Anyone who is facing missed or reduced mortgage payments, and/or foreclosure should immediately get on the phone with their current lender and try to re-structure their loan. Yes, I’m sure you’ve heard this before and maybe have heard of lenders not being quite so helpful. This blog installment covers some important steps you can take to protect your home and your credit. But WAIT…THERE’S MORE!!!! Read on to find out about an effective, free resource available to struggling homeowners. I just learned about it and I can’t wait to share the good news with others. Be sure to read through the factual info to “Stella’s Story – Part 1”, below.

1. Reality check, please!

Most lenders won’t help you re-structure/modify unless you prove hardship. You have to have a job. This comes in the form of a missed payment or two, OR a process in which the homeowner has to show the lender all of their bills to prove they can’t pay. Either way, it’s a tedious process and one that will require follow through. The biggest obstacle is the homeowners themselves because often, they get so discouraged and frustrated that they give up. This is the most important piece – they must never give up. Take notes, write down who you talked to (i.e. numbers, dates, times etc.). Ask for supervisors; call every day. It’s worth the time and aggravation to try and save your home, not to mention your credit.

Once a homeowner is 90 days late, the foreclosure process will be started. From there, there is a certain amount of time (75 days or period of redemption), where a homeowner can pay the default payments and potentially save their home from foreclosure. Most often, people can’t pay, so they go into default and it’s almost impossible to stop it.

Short sales – this is when someone knows they can’t pay, but before their home goes into foreclosure, they list their property and have the bank agree to the offer.

2. How do these things impact your credit?

Foreclosure will be on your credit for 10 years. Under current guidelines, a conventional lender will not lend to you for 5 years.

Short sales will also be on your credit for 10 years. Under current guidelines, a conventional lender will not lend to you for 4 years.

Late payments – This is ideal and the easiest to repair. Most likely, if you’re late on your mortgage, no one will lend to you for a year, maybe more, but certainly less than 5 years. Hence, this is the reason homeowners need to put their pride and fear aside and tackle their challenge head on with their lender so they can protect their future.

3. Where’s the GREAT news? Read on about Stella:


Stella’s Story – Part 1

A close personal friend of mine, “Stella”, is going through a modification right now. She is a smart, beautiful, and successful woman, who has fallen on some hard times due to her industry. This can happen to any one of us. Because of our mutual trust, Stella has allowed me to tell her story in hopes that her experience will help others. Here are the details:

1. Stella called her lender for help BEFORE she was late or missed a payment, but this story applies to anyone who isn’t being foreclosed upon (i.e .has missed payments etc.).

2. Stella’s lender had to analyze her financials and determined that, because Stella was employed, but not making enough to cover all of her bills, they would agree to reduce her mortgage payment temporarily while they were trying to qualify her for a loan modification. Their formula was 31% of her income.

3. Stella did this for two months, but the deal included the following condition, Stella needed to call each time she was going to pay. On the third month, Stella was in for a nasty surprise.

4. Stella was told by her lender that IF Stella could pay the lender $1,800 now, they would continue to consider a loan modification.


6. The lender representative said in response, “You need to stop spending so much money on food.” (Don’t get me started….)

7. At this point, Stella was furious. But she had come this far and was determined to figure this out.


Stella found this website: She clicked on: “Find a Counselor” (Tab 4, at the top) She called the 800 number: 1-888-995-HOPE (4673). Stella and the counselor called Stella’s lender on a 3-way call. Magic happened. – After 10 minutes on hold, magically, the lender decided that Stella should be in the loan modification program without paying an additional $1,800.  The counselor is paid by the government. The government has been lending money to banks for this very reason. The counselors are the lenders’ check and balance so USE them. We are all paying for this.

I can’t thank Stella enough for finding out this information. I’m in this business and didn’t know about this resource. I encourage you to please send this information to everyone in your database. Someone you know, or someone they know is in trouble and they may be able to get some real help. As Stella’s story unfolds, I will continue to update you.

If you’re in trouble, or facing it, the best thing you can do is get a modification, and from there, learn how to manage your credit and finances by aligning yourself with a good financial planner, mortgage professional, CPA etc. Please contact me and I will connect you!

Megan McDonald, Licensed Mortgage Planner Excel Home Lending
383 Inverness Parkway, Suite 130
Englewood, CO 80112
Cell: 303-717-9995
Off: 303-790-2022
Fax: 303-468-6133


Holiday Credit Card Tips

November 6, 2009

The jury is out on whether credit cards are good or evil. Some people are choosing to cut up their cards and use cash. I think in some cases and for some people, this is a great choice. For most, the reality is that the USA functions on credit, and you have to have good credit if you want to buy a house, a car, and often to get a job. If you know a bit more about credit cards, you can get ahead and stay in a powerful consumer position – educated and informed. Here are some things to be aware of when considering opening or using a credit card:
1) Department store credit cards don’t offer real savings.

1) Department store credit cards don’t offer real savings.

It’s always tempting to save 10-15% on a purchase at a store like Kohl’s, Target, Home Depot, etc. In some cases, it could be a great idea. Here’s when it’s not: carrying a balance on this type of card will quickly reverse the savings at the cash register and you could end up paying double or triple the original price.

Tip: Unless you’re going to pay the balance in full on your original purchase, and on future purchases (remember – it’s always good to use a credit card once every 6 months), then pass on opening your card.

2) Rewards programs can often cost more than buying the product outright.

Knowing what you’re spending, and when you can pay off your spending, is critical to utilizing a rewards card. Don’t get sucked into rewards deals just because the picture looks pretty. You should not use your rewards card to incur debt that you cannot afford simply to get the miles, points, or cash back benefits. In most cases you could have saved the money for that purchase and paid less than the amount of money you have to charge in order to accumulate the necessary points or miles on your reward program. Again, if you are already using your card for purchases, it makes sense to get the rewards, however you should not use the card just for the rewards.

Tip: This is budgeting software I utilize, which has helped me paint a picture and create a budget for spending. Rewards come if you are secure in knowing what your spending habits are and you can stick to them

3) Prepaid and secured credit cards can cost you money.

Most often used by people who have bad credit or no credit, credit cards that require a cash deposit for collateral often come with high fees. If you fail to properly research and understand the terms and conditions of these forms of credit you may find up to 50% of your deposit is consumed by various fees. To avoid this, look for cards with low interest rates and minimal fees.

Tip: Go to your bank first and establish a relationship with a banker. They can explain the fees on their credit cards and help you through how to best utilize the card so you’re helping yourself, not hurting yourself.

4) Some credit cards do not report to credit reporting agencies.

Whether you are trying to establish credit or maintain a good credit score, you need to have your credit card activity reported to all three credit bureaus. Without this information, all of your efforts to properly manage your credit card account are for naught. Granted, properly managing your account will keep your finances in good order, but without the activity being reported to the agencies, no one will be the wiser. You don’t want your hard work and responsible behavior to go unnoticed by future lenders.

Tip: Confirm the card you are applying for will report your credit activity.

Sourced from

For more helpful tips on ways to help protect and improve your credit score, please visit my website: ; and, as always, please contact me with any questions or comments you may have. 

Megan McDonald, Licensed Mortgage Planner
Excel Home Lending
383 Inverness Parkway, Suite 140
Englewood, CO 80112
Cell: 303-717-9995
Fax: 303-468-6133