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Scammers pretend to help those facing foreclosure

Homeowners who are facing foreclosure have become vulnerable targets for scammers.

According this May 23 article on Forbes.com, delinquent homeowners are getting tricked by brokers who promise to save them from foreclosure, but ultimately make of with thousands of dollars in fees or what home equity was left.

If you, or anyone you know, is facing financial difficulties and is in danger of losing his or her home, please make sure you know what kind of a company you are dealing with before you sign anything.

Surely you’ve heard the saying, “An ounce of cure is worth a pound of prevention.” This is one of those times where that saying definitely has meaning. There are some easy steps you can take to ensure you are dealing with a reliable company.

Research the company. Check their web site and any brochures or information they can offer. Ask questions. Ask for references from other customers who have used the company’s service. If they seem to avoid giving specific answers or references, you may want to reconsider doing business with that company.

Make sure you get all the paperwork involved with your potential transaction. Read all of the fine print and ask questions about anything you do not fully understand. Do not be afraid to ask questions. And do not sign anything that you don’t understand.

Check the company with the Better Business Bureau and your state Attorney General’s office. See if there are any complaints against the company and if, or how, those complaints were resolved.

Also, check with HUD, the U.S. Department of Housing and Urban Development, which can direct you to reliable, HUD-approved agencies in your area that offer housing counseling. You can also call HUD to find an agency at (800) 569-4287.

Rely on your gut instinct. Remember the old adage of, “If it seems too good to be true, it probably is.” If something feels wrong to you or seems too easy, take a step back and reassess your situation.

Remember there are reliable companies that can help you with your housing situation. Non-profit agencies like Advantage CCS (which happens to be HUD-approved) offer free housing counseling, including loss mitigation, for those who are facing foreclosure.

One other thing that I want to stress: It’s never too soon to get help. If you find yourself struggling to make your mortgage payments, don’t wait until you’re receiving foreclosure notices to call for help. Call for help at the first sign of a problem. Don’t ignore the problem, and don’t ignore paperwork from your lenders.

Thoughts on our “cheap” gas

I might have actually had steam coming out of my ears as I read this article on Slate.com by Robert Bryce.

He’s making the case that $4 a gallon gas is cheap. I agree that compared to what consumers in Europe are paying, yes, we have cheap gas.

However, there are some points in this article that, in my opinion, are absolutely off-base and even absurd.

The first thing that really bugs me is that he compars the price of gas at $4 a gallon to what a venti latte from Starbucks or a Budweiser would cost per gallon. That happens to be $23 and $11, respectively.

That’s great. But guess what? I’m not running my car on Starbucks or Budweiser! I go through roughly 15 gallons of gas in four days. There are 128 ounces in a gallon. I would have to drink over six lattes a week to equal just one gallon of Starbucks. It’s a ridiculous analogy that doesn’t compare apples to apples.

Plus, I can — and have — cut back on my Starbucks consumption because of how much I’m paying to fill my gas tank. Cutting back on Starbucks is an option. I still have to get to work everyday, so cutting back on most of my driving is not.

The other point Bryce tries to make is that the cost of gas is minor compared to the overall cost of car ownership. I would challenge at least part of that theory as well.

With the latest gas prices, I will spend approximately $3,480 a year on gas.

My insurance is only $810 a year. My maintenance costs this year, including registration and new tires, breaks and rotors for my car, will be about $910. (Keep in mind the tires and breaks aren’t an expense I incur every year.)

Add all of those up and I’m at $1,720 for the year, or half the cost of my gas.

Now I will admit that if you factor in my monthly car payments and add it in with my other expenses, over the course of a year it’s considerably more than the cost of gas. However, the amount I’m spending per month on gas is creeping uncomfortably close to the amount of my monthly car payment, and that’s a hard pill to swallow.

I really dislike calling gas a “minor expense.” I don’t know what kind of car or car payment Bryce has or how much gas he actually uses, but to me over $3,400 a year is not a “minor expense.”

It may be true that we’re all going to have to get used to gas at these prices. It may be true that we will be forced to conserve, and conservation would have good benefits for our Earth. It is true that we pay less for gas than many other countries.

All of that doesn’t mean that we have to trivialize the economic situation we’re in. It doesn’t mean we should compare gas to Starbucks or downplay what the financial impact of all-time high gas prices is doing to our families who still have to drive to work, and take their children to doctor’s appointments, and buy groceries, and live their lives.

Financial mistakes

Most people don’t wind up in debt over night. There is usually a series of bad decisions or unexpected circumstances that start the debt ball rolling.

Still, some of us can think of one big financial mistake that makes us wish we could have a “redo” of the situation.

I’m going to share my whopper of a financial mistake and what I learned from it.

Upon graduating from college and getting my first job, I knew I had to buy my own car.

And I knew exactly what car I was going to get.

I don’t want to disparage any automakers, so you’ll have to settle for some basic details. It was a small, yet not cheap, 5-speed convertible. I had wanted this car for years.

I went to the dealership. I drove the car. I had to have the car. Before I knew it I was signing papers.

Here’s a question a person who has any logic when it comes to finances would ask: “How is one who has just graduated with thousands of dollars of student loan debt and has a job where one makes $18,000 a year supposed to afford a car that is well over $20,000?”

The logical answer, of course, is that one couldn’t afford the car … At least one couldn’t afford to buy it outright. One could (and this one did) take out a lease.

More car for less money. Perfect!

Not so much as it turned out. The payments were still too big and sucking up a huge part of my paycheck, and the insurance was very expensive.

It also turned out that the car was a lemon, broke down constantly, and naturally most of the repairs were not covered under the warranty. To top things off, my then-job ended up entailing a lot more driving than I realized it would. I went way over the allotted miles.

I ended up buying out the lease and refinancing in order to avoid huge charges for going over the allotted miles. I ended up stuck with the albatross that was my car around my neck for over six years. I shelled out thousands upon thousands of dollars for repair work during that time. I still owed a bit of money on it when I had to get rid of it.

I financially crippled myself with a car.

I also learned some very valuable lessons. When I bought my next car I first determined how much I realistically could afford to pay on a car loan. I knew that a lease was not a good option for my lifestyle and didn’t even consider it as an option. I read tons of information about the cars on the market and talked to people who actually owned them with the goal of finding the most reliable car for my money.

I think I did a much better job of choosing an affordable, reliable car that will accommodate my changing lifestyle. I think I can do even better the next time because I will make sure I have a paid-off vehicle to trade in and some extra money to put towards my purchase.

I wish I had bought a used car right out of college and been more aggressive about saving money.

If only hindsight were 20/20 …

What was your worst financial mistake? What lessons did you learn from it?

Self-storage items sold to highest bidder

On Wednesday I wrote about people selling their possessions in order to pay the bills and put gas in their cars. Yet another trend is emerging from the subprime mortgage meltdown and all-around tougher financial times: Self-storage auctions.

The New York Times ran this story about the increasing frequency of auctions at self-storage facilities. The auctions are held by the facility after the unit’s renter is delinquent on his or her payments for a certain period of time.

Bidders get barely a glimpse into the storage unit before they place their bids. Only after someone wins the bid do they get to find out exactly what’s inside.

For people who put their items into storage after a foreclosure, I would imagine it would be particularly difficult to see what amounts to nearly all of your possessions auctioned off, often for a minimal price.

Some people have even been found illegally living in their self-storage units after losing their homes.

On the flip side, some people are turning another’s misfortune into profit. Many bidders wade through their new items and resell them at flea markets or on online auction sites.

Share your thoughts about self-storage auctions. Have you ever attended this type of an auction? Have you ever had your possessions sold?

To sell or not to sell …

Economically, times are tight for many people right now.

Families are struggling to cover the rising cost of gas, food, utilities and other things that are life necessities.

Out of the economic strife, a new trend is emerging. People are selling off their possessions.

I first noticed this happening with jewelry, gold in particular. Gold has been trading at all-time highs. I began seeing articles about people pawning their old gold in exchange for good old green bills.

I was intrigued by this and searched through my old jewelry box to see if I had any trinkets of value. I found a local appraiser who informed me — much to my disappointment, but not to my surprise — that my old gold was worth very little. He then proceeded to open his safe and hand me several large, and rather heavy, envelopes.

“It’s all jewelry people have brought in to sell this week,” he said. “I’ve had maybe one or two buyers lately. No one is buying. Everyone is selling.”

I left with my worthless jewelry, mentally sorting out what goods I had stashed away that could possibly be worth something.

It’s not that I’m so cash-strapped that I have to sell things. But, like everyone else, the rising costs are impacting my budget, and it would be nice to have a little help to offset some of those costs. Also, I have a lot of stuff that hasn’t seen the light of day in a decade or more. Since I’m about to get married and acquire a bunch of new stuff, it seems like an opportune time to clean house.

The prices of a lot of my old collectibles, such as plates and china dolls collected as a kid, have dropped considerably. The demand for these once valuable items is down because; say it with me, “Everyone is selling.”

I have a few things that may be worth something. I have a lot of things that might not be worth a lot of cash, but could be very useful to others, like dishes and gently worn clothing. I will donate those items to the Goodwill.

I came across this article on MSN.com which explores the topic of people who are selling their possessions.

One thing the article mentioned is that donations to stores like the Goodwill are down because everyone wants to sell and far fewer people want to donate. Keep in mind, you can get a receipt for your donations and deduct the value of them on your taxes, so ultimately you’ll get something back.

The article also made me feel a bit sad because there are people out there who are selling possessions they have a deep attachment to in order to buy food or pay the electric bill.

I say it all the time, so many things are interconnected. One problem can cause a trickle-down effect for so many people. We’re seeing this right now.

Have you sold, or are you considering selling, some possession to pay the bills? Have you noticed any economic trickle-down effects that are impacting your community? Share your thoughts.

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