Should You Switch to an Online Bank Due to the Latest Fees From the Big Banks?

Posted on October 10, 2011 by admin

I must confess that I love watching consumers exercise their right to shop where they believe they’ll get the best value.  The latest article on MSN highlights that online banks are seeing large increases in new members as people, fed up by the latest fee hikes at commercial banks, shop around for better deals.  While I still think credit unions are the best place to stash your money and get your loans, online banks also offer much better rates, and services than the traditional commercial banks like Bank of America or Chase.  This is one of the best examples I have ever seen on why we can’t allow consolidation to reduce competitiveness in the banking sector.  Imagine if there were only a few large commercial banks where we could do business.  It would be similar to the airlines where they all watch each other for rate increases and follow suit.  Having credit unions and smaller community banks drastically improves the competitive environment for everyone and ensures we get the best rates.  Apparently the big banks are counting on the majority of their customers being too lazy to make the switch.

The reality is that it’s not very hard to switch banks.  If you take a little time to open new accounts and then gradually shift your deposits and payments over to those new accounts, you can be set up at a new institution in no time.  Just make sure that you choose the right institution when you switch.  While it isn’t a big deal to make the move, it’s enough of an effort that you don’t want to be doing it every 6 months!

Anyway, go check out the article at MSN.  They mention a couple of the better online banks out there including Ally and ING.

Filed under: credit/debt, Investing, Saving, Spending | 1 Comment »

Which States Do Not Allow Deficiency Judgements?

Posted on October 7, 2011 by admin

These days it seems like every other house on the block is headed towards foreclosure in some areas of the country.  We’ve seen a few around our neighborhood but overall it’s been relatively light compared to some parts of the country.

When people walk away from a home and the bank forecloses, there is often a gap between what the bank sells the house for and the remaining mortgage balance.  In many cases, banks simply sell the house for whatever it can get and then books the loss.  Increasingly, banks are starting to go to court to get deficiency judgments against the previous homeowner.  Deficiency judgments are court approved balances that the bank has sued the homeowner for.  In a lot of cases, this debt can follow you around until it’s repaid.  It’s often sold to investors who try to collect using debt collectors.  Of course, by the time it reaches that stage there is additional interest piling up.

Not all states allow for deficiency judgments against homeowners.  Some states are considered “no recourse” states.  This means that once the bank has sold the property at foreclosure, they have to write off the remaining balance owed.

Which states don’t allow deficiency judgments:

  • Alaska
  • Arizona
  • California – Allows only a single legal action (Google it)
  • Connecticut
  • Idaho – Allows only a single legal action (Google it)
  • Minnesota
  • North Carolina
  • North Dakota
  • Oregon
  • Texas
  • Utah – Allows only a single legal action (Google it)
  • Washington state

It should also be noted that home equity lines of credit (HELOC’s) and home equity loans are usually exempt from these limitations.  If you are facing foreclosure, you may want to seek legal assistance to understand your rights and responsibilities.

Filed under: Lottery, Misc | 1 Comment »

Mortgage Rates Fall Below 4% For First Time

Posted on October 6, 2011 by admin

Amazing.  I never thought I’d see a 30 year mortgage rate below 4%.  It’s an amazing time to buy or refinance a home if you meet all the latest criteria.  You know, have a job, have 20% equity in a home (refinance), have a 20% down payment, have a high credit score and the list goes on.

We refinanced a couple years ago at 4.87% and were thrilled to get that rate at the time.  I’ve been considering refinancing but I’m not ready to do it yet.  I think we have enough equity in our home to qualify for a new loan, but you never know with the falling real estate values.  I’ve also been considering getting a 15 year mortgage but I don’t like increasing my payment during such an unstable economic environment.  15 year mortgage rates are also hitting record lows.  The latest rate that CNN Money found was 3.26%.  That’s cheap money!

so, I’ll run the numbers and then talk it over with my wife before we decide on whether to pull the trigger.  I’d like to decrease the term of our loan because I know it would save a lot of interest over the term, but like I said, it will all come down to whether we are comfortable with the increased payment.

Anyway, check out the article from CNN Money.

Filed under: credit/debt, economy, Spending | 1 Comment »

Banks Suing For Remaining Mortgage Balance on Foreclosed Homes

Posted on October 6, 2011 by admin

As we’ve been living through the foreclosure mess of the last few years, I haven’t heard all that much about the banks going after homeowners for remaining balances on a mortgage once the foreclosure and sale of the property has taken place.  This appears to be on the incline and there is a whole new secondary market for the debt.  This is only  happening in states that allow for deficiency judgments (but that’s a lot of them).  The Wall Street Journal has an article that profiles a few different people (mostly in Florida) that are facing large deficiency judgments.  In some of these cases, the banks won’t be able to collect anything and the homeowner will likely try to declare bankruptcy to escape the debt.  In others, like Julia Ingham, they’ll likely come after her retirement and other investments.  People who are strategically defaulting are much more likely to face these deficiency judgments because they actually have assets.

Anyway, go check out the article if you like reading about other people’s financial situations and want to learn a bit more about these deficiency judgments.

Filed under: Lottery, Misc | 1 Comment »

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