Tuesday, March 23, 2010
Thursday, March 18, 2010
Monday, March 15, 2010
Monday, March 8, 2010
Is Big Brother Positioned to Pick Your Pocket?
Is Big Brother Positioned to Pick Your Pocket?
An article in Monday, March 8, 2010 Wall Street Journal by Ellen E. Schultz provides a cautionary tale for recipients of Social Security benefits. The U.S. Treasury Dept. is on a tear, increasing the percentage of collections resulting from Social Security withholding from 1.6% in 2001 to "roughly 10%..." in 2008.
How? Why? The "why" is probably obvious: our government is desperate to close the gap between income and expenses. It recently gotten a new weapon in its arsenal: a provision in the 2008 Farm Bill which "lifted the 10-year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans..." WSJ, March 8, 2010. Doubtless many of its claims are valid. Of note, though, are two examples in the article. In the first example, the SSA badly mishandled a claim, and resolved it only after the death of the person. The second example involved a student loan obtained by forgery. The victim of the forgery had to prove disability so she doesn't have to pay it back! (I guess the SSA is not willing to concede she doesn't actually owe the money.)
Bankruptcy often doesn't help for these borrowers. So what does one do? First, dispute a false or shaky claim. Professional help - an attorney versed in Social Security appeals - can be worth his weight in gold. If the debt is valid, though, an ounce of prevention is likely to be better than a pound of cure (especially if there is no cure.) Diplomacy may be more effective than direct confrontation.
An article in Monday, March 8, 2010 Wall Street Journal by Ellen E. Schultz provides a cautionary tale for recipients of Social Security benefits. The U.S. Treasury Dept. is on a tear, increasing the percentage of collections resulting from Social Security withholding from 1.6% in 2001 to "roughly 10%..." in 2008.
How? Why? The "why" is probably obvious: our government is desperate to close the gap between income and expenses. It recently gotten a new weapon in its arsenal: a provision in the 2008 Farm Bill which "lifted the 10-year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans..." WSJ, March 8, 2010. Doubtless many of its claims are valid. Of note, though, are two examples in the article. In the first example, the SSA badly mishandled a claim, and resolved it only after the death of the person. The second example involved a student loan obtained by forgery. The victim of the forgery had to prove disability so she doesn't have to pay it back! (I guess the SSA is not willing to concede she doesn't actually owe the money.)
Bankruptcy often doesn't help for these borrowers. So what does one do? First, dispute a false or shaky claim. Professional help - an attorney versed in Social Security appeals - can be worth his weight in gold. If the debt is valid, though, an ounce of prevention is likely to be better than a pound of cure (especially if there is no cure.) Diplomacy may be more effective than direct confrontation.
Wednesday, March 3, 2010
Sunday, February 28, 2010
San Diego Loan Modifications? Scarce as Unicorns
San Diego Loan Modifications? Scarce as Unicorns! (Almost.)
Lots of San Diego homeowners are hopeful they are going to get a loan modification. Most shouldn't be. It's a wonderful idea, and our well-meaning politicians have made some funding available. There's even talk now about legislation that would REQUIRE lenders to reduce principal. More about that below. And yet, a very, VERY small percentage of loans which "qualify" for modification - say, under Obama's H.A.M.P. program - are actually being modified. Why? For one thing, the processes are convoluted and time consuming. For another, the most conscientious borrowers are staying current, and as a result, lenders won't even talk to them about modification. I know how to do these things, and could charge money to do them, if they actually succeed. I stopped even offering the service in San Diego, because I have ZERO faith in the probability of a decent outcome, my own considerable skills notwithstanding. The people who see me have enough trouble as it is. I'm not going to add months of stress and anxiety waiting for what is a pipe dream for most in San Diego.
Many (most, actually) big banks have repaid their bailout money, and so aren't required to play be the same rules on "loan mods" anymore. And as for laws making banks write down principal balances, well, expect those proposals to die in committee or in litigation where lenders and scholars will argue that such a law would amount to an unconstitutional government "taking" without "just compensation." Remember the saying, There's no such thing as a free lunch?" Someone has to pay for it. Banks aren't about to volunteer. The taxpayers won't either. Who does that leave? Anybody?
Lots of San Diego homeowners are hopeful they are going to get a loan modification. Most shouldn't be. It's a wonderful idea, and our well-meaning politicians have made some funding available. There's even talk now about legislation that would REQUIRE lenders to reduce principal. More about that below. And yet, a very, VERY small percentage of loans which "qualify" for modification - say, under Obama's H.A.M.P. program - are actually being modified. Why? For one thing, the processes are convoluted and time consuming. For another, the most conscientious borrowers are staying current, and as a result, lenders won't even talk to them about modification. I know how to do these things, and could charge money to do them, if they actually succeed. I stopped even offering the service in San Diego, because I have ZERO faith in the probability of a decent outcome, my own considerable skills notwithstanding. The people who see me have enough trouble as it is. I'm not going to add months of stress and anxiety waiting for what is a pipe dream for most in San Diego.
Many (most, actually) big banks have repaid their bailout money, and so aren't required to play be the same rules on "loan mods" anymore. And as for laws making banks write down principal balances, well, expect those proposals to die in committee or in litigation where lenders and scholars will argue that such a law would amount to an unconstitutional government "taking" without "just compensation." Remember the saying, There's no such thing as a free lunch?" Someone has to pay for it. Banks aren't about to volunteer. The taxpayers won't either. Who does that leave? Anybody?
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