ING Direct via their Easy Orange Mortgage product is offering their lowest mortgage rates in the companies history at a 3.125%.

The email that I received mentions that the closing costs are waived if below $1000.00 and are good until 09/05/2010 up to $750,000.00 with no points or rate buy downs.

This rate is quite low considering that zillow is advertising a 30 year fixed for 4.26% and a 15 year fixed at 3.80%, take note though that the 3.125% is only good for the first 5 years and requires a credit score of at least 700.

With foreclosure rates at an all time high and unemployment at record levels, this "deal" from ING Direct is great for people with better than average credit scores but for most people that are facing foreclosure, huge credit card bills in the 10's of thousands of dollars, creditors hounding them day and night it is not something that allot of people will be able to take advantage of.

Refinancing rates have come down a bit too, check out the latest Google refinance comparison calculator.

If you need an ing loan modification in 2010 then please contact us today.

Credit scores are not permanent.  Your credit score changes every time you use credit, pay off a credit card debt, miss a payment or apply for credit because the information is stored in your credit file.  Negative items such as collections, judgments, foreclosure or bankruptcy have more of an immediate impact right after they occur.  The more time passes, the less impact negative items have on your score.  Bankruptcy stays on your credit 10 years.  Foreclosure stays on your credit 7 years.  Collection or charge off stay on your credit for 7 years from the original delinquency.   Judgments stay on your credit at least 7 years and as long as 12-20 years or until the statute runs out and some are renewable.   However, the good news is you can restore bad credit to good credit over time.  It will require some work on your part such as making a budget, sticking to it, being sure to pay all your bills on time and not going over your credit limits.

You should start rebuilding your credit by ordering your free annual credit report.   For a nominal additional fee, you can also order your credit score.  Always review your report carefully for errors.  Don’t be surprised if you do find incorrect information and errors.  It is quite common.  You can dispute the items right online if you order your report on the Internet or by writing to each of the major credit bureaus- Equifax, Trans Union and Experian.  Even if you see an incorrect address, dispute it.  The more items you dispute, the better chance you have of the credit bureaus taking negative or incorrect information off your credit report.  If your creditor does not respond to the dispute within 30 days from the time the credit bureau contacts them, the credit bureau must take the item off your report and notify you in writing.  This tactic works well if you have any judgments against you.  The courts are so backed up the odds are in your favor that they won’t respond to the credit bureau within the required time frame, or they may not even respond at all. 

Consequences of bad credit can affect the interest rate you receive on mortgages and credit cards.  The lower your score, the higher interest rate you can expect to pay.  In fact, you may even get turned down for a mortgage or credit card because your score is too low, or you have too much credit.  It’s much harder to get a new mortgage or credit after a bank foreclosure than it is after a bankruptcy.  After a Chapter 7 bankruptcy, you are starting over fresh without debt so when you do apply for new credit, your creditor knows you don’t’ have any other debt, and you should be able to pay them back.

Employers run background and credit checks on potential employees to determine their level of responsibility.  You may be ineligible for certain types of employment, especially high clearance government and security type jobs if you have bad credit.  If you are trying to rent an apartment, chances are the landlord will run a credit check on you with your permission, of course. You could be turned down.  So you can how credit impacts everyone’s daily lives and why it is very important to maintain a good credit history. 

To avoid late or missed payments on your credit card or mortgage loan, you make want to set up automatic bill payments with your creditor and your bank.  This way you know that your payments will be reported timely every month on the same date of each month.   It’s much easier to have the payments on automatic debit then to have to remember to mail bills at different times of the month.  Electronic payments of your debts from your checking or savings account are more efficient for you and your creditor to keep track of and they saves trees and the environment.
You may also want to hire a credit restoration and debt settlement company to help you get on the path to credit restoration.  Credit repair specialists are experts in credit repair. They help consumers negotiate debt settlement with their creditors and get negative or incorrect items from consumer’s credit reports removed.  The benefits of using a credit repair specialist are many.  They are trained to spot items that you may not be aware of that can be removed or deleted from your report. 

Since they do this all the time, they know how to get items deleted that you may not be able to do if you attempt it on your own.  A credit specialist will be able to take you through a step by step program to either repair, restore or rebuild your credit depending on your situation. 
If you need debt reduction, the credit specialist can negotiate a debt reduction plan with your creditors so you can be debt free in a few years.  It may be a good idea for you to consolidate your credit by obtaining a second mortgage or home equity line.  Your credit repair specialist can help you find a lender for your needs.  However, keep in mind that you have to secure the second mortgage debt by using your home as collateral.  So if you default, you could lose your home to foreclosure.  There are some costs involved with second mortgages such as points and fees.  Still, it may make sense for you to take out a second mortgage to lower your debt, if you have enough equity and can afford to repay the loan.
If you have filed bankruptcy, the specialist can help you obtain a new credit card to rebuild your credit.  If there are errors on your credit report, the credit specialist can write to the creditor, and request that they remove them and track the reporting with the three major credit bureaus.  If you have had a short sale or deed in lieu of foreclosure, your credit repair specialist may be able to get your lender to change their reporting to paid or satisfied to improve your credit score. 

Only work with a reputable and honest credit repair and debt settlement company.  It’s a good idea to check the company with a local consumer protection agency or the Better Business Bureau to make sure there are no complaints against them.  Be cautious and trust your instincts regarding who you do business with, and you should have a positive experience working with a credit repair and debt settlement company.

Foreclosure can seriously damage your credit and also affect your spirits. Getting back on track with your life includes improving your credit score. Credit impacts just about everything we do from buying a house to getting a job. So it is important that you maintain good credit. There are mainly two reasons why people end up in foreclosure. Economic hardships beyond their control and bad credit management. If you fall into the second category, you need to develop good credit habits before you can restore and improve your credit. The problem for most people is they don’t know where to begin. You may want to speak to a credit counselor at a debt management and credit repair company. The credit specialist is an expert in the field of credit repair and restoration and debt management.

To start, you will need to pull a copy of your free annual credit report. However, for a fee under $35.00, you can obtain your credit report from all three credit bureaus-Equifax, Experian and Trans Union, and get your credit score. The score gives your creditors an indication of your credit worthiness. FICO scores are the most common scores that are used for reporting credit. The scores are determined from various credit data in your file such as your payment history, credit balances owed, the length of credit, how you use credit and new credit. Negative items such as judgments, collections or charge offs, foreclosures, short sales, deeds in lieu of foreclosure and late payments all impact your credit score negatively. Bankruptcy and foreclosure can lower your score as much as 200-300 points. Scores range from highest to lowest. 800 and above represent the best scores and 300 is the worst score. To obtain the best interest rate on a traditional mortgage, you will probably need a credit score of 700 or above. If your score is below 620, you probably won’t even qualify for a mortgage. Now that you know the ranges of scores, you need to understand the impact of a good score and a bad score.

With a good score, you will be able to obtain a mortgage, car loan and credit cards with lower interest rates and even qualify for certain types of high security employment. Employers use credit checks to determine your level of responsibility and character. If you have good credit, they assume you will be a responsible and trustworthy employee. Of course, not every employer will consider just your score; they are concerned with your experience and education. Also, right now, even people that had credit scores of 800 or higher are experiencing tough economic times and many have gone through foreclosure or bankruptcy. So you are not alone if you have bad credit as a result of a bank foreclosure. The important thing to remember is you can improve and change your credit over time. While a bank foreclosure does stay on your credit for 7 years, the most serious impact on your score is right after the foreclosure occurs. The longer period of time after the foreclosure, the less impact it has on your score.

There are some things you can do right away to start improving your credit after foreclosure such as reviewing your credit report to make sure it is accurate. About 75% of consumers have mistakes on their credit reports. Typically mistakes occur for the following reasons: Someone with the same or similar name applied for credit and a clerical error was made; the wrong social security number was given or misread or the spelling of a name or address on a hand-written application was entered incorrectly on your report; or payments were applied to the wrong account, and as a result show up as late on your account. These types of errors are the easiest to correct. To get the errors removed from your report and payments reported accurately, you need to write to the three credit bureaus to dispute the items. Be specific as to why they are wrong, and attach any necessary documentation. It may take a month or two before the information is deleted and/or corrected so be patient. The credit bureaus will advise you in writing once they have made the correction and will send you a revised report. Even if there are no errors on your report, you can dispute items. If fact, the more items you dispute, the better. The credit bureaus will contact the creditor. If the creditor does not respond in 30 days, the bureaus will delete the information from your file. Getting rid of negative items will immediately bring your score up as much as 100 points.

You may want to speak to your credit specialist about setting up a budget for you so you can manage your credit wisely. Only use your credit cards for emergencies, and pay them off each month to avoid interest and penalties. Get smaller credit limits. You can ask your credit card company to reduce your limits if they are too high. This way you know you can only spend what you can afford. Pay cash or write a check whenever possible for daily living expenses such as groceries and gas.

You may also want to set up automatic bill pay for your car payment and any other installment payments. This way, your payments will be made on time and reported as timely by our creditor to the credit bureaus. This will help you improve your score. It’s more efficient for you and your creditor, and you can track your payments and balances easier because everything is in one place. You don’t have to search through old bank records. In case there is an error, you can find it right away. If you need to find a credit card after your bank foreclosure, your credit specialist can help you find a secured card. A secured card is secured by a savings account in your name for the same amount as your credit card. You sign an agreement that if you default, the credit card company can use the proceeds in your savings account to pay off your card, and return the remaining balance to you. You can close the account at any time also by using the money in your savings account to pay the card off. The good thing about a secured credit card is it helps you re-establish your credit because the credit card company reports your payment history to the credit bureaus. Another good way to improve your credit is to have a relative or friend co-sign for a small loan. When you make your payments on time, it also gets reported and helps to raise your score.

The important thing to remember about credit is that it changes all the time. If your credit is bad today it will be better in 6 months and good in a few years if you get into the habit of managing your credit responsibly. A credit repair specialist can help you get started on the right path to restoring and rebuilding your credit today.

Regardless of whether it is a major or a minor life situation, most people tend to find excuses or try to put the blame on someone for the precarious situation they find themselves in. If there is nothing or no one to blame then it is "my bad luck." The moot point is that we all tend to evade responsibility for adversity.

It is no different in the case of running up a huge unmanageable debt. The most common scapegoat in that case is that piece of plastic that you carry in your wallet.

Despite the convenience that plastic money offers, the buy-now-pay-later culture associated with it has created more problems than it solves. Add to that the undue importance that we ascribe to material possessions and we have a major problem at hand.

Does the fault really lie elsewhere or should we be doing some introspection? The answer lies in the never ending tussle between what we desire and what we deserve. There is no end to desire because the moment a new toy arrives in the market we think we deserve it. Affordability is somehow relegated to the back bench: the desire rules supreme.

Financial independence requires discipline. No matter what the credit card companies say or how attractive the terms of a home or personal loan are, what matters the most is the state of your current finances and your intelligent evaluation of future prospects. It pays to think twice before you offer your credit card for swiping or sign a loan agreement.  

Let us have a brief look at why and how we are compelled to spend more than we should.

The Psychology of Debt

-    Internal Factors
It is psychology at work. Most of what we buy is basically meant for creating an impression on others and one of the primary factors behind running up a debt is the basic human trait of trying to justify even inappropriate actions, in this case extravagant purchases.

Perhaps a bigger culprit is the society that still values a person on the basis of appearance and possessions instead of moral values. Somehow or the other, that has led to a situation where the human brain has been hardwired to "keep up with the Joneses." Regardless of the difference between incomes we tend to want things of greater value than our neighbors.

The next in line are people who try to justify expenditure under the mistaken belief that they will somehow manage to pay their credit card bills in future. You have just been handed an appointment letter or are about to graduate; the very thought of landing a good job is enough for many to go on a spending spree and make irresponsible purchases. The reality dawns when the entry level job fails to finance the lifestyle that you were dreaming about.

-    External Factors
While these are intrinsic factors, there are also extrinsic factors at work that compel us to spend. Banks and other lending institutions including credit card companies have a stake in our spending habits. Their income source is not only the interest that we pay but also the commission that they get from merchants. They profit from the fact that convenience will compel us to spend more than we can afford. And for that they play on human psychology.

The credit card companies make sure that a big ticket purchase appears smaller than it actually is. They have a perfect trap laid out in the form of minimum payments. What is the USP used by credit card companies? "Why wait for something that you can buy right now." And "right now" is highlighted because they know this is something that plays the most on human psychology. Who wants to wait to earn and save? And consumers do fall into the trap when they fail to look at the bigger picture and focus only on the minimum payment.

There are many people who make timely payments and avoid paying interest or late payment charges. Credit card companies have another trap ready for such people in the form of enhancement of credit card limits. They want you to feel richer with, say, a $50,000 credit line and hope that someday you may bite the bait.

The less said about other lending companies, particularly home loan providers, the better. They come up with innovative products. One such product is interest-only mortgage where you only pay the lender a fee for providing the loan and the principal amount. The lender is basically compelling you to take a gamble while its own investment is 100% secured.

The Psychology of Money

If you want to keep out of debt, you need to understand the psychology of money. Once you have your finger on the pulse, the pulse of how to act with your money, you can get out of unhealthy spending habits. The primary thing is to realize that money is a means of buying comfort, not stress.

To keep out of debt you need to take a good look at what money means to you. The biggest mistake that we make is to correlate spending with income. It should actually be correlated with an opportunity to be comfortable. You earn to keep yourself out of stress and not to invite stress.

It can be argued that risks and rewards are two sides of the same coin. While that is true to a great extent, it is not the full story. Risk can never take precedence over stability. Staying out of debt necessitates striking a balance between the two.

The Bottom Line

While we may want to blame the media, the lending companies or an increasingly greedy society for our unmanageable debt, it is basically nobody's but our own fault. We should be wise enough to know where to draw the line, the line between what we desire, what we deserve and how much of it we can afford.

Let us all get wise and first develop the ability to spend wisely and save. Instead of investing in cars or unproductive electronic gadgets or spending in wasteful hotel stays, invest in assets that appreciate in value. The time to spend on expensive toys will come automatically when we our savings grow.

Finding yourself stressed out because you're stuck in a bad auto loan? We've done some research on the options you have as a borrower and, as always, bring the answers you need now to our blog.
According to figures published by LendingTree.com, you probably have a car loan regardless of whether or not you knew what this blog post is about because nearly three out of four Americans purchase their cars using a loan. Sounds startling? So are the rest of the statistics. The dealership auto loan business generates $500 billion dollars in loans each year – with the profits coming from sky high interest and fees charged by greedy car dealerships and lenders.

First, let's start with some of the ways us borrowers can avoid the high costs associated with auto loans and the risks we run by borrowing outside of our budget at interest rates we can't afford.  As borrowers who are in deep debt trouble, we must first recognize the behavior and actions that got us to where we are today if we are to rectify and emerge from whatever our predicament may be as a smarter, wiser consumer.

First of all, not all loans are created equally. Getting a pre-approved loan can save you precious annual percentage yield points and perhaps even lower the overall amount you'll spend on the car in the end. The other option is to sign a loan with the auto dealership that may or may not have your interests in mind at the height of your transaction with a high-pressure car salesman. With a pre-approved loan in hand, a dealership may be more inclined to make the arrangement a little sweeter for you either by beating the interest rate the bank has  approved you for or with some other discount or fee-dropping. How about those manufacturer rebates the salesman love to dangle to potential car buyers? If the rebate boasts more than $1000 cash back, take it – especially if you have the option between a rebate and 0% financing. While the absence of interest on your car loan sounds plush, less than a third of those who apply get approved and only about ten percent of buyers actually seal the deal.

You can also back your loan with the equity you own in your home (if you qualify). This loan is secured on the amount of paid up equity you own at the time of the application. Visit your bank to learn more; each loan originator or institution may have different conditions.

For the future, know that interest rates are almost always lower on new cars over used cars, and if the car is old enough, financing won't even be an option. There are many variables that exist when trying to determine whether or not the stack of papers the salesman is pushing towards your side of the table accompanied with a shiny pen is really a good deal or not. A good rule of thumb is to just know exactly what it is you're paying, and shop around! There's no reason why you should ever take the first offer from the first dealership for the first car you've think you want. Trust us: it will pay to shop around for now, and for the future.
If you're currently locked into a loan that you're unhappy with, here are some guidelines you can follow to determine what options you have going forward.
Delinquency rates among consumers with outstanding auto loans are rising, unfortunately more so in the wake of the most severe domestic and international recession the world has ever seen.  Should you find yourself facing a higher-than-expected monthly payment, you're not alone. Talk to a qualified Debt Settlement company to help you renegotiate what you can pay each month. Lenders will be willing to restructure either your payment date due or perhaps even the amount, but those talks will not happen with you. They would rather speak with a specialist who represents several clients and several loans all at once, so go ahead and ask for a free consultation with a competent debt settlement company.

Determine how much each month you can pay, structure a plan to make those payments, and above all else make sure you're being realistic – making promises and commitments you can actually keep will help you avoid bigger issues down the road. At the same time, it may be helpful to take a detailed audit of your personal finances. In what other ways are you likely spending too much money each month? While only you can determine the how and when to answer that question, the point here is that you may find it necessary to cut out the three to five meals you enjoy dining out each month if it means you'll avoid repossession due to non payment. Repossession can result in extraordinary fees and costs that will only make your situation worse; much worse in fact.
If you've got the cash and just want to get out of the sticky debt quicker, sending in as little as an extra $50 a month above and beyond your minimum payments can make a substantial difference in the amount of money and time you'll pay in the end. But borrower beware: taking out a cash advance or payday loan often comes with insane interest rates and terms and would not be a recommended option for paying down your loan.

In the end, the most influential option for borrowers who are overwhelmed by their auto loan payment would probably be refinancing. Refinancing your auto loan works the same as refinancing your home mortgage, and is nearly guaranteed to leave you with a lower interest or minimum loan repayment amounts afterwards.
In my research, I have found many "do it yourself” online programs, CD's, video tutorials, books, and other instruments for refinancing your own auto loan on websites that looked, well, let's just say less than professional. I even found a website that, among other "software” offerings, would give you a license to download a program that will allow people to open up an "auto-refinancing company” so that you can take out car loan modifications for people. I'll prefer to keep my comfortable distance from the people that own these websites, thank you.

With government and Federally-set interest rates at all-time lows to spur business and consumer lending in this dreadful economy, now really is the best time to consider auto loan refinancing. Even if you're not behind on your payments, refinancing can be a smart option for the informed borrower, but make sure you take the time to speak to a qualified company that your confident can handle the complexity of the negotiations in your favor, not the lender's.

This year there have been a record number of car repossessions because so many consumers have been unable to keep up with their auto loan payments.  Auto dealers don’t have enough room on their lots for more repossessed cars.  Banks and finance companies don’t have enough staff to handle all the paperwork.  They don’t want your vehicle.  They just want you to make your payments on time.   Most automobile owners want to keep their vehicle and avoid repossession.  They just don’t know what to do.  If you find yourself struggling to make your auto loan payment or you have skipped a month, you are not alone.  Hard economic conditions have created stressful times and hardships for many consumers.

You do have the option of keeping your vehicle, preventing repossession and saving your credit from damage.  The concept is known as auto loan modification.  The idea is to get your bank or finance company to lower your monthly auto payments to stop repossession.   However, most consumers are not familiar with the process.  Many people have the misconception that an auto loan modification will damage their credit similar to car repossession.  It’s actually the opposite.  Negotiating an auto loan modification will save your credit.  The alternative of having your vehicle repossessed is something that no one wants to have happen.  Repossession stays on your credit for seven years.  If more consumers had been aware of auto loan modifications, they probably would have explored this option so that they could have kept their vehicles and their good credit score instead of letting their vehicles get repossessed.  Regardless of the circumstances causing you to fall behind in your auto loan payments, you should investigate all your options before voluntarily giving your car back or having it repossessed.

If you are wondering if you are eligible for an auto loan modification, you probably are if you are behind in your car payments at least 60-90 days and can demonstrate you have a financial hardship.  Your bank or finance company will want to look at your paycheck stubs and your bank statement.  You need to show that you have a steady income and that right now you have a short term financial problem that you are working on solving.  Your bank/finance company just wants to make sure you can afford to pay them back.  Most of the time they are going to be sympathetic to your hardship.  Just be honest about your financial situation.  Let them know what you can afford and how the modification will help you get back on track.

   
While you could negotiate the modification with your lender or finance company on your own, most consumers would rather hire a professional company.  A debt settlement company is the perfect place to go for auto loan modification help.  The auto loan modification specialist works with your finance company/ bank to negotiate the best automobile loan modification terms for your financial situation.   Don’t be nervous about using an auto loan modification company.  They are only interested in helping you keep your vehicle.  You should take time to choose the right company, as there are some dishonest companies that prey on people in your situation by asking for large upfront fees and do nothing but take your money.  Check the company’s rating with the Better Business Bureau and ask for references.   Look for a company that has experience, a good reputation, honest, reliable and trustworthy with a proven track record of negotiating successful modifications. Avoid companies that sound too good to be true and that over promise.

An auto loan modification specialist can make your life easier by negotiating an auto, truck, RV or boat modification for you so you don’t have to worry about losing your vehicle to repossession.  Using a modification company takes the stress off of you because you don’t have to deal with your bank/finance company.  Auto loan modification specialists are skilled and trained to deal with banks/finance companies.  They can streamline the process for you because they are experts at what they do.  The quicker they get the job done, the less damage to your credit, and you can start making your modified payments again.  You can expect a more favorable outcome when you use a specialist to negotiate your modification instead of trying to do it yourself.

 
There are a number of different kinds of auto loan modifications that can be negotiated.  These options include modifying your existing loan by lowering the interest rate, trading down, selling your vehicle or refinancing.  Every person’s financial situation is different.  The auto loan modification specialist can determine what type of modification program you are eligible for and assist you with the negotiations.  Today, finance companies and banks are aware that modifications are part of doing business.  It does them no good to repossess your car because they lose money and have to spend more money trying to resell your vehicle.   It makes more sense for them to modify your existing loan by reducing your payments or even postponing them in order for you to catch up and improve your financial situation.   By working with their customers, the finance and banking industry has helped customers like you keep their cars, boats and other vehicles, and still be able to collect a loan payment from them every month.

It’s a win win situation for everyone.  
While there are some circumstances where you might lose your vehicle, you have everything to gain by hiring an auto loan modification specialist to help you keep your vehicle.   You should at least make the effort.  The alternative of losing your car and being inconvenienced is something most people want to avoid.  With the help of an auto loan modification specialist, you are taking steps in the right direction to finding a solution to keeping your vehicle and protecting your credit.   It is the best option you have, if you are willing to use it.

Mortgage modification is an option that has been helping homeowners save their homes from foreclosure. In fact, it is the most popular option that homeowners and their lenders are using right now. Lenders are overwhelmed with requests for modifications besides dealing with pre-foreclosure short sales and foreclosure sales. So rest assured they really don’t want to foreclose on your home. They would rather work out a loan modification or other option with you. Foreclosure costs them money and time.

Homeowners have been complaining the last couple years that their lenders were not cooperating or the loan modification process was taking too long. The good news is there is something you can do to get your lender to give you a quicker response and shorter turnaround time. By hiring a loan modification/debt settlement company to assist you, you can speed up the modification process and you don’t have to deal with your lender any more. The modification specialist can handle the entire process for you from beginning to end and keep you informed along the way. No more harassing phone calls, letters or notices. You can direct your lender to communicate with your loan modification specialist so you don’t have to be upset. 

Lenders are difficult when it comes to giving loan modifications. They just need to be assured that you are serious about keeping your home and making your new payments. When you work with a loan modification company, they can put together all the information your lender requires to make them comfortable with your financial situation and your ability to pay back your modified loan. Years of training and skills enable a loan modification specialist to handle any lender objections that may come up regarding your ability to repay your loan. The specialist can help you prepare the right documents so there are no mistakes and delays.

It is possible to negotiate a modification on your own, but with a loan modification specialist working for you, there is no reason to do so. Since you only get one chance at obtaining a modification, why mess it up? An expert modification specialist has established relationships with lender loss mitigation departments and their negotiators. Since you are not an expert at loan modification negotiations, you may not know who to speak to or where to send your paperwork, and your modification may never get to the right department.  Delays may cause you to lose precious time and you could even lose your home to foreclosure. There is no reason to stress yourself out and make costly mistakes when you can hire a loan modification specialist to do all the work. Also, your lender will take your loan modification request more serious if you have a professional negotiating on your behalf.

Once your specialist has your lender’s attention, the ball starts rolling in your court.  Your lender will assign a negotiator to your case. Your specialist will be in constant contact negotiating the most favorable terms for your modification. Keep in mind that there are different types of modifications. Your specialist will choose the right one for your particular financial situation so that your payments are affordable. You can expect a lower interest rate and a longer loan term. Some lenders will forgive the arrearages or add them to them to the back end of your loan, while other lenders may even reduce your principal. You can be assured that your loan modification specialist with fight for you to get you the best terms possible.
Your specialist can also refer you to an attorney who can do a forensic loan audit for you to determine if your lender violated any lending or disclosure laws at the time they made your original loan. The attorney will interview you to find out whether your lender or mortgage broker pressured you into any particular loan products, offered one product and switched it for another or did not explain all the costs associated with your loan. If the audit reveals any violations by your lender, the specialist and your attorney can use this information as leverage during the negotiations.  Lenders would rather negotiate a solution with your specialist than risk being reported for violations and be subject to fines and penalties.

The government is on your side as well. The past year or two the government has been putting a lot of pressure on loan servicers and lenders to work with their borrowers to prevent more foreclosures and further housing declines. It’s been a slow process getting the lenders on board, but progress has been made this year with the government’s HARP (refinance program), HAMP (loan modification program) and HAFA (short sale and deed in lieu of foreclosure program) to help more owner occupied primary residence homeowners obtain refinancing, a loan modification, short sale, deed in lieu of foreclosure or forbearance by streamlining the process and offering monetary incentives to all parties for participating in the programs.  The programs are voluntary and both you and your lender must participate. To be eligible, you must meet the program guidelines. Your loan modification specialist can explain them to you and advise you if you qualify for one of the government programs. Even if you don’t, your loan modification specialist will be able to find a program that meets your needs.

The worst possible choice you can make is to do nothing or walk away from your home. In fact,     Fannie Mae just released new restrictions against homeowners who can afford their mortgage payments and are upside on their mortgages and choose to just strategically default on their mortgage by walking away. Homeowners who use strategic default or don’t complete their loan modification workouts won’t be able to get another Fannie Mae mortgage for seven years from their foreclosure incident. Also, Fannie Mae will pursue a deficiency judgment in states that allow them for the difference between the foreclosure sale proceeds and what you owe on your mortgage balance. To avoid this unpleasant situation, all you have to do is work with a loan modification specialist who can negotiate with your lender a loan modification or some other alternative to foreclosure. Protecting your most valuable asset isn’t that difficult if you know where to turn for help.

There is no need for debt settlement if you are careful with your money and know how to manage your finances. But if you have been negligent and have been spending beyond your means you may have to negotiate your consumer debt.   
 
Ask any financial expert and you will be told that one should prepare a monthly budget and strive to live within one’s means. That’s all very good. It is a fact that each one of us knows very well. The problem, however, is that does that always happen? The sad reality of life is that a vast majority of the population is in debt and seeking to get out of debt one way or the other.

The question to be asked here is that why is the number of people in debt increasing despite the fact that we all know that we should be living within our means. Why is the number of bankruptcies increasing with every passing year?

This is not a treatise on the psychology of debt but if one has to get out of debt one must understand why household debts are mounting. The two most common factors involved in debt creation are:
-    Easy availability of debt.
-    The mad race for material possessions.

A distinction must be made between unsecured loans and secured loans. Consumer debt is unsecured. Home loans and auto loans are secured loans and in the event of a default the lender has the option of initiating legal proceedings to repossess the property or asset, which is collateral for the loan.

You never had it so good. Just take a look around you and you will find that you can get almost everything on credit. Every big ticket item, consumer goods, white goods, electronic gadgets are all available on easy installments. If the manufacturer does not offer it on easy monthly installments the store has an arrangement with finance companies. Besides these offers there is also the ‘old reliable’, your credit card.  

You name it and you have it. Even if you have a not so perfect credit history, you can still get whatever you want. It is just a matter of paying a bit higher interest rate. The fact that we all want the latest and the best and also more than the Jones next door doesn’t help either. There is a mad rush for whatever is new, be it the new gaming console or the latest fashion clothing.

The race for material possessions is not that big a problem as the easy availability of credit. Credit cards, initially meant to a substitute for carrying cash, have now become buy-now-pay-later tool. Pay a minimum amount and interest on the balance and you can have whatever you want within your credit limit. The irony is that if you are paying in time for so many months, your credit limit is automatically increased even if you do not apply for it. Easy credit promotes needless spending without any thought given to affordability.

Mindless spending is like digging up your own grave. Add to that the fact that there are bound to be periods of recession and you have a situation of unmanageable consumer debt. It is a problem that we create for ourselves and we alone have to find a solution for it.
 
The best part is that there is a solution for the mess we create for ourselves. If you are one of those hundreds and thousands of people in the country with an unmanageable debt situation you should first consider whether you can get out of debt without filing for bankruptcy. Regardless of the fact whether it is consumer debt or secured loans, nearly every type of debt can be renegotiated.

Debt renegotiation is different from debt consolidation. Debt consolidation focuses on clubbing together of various debts. Instead of paying multiple lenders you pay only one loan provider. It is actually a way of managing your finances in a better way. Debt settlement on the other hand is debt reduction, a direct negotiation with the lender for reducing the amount of debt.

Debt settlement or debt renegotiation, whatever name you call it by, is purely legal. The lender, which in most cases is a credit card company, settles for a lower amount. Efficient negotiation can provide debt relief up to 50% or more of the original debt or repayment at more equitable terms.

You have to look at it this way. The lender company is within its rights to initiate legal proceedings against you. You, on the other hand, can choose to file for bankruptcy. The fact is that neither option works the best for both. The lender company is interested in getting its money back or at least as much as it can get. Bankruptcy may be an option but it is a big blot on your credit history that can take years to obliterate.

However, it is not that easy as it sounds. Negotiation is a skill that not everyone possesses. Besides negotiations there is a lot of paperwork work involved. A debt settlement specialist on your side will not only work to reduce your debt but also reduce the stress involved in negotiating and paperwork. At the same time you have to be cautious of deceptive loan modification offers because there are a lot of scams in debt settlement also.
   
It is actually difficult to imagine life without credit cards. Nobody wants a debit card because it does not allow you a credit line. Debit cards allow a charge restricted to the amount you have in your bank and not beyond that.  

As I said in the beginning, there is no need to go in for debt settlement if you use your credit card responsibly and stick to budgeted expenses. However, as long as there are credit cards and credit lines, consumers will be tempted to bite more than they can chew and create debt situations from where it may be difficult to extricate themselves. Instead of facing the ignominy of bankruptcy it is much better to go in for debt settlement.

You may want to blame the recession for the debt situation you are facing. Indeed that is exactly what most people do. But the hard reality of life is that nine times out of ten it is the result of improper money management.  

A debt situation is as much about adversity, recession and bad luck as it is about mismanagement. While you need to look into the reasons why you got into a debt situation in the first place the need of the hour is to do something about it.

People who live within their means and regularly save for the rainy day tide over hard times with ease. Such people are also mentally strong and strive to work harder during recessions. In the event of a job loss, these survivors readily take up any job even if it is low paying so as to at least keep the kitchen fires burning.

The stark reality however is that we are a nation living on credit. Millions of Americans are searching for a solution for their financial problems. According to a rough estimate nearly 25% of US citizens have poor credit scores, which is the first step towards inextricable debt situations. No wonder then that there is a flood of debt settlement companies and they can all be seen on late night TV commercials.

Debt settlement is a direct approach to renegotiate with the lending company. It is an agreement between a debtor and lender that a reduced payment will be considered as full payment. A creditor will agree for a reduced amount as full payment only in a situation where a debtor has stopped paying monthly installments and the balance is increasing due to late payment charges and interest.  

Handled properly, debt settlement can indeed help you a lot to get out of debt. You can seek information about how to settle your debt from online resources and approach the credit card company on your own. Or you may choose to hire a lawyer or a debt settlement company.

 How Does Professional Debt Settlement Work

-    Creditor/s is approached for debt reduction with a lump sum in cash provided by the consumer. This is the best case scenario for debt settlement but may not be available to all due to obvious reasons.
-    The consumer builds up adequate funds over a pre determined period. The debt settlement company sets up a third party trust account. The creditor is approached for debt reduction once a reasonable figure accumulates in this account.

If you think that you have an unmanageable debt and are looking for a debt settlement company you need to ask a few questions to yourself as well as the debt settlement company.

-    If you do not have a lump sum for settlement ten you need to know the amount you will be required to save every month for build up the settlement amount. Will you be able to spare that much?
-    You also want to know where the trust account will be held. Regulations state that such an account should be a dedicated account and held in a financial institution that is not connected with the debt settlement company in any way.
-    The account should belong to you with the right to withdraw anytime midway if you want to.   
-    You could also call up the creditor and explain the situation. Normally creditors do not want to push consumers to bankruptcy. If you are lucky you may arrive at a settlement on your own.  

The positive side of professional debt settlement is that companies package their settlements with the creditors to get huge debt reductions. Moreover, professionals with debt settlement companies are experts and during the course of their business build healthy relationships with credit card companies.

The flip side is that the debt settlement process is long especially for consumers who do not have lump sum cash for settlement. Since the process may last from anything between one to three years, many people with this type of debt situation have difficulty in sticking to a structured payment process.  

Debt settlement is one those businesses that thrive in a downturn. Recently some of these companies have been trying to garner business by making tall claims. All this is set to change with the new rule approved by the Federal Trade Commission. What prompted the Federal Trade Commission to spring into action is the huge number of complaints about debt settlement companies received by the Better Business Bureau.

What has happened is that in an effort to earn big commissions marketing companies have signed up people looking to get out of debt without determining whether the debtors were good candidates for debt settlement. Most of these already harassed people have signed up for debt relief at considerable expense but instead have found their finances deteriorating even further because of the high cost of debt settlement.

The first thing to be considered before signing up for debt relief is whether a consumer’s case is fit for debt settlement or bankruptcy. The problem is that since 2005 it has become difficult for consumers to file for bankruptcy. Moreover Chapter 7 bankruptcy stays on credit history for 10 years, which can make things difficult for you: you may be refused a job particularly if it requires security clearance. This promotes many people to avoid bankruptcy and look for debt settlement.

However, the rule approved by Federal Trade Commission holds much promise for those seeking settlement of their debts through debt negotiation. It is all set to put out of business those companies that have been making dubious claims of debt reduction and success.

The most significant feature of the new rule is that debt settlement companies are barred from charging upfront fees for their services. They can charge consumers only after the debt has been settled or reduced. Still it is better that you know beforehand the overall cost of debt settlement. The rule also proscribes debt settlement companies from selecting the cases they like to portray a good success rate.

Two terms, appreciation and increased home equity will keep on cropping up frequently when you are looking to invest in a house of your own. While these are primary reasons for investing in real estate, it need not be the only consideration for investing in a home to live in.

Investment in real estate implies buying a property for reselling at a profit but buying a home is basically meant for comfortable living and the long term security it provides. One does not invest in a home with the idea of reselling. But the irony is that USP of real estate agents usually focuses on investing in a ‘dream house’ even if amounts to taking a home loan that you can ill afford to repay. The punch line is that one can always sell because of appreciation and increased home equity.

I would like you to ponder here and think: does anyone buy his or her dream home with the thought of selling it?

What is even worse is that the terms, appreciation and home equity are not properly understood by a vast majority of gullible first time home owners.

-    Appreciation
Appreciation is the increase in value of the property. While people normally talk about the value of their house having appreciated, the truth is that the appreciation is only in the price of land. The value of your house doesn’t appreciate, it actually depreciates. Despite your meticulous attention to repair and maintenance of your house, its value is not going to appreciate. It is the land on which it is built that appreciates in value.

-    Home Equity
Equity is ownership interest. You may have bought your house for $100, 000 but your equity is the present market value of the asset. In the event you have any claims against it, for example a mortgage, then your equity is market value less the amount you owe on your mortgage. If your house property is presently worth $150,000 and you still owe $70,000 on your mortgage, your equity is $80,000.  Increased equity works out like this.

Suppose you had paid $20,000 as down payment and borrowed $80,000. You still owe $70,000 to the lender, which means you have paid $10,000 as principal plus interest. Let us assume the interest element till date to be $5,000.

This means that you have paid $20,000 (down payment) plus $10,000 (principal paid back) plus $5,000, which equals $35,000. If you were to sell your home now for $150,000, the lender gets $70,000 out of it and you get $80,000. So your notional profit is $80,000 minus $35,000 or $ 45,000. It is notional because it doesn’t always work out like that. When you are in a hurry to sell you never get the market price for your property.

Buying a house simply on the basis of expected appreciation and increase in home equity is fraught with danger due to other reasons as well.
-    You may buy property in the most posh area of the city and still not experience any appreciation in land price. There is a strong possibility that the price of land in prime locations has already appreciated to optimal levels leaving little or no scope of future appreciation.
-    Land prices are very sensitive to change in the political, economic and social scene.
-    It is a misnomer that land prices always appreciate. The reality is that land prices move in cycles. Only expert realtors know the current cyclic phase and they are hardly likely to share such information with a naïve first time homeowner.

The only criterion for buying a home should be your ability to pay for it. If you think that you have adequate funds for the down payment and you will somehow manage to pay monthly installments of home loan then you are buying trouble for yourself.

Home loans are secured loans. Many home loan providers will readily approve your loan application even if you have a not-so-perfect credit history, albeit with a higher rate of interest. But are you ready to bear the burden? The lending company has the option of foreclosure but what are your options?

The recent subprime crisis in USA should be an eye-opener for everyone looking to buy a home without doing proper homework. Loan applications are easy to fill up and getting home loans sanctioned is easier than other personal loans. The most difficult part in home loan, as with any other loan, is repayment.

Before deciding to buy your dream home and signing on the dotted line for a mortgage make sure that you have done the figures properly and accurately. It requires taking into account your present income; the inflation factor, expected future income, existing monthly commitments and any increase in expenses, for example due to a decision to start a family. You cannot afford to be negligent on this count. Any laxity in this regard may see you facing foreclosure proceedings earlier than you think.

It is advisable that you buy your home only when you are sure that you have the wherewithal to meet your monthly commitments, including payments for the home loan you are contemplating. Ideally, your present and expected future income should allow creation of an emergency fund as well.

The sad part is that we all tend to get lured by marketers and do take decisions in a hurry. There is also an element of misfortune involved. No one knows what surprises life has in store for us. Despite proper homework and due diligence, adversity does strike when we least expect it to.

In the unlikely event of a foreclosure notice you have several options available to you to stop it. Don’t think that it is the end of the world because it is possible to prevent a foreclosure. What you require to do is to take timely action before the lending company closes the door for negotiations. Hire a reputable professional and learn about foreclosure prevention. Get your home loan modified and bide your time till things change for the better.

As a first time home buyer it is a dream come true and you are naturally concerned that everything goes well with the choice of property, title transfer and finance. Thanks to the drop in real estate prices and recent developments in the housing finance industry you need to be more careful now than ever before.

It is a great decision to buy a home or apartment. If you have found a place you would like to spend the rest of your life in then you are most likely to make every effort to try and find ways and means to own it. It is also a reality that the biggest hurdle in owning a dream home is finding money for down payment and large monthly installments.

Home loan is what every aspiring home owner looks up to for finance needs. Home finance is also one of the easiest loans to get. The reason is obvious. Home loans are secured loans as the lender holds a mortgage over your house. As a borrower, the entire risk is yours because the moment you miss those monthly payments, you are liable to pay penal charges along with accrued interest on delayed payments. And if you didn't do your homework properly and default on payments you run the risk of facing a foreclosure.

It pays to be careful about the type of home loan you sign for. It may appear to you that one home loan is as good as another but it is not like that at all. Before you sign on the dotted line you should understand the terms you are agreeing to. Failing to read the fine print can prove to be costly.

Credit Score
Your eagerness to own a house is understandable but being cautious pays in the long run. No matter how attractive the deal appears to be, never buy a home in a hurry. If you are looking for home finance your credit score is the most important thing. For getting the best deal, your credit has to be almost perfect. With a low credit score you run the risk of falling into a trap. Bad credit ranking means that your options are limited. Reputed home loan providers and banks prefer not to deal with people with bad credit scores.

Less than perfect credit score means having to choose a less than perfect home loan provider. It also exposes you to the risk of mortgage scams. Never ever go a mortgage loan where the lender is promising a great deal but asks for an upfront deposit because of your bad credit history.
 
As mentioned earlier, home loans are secured loans and the lender's risk is limited to your ability to repay, which is determined by your credit history. If you have a near perfect credit score you can expect that you may even be offered a home loan without the need for making a down payment and that too at low interest rates.

If for any reason your credit score is on the lower side then take time to set the matters right even if it means waiting for a year or so.

How Much Can You Afford
All said and done, it all depends upon how much you can afford to pay. While down payments have to come from your savings, your affordability, the amount of money you can afford to pay every month, depends upon your income less monthly commitments, cost of living and your need to save. 

One of the common mistakes that people commit is that while they take into account incremental income they fail to allow for inflation and the need for creating an emergency fund. While cost of living is bound to increase, increase in income may not always happen on expected lines.  

Rent Vs Ownership
Owning a home is a part of the great American dream but dreams come true at a cost. You need to prepare for home ownership and that requires a fair amount of money management.

Apply your mind and do some calculations. You may be better off paying rent than owning your own home. Home ownership involves a lot more things than down and monthly payments. Along with the cost of the property you also pay interest, property tax and repairs.

Your decision to buy a house should never be based on frivolous justifications. Don't try to justify your decision on the basis of appreciation in value of the property thinking that you can avail of refinance or second mortgage.

Remember that appreciation has a meaning only when you sell your house. It doesn't make sense to take a loan for a house that you think you will sell if you face problems with loan repayments. Keep in mind that selling property at the current market price requires time, which may not be on your side. And if the lender takes over, you are liable to get even less.

Despite everything, misfortunes do happen. You may have done your calculations right and gotten the best deal on your home loan but life situations are known to take an unforeseen turn. What if despite your best efforts you are unable to pay the installments on your home loan?

The first thing is to not to panic. Keep your calm and look at the options available to you. It is also important not to let matters get out of hand. Take prompt action as soon as you realize that you cannot meet your monthly commitment.

Although the loan is secured against the property, lenders would rather negotiate than initiate foreclosure. Lenders are wary of taking possession of the property because of the hassles involved in it.

There are ways to get your home loan modified. Try talking to the lending company directly or take advantage of a professional debt settlement company to get loan payments rescheduled and/or a reduction in interest. In dire circumstances you may be advised to opt for a short sale, which allows you to retain the proceeds of the sale less the amount due to the lender.

Lake Worth, FL - August 18, 2010/Reliance, Inc./- Reliance, Inc. a leading full service financial services company, today announced that the company was named to the prestigious Inc. 500, a compendium of the fastest growing private companies in America.

Reliance, Inc. CEO Richard Rodriguez commented on the award: "As an entrepreneur hard work and success do not always go hand in hand but when they do, the rewards can be outstanding. Inc. Magazine is the authority for business and being honored by such a prestigious institute with those that came before us such as Microsoft, Intuit and Oracle is a crowning achievement that we are extremely proud of and honored by. I am extremely thankful to our team and clients who have made this possible."

This year, Reliance, Inc. placed in the top 500 at #452 out of the millions of privately held companies in the United States, with a phenomenal growth rate of 636%. We were able to achieve success in this economy be adhering to our company motto and driving principal "Get every American out of debt". The previous decade of buy and pay later attributed to the world's economic situation which we are now paying dearly for and is the opportunity that Reliance, Inc. has capitalized on. Mr. Rodriguez continued with, "Unfortunately America is in dire need of financial education and assistance and being able to help even just one family realize debt relief is one step closer to building our great nation back to where it once was."

About Reliance, Inc.

Reliance, Inc. is an established Christian based full service financial services company located in Lake Worth, Florida specializing in Debt Settlement, Foreclosure Prevention, Loan Modifications, Auto Loan Modifications, Credit Restoration, Debt Management, IRS Tax Relief and Mortgage Services.

Contact:
Richard Rodriguez, CEO
Reliance, Inc.
Phone: 561-967-5066
info@re-lianceinc.com
http://www.re-lianceinc.com

A sweeping financial reform bill has been passed and signed into law by our President and Congress. We’ll break down how the law will protect you, the consumer.

Since taking office in January of 2010, President Barack Obama has been urging Congress to work collaboratively on sweeping new bills that promises to rein change into the financial services system and pave the way for our countries long-term prosperity and growth. The first big piece of legislation that passed was an overhaul of the America’s health care system. Whether or not it was needed or appropriate is a matter of opinion; what the law will actually do for every citizen in this country is fact. By 2014, states will be required to establish public markets that allow for our citizens access to low-cost, adequate health insurance, and each of us will be obliged to do so or face some tax consequence or minor fine.

Despite record high unemployment and a fiscal overseas war on terrorism in countries we’ve been engaged in (and many say losing) for ten years now, at the encouragement of President Obama Congress focused its energies and time in passing a sweeping new financial reform bill. After more than a year in the works, this month both sides of congress approved a version of the new bill that finally made it to the President’s desk just before he ceremoniously signed into law yesterday.

While the bill was being debated, edited, and re-written in Washington by congressional Democrats and Republicans that fought like wild cats and dogs in a highly-publicized center arena, the proposals of the bill were gaining most of the press notoriety. Particularly, the make-up of the bill focused around what would be called the Bureau  of Consumer Financial Protection, or BCFP, that would be charged with reigning in shady and coercive financial products and practices offered by banks, creditors, and other financial services that preyed on unwitting consumers.  Who will head the BCFP is still unclear; however the goals of the new government agency are very clear (and so too is the need for this kind of regulation).

The Restoring American Financial Stability Act has created this new, independent agency within the Federal Reserve to protect borrowers against abuses in mortgage, credit card and other types of lending. The bill gives new authority to the federal government to seize and wind down large, troubled financial firms to end the possibility that taxpayers would have to pay to bail out those firms, effectively bringing an end to the unpopular bank bailouts of 2008. Further, it sets up a council of federal regulators to identify and assess threats to the financial system. The bill enacts many other protective measures aimed at banks, payday lenders, and yes, even debt settlement companies.

The need for change

To think it would all stem from the American dream was unthought-of. Understanding why the financial reform bill was needed for citizens, individual investors, companies, and our economy requires a brief but interesting history lesson. First of all, consumers who sought credit to purchase goods and services, homes, or cars on or before 2006 found themselves facing few barriers. Credit thrived, especially among consumers who sought to purchase big ticket items like homes. The easy credit was a direct result of long-term interest rates and sub-prime lending. Sub-prime lending could be thought of as “undesirable” lending, because the borrowers at the time think they can afford the payments (remember those low-interest rates I just mentioned?) but really couldn’t, and the lenders thought they could make up the difference but using “adjustable-rate mortgages” – high-dollar mortgages whose rates would adjust to a higher rate later on, which would go on to eventually serve as the gunpowder for the housing bomb. Because home prices were driven up by artificial interest rates, those levels became an unsustainable bubble. What happened next was in the worst recession America has ever experienced, characterized by a crippled housing, credit, jobs, and financial market that has yet to fully recover.

That’s enough lessons for now. The purpose of this article is to introduce what measures in the new financial reform bill apply to you, your credit situation, and what benefits you could soon take advantage of.

In addition to creating the new BCFP to protect consumers from questionable financial practices among banks, the new financial reform bill targets credit card companies and lenders as well. The bill calls for retail companies as well as convenience stores, gas stations, and other providers who use merchant services (a merchant service makes your credit card purchase at the check-out counter happen by being the go-between for the credit card company and the retailer you’re purchasing from and charges a fee for that service to the retailer, called an “interchange” fee) to drop minimum credit card purchase amounts that exceed $10.

Next, if you owe money to a school (your paying your child’s tuition, for example) or to the government (paying off a speeding ticket), the amount of the total you owe can have a cap on it. For example, if you charge $4,000 to your credit card for books and tuition during your child’s first year at college the school may in the future say you can only pay $2,000 on credit; the other $2,000 would be required to be paid in cash. The reason being is the schools and the government brings in millions and billions of dollars each year, resulting in huge interchange fees. This is good news for those that overextend their credit. Think about it: if you only had cash available to pay for goods and services, how much less “stuff” would you buy?

Retailers will also be permitted to offer incentives for customers using debit rather than credit cards. The interchange rates on debit cards sometimes command an industry high 2% of the total charge. The bill could put the Federal Government in charge of these rates, who would be expected to lower those interchange rates significantly. Retailers prefer to pay those lower debit card rates and would incentivize buyers to shun their credit cards, perhaps changing the way consumers choose how and what to buy.

Lastly, debt consolidation and settlement companies could for the first time come under regulation by the Federal Government in an effort to make changes to some of the business practices of the organizations that operate in the so-called “fringe” industry. Settlement companies in particular have come under political and controversial fire for unfair practices relating to charging high up-front fees while producing dubious results. The Debt Settlement Consumer Protection Act that was incorporated into the final bill takes measures and steps to target the dishonest practitioners that plague the settlement industry and create an unfair and contagious image for legitimate firms.

The DSCPA would cap upfront fees at $50. In addition, the only other fees allowed would be contingent fees limited to 10% of savings. So, for example, let’s say a consumer has $30,000 in credit card debt, and if he or she were able to settle that debt for 50% of that amount, the savings would be $15,000 and the total permissible fee would be $1550 (10% of savings, or $1500, and $50 upfront).

When the dust settles, the end result will be to weed out and eliminate companies who do not have the consumer or client’s best interest in mind, paving the way for prosperity between the disenfranchised borrow under heavy debt and the companies that can truly help.

Foreclosure prevention is your best option if you're behind on your payments and want to keep your home, but it can get tricky. Learn the DO's and DO NOT'S or loan modifications.

The Great Recession of 2007, as it will undoubtedly go down in academic history books for future generations of finance students to study for years to come, destroyed many of the faucets that act as a pillar to support the American and world economy. Without getting too deep into a boring lecture, it's important for homeowners who are facing or narrowly avoiding foreclosure to understand how and why our country is in such a dire and appalling financial position today. 

Employment

To date, the recession has unemployed around 14.6 million people, according to data I pulled from the Bureau of Labor Statistics “Employment Situation” report, released June 2nd, 2010. See, jobs drive the economy because when people are working, people are spending. Their spending money on groceries, toys, electronics, cars, appliances, food, and more – all products that drive the Gross Domestic Product, or GDP. The GDP is literally a measure (in dollar figures) of the amount of goods a country produces in a year. If a country is producing a high GDP number, that's good – the economy and wealth of the country is expanding. If GDP is slowing, however, the economy and wealth of a country is contracting, which will have an immediate and material negative impact on governments and businesses across the country. So a spike in unemployment is directly related to a dip in home prices (because a dip in home prices is directly related to a spike in foreclosure rates). Confused? Don't be. Let's take a deeper look at housing.

Housing

Housing is one of the fundamental principles or pillars that drive a flourishing and prosperous economy, here and around the world. The reason being is because

historically, home values have always risen as the economy grows and expands, both at a steady pace. These steady rises are optimal for the long-term affluence of a stable economy; however, this past decade gave new found attention to a dangerous condition in which the market for a particular asset (the housing market in this example) overheats and expands too rapidly beyond the standard parameters of growth, and thus becomes a “bubble”.  When the housing bubble popped in 2008, the world's largest and most powerful economies shook and faltered. The media and investors, employees, company executives, government officials, and economists were consumed with fear and uncertainty. The housing boom and bust of this decade was unique in that it was due to subprime mortgages (record amounts of mortgages with exotic terms being originated and loaned to borrowers who really couldn't afford them, and then distributed to investors who had yet to know they didn't really want them). So as prices for home skyrocketed all over the country and simultaneously demand began to fall, the gap between supply and demand created a bubble that when popped, triggered one of the deepest recessions the world had ever seen.

The economies of the most developed nations will recover, sure, but likely not for a long time. In America, our economic recovery is going to be heavily dependent on the health of our small and large businesses (and thus employment) and stabilizing housing prices. Experts agree we likely will not see a significant decrease of any desirable or healthy level in unemployment until at least 2012, and there are no accurate estimates for when housing prices will return to pre-bubble or normal levels. So what can homeowners do in the meantime?

Foreclosure Prevention, homeowner's rights, and avoiding fraud: the Do's and Don'ts

If you're a homeowner facing the very real possibility of foreclosure now or in the near future, you very well may qualify for and benefit from foreclosure prevention services and programs. But it can get tricky; many time the services of the mortgage (the organization you give your mortgage payment to) may or may not be interested in renegotiating your contract because they are not the originators of the mortgage. It's best to consult a qualified, professional foreclosure services company.

DO: consider that mortgage servicers aren't interested in losing money. One in every seventeen homes in America is in danger of or already is in foreclosure, so you're not alone. In the beginning of the recession, mortgage companies were not really interested in reconstructing payments or adjusting mortgage terms and rates, but all that has changed. The economic stimulus packages passed by Congress in 2009 gave incentives to the banks that you borrowed from to buy your home to work you if you were behind or were about to be behind on payments.

DON'T: go about it alone. Banks and lenders have no interest in talking to home borrowers who are delinquent on their payments directly; they prefer to negotiate with foreclosure prevention professionals who represent many clients who are serviced by the same processor or bank.

DO: apply for a Loan Modification. In a mortgage loan modification, you and your servicer agree to permanently change one or more of the mortgage's terms to make the payments more manageable for you. The changes could include reducing the interest rate, extending the term of the loan, forbear-ing (interest free) or forgiving principal, or a combination of these factors. Again, consult a foreclosure prevention specialist or professional to discuss the process of applying for a loan modification.

DON'T: wait! The longer you let your mortgage become delinquent, the less likely the bank or servicer will be willing to work with you. Waiting will only exasperate your problems, not solve them!

DO: avoid, at all costs, illegitimate and fraudulent companies that promise the world to you in return for a steep, often high pressured up-front fee. Take your time and conduct due diligence to be confident the firm you hire is going to deliver real results and that you're dealing with a competent and reliable foreclosure prevention professional with your best interests in mind.

Hundreds of thousands of Americans are delinquent on their tax payments and face ugly consequences should they decide to not file or not pay up. You need to know that there are solutions.

When it comes to owing the Internal Revenue Service money, the patriotic American icon Uncle Sam seems to shift into something that resembles someone more like Cousin Vinny. The tax and revenue collection system in the United States is very complex and confusing, and it certainly doesn't help that each year the tax laws that comprise the system are constantly changing. That means that each year, you as an individual should be brushing up on the highlighted changes that could adversely affect you.

But let's not discredit the infamous history of the IRS, its offices, and the benefits we as taxpayers enjoy because of our contributions. The IRS, under the supervision and direction of the U.S. Treasury Department, collects revenue for the government and ensures that the laws of the tax code are followed accordingly.

That's right, you pay to live here and thus reap the benefits of American citizenship and safe, habitable cities. And be careful not to cut those benefits short; for as much as we grumble about the IRS and their influence, let's be grateful. We have public schools that educate our children; we have roads to drive our cars on, and bridges to help us across the intercostals; and we have all the rights we could ever reasonably ask for guaranteed by the country's constitution. Would it be accurate to assume that Somalia is a great place to live because there are no taxes?

A government tax and revenue collecting system are the necessary dues we pay to enjoy the benefits of living in a humane, organized, and functioning society. Benjamin Franklin famously said, “The only things certain in life are death and taxes”; it was true two-hundred and twenty years ago, and its true today.

Let's get into the meat of what this article is really about. If you owe or are sure you will owe money to the IRS in the future, understand that your failure to pay is accompanied by serious consequences.

Should you decide to not file your tax return (or miss the April 15th deadline), the consequences can be:

• If you fail to file your tax return in any given year, you can be penalized at 47.5% interest on the total amount you owe!
• The 47.5% composition is comprised of a 22.5% penalty for late filing, and 25% of the total. This is MASSIVE – worse than any credit card interest rates you'll ever experience.
• Fees, fees, and more fees. Late fees, installation fees, negotiation fees, consultation fees, application fees, and it will go on and on…
• The IRS will eventually send you a “Substitute for Return” letter, in which the IRS is basically informing you they have taken the liberty to calculate an estimation of what you owe, and now want a payment.
• Should you continue to evade, a tax agent officer, or worse, a specialized tax agent officer will be tracking you down and knocking on your door.

If you can't file your taxes by the 15th, that's ok. You can request an extension to file, when the new deadline to file will typically be a few months after. If you have to pay and just don't have the money or any other choice, consider charging your credit card (assuming you've been financially responsible with your card and you're not overwhelmed in debt). Charging your credit card may seem irresponsible, and in fact, it is. But the point is that the worst thing you can possibly do in any or all of these situations is nothing.

Let's say you filed on time but simply haven't paid. Depending on many variable factors that include how long you've owed and whether or not you have owed in the past, the consequences can be financially dire.

• Rest assured the IRS tax officer will be in contact with you shortly! These collection officers are designated to you specifically whose sole purpose is to get you to pay.
• The IRS can hold you responsible for taxes owed for up to ten years.
• Criminal tax evasion charges can be brought on in the most extreme cases. The IRS has the full authority to seize cars, businesses, homes, assets, bank accounts, garnish your wages, and then send you to prison.
• Once you've been pegged for an audit, not filing, or not paying, you will be a target for years to come, regardless of the outcome of your current problems.

Because of the complexities shrouded in between the tax laws and penalty system within the IRS, consulting with the IRS directly is probably not in your best interest. They will work with you, but not on your terms.

Your best chances for renegotiating or settling the debt owed to the IRS satisfactorily lie with who you hire to represent you. There are many debt settlement companies that offer tax relief, but there are a few things you need to look for to ensure you want to hire a qualified, reliable firm.

• Experience matters. Tax relief and settlement representatives often work with the same IRS representatives year after year. Make sure the firm you're hiring is rich with experience; look for former IRS employees, tax professionals and public accountants with more 10 years or more on their belt.
• You want to a hire a firm with proven track records. Don't be afraid to ask for what kind of results you can expect and for the firm to prove it. You want to make sure this firm has been able to stop fee levying, reduce or eliminate accrued penalties, and settle your debt to the IRS for a fraction of what is owed.
• Ask the firm for a free consultation and what their fees are. Compare different firm's fees; are you more comfortable paying a flat fee or a percentage of the savings the firm was able settle?

With these guidelines, take some time and begin considering your options. The only guarantee you have (besides death and takes) is that when it comes to owing debts, the more you do nothing, the worse your problems will get.

Here's a couple of other great tax quotes to go out on:

Death and taxes may be inevitable, but they shouldn't be related. ~J.C. Watts,Jr.

I am thankful for the taxes I pay because it means that I'm employed. ~Nancie J. Carmody

Of course the truth is that the congresspersons are too busy raising campaign money to read the laws they pass. The laws are written by staff tax nerds who can put pretty much any wording they want in there. I bet that if you actually read the entire vastness of the U.S. Tax Code, you'd find at least one sex scene ("'Yes, yes, YES!' moaned Vanessa as Lance, his taut body moist with moisture, again and again depreciated her adjusted gross rate of annualized fiscal debenture"). ~Dave Barry

Why pay for loan modification representation?

Re-Liance, inc. is constantly evolving its' understanding of the changing and unpredictable economic climate. We offer our expertise, consistent facilitation and the sharpest tools / skills to negotiate the best loan modification in all possible ways. We continually study the rules and barriers to achieving an optimum result, while mitigating the confusion and frustration inherent in dealing with the lenders directly.

a washington post article wrote "that when the homeowner modifies a loan without a substantial decline in their monthly payment, the default rate is very high".

We believe homeowners need aggressive solutions and consistent intervention using a team of experts to help maintain economic stability. given the winding road homeowners will travel during cycles of the economy over the next few years while regaining stability and growth; re-liance inc, will have the foresight and tenacity to support each and every client that contracts with us to examine and explore all possible options for stability.

You can be assured that the best loan modification available to the homeowner will occur because we have put together the most comprehensive financial package to present to your lender / servicer / investor. We will arduously pursue answers and solutions during the negotiation process as your expert advocate during this time of hardship.

Lenders and loan servicers tend to be more attentive to a sophisticated firm negotiating on behalf of a homeowner. it is important to understand that the lenders / servicers / investors represent their own self-interest when negotiating with the homeowner. an experienced third party negotiator that is knowledgeable about the current regulatory environment and with the myriad of modification programs available (hamp and other lender specific in-house programs), has the best chance to reach a favorable settlement.

When a homeowner approaches their lender (or vice versa) for a loan modification, they may be entering into a trial period agreement that will last from 3 - 6 months. this is a temporary contract with the lender and evaluates the borrower’s ability to maintain a modification agreement before offering a permanent solution. this has now become a two phase negotiation process that forestalls the homeowner from reaching an optimum modification, even if it is available. during this trial period, all financials with fluctuations in the homeowner's situation has to be carefully documented and re-presented (often repeatedly) to the lender in order to maintain long term relief.

Currently, the percentage of permanent modifications offered to homeowners is extremely low. a third party advocate has the knowledge and experience to manage the complexity of the paperwork required and prolonged negotiation process, which will increase the odds and decrease the stress of achieving a favorable result.

We utilize the same npv (net present value) analysis that lenders /servicers use to determine the cost / benefit of modification versus foreclosure. this valuable software gives us the edge in seeing how the modification can best suit the client and helps us strategize recourse of action if the lender is not in alignment with the analysis that best benefits the homeowner.

Even when contracting with re-liance inc. as your third party advocate, a trial period is offered in more and more cases. we are committed to the homeowner throughout the trial period and maintain the case file until long-term clarity is realized; permanent loan modification terms or otherwise. if a change in the economic environment within your own situation or the situations within the bank occurs, we will guide and facilitate all possible options for financial relief. we will not abandon you or the process of your advocacy. experienced negotiators can stop / postpone a foreclosure process. we would prefer a minimum of two weeks before the auction foreclosure sale date.

The government has estimated that at least 7,000,000 to 9,000,000 homeowners will need financial relief in order to save their homes. the sheer volume has encumbered the lender / servicer’s ability to address each homeowner in a timely, effective and/or satisfying manner.

There are critical segments to a successful process that can easily disqualify a homeowner from achieving a successful modification, let alone qualify for one: each homeowner's existing mortgage note and term requires new underwriting on a case by case basis, so a homeowner is in essence performing the job of a professional mortgage broker or loan originator in putting together the comprehensive and consistent data necessary to negotiate a trial period and subsequent long-term solution.

The financial analysis that goes into presenting each case is critical in demonstrating the fine line between enough hardship to qualify and the ability to maintain the monthly trial period payments so a permanent solution can even be considered. the verifiable financials presented will be important in qualifying and monitoring swings in income and can disqualify a modification candidate at any time.

The bank or servicer of the mortgage has shown a consistent problem in getting paperwork from the homeowner in a timely and accurate way. it is a well known problem in the industry that the bank or servicer "loses" paperwork all the time. this problem is conveniently hard to correct because there is not a way to track accountability on the bank / servicer's end, so many repeated requests have to be honored to resubmit in a timely way the same or updated paperwork again and again. the bank / servicer have no obligation to tell you if any paperwork is outstanding and has been used consistently as a reason for disqualification.

Our firm has paid close attention to state guidelines for compliance as well as honor their primary adherence to federal and legal requirements as they emerge. The FTC will be creating new rules and regulations for the modification industry in june 2010, so we will be keeping a close eye on the new federal guidelines.

An experienced negotiator already knows how to work within the system and continuously evolves as the process changes. in many cases, the professional negotiator has established relationships with the lending institutions and loan servicers.

It is in the homeowners best interest to work with professionals with expertise because many of the lenders or loan servicers are more responsive when communicating with a law firm / advocates because they know we are more willing to challenge the lender, state and federal agencies to protect the client rights.

Unless the homeowner has the knowledge themselves and competency, as well as the time and energy to represent their case, it makes sense to let a professional / legal representative negotiate a modification on their behalf. Most people do not represent themselves in court, for example, if they want the best possible outcome. Our negotiators may need to re-negotiate with the lender or servicer multiple times before accepting a result. we do not stop negotiating even if the initial modification proposal has been denied. we re-approach the lender / servicer with other programs we are aware of that may not be owned or guaranteed by fannie mae or freddie mac (non-gse) and work with investor specific programs. there are many modification programs our negotiators are aware of that the homeowner is "in the dark" about, and unfortunately, this advantage on the lender / servicer / investor's part is leveraged against them.

French Fries, Credit Cards, and Debt Psychology: The Behavioral Economics of Small Decisions

The Tyranny of Small Decisions

How do two French fries weigh 40 pounds?
 
•    Putting on 40 pounds over 10 years means gaining an average of four pounds per year
•    40 pounds divided by 10 years equals 4 pounds per year
•    4 pounds divided by 12 months equals .33 (1/3) of a pound per month. 
•    This is approximately 1/100th of a pound per day (1/3 pound divided by 30 days) 
•    One pound of stored fat represents 3500 calories
•     3500 times 1/100 equals 35
•    To achieve the feat of gaining 40 pounds in 10 years, all you have to do is consume  an extra 35 calories every day.
•    35 calories = two regular French fries
Little things count.

Economist Alfred Kahn described how we become trapped by the series of seemingly insignificant choices that we make – the tyranny of small decisions.    And, if we were able to see ahead to the end results of those small decisions, we may chart an entirely different course.

If you are burdened by credit card debt, it probably wasn’t one huge purchase that created the problem.  More likely, it was hundreds of small decisions, all along the way.  Some were necessary, some justified, some rationalized.  “It’s just a couple of French fries” thinking.  Internal bargaining took care of others: “Just this one time” or “I’ll pay it off next month.”  Segmentation of the pleasure of the purchase from the pain of payment obviated any lingering questions. 

The Nobility of Small Decisions

Consider the inverse: the nobility of small decisions. 

We recognize in parenting, from the very beginning, that we really don’t know which interactions or words will be really important, or even remembered.  Knowing that we don’t know, we have to assume that everything we do is important.  Everything matters.

Consider the very small decision of stopping for a $4 coffee each day.  Calculate how much that is per year.  With interest, how much it would be in ten years.  In twenty years.

Epictetus asked twenty centuries ago: “What is a good person?”  The one, he reflected, who achieves tranquility by having formed the habit of asking on every occasion, “What is the right thing to do now?” 

You can be held hostage by small decisions.  Or, you can be effective, achieve mastery, and freedom by small decisions. 

All you have to do in life is the next right thing.