Make Your Nut - Latest Comments

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

Tamara — Wed, 15 Jul 2009 12:21:39 -0000

I had the same damn talk from BOA two weeks ago, and was advised that Phase II would roll-out on July 8. I inquired today July 15, and was told that the second phase was yet again stalled -- I'm getting prepared to right my congressional representative in Maryland because I need clarity to this entire process.

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

Rahul Singh — Mon, 13 Jul 2009 19:55:12 -0000

I was given similar phase II story

My situation

Original Price 630K
Prinicipal Unpaid 490K
5 Year Arm resetting in June2010

Countrywide says loan is not secutitized by Fannie Mae and Freddie Mac

This program aint working. Any one know more about phaseII?

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

NorthGoingZax — Mon, 15 Jun 2009 19:28:42 -0000

Can someone explain why an MHA Refinance is different than a regular refinance? I mean, the lender is writing a new mortgage, the proceeds of which would be used to pay off the old mortgage. Whether I had PMI on the original mortgage or the pool that it was placed in wouldn't matter in a normal refi, why does it matter under the MHA program? I could see where securitizing the new loans might be problematic, since you have loans with LTVs of > 80%, some of which have PMI, and some that do not that you would have to bundle. Then again, wouldn't you just insure the entire pool in those cases? Then again, if the securitization was the problem, they wouldn't have been able ot implement phase 1. I'll admit, I dont' know the inner workings of how a refinance works for securitized loans, but I think the banks and mortgage companies are making it out to be more difficult than it really is.

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

Jason — Wed, 03 Jun 2009 10:40:00 -0000

Awesome article. I was just given the "Phase 1/Phase2" speech yesterday by Bank of America (which I believe owns Countrywide). They just told me that I had PMI on my loan (which I don't) and I could not refinance until "Phase 2" was implemented, which will include PMI mortgages.

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

richy — Mon, 01 Jun 2009 14:08:50 -0000

I entirely agree with the PMI and phase 1 and 2 rules.

My daughter cannot refinance because of this and I think it is a shame; the government program is NOT working for a majority of the people who could be eligible.

Rich

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

Joan — Thu, 28 May 2009 19:54:06 -0000

My goodness, I read this article with growing concern and outright alarm. Countrywide is one of the banks that has caused this entire housing crisis!! Please just Google Countrywide scams and you will find a plethora of sins committed by this institution. Check out the Ripoff Report please! Find a more reputable bank like Bank of America or Wells Fargo and go in to chat with a mortgage loan officer. Yes, you may have to wait until Phase 2 is implemented but stay away from Countrywide and Wachovia.

What’s my personal experience with Countrywide? Well, they allowed my ex-husband to put a second mortgage on my home by allowing him to take a deed out of state to be notarized. Now, he didn’t get the deed in his name but he forged his father’s signature and had it notarized out of state. My divorce lawyer allowed this second mortgage and the payment thereof to be written into the terms of our judgment. Thankfully, when tax season rolled around, my accountant had a complete fit and he insisted that my ex payoff the second mortgage immediately or face the consequences of being reported to the police and charged with a crime. May I also note that this second mortgage for approximately $40,000 had a balloon payment of $40,000.

Find a reputable lender and please do not fall prey to the loan modification law firms or other companies that claim they will be able to force your lender into giving you a better mortgage. I was contacted by just such a law firm and when I inquired what California Civil Code would “force” any lender into modifying my loan, I got a bunch of “uhhhs” and “mmmmms.” When I did get an anser I quickly looked up the civil codes and it was complete hogwash.

Bottom line, many of us are in bad loans and whether or not you wish to own up to it, many of us got taken. So, please do not make a second mistake, from which you may never recover. Be smart and read every line of every document you plan to sign and ask questions. Make sure the replies are clear and make sense to you.

Also, watch out for your lender acting under the guise of “You’ve been such a great client, so we would like to offer you (for a certain fee) a fixed rate on your mortgage and we will make sure your payment will not adjust for three years. Yes, they got me because the amount I’m paying isn’t enough to cover the interest, so my mortgage payment will go up $152 this year. My lender is Wachovia and if you Google “Wachovia scams,” you will see that I am not alone. However, I am attempting to work things out with B of A, as they hold a second on my home. Had I gone to them in the first place, life would have been so very good!

I hope this helps someone and John, you are SO right on with your comments. Be careful with those points – they can mess with your mortgage in the long run. Joan

Re: The Devil in The Details: Why Making Home Affordable Isn’t Working The Way It Should

John — Wed, 20 May 2009 01:09:33 -0000

Sorry, that's not entirely true about Countrywide. I have a first (6.75%) and a second (9.8%). Credit score isn't great (low 600s), but as you say, that's not supposed to be a consideration. I have called them twice - last week and yesterday - different agents. Both say I qualify, then they do a credit report (note - both agents did this even though we specifically discussed the Home Affordable program). The first came back and said he couldn't offer better than 6.75%. The second came back and said I could buy down the rate to 5.5% for 2.75 points. The second agent also, apparently, had no knowledge of the new provisions for 2nd liens. Based on my experience so far, it's my current belief that Countrywide isn't playing by the rules, by choice. John

Re: The Nationwide Mortgage Licensing System - A Step in the Right Direction

tucsonguy — Sun, 05 Apr 2009 14:07:04 -0000

the NMLS should be a federal mandate- as should uniform testing. Mortgage should be no different then financial planners/stock brokers having to get their Series 7’s
I found this list of licensing requirements and which states are part of the NMLS:
http://www.bankapedia.com/m...

Re: More Advice for New Homeowners - There is No Such Thing as an Escrow Overage

Not Paying More — Mon, 16 Mar 2009 14:22:09 -0000

I've been in my house seven months now, fixed 30-year, and the FMV of my home is 2.5 my mortgage note, even after a slight recent decline. All of a sudden, as soon as I file my homestead exemptions, Countrywide's online account interface "informs" me that my note will go up about $12/month to cover alleged possible future escrow shortages. Since my escrow account should need LESS, not MORE, withheld for taxes because of the homestead exemptions, WTF kind of shell games are they playing with my money?! I've also found many other similar complaints (and worse, including suits filed and found against CW) for their sleazy escrow tactics. I wish CNN or MSNBC or some other heavy hitter would go after this story--which I'll bet is a LOT bigger than the mortgage default story.

Re: Whoa, Hold Up, Wait a Minute

DDL — Fri, 06 Mar 2009 22:34:18 -0000

There is an article in the Money section of today's USA Today that
expresses my point more eloquently than I could. Good credit card
holders, never late, some of whom never carry a balance, are having
credit lines slashed or closed, which has the effect of dropping their
credit scores and shutting them off from access to the best interest
rates, affecting their chances at employment, and a host of other
ills. Credit scores drop when accounts are closed because it reduces
the average account age in the credit file, a not-insignificant factor
in scoring.

Re: Whoa, Hold Up, Wait a Minute

Yana — Tue, 03 Mar 2009 16:27:16 -0000

I don't think the banks are going to make a killing; I think we have a credit meltdown ahead of us. If people can walk away from homes, how much easier is it to walk away from credit card debt? Bankruptcy means you don't have to pay, whether or not you file - because you always *can* file. People who resort to credit cards to live do not have the money to pay.

Re: Whoa, Hold Up, Wait a Minute

Ray Merkler — Tue, 03 Mar 2009 14:50:50 -0000

Actually, I didn't know my car was going to need repairs, but my car issues were only one example. Obviously, you can't foresee when a medical emergency or a layoff is going to occur -- that's what makes it an emergency. It emerges. :-P

Which is exactly why an emergency fund is necessary. Who would think to save money to cover such crises? Not many people, but everyone should. You don't have to plan for emergencies -- They are going to happen, that is as good as guaranteed. The only uncertainty is how much these emergencies are going to cost, so you stash away 5-10% or so of your paycheck every week, just in case.

Look at it as paranoia money.

Personally, I try to keep three months worth of living expenses set aside at all times, just in case I do lose my job. Ideally, I'd have six months worth of savings, but I'm working on that. I figure six months is more than enough time to find a new job, even with the job market being what it is right now. Even three months is doable if you really bust your ass to find a new job. No one getting fired today is unemployable. They were simply employed in expendable, unnecessary, or unsustainable positions.

Now, is it possible for someone to just snap his fingers and have a six month emergency fund? Of course not. It took me a good six months to scrape together three months worth of savings, and most people are probably going to take longer, especially right now. But it has to be done.

And there are plenty of ways to make it happen. First and foremost is to make yourself as valuable as possible to your employer without letting it seriously impact your work-life-balance. You can also get a second job, or freelance, or find a way to monetize your hobbies. My fiancee plans to start selling stuff on Etsy after our wedding, for one example, and I'm working on an iPhone game, for another.

People act like they're worried most about losing their jobs, but I think the main problem is that they're worried they're going to have to work harder from now on. Unfortunately for them, that's exactly the case. If you do lose your job, the next one is almost certainly going to be more work, and actually finding it is going to be even more work than that. But everyone can find a job. There will always be work to do. It's just a matter of people being willing to do it.

Re: Whoa, Hold Up, Wait a Minute

DDL — Tue, 03 Mar 2009 14:10:35 -0000

The problem, though, lies in planning for emergencies. You know that
your car is going to need repairs, and you know that you have a
timeframe for getting another one. Those are not emergencies, because
you can foresee them.

What would I regard as an emergency? Job loss, for one, as in the
complete cessation of income. Major medical cost that was supposed to
be covered by insurance but wasn't. In that last case, who would
think to squirrel away funds to cover that expense?

If you had a savings plan in place for such an event as job loss, how
much of a cushion would be reasonable given this economy? And, no
matter how disciplined you would be in keeping savings for emergency
"A" separate from "B", you could reasonably see yourself depleting
your car repair (or new car) money to meet living expenses, if you
couldn't land another job within a reasonable period. And once those
reserves are depleted, with no new income to replenish them, consumers
are forced to turn to available credit. Job loss will turn credit
users into, as you define them, credit abusers.

As I've said, we're not talking iPhones and Prada, we're talking about
folks using credit for food, clothing, and gas - because they got laid
off or laid up, and benefits ran out and cash had to step in. I mean,
to be sure there are iPhone and Prada cases out there, but it's not
fair to lump Group A with Group B.

I would agree with your comment completely if not for the current
state of the economy. People should save, but given this downturn, I
think it unlikely that they could ever have saved enough.

Re: Whoa, Hold Up, Wait a Minute

Ray Merkler — Tue, 03 Mar 2009 13:08:23 -0000

I pay off my balance every month. I know, you addressed that. Stay with me.

Paying off your balance every month is always a good thing, but it isn't the only thing you need to do. As you said, emergencies happen. My car is a timebomb, so I had to spend quite a bit on it in the past year, and I'm going to have to spend even more to replace it entirely when it finally dies for good. Most people would put the repairs on a credit card and finance the new car, and then pay it all off bit by bit over the next several years, racking up interest in the process.

It doesn't have to be that way. Instead of those monthly payments that you're inevitably going to have to make when an emergency hits, make those monthly payments now to yourself by anticipating the emergencies, making the most pessimistic estimate you're comfortable with of how much these emergencies will cost, and setting that amount aside in a savings account every month.

To which I'm sure many will respond, "Not everyone can afford to do that."

If you cannot afford to put money into an emergency fund every month, then you also cannot afford to pay the bill on emergency related credit charges every month. And yet, people will pay those charges anyway. They'll adjust their spending (hopefully), and make it work.

Why not make it work now, before the emergency hits, before you're forced to?

The simple truth is that we the people got ourselves into this mess by abusing credit. Yeah, we can blame the banks for predatory lending, but what does that accomplish? We should focus on what we can do, not on what the lenders shouldn't have done.

And what we can do is this: Save. It's a choice between setting the money aside now and making a little interest off of it, or charging it later and paying a lot of interest. The former will require sacrifice, but I can guarantee you that the latter will require even more.

Re: http://makeyournut.com/?p=261

Rio — Thu, 19 Feb 2009 18:00:28 -0000

Yeah, I had the same experiencellike around Christmas time. I haven't used my card since 2007 (I think) and I got my credit line reduced to $500 so I called up customer service to complain. The lady on the phone was pretty nice and explained that they were reducing the credit lines for customer who weren't using their card. She asked me if I wanted to apply for a credit line increase, but I decided not to since I wasn't planning to buy anything anytime soon. The weird thing is that I got a letter in the mail like two weeks ago telling me they were changing my APR to 17.99%--that's actually lower than what it was. I thought that credit cards were increasing all of the rates and my Home Depot card went down?!?!? I still don't plan to buy anything right now, but I guess it's pretty cool they dropped my interest.

Re: The Credit Market War On Consumers is Alive and Well

DDL — Thu, 19 Feb 2009 15:32:28 -0000

The problem, though, is that if all of the credit card companies are jacking rates, even for their best customers, there really won't be any lender to go to anymore to do what you propose to do. For instance, you did the balance transfer, but there's nothing stopping your new lender from increasing the rate on your balance.

Re: The Credit Market War On Consumers is Alive and Well

ADD — Tue, 17 Feb 2009 16:05:55 -0000

How about a fourth option? I use a credit card for online transactions but pay it off in full every month, so no interest accrues. Seems to me the only way to use credit cards safely in this environment.

Re: The Credit Market War On Consumers is Alive and Well

Tex — Fri, 13 Feb 2009 18:34:26 -0000

Or there's a 3rd option you could take, like I did: Use one of those balance transfer offers from one of your other credit cards, and start the low-interest clock ticking again over at the other card. CapOne sent me one of those "we're jacking your rate as of April" letters, so I used a balance transfer to pay it off.

Of course the Other Card charged me an up-front fee to do so, but even taking that into account, I should be able to pay Other Card off months earlier than CapOne if I left the balance there. Moreover, I took the CapOne card out of my wallet & have no plans to use it ever again. At least, not until they bring their interest rate back down to the levels I deserve as a good customer.

Re: Shopping at Ethnic Grocery Stores - Cheaper, Better, More Diverse

Janice — Tue, 03 Feb 2009 01:49:02 -0000

That's true, i'm not sure why they're cheaper. But at least they carry the hard-to-find stuff. What do you think about the rise of online ethnic retailers? (for example www.salsanachos.com ) and others like that which sell ethnic food online? I kind of like them because you travel and sample all of these great delicacies, but when you get back home you're like "do i really have to wait to find that stuff again?"

Re: Why I Stopped My 401k Contribution

nixilu — Tue, 25 Nov 2008 11:26:26 -0000

I stopped my contributions as well. Not for the same reasons you give, but simply to use the money I was putting into my 401k to pay off any and all consumer debt I have. Paying off debt will always trump 401k investment.

Re: Why I Stopped My 401k Contribution

Travelnutter — Mon, 24 Nov 2008 14:40:35 -0000

Mark Cuban advocated this last month: http://blogmaverick.com/200...

Re: Why I Stopped My 401k Contribution

Ray Merkler — Mon, 24 Nov 2008 11:12:18 -0000

That's a tough one. My initial reaction to this was, "Gah, whu--- Muh? No, bad!" But there is merit to your argument.

Not investing when the market is in a downturn is definitely smart, certainly smarter than selling. Those stocks will most likely recover eventually, so it makes sense to keep your money someplace safe until the upswing comes, and then throw that money in to take advantage of the correction.

BUT, I have issues with applying this same philosophy to a 401(k). By paying down your credit balance, you're effectively getting an immediate return equal to the APR, which is always a good move, but by cutting your retirement contributions, you're denying yourself the match you get from your company. In my case, the company matches 50% of my contributions -- I don't imagine anyone has a debt that has a higher APR than that.

It depends on what your views are on what the market is going to do in the long term. Myself, I believe that it will recover in full, and so I disagree with cutting retirement contributions to focus on credit card debt. If, however, you think that the market will never recover completely, then focusing your income elsewhere is the right way to go, but it has to be NEVER.

Re: Making the Switch From Buying to Renting Video Games

DDL — Wed, 19 Nov 2008 12:10:05 -0000

Now I'm intrigued! What do you do with respect to the world of video games? Got any swag?

Re: Making the Switch From Buying to Renting Video Games

mrredsun — Mon, 17 Nov 2008 02:55:23 -0000

Hey! Don't be so quick to tout rental over purchase! Some of us make a living on video games. And yet, I do know a few developers that Gamefly...

Re: The American Nightmare - Extreme Makeover House Going to Foreclosure

Anne Arundel real estate — Thu, 06 Nov 2008 13:02:04 -0000

There were actually a *few* people out there warning of a bubble, but they were generally grizzled economists with gnarly eyebrows and craggy-looking faces (OK, so I've engaged in a bit of hyperbole to make this more interesting).

At any rate, when we saw their photos next to their articles, or saw them speak on TV, we just thought "he's a stick in the mud...this thing will NEVER end! (my mortgage broker told me so). But when you speak of real estate professionals, you've got it nailed: "and, in fact, were told the exact opposite by real estate professionals."

As one of those real estate professionals (an agent), I also have the unique experience of having studied economics in college. That's not an advanced degree, mind you, but deep down I knew things couldn't continue as they were. Commercial property in Baltimore, for instance, was selling with capitalization rates of UNDER 2% in some instances. That's just ridiculous (it's about 7.2% now, so folks are, in fact, demanding a return when they purchase commercial properties now).

What I DIDN'T know was how far it would fall and how fast. That's the real surprise, but I suppose if you weren't one of those mortgage lenders giving too much money to people with not enough credit, you couldn't have known what was happening.