How can you verify whether or not a debt collector is legitimate? Below are a few warning signs that signal a debt collection scam:
- The debt collector threatens you. Legitimate debt collectors probably won’t claim that they will have you arrested or claim that they or their employee are law enforcement officers.
- The debt collector refuses to give you information about your debt or trying to collect a debt you do not recognize.
- The debt collector refuses to give a mailing address or phone number.
- The debt collector asks you for sensitive personal financial information.
Tell the caller that you refuse to discuss any debt until you get a written “validation notice.” This notice must include the amount of the debt, the name of the creditor, and a description of certain rights under the federal Fair Debt Collection Practices Act.
For additional information and to learn more on debt collection practices, click here.
- Ask students to draft a sample complaint letter explaining that the debt is not legitimate and demanding the debt collector stop contacting you.
- Ask students to compile a list of governmental and nongovernmental agencies where consumers can send debt collection complaints.
- Do all states require debt collectors to be licensed?
- If the debt collector is licensed in your state and he/she is not acting properly, what are your remedies?
- Who enforces the Fair Debt Collection Practices Act and how this law protects consumers?
Reverse mortgages are a special type of loan that allows homeowners, 62 and older, to borrow against the accrued equity in their homes. Reverse mortgages can help some older homeowners meet financial needs, but they can jeopardize retirement security if not used carefully.
In February 2015, the Consumer Financial Protection Bureau (CFPB) released a report that some homeowners have experienced problems with reverse mortgages. The most common reverse mortgage complaint is about difficulty with changing the loan terms and problems communicating with loan servicers. Some consumers, for example, express frustration about slow, inconsistent communication from their reverse mortgage loan servicer.
If you are having a problem with your reverse mortgage or having problems getting through to your mortgage servicer, you can submit a complaint to CFPB online or by calling (855) 411-2372 or TTY/TDD (855) 729-2372. The CFPB will forward your complaint to the company and work to get you a response within 15 days.
For additional information, click here.
- How can a person access funds from a reverse mortgage?
- Ask students what other alternatives might be available before settling for a reverse mortgage?
- What is the purpose of a reverse mortgage?
- Can people with very low equity in their home qualify for a reverse mortgage?
- How can people protect themselves from dishonest reverse mortgage providers that charge exorbitant fees?
Cheap mortgage rates are a bonanza for home buyers.
Currently, home mortgage rates are trending lower which is good news for home buyers. According to a recent Freddie Mac survey, the 30-year fixed rate is 4.28 percent. The 15-year fixed rate is 3.32 percent.
So how important is a lower home mortgage rate for a home buyer?
- At a rate of 6 percent, the monthly mortgage payment for a $200,000 thirty-year mortgage is $1,000 a month ($200,000 x 6% ÷ 12 = $1,000).
- If the rate drops to 4.28 percent, the monthly payment drops to $713 a month ($200,000 x 4.28% ÷ 12 = $713).
- That’s a difference of $287 each and every month.
- Assuming the home buyer makes monthly payments for the entire 30-year period, that’s a savings of $103,320 ($287 x 12 x 30 = $103,320).
For additional information about mortgage rates and the factors that cause rates to increase or decrease go to http://money.cnn.com/2014/03/06/real_estate/mortgage-rates/index.html.
1. What are the common mistakes people make when they finance a home?
2. Why would you consider a 15-year mortgage instead of a 30-year mortgage?
3. Why would you consider a 30-year mortgage instead of a 15-year mortgage?
You may want to use the information in this blog post and the original article to discuss
- Why a home buyer should compare mortgage rates when financing a home purchase.
- The advantages and disadvantages of a 30-year and a 15-year home mortgage.