The Secret to Making Collection Agencies Stop Contacting You

A little known fact is that collection companies have to abide by a set of laws when collecting debts, which are laid out in the “Fair Debt Collection Practices Act.” If you want a collection agency to stop contacting you, the next time you are on the phone with them, politely say: “Per the Fair Debt Collection Practices Act, I formally request you to stop calling me. Please contact me in writing from this point forward. Good bye.” And voila, the phone calls will stop immediately.

Next, here’s how you make the collection letters stop. Copy and paste the following template into a Word document, and fill in your own details as applicable. Print the letter and send it via registered mail. The collection companies will be forced to stop contacting you. This works guaranteed. Email me your success story!

“Today’s Date

Attn: Collection Manager/ Legal DEPT.      VIA USPS Registered mail # 123456789

XYZ COMPANY and FAX (555)555-5555

RE: Alleged Acct# 123456789 – Cease and Desist”/Formal Dispute

Your name and address

To:  Collection Manager/ Legal Dept.

In reply to your letter, dated 01/01/0101 and received 02/02/0202, and your daily phone calls, please be advised of the following:

I. I am disputing the above alleged account in its entirety in accordance with the FTCPA. Please provide a copy of all relevant documentation, including but not limited to, signed contract/agreement, itemization/ account history, communication log, etc., to validate this alleged debt.

II. Please “Cease and Desist” all collection activities immediately.

III. You are hereby notified NOT to contact me at my home, place of employment, or by phone.

IV. You are hereby notified that any adverse credit reporting will result in extreme legal actions against your company and the alleged original creditor.

V. For the record, I have been in direct contact with the police department to assist in a pending case of identity theft, which I have been a victim of.

Please check the facts before “jumping” to any type of illusive conclusion that may cause your company and the alleged original creditor to face a vigorous lawsuit. This will serve as a “formal dispute” in reply to your attempt for collection.

Best regards,
Cc:  Experian, Equifax & Trans Union
BBB, FTCPA/Sacramento, CA”

How to Make Money by Downsizing

Downsizing can truly mean “less is more.” If you are a homeowner and considering a lifestyle change, following are the top 3 benefits of downsizing from a larger to a smaller home.

$250,000 to $500,000 Home Sale Tax Exclusion! The Home Sale Tax Exclusion is one of the last remaining incredible tax benefits out there today! Sell your home, and pay ZERO taxes on profits up to $250,000 if you’re single or $500,000 if you’re married. To qualify, you need to have owned a primary residence for 2 years.

Save Money, Save Time! For homeowners who no longer need a larger home or do not want to maintain a larger property, downsizing might be the perfect option. Consider the incredible amount of time and money you will save over a one year period maintaining a smaller home.

Build Equity in a New Property! Build equity in a new property and qualify for the same $250,000 to $500,000 Home Sale Tax Exclusion. Or keep your property as a rental and start building your portfolio.

Living in Los Angeles gives us many lifestyle options from which to choose: from living in a beautiful condo by the beach to living in a house in the hills, and everything in between. Discover the possibilities. You might find an even better living situation than one you’re already in.

How to Qualify for a Home Loan IMMEDIATELY Following a Short Sale, Foreclosure, Bankruptcy, or Loan Modification

Qualifying for a home loan IMMEDIATELY following a short sale, foreclosure, bankruptcy and loan modification is now possible. Waiting periods have plagued home buyers looking to qualify for a home loan following a credit issue ranging from 2-7 years. If the credit issue was related to severe medical issues, acts of god, or for reasons that were truly not your fault, obtaining financing without a waiting period has always been possible with shorter waiting periods.


Today, buyers have the option to potentially qualify for a home loan IMMEDIATELY following a foreclosure, short sale, bankruptcy and loan modification. Larger down payments are mandatory along with a good reason why this credit issue occurred.

Tell me your story! Email me what your credit issue is, and I will let you know if financing is available to you.

To Impound or NOT to Impound

What does “impounding” mean?

Impounding: Including your property taxes and insurance payment along with your monthly mortgage payment. Not impounding: Paying the property taxes and insurance once a year on your own.

What should YOU do? The answer more or less depends on your personality: Are you the type of person who does not want to think about paying your property taxes and insurance at the end of the year? Would you rather it be billed monthly so it’s done and over with? If so, you may want to impound. Keep in mind that impounding requires a little more money out of pocket at the close of escrow. Specifically, you will need to pay a one-time cost of approximately 6 months of property taxes and 2 months of your insurance as part of your closing costs.


Would you rather pay your property taxes and insurance on your own and keep that money in the bank until the payment is due? Do you have plenty of funds and are not concerned with a bill at the end of the year? If so, you may enjoy not impounding. No impound deposit is required.

Good News! There is no wrong answer. Talk it over with your loan officer and think about which option works best for you.

Pre-Approval Documentation Essentials

If you are interested in purchasing a home and qualifying for a mortgage, it’s always a good idea to get pre-approved before shopping for a property. Here are the pre-approval documentation essentials to complete a pre-approval:

  • Completed loan application
  • Last two years’ personal federal tax returns, complete with all schedules attached
  • Last two years’ W2’s and 1099’s (if applicable)
  • Last 30 days’ consecutive paystubs
  • Two consecutive months’ bank, savings, checking, money market, stock, pension, and IRA accounts – include all numbered pages. Documents must be copies of your paper statements or downloaded as PDFs from your bank’s website (there is usually a link to download your statements). Webpage printouts are not acceptable
  • For retirement accounts, your most recent quarterly statements

Self-Employed Borrower’s need to provide these additional documents:

  • Last two years’ K1’s (if in a partnership)
  • Last two years’ corporate federal tax returns, including all schedules

Home Owners need to provide these additional documents:

  • Copy of current mortgage statement
  • Copy of current insurance statement (declaration page which shows premiums)
  • Copy of property tax statement
  • Copy of HOA statement (if applicable)

Tip! During the loan process, you will be required to print, sign, and provide many documents to your loan officer. Instead of faxing them, scan them. Scanned documents provide the clearest copy and allow you to keep better track of all documents you provided. Even if you have to buy a $60 scanner for this purpose, it will be some of the smartest money you’ve ever spent!

The Truth Behind Pre-Approval vs. Pre-Qualification

If you don’t know the difference between pre-approval vs. pre-qualification, don’t feel bad. Many loan officers and realtors don’t know the difference either. Technically there is a difference, although most of the time it’s just semantics.

What is Pre-Approval?

Your loan officer received and reviewed all income and asset documentation. A loan application was input in the system, a credit report ran, and a thorough review completed. A determination was made by your loan officer with little uncertainty as to whether you will or will not qualify for a mortgage.

What is Pre-Qualification?

You provided verbal information only regarding your income and assets. No loan application was received, and no credit report was necessarily pulled. The loan officer determined (with more or less uncertainty) whether you will or will not qualify for a mortgage.

A verbal pre-qualification is essentially worthless. Instead, work with an experienced loan officer, provide all requested documentation, and complete a true pre-approval.

It is best  always to get pre-approved first. Then go shopping for a home.

Top 5 Non-Allowable Funds

Coming up with the down payment and closing costs can be challenging enough, but did you know that not all of the money you plan on using to buy a property can necessarily be used? Here are the top 5 non-allowable funds (with few exceptions) when financing a property:

• Cash
• Funds coming out of a business bank account
• Credit card cash withdrawals
• Non-payroll checks
• Sale from jewelry or random items

Keep in mind that your lender will review every single deposit you have made on every single bank statement. All instances of non-allowable funds will be “backed out” of your total account balance.

Tip! Move ALL funds used to purchase a property into one bank account for two months and make NO deposits or transfers in and out of the account before buying a property.

Top 4 Things to Know Before Buying a Condo or Townhouse

Home buyers interested in purchasing a condo or townhouse must be aware that not all condo or townhouse projects qualify for financing. The project must meet certain minimum standards to qualify for financing. If you are interested in purchasing a condo or townhouse, here are the top 4 things you need to know about ANY condo or townhouse project:

#1 – Are There Any Pending Lawsuits?

Is there litigation on the property? Condo projects are being sued all the time. Depending on the type of law suits pending, a condo may or may not qualify for financing. If there is litigation, request a letter from the attorney “summarizing the complaint” and give it to your loan officer to see if financing is an option for this condo project.

# 2 – Are There Any HOA Delinquencies?

You would be surprised how many home owners pay their HOA fees late. If more than 15% of the condo owners are delinquent on their HOA dues, banks will most likely not lend on that condo project.

#3 – Is More Than 10% Owned by Just One Entity?

If one person or one entity owns more than 10% of the total units in any given condo project, most banks will not lend on that condo project.

#4 – Reserve Funds in HOA Bank Account

Lenders require 10% of the yearly HOA budget being collected for “reserves” as a line item expense on the actual budget. This is a consistent collection requirement each and every year. If the amount being collected for reserves is less than the 10% minimum requirement, then a reserve study would need to be provided to support the lesser amount being collected. Otherwise, this would likely cause the project not to be eligible for financing.

Fun Fact: A good lender may make exceptions to some of these issues.

Condo projects with more challenging issues may not qualify for conventional financing, but alternative lending options tend to be available for almost any property. A good rule of thumb is the more challenging the issue, the larger the down payment requirement and the higher the interest rate.

Top 3 Things to Know About Your Income

When qualifying for a home loan, a high FICO score and a large down payment are commonly considered the most important factors. In fact, many other factors are equally important, but the #1 factor that affects your ability to qualify for a home loan is income. Income is king!

Here are the top 3 things to keep in mind when calculating your income for a home loan:

1. You need to have received any bonus income, commission income, or overtime income over a 2-year period for it to qualify as “income.” And if your bonus, commission, or overtime income declined from one year to the next, it will not be considered income at all when qualifying for a home loan.

2. Self-employed borrowers qualify using their AGI (adjusted gross income), i.e. the income reported after deductions. If your business grossed $1,000,000 but $990,000 was expensed that year, your income that year, as far as the lender is concerned, was only $10,000.

3. Employee expense deductions. According to the IRS, non-self-employed people are allowed to write-off various employee expenses. Those expenses are deducted from your gross income to calculate the income used to qualify for a home loan.

Not all money one earns will necessarily be considered income when qualifying for a home loan. Complete a thorough pre-approval with your lender so you know exactly what your lender considers your income. Always know your true buying power before starting to shop for a home!

Top 3 Reasons to Stop Renting and Buy a Home

Owning a home is part of the American Dream, though renting is not always a bad idea. Renting can be cheaper, require less maintenance, and offer the flexibility to pick up and move with little hassle. Still, eventually, most people want to stop renting and own their home.

Here are the 3 top reasons why renting may no longer make sense for you:

#1 – Stop Paying Your Landlord’s Mortgage: Is your rent payment equal to a mortgage payment? Consider and include the tax benefits when making the “rent vs. own” calculation. Mortgage interest, property taxes, and insurance are tax deductible.

#2 – Historically Low Rates: Locking in a low interest rate for 30 years at a time, as most economists predict substantial inflation in the years to come, is a very good idea.

#3 – Peace of Mind: Never having to move again and being able to fix up the place exactly how you want it.

Owning a home has proven to be a very successful investment over the past 100 years and, for most people, it is the single best investment they will make in their lifetime!