All posts by Barbara Nevins Taylor

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Penalized for Failing to Sign Up For Medicare Part B

August 1st, 2013

by Barbara Nevins Taylor

When it comes to Medicare and Social Security, details count. If you don’t pay attention and sign up for Medicare Part B in the specific open enrollment period, you might find yourself penalized and paying more for Medicare for the rest of your life.

The rules get pretty rigid and don’t allow for much wiggle room.

Wendy Blank discovered this when she turned 65.

The insurance executive had signed up for Social Security and Medicare Part A, the portion of Medicare that covers hospitalization, skilled nursing home care and some home health care. You usually don’t pay a premium for this because you paid taxes while you were working. But Wendy didn’t sign up for Part B. “I was covered by my husband’s insurance and didn’t need it,” she said.

She was surprised when she began to receive bills in the mail that asked her to pay for Part B insurance. Part B covers doctor visits, lab tests and some preventive care. Wendy says,”I kept getting bills and disregarded them. I didn’t think it pertained to me.” She says she called Social Security and told them that someone made a mistake. And she thought that was it. But she was wrong.

Losing Money

A few months later, her Social Security check was significantly less than it had been. Social Security deducted the cost of Part B from her payment for the months that she was billed.

Taking Action

Here’s where Wendy did the smart thing. She realized that a telephone call would not work. She went to her local Social Security office and explained what happened. The Social Security worker put in the order to stop the Medicare Part B charges, but Wendy also wanted a refund. Like many of us, she was a little skeptical about getting results from the big bureaucracy. She said, “I never thought that I would get reimbursed.” But she pushed.

She ultimately received a letter from the Social Security Administration that sounds pretty begrudging. It said in part, “Based on your alleged contact with Social Security…your coverage would have been terminated…had the proper form been submitted timely. It is therefore recommended you be refunded Part B premiums.”

Wendy was delighted to learn that she would receive a refund of $1107.30 that had been deducted for three months worth of Part B premiums. “I felt a real sense of victory, ” she said.

Bottom Line

Wendy’s experience reminds us that we all need to take care and read everything when we deal with Social Security and Medicare. It’s extremely important to pay attention to the details, review everything and always open your mail immediately. If a mistake is made, don’t sit back and let it slide. You can file forms, as the Social Security Administration suggests, or you can visit your local Social Security office. If you are in the right, you are likely to get results. But like everything else, it takes time and patience.

Figuring Out Medicare Basics

Medicare Basics for Boomers and Everyone Else

Choosing a Medicare Part D Prescription Drug Plan

Choosing Power of Attorney Tips

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You Won! What?

July 30th, 2013

by Barbara Nevins Taylor

Someone named Carmen Chen, if that’s her real name, sent me an email that says, “You Won!” Sounds great. Won What? I hate to be cynical, but this is the Internet and it takes a little skepticism to remain free and clear of frauds and scams. I deleted Carmen without opening the link. That’s what investigators suggest we all do. Clicking on these contest links can lead to computer viruses, malware that steals your personal information and other horrible things. So the warning is, don’t click on links from strangers or companies that you don’t know.

The Federal Trade Commission is trying to keep up with the bad guys and just took action to action to shut down an international network of scammers that sent millions of unwanted text messages to consumers, using the lure of “free” gift cards and electronics to entice consumers into an elaborate scheme designed to take their money and target them for illegal robocalls.

The FTC alleges this was a double assault on consumers because many had to pay for receiving the texts that promised free gifts or prizes, including gift cards worth $1,000 at major retailers such as Best Buy, Walmart and Target.

The FTC says, “Consumers who clicked on the links in the messages found themselves caught in a confusing and elaborate process that required them to provide sensitive personal information, apply for credit or pay to subscribe to services to get the supposedly “free” cards. In addition, consumers’ phone numbers were signed up to receive unwanted automated telemarketing calls, also known as robocalls.”

What happens when you click on the link?

According to the FTC, when consumers followed the links to the supposed gift cards, they were directed to sites that collected a substantial amount of personal information, including in some instances health information. The FTC alleges that in addition to selling the information for marketing purposes, the defendants also made unwanted automated telemarketing calls to consumers selling products such as home security, satellite television and travel services.

The way the FTC describes the scenario, you couldn’t get the “free gift card” without spending money. In addition, clicking one link led to a mini labyrinth of offers. In some cases, consumers were obligated to sign up for as many as 13 of the offers. These offers frequently included recurring subscriptions for which consumers were required to provide credit card information and pay up front for “shipping and handling” charges. In other cases, they required consumers to submit applications for credit that would be reflected in their credit reports and possibly affect their credit score.

The defendants in the case are Acquinity Interactive, LLC, located in Deerfield Beach, Fla.; 7657030 Canada Inc., located in Kirkland, Quebec, and also doing business as Acquinity Interactive; Garry Jonas, an officer of Acquinity Interactive; Revenue Path E-Consulting Pvt Ltd, located in Pune, India; Revenuepath Ltd, registered in Nicosia, Cyprus; Worldwide Commerce Associates, LLC, registered in Las Vegas, Nev., and also doing business as WCA; Sarita Somani, an officer of the Revenue Path defendants and Worldwide Commerce Associates; Firebrand Group S.L., LLC, registered in Las Vegas, Nev.; and Matthew Beucler, an officer of Firebrand.

Consumer News, Money News, News, Scam News

Payday Lender to Pay $9.5 Million

July 30th, 2013

A federal judge just handed a big victory to consumers and the Federal Trade Commission (FTC). U.S. District Court Judge John Antoon II, in Orlando, ruled that a payday lender illegally debited consumers’ bank accounts when they visited the company’s websites seeking payday loans. 626,000 consumers were enrolled in programs and charged for services they didn’t want. Now Judge Antoon says they are owed $9.5 million.

The judge found that Direct Benefits Group LLC, Voice Net Global LLC, Solid Core Solutions Inc., WKMS Inc., Kyle Wood, and Mark Berry failed to disclose that they would use consumers’ bank account information to charge them for enrollment in unwanted programs and services

Warning for Others

This details of this case provide a cautionary tale for all of us who fill in online applications and surveys. It’s extremely important to read everything carefully.

In this instance, the FTC found that when someone applied online for a payday loan they were asked for personal and financial information. During the application process pop-up ads jumped on the screen for other services and unrelated programs for food, travel and merchandise discounts, or for long distance calling and Internet access. An undercover FTC investigator found that confusing instructions led him to press “OK” and sign up for a phone service he didn’t want. This experience was shared by consumers who complained to the FTC.

Judge Antoon cited testimony from eight consumers. All filled out payday loan applications on one of WKMS’s websites and later discovered debits from their bank accounts that they did not recognize. Three of the eight recalled seeing a pop-up box but did not read the contents of the pop-up box. One explained that the box “look[ed] like a normal ‘I accept these terms and conditions’” type of box, and she assumed it was part of the terms and conditions of the payday loan, so she pressed OK as the box directed. Another did not recognize the pop-up box that she was shown in court as the one she recalled. The third thought the box had to do with the loan itself, and when she was unable to “x out” of the box, she eventually clicked “OK.” The other five consumers did not recall seeing a pop-up box during the loan application process.

Consumers were charged $39.95 to $99.90 per year for these unwanted services. Canceling the services was difficult, although many did. But if you are one of the consumers victimized by this group, keep an eye out on ConsumerMojo.com. We’ll follow up with the details about refunds.

In the meantime, WATCH CONSUMERMOJO.COM’S VIDEO What’s Wrong with Payday Loans?

Consumer News, News

Why Pay To Report Rent Payments?

July 29th, 2013

by Barbara Nevins Taylor

There’s a really big question about whether paying a company to report your rent payments helps improve your credit score.

ConsumerMojo.com found one company, RentReporters.com promotes its service to “boost your credit.” It asks you to pay $9.95 upfront and then $9.95 a month. Its website says it collects information about your rent payments and in the Terms of Service says, “Your account might show up on one or many of the major bureau reports.”

Copy on the homepage claims that it “actually helps improve your credit profile by reporting your monthly rental payments.” But Anthony Sprauve, a spokesman for FICO, the company that compiles credit scores used by major financial institutions, told ConsumerMojo.com, “the impact to the score is very weak”

In addition, the major credit bureaus do not get information from RentReporters. ConsumerMojo.com checked with all three bureaus.

TransUnion spokesperson Clifton O’Neal said, “RentReporters is not a data furnisher to TransUnion.” Experian spokesperson Kristine Snyder said, “They do not file reports with Experian at this time.” And Equifax spokesperson Meredith Griffanti said, “…we do not load any data from RentReporters.com to our consumer credit database.”

RentReporters President and Founder Crispin Luna IV told ConsumerMojo, “RentReporters started a new industry – it broke the mold of the previously paper-only process and became the first company to automate that process of rental payment reporting.

As ‘rental payment reporting’ was unheard of early on, the acceptance of rental payment information was slow in adoption from the top credit reporting agencies. In early 2005, RentReporters.com was the first company to begin reporting rental accounts to Pay Rent, Build Credit Inc. (PRBC). In 2008, PRBC was acquired by MicroBilt Inc., a company well known for long lasting innovations in the credit data markets.” He explained that, “The PRBC system creates the opportunity to connect the estimated 40 million consumers underserved by the current credit reporting system to the thousands of lenders needing rental information during the underwriting process.”

Luna also said that the PRBC data is used in the FICO Expansion Score, which uses credit information from alternative sources.

WHAT IT MEANS

Okay. We asked FICO about how much the information RentReporters.com puts into PRBC system affects your FICO score. FICO Director of Public Relations Anthony Alexander Sprauve said, “The FICO Expansion Score-Mortgage version does use PRBC data in the calculation of the score. However, I would guess that PRBC data is very limited in coverage, and I know that when it does factor in, its impact to the score is very weak.”

BOTTOM LINE

You have to evaluate whether paying $9.95 a month is worth it for you.

The Federal Trade Commission spokesperson Elizabeth Lordan says, “Consumers can’t go wrong by checking their credit reports themselves. It’s free and it empowers consumers to take charge of their own finances. They can see for themselves whether creditors are accurately reporting information about them to the credit bureaus.”

Remember you can check your credit report for free three times a year at annualcreditreport.com

Watch ConsumerMojo.com’s video How to Improve My Credit-The Truth

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How to Apply for Deferred Action

July 24th, 2013

Immigration attorney Ryan Muennich walks you through the application process for the U.S. Deferred Action Program for Childhood Arrivals program. He says in many cases you don’t need to pay a lawyer to fill out the paperwork for. Ryan also warns that you must follow all of the rules after you make yourself known to immigration authorities. That means you have to update them about where you live.

Deferred Action. You only need to get legal assistance from a qualified immigration attorney if you have a problem. Ryan tells you the circumstances in which you do need help in Dream Act Immigrants- Apply Without a Lawyer.

You are eligible if you were under 31-years-old as of June 15, 2012, came to the U.S. before you were 16, continuously lived in the U.S. since June 15, 2007, were physically present in the U.S. on June 15, 2012, your visa expired, you’re in school, graduated from high school, or have a GED and haven’t been convicted of a felony or a significant misdemeanor and are not a threat to the U.S.

HERE ARE THE STEPS TO TAKE

Log on to U.S.C.I.S website. Read the guidelines and instructions.
Go to the side of the panel and click on form I821D. You’ll have to download it and the instructions. Again, read the instructions carefully before you fill out the form.
Fill out the form and sign it.
Download the form I-765. This is the application for the work permit or Employment Authorization. It will ask the basis for the application. In other words, they want know why you should get a work permit. The basis is the Deferred Action Program for Childhood Arrivals. So be sure to put that in when you fill out the form. Attach this form to the I821D form.
Download the form I-765WS. It’s the worksheet that will accompany the other two forms. This will ask about your income and your assets. It will also ask you to list the reasons that you are requesting the work permit. Again, your reason is the Deferred Action Program for Childhood Arrivals and your plan to get a job as soon as possible.
You’ll need 2 passport photos. You can do this at a neighborhood shop, or through one of the online services. Write your name and your alien receipt number on the back of each photos. Attach the photos to the forms.
Make sure you collect all of your documentation:

a. You need proof that you are under 31-years old as of June 15, 2012-your passport or school records.

b. You need proof that you came to the U.S. before you were 16-your passport, Visa or school records.

c. You need proof that your Visa expired-a copy of your Visa.

d. You need to show that you are in school- report cards, transcripts work. If you graduated, make a copy of your diploma and attach it. If you earned a G.E.D., make a copy of the certificate and attach it.

e. To show that you lived in the U.S. continuously since June 15, 2007, you need school documents, credit card receipts, paid bills, or other official documents.

f. To show that you were in the U.S. on June 15, 2012, you need credit card receipts, school documents, or other official papers.

Again, make sure that you have answered all of the questions with the documentation. More is better than less.

Write a check, or get a money order made out to the U.S. Department of Homeland Security for $465.
Put all of the forms, photos and documentation together with the check. Mail the package to the address that’s listed for your region on the forms.
You should receive a receipt in less than month.
Be patient. The next step could take four to six months, although people report quicker action.

Time for Immigration Reform

IMMIGRANTS SCAMMED BY TELEPHONE SPOOF

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What’s the First Step To Get A Mortgage?

July 24th, 2013

Credit Smart-Mortgage Ready

by Barbara Nevins Taylor

If you think it’s time to buy a home, it’s time to get credit smart. Take a hard look at your personal finances before you do anything else. Melissa Cohn of Manhattan Mortgage advises, “The most important thing to do is get your financial house in order.” That requires you to do a number of things.

EXAMINE YOUR CREDIT REPORT

Begin by examining your credit report. Your credit report is literally a report of the credit that you’ve applied for and your payment history.

CREDIT BUREAUS

Equifax, Experian and TransUnion are the three private companies that keep track of personal credit histories.

Student loans, credit card payment, late payments, car loans, mortgages and information about judgments against you are listed on the credit report. Sometimes the information is wrong, and that’s why it’s important to check your credit report.

CREDIT REPORTS

You can check your credit report for free three times a year by going to annualcreditreport.com. There is no need to pay for a credit report, or a credit check.

Former Federal Trade Commission Regional Director Leonard Gordon says, “If you’ve been paying your bills on time and it shows that you are paying them late, you want to fix that. If there is anything inaccurate in your report, you should write letters to both the reporting agency and the creditor explaining why the report is in error. Attach documentation and send it by certified mail.” Do not send the originals. Send copies, and keep a copy of everything that you mail. Find a sample letter at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm

The credit reporting company must investigate. It usually takes about 30 days. Then they must tell you, in writing, what they discovered. If there’s anything wrong, the company must make the changes and provide a free copy of the new report. You can also ask the credit bureau to send a copy of the new report to anyone who received your erroneous credit report in the previous six months.

ACCURATE NEGATIVE INFORMATION

If your credit report has negative comments and you have outstanding debts, there is no magic fix. Many companies advertise that they can help you improve your credit score. “That’s a lie,” says Herman De Jesus with the consumer advocacy group NEDAP in New York.

He says “We’ve seen a lot of people who have paid a large amount of money to these companies that promise a quick turn around on the repair of their credit, and it’s never, ever happened.”

You must pay your bills on time, and clear your previous debts. It takes seven years to completely clean up your credit report.

CREDIT REPORT AFFECTS CREDIT SCORE

What’s on your credit report affects your credit score. Your credit score is different than your credit report. The credit score is a statistical analysis of the information listed on the report. It takes into account how many credit cards you have, your outstanding debt and your bill paying history.

YOUR FICO SCORE

Most banks use the FICO Score created by the Fair Isaac Corporation. Fico Scores range from 300 to 850.

Banks consider 740 an A credit score. Mike Copley, Senior Executive Vice President of TD Bank, says, “We would look at anything from 680 up. Other banks have different policies. At New York’s Amalgamated Bank, Eric Ruskiewicz says, “We’ll lend to someone with a 620 score, and we think most people would qualify.”

Generally, if your credit score is high you’ll get a lower interest rate. “If it’s low and you’re still credit worthy, you’ll pay a higher interest rate. Copley explains, “If you have a lower FICO you are deemed more risky and the banks have to price in that element to protect themselves.”

DIFFERENCE IN RATES

The difference in interest rates can be significant. If you have a FICO Score of 780 to 850 and want to get a $300,000 mortgage, you will get 1½ percent lower interest rate than if you had a 620 to 639 credit score. And that means you’ll save more than $104,000 over the life of a 30-year mortgage.

But again, banks do things differently. At Amalgamated Bank for example, Ruskiewicz says, “The interest rate is usually the same, but you may pay more in fees.

NEXT STEP

Once you understand your credit score, it’s time to assess your budget. “Before you go shopping for a home you have to know how much you have to spend,” says attorney Adam Leitman Bailey author of Finding the Uncommon Deal.

PRE-QUALIFY FOR A MORTGAGE

A banker, mortgage broker, or a counselor at a not-for-profit agency can help figure it out, and pre-qualify you for a mortgage. You’ll need a complete financial package.

“That means your bank accounts and all the cash you have on hand. Banks will require that you provide a verification of your income for the past two years, meaning tax returns. You will have to provide verification of your liquid assets,” says Melissa Cohn of Manhattan Mortgage.

IMPORTANT TIP

It’s important to avoid making big purchases and opening new credit cards the year that you apply for a mortgage. Payments reduce the amount banks are willing to lend you.

Kenneth Totten of Metuchen Savings Bank offers an excellent example: “If you have a $300-a-month car payment, that will affect your ability to buy the house by about $60,000. If you were able to afford a $300,000 house that goes down to $240,000 because you are driving around in a $300-a-month car.”

GET A FREE COPY OF ALL THIS GOOD STUFF. HERE’S YOUR LINK:

What’s the First Step to Get a Mortgage

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10 TIPS TO FIND FORECLOSURES

July 24th, 2013

by Barbara Nevins Taylor

Foreclosure is a tragedy for most families who lose their homes. But it is also an opportunity for buyers.

Real estate attorney Adam Leitman Bailey author of Finding the Uncommon Deal is enthusiastic about the possibilities for buyers. “Never in American history have there been better deals than now.”

Tip 1 Look for a PRE-FORECLOSURE

Chose a neighborhood you like and begin to look for homes that are in pre-foreclosure. You want to find out if anyone needs to sell their property. Neighbors and friends are often good sources of information. A home in pre-forelcosure is more likely to be in better shape than a foreclosed home that has been vacant.

Leitman Bailey suggests you network, “Ask the neighbors. Listen when you go to a cocktail party, or a house party.”

Tip 2 Look at COURT RECORDS

You can also check records in the county clerk’s office. Every time a bank sues for foreclosure it files what’s called notice of pendency, or Lis Pendis.

NOTICE OF DEFAULT

In simple language, it’s a notice of default. The notice of default is usually sent to a homeowner 30 to 45 days after the first payment is missed. The notices are available to the public in the local courthouse or administration building. Some counties post everything online.

Tip 3 TALK TO THE HOMEOWNER

If you locate a property you’d like to buy and the homeowner still lives there, you might try simply knocking on the door.

Leitman Bailey says, “You want to use your social skills. You are going to start with, ‘Hi. How are you? I’m looking to buy a home for my family, and I understand you may be selling.’ Stop there and let them speak.”

If the homeowner is willing to talk, you might suggest a short sale and offer to pay less than what the homeowner owes the bank. Homeowners sometimes

Tip 4 Consider a SHORT SALE

If you agree on a price, call your attorney. Leitman Bailey warns that you’ll need a contract. “You want to have a contract with the seller saying that if they can sell and they get this number, they have to sell to you.”

But Mike Copley, Executive Vice President of TD Bank, says banks aren’t always quick to respond. “The caution there is that the negotiation for the final sales price may be a little bit stressful. Banks may not be willing to negotiate as quickly as the buyer may think and that takes time.”

Tip 5 Search NEWSPAPERS AND ONLINE SITES

When a property goes into foreclosure, some local governments list them in newspapers, and the newspapers often post the information online. Companies such as Property Shark and RealtyTrac compile all of this information and make it available online for a fee

Tip 6 Look for FHA FORECLOSURES

HUD, the VA and other agencies often take property after homeowners with government-insured loans default. These are listed online state by state and city by city at www.HUD.GOV.

Tip 7. Look up BANK OWNED PROPERTIES

REO

Similarly, bank websites list foreclosed properties that they’ve taken back.

These big banks use the term Reo on their websites as short hand for Real Estate Owned. These are the foreclosed properties in the banks’ possession. You can easily search the websites for property in your area and you may be pleasantly surprised by what you find.

Attorney Leitman Bailey says, “I love the bank-owned property because you don’t have to worry about what mortgage you are buying, or what liens there are on the property.

A lien is placed on the property if the homeowner owes someone money, say a plumber or roofer, or there’s another mortgage outstanding. Make sure that no one has a claim to the home you want to buy.

Tip 9 Make sure you do a TITLE SEARCH

“The consumer really needs to know, is the title free and clear of any other liens or encumbrances prior to them taking over the home, “ says TD Bank’s Copley.

That’s why it’s important to use a professional title search company to research the property before you buy a foreclosure. Copley says, “The last thing you want to happen is you a buy a foreclosure and six months into it, you get a knock on the door or a letter in the mail saying, ‘You’re in my house. I have the title before you do.’”

Get a HOME INSPECTION

It is also important to try to get a home inspection. An inspection is an investigation of the structure and the mechanics including plumbing and electrical systems. You can hire a mechanical or civil engineer, or a licensed home inspector to do the job.

It’s money well-spent.

Tip 10 Try FORECLOSURE AUCTIONS

A home inspection may be impossible if you buy a house at a foreclosure auction. County sheriffs run foreclosure auctions regularly and there are opportunities if you are knowledgeable about the property and the process. But buying at auction is tricky. You are likely to find yourself in a small room with professionals who’ve investigated the property and know what it is worth. The bidding goes quickly and is often confusing for a novice.

Attorney Leitman Bailey warns, “It’s a risky game. You had better know the market and what it should go for.” Sheriffs usually list requirements for bidding on their websites. There is a protocol and cash is generally required in specific dominations at the time you bid.

GET A FREE COPY OF ALL THIS GOOD STUFF. HERE’S YOUR LINK:

How Do I Find Foreclosures

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How Do I Shop for A Mortgage?

July 24th, 2013

by Barbara Nevins Taylor

Shopping for a mortgage is confusing. There’s strange language, complex details and interest rates that vary widely. “You need to know which banks will give you the lowest rates. Banks are competing for your business, let them do that,” advises Adam Leitman Bailey attorney and author of Finding The Uncommon Deal.

COMPARISON SHOP

Comparison shop. Check out the banks in your area and also look online to find out what rates are offered.

MORTGAGE BROKERS

Mortgage brokers can help cut through the confusion. A mortgage broker doesn’t lend money, but generally has good contacts at banks and knows the banks that offer competitive interest rates and the lowest fees.

ASK QUESTIONS

Put aside any fear you may have and ask a lot of questions. “There are no stupid questions when you go for a mortgage,” says Kenneth Totten, Vice President and Chief Lending Officer of Metuchen Savings Bank in New Jersey.

Be direct and ask, “What’s the best interest rate that I can get?” The answer will depend upon your credit score. The bank will check your credit score after you apply for a mortgage. ConsumerMojo.com’s video What’s the First Step to Get a Mortgage explains how your credit score affects the interest rate.

WHAT TYPE OF MORTGAGE DO YOU WANT

The banker will also ask you questions about the type of mortgage that you want.

Mike Copley, Executive Vice President of TD Bank, says a banker will typically ask, “Do you want a 30-year fixed-rate mortgage? Do you want a 15-year fixed- rate mortgage, or do you want an adjustable-rate mortgage?” The answer depends upon your age, your plans for the future and the home that you hope to buy.

15-YEAR, 20-YEAR MORTGAGE OR 30-YEAR MORTGAGE

You can select a 15-year fixed-rate mortgage or a 30-year fixed-rate mortgage. TD Bank’s Copley explains, “The difference between those two mortgages is the life of the loan interest you will pay.”

If you plan to live there for the rest of your life, then a 30-year mortgage may be better than a 15-year or 20-year mortgage. But both the 15 and 20-year offer lower monthly and overall interest.

A 15-year mortgage you are typically going to get anyplace between three quarters and a half a point less interest rate,” says Metuchen’s Totten. And a 20-year-fixed rate mortgage offers a slightly higher interest rate than a 15-year, but less than a 30-year mortgage.

To make the right decision, you have to analyze your needs. Totten says, “How much can you afford to pay? Where are you going in the future? If you are 48- years-old and you are looking to retire when you are 63, you probably don’t want to have a mortgage then. So you take the 15-year route,” he suggests.

FIXED RATE MORTGAGE

Most people choose a 30-year fixed-rate mortgage for a good reason. “A fixed- rate mortgage is a mortgage that you take the loan out and from day one to the day you pay if off, it is going to be fixed,” says Metuchen Savings Bank’s Totten. It offers security. “The consumer doesn’t really take much risk in a 30-year fixed- rate mortgage. The bank takes all the risk because it’s a long time,” says TD Bank’s Copley.

ADJUSTABLE RATE MORTGAGES

An adjustable-rate mortgage or ARM is riskier because the rate can go up and up. “An adjustable-rate mortgage is a fixed-rate on the initial term and that can be from one to three, to five, seven or ten years. Thereafter the interest rate will usually adjust annually and sometimes monthly,” says Metuchen’s Totten. So an ARM is a gamble.

You’re betting that the interest rate won’t go up faster than the value of your house. And that’s why Adam Leitman Bailey isn’t a fan of adjustable-rate mortgages. “Do not get an adjustable-rate mortgage period. Unless you are an expert in real estate or a trader on the stock market, don’t get one,” he insists.

Yet gambling works for some.

WHEN AN ADJUSTABLE RATE WORKS FOR YOU

“If you are young and just starting out and you expect your income is going to increase and you are not going to be in this home for a long time, you may want to consider an adjustable-rate mortgage,” says Melissa Cohn of Manhattan Mortgage.

TEASER RATES

There’s also another benefit. Banks offer teaser rates to get your business and to make an adjustable-rate mortgage attractive. Financial advisor Lewis Altfest says, “A teaser rate can be a good rate if you are going to leave your home in a relatively short period of time.”

In other words, the gamble pays off if you sell your home before the rate goes up significantly. Still, Leitman Bailey is skeptical. “Don’t gamble,” he advises.

GOOD FAITH ESTIMATE

Once you assess your needs and make a preliminary decision, the bank will give you a Good Faith Estimate with a rate quote. The Good Faith Estimate, will give you a clear picture of what the mortgage will cost over the long-term and what the fees will be right off the bat. When you have a Good Faith Estimate from one bank you can go shopping from bank to bank.

CREDIT CHECK CAUTION

But Totten says, “I would caution you, tell the banker what your credit score is. Do not let them run your credit again. Every time you pull your credit it has the impact of lowering your credit score.”

ConsumerMojo.com’s video What’s the First Step to Get a Mortgage explains all about credit checks.

GET A FREE COPY OF ALL THIS GOOD STUFF. HERE’S YOUR LINK:

How Do I Shop For a Mortgage

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Tips for Older Job Seekers

July 23rd, 2013

If you’re over 55 and looking for a job, you know it’s not easy. It may be little comfort to know that others find themselves in the same boat.

More than 1,764,000 Americans between the ages of 55 and 64 years old are looking for work.

ConsumerMojo’s analysis of data from the Bureau of Labor Statistics found that another 853,00 older job seekers are considered “discouraged” workers. They stopped looking for jobs and yet they want to work and may need the income.

At a recent job fair in Brooklyn, New York, we found that most of the people handing out resumes were older job seekers. It was a discouraging day for them.

They went from table to table in the big school gym and found employers weren’t interested.

Vivienne Davis, in her mid-fifties said, “They seem to be geared to youth training; it’s not for people like myself.” Even when the job didn’t involve training, prospective employers were polite but brushed off older applicants. Elaine Prosser, in her late fifties, told us, “They feel you are too old.”

Jeri Mendelsohn, Associate Director of the Samuel Field Y in Queens, New York, oversees programs that aim to help older workers.

She says many older workers “don’t have a skill set to translate into the new normal very well.”

Sue Resnick, a job trainer and counselor at the Met Council part of the UJA, agrees: “The overriding issue is either their skills are outdated or unfortunately they are in fields that they didn’t play catch up in.”

But this doesn’t mean that older workers should give up.

Mendelsohn says, “I think there have to be ways of making 50-plus workers in the workforce become more technologically independent and confident so that they can be an important team member.”

Sue Resnick says, “If you can bring something to an office environment that no one else can, you have to put it on your resume.”

Tip 1 Update your resume immediately.
Include anything that makes you special
Include the foreign language or languages you speak.

You may not like the idea, but it is important to get comfortable with social media.

Tip 2 Make LinkedIn, Facebook and Twitter your friends. Social media helps you connect to others who can help in the job search. And it may be important to the job.
Many online sites offer guides to using social media.
If you need one on one help ask a younger family member to show you how they navigate social media.

Tip 3 Research a company before a job interview.
When you get a job interview, it’s extremely important to prepare.
Find out as much as you can about the company before the interview so you can talk knowledgeably when you sit down. Learn exactly what the company does, who leads it, what it earns and where it stands in relation to its competitors.

Tip 4 Choose areas that you really want to work in. Even if it’s not the field that you’ve left behind, try to pick a company or organization that’s involved in work that interests you.

It’s extremely hard to start all over again. But some of us have to do that.

Tip 5 Think about reinventing yourself and investigate new fields to work in

RESOURCES

More attention is being paid to the growing need to help older workers retrain and find jobs. Not-for-profits like the Samuel Field Y and Metropolitan Jewish Council in New York provide training programs. And organizations all around the country offer similar programs. A Google search may help you find the right one in your area.

In addition many state labor departments offer services for older workers. We’ve provided links for several states whose websites feature information specifically for older job seekers.

We’ll continue to post stories about and tips for older workers.

Tell us your story.

LIVING!

News, Vids: Other

Obama Talks Candidly About Race In Amercia

July 20th, 2013

President Obama talks about race in America and the Trayvon Martin case. It is a candid, personal, powerful and sometimes painful recollection. It is more of a talk than a speech and well worth watching. He asks us all to think about race

He asks, “How do we learn some lessons from this and move in a positive direction?” He calls for an examination of laws like “Stand Your Ground.” And he also suggests we rethink our attitudes about race. He said, “I think it’s going to be important for all of us to do some soul-searching. There has been talk about should we convene a conversation on race. I haven’t seen that be particularly productive when politicians try to organize conversations. They end up being stilted and politicized, and folks are locked into the positions they already have. On the other hand, in families and churches and workplaces, there’s the possibility that people are a little bit more honest, and at least you ask yourself your own questions about, am I wringing as much bias out of myself as I can? Am I judging people as much as I can, based on not the color of their skin, but the content of their character? That would, I think, be an appropriate exercise in the wake of this tragedy.”

Student News, Vids: Student

Student Loan Rate to Drop

July 19th, 2013

Just in time for the fall semester, the House of Representatives approved a Senate a plan to roll back student loan interest rates from 6.8 percent to 3.86 percent. The plan would tie student loan interest rates to the financial market, specifically to 10-year Treasury bills. Graduate student loan rates would be 5.4 percent and loans for parents would be 6.4 percent. The bill is on the way to President Obama for his signature.

After the Senate passed the bill, President Obama hailed the compromise that led to the passage. He said, “This compromise is a major victory for our nation’s students.” The Congressional Budget Office estimates the deal will save the government about $715 million over the next ten years. The notions of raising money for the treasury on the backs of students and allowing interest rates to rise with market angered some Democrats. Massachussets Senator Elizabeth Warren said, “This is obscene. Students should not be used to generate profits for the government.”

Here’s how it shakes out for borrowers

All undergraduate student loan rates would be set at the Treasury rate plus 2.05 percentage points.
Graduate student loans would be set at 3.6 percentage points above the Treasury rate.
Loans for parents will go to 4.6 percentage points above the Treasury rate.

The good news is that under the plan rates won’t escalate endlessly. They’ll be capped.

Maximum rates

The maximum rate for undergraduates would by 8.25 percent.
The maximum for graduate stude student would be 9.25 percent and the maximum for parents would be 10.25 percent.

Consumer News, Insurance News, News, Videos

How Obamacare Will Work

July 18th, 2013

Obamacare becomes a reality on October 1, 2013. That’s when you can sign up for the Affordable Care Act. The new insurance program will get underway on January 1, 2014 and will bring significant change for people who are uninsured, and self-insured. This video produced by the Kaiser Family Foundation and narrated by former ABC anchor Charlie Gibson walks you through what Obamacare will mean to you.

In Washington, President Obama said today the Affordable Care Act, “is doing what it’s designed to do–deliver more choices, better benefits, a check on rising costs.” He said as the plan goes into effect, “there’s gonna be glitches.” But the administration is working through the problems to give Americans more financial security.

He explained that, “…starting October 1st, new online marketplaces will allow consumers to go online and compare private health care insurance plans just like you’d compare over the Internet the best deal on flat-screen TVs, or cars or any other product that is important to your lives. And you’re going to see competition in ways that we haven’t seen before. Insurance companies will compete for your business. And in states that are working hard to make sure this law delivers for their people, what we’re seeing is that consumers are getting a hint of how much money they’re potentially going to save because of this law. In states like California, Oregon, Washington, new competition, new choices, market forces are pushing costs down.”

In New York State, it is estimated that health insurance will be 50 percent less for those who self-insure.

Consumer Savings

A provision of the Affordable Care Act already in place requires insurance companies to spend at least 80 percent of every dollar that you pay in premiums on your health care instead of overhead or profit. If they don’t spend the 80 percent they must provide refunds to consumers. In 2012, 13 million people received rebates from insurers. And 8.5 million rebates of about $100 each are set to go out this summer.

Yet yesterday, Republicans in the House of Representatives voted to dismantle parts of the Affordable Care Act and the President criticized them saying, “We’ve got a lot of problems in this country, and there’s a lot of work that Congress needs to do: get a farm bill passed, get immigration reform done, make sure we’ve got a budget in place that invests in our children and our future. And yet, instead we’re refighting these old battles. Sometimes I just try to figure out why.”

News, Vids: Immigration

White House-Why Immigration Is Good For The Country

July 16th, 2013

The White House produced this video and we think it’s worth sharing. It uses information from the Congressional Budget Office to explain why immigration reform will benefit the U.S. economy.

Legislation to create “a pathway to citizenship” for 11 million undocumented immigrants passed in the Senate but stalled in the house. House Republicans oppose what they see as “amnesty” for people who are not in this country legally and didn’t follow the rules. Some Republicans favor a limited program that gives citizenship to young people brought here as children, military veterans and a select group of others who may have technical skills that are in demand. Some also suggest a guest worker program.

But the Democrats and President Obama continue to push for an immigration overall that clearly spells out what undocumented immigrants can do to become full-fledged citizens.

The Columbia, S.C., State newspaper reports that Republican Congressman Mark Sanford predicted that Congress will ultimately pass immigration reform that contains a pathway to citizenship. Sanford told reporters the house is likely to pass “micro bills that are palatable to the body.” Sanford spoke to reporters in Hilton Head, S.C. and said, “Once the legislation leaves the House, I think it will be the Senate side that prevails.” Sanford said he supports the idea of a pathway to citizen after U.S. borders are secured.

Sanford’s comments may mean there is some pressure in the House to produce meaningful legislation that will actually make a difference.

WATCH CONSUMERMOJO’S VIDEOS No-Interest Loan For Deferred Action and How to Apply for Deferred Action

Tell us what you think about immigration reform.

Consumer News, Scam News

Robocaller to give up Mercedes

July 12th, 2013

Guess you can call it sweet justice. A group in a robocalling scheme settled with the Federal Trade Commission (FTC) and as part of the deal they’ll have to transfer assets including a 2007 Mercedes Benz CL, a 1999 boat valued at approximately $17,000, and a 2002 boat worth about $45,000 to the FTC.

A+ Financial Center was charged with making millions of illegal pre-recorded robocalls claiming to be from “Rachel” and “Cardholder Services” and pitching credit card interest rate reduction services.

In its complaints, the FTC charged the companies in this group and their principles with misleading consumers, calling phone numbers on the Do Not Call Registry, illegally collecting up-front fees, and making illegal robocalls. The FTC says the A+ Financial Center defendants promised to help lower credit card interest rates if consumers paid an up-front fee of $495 to $1,595. But after they received the money, the FTC charges they did little if anything to help consumers lower their credit card interest rates.

In settling the FTC’s charges, the defendants are banned from making robocalls and continuing to pitch unsecured debt relief services, misrepresenting the attributes of any financial product or service, and engaging in abusive telemarketing practices such as calling numbers on the Do Not Call Registry.

WATCH CONSUMERMOJO.COM’S VIDEO 3 TIPS TO MANAGE CREDIT CARD DEBT

Consumer News, News

Debt Collector to Pay Millions

July 9th, 2013

Harassment by debt collectors is real. People hassled by their constant calls know how maddening, embarrassing and nerve wracking those calls can be.

So it’s a relief for many that Expert Global Solutions, the world’s largest debt collector, agreed to stop harassing consumers with allegedly illegal debt collection calls and to pay a $3.2 million civil penalty.

This is the biggest penalty ever obtained by the Federal Trade Commission (FTC) against a third-party debt collector.

The FTC charged that Expert Global Solutions and its subsidiaries called consumers many times a day even after consumers asked them to stop.

They allegedly called early in the morning, late at night and at consumers’ workplaces. The FTC complaint charges that the companies tried to collect money without verifying debt and continued to call consumers who said they didn’t owe anything.

This action doesn’t put the company out of business, but the FTC asked the court to order Expert Global Solutions to investigate whether consumers actually owe money before the company tries to collect.

The FTC says that under the proposed order, the company must “… stop falsely representing that they will not call a number to collect a debt; not harass, oppress, or abuse a consumer while attempting to collect a debt; not communicate with third parties about a consumer’s debt; not communicate with a consumer at his or her workplace if it is clearly inconvenient or prohibited by the consumer’s employer; except in limited circumstances, cease communications if a consumer has requested no further contact or if a consumer refuses to pay a debt…”

In other words, they must stop all the bad practices that add up to harassment.

Debt Collectors-What are my rights?

Featured Stories, Helpful Tips: Mortgage and Homeowners, Helpful Tips:Money, Money News, Mortgage News, News, Scam News

Mortgage Modification Scam Crackdown

July 6th, 2013 1 Comment

These scammers prey on people in trouble. We run into them over and over and it’s always the same.

They promise to help homeowners who are behind on their mortgages get out from under and modify their mortgages. Instead, they take money, offer little or nothing, and homeowners are left deep in debt and in serious jeopardy of losing their properties.

The Federal Trade Commission (FTC) went after a group of individuals and companies operating out of Nevada and California.

It asked a Federal District Court in Santa Ana, California to stop them from allegedly deceiving homeowners. The FTC says the group advertised on the Internet, TV and radio and falsely claimed it would provide legal help to “save consumers’ homes from foreclosure and lower their mortgage payments.” It charged illegal upfront fees of $2,000 to $4,000.

A temporary restraining order shuts the operation and freezes the defendants’ assetss. The FTC says, “Three individuals – Ratan Baid, Madhulika Baid, and William D. Goodrich – and seven companies falsely promised lower monthly payments and interest rates, and conversion of adjustable-rate mortgages to fixed ones. Apparently, many consumers who called toll-free numbers were falsely guaranteed a loan modification that supposedly would make their payments more affordable, that they would get results within 60 to 90 days, or that Goodrich, an attorney, would use his impressive legal experience on their behalf.”

While the case works its way through the courts, the people named in the complaint are barred from collecting advance fees for mortgage modifications.

What Do I Do About Foreclosure and download the free guide.

4 Tips to Avoid Mortgage Modification Scams and download the free guide.