News & Notes Archive - October 2007
Repairing your credit rating before you shop for a home–success tips from one very savvy homebuyer
Texas resident Larissa Hersom is a divorced mom who’s raising her three children while putting herself through school (computer science). Recently she moved into a new $75,000 Clayton home, doing so after completing a well-executed plan to clean up her credit rating so that she could qualify for financing. She also purchased both Grissim guides (“I studied them before I made my purchase, and they were a big part of my success.” —Thanks, Larissa!). She kindly gave permission to print her story here. This is one very savvy woman, and her advice is well worth passing on:
About my credit: I thought I would use a "credit repair" company, but as in all things, I first did my research. And I found 99% of the companies were fraudulent or were charging you for something you could do for yourself, better, for free.
My first step was to go to www.annualcreditreport.com, the only legitimate way to receive your credit report for free (as required by law) once a year from all three of the major agencies — Experian, Equifax, and TransUnion. What I discovered was mind boggling. I had accounts listed I'd never heard of, accounts that were past the 7 year reporting limit, accounts listed over and over again by the different companies that had bought and sold my debt (making it appear as if I had 4-5 past due debts, when in reality, it was only one account), not to mention mistakes in my name and social security number to boot! In addition, other than student loans paid on time and a car I had paid off perfectly, I had no positive credit history. So, the plan had to be twofold — clear up as many negative credit listings as I could, and build a new positive credit history.
With the help of an amazing self-help site called www.creditinfocenter.com, I learned just how to do this. With careful planning, letter writing campaigns, arranging to pay 2 or 3 accounts with the agreement they would be erased from my report, and keeping documentation of all changes and correspondence, I was able to remove 28 negative listings from my report! You heard that right — 28 — at this moment I have merely 3 negative listings, 2 of which expire next year.
CreditInfoCenter also gave advice on how to build good credit. I immediately applied for a secured MasterCard with www.orchardbank.com after learning of their low APR (14.5%), low annual fees, and easy web management of the account. (Too many companies prey on the poor and desperate and charge "activation fees" and "annual fees" and "management fees" to the tune of several hundred dollars to get their cards!) I also went to my bank, purchased a CD, and then used that CD as collateral on a loan to build a payment history. After about 6 months of clean up and building positive credit this way, I was able to start qualifying for lines of unsecured credit. Again, the website mentioned above has forums where people share their experiences, so I was able to learn which companies were more lenient than others.
Now, a year later, I have multiple positive lines of credit. In the end, my credit score was about 680, which was good enough to qualify for my home loan with Vanderbilt Mortgage (owned by Clayton Homes, Inc.)
Two things to keep in mind: it's not easy, and it's not instant. The companies that prey on the desperate claim they can work miracles overnight, and that is just plain false. It took years to mess up my credit; it was going to take time, diligence, careful financial planning, and just plain paying my bills on time to get it fixed.
Interview: 15 minutes with...Richard St. Onge
Note: In my role as an industry observer and consumer advocate I speak with people at all levels of the manufactured home industry (MH) to gain insights I share with my readers to help them be better informed. Some I have interviewed for a one-page column that runs in an industry trade publication. In return the magazine runs an ad for the Grissim Guides. No money changes hands. I insist on this. Aside from book sales, I neither solicit nor accept a dime from the industry, and my readers have my assurance I intend to keep it that way. Here’s this month’s interview:
Richard St. Onge of the Institute for Building Technology & Safety (Washington, DC)
Who: Manager of Quality Audits and Inspections, IPIA Services, for the Institute for Building Technology & Safety (IBTS) under contract to HUD (Office of Manufactured Housing)
Background: Age 61. Born 1946 in CT, raised in Cranston, RI. Attended U. of RI, graduating in ’69 with a BS in Agricultural Technology. Began his career with the Bureau of Land Management during the summer while going to school, much of it surveying land in the rugged, mountainous region of far northern CA. After college, spent two years in the US Army, stationed at Ft. Campbell, KY as a Combat Engineer. Returned to Rhode Island in 1972 and for the next seven years ran the Safety & Fire Protection Program for the Providence VA Medical Center (“where I got into various building, electrical and safety codes”). While there, earned a second degree, a BS in Fire Protection from Providence College.
In ’79, accepted an offer to work in the Manufactured Housing Section of the National Conference of States on Building Codes & Standards (NCSBCS), which HUD had contracted to monitor third party agencies under the Federal MH Construction & Safety Standards Act (1976). “My position was only supposed to last three years, but here we are, 28 years later” (laughs). For the next two decades, traveled almost weekly (“I really enjoyed that—got into some really interesting technical areas”). Married in ’83, (wife Joyce). In 2002, having branched into other arenas apart from MH, NCSBCS spun off its Housing & Building Technology division, creating IBTS as a separate not-for-profit 501(c)(3) entity and transferring to it the HUD contract and its MH staff of 35. IBTS has since become involved in numerous new business areas outside MH, growing exponentially, with a current staff of 150 and three satellite offices (in D.C., LA and WA). The St. Onges have two children: Brad, 44 and David, 41, and two grandchildren.
- Q: Minimizing the acronyms that often bewilder people outside of DC, how would you describe your role?
- A: You’re right! (Laughs.) We’re deeply entrenched in terminology. I’m responsible for monitoring the performance of third party inspection agencies around the country that act as in-plant inspectors. Technically they’re called In-Plant Inspection, Primary Inspection Agencies, or IPIAs. Their job is to inspect at least one phase of every new home’s production, as well as to look at the whole production process to make sure that the quality control system is functioning. In addition, my office also collects a lot of field data that is used by HUD, the Census Bureau and the industry, and compiles an Annual Evaluation Report on each IPIA which HUD uses as a basis for permitting the IPIAs to continue to operate as HUD’s representatives.
- Q: Aside from your role, what else does the IBTS do under its contract with HUD?
- A: IBTS’s Manager and staff deal with and evaluate the Design Approval Inspection Agencies, or DAPIAs. The DAPIAs are responsible for overseeing the builders’ design packages and floor plans, and making sure they conform to HUD standards. Finally, there’s the SAA Program—State Administrative Agencies—tasked with overseeing manufactured housing in the states.
- Q: Back to your bailiwick, who are these IPIAs?
- A: There are 15 altogether. Ten are state agencies: Washington, Oregon, Idaho, Arizona, New Mexico, Colorado, Nebraska, Georgia, Florida and Tennessee. The rest of the states are covered by five private contractors, most of them engineering firms that specialize in product testing and certification in the as-built environment.
- Q: Do they control the issuing of the red certification labels?
- A: They do. Every manufacturer is issued an inventory of labels, usually a 2-4 week supply, but if the IPIA finds that the manufacturer is not building a conforming product, they’re required to withhold the labels until the problem is satisfied.
- Q: But they’re not responsible for enforcement?
- A: Correct. HUD is responsible for that. However, before HUD takes action, the manufacturers and the IPIAs are expected to conduct their own investigations, with the manufacturer taking corrective action as needed. The IPIAs are also required to increase their oversight if their surveillance indicates that the manufacturer is not producing conforming homes.
- Q: That little red HUD label is not only iconic, much of the entire MH system appears keyed to it.
- A: Absolutely. Part of each label fee goes to the state agency administering the HUD regulations, depending on the number of homes built in, or shipped to, that state. The rest goes to HUD. We provide that information. IBTS has been keeping track of all those certification labels since 1976, keeping tabs on their histories, the homes on which specific labels have been affixed, and the first destinations of those homes. Sometimes the labels are lost or misplaced, and when they are, selling the home without them can be a nightmare. Over the years we’ve received a lot of inquiries: ‘Is this a HUD home?’ or, ‘Who made my home?’ or, ‘My label is missing, can you issue a replacement?’
- In response to repeated requests from homeowners, lenders and other interested parties, IBTS now offers a fee—based label verification service. They can now go to www.ibts.org and click on Label Verification, and for a $50 fee (to offset the cost of research and the issuance of a verification letter) they can get a fast answer, usually within two business days. For missing labels, we provide an official Letter of Verification that lenders and government agencies can use. This service is often essential to selling manufactured homes. I’d say at most, we’re unable to identify five percent of the homes we’re asked about—they’re either pre-HUD, park models, or modular homes.
- Q: You’ve mentioned that IBTS has become a whole different entity since its founding. How so?
- A: At one time, HUD was almost all of our business. Today, we’ve managed to branch out into a lot of other things. A few examples: After Hurricanes Katrina and Rita, we became deeply involved in the region’s rebuilding efforts, providing 85 certified building inspectors to Louisiana. We’ve helped individual parishes set up their own building departments, some from the ground up. We’re involved with EnergySTAR ™ Building Certification and Green Building Systems. We’re also providing residential building inspection services for new home construction on 36 military bases across the country. In another national scope effort, IBTS provides commercial plan review, inspection and related services to jurisdictions throughout the United States. It’s been a very good experience these past 28 years. I’ve really enjoyed it.