Bankruptcy & Foreclosures

With 2007 nearly at an end, it’s pretty safe to say that the economy never did settle down like optimistic analysts had hoped. As a mortgage broker, I experience the effects of a stumbling subprime mortgage industry on a daily basis. According to the Center for Responsible Lending, some 2.2 million borrowers with subprime loans may face foreclosure in the next several years.

Not to scare you with this statistic, the fact is a lot of homeowners are at risk. When asked what can be done to avoid becoming a foreclosure statistic, I like to remind my clients that the foreclosure process isn’t some unforeseeable epidemic but rather a process that slowly develops. The beauty of a structured loan is that we are able to plan for it on a monthly basis. Here are some tips to keep in mind:

Don’t be afraid of longer terms. If you are having trouble making your payment, consider extending your amortization period. Switching from a 20 or 30 year to a 40 year mortgage can lower your monthly payment.

Ditch the adjustable rate. With mortgage rates on the rise, now is probably the best time to consider locking in to a fixed rate program. While variable rate mortgages often look more appealing on paper initially due to low rates, the stability of a fixed rate will make budgeting much easier.

Consider letting it go. If you’ve tried everything in your power to stay afloat but you simply cannot make ends meet, there is no shame in putting your house up for sale rather than sitting back and letting the bank take it. Not only does selling it yourself protect your credit score, some lenders will actually allow you to pay off less than you owe on the balance if you let them know you are selling for a loss.

We’re always talking about the ways credit card companies market their cards to lure in potential customers but American Express has recently gotten a little fruity about this concept.

Rich Duprey has recently posted a great blog entry about the new Plum card. He goes on to say:

We’ve run through all the base metals- gold, silver, platinum, titanium, and we’ve got the sleek black card, so now, it seems, we’ll start turning to the fruits of the world in search of inspiration to promote credit cards.

With an initial run of only 10,000 cards, applicants were given an Apple iPhone with their applications! AmEx will be announcing some of the first companies to get a hold of the Plum card on Dec. 16 during MSNBC’s Your Business.

Despite the card’s silly name, it’s actually a pretty good idea: Small-business owners can either pay off the card’s balance in full within 10 days and receive a 2% credit applied back to their bill, or they can extend the payments out if necessary. By paying as little as 10% initially, and the balance within two months, cardholders can make purchases interest-free.
Until now, small businesses had a difficult time negotiating terms of credit with their suppliers without the heft of a major corporation backing them. Suppliers often demanded payment up front from small-business owners, and oftentimes, they had to use cash to get the best deal. The Plum Card mimics trade terms that are often offered to businesses, but are frequently inaccessible to smaller ones.

There’s no credit limit on the Plum Card, and businesses can save money by paying off their balance at the end of each billing cycle. It also allows businesses to use just one card for all their business purchases, which is what I’m sure American Express was trying to do. And the card offers automatic savings for purchases made at select partners, like FedEx, Kinko’s, and Hyatt hotels.

The entire article can be read by clicking here.

I think its safe to say I’ve gone overboard on planning for holiday shopping this year as indicated by the fact that it continues to be the subject of my blog posts. However, keep in mind that experts estimate some 60% of our collective credit card debt stems from holiday shopping sprees each year.

That said, I came upon a wonderful little resource from Mary Dalrymple in which she compiles some of the web’s best sites to conduct your pre-purchase research. Here are some of her recommendations:

Consumer Reports. This oldie-but-goodie consumer testing outfit makes a lot of its content available free online. In that category, you’ll find everything from the best hot cocoa to a truly comprehensive review of Apple’s iPhone. Other ratings are only available to subscribers.

PC Magazine. If your friends and family can expect to get new electronic gadgets this year, take a look at PC Mag’s product reviews. For everyone in a hurry, they’ve laid out the pros, cons, and bottom line for each reviewed product. When you’ve narrowed down your choices, delve into the more thorough editors’ reviews.

CNET. Another site for electronic reviews, CNET Networks’ (Nasdaq: CNET) site also creates handy editors lists of their top five picks in each category. They pick AT&T’s Tilt as the top cell phone, and the Canon XH A1 as the top camcorder, among many other examples.

Consumer World. Looking for a grab-bag of handy consumer information? This site collects a vast array of consumer tidbits, from the bargain of the week to a list of the government agencies that address consumer complaints. You’ll also find a link to a comparison-shopping engine that will dig up the lowest online price for Dora and Diego toys, or anything else on your shopping list.

Epinions. Want an idea of both the price and reliability of a potential gift? An arm of the eBay (Nasdaq: EBAY) online empire, this website will give you an idea about how other purchasers feel about a product via consumer reviews. Keep in mind that reviewers often love it or hate it, so read consumer opinions broadly to get an idea about common faults and favorite features.

Amazon.com. Even if you don’t plan to buy your gifts through Amazon.com (Nasdaq: AMZN), you can delve into a wealth of consumer feedback about the vast range of products the site sells. Seeing other purchases from consumers shopping for a certain item may help you dig out gifts for some of the hard-to-please people on your list.

Consumer Search. Can’t get enough consumer reviews? This site, which is part of The New York Times’ (NYSE: NYT) About.com services, surveys a broad array of consumer reviews, boiling them down to find a consensus for the top picks. They even pick the best-of-the-best reviews to help you read further. That lets you take the experts’ word for it, or do the research yourself.

PriceGrabber. Here’s another site, by Experian Interactive, offering comparison-shopping, links to expert reviews, and collections of consumer reviews. You’ll also find a collection of merchant coupons and rebates if you’re looking for a bargain.

The Consumerist. Want to get the dirt on a product or company? Take a look at the humorous and often horrifying stories sent to The Consumerist. Find your way to their shopping section, and you’ll also find lists of deals posted every weekday.

The entire article can be read by clicking here.