Are Mortgage Companies Legitimate?

When in doubt, always do a little bit of homework or research on the firm.

A Facebook fan has asked whether the National Mortgage Help Center is a legitimate company. I’ve never had any dealings with National Mortgage Help Center, nor have I heard anything about them from consumers or in the media. So I can’t really comment with any authority or insight into whether this particular company is “legitimate” or not. What I can say is that if your brother is about to use this company – and he has any reservations or doubts about doing so – he should take normal precautions and investigate the company’s track record. Do a Better Business Bureau search on it. Google the company’s name and see if there are any serious reports of or complaints or accusations of wrongdoing. It could very well be squeaky clean and highly reputable. He’ll never know unless he does at least a little bit of homework or research on the firm.

As for you, if you ever face being delinquent on your home loan (i.e. 30 days or more late), then you should seriously consider re-organizing your finances, establishing a new household budget, and perhaps getting government assistance if your home loan is unaffordable.

For both you and your brother, President Obama’s home rescue plan may offer some relief. It’s designed to help cash-strapped homeowners refinance their loans or get loan modifications. You can learn more about this housing program at http://www.MakingHomeAffordable.gov. Also, if any lenders or mortgage industry officials say they’ll help you use the government’s program for a fee, simply say: “Thanks, but no thanks.” The government’s program is free of charge, and you can readily do it yourself at no cost.

10 Ways to Save on Your Purchases — Reader Participation Required for Success

A step toward becoming debt free is to cut your spending and maintain your new lifestyle. Some people feel it is too hard, say, to stop smoking, cut coupons and then remember to use them, or do your own home maintenance. So start with what you can handle.

You know your own vices and where you waste money when you could be saving. I can tell you what to do, but sometimes in order to motivate yourself, you need to take charge. As a result, I am giving you an exercise to determine how you can save on purchases or cut your overall spending for your own household. Come up with 10 ways to save and share part or all of your list with other readers by leaving a comment. Here’s a list of three to get you started.

Charge only what you can pay off. Getting a low interest rate on your credit cards can save you hundreds, even thousands of dollars a year in interest, but you can save even more if you don’t carry a balance. When you make purchases on your credit cards, be aware what you have in your checking account. If you will not be able to pay off the entire balance at the end of the month when the bill is due, then don’t buy the item.

Choose take-out or eat at home. Have you ever paid more than $5 for an omelet when you know a dozen eggs cost under $2? What about $15 for a plate of pasta when a box of Rigatoni and a jar of Ragu at your grocery store would feed at least four people and cost you less than $7 total? Eating at home can save you a ton of money. However, if you feel you really crave restaurant food, try buying take-out, and save on tips. You can even double your savings by getting take-out at lunch time when many restaurants charge less for the same meal they serve during dinner hours. Just save your lunch take-out for dinner.

Buy generic brands. Buying generic brand products, especially staples such as cereal, sugar, flour and other items can save you several dollars at the checkout lane without compromising quality or taste. Opting for generic prescription medicines are also a great way to keep money in your pocket.

Why You Should Answer a Summons on Debt Collection

If you can’t pay a debt, creditors are willing to settle out of court with you for a lump sum payment of less than the amount you owe, or a monthly payment plan, but they also will not hesitate to sue you for the full amount of the money you owe them.

So what should you do if you receive a summons and complaint from a creditor? Answer it.

What Happens If You Do Not Answer the Complaint
If you choose not to answer the complaint, the Court will enter a judgment against you, determining that you owe the creditor whatever amount they asked for. You may even be told to pay their attorney fees. The creditor can then use that judgment to garnish your wages, take money from non-exempt bank accounts or put a lien on your property.

If You Do File An Answer
If you answer the complaint (and you usually have about 20 days to respond to the plaintiff’s claims), you preserve your right to be able to argue your position in Court. You also will be notified of any future Court dates. You can use your time in Court to state why you don’t owe the money they claim.

What If You Do Owe the Money they Claim
Even if you do know for sure that you owe the exact amount the debtor claims, you can still use your time in Court to state another amount that you can afford to pay. Although typically if you admit you that amount, you will receive a judgment against you for said amount. The real leverage comes simply by answering. The debtor does not want to appear in Court no more than you do. They simply want to get paid. Once they see how time-consuming this may become for them since they are not receiving a default judgment, they may be more willing to enter a settlement agreement with you.

Debtors will take you to court for their money

What If You Don’t Have the Money to Pay?
It doesn’t matter if you don’t have the money. The debtor can still sue and the Court can still enter a judgment against you. Being broke is not an excusable reason to back out of your financial responsibilities, as the debtor is willing to shake the money out of you if it could. In cases like that you might just want to consider filing for bankruptcy instead. However, if in your financial statement and affidavit you can show how you don’t have the funds to pay, nor have a steady income, the debtor may be more willing to negotiate with you for a settlement plan.

What If You Offer to Make Monthly Payments?
A debtor does not have to enter into a payment plan with you. They can reject your offer and then sue you for the full amount. A debtor is more likely to reject a payment plan if they believe you have the means to pay, you have wages they can garnish, property they can attach a lien to, or a bank account they can raid. It is often, however, in the debtor’s financial interest if they reach a settlement plan with you if you don’t have the means to pay.

Try to settle a debt

Negotiate Your Debt
You’re in a better position to negotiate your debt before you stop making payments. However, if you’re receiving debt collection notices, that means you’ve already stopped. So, the older your debt gets, the better your chances are to get a good deal on a lump sum payment. At some point some creditors may have “written off” your debt as a bad debt expense. If they’ve written it off but then you come to offer to make a payment, they should be willing to take almost any amount from you, as any amount is better than no amount. If you’re offering a lump sum, try offering one-quarter or one-third of what you owe. Be careful with offering a monthly payment plan. Because if you miss a payment, the clock can start all over again for the full amount of the debt you owe.

If you need further guidance, sign up for a free consultation about how you can improve your financial situation.

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Free Financial Guidance

People struggling with their finances often ask me for personalized coaching to help solve their money issues. While I don’t do one-on-one coaching anymore (I stopped doing that about 3 years ago to focus on group seminars where I can reach larger numbers of people), I can offer some free financial guidance in other ways.

First, I have partnered with the National Foundation for Debt Management (NFDM), a reputable non-profit credit counseling agency which negotiates with creditors, gets your interest rates lowered, and creates a plan to quickly get you out of debt. Since I am a spokesperson for NFDM, they’ve agreed to provide a free on-one-one counseling session to my readers and fans. With NFDM, there is no obligation to buy anything, and there will be no pressure on you to do anything.  All you have to do is share your situation openly and honestly, and in return, I promise that you will get honest and real-world advice on how to handle your situation.  To arrange for your free counseling session, click on this link http://www.themoneycoach.net/gethelpnow.htm to sign up for your free consultation.

Additionally, I post articles and financial advice to social networking sites, such as Facebook and Twitter, as well as on my own website, blog, and in my newsletter at www.TheMoneyCoach.net. There you will find my tips on a host of topics ranging from budgeting, credit and debt, to student loans, taxes, insurance, investing and real estate. Lastly, you can get free information from my books, including Zero Debt: The Ultimate Guide to Financial Freedom, just by checking those books out from your local library.

3 Smart Tips for Wallet-Friendly Vacations: What to Do

Regardless of your finances, it never hurts to spend time during your vacation doing low-cost and free activities, or finding other ways to cutback. To learn how to save money while still enjoying your vacation, read below my “What to Do” tips. For other tips, click these links to read “Where to Go” and “Where to Stay.”

What to Do
Regardless of where you go on your vacation, you can also cut costs by what you choose to do while taking time away from home. The more time you spend doing free or low-cost activities, the less time you have to shop or do more expensive activities. Here are just a few ideas:

Biking, hiking, camping, or just taking time to stop at scenic overlooks are great low-cost ways to spend part of your wallet-friendly vacation.

Go Biking: In most cities there are parks, hotels or lake front shops that do bike rentals fairly cheap (or bring your own), allowing you to do a self-guided pedal tour around town, or simply take in the scenery.

View the scenic overlooks: If you’re driving to your destination, allow time to stop at many of the scenic overlooks or historical markers off the Interstate. Too often we drive past these as we’re in a hurry to get to where we’re going, but the views are often a nice no-cost pause to our day.

Take a hike: You don’t have to climb a mountain with granola in your knapsack to enjoy a nice hike. Take a walk through a forest reserve or nature preserve, or along a wooded trail. There’s one in almost every area and if you walk right in, your cost is often free.

Spend a night camping

Pitch a tent: Spend one night of your trip camping outdoors instead of in a hotel and shave $100 or more off your vacation. Even if you’re not a camper, one night under the stars is a nice break from the hustle and bustle. If you don’t want to pitch a tent and sleep in a bag, if the space in your mini-van or SUV allows, just let the seats back for a night, and relax. Bring pillows and a blanket to add to your comfort. You’ll enjoy watching the sun rise after your night of rest.

Looking for a low-cost vacation? Take a trip to the beach. (Photo courtesy of Joaquim Alves Gaspar)

Hit the beach: Feeling the soft sand between your toes, listening to the sounds of the waves crashing and the seagulls cawing can be relaxing and inexpensive, when you choose a public beach instead of a private resort.

Sad financial lesson from The King of Pop’s death

I was so saddened to learn of Michael Jackson’s death, but his passing is also a painful reminder about managing one’s finances. Jackson reportedly died $400 million in debt – after spending an estimated $20 million to $30 million more each year than he earned. Please people, please remember: no matter how much or how little your salary, if you spend more than you earn, you will always end up broke and in debt.

See this article on Jackson’s finances:

Jackson lived like king but died awash in debt – Yahoo! News.

Tip #1: Seven Smart Ways to Pay Off Student Loans Fast

By Lynnette Khalfani-Cox, The Money Coach

Nearly two-thirds of graduates of four-year colleges and universities have college loans to repay. The national average of student loan debt for these graduates is more than $20,000, according to a survey by The Project on Student Debt.

There are several different strategies and approaches student loan borrowers can take to get those loans paid off fast. During the next 7 days I will present “Seven Smart Ways to Pay off Student Loans Fast,” with a new tip each day. Here is Tip #1:

Tip #1. Pick the shortest loan repayment program you can afford.

If you have federal student loans, there are four different loan repayment plans you can select:

• the standard loan repayment plan, where you pay a minimum of $50 a month and your payments last for as long as 10 years;
• the extended repayment option, which also requires at least $50 monthly payments, but which lets you pay off your educational loans over 12 to 30 years;
• the graduated repayment program, which lasts from 12 to 30 years and allows you to pay as little as $25 a month; and
• the income-contingent repayment plan, which permits you to make payments as low as $5 a month and which lasts for 25 years.

Bonus Tip: Don’t make the mistake of just picking the option that lets you pay the smallest monthly payment. That may help your cash flow in the short term, but in the long run you’ll pay thousands more in finance charges.

The best strategy: Pay as much as you can possibly afford on your student loans. If you can’t swing the standard repayment plan (with a 10-year payoff), and you have to choose a longer repayment plan, then at least make extra payments on top of your normal monthly payment.

Next Step: Even if you can only afford to throw an additional $25 or $50 a month on top of your regular payment, every little bit will help. Sending in “extra” payments is a short-term financial challenge, but if you go ahead and bite the bullet now, making sacrifices in the near-run, you’ll be much better off in the long haul.

Best Place to Find Grants, Loans and Financing for Entrepreneurs

By Lynnette Khalfani-Cox, The Money Coach

The best resource to find grants, loans and financing for entrepreneurs is the federal government’s website http://www.business.gov. There, you will discover a wealth of resources for all kinds of small business owners, including:

• those just starting a business
• current entrepreneurs trying to grow their operations
• women
• minorities
• people with disabilities
• those in rural communities
• home-based business owners
• members of the military
• individuals seeking government contracts, and more

For Minority-Owned Businesses
For example, here is a link to the section of the website that offers help for minorities who are launching a business, or trying to expand one: http://www.business.gov/start/minority-owned.

For Women-Owned Businesses
Here is a link to the area within the site that lists dozens of programs specifically for women: http://www.business.gov/start/woman-owned/.

The U.S. Small Business Administration also has a list of Women’s Business Centers that can be a great resource. It’s a network of entrepreneurship centers found all around the country, where people can get in-person help and educational support to grow a business. Click here to find a local Women’s Business Center.

For Non-Profit Entrepreneurs
Additionally, here’s a link to information for non-profit entrepreneurs: http://www.business.gov/start/non-profits/.

In addition to traditional grants and loans, those starting a non-profit organization are eligible for benefits such as tax exemptions, government surplus, and discounted products and services from the government. Be aware that the majority of financing programs for entrepreneurs from the U.S. government involve loans. But there are many grants too. You have to do your homework and hunt around for what’s available.

Do Your Homework
Start by using the Loans and Grants Search Tool on the business.gov website. Find the search tool by clicking this link.  It will track down specific programs you may qualify for, based on your industry, your personal background, where you live, etc. Don’t forget to inquire about specific government programs that may be available in your own state, county and city as well. You can usually find these programs through your state’s Office of Minority and Women Business Assistance.

Does The SBA Offer Grants? Mostly No, But Sometimes Yes
According to the SBA’s website:

the “U.S. Small Business Administration does not offer grants to start or expand small businesses, though it does offer a wide variety of loan programs. While the SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments.”

So does the SBA offer grants to small businesses or not? The short answer is: Not really, since grants only go to a limited group of entrepreneurs. To see if you qualify, visit this SBA link for more information on specific federal grant programs from a multitude of government agencies: http://www.sba.gov/services/financialassistance/grants/index.html.

If you really want to be an entrepreneur, and you truly need financing, you must be willing to take the time to explore any and all legal options available for raising capital. In addition to the business.gov and sba.gov websites, try exploring grant programs at: http://www.grants.gov and the U.S. Department of Commerce’s Minority Business Development Agency (http://www.mbda.gov), which offers resources on everything from financing opportunities to landing government contracts.

Good luck with your business!

New Era of Responsibility — 5 Tips for Getting Your Financial House in Order

By Lynnette Khalfani-Cox, The Money Coach  

The inauguration of Barack Obama as the 44th President of the United States ushered in a new era.  As he said in his speech on Tuesday, January 20, 2009: 

“What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.” 

For each of us to help Obama fulfill his goal for America, we can start by taking responsibility for our own personal debt.  Here are 5 tips to get your financial house in order.

    

1) Use more cash than plastic.
Before you go shopping for anything, even groceries, hit the ATM first – armed with your budget and your “need” list so that you don’t buy more items than you planned, or purchase items priced higher than you should be spending.  Take out exactly the maximum amount you’ve determined you can afford and will need to purchase your items of necessity (not just the items you want, but the items you “need”). Later, when you are out of cash, that’s it. Leave the mall or whatever store you’re in. Resist the temptation to whip out plastic to buy more stuff.     

2) Write down all your debts.
To get a clear sense of your finances, you really need to know how much you owe, to whom, and how much interest you’re paying on your debts. You don’t want to guess about debts. Do you owe $5,100 or is it more like $9,100? Getting your bills listed in black-and-white is a sure-fire way to start simplifying your finances and seeing where your cash is going. To get a jumpstart on this process, go to the Free Info area of  http://www.themoneycoach.net and download the form called “I Debticate Myself to Being Debt Free.”

3) Pay your bills online.
Online bill payment is a great service for busy people. Use it as a time saver to pay those fixed monthly expenses, such as your mortgage, car note, or insurance payments. Online bill payments also helps ensure that you don’t forget to pay bills, which can result in late payments or negative marks on your credit report.

4) Pay more than the minimum amount due.
Don’t fall into the minimum payment trap. Minimum payments in the short run really mean maximum payments in the long run. To avoid paying exorbitant amounts of interest and being in debt for life, you must pay more than the minimum balance due. If possible, try to pay 2 to 3 times the minimum payment.

5) Call up your creditors and negotiate down your interest rate.  
Every six months or so, starting today, call up your creditors and ask for lower interest rates. Often, credit card companies will lower your rate on the spot, simply because they don’t want to lose your business to another company offering lower rates. If you can knock down the interest rate on a card with a 21% interest rate to 12% or so, you’ll be saving yourself a lot of money. Your minimum payments will also be less each month. If you’re successful, however, don’t lower your payments to match, see Tip 4.

Top 10 Smart Financial New Year’s Resolutions for 2009

 By Lynnette Khalfani-Cox, The Money Coach    

1. Eliminate credit card debt. Answer this question: Do you really want to be in debt year after year and living paycheck to paycheck? If you said “No,” then it’s time to get serious about managing your money and getting rid of excessive debt. You can do it – but you must have an action plan and you must stick to it. Get help from the National Foundation for Debt Management (www.NFDM.org), a reputable non-profit agency.
2. Slowly set aside 3 months’ savings. If an emergency happens – from a job loss to a car breakdown – your savings cushion will protect you from resorting to credit cards. Get free wealth-building tips and pointers on how to save more at www.AmericaSaves.org.
3. Prepare your taxes early. Get any tax form you need from the IRS at www.IRS.gov and file your taxes ASAP. You’ll avoid the procrastination and stress, as well as the hassles and long lines, at the Post Office on April 15th. Early filers also get faster refunds.
4. Make a financial plan. Start writing out your financial goals and what it will take to achieve them. Get help from the Financial Planning Association (www.FPAnet.org).
5. Create or update your will. Nobody likes to think about his or her own death. But you can’t ignore reality. Look at the Hurricane Katrina, 9/11 or the unfortunate, 150,000+ victims killed by the Tsunami that spread across Asia and Africa. Tomorrow isn’t promised. For a low-cost will, visit www.buildawill.com or www.legalzoom.com.
6. Fund a retirement plan. If you have a 401(k) or 403(b) plan at work, start contributing, or increase your contribution. Learn all about 401(k) plans at www.401k.org. No 401(k) plan or you’re not eligible for it? Then open an Individual Retirement Account.
7. Ask for a raise. List the ways you’ve contributed to your company’s prosperity or your department’s well being, and approach your boss for a raise. The Wall Street Journal’s Careers section has tips for getting a pay hike at www.wsj.com. If you work for yourself, give yourself a raise by raising your prices or offering higher-end products and services.
8. Get proper insurance. Get life insurance worth 5 to 10 times your salary, and adequate coverage for your valuables and property – home, car, etc. – too. If something goes wrong, you and your family will be so glad you did. Find quotes at www.insurance.com.
9. Share your knowledge. Mentor a young person, teach your children about “wants” vs. “needs,” or tell a friend about some smart financial tips you have learned.
10. Improve your financial record-keeping. Get your paperwork in order, and keep good records all year round. This will save money in the long run and reduce your aggravation come tax time. Try the free online budgeting and record-keeping tools at www.mint.com.