I admit it

I still have my credit card. I use it a couple times a year to keep it active. I really have it active to keep my credit score up. I know others would disagree with me but here in Washington (state) you get dinged hard on car insurance when you don’t have a good credit score. So anyway, it was time to use it and I made an online purchase of $21.11 3 days after it posted to my account I paid it off.

But to use it I had to dig it out of the safe in our closet. And now, I can’t find the damn thing to put it back! I know it’s in my house. And the scary thing is that my house is generally clean. I don’t have crap everywhere or messes here and there. I am pretty uptight about how my house it. I can’t relax if it’s dirty or messy. So it’s baffles me as to where I put the VISA.

Maybe it’s God’s (and MC’s) way of telling me to get rid of the card…..

It’s odd that ALL the loans changed after BOA took over

For that to happen all of them would have to be past whatever ‘tipping point. was in the contracts. Since it’s unlikely that the loans were originated at the same time, I suppose they’re all old loans?
Mine is a 5/1 loan, so I understand rates changing. Currently I’m at a 3% rate. But even if it starts to go up(even past what I could afford, which is what I was facing in late 2008), I don’t have much recourse. The property values have dropped so much in this area that I can’t refinance. The house isn’t even worth what I owe on it.

That would be nice if it worked that way, but the lender might put up something of a fight

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.

Normally that’s the case –

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.

Just spoke to a friend

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 know I am going to get yelled at but..

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??

It’s 93, sunny but snowing in Virginia today!

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.

Hurray!

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.
Congratulations!

The option you mention would put me all at 6’s and 7’s

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%.

Good luck, and welcome!

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.

For me determining when to pay off would depend on a few things

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.

My name is David, I’m a nurse from VA

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%?

Wow, I had a very similar situation with my son

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!!!

Here are some more facts to make things more clear and maybe it will help

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.

Just something to keep in mind

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…..

Not a good plan for a home purchase

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.

What do you all think is a good age for children to

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.

I took Hillary when she was younger (around 4)

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…

BTW

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.

I got a job today

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!