Beware: These mortgage companies can hurt your credit

Since the launch of this web site just three weeks ago, I have received thousands of messages detailing your credit challenges.  From rising interest rates to credit card limit reductions–I have seen it all.  This valuable information has provided my team and me with a good sample to determine helpful theories.  The NewCreditRules.com team takes the data you provide to us and uses statistics to find patterns, strong correlations, etc. that will help you better manage your credit. 

We are proud that our campaign recently played a major part in exposing the discriminatory data mining actions of American Express.  However, we feel that the company’s admission of guilt and change of heart, as it were, was a diversion to curtail a deluge of bad publicity.  We believe that without proper accountability, the company will simply remove any indication of wrongdoing in correspondence with customers.  In other words, we have much more work to do as such wrongdoing will be more difficult to detect. 

When the New York Times story broke last Saturday, we were in the process of compiling data to identify companies, merchants, and purchase categories that are on the American Express blacklist. That extensive report is forthcoming.  At the same time, we were also compiling the mortgage companies of those customers whose credit lines were reduced. 

During our analysis of mortgage companies, we discovered that certain companies surfaced time and time again in our frequency tables. Without getting too technical, banks and mortgage companies that are unstable had a high frequency while banks that are more stable had a low frequency. 

The mortgage companies with a high frequency are listed below: 

• Bank of America Mortgage
• CitiCorp Mortgage
• Countrywide Mortgage
• GMAC Mortgage
• Quicken Loans

If your limit was reduced recently, please share with us your information via e-mail to help us discover more trends.

Comments

[bad credit auto loans]

bad credit auto loan is a great opportunity to build up your credit score. Given that a car can be important for people to be able to attend work and pay off their loans, dealers and loan companies have established the low credit scores auto loan program to help individuals that have terrible credits avail this kind of loan option.

[Heron]

I hope you'll give us a list of stable banks, too--not that any banks are all that eager to offer people new loans at the moment. It'll be good to have such a list when the economy starts to heal.

[JUDY]

Note to Linda,Please reread your post again as others see it. You are in BIG TIME DEBT.Your salery to debt ratio is 50% PLUS.If I was in the credit card business.I would cut your credit too.Pay off your bills and save.God Bless You

[Edward Weinberg]

After briefly skimming through the latest "Bailout" version, I was unable to ascertain whether the "New Credit Card Rules" would be expedited therein. Am I to assume that all acknowledged credit card abuses (such as reduced credit limits and ongoing raised interest rates) still have not been directly addressed despite Carolyn Maloney and Barney Frank efforts? Isn't restoring credit limits to worthy cardholders the most direct way to boost the economy as opposed to again aiding the banks' poor investments?

[Jason Allen]

Just because Quicken Loans is a servicer now doesn't meant that you aren't on AmEx's blacklist... Perhaps a lot of loans you sold on the secondary market are bad and going belly up... And that doesn't mean that the lines you sold on or before 2007 aren't bad. Just because you are doing well now doesn't say much.

If I were you, I would call AmEx and ask them directly about your status... Good luck.

[Clayton]

Kevin - pardon my addressing my last comment to Efren and not you. I was looking at the name on your last comment.

[Clayton]

Hi Efren

I work at Quicken Loans and found your post through Google, so I thought I'd respond. I just want to clarify for your readers that we don't hold credit lines for our clients, so I'm not sure how we got on your list.

We are a mortgage originator, not a servicer. We write the mortgages and lend the money directly to the client, but then always sell our mortgages on the secondary markets. This is no secret. It's our business model and clearly explained up front to all clients. And to be honest, we haven't been selling lines of credit since August of 2007.

Finally, and again just to clarify with your readers, we are actually doing very well right now (bona fide refi boom going on). We actually just had our biggest month in the company's 24 year history, believe it or not.

Thanks for allowing me to comment. I just wanted to clarify a few things. I welcome you to check out the Quicken Loans blog at http://www.whatsthediff.com

We write about everything on there, so let me know what you think.

Clayton

[efren]

Hello, just read your story, now here is my American Express story:
i have two credit cards from American Express, my Blue amex card and my Costco amex card. i received a notice from amex on 10/05/2008 stating that my Blue card credit limit would be lowered from $55,000 down to $38,800 and my Costco card limit would be reduced from $10,000 to $3,600. i was shocked, but not surprised due to the recent economic downturn, i just figured they were tightening their belts as everyone else has been. What was weird though was the reasoning, they stated it was due to, among the other usual things, repayment history with "others" and "other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express".
A little history about myself, i am single, no dependents, and i work as a Registered Nurse. I have been a nurse since 1990, close to 20 years! In 2008 I made $155,000, my credit score as of 11/2008 is 750, in 06/2008 it was 748. I am not in foreclosure, have never made a late payment, and have never been bankrupt. I have been with my current employer, Kaiser Permenente, for 8 years. Read on as the story becomes even more interesting...
In the first week of January 2009, just 12 weeks after receiving the first notice from amex, i was booking a flight online, using my Costco amex card, it was denied. I tried calling the airline, they confirmed, the card was denied. Now even though my credit limit was reduced, i still had plenty of credit with Amex, so i used a different non-amex card, it went through. I then contacted American Express by phone, the customer service agent told me that he had bad news, that my credit limit had been reduced, a SECOND time! I was livid, attempted to speak with a supervisor, the gentleman transferred me to another customer service agent named Ashley (ID# NARB324), she refused to let me get past her, stating that there was no supervisor there. Ashley informed me that my Blue Amex credit limit was being reduced to from $38,800 to $34,200, that is $2,000 BELOW my current balance, the same with my Costco amex card, the credit limit there was being reduced
from $3,600 to $2,500, again, $800 BELOW my current balance. I thought for sure there was a mistake, but Ashley stated that Amex does review all accounts quarterly and that again, my shopping habits have come into question as does other reasons. I asked for those reasons and informed Ashley that my employment status as well as my recent credit score were excellent, Ashley stated that the specific reasons were confidential and that i would be receiving a written notice shortly.
So, as you can see, American Express had now lowered my credit limits well below what my actual outstanding balance was currently, making me appear as if i went over my credit limit, a sure way of receiving a ding on my credit report!
As far as my employment, nothing has changed, in fact i just received a 5.5% raise. I am still single, no dependents, no danger of going into foreclosure, have made no late payments and have never defaulted. In fact, the only charges that i had made in the months between American Express' first and second notice was to shop at Costco and Ebay, booked flight on Jet Blue and stayed at a Best Western hotel, cheers

[Linda]

Never a late payment, always paid way over the minimum and then paid $2000 in a lump sum so that I could get this card paid off sooner. Result - BOA lowered my limit and raised my interest rate as well. It took quite a few calls and struggles because like AMEX they don't really want to talk to you, but I was finally able to negotiate a lower rate with them as long as I agreed to not use my card until the balance was down to the new limit they gave. Since AMEX and BOA, among others, like to treat their good customers so poorly perhaps we should just walk. They must not care if they have less business.

[Sonya]

Beware Capital One Auto Loan holders:

American express listed one of the ridiculous and unfounded reasons for lowering my credit limit on an Optima card from $40K to $8200 as:

"The overall credit risk associated with customers who have auto loans(s) from the lender(s) listed on your credit report".

I would assume this is an Amex "black list" company. I have had an auto loan with Captial One for 3 years so I guess all of a sudden they are a RISK!!! -- I've never been late on any payments and always paid above and beyond the minimum car payment. What a joke!!

[Timothyphx1]

Note:
GMAC Mortgage also includes;
Homecomings and Ditech

[Jason Allen]

Both of my loans are with Quicken Loans. I've got one for my primary residence and one for my rental. I guess I am on their radar for high risk. That explains a whole lot now. AmEx has reduced my lines twice in less than a month. Well, there isn't much you can do about that except change your credit card company... Changing your mortgage company isn't so easy these days... Never thought I would have the mark of the beast because of my mortgage company.

[Timothyphx1]

Quote from Adverse Action letter.
"Other customers who have acquired their residential loan from your mortgage lender have a poor repayment history with American Express"

[LH]

Just read this and saw BANK of AMERICA. They are also doing the following. If you have a loan with them they lower the credit amount you qualified for months but RAISE the INTEREST RATE, even though you have paided on time and paying extra. So BEAWARE.