HAPPY NEW YEAR!

AMS Founder Scott Powers

I know that 2006 has just begun, but let’s imagine that it is now Dec. 31st, 2006. Already, you ask? Yes. Now is the time to think about what kind of year you want 2006 to be.

How many people used your services? How many would do business with you again? Did you really deliver value? Did you really provide added value?

Your life is like a canvas. You are the painter. You can make the most beautiful picture you want. The question is do you believe?

I have shared with you in the past that your income is in direct relationship to you becoming before you can have.

All successful salespeople take inventory of the coming year. If your goal is to make more money and you already have a plan, maybe you just need to do more of the plan. Failing to plan is planning to fail.

What is your plan for:
• Direct Marketing (direct mail, radio, tv)
• Alliance Building (Realtors, financial planners, CPA’s)
• Recruiting (Loan Officers)
• Retention (Keeping your top producers)
• Ongoing education (AMSU)
• Customer Service (Adding value to your service)
• Keep in touch with previous customers (email, newsletter)


How about your personal goals?
• What are you going to do with all the money you make now that you are a top producer?
• Do you include your family in your goals? (new house, pool)
• Health and fitness goals.
• Vacation, don’t forget to take time off to unwind. Now is the time to start planning.
• Spend quality time with the family.
In other words, make sure your family enjoys your success as well.

Let me share this poem on success by Napoleon Hill with you.

I wish each and every one of you an incredibly successful 2006!!

In the words of my good friend Zig Ziglar, I will see you at the top.

Rick Garretson
AMS Recruiting Manager

Rick Garretson and his wife Wendy

Rick has been the Recruiting Manager for AMS since September and has recently taken over more responsibilities including overseeing Branch Ops Processing, Licensing and AMSU. Before Rick came to AMS he was an administrator, teacher and football coach in Anaheim, California for 17 years. He was offensive coordinator for a high school that played in one of the toughest high school football leagues in the nation. As offensive coordinator his offenses set many school and even 1 national record. He coached 50 different offensive players that went on to play in the college ranks. Some of these players include Kurt Vollers who currently plays in the NFL and Ryan Kalil the starting center for the USC Trojans.

According to Rick, coaching is the only method that allows you to stay a part of the game once you stop playing. He also believes that it gives you the opportunity to help young people develop their skills athletically, socially and academically. Football reveals the character of young men and provides the foundation for them to overcome the obstacles that present themselves both on and off the field. Coaches in both youth and high school football are mentors and role models for the youth of America, it doesn't matter if they are 8 or 18 years of age, they all respond to development and challenges.

There are many things that Rick uses from his coaching experience in the business world. He believes teaching, structure, goals, challenges and motivation are all reflected in business as they are in the coaching world. A head coach in Football will only be as successful as the assistants that he surrounds himself with. You must surround yourself with quality people and give them the responsibility to achieve the team (business) goals that are at stake. There is a saying in football, "you are only as strong as your weakest link", you better make sure you coach up the weaker players and get the most out of their abilities as possible.

When Rick isn't working he enjoys spending time with his wife of 16 years, Wendy, and being involved with his kids sporting activities. Wendy works in the Accounting department here at AMS. Their 3 kids are: Luaren 14 yrs, Darell 11 yrs and Mackensie 9 years. Lauren Lee attends South Valley Jr. High and is currently in the 8th grade; plays Soccer at her school and will attend Highland high school next year. Darell is in the 5th grade and attends Ashland Ranch Elementary; he was a Quarterback / linebacker on this year's ACYFL Jr. Pee Wee State Championship Football team (Gilbert Dawgs); He plays Basketball in the Wham Competitive Basketball League; he is also a member of the Chandler Blaze 11 U travel Baseball team. Mackensie is a 4th Grader at Ashland Ranch Elementary; plays basketball in the girls competitive Wham league; has played competitive softball in the sate of Calif. and will continue to play in the Gilbert National East softball league this spring.

Jeff's Tomatillo Chicken Enchiladas

INGREDIENTS:

1 small onion, thinly sliced

2 tablespoons olive oil

1-1/2 pounds thin chicken cutlets, sliced into 1/4-inch-wide strips

1 package (1.25 ounces) taco seasoning

2/3 cup water

1 jar (16 ounces) tomatillo salsa

8 white corn tortillas (6-inch)

3 tablespoons half-and-half

1 cup shredded Mexi-cheese blend

DIRECTIONS:
1. Heat oven to 375 degrees F. Saut¿ onion in oil in skillet 3 minutes. Add chicken; saut¿ 5 minutes. Add seasoning and water; cook 2 minutes. Take off heat.

2. Spread 1/4 cup salsa over bottom of 13 x 9 x 2-inch baking dish.

3. Place 4 tortillas on microwave-safe plate; sprinkle with 1 tablespoon water. Cover with damp toweling; microwave on high 30 seconds.

4. Working quickly, brush one side of each tortilla with salsa. Place 1/3 cup chicken mixture in center of coated side of each; roll up; place, seam side down, in prepared dish. Repeat steps 3 and 4 with remaining tortillas, filling.

5. Mix half-and-half, remaining salsa. Pour over enchiladas; brush to cover completely. Sprinkle with cheese.

6. Bake in 375 degree F oven 15 minutes.

Makes 8 enchiladas.

Joke Of The Week

Evasion Tactics

A police officer pulls a guy over for speeding and has the following exchange:

Officer: May I see your driver's license?

Driver: I don't have one. I had it suspended when I got my 5th DUI.

Officer: May I see the owner's card for this vehicle?

Driver: It's not my car. I stole it.

Officer: The car is stolen?

Driver: That's right. But come to think of it, I think I saw the owner's card in the glove box when I was putting my gun in there.

Officer: There's a gun in the glove box?

Driver: Yes sir. That's where I put it after I shot the woman who owns this car and stuffed her in the trunk.

Officer: There's a BODY in the TRUNK?!?!?

Driver: Yes, sir.

Hearing this, the officer immediately called his captain. The car was quickly surrounded by police, and the captain approached the driver to handle the tense situation:

Captain: Sir, can I see your license?

Driver: Sure. Here it is. It was valid.

Captain: Who's car is this?

Driver: It's mine, officer. Here's the registration.

Captain: Could you slowly open your glove box so I can see if there's a gun in it?

Driver: Yes, sir, but there's no gun in it.

Sure enough, there was nothing in the glove box.

Captain: Would you mind opening your trunk? I was told you said there's a body in it.

Driver: No problem. Trunk is opened; no body.

Captain: I don't understand it. The officer who stopped you said you told him you didn't have a license, stole the car, had a gun in the glove-box, and that there was a body in the trunk?

Driver: Yeah, and I'll bet the big liar told you I was speeding too!

Community Affairs Update

Happy New Year! I hope 2006 has started out with a bang for everybody. Our community events are under way for January and February. Please remember I need volunteers. There are many events throughout the year for everyone to be involved. Here’s what’s happening:

Jason Faraday Working The Booth At The Home Show

The Maricopa County Home Show
Jan. 13, 14 and 15th
Our booth was placed at the north entrance of the show. All consumers entering the Home Show had to pass by our booth first. It was great exposure for both US Preferred Realty and American Mortgage Specialist. Thanks to all who helped!

Run For London
Jan. 21st
This benefit race will take place at the Queen Creek High School. There will be a 2 Mile Fun Run and Walk, and a ½ Marathon. We will have a booth with both USPR and AMS banners, and we will be handing out power bars with our information to all of the runners.

Anyone interested in donating should make your checks payable to:
London Solomon’s Benefit Fund
Bank Of America
Account #004371924992

Special Olympics-FBR Open
Feb. 2nd
We have been designated to work on the 2nd, which is a Thursday, from 10-6. I need as many volunteers as possible!! We have a great opportunity to help the Special Olympics out with this benefit. They are one of the charities that will benefit from this golf tournament. We will be working with them several times throughout the year. Please call or e-mail me ASAP to sign up. I will also be passing around sign-up sheets. We need as many people as possible for this event. It will be a blast!

Thanks to all of you who have made our community projects a success! We are moving forward with the community and it’s working!

PARTNERING FOR SUCCESS

Set-Up Coordinator
American Mortgage Specialists, Inc. is now hiring for a Set-Up Coordinator. This person must exhibit excellent organizational skills, multi-tasking abilities, be very thorough and must be able to stay in control of a situation. They must already posess knowledge of loans and have at least 2 years of experience in the mortgage industry.
Please fax resumes to 480.730.4456 ATTN Aggie.



File Clerk/Office Assistant
(2 Full Time Positions)
File Clerk/Office Assistant
Positions have been filled.

Freddie Macs ARM Survey Notes Increased Lender Discounts

Freddie Mac released its 22nd annual Adjustable Rate Mortgage (ARM) Survey last week. The study found that traditional 1-year ARMs have lost even more market share to hybrid ARMs and that lenders have continued, even increased, initial period discounts to borrowers to keep ARMs viable in the mortgage marketplace despite a flattening yield curve.

Perhaps a brief jargon translation is appropriate here, interspersed with a discussion of Freddie Mac's survey results.

The 1-year ARM is a mortgage in which the rate is set for one year and then adjusts every year thereafter, not willy-nilly, but with standards and restrictions based on indexes and margins. A hybrid ARM is one with a longer term introductory period - three, five, seven, even ten years during which the rate remains at its original level and then adjusts every year thereafter. Borrowers, particularly those who will be stretching to make payments often choose an ARM because the lower payments for the first year or first five years allow them to qualify for a mortgage.

But at present the yield curve is flat. The yield curve is the difference between the return on short term and long term interest rates. At present, economic manipulations such as the many mostly one-quarter percent adjustments the Federal Reserve has made to the Federal Funds Rate over the last months are not, for whatever reason, being reflected by or reacted to by longer term rates. The result is a decreasing difference between long term rates, say ten or 30 years, and those available to borrowers taking loans for 30, 90, or 365 days. As the difference between long term and short term rates lessen, it is said that the yield curve "flattens."

Economists state that a flattening yield curve has ramifications for the entire economy. Of most concern is the history of, what happens when the two indicators have inverted, i.e., long term rates have dropped below short term rates. Without exception since 1969 this has signaled that the financial markets expect a downturn, which would force the Fed to cut rates. Such an inversion has, with a few exceptions, been followed by a recession.

According to the Freddie Mac report, the flattening of the yield curve was clearly evident in the Treasury market over the course of 2005: The rate spread between 10-year and 1-year constant-maturity T-bill yields was 1.5 percentage points at the start of the year, yet ended the year close to zero. During periods of a flat yield curve, the initial interest savings on ARMs becomes small relative to fixed-rate mortgages. As a result, ARMs are less attractive to borrowers.

So, if a homebuyer or homeowner is given the choice between borrowing at 7 percent for a year with the possibility the rate could adjust upwards as much as two or three points at the end of that period or taking a loan at 7.35 percent with the rate locked down for a ten or a 30 year period, the choice should be obvious. The benefits of the fixed rate may, however, be mitigated by the initial loan payment which the borrower might not be able to manage at the higher fixed rate. Such borrowers were either forced out of the market or forced to scale back their home-buying or refinancing plans.

No business wants to lose a customer, so to keep adjustable rate mortgages affordable, lenders discount the initial term to keep a reasonable difference between ARMs, particularly the short term ones, and fixed rate mortgages.

"In the last half of 2000, the last time the Treasury yield curve inverted, the one-year conforming, conventional ARM rate had a discount of about 1.6 percentage points," according to Freddie Mac economist Michael Schoenbeck.. "Yet the ARM share of conventional originations was in the 15 to 20 percent range, well below the shares for much of 2004 and 2005."

Yet, through this past November, ARMs accounted for about 32 percent of loan applications in 2005, according to Freddie Mac's weekly Primary Mortgage Market Survey. Since 1995, the first year that Freddie Mac collected ARM share data, the ARM share has fluctuated between an annual low of 11 percent in 1998 and a high of 33 percent in 2004.

Compared with the 2004 ARM survey, savings on ARMs are now smaller, even with the initial rate discounts from lenders. For example, the one-year adjustable carried a rate that was 1.6 percentage points below a 30-year fixed-rate loan in the last survey, but only 0.9 percentage points lower in the current survey, reflecting the rise in short-term interest rates over the last several months.

Over the last several years, annually adjusting ARMs with an initial "fixed-rate" period of more than one year, known as "hybrid" ARMs, have grown in popularity. Within that product type, ARMs with an initial fixed-rate period of five years, known as "5/1" ARMs, have been the dominant choice of consumers. According to Freddie Mac Chief Economist Frank Nothaft, "In 2005, two-in-five ARMs were 5/1 hybrids."

The Freddie survey, based on responses from 106 ARM lenders during the period of December 19 to December 22, found that starting rates for ARMS would have increased even further where it not for greater initial rate discounts which had the effect of, at least temporarily "unflattening" the yield curve. Lenders during this period, in fact through most of the year, were typically offering a lower initial interest rate than what the fully adjusted rate would be at the time of origination. For example, a 1-year ARM with an underlying index rate of 4.37 percent and a margin (the premium added to the index rate) of 2.77 percent would have a "fully indexed rate" of 7.14 percent. Lenders are, in this example, discounting the rate by 1.92 percent, bringing the initial interest rate to 5.22 percent. These discounts drop as the initial loan period (three, five, or ten years) increase. In our example, given a 4.37 index and 2.77 margin, the discount of 1.92 percent for a one year loan would decrease to 1.04 for a 10/1 hybrid, resulting in an initial interest rate for the latter of 6.10 percent. Using Freddie Mac's Primary Mortgage Market Survey for the week ending December 22, 2005, the interest rate on conventional, conforming, 30-year FRM was 6.26 percent with average fees and points of 0.6 percentage points, or an "effective" rate of 6.39 percent.

The 5/1 ARM, with a lenders discount of 1.34 percent and an initial rate of 5.80 percent probably struck the most favorable balance between affordability and safety (for five years at least) for those who were either unable to afford payments on a 30 year fixed or did not plan to hold on to their house or their mortgage for more than five years.

In last year's survey, the discount on 1-year ARMS averaged 1.4 percentage points (conventional and Treasury indexed). This year it had increased by a half percentage point to an average of 1.9 points. The average over the last 22 years has been 1.7 percent.

The survey found that 5/1 hybrid was available at four-out-of-five lenders that offered an ARM product, but only 56 percent of the lenders that offered ARMs offer the traditional one-year ARM - the lowest share in the 22-year history of the survey.

Potential homebuyers and existing homeowners opting for a Treasury-indexed ARM amortized over 30 years with a loan amount of about $200,000 can expect initial savings (up until the first rate adjustment) over a fixed-rate mortgage of up to:

• About $1,630 for one-year conforming ARMs;
• Almost $990 for 3/1 ARMs;
• About $1,110 for 3/3 ARMs (wherein the mortgage rate adjusts every three years);
• Nearly $760 for 5/1 ARMs;
• Around $510 for a 7/1 ARM.