How to Get Out of Debt With the Get Out of Debt Guy » mortgage payment

Unemployed and Struggling to Make Your Mortgage Payment? Check Hardest Hit Fund for Help.

Steve Rhode — Tue, 31 May 2011 14:54:52 +0000

Yesterday over the dinner table we had a guest enjoying barbecue with us and she was talking about her work with the Hardest Hit Fund and all the mortgages in North Carolina she was screening to be paid by the Obama Hardest Hit Fund program.

Up till now this benefit program had not hit my radar and I was intrigued.

“Does the program actually cover mortgages,” I asked.

“Absolutely, and we pay up to $24,000 for 24 months to qualifying applicants,” she said.

Here is the official description of the program.

President Obama established the Hardest Hit Fund in February 2010 to provide targeted aid to families in states hit hard by the economic and housing market downturn. Each state housing agency gathered public input to implement programs designed to meet the distinct challenges struggling homeowners in their state are facing. States were chosen either because they are struggling with unemployment rates at or above the national average or steep home price declines greater than 20 percent since the housing market downturn.

The states included on the program are:

Alabama
For more information: http://www.hardesthitalabama.com

Arizona
For more information: https://www.savemyhomeaz.gov/

California
For more information: http://www.keepyourhomecalifornia.org

Florida
For more information: https://www.flhardesthithelp.org/

Georgia
For more information: https://www.homesafegeorgia.com

Illinois
For more information: http://www.ihda.org/

Indiana
For more information: http://www.877gethope.org/

Kentucky
For more information: http://www.kyhousing.org/

Michigan
For more information: http://www.stepforwardmichigan.org

Mississippi
For more information: http://www.mshomesaver.com

Nevada
For more information: http://www.nahac.org/

New Jersey
For more information: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html

North Carolina
For more information: http://www.ncforeclosureprevention.gov/

Ohio
For more information: http://www.savethedream.ohio.gov/

Oregon
For more information: http://www.oregonhomeownerhelp.org/

Rhode Island
For more information: http://www.hhfri.org/

South Carolina
For more information: http://www.scmortgagehelp.com/

Tennessee
For more information: http://www.keepmytnhome.org

Washington DC
For more information: http://www.dchfa.org/

Just beware of scammers like I covered in this article. No group working with this official program should ask you for any money upfront. If you want to learn more about this program, use the links above or contact a HUD Housing Counselor.

So if you are unemployed and starting to fall behind on your mortgage but not yet in foreclosure, this program might be worth investigating.

@GetOutOfDebtGuy

I’m Currently in a Chapter 7 Bankruptcy and My Attorney Told Me Not to Make My Mortgage Payment. – Ed

Lewis Roberts — Fri, 06 May 2011 15:54:06 +0000

From How to Get Out of Debt

“Dear Lewis,

I am currently in chapter 7 Bankruptcy.

My home is worth 315,000 and the court is getting an appraisal as ordered by the trustee. my home is worth about 380.000 dollars and I have had had contractors over giving me estimates on work that is needed. so far the roofer gave me an estimate for 20.000, to tent for bugs, 3,500 new solar system mine is 28 years old new is 8.000 and my asphalt drivway has large cracks with weeds growing in them, note: i have 3 acres and the drive way is large, and i think to remove and apply 4″ of asphalt would probably be around 17,000.

I am currently 3 months behind and my attorney advised me not to make this months mortgage payment. Sould I make it? or not. I want to do a loan mod with someone as soon as this is over? what do you think about this.

My attorney says don’t worry if we don’t get a chapter7 I can get a chapter 13 and i will start fresh on my payments? can you advise My home is in Valley Center Ca.

Thank you for your help. I went through a divorse and i got stuck with every bill she had made and now paying her spousal support and i have had to pay flagstar bank a higher payment to get caught up. went from 1,950.00 to 2868.95 a month to pay back taxes and for them to pay them selves back.

is my attorneys advice to not pay the mortgage this month wize info. not i am already 3 months behind and if i go past the end of the month am i protected by filing chapter 7 bankruptcy?

Help,

Ed”

The Answer:

Dear Ed,

It seems as if you have a few competing issues going on in your current chapter 7 case. First of all, let me stress that you are currently represented by an attorney, so I cannot give you specific advice because of that representation.

But if someone were to come to me in a similar situation, here is what I would tell them…

First of all, do you really want to keep the home? (I ask this of all clients). It seems that you are close to upside down considering all the repairs that are needed. I am not sure how drastic some of the repairs are, or if some are minor or can wait.

In Florida, we have an unlimited homestead exemption. So a chapter 7 trustee would not be interested in your home. But in California, I am almost certain there is a dollar limit to the amount of equity you can exempt in bankruptcy for your residence. I am assuming this is why the trustee ordered an appraisal – to see if there is unexempt equity to be force you to “turnover” for the benefit of your unsecured creditors.

Second, if one wants to keep their home, I am not sure why someone would advise to not make a monthly payment. If you are already 3 months behind, I am not sure the lender would take the payment anyway – and this might be why the attorney said not to bother sending the payment.

If you were to convert to chapter 13, it would allow you to catch up on the back due payments over a period of 36-60 months.

But to specifically answer your question… Chapter 7 bankruptcy does NOT protect you from losing your home if you are behind on the mortgage, only chapter 13 can. In chapter 7, if you are behind on the mortgage, the lender’s attorney will file a relief from stay, incurring more expenses on your mortgage account, and then proceed with a foreclosure at some point (sometimes quickly, sometimes not at all).

Some clients are able to get caught back up quickly on their own if only a few months behind. Others need the comfort of a 36-60 month chapter 13 plan to be able to get current on the mortgage while protecting themselves from the lender being able to file a foreclosure.

If you are definitely keeping the home, I would ask your attorney what is the best way to get caught up on the mortgage. That will help determine which bankruptcy chapter is best for you.

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

If you have a bankruptcy question you’d like to ask just use the online form.

Krystle Was 19 Years Old And Had a Mortgage and is Now Slipping Deep in Debt

Steve Rhode — Fri, 08 Oct 2010 23:00:16 +0000

From How to Get Out of Debt

Krystle

“Dear Steve,

I’m 21 years old, and live in California. I purchased my first home at the age of 19 and while that gives me a great sense of pride what does not leave me feeling good is my excessive credit card debt. I began snowballing the debt right after I bought the house. The engine in my 14 year old car seized up. If I lived in a bigger city with better public transportation I would NOT have fixed the car but since it’s my only reliable way to work I chose to fix it. I took on some more debt when the carpet in my house was destroyed and I had to replace it. More accumulated when I had some more car repair troubles and gas in my city held strong at $5 for a few months. I live in a pretty remote area of California which is why it was so high for so long.

I’m looking at about $8000 in credit debt right now. My mortgage is $1150 and my income right now is about $2000. That’s my take home pay after taxes, my health insurance and 401k contributions.

I know my first problem is my mortgage payment is way too high for my income. Though it has a good fixed rate of 6.25% it’s a big chunk of my income that I shouldn’t have agreed to let go each month but what can I say I was a kid who was razzle dazzled by the thought of owning a home. The only other bills I am responsible for is one cellphone bill ($60), electricity ($30), television ($40), propane($50), insurance for the house and car ($70) and health insurance for my dog ($25). I also spend $100 a month to pay off some money a friend gave me for an urgent medical expense which I’m so glad I didn’t put onto a credit card as well.

My two cards have a minimum payment of $100 each. One is an American Express and one is a Visa from a credit union. The AMEX has an interest rate of 16 or 17% and the Visa has an interest rate of 10%.

It should be known that my house is deed restricted and cannot be refinanced for cash out and the way my obligations are now, I doubt anyone would refinance me just for a lower interest rate.

My specific question is what the heck should I do? I’ll be the 1st to admit I didn’t help my debt by putting stupid stuff on the cards that I bought because I was depressed that I never have any money (dumb girl logic I guess.) $250 a month to live on is way harder than I thought it would be. What I want most is to actually see this debt go away each month and to be able to have a savings for emergencies (like unexpected car repairs.) I have no savings and it scares me to death. Should I seek the help of a credit agency? Should I write a letter to my card companies and see if they would lower my rate or perhaps see if my mortgage company would lower my rate so I’d have a little bit more money each month?

I am toying with the idea of filing bankruptcy. I’ve had a score of 715 for all my credit life but I know it’s getting eaten away at and I hate the idea of having that bankruptcy on my report forever but I don’t know what else to do.

Appreciate your help!

Krystle”

The Answer:

Dear Krystle,

It is pretty clear that the amount of your income that you spend on just your mortgage is pretty severe. Wow, I’m sadly disgusted that you got qualified for that unmanageable payment to begin with.

Now a payment that sizable doesn’t necessarily sink you if you don’t have other obligations and you can spend a lot of your income to service that debt. But that’s not your situation. It is easy to see how the high gas prices and needed car repairs sent you in a downward spiral and then on top of that you can add in the distraction shopping debt.

I’m not certain that entering into a debt management plan or a credit counseling plan makes much sense for you at all. Your financial situation is so tenuous that promising to make years of payments without falling into trouble seems just unlikely.

What would happen if gas went way back up again a year or so after you stated making debt repayments? I would guarantee you that without any increase in your income that your debt management plan would fail.

I’m also not convinced that going bankrupt is going to make your situation much better. Going bankrupt would only really tackle your credit card debt and in the grand scheme of things, that is not that large. The best way to tackle this situation would be to downsize your housing expenses. That would probably mean selling your home and then renting for a lot less.

By changing your housing situation you would also trim your housing related expenses as well. Now changing your housing situation is probably a difficult move for you to make after you’ve invested so much emotionally into being a homeowner at only 19. Not may people can say that.

But I think that we can be confident tat the price of gas will go back up, the cost of utilities and insurance will be more expensive and without a large increase in your income, I’m sorry to say, tomorrow stands to be more difficult than today as long as you try to service your debt on your income.

The two areas that you could look at are to eliminate any 401K contributions and increase your tax withholdings if you get money back on your taxes at the end of the year. If you typically do get money back than all you are doing is giving some money to the government for free that you need to use each month.

If your job provides you with some level of matching contribution on your 401k then cutting back on your 401k contribution would mean losing the free money the company gives you in their matching contribution. With your age you would get more long term benefit from keeping up with the 401k contributions now. That would give them more years to percolate and earn a larger return for you in your golden years.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore

Steve Rhode — Sun, 07 Feb 2010 19:33:45 +0000

From How to Get Out of Debt

Kayte

“Dear Steve,

My husband and I have roughly $75,000 in credit card debt. Due to the economy, we both have experienced a substantial decrease in our income (i.e., commission based pay). We have exhausted our savings trying to keep up with our mortgage payment, credit card payments, car payments and other cost. We are now at a point where we can not pay all of our bills.

Would a ‘debt management’, ‘credit counseling’ or a ‘debt settlement’ program be the best way to improve our financial situation?

Kayte”

The Answer:

Dear Kayte,

Thank you for trusting me enough to send me your question. I only wish you had found me before you spent your savings trying to stay current.

The problem, in situations like that, is that the savings keeps you afloat until it is gone, and then you are in double trouble.

Debt settlement would not be the best path since you don’t have any money to make large settlements right now to eliminate some of those debts. And a credit counseling or debt management program might help with reducing the interest rates on your credit card debts but it is not going to help reduce your mortgage or car payments.

If you can afford the mortgage, car payment and reasonable living expenses, without the credit cards, then eliminating your credit card debt through bankruptcy might be worth looking into. I’d suggest that you speak with a bankruptcy attorney and ask for a free bankruptcy review to discuss your situation.

If you still can’t afford to live within your income even after eliminating your credit card debt then more dramatic and major lifestyle changes will be in order. These may include selling your home and renting for less money or selling the car and buying a less expensive vehicle.

Generally the largest monthly expenses for families is the mortgage, health insurance, car payments, utilities, and food. It’s hard to find easy reductions in those items without making major changes in where you live, what you drive, etc.

One major expense that I always hate to see people drop is health insurance. There is no doubt that health insurance is ridiculously expensive. For many the monthly amount spent on health insurance and medications is more than a mortgage payment. But if you don’t carry medical insurance, just one simple accident can clean you out and take you to bankruptcy.

Please let me know what you decide to do.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Lower Your Car Payment. Skip It, Lower Your Interest Rate and Get Cash Back

Steve Rhode — Sat, 26 Dec 2009 17:51:18 +0000

From How to Get Out of Debt

Here is a little financial tip that I’ve used in the past but I keep forgetting about. Refinancing an existing auto loan to lower interest rates and monthly payments.

I just got an email that a client was instantly approved for an auto loan refi and that’s good news. You see when this particular person bought their car their credit score and credit report was less than perfect and interest rates were higher. However, in the mean time they have worked hard to improve their credit score and rates have dropped.

One advantage of the auto refinancing process is that it allows you to skip a car payment and get extra cash!. Plus, your interest rate can be much lower.

People that are perfect for an auto loan refinance are those that have a good credit score but can see some financial belt tightening coming in the near future. By reducing the car payment it gives you more breathing room each month. And behind the rent or mortgage payment, the car payment is usually pretty steep.

Now if you refinance you car loan it doesn’t mean that you can’t keep sending your current monthly payment to pay it off even earlier, it just means that if the economy caused you some financial pain that you could fall back to a lower monthly payment without being in default. And once things improved, you could resume your accelerated repayment schedule.

I’ve done this myself in the past. I had purchased two cars at the same time, what was I thinking? Last time I ever buy a new car. Then a couple of years latter the interest rates had dropped. By refinancing them both I lowered my combined monthly payment by some $350 and saved 3% on the interest rate. Hey, if I don’t have to pay more, why would I want to? Seriously, look into refinancing your auto loan now.

Bounced Mortgage Check and My Dad’s Back Credit. – Mary

Steve Rhode — Thu, 16 Jul 2009 14:04:04 +0000

From How to Get Out of Debt

“Dear Steve,

My father and his brother got a loan to purchase a house for their mother about 12 years ago through BOA. Apparently, back in April of this year my dads brother wrote the April mortage check for the payment and it bounced. The next month my dad writes the May mortgage payment and so and so on. Well here it is July and my dad’s credit card limits with BOA start getting cut in half. So he calls them up to find out why and they tell him that the mortgage just got caught up in June but that the loan went 90 days past due to the bounced check, which my father never knew about. So he asks them how come he wasn’t informed?? They gave him 2 addresses, one to his mom’s house in which BOA had the wrong zip code and the other to the PO Box of his brothers business. They never contacted him through his home address and his mom says she never received a letter from them either. My dad has perfect credit and has never made one late payment. The same with the loan in question, 12 years and not one late payment, nothing. But they are giving him the run around and telling him that there is nothing they can do to get the negative mark on his credit removed. So, I guess my question is what can he do since he was unaware there was a situation with a bounced check??

Thanks,

Mary”

The Answer:

Dear Mary,

I’m hard pressed to see where your father has a case here. It is the responsibility of the customer to make sure that they are receiving statements. If he had not been receiving statements on his mortgage account he should have proactively contacted Bank of America to inquire why.

It does not sound like Bank of America misapplied the payment that resulted in the deficiency. They applied the payment, but it bounced. A fact that you uncle clearly knew about and does not appear to have told your father. I wonder why? If he had, this problem would also have been averted.

I’m not clear from your question if your dad and uncle were rotating making the payments. If only one payment was missed your father would be sitting at 30 days past due as each subsequent payment would have been applied to the previous month. To be 90 days past due three payments would have had to either not been made or bounced.

The best course of action your father can embark on now is to bring his mortgage current, correct his address with Bank of America, and give his brother a swift kick in the ass.

Big Hug!

@GetOutOfDebtGuy

I Have Contacted CCCS and Money Management International And Was Told They Can’t Help Me. – Josephine

Steve Rhode — Wed, 01 Apr 2009 08:00:23 +0000

From How to Get Out of Debt

“Dear Steve,

I have contacted CCCS and Money Management International and was told my debt/inome ratio would make it impossible to make payment arrangements with citi that I owe $25,000.00. Then I saw a bankruptcy attorney.

The bankruptcy atty told me that I have too much equity in my house to go bankrupt and yet I can barely make ends meet with the mortgage payment I have. How can I keep my house and pay back Citi?

Josephine”

Can I Trade My House In For a Smaller One Instead of Losing it in Foreclosure? – Hollis

Steve Rhode — Sun, 25 Jan 2009 16:47:51 +0000

From How to Get Out of Debt

Hollis

“Dear Steve,

I am severly under water financially having lost a second income. Now my house is upside-down by probably $80K, both my credit cards are topped out and I owe $40K on those and I have been advised to declare chapter 7 bankruptcy. My retirement savings have plummetted because of the volitility in the market, so there is not enough there to borrow temporarily to repay the credit cards. Even if I declare bankruptcy, there is still the mortgage payment that I can no longer afford.

Is there any system in place whereby one could go to a lender and ask to move to one of their smaller houses in foreclosure, pay a mortgage there that they could afford, and then short-sell the main house?

Hollis”

The Answer:

Dear Hollis,

You would think a logical solution like that would exist, but I can understand why it does not.

Between the duty to the bank investors, the pool of people owning a piece of your original mortgage and the legal and tax issues in trading down, what seems like a totally reasonable and logical solution to a difficult mortgage situation, just isn’t practical from the banks point of view.

Banks do a great job of rolling out policies for the masses and a horrible job at treating people as individuals. Just look at the mess that still exists in just trying to get current lenders to agree to rewrite or modify current loans of homeowners to avoid foreclosure. The banks swear they are doing this and it is an easy process but the word on the street is that is simply not true.

It certainly does not hurt to call up your lender with your logical suggestion but don’t get discouraged if they have no good response for you or just flat out say no.

You might just be left with letting the bank take your house back, rolling the deficiency that you will owe into your bankruptcy and let’s move on. Talk to your bankruptcy attorney about the best way to handle this. If you don’t have a current bankruptcy attorney, click here to file bankruptcy or get a free bankruptcy consultation.

As I’ve always said, logic and creditors don’t mix.

Big Hug!

@GetOutOfDebtGuy

Mortgage Company Disappears, Won’t Take Payments, Violated RESPA – Reta

Steve Rhode — Fri, 16 Jan 2009 21:45:19 +0000

From How to Get Out of Debt

Reta

“Dear Steve,

Mortgage company disappears without claiming foreclosure, violated RESPA, never contacted us after obtaining the loan, never sent monthly statements, contacts us after we find them, then tells us they will work out a plan, we send in a payment…3 weeks later they send it back, say they are filing bankruptcy, and never did, and now its been 2+ years…what can I do to eliminate this from my title and not pay any taxes on the now disappeared mortgage?

Reta”

The Answer:

Dear Reta,

What a nightmare it has been for you. At this point, and with these many issues surrounding your real estate title and property I think you really have no other logical choice than to seek the assistance of a real estate attorney licensed in your state.

This is such a mess that it is going to take a professional to fix it so you can get a clear title to your property at some point.

Big Hug!

@GetOutOfDebtGuy

Bush Administration Rolls Out Wimpy Mortgage Assistance Plan

Steve Rhode — Tue, 11 Nov 2008 22:22:15 +0000

From How to Get Out of Debt

The Bush administration today rolled out a plan to help homeowners in trouble with their mortgages. While proclaiming big help the plan does not go anywhere near far enough to help those in the most trouble.

Homeowners 90 or more days late in their mortgage payments, owe at least 90% of their home’s current value, live in the home on which the mortgage was taken and have not filed for bankruptcy are eligible.

The major issue is that this plan will not reduce the total amount owed on a home that is now worth less than what is owed against it. Also, people who don’t file bankruptcy are eligible but so many people are loaded up with all sorts of debts that bankruptcy is an accelerating solution for a lot of people.

The Bush mortgage plan is not an industrywide plan so don’t get all excited that it is either law or to be offered by all lenders.

Under this plan borrowers may be able to have their interest rates reduced or loans extended out for a decade longer to reduce the monthly payment. The goal would be to reduce the mortgage payment to 38% of the monthly household income. Citibank recently announced a similar plan but set their target at 40% of income.

This new program may not help homeowners in need if the lenders or investors in the mortgages don’t agree to the proposed modification. This new initiative by the Bush administration sounds nice but like a lot of other attempts comes up short and not full of meaningful assistance.

Meltdown risks mental health disaster

Steve Rhode — Tue, 28 Oct 2008 15:51:56 +0000

From How to Get Out of Debt

Fears over job security, paying the bills or even just whether your house is going to be foreclosed are fuelling an epidemic of stress, anxiety and sleepless nights among workers on both sides of the Atlantic – and it is managers who are having to pick up the pieces.
Increased stress, anxiety and tension inside as well as outside the workplace is posing a severe challenge for managers around how best to manage people who, often through no fault of their own, may not be 100 per cent focused on the job in hand.

Nine out of 10 American workers are losing sleep over financial worries, according to a poll by Chicago-based health and wellbeing company ComPsych Corporation.

Nearly a third of those surveyed said they were worried about the cost of living, while 29 per cent said their anxiety over their credit card debt was keeping them awake at night.

For 14 per cent it was whether they would be able to meet their mortgage payment that often preoccupied them in the depths of the night.

It’s a similar story across the Atlantic in the UK, where a poll by health insurer Bupa has found that a third of British workers are deeply concerned for their jobs, with two out of five saying levels of stress at work have increased since the financial crisis began.

Meltdown risks mental health disaster Management-Issues, UK – 28 minutes ago Nearly a third of those surveyed said they were worried about the cost of living, while 29 per cent said their anxiety over their credit card debt was …

Read the rest here

Americans losing sleep over financial crisis

Steve Rhode — Mon, 27 Oct 2008 22:38:25 +0000

From How to Get Out of Debt

NEW YORK (Reuters) – If fellow workers seem groggier or grumpier than usual in the mornings, they are probably losing sleep over the global financial crisis, according to research released on Monday.

Ninety-two percent of respondents said the economic turmoil is keeping them awake at night, according to a survey by ComPsych Corp, a provider of employee assistance programs.

Of those, a third said their biggest worry was the cost of living, while another third cited their credit card debt.

One in six said their biggest worry was their mortgage payment, and another one in six cited concern over their retirement account.

Eight percent of those surveyed said they were not worried.

Americans losing sleep over financial crisis Reuters - 32 minutes ago Of those, a third said their biggest worry was the cost of living, while another third cited their credit card debt . One in six said their biggest worry was …

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Source: Americans losing sleep over financial crisis

How to Get Out of Debt With the Get Out of Debt Guy » mortgage payment

Unemployed and Struggling to Make Your Mortgage Payment? Check Hardest Hit Fund for Help.

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I’m Currently in a Chapter 7 Bankruptcy and My Attorney Told Me Not to Make My Mortgage Payment. – Ed

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Bounced Mortgage Check and My Dad’s Back Credit. – Mary

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I Have Contacted CCCS and Money Management International And Was Told They Can’t Help Me. – Josephine

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