Until recently, bank stocks were considered one of the best and safest investments you could make. That was back when Lenders required a minimum of 20% down and a good payment history before they would lend to anyone for a home purchase. Then starting in the 1970's our Federal Government, with their good intentions of social engineering, started telling banks that “everyone” should have an opportunity to own their own home and pushing lenders to offer loans to good folks, even if they didn’t have money to put down or proof of employment and income. Thus was conceived what was soon to be known as the Sub-prime Meltdown.
Banks operated on a very simple premise: buy low, sell high. They bought their money from folks through CD’s and passbook savings accounts, offering low interest rates. Then they sold high, offering the same money to businesses and homebuyers at substantially higher interest rates. It was a beautiful thing as long as they kept the mortgage principal at somewhere 80% or less, of the actual value of the real estate. But now, more and more people were able to obtain home mortgages so the demand for homes soon outstripped the supply and the natural result was increasing home prices. This was fabulous; home prices were certain to increase forever, so now the hungry banker decided he didn’t need a 20% safety factor on his mortgages and the 100% - 120% mortgage was born. What happened next is evident everywhere. But that doesn’t mean mortgages are not a GOOD investment.
In fact, a properly structured residential mortgage is about as SAFE an investment as you can get. A safe mortgage at 70 – 75% of real market value is protected even if a home’s value slides by 20%. And a homeowner who has 20 - 30% equity position in his home is NOT going to let it get into default, except in extremely rare situations. And if he does, the home will still sell for more than the mortgage, so that mortgage is protected .( www.hiderinvestmentgroup.com
We are currently able to buy foreclosed houses at 30 -50% of CURRENT market value. A private investor who has some cash in an IRA or 401K can actually become the “bank” and loan his funds to us and his mortgage will be protected by a home worth perhaps two times the mortgage. The money is wired to the closing attorney who closes the sale and sends the “investor bank” a Mortgage, Security Deed, hazard insurance and Title insurance policies. It costs the “investor bank” nothing and his retirement account is now earning top interest for the next one to five years.
We can make monthly payments if you desire or, if it is a pension plan, we can just accrue the interest and pay even higher rates, payable at the end of the note. It’s totally up to you, after all you are the bank.
We highly recommend that you convert your conventional retirement account to a ROTH account because everything you earn in that account is not just tax deferred, it is tax FREE. Yes, you will have to pay tax on the money when you roll it into the ROTH but do you really think taxes are ever again going to be lower than they are today? Even after you retire. www.hiderinvestmentgroup.com
Mortgages are VERY SECURE investments!
Until recently, bank stocks were considered one of the best and safest investments you could make. That was back when Lenders required a minimum of 20% down and a good payment history before they...
Added On: 04/28/2009 11:16
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