March 2008


A few years ago, when I entered the mortgage business, I realized that one of the best ways to differentiate myself was to simply act with integrity…not “ACT AS IF” I have integrity. The world of real estate finance can sometimes be very complicated and in many ways extremely confusing. Lots of people at banks, and especially at mortgage brokerages count on this. It was no less confusing for me since I entered the mortgage market at a time when subprime meant nothing to me, but it meant nearly everything to most people in the business of mortgage banking. (I work with HFM because integrity is EVERYTHING to its owner, Greg Kundinger, my friend and confidant). Now, I entered the business with lots of business experience. I was the associate publisher and C.O.O. of a big-market newspaper: a business owner of a company located on Madison Avenue for years; I am a serial eco-entrepreneur to be sure and I brought to bear lots and lots of business finance experience. But I had lived in Manhattan and never owned a home before moving to Atlanta. I thought I was moving to Atlanta to become a green builder with a little help from my friends at Southface Energy Institute. I was no real estate finance guy, but now I am affectionately referred to as the Eco Loan Guy. In the first week or two in the business, I really struggled through concepts and loan strategies that other people did not seem to struggle through. Then it happened…I had an epiphany and realized that I kept hearing people around me saying – just “ACT AS IF” you know what you are talking about. It seemed that was the industry mantra…”ACT AS IF” you are successful; “ACT AS IF” your loan package is in the client`s best interest; “ACT AS IF” you give a flying leap and…Laugh all the way to the bank!? ? ? I found that to be advice that I could not take. I could be many things, but duplicitous was not and is not one of them…especially when dealing with people`s homes and their finances. I am a husband, a father, a son, a friend…I couldn`t “ACT AS IF” and then sleep at night. Instead, I set out to “BE” knowledgeable, to “BE” somebody that people can and do trust. I needed to be something more than what I witnessed as loan officers high-fived each other when they made 5 points on a real estate transaction without disclosing it was a high-cost loan and not in their clients` best interest. I literally got sick and tired of being sick and tired of how the mortgage business operated. When my clients ask for advice, I give them my best advice, even if that means I don`t make money on it. Sure, I could lie and make a lot of money…but I didn’t then and I don`t now. To “BE” the best that I could be in the mortgage business meant I had to create something new. I had worked for multiple values-based businesses and felt at home in them…I felt like a fish out of water in the traditional mortgage arena. That led me to create myEnergyLoan. I needed to “BE” what the market needed me to be and it didn`t need me to “ACT AS IF” I knew anything. It needed me to actually know something…what I now know is that green building and green lending are the only things that make sense to me with regard to real estate. And I am not the stereo-typical environmentalist “granola-eating vegan,” either, although I do own a pair of vintage Birkenstocks and I absolutely love honey-baked organic granola for breakfast. Green buildings can help a lot more than they are right now, especially during this market correction and green financing is making the market heat up fast. To say the market is correcting its course right now would be the greatest understatement of economic history. The market has seized up (and lubing it with more light crude won`t bring it back to life) and it has hurt us all. There is no velocity of currency at this time… It even hurts the people who are making TONS of money RIGHT NOW since money can easily be made in a bear or in a bull market, regardless of whether the mortgage market melts down, the credit markets melt down, or if the polar ice sheets melt down. It turns out that we don`t need to “ACT AS IF” some magical market correction will occur – it won`t. Oh, a correction was inevitable, but now, what is happening is major media coverage is desensitizing us to the reality that many people in large banks got greedy and fed on people who also were being greedy; all the while “ACTING AS IF” it wouldn`t matter. Why haven`t more heads rolled? Please, bring back the yard irons for some of them! People “ACTED AS IF” they qualified for loans when they knew they didn`t. Think about STATED INCOME, STATED ASSET (SISA) loans. At best, SISA`s serve self-employed borrowers who rightly take advantage of our tax laws by deducting the costs of doing business, which means their tax returns did not accurately reflect their incomes. Provided you had a good credit rating, you could easily “STATE” your income “AS IF” you had it – and banks actually approved you – “AS IF” you did! How crazy is that? Stated income actually became CREATED income. And that, my friends, is a cosmic-clunker of an idea if ever I heard one. Did you ever hear the term NINA? That means No Income, No Asset…it`s a documentation type the likes of which has very little reason to exist, except that banking institutions and clearinghouses determined that if somebody has good enough credit and two-years of employment history with the same company, in most cases the loan application did not need to list any income nor any assets. WOW! Again – a cosmic-clunker of an idea if ever I heard one. Now that the duplicity is being exposed, I encourage each and every reader of this blog to refrain from “ACTING AS IF” it doesn`t matter that we put truth back in lending. SOLUTION: Be or don`t be…but don`t act as if TRUTH is anything less than what is needed at this time and for all time; especially at this time. Get your financial house in order – go green and reduce your reliance on foreign oil; unplug from fossil fuel and plug into renewable energy; live in a healthier home; be a responsible steward of your home and your money; enjoy your life and spend the savings in your own back yard, don`t give it to some single-bottom-line global bank who wants nothing more than for you to export your money out of your community and into their pockets. Now, that is my very best advice when it comes to real estate and real estate finance. – JC

What`s myEnergyLoan? What`s an Energy Efficient Mortgage? It’s where economy meets ecology. Massive closing cost discounts, down payment offsets and better interest rates are available with the myEnergyLoan program. myEnergyLoan is laser focused on bringing meaningful and sustainable capital to bear at a time when green building has the potential to help meet many of our critical economic, environmental and social needs. SINCE 2005, myEnergyLoan has been applying an advanced method of incorporating all available incentives into our green loan packages; nobody does this more effectively and more accurately than myEnergyLoan. Our program operates throughout the US and our team provides >>>> residential <<<< and >>>>commercial <<<< finance capabilities. Traditional lenders and mortgage brokers typically do not understand the meaning of sustainable capital conversion, but myEnergyLoan literally closes the sustainability loop with your green real estate closing. At myEnergyLoan, we are dedicated to fueling the shift from a fossil fuel economy to a modernized economy; an economy that creates a natural triple-bottom-line orientation for our capital sources when they fund your green real estate transaction. Responsible stewardship of our natural resources and finances are both our mantra and our way of conducting business. We are proud to be natural capitalists who firmly believe in building local living economies whereby every dollar our clients save is a dollar that will potentially circulate through their community an average of six times, rather than being exported out of the community and into the coffers of large corporations. The savings we provide contribute to economic stability and overall financial betterment. – JC

THE ENERGY EFFICIENT MORTGAGE (EEM) IS AVAILABLE AT myEnergyLoan That’s right. We can handle the EEM, which is a specific loan product designed to help borrowers qualify for energy efficient homes and energy efficient upgrades for high performance buildings. The myEnergyLoan program will help you reduce your utility bills and your operating expenses. If we determine together that your loan scenario is applicable we can even close your “true” energy efficient mortgage. The EEM is a single product that might not be the most advantageous loan product for your needs, so we developed a proprietary way of adding massive amounts of value to your real estate transaction. The EEM products that we offer may vary with FHA, Conventional, Jumbo and Commercial real estate loans. The EEM and the EIM (Energy Improvement Mortgage) are powerful products and we encourage their proliferation since they can make green buildings even more affordable. CALL TODAY FOR GREAT RATES !

TODAY we are celebrating the completion of the pre-drywall construction phase at the Michelle Frost & K.C. Boyce residence in Decatur, GA. In anticipation of the event, I recalled the heroic effort that was made with the financing we arranged for the 601 Third project. First off, this is an extremely high-profile project which is going to be featured on a Discovery Communications “greenovation” program. Secondly, K.C. works with a group of folks who are pretty engaged in sustainability here in my hometown, so a recommendation from him is something we really hoped to receive, assuming we deserved it. Finally, our assignment was to provide a loan for a green building and as the nation`s leading green loan incentive program, if we didn`t come through, we had bigger problems than not closing a loan. Here`s a recap of the events that at the time seemed EXTREMELY difficult. These days…I wish I had more of those “easy” deals in the pipeline. The borrowers were very well qualified and they reached me by referral from their contact at EarthCraft House (www.earthcrafthouse.org). After much finance shopping, K.C. & his wife, Michelle, determined that while the loan package had great competition, it made the most sense to work with myEnergyLoan where they could receive the myEnergyLoan efficiency credits and work with a lender who “gets green building.” My choice for loan officer was Norm Wagner, a senior loan officer on my team, mainly because Norm is a phenomenal loan technician and the construction loan market was quickly whithering on the mortgage vine. We needed the best loan officer on the team, and Norm is it. We quickly got the automated loan approval and felt confident our program, a one-time-close construction loan, was a.) most efficient loan program and b.) the most-likely-to-close-smoothly loan program. Boy, were we wrong! Without naming the lender we selected (I will call them a new addition to a large bank in America), we realized that the lender was sending a great deal of mixed messages. Finally, after enduring unreasonable requests we were forced to make of them, K.C. and Michelle became so frustrated that they nearly fled us for another lender. Norm saved this deal on that day, by picking apart another lender`s loan offer and proving that ours was FAR BETTER! The central issue was that the lender we chose (hint: all across the COUNTRY are double-WIDEs) this lender, literally changed its construction loan requirement in mid-stride…several times. I remember thinking many times “usually, banks want to close loans for qualified borrowers…why not this one, why not now?” I simply could not believe the requests and conditions. They were asking the borrowers to clear unpublished conditions – things like CASH AND LOTS OF IT! Things like DOCUMENTATION AND LOTS OF IT! Once, they requested an obscene amount of updated information – during a period of time when the items they already had in their possession were current. Contingency and interest reserves guidelines were thrown out of the argon-filled window and it seemed obvious to all of us that this lender simply wanted us to take a manual denial and go away. They did not want to do this construction loan but they gave us no GOOD reason why. The bank went so far as to tell us that our appraisal was reporting a value of $100,000 higher than what their new “quality control check” revealed while they were doing a routine title check. I suggested that they needed to immediately get somebody with AUTHORITY to fix the glitch in their non-existent QC program! Their statement was not only obnoxious, it was outright ridiculous. No…it was re-donk-u-lous, it was so assinine. Remember, we do good business and we knew that our appraisal was tight and right on the money. We even got two additional comps to prove it. The bank still wouldn`t budge. We fought and fought and called in our top brass in an effort to close this deal, which of course HAD to get done on time in order to make the filming schedule with the Discovery Channel. Those high-strung TV guys and gals really don`t like changes in their schedules, ya know, but they had nothing on us when it came to being high-strung! I literally saw a denial as the end of myEnergyLoan…denial was not an option. Michelle and K.C. put together a dream green team for their project. We had great borrowers, a great builder (Renewal Construction), a great appraiser, a fantastic mortgage broker (HomeFirst Mortgage) and a great loan incentive program. Just what was going on? We stepped up our game as we traced detail after detail until we simply out-smarted the bank. The number of e-mails that went back and forth was mammoth – I think we single-handedly consumed like half the broadband available worldwide during early November 2007 as we made the case for our borrowers. Finally, we won. We actually won the appeal. Usually a denial is a D E N I A L, denial, unless you do such good business that a denial for one of your files seems really out of place. Thankfully, we do and it did. Our appeals went to the very top of the underwriting food chain at this bank and finally, after forcing the borrowers into what we felt was a completely unreasonable deal structure, to which the borrowers conditionally agreed, we closed on a Monday night around 5pm. One-time-close construction loans actually look like refinance loans since they have two parts – the construction financing part and the permanent financing part – so there is a three day right-of-rescission that must expire before the loan funds. In this case, that meant the loan was funding Friday. Thursday (one day prior to funding) the lender closed their wholesale lending construction division and the note that went to the industry read something like this “if your OTC loan is not already closed by today it will not fund with _____wide bank.” Ours was and it did. I smacked my forehead so hard I should have had a V-8…the lights went on immediately. That was a grueling loan that ended up being the third-to-last OTC construction loan Countryblank funded through its wholesale lending division. To say this loan was a major hassle for everybody would be a gross understatement…myEnergyLoan and HomeFirst Mortgage never made even a single mistake on the file, but we maxed out the allowable contribution in order to extend our condolences to the borrowers. At the end of the day, the borrowers received a $3,300 myEnergyLoan efficiency credit through HomeFirst Mortgage and we licked our wounds for weeks afterwards. It was a bloody battle, to say the least. And why? Apparently, there was never an appraisal problem. There was never a borrower problem. There was never a problem with our loan file – at all. The problem was that the bank (which is now under serious investigation by multiple three letter agencies) no longer wanted to be in the wholesale construction loan business and it appears to me that they were willing to side-step commonly held and federally mandated tenets of ethical behavior in order to deny (aka put the screws to) my borrowers. Obviously, we didn`t let them – we couldn’t let them. We were in too deep, but the bank was in far deeper. They tap-danced better than Shirley Temple in “Just Around the Corner” in a way that simply had to have been choreographed and rehearsed. They had another option – they could have quietly told us they intended to shut down the division and we would have quietly gone away. Instead, they chose to be unethical and elusive, at best. The truth prevailed, my friends, and that very difficult loan made it to the closing table and closed. These days though, that loan looks like an easy-breezy loan file. It`s that bad out there now. Fortunately, we are still getting loans closed, it`s just a lot more difficult now that the equity market has been crushed to death and the second mortgage market is being beaten like a red-headed step-child. Oddly, we love the challenge and we see hope where many others see nothing but failure, doom and gloom. After all, our builders, our EcoBrokers and our borrowers are part of the solution…and that is nothing short of exciting! In case you didn’t know, green buildings solve problems, but people build, sell and buy green buildings…and it’s the most fun space in real estate today, bar none. Now, for the good news (since I like ending with a little good news from time to time): TONIGHT myEnergyLoan will be providing refreshments at the Frost, Boyce open house at 601 Third Avenue in Decatur (3/21/08) from 4pm to 7pm and again on Saturday (3/22/08) from 9am to 1pm – and you are invited! It`s a pre-drywall celebration where you can see all the super cool green features before they get covered up and finished! We hope to see you there! See K.C.`s blog at http://www.601third.com for step-by-step details on the greenovation construction and his much more delicate handling of the events that transpired as this greenovation was being financed. We love you, Michelle and K.C., and congratulations on the progress at 601 Third Avenue, Decatur, GA. – JC

Sometimes when we refer to our company by the acronym “MEL” we sometimes hear back, “kiss my grits, MEL!” If you remeber the sitcom Alice, you will remember that line. So…I decided to have some fun with the concept of kissing grits, since doing loans is a lot like that these days – lot’s of effort and not as much fun as it once was. Sure, we kiss lots of grits, but thankfully, my clients are a ton of fun and their green building projects are really, really fun! I prefer grandma grits, especially if i`m kissing them. My grandmother, Fred Cole, is incredibly cute and sweet and her grits would be too if she knew how to make them! She doesn`t kiss anybody`s grits. Grits with honey and cinnamon, grits with butter and cheese, grits with crumbled bacon, salt and pepper… Making grits is hard work – kissing them is even harder and, for the record, instant grits just don`t cut the muster. Grits are porridge, for those of you who don`t know; and grits is fillin` when you eat enough of `em. Kissing grits is fine…so long as you like grits. Kissing grits you don`t like will leave a bad taste in your mouth every time. Sometimes, when you find grits you like to kiss, you really don’t mind kissing them (often , and to excess). Usually, though, let’s face it; kissing somebody’s grits just ain’t what it used to be. I’ve been kissing lots of grits lately – haven`t you? How about if somebody kissed YOUR grits for a change? Would you have to pay them? More than you already pay them? Will grits ever cost $112 a barrel? If they did…heck, they`d be as expensive as oil. Hey, who makes all the grits that we`ve been kissing, anyway? I bet I know whose grits they are…do you? Yeah, I could smell them Grits a mile away! If you can tell me, you might win $50! Let me know… Please respond by commenting on this blog with your answer. The comment I like best (100% subjective) will win $50 and their very own box of grits! Comments must be made by March 31, 2008 at midnight (EST).

Hold your breath, but get ready to scream with delight if you are frustrated in your search for an EEM. We are announcing a new EEM product that MAY deliver the following to our clients: Borrower`s contribution to down payment, closing costs, and/or prepaid items may be funded by rebates from gov`t agencies, utilities or manufacturers. Monthly energy savings from Energy Report and energy efficiency tax credits to which borrower is entitled may be added to income for qualifying purposes. Sales Price or Value may be increased as permitted by program requirements. THIRD PARTY VERIFICATION OF EFFICENCY IS REQUIRED. CONFORMING LOANS ONLY FOR THIS PRODUCT 😦 Diclaimer – this may not be available for all borrowers and this is NOT a guaranteed loan for any borrower. We have to analyze your scenario in order to make you a loan offer. The only way to know if this loan is right for you is to let us run your scenario – and that`s not meant to be a teaser, but a reality check. This product may or may not work with our standard myEnergyLoan efficiency credits which are available for jumbo loans, second home loans, investment property loans and commercial property loans (if they are financing green propery), but myEnergyLoan always works if your property is green when we close your loan. myEnergyLoan is the best green loan incentive program in the business of green real estate. Call Jeff Cole IMMEDIATELY to see if you qualify for this incredible sustainable egg!

Guess what? We`re the fish. Here`s the real question I have to ask today…at what per-barrel oil price does renewable energy begin to create outrage among the citizenry? Clearly, not $109. Today was the fifth straight consecutive day of record high oil prices and the day ended at $109 a barrel. Let`s look at the winners and losers… Turn on the TV…switch stations until you see President Bush and his friends…those he calls his base – according to him, these are the have`s and the have-more`s. They are the winners today, yesterday, last year and for the last 7 years. Don`t believe me…do a little digging…start with Michael Moore`s Farenheit 9-11. Now…look in the mirror – make an “L” with your hand and slap it against that forehead…get the picture? Green building helps us reduce our reliance on foreign oil; It can help us UNPLUG from fossil fuel and PLUG INTO renewable energy sources. Environmental Wacko? Hardly…afterall, God is Green from what I can tell.

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