The Price Of Identify Theft

The Price Of Identify Theft

Can the housing and mortgage industry stand ANOTHER thing that will make it more difficult to buy a home? Just when you are hopeful that it is all getting better–bam—one more thing beyond your control comes along…

The massive breach of security and identify theft that will be fall out from Target, Neiman Marcus, JoAnne’s, and others, as yet unnamed, will probably affect the mortgage industry…How does one explain the now ruined credit scores and damaged credit reports, and possible identity theft? The Target disaster may included as many as 70 million credit and debit cards…I know I had one, and had it cancelled as soon as possible…Now must watch more diligently and check my credit report for “issues.”

Neiman Marcus said approximately 1.1 million of their customers are now open to fraud or “other issues,” that may arise…Have also heard on the news that five other companies have also experienced breaches similar to Target thefts. Both companies have offered free credit monitoring services to help the situation for the consumers…

With the incredible numbers of consumers involved in this mess, identity theft could be huge…If you have ever had your identity stolen, and several of my clients have, it can take a LONG time to fix your credit…While you are not liable for the debt that is charged to you, it ruins your credit score…It can take a very long time to to get the documentation you need to correct it and then you need to get it all removed from your credit files and credit bureaus…

Banks and other creditors use credit scores and other information to determine if you can get a loan to buy a home (or other product, such as a car)…If you have tried to purchase a home recently, you are aware that the bank monitors your file VERY carefully from beginning to closing day…I had two different buyers that had interesting issues that came up…One got married after applying and before closing on their home loan…They deposited a large sum of money from their wedding into their bank account…Before closing, they had to photocopy each check, front and back, to document exactly where the money came from…While time consuming, it did work out and they closed on their home…

The other, did not realize that buying new appliances and furniture, and charging to your credit cards, could cause a problem…That extra debt on the credit cards changed their ratios and they could not get the home they wanted due to a now higher debt ratio…

Not realizing that your card was “hacked” until tons of charges appear on your statement, could cause your ratios for credit card “maxing out,” to hurt your credit score. A lower credit score will hurt you in getting or applying for your mortgage…You can eventually fix the “maxing out” or identity theft, but how long will that take?

Another worry would be the person who stole your information, opens new accounts and charges heavily on all the new credit cards…In order to fix your credit, you will need documentation proving what you have charged compared to what the “thief” has charged in order to correct through the credit bureaus…Only consumers can fix identity theft. You will have to place fraud alerts on all your accounts and work to clean up every item on your accounts…

So, if this really happens to tons of people who are trying to buy homes or even re-finance, it definitely could cause delays and upheaval in the housing and mortgage industry…

Here is a website that allows one free credit report a year:

https://www.annualcreditreport.com

Hopefully the credit card industry will rally around and come up with a better credit card system that will protect the consumer from this happening again…


© Copyright 2020 LynnPurcell.com
St. Charles, IL Website Design by Victoria Lantz
St. Charles photos courtesy of Michael Kappel
View our Privacy Policy   Site Map