Without getting hit with outrageous hidden fee’s. Or is there maybe a way that I may be able to do it on my own? By the way I live in IL and the reason I wont do it with my current Mortgage holder is because everyone says that they are ripoffs, and for those of you wondering why I have a mortgage w/ them is because my previous lender sold my mortgage to them…can someone please help!!!

We’re about to take out a mortgage, and I’ve been reading about mortgage servicing fraud, where even though you send payment on time, they cash the check but don’t update your records, then they add late fees, take out hazard insurance, send it to collection, and the whole thing snowballs from there.

So in preperation for doing everything right, what is the best way to pay a mortgage so you can prevent this from happening. Online Bill Pay? Check? Certified Mail? Direct Debit? Which payment method makes it the hardest for a bad mortgage servicing company to pull this scam?
It seems most answerers (if that’s a word) don’t know that mortgage servicing is often outsourced as part of the bank selling the loan package as a security. That means that no mortgage borrower has any control over who their mortgage servicer is. The original lender often doesn’t service the loan. Unfortunately, mortgage servicers can do what they want. See www.msfraud.org.

Selecting a reputable lender has nothing to do with it. Also, both Wells Fargo and CitiBank are known to conduct the same scam, ‘misplacing’ a mortgage payment and then pushing the loan into default, through no fault of the borrower. It’s a well known, and completely calculated strategy, and is completely 100% immoral.

So the question is how you best prove payments, and the question is probably directed towards people who have been target by their mortgage servicing company.

As there is zero legal recourse, mortgage servicing fraud is much more serious than predatory lending. And nobody is completely safe.

I have three credit cards with the oldest account about 2 years old. I do not need or want a car loan or a mortgage. What is the maximum score I can acheive with just keeping credit cards. Also, will I be considered a high risk since I have no other type of credit obligation? My credit limits are not very high on the accounts that I do have. At what Fico score should I apply for another card to receive a high limit account?

I carry hardly any balance on any of my accounts. I use them and pay off the balance at the end of the month just to have a ontime payment history.

Do you need to be behind on payments for the lender to accept the short sale?

A list of ten credit repair tips follows. This is by no means a complete list, maybe just enough to get you started.

Credit Repair Tip #1 Look for free information before you buy anything. Did you know that the three major credit bureaus, Experian, Equifax and TransUnion, are required to provide consumers with one free copy of their credit report every year? If not, you are not alone. Companies which sell credit reports and other credit repair tips are betting that most people do not.

Credit Repair Tip #2 Visit www.annualcreditreport.com. At this site consumers can view and print the information accumulated by the credit report agencies or credit bureaus. There is no charge for these reports, but the credit bureaus are allowed to promote the products that they sell, such as credit repair tips, on this site. Credit Repair Tip #3 There may be a lot of information on your credit report or just a little, depending on the types of credit that you have and the length of time that you have been using credit. Print the reports out and begin the process of reviewing the information that the credit bureaus have been accumulating about you. Use a yellow highlighter to highlight information that you believe may be inaccurate, misleading or unverifiable. This is information that you will dispute.

Credit Repair Tip #4 One of the credit bureaus has an on-line dispute system, but it is not very user friendly. The window is tiny and in order to read a sentence, you have to scroll from left to right. The best way to notify the credit bureaus of your disputes is to send them a letter. Letter writing suggestions are included in many books with credit repair tips, but you can view a perfectly usable example of a dispute letter at the Federal Trade Commission’s credit website.

Credit Repair Tip #5 Wait.

Credit Repair Tip #6 If you have not received a response from the credit bureau or bureaus within thirty days, send a follow-up letter: “Please remove these items from my credit report immediately. I have waited a reasonable amount of time.”

Credit Repair Tip #7 Wait.

Credit Repair Tip #8 If you receive no response from the follow-up letter, you will need to contact a lawyer, preferably one that specializes in credit repair issues. The credit bureaus are allowed to disregard disputes that they consider frivolous. There are no guidelines for disputes which might be considered frivolous. Credit Repair Tip #9 Sometimes options are recommended which are illegal, such as file segregation. Do not create more problems for yourself.

Credit Repair Tip #10 Visit creditrepairsoft.com for more credit repair tips. This site also shows how different actions affect your credit score.

There are several sources on the internet for credit repair tips. As with most information, there are hundreds of books full of credit repair tips, software programs with credit repair tips and credit repair specialists that charge for their credit repair tips, but there is a lot of free information as well. For more credit repair tips, vistit the Credit Repair Blog at

Imagine applying for a mortgage for your dream home. You have good savings, a good job, very little monthly debt, and a decent credit score. Your loan approval should be a slam dunk, right? Now imagine how frustrated you are when the bank says your loan application was denied due to your credit report - despite having a good credit score!

Everyone knows that you need to have a good credit score to get the best rates and terms on a mortgage. But, many people don’t realize that their credit report can cause them to be denied financing, despite having a good credit score. It’s more important than ever to understand your entire credit history - not just your credit score itself.

Here’s a list of five things on your credit report that can prevent you from getting a loan approval, regardless of the actual score. The first four are pretty straightforward. It’s the fifth scenario that catches people by surprise and leaves them frustrated.

1. Having a bankruptcy in the past.

Most lenders won’t approve your loan if the discharge date of your bankruptcy was in the recent past. The rule of thumb used to be that you had to wait two years after the discharge date before applying for a loan. But, nowadays, Fannie Mae has tightened her guidelines even more: two years after the date of a Chapter 13 and four years after the discharge of a Chapter 7.

Here’s an example from a recent owner builder construction loan. The requirements called for a credit score above 620. The owner builder applicant had a score of 660. But, his loan was denied, because he had a bankruptcy that was discharged in 2005. With the new changes, he had to wait another year before getting approved.

2. Having a foreclosure on your credit report.

Similar to bankruptcies, a foreclosure can crush your chances of getting approved. Until recently, most banks would approve your mortgage as long as your foreclosure was at least three years in the past. But now, Fannie Mae is tightening the guidelines - you have to wait five years after the completion of a foreclosure. And, even then, Fannie Mae will require a 680 credit score and a 10% down payment. Otherwise, you’re waiting seven years after the date of the foreclosure!

3. Having old collection accounts on your credit report.

If you have multiple collection accounts from your past that are still showing up on your credit report, there’s a good chance that your credit score has recovered and is doing fine by now. But, if those accounts were never satisfied, a lender may require you to pay them all off prior to approving your loan.

4. Having a lien or a court judgment on your credit report.

If your credit report shows a lien or a court judgment in the Public Record Information section, then you might be denied financing until these items are satisfied. Here’s one more example from the world of owner builder construction loans. A recent owner builder wanted to build his new home, and he had a great credit score. But, the credit report showed a court judgment still withstanding from five years ago that had never been satisfied. It was a small, petty amount of money for a very minor dispute in the past. But, he had to pay the judgment before he could proceed with his owner builder loan.

5. Not having enough open accounts that are over two years old.

The first four scenarios above are pretty straightforward. It’s easy to understand that something negative like a court judgment or a foreclosure on their credit report could prevent financing approval. But, this fifth scenario is different. How could you possibly be denied a mortgage despite having a good credit score with no derogatory accounts showing on your credit report?

The answer is that the credit report might not have enough accounts showing at all. In other words, your credit score may be fine. You may not have any negative things showing from your past on the report. But, if you don’t have at least a few open accounts that are over two years old, then you might get denied financing.

For example, a recent owner builder applicant had a 673 credit score. His other loan qualifications fit well with the program guidelines. But, he was denied an owner builder construction loan because he had closed all of his credit cards. He only had one open account showing on his credit report. He thought at the time that he was doing the right thing.

In some ways, he was doing the right thing - he didn’t have excessive car loans or credit cards. He didn’t run up a lot of debt. He lived within his means. But, on the other hand, his credit report wasn’t showing enough open accounts to approve the loan. The owner builder loan was denied, because of a lack of current, responsible credit use (i.e., no credit use). In the case of this owner builder, his owner builder construction loan would have been approved with flying colors if he had simply paid off the credit cards, but left the accounts open with zero balances.

Therefore, when you are reviewing your own credit report, make sure you have at least three open accounts that are each two years old - with no late payments. This is tough for some people who are young and haven’t had the time yet to establish a lot of credit. In cases like this, the easiest thing to do is to get a few credit cards while in school. The tricky part is to have the discipline not to run up balances on those cards. And, in the end, that’s the whole idea - lenders nowadays are looking for evidence of responsible use of credit.

Have you considered being a little unorthodox and buying a home that is a short sale transaction? After the spate of much publicized foreclosures, many lenders have realized that a foreclosure is not necessarily the best way for them to offload a bad debt.

Foreclosures are costly, time consuming and represent an additional loss for the lender, because of the inclusion of both legal fees and court costs. Short sales transactions are becoming a more viable choice in situations involving financially stressed home owners.

However, don’t be fooled by the name; ’short sales’ are often ‘long’ sales with much ongoing haggling, mediation and negotiation. They are almost never straightforward, but having said that, they offer an opportunity for prospective buyers to get a bargain-priced home. In effect the ‘cost’ of the home is reflected in the patience and tenacity of the buyer and the buyer’s real estate agent.

Your real estate agent will know that the seller legally has to be in default before a short sale can proceed, public records must be checked and there are certain ‘pecking orders’ for negotiating with lenders, (usually you will deal with the second lender first!) The real estate agent will steer you through the complicated procedure which is largely unfamiliar to the general public. Your agent will also be able to negotiate with your real estate lawyer when the time comes.

Now is certainly a good time to get pre-approved and ‘lock-in’ some financing prior to starting a search for a short sale home. The rate dropped again this week and if you mortgage now you will save $50.00 per month over last week’s rate.

Many prospective buyers are waiting for the all-time low, as we are almost there! Of course, logically, we never know when we have hit the bottom until the rate starts to creep up. At that point, everyone rushes to lock in, but in effect we have already missed it! But if you do get pre-approved and are looking for a short sale, it may help your search and eventual purchase if you are aware why some short sale homes are more difficult to buy than others.

For instance, if a home has more than one mortgage on it, it gets more complicated and needs more negotiating with more people. One problem that immediately arises is to actually agree the ‘new’ value (and therefore your price) on the home.

The more people who have a financial interest in the property, the harder it is to agree on anything. So try for a home that is on a short sale list that has no more than two lenders, and preferably only one. If you can find a home with only one lender, it is really worth trying for that one.

Be prepared to truly negotiate. This means that you DO have to concede on some points, so pick your battles! Do not convey the attitude that you are doing them a favor, this is a two-way stretch. Always follow the advice of your real estate professional on matters of legality. The short sales transaction is not conducted or concluded in the manner that you might be used to, but your agent knows the ropes.

How mortgage scams snare unsuspecting sellers

Don’t jump at a contract offer that involves a kickback of the overage to the buyer at closing. Chances are the buyer wants an inflated price on the property so he can take the additional money and run without every making the first payment.

Why should it matter? If a buyer buys your house for the full appraised value and he gets a mortgage for that amount, what difference does it make to me as the seller if I only sold it to him for less than the amount he mortgaged?

The sales price and the mortgage amount are two different things. ( Source : Mortgage 1

You won’t be on the hook if your “buyer” obtains a mortgage at an inflated appraisal. That’s between him and the lender.

But you could be charged with conspiracy or perhaps as an accessory to a crime if you knowingly sell a property at far more than it is worth and then hand the overage over to the “buyer” at closing or shortly thereafter. The authorities say any seller who does that has to be considered an accomplice because he had to know something is not right. Either that or the seller is a complete and utter nincompoop.

The buyer in this case may or may not obtain a mortgage on the property in question. Sometimes the bad guys are satisfied with the overage, but most often they must obtain a mortgage or they won’t have the money to buy the house. So they get a loan at the inflated price — using a faulty appraisal — pay you what you want and take the rest. Then, they either skedaddle without ever making a payment or they turn around and resell the place to an unsuspecting buyer and take off with even more cash in their pockets.

These guys are sneaky. The latest scheme is called “shotgunning” in which a property owner applies for several home equity loans with multiple lenders at the same time.

In one recent documented case, a would-be borrower applied with three different lenders over a 48-hour period. Because the lenders did not all report to the same credit bureau, none were aware the same owner had simultaneously applied elsewhere as well. Fortunately, the folks at the First American Title Insurance Co. noticed the attempted sham when they received multiple title orders on the same property and notified the lenders of the suspicious activity before they funded the loans.

This owner was not deterred, however. A few days later, the title company noticed two more orders on the same property with two new lenders and was able to alert them in time to avert a loss.

Lenders weren’t so lucky in dealing with a ring of con artists who managed to obtain 10 mortgages totaling more than $1 million on a Chicago area condominium with a market value of roughly $125,000, according to First American’s valuation model. The loan applications were made over a three-week period via lender Web sites and call centers, not in person. And because of the delay between the dates the loans were closed and the dates the liens were filed in the county courthouse, none of the lenders knew of the other liens when they were making their underwriting decisions.

Lenders take it on the chin in cases like these, but legitimate borrowers also pay a price because lenders recoup these costs in the form of higher loan rates and fees, just like retailers add the cost of shoplifting to the prices they charge everyone.

Borrowers have a lot more at stake in another form of shotgunning, this one involving multiple sales of the same house. In this case, the same “owner” — who may not be the rightful owner at all — “sells” the same property simultaneously to several unsuspecting buyers.

When each buyer uses a different lender and title company, this highly orchestrated scheme is “virtually impossible to detect,” says Jeffrey Taylor, managing director of Digital Risk in Dallas. Ultimately, of course, it’s the title companies that take it on the chin, but buyers also pay dearly in the form of massive litigation and lost opportunities.

Authorities believe the Chicago scheme is being repeated over and over again by an organized group of foreign criminals. They use the sham as an exit strategy when they decide to leave the United States and return to their homeland. After living here long enough to develop solid credentials and credit records, they buy the houses or condos using all cash obtained by illegal means. Then, after living in them free-and-clear for a couple of years, they apply for a bunch of loans based on the equity they have in their houses.

“It’s the ‘fraud of the year.’” says Paul Doman of First American’s Lenders Advantage Equity division. “They can pull in excess of a million dollars out of the home, enough so that they can live a good life back wherever they came from.”

The First American executive reports that the title business is trying to put a stop to this and other schemes by forming a consortium in which applications for title searches are run through each other’s systems. That way, multiple applications on the same property can be spotted in advance rather than after the fact.

Owner builders save themselves a lot of money by managing the construction of their homes and cutting out the costs of a general contractor. However, for owner builders who have never built before, there is a very important lesson to learn about the owner builder loan timeline before getting too far into the planning process.

Owner builders need to be realistic about their planning timeline and the construction loan timeline; or else they can cost themselves a lot of money and headaches.

If you want to purchase the land as a part of the overall owner builder construction loan, then make sure you understand these hard learned lessons before you make an offer on the land.

Prior to making an offer on the land that they want, every owner builder should first take a moment to get pre-approved for the loan. This doesn’t mean getting approved for a simple purchase loan or even getting approved for any typical construction loan. Instead, owner builders need to find specific owner builder financing, designed to allow you to build as your own general contractor.

Why is it so important for owner builders to do this prior to making an offer on the land? There are a few reasons, really.

First, and maybe most important, is that owner builders, like everyone else, will need to make an earnest money deposit when they submit an offer on the land. If you pay money into an earnest deposit for your land, prior to getting construction loan approval, you could end up discovering that your project or scenario doesn’t qualify for an owner builder loan.

If you discover this too late, then you could end up losing your deposit. Protect yourself by getting approval beforehand.

Second, speak to a loan professional who specializes in owner builder construction prior to making an offer on the land in order to get a feel for the overall loan timeline.

In other words, you don’t want to sign a purchase agreement for land that expires in 30 days. If you do this as an owner builder, you better already have your blueprints and budget completed. Otherwise, it will be impossible for you to finalize your blueprints, then put together an actual budget based on actual bids/ estimates from local sub-contractors, then get your loan through underwriting.

No owner builder has ever gone through that process all within 30 days - at least not successfully. If you only give yourself 30 days in the lot contract, then you end up rushing through the home plan design phase and the budgeting phase.

Therefore, owner builders can save themselves a lot of time and trouble by speaking to their owner builder construction loan officer prior to making an offer on their land. The loan officer should be able to explain all of the nuances of the loan timeline, as well as provide information about a typical owner builder planning process.

These are simple owner builder lessons, but you would be amazed at the number of people who make these very mistakes. For the owner builder who doesn’t pay attention to a realistic timeline and rushes into making an offer on their dream piece of land, the project typically goes astray very early.

Owner builders who make an offer on the land before accounting for the time needed to finalize blueprints and compiling a true budget will often have to purchase the land outside of the construction loan. In other words, you would have to buy the land first. Then, get the owner builder loan. This means two closings. This means two sets of closing costs.

However, owner builders who get their pre-approval first, and speak to a loan officer before making an offer on the land, will be better prepared to start their planning process.

Indeed, these owner builders will have plenty of time in their lot contract to put their blueprints and budget together. Plus, you will already know up front what owner builder construction loan terms you qualify for. You won’t have to worry about losing your earnest money deposit on the land, or about losing your land. Owner builder loan timelines aren’t complicated, but you need to be aware of them before jumping blindly into your project.

Facing a foreclosure, you may have another option, consider a “Deed in Lieu”; with a deed in lieu, you are relinquishing your rights to the property, especially giving the property to the lender. This is much better then a foreclosure, if you are able to do it, each state has different laws therefore you need to do some research and ask for legal advise before pursuing this type of transaction.

Some lenders may prefer this to the foreclosure process, it is expensive and time consuming. A “Deed in Lieu” also comes across your credit report much better then a full-blown foreclosure; the foreclosure process will have exceptional damaging affects on your credit report and therefore will take a long time to fix. It could hamper your ability to purchase another home for 7-10 years.

A “Deed in Lieu”, if negotiate properly should keep a foreclosure off your credit report and protect your credit from the damages of such a recording. While working with your lender during the default process, negotiate the terms of how it will report to the credit agencies. The lenders will save a tremendous amount of time and expense by you simply giving the house back to them in lieu of the foreclosure process. For doing your part to save them as much time and money as possible, if is only fair that they assist you with trying to keep your credit as clean as possible.

Let the lender know that leaving the house, clean and in good shape is not a problem, but by doing so you do not want to have a foreclosure reported to the agencies. Get it is writing. Agreeing to this verbally, will not help you, banks love to give “lip service”, it is what they do to get what they want.

There are other options if you are facing a foreclosure; a “Deed in Lieu” is not necessarily the best one. Depending on how equitable the property is you may be better off selling the home to a private buyer, or even an investor. Salvage the equity if you can you did work for it. They may even let you do a rent back so that you will not have to move. If your best option is to do a “Deed in Lieu”, doing so with the lender is preferred, more so then an investor. Only by dealing with the lender are you able to terminate the original loan agreement. Dealing with an investor will not terminate the original contractual obligation with the lender. A lender that fails to perform on the agreement will you, will leave you vulnerable in the event the bank moves forward with a foreclosure. If you decide to use an investor, investigate them, make sure that they have adequate resources to keep the loan up-to-date.

A home foreclosure is not the end of the world; there are many options available to homeowners that are facing one. While it may seem that you have few options, or that your world is falling apart, remember investigate all options prior to making a decision. Hire a professional to assist you with all the legal and personal ramifications or each option. While most homeowners will not resort to a “deed in lieu”, address the situation immediately, and choose wisely.