Mediation or Arbitration...Is it Right for Your Divorce?

Getting divorced is no fun. Handling it in a civil manner will not only make it easier, but it will save time and money. Today we address the divorce option of mediation and arbitration.

If you decide to handle your divorce in a manner that will save you money it will leave more left over for home ownership and paying of debt. My clients that have gone the route of mediation found they had more success in their new financial lives after the divorce and had more of their hard earned money left for them.

Starting off by addressing the debt situation is vital. Is someone going to stay in the current home? Are both individuals going to buy new homes after selling the existing home? What do you do? Who should pay what bill? Credit cards, car loans, student loans, medical bills and the list goes on.

I take the time to show both people what their new financial lives look like by way of a proposed budget. Most of the time people have an idea of how the divorce is going to go when selecting mediation. If you have a firm budget in place that looks acceptable to both of you, it will make it easier to figure out how to split up the assets as well as if someone is going to have to pay alimony, child support or family maintenance. Don't over look this step.

I asked attorney David Karp to help us figure out if mediation is the way to go and he gave me some great tips for you to learn.

What is the difference between mediation and arbitration?

Mediation is an attempt to settle a legal dispute using a neutral third party who is either trained in mediation skills, or by prior experience, has familiarity and expertise in the area of the legal dispute. The mediator does not decide the case or come up with a decision that is binding on the parties. The mediator helps the parties attempt a settlement of their legal dispute.

The mediator can act as a facilitator, someone who comes up with ideas and alternatives to settle a legal dispute, as well as an evaluator, some one who has input on telling either side the strengths and weaknesses of their particular case.

Any mediation involves some combination of both, more times than not, is in the role more as a facilitator than an evaluator.

Mediation is non binding on the parties, and is confidential. Anything that goes on at mediation cannot later be used in a courtroom by either party,nor can the mediator be subpoenaed and brought into the courtroom to testify as to what was discussed at mediation.

Usually, if there is a custody and placement dispute, the mediation will be conducted by a social worker, rather than an attorney or former retired judge.

It is mandatory, under Wisconsin law, that if there is any dispute over custody and placement, before the matter can proceed to a contested hearing, or for the appointment of a guardian ad litem (court advocate for the children),that first, the parties must attempt to settle their dispute by going to mediation.

Arbitration

Arbitration, is another form of (ADR), alternative dispute resolution. Arbitration is binding on the parties, and is an alternative to the more traditional form of litigation, that is having the legal dispute resolved in the courtroom by either a trial judge or where a jury is allowed by law, by a jury of your peers. Arbitration allowed in civil lawsuit cases, which can include divorce and family law matters. However, arbitration, as a matter of common practice, is rarely used by divorce attorneys, where as, mediation is commonly used by such attorneys.

Since arbitration is an alternative to the traditional means of litigating the case in the courtroom, it is generally recognized as binding on the parties. There are some certain circumstances where the parties may agree to non-binding arbitration, but is generally not used very often in common practice.

Arbitration can be conducted either by one arbitrator, or sometimes, by a group of arbitrators. The arbitrator presumably would be a trained attorney in the area of the legal dispute, or by a former retired judge. Arbitration in a divorce case probably would involve one arbitrator, rather than a panel of arbitrators.

How do I find a mediator?

If the legal dispute is a family law matter, such as a divorce, and if the dispute is custody or placement related, than the mediation is usually done at the courthouse by a social worker who is assigned the case from a county in house, counseling service.

If the legal dispute involves a non custody or placement issue, on financial or money issues, which could be a divorce or other financial dispute from a lawsuit, than usually the mediation is not done by a social worker, but rather, an attorney who is either trained in mediation skills, or by prior experience and expertise, is knowledgeable in the particular area of legal dispute.

Many times former retired judges also serve as mediators, who mayor may have not been legally trained in mediation skills or areas of alternative dispute resolution. Some attorneys and judge are, some are not. There are some specific companies in the Milwaukee area that offer mediation services. The Milwaukee Bar Association may be able to make a referral for either mediation or arbitration from a list of known attorneys and/ or former retired judges that the MBA keeps on hand. A fair number of attorneys advertise their mediation services in the monthly MBA newsletter. Finding a mediator many times is simply done by word of mouth. One can start by asking their own attorney for names of skilled mediators, whether experienced attorneys or former retired judges.

Does mediation really work?

Generally speaking, mediation does work. It cannot and will not resolve every legal dispute. However, the chances are overwhelmingly favorable ,that with an experienced, trained mediator, and with the parties being vested in honestly mediating their case in a fair and reasonable manner,that the parties stand a good chance, perhaps as high as 75% or more, of resolving their legal dispute.

Where mediation is "court ordered" in a family law matter, where there is a custody/ placement dispute, the odds would decrease that mediation would work. The reason is essentially twofold;

(1) the parties have not chosen mediation as a method for resolving their dispute. They are not vested in honestly and fairly reaching a settlement of their case. The only reason they are mediating at all, is because the court ordered them to do so,

(2)since custody and placement disputes, can be the most emotionally charged and volatile areas of controversy, they are very difficult cases to resolve in the first place; that does not mean that such cases cannot be resolved, but the chances of success are diminished.

What is the sequence of mediation?

The answer generally depends on what the purpose of mediation is for. If the case involves custody and placement, than usually, mediation will be court ordered at the time of the initial first family court commissioner hearing. Mediation will be ordered, unless waived by the court, prior to the appointment of a guardian ad litem (court advocate), and mediation will have to have occurred prior to the court making any further decisions on the custody and placement of the children.

In a legal controversy not involving custody or placement, the parties can chose to mediate their dispute generally, at any time, absent some type of a court pretrial order, that may order a cutoff date, prior to trial, as to when mediation would have to be completed by. In some legal controversies, parties may even decide to mediate their case, prior to the filing of a lawsuit.

How much will it cost and how do we get started?

The answer depends on what type of mediation is taking place, and who does the mediation.

If the case involves custody and placement, and the mediation is done by a social worker either at the court house, or in a smaller county to a private social worker, the cost will be in the range of $100 to $200 , usually divided between the parties, for at least the initial session. Further sessions will usually be billed per hour, and may vary from county to county, probably in a $75 to $150 range, per hour.

If mediation is conducted on a non custody/ placement case, on any other type of legal controversy, the mediation will be conducted by a private attorney or former retired judge. The hourly rate and the up front fees will vary from mediator to mediator. Some mediators may require that each party deposits in advance $500, and other mediators may require no up front fees at all. The hourly rate may vary anywhere from $150 to $350 per hour, depending on the mediator.

As you can see, there are a number of advantages to this mediating a divorce, especially from my aspect. If you are committed to making it happen you will save money. More money that can stay in your account.

Start working on your new financial plan today. Call me to schedule a personal planning session or to get a recommendation for Attorney David Karp.

This is some great information that you can share with someone you know who may be thinking of getting divorced. Feel free to pass along my name and number as a resource as well.

Until next week...

Diplomatic Divorce???

Believe it or not, people do want to resolve a divorce in a diplomatic fashion. The Collaborative Divorce is an alternative to having two attorneys battling head-to-head, spending all sorts of your hard earned money.

Attorney Barbara Burbach, of Burbach & Stansbury S.C., another one of my favorite attorneys to work with on divorce cases, has some highlights of why the collaborative option is something to consider.

Here are four to consider:

1. The couple retains control of the dispute resolution process and eventual outcome without risk or fear of the unknown, example "What will the court decision be?"

What a relief to know that you are responsible for a reasonable outcome that is agreed upon without endless fighting and name calling.

2. The process increases the ability and the likelihood to continue to co-parent effectively and to preserve relationships with extended family and friends. This is so because the collaborative process handles conflict in an environment that is safe and conducive to interest based negotiations.

This is a key point in my eyes. You have to think about the transition for your children. Being civil will make a big difference to your children on an emotional level.

3. The process utilizes the expertise of various members of the collaborative team to assist the couple with the issues that the expert is best equipped to handle.

If you have listened to me in past podcasts I put a strong emphasis on working with TRUE professionals. Do you see why I like to work with Attorney Burbach. The two of us place an enormous amount of value on who we work with. Find a great attorney, mortgage professional, accountant, financial planner and mental health professional and you will be on your way to a successful transition into a new financial world.

4. The collaborative process is almost always less costly than litigation.

Less money spent. More money left in your bank account. Enough said

If you want to be civil in your divorce think about the collaborative option. To get more information about Collaborative Divorce you can visit the website,

www.collabdivorce.com

Call me to set up your own personal and private appointment to map out your new financial life. Starting here can help you better understand what you should be asking for in the divorce and let you know the possibility of staying in your community. Call 414-453-7620. I can help get you started today.

If you would like a referral to Attorney Burbach or another Collaborative professional call me or email me at kevinkowalke@aol.com.

Educate yourself. Be confident. Be a success.

Until next week...

Tips on Finding a High Quality, Professional Attorney

I am so glad that you decided to read this segment's post on my blog. Finding the right attorney could make or break your soon to be new life, both emotionally and financially. I was able to get one of the top Family Law attorney's to give us some helpful tips.

Attorney Roberta Steiner, of Gimbel & Steiner, LLP, has provided 8 helpful tips to make sure you get yourself a high quality, professional attorney who is looking out for you. For those of you who listen to me on a regular basis you know the importantance to have a team of true professionals around you. So, let's get on with the tips...

#1 - Many people rely on recommendations of friends/family/colleagues, but you may want to interview more than one lawyer.

This makes a lot of sense. You need to make sure the attorney you work with has the experience to handle YOUR specific needs.

#2 - Schedule an appointment and interview the lawyers you may be interested in retaining.

Meet the attorney face to face. You can tell a lot about one's integrity and honesty when you can look 'em in the eye.

#3 - Ask to meet support staff with whom you will be working.

Attorney Steiner has a wonderful paralegal, Elizabeth Abel. She is able to make things happen by providing an open line of communication with all involved parties. This is essential for working a divorce case successfully.

#4 - Choose your attorney as you would another trusted professional, such as a doctor, dentist, mortgage professional, etc. You will be working closely with the lawyer for several months, at least. Be sure your choice is the proper "fit."

You need to be comfortable with the attorney you select because you will be working together for a number of months and sometimes over a year.

Ask any psychologist who works in divorce cases and he/she will tell you how important it is that you find an attorney that can communicate effectively. In fact, a favorite Psychologist that I have worked with on divorce cases, Dr. Robert Nohr of Cornerstone Counseling Services, even has a famous psychology test (the Myers-Briggs Type) that will tell you if you will "fit" with a certain professional from a communication standpoint. Dr. Nohr suggests you let the attorney know what is most important to you. Example, "I want all the details," or "I just want to know the big picture."

Dr. Nohr had me take the test and it was amazing how the description fit me to a tee!

#5 -Be sure you are on the "same page" as your potential divorce lawyer regarding approach and philosophy.

The last thing you want to do is clash with your attorney because it will get you nowhere and cost more money arguing what to do and how to do it.

#6 - Ask for details on hourly rate of the lawyer and support staff.

Seems like a no-brainer, but you'd be surprised how many people don't even now what their attorney costs will be. Get it on paper. Know what you are getting into.

#7 - Ask for details on billing procedures so there are no misunderstandings.

Know when you will be billed, how much you will be billed and when the payments are due. Stay on top of this!

#8 - Ask for a copy of his or her retainer agreement. Find out the amount of the required retainer. Find out if any portion of the retainer is refundable.

Again, pay attention to the details. Know what you are signing. This is a big commitment. Make a wise decision.

If I were you I would print this off and use it as a guide when going through the attorney selection process.

Don't forget to give me call so you can get your own individual personal financial road map. You need to be prepared since you will have a whole new way of life ahead of you. You can reach me at 414-453-7620. Don't leave your personal finances to someone who doesn't understand this delicate process.

If you want to know more about Attorney Steiner or Dr. Robert Nohr, call me and I will be happy to give you a referral.

Until next week...

10 Biggest Personal Financial Mistakes When Getting Divorced...

Making the wrong decisions when getting divorced can have long lasting effects. That is why it is so important to know what to do, when to do it and who to have help you with it.

I am giving you my top 10 list to pay attention to so you can have the best possible transition and experience through what is a difficult and emotional time in your life. So here it is:

Kevin Kowalke's

Top 10 Biggest Personal Financial Mistakes When Getting Divorced

#10 - Not knowing your rights and options. Remember, Wisconsin is a Marital Property state. Unless you have an agreement in place prior to the marriage your assets and liabilities are share equally. Having an attorney to consult with is key to understand where you stand in your marriage. Also, educate yourself on the divorce process so you know what kind of options you have.

#9 - Not Using an Attorney. Even if you think you and your spouse have agreed upon EVERYTHING, which usually ends up not being the case, you should still be advised by legal counsel. This is a process that should not be taken lightly. Do it right.

#8 - Forgetting to Inform Your Accountant. You never know where Uncle Sam may come into play, so you should be advised by your accountant/tax preparer to make sure you are aware of any taxes that may be owed if liquidating assets, selling properties, etc. Do not let this one sneak up on you.

#7 - Neglecting to Pull Your Credit Bureaus. Talk about getting bit in the behind. You need to know what all of the outstanding debt is to make sure each of you is paying a fair share. You don't want to get stuck holding the bag on a bill you didn't know existed.

#6 - Closing Joint Accounts. When you look at your credit bureau it will tell you which accounts are open in both spouses' names. If you don't address this immediately and your ex-spouse decides to rack up some bills on it, there is a good chance you will be on the hook for it. Don't get caught overlooking this step.

#5 - Forgetting to Cancel Authorized User Status. When your spouse added you to a credit card at some point in time you became responsible for the debt. Since you didn't jointly apply for the credit you can very easily get yourself removed with a phone call to the credit card company. Personally, I would make sure this is addressed in the divorce decree to make sure it happens.

#4 - Working With Professionals Who DO NOT Understand the Divorce Process. Need I say more here? Do you really want to leave your personal well-being up to someone that doesn't have the experience of helping people successfully get through a divorce? I can't tell you how many mistakes I have seen and have had to help out with because some mortgage person said this, that and the other and it ended up being wrong. I know it happens within other professions as well. Be cautious and do your homework.

#3 - Not Working With True Professionals That Will Have a Step-by-Step Plan for You. When you go through a divorce things can change quite a bit in the first couple of years. In the mortgage world, the financing you do today more than likely will not be the financing you have 3 months, 6 months or a year from now. You need to understand why and have someone there to advise you and look out for you. Same goes for tax planning, financial planning, etc. Make sure you have true professionals by your side.

#2 - Being Spiteful and Difficult. This is where I am going to lose some people and they will never get to read my #1. Some of you have so much hatred and spite for your ex spouse that you will do anything to make it difficult and agonizing. You realize that you are just in flushing money away by racking up enormous legal bills, extra debt, etc. You worked so hard to accumulate what you have, why throw it all away? I say hash it out. Come to grips. Get it over with. Take your anger out on a punching bag. Save the money! Save your time! Isn't that more important than fighting for a year on who gets the frequent flier miles? You decide.

...And the drum roll please...

The #1 Mistake is...Waiting Until the Divorce is Final to Start Thinking About Your New Personal Financial Future. I can't tell you how many times I have received this phone call,

"Kevin, I got your name from a friend of mine who said you can help me with getting a mortgage after my divorce. I need you to help me now. I only have 30 days to refinance the house!"

Are you kidding me? You only have 30 days, which is actually less than that when making financing decisions, to decide what you future will look like. You need time to make adjustments to your budget and have an idea of what kind of money is going to be left over when the day is done.

I have been spreading the word in the divorce community to encourage people to address this situation early on. Most people are unaware that they can buy a new home before the divorce is final. Most don't realize refinancing can take place before the divorce is final. It is possible. You just have to know how to do it. What legal paperwork should be in place. What are the steps before, during and after the divorce?

This is where I am the area's leading expert. If you want to have a step-by-step plan in place and know all of your options you can call me. This is the first time I have been very strong on promoting my services. It is because I am very passionate about this getting done the right way. Call today, 414-453-7620. Try to make the financing end of the divorce as stress-free as possible. It will make the process that much easier. When you stop in, I will give you my guide to successfully getting through your divorce in terms of your personal finance. Do not take chances with this. Until next time...

2007 Predictions...

It is that time of year again. Here are my predictions for the Interest Rate and Local Housing Market for 2007.

First, the housing market. With all of the "doom & gloom" that is being reported by the media, I think we will see another year of softening in the market place. The good news is that I think we are close to the bottom of the market.

Homes are sitting longer than they were in years past, but that is typical of a normal real estate cycle. Locally we had been spoiled for so long that we get spooked when a home doesn't sell for 4-6 months. Remember the days that homes were selling for more than asking with 7 competing bids the hour the home hit the market? If you do, put those thoughts behind you. If you don't, yes, there did exist such a day not too far in our past.

If you are selling a house this year, here is a list of what I would do to be prepared:

1. Educate yourself on the average time homes have been on the market in your neighborhood.
2. Price it to sell. Now is not the time to try and set the benchmark for highest sale on the block.
3. Have your place looking clean and fresh. Don't be afraid of spending a few hundred dollars on paint to make your home look and smell fresh. Put up some new light fixtures and change out old hardware on cabinets. You would be surprised how spending $500 - $1,000 could add extra money to the sale and help sell it faster.
4. Educate yourself on bridge financing in case you do not sell in time to buy your new home. Go back and review my shopping around segment that tells you how to be sure you are working with a true mortgage professional that can steer you in the right direction.
5. Find a listing agent that is aggressive. Find out all of the ways he/she will promote your home. Look for more than just the traditional newspaper, magazine and MLS answers. If you need some tips give me a call.
6. Be in the mindset to make a deal. Having a bad attitude could cost you an offer and more time on the market. Don't forget that you have holding costs each month you don't sell your home.

Now...The moment we all have waited for...Where will Mortgage Interest Rates be in 2007?

Let me start out by saying my predictions for 2006 were right on the money. I predicted we would be in the low to mid 6% range all year and sure enough we were. So, what about this year?

Well, I see rates ranging from 5.75% on the low end and 6.75% on the high end. More than likely we will spend the majority of the time between 6.00% and 6.375%.

There are many economic reasons behind my predictions which includes, stabilization in job growth, cooling of the economy, slightly higher unemployment rates, oil prices below $700/barrel, and inflation being in check.

The other good news is sometime around the end of summer or beginning of fall the Federal Government should start decreasing the federal funds rate. This will positively effect home equity lines of credit, auto loans and credit cards, to name a few.

For those of you that are not getting this kind of information from your mortgage professional and would like to receive updates like this throughout the year give me a call and I will add you to my weekly ezine that we send via email. Also, if you would like to have your own debt management and wealth creation program call me to experience what a true mortgage planning session should be like. My office number is, 414-453-7620.

Until next week...

Stop Selling My Name!!!

The credit bureaus are selling names like crazy and you can stop if you want. Unfortunately, I have heard too many stories about someone being "persuaded" into getting a mortgage that sounded too good to be true and ended up that way too. These cases typically end up costing consumers thousands of dollars and lots of headaches.

If you want to stop some of the solicitation bombardment for yourself or someone you care about, then it is time to take action.

You can call 888-567-8688 or log on at www.optoutprescreen.com.

You can select from different opt out options.

Pass this along to someone you know that could use the information.

Until next time...

Free Gift for Home Owners...

How Would You Like to Learn How You

Can Get Free Refinances Everytime

Interest Rates Drop?

I have built my mortgage business on developing long term relationships with my clients by giving them every opportunity to save money with as little cost as possible. You deserve the same treatment.

I am starting a new membership group for local area homeowners that will be packed with member benefits including the same bonuses my current clients are getting from me now, including free refinances. But, that is just the beginning.

If you are interested on being notified in January about this huge opportunity just send me an email at kevinkowalke@aol.com. Include in the subject line "Free Refinance" and send your first name and email address that you want to be contacted at and you will start to receive emails from me in January on all of the details.

For those that are interested, get on the waiting list now because there are bonuses for the first 27 people that sign up. It will be a great surprise.

Have a Merry Christmas and Happy Holidays.

Santa Kevin's Gift to You!

I Have an Incredible Gift for You to Learn How to... Create a "Competition Free Zone"...Successfully Sell at Prices Higher Than Your Competitors..Stablize New Client Flow...Generate More Referrals...Prosper Even in Tough Economies Through the Use of Direct Response Marketing and Direct Response Advertising.

Over the last 9 years I have worked hard to build a very successful mortgage practice and have learned a ton from the experience. Some of that experience good, some of it was learning through the school of hard-knocks. Well, now I would like to help those that are looking for a boost in their sales and some direction in their business.

Click on the link below to read about my gift to you, "The Most Incredible Free Gift Ever."

http://www.nobsfreegift.com/kevinkowalke

Marketing is a true passion of mine and I have been a serious student for some time now. Specifically, my personal mentor, Dan Kennedy has changed the way I think and work on my business. What I have learned has made all the difference in both the business and personal lives. Take the time to read more by going to the link below. You won't be disappointed.

http://www.nobsfreegift.com/kevinkowalke

Let Santa Kevin's gift to you be the difference maker for you and your business. Merry Christmas and Happy Holidays.

Kevin's First Book...

Here is your opportunity to reserve your copy of my first book titled,
"The Ultimate, Step-by-Step Guide to Successfully Financing Your First Home."

All you have to do is send me an email at kevinkowalke@aol.com and provide me the following:

Name
Address
City, State Zip Code
Phone Number (to verify information)

Also, let me know if the book will be for you personally or if you are getting it as a gift.

Those of you that sign up will be given priority notice for my upcoming books that I will be writing. As I start you will be sent an email so you know what I have in the works.

I look forward to hearing from all of you.

New Tax Deduction for Homeowners...

Big news this week. For years Mortgage insurance companies have been lobbying to get its mortgage insurance premiums as tax deductions for homeowners. Well, it is finally here.

Starting in 2007, mortgage insurance premiums will be fully tax deductible if you have an adjusted gross income of $100,000 or less.

That is a big deal because for years I have been helping clients avoid paying the premiums since you couldn't write it off by doing combination loans of 1st and 2nd mortgages. Now, that does not mean that it is the only way to go now. You still need to run the numbers to see which type of loan makes the most sense. You want to take into consideration the following:

1. Total Monthly Payment
2. The amount of tax deduction
3. How long you plan on being in your home
4. What the difference in costs are when it comes to different mortgage options.

Remember, each one of you have your own situation, so there is no general answer. Make sure your mortgage professional gives you some sort of spreadsheet offering you the different options along with the corresponding estimated tax brakes.

If you are not getting that, please go back to the archive section of my Podcast at www.620wtmj.com, go to September and October and listen to the "Shopping Around" podcasts. This will give you, step by step, what questions to ask.

As always, you can call me and know that you are in good hands. You can reach me in the following ways:

Office Phone: 414-453-7620
Email: kevinkowalke@aol.com
Website: www.kevinkowalke.com

Please be informed and don't assume one way is better than the other. Get proof.

Until next week...

Defend Against Identity Theft...

I want to wish all of you that have been listening to my show a very Happy Thanksgiving Holiday week. Take some time to think about what you are truly thankful for. Don't be afraid to express your gratitude when given the opportunity.

Now let's continue with this very important topic of Identity Theft.

I really hope this never happens to you, but if it does this entry into my blog will be THE MOST IMPORTANT TOOL you can have. Use it as a step by step guide to solve the problem.

Start off by creating a Fraud Alert on your credit reports. Here is who to conact:

Equifax:
PO Box 740258
Atlanta, GA 30374-0258
800-685-1111
www.equifax.com

Trans Union:
PO Box 4000
Chester, PA 19016-4000
866-887-2673
www.transunion.com

Experian:
PO Box 2104
Allen, TX 75013
888-397-3742
www.experian.com

My experience has been dealing with the credit bureaus online is your best chance of getting something done on a timely basis. This is not easy. Working with the credit bureaus takes patience and perseverence.

Once you have contatced the bureaus, you will want to close those accounts. You can get the ID Theft Affidavit by going to www.ftc.gov/idtheft. Keep really good records in regards who you talked to, when you talked to them and what the outcome was. Keep all of this in a binder so you have your notes with you at all times. You will be happy if you keep these records.

Don't forget to file a police report. This makes everything official. Some creditors will want to see it.

Finally, report this to the Federal Trade Commission. This helps the law enforcement officials try and catch the theif. you can do this by contacting the FTC in one of these fashions:

www.ftc.gov/idtheft
877-id-theft(438-4338)
Identity Theft Clearinghouse, Federal Trade Commission
Washington, DC 20580

Remember, dealing with the government is never easy. Have patience.

You can get a more indepth report by going to:
http://www.ftc.gov/bcp/conline/pubs/credit/idtheft.pdf

Finally, you can call me for a FREE review of your credit. Call me at 414-453-7620.

Here are some links to more information:

http://www.consumer.gov/idtheft/index.html
http://www.ojp.usdoj.gov/ovc/help/it.htm
http://idtheft.about.com
http://www.privacyrights.org/index.htm
http://www.ncjrs.gov/spotlight/identity_theft/facts.html

Once again, have a safe Thanksgiving Holiday week. Until next week...

Watch Out for Identity Theft...Congratulations Pius XI Athletics...

I want to start out by congratulating both the Pius XI Varsity Girls Volleyball Team for going to the State Tournament this year as well as the Varsity Boys Football Team for having success in the playoffs. Let's continue the momentum into next season. I'm one of your biggest fans!

Onto this week's topic, Identity Theft. The words alone are scary. What can happen to you is even worse. I have had a couple of clients that this has happened to and it was not pretty. It took well over a year to resolve and even more time to correct the credit bureaus. So, please take this seriously.

The FTC came out with the campaign:

DETER, DETECT, DEFEND

Deter

Shred financial documents and paperwork with personal information. When in doubt shred everything to make sure you take no chances. I shred every solicitation that comes in the mail to me. I don't care if it is a credit card offer or an offer to buy the latest figurine from the Danbury Mint, I shred it. The last thing I need is someone stickin' me with the bill for the latest on of a kind silver dollar.

Protect your social security number. Don't just give this to anyone. If you are doing business with someone you were referred to, which is the best way to go, then you should be ok. Otherwise be protective. Also, STOP carrying your social security card aroud in your purse or wallet. There is no reason you will need to show that to anyone on a momnets notice.

Don't give away your personal information. Same as my point above. Protect everything about you.

Never click on links sent in unsolicited emails. You've seen these before. "Drop 30 lbs. by next week" or "Make 400% return on your investment." I can't believe people are still falling for those. Whatever you do, go directly to the company website to make sure it is a legitimate offer.

I just recently was sent three emails trying to get me to give up my personal info on some bank accounts and PayPal info. I reported the fraud to the companies and deleted the emails immediately. Be cautious.

Don't use obvious passwords. This should be a no brainer. Thieves are very crafty and can get a ton of people just by guessing passwords based on everyday information about you. Make your passwords with both numbers and letters to make it harder, if not impossible, to figure out.

Keep your personal information in a secure place at home. Once again, keep this in a place that is hard to find unusual. Don't let the maid or contractors have a field day in your house.

DETECT

Be alert to signs that require immediate attention. If bills are missing or are showing up that you don't know about, start dialing the phone to get to the bottom of it. Anything that seems fishy probably deserves a phone call.

Inspect. Check you credit report once per year. There is only one way to get you credit bureau free with one website that allows you to get your credit bureau with no charge. Log onto www.annualcreditreport.com. You will find the information you need there.

Whatever you do, please keep in mind this CAN happen to you. I know most of us think it could never happen, but you would be the one the thieves are looking for. Be aware, be alert and don't wait around to check up on any thing that seems fishy.

If you need help, don't hesitate to give me a call at 414-453-7620. Until next week...

Credit Tips That Will Save You $1,000s...

Don't take this information lightly. Credit is a very delicate topic. It has an impact on more than just how much you pay in interest when borrowing money. Follow these tips...

DON’T APPLY FOR NEW CREDIT OF ANY KIND - if you receive invitations to apply for new lines of credit, don’t respond. If you do, that company will pull your credit report and this will have an adverse effect on your credit score. Likewise, don’t establish new lines of credit for furniture, appliances, computers, etc.
DON’T PAY OFF COLLECTIONS OR CHARGE-OFFS – Once your
loan application has been submitted, don’t pay off collections unless the lender specifically asks you to in order to secure the loan. Generally, paying off old collections causes a drop in the credit score. The lender is only looking at the last two years of activity.
DON’T CLOSE CREDIT CARD ACCOUNTS – If you close a credit card account, it can affect your ratio of debt to available credit which has a 30% impact on your credit score. If you really want to close an account, do it after you close your mortgage loan.
DON’T MAX OUT OR OVER CHARGE EXISTING CREDIT CARDS – Running up your credit cards is the fastest way to bring your score down, and it could drop up to 100 points overnight. Once you are engaged in the loan process, try to keep your credit cards below 30% of the available credit limit.
DON’T CONSOLIDATE DEBT TO ONE OR TWO CARDS – Once again, we don’t want you to change your ratio of debt to available credit. Likewise, you want to keep beneficial credit history on the books.
DON’T RAISE RED FLAGS TO THE UNDERWRITER – Don’t co-sign on another person’s loan, or change your name and address. The less activity that occurs while your loan is in process, the better it is for you.
DO JOIN A CREDIT WATCH PROGRAM – Your bank, credit union or credit card company may be able to provide you with a free credit watch program that can alert you to any changes in your credit report. This can be a safeguard to help you intervene before the underwriter sees a problem.
DO STAY CURRENT ON EXISTING ACCOUNTS – Late payments on your existing mortgage, car payment, or anything else that can be reported to a CRA can cost you dearly. One 30-day late payment can cost anywhere from 30 to 75 points on your credit score.
DO CONTINUE TO USE YOUR CREDIT AS YOU NORMALLY WOULD – Red flags are easily raised within the scoring system. If it appears you are diverting from your normal spending patterns, it could cause your score to go down. For example, if you’ve had a monthly service for Internet access billed to the same credit card for the past three years, there’s really no reason to drop it now. Again, make your changes after the loan funds.

If you are have any uncertainty about your credit or how it will have an impact on your credit don't hesitate to call me to discuss your credit profile. You can reach me at 414-453-7620 or by email at kevinkowalke@aol.com. Until next week...

Five Key Credit Score Factors...

You have no idea how important it is to have command of your credit score. It is only going to become more important as time goes on. Here is the list of credit score factors that you will want to pay attention to:

1. Payment History - 35% - Plain and simple, Pay Your Debt On Time!!!

2. Outstanding Credit Balance - 30% - Don't max out you credit cards. At a minimum, keep your balances at 50% or less than the available limit. 30% or less is even better. 0% is ideal.

3. Credit History - 15% - Don't fall for the common myth of closing out credit cards no matter what. Closing out a credit card with a good length of time behind it could be very costly. Get some good advice from a professional before you do anything like that.

4. Type of Credit - 10% - Have a mix of credit. A mortgage, car loan and a couple of credit cards is a good mix. Having all credit cards could hurt you. The bureaus want to see you have some variety with different payment levels.

5. Inquiries - 10% - I have seen this on more than one occasion be a deal breaker. Someone goes out and has three different types of companies pull credit and WHAMO there goes the credit score. That person goes from being approved to being denied. Keep the amount of inquiries to a minimum. Don't go shopping for a car, home, cell phone and department store cards all in the same month. You won't like the results.

As always, see a professional that can help with any questions you have about credit and how to manage it. You are more than welcome to call me at 414-453-7620 to set up a personal review of your credit.

Until next week...

Good Credit...Lower Rates...

As I stated in the Podcast there are many benefits to having good credit. The obvious one is better rates when you go to finance a house or car or try to transfer a balance to a new credit card.

But, don't forget, the world of crdit is the determining factor in insurance rates and whether or not you win out in the job interview. So, it is more important than ever to learn how to keep up with how credit works.

Each week I will be giving more tips and tricks on how to do it. Now look below for an example on credit scores and interest rates.

Credit Score Mortgage Interest Rate
(assuming a 30 year fixed rate, $180,000 loan amount, 80% LTV)

740-850 6.25% (6.305% APR)
700-739 Same as above
675-699 6.375% (6.413% APR)
620-674 6.625% (6.692% APR)
600-619 6.875% (6.934% APR)
560-599 8.375% (8.523% APR)
500-559 9.250% (9.573% APR)

You can see what a difference it makes to stay up to date with having good credit. Feel free to call me to go over you own personal situation. You can reach me at 414-453-7620. Keep listening every week and stopping by the blog. Until next week...

Do's and & Don'ts During Your Loan Process...

Here is a summary of the some of the important things to remember and the no-no's that can hurt you during the loan process.

1. If you are selling your home or have sold a home make sure you have all of the documentation needed to document the sale or possible sale.

2. Make sure you let your mortgage professional know if you are getting a gift from an immediate family member. There are specific rules that need to be followed. This is important because it could come back to haunt you.

3. Make sure you let your mortgage professional know if you plan on making a job change. If you are, it is in your best interest to make sure it is in the same line of work. If you are an electrician and think it would be great to start selling cars, you are going to have a problem getting your loan approved.

4. Here's a big one. Don't make any major purchases before you close on your loan. The last thing your mortgage professional wants to hear is you pulling up in a brand new Porsche 911 before you have the keys to your house. You very well could be denied to buy your home. I don't think the Porsche will have as much closet space as your new home would.

5. Please don't deposit money in accounts over $500 without having the documentation to show where it came from. Making a $2,437 depoist and saying it is winnings from Vegas is probably not going to go over to well. If it was a bonus check because you are the most fabulous employee ever, then that can be documented.

6. I would strongly suggest you do not play the shell game with your money by moving it from one account to another to another to try and earn an additional 2% on $17,000 for 2 weeks. It isn't worth the headache to document all of the transfers and why put your approval in jeopardy.

7. Do Not add to your current balances. Don't max out your credit cards with really great throw rugs, paint supplies and kitchen pots and pans. This could turn your approval into denial and then you won't have anywhere to put all of those lovely items and sure won't have any walls to paint.

The moral of the story is, if you have to think for a minute whether or not it is the right thing to do, err to the side of caution and don't do it. Call your mortgage professional and ask first. You will be happy you did.

Until next week...

Shopping Around Part 2...

Welcome back for the 2nd part of this important segment to make sure you do not get burned while trying to get a mortgage.

I have received 4 calls this week from Real Estate Professionals that are dealing with Internet Lenders that ARE NOT closing loans. I talked to all four of the buyers and none of them should have been pre-approved to go shopping for a home.

Each of them had different situations from credit mishaps to being self-employed less than 1 year. Now that information probably means nothing to you but it means a heck of alot to a lender that is going to borrower a bunch of money to buy a house.

This is why it is SOOOOOO important to make sure you are working with a TRUE mortgage professional. Again, I can make it very easy for you. I give you the straight lace on every detail of your own personal situation so you are confident that you can afford and get approved for a home loan. Call me at 414-453-7620 to go over the details of your own personal situation.

Let's recap the 2nd part of shopping around effectively:

1. If it sounds too good to be true, guess what, IT IS! Be careful.

2. You get what you pay for! You want to mess around with Internet Lenders, out of state lenders or lenders that have no clue, then be prepared for the worst. Don't get upset and cry the blues. I have given you plenty of friendly warning. Stay away!!!

3. Make correct comparisons. Don't ask about rates and fees from different days.

4. Rates can change daily even hourly. You need someone that monitors this for you.

5. Interest rates and closing costs go hand in hand.

Be safe! Be smart! Don't get burned.

Until next week...

Shopping Around???

Print this page and use it as your guide to make a good decision when getting mortgage financing. Be cautious. Don't be afraid to ask. Also, don't forget to call me at 414-453-7620. Now let's get on with the list I just talked about on the podcast. Let's recap:

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS.RUN.DON'T WALK. RUN.TO A LENDER THAT DOES!

1) What are mortgage interest rates based on?

2) What is the next Economic Report or event that could cause interest rate movement?

3) When Bernanke and the Fed "change rates", what does this mean, and what impact does this have on mortgage interest rates?

4) Do you have access to live, real time, mortgage bond quotes?

Be smart... Ask questions. Get answers! More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life, but I do this every single day. It's your home and your future. It's my profession and my passion. I'm ready to work for your best interest. You can contact me at 414-453-7620.

Until next week...

Don't Be Lured In...

Welcome fellow Podcast listeners.

As I stated during the show you have to be careful of the marketing tricks companies play to try and get you to do your mortgage through them. Let's review what I have already warned you of...

1. "The rates went up." - Of course they did. That is the easiest excuse in the book. I would say prove to me that rates moved. Ask the person what mortgage interest rates based on? If the person tells you the 10 year Treasury run! Most people in the mortgage industry think this is the case. But they are wrong.

2. "I had to give a rate last week Wednesday." Another easy excuse. So, does that mean that you put in a rate no one could ever get since it was "based on Wednesday's rate." I think that is a bunch of crap. These companies are so desperate for business they will do anything to get you to call them. Unethical in my eyes. If you don't do a good enough job to get referrals you shouldn't lie to get more business. Watch out.

3. "You have to qualify by having the following..." The companies make the box quite small so only a few will get the deal. The rest of you are "subject to a different deal with different rates and terms...blah, blah, blah." Be careful.

4. "I need your application fee to lock in the deal." Be careful how you spend your money. They want your money to make it difficult to walk away.

Here's a question for you. Would you call your doctor over the phone and ask him for his diagnosis on what you solution would be if you were sick? If you answered no, why would you call just anybody to handle the largest financial transaction most of you will ever have. I bring this up because I think you should find someone you can trust and develop a long-term relationship with.

I am now going to reveal to you two more marketing tricks to look out for...

5. "What are other lenders quoting you? I'll beat it."

6. "If you get a quote for lower closing costs or rates call me back and I'll see what I can do."

Are you kidding me? When I heard this on my mystery shopping calls I almost puked. Take a minute and think about what these statements are saying...If someone wants to know what others are quoting you first what do you think they plan to do? Beat it by $100 in closing costs. How do you know they weren't going to give you an even better deal than that? Maybe they were poised to give you a deal $500 better but only gave you a $100 discount. Or they were going to give you a better rate but now don't have to. Don't fall into this trap. It could cause you thousands of dollars.

Secondly, if someone says "call me back if you get a better deal so I can see what I can do," what does that say to you. It says to me that this person isn't giving me his best deal. Why would you want to work with someone like this. To me you are being swindled. The person is trying to squeeze every buck out of you. This is just wrong.

I know I rant and push for you to do your mortgages with a true professional that you can trust. Find someone. Heck, I'm biased and think you should have me handle your transactions and you will see what it means to have someone looking out for you. My clients get some major perks after we develop a relationship, which I tell all about at our first meeting. If you are not in the market for a mortgage now, find out how you can be added to my "mortgage family" and start developing a truly valuable relationship that is beneficial to you. Call me at 414-453-7620 to set up a meeting.

Thanks for coming to my blog. I'll have more for you next week.

Kevin

Bridge Loan Example

Welcome Back!! As promised, here is an example of an effective way to use a bridge loan.

Home Value / Sales Price: $180,000.00
Current Mortgage Balance: $115,000.00

We can safely use 80% of
the homes value: $144,000.00

Loan amount available $144,000.00
Existing mortgage balance - $115,000.00

Available Funds $ 29,000.00
Bridge Loan Costs - $ 1,300.00

Net Down Payment
Available for New Home $27,700.00

Purchasing a new home at $250,000.00 - A bridge loan allows you to put down 10%.
After selling your home, you will have more money to put towards your mortgage.

The key is to make sure you have a plan in place to structure your mortgage to have flexibility, secure the best terms and avoid paying mortgage insurance.

I can help you put together a successful plan. Call my office to set up a personal appointment with me at #414-453-7620.

Fix Your ARM Problem...

Welcome to my additional notes and comments on our topic this week of Adjustable Rate Mortgages(ARMs). I talk to clients all the time about how to improve their current debt situation. I will describe an actual client's situation and the solution we came up with.

For confidential reasons I will call my client Gus Wallace. Gus came to me for advice on how to make a dent into his current monthly bills. He has a 1st and 2nd mortgage and two credit cards that don't seem to be going away. He is not in a bind financially. Gus just wants to pay some things off. Plus his ARM is coming due in less than a year and would like to take advantage of fixed rates since they are still below 7%.

Here are the particulars:
Gus' house is worth $265,000. He currently owes $160,436 on his 1st mortgage(5.75% 3yr ARM) and $12,402 on his 2nd mortgage(9.5% fixed for 4 more years). He also has two credit cards that he would like to consolidate. One has a balance of $13,785 at 13.49% and the other has a balance of $8,435 at 9.89%.

Since Gus has a good amount of equity he felt it was ok to roll it all into one loan, as a new 1st mortgage, since he would still have over $65,000 of equity after we borrower $197,000. With this we accomplish the following things:

1) We get Gus out of the ARM and into a fixed rate while the rates are still fantastic.
2) We get Gus' 2nd mortgage out of the high interest into a much lower interest rate of 6.5%
3) We finance it on a 25 year loan which knocks off 3 years of payments on the 1st mortgage and 4 years of payments on the 2nd mortgage.
4) We are now able to stabilize his credit card balances into lower, fixed rates. Since credit card rates have been climbing over the last 18 months.
5) We now have Gus making only one payment.

Now Gus is taking it a step further on my recommendation. He is going to add an $75 per month which will reduce the mortgage to only a 22 year mortgage. This saves an additional 3 years of payments on his current 1st and 2nd mortgage. The other big step that Gus will make is he is dedicating to take half of his tax return, which is approximately $4,100, each year and make a principle reduction payment. Let's call it $2,000 each year. This approach will now have him on pace to have his mortgage paid off in just 17.5 years. Amazing!!!

Needless to say, Gus is extremely happy and is dedicated to making this happen. He also feels confident he will stick to this plan because we will be doing a review every 6 months to make sure I help him be accountable for his plan.

For those of you who would like the opportunity to sit down and created a winning plan for managing your debt successfully call me at 414-453-7620. If you would like a detailed, professional summary of this example send me an email at kevin620wtmj@aol.com. In the email please send me your name and the exact email address you want it sent to if different from the one you use to send me the request. This is the summary is the same one you would get after we sit down and prepare a plan for your own personal situation.

As my gift to those that make an appointment with me you will get my very own "Quick Start Guide to Successfully Financing Your Home." This is filled with valuable information and tools you need to stay ahead in the world of managing your debt. I am very serious about my motto: "I am the area's leading expert at turning renters into home owners and home owners into a financial success."

Don't forget to send me your "Hey Kevin" questions. I will respond personally to all questions. Leave a post on the blog in the comment section or email me at kevin620wtmj@aol.com. Don't forget to give me your name and email address. If I use your question during one of my shows I will reward you with a $10 Starbucks gift card as my way of saying thanks.

Let's get the message boards going and have some fun with this.

Kevin

Who's This Kevin Guy???

Thank you for taking the time to come to my blog. I am confident that you will find valuable information here that will help you successfully finance your home. So, take a few moments and read about who I am and what I have accomplished so you can feel comfortable that you are listening to someone who knows what he is talking about. Also, feel free to contact me with any questions at 414-453-7620 or by email at kevin620wtmj@aol.com.

Now, here's a little bit about me. This is the bio I use for my the papers and books that I author, along with what I give at my public speaking engagements and to my new clients.

Kevin Kowalke, President of KLM Mortgage Group, Inc. in Wauwatosa, WI, has been a leading expert in the residential mortgage industry since 1997. Kevin specializes in helping first time homebuyers purchase the home of their dreams with little or no money down regardless of credit. Kevin believes in developing relationships with his clients so he may be an ongoing resource to his clients and their friends, family, neighbors and co-workers.

Kowalke has been recognized by Bank of America as a top producing leader in the mortgage industry. Kowalke was chosen as one of four mortgage professionals nationwide (currently there are approximately 450,000 licensed mortgage professionals in the United States) to be interviewed on how to build a successful mortgage practice. Bank of America is showcasing this videotaped interview as part of its nationwide training course for its mortgage professionals.

Kowalke has developed a menu of topics that he presents to local area businesses, universities, churches, organizations and small groups. The topics include educational workshops and presentations on debt management, credit repair, budgeting, successful first time home buying, divorce and mortgage planning, and basic personal finance. Currently, Kowalke is the only mortgage professional in the state of Wisconsin that is approved by the State Bar of Wisconsin and the Paralegals Association of Wisconsin to provide continuing legal education to attorneys for credit towards their annual educational requirements. Kowalke has been an invited speaker at the University of Wisconsin-Milwaukee, Marquette University, The Collaborative Family Law Council of Wisconsin, The Paralegal Association of Wisconsin, and the Milwaukee Bar Association.

Kowalke is an Advisory Committee Member of the Consumer Credit Counseling Service of Greater Milwaukee.

Kowalke volunteers by helping educate individuals that need help in areas, such as, budgeting, credit repair, and basic personal financial issues.

Enough said. I provide this to you so you know who I am. I want your trust and the only way I can do that is by letting you know who I am. Want to know more? Continue listening to me every Thursday afternoon in the Podcast section of www.620wtmj.com. I look forward to help each and everyone of you.

Kevin