SUCCESSFUL LOAN MODS(5yrs fxd) PAY ATTENTION (THE BATTLE IS OVER BUT THE WAR HAS JUST BEGUN)

[unclmikl]

Congratulations to all those who have gotten loan mods and to those of you who are in the process. If you have gotten A loan modifried to a 5 yr fixed you need to keep in mind that this loan is scheduled to reset in 5 yrs. so now is the time to put a plan of action together in order to get in a good loan 30yr fixed or better.because of the unsettled housing market this may be more difficult than times past. some of us may loose more equity.
now is the time we need to start doing things to improve our credit.
1.MAKE ALL PAYMENTS ON TIME.(any late payments really hurt your credit score).

2.PAY DOWN CREDIT CARD BALANCES.(IF YOU HAVE $10,000 AVAILABLE CREDIT YOU SHOULD NOT USE MORE THAN $3500 HENCE 35% IF YOU DO THIS WILL HURT YOUR SCORE.

3.DO NOT OPEN ANY NEW LINES OF CREDIT THAT ARE UNNECESSARY!!!

4.MAKE NECESSARY REPAIRS.(if neededTO KEEP THE VALUE OF YOUR PROPERTY FROM DEPRECIATING

5.WATCH THE MARKET WITH THIS NEW HOUSING BILL THIER WILL BE NEW LOAN PRODUCTS COMING OUT. SUCH AS FHA SECURE AND THE BAILOUT WITH FHA SECURE MAY BE GOOD FOR SOME THEY WILL FINANCE 97% BUT WITH THIS PRODUCT YOU WILL BE PAYING MORTGAGE INSURANCE BUILT IN. NOT TERRIBLE BUT IF YOU DONT NEED IT. TRY FOR A 30 YR FIXED.WITH THE BAILOUT YOUR LENDER HAS TO AGREE TO A WRITE DOWN.THIER WILL BE MORTGAGE INSURANCE. AND THE GOVT WILL BE YOUR NEW SILENT PARTNER. WITH THIS PRODUCT IN THE FIRST YR GOVT HAS 100% OF EQUITY OVER THE LOAN AND OVER A 5YR PERIOD YOU WILL GAIN MORE EQUITY IN YOUR RESIDENCE AS ITS NO LONGER YOUR HOME CAUSE AFTER 5 YRS THE GOVT WILL ALWAYS RETAIN 50% OF THE EQUITY IN THE PROPERTY. SO IF YOU PUT A NEW ROOF OR A NEW KITCHEN.YOU PAY 100%OF THE COST AND GOVT GETS 50% OF THE EQUITY. I CALL THIS THE LOAN OF LAST RESORT. THOSE OF YOU WHO HAVE TO TAKE THIS LOAN THIER HAS TO BE A LOOPHOLE SOMEWHERE THIER ALWAYS IS.MAYBE REFI NO MONEY OUT(shows no profit)sell it to a family member or spouse WITH NO PROFIT.THIS IS JUST SPECULATION WE REALLY NEED TO SEE HOW THIS IS GOING TO PLAY OUT.CAUSE IT IS VOLUNTARY SO WE DONT EVEN KNOW WHICH LENDERS AND INVESTORS WILL TAKE PART IN IT.

6.WHEN IS THE BEST TIME FOR YOU TO REFI.
THE SOONER THE BETTER AS SOON AS YOU CAN GET INTO A 30 YR FIXED IS BEST FOR MOST OF US
FOR SOME IT MAY BE WHEN THIER PREPAY PENALTIES END.
FOR OTHERS IT MAY BE WHEN PROPERTY VALUES START TO INCREASE.AND THIS IS WHEN I FEEL IT IS ULTRA IMPORTANT TO WATCH THE MARKET AS I FEEL WHEN PROPERTY VALUES INCREASE SO WILL RATES!!!!! YOU DONT WANT TO BE THE PERSON WHO OWES 180k AND THIER HOUSE IS CURRENTLY WORTH 160k AND PROPERTY VALUES START RECOVER YOUR HOUSE IS NOW WORTH 210k AND YOU REFI @ 6% BUT YOU DECIDE TO WAIT FOR YOUR PROPERTY TO FULLY RECOVER AND GO BACK TO 240k BUT NOW THE RATE IS 9% AND YOUR 5 YR FIXED IS 7% SET TO ADJUST TO 10%.
THIS IS JUST SPECULATION AND IT WILL BE DIFFERENT FOR EVERYBODY

KNOW WHEN IT IS THE BEST TIME FOR YOU TO STRIKE!!!!!

THANKYOU FOR LETTING ME RANT
UNCLMIKL

[unclmikl]

i was also thinking that if this is the loan of last resort for us it would be for our lenders also why would they want to agree to a write down and take a loss on the loan. when they can restructure it and come out ahead in the long run.
so maybe this housing bill is to make lenders mov than arses.
unclmikl

[Moe Bedard]

Awesome post unclmikl. I have given you plus rep points for paying it forward!!!!!!!

[unclmikl]

thanks Moe
Just trying to impart some of the knowledge i have learned. if i can help one person as you have helped me.we are all alot better off.

p.s. what is a plus rep points?

unclmikl

[Moe Bedard]

Np. It is the scale(right to the left of your location) in the right of your screen when you post. Kind of like forum frequent flyer miles, but here its just for helping out.

Take Care!

[Steve Donlin]

Do Scott, Nathan, Alex, Sheryl, Diana, James, Pernell, Jim, me, and 8 clients get any extra points for being in the office on Saturday?

[unclmikl]

thier are several things you can do to help accellerate your credit.first get your balances under 35% on your credit cards. this may seem overwhelming at first
but when you use more than 35% of your revolving credit it hurts your score more than it helps

*****pull your credit report *****and score
know where you are at
scour your report see if thier is anything that is innaccurate, unreported, wrong or frauduluent. and dispute them ITS FREE ITS EASY AND YOU CAN DO IT YOURSELF you just went through a loan mod.(thius will be a walk in the park)

1. where can you save money. for me i used to get my lunch delivered to my store everyday 6 days a week $7.00 a day now i buy lunchmeat bread and chips. i dont buy what i want. i but what i like that is on sale . i saved approx $100 month here. me and my wife have a great cell plan $100 a month unlimited calling for both phones. so we are going to cancel our $50 a month home phone

2.if you have been paying your credit cards on time(6 months minium) call the card issuer and ask for credit line increase. not so you can buy more stuff.but so you can drop your percentage of used available credit. because you already have credit with these people if they pull your credit it dont affect your score.

3 if #2 is not an option consider getting a secured credit card. where you put money in a bank acct and you recieve a credit card with a limit equal to your balance. when you use this option make sure you find a company that reports to all three credit bureaus.it will initially cost you a couple points for pulling your credit report. but if you use it correctly not going over 35% your money will be working for you.

4. BIG SECRET (PIGGY BACK CREDIT)
if you have a parent or loved one that trust you. that has an A plus credit rating and has a credit card that has a high credit limit with low balance ask them to put you on as an authorised user. just dont use it

5. if you have any cards you dont use (((never cancel them))) did i say NEVER( good)just wanted to make myself clear on this . cancelling a credit card only has a negative impact all the damage is done when you open the acct. when you close it you think your doing a good thing in actuality you are increasing the balance ratio on all your other lines of credit.sometimes its not good to have them dormant too long as some issuers will cancel them. so if you have them buy a tank of gas every six months and pay it off it two payments.depending on when your card issuer reports to the credit bureaus. so if you pay it all off. it may report a $0 balance like you never used it For this same reason it is not good to pay your balances in full every month.( i have a credit card that earns me 5% cash back on(gas) i spend $400 a month on gas so i pay all but $20 cause i want to earn $20 a month and pay at the pump. this card is not generating alot of positive credit for me (but its not generating negative either.

6. HOW YOU PAY IS IMPORTANT
never pay 30 days late as this is the number 1 killer.if your electric is due the same day as your credit card bill aND YOU CAN ONLY PAY ONE. IF YOU DONT PAY THE ELECTRIC THIER GOIN TO SHUT YOU OFF and if you dont paythe credit card you will be 30 days late and take 10,15 or 30 point hit(pay the credit card with your cash and put the electric bill on your credit card.

7.Always pay more than the minium even if its only $5 cause then it reports paid more than minium and this is better for your score. conversely if you have extra money(income tax return)or such and you have a new living room set financed dont just pay it off.
if you have a $3000 obligation on your credit report and you pay it off one month you may see a 5 or 10 point increase. if you take that same $3000 and break it into six payments you may see a 40 point increase in your credit score.(credit agencies want to see you have a history over a period of time making payments

the credit bureaus and some credit card companies have score simulators so you can see what is the best action is for you too take.

I will post more on this later
unclmikl

[Steve Donlin]

I will agree that suggestion #2 is an important aspect of personal credit management in two respects.

Your individual CC balances compared to your available credit limit on those CCs represents 30% of your FICO scoring. Therefore, paying down your balances ASAP, and/or increasing your available credit limit on each credit card are very important ways to increase scores.

With respect to suggestion #4, that little "loophole" has pretty much been eliminated from score increase criteria. In the last few years that method was used by unethical folks to fraudulently prepare otherwise unqualified people to obtain credit, mainly to buy houses and obtain mortgages.

• 	Fair Isaac Moves to Protect Lenders from Fraudulent Manipulation of Authorized User Credit Card Accounts
  	June 5, 2007 - (Minneapolis, Minnesota, USA) - Fair Isaac Corporation (NYSE:FIC) today announced that it will adjust its FICO scoring formula to ensure the continued reliability and predictive power of FICO scores. This action is intended to protect lenders and FICO scores from abuse of authorized user credit card accounts in order to purposefully misrepresent the applicants' own credit history to lenders and other businesses. The adjustment removes authorized user accounts from consideration by the scoring model in FICO 08, the newest version of the Classic FICO credit score which Fair Isaac expects to become available to lenders starting in September. "We will do whatever it takes to protect the reliability and accuracy of FICO credit scores for lenders, and to ensure lenders can continue to use FICO scores with confidence when making their most important customer decisions," said Dr. Mark Greene, CEO of Fair Isaac. "We will continue working with lenders, regulators and others in the credit reporting industry to end deceptive practices that fraudulently misrepresent consumer credit histories for profit." An authorized user is a person permitted by a credit account holder to use an account, typically a family member who is managing credit for the first time. Used legitimately, authorized user account information has helped both lenders and consumers by enabling lenders to use FICO scores when making credit decisions for consumers who are starting to establish a credit history. Fair Isaac's research indicates that the next version of its FICO scoring formula will deliver increased predictive power without considering authorized user accounts. Fair Isaac will work closely with lenders to help them implement and benefit from the FICO 08 score as it becomes available. As the company announced previously, lenders will be able to use the new version of FICO scores with minimal changes to their own operating systems. To make lender adoption easier and faster, the new scoring model will retain the same scoring range, score reason codes, minimum scoring criteria, inquiry treatment, and related model parameters as previous versions of the FICO formula.

[unclmikl]

YOU MAy HAVE NOTICED THAT IN THE FICO O8 SCORING MODEL THIS IS ELIMINATED BUT . not all scorers are using the new scoring model yet( as it will be available in sept ) and some may not for some time. my girlfriend and i have been together 3 yrs. she had a divorce where here ex trashed her credit(not unfamilar) i put her on my credit cards and in 14 month her fico went from 560 to 640 and still improving. granted its not all from piggy backing my credit as we have disputed and had 2 items removed and negative info is getting older. also this is very complex as you can reach different plateaus in your credit scoring as you are in a pool with others of similar credit histories ie foreclosures,charge offs and bankruptcies and as you improve your credit and become farther removed from past credit problems .you become a bigger fish and graduate to a bigger pool where you become a smaller fish (kind of like getting drafted out of college sports and now you have to prove yourself in the pros) i have looked at the fico 08 but havent completely broken it down yet but thier are things that will hurt you less and things that will help you more.
but i will cross thar bridge whenall three majors are using it.

?
say it takes six months before all three majors use fico08 (which may be generous)and your mom has a credit card with a 30k limit and $1500 balance would you want mom to put you on that account and possibly boost yout score 20,30 or 40 points or more in six months
which in turn could save you up to 2 pts on your next note in nine months.which will save you several hundred dollarson your note.


LET ME MAKE MYSELF EXPLICITLY CLEAR I STARTED THIS POST FOR PEOPLE WHO HAVE THIER LOAN MODIFRIED (FIXED FOR 5 YRS) WE DO NOT KNOW WHERE THE MARKET IS GOING TO GO.WE NEED TO BE IN A FIXED LOAN PRODUCT AS SOON AS PRUDENTLY POSSSIBLE.SO THIS MEANS WE SHOULD DO WHAT EVER IS LEGALLY POSSIBLE TO REACH THAT GOAL.YOU HAVE STAY ON TOP WHAT IS GOING ON TODAY THAT YOU CAN USE IN A POSITVE ADVANTAGE TO YOUR OWN SITUATION.
UNCLMIKL

[unclmikl]

does anyone know when all 3 credit bureaus are going to be fully using this.
fico8
i had just read that if you gained points in the past by piggy backing credit. those points you earned from piggybacking will be removed from you score and and will impact you negatively. this is for authorised users.
so i need to research some more but i believe if mom or dad have great credit and open up a joint acct with you then it will affect you positively.

[unclmikl]

ok that didnt take long
if you are added as a joint acct holder you will reap the benefits of piggy backing credit.

as an authorised user (AU) you are not responsible for payment as a joint acct holder you are responsible and thierfore you earn the positive credit points of the acct.

this was done in fico 08 so people wont rent out thier credit .
the credit reporting agencies have no way distinguishing your spouse or family members from mr smith in alaska due to privacy laws. so if you have a joint acct it a whole new level of trust.

as an AU you could rent credit get credit card with a 50k limit and never see the credit card and benefit from it(low risk to the credit landlord)

as a joint acct holder and you rent credit you dont ever have to see the card pull your credit report call the financial institution give them your info and have them send you a new card (high risk to credit landlord)

again thier are risk involved
you get dad to put you on his 100k card with 15k balance a positive vehicle for gaining credit.

if dad is in a fatal wreck next week you are now responsible for his debt on that acct

but if you do this you need to be smart about it. once you reestablish your credit and qualify for that 30yr fixd @5.25% its time to close that acct or be removed from it so when dad does pass from old age in 20 yrs and his credit card balance is now 20k. you dont want to be responsible for it
unclmikl

[KJCCAMC]

There are so many good posts on this forum but I think Moe should give you some plus rep points for this post too.

Keep them coming

KJCCAMC

[unclmikl]

THANKYOU KJ
I will continue to update this post as new loan products become available along with any info on rebuilding your credit.i just feel really strongly on this i dont want people to think that when they got thier loan modifried that they are all set. nobody wants to be in this same situation again in 5 yrs. we all must be diligent and proactive in finding a 30 yr fixed note that we are comfortable with.

[unclmikl]

MOE
Maybe we can put a new tool in the toolbox. for those of us who have been modifried into an adjustable rate. in what steps we should take in securing our long term financial interest in our homes. (post care). breakdown new loan products as they become available (dont know what kind of products are going to be spun off from the housing bill)and post our new loan offers so we can evaluate the pros and cons

[unclmikl]

well thier is a new monkey wrench to building credit. credit card companies are lowering credit limits.(amex lowered my limit to $1200 from $3000 i have never been late always pay more than minium. i did some research to find that cause of the market this is a new common practice.this throws off your debt ratio and further impacts your fico.

[Moe Bedard]

Originally Posted by unclmikl

MOE
Maybe we can put a new tool in the toolbox. for those of us who have been modifried into an adjustable rate. in what steps we should take in securing our long term financial interest in our homes. (post care). breakdown new loan products as they become available (dont know what kind of products are going to be spun off from the housing bill)and post our new loan offers so we can evaluate the pros and cons

Geez I'm late in relying here. I apologize.

Those are some great ideas and something I will build as soon as I am able. One of my goals was to make this a super site of home mortgage information for homeowners. Not just loan modifications, but everything you mentioned and more.

well thier is a new monkey wrench to building credit. credit card companies are lowering credit limits.(amex lowered my limit to $1200 from $3000 i have never been late always pay more than minium. i did some research to find that cause of the market this is a new common practice.this throws off your debt ratio and further impacts your fico.

And couple that with the fact that they are having trouble funding their operations. Not good at all for amex....

[revcarrie]

Moe,
I see this is an old thread but I was wondering if the CC compnaies are lowering the credit available like I heard on the news a couple of weeks ago which would damage the consumer's credit? The idea is to not allow them to be run up so much and then go BK. My husband and I only had one CC card and that was for my home business which I lost due to my disability. We haven't had a credit card for the last year and half. Would the fact that we don't have any at all, be a neg. on our record?

Also, now that our Mod is due to be affirmed on Monday and first payment on Dec. 1st, where is a good place to put savings these days or is it best to pay off the only other payment we have ....my van? We need to make some plans. the house is going to need some smaller things by next summer, sewer line and other much smaller things in the way of maintenance. Is there a safe place to put money now...in the house or aim for debt free or both?
Rev. Carrie

[unclmikl]

thanks MOE
i appreciate your site

[FacingNorth]

1. I have a Visa CC through my bank, and just noticed on the website that they have a Mastercard that I can apply for. If I apply for this and get accepted, but don't use the card - just to get my debt-to-available credit ratio better, is there a downside, i.e. could my FICO get lowered for having too many CCs? The Visa is my only CC.

2. I have a handful of consumer credit cards (like Sears, etc.) on my score that I haven't used in about 8 years, but I keep them open because I had heard that it's good for ratio (I'm not sure if that's for consumer cards, or just standard CCs though). Should I keep those open, or close them down. Also, would it be better to close them down before applying for the Mastercard mentioned in question 1?

Thanks.

[unclmikl]

suze orman says never ever close a cc all the damage is done once you open it.you should not let them remain dormant use once a year.
as to the credit card its not usually good to open to many accts close together as it looks like your desperate for credit
the best thing is to pay down the balances you have

[FacingNorth]

Thanks unclmikl, that's depressing to know. My wife suckered me into opening these cards so that she could save 10% at the register on $200 of clothes or whatever, and I really don't think that I want to make a habit of making small purchases at all of these department stores once a year, because if my payments aren't automated I tend to set the snail mail bills aside and then I could end up with 30 days past due credit hits on my report. So I guess I have to leave them open, though I really don't want to since that's leaving me that much more wide open to being a victim of identity theft with all of these open accounts floating around in databases that will probably end up on a laptop that gets lost or stolen at some point.

[unclmikl]

also the latest trend to hit credit cards. is that credit card companys are watching where you shop and if you shop at certain stores they consider high risk they will also lower your credit limit
BIG BROTHERS WATCHING YOU

[acesfull]

Originally Posted by unclmikl

thier are several things you can do to help accellerate your credit.first get your balances under 35% on your credit cards. this may seem overwhelming at first
but when you use more than 35% of your revolving credit it hurts your score more than it helps

*****pull your credit report *****and score
know where you are at
scour your report see if thier is anything that is innaccurate, unreported, wrong or frauduluent. and dispute them ITS FREE ITS EASY AND YOU CAN DO IT YOURSELF you just went through a loan mod.(thius will be a walk in the park)

1. where can you save money. for me i used to get my lunch delivered to my store everyday 6 days a week $7.00 a day now i buy lunchmeat bread and chips. i dont buy what i want. i but what i like that is on sale . i saved approx $100 month here. me and my wife have a great cell plan $100 a month unlimited calling for both phones. so we are going to cancel our $50 a month home phone

2.if you have been paying your credit cards on time(6 months minium) call the card issuer and ask for credit line increase. not so you can buy more stuff.but so you can drop your percentage of used available credit. because you already have credit with these people if they pull your credit it dont affect your score.

3 if #2 is not an option consider getting a secured credit card. where you put money in a bank acct and you recieve a credit card with a limit equal to your balance. when you use this option make sure you find a company that reports to all three credit bureaus.it will initially cost you a couple points for pulling your credit report. but if you use it correctly not going over 35% your money will be working for you.

4. BIG SECRET (PIGGY BACK CREDIT)
if you have a parent or loved one that trust you. that has an A plus credit rating and has a credit card that has a high credit limit with low balance ask them to put you on as an authorised user. just dont use it

5. if you have any cards you dont use (((never cancel them))) did i say NEVER( good)just wanted to make myself clear on this . cancelling a credit card only has a negative impact all the damage is done when you open the acct. when you close it you think your doing a good thing in actuality you are increasing the balance ratio on all your other lines of credit.sometimes its not good to have them dormant too long as some issuers will cancel them. so if you have them buy a tank of gas every six months and pay it off it two payments.depending on when your card issuer reports to the credit bureaus. so if you pay it all off. it may report a $0 balance like you never used it For this same reason it is not good to pay your balances in full every month.( i have a credit card that earns me 5% cash back on(gas) i spend $400 a month on gas so i pay all but $20 cause i want to earn $20 a month and pay at the pump. this card is not generating alot of positive credit for me (but its not generating negative either.

6. HOW YOU PAY IS IMPORTANT
never pay 30 days late as this is the number 1 killer.if your electric is due the same day as your credit card bill aND YOU CAN ONLY PAY ONE. IF YOU DONT PAY THE ELECTRIC THIER GOIN TO SHUT YOU OFF and if you dont paythe credit card you will be 30 days late and take 10,15 or 30 point hit(pay the credit card with your cash and put the electric bill on your credit card.

7.Always pay more than the minium even if its only $5 cause then it reports paid more than minium and this is better for your score. conversely if you have extra money(income tax return)or such and you have a new living room set financed dont just pay it off.
if you have a $3000 obligation on your credit report and you pay it off one month you may see a 5 or 10 point increase. if you take that same $3000 and break it into six payments you may see a 40 point increase in your credit score.(credit agencies want to see you have a history over a period of time making payments

the credit bureaus and some credit card companies have score simulators so you can see what is the best action is for you too take.

I will post more on this later
unclmikl

Hi Unclemikl

I like your info about building credit score. However I somewhat disagree with #7. If you have a 3k loan, instead of paying in off in one payment you suggest pay over 6 months. This would be good if the loan was no interest for 6 months, I understand the concept of creating a payment history but I don't like paying interest. I would rather raise my score 10 points and lower my DTI . Just my 2 cents.
Thanks for all the great info.

acesfull

[unclmikl]

aces go to equifax and look at a score simulator by doing the payments both ways.
then get back with me.
uncl

[unclmikl]

just wanted to give an update as i cleaned up my girlfriends credit report
before i filed my bk I removed my girlfriend from all my credit cards as an authorised user which was about 6k and accounted for 55% of her available credit. once she was removed I disputed those accts off her report as she was an au and was not responsible for the payment.

2nd she had a couple small credit lines jc penny and home depot $200 and $500 respectively that were joint accts with her ex husband that have not been used in six years. we closed these for obvious reasons
and to combat closing accts that were positive ($700 available credit(
we had asked her current credit card companies for increased credit limits which was $1000 so she got and extra $300 available credit.
then we paid off a honda 4 wheeler installment loan 3k

and then we disputed everything on all 3 credit bureaus
thier were incorect balances , paid accts showing deliquent , 2 old chargeoffs that were over 8 yrs old. and thier were a couple recent collections past 2 yrs that we made arrangements to pay in full if they would delete the acct from credit record

all this took my girlfriends credit from 556 to 771 in 5 weeks
it was unbelivable

she should be closing on our new hom within 2 weeks