or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish crA homeowner holding this hand looks around the room to see if there are any players to help. Personal self-defense is based on fight or flight. The decision then is to stay and fight or choose flight and run away and take off to a safer place. When a borrower is faced with this situation there are three options for additional cash flow. Make more money, reduce expenses or do both. Once a decision is made to keep the home then the strategy must be developed to make that happen. If flight is the choice, decisions must be made to make that happen while perhaps downsizing and reducing the monthly housing expense. One of the best options, IF there is any equity at all, is to refinance to a lower fixed rate, which is now available. This is one of the great positives of the current market, low interest rates can save the day and give borrowers a chance to get into a stable payment situation. If a borrower can’t do that then other alternatives must be considered.

Although there is major hand wringing going on with these high risk hybrid subprime (higher credit risks) mortgages there is also an opportunity for many to finance to a lower fixed rate loan. There will be heavy refinances going on with those who can qualify and move into the lower fixed rate loans. This will be an answer for many. If the credit must be tweaked and improved to make that possibility a reality, then so be it. Pay off credit cards, settle collections, pay off judgements, put time and distance from any past bankruptcy actions while improving the debt to income ratios all as a means to better qualify for a low rate fixed rate loan. If a borrower is behind on their payments a lender may offer a “forbearance” option where the payment arrears are set up on a parallel pay back schedule while the normal payment is being made. This is a catch up mechanism. All of these options invoke the stay and fight decision, which comes to the front by selecting these choices. This selection must make sense and there must be a reasonable chance of making it happen. Employment needs to be solid and dependable income steams must be in place. If a part-time job is necessary, it must be done. As far as reducing expenses, trading down cars with large car payments to free and clear transportation may be necessary in the reducing expense mode. Gym memberships may need to be cancelled and settled, any ongoing sundry expenses can be eliminated until the mortgage crisis situation has passed and settled down in a year or two. Cable extras may need to be pared back. Dial up service versus a more expensive high-speed service may need to be likewise pared back. Cell phones may need to be converted to pay as you go throwaways to further cut expenses or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish cre

nance to a lower fixed rate, which is now available. This is one of the great positives of the current market, low interest rates can save the day and give borrowers a chance to get into a stable payment situation. If a borrower can’t do that then other alternatives must be considered.

Although there is major hand wringing going on with these high risk hybrid subprime (higher credit risks) mortgages there is also an opportunity for many to finance to a lower fixed rate loan. There will be heavy refinances going on with those who can qualify and move into the lower fixed rate loans. This will be an answer for many. If the credit must be tweaked and improved to make that possibility a reality, then so be it. Pay off credit cards, settle collections, pay off judgements, put time and distance from any past bankruptcy actions while improving the debt to income ratios all as a means to better qualify for a low rate fixed rate loan. If a borrower is behind on their payments a lender may offer a “forbearance” option where the payment arrears are set up on a parallel pay back schedule while the normal payment is being made. This is a catch up mechanism. All of these options invoke the stay and fight decision, which comes to the front by selecting these choices. This selection must make sense and there must be a reasonable chance of making it happen. Employment needs to be solid and dependable income steams must be in place. If a part-time job is necessary, it must be done. As far as reducing expenses, trading down cars with large car payments to free and clear transportation may be necessary in the reducing expense mode. Gym memberships may need to be cancelled and settled, any ongoing sundry expenses can be eliminated until the mortgage crisis situation has passed and settled down in a year or two. Cable extras may need to be pared back. Dial up service versus a more expensive high-speed service may need to be likewise pared back. Cell phones may need to be converted to pay as you go throwaways to further cut expenses or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish cr

possibility a reality, then so be it. Pay off credit cards, settle collections, pay off judgements, put time and distance from any past bankruptcy actions while improving the debt to income ratios all as a means to better qualify for a low rate fixed rate loan. If a borrower is behind on their payments a lender may offer a “forbearance” option where the payment arrears are set up on a parallel pay back schedule while the normal payment is being made. This is a catch up mechanism. All of these options invoke the stay and fight decision, which comes to the front by selecting these choices. This selection must make sense and there must be a reasonable chance of making it happen. Employment needs to be solid and dependable income steams must be in place. If a part-time job is necessary, it must be done. As far as reducing expenses, trading down cars with large car payments to free and clear transportation may be necessary in the reducing expense mode. Gym memberships may need to be cancelled and settled, any ongoing sundry expenses can be eliminated until the mortgage crisis situation has passed and settled down in a year or two. Cable extras may need to be pared back. Dial up service versus a more expensive high-speed service may need to be likewise pared back. Cell phones may need to be converted to pay as you go throwaways to further cut expenses or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish cr. Employment needs to be solid and dependable income steams must be in place. If a part-time job is necessary, it must be done. As far as reducing expenses, trading down cars with large car payments to free and clear transportation may be necessary in the reducing expense mode. Gym memberships may need to be cancelled and settled, any ongoing sundry expenses can be eliminated until the mortgage crisis situation has passed and settled down in a year or two. Cable extras may need to be pared back. Dial up service versus a more expensive high-speed service may need to be likewise pared back. Cell phones may need to be converted to pay as you go throwaways to further cut expenses or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish cr or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish credit to the point where a new lower rate fixed rate mortgage can be put in place. Over time, values MAY appreciate a bit to assist in qualifying for a loan. If a borrower is not up to any of this, then the flight option can be selected.

The flight option basically comes down to selling the property and taking whatever equity is available and possibly renting or finding a lower priced opportunity in a market populated with the same disparate sellers all begging for offers. When a homeowner gets beat up on the price in selling there is a real possibility in making up the loss on the purchase of a depressed value property. When borrowers select to buy a lower price property then the family budget may be positioned to make a comeback with saving opportunities to stabilize the asset side of their financial statement.

When the stock market is in the full “Bull Market Mode” and keeps running up unabated until finally the “Bear Market” shows up then major corrections are experienced. When the chickens come home to roost and stocks with weak fundamentals, high price earning ratios, low or no dividends, and perhaps bad sales and profit news the stocks fall big time. Some stocks will get pounded more than others. Perhaps it was just a weak quarter or extenuating circumstances with big one time write downs, or it might be a big problem like a Chapter 11 Bankruptcy filing like many of the airlines and other companies are dealing with. When this happens in mass, the Dow Jones Average together with other stocks fall as a group due to fundamentals and consumer perception and confidence. Now, the spill over from the defaults in the Subprime, Fannie Mae and Freddie Mac are impacting the financial markets as well. Investors are nervous. It will be a period of adjustment until this “problem” is handled one way or the other. Much like the RTC fiasco of the Savings and Loans debacle, serious and painful resolutions will be required until these troubled properties get folded back into the housing stock through new family ownership. Supply and demand principles are in full effect.

Much is the same with housing. Stable and steady increases in some communities in the 3% to 5% appreciation ranges have had minor effect in the market depreciation fall with all other things being equal. In other areas where appreciation was hitting 12%-20% per year where investors were flipping left and right and making major hits it was the “new wild west gold rush” of money making opportunities. Many property flippers (buy, fix up and sell) were making $50,000 to $100,000 per deal. Buyers were camping out at builder’s offices to get in on the property gold rush. Builder concessions were non-existent. Builders di