Finance Roll

So many of you are facing the reality of being late on your mortgage payment and how it has affected your credit scores. I personally know of folks that had pristine (700) beacon scores, but when there adjustable rate mortgage increased, they could not afford the increased payment.

Being good people, they struggled and went without. I have a couple that earns over $6,000 a month. And, yet at the end of the month, they don't have enough extra money to even go to the movies. They don't live beyond their means. Granted, they were the same people, like so many others that re-financed their homes when the value of the home increased. WOW, they were real estate geniuses.

Yep, they went out and bought new toys for themselves and paid down their credit cards and even put a couple of bucks under the mattress for a rainy day. But, those were the good old days. When, that house payment increased by $750.00 a month, pretty soon that money under the mattress was used up to "keep up".

Once the money that they had saved was gone, they started to "scrimp and save" on other items. Soon, they had to be late on credit card payments because they were living from "paycheck to paycheck" just like many poor folks had been living for so many years. Welcome to the world or reality. With those late credit card payments, the "vultures from Wall St stared circling". You know the "drum roll". If one credit card payment is late, the other credit card companies pick up the scent and when you're normal credit card interest was at 7% it now zooms up to 32% on ALL of your credit cards.

So, think about that for a minute. Let's say that you had credit card debt of $25,000 which is not uncommon. Your ability to stay even was predicated on the lower interest rate. Your interest payments alone were $145.84 a month. So, as long as you were making just the minimum payment it wasn't too bad. But, look now once you became late on ONE credit card. The monthly interest payment now shot up to $666.67!!! That, Charley is an increase in monthly minimums of $520.83.

If a stranger came to your door once a month and held his hand out for you to give him $520.83 cents for NOTHING, would you do it? HELL NO. But, the Wall St. goons have figured out how to get that extra dough from you without a gun or even showing up. Yep, their computer geeks kept spying on your financial activity with other credit card companies and once you were late, ZINGO, they put the ZAPPERS to you.

So, let's play this out. You are now in the high interest bracket on your short term debt. What a financial mortal wound for a good family just trying to stay afloat. You might have been one of those couples that couldn't understand why people cannot pay their bills. I'll bet you even said "that won't happen to us". We have good jobs and we have always had pristine credit. Now, you have to ride the commuter of reality and face facts. You are now one of those families that you thought you would never become. The shame of having to talk about it much less have your relatives and friends find out about it. How could you drive that "beamer" to work and know that you cannot pay your bills?

Here is where the "grim reaper" of the credit world lowers the boom. You cannot make your mortgage payments and now you have a couple of late payments on your credit report. Your scores are in the tank. Now, foreclosure hits you and all of a sudden, you are in self denial.

Lets get back to the reason for this article. IF, you are foreclosed on and you DON"T defend your foreclosure, you are really mortally wounded credit wise. BUT, if you do defend your foreclosure and the lender is told by the courts to come up with the original note and they cannot, the case gets dismissed. Now you have a legal paper from the court that says, "the plaintiff (the lender) is NOT THE OWNER OF THE NOTE, therefore they have no interest in the note.

This is where it gets tricky. If, they had not interest in the note, then how can they report any late payments to the credit bureaus? Think about it for a minute. If, they were allowed to report your payment history and they didn't have any interest in the obligation, it would be like allowing a complete stranger to post something bad about you simply because they wanted to.

No one even thought about this angle. Maybe somewhere there is a clever attorney that did, but so far, I haven't found anyone. So, now you see the difference between defending yourself or just giving up.

Regis Sauger