According to a report released today, foreclosures for 2008 spiked to a whopping 81%. Not to mention being up 225% compared with 2006. The 2008 total foreclosure filings totaled more than 3.1 million. Yes, that’s million. Which means that one out of every 54 households received a notice last year. Think of all the for sale and foreclosure signs in your neighborhood alone. 

This has to make you wonder, what happened with the government intervening in an effort to quell these foreclosures? Foreclosures were actually up 17% in December of 2008 versus November. These scary numbers are not likely to improve anytime soon. 

Good news?

There is a lot of supply out there if you are ready to own a home or are looking to purchase a home. Few things to note. Lenders are extremely cautious today and will not lend to folks with low credit scores. So if you want to take advantage of all of the inventory on the market today, then the first step is to pull your credit report and review the report for accuracy. If it’s not and you have unverifiable negative items on your reports, then work quickly to remove them. It is your legal right to dispute negative items on your credit reports that are unverifiable. 

To learn more about the foreclosure rate in 2008, read this special foreclosure report.

The National Bureau of Economic Research said today that the U.S. has been in a recession since December of 2007. They said that the massive decline in jobs in 2008 was one of the key reasons they decided to state why the recession started last year. They estimated that employers have cut jobs by 1.2 million. 

In a statement, White House Deputy Press Secretary Tony Fratto said that even though the recession is now official, it is more important to focus on the steps being taken to fix the economy.

“The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus,” he said. “Addressing these areas will do the most right now to return the economy to growth and job creation.”

So, if you are in need of an economic stimulus package, look into credit repairing your credit. It’s one of the biggest factors lenders look at when determining your risk. Your credit score will also determine your loan rate. The lower the score, the higher the interest rate. You may be able to save hundreds of dollars a month by avoiding high interest rates on your credit cards, auto loans, and home loans. 

To read more, visit: 

http://money.cnn.com/2008/12/01/news/economy/recession/index.htm?postversion=2008120112

Question

hi well ihave three credit cards and i pay on time never late and I also have a mortage and i always pay ontime never late but my credit score stays below 600 no matter what i do it never seems to up

Lisa D.

Answer

Lisa

Congrats on paying your bills on time.  This is very important for maintaining and building positive credit.

There are other factors that go into calculating your credit score.  Here a few things to check…

1) Monitor your credit.  Make sure you or no one else is pulling your credit too often.  Inquiries can lower your credit score.

2) Make sure everything on your report is accurate.  If it is not, dispute these items with each of the credit bureaus.

3) Make sure you have available credit showing on your accounts.  Having your accounts “maxed out” with lower your score.

4) Make sure that if you have old accounts on there, they are paid off.  An old collection or judgment could bring down your score.

Check on these 4 things and keep maintaining positive credit.  Your score should continue to go up over time.

Thanks

Candice

Question

I just found out my husband has bad credit and a lot of debt in his past.  The collections bills are now starting to roll in and we just had a debt collector come to our door the other night for 8000.00.  What are my options?

Blake H.

Answer

Blake

Sorry to hear about this but this is a common problem in marriages; spouses bringing in old credit history into the new marriage.  It is very important for you both to sit down, talk about your combined financial picture and work out a plan together.  Above all, keep communicating to each other!

As far as the debts go, you have a few options…

1)      Debt Acceleration.  If you get on a spending plan together, you may see you have extra money coming in each month.  If you do, start applying this extra monthly month to one of these bills.  Once you have paid off one, apply all the money that was going to the now paid off account and apply it to the next bill.  You can continue to do this until all your bills are paid off.

2)      Family and Friends.  It is getting more common now to borrow from family and friends.  If this option is available, make it official.  Sign a note with them that clearly spells out the repayment terms and the interest rate and by all means pay them back on time!

3)      Credit Counseling.  There are non-profit companies out there that can renegotiate the payment terms with your creditors.  They will draft your account once a month and handle all of the re-payment process.

4)      Debt Settlement.  There are agencies out there that can negotiate a settlement for less than full balance of what you owe.  This could be a good way to save money on some old debts.

5)      Bankruptcy.  If all else does not work, bankruptcy may be an alternative.  You would have to meet with an attorney in your state and discuss whether a Chapter 7 or a Chapter 13 would help in your situation.

Blake, if you would like to have a free referral to a debt specialist, give us a call @ 800-445-8540 and we can match you to a reputable partner.

Good luck.

Candice

Question

how much does it cost a month to pay a credit counselor to dispute my accounts on my credit report

 James T.

Answer

James

The cost of credit repair services varies from company to company.  They range from $39 - $120 a month.  It is important to know that according to the Credit Repair Organizations Act which regulates companies that provide credit repair services, it is unlawful to collect fees BEFORE performing the work.

With the down turn in the economy, there are more and more credit repair “shops” popping up to provide these services.

Creditrepair.com will provide you with a free referral to the most reputable credit repair company based on your individual situation.  Give us a call @ 800-445-8540.

Thanks

Candice

Mortgage rates were impacted by the news that the government would take over Freddie Mac and Fannie Mae. According to Bankrate.com, a 30-year fixed mortgage dropped from 6.55% to 6.2% when the market opened on Monday September 8^th.

Read more in Marketwatch, Mortgage rates fall on Fannie, Freddie Rescue.

Jerry Howard, chief executive of the National Association of Home Builders, in an interview Monday said the government action was “a very important first step” that will help ease mortgage rates and restore confidence in the debt of Fannie and Freddie. The government bailout was aimed at lowering mortgage rates and assuring that home loans would be available to consumers. This is good news for consumers looking to buy a home. There are currently more homes on the market, and low rates. It is the perfect time to take advantage of a buyer’s market.

If you are considering a home purchase, it is important that you qualify for the lowest rates available. You can do this by taking control of your credit rating. Credit Report Repair services are just another way of optimizing your position and taking advantage of the current mortgage market.

Find out your options with a free phone consultation.

Question

I am overwhelmed in credit card debt and would like to try the debt settlement.  A company called Zwicker and Associates has already taken over my Discover card.  What can they do to me?  Is debt settlement a good idea?

Julianna H.

Answer

Julianna-

Debt settlement is usually a good program for old unpaid collections, charge offs, judgments or tax liens.

Usually, in the cases I just listed, you can get a 40 to 60% reduction in the balance that you owe.

There a few pitfalls to be aware off.

1)      The remaining balance that you do not pay on your settlement may be considered income by the IRS and is taxable as ordinary income.

2)      Your credit report will be updated as a “settlement for less than full balance” which can be a red flag for future creditors that you may apply for new credit with.

3)      Lastly, some settlement companies will take monthly payments from you until you have enough to equal the settlement amount.  Be aware that these monthly payments are going to the settlement company and not your creditors.  This means that the creditors still have the right to attempt to collect the debt including garnishing your wages, getting a judgment or seizing your assets.

Let us know if we can be of any assistance finding a reputable partner for you.

Candice

A lot of what we’ve been hearing the past year is that lending standards have become tough. That you have to have a good credit score to get a loan due to the subprime mortgage crisis. Yet now the failure of prime mortgages is going to make it even harder for first time homebuyers to get into a home. Lenders are now even scrutinizing prime borrowers, those who already have a good credit score. It is vital that your credit score be immaculate before you apply for a home loan. Lenders are being more and more conservative with their loans. If you’re looking to get into a home in the future, maybe it’s time to start the credit improvement process now. You can either do it yourself by learning how to write a reputable dispute letter which takes a lot of time and patience or you can hire a reputable firm for a monthly fixed price.

Read more about tightening lending standards here.