Job hunters need a game plan if they're going to make it in this tough economy and find debt relief. (Photo: flickr.com)

Consumers need to find debt relief, but some people coming out of the hardest-hit industries may be the most desperate for it. Industries like auto, financial services, retail and mortgage were particularly damaged due to the recession. Although many job markets are showing nascent signs of stabilization, these markets may be lagging in development and employees may need to look elsewhere for job opportunities in the future. Many career coaches and human resource planners are encouraging people from these industries to venture out of their market and see what else the job landscape has to offer. Here are some tips on finding new employment.

Reorganize Job Skills

One way to find a new career is for workers to reassess their job skills. Every skill is beneficial and can be translated to a new industry. For example, if a person was an accountant at General Motors, they should look for accounting positions in other industries. Trudi Schutz, a career counselor, stated, “People often don’t want to leave their industries because they’re comfortable there, even when they’re miserable.” Her suggestion is for job-seekers to look for “careers that use those same skills they love, but in a new way.” She directed a former used-car salesman to move into the pharmaceutical industry, thus carrying his love and know-how of sales to a new market.

Develop New Skills

A general rule of thumb when job searching is that people who are “adaptable and willing to retrain themselves” are most beneficial to potential employers. Max Shapiro, CEO of PeopleConect.com, stated “Companies want people who can multi-task… the more senior someone is, the more likely it is that he or she will have to repackage the skills they already have.” Shapiro suggests everyone should rebuild their resume periodically throughout their career. Take an extra course, get a new certificate or find some other way of adding to the resume. It can prove to employers that they are able and willing to learn throughout the duration of their career.

Networking

If job-seekers need a job soon to help bring debt relief, one of the most popular ways of finding leads is to network. The old way of employment was to wait for recruiters to approach workers. This practice is long gone and job candidates need to be proactive in their placement. Shapiro suggested that all job-seekers make a list of their contacts that includes people they “can trust to brainstorm [the] wildest ideas.” Keep communications open with these people and ask them for referrals. Shapiro added, “Chances are someone will lead you to someone else who will lead you to someone else… I have a very high success rate when people just talk to every single person they know about opportunities.”

In addition, using online networking can be very helpful. LinkedIn, Facebook and Twitter are all online networking tools that help to put job-seekers in touch with potential hiring companies. It’s a great way to network with the industries that are desired.

Don’t Give Up, Job-Seekers

In the end, finding a job is a necessity. Bringing money into a household can help with debt relief, allow consumers to refuel money back into the economy and reinvigorate the market. Job-seekers need to be smart though and realize that they have a lot of competition due to the recession. Taking careful but proactive steps can lead to better and more satisfying job opportunities.

Auto and mortgage loans require some homework before you apply. There are numerous secured and unsecured loan options out there. (Photo: picasaweb.google.com)

A review of credit scores must be done by the consumers planning to apply for either a mortgage loan or an auto loan. The credit scores of an individual are among the primary factors that decide the eligibility for the loan. While a good credit score can get you the loan easily, a bad score can either mean loans with exorbitant interest rates or even denial. A person can apply for a free credit report annually from any of the three main credit agencies. The report thus obtained will show the credit worthiness of the individual.

Types of Loans

Once the credit rating is determined, the next step is to decide on the type of loan to opt for. When it comes to mortgage loans, the consumers can choose from either a fixed rate mortgage loan or adjustable rate mortgage loan. Secured loans and unsecured loans are the two options that consumers have when it comes to auto loans. There is also the aspect of indirect and direct financing that needs to be considered. With so many options available, a thorough groundwork is needed to find a loan that best suits your budget and needs.

Budget Carefully

Consumers who are buying a house for the first time should especially keep this point in mind while making their decision. The monthly payment for the mortgage loan or auto loan should not exceed 30 percent of total monthly income. This will help provide a cushion during unforeseen circumstances. While there are loans programs that cap the limit at 31 percent, there are many others that allow consumers to go beyond this point. Hence, considering this carefully before making a final choice is a must.

Set Realistic Expectations

Setting sky-high expectations for the car and home under consideration is another common mistake that is made by many buyers who are purchasing these items for the first time. Most of them end up choosing houses in an expensive neighborhood and are willing to pay through the nose to own it. Though these might seem well within reach initially, you will begin to realize the pinch in a few months. This is the reason most financial analysts recommend chalking out expectations from your house or car and then comparing it against the budget allotted for it. In addition to this, take the eligibility limit into account too. Considering these factors beforehand will also help avoid disappointments.

Compare the Details

Consumers applying for mortgage or auto loans should get quotes from more than one financial institution. Since these loans are the biggest loans one might ever borrow in the lifetime, comparing these quotes with each other allows them to weigh the pros and cons of each quote carefully before arriving at a decision.

Apply for Unsecured Loans HERE

Many people are looking for mortgages to aid them with credit repair. The recession has left finances disheveled, and people are trying to find ways to regroup. Although recent crackdowns on mortgage lending have been put into place by the government, there are still some unscrupulous lenders trying to find their way back into the mortgage market.

Dani Babb, founder of The Babb Group, which offers real estate consulting, said, “Since early this year … a new wave of people are finding ways to scam home buyers.” Here are some of the newest programs they are advertising that are less than advantageous to the potential homeowner.

Hard money lending loans

Hard money loans may seem like a good idea, but they are not designed to be used for large purchases like homes. These types of loans disregard a borrower’s credit score and employment status. These can even be offered to consumers who have already been turned down for government-backed mortgages.

Because the loan is considered more risky due to credit, lenders may require up to a 30 percent down payment. Some may circumvent the down payment if the applicant puts up some form of collateral, such as a car. Hard money loans come in several forms, but in general it is best to stick to smaller, short-term hard money loans.

Advances to First-time homebuyers tax credit

The first-time homebuyer’s tax credit offers up to $8,000 to qualifying buyers. Last month, HUD agreed to allow FHA-approved mortgage lenders to offer eligible borrowers an “advance based on the tax credit.” Borrowers are still required to make a 3.5 percent down payment, but they can include the tax credit value to it or use the money for closing costs. Repayment can be tricky, however.

Borrowers will have to pay the loan each month and pay an additional sum when they receive the tax credit or spread their payments out over a number of years. These payments will have interest attached. The reality is that if borrowers need to rely on the tax credit to make the down payment, they most likely will have problems affording their loan payments. It may be wise to work on credit repair to open doors to better loan options before using the tax credit for this purpose.

Zero-percent down financing

Some states are creating programs that give potential homeowners the 3.5 percent down payment they need to procure an FHA-backed loan as a second loan. Piggyback loans — where the home buyer has two loans — are also becoming more popular. In a lot of cases, lenders who cannot provide the entire loan amount suggest second mortgages from another loan company. These secondary companies can carry high interest rates, some close to 25 percent.

In other cases, buyers try to step in and “lend” the money to eager homeowners, persuading them to pay back the loan over time. Piggyback and zero-down loans create two mortgage payments every month. This can be a difficult situation for homeowners to manage and studies are showing it makes “walking away” from the home more probable if financial disaster occurs.

Homeowners

In the end, potential homeowners have to be smart and do their own research. The reality is that the best idea is to have a down payment, get a traditional loan and pay it off like millions of other people do. If that isn’t possible, consumers should consider putting off their home purchase, working on their credit repair and saving money. There are dishonest lenders waiting for opportunities to strike.

You can save money on groceries by switching from name brands to store brands. Image from Flikr.

Everyone has some variable expenses in their budgets, and if you are not careful, an unexpectedly large electricity or gas bill can really break your budget.

Payday loans can help in this situation, but the secret to staying on top of your budget is to reduce your variable expenses wherever possible.

Utilities

One area where it is possible to save money is your utility bills. If you struggle to pay gas, water and electricity bills when they are due, find out whether your utility company offers different payment methods. Most do,  and it is a good idea to take a look at these.

You might be able to have your gas and electricity payments averaged out to a monthly cost. Although this may mean having to make changes in other areas, it is worth doing. When your utility bill is averaged and split evenly, you don’t have to worry about hefty bills during the winter.

Mortgage

If you currently have a variable rate mortgage, you may want to consider refinancing. Refinancing does involve closing costs with your current lender, but most lenders now will add the closing costs to your new mortgage. If you have the money available, it is far better to pay the closing costs at the beginning  because then you will save on interest later on.

\Switching from a variable to a fixed rate mortgage may not seem like a good idea, but the fact is that a fixed rate actually saves you money in the long term. When you have a variable rate mortgage, it is great when interest rates go down and you can pay less, but then there are the times when the interest rate goes up and this could wreck your budget. You can save hundreds of dollars a year in the long term if you switch from a variable to a fixed mortgage rate.

Food bills

The current economic crisis has sent food bills through the roof. A loaf of bread now costs more than double what it was twelve months ago, and it is not only bread that has gone up in price, it is virtually everything. The first thing you should do is to switch from brand-name goods to store brands, as this can save you a lot. Most store brands are just as good as name brands, but they can be as much as 40 percent cheaper.

Some people are switching supermarkets to save money on their food bills, and  this is another good way to save money.

Entrance to Bank of New York Building on Wall Street

In the current economy it is more important than ever to keep watch over your savings, mortgage loans, personal loans, CDs, money market accounts and IRAs. It’s imperative to make sure your bank is doing its best to help build security with your investments. More than ever consumers have to be proactive about finding ways to protect their money. Here are some tips to look for when assessing your bank’s service.

Deposit safety

Make sure your bank is FDIC insured. If a bank is insured by the Federal Deposit Insurance Corp that means that your money is guaranteed up to $250,000 per customer. Even if your bank is currently in the midst of stress-testing, the FDIC insurance policy still stands. If you have any questions about whether or not your bank has the coverage, call 877-275-3342 to make sure.

The FDIC insurance applies to saving accounts, checking accounts, money-market accounts, CDs and IRAs. Although the elevated coverage to $250,000 was set to revert back to the previous $100,000 cap, Congress just passed a bill to extend the added coverage until 2013. In addition, credit union deposits are protected by the National Credit Union Share Insurance Fund.

Interest rates

Currently the average money-market interest rate is 0.4%. One way to optimize your interest rate is to do an online search for higher-paying rates. For example, Ally Bank in Utah is offering 2.20% for a 6-month CD or 2.8% for a 12-month commitment. Banking specialist Harry Gruber stated, “It’s takes some research to find better interest rates, but it’s not impossible. A search of the internet can lead you to a variety of out-of-state options where you can invest your savings and maximize your ROI.”

Lending

Another thing to look at when assessing your bank’s effectiveness is to look at their lending standards. Are you a candidate for personal loans if you need one? How easy would it be for you to get a mortgage loan? What about a new car loan? Find out what the lending requirements are for your current institution. Because of the economy, most banks are only lending to customers with a credit score of 730 and up. If you’re score is not in the 700s, now is a great time to start working on it. Get a copy of your free credit report from the three reporting agencies. For a clear picture, visit Smartmoney.com and use their calculators to see how a credit score can alter various payments, both monthly and overall.

Bank fees

Banks that are faltering need to raise cash any way they can and fees are a great tactic they use. Check with your bank to find out how expansive their ATM network is. Limited ATMs mean more fees for you to pay, both from your bank and the bank you use for your transaction. You could switch to a bank with better ATM saturation or join a credit union that has a surcharge-free ATM system. There are also some online banks, such as UFBDirect.com, that will reimburse you up to $4.50 a month for ATM fees.

It’s no longer a secret that banks generate an estimated $17.5 billion dollars annually from overdraft fees. One way to minimize this is to link your checking account to your savings account. If you checking account is too low for a charge, it automatically defaults to your savings account. There will be a transfer fee, but it normally is much lower than a $25 overdraft fee.

Credit card rates

Finally, check to see if your bank has raised your credit card interest rate, lowered your limits or canceled your cards. If any terms have changed on your credit card, call customer service and ask to have your previous agreement reinstated.

If your bank lowered limits on your credit cards that means you have to pay down your balance as soon as possible. You want to avoid damage to your credit score due to a higher debt ratio. Normally it’s acceptable to have 50% of your limit or less charged, without damaging your credit. Slashed limits can put you well below this limit, so be sure to check and alter your charges accordingly.

Your bank

In the end it’s up to consumers to protect their finances. Whatever bank has your savings, check up on its policies to make sure that it is still serving your needs, post-recession. Watch for FDIC insurance, interest rates, lending for mortgage loans and personal loans, the fees your bank charges and what credit card rates they have. These five topics can tell you whether or not you should stay with your current bank, or find a new one.

And if you need a Personal Loan, apply HERE

(Photo: flickr.com)

Whenever you purchase something on credit, whether it’s a product or service, we all find out about the magic of revolving credit. Whether it’s a mortgage, student loan, car payment or credit card payment, you’re paying two different things if you don’t pay off the credit in full immediately: principle and interest. Pay off the former and you’re done. If you’re only paying the latter, your adventure has just begun. It may leave you with a bit more cash til payday in the short run, but you’ll end up having to pay much more in interest charges over the long haul. The reverse – which is the more healthy financial decision – means that while you may find yourself in need of a cash til payday loan once in a while, you’ll be saving much more money over the years.

Go above and beyond

The best way to quickly reduce the principle balance of a loan or line of revolving credit is to make payments that go beyond the minimum monthly payment. This is contrary to what most Americans do, however. Making the minimum payment each month may free up short-term cash for consumers, but it ends up costing much more in the long term, thanks to compounding interest.

But won’t that leave you broke?

Not if you budget properly. As everything is expensive these days, it’s understandable that people aren’t looking to part with additional funds each month. This is typically the kind of thinking that goes into making minimum payments each month on loans and credit. Yet the best way to protect your finances long-term is to pay more than the minimum each month. That way, both interest and principle are paid down more quickly.

Get a jump on your financial future

If getting a jump on those interest and principle balance payments is your goal, some planning is in order. The best way to do this is to look at your budget. Once you’ve taken care of the monthly essentials, see how much you can afford to pay above and beyond the monthly minimum. If you’re used to paying a minimum of, say, $900 per month on your mortgage, try $1,000. With credit cards, try to pay at least double the minimum if you can, as these cards typically bear high interest rates. The more you can pay now, the less you’ll be paying for months and years. Sure, use a cash til payday loan if you need in an emergency… the end result will be all the sweeter. I’ll even give you a magic button you can use to apply for one, in case you’re in that spot right now

Like anything else, making radical changes – in this case to your budget – requires a significant adjustment period. Be patient and understand that unexpected expenses do happen. Be flexible; you will have to adjust on the fly. Once you get the hang of it, however, you’ll be well on your way to paying off your major purchases. Paying off a 30-year mortgage or a 48-month car loan before their time ends up costing you much less in the long run. Who wouldn’t want to do that?

Related Video:

Not all meth houses come with warning signs.

A couple of current trends are combining forces to create a new trend. Home foreclosure and “shake and bake meth” are coming together to create a growing group of families who face severe health problems and financial catastrophe.

If you’re looking for how to make shake and bake meth, you are on the wrong web site. I’m not in the business of instructing people on how to make drugs. However, if you want to hear stories about why you should have a house tested for shake and bake meth residue before you sign your mortgage papers, please continue.

The Holts’ $30,000 problem

The New York Times tells the story of a family whose financial emergency could not be solved with a same day payday loan. Here’s the story of the Holts:

The spacious home where the newly wed Rhonda and Jason Holt began their family in 2005 was plagued by mysterious illnesses. The Holts’ three babies were ghostlike and listless, with breathing problems that called for respirators and repeated trips to the emergency room. …

More than five years after they moved in, that the couple discovered the root of their troubles: their house … was contaminated with high levels of methamphetamine left by the previous occupant. …

The Holts’ next realization was almost as devastating: it was up to them to spend the $30,000 or more that cleanup would require.

Connection to shake and bake method

It’s true that homes have been contaminated with methamphetamine residue since long before shake and bake meth became a national trend. However, the New York Times reports:

Federal statistics show that the number of clandestine meth labs discovered in the United States rose by 14 percent last year, to 6,783, and has continued to increase, in part because of a crackdown on meth manufacturers in Mexico and in part because of the spread of a new, easier meth-making method known as “shake and bake.”

Get your home tested

Some people wouldn’t even think to have a home tested for meth residue before moving in. However, regardless of the neighborhood, it is definitely worth it to have a house tested for before you agree to buy it.

Just in case you are not convinced, here’s a NYT story about another family:

Meth contamination can bring financial ruin to families like that of Francisca Rodriguez. The family dog began having seizures nine days after the Rodriguezes moved into their home in Grapevine, Tex., near Dallas, and their 6-year-old son developed a breathing problem similar to asthma, said Ms. Rodriguez, 35, a stay-at-home mother of three.

After learning from neighbors that the three-bedroom ranch-style home had been a known “drug house,” the family had it tested. The air ducts had meth levels more than 100 times higher than the most commonly cited limit beyond which cleanup is typically required.

The former owner had marked “no” on a disclosure form asking whether the house had ever been a meth lab, Ms. Rodriguez said. But because he is now in prison for meth possession, among other things, the Rodriguezes decided there was nothing to gain by suing him. They moved out, throwing away most of their possessions because they could not be cleaned, and are letting the house go into foreclosure.

“It makes you crazy,” Ms. Rodriguez said. “Our credit is ruined, we won’t be able to buy another house, somebody exposed my kids to meth, and my dog died.”

Legal-aid advocates are noting that elder Americans are being left out of the mortgage loan modification program due to their low-income status. An unprecedented number of elder citizens are facing foreclosure because they were sold loans they could never afford. Many times, they were sold these loans fraudulently and with intentional misinformation.

A few years ago, homeowner Carol Couts, a retired 66-year old woman, was cajoled into taking out a mortgage with payments well over her income. Her story began in 2005 when her husband passed away. She decided to take out a reverse-mortgage, in which she sold her home to the bank, and then received monthly living-expense payments. The deal worked well for her, on her $913-a-month social security income. Unfortunately, it was a shifty mortgage broker named Daniel Lewis who told her that banks were “cancelling reverse mortgages because they were unprofitable.” He claimed that her only option was to refinance or lose the home. This was not true but the fear of losing her home made the decision seem like a good one.

The red-flags soon started flashing when Couts reviewed documents she’d already signed. She noted her income was entered as $5,075 monthly. She also noted that all other information that pointed out her income and assets were left blank. Contacting Lewis proved no help, since he told her that there was nothing he could now change. Now, four years later, Couts has no way of making her payments and faces losing her home of 25 years.

Unscrupulous lending

Many elderly homeowners are finding themselves in Couts’ position. Most lived for decades, mortgage free, in their homes and had a good amount of equity invested in the properties. The critical dividing factor was that they had low-incomes, a large sector living on social security payments alone. These borrowers rarely qualify for mortgage loan modification programs because there is no feasible way to get payments low enough for them to afford, said Tara Twomey, an attorney with the National Consumer Law Center.

The only solution to this problem is to allow elder Americans to keep their homes, while lenders agree to abolish the fraudulent loans, or minimize the principal. Unfortunately most lenders are unwilling to do this, seeing the loss as too great in the midst of a recession. The push in legislation for this law has stopped due to its controversial nature.

What is being done?

Unfortunately due to the recession and other “priority” mortgage packages, elder Americans are finding themselves in difficult situations. When fraud played a part in getting the loan, there is still a very gray area for help. In fact, most defrauded homeowners get no help because many don’t even know they were defrauded. Law enforcement steps in to investigate when lenders are victims of fraud, not borrowers. There are a growing number of legal-aid offices that are taking fraud cases for borrowers, but the cases can be drawn out to well after homeowners pass away.

Hope for the future

Legislators are working hard to clean up the mortgage mess. They are trying to revamp the mortgage loan modifications program to aid as many homeowners as possible. Though the elder American is in a difficult position, there are a growing number of agencies becoming aware of the issue and stepping in to aid.

Banks are bracing for their next big hit—defaulting credit cards. The mortgage world has taken its toll on the banks. Bank of America CEO Ken Lewis already warned Congress that despite the billion-dollar bailout, banks will have an “awful year” because of the credit card industry.

Of almost $76 billion in credit card loans, almost $46 billion came from Bank of America, Citigroup and JPMorgan Chase. These large banks have all taken to using questionable tactics to futher mitigate their risk. Some credit cards companies have raised interest rates without notice. Some companies have increased their fees. The companies are using whatever they can to bring in revenue, in hopes of minimizing their loss.

Credit card charge-offs

At the end of last year, bank industry charge-offs, which are loans a bank has rendered uncollectable, reached a historic high of 7.73%. As the unemployment rate increases, analysts project this number to continue to increase along with it. “More people out of jobs, mean more people are going to default on their loans,” states industry analyst Crane Barker. “History has shown us that the charge-off rate typically climbs to 1 point above the unemployment rate…and most people expect the unemployment rate to keep rising throughout 2009.”

History and unemployment

In the 1980s there also was a recession and the jobless rate reached 10.8%. Some people are claiming that the bank got through that recession and banks will get through this one. Unfortunately, no one denies that there are other outside factors that make the jobless rate more detrimental to the economy in 2008, than it was in the 80s. First of all, in the 80s people were not as invested in credit cards or loans as they are now. That day’s lending totals were only a fraction of what they are today. In 1982 there was $70.5 billion in outstanding credit. Today that number is $1 trillion.

How banks will cope

David Robertson, publisher of the Nilson Report, stated that “banks’ credit operations have become much more adept at adjusting to tough economic times after years of practice, including the downturn that followed the dot-com bubble earlier this decade.” Credit card companies are using new and innovative methods of managing the loss. American Express made the decision to pay its cardholders $300 bonuses if they paid off their balance and closed their accounts. Citigroup is working on a joint venture for its credit card division, a division that serves retailers, that would open the door for the company to get out of the credit lending business altogether. Although these banks are shifting their missions with regards to credit, Stuart Gunn, director of Bridge Strategy Group, stated, “If [banks] want to be the retail bank of choice, it means they have to have CDs, debit cards, home equity loans and credit cards. Do you really want to exit one of the major lines of business?”

Banks recovery

Post recession, banks will have to change their ways of lending, but regardless of what happens retail credit cards are a big business. If used properly, credit cards bring in billions of dollars. And the reality is that business and individuals have become dependent on lenders for credit. With the right tools and tweaking, banks can return to the giants they were by still offering credit, but with safeguards built right in.

The short term loan is an option for people having problems meeting mortgage payments. With last years’ careless handout of adjustable rate mortgages, many people are finding themselves at a deficit when repayment dates come. How to find extra money is a hot topic and many people are wondering what their options are.

ARMs

Adjustable rate mortgages were common during the lending boom. Underwriters boasted low payments, without warning that adjustable rate pay schedules are just that. They can go down, which rarely happens, or go up, which they almost always do. Consumers who had “great deals” and low interest rates, now find themselves with ballooning payments to handle and the same paycheck to cover it.

The Central Bank intervenes

Last year the central bank put together a set of rules that sought to protect consumers from credit card companies who were charging consumers high interest rates or giving them insufficient time to pay back debts. They also set in motion regulations to hamper unethical mortgage practices such as lending without concrete proof of an applicant’s income. Many critics, however, state that their regulations came too late and enforcement is too slow in coming. The claim is that if the central bank worked sooner, the housing crash would not have occurred, or at minimum not occurred with such a tremendous impact on the economy.

Until 2010

The estimated time for true change is mid-2010. Until then consumers just have to wait out the recession and make ends meet creatively. Though the central bank is doing its best to police lenders now, critics believe it’s a little too little, too late. “Taxpayers for Common Sense”, a watchdog group, has been tracking tax breaks for years and maintains that the small-print of the bailout offers billions in tax breaks for certain industries, while tax-payers are being ignored.

What is being done

Cash advances and short term loans are estimated to be used by a wide variety of consumers throughout the next coming months. Lenders of these types of loans are working hard to meet clients’ needs and keep them happy with a simple application process. Cash advances were once thought of as extreme emergency loans, but now they are accepted as viable options when funding is needed immediately and quickly.

The government issued a huge bailout package meant to refuel the economy and bring the country out of a recession. While that is good news, it’s still to be seen how long it will take for a real effect to take place. Analysts estimate that mid-2010 will be the earliest consumers and businesses see any improvement. That’s not to say that everything will be righted; just implying that mid-2010 is when some positive changes will happen. Whether or not individuals will see this improvement has yet to be seen. No one knows how the bailout will ultimately play itself out in the future economy.

Help is available now

Despite the central bank revamping the mortgage and lending processes, the economy is still suffering. People need to find their own ways of making ends meet and the short term loan option is a definite advantage. Mid-2010 is still a long way away and finding help is imperative for people to maintain their life styles. The short term loan could be the individually-chosen stimulus package Americans need.

Sadly the economy is in a downward swing and more people have to rely on a cash advance loan to keep their homes out of foreclosure. As difficult as it is to think of resorting to borrowing money to cover the mortgage payments, it is far less expensive than the alternative, foreclosure.

Keep in mind that in addition to losing any equity in your home, you will also be faced with foreclosure costs, the expense of finding somewhere else to live, and the loss of your credit rating. For some people, it can be detrimental to their feeling of self-worth thus creating a sense of depression and worthlessness that makes it difficult to regain financial security.

Consider your options

With economics being as they are, many people are in a position at the present time where they lack the funds to meet their mortgage payments. Although it can be a stressful situation, it does not have to be hopeless. It is important to look at all of your options rather than to throw up your hands in despair. You want to sit down and discuss some options and hopefully avoid filing bankruptcy just to save your home.

There are other ways to maintain your financial security for the short term such as discussing the situation with your lender to see what kind of terms you can work out. The economy is not in the best of shape right now with several states reporting double digit unemployment figures so lenders are not likely to want to take your home into foreclosure and face a potential loss. A cash advance loan can help you keep the lender appeased until you can work out more permanent and suitable arrangements.

Making the right choice

Look over your financial situation and your potential for income stability before you make any kind of a decision. With so much unemployment facing the country, you do not want to take advantage of a short term cash advance loan unless you know you are going to be able to repay it.

These short term loans are usually not intended to extend beyond 14-120 days, so you have to keep that in mind when you are searching for a way to find relief from your current financial crisis. There are several things you want to do before making a decision:

• Evaluate your current financial situation
• Analyze your future earning potential
• Review your circumstances over the past to determine why the pattern for financial instability exists
• Develop a plan that will allow you to reconstruct your debt and maintain financial stability

There is no one solution that is going to work for everyone but the one thing that is essential for everyone is the analysis of the situation in order to determine the best way to approch the situation and prevent your home from going into foreclosure. The sooner you can make that determination the sooner you will be able to work out a solution that is more permanent than what a short term loan can offer.

Fannie Mae holds the most mortgages in the United States.

By now you know that Loan Modification and Refinancing are achieved through lowering the interest rate on a mortgage. The federal foreclosure prevention plan says bankers and other lenders can lower the interest rate on a  mortgage to 2 percent in order to get payments low enough.

How low is low enough?

The lender reduces the interest rate until payments are only 31 percent of the borrower’s income, after the government pitches in its share. However, that 2 percent interest rate won’t stick around forever.

Interest rate terms

The new interest rate negotiated with your borrower will stay locked in place for five years. After the five years is up, the interest rate will slowly start to climb back up to the original interest rate on your mortgage.

However,  if your interest rate is higher than the prevailing interest rate available at the time you modify your loan, the rate will only climb up to the prevailing rate. Right now that is in the neighborhood of 5 percent.

Slow and steady

The interest rate will not suddenly jump back up to a normal rate after five years. Instead, it will climb at a rate of 1 percent per year until it is up to the rate where it will stay until the mortgage is paid. For some people, that could be up to 40 years because the federal program allows for mortgage terms to be increased to that length.

Get caught up

In case you missed it, Loan Modification Part 1 and Part 2 talked about eligibility requirements for the federal foreclosure prevention plan. Part 3 goes into detail about providing proof of hardship. Part 4 discusses how the federal program works. Part 5 warns about mortgage aid scams.

Part 6 discusses who is not eligible for the program. Part 7 talks about renters whose landlords get foreclosure notices. Part 8 contains details about deadlines to apply for foreclosure prevention.

The final part of this series, Loan Modification Part 10, discusses debt counseling.

If medical expenses are making it tough for you to pay your mortgage, you could get help from the feds.

If you’ve read Part 1 and Part 2 of this series, you should already have a pretty good idea of whether you are eligible to take part in the federal Foreclosure Prevention Plan.

You also know that part of the process is including proof of hardship. This article in the Loan Modification series will discusses what that means.

The List

Federal officials have said only “at risk” homeowners can get government assistance. Applicants must prove one of these:

• serious hardship
• declines in income
• increase in expenses
• facing an interest rate hike
• high mortgage debt compared to income
• they owe more than their house is worth
• reasons for being close to default

Serious hardship

If you have had huge medical expenses or other emergencies that have hampered your ability to pay your mortgage, you can use these to appeal for government assistance.

Get all the documentation you can. Hospital bills, documentation of child support payments, proof of a car accident that left a vehicle totaled, other personal loans or financial statements from business owners are a few examples.

Income declines, expense increases

If you have taken a pay cut or been laid off, you could be eligible for help. Make sure you gather severance agreements, unemployment pay stubs and any other documents that prove your situation.

Likewise, if you’ve had serious increases in essential expenses, gather documents that show that. Perhaps you’ve had a child or your electricity bill has gone way up because of rate changes.

Current mortgage situation

Most importantly, you must have all of the documents that show your current mortgage agreement. If your house has declined in value and is now worth significantly less than the purchase price, get an appraiser to confirm and document that.

Odds and ends

If your mortgage is more than 31 percent of your income, you are a good candidate for the foreclosure prevention plan. If you have any other factors that are restricting your ability to pay your mortgage, plead  your case. You can write a letter or include any other documents that show you’re facing hardship.

To find out the details on how loan modification works, check out Part 4.

Loan Modification could help you avoid seeing this in your yard.

You might have recently read the news about the White House administration’s new Foreclosure Prevention Plan. The government has written new policies that make getting the terms of your mortgage changed easier than ever.

First, however, you must make sure you are eligible to take part in the program.

Loan Modification program

The federal Foreclosure Prevention Plan has two parts: Loan Modification and Refinancing. For this article, we will address only the Loan Modification part.

If you are struggling to make payments on your mortgage but haven’t actually missed any payments, check out Part 2 of this series, which will address the government’s Refinancing program.

Foreclosure danger

The Loan Modification portion of the program is geared specifically toward people who are facing danger of losing their homes. If you took out personal loans to pay for your home and you have missed three payments or more, you could be eligible.

Keep your house

If you have already been served a foreclosure notice, it might not be too late. You can still apply for the program. If you go through a qualified, legitimate loan modification company it will speed up the process. And if you pick the right company you won’t have to pay until your monthly mortgage payments have already been lowered.

Stay away from foreclosure

Don't get frustrated. Get help.

If you have missed three mortgage payments or more, I recommend taking advantage of this program immediately. Get professional help from a loan modification expert, and team up with that expert and your bank to get your payments lowered. Part 3 in this series explains how it works.

Visit this page and fill out the form to be put in touch with a loan modification expert.

Use government’s resources

If you are still questioning whether you are eligible for the federal Loan Modification program, you can go to the government web site makinghomeaffordable.gov. The site supplies questionnaires that will help you find out whether you are eligible.

Makinghomeaffordable.gov can help you keep your house.

In order to make its new foreclosure prevention plan easier to use, The Obama White House has launched makinghomeaffordable.gov. The web site answers questions about eligibility, helps people contact loan servicers and offers many other resources.

Help and advice

The web site offers free help for homeowners, but it also recommends that people go through a loan modification company or counselor.

Personal Money Store can set you up with a loan modification company if you need help modifying your personal loans.

Fannie and Freddie customers

If borrowers got their loans through Fannie Mae or Freddie Mac they could be eligible for the government’s refinance program. Makinghomeaffordable.gov has links to the companies’ web sites that allow borrowers to apply for refinancing right online.

People can shop, pay bills, get payday loans and make long-distance phone calls online. What’s next?

Program 101

The government’s foreclosure prevention plan has two parts. The first part is the loan modification program, which is for mortgage holders who are behind on their payments.

The refinance programs allows Fannie and Freddie customers to adjust their loans to make monthly payments more affordable. Applicants must show proof of hardship.

Loan modification basics

When borrowers get loan modification, the bank generally lowers the interest rate on the loan to lower monthly payments. In some cases banks can extend the term of a loan.

The government’s program requires that payments be less than a third of a person’s income. The feds use foreclosure prevention funds to pitch in on payments.

More features

Makinghomeaffordable.gov also has a calculator that will tell you what your mortgage payments would be with different adjustments. It contains news clips, testimonials and lots of helpful information. It also warns against scammers, telling customers not to pay anyone for loan modification help until after their payments have already been adjusted.

It even has an instructional video and links to audio President Barack Obama’s weekly addresses. There are online quizzes to find out if you are eligible for the programs.

Which way is your mortgage going?

• A mortgage is for when you want to buy a house and have no money.
• A reverse mortgage is when you have a house and want to raise money.

What does that mean?

A reverse mortgage is a loan available to seniors. It is used to release the home equity in the property as one lump sum or by multiple payments. In other words, if you have a property that you own or is mortgaged, you can use it to raise money. A reverse mortgage could be thought of as an alternative to taking cash advance loans.

When will I pay it off?

Your obligation to repay the loan is deferred until you die, the home is sold, or you move on, say, into a retirement home.

Here’s the difference

In a regular mortgage, the homeowner makes a monthly payment to the lender, and each payment increases your equity in your property. By the end of the term, often 30 years, the mortgage has been paid in full and the property belongs to you.

In reverse?

In a reverse mortgage, the home owner can choose to receive monthly payments or a bulk payment of the amount of equity that has accumulated from mortgage payments. The debt on the property will increase each month.

Why?

The reverse mortgage is becoming popular in America. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements or simply have a last ‘splurge’ – a Caribbean cruise?

For full information

You can receive free information about reverse mortgages in general by calling AARP toll free at (800) 209-8085.

Since your home is probably your largest single investment, it’s smart to know more about reverse mortgages, and decide if this is the way you want to go.

For you to be eligible…

You must

• Be a homeowner 62 years of age or older,
• Own your home outright, or
• Have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and
  you must live in the home.

You are further required to receive consumer information from an approved HECM counselor prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on (800) 569-4287 for the name and telephone number of a HUD-approved counseling agency and a list of FHA-approved lenders within your area.

For your home to be eligible…

Your home must be a single family home or a 1-4 unit home with one unit occupied by the borrower.

The difference between a reverse mortgage and a bank home equity loan

• With a home equity line of credit, you must have a sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments.
• The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

You don’t make payments, because the loan is not due as long as the house is your principal residence. Like all homeowners, you still are required to pay your real estate taxes, insurance and other conventional payments like utilities.

Shamrock seeds aplenty, here. If you missed the first, CHECK IT OUT.

I love the green. Not cash or payday loans, the color. The feeling. The Schulers share Master Gardener Valerie Cribbs’ view on the meaning of shamrock green:

The shamrock was first used by Saint Patrick as he explained the holy trinity to his followers, but the history of its somewhat magical attributes dates back further than St. Patrick. The druids considered the four-leafed clover good luck and the Celts considered the shamrock an effective charm against evil. It’s even rumored that Eve wore a shamrock in the Garden of Eden! Each leaf on the clover stands for something different; one stands for hope, one for faith, and one for love and the fourth for luck.

Sounds delightful and non-toxic. Of course, the druids weren’t eating them in mass quantities like Beldar…

Shamrocks are an asset… just not a toxic asset

Let’s talk about something that IS toxic to the economy. It’s the bleeding red books too many American banks have been carrying. Those toxic assets are deadly to our economic recovery. If you are unsure as to exactly what a toxic asset is, help is available in simple layman’s terms. Here’s an easy-to-follow description:

Let’s say that Bob had a loan with Mellon Bank. The Loan is for $200,000 for a house and Bob pays 6% interest. The house is collateral, meaning Mellon gets the house if Bob defaults. But this house was valued at $275,000, so what is the worry?

So now Mellon Bank has “mortgage paper”, which is an asset. They can sell the mortgage to anyone they wish. Bob will then be required to pay the purchaser, who will get the benefit of the 6% interest. It’s an investment which may (or may not) make more money in the future. A good idea if Mellon needs money immediately.

But ol’ Bob doesn’t have the money to pay this mortgage. At the same time, the house value has greatly reduced to $150,000. Bob still owes $199,000.

If Bob defaults on this, Mellon will only be able to recover a portion of their money back. The mortgage paper has now become illiquid (the house can’t pay the mortgage). Mellon is now unable to sell it. Why would somebody pay for an asset that guarantees you will lose money?

That mortgage has become a “toxic asset.”

Let’s celebrate this St. Patrick’s Day

May the feds not cop your shamrock seeds
May the wind scatter them to fertile soil
May the sun shine warm upon your finances,
And the rains wash toxic assets away,
And, until we meet at Personal Money Store again,
May the economy ne’er capsize your open boat

Related Videos:

This is going to be the party of the year, the biggest bash in memory. It’s not a celebration and it’s not a funeral. It’s called a Mortgage Interest Party. At this affair I am going to publicly demonstrate the way in which the bank does the interest calculations on a mortgage. The manager of the mortgage bank will be present and he will confirm that the bank, while not actually ripping me off in the calculation, is not my friend as I always thought.

Everyone is invited to come and watch me do mortgage interest calculations

Despite the hard time I am having financially, I am determined to go ahead with this demonstration. I am taking a Payday Loan to pay for this party.

My mortgage

We were newlyweds when we saw the cottage. Red clay tile roof, cottagy wooden windows, one bedroom and a living-room-kitchen arrangement that soon became all kitchen as we discovered the delights of cooking and eating. The price was about $4,000 and I never had a bean. I got on my knees in the mortgage bank and I was granted a mortgage of $3,800. I took a job as the night clerk at the local motel to raise the rest of the money. The cottage was ours, or rather, the bank’s.

Construction mortgage

Our first son was born a year later and I applied for an extension to add a room. It was granted and again I went back to the motel to raise the missing dollars. Our son had his own room. I owed the bank close to $5,000. A year later another son arrived and again I was knocking on the manager’s door at the mortgage bank to raise funds to add another room and again I returned to my job at the motel.

Major construction mortgage

1969 was the year we decided to add a proper living room and dining room and to remodel our kitchen. The bank hemmed and hawed for all of 2 minutes, told us what loyal and reliable customers we were and gave us a mortgage which was almost double that which we already had. All in all, I now owed the bank about $16,000. The 10 years of payments I had made, have made a small dent in the interest, but the account was now so confused with additions and deductions that I could no longer understand it. I think the bank had the same problem.

The house looks great and is very comfortable and we are enjoying it immensely. We applied for an extension to the mortgage to put down a pool.

A son leaves home

1979 and our eldest is off into the world to seek his fortune. I convert his room into my writing studio. The mortgage remains healthy but interest rates are up.

Another son leaves home.

The mortgage is static. I convert the new spare room into a painting studio. Interest rates up again.

We sell the house

Yes, it’s 1989 and we sold the house and bought this smashing apartment on the 45th floor of the new downtown tower block. Ocean view, airport view, tangled traffic views on all 4 sides. The mortgage is reduced. The interest rate on the mortgage balance goes up again.

2009. Mortgage blossoms.

The letter from the bank was a surprise to me. “You now owe $120,000. Please call in at the bank and talk to us about this.” How did this happen? And then it hit me – the interest rates and the interest calculations. There is no such thing as simple interest. Come to the party and see! Mr. Obama, since you are helping so many others with their mortgages, would you like to come see how you can help out homeowners like me?

You may already be safe from foreclosure!

President Obama’s plan to revamp the mortgage industry and save families – including the octuplet mom and her kids – from foreclosure is now in full gear, like a fast cash advance for the afflicted. As part of the package, mortgage lenders like Citigroup and JP Morgan Chase have gone into a temporary moratorium phase for new foreclosures. Mr. Obama’s housing plan, which launches March 4, will distribute a sum total of $75 billion.

But how can those in need take advantage? Thanks to The Street, there is a formula threatened homeowners can follow. If you need help, try some of the good ideas they have compiled for your benefit.

Obama’s plan will advance cash fast

The Homeowner Affordability and Stability Plan is the key to disadvantaged homeowners. Essentially, it will allow people to restructure their mortgages so that they can avoid foreclosure. If you owe more than 80 percent of your home’s value, more refinancing options to advance cash fast will be available.

Up until March 4, here’s what The Street suggests homeowners do to put them in the best possible position to benefit:

1. Continue to make your mortgage payments: “Homeowners that are current [on payments] but eligible for the new plan should continue to make their mortgage payments in a timely manner,” says Gail Cunningham of the National Foundation for Credit Counseling. “Doing otherwise could compromise their credit report and score.”
2. Know what’s on your credit report: If there are errors on your credit report – and this does happen – you want to report it and have the error removed. The easiest way to get a hold of your credit report is entirely free; download it from annualcreditreport.com. Making sure that all information is accurate will speed up the process through which your home loan is modified.
3. Consider the refinance option: For those of you who still owe more than 80 percent of your home’s value, you may be able to refinance if your original loan was guaranteed by either Freddie Mac or Fannie Mae. If you need more information on how low mortgage rates are in the area in which you live, Web sites like BankingMyWay.com can help.

President Obama envisions his plan keeping as many as nine million homes out of foreclosure. “The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly,” he said. “It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.” May this fast cash advance keep more families safe and warm.

Related articles

• What’s In This New Obama Foreclosure Plan? [Foreclosure] (consumerist.com)
• Wither Phoenix? (andrewsullivan.theatlantic.com)
• Foreclosure Freeze Continues (azmortgageguru.com)

Obama hopes to help homeowners avoid this fate.

A mixture of bad credit and personal loans has caused millions of Americans to face foreclosure on their homes. Now President Barack Obama has revealed his plan to help up to 9 million Americans keep their homes.

Obama will use money from the $700 billion Troubled Asset Relief Fund that the Bush administration approved last fall. He will dedicate $75 million to keeping Americans with mortgages from having to turn into their keys.

Keeping families off the streets

Many homeowners are facing the reality of having bad credit because their personal loans have gotten too expensive for them to handle. Many also now own property that is worth less than the amount they owe on their mortgage.

Obama’s new foreclosure prevention plan will help about 4 million Americans who are facing foreclosure. His plan is to offer incentives to banks so they will refinance loans to get monthly payments down to manageable levels.

Property values

The plan will also help 4 million to 5 million people who are paying mortgages that are now worth more than their property, if their loans are through Fannie Mae or Freddie Mac. Because of the steep depreciation in housing values, nearly 14 million people are currently paying mortgages that are worth more than their property.

Because the government now owns large stakes in Fannie Mae and Freddie Mac, Obama says mortgages through those companies will be easier to refinance. People who aren’t behind on their payments but are paying mortgages on low-value property can refinance their total mortgages.

Warming  up cold credit market

Obama’s hope is that the plan will get credit moving, and he says relief will come to homeowners in just a couple of weeks. He plans to have the new rules in place by March 4.

Because banks are so leery of lending, people now must have immaculate credit to secure a loan. Obama’s hope is that if banks have enough incentive to lend, even people with bad credit can get personal loans.