Do Not Keep All of Your Money In The Same Bank!!

Let's keep this real simple.

If you have a Chase credit card then you should not have your checking or savings account with Chase. And don't forget, Chase owns Washington Mutual.

If you have a Bank of America mortgage then you should not have your checking or savings account with Bank of America. And don't forget, Bank of America owns Countrywide, so the same rule applies.

This rule applies if you guaranteed or signed a loan on behalf of someone or a business.

Let me explain. The banks are so desperate they are doing anything they can to recover money. Normally, if you did not pay a debt owed to a bank, then the bank must file a legal action in court, obtain a court ordered judgment, located your property, bank account or job, and place a lien on what you own. This includes garnishing wages. This is a long and costly process that does not serve a banks best interests.

So...they have come up with a great solution.

If you are behind on a Chase credit card, then no worries Chase will just take the money from your savings or checking account. The best part...they don't even notify you first. One day you wake up and your money is gone.

Or...let's say you are a guarantor on a Bank of America (BOA) personal or business loan and the loan is unpaid..well no problem for BOA, they will just take the money from your account. Same day, same time.

Now in response to these immoral (perhaps illegal) actions, the bank will say "We have the right to do it." Perhaps they do...perhaps they don't. The problem is, once the money is taken from the account, one must go through HELL to get it back.

As you read this, lenders are combing the records of every customer who has an outstanding debt or the responsibility of another person's debt. They are then matching this information with checking and savings accounts for the same customers. The next step is to just take the money from the account to pay off the debt.

It's a simple process from their perspective. A destructive process from the account holders perspective.

Now admittedly, there actions are justified to a degree. If a lender is owed an outstanding obligation why should they run around chasing a customer, especially if the money is sitting in an account by the same customer.

So beware and follow these rules.

1. Your checking account should be at a separate bank from your savings account.
2. Your savings and checking account should be at a separate bank from your credit card account.
3. Your savings and checking account should be at a separate bank then your mortgage loan.
4. Your savings and checking account should be at a separate bank then your business loan.
5. If you are a guarantor for any type of loan then make sure you do not have a savings or checking account at the same bank.

Keep this in mind and protect your money.

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Never Throw Good Money after Bad

I have learned so much from talking to people who can't pay their mortgage. They are afraid they will lose their home. They are concerned about their kids, their family, their stability. On top of that they usually have high credit card debt. Most of all, they take it personally and feel like they failed. They feel like they're not in control because of tight finances.

I always say "I've been there, we've all been their, you are not alone. You will get past this"

It is important to empathize with people and respect their feelings about their situation. Each persons' circumstance and their reaction to it are unique.

YET, how the problem is resolved is ALWAYS THE SAME.

Don't Throw Good Money After Bad!
Don't Throw Good Money After Bad!
Don't Throw Good Money After Bad!

Hmmm...Let me see...what's Good money after Bad.

Well, if the mortgage balance is higher than the value of the property (aka being Upside Down) or if you are spending most of your income on mortgage payments or if you neglect to pay other expenses or if you are draining your savings or retirement money...basically anything that is better investment than your mortgage payment, then making mortgage payments is throwing good money after bad. What's the primary reason to own a home. At the end of the day it's about wealth preservation and creation. Everyone buys a home in hopes that it will increase in value over time, this way we can get a return on thousands of dollars in mortgage payments, years of repairs, upgrades, taxes, insurance, and utility payments. A piece of your estate that can be passed on to your children.

THIS TIME THINGS ARE DIFFERENT. You cannot rely on the old saying "the real estate market will bounce back and prices will return". While it's true real estate markets move up and down, there is no way property prices will return to the levels we saw from 2004 to 2007. No way. This means if anyone purchased a property during 2004 to 2007, it is likely the purchase price was at the peak of the market. This scenario is not limited to purchases. Many people refinanced at the peak of the market because..well...that was the time to extract tens of thousands of dollars from a home. It was when anyone with a good credit score and a warm body could get $100,000.

Well, Peak No More. The gold rush is a bust. Everything was built on inflated appraisals and of course, greed. The Kool Ade went empty and the Band Aid became necessary. Most properties will continue to decline. It is estimated that by 2011, almost half of all mortgages will be "underwater". So don't be fooled if you hear the real estate market is getting better. It's better for people looking to buy foreclosures and cheap houses since there is a glut of property and everything is cheap.

So for those of us who took out mortgages at(whether to buy or refinance) 90% to 100% financing, option arm, adjustable, or even fixed rate, repeat after me..."My property value will never be what I(purchased or refinanced) for, and it is likely I will not have any equity.

What about credit cards with interest rates of 16%, 17%, 18%, 24%, even 30%? What about the new fees, such as membership fees and other hidden fees? Does it make sense to make these payments? Are you throwing good money after bad? Ask yourself, even with good credit, what are the chances you can get another credit card with a lower interest rate? Or ask, How come the credit card company won't lower my interest rate even though I have good credit?

So repeat after me..."I will never payoff my credit card unless the credit card company lowers my interest rate to 5% and reduces my principle".

Let's make no mistake. The banks primary motivation is to fix their own credit and debt problems (which by the way is worse than yours). How can you explain that despite this current recession, job losses, foreclosures, high debt burden, the banks, according to the Financial Times, were able to "collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s...The fees are nearly double those reported in 2000...".

So repeat after me..."It's so obvious the banks are doing anything they can to get cash from cash strapped consumers. Why am I surprised, it's a bank, no one owes me any favors"

There is this moral issue about being responsible for a debt after you agreed to take it on. In fact, it is a question of integrity. Essentially, once we sign on the dotted line we must stick to the deal under all circumstances.

Ask yourself, is it fair for the government, big banks, big businesses, and other power players to get a bailout. Why can't you use the same techniques banks use when they are in trouble - DEBT FORGIVENESS, LOW INTEREST LOANS, STOP MAKING LOAN PAYMENTS, TAXPAYER FUNDED GOVERNMENT BAILOUTS, in effect, A bank does not throw good money after bad.

It is your duty to protect the financial well being of yourself and your family. You do not have a moral obligation to pay a bank anything. Your obligation is only legal. It is not a crime to put your money to best use.

So repeat after me..."I will never throw good money after bad".

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Foreclosure Defense Rule#1 : Always Respond to A Foreclosure Case In Writing

All too often, when a homeowner is served with foreclosure papers, they put it in the junk mail pile. In fact, homeowners pretend that it does not exist. Just a thick package of papers that will magically disappear. Sometimes, homeowners think that by talking to the bank on the phone, the foreclosure case is somehow stopped.

It's only when they receive a Notice of Sale all hell breaks loose. All of a sudden the case magically re-appears. My favorite excuse is: "We were never served any papers." I don't think so. While it's true that many foreclosure papers are not necessarily served as the law requires. For example there is a term called "gutter service", which essentially means the papers are just thrown on the ground in front of your house, in the gutter. The truth is most homeowners receive the papers in some fashion, so they have NOTICE that a foreclosure has started. It's just they choose to ignore it.

Let's get real. This blog sole purpose is to help people protect their home, protect their wealth, protect their financial future. So if there is anything that you learn from Never Sign Your Deed, its

ALWAYS RESPOND TO A FORECLOSURE ACTION IN WRITING. It is your right to defend your self. In fact, a written defense will accomplish one main objective. IT WILL SLOW THE FORECLOSURE DOWN. It is always, 100% of the time, to a homeowners advantage to slow a foreclosure case down. Why? You never know. Perhaps circumstances change that allow the homeowner to keep the property. Perhaps there is a chance to get some equity out of the property. Or the homeowner simply needs to time to get it together. What ever the reason, a written defense is mandatory.

The written defense must be mailed to the attorney who started the foreclosure. The written defense must be mailed and filed to the court where the case was started. You should consider hiring an attorney. If you can't afford an attorney, then contact a local non-profit or legal aid. If that does not work, then prepare your own answer and write yourself.

What should you say? You should say anything and everything that you feel may be wrong with the foreclosure case and may be wrong with the loan. You can contact the court where the case started to see if they have any assistance for self-represented people.

I must admit that there are some good resources on the internet. However, it is not a substitute for good legal advice.

All and all, do not sit on your ass, bite your nails, play the "if I ignore it, it doesn't exist" game.

Here are a few resources that can help you or someone you know:

• If you or someone you know wants to learn more about a foreclosure, go to this link : What is Foreclosure?

• Always please review our -Foreclosure Dignity Organic Bill of Rights.

• If you or someone you know is feeling unsure and emotional about the situation. They need more confidence, then please read : Foreclosure Dignity

• For a brief introduction on laws that are to protect property owners then review Your Rights link.
  

All in all, this issue fires us up. To often we speak to people who let a foreclosure case go on to the last minute. All of a sudden the homeowner is scrambling, perhaps considering filing bankruptcy, and making "under the gun" decision when...

If they read this post, they would have more control and perhaps some peace of mind.

Thanks for listening.

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Tenants in Foreclosure Properties Are Now Protected Under Federal Law

If you are a tenant, that happens to be living in a property in foreclosure. No need to sweat. There is a recently enacted federal law that gives tenants time to get it together and move or even stay.

If you purchase a property at a foreclosure sale or you are a lender that takes the property at a foreclosure sale and there are tenants in the property, you better start sweating.

Under the Helping Families Save Their Homes Act, a tenant has the right to stay in the property after a foreclosure sale for a minimum of 90 days. If the tenant has a lease, then THE LEASE STAYS IN EFFECT after the foreclosure sale.

Now let's review specific provisions of the relevant law under sections 701 to 704:

• The law applies to a federally related mortgage loan on any dwelling or residential real property.
• The new owner after foreclosure sale, which includes a lender who takes the property must give a "bona fide" tenant a 90 day notice before the tenant can be evicted.
• A tenant with a "bona fide" lease entered into before the notice of foreclosure has the right to stay until the lease ends. EXCEPT that the new owner after a foreclosure sale can terminate a lease, if the new owner intends to occupy the property as his/her primary residence. This is still subject to a 90 day notice delivered to the tenant.
• Section 8 Tenants are protected under this new law.
• Who is a "bona fide" tenant? It is an individual or individuals that are not the prior owner of the property and are not the child, spouse or parent the prior owner.
• What is a "bona fide" lease? the lease or tenancy is based upon an arms-length transaction and requires rent that is not substantially less that the fair market rent for the property, which includes any reduced rent or subsidy due to a Federal, State, or local subsidy.
• What is a "federally related mortgage loan" – a) It is secured by a first or subordinate lien on residential property (incl. condos and coops) of one to four families or, b) it is made in whole or in part by any lender the deposits or accounts of which are insured by any agency of the Federal Government or, c) it is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by the Secretary or any other officer or agency of the Federal Government or, d) it is intended to be sold by the originating lender to the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or a financial institution from which it is to be purchased by the Federal Home Loan Mortgage Corporation or, e) it is made in whole or in part by any "creditor"...who makes or invests in residential real estate loans aggregating more than $1,000,000 per year. For a complete definition of federally related mortgage loan" please review section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).

This law helps tenants stay in a property after foreclosure. Most important if a tenant has a "bona fide" lease, then the tenant gets to ride it out.

So the net effect is this. No one will bid for a property at a foreclosure sale that has tenants in it. The lender will end up taking the property back. More properties on the books of lenders. Not good for lenders. Lenders are in for it now. A big positive is that lenders will have an incentive to modify a mortgage loan or strike a deal before a foreclosure sale, if the property has tenants.

I must admit, I like this law because it tips the scales towards the people and away from the lenders.

We'll talk about this some more later on. Enjoy your day.

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Behind My Scenes Now Back On Stage

I took a two month break, now getting back into writing this blog. It's amazing what can happen in just 60 days. Especially personally. I learned that the only way is the RIGHT WAY. I truly understood that I am totally responsible for my decision and actions. Each person has a unique way, there own RIGHT WAY, which may not be YOUR WAY, but at the END OF THE DAY who cares. As long as it ALL WORKED OUT.

It is so important to value the people around you, first and foremost. Truly staying connected to and loving with your spouse or loved one, your family and close friends.

Staying connected also means you tell them about how to protect their property...
Now let's continue talking about "working out" your bad debt. Especially, if you carry an expensive mortgage on your property.

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Why Do Banks Still Call Even If You Tell Them You Can't Make Payments

This is my advice to you, when a lender or creditor calls asking for their money:

You Say : "Listen, Mr. Lender. I accept that I owe you money. It's true I have missed my monthly payments. There is no question I am behind. The truth is...I don't have any money to give you. Let me tell you why...I have lost my job or my spouse lost his/her job or I made bad investment decisions or my business failed or I am a poor money manager or I do not plan to make any more payments...So you see I will not be able to make any payments to you for at least 3 (6, 9) months. There is no reason to see my financial paperwork, since I told you that I will not be able to pay you for at least 3 months. Now that I explained my situation, will you stop calling me for at least 3 months?"

Lender Underpaid Rep Says : "We'll Sir, we can't stop calling. Your number came up through our computerized calling system. Our system has been programmed to call you 5 to 10 times a day. We are told that the more we harass you, we may be able to get something instead of nothing. We do appreciate your honesty. We will notate your account with your honest statement. OK. And there it is I just notated your account. While we understand you will not be able to pay us for at least 3 months, unfortunately we will call you tomorrow"

You Say : "What a minute. Let me get this right. I just told you that I cannot pay for several months, so what do you think I can say or do, if you call me tomorrow. You can't squeeze blood from a stone. If you know that I can't pay, won't your call amount to harassment."

Lender Underpaid Rep Says : "Sir, under applicable agreements and our internal directives, we have the right to call you any time. I understand where you are coming from, it just that...you know...we have to follow our polices."

You Say : "Then your policy is simple: 'Even if the Borrower does not have the money, we need to call them everyday anyway'. This does not make any sense. What additional info will you get tomorrow, if you know, RIGHT NOW, I can't pay for another several months. I mean...you are not calling me to talk about the weather."

Lender Underpaid Rep Says: "Sir, I understand. The truth is I am just a low paid laborer who acts like the front line infantry. We get hit first when the bullet's fly. Your right. It doesn't make sense, however our jobs become meaningless if we do not call you with our fake 'we care for you tone'. This is just another form of high pressure sales. We want to make sure you eat, sleep, sh..t, and talk about what you owes us. EVEN THOUGH YOU TOLD US YOU DO NOT HAVE THE MONEY."

You Say: "Well then. I appreciate your honesty. However, your honesty does nothing to help me, except to prove that 'phone call boarding' is your company's torture policy. At this point, I want you to NOTATE MY ACCOUNT with "If the calls continue, I intend to use any legal means necessary to stop the calls and to receive compensation for your harassment. So have a good day. Thanks for opening up. And...pick your head up. I know you got a job to do.

Lender Underpaid Rep Says: "Thank you sir, and you have a good nite."

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A Bank Can Sue You and Get A Money Judgement

Hello all. It is time to talk about certain money collection practices by the Lenders which are UNFAIR. And that's just being mild. While I respect the right for a bank to collect on a loan, if they have received money from taxpayer funded TARP or GARP or TALF or RALPH programs (b/c they have debt issues) then they better be show the same respect to you because of your debt issues.

Most of us know that a creditor can sue anyone of us, and if they win, get a money judgment. This judgment can be used to freeze your bank account while the creditor takes your money. A judgment can be used to garnish wages. It stays on your credit report for up to 20 years in certain states. The only way to get rid of a judgment is to win in court or settle with the creditor or pay the full amount with penalties.

HERE'S THE THING. I am know seeing Banks with second mortgages or HELOC'S (Home Equity Lines of Credit, sue a HOMEOWNER instead of STARTING A FORECLOSURE. That's RIGHT. If you have a mortgage a lender has the option of forcing the sale of the property OR suing the HOMEOWNER/BORROWER for the loan amount thereby getting a money judgment.

When we sign for a mortgage loan to buy or refinance a property, we sign a NOTE and a MORTGAGE. The NOTE allows the lender to get a personal money judgment against the borrower. The MORTGAGE allows the lender to force the sale of the property in order to get their money back.

Most times a LENDER will start a lawsuit based on the MORTGAGE so they can force the sale of a property. In the past the LENDER believed there was a better chance to get their money back from the sale of the property instead of trying to get a judgment against the borrower. When a bank sues a borrower it becomes an unsecured lien. Whereas, when a bank starts a foreclosure they have a secured lien.

The unsecured lien normally made a LENDER feel insecure. NOT ANYMORE it seems. Many lenders are discovering that doesn't pay to foreclose on a property that has no value and probably will never reach the values of before. For LENDER's taking a property in foreclosure is a money losing proposition. So a smart group of risk analysts said "It's better to sue for a personal money judgment against an individual. We will get more money from an individual then property. It's better than nothing. We can collect on their wages or any future assets because our judgment will last for 20 years. The big plus...no one will want a $300,000 judgment against them for not paying a mortgage loan or HELOC. THEY WILL BE OUR DEBT SLAVES FOREVER... FOREVER...FOREVER....FOREVER.....FOREVER.....FOREVER."

Yes, Bankruptcy can be an option. Normally a Bankruptcy can discharge unsecured debts. Meaning, once discharged, you never have to pay it. The Bankruptcy laws have changed, so depending on the particular situation, an unsecured debt may not get totally wiped out.

Most importantly, WATCH OUT. If banks are deciding that they can get more mortgage loan money by suing for a personal judgment instead of a foreclosure, then must know something, that most of us DON'T.

Most people do not want a $300,000 judgment against them personally because of an unpaid mortgage loan. In my opinion, while a lender has the right to do it, it is YOUR RESPONSIBILITY TO FIGHT BACK.

Do not sit back and let the bank do it. You must always defend yourself. I mean, let's think about it. You may have been making all these interest payments to the lender. Very little of your payments went to principle. NOW a lender wants a judgment against you for a mortgage that's worth more than the house. Or perhaps an adjustable loan that out of whack with your income. And to add insult to injury the lender is taking forever to give you a loan modification, while the lender gets your taxpayer TARP money, harasses you and your family with calls, letters, and visits, starts legal action. The loan may have flaws on top of that.

WE DON'T THINK SO.

The bottom line is Knowledge is Power. Be prepared to defend yourself against the onslaught of debt collection practices that's going to make your head spin, stress you out, and wrap you up.

This time, you will be prepared and ready to win the fight.

Remember You Have A Legal Obligation to a Lender Not a Moral Obligation.

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