Wednesday, May 23, 2007

Debt Elimination Starts With Credit Cards According To ChristiaNet (, the world's largest Christian portal with twelve million monthly page loads, offers valuable information to readers about the best ways to get started with debt elimination. Now that the holidays are over many consumers find their mailboxes filled with bills from purchases made with credit cards. Creditors send out numerous offers to consumers during the holidays for the purpose of enticing them to buy now and pay later. Unfortunately most of these offers involve high interest and various other fees that make it hard to pay off balances. President Bill Cooper, with, offers some advice to consumers, "The best way to tackle debt elimination is to start by making more than the minimum monthly payment on charge accounts." (

Various ideas towards debt elimination have been provided by readers from ChristiaNet. One person suggests, "Refrain from some non-essential activities for a short period of time and use that money to make debt payments." Non-essential activities might include anything that is not a necessity. Make a list of activities or expenses that can be eliminated until credit cards are paid off. Consider canceling cable services and other entertainment related activities.

Accumulating debt should serve as a learning experience for consumers to do things differently in the future pertaining to gift giving and making purchases on credit cards. A concerned Believer on ChristiaNet said, "Use cards for emergencies only, use cash for everything, don't spend beyond your means." Educate yourself on the tactics used by banks and finance companies to entice consumers to accept offers that lead to indebtedness. Live on a realistic budget by listing debts in relation to income.

While there are many ways to tackle debt, choosing the right one may be confusing. Some of these include consolidation, negotiation, obtaining a home equity loan, counseling, and others. Christian services are available to consumers and some offer free advice. Bankruptcy is more difficult for consumers to qualify for because of changes in the law and there are companies out there that offer unrealistic promises that ultimately cannot be delivered. Some services promise negotiation with creditors for lower interest rates and lower balance payoffs. However, consumers can do these negotiations themselves without paying a fee for services. For more information, visit:

Thursday, May 10, 2007

Foreclosure - What Can We Expect

With the wealth of information and statistics flooding the market it's surprising to see that homeowners are not preparing themselves a little better. A study recently conducted by the Center for Responsible Lending predicts that 1 in 5 subprime loans issued in the past two years will enter some stage of foreclosure. This will be an estimated $164 billion cost to homeowners.

In addition to subprime loans, another driving force is the housing market, appreciation has come to a complete standstill in some states and some states are entering the negative zone. This is going to have a bad effect on the housing market as a whole and is only going to increase the quantity of foreclosures in the coming year.

With homeowners doing their homework on the foreclosure rates and different loan types contributing to this increase, they are less willing to try these creative loans methods that were common in 2005. Lenders are being warned to be more selective when reviewing the initial loan application to ensure that the homeowner can afford the loan 2 years from now. This foreclosure epidemic is having a negative impact on the mortgage industry as well as all other real estate professionals that are not working in the foreclosure arena.

Looking ahead and 2007 the foreclosure rate is expected to double from 2006. With 1.4 million homes entering some stage of foreclosure in 2006 that means that almost 3 million foreclosures are expected.

These predictions are grim to say the least. Not only for American homeowners grasping to their "American Dream" but also for those real estate and mortgage professionals not offering foreclosure prevention type alternatives. On the other hand there are some real estate agents and mortgage brokers that have realized that adding foreclosure prevention type services is not only going to increase their bottom line but insure that these clients of theirs come back themselves and refer others as well. Diversity in the real estate and mortgage industry is a must coming into 2007. Without the ability and foresight to diversify, incomes for these professionals are going to feel a strong pinch in the coming years.

There are companies that offer partnership and/or training on foreclosure prevention alternatives and they are seeing a flood of brokers and agents stepping up to the plate. In a recent interview with the president of Freedom Foreclosure Prevention Services, LLC, Jeff Segal, he stated "It's not only imperative for mortgage and real estate professionals to add to their current services, come 2007 it will be absolutely necessary if they want to survive this injured market. In the past six months our company has developed a unique partnership program that works well for these professionals to offer services and actually experience relief in this economical whirlwind we have all been experiencing. If they have clients coming to their front door that are facing foreclosure and they can't offer a solution, they send these clients away and will never lay eyes on them again or their business. If they are able to offer a viable and ethical solution, even if they are just referring them to someone, they are securing that client's rapport, business and the most powerful advertiser still today - word of mouth referrals. Its time they realized that diversification is going to be the life raft of 2007 for most of these folks."

He has created a unique opportunity for real estate and non real estate professionals so they can expand their current services and offer foreclosure prevention assistance.

It is refreshing to know that there are still people out there looking out for the homeowners. Hopefully, in 2007, we will see more Americans helping Americans. It's the only way to survive the market that lies ahead without losing sleep over possible unethical practices just to stay afloat. As a nation it is important to stand together through this foreclosure epidemic and fight back for our fellow Americans.

For more information on Foreclosure Prevention Service, you can click here.

Tuesday, May 8, 2007

The Debt Elimination Dilema

The total American consumer debt reached $2.4 trillion in 2006.

There are literally hundreds of ways to eliminate your debt. You can't turn on the TV, listen to the radio, open a newspaper or click on a web page link without hearing or seeing the latest miracle method to get you out of debt.

Some of these methods can actually be very effective. For example, a debt consolidation loan using the equity in your home can significantly reduce the interest you pay each month.

Others like debt settlement or debt negotiations can have a negative impact on your credit rating. Some companies promise to help you rebuild your credit rating after settlement but this is a slow process no matter whether they do it or you do it yourself. This method, along with bankruptcy should only be considered if all other options fail.

Before you consider any option to eliminate your debt you need to find out why you are considering this in the first place. Simply obtaining a loan or settling your debt is not going to solve the problem for most people.

The odds are good that once you have your debt under control you will start piling it on again. This is because most people take these actions without a plan to prevent this from happening again.

Another important point that you should consider is that for some there is no need to go through a 3rd party for help with your debt. It's very possible that you have all the money you need to pay your debts and other expenses and have the ability to impact the interest rates you pay.

I'm not just talking about a budget but a real plan for what you want your money to do for you. A budget is just part of the process. A real financial plan starts with setting your long and short term goals and working backwards from there. Every financial decision you make should be directed toward achieving your goals.

Your budget will simply be a tool to show you what you have and what your obligations are. Most importantly, it will put you in control of your finances so that you can make educated decisions regarding your spending and savings.

There is absolutely nothing wrong with consolidating your debt to get out from under those high interest rate credit cards. But if you are not careful you may end up with the consolidation loan payment and even more credit card debt.

If you are dead set on using one of the debt elimination methods to reduce your payments, take the time to consider what you are going to do differently in the future to make sure you don't wind up in the same situation, or worse in a year or so.

By: Terry Rigg

Monday, May 7, 2007

Foreclosure Stopping

You’ve just received a terrifying telephone call from your lender. He or she has threatened foreclosure on your beloved property and says there’s nothing you can do to stop the proceedings. But before you start to pack up your belongings, rest assured that there are several ways of foreclosure prevention, including those below. Some cost money and some are free.

1. Foreclosure Mediation - Probably the most popular and common with people who can't pay all the past due mortgage payments at once. This service negotiates with the lender to move those payments to the back of the loan (pending you have the proven income to make the current payments). It is essentially like getting a grace period.

2. Negotiate a Repayment Structure Yourself - This is definitely the cheapest way, but can be frustrating if your lender doesn't have a helpful "loss mitigation department" or a "hardship" program. It can be viewed the same as if you were going to fix your own car. First you have to learn about the car, then fix the car. As with car repair, most people would rather hire a specialist to handle their financial affairs.

3. Deed in lieu of foreclosure - This is where you realize that you can't pay for the house and you voluntarily give the house back to the lender. This still is subject to a deficiency judgment yet counts as a "less serious" foreclosure on your credit.

4. Sell your house - This is a great way if you feel you can get what you owe out of your house. Remember to include the standard 6% realtor fees when calculating your take home. You can negotiate the buyer to pay some of the realtor fees, but it is rare.

For assistance on stopping foreclosure with the mediation services mentioned above, click here.

Sunday, May 6, 2007

Mortgage Industry Working on Foreclosure-Prevention Fixes

Congress and private lenders are looking to create new tools to help prevent mass foreclosures in the ailing subprime sector nationwide. Tomorrow on Capitol Hill, a House financial services subcommittee will discuss alternative programs to assist home owners who bought more than they could afford at the height of the housing boom, and who are now facing sharp payment increases they cannot afford.

Last week in the Senate, the Joint Economic Committee issued a report suggesting that the Federal Housing Administration (FHA) might play an important role in transitioning subprime borrowers out of high-cost, adjustable rate loans and into fixed rate government insured mortgages.

Private mortgage firms are also ratcheting up their own "loss-mitigation" efforts, reaching out to borrowers heading for-but not yet in-serious delinquency. EMC Mortgage Corp., a subsidiary of Wall Street bank Bear Stearns, announced creation of a roving 50-person "Mod Squad" team of loss-mitigation and workout specialists. Named after a popular TV program from the late 1960s-early 1970s, EMC's Mod Squad plans to work in dozens of cities with borrowers individually, and to reach out through community and credit counseling groups.

The squad's goal will be to modify the terms of mortgages to better fit borrowers' actual economic situations today. Among the optional forms of modification will be lowering interest rates, switching from floating-rate to fixed rate, restructuring payment schedules and deferring repayment of arrears. EMC is not offering the program solely out of the goodness of its heart, however. Foreclosures cost bond investors around $80,000 per case, whereas a loan modification may cost just a small fraction of that.

Tom Morano, global head of mortgages for Bear Stearns, said "proactively avoiding foreclosures can reduce the severity of losses, benefiting both homeowners and bondholders. (It's) a win-win proposition."

Meanwhile, attention is being focused on new foreclosure prevention concepts that go beyond loan modifications and do not require "short sales" of properties or deeds in lieu of foreclosure to satisfy the owner's debt. One idea is being discussed on Capitol Hill was proposed by a Virginia-based loss-mitigation firm, Lyons McCloskey LLC. The program is a variation of FHA's "partial claim" option, where money is advanced to bring a borrower's loan account current. The advance is structured as a second lien against the property, but carries no interest rate and must be paid from the proceeds of any future sale of the house.

In the Lyons McCloskey plan, seriously delinquent borrowers would be refinanced into fixed-rate mortgages insured or provided by FHA, the VA, Freddie Mac or Fannie Mae. The refi costs and any arrears on the previous mortgage would be treated as a "soft second" lien with no interest payments due. FHA would partially guarantee the second lien, and the bondholders or investors would assume the risks on the uninsured portion.

Full payment of the lien would not be due until the house sold or the homeowners had the financial wherewithal to pay off the debt.

The key to this program, according to Bob Lyons and Joe McCloskey of the loss-mitigation firm, is that it has the capacity to handle situations where borrowers are able to make mortgage payments at a lower interest rate, but are shackled with arrears that they can't afford to repay and mortgage balances in excess of the current home value.

Some legislation would likely be required for any FHA role in this or other new programs, but housing leaders in both the House and Senate appear ready to consider foreclosure-prevention remedies as part of pending FHA reform legislation.

The Debt Elimination Plan

As the first step to eliminating debt from your life, I suggest you create a Debt Elimination Plan in order to get a clear picture of your debt situation and track your progress.

If your bills are in a scattered and disorganized state, I suggest that you first take the time to gather all of your outstanding bills from every corner of the house. Read Getting Organized to learn how to turn an out-of-control mountain of bills into something more manageable. Then, you will be ready to create your Debt Elimination Plan.

Now that you have a separate file folder for each debt after Getting Organized, you will need a simple, spiral-bound notebook for this next step. In this notebook, you will outline and track the progress of your Debt Elimination Plan.

On the first page of the notebook, list all of your outstanding debts by creditor and amount. You may choose to list them in alphabetical order. I recommend listing them in order of outstanding balance, with the creditor owed the highest balance listed first. Once you've listed all your debts on that first page, add up the outstanding balances to get a bottom line figure for the total amount of debt you owe.

For the time being, include only unsecured debt on your list. Do not include secured debt--this is debt that is secured by collateral, such as your home mortgage or your car loan. You will first want to get a handle on unsecured debt, such as credit card debt. Unsecured debt is the real killer.

Now that you've listed all your debts on the first page of the notebook, you will now assign each debt its own page on the following pages of the notebook. At the top of each page, write the creditor's name and the current amount of the outstanding balance.

For each creditor, you are now going to use a calculator to determine the percentage of your total debt represented by that particular creditor. For example, if your total debt is $15,000, and you owe Ace Credit Card Company $6,750 of that amount, you are going to divide $6,750 by $15,000 and discover that Ace Credit Card Company's outstanding balance represents 45% of your total debt. Do this for each creditor and note the creditor's percentage at the top of that creditor's individual page. When you are done, if you add up the percentages, the total should be 100%.

The next step will be to determine the amount of your Debt Repayment Fund, which is how much you will be paying into your Debt Elimination Plan each month.

Once you establish a monthly amount to be paid into your Debt Elimination Plan, you will pay a percentage of that amount to each creditor each month. For example, if Ace Credit Card Company represents 45% of your outstanding debt, Ace Credit Card Company will receive 45% of your Debt Elimination Plan funds each month.

Keeping a Debt Elimination Plan notebook is a simple and easy way to create a snapshot of your debt situation and to track your progress in eliminating all that nasty debt. Also, having a Debt Elimination Plan notebook provides a great psychological boost--it gives you something concrete to look at whenever you doubt that you are making progress! Before you know it, you will be debt free!

If you want help with a Debt Elimination, Sign in The Debt Elimination Today. This simple, user-friendly software program will solve the problem of debt elimination for you.

Getting Organized

The first step in any good budget or debt elimination plan is to get organized. If you are anything like me, you have become so overwhelmed with it all that you may have lost control. You may have no idea how much you owe and to whom. As everyone knows, if you cannot afford to pay a bill when it comes in, the next best thing to do is to toss it into a drawer or a box and ignore it.

My challenge to you today is to get organized.
For this challenge, you will need one of those portable file boxes and some 8-1/2" by 11" file folders (the more colorful, the better).

Step 1: First, go through all of those closets and drawers and boxes and pull out each and every unopened envelope and neglected bill and gather them all in one place. Once you have done this, I want you to go through and open them all, each and every one of them, and separate them into stacks by creditor.

Step 2: Next, organize what you have left. Go through each stack one at a time. Open up any unopened statements and start throwing away as much of this stuff as you possibly can, including unneeded envelopes and multiple copies of statements. Keep only what you really need, such as very important correspondence and the most recent invoice or statement relating to that particular debt.

Step 3: Finally, organize the statements and other papers in chronological order. Using one file folder for each different creditor, file the papers flat in the folder. You will then have one neatly-organized folder for each debt. Organize the folders in the portable file box. Keep out only the most recent statement for each debt and either paperclip this stack together or put it in a file folder of its own.

Avoiding debt is in many ways an emotional and psychological issue. When we feel overwhelmed by a situation, the effect can be to become so paralyzed that we take no action at all. By getting rid of the multiple copies of statements and collection notices and payment reminders, and keeping only what we need, we are left with a manageable stack of bills. We can then begin to deal with our debt situation one step at a time.

As we begin to address the issues of budgeting and debt in our lives, we may find ourselves needing to go through these same challenges periodically. Maintaining a good budget or a debt free lifestyle, like dieting, requires a lifetime commitment to change. It is far too easy to fall back into bad habits and to lose track. So, it is helpful to all of us to go back to basics every now and again and to reassess our financial situations.

I strongly suggest that you do something immediately toward taking this first step, even if it is only to go and pull your shoebox full of bills out of its hiding place under your bed. Any first step that you take right now, right this minute, will improve your chances of following through.

If you want help with a Debt Elimination, Sign in The Debt Elimination Today. This simple, user-friendly software program will solve the problem of debt elimination for you.