You're Money's No Good Here

Have you ever wondered why your mortgage has gone up significantly in the past couple of years and for some months now? This has caused many of you to miss your mortgage payment, fall victim to foreclosure, lose your home, and be evicted by the county sheriff.

Obviously, much of the reason for these unfortunate occurrences has to do with the fact that you're in an adjustable rate mortgage (ARM) to begin with, which means that as rates go up, so do your payments (how convenient!). But this doesn't even begin to explain any reasons for rates going up, does it?

In an earlier blog, we discussed how the two major entities, the federal government, and the Federal Reserve System, control how money works in the economy. The government controls the fiscal policy, and the Fed controls the monetary policy. As the article discussed, it is the Fed who determines the rate at which banks borrow money from the government, and this rate affects all of the interest rates in the economy.

So, logically, if the Fed increases its rates, and rates increase throughout the economy, then, eventually, when the time comes, your ARM mortgage payment will increase. When this happens, you may find yourself completely unprepared for the huge increase in your payment and you may begin falling into foreclosure. So, in effect, it's the Federal Reserve Bank's fault you have to , right? Well, not entirely.

You see, the Fed sometimes has to increase the rates, in order to give people who hold dollars a reason to keep their dollars. If the interest rate on dollars is higher, than the value of the dollar remains high, which means the price of goods and services remains low. It is a very bad sign if the dollar loses value, because this means that you will need more and more dollars to buy the same amount of goods. When this happens, prices rise: gas, heating, food, electronics, everything.

So the Fed had been raising rates for quite some time, before recently leveling off. Has this affected the value of the dollar, keeping prices low and dollar values high?

Unfortunately, in another bad sign for homeowners facing foreclosure, the value of American money has fallen quite noticeably. In fact, your money may be worth more when its recycled into something besides money. Yes, this means that you could, potentially, take your pennies and nickels, melt them down, and sell the metal for more than what the pennies and nickels were worth.

How is this possible, though?

Very simply, the value of the metal in a penny is now worth $0.012, or 1.12 cents. As a penny, you can only trade it for goods worth 1 cent. But as a metal, you can trade the metal the penny is made out of for goods worth a little more than one cent. Nickels are acting likewise: the metal in a five-cent nickel is now worth 6.99 cents.

Therefore, the materials your money is made out of is worth more than the world's faith in the American dollar. Scary, huh? Further declines in the value may make our currency worth even less, or, scariest of all, nearly worthless.

This may explain why some of you are seeing your mortgage payments increase by hundreds of dollars per month. Put very simply: your money isn't worth enough to the economy anymore. In order to function in society as a homeowner, you have to give more and more dollars, since your money is worth less and less.

And if you're thinking of getting some extra cash by melting down some of your loose change, you may want to reconsider that option very quickly. New rules released last Thursday state that you may face thousands of dollars of fines or even jail time, if you melt down your currency.
Think you've found a loophole by taking the money to Canada or Mexico to melt it? Think again. As USA Today states, it is "illegal to export the coins for melting. Travelers may legally carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of the coins abroad 'for legitimate coinage and numismatic purposes'."

So where are homeowners left? Well, to sum up, you will have a very tough time keeping your mortgage payment low, due to the higher rates. Also, you will have a harder time making your payment, as your money is worth less. You won't be able to capitalize on the metal in the currency, since it is illegal to melt it down. And you can't ship the money out of the country to be melted down, since that is illegal.

This is one of the main reasons you need to examine every option to stop foreclosure, including doing it yourself, and enlisting the help of third parties who are trustworthy. As the value of money keeps decreasing, you'll have to use it more wisely, and learn to do more on your own to keep your home. If you're already in foreclosure, you have to stop foreclosure as soon as possible. Every day, your lender adds more fees and interest and charges to the account, requiring you to pay more and more money to them to save your home. If your money is worth less (or worthless), then you will be guaranteed to lose your home if you do not act in time and act wisely.

You need to know your options. You need options to save your home fast. You can't wait anymore, since you don't know if today is the last chance you'll ever have to keep your home.