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Finance 101 – A Starting Point

June 11, 2010

Living in a society where we are judged by our income, it has really been interesting to be able to view thousands of my clients’ financials.

When I was in the car business, I was the one that took the financial information. I saw how much people made, saved and even what they spent their money on. I was the one that figured the debt ratios and what folks would qualify for.

The same is true in the loan business. I work through the 1003 with them, defining assets, liabilities and finally their net worth. I help them with debt ratios and help them understand where they are from a bank qualifying point of view. After 28 years of going through financials with clients I am still amazed at how little people know about their own finances.

I’ve seen crazy rich and crazy poor and I’ve seen how unsure people are of their finances – no matter which end of the spectrum they are on.

This week I was helping a client with a loan modification. He collected his financials, paystubs, bank statements and we did his RMA form together.

This person was feeling really scared because he isn’t making the money he used to and we’re asking the bank to lower his payments to be in-line with his new job and income. By the time we got to the end of the paperwork, his fear had waned. He became confident and even cracking jokes. He realized that he can make this work, it’s doable. The unknown became known and the fear was gone.

That’s why I am posting this link to the HAFA form :http://makinghomeaffordable.gov/docs/RMA%20Interactive%20-%20Updated%2011.10.09.pdf

This is the form we use when requesting a loan modification or a short sale. It’s designed to give a current picture of the home owner’s financial situation so that the bank can design a program that will keep their asset performing[aka: the borrower making payments].

Today I challenge you to download and complete the form No one has to see it but you. Write out all your assets and all your liabilities. Put it on paper and define your current financial picture.

I think that once defined, the solution becomes clear and with that clarity you can make a plan toward the goal you have for yourself. I challenge you to do that today. Now.

Should you need help with the form or any other financial or investing issues. I am here to help.

Fill out the form now. Really.

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