Foreclosure Prevention Counselors.

What is an "foreclosure prevention counselors" and how would I get one? Good question, and hopefully this article from TwinCities.com will help clarify a few things...

Do you fear foreclosure will cause you to lose your home?

Help is on the way.

On Friday, members of a private-public partnership announced that an additional $1.8 million will be available to fund foreclosure prevention counselors.

The extra money will fund 37 counselors - up from 18 working statewide.

Homeowners needing help working through their mortgage or foreclosure problems should call the Home Ownership Center at 651-659-9336, or 866-462-6466 outside the Twin Cities.

"Many of these foreclosures can be prevented by asking for help," said Minnesota Gov. Tim Pawlenty, who announced the beefed up program Friday at Lutheran Social Services.

The earlier people call for help, the easier it is for them to stay in their homes, state Commerce Commissioner Glenn Wilson said.

State, nonprofit and business officials estimate the extra counselors will be able to prevent an additional 5,700 families from losing their homes.

But that's just a fraction of the number of families who might face foreclosure.

The Greater Minnesota Housing Fund estimates that 20,573 families will lose their homes through foreclosure this year. Another 60,000 will fall behind on their mortgage payments. Even experts don't know how bad the mortgage crisis will get before the market - and families - are able to find stability.

Here is the link the full article...

Freddie Mac Take a Big Hit

Here is a headline you would not want to see if you worked for Freddie Mac: "Freddie Mac Reports Third Quarter 2007 Net Loss of $2.0 Billion or $3.29 Per Diluted Share".

Ready for some crazy numbers?

Freddie Mac FRE today reported a net loss of $2.0 billion, or $3.29 per diluted common share, in the third quarter of 2007, compared to a net loss of $715 million, or $1.17 per diluted common share, for the same period in 2006. The company also reported a decrease in the fair value of net assets attributable to common stockholders, before capital transactions, of approximately $8.1 billion for the third quarter of 2007, compared to an increase of approximately $300 million for the same period in 2006. Compared to the second quarter of 2007, the company reported declines in both net income and fair value primarily due to increased credit-related expenses and losses on mark-to-market items.

"Without doubt, 2007 has been an extremely difficult year for the country's housing and credit markets and, as our third quarter financial results reflect, we have been impacted by the deterioration in these markets," said Richard F. Syron, Freddie Mac chairman and chief executive officer. "We recognized the challenges facing the mortgage markets, however, and have taken further steps to address them. At the same time, as our charter mandates, we have continued to meet our mission by playing a stabilizing role in the markets and supporting our customers.

This chunk of article was borrowed from MoneyCentral on MSN. You can read the whole thing here.

How bad can a US downturn possibly get?

That is a good question and I would like to know the answer. Luckily the people over at The Financial Times has an article with the same title...

First, the good news. The US housing slump is unlikely to drag the US economy down very much. It is true that up to now, the major source of weakness in the US economy has been the housing sector. At the end of Q2, 2007, the Federal Reserve Board reported the market value of the US residential housing stock $21.0 trillion and single family mortgage debt at $10.1 trillion. About 14 percent of the mortgage debt, $1.3 trillion, say, is sub-prime. According to the Case-Shiller data, since the end of 2006, the average US house price may have fallen by 5 percent or so, knocking about one trillion dollars of the value of the US housing stock. The brain behind these data, Bob Shiller of Yale University, believes a further decline, over a period of years, of 15 percent is in the cards.

The reason for the good news is that there is no first-order wealth effect from a change in house prices on private consumption; a decline in house prices is a redistribution from home owners to consumers of housing services, that is, from landlords to renters.

Then a lot more details...

The major source of demand strength is the US economy is the external sector. This is not surprising, as the rest of the world is growing faster than the US and the real effective (that is, trade-weighted) exchange rate of the dollar has dropped like a stone. Exports are a much more important source of demand in the

US (12.0 percent of GDP in 2007Q3) than they were in 1975, for about 8.5 percent of GDP or in 1965, when they were 5.2 percent of GDP. From its peak in 2002Q1 the broad effective real exchange rate of the US dollar had depreciated by 25 percent by 2007Q3. The precipitous decline of the nominal and real exchange rate of the dollar since September can easily have added another 5 percent to the cumulative real depreciation rate. In real terms, the dollar today is as weak as it has been at any time since 1970.

And a lot more details...

Here is a link to the blog entry...

Don't Get In Debt For Christmas

Well most of us are already in debt, and Christmas is definitely not going to help. This article has some good advice for handling debt and the holiday season...

One thing that really upsets me each January is hearing how stressed a number of Fool readers become after overspending at Christmas.

Although the festive season is a wonderful time of year, all too many of us get carried away with the parties, Christmas meals and the wish to buy lavish gifts for our loved ones, meaning that we start the New Year in that dreaded word, debt. And of course, with many of us being given ridiculous credit card limits and overdraft facilities it's all too easy to spend more than you earn.

What's more, I know a number of people who have only just paid off the debt accrued last Christmas this month - but are ready to wield that credit card and start all over again!

But just take a moment to take a deep breath before you hit the shops to do your Christmas shopping. Are you already in debt -- and by that I don't mean mortgage debt? Do you have an outstanding balance on your credit card, or are you paying off a personal loan or overdraft?

If the answer is yes, it's time to think carefully before spending any more. Remember, the more you owe, the more interest your debt will accrue and the longer it will take you to pay it off. And I don't know about you, but I absolutely hate owing any lender any money -- and knowing that the interest I'm paying them is effectively going into some overpaid director's bonus!

There is a lot more information in this article which can be found here.

Y! Answers How To Get Out of Debt

I always keep an eye open for any articles related to this website, and today I came across one from an unusual location: Y! Answers (Australia).

The Headline: "Big Problem- Income is less than cc debt, utilities, mortgage, car payment; no money left over for anything!?"

The Details: "Both my husband and my income is less than our debts, this doesn't even include food and gas! All of this due to our cluelessness when we bought our home with no money down, 100% financed, 3/1 (interest only) ARM!!, that can not be refinanced because property values have gone down so much. Thanks in advance for the advice!"

Some answers were helpful:
"1. cut up the credit cards
2. cancel all that is worthless (cell, cable, internet, 3 way calling, newspaper, etc)
3. sell the house
4. stop buying EVERYTHING but food
5. start listening to Dave Ramsey to get out of the hole."

Some were not:
"welcome to the American dream. you and most of the country want to know what to do. well do what some have then fake a disability collect and live in a fixed income housing spending your disability check on booze and drugs blaming things on the government."

Click here to see all the great words of wisdom....