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Welcome, you are listening to the Financial Survival Network. I'm carry let's your
host. Well, we got a return visit from our good friend Paul Auster,
and we're gonna be talking about new scams. Everything old is eventually new
again, as well as we're going to be getting some insight into the new
rule that the Current and Men has implemented that will effectively enialize credit worthy home
buyers and reward deadbeats just what you don't want to be doing. Paul.
Great to have you back. Hey, just tell us again your website before
we get started. Sure, great to be back. It's better Qualified dot
com. Better Qualified dot com and there's a link to that in the show
notes. By the way, if you've got a question for Paul or myself,
I knew this is a very popular topic what we discuss. Shoot me
an email k l at Kerry Lutz dot com. So, Paul, it's
great to have you back and connect with you. You know, you're one
of my oldest running guests. We've been doing this almost since the beginning when
I started the podcast eleven years ago, and amazing how things have changed.
But some things don't change. So these skimmer things are back again. I
mean they used to nail me on them at the gas stations in yeah,
Miami. Yeah, I mean it's it was worldwide, and it was so
easy because all they had to do was get the data off of that magnetic
strip and it had everything and it was unencrypted, stagnant data. So once
just swiped the skimmer, you know, the identity thieves had everything that they
needed. Moving forward, they went to the chip card, which made it
much much more difficult. But like everything else, the identity thieves and the
bad actors have now upgraded their technologies, so they're back, and they're back
both as skimming, which is where they'll take a device and actually you know,
it's an overlay that they put on top of an ATM machine, any
point of sale device. Gas stations are notoriously bad for this, but the
latest technology is what's called a shimmer, and this is where they actually take
a very small circuit board and insert it inside of the machine. Much harder
to detect it, you know, with just physically looking at a device,
because most of the times they pop the thing open, pop it in,
and close it back up, and nobody's the wiser until they realize that a
lot of their customers data has been stolen. So they're now able to decrypt
and get most of the data off of even the chip cards. A lot
of times they do it in conjunction with a camera that's installed. They want
to see you put in the three digit CVV code, they want to see
you put in any other data that they can grab, and they do that
via very very small cameras. So between those things, believe it or not,
coming out of the pandemic, this type of credit card fraud and identity
theft is exploding and on the rise. Unfortunately. Really that's a real shock
there that it came back again. I can't believe that. And yep there
is a time when and I was getting a new credit card from American Express
once a month was unbelievable. Yeah, yeah, so this, you know,
this goes back to you know, one of the ways that you can
limit your your exposure and your risk. And look if they get and if
you if you use a debit card in this situation, they could literally drain
your account. Um if you use a credit card, which obviously we don't
try and promote because people get themselves in trouble by using the credit card.
But at least the credit card, you know, you're not responsible for any
fraudulent charges um. And in the case of using a debit card, you're
going to get your money back, but typically they will freeze your account during
the investigation, which becomes a huge inconvenience, you know, at that point
in time. So we're we're we're up against you know, these bad actors
and carry One of the things I didn't really grasp was when you look at
Silicon Valley and you look at the tens of thousands of very very smart,
technologically advanced workers that have been laid off. Unfortunately, when they fall on
hard times, they're the ones that are being recruited to perpetrate these crimes and
to advance their technologies on their side. So we're in for some rough waters
when it comes to identity theft and cybersecurity. It's kind of like that movie
Fun with Dick and Jane where they both get laid off from their jobs.
I think it was like George Seagull and yeah, Gaine Fada and then they
become bank robbers. Not really good at it, but they keep improving and
getting better and better at it. Right, absolutely, absolutely, Oh man,
will it ever cease? But the good news is I got a Tesla,
so I never even use a credit card to fill my car up anymore.
Though at least that exposure has been limited in my case. Yeah,
well, I don't know about that. The smarter, the smarter, the
cars, the smarter. You know, those are now open, uh you
know, uh portals. It's like, believe it or not, they were
hacking into refrigerators and think that's connected to the internet. You know, they
can reverse engineer it and somehow gain access to your to your data. You
know. It's always worried that the my refrigerator would turn state's evidence against me.
Yep, that's a little world. What a world? Hey, onto
other things. So you heard about this proposal that's being implemented today. I
believe that will penalize credit worthy borrowers who are seeking a guess, FHA or
federally backed mortgage and reward to the dead beats. Yeah, this is you
know, I am not a fan of this at all. If they wanted
to put forward a program that helped people that had some credit issues, Look,
the pandemic was very unfriendly to everybody. But the reality is to do
it this way, and they've tried to spend it a thousand different ways.
The bottom line here is, on an average let's say three hundred thousand dollars
mortgage, somebody with less than stellar credit. Let's say you're at a six
twenty, right, and then you take somebody who is above a six to
eighty or a seven hundred. The person with the lower credit is going to
save close to four thousand dollars. The person with the higher credit is going
to wind up paying about four hundred dollars more. So really is going to
stay people. This is for only for government backed loans like your your Federal
Housing Authority, your FAJ loans. So if you do, if you get
a conventional loan, then you're okay. The problem with this also is that
the FED, the government, the administration assumed that people who have higher credit
scores have a higher net worth value, and that's certainly not the case.
Income has nothing to do with your FICO score, and they know that on
both sides of the coin here. So to penalize somebody, let's say a
person is making minimum wage, they've been exhausting their resources, they have two
jobs just to make all the pay their bills on time, and they go
to get the first time owned buyer mortgage and they're going to get penalized because
they've actually done what they were supposed to do. This is completely bananas to
me. It's counterintuitive, and it's probably one of the biggest socialized piece of
legislation that's ever been passed, and there wasn't a lot of fanfare out of
it. A lot of people are going to find out when they actually apply
for a mortgage, yeah, that it should go on the closing statement on
the HUD one as a deadbeat tax one hundred percent. Again, you want
to put programs to help foster first time homebuyers, to help the underbanked,
um uh, you know all these different communities. That's great, put those
programs in place, give them incentives, help them out for sure, down
down payment assistance programs, grants. All of that is awesome, But how
did we get to a point where again, this is not taxing the rich
to pay the poor. This is taxing you know, let's call it attack.
This is penalizing someone who has a good credit score to help somebody who
doesn't have a good credit score. And again you could have people that are
are you know, not wealthy either. The same sense is saying socioeconomic status
as the person who's kidding rewarded. Um. Again, this just does not
make sense to me. I hope they actually repeal it and get rid of
it. Yeah. Well, Congress is threatening to override it, and it
seems like both parties are in an uproar over this, which is unusual.
Yeah, just another example of government overreach. Do you think they'll do You
think they'll revoke it or repeal it, override it? I do? I
do? You know? The bank, the banking industry as a whole is
very very powerful. Um. They're the ones that are there screaming and hollering
because it Again, this just does not make sense. Um, So I
think it goes back on the table and again massage it, tweak it.
If you want to help the people that had fallen on hard times and their
credit has suffered because of it. That's a good idea, right again,
I would just do it during the pandemic. If you suffered some financial hardships,
you were you, you know, you miss some bills, you know,
Listen, if you miss one payment, a thirty day late payment comes
on to your credit report, it could easily cost you fifty points. Those
fifty points could wind up costing you hundreds, if not thousands of dollars,
especially when you're talking about a mortgage. So if you want to help those
people, great, but you certainly can't do it by penalizing the people again
who have exhausted themselves to pay their bills on time. Yeah, it certainly
is an outrage. But by any calculation, and it's not a political thing
at all, is now reward people who have managed to get through the pandemic
and eat their credit high Maybe give them a bonus too, because presumably that
these people can get through a pandemic without defaulting on various obligations, they're going
to be a more credit worthy risk one hundred percent. They're the ones that
will ultimately drive the economy moving forward anyway. Way, So this is,
you know, this is just such a negative impact on the people who again
we're doing everything that they possibly could to maintain a good credit score, and
to penalize them for those efforts. Is it just doesn't make any sense.
Yeah, it's just a slap in the face, it really is. It's
not a lot of money or a hundred bucks, but hey, you can
maybe take the family on a vacation for that or a weekend. Yeah,
we can, even if it was even if it was only fifty dollars a
month, right, So fifty dollars a month, six hundred dollars a year,
you know, on a thirty year mortgage. We're talking a lot,
a lot of money. Now, the average person doesn't hold the mortgage for
thirty years. I get that, but some people do. And so we
just look, we're smart enough to figure out a different path and a different
way to help the people. I don't want to say that they deserve it,
but we can certainly help the people that need it the most, and
those are that's certainly people that have suffered, you know, a negative impact
of their credit scores. Your credit score is going to cost or save your
money every single month, whether it's financing, whether it's insurance, security,
deposits, you know, for cell phones and having utilities turned on. It's
going to cost or save you money every single month, relatively speaking. So
the people that you know are are below a seven forty, Actually, it's
all tiered base pricing. So the minute you drive below of seven forty,
you're gonna pay a little bit more. If you're a seven twenty to a
seven forty, you're gonna pay a little bit more than someone is a seven
forty and above. If you're below is seven twenty. If you're between a
seven hundred and seven twenty, you're gonna pay that much more. And it
goes right down six to eighty six to sixty eighty six forty and to a
point. You know, typically if you're below a five eighty, you're not
even going to get approved for the mortgage. And if you do. You
know, people are screaming about the interest rates that they see on the TV.
Well, those rates are for people with a seven forty or a buck
up. If you're a six hundred and the bank has some program that can
get you approved, you're probably paying close to nine percent. Yeah, hey,
give us one tip, one hack. They can help you raise your
credit score without doing a heck of a lot. Yeah, I mean the
easiest way possible. I'll give you two. Hey, you have to build
new accounts, open positive accounts. There's all sorts of credit builder companies out
there. One is called self Excellent Company. The results are great, it
won't cost you a lot of money to do it. And then the other
thing is to pay down that credit card debt because that's, you know,
the second biggest score factor that impacts your scores. So figure out a way
to get out of credit card debt. We say it all the time,
But add new positive accounts to your credit report and you can do that even
if you have lower scores. Credit builder accounts you can get approved, even
if you have a lower credit score. Secured credit cards you can get approved
even if you have a lower credit square. So it's just a numbers game.
You have to you have to skew it in the other direction. You
have to have more open positive accounts than you do negative accounts. All right,
Well, we appreciate you coming on Paul. As always, Hey find
Pulse site, check them out on a better qualified dot com and the Hey
you can find a link to it in the show notes. This interview on
Financial Survival Network dot com. Just click it and you go there. And
while you're there, sign up for a free newsletter. And if you got
any questions, comments, whatever for Paul myself, shoot me an email k
l at Arry Lutz dot com. Paul, great catching up with you.
We'll talk to you again real soon. Thanks so much, Carrie. Bye
now, thanks for listening to carry Lutz's Financial Survival Network, your solution to
today's trying times. For the latest, go to Financial Survival Network dot com.
Financial Survival Network now more than ever,