Credit Repair Opportunities for 2012

Moving Forward into the New Year

Recent years have been economically difficult for most Americans. And as the economy has struggled, lenders have continued to tighten credit requirements, making things even harder for credit challenged consumers. But there have also been positive and countermanding forces at work creating real credit repair opportunities for the year ahead, including the newly updated Home Affordable Refinance Program (HARP), and the reworked Income Based Repayment (IBR) program for student loans.

You Will Be Surprised

Both the HARP and IBR programs are direct responses to the economic woes that face consumers and are intended to ease financial burdens. Both are specialized; HARP is for homeowners and IBR for student loan borrowers, so if you are neither, there is no credit repair news here, but if you are a homeowner or a student loan borrower, take heed, because these programs have much to offer. And if you imagine you could never qualify for these programs because of your income or credit history (or even diminished property value in the case of HARP) please read on. You will be surprised.

Relief for Upside Down Borrowers

The Home Affordable Refinance Program, or HARP, is designed to provide relief for borrowers that have been precluded from refinancing down to market interest rates because of diminished property value. The original HARP program was limited to borrowers who owed no more than 125 percent of the value of the home. The new version of HARP, announced October, 12, 2011, lifts all limits. It no longer matters how much you owe relative to the value of your home. But that is not all.

Awesome Credit Reprieve

The new version of HARP also removes all bankruptcy and foreclosure seasoning requirements, making it a wonderful credit repair tool. In fact the only credit requirement is that you have not had any 30 day delinquencies in the recent six months, and no more than one 30 day delinquency in the six months prior. Your home loan must be owned by Fannie Mae or Freddie Mac to qualify. Borrowers do not normally know who owns their loan as it is most often not the same as the servicer they make payments to. Both Fannie Mae and Freddie Mac have online lookup tools that make discovery easy.

A Truly Affordable Student Loan Solution

Income Based Repayment for student loans, or IBR, is designed to make loan repayment universally affordable, and is based on income and family size rather than a traditional ten year repayment calculation. On October 25, 2011 the White House proposed an improved version of IBR reducing the monthly payment even further, and adding an exciting feature forgiving any balance remaining after twenty years of payments. Like HARP, qualification is easy. Your student debt cannot currently be in default, but there are no credit or income requirements.

Ease Your Cash Flow

If your student loan debt is currently in default, you are not necessarily excluded from this credit repair opportunity. You will need to enter a rehabilitation program that will (typically) remove the default status after nine months of on-time payments, at which point you are free to consider IBR. For those experiencing budgetary pressure, IBR can provide dramatic cash flow relief allowing you to redeploy your cash to other important expenses and to insure that your credit rating stays as healthy as possible when you need it.

Wonderful and Dramatic Opportunities

Both of these programs and their recent revisions are federal responses designed to stimulate the economy by providing consumer relief. Further, in the case of HARP, the program is designed to aid the floundering real estate market and stem the number of foreclosures. And in the case of IBR, the program is designed not just to make loan repayment possible, but to encourage education by making repayment less daunting. Although not for everyone, the opportunities are wonderful and dramatic. And for those looking for credit repair help, these programs can provide unprecedented budget relief and a chance to reestablish a solid financial footing. Good luck!

Copyright � 2011 James W. Kemish. All Content. All Rights Reserved.

Jim Kemish is the president and founder of Sky Blue Credit Repair, a leading credit repair service. Sky Blue Credit has been dedicated to providing intelligent customized credit solutions since 1989. Jim is a graduate of New York University and holds a degree in economics.

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Will your home be worth more in 2012?

Real estate expert Barbara Corcoran discusses the good — and bad — news homeowners can expect in the upcoming year.

http://video.today.msnbc.msn.com/today/45798261

Visit msnbc.com for breaking news, world news, and news about the economy

TODAY revisits chain auto repair shop investigation

NBC’s Jeff Rossen reports that a Meineke repair shop caught on camera for overcharging customers “does not tolerate” what happened and has since “hired all new managers and mechanics.”

http://www.msnbc.msn.com/id/21134540/vp/45824459#45824459

Visit msnbc.com for breaking news, world news, and news about the economy

Auto dealers make changes after TODAY investigates

NBC’s Jeff Rossen reports that Bayside Jeep, an auto service center caught on camera overcharging for unnecessary repairs, fired personnel involved, while corporate representatives maintain they made changes.

http://video.today.msnbc.msn.com/today/45814337

Less than 24 hours after it announced it would charge a $2 “convenience fee” for every one-time online or phone payment customers make, Verizon Wireless reversed course after consumer outrage spilled onto the Web. The decision also came hours after it was made known that the FCC said it would investigate the new fee, which would have penalized those who make monthly payments via the Web or phone.

“At Verizon, we take great care to listen to our customers. Based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time,” said Dan Mead, president and chief executive officer of Verizon Wireless, in a statement.

“The statement speaks for itself,” said a Verizon Wireless spokesman to msnbc.com, when asked for more details about the carrier’s decision.

The company planned to put the $2 fee into effect Jan. 15. That news also coincided with another PR nightmare for Verizon: the third outage this month of its new 4G wireless network. The problem, the carrier said, was tied to the “growing pains” of being a “pioneer” in offering the most extensive fourth-generation wireless service in the nation at this point.

In the past day, Change.org and other consumer groups organized online protests about the new fee; as of Friday morning, the petition at Change.org had more than 64,000 signatures from those upset about the charge.

Verizon had said the $2 fee was needed to “address costs incurred” because of “those customers who choose to make single bill payments in alternate payment channels (online, mobile, telephone),” and that the charge would be waived for those “who pay by electronic check or enroll in AutoPay” (or pay by snail mail).

Last month, Bank of America also reversed course after public upset over its plan to charge a $5 monthly fee to customers who used their debit cards to make purchases.

Ben Rattray, CEO of Change.org, said the decision was a huge victory for customers: “The era of corporations walking roughshod over consumers without consequence is officially over. Social media sites like Change.org are fundamentally shifting the balance of power from companies to consumers. Companies must now deal with an unprecedented new force: millions of customers hyper-connected and easily able to mobilize together in response to their actions.”

Visit msnbc.com for breaking news, world news, and news about the economy

Verizon to charge $2 for online bill pay

Verizon, the nation’s largest provider of wireless phone and internet services, says it will start charging a fee to customers who pay their bills online. NBC’s Pete Williams reports.

http://video.msnbc.msn.com/nightly-news/45819706

Q Is the guy always expected to pay on a first date? I’m in my 40s and just starting to date again. I recently asked “Meredith” out to dinner.

When I went to pick her up, her sister “Renee” was there. Renee had come to town on business and decided to stay for the weekend. The three of us went out, which was OK with me until the check arrived and neither Meredith nor Renee made a move for it. I paid the bill, but shouldn’t they have contributed something?

Answer: Guess you and Meredith won’t be going out a second time.

When it comes to first dates, the person who does the inviting – that would be you – is responsible for the tab (though the invitee is free to insist on splitting it). However, you’re only on the line for the person you asked out, not for your date’s guests.

In this case, Meredith should never have allowed you to buy her sister’s meal. Indeed, she and Renee might well have picked up two-thirds of the tab, since the dinner that occurred was not the date you’d proposed. What Meredith really should have done, however, was either called you and suggested rescheduling or told Renee she was on her own for that evening.

Trust us, sisters know about dates.

Q Since I don’t drive, I rent out the parking space that comes with the condo I own for $50 a month. Others in the building, I’ve learned, get at least $100 a month for a space like mine. Unfortunately, I signed an agreement with my tenant saying the rent would never go up. I know this guy will get really angry at me if I tell him I want to increase it. What should I do?

Answer: Never take a job as a property manager.

Kidding aside, take that agreement to a lawyer and find out whether you are in fact locked in to the $50 rental fee forever. We bet you’re not. And if you’re not, have the lawyer contact your tenant and tell him. We think you’ll find that an hour or two of an attorney’s time costs less than the money you’re losing on your current deal.

Q My husband and I want to split our estate equally between our two children. We own two adjoining pieces of property, one undeveloped and one with our home on it. Since each lot has the same value, we plan to leave the undeveloped one to our daughter and the other one to our son, while leaving the house to both of them. Our son wants to live in the house one day, and we’re assuming he can work out something with his sister. Your thoughts?

Answer: Leaving two children a house that one of them wants is a recipe for trouble. Why? Because if your son is to buy out — or pay rent to — his sister, they have to come up with a price. And the higher the amount, the better it is for your daughter and the worse for your son – and vice versa. Even if your children are the most congenial of siblings, their relationship is bound to be strained by this negotiation. And what if your daughter decides that she would like the house? How’s that going to work?

Our advice: If you’d like your son to have the house, leave both it and the lot it’s on to him alone, and leave something of comparable value to your daughter. If that’s not possible, leave everything to both of them.

But in doing so, provide them with a set of rules for resolving the issues we’ve raised. Leaving it up to them to “work something out” runs too great a risk of setting them against each other.

Read Article > Money Manners; Guy shouldn’t have to pay bill for date’s sister – The Daily Breeze.

Given a chance to complain, creditcard consumers jumped at the opportunity.

The Consumer Financial Protection Bureau opened for business earlier this year, and its first actions were to solicit consumer complaints about credit cards and set up a system for resolving disputes.  In three months ending Oct. 21, cardholders filed more than 5,000 complaints and requests for help.

An interim report issued this week offers insight into the bank practices that most bug consumers:  Billing disputes, collection practices, and debt protection sales pitches. Surprisingly, late fees did not crack the top 10.

Mysterious fine print is a common thread through many of the complaints.

“The biggest thing we see is consumer confusion,” said bureau spokeswoman Jennifer Howard.  “Customers and credit card issuers aren’t always on same page when it comes to understanding the terms of the deal.”

According to the report, account holders struggle to understand both terms of their contracts and details of additional offers like debt protection.  There’s a “mismatch between consumer expectations and the way the product functions,” the report says.

A big part of the bureau’s mandate is to act as an express route for resolution of consumer issues. Of the 5,000-odd complaints submitted, 4,254 were forwarded to the bank involved; banks said they’d resolved 3,151 of those. Consumers disagreed about that satisfaction rate, with only 2,238 agreeing that their dispute had been solved. Another 500 said their complaints were pending.

The text of the complaints is not public, but the bureau is working on a method for providing “public reports” that will include “certain aspects of credit card complaint data.”

Meanwhile, the bureau will soon begin accepting complaints about other financial products, such as mortgages and home equity loans.

“When consumers contact us, we get a snapshot of how the consumer finance markets are working,” said Raj Date, a special adviser to the secretary of the Treasury for the Consumer Financial Protection Bureau. “We will continue to work with consumers, credit card companies, government agencies, and others to improve consumer education and ensure CFPB’s regulation, supervision, and enforcement efforts are effective.”

Read Article > Consumer agency shares top beefs against credit card issuers.

CORONADO, Calif. – Just a few years ago, Jason Ruediger was a single guy with a military salary and little more to spend it on than his car, insurance and meals out.

“When you’re single, I mean, your whole paycheck goes to you,” said Ruediger, 25, a petty officer second class with the Navy.

But now his paycheck has to stretch to cover his wife, two young children and two large dogs.

“I’ve actually gotten really good at budgeting,” said Ruediger, who is based at Naval Air Station North Island in Coronado, Calif., where he works as aviation support technician IMRL manager, meaning he helps manage inventory.

The military plays a big role in helping Jason, and his wife, Mariecor, 37, make ends meet on a little less than $50,000 a year in an expensive area like Coronado, outside of San Diego.

Jason estimates they would have to take in a civilian salary of $80,000 just to maintain the standard of living they now have for less than $50,000.

TODAY.com’s Life Inc. blog visited the Ruedigers in Coronado this week as part of a series of stories looking at what it’s like to live on the nation’s median income of about $50,000 a year.

The family’s cozy, recently remodeled yellow house is part of the Navy’s partially subsidized military housing. The Ruedigers get groceries from the commissary with no added tax, aid for their education through military programs and help with things like holiday gifts for their children, ages 1 and 2, from charities focused on militaryfamilies. Living on base saves on gas and other commuting expenses.

Perhaps most important, the couple’s military insurance covered the hefty bills stemming from the premature birth of their daughter Aureus, 2, and later her hospitalization due to Kawasaki disease, which causes inflammation of artery walls.

Read More > We are the median: Living on $50,000, military-style.

By Herb Weisbaum, The ConsumerMan

Shop at a major retailer between now and Christmas and there’s a good chance the clerk at the register will offer you an instant discount – 10 to 20 percent off your entire purchase – if you apply for the store’s creditcard first.

What should do you do?

“I know that it’s very tempting, but always say no,” advises Beverly Harzog of credit.com. “It’s just never, ever a good idea to try to get approved on the spot when you haven’t even read the fine print.”

Some retailers offer their version of a Visa and MasterCard. Others, like Macy’s, Saks, Ann Taylor, Gap and Best Buy, also have their own credit cards that can only be used in their stores.

If you’re a regular customer, you may want to take home the application (yes, you’ll miss out on the instant impulse savings) to see if the card makes sense for you. The private label cards often offer special deals that aren’t available to the general public.

Just remember this: Cards offered by retailers tend to be one-size-fits-all. They have the highest interest rates – usually 10 points more than a regular credit card – even if you have a good credit score.

“The terms of these credit cards are actually very poor,” says John Ulzheimer with SmartCredit.com. “The interest rates are almost always in the mid-20s and the creditlimits to start are almost always below a thousand dollars.”

 Ulzheimer calls these the sort of terms that are offered to people with really bad credit. “You would never accept these terms on a general use credit card like a Visa or MasterCard, but we gladly accept them for a retail store card.”

With an interest rate in the mid-20s, an unpaid balance could easily erase any savings you’d get if you applied for the card to get the instant discount.

Why not apply for the card, snag the savings and never use the card again? That seems logical, but any time you apply for credit it lowers your credit score a little. It may be only a couple of points, but you can’t be sure.

 “You don’t know what you don’t know,” warns Ulzheimer. “You have no idea what’s going to happen to your score.”

What it your score drops just enough to put you in a less attractive rate tier? You could wind up paying more for all of your credit, including credit cards, future car loans, even a mortgage refinance.

“Whatever discount you got the day of your shopping is meaningless in the grand scheme of things if you’re paying more interest during the life of the loan that you’re taking out,” Ulzheimer cautions.

Worse yet, if your score is already on the borderline and that new credit account drops it even lower, you could be rejected when you apply for credit.

Remember: Canceling the card after you get the discount won’t help. Any damage that’s been done to your score is done. Closing the account does not reverse that.

Read Article > Just say no to store credit card offers.