Bad Credit Mortgages
July 7th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
I’m considering getting a car loan for a car I already own. I paid in
full when I bought it a few years ago, because I had a lot more money
then than I do now.
So I’ve been looking at websites where car loans are offered. But
they all seem to require that you buy a car from a dealer to qualify
for a loan, or that the loan be to pay off an existing higher-rate
loan. What loan company would be best to get a loan on a car you
already own?
Answer:
Most banks do not offer collatoral loans on one’s own car (which is what you’re
seeking). But some larger pawn shops do. And you can continue to drive it. But
the downside is that you’ll only get about 50% of wholesale value with a high
interest rate.
Or, you can apply for a used car loan. Then sell your car, pocketing the cash. If you take the title to your local bank (any bank), you could ask for a
personal loan. If they won’t give you a personal loan, you could offer the
car as collateral. Note I don’t think it would be smart to do this, but it
is one way that you might accomplish what you are trying to do. I don’t
think you can get a car loan, but a personal loan should be possible.About 6 years ago, my local credit union was having a big auto finance
special. I was able to take my title and vehicle there and receive an
auto loan. If I remember correctly, they would only loan 80% of the
value since I wasn’t purchasing. Try going to a couple of bans or
credit unions, and see what they have to offer.
Note that in my case, I was getting a loan on a typical family sedan
(2-yr old Camry). If you are trying to get a loan on that $100k Benz
to hold you over since being laid off from a high paying silicon
valley job, you will likely get different results.
Also, if you have good credit, keep in mind that you are doing the
lender a favor by giving him business. He is not doing you a favor by
giving you a loan. I have had this attitude every time I have applied
for a loan at a bank, and always been able to negotiate down the rate,
fees, etc.
By admin
July 6th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
I have a friend who’s 21 and bought a new 2006 BMW last week for $36,000
even though she barely makes $10/hour. I know, *crazy* move, but …
I asked her about the financing. Apparently, she went through BMW and
got 10.16% for a 72-month loan. Her monthly is $695. So she pays almost
$13,000 in interest after 6 years.
This does not sound good to me. Granted, this is her first big purchase.
Her credit is also not stellar, but not terrible either. Not many (or
perhaps none at all) late payments, but she does carry a balance on two
cards, going on a few months now. I think her FICO (which she checked
the day before purchase) was 650 or thereabouts.
I guess my questions would be:
* is this a reasonable loan given her credit status?
* if not, is it possible to refinance immediately?
* if so, would it be a wise move?
http://www.capitaloneautofinance.com/ shows some better interest rates,
though of course it’s no guarantee that she’d get those rates.
Mainly, I guess I’m trying to help her figure out what her best move is
(short of selling the car!). Keep the loan as-is and just make the
payments? Refinance now? Refinance later?
For her, the main goal is to keep the monthly below $700. I’m thinking
she could still do this, but with a lower interest rate.
Answer:
Crazy? How about stupid? Her take home pay is roughly $1100 a month and she’s
paying $700 of it on a car payment? In the last year, I spent a little over
$1300 just for gas on my 2000 Taurus, and I drive about 12,000 miles a year. So
she’s down to $290/month to pay for insurance and living expenses. Oh yeah,
does she live in a rent free cardboard box? I assume she doesn’t plan on eating
either… because frankly, there’s no money for that.
I’d say she’s screwed. I’d say she’s terminally stupid, and the car will be repossessed,
and she will have a totally crap credit rating by the time she’s
25.
I see this all the time. I go to serve late rent notices on
tenants who can’t come up with rent for their trailer space in
the mobile home park, but have a brand new $40k pickup in the
driveway. I always wonder how long it will be before the repo
man comes and they’re back to driving an old beater. I agree with you except that I bet she doesn’t have much in her
savings account to pay off the loan when she sells her car for less
than the loan balance. Unfortunately if she waits a year or two, the
difference will probably get greater so your advice is good to follow
asap.
By admin
July 5th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
Does it make sense for an account on a credit report to have a Current
Status of CHARGE-OFF and a Charge Off Amount of $0?
What does it mean for $0 to be charged off?
Does the impact on the credit score depend on the charge off amount,
or only the fact that it was charged off?
Has anyone else ever had a charge off of $0, and if so, what did it
mean?
I know it’s some kind of mistake, but I just want to know if it would
be possible for it to mean anything. If I dispute the impossibility
of it, the dispute might get resolved faster than if I just dispute
the charge off. Assuming it really is impossible.
Answer:
I once had a $2.00 +/- balance on a Discover Card, which I had
cancelled. Rather than bill me for it, Discover on its own issued
something like a “very small amount charge off” and absorbed the cost.
It did not appear on my credit report.
So far that has been the only example of intelligence I’ve seen that
was used toward very small residual credits or debits: when the amount
is small enough so that the cost of mailing a bill or check is greater
than the amount, then cancel the damned thing. A few weeks ago I got a bill in the mail from my propane supplier. I
must pay in advance for them to fill my tank, and in January I sent
them a check for $300 and told them to put $300 worth of propane in my
tank. Apparently they went over a little, because in April I got this
bill that said I owe 29 cents.
First off, I find it amazing that it took them 4 months to bill me.
Then they claimed I was overdue on this payment, and they would turn
it over to a collection agency if I did not pay within 15 days (even
though I never got a bill prior to that). And finally, it cost them
37 cents to mail me the bill.
Needless to say, I got right on it. I only waited until the 15th day,
just so that I would not lose any interest in my bank savings account
on that 29 cents. Then I went to their office and timed it just so I
walked in the door one minute before they were going to close for the
day, and I made sure it took me at least 10 minutes to find the bill
in my pocket and explain the whole story of how I never got a bill
prior to this one, etc. Finally, I carefully counted all 29 pennies,
and re-counted them just to make sure they were all there. Then I
spent the next 10 minutes asking lots of questions about how they went
over on my gas amount, when I asked them to deliver $300 worth.
By the time I finally left their office, they were about 20 minutes
past closing time for the day, and everyone had worked overtime.
I guess that’s what they mean by sweet revenge…..
By admin
July 1st, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
With all the ID theft going on I am thinking about subscribing to a credit
monitoring service but before I do I would like to solicit some feedback.
Does anyone in this forum have any feedback good or bad with some?
Some of what I would like to get for my money is:
free credit reports, as well as score.
Email alerts on suspicious activity
Advice on how to raise ones credit score.
Answer:
I don’t know about any of the services — but you can get your score and
reports, and get financial advice on how to better your credit direct from
the big three: www.equifax.com, www.transunion.com and www.experian.com.
The reports aren’t free, unless you’ve been denied credit, but the cost is
minimal — I think it ranges from as low as $3 to something like $9
depending on what state you’re in. Don’t know about signing up for
suspicious activity alert, I think you can do that also.
Just my preference, but I’d rather do a little extra myself and not go
through a third-party, unless it were to save me significant $$. I think prevention works better than these credit monitoring services.
Shred all credit card documents and anything else with your name,
address, and other confidential information if you don’t want to save
the items. Do not give out your ssn unless it is legally required. Do
not give out your birthday to strangers (that can be used for credit
card fraud). Be careful with whom you deal with when you make credit
card purchases. Do not give out your personal information if you receive
an unsolicited phone call or email asking for that information. The last of these can certainly be had for free. Call your local
consumer credit counseling service, or ask a librarian for help in
finding the information. Of course there’s plenty of information on
line, but you may have trouble sifting the wheat from the chaff.
I have never yet seen a credit monitoring service where the first
item (free credit reports) cost less than it would cost me to get
them directly from the credit bureaus.
That leaves the second item. Only you can decide whether it’s worth
the price to you.
By admin
June 25th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
I found this formula in a math text:
S = P ( 1 - ( 1 + i/n ) ^-nN ) / ( i/n )
where S is the beginning principal, P is the monthly payment, i is the
interest rate, n is the number of payments per year, and N is the
number of years of the loan.
By solving for P, I calculated what I think should be the monthly
payment on my car loan. Unfortunately, it disagrees with the amount
that the finance company figured. I stand to lose $240 over the life
of the loan if I am correct and the finance company is overcharging.
I have been told that there are 2 ways of calculating loan payments.
Simple interest and compound interest. I have no idea what the
difference is. Could that be the root of this misunderstanding?
I also calculated what each of the monthly payments should be and I
can not understand how the finance company came to the figures they
have given me.
Answer:
It is a daily amount based on the principal of the loan and interest
is added to that figure. Say you pay off the loan on the 10th and the
last payment was made on the fifteenth of the previous month, you would
have to pay a daily fee plus interest for the intervening period.
The flaw as I see it in mortgage calculations is that the period is
based in months, not days as the banks calculate it which is another
way to separate you from your hard-earned cash. The formula you used is based on the assumption that the first payment is
made exactly one payment period (one month in this case) after the loan is
made. Since the difference between your calculated value and the amount the
finance company computed is 0.49%, which is half your monthly interest
rate of 0.98%, I’d guess that the finance company computed on the basis that
your first payment was made a month and a half after the loan was made.
Thanks to all who replied. As it turns out Jerry Corrigan is correct.
I checked the date on my loan contract and it was exactly 45 days from
the date of the first payment. I modified my calculations to add the
interest for the first 15 days to the principal before calculating the
monthly payment and like magic I came up with exactly the same figures
as the finance company. Unfortunately, that doesn’t change the fact
that I’m paying about $240 for those extra 15 days (hell, I didn’t
even need those 15 extra days! 
). I guess the moral of the story
is that you have to really pay attention to every little detail when
taking out a loan because seemingly inconsequential factors can cost
you significant amounts of money. I’ve learned my lesson.
By admin
June 23rd, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
Quick Summary: Car Dealer lied about credit score - said it was 690
and is actually 735. They “showed” me a paper but I’m sure in
retrospect it was doctored because I pulled it that evening and it was
45 points higher. I know I know - should have had it on the spot!
Result - payments are 20 bucks more than they should be. Out of
principle, I’m taking it to the Dept. of Consumer Affairs, local Better
Business Bureau and Attorney General’s Office.
Question: Can I obtain, through the finance company via the Fair
Credit Reporting Act or some other statute, the actual credit report
and score (FICO) that was used by the finance company in connection
with the transaction? I know you can when you are “denied” credit,
just not sure when you are “approved”. Know it must be in writing to
the finance company.
Answer:
You best be very careful before you start with the accusations. For example,
there is no single “credit score”. Anyone can create a score. Do you know which
scoring system the dealer is using? And even if it was a FICO score, so you know
which credit reporting agency report was used to feed the FICO score? Each of
the big three agencies generate credit reports that will in turn create a
different FICO score. A 45 point difference between FICO scores is not unusual Here’s the catch though - the Finance Manager at the
dealer HIMSELF, when looking at my Equfax Credit Score of 717, said
“well, we base your rates ONLY on Experian data so your Equifax score
really doesn’t come into play.” I talked to them about the whole
premise of the 3 bureau FICO average, etc. etc. and he said NO, it’s
Experian only.
Well, I pulled Experian and it’s 735 so my accusations are well
grounded. So my original question is really how do I get a copy of the
credit report and FICO used in connection with the transaction?
By admin
June 9th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
I have been involved in a six month dispute with
Bank of America on a consumer loan problem.
On five occasions I have requested an analysis of the
account…. As of today I still do not have an analysis of
the account. I have requested the name and address of
the CEO of Bank America on three occasions and
still have not recieved it. Any one have this information?
Anyone know if there is any class actions suits against
Bank of America in Florida. I believe they were under
investigation by the Florida Department Of State for some banking problems
related to consumer car loans.
Answer:
Write the Office of the Comptroller of Currency; they regulate
national banks like BofA. The OCC is in Houston do a search. If you
are in the right they clear it up real quick. I messed around with
Bank One for 6 months (I tried writing the CEO; waste of time) on a
car loan (wouldn’t release a title on a paid loan) ; the OCC cleared
it up in 2 weeks. Pretty much any library should have this in a business directory; call
the reference desk and ask.
By admin
June 8th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
I have been involved in a six month dispute with
Bank of America on a consumer loan problem.
On five occasions I have requested an analysis of the
account…. As of today I still do not have an analysis of
the account. I have requested the name and address of
the CEO of Bank America on three occasions and
still have not recieved it. Any one have this information?
Anyone know if there is any class actions suits against
Bank of America in Florida. I believe they were under
investigation by the Florida Department Of State for some banking problems
related to consumer car loans.
Answer:
Write the Office of the Comptroller of Currency; they regulate
national banks like BofA. The OCC is in Houston do a search. If you
are in the right they clear it up real quick. I messed around with
Bank One for 6 months (I tried writing the CEO; waste of time) on a
car loan (wouldn’t release a title on a paid loan) ; the OCC cleared
it up in 2 weeks. Pretty much any library should have this in a business directory; call
the reference desk and ask.
By admin
May 27th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
I second that. American Express is really a bunch of thugs in silk
clothing. They claim to have all sorts of buyer protection, and
travel-plan protection. The plain truth of it is DONT COUNT ON IT.
They will bully whichever party is easier to bully.
In my case the “other side” was Eastern Airlines, who defaulted
on their contract to fly me up to Boston and back.
Now mind you, if I as a small business were to enter into a contract
and not deliver the promised goods you’d see lots of lawyers on my
doorstep claiming all sorts of “imaginative” losses for their clients.
I can’t even get Amex to deduct the price of the replacement USAIR
ticket from the amount remitted to Eastern for the useless half of the
Eastern round-trip ticket. Buyer protection. Bah humbug.
This is now 1.5 years after the fact. I have sent 12 letters to Amex,
Easetern, Continental, two collection agency lawyers. I have spent
countless hours on the phone. Amex has added all sorts of creative
charges to my long closed account. The amount they want is now almost
double the desputed part of the bill. Some buyer protection. Buyer
beware!
So much for don’t leave home without it. If I still had one, I’d be
afraid of leaving home! The best buyer protection is not using
American Express.
Answer:
It’s not suprising that folks who hate Amex and go out of their way to
not use it “find no value” in it.
Two months ago I bought a bunch of computer equipment; for some, I used
my Gold Amex; for others, I used my Citibank Gold Mastercard. I had
problems with some of the equipment. I sent some back, and got
replacements shipped overnight. Apparently the big thing these days is
for them to double-charge you and then remove the extra charge when
they get your package returned. Pretty nice, right?
A simple call to Amex gets them to follow-up on this with vendors, and
an immediate credit on your account (in this case, the credit slip was
about 30 days away, after I had gotten my bill). The woman I spoke to
on the phone took the invoice number and the name of the company
(presumably since they have vendor lists, I didn’t have to give her
their phone number — aren’t computers wonderful?). 45 seconds later
came this:
“Your account balance is now $X,XXX … don’t worry about
the extra charge, we’ll take care of it”
Two days later I received paper-confirmation of the details of my phone
conversation. Yesterday, a follow-up letter was sent saying that only
part of it had been resolved, and that I should ignore anything that my
bill says in regards to it. My bill, in the same mail heap, had the
same message at the top of it.
Mastercard, on the other hand, has no such mechanism. I’m paying
interest for some scumbag company out there to jerk my credit memo
around for a while. When it gets settled, will Mastercard drop the
interest I paid? Maybe. Probably not. But after 6 phone calls to
them and the company, am I gonna call back and find out? Not likely.
It’s not enough for me to really worry about; it’s the thought of it
that angers me.
Oh, right, and while this all goes on, my credit limit is being tied up
by this double charge. How about Amex, you might ask?
“What credit limit?”
If anything, having the extra charge bolsters my position with Amex,
since purchase approval is commensurate with experience. (Actually, I
haven’t had a problem with Amex approvals ever since I paid off my car
loan with it two years ago
By admin
May 25th, 2009 at 12:00am
Under Bad Credit Mortgages
Question:
With all the ID theft going on I am thinking about subscribing to a credit
monitoring service but before I do I would like to solicit some feedback.
Does anyone in this forum have any feedback good or bad with some?
Some of what I would like to get for my money is:
free credit reports, as well as score.
Email alerts on suspicious activity
Advice on how to raise ones credit score.
Answer:
I don’t know about any of the services — but you can get your score and
reports, and get financial advice on how to better your credit direct from
the big three: www.equifax.com, www.transunion.com and www.experian.com.
The reports aren’t free, unless you’ve been denied credit, but the cost is
minimal — I think it ranges from as low as $3 to something like $9
depending on what state you’re in. Don’t know about signing up for
suspicious activity alert, I think you can do that also.
Just my preference, but I’d rather do a little extra myself and not go
through a third-party, unless it were to save me significant $$. I think prevention works better than these credit monitoring services.
Shred all credit card documents and anything else with your name,
address, and other confidential information if you don’t want to save
the items. Do not give out your ssn unless it is legally required. Do
not give out your birthday to strangers (that can be used for credit
card fraud). Be careful with whom you deal with when you make credit
card purchases. Do not give out your personal information if you receive
an unsolicited phone call or email asking for that information. The last of these can certainly be had for free. Call your local
consumer credit counseling service, or ask a librarian for help in
finding the information. Of course there’s plenty of information on
line, but you may have trouble sifting the wheat from the chaff.
I have never yet seen a credit monitoring service where the first
item (free credit reports) cost less than it would cost me to get
them directly from the credit bureaus.
That leaves the second item. Only you can decide whether it’s worth
the price to you.
By admin
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