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Moving to new server

Update 12/9/12:  The client forum was successfully moved today and I’m looking forward to getting some “real” work done!

UPDATE:  I switched the client forum back to my old host because apparently there is nobody qualified to properly set up a domain with a secure certificate on the weekend at my new host.

Clients should be able to access their private forum within a couple of hours and I’ll try this again next week.

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I’m sorry for the downtime here, had no idea it would take a week to get all site features and links working properly.

Last night I moved the site with the private client forums and we’re also having problems there.  Please email me directly if you need immediate assistance and I will update here once the client forums are functioning again.

I’m sorry for the inconvenience!

Mortgage credit report: Nice FICO scores with chargeoffs and Asset Acceptance collection

The most recent collection (Asset Acceptance) was assigned in 7/10 and it IS rated despite the dispute notation.  My client just received his new mortgage credit report:

EQUIFAX/FACTA BEACON 5.0
SCORE: 678

00038 – SERIOUS DELINQUENCY, AND DEROGATORY PUBLIC RECORD OR COLLECTION FILED
00018 – NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 – LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00010 – PROPORTION OF BALANCES TO CREDIT LIMITS IS TOO HIGH ON BANK REVOLVING OR OTHER REVOLVING
ACCOUNTS
FA – NUMBER OF INQUIRIES ADVERSELY AFFECTED THE SCORE, BUT NOT SIGNIFICANTLY

Read More »

Credit scores after bankruptcy with a mortgage “included in bankruptcy” and with a balance

I just saw a very interesting post by bankruptcy attorney L. Jed Berliner, Springfield, MA.  Apparently his client continued to pay the mortgage after a Ch. 7, but 4 years later she was declined by her credit union for a loan to pay for a new roof because she had not re-established credit.

Read More »

Complaint to NM AG: debt buyer interest charges while account NOT owned

Like so many debt buyers, Asset Acceptance ignored the dispute and it charges outrageous interest without providing any documentation allowing it to charge interest.

My client’s complaint and my declaration submitted to the New Mexico attorney general.

I have never seen Citi or Chase charge interest after an account was charged off.  Yet, debt buyers routinely file lawsuits demanding interest from the date the account was charged off and while they did NOT own the accounts.  In this case Asset is collecting a Citi account and its compliance department advised me that my client’s ONLY right is to pay the account.

Here is a screenshot of another client’s Citi chargeoff: Read More »

The new Experian payment history legend, Verizon bizarre reporting and Experian incorrect verification

A client disputed this PAID Verizon account TWICE with Experian and it is STILL reported OBVIOUSLY incorrect as “$653 written off”:

Experian reports: Read More »

Capital One purchased HSBC (Orchard) – will they continue to offer BOTH cards?

A  client who needed to re-establish credit just received his new Orchard and Capital One cards with $300 limits.

[Added 9/2/11:  Another client who filed for Ch. 7 bankruptcy 6 months ago was approved for a $500 Orchard card, Purchases APR 14.90%, annual fee $19.   Capital One did NOT have anything for him and there’s no Cap One charge-off on his credit.]

Even people with HSBC and Capital One sold chargeoffs have been approved for the cards and you can get PREQUALIFIED without a hard inquiry, so there is no reason not to give it a try.

Since Capital One recently purchased the HSBC card portfolio, they may soon only approve ONE of the accounts.  So if you want to re-establish credit, you may want to act now.

Orchard card options

Capital One

Make sure they PREQUALIFY you without lowering your score.  Do NOT apply for a prime card unless you have good credit.  A hard inquiry can lower your FICO score 10 – 15 points if your scores are below 680 or so.  It’s best to opt in for pre-qualified offers and minimize hard inquiries.

WARNING:  I could write books about the horrible Capital One and HSBC business practices, but considering the alternatives, these cards are ok for people with bad credit.   No monthly fees, acceptance fees and other garbage as with First Premier and other subprime cards.

You have  ANNUAL fees and the interest rates (below 20%) are very comparable with many prime cards. The main difference is that your limit is so low.

You should NOT be carrying a balance.   Use it, pay it off in full every month and for maximum FICO scores, make sure one card has a $1 balance on the statement date and that all other revolving accounts have zero balances on their statement dates.  It’s SO easy to manipulate FICO scores by paying just a little early.

The banks make their profits on FEES.

Late fees and over limit fees are a huge percentage of the subprime lenders’ profits.

Do NOT apply if you aren’t sure that you can make at least the minimum payments on time.

$200 debts quickly turn into $600 chargeoffs and a couple years later you owe $1,200 due to interest.  And they can and likely will hound you with almost daily collection calls until the accounts are charged off.

SECURED CARDS: Orchard also offers a secured low interest card.  But WHY pay low interest if you could pay NO interest because you can use the deposit to pay your balance in full?

If you need a higher limit for business, using a bank or PayPal debit card with the Visa / MC symbol often works just as well.

And be aware that secured accounts often can NOT be converted to unsecured accounts and you will LOWER your FICO scores if you have to open new unsecured accounts in a few years.

Please send me the link to any other cards suitable to re-establish credit.

4.25% 30-year fixed rate FHA mortgage with several UNPAID collections

A client in WA closed last week with two reported UNPAID collections for about $15,000. Additionally, his most recently tax lien (now released) was just filed last December and he had several settled collections and judgments.  I’m so happy we didn’t have to settle with LVNV.

Wife’s FICO scores were around 800 with obviously perfect credit, his scores on the mortgage report were 656, 669 and 668 (when we started his TU was 502 and Equifax 623.)

Excellent income, $150k/year salaried.

FHA, 4.25% 30 yr fixed.

I’ve occasionally seen mortgage approvals with old and SMALL unpaid collections, but this is the first time I’ve seen a purchase close with large unpaid collections and recent derogs such as the tax lien.

What happened to underwriting guidelines requiring that ALL collections have to show paid and that you can’t have ANY derogs in the last 2 years?  Were the wife’s perfect credit and the high income compensating factors?  Are we finally back to COMMON SENSE underwriting?

If there are any brokers/lenders closing these types of loans in California and other states, please contact me.

Part 1: Trans Union FICO score 738 with two charge-offs

The client’s credit reports contained only 4 accounts:

A positive student loan, two charge-offs with $0 balances and a Palisades collection.

Due to the low number of accounts, it is easy to document how FICO scores rate accounts.  Tradelines reported by creditors as disputed are NOT rated as derogatory, but DO count for the so important account history.   In part 2 I will document that Equifax FICO scores STILL contain entirely fictitious late payments —  myFICO (formerly Fair Isaac) IGNORED my 2/26/07 notice:

Open Letter to Fair Isaac Regarding its Addition of FICTITIOUS Derogatory Data to Credit Reports and Sale of Defective myFICO Reports

More on the myFICO fictitious lates in my next post and for now we’ll focus on the GOOD news, the client’s 738 Trans Union FICO score after Palisades deleted from her reports.

Palisades had filed suit and its attorney notified the client that she would be served.  That’s when she contacted me and she then submitted her FACTUAL disputes to Palisades and to its attorney.  Palisades deleted from all credit reports shortly after receiving the dispute.  It’s been several months now and she has not been served yet.

So she now has 3 accounts on her credit reports, the two charge-offs and one paid as agreed student loan. 

The myFICO Trans Union score factors:

Trans Union

Top Negative Factors

There is no recent activity on your revolving accounts.

Your credit report shows no open revolving accounts [?] or it does not report recent information (such as balance or credit limit) about any of your revolving accounts. Your FICO score evaluates your mix of credit cards, installment loans and mortgages. People who demonstrate responsible use of different types of credit are generally less risky to lenders.

What to do about this: You might want to show new activity on any credit card. If you already have a credit card, you can do this by using it and paying it back on time. If you don’t have a credit card, consider opening one. However, be aware that the credit inquiry associated with applying for a new card may lower your FICO score in the short term.

— They forgot to mention that opening a new account will likely also lower the scores because the account is NEW and it will lower the average account history. However, there’s no way around that (aside from becoming an authorized user or joint account holder on an account with good history) and hopefully she’ll soon get pre-approved credit card offers as she recently opted in.

The balances on your non-mortgage credit accounts are too high.

Total amount you owe on all non-mortgage accounts $9545

— The student loan and a “non problem” as the score is fine.

Top Positive Factors

You have no missed payments on your credit accounts.

Number of your accounts with a missed payment 0 accounts

— We have two charge-offs, but they are NOT rated as derogatory because they are reported as disputed by the CREDITORS.

HOWEVER, when applying for a mortgage, the dispute notations may have to be removed due to FNMA requirements and the score will be much lower.

You’ve limited the use of your available credit.

Ratio of your revolving balances to your credit limits Unknown

— This is odd.

You have an established credit history.

Your oldest account was opened 7 Years, 10 Months ago
Average age of your accounts 6 years.

— The charge-offs noted as disputed by the creditors are NOT rated as derogatory, but they ARE rated for the account history (similar to AU accounts). The only positive account was opened in 2/05 and that’s how we know that the charge-offs ARE rated for account history

Two charge-offs, only one positive account and a 738 TU FICO due to the creditors’ dispute notations:


These notations have NOTHING to do with credit bureau investigations after consumers disputed, but they are reported by the CREDITORS, usually after receiving disputes from a credit bureau or from consumers directly.  They usually update or verify the accounts, but presumably report with this dispute notation to avoid liability for incorrect credit reporting.  I see this notation most often on Citi accounts, followed by Chase and Wells Fargo.

The dispute notations are often reported for YEARS.  

Due to FNMA and other agencies’ requirements, lenders now often require the deletion of dispute notations for obvious reasons:

The resulting FICO scores have nothing to do with reality.  Of course FICO scores often have little to do with reality, as you’ll see in my next post about the late payments CREATED by myFICO.

If you have dispute notations on your report and their removal would lower FICO scores, you need to find out the current rules / procedures regarding the disputed accounts for your mortgage.  If they require that the dispute notation has to be deleted (very likely with such an artificially high score), you should have the dispute notation removed BEFORE applying to avoid being declined or receiving a higher rate at the last minute.

How to get the dispute notation deleted:

If you have TIME, start with a simple dispute to the credit bureau:

[Creditor] account # …:  Please remove the description “account information disputed by consumer.”   This is incorrect because I am NOT disputing this account.  Please delete this description as it prevents me from obtaining  a mortgage.

If they don’t remove the dispute notation, you can call or write to the creditor directly.  Of course RECORD all calls if your mortgage is important.

If the removal of the dispute notice is a lender’s loan condition, you should contact the credit bureaus AND the creditor immediately by phone AND in writing.

How to get the dispute notation ADDED to an account:

Submit a LEGITIMATE dispute to the credit bureaus and/or creditor.   If you falsely claim that it is not your account, you might have trouble getting a mortgage later as they often ask what was disputed.  There is NO reason why a creditor couldn’t give the exact copy of your dispute to the lender.  Lenders already contact creditors about payment histories for mortgages and they could simply request copies of your disputes from any creditor.

Frivolous disputes are not going to help you get your mortgage approved!

However, it is perfectly ok to dispute an incorrect balance or any other incorrect or incomplete data.

OTHER credit scores such as the scores provided by credit bureaus to lenders and the FAKE scores (no lenders use them) sold to consumers directly use different formulas and might well be 100 points lower  because they rate the disputed accounts.  That’s why it’s SO important to get the myFICO reports when you’re looking for a mortgage.

I’m NOT trying to create business for myFICO and their increase to $20 per report is truly outrageous, but you can start with the free trial for the Equifax score monitoring and you can use up to 30% discount codes for their products.

NEXT:  Part 2, the fictitious late payments created by myFICO.

Quicken Loans’ refusal to provide mortgage rate for 730 FICO score

A client is currently refinancing and they have PERFECT credit (as defined by rational people):

No lates, no collections, no judgments or liens, nothing whatsoever that could be considered derogatory.

However, they have a lot of debt (helping out their kids, times are tough) and unfortunately I didn’t know that they needed to get a 740 middle FICO score to get the lowest rate.  They were only 5 points short at 735 and their loan officer recommended paying down some accounts and running the credit again.   The FICO score actually DROPPED 5 points – quite likely due to the first mortgage credit inquiry over 30 days earlier.

So yesterday my client contacted me and I sure wish I’d had the opportunity to work with her on the scores right away.  Now the loan officer is pressuring them to lock the rate and close – at the  higher  rate.

Despite several emails, the loan officer refused to provide today’s rate for a 740 FICO.  We need to know whether it’s worth the time and expense to work on the scores.  If the difference is only 1/8% in the rate, it might be best to lock at the higher rate and get it over with.

It only takes a few seconds for a loan agent to quote different rates and I recently explained how to read a wholesale rate sheet and I posted a rate sheet.

So I searched for current rates and I ended up at Quicken Loans.

Christine McIntyre REFUSED to provide the rate for a 730 FICO score!

They require your INFORMATION, no doubt to waste your time, to market you and to sell your information if you don’t get a loan from them.  Mortgage leads sell for BIG bucks. Some brokers and all sorts of criminals pay over $100 for addresses and phone #s.  That’s why everybody wants to give you quotes AFTER you gave them your info.

When I brokered mortgages, I freely handed out entire wholesale rate sheets, I had nothing to hide and I did not sell any information.

Here’s the transcript of my Quicken Loans chat:

Read More »

NCO utility collection after move lowers FICO scores by over 100 points

My client moved last year, didn’t get a bill and all of a sudden there’s this NCO collection on his credit.  He panicked and immediately paid the utility company. THEN he found my websites and I just drafted the disputes for him.

NCO reports only to Experian and Trans Union, so his Equifax report is “perfect”.

The Equifax score is 781:

Read More »

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