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So many good people experience times in their lives where they face financial adversity. The 2008 recession in particular impacted millions of people. Throughout the course of my career I’ve had to set many people straight on the topic of old debt that I thought I would blog on the topic in hopes to help more people understand their rights and how to make educated decisions.
Step 1: Obtain your credit report. You can do this for free once per year simply by going to www.annualcreditreport.com
Here you will have what is on the three big credit bureau’s: Equifax, Transunion and Experian.
Go thru your entire report with a highlighter and highlight anything derogatory and all “old debt” items you see. Now, you may be surprised on some of the dates you see. For example, let’s say you had a credit card debt of $10,000 dating back to 2008 and the credit card company turned your account off in 2009 and began their collection process. Now you see that same “old debt” but the date says it’s a debt where they stared collections in 2013. How can that be right? Read on.
Step 2: Find your state’s Statute of Limitations. In short, what this means is how long your creditors have to collect on your debt. So go back to the $10,000 credit card debt from 2009. If your state has a statute of limitations of 6 years, they can only go after you until 2015. But now it’s 2017 and you’re still getting collection calls and/or threatening letters in the mail. So many people ask me, “how can they just adjust the date beyond the statute of limitations”? The answer is they can’t, but in the next point I’ll explain what happens.
Step 3: Find out if a law office or attorney bought your debt! It doesn’t have to be a law firm; in fact, many of these companies are nothing more than sales organizations/credit collection companies that simply try to scare people into paying on a debt the original company sold off to them! These are companies that use in many cases, very aggressive, somewhat shady business practices to scare the lights out of you in an effort to collect. They purchased your debt for pennies on the dollar and set up very aggressive campaigns to frighten you into one of a few things: 1. Admitting you owe the debt. When you do this, they “re-age” or what’s called “park” your debt. This is a big reason people see old debt “within the statute of limitations….again…and again…and again”. An illegal practice, especially when the creditor did not notify you in writing that they intend on re-aging your old debt. 2. Say or may any notion that you intend on paying. This can take you backwards and resurface even the oldest of debts. The easiest way to handle these people is to “hang up” on them.
Should you find yourself fighting an old debt, here is my recommendation:
- Do research on the company coming after you. Are they really a legit law firm or posturing themselves as such?
- Write back to them within 35 days of their initial contact. Request verification of the debt. They legally must show proof that you owe them, proof of the actual sum and proof that they are entitled to collect.
- If they are harassing your cell phone, home phone or mailbox, write them a letter to cease all communications with you. They must comply with the Fair Debt Collection Practices Act.
- Dispute any “re-aged” actions you see on your credit report directly with them; and not acknowledging in your letter that you owe the money.
- If you don’t see the date removed on your credit report, you can write directly to the three main credit bureaus directly. They legally must remove it if they do not written confirmation.
Over the years, so many people in these situations simply are not educated on their rights as a consumer. As a result, “old debt” prevents many people from moving forward with their plans to get a mortgage and own the home they wish to live in.
If you need help or advice on this matter, I would be happy to help. Thanks for taking the time to read my blog.
The information on this website is designed to inform and educate only. The views and opinions expressed herein are simply those of the author and do not reflect the policy of my company.
Inflation is a key indicator for where mortgage rates are headed. In simple terms, when prices of goods and services go up, investors of mortgage backed securities lose return. That is why when prices rise, so too do interest rates. The last report on inflation saw a slight drop; from 1.8% to 1.4% from January to May. With three jumps in interest rates this year, many projected a steady increase, but recently mortgage rates dropped slightly. While I’m not a prognosticator of interest rates, all signs from here to about December 2017 look like they will remain very low, perhaps even a slight decrease. That is good news for borrowers; especially the huge number of millennials that are taking advantage of low down payment mortgages and looser credit guidelines.
Inventory is getting better. After three consecutive months, pending home sales reversed course in June in all major regions of the United States with the exception of the Midwest. Almost all regions saw an increase in contract activity according to the National Association of Realtors®.
How about some more good news? As I’m writing this blog the Dow Jones Industrial average hit a record high, approaching the 22,000 mark; powered largely by Goldman Sachs, JP Morgan Chase and a few others.
The economy certainly is showing signs of legitimate growth built on the right foundation. Unemployment numbers SHOULD be next to improve and if and when that happens, we should see a solid run of economic prosperity.
If you are considering a real estate purchase or are considering getting a mortgage, now is a very good time to act. You have to simply balance the prices of real estate and interest; but when you look at an amortization schedule you quickly place the value of low interest rates over slightly higher real estate prices. Please let me know if I can help you in any way or if you simply have any questions you need answers to.
Millennials are ready to purchase homes finally; after 10 years of declining numbers according to a University of Southern California study. This is fantastic news for the housing market and fantastic news for millennials as they shift from renting to owning. A certain shift from 2014 when Pew research reported that for the first time in 130 years, individuals between the ages of 25-44 were more likely to be living with their parents vs. owning a home.
One of the stunning statistics I came across reading a Bank of America study was total lack of understanding of what is actually available to millennials; their perceptions of what it took to own a home was incredible; here’s what it showed:
-30% of millennials believed they need 20% down to get a mortgage
-31% believed they needed 10% down
-Only 5% believed they needed 5%
-6% were simply unsure
That represents 72% of all millennials! Yet most millennials that do in fact obtain a mortgage pay around 3%!
Until recent times, the factors that contributed to both the realities as well as poor perceptions of one’s ability to own a home were:
- Increase in Debt
- Unemployment rate
- Increase in rental costs leading to decrease in ability to save for a down payment
- Credit requirements after the mortgage meltdown
- Lower inventory of starter homes
- Getting married later- lack of dual incomes to go on mortgage
As I wrote in a prior blog, times are changing for the good. It’s amazing what a positive outlook does for politicians, investors/Wallstreet, business owners and of course, the stock market. Low down and no down payment mortgages are truly helping millennials obtain their goals
My advice to the millennials is simple: roll up your sleeves, get with someone that truly knows what they are talking about and define your point “A”. Meaning, if you want to own a home, don’t be embarrassed about anything: what your bank account says, what your credit score is or what limitations you think you might have. It’s important to get it all out on paper; some may find themselves in their own home right away, some very soon and for the rest, they are left with a clear path to point “B”, an exact game plan.
Next week I will reviewing interest rates and inventory; thanks for reading!
Sale of Equitable Interests in Real Estate Clarified
Governor Abbott Has Signed SB 2212
SB 2212 amends Chapter 1101 to codify the clarifying changes to TREC rules regarding sale of certain equitable interests in real property.
Just like the rule, this statutory change clarifies that a person selling or offering to sell an option or assigning an interest in a contract to purchase real property must accurately disclose to potential buyers the nature of the interest offered. If a person offers a property for sale when the person does not own the property, that person is engaged in brokerage and must be licensed to do so. This is the current law.
If a person offers to sell an option or assign an interest in a contract on a property, the person must accurately describe the interest being offered. The same requirement for accuracy is added in the Property Code. The practice of “wholesaling” remains legal if these “truth in advertising” rules are adhered to.
If your are a UN-Licensed wholesaler you are breaking the law and have been with every assignment or contract you have sold, look out you could easily be liable for any past transactions! If you have not found an expert REAL ESTATE BROKER who understands this and can help you stay in business you can call E-Team Austin Realty Today! 512-554-8554. If you are about to or thinking of buying from a wholesaler STOP! It is imperative you call us before you find yourself on the hook for a home without the proper disclosures and notices. Call and ask for Michael @ 512-554-8554