Credit Professor Radio: Foreclosure and Your Rights
What do you do if your house is in danger of foreclosure?
Learn about your rights and how the law affects you. Listen in as host Lee Rodrigues and “The Credit Professor” Regis Sauger give juicy strategies you can use today. The show will be recorded live on April 15th at 3:00 PST you can go to Blog Radio by clicking on the logo below. You can listen to the archived show below.
Regis Sauger the Credit Professor
Why You Should Fight Back
Are you frightened, ashamed or confused about your debts? Do you sometimes feel like you just want to give up?
Ignoring your problems may seem like the path of least resistance, but in the end it is much more painful, and will cost you thousands of extra dollars when it come times to get a loan on a house, car or other major purchase.
In our very first Credit Professor Radio show, host Lee Rodrigues talks to credit expert Regis Sauger about why you should fight back.
The show aired live on Wednesday, March 11 from 4-5PM PST (7-8PM EST) at http://www.blogtalkradio.com/Credit-Professor, and you can listen to the archived version here:
Regis Sauger the Credit Professor
This week’s Credit Professor Radio show topics:
How to negotiate your debts.
Make sure you open the letters from bill collectors — they’re funny!
The “Rule of 72“, and why banks don’t want you to have good credit.
The Federal Reserve System, and how we’ve all been brainwashed.
Your creditors don’t even have to come to your door to steal money from you.
How many credit repair services work.
“Free” Credit Reports Have Strings Attached
These days you really have to be on your guard – from dubious foreclosure saviors to nasty bill collectors trying to trick you into paying money that you don’t legally owe.
But did you know that Experian, one of the three major Credit Reporting Agencies, has a scam of its own?
One Free Annual Credit Report
As many people know, the Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Experian, TransUnion, and Equifax – to provide a free copy of your credit report, at your request, once every 12 months. It’s important to check your credit report once a year for accounts you don’t recognize, which can alert you to identity theft, and discrepancies that can affect your credit score, which often result from errors or fraud by ethically-challenged bill collectors.
Here’s what you may not know: by federal law, the only regulated source for obtaining these annual free credit reports is AnnualCreditReport.com. There are three ways to request your report:
- go to the AnnualCreditReport.com web site
- call 1-877-322-8228 toll-free
- fill out a request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281
Not All Free Reports Are Truly Free
When I Googled “free credit report,” the #1 listing was the Federal Trade Commission-approved AnnualCreditReport.com described above. The #2 listing was FreeCreditReport.com — which is an imposter site created by Experian.
If you order your “free” report through FreeCreditReport.com, Experian will automatically enroll you in a credit monitoring service that charges a monthly fee. Here’s the fine print on their site that you may not catch:
“When you order your free report here, you will begin your free trial membership in Triple Advantage(sm) Credit Monitoring. If you don’t cancel your membership within the 7-day trial period, you will be billed $12 for each month that you continue your membership.“
Does a 7-day trial period give you enough time to really try the service? And how easy is it to cancel once they’ve started to bill you? How did this happen?
On the Master Your Card blog, Mike summed it up well:
“In 2004, the U.S. Congress ordered the three major credit bureaus – Experian, Equifax, and TransUnion – to craft a website to allow consumers to order their credit reports online for free, once per year.
Not long after, Experian realized the legislation presented a clever, untapped marketing opportunity. They launched FreeCreditReport.com with the (obvious) hope that unsuspecting consumers wouldn’t know the difference between their not-so-free site and Congress’ mandated, free alternative.
Consumers have since been inundated on television, in print and, of course, online with ads for the FreeCreditReport.com website. That sing-song jingle (“Freeeeee Credit Report … dot.com!”) alone should be a crime, but that’s another topic for another day.”
What happens once you’re in their trap? There are many stories online of consumers who found that “unsubscribing” from Experian’s Triple Advantage program required months of phone calls, e-mails, and online forms.
Battle Of The Free Credit Report Bands
The FTC has received so many complaints about FreeCreditReport.com that they recently launched two of their own hipster videos with catchy tunes.
From the FTC press release:
“The new videos highlight the differences between AnnualCreditReport.com and those other sites that claim to provide ‘free’ credit reports. Other sites require users to pay hidden fees or agree to additional services. For example, some sites provide a free credit report if you enroll in a new service. If you don’t cancel the service during a short trial period, you’re likely to see membership fees on your credit card statement.”
You can watch the FTC spoof videos here:
Restaurant
Apartment
The Most Important Item On Your Credit Report
Flickr image by wsssst
Your credit report may be one of the most important documents that you will come across in your lifetime. In my opinion, it is more important than your marriage license, driver’s license, social security card, paycheck or bank statements. Why? Because your credit report determines how much you are going to pay in interest when you want to buy something.
If you have a low credit score, and you don’t care enough to do anything about it — no problem! You will just keep shelling out thousands of extra dollars to pay for high interest rates.
What is a “good” credit score?
There is a lot of talk out there about credit scores, but very few people understand what these magic numbers actually mean.
You probably had a credit score of around 450 when you were born, and in my years of experience, the highest scores I have seen are over just over 800. But these numbers are meaningless unless you understand how they affect your ability to get a new loan.
In general, a credit score of 660 or higher will get you approved for a government-guaranteed mortgage. What if your credit score is lower than that? Well, you can still get approved, but guess what — your mortgage will have a much higher interest rate.
Are you ready to do the work it takes to improve your score? You may be shocked to know that there is one item that will do more damage to your credit score than just about anything else.
Late Payments Kill Your Credit Score
Flickr image by wsssst
The single most important item that will lower your credit score is a recent late payment. I have seen credit scores sink a hundred points in one day (from 690 to 590) because payment on one account showed up as being 30 days late.
And size does not matter! Even if you miss one measly $50 payment, your credit score will drop drastically. Your credit scores will be affected not by the dollar amount of the entry, but by your track record of making payments on time.
Take a look at your credit report. Next to each account, the report shows how often you were 30, 60 or 90 days late in making your payment.
Look For Common Errors In 30, 60 and 90 Day Reporting
It is important to remember that the data in your credit report was entered by humans, and humans do make mistakes. Review your credit report carefully, and double check any instances of making a late payment to be sure they are correct.
What if you look at your report and it shows you as being 90 days late (4) times yet 60 days late (2) times? Now, let’s use some common sense. How can you be 90 days late before you are 60 days late? Not possible. Sorry, you cannot get to third base without passing second base.
Debt Stress Is A Pain In The Neck
Photo by PunkJr
Are you being hounded by collectors? Is the bank threatening foreclosure? Do you have judgments on your credit report?
Studies show that these financial stresses may hurt more than just your credit score!
Debt Stress Can Literally Make You Sick
According to an Associated Press-AOL Health poll, people who reported high levels of debt stress are more likely to suffer from certain illnesses, including:
- ulcers or digestive tract problems
- migraines and other headaches
- severe anxiety
- severe depression
- heart attacks
- muscle tension, including pain in the lower back
People who reported high stress also were much more likely to have trouble concentrating and sleeping, and were more prone to getting upset for no good reason.
Feel Better Starting Today
Are you ready to make the pain go away? Then you need to make a commitment to yourself to start tackling that mountain of debt. It may be daunting, but the rewards are great.
Regis Sauger, author of Get Out Of Credit Prison, tells his readers to take a deep breath, and remember that you only have to do it one step at a time.
“Look at the big picture. You have a big job ahead of you, but look at it as part of a larger financial planning program.
Staying focused on your long-term objective will help keep you from becoming discouraged should you lose a battle here or there. There are many battles in any war; you don’t have to win them all to emerge as the winner.”
Lost Note Foreclosure Defense
Photo by Ed Duggan
Joe Lents has been living in his foreclosed Boca Raton, Florida home since 2002 — without making a single payment to his lender.
Is Joe a criminal? No – he is only following the law.
Get Foreclosure Thrown Out In Court
There is a secret strategy for defending your home that the banks don’t want you to know about.
When Washington Mutual took Joe to court to foreclose on his home, he asked them to produce the original note that he signed. But they had conveniently lost this note, which is his legal promise to pay the mortgage. Without this original signed document, the lender could not prove the debt, and so the judge threw out the case.
According to LoanWorkout.org,
“If you’re going to take my house away from me, you better own the note,” said Joe Lents. The since-failed lender failed to prove that it owned Lents’ mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.
More homeowners are becoming aware of this foreclosure defense. This CNN video on Mortgage Squatting shows Ohio Representative Marci Kaptur telling her constituents to stay in their homes by using what she calls the “Produce The Note” strategy.
In October 2007, Ohio Federal Judge Christopher Boykin dismissed a number of foreclosure cases and instructed the attorneys representing the lenders to “come back to my courtroom with the original mortgage note or a certified copy.”
In about 40% of foreclosure cases, the lender simply cannot provide the note.
Photo by Peat Bakke
Why? Because the minute you finalized your mortgage, they sliced, diced and “securitized” it, and in many cases they secretly changed the terms of the loan. Since altering the loan without your knowledge is fraud, they want to hide the evidence — which means conveniently “losing” that little piece of paper with your signature on it.
A University of Iowa study describes how sloppy most foreclosure cases are:
“…of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.”
Stay In Your Home
When a bank sues you for foreclosure without the original note, they are committing fraud on the court.
But it happens every day. Most people go into a panic the moment they receive a legal document, and assume that as the little guy, they will automatically lose.
Know your rights! Get more information about the lost note strategy in Chapter 12 of my book, Get Out Of Credit Prison.
Five Credit Repair Scams To Avoid
Photo by The Shopping Sherpa
Cleaning up your credit report can take a lot of time, perseverance and creativity.
So what about all of those credit repair businesses out there, promising to clean up your credit report for a fee? Is it worth it? Or should you do it yourself?
It’s important to keep an eye out for companies that contact you with hard sell tactics, outrageous promises and huge fees.
Avoid Credit Repair Scams
An article on MSN Money describes five such “popular approaches for making consumers part with their money with the promise of a better credit rating.” Link to the full story here.
The story also provides a great list of questions to ask before signing up with a credit repair counselor:
- Who is proposing the plan?
space- Has this entity had problems before?
space- How are they paid, how much and when?
space- What’s the downside of this plan?
space- Did you contact them or did they contact you?
space- What’s the reason for not doing this yourself?
space
Clean Up Your Credit Report Yourself
Why would you give hundreds of dollars or over a thousand to someone else to clean up your credit when you can do it yourself? As the article points out,
“Thinking of paying someone else to clean up your credit file? Anything they can do, you can do better. And cheaper. But it takes time and dedication.”
If you’ve got the time and dedication, and are ready to get started, Regis Sauger’s e-book “Get Out Of Credit Prison” contains more than 40 strategies for how to legally fix your credit and take your life back.
Credit Card Traps Exposed
Photo by Andres Rueda
On the Get Rich Slowly blog, Justin Henry describes five traps to avoid when getting and using a credit card.
Justin is the President of Index Credit Cards, a terrific credit card comparison and information site.
What I love most is his rousing call to action at the end:
“Credit cards ain’t for fools. If you’re going to carry one, then take responsibility for understanding what you’re getting into, and fight fire with fire when your card company decides to play rough.”
Credit Dispute Myths Revealed
Photo by cvander
Have you disputed an item on your credit report, only to be ignored by the Credit Bureaus?
Credit Bureaus work hard to discourage you from attempting to restore your credit. While the Fair Credit Reporting Act (FCRA) legally requires them to give you a chance to dispute an item on your credit report, Credit Bureaus do whatever they can to make it difficult for the average consumer to exercise their rights.
This may come as a shock to you, but the Credit Bureaus do not want you to have good credit because lenders — their customers — make far more profits from people who have low credit scores.
Who Handles Disputed Items On Credit Reports?
Under pressure from Washington, the Credit Bureaus now include a generic dispute form when they mail your credit report to you. In theory, if you see an item on your report that you do not believe is correct, you simply fill out the form and send it back so they can fix it.
Do these forms work? Well, sometimes they do.
But put your imagination to work here for a minute, and place yourself in an office building somewhere in Atlanta, Georgia where you along with another hundred workers do nothing else but respond to credit disputes.
Photo by wbaiv
Now, this is not the highest paid job in the company, and the working conditions are not as plush as the executives on the top floor with a nice view of the Atlanta skyline. In your tiny cubicle, you get a telephone with speed dial and a place to put your purse. You report for work at 8 AM and wait for the guy from the mail room to drop off a big pile of dispute letters from irate consumers who are angry about their bad credit.
Most of these letters are pretty generic, the sort of thing you get from a “credit repair kit” sold at one of the leading discount stores for $19.95. Then there are the nasty letters, the ones that practically shout, “You are the reason for my bad credit”, “My brother-in-law says that by law you must help me” or “I am going to let the air out of your tires, unless you fix my credit.”
What a great job, right? These credit dispute staff come in to work every day to do the same mundane task. The pay is terrible, and since people quit all the time, half of the workers are still “in training.” Do you really expect your dispute letter will be handled in a highly professional manner?
How Do They Handle Disputes?
Under the Federal Debt Collection Practices Act (FDCPA), you have the right to ask a collector or creditor to prove that the amount owed is accurate. The woman who reads your dispute letter is required by law to “verify the debt”. She probably already has the phone number of the creditor or the collection agency in her automatic dialer, so she just calls them up and says, “Do you have so and so as a customer”? Then they answer, “Why, yes we do and they owe us $1,543.20.” So she makes a note on your credit report that the account has been verified.
She’s just taking their word over yours, and she never checked any further into the details. Why would she, when she just wants to get to the end of her work day and go to the movies with her boyfriend? This is how many errors end up on credit reports. Even though verification is mandated by law, Credit Bureaus simply do not provide 100% accuracy.
There Are No Credit Cops
Photo by davidsonscott15
How can they get away with this? Well, on the surface, the Credit Bureau in this example has followed the law. The Federal Trade Commission is supposed to enforce these laws, but they often lean toward the side of the credit bureaus, and there are no “credit cops” on patrol to make sure that everything is done correctly.
And in all too many cases, the customer simply gives up and stops trying. They are counting on you giving up.
You lose unless you fight for your own rights.
To learn more about how to make Credit Bureaus to sit up and take notice of your dispute, check out my e-book, Get Out Of Credit Prison.
Beware Of Foreclosure Short Sale Scams
So you’re a couple of months behind on your mortgage payments, and you’ve been threatened with foreclosure. Perhaps your bank is pressuring you to cooperate with a “short sale.” They want you to sign a “deed in lieu of foreclosure,” where you sign a piece of paper to turn your house over to them, in return for a promise to keep the whole thing off your credit report.
Think again! Signing that paper will not make your problems go away — in fact, it may make things worse.
Don’t Lose Your Home – AND Your Good Credit
In today’s world, many folks are confused about what to do when facing a foreclosure. There are a lot of “opportunists” who claim to have an angle on how to get your money figured out. I have seen it all. The most common scam is telling you that a short sale of your home will save your credit.
Do you honestly think that the bank is NOT going to put your late payments on your credit report? No one tells you the truth — that your credit is already on the rocks and going down. Why? Because, they will tell you anything to get your money.
Photo by miusam-ck
Photo by miusam-ck
Don’t Trust “Foreclosure Saviors”
Be on the alert when a well-dressed shark tells you he is going to make your payments for you and save your credit if you just sign a deed in lieu of foreclosure. This is total BS. A rip-off. A scam.
Wake up, man! Do you think strangers walk around handing out money to people they don’t know? This is the real world, and everyone has an angle to get your hard-earned money.
Get It In Writing
The only way this short-sale strategy will work is if the lender agrees in writing:
- to delete your prior mortgage payment history from your credit report, and
space - that they will NOT proceed with the foreclosure action.
If you get this agreement in writing, you can avoid a “default judgment” and keep the whole thing out of public records.
But be alert, and do not accept personal assurances or promises over the telephone. People lie every day.
