2012 August | Lee Financial Help

Archive for August, 2012

Dealing With Debt In Marriage

Posted on: August 31st, 2012 by admin No Comments

Debt can be a stressful occurrence for anyone, but debt in marriage can be an entirely different matter. Money trouble is the number one reason for divorce in America and many people simply fail to address their financial problems until it is too late. However, money and debt can be better managed by following a few simple steps.

Together In Finance

First, don’t ignore your money problems. Many people put bills and debt out of their minds until it becomes a problem, by then it can be too late. Don’t wait until you receive a delinquency or collection notice to pay attention to your debts, but stay on top of your accounts monthly.

Next, make managing your money a cooperative effort. Sitting down to develop a budget together creates a sense of unity and mutual agreement about how money is to be spent, how accounts will be managed and leads to a greater sense of accountability between marriage partners.

Last, prepare for the unexpected. Saving money for an unforeseen financial hardship can prevent the need for bankruptcy or debt negotiation. Most financial hardships aren’t brought about by tangible experiences, but what those circumstances do when a person lacks emergency funds to stay afloat.

Navigating A Short Sale

Posted on: August 30th, 2012 by admin No Comments

Five years ago buying a short sale was practically unheard of, but in today’s housing market they can be a hot deal. While most sellers and buyers are aware that short sales can be difficult, most people have no idea how to prepare for the process.

Expecting The Unexpected

There is no doubt that the seller has the toughest job in the short sale process. As an alternative to foreclosure, they are selling only to avoid going under financially and suffer credit damage. As the main mediator between a potential buyer and the bank, the seller has no power and all the responsibility. Sellers should be aware that they can only accept an offer to present to the bank and cannot officially declare the home as sold. Further, sellers should expect that the bank will reject offers and the process could be prolonged, costing them continued payments on the mortgage until the house is sold.

Buyers are in a unique position to gain a home, often for less than valued. However, buying a short sale takes patience. Buyers must present the best offer possible to eliminate a drawn out negotiation process. Banks are often unwilling to accept offers full of conditions or that lack an adequate price. Buyers should be aware that their top dollar for purchase is generally the best offer to make right out of the gate. Further, it should be expected that it can take anywhere between one to six months before hearing about the status of their offer. Therefore, buyers should not consider a short sale if time is of the essence.

Obama Questioned On Foreclosure Decisions

Posted on: August 29th, 2012 by admin No Comments

After the height of the foreclosure crisis left so many Americans devastated by the loss of their homes, the government stepped in to try and help prevent future foreclosure troubles. However, many people are now criticizing these moves stating their efforts are not reaching those in need.

Mortgage Debt Mounting

It is estimated that over one-third of homes in America are suffering from mortgage debt troubles, and half of those either have already defaulted or are at high risk of defaulting in the future. In attempt to stabilize the failing housing market and keep more homes out of foreclosure, the Obama Administration has poured time and money into bailouts for homeowners facing mortgage debt. The Home Affordable Refinance and Home Affordable Modification Programs are just two examples of initiatives being made to provide help to homeowners. Although hundreds of thousands of homeowners have been reached by some of these vital programs, not everyone is happy about the outcome.

Many of those criticizing the efforts made are unhappy that only “responsible borrowers” were aimed for receiving help. By suggesting that lenders offer loan modifications under set guidelines, many people judged to be carrying “excessive debts” were not reached. Landlords of sinking properties were also ignored, further devaluing neighborhoods that were already in a downward spiral. These opponents suggest that there is need for more of a legislative push to regulate mortgage companies, requiring they be more flexible in helping all borrowers.

Despite the criticism, the fact that even less than fruitful efforts were made has to be acknowledged. The Obama Administration has recognized their prior efforts were not as successful as hoped and officials are now back to the drawing board to continue efforts for rebuilding the housing market.

Using Debts In Credit Negotiations

Posted on: August 28th, 2012 by admin No Comments

When debts become overwhelming it can often feel as though your options have run out. While you might not think credit negotiation is feasible, it is often easier than you might think. In fact, you probably already have the tools needed to successfully lower your debts.

Burden Of Proof

The biggest obstacle most people face in negotiating their debts is proving their financial hardship. In most cases, creditors will want to see proof of your financial hardship before they are willing to agree to help you with your account balance. This may mean that you need to demonstrate lack of income, unemployment, divorce or even medical illness in order to have your debts with a credit card company lowered.

For example, if you have suffered an illness or even have large medical bills from an accident or injury, these bills can be used to demonstrate your financial hardship. Even though your credit card company has no control over these bills, these debts do still count towards your overall debt-to-income ratio. By demonstrating your inability to keep up with payments due to all debts, a creditor may be willing to lower your interest rate, temporarily suspend payments or even settle your debts.

Why? Because a credit card company knows that high debt-to-income ratios can result in a higher risk of default on their account or even risk their debtor filing for bankruptcy. Creditors can minimize their risk of loss by working with their account holders, not against them.

Buying A Foreclosure Cautions

Posted on: August 27th, 2012 by admin No Comments

Foreclosures are saturating the real estate market. While many people avoid them, there are some great deals to be gained for buyers. However, buying a foreclosure should be considered with caution and efforts taken to avoid some of the more common pitfalls.

Proceed With Caution

The most important aspect for buyers of a foreclosed property to remember is that they are no longer dealing with a traditional seller, but instead they are dealing with the bank. This means that negotiations will be much tougher and could take a significant period of time. Putting in an offer on a foreclosed property often requires much patience and flexibility. In other words, don’t expect to get your way or even have much power in negotiations. Remember that the bank is taking a huge loss on the home and wants to get as much as possible to minimize profit loss. Your offer needs to be as clean and strong as possible, which means you should offer your top dollar and avoid asking for help with closing costs.

Another important thing to remember when attempting to purchase a foreclosure is that they are typically bought in “as is” condition. This means that the bank will not disclose and knowledge of the prior owner’s experience, leaving you without vital information about the home’s history. This makes it extremely important that you obtain a home inspection. However, if you do find that there are significant damages to the home, do not expect the bank to make corrections of the problem or even offer financial concessions to cover the cost. Often times the bank will only accept offers that acknowledge their own liability over repairing the home.

Changes In Mortgage Lending

Posted on: August 24th, 2012 by admin No Comments

Now that some of the dust has settled after the mortgage settlement, lenders are required to make some important changes to the way they do business. Having been developed in light of the recent unlawful foreclosure episode, lenders will be held more accountable for their actions and be under much more scrutiny than ever before.

Holding Feet To The Fire

One of the biggest issues facing homeowners today is foreclosure. Unlawful or lawful, foreclosure is a huge problem in the real estate market today. Not only are foreclosure leaving many without a home, but lenders have also lost millions and some have even engaged in poor business in efforts to minimize loss. However, in order for the market to improve many changes must take place, many of which are in mortgage lending.

Lenders will be required to provide distressed homeowners with more clear notification that their home is at risk of foreclosure. Full disclosure of intent to foreclosure and the process in which homeowners can prevent foreclosure are now to be commonplace among lenders. Lenders will be encouraged to offer homeowners mortgage counseling and review options like loan modification and refinancing, for those that qualify.

Further, lenders will be under the burden of proof when lawful foreclosures do take place. In other words, evidence of robo-signing will be under close watch and the lender will have to prove they followed protocol when foreclosing on a home. All steps must be followed and documented before a home can be taken in foreclosure. These new rules come in hopes that lenders will be able to figure out better ways to avert losses without impacting homeowners opportunities to recover from mortgage debt troubles.

Budgeting and Credit

Posted on: August 23rd, 2012 by admin No Comments

It might seem like budgeting and your credit have nothing in common, but they do. In fact budgeting and smart money management is a key factor in having good credit. Here is why:

A Give And Take Relationship

Credit is tricky business and even the smallest mistake can take a devastating toll on your credit standing. While debt is important for creating and maintaining a good credit score, too much debt can be detrimental. People who overspend or carry high credit card balances have a lot of credit debt, which means they are at more of risk for defaulting if financial hardship strikes.

Budgeting is essential for saving money, and saving money is essential for having back up funds in the event of an emergency. People rarely keep track of their savings, let alone prioritize it. Having an active savings account that is part of your monthly budget of expenses increases your chances of successfully saving money. If you were to lose your job or have unexpected expenses, a savings account can prevent you from missing a debt payment; thereby preventing credit damage.

Your credit is your responsibility, so taking care of it takes effort. Be sure you are budgeting, saving and keeping your debt-to-limit ratio low to make the most of your credit score.

New Mortgage Debt Help Summary Document

Posted on: August 22nd, 2012 by admin No Comments

In an effort to better educate consumers about the options available to help prevent foreclosure and resolve mortgage debt, the U.S. Department of Housing and Urban Development has launched a new campaign. The National Mortgage Settlement outreach project is designed to be a one-stop shop for anyone suffering with mortgage debt and offers a brochure summarizing the programs available to help.

In A Nutshell

The ”Mortgage Assistance Guide” is the core of HUD’s new campaign. It sums up every program available by the government, as well as lender-based options the homeowner can pursue for help. Some of the options covered are:

Government-based programs like Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP), which offer foreclosure alternatives through loan modifications or refinancing.
State programs such as the “Hardest Hit Fund”, which offers mortgage payment assistance for unemployed or the underemployed in certain areas.
Lender-based options such as loan modifications, refinancing, short sales or deed in lieu.

Making such an important decision is better served with help from a professional that the brochure also provides a decision tree to help homeowner evaluate their next step. The brochure also encourages homeowners to seek mortgage debt counseling or help from a foreclosure attorney to review their case.

For more information visit: http://portal.hud.gov/hudportal/HUD?src=/homeownerhelp

Dealing With a Deed In Lieu Of Foreclosure

Posted on: August 21st, 2012 by admin No Comments

Foreclosure. It is a word that strikes fear in the heart of every homeowner. While some people are not able to escape the unfortunate reality of losing their home to mortgage debt troubles, it doesn’t always have to end in foreclosure.

It’s Not Just Giving Up

A deed in lieu of foreclosure essentially means you are signing over the title to your home in exchange from being released from responsibility of repaying your mortgage loan. By taking ownership and possession of the home, the lender becomes responsible for the property and debt. Sounds a lot like a foreclosure right? It’s not.

The difference is essentially that you voluntarily agree to relinquish the property and avoid the experience of the court taking away the property legally. By agreeing to give up the property you save yourself the hassle of the eviction process and may even be able to buy yourself enough time to relocate without added stress. A deed in lieu also has less effect on your credit standing and chances at obtaining a loan in the future than a foreclosure.

The Last Stop

While a deed in lieu is a better option than foreclosure, it certainly isn’t the first place to start. Always check with your lender to review your options. You may be able to save your home through a mortgage modification, or lower your payment by refinancing. A short sale is also another option to consider before pursuing a deed in lieu with your lender.

Tax Debt Relief Tips

Posted on: August 20th, 2012 by admin No Comments

Tax debt is one of the most stressful types of debt for many Americans, second only to medical debt. While owing the IRS money can be serious business, it doesn’t have to be difficult to resolve. In fact, there are several ways to enter debt negotiations with the IRS and obtain a favorable outcome.

Simple Solutions

If you haven’t already, contact the IRS about your debt. Ignoring your unpaid taxes can only lead to unfavorable consequences that could cost you more money down the line. Make sure you stay in open communication with an IRS agent in writing or over the phone. The benefit to communicating your intention to resolve your tax debts in writing is a paper trail of evidence that you made good faith efforts towards taking care of your responsibility.

It is important that you are prepared when entering debt negotiations with the IRS. Know how much you can afford to pay without overextending your other financial accounts. The IRS offers a few different payment options based on your financial situation. You may need to provide documentation to demonstrate your financial hardship, such a proof of insufficient income or additional debt burdens.

Be sure to remain flexible in your negotiations. Remember that the IRS is not legally obligated to offer you repayment assistance, rather it is a courtesy. Always be polite in your negotiations. Offering to make repayment easier, by setting up an automatic draft of payment can even boost your chances at successful tax debt negotiation.