President Bush signed a new bill today that will give tax relief to families facing foreclosures. The driving force behind this plan is a strategy designed to incentive lenders to refinance bad loans instead of simply "call" them. That is, those with subprime adjustable rate mortgages will be eligible for a refinancing at a lower rate rather than simply put into foreclosure. It's a good move that could help curb the problems we are seeing today with foreclosures, but many more near-prime and prime mortgages may still see problems.

From AHN:
President George Bush on Thursday signed a bill allowing families facing foreclosure from paying higher taxes, months after the U.S. housing market began its steep decline. The Mortgage Forgiveness Debt Relief Act of 2007 gives homeowners a 3-three-year window to refinance their mortgage while enjoying a tax break. The current tax code recognizes debt relief obtained from refinanced mortgages as taxable income. The new law, which was sponsored by Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, increases incentives for lenders and homeowners to refinance bad loans.

Consumers may finally receive a break after the European Union ordered MasterCard to drop its international fees for cross-border purchases or face steep fines amounting to 3.5% of global revenues daily. The move comes as the EU is attempting to make all transactions across its borders free from any fees or extra charges. While this is only one fee being dropped, it is definitely one of the more expensive fees for those living in Europe or traveling abroad.

From the WSJ:
Credit-card company MasterCard Inc. must drop the fees it charges stores for cross-border credit card purchases within six months or face massive daily fines, the European Commission ruled Wednesday. The charges are incompatible with European Union antitrust rules, the commission said. The fees charged on payments customers make abroad with MasterCard credit cards or Maestro debit cards inflate the cost of card acceptance for retailers, said Competition Commissioner Neelie Kroes.

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America's consumer debt problem may seem like a huge problem, but it's quickly becoming a worldwide problem. The UK reported not long ago that they were seeing record levels of insolvancy as credit card companies worldwide make a push to get consumers more and more into debt. Unfortunately, the problem is only likely to compound as lenders becoming increasingly tight with their lending standards. The best thing for consumers to do now is work to overcome their debt problems by seeking help to keep current on due debts and work to repay old debts.

From the Guardian:
Millions of Britons are trapped in a cycle of debt, using their credit cards to fund Christmas purchases before they have even repaid last year's spending, a survey claimed today. Around one in 10 consumers - the equivalent of 4.4 million people - admit they are still repaying debt they ran up last December ... At the same time, 9% of people said it took them five months to clear their festive credit card bill, according to financial website MoneyExpert.com ... More than a quarter of these people plan to borrow money from friends and family members, while one in five will take out an additional loan.

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Most people are aware of the problems with the mortgage markets, credit markets and consumer spending but there may now be more things to consider on the horizon. Business capital spending may start to decline now that credit is a lot tougher and revenues are taking a hit. Meanwhile, overseas growth appears to be slowing down and may not be great enough to offset the slowing domestic growth. These could very well be the key ingredients to a recession next year...

From Reuters:
"U.S. employers have yet to slash jobs in any great number and the mighty consumer hasn't forgotten Christmas, but Corporate America is retrenching in anticipation of a slowdown, and that may hasten the fall. While malls are packed with holiday shoppers, the import docks in California are quieter than usual as retailers trim inventory. U.S. airlines are flying with the fewest empty seats on record, yet many are cutting capacity. Some economists worry that it will be this scale-down in business investment that tips an already wobbly U.S. economy into a recession next year."

How often have you seen offers that guaranteed lower monthly credit card and loan payments? It’s a tough offer to refuse if you are deep in debt, especially since you know non-profit company isn’t trying to make a buck off of you… or are they?

Many con artists run debt relief organizations that do not deliver on their tall promises to reduce your debts by more than half. They use attractive advertising to draw customers into a program that can set them back hundreds of dollars without making any further progress to reduce their debts. These fraudulent providers are not really non-profit at all.

It is important that consumers carefully verify that any institution that they are dealing with is reputable. This can be done by checking their status with the Better Business Bureau or other industry organizations. Legitimate counselors will also sit down with you and conduct an initial free and objective assessment of your financial situation. It is important to shop around and make sure all the good ones are making the same recommendations.

Many credit card companies may also be willing to negotiate with you directly; however, this can be difficult at times. Debt settlement companies offer a better solution that can help you consolidate and reduce your debts for a low fee. These companies can typically reduce your debts by as much as 50% by working with your creditors. We recommend Knockout Debt that can be reached at 866-559-DEBT.

One of the best ways to have more money is to limit your spending, especially during this time of year when we are accustomed to spending so much. Here’s a simple process that you can use to limit your spending and increase your cash on hand:

1. Examine. Take out a calculator and figure out exactly how much you owe, except for your mortgage. Now, subtract the indulgences that you could get rid of without much trouble. For example, do you really need those chocolate chip cookies? Probably not. Also, resist the temptation to purchase these items during your next trip to the store – stick to your list!
   
   
2. Cut Back. Now, stop all unnecessary spending and focus on paying down the amount that you owe on loans and debt. Make it into a game: How quickly can you pay down your debts? This phase won’t last forever, but it’s one of the most important steps in the process.
   
   
3. Plan. Now that you have cut all of the unnecessary items from your shopping list, you can return to business as usual – except with a plan! Divide your cash into three piles: (1) short-term fun spending, (2) medium-term planned expenses for food, living and big purchases, and (3) long-term retirement funding so you won’t have to work forever.
   

Following these three easy steps can help you reduce the amount of money you owe and prevent problems in the future by establishing a spending plan to curb your consumption. Get started today!

Need debt settlement help? Call 866-559-DEBT (3328) today for a free consultation!

Credit reports and scores have an enormous impact on the interest rates lenders offer us, which is why it is important to make sure that your credit report is in line. Those looking to take out an auto loan or mortgage should study their credit reports early in the process in order to allow time for possible corrections to be made before a lender sees it.

So, how can you check your credit report? Well, there are three main credit reporting agencies: Equifax, Experian, and TransUnion. All three of these organizations offer fee-based services online that allow you to check your credit report whenever you wish. Other websites like MyFICO.com offer a cheaper service that lets you access all three of your credit reports to check for errors.

There are some cases in which you are eligible for a free credit report. First, if you have been turned down for credit or employment due to your credit report during the last 60 days, you can get yours for free. Second, if you believe your credit report contains fraudulent information, you have the right to check it for free. Third, if you are on public assistance, you can get it for free. And finally, if you are unemployed and plan on filing for unemployment benefits within the next 60 days, then you can also access it for free.

Some of the common mistakes to look for on your credit reports include the use of your maiden name, inaccurate or old addresses, past due accounts that are paid off in full, and other similar issues. Obviously, clearing up these issues before they are viewed by a lender can substantially enhance the odds of a lower interest rate for your next loan. This is why it is important to always check up on your credit reports!

Need debt settlement help? Call 866-559-DEBT (3328) today for a free consultation!

Credit cards are very useful tools that many of us have become reliant on over the years, but having too many of them can make your life a lot more complicated than it has to be. One way to simplify your financial life may be to cancel your old credit cards. Here are some tips to keep in mind:

• Only cancel credit cards with empty lines of credit as you’ll want to keep the account open until you pay it off.
• Don’t let the credit card company know that you are thinking about leaving until you have paid off your balance, else they might increase interest rates if you try to cancel.
• Don’t cancel credit cards before taking out a loan, as it may hurt your credit rating in the short-term.
  

Canceling your credit card is easy, simply contact your credit card company and request to cancel your account. Some companies even make this an automated process that can be done by pressing a button on the phone! Sometimes, you will be forwarded to a service rep will try to convince you to keep your account - particularly if you are a heavy spender. Often times, they will offer discounts or special rates, but it is important to make sure that they are not temporary discounts if you plan on keeping your account active.

Stock markets rallied today after the president announced a new deal under which mortgage lenders would ease the pain experienced by subprime borrowers by lowering and freezing rates. The move is designed as a last ditch effort to avoid another run of foreclosures that could cripple the economy even further by putting increased pressure on a market that is already well-classified as a seller’s market. Unfortunately, the problem isn’t quite contained yet as new economic reports surfaced indicating that the subprime mess may be a side-effect rather than the reason for the economic decline we’ve seen.

So, what’s the major issue? Bad debt. Banks that traditionally made money through the difference in lending and savings have recently made money by packaging securities and selling them off to the secondary markets. This shifted the focus to profitable loan origination to simply as much loan origination as possible regardless of the rate. To that end, we’ve seen significantly lower interest rates as banks worked to give access to credit to everyone regardless of their income or existing debts.

The hedges worked out in a computer program as investors thought they could reduce their risk in this market by simply buying derivatives in another. Unfortunately, investors tend to constantly forget about one thing: liquidity. That is, there is no market if nobody is willing to buy and sell the securities. We saw this in the credit market after people started realizing that a lot of these loans were about to default. While they are hedged properly according to a model, there was simply nobody on the other end to take the trade regardless of intrinsic value.

The underlying reasoning, of course, is the simple fact that the median household income has not budged since 1999 while the amount of debt taken on has only increased exponentially. The predictable outcome is a lot of people that are unable to keep current on their bills. And that is why we are in the subprime mess as we see it now.

Need debt settlement help? Call 866-559-DEBT (3328) today for a free consultation!