Looking for home loan modification options can be a bit of a struggle as there are so many options available, but they are there for homeowners in need. Don’t find yourself loosing your home because you didn’t look through the various options that are available.

As a homeowner going through some of the struggling times that many others are experiencing finding some modification options can be the only way you can really get through these struggling times.

For your options for loan modifications you could be presented with the option to extend your loan timeframe. By doing this you could see your monthly payments decrease drastically which could be beneficial to any homeowner. When you are stuck paying a monthly payment that outreaches your budget range it can be quite difficult to make all your necessary payments.

No one likes missing any payments as it can put you in severe debt which is where a loan modification can be quite useful. With the various options available a homeowner can really get themselves back on track. You could qualify for some of the options available but you could also disqualify for many more. There is only one way to find out and that is by trying.

Modification options are available through various mortgage broker companies and other services that have been made available all across the United States. Each state may have their own rules and regulations towards the options available so you will need to check into these first before you apply as it may not even be available in your localized state.

Home loans can be a very difficult thing especially if you need to make some modifications to them. Don’t find yourself struggling to the point you give up and take advantage of the various modification services that are available nationwide. You could secure your home and avoid loosing to it to foreclosure if you take advantage of the options available.

With the many different home loan modification options available to homeowners you can finally find yourself getting through these struggling times and keep your home. Every family and homeowner deserves the chance to keep their home but the only way you can is by trying. Get the help you need with modifying your home loan and secure yourself with a lower monthly payment with the many different options available today. You are not the only one struggling so stop feeling alone and get the help you need.

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D.C. Mayor Adrian Fenty and Attorney General Peter J. Nickles announced that the District has resolved two major lawsuits against auto title lenders Loan Max and CashPoint for alleged violations of D.C.’s Consumer Protection Procedures Act, which occurred from November 2007 through May 2009. The Office of Attorney General first filed the lawsuits in March 2009.

“I commend the Office of Attorney General for their hard work on this settlement,” said Fenty. “The actions by CashPoint and Loan Max were inexcusable and my administration will continue to pursue companies who prey on the District’s vulnerable consumers to gain profit.”

Loan Max and CashPoint are money lenders that issue consumer loans secured by the borrower’s motor vehicle title. Loan Max and CashPoint each issued hundreds of loans to District consumers out of their Virginia stores since November 2007. Loan Max and CashPoint charged District consumers interest rates of over 300 percent APR on these short-term loans, which is well-above the District’s statutory maximum of 24 percent APR. The companies actively solicited District consumers to come to their Virginia stores through a combination of radio and TV commercials that were broadcast in the District.

“I am very pleased at how quickly Loan Max and Cash Point moved to resolve our concerns as to their business practices with respect to District consumers,” said Attorney General Peter Nickles. “Loan Max and CashPoint cooperated fully with my office throughout these investigations and this office’s vigorous enforcement of our consumer laws has resulted in these substantial refunds.”

Loan Max and CashPoint have agreed to provide District residents with full refunds – not only of the interest that was charged above the statutory cap of 24 percent -- but for all interest that was charged and paid by District residents between November 24, 2007 and May 2009. Over 650 District residents are eligible to receive hundreds of thousands of dollars in refunds under the terms of the settlement.

In addition, Loan Max and CashPoint have agreed to return all vehicles that they repossessed from District consumers and that are still in the companies’ possession. For those consumers whose cars have already been sold at auction, the companies have agreed to refund to the owners the full amount for which the cars were sold. The companies also have agreed to make substantial contributions to the District’s Consumer Protection Fund, to be used for consumer protection and education purposes. Finally, both companies have agreed that they will cease making loans in the District.

Within the next month, Loan Max and CashPoint will be mailing claim forms to all District residents who have transacted business with these companies since November 24, 2007. The OAG’s office received significant assistance in its investigation from the Washington Division of the Better Business Bureau. For further information about this settlement and to determine whether you may be entitled to a refund, go to www.consumer.dc.gov and or call the consumer protection hotline at 202-442-9828.

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Karey Gauthier of Novato was bowled over by the demands of a lengthy home loan process, but felt more secure in the end.

"It's more stringent, but that actually makes it a more straight-forward process," said Gauthier, 27, who with her husband, Nick, are in escrow on a ranch-style Novato home after a four-year search. Limited by a down payment of 5 percent, the couple assembled a thick pile of financial statements for a loan backed by the Federal Housing Administration for their $530,000 purchase. Years earlier they were among those considering risky loans offering lots of cash for ljavascript:void(0)ittle in return, a pattern that set back the mortgage industry and helped spawn a global economic crisis.

Now, at a time bankers are extra cautious and credit is tight, prospective homebuyers are struggling to compile mountains of paperwork and healthy down payments - and they still have to come up with sky-high credit scores to be considered for a deal.

"Because all the banks are more cautious, I feel as a buyer more protected now than I would have then," said Gauthier, a credential analyst for Dominican University in San Rafael. "They're shining light in all the dark corners, where before they weren't."

The Gauthiers' mortgage consultant, Sean Murphy of RPM Mortgage in Mill Valley, recalled an industry of "real quick, loose deals" when he entered the business with the now-shuttered GreenPoint Mortgage in Novato in 2004. Murphy said when financial markets imploded
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in the summer of 2007, mortgage assets were bundled in such intertwined fashion that industry professionals couldn't tell which were performing and which were defaulting.

"Lenders (today) are reverting back to 1980s lending standards which essentially is common sense, fully documented underwriting" of loans, Murphy said. "It's a full documentation environment of your income, your assets and your employment."

Last week, Federal Reserve Chairman Ben Bernanke addressed the need for government regulation to protect consumers. The central bank had approved new regulations aimed at curbing abuses on home mortgages. They bar lenders from making loans without proof of a borrower's income and would require lenders to make sure risky borrowers set aside money to pay for taxes and insurance.

Murphy said the past two years have been an education not just for him, but prospective clients expecting piecemeal filings of the past to still exist.

Assembling reams of bank statements, income tax and other Internal Revenue Service forms are now the norm, Murphy said, not just summaries "and the reality is these loans get audited for consistency (and) clarity. They want everything."

Sara Zander, a loan agent in Rohnert Park, said a Marin husband and wife with excellent credit had to re-sign every escrow document twice before closing on a home sale last month because of lender concerns - that included standardizing ink color of handwritten wording.

Stevens Manning, president of Manning Mortgage Associates of San Rafael and spokesman for the local chapter of the California Mortgage Brokers Association, said hallmarks of a AAA-rated candidate include more than two years of pay stubs, a credit score of 740 - up from 680 in past years - and down payment of at least 20 percent.

Down-payments of less than 10 percent are considered high risk, though Manning said FHA loans, such as what the Gauthiers sought, allowed an amount as low as 3.5 percent along with other limitations.

Marin mortgages for more than $417,000 were used to finance 42 percent of all home sales in March, compared with close to 80 percent before the credit crunch hit in 2007, according to MDA DataQuick, a real estate tracking firm in San Diego.

In the Bay Area, similar mortgages represented 19 percent of all home sales last month, down from more than 60 percent prior to the credit crunch.

Just over 5 percent of Marin home loans in March were government-insured FHA loans, a figure that jumped up to highs of 8 and 10 percent toward the end of 2008 and was non-existent one year earlier.

FHA loans made up one quarter of all Bay Area loans last month, up from 1.5 percent a year ago.

Manning said many brokers have returned to long checklists that had been set aside, and a focus on what he calls the five C's: cash flow, capital, character, collateral and credit (score).

He said the 2,500 members of his statewide association is half what it was two years ago as firms shut down and players exited the industry.

While admitting "there are some bad actors in the mortgage business," Manning pointed to Wall Street "dropping the barriers of entry" for people who shouldn't have been given loans.

"Underwriters that made the decisions basically sullied personnel (and) were the ones saying this looks like a good loan," he said. "The job of the loan broker is to present the best case for their client."

Brokers agreed that non-conventional loans with little documentation and easy qualifying could still be found, but at a premium price.

For other buyers in Marin's high-cost market, government assistance in the form of a federal loan limit increase from $625,500 to $729,00, more FHA assistance and expanded programs offered by mortgage giant Fannie Mae are beginning to trickle into the county. As part of the recent stimulus package, buyers who haven't had a mortgage on their credit report within three years can take advantage of an $8,000 tax credit.

Those who hope to take advantage will need patience, perseverance and advance planning.

Loan agent Zander said "the days of going out and looking at houses and then looking for a mortgage broker and getting preapproved in minutes, that's gone."

Example of checklist items used by mortgage brokers to process a home loan:

- Completed loan application

- Good-faith estimate and closing costs

- Current pay stubs showing one full month of wages

- W-2 form for all employed borrowers

- 1040 federal tax return signed by borrowers with all schedules for multiple years

- 1099 forms showing all gross income

- Year-to-date profit and loss statement and current balance sheet prepared by accountant and signed by borrower

- Property purchase contract

- Copy of drivers license or resident alien card

- Estimated closing statement on home being sold or final closing statement if already sold

- Bank statements for last three months

- Stock/bond statements for last three months

- IRA, Keogh, pension statements for last three months

- Schedule of real estate owned (if own more than three properties)

- Rental or lease agreements for all rental income properties

- Any divorce or separation paperwork

- Copy of first mortgage note (if applying for second mortgage or equity line)

- Contact information for landlord

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n the UK, lenders offer lucrative interest rates.

Unsecured Homeowner Loans requirement and properties:


1. Available to all citizens of the United Kingdom who are over 18 years.

2. Flexible deals and low interest rates.

3. Fast and easy loans.

4. Available for people with bad credit, such as history of bankruptcy, too.


Now, the collection of your house is not difficult with the options of loan not owner. As in the guaranteed loan must be an asset to put as collateral, usually a single house, an unsecured loan is high without warranty only. An unsecured loan is a fast way to get loans because there is not much paperwork and verification takes place. You can usually apply to a financial institution or just online, which makes it even more convenient for people.


Once the amount to be borrowed for the loan is decided, it is advisable to apply for a loan not owner. It gives you ample opportunity to verify and check against with many lenders and interest rates they offer. In this way, we can be benefited from lower interest rates. An owner unsecured loan can not be denied to people with past bad credit history. So do not worry. Simply apply for the loan. Donors come with an interesting and affordable option for a face bankruptcy in history too.


Unlike a secured loan, a home for unsecured loan can be used for any purpose by the borrower meeting or pay medical expenses for higher education or consolidate your debt. An unsecured loan is quite flexible and their repayment period is usually between 5-10 years. Yet it is short, it is more advantageous to the borrower. Before going for an unsecured loan, you must have an idea of recent trends in the financial market. It is best if you or your financial advisor some preliminary investigation in order to give the best operation of the collection and certainly the most for your home!For more information about unsecured homeowner loans,unsecured homeowner loans For Bad Credit visit http://www.nocreditcheckunsecuredloans.co.uk

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QUESTION: From the current market conditions and sales of similar homes in my area, I estimate the present value of my home to be approximately $250,000. I am paying on a mortgage of $500,000 and my loan is based on an adjustable rate of interest. What are my options if my payments increase and I am unable to make the higher monthly mortgage payments?


ANSWER: Homeowners faced with little or no equity and adjustable-rate mortgages that are resetting to higher interest rates may want to consider the following options:

•Make the payments. If you can afford to do so, why not continue making your payments as you originally agreed to do on the loan you signed? Doing this will maintain and improve your credit rating. The real estate market will eventually improve and home prices will appreciate and increase your equity.

•Renegotiate your loan terms. During this economic downturn, your lender may be open to modifying the terms of your original loan agreement to more affordable payments in an effort to avoid foreclosure. Specific terms and conditions depend on what a borrower successfully negotiates with the lender. For example, some options would include reducing the interest rate, forgoing an upward adjustment of the interest rate, extending the repayment period or reducing a portion of the principal balance owed.

If you have missed payments, adding delinquent payments to the principal balance is an option. Or you may seek a combination of all these listed modification terms.

•Foreclosure. A lender may initiate the foreclosure process when a borrower defaults on a loan, such as by missing a mortgage payment.

In California, most lenders elect to foreclose nonjudicially by conducting trustee's sales. This process requires less time and less expense in costs and legal fees for the lender. For the period from

Sept. 8, 2008, to Jan. 1, 2013, California has a special foreclosure timeline for most loans originated between 2003 and 2007 that are secured by owner-occupied residences.

Before foreclosing on an owner-occupied loan originated between 2003 and 2007, lenders must generally contact the borrower by phone or in person to assess the borrower's financial situation and explore options for avoiding foreclosure.

Question: We are having trouble paying our bills and we are concerned about losing our home. I've heard something about homesteading your property so that nobody can take it away from you through a lawsuit or something like that. How do we go about homesteading our house to protect it if we can't afford our bills any more?

Answer: When you mention the word homestead, some people immediately conjure up images of the pioneers and the Homestead Act of 1862. Under that act, a head of household could gain legal title to a 160-acre tract of public land simply by clearing it, improving it and living on it for five years.

Well, that was a long time ago.

Today, each state has its own homestead laws, which are concerned with protecting a certain portion of the property owned by the head of a household from being confiscated and sold to satisfy debts.

Some states offer much more homestead protection than others. Compared to other states, Washington's homestead protection law used to be relatively weak. But in 2007, the state law was changed to increase the homestead exemption from $40,000 to $125,000 to keep up with the increase in home values over the past decade.

In some states, you must file paperwork to claim a homestead, but in Washington you don't have to do anything. The homestead designation is automatic as soon as you occupy a particular property as your permanent residence.

Many homeowners misunderstand the law and think that it provides much more protection than it actually does. For example, under the recently amended homestead law, $125,000 of the equity in your home is protected from a forced sale to satisfy unsecured creditors. However, the homestead exemption does not protect you from secured creditors such as your mortgage holder. That is the most common misconception about the homestead law. If you don't make your mortgage payments, your lender can foreclose and sell your house at auction to pay off the loan regardless of whether you have a homestead exemption because the mortgage is a secured lien, which means that your home is the collateral for the loan.

The homestead law protects you only from unsecured creditors. For example, if you had to pay a $100,000 judgment to settle a lawsuit and your only financial asset was $125,000 equity in your home, the winning party could not foreclose on your home to collect the judgment because the first $125,000 worth of equity is protected by the homestead law. But if you had $225,000 worth of equity in your home, the winning party in the lawsuit could force the sale of your home, give you the first $125,000 which is protected by the homestead exemption, and keep the other $100,000 as payment of the judgment.

Mortgages aren't the only exception to the homestead protection.

The following types of liens are also exceptions:

# Construction liens for work performed on your home.

# Child support debts.

Condominium or home-owners association dues and assessments.

Certain debts in a bankruptcy filed by one spouse within six months of the other spouse's bankruptcy.

As you can see, with all of the exceptions listed above, the homestead exemption has very few applications in the real world. The homestead law mainly comes into play in bankruptcies. When homeowners are over their head in debts, most will let all of their other bills slide in order to keep making their mortgage payments on time.

In bankruptcy court, the judge will let the homeowner keep their house if they are not delinquent on their mortgage and their equity is $125,000 or less. Bankruptcy judges tend to be fairly lenient regarding the homestead exemption limit.

For example, if your house was worth $450,000 and the mortgage balance was $300,000, that would be a total equity of $150,000. But the judge might take into consideration that the homeowner would incur $25,000 or more in real estate commissions and closing costs, plus other selling and moving expenses, and therefore conclude that the net equity would be within the $125,000 limit protected by the homestead law.

The homestead law would discourage someone from suing you if your only asset is a home equity of $125,000 or less, and it may allow you to keep your home if you wind up in bankruptcy court, but don't count on it to protect you from all of your creditors.

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We always hear how bad foreclosures are for everybody.

The homeowner is put out on the street. The bank goes through an expensive process of unloading a house it didn't want. And neighbors see the value of their homes drop.

Yet bankruptcy reform legislation that could help avoid foreclosures is meeting stiff resistance. That legislation would allow bankruptcy judges to reduce the principal and interest on mortgages, something called "cramdown," on a primary residence.

Lenders are up in arms, contending that such a move would raise interest rates for every homebuyer. Opponents add that it would refreeze credit markets.


"May as well draw up plans for TARP 3," says Todd Zywicki, a law professor at George Mason University.

But what Congress is proposing is a lot less radical than opponents suggest.

Bankruptcy judges already have the power to modify mortgages on farmhouses and vacation homes.

And they regularly modify loan terms for businesses filing under Chapter 11, says Illinois bankruptcy lawyer David Leibowitz. Congress, he says, would be giving homeowners the same rights as Donald Trump, whose casino enterprise recently filed for bankruptcy protection for the third time.

Basically, the legislation passed early last month by the House would require that you first try to modify your mortgage with the lender. If that didn't work, you could file for bankruptcy protection under Chapter 13, in which the judge would be able to adjust the principal based on the home's current market value and change the interest rate to the average rate for prime borrowers.

For example, if your mortgage loan is $300,000, but your home's value has fallen to $220,000, the loan could be reduced to that amount. The $80,000 would be lumped with other unsecured debt, such as credit cards, and be repaid, as much as possible, with disposable income over five years.

If you sell the house within that five years, the lender could recoup part of the profit if your house has appreciated. So if you sell the house in the first year for $250,000, the lender would get the return of the principal plus 90 percent of the $30,000 profit. The lender's slice of any profit drops each year you own the home until disappearing.

The bankruptcy relief would apply only to existing mortgages at the time the law is enacted, helping those caught up in the current crisis, not future borrowers.

Reform seems a better alternative than cash-strapped people walking away from homes that are worth less than the mortgage.

Bankruptcy reform had momentum earlier this year, but it seems to have stalled in the Senate. But proponents and opponents say don't let the lull fool you. They expect the Senate to come to some sort of agreement after Congress returns from its Easter recess.

Likely, it will be more restrictive than the early House version.

Some congressional conservatives, for instance, want to limit relief to subprime borrowers. (That's a bad idea. It would deny relief to prime borrowers who might have temporarily lost a job and gotten behind on mortgage payments. Just the people Congress should want to help.)

Fierce lobbying by lenders could further narrow the scope of any legislation.

Lenders fear leniency in the bankruptcy law would lead to a rush of filings. And lenders don't trust Congress not to make this relief permanent.

"These things always have a way to start as temporary and then to be made permanent," says Francis Creighton, chief lobbyist for the Mortgage Bankers Association. "Because of that future risk, lenders will have to account for that in how they price their loans."

The group's Web site says consumers could see mortgage rates go up by 1.5 percentage points if such legislation passes. The site also calculates how much that would mean in different markets. Baltimore homebuyers would pay an extra $1,533 a year on the typical $128,218 mortgage here, the site contends. (Mortgage rates have been falling, dipping last week to the lowest level in the 38 years that Freddie Mac has tracked them.)

"No basis in fact. Humbug," says Robert Lawless, a University of Illinois law professor. "This is the bankers' scare tactic to any change to consumer lending: 'Interest rates will skyrocket.'"

Even George Mason's Zywicki, no fan of the legislation, says the bankers overstate the impact on rates.

Undoubtedly, homeowners are hurting, and an economic recovery isn't around the corner.

We always hear how we are in extraordinary times, which is why taxpayers must bail out some of the very financial institutions that helped bring the economy to its knees. But given these extraordinary times, we should be able to extend some temporary bankruptcy relief to some of these same taxpayers.

People who are living on benefits from social security department can finance their needs under loans for people on benefits. People living on benefits provided by DSS can be person with disability or that person who are not perfect enough to give their best efficiency. The benefits offered by the departments are enough to meet people's daily survival and routine demands. But, if dependent people want some extra cash for their needs then they must feel free to avail loans for people on benefits. These loans do not require any source of money and valuable assets to pledge against the loan.


These loans can be categorized as secured and unsecured loans. In the secured form, borrowers are required to pledge collateral against the loan while in unsecured loans; borrowers do not require any collateral. Unsecured loans for people on benefits are easy to avail as it is backed with no collateral placement. The loan amount can be used for personal purposes such as unexpected medical bills, breakdown of car, home improvements, wedding expenses, travel expenses and so on. These loans are short term in nature as it provides temporary financial help in immediate need.


There are certain specifications which are needed to get the easy approval of the loan amount such as:


• Borrower should be a permanent citizen of UK

• Borrower should be an adult with the age of 18 years or more

• Borrower should be having valid and active check account for fast online transactions

• Borrower should be regular employed earning viable and steady source of income

• Borrower should be on benefits for last six months


After meeting these conditions, the borrowers can easily avail loans for people on benefits. Online mode is considered as easy mode for applying the loan application procedure. As a matter of fact, from the comfort of home or office, the borrowers can easily fill-in a simple online application form with required details including personal information and banking details.


At last, with help of loans for people on benefits, the borrowers on DSS benefits can avail the loan to meet their needs.

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Dear Debt Adviser,

I was recently diagnosed with a kidney failure that keeps me from working like I could before. I ended up borrowing money from my credit card to pay my mortgage to keep up with payments until I can't pay both my credit card and the mortgage. I'm now behind on my mortgage. My credit cards kept on calling, and finally I settled for a lesser amount than what I owe them. My question is: Is it OK to use money from my 401(k) to pay off debt? I would like to get rid my credit cards; that's why I agreed to the settlement. But at the same time, I'm thinking, "Where do I get the money?" Please help me. -- April

Dear April,

No, no, no! Stop for a minute and take a breath. You have it backward and it's not your fault. So before it is too late, let's look at your situation with a fresh eye. First, my sympathies on your diagnosis and your personal financial problems as a result. You faced some tough decisions regarding your finances, and you are doing some things right. You are continuing to work as much as you are able, and you are trying to keep up the payment on your mortgage.

That you used cash advances to pay another debt is a recipe for disaster. It just cannot be maintained for any length of time due to high interest rates. I'm glad you wrote before you raided your retirement savings and continued doing things that may not be in your best interest, given the current economic environment and your personal situation.

Be forewarned, this response is hard advice for hard times. Do not settle with your credit card companies and do not touch your 401(k) money. Your credit card accounts are unsecured debt, meaning the creditor allowed you to borrow the money without any collateral to ensure that you would pay it back. Your mortgage is a secured loan backed by your home.

Because you need a roof over your head and the housing market is horrible for sellers right now, it might be best for you to do what you can to hold on to your home. That's as long as you believe you can afford to make your mortgage payment to the exclusion of all other payments, but perhaps with the exception of the payment on your car, which you'll need to get to work.

I'll bet that the credit card collectors are calling you day and night. I'll also bet your mortgage company is not. Why? Because the unsecured creditor needs to make so much noise in your life that you pay to get rid of them. The mortgage lender will just quietly take your house and put you out on the street.

Here's what you should do. Stop making payments on your credit card accounts until you call the HOPE Now Alliance at (888) 995-HOPE. Ask a counselor to prepare a budget for you. It will show you what you can afford to pay on your mortgage and what you have left over for your credit card lenders. The Hope Now counselors can help you get better terms from your mortgage lender and give you a budget for living expenses and debt service. Plus, it's all free.

I know it's hard to think straight when someone is pressing you, and all your best instincts say to pay what you owe. But in your situation, you need to prioritize your debts and pay the important ones first. Save your retirement money, which is beyond the reach of collectors, and then do the best you can with what resources you have available. That's all anyone can reasonably ask of you.

Good luck!

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Q: I am three months behind in my homeowner's association payments. Can the condominium foreclose on my unit? My mortgage payments are up to date, and I called my lender who said no, they cannot foreclose. What do you say? I wrote a letter to the board asking for a payment plan in January, but have received no response. I know I owe the money, but I was sick for a period of time. I am planning to pay the back fees with my taxes.


A: Your lender is wrong. Review your legal documents carefully and you will see that the board has a number of remedies if an owner is delinquent in condominium fees. The board can bring a lawsuit for collection; in many cases it can restrict access to common areas, such as exercise rooms or swimming pools; and can ultimately, unless your state legislature has enacted restrictions, foreclose on your unit.

I am surprised that your board has ignored your request for a payment plan. Such a plan makes sense, especially in today's economic situation. What does the board want to do: foreclose and then possibly be stuck with your unit if no one buys at the sale?

I suggest you keep pressing the board for a decision.

Q: After 25 years I'm tired of being a landlord and was thinking of selling my rental house and carrying back the loan. Where can I get more information on what's involved?

A: When you sell property and take back financing, you are no different from any other commercial lender. You want to be as sure as possible that your buyer is financially able to make the monthly payments (which include principal, interest, taxes and insurance - or PITI), and you also want to make sure that the loan is properly secured with the house as collateral. This means that you record the mortgage document among the land records where the property is located.

There is a lot of information on the Internet - just type in "seller take back financing" at your favorite search engine.

However, as helpful as the Internet will be, you will need specific assistance. Your buyer/borrower will have to sign a promissory note, and a deed of trust. Don't rely on the buyer's attorney or title company to assist you. Retain your own attorney to draw up all of the necessary papers and to help you determine if your potential buyer is a good candidate for a seller take-back loan.

Q: My friends have a home they are allowing their daughter to live in rent-free. We were discussing selling the home, which they moved out of three years ago. Because they have gone past the three-year period, what is their capital gain amount or tax liability on this home? Is the entire amount that they sell it for taxable? Or does the IRS still deduct the amount paid for the property and call that part untaxable?

A: If I understand your question, your friends moved out of their principal residence three years ago, and now want to sell it to their daughter. Because there is a time limit on their right to exclude up to $500,000 of their gain if they are married and file a joint income tax return (or up to $250,000 for single filers), what are their tax consequences.

In order to take advantage of the exclusion of gain, you have to own and live in the house for two years out of the five years before the property is sold. The two years do not have to be continuous; you just have to be able to prove that you did live in the house for a total of two years.

If you fail to meet what is known as the ownership and use test, you have to pay capital gains tax. The tax is based only on the profit you made. Example: You bought the property for $200,000, made no improvements, and sold it for $300,000. Although you can deduct such items as closing costs and real estate commissions in determining profit, for this example you have made $100,000 and will have to pay capital gains tax.

The current rate for this federal tax is 15 percent. You may also have to pay state and local income tax.

Here's a suggestion, however. If the daughter were living rent-free, it could be argued that this is an extension of the family and thus your friends may be able to tack on the daughter's use so as to permit the family to claim the exemption. I cannot provide specific legal advice and recommend that the family consult a tax attorney or accountant for more information. Clearly, any legal way that one can avoid having to pay taxes is acceptable to the IRS.

Q: I have an odd situation regarding the residence that I am leasing. I entered into a one-year lease with a very affluent couple. A few months later, the couple disappeared. More investigation on my part concluded that the husband was an owner of an investment fund and disappeared once the banking industry went awry. Millions of dollars of investors' money allegedly disappeared with the husband CEO. The wife kept in touch with me and I worked out an agreement with her, whereby she would transfer the deed over to me for a lump sum amount and I would continue payments on the home, until I am able to obtain a new loan or work out an assumption with the bank. She agreed, we noted everything in writing, and we're living in the home with our names on the deed but the mortgage in the owner's name.

What will the bank do when they find out that the owners transferred ownership? Is there anything we can do to make sure that our rights as a bona fide purchaser are protected?

A: Wow! Another fraudulent financier. When will this madness and corruption stop?

My first question is whether you really own the house. If the house originally was in the name of the husband and wife, and the missing husband did not sign the deed, you do not own the property. You must immediately retain a real estate attorney in your area to investigate.

If you do own the house, are you in a financial position where you can refinance and get a mortgage loan in your name - and pay off the old loan? Interest rates are very low now, so you should seriously explore that option. Alternatively, come clean with the bank that holds the mortgage, and I suspect that they will work with you.

But the first question must be answered immediately: Do you really own the property?

Q: Condominium owners don't realize until it's too late that they are at the mercy of their boards. What can the community do when the board doesn't follow the bylaws and rules and regulations?

A: That's a tough question. There are times when a board has to make value judgments as to whether they should follow the legal documents - even though they realize they are legally obligated to do so.

One example that is very current deals with rentals of condominium units. Many association bylaws put restrictions on renting - such as either no rentals allowed or only a certain percentage of units can be rented at any one time. However, in today's economy, many owners who must leave the area for whatever reason find that they are unable to sell and must rent - despite the fact that the quota spelled out in the bylaws has been met.

What should a board do in this case? Obviously, the first choice is to try to amend the legal documents. But that's not always easy. More importantly, when the economy gets better, the association wants the leasing restrictions to remain in place.

I have told my condominium clients that the board should hold a public meeting, and advise the owners that based on the circumstances, and despite the clear language in the bylaws, the board will just not enforce the leasing restrictions for the foreseeable future.

If the members do not object, then the board can "close their eyes" to the violation. But if there are objections, the board would have to consider whether the costs involved in litigation are a worthwhile expenditure, and they still may opt not to enforce.

Don't get me wrong. I am not advocating that boards have the right to ignore the clear dictates in the legal documents. In general, they do not have this right.

What should owners do if their board is ignoring the rules? I tell everyone that they have the following options: (1) initiate a recall proceeding, so as to try to "throw the rascals" out of office (the bylaws should spell out the legal requirements for this process); (2) run for the board and try to change the system; (3) a number of unit owners should retain a lawyer who can file suit to force the board to comply with the documents; (4) accept the situation and live with it, or (5) move out of the community.

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Nowadays, availing of loan has become easier task when compared with last few decades. But to avail loans, the borrowers have to fulfill some conditions which are specified by the lender. And, after meeting the conditions laid down the lenders, the loan amount is offered. In case, if you are backed with bad credit problems then availing of loans can become a bit difficult. The risk associated with it refrain the lenders from offering financial assistance. Considering this situation, the loan experts have come up with special type of loan and named it bad credit unsecured loan. This loan is one such financial package that meets the need of the borrowers.


Any individual with credit deformities such as CCJs, IVA, arrears, defaults, missed payments etc can avail this loan for their needs. The best part of this category of loan is hat borrower can retain their past credit scores with proper or timely loan installment.


In order to acquire bad credit unsecured loan, applicants are not at all required to place their valuable collateral as a security against the loan amount. This is beneficial for those who are not willing to place collateral due to risky proposition. The tenants, non-homeowners, homeowners, students, PGs etc with credit deficits can opt for this loan.


The amount sanctioned is mostly based on the borrower's income and repaying capability. The loan amount ranges from a small amount of $1000 which can be extended up to $ 25000. This loan is backed with short repayment tenure. It covers a span of 6months to10 years. The interest rate charged is high as loan is approved without any security or considering any sort of risk factor. Even then, a comprehensive search of the loan market will definitely assist the borrowers to get affordable rates.


The amount availed from the bad credit unsecured can be used for varied purpose such as purchase of a car, financing education, home renovation, meeting wedding expenses, house repair, consolidating of multiple debts and so on.

Secured loans are advanced to the borrowers who are looking forward to meet their luxuries or needs. These loans are offered to borrowers who are ready to offer or place their valuable collateral against the loan amount. Generally, the borrowers keep their valuable home, land or real estate as the collateral. The loan amount availed under this category of personal loan is depended on value of asset that have been placed by the borrowers.


Depending upon borrower's collateral value and repaying capacity, lenders approve the loan. Under secured loans, greater amount can be availed at feasible interest rate and for flexible repayment period. The feasible rate of interest allures borrowers the most. The amount offered under this category of personal loans varies from 10, 000 to 75,000 for about 30 years.


The amount availed can be used for meeting varied purposes such renovating of home, purchasing of new car, paying education expenses, meeting daughter's wedding expenses, going for holiday and undergoing cosmetic surgery. Apart from this, the borrowers can consolidate their multiple debts.


Another advantage of secured loans is that bad credit holders can also avail the amount by placing the valuable collateral. Moreover, by paying monthly instalment on time, the bad credit holders can elevate their credit score. Credit score refers to the credit report of borrowers. The report is prepared by the credit reference agencies such as Experian and Equifax.


There are several banks and financial institutions operating in the UK that are ready to offer their services at feasible rate. The terms and conditions laid down by the borrowers are largely dependant on the credit status. Online mode is considered as the fastest and cheapest mode for availing the loan amount. The best part of online mode is that it requires less paper work and documentation. Online loan quotes are easily available which can help the borrowers to select the best deal.

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With the secured loans, you can go ahead for a loan facility to sort out your several financial problems. Repaying of the loan amount is no longer a matter of worry as with the secured option of personal loans, the borrowers enjoy flexible repayment period. Therefore, it is necessity to check the viability of the loan.

The secured option is considered as the best and cost-effective way to resolve your essential requirements. The secured loans are offered to the borrowers by taking any kind of their fixed asset as security or collateral. The borrowers generally place their home, land or vehicle to avail these types of loans. Importantly, these loans help the borrowers to fetch an amount equal to its equity value. The loan amount ranges from $3000 to $10000 which has to be repaid over a longer period of 1 to 25 years.


In comparison with other type of personal loans, the secured loans have lower interest rate, as security is placed against it. Secured loans are for multipurpose usages. And for this reason, borrowers can to make their several expenses cheaper. The expenses that are usually dispensed with the help of these loans are college fees, outstanding bills, buying of luxury car, renovation of home, luxury holidays, wedding cost, cosmetic surgery and debt consolidation.


The borrower's bad credit is no more a hassle with these types of personal loans, as these loans are provided even to bad credit holders. So, borrowers can apply for these loans without any hesitation and even if borrowers have CCJs, arrears, defaults, IVAs etc. in their credit history.


Among the traditional mode, online mode is the best for searching the loan quote. The loan quote helps the borrowers to get estimated price for the loan. Not only this, online method is considered as the best and cheapest way to avail the secured loans.

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Q: Allonhill's mission is to change the mortgage industry. What needs to be changed, and how do you plan to do it?

A: There were some fundamental flaws in the origination of loans, accepting of loans and investing in loans. We review loans before they go into securitization and give an opinion as to how that loan looks.

We're trying to reinvent the part of the industry that secures loans.

Securitization is so important because that brings liquidity back into the market. We think securitization will never come back if investors don't have full disclosure of what loans look like.

Q: Do you think government intervention is necessary?

A: Absolutely.

There are buyers standing by with billions of dollars just waiting to buy assets. The problem is, they have a price they're willing to pay — they're pricing these assets at 30 to 40 cents on the dollar.

On the other side, you have a seller who has that $100,000 loan on the books for $100,000. The difference between what the market will sell it for and what the market will pay is a disconnect.

The government needs to go in and take the loans off the banks' books. If the banks go under, the country is no better off.

Q: Some people have criticized President Barack Obama's housing rescue plan, saying it is not ethical to reward people who default on their loans when the majority of home owners stay current. What's your response to that?

A: They ask what's right about paying someone to make their mortgage payments. But how did not giving incentives help anything?

If we focus on the moral issues, we'll never solve the problems. The private sector is all about how can we make money. The way to make money is to keep the loans current.

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A home equity loan is money borrowed against the value of your home beyond the amount you owe on it. Home equity loans are sometimes preferable to other forms of credit because they commonly have lower interest rates than credit cards or other unsecured bank loans, and this interest may possibly be deducted from your taxes. Qualifying for a home equity loan is similar to the process one goes through to get a mortgage. An appraisal may be done on your home to determine its market value. The amount you still owe on your home will be deducted from the market value to determine your equity. How much you can borrow for a home equity loan will be determined by how much equity you have in your home. Failure to re-pay a home equity loan, or consistently making late payments can result in the repossession of your house by the lender. For more information on home equity loans, please contact your bank or financial advisor.

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There must be seldom a person who has not taken a loan in his entire life. Everyone needs to borrow money from someone at some point or another in his or her life. The loans they take can be from their friends or relatives, bankers, pawn brokers or the online money lenders. The best option is borrowing from the online money lenders as the loan process is very easy and fast too. These money lenders offer both secured loans and unsecured loans.

When you place some valuable asset with the money lender against the loan amount you take, the loan is called secured. This is because in this case, the money lender has some guarantee that he can recover his money in case you default. You can place anything as collateral: property, house, car, gold, or even shares.

Secured loans offer you the advantage of higher amounts of money as loan. You can avail an amount that is equal or even greater than the value of your asset. Another advantage is that the interest rate is a bit lower than the unsecured loans. As the risk factor is low in case of loans that are secured, you get lower rate of interest on the loan.

Since your asset is with the money lender, he can afford to offer you a longer repayment period. This period often depends on the amount of loan taken. It can be 3 to 25 years. For smaller amounts such as $1500, it can be few weeks too.

To avail secured loans from the online money lender, you should be above 18 years of age. You should have an active checking account from where the installment will be deducted. You also should be earning something regularly. Also, you must be residing in the US. The process is very simple. You just log on to the website of the money lender and fill in a FREE application form. As soon as it is verified, the loan amount is wired to your account.

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It is unusual to have a mortgage refinancing boom in the middle of a foreclosure crisis. In the 1930s, the last time we had a foreclosure crisis comparable to this one, lenders were so spooked that there was almost no refinancing. That changed only after the 1933 creation of the Home Owners Loan Corp., a New Deal agency that refinanced many borrowers at the government's risk.

The refinancing boom today is also backed by government. With few exceptions, refinanced loans are being sold to Fannie Mae or Freddie Mac, or insured by the Federal Housing Administration. The requirements of those agencies largely dictate who can and cannot profit from refinancing.

Deciding whether to refinance involves a comparison of what a borrower has with what he can get. If he is paying 5 percent and can refinance at 4.5 percent and no fees, he will profit. If he is paying 7 percent but the best he can get in the current market is 7.5 percent, he cannot.

Borrowers with fixed-rate mortgages usually know what they have, but borrowers with adjustable-rate mortgages often don't. I have received letters from borrowers in a state of high anxiety because their ARM faced a rate reset and they felt they had to refinance before that happened.

In some such cases, a close look revealed that their rate was probably going to drop sharply, making it unnecessary to refinance quickly -- if ever. read more

Whether President Obama's mortgage foreclosure initiative works or not, is it the right thing to do?

That's a matter of debate, and many believe there is no way to fix the tight financial situation and be fair to everyone.

Some look at the proposals and question the ethics of the consumer assistance: letting people refinance even though they owe more than the house is worth; subsidizing interest rate cuts by lenders; and empowering bankruptcy judges to adjust the balance due on a mortgage as part of a plan to let the debtor get back on his feet.

"We didn't buy over our heads," said Bill Mulhall of Cape Coral, who considers himself a responsible homeowner. "We did straight fixed rate. Essentially they're rewarding people that took on more then they could handle."

Mulhall, a software consultant, bought a home in the northwest Cape in late 2005 just before the crash.

"I tried to refinance a year ago," Mulhall said. "I couldn't."

But others say Obama is doing what needs to be done for the country's good.

"I think overall he's done absolutely the right thing," said Dawn Marie Driscoll, a Cape Coral-based ethics consultant. "No plan is going to be perfect but he's stepped in dramatically to begin to solve the problem."

The problem, she said, is creating programs that will translate to fair treatment of people. "That's complicated because, as in any great ethics dilemma, there are many competing interests and competing values."

Some people shouldn't have signed up for mortgages they find themselves unable to pay, for example, but "perhaps they were misled by mortgage brokers who have long since fled the scene," Driscoll said.
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Now, she said, "The challenge is how you balance all these interests of conflicting parties," hopefully by encouraging debtors and lenders to reach an accommodation acceptable to both.
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But exactly how that's done can ruffle the feathers of those who stand to gain or lose.

The bankruptcy provision for example, is strongly supported by attorneys, especially those like Fort Myers-based Charles Phoenix, who hopes Congress acts quickly to make primary residence loans subject to the same purview in bankruptcy court as other debts.

It's unfair to consumers that, other than home loans, "Any secured debt on the planet - a high rise in New York City, a shopping mall in Los Angeles, a log cabin in Kentucky - can be adjusted in bankruptcy," he said.

Congress put in the provision exempting home loans in 1979, Phoenix said, and "I think it's something that's long, long, long overdue" to remove it.

But Bill Valenti, president of Florida Gulf Bank, said removing the exemption is a bad idea that would undermine contracts and create the possibility of unfair treatment by judges around the country. "A California judge might do it differently than a Michigan judge."

Driscoll said giving bankruptcy judges more power might let them make decisions that benefit all concerned.

In the case of a home mortgage sold to Wall Street and then sliced up among a number of owners of mortgage-backed securities, for example, "Somebody has to make the decision they're going to renegotiate the loan. I think from an administrative standpoint, the Obama administration says everything's stuck, we can't make progress until we get these mortgages unstuck," she said.
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That way, at least, the owners of the mortgage are at least getting something and "communities are going to be stabilized. The debtor is going to be able to stay in his house," Driscoll said.
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Obama's plan doesn't give relief to people who bought houses as investments, not to live in.

That's the right thing to do, said Crista Britton, a mortgage broker with Dream Mortgage in Cape Coral. "If you bought five homes and let them all go into foreclosure, that's criminal."

But even people who bought a house to live in don't get a pass from some when they bail out of their mortgages and other obligations after things get rocky.

"Who created the problem? Every one of us has a degree of guilt," said Mahlon Hetrick, who runs Christian Financial Counseling in downtown Fort Myers. "People running up credit cards they can't afford, buying cars they can't afford, buying houses they can't afford, banks making loans to people who can't afford them."

Jim Neal, a real estate agent with Sun Realty in Bonita Springs, agreed that Obama's plan by itself will not solve the problem.

"If you can keep people in their homes, that's only going to help our economy," he said. "There are still people here working who can afford their mortgage, but when it adjusts in three to four years, they'll just walk away."

But Neal believes Americans share the blame for living beyond their means.

"We got too big for our britches," Neal said. "We got money for next to nothing and spent it all. We became a spoiled society. Now it's an adjustment period getting back to reality."

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Wednesday’s Recovery and Reinvestment Act promises $787 billion to American homeowners and home buyers, offering much-needed protection against imminent foreclosure. This news came as a huge relief to many Americans with homes underwater struggling to make their mortgage payments, but the enormity of the situation begs the question, how did we get into such mess in the first place?

The problem really began in 2003, when bad underwriting of mortgages went up, according to Robert Van Order, former Chief Economist of Freddie Mac from 1987 to 2002, and finance professor at the University of Michigan.

“Once mortgage defaults began, it wasn’t long before it spread to the rest of the country, and then bad credit set in,” said Order.

But it’s not the first time in American history that we have seen this type of problem. In the 1980s, mortgage defaults were bad with savings and loan, and during the Great Depression in the 1920s, there was a total credit collapse, according to Order.

“We are in a real mess, but not everyone’s in a mess,” said Randy Johnson, a credit expert with Credit.com. “You have to have perspective on the whole market. Not everyone is in foreclosure but there are a couple of million people either in it or headed towards it.”

Many people got hurt doing things that fed a “speculative bubble,” Johnson said. Individuals who bought homes to flip and sell, and others who bought homes as investments created a false marketplace in many regions of the country including Florida and California.

But it’s not just homeowners that have been hurt. Lenders have also taken a hit, Johnson said. “Now, it’s just a matter of doing what you can to get as many people to stay in their houses. Lenders don’t like foreclosures.”

Recently, Johnson said too many people have been focused on the cause of the mortgage mess, rather than focusing on what needs to happen to restore normalcy in the market. “Instead of focusing on the bad things and what we must to do change them, for a while we were trying to figure out what caused the problem.”

This type of thinking was getting people nowhere, and only further exacerbating the problem, Johnson said. What’s important for the foreseeable future is to take each situation family by family and ask how we can help them become more educated so this situation does not happen again.

But when it comes to education, the average American should not worry about studying changes Fed policy unless they have an adjustable rate mortgage, according to Order. For homeowners that have an ARM, they can be directly affected by month-to-month changes in mortgage rates. Homeowners with a fixed-rate mortgage will not be affected by changes, but should check interest rates annually to see if they can refinance to a lower rate. read more

The Obama administration's foreclosure plan has won plaudits for tackling an issue at the heart of the current financial crisis, but an exact pattern for identifying at-risk mortgages and how to restructure them has yet to be unveiled.

Alterations or "workouts" of troubled mortgages are key to stemming the nation's tide of foreclosures, say housing advocates and industry experts. The plan announced last week also creates a process to restructure loans, which will spur resolution of pending foreclosure cases, they added.

Curbing foreclosures also has implications for the housing market in particular and the economy in general. "The rise of foreclosure means more houses coming back on market which pushes home prices down further, depresses toxic assets further and continues to erode household wealth," said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Mass.

While lenders and servicers restructured nearly 2.3 million mortgages in 2008, the financial industry has been criticized for its slow response at processing foreclosures. In addition, housing advocates have said the industry has been too stingy with concessions to troubled homeowners, which they say perpetuates bad loans.

"The affordability piece is critical, otherwise the (workout) loans fail and we'll be modifying terms again," said Sister Barbara Busch, executive director of Working in Neighborhoods. a nonprofit housing agency in South Cumminsville.

The stakes are high. Industry estimates say the U.S. could see another 2 million foreclosures this year. The administration estimates 6 million Americans could face foreclosure in the next several years.

Southwest Ohio and Northern Kentucky saw foreclosures in 2008 respectively rise 7.5 percent and 17.2 percent.

Foreclosure filings in Hamilton, Butler, Clermont and Warren counties increased to 12,251 in 2008 compared with 11,397 in 2007. Filings in Boone, Campbell and Kenton counties climbed to 2,001 last year from 1,708 in 2007.

A Delhi Township woman's case illustrates how a workout may only delay and not prevent a foreclosure.

Shirley Nagy, a 63-year-old retired secretary for Cincinnati Public Schools, fell behind on her mortgage with Wells Fargo last year when her rate began to adjust after two years. Her monthly payments jumped from about $950 to $1,500.

"They wouldn't deal with me or accept partial payment," she recalled, noting she fell behind four months when she got a notice her lender would file foreclosure. She avoided losing her two-bedroom, single-bath home last spring when WIN helped negotiate a workout plan. read more

Does the Republican ploy to provide 4% home mortgages to boost the economy and address the home foreclosure crisis sound too good to be true? It is. Buyer Beware!

Their 4% false promise is the modern version of "40 acres and a mule." They'll never deliver.

The quiet caveat is that only people with top FICO scores would qualify while banks pocket huge fees. But they're not saying too much about that.

Given the mass layoffs occurring and the difficulty that so many Americans have in paying their bills, credit ratings are falling faster than the Dow Jones. But Republicans make it sound like they really care about what happens to the average homeowner who "plays by the rules." They don't.

If they did, why haven't they proposed cutting Credit Card rates so that people can spend money immediately while freeing themselves from the debt slavery exacerbating the crisis? Because the Credit Card companies are "playing by the rules." Their rules. Just like the Credit Rating Agencies played by their rules and allowed the subprime mortgage crisis to unfold and create so much wealth for Wall Street, Banking and Credit Card Company executives and mortgage brokers and bankers everywhere.

The fact is that the Republican proposal is a public relations ploy that wouldn't benefit ordinary Americans. That's why they're gearing up to throw sand in our collective eyes. They want us to think that it's minorities and liberal Democrats and people who didn't "play by the rules" that are standing in the way of your getting a 4% mortgage. In other words, they're counting on your prejudice to come through for them.

Check out my letter to President Obama... If the Republicans are really about stimulus, fairness, and solving the housing and credit crisis for average Americans, they'll get behind the effort to reform credit scoring and the Credit Card industry.
That would go along way to stimulating the economy and addressing the housing and foreclosure crisis.

Their ploy goes along with all of their other tax-cut crazed, top-down approaches to all our economic woes. In other words, the same predatory politics and economics that got us into this fix in the first place. It's time for some bottom-up "real talk."

Mitch McConnell, Rush Limbaugh and the Republicans are gearing up for a campaign to commandeer the stimulus, banking and housing/mortgage reform plans, not to benefit the middle class, but to benefit their wealthiest constituency and scapegoat minorities.

The secret that they're not telling the American people is that their main backers are the very Banks and Credit Card companies whose executives they just gave $350 billion to and who paid themselves $18 billion in bonuses. Yet Republicans are blocking efforts to limit the bonuses these executives give themselves with our bailout money in the future!


Welcome to the Republican Redlining of America and the RNC's Return to First Principles!


Wake up! Don't be bamboozled by them again!

They're even going back to the playbook conservatives used to exclude Blacks from wealth accumulating opportunities during the "New Deal." Only now, they intend to use the most restrictive forms of "credit worthiness" to determine your worth as a human being, regardless of your race, almost like they're trying to socially engineer a Republican, 21st Century version of a master card race.

But unlike the past, vast numbers of White middle and working class folks will be left behind, many because they were late on paying bills because Republican mismanagement of the economy and the country helped push them over the economic edge.

It's a form of "economic eugenics," where "playing by the rules" is code not for having enough resources and wealth to be able to pay your mortgage and bills on time now and still save some money. Rather, it means that you already have the kind of investment income that during these hard times very few people actually have or have hopes of accumulating. And the numbers are getting worse by the day.

It's a con job to prey on your collective vulnerabilities and insecurities during these highly unsecure times. They are experts at selling folks a bill of goods - like the used car salesman who's already moved on when you realize he sold you a lemon and you go back to find him and he's vanished. And they sold us a lemon and that's why we're in this mess.

They got folks to vote for them in the past with their false promises time and time again and they're doing it again. They figure they can get away with it and score some political points against the Democrats and scapegoat minorities, divide and conquer, but deliver nothing. Don't fall for it again.

If you do, there will be more people redlined than ever before, hoodwinked by the false 4% promise just like ex-slaves were bamboozled by the "40 acres and mule" pledge after the Civil War. You'll never get it just like they never got it. And they never got it because conservatives in those days used the property provision of the 5th Amendment to reward ex-confederates who had committed treason against the very Constitution of which the 5th Amendment is part rather than help ex-slaves get an economic footing and have any chance of achieving substantive equality in this country!!! We're still dealing with this conservative betrayal to this day.

To them, "playing by the rules" meant that the property you owned and wealth you had from owning human beings needed to be protected and rewarded first, even though you had just waged a terrorist war against the country causing millions of casualties and untold destruction. Sounds like how they've rewarded the Bankers and Credit Card companies today. Remember, conservatives have never renounced Jefferson Davis and the kind of "rules" they used to reward the wealthiest of his followers and companies that benefitted from the institution of slavery. Even those who backed the assassination of President Lincoln. And they intend to use similar "rules" to keep the average American in perpetual "debt slavery" to the banks and Credit Card companies today.

Don't fall for the rosy picture of all the new housing construction projects and jobs that will be stimulated. It's a fig leaf for their radical tax cutting, upward redistribution Ponzi schemes ala Bernie Madoff, but writ much larger and with public policy, legislation and money. And don't fall for their slick, scapegoating ploy to make it look like people who didn't play by the rules got what they deserve and that you're better than them.

A whole lot of those folks, especially those in minority communities were not given the option of choosing safe, low-interest, fixed rate, long term mortgages like other Americans. They're not the irresponsible, greedy people who didn't "play by the rules" that conservatives are falsely portraying to get you to feel good about yourself, better than them and lure you into the conservative trap like they've been doing since the "40 acres and a mule" times.

That's why it's time for a little history lesson about wealth, property, housing, post-Civil War period and the New Deal, since there are many parallels to what happened after the Civil War and during the Great Depression. If we don't learn from this history, we will make the same mistakes -- like cave to the Republican strategy, which excludes Americans of all races who don't fit their profile. Here's a bit of what renowned expert, Professor Melvin Oliver had to say about this history in his famed 2003 PBS interview

I think a prime example has been what happened when blacks were freed from slavery, the period in which there was great hope. One of the things that many of us hear about is the broken promise of forty acres and a mule. And that was an important promise, because those forty acres, that was wealth. That was what could have secured a foundation for a generation of people that had had little wealth. But as we know, those forty acres promised at the end of the Civil War did not materialize.

However, during the same period, a large land reform did occur in America, and that was homesteading. A whole generation of Americans moved from east to west and secured land as far away as California that served as a basis for wealth that has been passed down from generation to generation. For a large part of that time, African Americans were excluded from that benefit...

If you add that up over time, what you get is a situation in which public policy provides opportunities for some and [denies] opportunities for another. This is how America became racialized -- it is the meaning of race in America.

And it's interesting that a lot of these racialized outcomes came out of the most progressive legislation in American history -- the whole set of legislation during the New Deal which created Social Security, created Aid to Families with Dependent Children, created the mortgage markets that make it possible for buying homes. For example, Social Security was originally set up to exclude all agricultural workers. Well, at the time most African Americans were still working in agricultural sectors. So up until the change in Social Security, most African Americans were not covered.

If there's one thing I want people to understand about the wealth gap in America, it is that this was a gap created by public institutions that gave different opportunities for different people to create, nurture and gain assets...

I think one of the most interesting sets of decisions has to do with the realm of housing. In order to purchase a house in America prior to the 1930s, you had to pay up to 50% of the sales price up front. The rest was subject to interest, and at the end of five years you had to pay the remaining balance as a lump sum. Obviously, with that type of arrangement, there were very few middle class people who could buy a home in America. Mainly buying homes was an upper middle class and upper class phenomenon.

But the 1930s created a whole new set of opportunities for Americans to purchase homes. The federal government came in to create and sustain the construction industry. And to do that, they created the Federal Housing Administration, whose job it was to provide loans, or the backing for loans, to average Americans so they could purchase a home.

The tables were turned completely around. The new terms of purchasing a home was that you put 10% or 20% down, and the bank financed 80% of it - not over five years, but over thirty years - at relatively low rates. This opened up the opportunities for Americans to own homes like never before. The average person could own a home. Furthermore, the FHA allowed no or low down payments for certain kinds of homes. So as a consequence the housing industry boomed in the midst of the Depression, because the federal government was trying to create jobs for people, boost the housing industry.

So you had this great opportunity. But it was a color-coded opportunity. How? In order for homes to receive financing, they would have to be certified by home appraisers. The appraisers were given written criteria that assigned colors to different types of homes. Green was the highest value - green homes were homes that were in all-white neighborhoods, usually suburban, and far away from communities that were either integrated or all black. Red was the lowest value - red neighborhoods were in all-minority or mixed communities and were usually in inner cities. These homes rarely got mortgages.

The vast majority of mortgages were reserved for homes in all-white suburban areas. This appraisal method came to be known as redlining. This color-coded criteria was central in determining who got loans and who didn't. They didn't say blacks couldn't get loans. But they did say communities in which there were few blacks could get loans. As a consequence, most of the mortgages went to suburbanizing America, and it suburbanized it racially. Today metropolitan America is made up of white suburbs and African American inner cities.

This appraisal system has greatly influenced the net worth or wealth of the average American today. Today, the value of the suburban house that was purchased in 1940 has gone up tremendously. So much so that the discrepancy between the net worth of these homeowners and the net worth of the inner-city residents and minorities that were excluded from these programs is astounding...

Source:Huffington post

The pace of borrowing by U.S. consumers fell in December for the fourth time in five months as the deepening recession and restrictions on bank lending crimped purchases.

Consumer credit fell by $6.6 billion, or 3.1 percent at an annual rate, to $2.56 trillion, according to a Federal Reserve report released today in Washington. In November, credit decreased by $11 billion, more than previously estimated and the biggest drop since records began in 1943.

Borrowing may shrink further with banks continuing to make it harder to get loans as they grapple with mounting losses and writedowns. Demand for credit is also sliding after consumer spending, which accounts for about 70 percent of the economy, posted a record six months of declines.

“The situation is ugly and will only get uglier,” said Richard Yamarone, director of economic research at Argus Research Corp. in New York. “Businesses are slashing jobs at an accelerated pace, and consumers are retrenching just as fast. The economy is in a freefall, and the severe contraction in credit underscores the crisis.”

Before today’s release, economists forecast consumer credit would drop $3.5 billion in December, according to the median of 30 estimates in a Bloomberg News survey. The Fed initially reported a $7.9 billion decrease in consumer borrowing in November.

Revolving Debt

Revolving debt, such as credit cards, decreased by $6.3 billion in December, according to the Fed’s statistics. Non- revolving debt, including auto loans and mobile home loans, fell by $288 million. The report doesn’t cover borrowing secured by real estate.

“Consumers have hunkered down, sharply reducing their spending and, consequently, sharply slowing their use of credit,” said Steven Wood, president of Insight Economics LLC in Danville, California. “Consumers are deleveraging along with the rest of the economy. This does not bode well for real consumer spending in the months ahead.”

For all of last year, consumer spending registered its smallest increase since 1961. Purchases are likely to keep falling at the start of this year as jobless rolls climb. The unemployment rate reached the highest level since 1992 and payrolls tumbled in January. Millions more may lose their jobs before a stimulus and emergency-lending programs temper the U.S. economy’s freefall.

Record declines in home values have also shaken confidence in the economy.

Jobless Rate

The jobless rate rose to 7.6 percent from 7.2 percent in December, the Labor Department said today in Washington. Payrolls fell by 598,000, the biggest monthly decline since December 1974. Losses spanned almost all industries, from construction and manufacturing to retailing, trucking, media and finance.

Underscoring the depth of the credit crisis, a majority of banks imposed tougher standards on consumers and businesses to qualify for loans in the past three months, according to a Fed report released Feb. 2, even after institutions received more than $200 billion of taxpayer funds. The financial system has incurred more than $1 trillion of losses and writedowns in the financial crisis sparked by a collapse in housing.

Charge-offs, which occur when issuers give up trying to collect payments on delinquent accounts, on retail credit cards reached a three-year high in December as late payments rose, according to Fitch Ratings. Charge-offs climbed to 10.5 percent last month, 49 percent higher than a year earlier, Fitch said in a report issued on Jan. 7. Fitch estimates that the rate may surpass 12 percent in the first half of this year.

American Express

American Express Co., the biggest U.S. credit-card company by purchases, said Jan. 26 that its fourth-quarter profit dropped 72 percent from a year earlier as more customers fell behind on loan payments. Credit card lender Discover Financial Services announced on Jan. 29 that failed customer loans will probably rise to more than 7 percent this year.

Auto sales plunged 36 percent in December, dragging the industry’s volume in 2008 to a 16-year low, and General Motors Corp.’s annual total was the smallest in its home market since 1959. What’s more, Toyota Motor Corp. and Honda Motor Co. reported their first drop in full-year U.S. sales since the mid-1990s after December declines of at least 35 percent.

Source:Bloomberg.com

Citizens Financial Group Inc.’s has launched new program to help nonprofit groups and customers address heat, utility and other energy costs.

As part of its Energy$ense program, Citizens provides more than $500,000 in energy assistance grants to homeless shelters and non-profit organizations that offer home weatherization and utility payment assistance to consumers. Through its Citizens Bank division,

The Energy$ense program includes two below-market interest-rate, unsecured loans for qualified borrowers to make energy-efficient upgrades or improvements to their homes. They are:

• The Citizens Bank Energy Efficiency Loan: Designed to finance weatherization projects to help make homes more energy-efficient, the $1,000, 3% APR fixed-rate loan has a three-year term with a monthly payment of $29.08. There are no fees or closing costs. Citizens Bank also is offering a 5% APR on loans up to $10,000 at terms payable up to seven years.

• The EZ Home Improvement Loan: A $1,000, 3% APR fixed-rate loan available to income-eligible borrowers who want to update their homes. Citizens is offering a 6% APR on loans for larger home-improvement projects, up to $10,000, payable up to seven years.

To apply for an EZ Home Improvement Loan or Citizens Bank Energy Efficiency Loan, homeowners should visit a Citizens Bank branch or call 1-877-TOP-RATE.

Source:Business First

Unsecured loans are designed to get approved even without pledging any security. It means that a borrower can access sufficient finances without loosing his valuable assets such as home, car etc. Since the loan amount does not require any security, the borrowers like non home-owners and tenants can also apply for this loan. The lenders approve the loan application on the basis of the borrower's monthly income and repayment capabilities. However, many loan providers also prefer to check the credit status of the borrower in order, to avoid any kind of risk. The lenders provide money to the borrowers as a loan and the borrower can repay the loan amount usually in regular monthly instalments.

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Eve is a business writer specializing in finance and has written authoritative articles on the finance industry. To know more about unsecured loans, please read:
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Big drops in house prices are going some way to creating a buyers' market.

But many kept on the sidelines by sky high prices are now excluded by lenders' miserly rationing of credit.

Where lenders were once up for 95 percent and even 100 percent or greater loans, 80 percent is the best they'll now do, so we are told.

That's not quite the case say mortgage brokers, as the select few can still bust the 80% loan to value ratio.

Here are some ways to do it.

Be income-rich and job secure

Dominic Davis from Mortgages By Design says borrowers need to be realistic about what is available.

"Borrowers should think of anything above 80 percent as a bonus. A loan above 90 percent is almost a miracle, 95 percent a miracle and 100 percent is out of the door," he said.

But lenders have indicated in some cases that they are willing to bust the new 80 percent line in the sand.

Davis said Westpac - one of those still willing to do deals - told him if a borrower was a real estate agent and his wife was in hospitality, they would be "singing in the wind" for a loan over 80 percent. Two people in safe professions - doctors, for example - would have a better chance but even then there was no guarantee.

Banks are worried prices could contract so fast they would erode the bank's security (and potentially their credit ratings as result).

Even if a lender were to go to 90 percent or more for a professional couple, they would find the sum they could borrow reduced, as the banks have raised their debt servicing ratios - usually expressed as the percentage of income that it takes to meet mortgage repayments.

Charlie Reid from Mortgage Link said: "35-40 percent might not be considered strong enough to justify a loan of over 80% [LVR], but if it is 25% that would be seen as strong."

There can be an extra cost to the higher loans. Kiwibank, which says "the door is still open" for higher LVR loans, adds an extra 0.2 percent onto the rate paid by borrowers over the 80 percent mark at the point the loan is taken out.

Reid said because they both reinsure some of the risk of higher LVR lending, both Kiwibank and SBS are still able to go above 90 percent more freely than other lenders.

Have a good broker/be a good talker

"There are no hard and fast rules any more," Davis said, which means having a broker as an advocate can make the difference in getting an application past the line, even with your own bank. The truth is that there are always people who can get a loan when someone else in the same position does not. These are the deal-makers and natural born negotiators of the world.

William Cairns of Cairns Lockie said there were still a few second mortgage lenders around, although Bluestone, Liberty and Pioneer had vanished from the market. If a person can borrow 80 percent from a bank, for example, a second mortgage lender might lend a further 5-10 percent. They will rank behind the first mortgage lender in terms of security, and so charge a higher interest rate, and usually want to be paid back at an accelerated rate.

Cairns said most residential second mortgage lenders tend to be private finance companies owned and backed by wealthy individuals and accessed only through specialist brokers. Cairns said they tend to charge 14 - 16%.

Have a pristine record and a long history with your bank

Davis said those wanting to go above 80 percent stood a much better chance if they had a long history with the lender. Having said that, some lenders, like Kiwibank, will still look at new customers for such loans.

Guarantors or co-buyers

Those wanting to buy a home without a deposit, or much of one, can get their parents, for example, to sign a guarantee over the mortgage. That will see some portion of the mortgage, say 20 percent, secured against the guarantor's home in the event of a mortgagee sale. That gives the bank the security it wants.

It's not without risk, however, as the bank could end up selling up a guarantor's home. Many borrowers might decide that it is too risky a thing to subject their loved ones to. Davis is sceptical of such deals. He said guarantors would in many cases be in a better position if they were down as "co- borrowers" with a legal agreement for the other borrower to make the repayments. At least that way they'd have the right to check the mortgage account online, receive statements and be able to monitor repayments.

Be poor

There are two pertinent government schemes: The Welcome Home Loan scheme (available from Housing New Zealand, Kiwibank, SBS and other selected lenders) and the Shared Equity pilot scheme.

They are designed to help lower income households to buy homes. The first allows for loans of up to 100 percent (with the risk to the lender insured by the government). The second, which is a very limited pilot requiring potential borrowers to go through a ballot, allows households to buy part of their home with the government buying and owning the rest. It looks like a white elephant in a falling property market.

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David Nelson dated his girlfriend for a decade before he proposed.

So it's no surprise that the Dublin resident and his wife, Tara, have spent plenty of time planning for another major milestone: the purchase of their first home.

The two-income couple toured dozens of properties during a one-year period, keeping a realistic price tag in mind -- one that would have sustainable payments if they have children and Tara chooses to stay at home.

They secured a real-estate agent several months ago, calculated a long-term budget and were pre-approved for financing, opting for a 30-year fixed mortgage with a low interest rate (and none of the surprises that can come with an adjustable rate).

The Nelsons, who this month will close on a $102,000 three-bedroom ranch in Grove City, are part of an uptick in first-timers taking the home-buying process slow and steady.

Despite aftershocks of the housing bubble and recession that seemingly favor new buyers -- a wealth of available homes, deflated prices and record-low interest rates -- the Nelsons were never in a hurry to claim just any deal.

After all, they've seen news reports of turbulent markets and home foreclosures, collapsed financial giants and ballooning mortgages -- factors enough to temper their optimism and remain grounded.

"Don't rush it," said David, 27, a heating and air-conditioning technician. "If you do, you're going to make a mistake."

They aren't alone.

A December survey by the National Association of Realtors found that first-time home buyers are taking longer to purchase a home, making larger down payments and considering factors such as commuting distance and rising energy costs with more urgency in their overall costs.

"You want to snatch up the first house you see, but you have to be patient," said Derek Cummins, a 12-year Columbus renter who four months ago started looking at homes in Grove City with his fiancee.

"With everything that's happened, you want to go into this with as much knowledge as you can."

First-time buyers are also fixing to stay put for longer, the study found. They plan to live in their homes for an average of 10 years -- a three-year increase from 2007 findings.

Such trends reflect buyer caution in the housing market.

"The one word that describes the market right now is confusion," said Nicole Yoder-Barnhart, a real-estate agent with HER Real Living.

"(Buyers) are doing their homework; they just don't always know what it all means."

Columbus-area real-estate agents -- including Yoder-Barnhart -- say the local landscape is full of prospects.

"It's one of the most opportune times I've seen in 35 years," said Gary Parsons, president of the Columbus Board of Realtors. "Sellers are rational, willing to negotiate and make a deal.

"I'd love to be a first-time home buyer today."

Figures released last month by the Columbus board -- dismal for existing sellers but attractive for newbies -- seem to echo that sentiment.

The number of homes sold in central Ohio dipped by 13.5 percent during 2008 (a total of 21,153, down from 24,445 in 2007).

The average sale price of a central Ohio home fell 5 percent in 2008 to $163,702. Meanwhile, a near-record-high average inventory last year -- 16,511 properties, an almost 70 percent increase over the number for sale at a given time in 2002 -- resulted in area homes being priced more competitively.

Cummins, the longtime renter, advises shopping around, even if one's budget seems restrictive.

"Sometimes you think 'Oh, I can't get anything good for that,' " said Cummins, 32, who plans to spend $120,000 on a home. "But the more you look, the more you get a feel of what things are going for."

That's a plus for budget-savvy would-be buyers.

"We're finding a lot of houses in our price range, which is nice," said Liz Wilmert, an Upper Arlington veterinary assistant who began looking at West Side homes in December with her husband, David. "It's like Christmas 10 times over."

The couple, transplants from Grand Rapids, Mich., intend to spend $150,000 for a fixer-upper or as high as $200,000 for a move-in-ready space. Liz can already picture an open kitchen; a lime-green master bedroom; and a sprawling backyard for her dogs.

Yet the Wilmerts, who don't intend to exceed a purchase price that's more than 2 1/2 times their combined salaries, aren't letting dreams eclipse their pocketbooks.

"We're not breaking the bank," she said. "We don't want to put ourselves in that position."

That's crucial, experts say. And it saves time -- and disappointment -- in the hunt.

"I give clients I work with the reality check," said Mary Hatem, a real-estate agent for HER Real Living. "There's going to be something decent they can buy; it just may not be stainless-steel and granite.

"And the days of 100 percent financing are pretty much gone."

Despite the tightening of credit lines and the elimination of seller-funded down-payment assistance, interest rates are at historic lows, and banks -- despite reviewing potential borrowers with greater scrutiny -- are still lending to those with acceptable credit.

But having some cash upfront is vital, said Jamie Sutton, a Columbus loan officer and co-author of The Complete Idiot's Guide to Mortgages.

"There are very few options for folks who don't have some resources, whether through gift funds, 401(k) or accumulated savings," Sutton said.

Federal Housing Administration loans -- government-assisted and -insured loans that are most common for new-home buyers -- require a down payment of 3.5 percent and a credit score of 500 or greater.

Adding to the perks: a federal tax credit. Congress last summer approved a credit of up to $7,500 for first-time homebuyers, who must repay the money over the next 15 years. The U.S. House has proposed making the money a gift instead of a loan, and, last week, the U.S. Senate version of the stimulus package raised the amount to $15,000. The bill must be signed by the president.

Specialty loans, meanwhile, exist for active-duty service personnel or veterans. The Ohio Heroes program, offered by the Ohio Housing Finance Agency, features a reduced interest rate for professions that include military personnel, first responders, health-care workers and teachers. Some loan options through the agency have less-stringent credit-score requirements, spokeswoman Erin Biehl said.

Last week, the agency revived its grant program that provides up to 2.5 percent of a home's purchase price for first-time buyers.

A high credit score (at least 760, Sutton said) is necessary to take advantage of prime interest rates -- which dropped to 5.38 percent last week for a 30-year fixed loan.

A rock-bottom rate, however, isn't always the best deal. Some low rates can require "discount points" (money paid upfront to secure a reduced rate). In some cases, the buyer might not recover the savings for years.

In the end, however, no one but the buyer can decide on a comfortable loan amount. And recent financial upheaval has helped spur a return to common sense.

"This has done nothing but bring us back to reality, reminding us how very important our credit is and to develop a savings pattern," Sutton said. "For those who are willing to embrace that, the (mortgage) process is really easy."

Jeremy Marshall, a sales manager who shares a North Side apartment with two friends, has spent his recent weekends scoping out homes in Dublin and Hilliard.

Meanwhile, he's been researching finance options and securing a lender.

The 27-year-old might take on a roommate in his future abode, but he isn't counting on that to offset what he could afford alone.

"There have been a couple of houses over my budget, but I'm not keen on that idea," Marshall said. "I'm looking at this as an opportunity to make an investment in myself.

"I'm going to make sure the home-buying experience is something safe."

kjoy@dispatch.com
Taking the plunge
Ready to buy? Consider these steps:

• Put finances in order first. Your credit score plays a vital role in the interest rates and loan terms for which you can qualify.

• Pay down existing debts and scan for errors on your credit report that might affect your credit score.

• Ask friends or colleagues to recommend mortgage lenders they know and trust. Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal if possible. Be prepared to show recent paycheck stubs, W-2 forms, bank statements and state or federal identification.

• Get pre-approved. By completing your mortgage application before choosing a home, you can determine how much money you can borrow. It also shows prospective sellers and real-estate agents that you're a serious buyer. Many sellers will require pre-approval before viewing an offer.

• Put together a list of features and benefits you want in a home. Consider price, location, size and amenities. Rank priorities so you know what you're willing to give and take. Be sure to consider school districts, commute times, nearby shopping possibilities and crime rates.

• Once you've surveyed what's available (whether through open houses, Internet searches or newspaper ads), get a professional involved. Consult friends and family members for real-estate agent recommendations, or look for recurring names on "For sale" signs in preferred neighborhoods.

• Found your dream home? Make an offer. Discuss the process with your real-estate agent. If the seller counters your offer, you might need to negotiate until you both agree to the terms of the sale.

• Get a home inspection. Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home and can help you avoid buying a home that needs major repairs.

• Shop for homeowners insurance. Lenders require that you have it. Compare rates and policies.

• Get an estimate of closing costs and make sure the money and necessary documents will be there on the appropriate day. Contact utility companies to establish service in your name on the day of settlement to avoid service interruption. (Call a few weeks ahead, as utility companies might require deposits, credit checks and early notice).

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