LEVERAGE AND THE FINANCIAL SYSTEM RICK TOBIN
Historically, private non-governmental loans typically have fewer fees associated with them such as FHA
insurance premium fees, which recently increased even more partly allegedly related to the increasing mortgage
default rates for the highly leveraged FHA loans in past years.
Back in the 1980s, I remember “Hard Money” loans, which were called “The Perfect Vision Loan” because the
interest rates were 20%, and the cost to fund these loans was 20 points (or “The 20/20 (“Perfect Vision”) Loan”).
Today’s private money loan options are incredibly cheap as compared with the old “Perfect Vision Loans.” In
many cases, private money loans may be funded in a week or two as opposed to a month or two with various
types of government backed or insured loans.
For the real estate markets and U.S. economy to continue improving in the near and long term, we need better
access to capital for small investors and “Mom and Pop” business owners who truly represent the bulk of the
U.S. consumer market. Even if interest rates continue to slowly increase as they have in recent months, due to
the fears associated with potential reduced Quantitative Easing (QE) policies (or “create money out of thin air to
bail out the Big Banks and Wall Street firms in order to continue increasing their bets in the world’s largest
casino”), then the easing of underwriting guidelines and more private money or non-governmental funding
options will help to better stimulate both the real estate sector as well as the rest of the U.S. economy.
Rick Tobin
Look for Rick's ebook on Amazon Kindle: The Credit Crisis Deals: Finding America's Best Real
Estate Bargains.
Rick Tobin has a diversified background in both the Real Estate and Securities fields for the past
25+ years. He has held seven (7) different Real Estate and Securities brokerage licenses to date.
Rick has an extensive background in the financing of residential and commercial properties
around the U.S with debt, equity, and mezzanine money. His funding sources have included
banks, life insurance companies, REITs (Real Estate Investment Trusts), Equity Funds, and
foreign money sources.
You can visit Rick Tobin at RealLoans.com.