(Zebulon, NC) The Fall Housing Fair for the Wake County Supportive Housing Program will provide information and services for prospective renters and homeowners.

Time:

10:00 a.m. to 3:00 p.m.

Location:

Get in gear for great housing opportunities! As a public service of the Wake County Supportive Housing Program and the nonprofit organizations that serve Wake County, you can get great tips and leads on housing programs that fit your family’s needs.

Whether you need help qualifying for a mortgage or just getting approved for an apartment, you can get the information you need to work toward approval. Here you may find information on landlords that work with county programs. Vision Credit Education will be providing credit review sessions in conjunction with Fiscal Progress, which can help you obtain your credit scores. Together, we can help you understand how to improve your credit to meet your housing needs.

For more information, contact the Wake County Supportive Housing Program at (919) 231-5957.

Violation of Right to Request Validation

One of the accusations made by the Attorney General is that Anderson, Crenshaw & Associates L.L.P. unlawfully mailed debt collection letters during the initial 30-day period in which debtors are to be able to request validation of the debt. Debt collectors may not pursue collection of debt until after this initial period in which a debtor may dispute the validity of the debt.

Unlawfully Harassing Debtors

At a time when too many Texans are struggling to protect their homes, the defendant’s unlawful letters are threatening debtors with legal action, homestead liens and wage garnishment in violation of the law. — Attorney General Greg Abbott

The problem with these threats is that the firm did not always intend to take such action. Many cases did not meet the firm’s internal criteria for pursuing legal action. According to the Fair Debt Collection Practices Act, a debt collector is prohibited from threatening action that it does not intend to take.

Other forms of abuse mentioned in the charges include the use of profanity and repeated telephone calls intended to harass debtors. The charges are being filed as violations of the Texas Deceptive Trade Practices Act.

Debtors that have been harassed by the defendant or by other debt collectors should contact their state’s Attorney General office to file a complaint. Owing a debt does not mean that you must take the abuse of noncompliant debt collectors.

Suburban Cold War

Remember when the U.S.S.R went bankrupt? They ran out of money trying to keep up with the military might of the U.S.

Now the Cold War has moved to the suburbs. Neighbor is pitted against neighbor, trying to outdo each other in the race to outfit the nicest home, drive the fanciest cars, have the best toys and take the most vacations.

In trying to keep up such an image of success, we are mortgaging our futures. Some of us have begun to earn much more income than before. Perhaps it was a promotion or a new job. Maybe we got married and found that we have more to spend.

In order to create symbols of our success, we buy the biggest home we qualify for, put the furniture on credit and buy higher end automobiles. These are our status symbols. We know that the Joneses are watching. Perhaps we want to fit in, or maybe we are trying to prove our supremacy.

The Joneses Are in Debt Too

If we turn our attention to the Joneses, lets examine what it is that makes us see them as successful. It is their status symbols that give them the image of success, right?

When the Joneses make extravagant purchases, we can assume one of two situations exists. One possibility is that the Joneses are very well off. They could have family money, great investments or much higher income. They could be living well within their means. If that is the case, you might be out of your league trying to compete with their wealth.

The other possibility is becoming more common. The Joneses may be just like you, spending their way to create an image of success. Both of you could be on a collision course with disaster.

If you think this doesn’t happen, try driving through a neighborhood that has multiple foreclosure listings. These homes uses to be occupied with the Joneses and every other family that tried to compete with them.

Many took out bad mortgages that they could not afford. Adjustable rates and other exotic terms made such loans unaffordable in the long run. Others bought more home than they could reasonably afford, and simply fell behind on many of their monthly obligations.

This too could be you. Think about the “stuff” that you have, and consider how much of it you actually own. Do you have substantial home equity or did you cash that out? Are you upside down on your car loans?

If so, you are setting yourself up for financial ruin. What will you do if your engine seizes while you still owe $15,000 on your car? Can you afford to buy another one and make double payments? Or you could simply roll it over into a newer, even worse car loan. Have you done that before?

If you have made financial mistakes, then understand that you are just like everyone else. We have all made them, and we will continue to make more. However, lets try to make smaller financial mistakes while we proactively plan our financial future.

Are you behind on your car payments? Talk to your lender to work out a plan. Are you falling behind on mortgage payments? Speak with a housing counselor. Do you have heavy credit card debt? If so, get debt help from a credit counselor. Whatever your situation, take action today before it gets worse.

Credit Strain

Many cardholders that experience a divorce can tell you that they had trouble making their minimum payments on credit cards and other loans. Often, the money they have to live on does not go far enough to cover these preexisting debts.

The results can include late payments, delinquency fees and default. Many divorcees end up filing for bankruptcy protection because they cannot handle their new financial situation.

As long as the cards are solely in your name, then at least you have some control over your destiny. However, not all credit cards are solely in the name of one spouse.

What if the Card is in Your Spouse’s Name?

If a credit card or loan is in your name, then you need to understand that in the eyes of the law, you are ultimately responsible for repayment of that debt. This fact does not always coincide with the ruling of a divorce judge, since they focus more on splitting assets and debts equally.

If your ex-spouse is in charge of repaying a debt that is in your name, then you are exposed to a serious credit risk. If they are unable or choose not to repay the debt, or even simply make late payments, then your credit can be ruined.

Sometimes the ex-spouse cannot afford the payments. Other times, they fail to honor their financial responsibilities out of spite, knowing that it could affect you in a negative manner.

How to Protect Your Credit

When coming to an agreement over financial responsibilities, find a solution that keeps you in charge of your debts. It may be better to receive cash payments so that you can repay a debt in your name. Otherwise, you cannot always count on the other spouse to make those payments.

If you hold a joint account, talk with the lender about removing your name from the account. As long as your ex-spouse has reasonable credit, your request has a better chance of being granted. If a joint account has a zero balance, then this can be easily granted.

Make sure that your attorney and the judge or mediator understands the importance of being able to control your credit moving forward. Otherwise, the costs of divorce can be far greater than you ever realized.

You could have trouble getting approved for a new apartment or home purchase. That next job opportunity may dissolve due to a poor credit check.

The results can be devastating, and the damage can occur in as little as 1 month. It could take up to 7 years or more to repair the damage done from a messy divorce. Remember that despite what the divorce decree states regarding the repayment of marital debt, you can be sued by a lender for nonpayment of a debt in your name!

Foreclosure Prompts Suicides

On October 23, 2007, a couple in Prineville, Oregon gave up all hope. Raymond and Deanna Donaca died in their home of carbon monoxide poisoning after leaving their Cadillac Eldorado running in the garage. Fumes filled the house, killing the couple and their three dogs.

The couple was facing foreclosure and tried unsuccessfully to save their home. Investigators believe the couple committed suicide, believing that they were out of options.

In July, 2008 a Massachusetts homeowner faxed a suicide note to her mortgage company. Police Chief Raymond O’berg stated that the note advised that “by the time they foreclosed on the house today she’d be dead.”

Bidders that arrived at the home for the 5:00 auction found it surrounded by police cruisers. Inside, Carlene Balderrama lay lifeless, having used her husband’s high-powered rifle to take her life.

Other Debts Create Stress

Pressures from unpaid debt can affect people in different ways. In addition to mortgage problems, there are other types of debt that have similarly driven some people to extreme measures.

On July 29, 2008, 62 year old Emilio Saladriagas walked into the Rent-A-Center store in Bloomfield, New Jersey. The man set himself on fire in the lobby of the store in front of frightened customers and employees. It is believed that the sheer volume of late payment notices and collection calls promted him to commit the act.

Financial difficulties, along with infidelity are the 2 biggest reasons for marriage failure in this country. The stresses of collection efforts can put pressure on individuals, spouses, children and their employers.

Even churches and nonprofit organizations feel the impact, since they are usually the most effective outlet for financially distressed consumers. Still, these providers find that far too many debtors delay getting the help they need until it is too late.

If you find yourself in a bind, and are looking for an outlet, suicide is not the way to go. There are a number of charities that are available to help you get back on your feet. Even if you feel you have no options, your situation and future may still be much better than you realize. Get the help you need today.

What this Means

In case you are reaching for a calculator, that’s 8 years just to pay off a new car loan. Imagine what you will be doing in 8 years. How old will you be? Will you be driving your car or pushing it? Will you have children? Will your children have children?

Lenders and finance managers claim that new cars last longer, and that it makes sense to spread out the payments across the useful life of the vehicle. They see it as a way to let you get more car today than you might otherwise be able to afford. However, not all new cars are the same, and some will undoubtedly fall apart far sooner than that.

Upside Down

If you have ever been upside down in a car loan, you know that there are only 3 choices:

1. Keep making the payments, even if you can no longer drive the car.
2. Face a repossession.
3. Roll the debt over into a new, even worse car loan.

What you are creating for yourself with a 96 month loan is a guaranteed negative equity situation. This means that you are stuck with that car, and you cannot sell it without somehow paying off the rest of the loan balance. Do you really intend to keep that car, and be able to drive it for the next 8 years?

The best approaches you can take to financing your next vehicle include:

1. Buy within your means. What good is driving a fancy car if everyone knows you flip burgers for a living? They all know you are overspending.
2. Limit financing terms to a max of 5 years (60 months) on a new car, and never more than 4 years (48 months) for a used car.
3. Refuse high interest rate loans. That finance manager gets a kickback if you pay more than you have to. You can arrange your own financing through a credit union with lower interest and less down payment than most big banks require.
4. Drive that old clunker a few more months. Saving money for a down payment can reduce your car payments, loan term and even your interest rate in some cases.

Most importantly, refuse to accept a 96 month loan for any vehicle. Otherwise, you might pay for a Lexus while driving a Corolla!

Examine your Situation

Having 1 or 2 old debts that you haven’t paid on in at least a year or more might make debt settlement more attractive. So what exactly is debt settlement?

Debt settlement is the act of negotiating a lower, lump sum payoff with a creditor. It is useful for reducing what you owe while closing old accounts.

It is not useful for dealing with several accounts in which you do not have money saved to make large payments. Payment plans are not available with debt settlement, and debt settlement companies that offer such “payment plans” do little more than take what little money you have each month and leave you vulnerable to judgments. Some debt settlement companies have revealed to regulators that their success rates are as low as 2%.

Even if you successfully settle a debt, it will still show up as a black eye on your credit. Your credit report will reflect that you settled for less than the full amount owed, that is, unless you can also negotiate a pay for deletion agreement!

How is Debt Management Different?

Debt management is an actual program in which creditors may offer benefits to enrollees in order to reduce the risk of default. Debt management programs may be able to provide you with a lower monthly payment while still paying your debts off faster.

They do this through lower interest rates on your existing credit card accounts. Participating lenders will, at their discretion agree to lower your interest rates for as long as you stay active on the program. Even though you may be paying less each month, a greater portion of your payments is still applied toward principal rather than finance charges, which helps you eliminate your debts sooner.

Finding Help

If you need help, then consider meeting with a nonprofit credit counseling organization. A for-profit debt management company may provide a good debt management program, but they usually fall short on counseling. In fact, their job is to sell you on enrolling, whether you need such a plan or not.

A nonprofit credit counseling organization can help you evaluate your situation, determine your needs and offer suggestions about options for improvement. If you need to enroll in a debt management program, they can help. Similarly, you might just find that a fresh approach can help you repay your debts on your own.

If Vision Credit Education serves your location, feel free to contact us for a free counseling session. If not, you can still find an agency near you affiliated with the NFCC.

What Are Yield Spread Premiums?

Yield spread premiums refer to kickbacks paid by lenders to mortgage brokers as an incentive to steer consumers into higher interest rate loans than what they otherwise qualify for. In other words, a broker could get thousands of dollars in extra commissions by convincing a buyer to sign for a 10% loan rate when they actually qualify for a 7% loan rate.

The buyer is stuck with a loan that costs them tens of thousands of dollars in extra interest. Addtitionally, the monthly payments could be hundreds of dollars more than the buyer should be paying.

Mortgage brokers must disclose yield spread premiums in the loan documentation. However, most brokers gloss over this material when explaining the paperwork to homebuyers.

HB 2188

HB 2188 outlaws the payment of yield spread premiums by lenders to mortgage brokers on subprime mortgages in North Carolina. This takes away the financial incentive for brokers to steer borrowers into higher interest loans than they qualify for.

The result is that homebuyers that do not educate themselves enough to demand a better rate can still have some protection from greedy mortgage brokers. Homeowners that close on their mortgages prior to October 1, 2008 do not receive protection under this bill.

For NC homeowners that are facing foreclosure, they have new protections established by HB 2463. This bill is designed to help homeowners that were placed into predatory loan products.

It is a fact that your credit scores cannot increase from closing credit accounts. In fact, your scores will likely drop.

This is especially true if you have debt balances on other credit card accounts. Your higher resulting credit utilization rate will cause your credit scores to drop.

Why Do Lenders Sometimes Ask for Account Closures?

Lenders may sometimes ask you to close one or more active credit accounts if they are uncomfortable with the amount of available credit that you have. They may simply feel that you would be unable to afford your mortgage payments if you decided to max out your credit cards.

Your lender may indeed ask you to close one or more credit accounts if you fit this example. Understand that your credit score will drop slightly when you do this. That being said, you should wait until the lender makes this request, since it could take up to 30 days before your credit scores adjust for the account closures.

There is simply no advantage to closing open credit accounts unless it is a requirement for mortgage approval. Otherwise, you risk lowering your credit score and reducing your ability to expand your credit history.

Even Fair Isaac acknowledges that closing open credit accounts never helps your credit scores and could likely lower them. Fair Isaac is the developer of credit scoring products that the main credit bureaus subscribe to.

If your primary concern about keeping an account open is that you might be tempted to make charges on the account, then you have a more important concern. In that case, the best option is normally to cut up the card and keep the account open. If you are really unsure of your ability to constrain spending, then closing the account is better than maxing it our or missing payments on future balances!

Citibank has quietly made the change which will apply to new balances over $20. It is unclear whether this change applies to all cardholders or to a select group of customers.

This is the change according to Citibank:

Your Minimum Amount Due on any New Balance over $20 will no longer include the total amount of your transaction fees. These fees include balance transfer, cash advance, and other foreign purchase fees. Remember, you can pay these fees (and any other amounts owed on your account) at any time.

This is a boost to cardholders that may be using their cards for a major transaction that incurs fees. Some of these transaction fees can add up to a one-time charge of hundreds of dollars, depending on the size of the transaction.

Adding these fees to the minimum required payment for the following month can make it hard for cash-strapped cardholders to afford. Even if they are saving money on an attractive balance transfer offer, failing to pay the full minimum payment for one month can negate the rate offer and may cause a rate hike that affects all balances on the card.

Not all credit card issuers have followed Citi’s example. Additionally, it is still not clear if this change applies to all Citibank cardholders, since no public announcement has been issued by Citibank.