Since foreclosure mess, homeless advocates report rise in encampments

RENO, Nev. - A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.

Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.

Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a “tent city” — an encampment of people who had nowhere else to go.

From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.

Nearly 61 percent of local and state homeless coalitions say they’ve experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report’s release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.

“It’s clear that poverty and homelessness have increased,” said Michael Stoops, acting executive director of the coalition. “The economy is in chaos, we’re in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future.”

Caught by surprise
The phenomenon of encampments has caught advocacy groups somewhat by surprise, largely because of how quickly they have sprung up.

“What you’re seeing is encampments that I haven’t seen since the 80s,” said Paul Boden, executive director of the Western Regional Advocacy Project, an umbrella group for homeless advocacy organizations in Los Angeles, San Francisco, Oakland, Calif., Portland, Ore. and Seattle.

The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans.

The city of Fresno, Calif., is trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood.

In Portland, Ore., and Seattle, homeless advocacy groups have paired with nonprofits or faith-based groups to manage tent cities as outdoor shelters.

Other cities where tent cities have either appeared or expanded include include Chattanooga, Tenn., San Diego, and Columbus, Ohio.

The Department of Housing and Urban Development recently reported a 12 percent drop in homelessness nationally in two years, from about 754,000 in January 2005 to 666,000 in January 2007. But the 2007 numbers omitted people who previously had been considered homeless — such as those staying with relatives or friends or living in campgrounds or motel rooms for more than a week.

In addition, the housing and economic crisis began soon after HUD’s most recent data was compiled.

“The data predates the housing crisis,” said Brian Sullivan, a spokesman for HUD. “From the headlines, it might appear that the report is about yesterday. How is the housing situation affecting homelessness? That’s a great question. We’re still trying to get to that.”

In Seattle, which is experiencing a building boom and an influx of affluent professionals in neighborhoods the working class once owned, homeless encampments have been springing up — in remote places to avoid police sweeps.

“What’s happening in Seattle is what’s happening everywhere else — on steroids,” said Tim Harris, executive director of Real Change, an advocacy organization that publishes a weekly newspaper sold by homeless people.

Homeless people and their advocates have organized three tent cities at City Hall in recent months to call attention to the homeless and protest the sweeps — acts of militancy, said Harris, “that we really haven’t seen around homeless activism since the early ’90s.”

In Reno, officials decided to let the tent city be because shelters were already filled.

Officials don’t know how many homeless people are in Reno. “But we do know that the soup kitchens are serving hundreds more meals a day and that we have more people who are homeless than we can remember,” said Jodi Royal-Goodwin, the city’s redevelopment agency director.

Those in the tents have to register and are monitored weekly to see what progress they are making in finding jobs or real housing. They are provided times to take showers in the shelter, and told where to go for food and meals.

Hopes for casino jobs dashed
Sylvia Flynn, 51, came from northern California but lost a job almost immediately and then her apartment.

Since the cheapest motels here charge upward of $200 a week, Flynn ended up at the Reno women’s shelter, which has only 20 beds and a two-week limit on stays.

Out of a dozen people interviewed in the tent city, six had come to Reno from California or elsewhere over the last year, hoping for casino jobs.

“I figured this would be a great place for a job,” said Max Perez, a 19-year-old from Iowa. He couldn’t find one and ended up taking showers at the men’s shelter and sleeping in a pup tent barely big enough to cover his body.

The casinos are actually starting to lay off employees.

“Sometimes I think we need to put out an ad: ‘No, we don’t have any more jobs than you do,’” Royal-Goodwin said.

The city will shut down the tent city as soon as early October because the tents sit on what will be a parking lot for a complex of shelters and services for homeless people. The complex will include a men’s shelter, a women’s shelter, a family shelter and a resource center.

Reno officials aren’t sure whether the construction will eliminate the need for the tent city. The demand, they say, keeps growing.

How We Got Here: It’s Housing, Stupid

NEW YORK (CNNMoney.com) — Even weeks after Brenda Clarke’s identity was stolen and thousands of dollars in illegitimate credit card charges were discovered, she is still saddled with extremely high interest rates on her credit cards and a damaged credit score.

“It’s been very frustrating, very time consuming,” she said.

Clarke’s situation is not uncommon. Approximately 15 million Americans are victims of identity theft each year, according to Gartner research firm. And although anyone with a social security number is at risk, safeguarding your information isn’t easy.

Identity theft occurs when someone uses your information to open credit cards or bank accounts, write bad checks or take out loans. Victims can be left with countless charges, years of bad credit and endless aggravation.

Proactive safekeeping of your personal information, including your birth date, social security number and credit card numbers, may be the most effective weapon against identity theft. But if you’re more interested in saving time than money, then there are also many identity theft protection services that will do some of the legwork for you - for a price.

But keep in mind, most services can only warn or insure you against I.D. theft after the fact. And once your identity has been compromised, good luck clearing your name and your credit report.

All three credit bureaus offer credit monitoring for about $15 a month. That includes unlimited access to your report and notifications of any changes to your credit file, plus a few fancy extras.

For example, Equifax’s ID Patrol searches suspected underground Internet trading sites for your personal information. Experian’s Triple Advantage sends you email alerts of suspicious account activity and TransUnion’s 3-Bureau Credit Monitoring includes identity theft insurance up to $25,000 with no deductible.

Other credit monitoring services are available from your bank. Wachovia’s CreditProtectX3 service costs $12.99 a month for daily credit checks. For $11.99 a month, Chase’s Identity Protection will also reimburse up to $100,000 of identity fraud expenses.

If damage control is what you’re after, identity theft insurance is offered by credit card and insurance companies for generally less than the cost of credit monitoring.

But while that may cover some of the expenses associated with identity theft, it does not reimburse you for any money that was stolen, which is often covered by your bank or credit card issuer. Many policies only cover nominal expenses for things like certified mail and long-distance telephone calls.

While it can’t protect you from the headaches associated with recovering from I.D. theft, insurance should cover lost wages and legal and out-of-pocket expenses, advises Linda Foley, founder of the Identity Theft Resource Center.

Policy terms and cost can vary widely. Foley suggests looking for an insurance policy with a premium under $50 and a deductible less than $250, otherwise “it’s not worth it.”

Even after paying for credit monitoring and insurance, experts agree that no identity theft prevention service is foolproof. “There’s not going to be any product out there that’s going to be able to completely guarantee that your identity isn’t going to be stolen,” said Demitra Wilson, a spokeswoman from Equifax.

While these services can throw up red flags at the first sign of trouble and help limit losses, “they’re not doing anything for you that you can’t do for yourself,” Foley said.

Shredding your mail, using unpredictable passwords and secure networks, keeping careful tabs on your bank statements and monthly bills and even monitoring your credit report can all be done for little or no cost at all.

Passwords should be at least seven characters, with numbers and upper and lower case letters, says Todd Feinman, identity theft prevention expert and CEO of Identity Finder, a company that sells software aimed at I.D. protection.

Consumers are also entitled to one free credit report a year from each of the three credit bureaus, Equifax, Experian and TransUnion. Bill Hardekopf, CEO of LowCards.com, recommends staggering the reports strategically so you’ll get one every four months. To get your report, go to annualcreditreport.com - the official site set up by the three credit bureaus to comply with federal law.

If you feel like you’re in greater risk, then setting up a fraud alert will ensure that creditors notify you before issuing credit in your name. Alerts can be set up for free through one of the consumer credit reporting agencies and last for 90 days.

For an even more aggressive approach, a credit freeze prevents creditors from issuing credit altogether and blocks others, including potential creditors, landlords and employers, from viewing your credit report. Freezes are free for identity theft victims, but for others can cost around $10 to activate, temporarily lift, or remove, depending on the state. The Consumers Union’s Guide to Security Freeze Protection lists each state’s security freeze laws.

The Identity Theft Resource Center advises that credit freezes are the best way to stop identity theft before it happens, but there’s a trade off. You won’t be able to apply for any new credit while the freeze is in effect, and it takes about three days for the credit agencies to unfreeze your credit.

But that could be a small hassle considering the alternative.

Little things add up fast. Learn from these mistakes and try these tips to start paying off your debt.

Sometimes the only way to stop a snowballing problem is to go back to the top of the hill and find out what started it.

If you’re up to your eyeballs in credit card debt, take a step back and recount your money missteps. Knowing your weaknesses could help prevent you from falling back into the bad-credit pit and show you a way out.

According to Gail Cunningham, vice president of business relations at Consumer Credit Counseling Service of Greater Dallas, a nonprofit financial-management service, consumers mired in debt make common financial blunders, most of which they can prevent with discipline and behavior changes. Learn from these mistakes and start paying off your debt.

Bad Habit No. 1: Misusing balance transfers
Transferring balances on high-interest cards to lower-rate cards can be an effective technique, but it’s easy to make it a good idea gone wrong. Transfer a balance onto a card with a low introductory rate and you can potentially save money on interest if you refrain from charging on it and focus on paying off the balance before that introductory rate expires. But most people continue to charge on the new card and wind up with more debt once the teaser rate expires, says Cunningham. In fact, new purchases may pull an altogether different interest rate. Read the fine print very carefully, and attempt the balance-transfer maneuver only if you can control your spending on the new — and old — card. See “Losing at balance-transfer roulette.”

Try this: If you can’t refrain from charging, balance transfers won’t get you out of debt. If you’re really in the hole, consider getting a part-time job and dedicating your earnings to your debt load. If that’s not possible, go back to your budget and cut back on unnecessary expenses such as restaurant outings and cell phone extras. Put the money you save toward paying off your balances. Pay for any new purchases with cash or a debit card.

Bad Habit No. 2: Not checking credit reports because you can’t change them anyway.
Wrong. If you have credit cards, pull your credit report at least once a year and check it for errors. (See “How to get a credit report for free.”) Purging your record of inaccuracies can be crucial for getting better interest rates, landing the job you desire and stopping an identity thief from ruining your credit rating. Your credit report also affects your credit score, which determines how high your interest rates will be on future loans. Dispute anything you think should not be there. The Fair Credit Reporting Act allows for the correction or deletion of inaccurate, outdated or unverifiable information, provided that a reinvestigation into the disputed data sides in your favor. Unfortunately, negative but truthful data must stay put. A Chapter 7 bankruptcy filing, for instance, will remain on your credit report for 10 years, a Chapter 13 for seven years.

Try this: You can request one free copy from each of the big three credit reporting bureaus, Experian, TransUnion and Equifax, every year. Why bother? Errors on your report, such as a payment marked late that came in on time, could raise your interest rates, lower your credit score and affect your ability to obtain credit in the future.

If you do find a mistake, send a correction letter to each of the credit bureaus that show the error. All three allow you to dispute errors online.

Don’t bother with so-called credit-repair clinics that aim to charge you hundreds or thousands to fix your credit record. “Anything you can legally do to repair it, you can legally do for free,” says Cunningham. Of course, if you’re not willing or dedicated enough to write those letters and follow up with the credit-reporting agencies, paying someone else to do it for you may not be such a bad idea. Better to have someone dispute the errors rather than no one. But be extremely careful in selecting such an organization — try to get referrals and seek out others who have been satisfied with the service.

Bad Habit No. 3: Failing to alert creditors about a financial hardship
You heard the rumor: Layoffs are coming to a department near you next week.

Don’t wait until it happens to worry about how to pay your bills. Do some damage control right away.

Try this: “The best time to negotiate is before the problem spirals downhill,” says Cunningham. Call the credit card company and explain the problem you’re about to have. Ask if they could temporarily lower your interest rate or extend your payment deadline. Some issuers have in-house help programs that provide such short-term services to customers.

Bad Habit No. 4: Thinking of ‘budget’ as a dirty word
The word may call to mind tedious self-trickery meant for those with low incomes, but everyone can benefit from deciding on certain amounts for spending — and sticking to the amount. It also makes sense to budget for known future expenses, such as quarterly insurance premiums, college textbooks and rent. Not saving up in advance means you’ll have to charge expenses or cut into funds set aside for necessities. Budget these fixed costs while you can handle small financial pinches.

Try this: To find out what’s draining your finances, keep track of where your money goes for a month. Use a spreadsheet, financial software or a pen and paper to categorize your expenses. This will reveal whether you’re spending too much on expenses you could trim, such as restaurant outings and gas. Then you can consider cooking at home more often or consolidating driving trips. Cut back as necessary without cutting out expenses important to you. Cunningham suggests that if you enjoy watching TV but don’t tune in to a majority of the 300-plus channels you have, cut back on your cable package instead of cutting out TV altogether.

For a detailed household spending plan, try this home budget work sheet. Or, get help creating a budget with a budget calculator. (For a really simple budget, try the 60% Solution.) Plan for future costs by figuring out the total amount you’ll owe and divide by the number of months you have until that day, says Cunningham. If you have money due next month, divide by the number of weeks you have and save that amount every week. For more help, see MSN Money’s Learn to Budget Decision Center.

Bad Habit No. 5: Using retail store credit cards to make use of discounts
Chances are, that card carries a high interest rate you’ll be forced to deal with if you don’t pay off your balance each month.

Try this: If you must charge your purchase, use your general-purpose credit card, says Cunningham. If you can’t pay off the balance, at least you’ll pay a lower interest rate. Limit the total number of credit cards you have to just two, if you can: one you can pay off each month and one with a low interest rate for those large purchases you’ll pay back over time.

Bad Habit No. 6: Procrastinating on creating an emergency fund
Learn to save for financial emergencies. Even if you feel robust and invincible, a single emergency room trip or car accident could force you to put large balances on credit cards, causing interest to accrue and more debt to pile up. “That rainy day will happen,” Cunningham says. “It’s not a matter of if, it’s a matter of when.” If your tire goes flat and you can’t pay upfront for the replacement, for instance, you’re stuck with charging it or reducing funds earmarked for necessities. That’s where the emergency fund fits in. See “Why you need $500 in the bank.”

Try this: Maintain an emergency fund of at least three to six months’ worth of living expenses, and keep your insurance policies up to date. Work toward that goal by socking away 10% of your take-home pay each month in a liquid savings account, says Cunningham. If you receive a raise or bonus, add that money to savings. Since you’re not used to the extra cash flow, you won’t miss it. If that seems impossible right now, read “The $0 emergency fund.”

Bad Habit No. 7: Paying bills in no particular order
While the order may not matter if you can pay all of the balances, it will matter if you fall short one month. Say you pay off the balances on your credit cards first, then find you can’t make the minimum on your house payment or monthly rent. You’ve put the roof over your head at risk.

Try this: “Pay for living expenses first,” says Cunningham. After the house or rent payment, necessities such as utilities, groceries and medical care should top the priority list. Next comes the car payment — you want to avoid repossession, obviously. On down the line, secured loans and co-signed debts follow in importance, then unsecured loans and credit cards. “Ideally, everyone can get paid, but if a choice has to be made, paying in this order will do a better job of keeping the home life stable.” (If you’re really in trouble and unable to pay right now, see “How to not pay your bills” for more on which bills must be paid and which can wait.)

Since bills often aren’t due in this order, you’ll need to work out a payment schedule and set aside money from each paycheck. See No. 9.

Bad Habit No. 8: Charging purchases instead of paying in cash or with a debit card
How many times have you charged services or merchandise when you had the money to pay with cash or debit? Insignificant purchases of $20 and $30 made several times over can quickly add up, particularly if you already carry a balance. Balances you can’t pay off each month mean paying interest charges and, subsequently, more money for items you could have bought outright, interest-free.

Try this: Make a habit of paying for purchases under $50 with cash, debit or check. Knowing that the money has to clear the bank sooner could help curb your spending habits. Just be sure to check your balance regularly to ensure that you have enough funds.

Bad Habit No. 9: Making credit payments late
After all, it’s only a $39 late fee, right? Besides wasting money you could’ve put toward the balance, a payment that arrives at least 30 days past due can throw your account into default and triple your interest rate. Plus, other creditors may start charging you a default interest rate as well, thanks to a universal default clause buried in your contract.

“Creditors are constantly reviewing your credit activity, and if they see you falling behind with one creditor, even if you have a perfect payment history with them, they can raise your interest rate,” Cunningham says.

Try this: On a calendar, mark upcoming paydays and payments that should come out of that paycheck, she says. If you’re mailing payments, send them seven to 10 business days in advance. Better yet, sign up for online bill pay. Just check that the address on file and the address on the statement match, or the payment might not arrive on time. If you’re still late, call the creditor, explain the situation and ask them to forgive the late fee. Check your credit report and be sure the information shows up correctly.

Bad Habit No. 10: Making the minimum payment only
Paying the minimum is better than paying nothing, but it doesn’t do much to pay off most balances and forces you to keep paying interest. By paying interest on interest, you lose any savings from buying a dress on sale, Cunningham says.

Try this: If you can afford to pay more or in full, go ahead and pay as much of the balance as you can. You never know when you’re going to have a tough month. Pay in full every month and you can avoid interest charges altogether.

Or, if paying more than the minimum proves difficult, consider working an extra part-time job or decreasing your expenses — or both, says Cunningham. Put all of your extra earnings toward the debt. Use the minimum payment calculator to see how much you’re saving in interest charges.

When these things fail… and you find yourself in too deep, NFS can help in getting you back on track to securing a financially secure future in no time. The first step - recognition, is always the hardest.

If you carry a balance on your credit card and you get an offer for a 0% interest rate to transfer it, is there any reason not to just jump at it? In a word, yes.

There is No Such Thing as a Free Lunch

Most low or no balance transfer offers come with some sort of catch. Here are the most common ones:

1. A Short Introductory Period, After Which the Interest Rate Goes Up

In some cases the rate may go way up. Read the fine print to figure out what the interest rate will adjust to after the introductory 0% rate period is over. Then ask yourself if you will be able to pay off the balance before then.

It still may be worth it to you to transfer the balance, then shop for another low-rate card after the introductory period is over. Just know what you’re getting into before you make the switch.

2. A High Balance Transfer Fee

Some balance transfer offers come with high fees attached — some as high as 3% of the balance plus a flat fee of $50 or $75. If your credit card balance is 5,000, that’s $200 to $225 right off the bat.

If the introductory interest rate is only good for a few months, it may end up costing you more money to transfer the balance than if you stuck with the card you’re carrying now.

3. A High Rate for Purchases

One of the common tricks banks use to make money from low credit card balance transfer offers is to offer a higher rate on purchases. So you get a 0% interest rate on the balance transfer, but your rate on purchases is 19% or more.

Not only that, but when you make a payment, it goes toward the 0% portion of your credit card balance first, not the higher-rate portion for purchases. So say you transferred a balance of $5,000, then made a purchase for $20. You’d be paying 19% on that $20 item until the $5,000 balance is completely paid off. Not such a good deal, is it?

What to Look For in Balance Transfer Offers

The best balance transfer deals have:

1. No balance transfer fees at all
2. The teaser rate for the life of the balance (or at least 12 months; the longer the better)
3. A relatively low interest rate for purchases
4. No annual fee

To figure out whether or not a balance transfer is right for you, check out these debt relief tools and calculators. To find out whether you need debt help from a professional organization, read this article about consumer debt management plans.

For many the issue of credit card debt can quickly overwhelm a household budget and create unwanted stress and anxiety. When you are at the store or the gas pump and you look in your wallet you make a decision at that point based upon your finances as to what piece of plastic will fund that transaction. If you have the money in your checking account most looking to keep balances on credit cards low will resort to a debit as opposed to using a credit card for that transaction.

If a credit card is used it is usually done with the intentions of paying off when the statements comes in the mail. When the bill is received a reconciliation is done against the checking to see if the funds needed to pay off the account are available. Hopefully they are if not the consumer can make a payment just to satisfy the monthly payment amount. This leads to the balance rolling over to the next month.

This roll over is when it all begins. If you used a $600/month roll over scenario at the end of a year you would accrue a $7,200 dollar balance on your credit card or cards. Making the minimum payment on that debt would take you 10 years to pay off with interest calculated into your payments.

Should you and your family choose a credit card over a debit card make sure that you can pay it off at the end of the month. After a few years of this behavior you could have 20-30k in credit card bills and no end in sight. If you have already reached this point you may wish to research debt management options for you and your family.

Credit card debt have you drowning financially? You’re not alone. The average American household carries $9,205 in credit card debt, according to CardWeb, an online market tracker. Not managed properly, this debt can come to eat up all of your disposable income leaving little or nothing for bare necessities. Some people in this situation respond by charging more but that will only obtain you further in trouble.
Fail to plan and you plan to fail
There is this cliche that states that in generally speaking, if you or someone that understands and has expert knowledge fail to plan you plan to fail. The first thing you ought to do is evaluate where you want to be. Do you want freedom from your credit card burden? Is so, you have to develop a different action plan to the one and its most important to understand if you are currently following. Makes sense doesn’t it?
Start by listing all of the debt you currently owe along with a list of what your monthly obligations are for each debt. At the top of the page, list the amount of income available to pay these debts after essentials like food, hydro, and such.. are taken out. When listing essentials, it’s important to include a sure amount for clothes, medical and entertainment because no matter how so much more wonderful your intentions, you will spend some money in these areas. if you or someone you know budget ahead for them, and its most important to understand if you are less likely to just waste it.
Start paying one credit card first
Knowledge can give you a real advantage. Don’t try to pay off all of your credit cards at once. Doing this will take too long and end up discouraging you. You’re better off concentrating on getting one card paid off, then putting the money you’ve freed up from that one card and applying it to the next one and so forth.
Which credit card charges you the highest rate of interest? Start with that one. Pay the minimum due on all of your credit cards expect for the one you have chosen to focus on first. On that card, put as much money as your budget allows onto the card after all of your rates and debts have been factored in. Keep doing this month after month until the credit card balance goes to zero.
Loose all credit cards except one
Plan to keep one major credit card for unexpected rates, auto rentals and emergencies. obtain rid of all your other cards as you pay them off. Most consumers can’t resist the temptation to spend money on a clean card. If this describes you, you’re better off without many credit cards than and its most important to understand if you are to obtain right back into deep credit card debt.
Follow this plan, and depending on how much you owe, in a year or so, you would have pretty much achieved credit card debt freedom!
Even if you don’t know everything, you’ve done something worthwhile: you’ve expanded your knowledge.