THE Cambridge Connection - Episode 4

It’s just a basic way where a certified counselor will help you come up with solutions. Some of them may be the programs that Cambridge have, some not. Debt Settlement is where a company, and you’re going to hear advertisements like there’s a big secret that you don’t know where you don’t have to pay your creditors everything you owe them, basically 50% of what you owe them, and what they do is they send cease and desist letters to creditors so the creditor cannot contact you, and then you deposit money into a trusted account, and then after you go behind for 12, 18 months, and your accounts are in collections or ready to sue you or garnish your wages, they’ll step in and settle those debts for less than what you owe, which will show up on your credit. Your credit score will be trashed, and then you’ll be on the road to recovery of having that information hurting you every time you want to apply for something financially. And it’s not just that you can’t get approved, you’ll get approved at much higher rates, which just will cost you more money.

Show preview and sponsor introduction

So again, The Cambridge Connection is a show that’s going to help you answer these questions. We’re going to hear true life success stories, and meet the real experts with suggestions and answers on how to empower your financial wellness path. So don’t go away. We’ve got my co-pilot, Arianne, as always. We’ve got Justin Lally, the Home Equity Conversion Mortgage Manager from Cambridge Credit Counseling here to answer your questions in our Real People, Real Problems segment.

You’ll be hearing from Tina Marie and her Cambridge Credit success moment, which is absolutely incredible. And then my financial guest this week is Millie Parzyczowski from Homebridge Financial Services, and we’re going to talk about credit and the impact it can have on qualifying for a mortgage. This is Gordon Oliver, and you’re listening to The Cambridge Connection right here on WHMP. If you’re having trouble paying down debt or dealing with high interest rates on your credit cards, you need to call Cambridge Credit Counseling. Cambridge Credit Counseling is a non-profit debt relief agency located right here in the Pioneer Valley.

They’ve been helping consumers pay down debt safely for over 25 years, and have helped over 2 million people. com, A-plus with the Better Business Bureau, and they’ve won the Non-Profit of the Year award. So if you’re struggling to pay down your credit card debt, call Cambridge. The call is free and confidential. 1-800-CAMBRIDGE Welcome back.

Co-pilot chat on debt stats and football spending

This is Gordon Oliver with The Cambridge Connection, and I’m here with my co-pilot and digital maven, Arianne. Hello, Arianne. Hey, how’s it going? It’s going great. So why this show?

I wonder if people wonder that. Got some stats to throw at you. 56 trillion after the fourth quarter of 2020. 68 trillion. That sounds like a lot of trillions.

It sounds like a lot of money. So I think one of the things that’s important for listeners to understand is that this show is making an impact to give people information to see how they can deal with debt. And we know by the stats that people have debt problems. I think it’s really easy to ignore finance and money and dollar signs because there’s so much of it, and it’s happening so fast. Would you say the more you make, the more you spend sometimes?

Amen. So if you look at these mortgage values, obviously they’ve been through the roof like they were in 2008. And look what happened then. Oh, absolutely. And they always say that it’s a seller’s market.

So many people are waiting for it to be a buyer’s market, and it just doesn’t look like it’s going to happen anytime soon, especially after the pandemic. Which equates to you pay more for what you get and not really have it be worth it. Yep. All right. So we’re in football season.

What’s this, the third week of football now? Your guess is as good as mine. Well, it is the third week of football. And I saw an article that we shared that said that football has an impact on what people are spending. I guess so.

So 40% of consumers are planning a special splurge for the football season to make up for last year since they couldn’t do it last year. What do you think that special splurge would be? Well, I’m sure it’s jerseys, gear, stickers, banners, you name it. So another statistic, 51% of Americans hope to attend at least one live football game this season, including 13% who will travel to another city and 6% to another state. You also have one in four consumers say it’s somewhat likely they’ll incur credit card debt due to their football spending this season.

As an example, 27% of football fans will shell out $1,000 plus on the sport this year. So I wonder how much of that is going to go to betting and gambling. Well, it’s amazing that you bring that up. 32% of avid football fans say their spending on the sport has caused an argument with a loved one. Let’s throw that in there.

And then you add the fantasy football arena that’s now come into play that’s billions of dollars are being spent on in a season. So these are the types of things that get people in trouble. Now you see states are legalizing gambling. How many are we at now? I believe we are at eight because Connecticut just jumped on board.

And we have seven more that are in the works, including our home state, Massachusetts. So that means that people are basically not needing to go to Las Vegas to gamble. Absolutely. And there are all different kinds of gambling, too. So it’s not just poker.

It’s horse racing. It’s fantasy football, obviously. But there are casinos that are going online. So they’re offering a lot of their games online that people can gamble on. And people will.

Real people real problems reverse mortgage segment

And if you’re just joining us, this is Gordon Oliver with The Cambridge Connection with my co-pilot, Ariane. And now we’re going to turn to our Real People, Real Problems segment with Ariane and just a little information about who Ariane is. She’s qualified. She’s a licensed educator with her master’s in education from Boston University. We also have our special guest here, Justin Lally, who is the Home Equity Conversion Mortgage Manager from Cambridge Credit Counseling.

Welcome, Justin. Thank you. Great to be here. So we’re going to talk a little bit about what a HECM is. Can you tell us what a HECM is, Justin?

Sure. HECM is short for Home Equity Conversion Mortgage. It’s the name of the government-insured reverse mortgage loan program. It’s the most common reverse mortgage product out there on the market today. So a reverse mortgage, who would take out a reverse mortgage?

So reverse mortgages are designed for older Americans, age 62 and over primarily, for those that want to have access to some of their home equity that they may not otherwise be able to access. And they could call 1-800-CAMBRIDGE to talk to somebody about that? They can, yeah. Anybody that wants to apply for a reverse mortgage, they have to complete counseling with a third party, a nonprofit, with an agency just like ours here at Cambridge Credit. HUD approved, right?

That is correct. And what’s the main reason that you have to do this counseling? Counseling really is about education. So it’s to make sure that you’re discussing everything with someone that’s impartial, someone that has no interest, no financial interest in your decision. So that a mortgage broker can’t go, oh, you want to take money out of your home when you’re 65?

Sign right here. Let’s get it done. Awesome. All right. Ari, what’s our Real People, Real Problems segment today?

Hey, guys. So I’m so excited to be here for our Real People, Real Problems segment where each week I pull questions from our social media followers to answer here on the air. So we get questions sent in from all over the country on just about every financial topic you can think of. So as you know, we’ve got Justin Lally here to answer these questions. So we are going to dive right in.

Our question comes from Audrey B. from Michigan, and she wants to know how she can help her parents who have really suffered throughout the pandemic. She wants to know more about reverse mortgages. And she says, hey, Cambridge, I want to know more about reverse mortgages. See, I told you.

My parents bought a home when they first got married, and now that they’re both retired, their home and property is definitely worth much more. I have a very basic understanding of how a reverse mortgage works, I think. I get that they’re borrowing against how much their home is worth, but where does the money come from, and how does it get paid back? Will my parents need to start working to pay it back? Okay, maybe I don’t know as much as I think.

Will I need to pay it back if they move into assisted living? Basically, when is this a good idea? Okay, Justin, a lot to unpack here. Start wherever you want. No, no.

Great, great question. So reverse mortgage is a loan that allows you to use part of your home equity. You can use that equity to obtain cash proceeds, and they can be used in almost any way that you wish. And it’s a loan that doesn’t have to be repaid until the last borrower either sells the house, otherwise permanently vacates the property. Borrowers do have obligations, most importantly being paying property tax, homeowner’s insurance, general maintenance, and the upkeep of the property always important.

So failing to keep up your obligations could also cause the loan to become due and payable. As for the reasons why somebody might take out a reverse, most common I would say is to supplement income, whether it’s to help pay living expenses or medical-related expenses. So it seems like since, yeah, I know she didn’t really go into what the problems were, but if she’s having financial issues, excuse me, if her parents are having financial issues from the pandemic, this might be a good idea for her. It certainly is a way to help supplement fixed income and other assets. Some folks take out a reverse mortgage just to maybe afford some extras, improve their quality of life.

So it can be a really great financial product for many, many reasons, not just a needs-based purpose. So just to clarify, she, Audrey, is never going to be responsible for the mortgage or for the reverse mortgage at all? Is there anything she needs to worry about being connected to this? The only thing is, as the estate or heir, when her parents permanently leave the property, and one example would be moving to assisted living, like she had said, so when the reverse mortgage is due, then as the heir or estate, she has a couple options, and that most commonly is just to simply sell the home to repay that final balance. And then the estate heirs retain any remaining proceeds from that sale.

Or option two, she could purchase the property. If somebody wants to keep the home, for example, that is an option, and that would require that she pay that full balance with her own money or some other assets. All right, if you’re just joining us, this is Gordon Oliver with The Cambridge Connection here with Ariane and Justin Lally, the Home Equity Conversion Mortgage Manager from Cambridge Credit Counseling. Cambridge Credit Counseling offers many different programs as it relates to a mortgage, and this is a very, very important one that we just spoke about because it’s dealing with senior citizens making financial decisions and families being on the same wavelength. Perfect.

All right, well, thank you so much for being here, Justin. One of the best things about working alongside Cambridge is that there are so many experts in so many areas of finance, truly. And well, that’s it for me this week. Join us next week, same bat time, same bat channel, for our Real People, Real Problems segment, where we answer your questions on the internet. org.

Tina Marie success story segment

Let’s talk. Have a great week, everyone, and stay positive and test negative. We’re going to take a short break, and then we’ll be back with Tina Marie and the Cambridge Credit Success Moment. This is Christopher Viale from Cambridge Credit Counseling. Lots of people have gone through tough financial times.

They’d like to buy a house, but their savings and credit aren’t where they need them to be. The truth is, if you have a score in the 600s and can put down just 3%, brokers like Millie Parsichowski at Homebridge Financial Services can probably help you get into that home now, and maybe with no money down if you complete a first-time homebuyer’s course like the one we offer at Cambridge. com now. Welcome back. This is the Cambridge Connection, and I’m your host, Gordon Oliver.

So in creating this weekly show, I thought it would be important to share the various success stories of consumers who have worked with our partner company, Cambridge Credit Counseling. And who better to bring those stories to life is none other than Tina Marie, an NFCC-certified credit counselor at Cambridge Credit Counseling, who for more than 20 years has helped thousands of people find their way out of debt and back on the road to financial health. Welcome, Tina Marie. Hi, Gordon. So nice to be here to be able to share some success stories.

It’s great to talk about it, isn’t it, when you’re seeing people go from being in debt trouble to being successful? Absolutely. Today I want to talk about Brian from California. Brian’s brother fell ill, and Brian had to take some time off of work to take care of him. So he lost some income, ended up using his credit cards to help his brother with medical expenses.

Everything went OK then, and then he realized that he owed $181,000 in debt, and he was not able to make his payments. His account’s charged off. Can you explain for the listeners what a charge-off is? Absolutely. So a charge-off is a write-off to the company.

A lot of people assume if an account charges off, they don’t have to pay it. That is not true. You are still liable for the payments. So it’s basically an account that was with a creditor that gets sent to a collection agency? Sometimes.

Sometimes it gets sent to a collection agency. Sometimes the original creditor still holds it. They can still collect on it just because it’s charged off. They can still garnish wages, attach liens to people’s property. Brian learned that the hard way.

Well, you know, it’s funny. In the beginning of the show, we talked about how football, we’re three weeks into football, and people are going to be overspending on gear, jerseys, gambling, fantasy football. But people sometimes assume when people get in debt troubles that it’s just because they were irresponsible, and that’s not always the case. This is a perfect example. Exactly.

He helped out a family member medically. If I were in the position, I’d probably do the same thing. If you’re just joining us, this is Gordon Oliver with The Cambridge Connection. So walk us through how you helped. Well, ironically, Brian applied for a new job.

And not only do they do a background check, they do a credit check. And the employer brought up the charge-offs. And in order for Brian to be gainfully employed, he had to take care of this debt. And bankruptcy was not an option. I’m going to guess this is not the first time you’ve seen this happen.

Not at all. Not at all. So what were we able to do is we took his $181,000 worth of debt. Oh, my goodness. Yeah.

But we put him on a payment plan, an affordable payment plan. It was $3,600 a month. But the company that he was working for, he was going to be able to afford. So once we got him on that plan, he got hired. Now he’s gainfully employed and on his way to financial freedom.

So the program that Cambridge Credit Counseling devised, and you as the counselor, showed the employer that he’s taking care and being responsible with the debt, which got him the employment. Absolutely. That is truly incredible. And he really wanted to jump on it. He was really eager to get started.

We got him going within two weeks. That’s amazing. So when you started with him, what did it seem like he felt like? I actually felt bad for him because I knew he wanted this job. He had to have the job.

He wanted to pay back the debt. But because of the situation he was in, he was afraid that he wasn’t going to get hired. Amazing. And if you’re out there and you have this kind of a situation where you’re just struggling with debt, please call 1-800-CAMBRIDGE and talk to a professional like Tina Marie, who does nothing but help people with debt problems every day. We’re going to take another short break and we’ll be back with our special guest this week, Millie Parzyczowski, Mortgage Loan Originator for Homebridge Financial Services.

Credit and mortgage discussion with guest

Hi, this is Millie Parzyczowski, Certified Mortgage Advisor with Homebridge Financial Services, NMLS 29841 and NMLS 6521. There are many myths when it comes to buying a home. I’m here to bust the down payment myth. Did you know you can purchase a home with as little as 3% down? Or if you meet certain first-time buyer criteria, 0% down.

I’m happy to answer any questions you might have in regard to buying or even refinancing a home. com. com. Welcome back. This is Gordon Oliver, your host of The Cambridge Connection, joined by my special guest, Millie Parzyczowski.

And we’re going to talk today about credit and the impact it can have on qualifying for a mortgage. Welcome, Millie. Thank you. So Millie, tell the listeners, first of all, a little bit about yourself. You’ve been in this industry for a while and how they can find you.

So I have been doing mortgages for 32 years as of last Saturday. And I’ve found my passion when I found this job. I love helping people find their path to homeownership. Experienced in all types of mortgage, licensed en masse in Connecticut. com slash Millie P.

Millie spelled M-I-L-L-Y-P, as in Peter. So let’s talk about credit and how it can impact a mortgage. So credit, there’s many facets to credit. And I guess in my lifespan as a mortgage originator, I’ve seen everything from horrible to wonderful. I’ve learned some things, some different ways of looking at credit that a consumer may not understand.

One thing I always found important is that they need to know what’s on their report and not go necessarily to a person like me to pull their credit, but pull their own. Be aware. They’re the only ones who can control their credit, other than the creditors who report the things that they do. com, is that the one you recommend? That’s the one I prefer.

You’re allowed one free one from each of the agencies. There’s three agencies once a year. So you could do them all at the same time, or you could space that and do one in January, another one in June, and another one in, say, November. Then you’re always keeping an eye on what’s happening on your reports. Especially with identity theft out there, it’s good to be watching the entire year to see what’s going on with your report.

Absolutely. And sometimes, you know, maybe you had a little blip, and you contacted the creditor, and they said, no problem, we won’t report that. And then they do. So it’s being on top of it so you can get those things corrected right away before too much time goes by and everybody forgets what happened. Absolutely.

If you’re just joining us, this is Gordon Oliver with The Cambridge Connection, here with my special guest Millie Pazuchowski. So let’s talk about the process of helping somebody to obtain a mortgage. So obtaining a mortgage starts with, you know, gathering documents. Usually, you know, we need to document your income. So tax returns, W-2s, and pay stubs.

We need to document your assets, which includes bank statements, your retirement fund. If you’re getting a gift, the source of the gift, all of those things can be compiled into assets. And then credit. We pull your credit, we identify if you have any issues, and help you understand what’s causing a low credit score, or what’s causing, you know, something that’s on the report you thought was already taken care of, and advise you on ways to resolve it. Do you see a lot of first-time homebuyers?

I see a ton of first-time buyers. And what kind of commonality comes with something, someone being a first-time homebuyer? So first-time buyers usually don’t have a lot of money in the bank. They’re working toward it. They are concerned about getting pre-approved.

And, you know, they sometimes take, it’s a little hiccup when we say, well, your credit score is not quite there, but let’s work on that. Let’s find ways for you to fix that. And then, you know, fear. It’s guiding them toward finding the education they need so they feel comfortable moving forward. What are some mistakes that you see for people trying to get into a home?

So mistakes that I see usually relates to credit, but sometimes it could be, you know, they got mad at their boss and quit their job in the middle of the process. I’ve had that happen. And, you know, it could, I had another customer who was all set to go and then her brother got arrested and she used her savings to bail him out. Oh boy. So things happen.

Life happens. With that said, we’re in the middle of COVID-19, and obviously no one really knows the future. Many people were unemployed or laid off. How can you advise some of the people out there that don’t have a stable job history because of the pandemic? So job history, the way that a lender looks at, a mortgage lender looks at your job history is if you were working and able to work and you were working and then lost your job because of COVID, and I guess the restaurant industry is one that comes to mind because a lot of people lost their jobs in that industry and not necessarily going back to that.

Changing a career, so going from working in a restaurant to filing documents or, you know, doing research, whatever their choice is, they have to have a solid one-year history of the new job so that we know they’re not going to give it up after three months because they really didn’t like it. If you’re just joining us, this is Gordon Oliver with The Cambridge Connection, here with my special guest Millie Parzyczowski. With what we just talked about, about unemployment, what advice path can you give people if they’re wanting to take a mortgage out and buy a home? Obviously, we are going to look at job stability. That’s one of the main things.

If they’re in the same job but had a time off because of COVID, we’re using an average of their income over the last two years. So at this point, we’re almost a full year through most people being back at work, which helps a lot because prior to that, we were using 2020's income as the average because when the prior year was lower than the current year and the prior year, we have to use the low. Now, this year is taking over. They’ve been back at work long enough that the average is coming back to where it should be. If they changed jobs and changed a company, we actually use their current earnings.

So if they left one company because they got laid off and that job wasn’t open, they went to a similar job someplace else, even though there may be a five, six-month gap, that’s okay. We use their hourly rate times their number of hours. Got it. So from a counseling perspective, we see people way over their head in mortgages. Obviously, the housing values have gone through the roof.

So what is the percentage of a person’s income that would be reasonable to spend on a mortgage each month? So what I advise my clients first is to do a budget because everybody’s lifestyle is different. I don’t want to say, oh, always use 30% because that’s not everybody’s life. Some have childcare expenses that we don’t count. They may have medical bills that we don’t know about.

If they’re paying them on time, they don’t show up on the credit report. So everybody’s life is different. The rules say that their total debt ratio with house and all other debt can’t exceed 43% for a qualified mortgage. We can do higher than that. It could be somebody who’s going to pay their car off in the next year because it’s almost done, but it’s not quite done.

Again, everybody’s lifestyle is a little bit different. Maybe they have somebody else living with them that’s helping with the mortgage, and that’s going to go on. So I typically advise my clients to stick to about one week’s pay, one week’s take-home pay. That’s a conservative effort. We have both seen people get into trouble with debt.

So obviously, on a counseling perspective, we’re a little bit more conservative. But the key to it is a budget. You’ve got to have a budget. You’ve got to know what you’re willing to spend and what you think that you’re going to be stable spending when you get into a home. Exactly.

So before we wrap up, any advice that you can give to the consumers listening about getting involved in a mortgage? Do your research. Find the tools. You can reach out to me. I’m happy to give you a list of things that you can start working on.

There are classes you can take for homebuyer counseling before you get into it. Cambridge Credit Counseling has that first-time homebuyer course. And those certificates are good for 18 months. That gives you the lead time that you may need. So with Cambridge Credit Counseling, Millie, you refer people to them for first-time homebuyer service.

They also provide reverse mortgage counseling, foreclosure intervention. And you’ve referred people there and have had good success? Absolutely. First-time buyers, one of the first things I tell them when they’re seriously ready to move forward is that they need that first-time buyer course. And if they’re buying a multifamily, they also need the landlord course.

I’m sure people come to you that are not mortgage ready. Absolutely. And I put them on a path. We discuss what their goals are. When they want to achieve them.

And we direct their strategy toward working toward that goal. Millie, thanks again for joining us. So before we wrap this up, can you please tell people again where they can find you? Yes. My phone number is 4-1-1.

1-3-3-7-4-8-1-2-4. com slash Millie, M-I-L-L-Y, and P as in Peter. And if you’re in the market to buy a home, Cambridge Credit Counseling has some of these courses that are necessary like the first time home buyer. If you’re a senior citizen and you’re looking to get equity out of your home, they also have reverse mortgage courses that are extremely important to get certified so that senior citizens understand what they’re getting themselves into if they start taking equity out of their home. And of course, foreclosure intervention for those that are having a little bit of difficulty with paying their mortgage now.

Yes. Been a pleasure having you. Thank you. That’s a wrap for this week. Thank you to my special guests, Justin Lally from Cambridge Credit Counseling and Millie Parzyczewski from HomeBridge Financial Services.

And thank you to everyone out there tuning in. 5 FM and 1400 AM at 930. org. Follow me at Gordon, no cares. That’s G-O-R-D-O-N-O-C-A-R-E-S.

Show wrap up and new show promotion

On Twitter, and if you’d like a free consultation with a counselor from Cambridge Credit Counseling, just call 1-800-CAMBRIDGE, where counselors are always standing by to answer your credit and debt questions. Remember, it’s a free call to ♪ 1-800-CAMBRIDGE ♪ Hey everyone, Gordon Oliver here, and I’m the host of the brand new Saturday morning show, The Cambridge Connection. 30 AM, we’ll spend 28 minutes together that will change your relationship with money for the better. I’ve been a financial counselor for 20 years, and I’m here to get you excited about being in financial control. Join me next Saturday right here on The Cambridge Connection.

30 AM, here on WHMP.