Home Experts Experts Free Quotes Coupons Special Offers Articles Forums Blogs Join Us

hand titleSavism University -> Finance -> Home Loans
Beware of paying for a credit fix: It's a scam

Kenneth R. Harney articles


Digital Risk’s Veritas System Reinvents the Credit Score
Home Loans 

New Housing Tax
Tax Planning 

Lawsuit seeks to break a deep freeze in credit.
Home Loans 

Should maternity leave ever constitute a reason to be turned down for a home mortgage?
Home Loans 

Proposed new mortgage rules may spell trouble for homebuyers
Home Loans 

View All Articles by Kenneth R. Harney

Home Loans Articles


The Important Question You're Probably Not Asking When You Shop Mortgage Rates
Mark Fitzpatrick

Stricter rules for adjustable-rate mortgages
Mark Goldman

Woman battles bank giants over faulty foreclosure
Mark Goldman

Digital Risk’s Veritas System Reinvents the Credit Score
Kenneth R. Harney

Time to Concede Home “Ownership” Is a Fraud.
Mike “Mish” Shedlock

View All Home Loans Articles

Recent Articles


Mason Baxter: Euro Banks to Allocate More Funds to Cover Bad Debt

Sapporo International: Bank of Japan Faces Growing Concern

Building Dreams, One Home at a Time
Real Estate

How to Protect your Car
Personal Finance

Ways to Save for Your Child’s College Education
Education Planning

View More Recent Articles

Most Popular Articles


File Taxes for Free – It’s Easy as 1-2-3!
Tax Planning

When is the Dog Deductible?
Tax Planning

Health Insurance Explained

Beware of paying for a credit fix: It's a scam
Home Loans

Roth IRA Basics and Benefits
Retirement Planning

View Other Popular Articles

Ask Savism Experts

Lower Your Bills, Establish New Services, Find Service Professionals!


ArtOfSaving Get a free quota


Find an Event

Fairs, Workshops, Seminars...


Write a New ArticleSavism University Article

Beware of paying for a credit fix: It's a scam

Category: Home Loans

WASHINGTON – Picture this: You're eager to take advantage of today's troubled real estate market and buy a foreclosed house at a fire-sale price. The problem is you don't have much money for a down payment. And your credit files are scuffed up with late payments.

What you need is a service that can help put it all together for you – linking you into lists of available foreclosures, credit repair, and even low down-payment mortgage financing.

Companies that promise to do at least some of these things – especially to fix your credit – ply their wares aggressively on the Internet. But can they really do what they claim? Based on a recent settlement by the Federal Trade Commission, the only conclusion is: If the deal involves paying money upfront, don't do it.

According to a complaint by the FTC filed in U.S. District Court in New York, the Home Buyers Consulting Network Inc. of Raleigh, N.C., promised would-be buyers that it could raise their credit scores by 50 to 100 points, help them locate foreclosed houses through a network of participating agents, and connect them with low-cost mortgage money to complete the deal.

Through online and telephone pitches, Home Buyers Consulting Network and its affiliated firms – GoodCredit.com, the Good Credit Company and 0DownHomeBuyers.com – allegedly guaranteed clients that they could “remove accurate, negative information from (their) credit reports permanently, including bankruptcies and past due bills,” according to the FTC's complaint. Sales representatives of the companies allegedly claimed they could not only remove bankruptcies from the national credit bureau files, but also from public records.

For their services, the companies typically requested an initial payment of $99 for credit repairs and $399 for credit and home-buying “consulting” services. The client also had to agree to a minimum contract period – anywhere from six to 12 months – and make weekly or monthly payments of $19 to $49. The companies promised to refund all monies except $99 if the customer was not satisfied.

After consumer complaints and an investigation in cooperation with North Carolina authorities, the FTC filed suit against Home Buyers Consulting Network and its chief executive, Douglas Andersen Moore, for allegedly violating federal credit and consumer protection statutes.

Among the claims:

Home Buyers Consulting Network and its affiliates falsely promised clients that they could scrub credit records of even the most severely negative information, even though they were not able to do so when the information was “accurate and not obsolete.”

The companies required payment in advance of actually performing their credit services – a violation of the federal Credit Repair Organizations Act. The companies also allegedly failed to include mandatory disclosures of consumers' rights to cancel their contracts without penalty within three business days of signing agreements, also in violation of federal law.

In a settlement with the FTC in late May, neither Moore nor the Home Buyers Consulting Network admitted wrongdoing, but they agreed to stop “using any untrue or misleading statements” to pull in buyers looking for credit fixes, as well as to cease collecting money upfront for credit-repair services, and to provide the full disclosures to clients required by federal law.

The settlement imposed a $573,000 civil penalty and a $40,000 restitution of funds to customers. However, when Moore and his companies provided documentation that they were financially unable to pay the penalties, the FTC agreed to suspend all but $10,000 of restitution to customers. As part of the settlement, Moore agreed to intensive, ongoing monitoring of his business practices.

William I. Rothbard, the defendants' attorney, noted that the agreement “does not prohibit” Moore from further involvement in credit, real estate or mortgage activities, and that “he is moving forward.”

What's the significance of the settlement for buyers who need to boost their credit scores to qualify for a mortgage in today's tougher underwriting environment? Number one: If the problems in your credit files reflect actual late payments, nonpayments, charge-offs, court judgments, tax liens or foreclosures, don't look for magic or miracles. No legitimate “repair” service – no matter how much you pay – can make them disappear permanently.

Most serious credit issues are likely to remain in your files for three to seven years, and bankruptcies and foreclosures for as much as a decade. Tax liens sometimes remain on your records until they're paid.

On the other hand, if your credit files contain erroneous information, it's a different dynamic. Either you or an organization that specializes in credit assistance can contact the sources of the bad information and get it corrected on your national bureau files.

But under no circumstances should you pay money upfront for credit-repair services. If a company requires you to do so, file a complaint with the FTC at ftc.gov.

Kenneth R. Harney is a nationally syndicated real estate columnist with the Washington Post Writers Group. His e-mail address is kenharney@earthlink.net.
© Washington Post Writers Group.

Spread The Word

Rate This Article
RateRateRateRateRate RateRateRateRate RateRateRate RateRate Rate Rate
Comment This Article
Submit Comment
Jordan Bauer Jordan Bauer
Date: 3/20/2015
Time: 05:48
Thats a good piece of information. Thanks for taking out time to explain in detail. This is going to solve most of the common queries and It is our duty to spread awareness and update people with what benefits they can avail.
Resources / Become Our Partner
banner banner banner banner banner banner banner
Ask Experts
Savism University
Special Offers
Become a Member
Request Free Quotes
Links - Add Link
Privacy Policy
Business Directory
Blog Directory
Video Directory
National Savings Day
Learn at Lunch
rssfeed RSS Headlines

Add Your Business
Become an Expert
Participate in Discussions
Post New Article
Create a Coupon
Ask a Question
Contact Us
About Us
Site Map
Connect on Twitter
2018 Art Of Saving
Savism, National Savings Day & United We Save are registered trademarks.