Gift Card Scam Part 2 “Negotiations”

As promised, this is the end of the story about the man who received a letter in the mail from a Mr. Victor Milligan of Cambridge, MA, instructing him to cash a check (that turned out to be bogus), purchase gift cards, and then to send the gift cards to Victor  Milligan for a supposed commission.

The check bounced, and the victim’s Bank of America account became overdrawn, which prevented the man from having funds to pay rent.

So here’s what happened as a result.

I spoke with the branch manager directly on the phone on behalf of this 84-year old man. I expressed my horror and dismay that a customer service representative would cash a check from a third party that was greater than the funds available, and without holding the check to clear first. I said BOA had to take part of the responsibility.

I also expressed my unhappiness about the assistant manager confiscating every last dollar the man had, including the cash he had in his wallet, so that he was unable to pay rent for April. I asked the manager to make this right by releasing funds to the man in the amount due for rent.

I have learned that the best way to negotiate a settlement is to go to the top. What a customer service representative won’t or can’t do, a top executive will do.

For those of you working on negotiating settlements, I would like to point out that the assistant manager was only interested in helping the Big Bank–not the victim of the crime.

I’ve learned that the higher up you go, the nicer the person is.

The ending of this story is that the Bank of America manager wrote a cashier’s check to the man for his April rent. It is a loan of sorts, to be paid back at $300 per month. I thought that was fair and very decent of the manager.

The BOA manager showed himself to be caring, merciful, and ethical. I hope he also trains his customer service representatives on how to handle an odd, uncharacteristically large out-of-state check that is 600 percent higher than the balance in the account.

This incident, along with a copy of the letter, has been reported to the local police in California who is coordinating with the police in Cambridge, MA. I hope this scam is shut down pronto!

If you have experience with a negotiation, I would be very interested in hearing about it.

Stay safe from scams out there, everyone! The criminals are working overtime now.

Extension Granted for Credit Disputes and Credit Requests

If you are requesting your free annual credit report, or you are disputing an inaccuracy with either a credit bureau or a creditor, please note this change in response time.

Previously, they were required to respond to your letter within 30 days. Now, due to the pandemic, the Consumer Finance Protection Bureau has extended that time to 45 days.

With so many now working from home under a Shelter Order and others taking time off work due to illness, the CFPB has determined that it is appropriate to extend the response time.

I see this as both bad and good news for people disputing negative credit. It could take longer to receive responses, so more patience is required on your part. However, with such pressure, might creditors be more lenient and less skeptical in approving requests to delete negative items? I don’t know, but it’s a thought.

Additionally, for those who need to negotiate settlements, I believe you have more power to ask for a low settlement now. With people out of work and unable to pay anything at all, receiving an offer for money would be most welcome–even if it is a low offer.

Remember, to get the verification and pay the right way according to Chapter 15 if you Repair Credit 3Dwant that negative account legally removed from your credit report. Do not miss out on Repair Your Credit Like the Pros if you want the results that the professionals get.

If you want the CFPB announcement, send me an email. I was unable to link to it.

Gift Card Scam

He thought it was a legitimate offer to get paid to be a mystery shopper. He never expected to get scammed.

True story. Happened last week.

He received a letter in the mail with a check for $2,495. The instructions said to cash the check, then use the money to buy four gift cards: two $500 American Express, one $400 Walmart, and one  $500 CVS Pharmacy.

After purchasing, fill out the evaluation form rating the customer service he had received. Then mail the surveys with the gift cards to the address provided, and keep the extra $595 as his commission for work done.

Do this within 3 days.

He cashed the check at Bank of America, who freely handed him the money without vetting the check. He then purchased the gift cards with the cash and kept the extra cash in his wallet. But then something happened.

Just as he was to mail off the gift cards to the perpetrator, he said, “The Holy Spirit spoke to me and said to stop, don’t do it.” He listened to the inner voice.

The next day, he went back to Bank of America to confirm the check had cashed; and Lo and behold, the banker was waiting for him. His account had been flagged and drained of all his funds.

The check was bogus. Neither he nor Bank of America had noticed the fine print “non-negotiable” on the back of the check. BOA did not call to vet the uncharacteristically large check. Neither did BOA hold funds for the check to clear. Now BOA was out $2,495, so in response, they seized all of the money left in his checking account, about $400. He was left with a negative balance.

Bank of America demanded he pay back the negative balance, but they would not take the gift cards. The man had no other money. The BOA manager grabbed the cash out of his wallet and quickly filled out a deposit slip. Now the man had nothing to live on but two quarters in his pocket.

The man went back to the retail stores to return the gift cards, but gift card are non-refundable.

His rent is due tomorrow and he has no money and a negative balance on his checking account.

Bank of America told him when his next auto-deposit of his paycheck arrives, they will seize the money to pay themselves back for the bogus check they so willingly cashed.

The man has gift cards he can use to purchase food and gasoline. Thankfully, he hadn’t mailed those off to the scammer! But how will he pay rent? Will his landlord accept a gift card in lieu of a rent check?

I’ll post the end of the story when it plays out. Meanwhile, don’t fall for the gift card scam!

New Bill Would Suspend Negative Credit Reporting During Covid-19 Crisis

Thank you, Senators Brian Schatz (HI) and Sherrod Brown (OH) for  introducing a bill that would protect people’s credit scores during the coronavirus outbreak.

If this bill passes, creditors could not report late payments or other negative items to the credit bureaus during this time of economic hardship. While people are scrambling to make ends meet during layoffs and reduced pay, they would not have the burden of worrying about their credit scores on top of everything else.

Additionally, free credit reports would be made available for a year after the crisis.

If you agree with this bill, you can click “like” at  the bottom of the Senator Schatz’s page here.

Why You Cannot Get 0% Mortgage (Fed Rate Cut Doesn’t Apply to You)

Sunday, March 15, 2020, the Federal Reserve Board cut rates to 0% for short term loans. A short-term loan could be bank-to-bank for as little as one day. They could be short-term business loans. Could it be your mortgage? Let’s think about that:

Would you like to refinance your $350,000 mortgage at 0% for one day and be obligated to pay it back in full tomorrow? Or next week? Or next month? No, of course not. A mortgage is a long-term loan. This rate cut does not apply.

However if you have a home equity line of credit with an adjustable rate, then you can expect to enjoy a low (not zero) interest rate.

Why Mortgage Rates are Up, Not Down

In the last 10 days, mortgage interest rates have risen dramatically. How odd, right? Looking at the market, there is no reason a rate should have spiked from 3.25% to 4.25% in a matter of days. Obviously, something else is going on.

With mortgage rates at historic lows, all lenders have been deluged with a massive number of refinance applications. Processors and underwriters are working 60+ hour weeks. Loan officers are pitching in doing processing work. Everyone in the mortgage business is maxed out. I’ll explain it this way.

Let’s say you had a food truck. You sold tacos at such a cheap price, that the line for dinner was a mile long. You saw that it would take until midnight to serve everyone a taco dinner. Would you continue to advertise 50 cent tacos and bid more people to get in line? No, that would ruin your reputation, because you can’t handle all the customers you have already.

Similarly, lenders have had to stop the avalanche of refi applications. This was accomplished by raising rates–not so much that people still couldn’t buy a home, but enough that it wouldn’t make sense for many to refinance.

We Expect Rates to Get Better Again

If you lost out on the opportunity to get that super low rate, then get your application in with all paperwork called for. Then when the current book of business closes and lenders can accept more refinance business, you will be ready to lock and go!

The second wave of refinances will happen–and it could be as short as a one-day window to lock before the pipelines are full again and rates are artificially raised.

Will we see rates at another historic low? I don’t know. My advice is to get ready and when you see a low rate that makes sense, lock and don’t look back. People who get too greedy, expecting an interest rate that cannot and will not happen are the people who lose out altogether.

Keep in touch with your mortgage broker. A broker can shop lenders for you to find you the best loan program at the best pricing he or she has available.

And now I need to tell you I am licensed to do mortgage loans in California and Washington states. NMLS license 1284134. Thanks for reading and stay healthy and safe.


Repair Your Credit Like the Pros

Due to the economic effects of the coronavirus, you can borrow money to buy a home at the lowest interest rates we’ve seen in many years. Now is the time you have more buying power, because with low rates, your payment is lower and you qualify for a better home.

Home owners are refinancing and saving tens of thousands of dollars. Many are shortening their loan terms to own their homes free-and-clear sooner.

You can be one of the people who take advantage of our current market if your credit qualifies. Credit it king. A high credit score has power and earns respect.

If your credit has issues, if your score is low, then now is the time to take control. No matter what your past has been, today starts the future.

Creating good credit and achieving a high score is in your hands. Embrace hope! Get to work repairing and building your credit like the pros. Others have done it, and you can, too.

A. Roberts wrote:
Three months ago my scores were 595 (Experian) and 606 (Equifax.)
Today my scores are 715 and 647. Thanks a million!

Available on Amazon


Happy Valentine’s Day to Your Credit Report

Time to show some love to your credit report! Here are five tips how:

  1. Pay down balances below 30 percent to give your score an instant boost.
  2. Be a transactor, not a revolver, for a better score. A transactor pays the bill in full each month; a revolver carries a balance from month-to-month.
  3. Use your longstanding credit cards every six months to prevent them from being shut down due to inactivity, which usually results in a loss of positive points on your credit score.
  4. Dispute $0 balance collections to get them removed from your credit report. Oftentimes, they are reporting with inaccurate information which is illegal. Also, if an account was sold to collections, the original creditor cannot show a balance owing, because they can no longer collect on the debt. Don’t ask for the balance to be corrected; use that inaccuracy as an opportunity to remove the derogatory account altogether. By law, a credit report must be 100 percent accurate.
  5. Get your home loan before buying a car. Don’t make the bad mistake of buying a car before a home!

Above all, do not charge more than you can afford to pay when the billing statement arrives. Spending beyond your means is no way to show your finances any love.

Love your credit and you will receive love back in the form of saving money on interest and insurance premiums. If your credit needs some help, pick up a copy of this guide here.

News: Credit Score Model is Changing

The way credit scores are calculated is changing this summer, and you need to be prepared.

Millions of Americans will see their scores go down, while millions will see their scores go UP. Which side of the seesaw will you be on?

By preparing now, you can be one of those who are rewarded with a higher score.

A top tier credit score qualifies you for lower interest rates and lower insurance premiums.

Who Will Be Rewarded with Higher Credit Scores?

Consumers who carry low credit card balances will receive a score increase. Paying balances in full when the billing statement comes in will also be rewarded.

Who Will Be Penalized with Lower Credit Scores?

Consumers who carry a high balance-to-available-credit will be penalized. Especially, if they make partial payments and carry a balance from month-to-month. When you can’t pay the balance, it is seen as spending beyond your ability to pay.

The Exception

The balance-to-limit ratio applies to revolving accounts. It does not apply to installment loans (car loans, student loans) or to mortgages.

Action to Take Now

Now is the time to lower your credit card balance-to-limit ratio. It’s also time to take stock of spending and create a budget, as needed.

For more information on achieving a top tier credit score, please see here.

Is Your Credit Score Above Average?

The average credit score is 703.*

In the mortgage home buying world, 703 is meh. It’s good enough to get a conventional loan (which is better than FHA), but a 703 score does not qualify for the best and lowest 30-year fixed rate.

For the best interest rate, you need a score of 740+. Some lenders will reward you with an even better rate if your score is in a 780 tier or 800 tier. Those are the lenders that cater to the creme de la creme borrowers.

In 2013, the average credit score was 691. Scores have been trending upward since then.

The graphic at top right shows the average score by age group.

The state with the highest average credit score is Minnesota at 733.

The state with the lowest average credit score is Louisiana at 677.

Some people have taken the steering wheel and boosted their scores by 50, 80, and even 100+ points. I’ve seen a score increase by 58 points in two weeks when the person paid down two high balance credit cards.

There are several ways to increase your score, and it all starts with paying every bill on time–every time.

The fastest way to increase your score is to lower your balance-to-limit ratio.

One way to hurt your score without knowing it is to open a new revolving credit card when you’ve already got two good cards open.

Another way to get blindsided is by not monitoring your automatic payments. I saw a person’s score knock him down by 50 points, because he didn’t know his student loan had been sold and his bank didn’t send the auto-payment to the new creditor. When he called to get it straightened out, the representative told him not to worry, they weren’t reporting him as late. But that turned out to be a lie. His credit report showed a brand new late payment, which cost him thousands of dollars in interest payments.

Having a high credit score also affects your auto insurance premium. Many drivers have no idea they are being charged more on their auto insurance because their credit scores are not top tier.

We are now in 2020. This is the time to take control of your credit. Grab a quick, easy read here so that you are smart about credit. Being smart about credit is being smart about money.

I don’t know anyone who has money to waste, do you? Make 2020 your year for excellence!

*(2019 second quarter, FICO8 Scoring Model) Experian Source here



2020 Forecasts in Real Estate and Mortgage Rates

All the experts have weighed in with their predictions for 2020. Here is a quick summary of the consensus.

MORTGAGE INTEREST RATES will remain low and fairly flat with daily and weekly ups and downs according to the market.

The 30-year fixed rate for people with excellent credit (740+ score) is slated to be about 4%, but if you go to a mortgage broker instead of a direct lender, you may be able to get 3.75%. This is because brokers shop wholesale for you, which is a big advantage over direct lenders’ retail rates. APR (annual percentage rate that factors in certain costs) would be about 3.85% or 4.125%. APR will vary according to fees and interpretation of the APR law.

HOME REAL ESTATE VALUES will increase moderately, partly because the low interest rates makes for more affordability. In many areas, there is an increased population of home buyers, which also drives up prices.

Spring is the most popular time to buy and sell real estate, so if you purchase a home now in winter, chances are that you will pay less than if you wait a few months.

BOTTOM LINE FOR YOU is that now is an excellent time to become a home owner. Or, if you already own a home, it’s an excellent time to move into one that is more suitable to your needs. You can get great loan pricing and increase your wealth through real estate.

Have a wonderful and prosperous 2020. Happy New Year!