Credit/Debt Recovery

Choosing a mortgage lender

Light posting lately because I'm undergoing yet another move. Some of the things I'm experiencing with my mortgage this time around lead me to offer this advice:

Borrow local. Ask your realtor to recommend some good local mortgage companies or banks (or better yet, credit unions) and shop them for the best rate. Even if a national lender offers a slightly better interest rate or lower fees, my experience is proving that it's not worth it.

For one thing, with a smaller, local lender, you can get more personalized service. Establishing a personal relationship with your lender will benefit with you in lots of ways throughout the mortgage process; it's difficult to list all the little ways your borrowing will improve, but those factors will all add up to a more positive experience.

And a local lender will know the local appraisers on a personal level. That makes them more likely to hire good appraisers. I have to say, in all the real estate transactions I've had, my experience with appraisers has been almost universally negative. And this time, using a large lender based out of state, it's worse than ever. They don't KNOW these appraisers, they just got them off a list, and so the work I need done remains on the bottom of a large stack. If I could go back a few weeks and give myself one piece of advice, it would be to choose a different lender, one where I can get my loan servicing in person, not by dozens of emails, faxes, and unanswered voicemails.

Here's a thought; even if you don't borrow local, make sure you can get the direct extension of the individual account manager or loan support person who is handling your mortgage loan. If your lender has you calling into the call center and getting put on hold every time you need to speak to them, find another lender.

Van Bakel Hit by B of A's New Terms

I've blogged before about Bank of America's odious changes to their credit card agreements. The irony is that it ceases to be an "agreement" when one party changes the terms without consulting the other.

Now, one of my favorite bloggers, Rogier van Bakel, has noticed the changes to the terms of his Bank of America credit card account. In his post, he asks the most pertinent question:

Since when is deliberately screwing your loyal customers a better long-term proposition than serving them?

I can't imagine how it could be. If you own any shares of this stock, you'd better sell.

As a credit card user, I'm jettisoning Bank of America altogether for BB&T. I think Rogier should, too. And so should you, if you're a B of A credit card holder.

The Future of Debt Collection

This is one of those blog subjects where we may be a bit ahead of the curve. I've gotten wind of something I think could be a big story, but it's still very embryonic. I can't seem to find any articles about it online, but if I'm right, we could end up seeing this in the dinosaur media in six months or a year.

What I'm talking about is a new tactic some debt collectors are looking into. I'm hearing that they are interested in using social networking sites like Facebook and MySpace to track down and identify debtors. This is a good reason not to include too much personal or contact information in any online profiles you create.

Normally I'm all for people responsibly repaying their debts. But when it comes to 3rd party collectors, I have no sympathy. Too many people come to me for advice after horrible treatment at the hands of collectors; I've been there as collectors have cursed at retirees and threatened to have debtors arrested. A manager recently called me for advice when a debt collector was harassing one of her employees at work. I've seen collectors sell fraudulent debts to each other endlessly, forcing the debtor to dispute them again and again. All this is to say that yes, it matters if debt collectors can find you online, and no, you shouldn't make it easy on them.

Someone asked me why they should care about this; all collectors can do on MySpace is send you an email, which you can just delete, right? I don't think so. The point isn't that they'll waste their time with harassing emails. It's the information they'll have access to that can put you at a serious disadvantage.

Collectors tend to flail about. Depending on what your name is, there may be hundreds of people with the same or similar names as yours (not that the names have to match for some collectors to begin their harassment). They'll call anyone with your last name, lie and say they're an old friend of yours, and try to get your current address. I've seen this first hand, many times. A friend asked me what to do when a debt collector called him trying to track down his younger brother. Any scrap of information a collector can get on you will help them connect the dots and unleash the hounds in the right direction.

Say you're John Smith, and a collector is after you for some disputed college-related debt from 15 years ago. You might be completely impossible to find. But if the collector were able to find you on MySpace, s/he would see what university you graduated from, and then know whether s/he had the right John Smith. Not only that, you might have your current job posted on your MySpace profile, along with your hometown and salary range. Suddenly, a debt collector goes from having an untraceable "John Smith" debt to having confirmation of your identity, your location, salary, job, etc.

Don't think for a minute a collector wouldn't use any tool at his/her disposal to collect on the debt s/he bought for 3 cents on the dollar. Put too many details in your MySpace page or LinkedIn profile, and you could be handing him/her everything s/he needs to make your life miserable.

(Okay, one more thing here, because I always get ignorant trolls commenting "If you borrowed the money, you should PAY IT BACK!" Junk debt buyers will aggressively go after ancient, uncollectable debts, illegally re-aging them, inflating them, and violating the FDCPA at will. Sometimes, if a debtor responds and repays one of these zombie debts, the junk debt buyer figures "we've got a payer on our hands," and they start assigning all sorts of illegitimate debts to that person, hoping s/he will keep paying them off to make them go away. The point is, DON'T negotiate with junk debt buyers, DON'T "PAY IT BACK!", even if it really was your debt 7+ years ago. Give these people the impression that you can be bullied or harassed into paying ancient debts that you aren't obligated to repay, and it'll never stop.)