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Mortgage by Randy
monthly update to our clients, colleagues, family & friends
By: Randy Mitchelson, September 2011
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In Issue 42 We Touch On:
Does Your Bank Owe You Money?
Fake Emails From FDIC
Downside Of Low Interest Rates
I finally pulled myself away from watching the live feed of the Occupy Wall St. protest that is now entering Day 11 in Manhattan to write this month's newsletter. Not that the protest is interesting because from what I have seen it is more like a craft fair with disorganized and confusing messaging about why they are all hanging out instead of applying god 'ol American work ethic to earn a living and improve their lives. I guess for the protesters it is more fun to sit around while the weather is still warm and complain about the government and the banks and being underemployed.
We have added 3 part-time staff in 2011 and have job openings for more talent while other companies are freezing hiring and wages. So here's my offer - if you think you are underemployed and have what it takes to contribute to our organization and an aptitude to figure things out without a lot of hand holding, then get in touch with me and we'll talk.
The current newsletter and all prior newsletters are archived at the Mortgage by Randy blog. Bookmark it and share with your friends and family. You can make your own comments and feedback as well. Time for the news…
Mortgage Market: Big Bank Lawsuit Settlements May Mean Money For You
When the last mortgage meltdown happened in 1999, I was in the middle of it and learned that it takes up to five years to unwind the mess through the legal system. It happened all over again in 2008 so it does not surprise me that as we enter year four since the collapse we are still seeing major legal fallout. It could pay (literally) for your to pay a little attention to what is happening.
Bank of America is embroiled in multiple mortgage lawsuits. They recently settled one that involves cash payments being sent to affected home equity line of credit customers dating back as far as 2005. If you missed out on the money grab, don't worry, there is more to come.
Another example that it is not too late for affects Wells Fargo mortgage customers. Wells Fargo has been fined $85 million for misleading home borrowers. The bank was ordered to identify and compensate some borrowers who took out subprime, cash-out refinancing mortgages from January 2004 to June 2008. Wells Fargo Financial employees steered potential prime borrowers into more costly subprime loans and separately falsified income information in mortgage applications. The Federal Reserve said a preliminary estimate of the compensation is $1,000 to $20,000 for at least 3,700 borrowers and possibly over 10,000.
Actions such as these usually trigger a mass mailing to affected customers who have the right to optin or opt-out of the settlement. If you do not receive a mailing but believe you should be included in the group of affected customers, contact Wells Fargo's attorney via registered mail: Douglas R. Edwards, Esq. 301 S. College Street, Charlotte, NC 28202-6000.
Personal Credit: Identity Theft Alert Concerning Fake Emails From FDIC
Pay attention to this identity theft alert about fake emails from the FDIC (Federal Deposit Insurance Corporation). Please share this information with family and friends any way you can including Facebook and Twitter. The FDIC recently announced that it has received numerous reports of fraudulent emails that have the appearance of being from the FDIC, but are criminal attempts at identity theft.
Common Traits Of Fake Emails From the FDIC
The fake e-mails from the FDIC are official looking. However, they have some common traits that you can easily detect. Here are some examples of what to watch for so that you can protect yourself from identity theft:
1) Fake emails from the FDIC are sent from addresses such as:
"no.reply@fdic.gov"
"alert@fdic.gov""subscriptions@fdic.gov"
or even the email address of a specific employee (probably not a real person) such as "hgrene@fdic.gov" which is an attempt to make the fake email from the FDIC look more personalized since it is from a specific employee. Don't be fooled.
2) The fake emails from the FDIC have a subject line that read: "FDIC Notification." or something similar.
3) The fake emails from the FDIC are addressed to "Dear customer" or "Dear Business Owner," or "Dear Business Customer." Other variations likely exist.
4) The body of the fake emails from the FDIC include alarming statements designed to create an emotional response from you and a sense of urgency to take action. Here is an example,
"Your account ACH and Wire transactions have been temporarily suspended for security reasons due to the expiration of your security version. To download and install the newest installations read the document(pdf) attached below. As soon as it is set up, your transaction abilities will be fully restored."
Also, make note that some fake emails from the FDIC state, "We have important news regarding your bank," or another variation such as "We have important news regarding your financial institution."
5) The fake emails from the FDIC typically conclude with,
"Best regards,
Online security department
Federal Deposit Insurance Corporation."
The emails look very official and legitimate. They sometimes display the FDIC logo as well. Just remember that the FDIC would never contact you out of the blue in this manner.
6) The fake emails from the FDIC may include an attachment named "FDIC_document.zip."
The emails and attachments are fraudulent and were not sent by the FDIC. Recipients should consider the intent as an attempt to collect personal or confidential information, or to load malicious software onto end users' computers. Recipients should NOT open the attachment.
Variations Of Fake Emails From the FDIC
In addition to the specific characteristics described above, consumers must be aware that other subject lines and variations to the emails will occur over time. The bottom line is that the FDIC does not directly contact consumers in this manner nor does the FDIC request personal financial information from consumers. Please share this identity theft alert about fake emails from the FDIC with others so we can help prevent another victim of identity theft.
Economy & Financial Insights: Historic Interest Rates Good For Mortgages Bad For Pensions
Interest rates continue to fall and have entered all-time low territory. So why is there is no jubilation and lines of people at the banks trying to buy homes or refinance existing loans? Despite the cheap money, it is still challenging for many homeowners who are underwater on their existing loans and who may have other credit blemishes due to job loss, job change or inconsistent income. Certainly, there are some people who are able to take advantage of the cheap money but not the massive numbers that we saw in boom years long past.
There is a scary flip side to the interest rate environment. Pension funds which rely heavily on bonds and other interest rate based securities to generate sufficient invest returns to pay retirees are suddenly not making enough to cover their obligations. Compound that with retirees trying to living off their life savings which barely generates 1% and you can begin to see the potential epidemic. The longer we endure this type of interest rate environment, the wider the funding gap of pension plans. This will put pressure on stocks if companies they are forced to close pension gaps with current earnings.When you add the additional factors of a massive Baby Boomer generation that is retiring right now and the longer life expectancies of Americans due to better health care, you can see how there are several layers creating a perfect storm of massive pension underfundings.
Question of the Month: How Can I Get A Mortgage With A Prior Bankruptcy?
Bankruptcy became an unfortunate option for many people as a result of the financial crisis the U.S. suffered the past three years. For those that still want to take advantage of lower home prices despite their credit issues, there is still hope. If you are in a chapter 13 or chapter 7 bankruptcy, how hard will it be to get a FHA mortgage?
FHA Mortgage Rules - Chapter 13 Bankruptcy
FHA will consider appoving a borrower who is still paying on a Chapter 13 Bankruptcy if those payments have been satisfactorily made and verified for a period of one year. The court trustee's written approval will also be needed in order to proceed with the loan. The borrower will have to give a full explanation of the bankruptcy with the loan application and must also have re-established good credit, qualify financially and have good job stability.
FHA Mortgage Rules - Chapter 7 Bankruptcy
At least two years must have elapsed since the discharge date of the borrower and / or spouse's Chapter 7 Bankruptcy, according to FHA guidelines. This is not to be confused with the bankruptcy filing date. A full explanation about what caused the bankruptcy will be required with the loan application. In order to qualify for an FHA loan, the borrower must qualify financially, have re-established good credit, and have a stable job.
Giving Back: College Ain't Cheap. Rally The Family To Generate Rebates From Normal Shopping
We have shared information about Upromise in previous newsletters and there is a new way to earn money to fund your Upromise account. As a refresher, Upromise helps students and family start planning and saving for college, with tools, resources and the ability to receive money back in a college savings account when shopping smartly. Upromise President David Rochon said. “Half a billion dollars earned through Upromise represents tuition and fees for 76,000 students to attend a public university and a tremendous start.”
Starting in September, Upromise has partnered with e-rewards. I have been a member of e-rewards for years which pays you money to take online surveys and now you can funnel those earnings into your Upromise account. The program now has about 40,000 retailers, gas stations and restaurants as partners, as well as hundreds of online retail shopping sites. When members spend money at participating retailers, a portion of what they spend is credited to a college savings account. 
Need volunteers? Do you have a fundraising event upcoming? Do you have a personal web site where you are raising donations for your cause? Submit the information to randy@mortgagebyrandy.com by the 5th day of each month and we will do our best to include your information in the next issue.
Life continues its twists and turns. Although we are behind schedule in relaunching our new mortgage company, there are compensating factors that make it ok. First, the success of our DailyDollar newsletter continues and we were just named in U.S. News and World Report as one of the Top 8 Most Savvy Personal Finance Podcasts. Subscribe to the DailyDollar on iTunes and see for yourself! I will be in Miami next week for more continuing education under the new national mortgage licensing requirements and then to Troy, New York in late October for reunion at Rensselaer. Let's Go Yankees!
Randy
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Mortgage by Randy newsletter, Copyright 2008-2011 Randy Mitchelson. All Rights Reserved.
Randy Mitchelson is a licensed mortgage professional. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Randy Mitchelson. Recommendations may change and readers are urged to check with their financial advisors before making any decisions. Opinions expressed in these reports may change without prior notice. Mitchelson can be reached at 239-851-6738.
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You have permission to publish this article electronically or in print as long as the following is included:
Randy Mitchelson, of Estero, Florida, is a business professional, entrepreneur and author with over 15 years experience in financial services. Mitchelson has served in leadership roles for Global & Fortune 500 firms like Bank of America, KeyBank and CIBC.
As a member of National Association of Mortgage Brokers, Randy has earned the Lending Integrity Seal of Approval. He educates both individuals and groups about credit scoring by conducting personalized credit report reviews, action plans and one on one consultations. He is author of the free monthly newsletter, Mortgage by Randy as well as the Daily Dollar newsletter. A licensed mortgage professional, Mitchelson also founded Trinity Home Financing, LLC.
He is owner of Estero, Florida based National Web Leads, LLC, an internet lead generation service matching consumers with lenders for auto, cash advance and other financial products. Through its network of partners, National Web Leads delivers innovative Web 2.0 performance marketing solutions to advertisers and affiliate marketers.
Mitchelson earned his BS and MBA at Rensselaer Polytechnic Institute in Troy, NY. He is a founding member and Treasurer of the Southwest Florida Regional Technology Partnership Inc. and Vice President for the Michelle’s Angels Foundation Inc. He is married to Susan, a Pharmacy Supervisor in the Lee Memorial Health System in Fort Myers, Florida.
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