Thursday, January 19, 2012

Would a Foreclosures-to-Rentals Program Benefit Only the 1%?

On December 27, 2011, John Gittelsohn, of Bloomberg News, reported that the Federal Housing Finance Agency (the regulator and conservator of Fannie Mae and Freddie Mac and the regulator of the nation’s twelve Federal Home Loan Banks) had issued an RFP for ideas related to turning a portion of their expansive inventory of repossessed homes into rental units. The government’s strategy seeks to “reduce losses, stabilize neighborhoods and support housing values.” *

Among the four hundred-plus “valid” proposals received were submissions from the same financial and investment companies that played a part in the housing bubble and collapse, including Deutsche Bank AG, Fortress Investment Group LLC, Carrington Holding Co., Barclays Capital Inc., and UBS AG. With more than 6 million homes expected to be repossessed by banks by 2016, with Fannie Mae and Freddie Mac servicing more than half of all US home mortgages and with the demand for rentals far outstripping the demand for home ownership, a foreclosure-to-rental program could have a substantively positive effect on the stabilization of real estate values.

Or, conversely, is it another opportunity for the same investors who sold the American Dream of home ownership down the river to gamble yet again with the national housing market and the U.S. economy? Will turning foreclosures into rentals in bulk benefit Wall Street more than Main Street?

*“Firms Give U.S. Plans to Rent Seized Homes,” by John Gittelsohn, December 27, 2011 12:01 AM ETTue Dec 27 05:01:00 GMT 2011

– Susan H. Tifft, NHS of Baltimore Resource Development Committee

Link to the article here

Tuesday, July 26, 2011

Almost 18? Do you REALLY know the new laws that apply for credit cards?

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

In dealing with growing pains of the teenage years, many children cannot wait until the age of 18. According to them, this is the age where they become officially grown and the sky is the limit, right? Wrong. Yes, at age 18, Americans become eligible to vote, enter the military, serve on a jury and marry without parental consent, in most states. But recent laws have prohibited the milestone of getting a credit card.

What many soon-to-be-18-year-olds don’t know is that President Barack Obama signed into law the Credit Card Accountability, Responsibility and Disclosure Act of 2009. The bill restricts credit card issuers from raising interest rates without warning, penalizing customers who pay on time and levying excessive fees. There's also a provision that specifically concerns young people: Under the new law, no one under age 21 can get a credit card unless a parent, guardian or spouse is willing to co-sign or unless the young adult has proof of sufficient income to cover the credit obligations.

According to Sen. Barbara Mikulski, D-Md., the bill aims to prevent credit card companies from "targeting college kids to weigh them down with debt before they even graduate.” Research shows that this law should have probably been taken into effect years ago. In April, student loan corporation Sallie Mae released a national study that examines the use of credit by undergraduates. The study found that in 2004, 76% of undergrads had at least one credit card. Today, 84% do. The average amount students say they charged to their credit cards to pay for education expenses (such as school supplies) has increased from $942 in 2004 to $2,200 currently. What's more, 82% of undergrads with cards report that they do not pay off their full balances every month, and the median debt among this group is $1,645, compared with $946 in 2004.

Due to the lack of financial literacy steps being taken to educate college students effectively about the pros and cons of credit cards, I think that this policy was long overdue. In Freshmen Seminar classes, they have professors trying to explain the financial advantages and disadvantages of credit cards. Because these professors are not financial experts, students still do not have the proper understanding of credit before they sign up for numerous credit cards. I think all institutions should incorporate a financial literacy course in their curriculums taught by certified advisors. This will save a lot of people’s credit in the long run.

Wednesday, June 22, 2011

Foreclosure Prevention: Be Proactive

By: Rena Somar, Homeownership Advisor, NHS of Baltimore

Why is it important for a borrower to contact a lender and a housing counselor?

Contacting your lender is a necessary component in foreclosure prevention, but it can also be very intimidating. Seeking the assistance of a housing counselor provides assurance that there is a trained professional advocating on your behalf as well as uncovering the options that are available to save your home. Typically, the borrower and the housing counselor will make a conference call to the lender. Once it is determined that there is a course of action available to prevent foreclosure, the lender will send you a modification packet in the mail. Most lenders will encourage you to contact a counseling agency to get credit counseling but beware of foreclosure scams.

There are, however, some agencies that claim that they can get you a modification, but then ask you for a fee for their services. According to U.S. Department of Housing and Urban Development (, “Foreclosure prevention counseling and homeless counseling services are available free of charge through HUD’s housing counseling services. Housing Counseling agencies participating in HUD’s housing counseling program are not permitted to charge consumers for these specific housing counseling services”. To report these scams you can visit Loan Modification Scams Alert at .

Once you’ve contacted a HUD approved counseling agency, a counselor will help you complete the modification packet that the lender sent to you. Completing the packet correctly is very important, especially the budget, because it will determine the type of modification you may receive if your packet is approved. Even though you are working with a counselor, the lender usually will contact you and not the counselor. Therefore, it is very important for you to keep in touch with the counselor and lender if there are any changes in your finances or if you receive any notices from the lender. Once a complete packet is confirmed by the lender, it is then reviewed. This process may take anywhere from 30 to 90 days before a final decision is made on the application. Always remember to call your lender every 2 weeks to get an update and always ask them if there are any documents that they need updated. Foreclosure is a difficult and unpleasant experience, but if you don’t ask for help you may lose your home in a foreclosure sale. So if your mortgage is late, don’t wait, call your lender and a housing counselor today.

Monday, May 23, 2011

Consumers Be Aware!

By: Robert Horton, Loan Officer, NHS of Baltimore

All of us have bills; some people have more than others. Due to unforeseen circumstances, some bills are not paid on time or not at all. This could be a temporary situation or a long term one. Regardless of the length of time, a person will be placed in a collection department of a company or a collection agency. When this is done, there are rights that consumers have.

The specified time for collectors to call is from 8:00 a.m. to 9:00 p.m. If a call is made prior to 8:00 a.m. or after 9:00 p.m., the collector is in violation of the law. The consumer has the right to file a complaint with the FCC (Federal Communications Commission).

A consumer cannot be threatened by a collector in any way. This is a violation of the law. The consumer does not have to listen to any threats from any collector and should report the collector and the company to the FCC.

When a person fails to answer the telephone, a message is left on his or her voicemail most of the time. Some messages are funny, some are serious, some long, and some short. A collector is supposed to leave only his or her name, telephone number, and company name. This is appropriate. If anything else is left, this is a violation because the person that the message was intended for may not be the one who listens to it. Information about the debt heard by another on a voicemail is a violation of privacy laws.

Collectors are not to discuss a consumer’s debt with another person. This is a violation of federal privacy laws. If done by a collector, he or she and the company are in trouble with the federal government and should be reported.
There are more consumer rights, but these are the four most violated by collectors. Consumers must be aware of their rights at all times. If you feel that your consumer rights are being violated, you can contact the FCC to file complaints.

Monday, May 2, 2011

Home Values: How Your Neighbors Can Hurt The Value of Your Home

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

When people think of bad neighbors, they simply think of nuisances who you may have to see as you come and go. What consumers don’t know is that bad neighbors aren’t just annoying, they can cost you real money when it’s time to sell your home.

An overgrown yard, peeling paint, and clutter can easily knock 5-10% off the sale price of your home. If you are looking into buying a property and the neighbor’s yard looks as if the may be a hoarder, you probably should reconsider. If you have already purchased a property and neighbors become a problem later, there are several things you can do:

Approaching your neighbor in a friendly, good manner is always a good start. A nice way to suggest that your neighbors do some maintenance on their property is refer them to free or low-cost services that will help them keep up their property. Habitat for Humanity is one of several organizations that have programs offering exterior painting, landscaping, weather-stripping, and minor repairs to low income home-owners. A lot of local governments offer these programs as well.

When dealing with this kind of issue, it is very important to find out if your sloppy neighbors are tenants or owners of the home. If the person in the home is a tenant, the first thing you should do is track down the owner. A real estate agent can help you do this or you can contact your county’s property-tax assessor’s office. After you identify the owner, a letter needs to be written to them that is complete with photos of the problem and a request in action to solve the problem.

Another resource you can use is a homeowners association. If you have a homeowners association, which most people do, you can request that it take action. Your city or county’s public health department may be able to step in if trash or unsanitary conditions are a part of the problem.

If none of these options work, you can always add features to your property to make up for neighbors problems. Putting up a privacy fence or tall hedge could downplay the issue.

Monday, March 21, 2011

Social Networking and Your Neighborhood

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

It’s no secret that neighborhoods flourish due to the efforts of their residents. In today’s world with people who are very selective about which neighborhoods they will reside in, a simple community clean-up or festival every now and then may not be enough to make people want to live in your community.

When you think of Baltimore city’s ‘eclectic’ neighborhoods, areas like Mt. Vernon, Fells Point, Federal Hill or Canton may come to mind. However, these are not the only places in Baltimore where the good times roll. This is where neighborhoods need to find a medium to share the excitement of their neighborhood with others. ENTER: social networking.

Social networking sites such as Facebook, Twitter, and Foursquare are changing how we operate these days. These sites are great methods to give your neighborhood a way to interact with prospective residents in addition to your current residents.

When considering a neighborhood to live in, people want to know what that neighborhood has to offer. For example, are there certain necessary stores nearby, hangout spots in the area, and people with children want to know if there are things for kids to do.

One of the best ways to let people know about the cool spots in your area is through Foursquare. Foursquare is a location-based social networking site that can be used on smartphones to “check in” at different venues. Foursquare is a great way to make people aware of the attractions in your neighborhood and how popular they are with the residents.

Before moving to a neighborhood, people also want to know a bit of information about the type of residents that already live there. This is an excellent way to make Facebook work for your community. By creating a business page, potential residents can get an insight to what type of people already live in the community and what is going on in the area. How many friends your neighborhood page has on Facebook and Twitter can also give prospective residents an idea of how involved people in the community are.

Hopefully community organizers will realize that people are no longer moving into neighborhoods based on word-of- mouth marketing and befriend the social networking epidemic. With a housing market that is still in an unsure state, when people buy in certain neighborhoods they may not able to sell and move out as quickly as they want to if things get to that point.

Monday, February 28, 2011

The Federal Deficit: How will this affect you?

By: Felix-Torres Colon, Executive Director, NHS of Baltimore

Many Americans consider the Federal deficit to be the most important economic problem of our time. In response to this problem, the House of Representatives has proposed a series of cuts in the housing field that are draconian. We are not taking a position on the need for a balanced budget or the reining in of government spending, but we thought all of you should know what impacts some of these proposed cuts could have on NHS and our community.

Community Development Block Grants (CDBG)

CDBG is a federal program that funds a wide variety of community and economic development programs at the local and state level. The program offers local and state governments a wide latitude of ways to invest these funds. They are used to fund everything from housing counseling to infrastructure improvements. The House has recommended a 63% cut. If passed by the Senate, the NHS would have to lay off over half its staff. We would no longer be able to help families become homeowners, stop foreclosures or lend to clients.

Housing Counseling

The need for fair unbiased information about home buying is greater than ever. The economic crash was driven by bad mortgages to uninformed borrowers. Counseling is one of the proven ways to avoid this event from happening again. The House has zeroed out the counseling budget, this means NHS would have to lay off the majority of counselors. Hundreds for families would no longer be able to get the training they need to make the best decisions for their future.

Home Affordable Modification Program (HAMP)

The House is currently considering ending the program. Although this program is not perfect, it can be fixed. HAMP is currently one of the best tools we have to prevent foreclosures. If HAMP is abolished, hundreds of families in Baltimore will lose their homes.

These are tough times which call for tough decisions, but they have to be smart decisions.

Tuesday, February 22, 2011

Housing: How To Invest Your Tax Return

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

Whether or not you have filed your tax return, how you will spend your tax refund always comes to mind around this time. Investing some money from your tax refund is one of the best ways to spend it. However, before you make the decision to invest your tax return, you should think about how your refund fits into your investment strategy. For homeowners or people looking to become homeowners, this refund could have a long term impact.

One of the biggest things you may want to consider when thinking about investing is your housing fund. In order to receive the best possible interest rate on a house and avoid private mortgage insurance, it is smart to have a good amount of savings for your down payment. Other programs and housing incentives can assist you with your down payment.

Using your tax refund to eliminate current debt is another good investment if you are looking to buy a home. Eliminating debt with the highest interest rate will cost you less money in interest in the long run. With current credit card interest rates usually being 14% at the minimum, paying off your debt is an excellent investment. The higher your credit score, the better deal you will be able to get on a house.

If you are a homeowner, investing in your home may be the best investment that you will ever make. There are many affordable ways of investing your tax refund to increase the value of your home. Upgrades and improvements to the kitchen or bathroom are great ways to maximize a return on the investment of your home. This investment could prevent major problems down the road as your house gets older. Also if for some reason you ever choose to sell your home, you have increased the value of it. Renovations to your home may also be written off on your tax return for the following year.

Another good investment for homeowners is paying down the principal of your mortgage. Contributing additional money to your mortgage will allow you to pay the loan off sooner and you can save thousands of dollars in interest over the life of the loan. Interest rates are currently lower than ever, so if you are eligible to refinance your hope this may be a good option as well.

Although a tax refund cannot change your future by itself, it can have a long-term financial impact. For more ideas on how to invest your tax refund, you may want to opt to take a free financial fitness class.

Wednesday, January 26, 2011

It’s Never Too Early: Kids Can Be Financially Fit Too!

By: Raevyn Jones, Marketing Coordinator, NHS of Baltimore

It should come as no surprise to anyone that there are many benefits to saving money at a young age. Children can use this money to save for college, back-up savings for adulthood, or even to buy their first car. Although saving money is not easy, it may be easier to for children to risk the temptations than adults.

With the current state of our economy, many kids are making the decision to save money at a young age. I believe that as soon as children begin to receive allowance, parents should initiate a savings plan. This plan should consist of long term goals and short term goals.

The first step to saving money is setting a savings goal. This goal will determine how much you save every week or bi-weekly when you receive your allowance. An effective way to determine your savings goal is to figure out how much you want to have by a certain date. For example if you want to save at least $300 a year, your savings goal would be roughly $25 per month.

After the savings goal is initiated, parents should open up a savings account for their child. Because of the lower fees credit unions offer, this may be the better option for a child’s savings account. Credit Unions also serve as the better option because the parents must be with the children if they want to withdraw money.

As an alternative to getting an allowance, teens may want to consider other ways to make money. Some of these options may include babysitting, lawn mowing, selling baked goods, shoveling snow, flyer distribution, selling Avon products, or summer positions with organizations like YouthWorks.

A big help to ensure that children will save money is for parents to be role models to their children. Parents may want to sit down with their kids and discuss with them the benefits of saving. For example, statistics on how much quicker a person can buy a house based off the money they save or being able to travel out of the country. Also, taking a financial fitness course with your teenage child could be a big help. This financial fitness class will teach your kids how to manage money while still living on a budget, most importantly the class is free of charge.

Regardless of how old one is, financial fitness will always be an important factor. The earlier children understand this, the better off they will be in the long run. For more information about Financial Fitness courses, please contact Neighborhood Housing Services of Baltimore.

Tuesday, January 4, 2011


By: Operations Department, NHS of Baltimore

As a new year begins, this is the time to begin thinking of how to be financially savvy and save for your rainy day. Knowing the Ins and Outs to building assets for your family’s future - even your own - is critical during these rough times. As such, participate in a financial fitness workshop to find new and innovative ways to shop, save and invest. But while thinking about your future, stop by our office to get your taxes prepared and to receive information about literacy workshops. At our site, we will offer clients (those making below $49,000) the opportunity to open savings accounts, purchase savings bonds and receive direct deposit of their refund into their accounts. The service is FREE through the Baltimore CASH Campaign!

Now that the new year has started, its time for families and individuals to pull out those well organized receipts and hoarded papers from 2010. While this may be a cumbersome task, at least you will see a benefit from your madness. For those who are not itemizing this year; your process is plain and simple, just present the W2(s) and Social Security Cards for you and your dependents. For incentives this year, there will be the usual Earned Income Credit, Child Tax Credit and Dependant Care Expense. And, Homeowners who have gone through foreclosure will have the opportunity to write off their debts – to include credit cards. This can only happen if your Lender/Creditor has cancelled your debt to which you would have received a letter or statement showing the amount written off. Another incentive is Energy Efficiency; if you purchased and installed an energy efficient furnace, windows, doors, air conditioning units, etc. you may qualify for a credit this year. You MUST have all receipts to document your purchase and installation.

Where there is good news, there is Bad news. First-time homeowners that received an $8000 credit in 2008; now is the time to begin paying back that money. It can be done in installments over a period of time until paid in full. This is a line item on the tax return this year. Sorry; it was not a gift.

In order to get detailed information regarding any of the items mentioned above please visit the IRS website.

NEWS: Interested in knowing how new tax laws affect your bottom line; click here.

Tax Calculator
The calculator is a tool to help you understand how current tax policy affects real families and what would happen if we changed that policy. With this version, you’ll be able to compare three alternative tax policies to see how different taxpayers would make out in either 2010 or 2011:

• 2010 law with all of the 2001-2003 tax cuts and the 2009 stimulus tax provisions still in place;
• 2011 law with scheduled expiration of the 2001-2003 tax cuts (often called the "Bush tax cuts");
• tax law in the compromise plan agreed to by President Obama and congressional Republicans that would extend the 2001-03 tax cuts through 2012 and make other temporary tax changes.

You can also turn the alternative minimum tax (AMT) "patch" on or off to see how raising the exemption affects whether taxpayers must pay the AMT.

Note: The Tax Calculator estimates the impact of proposed tax policies on typical family status.

See you on January 24th for those that are getting taxes prepared at our site!

Tax Prep Office hours: 10-3p.m. Monday – Friday; 10-1p.m. Saturdays (January 29th – March 5th).