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trying to help a friend

Posted by patches_02 (My Page) on
Sun, May 4, 08 at 9:19

We have some friends that are having some problems right now. He lost his job because of out sourcing. Then had several medical problems right away. ( heart attacks) He won't be able to work again and forced into retirement. She lost her job when she had to take off work so much to take care of him. Any way they were on one of those ADJ. rate mortgages and they almost owe more then the house is valued at. Have tried and tried to sell but in our area right now there are house sitting empty every where. Because of all involved there credit score has really took a hit. They don't owe a lot of cc debt or anything like that. But with the house payment so high and what he gets from having to retire there debt ratio is high. They have tried to get there house re mortgaged but have been told over and over they would have to come up with $5000 to get anyone to lower it. They have a 06 Lincoln town car that was left to them( there only car now ) It's valued at 22,000 they could sell this and to get the 5000 but then they would have to buy another car ( older ) but there afraid they would be buying into problems. That's what happened to there other car. It was always in the garage and eating up anything they had to keep it going. Is there places out there that would so a loan and use the car for collateral with the debt ratio. They would then get a decent mortgage rate. I wish i could help them with everything going on, i just can't. She talked to her local banker and he did everything he could to get something to go thru. he was really great to them. He them suggested they find a private lender. Don't know about this. I know they would make the payment and the car is really nice and that's what the banker told her. What is available to people when something like this happens. There such a great couple.


Follow-Up Postings:

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RE: trying to help a friend

Your friend's(1) employment disappeared ... and, though he probably thought that he could find a replacement, possibly at a lower level of income ... that soon turned out to be a vain hope, as he is now unemployable. At the present, at least, though if his health improves, he might be able to find a source of income in probably a non-traditional manner.

His wife is unemplyed, due to their family situation. If his health improves, may she be able to return to the workforce? And if she does, might her earnings be sufficient to maintain the family?

Including the payments on the home, for the duration of the mortgage period?

I have a certain bias, in that, with a rather low income for a number of years, I have driven older cars for years ... ones that seldom cost over $3,000.00.

You speak of their vehicle being "worth" $22,000.00. Do you /they think that there'd be a good possibility of getting an amount approaching that figure, were they to sell it?

Do they, or their friends ... or you, or your friends, include someone who's a mechanic? Suppose they were to approach a mechanic to ask whether s/he'd evaluate a car that they were considering buying, would such be possible? Then, have the mechanic give them some suggestions which would help them winnow out some undesirable ones before they take it to him/her for evaluation?

If the mechanic gives a car a quick look/listen and tells them to get out of there with that piece of crap, give him/her $10.00 ... for a slightly more complex evaluation, $20.00 ... and for a fairly thorough evaluation $50.00 ... if they pay $200.00 for several evaluations, and save one trip to the garage for repairs ... they're money ahead.

If such a scenario looks any way reasonable to them, it may be the way to go.

As it is, it seems to me that their idea of getting a loan on the car, probably at a fairly high rate of interest, that they must repay, in addition to the payments on the house, seems to me like too heavy a load to carry.

Especially since vehicles are notoriously poor investments ... houses have, on average, increased in value over the years, prior to the shady deals that many lenders have pulled in recent years, but cars don't hold their value, their value deteriorates ... and that rather rapidly (especially luxury" cars) ... and especially the ones that are hard on gas, in our current environment ... though it's likely that the attractiveness o the Lincoln has deteriorated somewaht in recent months, for that reason.

Sorry to be the bearer of such rather depressing news.

ole joyful

(1. Prior to editing, I had left the "r" out of "friend"!)

o j


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RE: trying to help a friend

Do your friends have equity in their home? If so, could they sell it?

If not:

Can they move in with family/friends and rent out their home? Or perhaps they could take in a tenant to help with living expenses? Then once the husband is well enough, the wife could return to work and they could save the 5k needed to refinance? For that matter, could the wife do some type of work at home now while she cares for her husband?

Getting rid of or taking loans out on their only means of transportation is not a great idea, IMHO.


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RE: trying to help a friend

many people are in the same boat due to their ARM resetting. their mort company should have a dept setup to help folks convert the existing note into a fixed note at a level they can live with. have they talked to their mort co?


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RE: trying to help a friend

With the arms rate it has gone so high and there trying to get a conv. loan. It's almost to the point they owe more then there house is worth. I don't think renting it is going to help because they couldn't get the amount of rent as what there payments are. Have no close family members.She has always worked in factorys, she was married at sixteen and has no formal training or diploma. It's to the point now, you even have to have a diploma to get into a factory. they did find out the mortgage company will convert to fixed rate but won't lower there payments until the 5000 is paid. Don't know where that amount comes from but it is what the letter states. They did put up a for sale sign and the house is really nice but so far no lookers. There's hundreds of houses for sale in our county.
there going to struggle and struggle and end up losing it in the end. I really feel for all these people out there but we see it on tv everyday.


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RE: trying to help a friend

I feel really bad for your friends, too, and I don't even know them. But I wonder why they got an ARM in the first place. I assume they wanted the lower payments so they could invest in the stock market? If so, they should have the 5k to convert their loan. But they don't. So they must have spent the money(ie: lived above their means), not invested it. Didn't they know that the rate on their loan was going to adjust one day making their payments unaffordable? I wonder why they didn't convert to a fixed rate a long time ago - before they suffered so many personal problems.

In the meantime, I'm sure they have neighbors who have been paying the higher costs associated with a fixed rate loan all along because they wanted to build equity (a safety net) and didn't want to deal with risky loan terms. Now the value of their homes and their ability to sell are at stake because some of their neighbors want to "cut deals" or bail on their loans. They are paying the price for something they had absolutely no control over (their neighbor's bad loan arrangements). Is that fair?


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RE: trying to help a friend

If they sell the car and buy a cheaper one, "there afraid they would be buying into problems"
Don't they ALREADY have a PROBLEM - losing their house????
Is this for real that anyone would be reluctant to sell a possession (car) that would provide enough cash to fund the conversion to a fixed loan that would save the roof over their heads? You ask what is available to help them? Counseling (financial or psychotherapy) to help them rethink their priorities. Apparently they have the means to manage their immediate problem. Realistically, the car represents a luxury beyond their means right now. By disposing of the car, they could likely afford to buy a late model used basic reliable car, like a Toyota Corolla, etc., and have enough $ left to fund the fixed conversion, and bank the rest for emergency reserve.
Busymom, I hear you. I have struggled and done without a LOT that many would consider 'necessities' today - cell phone, cable, etc., because I made what I considered to be the only possible and logical decision/choice to select the more expensive (in the moment) fixed rate when I bought my small, basic house in an affordable (i.e. less desirable)zipcode. Choices deliberately made to position me for maximum stability in my future. It does frustrate me that the people who opted for living essentially beyond their means, and maybe using that lower temporary rate to fund their lifestyle, now may get the goverment to bail them out while other taxpayers are STILL GOING WITHOUT in order to pay our own taxes and mortgage, etc., I realize some people were victimized, but I also personally know people who made choices that put their futures at risk because they wanted instant gratification. One couple I know of chose an ARM despite warnings, because they wanted to be able to have all new furniture (and the fancy car) - now they are in serious trouble. Another wanted the fanciest zipcode, maxed themselves out, and now with their two children are facing foreclosure. They also are still holding onto their luxury car (and large plasma TV and houseful of furniture....) OP, I hope your friends, who have had a lot of really tough and unfortunate breaks, are able to let go of the idea of owning a really nice car, and set realistic goals that will better serve them. -Penny


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RE: trying to help a friend

Very good thoughts, Penny.

I don't want these folks to sell their car because right now they have a way to get to work. If they sell their vehicle and buy a lemon (and given the "luck" they have, I'm sure that will be the case) they will then have no transportation. They will be unable to get to their jobs even when the husband has his health back. And you can just see how this story will go from there......

By temporarily taking in some tenants and doing some work from home (even if its stuffing envelopes or making calls for Salvation Army donations) they can add to the husband's retirement income (I assume this is Social Security income?). It'll be tough, but they should be able to keep things going until they can both get jobs to bring in more money for a refinance - as they so desperately want to do.

My Grandma always said: When there's a will, there's a way.


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RE: trying to help a friend

Just a little help for future posts

Here is a link that might be useful: There, their and they're


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RE: trying to help a friend

These people have not lived beyond there means in any way.
His factory closed filed bankrupt and left everyone with nothing. This same factory had there own insurance, when company went so did insurance. When the medical problems started they had no insurance. They had been paying all medical bills out of what they had saved over the years. Everything started rolling down hill and has continued from there. These people have never bought anything knew, everything they have ever owned had belong to someone else first. I think there tv is a seventeen inch. So no they don't live with luxury's like someone stated. The person that bought the car originally didn't give much for the car to start with and when shortly after he got it he found he was dying of cancer he gave it to these people.
if it was because of something they had done i wouldn't feel so bad for them.


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RE: trying to help a friend

Did the wife's company offer health benefits? If so, the couple should have been able to transfer over to her insurance after the husband retired. Also, you state that the wife "lost" her job because she began taking a lot of time off of work to care for her sick husband. But, I believe the Famly and Medical Leave Act (FMLA) should have allowed her to take off work (without pay) to care for her husband. She may be entitled to return to her former position. She needs to get in touch with the HR person at her former company ASAP.

If the wife could return to work, maybe the couple could then have a nurse's aide move in with them to help care for the husband in exchange for room and board. At least until the husband is able to return to work.


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RE: trying to help a friend

I'm sorry, I didn't mean to imply that your friends have spent their way into their current problem. My overall tone reflected my frustration with those who have been irresponsible, like the couples I mentioned. What I meant by saying about your friends that "the car represents a luxury beyond their means right now" is not that I think they have been living in the lap of luxury, but that right now with times so tough for them, they really can't afford a luxury car. Not when they desperately need $5,000. to save their house. I stand by my recommendation to sell the fancy car and replace it with a reliable economy car. No bells or whistles. They may even be able to obtain a brand new basic model and get the money they need to save the home, and maybe even have enough left to pay the excise taxes, etc. (but a late model from a reliable dealer would provide them with a bigger cushion for emergencies.) - Penny.


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RE: trying to help a friend

If they can sell the car & get anywhere close to $20,000, that would be a good move; but they should have an idea what they will replace it with 1st. Many cars that are much less expensive are very reliable, even as they age. If you can look at a consumer's reports car issue (try the library) & look at the used car ratings--that shows which models have problems & with what. I have had very good luck with Toyotas and Mazda, kept always 9-11 years, always the basic models, & never any major repairs. Currently have a 9 year old Protege which has been absolutely reliable even after being in an accident. Bought it 1 year used with higher miles (former rental car) & paid only $8,500 (new was $14,000). Hope this helps.


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RE: trying to help a friend

Raee - my 1990 (first year out) Protege lasted me 14+ yrs (and was still running). I then went thru 2 used Cavaliers in 3 yrs, using the second to trade for my new Honda Fit, which I love madly (and also reminds me of the Mazda). There are some great little cars out there, but I do agree that $20,000 is not far off what a new one would cost and the old car may be the better deal in the long run.


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