CNNMoney is adding to the discussion with its report Few getting long-term mortgage relief.

A snippet:

Under the president’s plan, delinquent borrowers are put into trial modifications for several months to make sure they can handle the new payments and to give them time to submit their financial paperwork. If they qualify for a long-term modification, borrowers can keep making the lower payments for five years, after which time the interest rate is set at the rate at the time of the adjustment, or about 5% today.

The number of permanent modifications reported is expected to be small, industry observers said. Servicers say they are having trouble getting the necessary documents from borrowers, while homeowners maintain that their servicers are repeatedly losing the paperwork.

And, the question remains, how many people will meet the criteria necessary to adjust their loans for the long-term?

Do not stress out yet. You do have other options.

If $100 or $200 off your mortgage payment would make a difference in your household budget or cash flow, does it really matter where that savings comes from?

No.

For a roundup of money-saving tips based on household budget categories, go to my series The Downsized Budget: How and Where to Cut Back.

Many of the cost-cutting steps I outline for working class and middle-class families do require an investment of time and / or money up front to see financial savings later. You’ll find an explanation on how that works at There’s no quick fix for a downsized income.

Here is the Assignment Detroit home page.

The intro:

It’s a city in crisis – but with potential for a big comeback. Despite an ailing auto industry and the highest jobless rate in the nation, Detroiters are determined to make their hometown thrive once again. For the next year, CNNMoney will focus on that challenge.

One of the reports is how the area resources are stretched thin.

A snippet:

Every week, Fran Deering gets requests from residents in the Green Baxter public housing site, in northeast Ann Arbor. They ask for help filling out forms to request food from the food pantry Deering keeps as the director of the Community Action Network’s community center at Green Baxter.

People even ask her for advice on how to best spend their limited money.

Recently, a resident came to Deering with a dilemma. Her car needed repairs so she could get to her job, but she couldn’t afford to make her rent that month and pay to fix her car.

Deering’s advice? Pay for the repairs.

Deering said she could find money to help cover the resident’s rent faster than she could get money for car repairs.

If you are one of my national readers, Ann Arbor is only 45 minutes away from my city of Monroe, Mich.

A snippet:

Of course, there was lots of swearing. Lots of venom directed towards corporate. You can’t fly in a head honcho from Manhattan to dismiss a tremendously overworked, loyal group of employees, professing, “There’s nobody I’d rather go to battle with,” and then not expect them to question the arrogant disregard of such a statement.

So is my husband angry? You bet. Entitled to punch his fist through the wall? Sure.

But the greater motivation to rise above this loss is probably going to win out.

In part, it’s because we are so not alone. Michigan’s unemployment rate was 15.4 percent as of September.

Here is some of the reporting on that story:

• Detroit Free Press.
• Michigan Public Radio.

But one should never take such business gifts for granted, or assume you’ll get an equivalent holiday package as you got in previous years.

USA Today is reporting Companies cut back on holiday gift giving.

A snippet:

One-third of small-business owners say they’ll give employee gifts this year vs. 46% in 2008, according to an American Express Open Small Business Holiday Monitor survey released Monday. And 47% plan to dole out customer presents during the holidays, down from 52% last year.

Nearly 60% of entrepreneurs say the downturn has affected their holiday gift-giving habits. Many have ended year-end raises and bonuses, as well as significantly slashed, or outright halted, bestowing gifts such as sterling silver key chains and high-priced bottles of wine on customers and employees.

I have to laugh at the “high priced” description. Most business gifts that my husband and I have seen over the years have been much more modest in their budgets – as in fruit baskets, holiday centerpieces or a Thanksgiving turkey.

Doug said in his piece that bankers are seeing an alarming trend “with a small number of borrowers” who can pay the bills, but see no reason to, given the attention that is going to economic bailouts.

He related this fictional, but representative, chatter from the “customer”:

“Why should people who are in distress be the only ones to benefit? Those of us who just want to maintain a certain lifestyle should receive consideration as well. What if I just pay you what I want for now? I might start making full payments later.”

Well, here’s a reality check for those who think the financially distressed are getting too good of a deal: Not every family in distress is benefiting from all those bailout deals in the first place. There are rules and restrictions in effect for those programs.

Almost every money-saving program, discount service and economic bailout that I have posted during the past three years has a qualification of some sort: be it an application deadline, age or residency requirement, a membership, paperwork requirement, first-come/first-served, date range or amount cap on benefits, show up on appointed date and time, etc.

So if you can afford to live comfortably without the time and effort that families on a budget have to invest in the pursuit of stretching their funds, well, then, enjoy your life.

But then, I don’t think people like that read blogs like mine in the first place.

(Update: I think I confused readers with how I introduced the quote, so I fixed it. That was how Doug wrote the conversation from the fictional customer.)

A snippet:

Parents pinched by the recession are flooding courts across the state with requests for reductions in child support payments.

In Wayne County, requests for payment adjustments have doubled. Courts there and across southeast Michigan are prioritizing such cases to expedite relief to strapped payers, officials said. These requests, called modification motions, illustrate the ripple effect of the state’s economic contraction that reaches across multiple households and reduces the dollars available for children.

“I feel sick,” said Terry McCleery. The 48-year-old dad said he would like to pay more child support but sought a reduction in Wayne County after he was laid off from an auto supplier in May. “That’s less money going to my daughter. I ran out of money. I had no choice.”

The article, and the situations it brings to light, has resulted in some chatter on the MonroeTalks forums.

I have no experience with the Michigan Friend of the Court System. The child support for my daughter was handled through the Ohio Job and Family Services. The last check came in 2007 as she turned 18.

I did, however, have to deal with occasional situations over the years when my ex-husband was between jobs and the child support was late or on hold until his next paycheck arrived. In the meantime, I still had bills to pay. So I can speak from experience to the parents who are waiting for child support and either don’t see it coming, or it’s late, or it’s a partial check …

In a perfect world, such a thing would never happen. The full child support payments would always arrive on time. The child’s needs, after all, do not go away just because a parent is unemployed.

The reality is: split parents where one or both is unemployed have to work around money issues for the kids. It’s no different than if someone in the household became unemployed. And I’ve been in THAT situation too.

If you are the parent who is receiving money, here are some practical tips to deal with late or non-existent child support relating to joblessness:

• Stay in close contact with your case worker on details such as whether a revision of the court order is likely and what to expect in the long run. This is not a new situation for the agencies – they’ve been dealing with jobless parent matters all along. The difference now is in the number of revision requests they are handling.
• Find every means possible to cut back on household expenses so you have the flexibility to handle a late, shorted or nonexistent child support payment. Use my Downsized Budget series as a guide of where to look for cash flow savings.
• Seek out and use discount and money-saving programs and services that rely more on special circumstances or your own efforts than strictly on household income. Reason: child support is often included as income on assistance applications. Whether or not you are getting that money right now may or may not be relevant.
• All parents and children involved in these situations need to discuss — or at least be aware of — the priorities for any money that is available. It is likely that the family will have to cut back on student activities such as music lessons, sports involvement, Christmas gift budgets and summer camp until the situation improves. Another idea that worked at one point for my family: Can the children by cared for by the unemployed parent on at least a part-time basis so the working parent doesn’t have to spend as much money on day care?
• If the affected child is college age or soon-to-be, make sure you understand the rules that apply at the federal level, in your state, and at your college, for divorced parents and their household income. Check out the Divorce and Financial Aid section at FinAid.com.

I’ve posted headlines from southeast Michigan about food pantries struggling to keep up with the demand, the numbers of students on the free or reduced price school lunches, and attendance at the soup kitchen dinners in Monroe.

Now we have an example from the Michigan Department of Human Services. The Detroit Free Press has a report based on a meeting with a House of Representatives committee in Lansing Wednesday:

Seven caseworkers from the Department of Human Services (DHS) testified that they and others are swamped by a huge surge in caseloads as the state’s job losses leave formerly middle-class families needing food, cash and medical care.

A DHS spokesman said the there are 400,000 more cases than last year, and a total of 2.2 million individuals or families receive some kind of state assistance.

The workers told the House Committee on Human Services that DHS office lobbies are routinely crammed with clients, causing short tempers and even threats against them.

I’m a very practical woman. If you honestly meet the requirements for a government or non-profit assistance program, then fill out the applications, meet the deadlines, and participate. You are the family that program was written for. Use it.

However, you should be aware that most income-based assistance programs are not kicking in until a family of four has an income of about $42,000 or less. The median income for Monroe County, Mich., is about $53,000.

That means a lot of Michigan families have to use money-saving resources, tactics, discounts and programs that are based more on family circumstances or their own initiative rather than household income. They do exist. I post as many of them as I can find on this blog. I’ve also used some of them for my own family.

In the meantime, if you, or someone you know, plan to seek financial assistance for whatever expense, read my sidebar: Do you need assistance? Tips to read first. You’ll get a faster response from the overwhelmed government and non-profit groups when your application paperwork is complete and on time.

A snippet:

“The most disturbing aspect of this is that it’s becoming acceptable to do,” says Joel Naroff, an economist with Naroff Economic Advisors. “What does that mean down the road for housing and the economy if people are happy to walk away and destroy their credit? They’re saying, ‘Why pay a high amount if they can get something, even a rental, for less?’ “

Yes, I find that trend a bit disturbing myself.

My husband and I waited a long time before we went into the housing market. It’s a good thing we picked a home that will last us well into retirement – because it’s worth a lot less now than what we paid for it.

And we’re planning to stay put.

Would you like another way to deal with tight finances and leave your housing situation intact? I’ve got a collection of tips at the Downsized Budget series.