Building a Better Financial Future CreditSmart Training for New Instructors SESSION #3 Thinking like a lender and Avoiding credit traps

Transcription

1 Building a Better Financial Future CreditSmart Training for New Instructors SESSION #3 Thinking like a lender and Avoiding credit traps MARCH 22, 2017 Freddie Mac

2 CreditSmart Freddie Mac strongly supports the benefit of credit education and building sound financial literacy skills among consumers. Well-informed and well-prepared homebuyers are on the best path to enjoying successful and sustainable homeownership. As part of this ongoing commitment, Freddie Mac developed CreditSmart Español, a multilingual financial education curriculum and consumer outreach initiative designed to help consumers build and maintain better credit, make sound financial decisions, and understand the steps to sustainable homeownership. Freddie Mac 2

3 Your Producer - Carolina Valderrama Affordable Lending & Housing Outreach Senior. Manages the CreditSmart Program Responsible for training and education of Industry professionals Educates borrowers about alternatives to foreclosure Works with servicers and housing counseling agencies to support affordable and sustainable homeownership Graduate of Nicholls State University with a degree in Mass Communication. Holds a Post graduate degree in Paralegal Studies from The George Washington University and an Accredited Mortgage Professional Designation from the Mortgage Bankers Association. Freddie Mac 3

4 Certificate of Completion Eligibility Register and attend all sessions under your registration link, not that of your colleague. You must login via your laptop or desktop. GoToWebinar is not able to track your participation if you re login via your cell phone. Must take and pass a 10 question post-webinar test with a score of 80% or higher. Respond to chat and poll questions, we encourage your participation. Freddie Mac 4

5 Your Presenter - Cora R. Fulmore Manager/Owner of the Mortgage & Credit Center, LLC Creator of The Counselor s Corner, Inc. an online training center for housing professionals, with more than 4,000 members Co-organizer of the first Florida Housing Counselor Network, statewide More than 35 years of experience in mortgage & credit counseling and training National Consultant for many organizations, current faculty member of NeighborWorks since 1994; provide training in the area of: ü Certification for ED s and Program Managers ü Housing Counseling Certification ü Foreclosure Prevention ü Credit Counseling CreditSmart trainer since 2001 Disclaimer: I ve made every effort to provide updated information for this presentation. However, today presentation is not a substitute for you staying abreast of industry changes and updates. Freddie Mac 5

6 GoToWebinar Platform Toll Number: Access Code: Webinar ID: A survey will pop up at the end of today s webinar - please complete Your pop-up blocker must be disabled to view and complete the survey We appreciate your feedback! Freddie Mac 6

7 4-Part Series + Bonus Class SESSION #1 SESSION #2 SESSION #3 SESSION #4 BONUS CLASS CS Introduction and Money Management Basics 2:00 PM - 3:30 PM EDT Building, Maintaining and Restoring Your Credit 2:00 PM - 3:30 PM EDT Thinking like a lender and Avoiding credit traps 2:00 PM - 3:30 PM EDT Preparing for Homeownership and Avoiding Foreclosure 2:00 PM - 3:30 PM EDT Super Charging your Credit Counseling Program 2:00 PM 3:30 PM EDT MARCH 8, 2017 MARCH 15, 2017 MARCH 22, 2017 MARCH 29, 2017 APRIL 5, 2017 ALL CLASSES ARE ON WEDNESDAYS CERTIFICATE ISSUED ONCE YOU HAVE TAKEN AND PASSED 10 QUESTION EXAM AFTER THE FINAL SESSION *YOU MUST ATTEND ALL 4 SESSION* BONUS CLASS IS OPTIONAL Freddie Mac 7

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9 Crossword Puzzle Challenge Freddie Mac 9

10 Crossword Puzzle Challenge DOWN 1. 4-letter acronym for the law that gives you the right to know what information is being distributed about you by credit reporting agencies Freddie Mac 10

11 Crossword Puzzle Challenge DOWN 1. 4-letter acronym for the law that gives you the right to know what information is being distributed about you by credit reporting agencies 1 f c 4 2 r a Freddie Mac 11

12 Crossword Puzzle Challenge ACROSS 4. Do not make promises you cannot keep. Be. 1 f c 4 2 r a Freddie Mac 12

13 Crossword Puzzle Challenge ACROSS 4. Do not make promises you cannot keep. Be. 1 f c 4 2 r a e a l i s t i c Freddie Mac 13

14 Crossword Puzzle Challenge DOWN 2. It could be a warning sign of credit problems if you are spending more than percent of your monthly net income to pay back credit cards and other loans (excluding a mortgage). 1 f c 4 2 r a e a l i s t i c Freddie Mac 14

15 Crossword Puzzle Challenge DOWN 2. It could be a warning sign of credit problems if you are spending more than percent of your monthly net income to pay back credit cards and other loans (excluding a mortgage). 1 f c 4 2 r e a l i s t i c a w e n t y Freddie Mac 15

16 Crossword Puzzle Challenge ACROSS 5. Obtaining a credit card may be one way to begin restoring your credit if it has been damaged. 1 f c 4 2 r e a l i s t i c a w e n t y Freddie Mac 16

17 Crossword Puzzle Challenge ACROSS 5. Obtaining a credit card may be one way to begin restoring your credit if it has been damaged. 1 f c 4 2 r e a l i s t i c a w s e n t y c u r e d Freddie Mac 17

18 Crossword Puzzle Challenge DOWN 3. Credit companies may promise you the world and may further damage your credit. 1 f c 4 2 r e a l i s t i c a w s e n t y c u r e d Freddie Mac 18

19 Crossword Puzzle Challenge DOWN 3. Credit companies may promise you the world and may further damage your credit. 1 f c 4 2 r e a l i s t i c a w s e c u r e n e t p d y a i Freddie Mac 19 r

20 Crossword Puzzle Challenge ACROSS 6. Put yourself on the payroll. Pay yourself. 1 f c 4 2 r e a l i s t i c a w s e c u r e n e t p d y a i Freddie Mac 20 r

21 Crossword Puzzle Challenge ACROSS 6. Put yourself on the payroll. Pay yourself. 1 f c 4 2 r e a l i s t i c a w 6 f 5 3 s e c u r e n e i r s t p y a i r d Freddie Mac 21

22 So Let s Get Started Freddie Mac 22

23 Homework Assignment Pull a copy of your credit report for review. Did you find any errors? Save all pre-approved offers between now and the final class. How many have you received? What is the median credit score in your state.? Freddie Mac 23

24 Homework Assignment How many Federal Consumer Protection laws are there? 57 Consumer Protection 25 Competition Act Freddie Mac 24

25 Learning Objectives As Learners: Who are the players at the bank. Understand how lenders and other financial institutions determine creditworthiness Identify ways you can prepare to buy and own your own home Utilize the skills you have acquired to remain a successful homeowner and maintain your good credit As Trainers: See how CreditSmart can be used in introducing participants to how banks operate. Gain an awareness of the CreditSmart modules that help prepare consumers for successful homeownership Demonstrate new teaching techniques Introduction to Get the Facts Freddie Mac 25

26 Two Hats Learner Trainer 40% 60% Freddie Mac 26

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28 Educational Track Three Thinking like a lender and Avoiding credit traps Module 4 Banking Services: An Important Step Provides the basics of banking and the importance of establishing a relationship with a financial institution Module 7 Thinking Like A Lender Discover how lenders and other financial institutions determine creditworthiness Module 8 Avoiding Credit Traps Provides valuable information on how to avoid credit traps, identity theft, and predatory lending practices Freddie Mac 28

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40 4 C s of Credit Capacity Is there sufficient income to repay the loan. Capital Refers to cash reserve, investments and/or assets that could be made liquid. Credit The credit history is reviewed to determine a potential borrower s willingness to repay a debt. Collateral Looks at the value of the property that will be pledged as security for the loan. Freddie Mac 40

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42 Housing Ratio Lenders also looks at affordability Ratios are used to make this determination Housing Ratio = Front End Ratio Debt to Income Ratio = Back End Ratio Products determine the ratio Common product ratio: 28% for Housing Ratio 36% for Debt to Income Ratio Freddie Mac 42

43 Audience Chat What s the average pay scale of the clients that you are counseling? Freddie Mac 43

44 Audience Chat What s the average pay scale of the clients that you are counseling? This addresses CAPACITY Freddie Mac 44

45 Polling Question: With a Gross Monthly Income of: $2, Using a housing ratio of.28% What is the maximum (PITI) housing payment? a.$ b.$ c.$ d.$ Freddie Mac 45

46 Polling Question: With a Gross Monthly Income of: $2, Using a housing ratio of.28% What is the maximum (PITI) housing payment? a.$ b.$ c.$ d.$ Freddie Mac 46

47 VA Financing The Department of Veterans Affairs helps servicemembers, veterans, and eligible surviving spouses become homeowners. The Servicemen s Readjustment Act, (GI Bill of Rights), which dramatically transformed the concept of veterans benefits, was signed into law by President Franklin D. Roosevelt on June 22, Among other things, this benefit provided veterans with federally guaranteed home, farm and business loans with no down payment. The Veterans Administration (VA) is not a bank. The VA does not loan the money, fund the loan, or service the loan. VA "stands behind" the loan by guaranteeing a portion of it. If something goes wrong and the borrower can't make the payments anymore, the lending institution can come to the VA to cover any losses they might incur. Freddie Mac 47

48 VA Financing Here are some of the best benefits in comparison to other loan programs: Reusable it can be used over and over again Flexible a Veteran can have more than one VA loan at a time Versatile a Veteran can purchase with another Veteran or even a non-veteran Zero down payment required No Private Mortgage Insurance (PMI) The VA Loan is Assumable There is a lower risk due to the government guaranty so lower interest rates Freddie Mac 48

49 VA Home Loan Buying Process Contact a HUD-approved housing counseling agency to prepare for the homebuying process. A list of HUD-approved housing counseling agencies in your area is available at Secure a Real Estate Professional who knows how to work with military servicemembers. Find a participating VA lender. Get a Certificate of Eligibility (COE). Find a Home and Sign a Purchase Agreement Freddie Mac 49

50 FINANCE $ Freddie Mac 50

51 _A _A_ ONE WORD Freddie Mac 51

52 Chat Clue This term refers to cash, investments and/or assets that could be made liquid. Freddie Mac 52

53 _A _A_ ONE WORD SPIN Freddie Mac 53

54 CAPITAL ONE WORD Freddie Mac 54

55 Chat Clue A method money is electronically transferred into an account Freddie Mac 55

56 R E_O T TWO WORDS Freddie Mac 55

57 DIRECT DEPOSIT TWO WORDS Freddie Mac 57

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60 Traps & Scams Credit card fraud is an ever increasing evil we have to deal with. The Internet has made it easy for fraudsters to trick us with traps and scams, the best line of defense is knowledge. Freddie Mac 60

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70 Complaint categories making up the top 10 list Freddie Mac 70

71 TOP 10 INTERNET SCAMS Freddie Mac 71

72 Foreign Lottery Scam You receive what looks like an official from a foreign lottery corporation. The subject line offers a congratulatory announcement, and may include the supposed amount of money you ve won. Freddie Mac 72

73 Survey Scam This common scam looks innocent enough. You ve expressed interest in social issues, such as global warming or the war in the Middle East, and you ve been sent a survey that requests your input. When you click on the link to take the survey, malicious spyware or malware is installed on your computer. Freddie Mac 73

74 PayPal or Online Credit Card/Banking Scam You will receive an that appears to be from PayPal or your credit card company or bank with a warning message such as, Act now, or your account will be deactivated, or Security breach on your account. Freddie Mac 74

75 Mystery Shopper Scam This common work-from-home scam attempts to suck you in with an featuring a subject line promising you a large income, simply by working as a mystery shopper. You need no experience or education, and you can make up to $200 to $300 a day doing just what you love: shopping! Sounds too good to be true, right? Freddie Mac 75

76 Nigerian Check Scam You receive an from an a royal-sounding person with the name of Sir Arthur Von-Monsoon, or Barrister Frank N. Stein with a request to help recover large sums of money from an overseas bank. As a reward, you ll receive a handsome cut of the cash. Freddie Mac 76

77 Hijacked Profile Scam You re contacted by a Facebook friend that says, Hey if you have time, give me a call? When you message them back there s a response saying I ve got a wonderful business opportunity for you. Followed with a couple of links to click on. DON T CLICK! Freddie Mac 77

78 Quiz Scam You see the quiz on your friend s profile, click on it, and enter your cell phone number as instructed. The quiz pops up, you take it. When next month phone bill rolls around, you re shocked to learn that a $9.95 fee has been added to your bill for some dubious monthly service. Freddie Mac 78

79 Suspicious Photo Scam One of your friends, whose account has been hacked, posts a link on your page with a message such as, OMG! There s an incriminating picture of you on FB? Freddie Mac 79

80 Hidden URL Scam Beware of blindly clicking on shortened URLs. You ll see them everywhere on Twitter, Facebook and in s, but you never know where you re clicking through since the URL hides the full location. You could be clicking a link that installs malware on your computer. Make sure you have real-time protection against spyware and viruses. Freddie Mac 80

81 Chain Letter Scam You ve probably seen chain letters tweeted or ed to you about someone donating money to a particular charity if you forward this tweet or . Spammers use this to get s for further spams and possible malware attacks that can affect your computer if you click on a link within the . The best advice is to break the chain by not re-tweeting or forwarding and don t click through any links. Freddie Mac 81

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83 Education Techniques Maintain an informal atmosphere Act as a facilitator - not the expert Relate the material to real life situations Post the AGENDA and refer to it Incorporate a variety of training materials and techniques Freddie Mac 83

84 Education Techniques Build on earlier statements Encourage sharing & discovery Give participants time to evaluate their learning Maintain a setting of trust Be yourself and have FUN Freddie Mac 84

85 Bright Ideas Use show-and-tell items or props to make examples more real and relatable What show-and-tell props did I use? Provide tools to assist in applying new knowledge What tools did I use to reinforce points made? Test progress and check for understanding What did I use to test your understanding? Share a story of hope or inspiration What story did I share to give hope and/or inspiration? Freddie Mac 85

86 Homework Assignment What is the current rate for 6mth, 1 yr and 5yr CD being offer by a local bank in your area? What is the minimum unsecured loan amount offered by your local bank? Identify two alternative banking sources in your community. What is the down payment requirement for a first time homebuyer in your area? Identify two down payment assistance (DPA) sources in your community? Freddie Mac 86

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88 Don t Forget to Freddie Mac 88