FAQs

Last Updated (Monday, 31 August 2009 14:42) Written by Kristin Rippee Wednesday, 26 August 2009 10:29

If you have a question which is not in this section, please contact us.

FORECLOSURE

My house is being foreclosed upon; how much time do I have to get out?

· 90 days after a missed payment, a notice of default will be issued.

· After the notice of default is issued, you have 90 more days to bring your account current; this is known as a reinstatement period.

· If you do not bring your account current by the 90^th day after the issue the default notice, the lender will authorize a Notice of Trustee Sale, which will occur after 21 days

· You have until 5 days prior to the sale to reinstate your house.

· After Trustee Sale, the new owner must start a formal eviction process, and you have another 30 days to get out.

How do I avoid my house from being foreclosed upon?

· Don’t give up hope! There are still options out there for you to stay in your house.

· Don’t make your lender into an enemy. Your lender does not want to foreclose upon your house any more than you do!

· Research options to stop the foreclosure. Speak with your lender and look online. Visit www.fha.gov/foreclosure/index.cfm for information.

· Keep in constant contact with your lender. Keep them updated on your progress of finding a solution. Respond to all mail from your lender.

· Know your mortgage rights, including time frame and laws (they vary depending on state)

· Contact a HUD-Approved housing counselor. In Amador or Tuolumne Counties they can be found at the ATCAA offices.

· Reassess your spending habits. Create a budget and stick to it. Begin by cutting optional expenses-cable TV, memberships, entertainment etc. Make your mortgage payments a high priority.

· Sell assets for cash to help reinstate your loan. These include extra cars, jewelry and electronics. Consider getting a second job to bring in additional income

· Avoid foreclosure prevention companies! You can get FREE foreclosure prevention help from your lender or HUD-approved housing counselors.

· Remember time is NOT on your side. Act now! Be proactive and get educated today. DO SOMETHING!

TYPES OF DEBT 

What are the different kinds of debt? Which are “worse” or “better”? 

A Home Mortgage is considered one of the “better” sorts of debt. The value increases over time, and the interest paid on a home loan may be tax deductible.  

Student Loans are also “better” debt. An education usually causes higher income, and so a student loan may have a long term pay off. 

Consumer Debt, such as Credit Cards, Auto Loans and Department Store cards you want to avoid as much as possible. These items usually decrease in value over time, and the interest rates are generally pretty high. 

DEBT COLLECTION 

What are “fair” debt collection techniques?  

A collector may contact you in person, by mail, telephone, telegram or fax. However they may contact you only between 8 am and 9 pm unless you agree beforehand. If your employer disapproves of contact a debt collector may not contact you at work. 

How do I stop debt collectors from contacting me? 

Simply write a letter to the collector telling them to stop. Note that this does not make your debt go away, you can still be sued by the debt collector or original creditor. 

What is unfair debt collection? 

·   Threats of violence or harm

·   Publishing a list of consumers who refuse to pay their debts (except to the credit bureau)

·   Use of obscene or profane language

·   Use of false or misleading statements (falsely imply they are government representatives, that you have committed a crime, misrepresent the amount of debt etc)

·   Threaten arrest for not paying debt

·   Threaten to seize property or wages when not legal to do so

·   Giving false information to anyone

·   Sending false documents appearing to be from a court or government agency

·   Collect amount greater than your debt

·   Deposit a post-dated check prematurely

·   Use deception to make you accept collect calls or pay for telegrams

·   Take or threaten your property illegally

·   Contact you by postcard  

CREDIT RATINGS 

How do I build good credit? 

·   Pay your expenses, like rent and utilities, on time.

·   Pay off your loans before you make new purchases.

·   Make your loan payments on time.

·   Don’t bounce checks.

·   Avoid using credit cards until they are paid off, or cancel credit cards. 

How is my credit score determined? 

·   Payment History 35%

·   Current Total Debt 30%

·   Length of Credit History 15%

·   Requests for New Credit 10%

·   Types of Credit in Use 10% 

How long does information stay on my credit report? 

·   Unpaid Tax Lien: 15 years

·   Bankruptcy & Judgments: 10 years

·   Inquiries: 2 years

·   All other information: 7 years  

CREDIT CARDS 

How much am I liable for if my card is stolen? 

$50

What are the advantages of credit cards? 

·   You can purchase immediately and pay later.

·   You get a monthly inventory of purchases, which you can use for budgeting.

·   You can get money in an emergency.

·   You can shop by mail or phone.

·   You can help build your credit if you pay it off in full every month. 

What are the disadvantages of credit cards? 

·   You can destroy your credit by not paying off your card on time

·   Credit prices may be higher than cash purchases.

·   Many cards have heavy fees, or interest rates attached meaning you’re paying much more for every dollar you spend.

BARGAIN HUNTING

Where can I find discounted quality house wares? 

Make note of local stores going out of business. Now, more than ever, home furnishing chains are filing for Chapter 11 bankruptcy. Inventory reduction sales mean you can purchase furniture or decorative items at or well below the wholesale price. Look for going out of business signs, or inventory reduction signs. You may get 50% or 70% off ticket price. 

When is a good time to buy a digital camera? 

Shop around! Currently manufacturers are suffering as so many consumers already have digital cameras and don’t find need for an upgrade. There are 50% and higher discounts on cameras making some basic digital cameras under $100; prices unheard of even a year ago. Check out discount sites like amazon.com pricegrabber.com or overstock.com. 

Is it possible to book an affordable vacation in these tough economic times? 

YES! In fact, due to a major slump in flying cruising and hotel stays in the current economic crisis, deals are popping up everywhere. American Airlines and AirTran offer domestic round trip flights for less than $100. Hotel rates are down 15% in major cities like New York, Las Vegas and San Francisco. Some hotels are even giving extra nights or spa credits at no extra charge. Cruises may upgrade rooms, reduce deposits or let kids travel free. Now is a great time to take the vacation you’ve been saving for! 

BUDGETING 

How do I create a budget? 

1. List all of your income for a given month: salary, interest, social security, child support and any other monthly income
2. List your standard expenses for a given month: utilities, rent, car payments, insurance, tuition, deposits to retirement or savings accounts, groceries etc.
3. List your other expenses: entertainment, gym memberships, dining out, hobbies etc. (sometimes it helps to list all expenses for one week and multiply it by four. This gives a more realistic look at expenses)
4. Subtract the totals of 2 and 3 from the total of 1
5. To begin budgeting start by cutting from your extra expenses: maybe rent movies instead of going out, or cook home meals instead of take-out. Make coffee at home instead of a daily Starbucks run. Encourage your kids to budget as well; set limits on the amount of money you give to them for extra expenses. Consider cutting back on cigarettes or soda/snack intake. Remember to cover your basic needs, such as water, healthy food and insurance.
6. Remember to live within your means. If you buy a new 42” TV or I-Phone and it means you aren’t able to make your rent or utilities that month you are not living within your means.
7. If you’re having trouble creating or sticking to a budget, make an appointment with ATCAA, and a counselor will help you.

A budgeting plan worksheet can be found here

BANKING