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The year is coming to an end, and with any conclusion comes a last-minute checklist. This is your final financial to-do list of 2010. With only a few days to complete these items, do not waste time getting started.
1. Fund your IRA or Roth IRA. For 2010, investors can add up to $5,000. If you're over age 50, add an additional $1,000.
2. Maximize 401(k) contributions. For 2010, savers can add up to $16,500 to their company's 401(k) plan. If you're over 50, add an additional $5,500.
3. Rebalance investments. Rebalancing is selling part of what has done well and buying what has not done so well, thus selling high and buying low.
4. Review portfolio quality. Look at the rankings of the investments in your portfolio and keep the quality high. Don't hold onto any low-quality investments.
5. Review the tax impact of your portfolio for the year. Now is the time to make any changes to offset portfolio taxes. This needs to be done in 2010 to impact your tax bill in 2011.
6. Review your financial plan. Make sure you are hitting your goals by looking at your results compared with your financial plan. If you don't have one, complete a financial plan prior to year end.
7. Contribute to your child's or grandchild's 529 plan. You may be able to get a 2010 deduction from state taxes.
8. Convert your IRA to a Roth IRA. You'll be able to pay the taxes over two tax years, 2011 and 2012.
9. Take out your minimum required distribution. If you're over 70 1/2, you must take your MRD in this tax year. If you don't, the penalty is 50 percent.
10. Get married. If you are planning on getting married without the hoopla, do it now to receive tax benefits.
11. Review your credit record. Check to see if you have any blemishes on your credit record. You are eligible for one free credit report a year.
12. Make an extra mortgage payment. One extra payment a year can reduce your 30-year mortgage by seven years.
13. Pay your state taxes this year. If you do, you may be able to get a deduction.
14. Calculate your net worth. Each year it is a good idea to see the value of all your assets and review your annual progress.
15. Develop your 2011 budget. Building a budget can be the best way to meet your financial goals. Putting it down on paper is the first step.
None of these items are difficult and some may not even pertain to your situation, but these friendly reminders can prove to not only put you on the right track, but keep you there.
Kelly Campbell, Certified Financial Planner and Accredited Investment Fiduciary, is founder of Campbell Wealth Management, a Registered Investment Advisor in Fairfax, Va. Campbell is also the author of Fire Your Broker, a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.
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2. Property Taxes
Many municipalities offer a discount (sometimes called a rebate price) to homeowners who pay their taxes by a certain date. In Florida's Miami-Dade County, for example, paying your taxes in November (within a few weeks after receiving the bill) will get you a discount of 4%. The discount decreased by 1% each month until March.
3. Gym Memberships
Many gyms and fitness centers offer special rates to customers who commit to a membership for a certain period of time (usually at least a year). You don't necessarily even need to pay it all upfront -- usually you can agree to an automatic monthly charge to your credit card or checking account. The downside: it can be difficult to get out of a gym membership once you've signed on the dotted line, as anyone who has ever attempted it can attest.
4. Cars
Walk onto a dealer's lot with cold hard cash and you are almost guaranteed to get a great deal. Bonus: You will save a fortune in interest. You would of course get similar savings -- on a much bigger scale -- if you can buy a house without financing, but that's something few people would be able to do these days.
[Easy Ways to Save More Money]
5. Medical and Dental Procedures
Doctors and hospitals know that insurance companies will attempt not pay full price, so they will often inflate their prices to factor in that wiggle room. If you don't have insurance, ask if the doctor or hospital can adjust their charges. These providers spend a lot of time chasing down people with unpaid bills, so if you can pay right away, it's often worth it to them to knock the price down a bit. Discounts seem to be especially common when it comes to braces. For example, Central Florida Orthodontic Specialists offer an 8% discount to clients who pay in full within 30 days of the initial appointment when braces are put on.
6. Insurance
If you don't want to pay your insurance premiums in yearly or semi-annual chunks, many companies will now let you pay in monthly installments, although there is usually a "service fee" tacked on. It's generally only a few dollars each month, but that can add up at the end of the year. Some companies waive this fee if you agree to an automatic monthly electronic payment.
When shopping around for good deals, be sure to mention if you're paying in cash. In many cases, you might get rewarded with some nice savings. At the very least, you'll have the advantage of knowing you won't have to pay off a large credit card bill or loan.
The "New Rules of Personal Finance" start with the foundation of eliminating debt and saving money.
It may not sound new or glamorous, but getting this first piece of your financial life right will help make everything else fall into place. And though slashing debt and saving money sounds familiar, a huge number of people have aggressively ignored this wisdom. Much financial ruin over the past 20 years stems from people borrowing heavily against their future, rather than saving for it.
Many people have rediscovered the power of thrift. Some people eat out less, while others put off buying new clothes and many are focused on rebuilding their savings. In sum, thrift is the new black.
The "New Rules of Personal Finance" start with the foundation of eliminating debt and saving money.
It may not sound new or glamorous, but getting this first piece of your financial life right will help make everything else fall into place. And though slashing debt and saving money sounds familiar, a huge number of people have aggressively ignored this wisdom. Much financial ruin over the past 20 years stems from people borrowing heavily against their future, rather than saving for it.
Many people have rediscovered the power of thrift. Some people eat out less, while others put off buying new clothes and many are focused on rebuilding their savings. In sum, thrift is the new black.
Here are five things you can do to establish your own thrifty bona fides.
1. Get on a Budget
For the personal-finance writer, this is a bit like recommending that people floss more. Fact is, everyone hears about budgeting, but very few people actually do it.
The key here is to start simple and keep it simple. Don't let minutia deter you from getting the budget down in rough terms. You have your income (salary or other income, after taxes), and you have your expenses (housing, food, transportation, etc.).
Ideally, the difference between those two is positive. If it's not, then you know you're losing money on basic expenses, and we haven't even gotten to fun things like movies, trips or new clothes!
A number of websites, such as Quicken.com, provide budgeting help. SmartMoney.com (part of The Wall Street Journal family) also has a number of budget-related worksheets that can help get you started on the numbers-crunching game.
2. Eliminate Credit-Card Debt
Once you get on a budget, the first thing you should do is eliminate your credit-card debt. Why? Because it's almost certainly the most costly debt that you have.
I know this is challenging for many of us, but before you can start thinking about cashing in on great investment opportunities, you have to get rid of expensive debt.
This advice might sound like common sense, but a surprising number of people try to build a savings account or investment account while maintaining relatively high balances on their credit cards.
This, of course, doesn't make much sense. Credit-card interest rates can easily run in the mid teens. Savings rates are nearly 0% in many cases, and investment accounts on average return 6% to 9% over time — though not lately!
In other words, you'd be much better off paying down the expensive credit-card debt and then moving on to investment and savings.
3. Reduce the Cost of a Common Thing
Once you've got a budget, look for a common thing (meaning something you do often) that could be done more cheaply.
For instance, I plan to start riding my bike to work as it gets warmer. A friend of mine says she is opting to walk to the coffee shop rather than drive. These small actions save money on subway fares or gas. It may not sound like much, but it adds up.
The key is to find something already built into your lifestyle and do it in a cheaper way, creating a recurring savings.
Energy costs are another way to build in savings. For instance, energy costs can fluctuate. Up north, winter is usually costlier. In the south, the summer, especially if you have air conditioning, can be more expensive.
Take the peak months and maintain a budget that handles those peak months. As the costs come down in nonpeak months, move that extra money into savings instead of blowing it on something frivolous.
4. Delay Gratification
It's good to treat yourself to a nice meal or a trip somewhere. But you can't do it every day. As my grandfather said, "First we work, then we eat."
By delaying gratification, we build discipline, we establish control of our financial lives.
For instance, say you want to get a flat-screen television. There are several ways to do this. Pop out to Best Buy (NYSE: BBY - News) and put it on your Visa — and sort things out later. That would be a carefree approach more common in the pre-crisis era.
Second, you could time the purchase to come after a key income moment, such as a raise or an expected bonus. At least in this way, you are directing a reward toward the acquisition. A bit more disciplined.
Third, you could set a savings goal and build in a "matching" notion that would go into the flat-screen TV fund.
In other words, you decide that you want to add $5,000 to your savings account in the next 12 months. For each dollar you put into the savings account, you put 20 cents into your flat-screen TV account. Once you get to the goal, you will have a contingent "reward" account from which you can buy the flat-screen TV.
5. Develop an Accountability Strategy
When you commit to something — exercising more, eating better, saving money — it is challenging to stick with it. Whole forests have been felled in the name of books meant to help us stick to self-improvement promises.
A powerful tactic is to share your goals with someone you trust so that this person can hold you accountable. It's easy to tell ourselves that we'll "get to it tomorrow." It's tougher to confess letting things slide to someone who is holding you accountable.
Who is the ideal accountability partner? Ideally, someone you trust enough to be straight with, especially when you're not meeting your goals. Spouses can keep each other accountable, and that's how my wife and I have it arranged. Other options are good friends, but make sure you're ready to give it to them straight. If you prefer someone more removed from your personal life, a financial adviser or even someone in the clergy might play a deeper role in helping you meet your goals.
Share your budgeting and money-saving strategy with your accountability partner and then schedule check-ins on a weekly or monthly basis. Ideally, your accountability partner will help you get back on track when you fall behind.
Adapted from "The Wall Street Journal Guide to the New Rules of Personal Finance" by Dave Kansas. Copyright 2011 by DowJones Co. To be published by Harper Paperbacks, an imprint of HarperCollins Publishers, on Dec. 28, 2010.
Write to Dave Kansas at dave.kansas@wsj.com
With thrifty consumers on the lookout for quality used goods, they're hitting estate sales -- and spending more money. Bargain hunters are spending about 15 to 25% more at estate sales now, compared to a year ago, estimates Caring Transitions, a company that manages estate sales and relocation around the country. Nationwide Estate Sales, a similar company, pegs the increase at around 10 to 15%, or more. Buyers are paying more per item, says John Buckles, president of Caring Transitions, and if they have to return to collect their first purchase, they often buy more. "We hadn't really seen that before," he said.
Good timing. And not just because it's family pilgrimage time. There are 2.1 million baby boomers with a house on the market today, according to the National Association of Realtors, making up 40% of all home sellers. Many are selling a family home in favor of smaller, more manageable abodes -- which means they have years worth of furniture, books, games and knick-knacks to divest.
Of course, it can be hard to tell what's worth the effort, and unless your childhood home was a trove of fine art and rare books, this process won't make you rich. Consider: Even the prized possessions presented on PBS' "Antiques Roadshow" are typically valued at less than $500, says Marsha Bemko, executive producer of the show. And many of the items that were hot a few years ago -- like shabby chic furniture and Beanie Babies -- won't fetch the kind of cash they once commanded. Still, done properly, an estate sale could cover the cost of a move and then some: A typical sale might yield up to $7,000, says Lori Tucci, an appraiser at Los-Angeles-based Estate Sale Angels.
SmartMoney asked the experts how down-sizers can make the most money -- when they should bargain hard, when they should take the best offer they can get, and what items to give away. Here's what we found in four popular categories:
Furniture
Bargain hard: Mid-century modern furniture from the '50s and '60s is especially popular, says Tucci. A mid-century modern buffet that sold for $75 or $100 earlier this decade, for example, could now sell for $300 to $400, adds Christine Acosta, who co-founded Key Estate Sales, a Chicago-based estate sale company, with her husband.
Take the best offer: Everyday furniture like couches, chairs and coffee tables may sell, especially if the pieces are light wood, aren't chunky and less than five years old. A couch in good condition might fetch a few hundred dollars through a site like Craigslist -- more if its leather.
Free with purchase: Wall-mounted televisions have rendered most entertainment centers obsolete, and mattresses and bedding have never sold well, experts agree. And clunky, dark-wood pieces like traditional dining and bedroom sets just aren't in style right now.
Clothing
Bargain hard: Expect high prices for couture brands like Chanel and Gucci - especially vintage pieces -- as well as other high-quality vintage from the 40s and 60s. Buyers have also been snapping up finely made vintage fur capes this season, which can fetch up to $500, says Lauren Houdlett, founder of accessories label Fat Baby Deer.
Take the best offer: Even if your pieces don't meet the quality standards of an exacting vintage connoisseur, clothing in good condition from retro-hip eras like the '40s, '60s, or '80s will still sell, says Brian Elenson, owner of 2MuchStuff4Me, a New York-based estate- and garage-sale company. And Native-American style pieces are popular too, Houdlett says -- for now.
Free with purchase: Mass-produced items from large chain stores like GAP or L.L. Bean are usually destined for Goodwill, or the smock-box at a local school. Same goes for anything heavily stained, sweatshirts, or sweatpants.
Books and Records
Bargain hard: If you have first- or limited-edition books, or copies signed by the author, have them appraised before you put them on a table with the Prince of Tides. Something like a limited edition, leather-bound book of Tennessee Williams plays could bring in hundreds, as can leather-bound series, especially Franklin Library books -- the company produced collector-edition books, often of classics. For LPs, look for things like more obscure Rolling Stones and Beatles records in their original sleeve and un-scratched, says Tucci. You could sell one of these for about $500.
Take the best offer: Individual leather-bound books, especially of the classics, are often worth your time to sell. So are LPs by jazz greats or by bands that were popular in the 60s, as long as they're in good condition and in their original sleeve.
Free with purchase: Most paperbacks fetch about a dollar or less and mass-produced hardbacks sell for a few bucks -- if they're not damaged. LPs that are heavily scratched or aren't in their original sleeve likely won't get more than a few bucks, if anything. Your old cassettes and CDs are a tough sell these days too, as digital music downloads have taken off.
Collectibles
Bargain hard: Porcelain dolls, tin toys made between the '20s and '40s, and many toys popular with the baby boomers -- a complete Lionel train set, say, or Mattel's Herman Munster doll -- can be lucrative, says Acosta. Also hot: Vintage movie posters; coin collections, especially those that feature gold coins; and vintage cameras in good condition made by companies like Carl Zeiss and Leica from the turn of the century until about the 1970s.
Take the best offer: Even baby boomer toys in imperfect condition are worth selling, as are complete coin collections, even those that aren't especially rare, because of their nostalgia factor. Contemporary art is popular right now, as is local art, so a painting that features an iconic building or landmark in your community may sell well in your area.
Free with purchase: Buyers don't care much for most collectors plates with dates -- the kind where you'd get a plate each month in the mail with a date on it -- especially if the collection is incomplete, says Tucci. And the kitsch bloom has worn off velvet paintings or 80s pastel, floral and landscape paintings and prints.
And Don't Forget About ...
Family snapshots and video: Stock photography and film companies may buy home movies -- 8mm, super-8mm and 16mm versions -- and photos that include an iconic event or a famous person -- even if your grandma is in the photo, too. "You can sometimes make hundreds of dollars from these things," says Tucci.
Silverware and china: With the price of silver at historic levels, sterling silver flatware is extra valuable right now. But "even silver-plate and stainless flatware will sell simply because it is an item that everyone can use," says Acosta says. Most silver-plate flatware sets sell for $40 to $75; sterling flatware sets for $500 to $1200 or more.
Items from the garage: Tools sell particularly well, says Elenson, because they're easy for buyers to carry home and pricey when purchased new. Old bicycles are in high demand, and that old three-speed cruiser in particular: In good condition, you could sell it for $100 or more.
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Job boards are irresistible because they seemingly put everything within easy reach. Unfortunately, the majority of job hunters are competing for the same small pool of jobs and getting turned down.
Look for signs: Keep up with what's going on in your industry. Read trade journals, follow analyst commentary and monitor the stock market for indicators showing which companies are growing, restructuring or contracting out services. Good or bad news can lead to staff changes so regularly check company websites and Facebook pages for jobs since they may not be advertised elsewhere.
Compile a list of companies that you'd like to work for and research relevant positions within those organizations. You can find job descriptions on career websites and industry blogs. For newly created jobs, try Glassdoor.com, a site offering inside job information that is supplied by anonymous employees.Only apply to jobs that closely fit your skills and experience, says Susan Strayer, a career coach in Washington. "If you want to become that wildcard choice, a 30% match isn't going to cut it. You need to be as close to 100% as possible."
It's people, not paper: Tap your personal network of colleagues, friends and family to find those inside connections that can forward your résumé to decision makers. If you don't have a direct line, try reaching outside of your immediate network to friends of friends, old classmates or even cold call somebody in a useful capacity who can offer inside intelligence about company culture. Don't overlook contacts working for company vendors; they are often seen by decision makers as trusted sources of referrals.The more senior you are, the smaller the network tends to be, so join professional trade organizations and attend trade shows, conferences and seminars.
Make it easy to find you: Promote your availability by posting your résumé on networking websites like LinkedIn.com and on specific industry websites like ClearanceJobs.com or edjoin.org, a website for educators. Emphasize unique skills on your résumé since companies will search online databases when they have specialized needs. That's how Vanessa Broaten, a teacher from Anaheim Hills, Calif., got her job after posting on several teaching websites. She was hired because of her master's in education and fluency in Spanish and Portuguese.
Follow up with employers since first hiring picks don't always work out. The same job may get re-posted six months down the line. You want to be available to that employer before they post the new job.
-- Email: sjdnishi@gmail.com
TWO and a half years ago, Robert and Amy Ahleman, a construction contractor and a financial services employee, were mired in a mortgage nightmare. After missing just one loan payment on their modest, well-kept bungalow in Bensalem, Pa., the couple began receiving notices from their lender. Default fees and eviction threats followed.
As the amounts they owed ballooned because of mounting late fees and other dubious charges, their lender refused to take their payments, claiming they were insufficient — which put the Ahlemans even further behind.
The couple soon realized that filing for bankruptcy was the only way to save their home. At the time, the Ahlemans had two mortgages, one for just under $200,000 and a second for $50,000, and the debt was smothering them.
Today, however, the Ahlemans have a happier story to tell. Not only did they survive their harrowing experience with their home intact, but they say they have emerged happier and thriftier for it.
“Given how much we love the house and our neighborhood, being able to go through that and get out of it makes you look at life totally different,” says Ms. Ahleman, 33. “We can wake up every morning now and not worry about our house being ripped out from underneath us.”
Back in July 2008, when the Ahlemans’ troubles were first detailed in a front-page article in The New York Times, their experience was less common than it is today. Since then, of course, millions of average Americans have been sucked into a foreclosure maelstrom that is ruining their finances and their lives.
This disaster has been accompanied by a still-unsettled debate about how best to stem the foreclosure crisis. When the federal government first stepped in to shore up the economy in 2008, it chose to buttress Wall Street and the banking system with hundreds of billions of dollars in taxpayer bailouts while largely leaving homeowners on their own.
Now that the foreclosure mess continues to hamstring the economy and has upset political expectations, policy makers have focused more closely on it. But a divide remains: Should homeowners simply be foreclosed upon en masse, or should banks work with them to modify mortgages and reduce the loans to levels that homeowners can manage?
The Ahlemans can attest to the fact that a modification, when properly engineered, can offer a less financially painful solution for everyone involved in a potential foreclosure. Yet while the couple’s default survival tale is uplifting, it’s hardly the norm. The terms they received on their loan modification are rarely offered to troubled borrowers today, and so their journey — and their escape from the possible consequences of a foreclosure — remain unusual.
Some analysts and leading economists have cited a failure by banks to provide loan modifications as a signal reason that the foreclosure crisis continues to drag on so ruinously, years after it began. Each month, roughly 250,000 new foreclosures are started, while 100,000 are completed, according to a recent report by the Congressional Oversight Panel, which was created in 2008 to monitor financial markets and those who regulate them.
Figures like these have a huge effect on almost everyone in the country, experts say. Foreclosures blight neighborhoods, put financial pressure on families and drive down local real estate values. Investors who hold the loans in securitization trusts are also hurt by foreclosures, because recoveries on these properties are low. And consumers, made more cautious by a crippled housing market, spend less freely, curbing the economy’s growth.
SOME are prospering from foreclosures, particularly loan servicers that administer mortgages for banks and investors who own the underlying properties. As the report from the Congressional Oversight Panel noted, loan servicers can profit significantly by pushing borrowers into foreclosure. It gives the servicers more opportunities to keep charging lucrative fees and little incentive to seek a modification.
Another obstacle to loan modifications arises if imperiled borrowers have second liens, like home equity loans, on their properties. These liens are often held by lenders who are also servicers on the first mortgage. They, too, have little interest in seeing any modification because it would harm the value of their holdings and reduce their income from fees.
Because of these realities, the Home Affordable Modification Program of the Treasury has been largely ineffective when it comes to helping borrowers get loan modifications from their banks, according to the Congressional panel.
As of mid-December, HAMP had processed almost 520,000 permanent loan modifications. The panel estimated that by the time the program is finished, it will have prevented only 700,000 foreclosures over all — quite a contrast to the three million to four million modifications that the Treasury anticipated when it rolled out its plan. Up to 13 million foreclosures are expected to have occurred by 2012, the panel said.
Tim Massad, acting assistant Treasury secretary for financial stability, attributed the program’s results to three things: “The eligibility pool is smaller than we originally thought, and it has been much more difficult to contact borrowers,” he said. “Third, the banks have not executed these programs very well.”
Kurt Eggert, a professor at Chapman University School of Law in Orange, Calif., said: “I think it’s clear that while HAMP was well-intentioned, it hasn’t delivered nearly enough. I think a big part of the problem is that nobody is effectively holding servicers’ feet to the fire to say, ‘Where are the loan mods that you should be delivering that help both borrowers and investors?’ ”
IN late 2008, a little more than a year after they filed for bankruptcy to protect their home, the Ahlemans received a letter notifying them that their loan was being transferred to a new lender and loan servicer. The company that they would now be dealing with was Litton Loan Servicing, a unit of Goldman Sachs.
Ms. Ahleman said she immediately began pestering Litton for a loan modification.
“I harassed and harassed Litton,” she recalls. “We had to submit the paperwork right when our loan was transferred. We didn’t hear anything through January and February. I would call them hysterical, crying.”
After months of no progress, in the spring of 2009, a reporter called Litton to ask why the Ahlemans’ loan modification was stalled. Litton responded quickly and later made the couple a compelling offer: It said it would cut the interest rate on their first mortgage from a variable rate of 9.3 percent to a fixed rate of 4.59 percent. Litton also offered to waive $38,332 in arrears on their loan, which included late fees and legal costs that had accumulated while the loan was in default.
Separately, Banco Popular, the bank that owned the $50,000 second mortgage on the Ahlemans’ property — which carried a whopping interest rate of 12 percent — wrote it off entirely. This eliminated the couple’s obligation to pay the debt, which had grown to $62,000, including fees and other charges. (The couple paid taxes on the forgiven mortgage.)
Under the terms of the new loan, the Ahlemans’ mortgage obligations dropped from almost $250,000 to roughly $198,000. Their monthly payment fell from $1,959 to $1,376.
The Ahlemans say their loan deal gave them a life-changing second chance. Since they received it in June 2009, they have made their payments on time; they emerged from bankruptcy a year ago.
With work busy for both of them, they have been able to put money away in case they hit another rough spot.
“We like to have one or two mortgage payments in a savings account so that money is there to fall back on if we do have a bad month,” Ms. Ahleman says. “From going through that whole experience, we became very frugal. Every now and then, we’ll go out to dinner, but we don’t splurge or go on shopping sprees.”
The Ahlemans hold no credit cards, except for the one that Mr. Ahleman, 36, uses for his contracting business. They cut up their credit cards back in 2008, when they filed for bankruptcy, paying them off under a court-approved plan.
“If we can’t pay cash for it, we don’t buy it,” Ms. Ahleman says. “That’s one thing we learned. Credit cards will get you in trouble. I will never allow myself to get in that position again, regardless of what I have to do.”
For policy makers interested in designing loan modification programs that actually work, the Ahlemans’ story may be instructive. Because most banks refuse to provide principal write-downs on troubled loans, the kind of modification the couple received is the exception rather than the rule across America today.
Most loan modifications, if they can be wrangled out of lenders at all, reduce the interest rate only slightly and tack onto the mortgage all the late fees, legal fees and other questionable costs that have accrued in the foreclosure process — simply adding to the debt that borrowers must repay.
“While focusing on the safety and soundness of banking institutions, regulators have focused too little on protecting borrowers from abusive practices,” says Mr. Eggert, the law professor.
The Congressional Oversight Panel noted the possibility that conflicts of interest among loan servicers were preventing loan modifications from being struck. Representative Brad Miller, a Democrat from North Carolina, is advocating that loan servicers be separated from the institutions that hold a borrower’s loan, in order to eliminate such potential conflicts. He is also urging regulators to create strict criteria that loan servicers will have to follow when working on modifications.
Mr. Miller is circulating a letter among his colleagues that outlines his suggestions. It is addressed to top officials at six federal agencies or regulators: the Federal Reserve, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the United States Treasury.
For the loan modification criteria, Mr. Miller pointed to the rules set out by Farmer Mac, a government-sponsored enterprise that finances farm loans. Those rules include requirements about who qualifies for a change in the terms of their mortgage, and a calculation of the likely loss that a foreclosure might create.
“The criteria are designed to lead to a sensible modification that the farmer can sustain,” Mr. Miller says, “and it protects the investor as well by getting people into mortgages rather than undergoing the horrific expense of foreclosure.”
Mr. Miller also aims to end affiliations between servicers and banks, which he said were proving to be a genuine impediment to loan modifications.
“Having a servicer be affiliated with a big bank does not really have any offsetting advantage,” he says. “It creates conflicts of interest, it puts the servicer in the position of controlling information and allows it to protect itself at the expense of homeowners and investors.”
THE F.D.I.C. has proposed a set of loan servicer requirements that, among other things, would try to eliminate conflicts of interest.
Under its proposal, a servicer would have to disclose an ownership interest that it or an affiliate had in a loan secured by the same property on which another mortgage was outstanding. The servicer would also have to establish a process to address any second lien that it might own where the first mortgage is seriously delinquent.
Mr. Eggert said a national set of servicing standards would be a crucial step toward putting consumers and investors onto a level playing field with loan servicers.
“At the recent Senate testimony where all the federal agencies came forward and testified about servicer problems, it was telling that they didn’t talk about what they have already done about it,” he says. “Instead, they talked about the investigations they are conducting that they hoped would inform them on what to do next. How many years are we into this crisis? We are long past the point of where we should be investigating to see what’s happening.”
For the Ahlemans, at least, their flirtation with financial disaster — and the modification that helped them survive — has made them appreciate life more.
“We’re just really, really happy all the time,” says Ms. Ahleman. “I used to say to myself, ‘When I wake up in the morning, I just want to feel how people who are comfortable in life feel.’ And now we have the ability to do that. It can be done.”
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Here is a great Bath & Body Works coupon!
Print out your Free Lip Item with ANY Purchase coupon and take it in to score a great deal!
They have small gift bags and key chains for only 50¢ that will work!
If you are shopping online use coupon code: ANYLIP at checkout. These expire on 12/24!
Thanks, Hip2Save & Mojo Savings
This article originally appeared HERE
Published by Robert Pagliarini
Wednesday, December 15, 2010
Are you long on Christmas shopping lists but short on cash? Last week I wrote about how you could save a sleigh-full of money this holiday season, but for some that just wasn't enough. "Save money?" they sneered, "What if we don't have any money?" Fair enough. You may have to use some of your other 8 hours, but it's better than going into debt buying a bunch of gifts for others. And you don't want to follow George Costanza's lead by making donations in your friends' names to the Human Fund.
Of course, I could cop out and simply tell you to rise above the commercialization of the holiday and to simply love one another (although that wouldn't be bad advice), but it's hard to gift wrap pretension. Instead, I'm going to show you how to give real gifts without spending a dime.
Here are 10 low cost FREE gifts you can give your loved ones this year:
1. Gadget training. If you have less tech-savvy people on your Christmas list (i.e., anyone over the age of 15), give them something they desperately need -- training for their gadgets. Show them all of the features of their cell phone, how to record their favorite shows on their DVR, etc.
2. Babysit. When your tolerance for screaming kids exceeds your bank account balance, consider giving babysitting "coupons" that your friends can redeem. If you're a masochist, schedule a night where multiple families drop the kids off at your house. This way you're not giving up so much of your time.
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3. Swap services. If you have smart but broke friends, this tip is for you. Have a friend who provides a valuable service such as personal training, financial planning, or computer consulting give you several one hour vouchers you can give to your friends. In return, you give your friend the same number of one hour vouchers for whatever service you provide.
4. Teach them. Now's your chance to be a know-it-all. Do you have a special skill such as speaking a foreign language or the ability to play an instrument? If so, you could provide weekly lessons for a month or six weeks. Bonus benefit: If you're a good teacher, they may just want to hire you at the end of their free lessons.
5. Start a book club. Tap into your inner Oprah. Offer to host a book club at your house every month. To avoid having to buy the books each month, download from thousands of free titles such as "Pride and Prejudice," "A Tale of Two Cities" and "Moby Dick" from Project Gutenberg or Amazon's free eBook program.
6. iTunes transfer. This can take some time, but for that special person, this is the ultimate gift! Import all of their CDs into iTunes for them (no, it's not piracy).
7. Be a host. Be the host with the most when you're the host with the least (cash, that is). This is an efficient gift because you can give it to all of the people on your list. Offer to host a monthly or quarterly party or game night at your place. Tell them you'll plan it, send the invites, etc. To make sure you're not spending money, require attendees to bring food and drink.
8. Share lottery winnings. If your idea of asset allocation revolves around having a mix of scratchers and Powerball lottery tickets, consider sharing one of the lottery tickets you've already purchased with those on your list. If you win, share the proceeds equally with everyone on your list. If you win really big, simply keep it all and get new friends.
9. Cook. Who doesn't love being served by a friend? Give those on your list the experience of eating out at home. Shop for the groceries (they pay), prepare and serve the meal, and then be sure to clean up. You might even get a free meal out of it.
10. Workout partner. They may both thank and curse you for this gift! Offer to be a workout partner to a friend. When you exercise with others you are more inclined to keep going even if you lose motivation. It's a superb gift that will also benefit you.
Whatever you decide, you don't have to feel guilty about not spending money -- I guarantee you that the less money you spend the more thought you'll put into the gift. And isn't that what Christmas is all about? Whoops, I guess not ...
Now it's your turn ... what's your favorite FREE holiday gift you like to give?
