Q: We lost our home. We were orginally with Chase, who sold our mortgage to EMC, who changed the due date and used all of the telephone tactics and refused to allow us to pay late without the enormous late fees, so that the fees kept escalating. We received a settlement check of $3.00 or so from a class action against EMC. This is all very bad. Our credit rating was messed up by EMC as well. Will anything ever be done for those of us who lost our credt ratingings due to these mortgage firms? We lost all of our savings when we lost our home. Are the regulators aware that Chase sold mortages to EMC?

Submitted by Connie Van Brunt from Charlotte, NC

A: Sorry to hear you tough story, take comfort in that you are not alone and many others suffered similarly. Time is going to be the best scrubber of your credit record. there are some small steps you can take. As to regulators being aware, yes. the game was bad underwriters and originators sold the loans to investment banks who pooled the loans to sell to unsuspecting investors with a triple A rating that didnt reflect reality. Every step along the way the incentive was there to do the wrong thing, every profited off the transaction... hence the cynical joke that a rolling loan gathered no loss. And that is in a nutshell what brought the global credit system to its knees. You are an afterthought to this faceless system, all the bankers made their kills, most of the investors got their outsized return and you and your hardship are the lasting byproduct. You have every reason to be angry, the system failed you miserably. As my grandmother always reminded, time cures all that ails.. best of luck.

Answered 10/09/09 12:22:54 by Kevin Hall and Tony Pugh

Q: If BoA says it is helping people, why did they tell me to fall behind by 2 months and then recall them, and then when I did they tell me I have to pay up 2 months in the rear plus charges. My wife lost her job, I am out on disablity and BoA is making us jump through hoops, canceling our application midway through the waiting period without telling us. I found out when i called to find out status of Government Home affordable program, to date still waiting, and both first and second time application was done with a HUD representitive, which took her over an hour to get a human on the phone to tell us what documentation we needed

Submitted by Thomas Comparetta from Forest VA

A: Welcome to the reality of mortgage modification. my advice is expect the worse, plan for it and be happy when it doesnt happen. you are going to spend a lot of wasted time on the phone, work with a lot of brain-dead phone reps who dont know blank from shinola and you have to outlast them, ask for a supervisor when you are not getting help. hang up and call again hoping for a better phone rep. remember that servicers are glorified bill collectors and are not yet equipped to handle mortgage modifications, expect htem to lose your documents, keep copies of everything you fax, send certified mail when possible and document or log every phone call with the rep you spoke with on what date, what they instructed etc. you can beat them but it takes time and patience

Answered 10/09/09 12:18:38 by Kevin Hall and Tony Pugh

Q: I have hired a lawyer-backed financial company to try to push through a loan modification on my home in Ojai. The house is now worth about 40% less than what I paid for it in 2006 and the equity of 200 thousands dollars is gone. I am trying for a modification in the overall value of the house and a lower interest rate (I presently pay 6.5% interest). The loan is with Bank of America. Presuming that this is a legitimate Lawyer backed firm, what percentage of homeowners like me are having success with such modifications. I have a steady salary and up to the point when I decided to stop paying the mortgage two months ago, I had an impeccable credit history.

Submitted by Christina Pages from Ojai, California

A: I think up until now the percentages of success have been low, but the Obama program has a number of incentives for steep haircuts for lenders and may create some momentum. the problem to date is that servicers, who represent the investors who own bonds back by pools of mortgages, have been unwilling to take steep losses. The Obama plan has tried to give them some subsidy to take the steep losses, which they would likely take under a foreclousre any way. BofA is under govt life support still, so it is under presssure to work out more of these distressed mortgages. there are some reasons to be hopeful, but to be frank the track record to date has not been great.

Answered 10/09/09 12:16:08 by Kevin Hall and Tony Pugh

Q: Our grandchild, who has a very low income, is facing a foreclosure by their mortgage service company. We (their mother & I) suspect fraud. Where can they obtain help and legal consel? Thank you

Submitted by Tony Purcell from Foresthill, CA 95631

A: There are a number of options, but you have to watch out because there are plenty of lawyers who are out to make a quick buck too at the expense of your grandson. I'd start with your state housing agency, research a bit online with keywords like foreclosure prevent and your local town, county or region. I've recommended local non profits in the past but have found many to simply be overwhelmed and not as responsive as you'd like. bankruptcy is an option that doesnt always save the house but puts off foreclosre and in some cases servicers are willing to bargain seeing that the home could be tied up in legal proceedings. That of course is a legal strategy with all kinds of consequences on credit ratings etc so not a decision you make lightly. send me your number via my work email khall@mcclatchydc.com and I will ring you to discuss further.

Answered 10/09/09 12:13:02 by Kevin Hall and Tony Pugh

Q: After reading your article some of the senarios could have been written about my situation. My mortgage service has strung me on for 10 months in dealing with a possible mortgage modification to avoid foreclosure. Every time they need info I complied and each and every time that had invalid excuses not to proceed with modification. The last time I was given an extension until the 25th of September to send the servicer once again, all documentation and hardship letter. On the 24th of September, I received a letter dated the 18th saying they could not continue with the modification. This would have been the day before the 10 months when we could have requested the foreclosure be overturned. My contention is they led us and delayed to this point. When I called the servicer they stated I should start the process again. Today, my 65th birthday, October 6, I received a court letter that a sale had been scheduled two weeks before Christmas. Upon calling my servicer who was once again in receipt of new documentation initially told me they did not have everything to be sent to a negotiator admitted they did and said not I would be under a protective net and they could stop the sale but not until a week before while under negotiation. My question, what do you think might happen if I file a complaint with the banking commission and who else can I go to in order to stop the madness and not loose our home at 65 and 67 years old. We have the income to make reasonable, sustainable monthly payments but have not trust in the servicer to live up to the statement "You have to trust us". I need help, please. Thank you.

Submitted by Marcia from Loughman, Fl

A: I feel your pain, been on the phone on behalf of the borrowers and been strung out in the same way, one still active file is now seven months and counting. the good news is you can outlast them but you have to be organized, keep a running log of conversations, dates, which phone rep said what and build a case against them so they cant wiggle out. A lot depends on who your servicer is, which you didnt mention. If they are an institution that received big chunks of govt money, they are required to play ball, even if enforcement is spotty. if not, it is a bit more of a challenge although i have seen loans reworked by companies not taking part in the Obama plan. Outlast them!

Answered 10/09/09 12:08:53 by Kevin Hall and Tony Pugh

Q: Can a home owner in trouble ask for a partial claim and a home modification at the same time? With Bank of America as the mortgage holder, can they handle both for us? Who do we contact at Bank of America to make sure we are getting the right info? Thanks. Your article was very helpful. Nancy

Submitted by Nancy Marshall from Walled Lake Michigan

A: Not sure I understand what you mean by a partial claim, answer back with more detail and I can try to take a shot at it. As for who to talk with, you'll have to start with the mortgage servicing arm and they should send you forms to determine if you qualify for help. since taxpayers own a big chunk of BofA, they are supposed to be more responsive, not saying that they are. from there you will probably end up at the loss mitigation department. Assume that they wont be acting in good faith but are interested in being a positive statistic in the govt program. Write everything down, hold their feet to the fire, tape it if you can. They are and they are debt collectors, so they are interested in their bottom line, not you, so don't think that they are out to do you any favors, stay on top of them.

Answered 10/09/09 12:06:11 by Kevin Hall and Tony Pugh

Q: Is there any appeals process or recourse available when the mortgage company denies the home mortgage modification request? And if so, what is it? GMAC said we didn't qualify for the Obama program (though without explanation as to why) but graciously agreed to reduce our payments by $24 a month (while also extending our mortgage out for several more years of course!). How ludicrous! How could anyone believe that a reduction of $24 a month could actually help someone avoid foreclosure? Plus they have all of my financials, it is easy math to see that I can NOT afford their reworked mortgage plan... yet still they had a notary public calling me to set up a time to sign the documents as soon as possible! Isn't that the kind of behavior that helped create this mess in the first place (encouraging people to sign on for mortgages that they obviously can't afford)? Help!

Submitted by kathleen morris from albany NY

A: Yes it is the same kind of behavior... as for appeals process, ask them why you didnt qualify, was it income? usually they require pay stubs, bills etc. I've had one servicer rep tell the person I was aiding that they didnt need a cell phone. She had a three year old in daycare but didnt need a cell phone, it was a luxury. some of them say if you have $200 of income left at end of month, you dont get a mod etc.. there is little standardization. keep fighting them, write everything down, keep a log, tape the conversation if you can and share iwth the Obama Treasury team working on housing program, called HUD and dont give up. you can win this, but it is a battle.

Answered 10/09/09 12:03:13 by Kevin Hall and Tony Pugh

Q: Has any of the stimulus money that is being given away by our current and previous president, been taken from Social Security. It seems that for years we were being told that Social Security was to be a supplement to whatever we saved as employees. Now that I have reached retirement age, I am being told that Social Security might go out of existence within two to eight years. What gives? Do our politcians think that we don't know what thieves they really are? Do they actually think that can continue to pull the wool over our eyes and that we will just calmly walk away? What, if any money that has been taken out of the Social Security Fund, will ever be returned to the fund of those who have worked hard to get the money they contributed for forty, fifty years? Can you give the general public any idea of whether the Congress of the United States can be sued in a class-action lawsuit?

Submitted by richard colonel from Fort Worth, Texas

A: First a clarification, I think the current and past presidents would consider the stimulus an investment to prevent the economic crisis from being even worse than it was and resulting in even less revenue coming in and an even wider deficit and debt problem. That said, does it come out of Social Security? Yes and no. There is a Social Security trust fund, and there is no lock box, so there a lot of IOUs in that trust fund, so in that sense all deficit spending for the two wars, the stimulus, bank bailout and other govt programs are technically money taken from Social Security. But Social Security isn't large enough to fund all that, so its just one of several funds that are robbed for cash flow and left with IOUs... As far as pulling the wool over the eyes of the taxpayers, it's been going on for at least 30 years, so I guess the answer is yes, they think so and have done so.

Answered 10/01/09 12:27:26 by Kevin Hall and Tony Pugh

Q: How much money has the president, and his family spent so far on the inaugular, personal maids, vacations and personal trips??

Submitted by earthwat from Florida

A: Much of the inauguration spending came from donations, as is the tradition. Maids etc are part of the staff. Vacations come with the job, and Obama has stayed close to home and not gone off to Hawaii, which would be more expensive and is "home" of sorts. Personal trips? Not sure what you are referring to, the trip to Copenhagen to lobby for the Olympics, think that pretty much is of national interest, job creation, intl stature etc. Obama hasnt had a lot of down time compared to the previous president, who broke records for vacationing, or past presidents Dem and GOP alike. He's kind of like Carter, wonkish technocrat workaholic.

Answered 10/01/09 12:24:03 by Kevin Hall and Tony Pugh

Q: Why are we not seeing more of the wall street people headed for jail?

Submitted by Gary Murphy from Kansas, Oklahoma

A: Sadly, because a lot of what happened was unsavory but not necessarily illegal. There are lots of civil lawsuits targeting the bad actors and bad companies, but criminal cases involving financial crime are large and complex. One would think given email records, there should be plenty of smoking guns out there, the few cases that are under way all have some pretty damning emails that suggest the players involved knew how bad the market conditions were but didn't disclose it to investors. There was a noted disinterest in the previous administration in pursuing bad actors since it reflected on the administration. To date, the current administration has only gone after the low hanging fruit.

Answered 10/01/09 12:17:46 by Kevin Hall and Tony Pugh

Q: Question on Health Care Reform Bill, I understand they are going to force everyone to have health insurance (or fine them) and if someone cannot afford it they will give it to them and then go after there assets. Some say it's the same as forcing one to have car insurance but, that's not so if you cannot afford car insurance THEY DON'T COME TAKE YOUR CAR. My question is : if i lose my job and can't fined one for some time (due to unemployment condition) they make me take insurance (that i may not even have to use) and the goverment pays for it CAN THEY TAKE MY ASSETS? If so then the goverment would take what was mine and they would then own it and would'nt that happen to a lot of people?

Submitted by Ken Lott from Lakeland FL.

A: If you dont have a job, and can't find one, there are provisions for people in that situation. You wont be forced to pay for something if you dont have income. You arent now either, sort of. Medicaid covers some people in this category but clearly not everyone. Other countries do have mandatory insurance and pool premium payments into funds that pay for insurance for the unemployed. There are ways to do this, its done in many places.

Answered 10/01/09 12:14:59 by Kevin Hall and Tony Pugh

Q: How about a health insurance COP I have lived half of my life behind the ,,wall'' and more than half to the system that all the world dreamed of ..I have seen a decline in personal and bussn. rights over the years in this country and some times i wonder is this a ,,Deja Vu ''? I am just about to go out of bussn , the banks got all the money from the GOV [ WE THE PEOPLE ] but they are not giving equity loans [ even with pefect score ] to the mom and pops, that employ many workers..Can you explain please ?..Where this country is going ? LEFT ? Since most of the world is going Right ?..Maybe that what makes this country the best in the world ,, different '' ITS THAT TRUE ? What you think ? Thanks..

Submitted by K. Vretas from tampa - Fl

A: I wouldnt say the country is necessarily going left or right. We are going through a terribly traumatic shock to our financial skeletal structure. Banks dont want to lend, in part because a fat balance sheet hides the bad assets on their books that have yet to be dealt with since the Bush administration pivoted away from that in favor of capitalizing the banks and letting them grow out of this problem. I don't think it means much to say the rest of the world is doing this or that, we are the world's largest economy and are in a world of hurt, and reality as we know it is suspended as we try to get out of this mess. I don't think the Federal Reserve wants to lend billions to keep investors buying pools of mortgages or car loans etc, but the alternative is to let these marekts collapse. For mom and pops, the best hope is a strong local community bank that might be willing to lend. The adminstration did create incentives for small business lending, but this isnt exactly the best environment in which to lend, until the unemployment rate starts dropping and growth seems more sustainable. No easy answers in our economic quagmire. It's been, and will be, a long and slow slog.

Answered 10/01/09 12:12:47 by Kevin Hall and Tony Pugh

Q: I'm 56 years old, I lost my husband a few years ago. Now, I lost my job of 10 years. I have no other income right now but employment. Can I get something from my husband's social security?

Submitted by Barbara from Romeoville, IL

A: You are entitled to his benefits assuming you were legally married etc. I'd call your local Social Security office to inquire about survivor benefits, I suspect that they do flow to you but when you reach early retirement age at 62 (with an early withdrawal penalty) or 65 and normal retirement age. I believe if you cannot work because of a disability, these benefits might flow earlier, but I don't know enough to say with certainty. If you have a 401K plan, there are provisions to allow you to withdraw payments in times of emergency but these have tax consequences so you'd want to think it through carefully.

Answered 10/01/09 12:07:39 by Kevin Hall and Tony Pugh

Q: We read a lot about sanctions. How do they exactly work? Iran, Iraq and North Korea were sanctioned. What happens?

Submitted by Dan West from Colorado Springs Colorado

A: There are lots of types of sanctions. Against Iran and North Korea, most financial sanctions have sought to isolate them from the global financial system. State banks have been targeted and any foreign bank that does business with them will run afoul of U.S. law if they that foreign bank happens to have U.S. operations or a U.S. subsidiary. This has made it harder for Iran and NK to do business, whether it is buying a weapons system or investing oil earnings. That said, these sanctions have not been universal, so banks in Russia, China and elsewhere in the Middle East have all stepped in. And European companies continue to supply oil field equipment etc. So the idea is to tarnish the financial entitites of these countries so that few respectable nations are willing to do business with them or run the risk of problems in the much larger, more lucrative U.S. market. Naturally, many countries resent this conditioned access to the U.S. market.

Answered 10/01/09 11:58:02 by Kevin Hall and Tony Pugh

Q: how were Fannie and Freddie permitted to stop purchasing mortgages on new Condo construction by setting unreasonably high % of completion criteria for units under sale contracts in a development. The new home buyer, small builders and and the Savings and Loan institutions that write constrution loans were left high and dry. There were no grandfather rules for Condo projects that were already in progress or the size of any development and it matters not whether a buyer of a new Condo is income qualified. how does this make any sense? It has created enormous problems and actually discriminates against a large segment of the housing market.

Submitted by James R. Mazzeo from Stamford,Ct

A: I dont know the answer to your question but am willing to hazard a guess. I suspect the decisions by Fannie and Freddie were influenced by problems in condo markets far from your neck of the woods, say Florida and Arizona, and you are collateral damage. That's just a guess. Also, I suspect all of Fannie and Freddie's energies as taxpayer supported entities are now being focused on conventional home ownership and condo projects would be on the fringe of that. Again, your question is a level of detail beyond my regular contact with Fannie and Freddie so I taking a swing in the dark at your question.

Answered 09/14/09 19:01:55 by Kevin Hall and Tony Pugh

Q: The limit of the economy's real output at anytime is set by?

Submitted by Maria from Maria

A: A number of factors, not the least of which is the performance of components of GDP, which in turn are influenced by any number of variables.

Answered 09/14/09 18:57:58 by Kevin Hall and Tony Pugh

Q: Hello, My question is one of decently large proportions. I think that a lot of people, don't understand exactly what a deficit is, and how we reach one in the first place. Could you please explain?

Submitted by Devon Hicks from Sweetwater, TN

A: A federal deficit in the simplest of terms is when the government spends more than the revenue it takes in. Any homeowner runs a deficit, because they take out a mortgage, for say $200,000 when they have say $20,000 in savings. As the example points out, deficits in and of themselves are not a bad thing, and when we had a budget surplus in 2000 the question was should be shore up Social Security and other programs with it etc, and the decison was made to spend it. By the time Obama was elected, with two wars under way, the deficit was around $600 billion. It has grown by almost $1 trillion since them thanks to rescue programs by the Bush and Obama administrations. The economic downturn has meant less incoming revenue, wideing the gap between what the govt takes in and what is spends. A broad range of economists believe the current deficit is necessary to step in and provide an economic jolt with private sector lending impaired. It's hard to know what the world would have looked like without it. The Great Depression gives a sense, but the world was much different then. Economists and policymakers will debate for a long time what factors halted last year's slide.

Answered 09/14/09 18:54:20 by Kevin Hall and Tony Pugh

Q: WHAT ARE WE GOING TO DO WHEN ARE UNEMPLOYMENY RUNS OUT AND STILL NO JOBS

Submitted by ALLEN from MEADVILLE PA

A: Congress will soon begin debating extending unemployment insurance benefits again. But sadly, it may be quite a while before we get back to 5 percent unemployment for people in hard hit parts of the country it is going to be a long road back.

Answered 09/14/09 18:46:13 by Kevin Hall and Tony Pugh

Q: Recipients of Social Security will not receive a cost of living raise for 2010, and likely for 2011 also. What can those of us affected, do to try and get this overruled? Many, whose sole income is SS will be greatly affected . Thank you

Submitted by Richard Ward from Kirkwood Mo. 63122

A: Write your congressmen. The COLA rules were adopted with the mindset that inflation erodes the spending power of the dollar. So when inflation is tame and actually below normal, like now, there is not an adjustment. Unfortunately when inflation is going backwards, there is an economic disruption afoot, and the COLA rules (cost of living adjustments) don't envision that. Indeed your dollar is buying you more. But after several years of it buying you less, I suspect you rightly feel that you are still playing catch up.

Answered 09/14/09 18:45:17 by Kevin Hall and Tony Pugh

Q: There was a movie entitled "Wag the Dog", and unfortunately, I am questioning, just how much is the American public, and the WORLD at large, being PLAYED ? In the 1970's, I attended a seminar about the economy, where I first heard the term "New World Order". My wife and I discussed the sessions, and felt that it sounded like the old John Birch Society, and passed off the session as a wasted evening. The next time I heard the term "New World Order", it was from the lips of then President, Ronald Reagan. Now, it is becoming almost commonplace. Question: Are "We the people", being led down the proverbial "Yellow Brick Road" ??? I would like an answer from someone with more education and worldly experience than I have. I am retired Navy and Vietnam Veteran, and would like to know where this country, and the world, are headed. Thank you and Mahalo

Submitted by David Anderson from Pukalani, HI

A: You and me both. Anyone with kids worries about the future and there is plenty to worry about. But the reference to new world order I think came in a headline that I didnt write. For sure, there is a new order emerging, the world is not static but dynamic so there always is, but from globalization to rise in China to aging U.S and Europe to a Middle East wanting to either modernize or return to dark ages, clearly we are in a dynamic time where a lot of things are changing around the globe. That's scary, but in a sense it is what it is, policies slow or accelerate this shift, but changes seem to have a way of coming whether you want them or not.

Answered 09/14/09 18:41:52 by Kevin Hall and Tony Pugh