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In November 2022, the Federal Trade Commission (FTC) charged Sean Austin, John Steven Huffman, John Preston Thompson, and their affiliated companies with deceiving consumers by falsely promising to eliminate or substantially reduce their credit card debt. The FTC alleged that the defendants took tens of millions of dollars from people through their deceptive debt relief scheme, which operated under multiple names such as ACRO Services, American Consumer Rights Organization, Consumer Protection Resources, Reliance Solutions, Thacker & Associates, and Tri Star Consumer Group.

To prevent further harm to consumers, the FTC requested that a federal court temporarily freeze the defendants’ assets and appoint a receiver over their businesses while the case took place. The court orders, which were agreed to by the defendants to settle the case, include a number of requirements to prevent the defendants from engaging in similar activities in the future.

Firstly, the defendants are permanently banned from advertising, selling, or assisting in any debt relief product or service. Secondly, the defendants are permanently banned from participating in telemarketing. Thirdly, the orders broadly enjoin the defendants from deceiving consumers about any other product or service they sell or market.

The defendants are also required to surrender certain property interests and assets contained in multiple bank accounts that will be used to provide any possible refunds to affected consumers. The orders contain a total monetary judgment of $17,486,080, which is partially suspended upon the defendants’ surrender of assets and also based on their inability to pay the full amount. If the defendants are found to have lied to the FTC about their financial status, the full judgment would be immediately payable.

In summary, the court orders permanently ban the defendants from engaging in debt relief products or services, telemarketing, and deceiving consumers about any product or service they sell or market. The orders also require the defendants to surrender certain assets contained in multiple bank accounts to provide possible refunds to affected consumers and contain a total monetary judgment of $17,486,080.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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Source: getoutofdebt.org

Apache is functioning normally

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File this story under the “Why Can’t Credit Scoring Be Less Complicated.”

I received the following question from a Minter a couple of weeks ago and couldn’t wait to write an article answering his question.

“John, last week I went to a car dealership to buy a new truck. I went on the test drive, really liked the truck and asked the dealer if they could get me a better interest rate than by credit union, which was offering me a great rate for 48 months. When the manager showed me my credit report I noticed that the FICO score that was used was some sort of auto credit score. I asked the guy what that meant and he was clueless. What gives?”

The FICO Auto Industry Option

What gives is that most auto lenders that use FICO credit scores use a different variety of FICO score called the “FICO Auto Industry Option” score. Let’s call it the FICO Auto Score, for short.

FICO develops a variety of credit scores including these semi-customized scores referred to as Industry Option scores. These scores are used by lenders in the auto, credit card, and installment industries, which pretty much covers everyone.

Here’s How They Work

Stop thinking like a consumer and start thinking like a lender, just for a moment.

If you are an auto lender do you really care how an applicant is paying their mortgage loan or their credit card bills?

You probably do, but not nearly as much as you care about how they’re paying their auto loans.

Well, you’re not the only one who thinks that way. FICO has built an entire stable of these credit score variants specifically for different loan types.

There are auto specific scores, bankcard specific scores, mortgage specific scores, installment specific scores and personal finance specific scores…all on the market today.

The choice of which score to use is one made by the lender.

Because you’re asking about the FICO Auto score we’ll focus on that one. The FICO auto score calculates your base or generic FICO score, and then holds on to it in credit score limbo.

Then, using what’s technically referred to as a “scorecard overlay” the FICO auto score takes a second bite at the apple and re-evaluates the consumer’s credit report but this time focuses on attributes that are especially important for auto loan risk evaluations.

For example, do you have other auto loans on your credit report?

If so, are those loans paid on time or are you missing payments? These are specifics that tell an expanded story about how you’re likely to pay an auto loan rather than simply “any” loan.

How Different are the Two Scores?

Don’t get me wrong, your auto score isn’t going to be wildly different than your generic FICO score.

You’d be safe to assume that the two score varieties will be within plus or minus 15 to 20 points, but that can vary.  Of course this is all academic if you’ve got fantastic credit reports.

Those are going to yield a great credit score regardless of the score type.

This rule is going to hold true not only for FICO’s generic score, but also their industry specific scores.

And, it’s going to hold true for every other credit scoring system on the market, like the VantageScore credit score, which I wrote about for Mint here.

It’s also going to hold true for the free scores available from the variety of websites that give them away, like www.CreditSesame.com. The better your credit reports the better your scores, regardless.

Unlike sites that allow you to check your credit report for free, FICO’s industry specific scores are not available to consumers on any website for any price.

In order to get those you’ll just have to keep relying on the Finance and Insurance Manager at the local auto dealership.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.

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Source: mint.intuit.com

Apache is functioning normally

One of the nation’s top homebuilders plans to buy its own homes and rent them out.

Beazer Homes introduced its “Pre-Owned Homes Division” today, which will acquire, improve, and rent out recently built and previously owned homes in markets where the company operates.

“Homes targeted for inclusion in the Pre-Owned Homes program will have been built since 2004 by a reputable builder, including homes built by Beazer Homes,” the company said in a release.

“All Beazer Pre-Owned Homes will receive necessary repairs and upgrades to bring them up to strict Company standards.”

Beazer expects to acquire homes at a discount as most will be distressed sales, including foreclosures and short sales.

And Phoenix seems to be the test market, with more than 100 homes expected to be purchased in fiscal year 2011.

Beazer said it chose the desert metro because the rental market for recently-built homes is strong, with an estimated vacancy rate below five percent.

If things work out, Beazer may expand the program to include homes in Nevada or California.

The company said it will target consumers who have elected not to become homeowners, along with those unable to fully qualify for mortgage financing.

The move should help Beazer on a number of fronts, as they’ll be able to remove eyesores in the very neighborhoods they created, which should boost home prices and investor/homeowner confidence, while reducing foreclosures and upping home sales.

Those who rent the properties will eventually be given the option to buy as well.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Here’s yet another post in my growing series of wondering if home prices are too high.

Earlier this week, Black Knight Financial Services noted that home prices increased to within 3.8% of their all-time highs set back in June 2006. Other home price indexes (and specific metro areas) are spitting out new record highs.

That may scare some folks, including myself, as I tend to be a bit more conservative when it comes to massive year-over-year home price increases.

It has been about 10 years since home prices were defying expectations and now they appear set to finally surpass those old unsustainable highs.

If you’re wondering why home prices have risen so much since bottoming around 2012, the answer is pretty simple.

Home prices got way too cheap after the crash and inventory has remained very tight in spite of a flood of foreclosures. That, plus super low mortgage rates sprinkled in, has driven home prices higher and higher for months on end.

Your Last Chance to Get In

  • The fact that sentiment is still mixed
  • Tells me that this housing recovery still has legs
  • It’s also important to remember that recoveries have ups and downs
  • Just like downturns, and they play out longer than anticipated

But now we’re getting a little irrational again, at least in my opinion. I’ve been hearing that ill-fated sentiment of “Buy a house now or you may never get the chance!” SMH.

Usually when people start saying things like that it isn’t long before it all goes very wrong. But as I noted in recent posts, we aren’t quite there yet.

Indeed, a return to bubble-era home prices doesn’t mean the bottom is just going to fall out. Clearly this has played out in history many, many times. Otherwise how would we reach new highs to begin with?

There’s no inherent problem with higher highs, but how quickly we get there could pose a threat, and overshooting the mark is also a major concern.

A commentary released this week by Freddie Mac titled, “How to Worry About Home Prices,” attempts to answer that very question. But they even admit it’s a tough one to answer.

However, they do outline a strategy we can use to determine if and when we’ll be facing another crisis thanks to unsustainable home prices.

Start with the PTI

  • Consider the price-to-income ratio (PTI)
  • Which is used to determine if home prices are outpacing wages
  • This can tell us if the current trajectory is sustainable
  • Or if affordability will begin to erode and take the housing market down with it

It rhymes with DTI, but is actually the price-to-income ratio used to determine if home prices have outpaced incomes.

Freddie refers to it as the “clearest indicator of the long-run sustainability of house prices,” although still not entirely sufficient on its own.

Basically you can use this metric to determine which metros in the United States require further scrutiny.

The median PTI ratio between 1993 and 2003 was 3.5, so this is seen as “normal” according to Freddie.

It climbed as high as 4.8 in 2005 before the housing bubble popped, and as low as 3.2 in 2011 when everyone lost confidence in the housing market.

We’ve since returned to 4.0, which is above the norm but just below 4.1, which Freddie calls an “outlier threshold” and says separates the “usual” and “unusual” values of the PTI ratio.

In other words, we’re getting into murky territory again, but that alone is not reason to freak out, at least not yet.

Then Ask Why the PTI Is High

  • Assuming the PTI in your city is high historically
  • You need to determine why it’s elevated and if it’s above normal range
  • Then you need to dig down and find out if a high PTI is warranted
  • Based on things like employment growth (think tech scene in Seattle) or if it’s financially driven by things like easy credit (uh oh!)

We need to know why the PTI is high for a given metro to see if it points to another housing bubble.

In red-hot San Jose, home to Silicon Valley, the PTI is a seemingly very high 9.6, but the outlier threshold for that specific region is 9.4. So while elevated, it’s just above its already historically high level.

Then consider Dallas, where the PTI stands at just 3.4, but is actually above its outlier threshold of 3.2.

This is why you have to examine each metro carefully, instead of attempting to determine if the entire nation is under or overvalued, or evaluating a PTI without historical and geographical context.

Once we have our PTI, we need to ask three main questions to determine if a bubble is imminent.

Are there nonfinancial reasons for the high PTI ratios?

If a given metro’s PTI is elevated for nonfinancial reasons, then it could be perfectly fine because bubbles are financially driven.

For example, if the region is growing rapidly because of employment demand in a specific industry, high home prices may be perfectly acceptable and sustainable.

Limited supply is also driving home prices much higher.

Additionally, the PTI ratio may be thrown off because of income inequality – put simply, if richer people are the ones buying homes they may actually have the income to absorb higher home prices. So it’s not a perfect science.

Conversely, if home prices are rising rapidly for no apparent reason (such as easy credit) you might start to worry.

Are credit conditions deteriorating?

Next, we have to ask if credit conditions are going downhill. As of now, mortgage underwriting is not even comparable to what it was before the previous crisis, and that’s a very good thing.

There aren’t many stated income loans being originated these days, nor are borrowers allowed to finance investment properties with zero money down and 620 credit scores.

Most of today’s mortgages are fully-documented, fixed-rate mortgages with nothing exotic whatsoever.

In short, standards are a lot higher than they were and should stay that way for the foreseeable future. The only risk is these new 3% down mortgages, which could pose a threat as home prices continue to rise.

If borrowers are putting next to nothing down simply to qualify because home prices have outpaced incomes, we could have a problem.

The good news is that hasn’t happened too much lately. In fact, limited inventory and intense competition is forcing buyers to put more money down to beat out other offers.

Is leverage increasing?

Lastly, we need to determine if leverage is increasing. Essentially, if mortgage debt is rising relative to home equity. At the moment, this isn’t the case.

In fact, mortgage debt has declined while homeowner equity has increased. This gives homeowners a bigger cushion between what they owe and what their properties are worth.

If they face some sort of financial crunch, those with a healthy cushion can sell if need be and probably still take in a tidy profit (and walk away with some cash in their pocket to use for rent and other needs).

During the prior crisis, you couldn’t sell your home for more than the bloated mortgage balance, which led to even more downward price pressure and tons of short sales and foreclosures.

As noted, we aren’t at that point yet and everyone appears to be paying off their mortgages. You don’t see too many interest-only loans, and definitely no pay option arms. This means today’s homeowner is actually building equity, unlike the crop of owners back in 2006-2007.

So where does that leave us? Well, the Freddie researchers conclude that aside from a few potential trouble spots, “we don’t need to worry about house prices — yet.”

A bit ominous but pretty spot on.

The issue is that the way the housing market works, we’re bound to repeat history in the future.

As home prices climb further out of reach, financing is eased to accommodate new buyers. We’re already seeing that.

These buyers wind up purchasing too much house for their budget and when the housing market naturally cools off, they’re left with very little equity and a massive mortgage (and accompanying housing payment).

I don’t see a scenario where it won’t play out like this…it’s basically ingrained in the market. So the next housing bubble is a matter of when, not if.

Source: thetruthaboutmortgage.com

Apache is functioning normally

I’m kicking off my first gift guide of the season with the design lover in mind. Self-serving perhaps? I call it strategic. I’m feeling a fresh, refined color palette for the holidays. Instead of decking your halls with the standard red and green, what if you tried a mix of white, gold and touches of warm gray instead?

The look is sophisticated, luxurious and refined. Using lots of white helps spaces feel open and airy – rather than overstuffed and cluttered. Touches of gold feel celebratory and festive. And warm gray tones add a bit of gravitas without being harsh.

I recently scoured Horchow and discovered a treasure trove of goodies at crazy good deals. The site features home decor, tableware, even gifts from some of my favorite lines, like Aerin, Palacek and of course Neiman Marcus (they’re part of the Neiman Marcus family of brands.) Starting tomorrow, you can save up to 40% off during their Finders Savers event.

I’d be thrilled if Santa put any of these pieces in his cart for me!

SHOP THE POST: 1 coasters / 2 vase / 3 pillow / 4 charger / 5 bowl / 6 tray / 7 candle / 8 vases

image 1 / image 2 / image 3

This post is in collaboration with Horchow. All thoughts and opinions are 100% my own. thanks for supporting partnerships I’m excited about and that have kept our doors open.

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Source: apartment34.com

Apache is functioning normally

A good parking space is a blessing, but you might feel your neighbor’s wrath if you don’t practice proper apartment parking etiquette. Whether you have a garage, a lot or even your own private space, it’s important to always honor the right of way and follow these ten commandments of parking etiquette.

The Commandments

    • Thou shalt not covet thy neighbor’s parking space. If you have designated parking, it’s a no-brainer to park only in your own space and to remind guests to use specified guest parking.
    • Honor thy apartment community’s posted speed limit. Slow down and try not to terrify your neighbors. You have to see them every day.
    • Thou shalt not lie about the ding you put in that guy’s bumper. If you accidentally hit your apartment neighbor’s car, leave a note. You’ll sleep better at night.
    • Uphold your neighbor’s right to carry groceries. Don’t forget that you’re parking in a place where people unload groceries, small children and pets. Keep your car in the lines and give them plenty of room to open their car doors.
    • Do to other drivers as they do unto you. The bottom line is to be nice. If someone waves to you, wave back.
    • But, thou shalt not respond discourteously to unfriendly drivers. Remember, they know where you live.
    • Respect the blind spot. Don’t come screaming around the corners in your parking garage or parking lot. One day there will be a blind spot (and an insurance claim) with your name on it.
    • Never take your neighbor’s name in vain. Parking garages can echo and sometimes walls can be thin — your neighbors can hear everything.
    • Be slow to anger. So your neighbors had a party and their friends parked in your space. If it’s the first time this has happened, let it go. If it’s the 13th time, feel free to call the apartment manager or leave a friendly note.
    • Thou shalt always use the parking brake when parked on an incline. Because that’s how safe apartment parkers (don’t) roll. (We really mean it.)