Joel's Jolt

The watchdogs are on the trail

Joel Pate — Tue, 15 May 2012 13:26:34 +0000

This is a recent article from the Columbus Dispatch:

The watchdogs are on the trail

New consumer agency, state attorneys general checking credit reports

By Jill Riepenhoff and Mike Wagner
Sunday May 13, 2012 8:33 AM

WASHINGTON — Mistakes in credit reports cross political-party lines, but the new federal consumer protection agency assigned to regulate credit-reporting companies faces some significant hurdles in that task.

Chief among them is that a majority of Senate Republicans say the office has too much power.

They used that argument to reject President Barack Obama’s appointment of former Ohio Attorney General Richard Cordray to lead the Consumer Financial Protection Bureau.

Then, in a political maneuver that angered the Republicans further, Obama appointed Cordray on Jan. 4 during a congressional recess.Cordray says he intends to push forward soon with regulation of the credit-reporting agencies to address the thousands of consumer complaints highlighted in last week’s four-day Dispatch series, “Credit Scars,” but it’s unclear how quickly he will see results.

So a group of state attorneys general, led by Ohio’s Mike DeWine, are planning to attack the problems from another front. And such efforts by attorneys general on behalf of consumers in the past have led to significant changes.Attorneys general have a long and successful record of seeking justice for consumers: They won settlements against big tobacco in 1998, a big drug manufacturer in 2006 and, in a landmark $25 billion settlement, the country’s largest, with mortgage servicers earlier this year.

Ohio attorney generals serving during those times — Jim Petro (drugmaker) and Cordray and DeWine (both mortgage servicing) — all were on the front lines pushing for change.“You don’t want to hear that 50 attorneys general are on the line,” DeWine said. Such previous actions have produced results “because they’ve worked together.

You get people’s attention real quick.”Relief for consumers facing credit-report errors likely won’t happen quickly, but DeWine said he and other attorneys general are committed to solving the problem.

“It’s a shocking mess,” DeWine said. “We’re not going to let this die.

These agencies hide by responding to the attorneys general and nobody else.

”The Dispatch investigation found that when consumers sought help from an attorney general, their problems most times were resolved quickly. But when they tried to battle mistakes on their own, they had much less success.

“The ultimate club is the Fair Credit Reporting Act. The AGs have authority to file a lawsuit under that act.

That ultimately could happen,” DeWine said.The Consumer Data Industry Association, a Washington-based lobbying group, speaks on behalf of the three national credit-reporting agencies: Equifax, Experian and TransUnion. It did not respond to requests for comment. Previously, it said that the agencies do everything in their power to produce accurate credit reports and respond to consumers’ concerns.

But the agencies are facing scrutiny like never before.For Cordray, the way in which he was appointed “could lead to legal challenges of any CFPB actions,” Rep. Shelley Moore Capito, a West Virginia Republican, warned at a recent House Financial Services Committee hearing.

When Cordray appeared before the committee in March to brief members on the accomplishments of the young consumer-watchdog agency, he didn’t talk about plans to regulate the three national credit-reporting agencies. Rather, he spent hours defending the existence of the agency and vowing that he would not head off on a power trip that could damage the country’s fragile economy.

Before the hearing began, Capito and Texas Republican Jeb Hensarling each greeted Cordray with friendly smiles and small talk.

When the hearing began, they were among a long line of Republicans who offered blistering commentaries and veiled threats.

“You are either an unconstitutional appointee or an unlawful appointee … and you lack credibility,” said Hensarling, before adding that Cordray shouldn’t take his remarks personally.

Lost in the rhetoric are consumers who face financial hardships because their credit reports contain mistakes that they cannot correct. A yearlongDispatch investigation found that the federal law that governs credit reporting is fraught with loopholes and obstacles that make correcting mistakes difficult, if not impossible.

The newspaper collected and analyzed nearly 30,000 consumer complaints filed with the Federal Trade Commission and attorneys general in 24 states that alleged violations of the Fair Credit Reporting Act by Equifax, Experian and TransUnion.

The complaints document the inability of consumers to correct errors that range from minor to financially devastating.

The newspaper’s investigation prompted a bipartisan call for investigations and reform. Rep. Steve Stivers, a Columbus Republican who sits on the Financial Services Committee, has said that fixing the credit-reporting system should be a priority and not a political issue.

Since the series was published last week, numerous consumers have contacted DeWine’s office either to file complaints or seek information about their credit-reporting history. Nearly 90 of them came when DeWine’s staff took calls during a WBNS-10TV news broadcast last week. The phone lines lit up for the full 90 minutes as consumers asked where they could receive free credit reports, or complained about possible identity theft and problems with their credit reports.

Cordray reviewed a summary of the newspaper’s findings in March then offered the following comments about credit reporting:

Q: What is your reaction to the Dispatch’s “Credit Scars” findings?

A: I think if there are systematic and significant errors in people’s credit files, that is of great concern because of all the ramifications credit files mean for people now. It may be accessing credit, but they are paying a higher interest rate. It may be losing out on jobs. And people often have very little understanding on this influence over their lives, and they don’t know how to protect themselves. And when they go to try to protect themselves, it’s very difficult to get satisfaction.

Q: In a Dispatch Poll, 15 percent of participants said they have never seen their credit report. Why do you think some people have ignored their credit reports or don’t check them on a regular basis?

A: You know how people set a timer so that they check the batteries in their smoke detectors? Well, there ought to be times (in) a year where we set a date so we are pushing people to check their credit reports. It’s a way to protect against ID theft and the consequences of it, and you can protect against the mistakes made in your file. (Credit reports) are not well known to people. It’s not something that is ever in front of their face. In fact, most of the time when they go to enter a credit transaction, this is all sort of behind the curtain. They just learn that they are denied a loan or they are just given an interest rate. They think it’s the market rate, but it’s 2 or 3 or 5 points higher than someone else would have been given. But they just assume that it’s like prices on the shelves where they are the same for everybody. Nobody explains it to them or takes the time to explain it to them.

Q: Consumer advocates say that one of the biggest problems with the credit-reporting agencies is that there are no incentives for them to help consumers. Are there enough incentives for those agencies to respond to consumers who experience problems on their credit reports?

A: The main paying customers for this information are financial institutions and others who access it. There may be problems in terms of accuracy, in terms of helpfulness, and getting problems resolved. Everything that would be done to improve accuracy costs them money. There is a broad volume of activity that they do, and they try to make it as efficient as possible. But then dealing with the individual consumer who has a problem becomes very time intensive, labor intensive. And system processes are not good at doing that.

Q: The Consumer Financial Protection Agency is expected to announce in July how it will regulate the three national credit-reporting agencies. Generally speaking, how will your oversight differ from that of the Federal Trade Commission, which had overseen those agencies since 1971?

A: I think the most-significant step is that we have authority over the largest banks and then we have authority over nonbanks. Our ability to go in and supervise and correct problems, often without having to file lawsuits, is a major step forward in terms of overseeing and subjecting those folks to meaningful accountability.

Q: How can we make parents and others more aware of children’s identity theft?

A: I have been thinking an awful lot about financial literacy. There ought to be an initiative with kids in high school to do some of the minimal things that can be done to get them off to a good start as they go out into the world. There are things they can learn, and if they start with a better credit score, it puts them on a better trajectory. Parents, families and schools know very little about this.

Justice Department Requires Credit Repair?

Joel Pate — Thu, 03 May 2012 13:58:19 +0000

The Justice Department announced that it had reached a settlement of alleged violations of the Servicemembers Civil Relief Act (SCRA) providing damages and credit repair to 26 servicemembers whose cars were towed and sold while they were on active duty without obtaining court orders as SCRA requires. The settlement resolves allegations that B.C. Enterprises Inc ., d/b/a Aristocrat Towing and Aristocrat Towing Inc. (collectively “Aristocrat Towing”), violated the SCRA when it towed and sold these servicemembers’ vehicles without obtaining court orders. The case began with a referral from the United States Navy to the Justice Department after Navy Lieutenant Yahya Jaboori returned from deployment in Iraq to find that Aristocrat Towing had towed and sold his vehicle without a court order while he was deployed.

The SCRA protects the rights of servicemembers while on active duty in the military by suspending or modifying certain civil obligations. Under the terms of the settlement, which must be approved by a federal court in Virginia, Aristocrat Towing must pay a total of $75,000 in damages and repair the credit of the identified aggrieved servicemembers.

“Servicemembers make great personal sacrifices. We will ensure that the rights of the brave men and women who serve and protect us are protected at home,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “This settlement sends a strong message to businesses nationwide that the Justice Department will enforce the SCRA to protect against the taking of servicemembers’ property without first seeking court orders as is required by law.”

“No member of the military should come home from deployment to find their car has been towed and sold,” said United States Attorney for the Eastern District of Virginia Neil MacBride. “Businesses should be aware of the many rights that SCRA gives to servicemembers and their families, and businesses should also be certain that we’ll work tirelessly to ensure that those rights are protected.”

This lawsuit, filed in 2008, was the first filed by the Civil Rights Division under the SCRA. The Civil Rights Division received enforcement authority under the SCRA in 2006, and has since filed suit and entered into a number of settlements with defendants ranging from local landlords to the nation’s five largest mortgage servicers.

Servicemembers and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office. Please consult the military legal assistance office locator at http://legalassistance.law.af.mil/content/locator.php. Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov . Related Material: Consent Order

Contact: Department of Justice Main Switchboard – 202-514-2000

The FHFA’s Bulk REO Rental Plan Makes Sense

Joel Pate — Mon, 30 Apr 2012 18:30:00 +0000

Since late 2008, John Burns Real Estate Consulting has been pushing for a program that allows the owners of REO to sell the homes as rental units. Financially, we have nothing to gain other than the benefits that accrue to everyone from a stable housing market.

Two years ago, a Housing and Urban Development Department executive agreed with us, calling it a “no-brainer” and championing it through Washington.

But at last year’s REThink conference hosted by HousingWire, the consensus view of attendees seemed to be that it was a bad idea. It became clear to me over the course of the conference, however, that many of the attendees benefit from transactions that involve a sale and a mortgage. They were speaking from self-interest rather than a belief in doing what is right for the country.

At the risk of being castigated, let me lay out my thinking. Encouraging investors to buy REO homes and rent them out helps stabilize home prices and neighborhoods and improves REO asset recoveries. It also prevents rents from rising too quickly and removes a huge cloud hanging over the future of the housing market.

The most effective rental REO policy would involve a joint-venture structure that allows experienced professionals to manage the portfolio according to free market conditions, with the only significant stipulation being that they can sell no more than 20% of the homes in any given year.

The best economic recovery would include seller profit-and-loss participation, similar to the successful policies utilized by the Federal Deposit Insurance Corp. and, when feasible, a market-rate lease option to the foreclosed homeowner. That would eliminate the costs associated with vacancy and leasing while also providing relief to the former homeowner.

Finding Stability

We estimate that more than 8 million distressed home sales will occur over the next five years, representing approximately 30% of all transactions. This will put downward pressure on home prices, unless the government-sponsored enterprises, HUD and the major banks implement a massive rental REO policy. Regulatory and political hurdles need to be removed to allow the decision-makers at these institutions to make the right decisions. Home prices cannot stabilize until the volume and percentage of distressed transactions declines significantly.

Vacant homes contribute to neighborhood deterioration, and there were approximately 2.4 million more vacant homes than normal at the end of 2011, which we forecast will take until late 2014 to normalize. (Our forecasts vary significantly by market and neighborhood.) A rental REO policy will fill up the homes much more quickly than the current path, which keeps many homes vacant for months.

Investor Involvement

Investors already play an enormous role in determining home prices, as they are purchasing more than 19% of all homes, according to the National Association of Realtors. Some of these investors “flip” the homes for a quick profit, while others rent the homes for a marginal annual return with the potential upside of future price appreciation. Selling homes in bulk will and can recover more than selling individually because bulk buyers will be able to purchase homes without the expense of brokerage commissions and other selling expenses.

They also will have the ability to finance their portfolio with debt, allowing bulk buyers to pay more than individual investors who pay with all cash. Finally, the seller can reduce carrying costs, including overhead and transaction costs, including brokerage commissions.

Limited restrictions on the buyers, as well as access to quality due diligence, will help increase the price paid. An REO rental policy should not be mandated for all homes, as there are instances where the economics are more favorable for disposition.

We believe rents will rise as the economy recovers, unless there is plenty of rental supply. More rental supply will help moderate rental increases, which will hold down the cost of living for renters and allow renter households to save and to use more of their disposable income to help the economy recover. Also, since “owner equivalent rent” is 23% of the consumer price index, lower rental rate increases will have the additional benefit of limiting inflation, saving taxpayers huge dollars on entitlement increases tied to inflation.

The shadow inventory of future distressed sales is keeping investors and homebuyers on the sidelines. A rental policy that reduces future distressed sales will alleviate much of their concerns and contribute to growing confidence in a housing rebound.

Answering the Critics

Critics of the rental REO policy tend to fall into three camps: 1) transaction-based companies such as real estate agents and appraisers, 2) REO/servicing employees who want to preserve their jobs, and 3) armchair quarterbacks, some of whom are granted media airtime because they know a lot about a particular segment of the housing market, but have not studied this issue in depth.

One key criticism is that there is better asset recovery on individual sales than bulk sales. We estimate that there is a 10% cost savings associated with a bulk transaction, and that a significant rental REO effort will prevent further deterioration in home prices. The notion that bulk investment buyers will pay less for homes is most likely not true, given that 29% of all transactions are already to cash buyers/investors.

Critics contend that investment groups will bid low to cover the risk of unknown capital expenditures. The seller solves this problem by providing excellent information on the portfolio.

Some argue the government is giving up large future profits to investors, but the FDIC adopted a transaction structure that returns a portion of the profits to the FDIC after the investor has received a reasonable return, essentially guaranteeing a FDIC share in any windfall, if it occurs. This same policy could be adopted by the seller.

One hurdle is bank capital requirements. A new policy that allows banks to hold “investment in housing rental REO” with minimal capital set-aside required would help the banks make the right economic decisions.

We also don’t buy the argument renting REO is merely delaying the distressed sale to a future date. The entire addition to the single-family rental stock will be, at most, 9 million homes, and I can’t imagine a scenario where 15% or more of those owners decide to sell in the same year. If they did, that would still be fewer distressed transactions than in 2010 and 2011.

The properties should be sold to investors who work with professionally managed and experienced property management companies who have a great track record of property maintenance and fairness with tenants. We don’t believe it wise to have the federal government act as the property manager.

Some critics contend there are no large property management companies to handle the growth. There were 12.6 million single-family rentals in 2010, and we believe there will be 17.5 million in 2015, for a 7% annual growth rate. With this program, that growth could possibly go to 21 million, an annual growth rate of 11%, which we believe can be reasonably achieved.

Capital isn’t interested say some critics. Based on the phone calls we have received, and the more than 4,000 submissions the FHFA received, we are confident that this is not an issue. We agree with critics who say we need to let the free market take over. Current regulatory practices and political realities prevent the free market from occurring. Capital restrictions on REO investments prevent bank executives from renting significant REO. Also, repeated threats of shutting down Fannie Mae and Freddie Mac have caused the GSEs and their regulator to delay the resolution of REO. Banking and GSE leadership should do what is best for their shareholders/conservators, which also happens to be in the best interest of the U.S. economy and taxpayer.

Taking our pain via expedited foreclosures just won’t cut it. With 12.5% of mortgages currently delinquent, allowing an expedited foreclosure process could result in another collapse in home prices, resulting in rising bank failures and a recession. While we all want this crisis to be over, the pundits who call for laissez faire have not completely thought through the ramifications, or more likely want a better investment opportunity when home prices tumble.

Bank’s loaning money to consumers with bad credit

Joel Pate — Thu, 12 Apr 2012 13:04:13 +0000

This morning The New York Times reported that our nation’s banks are “back to lending to risky borrowers. As banks look to make up for fee income barred by new regulations, they’ve gone back to offering loans and credit cards to borrowers with bad credit.” If you read the rest of the story you’ll quickly learn that most of what the report is talking about is credit cards – not home mortgages. I’m pretty confident when I say this: no major bank in this big nation of ours will ever make another subprime loan with less than 40% down and a mile high of paperwork. Those days are over for good.

Of course, I continue to believe that there is a dire need in this country for nonbank subprime lenders that operated similar to the way Aames Financial, Associates First Capital Corp., and The Money Store ran their businesses in the 1960s and 1970s. These were private firms that made home equity loans, held the paper in portfolio, and made certain they knew their customers. Don’t get me wrong. These firms were not exactly boy scouts when it came to some of their lending practices, but at least they were willing to extend loans to consumers with damaged credit. Their delinquencies were low – as was their market share but they provided a valuable service and made a decent living. When might we see that again?

Soon. There is nothing wrong with lending money to borrower that you know, that has a good job as long as their income will support the repayment plan. Where the problem arises, and will always arise, is when you loan money to someone that can’t afford to pay you back.

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To your Success

Joel S. Pate

Joel Pate is an entrepreneur and founder of multiple successful companies in the mortgage, real estate, and marketing space. For more information on Joel, contact him at joel.pate@scoreinc.com

PS: Plan to join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/249243630

FHA Makes Small Change to Credit Dispute Mortgagee Letter 2012-13

Joel Pate — Tue, 03 Apr 2012 20:30:32 +0000

The Federal Housing Administration has made a last-minute attempt to soften new underwriting guidelines that penalized borrowers with ongoing credit disputes that went into effect April 1, the agency will allow loans for borrowers with disputed credit accounts or billings of less than $1,000 to be processed by FHA’s TOTAL automated underwriting system. The clause affected debts that were at least two-years old.

As originally conceived, all borrowers with credit disputes had be processed manually – and approved by a FHA delegated underwriter.

On its face, the change should make the processing of loans faster for some borrowers.

However, borrowers with credit disputes equal or greater than $1,000 must pay them off or start a repayment plan if they want to be considered for a FHA single-family loan, according to Mortgagee Letter 2012-13.

Some lenders are concerned these tighter requirements might block many more borrowers from qualifying for a mortgage than FHA officials expect.

Last Friday, FHA issued a clarification that gives the borrower the option of explaining in writing why a collection occurred and why it has not been paid. The delegated underwriter can approve the loan application if the explanation “makes sense and it is consistent with the other credit information in the file,” FHA says in a March 30 email to FHA lenders.

We will keep an eye out for the latest information and share it with you as it becomes available.

Joel S. Pate
President
Scoreinc.com

Joel Pate is an entrepreneur and founder of multiple successful companies in the mortgage, real estate, and marketing space. For more information on Joel, contact him at joel.pate@scoreinc.com

PS: Plan to join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/249243630

Are You A Good Manager? Part 2

Joel Pate — Tue, 20 Mar 2012 14:29:14 +0000

Part 2

Next, managers motivate and communicate. The work of the manager is not complete until you develop a continuous process that will keep your team well informed of the plans and purposes of their job and how they fit into the organization. Nothing de-motivates an employ more than a lack of effective communication. I say effective because all communication is not created equally.

A key to effective communication is to understand the personality profile of all of your team members and of yourself. I recommend the DISC personality profiles for this. They are easy to learn and inexpensive.

The point is that you have a method that you prefer to use to communicate to others. And in this case, your employee has a method in which they receive information, digest it and use it to YOUR benefit. You must make sure that your communication to your employee is indeed in line with the way they actually are motivated. If you don’t know what I am talking about you can probably stand some improvement in this area.

Managers must also measure. In every business there are many things to measure but only a few are critical. Your profit for example is critical but so is your cash flow. The number of new leads turns into the number of new applications. The conversion ratio is critical to keep tabs on. Make a list of all of the measurable variables in your business and maintain a daily or weekly log for each. If they are not in line with your projections, you must do something about it now. Failure to act or to fully understand the new reality is a failure to manage.

Finally, managers to develop resources and typically that means people. I find that I work well with professionals; so many of my resources are other companies. How do you work best? Directly through employees or through contractors? Either way, they must be developed and recruited. Develop a plan to continuously monitor the needs of your enterprise to determine the adjustments that needs to be made. If you don’t have any, you are not doing something correctly.

Consider this: Your rolodex, electronic or not, is your resource. It is your asset. It is your ability to reach out and get things done through people. Are you managing it?

The action item for today is to step back from your operations and from your life for about an hour or so. It doesn’t take long to clear your head. Begin to put down on paper your objectives. Focus on the organization that is needed. Don’t get too deep. Just think through the next few days of what you want to accomplish this month on various objectives. Consider now, who has to be motivated to accomplish these task. How will I measure the results? Consider outsourcing the need for the resource if possible. If you need to develop a website for instance, don’t try to learn to do it yourself.

Remember that each step towards your objectives is the best step that you can make.

To your Success

Joel S. Pate

Joel Pate is an entrepreneur and founder of multiple successful companies in the mortgage, real estate, and marketing space. For more information on Joel, contact him at joel.pate@scoreinc.com

PS: Plan to join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/249243630

Are You A Good Manager?

Joel Pate — Tue, 28 Feb 2012 22:08:51 +0000

Whether you like it are not, you are a manager. The only question: Are you a good manager?

As adults we manage many facets of our work as well as personal life. And we are responsible to ourselves to make the best of every minute of every day-if only to make it more enjoyable. These principles apply to work, home, charity-to every activity in which you spend time and energy.

There are five basic operations in the work of a manager. Managers can improve their performance by improving the results they achieve on the following activities:

Establish Objectives. The first job of a manager is to establish the correct objectives for your organization/life. Only by limiting your concentration to a clearly defined set of objectives will you be able to gain the focus you need for success.

Too much energy is wasted on events that are aligned with unclear objectives. Stop and ask yourself often, why am I working on this project? Does it meet my clearly defined objective(s)? If it doesn’t, consider eliminating it from your day as soon as possible.

With a clearly defined set of objectives, it is time to consider what needs to be done in order to reach your objective. The first question to ask: Do I have the resources needed to accomplish this objective? If you do not, determine what you need and do your best to obtain it before you commence. There is nothing worse than beginning a project and then abandoning it without meeting the objective. Too many times we waste such valuable time and resources because we did not critically examine our ability to complete a project before we started. You would be better off spending the day at the beach!!!

Managers manage people as well as the objectives. Most projects require the development and the management of resources. Do not limit yourself by limiting the resources that you have in your sphere of influence. Many times it is better to engage an outside resource than to develop your own.

For example, I recently hired an Infusionsoft Expert for $100 per hour to complete a project. What is the project? Develop Infusionsoft using a clearly defined sales process flow chart into a complete system and then train my team on how to use it.

For less than $1000, we will not only have the system developed but will be trained on its use.

Regardless of the type of resource, they all require that you communicate clearly to them the objective and the goals to be of value. Be careful that you do not engage resources or employees without a clearly defined objective for in all cases they will help you define the objective with their own benefit in mind. It will be a waste of money or become very expensive.

Of course commonly opportunities arise as you go through your day focused on your objectives. While you need to have an open mind, BE CAREFUL, because most of just distractions.

Key: Be clear about your objectives prior to committing resources.

Managers must organize. Organization is a primary duty of the manager. With a clearly defined objective you can now begin the job of organizing the work that needs to be performed as well as development of the non-negotiable that you will deliver. I find that companies that do not have non-negotiable waive key elements of the protocol necessary to maximize results.

For example, if your business has a complicated sales process that requires training, require the participants to submit to training. No ifs ands or buts. Maintaining this important decision will help you grow your business in a focused manner. Elimination of problems is best when done from the beginning.

In addition, you must analyze your activities and decisions. What are the key components of your enterprise? What are the variables of your forecast? Managers must manage to those variables on a regular, even daily basis, if they hope to accomplish the goals established.

How many customers must come through your door on a daily basis to be successful? How much must they spend? Duration of the revenue activity? Productivity per hour for your staff? Percentage of re-occurring revenue units? These are just a few of the measurements for your business. The key is to measure and then soberly understand if you are meeting your targets.

Only the accomplishment of specific measurable events will culminate in the end result of your objective. Don’t get to the end of the month to determine that it was not a good month. You can determine it on a daily basis if you have the proper analysis of data.

To be continued……..

To your Success

Joel S. Pate

Joel Pate is an entrepreneur and founder of multiple successful companies in the mortgage, real estate, and marketing space. For more information on Joel, contact him at joel.pate@scoreinc.com

PS: Plan to join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/393936198

Credit Report Accuracy Holds Back Housing Recovery

Joel Pate — Tue, 21 Feb 2012 15:15:41 +0000

According to Ben Bernanke, Federal Reserve Chairman, in a speech at the National Association of Homebuilders International Builders Show in Orlando, Florida “The state of the housing sector has been a key impediment to a faster recovery.”

If the state of the housing market is the problem, what are some of the solutions?

Take into account a few facts:

“Millions of consumers are at risk of being penalized by inaccurate credit report information and inaccurate credit scores,” according to study cited by the General Accounting Office of the United States.

National Association of State Public Research Group report concludes “…79% of credit reports contain some type of error and that about 25 % of all consumer credit reports may contain errors that can result in the denial of access to credit.”

The Federal Reserve Board Bulletin reports that “KEY aspects of the (credit report) data were ambiguous, duplicative, or incomplete.” The details of this report outline the following systemic issues:

Ambiguous Status of State of Accounts
Failure to report Credit Account Information
Unreported Credit Limits
Problems with Collection Agency Accounts, Public Records and Credit Inquiries-Duplications of accounts
ETC

Bernanke went on to say. “The Federal Reserve, in its supervisory capacity, continues to encourage lenders to find ways to maintain prudent lending standards while serving creditworthy borrowers, but the slow recovery of the housing market and the economy and other factors are keeping lenders cautious.”

So what can or should we do about this problem?

Encourage your customers that have problems on their credit report to contact the credit bureaus directly and if they cannot resolve the problems themselves to immediately seek the assistance of a credit repair professional. While credit problems are not the only problem with the housing recovery it is a substantial impediment to the recovery of our economy.

If you are not familiar with a credit repair professional in your local area, contact me for a referral.

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To your Success

Joel S. Pate

Joel Pate is an entrepreneur and founder of multiple successful companies in the mortgage, real estate, and marketing space. For more information on Joel, contact him at joel.pate@scoreinc.com

PS: Plan to join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/393936198

Pro-Active vs. Re-Active Credit Repair

Joel Pate — Mon, 13 Feb 2012 19:56:24 +0000

Pro-Active vs. Re-Active Credit Repair

What is Pro-Active Credit Repair?

Before I answer that, let’s define Re-Active Credit Repair. As the President of a credit repair backend processing company, I have the good fortune to counsel with mortgage and real estate professionals as well as Credit Service Organization company owners from all across the county on a daily basis.

Typically in consultive roles you are looking at the problems in a business. In nearly every conversation with both large and small operators they state that their greatest problem is:

CASH FLOW INSTABLITY

But is this the problem or a symptom of the real problem?

When digging deeper into these conversations, the real problem begins to surface. It is really a lack of ability to view the results being obtained by the industry professional on their customer’s files in a timely fashion. Why? The customers do not send in their results on a consistent basis, if at all. And, if you pull credit for credit repair from a mortgage company or other source you are violating their Terms of Service and they are subject to losing the valuable privilege with the Bureaus.

But how does this affect so many other areas of the business?

Since results are the primary driver of the business, the reason that consumers signed up with you and thus your deliverable, just in time delivery of this natural resource or inventory item is crucial to your business model
Your sales are affected due to the fact that you spend unproductive time chasing down bureau results instead of focusing on acquiring new sales and servicing the accounts you’ve already sold. Remember referrals are king.
Every un-planned contact from your customer is very time consuming. To increase profits you must develop a system that reduces customer communication interaction.

Whether your business is based on the Monthly Fee model or the new Pay For Delete model that is sweeping the industry, lack of control of the timely delivery of your demonstrable results impacts your ability to schedule your work and that of your production staff. Result: You have Cash Flow Instability.

Just imagine for a moment an auto assembly plant not knowing if they have enough steering wheels, bumpers or transmissions for today’s production. Can you imagine in today’s competitive landscape how that would affect their business? It’s the same for you.

So what is the solution? Credit Monitoring

It sounds ridiculous but it is true.

The timely access to credit monitoring allows you to systemize your work flow and thus drive your process without unproductive and needless contacts with you customers to chase down results.

Additionally, as you have experienced, the results arrive over a period of days if not weeks. As a result, the consumer is touching you up to three times and then you are required to examine three different reports at potentially three unique times.

Each of these extra steps takes time away from sales, meaningful customer touches and ultimately profits.

Only with a durable credit monitoring account can you plan your work and work your plan. How does it work?

Schedule the new credit monitoring pull in your calendar for each customer for a particular date. Or better yet push that down to a lower paid employee. By using your CRM platform to schedule your time to review the “results” allows you to become more productive-like a normal business.

This easy to implement process gives you “inventory” control over your work flow scheduling and thus the ability to manage your cash flow in a more businesslike fashion.

As always, many company owners were initially skeptical of this enhancement to their business and have had these objections: “That won’t work in my market….But then I’ve got to stop what I’m doing to log into the account….What if their credit card fails and I can’t access the report?… It’s too expensive… the customer cannot pay any more…”

These are all valid objections but ones that have been overcome by numerous successful operations:

In every market we have found that if you train your sales staff effectively you can overcome the objections from the customer of the added expense
The time it takes for one of your staff to log into a credit monitoring account is less than two to three minutes
Credit cards fail on approximately 20% of the accounts-but that is better than chasing down 100% of the consumers for results
The customer doesn’t want to help you do your job, the consumer wants results

Running a successful business requires that you become Pro-Active instead of Re-Active in your approach.

You do this by systemizing every possible event and by wringing out of the organization unproductive time wasters.

Ultimately you will find more time and energy for the growth drivers in your business:

Marketing
Lead Management
Affiliate Development
Sales
Productive Customer Interaction
Which leads to referrals

If you are ready to improve the results you achieve in your business, begin to implement this plan today on your next sales call.

To your Success

Joel S. Pate

Joel Pate is an entrepreneur and founder of multiple successful companies in the mortgage, real estate, and marketing space. For more information on Joel, contact him at joel.pate@scoreinc.com

PS: Plan to join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/393936198

Execution-The Key to Un-Lock your Success

Joel Pate — Mon, 13 Feb 2012 19:56:05 +0000

Execution-The Key to Un-Lock your Success

Execution is the key to your success. Without the systematic rigorous process of tenaciously following through, while ensuring accountability, your business and personal life will be less rewarding than it could be.

Of course you need to plan, and you need to prepare. Many articles on that subject. But without execution nothing happens. Without continuous execution, not enough continues to happen.

On a daily basis, I speak with mortgage companies and credit repair companies from all over the country. If I had a nickel for every time that I have heard “I’m about to do…..you name it” I would have a lot of nickels.

Every day I see business owners stuck in what I have deemed to be Work Avoidance Behavior.

Now these are good folks. Smart, well-educated but none the less stuck in some type of rut.

So if you are stuck in this type of rut, how to you break free?

Determine just like Microsoft has:

Good is good enough-there is always a 2.0 that you can roll out
Make your list today but tackle first the one thing that you are avoiding
Yes that’s right-don’t do everything else to “get it out of the way”
Execute on the one thing that you know you need to do-do it now
You will only change your behavior when you change it

Getting ready to get ready is another way of saying work avoidance behavior. It’s time to execute your plan, roll out your website, purchase those online key words, schedule presentation meetings, etc. Do it today, you will be glad you did.

To your Success

Joel

Join Joel for his Jump Start Business Building webinar held each Thursday at 3 PM CST by clicking on this link: https://www3.gotomeeting.com/register/393936198