.
Some clients attempt to fix their credit on their own by visiting the credit bureaus’ web sites and disputing online. This is incredibly tempting because the consumer can dispute trade lines from the comfort of his own home. But this convenience can have a very uncomfortable outcome.
While proceeding through the dispute process, the consumer is asked to check a box before moving forward. This is the Terms of Service box, and most people click it without thinking. A lot of sites have these terms, and generally people don’t bother to read this section. But on the credit bureaus’ sites, this section asks consumers to relinquish their legal rights under The Fair Credit Reporting Act (FCRA).
One of the biggest and scariest parts of this section is the following condition: “Once an item has been verified by the credit grantor, you may not dispute the same item again without providing additional relevant information.”
This is in complete opposition to the FCRA, which says that consumers can dispute the accuracy of their credit reports as many times as they would like, and that the bureaus must reinvestigate each time. The FCRA is there to protect consumers’ rights, and the credit bureaus are trying to get around the law by forcing consumers to agree with these Terms of Service.
Not only do the Terms of Service remove the consumer’s right to multiple disputes, but they also don’t specify an end date. That means the consumer is banned from ever disputing the same trade line in the future. If the credit bureaus verify the original disputes, then the consumer is left with that negative trade line affecting his credit score. And he is left without any means to fight against that harmful information.
Make sure that all your friends, family and clients know that the credit bureaus’ Terms of Service require consumers to surrender their rights under the FCRA. Even if someone is trying to dispute something minor, by simply checking a box, he abandons his chance to achieve a positive resolution.
Douglas Muir, CEO
The credit crunch is in full swing, and everyone is feeling the pressure. Workers and businesses are experiencing the impact because banks aren’t loaning money. Financial institutions aren’t even lending to each other, and you can feel the tension in the air.
The passage of the $700 billion bailout by Congress was supposed to ease fears on Wall Street, but we all watched the stock market tumble over the last week. Now, everyday Americans are wondering how this bailout will affect them, but only time will tell. In the meantime, consumers without great credit aren’t getting any loans.
The real question we should be asking ourselves is how this mess was started. We can all blame both the Republicans for deregulation and the Democrats for trying to give everyone a home. Since no one is solely to blame, we must look at the true cause – subprime mortgages.
From 2001 to 2006, subprime mortgages ran rampant through our country. Greedy banks and foolish borrowers started the economic roller coaster we are all on today. Instead of doing traditional underwriting, such as looking at job history and current debt, banks focused only on credit scores and used the lack of regulation in Washington to sign up uninformed consumers. These financial institutions gave away 105 percent mortgages to people who had no ability to repay the debt, and then sold these mortgages in bundles to Wall Street.
The construction industry fed on these easy mortgages, and the real estate market skyrocketed. Housing prices raced toward their peak. People were buying investment properties left and right because they were excited about the prospect of cashing out in the hot market. But that was the problem -- many of these home loans were given to people with credit histories that wouldn’t have allowed them to get a loan 10 years ago.
Then the real estate market came to a halt, and it started to readjust. Here in Florida the real estate market has been hit hard during the past year. Sales have slowed and prices are falling. The lower prices have left many people owing their lenders more than their homes are worth, meaning the owners can't refinance or sell their homes without paying the difference between their mortgage balances and what the homes are now worth.
Many of our clients are concerned about their own adjustable-rate mortgages and they are looking for answers. Unfortunately, we don’t know when or if we will feel any relief from the Washington bailout. Until then, I encourage you to instruct your clients to follow the basic tips below to help ease their own fears while also preparing for the worst.
1. Reduce unnecessary spending.
2. Have three to six months worth of income in a secure savings account.
3. Pay down credit card debt.
4. Make extra mortgage payments to pay down the principal.
5. Call lenders before a mortgage adjusts to see if they will help.
Douglas Muir, CEO
One major factor in the current foreclosure trend are those people who flipped properties from 2003 to 2006. Many people believe that speculative buying was the biggest cause of the foreclosure boom we are experiencing today.
Many of us heard about people who made tons of money in just weeks by flipping real estate. Flipping is when a person buys property and then sells it for a profit a short time later without ever living in the house or condo in question.
Those tales lured more people into flipping, and in turn drove up real estate prices even higher. An examination of federal mortgage data says speculative buying in the country ran rampant between 2003 and 2006, peaking in 2005.
Now we are experiencing unprecedented foreclosure rates. In Jacksonville, Fla., alone, there are more than 8,700 homes for sale, 4,700 of which are under pre-foreclosure and more than 2,000 of which are bank-owned.
According to the Mortgage Bankers Association (MBA), one out of every 200 homes in America will be foreclosed upon. The MBA also says that every three months, 250,000 new families enter into foreclosure.
These foreclosures are rippling through the economy, and banks have stopped lending money. Even with the government bailout, it may be some time before we see a slowing in foreclosures. We need to instruct our clients to make sure they have the best credit score possible in case they are forced to refinance. Remind your clients of the following tips to help prepare them for refinancing so that they don’t lose their homes.
1. Make extra mortgage payments to pay down the principal
2. Reduce unnecessary spending
3. Review your credit report every six months to ensure that the information is accurate and up-to-date
4. Limit your credit to mortgages, auto loans and only a few major credit cards
5. Pay credit cards and mortgages on time
6. Develop a plan to pay down your debt to less than 40 percent of available credit
7. Stay at your job for longer than one year
8. Systematically pay off your loans starting with the highest interest rate loans
9. Keep telephone and utilities in your name
10. Don’t needlessly open new accounts
Douglas Muir, CEO
www.fastcompany.com/blog/kaihan-krippendorff/outthinker-mavericks-cut-against-grain-outinnovate-competition-0
Kaihan interviewed me for the blog and asked some great questions about my business philosophy and CJS. Most of you operate businesses or work at companies outside of the CJS family, and Kaihan’s insight into CJS’ success can offer you new ideas and innovations that might propel your future projects and businesses.
I suggest that you take a moment and ask yourself the three questions posed in Kaihan’s blog:
1. How can you do good and whom can you help?
I’ve mentioned before my strong belief in community service, but helping others doesn’t have to be outside the work environment. Try to create a situation in which your company or business can benefit from helping others, such as having educational workshops or offering extended hours to be more available to your clients.
2. What would happen if you “opened your gates” and were transparent about how you do things?
We are in the business of people helping people, and by being completely open and honest about fees, process and results, people will flock to your business. Your competitors will be taken by surprise and your customers will share their positive experiences with other potential clients.
3. Who could you coordinate? Are there populations out there that could do more if they coordinated their activities and how could you play a role in coordinating them?
In the work place, make sure your employees are working together and utilizing each other’s strengths to provide better products and services to your customers. Conduct brainstorming sessions and have people share business leads to work more efficiently.
This question doesn’t just have to apply to business but is also a great suggestion for community service. Try to identify a group of people with common goals, organize them and make a difference by working together to implement new ideas and structures to accomplish the objectives.
Douglas Muir, CEO
view all blog entries...
Oct 2008
Never make disputes online
What your clients need to know
by valeria on Mon Oct 06, 2008 4:03 pm
Some clients attempt to fix their credit on their own by visiting the credit bureaus’ web sites and disputing online. This is incredibly tempting because the consumer can dispute trade lines from the comfort of his own home. But this convenience can have a very uncomfortable outcome.
While proceeding through the dispute process, the consumer is asked to check a box before moving forward. This is the Terms of Service box, and most people click it without thinking. A lot of sites have these terms, and generally people don’t bother to read this section. But on the credit bureaus’ sites, this section asks consumers to relinquish their legal rights under The Fair Credit Reporting Act (FCRA).
One of the biggest and scariest parts of this section is the following condition: “Once an item has been verified by the credit grantor, you may not dispute the same item again without providing additional relevant information.”
This is in complete opposition to the FCRA, which says that consumers can dispute the accuracy of their credit reports as many times as they would like, and that the bureaus must reinvestigate each time. The FCRA is there to protect consumers’ rights, and the credit bureaus are trying to get around the law by forcing consumers to agree with these Terms of Service.
Not only do the Terms of Service remove the consumer’s right to multiple disputes, but they also don’t specify an end date. That means the consumer is banned from ever disputing the same trade line in the future. If the credit bureaus verify the original disputes, then the consumer is left with that negative trade line affecting his credit score. And he is left without any means to fight against that harmful information.
Make sure that all your friends, family and clients know that the credit bureaus’ Terms of Service require consumers to surrender their rights under the FCRA. Even if someone is trying to dispute something minor, by simply checking a box, he abandons his chance to achieve a positive resolution.
Douglas Muir, CEO
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Don’t be scared – be prepared
Consumers need to take personal action to protect themselves
by valeria on Mon Oct 13, 2008 1:23 pm
The credit crunch is in full swing, and everyone is feeling the pressure. Workers and businesses are experiencing the impact because banks aren’t loaning money. Financial institutions aren’t even lending to each other, and you can feel the tension in the air.
The passage of the $700 billion bailout by Congress was supposed to ease fears on Wall Street, but we all watched the stock market tumble over the last week. Now, everyday Americans are wondering how this bailout will affect them, but only time will tell. In the meantime, consumers without great credit aren’t getting any loans.
The real question we should be asking ourselves is how this mess was started. We can all blame both the Republicans for deregulation and the Democrats for trying to give everyone a home. Since no one is solely to blame, we must look at the true cause – subprime mortgages.
From 2001 to 2006, subprime mortgages ran rampant through our country. Greedy banks and foolish borrowers started the economic roller coaster we are all on today. Instead of doing traditional underwriting, such as looking at job history and current debt, banks focused only on credit scores and used the lack of regulation in Washington to sign up uninformed consumers. These financial institutions gave away 105 percent mortgages to people who had no ability to repay the debt, and then sold these mortgages in bundles to Wall Street.
The construction industry fed on these easy mortgages, and the real estate market skyrocketed. Housing prices raced toward their peak. People were buying investment properties left and right because they were excited about the prospect of cashing out in the hot market. But that was the problem -- many of these home loans were given to people with credit histories that wouldn’t have allowed them to get a loan 10 years ago.
Then the real estate market came to a halt, and it started to readjust. Here in Florida the real estate market has been hit hard during the past year. Sales have slowed and prices are falling. The lower prices have left many people owing their lenders more than their homes are worth, meaning the owners can't refinance or sell their homes without paying the difference between their mortgage balances and what the homes are now worth.
Many of our clients are concerned about their own adjustable-rate mortgages and they are looking for answers. Unfortunately, we don’t know when or if we will feel any relief from the Washington bailout. Until then, I encourage you to instruct your clients to follow the basic tips below to help ease their own fears while also preparing for the worst.
1. Reduce unnecessary spending.
2. Have three to six months worth of income in a secure savings account.
3. Pay down credit card debt.
4. Make extra mortgage payments to pay down the principal.
5. Call lenders before a mortgage adjusts to see if they will help.
Douglas Muir, CEO
Who else is there to blame?
Understanding how flippers affected the market.
by valeria on Mon Oct 20, 2008 3:34 pm
One major factor in the current foreclosure trend are those people who flipped properties from 2003 to 2006. Many people believe that speculative buying was the biggest cause of the foreclosure boom we are experiencing today.
Many of us heard about people who made tons of money in just weeks by flipping real estate. Flipping is when a person buys property and then sells it for a profit a short time later without ever living in the house or condo in question.
Those tales lured more people into flipping, and in turn drove up real estate prices even higher. An examination of federal mortgage data says speculative buying in the country ran rampant between 2003 and 2006, peaking in 2005.
Now we are experiencing unprecedented foreclosure rates. In Jacksonville, Fla., alone, there are more than 8,700 homes for sale, 4,700 of which are under pre-foreclosure and more than 2,000 of which are bank-owned.
According to the Mortgage Bankers Association (MBA), one out of every 200 homes in America will be foreclosed upon. The MBA also says that every three months, 250,000 new families enter into foreclosure.
These foreclosures are rippling through the economy, and banks have stopped lending money. Even with the government bailout, it may be some time before we see a slowing in foreclosures. We need to instruct our clients to make sure they have the best credit score possible in case they are forced to refinance. Remind your clients of the following tips to help prepare them for refinancing so that they don’t lose their homes.
1. Make extra mortgage payments to pay down the principal
2. Reduce unnecessary spending
3. Review your credit report every six months to ensure that the information is accurate and up-to-date
4. Limit your credit to mortgages, auto loans and only a few major credit cards
5. Pay credit cards and mortgages on time
6. Develop a plan to pay down your debt to less than 40 percent of available credit
7. Stay at your job for longer than one year
8. Systematically pay off your loans starting with the highest interest rate loans
9. Keep telephone and utilities in your name
10. Don’t needlessly open new accounts
Douglas Muir, CEO
Be an innovator
Credit Justice Services continues to receive great media coverage and was recently profiled in the business resource and magazine, FastCompany.com. In his blog, The Outthinker, innovation expert Kaihan Krippendorff examined why CJS has been so successful over the last four years. If you haven’t read the piece yet, I encourage you all to do so:
by valeria on Mon Oct 27, 2008 2:28 pm
www.fastcompany.com/blog/kaihan-krippendorff/outthinker-mavericks-cut-against-grain-outinnovate-competition-0
Kaihan interviewed me for the blog and asked some great questions about my business philosophy and CJS. Most of you operate businesses or work at companies outside of the CJS family, and Kaihan’s insight into CJS’ success can offer you new ideas and innovations that might propel your future projects and businesses.
I suggest that you take a moment and ask yourself the three questions posed in Kaihan’s blog:
1. How can you do good and whom can you help?
I’ve mentioned before my strong belief in community service, but helping others doesn’t have to be outside the work environment. Try to create a situation in which your company or business can benefit from helping others, such as having educational workshops or offering extended hours to be more available to your clients.
2. What would happen if you “opened your gates” and were transparent about how you do things?
We are in the business of people helping people, and by being completely open and honest about fees, process and results, people will flock to your business. Your competitors will be taken by surprise and your customers will share their positive experiences with other potential clients.
3. Who could you coordinate? Are there populations out there that could do more if they coordinated their activities and how could you play a role in coordinating them?
In the work place, make sure your employees are working together and utilizing each other’s strengths to provide better products and services to your customers. Conduct brainstorming sessions and have people share business leads to work more efficiently.
This question doesn’t just have to apply to business but is also a great suggestion for community service. Try to identify a group of people with common goals, organize them and make a difference by working together to implement new ideas and structures to accomplish the objectives.
Douglas Muir, CEO
