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Why Would a Mortgage Loan Officer Do Credit Repair?

The latest blog post from the president of Phoenix Credit Consultants:

This weekend, I read a “LinkedIn” article written by an old friend who is in the investment capital business. In it, she talked about a client of hers who ran a carpet cleaning business. In this carpet cleaning business, the owner “did it all”, it was him and his carpet cleaning truck, hustling from job to job, pausing where necessary to answer his cellphone, to book appointments for existing customers or to sell his business to new customers.

Anyway, the carpet cleaning businessman had an accident and broke his leg. He was forced to hire someone else to cover the appointments that he had booked while he recovered. During his convalescence, he was able to devote his time to marketing his company properly and his business grew. He found that he had been spending his precious time working “IN” his business, instead of “ON” his business. Oh yeah, by the way, the carpet cleaning guy was calling the investment capital firm to talk about financing for additional carpet cleaning trucks and equipment – his business was growing.

After reading this article, I started to think about the mortgage loan officers that the credit restoration company I work for deals with every day. I often encounter loan officers that say, “Credit Repair? Oh, I do that myself.”

I have often wondered, why would a loan officer choose to do this additional work? This additional work, mind you, for which they don’t receive any additional compensation.

I have been able to formulate 3 reasons, in my mind, why they do this:

1. They don’t trust Credit Repair Firms:

Many loan officers have been ‘burned’ by credit repair firms. They have referred their customer to a credit repair company which represented that they knew what they were doing. The credit repair company took the customer’s money and never did the work. Or, worse yet, the credit repair company did the work, but steered the client towards another mortgage brokerage. (Here’s a tip: Always do your due diligence. There is, at least, one local credit repair company that a local mortgage company has an ownership interest in. No, it’s not Phoenix Credit Consultants.)

2. They think that the work is easy, that it speeds the process up if they do the work themselves:

Loan officers have access to software like “Credit Expert” that analyzes a client’s credit report and makes suggestions as to a score increase that might be achieved if a client takes certain steps, like paying down existing accounts.

Sometimes, the work that needs to be done is “easy.” Oftentimes, a client who is referred to us who simply needs to pay down the balances on existing accounts. In those instances, we often explain to the client what they need to do, without charging them a cent.

But why would a loan officer spend their precious time doing this work, especially when there is a trusted alternative that will do the work for them?

Reputable, trusted credit repair companies do exist. (Again, do your due diligence.) These companies do the work that the loan officer is doing for them, at absolutely no cost to the loan officer or his company.

3.  They are concerned that the “cost” of credit repair will keep their customer from being able to close on a loan:

Many customers who shop for mortgages have saved ‘just enough’ for a down payment and the costs associated with a loan. Many loan officers surmise that if the borrower takes on the additional burden of paying for credit repair, they aren’t going to be able to have the funds to proceed with the loan when they complete the process of repairing their credit. They conclude that if they themselves help the client with the credit repair, they will save the client the money they need to close on the loan.

Here’s what they miss: Professional credit repair, properly done, doesn’t cost…It pays.

When a mortgage client’s credit is repaired properly, they will not only qualify for a mortgage (perhaps even for a better, cheaper mortgage), but they will also save on their homeowner’s and auto liability insurance premiums. More importantly, those customers who have ‘just enough’ for a down payment and the costs of a loan, are the customers who are the most likely to be required to have PMI – the savings on that insurance alone will most likely more than offset the cost of credit repair.

So, think about it. Are you spending time working “IN” your business that you could more effectively spend working “ON” your business? Does it really make sense for you to contribute your free sweat equity towards the cost of your client’s new home?

Tune In This Sunday!

We’re back!

Tune in at 3:00 pm CST this Sunday, February 21st to hear PCC on The Gerald Realty Show on 550 KTRS!

We love being a part of this group of experts!

Topics this week include why we don’t recommend “do it yourself” credit repair!

PCC Has Helped My Clients

Your credit score can have a major impact not only on your ability to get a loan but on your interest rate as well.  If you need a little help understanding and working on your credit, I highly recommend Phoenix Credit Consultants.  They have been tremendously helpful to some of my friends and clients.

Christine E., Mortgage Professional

Your Rights Regarding the Reporting of Your Credit

The Fair Credit Reporting Act was enacted by Congress in October 1970. It was designed to provide protection for consumers against abuses from the credit reporting companies. (There are three big national companies: Equifax, Transunion and Experian.)

One of the purposes of the law was to level the playing field between consumers and the credit reporting companies.

Under the law, credit reporting companies, or “Bureaus” as they are called in the lending industry, are required to follow certain rules and fix mistakes contained in the credit reports that they create.
The law also creates certain remedies, including the right to sue for damages, if the bureaus don’t do what they are supposed to.
Here are four things that everyone should know about the Fair Credit Reporting Act (FCRA):

 

1. You have the right to know the information contained in your credit report.

 

The act requires credit reporting agencies to give you FREE access to the information they have collected about you once every 12 months.
You can obtain these reports either by writing to each of the individual credit bureaus or on the internet at AnnualCreditReport.com.
2. If there is an error on a report, there are steps you can take to fix it.

 

You have the right to dispute information contained in your credit report if that information is not accurate.

The FCRA requires that credit reporting agencies have reasonable procedures in place that that ensure the accuracy of the information that they report.

That being said, errors can, and do, show up on people’s credit reports.
When a credit bureau is made aware of a potential error, the law requires that they conduct an investigation.

The law says that a credit bureau has 30 days to look into your dispute, based on the information you provide to it.

If the dispute is not verified within 30 days, then that individual bureau is required to delete that item from the credit report.

If you have properly disputed an inaccurate item on your credit report and the bureau refuses to take action, you should consult a lawyer. The FCRA gives you the right, under proper circumstances, to seek appropriate remedies in a court of law, including damages and attorney’s fees.
3. Negative information on your credit report is subject to a time limit.

 

You don’t have a right to dispute negative information on your credit report that is accurate, and is being accurately reported.
That information cannot, however, be reported forever. The FCRA provides that even accurately reported negative information may only be reported by the bureaus for seven years.

This rule does not apply to bankruptcies, they can be reported for up to 10 years.
4. You have the right to know if you have been denied credit or charged a higher
interest rate as a result of information that is contained in your credit report.

 

Creditors and employers are also required by the FCRA to tell you if these things happen. This part of the law is there so that you are alerted to potential problems in your report. It is up to you to investigate this information and dispute it if it is inaccurate.

How To Start The Home Buying Process As A First Time Homebuyer

FIRST TIME HOMEBUYER? WHERE DO YOU START THE PROCESS?

SQUARE ONE-CLEAN UP YOUR CREDIT- Unless you are holding a winning Powerball ticket, are sitting on a substantial nest egg or are being financed by a wealthy relative, you will need a loan to afford your first house. Mortgage Companies and Banks use credit scores, also known as FICO scores, to evaluate the potential risk of lending to individuals. The higher the number, which runs from 300 points to 850 points, the better your credit score.

Knowing your score well in advance will give you time to clean up any mistakes, like tax liens that were paid off many years ago or parking tickets that you paid but that are still showing up on your credit report.

Sometimes it takes months to clear your credit up, and by then the seller has sold your dream home to another buyer and you are back to square one.

Knowing your score will also give you time to boost your number if need be. The three major credit-reporting bureaus generate their own FICO scores based on the data they collect.

To find out where you stand, contact a reputable credit firm like Phoenix Credit Consultants, (314) 429-2040 or www.123PCC.com. Even if your credit score is high enough to qualify for an entry level loan (like an FHA loan) you may have time and the opportunity to strengthen your score to a point where more favorable loan products might become available to you. A company like Phoenix can help you raise your score as quickly and as effectively as possible.

SQUARE TWO-GET PREAPPROVED- Not to be confused with a prequalification, which is essentially a “rough” calculation of how much of a loan you might qualify for, a preapproval is a written estimate from the lender stating how much you will likely be able to borrow based on an initial review of your credit and financial information. The application often requires submitting pay stubs, bank statements, tax returns and other financial documents. Most lenders charge nothing for the application, since they are hoping to win your business, but some charge you (usually less than $100.00) to cover the cost of a credit check.

Why not wait until you’ve actually found a place to get a preapproval letter for a mortgage? 

  1.  Because it will help you determine how much you can afford.
  2. It will provide you with significant leverage when you are ready to make an offer on a home. It provides assurance to the seller that you will be able to secure financing and makes your offer significantly more attractive to an offer that is contingent upon financing being obtained.

Preapproval letters typically expire between 90 and 120 days, but can be quickly updated with a phone call to the lender.

SQUARE THREE-ASSEMBLE YOUR TEAM- In addition to a credit consultant and loan officer, you will need to add a real estate agent to your team.

Look for a real estate agent that has an established track record working with buyers in your situation, and who will get back to you promptly.

Look for an agent that is experienced, one who frequently works with entry-level buyers. You want to feel like you’re working with someone who has done this time and time again, not someone who is learning the process as you do.

You want an agent who can help you come up with a sound offer based on market analysis and who will put together a well-rounded application package on your behalf. 

Your agent’s commission, typically 5 or 6 percent split with the seller’s agent, will ultimately come out of the sale proceeds. 

SQUARE FOUR-HIT THE STREETS!- With your credit restored, your preapproval letter in hand and your realtor by your side, it’s time to hit the streets!

Looking to hop in your car and drive from prospective dream home to prospective dream home this spring or summer?

Then now is the time to get started at square one. Contact the credit experts at Phoenix Credit Consultants today (314) 954-7429 or www.123PCC.com. We can help you obtain your credit report and a reliable mortgage (FICO) credit score.

Ask the experts at Phoenix about their unique, “Goal Oriented” credit restoration process. (GOPHOENIX!) That process is designed to get your credit score where you want it to be as quickly as possible and gives you control over how long that process takes.

Million Dollar Monday

Nothing excites us more than when we send one of our clients off to their mortgage loan officer “mortgage ready” with their credit restored. Our 2016 got off to an amazing start when a group of our restored clients closed on new home loans last week which collectively had a value of in excess of a million dollars!

 When this happens we have a tradition of celebrating the next Monday as a “Million Dollar Monday.”
Call us today at 877-235-6150 to find out how you can join the Million Dollar Monday Club!! You can also email us at info @ 123pcc.com!

You Are Awesome!

Wow! Thank you so much for all of your help. I never thought I would be at this point so quickly! You do a great job and I have already been talking you up to friends and family! So thank you for all of your hard work and helping me get to this point. You are awesome!

Jacob B.

Your New Year’s Resolution

Keys to achieving your New Year’s Resolution

1. Make Only One Resolution – Research shows, your chances of success are greater when you channel your energy into changing just one aspect of your life. What better part of your life is there to improve than your credit?  Better credit brings opportunity to your life. The opportunity to buy a new home, a new car, acquiring credit cards with better interest rates, better insurance premiums, a new job; better credit in 2016 will help you convert these opportunities into reality.

2. Avoid the same old approach to the same old resolution – Have you “resolved” to improve your credit on your own in the past, but didn’t reach your goal? Taking the same approach to a past resolution can set you up for frustration and disappointment.  This year, approach your resolution in a new way; enlist the help of the credit restoration experts at Phoenix Credit Consultants.
3. Set a specific goal  – Phoenix Credit Consultants is unique in their approach to credit restoration in that each and every one of our clients is given a credit repair “Goal.” Most often this takes the form of a specific credit score needed to obtain a new home mortgage. Vague plans (like, “I’m going to make my credit better!”) usually don’t work. Let Phoenix Credit Consultants help you set your credit goal and guide you towards that goal as quickly as possible.
4. Make it personal – When you enlist Phoenix’s help, you will be assigned your own personal credit restoration expert. You will know their name and they will know you. You will be able to pick up the phone and call them whenever you have a question about your credit. Our service is personal and our experts will hold you accountable. Accountability is a crucial aspect of succeeding in restoring your credit.
 
Ready to get started on the road to credit restoration?  Forget about that fitness club membership. Do you have any idea how crowded those places are going to be for the next month or two? Instead, call Phoenix. We are resolved to help you achieve your financial goals, not only for 2016 but for life.