Here’s something interesting for you all!

 

Debt Consolidation Care Community is now introducing a brand new section – “Exclusive Interviews” highlighting the best personal finance bloggers and their blogs.

 

We begin our very first interview with “Fabulously Broke in the City“. The blogger here is a 25-year old single woman from Canada, who started off as an IT professional but ended up being an IT consultant in 2008. The way she found her way out of debt and transformed herself from a shopaholic to a frugalite is quite exciting. Interested to know about her views? Just read the excerpt below.

 

Jason: From where did you get the idea of blogging?

FB: I started reading personal finance blogs once I told myself that I had to figure out how to get rid of this $60,000 in debt and to finally understand where my money was going. So I thought of being the personal finance version of Carrie Bradshaw from the HBO TV Series “Sex and the City”; I would blog about the effects of money on people, like a money-thropologist.

 

Jason: There are so many topics on which you can blog. But why Personal Finance?

FB: I don’t just blog about PF any longer. It started off as being 75% about money, but now it’s an even 50/50 split between money, style, life and general career tips. The blog is truly a reflection of myself. And I chose money to be the 50% of the blog because it’s a topic I am interested in, although I do tend to stick true to my original idea, of being a money-thropologist rather than being a money guru.

 

Jason: What do you do in real life and how’d you get started?

FB: I am an IT consultant, and I fell into it by accident after graduating business school.

 

I started off working at a company for 2 years, then I left and became a freelancer, quadrupling my salary and increasing my vacation time in the process. Now, I work on contract and only when the contract seems like a good one. It’s a real sense of freedom to be able to pick and choose, but it is not for everyone as you have to be extremely disciplined with your money but not obsessive (a hard balance, this one..), and you have to be willing to be jobless for a couple of months, while actively searching for something (also a hard thing to do).

 

I stay calm about my situation because I am financially secure for at least a year to two years without working, as my must-have expenses are around $1000 each month.

 

Jason: What advice you would like to give to the people in this economic recession?

FB: I don’t have any good advice other than to take this opportunity to re-examine your lifestyle and to scale back if necessary.

 

It took me 2 years to get to the state of mind I am in right now, understanding that money isn’t everything per se, but it controls a lot of things. No one needs to have so much space, nor to fill up their lives with so many things just to feel rich.

 

Being rich and satisfied is a state of mind, and I find having a lot of things (and the big bills that come with it), causes more stress and insecurity than not having much at all but people tend to use things to fill the deep emotional void and stress in their lives, when all they need to do, is re-examine their top 3 priorities and spend accordingly to what they find fulfilling.

 

Jason: We just noticed the tagline on your blog is, “Just a girl trying to find the balance between being a Shopaholic and a Saver.” Do you think you’ve found that balance?

FB: Most definitely. I have quite a bit saved in cash from freelancing ($36,000), about $25,000 in retirement funds (book value), and another $15,000 left in my business, plus a $2000 car.

 

I do tend to shop from time to time for unncessary items, but when I do, it’s only if it’s a good deal, of decent quality and if I see myself using the item forever. I don’t buy clothing, shoes or accessories in bulk any longer — I actually sold 60% of my wardrobe just to get to the essentials that I needed. I also don’t buy unnecessary toiletries, makeup, random pieces of clothing.. everything has a purpose.

 

My only weakness is technology, but I still only buy what I find to be useful, of good quality and worth the price they’re asking.

 

Jason: What are the three biggest finance mistakes you have ever made?
FB: Not bothering to understand the full impact of student loans while I was in college. I mean, I knew I had to pay back that debt, but I didn’t understand how much would be skimmed off my paycheque each month and for how long. The number that I graduated with ($500 minimum each month) was shocking.

 

Not being a saver and a conscious consumer before I got into all of that debt. I wasted 75% of my money before and during college on stuff that I ended up getting rid of. It is a hard lesson to sell a $100 top for only $15, the sunk cost and the knowledge of wasted money is disheartening.

 

Not taking a better interest in my money in general and at an earlier time. If I had, I would have saved 50% from working as a teenager (it was all disposable income anyway), and had a larger savings and retirement fund right now. But, c’est la vie.

 

Jason: Where do you see yourself in 10 years down the lane?
FB: In Dallas, working as a freelancer for what I do best, with a modest home and at least 2 kids. I just need to get my toe across the border and for the recession to be over so that companies will be allowed to hire foreigners (Canadians) and sponsor their visas.

 

Jason: How do you feel after paying off almost $40,000 in just one year?
FB: Pretty good. The ending was anti-climatic when I sent the final payment.

 

I was pretty obsessive about my debt. I put everything, I mean EVERYTHING I had towards it. Any extra pennies, a $5 bill I saved or found.. everything. It was just such a high to be able to pay my debt off, even in small amounts; to see the interest rate drop and to feel like you’re making progress, albeit a little bit at a time.

 

Considering I was only earning $65,000 as a gross income when I paid off most of my debt (except $15,000), my net income was around $50,000 for 2 years, so I lived on $10,000 each year – this was made possible by being a consultant, and I went the unconventional way and lived out of hotels with only a single suitcase, just to save on rent (the biggest budget killer).

 

Jason: Do you think blogging has changed your life in some way or the other?
FB: How could it not? I have met so many wonderful online friends, and the personal finance community is incredibly welcoming.

 

When I first started, I did notice that there were two camps of PF’ers: The ones who were extreme frugalists, to the border of being cheap, such as eating only the food that was on a deep discount, or refusing to spend money on luxuries such as a glass of pop or a candy bar.

 

Then you have the other camp (the one I consider myself to be a part of), who tells you that getting out of debt doesn’t have to be painful and you don’t need to become a hobo to do it, you can still be stylish and have fun even though you are in debt. You just have to figure out where you draw the line in terms of comfort in your lifestyle (can you survive in a bachelor apartment with a family of 4 for 2 years?), and adjust the balance until it fits you and your family — not everyone is the same, nor do we get out of debt the same way.

 

Jason: How do feel by becoming a part of world’s largest debt consolidation community now?
FB: I am not sure I would call myself part of the debt consolidation community, as I didn’t consolidate any debt at all when I cleared my $60,000. I just paid it off with hard work and scrimping, and re-examining my life to become a minimalist (as far as I could take it), and a being a conscious consumer who looks at quality first, and price second.

 

Anyone can do that because once you have the tools such as tracking your expenses, creating a budget and setting priorities for your money, it’s not a question of will any longer. It is a question of willpower.

If you are a regular in our Community, you may have noticed how adamant I am about sending disputes of inaccurate information on your credit report to the Credit Reporting Agency/ies whose report reflects such information.

Is it Really a Waste of Time to Dispute With Credit Reporting Agencies?

If you do not save this info, and merely send them a letter saying basically “this is wrong, change it”, then you just may be at the mercy of an unscrupulous creditor who will just say “it’s accurate”. For instance, one poster on our Forum stated: “I guarantee you that, even if you send the bureau a copy of a PIF letter, the bureau won’t actually change your credit report. In all cases, they forward the dispute to the creditor/data furnisher who is reporting the information. This method of procedure is all that is required of them in the FCRA.” In order for the creditor to merely say “it’s accurate”, they would have to LIE and say that they did not send you the PIF letter (to use the example just cited), which is fraudulent on their part, or they are basically accusing you of fraud.

The Government Fights Back

According to the National Consumer Law Center’s Report Automated Injustice: How A Mechanized Dispute System Frustrates Consumers Seeking to Fix Errors In Their Credit Reports disputes to the CRA were being processed exactly as the above mentioned poster said. It stated: “Despite its importance, the FCRA dispute process has become a travesty of justice. The major credit bureaus (Equifax, Experian, and TransUnion) conduct investigations in an automated and perfunctory manner.”

They aren’t supposed to just pass the dispute on, especially when the consumer is providing documented proof in their defense. The Fair and Accurate Credit Transactions Act of 2003, also known as the FACT Act, was enacted because of this very reason. So even though they may have basically ignored disputes in the past, they are now fair game for a possible lawsuit by the FTC in Federal Court. If the CRA refuses to bend, again, file that complaint with the FTC. The CRAs may have differing information, but they are all beholden to the FTC. After the CRA spurns the heartfelt plea of the wronged consumer, they usually believe that they are beaten by an entity with power over their lives. This, my friends, is the very definition of tyranny.

How a CRA is SUPPOSED to Deal With Your Dispute

The FTC itself has power over the CRAs. The CRAs actually must investigate and take into consideration any documentation that the consumer supplies. According to FTC Reports to Congress on Credit Report Complaint Referral Program (page 2): “Sections 611 and 623 of the FCRA impose dispute investigation and resolution duties on CRAs and those entities that furnish information about consumers to the CRAs. … If a consumer disputes the accuracy of an item of information in his or her file with a CRA, the CRA must (i) complete an investigation of the dispute … (ii) review and consider all relevant information provided by the consumer“* [emphases mine]. The same paragraph continues that the alleged creditor must also investigate. THAT is why I say to always dispute with the CRA, it’s a one-two punch. Of course, first try with the creditor, and if they refuse to correct it, then go this route. That is a total of 3 denials, and you know what they say about 3 strikes.

Again, keep all documentation, you will need it. Send not only a copy of any letters, etc., but also the envelope it was mailed in. If emailed, print out the email with full headers. The more proof you have, the tighter your case is.

Daddy’s Watching!

The FTC randomly audits dispute data in the CRA records, because of complaints to the FTC that the CRAs are not removing info that is inaccurate. If they don’t, the penalties against the CRAs can be up to $2,500 per violation.

The Federal Trade CO-Mission (It Takes 2 – Us & Them)

I keep harping on about the Federal Trade Commission, but, seriously, they do their job very well. Perhaps people have become jaded against any Federal agency after so many reports of incompetence, especially the Katrina fiasco. But every agency is not like that. Some are headed by very dedicated people whose main motive is to defend people against unfair and deceptive acts or practices, and get a paycheck for it too! Win-win! But it takes legitimate and documented complaints for them to open an investigation. They can’t, both logistically and financially, sue every company that some citizen complains against, but a consistent history of similar complaints shows a purposeful flaunting of the law.

The same is also true of debt settlement companies, or that store down the street that sold you defective merchandise and refused to refund your money, or even that judge who rules in the creditor’s favor even though the defendant has a mountain of evidence in their favor. If you feel you have been ripped off, it is your duty as a citizen of this free country to demand a redress of grievances.

FTC Testifies on Efforts to Protect Consumers of Financial Services; Urges New Tools for Stronger Enforcement Authority is an attempt by the FTC for Congress to grant them more power to file charges against these rip-off artists. Right now, they have to file a request with the Dept. Of Justice, and that can run into one heck of a backlog. That’s why it may seem to take awhile before justice is served.

Thus Quoth The Raven: Nevermore

“The price of freedom is eternal vigilance.” (Thomas Jefferson)

“[P]eople have only as much liberty as they have the intelligence to want and the courage to take.” (Emma Goldman)

“So long as the people do not care to exercise their freedom, those who wish to tyrannize will do so; for tyrants are active and ardent…to put shackles upon sleeping men. (Voltairine de Cleyre)

—————–

* See also the FCRA Sections 611 (disputes to the CRA) [15 U.S.C. § 1681i(a)(1)(A)] and 623 (disputes to the alleged creditor) [15 U.S.C. § 1681s-2].

In a Commentary on Feb 9, in Bloomberg, this article caught my eye: “Ruin Your Health With the Obama Stimulus Plan: Betsy McCaughey”. It made some interesting points, and so I did a little research to learn more.

One of the issues slipped in to the Stimulus is: Title XIII – Health Information Technology. (H.R. 1-112) Ostensibly this will help ensure that procedures are not duplicated and that any emergency room in the country could get your full medical history in case – for instance – you are admitted to the emergency room and unable to converse about your medical history.

This sounds all well and good.

Americans have been debating a national database for quite some time. It is a hot-ticket item. However, the process of national databases took a turn toward a fact of our lives through the child support issue, and then illegal aliens. A part of the Secure Borders, Economic Opportunity and Immigration Reform Act of 2007 extended the Employment Eligibility Verification System (EEVS), now requiring employers to verify I9 information through the Department of Homeland Security. Most notable to me was this comment upon passing, by Neal Kurk, a Republican state representative from New Hampshire, in reaction to the immigration bill: “The people of New Hampshire are adamantly opposed to any kind of ‘papers-please’ society reminiscent of Nazi Germany and Stalinist Russia. This is another effort of the federal government to keep track of all its citizens.” I wholeheartedly concur.

But, let’s think for a moment about the ramifications of this issue. Firstly, and most importantly, the potential for abuse is high. For instance, what will be the system for labeling each unique record to avoid any normal computer errors? How many lives have already been interrupted because of a computer or operator error of one kind or another? An error in a medical database could be catastrophic. It would have to be an absolutely unique and non-duplicated marker – such as the retina. But has our retina-scanning technology perfected enough and become cost efficient enough to ensure that it would be at every medical facility in the country?

The office of the Health Information Technology, and the position of Coordinator, was actually inaugurated by former President George Bush, through Executive Order #13335. In fact, some of the reasons specified on Section 3001(b) of Title XIII are nearly identical to Section 2 of E.O. #13335. This Act is basically turning that Executive Order into Federal Law by updating the Public Health Service Act [42 USC 201] and adding funding ($20 billion) in order to implement the next step, which would be the actual technology and staffing of the offices that would handle the coordination of the data and to implement strict security measures to limit access to authorized medical providers only. They will have one year, when they must report on their progress to the Senate and the House, including security measures, and evaluation of benefits and costs to completely implement the “[t]he utilization of an electronic health record for each person in the United States by 2014.” [Subtitle A, Section 3001(c)(3)(A)(ii)].

And then, there’s the “Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, 2005”, also known as the Real ID Act of 2005. This requires State DMVs to verify an individual’s information for a Driver’s License or a State ID. All states would have to comply with the regulations of this statute, or their IDs will not be accepted at any Federal office. By Sep 11, 2005, all States are supposed to be plugged into this system, known as Systematic Alien Verification for Entitlements, as provided for by section 404 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 [49 USC 30301 (c)(3)(C)], which goes even further back to the Immigration Reform and Control Act of 1986 which started the process centered around Form I9, the Employment Eligibility Verification Form.

So, all this points toward one thing: a National Database, with personal and private information all included. Now, health information is to be added. Income information is already there, for child support collection and “alien-proofing” the workforce. It’s only a step away to add credit reports, which are now private firms, but whose accuracy and efficiency is in question. Step by step, the database grows. Step by step, our reliance upon an unreliable technology becomes a part of daily life. How long, really, until we have a system somewhat like on Minority Report, where as soon as you walk in a building, you are already tagged? Everywhere you move, everywhere you shop, everywhere you read, everywhere you try to hide – all noted, recorded, and filed.

Back to the bill at hand: Ms. McCaughey states “…the bill treats health care … as a cost problem instead of a growth industry.” Those who filed for bankruptcy and those who are struggling to file for bankruptcy after the 2005 “reforms” in order to get free from crushing and bloated medical debt would beg to differ with you, Ms. McCaughey. It is *precisely* a cost problem. HMOs are not the problem, nor are they the solution. Mandatory health insurance is not the solution. The entire industry is corrupt to the bone, and cares more for self-enrichment than service to the injured and ill. The solution is a top-down shaking and re-configuring of the entire system. And that won’t happen, so now the solution is to have us all numbered, tagged, and filed. Nice. It’s sad that this had to be snuck in the back door, out of sight from an open vote. It just goes to show that the government no longer cares about the will of the people. And the fact that this was slid into a bill of such immense importance and sweeping ramifications, and thus more difficult to overturn, makes it particularly sinister, and says a lot about President Obama’s real motivations. And that, my friends, is more of the same old, same old. The joke is on us, the American people, yet again.

In chess, when you can’t get to a main piece, you attack the minor pieces one by one, thus opening up your options for attack. On Feb 14, 2001, in her 1st address on the Senate floor as Senator, while addressing the health care plan, Hillary Clinton stated “I learned … the wisdom of taking small steps to get a big job done.” Indeed.

Hopefully, this system will ensure timely and efficient medical care and a record of allergies and sensitivities, which will cut down on wasteful spending. Hopefully, it will not be used as an excuse to deny service to the suffering, especially the elderly and genetically challenged. But I would be aware, I would keep my eyes open, to ensure the safety and integrity of such a massive database. And let it not be used as a further tool of control of our most basic of needs – for that of our body to function in such a way that we can have quality of life. It is our Right.

Home Owners Loan Corporation (HOLC) is able to stop mortgage default and help homeowners to retain their homes. But what is HOLC and how can it help you to retain your house? Let us explore.

Home Owners Loan Corporation – what is it?

HOLC or Home Owners Loan Corporation was an agency that bought mortgages from failed banks during the Great Depression of 1930s and modified the loan terms to much easier ones. HOLC offered easier refinance options to homeowners. It extended the loan repayment period and divided the single lump sum payments to smaller installments. Thus, Home Owners Loan Corporation helped more than 1 million families in repaying their mortgage debt and avoid foreclosure.

Home Owners Loan Corporation and its significance in current economic crisis
According to an estimate there are more than 2 million homeowners carrying $3 trillion mortgage debt. Moreover, there are 3 million ARMs (Adjustable Rate Mortgages) that would be adjusted to higher interest rate during 2009 and 2010. Mortgage default and consequent foreclosure were the main reason behind current financial and economic crisis. Thus, more mortgage defaults would deepen ongoing economic crisis in the coming years.

So, what’s the solution?
The only solution is to stop mortgage default and consequently foreclosure. This can be done if Home Owners Loan Corporation is reinstated until the crisis is over. Corporation then can buy mortgages from lenders and dole out refinance options to the distressed mortgage borrowers at easier terms so that they can repay the loan. This will help the average distressed Americans to keep their homes with themselves.

What are the reasons due to which we are in such a position?
Let us analyze the problems which led our economy to this situation.

Main reason behind current US economic crisis is our over dependence on credit. Growth in US economy during the 1990s was mainly due to credit driven consumption by American people. Economic data shows that National Consumer Debt has more than doubled from $789 billion to $1.6 trillion between 1990 and 2001. Mortgage loans and credit card debts increased tremendously. Debt-Income ratio shot up from 67% during 1960s to 95.6% during 1990s.

The US economy received the first shock during the dotcom bubble burst and subsequent stock market crash in 2000 which led to a severe recession in 2001. Finance capital flew out from the IT stocks but soon found resort in the housing market. More and more investment in the housing market led to real estate boom and helped the US economy to recover.

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