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Red Cross Donation

March 18th, 2011 • By: wadler Uncategorized

We are not a sponsor for Red Cross and we are not personally collecting any money to help raise money for Disaster Relief Funds for Japan.  However, we are hoping by putting a banner at the top of the page it will help direct your to a place that can help victims of the Earthquake and Tsunami in Japan.  If you do not donate to the Red Cross please donate to any charity for any amount of money. Anything really does help.

We realize it is hard times for everyone, however, when a disaster such as this happens in the World it makes you realize that everything can change in the blink of an eye.  Whether it is from good to bad or from bad to good.  The people of Japan lost their Mothers, Fathers, Children, Brothers, Sisters, Cousins, Friends, School Mates, Co-Workers in a matter of moments.  Yes, in America we are having tuff times but at least we still have the ability to laugh with our friends, hug our parents, kids, wives, and siblings.

Our happiness and current situation is all relative to where we are in the world.  We can shut our TVs and not read the papers and pretend that nothing is happen or we can follow every waking moment.  Neither which we think are great ideas.  We think us as a nation should be conscience of what is going on and try and help in some small way.  We know even after a major disaster the sun is going to rise and we as a race of human beings will continue with our daily lives.

To conclude, most of us have suffered from losing a loved one, a job, a house; but to lose it all at once can be paralyzing.  We may not have the ability to to solve the Japan crisis, but at least we can try and alleviate some of the pain for these poor poor people.

 

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Land of the Free

Strength

Strength

Everyone is concerned if we have hit the bottom of the housing market. They have become so obsessed with their home value and the marketplace they have lost sight of what is best for them, their family, and the country.

Since the real estate market crashed we have experienced an increase of sales in the residential real estate industry in the past couple years. However, as you may already know this increase was artificially inflated due to the government incentivizing consumers with an $8,000 housing credit. Nonetheless, the majority of what a consumer read in newspapers, watched on TV, and heard from Wall Street speculators was we have hit the bottom and are headed towards a recovery.

It would be unfair to say all newspapers, television stations, and speculators were saying this was true, but the majorities were trying to be positive about the country’s economic situation.
Whether you agree or disagree if the country is/was recovering; the country’s stock and real estate market were improving. On the surface it appeared the housing tax credit did stimulate home sales. That was until earlier this month. In early August the National Association of Realtors stated homes sales for July declined by 27%. This is the largest decrease in over 15 years.

While it seems that is a large decline some analysts believe the 27% is a skewed percentage. Their belief is if the housing credit never existed home sales would have just kept declining slowly over a period of time at a steady rate, thus the large decline would have never happened.

At Mortgage Foreclosure Report we believe the following:
1. The housing tax credit did stimulate the housing market
2. A massive decline was bound to occur after the housing credit expired
3. The 27% is inflated. We agree with the analysts from the note above.

What does all of this mean? To us it does not mean much except the country is in a state of flux and that our markets are driven by what people hear and believe. When we review our countries history and decipher when we were the most successful we decided it was when we produced goods the rest of the world needed. However, over the past several decades we have become a country of consumers and minimal producers. Our belief is the country has become about big business. From our point of view there is nothing wrong with that except these companies are under pressure to turn a profit and have to make their stock values high. Additionally, in our eyes what made this country strong, besides producing goods, was when the small entrepreneur set out to start his/her company. Nevertheless, big corporations have been structured to hit certain profits every quarter and are incentivized through bonuses. Therefore, their main objective is to what is best for the company. Thus, to be a big corporation and to be competitive in the US outsourcing has become an integral part of doing business. Outsourcing, while understandable and smart for a corporation, leads less production in the country which then leads to fewer jobs which then leads to a slowly declining economy. Please do not misunderstand what we are saying in this article. We are for capitalism and free markets, however, at some point as a nation we have to look at what our major companies are doing inside the US and ask how we can fix the declining economy. Yes, it is not a simple answer and yes the markets are more global then they have ever been. But at what point do we say stop. Currently our country is suffering and everyone’s money is tied up in a market place in companies and portfolios we do not understand. So everyone (we do to at MFR) diversifies. So at what point do we say stop. Stop the outsourcing, stop the greed, and stop the investments in derivates and other financial models almost no one understands. When do we stop? Our country is looking for an answer to solve the crisis at hand and the only thing our great nation can come up with is to spend. Spend our way out of it. I say we have to be innovative and produce. I do not know what to produce but produce. Then we can find a healthy balance between production and consumption.

Sorry for the rant, let us digress. We have become a nation of consumers so we are trying to develop methods of how to get out of this recession, double dip recession, depression, or whatever you want to name it. The way consumers get out of recession is to consume. The method results in us having to spend money, however, if you are unemployed or just spending money on necessities then consumption almost becomes nil..

What does this mean to you? In our opinion many people have become tight with their money because they are frightened. This is natural; however, holding onto your money does not help the country either. Spending helps your local marketplace. We believe for the individual/consumer they have to look at their situation and decide on what are smart purchases for you and your family. If you have lost your job then buying a 60 inch plasma television is probably not a smart decision. It probably makes more sense to buy groceries or pay the electrical bill. However, if you are comfortable in your state of life then maybe buying the television is the smart decision.

Therefore, paying attention to speculators, news reporters, and other media outlets is not a reliable way to make your life decisions. Listen to whether the market is up or down or whether the housing industry is up or down does not affect your current situation. It may affect your long-term investments and it may have had an impact on your retirement. However, unless you are willing to stand on the pulpit and preach you have to make smart decisions for you and your family.

Back to the original point of this blog post, how does the decline in the month of July affect a current homeowner struggling to pay their mortgage? It may affect their home value, it may decrease their property taxes, and it may cause markets to decline. However, it does not help the homeowner struggling to pay their mortgage on a month-to-month basis. Do not pay attention to the news all the time. It is good to know where the country stand as a whole, but the banks and government aren’t able to help millions of people out there who have lost their job or are losing their home. You have to look out for your best interest. Sometimes it means lawyering up and foreclosing on your home (i.e. deed in lieu of foreclosure) and sometimes it means getting advice for people who want to help you. Lawyers have a firm understanding what is going on in this market. While yes they are taking advantage of the current times and are prospering off of it. It is in their best interest to help you.

To sum up this crazy article, do what is best for you. Do not listen to all the junk out there because it can consume you. Do not be afraid to ask for help from professionals. You are not alone many people are feeling the heat of the recession. Things will not change till we all stand as one and force change. However, until that opportunity is upon us you have to do what is best for you and your family. Remember you can start change tomorrow. Each one of us has to change ourselves before we can expect others to change around us and there are always opportunities to prosper even in hard times. Just keep working hard and stay the course that best fits you.

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Overdraft Fees and Bank of America

October 21st, 2009 • By: wadler Banks, Credit, Unemployment

A class action lawsuit was filed against Bank of America (BoA herein) in the state of California. The case is Closson v. Bank of America and was held in the Superior Court of the State of California in the County of San Francisco.  Our understanding was Closson filed a class action lawsuit based upon unethical business practices by BoA and their associated banks. BoA and their associated banks are going to pay out an estimated $35 million in settlement fees for the accusations of their unethical business practices.

The reader may be asking what BoA did in order to pay $35 million dollars back to their customers. In the midst of this recession BoA and associates were looking for various avenues to increase their annual revenues. BoA succumbed to the pressure of having to show increased earnings by taking advantage of their customers. They designed their overdraft fees associated with an individuals’ account to work in their benefit instead of their customers.

Example: Johnny always pays his bills at the end of the month.  He is paid monthly by electronic transfer at the first of each month.  Johnny assumed he had enough funds to cover his bills at the end of the month and forgot he had only $1,000.00 in the bank due to spending extra money on his vacation last month. Johnny’s bills were as follows: $1,003 mortgage, $200 HOA, $350 cable bill, and $450 water/electric bill. The total for Johnny’s expenses for the month were $2,003. Due to Johnny not checking his bank account he did not realize he was short on available cash.  He paid all four bills at once via check on the same day.

In our example Johnny should have been assessed one fee for insufficient funds, returned check, bounced check, etc. Instead the bank assessed Johnny’s account with four cases of overdraft fees. When BoA released funds to pay for his various bills they paid them in order from greatest-to-least. Therefore, his payments were withdrawn in the following order: $1003, $450, $350, $200.  Thus, BoA caused his account to be overdrawn. However, if the bank ordered his withdrawals from least-to-greatest he would of only had one incident of overdrawn funds instead of four.

BoA took advantage of many of their customers by instituting these business tactics. Therefore, the BoA and associates are paying out $35 million in lieu of settlement for these accusations brought forth in Closson v. Bank of America.

Many customers may be eligible to receive $75.00 dollars or more. From our understanding all submissions had to be done by May 1, 2009. However, the nation reported on this matter in late September 2009 and we just read about it locally in October 2009. We are performing more research on why we are just hearing about it now and why the mass media reported on it five months after the due date of the submissions. Please see a local news channel in North Carolina report on the issue.

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Does It Really Belong To You?

October 3rd, 2009 • By: wadler Uncategorized

The majority of American’s who are in danger of foreclosure or are in currently in foreclosure are incredibly upset with banks. Much of this website is based upon offering our thoughts and understanding of what is going on in the real estate marketplace and helping to give ideas on how to resolve the American’s problem.

Many webpages are dedicated to debating who is at fault for the real estate crash; whether it was banks or Americans. The conclusion of who is to blame is for the reader to decide. However, as Americans we need to move on into the future and correct our and the banks mistakes. No matter how bitter a consumer may be at the banks they need to try to move on with their lives, though this is easier said than done. Many Americans are so disgruntled with banks because they did not show compassion for deceiving the consumer, lying to the homeowner, or the extenuating circumstance the borrower may be in that some homeowners are retaliating against the banks.

Remember banks are a business and they are looking to survive in this economy. Most businesses will show no compassion if it is between their survival or your survival. This is why when a homeowner defaults on their mortgage the banks are foreclosing on their homes. The majority of banks have heard the same hardship story so many times that if your situation does not fall within a legal obligation to them they will put you at the end of the line for help. The banks do not even hesitate to foreclose on homes. This is why it is so important to obtain legal counsel; however, some individuals have taken matters into their own hands.

Some consumers have retaliated by stripping their home of all its accessories and selling them in hopes of recuperating some of their financial loss. While this may feel good for the consumer in the moment it is a federal offense. When the bank forecloses on your home they own the home and everything on the homes property that is attached. Therefore, what these ex-homeowners are doing is a felony. Stripping homes has become so prevalent in Arizona, California, Nevada, and Florida the FBI has created a division just to deal with the matter. The FBI tracks their targets down by pawn shops, Craig’s List, Ebay, etc. Additionally, stripping became so common that it has made national news. Below we show a piece done by NBC where it can be found at www.NBC.com from the Today show. The story was a collaboration by News Anchor Matt Lauer and Report Miguel Almaguer.

Remember even if you are going to lose your home, credit, and current living status it is nothing compared to being thrown in a federal prison and compromising your moral standards. This is why American’s need to rally and fight the good fight in the court system. Find a way to make every crooked banker pay for their mistakes while maintain your own integrity.

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Matt Lauer: We are back at 7:47 AM and this morning on Today’s Money Pits it is a growing crime involving the struggling real estate market. Brazen thieves who are stealing anything of value from a foreclosed property and oftentimes the suspects actually lived in the very homes their targeting. Here’s NBC’s Miguel Almaguer.

Real Estate Agent: We have 3,474 sq. ft…

Miguel: For homebuyers like the Parishes…

Real Estate Agent: They took everything…

Miguel: …buying a property asis can mean going without.

Real Estate Agent: Here we have the sliding doors missing that need to be replaced.

Miguel: Nearly every foreclosure they see requires vision.

Real Estate Agent: And this would be your kitchen island.

Miguel: What makes a house a home unceremoniously ripped out. The properties are just a shell of what they used to be; it is called foreclosure stripping. A problem so rampid in Arizona the FBI is now involved.

FBI Representative: What we are seeing homeowners as they are facing foreclosure doing this umm and the motivation is to recover whatever sort of investment they might have made in the property.

Miguel: With foreclosures up 600% in Phoenix since 2005 stripping has shot through the roof.

FBI Representative: …they tell us that their upset because of…..

Miguel: The FBI says that this property was flooded by the former owner. Many of these crimes are carried out by angry families forced to leave their homes.

FBI Representative: What are you finding on Craig’s List…

Miguel: Federal agents routinely scour the web for fixture sales.

FBI Representative: This is our target…

Miguel: Then arrests former homeowners tried to flip appliances and fixtures that were once theirs and are now bank owned property.

FBI Representative: These are the first of these types of cases that we worked. It is across the board we have seen it from high-end multimillion dollar homes, to the low-end homes, to condos, to townhouses. It runs the gamut.

Miguel: What was also surprising is what’s stolen. Anything bolted down has been ripped away not just appliances and fixtures but door hinges, light switches, and even the rug underneath the suspect’s feet.

FBI Representative: It was bought in 2006 for $280,000 but now because of the damage this house is selling for $69,000.

Miguel: Experts say the big losers here are neighbors. When a foreclosed home was stripped property values for an entire neighborhood can plumb it. Phoenix is a hotbed for stripping and it’s not just a problem in Arizona; California, Nevada, and Florida have all been hit hard.

Potential Buyer: …very nice…

Real Estate Agent: As you know…

Miguel: But the lost can be someone else’s gain.

Potential Buyer: I guess we can put our own stuff in here right.

Miguel: Homebuyers looking for a deal; as federal agents try to track down the steel. Former property owners who take everything; including the kitchen. For Today, Miguel Alvarere, Phoenix.

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A Comprehensive Overview of Your Credit

An individual’s credit is one of the most complicated numbers to determine.  The Fair Issac Corporation keeps how they truly determine an individuals credit score very secretive.  They give an outline on how your score is determined, but they do not give the common man any specifics.  Since Americans do not have a deep insight  on how our credit is determined we may not pay close attention to our credit score.  We used to view our credit on a good or bad scale.  Approximately, three years ago if an individual had “good” credit they could obtain a mortgage, car loan, business loan, and credit cards.  If they had “bad” credit then they could obtain some help from lenders at an increased interest rate.  Nevertheless, as population we knew even with a bad credit score we would we would receive some sort of loan. 

In today’s economic environment what was considered good credit and what was considered bad credit has significantly changed from three years ago.  In the past a person with  a mid-600 credit score could have been classified as having “good” credit and a person with a score below the mid-600s could have been classified as having bad credit.  In the early to mid 2000s lenders were practically giving away money to individuals who should not have qualified for a loan.  These companies were acting fiscally irresponsible.  In 2007 when America had the decline in the real estate market, stock market, and overall economy took a serious decline the lenders did a 180 on lending practices and went to the other-side of the spectrum.  The lenders have now stopped extending credit to a majority of Americans.  It has become increasingly difficult to obtain a loan and it seems that an individual can only obtain a loan at a decent rate if they have an impeccable credit history and a current credit score in the mid to high 700s.  The lenders have gone from essentially approving most individuals to reviewing each applicant in detail.  If there appears to be any reason the lender can decrease the available balance on a person’s credit cards or deny them a loan they will capitalize on the opportunity. 

Today millions upon millions of Americans are endanger of losing their home, car, boat, life savings, child’s tuition, etc. and therefore may be unable to repay their debts to their lenders.  As a result, many of the lenders are not extending loans because they are affraid many of their customers are going to default on their loans.  Due to a combined efforts of frivolous spending by Americans and the irresponsibility of the lenders, obtaining a loan has become virtually impossible for the common American.  Therefore, America is in a catch 22.  A person is unable to receive a loan because they have bad credit, however, they cannot show they are deserving of higher credit because of their inability to obtain a loan. 

Finally, due to our current economy many lenders started to adopt new types of  methods to determine a person’s credit score.  The lenders have also started to utilize different analysis techniques to determine if a customer is a suitable candidate to lend money.  Below we have placed a great video which discusses the different types of credit scores and analyses techniques being used in today’s financial arena.

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Reporter:  Thanks to the economic meltdown improving your credit score has become the latest rage these days.  Did you know that credit scores are getting even more complicated?  Lenders are now starting to look at new specialty scores to make decisions that could affect your financial future. So here to help us stay on top of the numbers here with us is Lynnette Khalfani-Cox founder of themoneycoach.net and the author of Zero Debt. Lynnette welcome to Good Money.

Lynnette:  Thank you.

Reporter:  So before we get into some of to some of the changes that are abreast could you just give us a little recap of what goes into calculating our credit scores?

Lynnette: Sure, first and foremost there is an actual formula that Fair Isaac the company that develops your credit score has told us that impact your credit rating. First and foremost your payment track record 35% percent of your credit score is based on how well you pay your bills. The key first and foremost is to always pay everything you owe month after month. The second biggest component is something called your credit utilization rate.  In essence its how much credit card debt that you are carrying the credit scoring model likes to see you caring as little debt on those credit cards as possible.  That is 30% a credit score. 15% of your credit score based on the length of your credit history. The longer you have had established traditional forms of credit like a student loan, a mortgage, a car loan, a credit card, etc. the better that is for you.  That boosts your credit score.  10% of your credit score is based on the mix of credit in your files.  Again having credit cards, mortgages, student loans if you can show that you can juggle all those forms all those credit responsibly and pay them on time you will actually get brownie points for doing so.  That’s 10% of your score. And the final 10% is based on inquiries or new applications for credit that you are out there seeking.  In general you do not want to be out there applying for a lot of new credit.  An inquiry stays on your credit report for two years and counts against you for 12 months.

Reporter:  All right but now there is some companies that are going to start competing with FICO. Isn’t that right?  So does that mean we will have different credit scores depending on the company?

Lynnette:  Well yes, uuuh, in a nutshell there are new credit scores that are emerging and that are coming on the scene to rival the FICO credit score. One of them is called the Vantage score and it and this is a score that was developed by the big three credit bureaus (TransUnion, Equifax, and Experian).  It actually launched a couple years ago but frankly almost no lenders looked at.  But now the Vantage score has about a 6% adoption rate. Meaning 6% of banks, credit card issuers, and lenders actually look at and use that score. FICO by and large is still the dominant player in this industry. They have a 75% market share so you definitely need to be most concerned about that score.

Reporter:  About FICO.

Lynnette:  But these new players are coming and different types of credit scores are also starting to be analyzed.

Reporter:  Now are you just in the dark of which credit companies your lender is looking to figure out your credit score.

Lynnette:  You can assume that most lenders are looking at the FICO credit score. But what consumers also need to know about are these other what I call secret credit score that most people frankly have never heard of. For example there is something called the industry options score. Which means that specific industries weigh your purchases or spending patterns and behavior in their industry more heavily than they do with others. So let us say you are going for an auto loan. An auto dealer or finance company might care more about how you have paid your car loans in the past then other things. They’re going to look at whether you have been late, whether you have had car repossessions, etc. That kind of thing.

Reporter:  What about an Application Score; what is that?

Lynnette:  An application score tells a company the likelihood you’ll actually apply for an offer that they make. If you’ve got one of those pop-up adds on your computer or you have gotten a credit card in the mail they are saying hmmm is this person likely to apply or respond to a credit card offer we make.

Reporter:  And what about a Retention Risk Score that is another one of these little secret scores right.

Lynnette: Sure, a Retention Risk Score that essentially tells a credit card company, a bank, or a lender how likely are they going to keep you as a customer. Are you likely to just take that low balance transfer off for that initial deal and you know kiss them goodbye later when a better deal comes along or when a competitor sort of woos you. They want to know how loyal is this person going to be.  That is indicated in retention risk score.

Reporter:  I am assuming the Collections Score means how well you pay your bills or…?

Lynnette:  No, actually the collection score will give a lender or a bank an indication how likely you are as a customer to have your account go into collections.

Reporter:  Aaaaahhhh, ok.

Lynnette:  Some of it is modeled even more finally to tell them if you do go into collections are you likely to pay up. You know and of course those numbers get smaller and smaller.  If you have been in collections the chances are you’re having financial problems or the likelihood of you repaying a debt is increasingly smaller.

Reporter:  What about the Payment Projections Score and the Revenue Score? Tell us about these two.

Lynnette:  Sure, those scores in essence….. the Revenue Score is going to tell a bank how profitable a customer is this person going to be for us. Do they charge a lot other credit cards?  Do they go out and pay them off immediately and so hmmmmm we don’t get a lot of interest out of this person?

Reporter:  That is unbelievable because that is sort of a responsible person.

Lynnette: That is what you should be doing absolutely.

Reporter: Yeah yeah.

Lynnette:  They do want to track and see how big of a revenue generator you are going to be for the company. So all these things matter tremendously….

Reporter:  So they want to be responsible but not too responsible.

Lynnette:  Well you know the banks are in business to make money right? And they make money by extending loans and they provide is loans at a certain stated interest rate and that’s their profit.  So at the end of the day yes they want you to pay back but I’m sure they would not mind if you take a little bit of time in doing so.

Reporter:  Lynnette Khalfani-Cox, thank you so much.  And you can get more for of Lynnette’s tips at themoneycoach.net.

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