"Universal Default Clause"

The new law allows ALL creditors to raise your credit card interest rates up to that companies maximum interest rate even if you are late on your water bill! Customers can potentially trigger universal default pricing by a credit card issuer by the following behaviors:

1. Being late (even once) on a credit card, mortgage, utility or car payment.
2. Going over the credit limit, on ANY credit card.
3. Carrying too much debt overall.
4. Using over 50% of the credit line for an individual credit card.
5. Having too much available credit and open trade lines.
6. Making too many credit inquiries.
6. Getting a new mortgage or car loan.

Your interest rates can skyrocket to 30 percent or more if you make late payments, or even make 3 minimum payments in a row!

"How can this be legal?" you may ask. The answer is found in the fine print of your credit card agreement, and it is called a "universal default clause." According to the Institute of Consumer Financial Education, currently almost 40 percent of credit card issuers apply this policy to their customers.

Your creditors also have the right to routinely monitor your credit file. So a creditor with a "universal default clause" will be watching -- and waiting for you to make a small mistake! Check all your credit cards for this clause in the fine print!

They are losing too much money on bad mortgages made, and they will be after your money.

Refinancing Your Mortgage is NOT debt elimination

What do I hear a lot? I'm going to refinance my mortgage and pay off my credit card debt, which will lower my payments. (Listening to a mortgage broker who is going to make a huge commission when you do this is dangerous!)



What you are really doing: Moving unsecured debt to secured debt-against your most important asset-your house. Now, if you can't make a payment, they can foreclose on the roof over your head.



You did NOT eliminate any debt, you have just restructured it and if you restructed it into a new 30-year mortgage, you will be paying off that same debt over the next 30 years. It might be at a lower interest rate, but you need to study your loan ammortization schedule and see what this new 30-year plan costs you. That mortgage broker may not be your friend - remember, his/her first interest is padding his/her pocket.



Your least cost option? Submit the debt to arbitration, eliminate it with no interest cost over the next 18-39 months.



Also, talk to us about how you can use a MMA to eliminate your mortgage in half the normal time.

Time to Clean Yourself Up for the Future!

No more risky real estate loans:

Countrywide Financial Corp., the nation's largest mortgage lender, said it lost $1.2 billion over the summer, as the amount of money it set aside to cover losses from loans gone bad skyrocketed. Angelo Mozilo, the chairman and chief executive of Countrywide, said the changes in the mortgage market over the summer were "unprecedented," and the company is eliminating nearly all but the safest loans from its product menu. It is also in the midst of cutting 12,000 jobs.

For potential mortgage borrowers, the comments paint a sobering picture of the difficulty in getting a new home loan in the coming months. "If your credit scores are low, your access to mortgage money has all but vanished," said Dan Green, a certified mortgage planning specialist and author of TheMortgageReports.com.

Footnote: "This week the local paper published figures for the Bradenton/Sarasota Florida market where we live: The median home sales price has declined by $109,000 since October of 2006, just one year ago."

A young, 20-something financial associate originally from California and now living in Florida said to me 1 1/2 years ago: "Real estate never declines in value." I said: "Let me tell you about Texas 1984-1985, young man." Now I've seen it twice in my 55 year lifetime.

It's time to clean up your financial house if you have too much debt of any kind.