- Summary
- Companies
- Law Firms
- Retailer has closed all stores after failing to hit revenue targets
- Christmas Tree Shops reached a deal to pay more than $1 million to employees who worked during store closures
Notice of default filings fell a whopping 61.8 percent during September in the state of California, largely due to new legislation that makes it more difficult for lenders to foreclose on borrowers.
The new law, SB 1137, requires mortgage lenders to attempt to make contact with their borrowers, and then wait 30 days after satisfying specific due diligence requirements before initiating foreclosure proceedings.
If a notice of default was filed before the bill was enacted, the lender would need to provide evidence that attempts were made to contact the borrower before taking action.
The sudden impact of the bill is clear, with only 16,352 NODs filed last month, down from 42,790 in August and 36.4 percent less than in the same period a year earlier.
Notice of trustee sales, the final step in the foreclosure process prior to auction, also decreased 47.3 percent from August to just 19,116, but were still up 33.9 percent from September 2007.
There were a total of 23,409 foreclosure sales during the month, a 163.2 percent increase from the same period a year earlier, but 12.4 percent below August’s numbers.
“CA State Senate Bill 1137 has rendered analysis of current activity against prior foreclosure levels useless in understanding market conditions,” said Sean O’Toole, founder of ForeclosureRadar, who provided the September numbers, in a statement.
“What is important to watch now, is how quickly lenders and trustees adjust to the new law. While it is unlikely foreclosures will return to previous levels, given the new requirements; we expect SB 1137 to have no long term impact beyond delaying the foreclosure process for homeowners, and slowing the overall recovery.”
O’Toole, like many of other critics of foreclosure moratoriums, believes such measures will simply delay the inevitable and cause a spike in foreclosure activity further down the line.
Just yesterday, presidential hopeful Barack Obama called for a 90-day foreclosure moratorium for all lenders receiving aid as part of the $700 billion bailout package.
Source: thetruthaboutmortgage.com
At the height of the COVID-19 pandemic in 2020, Penn froze hiring, furloughed workers, and cut program budgets. It also issued then-President Amy Gutmann a $3.7 million home loan.
The University’s loan to Gutmann – which was disclosed in the University’s tax filings and Gutmann’s ethics disclosures to become the United States ambassador to Germany – appears to rival the largest-ever loan issued to a college administrator in the Ivy League, according to an analysis by The Daily Pennsylvanian. The DP previously reported that the same tax filings showed that Gutmann received $23 million in compensation during the final year of her presidency, likely a record single-year payout to a university president.
According to Gutmann’s ethics disclosures, the loan was issued in October 2020 at the federal mid-term rate of 0.38% and has a term of nine years or the termination of Gutmann’s tenured professorship at Penn.
In the same month that the loan was issued, Gutmann said that she would take a pay freeze rather than a pay cut in light of the COVID-19 pandemic, when four other Ivy League presidents took pay cuts of 20% or more.
“In 2020, the Trustee Compensation Committee approved an employee loan for President Gutmann consistent with University policy and applicable laws and regulations to assist in her post President transition,” Board of Trustees Chair Scott Bok wrote in a statement to the DP. “The University, like many peer institutions, has from time to time made loans to senior leaders in order to attract and retain the best available talent in key positions.”
A spokesperson for the University declined to share the written loan agreement or minutes of the meeting where the loan was approved by the Compensation Committee.
Gutmann resigned the Penn presidency in February 2022 after she was confirmed as United States ambassador to Germany and since then has been on a leave of absence from her tenured professorship at Penn. In response to a request for comment directed to Gutmann, the U.S. Department of State referred the DP to Penn.
“Pursuant to written policy, the University grants leaves of absence for employment elsewhere for up to two years,” Gutmann wrote in her ethics disclosures to the U.S. Office of Government Ethics in 2021. “If the University extends my leave of absence past two years so that I may continue to serve as Ambassador to Germany, I will refinance the loan with a different lender, pay market rate for the remaining period of my government service, or pay off the loan.”
Multiple experts that spoke with the DP said that universities commonly issue home loans to top administrators for retention purposes, often in the earlier stages of the hire. They said that more public information was necessary to determine whether the loan issued to Gutmann was fully appropriate, though it is not illegal.
“[$3.7 million] is a large amount, even for the wealthiest charities,” Notre Dame School of Law professor Lloyd Hitoshi Mayer said. “And often university presidents are provided with housing by the university, particularly the more elite universities.”
As president, Gutmann was contractually obligated to live in the President’s House, known as Eisenlohr, located at 3812 Walnut St. Mayer added that the size of university loans issued for home purchases is typically associated with the cost of the home but could also cover furnishings and related expenses.
According to Philadelphia property records and Zillow, a 5,000-square-foot home in the Fitler Square neighborhood of Center City was purchased under the name of Michael Doyle, Gutmann’s husband, for $3.6 million in December 2020. The address is the same as the address listed in Gutmann’s voter registration records.
Mayer said that universities typically issue home loans to deans and other senior officers as part of their compensation package, to help them purchase houses when they begin their tenure — especially at universities in expensive real estate markets. In addition to Gutmann, Penn currently has two $150,000 loans issued to Penn Nursing Dean Antonia M. Villaruel and Graduate School of Education dean Pam Grossman before she left office in July.
The purpose of Gutmann’s loan was initially listed as “retention” in the University’s tax filings for fiscal year 2021 and as a “special employee loan” in the same filings for fiscal year 2022. It was issued during the 16th year of her presidency and had increased to a balance of $3,714,060 as of Penn’s most recent tax filings.
“It’s less common, in my experience, that this happens that there’s a general loan as this one appears to be to the officer without ties, for example, to buy the house when they first take the job,” Mayer said. “But it does happen.”
Glenn Colby, the senior research officer in the department of research and public policy at the American Association of University Professors, said a home loan “can be viewed as an investment” of the University’s money.
“A university the size of Penn has an endowment, and they have to decide, what are our investments?” he said. “In this case, it appears that they said, for one investment, would we give a large loan to [Gutmann]?”
Colby added that the nine-year term of the loan matches what limited research has typically observed for loans issued by universities to professors.
Separately from issuing home loans to University officers, the Office of Penn Home Ownership Services offers an application for financing for home purchases and renovations in West Philadelphia. According to the office’s website, over 1,400 employees and families have participated in the program.
“It’s definitely not a good look,” Colby said. “It’s like why, why are they giving her a loan that massive? And then she left two years after she got the loan.”
While Colby said it was positive that Penn reported the loan in its tax filings he said he would expect minutes of the meeting where the loan was approved to be available to the public.
“The public information raises a lot of fair and legitimate questions that need to be answered about the specifics of the actual loan agreement with the University,” Dean Zerbe, a former senior tax counsel on the United States Senate Committee on Finance who has conducted oversight of loans to charitable officers, said.
Source: thedp.com
Aug 16 (Reuters) – A U.S. judge on Wednesday converted Christmas Tree Shops’ bankruptcy to a Chapter 7 liquidation, saying a court-appointed trustee should take over the bargain retail chain’s wind-down and address doubts about unpaid employee wages.
Christmas Tree Shops filed for bankruptcy in May, hoping to keep most of its stores open while addressing its debt. But the company pivoted to a full liquidation in July after its store closing sales failed to meet revenue targets and Christmas Tree Shops defaulted on a $45 million bankruptcy loan.
During a hearing before U.S. Bankruptcy Judge Thomas Horan in Wilmington, Delaware, a lawyer for Christmas Tree Shops, Harold Murphy of Murphy & King, traded barbs with an attorney for bankruptcy lender and store liquidator, Hilco Global.
Murphy said that Hilco’s store-closing sales missed revenue targets by $14 million. Hilco counsel Gregg Galardi of Ropes & Gray countered that the retailer’s management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.
“Its clear to me that there’s been a complete breakdown,” Horan said when converting the case.
Horan convinced the two sides to reach a partial deal on employee wages, with Hilco affiliate ReStore Capital agreeing to pay $1.17 million to store-level employees who worked during the company’s going-out-of-business sales.
Hilco had initially argued it should not pay any more than it had budgeted in the bankruptcy loan, saying it did not trust Christmas Tree Shops’ calculation of employee wages. But Horan threatened to withhold fees from bankruptcy lawyers and professionals if any low-level employees went unpaid.
“This case is not going to be run on the backs of employees, that’s just unacceptable,” Horan said.
The agreement does not address wages for employees who worked at Christmas Tree Shops’ headquarters or wage claims filed by 250 workers who were laid off when the company went bankrupt.
A Chapter 7 trustee will address those claims, Horan said, adding “we’re not going to forget about the home-office employees.”
The Middleborough, Massachusetts-based company had 82 stores when it filed for bankruptcy, focused on selling home decor and seasonal decoration products.
The case is Christmas Tree Shops LLC, U.S. Bankruptcy Court for the District of Delaware, No. 23-10576
For Christmas Tree Shops: Harold Murphy of Murphy & King
For Hilco: Gregg Galardi of Ropes & Gray
For the unsecured creditors committee: Matthew Ward of Womble Bond Dickinson
Read more:
Retailer Christmas Tree Shops files for Chapter 11 bankruptcy
Bed Bath & Beyond files for bankruptcy protection, begins liquidation sale
Reporting by Dietrich Knauth
Our Standards: The Thomson Reuters Trust Principles.
Source: reuters.com
Mortgage default notices fell precipitously during the fourth quarter in California thanks to new legislation that made it more difficult for mortgage lenders to initiate foreclosure proceedings, DataQuick reported today.
Lenders sent borrowers 75,230 default notices between October and December, down 20.2 percent from the 94,240 sent in the third quarter and 7.7 percent less than the 81,550 sent a year ago.
Recorded default notices, the first step of the foreclosure process, peaked at 121,673 in the second quarter of 2008.
From March to August, lenders sent an average of 40,000 default notices per month before recordings slid to just 14,995 in September after Senate Bill 1137 took effect.
The bill requires lenders to attempt to make contact with their borrowers, then wait 30 days after satisfying certain due diligence requirements before beginning the foreclosure process.
“No one expected defaults to stay at the much lower levels we saw immediately after the new law took effect last fall” said John Walsh, DataQuick president, in a statement.
“The bigger question is whether or not the housing market has hit a low and is dragging along bottom, or if the markets that so far have remained unaffected by the foreclosure problem are due for a fall. With today’s atypical market trends, it’s impossible to predict.”
The majority of loans that went into default were originated between October 2005 and January 2007, primarily in affordable inland areas of the state where subprime lending festered.
On primary mortgages, California homeowners were a median five months behind on mortgage payments and owed $12,867 when a default notice was filed.
Mortgages were most likely to go into default in the counties of Merced, Stanislaus, and San Joaquin, with the opposite true in San Francisco, Marin, and San Mateo.
Trustee Deeds, where a home is actually lost to foreclosure, totaled 46,183 during the fourth quarter, 41.9 percent below the third quarter but 45.8 percent above year-ago levels.
Earlier this month, ForeclosureRadar reported that defaults rocketed higher in December after slowing in previous months, indicating that the bill’s effect was short-lived, and did little more than delay a growing problem.
Source: thetruthaboutmortgage.com
Hey everyone! Today, I have a great savings story to share from a reader named Nichole. She will be talking about how she went from -$20,000 to a six-figure savings by 26 years old. The following will be outlining my experience getting scammed and how it catapulted me into learning about how money works. I…
Hey everyone! Today, I have a great savings story to share from a reader named Nichole. She will be talking about how she went from -$20,000 to a six-figure savings by 26 years old.
The following will be outlining my experience getting scammed and how it catapulted me into learning about how money works. I will divulge all the things I’ve done to earn a six-figure savings, pay off over $20,000 in debt and stay consistent with saving for a home to pay cash. I will go over the importance of knowing your “why” and how it has a large part in saving money. I believe we all have the ability to be successful with our finances and sharing my story hopefully encourages you to stay motivated during your own journey.
Since I was a little girl I’ve always yearned for independence and responsibility. My mother tells the story like this:
“It was your first week of kindergarten and I walked you to the bus stop to drop you off. You didn’t even let me drive you that first day! When I met you at the bus stop after school at 2pm you look at me and say “mom, you don’t need to pick me up from the bus stop, I can walk home without you”. I had to explain to you that wasn’t allowed because you were only five years old and the school didn’t allow that.”
The moral of the story is, if I could do it on my own I did. This included making money so I could buy my own stuff.
Throughout elementary and middle school I sold things to make money: lanyards, bracelets, candy, even offered to do peoples homework for $5 in 6th grade!
Earning money gave me more independence to pay for the things I wanted, so I always stayed motivated.
My parents never talked much about money, I just knew we had everything we needed and more. We were very middle class.
I was taught to avoid debt but to always have a credit card just in case an emergency happens. Oh, and you’ll always have a car payment, so get used to it
It wasn’t until sixteen years old that I learned my parents were always one catastrophe away from losing everything.
In 2008 my parents lost the home they custom built because they took out a no interest loan that they couldn’t afford once it ballooned.
This changed something in me, my world was shaken and I never knew it had a weak foundation to begin with.
I started to view money a different way.
I wanted it but didn’t know how to keep it safe from others that could take it away from me, like what my parents experienced. I didn’t want to repeat their money mistakes.
Fast-forward to 21 years old, I got married to my husband and best friend, yes so young, I know!
The following two years were spent finishing up my Bachelors in Communication and attempting to pay off our debt, we had about $20,000 wrapped up in student loans, credit cards and a car accident. We didn’t know much about money and we were still living with parents to try and save for a down payment for our first home.
This is how it’s supposed to work right? College, marriage, buy a home and have a baby. In that order.
In 2018, my husband and I put an offer on a home, 2 bed 1 bath fixer upper with a nice backyard and workshop in the back for $230,000.
We were excited for our new adventure but when it came down to our offer and one other, we lost. When we got the news our agent said, “yeah, they offered all cash, you didn’t have a chance”. We thought to ourselves, who the heck has that much money to pay cash for a home?! We brushed it off and figured it just wasn’t our time to buy. Little did we know the irony of this.
I started to really spend my time researching about money and how to leverage it and get rich! My goal was to find the secret sauce to success and wealth. I embarked on a downward spiral of YouTubes algorithm of financial videos and advice. Then I came across a very well-known financial expert that offered FREE courses about how to get rich, how could I pass that up? I signed up for the next free course.
Once there I was greeted with excited faces and tons of energy, oh yes, this was my moment to find the secret sauce! The lady speaking talked about all the homes she owns, the money she makes and extravagant trips she takes, I was hooked. I wanted that life, not my own, I needed change.
By the end of the presentation I was willing to do anything to continue my knowledge on financial freedom, or so I thought that’s what I was going to learn. I was the first person to stand up and run over to the tables full of iPads and “We accept credit” signs. I whipped out my credit card and signed up for my 3-day seminar. I don’t mind paying for education! I already had $13,000 in student loan debt anyway so who cares?!
The day of the seminar comes an I am elated, I am OVERLY ELATED. I couldn’t wait for my husband to share the same excitement I experienced at the last meet up. I was again, welcomed by excited faces and high energy. We had our notebooks, pens and open minds ready to learn how to get rich.
To no one’s surprise, we were let down.
Within 10 minutes of the presentation my husband looked at me with eyes saying “we got duped”. He didn’t have to say anything. Let me paint the picture for you.
The presenter had on a gold and diamond link bracelet and a fancy suit. He yelled and poured water on the floor for dramatic effect, handed out cash and even had us stand on our seats in unison shouting the same corny lines “we are warriors”. He informed us that he was going to teach us to buy homes with a credit card and leverage our credit for the best. He promised for the small price of $15,000 that we would learn all about the secret sauce to the rich *can you hear my sarcasm? *. He said we would have mentors along the way to help us buy these homes on credit. He told us not to come back the next day if we weren’t willing to pay for more classes. And we didn’t.
You get the point, it was a 3 days sale pitch to get us to buy more courses.
We walked to our car, now an extra $600 in debt and feeling like the most gullible people in the world. Christmas was only four days away and we were more broke than before we showed up. We had to sell personal items to have Christmas that year.
A switch went off in my head, I was angry. I was so angry that I fell into this scam, I was angry we didn’t get our home, I was angry we were broke, but ultimately, I was angry for not knowing how to manage my money. This stung extra because I hated the fact that in that moment I became my parents, I made a huge money mistake.
Anger is a funny thing, it can ignite the most creative sides of our brain. I decided I was going to get my money back.
What email did I send them?
A short summary of what I experienced and that they had 48 hours to get back in contact with me before I went to social media to expose them and my experience. I received a full refund the next day, with no response, even to this day.
Scorned is a nice way to put it.
I was now on a mission to learn all I could about how money REALLY works.
And so, I went back to my faithful teacher…YouTube of course! I searched and watched hours of videos until I came across one that made sense to me. A lot of financial jargon can be thrown around with no explanation, I don’t like that. I believe if someone can’t explain it easily then they don’t know enough about the subject to begin with.
Then I found the video that made sense: common knowledge and nothing you haven’t heard before (funny how that works).
I acknowledge that everyone has a different stance on money management and I take the view of, “to each their own”. I don’t think there is one “right” way but I found that following this new plan I was able to save more and feel good doing it than I ever did before.
These are the principles I followed, and they worked!
To put them simply they are:
And then there is 3b – Save up for a home. This step is after you save your 3-6 months emergency fund and the current step I am on.
I had an epiphany, if I am in $13,000 worth of debt, and then add another $230,000 of debt for a house and a new car, then I’m going to be in some serious trouble with my monthly bills and interest I’m accruing. MOST Americans live like this. Banks don’t pay Trillions of dollars toward advertising if it didn’t work. Yes, I said “T”.
We paid off my student loans in full that day. I wish this was the end of our debt story but it is not.
My husband, who at this point in our journey is a new real estate agent, started to use a secret credit card to pay for real estate fees. We could have budgeted for these expenses but the shame of using the money I earned and him not contributing got the best of his ego. He bought a $200 chair for his new office, accrued office fees, all new clothes, etc…
Meanwhile I thought we were debt free and his parents were being nice by supporting his new venture! It is important for him and I to mention this part in our story because many people can relate to these feeling surrounding money: shame, guilt, and failure. It is a team effort.
Our social stigmas can convolute our ideas about money within a marriage. We are taught that the man makes the money, but sometimes the story doesn’t work like that and that’s ok!
The good news is, we’ve grown from this experience. We now work so closely with our money that we are each other’s cheerleader and in it to win it!
Since our journey has started we have:
First, I’d like to mention, we are very normal people with normal jobs. I work in education and my husband is a real estate agent.
We didn’t invest in a stock that suddenly went up, win the lottery or get an inheritance.
We worked our butts off to get to this point in our journey and we still are.
Many people can do this and it starts with visualizing it and then believing you’ll get there.
We found out through our process it is exactly that, a process.
How we saved over six figures:
When you have a big enough “why” for the goal you are setting it becomes almost like second nature. You find ways to make it happen.
A good example (but a sad one) is if you have a sick child and not enough money for the surgery or appointment. Because your why for saving is so strong you are going to do EVERYTHING in your power to raise that money and make it happen, no matter what.
Without your why, the process is going to be daunting and drag.
You need motivation behind your goal, so find it.
Why are we saving like crazy anyway?
We decided we want to create generational wealth for our families. Money does not make you happy in life but it does clear up a lot of problems and make it possible to help others. We want to be able to take care of our family for generations.
We also want to be able to give to others. We give with open hands, not clinched ones. If you picture an open hand for a moment, palms up and open to receiving and letting go, vulnerable, not clinching, willing. Having an open hand allows money to flow freely in and out. Being open and quick to give to others rather than holding it tight allows you to see the miracles that money can make in another person’s life. We want to fill our cup to the top so that it pours over and we have enough to fill others.
Our plans for the future to become millionaires:
Our journey is far from over but the successes along the way are proof of our bigger picture becoming a reality. We went from -$20,000 in debt to over a $100,000 savings from the beginning of 2019 to June 2021! Follow my blog for financial insight and more updates on our journey!
Do you have any questions for me? Ask away in the comments below.
Author bio: My name is Nichole Yanez and I am a financial blogger at Elizabeth And Inez. I talk about my experience as a millennial living in Southern California trying to buy my first home cash! I work in the field of education but my passion is money management and inspiring others to start their journey to financial freedom. I hope my story brings hope to others that they are capable of changing their family tree with three things: consistency, hard work and diligence. This is my story about financial deception and how it landed me into learning about money and how it works.
Source: makingsenseofcents.com
Notice of defaults, the first step in the foreclosure process, increased to a record high 54,268 filings last month in California, according to ForeclosureRadar.
Filings were up 29.3 percent over February, 26.3 percent compared to the same period last year, and 25.8 percent above previous peak levels seen in April 2008.
Notices of trustee sales, when a property is set to be auctioned, increased 82.3 percent from February and 19.6 percent from the same period a year ago, but still sat below record highs seen in July 2008.
Meanwhile, auction sales decreased 41.4 percent from February, with just 10,040 properties sold in March, a 36.6 percent decrease from a year ago.
That’s even with mortgage lender discounts at auction increasing to an average 44.1 percent, which makes you wonder if it’s really a buyer’s market…
ForeclosureRadar president Sean O’Toole noted that there has been a large lag between foreclosure filings and foreclosure sales, perpetuated by government meddling.
California Senate Bill 1137, which requires lenders to attempt to contact homeowners before filing a NOD, resulted in a temporary drop in foreclosure filings last September, but only seemed to delay a growing problem.
“The average time from the filing of a Notice of Default to foreclosure sale was 176 days in March, which aligns exactly with the September drop in Notice of Default filings,” the release said.
“Not one government program aimed at addressing the foreclosure problem has dealt with the core issue of negative equity — and there can be no doubt these programs are having dramatic impacts on the foreclosure process”, said O’Toole.
“Unfortunately, the only tangible effect of these programs so far is a significant increase in uncertainty for homeowners, lenders, investors and even government officials trying to make sense of these wild swings in activity,” he added.
The counties of Yuba, Merced, San Benito, Riverside, and San Joaquin led the state in foreclosure sales per capita last month.
Source: thetruthaboutmortgage.com
Car insurance-check. Health insurance-check. Life insurance-check. Mortgage protection life insurance–wait.. what? With so many different types of insurance you can purchase nowadays, it’s very easy to get insurance poor. Buying coverage on your home with mortgage life insurance teeters on the fence of being a bit too much. Before I get ahead of myself, let’s look exactly what mortgage life insurance really is, then we’ll look to see if it’s worth buying. Finally, we’ll look at what other alternatives you can consider instead– such as buying a term life insurance policy.
First, I wanted to clarify what mortgage life insurance is not. Don’t get this confused with PMI (Private Mortgage Life Insurance). PMI is what is required by your bank or lender if you aren’t able to make a downpayment (typically 20%) when purchasing or building new home. I know in our case of the home we’re building, are bank is requiring the 20% to avoid the PMI insurance. For a more official definition, let’s look at what Wikipedia says:
Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. Typical rates are $55/mo. per $100,000 financed, or as high as $1,500/yr. for a typical $200,000 loan.
Mortgage protection life insurance is an insurance plan that will not be offered by your insurance agent- most likely it will be offered by your bank. If you have recently bought a new home or refinanced, chances are your mailbox has been flooded with offers to insure your home. Before you decide to buy it or not, let’s find out what it exactly is.
Mortgage life insurance is insurance that is typically bought through the financial institution that has your mortgage (like your bank).
The amount of coverage that is purchased is the amount of your loan where if something happened to you the bank would be the beneficiary and pay off the loan. In most cases, the policy is a decreasing term where as the years go by the amount reduces as you’re paying your home loan down although the premium you pay stays the same. Curious to find more information, I set out to the web to see what I could find. After Googling “Mortgage Life Insurance“, I came across the website below . I really was hoping to get a true cost comparison between Mortgage Life Insurance and level term life insurance (since that’s what I see it compared to), and this site seemed to have the answer. The website had notified me that if I entered some basic information and agreed that I was okay with 3 insurance agents calling me, then I could get the quote I desired. In the name of research, I went ahead with it.
Immediately after filling out the form and hitting “enter” on my keyboard, my office phone rang and it was a rep calling me from the online company. Wow, that’s was quick. I explained to them that I was a licensed financial advisor and that I was just doing research trying to compare mortgage life insurance. She was fine with it, but to give me a comparison using me as the example; I had to give some information about my medical history. Sure, no problem. After answering a series of questions, she started rattling me off quotes for term insurance. Wait a minute…I know term insurance. I’m trying to find out about mortgage life insurance. I then inquired how what she was quoting me compared to term life insurance? Her response,
“Oh. Well, we don’t recommend mortgage life insurance. We think it’s overpriced and feel that term is much more suitable for most folks”.
Doh! That’s fine, but didn’t answer my question. Turns out even though the site clear reads, “FREE Mortgage Protection Life Insurance Quote“, they don’t even offer it. I have to sheepishly admit that I was duped. And now for the past few weeks my phone has been ringing with insurance agents trying to sell me something I can buy off myself.
One minor roadblock wasn’t going to prevent me from finding the answer I was seeking. Since I’m currently in the process of building a home, I thought what not a better way to get some more information that go directly to my banker. I emailed him inquiring if they do offer mortgage life insurance and how it compares to term life. Here was his response:
“We do offer it with our mortgage loans. Premiums vary on a wide range based on loan amount, age of borrowers, and use of tobacco products. One advantage is obtaining life insurance with few questions to answer and almost no underwriting. Disadvantage is the cost is marginally higher than level term, but mortgage life is decreasing term and pays no benefits to the borrower. It pays the benefit to the borrower and the bank to pay off the mortgage. I recommend to borrowers to look into level term before deciding on either one to compare the cost and benefits. I would prefer to have the benefits paid to the beneficiary and then they can decide how to use those funds. A good example is within the rate environment we have right now. If I have a interest rate below 5%, it may be in my spouse’s interest to take the life insurance funds and pay them out in a monthly benefit or invest the whole amount, rather than paying off a low interest mortgage. With mortgage life you don’t have that option.”
Finally, something more concrete. It was good to hear my banker say that he preferred term life insurance but he did bring up some good points on when buying mortgage life insurance insurance might make sense.
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Mortgage Life Insurance is considered to be a simplified issue product meaning that you don’t have to go through a series of medical screens and blood work to get approved. For somebody that has pre-existing conditions, it could make sense. Also, if somebody doesn’t want to go through the hassle of filling additional tons of forms and having a nurse come to your home, it could make sense.
Please note: There are term insurance products that are called “No Exam Life Insurance” that might be a suitable option compared to mortgage life insurance.
Still not completely satisfied with the information I had found thus far, I sought counsel from insurance expert Aaron Pinkston. I asked Aaron the following questions hoping to shed some light more on mortgage life insurance and how it compares to term.
Mortgage protection life insurance is sold out of convenience. That extra convenience means the cost tends to be higher because the underwriting process can’t be as precise. With a more precise underwriting process, most level term life policies will tend to be less expensive than a comparable mortgage life policy.
Life insurance is designed to protect your family from financial catastrophe in the event of your untimely death (this is different than PMI). Even if you apply for a life insurance policy that requires your mortgage documents as part of the financial underwriting process, once you accept the life policy, it’s yours. As long as you don’t get your life insurance policy through false pretenses (aka. lying), the issuing life insurance companies can’t take it away from you. They also can’t require you to re-qualify for coverage just because of a financial or health change. I think that’s great news.
If convenience and speed is your number one priority, consider mortgage life insurance policies along with other simplified issue policies. If other things like price, company quality, and so on are more important to you, another life insurance option might work better. We’re all different – there’s no one right answer for everyone.
To truly answer that questions depends on many questions:
I think it’s safe to say that in most situations purchasing term life insurance makes more sense than purchasing life insurance. In case you missed it, I had wrote a post that talked about how much term life insurance I bought. The purpose for my life insurance coverage was to pay off our mortgage and to take care of my family if I wasn’t here. If you have a similar desire, then take a serious look at term life insurance. When you do go to get quotes, be sure to shop around. Your age and health, among other factors, will determine which insurance carrier will have the best rate for you.
Source: goodfinancialcents.com
If you are one of the more than 25,000 homeowners who is/was going through bankruptcy and have/had a mortgage with Chase, you might be owed some compensation.
Earlier this week, the megabank reached a deal with the Department of Justice’s U.S. Trustee Program (USTP) to compensate victims of so-called robosigning allegations.
As a result of the settlement, Chase will be required to pay out more than $50 million to affected homeowners through cash payments, loan forgiveness, and mortgage loan credits.
Chase actually admitted to improperly signing more than 50,000 payment change notices (under penalty of perjury), whereby the person who signed it didn’t actually review it for accuracy.
And in 25,000 cases, the notices were signed in the names of other employees, or even employees who had no longer worked for the bank. If this isn’t the definition of robosigning I don’t know what is.
The bank also acknowledged that it didn’t file timely, accurate notices of mortgage payment changes or timely, accurate escrow statements.
The Department of Justice warned other servicers to take note that the U.S. Trustee Program will continue to police their practices and make them pay if they find similar faults.
Those affected by the actions of Chase will be compensated in a variety of different ways.
For about 400 homeowners who received inaccurate payment increase notices, Chase will provide $22.4 million in credits and second lien forgiveness.
For more than 12,000 homeowners whose payment increases or decreases were not filed in a timely manner, Chase will pay $10.8 million through credits or refunds.
Another 18,000 homeowners who did not receive accurate and timely escrow statements will receive $4.8 million in credits for taxes and insurance.
Additionally, more than 8,000 homeowners whose escrow payments may have been applied in an inconsistent manner will be paid approximately $600 per loan.
Lastly, Chase will have to contribute $7.5 million to the American Bankruptcy Institute’s endowment for financial education and provide support for the Credit Abuse Resistance Education Program.
Chase has also agreed to make the changes necessary to ensure these problems don’t reoccur. This includes updating technology, policies, procedures, and internal controls.
For the record, taking part in this settlement doesn’t affect the rights of homeowners to seek relief against Chase in other ways.
If you think you may be one of the 25,000 homeowners covered by this settlement, you may contact Chase at 866-451-2327.
Source: thetruthaboutmortgage.com
Foreclosure sales jumped 31.9 percent last month in the Golden State, following a 35 percent increase a month earlier, but many potential sales are being held back, according to ForeclosureRadar data.
Notices of Default, which are the first step in the foreclosure process, fell 4.2 percent from April, and were down 3.1 percent from a year ago.
Notices of Trustee Sale, which set the auction date and time, increased a hefty 42 percent from April and 24.1 percent from a year earlier, indicating foreclosure sales are likely to rise in the months ahead.
However, of foreclosure sales currently scheduled, 40 percent are being postponed to a future date at the mortgage lender’s request, while another 33 percent are being held back based on a mutual agreement between lender and borrower
“While many complain that lenders are foreclosing too aggressively, and others claim a wave of foreclosures sales is imminent, the data actually shows that lenders are doing everything possible to delay foreclosure,” says Sean O’Toole, founder and CEO of ForeclosureRadar, in a release.
“The reality is that we have very few homeowners being foreclosed on when viewed as a percentage of those scheduled to be foreclosed on, in default, delinquent, or upside down in their mortgage.”
That may be because the majority of foreclosure sales taken to auction continue to be returned to the lender, with 87.9 percent failing to sell to third-parties in May.
This is despite the fact that 83 percent of sales taken to auction last month had a discounted opening bid that averaged just 58.6 percent of the loan value.
Lenders may intentionally be holding back sales for a number of reasons, including capacity overload, accounting tricks to minimize banks losses, and efforts to minimize home price declines; this is what many now refer to as the shadow inventory.
Source: thetruthaboutmortgage.com
There are certain things in life we’d all just rather not think about. A prime example, as an adult, is considering getting a trust or will that determines what happens to your assets after you pass away.
Most people avoid this topic because…well, it’s not pleasant to think about. But the sheer cost of hiring an attorney to prepare those documents is another reason folks opt to ignore trusts and wills.
If cost is the reason, there’s no need to delay any longer. You can take advantage of online trusts and wills to prepare either or both, do-it-yourself style.
What’s Ahead:
This is a question that needs to be addressed before we go any further. That’s because many people use the two interchangeably, as though they’re basically the same document; or perhaps two versions of the same document. They’re not.
A will is the simpler of the two. Its most important functions are to appoint a guardian for any minor children you have, as well as to manage the distribution of assets upon your death.
A trust is the more comprehensive of the two documents. Rather than appoint a guardian for your minor children or manage the distribution of your assets, a trust instead becomes a legal entity that takes custody of your assets. (Guardianship of your minor children must still be provided for in your will). Unlike a will, a trust is not subject to probate or legal challenge. That makes it the stronger of the two.
You’ll need to appoint a trustee to oversee the management of the assets in the trust, as well as spell out exactly what those assets will be. And while a will takes effect only upon your death, a trust can either go into effect while you are still alive or be created upon your death (as a result of trust documents prepared in advance and online).
Online trusts and wills are the same documents that will be prepared for you by an attorney. The only difference is that no attorney is typically involved. Much like many other transactions and processes, the preparation of trusts and wills becomes standardized and automated when they’re made available online.
The standardization is actually an advantage. The structure of both trusts and wills is determined by laws and legal disputes in each state. For that reason, the documents are easily standardized, even to accommodate situations and provisions that may be unlikely but not unknown.
You’ll be able to access trust and will document online for your state of residence. Once you select the right forms, it will simply be a matter of inputting the information that applies to your own preferences for your estate or trust. This will allow you to customize each form to meet your specific needs.
You can think of it as something like the FAFSA you likely filled out when you applied for financing for college. Another example is if you’ve ever done your income tax return, using tax-preparation software. The software asks for all the necessary information to complete your return.
All you need to do is provide that information, and the online service will generate fully completed wills and trust documents – ready to print.
More than anything else, online trusts and will automate the preparation process and do it at only a fraction of the cost of attorney-prepared documents.
Information you should expect to provide for the completion of your will or trust document will likely include the following:
This is just a partial list of the information you’ll need to provide for the preparation of your will or trust. How much will be needed will depend on what you want your will or trust to accomplish.
Even though it’s possible to create do-it-yourself online trusts and wills, it’s not something you want to be cobbled together from various sources on the web. Instead, there are online services dedicated to providing assistance in the preparation of trusts and wills.
One of the best examples is Trust & Will. Unlike a lot of online legal document sources, they don’t offer assistance with many different kinds of documents. Instead, they focus entirely on trusts and wills. If you’re going to prepare documents as complex and specific as trusts and wills, you’ll need the assistance of a company that specializes in that niche.
They’ll provide you with all the necessary legal forms which are designed specifically for the laws within your state of residence. Armed with those documents, you’ll simply enter your personal information in a series of input screens, and the documents will be prepared for you. What’s more, those documents have been provided by experienced estate planning attorneys. In fact, certain documents will be reviewed by experts from Trust & Will before they’re finalized.
One of the benefits that makes Trust & Will stand out from the competition is that you can make unlimited changes to your documents as your personal circumstances and finances change.
You can use the service to provide a Guardian document, which is designed specifically to nominate guardians for your children. Otherwise, you can create a will to make provisions for the care of your children and the distribution of your assets, or a trust, which while similar to a will, enables both your estate and beneficiaries to avoid probate court. Wills and trusts will be reviewed by estate planning experts, but not guardianship arrangements.
You can choose which of the three plans will work best for you:
As you can see, Trust & Will will cost just a fraction of the thousands of dollars you’ll pay to an estate attorney to prepare similar documents.
The answer is yes, as long as it meets certain legal requirements. And those will be spelled out to you by the online trust and will provider.
All you need to do to make trusts and wills legal is to complete the proper forms, then sign them along with any other required parties. Then presto, the documents are legal.
Between the two, trusts are the more complicated plan. It will need to contain the following information to be legal:
You should also check with laws in your state as to who and how many signatures you will need. Typically, you will need to sign the document in the presence of a notary public, but your state may also require signatures by one or more witnesses.
As long as you have all those bases covered, either your trust or you will is completely legal.
Online trusts and wills are becoming increasingly popular. That’s because of the many benefits they offer when compared to having them prepared by a law firm.
Those benefits include:
If you have a busy schedule, it can be difficult to carve out time to meet with an attorney, let alone follow-up visits. But perhaps like a lot of people, going to an attorney’s office is something like going to your dentist or doctor – it’s something you’d rather avoid if you possibly can.
Online trusts and wills give you the benefit of being able to prepare documents from the comfort of your own home.
Typical online trust and will programs are set up based on a question-and-answer format. You’ll enter the necessary information (see list of that information above) into input screens, and the documents will be automatically populated and prepared for you. You don’t even need to know anything about trust and will documents.
A lawyer will charge a minimum of $300 for a very simple will, but $1,000 to $1,200 is much more common. By contrast, an online will can be prepared for less than $100.
The savings on a trust preparation are even more significant. An attorney will typically charge several thousand dollars to prepare a trust, while an online plan will be no more than a few hundred dollars.
Sit down and speak with an attorney for an hour or so and you may leave more confused than when you went in. Legal-speak doesn’t translate into English very well, and not all attorneys are sensitive to that fact. It’s even possible you may be too confused – or even too intimidated – to ask any intelligent questions.
With online trusts and wills, there’s no face-to-face meeting, no complicated legal terms, and no coming away wondering what really happened.
Let’s face it, in virtually every field there are good apples and bad apples on the other side of the desk. While it may seem comforting to have an attorney prepare your trust or will, you’ll be completely at the mercy of his or her competence or sensitivity to your specific needs. If so, you may get a poorly prepared set of documents with overlooked or omitted provisions that are important to you.
With online trust and will preparation, the process is standardized. There are no egos involved, no intimidation, and no personality clashes. You’ll go online, indicate the documents you want, and enter your relevant personal information. The documents are then prepared for you – and often reviewed by experts – then provided to you.
There are three factors that can present complications with online trusts and wills:
If you have a fairly simple financial situation, online trusts and wills can get the job done for you. That may include a situation where you own your own home, have a retirement plan, and money in the bank. That’s a standard financial profile and one that includes few potential legal curveballs.
But the do-it-yourself route may not be appropriate if your finances are either more extensive or more complicated.
Examples of these situations include the following:
Any of these circumstances and more may require special handling by an estate attorney. There may be specific state laws or provisions that will affect the distribution of your estate in unexpected ways.
If your estate will require provisions to accommodate complex situations, it may be best to have your will and trust prepared by an attorney.
Examples of special circumstances include:
Wills and trusts might not be nearly so complicated if life were more stable. Unfortunately, it’s not uncommon to experience major changes in life that, while not specifically financial in nature, will ultimately have a financial impact involving your estate.
Examples include:
When creating a will or trust it’s important to understand that the changes above (and more) may necessitate a redrawing of your documents, or at least significant modification.
Unless you have a complex family or financial situation, you can use an online trust or will service to prepare either document. It will make certain your children are provided for, your assets are protected, and your final wishes are carried out. The process is simple and inexpensive, you can do it all from the comfort of your home, and either plan will be completely legal.
Going without at least a will is playing with fire. If you die without a will, the disposition of your estate – and even the care of your minor children – will be determined by a court of law. A will gives you an opportunity to make those decisions in advance. And if you have significant assets, a trust will enable you to protect those assets, distribute them to who you want, and avoid the probate court potential that often comes with wills.
Given how simple and inexpensive online trusts and wills are, you should take advantage of this technological breakthrough to prepare the documents you and your loved ones will need.
If you have a complicated family or financial situation, you may need to use an attorney to prepare your will or trust.
A complicated family situation could be one in which there are children born outside your current marriage. Another example is where you want to exclude one or more children from your estate or trust.
An example of a complicated financial situation is a business. If you have partners or multiple owners in the same corporation, special consideration will need to be given to those individuals after your death. The same may be true if you have substantial business debts.
Unless you have a very complex financial situation, you should seriously consider taking advantage of online trusts and wills. Not only will it cost only a fraction of what you will pay to an attorney for the same service, but you may find it easier to create the will or trust of your choice online and in the comfort of your home or office, rather than sitting across the table from an attorney – with the fee meter running.
Don’t be without a will, and if you want to create a trust, do it now. With all the advantages offered by online wills and trusts, there’s no reason to put it off any longer. The peace of mind you’ll get will more than justify the time, effort, and money spent making it happen.
Source: moneyunder30.com