Understanding The $25 Billion Mortgage Settlement

Let me first start by pointing that this latest episode of 'mortgage help' coming from Washington has received lukewarm reviews. The rap has been that this is once again too little too late and will not help very many homeowners. To make matters worse, borrowers won't know if they are even eligible for help for as long as two to three years (the period of time it is estimated for the settlement to be implemented). Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance. Over... Read more →


You get a letter in the mail stating that your mortgage has been sold. It looks official and has the address where you are to send all future payments. Having a mortgage sold or transferred is commonplace, especially in the current climate of large numbers of banks and mortgage companies merging or going out of business. Who would be at all surprised to receive a letter like this? You begin sending your payments to the new address and a few weeks later you are receiving collection letters and phone calls suggesting that you are behind on your mortgage. Of course... Read more →


Why Are Banks Randomly Forgiving Six Figure Mortgage Debt?

I read an article this week that really got my attention. The story revealed that select banks are randomly contacting mortgage customers and offering them loan modifications. The modifications in some cases include forgiveness of a substantial portion of the outstanding mortgage balance. One of the individuals featured in the story had a principal reduction of $150,000 on her mortgage. What is really surprising about all of this is that these individuals have not asked for a loan modification and were not behind on their payments! At Christian Money.com we are inundated with e mails from individuals who have not... Read more →


Christians Struggle With Strategic Default

We receive countless e mails at ChristianMoney.com from Christians struggling with the moral and spiritual implications of strategic default. What is it? The decision to walk away from your house when the value has dropped below the outstanding mortgage balance. When you own a house that is upside down or under water, how do you manage the situation while still living up to your Christian values? A story in the Orlando Sentinel this week caught my eye. An employee of Wycliffe Bible Translators in Orlando is getting nowhere trying to work out a mortgage modification with his lender (a story... Read more →


Churches In Foreclosure - The Latest Casualty Of The Recession

The Crystal Cathedral, one of America's most well known churches, filed for bankruptcy with more than $40 million in debt. An example of some of the extravagant spending; one creditor that provided live animals for the churches annual Christmas presentation is owed $57,000. While most churches don't have expenditures like the Crystal Cathedral, the number of churches in foreclosure has tripled in the last three years. Churches, like many Americans, used the real estate boom to borrow and expand. Now, with donations down 15 to 25 percent nationwide, there is a growing number of churches in financial crisis. How Individual... Read more →


Foreclosure Crisis - What The Latest Developments Really Mean

In my last article, I addressed the latest chapter in the foreclosure crisis. Banks and mortgage companies announced last week that they intend to freeze all foreclosure proceedings. The self-imposed moratorium was due to serious questions that have been raised about the legitimacy of legal documents being filed by some lenders. Just a few days later, the major banks have now decided that perhaps they have overreacted and now they are poised to begin foreclosing again. This is extremely confusing, even to those of us that cover financial news for a living. We are definitely in uncharted territory here. Those... Read more →


The New Foreclosure Mess

You may have heard the news last week that several major banks decided once again to put a moratorium on foreclosures. This time, the reason has to do with one might called legal technicalities. You know all that crossing the t’s and dotting the i’s stuff. In recent months, courts in several states have become aware of serious flaws with the documents banks are presenting in court. At the center of the problem are bank employees being required to manage hundreds of foreclosure cases and sign thousands of legal filings. Some bank employees were reportedly signing as many as 8,000... Read more →


The New Math Of Mortgage Refinancing

This is part two of a three part series addressing how current economic conditions have made many financial Rules Of Thumb no longer valid. You may have heard it said that if you can save 2 percent or more off your current mortgage rate you should refinance. Based on today’s low rates, this Rule Of Thumb is no longer that helpful. In fact, many people may find it profitable to refinance if they lower their current rate by just 1 percent. Adjustable Rate Mortgages If you plan on being in your home for only 5 to 7 years (which is... Read more →


Will The Latest Government Mortgage Rescue Plan Work?

Those waiting to be rescued by the government from their mortgage woes may have to continue to wait. A new mortgage rescue plan started today. It is called the FHA Short Refinance and like so many of its predecessors, seems to have so many requirements and exclusions, it appears to be simply be more of the same. Prior government efforts to assist troubled homeowners have roundly been considered failures. The reason I continue to address each of these programs as they are announced is that while most people cannot expect to benefit, some will. Yes, some percentage of those in... Read more →


Rethinking The Thirty Year Mortgage

Perhaps the single most impactful decision a consumer can make is to choose a 15 year mortgage rather than a 30 year. I have held financial workshops all around the United States and each time I've covered this topic my audiences have been universally surprised. Even the most educated of those I have discussed this with have scratched their head wondering why most people opt for a 30 year mortgage when the difference in monthly payment is so modest. This is probably just one of those financial traditions that most people go along with without questioning it. A home purchase... Read more →


Is It Time To Consider Refinancing Again?

Mortgage rates have dropped to nearly a 40 year low. The last time rates were this low was back in 1971. Many have refinanced their homes in recent years but are now considering refinancing yet again. Simply because you can achieve a lower rate on your current mortgage does not necessarily mean that you should refinance. Closing Costs One of the largest factors in refinancing are the closing costs. Consider the following example: Current Mortgage Rate Of 5.75% on a $250,000 mortgage would equal a monthly payment of about $1,458. New Mortgage Rate of 4.75% would lower the monthly payment... Read more →


Should A Christian Walk Away From Their Mortgage?

The buzz phrase in the financial world in recent weeks has been ‘strategic default.’ An article in the Wall Street Journal, Walk Away From Your Mortgage has turned the issue of bailing out on your mortgage into a national discussion. According to recent statistics, more than 11 million homeowners are currently underwater (the amount that they owe on their mortgage exceeds the value of their home). Some analysts are predicting that this will be the case with as many as one out of every two homes within one year! About three years ago, during the beginning phase of the real... Read more →


Jim, What Is Your Opinion of Reverse Mortgages?

Many people are surprised when I tell them that I think reverse mortgages are a great option for people in retirement. Too many retirees today are living without enough money to enjoy their retirement, and some without the funds to even cover their medical needs. For those with a home that is substantially paid off (at least 50% equity), the value of their home may be the key to a better retirement. The concept of reverse mortgages is very confusing, but need not be. A great book on this subject is Reverse Mortgages for Dummies. A reverse mortgage allows individuals... Read more →


Jim. I Am Behind On My Mortgage. A Person Has Approached Me Offering To Take Over My Payments, Should I Consider This?

I would probably not allow someone to take over your payments unless you have absolutely no way to sell the property and are facing imminent foreclosure. It is possible to sign away your rights on a property(executing a quit claim deed) and leave someone with the obligation of making your ongoing mortgage payment. This is known as selling “subject to” the existing mortgage. There has been much written on subject to real estate transactions. A common practice is for the subject to buyer to make your back payments and then agree to make the payments going forward. This is usually... Read more →


Should I Buy Mortgage Life Insurance To Protect My Family?

When buying a home many people rightly consider purchasing life insurance. The problem with buying life insurance through your mortgage company is that it will cost you much more than purchasing a simple term life insurance policy. This question has come up for years, the idea of buying an insurance policy associated with a car loan, a mortgage, a credit card, or other installment agreement. This is a huge profit center for financial institutions and many of them put a great deal of pressure on consumers to take this coverage. Rather than having multiple insurance policies, and over-paying for them,... Read more →