Real solutions for underwater homeowners
This is a video of our Founder, Howard Bono being interviewed on Public Exposure TV. Howard is a return guest on this show and has become their "Go To Guy" on issues related to the housing collapse.
You can talk to the exert about your particular underwater mortgage situation by calling 425-259-2600. We offer a free 15 minute consultation where you can get your immediate questions answered. No cost and no obligation.
Websters Dictionary just published a partial list of new words and definitions they are adding for 2012. There are 15 on the list and I wrote a little story about Bob, an Underwater Homeowner using all 15. I hope you enjoy it.
This is the story of my friend Bob who had an aha moment the other day about his underwater house. You see Bob did all of the right things. At least that is what he thought. He bought a house he could afford and lived within his means. He made all of his payments on time thinking at some point, he could relax a little and work on his bucket list. He thought about how the government could have fixed all of this housing mess by using that big bailout to help homeowners. The housing collapse was proving to be the game changer in his well laid financial plans.
He loudly dropped an f-bomb as he thought about how Wall Street and the Banksters conned the politicians into giving the money to them instead. Those crooks convinced the politicians that the systemic risk was just too great and that if they didn’t get the money, more banks would fall. Just because the politicians believed the banks were too big to fail, he felt they were not too big to jail and that some of them should be put away. He just couldn’t think about this anymore.
Trying to figure this out wore him out mentally and he was gassed. He knew he needed to do something with this house but he didn’t even know where to start. He remembered an ad he heard a few weeks back about a company that helped underwater homeowners like him, but he couldn’t remember the web address to go look. It was something about a bailout. He promised himself that when that web address came to him that he would go check it out since he always has a computer close by.
Bob is a bit of a computer nerd and he also admits to being a Gleek. One of his favorite ways to unwind is to grab an energy drink and his guitar and head for his man cave to watch the TV show Glee. He loves their latest mash-up and is even working on a few of his own. This is a good break for him because he works constantly building his business. When the show is over, he realizes that he has some work to do. (Whoever said that if you own a business you didn’t build it yourself, must have never tried it.)
The computer nerd part of Bob is a smart guy, a few years ago he started his company, Trip C. It stands for Copernicium Cloud Computing. He liked the name because Copernicium is a brand new element and cloud computing is a new technology that Bob knows will continue to grow. Somebody threw out the nickname Trip C in a meeting early on in the company's history and the name stuck.
Bob finishes the project he needed to get done and realizes that he is getting hungry. He is also fighting this earworm that has been in his head all day. The song is Las Vegas Turnaround by Hall & Oates. The song makes him think of Hanna, his girlfriend who is a flight attendant and won’t be back for a couple of days. So he is a little lonely, hungry, gassed and still mad about his underwater house. “What is the web address for that company?” My bailout? Bail me out? He knows it will come to him.
Food! That is what he needs now. He heads down to his favorite gastropub for some Mango fish tacos and a microbrew. He chooses a table in the back because he knows Hanna is at her hotel by now and they can do a little sexting while he eats. This is the little game they play when she is out of town. Hanna tells him about her flight and tells him that she is upset because she said, “ I had to get my own mail out of the mailbox before I left because my roommate just leaves it there.” My own mail out… That’s it! He remembered the web address. My Own Bailout. WWW.MYOWNBAILOUT.COM.
That is the company that can help me with my underwater house. He quickly says goodbye to Hanna so he can go online and find those people that can help him figure out what to do with his house. www.myownbailout.com. In the process of this story he got started creating his strategy to deal with his underwater house and he used all 15 new words in the Webster dictionary. What a successful day.
Thanks for bearing with me on this. It is just a mental exercise and a plug for those that need some help too. If you want to see the Webster Dictionary article on some of the new words in their dictionary go to www.merriam-webster.com/info/newwords12.htm
We have been talking about the expiration of the Mortgage Debt Relief Act for sometime now. As you may know, this act was initiated in the Bush administration and extended in the Obama administration. The debt provides tax relief for owner occupied homeowners who do a short sale, deed in lieu of foreclosure or have an actual foreclosure.
In a recent post, Lose money on your house in a foreclosure or short sale and you could get a tax bill from the IRS, we talked about the fact that even if follow the banks advice for getting rid of your underwater house, you could still be on the hook for a steep tax bill. Imagine you end the battle with one giant, (your bank) and you breathe a sigh of relief only to get a 1099 in the mail the following January that requires you to pay taxes on all of the money the bank lost on the deal.
MORTGAGE DEBT FORGIVENESS RELIEF ACT
Think about how this could affect your family and your budget. Add $100,000 to your income this year and look up how much more money you would owe the IRS. Now the IRS is not known for being one of the kinder and gentler creditors. They have ultimate power over collecting the money and access to everything you do. They are just doing what they have been instructed to do, collect everything they are owed and use every resource at their disposal to do it.
The Mortgage Debt Relief Act says that under certain circumstances, you don't have to pay it. After you have suffered through what you have with you underwater house, most of us agree that this is the way it should be.
The problem is that the bill expires at the end of this calendar year. Our elected officials in Washington DC don't seem to take on anything before the last minute and this is an election year. Will they address this issue at all? That is the question.
We have been concerned about this for our members. We have to coach them based on the law as it is today and that means that it is going away at the end of the year. However, we are starting to see some political heavyweights get on board with the idea that this act must be extended. In a recent interview about the implementation of the AG's settlement with the banks, US Treasury’s Policy director Laurie Anne Maggiano said this,
"…The success of settlement efforts to assist more borrowers may also depend on whether the Mortgage Debt Relief Act is renewed. And since Treasury does not have the authority to extend the Mortgage Debt Relief Act set to expire at the end of this year, or the right to lobby for specific legislation, its director of policy called on servicers and other mortgage industry professionals to do just that."
We are pleased that it looks like we are going to get some help here to do the right thing for today's underwater homeowners and those that will be joining the family soon. We have an online petition that could help to get the word out and let our elected officials that this is at least one piece of business that must be addressed right away.
To sign the online petition, CLICK HERE.
Whether you are upside down or not, whether you are going to keep paying or not, don't destroy more families by forcing them to pay money they don't have in taxes.
THE TV STATION PUT THE WRONG WRITTEN STORY WITH THE VIDEO INTERVIEWING ONE OF OUR MEMBERS AND ME. CLICK THE VIDEO TO SEE THE INTERVIEW WITH RAND WHITNEY WHO IS GIVING HIS HOUSE BACK TO THE BANK.
The incorrect story attached to this video is actually interesting. What the president is now proposing is that FHA will refinance a couple million of the 16 million underwater homes in America. This would have been a much better idea three or four years ago. Now it is too little, too late.
He is not going to get congress to go along with this idea because he is planning to put the American Taxpayer on the hook for even more mortgages that will ultimately go into default and foreclosure which just adds more to the federal debt and increases the balance sheets of the major banks.
What he really wants is for you to pay about 5% interest (3.9% interest plus 1.1% FHA mortgage insurance) on a 20 year loan. Your payments won't go down much and you will be paying the principle on the loan down faster. In effect, you will be paying your own underwater amount back to the banks and investors, but you will be doing it faster. With this plan you might be able to sell your underwater home for what you owe in 8 years instead of 10 or 12.
Again, they are trying to get more money to the banks, all with a guarantee from the taxpayers this time using the Federal Housing Administration.
If you believe it is only the Republicans that are protecting the banks, THINK AGAIN!
I am really interested in what people think about any topic. I read the letters to the editor in my local paper everyday. I look at the comments in blogs and online articles. The mood of the public has the ability to move things in a new direction. Unfortunately the puppet masters in our society are very good at pushing the public in the direction they want us to go and they have no problem with lying anytime it suits their purpose.
I subscribe to Rasmussen Reports. If you are not familiar with Rasmussen, they are a polling company. They take polls on a wide variety of topics but most of their polls are on the economy and politics. Here is what one of their recent polls says about the housing market.
Looking ahead over the next year, is the value of your home likely to go up, go down, or
21% Believe their homes will be worth more a year from now.
27% Believe their home will be worth less
51% Believe it will be about the same
What about over the next five years? Is the value of your home likely to go up, go down, or remain about the same?
45% Believe their homes will be worth more five years from now now.
17% Believe their home will be worth less
31% Believe it will be about the same
Is the value of your home worth more than the amount you owe on your mortgage?
33% Believe they are upside down
11% Don't know
Are you kidding me! 11% of the homeowners polled earlier this month don't even know if they are upside down in their homes or not. These are the people who are following option #1 in our "Nine Options for Underwater Homeowners". They are going to Stay and Keep Paying no matter what. These are also the people who are going to get whatever is left over when the housing collapse finally bottoms out. We think the bottom will be in late 2014 at the very earliest.
What this also says is that 1/3 of homeowners polled know they are underwater and believe overwhelmingly (78%) that housing values are not going up in the next year. If you are underwater and are willing to keep making your payments, we are about 50/50 that your house will be worth more five years from now.
At the Financial Revival Group, we believe people should know where they are and be prepared to take action to preserve what you have left. Knowing where you are at with your house value and your mortgage is critical to surviving the economic challenges that are still coming.
Don't wait to do a little research. You can download our free EBook on right of the page to help you get started.
What do you think about these poll results? You can comment down below. I want to know what you think too.
The more I watch and cross reference the information the government puts out, the less I trust it. Now they want us to believe that the nation added 200,000 new jobs in December which lowers the unemployment rate to 8.5%. It is not accurate and will be revised in the coming month or so but in the meantime, THEY will get a whole lot of mileage out of these brighter numbers.
One of the goals of the mainstream media is to get the president re-elected. We know that they will do and say whatever they have to in order to make this happen. The government agencies themselves are also on a campaign to make sure that things look as bright and rosy as possible. Is that for their own jobs or Obama's? I don't know the answer to that but I do know that there are a lot of influential people who take these questionable statistics and quote them as gospel. Watch your local news and you will see what I mean.
Don't believe them. They don't match up and here is why.
There are three different groups that make predictions on what the unemployment statistics will look like.
1. The Bureau of Labor Statistics (BLS) This report is the official government report that is quoted throughout the media. BLS is a government agency that determines the upcoming unemployment figures by doing a survey of 60,000 households. By the way it takes 2,200 government census workers to do this. They call each person in the survey monthy to determine which of the 3 categories below each of these people fit into.
When they issue the report to the public and the media, it is usually only about 70% complete so they have to make educated guesses. That is why they are constantly going back and revising their numbers. For a description of this process straight from the BLS, CLICK HERE.
2. ADP This report comes from ADP, one of the largest managers of company payrolls in the country. Their report is derived from data collected from the payrolls they prepare for over 400,000 small businesses covering 23 million employees. A much better representation of the number of people working than the BLS statistics because it covers actual payrolls and a much larger sampling. For a description of how their process works. CLICK HERE.
3. Trim Tabs This report comes from the daily withholding of taxes out of 130 million wage earners in America. This is a much broader representation of the working population and the population in general.
So here is why this is important. This week Trim Tabs shows that employers added 35,000 new jobs in the month of December while BLS is saying we added 150,000 and ADP says 325,000. The differences are huge. If we only added 35,000 new jobs in December the unemployment rate would have increased to 8.9%. But since THEY decided to use 200,000 THEY can show a lowering of the unemployment rate to 8.5%. We are being duped. They spend 10's of millions of dollars to come up with these numbers and they still just publish whatever they want to.
Here is some more food for thought if you believe these numbers are real because the government says they are:
1. Last year our population grew by 1,695,000, yet the labor force grew by only 274,000
2. Since 2008 our labor force (the number of people counted as able to work) has shrunk by over 1 million people. How does that happen if our population grows at almost 2 million people per year. Shouldn't the work force have grown by at least 4 or 5 million people in those three years?
3. THEY are simply not counting many people who could work but cannot find a job. If all of those people who were actually unemployed were counted, our unemployment rate would be in the neighborhood of 16%. For example in November THEY removed 194,000 people from the workforce. In December is was 50,000
That is why THEY are cooking the books. For more information on the actual numbers CLICK HERE to go the US Debt Clock.org. Look at the right hand column and run the number for yourself.
4. The private sector has only recovered 36% of all of the jobs lost since January 2008.
My point here is that you cannot trust the numbers that are being fed to you. I'll bet your instincts don't believe them anyway. Trust that, Not what you are told. These numbers are important because until we see a real decrease in the unemployment rate which is actually about 16%, there is no way we can see any kind of recovery in the housing market.
Our prediction for the housing market still stands. The housing market will not bottom out until late in 2014 at the very earliest. 2015 or 2016 is more likely. We expect to see an additional 15 – 20% drop in prices and those values could stay flat for a decade after we hit bottom.
The market may see slight movement for a short time based on the made up numbers that you hear in the media. It will only make real improvement based on the real numbers that are being hidden from you.
You are on your own. Do your homework and take bold action…
This is a guest post from Martha Jackson who is an advocate for the debt consolodation industry and a writer on money and personal finance.
I have found it out for myself that if you become disciplined and aware and careful about the money that you are spending, it becomes easier to pay off debts. You can pay off debts in both ways – either by juggling the debts on your own or by seeking debt assistance. Paying off your debts is more like putting up with mathematics. It will involve more of calculations as you are required to pay off the debts based on your affordability. Thus, paying off debts on your own is not much different than paying off debts through debt help. So, if you can actually pay off the debts on your own, there’s actually no point running after a mirage for which you will be required to pay more money. 
Debt assistance versus do it yourself
So, is it like seeking debt assistance is bad? No, it is not at all true that seeking debt assistance is bad. Actually, the thing is that if you can manage to pay off the debts on your own, then better save the money that you are required to pay as fees to the debt assistance companies for helping you in your situation.
The main difference between do it yourself and debt assistance debt pay off is only one; in do it yourself you start managing the debts on your own to pay those off and in case of debt assistance, the debts are paid off through the help of the debt help companies.
So, do it yourself is best for those people who have enough confidence in themselves and also have the time and energy to get the things straightened. On the other hand, seeking debt assistance is best for those who actually have no idea on how to go about the whole thing and if they are unsure of themselves.
Managing to pay off debts
The main thing that can work as magic on your debts is a proper discipline. You need to become disciplined in order to pay off your debts. That is, you will have to lower usage of the credit cards and become more careful about the item on which you are sending your money.
It is important for you to start budgeting in order to save money on your expenditures. In addition to that, you will also have to get copies of your credit reports so as to determine the number of debts, the type of debts and the total debt amount that is due.
Based on the type of debts, the debt amount and the amount of debts, you will have to try and choose a debt relief option that would be best for you to become debt free. you can either settle on the debts, consolidate those or try and get repayment plans on the debts.
Author’s Bio: Martha Jackson loves to write financial articles and she is a contributory writer associated with the Debt Consolidation Care Community and has written several articles on debt consolidation, debt settlement and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles.
To use the old politician’s line, “Are you better off than you were four years ago?” If you are like most Americans, the answer is a resounding NO. I don’t mean to add insult to injury but I am going to show you how we have all been set up to give the banks what money we had saved.
When this economic collapse first started, I believe that “they” knew that this was going to be deep and it was going to last a very long time. Who are “they”, you ask? I believe that “they” are a combination of bankers, politicians, the media and those that pull the strings of power in this country. I’ll let you fill in the actual names. If “they” didn’t know the truth about breadth and depth of the economic downturn, then “they” aren’t as smart as they want us to believe “they” are. If they did know, then they have conspired to lie to all of us for the purpose of taking what money we have left. For many people in America, the reality is we have little or no money left. Many used most or all of money we had saved or in their retirement accounts to try to hold on to what we have. We did this because we were constantly told in everything we read, heard and saw on TV that the worst is almost over, so just hold on a little longer. I am an information junkie who is always looking for more input. A couple of years ago I started to notice a common thread in virtually every news story, political speech and TV sound bite. The message is, the news may not be good, but we see a turnaround coming soon. That constant barrage of “just hold on” has caused tens of millions of families to make financial decisions that have or will cause their financial destruction. Take this dangling of the carrot out of the discussion and people will make different choices with their money. Choices we should have and would have made a long time ago. Here are just three examples of the way it works. I had thousands to choose from to share this with you. It is important that you recognize these tactics so you don’t fall victim to them any longer. 
December 27, 2008- CBS News, Housing in 09: Much like 08. Here are a couple of quotes from the article: “Will 2009 bring relief for a beleaguered housing market? Financial contributor Vera Gibbons said, don't count on it.” CARROT: "The market is widely expected to bottom sometime in late 2009, but sellers should wait if at all possible, Gibbons advises. The market has yet to stabilize and with we're still not at the point where you will be getting your money's worth. If you're able to pay your mortgage on time- stay put! That is their message. Stay put and keep paying. http://www.cbsnews.com/stories/2008/12/27/earlyshow/main4687554.shtml 
January 7, 2010 – Time Magazine, Still Hunting for a Bottom in Housing Here is the first paragraph of the article. “The decimated housing market may get considerably worse before it gets better, according to housing-industry professionals, who expect foreclosures and home-price declines to continue pressuring the sector through at least the first half of 2010.” CARROT: Only a few more months. http://www.time.com/time/business/article/0,8599,1952132,00.html#ixzz1P89enMXl 
June 13, 2011 – MSN Money.com, Housing Prices Face Long Slow Recovery Here is the subheading to the article. “Experts say they are starting to see a light at the end of the tunnel, but no one's sure how long it will take to get there. The employment picture will have to improve for the housing market to recover…” CARROT: Fiserv and Moody's Analytics predict U.S. home prices will stabilize in the third quarter of 2011 after declining an additional 3% in the first half of this year. http://realestate.msn.com/housing-prices-face-long-slow-recovery Do you see what they are doing here? They tell us the market is in trouble with one breath and with the very next breath they tell us that we are almost ready to recover. If you are an optimistic person like most of us are, you are going to pull out the carrot and act on that. If you are out of money because of this, it’s time to fight back. You are underwater in your home and no help is coming. You have options but you are going to have to stop following the carrot. You can do that by going to our website at www.financialrevivalgroup.com.
If you are the owner of an underwater home, you have to stop beating yourself up. You don't get to stop and rest, you have to do something about it. Here are the top 5 mistakes that underwater homeowners make on a regular basis. Your banks job is to make money. Their efforts so far show that the only thing they will do, is to help you figure out how to keep paying them. The only solution the banks will offer you is a loan modification. Before they will talk with you about it, you have to be behind in your payments and you have to give them all of your financial information. Asking the bank to help you is like asking the opposing coach which play to run next. On top of that, they demand that you get behind in the game and they want your play book too.
The government has implemented a long list of programs to help this situation. Unfortunately, most of them are to help the banks. They have a few programs that are supposed to help homeowners but they have been dismal failures. Try to get a loan modification for example. Less than 4% of the people who apply for a loan modification actually get one. Even if you do get one, there is a good chance that your payments will actually go up. All of these programs have been failures because they started with the premise of protecting the banks, not helping homeowners. As proof of that, when Bank of America was accused of falsifying signatures on tens of thousands of documents used in foreclosures, the Justice Department allowed them to do their own internal investigation on the matter. 28 days later, BofA came back and said, “Yes we had a few isolated incidences but we have fixed the problem.”
It is hard for all of us to believe that the economic system we grew up with is going to implode in our lifetimes. It is even harder to believe that everything we have worked our whole lives for is gone. Since this is hard for us to believe, it is easy to convince us that it is not going to happen. There is an effort to convince us that things are going to work themselves out and we will go back to business as usual where your house is a great investment that will continue to go up in value. At the Financial Revival Group, we believe that the bottom of the housing market won’t hit until 2014 at the earliest. We believe that housing prices will fall at least another 20% before we bottom out and housing prices will stay flat, without going up in value for 10-12 years after that. The old saying, “Hope for the best, yet plan for the worst” makes sense here.
This is tough for most people because complete advice is not easily available. You can’t just call a real estate agent or attorney because their licensing restrictions severely limit what they can talk to you about. For example, a real estate agent can talk to you about a short sale but can’t help you with the paperwork you have to send to the bank for the short sale. They will tell you to talk to someone else about any other options. An attorney can talk to you about bankruptcy but can’t help you with how to use a bankruptcy to clean up the mess after you have lived in your house free for a year.
Not doing anything is the same as staying in your house and continuing to pay. The banks and the government love this. They think if they can make it too complicated, then you will just shut up and keep paying. So far their strategy has worked. If you don’t do anything, you already know your outcome. You’re stuck! You can’t move, you can’t save, and you can’t do anything. You have to give up your dream of getting ahead but you get to complain about those that break the old rules and get the breaks that help them move on. You can have them too but you have to do something.
In the interest of full disclosure, I am not a Suze Orman fan. Mostly because I have this severe aversion to being talked down to. That being said, she is one of the leading media financial advisors in the country. For over a year now we have been rebutting what the media has been saying about the housing market. The housing market will not hit bottom for several more years and will take a decade or more to recover.
Here is what Suze Orman is recommending.
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