Wednesday, December 18, 2013

3 Secrets to Growing an Einstein Brain

Robert HernandezMBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS :241292 Broker Lic.: 01935727
3 Secrets to Growing an Einstein Brain
3 Secrets to Growing an Einstein Brain Relativity and quantum physics weren't the only things on Albert Einstein's mind—he also had a few tricks up his sleeve for making sure his brain was both working at peak efficiency and harnessing as much of its power as possible.

There are three parts to the brain—the stem, the limbic system, and the frontal cortex—and according to Dr. Rudolph E. Tanzi of Massachusetts General Hospital in Boston and co-author with Deepak Chopra of the book Super Brain, we get the most out of our brains when all parts in the system are working together.

Here are three exercises that when practiced regularly, can help you get the most out of your brain:

Become a possibility processor. Einstein's genius was in part due to keeping his frontal cortex (the logic center) in its place. Letting your imagination run free—allowing nonsensical, even outlandish, ideas to form without criticism or fear—can cause new neural connections to form, helping develop highly creative and refreshing ideas. The trick is not to judge these ideas too quickly; there's plenty of time to let logic sort them out later.

Look for loops. Our limbic system automatically looks for patterns and creates associations or "loops" as memory and response shortcuts. When you react to things in a way you can't quite explain, you might be stuck in a loop. Examining the source of your feelings and how your responses may have been shaped can go a long way toward rewiring unhealthy or unwanted reactions, patterns, behaviors, and more.

Reactivate all brain centers with a "S-T-O-P." Just remember the acronym STOP—STOP what you're doing; take THREE deep breaths and feel them through your whole body; OBSERVE how you feel (this activates the limbic circuit and frontal cortex); within a few seconds you can then PROCEED with full awareness of yourself and those around you.

You may not develop a new theory of relativity, but with a little practice, you'll be well on your way to discovering new mental power!

Friday, December 13, 2013

Monthly Market Guide: Get your Updates

Robert HernandezMBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS :241292 Broker Lic.: 01935727

Monthly Market Guide:  Get your Updates!


 Home for the Holidays. Whether you're heading home or looking for a new home this time of year, the articles below can help make this season bright:
  • Sign of the Times? - The markets are looking for clarity from the Fed as housing and economic reports roll in.
  • What to Watch - Take a look at the broadest measure of the U.S. economy.
  • Fresh Ideas - Try these 3 unique decorating tips this season!
  • Q&A: Rates? - Find out how home loan rates have been trending!
If you have any questions or would like to discuss your unique situation, call or email today. And please forward this newsletter to friends, family members and coworkers who may find the information helpful.

 A Sign of the Times?

  As we get ready to enter a new year, the markets are watching for signs that might indicate when the Fed will taper its Bond purchase program, known as Quantitative Easing.

Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. That includes Mortgage Bonds, to which home loan rates are tied.

Last month, likely incoming Federal Reserve Chairwoman Janet Yellen was on Capitol Hill for her confirmation hearing and she signaled that the Fed's current Bond purchase program will continue, as the economy is still running below its potential.

For example, the Empire State Manufacturing Index came in weaker than expected last month and it also revealed that labor market conditions are weak. The report backed up Yellen's statement in her prepared text at her confirmation hearing that, "Unemployment is down from a peak of 10 percent, but at 7.3 percent in October, it is still too high, reflecting a labor market and economy performing far short of their potential."

In housing news, Existing Home Sales for October fell due to a rise in home loan rates and housing prices. As you can see in the chart accompanying this article, that was the second month of declines. Similarly, Pending Home Sales declined by more than expected in October. The drop was due in part to declining affordability and higher home loan rates.

Finally, although the National Association of Home Builders' Housing Market Index remains in positive territory, it fell to the lowest level since June.

What does this mean?

Overall, the housing sector is fairly stable, but further improvements could be hindered if home loan rates continue to rise (see the Q&A article below for more on home loan rates).

One thing is clear: The Fed has said that economic reports will be a key factor regarding when it begins to taper its Bond purchases. Whether this will happen before or after the new year remains to be seen.

The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions for you.

 What to Watch: Gross Domestic Product

  Although a variety of economic reports are released each month, one of the broadest measures of the U.S. economy is the Gross Domestic Product (GDP). That's why it's important to keep an eye on this report.

What is it? GDP measures the total production and consumption of goods and services in the U.S. GDP components like consumer spending, business and residential investments, and price (inflation) indexes illuminate the economy's behavior.

What happened last month? The first of three readings on third quarter GDP showed that the U.S. economy expanded well above expectations. The rise was due in part to a buildup in inventories, a pickup in trade, and increased spending by state and local governments. However within the report, consumer spending—which is the main driver of the U.S. economy—fell to the lowest rate in three years.

I'll be watching future releases of this report to see what it reveals about the economy and how it may impact home loan rates. If you have any questions, please call or email me.

 Freshen Up Your Winter Season

  Here are 3 unique decorating ideas that are easy to pull off and guaranteed to add a little something extra to your winter memories—without breaking your budget.

1. Jar to the World: Clear glass vessels are perfect for displaying collections of winter decorations. For a colorful display—no electricity required—fill your jar with old-fashioned incandescent light bulbs. Try another with spools of ribbon and peppermint sticks or even cranberries. Jars with lids can even be topped with artificial snow for a cool effect, even if real snow is nowhere in sight.

2. Winter Word-erland: If your Scrabble® game is collecting dust in the closet, you can use the trays and tiles to spell out winter-season messages, or use them as place cards for a gathering. Paint the trays in festive colors to give some pop to the tiles. If you don't want to chance ruining your set, sells replacement tiles and trays you can use exclusively for decorating.

3. Going Out on a Limb: If you don't have much room on your dining table, here's a unique idea. Suspend a bare tree-branch from the ceiling above the table using eye hooks and fishing wire, then hang winter-season decorations of various shapes and sizes from the branch. You can even spray paint the branch a special shade, such as red, silver or white.

Nearly all these ideas can be accomplished inexpensively with a trip to your local craft or discount home goods store. And if you keep your eyes peeled and ask around, you're sure to come up with additional ideas of your own!

 Q&A: Home Loan Rates?

 QUESTION: What's the trend with home loan rates?

ANSWER: Borrowing costs for homebuyers have been rising since May. But the good news is that rates are still lower than in August, when rates reached a two-year high and held close to that level through mid-September. So the bottom line is that home loan rates remain attractive compared to historical rates.

Thursday, December 12, 2013

Identity Theft: 5 Tips to Protect Your Privacy

Robert HernandezMBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS :241292 Broker Lic.: 01935727
Identity Theft:
5 Tips to Protect Your Privacy
The Federal Trade Commission (FTC) estimates that as many as 9 million Americans have their identities stolen each year. This means that an identity is stolen every 3 seconds, costing the average victim nearly $4,000 and nearly 175 hours to straighten out their problems and their credit. How can you protect yourself from the dangers of identity theft? Here are some suggestions.

Conduct a Credit Check-up – Visit to obtain a free credit report every 12 months. Review all three of your credit reports and look for any suspicious activity, unusual or inaccurate names or addresses, or any inquiries that were done without your knowledge. In many states, you may place a 90-day "Fraud Alert" on your credit report, which further restricts access to your credit information. Simply call one of the three main credit bureaus to activate the alert. Here are the toll-free numbers: Equifax 1-800-525-6285; Experian® 1-888-397-3742; or TransUnion® 1-800-680-7289.

Don't Give It Up – Avoid falling prey to phishing scams, both over the phone and through email. In a phishing scam, identity thieves pretend to be someone from your bank or a credit institution and simply ask you for your personal information. If someone contacts you and requests any personal information, don't give it to them. Verify who is requesting the data and why, and then call the institution yourself. One extra phone call could save you a lot of trouble and money.
Stay off the Pharm – While phishing enables thieves to pilfer information from you, pharming is another kind of scam that consists of hijacking your computer and stealing your personal information. A pharming site is designed to look just like the website you're trying to visit. However, enter your information on this fake site and not only can it track your moves within it, it may also direct your computer to give up other personal information at a later time. Be sure you are visiting the correct site, that the address in the navigation bar is correct before entering any information.

Return to Sender – Some scammers simply fill out a change of address form and divert your mail to another location. Others simply steal the mail they want right from your mailbox. The key to avoiding this scam is to know your statement delivery dates and pay close attention to any unusual delays in delivery. A lot of identity thieves do things the old-fashioned way: They rummage through your trash to collect your information that way. Be sure to shred any junk mail or other documents that may contain your personal information before you throw it away.

Opt-out of Special Offers – Visit to cut down on the pre-approved offers from credit card and insurance companies. It's also good idea to have your clients opt out as well, especially if they're thinking about buying a home. When people apply for a mortgage, they often become "trigger leads" to the credit bureau, who sell your clients' information to any number of companies. It only takes a few minutes to opt out, but it could spare your clients a ton of junk mail and could possibly save them from identity theft.

Wednesday, December 11, 2013

The Federal Reserve and Mortgage Rates

Robert HernandezMBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS :241292 Broker Lic.: 01935727

The Federal Reserve and Mortgage Rates
Understanding What Causes Interest Rate Movement
Consumers are often misled when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. Many times, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve affects short-term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate. These factors have a direct impact on the Prime rate. If you took only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage-backed securities, which trade on a daily basis. The real dynamic at the heart of interest rate movement is the relationship between stocks and bonds.

Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage-backed securities.

Unfortunately, selling mortgage-backed securities to fuel stock market rallies causes interest rates to go up, not down.

Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage-backed securities which cause mortgage rates to drop.

The daily ebb and flow of money is what matters most when it comes to the movement of mortgage interest rates. I make it a point to continuosly monitor interest rates for my clients, and advise them of opportunities to manage their mortgage debt at a better rate. This is the foundation of my business model as a Trusted Advisor.

Monday, December 9, 2013

Weekly Market Guide

Robert Hernandez
MBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS : 241292 Broker Lic.: 01935727

Weekly Market Guide

  Last Week in Review: Key housing and jobs data was released. Plus a surprising read on Gross Domestic Product, the broadest measure of economic activity.

Forecast for the Week: This week's economic calendar is light, featuring readings on retail sales, jobless claims and wholesale inflation.

View: See the important time tip that can make all the difference any time of year.


  Last Week in Review  

  "Tomorrow is often the busiest day of the week." Spanish Proverb. And it sure seemed that way with last week's busy economic calendar, as Friday's Jobs Report capped off a week filled with data. Here are the highlights.

The highly anticipated November Jobs Report revealed that employers created 203,000 jobs last month, above the 188,000 expected. The Unemployment Rate fell to a 5-year low of 7 percent while the Labor Force Participation Rate (LFPR) managed to tick up to 63.0 percent, though it is still at lows not seen since the late 1970s. The LFPR is a measure of how many people are looking for work. All in all this was a good report, but the labor market is not out of the woods yet.

Also of significance, the second reading of third quarter Gross Domestic Product (GDP) rose by 3.6 percent, above expectations and the best level in a year and a half. But a closer look shows the gains coming from a large buildup in inventories. This is important to note because a buildup in inventories could cause goods to stay on the shelf and not materialize into sales, which could set the stage for a disappointing read in the fourth quarter.

In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose by 12.5 percent in October 2013 compared to October 2012. This marks the twentieth month of year-over-year home price gains. In addition, New Home Sales for September fell but October's New Home Sales surged 26 percent, coming in above expectations. Both reports were delayed due to the government shutdown.

What does this mean for home loan rates? Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. The Fed has said that its decision regarding when to taper these purchases will be dependent on economic data. Whether data has been strong enough for the Fed to begin tapering these purchases after its meeting of the Federal Open Market Committee on December 17-18 remains to be seen. Either way, the timing of the Fed's decision will definitely impact home loan rates heading into 2014 and it's why economic data in the coming weeks will be important to monitor.

The bottom line is that now remains a great time to consider a home purchase or refinance as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.

  Forecast for the Week  

  Economic data is light this week and doesn't kick off until Thursday.
  • As usual, Thursday brings Weekly Initial Jobless Claims. Last week's claims dropped below 300,000, though this figure could have been skewed by the Thanksgiving holiday.
  • Also on Thursday, Retail Sales will be delivered and will show the health of consumer spending.
  • The last report this week will be the Producer Price Index on Friday, which will reveal if there are any inflation pressures at the wholesale level.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving — and when they are moving lower, home loan rates are getting worse.

To go one step further — a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates have worsened in recent weeks, as some positive economic reports have caused concern that the Fed will taper its Bond purchases sooner rather than later. I will continue to monitor this story for all the latest developments.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Dec 06, 2013)

Japanese Candlestick Chart

Sunday, December 8, 2013

Robert HernandezMBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS :241292 Broker Lic.: 01935727

Total Quality Control
Set Goals that Lead to Improvement

The concept of KAIZEN®* is based on ideas developed by Japanese industries, which date back to the 1950s. This system for optimizing production melds together ideas from both Eastern and Western cultures, and embraces the philosophy of implementing common sense, low-cost forms of improvement. It takes into consideration all members and facets of a company, and how each plays its part in reaching Total Quality Control.

While breakthrough ideas are based on rapid change and the development of new systems, KAIZEN® principles are geared toward recognizing what resources you have at hand, and making better use of them. The KAIZEN® process is soft and gradual, and a team or support group evaluates each level of change step-by-step.

According to Masaaki Imai, Founder and Chairman of KAIZEN® Institute, you should regard how you currently do your job as the worst way to do it, and seek to make gradual and consistent improvement. "In order to improve you must first perceive the need for change, and then recognize the problems and work to solve them," Imai states.

Rate your current activities on a scale of one to ten (ten being best), and determine what goals you should set to improve your current system. Circle the number that best applies for each category listed below.
Setting Priorities
1 2 3 4 5 6 7 8 9 10

Being Organized
1 2 3 4 5 6 7 8 9 10

Ability to Focus
1 2 3 4 5 6 7 8 9 10
Commitment to Goals
1 2 3 4 5 6 7 8 9 10

Follow up on Prospects
1 2 3 4 5 6 7 8 9 10

Follow up on Clients
1 2 3 4 5 6 7 8 9 10
Asking for Referrals
1 2 3 4 5 6 7 8 9 10

Developing Referral Partners
1 2 3 4 5 6 7 8 9 10

WOWing Clients
1 2 3 4 5 6 7 8 9 10
Review your notes, and decide which areas could use the most improvement. How does this affect your company's production overall?

Saturday, December 7, 2013

Robert HernandezMBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
NMLS :241292 Broker Lic.: 01935727
Write-offs to Remember
Deductions in the Loan Process
Write-offs are the government's way of rewarding taxpayers when they've done something the government likes. And to judge by the write-offs, the government likes it when people borrow money to buy a house. There are write-offs aplenty, many of which people often forget.

Make sure your clients take advantage of every break the IRS will give. Here are a few they tend to forget:

According to the IRS, origination fees charged as points must be paid for the use of money, (for example, to obtain a lower interest rate) in order to be tax deductible. Origination fees that constitute a "service fee" are not tax deductible. The question must be asked, "Does the fee apply to the use of money, or is it a service charge?"

Pre-payment penalties:
Unforeseen circumstances often cause borrowers to pull out of their mortgages sooner than expected. Fortunately, pre-payment penalties are tax deductible, which helps ease the pain.

Pro-rated real estate taxes:
Even if the seller sent the tax collector the check, chances are the buyer paid a pro-rated portion of the taxes for the year at closing. Be sure they know to deduct their fair share.

Pro-rated mortgage interest:
Depending on when in the month the home sale closes, buyers pay either a hefty or a tiny amount of pro-rated mortgage interest for that month. Big or small, they can write that off. The Final Closing/Settlement Statement will show just how much they've paid.

Home construction loan interest:As long as the construction period doesn't last more than two years before they make the new place their "principal residence," they can write off the interest for that construction loan.

It pays to pay attention – all these write-offs can add up to some serious savings when tax time comes around.