Beware of Mortgage Modification Assistance Companies

Behind on your mortgage? Need some help? Just pay us a huge upfront fee and we’ll guarentee to save your home from forclosure, unless of course, we can’t. Then you’ll lose your house and your money! Sounds good right? Please. Remember the old adage “If it sounds too good to be true, it probably is.”

Mortgage modification assistance companies are popping up all over the country with promises of saving your home from forclosure by reducing your payments and possibly your principle balance. They ask for an upfront fee for this “help”. They even offer a guarentee if they can’t help you, but that’s if you can find them when your home is foreclosed on. If you do a search online, you’ll find a number of warnings from states about these companies. Attorneys General all over the Country are trying to track down these companies to sue them on behalf of their residents.

If you are having trouble with your mortgage payments, you need to work on this yourself. You can’t push this off to someone else. Start by contacting your mortgage company. Most mortgage companies now have a mortgage relief department. Before you call, make sure you have copies of your last two tax returns and copies of recent paystubs or proof of other income. You should also have a written budget and a list of your other debts with the minimum payments dues. The more information you have when you call, the better.

If you are behind on your payments or believe you will soon be behind on your payments because of a lost job, medical bills or other circumstances, you need to start a conversation with your mortgage company NOW. Don’t wait until they contact you. Being proactive will be your best chance to keep your house.

Could it be a payment problem?

You’ve hunkered down. You’re eating .33 a box mac and cheese and you’re working two jobs but you still can’t make ends meet. You may have a payment problem.

This is the point where you need to look at your payments. Do you have a car payment? How much of your take home pay is that car payment? What could you do if you didn’t have that car payment? Even if you are upside down in your car, you may want to sell your car and get a loan from a credit union to cover the difference. If you owe $10,000 on your car, you could probably sell it for $7,000 and borrow $4,000 from the credit union. This will give you $1,000 to purchase a crappy car. Having the crappy car and paying off $4,000 over 2 years will cost you much less than trying to carry the $10,000 loan.

If it’s your mortgage that’s the problem, you need to seriously consider getting rid of the house. I know that’s not something you want to consider but if you have a $2,000 a month mortgage payment when you could rent for $1,000 a month, think how much better your budget would be if you had that extra $1,000 a month in your pocket. Think how fast you could get rid of the rest of your debt.

If you really want to get ahead, you’ll need to make some significant changes in your life. You cannot keep this debt cycle going. Remember that this is temporary. If you are struggling to make your payments and dig yourself out of debt, this may be an option for you.

Stop being broke, part 1: The problem

As this idea is forming in my head I know I am probably speaking mostly to the choir. Most people who read personal finance blogs have already made the decision to be weird and not live like everyone else. This is for those of you who might need a bit of a nudge or have friends or family who might need a bit of a nudge.

If you are living paycheck to paycheck and racking up a little bit more credit card debt than you had the month before and you feel hopeless, there is a way out. This is not a get rich quick scheme but it may be a get rich someday way of life. The first step, just like AA is to recognize that there is a problem. You don’t have any savings, you have car payments and debt, maybe your mortgage is a  bit too much, forget about retirement accounts and saving for college for your kids. That’s not even in the realm of possiblity. Are we starting to see a problem here?

I know things might look bleak. You may have lost your hope years ago. Today is the day to get that hope back. Today is the day that you make the decision to  change. Today is the day you decide that you don’t want to be  broke forever, that you want to stop using credit cards and dig yourself out of the mess you’re in. If you make that pledge, I will help you. I will do everything I can to help get you on the right road. Realize now that this is going to be hard work. You are going to have to sell stuff, cut your spending, maybe get a second job or get some education. This will not be easy, but is what you’re doing right now easy? Is the stress you feel when the bills come easy? Will living like this for the rest of your life be easy?

If you are ready to start living your life like the few, start today by saying “Enough is enough. I don’t want to live like this anymore.” Say it all day. Keep saying it to yourself. I will help show you the way.

This is the first in a series “Stop being broke”. On Monday, I’ll discuss the second step. If you have questions or are really pumped to get started, you can comment here or send an email to kristin@klingtocash.com. Put “Enough is enough” in the subject line.

Investing in your retirement and saving for your future

I’ve been watching the market, as I’m sure many of you have, wondering how low it will go.  The only money I have is in the market, since we are not in a position where we have excess money to invest. I am not a financial planner and my advice should not be relied upon by everyone, but this is where my money would go.