How to Obtain Auto Financing after Bankruptcy or Foreclosure

Welcome to RightsRadio.com. I’m Dr. Joyce Starr, and my guest is our resident expert on auto financing/auto loans, Dora Lee Stallard. Dora Lee is on a mission. “Our auto financing program gives me a chance to reach out to people – to help people feel good about themselves. It’s almost like a ministry.” Based in Indiana, Dora Lee Stallard is an “angel” auto financing coach for consumers across the nation. Show Date: September 16, 2010.

Listen to the program – enjoy the highlights below.

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Good news on auto financing.

Q: How has the economy has affected auto financing in general – particularly the accelerating numbers of foreclosures. Are auto lenders tightening their belts – especially for those who filed for bankruptcy or went through foreclosure?

A: Actually no. Financing is available. In fact, I feel that companies in this arena are doing even more to help.

Q: I would have expected you to say just the opposite – that auto financing has tightened up exactly like mortgages.

A: Lenders I work with understand that there’s is a human side to this. They have to get up and go to work every day themselves. People have the option to buy a house, but may have no choice regarding a car.

Q: What about rates?

A: Rates vary state to state. They’re set by auto finance committees.

Q: What are the prospects for auto financing if someone filed for bankruptcy?

A: People often surrender their vehicle during bankruptcy because they’re upside down on their car. But they still need transportation to get to their job. Banks and lenders who specialize in auto financing want to know if the person (or couple) was prompt in paying car payments, if they previously paid the minimum due monthly and if they’ve done their homework before seeking another vehicle.

Q: What homework must they do?

A: First, you should understand what’s available in your state. You should identify dealerships in your area that are able to help you. You can’t get into an auto loan without putting money down. Be prepared to put down between $500 and $2500.

Q: What if they don’t have it?

A: If even $500 is almost impossible, lenders will work with me. But you may not get the SUV that your heart desires. Be realistic. I’ve had consumers wait months to come up with the $500.

Q: Please describe your program.

A: My particular program is pre-owned vehicles. The lenders want to see a vehicle that is mechanically sound. You must have proof of income – at least six months of bank statements for those who are self-employed. Never give your credit info over the phone. Go in and meet the person who is working with you. Try vehicles on for size. Find one that fits your budget.

Q: What else should the buyer be ready to provide?

A: Proof of residency, a utility bill and phone bill. Some require as many as 10 references of people that can verify that they know them.

Q: Isn’t that a potential privacy violation? What if the buyer defaults?

A: The lender won’t force references to pay for the car if the buyer defaults. In fact, they’re unlikely to contact them at all – unless help is needed in locating the buyer.

Q: What if the person doesn’t have a job.

A: No bank will lend to someone who is not employed, unless they’re on social security or social security disability.

Q: You have two websites with excellent information.

A: Yes, please visit freshstartindy.com and freshstartindy.net. We provide information on auto financing, how to improve your credit score and also identity theft protection. Your listeners can contact me directly through the form on freshstartindy.com.

Upside Down in Your Mortgage? Cons & Pros in Walking Away, Mailing Keys to Your Bank – 5 Million Under Water.

Upside-Down Mortgage. Over 5 million people own a home whose value is below 75 percent of what is owed. Dr. Joyce Starr asks: What are the cons and pros in walking away from your mortgage? Should you allow your property to be foreclosed, mail your keys to the bank – or not? Show Date: February 9, 2009.

“It would cost about $745 billion, slightly more than the size of the original 2008 bank bailout, to restore all underwater borrowers to the point where they were breaking even, according to First American.” – David Streitfield, NYT

Depending on exactly how much you owe, here are cons to consider:

1. You have a history with your home – memories that can’t be replaced by new walls – and you can still afford to pay.
2. You have friends in the building or neighborhood. If emergency strikes, there’s a close neighbor you can call to rush you to the hospital, watch over your kids and feed your pet.
3. Your children love their neighborhood friends and school.
4. You can’t part from your pet, and your current building accepts pets.
5. The cost of a move (it could reach 4k  or more) – added to the new rental + deposits  – could throw you back into debt.
6. If you default, it will be difficult (albeit not impossible) to purchase a new home in the (near) future.  It might also be harder to qualify for a job and/or to purchase a car. While the distant future could be brighter, the here and now might be extremely painful.
7. Rental prices rise when you least expect it. Even worse, if you’re renting from an owner, the owner could sell at any time – throwing you right back into moving mode.
8. The stress of moving could make you sick. Plan to lose up to six months of your life in the process -  packing, unpacking and adjusting to your new home.
9. If you move to a condo or HOA  that’s facing severe financial problems – and thus the “great deal” – you could find yourself up against a Board that’s also out of control, along with a hostile “unneighborly” environment.
10. New “things.” Somehow old things never quite fit a new apartment. Little by little, the bills add up. Will you be required to paint and/or repair? Factor it in. A friend downsized from a condo that she owned to a less expensive rental unit. A few weeks after she moved in, water poured in from the unit upstairs. She’s now living with water damaged walls, toxic mold and long-term battles with several insurance companies.  Her former condo life looms like a distant dream.

Here are ten pros:

1. You can’t afford to continue paying. Full stop.  You have no choice.
2. Your family and friends argue that it’s the bank’s fault. They should never have loaned you the money in the first place.
3. You’re ready to downsize, don’t care how you live and want to use the money for your retirement.
4. The economy is likely to get worse before it gets better. Housing prices will fall further. Time is on your side.
5. You’re faced with an impossible choice. Pay for medication, your child’s college tuition, etc. versus your mortgage.
6. You applied for loan modification assistance from your bank, but they turned you down.
7. You’re not eligible for the government loan modification program and/or are unwilling to accept the terms.
8. Your condo or HOA is facing another major assessment. You can barely afford the mortgage, but not the mortgage + assessments. (A woman wrote to say that she has been borrowing against her credit cards to pay her assessments and is now deep in debt.)
9. You’re exhausted and sickened by the stress of dealing with your mortgage.
10. Your mortgage battles have destroyed any remaining emotional attachment to your home. Home has become a place that tortures your heart and makes it impossible to sleep at night.

Wild Card – Paying an attorney to stop the foreclosure:

“Ripoffs of homeowners have become so commonplace that state bar associations from Florida to Arizona are warning their members of the many ethical pitfalls awaiting those who exploit the mortgage crisis. The California State Bar launched a task force a year ago to examine thousands of homeowner complaints about foreclosure lawyers. Currently, the California Bar is investigating more than 400 attorneys who are suspected of ripping off thousands of homeowners across the country. The organization that licenses and disciplines California’s more than 250,000 lawyers already has suspended or obtained the resignations of 15 lawyers while disciplinary charges are pending.” ~ Paul Elias, Associated Press, as reported in the Washington Times, February 14. 2010.

Listen to my show below.  Share your experiences and views on this topic with our comment form.

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To your home ~ Dr. Joyce Starr

Rights Radio Self Help Hour: How to Lose Your Home for $400 or Less

How a missed $400 homeowners association dues payment escalated into foreclosure and eviction in Texas. Homeowners association rights and wrongs with authors Dr. Joyce Starr and Dr. David Goldenberg.

A homeowner based in Texas missed a $400 payment to his homeowners association – which soon mushroomed into an additional $3000/plus in legal fees and interest, foreclosure and finally, eviction. Dr. David Goldenberg, author of one of the three books in our Homeowner Rights Defense Kit (available on StarrPublications.com), joined me for a lively discussion on February 12, 2009:

How to avoid setting off a homeowners association or condo association foreclosure avalanche when you’re standing in
front of it.

Here’s the email I received from the homeowner:

“Hi, I am writing to you about the my homeowners association. I have been working out of the country or out of the city for most of the year last year. I owed the home owners association $400 and by the time I realized their was a problem, they had turned it over to their attorneys, and instead of owing $400 the bill was several thousand dollars. I had been in contact with their attorneys less than two weeks ago trying to negotiate a fair settlement. I had to go back out of town, and when I returned Wednesday night I had an eviction notice on my door. The HOA had foreclosed on my home, sold it in an auction, and now I am being evicted from my home over an $400 original bill. I am not behind on my house payments, but now I will be evicted from my home because their is no oversight on home owners associations by the government to keep HOAs from abusing people. Please address this issue, because I understand that about 30 others were done the same way as me.”

Dr. Goldenberg argued that the owner:

1) Had a legal responsibility to read and understand his obligations as set forth in  his homeowner association documents;

2) Should have alerted the HOA that he would be traveling and arrange for some form of ongoing communications;

3 Arranged automatic payments from his bank or immediately paid the past due amount before it escalated out of control.

He reminded us about the Admiral who failed to pay his Association dues because he had been kidnapped and was being held captive! Unsympathetic judges ruled against the unlucky Admiral, and he lost his home.

An HOA or condo  has a legal responsibility to demand delinquent payments in writing within a specific time frame, in order to prevent economic collapse. However, I pointed out that while Associations are justified in leveling fines for delinquent payments, excessive legal fees make it impossible for owners to catch up. The owner in question would have gladly paid the $400 and even the fine. He could not pay $3000 in legal fees and interest. As a result, he was foreclosed and evicted. Dr. Goldenberg agreed.

A tort reform group based in Texas offers excellent suggestions for mediation that I will include in a subsequent post on this topic. (The question is: who will pay for the mediation, and can it be conducted in time?)

Purchase the Homeowner Rights Defense Kit

Listen to the program below. Share your ideas on how to solve this insidious problem by sending your comments.

Dr. Joyce Starr

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Foreclosure & Mortgage Crisis: How to Stop the foreclosure process

Topic: How to stop the foreclosure process. How to obtain a new mortgage at the best price.

• There are over 2100 foreclosures daily across America. Who is responsible for this crisis?
• What if you’re unable to make your mortgage payments on time?
• What if you can’t pay your condo or HOA fees or assessments on time?
• What is mortgage “short-selling” and mortgage “short” refinancing?
• How some savvy homeowners shaved tens of thousands of dollars or more
  off existing mortgages and thereby avoided foreclosure. What the banking industry doesn’t want you to know.

Guest: Jack Dubrawa, a straight-talking mortgage expert with 18 years of sales experience in the mortgage arena. He spent nearly 12 of those years with Washington Mutual. You can reach Jack Dubrawa at: 954.608.0887

Date: June 18 at 5:00 PM EST (2:00 PM PST). Click here to listen to the show LIVE.