Comments on: Reader Mailbag: Distractions

By: John S

John S — Mon, 14 Jun 2010 15:49:30 +0000

@Toby #47
You should educate yourself about what exactly a short sale is, and how it works, before jumping on a morally critical bandwagon. The bank has to *agree* to accept the short sale in order for it to take place. If the bank agrees to alter your obligation, then they are doing it because it is in the bank’s best interest. Therefore, there is nothing morally wrong with it.

It isn’t the same as walking away from a mortgage. It isn’t something you do *to* a bank. It is something you and the bank do *together*, to salvage what is a bad situation for both of you. (They don’t want to be stuck with your sunken collateral either. In many cases, they’d much rather have the cash from your sale.)

By: John S

John S — Mon, 14 Jun 2010 15:43:13 +0000

@Nate -
I have a friend who was in your shoes – underwater on his mortgage and forced to take a job in another state. He lined up a buyer who was willing to pay current market value for the home, and he asked the bank to agree to this short sale, but the bank refused to entertain this option, because he was current on his mortgage payments.

So, he stopped paying his mortgage.

Several months later, another buyer entered the picture and made a market value offer. This time the bank was willing to accept a short sale, but not at market value. The bank countered at $10,000 more than market value. The buyer walked.

I guess what I’m saying is, the lesson here is, No, the bank will probably not be willing to work with you on a short sale.

I’m not saying you shouldn’t take the job, but you should probably look into renting out your house and hire a property manager to keep it full of tenants. And keep paying the mortgage. That’s probably a safer bet than hoping for a short sale.

By: Toby

Toby — Mon, 14 Jun 2010 05:32:12 +0000

Selling a house via a short sale is defaulting on a debt obligation. When you sign your name to a mortgage document you’re making legal agreement to repay the lender. Inability to repay due to changed circumstance may be unavoidable but wilfully failing to meet a legal obligation is a moral as well as financial failure.

By: Victoria

Victoria — Sun, 13 Jun 2010 20:17:19 +0000

In response to Michele. I view “emergencies” and “living expenses” as two different things and I keep the money separate. An emergency to me is when the furnace goes out and I have to replace it. It’s just not something I expected, but it’s something I’ve got to have. I don’t think a job loss should be considered an emergency. It’s a normal part of life, although unfortunate, and as unexpected as the furnace going out, true; but I think labeling it an emergency is just adding negativity and stress to an already upsetting situation. I think keeping one to two years worth of what it costs you to live every month is good for a living expenses fund. Suze Orman recommends 8 months.

And interesting to know about manual underwriting in response to Trent. It reminds me of my Mom who has always paid for everything in full, including her homes. She went to get a cell phone and since she didn’t have credit (back before prepaids), she couldn’t get it. Interestingly though, she took it as a sign of something that was totally unnecessary because her attitude is you should never need credit for anything you really need in this life. And I’d say, I agree with her. Earn it and then buy it.

By: Georgia

Georgia — Sun, 13 Jun 2010 18:56:33 +0000

Allen – I did not start my 503b until I was 49-50 and I was deep in cc debt. I knew I had to start now or never. I set it up with more than enough to get the state match. About the 3rd year, we were still deep in debt, but we were managing to make our payments. So, I started adding my raises each year. That could be stopped if I needed it, but I never did. (In fact, by year 6 or 7, I was told I could put no more in as I was already saving the max – 25% of my gross.) By the time I retired, we had less than $100k in the retirement account, were in no debt, owned our own home and each had a small retirement from our jobs and our Social Security.

I have been retired for almost 5 years and I have withdrawn over $15k, but by Dec., my account will only be down $1500 from the time I started. See -the power of compound interest.

Our retirements and SS were sufficient for us, so we took money out of 503b to upgrade our home. It is now so user friendly that my average utility bills last year averaged $126 a month. And that is for all but cable, phone, & internet.

When my husband died, I lost his SS (mine was the larger), but I kept his retirement. I try to save it most months, as I know things are going up rapidly. We were careful, took a smaller retirement each so that the surviving spouse got 100%. My retirement also went back up to what it would have been (about $40 a month.)

I am living very well and am planning to save as much as I can. God has blessed my mightily. So, NEVER go with NO savings. Some is better than none. When I worked in a local Savings & Loan, I was told by many people that saving was useless because things would be so high. I said if you had $50 in savings and bread was $50 a loaf, you could live for one week more.

By: triLcat

triLcat — Sat, 12 Jun 2010 21:04:12 +0000

I have a baby bjorn and a moby-type wrap. the moby is an annoyance to tie, but way way way more comfy for baby and mom. the bjorn is just not comfortable once the child goes over 15 lbs or so. (and my kids tended to get that heavy in a hurry.)

By: Kiesa

Kiesa — Sat, 12 Jun 2010 13:53:46 +0000

Yet another comment on baby carriers :) For my one child, I’ve used 2 Baby Bjorns and 1 Beco Carrier. I started out with a very basic Bjorn style that a friend gave me. It was horrible because it didn’t have enough support. I then bought a “sports” style of the Baby Bjorn which was much better and worked reasonably well for around 6 months. I picked it because my area didn’t carrier any other types of carriers and I wanted to try it in person. After 6 months, he was big enough that it was uncomfortable for me (though my husband was fine). As an aside, I personally don’t worry about the “crotch” style of the Baby Bjorn. My baby always seemed perfectly comfortable, it was me that wasn’t. My last baby carrier which I’ve now used for about 8 months was the Beco, similar to the Ergo, which I adore. I’m not so much into attachment parenting but in order to get anything done around the house, I often have to put my 14-month toddler on my back. The Beco is designed with more support than the Bjorn styles I’ve seen so it works better for a larger kid. Unfortunately, the Beco carrier is significantly more expensive than the Bjorns. For a nice comparison between the Ergo and the Beco, see the Portable Baby site (http://www.theportablebaby.com/carrierfeatures.html) Note: this is a commercial site but the most useful one I’ve found.

By: Heather

Heather — Sat, 12 Jun 2010 02:47:29 +0000

Alisha, something else you can try regarding the good faith estimates is to request a copy of the settlement statement or HUD a few days before closing and compare it to the good faith estimate. I have done this several times buying, selling, or refinancing. Any time the fees were different, I had time to investigate why. The majority of the time it was due to extra fees from the title company. Since that wasn’t part of the original estimate, they took them out. I have also spotted errors in calculations and commissions. By reviewing my settlement statement ahead of time and disputing the additional charges, I estimate I have saved about $10k in the past 7 years. Be firm but polite and you should see results. Good luck!

By: Ely

Ely — Fri, 11 Jun 2010 22:32:17 +0000

can anyone think of a war that isn’t religious, at its core? what started the current iraq/afghanistan mess if not extremist islam? what are terrorist attacks? the irish troubles? the holocaust? the bosnian conflict? the problems between india and pakistan? russia and chechnya? all religious. Narrow belief in a religion allows one to see non-believers as less than human; little else does.
not that that has anything to do with anything trent has ever said, but it seems to have come up in the comments. :)

By: Sue

Sue — Fri, 11 Jun 2010 21:49:12 +0000

Trent, I have a Roth IRA, which I started last year. My question: Is it better to contribute a small amount this year than nothing at all?

I hope your father gets well soon.

By: Nadine

Nadine — Fri, 11 Jun 2010 21:26:02 +0000

regarding religion and this blog:

I (an apathetic agnostic) like your blog just the way it is. I appreciate people who share their believe through their behaviour rather than preaching.
I don’t mind mentioning religion as long as it does not mess up the main topic or dominates over it. I would not buy a book that mixes Bible verses and financial advise half and half as a quota, but Ramsay mentioning verses like “debtor is slave to the lender” does not put me off. Yes, you can say the same motif in different words, but considering his audience, it’s ok. I like it that you mention the work you put in rather then preaching something. And I hope your Dad is going to be well soon.

By: steven@hundredgoals.com

steven@hundredgoals.com — Fri, 11 Jun 2010 18:53:40 +0000

@Jim: Fair enough! :)

By: Joan

Joan — Fri, 11 Jun 2010 18:23:04 +0000

Trent: CathyG is right about the Safety Deposit Box laws in some states. A friend has told her daughter (an only child) that upon her death to get to the bank before they can seal the box and remove everything immediately.

By: jim

jim — Fri, 11 Jun 2010 17:22:32 +0000

“The statement that religion has killed more people than modern warfare or Hitler or whatever is a common statement that gets tossed about rather casually and as often as it is stated, there must be some validity behind it.”

No, just cause people say it a lot doesn’t mean theres any validity to it. You can’t believe everything you read on the Internet. Theres LOTS of bogus rumors and myths out there that people repeat over and over and over.

By: Lisa Francesca

Lisa Francesca — Fri, 11 Jun 2010 16:16:39 +0000

Hi Trent, I remember being in a similar state when my 82 year old Dad got an infection from a cat bite on the ankle while breaking up a cat fight. It takes a while to heal, longer than anyione wants, but it heals. Sending you strength.

By: Katharine

Katharine — Fri, 11 Jun 2010 14:38:01 +0000

I thought I’d post about babywearing options but it appears I’m behind the game!
I use a babyhawk mei tai and I have used a moby wrap and a woven wrap. Once my little guy gets big enough I have an ergo!
There are 2 problems with the Bjorn – 1. it dangles the baby promoting core muscle weakness. This isn’t too much of a concern for a full term baby but as the mom of a preemie I was explicitly told NOT to use one by multiple doctors. 2. The way the Bjorn is designed puts all of the weight on the shoulders of the parent carrying the child. Wraps and ergos and mei tai’s all help put the weight on the waist allowing for easier and more comfortable carries. Not to mention all of them can be used for larger babies and toddlers!

By: matt

matt — Fri, 11 Jun 2010 14:08:16 +0000

short sale has nothing to do with ethics in this case beth, he needs to sell the house because of a move of job, and its now worth less than what the mortgage is for, since the bank secured the debt with the house, they took that gamble that it might not be worth more by the time they had to sell it. Ethics don’t enter into it at all, morality; possibly but ethics; i don’t think that word means what you think it means.

By: beth

beth — Fri, 11 Jun 2010 13:45:22 +0000

“This is the normal type of risk that banks account for when they create mortgages, so I wouldn’t worry about it.”–That’s like saying since businesses budget for some loss by theft, it’s OK to steal. NO! Just because banks know some people will not honor their financial obligation and pay back their loan as promised does not mean it’s OK to do so! Sorry Trent, but your lack of ethics in this answer is REALLY disappointing.

By: cj

cj — Fri, 11 Jun 2010 12:46:06 +0000

Love the “Christian overtone” reply….so so very true! I just so look forward to reading your posts every morning….I get so many but yours is my first and one I don’t ever want to give up! Thank you for sharing all your insight!!!

By: Meika

Meika — Fri, 11 Jun 2010 12:24:17 +0000

@Justin, re baby carriers: I also highly recommend the Ergo. I still se it for my 18-month-old (30 lbs) and even my 3-year-old (40 lbs) on occasion. I owned several carriers prior to this, and it is the most comfortable and easiest to adjust, hands down. I did like the Moby for a tiny baby, but we really only used it for eight or ten weeks – I have big babies and just found the Ergo more comfortable after that, though I know there are ways to adjust the Moby for bigger babies.

I recommend that you don’t consider the Bjorn. I used it with my first while in Japan, which means that I used it a LOT. It was fine when she was small, but by the time she was six months old it was incredibly painful to wear for even an hour or so – it just didn’t work for me at all beyond the first couple months, and it really does hang the baby by their crotch. Ouch. You can pay just a little bit more and get a carrier that you can use comfortably for years.