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Wednesday, April 27, 2011

It's almost Friday!

Fun Fact of the Day: Approximately one sixth of your life is spent on Wednesdays.

We hope that everyone is having a great week so far!

Monday, April 25, 2011

What's up with Real Estate?

Since interest rates are creeping up, now may be a good time to sell or buy a home. Yes, we said now may be a good time to sell or buy a home. As long as interest rates remained stable, potential buyers and sellers could afford to remain indecisive. Even though rates are still at an all time low, people are motivated to take action since waiting could mean a higher rate and a larger mortgage payment.

According to Scott Dixon, president of the real estate division of Network Communications Inc., in the real estate market, inventory and selection are good, home prices remain flat and sellers are motivated and more likely to work with buyers on price. So whether you are a first time buyer, looking for a move-up home or hoping to downsize, now is a good time to make a decision.

Interest rates are not going to double this year, but they are going to continue inching up. The more rates go up, the more people will feel the pressure to make a decision about buying. This is a great thing for the real estate market, for home buyers and for home sellers.

So, what is the bad news? New and pending regulations in repsonse to the mortgage lending crisis mean new loans and refinancing will be more complicated, more time-consuming and more expensive. Expect higher fees, higher mortgage insurance payments and bigger down payments. This means that there will be fewer 0 to 5 percent down-payment loans. Instead, there will be more 10 percent down requirements.

The federal government is also working to shrink its footprint in the housing market. During the lending crisis of the last few years, the federal government has guaranteed more than 9 out of every 10 new mortgages. The Obama administration said earlier this year that it wants to move more mortgages back to the private sector. The administration plans to gradually reduce new loans made by the federally controlled lenders popularly known as Fannie Mae and Freddie Mac. Meantime, the Federal Housing Administration (FHA) will be strengthened but won't take over the market share left by Fannie Mae and Freddie Mac.

Some of the regulations took effect late last year. Others, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, take effect this spring and later this year. Additional rules take effect in 2012, and others are still in development. All in all, the sooner you act, the more likely you are to dodge at least some of the new and upcoming requirements. This could mean less hassle, and more smooth sailing, which is always a good thing.

The new rules are intended to protect consumer, hut they also are incredibly confusing and contradictory. It is guaranteed that the cost of doing a mortgage is going to increase and it will be a longer process on top of that. Borrowers will have longer to review all of the disclosures in their mortgage loan; however, this means that they will need a longer lock-in period for the interest rate, which costs more money.

Most borrowers want to know two critical things: their total monthly payment and how much cash they will need to bring to the table at closing. But the new three-page-settlement forms that replaced the former one-page form don't break down this information. As for refinancing, most people who could and should refinance did so by the end of 2010. When rates hit 5 and 1/4 percent in December, refinancing ground to a halt. If you decide to do refinance, just allow for more time - just as you'll need to do for a mortgage. The days of getting it all done in a week are long gone.


  1. Fewer loans from the federal lending programs popularly known as Fannie Mae and Freddie Mac

  2. Higher fees for Fannie Mae and Freddie Mac

  3. Gradually increasing down payments for Fannie Mae and Freddie Mac loans to 10%

  4. Higher mortgage insurance payments on FHA loans

  5. Higher credit scores required to qualify for the FHA's most favorbale loan terms

  6. Longer disclosure forms

Citing Karen Haywood Queen's article "What's up with real estate? in The Costco Connection. p 27. April 2011.

Happy Easter!

We hope that everyone had a wonderful Easter weekend and enjoyed spending time with loved ones!


Maitland Law Firm

Monday, April 11, 2011

Working with Uncle Sam:

Federal Contracts for Small Businesses

It's not as if Charlene Turczyn is outiftted in an Uncle Sam costume, hut her affinity for the federal government is undeniable: Her Springfield, Illinois-based firm, CMW and Associates, derives all of its revenues from Uncle Sam.

The federal governemnt- the world's largest purchaser of goods and services, buying everything from food to military weapons parts to management services- offers a potentially super-size outlet for small businesses. Small firms won a record $96.8 billion in federal prime contracts in fiscal 2009, representing almost 22 percent of all federal spending.

"The federal government can be a good avenue for increasing small business revenues," says Margot Dorfman, vice president of the National Association of Small Business Contractors (NASBC). The NASBC is a 200,000-member Washington, D.C., trade association that helps small firms do business with the federal governemnt and prime contractors.

It can be challenging though. For many small businesses, it may require considerable capital and effort- and patience. A recent survey by American Express' small business division, reports that it took an average of 1.7 years for "active" small companies to land their first prime contract with the federal government.

Still, for amny businesses, it is worth the effort, especially during a downturned economy. Fortunately, help with federal government procurement comes from many quarters, including agencies that sport small business outreach offices (www.osdbu.gov/offices.html). Another key source is the U.S. Small Business Administration and free online training courses on how to do contracting work. Here are some recommendations that are valueable tips for securing government contracts.

  1. Know yourself. Understand your core competencies and offer products and services that you know you can deliver.

  2. Register your interests. Any firm doing business with the government has to follow certain set procedures. The company should first obtain an "identifier," such as a Data Universal Numbering System, or DUNS, number, a unique nine-character number that the government uses to identify the organization. Companies must also be registered in the Central Contractor Registration (http://www.ccr.gov/) database. This online portal creates a formal record for companies while also enabling federal agencies and prime contractors to find small-business contractors.

  3. Know Uncle Sam. Research what types of goods and services are purchased by the hundreds of federal agencies at www.usa.spending.gov. Initially, selct one or two agencies and study their operations and needs. Since the federal government is so big, it helps to focus. Agencies periodically ask small companies to respons to bid solicitations. Even if you don't win a bid, responding to these "Sources Sought" notifications is a good way to market your goods/services. Through "Sources Sought," you get your name out there to decision makers.

  4. Start small. Successful contractors advise starting with smaller contracts, which may lead to larger opportunities. Perharps test the waters with so-called "micro-purchases." For purchases between $3,000 and $150,000, the government can use cimplified procedures for soliciting and evaluating bids. In fact, federal rules require these "simplified purchases" be reservedfor small business unless the contracting official cannot obtain offers from two or more small firms that are competitive on price, quality and delivery. Again, check with individual agencies for these and other small-procurement opportunities. A good way to learn about becoming a prime contractor is to start out by being a subcontractor because it provides you with past-performance information that you can use to pursue your own prime contract. For subcontracting opportunities, check www.sba.gov/subnet.

  5. Read the fine print. Many contracts reference the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation, both of which post rules dictating how federal contacts are executed. Read the fine print carefully in EVERY contract and follow instructions.

  6. Build relationships. As gargantuan as the federal government is, securing a contract is often tied to personal relationships. That means attending PTAC, federal agency, NASBC or other outreach events and becoming acquainted with federal small-business representatives, prime contractors and small companies that sucessfully secured contracts. If you have built up a good relationship with somebody, you have a better chance of getting a contract.

  7. Get debriefed. Whether you win or lose a contract, ask for a debriefing, where a contracting official must discuss why a business did or did not win a contract. This will help you learn how to do it better, and it will also make you familiar with a contacting official's preferences.

Ultimately, getting a contract requires time, patience, money and commitment. Don't be discouraged if you don't get the first contract that you apply for. We hope these tips help!

Citing Meyer, Harvey. "Working with Uncle Sam: Federal contracts are out there for small businesses." The Costco Connection. April 2011: 23-24. Print.