5 Surprising Credit Report Errors You Must Fix

In a recent study, 19 percent of American consumers who reported finding an error in their credit reports opted not to dispute the error, even when they were offered $5 to file the dispute! Why not? Well, some said they thought the error was too minor to impact their score, while others said the dispute process seemed too difficult to tackle.

The fact is, when you’re trying to qualify for a home loan, some of the items on your credit report that can pose a threat to your home finance plans might surprise you. Here are 5 surprising credit report entries you absolutely must fix, especially when you are in the process of buying or refinancing a home.

1. Account balances you recently paid down or off. If you’ve just finished paying a bill down or off, you might not dispute the elevated balance that remains on your credit report because it’s not actually an error, per se. But the whole point of paying the balance down was to bring down your credit utilization ratio, which is a heavily weighted factor in your overall credit score.

Correcting the actual balances of your outstanding bills downward to account for your recent pay-down efforts poses such a large potential improvement impact for your credit score that it might even be worth paying your mortgage professional the $30 to $50 it will cost for them to initiate a Rapid Rescore, which can update your reports to reflect your slimmed-down balances in about 72 hours, compared with the 30 to 60 days you’d expect to wait to see results from a traditional dispute or update.

2. Incorrect former addresses. Of the 19 percent of consumers who spotted an error on their report in the study, nearly 40 percent of those errors were in what the credit bureaus call “header data," things like the consumer's previous street address. Many elected not to dispute these sorts of line items because the error doesn't seem like it would impact their credit score. While an inaccurate address might not have much to do with your score, it can still wave a red flag, signaling issues that can foul-up your mortgage application.

A misspelling in an otherwise correct street name should not cause you grave concern. But if the previous addresses listed are in the wrong city or state, or otherwise come out of nowhere, they might signal that someone has used your name and/or social security number to obtain credit at a different address. Credit card fraud and identity theft are difficult to unravel when you’re not seeking credit; they are much more complicated to resolve when the credit stakes are high and the underwriter as picky as they are in the course of applying for a mortgage.

Also, current and previous addresses that conflict with where you’ve told the lender you live(d) can raise suspicion that you might be buying a second or rental home, rather than the owner-occupied home you say you’re trying to buy; that can provoke a lender to demand that you ante up more down payment dough, make you jump through greater hoops to prove your true address or even stop you from qualifying for the loan altogether.

3. Bills that were never yours in the first place. As with completely bizarre former addresses, accounts listed on your credit report that you never opened in the first place can be a red flag that tips you to the fact that someone else might have stolen your identity and opened a credit card or account in your name. If you find one of these items on one credit bureau report, but it’s currently closed or has a zero balance, you might be tempted to let it slide, thinking it can’t move the needle on your credit score. In reality, though, if someone is using your identity to obtain credit and you fail to dispute that the bills belong to you, they might continue to use it, which can cause you real problems. Of course, if the bills weren’t paid on time or have been placed in collection, disputing the accounts’ presence on your credit report is a must.

If they were paid on time every time, though, the analysis might be different. Unfortunately, instituting a fraud-based credit freeze or fraud alert on your credit reports at the same time as you’re applying for a mortgage can complicate your own loan qualification process significantly. If you find yourself in this situation, carefully scrutinize the rest of your report and the credit reports you receive from the other bureaus to detect whether other fraudulent accounts exist, then consult with your mortgage professional on exactly when and how you should go about disputing the accounts which weren’t actually yours.

4. Limits listed as lower than they really are. As with closed accounts that were never yours in the first place, accounts that are listed on your credit report as having limits that are lower than they really are might seem like a battle not worth fighting. But the fact is that only two inputs go into the credit utilization ratio that comprises about 30 percent of your FICO score: how much credit you have available, and how much credit you have used. So, if you have account balances that show up on your credit reports as lower than they actually are (i.e., that you have less credit available to use), that inaccuracy can skew your credit score and screw up your mortgage qualifying efforts. Big time.

5. Derogatory items that should have aged off. Very few of us are perfect, and you might have worked hard to pay your bills on time in an effort to overcome a credit ding from back in the days. Although the impact a derogatory item has on your credit score wanes over time, it’s still your right (and your responsibility) to make sure negative items disappear from your credit report when they are supposed to – that’s 7 years for a late payment, 10 years for a bankruptcy. If you are still seeing credit dings on your report after more than the relevant time frame has elapsed, dispute them and claim the rehabbed credit (and score) you’ve since earned.

It’s not very common that credit report disputes cause dramatic changes in credit score, but again, many borrowers aren’t disputing these sorts of items they don’t realize could make a difference in their homebuying or refinancing prospect.

Beyond that, if you’re close to a credit tier cutoff, like 620-640 or 740-760, depending on your loan type, even a few points’ difference can be the difference in qualifying for a home or not, or paying a higher mortgage interest rate for the life of your loan. For these reasons, it behooves every potential borrower to be proactive in spotting and correcting these 5 must-dispute errors.

Contact The Mortgage Mark with any questions!!!

mark@themortgagemark.com

www.themortgagemark.com

The Mortgage Refi Boom Of 2011 Has Officially Begun

Mortgage rates are dropping. There's an MBS winning streak going on.

Here Comes The Refi Boom Of 2011

We're on the precipice of something big. A wave of uncertainty about Greece and its debt, plus weaker-than-expected economic data at home, has dropped conforming 30-year fixed rate mortgage rates to levels not seen since December 2, 2010.
Click here to get a rate quote.
It's been 8 straight weeks that mortgage rates have dropped. 8 weeks. Not even last year's epic Refi Boom produced a winning streak of 8 weeks. This year's streak is historic.
The 30-year fixed rate mortgage now averages 4.49% nationally. It's down 42 basis points -- or 0.42% -- since early-April. For every $100,000 borrowed, that yields a monthly payment difference of $25.24.
Adjustable-rate mortgages have shed even more, giving back 50 basis points since the streak began.

Mortgage Rates Vary By Region

Relative to earlier this year, it's an excellent time refinance a home or buy a new one. Mortgage rates are down and may even be lower than what Freddie Mac reports in its survey. This is because Freddie Mac gives a national average. Locally, rates may be lower or higher.
Click here to get a rate quote for your area.

• Northeast Region Average : 4.49 with 0.6 points
• Southeast Region Average : 4.52 with 0.8 points
• North Central Region Average : 4.52 with 0.6 points
• Southeast Region Average : 4.52 with 0.6 points
• West Region Average : 4.45 with 0.8 points

You'll notice that, in the West Region, rates tend to be lowest and fees tend to be highest. This is because loan officers in the West Region tend to quote loans with "1 point" standard. This results in lower rates for borrowers and applicants, but higher fees.
The opposite is true in the North Central Region where fees tend to be lower, and rates tend to be higher.
Neither system is better or worse -- choose the setup that works best for you. If getting the absolute lowest mortgage rate is more important to you than getting the absolute lowest fees, for example, just ask for it. Your loan officer should be able to walk you through your options.
Click here to get a rate quote.

There's a Refi Boom Starting. Don't Watch It Pass.

Mortgage rates look like they'll fall some more, but don't sit by and wait for something better.
History has shown that mortgage rates can -- and do! -- change quickly. And because rates are unnaturally low to begin with, once they start to worsen, they should worsen in a hurry.
Exploit today's market while you still can. Click here to get a rate quote and be a part of this year's blooming Refi Boom.

Contact The Mortgage Mark with any questions!

www.themortgagemark.com

mark@themortgagemark.com

Fannie to inspect delinquent homes

If you happen to see a contractor walking around your house, taking pictures, don't panic. It's just your lender "inspecting" your property.
According to new rules announced by Fannie Mae this week, mortgage servicers will be required to "order" a "property inspection" no later than 45 days after a homeowner misses a mortgage payment. "The servicer must continue to obtain property inspections every 30 days thereafter" until the delinquency is resolved.
If the servicer determines that the property is abandoned "the servicer must perform an interior inspection upon confirmation of abandonment," according to Fannie's guidelines, which go into effect on Sept.1
Fannie's current policy requires inspections only when servicers are unable to reach delinquent borrowers or when they determine the borrower isn't willing to try to work out a solution. But the inspections are not required until the mortgage is 135 days delinquent or the servicer begins foreclosure proceedings.
The new policy is an extra effort to try to protect Fannie's investment in these assets. But has Fannie heard of the widely reported stories of banks breaking into people's homes to "inspect" and "secure" them, claiming the homes are vacant when they are not?
For example, there is the story Nancy Jacobini in Orlando. Late last year she called 911, desperately asking for help as a man tried to break into her house. After police arrived, she learned that the man was a contractor who wanted to "secure" her home on behalf of her lender, Chase. The inspector said he thought the house was vacant. A Chase spokeswoman has told me this was an isolated mistake and that they have apologized to Jacobini.
Speaking of mistakes, you might want to know that some of these lender/servicer break-in cases that have been reported over the last two years involved homeowners who were current on their mortgages.
But let's get back to the new policy.
First, it's important to understand how this works and the number of people involved in this process. Servicers don't hire and train their own inspectors. They hire a property management company, which then hires contractors to go out and do the "inspections."
The question is how does the servicer's inspector determine whether a home is vacant before securing it? Do they peek through your window? Do they assume your home is vacant if you haven't mowed your grass and happen to be on vacation?
A Fannie spokeswoman says the process involves various steps and it includes checking to see if utilities are on, if there are people in the house and if there is furniture in the property.
But how do you know if there is furniture in the property before you enter the house?
The spokeswoman declined further comment beyond what is explained in the guidelines.
According to the guidelines, "The servicer must be able to obtain a signed copy of the inspection report that first reported the vacancy, in which the person who actually performed the inspection certifies that he or she has personally gone to the property location and confirmed that the property is vacant."
To avoid any misunderstandings, on top of paying your mortgage you should probably make sure you pay the utility bills before you go out of town.

Contact The Mortgage Mark with any Questions!!

mwilkins@capitalfmc.com
www.themortgagemark.com

5 Need-to-Knows Before You Move Into the Neighborhood

5 Need-to-Knows Before You Move Into the Neighborhood

Buying a home can feel like the most intense research project ever- to make a smart buy, you’ve got to get educated about mortgages, learn how to read a contract, do a deep dive into property condition issues or homeowner’s associations and pay attention to what’s going on in the economic news and the real estate market. But there’s at least one more area wise buyers don’t neglect: neighborhood research.

We know, at a gut level, what kind of neighborhoods we like - tree-lined streets, convenient shops, etc. and so forth. But what specific details should you investigate before you buy or move into an area? Here are 5 items you definitely need-to-know before you move into a neighborhood:

1. Details on Shady Dealings. Most of us think we know which sides of the railroad tracks, so to speak, have high crime rates and which are supposedly safe. But before you buy a home or move into a neighborhood, it behooves you to actually do the research and see whether or not your beliefs are accurate. Check out the Megan’s Law databases to see where registered sex offenders may live, especially if you have young children or other reasons to be particularly worried. Google your address, which might pop up details such as whether your intended home has ever been a meth lab, among other things.

And, whatever you do, don’t forget to tap into Trulia’s new Crime Maps – in a number of metro areas (which will be constantly expanding), you can view uber-detailed (and sometimes surprising!) crime data that is uber-relevant to you. If you’re trying to decide between two homes in different parts of town, you can even toggle back and forth between the neighborhoods to compare them! For example, some neighborhoods have a spike in car break-ins after people leave for work. Or maybe one side of your street-to-be has a significantly higher rate of violent crimes than the other.


That’s the kind of thing you should find out before you move in, don’tcha think?

2. How Recession-Resistant it is. Let’s face facts: some neighborhoods, cities and states have fared better than others over the course of the recession. An area’s proximity to job opportunities, saturation with troubled subprime loans and the amount of housing supply (vs. demand) all have something to do with whether prices plummeted or have held up over the last few years.

Sometimes, a neighborhood’s recession-proofness (or -proneness) is obvious: if the street on which you’re house hunting is riddled with ‘For Sale’ signs (and foreclosure riders on top of them), or you know for a fact that the home you’re buying is a short sale for which the sellers paid double your price just 5 years ago, you might be in an area that has been hard hit. Also, if your neighborhood has a sky-high rate of price reductions or it is much less expensive to buy than to rent a home in your area, these are other indicators that the recession might have hit your district pretty hard.

The fact of the matter is, some of the hardest hit neighborhoods are where the best deals are to be found, so I’m not necessarily suggesting that you shy away from buying in such an area. But do know that the harder hit areas might take longer to see an uptick in home values, too, so the harder hit your neighborhood was by the real estate recession, the longer you should plan on staying put before you buy, to make sure you don’t end up needing to sell and stuck in an upside-down home. While a 5 to 7 year plan might make sense in an area where the real estate market has been pretty robust over the last few years, you might want to be okay with planning to hold your home upwards of 10 years before buying in a foreclosure-riddled area (and you might also want to make absolutely sure you’re very happy with the deal you’re getting).

On the flip side, the more recession-resistant your area has been, the more likely you are to encounter sellers with less flexibility on pricing or even, gasp!, multiple offers!

3. The Neighborhood’s Flavor. Is the area you’re considering a hot spot for outdoor adventures and family events at the park, or chi chi restaurants and wine tastings at the museum? Find out by pulling up some listings on Trulia and scrolling down the see how others who have lived in the area have rated and reviewed it.

Also, take a look at NabeWise- it’s only available for about 10 large cities right now, but it’s got a super useful function where you can search by city and what’s important to you (like being in a trendy neighborhood, or one that’s got ample public transportation) and it’ll surface neighborhoods which might be a good fit for your values.Neighborhoods are even ranked based on prestige and how beautiful residents are (the latter of which I find fascinating - but more as a measure of where the raters’ heads are at than of anything you must include in your neighborhood fit equation!).

4. Where are the hot spots? Before you buy or move into an area, equip yourself with a knowledge of where all the stores, farmer’s markets, parks, restaurants and other hot spots your family will want to use are located vis-a-vis your home-to-be. (Hint: your local real estate agent is a fabulous source for this kind of information - they are especially gifted at knowing where the good food and shopping is!) Your Trulia Mobile App will alert you to nearby haunts that have Yelp! reviews; also, your neighbors-to-be can be a great source of this sort of information - knock on doors and ask for their recommendations.

It also makes sense to search the web for the various sorts of things your family is into, and your new neighborhood’s name. An internet search for running trails in my neighborhood is how I found out my house was just a couple of blocks away from a largely hidden lake we now visit regularly. Then, drive around and see what you can see - or find someone to drive for you. Once, when I moved to a new town, I marched myself onto a city bus, sat behind the driver, told them I was new in town and asked them to point out things they thought I needed to know. I got an hour long tour through three neighboring towns - for $1.25!

5. What the neighborhood looks and feels like at different times of day/different days of the week. Have you ever visited a Sunday afternoon open house when the sun was shining, birds were singing, and charming neighborhood rugrats were rolling their hoops up the street? (Okay - that was a century or two ago, but you get the gist.) Then, you come back a couple of weeks later for your inspections at dusk and find those same rugrats (or their parents!) spraying graffiti all over “your” garage, the neighbors’ underpants flapping on the line in the front yard and the other neighbors’ music blaring? File that under disappointing.

The nature of a neighborhoods changes - sometimes dramatically - before and after the sun goes down. Also, if you visit a home during the week or when it’s cold and rainy out, the street will undoubtedly be busier and noisier - more reflective of the extremes you should be aware of - on the weekend or when the weather is grand. So, before you buy, go see the place in sunlight and after dark, during the week and on the weekend. And, again, there’s nothing wrong with knocking on the neighbors’ doors, telling them you’re thinking of buying, and seeing what kind of insider information you can glean from them!


Contact The Mortgage Mark with any questions!!

www.themortgagemark.com

mwilkins@capitalfmc.com