Wednesday, March 25th, 2009
1. A lower mortgage rate
It used to be all but impossible to refinance if your equity stake was less than 20% of your home’s current value. Now you may be eligible for a refi even if you owe as much as 105% of what the house is worth. To qualify, you must have a loan balance of no more than $417,000 (unless you live in a high-cost area).
2. An insurance safety net
Normally if you lose your job, you’ll have to foot the bill to keep your former employer’s health insurance coverage. Now the government will pay as much as 65% of the monthly premium for up to nine months for most people who have lost a job since Sept. 1, 2008 (the break phases out for couples who earn more than $250,000).
3. An incentive for new wheels
If you buy a new car, SUV, or motorcycle in 2009, you may be able to deduct the state and local sales and excise taxes you pay (couples with an adjusted gross income under $260,000 are eligible). State sales taxes average about 6%, so on a $30,000 car you could write off $1,800, plus any county or local sales taxes.
In some cases you will be affected and others you may not. However, it looks like you may have to spend money to make money. Since so many of us have been laid off, then it’s good to know about the health insurance option.
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Monday, March 23rd, 2009
One of the more common fears among homeowners facing foreclosure is that the bank will suddenly start garnishing their wages in order to pay back the loan. With how far behind some homeowners fall, this fear can result in the anticipation of their not having enough money to pay the bills, keep the lights on, or feed their children. Especially if the income situation has deteriorated quite a bit, there may just not be enough money to pay the mortgage at this point.
However, the good news is that banks can not garnish a homeowner’s wages during the foreclosure process. The very simple reason for this is that the real estate is collateral for the loan — no other assets or future income source is pledged. If a car loan goes into default, the car is repossessed first; same with a mortgage in default: the bank can only take back the collateral that is pledged on the loan and there is no recourse to any other asset or income source.
Thus, the bank will have to take the property all the way through the foreclosure and have the court order it to be sold at a county sheriff sale. This auction is the legal mechanism by which the bank is allowed to attempt to recover the amount it is owed on the loan. If the sheriff sale pays off the mortgage in full, there is nothing further to collect.
If the property does not sell for enough to pay the loan off completely, some states allow mortgage companies to sue for a deficiency judgment after the foreclosure. Again, not all states allow this under the foreclosure laws, but it would give banks the right to garnish wages after the foreclosure, if they decide to sue for the judgment. But again, this comes only after the sheriff sale, and there would be no wage garnishment during the foreclosure process itself.
Banks rarely, if ever, sue former clients for deficiency judgments, though, because they know foreclosure victims do not have a lot of extra cash to pay down another judgment after losing their homes. It would take the bank too much time and money to sue again, when they did not collect very much on their original foreclosure lawsuit.
Lenders, of course, do nothing to dissuade homeowners from having the fear of wage garnishment. In fact, being sued after foreclosure, and the threat of losing their job, income, or other assets is often used by customer service representatives of mortgage companies to compel homeowners to keep making payments, even if they can not afford to do so. But foreclosure victims do not have to fear that the bank will come after their income during the foreclosure, and will not have to worry about the possibility even after losing the home.
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Tuesday, March 10th, 2009
If you are falling behind on your mortgage payments, do not hide from your lender. Instead, reach out to them for assistance. Your mortgage company would rather work with you than commence foreclosure proceedings, which can be quite costly for them.
Negotiating a Loan Modification
Step1
Make sure to know the state of your finances before contacting your lender. Determine how much income you’re bringing in each month, how much you’re paying in bills and where you can cut costs. Ask a nonprofit counseling service to help you put together this financial analysis for free. The counselor will also help to negotiate with your lender. Consumer Credit Counseling is a good place to start.
Step2
Next, contact your lender and have an idea what you need. Tell them what your situation is and what you can offer to help your situation.
Step3
Come up with some kind of an answer to the lender’s question of how you propose to pay off the loan eventually. You’re better off submitting an initial proposal. At least you’ve opened the door in the negotiation
Step4
If you think that your financial strain won’t last long, ask the lender for forbearance, or postponement of payments, for a couple of months until your finances recover.
Step5
If you have an adjustable rate mortgage that reset and you cannot meet the higher monthly payments, request a loan modification from the lender. They will request a complete financial history from you, detailing your income and monthly expenses. Ideally, you should have some cushion in your income to justify a loan modification, if they switched your mortgage to a fixed-rate mortgage. Show them that you can comfortably pay a fixed rate mortgage through extra income from a second job, and you are more likely to get a modification.
- If you are strapped for cash, find a part-time job;
- Call your lender as soon as you discover you will experience some hardship in making your monthly payments.
- Once you have received a modification, make your payments on time to improve your credit.
- If your credit is shaky, do some rebuilding before you refinance your loan.
- If your loan is modified, your interest rate may be a little higher due to your shaky credit.
Posted in Generate income, Informational, Personal debt | 2 Comments »
Friday, November 7th, 2008
Jesse Jackson, Colin Powell, my mother and countless others around the world had the same sense of accomplishment, pride and overall acceptance at 10pm CST once it was official that Barrack Obama was named the 44th president of the United States.
Obamas victory was a victory for America. Not because of the majority vote but because of it’s significance. His winning the election signifies the country is moving well past the hate filled days of slavery, white pride and power. It instead lays the foundation for us to stick together and to know that we can and will prevail in the face of adversity.
My only regret of it all is that my grandfather didn’t make it 3 extra months in order to celebrate in the moment. I can imagine him now, tearing up and snotting with his tissue in hand while showing admiration for something he thought he’d never see in his lifetime.
America, we have a chance to do something special here. Barack preaches personal responsibility for all. Some think he’s their savior for their financial woes while forgetting that it was their bad spending and debt habits that got them there in the first place.
THAT’S RIGHT! It’s time for YOU and ME to become personally responsible for our actions. By doing so, first we must educate ourselves. We must know that prime mortgages are a precursor to failure. We must know that, “keeping up with the Jones” will have us as stressed as them.
So before looking for a handout with foreclosure help or jobless claim help, think about what got you there in the first place. It wasn’t Obama, IT WAS YOU!
Prime lending? You have to educate yourself instead of getting caught in the NOW moment.
Jobless? (again) You have to educate yourself instead of looking for someone to magically pick you out of a lineup in order to secure employment.
Of course there’s circumstances that go beyond this article where things aren’t so pronounced but then again, maybe they are. Maybe if we’d take personal responsibility those unpronounced things may not happen to us also.
Posted in Inspirational, education, goals, purchases | 1 Comment »
Tuesday, August 5th, 2008
Next time you see that ‘player of the year’ flawsin’ in that 2005
Chrysler 300 sittin’ on 23’s while he’s pulling it into a parking stall
of a rented apartment hand him this article.
USA Today article on Black Spending Habits:
These are tough economic times, especially for African-Americans, for
whom the unemployment rate is more than 10%. Alarmingly, rather than
belt-tightening, the response has been to spend more. In many poor
neighborhoods, one is likely to notice satellite dishes and expensive
new cars.
According to Target Market, a company that tracks black consumer
spending, blacks spends a significant amount of their income on
depreciable products.
In 2002, the year the economy nose-dived; we spent $22.9 billion
($22,900,000,000.00) on clothes, $3.2 billion ($3,000,000,000.00) on
electronics and $11.6 billion ($11,000,000,000.00) on furniture to put
into homes that, in many cases, were rented.
Among our favorite purchases are cars and liquor. Blacks make up only
12% of the U.S. population yet account for 30% of the country’s Scotch
consumption. Detroit , which is 80% black, is the world’s No. 1 market
for Cognac (Pass The Co———).
So impressed was Lincoln with the $46.7 billion ($46,000,000,000) that
blacks spent on cars that the automaker commissioned Sean ‘P Diddy’
Combs, the entertainment and fashion mogul, to design a limited-edition
Navigator complete with six plasma screens, three DVD players and a Sony
PlayStation2.
The only area where blacks seem to be cutting back on spending is books;
total purchases have gone from a high of $356 million in 2000 to $303
mill! ion in 2002. This short-sighted behavior, motivated by a desire
for instant gratification and social acceptance, comes at the expense of
our future.
The National Urban League’s ‘State of Black America 2004′ report found
that fewer than 50% of black families owned their homes compared with
more than 70% of whites.
According to published reports, the Ariel Mutual Funds/Charles Schwab
2003 Black Investor Survey found that when comparing households where
blacks and whites had roughly the same household incomes, whites saved
nearly 20% more each month for retirement, and 30% of African-Americans
earning $100,000 a year had less than $5,000 in retirement savings.
While 79% of whites invest in the stock market, only 61% of
African-Americans do. Certainly, higher rates of unemployment, income
disparity and credit discrimination are financial impediments to the
economic vitality of blacks, but so are our consumer tastes.
By finding the courage to change our spending habits, we might be
surprised at how far the $631! billion($631,000,000,000.00) we now earn
might take us.
We all send thousands of jokes through e-mail without a second thought,
but when it comes to sending messages regarding life-affirming choices,
people think twice about sharing. So please pass this on.
Knowledge is POWER! Reverse the trend.
Posted in Informational, Inspirational, purchases, relapses | 1 Comment »
