Archive for November, 2009

Buying Foreclosed homes – The untold stories……

Monday, November 30th, 2009

Buying a home is the American Dream. Everyone would like to have there own piece of homeownership. With the real estate boom dead in the water, the market has become plagued with foreclosures. The chatter all over the U.S. is to “buy a foreclosed home; you will get a great deal.” This is partially true, but there are lots of issues when trying to buy a foreclosed home in this market. Below are some of the issues.

Financing on a foreclosed home

Most people will need a loan with a bank to buy a foreclosed home. Banks don’t particularly like financing a foreclosed home that has problems. While you are out looking for a foreclosed home you will find that these foreclosed homes typically are not in good condition and need some work. This is one of the issues with buying a foreclosed home.

Foreclosed homes purchased “as is”

When you are out looking for a foreclosed home you will discover that a bunch of these homes say “AS IS.” You might be wondering what this means….? Well that means the bank is selling the home in the condition it is in, and will not repair anything. So let’s assume your offer gets accepted, and the appraiser notes there are some issues with the home. A bank will require those issues to be repaired. At this point you are stuck. So make sure your realtor is seasoned and understands what banks are looking for.

FHA loans

F.H.A. loans are the most attractive currently because this loan only requires a 3.5% investment from the borrower. When it comes to guidelines, this loan has higher standards on appraisal requirements. The banks know this, and may not even accept FHA offers. So with this being said, you may be required to go Conventional on your loan which requires 5% down and much higher standards on credit requirements.

Closing Cost assistance from Bank

When negotiating on a home, it’s a common practice to have the seller pay 3 to 6% of your closing costs. This of course depends on the loan type, because some loans only allow 3% seller closing cost assistance. Some banks will not pay anything, and in other situations you might find yourself competing with multiple offers. The offer that is the best obviously wins.

These are some of the real life problems with buying a foreclosed home. Do your research before you buy a home that has been foreclosed. Also make sure your realtor and lender are experienced before using them.

Author: Mike Clover your resource for free credit reports, credit cards, loans, and ground breaking credit news.

Credit Repair – Do it yourself for FREE

Friday, November 27th, 2009

Credit Repair is probably one of the most abused practices out there. You can find companies advertising credit repair all over the web. Being a lender for 8 years and knowing the facts, credit repair by credit companies typically will be a huge let down.

You cannot remove a debt you owe unless that debt has reached its expiration date. This is what most of these credit repair companies promise.  In other articles I have discussed this expiration process; here is the way that works. In this article I wanted to discuss the how credit repair can be done fore FREE with your own efforts. Don’t waste your money and time with “credit repair companies” you can take that money and repair your own credit report.

Step 1: Getting your credit report

There are free trial credit report offers all over the web. You probably are asking which one is actually FREE. Well is the only credit report site that does not ask for a credit card unless you want your credit scores with the report. We recommend getting your credit report with credit scores, that way you have an idea what your scores are. You can do that through our site if you want your scores. We also have provided a comparison site of all the top free trial credit report offers at our sister company So check that out as well.

Step 2: Determine incorrect information on your report

Most credit reports have inaccurate information on that report. You need to determine what debts should be taken off and what debts are inaccurate. To determine collections or slow pays that need to be removed from your credit report, you can use this link to find out expiration dates.

Step 3: Dispute inaccurate information

Once you have determined what is inaccurate and expired, dispute that information on-line. In our professional opinion it’s much faster to dispute on-line than write letters. You can dispute online here.

Step 4: Determine budget to settle on collections

This is probably the most frustrating part of credit repair. It is also the quickest way to increase your credit scores as well. Take note of each collection and the collection company’s number. Add up t he total amount of money you owe to each creditor. One you have that total determine how much you can pay to either settle or pay in full the collection that is owed.

Step 5: Call collection companies to settle on debt

You will find that these collection companies can be difficult to work with, but they will usually settle pennies on the dollar to get payment.


Collection amount: $500.00

Offer Amount: $250.00

Remember you have already determined what you can afford to offer each collection company. Also make sure you meet the agreement that has been arranged. Don’t tell the collection company you are gong to pay and blow them off. This may take some time, but will be the quickest way to repair your credit.

Step 6: Collect letters from collection companies

This is very important, once you have released money to a collection company make sure they get a letter stating you have either settle or paid in full on the collection. Keep these letters in a folder. You may find that the Collection Company or bureau did not update the collection properly. This letter is proof you took care of collection.

Step 7: Reestablish credit

I am going to assume you have no good credit reporting on your credit report. All the good credit you had went to collection. You will need to re-establish good credit. You are going to find that most banks will only allow secured lines of credit to establish good credit. The quickest way to do this is with secured credit cards. You can get the top secured credit cards through our site. You will need a minimum of 2 cards. Most of these credit card companies require you to send them $200 to $300 dollars of your own money to secure that line of credit. The reason I recommend this is because this line of credit will report to all 3 credit bureaus as good credit. Make sure once you have received a couple of cards you keep the balanced owed extremely low. Credit Cards are not credit lines to go out and charge up above and beyond what you can pay off that particular month. Also make sure you are not late on any payments. If you charge up your cards or are late on payments, you credit scores will plummet. With your new secured cards you will establish higher credit scores and this process will take about 6 to 12 months.

Step 8: Pull your credit report

Once you have done all the above and it has been around 6 to 12 months re-pull your 3-in-1 credit report. You want to make sure that the collection companies have reported everything properly like they should. Remember you have letters to show you paid or settled on your collections. If you find that these collection companies have not updated the credit bureaus like they are suppose to, remember you can dispute online to get update or call the collection company to ask what is going on.


Remember credit repair is not a quick and easy process. If you follow the steps given, you will be like the individuals we have helped get a mortgage over the years that had credit issues. Don’t fall prey to credit repair companies, most of them will disappoint you.

Divorce Decree Q & A

Tuesday, November 24th, 2009


I am recently divorced.  In the divorce settlement, my ex husband is responsible for paying the 1st mortgage and 2nd mortgage on the home we own together.  The house has been on the market for almost a year and has not sold.  He is currently living in the home, and is not making full payments, and/or regularly pays late.  This, of course, has affected my credit score drastically.  Other than those two items and prior to 2009, my credit score was in the high 700’s.

Is there any way I can dispute this based on the fact that legally these payments are not my responsibility?



Hi Cindy,
This divorce decree issue is a huge problem after divorce takes place. This is one issue attorneys don’t explain properly. The proper way of drawing up a divorce decree when a house or debt is involved is to get that debt out of the individuals name that is no longer responsible for that debt per the decree. Unforetunatley most attornies don’t do this. So in your situation the creditor will still say you are liable for the debt regardless of what the decree says. Disputing will not do any good for your situation. The ideal situation is to have him sell it or refinance the obligation out of your name. I would consult with your attorney why he did not explain the repercussions of this. In my opinion attornies should be responsible for a mess like this, because they are suppose to represent you.

Mike Clover

Renters, is it Wise to Buy Now and Take Advantage of the Tax Credit?

Tuesday, November 24th, 2009

Before deciding to plunge ahead with a first home purchase, renters should consider several factors, the first of which is how long they plan to stay in the community.

Under the regulations for the First Time Buyer Tax Credit, a buyer must remain in the home for 3 years. If they move before that time has passed, they will be required to return the $8,000. This alone could create a hardship. And as we all know, owing the IRS is not something we want to do.

In addition, because during the first few years of a home mortgage most of the payment goes to interest, they’ll have little equity in the home if they sell. And selling takes time. Depending upon the market at the time, they could be looking at several months on the market.

Thus, if they need to move because of a job transfer, until the house sells, they’ll be stuck with a mortgage payment as well as rent on a home or apartment in their new location.

Next, renters need to decide if they’re ready to take on the responsibility and expense of home maintenance and repair. As a renter, if the plumbing starts having problems or the furnace goes out, they simply call the landlord to have the problem fixed. As a homeowner, the responsibility belongs to them. Not everyone has the resources or the desire to deal with those expenses.

Many landlords set aside 10% of the rental income for repairs. New homeowners would do well to set aside 10% in addition to their mortgage payment as a fund to tap into when repairs are needed. Will that fit the budget?

Homebuyers might do well to stash that $8,000 in a savings account as a cushion to fall back on when maintenance and repairs are necessary.

The next thing to look at is monthly cost. Right now census bureau figures indicate that over 11% of all rental properties are vacant. That means that in several areas of the country, renters can find bargains on good properties. While they aren’t earning any equity as renters, it does afford an opportunity to set aside funds for a respectable down payment when the time is right to buy.

No one should rush out to buy a home simply to get the $8,000 First Time Homebuyer Tax Credit. First, decide if the time is right and if it makes financial sense. If the answer is yes, then the credit is a nice gift.

Author: Mike Clover your resource for free credit reports, credit cards, loans, and ground breaking credit news.

The Homebuyer Tax Credit Didn’t Expire!

Saturday, November 21st, 2009

stockxpertcom_id35645401_jpg_69b7b6a2194b8785203298667aaa749aInstead of expiring at the end of November, the First Time Homebuyer Credit has been extended to the purchase of homes that are under contract by April 30 and closed by June 30, 2010.

This is an extension of the $8,000 credit offered to home buyers who have not owned a home within the previous 3 years. This definition of “First Time Homebuyer” has confused some who don’t realize that they do qualify, even though they have owned a home in the past.

The difference between the current credit and the 2009 credit is the income limit. Last year’s limit was $75,000 for a single person and $150,000 for a married couple. The new limits are $125,000 and $225,000. Buyers with additional income of up to $20,000 more are eligible at a decreasing percentage based on income.

Congress also passed an expansion to this bill – now including homebuyers who have lived in their present home for at least 5 of the past 8 years. This $6,500 credit is the subject of debate among real estate professionals. Some believe it will spur the market while others see it as having no effect.

As with the original $8,000 First Time Buyer Credit, some real estate professionals believe it will cause sellers to remain firm on pricing. Some feel they don’t need to negotiate because the buyers are going to get the credit. That belief, however, can come back to haunt them as buyers move on to homes with more favorable pricing.

For homebuyers who want to “move up,” the $6,500 tax credit may ease the sting of taking a loss on the home they are selling. This adds to the fact that the savings on their new home can outweigh the loss on their previous home.

In a market where prices are down 20%, their loss on a $100,000 home is $20,000 while their savings on a $200,000 home is $40,000.

Agents working in high-end markets, with homes in the $500,000 and up range, are those who saw little effect from the previous credits – and who don’t expect to see an impact from these. For many of those agents, the biggest motivating factor is “bargain pricing.”

In some markets, homes that had been offered at over $1 million can now be purchased for as little as $750,000. For consumers wishing to own a second home on the beach or a chalet at a ski lodge, that savings can be a powerful motivator to act now.

Author: Mike Clover your resource for free credit reports, credit cards, loans, and ground breaking credit news.

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.