About Dan Krell

January 11, 2010October 5, 2019

How to dispute credit report errors

Recently I told you about the growing importance of your credit report and why you need to ensure it’s accurate. The accuracy of your credit report is more important today than it ever was, not just because mortgage lenders have tightened credit qualifying guidelines, but also because of the growing reliance on credit reports from employers, insurers and other creditors to get information about you.

It is not unusual to find discrepancies or incomplete information within the report, including old credit accounts and outdated personal history. Errors in personal information and credit history sometimes occur due to transposed social security numbers and confusing people with similar names (including confusing the Jr and Sr name suffix). The Fair Credit Reporting Act (FTC.gov) requires accurate and complete data about to be reported by credit reporting companies and those providing information about you.

The first step in correcting errors is to review your report. As I have previously described, you have the opportunity to receive a free credit report from each of the three credit repositories (other factors may allow you to receive additional free reports). Additionally, since fraud and identity theft is a serious threat to your credit history and a growing concern among law enforcement; a regular review of your credit report is a good idea even if you have previously deemed the information accurate. You can contact each of the three credit repositories directly Equifax (equifax.com), Experian (experian.com), and Trans Union (www.transunion.com), or you can visit annualcreditreport.com (a central credit service created by the three credit repositories). The Office of the Maryland Attorney General cautions people when entering website addresses; when entering website addresses, accuracy is important because of the many similar commercial websites that charge for similar services.

If you determine that errors exist in your report, you must notify the credit reporting company in writing to dispute the information. To document your letter delivery, the Federal Trade Commission suggests that your letter be sent via certified mail with return receipt requested. Besides showing your complete name and address, your dispute letter should clearly identify all disputed items with an explanation of the facts as to why the information is disputed along with a request to remove the information. Additionally, your dispute letter should contain the report with disputed items circled, as well as any copy of supporting material to defend your claim.

The credit reporting company has thirty days to investigate the disputed items. The credit reporting company will forward your dispute, along with any supporting materials, to the provider of the disputed information to initiate an investigation of their own. If the disputed information is found to be inaccurate, then the provider must report the corrected accurate data to all three credit repositories. The credit reporting company must provide you notice of the outcome of the investigation along with an updated report showing any changes.

Sometimes credit reporting companies will determine a dispute is “frivolous” (often when insufficient information is provided) and will terminate an investigation. If your dispute was determined to be “frivolous,” the credit reporting company must notify you along with the reasons for this determination.

Additional and updated credit report dispute resolution information as well as resources are offered by the Federal Trade Commission (ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm), and the Office of the Maryland Attorney General (www.oag.state.md.us/consumer/edge121.htm).

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of January 11, 2010. Using this this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell

January 5, 2010June 30, 2019

Coping with the stress of the real estate transaction

Unless you are under the care of a psychiatrist prescribing you Valium, “stress free” is not something that comes to mind when describing real estate. According to the American Institute of Stress (stress.org), stress is subjective and can originate from negative and positive experiences.

On the “Holmes-Rahe Social Readjustment Rating Scale” otherwise known as the Holmes and Rahe Stress Scale (Holmes & Rahe 1967), having a mortgage over $10,000 rates 31 (just above being foreclosed upon) and moving is rated as 20. This commonly used stress scale (which rates life events to determine risk of illness) is cumulative, so the rating for buying a home is at least 51. Your stress level obviously increases when you add in other life stressors such as (but not limited to): getting divorced (73); getting married (50); having a baby (39); changing careers (36).

The reason why buying a home may rate so high on the Stress Scale is that, unlike other transactions, buying (and selling) a home is a large emotional investment! Gordon Gekko, from Oliver Stone’s Wall Street, was on to something when he said, “don’t get emotional [over stock], it clouds your judgment.” Emotions often become amplified when stress increases and can interfere with judgment.

Although most real estate agents don’t understand stress (what it is or how it’s reduced), it does not stop them from lecturing and blogging about “reducing stress” during the home buying or selling process. Being prepared and dividing the buying/selling process into segments is common advice and makes sense. This guidance often helps buyers and sellers feel a sense of “control” by understanding what to expect. However, the wonderful thing about real estate is that every transaction presents a new set of personalities, conditions, and (sometimes) problems. Reactions among buyers and sellers, as well as real estate agents, vary depending on their personalities and life circumstances. So no matter how much you plan, prepare, and visualize what it may be like, stress can be produced just by going through the process (created by both positive and negative feelings).

For some, being prepared is enough to help them anticipate and deal with most circumstances that may arise; while for others, the act of preparation may actually increase stress. Emotional factors, often based on needs and fears, can play a key role in your stress levels. Sometimes your needs are beyond your control and can increase your stress level, such as the need to stick to stringent timelines. And sometimes your needs can adapt and change which can mitigates your stress, such as finding the “perfect home.”

Fears about the outcome of the transaction can increase your stress, especially if you’re a first time home buyer. Common buyer fears include mortgage approvals and rising interest rates; sometimes buyers fear that the home inspection may reveal problems with the home. Common home seller fears include the home buyer’s qualifications and the ability to consummate the sale.

Good real estate agents know how to address the needs and fears of the real estate transaction to keep stress levels in check. Regardless, some people may turn to self help, “pop” or common stress reduction techniques (such as meditation); and if the stress is overwhelming, it wouldn’t hurt consulting with your physician or a qualified mental health professional – especially if you’re already stressed by your job, family and other life stress.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Permission to use this article is by written consent only.

By Dan Krell
Copyright © 2010

January 1, 2010June 27, 2019

Mortgage fraud: The makings of a crime novel

Mortgage fraud is a most despicable crime. Scammers attempts to get away these types of crimes not only eats away at home owners’ equity and/or depletes lenders’ funds (as well as their investors’ money), it forces the public to pay for extensive investigations, trials and prison expenses. Sometimes, however, some crimes appear to be intriguing, not because of the crime per se, but because you want to get inside the scammer’s mind to understand their motives as portrayed by their blatant behaviors and flamboyant lifestyles. From the case files (otherwise known as press releases) of Rod J. Rosenstein, United States Attorney for the District of Maryland, the Metropolitan Money Store Case would appear to make a great follow up to Oliver Stone’s “Wall Street.”

If not for the fact the events in the case actually occurred, you might think that you might be reading the latest crime novel about the mortgage meltdown. However, seeming to be one of the most intriguing cases prosecuted this year, the Metropolitan Money Store case defrauded home owners and mortgage lenders for over $37million by asserting to offer foreclosure assistance and credit repair to home owners. The story ends with the president and the CEO recent sentencing to prison time after an extensive investigation that netted ten defendants that included an attorney, real estate agent, mortgage broker, mortgage processor, among others.

According to the press release of the US Attorney’s Office, the president of the Money Store was “Personally responsible for over $16 Million in losses to mortgage Lenders…” Additionally, U.S. Attorney Rod J. Rosenstein was quoted to say, “Joy Jackson presided over a ‘money store’ that was in the business of ripping off homeowners and mortgage lenders by submitting fraudulent paperwork to support over $37 million of loans that were never intended to be repaid”…”Instead of helping financially distressed homeowners keep their homes as promised, she secretly used the home equity to buy luxuries for herself, including furs, jewelry and over $800,000 on her wedding.”

Something like a modern day “Tin Men,” home owners (who were behind in their mortgages or in foreclosure) were directed to sign title over to third parties who acted as straw buyers to strip the equity form the homes under the guise that the money taken would bring the home owners current on their mortgages and rebuild their credit. Additional financial and investment groups were also added to expand the the conspirator’s foreclosure “consulting and credit services.” The equity proceeds were used for goods and services for the president and CEO of the Metropolitan Money Store including art, cars, clothing, credit card bills, homes, fur coats, furniture, airline trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding. The conspiracy described in the US Attorney’s press releases (for individual defendants) would make Mickey Spillane jealous of not conceiving such a plot.

The good news is that the conspirators in this case were brought to justice, like other mortgage fraud cases, with prison time. Unfortunately, the bad news is that consumers continue to be deceived and defrauded by con artists, even though government warnings and public service announcements alert the public to be cautious of foreclosure rescue scams.

Original published at https://dankrell.com/blog

By Dan Krell

December 29, 2009June 29, 2019

Things we’ll be talking about in 2010

2009 was a year when many home owners lost their homes to foreclosure, while other home owners could not move due to their depreciated home values. Let’s also remember that 2009 was also the time when many home buyers took advantage of home buyer tax credits and reduced prices from distressed properties (which helped boost home sales statistics).

As much as it felt that 2009 was the tear down year for the real estate industry, 2010 is promising to be a re-building year; the upcoming year will lay the foundation real estate markets to come. So, you might ask, “how will things be different?” This is what we may expect to see in 2010: a change in home buyer attitude; rising interest rates; and “Cash for Caulkers.”

More home buyers will be searching for homes in 2010. However, continued changes in mortgage underwriting guidelines will most likely limit the number of qualified home buyers. Mortgage underwriting guidelines have been tightening through 2009 and will continue into 2010. The trend of shrinking the pool of qualified home buyers due to mortgage guidelines requiring increased down payments, higher credit scores, and reduced debt ratios will most likely continue as FHA’s new underwriting guidelines are anticipated in 2010. New FHA guidelines are expected to increase the minimum down payment to 5% and restrict debt ratios below 45% (for FHA mortgages).

Additionally, the current home buyer incentives are likely to sunset without any further extension; it is doubtful that home buyer credits will continue in its current form. As a result of having more “skin in the game,” it is possible that home buyers will be more conscientious during the home buying process; home buyers will take more time and be more discerning in their home search.

Mortgage interest rates are likely to increase through 2010. Having been relatively close to historic lows for nearly a decade, mortgage rates will most likely steadily climb as current Federal Reserve programs are set to end (already evidenced by a consecutive 4 week rise in the average 30-year fixed rate as indicated by Freddie Mac’s Weekly Primary Mortgage Survey). The Fed’s current purchase program of mortgage backed securities and agency debt, that was meant to assist the housing market and facilitate mortgage lending, is committed through the end of the first quarter of 2010. The Fed has already begun slowing the pace of these purchases, so as to ease the transition in the marketplace (www.federalreserve.gov/).

The most anticipated news for 2010 is the “cash for caulkers” program, also known as the “Home Star” program. Although many have speculated about the program and its guidelines, legislation has yet to be passed. President Obama, in a speech given at the Brookings Institute on December 8th, called on Congress “…to consider a new program to provide incentives for consumers who retrofit their homes to become more energy-efficient…”, and to emphasize passing of such as legislation (WhiteHouse.gov). The plan is supposed to offer tax incentives to home owners for increasing home energy efficiency through home energy audits, system replacements, and weatherization; however, the final legislation (if any) may have variants of the current proposal.

In the near future it may seem as if home owners may be talking more about retro-fitting their homes than moving, while more home buyers will complain of the mortgage process. Regardless, everyone is looking forward with optimism to 2010.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Permission to use this article is by written consent only.

December 25, 2009October 5, 2019

Evelyn Harper, our favorite TV real estate agent

Television doesn’t often portray a realistic view of life, especially in a sitcom. That’s probably why reality TV has a huge following. And what’s more interesting than real estate?

A couple of well produced reality shows that presents the “realistic” drama of buying and selling homes include Bravo’s “Million Dollar Listing” and HGTV’s “Real Estate Intervention.” These two shows depict the daily ins and outs of real estate in two markets on opposite coasts of the country, as well as illustrating how hard a real estate agent works for their clients. For example, while demonstrating the slowdown in the market (Million Dollar Listing’s) Chad endlessly waits for prospects to show up to his open house.

But no matter how hard Realtors work at maintaining a positive image, leave it to a sitcom to stereotype the personification of the real estate agent. Credibly played by Holland Taylor on CBS’s “Two and a Half Men,”, the fictional character Evelyn Harper appears to be the quintessential real estate agent.

Ok, Evelyn is portrayed as selfish, opportunistic, unloving, and sometimes pushing the ethical envelope. But personality traits aside; she is always wheeling and dealing, always thinking, and appears to be a very hard working real estate agent. For example, in the 2007 episode “Media Room Slash Dungeon,” Evelyn attends a charity event with her son Charlie. When asked by Charlie:“…If you don’t like any of these people, why do you come to these things?” Evelyn quips: “ Do you read the paper? Do you know what the Los Angeles real estate market is like now?…No one is selling unless they have to…that’s why I have to be working these rooms to learn who is getting divorced, who’s dying, who can’t make bail, who’s crappy sitcom got cancelled…”

If the fictional Evelyn were a real person she might not be your best friend, but you could possibly say that she does know real estate, about networking and the art of making the deal. But the real reason that Evelyn Harper is our favorite TV real estate agent is that she allows us to laugh at ourselves by seeing the humor in typecasting a real estate agent; although exaggerated personality traits (and personality disorders) are not pleasant in real life- it makes great TV comedy!

This article is about fictional TV characters and not to be confused with any real person or real estate agent with similar or same names. This article is not intended to provide nor should it be relied upon for legal and financial advice.