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Washington Mutual (WAMU), who received a windfall by foreclosing upon a Maryland family after WAMU lost paperwork showing it had been paid, is now paying for losing paperwork in another mortgage.

Since 2002, Joe Lents had not made a payment on his $1.5 million home in Boca Raton. WAMU tried to foreclose, but could not prove that it held the mortgage note because it had lost the paperwork. Is Joe Lents a deadbeat? Well, it sure sounds like it, because he agreed to pay back the money he borrowed. But in the case of WAMU, I say what’s sauce for the goose is sauce for the gander!

Across the country homeowners are using this failure on the part of the mortgagors as a defense to prevent foreclosure and it looks as if federal judges are not unsympathetic. I feel the same; if these corporations want to lend out and then constantly resell these subprime mortgages, they should be required to keep the paperwork in order to at least prove who owes what to whom. Otherwise, we see situations like the two above where both sides can get hurt.

CNN Money had a nice article this morning on four ways to Fool yourself into saving smarter. It generally took a carrot-and-stick behavioral approach to saving. If you are already well on your way with your own system the behavior tips may not be helpful, but there were two tips that are great for anyone:

1. Put your savings on autopilot. No matter who you are, making saving an automatic process, by having money deducted from your paycheck or bank account is probably the best and least painful way to save real money. I have my ingdirect account withdraw a set figure from my direct deposit checking account every payday and I don’t even miss it because I never see it there to begin with. This method can be used for savings, investing in stocks, or investing for retirement, or even just saving a bit for a special purpose.
2. Invest in a Roth 401(k). A little twist on the usual Roth IRA advice, if your employer offers a Roth 401(k), take it instead of or in addition to a regular 401(k). There are a number of reasons why you may want to do this, so you will have to (1) see if your employer even offers it, and (2) look at your particular situation. Some reasons why you may want to use it are that you can effectively contribute more to a Roth 410(k) because you are using after-tax dollars and you can take advantage of tax-free growth if you will be in a higher tax bracket at retirement.

If you are thinking of walking away from your home and letting foreclosure take its course, you certainly need to evaluate all your options. Here are some links from the Federal Reserve Board that are designed to help people find options to keep their house:

Department of Housing and Urban Development (HUD)

• Housing Counseling Agencies
• How to Avoid Foreclosure (82 KB PDF)
• Tips for Avoiding Foreclosure

Department of Justice

• Credit Counseling Agencies Approved Pursuant to 11 U.S.C. § 111

Federal Housing Administration

• You Can Avoid Foreclosure and Keep Your Home

Federal Reserve System

• Putting Your Home on the Loan Line Is Risky Business
• Federal Reserve Education - Foreclosure Resources

Federal Trade Commission

• Credit & Loans
• Credit Repair: Self Help May Be Best
• Mortgage Payments Sending You Reeling? Here’s What to Do

Internal Revenue Service

• Homeowners Who Lose Homes; Foreclosure Tax Relief Available to Many
• Questions and Answers on Home Foreclosure and Debt Cancellation

NeighborWorks® America

• Center for Foreclosure Solutions
• NeighborWorks® America Organizations Locator

Do you know what’s in your credit report? Besides receiving competitive loan rates, your rates for all kinds of insurance and even rent may be affected by what is in your credit report. Not to mention that prospective employers are now pulling credit reports.

The good news is that you are entitled to one free credit report per year from each of the three major credit bureaus. Therefore I am setting up a yearly schedule for pulling your Experian, TransUnion, and Equifax credit reports and reminding you when the time arrives.

The schedule will include pulls in February, June, and October, so as to spot negative issues more quickly, rather than pulling all three at once.

You can obtain your free credit report here: https://www.annualcreditreport.com/

The process is simple, although once you choose Experian, you will be asked a handful of credit questions about your history to verify your identity. You may want to have your financial records available because you will be asked multiple choice questions about loan providers and monthly payment amounts.

Once you are into the Experian site, just skip all the pay options (unless you also want to check your credit score- you will have to pay to do so) and choose your free credit report. At this point, save or print it out for your future use and perusal. If you have any disputed issues, make sure you contact the credit bureau ASAP!

There you go! See you again in June for TransUnion.

Note: This is not tax advice, please consult the IRS or your local tax professional.

A traditional IRA (individual retirement account) is an account in which you can take tax deductions for certain retirement contributions. Those contributions are not taxed until retirement, at a time when you will likely be taxed in a lower bracket. Depending on the math, if you are facing a large tax burden, an IRA contribution may be a good way to lower your 2007 current tax bill while boosting your retirement savings.

Here’s a simple example showing how it can help: Say you are in the 25% tax bracket and you noodle your way through your 2007 tax return and realize you are going to be nailed with a $1,000 tax bill. If you are within the income limits, you can make a contribution to a traditional IRA for $4,000 before you file your return or April 15, 2008, whichever comes first, and reduce that $1,000 tax liability to $0. Meanwhile, you’ve also put away $4,000 towards your retirement that you would not have otherwise.

The general rule is that if you are under 50, you can contribute up to $4,000 to a traditional IRA. It’s $5,000 for those over 50. If you or your spouse are covered by a retirement plan at work, you may only receive a partial deduction if you make more than the Modified Adjusted Gross Income (MAGI) limits.

The MAGI limits are not real high if you are already covered by work retirement plans. For example, if you are filing jointly and you and your spouse are both covered by work retirement plans, you only receive partial deductions if your AGI is between $83,000 and $103,000, at which point you stop receiving a deduction.

IRA contributions for the 2007 tax year are due by April 15, 2008 (that means a check postmarked by that date), or whenever you file your tax return. There are exceptions, but generally you cannot contribute to a traditional IRA for a tax year for which you have already filed a tax return.

So this means if you could potentially owe taxes you need to look at this soon to give yourself enough time to fully explore the option to see if it will help your specific tax situation as well as saving up the actual contribution before the tax deadline.

You can explore all the details of IRA contributions in the IRS’s Publication 590- 2007 IRAs or with your own tax professional.