Pennsylvania Real Estate News, Views and Rants : Bruised Credit

Selling Your Home in a Market Filled With Short Sales and Foreclosures

John Rainville — Tue, 06 Mar 2012 01:07:00 GMT

In many areas the housing market is inundated with homes in foreclosure and short sales. How can your home stand out and be noticed when buyers look everywhere and see homes selling for much less than their value, simply because of the situation the home owner is in?

Should you even bother putting your home on the market or better yet, what if you have to sell your home due to a particular reason, like relocating?

Begin by answering a question about the market itself. Are most of the short sales and foreclosures occurring in one particular area of town or are they occurring all over, including your own neighborhood? If you’re competing with homes in another area that is distressed you don’t have nearly as much to worry about. If the distressed sales are hitting a particular neighborhood then it’s a little more like comparing apples to oranges. However, if you’re competing with short sales and foreclosures directly in your neighborhood or even on your particular street then you’re unfortunately going to have to compete with distressed homes for sale.

The plus side of it all is that often distressed homes don’t show as well; especially if the home was literally abandoned by the former owners and left to the lenders. The negative side is the obvious, homes similar to yours are going to probably sell for under true market value and it will affect how you price your home. Hopefully you have an agent who knows how to price in this type of market and still get you the most money possible for your home. The first thing to do is remove yourself from your own shoes and step into the shoes of the buyer to look at your home to ask a few questions. The answers may surprise you.

First is there a reason a lender would appraise your home for more than a distressed home in the same area? The answer here depends upon both the condition of the distressed home and yours. Let’s say the bank owned home is priced at $225,000 but needs another $15,000 in repairs and improvements to be livable. Comparing with your home a buyer may decide that since the total value of the home would be about $250,000 to get the home in good condition, then that would be what they offer to you for your home in move in condition.

The assumption would be that in either case it will cost them $250,000 to buy a home in this neighborhood and they can do that by either waiting until the bank owned home is ready to move in or they’ll accept yours for the same price and not have to deal with contractors or doing the work. Either way, for the buyer both homes are only worth one price to come to the ultimate end which is moving into the home.

The tip here is to price your home slightly below market value. This technique usually results in people coming to look at the distressed homes in the area, noticing your home, seeing the value price that it’s being offered at and think in terms of your home not needing a lot of work that distressed homes will need. This will probably happen to various people and in the end cause a bit of a bidding war; ending with multiple offers and a higher sale price in the end.

Second ask yourself what would make a buyer choose your home over a bank owned home? The answer is probably going to be that your home doesn’t need a lot of work and for many people that’s a definite reason to buy your home before they buy the distressed home. Most people want to buy a home and move in. Life is hectic enough and adding on the stresses of construction and repairs while you’re preparing to move isn’t exactly an enticing thought.

Make sure you make it known to those looking at your home that unlike some of the homes that are in foreclosure or short sale your home is in move-in condition. What you don’t want to do is put thousands of dollars into updates hoping to entice the buyers to purchase your home. Chances are you will not get a return on the money spent to update your home so you may as well have just reduced the home’s price by that amount instead of pouring labor and money into updates.

Lastly, ask how much more is your home worth than the home in foreclosure or short sale. You will probably be surprised to see that in actuality your home is not worth a whole lot more. It may be a matter of a few thousand dollars in the end that puts your home at a slightly higher value. Many times banks will try to get true value out of the home because of the neighborhood. If the entire neighborhood is not distressed then chances are you will have the ability to price your home fairly close to the true value.

It’s obvious that selling your home while other distressed sales are all around you is not the best conditions. If you can hold off and don’t have to sell your home it may be a good idea to wait; but if you truly need to sell then make sure your agent understands how to sell in a market where your competition is distressed sales. Your agent should know where to price your home so it not only gets you the most money possible but actually may end up causing multiple offers to come through and end with a bidding war that gets you the money you deserve.

Understanding a Short Sale

John Rainville — Fri, 24 Feb 2012 02:44:00 GMT

Short sales have become more prominent in the real estate business, in line with the burst in the housing bubble across the United States.

However, it could be a good option for a seller who’s facing bankruptcy or even foreclosure.

In order to understand if this is a reliable option for you, consider speaking with a realtor who can guide you through the process. If you are on the brink of foreclosure or have already filed for bankruptcy, you can talk to your attorney or find a real estate lawyer, who specializes in these types of cases.

During a short sale, the home lender (bank or mortgage company), accepts a payment from the perspective buyer that is lower than the total amount do. However, it is important to understand that not all lenders accept short sales and certain properties don’t qualify. In some cases, it makes more sense to move on with a foreclosure, so a short sale no longer is a viable option.

There is a benefit to the housing market crisis: it has created a good environment for perspective home buyers. Whether you are simply looking to make a change in your life, or you’ve been stashing away funds for that house down the block for more than 20 years, it really is, “a buyer’s market.” However, dealing with a short sale can be stressful for a current home owner, who can’t afford to stay in their home sweet home. If you are on either side of the fence, you should consider the following tips.

The first step you should take is to contact a real estate attorney. They can explain specific short-sale properties and particular tax ramifications. They can also help determine what other home buying options you might have based on your financial situation.

Even though mortgage companies and lenders have a range of requirements, they usually expect the borrower submit a substantial amount of documentation. Below is a small break down of what you can expect.

You might have to make a handful of calls before you actually find the person that is handling the short sale. Keep in mind that you want to go directly to the source. You will want to track down the name of the supervisor. If they are unavailable, leave a voice-message. Do not get bumped around from department to department, as this will only push you away from the person that is responsible for the sale.

Usually, lenders won’t disclose any information unless you produce written consent. If you are working with an attorney or agent, you could streamline the communication process by writing a letter directly to the lender, giving them permission to discuss the extent of the loan. Keep in mind that the letter should incorporate the following information: loan number, property address, your name and both your realtor’s and your lawyer’s contact information

This is a statement that displays the estimated sales price along with costs associated to the sale, unpaid balances on the loan, outstanding payments of late fees, and possible commission. Your realtor or agent should be the one to prepare the document.

You should provide a hardship letter that lays out your personal dilemma. The statement describes what got you into a financial crunch, while also making a plea to see if the specific lender can accept an offer that is lower than the full payment. In some cases, lenders are will understand if you lost your job, were in a serious vehicle collision, or got ill. It would be helpful to be honest and forward about your situation, so the lender can work with you personally.

Be prepared to review your bank statement with the lender. If your statements include substantial cash withdrawals and deposits that are unaccountable, this can serve as a red flag. The lender may also ask you to provide a line by line breakdown of each deposit to determine whether more income will be coming in.

It is also important to keep in mind that property values can fluctuate, depending on the location and world-wide economic state. The term comparative market analysis, also referred to as a CMA, displays the prices of homes that are similar that are either actively being sold on the market or sold within the past 6 months. Obtaining a copy of this analysis can potentially show a lender that you have been directly affected from market conditions. If the lender sees that you are not responsible for your home sitting idle on the market, this can work to your benefit.

Once the two have you have negotiated a fair agreement to finally sell the home to a prospective buyer, the lender or financial institution will request copies of both the offer and listing agreement. You should also be in the position to possibly renegotiate commissions or other payments related to home inspection. Be prepared to provide the lender with your credit report, even if you are worried about your score. Once you complete all these steps you will be ready to walk away from a short sale.

Banks Paying Homeowners Up To $35,000 To Avoid Foreclosure! Call me to discuss your options! John Rainville (717) 554-7430

John Rainville — Thu, 16 Feb 2012 18:49:00 GMT

PrintBack to story

Banks Paying Homeowners to Avoid Foreclosures

By Prashant Gopal - Feb 7, 2012

Banks, accelerating efforts to movetroubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York.

Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody’s. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., a Santa Ana, California-based real estate information company.

Karen Farley hadn’t made a mortgage payment in a year when she got what looked like a form letter from her lender.

“You could sell your home, owe nothing more on your mortgage and get $30,000,” JPMorgan Chase & Co. (JPM) said in the Aug. 17 letter obtained by Bloomberg News.

$200,000 Short

Farley, whose home construction lending business dried up after the housing crash, said the New York-based bank agreed to let her sell her San Marcos, California, home for $592,000 --about $200,000 less than what she owes. The $30,000 will cover moving costs and the rental deposit for her next home. Farley, who is also approved for an additional $3,000 through a federal incentive program, is scheduled to close the deal Feb. 10.

“I wondered, why would they offer me something, and why wouldn’t they just give me the boot?” Farley, 65, said in a telephone interview. “Instead, I’m getting money.”

Tom Kelly, a JPMorgan spokesman, declined to comment on the company’s incentives.

“When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure,” he said in an e-mail.

A mountain of pending repossessions is holding back a recovery in the housing market, where prices have fallen for six straight years, and damping economic growth. Owners of more than 14 million homes are in foreclosure, behind on their mortgages or owe more than their properties are worth, said RealtyTrac Inc., a property-data company in Irvine, California.

Foreclosure Holdouts

Short sales represented 9 percent of all U.S. residential transactions in November, the most recent month for which data is available, up from 2 percent in January 2008, according to Corelogic. Bank-owned foreclosures and short sales sold at a discount of 34 percent to non-distressed properties in the third quarter, according to RealtyTrac.

As lenders shift their focus to sales, they are finding that some borrowers would rather risk repossession while they wait for a loan modification, according to Guy Cecala, publisher of Inside Mortgage Finance, a trade journal. In a loan modification, the monthly payment, and sometimes principal, is reduced to help prevent seizure. Homeowners facing foreclosure may live rent-free for years before they are forced out.

“That’s why the banks have got to pay the big bucks,”Cecala said. “The real question is why is the bribe so big? Is that what it takes to get somebody out of their home?”

Multiple Banks

Banks also pay a few thousand dollars to the owners ofsecond liens, whose loans can be wiped out by a short sale, to encourage them not to block the deals.

While JPMorgan is giving the largest incentive payments, other banks and mortgage investors are also offering them, according to interviews with 12 real estate agents in Arizona, California, Florida, New York and Washington. Lenders also provide incentives on loans they service and don’t own when the mortgage investor, such as a hedge fund, requests it.

JPMorgan, the biggest U.S. bank, approves about 5,000 short sales a month. It generally offers $10,000 to $35,000 in cash payments at settlement, real estate agents said. Not all of the sales include incentives.

Borrowers also can receive payments from the federal government’s Home Affordable Foreclosure Alternatives program, which in 2010 began offering as much as $1,500 to servicers, $2,000 to investors and $3,000 to homeowners who complete short sales.

Quicker Resolution

For banks, approving a sale for less than is owed on the home can cut a year or more off the time it takes to unload a property. From listing to sale, the transactions took about 123 days on average at the end of last year, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

Lenders spend an average of 348 days to foreclose in the U.S. and an additional 175 days to sell the property, according to RealtyTrac. In New York, a state that requires court approval for repossessions, it takes about four years to foreclose on a home and then resell it, the company said.

Lenders can often afford to forgive debt, offer the incentive and still make a profit because they purchased the loan from another bank at a discount, said Trent Chapman, a Realtor who trains brokers and attorneys to negotiate with banks for short sales.

Chapman, who also writes a blog on TheShortSaleGenius.com, said he’s heard about 50 homeowners who have received incentives from lenders including JPMorgan, Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.

Wells Fargo

“My guess is they want to get rid of bad loans,” Chapman said. “If they short sale these types of loans, they have less of a headache and have some goodwill with the homeowner.”

Wells Fargo, based in San Francisco, offers relocation assistance of as much as $20,000 for borrowers who complete short sales or agree to transfer title through a deed in lieu of foreclosure “in certain states with extended foreclosure timelines, including Florida,” Veronica Clemons, a spokeswoman, said in an e-mail.

Bank of America Corp. sent letters to 20,000 Florida homeowners as part of a pilot program, offering incentives of as much as $20,000, or 5 percent of the unpaid loan balance, Jumana Bauwens, a spokeswoman, said in an e-mail. The program expired in December and the Charlotte, North Carolina-based bank hasn’t decided whether to introduce it in other states, she said. About 15 percent of the homeowners agreed to participate in the program, she said.

Citigroup Offers

“The bank is pleased with the response,” Bauwens wrote.“The state is experiencing higher foreclosure rates than other parts of the country and is therefore seen as a viable market to gauge incremental short-sale response and completion rates when presenting homeowners with relocation assistance at closing.”

Citigroup offers $3,000 to most borrowers who qualify for its program, but the “amount may increase based on the circumstances of each individual case,” Mark Rodgers, a spokesman for the New York-based bank, said in an e-mail.“Investor programs have different guidelines for relocation incentives, which we honor.”

Susan Fitzpatrick, a spokeswoman for Detroit-based Ally, didn’t comment specifically on incentives when asked about them.

Borrowers typically can’t negotiate the incentives, which arrive by mail, Chapman, the Realtor, said.

Tap on Shoulder

“It’s not really easy to identify the guidelines because Chase doesn’t tell you, they kind of tap you on the shoulder,”he said. “When I first saw it in January 2011, I thought it was a joke or a typo. I was convinced it must say $3,000, not $30,000.”

Offering enough for the homeowner to put down a deposit on a rental apartment is reasonable, said Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks sales of foreclosed properties. Giving tens of thousands of dollars to delinquent homeowners sends the wrong message, particularly if they got into trouble by running up home-equity loans during the housing boom, he said.

“It may make sense for people to walk away, it doesn’t make sense for them to get rewarded for doing it,” O’Toole said. “It’s not the homeowner’s fault that house prices dropped so dramatically, but they have already received months of free rent, if not cash out.”

Cecala of Inside Mortgage Finance said he wonders whether lenders are making big payments on properties with underlying title problems. Evan Berlin, managing partner of Berlin Patten, a real estate law firm in Sarasota, Florida, said representatives of a large bank told him the incentives are primarily given to borrowers when it doesn’t have the proper paperwork needed to win its foreclosure case. He declined to name the bank for publication.

Incentive Disconnect

State attorneys general across the U.S. began investigating foreclosure practices in October 2010 following allegations that the nation’s top mortgage servicers were using faulty documents to repossess homes.

Berlin said his office negotiated about 400 short sales in the past year and about a quarter included an incentive, ranging from $3,000 to $48,000. In some cases, the payments aren’t incentives at all because they’re offered after the borrower has almost completed the short sale, he said.

“The idea is that this is relocation assistance,” Berlin said. “But when you’re offering $48,000, obviously it doesn’t cost $48,000 to relocate.”

Cooperation Sought

The size of the payment may have little to do with sales price. JPMorgan gave one Phoenix homeowner $20,000 after she sold her property in June for $32,000, according to Royce Hauger, the real estate agent who represented the seller and shared a copy of the settlement sheet with Bloomberg News. The bank also agreed to forgive more than $70,000 in debt, she said.

Kelly, the JPMorgan spokesman, declined to comment on the payment.

The homeowners are getting the money in exchange for their cooperation, said Kris Pilles, a Riverhead, New York-based real estate broker who represents banks, servicers and hedge fundsthat own distressed housing debt.

Pilles is frequently dispatched to the homes of delinquent borrowers to explain the benefits of avoiding foreclosure, he said. His clients have paid as much as $92,500. In return, the lenders expect the seller to clean the house before showings, and trim the grass.

“Money talks,” Pilles said. “From the bank side, it’s anything to initiate a conversation with someone who may not be listening to them.”

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net; Rob Urban at robprag@bloomberg.net.

CALL ME TO DISCUSS YOUR OPTIONS ! John Rainville (717) 554-7430

Help To Stop YOUR Foreclosure!

John Rainville — Sat, 06 Nov 2010 14:35:00 GMT

By Requesting A FREE Consultation With Your Local

Foreclosure Avoidance Expert Now By Clicking Here...

Here's what I will help you determine in your free consultation¼

• Review your current situation and explain

what's your best solution to prevent foreclosure¼

• Help determine if you are qualified for a

loan modification or forbearance...

• Explain how to Maximize Government and

lender aid and assistance...

• Help you understand your future financial Learn How To Save Your Home From Foreclosure

position with your mortgage...and a lot more... Now By Requesting A Free Consultation With Your Local Foreclosure Expert Today

Best regards,

John Rainville

We've Added FREE Weekly Webinars to Help You Buy, Sell Or Fix your Credit

John Rainville — Sat, 02 Oct 2010 20:13:00 GMT

We're excited to announce that we have added full free access to "Home Buyer University Webinars" to our visitors!

You will find a growing library of workshops that you may view
completely free of charge which will provide valuable information that
you will need as you prepare for your home purchase.

There is nothing being sold here so view them all at your earliest
convenience.

Weekly Seminar Topics include:

10 Secrets to Sell Your Home Fast...Even in a Down Market!
20 Things You Must Know Before Buying a Home
203k FHA Program - How to Get the Money to Fix Up the Home You're Buying
25 Things You Must Know Before Applying for a Mortgage
5 Ninja Strategies to Help You Negotiate Like a Pro!
8 Big Insider Secrets to Building Your Credit Score Fast!
The Best Kept Mortgage Secret: USDA Guaranteed!
The Insiders Guide to Reverse Mortgages!
USCCRA Webinar to Realtors
Zero Down! Fact or Fiction? The Truth About VA Loans!

Procrastinators get 2nd chance to buy a home and get up to $8000 from the Govt!

John Rainville — Mon, 09 Nov 2009 13:27:00 GMT

Here is a quick overview of the legislation:

The tax credit is available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.

The tax credit remains at $8,000 for first-time purchasers. No change to definition of first-time purchaser.

There is a new $6,500 tax credit for repeat buyers. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.

Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.

Walk in Closets are the cause of this Financial Situation---Seriously!

John Rainville — Mon, 23 Feb 2009 15:23:00 GMT

I have been pondering almost daily this great financial debacle that we have gotten ourselves into and how it happened. Now I understand Barry Obama likes to point the finger at the GOP or George Bush, but it started way before "W" became Number 43. It seems to me that this whole mess can be traced back to Post WWII America and the advent of the "walk in closet" to entice people to move to the new "burbs" outside of town. WHAT? you say! That's LUDICROUS! Now hear me out...

Most of us real estate professionals have been through our share of homes built all different years. So think about it...the 1800's and before we had armoires and PEGS for god sake to hang your clothes on---we only had a few shirts and pants IF we had more than one! Around the turn of the century we start to see what most bueyrs perceive to be miniscule closets in homes---now you coud hang maybe up to a dozen garments! The next jump is post WWII and the advent of the @#$ walk in closet----WHAMO! the world changed!

Now we started to hoard clothes, etc that we could hide in our WALK IN closets. Remember Lucy and Desi? She was ALWAYS hiding outfits! But now the "cow was outta the barn" and we havent' looked back----until now. At the same time we went from no garage to a one car to a two car to a three car---the third bay just to hold all the crap that WON'T fit in our WALK IN CLOSETS! But WAIT WE DIDN' T STOP THERE!

Hell, I've seen homes with 1500 Bottle "wine cellars"! We've got basements and attics and now we even RENT STORAGE UNITS for all the @$%# that won't fit in our @#$% WALK IN CLOSETS! What are we NUTS! We're renting space to store stuff we should have given away or sold on E-bay! In the rural areas where I live some of the folk who live in small houses or mobile homes have had to start storing their assets on the FRONT LAWN!

Hellooooo, why not sell that old AMC Pacer or cherry Gremlin that you are saving from the junk yard to someon who might actually be able to use it? Or at least scrap them gems and let us sned it to China to be melted down and sold back to us.Ohhh, I can hear some of you already laughing out loud, but hey what's YOUR closet look like? And I know I will hear from some Al Queda wannabe that this all goes back to a damn American Carpenter!

So Barry---back off George W. and the GOP and let America know where the blame outta be.

As always, IMHO.

5% Interest Rates! $7500 Tax Incentive! Lower Fico Scores for FHA Mortgages!

John Rainville — Tue, 02 Dec 2008 19:38:00 GMT

WOW! We are back in the low 5% range for mortgages! What a country! And if you are a first time buyer you will be able to suck up the $7500 Federal tax incentive and you only have to pay back $500 a year!

Our one lender just told us that they are now abel to look at lower than 600 FICO scores for FHA financing for people who may have some "mitigating circummstances". That's GOOD news, you migh not of been able to get a loan for the last 6 months, BUT we may be abel to help you now!

Call or e-mail us so we can see how we can get you into a home!

You're Invited!

John Rainville — Tue, 28 Oct 2008 19:03:00 GMT

To learn how you can buy a home in the current market or get in position to buy for the Spring. You recently visited one of our websites and inquired about buying real estate. We would like you to invite you to a FREE no obligation, private discussion to determine the best plan of action for you in the current market.

You’ll learn about:

· Credit Repair --- how to get your FICO score up.

· Government Grants to give you up to $5000 towards buying a home

· The $7500 Interest Free Government “Loan” if you buy now

· 102% Government Financing from the Department of Agriculture

· 100% VA Financing for Veterans and their families

· 97% FHA Financing

· 95% Conventional Financing – what you will need

· Buying a Foreclosure

· Building a New Home

· Buying an Investment Property

· What Title Insurance is, and Who it protects

· Why you MUST have a Buyers Agent to Represent YOU and NOT the seller

· How much cash will it take to get you in a house

· How we may be able to get you in home for the holidays!

Call…John (717) 554-7430 to discuss your options.

Best regards,

John Rainville, Broker, Realtor®, CSP, RECS, LTRS Certified

NAR recommends Congress pass new housing stimulus legislation

John Rainville — Fri, 17 Oct 2008 15:24:00 GMT

NAR recommends Congress pass new housing stimulus legislation that includes the following priorities:

1. Remove the requirement in the current law that first-time home buyers repay the $7,500 tax credit, and expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.

2. Revise the FHA, Fannie Mae and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for home buyers in high cost areas.

3. Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury department should be required to use the newly enacted Troubled Assets Relief Program to push banks to:

• Extend credit down to Main Street, making credit more available to consumers and small businesses;
• Expedite the process for short sales;
• Expedite the resolution of banks’ real estate owned (REOs) properties.

4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

This is GOOD! NAR recommends Congress pass new housing stimulus legislation

John Rainville — Fri, 17 Oct 2008 15:24:00 GMT

NAR recommends Congress pass new housing stimulus legislation that includes the following priorities:

4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.

Myths The Credit Bureaus Want You To Believe

John Rainville — Sat, 16 Aug 2008 00:50:00 GMT

Myths The Credit Bureaus Want You To Believe

-By John Rainville

Myth No. 1 – It is easy to dispute a credit report. Consumer’s can resolve their own issues.

To be honest, it IS simple to challenge a credit report. However, as an everyday person, it’s amazingly difficult and frustrating to get results from the credit bureaus. Here’s why.

This is a little-known fact. More complaints to the Federal Trade Commission involve credit bureaus than any other type of company. The major credit bureaus have paid fines of $2.5 million over the years due to failure to respond properly to charges.

The main objective of credit bureaus is to protect their profits. They are NOT government agencies. They are for profit organizations. Anytime they have to investigate a consumer disputes it eats into those profits. Investigations take up time and energy too. The credit bureaus do everything in their power to make restoring your credit exceedingly difficult, short of sparking more massive lawsuits.

Attempting to restore your own credit means you must be willing to spend time learning about the process. This is why it is so difficult when you are inexperienced. It most cases you may be less effective than if you hired a professional. Realize that credit restoration will most likely take longer than you expected.

Myth No. 2 –A negative item that is successfully removed from your credit report will simply reappear again.

The reality is that a creditor has 30 days to verify a dispute. If the credit bureau has not heard from the creditor within that timeframe, they must delete the item from your report. Sometimes the bureaus will perform a soft delete. This is where they delete the item from your report but, will reinsert the item if they hear from the creditor within a week or two of the 30 days.

If this happens, the item can be disputed again. However, most of the time, once an item is deleted, it is gone for good. By using our preferred attorney’s, you can be sure your item will be disputed over and over again until it is removed. We have experienced a 96% success rate with this.

Myth No. 3 – Bankruptcies, foreclosures and tax liens can never be taken off your credit report.

Approached correctly, any negative listing can be removed. That is why it is best to work with a professional. They have the experience and know how to remove these items.

Myth No. 4 – The credit agency permits a 100-word paragraph to be entered on an account to explain the situation. Creditor’s take this statement into consideration when they’re weighing they’re options about extending credit.

This seems reasonable, but it’s not correct. When we talk about creditors, we’re talking about companies who are loaning money – for credit cards, mortgages, cars, department store credit cards. Very few of these companies will consider any information you submit in a paragraph explanation. The only items verified on the statement are the negative items on your report.

The first thing we want to delete from your credit file would be the 100-word explanation. In essence, the explanation is seen as an admission of guilt. It’s actually the last thing you want to do. It verifies that something happened. You don’t want to do that.

Myth No. 5 – Paying off a past-due account (like a collection account or a charge off) will change your account to a "paid" status and it will no longer reflect negatively.

It is nearly impossible to completely fix your credit unless you settle your unpaid debts. However, as strange as it may sound, paying off a debt can have a negative impact on your credit rating. Aside from bankruptcy, which can appear on your credit report for up to ten years, negative items may be kept on your report for up to seven years. The date of last activity starts the 7 or 10-year time period. Making a payment "resets" the clock because it is considered new activity. So if this item was two years old, when you make a payment on the collection, the two years are wiped away and you start at day one again. It appears to the credit scoring computer as an item that happened yesterday.

Anything that happened yesterday affects your credit score more than something from two years ago does. This will damage your report, as it looks like the credit bureau forced you to pay up. Since you can do more harm than good, even though your intentions are right, it is always best to work with a professional when trying to restore your credit.

Myth No. 6 – Some people believe that a poor credit report can be off-set by building new credit.

Even one negative item on your credit report can have serious negative consequences. In today's computer world, the decision to approve a new loan is rarely made by a human being. Your score is determined by a computer program. One negative item can send interest rates soaring.

You can have a small amount of negative credit a year or two ago. The last year or two has been great. A couple of those older accounts, regardless of how much good credit you now have, can cause you to be declined for additional credit, make you pay higher interest rates and waste thousands of your hard earned dollars.

Myth No. 7 – Credit bureaus are part of the government and are unquestionable.

The credit bureaus are in business to make an impression on their stockholders since they are publicly traded companies. They are NOT agencies of the government. In fact, the industry is one of the most heavily regulated. It has recently been revealed in a survey, by an independent group, that over 70% of all credit reports have an error on them. Due to the prevalence of mistakes, consumer protection legislation has been drawn up which allows the consumer the right to challenge the bureaus and force them to remove any incorrect data, information that is out-of-date or data that cannot be verified.

Myth No. 8 – It is against the law for creditors to remove a negative-listing on my credit record. Negative-listings are required by law to remain on the credit report for at least seven years.

When talking to collection agencies, credit grantors or the credit bureaus, keep in mind that you can expect to be given all kinds of quasi-legal drivel by people who are over worked and under trained. The law states that negative information must be removed after seven years. It sets a maximum, but not a minimum. The credit bureau can remove an item whenever it suits them.

Myth No. 9 – Many people share a belief that by getting a federal tax ID or altering a few numbers of their social security number, a new credit file will be created.

It's extremely difficult to create a new credit file by this scheming, not to mention illegal, activity. A lot of people do it, but a lot of people also get into big trouble for doing it. This is not something that you want to do.

It might have worked 10, 15 or 20 years ago. But because of all the computer linking systems now, giving fraudulent information on a credit report is nearly impossible to get away with, let alone the fact that it's a criminal offense.

It's in your best interest to hire adequate representation. Face the music and confront the credit bureaus, armed with the rights that Congress has granted you through the consumer protection laws.

Myth No. 10 – Credit counseling services can help you restore your credit.

Credit counseling services are agencies that are set up to help you renegotiate your credit cards and other debt. They put you on a budget and you make one payment to them. They in turn pay all the bills for you.

People who are in debt or who are trying to avoid going bankrupt can seek help from these nonprofit consumer credit counseling services. (CCCS’s) However, these companies are controlled and funded by the credit bureaus and the credit grantors, like the big credit card companies. They actually fund these agencies.

Your creditors will usually make a note on your credit report if you’re working with one of these consumer credit counseling services. Potential credit grantors are scared off by this almost as much as a Chapter 13 bankruptcy. Some of the worst credit reports out there have been participants in a credit counseling service or similar program.

John Rainville, Broker, Realtor, CSP, RECS, LTRS Certified - when you or one of your friends finds yourself needing real answers and real solutions to credit issues, you can confidentially contact him at 717-554-7430 or at john@brokersrealty.com.

Can you get your credit "fixxed" so you can buy a home? YES! We can help...

John Rainville — Wed, 06 Aug 2008 19:27:00 GMT

WOW! Everyone seems to have problems on their credit report...mistakes, and other items that are just penalizing them and stopping them from buying a home!

We now have a solid way that works to get your credit report cleaned up and you on your way to getting the home or property you have always wanted.

Watch this short video to get more info: www.creditrepairproof.com

Or if you want to know "how" we're going to get it done: www.35minutevideo.com will explain more of the ins and outs of the process.

Questions? or want to get started now? Call me John Rainville 717-554-7430.