Posts Tagged ‘credit score’

Can Social Networks Impact Credit Scores?

August 28th, 2013 Comments off

facebook-logo-posted-daily-business-news-manufactured-home-marketing-sales-management-mhpronews-comLenddo, Kabbage  and Kreditech are among the companies that use Facebook, PayPal, eBay or Amazon to determine if people without traditional FICO scores may be credit worthy.  CNN Money tells MHProNews that some of these start ups are finding that while traditional lenders steer clear of no/low credit score customers, that social connections can be a good indicator of a person’s creditworthiness. “It turns out humans are really good at knowing who is trustworthy and reliable in their community,” said Jeff Stewart, a co-founder and CEO of Lenddo. “What’s new is that we’re now able to measure through massive computing power.”  German Kreditech states it uses up to 8,000 data points when assessing an application for a loan. The lesson in part is that what you do online with social networking matters.  ##

(Image Credit: Facebook Logo)

Returning from Default

March 11th, 2013 Comments off

CNNMoney tells MHProNews according to RealtyTrac 4.8 million borrowers have lost their homes to foreclosure since the housing bubble, and another 2.2 million let go of their homes in short sales. But many of them are coming back, and they are searching for a new place to live. Veterans Administration loans can be obtained after only two years out from foreclosure. Fannie Mae and Freddie Mac require borrowers to wait five years and have a credit score of at least 680 plus a ten percent down payment. The Federal Housing Administration’s (FHA) policy is to allow banks to lend FHA-backed loans to borrowers three years after a default.

(Image credit: mortgageorb)

Foreclosure may not Stop the Taxes

February 28th, 2013 Comments off

CNNMoney informs MHProNews that home foreclosure may not end a borrower’s monetary responsibility if the bank does not transfer the deed or hold an auction. Almost two million properties started but never completed the foreclosure process, which can leave the borrower holding the bag for property taxes, fees, and association dues. Often these properties are in lower income neighborhoods that lender’s delay taking possession of to save taxes because it is tougher to sell properties there, according to RealtyTrac. In some cases borrowers have suddenly been hit with large tax bills several years after discharging the mortgage, further damaging their credit score and their credit.

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Turned down by a Bank? Try Craiglist

November 8th, 2012 Comments off

NNMoney reports the latest twist on Craigslist is people looking for co-signers on loans because they do not have good enough credit on their own. A would be borrower in Ohio is offering a tractor and a car as collateral for someone to co-sign a $5,000 personal loan. A student in New Jersey who offered $2,000 to anyone who will loan him $8,000 received numerous responses from scammers, and even paid a matchmaking service to hook him up with someone who would help, but to no avail. While borrowers can easily lose their payment and/or their credit identity, the risk is greater for the lender who may lose their identity, their money, and if the lender defaults, may be on the hook for collection fees, garnishment of wages, and a black mark on their own credit score. John Ulzheimer of SmartCredit says, “You’re co-signing for someone a bank has already identified as someone who doesn’t deserve the loan.” As MHProNews has learned, according to the Federal Trade Commission (FTC), three out of four co-signers are asked to repay loans that have defaulted. A signed agreement between the borrower and lender disavowing the responsibility of the lender will not deter the bank from going after the co-signer.

(Image credit: TotalMortgage)

CFPB to Work Directly with Consumers

October 31st, 2012 Comments off

RealtorMag informs MHProNews the Consumer Financial Protection Bureau (CFPB), in an attempt to better learn the challenges of credit bureau reporting, will work with consumers to resolve credit reporting issues. Assistance may include dealing with incorrect information, improper use of a credit report, inability to obtain a credit score, or problems with identity protection services. The CFPB suggests consumers first go through the individual credit agency’s complaint process before contacting the bureau.

(Image credit: Consumer Financial Protection Bureau)

Replace Credit Scores with different System?

August 18th, 2012 Comments off

Azstarnet says mortgage analytics firm Digital Risk, noting credit scores such as FICO failed to anticipate many strategic defaulters during the mortgage bust years, has developed a 123 point statistical cluster of borrower, market conditions, and property data which will more accurately predict how an applicant may react to financial distress regardless of credit score. Its multidimensional risk evaluation system, called Veritas, is based on analysis of five million loans originated between 2006 and 2011 as well as the performance of 100,000 separate borrowers after their loans were modified. CEO of Digital Risk Alex Santos says Veritas is a valuable tool in distinguishing how applicants with identical credit scores might differ in terms of being a safe bet or not. MHProNews has learned it may be a while (if ever) before this new system is used, but it does raise the possibility of a different method to judge credit worthiness besides a credit score.

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Credit Union Loaning to Lower Denominator

March 5th, 2012 Comments off

A credit union in Michigan is reaching out with their Turning Point Home Loan to people with lower credit scores but with enough financial stability worth the risk. Michigan First CU’s vice president of lending, Chris Maynard says, “Take members who lost their job at the height of the financial crisis. They may have a low credit score because they were forced to make some difficult decisions, and now are back on their feet. But their credit score has yet to catch up. These people are good risks. They have verifiable income and the capacity to pay. We believe it is a good move to give them a chance a little bit ahead of schedule. By starting now at 580 we feel we can appeal to this new and growing segment of borrowers.” The 2010 census indicated 20,000 fewer homes in the Detroit metro area than ten years ago. “So many homes are vacant and Turning Point will help a lot more people get into a home,” he says. NationalMortgageNews tells Michigan First offers five to six percent APR loans for 10-, 15- and 20-year fixed rate terms with a ten percent down payment.

(Graphic credit: Michigan First CU)

Housing Counseling Grants to go on Bidding Block

December 5th, 2011 Comments off

The U.S. Department of Housing and Urban Development (HUD) announces $40 million in grants for housing counseling will be awarded competitively to HUD-approved counseling agencies and State Housing Finance Agencies across the country. Topics include avoiding foreclosure and mortgage scams, improving credit score, purchasing or renting a home, and qualifying for a reverse mortgage. HUD Secretary Shaun Donovan stresses the importance of trying to keep people in their homes. He says, “We fought hard to persuade Congress to restore funding for housing counseling in HUD’s Fiscal Year 2012 budget and I’m pleased that they did so. We will now work to make these important resources available to help families as quickly as possible.” The grants will include $36.05 million for comprehensive counseling and $4 million reverse mortgage counseling. HUD also provides financial literacy education to renters and homeless individuals and families. The application deadline for the approximately 500 grants is January 12, 2012.

(Graphic credit: HUD)