Christian Financial Advice

The Government's New Targets: Debt Collectors & Credit Bureaus

If you are in a financial related business, there is a new sheriff in town; The Bureau of Consumer Financial Protection.  The criticism of this new agency is that it seems to be just another layer of bureaucracy regulating activities that are already regulated by existing government agencies. For example,  the Bureau has announced that its first two targets will be credit bureaus and debt collectors.  Both of these industries already fall under federal regulation from the Federal Trade Commission.  Additionally, they are regulated in each state  as well.  If you watch the video below you will see that the new Director of this agency, Richard Cordray, is unable to really explain what the purpose of this new agency is.  

Take a look at the video, I have never really seen anything like this before.  It almost sounds like they are still trying to figure out what exactly the agency will do and need your ideas to come up with something.  With a neighborly style borrowed from the likes of Andy Griffin and Fred Rogers, Cordray asks you to share your story with him through the new website.

 

I am all for consumer protection but I am also against government waste.  I would like someone to explain to me why we need yet another government agency when we are running trillion dollar deficits.  How will this agency be any more successful in regulating financial services than the already existing government agencies assigned to this task? If other agencies are not producing results, they should be shut down and replaced. This seems like the worst of both worlds to me.  

Shocking Video Below About Salaries At This New Agency

 

The New Diabolical Tactics Of Debt Collectors

While I don't agree that we need another government agency, I guess if we are going to have one I would agree that starting with debt collectors and credit bureaus is a good choice.  One of the most common issues I hear about through our website are problems that people are having with debt collection firms.  The biggest single issue is the harassing phone calls that even follow people to their workplace.  As a result, we have made available a simple letter that provides consumers with a means of stopping the phone calls - Cease Communication Letter.   I posted a video on YouTube three years ago on how to stop collection calls and it has had nearly 20,000 views!  It appears that this continues to be a hot topic. 

My best advice on what to do when you can't pay your bills. 

Debt Collectors Using Social Media To Embarrass You Online

I have seen several news articles recently outlining how debt collectors are using social media as a means to collect debts.  One story involved a company setting up a website with the domain name of the debtor (your name.com) and then posting information on the site about the unpaid debt. Whenever this person's name was searched for online, this page would come up in the top of the search results since the domain name contained their name.  Another tactic is to set up a fake Facebook account and then 'friend' you.  This allows them to track your activity and gather the latest information on where you work, a mobile number, a change of address, etc...

 

The Fair Debt Collection Practices Act became law in 1978, long before the Internet, cell phones, and social media.  Debt collectors are facing the reality that old tactics simply don't work anymore due to caller ID and many homes that do not even have a landline.  Many are calling for an update to the law to address these issues.

Credit Bureaus - Pretty Much Up To The Same Old Tricks

Credit bureaus can make or break your finances and are making it exceedingly difficult for consumers to correct inaccuracies in their file. For example, I recently wrote to all three bureaus requesting my free annual credit report.  I provided my name, SS number, mailing address, date of birth, copy of my driver's license, and a copy of my Social Security card.  You would think that this was more than enough information but it was not.  Two of the three bureaus returned my letter asking for even more proof that it was me.  I have a hard time believing that this was a sincere request but was nothing more than a brush off.  How many people will put together all of that information a second time and send it in?  Some (as did I), but many will just give up on the project rather than send out a second set of letters.

How To Repair Your Credit

Please use the comments section below to share your own story (good or bad) about debt collection firms or the credit bureaus and what your thoughts are on adding this new agency.

Helping you make the most of God’s money!

James L. Paris Editor-In-Chief www.Christianmoney.com 
Follow Me on Christian Chirp www.ChristianChirp.com/jameslparis 
Christian Financial Advice

Understanding The $25 Billion Mortgage Settlement

Let me first start by pointing that this latest episode of 'mortgage help' coming from Washington has received lukewarm reviews.  The rap has been that this is once again too little too late and will not help very many homeowners.   To make matters worse, borrowers won't know if they are even eligible for help for as long as two to three years (the period of time it is estimated for the settlement to be implemented).

 

• Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.
• Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.
• Loans owned by Fannie Mae or Freddie Mac are not impacted by this settlement

Let's take a look at the  highlights:

1.  States Participating

49 states are participating (all but Oklahoma) in what is a settlement involving the nation's five largest mortgage servicers.  This includes Bank of America, JPMorgan Chase, Citibank, Wells Fargo and Ally Financial.  Smaller mortgage servicers will be able to join the settlement later.  Keep in mind that for the purpose of determining if you can benefit from this settlement it is not as important who your lender is but who is your servicer (the organization that collects the monthly payment).

 

2.  Purpose Of The Settlement

The concept behind the settlement is to require the mortgage servicers to compensate borrowers for their misdeeds.  This most notable issue is the slew of allegations relating to the foreclosure process.  Lost documents, forged documents, robo-signers, the whole list of 'sins' of the mortgage processors is rolled into the settlement.  It is important to note that individual borrowers still retain the right to file their own lawsuit to pursue their legal claims individually.

3.  How You May Benefit

Those That Have Already Lost A Home To Foreclosure

If you lost your home to foreclosure between 2008 and 2011 you may be entitled to receive compensation.  The amount of money that is expected to be paid out to those that lost their home to foreclosure is estimated to be $1,500 to $2,000.  It is not clear what the requirements will be to receive this benefit.  Early information on this suggests that you will have to provide some evidence that you were a victim of mortgage processor abuses.  So, simply having lost your home to foreclosure in and of itself will not entitle you to a payment.

Individuals Underwater On Their Mortgage

If you owe more on your mortgage than your home is worth you may be eligible for a principal reduction that would make refinancing possible.  The key word here is may. Just as with these prior mortgage relief programs there appears to be quite a long list of requirements. Frankly, I was unable to make sense of them by the deadline for this article.  So, as with all of these programs it does not hurt to make a phone call to your mortgage servicer to find out what help you may be eligible for.  Who knows, you may fall into the small percentage of people that will get some real help here.  The other variable here is that the states will be able to decide how to implement the distribution of the funds.  For example, in Wisconsin the Governor has decided to take a large chunk of the money from the mortgage settlement and use it to pay down the state's debt rather than giving it to homeowners.

Banks Coming Up With Their Own Solutions

Without any government mandate banks have been coming up with their own solutions as well.  I read an interesting article about banks paying people to walk away from their homes. 

All of us financial writers want to produce an article with a list of bullet points containing black and white information when these programs are unveiled.  The truth is that this may be more akin to one of those car dealer promotions where 10,000 people receive a key in the mail and only key will start the car being given away.  I guess if you live near the dealership and are available on that day it would not hurt to see if you have the winning key.   Similarly, there is some chance that this latest round of relief may be the answer to your mortgage dilemma. 

My Advice

1. Check out the official website for The Mortgage Settlement

2.  Contact your state attorney general to see what benefits you may be eligible for as this will vary by state.

3.  Continue to try and work out a deal with your mortgage servicer irrespective of whether this settlement applies to your or not.  While it is true that only a small percentage of homeowners are getting help from these programs, some are.  Those that are getting mortgage modifications are persistent and tireless in their efforts to do so.  While there is no guarantee, pursuing these programs gives you a chance,  and I guess in today's economy that is better than no chance at all.

Helping you make the most of God’s money!

James L. Paris Editor-In-Chief www.Christianmoney.com 
Follow Me on Christian Chirp www.ChristianChirp.com/jameslparis 
Christian Financial Advice

 

Why Do $20 Chocolate Berries Cost $52?

I have simply reached the point that I now believe that anyone I do business with is trying to cheat me. Am I just paranoid? Consider my experience today. I was listening to talk radio and heard an ad for a company by the name of Shari's Berries. This is my mom's first Valentine's Days since my Dad passed away in September so I wanted to get her something special. Strawberries dipped in chocolate in a handsome gift box seemed like just the thing.  What's more, the current special was $19.95.  This seemed like a wonderful deal and just the right gift.

I went to the website inserted the talk show host's name so I could get the 'special deal' and after just a few clicks I placed my order and the total was $52! I kid you not, my chocolate berries had morphed from $19.95 to $52.  I was unable to see the final screen to view my total since it was blocked by a pop up ad (wonder if that was just an innocent mistake?).  I was hit with shipping and handling charges for the difference and additional fees for the berries being delivered on Valentine's Day.  I called the toll free number and negotiated the cost down to $37 by agreeing that my order could be delivered on either the 13th or the 14th and at any time during either day.

Am I being a baby about this or is this just how things are today.  It is not even about the money really.  Why run ads promoting a Valentine's Day gift for $19.95 and then make it cost $52 to get it delivered on Valentine's Day?  Maybe I should just hope that Mom likes the berries and forget about feeling scammed on this one.  Why can't anyone just be straight with their prices these days?

Helping you make the most of God’s money!

James L. Paris Editor-In-Chief www.Christianmoney.com 
Follow Me on Christian Chirp www.ChristianChirp.com/jameslparis 
Christian Financial Advice