Wednesday, November 23, 2011
Supercommittee on Deficit Reduction call it quit. Just imagine if 12 people cannot get together to and come up with a proposed plan on how to trim the deficit ....how can 650 people in Congress ever get along to do anything of value. Leaders are elected to lead. If they cannot, the people should lead !!!
Monday, November 21, 2011
Friday, November 18, 2011
Consumer Confidence Down. Prices Up. Disposable Income Down. What do we do next ???
Consumers' Financial Health Takes Hit in Third Quarter
A deteriorating housing picture, coupled with an increase in expenses and a drop in consumer confidence, led to a sharp decline in consumers’ financial health during the third quarter.
The nonprofit credit counseling agency CredAbility puts out a regular quarterly index measuring consumer distress. Between July and September, the gauge recorded its largest drop since the third quarter of 2008.
U.S. households scored 66.7 on the index’s 100-point scale for Q3 2011. That’s down from a distress index level of 69.2 just three months earlier. A score below 70 indicates a state of financial distress.
CredAbility’s data show the average consumer has been in distress for 12 straight quarters now.
The drop in the third quarter index breaks a string of rising scores in five of the past six quarters. In fact, the agency’s COO Mark Cole says the fragile gains made
during the past year-and-a-half have been completely swept away in a single quarter.
“The mortgage delinquency rate is no longer improving and household budgets are being squeezed by rising gas and food costs. Unless consumers are willing to borrow, they’ll need to scale back their holiday spending,” Cole warned.
Mortgage delinquencies, late payments by apartment dwellers, and housing expenses as a percentage of gross income all increased during the quarter, according to CredAbility’s report.
At the same time, the agency says rising prices for food and gasoline meant consumers had less discretionary income.
On top of all that, even though the unemployment rate remained steady, the under-employment rate increased as the number of persons working part-time for economic reasons increased by 700,000 to 9.3 million in the third quarter.
CredAbility says among individual states, Nevada had the lowest distress index score at 59.70, followed by Mississippi, Michigan, Georgia, and Alabama.
Only 19 states and the District of Columbia had scores higher than 70. North Dakota had the highest index score at 81.4.
CredAbility’s quarterly index tracks the financial condition of the average U.S. household by measuring five categories: employment, housing, credit, how families manage household budgets, and net worth.
“The mortgage delinquency rate is no longer improving and household budgets are being squeezed by rising gas and food costs. Unless consumers are willing to borrow, they’ll need to scale back their holiday spending,” Cole warned.
Mortgage delinquencies, late payments by apartment dwellers, and housing expenses as a percentage of gross income all increased during the quarter, according to CredAbility’s report.
At the same time, the agency says rising prices for food and gasoline meant consumers had less discretionary income.
On top of all that, even though the unemployment rate remained steady, the under-employment rate increased as the number of persons working part-time for economic reasons increased by 700,000 to 9.3 million in the third quarter.
CredAbility says among individual states, Nevada had the lowest distress index score at 59.70, followed by Mississippi, Michigan, Georgia, and Alabama.
Only 19 states and the District of Columbia had scores higher than 70. North Dakota had the highest index score at 81.4.
CredAbility’s quarterly index tracks the financial condition of the average U.S. household by measuring five categories: employment, housing, credit, how families manage household budgets, and net worth.
Thursday, November 17, 2011
5 ways to rebuild credit after bankruptcy
5 ways to rebuild credit after bankruptcy
If you're one of the 1.5 million people who filed for bankruptcy in 2010, the dark financial cloud may seem unending. But take heart: As time crawls on, if you don't suffer additional money missteps, your financial picture will improve.Rest assured that you are not alone. The recession ushered in a tidal wave of bankruptcies, with the number of new filers nearly doubling from 850,912 in 2007 to 1.5 million in 2010, according to the American Bankruptcy Institute. While a bankruptcy will cause credit score damage, there are steps you can take to turn things around.
"Becoming creditworthy after bankruptcy is a major concern to millions of Americans right now," says Karen Carlson, director of education for InCharge Debt Solutions, a credit counseling organization in Orlando, Fla. After all, a bankruptcy can hurt your chances of getting a mortgage and make credit, in general, more expensive, with car loans sometimes costing consumers as much as 29 percent in interest after a bankruptcy, Carlson says.
The damage to your credit score can be substantial. In fact, a FICO score in the mid-to-upper 700s could fall by 200 points or more as a result of a bankruptcy filing, says Barry Paperno, consumer operations manager for MyFICO.com. Though bankruptcy remains on your credit report for seven to 10 years, you can start to turn your credit around in 12 to 18 months, experts say, by considering the following options. Option No. 1: Correct reporting errors. While the last thing you may want to do is pull a copy of your credit report to see the bankruptcy's damage firsthand, it's important to make sure inaccuracies don't drag your score down even more. "Get a copy of your credit report free from AnnualCreditReport.com and make sure everything that should have been discharged in your bankruptcy shows a zero balance," says Carlson. If it doesn't, contact those creditors and the credit bureau to make sure the information gets updated.
Option No. 2: Take advantage of current obligations. Many people mistakenly believe that a bankruptcy will wipe out all debts, but some, such as student loans, child support and, in many cases, mortgages will not be discharged, says Barry J. Roy, a bankruptcy attorney with Rabinowitz, Lubetkin & Tully in Livingston, N.J. By keeping on top of payments on those remaining loans, you'll receive a credit boost for paying your bills over time.
Option No. 3: Rent your way to better credit. Earlier this year,, credit reporting agency Experian announced it would include rental histories in its credit profiles to get a more accurate reflection of consumers' financial pictures. "We included consumers' mortgages, auto loans, credit loans and student loans before, but we were missing the largest monthly expenditure for a third of the country -- namely their rent payments," says Brannan Johnston, vice president and managing director of Experian RentBureau.
Since the collection of rental data requires leasing companies to be part of a national network of property management companies and use special software, most individual landlords and small rental companies aren't equipped to report rent payments at this time. But if you plan to lease an apartment from a midsized to large rental company, check with the leasing office to see if they're reporting their data to Experian RentBureau, Johnston says. Though Fair Isaac's FICO score (which can range from 300 to 850) doesn't include the rental data in its credit scoring system, VantageScore (whose scores range from 501 to 990) does, and a record of paying your rent on time can make a difference. In fact, for those consumers who have rental data reported, 45 percent of them with VantageScores in the 500s and lower found their scores increased to 600 or above, RentBureau's Johnston says.
Option No. 4: Take a slow and 'secure' approach. Secured credit cards let you take baby steps back into the credit game. To offset the card issuer's risk, secured cards require a deposit that serves as your credit line, so if you put down $1,000, you'll have $1,000 in credit available. Apply for a secured credit card through a local bank or credit union, suggests Katie Ross, education and development manager for Auburndale, Mass.-based American Consumer Credit Counseling. Avoid secured cards with high fees, and make sure the card issuer reports your payments to the credit bureaus, Ross adds.
Option No. 5: Explore unsecured offers with caution. While some people who find themselves in financial straits may swear off credit entirely, doing so won't help your cause. Jacqueline Gikow of New York found this out the hard way after she filed for bankruptcy and then decided to operate solely with cash. "For about 10 years, I just used debit cards," the 64-year-old says. Since she hadn't built up her credit, she still had trouble getting credit cards after the bankruptcy had fallen off of her credit report. Though department store and gasoline credit cards tend to have high interest rates, they're typically among the easiest types of credit cards to qualify for. A high interest card with no annual fee, in general, can be advantageous if you use it regularly and pay it off immediately so you rack up no interest charges, Ross says. "By doing this, it will be reported to the credit reporting agencies and will show that you are making payments in a timely manner," Ross adds. Once you've shown your ability to pay on time and your credit score has risen accordingly, ask the card issuer to lower your rate, or apply for a card with better terms.
There's no one-size-fits-all approach to rebuilding credit after bankruptcy, but with consistent financial discipline and a little patience, you will get easier access to credit again, says Roy. "You'll be able to get a car loan, you'll be able to get a lease and eventually you'll be able to get a mortgage."
Tuesday, November 15, 2011
$9.5 billion of YOUR tax money has been paid to millionaires since 2003 in government benefits. Millionaires borrowed $16 million in government-backed education loans to attend college. On average, each year, millionaires enjoy benefits from tax giveaways and federal grant programs totaling $30 billion. Now you know where your tax money goes. To subsidize the rich.
Monday, November 14, 2011
Wednesday, November 9, 2011
28.6 % of Homeowners owe more than the value of their home.
Rising Negative Equity Puts More Than One in Four Underwater
After declining between the first and second quarters of this year, Zillow says negative equity rose again in the third, reclaiming all of the previous quarter’s decline and then some.
Zillow’s latest market analysis indicates 28.6 percent of American homeowners with a mortgage owed more on the loan than their home was worth as of the end of September. That’s up from 26.8 percent in the second quarter and 28.4 percent in the first quarter.
Dr. Stan Humphries, Zillow’s chief economist, explains that negative equity fell in the second quarter on the basis of sharp improvements in depreciation rates and flat foreclosure liquidation rates.
This quarter, however, Humphries points out that home values remained relatively flat while foreclosure rates slowed further. These two factors, he says, combined to increase negative equity.
Zillow’s latest market analysis indicates 28.6 percent of American homeowners with a mortgage owed more on the loan than their home was worth as of the end of September. That’s up from 26.8 percent in the second quarter and 28.4 percent in the first quarter.
Dr. Stan Humphries, Zillow’s chief economist, explains that negative equity fell in the second quarter on the basis of sharp improvements in depreciation rates and flat foreclosure liquidation rates.
This quarter, however, Humphries points out that home values remained relatively flat while foreclosure rates slowed further. These two factors, he says, combined to increase negative equity.
While the pace of foreclosures has slowed, Zillow still describes liquidations as “high,” with nearly 9 out of every 10,000 homes going back to the bank through foreclosure.
Zillow’s third-quarter report shows that despite recent economic turmoil, home values in the United States remained almost unchanged from the second to the third quarters, declining just 0.2 percent.
Regionally, 105 out of 157 markets (67 percent) in Zillow’s study experienced quarterly declines. Only 26 markets saw appreciation on a quarterly basis.
Several markets, including Washington, D.C. and Fort Myers, Florida, saw declines in the third quarter after two consecutive quarters in positive territory.
However, Zillow says there are signs of stabilization in some of the hardest hit markets in Michigan. Ann Arbor, Grand Rapids, Detroit, and Lansing have all seen at least two quarters of appreciation.
The company’s national index is down 4.4 percent from the third quarter of 2010, registering a median home value of $171,500. Zillow says residential property values have fallen 28.8 percent since they peaked in June 2006.
With the steady drumbeat of negative economic news recently, Humphries says home values are holding up better than one might think.
Still, Humphries is sticking to his prediction that a true bottom in home values shouldn’t be expected until 2012 at the earliest, with negative equity and unemployment the two biggest factors preventing the market from stabilizing.
Zillow’s third-quarter report shows that despite recent economic turmoil, home values in the United States remained almost unchanged from the second to the third quarters, declining just 0.2 percent.
Regionally, 105 out of 157 markets (67 percent) in Zillow’s study experienced quarterly declines. Only 26 markets saw appreciation on a quarterly basis.
Several markets, including Washington, D.C. and Fort Myers, Florida, saw declines in the third quarter after two consecutive quarters in positive territory.
However, Zillow says there are signs of stabilization in some of the hardest hit markets in Michigan. Ann Arbor, Grand Rapids, Detroit, and Lansing have all seen at least two quarters of appreciation.
The company’s national index is down 4.4 percent from the third quarter of 2010, registering a median home value of $171,500. Zillow says residential property values have fallen 28.8 percent since they peaked in June 2006.
With the steady drumbeat of negative economic news recently, Humphries says home values are holding up better than one might think.
Still, Humphries is sticking to his prediction that a true bottom in home values shouldn’t be expected until 2012 at the earliest, with negative equity and unemployment the two biggest factors preventing the market from stabilizing.
Monday, November 7, 2011
Wage Garnishment for Student Loan Defaults
Did you know that Sallie Mae or collectors for Federal Student Loan can garnish your wages without a NOTICE, HEARING or a LAWSUIT.
The government can garnish 15% of your wages if you fall behind on your student loans, and here is the laws that assist them:
The government can garnish 15% of your wages if you fall behind on your student loans, and here is the laws that assist them:
- The Higher Education Act, (P.L 102-164; 20 U.S.C. § 1095a) authorizes ED as well as student loan guaranty agencies to collect defaulted Federally-financed student loans by means of an administrative order to the employer, and without the need for a court order. This order requires the employer to withhold and pay over to ED or the guarantor up to 15% of the debtor’s disposable pay. This Federal law supersedes any state law governing wage garnishment.
- Section 488A of the Higher Education Act authorizes ED and student loan guarantors to collect defaulted Federally-financed student loans by means of an administrative garnishment order to the employer, without the need for a court order. This order requires the employer to withhold and pay over to ED a portion of the debtor’s disposable pay.
- Federal law authorizing this action supersedes any state law that might limit or prohibit wage garnishment, or would require a creditor to obtain a judgment or use specific procedures for wage garnishment.
- Debit blocks and other account tools used by banks to prevent fraud will not prevent your check from being cleared through our Treasury lockboxes.
Thursday, November 3, 2011
More Good News !!! Homeownership Rate Rises After Two Years of Decline.
After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report released Wednesday.
With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the homeownership rate has been on the decline for quite some time. In fact, according to Bloomberg, the third quarter rise is the first in two years.
However, the 0.4 percent increase, which brought the homeownership rate to 66.3 percent for the third quarter, was not enough to post an annual increase.
The current homeownership rate remains 0.6 percent below the rate recorded in the third quarter of 2010.
Furthermore, according to the Census report, when the current rate is seasonally adjusted – which brings it to 66.1 percent – it is “not statistically different from the rate last quarter” – an even 66 percent.
With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the homeownership rate has been on the decline for quite some time. In fact, according to Bloomberg, the third quarter rise is the first in two years.
However, the 0.4 percent increase, which brought the homeownership rate to 66.3 percent for the third quarter, was not enough to post an annual increase.
The current homeownership rate remains 0.6 percent below the rate recorded in the third quarter of 2010.
Furthermore, according to the Census report, when the current rate is seasonally adjusted – which brings it to 66.1 percent – it is “not statistically different from the rate last quarter” – an even 66 percent.
Homeowner vacancy rates fell 0.1 percent in the third quarter arriving at 2.4 percent.
At the same time, rental vacancies rose 0.6 percent arriving at 9.8 percent.
Despite this shift, Capital Economics says in response to the Census findings, “The modest increase in the rental vacancy rate in the third quarter does little to alter our view that rental yields will soon rise above 5.5%, comfortably beating the yields available on Treasuries and equities.”
“Meanwhile, the homeownership rate remains at a level that suggests America’s love-affair with housing is still on the rocks,” Capital Economics adds.
About 85.8 percent of housing units were occupied in the third quarter.
The region with the highest homeownership rate was the Midwest with a rate of 70.3 percent, while the lowest homeownership rate was seen in the West at 60.7 percent.
The Northeast and South feel in between at 63.7 percent and 68.4 percent respectively.
At 76.1 percent, West Virginia had the highest homeownership rate. The state was followed closely by Mississippi with a 70 percent homeownership rate.
The lowest homeownership rate was seen in the District of Columbia, where the rate for the quarter was 44.3 percent. New York followed with 54.4 percent.
Nevada and California – states hard-hit by the housing crisis – were also in the bottom five with homeownership rates of 55.3 percent and 55.9 percent respectively.
At the same time, rental vacancies rose 0.6 percent arriving at 9.8 percent.
Despite this shift, Capital Economics says in response to the Census findings, “The modest increase in the rental vacancy rate in the third quarter does little to alter our view that rental yields will soon rise above 5.5%, comfortably beating the yields available on Treasuries and equities.”
“Meanwhile, the homeownership rate remains at a level that suggests America’s love-affair with housing is still on the rocks,” Capital Economics adds.
About 85.8 percent of housing units were occupied in the third quarter.
The region with the highest homeownership rate was the Midwest with a rate of 70.3 percent, while the lowest homeownership rate was seen in the West at 60.7 percent.
The Northeast and South feel in between at 63.7 percent and 68.4 percent respectively.
At 76.1 percent, West Virginia had the highest homeownership rate. The state was followed closely by Mississippi with a 70 percent homeownership rate.
The lowest homeownership rate was seen in the District of Columbia, where the rate for the quarter was 44.3 percent. New York followed with 54.4 percent.
Nevada and California – states hard-hit by the housing crisis – were also in the bottom five with homeownership rates of 55.3 percent and 55.9 percent respectively.
Wednesday, November 2, 2011
Home Affordable Refinance Program (HARP), a new program unveiled last week may help you refinance at a lower interest rate. Three conditions: 1. You must be current on your mortgage payments 2. Your Home is underwater, 3. Your loan was sold to Fannie Mae or Freddie Mac before 2009.
http://www.dsnews.com/articles/corelogic-identifies-harp-20-winners-and-losers-2011-10-31
Tuesday, November 1, 2011
Why do banks foreclose rather than work with the Homeowner ???. Here are some reasons.
Reasons Banks Would Rather Foreclose than Work a Loan Modification with the Property Owner.
Every day I hear from Homeowners "Why won't the bank reduce the principal owed on my home rather than selling it to a complete stranger for less money at a foreclosure sale."
Here are some possible reasons:
1. It is easier to say "No" than to work with the homeowner. Loan Servicers work for mortgage companies, and are responsible for collecting the monthly mortgage payments and remitting them to the mortgage company after deducting their fees for the services provided. Servicers are paid extra if they have to start a foreclosure against an homeowner. Servicers also provide other services that they can charge the mortgage company. Such services may include doing due diligence on the borrowers, title work, process service work, storage of documents, etc. etc. all of which is billed to the mortgage company. Therefore, the Loan Servicer has absolutely no interest in working with the homeowner until the entire relationship between the Servicer and the Mortgage Company and how the Servicer makes its money is changed.
2.There is no benefit for the Lender to reduce the principal. It is better to get less now through a foreclosure sale than allow the homeowner to pay a reduced amount over the next 30 years. Remember money is more valuable today. The same money is worth much less 30 years from now. Plus when the home is sold at a foreclosure sale, the bank can get a deficiency judgment against the homeowner for the balance of the mortgage. These deficiency Judgments can be sold for a price. There are various ways to avoid a deficiency Judgment.
3. Even if the bank reduces the principal and/or the interest rate or extend the loan for a longer time, banks know that given the state of the economy, many homeowners will default. I have got loan modifications for many of my Clients, and at least half of them have already defaulted and are seeking another Loan Modification. Of course, I am consumer lawyer, and my job is to protect the little person, so I apply shamelessly for a second, and a third modification, and aggressively defend the foreclosure case.
4. Banks have become so big that the right does not know what the left is doing. It is almost impossible to get the same person on the phone two times in a row. And the ones we speak to do have the authority to do anything but to gather papers. And for some reason banks keep asking for the same papers again and again. It is frustrating. Many times the Customer Service departments are outsourced to countries like India or China, etc. and it is a big mess. Most of the staff does not have the training to get things done.
5. Many mortgages are insured by AIG or another insurance company. Why will the bank work with you and give you a loan modification or reduce the principal when it knows that if it foreclosed on the home, they will get 100% of their money back from Insurance.
Moral of the story: It is better to foreclose than to do a loan modification or reduction in principal.
Attorney Dsouza defends foreclosure lawsuit, negotiates loan modification, deed in lieu of foreclosure, defends credit card lawsuits, negotiates and settles debts. www.DsouzaLegal.com
Here are some possible reasons:
1. It is easier to say "No" than to work with the homeowner. Loan Servicers work for mortgage companies, and are responsible for collecting the monthly mortgage payments and remitting them to the mortgage company after deducting their fees for the services provided. Servicers are paid extra if they have to start a foreclosure against an homeowner. Servicers also provide other services that they can charge the mortgage company. Such services may include doing due diligence on the borrowers, title work, process service work, storage of documents, etc. etc. all of which is billed to the mortgage company. Therefore, the Loan Servicer has absolutely no interest in working with the homeowner until the entire relationship between the Servicer and the Mortgage Company and how the Servicer makes its money is changed.
2.There is no benefit for the Lender to reduce the principal. It is better to get less now through a foreclosure sale than allow the homeowner to pay a reduced amount over the next 30 years. Remember money is more valuable today. The same money is worth much less 30 years from now. Plus when the home is sold at a foreclosure sale, the bank can get a deficiency judgment against the homeowner for the balance of the mortgage. These deficiency Judgments can be sold for a price. There are various ways to avoid a deficiency Judgment.
3. Even if the bank reduces the principal and/or the interest rate or extend the loan for a longer time, banks know that given the state of the economy, many homeowners will default. I have got loan modifications for many of my Clients, and at least half of them have already defaulted and are seeking another Loan Modification. Of course, I am consumer lawyer, and my job is to protect the little person, so I apply shamelessly for a second, and a third modification, and aggressively defend the foreclosure case.
4. Banks have become so big that the right does not know what the left is doing. It is almost impossible to get the same person on the phone two times in a row. And the ones we speak to do have the authority to do anything but to gather papers. And for some reason banks keep asking for the same papers again and again. It is frustrating. Many times the Customer Service departments are outsourced to countries like India or China, etc. and it is a big mess. Most of the staff does not have the training to get things done.
5. Many mortgages are insured by AIG or another insurance company. Why will the bank work with you and give you a loan modification or reduce the principal when it knows that if it foreclosed on the home, they will get 100% of their money back from Insurance.
Moral of the story: It is better to foreclose than to do a loan modification or reduction in principal.
Attorney Dsouza defends foreclosure lawsuit, negotiates loan modification, deed in lieu of foreclosure, defends credit card lawsuits, negotiates and settles debts. www.DsouzaLegal.com
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