Fraud Alert - A Few Things to Watch Out For When Refinancing your Mortgage

With the recent economic meltdown, millions of people become victims of financial instability across the globe. People have been literally forced into debts and their financial lives have got stuck in the debt mire. Mortgage refinancing can save you from this danger. However, people who are carrying outstanding debt balance, their thought process often get paralyzed and desperation overrides good judgment. As a result, mortgage refinancing scams often take advantage of their desperate situation and put them into further debts. You must have heard the question "mortgage how much can I borrow", well, it is the most crucial question in the current scenario and you should be ready with the answer of this question in order to prevent yourself from mortgage refinancing scams. As, most mortgage refinancing scams are linked with home equity if you don’t pay enough attention to the refinancing procedure of mortgage you might run the risk of loosing your home in future. Read on to know about the most common mortgage refinancing scams and stay away from them in future.

Loan Application

• Mortgage refinancing scammers usually target consumers who have low incomes or bad credit rating or who rushes into signing the mortgage deal without being aware of its consequences. The most common mortgage refinancing scam comes through the application form you send in to a mortgage company. Sometimes, you are encouraged by the refinancing company to write down higher incomes than what you actually make, in order to get the loan amount sanctioned. Such unethical practice can lead you to loose your home because you won’t able to afford the high monthly charges on a month to month basis. As you have declared a higher income amount, you might have to pay different loan amount and rates based on what you declared. Remember, if you put on paper something that you do not really have, it is you who will end up paying for it as the application form does not count. 

Balloon Payment

• Another notorious mortgage refinancing scam is associated with the balloon payment. These Loans are used when an individual is no longer able to pay a mortgage. When you face a mortgage foreclosure you no longer think prudently and a scam lender take advantage of this to make his way to profits. He pretend to be compassionate individual offering mortgage refinancing and lower monthly payments to save you from foreclosure but the actual story is quite different. All you repay each month is the interest fee only and the principal amount is in store which you remain obligated to pay at the end of the loan term. It is referred to as a balloon payment and such refinancing scam is pretty hard to spot. If you fail to pay this amount within a stipulated period of time, you end up losing your home.

Many individuals are there who have been hit by mortgage refinancing scams. Stay alert, go through the mortgage deal thoroughly before signing it and evade falling into such scam traps in future.

How Much Do I Tip - 10 Ways To Tip Correctly

Image by juliejordanscott via FlickrI remember when I was just a young man my first job was delivering the daily paper that was my first exposure to tipping. Besides delivering the paper I had to go door to door collecting the money for the subscriptions. I met a lot of fine people and along the way I got myself some nice tips. 


Being on the receiving end of tips I never forgot how appreciative I felt when I received one. It made me appreciate the whole tipping process. If you ever go to dinner with someone who has work as a server in a restaurant, they are the first to speak up if they think you are under tipping.

Those days of my paper route are long gone but I never give it a second thought to include a nice tip when I am treated well by a hair stylist, server, or someone that you deal with on a regular basis. Remember when you tip, put yourself in the place of person you are tipping because it will give you a better perspective on the process.

You can get as many opinions on how much to tip as there are people. So I wanted to see if there were any guides to help in deciding how much is the proper amount to tip in different circumstances. At couponsherpa.com and itipping.com there are some great lists to get you started.

Here are a few tipping suggestions to get you going:

1. Take-Out Food: 10 percent when you pay. Tip based on total cost if you use coupons.

2. Chain Coffee Shops: 25 cents tossed in the tip jar.

3. Hair Stylist: 15 to 20 percent.

4. Taxi: 10 to 15 percent is standard, 20 percent if the driver helps you with heavy bags.

5. Grocery Baggers: $1 to $3, depending on the number of bags loaded into your car. (What if you bag your own groceries?)

6. Tattoo Artists: 10 to 20 percent, depending on complexity.

7. Movers: $10 to $20 per mover.

8. Dog Groomers: $10 per pet.

9. Hotel Housekeeper: $2 to $5 per night.

10. Gas attendant: No tip.

Looking through this short list and the more complete list at couponsherpa.com I realize that I have been over tipping in some categories and under tipping in others.

Tipping in our society is a pleasant way to show appreciation to someone who has served you well and maybe made you happy. To others it is the bane of our culture.

What's The Greek Debt Crisis and A Failing Business Have In Common?

Image by ClareMarie via FlickrThe owner of a small local business goes to friends and family and asks for a loan to see his business through some hard times. Within one year he burns through the cash and runs the business into the ground. He goes back to the friends and family and asks for another loan. What should they do cut him off and let the business fail or lend him more money?

The Greek Debt crisis is a lot like our businessman. The EU's single monetary policy rules required them to help it's member states. When Greece came into the European Union in 2001, it wasn't doing anything different than it's doing now. Only difference the economy was coming off a 10 year boom and money flowed freely. When money flows freely misjudgment and bad decisions are covered over.

Last Year

Fast forward to 2010, the IMF and EU loaned Athens 110 billion euros. Greece burned through it. One year later, the country is still facing ruin and still begging for cash. For the EU's central powers, Germany and France, there's no good way out of this. Again I ask the question, as in the businessman's predicament. What should the EU do with Greece let it fail or lend more money?

What is Greece doing wrong? Answer: Like the businessman no foundational change has occurred in thinking and planning. The borrowed money was just to fill the financial gas tank to get the the same broken down car down the road a little further. The money was wasted by the businessman and Greece.

If you want to help someone who is bad with money giving them a loan without a plan for them to change direction in behavior and thinking is doomed for failure. The Greek government has not done enough to implement austerity changes to its basic government planning. Like the Acropolis, Greece's economy is turning to rubble.

Bailout Time, Again!

Most likely, Greece will get another loan or restructuring of it's debts. Only this time, the other European governments will not take no for an answer when demands are made for deep cuts in the government's budget and fiscal policy. The citizens of the European country's who are going to help Greece, will not stand for their government to help a bad risk like Greece. When Greece gets it's new loan and then they default again it could trigger a bank crisis worse than Lehman.

Like Greece and the businessman, the United States government is also going down the road of misjudgment and bad decisions. They are out of control with the insane national debt and yearly deficits. In Washington, it's business as usual. The economy is crippled by this debt and until it is turned around we will continue to see this painful unemployment. It's time to cut Greece, the businessman, and the United States off till they realize our financial problems are symptoms of a greater problem.

Check Out Your Neighbor's Open House, Your Not Nosey, Your Smart

An open house attracts many people who come for different reasons. They may be buyers looking in your neighborhood, real estate brokers looking to list your home, or even the guy down the block who is curious. In my neighborhood if there is an open house you are sure to see me there. You may call me nosy, but I believe that taking a look provides me with a lot of good information if someday I decide to sell my own home.

The first thing I look for in a neighbors home is what home improvements or upgrades they have made. This information can be help you decide what home improvements you should maybe do first. One improvement may be your roof, if your neighbors mostly have all new roofs and yours is showing it's age, maybe that is one of the first things you change. When selling your home, a new roof verse an old roof may make all the difference in which house gets sold first. Seeing the upgrades your neighbors have made will keep you from overdoing it on your own upgrades. You don't want to over build or over upgrade in your neighborhood. Also seeing other homes will also give you ideas on things you never thought of to help improve your own home.

If you are planning to move in the near future, seeing other homes for sale will give you close view of your competition. You are competing for buyers when your neighbors house is also for sale. You will see what their homes appeal is and you can compare their home value with your own home. Looking at other home improvements can also let you know what features to advertise in your own home when you are ready to put your home for sale. Checking out a open house will give you ideas how to make your home stand out above the competition.

At these open house Realtors and real estate agents will be present. You will be able to ask questions and pick their brains and maybe learn a thing or two. See if the Realtor is actively marketing the home, being active in engaging prospective buyers. Some Realtors use your open house to market other homes they have for sale and not yours. This will help you weed out the bad ones and zero in on the good ones.

You may feel embarrassed at going to a neighbors open house, don't feel bad. The more people that see an open house is good for the seller, because it helps the word get out and helps sell the home. If the sellers are there they may appreciate some honest feedback about the house. So it's a good thing for you and the seller that you are there.

Next time there is an open house on your street be sure sure to stop by. You are going to learn something that will help you, when it's time to sell your house.

What Economic Slowdown? $43.5 Million Dollars Worth Of Rubble

Many people are still deeply hurting, from our current economic situation, yours truly included. Income is down and expenses are rising. But not all of us are suffering. There are a few people doing pretty well.

With real estate prices at an all time low it's time to do some buying. Thats what one hedge fund billionaire David Tepper did. He bought a little fixer upper in Sagaponack, Long Island. He paid $43.5 million dollars for the 6,000 square foot ocean front estate on 6.5 sandy acres.

What's the first thing you do? Well, if you're hedge fund billionaire David Tepper, you tear the thing down -- along with the guesthouse, swimming pool and tennis court -- to build an even bigger mansion.

According to Southampton Patch, Tepper bought the home last year from ex-wife of former New Jersey governor Jon Corzine, in the area's most expensive transaction of 2010. In April, he got a permit for the demolition, and yesterday, the site was finally cleared.

The new house will be about twice the size, with ocean views from every room, "a sunken tennis court, three-car garage, a widow's walk, second-floor decks including one with a Jacuzzi, and a covered porch," reports Hamptons Curbed, quoting the minutes from a recent town board meeting at which the construction was reviewed.

Is Cosigning A Car Loan Really So Bad?

Image by roger4336 via FlickrWe all know that cosigning a loan is just asking for trouble. Your taking a big risk that the person you are cosigning for will leave you holding the bag. When the bank doesn't approve an individual for a loan the bank is saying plainly that they believe the person is not financially or personally able to pay it back. Why can't people who are tempted to cosign a loan, for a freind or relative, be as calculating as that?

I have written before about my daughters car problems and need for replacing her car. The car has 210,000 miles on it and it's time. Yet the car continues to live on and won't die. She and her boyfriend have purchased a 2006 Chevy Cobalt. It's in great shape and has low mileage. It was a really great choice.

Then why am I bringing all this up? Well, they have bad credit, when they financed it they got a very high interest rate. It's 18% interest. The payments are high and a lot of money is going to interest. I want to help.

I feel if I refinance the car as a cosigner I could get their rate down to 5%. It would be a big help in getting the payment way down. But then that would go against the no cosigning rule.

If I did do it, would there be a chance they wouldn't pay it. Yes, there always is a they could lose their income and be unable to pay and also by their track record not pay their debts. I would then be on the hook for the note. Is it worth it to take the chance? Would it destroy the relationship?

What are the odds they would default. According to the FTC, depending on the type of the loan, as many as three out of four primary borrowers default on their obligations, leaving the cosigner to pay. This is, after all, why they need a cosigner: they're not good credit risks, either because they have too much debt already, or because they don't pay their bills on time.

This is their first real excursion into the world of credit for almost 10 years. They are learning first hand the result of messing up your credit. Sure the downside of bad credit is having the worst possible interest rates when borrowing money. But this is a great lesson and it will leave a bad taste in the mouth for many years to come. It's something they will never forget and hopefully never repeat. My intervention may circumvent this life lesson and postpone learning a hard truth.

You're not really helping someone if you assist them to take on a large car loan when they have had historical trouble paying their bills, or to refinance their debt without attacking the spending that brought on the debt in the first place. "Helping" people to avoid dealing with their problems isn't much help at all. It feels terrible to say no, and the person will probably be hurt when you do. It may sour the relationship. But keep in mind that however bad it feels, and however much the relationship suffers, this is nothing compared to the bad feelings and relationship problems that you will encounter if you become their chief creditor.