Clark Howard Show Notes – July 21, 2010

On Today’s Clark Howard Show – How to Profit From Foreclosure, Housing Tumbles, Should Your Credit Reflect a Loan Modification, and Back to School Shopping

How To Profit From Foreclosures and Other Real Estate Investments

The ticket window is open for our latest event: How To Profit From Foreclosures and Other Real Estate Investments which will be held on October 2, 2010 at the
Renaissance Waverly.

The EARLY BIRD ticket price is now available – but it won’t be here for long. Right now, you can buy a ticket at the early bird price of $35. There are no other discounts. This is the lowest price you’ll pay for a ticket to this event. After the early bird window closes, the price for these tickets will go up.

Wondering if it’s worthwhile to attend the event? Wondering if you’ll get your money’s worth. Here’s what past attendees say about ThinkGlink/RealWorldSeminars events.

Should your credit score drop when you go into a loan modification program?

Last week, U.S. Rep. Jackie Speier (D-SF) introduced a bill that would reduce the negative effect a loan modification has on a homeowners’ credit score. The credit industry doesn’t like it. They think that one’s credit history should accurately reflect the mismanagement of credit, and the credit score should reflect accurately someone’s credit history. After all, if the credit score doesn’t accurately reflect one’s credit history, then how will it predict risk accurately?

Interesting question, since credit scores didn’t accurately predict what would happen to homeowners who overextended themselves, then lost their jobs or took a drastic reduction in income, and stopped paying their bills.

Is this a good idea? And, what happens to the credit scores of those who have worked hard and managed to keep paying their bills? What’s fair here?

Housing market stumbles, increasing the odds of a double-dip recession

New construction has slowed and now housing inventories are on the rise. What’s causing the glut this time? Banks are increasingly foreclosing on properties, turning them around and putting them on the market. FHA is doing the same thing, increasing the number of HUD homes for sale. And, sellers who have been stymied and waiting to sell, have rushed in at the first sign of good news (before the home buyer tax credits went away), pushing up the total number of homes for sale. All this is serving to put pressure on housing prices.

Meanwhile, the job market hasn’t improved, and consumer confidence is falling.

Three years ago, when the housing market went into a tumble, it dragged down the whole economy. Now, the economy is pulling down the housing market further, said economist Patrick Newport in today’s Wall Street Journal.

What’s happening in your neighborhood?

HAMP Foreclosure-Prevention Program Still Isn’t Working

Although the Federal Government said that 4 million homeowners would be helped by the HAMP loan modification program, the numbers just aren’t adding up. More than 91,000 homeowners canceled their government loan modification programs in June, while just 38,728 received new modifications, according to Tuesday’s numbers. Almost 535,000 of 1.3 million total loan modifications have been canceled.

The good news? Half of those who canceled their trial loan modifications were granted loan relief of some sort from their lenders. But for those who have had their loans permanently modified, more than half redefault.

Rah called and feels she has been bamboozled by the HAMP program. I told her to call the Hope for Homeowners hotline: 888-995-HOPE. If you’re not happy with the trial loan modification you’re offered, you don’t have to take it. You can reapply. If you don’t like the answer you get from your lender regarding a permanent loan modification, you can appeal the decision to the OCC, which will force the lender to take another look.

Here’s the link to the OCC Complaint Page at

For more ideas about how to save your home from foreclosure, check out my post: Loan Modification Hell: New Strategies To Avoid Losing Your Home.

Free Books and Ebooks from THINKGLINK

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How much will you spend on back-to-school items this year?

Last year, most parents just made do with old backpacks and whatever school supplies they could scrounge together. We didn’t spend much on our two boys. We had a lot of supplies left over from prior years.

We’re going to toe the line this year on spending for back-to-school supplies, buying only what is absolutely necessary. But, that “absolutely necessary” list included two very expensive calculators for our son’s math classes. But we have plenty of folders, paper, pens and markers. We also bought great new backpacks at Costco this week for $15 each. I saw the same backpacks at Macy’s with a retail price of $100, but “on sale” for $25. Still, that’s $10 more per backpack than I paid.

A new survey says that parents have to replace clothing (boy, do those kids grow!), backpacks and supplies. The National Retail Federation says the average family will spend $606.40 on clothing, shoes, supplies and electronics, for kids in K-12. That’s up 10.5% from last year. The International Council of Shopping Centers said parents would spend 5.4 percent more this year.

What will you spend this year for back-to-school supplies?

Use Twitter for Better Customer Service

Aaron called the show to say he was having trouble with Dish Network. He’s been billed $604 for service he hasn’t used and equipment the company was supposed to pick up and never did. He called for help. I told him to contact DishNetwork on Twitter.

To prove the rule, at :24 minutes past the hour, I tweeted that one of our callers was having problems. Just 48 minutes later, @dishnetwork tweeted that we should have consumers contact them directly thru Twitter and they’d get help.

This works, folks. Try it out.