Here's a money saving tip that will also save you time.
First - wash your clothes in cold water.
Next - use less detergent than recommended, as long as your clothes aren't rancidly dirty. I have a small container of ERA, (which I call Equal Rights Amendment,) for really tough stains. It will remove just about anything, but I also have a big refill size bottle of Shout stain remover, and a regular spray bottle of Shout that I have refilled numerous times. That's because we live in the country, the mountains, to be exact, and we're constantly getting schmootz on our clothes.
When the clothes are done, put them in the dryer for 5 minutes and set the heat anywhere from medium to high, depending on how much energy you want to save.
It's important to pull them out before the dryer goes to the cooling cycle. You want them to be steaming when you remove them from the dryer. On our wonderful dryer, that means setting the cycle to 10 minutes, because the last 5 minutes are the cooling off period.
After 5 minutes, take the clothes to your laundry line. (you do have one, right?)
Hang the clothes up so that they dry fairly wrinkle free.
Here's the time saving part: your clothes will dry as though they have been pressed.
Seriously.
I hang the pants up by the cuffs, with the waist pointed down. T-shirts, I put the clothespins on the arms - hanging them up in a kind of crucifixion configuration.
I love that ironing time has been reduced, and of course, that also saves on your electric bill, because then you don't have to burn $$ to operate the iron.
Although it's already cold where I live, I still hang the laundry out on clear-skied days, as long as it's above freezing. In the evening, I bring everything in and if it's still damp, I put it all on hangers in the bathroom, hanging from the shower curtain rod. By morning, it's all dry.
If it's too cold to hang clothes at all, I have an indoor line in -- my laundry room, which also happens to be the boiler room. The water heater and the boiler keep that room quite warm, even though I've turned down the temperature on the water heater to 100 degrees most of the time, as outlined in my previous post.
If your neighborhood has restrictions against line-drying clothes, you may have to skip all this and just go for the indoor drying.
However, the Times recently posted an article about the whole line-drying issue, and there was a photo of a really cool set up that's basically a -- how shall i describe this -- a square configuration of inset clotheslines. Huh? Well, I'll see if I can find a picture of one. But it was quite compact, and avoids the whole problem of displaying your undies to the neighbors. My line runs parallel to the back of the house, where the sun is, so no one ever gets to see our long underwear.
The Times article also mentioned that congress is considering enacting a "right to dry" law to get around neighborhood association restrictions. That's because we all need to cut down on our energy use, and drying clothes takes, I think they said, 6% of household electric usage.
Try this technique - you'll be imPressed with how pressed your clothes look.
Tuesday, November 17, 2009
Thursday, November 12, 2009
Save Money - Turn Down Your Water Heater
When my husband and I were plunged into sudden poverty, one of the first things I did was to review our monthly expenses to determine where we could cut back.
We were using 50 gallons of propane per month even during the summer, which didn’t make any sense to me. During the summer months, we are able to line-dry clothes and only use the gas for cooking and hot water. The culprit had to be our water heater, which is a well insulated, high quality model. So I called up the company that had installed our heating system and got a technician to walk me through lowering the temperature. Most water heaters aren’t so complex, but ours is tied in to our forced air heating system, an intimidating matrix of pipes connected to a burner-thingie, and a digital display with mysterious buttons. Not wanting to mess up the works, I thought I’d best get expert advice on which buttons to push.
It turned out to be quite simple, and I lowered the temp from 130 degrees to 110. Twenty degrees difference! I had read all kinds of warnings about how, if you have a dishwasher, you need to have the temperature set high, but I haven’t had a problem with the hot water set on 110. The dishes still get clean – although I rinse them before putting them in, so there’s no incrusted food for our Bosch dishwasher to remove. Some dishwashers have a “booster” that heats the water, but ours doesn’t. It’s an elegant and nearly silent machine, and it cost a pretty penny back in the days when we had money. The reason we bought such a good one is that we had a cheapo from Home Depot when we first finished our kitchen, and a Hecho in Mexico plastic part burst one night and we woke up to find our kitchen floor flooded. We had to replace part of the floor. Cheap is expensive.
In the first week of October, we had 78 bucks in the bank, and it was going to have to last us till the end of the month. We checked our propane tank level and it was at zero. We couldn’t afford to pay the previous propane bill, which was $285.00 and 60 days past due, so we couldn’t order a delivery. So we got out the electric hotplate to cook with, and we turned the water heater down to 100 degrees. And lo and behold, that is the perfect temperature for a shower. You can shower with full on hot at that temp. We hand washed the dishes. The dishwasher works fine at that temperature, but we were being radical in our reduction of hot water use. Our showers lasted no more than 3 minutes. That's the length of time Hugo Chavez said to use when he scolded Venezuelans about their energy usage. He said, "I showered for 3 minutes and I didn't stink." Hey, Hugo, neither did we. We made it through to the end of the month, paid our previous propane bill, and got a delivery of 200 whole gallons. (We have a 1000 gallon buried tank.)
We put the temp back up to 110, because our big indulgence is taking baths, but in our conservation mode, we only take a bath every other day. We have this big, fabulous two person Jacuzzi tub that we call our “think tank” and since we're self-underemployed, we start each day by taking a bath together. We always seem to come up with great plans in the tub. So now I alternate the temperature. After our bath this morning, I turned the water heater back down to 100 for tomorrow’s shower. I won’t turn it back up till tomorrow night, so that there will be hot water for the next morning’s bath.
Here’s another bonus: for years, we’d had trouble with our tub temperatures. If the handle was turned 1/16th of an inch too far, the water was scalding. An ooch in the other direction, and it was too cold. At 110, you can pour a bath full on hot, and it’s just right for about a half hour soak. It only took us 8 years to figure that out.
Dropping the water temperature down to 110 has lowered our propane usage dramatically, to about 30 gallons per month. I’ll have to see if our alternating schedule of shower/bath, plus alternating between 100/110 will save even more.
Another insane money-saving tip: let the bathwater stand in the tub for most of the day, and it will heat the bathroom. However, don't do this is you have small children or pets that are likely to fall in. The heat transfer from the warm water to the cold air of the bathroom will work to your advantage, and once the water is cold, you can go ahead and let it out, having profited from that warmth instead of sending it down the drain.
We were using 50 gallons of propane per month even during the summer, which didn’t make any sense to me. During the summer months, we are able to line-dry clothes and only use the gas for cooking and hot water. The culprit had to be our water heater, which is a well insulated, high quality model. So I called up the company that had installed our heating system and got a technician to walk me through lowering the temperature. Most water heaters aren’t so complex, but ours is tied in to our forced air heating system, an intimidating matrix of pipes connected to a burner-thingie, and a digital display with mysterious buttons. Not wanting to mess up the works, I thought I’d best get expert advice on which buttons to push.
It turned out to be quite simple, and I lowered the temp from 130 degrees to 110. Twenty degrees difference! I had read all kinds of warnings about how, if you have a dishwasher, you need to have the temperature set high, but I haven’t had a problem with the hot water set on 110. The dishes still get clean – although I rinse them before putting them in, so there’s no incrusted food for our Bosch dishwasher to remove. Some dishwashers have a “booster” that heats the water, but ours doesn’t. It’s an elegant and nearly silent machine, and it cost a pretty penny back in the days when we had money. The reason we bought such a good one is that we had a cheapo from Home Depot when we first finished our kitchen, and a Hecho in Mexico plastic part burst one night and we woke up to find our kitchen floor flooded. We had to replace part of the floor. Cheap is expensive.
In the first week of October, we had 78 bucks in the bank, and it was going to have to last us till the end of the month. We checked our propane tank level and it was at zero. We couldn’t afford to pay the previous propane bill, which was $285.00 and 60 days past due, so we couldn’t order a delivery. So we got out the electric hotplate to cook with, and we turned the water heater down to 100 degrees. And lo and behold, that is the perfect temperature for a shower. You can shower with full on hot at that temp. We hand washed the dishes. The dishwasher works fine at that temperature, but we were being radical in our reduction of hot water use. Our showers lasted no more than 3 minutes. That's the length of time Hugo Chavez said to use when he scolded Venezuelans about their energy usage. He said, "I showered for 3 minutes and I didn't stink." Hey, Hugo, neither did we. We made it through to the end of the month, paid our previous propane bill, and got a delivery of 200 whole gallons. (We have a 1000 gallon buried tank.)
We put the temp back up to 110, because our big indulgence is taking baths, but in our conservation mode, we only take a bath every other day. We have this big, fabulous two person Jacuzzi tub that we call our “think tank” and since we're self-underemployed, we start each day by taking a bath together. We always seem to come up with great plans in the tub. So now I alternate the temperature. After our bath this morning, I turned the water heater back down to 100 for tomorrow’s shower. I won’t turn it back up till tomorrow night, so that there will be hot water for the next morning’s bath.
Here’s another bonus: for years, we’d had trouble with our tub temperatures. If the handle was turned 1/16th of an inch too far, the water was scalding. An ooch in the other direction, and it was too cold. At 110, you can pour a bath full on hot, and it’s just right for about a half hour soak. It only took us 8 years to figure that out.
Dropping the water temperature down to 110 has lowered our propane usage dramatically, to about 30 gallons per month. I’ll have to see if our alternating schedule of shower/bath, plus alternating between 100/110 will save even more.
Another insane money-saving tip: let the bathwater stand in the tub for most of the day, and it will heat the bathroom. However, don't do this is you have small children or pets that are likely to fall in. The heat transfer from the warm water to the cold air of the bathroom will work to your advantage, and once the water is cold, you can go ahead and let it out, having profited from that warmth instead of sending it down the drain.
Tuesday, November 10, 2009
What is a Loan Modification?
Loan Modifications are for eligible borrowers who can no longer afford to meet their monthly mortgage obligations. Whether homeowners are current, but having trouble making their payments; or whether they have missed payments, the program is designed to make the monthly mortgage payment more affordable, hence the name of the official site: www.makinghomeaffordable.gov
The basic concept is to bring your total home-related payment down to 31% of your gross income.
Borrowers must qualify by answering yes to the following questions:
• Is your home your primary residence?
• Is the amount owed on your first mortgage equal to or less than $729,750?
• Are you having trouble paying your mortgage?
• Did you get your current mortgage before Jan 1, 2009?
• Is your PITIA payment more than 31% of your gross income?
(PITIA being Principal, Interest, property Taxes, Insurance and homeowner’s Association dues.)
www.makinghomeaffordable.gov has a list of HUD counselors who will advise you FOR FREE.
While your application is being considered, FORECLOSURE PROCEDURES ARE STOPPED!
Once you file your application, it will be evaluated by an Underwriter.
My lender asked for the following documents:
• A Hardship Letter
• Personal Income Tax returns for the past 2 years (all schedules)
• Business Tax returns, if applicable
• Bank statement showing income for the past 30 days
• Copy of your homeowner’s insurance declaration page
• IRS Form 4506-T (authorization to request a transcript of your income tax return)
The documents were faxed in so that they are automatically entered into their database. So no need to spend time copying your tax returns.
Try some on-line research before deciding whether you need someone to help with the process. That should only be necessary if you are in an ambiguous situation with a dubious lender, or if the idea of writing a Hardship Letter makes you sweat blood.
With thousands upon thousands of homeowners competing for a loan modification, you should submit your application as soon as you can pull together all of your documentation. Currently, the program is scheduled to end in 2012. (you know, the year the Mayan calendar has predicted doom for us all.)
The basic concept is to bring your total home-related payment down to 31% of your gross income.
Borrowers must qualify by answering yes to the following questions:
• Is your home your primary residence?
• Is the amount owed on your first mortgage equal to or less than $729,750?
• Are you having trouble paying your mortgage?
• Did you get your current mortgage before Jan 1, 2009?
• Is your PITIA payment more than 31% of your gross income?
(PITIA being Principal, Interest, property Taxes, Insurance and homeowner’s Association dues.)
www.makinghomeaffordable.gov has a list of HUD counselors who will advise you FOR FREE.
While your application is being considered, FORECLOSURE PROCEDURES ARE STOPPED!
Once you file your application, it will be evaluated by an Underwriter.
My lender asked for the following documents:
• A Hardship Letter
• Personal Income Tax returns for the past 2 years (all schedules)
• Business Tax returns, if applicable
• Bank statement showing income for the past 30 days
• Copy of your homeowner’s insurance declaration page
• IRS Form 4506-T (authorization to request a transcript of your income tax return)
The documents were faxed in so that they are automatically entered into their database. So no need to spend time copying your tax returns.
Try some on-line research before deciding whether you need someone to help with the process. That should only be necessary if you are in an ambiguous situation with a dubious lender, or if the idea of writing a Hardship Letter makes you sweat blood.
With thousands upon thousands of homeowners competing for a loan modification, you should submit your application as soon as you can pull together all of your documentation. Currently, the program is scheduled to end in 2012. (you know, the year the Mayan calendar has predicted doom for us all.)
Saturday, November 7, 2009
How to write an effective Hardship Letter
The Hardship Letter tends to be the component of the Mortgage Loan Modification process that is most intimidating to applicants.
KEEP YOUR HARDSHIP LETTER SHORT AND TO THE POINT.
Your provider will be reading thousands upon thousands of letters. Yours should be unique, striking just the right balance between detail and summary. They want to know the basic facts of how you got where you are, not your whole life history. One page is ideal, two is fine if needed. Three -- you risk incurring reader hostility.
BE DIGNIFIED, NOT PATHETIC
You'll want to go into detail, but not too much. For instance, you needn't divulge embarrassing or humiliating details about your health issues to the bank underwriter who will be reading your letter. Your medical file is private. Simply stating that you had 'health issues' or 'medical bills' should be enough. You don't need to outline the details of your diverticulitis, your polyps, or your ingrown toenails.
Also, too many pathetic details piled on top of one another can have an unintended comic effect. Your goal is not to be "Queen for a Day" - that old daytime TV show where the most pathetic housewife won the brand new washer/dryer.
When I asked Chase what they wanted to see in the letter, my advisor said, "Tell us what the circumstances were that led to your hardship. But we know." In other words, there was a near-crash of the global economy and everybody's hurting. They know that. All you're doing is personalizing it.
SHOW HARDSHIP, NOT HELPLESSNESS
Your bank wants to know that you'll be able to meet your obligations in the future, once the monthly payment is reduced. Let them know about your plans to make payments, about how tomorrow is going to be different from yesterday.
MAJOR REASONS FOR HARDSHIP
Reduced income
Increased interest, as for instance on an Adjustable Rate Mortgage
Illness or medical bills
Failed business
Military duty
Death of spouse or co-borrower
Divorce or separation
Don't despair if your situation does not fit into the above categories. There are many paths to hardship, just tell them what yours is.
I'm going to give you a sample hardship letter. But do try and personalize it. When I was going to write mine, I looked around on the web and found some forums where people were posting their letters to get feedback. They all seemed to have this line: "Our #1 goal is to keep our home and we would really appreciate the opportunity to do that." I can just imagine the underwriter reading that line for the 10,000th time and running screaming from his office. So please don't copy/paste. Try to put it in your own, natural words.
SAMPLE HARDSHIP LETTER:
Your name
Your address
Date
Lender's name
Loan number
To Whom It May Concern: / or Dear (Lender's name):
Thank you for reviewing the circumstances that caused us to fall behind in our mortgage payments. / or
Thank you for taking the time to review the circumstances that have led to our request for a loan modification.
(in other words, be polite, be gracious, be thankful and get on with it.)
The primary cause for our current hardship is a reduction in self-employed business earnings due to the poor global economy. (or: Due to the recent adjustment in the interest rate on the mortgage I have with your company, I am finding it very difficult to meet the new payment.) (in other words, fill in the blank with your particular situation.)
We feel that a loan modification which would reduce our monthly payment would allow us to pull through this difficult time.
(Now be upbeat about the future: Perhaps you've got something rosy to look forward to if only outside circumstances would cooperate)
I have recently taken on freelance work which I hope will continue to increase my income. / or
Although my employer reduced my hours, when the economy improves I hope to go back to working full time.
(You might add something in here about how much your home means to you, or how you are connected to the area or neighborhood.)
We are very committed to keeping our home. We chose this neighborhood for its school system, and our children would suffer greatly should we lose our house to foreclosure. We are therefore highly motivated to stay current with our payments in the future, and feel strongly that a loan modification will allow us to do that.
Thank you for your help in this matter.
Sincerely,
Borrower's Signature
Borrower's Name
Date
Co-Borrower's Signature
Co-Borrower's Name
Date
Now, was that so very hard? Of course it was. By the time you finish writing it, you'll have a few new gray hairs. And you will be sorely tempted to hire a company just to do that part of it. There's one thing that you will notice about companies that have posted Sample Hardship Letters: many of them make the kind of mistakes in their letters that indicate they are not native English speakers. Run away. Run away fast. There are so many predators out there who are willing to take advantage of you in your hardship. That's why it's probably best to go the official route through a HUD advisor. As Chase told me, companies that help you file don't have an edge with the lender.
And that's because: The final decision will be based on your financial information. If you make too much or too little, you will not get a modification.
I think the best strategy would be to take your total income and figure out what 31% of that is. That's how much your total PITIA payments - Principal, Interest, property Taxes, property Insurance and homeowner's Association dues - should be. Is it within the bank's reach to lower that amount through a modification? If not, is there anything you can do to qualify? Take a part-time job, work freelance.
If the financials are not in line with a modification, the best hardship letter in the world isn't going to obtain one.
So have courage, don't fret, just be direct and to the point, and best of luck writing your Hardship Letter.
KEEP YOUR HARDSHIP LETTER SHORT AND TO THE POINT.
Your provider will be reading thousands upon thousands of letters. Yours should be unique, striking just the right balance between detail and summary. They want to know the basic facts of how you got where you are, not your whole life history. One page is ideal, two is fine if needed. Three -- you risk incurring reader hostility.
BE DIGNIFIED, NOT PATHETIC
You'll want to go into detail, but not too much. For instance, you needn't divulge embarrassing or humiliating details about your health issues to the bank underwriter who will be reading your letter. Your medical file is private. Simply stating that you had 'health issues' or 'medical bills' should be enough. You don't need to outline the details of your diverticulitis, your polyps, or your ingrown toenails.
Also, too many pathetic details piled on top of one another can have an unintended comic effect. Your goal is not to be "Queen for a Day" - that old daytime TV show where the most pathetic housewife won the brand new washer/dryer.
When I asked Chase what they wanted to see in the letter, my advisor said, "Tell us what the circumstances were that led to your hardship. But we know." In other words, there was a near-crash of the global economy and everybody's hurting. They know that. All you're doing is personalizing it.
SHOW HARDSHIP, NOT HELPLESSNESS
Your bank wants to know that you'll be able to meet your obligations in the future, once the monthly payment is reduced. Let them know about your plans to make payments, about how tomorrow is going to be different from yesterday.
MAJOR REASONS FOR HARDSHIP
Reduced income
Increased interest, as for instance on an Adjustable Rate Mortgage
Illness or medical bills
Failed business
Military duty
Death of spouse or co-borrower
Divorce or separation
Don't despair if your situation does not fit into the above categories. There are many paths to hardship, just tell them what yours is.
I'm going to give you a sample hardship letter. But do try and personalize it. When I was going to write mine, I looked around on the web and found some forums where people were posting their letters to get feedback. They all seemed to have this line: "Our #1 goal is to keep our home and we would really appreciate the opportunity to do that." I can just imagine the underwriter reading that line for the 10,000th time and running screaming from his office. So please don't copy/paste. Try to put it in your own, natural words.
SAMPLE HARDSHIP LETTER:
Your name
Your address
Date
Lender's name
Loan number
To Whom It May Concern: / or Dear (Lender's name):
Thank you for reviewing the circumstances that caused us to fall behind in our mortgage payments. / or
Thank you for taking the time to review the circumstances that have led to our request for a loan modification.
(in other words, be polite, be gracious, be thankful and get on with it.)
The primary cause for our current hardship is a reduction in self-employed business earnings due to the poor global economy. (or: Due to the recent adjustment in the interest rate on the mortgage I have with your company, I am finding it very difficult to meet the new payment.) (in other words, fill in the blank with your particular situation.)
We feel that a loan modification which would reduce our monthly payment would allow us to pull through this difficult time.
(Now be upbeat about the future: Perhaps you've got something rosy to look forward to if only outside circumstances would cooperate)
I have recently taken on freelance work which I hope will continue to increase my income. / or
Although my employer reduced my hours, when the economy improves I hope to go back to working full time.
(You might add something in here about how much your home means to you, or how you are connected to the area or neighborhood.)
We are very committed to keeping our home. We chose this neighborhood for its school system, and our children would suffer greatly should we lose our house to foreclosure. We are therefore highly motivated to stay current with our payments in the future, and feel strongly that a loan modification will allow us to do that.
Thank you for your help in this matter.
Sincerely,
Borrower's Signature
Borrower's Name
Date
Co-Borrower's Signature
Co-Borrower's Name
Date
Now, was that so very hard? Of course it was. By the time you finish writing it, you'll have a few new gray hairs. And you will be sorely tempted to hire a company just to do that part of it. There's one thing that you will notice about companies that have posted Sample Hardship Letters: many of them make the kind of mistakes in their letters that indicate they are not native English speakers. Run away. Run away fast. There are so many predators out there who are willing to take advantage of you in your hardship. That's why it's probably best to go the official route through a HUD advisor. As Chase told me, companies that help you file don't have an edge with the lender.
And that's because: The final decision will be based on your financial information. If you make too much or too little, you will not get a modification.
I think the best strategy would be to take your total income and figure out what 31% of that is. That's how much your total PITIA payments - Principal, Interest, property Taxes, property Insurance and homeowner's Association dues - should be. Is it within the bank's reach to lower that amount through a modification? If not, is there anything you can do to qualify? Take a part-time job, work freelance.
If the financials are not in line with a modification, the best hardship letter in the world isn't going to obtain one.
So have courage, don't fret, just be direct and to the point, and best of luck writing your Hardship Letter.
Friday, November 6, 2009
Mortgage Loan Modifications
Having trouble paying your mortgage? Are you staring into the dark, abysmal abyss that is Foreclosure? Before taking that irrevocable step off into the ether, consider Obama's Making Home Affordable plan which is meant to facilitate Mortgage Loan Modifications. Once you have submitted a loan modification application to your lender, the foreclosure process comes to a screeching halt. Which makes this a good stall tactic at the very least, in case you just need a bit more time to come up with your past due mortgage.
However you may feel about the stimulus package, can anyone doubt that keeping people in their homes helps society at large?
Pop quiz: True or False? This is the theory behind banks' willingness to modify your existing mortgage.
Answer: False. Banks and other large corporations couldn't care less about society. They only care about their bottom lines which makes them sociopathic by nature.
However, it IS in their best interest to stop the horrific slide into worthlessness that foreclosures beget. They WANT to work with you. And to ensure that they really want to work with you, there's some sort of carrot coming from the government.
How this affects you the end user: The goal is to bring your total PITIA payment (that's Principal, Interest, Taxes, Insurance and homeowner's Association dues) down to 31% of your income. The bank will do this by modifying your mortgage: lowering the interest rate, or extending the terms (so that you'll probably never actually own the house in this lifetime.)
I happen to have my mortgage with Chase, and they make it really easy - there's a link right on their website. If the entity that owns your mortgage is a shady operation, it might be more difficult. First call your loan provider or servicer and tell them you want to speak to someone about modifying your loan. When the option first became available, it was so new that sometimes the borrower knew more from researching on the internet than the "loan specialists." It seems to be getting easier as time goes by. If the person on the other end of the line stonewalls or tells you that modifications aren't available, you might have to engage the services of one of the many companies that has sprung up to facilitate the process. I haven't used any of them, and can't vouch for them. But first, do some research on your own. The government has made HUD counselors available to advise you for free, and there is a link on the www.makinghomeaffordable.gov website.
You'll also find self-assessment tools to find out if you're eligible. To qualify for a loan modification, you have to answer yes to the following questions:
• Is your home your primary residence?
• Is the amount you owe on your first mortgage equal to or less than $729,750?
• Are you having trouble paying your mortgage?
• Did you get your current mortgage before Jan 1, 2009?
• Is your PITIA payment more than 31% of your gross income?
Loan modifications are available even if you're in bankruptcy, by the way. BUT - at that point, the HUD counselors are NOT available to you. This is because technically, you're represented by your bankruptcy lawyer. Who probably doesn't know diddly about loan modifications.
For those of you who have kept up to date on your house payments, the Making Home Affordable program has something for you, too: a Refinancing that will bring your interest rate down to a mere ghost of its former self. Please note: if you're refinancing, you must be UP-TO-DATE on your mortgage payments when you sit down to sign the papers.
You do not have to be current on your mortgage payments when you apply for a loan modification.
However, you DO have to have income.
The first thing your provider will do is ask you a bunch of questions. And when they get to the part where they ask you if you're employed, you'd better be able to say YES. That can include self-employment. If you can't answer yes, then it may be time to consider getting a job, even if it's at the Pill Factory**.
** there really is a Pill Factory in my township. It's the only big employer nearby. They make nasty substances like Liquid Cocaine and Methadone, and the cancer rate for their employees is really high. When I need to light a fire under my derriere and get motivated to find new sources of income, I drive by. Once I even went in and asked the armed guard at the front desk (their version of a receptionist) for a job application, but they won't let the applications out the door. I wanted to tape it right above my computer, as a cure for writer's block. **
So whatever your equivalent is of the Pill Factory, you may have to bite the bullet and go work there.
You'll be supplying recent bank statements and tax returns, so you may need to boost your earnings before you apply, because the banks aren't in the business of loaning to the indigent -- at least not since the subprime crash, LOL.
And -- don't give them "enhanced" documents, because they're also going to request a form that allows them to get a Transcript of your tax returns from the IRS.
It will take your mortgage provider 30 to 90 days - at least - to review the documents and make a decision. They may also have to inspect the premises to assess whether the property has been maintained.
Past due mortgage payments will be rolled into the total amount due, or tacked onto the end of your mortgage. Isn't that nice? To have that deferred to 40 years from now, when we hope we will still be alive, and also better able to keep up with our mortgage payments.
Another odd fact: you'll probably be faxing in your document. That's because the bank doesn't want to have to scan all those pages. When you fax it, it's automatically scanned in.
My next post will be about the HARDSHIP LETTER, that magical document that is a window onto the borrower's soul, and a requirement of your loan modification application.
Right now, I have to go eat a delicious yet dirt-cheap meal. In this age of inflated food prices, no small feat.
If you don't see what you need, post a comment and I'll respond, but I hope this has answered your questions about Mortgage Loan Modifications.
However you may feel about the stimulus package, can anyone doubt that keeping people in their homes helps society at large?
Pop quiz: True or False? This is the theory behind banks' willingness to modify your existing mortgage.
Answer: False. Banks and other large corporations couldn't care less about society. They only care about their bottom lines which makes them sociopathic by nature.
However, it IS in their best interest to stop the horrific slide into worthlessness that foreclosures beget. They WANT to work with you. And to ensure that they really want to work with you, there's some sort of carrot coming from the government.
How this affects you the end user: The goal is to bring your total PITIA payment (that's Principal, Interest, Taxes, Insurance and homeowner's Association dues) down to 31% of your income. The bank will do this by modifying your mortgage: lowering the interest rate, or extending the terms (so that you'll probably never actually own the house in this lifetime.)
I happen to have my mortgage with Chase, and they make it really easy - there's a link right on their website. If the entity that owns your mortgage is a shady operation, it might be more difficult. First call your loan provider or servicer and tell them you want to speak to someone about modifying your loan. When the option first became available, it was so new that sometimes the borrower knew more from researching on the internet than the "loan specialists." It seems to be getting easier as time goes by. If the person on the other end of the line stonewalls or tells you that modifications aren't available, you might have to engage the services of one of the many companies that has sprung up to facilitate the process. I haven't used any of them, and can't vouch for them. But first, do some research on your own. The government has made HUD counselors available to advise you for free, and there is a link on the www.makinghomeaffordable.gov website.
You'll also find self-assessment tools to find out if you're eligible. To qualify for a loan modification, you have to answer yes to the following questions:
• Is your home your primary residence?
• Is the amount you owe on your first mortgage equal to or less than $729,750?
• Are you having trouble paying your mortgage?
• Did you get your current mortgage before Jan 1, 2009?
• Is your PITIA payment more than 31% of your gross income?
Loan modifications are available even if you're in bankruptcy, by the way. BUT - at that point, the HUD counselors are NOT available to you. This is because technically, you're represented by your bankruptcy lawyer. Who probably doesn't know diddly about loan modifications.
For those of you who have kept up to date on your house payments, the Making Home Affordable program has something for you, too: a Refinancing that will bring your interest rate down to a mere ghost of its former self. Please note: if you're refinancing, you must be UP-TO-DATE on your mortgage payments when you sit down to sign the papers.
You do not have to be current on your mortgage payments when you apply for a loan modification.
However, you DO have to have income.
The first thing your provider will do is ask you a bunch of questions. And when they get to the part where they ask you if you're employed, you'd better be able to say YES. That can include self-employment. If you can't answer yes, then it may be time to consider getting a job, even if it's at the Pill Factory**.
** there really is a Pill Factory in my township. It's the only big employer nearby. They make nasty substances like Liquid Cocaine and Methadone, and the cancer rate for their employees is really high. When I need to light a fire under my derriere and get motivated to find new sources of income, I drive by. Once I even went in and asked the armed guard at the front desk (their version of a receptionist) for a job application, but they won't let the applications out the door. I wanted to tape it right above my computer, as a cure for writer's block. **
So whatever your equivalent is of the Pill Factory, you may have to bite the bullet and go work there.
You'll be supplying recent bank statements and tax returns, so you may need to boost your earnings before you apply, because the banks aren't in the business of loaning to the indigent -- at least not since the subprime crash, LOL.
And -- don't give them "enhanced" documents, because they're also going to request a form that allows them to get a Transcript of your tax returns from the IRS.
It will take your mortgage provider 30 to 90 days - at least - to review the documents and make a decision. They may also have to inspect the premises to assess whether the property has been maintained.
Past due mortgage payments will be rolled into the total amount due, or tacked onto the end of your mortgage. Isn't that nice? To have that deferred to 40 years from now, when we hope we will still be alive, and also better able to keep up with our mortgage payments.
Another odd fact: you'll probably be faxing in your document. That's because the bank doesn't want to have to scan all those pages. When you fax it, it's automatically scanned in.
My next post will be about the HARDSHIP LETTER, that magical document that is a window onto the borrower's soul, and a requirement of your loan modification application.
Right now, I have to go eat a delicious yet dirt-cheap meal. In this age of inflated food prices, no small feat.
If you don't see what you need, post a comment and I'll respond, but I hope this has answered your questions about Mortgage Loan Modifications.
Surviving Sudden Poverty
Welcome to Surviving Sudden Poverty. The New York Times recently identified a new writing genre called "Recession Porn." This is my contribution to the genre.
I'll tell you how to overcome your initial panic as you slide from a formerly wealthy member of the upper middle class to a member of the Well-Bred Poor. Who knows - you might possibly even slide into Noble Savage status. The slide should be less like a cascade down a razor blade into a vat of alcohol, and more like a rebirthing into a new and better you. I'll share tips and techniques for navigating the treacherous waters of the newly purchasing-challenged. What's important is to keep it all in perspective, keep smiling, stay healthy and happy, do it in style and for heaven's sake, stay away from the bright white light that beckons.
I'll tell you how to overcome your initial panic as you slide from a formerly wealthy member of the upper middle class to a member of the Well-Bred Poor. Who knows - you might possibly even slide into Noble Savage status. The slide should be less like a cascade down a razor blade into a vat of alcohol, and more like a rebirthing into a new and better you. I'll share tips and techniques for navigating the treacherous waters of the newly purchasing-challenged. What's important is to keep it all in perspective, keep smiling, stay healthy and happy, do it in style and for heaven's sake, stay away from the bright white light that beckons.
Subscribe to:
Posts (Atom)
