There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.

Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!

Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

Never submit your mortgage payments to anyone other than your mortgage company without their approval.

The Obama Administration has launched a coordinated effort across federal and state government and the private sector to target mortgage loan modification fraud and foreclosure rescue scams that threaten to hurt American homeowners and prevent them from getting the help they need during these challenging times. Click here for more information.

OMFAIG is Right

I cannot believe what these guys had to audacity to do after all the bad press GM got for taking a private jet to bailout meetings.

Source: [CNNMoney.com] — The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help – are you one of them?

The $75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions:

First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates.

Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels.

Official guidelines won’t be unveiled until March 4, but here’s how to know whether you’ll likely be able to take advantage of either of these options.

Help for those seeking refinancing This part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices.

Right now, if you’re underwater on your mortgage, owing more than the home’s market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must, unless you’re using an FHA loan.

The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties. But your loan must be owned or backed by Fannie Mae or Freddie Mac.

The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.

Who’s not eligible. Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck.

Those with “jumbo” mortgages also don’t qualify – only those with “conforming’ mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above $417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them.

All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn’t yet clear.

Mortgage modification help for at-risk borrowers Homeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans.

Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification.

Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they’ll be required to accept debt counseling in a HUD-certified program.

If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income.

The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time.

The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option.

Borrowers would also receive incentive bonuses of up to $1,000 a year for five years for making payments on time.

President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures.

Who’s not eligible. Speculators, those who bought homes for investment purposes, do not qualify for help — all homes must be owner/occupied.

The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify.

And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%.

That will disqualify many borrowers who simply can’t afford any reasonable mortgage payment because of illness, for example, or job loss.

“[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford,” said Obama. “In short, this plan will not save every home.”

No mortgages for amounts above conforming loan limits would be eligible.

They’re going out of business! It’s a liquidation sale! The prices will be crazy marked down, right? Not necessarily. Read on to avoid getting ripped off by liquidators. Photo by Cosmic Kitty.

Many an unwitting shopper can be lured into a store with an enormous “50% OFF!” sign strung across the storefront. Even more so when the closure of a chain of stores is highly publicized like the recent closure of Circuit City. Unfortunately, the entire process of liquidating the stock of a store is rather deceptive. Walking past the “Everything must go!” signs and picking up a box marked 50% off could actually mean paying full retail.

First, a brief summary of what liquidation is. When a company is facing dire straits or has already hit the wall of bankruptcy they will— either voluntarily or by legal order—try to convert as much of their assets into cold hard cash as possible to pay off debts and hopefully return some money to their stockholders. The process is usually handled by an external company whose sole goal is to turn the pile of assets into profit—and minimize their risk in the process.

What does this mean to you, the consumer? It means that for the first portion of a liquidation sale you’ll likely be ripped off. Let’s use an HDTV from a fictitious company to illustrate how you’re not actually getting the deep discount you think you are.

Last year SuperPow television company released the SuperPow H9000 HDTV. The manufacturer suggested retail price (MSRP) was $2500. It was sold at HappyBox electronics stores for $2200 when it first came out and as newer models arrived it was eventually sold for $1250. HappyBox has a bad run and ends up filing for bankruptcy. Their inventory is now controlled by a liquidation company. The company responsible for the liquidation advertises that products in the store are deeply discounted, some things are even 50% off already! You walk in to check on the SuperPow H9000 and see that the price is $1250. You remember the TV was really expensive and that seems like a great deal for a nice TV, after all it’s 50% off! The only problem is that you’re getting 50% off the MSRP, which nobody paid even when the TV was the hottest model on the market. It may be a month or two into a large liquidation before that TV is actually marked down 50% from the actual street value to a wallet-friendly $625—and most likely someone not realizing they aren’t getting a very good deal would have bought it well before that.

How can you make sure you’re not the sucker that the liquidators count on to reap their profit? With a little knowledge and some handy tools, you’ll get the most for your money.

Know The Market

Don’t go shopping blind. If you’re heading to a going-out-of-business sale, take a few minutes to do some cursory research on whatever it is you’re looking to buy. Compare prices with price comparison engines like BeatMyPrice and make sure to check out deal-tracking forums like SlickDeals and FatWallet—both were reader favorites for finding the best deals online. You may not even know the exact model you’re going to find at the store, but checking deal sites like FatWallet will give you an idea what the general price ranges are for things and what deals can be had on them. A 40″ HDTV “marked down” to $1500 won’t look so appealing when you know that similar models are going for half that thanks to a little research. 

Use Your Phone as a Price Checker

If you have an internet-enabled phone with you, it’s easy to compare prices right in the store. The quickest, if least specific, method is to plug the product name or model number into the mobile version of Google Product Search. If you’re without internet access but you can text message, you can take advantage of the Amazon/eBay price-comparison mashup provided by MobSaver. Text the ISBN or UPC code of an item to save@mobsaver.com and it sends you back the current prices on Amazon and eBay. When you’re really in a bind you can use—as I’ve often done—the most analog method and call a friend to run a quick price search online for you. A few minutes pecking on your phone or making a call can save you hundreds. 

It’s never a good sign when companies are shuttering their windows—for the economy or for the displaced workers—but that doesn’t mean you should pay extra for their bad luck. Armed with the tips above you’ll never be the sucker paying MSRP for 2007′s castoffs. If you have your own learned lessons about liquidation sales, sound off in the comments below and help save your fellow readers some cash.

via: [LifeHacker]

In two-and-a-half months, the Treasury has used up half of the money from the Troubled Asset Relief Program. Here’s how it came and went so fast.

NEW YORK (CNNMoney.com) — President Bush has grudgingly allowed General Motors and Chrysler to drive away with the last few billion bucks in Treasury’s TARP till, which boasted $350 billion a mere 77 days ago.

How did it all slip away so fast?

The money pot — intended to save the teetering financial system — was formally proposed in a three-page missive that Treasury sent to Congress on the morning of Saturday, Sept. 20.

Over the course of two weeks, lawmakers debated the potential moral, ethical and financial hazards of handing over unprecedented power and unprecedented sums of taxpayer money to the Treasury. Their responses ranged from gobsmacked to apoplectic.

By Friday, Oct. 3, Congress had passed a 451-page bill that President Bush signed into law within hours. The law granted Treasury up to $700 billion, half of which was made available right away.

Since then, Treasury has:

• sent checks totaling $168 billion in varying amounts to 116 banks;
• committed another $82 billion to capitalize more banks;
• bought $40 billion in preferred shares of American International Group (AIG, Fortune 500) so the troubled insurer could pay off an earlier loan from the Federal Reserve;
• committed $20 billion to back any losses that the Federal Reserve Bank of New York might incur in a new program to lend money to owners of securities backed by credit card debt, student loans, auto loans and small business loans;
• committed to invest $20 billion in Citigroup on top of $25 billion the bank had already received;
• committed $5 billion as a loan loss backstop to Citigroup;
• agreed to loan $13.4 billion to GM and Chrysler to get them through the next few months.

Now, it’s likely that Treasury will ask for the second tranche of $350 billion.

“It’s clear Congress will need to release the remainder of the TARP to support financial market stability,” Treasury Secretary Henry Paulson said Friday. “I will discuss that process with the congressional leadership and the president-elect’s transition team in the near future.”

It’s not clear, however, whether Paulson will formally ask Congress for the second tranche of TARP money before turning over the keys of the Treasury to his likely successor, Tim Geithner.

Even if Paulson wants to, however, he’s likely to face an uphill battle getting it.

“It seems very unlikely that Congress will give the final TARP installment to the Bush administration,” said Jaret Seiberg, a financial services analyst at policy research firm Stanford Group.

That’s because the apoplexy among those who originally opposed the TARP or who voted for it reluctantly has grown and spread for several reasons.

One cause of Capitol Hill’s bailout rage: the Treasury has not used TARP money to help prevent foreclosures. Democratic lawmakers, who crafted the legislation and purposefully included language about foreclosure prevention, beg to differ. They have said repeatedly they will not release any more TARP money until the Treasury commits to use some of it to help troubled homeowners.

Second, lawmakers are not happy Treasury has given so much capital to banks without requiring them to lend more and do more to oversee how the banks are using the money. Paulson has said Treasury told TARP recipients that it expects them to lend. “But it’s not practical or prudent for the government to say ‘make this loan, don’t make that loan,’” he said Thursday, speaking at an event in New York.

And third, Republicans in particular resent what they see as TARP mission creep. House Minority Leader John Boehner, R-Ohio, was one of many who opposed the auto bailout, and the fact that TARP was the source of the bridge loans in particular.

“The use of TARP funds is also regrettable, the latest in a growing list of TARP money uses that were not discussed with or envisioned by Congress when the program was authorized,” Boehner said Friday.

House Speaker Nancy Pelosi, D-Calif., has said she is working on a bill to add more guarantees that future TARP funds be used to prevent foreclosures and protect taxpayers. But it’s not clear yet how much Democratic support that will get. And there is near total Republican opposition in the House to approve any more TARP funding.

If that remains the case, the Obama team will have to add yet another entry to its ever-growing to-do list when they take power on Jan. 20.

- CNN congressional producer Deirdre Walsh contributed to this report.