MyCRA Specialist Credit Repair Lawyers

Tag: credit defaults

  • More people losing their homes due to mortgage stress

    mortgage stressStatistics are pointing to an increase in distressed sales in some areas of Australia. We look at what’s happening in the property market. We also cover what you can do if you find yourself in hot water with your mortgage so you can prevent credit defaults, and especially – losing your home to the bank or to liquidators.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repair and www.fixmybadcredit.com.au.

    An alarming article showed up in Australian Broker yesterday, ‘Fresh data shows shocking number of distressed sales.’ The article revealed that nearly a quarter of all properties advertised in Australia are distressed sales. The upsetting figures were released by valuation group LandMark White. Here’s the rest of that article in full:

    The research shows Queensland accounted for a massive 54% of properties advertised by a mortgagee, receiver or liquidator during the March quarter – and the Gold Coast recorded the highest number of distressed property advertisements in the country, with 74% of its listings made by a mortgagee, receiver or liquidator in the three months to March 31 – despite recent claims the region’s housing market is back on its feet.

     Nationally, most receiver sales were in regional areas, with residential property falling just ahead of the agricultural sector.

     LandMark White found almost 23% of properties advertised in Australia during the quarter were listed by a mortgagee, receiver or liquidator.

     Of those, 19% were in the residential sector, 16% in industrial and 15%  in retail.

     Nearly 10% were in New South Wales and 15% in Victoria.

     NSW saw the most positive change, as only 7% of all properties advertised in that state were listed by a receiver or mortgagee – a record low. By comparison, the proportion in the same quarter of 2012 was 31%, according to a News Ltd report.

     Although the distressed ratio in Queensland dropped by 6%, it remains high at 39% of all property advertisements in the state. Victoria saw the smallest improvement in the distressed ratio, with a drop from 20% to 19%, which meant that for the first time in the series, Victoria had a higher ratio than NSW.

    What can I do if I am experiencing mortgage stress?

    It depends on how deep the ‘do do’ is that you’re in as to what your plan of attack will be.

    If you’re just struggling to make ends meet, but you are managing to keep up with payments (just) – then you might start looking around for a cheaper interest rate to give you a bit of savings. You could check with your bank or research other banks (but don’t make any credit applications until you’re sure) to see if you can find an interest rate that will reduce your repayments.

    Sydney Morning Herald story Tell them to cut you a break, gives great advice on making the most of bank competition to grab a cheaper interest rate:

    If your loan is with a big bank and you’re paying the advertised interest rate, you’re being ripped off. It used to be that customers who knew to ask could secure 70 basis points off that rate, but in recent competitive times, that discount has leapt to as much as 100 basis points.

     You won’t be able to get any reduction from one of the new breed of online lenders; it’s their cut-price rates that are forcing discounting elsewhere. But banks, and even some building societies and credit unions, will have wiggle room. The beauty of this information is that you could use it to make an instant saving with your lender, sparing you from having to remortgage.

    If your struggle is more serious, and you really are having trouble finding money to make repayments each month, then it’s time to tell your bank. You need to do this before you default on your home loan, to ensure you are not penalised by a default listing on your credit rating. Despite this, if you are consistently late with your mortgage payments, this will show on your credit record from next year – so it is best to make paying your mortgage or any other bank-related credit an absolute priority to avoid that late repayment history from holding you back in the future if you get back on your feet.

    How do I apply for a revised repayment schedule with my bank to avoid a default?

    Firstly, you need to make it clear to your bank that you fear if you aren’t able to restructure your home loan repayments that you may fall into arrears. If you have a situation of temporary difficulty, such as unemployment, illness, injury or other reasonable issue which would mean making repayments will be difficult, this is essential to do. You will be requesting a financial hardship variation to your repayments. This may mean your repayments are reduced accordingly and the lender may take action to stop a potential default on your credit file.

    Tips for Applying for financial hardship

    – Work out what you can afford to pay prior to requesting a hardship variation. This would involve taking the bull by the horns and doing up a serious budget on what’s coming in and what your repayments are on all of your credit accounts. Could burying your head in the sand be the main reason why you find yourself in this situation in the first place? If so, it would be a great idea to seek professional help in managing your budget for your entire future. The best place to start looking for some help would be ASIC’s MoneySmart Website. If you feel like you’ll struggle across a number of credit areas in the short term – consider requesting a reduced payment for other credit accounts as well.

    – Put your request in writing and keep a copy as a record.

    – You may need to use the actual words “hardship variation” for your lender to officially recognise the request, and to avoid confusion as to what you’re asking for.

    – Check your loan agreement as to the terms you entered into around financial hardship. Those agreements post-1 July 2010 have a clause which requires the lender to respond to you within 21 days.

    – Creditors are legally required to consider a person’s request for variation on payment arrangements, but are not obliged to agree to any hardship variation proposal put forward. If a lender either refuses or fails to respond to your hardship request, you can lodge a complaint with their independent dispute resolution scheme, such as the Ombudsman they are a member of.

    – Research how to apply for financial hardship. You can do this through ASIC’s MoneySmart Website, or through sites like Money Help, a website run by the Victorian State Government.

    Is it time to sell the house?

    If your financial situation is not going away any time soon – it may be time to look at downsizing your home or even renting for a while. “Gasp, shock, horror…weren’t you trying to save my home?” you say.

    But having the power to sell your home at the best price in the current market is what you’re really trying to save. So it might pay to think seriously and clearly about whether you are going to be able to carry the loan long term.

    If you end up at the mercy of any distressed sale, you may find the banks are only interested in getting back what they are owed on the property – and through lost time, or different sales tactics, you could find you sell for a lot less than you might if you had control of the sale yourself. So as hard as it might be, you could save your credit file, and save your family thousands by letting go now.

    The above information is intended for general purposes, and should not replace getting considered and careful advice based on your individual circumstances. We recommend you seek financial counselling and or legal advice before making this type of financial decision.   

    For help with recovering your credit rating following a period of financial hardship, or help with disputing credit listings which are holding you back from obtaining credit, contact a Credit Repair Advisor at MyCRA on 1300 667 218 to talk about your situation.

    Image: artur84/ www.FreeDigitalPhotos.net

     

  • What’s happened to Gen Y – our emerging first home buyers

    The future of our housing market, rests with Gen Y. Have we prepared them enough? We look at the particular crisis they face with housing finance, and credit defaults what the ramifications could be for their future and ours.

    couple outside houseBy MyCRA Credit Rating Repair and www.fixmybadcredit.com.au https://www.facebook.com/FixMyBadCredit.com.au.

    The older portion of Gen Y are in their mid to late 20’s. This age is the time when many previous generations have claimed their rite of passage by entering the Australian dream of owning their own property. But that was in the good old days of affordability.

    According to the Courier Mail in January, housing affordability seems to be eluding us. In 1981, the typical home sold for $48,000 just a little over three times the median household income of $15,000. But what do you do when wage rises have not matched property price rises? Today, the median home will set you back $408,000 about six-and-a-half times the median household income of $61,000.

    Property owners may say the market is low, but in reality despite a market slump, prices are still exorbitantly high for our first home buyers. Saving enough for a home can take years, and may require sacrificing the rental accommodation in preference for moving in with Mum and Dad just to scrape funds together. All of this effort may be lost, or not even attempted if you have poor credit history.

    The volume of credit available to young people pre-GFC was huge, and for people developing habits around credit, in hindsight it was extremely irresponsible to be throwing money at 18 -20 year olds and expecting them to know how to be responsible with credit.

    So many Gen Yers don’t have any clue why their history with credit matters, or how to commit to spending reduction and consistent habits of repayment because they have a history of getting what they want when they want it, and worrying about it later. Unfortunately the ‘later’ is now.

    We’re sorry Gen Y. Previous generations before you have failed to pass on the skills necessary to give you the right habits of mind to keep you out of trouble and allow you to accomplish the big goals. Goals like property, education, business or starting a family.

    This has been confirmed in two ways. Credit reporting agency Veda Advantage recently released some of their data from the last three years, which showed that Gen Y holds 60% share of all credit defaults. From telco defaults through to loan defaults – Gen Y tops the list in every category. Which invariably is a deal-breaker when applying for a mainstream home loan for the 5 year term of the listing. (See our release to the media today for more information).

    This may explain our latest first home buyer figures. The Australian Bureau of Statistics revealed two days ago that first home buyer numbers have fallen again, almost a whole percentage point from November 2012 to December 2012. (15.8% Nov 2012 down to 14.9% in December 2012).

    What Veda doesn’t tell us from their data, is how many people have defaults in this country. That we have to speculate on. Veda holds the credit files of approximately 16.5 million Australians. How many of those people have bad credit? Last year Fitch Ratings revealed mortgage delinquencies alone (mortgages over 90 days in arrears) were 1.6 % of all mortgages in the first quarter of 2012. So when we look at the number of defaults across the board, taking into account the more common defaults from telcos, energy providers and credit cards – we could increase that figure, to say 5%? If we assume that figure is correct, then 825,000 Australians have defaults on their credit file. If we apply the 60% rule, then 495,000 Gen Yers have defaults on their credit file. Pure speculation, but one that bears thinking about when we look at why interest rate cuts have yet to make a significant impact amongst first home buyers.

    finance educationWhat can we do to prevent young people from finding themselves in arrears and with credit defaults?

    Paramount to prevention, is education. Education about the wider, philosophical issues of finances so they understand where credit fits in to society and to their own lives, as well as the ins and outs of taking on credit in Australia.

    This should begin in schools, and be upheld in the credit arena, by government and the media.

    Second to that, is education and insistence on credit reporting accuracy. With defaults almost ‘a dime a dozen’ in this age group, could consumers get blaze about the process the Creditor took in listing the default? Could accuracy take a back seat and defaults pile up on Australian credit reports without an understanding of what constitutes a lawful listing? Every Australian needs to know that mistakes can happen on credit reports.

    Likewise, bad credit can be listed on credit files unknowingly. We have a responsibility to check our credit report, as the onus on ensuring accuracy rests with the consumer. This can be done for free – but many Australians don’t know this.

    They probably also don’t know that a credit listing should be tested against the appropriate legislation for its validity and its accuracy. The process of dispute is not easy, but Creditors should be called to account for any inaccuracy. Australians should also know Creditors have a legal obligation to remove a listing which was placed incorrectly.

    Changes for the better are coming in Australian credit reporting particularly around correction of credit reporting mistakes, but education is key for every credit active individual to make best use of these changes, aware of the action they need to take to ensure their rights are upheld.

    As the emerging generation into the housing market, Gen Y is at the forefront of this shift in psyche. Let’s hope they embrace it, and insist on changes that will benefit their generation into the future.

    Find more information on getting help with checking and disputing the accuracy of a credit listing, at www.mycra.com.au.

    Image 2: KROMKRATHOG/ www.FreeDigitalPhotos.net

  • Could a spike in credit defaults from Gen Y be part of the housing crisis?

    gen yPress Release

    Could a spike in credit defaults from Gen Y be part of the housing crisis?

    13 March 2013

    More of Australia’s new generation of first home buyers are living with credit defaults and a consumer advocate for accurate credit reporting says this could be a contributing factor in Australia’s dim first home buyer figures – with Gen Y facing credit lockdown in increasing numbers.

    According to a recent report from credit reporting agency Veda Advantage, the number of credit defaults amongst Gen Y has grown 5.3% over the past three years to 60% of the share of all credit defaults.

    Veda says Gen Y has the lion’s share of defaults across all account types – telecommunications, credit cards, utilities and personal loans. The biggest pain is telco bills – with Gen Y responsible for 62% of these kinds of defaults, compared to Baby Boomers (13%) and Gen X (22%).[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][i]

    Figures released yesterday by the Australian Bureau of Statistics confirm first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 14.9% in December 2012 from 15.8% in November 2012.[ii]

    CEO of MyCRA Credit Rating Repair, Graham Doessel says goals for owning property may be far out of Gen Y’s grasp.

    “The older portion of Gen Y should be collectively entering the property market, but it seems more are suffering with 5 years of credit defaults and unable to even get a mobile phone plan let alone a home loan,” he says.

    Mr Doessel says education and advocacy is the key to helping Gen Y out of the credit crunch as he says they are only a product of the credit environment they were born into.

    “There is a real lack of education around credit issues and credit reporting and this has been a problem for some time. Many Gen Ys had credit thrown at them in their younger years pre -GFC and now they are feeling the ramifications of credit overload.”

    “On the back of this, has been a noted lack of consistency in credit reporting and this has led to a number of inaccurate and unfair credit defaults placed on consumer credit reports. It is high time that consumers and their advocates insist on accurate credit reporting if we are going to have any chance of moving the housing industry forward,” he says.

    Find more information on credit issues and credit defaults on MyCRA’s website www.mycra.com.au.

    /ENDS.

    Please contact:

    Lisa Brewster – Media Relations media@mycra.com.au

    Ph 07 3124 7133 www.mycra.com.au www.mycra.com.au/blog

    MyCRA Credit Repair 246 Stafford Rd, STAFFORD Qld

    MyCRA is Australia’s number one in credit rating repairs. We permanently remove defaults from credit files. CEO of MyCRA Graham Doessel is a frequent consumer spokesperson for credit reporting issues and is a founding member of the Credit Repair Industry Association of Australasia.

     

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    [i] http://www.veda.com.au/news-and-media/article.dot?id=542009

    [ii] http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5609.0Main%20Features2Dec%202012?opendocument&tabname=Summary&prodno=5609.0&issue=Dec%202012&num=&view=

    Image: photostock/www.FreeDigitalPhotos.net[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

  • Fixing up Your Finances

    repairing financial damageIn our Make Credit Work For You spot this week, we look at how to dig yourself out of financial strife. ‘Repairing Financial Damage’ was written by Fran Sidoti over at Savingsguide.com.au. We hope it helps if you are experiencing some financial difficulties.

    MyCRA Credit Rating Repair  www.fixmybadcredit.com.au. https://www.facebook.com/FixMyBadCredit.com.au

    Repairing Financial Damage

    No matter how good we are with money, life can tend to get in the way of our best intentions sometimes. Whether you’ve had to dip into savings or accrued some debt on your credit card, it’s very easy to get in a spot of financial bother. If you want to dig yourself out- and pronto- here are some things you can try.  

    Set Financial Goals  

    Probably you already have some. But it’s worthwhile revisiting them, to reconfigure what you want from your finances and how you intend on getting there. Are your financial goals the same as they were 6 months ago? Has your financial situation altered, without you changing your financial set-up? Write out your short, medium and long-term goals, it doesn’t even matter how far-fetched they are. Writing out our goals is the one area in life where we can be as unrestricted as we please.  

    The Road Map  

    Now, how do you intend on achieving those goals? Was your budget a bit too stringent, or perhaps a bit too lax? Is your financial situation sustainable? If you feel as if your set-up isn’t tenable, then what needs to change? Perhaps your expenditure is too high or you need to consider other income sources to get you where you want to be in 5 and ten years time.  

    Financial Fix Up  

    Probably your short-term goals are now a bit different considering you’ve got a couple of things to fix up. If you’re looking to restore depleted savings or pay off a bit extra on your credit card, analyse what you can change in the short-term to clear yourself as quickly as possible. What expenses can you cut down on? It’s amazing to think that organising your food for the week- for example- could be enough to pay an extra $100 into your savings or credit card, and get you well on the way to recovery. If your expenses are already as tight as they can be, look at ways to earn some extra income for the short-term. You could check out freelance work, or write some blogs online. Maybe a couple of weekends helping out your mates would do the trick.  

    Structured Repayment  

    If that isn’t going to fix the issue quickly enough, or if you’re paying high interest, think about consolidating your debt into a loan and having a structured repayment plan, It could give you the consistency you need to organise your budget and will almost certainly allow you to do at a lower interest.  

    Stay Positive  

    The worst thing to do would be to beat yourself up about it. Like all things, having rock solid finances is an ongoing process and no one has it perfect all the time. Things happen, and feeling negatively about the situation is only making your life harder unnecessarily. Negativity will also make it harder to approach the situation and make it all the more tempting to stick your head in the sand. Better to reflect on the positive changes you’ve made to your finances, and how you are now completely equipped to deal with the setback. We get better at salvaging a challenge every time and although we’d all like to never have one, the chances of smooth sailing all the time are slim. So get back on the horse and you’ll be right back on top sooner than you think.

    If your credit file has met with some setbacks during the process, then you will want to reflect on what to do for your future. It really depends on where you want to be over the next five years. Your credit file will show up with any credit defaults for the next 5 years, and any late payments for the next 2 years. If you have a major financial goal you want to achieve over the next 5 years, such as buying a property, or a business venture, then you’ll need a good credit rating to borrow. You may be prevented from accessing mainstream credit (at affordable interest rates) if you have bad credit.   All may not be lost though. Depending on the circumstances surrounding your default you may be eligible for credit repair. To check this out, you can contact us on 1300 667 218.

    For more information on credit repair and how we might be able to help clear your credit file permanently, visit our website www.mycra.com.au.

    Image: David Castillo/ www.FreeDigitalPhotos.net

  • Fraudsters pinch Australian Crime Commission logo to scam consumers

    Don’t be fooled with unsolicited emails, no matter how ‘official’ they look. The Australian Crime Commission (ACC) announced last week it has been made aware of a number of scams using the ACC name and logo to lure consumers into paying thousands of dollars into fraudulent bank accounts. We describe the details of this scam, and look at what you could be giving away that could lead to bad credit history.

    By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

    The ACC was last week alerted to a fraudulent email pretending to be from ACC Chief Executive Officer John Lawler, which asks the consumer to pay $900 into a Nigerian bank account in order to receive US$5 million.

    The email is sent from a non ACC email address. The ACC says all legitimate ACC emails contain @crimecommission.gov.au.

    They say the ACC will never request money from individuals in this way.

    Identifying characteristics of these emails may include:

    • Reference to the Department of Homeland Security
    • Reference to the Chief Executive Office of the Australian Crime Commission
    • Reference to Nigerian based banks
    • Requests for recipients to send amounts of money,” the ACC media release explains.

    This comes hot on the heels of another scam using the ACC name to rip off Australians.

    In late September the ACC became aware of a scam that falsely used the ACC, Australian Federal Police (AFP) and Australian Security Intelligence Organisation (ASIO) logo in an attempt to lure consumers into paying large sums of money for fake criminal background checks.

    The fraudulent criminal background checks were being initiated by criminals using dating websites.

    The ACC says the scams highlight the prevalence and scope of frauds being initiated by criminals operating in the cyber environment.

    Criminals are prepared to go to great lengths to pilfer the money or personal details of their victims. To target Australian victims, the average cyber-criminal or scammer needs to be pretty savvy. Most Australians are aware of the obvious scams (although they still do catch out some), but elaborate ones such as the recent investment super scam has meant many well-educated and intelligent people become victims.

    It’s do with the logos, the proof, the fake websites, and the fake statistics. You just don’t assume that people would go to those lengths to steal your money –right? Wrong! The more elaborate the scam, the more likely it will catch out those with serious money. If the prototype works – fraudsters can use it again and again to catch out thousands before they are shut down.

    The other danger with receiving unsolicited emails, is that you can unknowingly download a virus by clicking on a link or attachment. This virus can cause your computer to be part of a botnet, or it can use keyloggers to record your keystrokes and take your passwords and usernames for important sites you use online. So even if you don’t fall for the scam, you can still fall victim to scammers.

    Scams can bring profits in a myriad of ways. Fraudsters can swipe small amounts over a widespread group – or they can concentrate on draining the bank accounts of a few. What they can also do, is misuse or even on-sell the personal details of the victim for purposes of constructing a fake identity to steal credit.

    If successful, crooks can access credit cards, goods or even larger items like houses and cars. This leaves the victim in debt, and it will also leave the victim with a series of credit defaults attached to their name. It is just debilitating for the victim, who then has to go and try to prove to creditors they didn’t initiate the credit in order to clear the bad credit history.

    To prevent this from happening to you, we have compiled a quick list of some ways you can prevent becoming a scam or identity theft victim:

    1. Keep virus software up to date on your computers. Install automatic updates and perform regular virus scans.
    2. Be careful with unsolicited emails. Check the email address before you click on links and attachments.
    3. Keep your privacy settings secure on all social networking sites.
    4. Keep your passwords and PIN numbers secure. Don’t carry PIN numbers with your credit/debit cards, change passwords regularly and use a variety of passwords for different purposes.
    5. Check all your credit card and bank statements each time they come in.
    6. Cross-shred all personally identifiable information which you no longer need, rather than throwing it straight in the bin.
    7. Buy a safe for your personal information at home.
    8. Do not give any personal information or credit card details to anyone via phone, online or email unless you are sure the site is secure, and or you can verify the company details.
    9. Be aware of who gets your personal information and for what purposes. What can these people do with the information they are gathering? For instance, is it really necessary for the site you are registering on to have your date of birth?
    10. Keep up to date with the latest scams by subscribing to the government’s ‘SCAM watch’ website.
    11. Check your credit file for free every 12 months. By requesting a copy of your credit file from one or more of the major credit reporting agencies, Veda Advantage, Dun & Bradstreet and Tasmanian Collection Service (TASCOL) you can be aware of any discrepancies which may need to investigated. Often it is only through a credit check which comes back with defaults on your credit file that  you may realise you have been a victim of identity theft.
    12. Report any incident of identity theft, no matter how small, or even if you have been reimbursed for the damage – to the Police. The more of us that report identity theft, the more effective will be our Government and Police response to it.

    For further information, visit these helpful links:

    ACCC’S SCAMwatch www.scamwatch.com.au for help with how to spot a scam and how to keep personal details safe.

    To report a scam, telephone them on 1300 795 995

    Stay Smart Online www.staysmartonline.gov.au for help with how to secure your computer, and how to keep abreast of cyber-related crime.

    MyCRA Credit Rating Repairs www.mycra.com.au for help with recovering your credit file following credit defaults from identity theft. Call 1300 667 218 to speak with a Credit Repair Advisor.

    Image: fotographic1980/ www.FreeDigitalPhotos.net