In March, I wrote about how some families staring foreclosure in the face were making the tough decision to walk away from their mortgages in order to keep the car payment and credit card bills current.

Although there are plenty of reports out there of callous people who decided to walk away because it wasn’t profitable to stay, the folks I found were mostly victims of predatory lending or job changes that made it nearly impossible to make their payments. And banks were less willing to work with you before the stock market tumble and the bailout bill.

If you’re thinking of walking away, a consumer attorney who represents predatory lending victims created an online calculator to help borrowers decide if foreclosure is a “smart business move.”

California consumer attorney Peter Fredman’s Pay or Go calculator “looks at the after-tax cost of ownership compared to renting, and tells underwater homeowners how much housing prices will have to rise annually to lift them into positive territory,” according to the press release.

But using this calculator is in no way a substitute for seeking foreclosure counseling and checking into the many new programs designed to help troubled homeowners.

So Matt and I have been thinking about starting to save more in cash, not only because of the point that Tom made in the last post about my job given the uncertain industry I work in, but also because if we do want to move in a few years, chances are home appreciation won’t be enough for a down payment on a new place.

But then I started thinking that if the primary point of the cash is for a down payment, then why wouldn’t I just double my mortgage payment, which in effect would mean we’d earn a nice 5.879 percent return on our money.

That’s BEFORE the tax break we get from deducting mortgage interest, however. Consider that savings and pre-paying our mortgage wouldn’t get us much further ahead than if we stuck the cash in our “high-yield” savings account at 3.5 percent.

According to this mortgage tax savings calculator, our after-tax rate is 4.057 percent.

And we’d have flexibility to use the money for other reasons if necessary.

Then again, I’ve been thinking lately that one sure-fire way of reaching a goal is no flexibility at all. My savings account balance ebbs and flows. My 401(k) balance rises, even when the market doesn’t, thanks to my regular contributions.

Also, the idea of paying off a mortgage is appealing to me. Call me old-fashioned, or crazy, but think about coming home to your house each day knowing you don’t owe a penny to the bank. Sounds nice, doesn’t it?

This just in from the Minnesota Department of Commerce and Home Ownership Center:

Housing and foreclosure counseling will be available each day from 11am to 5pm at the State Fair. Just head to the Department of Commerce booth in the Education building on Cosgrove Street.

According to the release: “Foreclosure counselors will provide information on what happens during foreclosure, homeowners’ rights, tips for talking with lenders, solutions for long-term housing needs, and how to avoid scams. Participants will be able to ask advisors questions and get free advice, resources and referral services.”

Thinking about buying a home? Well, a recent 270-page HUD study found that the more educated homeowners are about the loan process, the less in closing costs they pay.

In hindsight, I wish my husband and I had taken a home-buying course before we took the leap. Nothing terrible happened to us, but I’m certain we paid more in closing costs than we had to because we didn’t think to shop around. Instead, we blindly settled for the in-house loan officer that our Realtor suggested.

I will go out of my way to save a buck on milk. But I don’t shop around for my loan? Hello?

The Minnesota Home Ownership Center is having a series of classes called “Opportunity Knocking” about the home-buying process.

The dates are Thursday, June 12th, Tuesday, June 17th, and Saturday, June 21st.

What are your home-buying tips? Any resources to share? Any mistakes you wish you hadn’t made?

Geez, I always feel like I’m apologizing for not updating poor Ka-Blog as much as I’d like. Believe me, the ideas are stacked to high heaven, but finding the time to write is always the challenge.

This week, on top of my writing for the paper, my parents have been in town in search of a house. They’ve decided that they’d like to retire near the grand kids and miraculously sold a house in the Detroit suburbs in little time. As an editor of mine said when I told him the news, “the housing market has hit bottom.” We’ll see….

So they’re searching for a new abode and told me something I found extremely interesting and annoying– lenders don’t like to make small mortgages. According to their mortgage broker, lenders will charge a higher rate for loans that are less than $70,000. So he suggested they take out a loan that big and invest the rest. Uh, no thanks.

The other thing they can do is “recast” the loan, which means pay off a chunk of the mortgage with some of the cash they’ll have from their home sale, and then have the lender re-amortize the payments so they have smaller payments based on the new loan amount. But the lender will charge for this, of course– a couple hundred bucks according to my Dad.

Any mortgage experts out there who can explain to me why a mortgage company won’t take out a smaller loan without charging an interest rate premium, except because they are greedy?

Another thing to complain about while I’m exercising that muscle? Those credit card checks that come in the mail. These checks are coming fast and furious to my address these days. Is that because creditors know that the more strapped Americans feel, the more they might be tempted or might need to use the checks? Or are creditors worried that people are going to charge less these days and want to entice with teaser rates?

I don’t know, but these checks to me are invitations for identity theft and credit scams, sitting there in mailboxes just waiting to be used. In a perfect world, credit card companies would have to ask me if I want these checks. My answer would always be, uh, no thanks!