MYFORECLOSUREHELPER

What to Do When You Are Turned Down for a Mortgage

2011-11-18T06:05:00.001-08:00

If you are interested in buying real estate but had your application for a home loan rejected, you have options. Plenty of them.

Of course you can ask the lending institution why they put the kibosh on your application but they won’t likely tell you the complete story because they are afraid you’ll sue them. There are many factors that the bank considers when deciding whether or not to grant you the loan.

Some of these reasons may have nothing to do with you at all. The bank has its own guidelines and they’ll never share them with you as I said. But regardless, one of the most important considerations is your credit score. And as you’ll see, you can do plenty about that.

But let’s get back to business. You’ve received your loan rejections letter, now what do you do?

First, decide if you want to try to go forward with the purchase anyway. If so, this will require you to find financing alternatives. One good option is getting the seller to carry the mortgage. Even if you have bad credit you still might be able to achieve this. That’s because interest rates are so low right now, sellers might be very interested in getting more than 1% on their money. Of course this will probably work best if you provide a significant down payment on the purchase. But if the seller is very motivated, he or she might be willing to provide financing without a substantial down payment.

Another path is to work with “hard money lenders” (firms that loan money to distressed buyers) charge enormously high fees and interest rates. If that is the only path available to you, I’d suggest you follow the steps below and reapply later on. Don’t ever take hard money loans if you can avoid it – even if it means you don’t buy the property. Usurious rates are almost never worth paying.

Regardless of your decision to go ahead with the purchase or not, you should do everything possible to make yourself a more attractive borrower.

1. Check your credit score and report.

Are there any errors on your report? If so, you can correct credit report errors yourself in many cases. But the only way you’ll know if there are errors is if you first get a hold of your report. Fortunately, you can do that easily. There are even ways to get your free credit score without using a credit card.

2. Start building a high credit score

You will need to improve your credit score. Make sure you don’t carry a credit card balance every month. Pay off your consumer debt every month on time. If you need to consolidate your debt, consider doing so by using a peer-to-peer lending company like Lending Club. This is a great way to pay off high cost credit card debt and get a lower monthly payment and lower interest rate.

3. Fall in love with your job

One fear that banks have is when a borrower changes jobs often. It demonstrates instability and higher risk. Your best bet is to stick with your job for at least 3 years in order to garner maximum brownie points with lenders. Oh…and keeping a job is also a great way to stay out of debt too. Nice side benefit. The younger you are, the more forgiving the banks are when it comes to job stability. Take this to mean that as you get older, lenders will look for more than 3 years. Conclusion? Don’t take jobs you don’t think you’ll keep. This goes for folks without a college diploma. You can still find great jobs without a college degree.

4. Don’t live with flakes

If someone in your house is a deadbeat, your address might be flagged and that might be at least partially responsible for your loan rejection. If someone who lives at your home didn’t make a credit card payment or payment on another loan, that’s probably been reported to one of the three credit bureaus and you’re going to get twisted for it.

Either ask the person who is casting a giant shadow on your loan app to move out or explain to the bank manager that this person is in no way financially associated with you – assuming that’s true.

5. Round Peg – Square Hole

Each bank has its own lending policies as I said above. That means they decide what kind of loans they want to make to which kinds of people. For reasons they’ll never explain, you may not fit their profile. So if you get a loan rejected and can’t understand why, go speak to the manager. Ask her if the decision would be positive if you are able to pony up more security. You could get someone to guarantee your loan or be a co-borrower. You could also offer collateral.

Bottom line? Try to find out as much as you can as to why your loan was rejected. Clean up any errors on your credit report, take steps outlined above to improve your credit score and go back and try again.

This is a guest post from Neal Frankle. He is A Certified Financial Planner in Los Angeles. He is also the owner of Wealth Pilgrim, a top-notch personal finance blog.

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4.5 million foreclosed borrowers may be eligible for reviews

2011-10-25T06:01:00.000-07:00

By Julie Schmit, USA TODAY
Nearly 4.5 million current and former U.S. homeowners will soon get a chance to have their foreclosure cases reviewed for mistakes and potential restitution.

Next month, the U.S. government expects the first wave of homeowners to receive its letters in the mail, informing them of their right to ask for a foreclosure review, says Office of the Comptroller spokesman Bryan Hubbard.

Last month, independent consultants hired by lenders also began combing industry data to look for mistakes in foreclosure cases handled by 14 of the nation's largest mortgage servicers: Bank of America, Citibank, JPMorgan Chase, Wells Fargo, Ally Financial, Aurora Bank, EverBank Financial, HSBC, MetLife, OneWest, PNC, Sovereign Bank, SunTrust Banks and U.S. Bancorp.

Reviews will take months to complete. The first consumers could see cases resolved this spring, according to deadlines imposed on the servicers.

Remedies will vary based on the degree of injury, said John Walsh, acting Comptroller of the Currency, in a speech last month.

The reviews cover homeowners in any stage of the foreclosure process on a primary home in 2009 or 2010. Anyone who meets that requirement — and was a customer of one of the 14 servicers — will get a review if they ask. The servicers include Bank of America, Citibank, JPMorgan Chase and Wells Fargo.

The reviews were ordered as part of federal enforcement actions announced in April after a federal investigation last year found "significant weaknesses" in mortgage servicer practices.

The actions include requirements that servicers change some foreclosure practices, such as giving distressed borrowers a single point of contact. But the foreclosure reviews are the "most ambitious and complex" aspect of the action, Walsh said.

The OCC, along with the Federal Reserve, will oversee the reviews.

Whether homeowners were wronged will be decided by independent consultants hired by the servicers but approved by regulators.

The consultants will also decide remedies, which will be spot-checked by regulators. Regulators have also instructed the consultants what errors to seek.

No estimate of cost to servicers has been provided.

One company will process claims and provide one website and telephone number for consumers wanting reviews, the OCC says. The information will be in the consumer letters.

The OCC hasn't released the names of the independent consultants. That is under consideration, Hubbard says.

Consumer advocates say more information, including the names of the consultants doing the reviews and exactly how the reviews will be done, needs to be public to assure fairness and thoroughness.

"The process does seem ambitious," says Alys Cohen, attorney of the National Consumer Law Center. "But we have a lot of questions."

Restitution could be required for a broad range of issues, including if homeowners:

•Paid impermissible fees or penalties.

•Paid too much or had payments misapplied.

•Were wrongly denied loan modifications.

•Were wrongly foreclosed upon.

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What the Heck is Occupy Wall Street?

2011-10-19T14:01:00.000-07:00

The Crisis Continues…and More of the Same from Congress

Regardless of whether you agree with the Occupy Wall Street movement, it’s undeniable that the majority of Americans are crying out for lawmakers to help put people back to work and restore stability to families and communities.

Just last week, members of the Senate couldn’t even agree to move forward on the "American Jobs Act," a package of commonsense bipartisan proposals to create jobs and bring relief to struggling families.

Our economy remains listless.

We face record-high unemployment numbers, and families continue to confront the harsh reality of losing their home.

Even programs proven to be effective are under siege.

Now more than ever, consumers seek clarity in the financial market. Community-based housing counselors offer free advice that does just that.

Funded through the U.S. Department of Housing and Urban Development (HUD), the Housing Counseling Assistance Program trains counselors who serve as trusted liaisons to help families understand the terms of their loans, assess whether or not they can take on a mortgage, and avoid predatory loans.

Studies indicate that such guidance improves consumers’ financial decisions.

This program is at risk of being defunded. The Senate passed a bill with strong support and funding, but the House of Representatives plans to cut off all monies to this vital program.

Email your local representatives and ask them to appropriate $87.5 million to housing counseling funding for fiscal year 2012.

Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans

2011-08-22T08:26:00.000-07:00

Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.

“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”

Foreign Borrowers

It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. They included Edinburgh-based Royal Bank of Scotland Plc, which took $84.5 billion, the most of any non-U.S. lender, and Zurich-based UBS AG (UBSN), which got $77.2 billion. Germany’s Hypo Real Estate Holding AG borrowed $28.7 billion, an average of $21 million for each of its 1,366 employees.

The largest borrowers also included Dexia SA (DEXB), Belgium’s biggest bank by assets, and Societe Generale SA, based in Paris, whose bond-insurance prices have surged in the past month as investors speculated that the spreading sovereign debt crisis in Europe might increase their chances of default.

The $1.2 trillion peak on Dec. 5, 2008 -- the combined outstanding balance under the seven programs tallied by Bloomberg -- was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

Peak Balance

The balance was more than 25 times the Fed’s pre-crisis lending peak of $46 billion on Sept. 12, 2001, the day after terrorists attacked the World Trade Center in New York and the Pentagon. Denominated in $1 bills, the $1.2 trillion would fill 539 Olympic-size swimming pools.

The Fed has said it had “no credit losses” on any of the emergency programs, and a report by Federal Reserve Bank of New York staffers in February said the central bank netted $13 billion in interest and fee income from the programs from August 2007 through December 2009.

“We designed our broad-based emergency programs to both effectively stem the crisis and minimize the financial risks to the U.S. taxpayer,” said James Clouse, deputy director of the Fed’s division of monetary affairs in Washington. “Nearly all of our emergency-lending programs have been closed. We have incurred no losses and expect no losses.”

While the 18-month U.S. recession that ended in June 2009 after a 5.1 percent contraction in gross domestic product was nowhere near the four-year, 27 percent decline between August 1929 and March 1933, banks and the economy remain stressed.

Odds of Recession

The odds of another recession have climbed during the past six months, according to five of nine economists on the Business Cycle Dating Committee of the National Bureau of Economic Research, an academic panel that dates recessions.

Bank of America’s bond-insurance prices last week surged to a rate of $342,040 a year for coverage on $10 million of debt, above where Lehman Brothers Holdings Inc. (LEHMQ)’s bond insurance was priced at the start of the week before the firm collapsed. Citigroup’s shares are trading below the split-adjusted price of $28 that they hit on the day the bank’s Fed loans peaked in January 2009. The U.S. unemployment rate was at 9.1 percent in July, compared with 4.7 percent in November 2007, before the recession began.

Homeowners are more than 30 days past due on their mortgage payments on 4.38 million properties in the U.S., and 2.16 million more properties are in foreclosure, representing a combined $1.27 trillion of unpaid principal, estimates Jacksonville, Florida-based Lender Processing Services Inc.

Liquidity Requirements

“Why in hell does the Federal Reserve seem to be able to find the way to help these entities that are gigantic?” U.S. Representative Walter B. Jones, a Republican from North Carolina, said at a June 1 congressional hearing in Washington on Fed lending disclosure. “They get help when the average businessperson down in eastern North Carolina, and probably across America, they can’t even go to a bank they’ve been banking with for 15 or 20 years and get a loan.”

The sheer size of the Fed loans bolsters the case for minimum liquidity requirements that global regulators last year agreed to impose on banks for the first time, said Litan, now a vice president at the Kansas City, Missouri-based Kauffman Foundation, which supports entrepreneurship research. Liquidity refers to the daily funds a bank needs to operate, including cash to cover depositor withdrawals.

The rules, which mandate that banks keep enough cash and easily liquidated assets on hand to survive a 30-day crisis, don’t take effect until 2015. Another proposed requirement for lenders to keep “stable funding” for a one-year horizon was postponed until at least 2018 after banks showed they’d have to raise as much as $6 trillion in new long-term debt to comply.

‘Stark Illustration’

Regulators are “not going to go far enough to prevent this from happening again,” said Kenneth Rogoff, a former chief economist at the International Monetary Fund and now an economics professor at Harvard University.

Reforms undertaken since the crisis might not insulate U.S. markets and financial institutions from the sovereign budget and debt crises facing Greece, Ireland and Portugal, according to the U.S. Financial Stability Oversight Council, a 10-member body created by the Dodd-Frank Act and led by Treasury Secretary Timothy Geithner.

“The recent financial crisis provides a stark illustration of how quickly confidence can erode and financial contagion can spread,” the council said in its July 26 report.

21,000 Transactions
Any new rescues by the U.S. central bank would be governed by transparency laws adopted in 2010 that require the Fed to disclose borrowers after two years.

Fed officials argued for more than two years that releasing the identities of borrowers and the terms of their loans would stigmatize banks, damaging stock prices or leading to depositor runs. A group of the biggest commercial banks last year asked the U.S. Supreme Court to keep at least some Fed borrowings secret. In March, the high court declined to hear that appeal, and the central bank made an unprecedented release of records.

Data gleaned from 29,346 pages of documents obtained under the Freedom of Information Act and from other Fed databases of more than 21,000 transactions make clear for the first time how deeply the world’s largest banks depended on the U.S. central bank to stave off cash shortfalls. Even as the firms asserted in news releases or earnings calls that they had ample cash, they drew Fed funding in secret, avoiding the stigma of weakness.

Morgan Stanley Borrowing

Two weeks after Lehman’s bankruptcy in September 2008, Morgan Stanley countered concerns that it might be next to go by announcing it had “strong capital and liquidity positions.” The statement, in a Sept. 29, 2008, press release about a $9 billion investment from Tokyo-based Mitsubishi UFJ Financial Group Inc., said nothing about Morgan Stanley’s Fed loans.

That was the same day as the firm’s $107.3 billion peak in borrowing from the central bank, which was the source of almost all of Morgan Stanley’s available cash, according to the lending data and documents released more than two years later by the Financial Crisis Inquiry Commission. The amount was almost three times the company’s total profits over the past decade, data compiled by Bloomberg show.

Mark Lake, a spokesman for New York-based Morgan Stanley, said the crisis caused the industry to “fundamentally re- evaluate” the way it manages its cash.

“We have taken the lessons we learned from that period and applied them to our liquidity-management program to protect both our franchise and our clients going forward,” Lake said. He declined to say what changes the bank had made.

Acceptable Collateral

In most cases, the Fed demanded collateral for its loans -- Treasuries or corporate bonds and mortgage bonds that could be seized and sold if the money wasn’t repaid. That meant the central bank’s main risk was that collateral pledged by banks that collapsed would be worth less than the amount borrowed.

As the crisis deepened, the Fed relaxed its standards for acceptable collateral. Typically, the central bank accepts only bonds with the highest credit grades, such as U.S. Treasuries. By late 2008, it was accepting “junk” bonds, those rated below investment grade. It even took stocks, which are first to get wiped out in a liquidation.

Morgan Stanley borrowed $61.3 billion from one Fed program in September 2008, pledging a total of $66.5 billion of collateral, according to Fed documents. Securities pledged included $21.5 billion of stocks, $6.68 billion of bonds with a junk credit rating and $19.5 billion of assets with an “unknown rating,” according to the documents. About 25 percent of the collateral was foreign-denominated.

‘Willingness to Lend’

“What you’re looking at is a willingness to lend against just about anything,” said Robert Eisenbeis, a former research director at the Federal Reserve Bank of Atlanta and now chief monetary economist in Atlanta for Sarasota, Florida-based Cumberland Advisors Inc.

The lack of private-market alternatives for lending shows how skeptical trading partners and depositors were about the value of the banks’ capital and collateral, Eisenbeis said.

“The markets were just plain shut,” said Tanya Azarchs, former head of bank research at Standard & Poor’s and now an independent consultant in Briarcliff Manor, New York. “If you needed liquidity, there was only one place to go.”

Even banks that survived the crisis without government capital injections tapped the Fed through programs that promised confidentiality. London-based Barclays Plc (BARC) borrowed $64.9 billion and Frankfurt-based Deutsche Bank AG (DBK) got $66 billion. Sarah MacDonald, a spokeswoman for Barclays, and John Gallagher, a spokesman for Deutsche Bank, declined to comment.

Below-Market Rates

While the Fed’s last-resort lending programs generally charge above-market interest rates to deter routine borrowing, that practice sometimes flipped during the crisis. On Oct. 20, 2008, for example, the central bank agreed to make $113.3 billion of 28-day loans through its Term Auction Facility at a rate of 1.1 percent, according to a press release at the time.

The rate was less than a third of the 3.8 percent that banks were charging each other to make one-month loans on that day. Bank of America and Wachovia Corp. each got $15 billion of the 1.1 percent TAF loans, followed by Royal Bank of Scotland’s RBS Citizens NA unit with $10 billion, Fed data show.

JPMorgan Chase & Co. (JPM), the New York-based lender that touted its “fortress balance sheet” at least 16 times in press releases and conference calls from October 2007 through February 2010, took as much as $48 billion in February 2009 from TAF. The facility, set up in December 2007, was a temporary alternative to the discount window, the central bank’s 97-year-old primary lending program to help banks in a cash squeeze.

‘Larger Than TARP’

Goldman Sachs Group Inc. (GS), which in 2007 was the most profitable securities firm in Wall Street history, borrowed $69 billion from the Fed on Dec. 31, 2008. Among the programs New York-based Goldman Sachs tapped after the Lehman bankruptcy was the Primary Dealer Credit Facility, or PDCF, designed to lend money to brokerage firms ineligible for the Fed’s bank-lending programs.

Michael Duvally, a spokesman for Goldman Sachs, declined to comment.

The Fed’s liquidity lifelines may increase the chances that banks engage in excessive risk-taking with borrowed money, Rogoff said. Such a phenomenon, known as moral hazard, occurs if banks assume the Fed will be there when they need it, he said. The size of bank borrowings “certainly shows the Fed bailout was in many ways much larger than TARP,” Rogoff said.

TARP is the Treasury Department’s Troubled Asset Relief Program, a $700 billion bank-bailout fund that provided capital injections of $45 billion each to Citigroup and Bank of America, and $10 billion to Morgan Stanley. Because most of the Treasury’s investments were made in the form of preferred stock, they were considered riskier than the Fed’s loans, a type of senior debt.

Dodd-Frank Requirement

In December, in response to the Dodd-Frank Act, the Fed released 18 databases detailing its temporary emergency-lending programs.

Congress required the disclosure after the Fed rejected requests in 2008 from the late Bloomberg News reporter Mark Pittman and other media companies that sought details of its loans under the Freedom of Information Act. After fighting to keep the data secret, the central bank released unprecedented information about its discount window and other programs under court order in March 2011.

Bloomberg News combined Fed databases made available in December and July with the discount-window records released in March to produce daily totals for banks across all the programs, including the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, Commercial Paper Funding Facility, discount window, PDCF, TAF, Term Securities Lending Facility and single-tranche open market operations. The programs supplied loans from August 2007 through April 2010.

Rolling Crisis

The result is a timeline illustrating how the credit crisis rolled from one bank to another as financial contagion spread.

Fed borrowngs by Societe Generale (GLE), France’s second-biggest bank, peaked at $17.4 billion in May 2008, four months after the Paris-based lender announced a record 4.9 billion-euro ($7.2 billion) loss on unauthorized stock-index futures bets by former trader Jerome Kerviel.

Morgan Stanley’s top borrowing came four months later, after Lehman’s bankruptcy. Citigroup crested in January 2009, as did 43 other banks, the largest number of peak borrowings for any month during the crisis. Bank of America’s heaviest borrowings came two months after that.

Sixteen banks, including Plano, Texas-based Beal Financial Corp. and Jacksonville, Florida-based EverBank Financial Corp., didn’t hit their peaks until February or March 2010.

Using Subsidiaries

“At no point was there a material risk to the Fed or the taxpayer, as the loan required collateralization,” said Reshma Fernandes, a spokeswoman for EverBank, which borrowed as much as $250 million.

Banks maximized their borrowings by using subsidiaries to tap Fed programs at the same time. In March 2009, Charlotte, North Carolina-based Bank of America drew $78 billion from one facility through two banking units and $11.8 billion more from two other programs through its broker-dealer, Bank of America Securities LLC.

Banks also shifted balances among Fed programs. Many preferred the TAF because it carried less of the stigma associated with the discount window, often seen as the last resort for lenders in distress, according to a January 2011 paper by researchers at the New York Fed.

After the Lehman bankruptcy, hedge funds began pulling their cash out of Morgan Stanley, fearing it might be the next to collapse, the Financial Crisis Inquiry Commission said in a January report, citing interviews with former Chief Executive Officer John Mack and then-Treasurer David Wong.

Borrowings Surge

Morgan Stanley’s borrowings from the PDCF surged to $61.3 billion on Sept. 29 from zero on Sept. 14. At the same time, its loans from the Term Securities Lending Facility, or TSLF, rose to $36 billion from $3.5 billion. Morgan Stanley treasury reports released by the FCIC show the firm had $99.8 billion of liquidity on Sept. 29, a figure that included Fed borrowings.

“The cash flow was all drying up,” said Roger Lister, a former Fed economist who’s now head of financial-institutions coverage at credit-rating firm DBRS Inc. in New York. “Did they have enough resources to cope with it? The answer would be yes, but they needed the Fed.”

While Morgan Stanley’s Fed demands were the most acute, Citigroup was the most chronic borrower among the largest U.S. banks. The New York-based company borrowed $10 million from the TAF on the program’s first day in December 2007 and had more than $25 billion outstanding under all programs by May 2008, according to Bloomberg data.

Tapping Six Programs

By Nov. 21, when Citigroup began talks with the government to get a $20 billion capital injection on top of the $25 billion received a month earlier, its Fed borrowings had doubled to about $50 billion.

Over the next two months the amount almost doubled again. On Jan. 20, as the stock sank below $3 for the first time in 16 years amid investor concerns that the lender’s capital cushion might be inadequate, Citigroup was tapping six Fed programs at once. Its total borrowings amounted to more than twice the federal Department of Education’s 2011 budget.

Citigroup was in debt to the Fed on seven out of every 10 days from August 2007 through April 2010, the most frequent U.S. borrower among the 100 biggest publicly traded firms by pre- crisis market valuation. On average, the bank had a daily balance at the Fed of almost $20 billion.

‘Help Motivate Others’

“Citibank basically was sustained by the Fed for a very long time,” said Richard Herring, a finance professor at the University of Pennsylvania in Philadelphia who has studied financial crises.

Jon Diat, a Citigroup spokesman, said the bank made use of programs that “achieved the goal of instilling confidence in the markets.”

JPMorgan CEO Jamie Dimon said in a letter to shareholders last year that his bank avoided many government programs. It did use TAF, Dimon said in the letter, “but this was done at the request of the Federal Reserve to help motivate others to use the system.”

The bank, the second-largest in the U.S. by assets, first tapped the TAF in May 2008, six months after the program debuted, and then zeroed out its borrowings in September 2008. The next month, it started using TAF again.

On Feb. 26, 2009, more than a year after TAF’s creation, JPMorgan’s borrowings under the program climbed to $48 billion. On that day, the overall TAF balance for all banks hit its peak, $493.2 billion. Two weeks later, the figure began declining.

“Our prior comment is accurate,” said Howard Opinsky, a spokesman for JPMorgan.

‘The Cheapest Source’

Herring, the University of Pennsylvania professor, said some banks may have used the program to maximize profits by borrowing “from the cheapest source, because this was supposed to be secret and never revealed.”

Whether banks needed the Fed’s money for survival or used it because it offered advantageous rates, the central bank’s lender-of-last-resort role amounts to a free insurance policy for banks guaranteeing the arrival of funds in a disaster, Herring said.

An IMF report last October said regulators should consider charging banks for the right to access central bank funds.

“The extent of official intervention is clear evidence that systemic liquidity risks were under-recognized and mispriced by both the private and public sectors,” the IMF said in a separate report in April.

Access to Fed backup support “leads you to subject yourself to greater risks,” Herring said. “If it’s not there, you’re not going to take the risks that would put you in trouble and require you to have access to that kind of funding.”

To contact the reporters on this story: Bradley Keoun in New York at bkeoun@bloomberg.net; Phil Kuntz in New York at Pkuntz1@bloomberg.net.

To contact the editor responsible for this story: David Scheer in New York at dscheer@bloomberg.net.

Source

Upcoming Treasury Auctions

2011-07-07T13:23:00.000-07:00

Fort Lauderdale Fine Jewelry Auction

NEW WAREHOUSE LOCATION!

VSE Pompano Beach Warehouse
2951 NW 27th Ave.
Pompano Beach, FL 33069

Previews - Monday 9am-4pm, Tuesday 8:30am-12:30pm, VSE Warehouse

Auction - Wednesday 9am, Broward County Convention Center

Dayton, NJ - Online Sale

Preview July 18th 9am-4pm

Online bidding begins Monday and extends through July 19th. Today we added over 20 lots of jewelry, collector coins, gold, silver, and platinum bullion to the sale.

Register and bid at www.ricklevin.com

Tax Certificate Sales... just ended darn.

2011-06-01T16:52:00.000-07:00

County Tax Certificate Auctions
Check here regularly for updates and additional counties served by Realauction

County Property Auctions
Check here regularly for updates and additional counties served by Realauction.

Novice investors can lose big money in online foreclosure auctions
More than a year after courthouse foreclosure auctions moved online in Palm Beach, Broward and Miami-Dade counties, bidders are still making mistakes, some worth tens of thousands of dollars.

Polk County Clerk Begins Online Tax Deed Sales
Following last Septemberâ€™s successful implementation of conducting foreclosure sales via the internet, Richard Weiss, Polk County Clerk of the Circuit Court, today announced that tax deed sales will also be taking place online.

With just a few clicks of the mouse, Orlando accountant John Dey bought a Lake Nona-area house that was auctioned off during one of Orange County's new, online foreclosure auctions.
And get this: In the kind of deal espoused by get-rich-quick authors, he paid just $20,000 for a house worth close to $200,000.

Sarasota County to Collect More Delinquent Taxes With Realauction
Realauction is pleased to announce the implementation of Revenue Recovery Services for the Sarasota County Tax Collector. This move will assist the County to collect additional funds owed in delinquent personal property taxes while saving taxpayer dollars.

Orange launches online foreclosure auctions
Today, the Orange County Clerk of the Court will launch a long-awaited online foreclosure auction service that allows bidders to purchase properties on the Internet rather than in the courthouse.

Highlands County Tax Collector and Realauction Team Up to Optimize Delinquent Collections
Sebring, FL â€“ Realauction.com announced that it has signed Highlands County, Florida as another client for its Revenue Recovery Services to collect delinquent tangible personal property taxes.

Tax-lien sale generates $8.5 million
The Arapahoe County Treasurerâ€™s Office has generated more than $8.5 million from its recent annual online tax-lien sale.

Nassau County Tax Collector to Collect Tangible Property Taxes With Realauction
The Nassau County Tax Collector is known for utilizing the latest technology and services to serve its citizens. The Honorable John M. Drew is a champion of that trend, and has selected Realauctionâ€™s new Revenue Recovery Service to collect delinquent tangible personal property taxes.

Miami-Dade County Deploys Online Foreclosure Auction
The rash of foreclosures in 2009 created a desperate situation for county clerks required to process the resulting foreclosed home auctions. Miami-Dade County, Fla., is an example.

Escambia Foreclosure Auctions Moving Online
With 2,837 foreclosures filed in 2009, the Escambia County Clerk and Comptrollerâ€™s office launched their new online foreclosure sale website, www.escambia.realforeclose.com.

Click here to listen
In Miami-Dade County, about 1 in 10 homes are in foreclosure. And for those properties, the very last step of the foreclosure process falls on the County Clerk of Courts, when the distressed property, by law, must be auctioned off. Many states actually mandate those auctions take place on the courthouse steps. And until 2008, Florida was no different. But as WLRN Miami Herald Reporter Kenny Malone discovered, allowing online auctions is helping Clerks of Court get out from under their own foreclosure problems.

Miami-Dade launches online foreclosure auctions
In a move that could speed the sale of massive numbers of distressed properties on the market, Miami-Dade County officially launched online bidding for foreclosures Monday, bringing together bidders from across the globe and launching hopes of an accelerated return to normalcy in the real estate industry.

Miami-Dade County Selling Foreclosures Online
Miami-Dade County started auctioning foreclosures online Monday, allowing potential buyers to place bids from anywhere in the world with the click of a computer mouse.

Florida county puts foreclosure sales online
Florida's Miami-Dade County will start using the Internet next month in a bid to help auction off tens of thousands of delinquent properties that have put it on the frontlines of the U.S. foreclosure crisis.

Okaloosa County will auction foreclosed property online

Miami-Dade Clerk to launch on-line foreclosure auctions

Miami-Dade Hopes Online Auctions Will Help Reduce Backlog of Foreclosures
Buying into Miami's foreclosure glut will soon be a whole lot easier.

Pasco County To Hold First Online Auction of Foreclosed Properties
With 7,780 foreclosures filed this year through October, Pasco County today streamlined foreclosure auction procedures, moving from the courthouse and judicial center to personal computers and laptops, allowing bidders from around the world to research properties, bid and pay all online.

Foreclosure sales go from courthouse steps to online
Sarasota, Florida - As foreclosure filings continue to rise at more than 1.9 million cases nationwide, county clerk's offices are deep in paperwork. Some say they can't keep up.

Indian River County to Hold First Online Tax Certificate Auction With Realauction
Indian River County Tax Collector Carole Jean Jordan is pleased to announce the implementation of the County's first online auction of tax certificates this year. This move will enable the County to maintain its high standard of customer service while saving taxpayer dollars.

Charlotte County to Process Property Transactions Online with Realauction
The Charlotte County Justice Center is known for utilizing the latest technology to serve its citizens. Clerk of the Circuit Court Barbara T. Scott is a champion of that trend, and has selected RealForeclose to process tax deed applications and foreclosure sales online.

Manatee County Clerk Begins Online Foreclosure Sales with Realauction
Viewed as a leader in responsible, cost effective management of his office, R.B. 'Chips' Shore, Manatee County Clerk of the Circuit Court and Comptroller, has selected RealForeclose by Realauction to begin sales of foreclosed property online.

Duval County First to Begin Online Foreclosure Sales with Realauction
In a landmark move, Jim Fuller, Duval County Clerk of the Courts has selected Realauction to hold the country's first online foreclosure sales.

Realauction.com is a privately owned company specializing in the advertising and sale of delinquent tax certificates for County and municipal governments.

Realauction was created to help Tax Collectors reduce the costs and staffing necessary for traditional open cry auctions by conducting the sale via the Internet in accordance with recently changed State statutes.

Credit Card Management Services, Inc. d.b.a. Debthelper.com is an IRS Approved 501c3 Non-Profit Florida Corporation dedicated to our mission of providing compassionate and professional, financial counseling and education in an ethical manner with efficient, timely and problem-solving client support.

Debthelper.com partners with those who create opportunities for people to live in affordable homes, improve their lives and strengthen their communities.

Florida's Hardest Hit Help

2011-04-22T10:32:00.000-07:00

During a press conference on Tuesday, April 5, Florida Housing Finance Corporation (Florida Housing) announced that unemployed or underemployed homeowners in Florida, who are having difficulty paying their mortgages, will be able to apply for financial assistance from the Florida Hardest-Hit Fund (HHF) beginning at 9 a.m. on

Monday, April 18. On this day, the program will become available to troubled homeowners in all 67 counties in the state.

"We’re now in the position to offer this financial assistance statewide to the people out there who are desperately struggling to stay in their homes,” said Steve Auger, executive director of Florida Housing. “For the homeowners who qualify, this temporary relief from their mortgage payments will provide some ‘breathing room’ so they can focus on becoming re-employed at a level that will allow them to resume making payments on their own."

After reviewing information gleaned from the pilot in Lee County and in consultation with the Governor’s Office, there are a few changes to the HHF program benefits, as follows:

•The Unemployment Mortgage Assistance Program, or UMAP, will provide up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to six (6) months, or until the homeowner can resume making mortgage payments, whichever comes first. In addition, homeowners in the UMAP will be required to pay 25 percent of their monthly income toward their monthly mortgage payment, with a minimum payment of $70 per month.

•The Mortgage Loan Reinstatement Payment Program, or MLRP, will provide up to $6,000 to bring the homeowner’s past-due first mortgage current if the homeowner can show the ability to resume making mortgage payments on his/her own; for a homeowner who received funding from the UMAP program, any unused funds up to $12,000 may be used in addition to MLRP funds to help bring the first mortgage current.

The minimum qualifications a homeowner must meet to be considered for assistance from either or both HHF programs will remain the same.

UMAP and MLRP program funds will be in the form of a 0% percent, deferred-payment loan; the loan can be forgiven over a five-year period, at a rate of 20% each year.
"There are several reasons for these changes to the program," said David Westcott, director of Homeownership Programs at Florida Housing.

"Most importantly, the need for this program continues to grow and we want to assist as many homeowners as possible. These changes could allow Florida Housing to provide financial assistance to nearly 40,000 homeowners statewide—twice as many as we previously estimated could be helped," he said.

Homeowners in every Florida County may apply for financial assistance from the fund by using the official HHF website: http://www.flhardesthithelp.org/ .

The site contains all the information users will need to begin the application process, including a program fact sheet, answers to frequently asked questions and links to resources that may be helpful to those experiencing economic challenges.
Florida homeowners should also be aware that several “imposter” and “copycat” websites posing as HHF application sites have been identified.

Once the application process opens, applicants are strongly encouraged to verify that the website they are using is, in fact, the official Florida HHF website before providing their personal information.

If applicants are suspicious about a website, they can submit an anonymous report on the official HHF website by clicking the "Report Fraud" link on the homepage. Also, they may call the Florida HHF Information Line at 1-877-863-5244 to ensure they are using the correct website address.

Application for the Florida Hardest-Hit Fund program is FREE-OF-CHARGE, and applicants will not be asked to pay for any eligibility determination services in conjunction with applying for the program.

First announced on February 19, 2010, by the US Department of the Treasury (Treasury), the "Housing Finance Agency (HFA) Innovation Fund for the Hardest-Hit Housing Markets" (HFA Hardest-Hit Fund) provides federal funding to states hardest hit by the aftermath of the burst of the housing bubble. To date, $7.6 billion has been infused into the HFA Hardest-Hit Fund for 18 states and the District of Columbia; Florida’s total allocation currently stands at more than $1 billion.

Treasury has approved both of Florida Housing’s programs to provide temporary assistance to eligible unemployed or underemployed homeowners. The goal is to help them sustain and keep their homes, ultimately, to avoid foreclosure.

Credit Card Management Services, Inc. dba Debthelper.com is a participating eligibility provider for the Hardest Hit Applications. For more information you may contact us at 1-800-920-2262 or visit us online at http://www.debthelper.com/

Former TBW Ceo Pleads Guilty to 1.5 Billion Fraud Scheme

2011-04-04T06:44:00.000-07:00

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Friday, April 1, 2011

Former TBW Ceo Pleads Guilty to $1.5 Billion Fraud Scheme

WASHINGTON – Paul Allen, the former chief executive officer at Taylor, Bean & Whitaker (TBW), pleaded guilty today to making false statements and conspiring to commit bank and wire fraud for his role in a $1.5 billion fraud scheme that contributed to the failure of TBW.

The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor F. O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.

Allen, 55, of Oakton, Va., pleaded guilty to a two-count criminal information before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Allen faces a maximum penalty of five years in prison for each count when he is sentenced on June 21, 2011.

According to a statement of facts submitted with his plea agreement, Allen joined TBW in 2003 as its CEO and reported directly to its chairman. He admitted in court that from 2005 through August 2009, he and other co-conspirators engaged in a scheme to defraud financial institutions that had invested in a wholly-owned lending facility called Ocala Funding. Ocala Funding raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas , and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own.

According to court records, shortly after Ocala Funding was established, Allen learned there were inadequate assets backing its commercial paper, a deficiency referred to internally at TBW as a “hole” in Ocala Funding. Allen admitted that in an effort to cover up the hole and to mislead investors, he told a co-conspirator to produce reports that concealed the hole. He also admitted that he knew that these misleading reports were sent to Ocala Funding investors and other third parties.

Allen also admitted in court that he kept the chairman of TBW informed of the collateral shortfall, and that in the fall of 2008, Allen was told that the hole had been moved from Ocala Funding to Colonial Bank. At the time that TBW ceased operations, the hole was approximately $1.5 billion. According to court documents, as a result of the Ocala Funding fraud scheme, Freddie Mac, Colonial Bank and Ocala Funding investors believed they had an undivided ownership interest in thousands of the same mortgage loans.

Court records state that in March 2009, Allen was directed to approach a private equity investor to secure capital to meet a $300 million private capital requirement the U.S. Department of Treasury set for Colonial Bank to receive $553 million from the Troubled Assets Relief Program (TARP). Although Allen failed to secure the funding from the investor, he admitted in court that the TBW chairman represented to others that the investor was a $50 million participant and that the chairman diverted $5 million from Ocala Funding to an escrow account in the investor’s name. This deception caused Colonial Bank to falsely announce publicly it had met its $300 million capital raise contingency and to send a letter to the FDIC that all investors had met a 10 percent escrow deposit requirement. Colonial Bank never received any TARP funds.

In court today, Allen also admitted to making false statements in a letter he sent to the U.S. Department of Housing and Urban Development, through Ginnie Mae, regarding TBW’s audited financial statements for the fiscal year ending on March 31, 2009. In this letter, Allen omitted that the delay in submitting the financial data was attributed to concerns its independent auditor had raised about the financing relationship between TBW and Colonial Bank. Instead, Allen falsely attributed the delay to a new acquisition and TBW’s switch to a compressed 11-month fiscal year.

To date, five other individuals have pleaded guilty for their roles in this and related fraud schemes.

The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia. This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC-OIG, HUD-OIG, FHFA-OIG and the IRS Criminal Investigation. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury also provided support in the investigation.

This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov .

Foreclosures' hidden risk: Debt that haunts for two decades

2011-03-28T12:09:00.000-07:00

He once lived just steps from the ocean in a home valued last decade at more than $500,000 . But John Ericksen has fallen - far - and the bank that took away his Juno Beach home last year isn't done with him yet.

In November, Riverside National Bank won a $151,461 claim against the down-and-out handyman who now resides in a one-bedroom trailer in Riviera Beach's scruffy Ocean Tide mobile home park.

Called a "deficiency judgment," the claim is what Ericksen, 59, still owes on the loan for a home he's already lost.

"They are actually trying to get money from me?" said a surprised Ericksen when contacted by The Palm Beach Post. "Good luck with that one. I'm pretty much out."

In Florida, banks have five years to file for a deficiency judgment and up to 20 years to collect.

But nearly six years into the state's foreclosure onslaught and with more than 100,000 foreclosures filed in Palm Beach County since the real estate bust, the number of deficiency claims sought by the banks is minuscule.

A review of thousands of Palm Beach County court records by The Palm Beach Post found just 133 deficiency claims filed between April 2006 and November 2010 on foreclosed residential properties. They were made by 88 servicers or lenders, with 68 resulting in a judge granting the right to pursue the deficiency.

Most of the lenders that have obtained deficiency judgments in Palm Beach County are small community banks.

Foreclosure defense attorneys and mortgage industry experts say that despite the lack of claims, the deficiency judgment is not a hollow threat. Banks are just too overwhelmed right now processing the foreclosures to switch gears and pursue the money they've been shorted.

For homeowners who thought their worst financial days were behind them when the foreclosure was final, experts predict things could get much worse.

"In two or three years the banks are going to get caught up and they will want to get that money back on their books," said Melva Rozier, a West Palm Beach attorney who handles foreclosures.

And it doesn't seem to matter if you have nothing.

Ericksen, who said he refinanced his family home to pay for the care of his late Alzheimer's-suffering mother, has no car or full-time job and is late on his electric bill and rent. The remaining tools he has are up for sale.

"This is all I've got," Ericksen said, swinging his arm in a semicircle around his worn-out trailer. "There's no point, what they're doing."

How a judgment is determined

In general, a deficiency judgment is the difference between the value of a foreclosed property when it is sold at auction, or what it is appraised for, and the outstanding debt.

For example, a homeowner who owes $300,000 on a home now worth $100,000 is on the hook for $200,000 after the foreclosure.

Because deficiency judgments have no boundaries, banks can seize assets in other states to fulfill a Florida deficiency judgment, said Margery Golant, a Boca Raton lawyer who said her clients are shocked to learn the consequences of a foreclosure.

"I hear from a lot of people who want to do it (foreclose)," Golant said. "But when I tell them what assets are at risk, half of them decide to do something different."

Florida is one of 38 states where financial firms can impose a deficiency judgment, according to the New York-based Deficiency Judgment Recovery Network. But the rules differ depending on the state and the type of foreclosure - whether it's judicial or nonjudicial.

In the past, banks were not so aggressive in pursuing deficiency judgments. When foreclosures were the exception and property values still strong, the losses to the banks were not worth the legal fees and collection costs.

Banks mum on the issue

With residential deficiency judgments still rare, the motivation and logic on who will be pursued, and when, is something of a mystery.

Anthony DiMarco, spokesman for the Florida Bankers Association, said he doubts banks will expend much energy seeking money from unemployed former homeowners with few assets.

That means strategic defaulters - people who can afford the mortgage but walk away from the home, usually because it is worth less than what they owe on it - would be prime targets.

But Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, said he doesn't think banks are set up to make judgment calls like that on individual cases.

"They just do it across the board or they don't," Cecala said. "They don't say, 'This guy's a high roller,' and file for a deficiency."

Jupiter foreclosure defense attorney Charles Burns, who represents Ericksen, said he was stunned to find out the bank was going after him.

"It's the first one I've seen them do," Burns said of Riverside National Bank's claim. "He has no assets that the bank will be able to get."

For their part, banks are mostly mum on the subject of deficiency judgments. None of the major lenders, or the Mortgage Bankers Association, responded to requests for comment for this story.

Federal mortgage giants Fannie Mae and Freddie Mac have their own policies regarding deficiency judgments. Freddie Mac requires its servicers to identify cases where the pursuit of a deficiency is in Freddie Mac's best interest, spokesman Brad German said.

At Fannie Mae, deficiency judgments also are decided on a case-by-case basis, and depending on whether the loan had Private Mortgage Insurance.

Riverside National leads the way

The reason smaller banks have been the first to pursue judgments could be because the loans were not securitized and sold into trusts, meaning the losses remain on the lender s' ledgers. Another possibility is that the community banks purchased the defaulted loans from big-name lenders for pennies on the dollar and now hope to make a profit on the deficiency judgments.

Riverside National Bank, which was acquired by TD Bank last year, has filed nine deficiency judgments in Palm Beach County - the most of all the lenders identified by The Post. TD Bank spokeswoman Rebecca Acevedo said the company had no comment.

Joshua Rand, a principal in the Deficiency Judgment Recovery Network, is hired by banks to file deficiency claims. He said his company is very selective in whom it pursues.

"We see so many loans in Florida and to be honest, most of them are not pursuable by our criteria," Rand said. "At the end of the day, if the borrower doesn't have sufficient assets, it doesn't make sense economically or ethically to go after them."

Down on Chateau Circle, in the Ocean Tide mobile home park, Ericksen's chief economic concern right now is scraping together $1,600 so he can file for bankruptcy.

He acknowledges blame for taking out loans he couldn't afford, but wonders why the bank approved him when he had no good way to pay it back.

In 2006, Ericksen's Juno Beach home, which is within walking distance of the beach, was worth $507,302, according to the Palm Beach County property appraiser. An investor bought it at a foreclosure auction in September for $200,100.

"It's a sad story," Ericksen said

Source

The Hardest Hit Program is Now Accepting Applications

2011-02-02T07:04:00.000-08:00

The "hardest hit" program is for unemployed and underemployed homeowners.

The money can be used to make mortgage payments for up to 18 months or to make a delinquent loan current. It goes directly to the lenders and does not need to be paid back unless the home is sold within five years or the homeowner goes into foreclosure.

Those who qualify may receive up to 35-thousand dollars.

For more information click here

Debthelper.com Helps Families in Palm Beach County with Foreclosure Prevention Assistance

2011-01-26T07:29:00.000-08:00

By Carlos Llerena, Housing Counselor Mgr.
Since our current administration signed and released the Making Home Affordable Modification Program, the MHAMP is helping both mortgagors and mortgagees with their issues, resulting from the past administrations policies. Debthelper.com with their whole team of experts such as their Housing Counselors, created a number of different workshops to assist homeowners in taking advantage of this program and to keep their “American Dream”.

On January 22nd, 2011 we organized a successful Free Foreclosure Prevention Workshop in the Skaff Hall, a great facility owned by the Mary Immaculate Catholic Church, in West Palm Beach, Florida with the participation of Citi Mortgage, Chase, HSBC, PNC, GMAC and Bank of America. We advertised in a local newspaper, along with the distribution of flyers around town. Many of the servicers sent out flyers to their borrowers, who are behind in their mortgage payments. The main purpose of these events is to help homeowners who are struggling to make payments, and those who are under ‘hardship’. We opened the doors to the public at 9:00 am, with a very organized line of borrowers ready to assist. They were assembled near the main entrance; as the day progressed, we saw how many times the doors opened in and out from borrowers who wanted to go home with a ‘hope’ to fix their mortgage issues. Also we noticed how much frustration, anger and sadness showed on these borrower’s faces. Our counselors tried to give them ‘hope’, counseling on the process of any federal program. No decisions were made, because the determinations come from the Lenders or Investors who own the mortgage loan.

The servicer with the most cases of foreclosure issues in America is Bank of America, they were represented by only one employee, ending the day with a very low number of borrowers asking for assistance. Their poor turnout was due to their lack of invitations sent. According to their managers we spoke with, they wanted to save their own revenue. The other servicers were busy all day, assisting as many borrowers as they could handle. They called or sent invitations to all their mortgage holders in trouble to see if they qualify for help. We completed and closed our doors at 3:00 pm.

We now have just short of 2 years working on these programs. We see many negative results, consequences of denied cases, with different type of excuses such as missing documents, inactive account, no communication at all with borrowers to let them know what they are missing, or because most underwriters representing the investors desired to move cases forward, which would result with a ‘Traditional Modification’, avoiding any federal program against borrowers.

Debthelper.com will continue developing workshops throughout the year to assist homeowners to keep their homes. We will also escalate to the US Treasury Department of any situations where the lenders or investors are working against any federal programs available.
For more information on our Foreclosure Prevention Workshops call (561) 472-8000 or (800) 920-2262.

Our next workshop will be held on March 19, 2011 in West Palm Beach, FL.

Beware of Foreclosure Scams - Help is Free!!!

2011-01-06T14:09:00.000-08:00

Scam artists are stealing millions of dollars from distressed homeowners by promising immediate relief from foreclosure, or demanding cash for counseling services when HUD-approved counseling agencies provide the same services for FREE.

If you receive an offer, information or advice that sounds too good to be true, it probably is. Don't let them take advantage of you, your situation, your house or your money.

To determine if you are a possible victim of a scam, ask yourself these two questions:

Were you told you had to pay a fee to obtain counseling services?

Were you guaranteed a loan modification or asked to do any of the following:
Sign over title to your property?
Redirect mortgage payments?
Stop making loan payments?

If the answer to any question is “Yes,” then report the possible scam.

Call 561-472-8000 or click here to report a scam online (with your permission the complaint will be shared with federal and state law enforcement).

For more information, please visit: http://www.loanscamalert.org/ http://www.preventloanscams.org/

Here are some Tips and Warning Signs:
Help is free! Debthelper.com can help you negotiate with your lender or loan servicer.

There is never a fee to get assistance or information from your mortgage company or a HUD-approved housing counselor.

While some fee-based counselors are legitimate, be sure you know that free counseling is available and may be most suitable for you. Call 561-472-8000 for free housing counseling.

Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house.Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

Don't sign papers in exchange for a promise that someone else will pay off your mortgage. ALWAYS be sure to read and understand all paperwork before signing to ensure that you are not unknowingly giving someone else ownership of your home.

Never submit your mortgage payments to anyone other than your mortgage company without your mortgage company's approval.Scammers might ask you to make your payments to them; however, they pocket your payments instead of sending them to the mortgage company.

Beware of anyone who says that you don't need a real estate professional or title company when selling your home.You should always have a real estate professional, attorney or a title company to help you with any transaction involving your home.

Know the person you do business with. Before responding to any person or organization offering to "save" you from foreclosure, find out if the organization is HUD-approved.

Find a housing counselor on the HUD.gov website. Debthelper.com is a HUD-approved housing counseling agency and is the safest source of information and help.

CitiMortgage Holding Call-a-Thon for Borrowers TODAY

2010-12-15T10:40:00.000-08:00

We just got word that CitiMortgage is holding a Call-aThon today for distressed homeowners. Foreclosure prevention experts will be answering questions and providing advice.

The lines opened at 7 a.m. today and will stay open until 1 a.m. December 16, specifically for CitiMortgage customers who have foreclosure concerns. Experts can provide information about various homeowner assistance programs that may be available.

Homeowners can call 1-877-617-9465 or log onto: http://www.citimortgage.com/, New.Citi.com, or Blog.CitiMortgage.com. I assume counselors will be able to reach a Citi rep as well

Posted by Julie St. Jean

Debthelper.com helps distressed homeowners in Palm Beach County, Florida http://www.debthelper.com 561-472-8000

Failed mortgage modifications leave homes in even more peril

2010-11-01T06:41:00.000-07:00

As reported in The Chicago Tribune, October 29, 2010: Rogelio Huerta and Maria Soto did everything they were supposed to do to reduce the monthly mortgage payments on their Bellwood, Ill., home.

Facing a cash crunch because his work hours were cut, they sought help from PNC Mortgage while they were still current on their payments. At its suggestion, they met with a housing counselor who helped them get a trial loan modification, and they made all the payments on time for 13 months. They also followed the advice of housing counselors to set aside money left over, putting off home and car repairs, while they waited to learn whether their reduced payment plan would be made permanent.

This month, their application was denied, meaning their home is likely headed to foreclosure. The bank's reasoning? The family's $7,160 in savings, including a $5,218 income tax refund, accumulated during the year it took the bank to review the application, meant they were too well off to qualify.

"I was just following whatever they said to do," a choked-up Huerta, the father of two young boys, said last week. "I'm not looking for something for free. I'm just looking for a payment that can save my family."

Like Huerta, the frustrations of the past year have caused red-rimmed eyes among counselors working on their file, because they just don't understand how a family like Huerta and Soto's can be turned away.

"These are the very borrowers you want," said Liz Caton, director of counseling services at the Northwest Side Housing Center in Chicago. "These are the homeowners who have jobs, who are working on budgeting and saving. It seems to be a no-brainer when you ask the question is it in (the bank's) best interest to help this homeowner or not."

It was with high hopes that President Barack Obama announced the Home Affordable Modification Program in early March 2009 to assist honest homeowners who were working but struggling. Almost 20 months later, the program has gone through many revisions and been labeled a failure by critics.

Huerta and Soto's story illustrates how the best intentions of homeowners to hold up their end of an agreement can work against them in a system overwhelmed by demand and strained by capacity. In recent weeks, some of the nation's biggest lenders have suspended foreclosures amid allegations of sloppy paperwork and legal shortcuts.

Huerta, who remained positive during the first eight months of the ordeal, has now lost all faith in the system. But he remains resolute.

"I'm not going to leave my home," he said.

A spokesman for PNC said the bank cannot comment on a particular customer.

"PNC wants to help as many customers as possible to remain in their homes, and is committed to helping maintain mortgage affordability," the bank said in a statement. "Since the inception of HAMP, we have significantly increased our dedicated loan modification program staffing to offer assistance to our customers. We proactively work with struggling homeowners to find a permanent solution to resolve delinquency and mitigate loss."

In recent months, Treasury officials have urged loan servicers to speed the processing of applicants who are in "aged" trial modifications. As of August, more than 94,000 homeowners nationally were like Huerta and Soto, still waiting six months or more to hear back on their applications.
"These are the ones where people have been through the wringer," said Laurie Maggiano, director of policy in the Treasury Department's Homeownership Preservation Office. "We are very sympathetic to borrowers who have been dragged through the mud for many months."

A year ago Huerta, 32, and Soto, 35, were current on the $1,541 monthly mortgage for the home they bought in 2003 for $178,000, but when his job as a machine operator was transferred to Grayslake, the increased commuting expenses cut into their savings. Then his hours were cut, from 40 hours a week to 32. Soto works as a hotel housekeeper, but only on weekends so they don't have day care expenses.

The couple tapped their savings to pay the mortgage but Huerta knew that was a temporary fix. A PNC customer representative suggested they contact a housing counselor certified by the federal Department of Housing and Urban Development. Huerta and Soto applied for, and received, a HAMP trial modification with a payment of $948.46 that started in October 2009 and was to last for four months while their file was reviewed.

As the months stretched on, some trial payments were rejected by the bank and returned to Huerta. Each time Huerta would call the bank, and a representative would take his payment over the phone, using his debit card. Caton, their housing counselor, said her advice was, "Make your payments. It's the bank that's messed up, not you."

One time as he was trying to understand one of the many letters the family received from PNC, Huerta, who is fluent in English but more comfortable speaking Spanish, asked if he could speak to a Spanish-speaking customer representative. He said he was placed on hold, listening to music, for an hour, before he finally gave up.

The strain, meanwhile, started taking a toll on the family.

The couple traditionally sat down with the boys, David, 7, and Richard, 6, at the kitchen table every night while they did homework. But on many days after work, Huerta was driving back and forth to the housing counselor's office, taking more documents to send to PNC to prove his financial standing and need for a modification.

The good-natured father who happily coached his sons' soccer team was replaced by a frustrated man who was aloof at home.
"They were always coming back, asking for the same information," Soto said. "It's hard. I see my husband break down. There's been tears. It's one letter after another. It has broken our family situation."

Huerta doesn't disagree with Soto's assessment. "I don't want to see nobody," he said. "I never fight with my wife before this situation. Now we fight more. I go to my computer and sit there three, four hours. My kids playing, it just bothers me."

Meanwhile, Huerta and Soto were afraid to spend money on needed car repairs and home maintenance. A $5,218 income tax refund went into their bank account while a broken window at their home remained unfixed.

"I was saving the money I can," Huerta said. "My checking account started going back up."

Said Caton, "We tell all of our homeowners, 'You need to budget, you need to save,' and Rogelio took it seriously."

On Sept. 27, Huerta sent in the October trial payment, the 13th payment of its kind, and it was accepted. The rejection letter, which listed the reason for the denial as "asset review determination," was dated Oct. 7. In follow-up conversations with PNC, counselors said they were told that if Huerta and Soto had saved about $2,500 less, a permanent modification would have been granted.

A spokeswoman for the Federal Housing Finance Agency said computer models help determine whether a borrower who is less than 60 days behind on a mortgage is in imminent danger of default.

"They aren't the only ones who are waiting in the system for months," Caton said. "This is not the extreme case, which is what makes counselors get frustrated. We are working with homeowners who have the ability to pay. The message is getting sent (by banks) that even though it's in your best interest and our best interest to save money, we're going to penalize you when you do."

With the HAMP modification denied, unless Huerta and Soto become current on the mortgage by paying what they hadn't paid for the past 13 months, more than $7,700, as well as their regular mortgage payment, they will default on the loan and the bank can initiate foreclosure proceedings.

On Oct. 15, a PNC customer representative called Huerta and said he was sending another packet of unspecified paperwork for Huerta and Soto to fill out and return before the week of Nov. 14, when the home would be put into foreclosure.

On Friday, a week later, Huerta and Soto were still waiting for that packet to arrive.

The Government is Coming to Town...

2010-10-29T12:33:00.000-07:00

“Help for Homeowners”

foreclosure prevention events in

West Palm Beach

on Tuesday, November 16

and Miami

on Thursday, November 18.

The event invitation can be found via the following link: http://www.makinghomeaffordable.gov/docs/100732%20-%20mha%20miami-west%20palm%20bilingual%20flyer.pdf,

or visit http://www.makinghomeaffordable.gov/ for information about this and other foreclosure prevention events.

FREE FORECLOSURE PREVENTION WORKSHOP

2010-09-15T06:45:00.000-07:00

Date: Saturday, September 25, 2010
Location: Mary Immaculate Church

390 Sequoia Drive, South West Palm Beach, FL 33409
Time: 9:00 am to 3:00 pm
Cost: FREE

Please bring copies of the following documents:

- Recent correspondence from your Mortgage Company and last mortgage statement.

- Recent 2 months pay stubs and 2 months bank statement.

- Recent Income tax Return or W-2 Forms.

- Write on a paper all your household expenses.

- Hardship letter explaining delinquency of mortgage payments or any gap in employment.

For more information call (561) 472-8000 - www.Debthelper.com

Credit Card Management Services, Inc. is an Endorser and Adopter of the National Industry Standards for Homeownership

Education and Counseling and is a 501c3 Non-Profit HUD Approved Housing Counseling Agency.

Lenders and loan servicers will also be there to address specific needs.

SE HABLA ESPAÑOL

Foreclosure prevention program losing its punch

2010-08-23T12:12:00.000-07:00

As reported by CNNMoney.com, August 20, 2010: The president's signature foreclosure rescue plan is losing its punch, according to a federal report released Friday.

Only 36,695 troubled homeowners received long-term mortgage modifications in July under the Obama administration's Home Affordable Modification Program, known as HAMP. This brings the total to 434,717 borrowers who have successfully made it out of the trial phase.

A month ago, 51,205 delinquent borrowers were given long-term assistance.

The number of people falling out of the program, however, is on the rise. Some 12,912 homeowners had their permanent modifications canceled in July, 272 of whom paid off their loans.

Obama officials acknowledge that the foreclosure rescue program will not help every troubled homeowner and that it may be a while before the housing market stabilizes. They are shifting their focus to initiatives that are targeted to those who have been hit by the recession and declining home prices.

"While there has been some stabilization in the housing market, it remains clear that we have more work ahead," said Raphael Bostic, assistant housing secretary. "We know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation's hardest hit neighborhoods."

Foreclosure prevention programs have taken on renewed importance with the housing market on shaky ground again. A spike in foreclosures, combined with weak housing sales, could send home prices plummeting again.

Defaults on the rise

The latest report comes two weeks after the government had to revise its June redefault figures sharply higher, after analysts called the initial numbers misleading.

The revision showed that nearly 20% of homeowners were at least two months delinquent nine months after receiving a permanent modification. The initial figure showed that 7.7% had fallen behind.

The government did not provide redefault statistics for July in the current report. Officials said the data would be released quarterly.

Analysts at Barclay's Capital said last month said 60% of homeowners may ultimately redefault.

Status of trial mods

Some 96,025 people in trial modifications were canceled in July, bringing the total to 616,839 since the program began in the spring of 2009.

Homeowners usually are kicked out of the trial program because they do not make the required payments, meet the qualifications or submit the needed paperwork. Going forward, loan servicers will gather the necessary documents and review homeowners' eligibility before entering them in trial modifications.

Once their trials are canceled, about 45.4% of homeowners receive alternate modifications, often one from their loan servicer. Some 9.8% had foreclosure proceedings started against them and 1.8% lost their home in foreclosure.

Only 255,934 troubled borrowers remain in the trial phase, some 24,577 of whom entered the program in July. Nearly 118,000 have been in trials for at least six months, though loan servicers should address these homeowners in the next month, administration officials said.

Another new program

Launched with great fanfare, the president's foreclosure prevention plan calls for servicers to reduce eligible troubled homeowners' monthly payments to no more than 31% of their pre-tax income. However, it has come under persistent fire for being slow to launch and for not helping enough people.

Meanwhile, the government is set to roll out yet another fix for the housing market. Borrowers can start applying for the FHA Short Refinance option starting Sept. 7.

The program allows those who owe more than their homes are worth to refinance into a Federal Housing Administration-backed loan provided they are current on their mortgages and their lender agrees to write off at least 10% of their principal balance. The initiative is open to those who do not currently have an FHA loan and who have a credit score of 500 or more.

In recent months, the administration has stressed the wide range of housing programs it has underway, including initiatives to keep interest rates low and to provide tax credits to first-time homebuyers.

Are you Eligible for Obama's Money?

2010-08-13T06:16:00.000-07:00

HUD Provides $1 Billion of Emergency Loans to Homeowners, T&I Default Solution?
August 12th, 2010 by admin Published in FHA, News, Reverse Mortgage

The Obama Administration announced additional support to help homeowners struggling with unemployment through two targeted foreclosure prevention programs on Wednesday.

The U.S. Department of the Treasury will make $2 billion of additional assistance available for homeowners struggling to make their mortgage payments due to unemployment.

“We remain committed to helping struggling homeowners, and this program will provide additional assistance to states hit hardest by unemployment,” said Assistant Secretary for Financial Stability Herb Allison.

“This is part of the Administration’s comprehensive housing policy that has helped to stabilize a fragile housing market and allows responsible homeowners the chance to reduce their monthly mortgage payments to affordable levels.”

Additionally, the Department of Housing and Urban Development (HUD) will soon launch a complementary $1 billion Emergency Homeowners Loan Program to provide assistance to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.

“HUD’s new Emergency Homeowner Loan Program will build on Treasury’s Hardest Hit initiative by targeting assistance to struggling unemployed homeowners in other hard hit areas to help them avoid preventable foreclosures,” said Bill Apgar, HUD Senior Advisor for Mortgage Finance.

“Together, these initiatives represent a combined $3 billion investment that will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the Administration’s efforts to stabilize housing markets and communities across the country.”

HUD’s emergency homeowners loan program will work through a variety of state and non-profit entities. The loans will be a deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

The program could be an asset to seniors who have been unable to pay their tax and insurance obligations on their reverse mortgage. While there is no official number as to how many HECM borrowers are currently in T&I default, it continues to be a concern for lenders and servicers in the reverse mortgage industry. Whether or not the program will be available to HECM borrowers isn’t yet clear.

“It is too early to answer that question because we are still in the process of defining the program requirements,” said Lemar Wooley, spokesperson for HUD in an email to RMD. The agency plans to announce additional details, including the targeted communities and other program specifics in the coming weeks.

http://www.debthelper.com/ is an approved HUD Counseling Agency in West Palm Beach, FL. For information about our services contact us at 561-472-8000 or 800-920-2262.

Source: Reverse Mortgage Daily

Making Homes Affordable?

2010-08-06T08:53:00.000-07:00

Home Affordable Foreclosure Alternatives (HAFA) Program
http://www.makinghomeaffordable.gov/hafa.html
Many homeowners may feel that they can no longer afford their home, but want to avoid the negative effects of foreclosure. The Home Affordable Foreclosure Alternatives (HAFA) Program offers homeowners, their mortgage servicers, and investors an incentive for completing a short sale or deed-in-lieu of foreclosure. With these options, under HAFA, a homeowner leaves their home to transition to more affordable housing and alleviate the mortgage debt they owe.

These options are available for homeowners who:
1. do not qualify for a trial mortgage modification under the Making Home Affordable Program; 2. do not successfully complete the trial period for their modification;
3. miss at least two consecutive payments during their modification period; or
4. request a short sale or deed-in-lieu of foreclosure.

Short Sale
In a short sale, the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage.

Deed-in-Lieu of Foreclosure
Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a deed-in-lieu of foreclosure. With a deed-in-lieu, the borrower voluntarily transfers ownership of the property to the servicer— provided the title is free and clear of mortgages, liens, and encumbrances.

The HAFA Program streamlines both of these options to make them easier for a homeowner to work with their servicer. Under the program, a homeowner can receive $3,000 to help with relocation costs.

Mortgage servicers and investors write their own guidelines under the Federal requirements to determine how to implement the program. For more information about your options, you should contact your mortgage servicer.

If you have questions about the program, or want guidance about how these options may impact your personal situation, you may wish to speak to Debthelper.com for free.

Your Graceful ExitWatch a video to learn more about the Home Affordable Foreclosure Alternatives Program.

Download a BrochureRead more about the program.

Making Home Affordable and Other Options to Remain in Your Home
Mortgage servicers who participate in the Making Home Affordable Program are required to evaluate homeowners for a Home Affordable Modification before evaluating them for other options.

If you request a modification from your mortgage servicer, and are determined to be eligible, you will enter into a trial period plan.

If it is determined that you are not eligible for a Home Affordable Modification, your mortgage servicer will evaluate you for other alternatives they offer to keep you in your home, such as their own modification programs or a forbearance.

We can work with you for free to help you understand your options.
Avoid Foreclosure:
Know Your OptionsWatch a video to learn more about the Making Home Affordable Program and other options your mortgage servicer may provide.

› Frequently Asked Questions

Beware of Foreclosure Rescue Scams - Help Is Free!
· There is never a fee to get assistance or information about Making Home Affordable from your lender or a Call us Today 561-472-8000

· Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay - walk away!

· Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

· Never submit your mortgage payments to anyone other than your mortgage company without their approval.

The Obama Administration has launched a coordinated effort across federal and state government and the private sector to target mortgage loan modification fraud and foreclosure rescue scams that threaten to hurt American homeowners and prevent them from getting the help they need during these challenging times. Click here for more information.

Foreclosure vs. short sale -the pros and cons

2010-07-24T07:12:00.000-07:00

With today's reduced property values and increased unemployment, it's tempting for some homeowners to just throw their hands up in defeat, allow the bank to take their home in foreclosure and rid themselves of the monthly mortgage burden.

Even suffering through the paperwork and stress of a short sale may seem too much for an overwhelmed borrower to handle.

But Florida homeowners should be aware of unique rules in the state that make the benefits of a short sale typically outweigh the ease of walking away in a foreclosure.

http://www.palmbeachpost.com/money/real-estate/foreclosure-vs-short-sale-the-pros-and-cons-820292.html

By Kimberly Miller
Palm Beach Post Staff Writer

The Program Designed To Help Others is in Need of Assistance

2010-07-22T13:57:00.000-07:00

The foreclosure prevention program that was designed to help homeowners seems to need some help of its own. This program, that was funded using $50 billion from Wall Street bailout money, is taking on heavy criticism. There are claims that it has helped only 390,000 homeowners. This far below the projected 3-4 million that were expected to be helped and is causing questions to arise in whether the program is actually successful.

Many blame the problems that the program is having on the Treasury Department which supposedly failed to specifically outline goals and objectives for the program to adhere to.

Elizabeth Warren and Richard J. Hillman, who are both involved with the bailout and the Government Accountability Office criticize the program. Hillman even stated that the program actually “made limited progress in preserving homeownership…”

Warren did state that program helped prevent a total collapse, but the ratio of foreclosed homes to homeowners that have received modification is too high.

She even stated that the program is one that isn’t working for the benefit of homeowners and that “in many cases, the servicers can continue to make more money if the family goes through foreclosure.”

In rebuttal to the criticism, Herbert M. Allison, Jr. the Assistant Treasury Secretary said that the program was receiving too much disapproval and that it has actually helped 1.3 million homeowners.

Though it is difficult to decipher in the war of words who is right or wrong, it comes down to the fact that either way the program has not helped as many homeowners as it was set up to. In addition, the program may offer banks and lenders incentives if they help you modify your loan, but if they receive more money if a home is foreclosed on, how is the homeowner helped?

Overall, a message of criticism of the program may not be the answer. What does seem to be needed is a criticism of the lenders and their thirst for money. It seems like they only see dollar signs no matter who they hurt.

Source:
New York Times

Purchasing a Foreclosure:Too Good to be True?

2010-07-21T13:05:00.000-07:00

Recently, a statement on the news was made about how the construction industry is down, especially on new homes. This is partially due to the competition foreclosed homes are presenting. However, what many potential buyers aren't aware of are the risks of purchasing a foreclosed home.

Though foreclosed homes are on the market for seemingly unbeatable prices, hidden costs do tend to lurk under attractive deals.

For example, one homeowner in Georgia had to hire an inspector and learned that not only did homeless people move into the home during the one year that it sat vacant, there was a broken pipe in the basement that caused mold to start growing.

Ransacking foreclosed homes that have remained vacant for a long period of time have also become a problem. Some thieves will go into the home and steal appliances or more commonly, metals from pipes that can be sold or melted down for profit.

In addition, when a home is bought new, you are buying from the building company and can personalize your home the way you’d like. You can pick your appliances, cabinets, countertops and so on. When buying a foreclosed home you aren’t able to customize the home the way you’d like.

Builders also give the homeowner warranties, such as a ten year structural warranty, and are now offering incentives for new home buyers.

Furthermore, when buying a home from an auction, few previews inside the home are allowed prior to purchase. Many auctions also require that buyers pay with cash or a cashier’s check once the home is secured.

Overall, foreclosed homes may be listed for an unbeatable price, but the hassles that might come with them can bring additional costs you weren't prepared for.

Sources:
USA Today
New Homes online
Nolo

Palm Beach County foreclosure filings rise in June after three months of declines

2010-07-09T11:40:00.000-07:00

Palm Beach County foreclosure filings rise in June after three months of declines

The Obama Administration’s Making Home Affordable Programwas created to help millions of homeowners to Refinance or Modifytheir mortgage payments to a level that would be affordable.

· Our services are FREE.

· Determine your eligibility.

· Access additional resources.

· Learn how to get help you may need.

http://www.debthelper.com/

Credit Card Management Services, Inc.

Non-profit HUD Approved Housing Counseling Agency

4611 Okeechobee Blvd. Suite 114
West Palm Beach, FL 33417

http://www.debthelper.com/

Call now (561) 472-8000

Or Join us on July 17, 2010
from 9:00 am
at
Mary Immaculate Catholic Church
390 South Sequoia Drive
West Palm Beach, FL 33409-3698

10 Tips to Avoid Foreclosure

2010-06-30T06:10:00.000-07:00

We have all read the facts related to foreclosures and how they are rapidly increasing. In 2009, 2,824,674 properties nationwide were in default and that number appears to be increasing. This is alarming and can be devastating for families that find themselves in this situation. Avoiding foreclosure is not easy and there is nothing that will make it feel any better to those that are going through it. It’s a difficult and challenging time of life that can only be described as something that you have to force yourself to get through. Knowing that there are millions of others going through the same thing is not overly helpful as in the end, you and your family are directly impacted and need help. We put together this list of 10 tips to avoid foreclosure in an effort to try and offer some advice that you may not have thought of if you find your home in jeopardy.

1. Don’t just ignore your problems hoping that they will go away. Unfortunately problems with credit (credit cards, loan, etc.) and especially a mortgage don’t go away they simply get worse if you attempt to ignore them. So first you have to be committed to tackling this problem head on.

2. Contact your mortgage company as early as possible when you realize you have a potential problem making your payments. This is the quickest way to get relief even if you have to really work hard to convince them to work with you. You want to ask them about any deferred payment programs or anything else they might have in place that could help you at least temporarily.

3. Refinance your loan if possible. If you have equity in your home, then refinancing your loan over a longer period can dramatically reduce your payments. You may also want to consider a home equity loan or a debt consolidation loan to try to reduce your total monthly payments (credit cards and other loans can be rolled together).

4. Be responsive to your lender by opening and responding to all correspondence and taking their phone calls as difficult as that may be. Don’t be tempted to throw away those letters, screen calls, or delete those phone messages as it won’t make them any more likely to work with you.

5. Leverage other assets as best you can (jewelry, a second car, etc.). As difficult as these can be to part with, what is more important than your home and providing shelter for yourself and your family?

6. Look to friends and family for any monetary assistance they can provide especially if this is a temporary problem. They are the most likely to understand and be willing to help you through this difficult time.

7. Get a roommate if that is an option or see if other friends and family are facing a similar situation and are willing to live together at least for a while to help reduce expenses for all involved.

8. Avoid foreclosure prevention companies. Most of these are simply going to try to get money from you to act on your behalf with your lender(s), which you can already do for yourself.

9. You need to learn your rights under federal and/or State law. Know whether or not your State protects your home in a bankruptcy, etc. Just be clear as to what your options are to get out from under your debts in the event you exhaust all other possibilities.

10. Look into a short sale and see if your lender will work with you to satisfy the home debt that way (of course you still end up looking for a new home). However, it can be a way to avoid bankruptcy and still salvage your credit.

Source

More borrowers exit Obama mortgage help plan

2010-06-22T06:04:00.000-07:00

WASHINGTON — A growing number of homeowners who sought help from the Obama administration's main mortgage aid program are in danger of losing their homes.

About 436,000 borrowers have dropped out of the $75 billion plan as of last month, the Treasury Department said Monday.

That's about 35 percent of the 1.24 million who enrolled since March 2009 and exceeds the number of homeowners who are getting help through the program. And nearly 155,000 of those who fell out of the program did so in the past month.

The result could be a new wave of foreclosures that could weaken the housing market and hold back the broader economic recovery.

Most of those homeowners were rejected during a trial period lasting at least three months. More than 6,300 dropped out after having their loans modified.

Another 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.

Experts say more borrowers are likely to drop out in the coming months. Some homeowners who owe more on their loans than their properties are worth are likely to conclude that paying an oversized mortgage simply isn't worth the cost.

Even after their loans are modified, many borrowers are simply stuck with too much debt — from car loans to home equity loans to credit cards.

"The majority of these modifications aren't going to be successful," said Wayne Yamano, vice president of John Burns Real Estate Consulting, a research firm in Irvine, Calif. "Even after the permanent modification, you're still looking at a very high debt burden."

Obama administration officials contend that borrowers are still getting help — even if they fail to qualify for the program. The administration published statistics showing that nearly half of borrowers who fell out of the program received an alternative loan modification from their lender. About 7 percent fell into foreclosure.

Another option is a short sale — one in which banks agree to let borrowers sell their homes for less than they owe on their mortgage.

A short sale results in a less severe hit to a borrower's credit score, and is better for communities because homes are less likely to be vandalized or fall into disrepair. To encourage more of those sales, the Obama administration is giving $3,000 for moving expenses to homeowners who complete such a sale or agree to turn over the deed of the property to the lender.

The program is designed to lower borrowers' monthly payments by reducing their mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. Mortgage companies get up to $75 billion in taxpayer incentives to reduce borrowers' monthly payments.

Source

Our Counselors are Saving Homes Today

2010-06-17T15:46:00.000-07:00

The Obama Administration’s Making Home Affordable Program
was created to help millions of homeowners to Refinance or Modify
their mortgage payments to a level that would be affordable.

· Our services are FREE.
· Determine your eligibility.
· Access additional resources.
· Learn how to get help you may need.

www.DebtHelper.com
Credit Card Management Services, Inc.
Non-profit HUD Approved Housing Counseling Agency
4611 Okeechobee Blvd. Suite 114

West Palm Beach, FL 33417

www.debthelper.com
Call now (561) 472-8000

Or Join us on July 17, 2010

from 9:00 am

Mary Immaculate Catholic Church

390 South Sequoia Drive

West Palm Beach, FL 33409-3698

Chase Representatives and

PNC Bank Representatives

will be onsite

What to bring:

Current loan documents (documents signed at the loan closing)
One (1) month’s most recent pay stubs for each job, for each occupant and any other income documentation.
Two (2) Most recent tax returns with all attachments for each occupant
Most recent utility bills
Two (2) most recent bank statements for all accounts
Most recent mortgage statement(s) or last mortgage statement(s) received
Most recent property tax and property insurance statement (if you pay the taxes and insurance on your own) and homeowner’s association information (if applicable)
Most recent installment loan statements including: auto loans, credit cards, personal loans, and home equity lines of credit
Information on any other monthly expense, debt, or liability

10 tips to avoid foreclosure

2010-06-14T14:23:00.000-07:00

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

Don't ignore the letters from your lender
Contact your lender immediately
Contact a HUD-approved Housing Counseling Agency

If you are unable to make your mortgage payment:

1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.
Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at portal.hud.gov/portal.

6. Contact a HUD-approved housing counselor. www.Debthelper.com in West Palm Beach 561-472-8000. The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.
After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, (entertainment that you can eliminate). Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets.
Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention help, use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

10. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

Foreclosure: Should You Embrace It?

2010-06-08T10:18:00.000-07:00

Foreclosure or not? I’ve been using the f-word a lot here in my Summerville, South Carolina law office. (That’s “foreclosure,” not the other f-word, by the way.) And I’ve noticed a transition in attitudes among clients. It’s gone from, “I don’t want foreclosure no matter what” to “let’s discuss what happens if my lender forecloses.” I call this the “foreclosure option.”

Deciding to keep your home is certainly not a foregone conclusion. Sometimes, it makes sense. But at other times, it’s nothing more than slow financial suicide. And sometimes it’s just not possible. Perhaps HAMP (“Home Affordable Modification Program“) won’t work for you, or maybe you have an investment property, like a lot in a subdivision, that isn’t eligible for HAMP.

Clients have been doing the math. And when they don’t, I’ve been doing it for them so they can make intelligent decisions about whether to stop making mortgage payments. Someone trying to save a house worth $250,000 when they owe $350,000 and can’t afford the payments needs a reality check. They need to understand that if they started renting tomorrow, they’d have more equity in the rental house than in the home they want to save. At least with the rental, they’re at zero equity, not negative $100,000!

Don’t get me wrong, I’m not saying everyone should just happily stop making mortgage payments. There are many factors which homeowners must carefully analyze to determine if surrendering their homes to foreclosure makes good financial sense to them. Sometimes, it’s complicated. At other times, it’s a no-brainer.

And What About the Morality of Allowing the Foreclosure?

The morality of the decision is a big issue for most people. Sometimes, it’s simply impossible for clients to continue making payments, but sometimes they can make the payments but decide to quit paying anyway. Recently, a client from Summerville, South Carolina came to see me about a mortgage on a lot. He now owes more than $100,000 than it’s worth. He’s paid over $50,000 in interest to the lender over the last five years. And he’s not doing it anymore even though he could. My job is to advise my clients of their legal rights, not kick them out of my office and tell them to keep paying no matter what. Homeowners need to decide what they think is right for their unique situation and act accordingly.

For some, the decision to let the property go is easy. They tried to work with their lender, but the lender wouldn’t help. They may also believe that the lender allowed them to borrow more than they were capable of repaying. Some also realize that allowing the foreclosure to occur isn’t a crime. It’s not illegal, and it’s in their best interests, so they tell the bank to foreclose away.

For most people, though, they view their contract as a promise which must honored, and they agonize over the foreclosure option. They only “give the house back to the bank” when there are really no other workable options. I’d say over 90% of homeowners fall in to this category.

There’s been a lot of discussion about the foreclosure option in the media lately. Recently, The New York Times published an article entitled, “Owners Stop Paying Mortgages, and Stop Fretting.” According to the article, some Florida homeowners used foreclosure to allow themselves to go to the steakhouse, “take their gas-guzzling airboat out for the weekend,” and “visit the Hard Rock Casino.” This has some people crying foul, and it has my friend and colleague Jay Fleischman, a New York City bankruptcy lawyer, a bit peeved at The Times.

As Jay states in his recent blog post:
The real shame of this piece is that it’s not reflective of what people do when they fall behind on the mortgage. Most people fight like hell to catch up, to get out from under the debt, and to do what is by all accounts the honorable thing. They want to hold up their end of the bargain, and fail only because most lenders don’t have the same objectives. There’s a disconnect in the real world – consumers want to make it right, and lenders just don’t give a crap. Because consumers are real people, and lenders are monolithic corporations with bureaucracies and levels between the font lines and the decision makers. That’s the reality, but the New York Times went for the sensational. Boo, hiss.

He’s got a point. Jay deals with lots of people every day as do I. And we both know in the vast majority of cases clients agonize over the foreclosure option and only decide to surrender their properties when (1) they just can’t pay, and (2) their lenders have refused to modify their loans.

And what Jay’s really troubled over is that Congress will get concerned that the American consumer will start behaving like Corporate America–just out for #1 and the “bottom line.” Oh, the irony!

We all know that Corporate America will avail itself of any legal means–and sometimes some illegal means–of propping up the bottom line. Corporations breach contracts, deny legitimate insurance claims, and don’t hesitate to avail themselves of bankruptcy protection if it will help their bottom line. But if the American consumer starts that stuff, well then, Congress will start hearings in short order. It’s a double standard.

Just remember the truth: Despite recent media attention, most people agonize over the foreclosure option and do their very best to keep their homes.

Source

Debthelper.com Participated in the Florida Housing Help Event held on June 4, 2010 in Miami, FL

2010-06-04T10:20:00.000-07:00

On June 4, 2010, Debthelper.com representatives were on hand to participate in the Florida Housing Help event. This one day event, sponsored by the Florida Department of Financial Services, was to assist consumers facing foreclosure in the Miami area.

Miami Mayor Thomas Regalado and District 4 Commissioner Francis Suarez were on hand to offer remarks and speak to consumers. “This is a chance for people to get the help they need,” indicated Mayor Regalado, “Hopefully people will leave here looking at a better situation for themselves.”

Commissioner Suarez reiterated those remarks, stating that more of these types of events were needed.

Event coordinator Julie Lopes said, “Overall the event was successful. People were getting the help that they needed.”

While the weather may have kept some people from participating, a crowd of approximately 75 were on hand speaking to loan officers and HUD counselors throughout the 4 hour event.

“All the vendors are doing well and able to help,” stated Ms. Lopes.

The counselors from Debthelper.com spoke with a number of consumers who felt that the counseling and the event in general were worthwhile.

The Florida Department of Financial Services, run by Florida CFO Alex Sink, also sponsors events such as ‘Financial Hurricane Preparedness’, ‘Safeguarding Our Seniors’ and an upcoming program relating to the effects of the Gulf oil spill.

Things home inspectors won't say.

2010-05-12T11:55:00.000-07:00

"Your idea of a home inspection isn't necessarily the same as mine."

You've found the home of your dreams. But cautious consumer that you are, you want a home inspector to take a look at it before you buy. That way, you'll be forewarned about any defects or problems, right? Not necessarily. A home inspector's job is to conduct a visual examination of the physical condition of the house and certain systems within it. The key word here is "visual." That means home inspectors don't have to remove carpets to make sure the floors aren't warped, for example, or drill into walls to check for insulation.

"I'm not climbing up on your roof."

Amazingly, the eyeball rule applies even to the roof. The American Society of Home Inspectors (ASHI), a professional organization with around 5,000 members whose guidelines have been adopted as the industry standard, says its member inspectors must "observe" the roof, but it doesn't say they actually have to go up there.

"Training? What training?"

As a rule, who do you think faces more stringent licensing requirements, manicurists or home inspectors? While many home inspectors have years of experience that make them experts at what they do, the only credential some can boast is an ad in the Yellow Pages. In fact, 16 states, including California, still have no regulations for home inspectors, and even those that do don't always require much in the way of training.

"I'm more loyal to your real-estate agent than I am to you."

Since many prospective homebuyers are new in town, they naturally turn to their real-estate agent to recommend a home inspector. Not a good idea. It often makes sense to hire an inspector who comes recommended by your agent. After all, they are familiar with the inspectors who work in their areas. There are agents who will refer the best inspector to their clients. But there are other agents who don't want to work with those inspectors because they're known as "deal breakers"

"Oh, you want a real home inspection. Well, that's going to cost you."

The checklist for a standard home inspection, which starts around $300 to $400, may seem to cover all the basics — but watch out: Even ASHI-approved inspectors aren't required to look for problems with kitchen appliances, fire and lawn sprinkler systems, septic systems, lead paint, radon gas, smoke detectors, (no central) air conditioners, pests, and geological and soil conditions. These "extras" nearly always add to your bill.
Source

Fannie Offers Spur to Avoid Foreclosure

2010-05-07T12:49:00.000-07:00

Fannie Mae will make it easier for some struggling homeowners to buy houses in the future if they avoid foreclosure in the present.

Under rules released this month that will take effect in July, some troubled borrowers who give up their homes by voluntarily transferring ownership through a "deed in lieu of foreclosure" or by completing a short sale, where a home is sold for less than the amount owed, will be eligible in two years to apply for a new mortgage backed by Fannie.

Currently, borrowers who complete a deed-in-lieu of foreclosure must wait four years before they can take out a loan that Fannie is willing to purchase.

The new policies from Fannie, a government-backed mortgage-finance company that together with Freddie Mac backs about half of the U.S. mortgage market, don't relax waiting periods for borrowers who go through foreclosure.

In 2008, Fannie lengthened that waiting period to five years from four.

To quality for the reduced waiting period, most borrowers will need to make a down payment of at least 20%, although borrowers with extenuating circumstances, such as a job loss, will be required to put down just 10%.

Even if waiting periods are shortened, many borrowers may be unlikely to repair their credit that quickly in order to get a loan in the first place. Foreclosures and short sales generally have the same effect on a borrower's credit score and can stay on a credit report for up to seven years.

The new rules are designed to make foreclosure alternatives more attractive to borrowers at a time when the Obama administration is ramping up its effort to encourage banks to consider alternatives such as short sales. That program sets pre-approved terms for short sales and offers financial incentives to borrowers and lenders to complete such sales.

Freddie Mac requires borrowers to wait five years after a foreclosure and four years after a short sale or deed-in-lieu.

Those periods can fall to three years for a foreclosure or two years for a short sale when borrowers show extenuating circumstances.

Officials at the Federal Housing Administration, the government mortgage insurer, say they are considering changes to their rules, which require borrowers with a foreclosure to wait at least three years before becoming eligible for an FHA-backed loan.

"We are beginning to think about post-recession, how you address borrowers who became unemployed through no fault of their own ... and now deserve the right to re-enter the housing-finance system," said FHA Commissioner David Stevens.

But some worry that policies enabling defaulted borrowers to more quickly resume homeownership could encourage more people to default.

"We don't want to say that there's a 'get out of jail' card during recessions to walk away from your house," Mr. Stevens said.

In December, the FHA unveiled rules for borrowers who completed a short sale.

Those who have missed payments prior to completing a short sale or who didn't face a hardship and simply took advantage of declining market conditions to buy a new home must wait three years.

Source

Best Cities To Quit Renting And Buy A Home

2010-04-29T07:58:00.000-07:00

One of the most useless truisms of the realty business used to go like so: "Renting is like throwing your money away." Clearly this truism was patently false for buyers in 2006 and 2007. It turned out that buying a home in the U.S. in those years was like throwing money down a rat hole. Renting, by contrast, was a pretty savvy move.
If you're pondering whether to buy or rent, you know the decision is partly an emotional one. If you detest landlords and have plenty of money to put toward a house, you may prefer the pride of ownership, regardless of how low rents go. On the other hand, if you plan to leave town in a year, the transaction costs involved in owning make it a prohibitive prospect.

Chicago, Ill.
Neighborhoods: Gold Coast, Lincoln Park, Prairie District
Capitalization Rate: 3.4%
Rents here are modest but buying could pay off if you plan to stick around until the Cubs win their next World Series.

New York, N.Y.
Neighborhoods: Chelsea, Soho, Tribeca, West Village, Upper East Side
Capitalization Rate: 2.9%
Manhattan rents are unusually soft. Renters rejoice.

Los Angeles, Calif.
Neighborhoods: Beverly Hills, Pacific Palisades, Venice, Malibu
Capitalization Rate: 2.4%
A fine renters market. Let your landlord worry about broken pipes.

San Francisco, Calif.
Neighborhoods: Pacific Heights, Marina, Russian Hill, Telegraph Hill
Capitalization Rate: 2.2%
Renting is cheap relative to owning. Put your down payment into a more promising investment.
Source

Refinancing With Bad Credit

2010-04-26T07:26:00.000-07:00

Many years ago, it would have been extremely difficult for those with bad credit to obtain a mortgage loan in the first place. However, today there are so many loan options available and so many ways for lenders to protect themselves that those with bad credit can not only find a suitable mortgage but can also find appealing re-financing options as well.
Those with poor credit should carefully consider whether or not refinancing is ideal for them at the present time but the process is not much different for them as it is for those with good credit. Those with bad credit who want to learn more about refinancing should consult a mortgage advisor who specializes in mortgages for those with bad credit. Additionally the homeowner should carefully evaluate their credit score and whether or not it has improved. Finally the homeowner should evaluate their options carefully to ensure they are making the best possible decision.

Consult a Mortgage Advisor

Consulting with a mortgage advisor is recommended for those with poor credit. These homeowners may be knowledgeable about the process of refinancing but their situation warrants consulting with an industry expert. This is important because a mortgage advisor who specializes in obtaining mortgages and refinancing for those with bad credit will likely be very knowledgeable about the types of options available to the homeowners.

When consulting with the mortgage advisor, the homeowners should be completely honest about their financial situation and should provide the expert with all of the information he needs to assist them in finding an ideal refinancing agreement. Being completely candid will be very helpful in enabling the mortgage advisor to assist the homeowner in the best way possible.

Consider Whether or Not Your Credit has Improved

Homeowners with bad credit should carefully consider whether or not their credit has improved since the original mortgage was secured. Homeowners who have documented proof of past credit scores can compare these scores to current values. Each citizen is entitled to one free credit report per year from each of the major credit reporting agencies. Homeowners can obtain these reports for use in making comparisons to the previous credit scores. Imperfections on the credit report such as bankruptcies, delinquent or missed payments and other transgressions do not remain on the credit report.

These blemishes are often erased from the credit report after a certain period of time. The amount of time the transgression remains on the report is proportional to the severity of the offense. For example a bankruptcy will remain on the credit report for significantly longer than a late payment. In examining the credit report, homeowners should consider the overall credit score but should also note whether or not previous offenses are being erased from the credit report in a timely fashion.

Evaluate Refinancing Options Carefully

Once a homeowner has tentatively made a decision to refinance the mortgage, it is time to start considering the many options that are available to the homeowner during the process of refinancing. Most homeowners mistakenly believe one factor of the refinancing process they have no control over is the interest rate. While this rate is largely dependent on the homeowners credit score, even those with poor credit have the ability to lower their interest rate by purchasing point. A point is typically equally to one percent of the total loan amount and may translate to one quarter of a percentage point on the interest rate. When deciding whether or not to purchase points, the homeowner should carefully consider the amount of time it would take the homeowner to recoup the cost of purchasing the points. This will help to determine whether or not it is worthwhile to purchase one or more points when refinancing.

Homeowners will also have options in terms of the type of loan they choose when refinancing. Common options include fixed rate mortgages, adjustable rate mortgages (ARMs) and hybrid mortgages. The interest rate remains constant with a fixed rate mortgage, adjusts with an ARM and is fixed for a period of time and adjustable for the remainder of the loan period with a hybrid loan.

Source

Home loan reductions made permanent for 10,206 South Floridians

2010-04-19T06:05:00.000-07:00

by Kim Miller
The Obama Administration’s Making Home Affordable program has helped 10,206 desperate borrowers in Palm Beach, Miami-Dade and Broward counties get lower monthly payments.

Nationally, according to a report released Wednesday by the Treasury Department, 227,922 borrowers have received permanent modifications during the year the program has been in place. Another 780,951 borrowers are in trial modifications.

While the numbers have grown, they remain small compared to the estimated 6 million delinquent borrowers in the nation today.

Not all borrowers, however, are eligible for the program. The Treasury Department estimates about 1.7 million homeowners currently can qualify for a modification.

University of Florida business professor Christopher James said it just makes sense for banks to help borrowers by modifying loans.

“If you can get a borrower to a point where they can better manage their personal finances you are more likely to get recovery on at least a part of your loan,” James said. “Foreclosure is an expensive process for the borrower and the bank.”

Wednesday’s report also points out that 2,879 permanent modifications have been cancelled, likely because the borrower failed to keep current on the payments.

Interest rate reductions were reduced in 100 percent of the cases reported to the Treasury. About 39 percent of borrowers had the life of their loans extended, while another 27.6 percent were given a principal forbearance. The report does not say whether the forbearance was an actual forgiveness of the principal amount, or principal taken off the front of the loan, but tacked onto the back.

The Miami Herald reported hundreds of people lined up for the 5-day Neighborhood Assistance Corporation of America in Miami Beach.

Source

5 cities where the recession is easing

2010-04-13T07:38:00.000-07:00

Jobs in Washington are growing quickly, and in 2008 the city produced more in goods and services than almost anywhere in the country.D.C. and nine other cities (among them: Boston, Los Angeles and a host of metros in Texas) are best surviving the downturn in part because they specialize in industries that are relatively insulated from economic volatility. Federal and state jobs all but guarantee the health of a local economy, and nowhere is there more government-related work than in Washington. The city has one of the lowest unemployment rates in the country, at 6.2%, and its output amounts to $362.3 billion, more than three times the average for the country's largest cities. Uncle Sam as a recession shield

Government spending hasn't hurt Austin, Texas, either. It's the seat of state government and tied for No. 1 on our list of 10 cities best surviving the recession. Jobs have been lost nearly everywhere in the past three years, but between December 2007 and December 2009 the number of jobs in Austin rose by 0.98%; more than any of the other major cities we looked at. And jobs are expected to grow by 8.09% in the next three years, the second-best job outlook on our list.

Third on the list is Dallas, home to a thriving technology and energy sector, where jobs are projected to jump 7.19% in three years.
Good fortune in the Lone Star State.
If one state is a poster child for economic recovery, it's Texas, home to four of the 10 cities on our list. There's more to why Austin, Dallas, San Antonio and Houston are faring well than just the state's energy industry.

Hope where housing markets stay afloat. California was perhaps hit hardest by the housing crisis. In spite of that, Los Angeles rises above the rest of the state, and other big cities in the country, to No. 9 on our list. Although the Golden State's real estate woes began earlier and were more pronounced than in large parts of the country, they began easing sooner.
Bright lights in the Midwest.
Many former manufacturing centers in the Midwest suffer from pronounced economic troubles that began befor and will likely extend beyond the country's recession. But that's not the case in two Midwest cities, Minneapolis and Kansas City, Nos. 4 and 10 on our list, respectively.

The top 5 metros where the recession is easing

1. (tie) Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.

2. (tie) Austin-Round Rock, Texas

3. Dallas-Fort Worth-Arlington, Texas

4. (tie) Minneapolis-St. Paul-Bloomington, Minn-Wis.

5. (tie) Houston-Sugar Land-Baytown, Texas
Source

10 cities for real-estate steals

2010-04-08T07:28:00.000-07:00

Memphis, Tenn. Higher home values pushed the price-to-income ratio in Memphis to nearly 5 in the first quarter of 2006 — sharply above its 2.13 average for the 15 years ending in 2003. But the subsequent 17.5% decline in home prices has restored affordability to the market.

Salinas, Calif.
As in many other markets in California, in the agricultural basin of Salinas, home prices have been hammered by the real-estate bust. Home values jumped more than 70% from 2002 to 2006. But as the bubble deflated, real-estate values plummeted 65% from their peaks. This rapid decline has made houses more affordable to would-be buyers in the area.

Medford, Ore.
The national housing bust has hit the outdoor wonderland of Medford, Ore., with a one-two punch. Because its timber industry is crucial to the local economy — wood-processing jobs represent at least a quarter of all manufacturing positions — the collapse of the new-home building market triggered higher unemployment in the area.

Washington, D.C.
As the federal government scrambles to undo the damage of the nastiest recession in decades, home prices in the Washington area have grown increasingly affordable.

Mobile, Ala.
After increasing during the first half of the previous decade, home prices in Mobile, Ala., have dropped about 7% in recent years. At the same time, the area's price-to-income ratio has fallen to 1.52 through the third quarter of 2009. That is significantly less than its average price-to-income ratio of 2.18 for the 15 years ending in 2003.

Las Cruces, N.M.
The housing market in Las Cruces, N.M., has become increasingly undervalued in recent years when compared with historical averages. The area's price-to-income ratio has fallen from 3.03 in the first quarter of 2006 to 1.37 through the third quarter of 2009. Growing affordability is one reason for the increase in home sales in the area in the third quarter. And aided by government jobs and health care employment, Las Cruces' population is expected to grow twice as fast as the rest of the country's.

Fayetteville, N.C.
The housing market in the military town of Fayetteville, N.C., also successfully avoided wild price swings that devastated other parts of the country. Rather than surging, home prices remained largely flat for most of the previous decade. Today, house prices in Fayetteville remain undervalued when compared with longer-term averages.

Phoenix
After jumping more than 85% from 2002 to 2006, home prices in the Phoenix area have crashed by 52% in recent years. The plunge has helped restore affordability to this warm, sunny location. From the fourth quarter of 2005 to the third quarter of 2009, the price-to-income ratio was cut in half. It now stands at just 1.52, notably lower than its 1.74 average for the 15 years before 2003.

Fort Worth/Arlington, Texas
In recent years, home prices in the Fort Worth and Arlington, Texas, area have also grown increasingly undervalued when compared with longer-term averages. The area's price-to-income ratio fell from 3.95 in the fourth quarter of 2005 to 1.89 through the third quarter of 2009.

Cincinnati
Home prices in Cincinnati have remained relatively affordable throughout the nation's recent boom-and-bust cycle.
Source

Secrets of home insurance claims

2010-04-06T07:07:00.001-07:00

You're at a disadvantage when you have major house damage or a total loss of your home. You face a home insurance claim process that could easily stretch out for more than a year, require reams of paperwork and leave you exhausted.
Public adjusters work on behalf of policyholders to help people get all they're entitled to from insurance claims. Adjusters help evaluate damage and rebuilding costs, track the flow of insurance payments and amounts due, and work with home insurance companies to expedite their clients' insurance claims.

1. A claim for a total loss of a house can cost less than rebuilding a damaged house.
2. If you have a mortgage, your insurance checks will be made out to both you and your mortgage bank.
3. Don't cash any insurance checks marked "full and final settlement."
4. Don't sign a release on your home insurance claim.
5. Don't let your insurance company replace your Pottery Barn stuff with Wal-Mart stuff.
6. Many condo owners have no idea that they need their own home insurance policies.
7. If you're forced to evacuate, don't sleep at a shelter.
8. After a widespread disaster, insurance companies will bring in company adjusters from out of state who aren't familiar with local costs.
9. People regularly settle for less than the total cost of their damages because they are exhausted.

Hiring a public claims adjuster can put you on an even playing field with your insurance company. Your insurer may assign three adjusters to work on your claim: one for "additional living expenses," one for your personal property and one for the building portion of your claim. A public adjuster will be able to explain the process and work on your behalf handling the countless meetings, e-mails, phone calls and paper documents that flow for a large claim.
Source

As PBC foreclosure paperwork piles up, so does desperation

2010-04-05T13:47:00.000-07:00

This is a recent article from The Palm Beach Post about Foreclosures in Palm Beach County.

Don Cameron's March 8 win in a Palm Beach County home auction is stalled somewhere on the third floor of the courthouse in stacks of foreclosure filings piled several feet overhead.

He'd like to start fixing up the three-bedroom house, renovate the kitchen, maybe get it ready for a first-time home buyer hoping to cash in on the waning days of the $8,000 tax credit.

But nearly a month after his $74,570 purchase, which he is required to pay for in full by noon the next day, the massive backlog of foreclosures in the Palm Beach County Clerk and Comptroller's Office still has him waiting for the home's title.

Despite tripling the number of employees who handle foreclosures, and scanning a feverish 30,000 case pages into the computer every day, staff can't keep up with what amounted to about 2,500 foreclosures each month last year. (In all of 2005, there were 3,049 foreclosures in the county).

By statute, the clerk can't release a title for 10 days, but waiting up to 60 days to claim ownership is cutting into Cameron's profit margin and, some say, the economic recovery.

Getting foreclosures back on the market means paychecks for people who do renovations.

Buyers will purchase furniture and accessories.

Real estate and property taxes get paid.

"We can't do anything. We can't get our money back, we can't work on the property, we can't sell the property, we can't market the property," said Cameron, owner of real estate investment company Hi-Land Properties, a West Palm Beach subsidiary of We Buy Ugly Houses. "It's a domino effect."

This year, the Florida State Courts Administration is requesting $9.6 million from the state to hire more judges and speed the backlog of foreclosures through the system. The administration estimates there are about 500,000 foreclosure cases pending statewide, including 55,000 in Palm Beach County, and 13,750 in Martin and St. Lucie counties combined.

But even if the judges get their money, the cases could still get stuck in a processing logjam on the clerk's side.

And lawmakers are looking to cut $23 million statewide from county clerks' budgets, including a $2.6 million dig in Palm Beach County that could mean a loss of more than 100 clerk employees.

Palm Beach County Clerk and Comptroller Sharon Bock said that kind of staff reduction would mean fewer services in satellite offices, years-long waits for divorces and a continued quagmire for foreclosures.

"These foreclosures are already languishing," Bock said. "By allowing that, there is absolutely a capital loss, a loss in business, a loss in the market and a personal loss to the person stuck in limbo."

Bock estimates an average foreclosure case takes her office an overall 230 minutes to process from the time it is filed, sold on a new online auction system, and to closing.

Last year, when auctions were still live, processing the 30,227 foreclosures took about 118,470 hours of clerk work.

"It's very paperwork intensive," said Mark Broderick, director of Palm Beach County civil court services.

Martin and St. Lucie counties would see 10 percent cuts in their budgets for next year.

In Martin, that would be a reduction of about $360,000 and likely 14 positions, said Martin County Clerk of Courts Marsha Ewing.

While Ewing is still able to get titles on foreclosed properties bought at auction processed in 10 days, she said she's taken employees from other divisions to keep up with the filings.

Martin had 2,082 foreclosures in 2009, compared with 127 in 2005.

In St. Lucie County, proposed budget cuts would equal about $810,000.

"Cutting the budget would be disastrous for the public," said St. Lucie County Clerk of Courts Joseph Smith, whose office processed 8,324 foreclosures last year, compared with 485 in 2005. Smith has a staff of 23 working on foreclosures. Five years ago, it was half that.

The proposal to cut county clerks' budgets is based on a law passed last year requiring clerks to track their average cost per case and base their budgets on the unit cost.

But the clerks have been collecting the data for less than six months, and at least one senator said it was therefore inconclusive.

The plan will go to budget conference for debate.

Meanwhile, Cameron is waiting to get title on five foreclosures he's purchased this year through auction. "We want to help improve the community, put people to work and assist the recovery," Cameron said. "But we keep meeting stumbling blocks all the way through."
Source

Foreclosure, How you lose your home matters

2010-03-25T11:53:00.000-07:00

It's common to assume that if you walk away from your home, the bank can't come after you for more money, because the loan was attached to the house.
But that's not always true. In some states, lenders can obtain a deficiency judgment for the difference between what you owed and what they got from selling your house.
Florida is one of those states. "No homeowner should walk away," says Rashmi Airan-Pace, a Florida attorney who specializes in mortgage modifications and foreclosure defense. "Deficiency judgments are very damaging."
Airan-Pace points out that lenders, for example, can seek to garnish wages or place liens on other properties.
Other states, including California and Arizona, are nonrecourse states, which means that laws there prohibit such judgments. You still have to be careful, though; some lenders get borrowers to sign papers obligating them to pay deficiencies anyway.
Foreclosure can ruin your credit scores for up to 10 years. When it comes to the effect on your credit scores, having a few late bills is to foreclosure what having a leaky faucet is to burning down the house.
When a foreclosure is filed against a property owner, that person's credit will go down 100 points. At the foreclosure sale, it goes down another 100.
A short sale would do about one-quarter as much damage to your scores. And though you can start pulling up your credit scores substantially from a short sale or a spate of late payments within a couple of years, a foreclosure can affect your credit history for a decade. If you can save your home by working extra hours, staying on a strict budget or taking money out of savings, you should consider it.
Source

Getting Your Home Hurricane-Ready. What to Do Now

2010-03-16T06:36:00.000-07:00

Tame Mother Nature Trim trees to reduce potential damage from falling limbs.
Clear Out Gutters
Clean rain gutters and keep them free of debris. You could create your own flood with clogged drains and gutters.
Get Rid of Clutter
Pick up things around your yard that you are no longer using, such as empty plant pots, etc.
Shield Glass
Purchase storm shutters or plywood to protect windows, glass doors, and skylights in the event of a storm.
What to Do Before the Storm Hits
Rearrange Belongings
Keep valuable items away from windows.
Bring the Outdoors Inside
Bring lighter-weight outdoor items indoors, such as trash cans, patio furniture, plants and toys. Secure other objects that could be picked up by the wind.
Shelter Your Car
If you have to evacuate and plan to leave a vehicle behind, put it in the garage or on higher ground. Avoid parking it under a tree or on a low-lying street where it could be damaged by water.
Secure Heavy-duty Items
Make sure to properly store items such as a boat or motorcycle, following the same general guidelines as with your car. If your boat will stay in the water, tie it down securely and remove the motor and any small objects.
Evacuate
Leave the area if necessary to protect yourself and your family. Always comply with mandatory evacuations by civil authority.
What to Do After the Storm
Wait Until the Coast is Clear
If you evacuated, listen to the radio or TV news stations and wait until the area is declared safe before returning.
Don't Flip the Switch
Once you return home, don't turn on the power right away if the area or your home is flooded. Have an electrician inspect your home first. You should have your gas lines inspected — avoid open flames or candles until you do. Also, have the plumbing checked.
Create a Documentary
Record or photograph any damage to your home and belongings — before repairs are made or claims are filed. Protect your property from further damage and keep all receipts for these costs.
Source

How Foreclosure Scams Steal Money Right Out of Your Bank Account

2010-03-08T12:29:00.000-08:00

While most of the focus of foreclosure scam operations undertaken by state attorneys general and regulatory agencies is on those companies that outright steal homes from people, there is a more common form of ripping off homeowners. Many companies specializing in dubious foreclosure help programs that take advantage of homeowners often do so by stealing hundreds or thousands of dollars straight out of their bank accounts.

There are a number of ways that this can be done, from taking money out of a credit card or debit card to presenting false checks to the bank. One method that is becoming increasingly common, though, is when a foreclosure scam is given pre-authorization to debit a customer's account, but then takes out more money than was originally agreed upon, or continues to take out money after the initial transaction, as on a monthly payment plan.

These types of schemes often come about when a company is willing to listen to the foreclosure victims, often them aid and gain their trust, and then proceed with getting a payment to begin the process of negotiating with the lender for a loan modification, short sale, or other solution. The homeowners are too quick to trust the company and will give their bank account and bank routing numbers over the phone, to be used by the scam to take out the authorized amount of money.

Unfortunately, it can be very easy for the scam to get hold of the bank account, routing number, and all other required information to make the draft. There is software available for free online, for instance, that allows anyone to print out a perfectly good check just by knowing this information. The signature is not an issue, as any consumer can authorize an agent to sign a check for them, or the bank is able to print on the check that it is "authorized by drawer" or through other similar language.

In examining the complaints of dozens of homeowners who have helped bring down various foreclosure scam companies that take money up front from consumers, this issue of overdrafting an account or making repeated charges is common. The fraudulent company may make an agreement with the customer for a $2,000 total fee, to be paid in installments of a few hundred dollars a month. But once it has the banking information, it attempts to take out the full amount.

Alternatively, the fraudsters may be given authorization to take out a certain amount of money one time, even if the agreement is to be an ongoing one. Once the consumers receive their next month's bank statements, though, they notice the bank has made another charge -- this one completely unauthorized -- using the same information that was given in the prior month. It may just keep presenting one draft after another until the borrowers close the account for good.

While it can be easy to find these mistakes and frauds, it can also be very difficult to fight them and get the money back to the original party. Some companies even use legitimate third-party payment processors to make their schemes look legitimate for as long as possible. And it is often their word against the homeowners' word. The banks have already allowed the transaction to go through, so they can be difficult to persuade to assist. Often, filing a complaint is the only option for many.

If customers are going to challenge an unauthorized draft (and they should), they must do so within a reasonable period of time after receiving their monthly account statement from the bank. The consumers will have to fight the charge on the grounds that the scam company was not given authorization to debit the account. Of course, this can present a challenge in that a charge usually was authorized, and the company had the bank account information of the consumer.

The main problem is often that the consumers will have to acknowledge to the bank that they did give authorization for some type of charge, just not for the amount that was debited or for that number of months that the activity went on. Because the bank will often be the party that bears the loss, it will be reluctant just to credit back the amount taken, and may just tell their customers to work it out with the company that took the money.

Obviously, homeowners need to be careful when working with a company to help them stop foreclosure on their homes. They should know exactly who they are working with and what they are paying for, and retain copies of all agreements to make payments to the company. If it turns out to be a scam, the borrowers may have a difficult time getting their money back, which proves the saying that an ounce of prevention is worth a pound of cure.

Source

The Florida Foreclosure Process

2010-02-26T05:42:00.000-08:00

Foreclosures happen in Florida when an individual or group is severely delinquent in payments or can no longer make payments on their mortgage. Any number of situations can contribute to the foreclosure process beginning: an injury preventing work, the loss of a job, a divorce or other financial strains. Foreclosure is the process of the bank or lending institution getting the property back and reselling it to recoup their money.

Florida is a judicial state. This means that all foreclosures must use the court system for processing. since banks differ and the courts are involved, the foreclosure process timeline varies slightly between individual cases. The average time frame is five to six months from the beginning steps until the finalization of a foreclosure.

Steps taken to Foreclosure

The first steps fall under the pre-foreclosure period. The mortgage holder is late with payment, but remain in the property while the foreclosure proceedings progress.

The Notice of Default is the first indication of late payment. it is a written notice sent to the mortgage holder by the mortgage lender. it will state how much money is owed and how late the payment is. A Notice of Default will state what you need to do in order to become current on your payments and prevent foreclosure from happening.

Lis Pendes is paperwork filed by the mortgage lender in the county courthouse. it states their intention to sue the property owners if they do not receive the mortgage monies. The court then creates the paperwork that notifies all parties involved about the upcoming lawsuit and the terms.

Notice of Action is the next step in the foreclosure process. When a mortgage holder cannot pay the terms stated in the Notice of Default and goes further in delinquency, a Notice of Action is posted in the local newspaper. it states the mortgage lender’s written demands to be paid on their loan and their intent to take back the property if the payment is not made.

Once the Notice of Action is posted, the formal foreclosure process takes place.

A foreclosure action, which is a lawsuit filed under the county where the property is located, is made. This states the intent of the mortgage company to evict the residents and take over ownership of the property. they will post the date and time of the auction where the property will be sold, anywhere from three to six weeks in the future.

At any time before the auction of the property, the mortgage holder can take back the property if they can pay off the mortgage in full. If they can pay for the mortgage in full, the proceedings are halted and the mortgage holders can move in and re-assume ownership of the property.

The last step of the foreclosure process is the Sheriff’s sale. This is where the property is auctioned off to the highest bidder at the county courthouse. The price is low to begin, but can escalate if it is in a hot location. once another bidder has won the auction and the property, the former mortgage holder has terminated all of their rights to the property. within ten days of the successful sale, the title is transferred to the winning bidder.

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Fixed-Rate vs. Adjustable-Rate Mortgages

2010-02-18T07:14:00.000-08:00

Fixed-rate and adjustable-rate are the two main types of mortgage loans. Deciding between the two can be difficult, so it is wise to weigh the advantages and disadvantages of each before making a decision. Fixed-Rate Mortgage
This type of mortgage loan guarantees the same interest rate over the term of the loan, regardless of whether market rates fluctuate.
Advantages
- Predictable payments, which makes budgeting easier
- Low to no down payment options
- Usually the most conservative mortgage loan
- Eligibility includes primary, secondary and investment properties
- Fifteen-, 20-, 30- and 40-year terms available
Disadvantages
- Generally higher overall interest paid
- Longer time may be needed to build equity in the home
- Interest rate typically higher than adjustable rate mortgage rates
- Refinancing necessary to take advantage of lower interest rates
Fixed-rate mortgages are good for long-term loans, especially if you plan to stay in your home for more than seven years. They are usually the preferred type of mortgage among borrowers when interest rates are low.
Adjustable-Rate Mortgage (ARM)
ARMs have a fixed rate for a set period, such as five years in a 5/1 ARM. After that period has ended, the interest rate will fluctuate with market changes — which means your monthly payment will vary as well. Interest rates on an ARM are generally tied to a market index, such as the U.S. Treasury Security.
Advantages
- Fixed interest rate for a set period
- Initial interest rate generally lower than a fixed-rate mortgage
- A larger loan may be approved
- After the set period, lower rates possible without refinancing
- Eligibility includes primary, secondary and investment properties
- Different types of ARMs to choose from
Disadvantages
- Interest rate and payments can rise significantly after set period
ARMs are best for short-term plans. If you intend on moving before the set period or if you want lower initial monthly payments, this may be the best mortgage option for you.
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Do 'underwater' homeowners deserve help?

2010-02-05T07:37:00.001-08:00

The New York Times on Wednesday weighed in on the practice of homeowners walking away from their mortgages because they owe far more than the properties are worth. It is happening more and more these days.
The article points out that the government is struggling with whether, or how, to help people who are so far "underwater." People who just can’t afford to pay their mortgage.
Lenders argue that these borrowers signed valid contracts and should be bound by them. They should have weighed their options and done some budgeting or financial planning before signing a contract. It is estimated that one quarter of homeowners in the United States owe more than their properties are worth. Most likely, the number is much higher in Florida, with estimates reaching as high as 50 percent for the states.
But some of these homeowners say they simply had the misfortune of buying at the height of the housing bubble, and the resulting declines in value mean they’ll be stuck in their properties for a decade or more until they can sell for what they paid. Is it fair that they have to take such a big hit for so long? I know a lot of people have very strong opinions about this issue. The moral challenges with walking away from your home, there also may be financial and credit repercussion that could result.
Let us know what you think. And don’t forget to add us as a friend on Facebook!!
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Using Your Tax Refund to Help You Stop Foreclosure

2010-02-02T06:43:00.000-08:00

Many Americans have fallen behind on their mortgage payments in the last year and are looking for ways to avoid foreclosure. If this sounds familiar, you have more options to choose from than you might have had two years ago. Using your tax refund to avoid foreclosure may be your best option. This will help you buy the time you need to help the recovery process. A Forbearance Agreement temporarily lets borrowers pay less than the full amount of the mortgage payment during an agreed upon period of time.
Lenders may consider this an option if you can show that funds are coming in from an alternative source. Using your tax refund to avoid foreclosure will often encourage your mortgage holder to work with you. Depending on your individual situation, the forbearance agreement may allow you to go without making any payments for up to a year.
If you have recently found a new job, your lender may agree to reduce or suspend payments while you get back on your feet. Using your tax refund to avoid foreclosure will help pay them back faster and help you get to work on rebuilding your credit. The important part is to begin working with your lender or a third party organization as soon as you can. If you have missed only one or two payments your options will be different than if you have missed several. A loan modification has also been an option for millions of Americans at risk of foreclosure.
In this process, one or more of the original loan terms are changed. You may have reduced monthly payments due to a change in interest rates or an increased length of the loan. If you are using your tax refund to avoid foreclosure, your lender may agree to lower the payments without increasing the length of the loan. This will greatly depend on your situation. This is also helpful if your lender is willing to set up a repayment plan. With this type of alternative, the lender adds a specific amount to the original monthly requirements, or in the case of a tax refund, one lump sum.

A Financial Plan for the Newly Rehired

2010-01-15T06:12:00.000-08:00

So you've finally got a job—after months of looking.

Congratulations. Savor the moment. Getting a job in this economy is a real achievement. Around 15 million people are officially unemployed—and that's not even counting those who have given up looking. That figure includes more than 6 million who have been out of work for more than half a year.

But when it comes to getting your finances back on track, getting back to work is just the first step. You may have blown through your savings, piled up debts and left your last financial plan in the dust.

How do you start rebuilding? Try this:

• Confront your debts.

It's human nature to try to avoid bad news. But as Michelle Fait, a financial planner in Seattle, observes, "the best way to make a strong transition back to financial self-sufficiency" is to take the tough steps to address "the unpleasant, scary repercussions of a personal financial downturn" rather than just hoping they will resolve themselves.

If you are behind on debt payments, you should talk to your lenders and discuss the situation. You may be able to negotiate with them a reasonable catch-up plan. Remember: Your mortgage lender needs to come first, because that debt is secured against your home.

If you are so deeply in the hole on your credit cards and other unsecured debts that you cannot see a way out, you should talk to a credit counselor or bankruptcy attorney and consider filing for personal bankruptcy. This is an ugly truth that people need to consider. (Indeed, you may be better off exploring this before you get back into work, as in some cases having an income may limit your options.) Filing for bankruptcy will stop those creditors from taking action on your debts, and may lead to them being discharged so you can start with a clean record.

.• Get yourself insured again.

If you had let any critical insurance lapse while you were unemployed, this is the moment to look into getting yourself covered again. That may include signing up for health insurance at your new workplace, as well as purchasing life and disability coverage.

Make sure you make a trip to the benefits office soon after starting your new job. You may have an early window to sign up for health insurance, though you may have to wait months to join the 401(k) plan. Make sure you understand what's available, and when you are eligible, so you don't miss out.

• Stay frugal.

Adam Leavitt, a financial planner in Tulsa, Okla., puts it simply: "The best way to rebuild after unemployment is to act like you still are."

In other words: Keep those expenses low.

Your newly frugal—or at least simplified—lifestyle is the most valuable asset you accumulated during those long months out of work. And you earned it the hard way, too. Don't throw it away lightly.

Everybody knows spending has a habit of expanding with our incomes. Some studies suggest we miraculously "need" to spend an extra 50 cents for each dollar we make. Clearly, a lot of it is just wasteful. I'll bet when you were unemployed you axed a lot of things that you found you could do without. You can do yourself a big favor right now by keeping it that way.

• Pay off those credit cards.

You're probably paying 20% or even 30% interest on your card balances. Paying these off as fast as you can is the single best thing you can do to help your financial recovery. Eat noodles till they're paid off. You don't like noodles? Have soup.

There are two schools of thought regarding credit-card debt. Some argue you should pay off the debt with the highest interest first. The second, usually associated with money guru Dave Ramsey, says you should pay off the smallest bills first. That creates psychological momentum and a so-called snowball effect. Math supports the first approach. Take your pick, but I have to say I'm with Mr. Ramsey. Zapping a bill—and destroying the card—is a great feeling. The sooner you begin, the better.

• Rebuild your emergency funds.

You hardly need reminding why you need to have a cushion for the future. If you have maxed out your credit cards, it may actually make sense to build up some cash savings even before paying off all those cards, in case you are suddenly hit with another crisis.

"While it may be tempting to throw as much money as possible at credit-card and other debt," says Milo Benningfield, a financial planner in San Francisco, "it's usually better to strike a balance between paying down debt and accumulating new cash."

How much do you need? Some planners argue you need to build up six months' or even a year's worth of expenses and keep the money in cash or short-term CDs. It sounds great in theory. But do the math. The typical American family spends about $40,000 a year. Keeping $20,000 to $40,000 in cash—earning virtually nothing after taxes and inflation—is going to be a poor strategy for many people. No, there isn't a perfect solution. You certainly want to build up a few months' expenses in cash. But you may want to consider other investments and lifelines—like some bonds and stocks—as part of your emergency cushion.

You can include your Roth IRA as part of that cushion, too. Barbara Camaglia, a financial planner in Beachwood, Ohio, notes that you can withdraw your Roth contributions at any point without tax or penalty.

• Refinance!

To someone trying to avoid foreclosure, this may seem a distant dream, but don't dismiss it completely. Once you've repaid your toxic debts, banked some paychecks and rebuilt your credit score, you may have a chance to refinance your mortgage. Take it. Rates are low right now. According to Bankrate.com, you can still find a 30-year fixed rate loan at 5% or even less. Tim Brown, a financial planner in Eden Prairie, Minn., suggests refinancing if you can cut your rate by at least 1.5%. You may even want to make the move for less, depending on your circumstances. Cutting your rate by just a percentage point on a $200,000 loan, for example, will save you about $1,500 a year in mortgage payments.

• Replot your course.

So you've been blown off course. The sooner you get out the financial compass and map and take a look, the sooner you can start getting back to where you want to. The period out of work has cost you money and time. Both are key elements of a financial plan. The road back, obviously, is probably going to involve saving even more money (see "Stay Frugal," above). You may also want to look at adjusting, or delaying, your goals. Putting off retirement for a year or two changes the numbers dramatically.

• Shelter your assets.

Too many people have lost everything in the last couple of years because they didn't take advantage of simple protections that were available to them.

Your Individual Retirement Account, 401(k) and college-savings 529 plans can shelter your money against your creditors as well as from taxes. Depending on your state, so, too, can some other types of assets, such as life insurance. You may also be able to protect your home either by filing for so-called homestead protection, or, if you are married, by retitling as a "tenancy by the entirety."

In the case of IRAs, you still have till April 15 to use up your 2009 allowance—$5,000 for an individual, $10,000 for a married couple and $12,000 if the couple is over 50.

Timothy Parker, a financial planner in Ridgewood, N.J., notes that even if you take a hardship withdrawal from your IRA, you can avoid penalties if you can pay it back within 60 days. You "won't be taxed or penalized for this withdrawal, because it was 'rolled over' as if it was never taken," he says. One caveat: You only get one such rollover per year.

I don't know whether this economic recovery is going to be "V"-shaped (fast), "U"-shaped (slower), a "W" (double-dip) or an "L" (nonexistent). Nor do you, and nor does anybody else— though that won't stop them pretending otherwise.

What can you do about it? Be prepared, Boy Scouts. Shelter your assets, so even if you have to go without a job again, your retirement savings, your home and your children's college educations are not in danger.

Write to Brett Arends at brett.arends@wsj.com

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Earthquake Relief for Haiti

2010-01-14T07:00:00.000-08:00

In an effort to help those who have been affected by the earthquake in Haiti, and their continuing tragedies, Credit Card Management Services, Inc. d.b.a Debthelper.com is now a collection center to help those in need.

Your gift will help distribute relief supplies to children and families impacted by the earthquake and aftershocks in Haiti.

Anything you are willing to provide will be greatly appreciated and invaluable to the families you will be helping. The immediate need is dry foods such as rice, beans; can foods, tents and army type cots, blankets and medical supplies.

Where: 4611 Okeechobee Blvd. Suite 114 WPB, FL 33417
Time: Mon – Fri: 9:00am – 8pm; Sat: 12:00pm – 5:00pm
Information: (561) 472-8000

Debthelper.com

Fighting the Foreclosure Legal Process in Florida

2010-01-07T06:14:00.000-08:00

If you live in Florida and are facing the possibility of having your home foreclosed, you are probably trying to find out as much about it as you can. Foreclosures are carried out through local court proceedings. The entire process begins when you fall at least thirty days behind on your mortgage payments, though you can usually go at least ninety days or longer without the courts becoming involved.

The lender of your mortgage initially files a notice with the courts. If you are under the impression your lender may have done so, you will know for sure when you receive a notification in the mail or delivered by a local sheriff's deputy. Do not ignore this important warning as if it were junk mail or simply a threat against your home that you can not respond to. You must respond to it within the period of time indicated on the notice.

If you fail to respond to your foreclosure notice in the given time allotment, the court will rule against you and award the lender a default judgment. This means the court can assign a sale of your home to satisfy the judgment, which includes the total amount still owed to the mortgage holder in principal, interest, fees, and court costs. Under Florida foreclosure law, you can still save your home at this point all the way up to the scheduled date for the sale of the home by acquiring enough funds to repay the lender everything you owe.

To give you an idea of how much time you have to get the necessary funds to pay your lender back, the scheduled date for the sale of a foreclosed home is usually between 20 and 35 days following the court’s decision. The originally set date is always subject to change based on the court’s calendar, locality and conflicting schedule times of the auction itself. Homeowners and banks can also work together to postpone a sheriff sale if there is a possibility of another solution solving the problem.

Notices are kept up-to-date weekly for at least two weeks and the official date and time is announced five days preceding the auction. This way, even though times and dates may change throughout the proceedings, you have a clear knowledge of the exact date five days in advance. This is an especially important deadline to keep in mind when negotiating with a lender for a loan modification, short sale, or other alternative to foreclosure.

If this is the point you are at right now with your Florida foreclosure, it is not too late! You can still get your home back by making your account current once again. Remember, this will probably include the payment of late fees and other charges your account may have built up in the time you were delinquent in your payments. You may be able to pay up the account by borrowing money from friends and family, cashing in assets, refinancing, or even just selling the house.

No matter where you are in the legal process of losing your property, you probably still have options. As long as ownership of the home has not been transferred, there may be solutions available. You can learn exactly how to go about stopping foreclosure even in these late stages by meeting with a financial and foreclosure expert. Be sure to choose a reputable source.

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The True Cost of Having a Baby

2009-12-29T13:18:00.000-08:00

By: Young Money (View Profile)

Whether it’s an accident or carefully planned occurrence, having a baby is an enormous responsibility—one you may not be ready for. Many couples plan carefully for any new addition to the family, but others are caught off guard, having spent little thought or preparation for the arrival of a baby.

Statistics show that approximately 6 million pregnancies occur each year in the U.S. alone. With over 60 million women in child bearing years, only 64 percent use contraception, and over 450,000 babies are born to teenage mothers. Unexpected pregnancies become more common and the costs increase due to lack of planning and preparation. Planning and preparation, which could save young families hundreds, if not thousands of dollars each year, as well as reducing the psychological and educational costs involved.

According to The National Campaign to Prevent Teen and Unwanted Pregnancy, 48 percent of community college students have been or gotten someone pregnant and 61 percent of these individuals have not finished college. That’s a lot of young people missing out on a college education.

Are you ready to grow your family?

Money takes the romance out of trying for a baby but if you don’t consider it a priority, you’re only asking for trouble. Babies cost money; money which you may not have. It may seem impossible to imagine that your little bundle of joy can cost you more than anything you’ve ever purchased. The truth is, baby number one is going to cost you more than a small car, and that’s just in its first year.

Do you have a spare $8,000 lying around?

According to PregnancyToday.com, you’re looking at $8,000 in the first year alone. For some people that might not seem like much; unfortunately, that figure doesn’t include birthing costs, pregnancy check-ups, and unexpected expenses that can arise. If you don’t have insurance, the cost before you even step out of the hospital can be double or triple that amount. Wannabe mothers and fathers can forget about the reality of the situation. A baby is for life and it will change yours completely.

Dreaming up names, shopping for baby clothes, and flicking through parenting magazines may sound like fun but it’s not enough to prepare you for the true cost of having a baby. With half of the pregnancies in the U.S. being unplanned, one third are to unmarried women in their twenties. More than half are likely to drop out of college and forgo a quality education in order to raise their child. With added emotional and financial stress, they are unlikely to return to college once the baby gets older. Dropping out of college due to an unplanned pregnancy results in a lower income and increases the risk of living in poverty. The psychological stress can be even more costly.

So, what are the actual costs of having a baby?

The true cost will depends on a number of factors. According to the U.S. Census Bureau only about 250 million Americans had health coverage in 2007. Without health coverage, a hospital birth will set you back about $7000 upwards. A home birth with a midwife will cost around $3000. Then, you have to think about nappies, chairs, a cot, pram, stroller and you’re looking at another few thousand in the first few weeks of your newborn’s life. These are costs that cannot be avoided. Second hand is an option or making the most of “hand me downs”—but that’s not always possible.

Nappies can cost anywhere from $75 to $125 per month. Not breastfeeding? Add $100 per week for formula. If you need to work, sending your baby to child care will cost anywhere from $0 to $800 per week. That’s a lot of cash needed from day one, every week and every year of the baby’s life. As they grow there’s clothing and education costs to consider. By the time your child reaches 18, you may have spent anywhere up to $250,000—before college tuition. It’s possible to spend over $1000 per week on your newborn. In the end, being prepared allows you to enjoy being a parent instead of stressing about finances or all the other costs involved with having a baby.

How can you prepare for a baby?

1. Contraception is vital. If you’re not pregnant and not yet prepared to have a baby make sure that you are using an effective form of contraception. Condoms or the pill are a cheaper option compared with raising a child.

2. Get health insurance that covers you and your future baby. Check that all your costs are covered and you won’t be hit with an unexpected hospital bill reaching the tens of thousands once you’re home.

3. Start saving right now. It doesn’t matter if you are only in the planning stage. The sooner you start saving, the easier and less stressful it’s going to be once the baby arrives. Even $50 per week is going to make a difference at the end of the year.
4. Clear any debt you may have and avoid getting into new debt. Having to pay credit card bills or loans will only add to your new financial responsibility.

5. If you’re in a relationship try living on just one pay check for a few months, while putting the other in a savings account. This will help you learn how to spend less and give you an emergency fund for when the baby arrives.

By Katarzyna Radzka for YoungMoney

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How Does Loan Modification Affect Your Credit?

2009-12-16T07:12:00.000-08:00

One of the great concerns shared by many homeowners who have missed several mortgage payments is what options are available to them, and how each option can affect their credit rating. While these borrowers know that their credit has deteriorated severely due to the foreclosure situation, they also want to preserve as much as possible their chances of borrowing money in the future.
Loan modification is the latest trendy method to stop foreclosure, with numerous government programs subsidizing lenders and homeowners. Thousands of foreclosure consulting firms offering to help borrowers negotiate with the banks (for a fee) have also cropped up all across the country.

While modifying the terms of a mortgage can be a great plan for some borrowers, few people have really questioned how a modification will be reported to the credit agencies. They are somewhat similar to refinancing a home, entering into a forbearance agreement with a lender, and even filing a Chapter 13 bankruptcy.

Government rules, until very recently, have also been unclear as to how lenders should report a loan modification on clients' credit histories. Some banks would have the record state "paid as agreed," while others would designate the payments as "partial payments." Some would even just keep the loan in a state of "foreclosure" until the temporary modification or repayment plan was completed.

All of these different approaches had widely varying effects on a borrower's credit score. Having a loan shown as "paid as agreed" was obviously the best solution. Partial payments is considered a negative to prospective lenders and would cause a decrease in the credit score. Having a credit report show a foreclosure would be almost as bad as just having filed bankruptcy and discharged all of the debt.

To address all of these different approaches the lenders were using, the government implemented another new regulation to impose a consistent reporting requirement on the industry. This new rule applies to all government-subsidized mortgage modification plans, and it went into effect on November 1, 2009.

The new rule requires that banks report a mortgage modification to the credit rating agencies as "loan modified under a federal government plan." Another requirement is that this designation will have no effect on the borrower's credit (FICO) score. This is partly due to the relatively small number of people who have received a modification to avoid foreclosure.

Once there are more mortgages with the federal government designation, then the credit rating agencies will be able to decide how to change the debtors' scores. This will require more modifications to go through and past ones not to redefault back to foreclosure status.

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The Ultimate Holiday Tipping Guide

2009-12-14T06:59:00.000-08:00

By Sarah Toler
When every dollar counts, who should get a tip? How much? If gratuity etiquette baffles you, read on for Lifescript’s ultimate holiday tipping guide…

Americans are cutting back on many things this holiday season, but tipping isn’t one of them. According to a Consumer Reports November survey, consumers will shell out about the same amount they did last year.

But tipping isn’t one-size-fits-all. Service professionals in New York expect bigger tips than those in Billings, Mont. And haute hairdressers may get more generous holiday tips than the local barber.

Most of us know to tip the people who serve our everyday needs. But, at holiday time, other workers also deserve a show of appreciation.

Holiday Tipping

When money is tight, it’s tempting to skip holiday tips or to give homemade gifts instead. But many service workers rely on cash to buy a winter coat, new tires or pay the rent.

Here are some holiday tipping guidelines from the Emily Post Institute:

Regular babysitter: One evening’s pay and a small gift (from the kids)

Cleaning person: One week’s pay or the cost of one visit

Child’s teacher: A small gift or note from you and a small gift from your child

Hairstylist/colorist: The cost of one visit, or a gift equalling that amount (such as a bottle of champagne)

Newspaper delivery person: $10 to $30

Postal carrier: Mail carriers are forbidden to accept cash, however, the U.S. Postal Service allows gifts worth less than $20.

Garage attendants: $10 to $30

Gardener: $20 to $50 each Pool cleaner: The cost of one cleaning

Pet groomer: The cost of one session or gift

Dog walker: Up to one week’s pay or gift

Building superintendent: $20 to $80 or gift

Handyman: $15 to $40

Tipping Year-Round

It’s now standard practice to tip waiters, taxi drivers, pet groomers, massage therapists and many others. Amounts vary based on service, location and total tab. Here are some yardsticks:

Restaurants

The customary tip for food servers, cocktail servers and bartenders is 15% to 20% of the total pretax bill. Why so much?

Restaurant wait staff earn an average $4.38 per hour, according to the National Restaurant Association. But if those workers collect tips, the federal minimum-wage law allows restaurants to pay them as little as $2.13 an hour. The gratuities help them make ends meet.

Keep this in mind if you’re tempted to stiff servers with bad attitude.

Instead, speak to the restaurant manager. They’ll usually offer disgruntled diners an apology or free dessert, which may encourage you to tip kindly.

If you’re still unhappy, shave a few dollars off the tip. Busboys generally get a share of the tips. By not leaving anything, you’re also hurting back-of-the-house staff who filled your water glass or cleared your dishes.
Here’s what the Emily Post Institute recommends:

At buffets, tip the server 10% if drinks or silverware are delivered to the table.

When picking up take-out orders, tip 10% if an employee gave beyond-normal service.

For food deliveries, give the driver a 10% tip.

At bars, tip $1 a drink or 15% to 20% of the tab.

Don’t tip a restaurant host/hostess unless they score you a hard-to-get reservation or well-located table.

Travel

After hopping out of a taxi, limo or shuttle, it’s customary to tip the driver 15% of the total fare. If the driver loads or unloads your bags – or helps you in or out of the car – tip 20%.
Tipping continues at the airport, so keep small bills handy. To make sure your luggage arrives with you, tip $1 for each bag the skycap handles – on top of the mandatory charge for skycap service.
If you’re racing to the gate on an airport-operated electric cart, tip the driver $2 per person.

At the hotel, skip the valet tip upon arrival, but give them $1-2 when your car is returned.

If a doorman or bellhop takes your luggage from the car to lobby, $1 a bag is acceptable. Double that amount if he schleps the bags to your room. If he hails a cab, tip $2.

Many hotels offer concierge, in-room dining and spa services. Concierge generally get $5 to $10 tips per service provided (dinner reservations, event tickets, destination advice or special favors, like arranging a birthday gift for your spouse).

Gratuities for room service and spa treatments are sometimes added to the bill, so ask beforehand. If tips aren’t included, give workers 15% to 20%.

Maid service tips run $1 to $10 a day, depending on how the length of your stay and mess you’ve left behind. Minimum gratuity is $1 a day.

Other Professionals

You’re not done yet! While you can ignore a tip jar by a register, don’t forget about the other people whose services you use regularly – pet groomers, car washers and more.

Here are some often-overlooked service workers and recommended average tips for each:

Car detailer: 15%

Car washer: $2 to $3 for a car and $3 to $5 for an SUV or truck

Coat check attendant: $1

Emergency locksmith: $5

Furniture or appliance delivery person: $5 to $10

Manicurist, facialist or aesthetician: 15%

Massage therapist: 20%

Pet groomer:15%

Pet sitter:15%

Shampoo or other styling assistant: $2 to $5

Shoe shiner: $2

Tattoo or piercing artist:10% to 20%

Tire changer: $4 to $5

Tow truck driver: $5

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2009 - A Nation in Foreclosure

2009-12-07T12:51:00.000-08:00

Yesterday on Twitter Pam Crouch posed, "Raise your hand if you think that the year 2009 was not one of your greatest, or some stronger version of that statment."

Collectively, as a nation, it is easy to believe well over 50% would raise their hand - at least partially. It will be remembered as a year where old failures were repeated, more mistakes were made than correct actions, temperatures got cooler (again), a greater divide was created between political parties and peoples, and more foreclosures than at any other time in history were consummated.

Millions of foreclosures

There were over 1 million foreclosures in 2008. By June of 2009 a Wall Street report indicated the nation had already passed that number and added an additional 10%. Elementary math will tell you that was 2.1 million foreclosures in 18 months. There's a small problem that reaches far beyond the individual home owners who entered foreclosure. It touches every one of us.

Quoted in a report on NPR.com Senior Vice President Ken Scheller is in charge of "home retention" — an effort he says is designed to "keep as many people in their homes as possible." According to Scheller the number of people at Bank of America handling foreclosures and defaults doubled in 2009 to 8000. Let me spell that out, eight-thousand people are employed by the bank to help stop and control foreclosures.

Agents on the online community Active Rain and elsewhere have long complained about the slowness of lenders to act in short sales. How much more should lenders do? President Obama gave his opinion earlier this week when he indicated lenders and servicers who are not meeting his standards would suffer the consequences.

You don't frighten me
"Shaming people into doing the right thing is very slow, and a lot of people will lose their homes in the meantime," said Diane Thompson, a lawyer with the National Consumer Law Center in an LATimes interview.

Remember that new FHFA (Federal Home Finance Administration) that was created under the Bush administration? This is from their August report which was published at the end of November, "Fannie Mae and Freddie Mac completed nearly 32,000 home retention actions in August 2009, a 32 percent increase from July. Separately, trial mortgage loan modifications under the Administration’s Home Affordable Modification Program (HAMP) increased nearly 30 percent from September to October 2009. The data were released by Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), as part of the agency’s monthly Foreclosure Prevention Report. The report summarizes mortgage delinquency and foreclosure prevention data for Fannie Mae and Freddie Mac through Aug. 31, 2009 and HAMP trial modifications through Oct. 31."

If you read those numbers that is 32,000 in one month. Suppose the lenders only wrote down $20,000 for each on. Do a little quick math and you see it easily could have been $640,000,000 - for one month. ONE month.

The reaction of course is, "Well, if they had not made those bad loans ..." True. So now many people are getting what they wanted. By February of 2010 it is estimated that only 1 in 7 mortgage applications will be approved. That alone is enough to put the final nails in the coffins of the few remaining small lenders and mortgage brokers. That, in turn, will lead to less competition which will me fewer places to shop.

Waxing political

Of course the national regime and the bevvy of czars is seeking to continue the lies about Yield Spread, lender fees and appraisal values anyway. Even if you're not a conspiracy theorist you have probably wondered why so many regulations are being placed on smaller lenders and the megabanks are not even required to license their loan officers or tell the borrower how much profit they are making.

Then again - life is not fair. So you have to win anyway by finding a different path or a different set of tools.

For more information you may contact the author at 678-439-8683 or email reibroker@gmail.com - your comments are encouraged.

Source

Mistakes to avoid when managing your debt

2009-12-01T06:19:00.000-08:00

Most people carry some debt, whether it's a credit card balance or the money they owe on a car loan or home mortgage. Debt is not necessarily a bad thing, but it can become a problem if you allow it to get out of control. Here are some tips on mistakes to avoid in managing what you owe.

Pay with cash

If you have enough cash to pay for a purchase, don't be tempted to put it on your credit card instead, which is an easy way to spend more than you intended -- and in many cases more than you can really afford. Before you reach for that plastic, think about whether you've got the dollars you need for the purchase. If you do, set the credit card aside for the bigger-ticket items that are in this month's budget.

Watch your credit report

Credit agencies maintain information on your credit history and give you a credit score based on whether you make your payments on time, run up heavy balances and other factors. Lenders use your credit score to decide whether you qualify for a new loan and what interest rate you ought to pay for it. If the information in your credit report is incorrect, you could end up being denied a loan or paying unnecessarily high interest rates. You are eligible to receive a free credit report from each credit agency once a year, so take advantage of this option and review the information carefully. If there are errors, inform the agency and ask how they can be corrected.

Don't miss a payment

Skipping a payment or mailing your check a little late may not seem like a big deal, but it can cause a big headache. Not only will you likely be stuck with a late fee, but your creditor may also raise the interest rate it charges you. When other creditors see the late or missed payment, they may deny you credit or raise the rates they charge you. This small delay can become a costly mistake.

Don't stick to the minimum

If you're squeezed for cash, it is better to pay a little rather than nothing at all, but try whenever possible to pay off as many of your recent purchases as possible. If you pay as you go, you avoid interest charges on your purchases altogether. Even if you can't cover your full balance, paying only the minimum that's due lengthens the amount of time you'll have that outstanding balance--and that increases the interest you will pay.

Don't leave your creditors in the dark

Creditors understand that good customers sometimes fall on hard times, especially in the current troubled economy. And they're often willing to work with you to prevent your account from falling into default, but you have to let them know that you're facing problems. If you lose your job or face some unexpected financial hardship, contact all of your creditors immediately. Ask them if it's possible to pay a lower interest rate or minimum payment for the time being, or if you can skip payments altogether for a few months until you're back on your feet.

Stacey Singleton, a partner at Broussard, Poché, Lewis and Breaux, is president of the Acadiana chapter of the Louisiana Society of CPAs.

Source: The Advertiser

Rent your own home

2009-11-24T07:15:00.000-08:00

Homeowners who can't afford their mortgage payment, but still want to live in their current home may be keen to learn more about Fannie Mae's new Deed for Lease program, which allows homeowners to sign a deed in lieu of foreclosure and then rent back their home and continue to live there.

The program, known as "D4L," is another option for homeowners who are in danger of foreclosure but aren't eligible for a loan modification, according to Fannie Mae Vice President Jay Ryan.

"This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period and helps to stabilize neighborhoods and communities," Ryan said in a Nov. 5 statement.

The program also is intended to minimize "deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effects these have on families, communities and home price stabilization," according to a Fannie Mae document.

Deed for Lease may not help many homeowners

That's the upside. The downside is that the D4L program is riddled with so many rules and restrictions that relatively few people are likely to be able to take advantage of it. Indeed, Fannie Mae accepted only 1,996 deeds-in-lieu from homeowners in the first nine months of 2009.

What's more, critics have charged that these types of help-for-homeowners programs generally are more about favorable publicity than actual aid for borrowers.

Sean O'Toole, CEO of ForeclosureRadar.com in Discovery Bay, Calif., says such programs are "more about the headline than the reality."

Erik Weichelt, president of Weichert Elite, a real estate brokerage in San Diego, and a specialist in the sale of bank-owned foreclosed homes, says the new program may "sound nice" and "seem wonderful," but at the end of the day, homeowners may be "better served by getting on with that part of their life and starting over" in another home.

The bottom line on whether the D4L program is a boon or a bust may depend, as such matters often do, on the homeowner's personal experiences.

"For some folks who are living in a house that's nicer than they ever would have been able to afford, getting more time there is a gift. For some folks who don't want the disruption of moving, it's a gift. For others who are bitter at the fact that they bought the house or someone convinced them to get the loan, it's a day-to-day reminder of the mistake they made," O'Toole says.

How to qualify for Deed for Lease program

Such controversies aside, here's a summary of the rules:

The D4L program is open only to homeowners who have a conventional Fannie Mae loan.

The homeowner must be unable to afford the mortgage payments or qualify for a loan modification. Homeowners who want to walk away from their mortgage only because the value of their home has declined aren't eligible.

The loan cannot be guaranteed or insured by the Federal Housing Administration, U.S. Department of Housing and Urban Development, Veterans Administration or Rural Development agency of the U.S. Department of Agriculture.

The homeowner must have made at least three mortgage payments since the loan was originated or last modified and cannot be 12 or more payments past due on the loan.

The homeowner must sign a deed-in-lieu to give up ownership of the home, a general release of any claims related to the loan or home, and a lease agreement, which may have a term of up to 12 months.

The deed-in-lieu will be reported to the credit bureaus as such, which could result in slightly less damage than a foreclosure to the homeowner's credit.

The homeowner must be able to deliver title to the home free and clear of any second mortgage or other lien.

The home must be the principal residence of either the homeowner or a renter who agrees to the terms of the new lease. Second and vacation homes aren't eligible.

The homeowner must be able to pay market rent, and that rent cannot be more than 31 percent of the homeowner's income. Homeowners who have no source of income aren't eligible.

The rental applicant (i.e., homeowner or renter) must pay a nonrefundable $75 application fee, which will be applied to a credit report and background check on the occupant of the home.

The home must be inspected and the cost of needed repairs must be deemed acceptable based on the home's value.

The rental income must be high enough to pay Fannie Mae's anticipated maintenance and management costs.

The renter must agree to be responsible for regular maintenance and to keep the home in good condition.

Renters' insurance is required if the renter has a pet in residence.

Source: Bankrate.com

Foreclosure Avoidance Counseling

2009-11-20T06:48:00.000-08:00

Housing counseling agencies funded through the National Foreclosure Mitigation Counseling Program, administered by NeighborWorks America, can provide you with the information and assistance you need to avoid foreclosure through the Homeowner Affordability and Stability Plan (HASP).

HASP is part of President Obama’s broad, comprehensive strategy to get the economy and the Housing market back on track. The plan potentially could help up to 9 million families restructure or refinance their mortgages to avoid foreclosure.

Borrowers that are interested in exploring their options and eligibility under HASP can contact a counseling agency for free counseling without being referred by a servicer. If it is determined they may be eligible for the loan modification or refinance program, the counselor will work with the borrower to submit an intake package to the servicer.

This service is provided at a low cost or free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies will provide borrowers with the services they need to take advantage of HASP and avoid foreclosure. There is no need to pay a private company for these services.

To locate a NFMC-funded housing counseling agency near you, go to the "Select Your State" list or type your zip code in the text field below and click "Search".

If you are a NFMC funded counseling agency and your contact information needs updating please contact us at nfmcupdates@nw.org.

Find a Foreclosure Counseling Agency

Six Major Money-Wasters

2009-11-17T08:13:00.000-08:00

Everyone wastes money sometimes. Splurges add up, or you just don’t do the research necessary to get the best deal. You can limit the money you waste, however, by targeting six major money wasters. These things can bust your budget faster than you might believe.

1. Impulse Buying

A huge discount on that ab machine seems like a great deal when you see it in the store, but once you get home, and use it only a couple of times before it sits gathering dust, you realize that perhaps you could have used the money for something else. Money spent is still money spent, and impulse purchases can be one of the biggest budget-busters out there. Apryl Duncan writes about impulse buying on About.com:

“Research shows approximately 66 percent of all purchase decisions are made in the store. And 53 percent of those in-store purchases are made on impulse.”

One of the best things you can do is to make a list of what you need, and stick to the list. Institute a “waiting period” for wants. No, you may not get the great deal, but if it isn’t a need, you can save up for it—if you still want it when the waiting period expires.

2. Carrying a Credit Card Balance

Even though the minimum payments appear low, the truth is that you are paying a large portion of that toward interest. That’s why your balance never seems to go lower when you pay the minimum; only a very small portion goes toward the principal.

When you carry a credit card balance, you pay a high fee for the privilege of lining someone else’s pockets. Try to avoid putting more on your credit card than you can pay off each month, and if you already have a balance, try to get out of debt as quickly as possible.

3. Buying Brand Names

Brand name merchandise often costs much more than generic brands. This is especially true of clothing and prescriptions. If you can find a generic brand of similar quality, you can save big. If you can get generic prescriptions or generic versions of over-the-counter drugs, you will find that you can save a great deal of money in the long run.

4. Frequent Eating Out

During this recession, many people have changed their eating habits so that they eat more at home, rather than eating out. This is good news, since frequent eating out can be a big money waster.

Not only does food prepared at a restaurant cost more per person than cooking meals at home, but you also have to pay for a tip. You can reduce some of your costs by getting take-out. If you still like to eat out, try going to lunch on occasion, rather than spending more on dinner.

5. Banking/ATM Fees

You might be surprised at how quickly banking and ATM fees can add up. MainStreet.com’s Brian O’Connell points out that “banks earn 53 percent of all of their income from charges on late fees, overdraft fees, loan-origination fees and other surcharges …”

That means that you might be spending a great deal on fees from overdraft charges (which can be as high as $45 per transaction), ATM fees when you don’t go to one owned by your bank, and even monthly service fees. Find out what fees you are paying, and consider switching banks or credit unions if you can find lower fees elsewhere.

6. Wrong Insurance Coverage

Review your insurance policies. From life insurance to auto insurance to health insurance, you might be paying for coverage you don’t need (one example is maternity coverage for a woman who has had a hysterectomy). Or, you might even not have enough coverage. Both situations can lead to a great deal of wasted money.

Overpaying deprives you of money you could use elsewhere, and being underinsured can lead to financial devastation when you have to pick up more of the tab. Carefully shop around for the best rates, and perhaps get a professional evaluation to find the coverage that you need.

Source: Divine Caroline

Renters get relief from foreclosure

2009-11-12T07:54:00.000-08:00

A new federal law offers renters more protection from eviction if their landlord loses the property through foreclosure. The law has some fuzzy requirements, but should be a boon to renters who otherwise might have been evicted with little or no notice.
"The fundamental purpose of the Protecting Tenants at Foreclosure Act is to ensure that tenants facing eviction from a foreclosed property have adequate time to find alternative housing. To that end, the law establishes a minimum time period that the tenant can remain in a foreclosed property before eviction," a Federal Reserve memorandum states.

The national foreclosure crisis has not been kind to renters, despite their seeming bystander status. Indeed, the National Low Income Housing Coalition, or NLIHC, in Washington, D.C., has estimated that some 40 percent of households that have lost their home due to foreclosure have been renters.

The new law should provide some relief from immediate evictions, according to NLIHC President Sheila Crowley.

"This bill brings long overdue relief for the most blameless victims of the foreclosure crisis -- the families who, after paying their rent each month, are suddenly told they must move out of the homes because their landlords have been foreclosed on," Crowley said in a statement.

Renters will get 90 days' notice

The new law allows tenants who have a lease to remain in their home until the end of the lease period, unless a new owner purchases the home at a foreclosure sale and intends to occupy it as a personal residence. In that case, the renter can be evicted with 90 days' notice even if a longer-term lease is in force.

A rare but potentially important exception occurs if the renter signed the lease before the owner obtained the foreclosed loan. In that case, the lease will still "survive" the foreclosure, according to Janet Portman, an attorney and author of "Every Tenant's Legal Guide," published by Nolo Press in Berkeley, Calif.

Tenants who don't have a lease also are entitled to 90 days' notice prior to eviction under the new law.

Technically, the law applies only to "any foreclosure on a federally related mortgage loan." That requirement shouldn't be a burden for tenants because, as Portman explains, the definition of "federally related" encompasses virtually all loans.

The law became effective May 20 and is scheduled to sunset Dec. 31, 2012.

Only 'bona fide' renters are protected

The law protects only a bona fide lease or tenancy, which is defined as a situation that meets three criteria:

The renter may not be the former owner of the home or the former owner's spouse, child or parent.

The terms of the rental must be at arm's length between the landlord and renter.

The rent cannot be substantially less than the fair-market rent, unless the rent is subject to a government reduction or subsidy.

The arm's-length and fair-market rent requirements "are designed to prevent a sweetheart deal" between a defaulting landlord-owner and a renter whom the landlord wanted to protect from eviction after the foreclosure, Portman says. For example, if a landlord and renter signed a two-year lease at a very favorable rent just prior to a foreclosure, that likely wouldn't meet the bona fide requirement.

Broken lease can lead to lawsuit

Renters who have a lease and are evicted may be able to bring a breach-of-contract lawsuit against the former landlord to recoup the costs of their forced move, according to Portman.

"You go to court and say, 'We had a deal, and he didn't deliver,'" Portman says. "The guy may be long gone. But if you get a judgment, that's good for many years and you could probably eventually collect on it."

New law doesn't affect rents, deposits

The new law doesn't pre-empt any state or local laws. Instead, it specifies that it won't affect "the requirements ... of any state or local law that provides longer time periods or other additional protections for tenants."

State laws apply to most landlord-tenant issues that are beyond the scope of federal law. Examples include prepayment of last month's rent and reimbursement of a security deposit. Neither of those issues is mentioned in the new law.

"Many states, including California, protect the tenant at any cost. They say basically that it is up to the buyer and seller, or in this case, the bank and the (former) owner, to figure out how to (handle those sums)," Portman says.

The bottom line is that landlords and renters have new rights and responsibilities in foreclosure situations. While renters may face challenges in their attempts to exercise those rights, knowledge and action can prevail.

Source: Bankrate.com

Homeowners seek help on foreclosures

2009-11-09T06:33:00.000-08:00

By KATHIE BASSETT
With more than 1,000 foreclosure cases filed so far this year in Madison County, people on the cusp of losing their homes are starting to seek help to avoid becoming part of the statistics.

Seven people sought such guidance at a Foreclosure Intervention Workshop hosted by Community Hope Center in Cottage Hills on Friday.

Lindy Tarrant, a counselor with the nonprofit agency Beyond Housing, urged participants to be proactive and not give up hope.

"Know the facts and know what to do," Tarrant said. "Don't try to dig out on your own when there are resources out there that can help you."

One of her most important pieces of advice was to talk to the lender's Loss Mitigation Department instead of a collections agency.

"One of the biggest mistakes people make is that they agree with the person in collections because they're afraid," Tarrant said. "They often try to scare you that something will happen eminently if you don't make a promise to pay, but this is not how foreclosure and eviction happens - even though they might try to make you believe it does."

Tarrant emphasized that it is the Loss Mitigation Department that can offer mortgage holders options, not the collections department.

In Illinois, the foreclosure process can take 12 to 15 months from the date of the first missed payment to completion.

Foreclosure is the legal process of forcing a judicial auction of a home to satisfy the debt owed, said Tarrant. Through Friday, 1,049 cases had been filed in Madison County.

"Just because you have received a notice of default and you don't have the money in full, it doesn't necessarily mean that you will lose your home," she said. "But you must be realistic about what you can pay. Do not commit to an unrealistic budget because you must stick to whatever agreement you make with your lender."

Tarrant outlined the following retention options:

Repayment plan - involves increased monthly payments until the loan becomes current.

Forbearance - a formal written agreement that reduces or suspends payments for a specific period of time, then you resume payments, plus extra to catch up.

Loan modification - a permanent change in loan terms negotiated with lender.

HOPE for Homeowners - President Obama's Making Home Affordable Program, a type of loan modification.

Refinancing - an option available to homeowners who make their payments on time and have not suffered a reduction in income.

For most clients, Tarrant advocates researching President Obama's plan to provide relief.

To determine if someone can qualify for the Making Home Affordable Program, Tarrant first recommends that clients take a close look at their budgets to determine if staying in their current home is a sustainable option.

The Making Home Affordable Program is a government subsidy given to lenders in exchange for lowering homeowners' monthly mortgage payments to affordable levels. The plan incentivizes lenders to reduce the homeowner's monthly mortgage payment on a first mortgage to 31 percent of the household's gross monthly income.

There are guidelines that a homeowner must meet to qualify for this plan, Tarrant said. To determine if you qualify and to learn more details about the plan, visit www.makinghomeaffordable.gov.

"This is a great program," Tarrant said. "And it seems like their counselors are finally getting how to help people in the last week."

One woman, who wished to remain anonymous, said learning about this option in the workshop has given her hope after missing one mortgage payment.

"I got laid off last Friday, and I just got divorced in the spring and I got left with a lot of bills," she said. "The knowledge of what I've learned today will help me from being blindsided."

Another woman, who also wished to remain anonymous, said, "I feel like I've been drowning, but Obama's plan gives me hope that I could reduce my payments, but the biggest thing is that I at least know there's people to help me now. This is the first time I've ever had to ask for help, and I don't know the system."

Tarrant hopes that participants will leave the seminar better informed about the law and know their rights before engaging in discussions with their mortgage lenders.

Source: Telegraph

Foreclosed Property

2009-11-03T06:51:00.001-08:00

Foreclosure does not just affect homeowners who have fallen behind on their mortgage payments as they become delinquent and then lose their property; foreclosure can also hurt others in the surrounding area who wish to present a well maintained, attractive home. If you find out that your next door neighbours, or others close by have recently faced foreclosure, what can you do to help maintain a foreclosed property?

Neighbourhood Watch Scheme

If you belong to a Neighbourhood Watch Scheme, you will want to pay particular attention to a vacant foreclosed property. Even a beautiful home with a well maintained garden can quickly become the target of arsonists, drug dealers or gang members looking for a convenient location to meet up with friends once they find out that there is a vacant property. But if you keep an eye on vacant properties that are foreclosed you can help to prevent vandalism and damage from destroying a foreclosed property.

Contact the Estate Agent's

If you are concerned about the nearby foreclosed property and the damage that its appearance is doing to your own home, contact a local estate agent's to see if they can tell you who has gained ownership of the property. Then contact the bank and let them know that you are not happy to see the foreclosed property falling into disrepair. Remember that customers will have more power than those who are not customers at the bank. Talk to someone who works in the foreclosure department and try to find out if a property management team has already been assigned to clean up the property. Once the bank owns the property, it should work to maintain a foreclosed property until it can be sold. According to the San Francisco Chronicle you should also contact the town's code enforcement division or public works department to file a complaint on the condition of the foreclosed property.

These are just some considerations to keep in mind if your next door neighbour's home has been foreclosed. A property that has been allowed to fall into disrepair will blight the appearance of your own home, which is why curb appeal is so important and extends further than your front porch. Keep a close eye on foreclosed properties through your Neighbourhood Watch Scheme and report all suspicious activity to the police. Then contact the estate agent's to find out which bank owns the property and then contact the bank directly to find out what they plan to do to maintain the property. If you do not get very far with the bank, contact your local code enforcement division or public works department.

Source: Media Channel

How to Stop Foreclosure

2009-10-30T07:26:00.000-07:00

The first step to stop foreclosures is learn more about its meaning. Foreclosure is a legal process that allows a lender to repossess your home. Usually, this occurs because you do not make payments on your mortgage loan, causing the lender to repossess the property in order to recoup the money lost. Foreclosure can deprive you of your home, cause you a great deal of stress, and can negatively affect your credit rating. If your home has no equity and your mortgage amount is more than your house is worth, your lender can seek a deficiency judgment. This means that in addition to losing your home, you could owe a great deal of money to your lender. For all these reasons, you want to avoid foreclosure wherever possible.
Continue Reading at: Foreclosure-Support

'Cash for Appliances' program starts this spring

2009-10-29T08:03:00.000-07:00

This year, you got paid for tossing out the clunker car. Next year, you'll be rewarded for getting rid of the energy-inefficient washer or fridge. Many states will be sponsoring a "Cash for Appliances" program, similar to "Cash for Clunkers" in that you'll be paid for doing a big spring cleaning of your old appliances and buying those labeled with the Energy Star seal.

This is part of the federal government's economic stimulus plan -- it set aside $300 million in rebates for buying energy-efficient products, and state governments had to send detailed plans to Washington by earlier this month to explain how they would give that money away. So unlike Cash for Clunkers, each state is in charge of its own Cash for Appliances program.

California, for example, will focus on rebates for just three standard appliances. It will give $100 for the purchase of an Energy Star-approved clothes washer, $75 for a refrigerator and $50 for a room air-conditioner. Those rebates are in addition to any additional rebates offered by the state utility company supplying your electricity and the appliance manufacturer you buy from. The program is supposed to start in early spring.

New York is doing the program in February, offering $75 for refrigerators and washers, $50 for freezers. Florida announced April 16 to 25 as the time for residents to get rebates, offered in the form of 20% off the pre-tax sales price, up to $1,500, on new energy-efficient appliances.

One downside: Unlike cars, there's no lot you can wheel your clunker appliance too. New York is one state that's giving an incentive for recycling appliances by adding extra to your rebate amount if you show proof you recycled the freezer of fridge. But residents have the extra burden of finding out what they need to do with their old appliance before they can cash in on the new one.

To get the date and details of your state's own program, contact your state's energy department.

And act fast. That $300 million the Feds set aside goes pretty fast when divided among 56 states and territories. California only gets $35.2 million for its massive population, so it definitely pays to be first in line at the appliance store.

Source: Wallet Pop

The Pitfalls of Buying in Bulk

2009-10-28T07:39:00.000-07:00

This is a guest post from Sierra Black, a long-time GRS reader and the author of ChildWild, a blog where she writes about frugality, sustainable living, and getting her kids to eat kale. Previously at Get Rich Slowly, Black told us about sweating the big stuff.

Buying in bulk is great, right? You get the things you want and need, and pay less for them. As an added bonus, you don’t have to shop as often (at least, this is a bonus for me, since I hate shopping).

Because I hate shopping and love discounts, I buy most everything in bulk: toilet paper, frozen foods, light bulbs, even toys. But bulk buying has its risks too, and after years of practicing it, I’m learning to see them.

For me, the three key dangers in bulk buying are:

Making a bad investment in a good product that you need or love. I love a particular brand of gel pen, and I use them daily. They cost about $1 per pen in packs of ten, and about $0.50 per pen in packs of 100. I was at the store the other day, trying to decide how many pens to buy. The decision was made for me by the fact that I am on a cash diet at the moment and had only ten dollars in my purse. Yes, I’m paying more per pen. But the 100-pack of pens is an investment. It ties my dollars up in pens, and prevents me from earning interest on them in a savings account.

Here’s a Wall Street Journal article that makes this point about Forever Stamps (which are also a bad investment, but a fine purchase if you use a lot of stamps).

Buying something you might use but don’t need in bulk. My kids love Puffins cereal, so when I got the chance to buy an entire case of it on sale, I did so. This was in January. We just finished the last box of Puffins. Let me tell you, there have been some scenes around the breakfast table in the past six months.

It turns out no one likes Puffins that much. Buying the cereal in bulk might have saved me a few dollars, but it made my kids unhappy about breakfast. That did not improve our quality of life, which is what frugal living is all about for me.

This bulk-buying hazard is the one I fall for most, because I do “save money” doing it. But it creates a sunk cost. I now have 12 boxes of cereal in my cupboard, and I have to eat them or throw away the money I spent. If I’d “saved money” by buying one box and banking the rest of my dollars, I’d have more money available to buy food the kids and I really want to eat, instead of stoically plowing through another box of Puffins.

Buying things you don’t need or want, simply because they are cheap. The other day, I was biking past Harvard when I noticed a book sale going on in the Yard. I happened to have $20 in my pocket, and was strongly tempted to stop and buy $20 worth of books from their table.

Instead, I decided to take my $20 to a bookstore and buy one book from my 30-day list. I got a book I’d been waiting to buy and knew I would read and continue to use for reference, rather than going for the cheaper books I could buy in bulk. I got fewer books, but more value (and less clutter).

Costco, Target and the other big box stores know that people will buy things just because they’re cheap. When you walk into Target the first thing you see is a large section of items for $1. I used to have a habit of tossing $5 - $10 worth of stuff into my cart: novelty socks, pens, candles, stickers.

When I had a buying mindset, all of these things seemed like great deals. I was getting more stuff for less money. Now I try to avoid getting more Stuff, even when it’s cheap. I buy less in bulk — just like I buy less in boutiques — and I’m watching my savings grow because of it.

Source: Get Rich Slowly

Beware: 5 credit card pitfalls to avoid

2009-10-27T08:04:00.000-07:00

Just when you thought new legislation meant plastic was safe. Credit card companies are finding loopholes in the new Credit Card Act of May 2009. Their motive: Making up for lost revenue and side-steeping the reform.

The first part of the law rolled into effect in August, and required banks to give customers more notice before making major changes, like rate hikes, to their accounts. In February 2010, phase two comes into play with issuers being imposed limits on raising rates on existing card balances. Finally, the third phase will take effect in August 2010, when some penalty fees are capped.

Sounds good, right? Not so fast. Analysts caution every law -- even a good one -- is vulnerable. And fueled by the "where there's a will, there's a way" mentality, credit card companies are determined to take as much of your cash as possible.

Here's a few things to avoid.

Fishy Fees

Because the new laws can only tackle existing fees, credit card issuers are scrambling to dream up new fees they can tack onto your account. Annual fees seems to be an easy target.

Earlier this month, some Bank of America customers received a surprise, and not the good kind. BofA notified them that their once "no-fee" cards were converting to ones with annual fees. BofA spokesperson Betty Reiss said this is part of a "test" that affects 0.5% of all consumer accounts. The fees, ranging from $29 to $99, will be assessed to accounts based on risk and profitability.

More monthly moolah

One way to improve cash flow is demanding more money every month. And by raising monthly payments, issuers not only generate more cash, they increase the odds a customer won't be able to make their monthly payment and will fall delinquent. Resulting in even more fees and interest-earning penalties.

Chase is applying this theory to some of its accounts, raising the minimum rate some customers need to pay from 2% to 5% of the balance. On a $5000 balance, that's a $150-a-month hike.

Reduced rewards

It no longer pays to be good. Those in-flight upgrades and "free" hotel stays once earned as incentives are fading out of sight. American Express recently scaled back its Blue Card cash-back program, offering customers $1.25% instead of 1.5%. the catch: You've got to pay your bill on time. Otherwise, you won't accrue points without paying a $29 reinstatement fee.

Although it's not officially a "pitfall," WalletPop's Martha White discovered an interesting nugget while researching upcoming articles on the best and worst credit cards. White found that the Discover Motiva card puts a new spin on rewards. It offers customers paying their bill on time for six consecutive months an interest free seventh month as a reward. Not really cash in hand. But at least it's less cash going out.

Lower Limits

Don't be surprised if you've got less credit than you did a month or two ago. According to the Center for Responsible Lending, some credit card carrying consumers have seen their limits lowered by as much as 75%. Again, for no apparent reason. Bad news for holiday shoppers hoping to swipe their credit cards at the cash registers on Black Friday.

Rising Rates

The new law protects the rates on current balances, but says nothing about those for future purchases. And analysts caution those rates can soar. Lucy Elliot knows firsthand just how high those rates can climb. "The rate on my Visa jumped from 12.99% to 17.99% and I've never missed a payment." When she called to inquire about the hike, Elliot was told she owed too much "across the board" and thus her rate was being "adjusted". "It was re-adjusted 4 months later to 19.99%. It's criminal what they're getting away with."

The bottom line

Do your homework. Monika Ecsedy Nagy, CEO of FinancialFutureCoach.com says consumers should read their statements and disclosures every month. "Even all that fine print." Good advice since that's often where the language for these pitfalls is buried.

Nagy also suggests comparison shopping. "There are still some instances in which consumers can get a good, fair deal." True enough. But she says "you're going to have dig deep to find them."

Gina Roberts-Grey is a freelance writer specializing in consumer issues.

Source: WalletPop

Six Questions to Ask Your Self Before Buying Something New

2009-10-23T13:14:00.000-07:00

If you want to get ahead financially, you have to spend less. One great way to do this is to avoid purchases that aren't really wanted or needed. To do this, it is helpful to ask yourself six different questions before you actually purchase something. This will help you determine if you really want or really need the item, or if there is a way to get the item for free or for a lower cost. You can also find out if the item is worth the expense.

Before you decide to make a new purchase, ask yourself the following six questions. You may just wind up savings some money.

1. Can I get it somewhere else for free?

We are so conditioned to just pop into a store or go online whenever we need or want anything. But often, there are other resources that will get us the same item for free. Can you borrow the item, if it is for a short term use? Can you get it free from Freecycle or other such organizations? Can you barter for it? Do you have a friend or relative who might be willing to give it away?

2. Can I make it for less than it costs to buy it?

Although it pays to be handy, sometimes just a little creativity is all that you need. I think of my friend Elaine, who over the years has converted different finds into exactly what she needs and wants around her home. Can you use the parts from something that you already have? Can you create your want from scratch?

3. Will I use it on a regular basis?

I try to calculate the cost of ownership for a new purchase. A good example is below. let us say that you have $500 to spend.You decide to spend it on a new bed and anticipate using it daily for at least 10 years. The cost of the bed calculates down to $50 a year, or about 14 cents per use. In contrast, you decide to spend that $500 on a snow blower that you expect to last for about seven years before being replaced. You may use it three times per year. The cost of that snow blower comes to about $71.43 per year or $23.81 per use. Of course, there are other factors, such rental cost, maintenance, etc., but I think you can see the point.

4. Do I already have something that will work instead?

This is a good question to ask because sometimes with a little creativity, you can adapt something you already have in place of what you need. Here is just one small example. My kids spotted those TV pillows at the local mall. These are pillows that you can use when laying on the floor watching television or playing a game. Instead of buying two of these pillows, I simply took a couple of leftover baby boppy pillows, freshened them up and gave them to the kids. They love these pillows because they can also use them as neck pillows, as well as laying across them or sitting in them.

5. Can I do without it?

Really honestly ask yourself if you can do without the item. That doesn't mean that you can't ever get anything that you might think you need, but chances are if you have gotten along without it before you can do without it again. I asked this very question myself yesterday when I was tempted to purchase a new movie for myself. We already have plenty of movies, and I'm probably better off doing something other than watching movies, anyway.

6. Is it a need or a want?

Being honest with yourself about whether something is a need or a want can put things into perspective. That is not to say that you can't have any wants, of course, but understanding that something is not a need can help you make the right choice for that situation. In general, shelter and food are needs. There may be other needs such as transportation, but for the most part, things we usually consider needs are really wants.

Source: Frugal Families

Frugal Families

U.S. foreclosure filings rose in third quarter

2009-10-16T06:11:00.000-07:00

By Robert Daniel, MarketWatch

TEL AVIV (MarketWatch) -- U.S. properties subject to foreclosure filings totaled nearly 938,000 in the third quarter, up 23% from the year-earlier quarter and up 5% from the second quarter, RealtyTrac reported on Thursday.

The figures reflect properties subject to default notices, scheduled auctions and bank repossessions in the quarter.

The figures indicate that 1 in every 136 U.S. housing units received a foreclosure filing during the quarter. That's the highest quarterly rate since the Irvine, Calif., real-estate-consulting company began issuing its reports in first-quarter 2005.

Bank repossessions, known as real estate owned, increased in the third quarter from the second quarter in all but two states and Washington, D.C., RealtyTrac Chief Executive James J. Saccacio said in a statement.

That indicates that "lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts, and high volumes of distressed properties," he said.

In September, foreclosure filings were reported on 344,000 properties, up 29% from a year earlier and down 4% from August 2009, RealtyTrac reported.

The September figure was the third-highest monthly total since RealtyTrac began its reports, lagging only July and August of 2009.

Nevada continued as the state with the highest foreclosure rate, with 1 in 23 housing units subject to a foreclosure filing in the third quarter, nearly six times the national average.

Almost 48,000 Nevada properties were the subject of foreclosure filings in the quarter. That's up 59% from the year-earlier quarter and 10% from the second quarter.

Arizona and California followed Nevada, each with a foreclosure rate of 1 in every 53 housing units.

In absolute numbers, California, Florida, Arizona, Nevada, Illinois and Michigan accounted for 62% of U.S. foreclosure activity in the third quarter, with a total of 580,000 properties subject to foreclosure filings.

California itself accounted for more than a quarter of the country's foreclosure filings in the quarter, with more than 250,000 properties. That's up 19% from the year-earlier quarter and off 1.5% from the second quarter of 2009.

Florida's foreclosure filings totaled 157,000 properties, up 23% from the year-earlier quarter and down less than 1% from second-quarter 2009.

And Arizona was third, with more than 50,000 properties subject to foreclosure filings. That's up 25% from the year-earlier quarter and up 5% from the second quarter of 2009.

Federal loan modification program to prevent foreclosures scores early goal

2009-10-12T06:25:00.000-07:00

October 8, 2009 in Foreclosure Assistance, Home Loans, Loan Modifications, Making Home Affordable, Stop Foreclosure by Foreclosure.comNo comments
“Making Home Affordable” was introduced earlier this year to reduce the alarming amount of foreclosures in the United States.

The $75 billion program provides mortgage lenders with financial incentives to reduce the amount that distressed homeowners owe on their principal home balances, which in turn reduces their monthly payments. It’s a plan that is designed to short circuit the foreclosure process before it begins.

Today, the Obama administration announced the program’s first milestone — banks have so far signed up more than 500,000 borrowers who need to re-work their mortgages. The good news comes three weeks earlier than expected because the deadline to hit a half-million was set for Nov. 1, 2009, according to the Washington Post.

Here’s a snip Shaun Donovan, secretary of the Department of Housing and Urban Development, on the progress:

“We’re very pleased to have reached this goal of half a million borrowers almost a full month ahead of target, but we obviously have a lot more to do.”

Donovan is making reference to the program’s ultimate goal of helping 4 million borrowers by the end of 2012. It’s a lofty and certainly noble goal.

However, the big concern is whether or not the loans that are modified will be sustainable, meaning the homeowners do not find themselves in distressed situations again down the road.

Only time will tell.

To learn more about Making Home Affordable and determine whether or not you can refinance your home mortgage click here. The official “Making Home Affordable” Web site can be found right here.

Source: Foreclosure.com

Facing Foreclsoure? Do This Now

2009-10-07T06:49:00.000-07:00

Homeowners should keep in mind that the bank or mortgage servicer they are dealing with is 100% able to stop the foreclosure whenever they want. Especially if the borrowers are in a judicial foreclosure state, where it is required the bank begin a lawsuit to take the home back, if the lender/individual drops the case, the foreclosure will stop immediately.

Before doing anything at all, though, homeowners need to decide if the home is worth keeping. Many people today are fighting to save houses they can not afford in the long run. If borrowers are fighting for such a home, they are ultimately going to lose anyway. It may be better to cut their losses and move on. This is the same for those homeowners who are fighting to save a home that is worth less than the mortgage. Just negotiate a short sale or deed in lieu and move on with life.

If you have decided to keep your home, then keep reading.

Since you are dealing with an individual, you need to to come to an agreement with him or her that will allow you to repay the arrears and get caught up on your payments. If you were with a traditional lender, a loan modification would be your best option to save the home. But there are no rules/laws forcing anyone to grant you a modification.

Your very first option should be to try and come up with the amount you are behind. In many cases, you can raise this money with odd jobs, personal loans from relatives, and by selling unused items. I would start by getting donations from relatives, church, and social groups and having a garage sale to sell as much stuff as possible. Don't worry about your personal belongings, as you can replace them once you are back on your feet again.

You should also be cutting your expenses to a minimum. Get rid of cable TV and stop shopping for anything. Wear old clothes if necessary and eat the food in your house, rather than going out to eat or buying new stuff at the grocery store. Just keep the necessities that are required to keep your family healthy and don't do anything that would cost you your job.

During this time, you need to be negotiating with the mortgage holder to stop the foreclosure. You will need to negotiate a repayment plan that is more favorable than him taking the home away. Another good idea is to find out the current value of the home. There is a very good chance that you are currently paying more than the home is worth. If they realize this, it may be an incentive to keep you in the home. You ideally want to arrange a repayment plan that allows you to make your normal mortgage payment, along with extra to pay off the arrears.

If you can not afford this right now, you need to have a plan that will allow you to make these payments in the very near future. My guess is that you have had issues making payments on time in the past and this is why they are unwilling to help you now. I only say this because most lenders do not want to take a home away. It a huge expense and a lot of work for the average lender. They must have a good reason for wanting to take the home back. Regardless of the reason, you need to convince them that you will make all your future payments on time. Showing them proof of this, such as a second job, would help them believe you.

If you fail to raise the money and the lender is unwilling to cooperate, then you need to take a more drastic step. This will involve getting an attorney and using the threat of legal action to force them into a repayment plan. This action could also be used to buy enough time to raise the money needed to pay the arrears.

To start, you will need to gather as much information about the case as possible, such as the original loan docs and the appraisal. Some people hang on to these records or you may have to contact the broker and appraiser who worked on the case originally. No one is required to turn these documents over to you, so you'll have to be nice and use a little social engineering to get what you want. You will be trying to prove that you are a victim of predatory lending, so don't expect your current lender to hand over any evidence.

A “forensic loan audit” might be a good thing to pay for at this time. They cost about $250 and will reveal any problems when you originally got your loan. Once you are armed with this information, you can go to the lender and use the threat of a lawsuit as a negotiating tactic. Showing proof that you are, in fact, a victim should be enough for them to want to keep the case out of court.

If the lender still refuses to negotiate with you, your last hope would be to take the case to court. I would highly recommend hiring an attorney for this, but it is possible to do it on your own. Once you get this far in the process, you'll need more info to continue, so either ask for more help or get an attorney who specializes in lender fraud.

Source and Keep Reading Here: Foreclosure Fish