March 4, 2009 | The Big Biz Show with Sully and Russ T. Nailz | Attorney Adam Fullman addresses current credit risks faced by consumers and how Lexington Law’s services can help in navigating the credit system.
Sully — … from the Lexington Law firm on. I got so many dang e-mails. We’re bringing him back, plus I’m going to bring him on T.V. So give another Big Biz Show welcome to Adam Fullman. Hey Adam, how are you buddy?
Adam — Doing well, how are you doing?
Sully — Hey, so listen. First of all, my question to you, and let’s talk about this. Lexington Law firm is a general service, what they call a consumer advocacy law firm, and you guys have helped half a million clients take action on their credit since, what, 1989, 1990, something like that?
Adam — Since the early nineties, yeah. Those numbers refer to our entire collection of lawyers across the nation.
Sully — Well, that’s cool. Now, in this marketplace, and I want to review again what exactly you guys do because I think it’s important to check in…
Russ — You should all realize that this man was an extern. So, you don’t get to the top just being an intern. You got to go above and beyond to be the extern.
Sully — Where here’s the deal is that, we are looking at a real estate stimulus package that is implying that if you don’t pay your mortgage for three months, then we’re going to help you out. I gotta believe there’s going to be a lot of credit problems coming in the future Adam.
Adam — Yeah, I foresee some serious problems for quite a few people in the coming future. Obviously, right now we have people worried about where they’re going to be sleeping with their children if they don’t pay their bills or get some help in the next couple of months. And that’s the immediate issue, but we’ve also got these same people and a lot of others, millions and millions of others, that are going to be paying for the current economic downturn for the next seven years, or possibly longer depending on whether or not certain creditors decide to cheat on the way that they report dates. But that’s a different story. You talk about seven years of being punished. Now, the good news is, that there are going to be a lot of people out there in the same boat, and lenders are in the business of lending to make money, so someone is going to come up with a way to extend credit to those people. The problem is a lot of them are going to be predatory lenders.
Sully — Well, and we talked about predatory lenders earlier in the week. What I talked about last hour was; I was going to ask you, do you think the credit standards are going to drop a little bit? Because, doesn’t that put us in the same position that we’re in?
Russ — Like is 650 going to be the new 750?
Sully — I mean 650 last year was “A paper”, was it not Adam?
Adam — No, 650 wasn’t, but three years ago you could really get, you could get an amazing deal on a stated income loan with any score that was above 700 and that’s where a lot of people got in trouble because a lot of them did not realize that their broker was stating an income three times as high as it actually was. But, in the future, honestly gentlemen, I cannot tell you what’s going to happen. We’ve got regulation that’s getting involved now. Federal government is getting involved. I’m not sure what is going to be the new 720 or the new 750 three years from now. I’m very interested to see what will happen.
Sully — ‘Cause if it drops, doesn’t that just put us right back where we’re at right now? I mean, easing credit standards is what got us here in the first place, right?
Adam — Well, what put us here is not necessarily the easing credit standards as much as it was a frenzy to just get as much money out there, and an assumption really that the real estate market will never go down, will never flatten out, and will always go up. That’s really, honestly a question for a different expert, but that’s really what got us into the current problem. And basically, it’s a perfect example of why your credit score and you credit history is really a bogus way of deciding whether or not you are credit worthy. It works to the advantage of people who really should not be obtaining a six-bedroom house in Mission Viejo, which those of you who may be in different areas is a nicer area to live in Southern California, and it also works to the detriment of people who are good credit risks but the story told by their credit history or their credit score is misleading. That’s exactly the problem
Sully — So, let’s talk about both scenarios. When you say the advantage goes to what side now, the guy trying to buy the six-bedroom house?
Adam – Yeah, I mean, and that’s what would happen. We got a young couple, they get married, they’re doing okay, they’re making some money, they’re regularly employed, they were careful, they did all the right things, they got their student VISAs with five hundred dollar limits while they were at the university and they went ahead and paid on those and they weren’t late. And just because of the way that the credit scores and the FICO® scores are calculated, they’re 26 years old now, they’re making a little bit of money, but their scores are great, which is great for them, and they walk into a mortgage broker and he says, “Wow, you’ve got 750 credit scores. We can put you into a mansion.. And they make collectively, between the two of them, $55,000 a year. That’s really what happened to a lot of these people.
Sully — Yeah, so on the other side of the fence…
Russ — If you spend some time on the planet you end up like, oops, I didn’t pay this or this went into a lawsuit situation and I’m taking a hit from a collection agency. They juxtapose my Social Security number. I have to undo that. Then they look at that credit score and they say, “Nope, you can’t…”
Sully — No, you’re right. Adam, stay right there. Adam Fullman is our guest. He’s with the Lexington Law firm, a general consumer, a general service consumer advocacy law firm. These guys help people take action on their credit. We’re going to talk about the other site. How credit can be misrepresentative.
Russ — And if he’s going to start defending murder charges.
Sully — ‘Cause you’re going to start killing bankers in a minute.
Russ — You’re going to get some more work Adam.
Sully — Alright, Adam will be with us in just one second. He, by the way is the Directing Attorney, including all the paralegals and everyone working for him, they employ over 400 people across the country.
Russ — He’s an extern
Sully — I’m loving that. He was an extern. You don’t get that… you can’t buy that. You can’t teach that. Come on. Russ and Sully on the Big Biz Show.
Sully — Alright, back to Adam Fullman, Lexington Law firm. Hey Adam, what is you guy’s website over there?
Adam — www.LexingtonLaw.com
Sully — LexingtonLaw.com. Now tell us a little about your last scenario. Last break we were talking about how sometimes, obviously the young folks making so-so money but have great credit because they haven’t had any life experience.
Russ — Not old enough
Sully — How does it penalize the other folks that are, let’s say you are a 40 year-old couple…
Russ — Had a couple kids
Sully — Making some money
Russ — Going to the second house now
Sully — You say the way the credit system works now does not benefit those people which happens to be most of our listening audience. Tell us about that.
Adam — Well, I’m reminded of the situation that Russ told I think last time I was on. I think it was a medical bill. He didn’t really get notice of it and next thing you know, it’s in collections. One thing that I mentioned there, perfect example, right. He has the money to pay this bill. This is not an indication of a man that’s in financial trouble. This is an indication of a clerk who doesn’t bother to send him the bill at the proper time.
Russ — That’s exactly it
Adam — So, it goes to collections. Now it’s being reported on his credit report as a collection account which is an R9. It’s really the worst thing you can have next to a bankruptcy on your credit report. And then he calls up and says, “Hey, this shouldn’t have happened. I’ve got money. Here’s a check. I’m going to pay.. But the problem is, now it gets reported as a paid collection account which was, this man used to be a deadbeat last year. Well that’s still an R9.
Sully — But he paid it.
Adam — It’s still an R9. So he continues to be punished for seven years. Again, this is the result of someone who lives their life, and has a child that goes to the emergency room. These are the things that happen and they’re not a proper indication of your credit worthiness.
Sully — So what’s gonna… is there going to be anything that changes this stuff. Because it just, it does seem unfair how these things go. I mean, is there any legislation on the books, or anything in light of these economic times that’s going to make anything different Adam?
Adam — I have not seen anything in the works to change the way that the system is operated. The credit reporting system is operated mostly by three major credit bureaus. These are private companies. They’re not government agencies. They have incredible databases that would rival the NSA, but they are private, for-profit companies. They are regulated by the Fair Credit Reporting Act and the good news is there is something you can do to take control of it, and of course that is what we do at Lexington Law firm, and it’s a pretty simple process. It’s enforcing the rights that you have and that is that you can challenge these items, and under the appropriate basis, and I know we don’t have a lot of time here so I can’t go through the whole process, but there’s something you can do. To answer your question, I would love to see something be done regarding the way the credit system works, but at this point, it looks like it’s going to be more of the same.
Sully — Okay, well tell you what, Adam’s going to be in town here as soon as we can get him, get our schedules aligned. In fact we did have him scheduled for T.V. until you screwed it up with your schedule. So we’re going to get him back again. We’re going to give him a full half hour on the program and let him kind of go through that stuff. Adam, throw your phone number out there for us would you buddy?
Adam — Sure, 800-341-8441. And that’s the number to Lexington Law Firm.
Russ . And these are credit answers you can give out, not necessarily only for California, but these are worldwide, right?
Sully — That’s right.
Adam — I am referring to Federal law when I talk about credit repair.
Russ — Thank you.
Sully — Adam Fullman is our guest. LexingtonLaw.com. Adam, thanks so much buddy. Nice job as usual.