Q&A: Your Best Money Moves Now

Let’s face it: No one is coming to bail us out. But, as Carmen said on Tuesday, that’s a good thing. Only you have the power to make the right decisions for your money, and with some help and guidance from Carmen and her team of experts, you can continue on the right path even during this economic turmoil.

Q: What’s the best way to try to negotiate a lower payment on our mortgage? WaMu, our lender, will not call us back.

A lot of lenders right now are not acting in good faith with customers trying to negotiate their mortgage payments. That’s because the system is fundamentally broken, according to Gail Hillebrand, Senior Staff Attorney for Consumers Union.

In many cases, the lenders simply don’t have any vested interest in making sure customers stay above water in their mortgages. She suggested working with a HUD-certified housing counselor and if that doesn’t work, making an official complaint to the regulator.

Eric Stein, Senior Vice President of the Center for Responsible Lending, added the importance of having a lawyer or counselor draft a proposal for a refinancing plan to the lender. If they see a solution in front of them, they’re much more likely to act in your best interest. And as Carmen always says, make sure you print and save copies of everything. If you have a paper trail, you’re in a better spot if something goes wrong.

And then there’s the last option, courtesy of Ben Popkin, Editor of Consumerist.com. Cut through the red tape and go right to top by calling your bank’s executive customer service representative. While they don’t publicize it, many companies have an executive customer service staff who have the power to get things done that regular customer service cannot.

For Washington Mutual, check out the name and phone number for its executive customer service on Consumerist by following this link. For listings for other companies, click here.

Q: I heard on your show that this bailout is going to negatively impact the mortgage industry. I work for a national mortgage lender what does all of this mean for me?

At its very basic level, the crisis in the financial markets comes down to jobs. There will likely be more job losses coming, Carmen said, and not just in the banking industry. So while it’s never a good idea to pull all your money and keep it in your mattress, building an emergency cash stash is a good way to protect yourself in the event your job is in trouble.

Q: I've got 2 rental houses, $1.2 million in CDs (staggered in different banks), a SEP with $70K and $500K with Merrill Lynch. Should I invest more in real estate or am I diversified enough?

Carmen would not advise buying more real estate, especially if you’ve already got more than one property. The best thing to do, she said, is to maintain investments by consistently putting money in, checking every so often but without making any big moves. Gail Hillebrand,of Consumers Union, advised: save, diversify and rebalance, but not too often. Don’t move big chunks of your investments suddenly because you get spooked by the market.

Q: I'm looking to buy house and was wondering if now is a good time to buy or if I should wait for the government to maybe propose a plan and step in and if this happens if it will be cheaper of more expensive at that time?

If you’re looking to buy, buy right. Make sure you’ve got all three of Carmen’s C’s – great credit, the capacity to pay the mortgage along with other fees and expenses, and a good down payment as collateral. That will keep you in the clear.

Q: I have $50k in a mortgage real estate investment trust, how safe is it? And, is the current situation preventing lenders from making loans on good collateral?

REITs have some inherent risk by their very nature. Even after the Fannie/Freddie bailout, you can’t count on REITs. After all, no one thought Fannie and Freddie would fail, right? Gail Hillebrand added that there’s also the risk property values could go down if this bailout goes through but doesn’t stop foreclosures. If you’re going to invest in REITs, make sure it’s not too much of your pie and always take into account first your stomach for risk.

>>Need clarification on a term we used here or on the show? Check the Money Dictionary by clicking here.