.
Foreclosure is a legal process (in most states) that results in the lender regaining title to the property due to nonpayment by the borrower. When applicable, the court awards a deficiency judgment to the lender the amount of which is determined by the difference between what the house is eventually sold for (minus expenses) and the borrower’s mortgage balance. The foreclosure remains on the credit report for 7 years. The statute of limitations on the judgment varies from state to state and 20 years is not uncommon. New lending guidelines extend the wait period for a new mortgage to 5 years BUT the judgment would need to be satisfied before any mortgage financing is allowed.
The combination of the foreclosure and the open judgment is devastating to the borrower’s credit score.
Deed-In-Lieu of Foreclosure
The borrower must document economic hardship and an inability to pay. If there is equity in the property (the home is worth more than the balance due) and there are no other liens the lender may consider an exchange whereby the borrower surrenders the deed and is released of any obligation to the mortgage note.
If it reported as a foreclosure (lender’s digression) it will remain on the credit report for 7 years but there will not be an unpaid balance reported
Short Sale
If the lender is convinced that they cannot collect payment from the homeowner due to financial hardship they may accept a sale price of less than what is owed on the property. The price is normally discounted from a quick sale price in an effort of avoiding the costs and risks of the foreclosure process.
In some cases, usually where there are second liens involved, the borrower may still be obligated for an amount owed but the loan would be unsecured.
There are various ways for the lender to report the short sale, the most common of which are “satisfied mortgage” or “paid settlement”. As a satisfied mortgage the only damage to the credit score is due to any late payments prior to the sale. A settled account is more damaging as it reflects it was not paid as agreed but, in both cases the damage pales in camparison to a foreclosure and deficiency judgment. How the lender is going to report the short sale is rarely, if ever, a negotiable item.
New mortgage lending guidelines require a 2 year wait after a preforeclosure sale.
Bankruptcy
Bankruptcy involves a settlement of debts through a variety of means. Bankruptcy is severely damaging to a credit score and remains on the credit report for 10 years. Because there are no judgments involved the borrower may generally be eligible for new mortgage financing in as little as 2 years from the date of discharge.
Daniel Poulos is the president of Elite Lending with offices in Jupiter and Port St Lucie, Florida and Brevard, North Carolina. He has been proudly serving the mortgage needs of the community for nearly 20 years. Elite Lending is a market leader in residential and commercial mortgages with a customer service philosophy that "Only WOW Is Good Enough".
Daniel's regular columns on "Minding Your Mortgage" appear in many local publications and he has been interviewed on Channel 25 News on a number of occasions. He also conducts a well-received seminar series at the Jupiter location. A crusader for full disclosure and truth-in-advertising, his marketing campaigns have earned him first place in 2 of the last 3 years at the national Turn On Your Million Dollar Brain conference of industry leaders. Daniel resides in Northern Palm Beach with his wife Kimberly and daughter Sophia.
Copyright © 2008 Daniel J Poulos
DJPOULOS@ELITELENDING.BIZ
http://www.EliteLending.biz
800.965.5956
Or maybe the process worked pretty much as it was designed to. Although they generally decline to discuss specific cases, the three major credit bureaus – Experian, Equifax and TransUnion—each attest to their commitment to accuracy and accountability in their record keeping. But while consumers might assume that each bureau employs an army of dedicated sleuths who carefully investigate and correct errors, all the bureaus actually process most disputes using a system that’s almost entirely automated—and where human beings are involved, they’re often working at a harried pace. The bureaus say the system, dubbed with the Muppety acronym e-OSCAR, is the most efficient way to handle the more than 20,000 disputes a day they receive. In practice, most complaints are electronically zapped straight to the lender, and according to consumer advocates, many lenders respond by simply re-reporting the erroneous data.
Credit-report accuracy is profoundly important now, because an error can wreak more havoc than ever on your financial life. Before the nation heard the words credit crisis, just about anyone with a pulse could get a loan. Now many banks are refusing credit to anyone who looks remotely risky. And as legions of anxious job hunters know, a growing number of employers routinely check credit reports before they make a hire. It’s no wonder, then, that the National Foundation for Credit Counseling says call volume is up 31 percent in the past 12 months. “Credit is on consumers’ minds more than ever before,” says Curtis Arnold, CEO of CardRatings.com.
But according to a 2007 survey by pollster Zogby, 37 percent of consumers who obtain their credit reports find errors, and half of those said they could not easily correct the mistakes. An earlier study by the U.S. Public Interest Research Group, a nonprofit consumer advocacy organization, found that one in four reports contained “serious errors.” For its part, the Consumer Data Industry Association, the industry’s trade group, says only 11 percent of consumers who get their credit report file a dispute and just 5 percent of those challenge the results. “That’s an excellent satisfaction rate,” says the group’s president, Stuart Pratt. Still, even some industry insiders say there’s a problem. Testifying before Congress, one CEO of an independent Arizona credit bureau likened the dispute process to “having an IRS audit, brain surgery, getting a tooth pulled or going to your own funeral.”
And when the dispute process fails, consumers say they are left feeling powerless. Martha Soto, a 63-year-old Antioch, Calif., shipping manager, says she couldn’t get the mortgage she needed last fall because Experian listed her as the defendant in an unpaid court judgment. She says she’s faxed records proving that she’s actually the plaintiff; Experian says they’re the wrong records, and the dispute is still unresolved, leaving Soto increasingly frustrated. “They’re defaming you, and you can’t do anything about it,” says Soto. “It’s scary to think an agency like that can control your life.”
From: SmartMoney Magazine by Anne Kadet – Feb.2, 2009
For complete article visit: http://www.smartmoney.com/Spending/Rip-offs/Why-The-Credit-Bureaus-Cannot-Get-it-Right/?page=all
Sometimes it takes an expert in the field of credit repair to assist consumers in removing negative information from their credit reports and helping them to not feel powerless. Founded by a former owner of a collection agency, Credit Justice Services helps consumers protect their credit rights using our 75 Day Credit Makeover Process. Our process is backed by knowledge, experience and know-how. We personally educate and assist the consumer to move forward in a positive direction. We do it ethically, affordably and quickly. Call 904-757-0880 today to speak to a Certified Credit Consultant and get on your way to freedom!
The real message of this week’s blog is here:
http://www.youtube.com/watch?v=ySUYIA7nsdY
Meg Murphy,
Account Executive
484-375-5484
megmurphy@creditjusticeservices.com
The following are important terms to understand when discussing credit repair:
The Fair Credit Reporting Act (FCRA) – A federal law regulating how credit-reporting agencies use a person’s information. Enacted in 1970 and substantially amended in the late 1990s and again in 2003, the FCRA restricts who has access to an individual’s sensitive credit information and how that information can be used.
The Fair Debt Collection Practices Act (FDCPA) – A US statute added in 1978 that created guidelines under which debt collectors may conduct business. Defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations.
The Fair and Accurate Credit Transactions Act (FACTA) – An amendment to the FCRA that allows consumers to:
1. Request and obtain a free credit report once a year from each of the three nationwide consumer credit reporting companies.
2. Place alerts on their credit histories if identity theft is suspected.
3. Receive a Credit Disclosure Notice from mortgage lenders that includes a person’s credit scores, range of scores, credit bureaus, scoring models and other factors affecting his or her score.
These laws encourage consumers to look into their credit history and make sure the information is complete and accurate. The most important piece of legislature when it comes to credit repair is The Fair Credit Reporting Act.
This federal law requires that the three credit bureaus make reasonable efforts to ensure the information contained in their credit reports is accurate. There are six key provisions that ensure the consumers’ right to contest negative information listed on a credit report.
The first provision allows an individual to dispute information in his or her credit report to a credit bureau, and then that bureau must promptly investigate and verify the information.
Provisions two and three set maximum time limits in favor of the consumer. The credit bureaus have 30 days to complete an investigation into a disputed item, and if they cannot verify it, they must delete it. The results of any completed investigation must be sent to the consumer within five days.
The fourth provision allows consumers to further dispute negative items. If a consumer believes that evidence supporting his or her dispute of information was disregarded, the credit bureaus must contact the creditor directly. That means the company claiming a negative item on a consumer’s credit report must respond to that person’s challenge of information.
The fifth provision deals with deleted information. Once an entry in the credit report is deleted, the entry cannot be reinstated unless the creditor certifies that the information is complete and accurate.
Finally, the sixth provision allows for a Consumer Statement to be added to an individual’s credit report. If the consumer disputes the accuracy of certain information, and it is verified by the creditor as correct, then the credit bureaus must include the consumer’s explanation of the dispute. This gives the individual the chance to have his explanation for inaccuracy listed directly under the negative item.
The legal lesson above makes it very clear that any individual can contest information and clean up his credit history by himself. However, the process requires relentless follow-up and must be completed in a timely matter. That’s where CJS comes in. We can help consumers deal with the tedious aspects of disputing items on their credit reports, and on average, our clients see a credit score increase between 50 and 100 points within 75 days.
Douglas Muir, CEO
view all blog entries...
Feb 2009
The Lesser of 3 Evils: Short Sale - Foreclosure - Bankruptcy
Foreclosure
by valeria on Mon Feb 02, 2009 11:51 pm
Foreclosure is a legal process (in most states) that results in the lender regaining title to the property due to nonpayment by the borrower. When applicable, the court awards a deficiency judgment to the lender the amount of which is determined by the difference between what the house is eventually sold for (minus expenses) and the borrower’s mortgage balance. The foreclosure remains on the credit report for 7 years. The statute of limitations on the judgment varies from state to state and 20 years is not uncommon. New lending guidelines extend the wait period for a new mortgage to 5 years BUT the judgment would need to be satisfied before any mortgage financing is allowed.
The combination of the foreclosure and the open judgment is devastating to the borrower’s credit score.
Deed-In-Lieu of Foreclosure
The borrower must document economic hardship and an inability to pay. If there is equity in the property (the home is worth more than the balance due) and there are no other liens the lender may consider an exchange whereby the borrower surrenders the deed and is released of any obligation to the mortgage note.
If it reported as a foreclosure (lender’s digression) it will remain on the credit report for 7 years but there will not be an unpaid balance reported
Short Sale
If the lender is convinced that they cannot collect payment from the homeowner due to financial hardship they may accept a sale price of less than what is owed on the property. The price is normally discounted from a quick sale price in an effort of avoiding the costs and risks of the foreclosure process.
In some cases, usually where there are second liens involved, the borrower may still be obligated for an amount owed but the loan would be unsecured.
There are various ways for the lender to report the short sale, the most common of which are “satisfied mortgage” or “paid settlement”. As a satisfied mortgage the only damage to the credit score is due to any late payments prior to the sale. A settled account is more damaging as it reflects it was not paid as agreed but, in both cases the damage pales in camparison to a foreclosure and deficiency judgment. How the lender is going to report the short sale is rarely, if ever, a negotiable item.
New mortgage lending guidelines require a 2 year wait after a preforeclosure sale.
Bankruptcy
Bankruptcy involves a settlement of debts through a variety of means. Bankruptcy is severely damaging to a credit score and remains on the credit report for 10 years. Because there are no judgments involved the borrower may generally be eligible for new mortgage financing in as little as 2 years from the date of discharge.
Daniel Poulos is the president of Elite Lending with offices in Jupiter and Port St Lucie, Florida and Brevard, North Carolina. He has been proudly serving the mortgage needs of the community for nearly 20 years. Elite Lending is a market leader in residential and commercial mortgages with a customer service philosophy that "Only WOW Is Good Enough".
Daniel's regular columns on "Minding Your Mortgage" appear in many local publications and he has been interviewed on Channel 25 News on a number of occasions. He also conducts a well-received seminar series at the Jupiter location. A crusader for full disclosure and truth-in-advertising, his marketing campaigns have earned him first place in 2 of the last 3 years at the national Turn On Your Million Dollar Brain conference of industry leaders. Daniel resides in Northern Palm Beach with his wife Kimberly and daughter Sophia.
Copyright © 2008 Daniel J Poulos
DJPOULOS@ELITELENDING.BIZ
http://www.EliteLending.biz
800.965.5956
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The Wrong Kind of Thrills
For Brandon and Amanda Mendelson, it had all the elements of a paperback thriller: the innocent newlyweds, the mysterious account held by an obscure bank in Boca Raton, the faceless corporation controlling everything behind the scenes. But when the Mendelsons discovered the strange overdue loan mistakenly listed on Amanda’s credit report, they weren’t exactly thrilled. The Glens Falls, N.Y., couple had never done business with that bank, and the error spoiled Amanda’s credit history. Making matters worse, their call to a national credit bureau yielded nothing more than a form letter stating that the accuracy of the entry had been “investigated” and “verified.” Now they can’t help but wonder: investigated how? Verified by whom? Brandon studied organizational leadership in school, but even he can’t imagine how the bureau failed to fix such an obvious mistake. “Maybe it fell through the cracks,” he says.
by valeria on Mon Feb 09, 2009 11:51 pm
Or maybe the process worked pretty much as it was designed to. Although they generally decline to discuss specific cases, the three major credit bureaus – Experian, Equifax and TransUnion—each attest to their commitment to accuracy and accountability in their record keeping. But while consumers might assume that each bureau employs an army of dedicated sleuths who carefully investigate and correct errors, all the bureaus actually process most disputes using a system that’s almost entirely automated—and where human beings are involved, they’re often working at a harried pace. The bureaus say the system, dubbed with the Muppety acronym e-OSCAR, is the most efficient way to handle the more than 20,000 disputes a day they receive. In practice, most complaints are electronically zapped straight to the lender, and according to consumer advocates, many lenders respond by simply re-reporting the erroneous data.
Credit-report accuracy is profoundly important now, because an error can wreak more havoc than ever on your financial life. Before the nation heard the words credit crisis, just about anyone with a pulse could get a loan. Now many banks are refusing credit to anyone who looks remotely risky. And as legions of anxious job hunters know, a growing number of employers routinely check credit reports before they make a hire. It’s no wonder, then, that the National Foundation for Credit Counseling says call volume is up 31 percent in the past 12 months. “Credit is on consumers’ minds more than ever before,” says Curtis Arnold, CEO of CardRatings.com.
But according to a 2007 survey by pollster Zogby, 37 percent of consumers who obtain their credit reports find errors, and half of those said they could not easily correct the mistakes. An earlier study by the U.S. Public Interest Research Group, a nonprofit consumer advocacy organization, found that one in four reports contained “serious errors.” For its part, the Consumer Data Industry Association, the industry’s trade group, says only 11 percent of consumers who get their credit report file a dispute and just 5 percent of those challenge the results. “That’s an excellent satisfaction rate,” says the group’s president, Stuart Pratt. Still, even some industry insiders say there’s a problem. Testifying before Congress, one CEO of an independent Arizona credit bureau likened the dispute process to “having an IRS audit, brain surgery, getting a tooth pulled or going to your own funeral.”
And when the dispute process fails, consumers say they are left feeling powerless. Martha Soto, a 63-year-old Antioch, Calif., shipping manager, says she couldn’t get the mortgage she needed last fall because Experian listed her as the defendant in an unpaid court judgment. She says she’s faxed records proving that she’s actually the plaintiff; Experian says they’re the wrong records, and the dispute is still unresolved, leaving Soto increasingly frustrated. “They’re defaming you, and you can’t do anything about it,” says Soto. “It’s scary to think an agency like that can control your life.”
From: SmartMoney Magazine by Anne Kadet – Feb.2, 2009
For complete article visit: http://www.smartmoney.com/Spending/Rip-offs/Why-The-Credit-Bureaus-Cannot-Get-it-Right/?page=all
Sometimes it takes an expert in the field of credit repair to assist consumers in removing negative information from their credit reports and helping them to not feel powerless. Founded by a former owner of a collection agency, Credit Justice Services helps consumers protect their credit rights using our 75 Day Credit Makeover Process. Our process is backed by knowledge, experience and know-how. We personally educate and assist the consumer to move forward in a positive direction. We do it ethically, affordably and quickly. Call 904-757-0880 today to speak to a Certified Credit Consultant and get on your way to freedom!
When the going gets tough, along comes inspiration
This past week the going got tough in all areas of my life. When life seems to be throwing nothing but curve balls at me… along comes an inspiring and moving story that reduces me to tears and lifts me from my dark place, gifting me with the courage to keep moving forward.
by valeria on Tue Feb 17, 2009 8:03 pm
The real message of this week’s blog is here:
http://www.youtube.com/watch?v=ySUYIA7nsdY
Meg Murphy,
Account Executive
484-375-5484
megmurphy@creditjusticeservices.com
Credit Repair Laws
About 20 years ago, there was a substantial increase in consumer complaints regarding credit reporting accuracy, and the credit agencies’ failure to respond. Individual states and the Federal Trade Commission took action against the three major bureaus to stop them from further violating the Fair Credit Reporting Act’s requirement that they maintain reasonable procedures to ensure “maximum possible accuracy” of credit reports.
by valeria on Tue Feb 24, 2009 7:14 pm
The following are important terms to understand when discussing credit repair:
The Fair Credit Reporting Act (FCRA) – A federal law regulating how credit-reporting agencies use a person’s information. Enacted in 1970 and substantially amended in the late 1990s and again in 2003, the FCRA restricts who has access to an individual’s sensitive credit information and how that information can be used.
The Fair Debt Collection Practices Act (FDCPA) – A US statute added in 1978 that created guidelines under which debt collectors may conduct business. Defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations.
The Fair and Accurate Credit Transactions Act (FACTA) – An amendment to the FCRA that allows consumers to:
1. Request and obtain a free credit report once a year from each of the three nationwide consumer credit reporting companies.
2. Place alerts on their credit histories if identity theft is suspected.
3. Receive a Credit Disclosure Notice from mortgage lenders that includes a person’s credit scores, range of scores, credit bureaus, scoring models and other factors affecting his or her score.
These laws encourage consumers to look into their credit history and make sure the information is complete and accurate. The most important piece of legislature when it comes to credit repair is The Fair Credit Reporting Act.
This federal law requires that the three credit bureaus make reasonable efforts to ensure the information contained in their credit reports is accurate. There are six key provisions that ensure the consumers’ right to contest negative information listed on a credit report.
The first provision allows an individual to dispute information in his or her credit report to a credit bureau, and then that bureau must promptly investigate and verify the information.
Provisions two and three set maximum time limits in favor of the consumer. The credit bureaus have 30 days to complete an investigation into a disputed item, and if they cannot verify it, they must delete it. The results of any completed investigation must be sent to the consumer within five days.
The fourth provision allows consumers to further dispute negative items. If a consumer believes that evidence supporting his or her dispute of information was disregarded, the credit bureaus must contact the creditor directly. That means the company claiming a negative item on a consumer’s credit report must respond to that person’s challenge of information.
The fifth provision deals with deleted information. Once an entry in the credit report is deleted, the entry cannot be reinstated unless the creditor certifies that the information is complete and accurate.
Finally, the sixth provision allows for a Consumer Statement to be added to an individual’s credit report. If the consumer disputes the accuracy of certain information, and it is verified by the creditor as correct, then the credit bureaus must include the consumer’s explanation of the dispute. This gives the individual the chance to have his explanation for inaccuracy listed directly under the negative item.
The legal lesson above makes it very clear that any individual can contest information and clean up his credit history by himself. However, the process requires relentless follow-up and must be completed in a timely matter. That’s where CJS comes in. We can help consumers deal with the tedious aspects of disputing items on their credit reports, and on average, our clients see a credit score increase between 50 and 100 points within 75 days.
Douglas Muir, CEO
