Mortgage Plan to Help Homeowners – $26 Billion Settlement with Big Banks

If you’re wondering when help will arrive for your underwater home, on February 9th, 2012, a giant step forward was taken on your behalf.

The Obama Administration announced a settlement with five of the largest banks, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, and attorneys general in all states with the exception of Oklahoma.

The $26 billion foreclosure settlement brings to a close the litigation surrounding the use of robo-signing in the foreclosure process and may provide much needed relief for many of the nation’s underwater homeowners.

Background

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Obama Mortgage Relief Refinancing Plan – A Tax on Big Banks and More

We Can’t Wait

That’s the new slogan that the Obama Administration is trying out, presumably thinking of the campaign as Obama approaches the full force of election season.

In Las Vegas, one of hardest hit housing markets in the United States, Obama said, “we can’t wait” for an increasingly dysfunctional Congress to do its job and provide relief for the millions of Americans underwater on their mortgages.

Obama went on to say that the housing bubble was the greatest cause of the current economy and that millions of Americans have continued to responsibly pay their mortgage even though their home is worth less than the value of the loan.  In his recent State of the Union address, Obama laid out a plan to help underwater homeowners.

Here’s how the mortgage relief plan would work. Continue Reading

The Payday Loan Trap

It’s true: A payday loan provider actually sponsored the Financial Blogger Conference that took place in Chicago not too long ago. Not only did the payday loan company sponsor, but a representative actually appeared on a panel.

I’m not going to lie.  I still think he was pretty brave to get up there and tell a bunch of financial bloggers who hate payday loans that he was a payday lender.  He did try to talk up the fact that the provider also provides prepaid debit cards, but everyone zeroed in on the payday loans.

I felt bad for the guy as he tried to explain that payday lenders provide a needed service to a certain segment of the population.

Obviously, payday loans are in demand, since there are plenty of providers that seem to be doing well enough.  While a payday loan might be just the thing to hold you over if you don’t want to be kicked out of your house, or have the power turned off, you run the risk of getting caught in the payday loan trap. Continue Reading

How We Found Over $600 to Snowflake on Our Debt in 7 Days

My husband recently completed his Ph.D., and he has since taken on a full-time job.  Now that he is settling into his career and bringing in more money than he did with his assistantship, we are ready to tackle our debt, which includes student loan and credit card debt.  We recently wrote up our debt repayment plan and found that after minimum payments, we only had $2.69 extra to apply to our debt snowball.  Using this basic formula, we would be completely debt free by February, 2017, roughly 5.5 years from now.

However, we don’t want our debt repayment to stretch out that long.
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Find the Money to Pay Down Debt

Many of us, when looking at the debt we have, feel despair: How is it possible to pay down so much debt? When my husband and I were first married, I had credit card debt, and it didn’t take long for him to get into the spirit of using credit cards, since we were poor students without jobs.

A couple years later, we were staring at the bills and wondering how we ended up with so much credit card debt.  We had income by then, but it wasn’t much.  We were already so careful about our spending!  How could we cut back even more? How could we find the money to pay down debt?

The cold, hard truth, of course, was that we really weren’t being careful with our spending.  I had an “ah-ha” moment when I read a book my mother gave me, Debt Free on Any Income.  The book suggested that studies show that the average household wastes between 10% and 15% of its monthly income.  After taking another, more honest, look at our finances, it became clear that there was still plenty of room in our budget.

All we had to do was find the waste and apply it to our debts. Continue Reading

Pay Off Debt or Save? That is the Question

If you’re a typical American, you probably have some sort of consumer debt and are actively saving your money either in stocks or in a general savings account.  Unfortunately, those two things don’t go hand in hand.  Deciding to pay off debt or boost you savings is a tough choice.  The best decision for you might not work well for someone else.  It is entirely dependent on where you are at financially.  Let’s dig deeper and take a look at some of the positives of each scenario: Continue Reading

The High Price of Professional Degrees on Your Finances

There was a time not so long ago when many parents wanted their children to become lawyers or doctors because of the prestige and high salaries those positions garnered.  We still often think of lawyers or doctors being wealthy, but behind the scenes, there can be a dramatically different story.  There can be a high price to a professional degree.  Read the following situations to see what I mean.

A Law School Drop Out

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