Wisdom of Rich Dad

Renting a home is cheaper than buying in just three of Britain’s 50 biggest towns and cities, according to a new study.
The findings highlight the stark injustice and worsening situation for millions of people priced out of the property market.

A year ago, it was only cheaper to buy in 40 out of 50 towns.

As the banking industry, rocked by the financial crisis, has tightened lending criteria on mortgages and demanded bigger deposits, it has left many more would-be first-time buyers stuck on the sidelines.

This has forced many more people to rent rather than buy, and spurred landlords to cash in on the rising demand and charge tenants more.

Average rents have been on the rise for most of 2010 and 2011.

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I know the foreclosure crisis has been super-bad, but now it’s even badder, given that it’s knocking on the door of the baddest, most ridiculously funky musician to ever emerge from the frozen north: the Minnesota Landowner Currently Known as Prince. Or MLCKP, if you prefer.

The Carver County Sheriff’s Office reports that the multitalented, multiplatinum Rock and Roll Hall of Famer has fallen behind $368,382 on the mortgage to his 20-acre former manse in Chanhassen, the Minneapolis suburb that he’s called home since 1980. A sheriff’s auction is set for May 13.

Has Prince been paying property tax like it’s 1999?

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If you are behind on your mortgage payments because you lost your job, you may be able to get up to $50,000 in help from the government.

But act quickly.

This week, HUD announced a new interest-free government loan program for homeowners who are on the verge of foreclosure. It’s called the Emergency Homeowners’ Loan Program (EHLP), but homeowners don’t have to repay the money if they stay current on their mortgage payments for five years after they receive the assistance.

HUD received about $1 billion for this program and expects it will be able to help up to 30,000 distressed borrowers, with an average loan of about $35,000.

Those who qualify for the loan will receive assistance to pay a portion of their monthly mortgage for up to two years, or up to $50,000, whichever comes first. The deadline to apply for the program is July 22.

To be eligible for the program, you must meet the following conditions:

• Involuntary unemployment or underemployment through no fault of your own
• A minimum 15 percent reduction in income
• You must be at least three months delinquent on your mortgage payments and at risk of foreclosure as of June 1, 2011. You must have a letter from your mortgage company verifying these conditions.
• A reasonable likelihood to resume full monthly mortgage payments by the end of the program’s second year;
• Income must be less than 120 percent of the area median income

To learn more about the program and get a pre-screening application go to www.FindEHLP.org or call
855-346-3345

The EHLP program will be offered in 32 states: Alaska, Arkansas, Colorado, Connecticut, Delaware, Hawaii, Idaho, Iowa, Kansas, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Maryland, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming, plus Puerto Rico.

If your state is not included here it’s because your state already has a similar program, called the Hardest-Hit. The government allocated $7.6 billion for that program to help homeowners in states that have been hit the hardest by foreclosure and unemployment crisis. Florida is one of those states and received about $1 billion for the program. But I’ve heard the majority of the people who apply are rejected because they don’t meet the requirements.

I’m curious to know how helpful EHLP is really going to be, considering most of these foreclosure prevention programs have been a disaster.

For some people, the real estate mess is no game; it’s an open sore of a subject. But, games can be great ways to learn for good–or ill.

One company that’s turning lemons into virtual lemonade is an outfit called AddictingGames.com. They just released Mortgage Meltdown, a spin on the old Monopoly game.

In Monopoly, you tried to dominate the real estate market. In Mortgage Meltdown, you just try to stay above water. And, just like in real life, there are lots of things that can go wrong from property tax hikes to earthquakes. There are some good things (or less bad things) that can happen, too–just like in real life.

AddictingGames.com is doing two things.

First, they’re showing just how powerful new computer technology is. They’re able to lift the headlines from today’s papers and turn it into a computer simulation. It used to take years to bring a game to market. And, if you noticed, these games are pretty robust.

Another thing the company is doing is, I hope, creating a learning experience. As funny as it may seem, people learned lessons from those Monopoly and Life games. That’s where I learned about rent and mortgages, come to think of it.

Some other games on the company’s websites run the gamut from laundering money to the dental business.

As AddictingGames create more experiences like Mortgage Meltdown, maybe it will help us avoid the costly mistakes of the past.

Unless you’re learning how to launder money. Then you may get a go-to-jail card.