Balanced Living

September 2008

Mortgage Payments Sending You Reeling?
Here's What to Do …

The possibility of losing your home because you can’t make the mortgage payments can be terrifying. Perhaps you are one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years, and then had an adjustable rate thereafter. Or maybe you’re anticipating an adjustment, and want to know what your payments will be and whether you’ll be able to make them. Or you could be having trouble making ends meet because of an unrelated financial crisis.

Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.

Know Your Mortgage

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can’t tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.

Here are some examples of types of mortgages:

• Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter.
• ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.
• Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.

If you have a hybrid ARM or an ARM and the payments will increase — and you have trouble making the increased payments, find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you’re planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you’re planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.

If You Are Behind On Your Payments

If you are having trouble making your payments, contact your loan servicer to discuss your options as early as you can. Most loan servicers are willing to work with customers they believe are acting in good faith, and those who call them early on. The longer you wait to call, the fewer options you will have. After you’ve missed three or four payments and your loan is in default, most loan servicers won’t accept a partial payment of what you owe. They will start foreclosure unless you can come up with the money to cover all your missed payments, plus any late fees.

Avoiding Default and Foreclosure

If you have fallen behind on your payments, consider discussing the following foreclosure prevention options with your loan servicer:

Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you’ve missed only a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn’t going to help you if you’re in a home you can’t afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications can include lowering the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A loan modification may be necessary if you are facing a long-term reduction in your income.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you’ve reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to obtain credit, buy another home, get life insurance, or sometimes, even get a job. Still, it is a legal procedure that can offer a fresh start for people who can’t satisfy their debts.

If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

To learn more about Chapter 13, visit www.usdoj.gov/ust; it’s the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.

If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (www.fha.gov) or VA (www.homeloans.va.gov) to discuss your options.

For more information:
http://fhahelps.personaladvantage.com/logon?target=content?sub=10000363
www.fha.gov

Walk Your Way to Better Health

America on the Move Is in September

Making exercise a priority is the secret to making it happen. If you think about it, you may discover you don't have time not to engage in physical activity. A growing body of research has found that a regular program of moderate exercise -- such as walking -- may add years to your life. The Centers for Disease Control and Prevention (CDC) says that moderate exercise requires some exertion, but not so much that you can't carry on a conversation while doing it. A moderate pace of walking is 3 to 4.5 miles per hour (mph); vigorous walking is 5 mph or faster. A moderate walking pace uses 3.5 to 7 calories a min; vigorous walking uses 7 calories per minute.

Exercise can help you sleep better, improve your energy level, control your weight, cholesterol and blood pressure levels, reduce the risk for heart attack, stroke, type 2 diabetes, breast cancer, depression, colon cancer, and osteoporosis, and improve arthritis and back pain, to name a few benefits.

Before you start any new exercise program, however, you should check with your health care provider. This is especially true if you have a chronic health problem such as heart disease, diabetes, or obesity, or if you are older than 40 (for a man) or older than 50 (for a woman), and plan to exercise vigorously.

Decide on your fitness goal before you start. Are you exercising to improve your fitness or to lose weight? If weight loss is your goal, you may need to aim for a longer workout than if you want to improve your cardiovascular health.

The American Heart Association developed the following chart to show the approximate calories spent per hour by a 100-, 150- and 200- pound person doing a particular activity.

Set up a walking routine

Studies show several short walking sessions that total 60 minutes are as beneficial as one longer 60-minute session. If it's difficult for you to get your walk in all at one time, consider walking 20 minutes in the morning, 20 at lunch and 20 after work.

For example, park in the far reaches of a parking lot instead of searching for a spot by the door. A brisk, daily walk with a coworker at lunch could turn out to be the part of your workday both of you look forward to most.

Add more appeal

Try these offbeat ways to make fitness walking a breeze:

• Buy a pedometer at a sporting goods store. Aim for 10,000 steps throughout each day -- whether at work, home or the grocery store. An analog pedometer may cost as little as $7; a digital device, $20 to $30.
• Put a dollar in a jar each day you meet your walking goal. Spend the money on yourself on the last day of the month.
• Bring along music that will inspire you along the way. There are workout MP3s and CDs that include encouraging messages, tips, and posture checks throughout your workout. You can make a mix of the tunes that get you going to help make your workout more enjoyable.
• Stop by your local tourist office and pick up pamphlets listing historic walking tours, shopping malls, local universities, parks, and wildlife sanctuaries. You'll discover wonderful places to walk in your locality as you improve your health.
• Join a walking club; you'll meet other walkers and explore some scenic walks. The American Volkssport Association has a network of 350 clubs nationwide, with annual dues often less than $10. Visit www.ava.org.

Walk this way

The following walking techniques promote a safe and fit walking style:

• Wear comfortable, supportive walking shoes.
• Warm up for five minutes by walking at a slow, easy pace. At the end of a brisk walk, cool down for five minutes in the same way.
• Avoid overly long strides. Instead, use small, quick steps to prevent injury.
• Land on your heel with each step, roll your foot from heel to toes, then push off with your toes.
• Pull in your abdominal and buttocks muscles as you walk.
• Walk with your head up, chin level, chest up, and shoulders back.
• Drink plenty of water before, during, and after you walk.
• Check with your doctor before beginning any walking routine.

For more information:
www.americaonthemove.org
http://fhahelps.personaladvantage.com/logon?target=fitness

Why You Should Eat More Fruits and Vegetables

September is Fruits and Veggies – More Matters Month

Choices you make each day can affect your risk for cancer. The American Cancer Society says that if you do not smoke, choosing to eat a healthful diet and to be physically active are the most important things you can do to reduce your risk for many types of cancer.

Several studies have found that diets rich in fruits and vegetables help prevent cancer. "People with high fruit and vegetable intakes have about half the risk of cancer as people with low intakes," says Peter Greenwald, M.D., Dr. P.H., director of the National Cancer Institute's (NCI) Division of Cancer Prevention and Control in Washington, DC.

"Specifically, the evidence indicates that higher intakes of fruits and vegetables are associated with a decreased risk of developing esophagus, oral-cavity, stomach, colon, rectum, lung, and larynx cancers," Greenwald says. In response, the NCI recommends eating five or more servings of fruits, vegetables, and juices every day.

The NCI defines a serving as one medium fruit, 6 ounces of 100 percent fruit or vegetable juice, 1/2 cup cooked or raw vegetables or fruit, one cup of raw leafy vegetables, or 1/4 cup dried fruit. Even eating just one extra serving of fruits and vegetables each day can help you avoid a dietary deficit.

Upping your intake

• Try to eat at least five servings a day of fruits and vegetables, especially those with the most color, which is an indication of high nutrient content. These tips can help you increase your intake:
• Have a daily fruit snack.
• Tuck a banana, apple, orange, some raisins, or other dried fruit in your briefcase for a mid-afternoon snack.
• Use sliced fresh fruit as a topping for pancakes, waffles, and fresh yogurt.
• Substitute chopped vegetables for some of the meat in your recipes. For example: add carrots, celery, and green and red peppers to meatloaf, mushrooms and spinach to lasagna, and celery, zucchini, and yellow squash to spaghetti sauce.
• Drink a glass of 100 percent fruit juice with your meals.
• Top hot or cold cereal with sliced bananas, fresh berries, raisins, or other fruit.
• Top lettuce-leaf salads with generous amounts of tomato, cucumber, celery and mushroom slices, onions, beets, radishes, green peppers, broccoli, shredded carrots, bean sprouts, or fresh fruit.
• Add chopped green, yellow or red peppers, broccoli, celery, onions, and cherry tomatoes to rice and pasta salads.

Desserts with fresh fruit

• Serve fresh-fruit desserts--poached pears, baked apples, or fresh-fruit-topped angel food cake.
• Double the amount of vegetables called for in soups, stews, and casseroles.
• Once or twice a week, serve a vegetarian main course such as hearty vegetable soup, meatless chili made with tomatoes and beans, vegetarian burritos, or pasta topped
• with tomato, herb, and vegetable sauce.
• To keep your interest high, add one new fruit or vegetable to your diet every month. Some fruits you may not be eating: mangoes, papayas, dates, figs, apricots, pineapples, cranberries, and rhubarb. Vegetables that shouldn't be overlooked: winter, acorn, and butternut squash, snow peas, kale, bok choy, turnip, eggplant, endive, and collard and mustard greens.
• Use your imagination. Top baked potatoes with shredded carrots instead of shredded cheese; mix chopped grapes, apples, and raisins into chicken or tuna salad; add grated
• or pureed carrots, zucchini, pumpkin, bananas, or berries to muffins and breads.

For more information:
http://www.fruitsandveggiesmatter.gov/
http://fhahelps.personaladvantage.com/logon?target=dieting