Qualities of a Leader
How often have you heard the comment, He or she is a born leader? There are certain characteristics found in some people that seem to naturally put them in a position where theyre looked up to as a leader.Read More
By George L. Duarte, MBA, CMC
The latest privacy assault outrage has begun on consumers in the last few months and it is called “trigger list” marketing. When you apply for a home loan to your local mortgage broker or banker and they pull a credit report as part of the process, the credit report agencies, Trans Union, Equifax and Experian, will immediately sell your credit and contact information to hungry lenders from around the country who will then bombard you with telephone calls and other solicitations you never wanted or authorized. This is a huge revenue generating scheme by the credit agencies who claim that this is legal and in the consumer’s best interests by giving them more lenders to choose from, when in fact it is an amazing invasion of privacy.
CAMB (the Ca. Assn. of Mortgage Brokers) and NAMB (National Assn. of Mortgage Brokers) have begun to raise hell in Sacramento and Washington, D.C. with our legislators and regulators, to put a stop to this outrageous practice. Be aware there is a way to “opt out” of this practice, by going to the credit bureaus websites, and be sure to write to Rep. Pete Stark, Assemblyman Alberto Torrico, and State Senator Liz Figueroa and complain that this practice must end now.
We have all seen the commercial for freecreditreport.com, which claims that you can get a free credit report from them, as you as a consumer are entitled to under federal law. However, you have to sign up for their “service” for a year, for a fee! They are being slapped by the FTC (Federal Trade Commission), but still are in business. To get a truly free credit report, go to annualcreditreport.com, and you are entitled to one free credit report per year, but BE WARNED: the credit score you get for free may be wildly inaccurate by as much as 100 points, from the one you would get from a mortgage broker (which are accurate), and the credit bureaus are not disclosing why this may be (there is no free lunch, part 1).
By the way, State Senator Liz Figueroa started the credit score disclosure ball rolling when she sponsored a bill several years ago authored by the CAMB, CAR and Consumers Union requiring that consumers credit scores be disclosed to them. I had the pleasure and honor of working very closely with Sen. Figueroa crafting this bill as the CAMB representative. This bill sailed through, was signed by the Governor, and was the model for a bill introduced the next year in Congress, which also easily became a national law. Truly an example of “think globally, act locally”, and another example of California leadership, nationally.
An article on the cover of the 9/11 issue of Business Week magazine discusses in great detail how “exotic mortgages” such as option ARMS, interest only loans, and 100 percent financing can be abused and how consumers can suffer. Consumers interviewed frequently said they didn’t know how the loans worked or were surprised when they adjusted. The article alleged that these loans are frequently bad for consumers and should be curtailed. There are several lessons here:
Research who you are working with. Are they members of their State Broker Association; the Chamber of Commerce; the Better Business Bureau? Are they licensed? Do they have references and happy customers or been in the business locally for some time? It’s not just about the rate, it’s how a loan program fits into your personal needs and overall financial picture. There really are no bad loans, only loans that are not right for the people they have been given to. There are also unscrupulous or incompetent lenders who do not disclose the features of the loans and how they work--that’s how consumers get in trouble.
Here’s a hint: when the next refinance boom hits next year, “no cost” loans will be popular again, and consumers should be aware of low “no cost” rates, because they will frequently have 3 year prepayment penalties that are not disclosed. Beware! The “no cost” loan really does not exist; you are actually paying a higher rate somewhere (there is no free lunch, part 2).