The Consumer Financial Protection Bureau

There is a brand new Federal bureau that will begin overseeing real estate mortgage loans on October 3, 2015.  It will have an enormous impact on mortgage financing and the residential real estate industry.  This new agency is totally autonomous and answers to no other Federal agency.  The areas of responsibility of this new agency include:

  • Writing rules, supervising lending companies and enforcing consumer financial protection laws
  • Restricting unfair, deceptive or abusive acts and practices
  • Taking consumer complaints
  • Researching consumer behavior
  • Promoting financial education for consumers
  • Monitoring financial markets for new risks to consumers
  • Enforcing laws that outlaw discrimination and other unfair treatment in consumer finance

The new organization was initially created in 2011 and was established with the watch care of Senator Elizabeth Warren (D-Mass).  Here are ten areas where consumers and mortgage lenders will observe the oversight of the CFPB.

  1. Mortgage lenders will no longer be able to push consumers into a high priced mortgage loan. Heretofore lenders were allowed to direct borrowers toward high interest rate loans, even if they qualified for a lower cost mortgage loan.
  2. Now homeowners are less likely to find themselves in a foreclosure situation. In the past lenders sold home buyers “No Docs” mortgages and often did not require borrowers to show proof of income, assets or employment. The CFPB has clamped down on such irresponsible lending practices and now will require mortgage lenders to verify the borrower’s ability to repay the loan.
  3. For borrowers who become delinquent on their mortgage payments, loan servicers will have to try harder to help the consumer avoid foreclosure. In the past mortgage servicing companies often offered delinquent borrowers various options to avoid foreclosure.  At the exact same time such loan servicers were simultaneously working to perfect their foreclosure.  Under the CFPB’s new authority, loan servicers will face large civil penalties if they fail to provide consumers accurate mortgage records, and must promptly notify borrowers if their loan modification applications are incomplete.
  4. Borrowers can now get low cost services of a home loan counselor. Most mortgage lenders are now required by the CFPB to provide applicants with a list of free or low cost housing counselors who can inform borrowers of the possibility that they are being ripped off by their lender.
  5. Borrowers with high-cost mortgages can obtain an appraiser’s opinion. Lenders who sell high rate mortgage loans are now required by the CFPB to obtain an outside appraisal to determine the value of the home.
  6. Fly-by-night companies in the lending business will be scrutinized and held accountable. Part of the CFPB’s authority will be to oversee debt collectors, payday lenders, and other under-regulated financial institutions.  Fines for malpractice can be severe.
  7. Customers scammed by credit card companies may receive refunds. In October 2013 the CFPB ordered three American Express subsidiaries to repay some 250,000 customers $85,000,000 for illegally charging fees to customers.  These scam practices included misleading credit card offerings, age discrimination and excessive late fees.  More recently the CFPB fined JP Morgan-Chase $309,000,000 for levying similar unfair penalty fees to their customers.
  8. Student loan lenders also face scrutiny. The CFPB will oversee private student loan servicing practices by big banks to ensure compliance with fair lending laws.
  9. Members of the US Armed Forces to get extra protection. Recently, the CFPB ordered US Bank and their partner Dealers Financial Services to refund $65,000,000 to service personnel who had been charged fees on automobile loans which were not disclosed up front to such military service personnel.
  10. Consumers can cry for help. The CFPB has a division dedicated to hearing customer complaints related to any practice the consumer considers unfair. 

The CFPB has enormous power to police and oversee lending practices of almost every lending entity including real estate mortgage loans, auto loans, student loans and credit card loans.  They define what malpractices are and have the power to levy huge fines to those who violate Fair Lending Laws.




Land values in Collin and Denton Counties Texas have skyrocketed.  Prices have escalated to levels as high as $55,000/acre for parcels located near Weston, TX (North of Hwy 380/west of US 75).  They are as high as 30,000/acre north of Hwy 380 and east of US 75.

Joyous Problem.  Consider a couple owning a 20 acre tract of land, north of 380 and west of US 75.  This parcel might sell in today’s market for $1,000,000.  The couple may have purchased the tract 12 years ago and have a current tax bases of only $180,000.  A sale today may mean a capital gains tax of 15% of the capital gain, and may be as much as $100,000.  If sold for cash, the investor couple may put their net cash equity (after capital gains tax) of $770,000 in their local bank account.  Exciting to consider, but a financial disaster.  Their local friendly bank will only pay them 0.75%/annually or $5775 per year interest.  That’s not much.

As an alternate, let’s consider that with the help of a professional realtor, the couple arranges to acquire twelve single family homes located in North Collin County, all priced at $300,000 each, and all requiring a 20% down payment of $60,000 per house.  By structuring a 1031 Tax Deferred Exchange into the twelve homes, they can defer all capital gains tax (about $100,000) and use such funds for opportunities of choice (including a week’s vacation in Hawaii).

As far as the future is concerned, we believe these 12 single family homes will appreciate by $30,000/yr (each home) or a total appreciation of almost $1,000,000 over the coming three years.  We also believe the couple can enjoy a positive cash flow significantly higher than a bank would pay.

In Collin and Denton counties we are enjoying an unprecedented seller’s market for single family homes. Homes are appreciating at between 10.0% and 12.0% per year and there seems to be no end to the value appreciation over the coming three years.  This set of market circumstances promises a tremendous opportunity for owners of small or large rural tracts to convert huge market gains in their land’s value into a number of single family homes and to defer any possible capital gains tax to a future time.

Contact Joe or Glenda Neel to learn of special market opportunities to purchase or exchange into rapidly appreciating single family properties.  Don’t give away a part of your hard earned real estate profits to the Federal tax collectors.  They won’t even say thank you.

Want to understand better how a section 11031 tax deferred exchange works?  Call or text Joe Neel at 214-773-2246.

Prices are Skyrocketing in Collin County

Prices are Skyrocketing in Collin County!!

If you are a homeowner in this area you are very aware of the acute shortage of homes available for purchase.  Normally the above mentioned area offers the market a 5.5 month supply for the buyer’s choice of homes.  Today there is an average inventory of homes with less than a one-month supply.

So, if you are a homeowner now, in the above area, your existing home is appreciating at a rate of 10 to 11% per year.   Assuming that you now own a $300,000 home in this market, it will almost certainly appreciate by $90,000 over the coming three year period.  We feel confident that this excellent appreciation rate will continue for at least the coming three years. We know of two companies that are moving to the area and their known demand for homes for their employees will account for 8,000 newly purchased homes.

Now for the exciting part.   Buy a second home and enjoy this fabulous appreciation on both homes.  The two homes will both likely appreciate $90,000 over the coming 36 months period.  Together, the two homes can dramatically increase your net worth.

How do you do it?  You first lease your existing home to a tenant who will probably occupy your existing home for the coming three term.  When your tenant is signed up and moved in, we will help you acquire a second home, probably a brand new home with a little luck we may get you approved for a 96.5% LTV mortgage on this new home (FHA loan with 3.5% down payment).  We will have you moved in to your new home in a month or two (more if the home is under construction.

How do I know my existing home will lease?  There is a critical shortage of clean, well maintained homes available to lease.

Why can’t I simply continue to live in my existing home?  You can do that. But the second home, which you are about to purchase, will be considered an investor purchase, and will require a 20% down payment rather than a 3.5% FHA down payment for an owner occupied home.

How do you know the market is strong enough to warrant an estimate of 10 to 11% appreciation each year for the coming three years?  Subscribe to and read the Dallas Morning News.  Hardly a day goes by without a report in the DMN about increasing home values.  

How can I choose the one home that would likely appreciate by the estimated $90,000 over the coming three years?  We are not focusing your success on picking just the right home.  A rising tide floats all ships.  We believe that the suggested success described above will be typical of most neighborhoods in McKinney, Frisco, Prosper, Allen and etc.

Your planned success can begin with one phone call.  We can refer you to others who are already in the   midst of affecting their new worth, bringing strongly impacted by rapidly appreciating home equities.  Now is the time, this is your once in a lifetime opportunity.  Call us today .

How to Build Your Retirement Estate

In Collin and Denton Counties

About every day the Dallas Morning News has articles which emphasize how hot the real estate market is in Collin and Denton Counties.  How can you take maximum advantage of this extraordinary time?

For purposes of example we are going to assume that you are a home owner in the area and that you own a three bedroom, two bath home which is worth $270,000 in today’s market.  How can you take maximum benefit of this market?

Option 1.  Relax – Do nothing.  Your home will probably appreciate at a rate of 10% per year for 2015, 2016, and 2017.  Three years from now your home will probably be worth $360,000 compared to today’s value of $270,000.  That is great, fantastic, and wonderful.   Would you like to consider putting your home equity in gear to greater escalate your equity value in the coming three years?

Option 2.  Buy a second home similar to yours valued at $270,000 and double your pleasure.  The problem with this scenario is that your mortgage lender will consider your second home as an “investment property” and such lender will quickly explain that you must have a 20% down payment in order to be approved to purchase your “investment property”.  If you have about $54,000 plus closing costs laying around and available this is a very wise decision.  Your “investment property” will also likely appreciate by $90,000 over the coming three years.  The two equities combined namely the equity in your primary residence and the equity in your “investment property” will together build you a very substantial nest egg by the end of the three year period.

Option 3. Immediately contact Glenda Neel to create a two-step investment plan for the coming three year term.  With Glenda’s help, select a brand new home which will now become your primary residence.  This new primary residence is appreciating right now at a rate of about 18% to 20% per year.  You will likely have to pay $325,000 for this new purchase if you qualify for an FHA loan for this new primary residence.  Your down payment will be 3.5% or about $10,500, and your closing costs will be a minimum amount when Glenda negotiates for some serious help with such closing costs. When your new home is complete rejoice and move in.  Glenda will be able to locate a tenant for the home you had previously occupied, at a rate likely to pay your entire monthly mortgage cost for principal, interest, taxes and insurance over the coming three years as both of your homes appreciate in value.

If you decide to contract for a new home to be built, it may take as long as seven months to complete construction. Complete your construction selections and set back and watch the weekly progress as your home is being built.  When the new home is almost completely finished,  Glenda will be there to get your present home leased to a reliable tenant and help coordinate all closing details on your new home.

Client Endorsement:

Hello, I am Marisol Islas in McKinney, Tx.  This endorsement is to affirm that several months ago my husband and I studied Glenda’s recommendation to purchase a second house by first leasing out our present home.  Glenda quickly found a suitable tenant for our home in Celina.  The tenant moved in, and we moved out.  After considering several homes available by great builders, with Glenda’s help we selected a home and placed it under contract.  We moved in last week and now have two homes in our name which are both appreciating in value at a very nice appreciation rate.  We’re glad, so glad that we took this important step in building towards our retirement account.

As soon as we are able, we will be working with Glenda to purchase our third home.

Marisol and Tony Islas







A First Time Home Buyer’s Dilemma

We recently developed a lead with a motivated prospective buyer couple.  They have been paying rent for the same rented house, in the amount of $1250/mo., which provides them with a small three bedroom, two bath home.  There is barely room enough for this couple and their two children.  Together the couple bring in good income and have a good credit score.  They would love to buy a home of their own.  They would prefer a new home.

Now here is the dilemma.  Both husband and wife would love to buy a new home in the McKinney area, and ideally the children would stay in the same school.  They would like their house payment to be no more than $1650 per month.   They are well informed clients and appreciate the value and the tax savings that accompany home ownership.

The problem is that their McKinney dream home, having 4 bedrooms, three baths, and a media room has appreciated in price from $225,000 two years ago to $290,000 today.  There are a few new home builders who are building exactly what they want, but today’s market value is about $70,000 more than what the couple want to pay, which is only about $220,000.

What the couple wants and can afford is available right now, but it is located in another town about nine miles further north, in a totally different school district.

So, their decision for the moment is “We think we will continue looking here in McKinney, maybe at a used home in the same school area.”  They do not want to go above the target of $1650 per month.

A hot, appreciating home market leaves many would-be buyers frustrated and perplexed at what they can afford in the community of their choice.  They do not like it!  What they really want is not available in their price range in the area they want to live in.

The dilemma:

Settle for an affordable home which is older and smaller than they want or move further out where they can afford their dream home in a new community and a new school district.  We all make similar choices every day like which cut of meat to choose or which car to buy.  Possibly the choice is less painful than the choice of where to buy a home.  One thing is certain.  There is no purpose looking for their dream home in a neighborhood where home values have drastically increased. Further increases in value only leads to farther frustration.     This couple like all of us must make some painful choices—seeking the best possible choice now.  Waiting will only make the situation worse.

Can you save fast enough to keep up with a home appreciating 20% a year in value?  Now may be the best time for you to make your move whether you are a first-time home buyer or wanting to move to a bigger home for your family.

Call today and let me help  you with these decisions.