Brewed Fresh Daily

Last month, Changing Gears teamed with authors and CNN anchors Ali Velshi and Christine Romans to collect your questions on the personal finance issues that you’re facing because of the recession.

Today, we’re bringing you the first in a series of
Midwest Money answers from Ali and Christine, based on their new book, How To Speak Money: The Language and Knowledge You Need Now. (Each person whose question is used will receive a copy of the book.)

Our first question is from Anjana Kapoor of Sterling Heights, Mich. She writes:

I have a underwater mortgage that I am trying to get refinanced, but have been unable to so far. I have been punctual in my payments so far for 8 years, and I still have to pay PMI (personal mortgage insurance). Please let me know how I can get rid of it and refinance my house.

Ali and Christine respond:

Anjana, you are smart to try to tackle the biggest hurdle to growing your wealth — that underwater mortgage. It will take many hours of hard work and false starts to get it done. No one, and we repeat, no one, has told us this was an easy or fair process.

One successful refinancer told us it took her more than 100 hours of paper work and phone calls. But it is worth it if you qualify. How do you know if you can do it?

The first question you need to ask is how much equity do you have in your home? You need more than 20 percent equity to adjust or remove the PMI. The more you pay down the more equity you build. Bottom line, keep building your equity.

The next question you need to ask is, what kind of mortgage do you have?

If it’s a federal home loan, then there is government-supported assistance to refinance and/or adjust your loan. Take advantage.

Start by going to recovery.gov and other sites with information about your loan.
If it’s a private loan, there are fewer options, and you may want to explore a short-sale option. A really diligent real-estate broker can help you with this.

Ryan Mack, a certified financial planner with Optimum Capital Management (and University of Michigan graduate) says to keep at it, even if you have failed before. With private bank loans, timing is an issue; you may need to press the same banks periodically.

Your loan may look unattractive to a bank in the fall, and the same bank may look on it favorably after the New Year. You need to be persistent shopping your loan with banks.

Remember to keep your FICA credit score high throughout this; that’s really important. Even one missed credit card payment can stay on your credit history for as long as seven years. For a loan officer on the lookout for any unusual or risky behavior, this may well disqualify you.

Don’t max out the cards either, even if you them off in full at the of the month. That, too, makes you look risky to the banks.

courtesy of Patricia Idema

Patricia Idema at her microscope. 2011 brought Idema a new career.

Patricia Idema is a small town girl from northern Michigan. In early 2011, she was working as a cashier in a gas station in Spruce, Michigan. After graduating two years earlier from Albion college with a biology degree, she says she was beginning to feel hopeless that she would ever find the kind of work she dreamed about. “I was pretty dejected after two years of minimum wage.”The 25 year old Idema said.

Michigan’s unemployment rate just fell below 10 percent in November, it’s now at 9.8 percent. It is still higher than most states in the country.  Unemployment numbers don’t capture how many people are working, like Idema did, at jobs that don’t quite meet their financial needs or their dreams of what kind of work they would like to do.

Idema says she say plenty of people down on their luck coming into the gas station every day. “To see people everyday who were so dejected and stuck. It was hard.”

Idema sent out about 20 resumes a week during her two year job search. In January, she sent one to a growing company downstate thinking nothing would come of it.  But, “Within a week I had a new job.” she said. She started working on Valentine’s Day of this year as a mold spore analyst at a metro Detroit laboratory.

The company examines and tests air samples for mold spores. Building inspectors and residential mold testing companies looking for toxic mold are a big customers, and the company is expanding. ”We joke that we’ll be the next Google and we’ll have a gym inside the lab,” says Idema. “It’s a pleasure to come to work everyday. I feel like it is such a lucky thing.”

Thrilled with her job and her new life, Idema says the change of pace has a lot to do with her happiness. “It’s like moving to the big city,” she says. “It’s not Detroit but it’s a big city compared to where I come from. There are things to do that aren’t available up north; it’s really a pleasure”

Idema sums up 2011 like this: “It was a good year for starting fresh with a new life.” Of 2012 she says, “I hope its a good year to grow personally, now that I’m settled.”

*This story was informed by the Public Insight Network. Inform our coverage by sharing your story.

courtesy of Patricia Idema

Patricia Idema at her microscope. 2011 brought Idema a new career.

Patricia Idema is a small town girl from northern Michigan. In early 2011, she was working as a cashier in a gas station in Spruce, Michigan. After graduating two years earlier from Albion college with a biology degree, she says she was beginning to feel hopeless that she would ever find the kind of work she dreamed about. “I was pretty dejected after two years of minimum wage.”The 25 year old Idema said.

Michigan’s unemployment rate just fell below 10 percent in November, it’s now at 9.8 percent. It is still higher than most states in the country.  Unemployment numbers don’t capture how many people are working, like Idema did, at jobs that don’t quite meet their financial needs or their dreams of what kind of work they would like to do.

Idema says she say plenty of people down on their luck coming into the gas station every day. “To see people everyday who were so dejected and stuck. It was hard.”

Idema sent out about 20 resumes a week during her two year job search. In January, she sent one to a growing company downstate thinking nothing would come of it.  But, “Within a week I had a new job.” she said. She started working on Valentine’s Day of this year as a mold spore analyst at a metro Detroit laboratory.

The company examines and tests air samples for mold spores. Building inspectors and residential mold testing companies looking for toxic mold are a big customers, and the company is expanding. ”We joke that we’ll be the next Google and we’ll have a gym inside the lab,” says Idema. “It’s a pleasure to come to work everyday. I feel like it is such a lucky thing.”

Thrilled with her job and her new life, Idema says the change of pace has a lot to do with her happiness. “It’s like moving to the big city,” she says. “It’s not Detroit but it’s a big city compared to where I come from. There are things to do that aren’t available up north; it’s really a pleasure”

Idema sums up 2011 like this: “It was a good year for starting fresh with a new life.” Of 2012 she says, “I hope its a good year to grow personally, now that I’m settled.”

*This story was informed by the Public Insight Network. Inform our coverage by sharing your story.

As you’re relaxing on Boxing Day, tune in to our partner station WBEZ Chicago for the Changing Gears special, “Getting By.” We’re talking to eight Illinoisans from all walks of life — a banker, a farmer, a hospice nurse, a returning veteran and others — about the way they dealt with the economy in 2011, and their hopes for 2012.

"Getting By" participants

There are many statistics about the economy, like the unemployment and foreclosure rates, but we don’t often get to hear the human side.

Our conversation, recorded at my dining room table, covers everything from the mortgage crisis, to job hunting successes and failures, to the personal decisions our participants have had to made because times are tight.

WBEZ’s Steve Edwards and I are the co-hosts You can listen live at WBEZ’s Web site. “Getting Live” airs at noon Central Time on Monday, Dec. 26.

Many people took a hit to their credit rating during the recession. For some, it’s because they took pay cuts or lost their jobs, making them late on payments. Others saw credit scores plunge due to short sales and foreclosures. We’d like to know how lower credit ratings are affecting your life.

the elements of a credit score

Let us know if you’ve seen your credit rating go down, and what the implications have been.

We’d also like to hear from you if you’ve had to use one of those “buy here-pay here” used car lots, where pretty much anyone can get a loan, but the interest rates may be sky high. How was your purchase different than the way you’d bought a car in the past?

Changing Gears looks forward to hearing from you.

Survey on lower credit scores

Survey on Buy Here-Pay Here

courtesy of Ari Moore

Fracking is controversial, but it’s also shaping up to be big business in the Midwest. This week the environmental risks of the practice were highlighted as the EPA linked fracking to contaminated groundwater in Wyoming for the first time.

Despite these risks there are still potential economic benefits to homeowners and the region.

Inform our upcoming stories on this topic.Do you have any experience with the industry? What would make fracking worth it to you?

Retirement, debt, going back to school, and mortgages are all issues that are magnified by the recession. Where can you get Midwest Money advice?

Here. But you’d better hurry up. Through the end of today, CNN anchors and authors Ali Velshi and Christine Romans are taking Midwest Money questions from the Changing Gears audience.

We’ll be posting their answers next week. If Ali and Christine select your question, you’ll win a copy of their new book, “How To Speak Money.”

Send your questions by the end of today for Ali and Christine, then come back for the answers all next week.

Nobody has had an easy time getting through the recession. It’s made personal finance planning a nightmare — whether it’s paying for school, looking for a new job, figuring out retirement, or getting rid of credit cards. But Changing Gears is offering you the chance to get some advice.

Network anchors and authors Ali Velshi and Christine Romans are taking Midwest Money questions from the Changing Gears audience.

We’ll be posting their answers during the week of Dec. 19. And if they pick your question, you’ll win a copy of their new book, “How To Speak Money.”

Submit your Midwest Money questions by Monday Dec. 12.

theluckychicken via flickr

Illinois has been playing chicken with a few companies that are threatening to take their business elsewhere. Along with our partner station WBEZ, we’ve been covering the drama between the state and entities such as Sears and the Chicago Mercantile Exchange (CME). Both are threatening to leave the state over higher taxes, and demanding tens of millions of dollars in tax breaks and incentives to stay.

Meanwhile, Illinois Governor Pat Quinn says Ohio is putting hundreds of millions on the table to interest Sears in relocating to the Buckeye state.

We’ll be talking more about tax breaks, incentives and Midwest competition in the coming days. Inform our coverage: What do you want states to do to bring business and jobs to your state?

People all over our region are deciding whether they should go back to school to learn new skills, and possibly begin a new career. But for some, there’s a big obstacle: how to pay for it. Should you use your savings — or borrow money? What’s the best place for returning students to find scholarships?

Authors Ali Velshi and Christine Romans want to help. All this week, they’re taking Midwest Money questions from our Changing Gears audience.

We’ll be posting their answers during the week of Dec. 19. If Ali and Christine pick your question, you’ll win a copy of their new book, How to Speak Money.

Click here and ask your Midwest Money questions about financing your education, or any other topic.