Loans

Washington, DC, United States (AHN) – American bank JPMorgan agreed on Tuesday to pay the U.S. Securities and Exchange Commission a $153.6 million fine to settle a fraud case filed against the company.

SEC had charged that the bank misled investors in the 2007 sales of a complex mortgage-backed security because it did not disclose to investors that the hedge fund involved in the creation of the collateralized debt obligation was betting the CDO would decline in value.

Robert Khuzami, the top enforcement officer of the SEC, said that JPMorgan promised investors that the mortgage assets of the CDO would be picked by an independent manager who would look out for investors’ interest.

The Chicago-based hedge fund, Magnetar Capital, placed the investors’ $1.1 billion money in the housing market, but by the time the deal close, Magnetar was in a $600 million short position in the CDO betting that it would decline, compared to an $8.9 million long position. The sale took place at the start of the housing market collapse when more homeowners started to default.

With the settlement, investors who lost on the deal are assured of getting all their money back, the SEC said.

Despite the agreement to pay the fine, JPMorgan did not admit or deny fault. None of the bank’s executives or employees was charged, but Edward Steffelin – an outside adviser who helped structure the deal – was charged with civil securities fraud.

The SEC said Steffelin was seeking a job at Magnetar Capital while he was helping the hedge fund select and bet against the housing assets on which the CDO was built, Khuzami said it was JPMorgan’s responsibility, not Magnetar’s, to disclose the conflict of interest on the investment.

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London, England, United Kingdom (AHN) – Britain’s Labour Party called on Chancellor George Osborne to curb the coalition spending cuts because of the economic slowdown the austerity measures caused.

The party cited the major dip in manufacturing and mortgage approvals as proofs of the threat of a double-dip recession. Britain’s purchasing managers’ index went down to 52.1 in May from 54.4 in April. The May figure is the weakest month in about two years, which indicates modest expansion only by the manufacturing sector.

For April, the Bank of England reported that mortgage approvals went down to a four-month low, amid a dip in business lending. Mortgage approvals decreased to 45,166 while consumer credit went up by only $750 million (GBP 500 million).

With these weak figures, the British Chambers of Commerce cut its growth forecast for the U.K. The chamber downgraded on Wednesday its outlook for 2011 to a 1.3 percent growth from 1.4 percent, and 2.2 percent from 2.3 percent for 2012.

In the same week, the Organization for Economic Cooperation and Development cut its 2011 growth forecast for Britain to 1.4 percent from 1.5 percent. The two forecasts are much lower than the 1.7 percent projection by Britain’s Office for Budget Responsibility.

While BCC lowered its growth forecast, the chamber increased its forecast for the country’s inflation rate to 4.5 percent this year from 4.2 percent in March. The BCC predicts unemployment will go up by about 150,000 for the next 15 months.

The BCC explained its revised outlook to inflation and the coalition government’s austerity program.

However, not all the declines were because of the coalition government’s spending cuts. Some of its are because of an extra bank holiday in April and the impact of the Japanese industrial shutdown after the March 11 earthquake.

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photo credit: Graffiti By Numbers

I recently wrote an article about the the best ways to raise private money for real estate Investors where I laid out the top 4 ways to raise private money to grow and develop your real estate investing business. One of the top 4 ways we use and teach to our students is to use group presentations.

A private lending group presentation involves getting 5 to 20 people into a room and doing a presentation where you lay out the details and benefits of your private lending program. This may not be for everyone depending on your comfort level of talking in front of groups, but the advantages of group meetings are very powerful. When people start to ask questions and tell positive stories, a certain level of group think starts to take effect and can be very powerful on the attendees.

We teach our students to focus on the preplanning and marketing, presentation materials and post-meeting follow up as the key to conducting a successful meeting and getting people to invest in your business.

Preplanning and Marketing – We put preplanning and marketing together because they must be done together. (more…)

photo credit: badjonni

One of my newsletter members recently asked if using a list broker was a good source of marketing leads to attract private lenders and, if so, how is it done. The answer is yes but with several precautions.

Precautions

It is important to understand that I strongly recommend that marketing for private lenders is done on a local and low key way. I do not recommend any sort of website advertising or newspaper advertising because it can be viewed as a solicitation to an unsophisticated investor and attract calls from your state’s SEC. You do not want one of these calls!

The SEC and state authorities monitor Craig’s List and other similar bulletin boards for people doing unauthorized advertising for private lenders. (more…)

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When considering financing through a private mortgage lender, you must first locate a private lender with an interest in your particular real estate venture. Private lenders are ordinary people who are willing and financially able to fund your real estate venture by means of their own assets. You can locate private lenders through networking with others in the business, asking for referrals, or making a public presentation to a group of potential private money lenders.

Assuming you have located the private mortgage lender, you will need to set up a meeting to negotiate the terms of the private mortgage loan. Keep in mind that the private lender you choose can secure funds for you through a commercial institution or through personal assets such as bonds, stocks, or cash. You will want to negotiate terms that will present a win-win situation for both you and the lender. (more…)

photo credit: Mike Licht, NotionsCapital.com

If you have tried to get a traditional mortgage, or even a hard money loan, to finance your real estate investments you know how hard it is to get loans in today’s post-credit bubble market. It is even harder to get “no money down” loans for your real estate investing business. If you are using traditional mortgage or hard money loans they can take two or three months to close. The problem you will quickly discover is that sellers are not willing to wait that long and get angry at having to continuously extend their contracts or wait for your loan approval.

Banks and mortgage lenders view mortgage loans to real estate investors as a higher risk than loans to home owners. They believe if the home owner is not living in the property and if trouble hits an investor will opt to pay their own home mortgage first and only pay for the investment loan if they can afford to make the payments. This puts the bank in a very poor position. As a result, most banks are looking for real estate investors to put up 30% to 50% down payment to protect their interest in time of trouble. VERY few investors have this kind of cash so it is very difficult or impossible to do deals with traditional mortgage or hard money loans. (more…)

photo credit: epicharmus

f you are a real estate investor and need funds to finance your real estate deals, or are looking for money to cash out of deals, there is really only ONE option in today’s market conditions. That option is a private lending program where you allow private individuals who have extra money to invest in your real estate investing business.

But with the current popularity of private lending, we are seeing our coaching students and subscribers making a number of mistakes and thought we would highlight the top 4 mistakes and what to do to avoid them when borrowing money from private lenders. (more…)

photo credit: Medmoiselle T

A private mortgage lender is essential to the success of your real estate venture and your business relationship with the lender during the life of the real estate loan. For many real estate investors, working with the right lender means the difference between a sweet deal and a deal gone bad.

Many real estate investors opt to work with private mortgage lenders to escape the bureaucracy involved with the conventional lending process. The global real estate market is competitive and often the speed of the transaction is crucial to the success and outcome of a real estate deal. (more…)

photo credit: lumaxart

Recently I wrote an article about the 4 Ways to Raise Private Money for Real Estate Investors where I laid out the top 4 ways to raise Private Money to grow and develop your real estate investing business. One of the 4 ways we use and teach to our students is one-on-one breakfast meetings.

If you are not comfortable with group meetings – one-on-one breakfast meetings are a great alternative. I generally recommend a breakfast meeting in a quiet restaurant where you can have 30 to 45 minutes of time with your prospect. At these meetings you need to lay out your private lending program and benefits of investing with your company. (more…)

photo credit: lumaxart

Real estate money and access to quick cash is the key for any real estate investor. Having cash to buy properties is the life blood of your investment business. But where does this money come from in the post-credit bubble market place?

Real estate investors are looking for better financing options as the old traditional sources of money are becoming more difficult to find and qualify for than in the past.

Here is a quick look at some of the traditional sources of real estate capital and the pros and cons of each and a new and better source of money in this market place. (more…)