I love the E*Trade babies. And I have a feeling I’m going to enjoy the ABC “Un-broke” tonight at 9 pm Eastern. It’s supposed to be a special about what you need to know money. Twitterers will be out in full force tonight to watch.

Happy Friday!

Housing market news continues to be mixed right now on the latest foreclosure numbers. After showing that existing home sales increased in April, as did new home sales, the foreclosure data was released. For Quarter 1 of 2009, the data shows a sharp increase in foreclosures. Indeed, the jump between foreclosures in Quarter 4 of 2008 and Quarter 1 of 2009 was the largest recorded quarter to quarter jump.

The reason for this sharp increase probably has to do with the fact that in Quarter 4 of 2008, many mortgage lenders offered a moratorium on foreclosure. These lenders did so in order to promote holidays with less stress for borrowers. However, the moratoriums were ended in Quarter 1 of 2009, and now we are seeing an increase in foreclosure.

Foreclosure starts are also on the rise. Foreclosures are likely to continue until the economy picks up. However, there may be some help from government programs put into place to help ease foreclosure. Loan modification — if mortgage lenders will participate in programs set up for the purpose — could help prevent some foreclosures.

Existing home sales data for April has been released, and it is showing that there has been an increase. This comes on the heels of yesterday’s data that showed that home prices declined significantly in the first quarter of this year. Mortgage News Daily reports on where the home sales are taking place:

“Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the midprice ranges, but high-end home sales remain sluggish,” said Lawrence Yun, NAR chief economist, in the report.

Clearly, many people are looking for good deals right now, and the lower home prices are spurring home sales. Government tax incentives and low mortgage rates are probably helping as well.

Inevitably, as tough times continue, I get questions similar to this in my email inbox:

“I am having trouble meeting my obligations. My hours have been cut at work due to the recession, and things are getting tougher. I am trying to decide between making my credit card payments and paying my mortgage. What should I do?”

The answer to this question is very simple: Pay your mortgage first. You should make your mortgage payment your first priority. Your credit card debt is unsecured. Your mortgage, on the other hand, is secured by your home. Your credit score may be in trouble if you miss credit card payments, but it will be in much worse shape if you go through foreclosure. And you could lose your home.

When it comes to the choice between your mortgage payment and your other bills, making your mortgage payment should be your first option. In fact, just about everything, from insurance to groceries to utilities, should be put ahead of credit cards when the tough decisions have to be made.

And, if you are running into trouble, you should contact your mortgage lender as soon as possible to talk about home loan modification, forebearance or other options that can help you keep on your feet until this recession is over and things pick up again.

Today is the observation of Memorial Day. As such, I feel it is appropriate to remember those who have fought and died to build our country and protect our freedoms. It is also a reasonable time to thank those service men and women, living today, who sacrifice so much for us.

Remember who protects our freedoms and our country.

In spite of the fact that I do not recommend freecreditreport.com, I enjoy their commercials. Remember, with that particular service, you only get your “free” credit report when you enroll in a service.

At any rate, enjoy the commercial.

Happy Friday!

Foreclosure continues to be a problem for many. If you are in danger of foreclosure, and you want to avoid it, you will have to work with your mortgage lender. There are some measures that a mortgage lender might be willing to agree to, if it means the whole foreclosure thing can be avoided. As soon as you realize that you might be in trouble, you should contact your mortgage lender. Here are the 3 most likely scenarios for avoiding foreclosure:

1. Repayment plan. This is when you work out the repayment of missed mortgage payments by dividing up the amount you owe, and spreading it out over a certain period of time. For example, if you owe $6,000, you migh be able to add $100 to each of your monthly payments for five years.

2. Loan modification. This is becoming a greater possibility since the passage of measures to encourage mortgage lenders to help. The government is offering incentives to lenders who are willing to lower interest rates, or change the term of the loan, so that you can more easily afford the payments.

3. Refinancing. If you still have equity in your home, you might be able to refinance. In this case your loan balance would be paid off with the new loan. If you have missed some payments, what you owe could be added to the loan balance.

Other methods that some mortgage lenders might consider (but not very likely) to help you avoid foreclosure include debt forgiveness for what you owe, forebearance and a short sale of your home.

Congress appears to be in the mood to reform credit cards. Indeed, in the wake of populist outrage over the vagaries of big banks in the run up to and after the global financial crisis, Congress is trying to appear as though it is getting things done on behalf of the people it is supposed to represent. The Senate just passed new credit card rules that have more teeth than those passed last December by the Fed, and the credit card industry is not happy about it.

While there are a number of changes to credit card regulations (including notice for changes to terms and when statements must be mailed out), my favorite changes have to do with interest and fees:

Credit card issuers must credit payments toward higher interest debt first. If you have two balances, one at a promo rate and one at a higher rate, the credit card company used to apply your payment to the lower rate debt, leaving your higher interest rate to continually punish you and reduce the amount of principle you were paying. Now, though, efforts have to be made to pay down the principle of the higher rate debt before moving on to the lower rate debt.

Credit card issuers must reject over the limit transactions, unless you give permission for them. Until now, credit card companies happily approved transactions that went over the limit, and then charged high fees. No more. No companies have to reject these transactions, unless you offer permission for it.

I also like the idea that credit card companies can no longer retroactively raise interest rates on existing balances. The only exception to that rule is if you are 60 days overdue with payments. However, I’ll bet credit card companies spend the next 9 months doing what they can to get whatever they can before the rules go into effect. It’s going to get ugly…

There is an interesting dynamic in the housing market right now. Overall housing construction has hit a record low — even though there has been a bit of a rebound in single-family home construction. The reason for this lower construction number is due to the fact that apartment building construction has dropped dramatically, outweighing the single-family home construction.

This news is rather disappointing, since analysts had expected the housing construction and permits to rise. However, this has not happened, and that is putting a bit of a damper on economic recovery hopes. The data isn’t as bad as it could be — economists cite the single-family construction improvements — so it probably doesn’t mean that hope for recovery is over.

Indeed, this news will probably serve to help keep home prices low, prompting more buying, and encouraging efforts for home purchase. Eventually, all of the incentives to buy a home will result in a housing market recovery.

Many homebuyers are considering the purchase of foreclosures. Many of these homes are bank owned properties or what is known as real estate owned (REO). These properties can be a very good deal, but there are also pitfalls to purchasing a bank owned home. One of the best things you can do, insists Real Estate Pro Articles, is to get a good buyer’s agent to help represent you:

As a buyer of a bank owned home, you are going to receive very little information about the home you are purchasing. It will be your responsibility to learn everything about the home through your buyer’s agent. It is inherently important that you choose to work with a buyer’s agent that understands the process of working with a bank. It would be a risky decision to purchase a bank owned home without a knowledgeable local buyer’s agent.

You should also be aware that when you purchase a bank owned home, most of the legal stuff is going to favor the bank. The bank will be able to back out at any time, and you will have to agree not to sue the bank in the future. Additionally, the process can take quite a long time — two months is average. You will be responsible for inspecting the property and looking for any other problems.

Buying a foreclosure can result in a good deal. However, in many cases the home in question is damaged or has some other problem. It will be up to you to make sure that you fix up the home and get everything in order.