When will home loans be available?

Everyone wants to know when house prices will hit bottom.  The simple answer is that we’re not there yet and we may not even be close but this can be confusing to many when 30 year mortgage rates have been hovering around 4.5%.  

Rates may be low but the money is still not being lent by banks and all of this after those same banks got over a half-a-trillion dollars in TARP money for the express purpose of being lent to consumers.  So why does this happen?

First, people are scared.  We’re truly in an economy of fear, which is causing people to stay on the sideline instead of buying homes and spending money on retail items.  There is tremendous uncertainty so people hold on to what they have.

On the other side are banks.  Banks have had significant losses over the last two years due to foreclosures and other loan defaults.  In fact, there have been so many defaults that many banks have gone under completely.  Again out of fear, banks are severely restricting the loans that are approved even with government money.

So when will lending loosen up?  Most analysts believe that lending will loosen up sometime this year and it likely won’t be a result of government oversight as much as it is just the recession starting to correct itself. But even then, unemployment needs to at least slow for this process to start.

When the economy does improve (predictions for early 2010), there will be many incentives to get home-buyers off the fence and consumers back into stores.  For this you’ll need good credit so protect it now and you’ll thank yourself later.  If you’re struggling with debts, get them squared away by paying them off in full.  If you can’t pay them off, make sure payments stay on time and are more than the minimum payment.

If you’re unable to pay the debts at all, particularly on unsecured credit card debt, get the debts consolidated.  For more information, call a debt relief specialist at (888) 233-3213 or fill out the short form below:

1. Your Name(required)
2. Email(valid email required)
3. Telephone(required)
4. State
5. Debt or Mortgage Amount(required)

 

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Businesswomen face the recession > move forward

There are more than 10 million small businesses owned by women in the U.S., but most of them make less than $50,000 per year.  There are new initiatives explained in the CBS video below to help women jump start their businesses during one of the most difficult economic environments since 1982.

While many businesses are laying people off, these are hiring and it’s all due to creativity.  During a recession there’s nothing to wait for, it’s time to get to work…that is the sentiment and a good boost for people during trying times.

In 2008 the U.S. economy shed over 2 million jobs.  Predictions for 2009 are as dire with another 2 million job losses expected, but most of these job losses have come from large corporations, not necessarily the small businesses that truly fuel our economy and will lead us out of this recession.

Access to credit is important to small business owners.  Last year tightening credit left many small businesses with nowhere to turn but the tide is starting to change.  The recent TARP bailout provided banks with billions to loan to consumers for credit cards, student loans, auto loans and of course, small businesses.

If you’re looking to start a small business, now might be the time to do it with low interest rates and other incentives.  Consider this, retail space can be had for cheap due to high vacancy rates.  Furthermore, vendors are itching to sell their goods to wholesalers so now might just be the time to put on your negotiating hat and start that business you’ve always wanted!

 

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$780 for Starbucks? Saving money during the recession

The recession has hit everyone hard.  Many of those little extras we used to get are now a thing of the past. One of them was the daily Starbucks.  When times are tough, a $4 drink just doesn’t make sense.

McDonalds picked up on this trend too and started campaigning against Starbucks in certain areas with billboards.  The basic translation was that $4 for a cup of coffee is basically crazy, but it didn’t take an ad campaign from McD’s to hurt Starbucks, the economy did that on its own.

Starbucks has seen their profits slide significantly this past year and there seems to be no end in sight.  With over 800 store closings and numerous layoffs, times have changed for the once ever-growing chain.  If you’ve cut back on Starbucks but still love your gourmet coffee, watch the video below, which shows how to make your own great coffee right at home.

Coffee isn’t the only place to save money.  We suggest a complete overhaul of finances to see where cuts can be made.  Often the best place to start is with credit card interest rates.  If you have a credit card balance and you’re able to pay it off in full, do it.  If you can’t pay it off in full, calculate how long it will take to get the balance to zero.  This calculator works well for determining how long you’ll be sitting on your credit card debt.

If you’re absolutely buried in unsecured credit card debt, get help from a debt relief specialist.  Payments and interest can be reduced while also protecting your credit.  Call (888) 233-3213 or fill out the short form below:

1. Your Name(required)
2. Email(valid email required)
3. Telephone(required)
4. State
5. Debt or Mortgage Amount(required)

 

 

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The Obama Stimulus > Will it pass and how much will it be?

Obama’s stimulus plan is about $1.2 trillion when everything is said and done.  This is a stimulus bill that is larger than anything we’ve ever seen.

And though we likely won’t see exactly what’s in the bill, we do know about what payments would be per person, $500.  That is $500 per person and per child.  The former stimulus package under the Bush Administration paid stimulus checks of $300 per person and it had little effect.

The stimulus check is obviously a one-time event so it’s important to find other means of cash flow.  Job losses have mounted.  If you’ve lost your job, continue to look.  Networking with friends, family and former co-workers is an effective way to find a new job.  Remember that job boards are crowded with millions looking for jobs so go where those people aren’t and be prepared to take a position for less money and in an industry that might not be your favorite.

Keep your credit clean.  Opportunities will arise as the recession begins to correct itself.  Most opportunities will be tied to your good credit e.g. low mortgage rates, a small business loan, and a decent credit card.  If you’re late on payments now, correct them if you can.  If you’re buried in unsecured debt i.e. credit cards, get the debt consolidated.  This will protect your credit while also lowering your payments and interest.

For more information on debt relief call a specialist at (888) 233-3213 or fill out the short form below.

1. Your Name(required)
2. Email(valid email required)
3. Telephone(required)
4. State
5. Debt or Mortgage Amount(required)

 

When will house prices hit bottom?

One of the most common questions is when will house prices hit bottom?  The simple answer is…when unemployment numbers settle.

There are many factors that contribute to house prices from tightening credit to interest rates but no one factor has more impact than jobs.  Simply said, if people don’t have jobs, they can’t buy homes.  When people can’t buy homes, prices drop.

In Los Angeles, for example, the median home price 2 years ago was just over $500,000.  That number today is nearly cut in half.  Why?  Because the affordability rate hit an all time low of around 13%.  That means that only 13% of people could afford a home.  Of course this also means that 87% could not.  These numbers needed to change and they did but they’re certainly not done.

As job losses mount, 2 million from 2008 with 2 million more expected for 2009, house prices will continue to slide.  Buyers are few and far between and most capable buyers are sitting on the sideline waiting for prices to drop further.  One economist warns that prices will continue to fall through 2012, which if we follow a credit-suisse graph of alt-a and adjustable mortgages that are due to reset, that seems consistent.

One solid gauge, according to this economist, is to look for homes that hit the year 2000 values.  He believes at that point that prices will have hit bottom.  But this bottom will be with us for some time before prices start to rebound.  And remember that a rebound will likely only be a .5% increase in value year over year (as it should be), not the 15% yearly growth we had before.

How to deal with debt collection and debt collectors

This is not an article with advice on how to dodge debt collectors as that will get you nowhere.  We will however, provide you with some basic advice on how to address debt collection calls and notices.

Never ignore debt collection calls and letters.  Always address the issue as quickly as possible.  If the debt is not yours or there’s been some sort of mistake in the creditor’s billing department, address the issue with documentation, first stating in writing that you are contesting the debt.  This will keep collection agencies from posting a late payment to your credit report.

From there, use your documentation to prove that the debt is not yours or is wrong.  This paper trail will save you later if the agency places a mark on your credit report.

If the debt is yours and you simply can’t pay, tell the creditor just that.  Typically this would not work as well as it does today, but so many people have lost their jobs that it’s extremely common.  Set up a payment plan if you can.  If they agree to a payment plan, stick to it.  Missing payments on a plan you agreed to could escalate collection activity.

Ignoring collection calls and letters completely will typically result in a lawsuit being filed, depending on the size of the debt.  If the debt is too small, they might just settle for a negative mark on your credit then charge-off the balance.

In any event, it’s best to address your financial concerns.  Bankruptcy is a last resort and should be taken seriously.  If most of your debt is unsecured, like credit cards, simply get the debt consolidated.  This process can reduce your payments and interest, eliminate fees, stop collection activity and protect your credit (FICO score).

For more information on debt consolidation call a debt relief specialist at (888) 233-3213 or fill out the short form below:

1. Your Name(required)
2. Email(valid email required)
3. Telephone(required)
4. State
5. Debt or Mortgage Amount(required)

 

Struggling with debt and a job loss > there are options

The stories coming out of our worst recession in decades are ones of fraud, anger and some with tremendous sadness.

The fraudulent fund managers seem to be coming out of the woodwork.  The reason for this is that their clients are starting to call-in their invested money, something the fund managers didn’t expect to happen. But, these ponzi schemes always fail sooner or later.  We just had such rapid growth for many years that the schemes were able to get giant before they eventually collapsed.  The biggest scammer to-date is Bernie Madoff who lost billions for a wide range of clients from Hollywood stars to his own sister, even Wells Fargo had a charge-off today related to Madoff.  Individuals lost millions, and for some, it was all they had.  Now they start all over with nothing and many had already been retired.

Some who have lost their jobs and financial security have taken things into their own hands (the criminal way), by going after those who fired them.  There are stories all over the country where business owners and CEO’s have been attacked for job losses by those laid off.

The worst sign of the times we’ve seen has been in those who take their own life and that of their families. It’s a feeling of desperation, that things will not get better and there is no way out of this financial hole.  But what some people forget is that things will change and they will get better sooner or later.  Yes, you may have to struggle for some time.  You may have to take work in a different industry and for much less pay.  You might lose your house and car but these things can eventually be replaced.

If you’re struggling with debt and a job loss, get help.  Assess your situation and find ways to make it better.  You’re not alone, over 2 million people lost their jobs in 2008.  2 million more will lose their jobs in 2009.  Start networking with friends, family and former co-workers to find any type of work to generate cash flow.  Debt can be managed through consolidation or bankruptcy as a last resort.  Even the IRS is taking a gentler tone with those who owe back taxes.

Anything can be done so do your research and get ready for better times because no recession has lasted forever and we’ve been through many.

When is it time to file bankruptcy? > Chapter 7

Bankruptcy is a financial tool where many debts can be discharged, relieving the debtor of those obligations and the obvious stress that goes along with them.

Traditionally, people have filed for bankruptcy due to medical bills or divorce.  This doesn’t say much for our health care or court systems, which can overburden people with bills they cannot pay.

Today with the country in deep recession, the reasons for filing bankruptcy have changed.  Topping the list are job losses and foreclosures.  People just don’t know what to do when the bills pile up and cash flow stops.  It’s at this point that many consider bankruptcy, but when is it time to file and are there other options?

First, know that not all debt obligations will be discharged with a Chapter 7 filing.  Child and spousal support, and student loans are off limits and will remain a debt even after bankruptcy.  After legislation pushed by credit card companies in 2005 succeeded, some credit card debt could also be off limits.  To be sure, check with a bankruptcy attorney.  Cost to file with an attorney is typically $1500-2500.

For some, bankruptcy could be the only choice and it’s not necessarily a bad one.  The idea behind bankruptcy is to give a person a second chance to get their finances in order and try again.  No one should be burdened forever with debt from a few mistakes.

However, bankruptcy will remain on your credit report for up to 10 years and could cause lenders to deny you credit.  Employees and insurers even look at credit now so having a public mark like bankruptcy can be detrimental and should be thought through completely.

Another option, particularly for unsecured debts like credit cards, is to have the debt consolidated.  This process can either settle the debt or manage it for you.  In either case, the payments will be lower, your credit will be protected and any collection activities will cease.

For more information on debt consolidation in lieu of bankruptcy, call a debt relief specialist at (888) 233-3213 or fill out the short form below:

1. Your Name(required)
2. Email(valid email required)
3. Telephone(required)
4. State
5. Debt or Mortgage Amount(required)

 

You can negotiate your monthly bills

Monthly bills can be frustrating, particularly during a recession where many have had their income reduced or eliminated altogether due to job loss.  But there is action you can take and few people are aware of it, negotiate your bills.

Services like internet, phone and cable/satellite TV can be easily negotiated by calling them and asking for their “best price”.  It’s best to be informed in this situation by knowing what promotions their competitor is running.  Businesses are hurting and they want to keep their current customer base.  If you press them on the price, they’ll do just about anything to keep you.

In refinancing your mortgage (rates today are around 4.5%), shop around and be sure to tell each bank that you are doing so.  Make sure you again ask for their “best deal”, write it down and move along to the next bank.  You can save thousands or even tens of thousands with a better interest rate or by reducing closing costs.

When cash flow is tight you might need to stretch your rent or mortgage payment.  In these cases just call and ask.  Most landlords and banks are willing to stretch out the payments a bit.

For outside services like plumbing or even accounting services, again ask for the “best price”.  It’s a consumers market and many service providers desperately need the work.  Just asking can save you upward of 20% on your bill.

When it comes to negotiating rates or payments on a credit card, that can also be done.  However, if you’re not comfortable negotiating with your creditor or your balance is high (over $10,000) get help from a debt relief specialist.  Call (888) 233-3213 or fill out the short form below:

1. Your Name(required)
2. Email(valid email required)
3. Telephone(required)
4. State
5. Debt or Mortgage Amount(required)

 

Mortgage Loan Modification Scams

The term “loan modification” is quite popular these days as mortgage defaults continue to increase and the value of homes continues its fall off a cliff.

This term originated with the government (Fed and Congress) as they were seeking ways to slow down the housing crisis.  It seemed like a fantastic idea.  If a home owner was at risk of foreclosure due to an interest rate reset or falling value, they could approach the bank and get their loan modified.

The bank would simply reduce the loan amount, reduce the interest rate and forgive any past due payments and penalties.  From a marketing perspective this seemed very positive but what banks found was that over 60% of loan modifications redefaulted within a year and a much greater percentage after that.  It didn’t take banks long to start refusing loan modifications.  It was more cost effective for them to take the loss and put the house back on the market at a lower price.  But the lack of availability of these loan modifications left people frustrated with nowhere to turn.

In comes the loan modification scam.  There are a number of these going on throughout the country with the most recent case reported in Los Angeles.  People are desperate and they want to trust that someone can help, so in this instance, people are paying a consulting firm an up front fee to get their loan modified.

This firm takes the fee and runs, never to be seen again.   Now the desperate homeowner is in an even deeper financial situation because they just paid a big up front fee and lost it.

If you’re attempting a loan modification, we suggest visiting The FHA/HUD website for accurate details on what your options are.

If you’ve been scammed by a loan modification scheme, contact your states’ Attorney General to file a complaint.  In California, the Attorney General can be contacted here.

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