Thursday, April 28, 2005

Consumer Credit FREEZE in Washington

Washington Governor signs security freeze legislation!

May 10, 2005, Washington Governor Christine Gregoire signed SB 5418. This new law gives Washington state residents the right to place a security freeze to lock up their credit files so that new creditors can't check the consumer's credit file unless the consumer chooses to unfreeze, or unlock the file. The right to freeze the credit file applies to identity theft victims and to consumer who have been notified that the security of their personal information has been breached
published by the Consumers Union

Consumers Union is urging consumers to support tougher state laws that would increase your protection. Considering that 9.9 million Americans are vicitmized by Identity theft each year--your chances of experiencing loss through identity theft increases daily.
To support the freeze on credit information access without your permission in your state, visit:

This petition is being presented to state legislatures by Consumer's Union. It would mean that individual consumers could 'freeze' their reports preventing companies from issuing new credit accounts and having access to your credit report without your permission. The downside is that you would have to temporarily 'unfreeze' your credit if you were legitimately seeking new credit. Another upside would be no more unsolicited credit card offers in the mail!

Brokers Support Protections
The Mortgage Brokers Association and other advocacy groups are urging congress to enact stronger laws protecting consumers from the wave of new identity thefts. If you have good credit, you will be the primary target. It really pays to review your credit report at least once a year (and several months before applying for a new loan) to be sure your information is accurate.

Every day we read of new security breaches at universities, retail stores and payroll companies. The ability of online hackers to break into the databases of these firms is beyond comprehension. We all hope it won't happen to us. At the current rate of ID theft in the USA, 19 incidents occur every minute.

The FBI is also taking a very strong interest in these matters as they relate directly to the mortgage industry. According to the Washingon Mortgage Brokers Institute, 80% of victim fraud is committed by insiders in the financial industry...including lawyers, appraisers, title companies, brokers, loan originators, bank employees, processors, etc. The problem is compounded by lax rules and regulations. For example, if your broker doesn't shred all sensitive documents, their trash could be the source of a wealth of information for identity thieves. And believe me...thieves know where to look. Fortunately, tighter regulations are being proposed to enforce better security procedures throughout the mortgage industry. One such safeguard is the standard background check that lenders undertake before hiring people to work with secure information. Unfotunately, a really smart con will find some new way to outfox the the system is evolving to stop these new practices.

Acts before Congress and your local state legislatures are being debated to create better safeguards. While some Bills exist that require companies to tell you when your personal information security has been breached...they first have to know about it! Companies who have been caught out (DFW shoes is one) often don't know the extent of the seciurity breach and by the time they notify consumers it may be too late to stop an attack on your personal credit.

Contact your elected officials here:
Wishing you every credit sanity! Loannetter
(c) 2005 Susan Templeton

Wednesday, April 06, 2005

Avoid Loan Death!

If you are applying for a mortgage, here are a few specific rules to help you make it to closing alive:

NEVER respond to a bank online request for your passwords or identity information. These may be opportunists looking for access to your accounts and it could be a coincidence that you are applying for a loan (who isn't these days?). Legitimate Banks may mail disclosure documents about your loan prior to closing. If you are working with a mortgage broker it is possible that more than one bank is competing for your loan--so keep the documents but do not respond to them...that's your broker's job. This can be confusing as the documents the bank sends may not be up to date anyway...but is does alert you that someone has applied for a loan in your name.

NEVER co-sign a note with anyone for anything! (Unnless yo uare willing to accept their payment history on your credit)

NEVER give out your Social Security Number to a bank or lender who doesn't ask you to sign a Certification and Authorization form FIRST (informing you of your rights). Once this person has pulled your credit, you should be provided with a copy of the report showing your FICO scores.

NEVER shop online for a mortgage if you value your credit score (online lender 'hits' will lower your score because they farm out your application to multiple lenders at once). It's fine to check rates online but you should know that you may not qualify for a specific rate given your particular situation. Every bank has a specific set of guidelines....for example: self employed borrowers pay a higher rate unless their Schedule C tax documents prove a sufficient income after expenses.

NEVER fall for a voicemail or caller claiming to be a 'person from the mortgage company' offering a ridiculously low rate. Sure there are 1.25% rates but these things usually have a vrey complex structures and unless you recognize the caller--chances are they are just fishing.
NEVER be late on your mortgage payment just before your loan closes. Even one day late will hurt with some banks....and Home Equity lines are the worst...I've had a client be reported for a 30 day late for the $1.70 service charge! One 30 day late payment on your record may put you in a higher risk and higher interest rate bracket (banks will work with prior notice, not excuses).

NEVER be late on your credit card or student loan payments.

NEVER rack up your credit card balances (over 30% balance) before you apply for a mortgage.

NEVER move all your credit balances to one card just before you apply for a really want to keep your cards evenly balanced so none are maxed out. After your loan closes, move balances to the cheaper rate card and keep all your cards open (old is good).
NEVER apply for any new credit cards 90 days before you apply for a mortgage.
NEVER close credit card accounts even if you aren't using them (just lock them up). The FICO scoring system and many lenders look at available credit--so having open cards with zero balances actually adds that particular credit limit to your available credit.

NEVER EVER buy a car or major applicance while waiting for your mortgage to close!

NEVER open new credit cards while waiting for your mortgage to close!

NEVER listen to what a realtor, your brother-in-law or your boss has to say about interest rates or specific loans. These very nice helpful people have no business discussing rates or loans because they don't have the right to full disclosure about your financial circumstances.

NEVER EVER lie about your financial situation to your lender or mortgage broker because they will find out and eventually have to turn you down or scramble at the last minute to find a solution that you do qualify for. (You can say anything you like to your realtor, brother-in-law and boss - we won't tell.) 

Wishing you every credit sanity

Monday, April 04, 2005

Report Credit Fraud!

If someone has taken out a credit card in your name (without your permssion or knowledge) this is a fraudulent act, often involving forgery or impersonation and is a felony. Fraud is serious and Identity Theft can affect your credit indefinately!

Call your local police or sherrif's department. Tell them what happened and provide any evidence you have, for example, a card statement or unauthorized payment withdrawals from your bank account. Get a police file number and copy of the report. You can choose to press criminal charges if this person has caused financial loss. Good luck finding them!

Next: Go to your bank and stop any payments from going out of your account to a suspect card or account. They may reverse the charges unless they came from a debit card that is directly linked to your bank account. You can close the debit card immediately and get a new card with a new number to prevent further charges. Your bank will advise you on appropriate steps.

The problem with most credit card fraud is that you don't often know that this is occurring until the person who took out the card is long gone...usually after they have maxed out the card and left you holding the bill. Eventually the credit card company will find you of course (you aren't hiding after all). If the bill has been unpaid for a few months, you can expect very upsetting phone calls all hours of the day and night by credit collectors claiming to be 'lawyers'. These people are a subspecies of humanity that do not understand or appreciate the fact you might actually be an innocent victim.

Create a Paper Trail:
Most credit card companies will respond to your complaint if you have proof! So keep that police report and make copies for all who call! Ask to see the original credit application on file with the signature and address the person used to get the card...the card company should be willing to fax or mail you a copy. Then you can dispute it's veracity. Unfortunately, if you have a good credit score, predators may successfully apply for several cards in your name using another address and you may never see a bill or statement.Another form of Credit Fraud is someone gaining access to your debit card and using it as a credit card. Since many banks allow you to use your debit card to make credit can do so without a PIN number. One way to avoid this is to ask your bank to put your picture on your card...but not all banks offer this service. The best remedy is to keep your wallet and cards safe! Anyone signing for credit in your name is essentially committing Identity Theft. Unfortunately, unless you report your debit card stolen, it's very hard to get a bank to refund lost funds.

Consumer News:There are bills before state legislatures that would allow consumers to put a freeze on credit information without your permission. There is also a lobby being conducted by large consumer credit organizations to limit this protection, which is now before US Congress which suggests that a federal bill could over-rule individual state laws. You may want to write your congress member. Washington State passed a bill in 2005 allowing individuals who suspect they have been victims of fraud or theft to put a 'freeze' on their credit, preventing anyone from checking their credit without their full authorization.

Federal Trade Commission Site:Check out the FTC's excellent online articles about Identity Theft. You can also report a perpetrator of fraud on their system. Such a person will find it hard to work in the finance industry if they have been reported....and unfortunately some of them do hide out in legitimate organizations to gain access to victims:
Another Consumer Site is Fraud Watch:

To put a Fraud Alert on your Credit Report call all 3 Bureaus:

Equifax Information Services: 800 685 1111
TransUnion Customer Relations: 800 888 4213
Experian: 888 397 3742

Fraud alerts and reporting are free!

You don't need to pay someone a fee to handle this for you...just be vigilent and keep an eye on your report at least once a year to verify no new accounts have been opened. In some states, as in Washington, you can now put a freeze on your credit so no one can check your credit without your permission. Why didn't we think of that sooner?

Wishing you every credit sanity! Loannetter
©2005 susan templeton