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A Monthly Newsletter Source of Financial Sources • What Investors Do Not Know About the Cost of Investing Can Hurt Them • Take Control of Your 401k Investment Options; Consider the In-Service Rollover Strategy • Recent Market Losses and Uncertainty About Pension and Job Security Require an Extensive Re-evaluation of Plans for Retirement • Divorcing? Avoid These Ten Financial Blunders • Domestic Partners Finally Gain Family Status in Maryland, Sort Of • What is the Status of Commercial Real Estate Now? • Consumer Action is Required to get the “Making Home Affordable Program” Working ---------------------------------------------------------------------------------------------------------------------------- What Investors Do Not Know About the Cost of Investing Can Hurt Them. One advisory firm is pulling the curtain back on how investment management is practiced by brokerage firms, mutual funds, and many advisors. NS Capital LLC, a registered investment advisory firm with offices in Stamford, CT and Sarasota, FL, puts investors first, which you would think is an obvious statement, but it’s not. NS Capital has gone to great lengths to cut out middlemen who add no value and eliminate the layers of fees that are typical of mutual funds and the brokerage firm platforms that distribute them. This allows NS Capital to offer affluent investors a better investment portfolio at a fairer price. “In the case of fees,” says Dave Moran, Managing Partner for Advisory Services at NS Capital, “what you don’t know can hurt your performance.” Moran points, as an example, to the Summary of Additional Information (SAI) that is a required but separate document from the mutual fund prospectus. It is in the SAI, often three times as large and even harder to read than a prospectus, that a determined investor can see the myriad fees that are paid in the name of Research (soft dollar arrangements), Marketing Support (12b-1 fees) and Revenue Sharing (pay to play). These terms refer to the fees paid back and forth between the mutual fund companies and the brokerage firms that sell the funds. Soft dollar arrangements cause the mutual fund to direct trades to the contributing broker-dealer – trades that are often anything but best execution. The point being, when securities are bought and sold the transactions take place with a particular BD that is supplying the soft dollar compensation, there is no incentive to search out the best price. The term “12b-1 fee” refers to a law that allows mutual funds to deduct fees from their own clients’ assets to defray marketing and advertising costs. Last year, $13 billion was collected by mutual fund companies in 12b-1 fees, but only 5% was used for marketing. The other 95% was an ad hoc sales commission that was paid directly to brokerage firms and advisors to push the funds. Last but not least is “pay to play”, a practice that allows mutual funds to buy preferred positions on the brokerage platforms that are distributing the funds. Collectively these practices create enormous conflicts of interest that can have a negative effect on the returns investors receive. Moran wants investors to understand two things, first, is that the single best way to improve investment returns is to make sure you are receiving value for the fees you are paying, and second, to work with an advisor who is a representative of the investor and not the distributor. Over 90% of all “advisors” are registered representatives of a broker dealer, an “employee” as compared to an independent provider of objective investment advice. Ninety percent of all mutual funds assets are managed by the top 50 companies and the majority of those are public or owned by public companies. These organizations have demonstrated time and again that their loyalty is to profits for shareholders as opposed to stewardship of assets for investors. You need to look no further than the performance of the stock of the companies as opposed to the performance of the underlying mutual funds. NS Capital offers a blended portfolio that combines passive, active and alternative investments in an intelligent and understandable way. Moran says most retail investors do not understand the importance of blending both passive and active management in an investment portfolio. He says “Pay active managers where they add value, and not when they do not.” The difference in cost between a well-constructed index fund and a bloated large cap mutual fund can be as high as 1 1/2 to 2%, a difference that can have a huge impact on the investors’ returns over time. NS Capital is setting a new standard that is committed to creating portfolios that combine the best of both passive and actively managed strategies in order to deliver a better portfolio at a lower cost, something the retail investing public has not seen in a long time. Dave Moran, CFP, is the managing partner for advisory services at NS Capital LLC. The firm has offices in Stamford, Ct., and Sarasota, FL. He can be reached at dmoran@nscapllc.com or 866-676-6002. Take Control of Your 401k Investment Options; Consider the In-Service Rollover Strategy Consider Tom Wilson of Denver, Colorado. At age 62, Tom does not plan to retire for another five years until his wife Brenda qualifies for social security. Regardless, Tom was able to transfer nearly all of his $700,000 employer 401(k) balance into an individual retirement account (IRA). This is a big idea at a time when employees are seeking alternatives to their otherwise captive pool of mutual funds. Many profit-sharing and 401(k) plans allow for distributions to be made before a triggering event occurs (termination from employer, hardship withdrawal, etc.). The strategy does not require these triggers, and can provide employees access to a broader range of stocks, bonds, and other investment options not available in employer plans. In recent years, the use of this option has grown. Employer 401(k)s have been challenged for a lack transparency, limited investment options, higher-than-published fees, and more recently lackluster performance. The In-Service Withdrawal strategy is the best of both worlds: remaining with the same employer, making annual contributions. and receiving employer matches (if applicable), while self-directing the investment selection. When exploring the In-service rollover strategy, consider Employers and 401(k) plan administrators don’t have to advertise the in-service rollover option to employees. When asked, most administrators do not understand this strategy even if outlined in the Summary Plan Description. Most workers 59 and a half and older, and even some younger ones, can roll over 401(k) funds while they're still working and contributing to the plan. The plan must specifically state whether the strategy is allowed within the plan. This information can generally be found in the Summary Plan Description. If you hold part of your employer's stock in your 401(k), there my be a more suitable, tax-efficient strategy called the 72t. So if there is employer stock in your 401(k), check with your plan administrator and your tax adviser. The In-Service Withdrawal option isn't right for everyone. But in some cases it can provide more attractive investment choices, a better way to leave money to your beneficiaries, or even a chance to move 401(k) dollars directly into a Roth IRA in 2010. Rich Arzaga is Founder and President, Cornerstone Wealth Management, San Ramon, California, a life planning company specializing in providing options and solutions for residential and commercial real estate investors. He is also an instructor in the nationally-recognized financial planning certification program at U.C. Berkeley, and teaches the highly-acclaimed Real Estate Investments course at U.C. Santa Cruz and U.C. Berkeley. Rich can be reached at rich@consultrich.com or toll free (888) 290-9900. Securities and Investment advice through Associated Securities Corp. (ASC), Member FINRA/SIPC and a registered investment advisor. Additional Advisory and Investment Services offered through Cornerstone Wealth Management Inc., a registered investment advisor not affiliated with ASC. CA Insurance License No. 0D92796 Ink&Air --Editor: Lisbeth Wiley Chapman, beth_chapman@inkair.com , 508-479-1033 Recent Market Losses and Uncertainty About Pension and Job Security Require an Extensive Re-evaluation of Plans for Retirement Financial losses have been deep and across the board. As painful as the market losses were at the beginning of this decade, at least people could rely on the continually increasing value of their primary residence. This time around the home may be dropping more in value than the investment portfolio. Adding to retirement anxiety is the uncertainty surrounding many pension accounts. Normally, you could simply bank on the monthly pension check, but with major companies going into bankruptcy, a real danger exists that a pension may be reduced to dimes on the dollar. Another real danger is that you could lose your job altogether. Instead of losing sleep over what has happened or what†may happen, those people looking to retire in the next one to five years should immediately evaluate their current position. It is vital to have a clear picture of†current expenses and potential retirement expenses. It is not sufficient to round amorphous spending to the nearest $1,000. Once you identify current spending and retirement spending goals, you can look at current assets and expected income sources at retirement. If your retirement goals don't match up with your estimate of retirement income, you need to change your inputs. One major input is expenses; you can scour your spending to find areas that aren't necessities or represent low personal priorities and cut them.Another input is pushing back the age of retirement. This option is probably the least popular, but must remain on the table. Another option is partial retirement or retirement followed by new full or part time employment. Other options can include taking Social Security earlier or increasing the draw down from qualified plans, but these options carry significant risks of providing near term income but long-term poverty. Find out where you stand and make decisions that are in your best interests. The worst option is to do nothing, but fret. Donald L. McCoy, J.D., CMFC -- Planners Financial Services, Inc., 952-835-9000.Ü Minneapolis, Minnesota. Registered investment adviser and subsidiary company Montgomery Investment Management, specialize in the management of no-load mutual fund portfolios for individuals and retirement plans designed to protect capital by reducing risk. 952-835-9000 - pfshim@usinternet.com. Divorcing? Avoid These Ten Financial Blunders Divorce is an extraordinarily stressful event for all the parties involved, and the heightened emotions often result in settlements that are less than optimal for one or both parties. Those considering divorce should work to avoid some of the most common financial errors made by divorcing spouses, both male and female:
Darlene Murphy, CFP, Sudbury Wealth Management, Sudbury, Mass.,is a registered investment advisor focusing on holistic financial planning and investing. 8220 or www.PartnerPlanning.com. She can be reached at Darlene@SudburyWealth.com or 978-440-8776. Domestic Partners Finally Gain Family Status in Maryland, Sort Of. Estate, tax, and financial planning have always been complex issues for unmarried or domestic partner (DP) couples, and will remain so, even as individual states take small steps to improve the treatment of unmarried couples. On July 1, 2009, Maryland took a step forward for domestic partners by passing a new law that provides that domestic partners (whether same-sex or not) are exempt from paying inheritance tax on their jointly-owned home. Couples who qualify as domestic partners and own homes jointly in Maryland can protect a percentage of the value of the house in inheritance tax for the survivor “on the privilege of receiving property that passes from [the] decedent.” For example, if the house were worth $500,000, the inheritance tax savings could be as much as $50,000. Haste to Lower the Inheritance Tax Costs Could Cause a Gift Tax Liability. There are several ways in which domestic partners may own their primary residence. Among the many possible ways to hold title, a DP couple may hold title together as joint tenants with rights of survivorship. Alternatively, one of the two may own the home in his or her name individually. The dilemma for a DP couple where one of the domestic partners owns the home individually, is that a gift tax liability could result if they attempt to create a joint tenancy with rights of survivorship. When an individual transfers property to another person as a gift, federal gift tax is levied on the value of the gift. Depending on the value of the residence, this new exemption could look very attractive to some DP couples. For others, though, qualifying for the Domestic Partner Exemption could be an expensive proposition if the home is not correctly titled. Currently, Maryland law levies an inheritance tax of 10% on the “clear value” of property passing from the decedent to another person. The law also provides a number of exemptions to the inheritance tax. Simply stated, the inheritance tax is waived if the deceased person’s property passes to the decedent’s grandparent, parent, spouse, child or child’s spouse, lineal descendant of a child or such lineal descendant’s spouse, sibling or a charity with ties to Maryland or DC. The new law adds domestic partners to the existing list of exemptions. This new “Domestic Partner Exemption” provision states that if the domestic partner of a decedent provides evidence of the domestic partnership, the inheritance tax does not apply to the receipt of an interest in a joint primary residence that, at the time of death, was held in joint tenancy by the decedent and the surviving domestic partner, and passes from the decedent to or for the use of the domestic partner. Maryland law provides detail on how a couple may qualify as domestic partners. If otherwise qualified to be domestic partners the couple need only sign an affidavit establishing the domestic partnership. Absent the affidavit, the surviving domestic partner can show that a domestic partnership exists through proof of the couples’ economic interdependence. What is Joint Tenancy? If a domestic-partnered couple (“DP couple”) currently owns their home as joint tenants then they naturally fall under the Domestic Partner Exemption. However, if a DP couple does not own their Maryland residence as joint tenants, then they apparently do not qualify under the Domestic Partner Exemption despite being domestic partners. This may even be the case if the couple holds their home in a joint revocable trust or jointly between two revocable trusts, both of which are common estate-planning techniques. This being the case, DP couples may have to choose between good inheritance tax planning, conventional estate tax planning, and asset protection planning. There is certain to be much confusion on this point. As a result, we are generally advising clients who are DP couples with their primary residence in Maryland to consider deferring the transfer of their primary residences into trusts, unless doing so would result in a higher estate tax liability. Many other variables also affect a couple’s decision in this regard. Narrow Exception for Domestic Partners. The Domestic Partner Exemption applies only to the primary residence of the domestic partners. The exemption does not extend to a DP couple’s other assets, such as retirement plans, bank accounts, cars or jewelry. For those items, the survivor still must pay Maryland 10% of the value of those assets. Married couples enjoy an unlimited exemption of inheritance tax on any and all property passing between one another. A DP couple should work closely with their financial and legal advisors to conduct a cost-benefit analysis to determine if re-titling the residence into joint tenancy with rights of survivorship is advantageous for them.
Lawrence S. Jacobs, Esq and J. Max Barger, are attorneys with the firm of Lawrence S. Jacobs & Associates, P.C., in Rockville, MD and McLean, VA. They focus their practice on working with the LGBT community's estate planning issues throughout the Washington, D.C. Metropolitan Area. They can be reached at LSJ@lsjlaw.com, or JMB@lsjlaw.com, 301-738-8220 or www.PartnerPlanning.com What is the Status of Commercial Real Estate Now? It would be really helpful if we could know for sure, and with clarity, the status today of commercial real estate. There are three choices:
Last year a collapse in single family home financing almost wiped out our entire financial system, American banks, Swiss banks, investment banks, private equity funds, university endowments, your barber’s 401 k, Lehman Brothers, Wall Street, Main Street. “It took the (asset management) industry three years to generate more than $10 trillion between 2005 and 2008, and only six months to lose it all,” according to the Cerulli consulting group in Boston. Commercial real estate may be the next ticking bomb. There are about $1.3 Trillion in mortgages on commercial and multi-family US real estate that will balloon over approximately the next 48 months. About a quarter of that was financed through Commercial Mortgage Backed Securities (CMBS) and except for giant REIT borrowers the CMBS market is still pretty much toasted though the Fed is trying to kick start it. Banks are hoarding cash, pressing their clients to pay down loans. The analyst world’s best guess is that about a quarter of that $1.3 Trillion is already so far under water that only Jacques Cousteau could find it. Last year commercial real estate values were down 15%, even more than residential home valuations. The decline in home prices seems to have slowed but the problem with commercial values may have just begun. The current recession has cut employment, which affects office space demand, retail store spending, and the other forces that drive commercial rents. Declining rents are only part of the problem, reduced cash flow means property values are down. As a result operations today dictate that if a lender (and his regulator) now want an existing mortgage to be no more than 80% of today’s value, they probably need the loan to be smaller than it was 5 or 10 years ago when it was first made. A second issue is that lenders and regulators are becoming more conservative. Only 18 months ago, lenders were frequently loaning up to 75 or 80% of value on a first mortgage. Sometimes subordinated debt would take that up to 90% or even more. Today that same first mortgage lender, if he’s still alive and lending, probably doesn’t want to lend more than 50 to 60% of today’s value. The second mortgage lender if there is one is deciding whether to value his asset on his books at 10 cents on the dollar or maybe 50 cents. If he’s regulated, the Feds wish he’d just sell it to someone who isn’t. Third, given the dramatically reduced funding available for investments of all kinds., less money chasing more deals means prices to get the money rise. The capitalization rates investors are willing to pay for that reduced income stream are higher and that makes values lower. The result is that a borrower may be paying on time, but even so when the mortgage needs to be rolled over it may need to be paid down because the mortgage balance is more than a bank is willing to lend today. Often the balance is so much the more than today’s value that the regulators are giving the banker the evil eye. The bankers call these loans “performing, non-conforming.” What the borrower who has been working very hard to pay the loan for ten years calls his once friendly banker is another question entirely. To take an over-simplified example, these repeated adjustments can really whack valuations. As mortgage money remains hard to come by, each foreclosure sale by a lender tends to trigger a drop in valuation. Each drop in valuation makes the next foreclosure sale more likely. Here’s an example we’ll call Hypothetical Towers. It was underwritten in 2005 rents, had some rent increases for a year or two, but today, finds that the climate has pushed rents back to their original levels. This table also assumes that cap rates have changed and the regulators are pushing for far more conservative loan to value ratios:
In 2005 an investor in Hypothetical who put up $2,000,000 in hard-won equity against a valuation of $10,000,000 could reasonably have thought he was being reasonably prudent. In 2009 the bank thinks the value is $6,875,000 so they want the owner to make a cash pay-down on the mortgage of $3,875,000 in new money. But at a valuation $6,875,000 less a new mortgage of $4,125,000 the equity today is only worth about $2,750,000! Why would an investor ever pay $3,875,000 to get something that’s only worth $2,750,000, particularly if you believed valuations were still dropping and you might be able to buy a similar asset much more cheaply in a few more months? It’s not just Hypothetical Towers though; in Boston the very real John Hancock Tower was bought in 2006 for $1.3 billion. In May of 2009 it was foreclosed and sold at auction for $660 million. Real Capital Analytics reports that in the New York Metro area alone there is a total of $9.7 billion in troubled commercial real estate loans. Las Vegas has almost as much -- $9.4 million. Nationally the problems run across all markets and property types. Retail has been hit worst nationally with $31.1 billion of distressed assets. The increases have been troubling across the board so far this year. The pool of distressed retail is up 133%, hotels are a smaller pool but increasing faster as the economy sags, defaults are up 216%. The office property default rate is up 118%. The future is also scary. Real Capital Analytics divides the problems into two categories. The “Distressed Properties,” category in addition to foreclosures and properties where the owner has tended a deed in lieu of foreclosure include loans that are delinquent, in default, under foreclosure, have an owner or GP in bankruptcy, are beyond their maturity of have been taken over by a mezzanine lender. RCA calculates that there are $25.7 billion already in this basket. A larger pool of “Potentially Troubled” loans looms behind that already troubled group. It includes properties where the loan is maturing, the owner is financially troubled, there has been a failed conversion or redevelopment, the tenant is bankrupt, the development has become troubled or the loan is known to be underperforming or overvalued. That pool is a staggering $80.9 billion of issues waiting to be resolved, complete with worried bankers. Imagine their regulators looking though their rimless glasses over the bankers’ shoulders. They are saying “tsk, tsk.” The bankers, already overworked and a bit paranoid could justifiably be nervous. Signs the bottom may yet come. The impending overhang of properties needing refinancing is scary. According to The New York Times “The Real Estate Roundtable sees a rising risk of default and foreclosure on an estimated $400 billion in commercial mortgages by all lenders that come due this year.” Just as has happened with single-family residential mortgage loans, foreclosures trigger reduced valuations, and under pressure from regulators those reduced valuations cause a bank to need deeper pay downs of principal. That in turn causes more foreclosures. A vicious cycle. There is an estimated $524.5 in commercial mortgages on the books of just this country’s Federally insured banks that will balloon in the next four years. A quarter of them are estimated to be under water today, if many of them go to foreclosure values will drop even more sharply. Signs that it’s a good time to bet things are getting better. REIT prices, which dropped faster than the DJI, S&P and other broad indices last year have bounded back faster than anyone could have forecast. The second quarter of 2009 posted a 27% increase in REIT prices, the best in the history of the NAREIT index. Analysts say that boom was due to the fact that the market now believes REITs are able to roll their debt over. Signs it is still in a state of great flux. REITs, though, have typically been less than 50% leveraged and the good ones have access to more capital by selling shares. In the last ten tears typical private market loans have been in the 70% leverage range and many have reached 80 and 90%. Most borrowers don’t have the option of selling shares to the public. According to Real Capital Analytics there are already $107 billion in commercial loans that are delinquent or in foreclosure. Until we have a better idea of how much pressure the regulators will be putting on which institutions to write down or sell their existing loans, customary supply and demand analysis will be a bit irrelevant. In baseball a great pitcher on his good days typically gets a more lenient strike zone from the home plate umpire than a rookie who throwing wildly. It’s not fair but it happens in the real world. Traditionally Federal regulators give more slack to the banks they approve of and less to the ones they don’t. Clearer accounting rules could help a lot but they aren’t easy to write and even if they were promulgated the Fed standing behind home plate will be calling the balls and strikes. As with the umpire, appeals are rarely heard. How investors might want to play it. In the last great real estate collapse, between 1989 and mid-1995, the Federal Government bit the bullet and regulators just about ended the S&L industry. They founded the Resolution Trust Corporation that closed or otherwise resolved 747 thrifts with total assets of $394 billion. In the process they had to set up a huge bureaucracy to manage the properties they foreclosed, employed thousands of consultants. In disposing of the properties they made a great number of rich Wall Street bankers a good deal richer. In what one insider called “the greatest transfer in history of assets from one balance sheet to another” firms such as Goldman Sachs and their affiliates bought huge pools of property at great discounts. The FDIC handled billions more in foreclosed property from commercial banks. Those investments were almost never available to average investors; the property pools and major asset sales were typically restricted to the Blackstone Group and similar players who had the liquidity, the expertise and the political connections to get the deals done. The availability of these properties at bargain prices was however a major factor in the explosion of the publicly traded equity REIT market from $5.6 billion in 1990 to over $134 billion at the end of the decade. A canny investor who bought into a good REIT like Weingarten or Kimco in the early 90s would have done very well indeed. It’s not yet clear what stance the regulators will take this time around. Medium sized regional banks made many of the good commercial loans, but the people running the Fed and Treasury are mostly alumni of the big Wall Street banks. The banking industry is reported to be spending lobbying money in DC at over $1 million a day. While commercial mortgage defaults are up sharply, foreclosures are not yet. Banks seem to be more patient with commercial defaults than they have been with single-family homes, partly because they don’t have the staffs to run the assets if they did foreclose. What is the play now? REITs? Buy CMBS? Vulture funds? Private Equity Deals? Banks with undervalued loans (go long), banks with hidden balance sheet troubles (go short)? It is probably too early to tell, but it’s the right time to start looking. In the process keep a close eye on the regulators, they control the brake pedal, the accelerator, the calibration of the speedometer and they get to wait to decide what the speed limit was until after you pass through their radar gun. http://www.financial-planning.com/news/commercial-property-weakness-2663178-1.html http://www.nytimes.com/2009/01/05/business/05real.html?_r=2 Michael Dowd is Managing Director of Equity Research Collaborative, consultants to real estate investors and financial institutions. He can be reached at 781-893-4119 and at DowdBoston@aol.com Consumer Action is Required to get the “Making Home Affordable Program” Working It is time to review the progress of the “Making Home Affordable Loan Modification” program. What is the “Making Home Affordable Loan Modification Program” (“MFA”)?
Has MHA program worked? Yes and no. Many more loans need to be modified. A few loans have been modified and there are indications that banks are beginning to modify home loans rather than foreclose. What are the facts? Home prices are down sharply and many homes are worth less than the loan amount. The average U.S. home price is down 33% and some as much as 50% since 2005/2006. Dallas and Charlotte are the best housing markets in that home prices are only down about 10% from the peak while Phoenix and Las Vegas are down more than 50% from their 2005/2006 high. The Case Shiller index illustrates the magnitude of the residential home price decline. The index was at 110 in 1999; it peaked at 210 in 2006; is now at 140; and is expected to go back down to 110 (ouch) before prices recover. The experts project more pain; the CS index at 110 takes the $400,000 home in 2006, now $260,000, and finally down to $210,000 which is where it was priced in 1999. Many of the 2005/2006 home loans were originated at 100% of value at the time of purchase if you include the home equity loans in the calculation. Many homeowners are now unemployed or earning much less than before. If you have no income or not enough income, then you don’t qualify for a loan modification under MHA. And, it is more difficult for the self employed to qualify. How about the Banks? If a bank forecloses, then, the bank or lender will normally lose (1) the amount that the mortgage exceeds the value of the home plus (2) additional 20% of the mortgage amount. That is a lot of money. Many banks capital would be impaired if they foreclosed on all their past due home loans and actually took the losses. Consequently, the banks are pretending, aided and abetted by their regulators, that their real estate notes are worth more the amount of the loan. The critics of the system call this “pretend and extend”. This should not come as a surprise, the banks and regulators have gone through this dance in every recent banking crisis. The Fed lowers the bank’s cost of money by several percentage points enabling the banks to earn huge amounts of money. The banks use the earnings to increase loss reserves. When real estate prices begin to recover the banks use the increase in real estate prices coupled with their added loan reserves to sell or settle the loans without additional loss. The MHA program, in addition to helping homeowners, is part of the delaying process. It gives homeowners a chance to earn enough money to make their house payments while giving home prices time to recover. This is the only real chance for many homeowners and their banks to recover. What are the Banks doing in the meantime? Many of the banks are slow in getting their act together. They are overwhelmed by the deluge of modification requests. Many have not developed a loan modification program and they have not told their employees what they intend to do with their problem loans. Then the employees mislead the customers. Banks are an important part of our culture. They are community leaders in small town America. In many cases, the bank’s behavior is irresponsible and they blame their customers for their inability to cope . It is unacceptable customer service for an important community institution. Here is what has happened in a loan modification negotiation between a homeowner and Countrywide Bank; now a division of Bank of America.
This Countrywide/Bank of America conversation is just one example of what is going on between servicers and homeowners all over the country. The truth is that servicers do not have the staffing, expertise or motivation to keep up with the demand from homeowners who want their mortgages reworked so they can stay in their homes. The servicing divisions of the major banks do not understand the importance of loan modifications to their employer’s financial health and their job security. Banks should act like bankers and not like a gang of used car salesmen We are in the middle of a huge crisis for both homeowners and the lenders. For the good of everyone, it is time for the banks to act honorably and responsibly, it is time for the regulators to use common sense, and for congress, the states, and the administration to take charge. What should we do? Write your senator and congressmen and tell them to pay attention to the modification mess. Ask your state, whose laws govern foreclosures, to require banks to have a modification/mediation plan as a condition of filing a foreclosure action. Write the 20 largest banks in the U. S. and tell them how dumb and irresponsible they look as they dodge the reality of this housing crisus and blame others for their inaction. William G. Campbell, President of RPC Group, Little Rock, AR, has spent his career structuring real estate projects for financial planning and brokerage firms, and serving as the chief financial officer at corporations.† He has worked on hundreds of projects that required debt negotiation and debt modification for highly complex real estate transactions. In these roles he helped corporations stabilize their financial relationship with their major shareholders and lenders, and directed the reorganization of the accounting and legal divisions of businesses. He has helped high net worth individuals organize their real estate holdings to preserve income, save taxes, and reduce their debt.† In work with a major international bank, Campbell analyzed the financial statements of the banks holdings, particularly its REIT portfolio, to enable the firm to build a defensive portfolio of high yielding securities with strong balance sheets for clients seeking income and safety. Given the current mortgage turmoil, Campbell has turned his energy to assisting homeowners with home mortgage refinancing or modification under the "Making Home Affordable" program. He can be reached at 501-225-1211 or wgc@therpcgroup.com. Brad Thompson, CFA, New Chief Investment Officer at Stadion Money Management, Directs $1.5 billion in Assets Under Management WATKINSVILLE, GA – Brad Thompson, CFA, has been named Chief Investment Officer at Stadion Money Management, Inc., Watkinsville, GA, according to President Jud Doherty. The firm currently has $1.5 billion in assets under management. In his former role as Senior Vice President, Portfolio Management, Thompson directed the Stadion portfolio management department. His promotion to CIO is recognition of the phenomenal leadership he has provided to Stadion’s investment department since his arrival. “Brad brought us more than 20 years of management experience when he joined Stadion in 2006, and clearly he has the judgment, leadership, and insight to manage our successful and top performing investment strategy going forward,” says Jud Doherty, President. Thompson is a CFA charterholder. He also earned a Bachelor of Business Administration Degree in Finance from the University of Georgia. He is a member of the CFA Institute and the Bermuda Society of Financial Analysts and also holds the Chartered Retirement Plan Specialist Designation. Prior to joining Stadion Money Management, he served as the Chief Investment Officer and Chief Financial Analyst for Global Capital Advisors. |
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