In this series, I detail six possible ways to deal with an “underwater” home—one that’s worth less than the amount of money owed on it. Here is the second part of my six-part series.
Homeowners who are underwater may be able to refinance into a low, fixed-rate loan under the Home Affordable Refinance Program (HARP). The program, which was slated to expire this summer, has been extended through June 2012. For tho
Today’s top news headlines feature struggles faced by both Americans and businesses due to the unemployment market and reasons the government is rejecting claims of a double-dip recession. Plus, find out the most common ways Americans are saving money.
Employment Market Affects Both Jobless And Businesses CNN Money Unemployed individuals and small companies continue to face hardship as a result of the employment market, despite growth in other sectors of the economy. Unemployed Americans have been forced to move from job to job and take downgrades in pay in order to meet their basic living needs. C
Some worrisome news came out last week concerning the way we pay: a study from Juniper Research predicts more consumers will be using their phones to pay for goods and services. In fact, mobile payments are expected to nearly triple to $670 billion worldwide by 2015. That news coupled with the fact that the federal government has decided to print fewer bills, means that when it comes to saving money, consumers will need some extra willpower.
As the New York Times put it last week, “cash is in decline.” It’s unfortunate news for the budget-conscious since for years studies have revealed that a commitment to cash curbs spending to the tune of about 20% over a year. Credi
Q: I am in the process of closing on a short sale on my primary residence. I owed the bank 135k and the bank has agreed to let me sell the house for 42k. The bank says it will not pursue the deficiency (which I think is great) and will report the debt as “settled for less than the amount owed.”
I was paying mortgage insurance and recently received a call from a contractor doing a review for the mortgage insurance company. This person asked me several questions; one of them was whether I felt that something was wrong in the origination process. I responded that it was expensive. The reviewer also said the bank would file a claim after the closing for the deficiency. If the bank gets paid for its loss by the mortgage insurance company, shouldn’t the debt be reported as “settled” or “paid” instead?
Your advice will be greatly appreciated.
- “Jackie”
A: Thanks for your question. It sounds like you may be confusing two separate issues here. The first issue is the issue of the settlement and how it will be reported. That’s between you and the lender. Since you are settling the debt with them for less than you owe, it sounds like they will be reporting it accurately to the credit reporting agencies if they list it as “settled for less than the amount owed.” Check your credit reports about 60 days after this is finalized to confirm that the loan shows a zero balance remaining.
The second issue is the involvement of the mortgage insurance company. It sounds like it is getting involved because it may have to pay a claim to the mortgage lender. Anne Weintraub, a Florida real estate attorney and partner in the firm of Band Weintraub, P.L. in Sarasota, Florida warns that “homeowners may have mortgage insurance or their lenders may have insured the loan. This means the mortgage insurance company must approve the short sale, can demand a contribution from the homeowner, and can stop a short sale from happening. This is because the mortgage insurance company will likely be responsible to cover some of the bank’s losses.” Hopefully you are working with a real estate attorney to handle your short sale. If not, you should get in touch with one right away and discuss this call from the mortgage insurance company.
And don’t forget to check with a tax advisor ASAP to find out if you may have to pay taxes on the forgiven debt.
Image: Daniel Borman, via Flickr
The number of charged off and delinquent credit card accounts declined for all major lenders in the U.S. once again in June, with both factors dropping to lows not seen in several years, according to the latest monthly statistics from Fitch Ratings. The number of charged off accounts – those 90 days or more behind that are considered irretrievable by lenders – slipped to 7.29 percent of all balances, the lowest rate seen since early 2008. This figure also declined 35 percent from the same month last year.
In addition, delinquent accounts – those that had gone 60 days or more without payment – fell to just 2.57 percent, the lowest figure since August 2007, and the 17th straight month of decline, the report said. Similar
Welcome to the second installment of The Best Credit Cards in America. In this edition, I’m giving awards for the Best Student Credit Card and the Best Secured Credit Card in America.
The category winners are the cards that score the highest number of points based on a unique, 41-factor formula I designed. The formula gives each card a “benefits/rewards score” and then subtracts the “costs score.” Using my formula, a “perfect” card gets a score of 100.
Since students are getting ready to go back to college, this seems like the right time to look at student credit cards. Many experts