AMERICAN CONSUMERS HELPED BY CAMBRIDGE CREDIT COUNSELING TELL THEIR STORIES

Credit counseling participants reveal how the economy has changed their lives.

Tremendous losses in 401(k) balances, historic numbers of foreclosures, and increasing credit card rates – it all sounds like a Hollywood screenplay about a financial apocalypse, but this is the reality that millions of Americans are experiencing today. Last week, Cambridge Credit Counseling president Christopher Viale reached out to a sampling of the tens of thousands of consumers his agency has counseled over the last six months, encouraging them to share their stories. Dozens responded, revealing how the economy has dramatically altered their lives. Many of these consumers would welcome the opportunity to speak with the media.

“The initial purpose of this outreach was to demonstrate that not enough is being done to help millions of hardworking Americans, and that we have a solution, Home Sweet Home, that deserves serious consideration,” stated Christopher Viale, President and CEO of Cambridge Credit. “In response, we received a number of very moving accounts from everyday people who will continue to struggle, despite the administration’s efforts.”

Cambridge sent the following message to individuals who had previously reached out to the agency for counseling.

“Over the last few weeks, our Home Sweet Home initiative has generated a good deal of interest in the news media. Within that time, I have worked to gain support for the initiative and to create awareness about the financial strain many of you and your loved ones may be experiencing. On St. Patrick's Day, I traveled to Manhattan to speak with reporters about the reforms we are championing, as well as the services Cambridge provides every day.

Several reporters have requested to speak with you, our clients. Specifically, the media would like to interview people who have experienced any of the following circumstances:

• The inability to qualify for the Obama Administration's housing program
• The inability to understand the requirements of the Obama Administration's housing program
• A reduction in your credit limit on your credit card(s), resulting in diminished credit scores, higher interest rates, and/or reduced access to credit
• The inability to maintain payments as a result of changes to the terms of your credit card account(s)
• Overtime, bonus or other wage reductions that resulted in difficulty keeping up with increases in the cost of living

If you've experienced any of these situations, please send me an e-mail outlining your circumstances. My address is cviale@cambridgecredit.org. I will read each and every one of your responses and do my very best to reply to you in a timely fashion. Additionally, I will share some of your stories with the reporters who reached out to us for information. Some members of the media may wish to conduct a brief telephone interview with you, so please indicate your willingness to speak about your circumstances, as well as the best time and telephone number to reach you, if you'd like to participate. I will provide you with advance notice in the event that your story is chosen.

I thank you in advance for your time and effort in helping us to bring focus upon the issues that are affecting you most in these trying economic times. Your participation is greatly appreciated and will help provide insight into the plight of struggling Americans.”

If you are writing a story about how the economy is affecting everyday people and wish to speak with any of those who responded to Cambridge’s query, please contact Christopher Viale at 413-821-6919 or cviale@cambridgecredit.org.

ABOUT CAMBRIDGE CREDIT COUNSELING CORP.
Cambridge Credit Counseling Corp. is a professional debt counseling agency dedicated to educating young adults on the importance of sound financial management, and to providing financially distressed Americans with education and debt management services appropriate to their needs. For more information on this article or to schedule an interview, please call 413-821-6919.

Visit Cambridge Credit Counseling Corp. online at http://www.cambridgecredit.org/. To learn more about Cambridge and the community, visit www.youtube.com/CambridgeCredit.

WAITING FOR GEITHNER: CAMBRIDGE CREDIT COUNSELING COMMENTS ON WHAT’S TO COME FOR MORTGAGE RELIEF

Treasury Secretary Geithner’s plan to “leverage and mobilize private capital” along with government funds to help take $500 billion worth of distressed assets off the balance sheets of the nation’s troubled banks did little to encourage the markets. The specifics of the Administration’s proposal have yet to be revealed, but, according to Christopher Viale, President of Cambridge Credit Counseling Corp., the plan reveals Geithner’s likely thinking about how his department intends to help the millions of homeowners facing foreclosure.

For Viale, whose “Home Sweet Home” initiative is designed to stave off the next wave of mortgage foreclosures and keep as many people in their homes as possible, Geithner’s approach will also, he hopes, be a public-private solution. “The problem is too big for government alone,” said Viale. “But until we see the specifics from Treasury on exactly how mortgage relief will work, I’m concerned that their approach might not go far enough. America needs a relief plan that provides options to homeowners beyond the group that is already in default. There are millions more Americans who are barely making their monthly payments.”

Viale should know. Cambridge Credit Counseling is a professional debt counseling organization that helps educate Americans on the importance of sound financial management. Cambridge, which has counseled well over 1.5 million consumers, is on the front lines of the country’s economic meltdown. Viale’s “Home Sweet Home” initiative hinges on a “50/40” concept: rewriting mortgages out to terms as long as 50 years and reducing the monthly payment by as much as 40%. The result would enable consumers in financial difficulty to meet their financial obligations – mortgage payments, credit cards, medical costs, establish personal savings and remain productive in the economy. "Preventing foreclosures and helping consumers pay their bills doesn’t just stabilize the economy, it’s a form of stimulus in itself,” said Viale.

CAMBRIDGE CREDIT COUNSELING CORP. ANNOUNCES SEMINAR SERIES, LEARNING TO RUN THE BUSINESS CALLED YOUR LIFE

New financial literacy seminars focus on preparing for economic challenges in 2009.

The year 2008 will likely go down in history as one of the most financially trying in generations. Over the last twelve months, Americans have seen dramatic increases in foreclosure and jobless rates, the erosion of pension plans and retirement savings, and a government opting for unprecedented remedies to prevent further damage. Unfortunately, 2009 looks as if it will be just as challenging. In an effort to provide critical financial education on both the local and national scale, Cambridge Credit Counseling Corp. will hold a series of seminars to help people better prepare themselves and their families to meet the difficulties they may face in the coming year.

On January 15, 2009, Cambridge will hold the first installment in this year's series -- Learning to Run the Business Called Your Life. Part one will focus on developing strategic plans to ensure long-term financial success. Among the topics discussed will be creating a practical spending plan, establishing an adequate emergency savings fund, and eliminating debt.

“Decreased access to credit, a struggling job market and the prospect of a worsening economy means that we all have to develop a more aggressive strategy toward our finances,” warns Christopher Viale, President of Cambridge Credit Counseling Corp. “If we’ve learned anything from 2008, it’s that a lifestyle built on credit, and not savings, can be disastrous. We owe it to ourselves and our families to adopt a new philosophy in 2009.”

All seminars are offered for free to the public and will be held at Cambridge’s offices, located at 67 Hunt Street, Agawam, MA. Each session is scheduled to run from 5:30 - 7:00 PM, and a full listing of dates is available on Cambridge’s website, www.goodpayer.com. The organization understands that it may be geographically impossible for everyone interested to attend, so a PowerPoint presentation, complete with speaker notes, will also be available for download the day after each seminar. Families, community groups, and educational institutions are encouraged to use the information provided. For more information about Cambridge's seminars, please call the agency’s Director of Education, Martin Lynch, at 413-241-2401.

What will you do with your economic stimulus check?

Earlier this week, the Bush administration passed the $168 billion economic rescue package. According to details, most taxpayers will receive rebates of $600 to $1,200, with families receiving an additional $300 per child. The goal is to get this money into consumer’s hands so that they will spend it - fighting off a looming recession. So far, most polls indicate that people will be taking their check from the government and doing the exact opposite. Roughly 25% of consumers plan to spend their money, while the remainder plans to save it, or reduce their debt.

So, what do you plan to do with your rebate check?

Saving: The Worst Thing an American Could Do?

by Thom Fox
Community Outreach Coordinator
Cambridge Credit Counseling Corp.

Many investors were excited in September by the news that the Federal Reserve had cut interest rates; however, average Americans may not fully realize the impact these cuts may have on their wallet. There will be some winners – some homeowners with adjustable rate mortgages, for example, but there will be losers as well - those with Certificates of Deposits and traditional savings accounts.

Interest rate cuts not only affect the amount a consumer is charged to borrow money, they also tempt people to go out and make additional charges, reducing any inclination they may have had to actually start saving money. Our national savings rate is negative 1%, meaning that we’re consuming more than we earn. In light of this fact, these cuts do little to promote the establishment of healthy savings.

Americans used to save nearly 10% of their income every year, but that mark fell into the negatives two years ago. Why? A major factor is the amount the average consumer spends servicing credit card debt, roughly 11% of their disposable income. In looking at the move the Federal Reserve has made, essentially soliciting consumers to get further into debt, one wonders - will a focus ever be put on savings?

When a person is committed to establishing savings, they become more disciplined with their money. That commitment promotes a realistic attitude toward finances that helps individuals live within their means and not beyond them.

At one time in America, a homebuyer couldn’t get a mortgage without a significant down payment, traditionally 20%. In recent years, however, mortgage companies began offering 100%, or even 110% financing. In the absence of the 20% requirement, prospective homebuyers quickly got out of the habit of saving, and now many struggle to save even a minimum down payment of 5%. For an average home worth $250,000, for example, a 5% down payment would require a deposit of $12,500. But even that modest figure would be beyond the reach of Americans whose savings mentality eroded during the years of easy credit.

Placing an emphasis on savings could have prevented the turmoil facing the American markets today. If consumers understood that building savings is a necessary component of the American Dream, more people would take it seriously, and they’d be able to avoid the predatory practices of disingenuous lenders looking to profit at their expense.