Could Social Media Be Causing You to Overspend?

Social media has exploded. It is a multi-million dollar industry with ordinary people becoming overnight sensations and companies cashing in on people’s apparently insatiable need to constantly be connected. It is a vital connection to loved ones serving overseas and to keep in touch with family and friends.

The many different platforms have enhanced our lives by making us feel connected and that our opinion matters. Yet what if all this sharing has a dark side? Could social media be causing you to overspend?

Overspending is a big problem in many households. With skyrocketing prices at the store and gas going steadily up and more people getting behind on their credit card and loan payments, sticking to a budget has become an almost impossible task. There never seems to be enough money left at the end of themonth, and it seems a paycheck just disappears.

If you want to rein in your spending, first you have to determine where the money is going. Once all the necessities are paid like mortgage, rent, bills and food, do you spend too much on trying to keep up with the Jones’?

How to Tell if Social Media Is Causing You to Overspend

Here are some questions to determine if your overspending is caused by social media.

  1. Do you constantly check to see what your friends bought?
  2. Are you spending more time than usual on social media?
  3. Do you feel anxious, jealous or dissatisfied with life after checking social media?

It used to be just your neighbors and co-workers you tried to keep up with or outdo. Now it’s everyone in your circles, posting about their latest luxury cruise "just because" or posting beautiful pictures of their latest $100,000 kitchen remodel on Pinterest. It might not even be people you "know," just people you envy online.

This might not even be a conscious choice; you might be overspending just to keep up appearances. You might splurge on a $2,000 sofa because you saw one online, even though it’s way out of your budget. You think it is okay because of the special financing, but you can quickly get in trouble if you miss even one payment, because the interest instantly gets added on from the day of purchase. Suddenly that $2,000 sofa balloons into $3,000, and you are still paying on it for months or years after you bought it.

Resentment could be another byproduct of social media. You see all the seemingly perfect people online and you wonder why your life isn’t like that. You feel like it’s not fair, so you spend the $600 you managed to save for the emergency fund on one wild shopping spree. Then when a true emergency occurs, you have nothing left besides a few cool posts on Facebook and some new clothes or furnishings.

The truth is that you don’t know everything behind the photos and posts. The couple with the gorgeous beach house, two perfect kids, and adorable puppy? Their finances could be in worse shape than yours or theycould be having health problems. You only get to see the surface or mask that they choose to post. Basing your own desires on what you perceive is like falling for the Wizard of Oz’s tricks.

How to Stay Connected and Still Avoid Overspending

How do you turn it around? First, decide what your goals are. What do you want your life to look like? Do you want to be debt-free? Do you want your house to look like a spread in House Beautiful? Do you want a brand-new car or flashy clothes? Once you pinpoint your priorities, you can concentrate on mini-goals to reach them.

Take control of your spending by keeping track of every penny. For every purchase, ask yourself four questions:

  1. Is this something I really need?
  2. Do I already have something I can use?
  3. Can I find it cheaper somewhere else?
  4. How will this enhance my life or goal?

After a while, the questions will become automatic and you will find yourself letting go of the constant need to spend, and instead become more content with what you have.

Unplug for a while, at least until you get on track with your spending. There are so many ways to connect that it can become addicting. Like any addiction, sometimes going cold-turkey will break the spell it holds over you. Just try it for a week and see how you feel. Better yet, see how your finances are doing.

Social media isn’t going away. It has become a part of our lives, for better or worse. How you choose to engage could be the difference between failing finances and a healthy budget. Once you master your overspending, social media can be fun again!

Shaunna Privratsky is a regular contributor to TheDollarStretcher.com. Visit today for 8 ways to beat retail therapy and how to recognize the emotions behind buying stuff.

This article by Shaunna Privratsky first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.


What Does A “Charge-Off” Notation Mean On My Credit Report?

Q. What does a “charge-off” notation mean on my credit report?

A. A common theme in my credit card debt relief law practice is to know what you owe and have a plan to pay off your credit card debt. The best way to get a true picture of your debts is to run your credit reports from the three major credit bureaus, Equifax, Transunion and Experian. I recommend getting all three reports from annualcreditreport.com. This site will provide all three reports for free and you can save them to your computer for future reference. It is important to get all three of your credit reports since your creditors might not report to all three bureaus. If you have debts you have not paid for quite some time, you may see a notation that your account has been charged off. So what does that mean?

A charge-off is the declaration by a creditor that an amount of debt is unlikely to be collected. This occurs when a consumer becomes severely delinquent on a debt. Traditionally, creditors will make this declaration at the point of six months without payment. But this does NOT mean that you don’t have to repay the debt. Your creditor considering the debt “uncollectable” is just a term that has no bearing on your duty to pay back your debt. Your creditor is still legally entitled to collect on this debt. At this point, your creditor can continue collection efforts or send your debt out to a collection agency or sell your debt to a third-party.

If you are receiving mail from entities you have never heard of, chances are your debts are with a collection agency or debt buyer. Some common names you might see are Portfolio Recovery Associates, Midland Credit Management, Cavalry Portfolio Services, Encore Capital Group, Absolute Resolution Corporation, NCO Financial Systems, and Enterprise Recovery. It is important that you have these creditors verify that you actually owe a debt to them before sending any payments to them. As long as you can verify that this is the proper person to make payments, it is crucial that you realize that you might have options for repayment.

A few options to consider are repayment of the full balance over an extended term, bankruptcy, or a debt settlement. Going back to my original theme, have a plan. If you are facing debts that are charged off, you face the potential of getting sued due over your non-payment. Before it gets to this point, you need to develop your individual plan to see what works best for you. There is no “one-size-fits-all” solution when looking at your debt relief options.

This article by Daniel Gamez first appeared on Gamez Law Firm and was distributed by the Personal Finance Syndication Network.


A Guide to Getting a Mortgage After You’ve Had a Loan Modification

If you had a mortgage just a few years ago, fell on hard economic times or were offered a mortgage loan modification by your loan servicer and you’re looking to apply for a new mortgage loan, you’ll need to meet certain credit requirements to get a green light on a new loan. Here’s what you need to know.

What Is a Loan Modification?

A loan modification, also known as a restructured mortgage, is a loan in which the original terms of the agreement have changed, resulting in the restructuring of the debt.

The most common forms of loan modifications had to do with rate and payment restructuring when borrowers were unable to refinance. Another common strategy for mortgage companies was to offer principal curtailment (reduce the amount owed) rather than forgive debt. The difference was repositioned as a lien on the home in the form of a silent second mortgage (a mortgage not disclosed to the original lender), which did not come into play until the home was refinanced or sold.

It is important to note here that a loan modification is different from a mortgage refinance. A loan restructuring changes the terms of the original mortgage, whereas a refinance pays off the original mortgage loan in exchange for another. Most homeowners these days are not seeking a loan modification, and most banks are not promoting them, as the economy has shifted tremendously from just a few years ago.

The Lowdown

If a modified mortgage is in your past and you’re looking to take out a new mortgage, then these rules apply:

  • To be eligible, you have to have made at least 24 mortgage payments since the restructuring was completed. It is this black-and-white. Even if there was a second mortgage in place that was restructured, this same waiting time applies — whether the mortgage is on a primary home, a secondary home or an investment property.
  • If you are purchasing or refinancing another property independent of the property that has a restructured loan, a one-year waiting time applies.

If your previous loan modification contained a forbearance, a period during which you did not make a mortgage payment and the additional interest was tacked onto the principal balance of the mortgage at the time the restructuring was completed or if there was a principal balance forgiveness, it’s going to be up to the individual mortgage company to approve. Generally, mortgage loan companies frown on this, even if you have met the 24-month — or 12-month requirement — depending on your individual circumstances.

Planning Ahead: Refinance or Modification?

If your mortgage loan servicer offers you a lower monthly mortgage payment, make sure it is a bona fide refinance offer, rather than a potential loan modification. If you are unsure as to whether or not the offer you’re receiving is a loan modification or refinance, be smart, get it in writing.

The best outcome to maintain your credit standing is refinancing rather than restructuring. If refinancing is not an option, perhaps due to home equity for example or a heavy debt load, and loan modifying is an option with your current loan servicer, know that you’re going to be limited on your future mortgage options for up to two years.

Additionally, lenders are required to report modified/restructured mortgages on the tri-merge credit report mortgage banks use to make credit decisions. This financial services credit report is how banks find derogatory credit events. Even if you didn’t have any missed mortgage payments, a restructured mortgage can still be a red flag to potential mortgage lenders.

If you had a home loan modification in the past few years and you want to buy a new home, it’s a good idea to check your credit reports and credit scores to see how it may have affected your credit, and to see if there are any errors or problems you need to resolve before you apply. You can get your free credit reports from AnnualCreditReports.com and you can get your credit scores for free from several sources, including Credit.com.

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This article originally appeared on Credit.com.

This article by Scott Sheldon was distributed by the Personal Finance Syndication Network.


44K Cars Were Stolen Last Year Because People Left Keys in Them

Having your car stolen would be a terrible thing to experience, but apparently thousands of Americans aren’t thinking about that because they leave their keys in their vehicles — and then the cars get stolen.

Sure, it may seem like a no-brainer to not leave your keys in an unattended vehicle, but people are increasingly making this mistake, according to an analysis from the National Insurance Crime Bureau. From 2012 through 2014, 126,603 vehicles were stolen with the keys left inside. The actual number of key-in-car thefts is likely higher, because if the theft report didn’t include that detail (perhaps an omission of an embarrassed victim), it’s not included in these figures. While auto theft has declined in the last few years, the percentage of those thefts involving keys left in the vehicle has climbed.

In 2012, 5.4% of cars stolen had the keys in them at the time of theft. That share increased to 6% in 2013 and to 6.7% in 2014 — that’s 44,828 vehicle thefts with the keys inside.

Losing your car is bad enough, but think of what else you might lose. People leave lots of stuff in their cars that can be used by identity thieves, like mail and vehicle registration documents. If someone lifts your car because you left it running when you went to grab a cup of coffee, you might have left your purse, briefcase, wallet or phone behind, too. Not only do you have to deal with the stress of having your car stolen (and who knows what your insurance covers), now you have to worry about someone stealing your identity.

Identity theft can manifest in a variety of ways, all of which can harm your well-being, particularly your financial stability. For example, if someone opens up fraudulent credit accounts in your name, your credit standing will suffer the consequences, which could include a slew of things including credit inquiries, high debt levels and missed loan payments. The sooner you spot fraud, the sooner you can get the information removed from your credit history and repair any damage done. The longer fraud goes on, the more likely you are to deal with limited credit access and higher loan interest rates, as a result of fraudulent information. That’s why it’s so important to regularly monitor your credit, which you can do for free on Credit.com.

Of course, it’s also extremely helpful if you avoid leaving your car unattended with the keys inside. That would save you a lot of trouble.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


Anonymous Donor Pays Mortgage of Man Who Lost His Home in Mudslide

In March last year, a mudslide killed Tim Ward’s wife and some of his pets; he lost his home that day, too. Ward suffered severe injuries, including a crushed pelvis, but on top of all the tragedy, he also needed to figure out what to do about the mortgage he had on a home that no longer existed.

It seems Ward finally found some relief in the wake of this disaster, because an anonymous donor has offered to pay off Ward’s $360,000 home loan, NBC News reports. Apparently the donor read a newspaper article about Ward’s strife and contacted the lender.

Ward and his late wife lived in a farmhouse near Oso, Wash., which experienced the major landslide on March 22, 2014. The slide killed 43 people, including Brandy Ward, and 42 homes, with an average market value of $164,717, were destroyed, according to the Seattle Times. Thirty of the homes were primary residences, none of which had landslide insurance, and nearly all of them belonged to low-income families, the Seattle Times reported.

Ward was negotiating with his loan servicer, Chase Bank, about the repayment of the VA mortgage he had on his destroyed property. The anonymous donor contacted Chase Bank about paying the loan, NBC reported.

The gift could save Ward from what may have been a messy financial future. He is renting a home at the moment, and the mortgage is in forbearance, meaning he isn’t making payments while in negotiations with Chase, but that loan continues to accrue interest, and it would be costly to have to pay it off while also paying for his living space. Declaring bankruptcy is an option for getting rid of the debt, but bankruptcy severely damages a person’s credit for many years.

Victims of disasters may not be able to count on the generosity of strangers — Ward told NBC he’s thankful for his Good Samaritan — but they should seek help from relief agencies and see what help their lenders may be able to offer, so victims can better control the damage they encounter. They may also want to keep an eye on their credit reports periodically to make sure the debts in question are being reported correctly, and to dispute any errors as they arise. Consumers are entitled to a free credit report annually from each of the three major credit reporting agencies.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


You Are More Than Your Credit Score

If you are planning to borrow money any time soon, it is likely you will be judged by a three-digit number known as your credit score. Fair, Isaac and Company – FICO — was the analytics company that pioneered the concept of credit scoring now used by lenders around the world. Since then, other companies have joined in with their own credit scoring models.

The friendly credit scoring folks boil your credit history down to a three-digit number reflecting several key factors that help determine the creditworthiness of an individual. These include your payment history, how long you’ve had credit, the types of credit you’ve had, how much you owe versus how much you have borrowed and how often you apply for credit. These factors combined produce your credit score, which is a key part in a lender’s decision as to whether you are creditworthy, and if so, what loan terms you should be offered.

Although this number and related methods have served the lending community well over the years, in order to better serve future borrowers, the next generation of lenders must factor in a richer, more complete set of data, one that not only looks at the individual behind the loan application but also the people – the “social network” – around them. Bringing the community into lending provides a more complete representation of a person’s creditworthiness, leading to more accurate rates and, ultimately, money saved for borrowers.

An Incomplete Reflection

The FICO score and other analytic models have been remarkably useful since their creation in the late ‘80s, but as with any established process, there are limitations.

Today’s algorithms are, no doubt, impressive. In less than a millisecond, they can parse vast mountains of data to make more informed decisions, examining many of the key factors traditionally used in determining a borrower’s likelihood of repayment. With power like this, it’s easy to assume every base is covered – but is that really the case?

One mistake can deny a good borrower access to credit, and at a minimum diminish their ability to secure a great rate. For example, many Americans with excellent credit scores – in this example, about a 780 FICO score — can lose up to 100 points off their credit score for a single 30-day late payment. What’s more, getting a credit score “back on track” can take upwards of two to three years.

As we all know, there’s more to a person than just their past – and there’s more to someone’s creditworthiness than their individual financial circumstances.

Are you working toward a career in medicine, or perhaps as a computer programmer? Do you have one semester left before earning an MBA? Do you come from a close-knit community that is committed to helping you succeed? An algorithm won’t account for these factors when it determines your loan eligibility or APR. Its focus is narrowed only to past borrower performance history, in isolation.

Friends and family have the best insight into a borrower’s potential and can serve as a check-and-balance when paired with data-driven methods for evaluating creditworthiness. Reliance on data science and objectivity should still underlie loan applicant evaluations, but when we consider individual potential and social factors coupled with data-driven analytics, a more complete, truthful assessment of an individual emerges.

Loan Decisioning 2.0

It’s safe to assume people understand people better than machines ever will.

Before score-based loan decisioning, real people decided who got approved for a loan. Lenders consulted friends, family, neighbors and employers to get a sense of your creditworthiness. Modern data infrastructures did not exist, so it was a borrower’s network that factored heavily into a lending decision. Lending was communal. It was human.

As the financial industry recovers from the wounds of the Great Recession, we are afforded the opportunity to rethink lending – a “Loan Decisioning 2.0” – but if we are ever going to create such a change, in addition to data we must again factor for a human perspective. The intention is not to replace the current system, rather to complement those data-driven decisions with real-life network data. Together, they will ensure a clearer reflection of an individual borrower.

Let’s take the best of lending’s roots, in an objective and fair manner, and ensure borrowers are afforded manageable interest rates that reflect their true potential. Let’s consider the people who know them best when making a decision.

Let’s put the social back into lending.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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This article originally appeared on Credit.com.

This article by Yee Lee was distributed by the Personal Finance Syndication Network.


How to Make Sense of Your Paycheck

Remember that first paycheck? That surprise when you discovered you weren’t going to take home your entire earnings? The confusion over all those boxes and codes? FICA? FUTA? What the heck does that mean?

Paystubs can be puzzling. As CIO of a Payce Inc., a payroll company serving employers all over the country, Josh Lindenmuth understands that confusion. “We get a lot of questions from our clients about pay stubs, many of which are questions that they were asked by their employees,” he says. He polled his colleagues to find out the top five items that stump employees, and here they are:

1. Retirement Plan Tax Deductions

If you have a 401(k), 403(b) or similar retirement plan, the tax deductibility of that contribution can get confusing. “Most employees don’t realize that 401(k)s, 403(b)s, and many other deductions are not taxable for some tax types, and taxable for others,” Lindenmuth says. “For example, a 401(k) deduction is not taxable for federal withholding, is taxable for Social Security and Medicare, and is not taxable for most states.”

2. More Taxes

Yes, you know there will be taxes taken out of your paycheck. But do you realize how many? “The average paycheck has six different employee taxes,” Lindenmuth points out. “State disability, local service taxes, city taxes, county, OASDI and more.” These are often abbreviated, and there is no single standard for those abbreviations. He gives the example of federal withholding, which could appear as “FIT, FITW, FWH, FED or any other variant.”

3. Tips

If you work in the service industry where some or all of your income is based on tips, you may find the way they are reported varies from employer to employer. “Some companies show tips as both an earning and an after-tax deduction, which is done to make the tax calculations simpler,” says Lindenmuth, “but this leaves many employees befuddled.” He says his company lists them as “a taxable memo item,” and still others may list cash and credit card tips separately.

It is important to understand how tips are reported, not only so you correctly file your tax returns, but also if you are planning to apply for a mortgage or another major loan. Here’s how tips affect your ability to get a mortgage.

4. Leave Pay

Do you earn paid vacation, sick or personal days? Of course you’ll want to keep track of how much time you’ve earned and have available. But sometimes that’s easier said than done. Lindenmuth explains:

“They’ll often include a lot of other details, and the week-by-week changes for the leave pay figures on a pay stub are often difficult to comprehend. That’s because hours available doesn’t always change by year, but rather by a combination of the employee’s tenure, hire date, hours accrued (earned) throughout the year, and any leave pay carried over from the prior year. Since leave pays can reset at any point in the year based on the company’s policy, employees are often left scratching their heads and just assume it’s correct. To help employees figure out how the leave pay is calculated, some companies include figures such as beginning balance (amount available after the last reset), hours accrued (hours earned since last reset), and hours taken (total number of hours taken since the last reset).”

5. Group Term Life Deduction

Does your employer pay for employee life insurance? If so, you may see a deduction for this on your pay stub. Your reaction may be “Why? They are paying for it.” This deduction will be for the taxes on that benefit, rather than for premiums. Employers usually pay for one dollar of coverage for each dollar in salary. The first $50,000 in coverage is not taxable, but any amount over that will be. For example, if your salary is $75,000 and you receive $75,000 in employer paid life insurance, you will be taxed on $25,000 of it. ($75,000 – $50,000 = $25,000.) “This shows up on the pay stub as a GTL deduction, which is often very confusing,” Lindenmuth says.

Clearing Up Confusion

What should you do if you don’t understand something on your pay stub? “Ask your supervisors or payroll personnel,” advises Lindenmuth. He says that’s especially important when you first start working for a company or if a new tax or deduction appears on your pay stub. “In some cases, the payroll deduction or tax in question may have been added in error – asking right away ensures that the problem is fixed before it can have tax implications for the employee or their employer,” he notes.

You can also read Credit.com’s guide: How to Read Your Paycheck: Understanding Your Pay Stub.

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


CFPB: Bank Charged $50M in Illegal Overdraft Fees

Consumers were charged nearly $50 million in illegal overdraft fees by Alabama-based Regions bank, federal regulators said Tuesday. The bank, which operates in 16 states, failed to get consumers to opt-in to overdraft coverage, failed to stop charging illegal fees for nearly a year after it discovered the activity and also charged illegal fees in connection with its payday-loan-like “deposit advance” product, according to the Consumer Financial Protection Bureau.

Regions Bank operates approximately 1,700 retail branches and 2,000 ATMs, with a footprint that spans across the South and Midwest, from Florida to Texas to Illinois. It is one of the country’s biggest banks with more than $119 billion in assets.

“We take the issue of overdraft fees very seriously and will be vigilant about making sure that consumers receive the protections they deserve,” said CFPB Director Richard Cordray.

The CFPB on Tuesday ordered Regions to refund consumers and pay a $7.5 million fine, the first such fine levied under new overdraft rules set for banks in the Dodd-Frank financial reform bill.

“After discovering that a small subset of customers had been charged fees in error, we reported it to the CFPB and began refunding the fees. We believe the vast majority of the refunds have been completed and we have made changes to our internal systems to resolve these matters,” said Evelyn Mitchell, Regions spokeswoman.

Overdraft fees average about $35, and can be charged when consumers write checks or make electronic payments, purchases or withdrawals that exceed the available balance in their checking accounts. Prior to Dodd-Frank, consumers complained that they were often automatically enrolled in pricey overdraft coverage, which could cause them to incur $35 fees on small debit card purchases that sent their bank balances only a few dollars into the red. Dodd-Frank requires banks to simply reject such transactions unless account holders have affirmatively opted-in to the coverage.

But Regions kept on charging a subset of consumers overdraft fees without their express consent after Dodd-Frank took effect in 2010, the CFPB said. Regions customers who had previously linked their checking accounts to savings accounts or lines of credit were not asked to opt in for overdraft coverage, and kept on incurring fees as high as $36 per transaction.

Thirteen months after the mandatory compliance date, the bank discovered its error in an internal review, but kept charging the illegal fees for an additional year, the CFPB said. Finally, in June 2012, the bank’s computers were re-programmed to stop charging the fees.

It’s been a challenge for the bank to identify all impacted consumers. In December 2012, the bank voluntarily refunded $35 million to consumers who wrongly paid fees. In 2013, the CFPB alerted the bank to more victims, and it refunded an additional $12.8 million. This January, the bank found even more victims. The consent order issued by the CFPB today requires the bank to hire an independent consultant to identify any remaining consumers who are entitled to a refund.

The bank is also accused of making nearly $2 million by charging overdraft fees in connection with its deposit advance product after promising it wouldn’t charge such fees. Consumers who agree to a deposit advance loan receive money in their checking account in anticipation of a future deposit, often a direct deposit. When Regions collected from consumers’ accounts, and the payment was higher than the available balance, the bank sometimes changed overdraft fees, despite saying it would not do so.   Between November 2011 and August 2013, the bank charged non-sufficient funds fees and overdraft charges of about $1.9 million to more than 36,000 customers, the CFPB said.

The bank was ordered to identify and fix any errors on consumers’ credit reports related to the illegal overdraft fees, and to pay a $7.5 million fine. The CFPB warned that the fine could have been higher. (Consumers can check for errors by getting their free annual credit reports from AnnualCreditReport.com, and can watch for issues by getting their free credit report summary, updated every month on Credit.com.)

“Regions’ violations and its delay in escalating them to senior executives and correcting the errors could have justified a larger penalty, but the Bureau credited Regions for making reimbursements to consumers and promptly self-reporting these issues to the Bureau once they were brought to the attention of senior management,” the CFPB said in a statement.

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This article originally appeared on Credit.com.

This article by Bob Sullivan was distributed by the Personal Finance Syndication Network.


Govt & One of Nation’s Largest Mortgage Lenders Sue Each Other

The U.S. government filed a lawsuit against Quicken Loans, one of the nation’s largest mortgage lenders, for allegedly improperly originating and underwriting Federal Housing Administration (FHA) home loans, the Department of Justice announced April 23.

The Detroit-based lender closed $140 billion in mortgages from 2013 through 2014 and is the nation’s largest FHA mortgage lender, according to the company’s website. It is also the nation’s largest non-bank lender, in terms of mortgage origination.

The FHA, part of the U.S. Department of Housing and Urban Development (HUD), insures home loans with lower down payments, lower closing costs and lower applicant credit scores than with conventional mortgages, allowing more people (particularly first-time homeowners) the opportunity to buy a house. If the borrower defaults on the loan, the lender may make a claim to FHA insurance to cover the losses on the loan, and during the onslaught of loan defaults during the mortgage crisis a few years ago, that insurance fund was stretched thin.

The government claims that from September 2007 to December 2011, Quicken jeopardized the FHA insurance program by submitting claims for “hundreds of improperly underwritten FHA-insured loans.” The lawsuit alleges the company created a culture where employees were encouraged to disregard FHA rules and falsify proof of compliance with underwriting requirements in order to cash in on FHA mortgage insurance.

Quicken actually filed a lawsuit against the Department of Justice first, saying that “the DOJ demanded Quicken Loans make public admissions that were blatantly false, as well as pay an inexplicable penalty or face legal action,” according to the lender’s April 17 announcement of the lawsuit. In a statement released in response to the DOJ’s lawsuit a week later, Quicken said the complaint is “riddled with inaccurate and twisted conclusions,” based on a small portion of emails the lender turned over to the department.

“[T]he DOJ appears to be basing their entire case on a handful of out-of-context email conversations skimmed from the communication between Quicken Loans employees. These conversations relate to a miniscule [sic] number of loans out of the nearly 250,000 FHA mortgages the company has closed over the past seven years,” Quicken’s statement says.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


Is a Password Problem Making Credit Card Terminals Hackable?

You know how sometimes you sign up for something and you get a default password so you can access that new account? Apparently, that sort of system came under fire recently at a major cybersecurity conference in San Francisco.

At RSA Conference 2015 USA, which ran April 20-24, researchers said that a major payment terminal vendor has been shipping systems with the same default password for more than 20 years, according to a report from the International Data Group (IDG) News Service.

The researchers said the default password is in use at nine out of 10 customers who have the terminals. IDG confirmed the vendor is VeriFone, which operates point-of-sale software in more than 150 countries. VeriFone sent a statement to IDG acknowledging that its devices come with a widely known default password, and new devices now require users change it upon setup.

“The important fact to point out is that even knowing this password, sensitive payment information or PII (personally identifiable information) cannot be captured,” Verifone said to IDG. “What the password allows someone to do is to configure some settings on the terminal; all executables have to be file signed, and it is not possible to enter malware just by knowing passwords.”

The researchers who discussed the issue at RSA Conference had a different perspective, identifying the default password as one of many security flaws in the industry, which they detailed in a session cheekily titled “That Point of Sale is a PoS.”

Vulnerabilities in point-of-sale systems have come under intense scrutiny in the wake of massive data breaches that have hit the retail industry in recent years. Some of the largest attacks hit Target and Home Depot, when hackers installed malware in point-of-sale terminals and stole millions of consumers’ payment card information.

Such breaches can seriously harm consumers’ finances, because the balance that results from any fraudulent charges made with stolen data could end up on consumers’ credit reports, which can be time-consuming to correct. In the case of stolen debit card data, a thief could wipe out a consumer’s bank account, the funds of which may be necessary to make bill and loan payments. Because consumers can’t do much to protect their data from getting stolen in a breach like the ones that hit Target and Home Depot, the best thing to do is closely monitor your financial accounts and credit data. You can get a free credit report summary every 30 days on Credit.com, to help spot fraudulent activity.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.