WORD: Fair Debt Collection Practices Act

And the WORD for Today is:

Fair Debt Collection Practices Act—enforced by the Federal Trade Commission and is another strong consumer protection measure designed to prohibit abusive practices. Such practices might include overcharging, harassment with repeated calls or calls at inconvenient times. It is also a violation of the Fair Debt Collection Act to disclose any information related to your debt to a third party. A third party would include your mother, your spouse, your employer, your roommate, anyone who is NOT YOU. It would be appropriate for you to make a complaint to the Federal Trade Commission against that creditor if they were to violate your consumer rights in this way. The Act prohibits certain specific abusive communications including:

a. At unusual times (before 8am or after 9:00pm)

b. Repeated phone calls or excessive manner

c. At any place which is inconvenient for the consumer

d. At work if the employer does not allow personal calls

e. Directly to the borrower if they have already notified the creditor that they have an attorney.

f. By postcard or any other method which allows for the display of information about the debt to appear on the outside of the envelope.

g. After the borrower has made it clear they do not intend to pay the debt.

For additional information on the Federal Trade Commission, log onto: 

http://www.ftc.gov/index.shtml. 

Additional acts prohibited include:

a. Communicating with anyone other than the borrower except to secure location information

b. Misrepresenting the amount of the debt

c. Misrepresenting the legal status of the debt

d. Misrepresenting what actions the lender may or may not take as a consequence of the unpaid debt

e. Telling the consumer that their failure to pay the debt is a crime (it is NOT)

f. Threatening action which will not or cannot be taken legally against the borrower

g. Threatening to harm the borrower physically

h. Using language which is vulgar or abusive.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Security Agreement

And the WORD for Today is:

Security Agreement—a commonly used “catch-all” term which is used to describe a variety of debtor-creditor relationships. In order to be legally enforceable there must be a written agreement between the party who borrowed money (or contracted for services) and the creditor who loaned money or performed the services. These agreements are then documented in a number of different ways such as a chattel mortgage, a trust receipt, an inventory lien or other security agreement.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

PS—Happy Easter!!

WORD: Right of Rescission

And the WORD for Today is:

Right of Rescission – a borrower has the right to decide they do not wish to proceed with the utilization of services from a particular entity which is known as the right to rescind or “change my mind.” They may change their mind about using a particular service provider altogether or decide to decline specific services being offered. There are rules associated with this right which usually include:

1. How much time is allowed to rescind;
   
   
2. What documentation is required to rescind;
   
   
3. To whom must you provide such documentation;
   
   
4. What address must be used in order to consider the rescission delivered;
   
   
5. Other pertinent information.

All of these specifics should be included in the disclosure which requires the borrower(s) signature acknowledging the information was provided and understood.

A provision in the federal Truth in Lending Act that allows borrowers to cancel certain kinds of loans within three (3) days of signing:

TILA establishes a right of rescission for any loan transaction in which the borrower’s principal dwelling is used as security. See 15 U.S.C. § 1635(a). The rescission period extends until “midnight of the third business day following consummation [of the loan], delivery of the notice [of the right to rescind], or delivery of all material disclosures, whichever occurs last.” 12 C.F.R. § 226.23(a)(3). Under TILA regulations, a creditor is required to “deliver two copies of the notice of the right to rescind to each consumer entitled to rescind.” 12 C.F.R. § 226.23(b)(1). This notice “shall be on a separate document that identifies the transaction” and shall “clearly and conspicuously” disclose the consumer’s right to rescind the transaction. Id. If the required notice or material disclosures are not delivered, the right to rescind shall expire three years after consummation. See 12 C.F.R. § 226.23(a)(3).

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Mortgage

And the WORDS for Today are:

Mortgagor-is the owner of real property who grants a mortgage to a lender in exchange for the money to purchase the property. The mortgagor pledges to repay the loan under specific terms and conditions and are subject to foreclosure if they fail to do so.

Mortgagee-Is the lender in a mortgage agreement.

Usually refers to the party who lends money and receives a mortgage. In some states the lender is treated as the “legal owner” (deed of trust) and may be entitled to rents from the property if it is abandoned by the homeowner. Other states treat the mortgagee as a “secured creditor” with the mortgagor considered to be the owner.

Adjustable Rate Mortgage (ARM)-is a mortgage loan, which gives the lender the right to adjust it interest rate at regularly scheduled intervals on the basis of changes in a specified index. The borrower mortgage must state how often the rate can change as well as set a cap for how high the rate may be increased. You should avoid an adjustable rate mortgage unless you feel certain your income is going to increase sufficiently to allow you to make higher mortgage payments at a later date.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Garnishment/Wage Garnishment

And the WORD for Today is:

Garnishment – means that a creditor has received permission through legal court action to seize property (most often income or wages) which is being held by a third party. The third party must honor official garnishment requests when they are accompanied by a bona fide court order.

Wage Garnishment – refers to the legal process of taking the wages of someone who owes an obligation to satisfy that debt.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Late Charge

And the WORDS for Today:

Late Charge—is a penalty (fee) charged to a borrower who failed to make an installment payment on time. For mortgage payments, late charges usually are incurred if the creditor has not received the scheduled payment by the 15th of the month. Prior to that date the borrower is in what is commonly called a “grace period.” Late charges are usually allowed to be included on your tax return as interest for tax deduction purposes. The amount of the late fee will typically be stipulated in the contract itself or set by state statue. In all cases it must be considered “reasonable” and not violate state usury laws.

Late Charge Assessment—a fee charged to a borrower’s account when a payment is not received by the due date. This fee is typically charged when a payment is not received by the 15th of the month.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Chapter 13 Bankruptcy

The WORD for today is:

Chapter 13 Bankruptcy—type of bankruptcy which results in a court order budget in order to help a consumer get on sound financial footing. The advantage to the consumer might include relief from late charges, past due fees or other add-on fees. Additionally, since payments are made through the court the consumer no longer has to deal with unpleasantness from the creditor. This court-ordered budget typically extends for a 3 year term.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Right of Rescission

And the WORD for Today Is...

Right of Rescission – a borrower has the right to decide they do not wish to proceed with the utilization of services from a particular entity which is known as the right to rescind or “change my mind.” They may change their mind about using a particular service provider altogether or decide to decline specific services being offered. There are rules associated with this right which usually include:

A. How much time is allowed to rescind;

B. What documentation is required to rescind;

C. To whom must you provide such documentation;

D. What address must be used in order to consider the rescission delivered;

E. Other pertinent information.

All of these specifics should be included in the disclosure which requires the borrower(s) signature acknowledging the information was provided and understood.

A provision in the federal Truth in Lending Act that allows borrowers to cancel certain kinds of loans within three (3) days of signing:

TILA establishes a right of rescission for any loan transaction in which the borrower’s principal dwelling is used as security. See 15 U.S.C. § 1635(a). The rescission period extends until “midnight of the third business day following consummation [of the loan], delivery of the notice [of the right to rescind], or delivery of all material disclosures, whichever occurs last.” 12 C.F.R. § 226.23(a)(3). Under TILA regulations, a creditor is required to “deliver two copies of the notice of the right to rescind to each consumer entitled to rescind.” 12 C.F.R. § 226.23(b)(1). This notice “shall be on a separate document that identifies the transaction” and shall “clearly and conspicuously” disclose the consumer’s right to rescind the transaction. Id. If the required notice or material disclosures are not delivered, the right to rescind shall expire three years after consummation. See 12 C.F.R. § 226.23(a)(3).

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Accord and Satisfaction

And the WORD for Today Is...

Accord and Satisfaction – refers to the legal term which applies when you clearly indicate that the payment you are making represents the full and final payment to resolve a disputed debt. If the creditor accepts the payment, the law treats that payment as the final payment.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Accord

And the WORD for Today Is...

Accord – in real estate refers to an agreement by which one accepts something different (usually less) than what is owed on the debt as full satisfaction. It is critical that the borrower get some written documentation, prior to payment of funds, that the agreed upon amount will be considered payment in full. A borrower may negotiate for such a settlement when there is a dispute about the amount which is actually owed or the creditor agrees to accept a lower amount due to decreased likelihood they can collect the full amount. This type of agreement is called “accord and satisfaction”.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Mandatory Arbitration

And the WORD for Today is...

Mandatory Arbitration – a clause almost always included in loan documents which consumers do not understand and is almost never in their best interest. When included in a contract it means the parties will settle any legal disagreements through the use of a hearing before an arbitrator. Simply stated, you give up the right to file legal action in a court of law. Worse still, if the arbitration must be in the state which the creditor has selected it may be costly for a consumer to even attend so they lose by virtue of default.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased atwww.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)