The Strategy Of Negotiating Debt
The Strategy Of Negotiating Debt
By Regis Sauger
How You Present Your Financial Situation
Obviously, the more money the creditor thinks you have, then the more he will hold out for. Explain that you want to buy a new car and need this blemish removed from your credit history so that you can get approval for a loan and you will insure that a settlement will be strictly on the creditor’s terms.
On the other hand, if the creditor gets the impression that you have very little money and you are teetering on the edge of bankruptcy, then he will be less demanding. This is where an attorney can be most helpful as explained a little later.
We have helped many families with medical bills. Hard to swallow, but true. Go to the business office of the clinic or hospital and ask to discuss your bill. Make sure that you bring copies of your paycheck, rent receipts, utility bills and any information that proves how much you earn and how much you spend. These folks know that “you cannot make soup from a stone”. So, after reviewing your financial situation they almost always come up with a payment plan. IF, you do not respond and do not want to talk about your bill, you can rest assured that it WILL be turned over to a collection agency and possibly legal action.
How You Present Your Terms
There are three approaches you can take in notifying the creditor of your full intentions, pre-notification, post-notification and incremental notification. If money is not a huge factor, and you want to get things done as quickly as possible, pre-notification of terms will help you do that.
Just like it sounds, pre-notification means you tell the creditor up front that you will require the deletion of the entire negative listing as a part of the payoff. A written agreement to delete the listing and consider the debt settled must be signed before you make the payoff.
The advantage of this approach is speedy results. You won’t drag things out only to be disappointed in the end when a creditor won’t remove a negative comment.
The drawback to this approach is that you will be asked to pay a higher settlement, because you have just said in effect “My credit is very important to me.” And they will make you pay to get it back, perhaps even 100% of the amount you owe.
The other extreme is post-notification of terms. Post-notification is where you reach an agreed settlement for the outstanding balance, but you don’t mention your terms regarding how the item will be reported until you actually send payment.
How You Utilize Your Resources And Leverage Opportunities
You should have a clear idea of what you want to accomplish before you start negotiating. Always do it in writing. A telephone call just doesn’t work. When you negotiate in writing everyone has a record. Your two priorities are:
· Negotiate negative credit information off your file.
· Negotiate a settlement.
Additionally, you should also determine what you’re going to shoot for as far as status (how comments on your credit record will be worded); and, the minimum you are willing to agree to.
In other words, decide what concession you’re going after and the maximum you’re willing to give to gain that concession-and what you’re willing to give to gain a lesser concession if you cannot reach an agreement on your first choice.
A major determining factor with any negotiating strategies is financial resources. Unfortunately, most people do not have the cash to settle a lot of large accounts at one time. This means they must use more creative means to stretch their resources. One such method is to use a debt settlement schedule. A debt settlement schedule takes the amount agreed to as a full settlement and breaks it up into installments.
The purpose of the schedule is to have negative information removed from your report as soon as you begin repayment. A creditor is most inclined to accept such a payment arrangement if he perceives that you are a candidate for filing bankruptcy.
In Chapter 13 (wage earner plan), the court may structure up to a 60-month repayment. If you propose repayment over 12 to 24 months, your creditor may see that as much more attractive an offer. In all cases, discuss your options with an Attorney and then make your own choice.
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Home Loan Refinance Online Searches Get You The Best Rates
Are you considering a home loan refinance? Online searches can often turn up the best rates. So, what should you look for in a home loan refinance online?
First you have to ask yourself if refinancing is right for you. Using a home loan refinance online calculator, compare your existing loan, a new loan and your financial situation to determine if and how you may be better off refinancing. It might make sense to have a smaller or larger monthly payment — especially if your income has changed. A smaller monthly payment will increase your available funds, while a larger monthly payment will speed up your mortgage payoff. Either way, refinancing should help in meeting your financial goals.
Next you should look for a rate reduction. The general rule of thumb is that if your closing expenses can be recovered in 30 months or if the interest rates are 1 percent lower than your current rate, home loan refinance – online or off – makes sense.
You should also look for ways to reduce the term of your loan. If you are 5 years into a 30 year mortgage and you can get into a 15 year mortgage for about the same monthly payment, you shave 10 years off your loan and save tens of thousands of dollars in interest rates.
By doing a home loan refinance online calculation, you will also be able to determine whether you can switch from an adjustable rate to a fixed rate mortgage. Another option is to change the terms of your adjustable rate mortgage to make it more attractive.
The final refinancing solution that you want to be looking at is whether you can get money out of your home. Perhaps you want to send your kids to college, make repairs and upgrades to your home, or just take a dream vacation. By doing a home loan refinance online calculation, you can see whether these options are viable for you.
It can make a lot of sense to refinance when the interest rates drop — if you are going to be staying in your home for long enough to recoup the closing costs. Also, if you can increase or decrease the loan term to meet your current financial goals, refinancing can be a good idea.
You will need to provide many of the same documents you supplied for your first closing. A new credit check, survey, title search and insurance, an appraisal and an inspection are usually required. You may want to check your files for the original documents and begin collecting updated information on these necessary items. Depending on the mortgage loan you select, there may be charges for loan origination fees and points.
You can pay your closing costs in cash at the time of closing, roll the costs into your new loan amount, or add a premium to your interest rates.
Additionally, you should know that if you pay more points, you can sometimes lower the interest rates.
All of these factors can be calculated when you do a home loan refinance online.
Expresspath Financing A Solution For REO Sales
Expresspath financing is available only on Fannie Mae REO properties. This is a special type of financing that can make getting into the home of your dreams a reality as there is a very low down payment of $500, low interest rates, waived mortgage insurance, and 15 or 30 year terms. Consider going with expresspath financing if you want a REO property.
REO stands for “real estate owned” and it means that it is a property that the bank has foreclosed on. Generally, you will get a better deal on a REO property than you would if it were available from an initial homeowner. This is because the lender is not in the business of owning or managing properties. Therefore, they have an incentive to get the homes off of their books. Expresspath financing was developed specifically to get homes off Fannie Mae’s books.
ExpressPath financing uses a low down payment fee (also known as LDPF), which means the mortgage insurance is not built into the rate. Buyers are able to compare rates from other lenders more easily with LDPF. There is a “MIsubstitute”, which is comparable to traditional mortgage insurance that a buyer would pay.
For owner occupied single family homes, 100 percent of the loan can be financed through expresspath. However, the new homeowner is expected to make a token $500 down payment. The $500 may be used for closing costs.
A property must be “owner occupied ready” to qualify for expresspath financing. That means that no significant repairs must be made in order for the home to be habitable. The NPDC makes the final determination on whether a home is owner occupied ready. The NPDC is authorized to make repairs themselves to make a home owner occupied ready.
You will get a low down payment loan with an interest rate between 0 and 3 percent. Additionally, you can get up to 5 percent back as a seller concession. Expresspath financing is available in 15 and 30 year loan periods.
Investors who can put down 10 percent of the loan are eligible for all of the benefits of Expresspath financing. Investors may receive appraisal waivers, reduced documentation, and all of the PHH Mortgage Guarantees
Additionally, manufactured homes are eligible for expresspath financing if they are coded correctly. The maximum loan to value on a manufactured home is 95 percent. Unlike traditional properties, manufactured homes must be owner occupied to qualify for expresspath financing.
One of the benefits of expresspath financing is that the appraisal is done before the home goes to market. When the buyer goes for financing, approval can be quickly granted based on your own credit and income information and is not dependent on the home’s performance.
Expresspath financing is a quicker way to get into your new home and you can often get a better rate by using the system. When you apply, you get a loan decision (not just pre-qualification) in 30 minutes or less.
If you are looking to buy a new home in today’s market, give expresspath financing a second look.
