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‘I have $4 to my name.’ An extended eviction ban isn’t enough for some struggling renters

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Jordan Mills and her husband Jonathan Russell with their daughter Valkyrie. The family was evicted from their home in San Antonio, despite providing a CDC declaration to their landlord. | Courtesy CNN

(CNN) — Millions of struggling renters will likely be protected from eviction — at least for another month.

The stimulus bill that was signed into law by President Trump late Sunday night extends a national ban on evictions until January 31. The moratorium, which was put in place by the Centers for Disease Control and Prevention in September to stop the spread of the coronavirus, was initially set to expire at the end of this month.

The package also provides $25 billion in emergency rental assistance.

Should the package go through, neither of the measures will likely be enough to keep the most at-risk renters in their homes past January.

“While extending the CDC eviction moratorium for just one month is insufficient to keep people housed for the duration of the pandemic, the extension provides essential and immediate protection for millions of renters on the verge of losing their homes in January,” said Diane Yentel, president and chief executive of the National Low Income Housing Coalition.

An estimated 9.2 million renters who have lost income during the pandemic are behind on rent, according to an analysis of Census data by the Center on Budget and Policy Priorities.

Once the moratoriums are lifted, many of these renters will be expected to pay their entire back rent or come up with some sort of payment plan with their landlord — or they could face losing their home.

CNN Business spoke with several renters who have been struggling to afford their monthly payments as a result of the pandemic.

Kelly Green said she has a roof over her head only because of the CDC eviction moratorium. | Courtesy CNN

‘Money is piling up against me’

Kelly Green, who lives in a $1,429-a-month apartment in Daytona Beach, Florida, has not been able to pay rent since September.

“The only reason I have a roof over my head is because of the eviction moratorium,” Green said.

Green makes her living selling rhinestone- and sequined-biker apparel at motorcycle rallies and other festivals.

After the shutdown in March, there were no festivals, no events and she had no income. Still, she cobbled together her savings, stimulus payment, rent relief and unemployment insurance payments and managed to get current on her rent through July. But she didn’t know how she’d make ends meet after the $600 a week supplemental unemployment support ended.

Green heard about a coronavirus-related rent relief fund offered by Volusia County, where she lives. She applied for assistance and was awarded $4,500 for three months’ rent.

“I thought, ‘Great!’ that will pay a few months’ rent, and I can move out in November when my current lease is over and I’ll still have a good credit rating that will allow me to rent myself another apartment,” she said.

But there was a snag: The Volusia County rent assistance program requires tenants to have been current on rent as of March 13, 2020. Green was behind on her rent in February and, as a result, her apartment complex wouldn’t accept the aid.

Without that money, Green was unable to pay full rent for October, November or December. And since she overstayed her lease in November, she’s now on a month-to-month lease that is $500 more expensive a month.

“Even if the moratorium is extended, money is piling up against me,” she said. “What would help me the most is if I receive a check for rental assistance for three months, that they take it.”

She knows it doesn’t make sense to stay and watch the amount she owes grow, but she said she doesn’t know where she’ll go without putting friends and family at risk of coronavirus exposure.

“It totally depresses you,” she said. “You feel like giving up. Where will I go when the CDC order expires, and I have this eviction on my record?”

Have to be out by Christmas

Mercedes Darby lives in a three-bedroom apartment in Nashville with her three high school-aged children and her daughter, Princess Thomas, who is in college. The two usually split the rent. But since both were laid off in March, they have not been able to afford the $1,250 a month rent since April and currently owe $9,000 in back rent and fees.

Even though Darby provided her landlord with a CDC declaration, which protects the family from being evicted for non-payment, they are now being evicted for a separate lease violation — Darby’s name is not on the lease.

Darby says the lease is in Thomas’ name, but she has been living there since they got the apartment a year and a half ago together and she has been making payments all along.

After missing a December 15th eviction court date, there was a default judgment giving the family 10 days to leave. So Darby is packing everything she owns to put in storage.

“We have to be out by Christmas Day or they will have the sheriffs in here,” Darby said after the ruling. “With no money, I have to find a temporary place.”

Darby was laid off from her job handling member services at a large insurance company in March. She had been looking for a new apartment since July. But even after paying the application fees, she was repeatedly turned down because of her credit history and a prior bankruptcy. Now her daughter is likely to have trouble, too, because of this eviction.

In November, Darby was rehired to a similar job and money has been coming in again. But she now has to pay a lot more in fees and deposit money for an apartment because of her history.

“I have a good paying job,” she said. “I make enough, if you didn’t want triple the amount upfront.”

For the time being, she’s looking for a place for her family to stay through the holidays while she finds a more permanent home and prepares for her court date in February on the back rent she owes.

“We don’t have anywhere to go,” she said. “We don’t have family here and our friends can’t take all of us. I’m going to try to find a hotel. But that will take all the money I have to put toward another apartment.”

Bryan Clift with his daughter Iyla. Clift has been out of work since March and is behind on rent on his apartment in the suburbs of Minneapolis. | Courtesy CNN

Waiting for rent relief

Bryan Clift’s work as a waiter in suburban Minneapolis dried up last March, at the same time school for his 10-year-old daughter Iyla moved online. Iyla’s mother, who she did not see regularly, died a few weeks ago. Now Clift is about $2,000 behind on rent and they are in danger of facing eviction.

“My daughter is everything I got,” he said. “I put her ahead of everything. Making sure she has a roof over her head and food on the table is the most important thing.”

They fared okay through the summer, with the unemployment insurance payments he received. But when the $600 in weekly supplemental payments expired, he feared he would fall behind on his $1,500 a month rent for the two-bedroom apartment.

“When I saw my savings go down I went to talk to the leasing people, who I’ve always had a good relationship with,” he said. “I said I’m going to try to do my best. They suggested I apply for some rent relief.”

He has applied for and expects to receive relief money from Prism, a local social services nonprofit. But it is not in hand yet.

“It is a waiting game,” he said. “If you’re going to ask for any aid right now it will take a while.”

With this anticipated support, he’s hoping to bridge the gap in income until he can work again.

“I could go get a job now,” he said. “I want to. I don’t like sitting around. But without the schools open, I can’t go to work. If something doesn’t change for me in the next few months, what am I going to do? I pushed back every bill that I can. And this rent relief will help, but for how long?”

Any additional help from the government is welcome, he said, but, “I could do without the stimulus check if I had better unemployment, because you can stretch that out longer.”

Evicted despite CDC protections

The worst already happened to Jordan Mills and Jonathan Russell and their two-year-old daughter Valkyrie.

Even though they were protected by the eviction moratorium, a court granted an eviction anyway.

Mills thought she did everything right. She provided the CDC declaration form protecting her from eviction to her landlord. She applied and received rent relief money from the city of San Antonio. She even made a payment plan.

“People like me are still being evicted for non-payment,” she said.

She made a payment arrangement with her landlord, but fell behind by about $450. The property owners filed for eviction citing a violation of one part of the CDC declaration in which Mills agreed to use “best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit.”

Mills drove to the courthouse to appear at her eviction hearing, but says she was unable to attend because she did not have money to pay for parking.

“I couldn’t afford parking, it is all $20,” she said. “I’m literally living hand-to-mouth. I got paid yesterday. I have $4 to my name.”

In May, Mills, who is an assistant manager at a payday loan company, had seen her hours cut. She realized her family was not going to be able to pay their rent along with their high utility bills during the Texas summer.

She applied for and received rental assistance money, a lump sum of $3,500 for three months rent.

When Mills contracted coronavirus, she said, their child care provider dropped them as a precaution and her husband left his job as a security guard to care for Valkyrie full-time, further cutting their income.

After the court ordered their eviction in November, they didn’t wait for the sheriff to arrive. Mills borrowed $1,400 from her mother and moved her family out of the three-bedroom, single-wide mobile home they rented for $1,175 a month and into a 470-square-foot, one-bedroom apartment in San Antonio.

The family’s new apartment is in a building known as “second chance” leasing, for people with evictions or bad credit.

Mills paid dearly for that second chance. In addition to the $750 a month rent, a $299 deposit and a $300 pet deposit, she also had to pay a $650 risk fee because of her history.

“The worst has happened,” she said. “But I’m still afraid how it will affect me when I go to rent somewhere bigger, somewhere more safe. We have roaches. I don’t want to stay here.”

While she appreciates the rent relief they received, she said more rent assistance should go directly to landlords.

“If there was something for them, they wouldn’t be so quick to turn on the tenants.”

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When Can I Get an Auto Loan After a Repo?

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There’s nothing saying you can’t apply for an auto loan immediately after a repo, but the tough part is actually being able to qualify for the loan. Since many auto lenders don’t approve borrowers with a repo that’s less than a year old, you may have to consider in-house financing.

Repossessions and Your Next Car Loan

Unfortunately, most traditional auto lenders don’t work with borrowers that have a recent repo on their credit reports. When we say traditional, we’re referring to lending institutions such as banks, credit unions, online lenders, and the captive lenders of some automakers. These lenders often require a good credit score and clean credit reports.

Where does that leave you? Well, likely in-house financing is the next logical step if you need a car loan after a repossession.

More on In-House Financing

Buy here pay here (BHPH) dealerships use in-house financing. This way of auto financing involves working with the dealer who’s also your lender. There’s no need to find a third-party lender or preapproval – the dealer takes care of all that. This setup can be convenient, and often, borrowers are able to walk away with a vehicle the same day they first set foot on the lot.

Since these dealers may not check your credit reports to determine your eligibility for auto financing, your recent repossession generally isn’t an issue. If you can meet income requirements, prove you have stable work, secure auto insurance, and prove your identity, you might get into a vehicle after a repo with in-house financing.

Here are a few more details on in-house financing:

  • Used cars only – BHPH dealers only offer used vehicles. However, used cars are a good option for bad credit borrowers. They’re almost always less expensive than a brand-new car, and affordable is a good price when you need to get back on your feet after a repo.
  • Anticipate a higher interest rate – Without a credit check, lenders are taking a risk approving a car loan without knowing much about your credit history. To make up for this, they tend to assign higher interest rates. A high interest rate may be considered a good trade-off for an auto loan with bad credit in many cases, especially if you heavily rely on a vehicle to get by.
  • Credit repair may not be an option – If you get an auto loan with a lender that doesn’t check your credit, it’s a possibility that your on-time payments aren’t going to be reported to the credit bureaus. If you want to repair your credit with a car loan, ask the lender about their credit reporting practices before you sign on the dotted line.
  • Down payments are required – Few things are certain in the auto lending world, but one thing you can count on is needing a down payment if your credit is less than perfect. BHPH dealers often require a down payment of up to 20% of the vehicle’s selling price.
  • Prepare your documents – While a BHPH dealer may not check your credit, they’re likely to ask about your income and possibly your work history. You need proof of income to qualify for a car loan, no matter what lender you work with, so prepare at least a month of computer-generated check stubs. If you don’t have W-2 income, have copies of your last two to three years of tax returns.

Looking Forward After a Repo

When Can I Get a Car After a Repo?After one year, your auto loan options open up a little bit more and you’re more likely to qualify for a subprime car loan. Subprime lenders are equipped to assist bad credit borrowers. These lenders offer you a chance for credit repair because they report their loans and work with poor credit borrowers.

If you need a vehicle quickly, a BHPH dealership could be your first step in getting back on the road. Once some time has passed, and your repossession loses some impact on your credit reports, you can try for an auto loan that has the potential to repair your credit.

Here at Auto Credit Express, we know a thing or two about bad credit auto loans, and we have a nationwide network of dealerships that assist bad credit borrowers. We aim to match consumers to dealers in their local area that help with credit challenges. If you’re in need of auto financing, start right now by filling out our free auto loan request form. We’ll look for a dealer in your local area at no cost and with no obligation.

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Pros and Cons of Subprime Lenders and Loans

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A subprime loan is primarily a type of loan offered to borrowers that don’t qualify for conventional loans and are considered high risk due to various factors such as low income, significant outstanding debt, and low credit score.

These loans can also be called bad credit loans because they are the same; that is, they are only offered to people with heightened risk factors.

What is a Subprime loan?

Subprime loans are your type of loan that is generally offered to people who have heightened risk factors such as limited credit history, low income, low credit score, etc.

Unlike a conventional loan, subprime loans have high-interest rates. Technically, most of these loans have a subprime loan counterpart, including mortgages, auto loans, personal loans, etc. However, even though there is no official credit score cutoff for borrowers, people who have a credit score below 650 usually have a more challenging time getting approved for a conventional loan. And that’s where subprime loans enter the conversation.

Of course, getting approved for a loan depends on several factors. But, the most integral part of being approved for a conventional loan is a passing credit score, which some people don’t have. If you’re just starting to build your credit, this could be disadvantageous to you since you will have a hard time getting approved for conventional loans.

That said, subprime loans were created to help those with poor credit scores to acquire a house, car, financial assistance, etc. Such loans have different features that vary from lender to lender. However, most subprime has two traits in common: higher interest rates and high closing costs.

Types of Subprime Loans

If you’ve done your research on subprime loans, you can see that each subprime loan varies from lender to lender. But in actuality, there are three main types of subprime loans.

Subprime Home Loans

Mortgages, in reality, can be categorized into two main groups, mainly prime and subprime mortgages. Prime home loans are what you call conventional home loans that are the ones that you commonly see in the market. Subprime home loans are just prime home loans that have a slightly higher interest rate in simpler terms.

Subprime mortgages can be categorized into three main groups: adjustable rate mortgages, fixed-interest mortgages, and interest-only mortgages. Typically, subprime mortgages are only given to people who have credit scores below 650.

Subprime Auto Loans

Just like the case with subprime home loans, subprime auto loans are just your conventional auto loans, albeit with a higher interest rate. However, nowadays, it’s harder to get approved for a subprime auto loan because lenders are more strict in the assurance that the borrower will not default the loan.

To combat this uncertainty, most lenders nowadays are offering subprime loans with longer repayment periods to ensure that the borrower will repay them. Some lenders have a period that lasts for 69 months, and some go as far as 84 months.

Subprime Personal Loans

Personal loans are typically unsecured, which means they don’t require any collateral, making it risky for lenders to offer subprime personal loans for obvious reasons. You might as well opt for secured loans to have a lower interest rate instead.

Pros of Subprime Loans

Subprime loans usually have a poor image because of their higher interest rates. But they are not all that bad as there are also benefits to them. The most obvious benefit of subprime loans is that it’s easier for people to qualify for a subprime loan even though they have a poor credit score or little credit history. This means that it will be more convenient for people to build their credit if they’re just starting.

Since you can use a subprime personal loan, it will also be easier for people with bad credit to consolidate their debts, improving their credit score. This will also make their payments easier and manage their finances better. Subprime loans can also enable people who are just starting to build their credit to become homeowners or buy a vehicle when they couldn’t opt for conventional loans.

Cons of Subprime Loans

Since subprime loans carry huge risks for lenders, they counteract this by giving them higher interest rates. And the resulting scenario is the person defaulting the loan because they can’t keep up with interest.

Not only that, but subprime loans also carry a lot of fees such as processing fees, closing costs, up-front fees, etc. These can add further to your debt, which can be a real burden if you’re on a budget.

Takeaway

Subprime loans are not to be trifled with if you don’t know what you’re getting into. Before you apply for one, ensure that you have exhausted your options to get a conventional loan. Also, do your research first before taking out a subprime loan. Balance its pros and cons and ensure that you won’t be taking a huge loss in return. Lastly, subprime loans should be taken as a last resort, not your first choice.

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Call a Reconsideration Line for a Second Chance at a Credit Card

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Illustration for article titled Call a Reconsideration Line for a Second Chance at a Credit Card

Photo: F8 studio (Shutterstock)

Getting rejected for a credit card can feel like a low blow, especially if you’ve fallen on hard times. But you still have a lesser-known, last-ditch option available—the reconsideration line, which allows borrowers to appeal their rejection directly with their lender. Here’s how to use it.

First, understand why you were rejected

Your credit card application can be rejected for a number of reasons, like a bad credit history, low income, outstanding debt payments, having too many credit cards, and employment history. By law, card issuers must give you a reason why your application was rejected, so read your rejection notice carefully and know why you were turned down.

Some of these reasons can be obvious: As an example, you wouldn’t expect to qualify for a premium credit card with a high limit if you have a terrible credit score. However, since the initial application is automated, a lot of borderline cases simply don’t qualify for credit. Fortunately, that’s where reconsideration lines kick in: You can call an actual human on the phone and make your case for approval—if you’re lucky, they’ll overturn the rejection.

Prepare for the call

There are no guarantees, but if you plead your case as a responsible potential customer, the lender might be convinced. Prepare for the call by knowing your outstanding debts, income, and credit score. If you’re rejected because of your credit score, you have the right to request a free copy of the credit report used by the lender within 60 days. Review the report and look for errors (they do happen). If you find any, dispute them and mention this in your call. Otherwise, be polite, as the person on the other end of the line is under no obligation to reverse the lender’s initial decision. Hopefully, after pleading your case, your application might be accepted, after all.

Reconsideration lines for major banks

Below are the phone numbers for dedicated reconsideration lines (if available), although note that they tend to change frequently. If your bank isn’t on the list, call their customer service number and ask if there’s someone you can talk to. Also, make sure you call within 30 days of your rejection, as applications typically expire after 30 days, forcing you to apply again (and incur a hard pull on your credit history, which can lower your credit score).

  • American Express has a reconsideration line that can be reached by calling 1-800-567-1083, Monday to Friday from 8:00 a.m. – midnight ET, and 10:00 a.m. – 6:30 p.m. ET, on Saturday.
  • Bank Of America used to have a dedicated reconsideration line but it looks like calling 1-877-721-9405 during business hours is your best option.
  • Barclay’s reconsideration line is 1-866-408-4064 and can be reached Monday through Friday, 8:00 a.m. – 5:00 p.m. ET.
  • Capital One doesn’t have a dedicated reconsideration line, but you can try general customer service line, 1-800-951-6951, or application services, at 1-800-625-7866, during normal business hours.
  • Chase has a reconsideration team can be reached by calling 1-888-270-2127 between 7:00 a.m. – 10:00 p.m. ET, Monday through Friday, and 8:00 a.m. to 1:00 p.m., ET, on Saturdays.
  • Citibank can be reached by calling 1-800-695-5171, between 8:00 a.m. – midnight ET, every day.
  • Discover doesn’t have a reconsideration line, and they don’t have a reputation for overturning rejecting credit card applications, but you could try their 24-hour customer service line, 1-800-347-2683.
  • US BANK doesn’t seem to have a dedicated reconsideration line anymore, but you can call 1-800-947-1444 (Monday through Friday from 8:00 a.m. to 8:00 p.m. ET, and Saturday from 9 a.m. to 6 p.m. ET).
  • Wells Fargo has a reconsideration department that can be reached by calling 1-866-412-5956, between 9:00 a.m. – 9:00 p.m. ET, Monday through Friday, or by calling 1-800-967-9521, between 8:00 a.m. – 7:00 p.m. ET, on Saturdays.

This post was originally published in 2013 and has been updated Jan. 20, 2021 to include updated information.

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