowers. Sustained growth will also depend on the banks' abilities to maintain attractive margins amid more restrictive liquidity rules aimed at encouraging more long-term funding to mitigate asset-liability tenor mismatches.
Most every borrower knows that CMBS Lenders are very restrictive regarding what they will allow a borrower to do with their property or loan, once it is securitized, but few borrowers actually know why.
CMBS loans are governed by statutes called REMIC (Real Estate Mortgage Investment Conduit) law(s). A REMIC is a “Securitization” pool--a group of loans put together for the purpose of serving as collateral for investment grade bonds issued and traded on Wall Street. As such, the IRS views a securitization as an investment vehicle, NOT a large pool of commercial mortgage loans. The IRS created tax laws (primarily 26 U.S.C. §§ 860A–860G of Part IV of Subchapter M of Chapter 1 of Subtitle A of the Internal Revenue Code) related to REMICs that restrict changes to the collateral for the bonds that would be deemed to increase risk on the bonds.
Since the IRS is in the tax business and NOT the commercial real estate business, many of the REMIC provisions make sense for investments, but NOT for commercial properties. Many times, actions that would make sound business sense from a real estate operating standpoint are prohibited. Violation, by the Loan Servicer, of REMIC statute(s) could result in the loan being declared a “disqualified mortgage”, which can result in HUGE tax implications to the investors. NO CMBS loan servicer will ever consent to an action that could give rise to the possibility of a violation of REMIC statute. That is viewed as the “Cardinal Sin” in the servicing industry.
So, in some instances, though a request from a borrower to a CMBS lender to take certain actions make perfect business sense, the lender has no choice but to decline the request.