Fighting to Save A Home

Michelle Singletary
Thursday, February 28, 2008 10:24 AM

As the mortgage crisis worsens, various plans continue to be proposed to help struggling homeowners stay in their homes.

Columnists Ilyce R. Glink and Samuel J. Tamkin's write about one recently announced plan in "Delinquent Borrowers Get Extra Time, but the Problem Remains Massive" (Feb. 23).

As Glink and Tamkin report, six mortgage lenders have banned together and decided to hold off on foreclosure action for 30 days for borrowers who are 90 days or more behind on their mortgage payments. The goal is to give those borrowers a chance to negotiate better terms with their lender.

For more on the housing crisis, read "Mortgage Web Site Has Admirable Goals, But Will It Save You Money?" (Feb. 23) by Jack Guttentag and "Homeowners Losing Equity Lines" (Feb. 23) by Dina ElBoghdady.

Also, read about a move by lenders to prevent loans from being rewritten in bankruptcy cases in "Lenders Fighting Mortgage Rewrite" (Feb. 22). Congress is considering giving bankruptcy judges more latitude to change the terms of mortgage loans and reduce the amount borrowers owe.

Let's Chat Today

Author Jeff Yeager says you can nickel and dime your way into wealth. Yeager is the true embodiment of a penny pincher which is why his book is February's Color of Money Book Club pick. Join me today at Noon ET to discuss "The Ultimate Cheapskate's Road Map to True Riches" (Broadway Books, $12.95).

In his book, Yeager describes the money mantras that have worked for him, beginning and ending with a simple message: "You can enjoy life more by spending less." Read my review of his book "Slaying the 'Enoughasaurus' And Embracing Frugality" (Feb. 3).

Who Doesn't Want To Be A Millionaire?

You couldn't miss the news of Tonya and Robert Harris, who recently won $275 million in Georgia's Mega Millions jackpot.

When I heard about their story and what they said they would immediately do with some of the money I turned to my husband and said, "I bet they won't have a dime of that cash in 10 years."

I may end up being wrong, but there's lots of evidence I'm right. Robert Harris said he planned to buy a brand-new truck a day after collecting the winnings. His wife said she wanted a Mercedes. They're already talking about building a home.

They started -- at least in their heads -- a spending spree. Most experts advise that when you win the lottery, inherit money from a relative or come into a large sum of cash, the first thing you should do is nothing.

The couple decided to take the lump sum, which is $167 million before taxes. Many people fantasize about winning the lottery. However, one study by the Certified Financial Planners Board of Standards found that nearly one-third of lottery winners eventually end up bankrupt. Seventy percent of those who become suddenly wealthy lose the money within several years of winning the loot, according to the National Endowment for Financial Education.

The National Foundation for Credit Counseling says that you can achieve millionaire status without winning the lottery or inheriting a windfall. All you have to do is invest and save starting at an early age. Here are a few tips on becoming rich without gambling:

-- Have the money you want to save automatically deducted from your paycheck.

-- Keep saying to yourself cash is better than credit. Plastic distances you from the real pain of spending cash.

-- Save your change. Spend only paper money and put your change in a jar at the end of each day.

Find more tips at NFCC. Also, read "Save Money on Practically Everything" (Feb. 22) by Kiplinger.com. They took eight spending categories from the average budget, including traveling, entertainment, investing, and found ways to save in each area.

College Costs

The Post Sunday Business section now has a new feature called "Ask The Experts." Every week, the Post will pose a question to three financial experts. This past Sunday's question was: "What is the best way to save for college?" Read what the experts said:

* David A. Ballard - President of Champion Financial Planning Group in Annapolis

* Rita Cheng - Financial Adviser at Ameriprise Financial Services in Bethesda

* Drew Tignanelli - President of the Financial Consulate in Lutherville, Md.

The Checkout blogger, Annys Shin, has returned from maternity leave and last week, she wrote about pricey college textbooks in "Getting Schooled on the Cost of College Textbooks" (Feb. 19).

Shin blogged about legislation passed by the House that requires publishers to disclose the cost of textbooks when they sell them to teachers. The legislation would also address the trend of publishers bundling books and supplemental materials, which increases the cost of textbooks.

For more on college costs read Valerie Strauss's "House Backs Billions in New College Aid" (Feb. 8).

Casting Call For "Singletary Says"

Having problems with your mortgage? I'm doing a mortgage special for my TV One show, "Singletary Says." If a profile below sums up your situation and you live in the Washington Metro area, send an email to colorofmoney@washpost.com. In the subject line, please put "TV One Guest."

Wanted:

* A man or couple who is facing foreclosure and needs advice on how to weather the storm.

* A man or family who has been through a housing crisis, such as a foreclosure, and needs a plan to help recover financially after this crisis.

Tax Tips for 2008

If you are in the military H&R Block has some tax tips for you:

-- You can receive an interest free extension if you've been unable to file due to service overseas.

-- Active duty pay for services in a combat zone is not taxable.

-- Calls made home from a combat zone are exempt from the federal excise tax on toll telephone service.

Get more H&R Block tips here.

In a recent Color of Money column I cleared up some of the confusion about the rebate some taxpayers will receive this year. Read "Rebate Fact and Fiction" (Feb. 21) and visit the IRS Web site for additional information.

You are welcome to e-mail comments and questions to colorofmoney@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.