Today, April 20, the House Financial Services Committee is scheduled to mark-up a series of bills that include a bill dealing with debt collection and two bills dealing with the diversity and inclusion practices of banks and other federally-regulated entities. … Continue reading →
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student loan debt Attorney General Urges Action to Help Students With Loan Debt Published April 19, 2021 • Updated 3 hours ago NBC Universal, Inc.<div class=”caption” data-react-component=”NBCTruncate” data-maxlines=”2″ data-maxlinesmobile=”4″ data-readmore=”Read more” data-text=” Connecticut Attorney General William Tong is joining other … Continue reading →
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The Consumer Financial Protection Bureau’s comment period on its proposal to delay the effective date of the final debt collection rule (Regulation F) from Nov. 30, 2021, to Jan. 29, 2022, is now open for 30 days. The CFPB issued … Continue reading →
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The NFCC often receives readers questions asking us what they should do in their money situation. We pick some to share that others could be asking themselves and hope to help many in sharing these answers. If you have a question, please submit it on our Ask an Expert page here.
This week’s question: All my debt has gone to collections. The collections change hands from time to time. How do I make arrangements with the right people to pay my debt and improve my credit score?
It’s very common for debts to be sold multiple times to different debt collectors. It’s a practice highly inconvenient for debtors attempting to pay off what they owe. But, if you are ready to pay off your debts, you could identify your collectors in two ways. One way is to wait for the collector to contact you and ask for a debt validation letter. And the other is to review your credit reports to determine who is the collector reporting your debt.
Request debt verification letters
Federal law gives you the right to request the debt collector to prove that you owe the debt. When you first establish contact, ask the collector to communicate with you in writing and send you a debt validation letter. The collector should send it to you within five days of your conversation. If they don’t, send your request in writing within 30 days of the first contact. The letter sent by the debt collector should include details about how much you owe, the identity of the original creditor, and what to do if you don’t owe the debt.
If the collector cannot provide this letter or refuses to mail you one, most likely, they are not the current owners of the debt. Moreover, they should stop collection immediately.
Review your credit report
Another way to verify who owns your debt is to review your credit reports. Most debt collectors report your debts on your credit reports once they own them. So you can expect to find the original creditor, listing your account as charged-off, and the current debt collector. Once you have the collector’s name, get their address online and request a debt verification letter. If you have multiple collectors for the same debt, initiate a dispute with the credit bureaus to delete duplicate accounts. You can easily dispute incorrect information initiating a dispute with each credit bureau where you found the mistakes.
Paying the right collector
When paying the right collector, never pay with a personal check or any payment method that gives them access to your accounts or personal information. As an alternative, you can send them a money order or cashier’s check. These are relatively affordable options and allow you to communicate via certified mail with a return receipt to keep proof of delivery. Keep detailed documentation of all letters and payments, and ask all creditors to send you proof of payment. Then, review your credit reports to ensure they show your debts as paid.
Paying off your collections is a good start to rebuild your credit and increase your score. However, it is not enough. You need a strategy based on your current situation. In very general terms, a good score comes from paying on time, keeping balances low, and getting new credit sparingly. If you think you need additional help to pay off your debts and rebuild your credit, don’t hesitate to contact and an NFCC Certified Financial Counselor. They can help you understand the collection process and develop a personalized strategy to boost your score in time. Counselors are available over the phone and online. Good luck!
The post Ask an Expert: How Do I Pay the Right Debt Collector? appeared first on NFCC.
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There’s no question the COVID-19 pandemic has caused unprecedented economic hardship for so many, including those struggling to make their mortgage payments. To help arm consumers with the knowledge they need to make proactive and informed decisions now and in the future Freddie Mac launched #HelpStartsHere, an initiative focused with providing affected homeowners with options to stay in their homes.
Homeowner Resources
As part of the #HelpStartsHere initiative we’re pleased to share two key resources that were developed to help educate you and address the housing challenges you may be facing.
Sustaining Homeownership in a Crisis: An Interactive Guide for Homeowners
This interactive guide, available in English and Spanish, provides information and resources on:
How mortgage servicers can help clients that have experienced job loss, reduced income, illness or other issues related to COVID-19 that impacts their ability to make their monthly mortgage payment.
Steps to take to stay organized and on track if you pursue mortgage relief options.
Avoiding scams such as “foreclosure rescue fraud.”
Overcoming Today’s Homeownership Challenges
This online resource, available in English and Spanish, guides borrowers who are seeking assistance as they look to evolve post-COVID. There are four profiles featured, each facing different challenges and seeking guidance:
Existing homeowners who developed a workout plan with their Servicer but are uncertain of their future options.
First-time or new homebuyers facing a COVID-19 hardship.
Borrowers looking to sell their home during COVID conditions.
Future homebuyers seeking financial planning and mortgage assistance.
CreditSmart® Homebuyer U – Now Available in Spanish!
In addition to our #HelpStartsHere resources Freddie Mac offers CreditSmart® Homebuyer U,
a comprehensive homeownership education course offered through an interactive, guided experience. It offers six modules, each focused on key learning principles to promote education, homebuyer preparedness and financial management.
If you’re struggling to make your mortgage payments due to the COVID-19 pandemic, or wish to refresh your learnings about homeownership sustainability, we encourage you to turn to CreditSmart Homebuyer U with particular focus on Module 6: Preserving Homeownership.
Module 1: Overview and Introduction of the Homebuying Process
Module 2: Managing Your Money
Module 3: Your Credit and Why It Is Important
Module 4: Getting a Mortgage
Module 5: Finding a Home and Closing on a Loan
Module 6: Preserving Homeownership
Participants will enjoy numerous benefits including:
Ability to toggle between English and Spanish translation throughout the course.
Flexibility to take the course at your own pace using multiple devices (mobile phone, tablet, desktop).
Functionality allows users to log in/out of the tutorial from any device while saving progress on-demand.
Compatibility with multiple internet browsers.
Convenient access to course completion certificate.
User support available in English and Spanish.
Printable certificate of completion with the user’s name is generated after successfully completing the final quiz. A copy of the certificate can also be provided to a co-borrower, the lender or other housing professional.
The successful completion of this tutorial satisfies the homeownership education requirement for the Freddie Mac HomeOneSM and Home Possible® mortgages which offer a low, 3% down payment option.
During uncertain times and financial hardship understanding the options available to sustain homeownership is vital to making proactive, informed decisions.
Help starts here ̶ with Freddie Mac.
The post Freddie Mac Resources for Homeownership: In Times of Crisis, #HelpStartHere appeared first on NFCC.
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OLYMPIA – Washington state Insurance Commissioner Mike Kreidler on Tuesday issued an emergency rule prohibiting insurers from using credit scoring to set rates for personal property for three years after the current coronavirus pandemic is declared over. The rule comes … Continue reading →
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TransUnion Global Payment Hierarchy Study observes consumer credit behavior in five countries CHICAGO, April 14, 2021 (GLOBE NEWSWIRE) — In times of crisis, repayment prioritization of credit products often provides a clearer view of how consumers are meeting the financial … Continue reading →
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(Reuters) – Wells Fargo & Co reported first-quarter profit ahead of Wall Street estimates on Wednesday as the bank set aside less money to cover soured loans. The fourth-largest U.S. lender said profit rose to $4.74 billion, or $1.05 per … Continue reading →
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Today the Department of Education announced it will halt collections on student borrowers in default with loans under the old bank-based federal student lending system. The CARES Act passed in March 2020 suspended payments and interest on federally-held student loans … Continue reading →
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The Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Economic Policy met Tuesday for a hearing on “The Student Debt Burden and Its Impact on Racial Justice, Borrowers, & The Economy.” Subcommittee Chair U.S. Sen. Elizabeth Warren, D-Mass., … Continue reading →
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