Tag Archive for: bankers

Your Credit Score – Don’t Sweat the Small Stuff

I know you’ve heard it before – “Don’t sweat the small stuff.” This truism applies to every facet of our lives. We often make the mistake of over dramatizing issues in our personal relationships – between spouses, between partners and between parents and children. Most of the time – it’s a situation where for one reason or another, we allow the moment or the event to take on greater significance than we should. In personal matters – this often gives rise to hurt feelings, family quarrels and anguish. From one event to the next, the mistake is commonly repeated until we learn or experience a greater trauma that causes us to snap back to reality. We say to ourselves – “Gee, I have to chill out and just be thankful for the boring, mundane days when there is nothing monumental and adverse going on in my life.” The lesson – don’t let the “small stuff” govern your life.

I find this issue also arises frequently in the context of how people assess their financial situation and the options presented to them when it comes to strategies to shed debt and preserve future income. In this instance, what is the “small stuff?” The “small stuff” in the context of shedding debt and preserving future income is “your credit score.” Let me repeat – the “small stuff” is your credit score. There are differing views. The banking industry wants you to believe that your credit score is “your most valued asset” – and that your world will crumble if your credit score tumbles. It is true that if  you short sale a home, go through a foreclosure, file a bankruptcy or settle your credit card debt for pennies on the dollar – your credit score will take a hit. The fallacy is – in the context of the gain you will realize by getting out from under debt and the outrageous never ending interest – the credit score is a short term decline that is insignificant in the context of the big picture.

I tell clients, over and over, “When you’re 75, would you rather have lived your last 30 years with a 790 credit score and have $40,000 in the bank to retire along with the paltry social security you will receive or would it be better if your credit score took a 75-100 point hit for about  1 ½ years, and at 75 you have $950,000 in saving to live off of with social security? The numbers are simple – if you pay off $100,000 of debt at $2,500 per month with interest at 26%, you will pay $235,000 over the 94 month period.  Instead, if you could settle this debt for $30,000, by using the$ 2,500 per month you would pay the first year, and then invest $2,500 per month for each of the next 82 months, tax deferred at 6%, you will have $300,566. If you then allow this savings to accumulate for another 10 years, you will have $546,849. Better yet, if you continue to save $2,500 per month during the last 10 years, you will have $958,596. This is “big stuff.”

Being afraid to make the right move because of concern over your credit score, is worse than “sweating the small stuff” – it’s letting the “small stuff” steal your future. You still need to plan. For example, if you have a short term need for credit – such as buying a car – then buy the car before making your move. In all events, you should  resist the effort to be brainwashed by an industry that earns billions advancing this myth. Simply look at the numbers – that’s the big stuff and plan your future.

Ken Gross is an attorney with Thav Gross and host of The Financial Crisis Talk Center, a radio program that airs weekly at 10:00 AM on Saturday mornings on Talk Radio 1270 WXYT AM.Don’t Sweat the Small Stuff (2.1.12)

Ken Gross Interviewed by the Examiner.com – Detroit

Check out Lori William’s interview of Ken Gross in the Examiner – Will Santa Bring an end to the Housing Crisis for Christmas?

Will Santa Bring an end to the Housing Crisis for Christmas?

  • November 30th, 2010 12:32 pm ET

By: Lori T. Williams, Esq., Wayne/Oakland Legal News Examiner for Examiner.com and owner/managing attorney of Your Legal Resource, PLLC

Will Santa Bring an end to the Housing Crisis for Christmas? Don’t hold your breath!  I interviewed attorney Ken Gross, Managing and Co-Founding Shareholder of the law firm of  THAV GROSS, recently for a real estate update.  Gross has seen his law practice shift over the past 2 years from 80% Corporate and transactional business law and estate planning to 40% of that work, with the remaining 60% of his work today focused on “financial crisis management”.  The clients in the latter category are being helped by Gross and his firm through loan modifications, short sales, or the Bankruptcy process.  Gross feels that the Bank’s loan modification process is worse now than ever.  “Banks are losing paperwork submitted by homeowners, and if you do get a live person on the phone,  it’s hard to find anyone who knows the facts of the loan modification transaction,” remarked Gross.  “Furthermore, denials are made with no explanation and often mistakes are made by the banks, making the denial improper.”

Despite the difficulties inherent in the process, Gross enjoys strategizing about which method will best help the debtor solve their financial crises, and for the least amount of money.   Gross feels, “if an individual can do for themselves what the Government did for GM, it’s a smart move.”  “Often my clients are hard working people who were doing well and paying their bills on time, before the housing market and economy took a hit”. Gross’s goal is to preserve assets and future income for his clients and their family.  “If they have 2 mortgages, and their house is underwater such that its value is less than the amount of the first mortgage, they might be a candidate for a Chapter 13 Bankruptcy.  That’s the only way to eliminate the 2nd mortgage on the property.  At the same time, it’s possible to work on a loan modification of the first mortgage.”  Gross remarked, “the process is difficult.  In some cases, it is necessary to push the matter to the brink of foreclosure in order to get the banks to agree to a short sale.  You just don’t know how the process will go, until you try.  Bankruptcy or another Debt Resolution program is available as a relief measure for those clients who can’t modify the loan or get approval from the bank on a short sale.”  Gross helps his clients who previously had a good credit score, to understand that their credit score isn’t as important as discharging debt that cannot be repaid because of the current housing market and economy.  “The credit score can come back, but if you risk your assets and income to protect your credit score, you are throwing good money after bad”, says Gross.

Gross hosts a weekly radio show on WDFN’s channel 1130AM, every Saturday from 8:30-10am.  “The show is called Financial Crisis Talk Center and the goal is to educate listeners about real estate options and debt relief options available under the law today”, says Gross.  “The show has resulted in referrals from real estate brokers, mortgage brokers, attorneys, and CPA’s who heard us on the radio, and who referred a client with an upside down mortgage or other debt problems.”   “Our listeners tend to be males who are 30-60 years old, since WDFN is a sports station. We’ve been on the air for 2 years now and are growing a regular following.”  “As I see it”, says Gross, “we have a limited window of great opportunity to help homeowners shed debt.  As the National Economy improves, the window of opportunity to shed debt associated with the housing market will close.”  “We all want the economy to improve, but the message is for homeowners and debtors to get educated about their individual rights, so they aren’t holding on to a sinking ship”.  For more information about the radio show, credit card relief, tax relief, loan modifications and short sales, Bankruptcy, or other financial problems, visit the website.

What Do You Think of Your New Tax Assessment .. I'll Tell You What I Think ..

Dear National Banker Association and Persons Responsible for Maintaining Fiscal Policy in the United States during the 1990’s and 2000’s:

Well where do I begin. How about with my Notice of Assessment that I received Thursday from the City of Farmington Hills, Assessor’s Office.

Thank you, thank you, thank you. I’m so happy to see that my taxable value of my home, as well as my Assessed Valiue declined $11,930 this year, which represents a 8% decline in value. I’m down to $127,560, which means a FMV of $255,120. In 2006, my Assessed Value was $198,640, which means the equivalent of $397,280. Well, well, I’m sooooo happy. I’m only down $142,160 in value since 2006, 4years. A measely 35% decline in value.

Not bad. I did pay $250,000 for the home in 1989. And now, after maintaining it, improving it, caring for it and even loving it (or at least my wife) I’m so happy to see its worth $255,120. Thank you, thank you.

I’m so glad that your view on things is that I have a moral oblgation to pay my $400,000 mortgage even though my house is now only worth $255,000. I guess you have a point. But don’t morals run both ways – isn’t it a two way street? If I have a moral obligation to stick with a investment that has turned bad, don’t you have a moral obligation to step up to the plate and bear financial responsibility for the financial meltdown you caused?

I know. You don’t see it that way. You know what. I don’t give a rats ass as to what you see. Maybe its time you wake up, look in the mirror and see what we see. A self righteous, arrogant pig that has rapped our country and people of the good which it deserves –  and that’s the way it is.

Ken Gross