The Congressional Budget Office (CBO) has estimated the effects of the five-week partial shutdown of the government that started on December 22, 2018, and ended on January 25, 20191. This report presents CBO’s findings, which include the following:
- CBO estimates that the five-week shutdown delayed approximately $18 billion in federal discretionary spending for compensation and purchases of goods and services and suspended some federal services.
- As a result of reduced economic activity, CBO estimates, real (that is, inflation-adjusted) gross domestic product (GDP) in the fourth quarter of 2018 was reduced by $3 billion (in 2019 dollars) in relation to what it would have been otherwise. (Such references are in calendar years or quarters unless this report specifies otherwise.) In the first quarter of 2019, the level of real GDP is estimated to be $8 billion lower than it would have been—an effect reflecting both the five-week partial shutdown and the resumption in economic activity once funding resumed.
- Underlying those effects on the overall economy are much more significant effects on individual businesses and workers. Among those who experienced the largest and most direct negative effects are federal workers who faced delayed compensation and private-sector entities that lost business. Some of those private-sector entities will never recoup that lost income.
A report by the U.S. Census in 20142 states that Asian households had the highest median income in 2014 ($74,297). The median income for non-Hispanic White households was $60,256, and for Black households, it was $35,398. For Hispanic households, the median income was $42,491.
Black Households have less Income in 2014 than in 2000
The above mentioned U.S. Census report states that the real median income of Asian households in 2014 was not statistically different from the pre-2001- recession peak. Whereas, household income in 2014 was 4.0 percent lower for non-Hispanic Whites (from $62,762 in 1999), 13.2 percent lower for Blacks (from $40,783 in 2000),
Can You deal with Unexpected Expenses? 3 Disturbing Facts.
Jay Harold found a May 2018 Report3 on the Economic Well-Being of U.S. Households in 2017 from the U. S. Federal Reserve. The report states that:
- Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money
. - Over one-fifth of adults are not able to pay all of their current month’s bills in full.
- Over one-fourth of adults skipped necessary medical care in 2017 due to being unable to afford the cost.
Fortunately, The U.S. government has provided some very useful information about the avoiding home foreclosure.
Avoiding Foreclosure4
Foreclosure is a situation in which a homeowner is unable to make mortgage payments as required, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract.
Step one: communicate with your lender
As soon as you realize that you are going to have trouble making your mortgage payments, contact your lender and tell them about your financial difficulties. This gives them the opportunity to work with you to create a plan. Do not stop paying your bills, and do not wait until you cannot make payments before you act. Though you may feel scared or embarrassed, immediately begin working with your lender to avoid foreclosure on your home. Learn more about how to talk to your lender about trouble making payments.
Step two: work with the MHA program
You can get help through the Making Home Affordable (MHA) program, which provides free counselors for advice and assistance with keeping you in your home or getting out safely. Visit the MHA website to read about the options and what you’ll need to prepare.
MHA has a hotline you can call anytime: 1-888-995-HOPE (1-888-995-4673) and TTY users should call 1-877-304-9709. You can also find a counselor in your area.
Your state’s housing agency might have a foreclosure avoidance program as well.
If you have an FHA loan, call the FHA National Servicing Center at 1-877-622-8525.
Beware of mortgage relief scams. One sign of a scam is when they ask for a fee in advance. Learn how to spot housing scams and report housing scams.
Foreclosure Scams
Scammers sometimes contact homeowners who are having trouble making their mortgage payments to offer them “help.” Criminals like this promise to help you keep your home or sell your home without having to go into foreclosure, for a fee — but they’re just out to take your money, not help you.
These scam operators find potential victims in several ways:
- Advertising online and in local publications
- Distributing flyers
- Contacting people whose homes appear in the foreclosure notices (they can easily find these notices online or in a local newspaper)
- Targeting specific religious or ethnic groups
Report Foreclosure Scams
- File a complaint by contacting the Federal Trade Commission (FTC).
- If the scam involves bankruptcy, contact a local U.S Trustee office.
How to Protect Yourself
Get reliable foreclosure help and counseling through the government’s Making Home Affordable program or find a government certified housing counselor near you. Read more about foreclosure scams (PDF, Download Adobe Reader) and find numbers to call for assistance.
Do
Be aware of these tricks that scammers use:
- Offering to negotiate with your lender or act as an intermediary between you and your mortgage lender to refinance your loan
- Advising you that they can stop foreclosure by ”helping” you file for bankruptcy.
- Encouraging you to sign fake foreclosure rescue or mortgage documents
- Claiming that they can perform a forensic mortgage loan audit to help you hold onto your home
- Offering you fake legal help
- Learn about your legitimate government-approved mortgage and foreclosure help options.
Don’t
- Don’t send mortgage payments to any company that is not your loan servicer.
- Don’t sign any documents without having them reviewed by a lawyer or independent expert.
- Don’t stop making mortgage payments.
- Don’t forget that real help from the government is always free.
- Don’t give anyone your personal information, Social Security number, or bank information without confirming their identity and that they represent a legitimate company.
- Don’t fall for rent-to-buy schemes or other mortgage fraud schemes.
After a Foreclosure
After a foreclosure, the road to recovery can be challenging, but there are steps you can take to get yourself and your family moving forward to new housing, revitalizing your credit, and buying another home in the future.
Your immediate need is finding a new place to live. Reach out to the U.S. Department of Housing and Urban Development’s Office of Housing Counseling. Local HUD-approved counselors can help you work through your housing options. Your other immediate need is your children. If you’re staying in a new area, get them enrolled in school as soon as possible. And check your city or state department of social services if you need additional support such as SNAP benefits (food stamps).
Moving forward both financially and emotionally will take time. To help you organize those next steps, use
- The Starting Over After Foreclosure Toolkit – These handouts and worksheets will help you learn to manage stress, consider housing options, and explain money to kids.
- A Resource Guide for Foreclosure Recovery (PDF, Download Adobe Reader) – Learn ways to gracefully exit home ownership, how foreclosure affects your taxes, how to avoid rental scams, and ways you can rebuild your credit.
Mortgage Refinancing
Refinancing your mortgage allows you to pay off your existing mortgage and take out a new mortgage on new terms. You may want to refinance your mortgage to take advantage of
lower interest rates, to change your type of mortgage, or for other reasons. These resources will help you learn more about refinancing your mortgage:
- A Consumer’s Guide to Mortgage Refinancings is your first place to look for an introduction to mortgage refinancing, including useful worksheets, a glossary of terms used in the industry, and more to help you decide if mortgage refinancing is right for you.
- What type of mortgage should you choose? Get information about mortgage types and the settlement process in Buying Your Home: Settlement Costs Booklet (PDF, Download Adobe Reader).
- Veterans may be eligible for refinancing their VA mortgage using Interest Rate Reduction Refinancing Loans (IRRRL).
Making Home Affordable Program
- The Making Home Affordable Program offered opportunities to modify or refinance your mortgages, but as of December 30, 2016, no new requests for assistance under any MHA program will be accepted.
- However, the MHA program still offers free counseling and help for homeowners who are having difficulty communicating with mortgage companies or lenders about their needs for mortgage relief. Learn more about counseling or call 888-995-HOPE (4673).
- The Home Affordable Foreclosure Alternatives Program (PDF, Download Adobe Reader) (HAFA) is an alternative solution for homeowners who are interested in a short sale or deed-in-lieu to avoid foreclosure.
Is there anything else I need to know?
- Federal Reserve rules require mortgage companies to notify homeowners when their loans are transferred to another company. The company that takes over your loan must send you a notice within 30 days of acquiring it. Even with a new loan owner, the company that “services” or handles your loan might not change and you might continue to send your payments to the same address. If that loan servicer changes, you will receive a separate notice.
- For more information about servicing companies, read the Federal Trade Commission’s publication “Mortgage Servicing: Making Sure Your Payments Count.”
Independent Foreclosure Review
The Independent Foreclosure Review was established to determine whether eligible homeowners suffered financial injury because of errors or other problems during their home foreclosure process between January 1, 2009, and December 31, 2010. This program has ended.
- Potentially eligible homeowners received letters from mortgage servicers, which included a Request for Review form, by December 31, 2012.
- As of October 10, 2014, $3.4 billion in checks were distributed as part of the Independent Foreclosure Review Payment Agreement and have been cashed or deposited.
- The deadline for borrowers to have a check reissued in the name on the record was August 21, 2015.
- All redistribution checks sent to consumers expired on December 31, 2016.
Learn more about the Independent Foreclosure Review.
- Housing Get information and services to help with finding and keeping a home.
- Money and Credit Learn about taxes, money the government may owe you, investing, credit help, and more.
Jay Harold provides relevant and practical knowledge for your life, your health, and your wealth. ”This post, “I’m Catching Hell: Foreclosure” is part of that effort to make you a more knowledgeable financial person. Please Share it and read more about Jay Harold here. Please take this advice from Muhammad Ali and give back to others. “Service to others is the rent you pay for your room here on earth.
