Don’t Risk Your Credit Score In Retirement – WBRC FOX6 News – Birmingham, AL

Cancelling infrequently used credit cards may seem like a good strategy, but your credit score may be adversely affected. Adam Carroll, Founder and Chief Education Officer of National Financial Educators, explains: “When you have a long-standing trade line, which is what a credit card is considered on your credit report, and you cancel that card for whatever reason, your score will actually go down as a result because one of the main impacts on your credit score is the length of credit history.” A shorter credit history translates to higher risk in the eyes of lenders.

Sean McQuay, Credit and Banking Expert at NerdWallet, agrees but includes another reason to keep older cards, noting that closing a card account results in “decreasing your overall credit line, which basically signals that a bank trusts you less.”

In addition to decreasing your overall credit line, closing an infrequently used account raises your credit utilization your total credit in use compared to your cumulative credit line. High credit utilization suggests a greater chance of falling behind on payments and/or defaulting on debts.

To avoid these pitfalls, make periodic small purchases on all your open credit cards to keep them active and pay the balances in full at the end of each billing period. By keeping credit spending low, you can still address debts while getting the full benefits of your credit account.

It’s okay to concentrate most of your credit spending in one account to maximize rewards. Just use alternate accounts often enough to keep them from being closed for lack of activity.

Source: Don’t Risk Your Credit Score In Retirement – WBRC FOX6 News – Birmingham, AL

Compliance Chrestomathy: CFPB goes Global

“Welcome to “GFIN” – yet another acronym to be added to the great pantheon of acronyms!

It stands for Global Financial Innovation Network. The name contains some modernistic sounding buzz words, such as “global,” innovation,” and “network.” It consists of eleven financial regulators,[i] hence the overly abused word “financial.” I am not sure how to contract GFIN into a monosyllabic word, let alone a polysyllabically pronounceable word, like “Go-Fin” or “Gaf-In” or “Goof-In” or “Gay-Fin” or “Gee-Fin” or “Gy-Fin” – so let’s just say “G,” “F,” “I,” “N,” and hope for the best!

The CFPB has said the new network will seek to provide a more efficient way for innovative firms to interact with regulators by helping them navigate between countries…”

Source: Compliance Chrestomathy: CFPB goes Global

Free Credit Freeze & Free Credit Thaw – Children, Too

I have frozen my credit. Have you?

Updated credit report law allows consumers to freeze and thaw their credit reports. It is now free for consumers to freeze their credit and they can lift that freeze for free, too.

Beginning today, September 21, 2018, the Federal Trade Commission (FTC) has enabled a new credit file protection layer — one the consumer controls.

Credit fraud experts say the new option is better than an alert, plus it covers the entire family.

It makes it harder for identity thieves to open new credit accounts under a consumer’s name.

This new act offers a bonus for parents concerned about their under-age 16 children who might be easily lured into getting a credit card of their own. Those children are also eligible to have their credit files frozen.

If a consumer asks for a freeze online or by phone, the credit reporting agency (CRA) must put the freeze in place no later than the next business day. You can place the freeze on-line immediately.

When the consumer needs to lift the freeze – for example, to finance a new phone, vehicle or, get a mortgage – the freeze must be lifted within an hour.

You must notify each of the three CRAs separately to freeze your credit on each of the three CRAs. Below are links to each of the three CRAs. Remember, you must notify each CRA to implement a freeze.

Image credit: AARP Blog

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | September 21, 2018

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct for your situation. This information is not legal advice and is for guidance only. You may reproduce this information in whole and not in part, providing you give full attribution to James Spray.

What Are the Costs of Aging in Place?

According to an AARP study, 90 percent of people age 65 and over would prefer to stay in their own homes as they get older — and not go to a nursing home or assisted living facility.

But if you or your parents are buying, building or renovating a home to accommodate the needs of a loved one, what kind of costs can you expect to incur?

Source: What Are the Costs of Aging in Place?

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | August 17, 2018

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct for your situation. This information is not legal advice and is for guidance only. You may reproduce this information in whole and not in part, providing you give full attribution to James Spray.

Free Credit/Security Freezes – All 3 Bureaus – Free Unfreezing

Thanks to a new federal law – the Economic Growth, Regulatory Relief, and Consumer Protection Act – consumers will be able to contact each of the three major credit reporting agencies and direct them to place a free freeze on the consumer’s credit file. By restricting access, a credit freeze makes it harder for identity thieves to open new accounts in consumers’ names.

Not only will it be free for consumers to freeze their credit, but they can lift that freeze for free, too. And the law requires the credit reporting agencies to do it in a hurry. If a consumer asks for a freeze online or by phone, the credit reporting agency has to put the freeze in place no later than the next business day. If the consumer wants to lift the freeze…that has to happen within an hour.

This new law is effective September 21, 2018. Click here for more.

The New York Times published good article on the subject. “Freezing Credit Will Now Be Free. Here’s Why You Should Go for It.https://nyti.ms/2Mw01rU

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | August 16, 2018 | Updated September 16, 2018

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only. You may use this information in whole and not in part providing you give full attribution to James Spray.

The State of Lending: Debt Settlement | Center for Responsible Lending

Debt settlement companies offer the promise of settling a consumer’s debt for a fraction of what they owe. The idea is simple: debt settlement companies offer to negotiate down the outstanding debt (usually from credit cards) owed to a more manageable amount so that a consumer can become debt free. Unfortunately debt settlement carries significant risks that may result in consumers becoming even worse off.

Debt settlement is inherently a risky venture: in order to enroll into debt settlement programs, consumers are required to default on their debt which often results in fees, increased interest rates, and sometimes even lawsuits from creditors. Even after assuming all this risk, consumers are offered no guarantees; in fact, some creditors refuse to negotiate with debt settlement companies at all. Even if a settlement is reached, a consumer unable to keep up with the new settlement arrangement risks falling back into default – and now without the fees paid to the debt settlement company for negotiating the agreement. CRL finds that consumers must settle at least two-thirds of the debt they enroll in a debt settlement program to benefit, a result that many will not achieve.

This chapter examines the debt settlement industry, the risks to consumers, and recommends actions at both the federal and state levels to reduce the potential harm to consumers.

The chapter finds:

  • Debt settlement is a risky strategy for debt reduction – and often leaves consumers more financially vulnerable.

  • Consumers must settle two-thirds of their debt to be better off than they were before – and many consumers are unlikely to reach that level of success.

  • Strong state and federal laws could curb risks associated with debt settlement.

Source: The State of Lending: Debt Settlement | Center for Responsible Lending

FHFA, FICO & Political Gibberish = Economic Risk

FHFA on credit score delivery: forgotten lessons

Multiple versions of a credit model may lead to added cost and complexity

  • While FHFA states that new scores provide “only marginal benefits,” they go on to say that there are “compelling reasons” to change. It is not clear how that conclusion is reached.

  • They ask market participants for cost estimates, and state that the GSEs will require 12-18 months to implement changes, but do not provide cost estimates for the Enterprises.

  • They acknowledge that there are risks associated with the proposed changes but do not provide a structure for ameliorating these concerns, or a cost estimate of implementing it.

  • They ignore the potential risks associated with the credit loosening implicit in the new VantageScore model that stem from more relaxed trade line histories and increases to systemic risks associated with its adoption by lightly-regulated nonbanks.

Source link

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 |April 30, 2018

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct for your situation. This information is not legal advice and is for guidance only. You may reproduce this information in whole and not in part, providing you give full attribution to James Spray.

JUMBO Reverse Mortgage Facts

JUMBO Reverse Mortgage Facts

  • Borrower(s) minimum age of 62
  • SFR and 2-unit properties – minimum loan amount $850,000.00
  • Condos valued over $500K – spot approval on a case-by-case basis if not FHA approved
  • Maximum loan amount is $4 million
  • No upfront or monthly mortgage insurance premium
  • Mandatory Counseling required – specified agencies only
  • Available for both refinance and purchase transactions
  • Financial Assessment underwrite performed on all applicants

Examples by Age and Purchase Price of the Proprietary Purchase Reverse Mortgage

SFR & 2-Unit | Purchase Price Age Down Payment HomeSafe® Proceeds
$ 850,000 (Min) 62 $ 589,594 $ 260,406
74      493,799      356,201
80      445,342      404,658
88      389,674      460,326
$4,000,000 (Max) 62 $2,841,978 $1,158,022
74 2,419,353 1,580,647
80 2,206,203 1,739,797
88 1,959,978 2,040,022
Condominium
$500,000 (Min) $4M (Max) 62 $ 372,490 $   127,510
74     316,140       183,860
80     287,720     212,280
88     254,890     245,110

These examples are for illustration purposes only.

  • The borrower(s) may retain up to four additional FINANCED properties
  • New-builds must have the Certificate of Occupancy issued prior to closing

This Proprietary Purchase Reverse Mortgage is not associated with the FHA reverse mortgage (HECM) program

NOTICE: This is not an offer to extend credit

Financially Speaking™ James Spray RMLO, CNE, FICO Pro | CO LMO 100008715 | NMLS 257365 | April 9, 2018 | Copyright 2018

Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct for your situation. This information is not legal advice and is for guidance only. You may reproduce this information in whole and not in part, providing you give full attribution to James Spray.