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 was a Q and A session where he was presenting the Miss-a-Month Program. 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. Decide if you should take advantage of this offer or not as you listen further to Merrill’s wise coaching on how you can live your funding life in this crisis.
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Lender “Miss-A-Month” Payment Offers
How To Win While Lenders Are Watching
Things are hopping around here. I don’t know what’s going on in your neck of the woods. I don’t even know when you’re reading these blogs. Some of my readers binge them as soon as they come out. Others spot check, look for the titles that are appropriate that 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 the Miss-a-Month Program because the COVID-19 has created panic and everybody has been asking about, “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 these. The reason why this is becoming a show is timeless. What I cover in this Miss a Month is off the charts. It is wise and intelligent coaching for you on how to live your funding life, whether we’re in a worldwide pandemic or we are 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 for all of the commentaries that are going on different Facebook channels. As a community, we’re buying together. I’m watching some of you answer each other’s questions. I love seeing the solidarity because we are in this together even though we’re 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. Thank you, Vivian, for this. I’m going to read it and we’ll pick up every single piece. I’ve done some research on some websites, etc., that are going to speak directly to this. Vivian says, “Merrill, I was wondering if you could address this topic in your next daily recap. All my credit card companies including Chase, Bank of America, Citibank are letting people skip payments for April, saying that they will reset my account. I checked my online statements and it does say 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. 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, it is spectacular. Let’s address that. Some of the stuff bears repeating that we’ve discussed. I want to bring it all to bear here. Most of the major banks, including the tier twos, even the tier threes, Capital One, Citi, JPMorgan Chase, they’re giving concessions to cardholders who are suffering financial hardship due to Corona-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 to 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 says, “If you set up automatic payments with Wells Fargo,” which for my students at 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 those automatic payments.
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 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 parts of this are part of an automatic process. It’s a machine. You make your payment, when it gets credited, then the review software comes by, it 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.” You have to 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 going to watch it. If you need to take advantage, I’ll be sharing here what I called the Hierarchy Of Financial Needs. We’re going to be sharing some of those steps. If you need to protect your family, your home, and your survival, 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 and clear way possible.
It’s a short-term experience that we’re going through, maybe 3 or 6 months. It could be a year, but it’s not 2, 3, or 5 years. We will come out of this. In 2008, we were moving forward in 2010 and 2011. Everything was back in play. For my real estate investor friends, my note buyer friends, my entrepreneurs, everything was an opportunity if we had the resources to do so. If you burn your business, banking relationships, if you burn your relationships with your banks, if you’re going to be hit for years to come a minimum of four and likely more depending on your situation. Do you need to take advantage of it? Find out what a 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 pulled up with Wells Fargo. You see that there may be differences. Take time. My roommate and my dear friend, Riley, I’m here at my home and I hear him on the phone with banks all the time. We talk to each other all the time. He’s an amazing example of a real estate investor who’s experience is vast with single-family, fix and flips, buy and holds, 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 you don’t have to take advantage of it, he knows that he wants to preserve and then I’ve helped him prioritize. As I’ve been telling you, prioritize.If you have to go late on something, if you have to take a moratorium on a payment, choose wisely those moratoriums. 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, with the lenders, etc. It’s secured with real estate, automobile or otherwise. Choose wisely, which ones you’re going to do your credit cards, especially your tier ones these banks, Wells Fargo, Citi, JPMorgan Chase, and Bank of America. Those are the ones you want to hold off the longest you possibly can because those are your tier ones.Prioritize your future relationships with lenders as much as you are prioritizing what's happening these days. Click To Tweet
They’re 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. Thank you. I want to acknowledge, 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 reorder. It’s GetFundableBook.com and pay for the shipping. I’ll then send you a new one. It’s probably 2 or 3 weeks to get it in your little hand with finishing the printing and shipping, but the printer’s going to get it back to us shortly. If you want another copy of it. The book cover’s the same, but the contents, I even have cool stick figures in there illustrating some of the points, stuff like that. 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 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, so that information that you’re looking for. Interest would still be charged for the month, but it would be added to the end of the loan. This was an auto loan. You got to find out what they’re going to do with the interest because they’re accruing 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, 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. We’re just bringing it up. We 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 got 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 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 things.
The first one is deciding whether or not you need to. The others are all due diligence. You need to know, do you qualify and what are the terms? What happens to your credit score? How are they counting the interest, etc.? Fair enough. When we’re under pressure is when we discover who we are. After all the niceties are set aside, we find it in our relationships. We find it with our parent-children, children-parent. We find it with our team members at work. We find it with our employees or our employees to the employer. You’re showing up in a particular way. That is what you’re going to be known by.
The whole thing that we talk about fundability building, etc. We always say that we’re building our reputation to the banks, our partnerships with the banks, but your spouse, your children, your parents. Everybody’s going to know and believe that who you are is who you are, how you’re showing up. Sometimes, even we’re being kind because it’s all starting, 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. 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, you and your loved ones, you 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? All those steps are do I even need to do this? I hope you prioritize your future relationships with lenders as much as you’re prioritizing what’s happening 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 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?” I’m like, “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, the credit bureaus, credit reporting, with your business partners, your teammates, your loved ones. Protect your reputation above all. Be kind, generous, and supportive of each other and we’ll get through this. This is Merrill Chandler, your friend, coach, and cheerleader in making sure that we do this and do it well. Have a great day. We’ll be checking in soon. Bye now.
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