A "get real" budget
There is a line from a movie that I really like and think about often. It is from the great movie "Shawshank Redemption". Anyway, there is a line that Morgan Freeman says (I think it was him) and it goes something like this- "get busy living or get busy dying".
I used to lie awake late at night thinking about how I would make that next paycheck stretch out. I realized that no one was going to help me, except me!
When you get a chance, take a look at the discussion boards on Craigslist. There are several listings asking for financial help. Some need rent money, some wanted a short term loan and others just could not find work and needed some money to feed the kids. I was both fascinated and shocked.
Most of these folks obviously owned a computer and an internet connection along with a land line or cell phone.
Internet connection- $40-$60 per month
Cell phone bill- $75-$100 per month
Those two monthly bills could save you about $120 per month or over $1200 per year.
If you are like me, I constantly am turning off lights in our home. The wife, the kids and yes, even me leave them on without thinking. I am known as the utility bill cop at our house. I can honestly say that it saves us $100 per month turning off lights, making sure the facets are not leaking water and that we are not leaving the heater or AC on during the day, when no one is home.
How about cable television? Back in the day, I really thought I needed access to over 200 channels. I wanted my family and friends to be impressed that I could view Cricket matches from India or watch classic reruns of "The Adams Family" over and over again!
My wife and I realized that we were only watching shows (and yes, sporting events) on a handful of channels. My monthly bill went from over $200 per month to less than $100.00. Still way too much money but I really am starting to like Cricket!
Anyway, you get my point. Instead of a gardener, go buy a used grass mower. Car pool to work once in a while. Put away those credit cards for a while! If you don't have the cash, don't buy it! And if buying lunch every day is something you do, start bringing left overs! I was spending $50-$70 a week on lunch. That is $200 a month!
Anyway, I know it sounds easy to do and I don't blame people for doing what they have to do to get by. And as for those folks asking for a helping hand on Craigslist, let's feel fortunate that we don't have to do that...right now!
H-
Wednesday, March 25, 2015
Tuesday, March 24, 2015
The Consumer Financial Protection Bureau- CFPB
Many homeowners, in fact anyone who has debt should be aware of this organization and its oversight abilities. I am going to guess that not many consumers have heard of the CFPB.
They are funded by the federal government and have only been around a few years. Most mortgage servicers and debt collectors are not big fans of the CFPB for many reasons.
In theory, the CFPB is here to protect you, the consumer from illegal or unethical collection practices. They also have appointed themselves the "people's watchdog" for how payments are applied, how notices and correspondence should be handled between the debt collector and the consumer as well as other issues related to protecting the consumer.
As to why debt collectors do not like the CFPB is simple. They are helping to keep debt collectors honest and ethical in their dealings with consumers. The CFPB has also put into place several guidelines and regulations that debt collectors must comply with. Some of those regulations cause compliance issues regarding collection issues and other practices which debt collectors have no choice but to abide by or get slapped with a hefty fine.
They are also available should you have a complaint regarding a debt collection practice or something that happened to you regarding a debt.
This is a link to their website. It has shows you how to file a complaint if you have one.
http://www.consumerfinance.gov/
Many homeowners, in fact anyone who has debt should be aware of this organization and its oversight abilities. I am going to guess that not many consumers have heard of the CFPB.
They are funded by the federal government and have only been around a few years. Most mortgage servicers and debt collectors are not big fans of the CFPB for many reasons.
In theory, the CFPB is here to protect you, the consumer from illegal or unethical collection practices. They also have appointed themselves the "people's watchdog" for how payments are applied, how notices and correspondence should be handled between the debt collector and the consumer as well as other issues related to protecting the consumer.
As to why debt collectors do not like the CFPB is simple. They are helping to keep debt collectors honest and ethical in their dealings with consumers. The CFPB has also put into place several guidelines and regulations that debt collectors must comply with. Some of those regulations cause compliance issues regarding collection issues and other practices which debt collectors have no choice but to abide by or get slapped with a hefty fine.
They are also available should you have a complaint regarding a debt collection practice or something that happened to you regarding a debt.
This is a link to their website. It has shows you how to file a complaint if you have one.
http://www.consumerfinance.gov/
Monday, March 23, 2015
What are you waiting for?
Mortgage Daily is reporting today that loan modification volumes are down this year. There were only 36,000 approvals done in January 2015 and just over 35,000 completed in December 2014.
That means one of two things to me.
1. You are current on your loan and life is good.
2. You are past due on your mortgage and afraid to call your mortgage co.
That is the purpose of this blog. For you to do something and take some control when dealing with the mortgage company.
Remember...if you don't ask, you will not get. Drop me a note if you have a non-legal question.
Hank
Mortgage Daily is reporting today that loan modification volumes are down this year. There were only 36,000 approvals done in January 2015 and just over 35,000 completed in December 2014.
That means one of two things to me.
1. You are current on your loan and life is good.
2. You are past due on your mortgage and afraid to call your mortgage co.
That is the purpose of this blog. For you to do something and take some control when dealing with the mortgage company.
Remember...if you don't ask, you will not get. Drop me a note if you have a non-legal question.
Hank
Friday, March 20, 2015
What is a GSE? How about a Loan Reset?
Some definitions,
words, terms or organizations that you need to know about-
1. GSE- Government Sponsored Enterprise. These
are organizations that may or may not be supported, funded or attached to the federal
government. The two most common include:
·
Freddie
Mac- Federal Home Loan Mortgage Corporation
·
Fannie
Mae- Federal National Mortgage Association
These
organizations invest in MBS (Mortgage Backed Securities) pools. In other words,
they buy or invest in mortgages in groups based on amounts, interest rates, locations
and other criteria.
You may recall
a few years ago when the housing industry was horrible, most of the issues were
directly related to how bad these MBS pools were performing. When these loans defaulted,
the GSEs had no way to pay their investors and were losing money…a lot of
money. So much money that the federal government stepped in to bail them out.
2. Loan Reset- If you were approved for a loan
modification under the Home Affordable Modification (HAMP) program back in 2010
or so, most of those loans provided for an interest rate reset at the end of 5
years.
If
you have one of these loans, look for your loan modification paperwork and look
for language related to loan resets or rate adjustments.
You
could be OK with the adjustment (either up down) assuming that the load mod
did what it was supposed to…get you back on your feet. But if your situation is unchanged or no better that it was 5 years ago, it sounds like the GSE’s want your
mortgage company to reach out to you now and see what they can do to have you
go into default again.
Better
you beat them to it! Call them and find out what is going on with your loon if
it is subject to a loan reset.
3. If your loan is not held by a GSE or other
investor, these rules or guidelines may not apply to you. Let’s say your loan
is with a local bank or a credit union, it is possible that these financial
institutions will not abide by these guidelines since your loan is not held by
Freddie Mac or Fannie Mae.
More Homeowner Help on the Way
Servicers are now required to evaluate mortgage loans backed by the two GSEs and
actively reach out to borrowers to offer a streamlined loan modification if the
mortgage loan was previously modified to include a step-rate feature (which
allows for a gradual rate increase in the first few years) and if the mortgage
rate becomes 60 days delinquent in the first 12 months following a rate
increase.
The updates to the servicing requirements also removed the requirement that a servicer must immediately pursue a short sale, a mortgage release, or foreclosure proceedings against a borrower should the loan become 60 or more days delinquent within 12 months after the effective date of the loan modification.
The GSEs have made the updates to their servicing programs in order to assist the borrowers who originally modified their mortgage loans through Treasury's Home Affordable Modification Program (HAMP) in 2010 whose five-year modifications are due to reset this year. The streamlined loan modification option is in place to prevent those HAMP borrowers who may not be able to absorb the higher payments that come with interest rate increases when their modifications reset from defaulting – or in some cases, re-defaulting.
About 511,000 HAMP modifications with a 2010 vintage are due to reset in 2015; according to Treasury, about 41 percent of those were 90 or more days delinquent 42 months after the modification became permanent. Treasury also has programs in place to help borrowers handle the rate increases, or "step-ups," and avoid re-defaulting.
Only a small percentage of borrowers who default or re-default on HAMP modifications actually go to foreclosure, according to Mark McArdle, Chief Homeownership Preservation Officer at Treasury. Most are able to work out a solution to avoid foreclosure.
See my post later today for what this all might mean to you!
The updates to the servicing requirements also removed the requirement that a servicer must immediately pursue a short sale, a mortgage release, or foreclosure proceedings against a borrower should the loan become 60 or more days delinquent within 12 months after the effective date of the loan modification.
The GSEs have made the updates to their servicing programs in order to assist the borrowers who originally modified their mortgage loans through Treasury's Home Affordable Modification Program (HAMP) in 2010 whose five-year modifications are due to reset this year. The streamlined loan modification option is in place to prevent those HAMP borrowers who may not be able to absorb the higher payments that come with interest rate increases when their modifications reset from defaulting – or in some cases, re-defaulting.
About 511,000 HAMP modifications with a 2010 vintage are due to reset in 2015; according to Treasury, about 41 percent of those were 90 or more days delinquent 42 months after the modification became permanent. Treasury also has programs in place to help borrowers handle the rate increases, or "step-ups," and avoid re-defaulting.
Only a small percentage of borrowers who default or re-default on HAMP modifications actually go to foreclosure, according to Mark McArdle, Chief Homeownership Preservation Officer at Treasury. Most are able to work out a solution to avoid foreclosure.
See my post later today for what this all might mean to you!
More Loss Mitigation Programs on the way-
Getting Started-
I have never wrote a blog before but after 25 years in the mortgage business, I am ready. Most of my career has been spent on the default side of things.
That means you would not deal with me or my department until a homeowner was severely past due on their house payments, in bankruptcy or foreclosure.
I also managed a short sale team for a mortgage servicer and spoke often at Real Estate events on how agents and brokers could increase their chances of submitting a success short sale package.
Despite the governments programs (Hamp/Tarp), I have always argued that a loan modification will not help the homeowner if there is no steady employment or if the borrowers budget is not taken into consideration. If you have been one of the fortunate ones to get a loan mod and been able to make the payments as required, you are very fortunate.
Most loan mods end up right back where they started. I don't intend to talk down to homeowners in this blog. They have the right to know (in plain, simple English) what is going on with mortgage servicers, the investors and how it all impacts them.
Why am I writing this blog?
I have had family members and friends lose their homes to foreclosure or short sales. It tore me up inside because I knew I could only offer support and some advice. In the end, if they had reached out to me a little sooner, some of the pain and frustration could have been avoided.
If you choose to read my blog, know one thing. I am trying to educate you on how you MIGHT be able to save your house. I am not a lawyer (although I currently work for a law firm) and I am not a financial genius who can create a magical budget for you so that you can keep your home.
In other words, I am not responsible for any negative results that you may run across. This is about your home and about the decisions you make for you and your family. In my opinion, there are so many things that homeowners just don't know about when it comes to dealing with their mortgage companies.
Having worked for a major mortgage company in my lifetime, I could not tell a homeowner what to do or not to do. I tried to give them the information they needed to make an informed decision. Had the homeowner invested just a little time and effort in how to protect their homes, the results might have been a little different.
It's not too late. It is time for you to take on some responsibility and deal with it.
I have never wrote a blog before but after 25 years in the mortgage business, I am ready. Most of my career has been spent on the default side of things.
That means you would not deal with me or my department until a homeowner was severely past due on their house payments, in bankruptcy or foreclosure.
I also managed a short sale team for a mortgage servicer and spoke often at Real Estate events on how agents and brokers could increase their chances of submitting a success short sale package.
Despite the governments programs (Hamp/Tarp), I have always argued that a loan modification will not help the homeowner if there is no steady employment or if the borrowers budget is not taken into consideration. If you have been one of the fortunate ones to get a loan mod and been able to make the payments as required, you are very fortunate.
Most loan mods end up right back where they started. I don't intend to talk down to homeowners in this blog. They have the right to know (in plain, simple English) what is going on with mortgage servicers, the investors and how it all impacts them.
Why am I writing this blog?
I have had family members and friends lose their homes to foreclosure or short sales. It tore me up inside because I knew I could only offer support and some advice. In the end, if they had reached out to me a little sooner, some of the pain and frustration could have been avoided.
If you choose to read my blog, know one thing. I am trying to educate you on how you MIGHT be able to save your house. I am not a lawyer (although I currently work for a law firm) and I am not a financial genius who can create a magical budget for you so that you can keep your home.
In other words, I am not responsible for any negative results that you may run across. This is about your home and about the decisions you make for you and your family. In my opinion, there are so many things that homeowners just don't know about when it comes to dealing with their mortgage companies.
Having worked for a major mortgage company in my lifetime, I could not tell a homeowner what to do or not to do. I tried to give them the information they needed to make an informed decision. Had the homeowner invested just a little time and effort in how to protect their homes, the results might have been a little different.
It's not too late. It is time for you to take on some responsibility and deal with it.
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