Over the last 10 years the American housing market has been booming, property values rising across the board and construction was up to near all time highs. This led to empowerment of the American homeowner and first time buyers. With more possibilities due to the resulting rise in equity, countless homeowners began the process of improvement of their homes and setting their sites on bigger and better.



At the end of the last decade the first time home buyer, new to the real estate market and unaware of the trends in real estate, began to tap into their new found equity and over the next several years their spending habits began to look less and less responsible. Thinking the ?lucky streak? of rising equity would never end and fueled by the hype in the media, Mr. and Mrs. Homeowner begin to take on more and more debt than they will eventually be capable of handling.

Fast forward 8 years, the market generally speaking is beginning to cool off with real estate values at near all time highs. The fast 2 day time on market has turned into 2 months, 4 months and now average time is beginning to look like 6 months or more.

Being in the mortgage business, my wife and I had begun to realize just how serious this situation was becoming as client after client kept coming back to us for refi's. Don't get me wrong, we didn't mind all that much however, we knew that many of these clients, no matter how often we suggested, were in denial. They weren't going to change their spending habits for us or for themselves.

Finally, critical mass was reached. The next time we looked at their situation, there was no equity in their home, LTV was shot. Credit scores dropped, bills flowing in and a real estate market that was beginning to get flooded with inventory, short sales or long time on market. There was no easy answer to be found.

Just by chance we came in contact with a real estate agent we worked with in the past, an old timer in the industry who nearly had her watch set by the market trends. Come to find out she was phasing out of the business for a new venture. Something she said was ?The right product for the right time?. This new business turned out to be a concept that is not necessarily new, but has not been put to use in a systematic and deliberate way by the average person, the tools just weren't there before now. We're talking about interest arbitrage; interest cancellation. This involves ?floating? the banks money to cancel interest on a first mortgage and accelerating the pay off in record time.

We thought this sounded well and good, but we wanted to research this ourselves. In the end it all boiled down to the fact that we couldn't dispute the math. What we found was impressive to say the least. This turned out to be a ?roadmap? that we and our clients can use to get on financial track and stay there.

I hope you have found this article informative and interesting. Check back to see how this turns out. If you have any questions, feel free to contact me.

-Greg Campbell