Posts Tagged ‘collection agency’
No, it’s not a new special on Fox TV. It’s an all too familiar practice by some shady debt collectors – they have the debtor on the phone and the barrage starts. The debt collector starts insisting on money immediately, following the demands with threats of property seizure, wage garnishments, and even jail time. The problem is, most people don’t know that the moment a debt collector or a debt collection agency begins to use these tactics, they’ve broken federal law.
There exists a set of federal statues known as the Fair Debt Collection Practices Act. It safeguards debtors from rough conduct. Under the Act, a debt collector cannot carry out any of the conduct listed above. If debt collectors are found practicing any of these tactics, they can be punished under the Act’s provisions.
Some of the other practices that are not allowed under the act include the following. They are explicitly not allowed to use profane language. They cannot threaten people under any circumstances. They cannot misrepresent themselves as anything other than a debt collector. They have no legal power to garnish wages. In order to garnish wages, they need a judge’s signature.
What many people don’t realize is that debt collectors usually work for bonuses. Under their bonus structure, they can bring home five figure checks every month dependent on how much money they are able to collect. When people go shopping and are faced with by that annoying salesperson who is looking to make a commission, this is the same idea. That salesperson and the debt collector both make money off of you.
Debt collectors can sometimes labor under as much strain to collect these debts as the debtors. Depending on the type of debt collection agency, they may acquire the bad debt and have to try and recoup it as fast as possible. There is increased pressure involved when trying to collect a debt in this situation.
It’s important for consumers to be educated about the legal protections afforded them. Otherwise, there will be unchecked abuses that are completely unnecessary and stressful, not mention illegal. In these stressful economic times, the more help that consumers have, the better.
Rapid Recovery Solution is an attorney based debt collection agency that collects consumer and business debts. Contact them today for more information and to request your FREE quote!. Unique version for reprint here: When Debt Collectors Attack.
Perhaps the most common problem in today’s mortgage industry is a low loan-to-value ratio. This is the percentage of the loan total compared to the overall value of the property. For example, if you currently have a balance on your first mortgage of $200,000 and the appraisal comes back with a value of $250,000 then your loan-to-value ratio (LTV) is 80%. For a conventional loan, lenders require a minimum of 5% equity or a maximum LTV of 95%. Of course, the problem is that over the past 2 years a lot of areas of the country have seen properties decline in value by 10 to 20% or more causing many homeowners to have a high LTV ratio. Even if they are under 95%, many homeowners still find themselves having to settle for higher interest rates, PMI payments, or both.
Another typical reason why mortgage applications get denied is a problem with the borrower’s credit report. A lot of attention is paid to the FICO score, which will need to be at least 620 with most lenders and over 720 to get the best interest rates. Very often medical collections show up on credit reports without the applicant having ever been notified by the medical company or their insurance company. The balance of a medical bill will simply be sold to a collector who will immediately contact all 3 credit bureaus.
Lenders will require that all collection accounts be satisfied prior to closing and many times it could take months before an applicant is able to pay it off and get it removed from the credit bureaus. Also, if there are any other issues such as late payments, liens, and high balances, it is best to take care of it ahead of time because lenders will not accept updated credit reports once they are pulled for an application.
Also, a reason to get denied is if the applicant’s debt to income ratio (DTI) is too high. The DTI is a simple calculation which begins by first taking the total of all applicants’ gross monthly income before taxes. For example, if a married couple makes $40,000 and $50,000, respectively, then their gross monthly income would be $7,500 ($90k/12). Often overlooked, insufficient reserves can prove to be the difference between a closed loan and a denial. What most people do not know is that most lenders will require at 2 months of reserves for loans with loan-to-value ratios over 80 percent. This can be a decent amount of money. For example, if the loan amount is $300,000 the principal and interest portion of this, depending upon the interest rate, can be as much as $1,600.
Perhaps the most infuriated mortgage applicants are those that receive a “subject to” appraisal. This means that the appraisal report and the value for the property is subject to certain conditions being completed, typically repairs to the property. These days, every detail of a property’s appraisal is scrutinized and the repairs needed might seem trivial to a potential borrower, but many lenders will refuse to close on a loan until appraiser’s conditions are met.
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In the first two articles I defined what a delinquent account that had been sent to collection was, how sending late accounts out to an debt collection company benefits a creditor, and the practice of selling an old debt to a third party collection agency.
I spoke about what kinds of information a collection agency will use and collect in their efforts, and additionally that third party collection companies are governed by federal and state laws and are overseen by the FTC.
Some collection agencies will use illegal, deceptive and strong arm tactics to confuse and scare debtors that include pretending that they are one of their creditors and asking them to verify information, pretending to be an old friend or neighbor to catch a debtor off guard, repetitively calling or mailing a debtor to the point where it gets to be a nuisance, or sending threatening letters or leaving threatening voicemail messages.
Legal but manipulative practices include pressing the debtor, preying on their emotions, and using vague threats like “respond within ten days or further collections attempts will follow.” Other illegal methods include idly threatening lawsuits or pursuing lawsuits when the collection agent has no intention to, threatening to throw a debtor in jail, threatening to garnish wages or seize bank accounts when they have no authority to, lying about the amount that is owed, or asking for more than what is owed are used as well.
For the debt collection industry, time is the enemy and a good debt collector is fully aware of this. Their goal is specifically to obtain money as soon as possible.If you are talking to a debt collector, keep in mind that at any time you have the legal right to tell them you are busy and will call them back if you are flustered, hang up, cool off, develop a game plan, and contact them later. An aggressive debt collector will ask you why you can’t make payment arrangements today.
Rapid Recovery Solution is a commercial collection agency that writes articles on third party collection companies. This article, Legal And Illegal Tactics A Collection Agency Will Use: Debt Collection Basics Part Three is released under a creative commons attribution licence.
Recent research by RealtyTrac Year-End 2009 Foreclosure Market Report reveals that 3,957,643 foreclosure filings were reported on 2,824,674 U.S. properties in 2009. This includes scheduled foreclosure auctions, default notices and bank repossessions.
This is a twenty one percent increase in land from statistics in data that was collected in 2008, and a one hundred and twenty percent increase in total properties from 2007. Additionally the report indicated that one in forty five housing units, 2.21 percent, got at least one foreclosure filing in the year of 2009, up from 2008′s 1.48 percent and 2007′s 1.03 percent.
Just in the month December, foreclosure filings were reported on 349,519 properties in December. That’s a fourteen percent jump from the previous month of November and a fifteen percent increase from 2008. Nevertheless, even though there was an increase in December, foreclosure activity in the fourth quarter of 2008 has decreased by seven percent.
Of all of the states, Nevada claimed the nation’s highest state foreclosure rate; more than ten percent of housing units received at least one foreclosure filing in 2009. That makes Nevada’s third consecutive year at the top of the foreclosure list. Nevada’s foreclosure activity in December increased twenty seven percent from the previous month, but still was down by twenty two percent from December of 08.
Arizona claimed the nation’s second highest state foreclosure rate in 2009 with more than six percent of properties receiving at least one foreclosure filing during 2009, and Florida claimed the nation’s third highest foreclosure rate at 5.93 percent of its properties getting at least one foreclosure during the filing year.
This raises concerns in the debt collection industry. Recent trends have noted that consumers are pumping up their credit debt and low balling their assets to receive lower payment plans. The fact that they are maxing out their credit cards to receive lower payment plans does not look promising.
Mallory Megan is employed by a debt collection agency. Also she composes stories on business and finance, consumer spending and collection agencies. This article, Foreclosures On The Rise has free reprint rights.
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In the last article I spoke about seemingly disreputable debt consolidation schemes that you should be aware of. Read on to find out more about these scams….
Meanwhile, your creditors are going without being paid. Unluckily, while you are collecting that payment, you aren’t paying your bills and you may be sinking lower and lower into debt.Instead of taking this gamble check out a nonprofit credit counseling firm that may charge you only twenty dollars, if anything. Instead of billing the debtor, these counselors will typically get what is called a fair share percentage payment from your creditors after you have been paid.
Finally, and most important, do NOT put trust in the debt settlement counselor who assures you that “We will handle everything. You should stop communicating with your creditors.” Despite the fact that the idea of not speaking to creditors and ignoring their mail sounds like a real load off of your back, ultimately, it is your debt and your credit score at hand. Never send in a change of address form directing all creditor mail to a debt settlement company.
It is important to bear in mind that the creditor is the one with whom you signed your contractual agreement. When all of your statements are being sent to the debt settlement company, you relinquish that control. You do not know how much in interest and late fees are being tacked on. You also won’t know if your debt has been moved into collection.
A few final words of wisdom. If you believe that you need debt settlement, try debt management first. Call up your creditors and request suspended payment, reduced interest or any other payment terms that may suit your financial situation in a more favorable light. Even though it might seem like a long shot, or a pain, it is always very important if you are about to miss a payment to call your creditor and say “Listen, I can’t make this month’s payment. I’d like to work something out with you.
Rapid Recovery Solution is a credit debt collection agency. Visit the Uber Article Directory to get a totally unique version of this article for reprint.
It was recently revealed in a study that laws that ban cell phone use while driving fail to reduce crashes. According to the new Highway Loss Data Institute, there have been no reductions in crashes since cell phone bans have taken effect.
This information was obtained by a comparison among insurance claims for crash damage in four United States jurisdictions both before and after these bans.
Month to month fluctuations in the rates of collision claims in the place with restrictions were taken into account and it was shown that there was no difference between either jurisdiction. Despite the fact that the cell phone bans have reduced hand held phone use, several studies have established that talking on the phone increases crash risk. It has been determined by two independent studies that people who use cell phones are four times as likely to crash.The information that the HLDI uses doesn’t identify drivers using cell phones when their crashes occur. But the reductions of observed phone use have been so large, one would suspect that crashes should be reduced as well.
“So the new data that we have collected doesn’t match what we currently know about the risk of phoning and texting while driving,” An analyst asserts. “Clearly, if crash risk increases with phone use and there are less people using cell phones, we would expect to see a decrease in crashes. But we aren’t seeing it. Nor do we see collision claim increases before the phone bans came into play. This is surprising, too, given what we know about the growing use of cell phones and the risk of talking on the cell while driving. We’re currently gathering data to figure out this mismatch.”
There are a number of factors that could be diminishing the effects of hand-held phone bans on crashes. One factor is that drivers in areas with cell phone bans might be switching to hands-free phones because no state forbids any type of these phones. If this was happening, crashes wouldn’t go down because the risk is about the same whether the phones are hand-held or hands-free. D.C. and twenty one states do ban beginning drivers from using hands-free phones, but these laws are difficult to enforce.
Rapid Recovery Solution is a third party debt collection company. lawyer based and equipped with skiptracing tools. Get a totally unique version of this article from our article submission service
It was revealed in recent news that top legal prosecutors in Washington and Louisiana announced actions they had taken against accounts receivable management firms and their owners and managers.
Louisiana’s attorney general James Caldwell announced on Friday that his office had gotten a hold of injunctions against two collection agencies and their owners. On the same day, Rob McKenna, Washington’s Attorney General said that his office had settled charges with a collection agency that had promised to stay on the straightened arrow. In a press release, Caldwell’s office stated that in late December they had gotten a hold of an injunction against Bush and Kennedy, Inc, a Baton Rouge based collection company. The order he won placed restrictions on the business, banning them from operating further, and specifically, ordered that two of the firm’s principals, Quay W. Pattott Jr, and William S. Fesguson were banned from conducting business together.
Late last week, a judge hit Ferguson and Parrott with additional injunctions as was requested by Caldwell’s office. Ferguson is barred from using deceptive and unfair acts and practices at his current place of business, Franklin, Grant and Associates Incorporated, a collection agency based out of Metairie Louisiana. Parrott is completely restricted against conducting any new business at his new place of work, Metairie based Halsey and Associates, LLC.
McKenna’s Washington office said that Topco Financial Services Inc, a Washington based collection agency agreed not to threaten, harass or curse out consumers as part of a settlement. The collection company must pay around $38,000 in legal fees and penalties. An additional $82,000 in fees and penalties were suspended pending that the company agrees with the settlement terms.
In accordance with their agreement, Topco is prohibited from harassing, intimidating, threatening and embarrassing debtors, including using profanity. They are restricted from implying that failure to pay a delinquent bill will result in suspension, a revocation, or impairment of the debtor’s driver’s license. They are banned from threatening debtors with impairment of their credit rating. However, the company is allowed to legally report debts to credit reporting agencies.
Mallory Megan works for a debt collection company. She also composes stories on business, finance, consumer spending and collection agencies. You are welcome to reprint this article – but get your own unique content version here.
It is hard to believe that people who have taken out mortgages become best friends with their mortgage lenders. Mortgage lenders raise rates as they please, and then, when they don’t receive that payment, they will take away your place of residence. Today, this is a disturbing trend that results in American homeowners either underwater or renting an apartment. And now, banks are attempting to get their money back from the foreclosure sale.
As today’s economy continues to suffer, it is all too often that a house goes into foreclosure and the amount due on the mortgage is more than the amount that the house was sold for. This remaining balance is called deficiency and it leaves mortgage lenders at a loss for words.
And despite the fact that there can be an agreement with the mortgage lender or bank to sell the house for less, these institutions may still want to be paid what is owed. Certain factors may increase one’s risk for this sticky situation including credit history, other assets owned, and liens such as second mortgages.
This problem is especially important to a new group of homeowners who are opting to walk out on their houses even though they are able to afford payments. This is known as the “strategic foreclosure.” The belief of the people that do this is that it is better to pay rent at $1,000 than $3,000 on a mortgage every month.
Obviously, the mortgage lenders are not big fans of these strategic foreclosures. Not surprisingly, they are ramping up their efforts to get back the money that is owed on these houses. The main targets? Homeowners who are only slightly behind on home payments.
Banks and mortgage lenders don’t have to address this issue right after the house is foreclosed and then sold. It is actually in their best interest to go after the money years after the fact. It is much more lucrative for them this way, because once someone recovers from financial failure and their credit goes up, there is more money to be taken.
Collection agencies will collect on debts starting at $25,000 or more. To get around deficiency judgments, you should always take a look at the paperwork. Never sign anything that says anything about remains being owed and have the mortgage lender release any more obligations on the mortgage.
Mallory Megan works for a debt collection agency. She also writes articles on business, finance, the credit industry and collection agencies. You can get a unique content version of this article from the Uber Article Directory.
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