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Six Steps to Getting Out of This Financial Mess

Business Commentary

By Scott Casaccio
Equity Solutions Group
Created: June 16, 2010 Last Updated: June 16, 2010
Related articles: Business » Economy & Trade
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With a false sense of security, people started to use the equity in their homes. They purchased a new car, a second home, went on vacation, or anything else that they thought the money was needed for. With six steps you can rebuild this financial crisis.  (Photos.com)

With a false sense of security, people started to use the equity in their homes. They purchased a new car, a second home, went on vacation, or anything else that they thought the money was needed for. With six steps you can rebuild this financial crisis. (Photos.com)

Institutions were lending money at record rates. Home buying was at an all time high. The institutions were handing out money without doing due diligence. Little to no money down was required to purchase a home. There you were, sitting with a mortgage broker going over an application to purchase a home. You were thinking “what an easy way to become a homeowner.” You watched your house increase in value. Then…

It Starts to Become a Problem
With a false sense of security, people started to use the equity in their homes. They purchased a new car, a second home, went on vacation, or anything else that they thought the money was needed for. Then, there were the unexpected problems—house repairs, illness, credit card debt, job loss, loss of tenant income, even to make your mortgage payments. The equity in our homes was used to carry these costs. All of these expenditures combined with the high mortgage balances left us in more debt than could be managed.

As a result of this debt, foreclosure rates climbed at a record pace. People used the equity in their homes as a crutch. A domino effect occurred when the economy began to crumble which led the nation to the worst financial crisis since the Great Depression of 1928. We are now left to deal with this burden, caused by the irresponsible lending practices of the lending institutions. While the banks are being “bailed out,” we are left to our own devices to rebuild our lives.

Six Steps to Rebuilding
Step 1: Find professionals with the right credentials to help you. Check references, experience, and licenses. Do your Homework. Do not make the same mistakes that put you in this situation.

Step 2: Debt Consolidation. Consolidate debt through negotiations, lower balances up to 50 percent to 70 percent, or negotiate the monthly payments to one low payment.

Step 3: Credit Counseling. Consult a credit counselor to improve your credit score. A credit counselor will help you budget so that payments will be made on time and help control spending.

Step 4: Loan Modification (The best way to stop foreclosure). Modification can lower the mortgage to much lower rates. If you are in foreclosure, negotiate with your bank to capitalize the arrears. This will help you get out of foreclosure.

Step 5: Short Sale. If you’re in foreclosure and are faced with more debt than you can handle, you can default and take the consequences or you can apply for a short sale. If handled properly, this process will enable you to sell your home while relieving you of the stigma of foreclosure. But, beware, there are risks involved with this process. (Refer to step 1)

For those of you in the position to have capital to invest, the time could not be better to capitalize on a real estate market that is severely depressed.

Pot of Gold
The concept of buying a home at a bargain price and waiting for the equity to increase is a great one. There are no better ways hardworking men and women can achieve financial growth, security, and comfort.

Now is the time to take advantage of the housing market and use the government’s incentives to buy homes at bargain prices. These houses have hundreds of thousands of dollars of equity instantly built in.

Our nation has learned how greed can overpower the corporate ladder. Corporate America believed the money they were making and the bonuses they were receiving outweighed the risks of their irresponsible lending practices. We must also redefine our ideas of success in terms of reality to ensure that we do not repeat history again.

This has been an extremely trying time for our nation. It is possible to once again achieve financial security and you have the tools with which to do it.

EQUITY SOLUTION GROUP, LLC is a full service financial company. For over two decades our staff of experts has been assisting clients achieve financial stability and security. Our knowledgeable professionals are up-to-date on the most recent financial and legal solutions available to protect consumer rights. ESG, LLC offers real estate and mortgage products, insurance (all types), debt and credit solutions, and a legal department to help those in foreclosure. At ESG, LLC we understand everyone’s rights to financial security. The company is dedicated to pursuing this goal for each and every one of its clients.




   

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