Feb. 3, 2009 - Blumenthal Bill

Blumenthal Bill Targets Foreclosure-Rescue Schemes
By KENNETH R. GOSSELIN
January 7, 2009

With foreclosures at record levels in Connecticut, the attorney general on Tuesday proposed legislation aimed at protecting consumers from foreclosure-rescue and other personal finance schemes that promise help for a fee, but don't deliver.

Attorney General Richard Blumenthal said his proposal would tighten existing regulations and require that any entity offering to help consumers facing foreclosure or mounting debt be a nonprofit counseling agency. The state regulates such agencies.

The legislation seeks to eliminate a loophole that allows disreputable businesses to take advantage of consumers by charging high fees or, in some cases, requiring them to give up ownership of their homes, Blumenthal said.

Blumenthal said hundreds of residents have been victimized by such schemes, which have grown in number with the rise in foreclosures and job losses. He said his office is investigating several cases and is compiling a list of perpetrators.
"They sink consumers like quicksand through financial schemes that doom families to deeper debt, even as they struggle," Blumenthal said.

In addition to requiring mortgage- and debt-assistance companies to be nonprofit, the proposed legislation would require the businesses to clearly spell out services in a contract, allow consumers to cancel within three days and would prohibit upfront fees.

Blumenthal was joined at a press conference Tuesday by key legislators and housing advocates.

"When people are desperate, they make these calls," said state Rep. Kenneth Green, D-Hartford and chairman of the legislature's housing committee. "They don't realize they get promised a lot of things, but they don't get the delivery of those services."

Green said the problem could get worse if the economy deteriorates further and more people lose their jobs and get behind on their mortgage or other monthly bill payments.

As of Sept. 30, the state had 18,600 home mortgages in foreclosure or 90 days past due, about 3.5 percent of all home loans, according to the Mortgage Bankers Association. That compared with 16,560, or 3.1 percent of the total, as of June 30.

The co-chairmen of the legislature's banks committee — state Sen. Bob Duff, D-Norwalk, and state Rep. Ryan Barry, D-Manchester — said Blumenthal's proposal would build on mortgage lending reforms and programs passed in the last session of the General Assembly.

- Jan 2009 Forced into landlordship

Home Sellers Forced To Become Landlords
By ROBIN STANSBURY | The Hartford Courant
January 4, 2009

Scott Moreland is a reluctant landlord.

Two years ago, when he got married, he and his fiancée both had houses. So they moved into one and listed the other — a

two-bedroom single-family in Portland — for sale. After months of waiting for a buyer, the couple decided to rent out the home instead.

"It was really bad timing. Just as the market started to come down we were trying to sell," said Moreland, who lives in Preston. "I'd

really rather not have to deal with renting it if we didn't have to, but we can't swing two houses."

Moreland's first tenant is now moving out, so he's searching for a second — and still waiting for the real estate market to improve so

that he can again list the home for sale.

"It's a balancing act because we can't list it for sale while we have a tenant," he said. "But we're also losing money every month, so we

can't do this forever."

Accidental landlords like Moreland are popping up all over Connecticut.

The state's tumultuous real estate market — where sales have plunged by double digits in recent months and prices are on a

steepening downward trend — has left many sellers in a lurch, unwilling or unable to sell their homes for a price they find acceptable.

So, increasingly, these home sellers are turning to renters instead.

In the first 10 months of the year, for example, the number of single-family homes listed for rent by a real estate agent increased 47

percent compared with a year earlier, said Amy Bergquist, an agent with William Raveis Real Estate in West Hartford, who examined

16 towns in the Hartford region. In that time, 294 single-family homes were listed for rent, compared with 200 the previous year.

Bergquist said the actual number of home rentals in the region is much higher, because not everyone uses a real estate agent to list a

home for rent.

She said renting is sometimes a good alternative to selling in a down market.

"If you don't need to sell, and you don't need the cash from your home, you can potentially wait out this market if you feel you're not

getting the price you want. That's the main advantage people see to renting," Bergquist said. "And we're seeing more and more of it

in this market."

But there are disadvantages to becoming a landlord. Managing a rental property is not easy, especially if you're moving out of the

area. When things in the home break or need replacement, it's the landlord's responsibility to make those repairs.

"For us, that's a solid 45-minute ride to get to the house every time something goes wrong," Moreland said. He said he considers

himself lucky that his first tenant was handy around the house; at one point, the tenant fixed a broken kitchen sink himself.

Landlords also face another big task — finding a responsible tenant. Management companies and real estate agents can help with

that, but you will pay on average 10 percent of your monthly rent to a management company or a full one-month rental fee to a real

estate agent, which adds to the cost of renting your home.

"Being a landlord probably wasn't your main goal when you purchased your home, and it can be a hassle," Bergquist said.

Another risk to renting is giving up one of the best benefits of home ownership: the capital-gains tax exemption. If you live in your

house for two of the five years before you sell it, you'll pay no taxes on the first $250,000 in profits for a single person and $500,000 for

a married couple. But if you become a landlord for three years or longer, you'll owe capital gains taxes on all profits when you do

eventually sell your home.

Kathy Jones knows all about those disadvantages, but still listed her three-bedroom ranch-style home in Rocky Hill for rent this fall.

She gave herself only one month to sell the home before deciding to rent it instead.

"I priced it aggressively and hoped to get a quick sale, but that just doesn't happen in this market," Jones said. "My thinking is, in two

years the market will turn around and I can sell it then."

In the meantime, she's willing to put up with the hassles of renting.

"Yes, people don't maintain it the same way you would because it's not theirs, but if you can find the right tenant, it can work out well,"

she said. "It could go bad, but there are good people out there."

- January 2009 Blumenthal foreclosure

Blumenthal Bill Targets Foreclosure-Rescue Schemes
By KENNETH R. GOSSELIN
January 7, 2009

With foreclosures at record levels in Connecticut, the attorney general on Tuesday proposed legislation aimed at protecting consumers from foreclosure-rescue and other personal finance schemes that promise help for a fee, but don't deliver.

Attorney General Richard Blumenthal said his proposal would tighten existing regulations and require that any entity offering to help consumers facing foreclosure or mounting debt be a nonprofit counseling agency. The state regulates such agencies.

The legislation seeks to eliminate a loophole that allows disreputable businesses to take advantage of consumers by charging high fees or, in some cases, requiring them to give up ownership of their homes, Blumenthal said.

Blumenthal said hundreds of residents have been victimized by such schemes, which have grown in number with the rise in foreclosures and job losses. He said his office is investigating several cases and is compiling a list of perpetrators.
"They sink consumers like quicksand through financial schemes that doom families to deeper debt, even as they struggle," Blumenthal said.

In addition to requiring mortgage- and debt-assistance companies to be nonprofit, the proposed legislation would require the businesses to clearly spell out services in a contract, allow consumers to cancel within three days and would prohibit upfront fees.

Blumenthal was joined at a press conference Tuesday by key legislators and housing advocates.

"When people are desperate, they make these calls," said state Rep. Kenneth Green, D-Hartford and chairman of the legislature's housing committee. "They don't realize they get promised a lot of things, but they don't get the delivery of those services."

Green said the problem could get worse if the economy deteriorates further and more people lose their jobs and get behind on their mortgage or other monthly bill payments.

As of Sept. 30, the state had 18,600 home mortgages in foreclosure or 90 days past due, about 3.5 percent of all home loans, according to the Mortgage Bankers Association. That compared with 16,560, or 3.1 percent of the total, as of June 30.

The co-chairmen of the legislature's banks committee — state Sen. Bob Duff, D-Norwalk, and state Rep. Ryan Barry, D-Manchester — said Blumenthal's proposal would build on mortgage lending reforms and programs passed in the last session of the General Assembly.
 

- Jan 2009 wiping out debt

My Story of How I Wiped Out $24,000 in Credit Card Debt in 97 Days and How You can do it too” 

If you’re racked with debt and desperate to get out then this will be the most important blog message you read this year. Here’s why:

The first thing you should know about me is that I’m just a regular Joe. I’m 36 years old, married and just want what’s best for my family. Sure, we’ve always had some credit card debt. After all, who doesn’t right?

Anyways, not too long ago, I was unemployed and my wife Jody was a shuttle van driver and we found ourselves $18,000 in debt. I landed a good job fixing up houses at the tail end of 2006. Good times. So then in 2007 we spent a ton of cash buying stuff and fixing up our home. We just sort of figured our $18,000 in debt would eventually get paid off as we’d occasionally throw some money towards paying it off. Well, that never quite happened.

Then comes December of 2007 and we were $24,000 in credit card debt. We had no savings, except for some cash socked away for retirement. Then the rug was pulled out from under us when the real estate market collapsed. We went from living a comfortable life to feeling like we’re suffocating. My office, which usually did 15 jobs per month was only able to get about 2 per month.

Dark times were upon us. Collection letters started pouring in. At first I tried to be cool about it. No big deal, lots of people get these, right?

Anyways I figured I’d give myself 2 months to fix this. But I wasn’t able to fix it like I hoped. You’d be shocked by all the collection messages I got. They’d send me letters, call me on the phone, man, I almost developed an ulcer from it all!

Soon after, Jody and I started fighting more. Honestly I don’t like thinking about that time in my life. I guess the only funny thing was it seemed like they were using several different collection agencies to put the smackdown on us. Those guys were ticked! And guess what?

They started showing up at our door! Maybe I wussed out, I don’t know, but I couldn’t face them so I talked my wife into dealing with them.  I feel bad about that now because those collection agents were pretty nasty towards my wife. Then that was it - I hit rock bottom. I had enough. I was totally humiliated in front of Jody, my family and my friends. I thought to myself. I had to find a solution and quick.

One day while watching Fox News a commercial came on about how you can get cash for your gold. I thought, Why not try it?

Next, I dug around my house and found some jewelry that Judy never wore. She agreed to sell it to this company. It was quick, easy money. They were called: Dollars for Gold! LOL. Check out the first check I got from them. Cool huh!

Maybe you’ve heard of that crazy dude, Jim Cramer, the loud talking cable TV guy who talks about stocks. Now I’m no investor or anything like that but I like watching his show sometimes. Anyways he was talking about American debt and how bad it was for everyone. Good to know other people are in the same boat as us, hah, hah. Then he started talking about ways to get out of debt. You can bet this grabbed my attention.

He said we needed to know for sure how deep in debt we were and what our credit report looked like. So I grabbed a tall one and headed to the computer to do some research.  I found a cool Internet company called Consumer Direct. These guys pull credit reports from Experian, TransUnion and Equifax. When you sign up with them, you have to put in your credit card number so they can validate your ID. They do recommend you enroll in their monthly monitoring program, which is a good idea but you can cancel it anytime you want.

After that, following the advice Cramer gave, I searched for a couple of debt consulting services. The two I found were: Debt Experts and Easy-Debt-Aid. They were free. These guys give you a special game plan for getting out of debt. They also offer to pull your credit report, but I already did that with Go Free Credit. Being that I didn’t have much money to spend, I figured since Debt Experts and Sunshine Debt Solutions were both free, why not sign up? All I had to do was fill out their short form. Just 30 seconds to do it.

We then had our game plan for getting out of debt and we followed it religiously.

Now I’m not going to BS you and tell you it was super easy to get out of debt. But it sure as heck worked. The people at these two debt consultation companies showed us strategies for paying off our credit cards and held our hand the whole way. I don’t know what I would have done if I hadn’t discovered these companies. We all need a helping hand sometimes and these guys were it.

Today we’re almost out of debt, we’ve gone from $24,000 to now $2,000 and probably by the time you read this, it’ll be much less.

If we hadn’t decided to take action immediately to get out of debt, I’m pretty certain we would have gone $10,000 deeper into debt. No doubt about it. Until you get help from these companies, you’re just a fish on land.

In case you’re wondering, we didn’t have to live like misers either. Sure, when we first started this program, we had to cut most of our spending but soon after that, our monthly spending was nearly the same like it always was.

And let me tell you once you start seeing your debt shrink - it feels terrific! It takes the pressure off your relationships, you feel happier and you feel in control of your life.

Am I worried about getting into debt again? Heck no. Since we’ve used the abovementioned companies, we’re on the fast track to having more cash flow and building our savings and retirement. All it takes is following their debt reduction strategies and its not rocket science. Anyone can do this.

Ok, so here’s our step-by-step plan that you can use. Plus I’ll show you where to contact the people who helped us, but you really need to do this in the order listed here. (Just click the underlined links to contact these companies).

STEP 1. First things first, you want to get some quick cash so sell your old gold like we did with Dollars for Gold.  Or you can get a government grant. Main thing is, just stop using your credit cards, seriously. And put off big expenses and just buy the stuff you absolutely need. You can do this.

STEP 2. Find out how bad your debt and credit situation is. Don’t be like an Ostrich with its head in the sand. Check out Consumer Direct to do this.

STEP 3. Next, take advantage of the free debt reduction consultations offered by Debt Experts and Easy-Debt-Aid. They’re both a lifesaver and will get your life back under control. Be sure to get a free consultation from both services and then follow their advice. When you talk to them, remember to say you have more than $10,000 in debt no matter what. To sign up with them is free and it only takes a minute. And soon after you’ll have a winning game plan from them.

Yes, that’s our 3-step plan for getting out of debt. Real simple. My parting advice: Don’t waste another minute. Seriously, start right now. It only takes a few minutes to do this. Then after you see your debt begin to shrink would you do me the favor of posting a comment on my blog? It would mean a lot to me to hear about other people who were helped by our story and it would encourage others struggling with debt.  Thanks, your friend - Carmen