The Importance of your Credit Report

The most important first step in the home buying process is to pull a credit report to see if there are any errors. If so they will need to be resolved prior to making an offer on a home. Errors can lower your credit score and cause you to have a higher interest rate.

Are you considering a purchase? Have you had your credit checked? Did you find any errors?

RISMEDIA, March 12, 2009-Over 70% of consumers identify errors on their credit report. Twenty-five percent of those are serious enough to deny consumers and business owners access to credit, preferred interest rates or even a job. With over 54 billion credit updates occurring each year, it’s very likely you-or your clients-may have errors that are negatively impacting the ability to get credit and/or causing you to pay unnecessary interest expenses.

Identifying a credit report error is only the first step. Most consumers don’t know they have an error on their report because they rarely, if ever, review it until they need to get a loan. By the time this occurs, a consumer typically has less than 45 days before they need their loan funded, and their ability to get a single, valid error corrected within this timeframe is marginal at best.

The need to proactively understand, evaluate and optimize your credit profile has never been greater. So what should a consumer do? Become educated and informed about how credit works. Your clients should continually review and evaluate their credit profile. When a questionable activity is identified, he/she should make sure they understand it and correct any valid errors. In most cases, consumers begin by filing a dispute with the applicable credit agency who is reporting the information. RE

Jeff Mandel is president and CEO of iQual and Marlin Brandt is COO of ApprovalGUARD. For more information, please visit www.iqual.com [2] or ApprovalGUARD.com [3].

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com [4].

How Sellers Value Their Homes

The latest HomeGain survey, however, underscores that while homeowners may be aware of falling home prices around the country, many believe that the slide doesn’t apply to their homes. Our survey shows that homebuyers and Realtors are telling homeowners their homes are worth considerably less than homeowners think they are.

Do you currently have your home on the market? Do you feel that your listing agent has suggested a price lower than you feel is correct? Did you list it higher anyway? Have you had much activity on your home?

The Plan to Slow Foreclosures - Just another Wall Street Bailout?

I agree with Mr. Roberts, it is unfair for taxpayers to continue to bail out banks and mortgage lenders who knew what was going on and used greed as their only determination whether to approve loans. How do you feel about the government plan for foreclosures?


RISMEDIA, February 23, 2009-After listening to and reading about President Obama’s plan to cure the foreclosure epidemic, I wish I could say, “It’s about time!” For far too long, the federal government has been focused on bailing out Wall Street rather than Main Street. I was hoping that Obama would reverse the trend. Unfortunately, his plan looks like more of the same to me.

Obama is setting aside $75 billion… of whose money? According to a treasury official, $50 billion will come from the remaining $350 billion in Troubled Asset Relief Program funds, and $25 billion will come from Fannie Mae and Freddie Mac. This is taxpayers’ money-Main Street money.

And where is that money ultimately ending up? To “subsidize” lenders and investors - that’s Wall Street - for doing what they need to be doing anyway - modifying loans.

The fact is that loan modification is a good business decision for lenders and investors. According to various estimates, lenders stand to lose an average of about $50,000 to $80,000 per foreclosure. A loan modification does not wipe out a lender’s profit. To the contrary, it helps lenders avoid taking a huge loss on foreclosure while at the same time allowing them to keep a performing asset on their books. As a result of a loan modification, the lender keeps collecting interest. The loan remains profitable, albeit less profitable than it would have been had the homeowner been able to afford the originally agreed-upon payments, but still profitable. So why are taxpayers going to subsidize lenders?

Last Sunday (February 15, 2009) 60 Minutes ran a segment entitled “World of Trouble,” in which investigative reporter Scott Pelley interviewed Paul Bishop, a former loan originator for World Savings Bank which, at the time, was the second largest savings and loan. Bishop reported witnessing rampant fraud throughout the organization in the origination and approval of mortgage loan. And as I have been reporting over the past two years, what was going on at World Savings Bank was the rule rather than the exception in the mortgage lending industry.

Everyone knew what was going on. The few people who tried to stop it were silenced and either demoted or fired.

Mortgage lenders were well aware that they were approving mortgage loans that never should have been approved in the first place. Loan originators and banks were raking in profits leading up to the mortgage meltdown, and they weren’t exactly spreading the wealth to American taxpayers. Now that the time has come for them to pay the price for irresponsible lending practices, they are calling on the American taxpayer to subsidize their losses? This is absurd.

Don’t get me wrong. I applaud President Obama for focusing efforts on bringing relief to Main Street, but the government shouldn’t be using Main Street money to do it. I think a more prudent move would be in the form of an executive order demanding that banks modify loans on their own and ending foreclosures until they have cleaned up the mess that they themselves have contributed so much to creating.

Ralph R. Roberts is a consumer advocate, spokesperson for Federal Loan Modification Law Center, host of KeepMyHouse.com, and author of numerous books, including Foreclosure Self-Defense For Dummies and Loan Modification For Dummies (Summer, 2009).