Credit Scoring to Change!
CoreLogic and Fair Isaac Corp known as FICO, recently announced a collaboration that will result in a separate score that will be available to mortgage lenders and incorporates information that will include payday loans, evictions and child support payments. In the future, information on the status of utility, rent and cell phone payments may also be included.
Separately, last month, the Experian, Equifax and TransUnion, began providing estimates of consumer income as a credit report option. And, earlier this year, Experian began including data on on-time rental payments in its reporting.
This new information could either help some potential homeowner’s to obtain a loan or could be detrimental to those who are on the board of qualifying for a loan.
The CoreLogic – FICO partnership won’t result in a credit score that will rule out a borrower for a mortgage backed by Fannie Mae, Freddie Mac or the FHA, which together own or guarantee at least 90 percent of the mortgages being written. That’s because the Experian, Equifax and TransUnion “tri-merge” report required for such a loan does not rely on CoreLogic data. But it could mean either more or fewer mortgage fees or a higher or lower interest rate charged by lenders that in today’s cautionary lending environment have heartily adopted risk-based pricing.
1/3 of Americans OK with Strategic Defaults
With the current state of our economy and housing market, many homeowners are still underwater and the stigma attached to foreclosure is steadily eroding as delinquencies are all too common forcing homeowners into strategic defaults.
A survey by the Pew Research Center found that 36% of Americans believe that it is ok to walk away from their mortgage (short sale or foreclosure) under certain circumstances.
They also found that 59% of Americans state that it is wrong to stop making their mortgage payments and return their homes to their lender, 19% feel it’s acceptable and 17% stated it depended on the circumstances.
This survey was close to the same results from CoreLogic which finds that 11,000,000 borrowers or 23% are underwater.
THINGS TO KNOW BEFORE CONTACTING A SOLAR CONTRACTOR
CCSE (California Center for Sustainable Energy) and California Contractors State License Board also offers the following tips and recommends that you consider the following:
- Get three different contractor’s bids
- Check the status of Contractor’s License at https://www2.cslb.ca.gov/OnlineServices/CheckLicenseII/checklicense.aspx. License must be an active A, B, C-10, or C-46 in order to meet the eligibility requirements for the California Solar Initiative (CSI) Program
- Check the Better Business Bureau or personal references of contractor
- Look for feedback from previous customers, talk to customers who have used the contractor and conduct an internet search to find out about the Contractor and Company
- Find out what the average project costs, how much contractors charge per watt, etc. by downloading CCSE program data at https://csi.powerclerk.com/Default.aspx
- Don’t pay more than 10% or $1,000 whichever is less, as a down payment
- Hire only licensed contractors and ask to see their license
- Don’t hire the first contractor who comes along
- Don’t rush into repairs
- Don’t pay cash, and don’t let the payments get ahead of the work
- Get a written contract
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Promises, Promises….
When you hear the words “I’ll call you right back” or “I’ll be there”, what are the odds it won’t happen? What happened to personal integrity, did it go out the door? It seems we live in a world of excuses or lies.
How important is it to you to give your word? Verbal promises are nothing more than tongue wagging appeasement to fill up the time when one should be speaking the truth.
Think about it, when you give your word, does it really mean something? It does to me, it means you are known to be Reliable, Respectful, Trusted, Dependable and your Integrity is multiplied.
So next time you give your word, mean it. Wouldn’t you rather have someone tell you the truth? Do you want to be known as the one who always says they will call you back or be there and everyone knows you won’t? Take a step forward and think about the benefits derived from making your “word” count for something (a promise kept). If you can’t call them back, or you can’t make it, be up front and just tell the truth that you can’t make the appointment or you have appointments and won’t be able to call back right away. Sometimes, the truth will set you free.
How delinquent mortgage payments effect your credit score
How Delinquencies Impair Credit Scores
Fair Isaac, which developed FICO scores, used a comparison between two people to explain how mortgage delinquencies affect credit scores.
Fair Isaac derived these numbers from a theoretical calculation based on hypothetical borrowers – one with an initial score of 680 and one with an initial score of 780. FICO scores range from 300 to 850.
The hypothetical person behind the 680 score had six credit accounts, while the person with the 780 score had 10. The consumer with the 780 score had no missed payments other than the mortgage; the 680 example had two late payments before they failed to pay the mortgage.
After a mortgage delinquency, the two scores would look like this:
• After 30-day delinquency, 680 score drops to 620 to 640; 780 score declines to 670 to 690.
• After 90-day delinquency, 680 score falls to 595 to 610; 780 score goes to 645 to 665.
• After foreclosure, short sale, or deed-in-lieu, 680 goes to 575 to 595 and 780 drops to 620 to 640.
• After bankruptcy, 680 drops to 530 to 550; 780 declines to 540 to 560.
Source: CNN, Les Christie (04/22/2010)
Posted in REALTOR magazine (04/22/10)
