Glastonbury, CT

How to settle a collection account: Part 2 of a 3 part series

In Part one I went over validating the debt. Now what? Let's assume 45 days has passed since you certified mail your letter. You are going to find that 80% of your validation letters go unanswered. If the collector failed to respond to your validation request, you want to send them another certified mail letter stating that that have violated the Fair Debt Collection Practices Act by not validating your debt within the required 30 day time frame and as such they may be subject to a $1,000 fine. Also send them a copy of the original letter and your documentation that it was sent certified mail to them and received.

If the collector was one of the 20% who actually respond to a validation letter, you want to examine the documentation they sent you. Did they send everything you asked for? Did they sufficiently prove their case? Almost without exception the answer here is NO.

Let's look at a three examples of poor documentation.

In my first example: I recently received a validation response where the collector forwarded copies of the original charges on a credit card. After I added up the charges they totaled almost $1100. However, their cover letter and what they reported to the credit bureaus said they were collecting for over $1300. Now I could guess that the difference was interest they were collecting but they failed to make that claim in their validation. Since they had only validated $1100 and were demanding $1300 and reporting $1300 to the credit bureaus, they were in fact in violation of FDCPA and exposed themselves to a $1,000 fine. In this example you respond to the collector pointing out their validation only validated $1100 of debt while they were asking for $1300. Be sure to point out that this is a violation of FDCPA subject to a $1,000 fine.

In my second example: I received over 100 pages from a collector validating a cell phone bill. They sent me every page of every bill. What they failed to send me was the original contract and signature showing my client was liable for the debt. Just because they have a cell phone bill doesn't mean that my client was the one who opened the account. In addition, they failed to provide their license as a collector and authorization from the original creditor (in this case T-Mobil) to collect the debt. In this case you want to respond to the creditor that they failed to validate the debt and as such demand that it be immediately removed from the credit reports.

In my last example: I often receive a response from the collection company that our client owes the debt because they said so! I use this example here because it happens so frequently (no I'm not kidding) even though it is ridiculous. Often the collection company will take a piece of their letterhead and state on it that the client owes them money for XYZ. The answer here is obvious. They have not validated that our client owes them money. I like to point out to them if a piece of company letterhead and a statement that someone owes you money was "proper validation" then I have a stack of letterhead here and I'm going to be rich! I've even gone so far as to include in my response to them a piece of my own letterhead with a statement that their company owes me $240 ($120 an hour times 2 hours) for my time in validating this account. I do this just to demonstrate my point that their letterhead and statement does not prove a debt is valid.

In that last installment of this series (come back in 2 days), I will tell you what to do after you fire off these 2nd letters by certified mail!

:)
Matt

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Comparing the Glastonbury market median sales prices for the first half of 2009 ($320,000) to the corresponding period for 2008 ($392,300), the 18+% decrease is significant. This does not mean that everyone in town has lost 20% of the value of their houses; there are many indications that buyers in Glastonbury this year are choosing to be conservative, buying more modestly-priced properties. There are also more modestly-priced homes for sale in town.

If we look at the median sales, by price paid, we see that $320,000 in 2009 bought 119 Spring Street, a restored antique colonial with 2,100 sf, 8 rooms, 3 bedrooms and 2.1 baths on a .35 acre lot with a 2-car garage. The median sale price of $392,300 in 2008 bought 310 Eastbury Hill Road, a 2,144 sf colonial with 8 rooms, 4 bedrooms, and 2.1 baths on a .93 acre lot with a 2-car garage.

The number of houses closing decreased by about 14%, from 148 sales in 2008 to 127 sales in 2009 (based on Multiple Listing Service statistics as of August 13, 2009). For the successful sales in 2009, median days-on-market was just 43---(there were more well-priced homes than last year, when median days-on-market was 49)! The range in prices buyers paid to live in Glastonbury in 2009-- $101,500 to $982,000 was a bit narrower than the first half of 2008 ($165,000 to $1,7300,000).

Mid-way through August, there are 176 single-family homes available to purchase (compared to 133 at the end of January). The prices range from a low of $110,000 for a 3-bedroom, 1-bath ranch home at 1899 Chalker Hill to $5,999,000 for a 5 bedroom, 8.1 bath (12,872 sf) home at 392 Woodland Street. The median-priced property is located at 68 Falcon Lane: 6 bedrooms, 4.1 baths & 4,822 sf offered at $499,900.

Currently, there are 53 houses under contract in town. The highest-priced has an asking price of $1,195,000 and the lowest-priced is just $110,000. The median is 168 Kinne Road, priced at $338,876 (4 bedrooms, 2.1 baths, 2,349 sf, with a 2-car garage on a .92 acre lot).

With over 6 months inventory available and a median asking price of available properties $150,000 higher than the median price of properties under deposit, homes in Glastonbury priced over $400,000 may find the market for the balance of 2009 very challenging --- however, a challenge for sellers may mean some great opportunities for buyers in this price range!

For more information on the value of your home in this market, contact Brent today by cell (860-614-8927) or by email (brentbell@remax.net). You can find this blog directly by visiting www.MyCTRealEstateBlog.com.

If you want the approximate value of your home, and are not ready to be contacted by an agent, visit www.MyHartfordAreaRealtor.com . Fill out as much detail as possible about your house. Brent will respond by email only (unless you request a phone call) with an estimate of your home's current value within 24 hours of your request!

The Glastonbury market is looking better in May 2009 compared to May 2008 (but still is far behind year-to-date numbers for 2008)! There were 46 deposits taken during the month of May. The activity varied by market segment, with more sales of homes priced under $450,000 (28 this year versus 16 for the same period last year). During May 2008 there were only 37 deposits taken for single-family homes.

Under $200,000 5

$200,000 to $250,000 0

$250,000 to $300,000 7

$300,000 to $350,000 6

$350,000 to $450,000 10

$450,000 to $550,000 7

$550,000 to $650,000 2

$650,000 to $750,000 7

Over $750,000 2

The number of houses which have closed for the first five months of the year is down significantly! Through the end of May 2009, there were 71 closings, with buyers paying between $101,000 and $950,000 to live in town. The median sale was 521 Tall Timbers Road. This 4-bedroom, 3-bathroom Ranch is situated on a .57 acre lot and was marketed as having 2,066 sf including the finished lower level. The home entered the market at $339,900 and was reduced to $324,900 while on the market for 86 days and finally sold for $310,000.

In contrast, during the first five months of 2008, 145 houses closed in Glastonbury, with prices paid ranging from $165,000 to $2,100,000. The median sale was 351 Marlborough Road, a 4-bedroom, 2 1/2-bathroom Colonial offering 2,062 sf of living space situated on 1.62 acres. This property sold in 4 days for $405,000 (asking price was $399,900).

As of June 10, there are 170 single-family homes available to purchase in town (up from 133 at the end of January). The highest-priced is 392 Woodland, with an asking price of $5,999,000 (12,872 sf). The median is 439 Foote Road, priced at $539,000 (4 bedrooms, 3 baths, 3,208 sf). The lowest-priced is 489 Chestnut Hill, asking $179,900 (780 sf).

For more information on the value of your home in this market, contact Brent today by cell (860-614-8927) or by email (brentbell@remax.net). You can find this blog directly by visiting www.MyCTRealEstateBlog.com.

If you want the approximate value of your home, and are not ready to be contacted by an agent, visit www.MyHartfordAreaRealtor.com . Fill out as much detail as possible about your house. Brent will respond by email only (unless you request a phone call) with an estimate of your home's current value within 24 hours of your request!

Last weekend, we held a client event at the Bria Day Spa in Glastonbury. I provided delicious cupcakes, champagne, orange juice and a fruit bowl. The owner of the spa offered my clients a discount for their spa services on that day.

Needless to say, we had a nice day chatting, laughing and, of course, relaxing. The spa was lovely and, so were, the staff. We left that event feeling renewed, refreshed and ready for the weekend. My attendees liked it so much, that we are planning another spa day event in the fall.

The massages were welcomed and so were the gathering of friends in the waiting area. My clients are really amazing. They really have become more like family and friends. than, clients. Thoughtful to include a new face in their conversations and to share funny stories about house hunting with Fran to them:)

It's a Good Life,

Fran

As many of us search more and more online, through the internet, there becomes a greater chance for misinformation also. Now, this is just my opinion, but it's based on seeing at least 2 blogs a week now that has wrong information within the topic of discussion. I am seeing this even more so when it comes to FHA loans.

What disturbs me most is that if we don't question the author of that blog, those reading it will believe it and spread that information as the bible per se. I even went as far as to send an author of a blog on AR, telling her that she was incorrect and that she should change her information. Not only did she not respond to me, but she never changed her information. And she continues to write on here. What does that say?

I am speaking to about 2 to 3 consumers per week now, that not only read incorrect information, but they hear it from other loan officers and worst of all, from past borrowers, friends, co-workers, etc, etc. Let me give you two examples :

Example: I am dealing with a borrower that is shopping me against another loan officer that isn't adding in the Fannie Mae cash-out pricing hit of a 1/2 point. She shares this with her husband and this was her response.

"I told my husband everything you told me and he said let him think about this first because his friend just do the loan for $298,000 wiht 4.75% last month with no point and he paid total closing cost about $6,000 something not even $7000 yet."

People, there is not one deal that will ever be the same. This is a great example of this, because her husband's friend bought the house and he borrowed $298,000. This is a cash-out loan and the loan amount is only $152,000. Each company has a specific profit margin, no matter the size of the loan. So if someone has a smaller loan amount, in order to meet that profit margin, they will need to charge more. It's simple math. Please read this for more clarification : I want the same deal my friend got - Please read the comments also.

Another Example : I have a borrower in Long Island, NY who has spoken to 3 different loan officers at Wells Fargo in her area. All 3 of given the same information about monthly mortgage insurance and how it will fall off in 5 years on a refinance, even though they will be at a 88% loan-to-value. This is 110% false and there is even a FHA document that every borrower is required to sign, that explains this. But here is what is scary.... I usually say that if you have 4 out of 6 people that give you the same information, then it must be right. Well, not in this case. As it stands, 3 out of 4 people gave the same answer and it's the wrong information. Moral of the story? Be extremely careful no matter what you hear. Please read : Two wrongs don't make a right.

What other things that I am reading or hearing about that are false or misleading when it comes to FHA loans?

• That you need 5% of your own money and as a down payment. FALSE - you only need 3 1/2% down and of your own money. And that 100% can be gifted from a relative/family member, even to use for the down payment.

• No matter how much you put down on a FHA loan, you will have monthly mortgage insurance for at least 5 years. This is TRUE.

• I read just the other day that FHA credit scores will now have pricing hits for scores under 660. This is 110% false. Yes, some investors already have this pricing adjustment on FHA loans and there will be some more to follow. And when I questioned this person, they came back and stated that it was Bank of America/Countrywide making this change. But his blog made it sound like everyone will be changing, but didn't specify.

• That FHA loans take 45 - 60 days to close. - FALSE - Sure, many lenders are under staffed and many are taking a longer time. But we are still closing loans in 3 weeks. It starts with the loan officer, putting the deal together correctly and with most of the information needed. And if you get the appraisal done in 10 days, 3 weeks should still not be an issue.
  

• FHA is is harder on the appraisal. - FALSE - They are a lot more relaxed than they were in the 90's. And the FHA appraisal is done on the same form as a conventional appraisal.

• FHA loans have more fees than conventional loans or are more expensive. Double false. I can actually be a tad cheaper on an FHA loan because of the higher SRP's, which is called the servicing release premium. Sometimes they might seem more expensive because the loan officer might be taking advantage of the borrower because of their credit.

These are just some of the basics that I am reading about, and that scares me even more. Just imagine some of the other things that these loan officers might be spreading out there then, if they can't get the basics of FHA loans 101 correct, such as your down payment requirement.

Lastly, just because someone claims to be an Expert or Specialist in their field, doesn't mean that it's 100% true or accurate. Don't be fooled by ones title. Please read : To be an Expert or not to be an Expert, that is the question.

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger