Finding Financial Freedom is a Blog dedicated to help individuals and families who are looking for financial Independence. We like to guide all our readers in responsible debt solutions through services, and becoming financially secure through self-employment. We also offer solutions to everyday needs and support while going through this process helping you secure your future.
In the June 24, 2011 entry we had made a reference to individuals that feel the need to keep up with the Joneses. People live by the myth that because people buy and display goods that show their statuses and are truly wealthy people. Those individuals do not get the fact that these are just material things and have nothing to do with real wealth. Years ago when you watched the Lifestyles of the Rich and Famous you saw all the glamour but never really got a look into any of those individual’s checkbooks. It all goes back to the theory that the grass looks greener on the other side of the fence. How many celebrities have you heard of that have gone bankrupt. Just because you have money does not mean you know how to spend or invest it wisely. It just means you have a great income and when the income stops a certain reality appears into the picture of true wealth. True wealthy people do not have the hardships that most of us have because of their frugalness and diligence where money, investing and savings are concerned.
Did you know that there are many wealthy people out there that you would not even know they are wealthy?
I am not talking about everyone being a millionaire I am talking about individuals being financially secure. I am talking about individuals with their homes paid off with significant savings and investments. This is also called Net Worth and True Wealth. A person with a Net Worth that far exceeds what that individual has in debts (Gross Worth) can also be considered wealthy. Gross Worth is a total value of what you own before you add in Loan to Value. Net Worth is the value of what you own after you consider your Loan to Value. If your Loan to Value is seventy five percent your Net Worth is twenty five percent. If what you have financed is close to or exceeds your Gross worth you are not wealthy and this is where many of us run into trouble.
If struggling to live pay check to paycheck is not wealth it is what it is?
Struggling paycheck to paycheck and it does not matter where you live or what you drive you are still struggling paycheck to paycheck. In this blog we want to get you away for that routine and on with a new way of thinking about money and how you spend it. This however is a process that cannot be done overnight. It is a process of breaking old bad habits and establishing new good and disciplined habits.
What we are talking about here is taking the time to plan your financial future or financial well being before it is too late. The true basis for this blog is coming from the book The Millionaire Next Door by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D. Where I do not believe everyone has to be a millionaire to be wealthy I do believe the fundamentals in this book will make you wealthy minded and even if you do not attain a million in net worth you are wealthy if your net worth far exceeds your debts or you have no debt at all. This to me is financial freedom and this is what we are seeking with this blog. If you get nothing else out of this blog you will get a strong sense of financial responsibility to yourself, for your family and live a more rewarding life day by day.
How Mortgage Or Loan Modification May Be Able To Help You
In the June 18, 2011 entry before we talked about the tough choices and we talked about finding financing through Credit Unions. We talked about Credit Unions First Because that is a real viable option if your debt problem is short term. Loan Modification may be a resource you may want to opt into if you want a longer term fix on an asset you are spending almost everything you have to stay out of foreclosure. Back during the real estate boom they were offering financing that was attractive to buyers to sell homes not actually looking at the long term interests of the home buyer. These mortgages have left many people on the verge of foreclosure while using most or all their resources to stay in their home. What do you do at this point?
Above I said asset because your home is usually worth more than what is owed on it. As a result in the crash of the real estate market this is not always the case anymore. However it is still real property and in time may regain its value and more becoming an asset again. This is where Loan Modification comes in. As long as your home is your primary residence you are most likely eligible. The one requirement is that you have to be able to afford the home after the Loan Modification is complete. This is where people get confused and do not even try or just do nothing. . In the previous entry we told you of a source to help you do the Loan Modification through the government. This program is due to expire July 22, 2011. If you do not want to do the modification by yourself there are services that can help you and you will find out more coming up.
If this is a rental property and you do not live in it you may not be able to get a Loan Modification on it. Some companies do modification on assets but it may be a time consuming chore to find a Loan Modification company that handles that kind of loan modification. There are some out there.
We have again have ways you can get more information on Loan Modification.
Why The Mortgage Problem Does Not Seem Like It Is Going Away!
Also download My Shopping Genie where you can find and shop for Loan Modification professionals in your area using your favorite Search Engine. My Shopping Genie is not just for shopping for goods it is also great for the services you need to help you become financially fit. The My Shopping Genie is Free and you can download it at the conclusion of this article or on the sidebar.
This Week’s Rant
By now you know how we feel about keeping up with the Joneses. People need to learn how to live their own life and not worry about what the person next door is doing. Living in a nice home in a nice neighborhood is what the goal should be in life. If your goals are higher attain them first by figuring out what you are going to do to achieve them with the least amount of financing if any at all. Dreaming about having and eventually getting something you like that someone else has is alright. It is good to have dreams but, if you need to purchase something someone else has because they have it or just to keep up with them is envy, and envy becomes many men and women’s downfall. Do not confuse what I just said with being competitive. Be competitive and achieve your dreams but, do not sacrifice your dreams just because of statuses. Set up boundaries for yourself and live within your means because Judgment Day could be a reality when you conduct your life by keeping up with the Joneses, especially in this fragile economy.
The individual in this video could be me but he is not. I really do like what he has to say and this video fits in with the theme of this blog well.
When we discovered the material in this blog entry we noticed that there is a time limit on applying for this Government Sponsored Loan Modification. We kept this Posted to give Homeowner every chance possible to take advantage of this program at no cost to you the homeowner. Please if you are struggling take advantage of this program by The Friday July 22, 2011 Deadline. Come this Friday we are going to have a new entry and this entry (Below) will remain in the archives. We will advise readers in the future if this program is extended. We will continue this week with Loan Modification Services for those who believe they need help with tne application and processing however, you have to remember these services mentioned in the upcoming entry are paid services and are not free like the loan modification mentioned in this entry.
We will also be discusing another upcoming opportunity that you can start at no cost to you. This opportunity is still in pre-launch and will help you develop as a marketer with free trainings using webinars and webinar archives with more training features and more in your back office. This means no hosting fees, no website construction fees, with no fees of any kind to get started. Please be here Friday for this new informative post.
Posted on July 1, 2011
In this Week’s Blog Entry We were going to offer some loan modification suggestions to struggling home owners from private companies which we will do next week. These companies are motivated to help you with loan modification however there is a fee involved that is added into the process. These would be your last options. Looking through the Yahoo News Briefs I had found this little Gem with an earlier article to help struggling home owners. It seems that the US Government has fallen way short on their goal of helping struggling home owners with this program. In this holiday weekend if you can take some time to fill out the application on the website associated with these articles and get the help you need, here is your chance to do it directly from the Government. Even if you think you do not qualify give it a chance. We truly believe we can help you change your financial future by reading this blog. This blog is not only about financial education it is also about rebuilding your life by finding that job or establishing a home business. There is so much we can help you with here at Finding Financial Freedom. We consider this a big step in your financial relief to give you this very important information with the link where you can find out more.
The Deadline for applications to this Government Mortgage or Loan Modification Program is July 22, 2011!
Have a Safe and Happy Fourth of July!!!
Blaine
More Money for Struggling Homeowners
by Anna Maria Andriotis provided by Smart Money from Yahoo June 30, 2011
A new federal program is offering aid with a sweet kicker: It doesn't need to be repaid.
For the roughly four million homeowners who have fallen behind on their mortgage payments, the federal government is offering yet another remedy: free money to catch up on their loans.
The effort, called the Emergency Homeowners Loan Program, is the latest in the federal government's efforts to slow down the flood of foreclosures a necessary step to a meaningful recovery in the housing market, says a Department of Housing and Urban Development official. For people who have lost their jobs, the $1 billion program offers loans of up to $50,000 that don't actually need to be repaid, if applicants meet certain requirements.
The goal, says HUD, is to offer short-term aid to people who look like they'll be back on their feet soon. But critics say the loans may leave homeowners worse off in the long run. "This is a short run band-aid, a modest attempt to grapple with the severity of the situation," says Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California, Los Angeles.
Rolled out by HUD and the nonprofit housing advocacy group Neighbor Works America, the program is making loans with far better terms than anything on offer at a local bank. The loans are interest-free. Payments go directly to the lender for a portion of the borrower's monthly mortgage, including missed payments or past due charges. And when the assistance period -- which runs for up to two years -- ends, 20% of the loan is forgiven with each passing year. In other words, for qualified borrowers who stay in their home for at least five years after the assistance period and who don't fall behind on their mortgage again, this money doesn't have to be paid back.
But some critics say that's where help for consumers ends. By taking this loan, borrowers risk falling further into debt. If they sell their home before the entire loan is forgiven, they'll be on the hook for the remaining amount. The same holds true if they fall behind on their mortgage payments again: they'll need to repay the remaining balance of the loan when they sell or refinance their home. Separately, borrowers aren't required to have equity in their home to receive this money, so someone who has to repay this loan risks owing more on the home later than they do now. For homeowners who are significantly underwater now, the loan may only delay foreclosure, says Gabriel. While the limit each person will get is up to $50,000, loans will average about $35,000 per person, according to Neighbor Works America.
Others say the program doesn't go far enough. The loans will be made available to around 30,000 applicants -- "a drop in the bucket," says Stu Feldstein, president at SMR Research, a housing and mortgage research firm. It's helpful, he says, but it won't be enough to seriously boost the ailing housing market. Roughly 4 to 4.5 million borrowers are behind on their mortgages by at least 90 days or are in foreclosure, accounting for roughly 8% of all mortgages. Housing analysts say the loss of income is the primary reason why borrowers are in danger of losing their homes. Those behind the program counter that the help will be significant for some. "If you are one of those 30,000 people, I think you should be very excited to get this help," says a Neighbor Works America spokesman.
The program started last week and will take applications through July 22. Many experts say it's still too early to say it will be successful, and so far federal assistance programs haven't impacted a significant number of borrowers. The government's Home Affordable Modification Program, which started in 2009 and was projected to help up to 4 million homeowners lower their mortgage payments has so far only permanently helped around 700,000 homeowners. To be eligible, homeowners must have lost income and be at risk of foreclosure due to involuntary job loss, underemployment or a medical or other economic condition; details on the application process are available online through Neighbor Works America.
Until recently, it took a rare combination of extreme bad luck and poor judgment for a homeowner to end up under water on his mortgage that is, owing more than the house is worth. Today, nearly one out of four homeowners is facing exactly that situation. In response, banks and the government are rolling out new programs they say will help that is, for homeowners who qualify.
After banks' initial resistance to loan modification programs and refinancing designed to help struggling borrowers, many are now embracing programs for homeowners in trouble. Both GMAC Mortgage and Wells Fargo have started either reducing some mortgage balances, deferring payments or offering subsidized refinancing. Chase says it will open another 30 dedicated "help centers" this year where homeowners can apply for loan modifications. This month, the government also stepped in, extending the period for underwater borrowers to refinance their mortgages at lower rates, which was not possible through standard refinance programs. "All of a sudden, everyone is aware of this growing problem," says Stu Feldstein, president at SMR Research, which tracks the mortgage market.
About a year ago, it seemed the number of underwater homeowners was declining as home prices were rising. But housing analysts say that trend is now reversing. Approximately 23% of homeowners with a mortgage are underwater -- near an all-time high -- according to fourth quarter 2010 data from CoreLogic, a mortgage-data firm. That figure rose for the first time in a year, and it's up from 22.5% in the previous quarter. Meanwhile, another 2.4 million homeowners are teetering on the brink, with less than 5% equity in their home. If home prices drop another 10% -- which is likely over the next year many of those owners could end up with negative equity, says Cameron Findlay, chief economist at LendingTree.com.
While this has been an obvious problem since 2008, "large banks have been extraordinarily slow to move to adopt these programs," says Paul Leonard, a director at the Center for Responsible Lending. But now lenders are increasingly stepping in, eager to avoid foreclosures, which can cost the bank far more than a reduced payment plan or loan modification ever would. Lenders are also hoping to keep discouraged homeowners from intentionally walking away from their home: Half of homeowners who owe 50% or more on their home than it's worth and who default do so strictly because of negative equity, according to a 2010 Federal Reserve Board study.
But the banks' programs aren't designed simply for people disappointed by falling prices. To qualify, in most cases, borrowers have to prove they're having trouble making their payments and for a good reason. They'll often have to provide documentation for a job loss, a pay cut, large medical expenses or other unanticipated losses. If approved, they could be offered a lower interest rate by up to 2% when a bank is participating in the government's Home Affordable Modification Program. Or they may also receive a longer repayment period extending a mortgage up to 40 years from the date of origination -- which makes monthly payments smaller, says Leonard.
With some lenders, borrowers who are past due and whose home values have suffered large losses (and appear unlikely to recover in the near term) could qualify for a principal deferment, where a chunk of the mortgage is set aside to be paid later, or out-and-out forgiveness of part of the loan. In general, borrowers will have to meet some income limitations. Modifications typically occur when a borrower's monthly mortgage payment is more than 31% of their monthly household pre-tax income and when the principal balance is no more than $729,750 on a single-family home. The amount forgiven is often small in the grand scheme of things, and it varies depending on the lender and the borrower's circumstances. Wells Fargo, for example, says it eliminated $51,000 in principal, on average, for more than 73,000 borrowers from 2009 through 2010.
Some government programs offer help, through refinancing, to underwater borrowers who are capable of making payments. But applicants will need to meet a long list of qualifications. For underwater borrowers, these programs are among the very few options available for them to refinance. Homeowners who owe up 125% of their home's current market value should contact their lender or mortgage servicer to find out if they're participating in the government's Home Affordable Refinance Program (HARP), which was just extended through June 2012. Borrowers must have a mortgage that's guaranteed by Fannie Mae or Freddie Mac -- to find out, contact these agencies or your mortgage company -- be current on their payments, and not be more than a month late making a payment over the past year.
There's also an option for borrowers who are even further underwater where participating lenders must agree to write off at least 10% of their unpaid principal balance on their primary mortgage. Since September, the government's Federal Housing Administration has been offering some underwater borrowers in areas with large declines in home values -- like Miami and Las Vegas -- a chance to refinance. But that's assuming that their lender agrees to write off a portion of the unpaid principal and that the borrower doesn't have an FHA mortgage but can now qualify for one. So far, just 24 lenders are participating, and only 99 loans have been approved, according to an FHA spokesman. A GMAC spokeswoman says the company will open up this program to some of its borrowers in the next few weeks.
In spite of the recent flurry of activity, consumer advocates say homeowners shouldn't expect much at least not yet. As it is, some government programs have already fallen short of expectations. HAMP, for example, has helped around 600,000 people permanently modify their mortgages since 2009 -- so far, a far cry from the up to four million it was projected to help. And banks have been slow to act as well, especially when it comes to borrowers who are currently making payments. Among lenders "there is some concern that by offering [principal reduction] qualified borrowers will storm the gate and demand a reduction," Leonard says. So far, that hasn't been the case. From 2009 through 2010, Chase says it helped around 500,000 borrowers avoid foreclosure. During that period, about two million foreclosures occurred, according to RealtyTrac.com. And critics say even the loan modifications that have been in place haven't helped that much: Many of those borrowers fell behind on payments again afterwards.
Of course, there are other options for desperate homeowners. They can try a short sale, assuming the bank allows them to sell the home for less than what's owed on the mortgage. More lenders are now open to this, says Stuart Gabriel, director at UCLA's Ziman Center for Real Estate, because they're likely to lose less money in a short sale than they would in a foreclosure. Or, if they can make the payments, they can decide to ride it out. Contrary to popular belief, homeowners who have seen their homes lose 25% or more in value but can afford to keep paying the mortgage might be better off staying there and waiting for prices to stabilize, says Findlay. But if a borrower is able to refinance into a lower rate through a government program, that might be the better move, he says.
Please be advised that we do not endorse any company in this video and that it's educational value in loan modification preparation was the only reason we chose this video.
Get More Information about the Mortgage Crisis by watching this video from 60 Minutes.
