Debt

Faces of loan modification: Kathy Partak, Auburn, Calif.

Amy Pyle Nov 14th 2009 @ 9:00AM EST Filed Under: Banks, Budgets, Debt, Real Estate, Recession, Mortgages, Refinancing

How well is the government's loan modification working? WalletPop's four-part special report continues with profiles of some of those trying to get help. To read the overview, click here.

Kathy Partak went into loan modification armed with the powerful combination of knowledge and motivation. She had worked in the mortgage business, so she knew her rights and the right vocabulary to use. And she had a step-rate loan that was about to step up dramatically.

Add to that an on-the-job shoulder injury that left her unemployed and Partak figured she was a perfect candidate for modifying the loan on her three-bedroom home in Auburn, Calif.

But Chase Manhattan Bank denied her a modification, Partak said, telling her, "Unemployment is not a permanent hardship."

"Hopefully not!" said Partak, 42. "But it's one of the reasons they allow for on their paperwork of qualification."

Continue reading Faces of loan modification: Kathy Partak, Auburn, Calif.

Extreme home makeover, Part II: Demolition ensues

Barbara Bartlein Nov 13th 2009 @ 3:00PM EST Filed Under: Budgets, Debt, Home, Real Estate, Shopping, Special Reports

This is the second part of a five-part series about how the writer and her husband, Charlie, tackled a major overhaul of their home and the pitfalls they faced along the way. To read the first installment click here.

Now it was onto the next step: Demolition. The destruction was scheduled to begin right after the holidays.

Tom's take: Good idea to hold off on demolition until after the holidays. I can't tell you how many panicked calls I've received on my radio show from folks that absolutely had to get a major project done before an event (a holiday, wedding, anniversary party, sweet-sixteen, whatever). It never makes sense to put that kind of pressure on yourself -- or your contractor. Build a fudge factor into the schedule and the stress factor goes way down.

Continue reading Extreme home makeover, Part II: Demolition ensues

Loan modification: Needed help or an exercise in frustration?

Amy Pyle Nov 13th 2009 @ 12:00PM EST Filed Under: Banks, Credit, Debt, Real Estate, Mortgages, Refinancing

How well is the government's loan modification working? Find out in this four-part WalletPop special report, which begins with this overview and continues with three profiles of those trying to get help.

If the goal of the federal government's loan modification program was to frustrate applicants, then it certainly is succeeding. But if its goal was to prevent foreclosures, the effort may simply be postponing that eventuality for many.

With an estimated 3.1 million mortgages at least two months delinquent, through the end of October, just 650,994 homeowners had received adjustments through the Home Affordable Modification Program (HAMP) -- a notable uptick from past reports and a measurable step toward the Obama administration's goal of helping 4 million by 2012.

But from the halls of Congress to Internet message boards, anger rises about mixed messages, delays and denials without explanation and, most tangibly, the sharp decline in converting short-term loan adjustments into something more meaningful.

Continue reading Loan modification: Needed help or an exercise in frustration?

Extreme home makeover, Part I: Decision time

Barbara Bartlein Nov 13th 2009 @ 6:00AM EST Filed Under: Bargains, Budgets, Debt, Home, Real Estate, Shopping

Our house is a beautiful, 3,000-square foot home built in 1918 that sits across the street from South Shore Park and Lake Michigan in Milwaukee. But after living in our home for 25 years, we were faced with a difficult decision: Do we spend a chunk of money to fix up the place or move? We had done some remodeling in the past, but it was looking tired and the bathroom upstairs still had all of the original (read: very old) plumbing.

As much as we loved the place, the thought of undertaking another remodeling project was too overwhelming. I embarked on a house-hunting mission in nearby Madison and Middleton, WI, but soon discovered that to recreate anything close to what we have -- easy access to downtown, shops within walking distance, lake view, bike path and a quick commute to the airport -- was going to cost $1 million or more. So we reversed course and decided to remodel -- again. Our initial budget was $25,000 and our sights were on that horribly outdated bathroom upstairs.

Continue reading Extreme home makeover, Part I: Decision time

Black Friday: Debit card 'don'ts'

Gina Roberts-Grey Nov 12th 2009 @ 5:00PM EST Filed Under: Debt, Black Friday, Economizer, Credit cards

Even though the most recent consumer credit reports show credit card debt is declining, consumer's debit cards are getting quite a workout. Debit card transactions recently surpassed credit card transactions for the first time ever.

Experts are forecasting debit card transactions to surge even further past their credit card siblings on Black Friday -- and caution that consumers need to be cautious when wielding their debit cards this holiday shopping season.

"Consumers are trying to keep their credit card balances low," said Carrie Coghill Kuntz, spokeswoman for CreditFYI.com, in an interview with WalletPop. "So many are using debit cards."

Continue reading Black Friday: Debit card 'don'ts'

Consumers could win big if Dodd's financial reform package becomes law

Lita Epstein Nov 11th 2009 @ 7:15PM EST Filed Under: Banks, Credit, Debt, Recession, Credit cards

Senate Banking Committee Chairman Chris Dodd unveiled his financial reform package on Tuesday and consumers could win big if the bill becomes law. Dodd proposes a strong Consumer Financial Protection Agency whose sole job will be to protect American consumers from fraud and abuse. He wants to be sure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others.

Dodd introduced the bill along with fellow committee members Jack Reed, Charles Schumer, Robert Menendez, Daniel Akaka, Jon Tester, Mark Warner, Jeff Merkley and Michael Bennet -- all Democrats, so at least it looks as though this may be a partisan effort, but the issue is so important I hope it can become a bipartisan bill.

Continue reading Consumers could win big if Dodd's financial reform package becomes law

No more Starbucks - we can't afford it

Barbara Bartlein Nov 11th 2009 @ 4:00PM EST Filed Under: Budgets, Debt, Health, Wealth

Every morning my husband and I drive through Starbucks and get a latte. Great way to start the day. I can sip a Venti most of the morning.

After looking at our budget, however, we found it was time to evaluate this little habit. Our daily stop was costing close to $8 per day or almost $250 per month. When the economy was great and my business was booming, I rarely gave the money a thought. In fact, I thought I "deserved" this little luxury because I worked so hard.

Continue reading No more Starbucks - we can't afford it

Frugal consumers push companies to embrace new age of thrift

David Schepp Nov 11th 2009 @ 2:00PM EST Filed Under: Bargains, Budgets, Debt, Food, Home, Saving Money, Shopping, Career, Recession, Recession Diaries, Economizer

Consumers are notoriously fickle in their allegiances and interests -- remember those food-assembly kitchens that were all the rage a few years ago? But the recession has sobered buying habits, and increasingly, more companies are viewing Americans' recent conversion to thrift as a long-term trend, not simply flash-in-the-pan fascination.

In an attempt to cash-in on this new sensibility, businesses are keen on promoting their products as a good deal. That's why, for example, Clorox Co. isn't raising prices on its improved trash can liners and Campbell Soup Co. has reduced the promotional price of its V8 brand vegetable juice by 17%, according to the Wall Street Journal (subscription required).

Continue reading Frugal consumers push companies to embrace new age of thrift

We shouldn't be talking about deficit reduction with 10.2% unemployment

Bob Cesca Nov 9th 2009 @ 5:00PM EST Filed Under: Debt, Recession

There's a potential disconnect between the Obama administration, the unemployment rate and the deficit, and I hope there's some sort of resolution or else you and I could be looking at high unemployment for some time to come -- not to mention a backslide on the greenshoots and economic growth we're beginning to see.

The unemployment rate jumped to 10.2% last month, the first time unemployment has breached 10% since 1983. While monthly job losses are significantly declining since early this year, 10.2% is still a scary threshold.

Continue reading We shouldn't be talking about deficit reduction with 10.2% unemployment

Bank of Mom & Dad's Money Coach: The truth about debt

Farnoosh Torabi Nov 6th 2009 @ 6:15PM EST Filed Under: Credit, Debt, Kids and Money, Saving Money, Health, Bankruptcy, Video, Credit cards

My task each week on SOAPnet's Bank of Mom and Dad is to provide young women with solid advice that will improve their messy financial lives. In return I've received quite the education on some of the reasons we, as a society and particularly women, overspend and compile debt.

Continue reading Bank of Mom & Dad's Money Coach: The truth about debt

Ask the Dolans: Can my credit card company change the terms on account I have closed?

Ken and Daria Dolan Nov 6th 2009 @ 10:00AM EST Filed Under: Credit, Debt, The Dolans, Video, Credit cards

Ken and Daria Dolan, America's first family of personal finance, answer your questions every Friday.

Click here to ask Ken and Daria your question

Credit card companies are on a tear, raising rates, slashing credit lines, increasing minimum payments and closing accounts in advance of the new credit card legislation that will restrict their more outrageous behavior. Today, Ken and Daria Dolan of Dolans.com help a WalletPop reader decide if she has any recourse against her credit card company's latest trick.

Dear Ken and Daria,

We got a letter from our credit card saying they were changing the terms on our card. We still have a balance on the card, but we opted out and closed the account. They STILL upped the minimum payment required on our balance. Can they do that?

You'll find simple, proven solutions for managing your credit card debt at Dolans.com.

Recession tales: Saving vs. spending a tough battle

Lita Epstein Nov 5th 2009 @ 9:00AM EST Filed Under: Borrowing, Credit, Debt, Saving Money, Recession, Credit cards

There's no doubt that the current downturn has changed people's spending habits.

Since the peak in housing wealth, homeowners lost more than $5 trillion in equity and 15 million homeowners own homes that are now underwater (worth less than they owe). Unemployment is hovering near 10% with no clear signs of falling.

Homeowners' previous piggy bank -- home equity -- is no longer available for spending. Even if people still hold a job, many are worried that their jobs are at risk and won't spend except for necessities.

People, afraid for their future also changed their savings habits. In the first quarter of 2008, before the recession took hold people saved about 1% of disposable income. By the second quarter of 2009 the savings rate soared to 5% of disposable income. But now that we appear to be near the end of the recession the savings rate dropped back to slightly above 3% in the third quarter of 2009, as people see the end of the recession in sight.

While economists now don't believe this recession will be as deep as the Great Depression, its depth and length will certainly change people's spending and savings habits for a long time to come.

Continue reading Recession tales: Saving vs. spending a tough battle

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