Ron Harris, CEO of Financial Literacy Group, talks about hybrid mortgage arbitrage, at the Los Angeles Small Business Expo, September 8, 2022

Mortgage financial

Through our research, we found that a similar solution under current tax law would work for individuals, families, business owners, and nonprofits. Due to the IRS code change via the Cares Act 2020, we were able to design a consumer version of BOLI

Hybrid Mortgage Arbitrage allows any indebted consumer or business owner to bank like a bank and turn their debts into income and wealth.

Two IRS codes 7702 and 101a passed by Congress in the Cares Act 2020 allow every business owner in the country to establish their own personal bank. Combined with debt-mapping GPS technology that has already helped middle-class Americans pay off $2.3 billion in principal debt, every individual, family, or business owner can turn their debt and liabilities into equity. , income and wealth.

Algorithm-based GPS technology asks the user to strategically pay off their personal or business debt in a quarter of the time, a 30-year mortgage can be paid off in as little as 5-7 years, with no budget changes. Banks, credit unions, and other financial industry organizations use tax-advantaged products to offset costs.

When banks are able to purchase life insurance for executives, management, key employees or groups of employees, they are able to ensure that they have adequate death benefits in the event of their death. tragedy of the employee or manager. These death benefits will reduce taxes paid by the insured and provide future monthly cash flow to the bank. BOLI (Bank Owned Life Insurance) also represents 20% to 25% of the cash reserve that banks and credit unions are regulated.

A 2021 study of the location of U.S. banks reveals the amount of bank assets in life insurance. Here are the first 3:

$24,068,000,000 – Bank of America

$19,483,000,000 – Wells Fargo Bank

$12,139,000,000 – JPMorgan Chase Bank

Regardless of the type of BOLI program used, the biggest benefit is that income earned on the cash value of policies is generally not considered an employee’s taxable income – unlike the benefits you would typically see in a 401(k) or profit sharing. to plan.

“Through this BOLI study, we learned how he has already helped fund scholarships, build community buildings and more. be used by the middle class to turn their debt into income and generational wealth,” said Ron Harris, CEO of Financial Literacy Group.

“Through our research, we found that a similar solution under current tax law would work for individuals, families, business owners and non-profit organizations. the Cares Act 2020, we were able to design a consumer version of BOLI,” said Harris.

Now, the cash value of an IUL could include the policy owner’s debt balance, which would provide a tax-free death benefit, living benefits, and risk-free, tax-free potential earnings for similar earnings. .

This means that an individual, family or business owner could put the money needed to pay their debts into the policy and borrow that money while continuing to pay their debts.

“By using accelerated debt repayment and over-funding an IUL with the insured’s debt balance, the insured can fund their own bank in less than 10 years. Using a special endorsement that makes a policy liquid gives the insured access to growing cash value in the form of loans that never have to be repaid. This disrupts Infinite Banking”. Explain, Harris.

Because it’s an insurance company loan, it’s tax-free, and regardless of the size of the loan, it’s backed by the policy owner’s cash value, which was at originally the balance of the debt, the loan is paid by the guarantee when the insured dies.

Financial Literacy Group is changing the discourse on financial wellness, our solutions level the financial playing field between middle-class Americans and financial institutions. We teach adults who live on Main Street how to manage their finances like working people on Wall Street, one individual, family or small business owner at a time.

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Louis R. Hancock