Although Interest Rates Plunge, Credit Reporting System Prevents Many Borrowers From Seizing Opportunities
According to Rodney Anderson, the country's top producer of FHA/VA loansand the fourth highest producing loan originator, 45 percent of the 1,701 loanapplications he received between June and September 2008 had borrowers with atleast one medical collection account. "In evaluating these loans, we uncovereda huge injustice against the American public," says Anderson. "The tragedy isthat the collection accounts, even those that have been paid in full, arelowering these individuals' credit scores, often to the point that they eithercan't qualify for a loan, or will have to pay higher interest rates if theydo."
A nationally acclaimed mortgage and credit expert, Anderson regularlyappears on WFAA Channel 8 Good Morning Texas, and the Evening News of CBS 11and TXA 21. He also has a weekly radio show to discuss the mortgage industryand provide consumer advice. He explains that medical collections areparticularly problematic because of four main issues:
-- Medical billing is a notoriously error-prone arena
-- Many individuals with medical collection accounts never received thebill in question
-- Medical collection accounts customarily remain on a credit report forseven years after the individual has settled or paid the account in full
-- Medical collection accounts can reduce a credit score by as much as 100points, sometimes more.
"The issue of medical debt plagues the patient-physician relationship, tothe detriment of the health of the patient," says Texas-based cardiologistFred Maese, MD, FACC. "The way the system is set up, there's no incentive forpatients to settle their accounts quickly. Once the collection account hitsthe patient's credit report, that consumer is held hostage for up to sevenyears, whether they settle the account or not."
"Based on our extensive research, we can surmise that nearly half ofAmericans have at least one medical collection debt that's lowering theircredit score," says Anderson, who uses analytical software to evaluate creditreports and determine how borrowers can best improve their own credit scores.In doing so, he found that medical collection accounts are routinely reducingborrowers' credit scores by 60 to 100 points or more. "This is disastrous newsfor loan applicants, especially since earlier this year Fannie Mae and FreddieMac started requiring higher credit scores to qualify for loans, and loanservicers of FHA and VA loans have implemented additional credit score-basedpremiums," he adds.
Anderson, a vocal advocate and educator in the credit arena, has initiateda petition to create a federal law mandating the permanent removal of a paidor settled medical collection account from the consumer's credit report within30 days of settlement.
"I've seen many hard working, conscientious individuals who diligentlyaddress their monthly obligations, but because they unwittingly incurred amedical collection account, are forced to settle for a mortgage rate that'shalf a percent higher than if they'd never had that collection account," addsAnderson. "That half point can translate into thousands of dollars in wastedmoney, and that's only for a home loan. They can also expect higher rates forauto financing, credit cards and insurance. That's a hard pill to swallow forthe many individuals who were never notified of the initial billing and whohave since paid the collection account in full. In this market, whereinterest rates and low home prices present the ideal time for buying, we needto make sure that individuals who deserve credit, get it."
More information on the Credit 911 Medical Relief Bill is available athttp://www.rodneyanderson.com/credit/medical_collections.php .
About Rodney Anderson
Rodney Anderson is the executive director and senior managing partner ofRodney Anderson Lending Services in Plano, TX, a division of Supreme Lending,a nationwide broker/banker with over 100 branches nationwide. Rodney has over25 years of experience, and is the #1 FHA/VA lender in the country, the toporiginator in the state of Texas, and the #4 originator in the United States.A renowned mortgage and credit expert, Rodney hosts a weekly radio show andfrequently appears on WFAA Channel 8 Good Morning Texas, and on the EveningNews of CBS 11 and TXA 21. For more information on Rodney Anderson, pleasevisit www.RodneyAnderson.com or call (972) 985-5208.PRESS CONTACT: Rosalie Berg Strategic Vantage Marketing & Public Relations (305) 971-5352 PR@StrategicVantage.com
SOURCE Rodney Anderson
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