There is no shortage of credit counseling companies offering to help you lower or wipe out your debt. CCCS or Consumer Credit Counseling Service works with clients to greatly reduce interest rates on consumer debt – sometimes wiping out the interest rate altogether.
What is a CCCS debt management solution?
The role of a a credit counselor is to serve as a mediator between you and your creditor(s). The goal of credit counseling is to develop a plan that will allow you to repay your debts in full.
There are two types of debt management solution plans:
Nov 17 2009
CCCS Debt Management – Credit Counseling Tips
Sep 23 2009
Consumer Credit Counseling – Stop Creditors to Knocking at Your Door
Nowadays, with the increase in consumer debt the consumer credit services have also gained huge importance. A credit counseling company provides advice on money, that how you can make best use of your money and general budgeting tips.
Such companies can discuss the matter with your creditors so that they will extend the time period of your loans or eliminate late fees. Credit counseling companies can also suggest plans for debt repayment or schemes for debt olidation.
After checking your finances or debt loads, a credit counseling company makes plan for repayment to pay-off your debts. People take loans from different companies, which create a lot of problems. You cannot consolidate your loan with the help of a credit counseling service but stop creditors to knocking at your door.
You also have to pay a program deposit or startup fee to a consumer credit counselor. You also make sure that the fee charged is in consonance with the rules set by the State. The credit-counseling agency will collect the monthly amount for making payment to your creditors along with their monthly fees. The consumer services agency will be responsible for disbursing your monthly payments to your creditors.
Such services are also available online. You can also find different credit counseling services through Internet and apply by clicking on it.
Sep 09 2009
Foreclosure Rights – Defense by Recoupment in a Foreclosure Case
If you are a practicing attorney: Are you using Defense by Recoupment under 15 U.S.C. 1640(e) as a strong affirmative defense for your clients?
If you are a consumer: Have you had your loan (from day of application to current) audited by a forensic consumer debt analyst?
I get a fair amount of “conspiracy theory ” calls or emails people who would swear that the CIA was covertly involved in the loan they signed for and that all measures of fraud occurred against them by everyone involved and… you get the point. My first question to this person is always: “Great, so are you prepared for the ,000+ retainer a good attorney is going to want to spend their time investigating, quantifying, pleading and trying a case like that? Well, you know the answer…
Others have read (or have heard) that a loan audit and violations of the TILA can only help you if it’s a refinance loan on a primary residence in the last three (3) years.
To have the EXTENDED RIGHT TO RESCIND, these conditions must be in place but rescission isn’t the only thing that can help someone in (or in danger of) foreclosure.
When it comes to defending yourself against foreclosure the first order of business is to establish clear and genuine issues of material fact in the case. In a Florida foreclosure defense strategy, the client wants to quantify these genuine issues of material fact in the foreclosure case because no judge should ever grant a motion for summary judgment. Why?
In the state of Florida, there is extensive established law that prevents summary judgment from being granted when there are outstanding issues of material fact. Johnson v. Boca Raton Community Hosp., Inc.,985 So.2d 141, Murphy v. Young Men’s Christian Association of Lake Wales, Inc., 974 So.2d 565. A “material fact,” for summary judgment purposes, is a fact that is essential to the resolution of the legal questions raised in the case, Continental Concrete, Inc. v. Lakes at La Paz III Ltd. Partnership, 758 So.2d 1214.
Successfully defeating summary judgment is a big score in favor of the consumer and can greatly improve the chances of obtaining a viable and fair workout and thus ultimately, avoiding foreclosure.
So, one area of practice Lane Houk and his team help consumer attorneys with is by completing a forensic loan audit on the client’s loan documents from the day they applied for that loan through to current day. Why would a foreclosure client want this done? Let’s think about it…
Often times, the client did not receive proper “pre-closing disclosures” under both Truth in Lending laws (TILA) and Real Estate Settlement Procedures Act (RESPA);
Especially when there was a mortgage broker or interim lender involved
The actual “lender” in the transaction was under same timeframe obligations to make specific disclosures to client from the day they received application
The many servicing abuses which could have taken place from day of closing to current
Insufficient amount of certain disclosure violations
Escrow mishandling abuses (I’ve seen people nearly lose their house to a bona fide mistake the bank made but wouldn’t budge until a good attorney got involved)
The list goes on…
Under the TILA civil liability section [15 U.S.C. 1640(e)] regarding violations it says that any action under that section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation. But, that subsection does not bar a person from asserting a violation of this subchapter in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment…
A consumer can only bring an action for damages within one year from the date of closing. However, the consumer is not barred from bringing a claim as a “matter of defense by recoupment” in a foreclosure action because a foreclosure action is an action to collect the debt. (ie. almost all foreclosure complaints are served with some level of disclosure that “this is an action to collect on a debt”) however NOT disclosing that does not necessarily preclude that any such action is NOT an attempt to collect on the debt.)
Any such quantified claim of a violation of the TILA (Truth in Lending Act) from an expert audit report should be brought as an affirmative defense by the attorney. This is a rock solid issue of material fact. No summary judgment. The lender will have to bring the action all the way through to trial. This should give you much greater leverage to obtain a workout. At the very least, this give you/your client much greater time in the house and time to try to work something out that works for both parties; something that is much needed these days because I still see a great deal of servicer abuse/misprepresenations happening every single day.
I hope this little insight gives you some ideas on how you can help yourself in a foreclosure case. If you want more information on forensic loan audit, please call me at (800) 985-4685 ext. 2 or by email at Lane@thePatriotsWar.com
© Lane A. Houk – 2009- All Rights Reserved
Aug 15 2009
Which is Better – Home Equity Loan Or a No Cash Out Refinance?
Every mortgage or refinance needs a target; something larger we’re trying to accomplish beyond just buying/refinancing a home or investment property. The best loan isn’t always the loan with the lowest rate, but the loan that helps you move forward financially.
Here are a few “Refinance Rules” you may want to consider.
These are rules aren’t strict-rather they are just like the sites on a rifle…they help everyone get a focus.
Because a mortgage should not be an end in and of itself, but a means to a bigger end.
Top Refinance Rules…
#1) Eliminating Consumer Debt: (Non-tax deductible)
#2) Have a Savings Cushion: Ideally 3-6 months in a liquid interest-bearing account.
After you close on a home loan, you’ll need a savings cushion. They focus so much on the mortgage rate, that they’ll empty all their savings to buy a home. Not a good idea! Tell me, does it matter if you get the lowest rates in Texas if you don’t have $500 left to your name after closing?
This is one reason why people should consider 95% loans. There’s a myth out there that most people with good credit put 20% down–but most the 80-90-95% home loan clients are PhDs, teachers, physicians, engineers, Aggies, OU Sooners, who could easily put 5-10% down. They choose to keep mortgage down payments to a minimum so they can put more money elsewhere, like money markets, buying investment homes, etc.
Refinance Rule #3) Pay of home before 30 years and save a ton in interest…..you shouldn’t pay for your house 3 times.
Go with the loan that moves you forward financially. If this is a 15 year refinance-great. But if you have debt and you’re paying lots of money out each month-your best bet is going with a home equity loan. The fewer bills you have the better.
Mortgage rates go up and go down…so chasing a magical rate is kinda stressful. And waiting for the market to come your way takes you out of control of your finances. I mean, if rates are 7% and you’re waiting on rates in the 4% range, you may be waiting a few years.
Have a strategy when going into the home loan or refinance- and “use” the mortgage to execute your game plan. Mortgages are just tools. And choosing the right tool is very important.
Ask yourself: “Is there a better way to approach a home loan or refinance than just trying to get some “magical low rate.” Naturally, rate is important, closing costs are too, but let’s try to blend two objectives. The more things you can accomplish with your refinance the better you will be and the better ROI you get from your closing costs.
For most people, they only aim at the mortgage rate. So what do mortgage companies do…they give low rates to these people. But With PMI…
PMI: Consider this, if your rate is 6.00% and the house payment is $1000. But your PMI is $200 month do you still think your rate is 6% if you’re paying $1200/month? Why don’t more people avoid PMI-it’s almost always a waste of money. You guessed it. Home loans that are 80/20 or 80/10 or 80/15s have higher rates because these are riskier than single loans.
And did you know mortgage people make more money on single loans vs. 80/20s or 80/15/5 loans?
Or take 95% home loans…these rates are higher than 20% down. But sometimes people want to keep their money vs putting it towards a home. Maybe they are self-employed and can get a greater return on this money elsewhere or maybe they can take the 5% down and eliminate all their consumer debt. Each person is different and has different goals and incomes.
So how do we actually blend these goals of low rates with financial planning? What do the “Refinance rules” look like in real life.
Someone calls and says “I want to lower my rate. I want to lower monthly bills.” Okay, great. That’s pretty general. Sorta like most high school boys want a nice car and a pretty girlfriend. Who doesn’t want this?
But what if we took at bigger approach to things and blended your goals for a refinance rule and added “eliminate consumer debt” to the equation. What loan would we choose if the objective was to reduce your family’s overall monthly expenses-not just the mortgage?
Just focusing on the mortgage is fine-who doesn’t want a lower home payment. But when we look at the mortgage in context of the overall family expenses we are really doing is improving your overall financial plan. This is what a financial planner truly needs to do. And all financial planning begins on the mortgage level. Because when you are out of debt you have more money to save, to invest, to build towards retirement.
And it all this begins on the mortgage level.
What’s your current refinance goal? Maybe your situation might be “Hey Mr. Mortgage guy, what loan do you suggest that will help me retire at age 55.”
Let’s talk about Home Equity Loans: We recently helped a client get out of debt with a home equity loan. They’ll save over $900/month. That’s $10,800 a year they have in their checking accounts. Not theoretical money. Not the What Would Dave Ramsey Do (WWDR) approach of “cancel your cable and take the difference and put it into a municipal bond so you can make 1.3% over 10 years” But real money.
Financial planning truly begins on the mortgage level.
Home Equity Loans: If you are going to refinance, at least look at something larger than the mortgage rate. For example, let’s say you’re current mortgage is 7% and rates are at 5.75%. You’d really like to refinance and lower your bills. Let’s say, if you took advantage of the 5.75% you’d save $100/month. Hey-that’s progress!
But what if you took some equity out of your home and paid most/all of your non-tax deductible debt off in the process? This probably would save you $500-$700 month. Then you could take some of the savings and apply it to your principal and pay a 30 year mortgage off in 15-20 years. That is a very important step-and here is where I agree with Dave Ramsey-you must have a budget because without this you’ll get back into debt.
Refinancing to get a low rate is good. The second approach moves you to an entirely different financial situation.
I mean, you’re going to have closing costs anyway. Why not go with a home loan that will move you forward financially vs. one that will just save you $100.
Some people think home equity loans are not good. Gurus like Dave Ramsey don’t encourage them. But if the numbers make sense-who’s to argue? Is Dave Ramsey going to pay your bills for you?
Dave teaches some great time-tested fundamental principles. Most of which I agree with. Budgeting, saving, low debt…but the more I listen to his show the more I see his main goal is this: ” Get to zero.”
“Don’t owe anyone anything”…which is good. He even throws some Bible verses around. Who could disagree with a simplistic message of getting to zero?
I don’t think you win the financial game by getting to zero. I believe you get there when you have money. When you have assets. And anyone who takes a black and white approach to anything, I tend to disagree with. Few things in life are 100%-and money is no different. If you called Dave’s show and said “Hey I make good money but I my retirement is iffy at best. I only have 30K in retirement and I’m 50 years old.” He’s likely to suggest you need to budget more, maybe cut out some vacations and buy another book of his.
If you called, me and you’d didn’t have any goals of your own-I’d probably suggest the things that Dave suggest- but I’d encourage you to buy investment properties or some other growth vehicle. If your IRA is growing at 1-2% and we find some properties that are growing at 3-5-7% I’d might even encourage you to put more of your savings towards a higher yield vehicle like established real estate. No specs stuff. Then, with the right planning and discipline, you could retire with several properties that have equity.
Then, with these assets you could sell them or keep them and enjoy passive income during your retirement years. Whichever approach you take-you’ll need to get some points on the board because “getting to zero” is no long term game plan. Most people need to take the Dave Ramsey PLUS perspective…. Take the budgeting, savings, getting out of debt time-tested fundamentals–PLUS buying and keeping assets and starting businesses, even if you have to incur debt.
Because getting to zero should not be the goal and every mortgage should have a specific purpose to move you forward financially.
May 12 2009
How to Choose a Debt Settlement Company
As consumer debt continues to spiral out of control, debt relief is fast becoming a major concern for many American’s. In 1999, American’s made $1.1 Trillion worth of credit card purchases. In 2001, American credit card debt hovered around $690 billion. Unfortunately, in today’s unstable economic conditions, many American’s are being forced to turn to credit cards as a way to extend their income. Consumer debt is at an all-time high and American’s need to know what they can do to get out of debt. Often, consumers are seeking the services of professional debt settlement companies to help regain control of their finances. However, prior to making such an important decision, it is important to fully understand who you are doing business with.
The most important thing you can do when making the decision get help with your debt related problems is to be an informed consumer. It is absolutely critical to do your research. Do not rush into things; this can cause more harm that good. Prior to signing on with any Debt Settlement company, make sure you ask the following questions and consider their responses:
* Is the debt settlement company you are considering accredited by The Association of Settlement Companies (TASC)? Personally, I would not consider doing business with any debt settlement company that’s not! TASC accreditation reduces risk to consumers and gives overall confidence because the member company has been independently evaluated by a third party for its competence and performance capabilities. Any company that truly has the client’s best interest in mind will take the time, and make the effort, to do so. While the process can be long and difficult, in the end, it is best for the consumer and the company.
* How much does the service cost? When choosing a solution for debt relief, it’s important to make sure the program is something that’s affordable and realistic within your monthly budget. If you can’t afford the program and join anyway, you’re are just causing more long-term financial problems for yourself; however, if you are able to meet the monthly financial requirements of the program, Debt Settlement is a great form of debt relief for unwanted credit card debt. Most people don’t realize that Debt Settlement is the quickest and least expensive form of debt relief outside of bankruptcy.
* Does the company offer any type of service guarantee? If so, what is the guarantee? If a company can not get settlement on your debt, you should never have to pay a fee, or the fee should be fully refunded. Additionally, steer clear of any debt settlement company that promises a quick fix to your debt related problems or tells you that debt settlement will not have a negative effect on your credit. Upon enrolling in a debt settlement program, your credit score will probably get worse before it gets better. This is a minor price to pay for being given a substantial debt settlement and not having to file for bankruptcy! However, it is important to realize that if you want to maintain a “good credit rating”, you have to pay you bills on time; anything else will cause your credit score will suffer.
* Does the debt settlement company you are considering have IAPDA certified debt arbitrators? IAPDA certified debt arbitrators possess a solid understanding of the laws governing the Debt Settlement industry and fully understand your current financial situation.
* Does the debt settlement company you are considering offer any type of bankruptcy assistance should debt settlement not work out for you? For example, some debt settlement companies will offer a refund of some of the program costs to help pay for a bankruptcy attorney of your choice. Of course, the funds would have to be paid to a licensed attorney and not directly back to you. Again, a company that does this will most likely have your best interest in mind.
* Does the debt settlement company you are considering belong to the local Chamber of Commerce? If so, is the Chamber an accredited member of the Chamber of Commerce of the Unites States? This type of affiliation will help ensure that the company is conducting business in a proper manner.
* Is the debt settlement company you are considering a member of the Better Business Bureau? It doesn’t really matter. Unfortunately, the BBB does not yet recognize Debt Settlement as an industry, due to, in my opinion, being misinformed by the credit card industry and their agents, the Credit Counseling industry, about the effectiveness and success rate of its participants. As a matter of fact, in some states the BBB has not allowed Debt Settlement companies to even join the BBB, and the BBB has a rating scale that is skewed to give Debt Settlement companies a D or F rating just for the industry they belong to. This is a disservice for consumers, because it does not allow consumers to distinguish between reputable debt settlement companies and those that are less then desirable. For consumers that are truly interested in doing research to select a qualified Debt Settlement company, a great resource is The Association of Settlement Companies website, which is http://www.tascsite.org TASC is the watchdog group that enforces a strict code of standards and disclosures to its member companies. Companies are monitored through a third party “secret shopper” program to make sure they are consistently upholding the high standards that TASC embodies.
« Previous Page — Next Page »