Many moons ago, we in the mortgage business would sometimes hear the phrase, "I've got terrible credit but my Uncle said he would co-sign for me" and we would put together a financing package that would allow the nice Uncle to appear on the loan with the person who had the bad credit.

Lenders understood that, just like other consumer loans, if something went awry with the mortgage loan they could come after the Uncle for payment. But not anymore and it's been that way for quite some time. Unfortunately, many consumers aren't aware of this lending rule.

Lenders will use the lower of the middle scores for each borrower. If the three credit bureaus report your scores as 589, 550 and 545, then the lender will the middle score for underwriting purposes. If the Uncle's three scores were 810, 779 and 766 the score for underwriting purposes would be 779. That's a great score. But there are some misconceptions about these scores, that lenders average them together or they use the highest one or they use the one who makes the most money and so on. The lender will use the lowest of the middle scores and if 550 is too low for an approval, then no-can-do. Misconceptions can cause a lot of heartache. What do do?

The first choice would be simply to wait, repair the negative credit items and wait for your credit scores to heal. Or second, the Uncle could buy the property as an investment home with you being on title. You don't have to be on a mortgage in order to be legally recorded as an owner of the property. Your name along with your Uncle's name will appear on the title report for all future generations to see.

Real estate finance expert David Reed is president of CD REED Mortgage Bankers in Austin, TX and author of Mortgage Confidential: What You Need to Know That Your Lender Won't Tell You and Mortgages 101: Quick Answers to over 250 Critical Questions About Your Home Loan.

Mortgage expert David Reed invites Walletpop readers to ask him questions about real estate financing. leave your questions in the comment section of this post.

I got a couple of emails this past week from potential clients who had different situations they were needing help with but they both made frequent use of "quotation marks." It's not that quotation marks are some odd punctuation, it's not, but it's always the "use" of quotation marks in an email that can give me pause.

The first email was from a real estate agent who was moving to Austin from California and she was referred to me as someone who might help in her "situation." She was in real estate but also taught piano on the side.

She wrote, "David, I'm in real estate and moving to Austin. I do well in real estate and have actually been involved in a few Austin deals this past year. I do know however, that I will require a "stated" income loan." When she put quotation marks around the word "stated" I had a hunch what was up.

If achieving financial security is important to you -- and it probably is if you're reading WalletPop -- the absolutely worst source of information is the Madison Avenue marketing genius. If you want to be rich and happy, you would do well to take a sledgehammer to your television.

But even by Madison Avenue standards, the message behind the funny FreeCreditReport.com commercials is bad. Here are the lyrics to catchy song I recently found myself humming:

Well I'm shopping for a new car, which one's me? A cool convertible or an SUV.

Too bad I didn't know my credit was whack, so I driving off the lot in a used sub-compact.

F-R-E-E-E, that spells "free", credit report dot com baby. Saw their ads on my TV. Thought about goin' but was too la~zy.

Now instead of lookin' fly and ridin' phat, my legs are sticking to the vinyl and my posse's getting laughed at.

F-R-E-E-E, that spells "free", credit report dot com baby ...

I've said before that I oppose the idea of car loans for the vast majority of consumers, and this commercial makes abundantly clear why they're so stupid: mortgaging your financial future to prevent strangers from laughing at your posse is ... well let's just say that my thoughts on that one sentence would have to be edited considerably to qualify as merely vulgar.

Here's my advice for car shoppers: pick them like upwardly mobile executives pick wives. First get the car you can afford, and then upgrade when your fortunes are improved.

If you have had a loan, credit card or any other type of credit line in the past 21 years, TransUnion is offering up to 9 months of credit monitoring services as part of a class action lawsuit settlement. You can opt for the basic service which includes 6 months of credit monitoring as well as unlimited access to your credit report and TransUnion credit score. This option allows you to still receive some form of cash from the settlement. If you don't care about the cash portion you can opt for the enhanced service which nets you 9 months of monitoring and a mortgage simulator to help you see what your mortgage rate would be as well as access to your insurance scores.

The credit monitoring service offered by TransUnion provides 24 hour monitoring and email notification of major changes. A credit expert notes that all consumers can benefit from a free credit monitoring service and that TransUnion's credit monitoring is top notch. Experts are less impressed by the mortgage simulator and the offer of a TransUnion score because the number isn't your real FICO score and less than 5%of banks use the TransUnion number. While it isn't the same number the TransUnion score is usually within 40-50 points of your FICO score and may at least alert you if your score is drastically lower than it should be.

While I think this is a good deal for a free service that may prove useful, it's sad that it is only coming about due to a lost lawsuit based on TransUnion's greed. You see back before 2001, TransUnion was selling customer information to marketing lists and others. That's right this credit monitoring is just a way of saying sorry, even though we didn't do anything wrong, for all of that junk mail you used to receive!

You can visit www.listclassaction.com to sign up for your benefits, which you can activate after the court accepts the settlement.

Some have asked me what's the best use for the $1,200 tax rebate (families with kids get more). That was an easy answer for me personally -- I paid extra on my mortgage principal.

You probably realize that each time you make the payment on a 30-year mortgage only a small portion goes toward actually paying off the principal, while a much larger share of it goes toward paying interest. For example, I calculated the payment for a $200,000 mortgage loan at a 5.5% rate using a mortgage calculator at Bankrate.com. The payment for a 30-year loan would be $1135.58. When one makes the first payment on that loan $218.81 goes toward the principal of the loan and $916.67 goes toward interest.

I then used that calculator to determine how much I would save if I put an extra $1,200 toward the mortgage. The mortgage would be paid off five months earlier and I would save a total of $5,677.90 in payments. You can do the same calculation for your mortgage at Bankrate.com and see what that unexpected $1,200 could do for you.

Personally I've made the commitment to be totally debt free before I start retirement. I've found the best way to eliminate debt is the Money Merge Account (TM) system and I've been working with Theresa Bolton Lynch, who introduced the system to me after I wrote about the snowball effect for paying down debt. I've dubbed this system the snowball effect on steroids.

Lita Epstein has written more than 20 books including the "Complete Idiot's Guide to Improving Your Credit Score.

This is the first of a new weekly column by WalletPop's resident debt expert, Lita Epstein.

Two readers wrote in recently about situations where they tried to help out relatives. One was a mother who co-signed a student loan so her son could go to college. The second was a woman who took out an equity line for a relative so he could start a business.

In both cases the people who wanted the loan balked on making the payments and the women who thought they were doing a good deed are now screwed. They will have to pay off the debt if they want to keep their good credit rating and in one case, her home.

I hear this story over and over again from people thinking they are trying to help a friend or relative and instead end up with a mound of debt and often destroyed credit history. Don't co-sign on a loan or agree to take a loan for someone else who isn't able to qualify for that loan on their own. Often the reason is that they've already got a low credit score because they haven't been paying their bills.

There is one exception to that rule. If parents want to help their child get a start in life and assist them with getting their first loan, whether it be a car loan, a student loan or a credit card, then they should do so. But if you do decide to help, be sure that your child has the both the emotional and financial stability to make the payments. Be ready to make the payments if he or she doesn't, or your credit will be ruined.

I'm trying to live a slower life, and years ago I cancelled all my family's credit cards and we've now gone for almost two years without a car. A big problem with this sort of lifestyle is that it's truly hard to take a vacation -- it turns out that all of our vacations had been financed through credit.

When I saw Zac Bissonnette's post on a bank offering "vacation loans," I shook my head right along with him. (And no, vacation loans are not a solution for a family living without credit cards!) My solution has been something far more practical and with both financial and psychological benefits: I vacation in my own backyard.

Last year, I took a week off in early April to slay blackberry vines that had taken over my yard and dig up the dirt, make raised beds, and build a big sandbox for my boys. This year, my week's spring break will feature the transplanting of several varieties of tomato and pepper, the aggressive creation of an herb garden, the planting of an experiment with four new types of beans, and the digging out of a garden on the other side of my yard, to be used as a several-years rotation.

I've recently become enamored with gardening, so my upfront cost for my vacation this year is about $400 in various gardening books, fencing, plants, and a splurge on some very expensive fertilizer (kelp meal, recommended by a favorite local author; I plan to share with my neighbors). Instead of researching attractions and finding the best price for a hotel, I'll be building a pergola and trying to figure out which are the best grapes for our soil. Instead of expensive dinners at roadside restaurants, I'll go all out and buy two new blueberry bushes.

Are you struggling with high interest payments and want to find out the best strategies to get out of debt? Are you afraid of losing your home? Do you want to know how you can improve your credit score? Post any questions you have below and I'll answer as many as I can.

I'll introduce you to debt payoff strategies to help you get out from a mountain of debt or recommend a source you should ask for help. Don't just hide your head in the sand. Start to take charge of your financial future today!

Lita Epstein, MBA, has written more than 20 books on personal finance including "The Complete Idiot's Guide to Improving Your Credit Score" and "The 250 Questions You Should Ask to Avoid Foreclosure. This column is designed to provide information about getting out of debt that will be relevant to a large group of readers. If you require legal service or other expert assistance, please seek the services of a competent professional.

If you're facing foreclosure in California, New York, Kansas Massachusetts, or Ohio and your lender can't find your original loan closing paperwork, there's a good chance the judge will dismiss the case.

Lenders who want to foreclose regularly file what's called a "lost-note affidavit" when they can't find the original documents you signed at closing. That's happening a lot lately because many times a loan is sold over and over again after the original loan closing. In a rush to package and sell mortgages, shortcuts were taken, and sometimes the lender who currently collects your payments does not actually hold the original note.

In fact, according to a report at Bloomberg today, 19% of outstanding mortgages have been bundled into private securities for a total of $2.1 trillion in loans. Alan White, an assistant professor at Valparaiso University School of Law in Indiana told Bloomberg that in a rush to package these loans from 2003 to 2006 assignment of ownership was not always properly completed. If you hold one of these loans it is possible that the paperwork is lost forever because many of the originating loan companies have since gone bankrupt or were gobbled up by a larger lender.

Judges in at least five states -- named above -- have decided not to allow a foreclosure without the original note signed at the time the loan was closed. They believe that without that original paperwork the lenders can't prove they actually hold the note. One of the first judges to take this strong stance was Judge Christopher Boyko in Ohio.

If you are facing foreclosure in a state not mentioned here and your lender is using a "lost-note affidavit," contact an attorney for help. You may be able to save your home.

Lita Epstein has written more than 20 books including "The 250 Questions You Should Ask to Avoid Foreclosure."

One of the latest potential victims of the credit crunch to emerge has been the student loan market. Democratic Congressman Rep. Paul Kanjorski of Pennsylvania., chairman of the House Financial Services subcommittee on capital markets, and 20 other members of his party sent a letter Friday to Treasury Secretary Henry Paulson and Education Secretary Margaret Spelling asking them to take steps to shore up the student loan market.

They wrote that "We urge you to work without delay ... to address this problem before it significantly decreases access to higher education opportunities for students and their families."

They may have a point, although Department of Education officials say that they haven't yet seen a problem emerge. But before we start to talk about unspecified government solutions to students not being able to borrow enormous sums of money to pay for college, I think we need to look at more common-sense solutions. As the Dolans discussed in a recent video, community college for the first 2 years is a wonderful way to save a ton of money on college. More incentives that encourage kids to pursue this option -- perhaps in exchange for better terms on student loans after they transfer to a state university -- could serve 2 purposes: eliminating the need for the government to pump money into student loans, and decreasing the size of the anchor that so many kids graduate college with.

Too many kids feel like attending a private college for 4 years is a birthright and I worry that these well-meaning Congressman may be feeding into that illusion. We shouldn't be talking about ways to make it easier for people to borrow money for college; we should be talking about ways to make borrowing huge sums of money for education unnecessary.

The U.S. of Representatives moved to protect borrowers and improve lending disclosure by passing the Mortgage Reform and Anti-Predatory Lending Act late yesterday. Democrats were joined by 64 Republicans to pass the much needed bill by 291 to 127. Mortgage brokers and bank loan officers will have to be licensed and will have to register to be involved in mortgage lending - something that's been needed for years - if the legislation becomes law. No longer will they be able to make deals behind the scenes that cost borrowers more money for years in higher interest payments without fully disclosing the costs.

The bill, if passed by the Senate, would bar a lender from making a loan unless the borrower has a reasonable ability to pay and would set clear federal standards that apply to all lenders. The bill would also prohibit financial incentives to sell mortgages at higher rates than the borrower qualifies for. Brokers defend these incentives, known as yield spread premiums, as worthwhile for borrowers who want to finance certain expenses to hold down closing costs. But the higher rates cost them much more money over the life of loan. Many times the yield spread premiums are not even disclosed to the borrower. The bill's chief proponent, Rep. Barney Frank, said the bill will allow these premiums provided the borrower knowingly agrees to the higher rates.

The bill would also make Wall Street banks responsible for lending practices that violate this law even if their only involvement with the mortgage was to package and sell it as a security. This provision certainly will make banks much more cautious before putting together these securitized mortgage pools. But, banks must abide by Fannie Mae or Freddie Mac standards to sell the loans to these government-chartered entities, so a similar underwriting process is already in place and practiced regularly by the banks.