Archive | May, 2010

Avoid the Repo Man

As the economic slump continues, many people are struggling to make ends meet, and unfortunately, vehicle repossessions are now on the rise. Having a car repossessed hinders more than just a car owner’s mobility; it has a severe impact on credit scores, thereby limiting the ability to get loans or credit cards for up to seven years. The Better Business Bureau (BBB) of Minnesota and North Dakota advises troubled car owners on how to avoid losing their vehicle and their creditworthiness.

According to the American Bankers Association, the number of direct auto loans that were at least 30 days delinquent increased from 2.03 percent to 3.01 percent during the first quarter of 2009, and delinquent auto loans through dealers hit 3.4 percent in March. Perhaps not surprisingly, the number of repossessed vehicles jumped 12 percent to 1.67 million nationally in 2008 and is expected to increase by another 5 percent in 2009, according to Manheim Consulting.

“The worst thing you could do when falling behind on a car payment is to bury your head in the sand and ignore the problem,” said Dana Badgerow, President and CEO of the Better Business Bureau of Minnesota and North Dakota. “To prevent repossession, and the negative effect on personal credit scores, automobile owners have to take responsible action and face the issue head on – otherwise, there is nothing good that will come of the situation.”

As if car owners didn’t need another reason to avoid the repo man, if a lender chooses to sell the car at auction, and it is bought for less than the outstanding loan, the original owner may still be on the hook to pay it back in addition to added fees—essentially paying for a car they no longer own.

The BBB recommends car owners consider taking the following steps when falling behind on car payments:

Contact your lender. According to the American Financial Services Association (AFSA), auto repossessions cost creditors about $8,000. Therefore, the best case scenario for both you and your lender is to keep you in your car and making payments. To that end, lenders will often work with troubled borrowers to develop more agreeable payment plans. Some possible options, according to AFSA, are loan refinancing, extending or deferring payments, changing payment due dates and waiving fees.

Read the entire article on avoiding the Repo Man.

Other stories

Minneapolis sellers still lower prices

According to the article I am linking to below, houses in several parts of the Midwest as well as the South have experienced the largest reductions in price, at least percentage-wise.

Minneapolis is one of the cities named. This kind of surprises me. But the data comes from Trulia which I have always thought to be somewhat reliable, so it may actually be true.

Another interesting statistic which they site is that the price reductions are hitting the $2 million and above homes the hardest. They say that nationwide this catagory of home accounts for less than 2% of homes – yet is responsable for about 25% of the amount reduced from total homes for sale.

Here’s the link which included the list of 10 cities (Minneapolis being one of them) where sellers are still cutting prices.

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Minnesota housing crisis

Thousands fewer jobs and thousands more foreclosures add up to a lingering housing crisis, suggests a study released Monday.

While the number of residential construction jobs fell to a 13-year low in the first quarter of 2010, home foreclosures hit an 18-month high, according to the quarterly report from the Minnesota Housing Partnership.

And that may not change anytime soon, the organization’s executive director, Chip Halbach, said. “It’s just a situation where declining incomes, loss of jobs are squeezing people out of their homes,” he said.

Actual foreclosures in Minnesota numbered 6,700 from January to March, the highest total since the third quarter of 2008. Pre-foreclosure notices were also on the rise, an indicator that Halbach said meant more foreclosures in the future.

Meanwhile, mortgage delinquency rates fell for the first time in at least three years. The level hit 7.7 percent in the first quarter of 2010, down from 8.1 percent in the last quarter of 2009. Still, delinquencies remained more than twice as high as the same period in 2007, when rates held steady around 3 percent.

Read the rest of the story at the StarTribune.

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MN auction inventories

What are you looking for?

We can probably point you in the right direction.
MN used trucks and cars