Wednesday, December 1, 2010
Protecting Your Credit by Selling Your Home,
Participate in Orion's Transition Corner,
October Jobs Report,
Congratulations to This Month's Winner,
Effective Persuasion Techniques,
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Protecting Your Credit by Selling Your Home
The unemployment rate is continuing to hover around 9.5%, and some homeowners are still struggling to make their monthly payments. Many families are behind on their mortgage payments by several months or more. Most homeowners prefer to “stay put” for as long as possible, but how will this affect their credit score? If they end up in foreclosure, will a property manager even consider them as rental tenants given their credit score? Now homeowners are asking the question, should we sell our home to protect our credit?
There are a few ways in which late mortgage payments affect a homeowner’s score. After thirty days of delinquency, the lending institution will let the credit bureaus know that the homeowner is late. At this point a credit score drops by a few points and continues to drop with each delinquent payment. Then, after a ninety-day period of delinquency, the lending institution warns the homeowner (through written correspondence) of the potential for foreclosure and indicates that if payments are not made, the foreclosure process will begin. Also around this time, the lender will file a “notice of default.” When a “notice of default” is filed at the courthouse, it is also reported to the credit bureaus. This action can directly impact whether or not a homeowner is eligible for refinancing.
Once the foreclosure is finalized, it can take up to three years (or more) for a credit score to be repaired. So, what are some solutions to avoid the destruction of a homeowner’s credit score? The most obvious answer is to sell the home. With this option, the homeowner preserves their credit and any equity they have in the home. It also allows the opportunity to rebuild credit while renting after the home has been sold. Keep in mind that prior to selling the homeowner should get caught up on delinquent payments if possible.
Another possibility is loan modification or refinancing. This does impact credit, however, because when the modification is reported to the credit bureaus, they basically see it as an inability to pay on what was originally agreed upon in the first loan. Also, since the recession, many lending institutions have put severe restrictions on loan refinancing making it almost impossible to do without “good credit”.
Finally, a homeowner could consider a US Department of Housing and Urban Development (HUD) loan. Basically, this means the loan is insured by the Federal Housing Administration (FHA). Having an FHA-insured mortgage can possibly qualify a homeowner for an interest-free loan to help bring the mortgage out of “delinquency” status. The money is paid back after the loan is paid off or the house is sold.
One of the most important things a homeowner can do before considering whether or not to sell their home is to visit the HUD website at www.hud.gov. The website lists all of the possible options for homeowners facing delinquent payments. There is also a phone number to speak with a customer service agent should a homeowner have questions that the website does not answer.
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October Jobs Report
According to the U.S. Bureau of Labor Statistics (BLS), in a remarkable turnaround, the US economy unexpectedly added 159,000 private sector jobs during the month of October. This was the first increase in five months and was more than twice the number that economists had expected. Wages also rose by 2% in October, as was expected. The unemployment rate, however, remained unchanged at 9.6%.
Total non-farm payroll employment increased by 151,000 in October, revealing job gains in mining and other service-providing industries.
Local and state governments continued cutting payrolls, with local governments cutting 14,000 jobs and state governments cutting 1500 during the month of October. The only government sector to add jobs was education, which was likely due to the start of the school year.
There were 14.8 million unemployed during October, with 6.2 million filing under long-term unemployment (27 weeks or more). The number of involuntary part-time workers dropped in October by 318,000 to 9.2 million.
The private sector’s strong growth was due primarily to health care increasing jobs by 24,100 and retail adding jobs for the upcoming holiday season. Temporary help also continued to increase growing by 35,000 jobs in October. This is generally considered an early indicator of economic recovery because employers, while not wanting to add permanent employees, are in need of additional help as work increases.
Congratulations to This Month's Winner
Effective Persuasion Techniques
The art of persuasion is a very necessary thing to master. Whether at home or at work, persuasion is a survival skill that will help build a successful life and directly contribute to a person’s ability to feel confident and happy. If a person never succeeds and doesn’t have control over some aspects of their life, then negativity and emotional distress will follow. In an article in Women’s Day titled, “Mastering the Art of Persuasion”, by Brynn Mannino, she suggests using the following ten suggestions to enhance your persuasion techniques:
1. Start Things Off on Their Behalf: According to Steve Martin, coauthor of the book Yes!: 50 Scientifically Proven Ways to Be Persuasive, people are more likely to finish a task if someone has already gotten the ball rolling. If a person wants a friend to help them hang flyers, start the project and then gently ask for their help.
2. Use The Magic Word, “Imagine”: According to Michael Lee, author of How to Be an Expert Persuader in 20 Days or Less, painting a picture will help persuade someone to do something. For example, if a person wants a group of people to help build a house for the disadvantaged, they might start by saying, “I know it will be a lot of work, but imagine how happy the family will be to have a place to call home.”
3. Stress Their Losses: It isn’t as cruel as it sounds. Martin says, "We’re more persuaded by the thought of losing something than the thought of gaining.” If someone is seeking more quality time with a friend, rather than nagging, they should say, “the kids will be out of school soon and we won’t have time to enjoy a quiet coffee together.”
4. Be The First To Give: This is a very simple concept. If a person gives, then another is likely to follow in his/her footsteps. If someone buys a friend dinner, then the other person will follow suit and buy dinner the next time.
5. Ask For More Than You Need: According to Lee, people feel guilty if they cannot fulfill a request. So if a person asks for something and is refused, they should ask for something else immediately following the rejection. This way, the person who rejected the request is more likely to jump on board and fulfill the second request.
6. Make Them Laugh: For some reason, people are more likely to be persuaded when a person uses humor.
7. Drop the “I” For “We”: Using the word “we” instead of “I” fosters a sense of community and commonality and makes people more likely to join in or be persuaded.
8. Rely On The Majority: This is basically relying on the principle of “popularity.” People are more likely to do something if everyone is doing it.
9. Use the Positive Labeling Technique: This is when a person A sets a level of expectation for person B, and person B wants to follow it to maintain consistency. If person B does a fantastic job this time, person B will want to do a fantastic job next time.
10. Time Your Request: Very simply, a person is more likely to give following a thank you, compliment, or when he/she is in a “good” mood.
Utilizing these techniques can help people embrace the power of persuasion. Try putting them to use, and see what follows.
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