Me Myself N My Mortgage Theories

Now that the Obama Administration is encouraging lenders to offer mortgage loan modification plans, it’s a common question for distressed homeowners as to whether they’ll modify their mortgages or include it in Chapter 13 plan.

Here’s an example of a similar scenario:

Jack’s wife Sara has credit card debts and intends to file Chapter 13 bankruptcy. Each of her credit card debt amounts to $45000. They have a house in both their names and there are 2 mortgages on it. They’d like to keep the house but they have no savings. Jack is confused as to whether he’d request the lender for a loan modification on the first mortgage or should he just ask his wife to include the first loan in the Chapter 13 plan.

Now, to find out a solution in Jack’s scenario, one needs to consider the 3 factors as given below:

1. What’s the property value?

It is important to know whether Jack is upside down on the first mortgage, that is, whether or not the balance on the first mortgage exceeds the property value. If it is so, then Jack can include the first mortgage in Chapter 13 plan and have the second mortgage eliminated after completing the payment plan under Chapter 13.

2. Is your first mortgage a fixed or an adjustable rate loan?

If the first mortgage is an adjustable rate loan and the rate is likely to adjust while you’re in bankruptcy, chances are that payments could go up thereby making it difficult to repay the mortgage. So, in such a situation, it is better that you request the lender for a loan modification while including only the credit card debts under Chapter 13 plan.

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You must be thinking what is so secret about a credit bureau. Well, I really don’t know but this is what I have heard people saying - “Innovis is a secret credit bureau…”. And, believe me, it feels strange to hear that.

As per my knowledge goes, Innovis Data Solutions is the fourth credit bureau that we have. It is currently into helping creditors compile a mailing list so that the latter can contact their customers and send credit card and related offers.

How is it different?

Unlike all other bureaus - the Equifax, Experian and the TransUnion, hardly does the Innovis sell consumer information to other creditors. It gathers consumer data from credit grantors across the nation and simply gives creditors an idea as to who has bad credit and who doesn’t. This makes the creditors aware and they can then only send their offers to those with good or moderate credit. They will restrain from sending offers to those with unfavorable credit scores.

So, what these creditors have is a clean pre-approved mailing list and that helps them, reduce their mailing costs and prevents them from dealing with risky borrowers.

Interested to know more? Just refer to the discussion on Innovis at mortgagefit forums.

Technorati Tags: Innovis, credit bureau, secret credit bureau

Hi,
Here’s some thing interesting to share with you all. Piggybacking on someone else’s credit records is becoming quite common these days. The primary reason behind this is getting qualified for a mortgage by putting up someone else’s credit records. While it hasn’t been declared a crime yet, it is not something pleasant and ethical.

What usually happens is, borrowers who are less creditworthy but yet wish to have a home of their own, approach companies which offer the so-called credit repair services. These companies attach the authorized credit card accounts of consumers having good credit with those having bad credit. That is, the companies pay people with good credit card payment history so that they’ll allow low credit mortgage applicants to be listed on their used accounts. And, once added, the poor credit borrower shares the same credit record with the good credit consumer.

Now, when a person’s credit is attached to someone else’s credit history, it misrepresents the latter’s creditworthiness thereby making it look much better than it actually is. And, due to such a thing happening, a borrower’s credit score may increase to any higher value. In order to stop this unethical practice, the fair Isaac Corporation has decided to remove the authorized-user accounts from being considered when it will come up with it’s new version of the FICO Score. One more credit score..I guess will borrowers get confused at that..so many scores..will lenders use this new version of the FICO – time will say it all.