With a way better-funded legal team than what most homeowners are able to access. As I’ve thought more about this, I found myself wondering if this was what was called a 3/1, 5/1 or even 10/1 loan. Those first numbers represent the number of years the loan would stay fixed, but after that time it would adjust every year to the given market rate. Some loans were marketed very heavily with that up front fixed rate, but the loan docs would have clearly stated it was an adjustable rate loan. That’s not something the lender could fudge on – both state and federal law regulate what the lenders must disclose, and this fixed-to-adjustable aspect is one of them. The docs would have clearly stated that the loan would start to adjust on X date, and the amount by which the loan rate could go up or down. One or two percentage points was typical but there were loans out there which didn’t have floor/ceiling rates and/or adjustment limits. If the whole neighborhood’s rates shifted after being fixed for a long time, I’ll bet this is why. If the loan docs say the loan could adjust after that X amount of time, there’s very little the homeowner can do at that point – they signed it and it was their responsibility to understand it. The document where that is all laid out is a single page document in either 10pt or 12pt print, so it would be hard to miss. If, on the other hand, the loan docs “hid” that in some kind of fine print, or never disclosed it, then the lender broke the law. Period. At which point the homeowner would have options under the various predatory lending programs which came out a few years ago. There’s just no wiggle room on stuff like this. Where most homeowners fall down on stuff like this is that they don’t hire attorneys to go after the lenders, because they’re trying to make that huge house payment and they don’t have money left over for legal counsel. That’s the gamble the lenders take, and they often win that gamble.
lenders or loan servicers who purchase loans, must honor the terms of the original loan. I’ll be curious to learn more about this situation. I can understand a single clerical error which had a fixed-rate loan double the charged rate, and someone dragging their feet about fixing it. If it’s happened to the whole neighborhood, and they all got the same financing at about the same time, that makes me wonder if there was some hidden and/or undisclosed clause at closing which said the loans could or would adjust under certain circumstances. If that’s the case, it should have said so in the closing loan documents, which folks SHOULD have saved for their records, but which also SHOULD still be available for review from the lender itself. In that case, it was the lender’s job to point it out, but also the borrower’s job to know their own loan documents and ask if they didn’t understand that clause. If those terms were not disclosed, that lender is ripe for a class action lawsuit. Which of course the whole neighborhood would have to get together, with their various legal counsel, and file that as a collective effort. Which is very difficult to make happen, not for legal reasons but just in terms of sheer “talk to everyone and get ‘em on board”.
Sounds to me like someone with the lender looked way down the line, saw the likelihood of this oddball scenario playing out, gambled that no one would file against them, and right now they’re reaping the benefits of that bet. Decisions like that are not made at lower levels. If the above scenario is accurate, it would have been a top-level decision.
I would hope the friend in this situation is pursuing legal recourse? Easier said than done, I know, but this is NOT how loans are typically handled. The terms you sign are the terms for the life of the loan unless you refinance. A fixed rate is a fixed rate unless there was some kind of “out clause”, and it would have to be stated as such. Lenders can’t just go changing terms. If that were the case, we’d all have some sky-high APR right now.
She and her hubby moved so her kid could go to a really good school in a different county, this was back in ’05. The mortgage was with CW then rolled into BOA. they gave up the house in ’08 because when the transfer was done, their fixed rate 30y doubled. The bank still has not resolved this. They know there is a problem, know it is their fault, but keep dragging out the process. Guess I’ll hear next month if this is settled…don’t think it will be.
I have 2 deficiency balances from a truck and boat I turned over to voluntary repo because we couldnt afford it any longer after my husband went salary. Does anyone know how to make them do a settlement offer?
I have Fidelity Bank for the truck and owe $16,000 and Merrick for the boat and owe $9000.
I was hoping to pay maybe 40% on each…. Im current on the monthly payment plan but want to see about getting them paid off.
Anyone deal with this??
Got paid today and based on my budget calculations I should be able to make my regular payment + $250 extra principal snowball!
Plus I ‘ve been scheduled for some extra time this week that will give me a little extra for next payday that will give me a few more snowflakes to pitch at it. But wait there’s more…
I just checked the mail and was notified I won a $150 gift certificate in a sweepstakes I entered! I’m thinking I’ll use that for groceries that week and throw another $150 on my car snowball.
On an OT note our rabbi’s on vacation and tomorrow’s my turn to give the layperson sermon at services…wish me luck.
The feeling of paying it down is what it is all about! Now the balance will look low enough that you will want to start throwing more more money at it to get it paid off by the end of the year.
Set a big goal and find extra money to get it gone.
Right now I’m really gazelle intense ( selling off all our rendezvous stuff folks) so the temptation would be to go for it. However, having not so long ago finding ourselves so suddenly unemployed for 18 months and needing the accumulated vacation pay to get through our “unemployed time” I was very thankful we had the built up vacation time to help us along. I would be reluctant to give up that security blanket.
I also have to ask about the legality of you only getting 90% of your vacation time. What does fair wage and hour say about earned vacation time in your state?
As someone else has mentioned, what about burn-out? My mother was a nurse aide (I know you are a nurse) but the work for the two can be equally as draining. She really needed her vacation time for a change of pace.
So let me make an entirely different suggestion—I’m known for thinking outside the box around here.
How about taking some of that vacation time and doing an entirely different part time job for that time period? It would net you two incomes. The vacation time at 100% and say deliveries for the same time period as a fill in driver? OR take the time to go inch by inch through your home to find everything you could sell? If it’s not a violation of your contract, be a temp nurse for someone while their home nurse goes on vacation.
Even if the second temporary job would be delivering pizzas it would be a change of pace—something nurses need, and you would get 100% of your nursing pay, PLUS the income you would generate for that 2.5 weeks pay. Doing this idea could net you more for your debt than taking 90%.
100 hours is about 2 1/2 weeks of vacation time. In trade off terms, that’s a pretty nifty trade to swap 2 1/2 weeks of your time and be debt free except for the house.
Having said that, when DH was let go from work in February he had just over 2 months of vacation. Between severance and vacation, we came away with almost 3 1/2 months of savings….and we needed that cushion to live on.
If you have extra vacation time beyond the 2 1/2 weeks, I’d say cash out the 100 hours. If you don’t, but your work allows you to switch shifts with someone in the event an emergency comes up, I’d still say go for it. Personally, I’d rather work for a year to accrue more vacation time than spend that same year (or more) paying off the car, especially when you could be debt free in the time it takes you to get the check from your company.
Such as how much I make each month, how long it would take me to pay off the loan under it’s current terms, am I able to put more money into the loan each month, how much would 100 hours of vacation would reduce my debt, will I need that vacation time for anything else (like sick time, personal time, bereavement, etc..) would it make more sense to cash out some but not all….
I may have a differing opinion than others here. I think others would say do whatever you can and pay it off. And while I agree with it to a certain extent, I can’t follow everything MC says since some of his advice isn’t relevant in my world.
I hope I didn’t confuse you more.
I discovered MC Blog about 18 months ago. I’ve read TMMO, listen to his show almost everyday, but have not taken FPU.
Here’s my question:
Currenlty my only debt in addition to our home is my car loan. It’s $8600 with a rate of 4.9%. My employeer gives my the option of cashing in unused vacation time at 90% of our hourly rate. So my question…would it be worth cashing in about 100 hours to pitch at the car as a snowball? Or would I be losing 10% to save 4.9%?
I had to sue because of my son’s age. I had no choice. So you know who made money off that deal? My lawyer’s office. However, his staff did an excellent job. My health insurance paid for most, but because it went to lawsuit, they wanted their money back. Because the expenses were more than the lawsuit, they agreed to not pursuit any of the settlement, so that worked out.
So please, make sure the atty is pushing for them to (there’s a legal term for it, but I’m not sure what it is) not get their money. Of course they want their money back, but by the time your lawyer gets 1/3, there’s nothing left. As far as I know, my health insurance did not get reimbursed out of the settlement.
Sounds like it’s a done deal for you and your son. I hope he has no issues from this, and all is well. I opted to save his settlement for him until he is 25, instead of 18. I wish I could have held it back until he was 40!!!
and I’m impressed that he is willing to get back on the bike and continue biking back and forth to school! Way to go young man!
Here is a story which was aired on our news station last night concerning negotiation of hospital bills. The man in the piece was bit by a snake. He is a reporter for the station and is of course, covered by insurance. The antivenin was $84,000 but see the negotiation tips which he employed to knock his bill down to something reasonable. If you need fast cash loans try RTLoans.com I was struck by the insistence of the people in the story to make it known that EVERY hospital fee is negotiable. They run on a suggested price list, and no price is set in stone.
Knowing this, or learning this, I would believe that it doesn’t matter what your salary is, or what finances you’re working with, like you, it would behoove the patient and/or their financial representative to negotiate price.
I won’t be paying a penalty for taking the money as we can get around that because it is a hardship withdrawal due to total disability. So that is a non-issue.
Also, income taxes will be very low due to income not being what is was. ; )
If we own a home we will qualify for tax breaks on money spent for retrofitting and can qualify for grants for certain items for our home up to 80% of their cost. The more I look at this the better it looks. I am certain that the financial benefits of owning and qualifying for breaks will far outweigh any income tax burden placed on us by taking the 401k money.
Also, I have looked into the particulars today and think if this was a plan to go with that I could take a loan on the 401K at 2% interest for up to $20,000 and then only take $20,000 hardship withdrawal. Houses here are actually undervalued and this makes buying a good deal. This would cost me a lot less in income taxes and would have me paying myself back at a very low interest. I would have to play with the scenarios to see which on works in our favor.
Quite honestly I don’t have any real solution other than to buy a house. Renting isn’t something that can be done. It sounds good but in reality it doesn’t work. I wish it did, then I could just leave everything alone. I am really trying to think of reasonable workable solutions.
In short, if I take money from 401K to buy a house I will incur no penalties or taxes, I will own a house outright and I will be able to re-fund our 401K in less than 5 years.
If we don’t buy we will not be able to find a suitable home to rent and we will have to consider placing her in an institution. We would not own a home and would pay rent forever (or until we can buy again), but we would have an intact 401k although without any additional contributions.
When I put it down like this all I can see is that at the end of 5 years I will be in a much better place and we will be able to be a part of our daughters daily live if I take money from the 401k.
Does this all still sound crazy ? Before this all happened when we were working our steps and paying down our debt snowball following each and every step in order make sense to me and since Dave’s plan was working so wonderfully for us I really wanted to stay on track with the plan but I am having trouble now because of our unique circumstances.
My only concern about pulling 401k money to buy a house or pay debt etc is from personal experience years ago when hubby lost a job and we pulled some 401k money and I learned a lesson months later. Money taken out of a retirement account not only gets the penalties, but also becomes taxable. You said hubby makes 60,000 a year—if you pull 50,000 out of 401k—they will charge you the penalties as you pull it—but then when you file your taxes—-it as if you made 110,000 this year. This could bump you into a higher tax bracket. It could also affect what you can itemize and claim, etc…..
Robbing your 401K – which a bankruptcy doesn’t take on purpose because its important to have a retirement plan – is not the choice you want to make. Not to mention the 40% penalty you’ll acrue. If you have 100,000 in your 401K – you’ll walk away with 60,000. You’ll never conceivably make up that 40,000 loss.
I’m sorry I haven’t thought of a solution for you – I read your e-mail early this morning and I don’t usually like to write an answer without a workable solution but I thought it important that I stress how bad your plan is. I read your plight on renting and the need for accessible housing, but I don’t have a good answer for you.
to ride all the big rides. Space mountain and thunder mountain. I would have gone a few years earlier so ds who is in the middle could have gone when he was around 6or 7 but it just wasn’t affordable for our family of 5 to go when one parent and child would have to sit out of a lot of rides.
experience Disney for the first time? When they will remember their time, and enjoy the rides and other attractions?
How much in advance can you plan and make payment arrangements on the trip?
Wanna take my Pinky… Don’t mind putting it on the books now for 2020 (or some other year) if Disney will let me. Especially if I can lock in today’s rates for future years trips.
and she doesn’t really remember that trip. She was old enough that we had to pay for her so I imagine she was around 4. I was probably too green to even pay attention to fear of crowds or characters so I never had those issues with her. Its what happens when you go to Disney 🙂 We still don’t have fear of crowds, actually go to them – Times Square ball drop, Inaugurations etc…
Up to age 3 she can go for free, but if she still needs frequent naps, can’t take standing in line, or is afraid of strangers or large characters don’t take her until she is older. Ds was 7 the first time we went and for him it was a perfect age(large character issues until he was nearly five). He could ride any ride he wanted without us. He couldhave probably gone younger, but we waited. Like I said it depends on the child, but it also depends on how the parent (s) and how they deal with meltdowns–because they will happen.
I tend to look at a glass half empty and decided to quit my grumbling… my home might not look like much… but its MY home… and you are right…a wonderful hubby and 4 wonderful boys, a great dil and 2 dil’s to be this year, and I decided if I didn’t like how something looked in my home this year, I would go through what I have and make a satin purse from a sows ear!
And when you do look back, you realize all your four walls were taken care of. You did it. By the grace of God.
You may even have non money blessings, like a strong marriage, a child who is going to college but who knows what hard work is, your health, self sufficiency by growing a garden and I’m sure lots more.
It’s stories like yours that make me truly thankful for what I have too.
Thanks for sharing!
You all did awesome. I know what you mean about feeling poor. I spoke to a family who makes 5 times what we do. They got both their cars repoed this year. I am pretty sure they are close to loosing their house. I think of them and I think how glad I am we found Dave and this group. How blessed we all really are !
When dh lost his job 4 years ago when I joined this group our debt and our standard of living was high. Dh was a project manager for a large construction and I was a mom with a part time job at the YMCA just for the membership.
In our area, and even a 75 mile radius out there were no jobs except labor jobs in the construction industry. Dh’s body really couldn’t do that anymore after years of having thinking not labor jobs and even if he could mid 50s is not the age of hiring laborers.
So we invested his severance in a business he had dreamed of for years, selling refurbished laptops and repair. We started out at the flea market in another town and at 2 1/2 years our business had hit its stride. It by no means gave us what we were making, we had to turn one of the vehicles back in and settle on a couple credit cards. We canceled cable, grew a garden, got pay as you go phones… and just when we thought all was clear and we could start really moving ahead with the dr plan, the flea market went under giving businesses 16 days to find new places. We were fortunate to have a [place… but the rent was twice as much and in a different town. It was like starting over There were absolutely NO frills , no nothing, ds was starting his jr year in college after going to the local community college…my inlaws stepped in and helped with last semesters tuition.. Christmas was hand made, lots of things didn’t make the cut for the holidays…. so here we are… 2014…
Dh just finished up all the tax paperwork….gross…46,000…. net 17,000.. Yes, last year, we lived off 17,000. There are a couple of credit cards I applied and received right before ds went to school from Target and Kohls so I could get his clothes and a comforter etc for his dorm. He used his money he had saved from working for books and gas and phone so we didn’t have to send him $$ during the semester. Foolish to get credit cards… but I did… BUT they are almost both paid off ( under 150.00 on each), the only bills we have are insurance, our flip phones, internet/land line, electric ( which by hanging out clothes and using space heaters only in the rooms we need is below 200.00 each month) and 346.00 for 4 /12 acres of land that we bought 16 years ago and will be paid off in 4 years adjoining our property that is paid for. We maintain our car, we eat from scratch, we continue to build our gardens, this year I am getting a jump start from Swagbucks for gifts and extras . We also were just able to make an 800.00 payment to ds college for this coming semester and he worked over break and is using his Christmas money for books.
The reason I felt poor… is because we are poor! But because we had settled in to DR before all this, creditors are not threatening us, nothing is being taken away, ds should get more Pell Grant and state money because of our income for this year int he fall , we eat well, gardening and hanging clothes, mending and making do take time that I thought at this stage of my life would be a lot simpler, but I HAVE time, and I have health , and I have knowledge, a folks in the area are learning we are there and do work with integrity so I know 2014 will be better.
Private Physicians Health Care sent a letter saying that our health insurance will be 1900.00 a month in March… so we are going with catastrophic care with Samaritans ministries, 246.00 a month for the three of us. That will be an added bill come March.
But we did it… we survived, we enjoyed free concerts, day trips, the library, working on Christmas and homestead projects together, mystery shops ( thank you Jan) for free dinners.
So, thank you all for being cheerleaders this year, for being friends, and lets hope 2014 that ER fund can build back up and we an have a bit more breathing room…
…I still can’t believe we amde it with so little this year!~ I’m kinda proud
if you don’t like the plan option that you chose initially, you can change the plan to any of the other offerings, as many times as you would like.
and I think there was a roast every week (for weekends) – they didn’t have as many options as they do now. Their cauliflower and broccoli soup recipe is still my go-to as it is great and so tasty!!!
there’s a groupon for emeals, half price for a year. I just took it and signed up for the “slow cooker clean eating” plan. I really need to get better at menu planning! There are a lot of things in the first two weeks that I won’t eat – I don’t like to cook pork – but there’s enough to get us going, and some things are easy substitutions (like lamb or chicken sausage for pork sausage). I don’t cook recipes every night, some nights are just spaghetti or whatever, but if I can do 2-3 recipes a week I’ll pull ahead of the freezer (our monthly meat deliveries are starting to pile up!)
Although there are two of us I took the ‘3-6 person’ option because I like having enough for lunch the next day and seconds if we want them, so that’s 5-6 servings. The meat portions seem generous and I like that there’s an iphone app that makes a shopping list and lets you remove meals and their ingredients (but not tinker with them) although hm, the first two weeks had a roast on them. I don’t want to cook a roast every week, I hope that’s an anomaly!
Biggest bill after the mortgage is feed for livestock and dogs and it’s a toss up between utility bills and fuel and cell phone. I could spend less on the cell phone bill when my contract runs out – I’ll have to shop around – I’ve been with T-Mobile for a long time and been an excellent customer so if I do need a little slack from time to time, they are happy to give it to me. If I get into a crunch, that comes in very handy to not have service cut, and I’ve had that happen once or twice in the past, especially after I kicked the ex out and was paying for his contract as well as his mother’s until T-Mobile told me how to have someone else take over the contract – they really were very helpful.
I shopped around for insurance and found that State Farm beats everyone else so I’m sticking with them – been a client since 2001.
I also have cable which runs me $40 and that’s my entertainment, between that and the $8 Netflix DVDs. No premium channels etc. I’m considering going over-the-air, so I’d need a converter box and antenna etc since my TV is not digital.
I do need to work more on spending less on fast food – it’s a toss up at this point since it costs less to grab fast food than it does to cook from scratch. As well as not impacting on time. Its hard to beat spending $1 for a sausage biscuit in the morning which sates my appetite and then I don’t eat until I head home at 6pm since I don’t get hungry. If I eat cereal, I’m starving within 2 hours. Same with cooked oatmeal (even using steel cut which does have a better texture).
I do plan to downsize the dogs – but again, I run up against who do I get pups from when I need them since there are not very many breeders who breed for working ability in Tervs and Icelandics. It’s cheaper for me to breed what I’m looking for since I have a decent market for the pet quality or companion pups. Same applies to my LGDs, I have specific goals and its a chunk of change to lay out $800 – $1200 for a pup coming from good working lines, on a working farm, where health and temperament checks are standard.
There are some days I just want to bury my head in the sand, until common sense reasserts itself and I realize that I’m further ahead than I was last year and really, having my mortgage paid off in 9 years is just NOT that awful, when all is said and done.
IF my sheep sales are mainly meat this year, that’s fine too – it would be nice to sell breeding stock – however, I’ll be delighted to have them pay for themselves and their feed for a year, regardless. Knowing I have my hay paid for through the winter goes a long way to reducing my stress level. And if the sheep could be nice enough to pay for one or two or even *fingers and toes crossed* 3 extra mortgage payments each year, I’ll be ecstatic.
We don’t do much for entertainment …. we allow $125 per month for eating out and have cable, which is WAY too high in my opinion. Dh is supposed to check on getting some kind of bundle price that is lower than what we are currently paying. It’s so high I am ashamed to say what it is. However we have NO premium channels like HBO, etc. so that is in our favor. We don’t go to movies, go to sporting events, etc. so eating out about 3 times a month and cable is about it.
This is why I am wanting to get my coaster/trivet business clearing more per month to help with some of the fun stuff we want to do.
Oh, we are also kinda interested in another sideline business, particularly a laundromat. There is one near our store and is in a good location but seems a little on the distressed side. I have thought about asking a realtor friend to check into it to see if the owner is willing to sell and what the starting figure would be. It would be one where we would have a person man it during business hours …. they currently do that and provide laundry service (wash/dry/fold/iron) … that way we would not have to be there all day.
but it does highlight something that my DH and I have discovered in our own spending. There are categories where it’s relatively easy to cut back, at least over the short term, and we think gosh that’s great we cut back. However, there are categories where it takes some effort to cut back, either because those costs are harder to change and/or higher in general. Yet cuts there “count” more, either because once made they last, and/or because the actual cuts are a lot higher in saved $$$ over the passage of time. For instance, on our working farm, our feed costs are very high – it’s our second highest monthly bill. Only our mortgage is higher. Our eat-out costs are 1/10 to 1/20th of our feed costs. Sure we can cut back on eating out (and we’ve almost eliminated it), yet by eliminating it we haven’t touched our two biggest bills yet. That cut was only a drop in the bucket. If, on the other hand, we do our homework and shop around for better homeowner’s insurance (which we did in 2013) or if we tackle the feed bill (which we’re in the process of doing now), either of those might eliminate hundreds per month from our expenses. Most of you won’t have a feed bill, but everyone has some big monthly cost that we tend to think of as “untouchable.” I think a balance of both tactics – eliminating costs which are easy, but also knuckling down and doing the homework to put bid dents in the major bills – are perhaps the best recipe for long-term budget improvements. Just some encouragement to try……..
I opened my oldest 3 kiddos their own saving and teen checking through capital one 360. I want to really to start letting them manage their money by the month. I have half of my puppies sold already . Once they are all sold the puppy money is going to emergency fund rebuild, new house windows and maybe stainless appliances. We have had plain Jane white since I sold my top of the line stainless ones when we started the Dave plan to pay off debt. It kind of feels like Dave’s jaguar story in his book more than enough. He gave up his prized car and years later God gave him one back. Hubby’s friend builds green houses and is getting us a great deal on the windows at his contractors price. The best part is we are FINALLY getting a heat pump. After years of burning wood I am sooooooo very happy !!!!!!
and got very little of it back. 🙁 So technically, my bowling budget is gone for the month. But realistically, I can’t NOT pay for dues and jackpots. So I’ll have to take if from money I was going to put back into my FFEF…
Our windows are really leaky and thin. I am slowly making a dent in all the things we put off while paying off the house. It has been almost a year since we paid it off. I thought I would be done with our needs replaced list by now.
It’s 8 hours a week at $12/hr. It will give us a slush fund emergency fund for the time being. Things are tight right now, but it’s going into savings and I’m going to scrimp and squeeze the budget. If things get better, I’ll start up our FFEF savings again and funnel my work money into a vacation fund. Either way it’s income and we can use it as we see fit if necessary for living expenses!
I’m excited to be back in the paying workforce after 13 years of being a stay at home mom!
to get our home office totally organized and under control. It’s still a long way from there. This time last year we hauled off pick-up loads of stuff out of here—mainly charitable donations of things we had been going to sell. But after a while we ran out of steam.
Over the rest of the year I slowly have sorted things, and as Anthea will tell you have actually got some work areas set up, but it’s a long way from done. The good news is we’ve not back slid any.
So I’m back at it. As I wait for things to cut out on the Cricut—doing stock build up for the business I’m sorting AGAIN. Today’s big project, two sets of rolling drawer organizers of cardmaking/scrapbooking supplies. Only 2 of the 9 to go on these three sets to go. I’m finding tools I forgot I had….not good. Anyway, I’m back to working on decluttering the office
buying shares of items not already bundled in my mutual funds. I think Sharebuilder is more hands on, you decide what you invest in, versus going with predetermined mutual funds. Yes you can invest in individual shares with Fidelity and other brokerage houses but there are usually minimums to purchase etc.
that are offered by our companies, and I don’t think Share Builder is a big player in that market. I’ve had 401k’s (and a 403B and a 401a) from Fidelity, Wells Fargo, and now Schwab, plus a TIAA/CREF and there was another one I’ve forgotten about . When I’ve switched jobs I’ve rolled any 401k stuff into Fidelity just to keep it all in one place (except for the TIAA/CREF, which is a different sort of beast).
Fidelity has really good customer service, and that’s worth something when you are having a 40-year relationship with a company . They’re a big local company, too, big employer in my field, so that gives me some warm fuzzies. I admit I haven’t done the research to know if they’re the absolute best dollar value around but my accounts have been doing OK relative to the market. (and I’m sure they know that happy customers are probably not going to do all the work to switch)