Many times you have seen credit score information in this spot. And many of you take heed. But from my observations there are many of my readers and of the population in general that have not let the importance of a good credit score soak in. Poor credit scores can be extremely costly and some folks are just oblivious. They can make your renter's insurance, home owner's insurance, car insurance, car loan interest rate or credit card interest rate be much more costly for you than for the person with good credit scores. Some folks just think they can't do anything about it. But that is not true. You just have to learn to manage credit and learn what helps it and what hurts. It is almost like overeating. It takes a life change to make it better.
I can help. If you or a friend wants help with it, just email me at george.margrave@migonline.com or call 777-HOME (4663).
Tuesday, April 28, 2009
Thursday, April 23, 2009
Today's financial markets "per George"
It looks to me like the economic world is improving. I guess that would be true as long as you aren't the one without a job. From what I read the new unemployment claims have slowed down. There seems to be a little more spending in the stores and restaurants. The stock market is doing better (except for Monday). That alone helps people to be more optimistic. The banks are making money instead of losing so much. There are lots of talking heads trying to be negative, but somehow there is optimism showing. And that is what it takes. As long as your job is secure it is a really good time to buy a home. The government's affordability index is very high in fact the highest in 39 years. The great prices combined with the very low rates make for a great housing opportunity.
If you or someone you know would like to be qualified my e-mail address is george.margrave@migonline.com
For additional information, call George at 615/777- HOME (4663) or email George.Margrave@migonline.com.
If you or someone you know would like to be qualified my e-mail address is george.margrave@migonline.com
For additional information, call George at 615/777- HOME (4663) or email George.Margrave@migonline.com.
Tuesday, April 14, 2009
ID Theft Emerges as Top Crime
According to the Justice Department, identity theft has been the top-ranked reported crime by consumers for the ninth consecutive year and has passed drug trafficking as the top crime in the nation. It's a threat mortgage lenders know all too well. Earlier this week, the Mortgage Asset Research Institute, in its 11th Periodic Mortgage Fraud Case Report to the Mortgage Bankers Association, said reported incidents of mortgage fraud increased by 26 percent in 2008 to unprecedented levels. And the Financial Crimes Enforcement Network reported last month that suspicious activity reports on mortgage fraud increased by more than 44 percent from 2007 to 2008.
MARI reported that “straw buyers” engaged in fraudulent activity represents an emerging trend in identity theft. Fraudsters have increasingly stolen identities of elderly people and immigrants, setting them up as straw buyers to commit mortgage fraud.
“Fraud can represent up to 5 percent of lost revenue,” said Heather Czermak, senior product manager with Wolters Kluwer Financial Services, Minneapolis. “The return on investment on fraud technology prevention can represent a 4:1 ratio in just the first year. The need for investment and the need for a controlled process is essential from a best-practices standpoint.”
“Because you deal with consumers every day, you know you have to deal with the identity theft issue,” said Terry Franzen, partner with Franzen and Salzano PC, Norcross, Ga. “You have to take stock of what is in your files—which are full of personal information—and take steps to ensure that the data are not compromised.”
One step is to determine who has access, as well as who should have access, Franzen said. “You have to go into your office with a jaundiced eye—kind of like being the bad guy—to see how easy it is to commit ID theft,” she said. “You need to train employees and contractors about safe information security practices.”
Franzen said financial institutions and consumers cannot be too careful when it comes to protecting identity. “I recently went to an FBI seminar, and the speaker said that everyone should shred all mail received at home,” she said. “All a thief needs is a magazine cover with your name and address.”
Mortgage lenders must comply by May 1 with the Identity Theft Red Flags Rule. By then, lenders must have a written plan in place for dealing with identity theft, not only in identifying specific red flags, but also assisting consumers who believe they have been a victim of identity theft.
“It's not a mystery about what a red flag is,” Franzen said. “It's those things that you need to have as part of your plan. And it should be a living, breathing document that gets reviewed and updated regularly.”
Failure to comply can result in stiff penalties, including a $2,500 fine for each knowing violation, cease and desist letters and Unfair and Deceptive Trade Practice Act violations, which can result in treble damages and attorney’s fees. “There really is no alternative to non-compliance,” Franzen said.
Donald Bundy, general counsel with Prospect Mortgage, Skokie, Ill., recently implemented a company identity theft prevention program. He said in 2008, the bank reported 120 cases of identity theft, of which 105 represented mortgage ID theft.
Initial steps are simple, such as getting the correct address and phone number of the alleged victim. “You have to make sure that you are making contact with the victim of the crime, and not the perpetrator,” Bundy said.
Another step involves informing the alleged victim that an investigator may be contacting them, as well as having them complete an ID theft package requesting more information and encouraging them to notify the police. “In some cases, they don't want to file a police report, because they know the perpetrator,” Bundy said. “At this point, you are protecting yourself as well as the alleged victim.”
All other legal actions, such as foreclosures and collections, must be suspended, Bundy said. “You don't open yourself up to further liability by further making them a victim,” he said. “If you further damage their credit, you further expose yourself to damages.”
Prospect's largest ID theft case involved a home equity line of credit account, in which the perpetrator stole nearly $725,000 to purchase two sports cars that were shipped to Nigeria. Prospect worked with Nigerian authorities to board the ship when it arrived in Lagos, only to discover that the ship made a stop elsewhere, where the cars were removed from the ship.
“It was a total loss,” Bundy said. “And it was preventable.”
By aggressively working with consumers, Bundy said, lenders can resolve ID theft problems and create goodwill. “If you want to generate a lot of bad publicity, then don't advocate for the victim,” he said. “Work with the victim and help them as much as you can.”
Czermak said technology and automation can assist lenders by embedding compliance within existing systems. “One reason why institutions are trying to embed compliance requirements is that it gets applied consistently across the loan pool,” she said. “It reduces the risk of employee training issues and enables real-time risk rating and risk scoring of new applications prior to doing business with them.”
http://www.mortgagebankers.org/tools/FullStory.aspx?ArticleId=2695
Sent by Jennifer Hamby
MARI reported that “straw buyers” engaged in fraudulent activity represents an emerging trend in identity theft. Fraudsters have increasingly stolen identities of elderly people and immigrants, setting them up as straw buyers to commit mortgage fraud.
“Fraud can represent up to 5 percent of lost revenue,” said Heather Czermak, senior product manager with Wolters Kluwer Financial Services, Minneapolis. “The return on investment on fraud technology prevention can represent a 4:1 ratio in just the first year. The need for investment and the need for a controlled process is essential from a best-practices standpoint.”
“Because you deal with consumers every day, you know you have to deal with the identity theft issue,” said Terry Franzen, partner with Franzen and Salzano PC, Norcross, Ga. “You have to take stock of what is in your files—which are full of personal information—and take steps to ensure that the data are not compromised.”
One step is to determine who has access, as well as who should have access, Franzen said. “You have to go into your office with a jaundiced eye—kind of like being the bad guy—to see how easy it is to commit ID theft,” she said. “You need to train employees and contractors about safe information security practices.”
Franzen said financial institutions and consumers cannot be too careful when it comes to protecting identity. “I recently went to an FBI seminar, and the speaker said that everyone should shred all mail received at home,” she said. “All a thief needs is a magazine cover with your name and address.”
Mortgage lenders must comply by May 1 with the Identity Theft Red Flags Rule. By then, lenders must have a written plan in place for dealing with identity theft, not only in identifying specific red flags, but also assisting consumers who believe they have been a victim of identity theft.
“It's not a mystery about what a red flag is,” Franzen said. “It's those things that you need to have as part of your plan. And it should be a living, breathing document that gets reviewed and updated regularly.”
Failure to comply can result in stiff penalties, including a $2,500 fine for each knowing violation, cease and desist letters and Unfair and Deceptive Trade Practice Act violations, which can result in treble damages and attorney’s fees. “There really is no alternative to non-compliance,” Franzen said.
Donald Bundy, general counsel with Prospect Mortgage, Skokie, Ill., recently implemented a company identity theft prevention program. He said in 2008, the bank reported 120 cases of identity theft, of which 105 represented mortgage ID theft.
Initial steps are simple, such as getting the correct address and phone number of the alleged victim. “You have to make sure that you are making contact with the victim of the crime, and not the perpetrator,” Bundy said.
Another step involves informing the alleged victim that an investigator may be contacting them, as well as having them complete an ID theft package requesting more information and encouraging them to notify the police. “In some cases, they don't want to file a police report, because they know the perpetrator,” Bundy said. “At this point, you are protecting yourself as well as the alleged victim.”
All other legal actions, such as foreclosures and collections, must be suspended, Bundy said. “You don't open yourself up to further liability by further making them a victim,” he said. “If you further damage their credit, you further expose yourself to damages.”
Prospect's largest ID theft case involved a home equity line of credit account, in which the perpetrator stole nearly $725,000 to purchase two sports cars that were shipped to Nigeria. Prospect worked with Nigerian authorities to board the ship when it arrived in Lagos, only to discover that the ship made a stop elsewhere, where the cars were removed from the ship.
“It was a total loss,” Bundy said. “And it was preventable.”
By aggressively working with consumers, Bundy said, lenders can resolve ID theft problems and create goodwill. “If you want to generate a lot of bad publicity, then don't advocate for the victim,” he said. “Work with the victim and help them as much as you can.”
Czermak said technology and automation can assist lenders by embedding compliance within existing systems. “One reason why institutions are trying to embed compliance requirements is that it gets applied consistently across the loan pool,” she said. “It reduces the risk of employee training issues and enables real-time risk rating and risk scoring of new applications prior to doing business with them.”
http://www.mortgagebankers.org/tools/FullStory.aspx?ArticleId=2695
Sent by Jennifer Hamby
Tuesday, April 7, 2009
The $8,000 Tax Credit.
The news seems to need emphasizing, so here it is again.
http://www.irs.gov/newsroom/article/0,,id=205416,00.html
An article I found on the IRS regarding the $8000 credit. It explains some of the different options borrowers have to get the credit. I wasn't aware of the first option so I wanted to share.
The filing options to consider are:
** File an extension.Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.
File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later. Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.
Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.
Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.
----------------------------------------------------------
If You Pay PMI ...
When you take out a first mortgage with less than 20% down, you pay a monthly private mortgage insurance (PMI). If you took your mortgage on or after January 1, 2007, that PMI expense is now deductible. Simply use Line 13 on Schedule A -- the same form that you use to deduct mortgage interest and property taxes. Your lender should make this easy by telling you the amount of your PMI premium in Box 4 of your Form 1098. This deduction is scheduled to disappear after 2010, so make the most of it while it lasts!
Sent by my brother Ande
http://www.irs.gov/newsroom/article/0,,id=205416,00.html
An article I found on the IRS regarding the $8000 credit. It explains some of the different options borrowers have to get the credit. I wasn't aware of the first option so I wanted to share.
The filing options to consider are:
** File an extension.Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.
File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later. Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.
Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.
Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.
----------------------------------------------------------
If You Pay PMI ...
When you take out a first mortgage with less than 20% down, you pay a monthly private mortgage insurance (PMI). If you took your mortgage on or after January 1, 2007, that PMI expense is now deductible. Simply use Line 13 on Schedule A -- the same form that you use to deduct mortgage interest and property taxes. Your lender should make this easy by telling you the amount of your PMI premium in Box 4 of your Form 1098. This deduction is scheduled to disappear after 2010, so make the most of it while it lasts!
Sent by my brother Ande
Tuesday, March 24, 2009
Market update March 25, 2009
The first day of Spring has come and gone. And it seems that the outlook of our industry and the Country is starting to turn the corner. The better days on the stock market makes everyone who has a 401k breath a little easier and even those who weren’t invested can look at the news and see less pessimism . And Monday the report of National Real Estate sales took a turn for the better.
Locally, THDA announced a new program where a person who hasn’t owned a home in three years can borrow the money for a down payment and then pay it back from the tax credit of $8,000. Or they can get a 4% grant from THDA (with a slightly higher rate) and still get their $8,000. So on a $175,000 home the total of free cash is $15,000. Couple this with great interest rates and bargain basement home prices and you have a great situation.
Locally, THDA announced a new program where a person who hasn’t owned a home in three years can borrow the money for a down payment and then pay it back from the tax credit of $8,000. Or they can get a 4% grant from THDA (with a slightly higher rate) and still get their $8,000. So on a $175,000 home the total of free cash is $15,000. Couple this with great interest rates and bargain basement home prices and you have a great situation.
Tuesday, March 10, 2009
Don't Believe These 7 Credit Card Myths
They sound sensible, but acting on them can cost you
Myth No. 1: Writing 'See ID' on the signature line on the back of your cards will stop a credit card thief cold and absolve you of any liability if a thief uses it.
The Logic: The "Ask for ID" or "See ID" prompt reminds salespeople to confirm that the name on the credit card matches that of the person holding it.
The Reality: An unsigned credit card is invalid, technically, according to the agreements that card issuers have with retailers. Many clerks don't even check for signatures at all. If you do give a clerk an unsigned card or one with "See ID" written instead, they're supposed to have you sign the back of the card and check the signature against your driver's license or passport. But that's only if the cashier bothers to take the time to compare that signature to the one on the driver's license.
Myth No. 2: There's no credit limit on your American Express card, so you can buy anything you want.
The Logic: Years of powerful advertising from American Express have probably locked at least one of their messages in your mind: "No preset spending limit."
The Reality: AmEx has changed; it no longer issues only charge cards. They issue credit cards, which allow you to carry a balance. However, if you inspect the marketing info from Amex, the phrase "no preset spending limit" usually comes with an asterisk. In the fine print, you'll find wording to the effect that this "... does not mean unlimited spending. Your purchases are approved based on a variety of factors, including current spending patterns, your payment history, credit record and financial resources known to us."
Myth No. 3: You need one of each of the big cards -- Visa, MasterCard, American Express and Discover -- in your wallet because you may be stuck someplace that accepts one and not the others.
The Logic: People wonder if the place they're going will take the card(s) they have probably because of TV ads for Visa that show flashy restaurants & exclusive hotspots ... that don't take American Express."
The Reality: "If you have two of the big four, you're not likely to have any problems," says Linda Sherry, national priorities director for Consumer Action in Washington, D.C., "and millions of people just get by with one. It's much simpler."
Myth No. 4: You can give your credit score a boost by paying more than you owe.
The Logic: Paying more than you owe does temporarily bump up the amount of available credit on your card. It's also true that using a smaller percentage of the credit available in your accounts -- known in the industry as keeping a "low utilization ratio" -- helps your credit score. Lastly, it's thought that early credit scoring models may have given people a boost when they paid a personal or car loan a month early, so some may think that the same thing would apply to their plastic.
The Reality: "Even though you may be below zero on an account, it's assumed that's a temporary situation," says Roslyn Whitehurst, a spokesperson with the credit bureau Experian. "Whether you've got a credit of $100 or $1,000, it still shows as a zero balance for scoring purposes."
Myth No. 5: Using your debit card wisely can help your credit score.
The Logic: Debit and credit cards look alike, both bearing Visa, MasterCard or other logos. They're treated virtually the same by retailers. Thus, both should have an impact on credit scoring.
The Reality: "Having a bank account with a debit card and maintaining it properly shows that you're a responsible consumer," says Sherry. "But it is not taken into account" in credit scores, she says.
Myth No. 6: Retailers can set a minimum amount you can charge on a credit card when you buy something from them.
The Logic: In a small store or restaurant, it's not uncommon to find a sign that says, "$5 minimum for credit card purchases." If this wasn't allowed by the credit card companies, surely they'd crack down on it.
The Reality: Retailers who set minimum charges are breaking their agreements with the card companies. Because retailers pay interchange fee (on average, about 2% of the sale) plus possible transaction fees on each credit card purchase. When a store owner posts a sign like this, they risk losing their ability to accept cards. "You're allowed to charge any amount on your card, even a penny," says Zeichner. "The problem is that the retailer wants you to charge enough to make it worth his while."
Myth No. 7: If you go over your credit limit and pay it back before the due date, you'll be fine.
The Logic: Lots of people go over their credit limits. After all, credit card companies don't want to embarrass you and lose you as a customer, so they rarely decline your purchase. As long as you're a good customer and you keep the overage reasonable, they won't hit you with an over-the-limit fee.
The Reality: It's true that credit card companies don't want to decline your purchase when you go over your limit. And if you're buying something that puts you a few dollars or more over the top, there's a good chance they'll give you the green light. But remember, every time you pass that credit limit, even for a short period, you could give the issuer a reason to boost your interest rate to penalty rate levels -- sometimes more than 30 percent. To avoid fees, try calling before your purchase to see if they can give you at least a little bump in your credit line.
http://finance.yahoo.com/banking-budgeting/article/106525/Don
Sent by Jennifer Hamby
Myth No. 1: Writing 'See ID' on the signature line on the back of your cards will stop a credit card thief cold and absolve you of any liability if a thief uses it.
The Logic: The "Ask for ID" or "See ID" prompt reminds salespeople to confirm that the name on the credit card matches that of the person holding it.
The Reality: An unsigned credit card is invalid, technically, according to the agreements that card issuers have with retailers. Many clerks don't even check for signatures at all. If you do give a clerk an unsigned card or one with "See ID" written instead, they're supposed to have you sign the back of the card and check the signature against your driver's license or passport. But that's only if the cashier bothers to take the time to compare that signature to the one on the driver's license.
Myth No. 2: There's no credit limit on your American Express card, so you can buy anything you want.
The Logic: Years of powerful advertising from American Express have probably locked at least one of their messages in your mind: "No preset spending limit."
The Reality: AmEx has changed; it no longer issues only charge cards. They issue credit cards, which allow you to carry a balance. However, if you inspect the marketing info from Amex, the phrase "no preset spending limit" usually comes with an asterisk. In the fine print, you'll find wording to the effect that this "... does not mean unlimited spending. Your purchases are approved based on a variety of factors, including current spending patterns, your payment history, credit record and financial resources known to us."
Myth No. 3: You need one of each of the big cards -- Visa, MasterCard, American Express and Discover -- in your wallet because you may be stuck someplace that accepts one and not the others.
The Logic: People wonder if the place they're going will take the card(s) they have probably because of TV ads for Visa that show flashy restaurants & exclusive hotspots ... that don't take American Express."
The Reality: "If you have two of the big four, you're not likely to have any problems," says Linda Sherry, national priorities director for Consumer Action in Washington, D.C., "and millions of people just get by with one. It's much simpler."
Myth No. 4: You can give your credit score a boost by paying more than you owe.
The Logic: Paying more than you owe does temporarily bump up the amount of available credit on your card. It's also true that using a smaller percentage of the credit available in your accounts -- known in the industry as keeping a "low utilization ratio" -- helps your credit score. Lastly, it's thought that early credit scoring models may have given people a boost when they paid a personal or car loan a month early, so some may think that the same thing would apply to their plastic.
The Reality: "Even though you may be below zero on an account, it's assumed that's a temporary situation," says Roslyn Whitehurst, a spokesperson with the credit bureau Experian. "Whether you've got a credit of $100 or $1,000, it still shows as a zero balance for scoring purposes."
Myth No. 5: Using your debit card wisely can help your credit score.
The Logic: Debit and credit cards look alike, both bearing Visa, MasterCard or other logos. They're treated virtually the same by retailers. Thus, both should have an impact on credit scoring.
The Reality: "Having a bank account with a debit card and maintaining it properly shows that you're a responsible consumer," says Sherry. "But it is not taken into account" in credit scores, she says.
Myth No. 6: Retailers can set a minimum amount you can charge on a credit card when you buy something from them.
The Logic: In a small store or restaurant, it's not uncommon to find a sign that says, "$5 minimum for credit card purchases." If this wasn't allowed by the credit card companies, surely they'd crack down on it.
The Reality: Retailers who set minimum charges are breaking their agreements with the card companies. Because retailers pay interchange fee (on average, about 2% of the sale) plus possible transaction fees on each credit card purchase. When a store owner posts a sign like this, they risk losing their ability to accept cards. "You're allowed to charge any amount on your card, even a penny," says Zeichner. "The problem is that the retailer wants you to charge enough to make it worth his while."
Myth No. 7: If you go over your credit limit and pay it back before the due date, you'll be fine.
The Logic: Lots of people go over their credit limits. After all, credit card companies don't want to embarrass you and lose you as a customer, so they rarely decline your purchase. As long as you're a good customer and you keep the overage reasonable, they won't hit you with an over-the-limit fee.
The Reality: It's true that credit card companies don't want to decline your purchase when you go over your limit. And if you're buying something that puts you a few dollars or more over the top, there's a good chance they'll give you the green light. But remember, every time you pass that credit limit, even for a short period, you could give the issuer a reason to boost your interest rate to penalty rate levels -- sometimes more than 30 percent. To avoid fees, try calling before your purchase to see if they can give you at least a little bump in your credit line.
http://finance.yahoo.com/banking-budgeting/article/106525/Don
Sent by Jennifer Hamby
Wednesday, March 4, 2009
Don’t let the refinance opportunity pass!
Since the middle of December we have been delivering our own version of the stimulus to many of our clients. That is: we have been refinancing a lot of loans. It slowed a little the last two or three weeks when rates crept upward. But they have dropped back some again. We really don’t think you will see them get much lower if any. And picking the bottom of mortgage rates is like trying to outguess the stock market. Here are many reasons to take a look at it.
Lower rate and payment
Lower number of years
Pull out cash to pay off higher rate debts
Pull out money to improve your home
And you may have another idea. I don’t charge to run the numbers for you. Just call 615-777-HOME (4663) or e-mail george.margrave@migonline.com
Here is what I need to know:
Your best guess as to value of your home.
Loan balance of first mortgage and monthly payment
Balance for second mortgage and monthly payment
Annual taxes
Annual insurance
Approximate credit score
Would you like some cash from the loan and if so how much?
Would you want to add the closing cost to the loan?
How many years do you want me to figure?
Lower rate and payment
Lower number of years
Pull out cash to pay off higher rate debts
Pull out money to improve your home
And you may have another idea. I don’t charge to run the numbers for you. Just call 615-777-HOME (4663) or e-mail george.margrave@migonline.com
Here is what I need to know:
Your best guess as to value of your home.
Loan balance of first mortgage and monthly payment
Balance for second mortgage and monthly payment
Annual taxes
Annual insurance
Approximate credit score
Would you like some cash from the loan and if so how much?
Would you want to add the closing cost to the loan?
How many years do you want me to figure?
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