One of the questions we hear from members is “Will a short sale damage my credit?”

In short, yes.  In fact, there’s no real credit rating advantage to a short sale over a foreclosure.  Credit will be negatively impacted after both.  Your lender will report the financial loss as a major derogatory event on your credit record whether it’s a short sale or a foreclosure.

Here’s the difference:

A foreclosure occurs when a homebuyer doesn’t make their monthly payments on a mortgage loan.  The lender then uses its legal right to foreclose on the home and take possession.  The home is first offered for sale at auction.  If there are no buyers willing to pay the opening bid, the house reverts back to the lender.  The lender will use a traditional sale process and apply the sale proceeds to the unpaid mortgage balance to recover all or part of the loan amount.

A short sale is selling your home for less than the balance of the mortgage loan.  The mortgage lender must approve this option in advance after the homebuyer provides a letter of hardship, proof of income, assets and bank accounts, along with a comparative market analysis to prove that the local property market does not support selling the home for the full mortgage loan amount.

There may, however, be differences in how a short sale and foreclosure impact your life and credit score.

Here’s why:

When a lender forecloses, credit may be more severely damaged than with a short sale because of the impact of ongoing late payments prior to foreclosing.  In a short sale, often the borrower hasn’t missed a payment.
In a short sale, the homeowner controls the transaction and can remain in the home through a traditional realtor-involved transaction.  The lender is able to avoid the costly and lengthy process of a foreclosure and the borrower is able to avoid the unpleasant process of an eviction and a public sale of their home.

One big advantage in a short sale is how you may appear to a prospective lender.  Credit bureau scoring models and lenders tend to be more forgiving if the loan is marked “settled,” as in a short sale, compared to a record of “default,” as in the event of a foreclosure.  For a little perspective, in the event of a foreclosure, Fannie Mae and Freddie Mac typically won’t lend to you again for five years.  However, in a short sale, that timeframe shortens to two years.

If you are struggling to make ends meet or are considering a foreclosure or short sale, we encourage you to reach out to your lender now.  The sooner you act, the more time and flexibility you have for resolution.  Fully explain your situation to your lender. Your lender doesn’t want your house, they want your payments. Show them you’re making an effort toward repayment and ask for options.

If you’re having difficulty making payments on a first or second mortgage loan with us, call one of our specialists for help. To determine the best way to assist you, we will work with you to review your financial situation and identify your options.  Complete a Financial Worksheet and fax to (925) 609-3262.

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by Chris, Vice President, Lending

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Again this year, the IRS is making fraud and identity theft a top priority.  They’ve ramped up their efforts with additional staff assigned to identity theft related issues and are significantly increasing their capacity for investigations.  In 2012, their investigations were responsible for nearly 500 criminal indictments.  Even with all of these efforts and improvements, however, tax identity theft continues to be on the rise and, ultimately, the burden falls on you to protect yourself.

Typically, we see tax scammers commit fraud in two ways.  A tax scammer can steal your statements, W-2s and other personal financial information and beat you to filing your own return.  They request that your refund is sent to them, often in the form of a pre-paid debit card, which can be used just like cash.  Or, they can steal tax returns being sent by mail and use the extensive personal information included to commit identity theft and open credit in your name.

Here’s how to avoid becoming a victim:

Expect your tax forms. W-2s and tax forms must be sent by January 31st each year; however, they could arrive anytime in January.  If you don’t receive your forms, reach out to your financial institution to find out when they were mailed.  Many institutions offer an electronic tax form option, which may be safer than mail.  If you suspect fraud, call the IRS Identity Protection Specialized Unit at 800-908-4490, ext. 245.

Expect your tax refund. Typically, the IRS will issue your refund in less than 21 calendar days of receiving your return.  Knowing when to expect your refund is a good way to combat theft.    The IRS offers a “Where’s My Refund?” online tool and mobile app so that you can track your return.  Information is updated daily.

The IRS does NOT email or text. Don’t fall prey to fraudulent IRS emails or text scams.  Attachments and website links contained within IRS emails could contain viruses or fraudulent methods to collect your personal information.  If you receive an email from the IRS, forward it to phishing@irs.gov.  They will pursue the source, if possible.

Choose direct deposit. Avoid the risk of lost or stolen checks by opting for direct deposit.  Our Routing/ABA number is 121181743.  Here is more information about setting up direct deposit with us.  For more information or help with direct deposit, call a member service representative at (888) 858-6878.

Carefully choose your return method. Filing online is a safer option than by mail.  If you choose to file by mail, do not put your tax return in an unsecured mailbox, a community mail drop or an outgoing mail bin at work.  Instead, take the return to a post office.  For extra protection, you may opt for certified mail.

Beware of suspicious pop-ups. If you are filing taxes online, be aware of out-of-the-ordinary pop-ups asking for personal or financial information.  This could be an attempt to steal information for you.

For more information, IRS.gov Help and Resources is a great source.

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by Michelle, AVP, Operations

Your employer or the government agency that issues your payroll checks is responsible for establishing direct deposit on your behalf. Typically, you’ll complete a form providing relevant information from your financial institution and they’ll do the rest.

To initiate Direct Deposit to your Checking Account, you’ll need two things:

Routing/ABA number
The MICR number from one of your checks

To initiate Direct Deposit to your Savings Account, you’ll need three things:
Routing/ABA number
Your member account number
The suffix of the deposit account

1. Routing/ABA Number
The Routing/ABA number is comprised of the first number series at the bottom of your personal check, as indicated above. Our Routing/ABA number is 121181743.

2. Account Number
Your account number is the 5-7 digit number that you use to identify your account when you call a member service representative or login to BranchLine.

3. MICR Number
Your checking account MICR number (pronounced “micker”) is a cross-reference number that identifies your checking account to processors. The MICR is used for enhanced security so that your account number is not printed on your checks. The MICR is the second set of numbers following the four leading zeros. In the example above, the MICR is 0000076. You can omit the leading zeros when using this number.

4. Suffix
The suffix is a two-digit number following your account number. It is unique to each account type you have with us. You can find the suffix in BranchLine, on your statement, or by calling us.

If you don’t have personal checks, or you need additional help determining your direct deposit information, call a member service representative at (888) 858-6878. We answer the phone within 30 seconds and we’re always happy to help.

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by Anne, Phone Center Manager

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Currently, retailers pay credit card companies a percentage of their transactions to accept and process credit card payments. A recent court settlement between the credit card industry and retailers now allows retailers the option to pass payment processing costs to consumers who pay with a credit card. This ruling went into effect January 27, 2013.

Not all states are affected. Due to state laws, merchants are not allowed to impose a credit card surcharge in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma or Texas.

Here are more surcharge details:

The fee may be imposed on credit card transactions only.  Debit transactions are not involved in the agreement.

The fee cannot be more than the merchant actually pays to accept credit cards.  That amount ranges between 1.5% and 4% of the transaction amount.

The fee must be clearly disclosed at the store entrance and where the payment is being accepted.  When using an online retailer, the surcharge must be posted on the website’s homepage.

The notice must include: the amount of the fee; that the fee is being charged by the merchant; and, that the fee does not exceed the merchant’s cost to accept credit cards.

The fee amount must appear on your receipt and may be referred to as either a surcharge or checkout fee.

Here is more information from Visa.

For more information, please call a member service representative at (888) 858-6878.

by Jenna, Vice President, Operations

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It’s the time of year for pink balloons, red roses, French restaurants and chocolates.  Sounds expensive, right?  Think again.  Here are a few tips to keep Valentine’s Day in your price range.

Set a budget.
It’s a good start to put a price on it.  Limit your spending to $20 – or even less.  Get creative!  Frame a picture, hand make a card or bake a cake.

Eat in.
How about Costco surf and turf?  Dim the lights, light a candle and put the kids to bed.  Plus, you won’t need to pay an expensive babysitter.  You can have a nice dinner at home without denting the pocketbook.

Smell the roses.
How about flowers from your garden or a friend’s?  The sentiment is there and the smell is still in the air.

Treats.
Make a homemade dessert.  Even a boxed cake can be romantic with a heart-shaped stencil on top.  Your sweetheart will appreciate the thought and you’ll appreciate the $3 price tag.

Be thoughtful.
Only you know your Valentine, that’s why thoughtful gifts always reign supreme.  She may prefer her favorite childhood candy or a trip to the ice cream parlor to a giant box of fancy chocolates.  He may prefer a bag of Cheetos and a six-pack of premium beer.  Let each other know that you remember!  Add a bow and a note and you’ll score major points.

The Valentine’s Day Fund.
Start a savings account with some seed money and schedule regular contributions to celebrate your love in another way.  You may save enough for a weekend getaway or a dinner at your favorite spot.

Remember that the holiday isn’t about spending money – it’s about being with the people you love.  You can still be the romantic at heart and the mastermind of your budget.

Happy Valentine’s Day!

by Kristin, Vice President, Marketing