First Time Home Buyer Credit

Opportunity of a Lifetime for First-Time Buyers

For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible. Use the links below to learn more about the tax credit. http://www.federalhousingtaxcredit.com/

CREDIT: THE DEBT COLLECTION PROCESS

Source: Credit Resource Group

· WHAT HAPPENS TO A CREDIT SCORE WHEN A DEBT GOES TO COLLECTIONS?
* A single collection can “ding” a credit score up to 100 points.

· HOW AND WHEN DO ACCOUNTS TURN INTO COLLECTIONS?
* A debt that goes unpaid for a specified period of time is considered past due and can turn into a collection. Each creditor has there own credit policy, but it is usually 120 days for a credit card and 90 – 180 days for medical bills and other types of accounts.
* Many major credit card companies have an internal collection department. They will try to make payment arrangements, but if unsuccessful will charge off the debt thus showing on a credit report as a “Charge off”
* If there is not an internal collection department some creditors will assign the debt to an outside collection agency or law firm who will pursue the debt for a commission. If the initial assignee is not successful collecting on the debt the original creditor may recall the debt and reassign. This can go on for many years (sometimes past the statute of limitations).
* A third and most common way to handle a collection is for the original creditor to sell the debt directly to a collection agency for pennies on a dollar. At this point communication with the original creditor stops completely. Endless turmoil arises when a consumer has to re-trace the parties and attempt to explain the problem.

* What is the difference between the Original Creditor and a Collection Agency?
* The original creditor is more difficult to work with because they don’t care much about collecting. They receive a salary, unlike the collection agent who only gets paid when they collect. It is actually better to work with a collection agency because they are always looking for fast cash.

· Do your research.
* Learn as much as you can about the collection agency because they may not have a license to
collect in a particular state or may have a suspended license.

* What are your rights?
* There are rights to protect your credit from further damage and rights to protect yourself. Go to http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm to find out more information regarding The Fair Debt Collection Practices Act (FDCPA)

· Statute of Limitations vs. 7 Year Rule.
* Each state has a statute of limitations on time legally allowed to enforce a debt. In some states its 3 years for open-ended credit (credit card) and 6 years for a written contract. If you have an expired debt and make a payment the statute is renewed. Once the statute has run, the debt is “expired”. This means the creditor can no longer collect. However despite the fact that the statute has expired the debt can remain on your credit report for 7 years as a charge off and with a balance. Negotiations with the creditor at this time to have the item deleted can really pay off. Raise the issue Statute of Limitations has run out, and then negotiate 20 – 30 cents on the dollar for FULL DELETION.
Visit the State Attorney General’s Office at http://www.naag.org/ to find out the statute of limitations in a particular state.

· Validation of Debt.
* A validation of debt (VOD) should be used before paying or negotiating a payoff for any charge-off or collection. A VOD is a formal request for proof that all the information relating to the debt is correct. Time is critical to use a VOD when a collection appears on your credit report otherwise a “no response” can be construed as an admission of valid debt.

Always be proactive regarding collections. It is critical to stay on top of your bills both financially and organizationally.

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Subprime Mortgage Bonds Lead "Extinct" Credits

Bloomberg, August 21, 2008

Subprime Mortgage Bonds Lead `Extinct' Credits, Moody's Says Subprime mortgage-backed bonds lead credit products rendered "extinct'' by the collapse of the U.S. housing market, according to Moody's Investors Service. Collateralized debt obligations packaging loans and structured investment vehicles will also disappear as investors refuse to buy debt linked to U.S. housing market losses. Link

Some Say Bailout of Housing Giants is Inevitable

New York Times, August 20, 2008; Page C1

Some Say Bailout of Housing Giants is Inevitable Financial conditions are continuing to worsen at Fannie Mae and Freddie Mac, leading some investors to prepare for a government bailout of the housing giants even as the Treasury Department and the companies say such government intervention will not be necessary. Link