Saturday, September 20, 2008

Payment Plan and Credit Report

I'm on a 5-YR Balance Liquidation Plan (BLP) with nine of my creditors. Here's what one of them looks like on my credit report showing the three agencies:

UNVL/CITI 08/08 02/91

TU is TransUnion
EFX is Equifax
XPN is Experian

My AMEX reports:
Legally paid in full for less than the full balance

Cut out the second phone line.

I cut out my home office phone. That'll save about $70 a month. I can use my home phone as my business phone. I only need it for conference calls and faxing every now and then. Can't wait to feel the savings between:
- $70/month cancelled home office phone
- $25/month cancelled home security system
- $65/month cancelled some phone company services
- $160/month stopped lottery spending

That's $320/month added back into the budget!

Lottery - stop wasting money

I was hoping for an escape from all this debt. I know it's stupid to spend money on lotteries. I got a little crazy because I've been hearing about layoff's. My brother-in-law might get laid off from his company after working for them for 30 years - at least he'll get a pension.

So I was foolishly wasting money on the state lottery - I figured about $160 a month. So I stopped that. I need that $160 for other things like paying off my debt.

ChaCha Guide - discontinue

I tried ChaCha for a while as a Guide. For four hours work I averaged $1.50 an hour. My time is not worth $1.50 an hour. I can make better use my time that will pay better. So I'm going to discontinue that endeavor.

Slow progress

My debt is now down to $107,000. That's progress but it sure is slow.

I've been monitoring my spending habits. I've got this huge amount of money that I owe to creditors and family. I don't "own" a house anymore. My savings are gone. And my budget doesn't allow anything to be saved.

But I've got good health, kids are going to Community College, my wife is great and we're both working. And I have faith in God again.

I've always believed in God - I just haven't been a good practicing Christian for a lot of my years. I know that if I had been following Christ's principles that I would have avoided a lot of mistakes I made in my marriage and in my spending. Who knows what other challenges I would have faced. Life has many paths to choose from and each have their own obstacles.

Friday, September 5, 2008

Cant sleep at night

We live with a street right behind us. Every night I listen to traffic, motorcycles and sometimes sirens. Every morning I wake up to cars starting around 5:15am. At least that's the time my wife and I wake up. Its so hot here - 97 degrees today - that we always sleep with the windows open at night. Just another thing I want to get rid of.

When we first moved here the street behind us dead-ended 3-4 houses down from us. And the city hadn't built the local high school nearby - 10 minute walk. And there were only acres and acres of land at the end of our street where now there are 200-300 new houses - at least new as of 4 years ago. And the sports park wasn't built across from the high school either.

Oh well, cant wait to move away from all this. And get into a quiet area for a change. Hopefully in 2009 if all our planning works out.

Status - Elance, home security, budgeting

Some of you might wonder why I post this blog. If I didn't I'd go crazy. Sometimes I think I am going crazy. Every night - and I mean every night - I end up staring at my budget spreadsheet.

This week I cancelled the home security monitoring system. Saved $27/mo by doing that. Gotta stop wasting money. Some good news: that Elance project paid me another $90 this week. I'm going to keep working that as a 2nd job. My probation ends October 1st. I'll see what happens then. But it's pretty cool. I get to blog about technology and get paid for it too. It's paying $45 a week for one post a week of a 400-500 word blog post on technology - not related to my work so no conflict.

CashCall loan

Back in June I had to take out a $2500 CashCall loan at 96 percent APR. Sucks.

But it is my number one priority right now. I've got it down to a $1978.00 balance.

I expect to pay back another $400 on 9/15 and then another $600 at end of month.

I think the US govt. should outlaw PayDay loan companies. They do more harm than good to Americans. Some of these PayDay operations are overseas. One I know of is in France. They're just taking American's money at outrageous rates/fee. I'm sure they laugh about ripping off Americans.

Dave Ramsey show

I now watch the Dave Ramsey show whenever I can. I also signed up as a member on the web site. Lot of good forums and good information there.

He talks about the Total Money MakeOver approach to paying off your debts and building emergency funds. I used to have so much saved up a long time ago. It's pathetic how fast your savings can dissappear when you have layoffs and also get stupid with your money.

Dave Ramsey has a seven step plan (Baby Steps - BS) for getting out of debt, staying out of debt and prospering:
BS1 - build $1,000 emergency fund
BS2 - Payoff ALL your debts - start with lowest balance first
BS3 - build 3 to 6 months emergency fund
BS4 - Invest 15% of your income
BS5 - College Funding
BS6 - Payoff your home early
BS7 - Build Wealth, Give

I completed BS1. Now I'm working on BS2 - should take me 4 years. Then on to BS3 to 7.

Thursday, August 21, 2008

Slowly getting better

Well, I've been posting more slowly as we continue to work our way out of troubles. Here's what's been happening:

1. I received a very good commission check in July that caught me up on many small debts and has actually allowed me to have a small amount in savings. I'm still living paycheck to paycheck but I at least have a small amount in the bank that has not been spent between two paycheck periods - that's progress for me.

2. I've only got another $220 on a PayDay loan that will be paid off on 8/29. That'll be my last PayDay loan God willing.

3. I paid off about $3000 in PayDay loans between 7/29 and 8/21. And I paid off another $300 credit card. I also paid off a $500 short term loan from my bank that was costing me $50 every time I renewed it - sometimes it cost me $250 in one month and I've been doing it all year. But I did end up paying $200 in NSF fees to my bank last month. It is so hard to work your way out of debt once you start spiraling downward with late fees and Insufficient Funds Fees not to mention high interest charges.

4. I contacted American Express Credit Bureau department and faxed them letters, credit card statements and payment receipts to prove that we settled for "full payment" on my wife's credit cards back in April 2007. I requested that they stop reporting a balance of almost $10,000 to the credit reporting agencies. I requested that they instead report a $0 balance. They said it will take them 30 days to review our paperwork against their records. I should know the outcome next month.

5. I continue to pay about $2300 a month on my Balance Liquidation Plans to my last sixteen credit cards. I've got another four years to go before I have no credit card debt. Yes, my debt right now is about $110,000.

6. I sucks that my kids can only attend Junior College while many of their friends either have full scholarships (ROTC pays really well) or their parents are rich enough to buy condos near their kids's universities.

7. I applied for FAFSA ( student aid grant for my daughter but we were turned down. So, I'm not even going to try for my son. I'm not going to allow them to start getting into debt by taking out any student loans. And I and my wife both tear up any credit card applications that we find in the mail that are addressed to either of my kids. Thank God I and my wife both have jobs. We're able to at least - thanks to my last commission - pay for their registration and books at the local Junior College. The book costs are averaging $100 per book! The books for a 12 unit semester cost more than their registration! Oh well, at least they are headed in the right direction.

8. I did have to borrow another $2000 last month from a family member. That sucked. But I've paid back $400 of that loan. I'm paying back $100 a month to my family - indefinately. I'll never be able to pay back all that money. They kept me out of foreclosure and out of bankruptcy. At least we were able to sell our house through a short sale. I've been very very fortunate in those respects. All I can do now is get through each day.

9. Oh, I finally got paid for some freelance work on I was very happy about that. I got paid $45 for some work. I hope it continues.

Monday, July 21, 2008

Brown lawns

My wife and I have a new hobby. In our free time we drive around our area and look for brown lawns. There are many houses out here that have brown lawns but no For Sale signs up - yet. Still lots of Bank Repo signs and Bank Owned signs out here.

We know of houses that have sat with brown lawns for nine months and never a For Sale sign - in fact we have one at the end of our street. A real nice looking house too.

We saw a hilarious one the other day: a house with a Bank Repo sign on the front lawn and then right next door was a development that had been stopped while in progress! I took a picture with my cell phone camera but it's not sharp enough to post. We're going back there this coming weekend and I'll get a hold of a digital camera for that shot.

We've driven down other residential streets out here and I can find four or five streets that have half the residences For Sale - no lie. We've been down other streets where there are four (4) houses in a row that are up for sale - two of them with brown lawns. We've seen many streets that will have two houses right next to each other or maybe directly across the street from each other that both have brown lawns.

The lenders and brokers out here made a lot of money from reselling bad loans that ended up as Bank Repos and/or Foreclosures.

Out here it will probably take 15 to 20 years for house prices to ever be the same as 2006 prices.

My wife and I just keep watching house prices and waiting for the median house price to equal, or be less than, 3x's the median household income for a given area (zip code). That will be a return to normalcy, traditional house prices and traditional lending standards. - part time work

I've been bidding on projects on I have an agreement with someone for some part-time work but it won't start until September. It will help to add some part-time income that will also allow me to work from home in the evenings and on the weekends.

Wednesday, June 18, 2008

Payday loans - still need 'em

Well, my commissions from work are about 30% of what I received last year during the first six months of the year. So I've had to start borrowing from PayDay lenders again. I started borrowing again back in early May. The rates are in the neighborhood of 785% APR - it just chokes me financially. If I stop to think about it then I begin to panic and I dont have time for that. I've got to figure a way to start bringing in extra income. I've applied to Home Depot and a couple other places but didn't hear back from anybody. In the meantime I am going to have to ask a friend for a loan. I can pay 25 to 35% APR but not 785% APR - it's killing me.

Sunday, June 8, 2008

No affair

Well, I must be going crazy. There is no affair. But that week I was really depressed and I could just not help feeling this feeling that I cant describe right now - just this deep, great sadness. Earlier in the week, that week of May 25th, I had gone with my Mom & Dad to visit the graves of my uncle and one of his friends. The cemetaries were so peaceful and beautiful. And it was a good day spending time with my parents - I hadn't done that in a very long time, just spending the day with them. When you get into your fifties, like I am, well, I just haven't done that in such a long time since I've been busy with raising my family.

Wednesday, May 28, 2008

Financial troubles will lead to affair

I can tell that my wife and my landlord are going to have an affair. He came over here yesterday at lunch time - she told me - to bring over some envelopes and stamps for our rental payments. My wife only gets 30 minutes for lunch so the timing has to be pretty focused. I was out of town on business so it allows them time to get more familiar with each other.

Besides, when he's been here a couple times I can see the eye contact between them. It makes sense - all I have to offer my wife anymore is my salary. I dont own a home anymore. I dont have any savings anymore. After 22 years of marriage and two kids all I can offer my wife is my salary plus bonuses. I've been financially decimated. All she ever does now is make comments about how she wishes we were rich. I'm trying as hard as I can to keep it together.

Our new landloard is about the same age as me and we actually have a resemblance to one another. Plus he's happy and likes to make jokes. Why not? He doesn't have any financial problems like me. Heck, he owns this house plus more. And he's financially stable. He can offer her a future, I cant anymore. She can depend on him not me. Twenty-two years ago I had a lot to offer a woman - a stable marriage, a dependable man, steady employment, financial upside. we even prospered for a while. I never strayed, I even turned down a couple of women co-workers. But now I'm in my early fifties with only my paychecks to offer a woman, much less my wife.

She's already told me she cant count on me. She doesn't trust me. All I've ever done was try to provide for my family. I just try to make ends meet. She wanted to live in a brand new house fifteen years ago and I did it. She wanted a mercedes-benz and I did it. Not much more to say.

I know her sisters will support her. In her family blood is thicker than water.

Sunday, May 25, 2008

Paid In Full and Credit Report after Short Sale

Someone asked me a question about this. Here's my reply:

You must have your realtor request that your 1st and 2nd mortgagors give you a letter stating that your account has been "...Paid In Full." I think "Account Settled" is also just as good but you would need to speak to an attorney about that. If you can, get them to also state in your letter something along the lines of "No balance due." and maybe something about they "release all liens".

I pulled my credit reports: TransUnion, Experian, Equifax.

Experian shows this for both my 1st and 2nd:
Payment Status: "Legally paid in full for less than the full balance"
Comments: "Election of remedy - reported by subscriber"
(also lists it as a "Key Derogatory") shows my 1st as "Improved account" for TransUnion shows my 2nd as "not yet reported" the change to TransUnion shows my 1st as Settlement for Experian shows my 2nd as Settlement on Experian

TransUnion lists the Condition as "Derogatory" for the 1st but Pay Status is "Current"
Experian lists the Condition as "Closed (Paid)" for the 1st and no Pay Status.
Experian also shows it as a CO - Chargeoff.
Equifax lists the Condition as "Closed (Paid)" for the 1st and Pay Status as "Current"

TransUnion lists the Condition as "Derogatory" for the 2nd but Pay Status is "Late 120 Days"
Experian lists the Condition as "Closed (Paid)" for the 2nd and no Pay Status.
Experian also shows it as a CO - Chargeoff.
Equifax lists the Condition as "Closed (Paid)" for the 2nd and Pay Status as "Late 30 Days"

I closed (recorded) two weeks ago but my realtor is waiting for Title company to send the official letters from the mortgage companies to them so that they can in turn send them to me. But I did call my 1st mortgage company and the loan servicer of my 2nd (a mortgage backed security sold by Wells Fargo but loan serviced by GMAC) during the the process of closing and they both told me I was Paid In Full. My realtor has the letters but is waiting for more paperwork from the Title company before forwarding on to me.

Since I can see it listed on my credit reports as Paid In Full I'm not worried about any collection agencies coming after me. I will need to file a Form 982 with my taxes next year to show I am Insolvent. Anyone that reviews my assets (zero) and liabilities would see that I am going to be insolvent for the next 3 to 4 years.

(5/27/08 Tuesday 6am PST - And with the way my life at home is now going I may be heading toward divorce in a year. I told my wife that I really don't think we're going to have the proper debt-to-income ratios in a year - I think we're really going to be renters for at least two years; I still have so much debt to pay off. She's going to open up her own checking account and then have her paycheck direct deposited into her own account. She said she was watching Dave Ramsey last night and she needs to take ownership of her own life. And I think intimacy between us stopped last week. We had a bad weekend talking about finances. It's awful this has happened to us - next month is our 22nd anniversary and she and I had talked about going to Vegas but that's not going to happen now. Basically she married the wrong person. It's funny, I think what will probably happen is that she'll end up marrying our landlord. He's funny, happy and rich. It's probably easier to be happy and funny when you're not worried about money all the time.)

Good-luck with your short-sale and let me know how it goes.

Monday, May 19, 2008

Another Neighbor house selling for less

The neighbor across the street and three houses down dropped their asking price to $425K. They had been asking $499K. And back in November they were asking $625K!

My wife and I looked at some houses last weekend just for entertainment. We looked at a house that was 3774 sq.ft. and the realtor was asking $370K! It had ALL the upgrades that my wife likes. It was way better than our current house. Of course it was a foreclosure, no furniture, just an empty house.

We drove down another street a couple blocks away and that street had five out of ten houses for sale with brown lawns on three of them and red pieces of paper (Notices of Default, NODs, eviction notices, etc.) in the windows. All of these houses have three-car garages.

Anyway, we're going to rent for another year and try to save some money and pay off bills in the meantime. I kind of doubt my debt to income ratio will be under 35% next year since I'm on year two of a five year debt repayment plan with all my creditors. Well at least I can sleep at night.

Friday, May 16, 2008

Tax Rebate check received

We got our $1200 rebate check today! But after all my bills I now have $1900 in my checking account. So the rebate check definately helped us and has helped to create a little bit of a safety buffer. $1900 sounds like a lot but I am supporting four adults plus a young Marine who lives with us part-time. He never asks for money but I help him out when I can with gas - it's so expensive for him to drive from the base to our house. Takes him almost an hour each way.

I also had to pay $535 for my auto insurance policy today. I'm insuring four cars now. I'm definately glad to have that fourth car in the family. It sure helps me with my job - especially this week when I needed my car four days this week for work.

So when the government wonders what happens to rebate checks mine will go towards bills and living expenses. Just a band-aid. But I worry about this getting added to the national debt and future generations of Americans having to pay for it. I dont see how our national debt can ever be repaid. I dont see how the U.S.A. can continue to go on as a spending nation and not a saving nation. I think I read that two-thirds of our GDP is made up of consumer spending. What's going to happen to the GDP when people stop borrowing and spending so much?

Check out and download the MP3 file about "The Giant Pool of Money".

"The Giant Pool of Money" - "A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."

Property Taxes paid off

I checked the web site for my (one month overdue) Property Taxes and they were paid off through escrow. So it looks like we officially closed our short sale.

Monday, May 12, 2008

1st Mortgage received payoff

I called and verified that my loan servicer for my - used to be my - 1st mortgage received a payoff check. I'll still keep checking with the county recorder to make sure there wasn't a problem with title transfer - I dont want to make rental payments on a house that I thought I sold. I'm just a little paranoid that's all.

The customer rep I talked to said that I might still get some phone calls from their collections department but not to worry. He said that one department doesn't know what the other department is doing - such as processing my payoff. He said that they're behind in their processing because they are swamped with so much pre-foreclosure activity lately.

Saturday, May 10, 2008

Neighbor House selling for less

My wife and I were driving back into our neighborhood today and we noticed a new For Sale sign had gone up on a neighbor's front lawn. Same house as ours but without a pool and spa. We stopped and pulled the flyer and guess what - they are asking $399,900!

That's $50,000 less than what we sold our house for!

And we sold our house two months ago. That is, we closed/recorded yesterday!

(There's still another neighbor's house asking $499,900 that is just across the street and three houses down from us. But they've been on the market for almost a year in which time they've dropped the price of their house down $100,000. I checked the County Tax records online and saw that they haven't paid their property taxes in over a year. Then again they also moved out about 7-8 months ago and their front lawn has turned brown.)

So prices are still falling in our neighborhood. I was also able to lookup on the County Tax Collectors web site if the new house for sale property taxes had been paid and sure enough - they hadn't paid the last two previous payments due. They are behind by one year in their property tax payments. And, by checking their last assessment value against their asking price I see that they're asking about $186,000 less than what they paid for it 3 years ago. I had seen a mention of their house being a Short Sale on a realtor's web site I visited about a month ago but now I can't find that same web page.

I doesn't seem right that anyone can view another person's payment history with respect to property taxes. But I found out from another web site on how to view the payment history and ownership addresses for properties using public records that the County Tax Collector and County Assessor put up on their web sites. This information will help me to determine if the purchasers of my house did actually record at the County. I've heard stories of people who supposedly "sold" their house to someone else and then made rental payments to the "supposed new owners" only to find out later that they were victims of a scam, conned out of "rental" payments and still the owners of the house they lived in which they thought they had sold.

So I'm going to keep checking next week with the County Recorder about when/if our new owners had changed title. Actually I'd better check with my mortgage companies. I'll put that on my ToDo list.

Here's the process I use to verify who owns a house and whether the Property Taxes have been paid:

1) Start here:
Search by address
2) Get the assessment's parcel number of the lot
3) Then go to here
and enter the parcel number in the assessment box and click ok, followed by the view tax info button on the next page

You'll have to find your County web site addresses.

Friday, May 9, 2008

Short Sale - Recorded!!!

We are done!!!

I am so relieved! Our short sale recorded yesterday. We avoided bankruptcy. We avoided foreclosure. I no longer have this huge mortgage payment to worry about and to lose sleep over!

I can finally start to plan again for the future. I can finally start to live within our means. I can finally start to live within a budget. Thank God.

I still have a lot of high balances to payoff on my credit cards but at least the payments are within my budget.

I'll continue to make posts on our progress to update anyone interested.

Wednesday, May 7, 2008

Credit Report - Settled accounts and Balance Liquidation

I did "settle" with American Express - after it had gone out to a Debt Collections Agency - and this is what shows up on my credit report (I use to view all three reports):

[TransUnion] Payment after charge off/collectionSettled - less than full balance
[Experian] Account legally paid in full for lass than the full balance.Account legally paid in full for less than the full balance.
[Equifax] Settlement accepted on this accountPaid charge off

And this is what shows when I enter a Balance Liquidation Plan with a Chase credit card:
[TransUnion] Account closed by consumer
[Experian] Credit line closed - consumer request - reported by subscriber.
[Equifax] Account closed at consumer's requestCredit card

Tuesday, May 6, 2008

2nd agrees to settle for $5K!

My realtor called me today with great news. He said that they now have all the letters and paperwork that they need to complete our short sale!

The buyer should fund on Wednesday and then we should record the title transfer on Thursday or Friday!

I will finally have a budget I can afford - house rent, credit card bills and living expenses. Thank God for helping me to swallow my pride and put our house on the market. And thank God for bringing me a buyer of our house!

Monday, May 5, 2008

Interest rate lock extended

My buyer asked/requested that my realtor pay $400 to them to have their interest rate lock extended. I offered to pay $200 towards having my buyer's interest rate lock extended - I dont want to lose a buyer over such a small amount of money.

My realtor emailed me back and said that the buyer extended their interest rate lock. I think their lock was for something like 5.2% or 5.4%, somewhere in there. They will be reimbursed somehow when the deal closes.

So we're back to waiting for my second lender to approve the $5K acceptance instead of the $14K that they had stated in their letter. My realtor assured me that they will comply with their original, verbal $5K offer.

Thursday, May 1, 2008

Short Sale snag

Well, it looks like my second mortgage holder, GMAC, is holding up my short sale. They had verbally agreed about a month and a half ago to accept $5K from the 1st lender to settle our account and now they've sent a formal letter stating that they'll accept $14K. This mixup might cost me the sale of our house. It has been almost 60 days now since my buyer made their offer and their interest rate lock expired yesterday.

The buyer is now mad that they have to pay additional money to extend their rate lock. And, we have to wait for GMAC to hear back from the investor (mortgage backed security) who holds my 2nd on whether they will accept $5K as a settlement for the loan.

So I may lose a buyer and I might have to relist my house again. We have come so close to getting out of these two mortgage payments without going into foreclosure or bankruptcy. Now we are in a wait and see mode again.

I'll keep you posted on what happens. Hopefully I'll have good news soon.

Sunday, April 27, 2008

Loan Docs Signed !

Our buyer signed their loan docs last Friday! This is a great way to end the month!

We'll finally be out of this horrible mortgage by the end of next week!

The buyer is having their final walk-through today. I found out that the "appraisal" last week was for the buyer's lender to approve the deal. I guess it must have passed - we didn't get any feedback. Also the termite inspector company is coming out here on Monday to patch up a couple places on the door frames on the outside of our house. They didn't find any indication of termites but said that in two places our outside door frames should have been flush with the ground - I guess to prevent termites from entering from the bottom of the door frame - I didn't get a complete explanation.

But, hey, at least we've been blessed with an incredibly fast short sale.

I also completed my ten-week course in Crown Financial through my church. A lot of good things happened for us since I started learning more about how to be a good Financial Steward with money as per scripture in the Bible.

It amazes me that it took only four days after we first listed our house up for sale - with no outside signs on the front lawn - that we had a well-qualified buyer with a solid offer. And to have our short sale close in 57 days is truly a blessing. I thank God and family that I won't have to file bankruptcy or have a foreclosure on my record.

Of course, I'll continue to post here for as long as it takes me to get out of debt. That is my goal.

My daughter got a car!

We are very fortunate!

A very caring family member let us buy their car for my daughter. She's had her license for over a year and we've been sharing three cars among four driving adults all that time. It seemed that we were constantly shuffling our schedules around on a daily basis just so we could all make it to our appointments: my work customers, our school schedules and our work schedules. The blessing in all this is that we have all worked together to make it through these tough times.

It has also helped that my daughter's boyfriend who is a Marine stationed nearby has been staying with us off and on - we have a guest bedroom for him - so he has helped with the driving needs. He's a really good young man and very mature for his age. I feel bad for him sometimes because I dont think he had many options when he joined the Marines. He just turned 19 recently and says that he's in training for Afghanistan but I worry that he'll get sent to Iraq. He is proud to be a Marine. I wish our country were 100% united behind our young men and women in the service.

My son has talked of joing the service also. He almost joined with some of his friends right after HS graduation. But I steered him toward college so that if he does enter the service he could join as an officer. I am proud of my son and support him 100% no matter which direction he chooses to go in his life.

Sunday, April 20, 2008

Fixed our car

Now that I have some extra money I can actually pay for car repairs. My wife's minivan has been blowing vapors into the car because the heater coil needed to be replaced. It got so bad that we couldn't turn the A/C or heater on in the car. We drove it like that for a couple months but it recently got worse. My wife drove her mother to lunch a couple weeks ago and my Mother-In-Law was practically gagging from the vapors. Well I spent $375 to fix that. It's nice now being able to pay for things such as car repairs. Of course I'm on a cash basis and paid cash for the repair because I basically dont have any credit anymore.

And I took my family out for dinner last Friday night. Something we haven't done in a long time. And that was cash too. I'm starting to feel better about things again. I hope all continues well.

Of course, my daughter recently broke a law - a misdemeanor. So now I have to deal with that and pray that she only has to do community service. We're now waiting for the D.A. to decide what to do. Papers were filed with the DA's office.

And my dog now has arthritis - I took her to the local Pet Groomer and they wouldn't take her because she cant stand on four legs long enough for them to groom her. They said I should take her to the vet and get Chrondroitin or something like it. She's about 14 years old and she has a tumor on her back the size of a small watermelon. She's been like that for the past two years. I can't pay for surgery for her. I just cant allocate money to take care of my ailing dog. All I can really do is buy her dog food and give her aspirin sparingly. She was really bad this morning and in pain so we gave her aspirin in peanut-butter and she got better during the day and was able to walk around. But she was immobile, shaking and crying earlier today. I felt really bad. Maybe if I get a bonus next month I can get her some arthritis medicine from the vet.

Getting closer to closing

My realtor called last Friday and said the bank approved our sale (price)!

So an appraiser is coming over on Monday 4/21 to do a full appraisal - about an hour's worth.

Not sure why that is needed if the bank has approved the sale (price). I emailed my realtor and asked him to explain why that is needed even though the bank has agreed to the short sale (price).

The brother and sister of the buyer and the sister's husband (brother-in-law) came over a week and a half ago to take pictures of the house inside and out. They were very nice. But it was kind of awkward when the B-I-L asked me what happened, why we had to sell, meaning why would a person like me who works for a Fortune 500 company end up upside down in his mortgage. I just said we had some financial trouble and left it at that.

We still dont have a rental lease agreement. I thought they were bringing over the agreement for us to sign but they said that the brother (future owner) was very laid back and that we could just get a generic lease agreement off the net. They agreed to lower the rental payment if we would take care of the yard work (mowing, edging, trimming, etc) and the pool maintenance. I checked the rental comps in our area and for the square footage I think that we're getting a good deal.

I also looked at house prices around here again. I saw a nice house - plus pool and spa and about 2650 sq.ft. - recently listed for $113 per square foot. We sold our house (pool and spa also) for about $140 per square foot (3224 sq.ft.) two months ago - at least we agreed on the sale price two months ago. So that shows me that house prices in our area are still dropping. In fact, there were three other houses for sale in our neghborhood - all less than 6 houses down from ours - that have recently been: auctioned, rented and the last one still up for sale. The auction included many many houses from this area and the auction was last Monday night - it was advertised in the local newspapers. I wonder if anyone bid on the house up for auction that was 3 doors down from us. Guess we'll find out later.

It's funny about the other house still up for sale: a neighbor who lives 2 doors down from that vacant house recently ran a garden hose across two driveways so that they could water the now dried out brown lawn of the vacant for sale house.

And, if you drive down our street about 20+ houses away the street curves and there are two houses with dried out brown lawns and lockboxes on the front doors - both vacant, one for at least three months, the other more recently about 2-3 weeks ago.

I heard on a CNN news program that if you're going to buy a foreclosed house on a street that has more than one foreclosed house then you should buy the last remaining foreclosed house on the block. That way your house will be the last lowest comp price on the block. As each foreclosed house sells it drives down the price of the next foreclosed house to sell on the same block until the very last one remains and would be the bottom for the neighborhood. Of course, you would just have to hope that no more foreclosures pop up after that.

Friday, March 28, 2008

Rent our own house

Well, we had some good news earlier this week. On Monday, the buyer of our house asked if we were interested in renting it back from them for one year!

We answered yes and now we are in the process of negotiating our rental terms.

Hopefully by sometime next week we will have signed a lease agreement. But I have to wait until escrow closes before I pay them any money (1st and last or 1st plus security deposit). I wouldn't want to have paid out any money and then have the short sale not be approved by the banks and then have the sale fall through and lose my money.

As it is, the buyer has now communicated that their lock on a low interest rate will soon expire and that should that happen before the sale closes that they then might not be able to get another loan. I thought interest rates were dropping so we'll see what happens.

I'll keep you posted.

Sunday, March 23, 2008

Fix our Credit Scores

Our credit scores are in shambles. Now that the short sale of our house is progressing - already had termite inspection and a lady came over to take pictures for the bank holding our second mortgage - we can finally start to work on improving our credit scores.

I had two $300 limit credit cards that were maxed out that I paid $150 each. So that will make those cards show up as being used less than 50% which will improve our score. Those are the only two cards I have left that have open credit lines. I've closed all my other cards as part of my Balance Liquidation (repayment) Plan agreements with my creditors.

AND, I used $520 from my most recent paycheck to payoff my last PAYDAY loan I had outstanding!

My next paycheck will be the first paycheck in - I can't remember how long - that I will not have to pay any Payday loan fees, not have to payoff any Payday loans, not have to pay back people that I owe money, not have to payoff any cash advances from my bank via my checking account.

At one point in all this mess I was even taking cash advances from my corporate credit card. I had to borrow from family to pay that off - I had risked my job. How very stupid of me. I'll say it in black and white here that I have been a fool for a long, long time. Enough of this depressing talk.

I hope you had a great Easter Sunday. May God bless you and your loved ones.

Saturday, March 8, 2008

I fear being homeless

I've had a vision most of my life of ending my life as a homeless person.

I had a dream the other night that my wife and I lived in this cramped, dirty, broken windows and just plain old broken down trailer and that someone had broken in and that I was going to fight them.

I have dreams like that sometimes. I stay up late so that when I go to bed I am so tired that my mind doesn't have time to think about things. I just want to go to sleep as fast as I can. And go into a dead sleep. A sleep with dreams that you don't remember.

Friday, March 7, 2008

We found a buyer!

Wow! I'm VERY excited!

Our house went on the MLS last Thursday of the previous week and by Tuesday this week we had an OFFER!!!

My house is a short sale. The buyer offered $330,000 less than what we owe on our house. They offered about $50,000 less than what we listed our house for. We counter offerred $30,000 more than their first offer. They accepted. So our total loss will be $300,000.

Unbelievable! We are going to sell our house for the exact amount we paid for it five (5) years ago - so no total appreciation at all over five years! Of course the house appreciated up (inflated up) and then depreciated down - deflated down $300,000 over the last 18 months. Even if we had never refinanced our house nor taken out second mortgages or refinanced those first and second mortgages we still would not have gained anything.

You can argue that all the second mortgages we took out are gains in income. So I tried to account for the total $300,000 in losses (refi's) here:

- 45,000 - 3 refi's of fees to lenders, brokers, escrows, etc. expenses = $15,000 each time
- 56,000 - prepayment penalties multiplied 3 times
- 36,000 - negative amortization loss over 3 years starting in 2003
- 30,000 - About $30,000 of bad luck, bad decisions, broken down cars, medical bills, etc.
- 36,000 - 2005 through 2007 of wasted money in Payday loan fees = legal extortion
$ 97,000
- 97,000 - subsidized my income over four years = about $24,250 a year or $2,020/month to support a mortgage payment that has been $5500/month for almost two years and was about $3500/month four years ago.

And that's the best I can come up with looking back the last five years on what happened to $300,000 from refi loans because I sure don't have anything to show for it.

Reduce your interest rate to ZERO percent - 0%

A couple days ago I got one of my credit card companies to reduce their interest rate to 0.0 percent for ONE YEAR!

That will allow me to paydown my debt by almost $3600 over the next 12 months.

Here's what happened:

3/4/08 - (They called me.) I missed their call so I checked CallerID and then called them back. I explained that I could not make the monthly payment and I requested a Balance Liquidation Plan (BLP). The lady said that they cannot put me on a BLP because their policy is they need at least one year in between BLP's - I was on a BLP last year with them and recently came off it last January. She said that I owed about $800+ (just to bring my account current) and that my interest rate now was something like 12.5% and that if I missed that payment then my interest rate would go up to 30+%. She recommended credit counseling, I said I've already tried that and was denied. I said they recommended Chap 7 and she said that if that's what I have to do then that's too bad. She wanted me to make a payment but I told her I can't. I said that my mortgage payment is $5700 and that my take home was $6000. I said that we all lose and then I hung up.

3/4/08 - They called me back and gave me their Customer Assistance Center phone number. I called their Customer Assistance Center and then again explained my situation and then I was transferred to a Supervisor. She asked why I fell behind - I explained that my mortgage payments are $5700/mo and that I take home $6000/mo. They will put me on a One (1) Year Plan:- $285/month- at 0 percent- One Year- first payment due 3/26/08- manual payment plan- re-evaluate after one year (2/27/09).

The supervisor said that they would have to close my account and report to the credit score companies (Experian, TransUnion, etc) that I will be on a BLP with them. I said thanks. At this point I just want to get out of debt. My credit score is already so bad (poor status) that it doesn't really matter to me. I'm never going to have credit again anyway so a credit score is pointless from this point on until I die.

3/4/08 - It seems like if I use terms like "death" and "dying" in phrases like "...I'm financially dying" or "I'm financially already dead" or "I'm financially terminally ill." then that's when they immediately offer a payment plan.

3/4/08 - It took three (3) phone calls, but four (4) conversations, the same day - morning - to get a re-payment plan. The last conversation was with a Supervisor. And only after I told them I am "financially dead" did they seem to believe me.

I have a theory that if the credit card companies hear the pain and despair in your voice - in my case true - AND you use words/phrases like "financially dead" "I'm financially dying" etc then they will work with you. I think that "dead" "death" and "dying" are keywords for them.

Credit Card companies WANT YOU IN DEBT!

(This in response to someone who asked me about settling with the credit card companies.)


I know what that's like.

If you settle then yes it will affect your credit score in a negative way. If I were you I would call them up and ask them to settle for 60%. They will probably say no. They will tell you that you are current (if you are) and that they can't settle with you while you are current. That you have to be behind in your payments by 2-3 months before they can consider it - that has been my experience. The credit card companies WANT YOU IN DEBT!!! And they WANT you to be BEHIND and LATE in your payments so that they can raise their interest rate on upwards to 24% to 30%. CREDIT CARD companies WANT YOU in DEBT!

But what is your goal?

I would counsel you to set a goal to get out of debt and stay out of debt. Having debt makes you a slave to your creditors. Think about it. When you are in debt you are not free. They own you, they own your payback schedule, they own your interest rate, they own what interest rate you'll get when you buy a house and worse, THEY OWN YOUR TIME. THEY OWN A PORTION OF YOUR LIFE!

When you work and bring home a paycheck think of that as TIME. TIME spent for someone else's needs -the creditor's need, the creditor's benefit.

Set your goal to get out of debt and stay out of debt. You will never regret it.

Saturday, March 1, 2008

Short Sale our house

We finally decided to short sale our house. Last Sunday 2/24 I decided that I just can't continue to live the way we've been living - paycheck to paycheck.

We signed up with a realtor and he's going to list our house in the mid $400's. My mortgage totals $750,000. I 've been looking at comps and I think it'll probably get lowered down to about $400,000 - maybe even $375,000.

The market where I live is so bad. Sign everywhere about REO's, Bank Owned Property, Foreclosure Sale, etc.

I'll be lucky to get a short sale.

What happened is that January killed me. I had to take out $6000 in PayDay type loans and the fees for those are just insane - about 33% for a 2-4 week period. Then you have to renew just to stay a float. So all in all I paid about $4000 in fees alone for January and February. It just snowballs you into financial death.

So I've got to sell the house. I feel better about the decision. I can finally get out of this mess.

Smog check failed - cost is $1400

I've been delaying getting our car smog checked because I didn't have the money. I got it smog checked a couple weeks ago and we failed.

I took it to our dealer in town and they said I'd need about $1400 in repairs to get it to pass. They said I'd need: valve replacement kit and an Intake Manifold (IMRC) kit. I took it back and went to a smog check place. They did all the repairs for about $1000.

I had thought about just making greater than $450 in repairs and then taking the car to a Referee smog station to see if I could get the other $550 in repairs delayed for two years just to save some money. But my wife was tired of seeing the Check Engine light constantly on for the past two years. We finally had some money so I got that fixed.

Sunday, February 24, 2008

Glimmers of Hope

Right now our 1st and 2nd mortgage payments total = $5700 / month

Based on the recommended ratio that a house payment should be no more than 30% of total net income per month we should have a net income of $19,000.00 per month. 30% of $19,000 = $5700 a month.

So even if we erased all of our credit card and personal loan debts our house payment would be 60% of our net monthly income - at best. That's assuming I get the maximum monthly bonus plus maximum monthly expenses reimbursed each month. That would still be 60% of our net income going to interest-only loans - not even paying down the mortgage. So I'm already a renter - it's just that my landlord is some mortgage backed security financed by my last refi back in summer 2006. And since we don't have a subprime loan and our loans are greater than $720,000 then we dont fall into any category for help - government or mortgage lender.

And with (my wife's) job at risk this year because of the state budget cuts and the value of houses being what they are it just doesn't make sense for us to stay in our house any longer and continue to fall behind each month. If we short sale our house we would be selling it at a $250,000 loss. And everything I read indicates at least two more years of decline in home values - most likely down to $100 a square foot. Might even get down to $75 or $90 a square foot. And where we live there is just not enough high paying jobs to support the market value of the houses around us even at today's prices.

And paying off our credit cards would not change the fact that we have 60% of our income going toward mortgage payments. And if we declare bankruptcy (Chap 13) and wipe out our debt that way then we'd still owe the $5700 a month house payment - we'd still have the 60% of our net income going to a mortgage.

We need a house or rental payment from $2600 to $3000 a month tops - based on my readings.

I'm sorry this realization is coming so late in the game. At least we've managed to stay out of bankruptcy so that helped us a lot. My employment applications with Fortune 500 companies ask if I've ever declared bankruptcy so it is important for me to avoid that which could prevent future employment opportunities. So that helped a lot and was not a financial waste. We just have to get out of this house.

It's been three years since my wife and my kids have been on a vacation of any kind. I still struggle each month. My January bonus and tax refund have already been dissappearing because of expenses that I just can't keep up with even though we have made lots of cuts in our budget. We just can't live like this anymore.

(My wife) goes to work each day and almost every day her co-workers will talk about their vacations they are taking or have taken recently and they'll talk about the stupid people who took out too much mortgage and look what mess they're in and she just has to try and hide her pain at being one of those people that they talk about.

As for me, my co-workers are not as bad but they too talk about their vacations and more of them talk about their pensions and how close they are to retirement. Some have already retired and are collecting their pension and working for another company at the same time. I just nod my head during the discussions and try to get away or turn the discussion back to work. Psychologically, (my wife) and I need to get out of this house and after that maybe get away for a couple days on a mini-vacation just to feel like normal people again.

One of the passages we study in the Bible - Romans 5:3-4 - reads something like "...suffering creates perseverance; perseverance, character; and character creates hope." Well, we got the suffering down and now we're learning perseverance and maybe character is being built because there are the tiniest glimmers of hope.

Friday, January 25, 2008

2008 not starting out so good

Both my wife and I have been very sick these last two weeks. She had to go to Urgent Care two times in the last three weeks. My son broke his leg two weeks ago at work and then last night my daughter was hit by a hit-and-run driver. I am having to deal with insurance companies, my son's employer, my car insurance company, medical providers, car rentals, police reports and now I'm making up flyers to post near the accident scene to see if I can flush out the guilty parties. I'm feeling a bit overwhelmed at the moment.

The hit-and-run will cost me about $1000.00 after I pay the collision deductible and a car rental.

On the upside, I am joining a Crown Financial group at my church. We'll meet for ten weeks and go over how to get our financial house in order. I'm sure it's information I can read on my own but although I really have no savings or 401Ks I thought I should go back to thinking and planning as if I did have discretionary income. I've forgotten to live below my means and maybe this course will force me to make the hard choices such as walking away from a house whose market value is at least 25% to 30% below what I owe. My mortgage payment would probably allow me to pay rent on three houses instead of trying to scrape by month after month for the last two years. It's an awful way to live - borrowing here, borrowing there. I am one paycheck away from living on the street. The worst part is I'm supposed to be supporting a family of four and trying to help my kids attend college.

At least my son has learned that debt is a bad thing. We talked earlier today about him taking out a student loan to finance his education and he was adamant that he would not go into debt. I'm proud of him that he wants to avoid debt. Maybe that is the silver lining I am looking for here: that at least one of my kids already knows the weight of debt and how it can drag you down. My hope is that he and my daughter will avoid my mistakes. I guess every parent hopes that.

Saturday, January 19, 2008

Paid off another delinquency!

Starting 2008 better - I paid off another delinquency! That "cures" about $900.