With the Coronavirus pandemic, major banks are allowing clients to skip payments for April. In this episode, Merrill Chandler refers to one of his Facebook Lives, which consisted of a Q&A session where he was presenting the Miss-a-Month Program. When answering a concern from someone on the validity of banks allowing them to skip payments for the current month, Merrill elaborates on these miss-a-month payment offers given by tier two and three banks. As you listen and/or read further to Merrill’s wise coaching on how you can live your funding life during this crisis, decide if you should take advantage of this offer or not!
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Lender “Miss-A-Month” Payment Offers
How To Win While Lenders Are Watching
As you may have noticed, things are definitely hopping around here! Now, I don’t know what’s going on in your neck of the woods…or even when you’re reading this blog. Some of my readers binge them as soon as they come out. Others spot check first to discover the titles that are appropriate for what they’re interested in. In this episode, we’re going to be referring back to one of my Facebook Lives. It was a Q&A session where I was presenting what we have affectionately called here, in our production studios, as the Miss-a-Month Program. This is important because the COVID-19 pandemic has created major panic, and almost everybody has been asking things like, “Banks are offering to let me miss a payment. Banks are saying they’re not going to charge interest. I get to miss three months and my credit will be fine. Should I take advantage of this?” We’re going to be covering all of these. The reason why this is becoming a show is timeless. What I cover in this Miss-a-Month is off the charts! It contains wise and intelligent coaching for you on how to live your funding life, whether we’re in a worldwide pandemic or in times of abundance and prosperity. We’re going to drop right into the Miss-a-Month episode of the show.
I want to thank you guys for all of the commentaries that are going on in the different Facebook channels. As a community, we’re buying together. I’ve been watching some of you answer each other’s questions, and I love seeing the solidarity because it proves that we are in this together…even though we’re all isolated and feel like we may be on our own! I want to address one of the questions that came in because it was perfectly stated, and we’ll pick up every single piece along the way. I’ve done heavy research on some websites and other places that will speak directly to this. Vivian says, “Merrill, I was wondering if you could address this topic in your next daily recap. All of my credit card companies including Chase, Bank of America, and Citibank are letting people skip payments for April, saying that they will reset my account. I checked my online statements…and it does in fact say that no payments were due in April.”
She’s following all the instructions we’ve talked about. “When I asked how they’re going to report this to the credit bureaus, they weren’t sure. They kept telling me that they were going to report it as no payment due, and you told us to please keep paying if we can afford to. The issue is, at some point, I’m fine and I have a paycheck, but I’m not sure for how much longer. I’m worried about cashflow and being able to afford the essentials going forward. If I do lose my employment, I truly believe a lot of people are in the same boat. This would be a helpful topic.” Vivian, this is spectacular! Let’s address that. Some of this stuff addresses repeating topics that we’ve already discussed, so I want to bring it all to bear here. Most of the major banks (including the tier twos and even the tier threes), Capital One, Citi, JPMorgan, and Chase…are giving concessions to cardholders who are suffering financial hardship due to Covid-related issues. When I go to my Facebook or my Wells Fargo account, it says, “If you’re unable to make your payment due to COVID-19-related hardships, we’re offering a three-month suspension.”
To request this assistance, they say, “Click on a button and email us through our secure message center. We’ll send you a letter via US mail within 7-10 days with all the details outlined for your particular situation.” I’m not filing these, so I don’t know the results yet. When they say, “Outlined for your particular situation,” it is likely that they’re doing an account review. If your account passes muster, they will accept you for the moratorium. If they don’t pass muster, then you don’t qualify. It also says, “If you set up automatic payments with Wells Fargo,” which, for my students and clients as part of the bootcamp, we recommend certain specific circumstances to do so. They’re not going to stop the automatic payments. You have to stop them yourself.
They’re even saying, “If you set up automatic payments with Wells Fargo or another bank, like bill pay or something like that, you’ll need to stop these payments manually.” Be specific in your questions, because what Vivian is asking is highly relevant to all of us! If you get a hardship accommodation, ask that your payments be marked current on your credit file rather than delinquent. We’ve mentioned this…but you have to ask that specific question. When Vivian asked, she was told that no payment is due. To my understanding, there is a switch you flip on accounts that says no payment due for automatic underwriting. I’m assuming manual underwriting as well, and in account reporting.
I’ll show you an example of mine from the past…but with 30 days late of delinquency, I’m not going to risk my financial reputation. One person says, “I need it in writing.” If you even see it on the website, take a screenshot of it for your records because many aspects of this are part of an automatic process. It’s like a machine. You make your payment, it gets credited, then the review software comes by, sees the date that it was done, and reports that on the next reporting date to the bureaus. The bureaus then show other lenders, “They were paid on time. Paid as agreed or late.” So you have to make sure that you ask.
Do you need to do it? That’s our number one question. Every single time I’m going to start our conversations this way, lenders are going to approve you based on your situation. They’re always going to watch it. If you need to take advantage, I’ll be sharing here what I call the Hierarchy Of Financial Needs. We’re going to be sharing some of those steps. If you are in survival mode, and need to protect your family and your home, then credit is not the thing. If you need to withhold payments so that you can buy food, make the right call. We want to keep our relationship with our banks and lending partners in the cleanest, clearest way possible.
It’s a short-term experience that we’re going through, maybe 3 or 6 months. It could even be a year, but it’s not going to be 2, 3, or 5 years. We will come out of this. After 2008, we were already moving forward by 2010 and 2011. Everything was back in play! For my real estate investor friends, note-buyer friends, and entrepreneurs, everything was an opportunity if we had the resources to do so. If you burn your business and your banking relationships, you’re going to be hit for years to come…probably a minimum of four and likely more, depending on your situation. So do you need to take advantage of it? Find out what the bank requires. In this one, you have to apply.
It isn’t like they’re saying, “No,” but in Vivian’s case, she went to Chase, Bank of America, and Citi. I even pulled it up with Wells Fargo. You see that there may be differences, so take your time. My roommate and dear friend Riley…I’m here at my home, and I hear him on the phone with banks all the time, so we discuss it with each other a lot! He’s an amazing example of a real estate investor who’s experience is vast with single-family, fix and flips, buy and holds, and commercial, as well as multifamily. He’s on the phone talking to banks about what their programs are so that if he has to take advantage of it, he knows what the rules of engagement are.
If he doesn’t have to take advantage of it, he knows that he wants to preserve and then I help him prioritize. As I’ve been telling you…prioritize! If you have to go late on something, or take a moratorium on a payment, choose wisely for those. In my case, I would take a moratorium on a secured installment loan before I would take a moratorium on a revolving account because, since it’s secured, it doesn’t move the needle as much with the credit bureaus, the lenders, etc. It’s secured with real estate, automobile, or otherwise. Choose wisely which ones you’re going to do with your credit cards, especially your tier ones (Wells Fargo, Citi, JPMorgan, Chase, and Bank of America). Those are the ones you want to hold off the longest you possibly can with because those are your tier ones!Prioritize your future relationships with lenders as much as you are prioritizing what's happening these days #GetFundable Click To Tweet
They are super valuable. That’s why we’re going to be picking up business lines of credit or other credit instruments as we continue to build out of this downturn and start moving into the upturn! Let me share with you a chapter in my new book. We sold out The New F* Word in 30 days of our first printing, so thank you! I just want to acknowledge that it was amazing, but I want to read something out of here in the new edition. It’s on a new page. I added two chapters to the new edition. Whether you have a copy or not, I’m giving the book for free!
If you’d like a new one shipped to you, go ahead and re-order. It’s GetFundableBook.com and you only have to pay for the shipping. I’ll then send you a new one. It’s probably going to be 2 or 3 weeks until you can get your hands on it (since we are finishing the printing and shipping), but the printer is going to get it back to us shortly. The book cover is the same, but the contents…I even have some cool stick figures in there illustrating some of the points! I’m proud of what we’ve created. Years ago, I was first introduced to this Miss-a-Month marketing strategy, completely by surprise. The credit union where I had a car loan would send me a holiday gift each year saying, “Happy Holidays! Your payment for this month, December, is not required.”
This is what we’re talking about, and everything we’re doing (the fine print) would indicate the terms. My credit rating was the reason why I qualified for the offer. That’s the same thing that I read on the Wells Fargo website. Let’s take a look at your situation. My credit rating would not be negatively affected. Interest would still be charged for the month, but it would be added to the end of the loan. Again, this was an auto loan. You have to find out what they’re going to do with the interest because they’re accruing that interest. If you’re not making any payments on 90 days, but they’re accruing interest, this is a pro-lender move to offer us. Find out if they’re charging interest on that month and also if they’re adding it to the end of the loan. Those are the things that you’ve got to look at.
This is ancient technology, but we’re just bringing it up. We even used it in 2008. When it comes to a moratorium, or a suspension of payments, the rules of engagement are incredibly important. Here are the points. Find out if you qualify. You have to qualify! Number one is: do you need to take advantage of this? Number two is: if you choose to do so, make sure from number one to do your credit cards last and secured first, if you have to do it. Secured loans are less sensitive, both in the score, etc. You’re going to ask about either your loans or your revolving accounts. You’re also going to find out what the terms are for missing a payment. Does it affect your credit report? What happens to the interest? Those are the five important points to keep in mind.
The first one is deciding whether you need to or not. The others are all due diligence. You need to figure out if you qualify and what the terms are. What happens to your credit score? How are they counting the interest, etc.? The times where we are under pressure is when we discover who we truly are. After all the niceties are set aside, we find it in our relationships, with our children or parents, with our team members at work, with our employees, and more. You’re showing up in a particular way, and that is what you’re going to be known by.
When we talk about fundability™ building, we always say that we’re building our reputation and partnerships with the banks. But your spouse, children, parents, etc. are going to know not only who you genuinely are, but how you show up in these situations as well. Sometimes, if it gets worse, we may have to step into our hearts and our humanity. I want to be the voice. I’m a realist, and I’m open to the possibility that we are taking a deep dive…but in every way I want me, my team, my loved ones, along with you and your loved ones, to be able to come from deliberate and strategic decision-making.
I’ve tried to give you the five steps. What are the strategic steps? With each and every one of those steps, you need to decide if you need to do it. I hope you are prioritizing your future relationships with lenders as much as you’re prioritizing what’s happening within these days. If you need to protect everything, make the choices that support you. I know that we will get through this! In fact, I’ve had a few clients who’ve emailed it in. They’ve been either out to pasture or they haven’t been paying attention to this. They reached back out saying, “This is going to be another 2008 and I’m not ready. What can we do to get ready?” And I respond with, “It should have been kept going for the last year, but since you’re here, let’s go!” This is going to be a huge opportunity, so protect your financial reputation with your partners, credit bureaus, credit reporting, business partners, teammates, and loved ones. Protect your reputation above all! And don’t forget to be kind, generous, and supportive of each other while we are on this journey together. This is Merrill Chandler…your friend, your coach, and also your cheerleader in making sure that we do this and do it well! Have a great day, and we’ll be checking in soon!
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