Tagged: finances

Michigan Radio and Changing Gears are collecting stories about how people are planning ahead in a tough economy, and we’d like your help. What’s on your mind as you plan for what comes next?

You can follow this link to share your thoughts.

We want to hear from you – whether you’re planning for retirement, saving for a home, sending kids to college, or just starting a career. If you’re retired, have you had to make some adjustments?

Yesterday, we brought you the story of Buy Here-Pay Here dealerships in the Midwest. These are places where the dealer finances car loans himself (BHPH is sometimes called in-house financing.).

Basically, he is the bank and he takes on all the risk. That’s especially true because BHPH dealers cater to people with bad credit – deep subprime customers who typically have credit scores less than 550.

It’s not hard to find people who are out of luck, out of work, and grateful for the opportunity to finance a car at all. But that opportunity comes at a steep price, which is either folded in or added on in the form of interest rates up to 25 percent.

So here are six tips to consider if you’re thinking about Buy Here-Pay Here:

Detroit Mayor Dave Bing addressed his city’s dire financial straits last night in a televised speech in which he said, “simply put, our city is in a financial crisis and city government is broken.”

“To avoid running out of money by spring, Bing says the city needs to do a whole range of things almost at once. They include increased health care and pension contributions for everyone, including retirees; and 10-percent wage cuts rather than furlough days for current employees. Bing says that needs to include the city’s public safety officers. Those departments eat up about 60% of Detroit’s budget. He adds the city needs to privatize some services—including public lighting, and to some extent its dysfunctional bus system,” Sarah Cwiek reports.

Cwiek was at the mayor’s address and says, “many think it’s only a matter of time before Detroit gets an emergency manager—and some, including Detroit City Council members, think the lack of specifics and deadlines in Bing’s speech made that even more likely.”

This morning, The Detroit Free Press had headlines that included an editorial titled, "Not good enough, Mr. Mayor," and a column by Stephen Henderson, "Numbers don't add up anywhere near city's needs."

The current credit crunch has made it harder for people to get loans from a bank. Gone are the days when you could walk into your local bank branch, flash your credit score and walk out with a loan. So many are turning to their friends and family for help...but is that a good idea?

To lend, or not to lend

When Pete and Michelle Baker wanted to buy a new house, they needed money for a down payment. Their down payment was tied up in their old house, which they hadn't sold yet.

In 1950, more than half of Americans owned their homes free and clear. No surprise that number has shrunk over the years.  But those who count themselves mortgage-free are still out there. The 2010 U.S. Census shows 1 out of every 3 homeowners owns their home free and clear. In a story produced for Marketplace Money, we look at what it takes to become mortgage-free.

Meet the Murphys

Mike and Kate Murphy live in a working-class neighborhood of Chicago, with two of their kids, Becky and Tommy, and their pet fish. They bought their charming, 3-bedroom brick house in 1996 for $156,000.

They originally started with a $110,000 mortgage. Mike Murphy says it was " obviously the largest mortgage we had ever taken out."

At the time, Kate brought in $30,000 a year, designing theater costumes part time. Mike was making $50,000 as a public school teacher:

At first they paid $1,100 a month on the mortgage. Refinancing dropped the payment to just under a $1,000. But they decided to pay a little more each month -- first $100, then $150 more.

Fast forward 13 years and they owned their house free and clear.

President Obama once considered Michigan Governor Jennifer Granholm for a supreme court judgeship.

Now, it looks like the administration was considering her for another job: the head of the new consumer financial protection agency.

But Granholm has declined to be considered for the position.

The Detroit News reports:

Former Michigan Gov. Jennifer Granholm said today she has no plans to head a new federal agency charged with protecting consumers of financial products such as mortgages and bank accounts.

Reuters reported that Federal Reserve board member Sarah Raskin also is under consideration to head the new consumer protection body called the Consumer Financial Protection Board.