BUT I PROMISED THIS STORY WOULD BE UNEDITED, RIGHT?
I guess I got a little cocky, cause after we’d done a few deletions I let a friend convince me to change up the process and do something the wizard had told me NOT to do.
Sure enough the client got sued by a creditor!! I sheepishly called my 'hermit' friend and he used words I won’t pass along to describe my level of competence and how screwed I was. He was right, that was a crappy day. Luckily for me we ended up working out a deal and the lawsuit was dropped. In reality, that was a great experience- it burned the importance of following the system and remaining humble deep into my brain.
What I’m trying to say is, be very careful if you do this on your own.
As a real estate professional, investor or broker your clients will go to someone for help with credit. As a trusted advisor and friend to our clients we should make sure they don’t lose money on a scam or get their credit report frozen by a fraud alert because we referred them to a bad solution.
The Laws that govern credit reporting and the FTC
What my 'hermit' friend taught me about the FTC and the law in our meetings is pure genius. The problem you will have when you market credit repair services is that most people think that your claims are too good to be true. Read below and see why you can legally eliminate items from credit- it’s based in the federal laws and interpretations given by the FTC. (the dept. in charge of regulating credit reporting)
POP QUIZ:
How long does foreclosure have to be reported in a credit report?
ANSWER: As you read the law below you can see that it allows the creditor to report the derogatory item for not longer than 7 Years. Meaning they can report this derogatory info for 7 years- but not a day more. They can delete it prior to that time period referenced IF you can get them to delete it. The bureaus will not delete items for you.
FCRA
605. Requirements relating to information contained in consumer reports [15 U.S.C. §1681c]
(a) Information excluded from consumer reports. Except as authorized under subsection
(b) of this section, no consumer reporting agency may make any consumer report containing
any of the following items of information:
(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the
date of entry of the order for relief or the date of adjudication, as the case may be,
antedate the report by more than 10 years.
(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the
report by more than seven years or until the governing statute of limitations has
expired, whichever is the longer period.
(3) Paid tax liens which, from date of payment, antedate the report by more than seven
years.
(4) Accounts placed for collection or charged to profit and loss which antedate the report
by more than seven years.
(5) Any other adverse item of information, other than records of convictions of crimes
which antedates the report by more than seven years.
(c) Running of Reporting Period
(1) In general. The 7-year period referred to in paragraphs (4) and (6) of subsection
(a)
shall begin, with respect to any delinquent account that is placed for collection
(internally or by referral to a third party, whichever is earlier), charged to profit and
loss, or subjected to any similar action, upon the expiration of the 180-day period
beginning on the date of the commencement of the delinquency which immediately
preceded the collection activity, charge to profit and loss, or similar action.
BREAK THROUGH!!! It is the creditors who can do the deletion for you!
This idea was so exciting because it confirmed the initial reaction I had to my clients challenge with foreclosure on credit. You see, I told my clients to work with the creditors; I had taken the right action but in the wrong direction.
Before reading on: STOP! I gotta make this clear: You don’t have to validate or verify items in your credit report- BUT the creditor DOES need to verify them. The burden of proof is on the creditor and bureaus in any dispute!
"Tuesday will be a big day for consumers as they gain important new powers to fix errors found on their credit reports," Senator Richard Bryan said. "Any consumer who has gone through the process of getting errors on their reports fixed, knows how helpful these new rights will be. Finally, the burden of proof will be on the credit reporting agency, not the consumer, when mistakes are found on credit reports."
http://www.ftc.gov/opa/1997/09/fcra929.shtm
What if the item is mostly accurate but you don't think the creditor has verifiable proof?
You can begin with a dispute of the item and if the bureaus report back that the account is a "verified" item does it mean the bureau reviewed loan docs with signatures and personally verified the account??? NO- what It means is that somebody over at the creditor got a message from the bureau (likely through an online software like eOscar) they then looked up the info in their electronic network and said "yes, this is accurate, or we verify this account". But you still don't know if it was verified in fact, since computers and information get mixed up all the time and no one ever pulled the file from cold storage...
If the creditor can't VERIFY the account, it CANNOT be in your report. (period)
The FTC has a crucial statement in "A Summary of Your Rights Under the Fair Credit Reporting Act":
" You have the right to dispute incomplete or inaccurate information. If you identify
information in your file that is incomplete or inaccurate, and report it to the consumer reporting
agency, the agency must investigate unless your dispute is frivolous. See www.ftc.gov/credit
for an explanation of dispute procedures.
Consumer reporting agencies must correct or delete inaccurate, incomplete, or
unverifiable information. Inaccurate, incomplete or unverifiable information must be
removed or corrected, usually within 30 days. However, a consumer reporting agency may
continue to report information it has verified as accurate."
-From the FTC document, 'A Summary of Your Rights Under the Fair Credit Reporting Act' (emphasis added)
So you can challenge the method of verification and the bureaus will delete the item, right?? WRONG. That’s fantasy- not reality. See reality below :-)
In this opinion letter from the FTC we learn that if you are not satisfied with the response of the CRA, because you don't feel like they researched the account adequately, (and they don't- due to sheer volume) you can work with the creditor to get resolution and if necessary can sue them for damages.
"Section 623 was added to the FCRA by the Consumer Credit Reporting Reform Act of 1996 (Public Law 104-208, Title II, Subtitle D, Chapter 1, the "CCRRA"). That major overhaul of the FCRA was signed into law on September 30, 1996, and most of its provisions became effective one year later. We understand your point that the obligations imposed by Section 623(a) on furnishers of information to CRAs (and the remedies it provides consumers for violation) are limited, and your view that CRAs should be more vigilant as a result. However, the FCRA imposed no accuracy duties at all on the furnishers of information to CRAs prior to the addition of Section 623 in the CCRRA. Even though the Section is limited in some respects, it imposes legal obligations where none existed before. Section 623(a)(1)(B) forbids furnishers from continuing to report inaccurate information that is disputed by consumers in writing to the address provided by the furnisher (using the procedure you cited). In addition, Section 623(b) imposes clear investigative duties on furnishers when they receive disputes from CRAs, and allows consumers to sue violators of this subsection to obtain damages (which may be punitive if the consumer shows willful violation) and attorney fees. Prior to the addition of Section 623 in 1996, the FCRA provided for none of those duties or liabilities on furnishers of information to CRAs."
-Excerpt from a letter the FTC sent to Mr. Watkins, dated June 24th, 1999. (emphasis added)
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"Sean, once again, you are leading us on another journey that will help everyone that follows your easy 6 steps. At first, I thought it couldn't be this easy, then I showed my attorney and he LOVED it so much, he bought the system too!
Mike Ceparano, Tampa, Florida
MCC Member Since March 2009
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OVERVIEW of the 6 STEP Foreclosure Deletion Strategy REVEALED!
If you are going to PERMENANTLY REMOVE a foreclosure you need to:
Play by the rules- no funny business
1-Dispute the item with the bureaus and creditor
2-Contact the creditor W/O agitating them
3-Define a settlement
4-Sue them if necessary (specifically prepared lawsuit)
5- Give them a last chance to settle
6-Get a complete and permanent deletion of the item from all 3 bureaus
When you complete the 6 steps properly:
YOU GET YOUR FEE FROM THE CONSUMER
YOU GET A LETTER LIKE THIS AND THE ITEM IS DELETED!!
I was nervous to charge fees for this service until I saw how well it worked. Now I charge $2,000 - $5,000 depending on the case. I kept track of my time, I spent 2 and half hours earning my FEE. It is not a labor-intensive process when you get a system in place that’s simple like the one I outlined above. On top of that, I only work with cool people so I don’t ever have to haggle over money or be stressed out dealing with jerks.
I decided that by sharing this information freely I’d attract more folks who share my philosophy: help as many homeowners as possible and to make an honest living for my family and the charities I support.
In conclusion, I've discovered:
+NEW method for deleting short sale AND foreclosure from credit reports
+Method has been proven in over 109 cases
+6 STEPS are effective whether or not the item is accurate
+A legal approach to Foreclosure/Short Sale deletion
+A simple approach that can be replicated by an assistant
+The answer to my clients question "What can I do to fix my credit AFTER Foreclosure or Short Sale?"
Read below to see how you can take advantage of my experience and SAVE time and money.
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