Credit Scores and Healthcare Bills

Little Rock       If you have every tried to borrow money from a bank or buy a house, you have been introduced to the strange and terrible world of credit scores that are often key factors not only in whether or not you get the loan or are able to buy the house, but in the interest rates you are offered which translates into thousands and sometimes tens of thousands of dollars you will end up paying over the life of the loan.   Way too frequently confronting the reasons black marks appear on your credit scores goes back to disputes, where you were convinced you were being ripped off and fought back and whether you won or lost you find only when seeking a loan that you were still knifed in the back by the rouge bill collector anyway.   Too often this happens with medical bills which after an illness come flying at you from every direction it seems and invariably from outfits that you never realized even knew your name, but now are billing you, calling you, and so forth.  Anesthesiologists must be the worst offenders since you met your doctor so have no clue who might be the guy is who is billing you for hundreds of bucks while you were out cold.

In a significant development reported by the New York Times, a major credit card score generator, VantageScore Solutions, “has decided to ignore collection actions on credit reports – more than half of which are typically tied to medical debts – as long as the collections are paid.”  That seems exactly right!  The example in the story involved a woman who was going to pay $33,000 in extra interest on a home loan because she had mistakenly used her dental card rather than her medical card to pay a $700 charge.  She fixed it when her mistake became known and paid with the right card, but meanwhile was burned on her credit score she only found out later when it bumped her interest rate up.  Bam!

I can relate.  A couple of months ago, running to pay off my bills before going out of town, I threw the envelopes in the mail to Cox Cable and to CitiMortgage where I’m still paying a note on a fishing camp lost to Katrina 7 years ago.  A month later I got a foreclosure notice from CitiMortgage, even though I had paid the next month, and had ignored several of their envelopes when I returned home assuming the letters had crossed in the mail with my check.  I called them with fire breathing out of my nostrils.  They claimed they had never gotten the payment.  I told them the date it was sent.  I thought we worked it out at the end of the argument when we agreed I would stop payment on the earlier check and send them a new one.  If they got it right away, she claimed she would not report me to the credit bureau.  There was discussion of where the sun doesn’t shine.

A couple of days later someone from Citi left a phone message at the house that they had deposited my hundred dollars.  The same day a letter came in from Cox returning the check to CitiMortgage which they could not deposit.  Ok, you are with me now.  I had put the wrong checks in the wrong envelopes.  Then I got my monthly payment notice from CitiMortgage showing a random $100 they had applied to principal payment and a late charge.

Yep, back on the 800# fired up again.  Citi explained that it is their policy to cash any and all checks that come to them no matter who they are written to.  Fortunately Cox Cable and most other businesses, and even banks, don’t have such a ravenous practice.  I said you can’t have it both ways by taking my money, depositing it wrongfully, and sending me a late charge.  After she talked to her boss, they waived the late charge.  I let them keep the money though they offered to return it, since they were busted.

Mistakes happen.  That’s why we have “I’m sorry” as part of our common language.  When we’re wrong we make it right.  Unfortunately, when they are wrong, they make us pay.  VantageScore Solutions needs to be the model here for stopping these quick trigger credit and corporate culprits.

Credit Scores Audio Blog

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Force-placed Insurance and Me

New Orleans  I find no joy in reading about forced-placed insurance, but I take great satisfaction in seeing the farce and fraud of such anti-consumer insurance coming to light.  Quoting Benjamin Lawsky, superintendent of Financial Services from Gretchen Morgenson’s “Fair Game” column in the Times,

Force-placed insurance appears to be the dirty little secret of the mortgage industry.  It is a silent killer harming both consumer and investors while enriching the banks and their affiliates.

I was particularly drawn to the comments of Mark Rodgers who was flaking for CitiMortgage and claimed,

CitiMortgage does not sell homeowner’s insurance to consumers.  If a homeowner does not provide an insurance policy, CitiMortgage secures a policy to protect the interest of the investor.  Whenever the homeowner submits proof they have obtained insurance on their own, the lender-placed insurance is canceled.

Makes it all seem simple and straightforward doesn’t it?  Well, reality with CitiMortgage, not surprisingly is a whole different thing!

Unfortunately, I know because we owned a small, beaten up and dearly loved fishing camp in the marsh and bayou abutting the Big Branch National Wildlife Refuge just 35 minutes from our home in the 9th Ward of New Orleans.  We still own 2 acres of marsh with some protruding pilings there and hopes and dreams for the future some day, but for now it is a fond memory of life before Hurricane Katrina six years ago.  I think of the camp every month as I pay CitiMortgage for the memory and what is left of the place.  These days that is a simple process of them sending me a notice and me trying to get them a check, but thanks to force-placed insurance that was not always so.

Even after Katrina, I never missed a payment on the camp, but within months I started having problems with CitiMortgage that continued annually for quite a spell.  First they imposed homeowners insurance on the camp at great cost, even though any notion of a “home” had been flooded and flown to smithereens.  I would call and explain Katrina, and they would insist on more and more documentation for me to prove that there was no longer a structure on the property.  After months of payments and contention they would temporarily yield, issue a refund, and then it would start up again the next year.

And, then they would demand and force-place flood insurance.  No small amount of irony here, since flood insurance wasn’t available on the camp before the storm, much less after the storm.  Either way, there was nothing left to flood.

I almost wished that Citi had sold homeowner’s insurance, because at least I would have gotten kissed first.  They would have at least had to ask before they demanded, assessed and coerced the payments from me, rubbing raw the open sores of already deep discontent in the wake of the loss.

They have a scheme around insurance, but they have no system.

This “dirty little secret” needs to not only be exposed, but solved!

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