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Topic : 09/15 Money Matters: Surviving the Crisis

Number of Replies: 184
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Created on : Friday, September 12, 2008, 01:15:18 pm
Author : DrPhilBoard1
Are you in debt? During these tough economic times with foreclosures on the rise and gas prices through the roof, more and more families are panicking about their financial stability, and some are only one paycheck away from being on the street. Would you and your family know what to do to survive? Just two years ago, Brandy and Greg say they were living the American Dream: a big house, a fast boat, plenty of spending money and four beautiful children. That all changed when their six-figure income was reduced to nothing. On the brink of losing everything, how did this family end up nearly a quarter of a million dollars in debt, and could it happen to you? Money expert Loral Langemeier shares a 90-day plan to help get their finances back on track. Then, Milton and Patricia were awarded the largest home ever given away on Extreme Makeover Home Edition. The headlines now report that the mini mansion is near foreclosure because of the couple's frivolous spending. They come to Dr. Phil to set the record straight and clean up their financial mess. And, Dr. Phil reveals the five biggest money mistakes people make. Could you be making them right now? You don't want to miss these tips! Join the discussion.

Find out what happened on the show.

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September 15, 2008, 1:27 pm CDT

Really Tough Times

The first family who played at being rich and now go all weepy on Dr Phil made me laugh out loud. A few items sold off on EBAY or at a yard sale would be a start!!!!! What about that boat?? Good Grief!!!

Last October my ex died suddenly in the home we both still owned, but where he resided. He was 100% disabled and I felt it was best for him to stay in the big house where he was most comfortable. When he died I assumed his mortgage, and his home equity loan, his gas and electric bill, for 8 months as I tried to sell the house. Meanwhile, I had my OWN mortgage, gas and electric and a small home equity loan of my own. I am a school teacher so you know I don't make big bucks, and my husband works as an accountant for small firms, and his salary is less than mine. The housing market is glacial here on the East Coast, so it was very hard--two mortgages, two home equity loans, two gas/electric bills for 8 months. We finally decided to sell our town home and move into the big house, and thankfully we did sell in an about a week.

Everything now is settled, but the point is, we paid everything every month. We do not have car payments, we paid our credit cards every month, we paid off both home equity loans with the sale of the town home.

My husband and I are careful money managers and we can sleep at night. Ok, we do not have a big flat screen TV, or take exotic vacations but we have cable and a fine television, and we do cruise every other year.

Oh, and I put my daughter through college without any loans or assistance. (Good long term planning for that!)

So, I cannot really whip up much sympathy for the weeping poseurs.

 

 

 
September 15, 2008, 1:29 pm CDT

Mortgage Brokers

Had a biiiig hand in getting us in this financial mess. They made tens of thousands of dollars on bogus loans to people who could clearly not afford them.

I've met alot of these guys - they are not MBA's - most of them never graduated from college (high school? -who knows). I highly doubt this family will EVER make 250K a year again. They should accept that fact - let the bank take the house in foreclosure and find housing more suitable to their income.

 
September 15, 2008, 1:35 pm CDT

$$$$$

Quote From: sappleg8

Can't afford gifts for the kids but can afford frosting on both heads???????????????????????????

I was thinking the exact same thing!!!  Enough is enough.

 
September 15, 2008, 1:57 pm CDT

09/15 Money Matters: Surviving the Crisis

What was the name of the head hunter in Dallas Dr. Phil said was the best. I have a son there thought that might help his money plan....
 
September 15, 2008, 2:09 pm CDT

09/15 Money Matters: Surviving the Crisis

I've been through this several times and in this mess now.  I'm unemployed, husbands 100% disabled. These people need to familiarize themselves with Craigs List. Unload those assets.  Both have expensive looking hair do's???

Dr. Phil, you always mention your 165.00 car.  We're the same age.  those days are gone.  You also mention "Get rid of those cars".  How do you propose to do that and keep your credit?

Susan

 

 

 
September 15, 2008, 2:14 pm CDT

09/15 Money Matters: Surviving the Crisis

Quote From: longkaren

We are in a situation similar to the first guests on today's show.  The real questions I had were not answered, just kind of glossed over.  Here's my question: when people are in a situation where they are in a house they can no longer afford, bill collectors are calling, and everything seems to be falling apart, the obvious answer is to get out of that house and rent, buy a trailer, or do whatever you need to do.  We are very willing to do this.   The expert on today's show mentioned the problem, but offered no real solution.  When your credit is way down in the pits, you will not qualify to buy anything smaller or even rent.  When getting a co-signer is just not an option (not everyone is in their 20's or 30's with parents able to help), are there any solutions to this problem?  It's kind of like you stay in the house you can't afford, because at least you have a roof over your head.  It would be great if on a future show Dr. Phil could address this, and give some real steps people could take to overcome this problem.

If you can no longer afford your house with your current income, you have some options. If your income is down only temporarily, you can pursue a loan workout or reinstatement with your lender.

 

If your income is down permanently, or is not expected to go back up, you can contact your lender to find out if a loan modification can bring your payments down to something you can actually pay. They will ask you to submit some sort of hardship application and documentation - i.e. a hardship letter, proof of income, recent tax returns, etc.

 

When a workout / loan modification won't work for you, or if the lender will not do it, you can look at selling the property. Many people now owe more than the home is worth. In this case, you would be looking at a short sale. In a short sale, the bank has to agree to accept less than what is owed on the house. The benefit here is that both the lender and the homeowner avoid a costly foreclosure.

 

Another option is Deed-In-Lieu of Foreclosure. In this scenario you simply give the property back to the lender, avoiding a foreclosure. Most banks will want you to have tried or applied for a workout / loan modification, and/or a short sale before resorting to a Deed-In-Lieu.

 

To recap, if you simply can not afford the home anymore, and a loan modification does not make it affordable enough for you, you really need to accept the fact that you will likely need to move on. Even if you have a low FICO score, you CAN get a rental.

 

Having gone through a foreclosure ourselves, our credit was naturally very bad. We were able to find multiple places to rent - you just have to work a little harder and contact more properties before you find one that will take you. You might find that offering a higher security deposit will help the landlord overcome any reservations they have about your credit score. Also - many people are going through this now, so they are seeing more and more applicants with credit problems. A year or two ago, it would be harder to get a rental than it is now with poor credit.

 

Dr. Phil makes a mention of making a decisions without letting your emotions getting in the way. You may be attached to your house or the memories you had there - but you need to think about what is best for you financially and in the long term. The sooner you can get this situation behind you, the sooner you can begin to move forward  again.

 

I wish you the best,

 

Mike Bertrand

Moving Forward

 

 

 

 

 

 
September 15, 2008, 2:16 pm CDT

always broke

my husband makes 2500 a mon our bills are only 800 a mon. but for some reason on pay day we end up spending  every bit of it, and we never have anything to show for it. we dont own anything and we live pay check to paycheck how do i fix this. and dont say save money we have tryed that it doesnt work. please anyone with any advice. thanks
 
September 15, 2008, 2:17 pm CDT

Neither deserve what they have and need to live within their means.

Quote From: rosesintherain

Had a biiiig hand in getting us in this financial mess. They made tens of thousands of dollars on bogus loans to people who could clearly not afford them.

I've met alot of these guys - they are not MBA's - most of them never graduated from college (high school? -who knows). I highly doubt this family will EVER make 250K a year again. They should accept that fact - let the bank take the house in foreclosure and find housing more suitable to their income.

I am one of those unemployed from the mortgage meltdown and saw many people who should have never been approved for loans.  Tthis couple is exactly why the meltdown happened.   The specialist (Loral) giving advise for a new loan knowing well they cannot afford it now and should have had the knowledge they could not afford it when they were first given the loan or loans with refinancing.  Shame shame on her and you for having someone giving more bogus information to people who just want to have it all and have had people like that give it to them.   The second couple should have never been given the responsibility of such a large home and they need to get rid of it now and not beg for more gifts.  I have always thought that Extreme Makeover Show was exactly what you have protrayed today. 
 
September 15, 2008, 2:17 pm CDT

What an appropriate day for this show to air

This show should have been entitled "Surviving the Financial Crises caused by one's own Greed, Stupidity and Selfishness". How appropriate that this showed aired today when the stock market fell 500.  Those of us who saved and planned for our financial future have now been forced to worry about what tomorrow will bring because others have chosen to live "in the moment" with no thought about tomorrow. 

 

Surprise!!!  The moment is over, and reality is now setting in.  I was particularly incensed by the young couple, who although were college educated and supposedly intelligent, weren't smart enough to have the wife work and the husband get another or second job.  Am I supposed to feel sorry for them? You realize that all people like them want sympathy and to be bailed out by those of us who obviously had more sense.

 

Of course there are uncontrollable situations, extenuating circumstances and hardships that occur due to no one's fault, but to have these families on the show boo-hooing about their financial difficulties caused by nothing but their own stupidity is absurd and ludicrous.  My sympathy and pity extends only to those who have lived modestly within their means and now face uncertain futures because of the idiocy of others.

 

 

 

 

 
September 15, 2008, 2:18 pm CDT

09/15 Money Matters: Surviving the Crisis

Quote From: thompson91

I agree with  you for the most part. We do give alot, not just with our finances but also with our time. We do not always give the "tithe" ten percent but we give with a cheerful heart which I think is more important. If we give the tithe & do it angrily and with resentment I think that is worse than giving cheerfully.

Right now the past year has been the worst financially for us than any other time. We thought we were in binds before but nothing like this. We are currently seeking help and learning alot about how we should have thought about finances and dealt with them.  We have had so many opportunities to get out of debt and they just passed us by. Now we see our mistakes and are hoping there is still hope for us. We believe there is and are even taking Crown Ministries financial class. Even though this is Christian based it has a lot of practical info as well. Living paycheck to paycheck is tiring. We are tired of that.

From the show today I think Dr. Phil could've picked Suze Orman or some other financial expert. The person he did choose I just have never heard of & may have to research her more. Hearing both stories though, makes me feel like we can get out debt since ours is not as bad. Bad for us and not to make there any smaller than it is ours just feels obtainable now.  Hopefully someday I can post back and say we are DEBT FREE!!!

Yes Suzy would have not given them any slack.........
 
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