There may well be pockets of the country where housing prices have become overheated - California, Florida, Washington DC come to mind. However, in Georgia, we have seen about a 6 percent increase over the past year. 14 percent over the past 3 years. This would hardly qualify as a housing bubble.

Yet, we continue to hear clients who are going to wait for the housing bubble to end before they make their home purchase. For those who have been waiting for this since 2001, they have missed out on some excellent capital gains. They have also missed the opportunity to enjoy home ownership.

The fact of the matter is this - the national medain house price has not declined in a single year since the Great Depression of the 1930's. There have been very few occasions where we have seen even localized declines. These declines have almost always been accompanied by sharp prolonged job losses. There is nothing on our economic horizon to suggest that this is a problem.

Ms Chu sneaks a little plug in the middle of the article about how a bond rating manager says that the tightening of these exotic mortgages "could have a cooling effect on the housing market".

I'm afraid Mr. Greenspan is mostly to blame for all this negative backlash. Mr. Greensapan does not like these mortgages and he's not afraid to share his opinion. As a result, he has the other Fed Governor's such as Susan Bies jumping on the bandwagon.

Stated income/stated assets: Both income and assets are disclosed but not verified. However, the source of the borrower's income is verified.

No ratio: Income is disclosed and verified but not used in qualifying the borrower. The standard rule that the borrower's housing expense cannot exceed some specified percent of income, is ignored. Assets are disclosed and verified.

No income: Income is not disclosed, but assets are disclosed and verified, and must meet an adequacy standard.

Stated Assets or No asset verification: Assets are disclosed but not verified, income is disclosed, verified and used to qualify the applicant.

No asset: Assets are not disclosed, but income is disclosed, verified and used to qualify the applicant.

On cash out refinances, or HELOCs, it gets tricky. Cash out up to $100k or a HELOC up to $100k is deductible for any purpose EXCEPT if you use the money to purchase tax free municipal bonds. Above $100k, any portion that is used for home improvement is not subject to the 100k rule, but is, of course, still subject to the $1M rule.

Illustrative Example 1: You have $800k total debt on your 1st and 2nd home all of which was incurred at the time of purchase. You get a HELOC against the 1st (or 2nd) for 200k. You use $50k for home improvement. So, interest on the 1st $150k is tax deductible. The other $50k is deductible for the following purposes only:

Rapid rescoring is a service offered through some residential mortgage credit reporting companies. It allows you to fix mistakes on credit reports in days or weeks, instead of months. The credit reporting companies that offer this service have special dedicated access to the major three credit reporting agencies that allows them to make changes to credit reports and recalculate the score within days, instead of the weeks it can take if go through traditional challenges. Most resellers that supply this service also offer help in determining which items may help improve the score.

Rapid rescoring is not designed to be a credit repair program, although some companies that offer this service will make suggestions for actions that can boost the score, such as paying down a credit card that is close to its limit. It is really designed for situations where you need to correct information that is wrong on the consumers’ report. To do this, you’ll need to get documentation of the correction from furnisher reporting the mistake, usually in the form of a letter signed by the furnisher, on its letterhead.

Because it can be very difficult to predict what effect a particular action will have on the credit score, it’s best to use this in conjunction with a service that analyzes the credit score and makes recommendations for improvements. A case in point: I spoke to a loan officer today whose client paid off a credit card, thinking it would boost the score, but it didn’t.

First, you need a copy of your credit reports from all 3 agencies. You can now do this for free (once per year) at http://www.annualcreditreport.com. Review each report that you receive and find your derogatory credit items.

If you have a single late payment with a creditor that you have a long-standing good history with, you should call them first. Your tone with them should be one of remorse. Explain to them that it was a one-time error on your part and that you just slipped up and forgot to pay the bill. Explain that your relationship with them is important and that you have always paid on time and plan to do so in the future. Ask nicely if they will give you a letter which indicates that this late payment was reported in error. If you can get this letter, then you can send it in to the credit bureaus as outlined above and have the late payment forever removed from your report.

If you have legitimate collections on there, it is likely that many of the items are reported twice - first by the company that you owe the debt to and one by the collection agency that they hired to try to recover their debt. The exception to this is a medical collection. By law, the medical facility cannot report the debt, only the collection agency they hire. If this debt in collections is an unsecured debt (basically anything other than an auto, mortgage, boat, etc.) then your chances of negotiating a deal which benefits you and your credit score is excellent. Also, the older the debt is, generally the easier it is to negotiate as the creditor has probably already written it off as uncollectable. Anything they can get at this point is a bonus.

Now, before you get going, you need to understand your goals. With collection agencies, the goal is to get the agency completely removed from your credit report. Having collections on the report is bad even if the account is listed as paid in full. With the original creditor, your goal is to have the debt listed as either of these: "Paid as Agreed" or "Account Closed - Paid as Agreed" Anything other than this will have a negative impact on your credit score.

The thing you have working in your favor is the fact that your creditors make their money by collecting debts, not by ruining your credit. Therefore, if you give them what they want - money, you can often get what you are seeking - a clean credit report. Always talk to your creditors in terms of them getting their money. If you owe more than you can afford to pay them, you can even attempt to strong arm somewhat by saying something along the lines of: "I know you would love to receive the $3,000 I owe you, but it will not help my credit report if you can't change my rating to 'Paid as Agreed'. All I have is $3,000 and I will pay it to other creditors who will agree to change my credit rating in writing."

You should first start with the collection agencies listed on the credit report(s). Call them, reference your account, and begin the negotiation. Again your goal with the collection agency is to get their information completely deleted from your report as well as to get the original creditor account marked as "Paid as agreed." Explain that if they are able to put in writing that both of these things will happen, then you will pay either the entire debt or whatever it is you are trying to negotiate with them. They will likely tell you that they have no control over what the original creditor will do, and this is true to some extent. However, they were hired by the original creditor and they should be able to get in touch with that creditor to obtain the necessary paperwork. When all is said and done, you want to get two letters: one from the collection agency saying they will remove the collection completely from your report and one from the creditor saying that they will mark your account as "Paid as Agreed". Once you have this in writing, you can send in your payment.

Many creditors will tell you that they have agreements with the bureaus that they will not allow a negative listing to be deleted upon settlement. While this is true, the creditor can report your account as having been rated inaccurately. The larger the creditor you are dealing with, the harder it will probably be to get the negative information removed, but in nearly all cases you can get them to work with you with enough persuasion.

Rules for making payments
1. Send payment in the form of a money order obtained from the post office. Sending a personal check or anything from your bank only invites the collector to find out about your personal finances though account numbers, etc.
2. Make a copy of the money order before sending it. Collection agencies keep notoriously bad records and it's your word against them.
3. Send ALL correspondence (including your payment) via certified mail.

Key points to hit:
1. Apply for a secured card RIGHT AWAY. A secured credit card is a Visa or Mastercard which has a savings account attached to it. This savings account is funded by you at the time you apply for the card and the amount of money you put in the account dictates how much credit will be given to you. If you put in $1000, you will have a limit of $1000 on the card. You can find a list of providers here:

http://www.cardweb.com/perl/cardlocator/survey/secured

2. At the same time, apply for a department store credit card. If you are turned down at this time you should not apply again until you have had your secured card for at least 3 months. Each time you apply for a new card it will slightly decrease your credit score. You have to knock the score down a little before you can begin to build it back up.

3. Determine the limit of each card. Spend only 20% of that limit each month, but do this every month and pay it off every month in full.
Example: Card has an limit of $1000. You track your spending until you get to $200. Then stop spending. When the bill comes, send in full payment immediately. Wait 1 week. Then begin spending your $200 again. Do this for each card you have.

4. About 3-4 months after doing this, you should apply for a non-secured credit card. You can go to cardweb.com to find one with a low annual fee. Since you are going to pay it off in full each month, do not worry too much about the interest rate. Once you receive this card, you should use the same 20% strategy outlined above.

With these 3 cards in place for another 3-4 months, you will now have sufficient trade lines and credit history to boost your score into a range which will allow you to secure a mortgage at a very good interest rate. After 6 months, I would suggest going to this website and pulling your credit report.

https://www.annualcreditreport.com
Be sure to order your reports from all 3 agencies. At the time you order the reports, we suggest that you also pay for all 3 of your scores at that time. The scores are around $5 each for a total of $15.

Another quicker option can be found here:
https://www.truecredit.com

The bottom line is that if we use the loan balance reported on your credit report for your new loan balance, you will need to bring a fair amount of money to the closing table. This amount can be as high as 2-3% of your total loan balance.

As a high service company, we like to provide options to our borrowers.
1. We can roll the prepaid and postpaid per diem interest and the escrows into the new loan such that you bring approximately $0 to the closing.
2. We can simply use the mortgage balances as reported on your credit report for your new loan balance, and you can bring certified funds to the closing to take care of the prepaids and escrows.
3. We can roll the interest and escrows into your new loan and also get you up to $2000 cash back at closing. We will get as close to the $2000 as possible, however, because we cannot exceed it by even 1 cent, we try to be somewhat conservative and you may only receive $1500 or so.

Your credit score isn't used to evaluate your financial resources; it is used to measure how much of a risk you are in paying back the loan. It looks at your credit habits, practices, and choices. And it watches how you spend money. If you are a good credit manager, your score will show it.

Most people think that married couples have a combined credit score but they do not. All scores are individual so you can apply for and be evaluated separately from your spouse.

If your credit score is in the low 600s, you may be denied mortgage credit as a matter of practice. A credit score above 700 will usually qualify you for the lowest available rates in today's market.

You'll want to maintain good credit and keep your score within a favorable range while home shopping. I can help you by arranging for a credit report and pre-qualifying you for a loan.