Home owner secured loan

Home Loan Modification Options For Those That Are Financially Struggling

2009-05-21T23:14:00.000+08:00

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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District Announces Over $1 Million in Settlements with Title Loan Lenders

2009-05-21T23:11:00.001+08:00

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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Home loan financing back to the days of common sense

2009-04-28T19:09:00.001+08:00

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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unsecured homeowner loans For Bad Credit

2009-04-10T20:52:00.000+08:00

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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Homeowners whose payments increase have some options

2009-04-09T20:51:00.000+08:00

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.

Homestead protections don't apply to all situations

2009-04-08T20:48:00.000+08:00

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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Moving to reduce foreclosures

2009-04-07T20:45:00.000+08:00

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.

Know more about loans for people on benefits

2009-04-04T20:36:00.000+08:00

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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Should I pay the mortgage or the credit card bill?

2009-04-03T20:32:00.002+08:00

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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Avoiding the trauma of foreclosure

2009-03-28T20:30:00.000+08:00

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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Bad Credit Unsecured Loans: Overcome your credit deformities

2009-03-27T20:29:00.000+08:00

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: Easy financing against the collateral

2009-03-26T20:25:00.000+08:00

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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Secured loans: For multipurpose usage

2009-03-19T19:14:00.000+08:00

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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How loans are secured is getting a long, hard look

2009-03-18T19:13:00.000+08:00

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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Home equity loans

2009-03-17T19:08:00.000+08:00

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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Secured Loans – Avail Higher Loan Amount against Collateral

2009-03-02T19:14:00.000+08:00

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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In a Bust, a Refinancing Boom

2009-03-01T19:12:00.000+08:00

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

Foreclosure plan stirring debate

2009-02-28T19:09:00.000+08:00

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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Refi Nation: Digging Out of the Mortgage Mess

2009-02-27T19:07:00.001+08:00

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

Guides awaited to fight home loss

2009-02-26T18:58:00.000+08:00

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

Republicans' 4% Mortgage "Stimulus" Is Latest Ponzi Scheme

2009-02-23T19:08:00.000+08:00

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

U.S. Consumer Credit Falls Fourth Time in Five Months

2009-02-22T19:04:00.000+08:00

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 offers energy cost aid

2009-02-21T19:06:00.000+08:00

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: No requirement of security

2009-02-20T19:02:00.000+08:00

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.

All said and done, it needs to be mentioned that as far as these loans are concerned, the borrowers often have to pay high rates of interest, as the lender has no security pledged with the borrowers. Most of the unsecured loans are paid in annual percentage rate (APR) and this is typically dependent on the credit rating of the borrowers.

Some loans are available on fixed rates of interest that means an individual knows exactly what their monthly repayment would be. Apart from this, the increasing interest rates may also get affected by the credit histories of the loan applicant. The credit rating reflects the history of the borrowers ,old repayments on the range of the financial dedications. However, in most of the cases people normally accept this loans for covering medical expenses, holiday expenses, study fee and other personal expenses.

There are so many lenders available across the financial market of the country. Finding the right lender to grab the best loan deal should be the ultimate motto of the loan applicants. A borrower with bad credit history such as arrears, IVA, CCJs, bankruptcy against his or her name can also apply the unsecured loans. All your personal and financial needs and requirements can be solved with this loans. You can easily get the loan amount without even pledging any security to the lenders. You can purchase a car, new home etc., with the borrowed amount. But there are some criterion for availing these loans such as your age should be above 18 years of age, you should possess a valid bank account of any U.K bank, identity proof, address proof and good monthly income.

You can also get unsecured loans at low rates through a comprehensive research of the present day market. The online searching method is considered to be the best way to get a low rate deal without getting the assistance from any agent. There are numerous online websites that provide these loans for any purpose for the people.

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:
Now Availing Unsecured Loans is Not a Hard Task.

Source

Brave new world in home help

2009-02-19T19:01:00.000+08:00

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.

Source

Debt Consolidation UK: Convenient Route to Get Rid Of Debts

2009-02-18T18:59:00.000+08:00

Debt consolidation UK not only refers to the taking over of all your existing debts and converting them into one, the service also offers you advice on avoiding such circumstances in future. There are many companies on the internet that are offering these services. Some are even offering advice for free. But since you need to get rid your debts, you must go for the experts in the field: people who can negotiate with your creditors to settle the debts at less amounts.

The consolidation services serve as an alternative to Insolvency. If you feel that your debts are now unmanageable and you may go insolvent, you need to contact a debt consolidation service as soon as possible. These are experts who evaluate your current situation financially and help you by way of taking over the existing debts. You can avail the advice regarding avoiding such debt traps in future too.

While there are no special eligibility criteria for people to go for Debt consolidation UK, you must be earning some income regularly which will help you repay the consolidation loan slowly. The experts at these companies assess your capacity and then decide on a plan. They first negotiate with the creditors so that they can write off the debt at a lesser amount. This helps you save money by way of loan.

Upon agreement by all the creditors, the total amount to be paid is calculated. This amount is paid directly to the creditors. Once this is done, you and the expert sit together to discuss the different repayment options. Considering your circumstances, the loan rates under the Debt consolidation UK are kept lowest. Then the monthly installment is decided. This installment is based on your income to expense ratio. Once done, you sign a contract and adhere to it strictly in order to write off this loan too. Besides, you also get to know the tactics to stay away from the loans in the future.

Andrew devan is a creative writer and gives advice timely in many finance related issues. To know more about Homeowner debt consolidation loans, Secured debt consolidation loans UK , Non homeowner debt consolidation loans, Debt management visit http://www.debtconsolidationloansuk.net

Buying with care

2009-02-17T18:57:00.000+08:00

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).

Source

Refinancing gives homeowners some breathing room

2009-02-16T18:53:00.001+08:00

Mortgage planner Ryan Rivera of Goldmine Financial Group in Auburn works with Auburn resident Mary McBain on a home refinance at his Auburn Folsom Road office.

If you have an adjustable rate mortgage and it’s about to reset, now would be the time to refinance.

With a tough economy that continues to spiral downward, a refinance can not only get a consumer into a secure fixed-rate loan, but it can save them as much as $350 per month on their mortgage payments.

However, the rules have changed or, as mortgage professionals say, gone back to “old school lending.” That means, you have to clearly show you can handle the loan.

“Money is very cheap to borrow right now,” said Ryan Rivera, a mortgage planner with Goldmine Financial Group in Auburn. “When it comes down to the new way of obtaining any type of mortgage, you clearly have to support the loan amount — it’s as simple as that.

“Rates are unbelievably low, which has triggered this tidal wave of refinancing.”

Mortgage rates have dropped as far as 4.79 percent during this refinance period, which started to gain momentum in late October of last year, according to David Ryland, dean of loan originators at Big Valley Mortgage in Roseville. But they have since leveled off into the mid-5 percent range, he added.

At one point lenders lowered rates to as low as 4.5 percent, but this was only for mere hours. However, other lending institutions did not follow the trend.

“It was like Frank the Tank running down the street streaking in the movie ‘Old School,’ but nobody followed,” Ryland said.

So what do lower rates mean to the consumer?

According to Ryland, monthly payment savings can range from $120 a month to $350, depending on the size and length of the loan and how low the interest rate can go down.

But homeowners need to be aware that there will be fees with that refinance, the days of no-cost mortgages are over. Lenders are no longer willing to cover closing costs in return for a higher interest rate, Ryland said.

Closing costs will generally range from 1.5 percent for loans in the $400,000 range, to 3.5 percent for loans around $100,000. In dollar amounts that can account for closing cost fees totaling $2,700 on the low end and up to $5,500 on the upper end.

Some forms of refinancing, such as conventional loans, will require appraisals. Others, such as Federal Housing Administration loans, make the process much easier.

“If you’re in an FHA loan, we do a streamline refinance all the way,” Rivera said. “Even if the house is worth less than what they owe.”

But Rivera and Rayland are quick to caution that if you have no equity left in your home, and you’re upside down, refinancing in most cases will not be an option.

So how do you know if you should be looking to refinance? If you have a loan balance that’s 75 percent to 80 percent of market value, and the interest rate is close to or above 6 percent, it’s worth investigating, Ryland said. Homeowners with that 6 percent interest rate can refinance a whole percentage point lower, and maybe even more, depending on the current state of the market.

Auburn resident Doris Marx took advantage of a refinance recently, locking into a 30-year fixed rate mortgage, which lenders say is the best bet for homeowners. Marx had a fixed-rate, interest-only loan that was close to 6 percent. Uncomfortable about the upcoming adjustment that would jump her payment some $400 per month, she decided to get into a 30-year fixed rate mortgage.

“With the market the way it is, I thought I better refinance while the mortgage rates were going down,” Marx said. “I was uneasy all along about the interest-only, with the mortgage rates dropping, it just gave me an opportunity to really go for it — go for the 30-year fixed.”

As interest in refinancing for a lower rate and getting into a secured 30-year fixed-rate loan increases, mortgage professionals also want consumers to think about how a refinancing would work into their overall plans.

“When it comes to taking a refinance it has to make sense and cents — both common sense and financial sense,” Rivera said. “You have to recoup the costs of refinancing.” read more

Is your home in a mortgage blackspot?

2009-02-10T21:26:00.000+08:00

As house prices fall, you could be locked out of top deals according to Savills, so take steps to boost equity while you can

Homeowners who took out two-year fixes last year are being urged to take steps to boost the equity in their homes — or face up to £3,000 a year premiums when their mortgage deals expire in 2010.

Exclusive figures from Savills, the broker and estate agent, reveal that hundreds of thousands of borrowers who secured mortgages last year with deposits of nearly 50% are likely to be denied access to the best deals.

House prices have fallen 17% since the start of 2008 and are generally expected to drop another 10% this year — meaning that these homeowners will see their equity fall below the 40% level at which the best mortgages can be achieved.

Melanie Bien at Savills Private Finance said: “Homeowners who thought they were safe could discover they no longer qualify for the cheapest deals. Others risk falling into the danger zone of trying to get a mortgage with little over 5% equity.”

society blamed low mortgage approvals for a 1.3% fall in house prices in January, or 16.6% in the past 12 months, despite an increase in inquiries from prospective buyers.

More than half of mortgages taken out last year were fixed-rate deals, with the vast majority over two years — so many will come to the end of their deals next year.

Borrowers in Exeter and Brighton took out loans with an average loan-to-value (LTV) — the loan as a proportion of the property price — of 57% and 54% respectively during 2008. With another 10% fall in prices they would be forced to borrow 67% and 64% by 2010 (see map).

If they took out their loan at the start of last year — before the 16% drop in prices during 2008 — they could see their LTV surge to 83% and 80% respectively.

Last week, Woolwich introduced a market- leading deal fixed at 2.49% for one year — but only for borrowers with a 40% deposit.

Those with that amount of equity in their home can achieve an average rate of 4.43%, while those with just 25% typically pay 4.68%, according to Moneyfacts, the financial-data firm.

On a typical £200,000 mortgage, the difference is £40 a month, or £480 a year.

The picture is worse for borrowers in Bristol and Cambridge, who will see their equity reduced to less than 25% and face paying an average 6.29%. That will cost an extra £220 a month, or £2,640 a year, on a £200,000 loan, compared with the best deals for those with bigger deposits.

Source

Freddie Mac To Start Leasing Foreclosed Homes

2009-02-09T21:25:00.000+08:00

Freddie Mac will begin offering leases to renters who face eviction as the result of foreclosure, the company announced Friday. The mortgage-finance company will also suspend through February all evictions of non-owner tenants in homes repossessed by the McLean, Va.-based company.

The policy follows a similar effort that Fannie Mae instituted earlier this month and that effectively turns the largest holders of American-home mortgages into big landlords, as well. Both programs will offer month-to-month leases at market rent to tenants whose landlords have lost the homes to foreclosure.

The policies are an about face from previous practice when lenders and mortgage companies would routinely evict tenants in homes that fell into foreclosure, even when the tenants were current on their rent. The government-finance giants have been under pressure from affordable housing advocates to take more steps to avoid tenant evictions.

Tenant advocacy groups have called on private lenders to follow suit, arguing that tenants have been inadvertently swept up in the foreclosure crisis. Lenders should “not be kicking a tenant out in the middle of a recession who has upheld all the terms of their rental agreement,” says Jim Carr, operating chief of the National Community Reinvestment Coalition. “It represents a really important and good faith effort not to compound the misery of these families.”

Fannie and Freddie will rely on property managers and some real estate agents to collect rents and provide maintenance for the homes.

Freddie Mac’s decision to offer leases to renters could allow 4,500 to avoid eviction, according to New Haven Legal Assistance. Fannie Mae estimates that 7,000 to 10,000 renters may choose to sign month-to-month leases and remain in their homes.

Source

New York City Real Estate in ‘Dramatic Slowdown,’ New Report Says

2009-02-08T21:23:00.000+08:00

Manhattan sellers’ pain is becoming buyers’ gain: The financial capital is a experiencing a “dramatic slowdown,” according to Mitchell, Maxwell & Jackson Inc., a New York residential real estate appraisal company. Prices have crumbled 15-20% from their peaks — with declines likely to continue — returning the market to price tags last seen in 2005.

“Buyers are in control,” said Jeffrey Jackson, co-founder of MMJ. After analyzing more than 350 contracts inked since Sept. 1, Jackson found that the fourth quarter’s contract volume plunged a “horrific” 75% from a year earlier. Because contracts take time to close — particularly in the brutal world of co-op board approval, this foreshadows just how tough the first quarter may be. Many deals negotiated before September have been redone at lower prices, while inventory levels are “ballooning as absorption of new developments drops off.” (See inventory data for New York and other metro areas.)

In the fourth quarter, 2,223 condos and co-ops closed, a 35% drop from a year earlier, based on data from The Real Estate Board of New York, a trade group. From the first quarter, the average price of condos and co-ops fell 11.5%, hitting $1.37 million in the fourth quarter. The median price for condos and co-ops meanwhile, peaked in the second quarter at $920,000 before plunging 17.8% to $757,000 in the fourth quarter. Year-over-year comparisons were not available.

“Retreating values are now clearly broad-based and affecting all neighborhoods, price points and property types,” Mr. Jackson said. But, he adds, there is hope. Contract signings have inched up in the last two weeks, as some sellers finally get realistic with pricing. “There are some rational sellers,” Mr. Jackson said.

Source

Robert B. Jacobs: 'Sold-out juniors can be a concern

2009-02-07T21:19:00.000+08:00

DURING the past two weeks, this column addressed some important issues concerning foreclosure. But as noted, foreclosure law is extremely complex. Self-help is never a good idea in complex legal matters, and even though a foreclosure may seem like a straightforward matter, many laws affect foreclosures and foreclosure liability.

Property owners either facing foreclosure or considering it should seek competent legal counsel. Only a skilled professional properly trained or experienced in real property foreclosure matters is prepared to render adequate foreclosure advice. When people ask me whom they should consult with respect to foreclosure issues, I always recommend that they consult a properly trained or experienced attorney.

Last week's column addressed some issues concerning a nonjudicial foreclosure. Nonjudicial foreclosures are those where a trustee conducts a foreclosure proceeding pursuant to a deed of trust, and where no lawsuit, summons or complaint is involved with the foreclosure.

The column stated that there can be no deficiency judgment in a nonjudicial foreclosure proceeding. That is a true statement. Even though there can be no deficiency judgment following a nonjudicial foreclosure however, an "adverse judgment" is still possible. This is because an adverse judgment is not the same thing as a deficiency judgment.

The details are as follows. If an owner defaults on a loan secured by a deed of trust, then the property can be sold to satisfy the amount remaining due on the loan. If the property is sold without a lawsuit, then there can never be any deficiency judgment against the property owner.

Deeds of trust are generally given priority according to the date they are recorded.

Senior, junior deeds

When two deeds of trust are recorded against a property, the first deed of trust is commonly referred to as a "senior" deed of trust. The second deed of trust is referred to as a "junior" deed of trust.

If the holder of the senior deed of trust forecloses and the property is sold, then the holder of the junior deed of trust becomes a "sold-out junior." Complex rules govern the rights of such a sold-out junior.

In some circumstances, however, the sold-out junior will have the right to file a lawsuit against the property owner based solely on the promissory note. This is allowed because the security, or the deed of trust, that secured the junior loan was "wiped out" through the foreclosure.

What this means is that when property owners have two mortgages or deeds of trust on their property, a very careful evaluation must be made to determine whether the property owner might be liable to the holder of the second deed of trust if the holder of the first deed of trust forecloses. This is all part of the very careful analysis that must be performed in determining the best course of action for an owner either facing or considering foreclosure.

Damage control

Guessing on these matters is not a preferred course of action. Sometimes it's difficult for a homeowner even to think about paying attorneys fees for advice with respect to a foreclosure. A lot of money already has been lost on the property, and the homeowner probably doesn't feel like spending more. But such expenses are paid in the nature of damage control. read more

Hand-wringing over bankruptcy bill

2009-02-06T21:16:00.001+08:00

Housing crisis Foreclosures are sweeping the nation.

A battle is heating up over proposed federal legislation that, if passed, would give bankruptcy judges unfettered power to modify mortgage loans in an effort to stop the surge in foreclosures sweeping the nation.

The Mortgage Bankers Association of Washington and other banking trade groups came out swinging last week, saying that the House bill, HR 200, and its Senate companion, S 61 — dubbed the "cramdown" legislation — would be a disaster for consumers in the long run and push the battered mortgage market into an even deeper downward spiral.

But financial advisers and other advocates applaud the bill, calling it a badly needed move to stem the tide of foreclosures and stabilize the housing market.

Under the proposed legislation, a bankruptcy judge could change the terms of a mortgage loan by cutting the interest rate, extending the term of the mortgage or lowering the loan balance to make the monthly payments affordable to the homeowner.

The term cramdown refers to the judge's ability to lower the value of the secured debt to the current appraised value of the home. Under the proposal, any homeowner who sells the home within five years after the principal is lowered would have to share profits from the sale with the lender.

About 10 million homeowners are at least 30 days behind on their mortgage payments, according to Gus Faucher, an economist with Moody's Economy.com in West Chester, Pa. He estimates the proposed changes in the bankruptcy rules could prevent as many as 800,000 families from losing their homes.

Initially, the bill was slated to be tacked onto the Obama administration's economic stimulus package, but was pulled at the eleventh hour to become a stand-alone.

The proposed legislation now appears to be on a fast track: An amended version of HR 200 passed through the House Judiciary Committee last week. Plans are now in the works to add it as a rider to the omnibus spending bill that will fund federal operations for the rest of fiscal 2009, which must be passed by March 7, according to a person familiar with the situation.

The omnibus bill will also contain other anti-foreclosure measures, including one that would allow lenders to modify securitized loans without facing legal problems from bondholders, the person said.

LENDERS LEERY

Banking groups aren't happy.

"Allowing judges to unilaterally alter mortgage contracts will do significant harm to consumers and further destabilize an already unstable mortgage market and consumers will end up paying the price," said David Kittle, chairman of the MBA's Vision Mortgage Capital LLC unit in Washington.

If judges start changing mortgage terms, it will introduce risk into the process and likely lead to "higher down payments, higher fees and higher mortgage interest rates for all borrowers going forward," he said.

Then there's the seven- to 10-year black mark that would appear on the homeowners' credit reports after they file for bankruptcy, Mr. Kittle said. This would hurt their ability to buy their next home, find employment, get a credit card or even rent an apartment, he said. read more

Give bankruptcy judges a chance to fix home loans

2009-02-05T21:12:00.000+08:00

You know you're in a tight spot when Bankruptcy Court begins to look like the least bad solution to a pressing economic problem. But the housing foreclosure situation is pretty ugly, so there we are.

Unfortunately, U.S. Bankruptcy Court isn't allowed to be part of the solution to rising foreclosures, thanks largely to the mortgage banking lobby. It's worth asking: Why not?

Consider the scale of the problem. The number of homes threatened by foreclosure today is estimated as high as 8 million, quadruple the number a year and a half ago. Nearly a quarter-million homes were lost to foreclosure last year in California alone. Experts agree that this is a massive drag on the economy. It undermines communities, drives home prices down, potentially below their fair market value, and creates huge losses for banks and mortgage investors.

Dozens of proposals to stem the tide have been tabled: Force lenders to dicker with every delinquent borrower, pay loan servicers more to avert foreclosures than to allow them, subsidize interest rates or principal values with taxpayer money. The solutions that have been tried, such as voluntary loan modification efforts by banks, all seem to help a tiny fraction of the expected number, in part because it's hard to distinguish deserving homeowners from those who should never have gotten a mortgage in the first place.

That brings us to bankruptcy. In Chapter 13, which is bankruptcy for working people who have fallen behind in their debts but don't want to stiff all their creditors, bankruptcy judges can help work out new terms on cars and boats and vacation homes. The process is known by the unlovely legal term "cram-down," evidently because from the creditor's standpoint -- well, you get the drift.

The only debt a judge is forbidden to cram down is a mortgage on a principal residence. Chapter 13 debtors either have to meet the loan's original terms, throw themselves on the mercy of their lenders (and we all know how gracious they can be) or give up the house. read more

10-K: FIRST SAVINGS FINANCIAL GROUP INC

2009-01-09T22:10:00.000+08:00

Income. Our primary source of pre-tax income is net interest income. Net interest income is the difference between interest income, which is the income that we earn on our loans and investments, and interest expense, which is the interest that we pay on our deposits and borrowings. Other significant sources of pre-tax income are service charges (mostly from service charges on deposit accounts and loan servicing fees), increases in the cash surrender value of life insurance, fees from sale of mortgage loans originated for sale in the secondary market and commissions on sales of securities and insurance products. We also recognize income from the sale of securities.

Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish allowances against losses on loans on a quarterly basis. When additional allowances are necessary, a provision for loan losses is charged to earnings.
Expenses. The noninterest expenses we incur in operating our business consist of salaries and employee benefits expenses, occupancy expenses, data processing expenses, federal deposit insurance premiums and other miscellaneous expenses. Our noninterest expenses are likely to increase as a result of operating as a public company. These additional expenses consist primarily of legal and accounting fees, expenses of shareholder communications and meetings, stock exchange listing fees, and expenses related to the addition of personnel in our accounting department.
read more

Repossession fears soar

2009-01-08T22:07:00.000+08:00

Hundreds of families fear they are in imminent danger of losing their home in the run- up to Christmas and in the New Year, The Belfast Telegraph has learned.

Despite the 3% cut in interest rates over the past two months and demands from the government for banks to be more lenient with defaulters, the number of homeowners seeking professional advice on avoiding repossession shot up by more than 400% in recent weeks, figures disclosed to The Belfast Telegraph show.

More than one thousand households stand to lose their home over the next few weeks, while many others will begin paying back substantial arrears on top of their monthly mortgage payments.

The government-funded debt charity Money Advice dealt with 123 mortgage and secured loan problems across Northern Ireland in the last quarter, amounting to almost £1m in arrears. This is a 434% increase on the same period in 2007, when the charity handled 23 cases to do with mortgages and secured loans amounting to under £100,000 in arrears.

Actions for repossession processed by the Northern Ireland Court Service have nearly doubled over the same period. The last quarter saw 1,006 homeowners issued with writs and summons through the Court Service compared with just 521 in the same quarter |of last year.

According to a forecast from the Council of Mortgage Lenders, repossession rates across the UK will increase by 67% on average next year and 4.4% of all mortgages will be in arrears by the end of 2009. Repossession rates in Northern Ireland are accelerating almost 30% faster — at around 93%, by the Court Service’s November estimate.

The figures follow urgent requests from Stormont for high street lenders to pass on interest rate cuts to mortgage |holders. read more

Family could lose their Auchinleck home

2009-01-07T22:05:00.000+08:00

A FAMILY could be evicted from their dream home because of a £25,000 debt belonging to someone else.

Linda Graham and John McMurdo may even be homeless by Hogmanay because the previous owners of their home failed to pay the massive debt.

The devastated couple also claim that their own solicitor has made a major blunder by failing to pick up on the debt tied to the house they bought in September 2006.

The law firm have now dumped Linda and John via email and a senior partner refused to speak with them because he had a sore throat.

Macintosh and Wylie were employed by Linda and John to handle the purchase of the two bedroomed house in Auchinleck.

But it seems that the firm didn’t discover the huge loan which is secured against the property by its previous owner. After trying to remedy the problem, the Kilmarnock based firm eventually confessed the error to the unsuspecting couple a few weeks ago.

Linda said: “They very much played it down and told us it was nothing for us to worry about.

“They said that in the worst case scenario, it was their fault and that their insurance would cover it.” read more

But, to the couple’s horror, they received a writ from Ayr Sheriff Court last week saying that bailiffs will be coming to take possession of the house as early as December 31

Behind the $700 billion bailout

2009-01-06T21:55:00.000+08:00

Recent reports of the $700,000,000,000,000,000,000,000,000 bailout of the U.S. banking system compels me to write a little (depending on what you think is "a little") about how finance works in the U.S. (Yes, I am aware that the actual number "only" has 12 digits in it.) Well, noticing how much I wrote it isn't a little, but it should provide you with an understanding of what that money is going to be used for.

If you go far enough back (18th century) you find the U.S. looked very much like a small country, because it was one. There was no central bank, every bank issued its own bank notes, each state might issue its own currency, etc.

The U.S. Civil War was was a debate over states rights, in which the Federal Government forcibly informed them that it had the final say over certain matters. Among these are fiscal policy and money.

At one time or another, the state of Nevada has wanted to issue a commemorative silver coin, but it has been unable to do so, specifically because the U.S. Constitution specifically forbids the states from coining money. Also, since states can't run deficits forever - and can't print money - states have to balance their books. The federal government does not have these restrictions, which is why the U.S. government constantly runs a deficit and prints money (or sells debt in the form of treasury bills and treasury notes, which is almost the same thing).

Upton Sinclair's famous book The Jungle (1907) showed that there were major deficiencies in inspection of food products. The "Pure Food and Drug Act" and other laws changed this. The occurrence of severe local depressions caused the "Federal Reserve Act" (1913) to establish a national bank so that now, the Federal government had the power to change what would be local depressions into national ones. In fact, the term depression was developed because it didn't sound as bad as panic, the former term. Now, politicians say recession because depression is too scary. I think they're starting to use the term "downturn" because now even "recession" makes them nervous!

The depression of (depending on whom you ask) 1929 or 1933 wasn't solved by President Franklin Delano Roosevelt's attempts to socialize the economy, it was solved when World War II reached America on December 8, 1941. (We declared war the day after Pearl Harbor.)

During the depression, a lot of people went to their bank to get their money out. Well, if you ever saw the bank run as shown in Its A Wonderful Life (which was actually a "Building and Loan" or what we would call a Savings and Loan or S&L today), a bank doesn't have the deposits in the vault, they've loaned out their depositors money. Before there was deposit insurance, if too many depositors show up, the bank closes its doors, and the banker tries to run out of town before the angry depositors lynch him. The bank is broke and the depositors who get there late probably won't get their money back.

Banks in the U.S. can be chartered either by a state government or by the Federal Government, this is indicated by the bank having the word "National" in its name or the abbreviation "N.A." for "National Association" (e.g. the full name of Bank of America is "Bank of America, National Trust and Savings Association" or "Bank of America, N.T.S.A."). Savings and Loans that are federally chartered have the word "Federal"; they do not have this word in their name if they are state chartered.) Banks that are state chartered do not have the word "National" in their name, e.g. the one-branch "Colfax National Bank" of Denver, Colorado, is chartered by a federal agency, while the twelve branch "Farmers and Merchants Bank of Long Beach, California," is a bank chartered by the Department of Banking and Finance of the State of California. Before the 1930s, outside of chartering banks at the Federal Level, the Federal government didn't really do much to protect depositors if their bank or S&L went broke. read more

Logbook Loans - Access Secure Cash without any Hurdle of Collateral

2009-01-05T10:05:00.000+08:00

Logbook loans are here available for those who are in need of some cash urgently but do not wish to putting themselves involve in any hectic work schedule while availing a loan. It is kind of personal loan that is secured against the logbook which is documents of a vehicle which is related to the current registration mark, VIN number and details about the registered keeper and here it is used for the purpose of securing the loan amount. It is a secure loan option for the individual who wish to access the sufficient cash with lowest interest rates and do not wish to put themselves in any formalities.

Basically these loans do not require any collateral except logbook of your vehicle but you have to fulfill the certain eligibility criteria of this loan. You should be 18 years of age or more than 18 years. You must have citizenship of UK with a regular employment besides the regular earning at least £1000 monthly. Vehicle should not be older than 8 years; it should be on the name of the applicant. There must not be any financial claims in the vehicle. The taxes and insurance dues must be cleared for the vehicle. And last but not the least a bank account must be possess on your name for last 3 to 6 months.

Advantages of the loan

These loans are suitable for the purpose of meeting whatever financial crisis without having any worry of collateral. By using these loans you can forget the stress of hectic formalities like any regular loan and avail a secure loan with the convenience of documentation.

If you apply for Secured loan against logbookyou may leave the worry of bad credit it is no matter for loan lender whether you have good credit or bad credit or facing CCJ, IVA, arrears, defaults, bankruptcy and insolvency. Infact at the time of availing these loans you don’t have to worry about collateral and you need to stake your home or property at any risk.

These loans are suitable especially for the people who are non homeowner or have nothing to pledge the security of a loan and for those also who have! But they do not wish to stake it at any risk in case of insolvency. It is a fast, secure, convenient and easy means of generating cash right away.

Source

It's not that hard to get a renovation loan

2009-01-04T10:03:00.000+08:00

Want to renovate your home? You will be glad to know that getting a renovation loan is not any tougher these days.

According to the Monetary Authority of Singapore's notice for unsecured credit facilities, it has not lowered the maximum cap of six times the monthly salary of the borrower, or $30,000, whichever is lower, for renovation loans since 2003.

A DBS Bank spokesman confirmed that the number of applications for renovation loans has remained relatively constant, and there has not been any change in the criteria for the approval of such loans.

Source

Switching mortgage brokers to get lower rate

2009-01-03T09:56:00.000+08:00

Q: I recently purchased a new home. Before I wrote an offer, I contacted three mortgage brokers to get a loan. After meeting with the brokers, I chose broker A, went through the application process and was approved for the loan. I signed a lock-in agreement to make sure that the interest rate would not change before closing.

In the four weeks before closing day, the stock market was very volatile. My real estate agent told me that mortgage rates were fluctuating up and down. One week before the closing date, market rates for my loan were about 0.5 percent lower than what I had locked in.

I asked broker "A" if he would consider lowering the rate in my lock agreement to the current rate. He said that his bank did not allow it. So I called broker B and asked if he could lock me in at the current rate. He took my application, processed my paperwork, and I signed another lock agreement for the current, lower rate.

Broker B ultimately closed my loan one week later. Is what I did illegal?

A: This is a very common problem when interest rates are fluctuating. When you locked in with broker A, I suspect he had to pay a fee to the company that was actually going to provide the money. That's the reason you were unable to lower your rate with broker A.

From my experience, I cannot recall ever seeing a provision in those lock-in agreements that would penalize you for going to another loan company. However, you have to read your agreement carefully to make sure that you are safe in what you did.

I sympathize with broker A; he spent time and money assisting you and at the last minute you went somewhere else. But what you did was not illegal.

Q: My partner and I plan to loan the full amount on a house for my son and daughter-in-law. We don't want to be on the title, but we want the loan to be secured by using the house as collateral. I would like them to be able to get the new-home-buyer credit and establish some credit history.

What is the best way to handle this situation and still protect us? Can I put a lien on the house? Do I need a lawyer?

A: Your son and daughter-in-law should sign a promissory note in the amount that you will be loaning them. This document spells out all of the terms and conditions of the loan - such as what interest rate will apply, when payments are to be made, and when the entire loan will come due.

They will also sign a deed of trust (called a mortgage in some parts of the country). This is a legal document that gives you the security (the collateral) that you need to make sure that you will ultimately be repaid. The deed of trust must be recorded among the local government land records where the property is located.

It should be noted that the deed of trust not only protects your money, but also gives the borrowers the right to deduct their interest payments on their annual income tax return. You will have to declare the interest as income on your tax return.

I do recommend that you retain an attorney to assist you. The lawyer will have to prepare all of the legal documents, and then record everything properly. The attorney should also be asked about the new "first time home-buyer" tax credit. It really is an interest-free loan that ultimately has to be repaid. And since it is so new, at the present time I do not know whether it would apply in your situation.

Q: I live in Canada. Is now the best time to buy property in the States as an investment? I want to buy and rent out, and wait until the price goes up, so what is the best type and location to buy?

I read that some detached single-family houses have dropped by thousands of dollars. Could the price of those houses in the future increase substantially? Any disadvantage?

A: Although both of the crystal balls on my desk cracked about a year ago, I remain optimistic about the real estate market. Even today, we are seeing pockets in the United States where real estate prices are rebounding.

My suggestion: Pick a geographical area that is of interest to you, and retain both an attorney and a real estate agent in that area. Have the agent locate a number of properties (some of which may have already been foreclosed upon and are being resold by the bank) and then make a trip to personally inspect each property. Once you make a decision, your attorney should be able to guide you through the rest of the process.

Are you going to use your own money or will you need to obtain mortgage money? You probably know that unless your credit is exceptionally good and you can put down at least 25 percent of the purchase price, you may have trouble finding mortgage money for investment properties.

You should also determine whether there are any laws in Canada that may affect your purchase of property in the United States. read more

Firms use own resources to fund realty projects

2009-01-02T09:54:00.000+08:00

International real estate companies are using their own equity and sales revenues to fund their projects with plans to launch alternative funding vehicles such as real estate funds.

Emirates Business spoke to Kuwait-based Al Mazaya Holding Executive Vice-President Salwa Malhas; India’s Sheth Estate International Chief Executive and Managing Director Ashwin Sheth; Saudi Arabia’s Tanmiyat Group Executive Director Rasim Kaan Aytogu; South Korea’s Sungwon Middle East Vice-President Richard Lee; Ireland’s CHI Development Chief Executive Roger Wakeham and Pakistan’s Rufi Real Estate & Construction Director Mehrooz Manzoor Rufi, who said were optimistic about the market but said tight liquidity conditions and exit of speculators were slowing down the realty sector.

Are you revisiting strategies with respect to your development portfolio in the UAE?

MALHAS: We have three categories of projects: One that are nearing completion; second that are mid-way into construction and finally projects that are in the design stage. We are totally committed to completing our on-going projects. We have funds in place and we have done feasibility studies on our design-stage projects. We are very optimistic about the Dubai realty sector. In all we have nine plots in Dubai that are yet to be developed. With respect to revisiting our strategies, we cannot ignore what is happening in the market. The units that we have not been able to sell, we are reworking our feasibility studies on those and will put a number of those units into our leasing portfolio.

AYTOGU: Well, the global financial crisis is making everyone in every sector re-examine the plans that they had in place before it hit, which is not necessarily a bad thing. Essentially, the economic slowdown will encourage greater caution in certain areas, which will benefit investors in the long run. So although we are expecting a quieter period as investors and buyers re-evaluate, we are confident that this will not last long and that we will be able to go ahead with our expansion and development plans, albeit at a somewhat reduced pace. In the meantime, amidst the current economic doom and gloom, there is a silver lining of positive opportunities for developers to press ahead with implementing restructuring and, hence, improvements to ensure better corporate governance and operational efficiency are in place in the medium and long term to take advantage of the next real estate cycle. read more

Understand risks in carry-backs

2009-01-01T10:00:00.000+08:00

I have this client who has been trying to sell his home for more than a year, and he walked into my office the other day with a huge smile.

Although unable to get a loan, a prospective buyer had proposed to do a "carry-back" sale. My client would accept a down payment and the buyer would make monthly payments to him over the next seven years at 8 percent interest. At the end of the seven years, the buyer would pay the remaining amount due in a balloon payment.

My client would make 8 percent interest, and he could get the house back if the buyer stopped making payments, a worst-case scenario.

Sounds great, right?

Maybe. When I asked whether his home was free and clear, my client's grin started to fade, confirming he still owed $250,000. When I reminded him that he risked foreclosure if any default occurred under the original loan, no more grin.

This wonderful deal had just become much more complicated. It actually was not a bad idea and may work under certain circumstances so long as a seller understands the risks. One creative way to sell a home is to use seller "carry-back" financing. As long as the seller can accept the business terms and risks associated with a carry-back, this type of deal could be appealing. In a typical carry-back, the seller agrees to accept a down payment in exchange for the buyer making monthly payments over a period of time at an agreed-upon interest rate. The seller will usually require a final balloon payment at some later date. If payments stop or the buyer otherwise defaults, the seller can foreclose and take back possession.

However, this structure can get complicated. If a seller has loans attached to the home, the seller is responsible to make payments and comply with all loan terms, regardless of who has title of the home. The seller ultimately could face foreclosure for any breach of any loan terms.

Furthermore, most lenders have a "due on sale" requirement that may prohibit or restrict transfer of the home while a loan is still in place (obtaining the lender's consent may be a solution to this restriction).

If a seller has an existing loan, an intelligent buyer will want to make sure that the lender will get paid as required under the existing loan terms. Even if the buyer makes timely payments, the seller could take the money and jet to Jamaica.

One solution would be to require an escrow agent to make the monthly payments. Instead of making payments directly to the seller, the buyer could pay the escrow agent, who in turn would pay the lender and forward any remaining amounts to the seller. Other scenarios may be possible.

The seller should take all the precautions that a lender takes when deciding whether a prospective buyer is a good risk. This means reviewing tax returns, pay stubs, credit reports, banking accounts, criminal records and so on.

Another idea may be a "lease-purchase" deal by structuring the transaction as a lease with a buyer's right to purchase the home at a later date. This could work, but the risks need to be understood, such as the seller needing to comply with all laws applicable to landlords, such as the Arizona Residential Landlord and Tenant Act.

All of this takes time and money. Normally, buyers pay these costs as "closing costs" in a typical lender-financed sale. Sellers could require the buyer to pay or reimburse these costs.

But don't hold your breath. A buyer in dire straits is most likely using every cent to pay the down payment and probably has little left over.

The most important thing to remember is this: Most agents, brokers and title companies are not sufficiently qualified to properly advise the participants regarding all risks and issues.

An attorney experienced with secured real estate transactions should be consulted, especially if you are a seller. The business and legal risks, including an agent's and broker's liability, could be enormous if anything goes wrong.

Proceed with caution.

Source

Failed Condo Hotel Turnarounds, Workouts, Bankruptcies and Opportunistic Investment

2008-12-30T09:51:00.000+08:00

Hotel Lawyer on restructuring distressed condo hotels: Restructuring distressed condo hotel projects and loans secured by them is moving to the top of the list for many lenders, owners and investors. Condo hotel deals are so complex and varied that there is no single "silver bullet" to take care of all problems.

Combining JMBM's legal and business experience in advising on more than 100 condo hotel and hotel condo deals with a veteran condo hotel expert, here is a 3-part article to explain: Part 1: the background and structure of the typical condo hotel, Part 2: critical differences between condo hotel restructurings and those with traditional hotels, and Part 3: a unique approach to working out some troubled condo hotel projects.

Long-term we are very bullish on well-conceived and executed condo hotels. The problem is that stakeholders have to survive through the short-term, and except in exceptional situations where there is unusual sponsorship, unique windows of financing, and special demand factors, the next few years will be very tough sledding. Properly structured condo hotels that have gotten financing for construction and end user sales, and completed their sales efforts prior to the housing bubble's bursting are fine. There is nothing inherently bad about condo hotels

JMBM's hospitality lawyers believe that condo hotels have earned an enduring place in hotel mixed-use development. They are viable. They make sense. They will continue to be very useful. Damning failed condo hotels in the current downturn is like bashing single family residences in the housing bust.

There is nothing fundamentally wrong with this type of property -- when it is structured properly and built in accordance with sound economics of supply and demand. Yes, there are a lot of poorly conceived and executed condo hotels that deserve their fate, but many sound projects are suffering now too.

A landscape littered with distressed condo hotel opportunity (and danger)

Although there is nothing wrong with the condo hotel concept, the landscape is littered with stalled condo hotel sales construction projects frozen in the financial deep freeze. Construction lenders, like Lehman, have reneged on binding loan commitments, and end-user financing has virtually disappeared. Many great projects are now in deep distress. Most condominium buyers are hiding under the bed at home, saving their money and hoping they don't lose their jobs. Most lenders are ignoring even great projects because they are hoarding capital to cover their capital depletion from derivative losses, no documentation home loans and investments with the likes of Bernie Madoff.

As the optimist said, "Somewhere in here there has to be a pony!" The question is: Can you find it? read more

Financial Services: Susma Patel

2008-12-28T19:04:00.000+08:00

Susma Patel is chairwoman and chief executive officer of First National Bank of Central Florida.

First National Bank of Central Florida is a locally owned community bank with six offices in Florida. The bank’s corporate headquarters is in Winter Park. The bank has approximate assets of $500 million, a $400 million loan portfolio and $400 million in deposits.

Patel has served as chairman of the bank for about two years and became CEO in July following the retirement of Charles W. Hall, who led the bank since October 2000.

First National Bank of Central Florida was founded in 1985 as a full-service commercial bank in Longwood. In 1999, the bank relocated its headquarters to downtown Winter Park. The bank’s income property financing programs include construction, acquisition, rehabilitation and refinance transactions for retail, office, and industrial properties for owner users. Additionally, the bank extends revolving lines of credit, equipment and vehicle loans, and letters of credit to qualified businesses. Its consumer programs include automobile, boat, airplane, CD and securities secured, home equity, and Visa/MasterCard.

The bank has a stated commitment to provide its customers with cutting-edge banking technology. This includes remote deposit capture, e-mail statements and CD ROM statements, Treasury Services, Positive Pay, Internet Banking and Bill Pay.

In May, First National Bank of Central Florida opened its newest branch in Apoka.

This year, Patel led the bank in a “green” campaign by offering business casual days the entire month of August for all of its employees and ensuring the air conditioning at each of its branch locations and departments throughout the organization are turned up two degrees higher than normal to conserve energy. The bank also began using scanners to create electronic copies of documents and a secure e-mail system to reduce paper consumption.

Patel, who is from Greenwich, England, came to the United States in 2001. Her background is in law and she was a practicing lawyer with Clintons, an entertainment and media law firm in London prior to joining First National Bank of Central Florida.

In the late 1990s, Patel became a majority shareholder of First Bancshares Inc., which is the parent company of First National Bank of Central Florida. She served as a director and then chairwoman of that holding company before assuming her role with the bank.

Source

Turning bad mortgages into assets

2008-12-27T19:02:00.000+08:00

At best, we are in recession. At worst, spiralling somewhere worse: a slump or depression or another negatively descriptive scenario.

Meanwhile, professional investors will be looking for opportunity - as for them, the definition of the word 'crisis' is when wealth is handed from the fearful to the brave.

Brave but not stupid. The professional investor, starts by looking at the overall macro-economic cycle. From growth to boom, boom to retraction, retraction to recession, and from bust to recovery, the professional investor will be looking for the strategies most likely to survive in those environments.

For recession and worse, the world of opportunity starts with buying "distressed" assets. The world will see the first wave of institutional and HNW buying simply because that world recognises that to make money, you need to "buy low and sell high".

Anything likely to have a higher price during an economic recovery might fit the "distressed" tag, with fund managers adding in titles such as "opportunity fund"; "event driven" and "value-based."

Equity Bridge Capital's (EBC) Warren Mal-schinger's view is that their arbitrage and opportunity fund is an early "distressed opportunity" founded in the US housing market.

Malschinger says the fund is "ready to turn investment into rewards fairly quickly due to favour-able restructuring incentives to homeowners and the will of government to underwrite further decline in the mortgage market; philosophically, the market has already turned". So what does it do?

Foreclosure Fallout

2008-12-26T18:59:00.000+08:00

In danger of losing your home? Don't give up; learn from Gilbert Ramos' example, and negotiate.

The thunderheads of Tucson's foreclosure storm have been gathering since the end of 2006. Whether they will soon disperse--or grow--remains to be seen.

Whatever happens will be of little consolation to the thousands of Tucson families who have already lost their homes to foreclosure. It will also offer little solace to those who managed to save their homes from the foreclosure process.

"There's a lot of stress, and you can't sleep at night," recalls 67-year old Gilbert Ramos of his foreclosure experience. Ramos was one of the lucky ones; with help, he kept the home his family has lived in for 15 years.

Most people facing foreclosure aren't so fortunate. While the local housing market hasn't suffered from the extraordinary foreclosure rates that cities like Las Vegas or Phoenix have, the area has been setting local records. The number of foreclosures in metropolitan Tucson nearly doubled from 2006 to 2007--and will almost double again in 2008, approaching an estimated 8,600.

The causes behind this dubious distinction are numerous. Both nationally and locally, the current financial storm was preceded by a period of rapidly rising home prices and the use of "creative" mortgages which seemingly allowed almost anybody to buy a house. read more

How to fix the housing mess

2008-12-25T18:57:00.000+08:00

The government has been trying to stabilize the housing market for over a year with no luck. Here are three fresh ideas from the private sector that just might work.

What can the government do stabilize the housing market?

Policymakers have been searching for an answer to that question for the past year as the tally of home foreclosures continues to surge and home prices continue to plunge.

So far, the Troubled Asset Recovery Program has been a disappointment, focusing more on shoring up the banking system than on addressing the problems of homeowners. While Federal Deposit Insurance Corp. chief Sheila Bair has been an outspoken advocate of mortgage modifications via rate reductions and term extensions, the Fed and the Treasury have been more intent on providing cheap mortgage financing via Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), and cutting interest rates in a bid to make monthly mortgage payments more affordable.

What's worse, even mortgages that have been modified often go back into default within six months, the Office of the Comptroller of the Currency said this week.

"Modifying mortgages is an unbelievably labor-intensive thing," says Len Blum, a managing director at New York investment bank Westwood Capital. "Each case is different." read more

Finding current market value dicey in today's climate

2008-12-24T18:55:00.000+08:00

The credit crisis profoundly affected the home loan business. Lenders' underwriters now scrutinize every aspect of the mortgage approval process, including the property appraisal.

Most lenders now require that buyers make a down payment to ensure they have an equity stake in the property. Lenders are also concerned about declining property values.

Freddie Mac and Fannie Mae guidelines, which set the standard for the appraisal industry, require that an appraiser use comparable sales that closed within the last six months. However, today most underwriters want appraisers to limit their comparable sales to those that closed within the last two to three months.

Lenders' underwriters also ask appraisers to provide more information about the local home sale market than was the case a few years ago. They want information about comparable listings that are pending and those that are currently on the market. A pending sale is one where the seller has accepted an offer, but the sale has not yet closed.

Closed sales, even if they are relatively recent, might not reflect current market value if the local market is declining. If the list prices of comparable properties that are active or pending are lower than the recent closed sale prices, this would indicate that the market has declined. An appraiser will take this into account in his or her valuation. read more

New Nascar Home in Kern County in Trouble

2008-12-23T18:54:00.000+08:00

onstruction has stopped and owners of the half-finished race track west of Bakersfield have defaulted on their loan, placing the future of the track in jeopardy.

Track owner Alan Destefani planned on financing track construction from the sale of some 36-hundred acres of farmland to developers.

But the deal with Los Angeles investors fell out of escrow in the summer of 2007, partly because of the housing slump.

Destefani later secured new financing, and construction resumed, but now Destefani farms has defaulted on the 4.5 million dollar construction loan.

"The default was caused by us exhausting all the cash resources that we had available to us. The stock market, the housing market, it's all kind of a perfect storm. Stopping making those interest payments caused the default," said Chief Financial Officer for Destefani Farms Tim Elrod.

The default could lead to foreclosure, but Elrod says the Destefani family is pulling out all the stops to find additional financing to not only finish the track but to pay subcontractors some two-million dollars they're owed.

Source

Many spots sore for Taunton

2008-12-22T18:50:00.001+08:00

Dilapidated, neglected properties driving down housing prices

Taunton —Condemned. Foreclosed. Neglected.

Properties generally considered to be eyesores fall under one of those three categories.

Whether it’s due to foreclosure, rental vacancy, health hazard or a negligent owner, the fact is no one appreciates sharing a block with a blighted property.

“This used to be a nice neighborhood at one time. It’s too bad the way it is now,” a frustrated John Bisio said.

Bisio, 82, lives on Myrtle Street in a modest but neat house he bought from his mother some 40 years ago. During that time, he’s installed siding, new windows, painted the place and kept a small grape vine in his back yard.

More recently he’s begun erecting a brand new fence in the front yard.

If only everyone else on his short thoroughfare were nearly as conscientious.

Bisio pointed to two single-family houses on the other side of the street.

In the backyard of one, and clearly visible to passerby, a huge tree trunk that obviously had been cut down lay on its side amongst other assorted refuse.

“Would you want to live next door to that?” he asked.

Bisio said the woman who lives there has a good job and has been trying to sell.

But “it’ll never sell fast the way it is,” he said.

Next door to that is another single-family house, this one with a couple of old mattresses leaning against its back side, and a backyard that is likewise messy. read more

Banks not in a hurry to cut rates

2008-12-19T20:47:00.001+08:00

A likely cut in lending rates by banks may fall short of borrowers’ expectations. While some banks may do a token rate cut this week, and

lower the rates for small-ticket home loans, many banks will take a call on bringing down rates across the board after the advance tax outflow, which takes out the liquidity from the system.

Most banks are expected to bring down interest rates

by end-December. Rates on home, auto and consumer loans may come down less than the one percentage point cut in key policy rates announced by RBI on Saturday.

Till now, only ICICI Bank has announced a cut for a category of home loans. While the interest rate has been lowered by as much as 1.5 percentage point, the lower rate is only for new borrowers taking loans up to Rs 20 lakh. Most banks are not in a hurry to lower lending rates for retail customers considering that delinquencies on retail, SME and corporate loans are rising. read more

Will economy get on track?

2008-12-18T20:45:00.000+08:00

If the Wall Street executives who ignored ethical lending standards had a theme song, I imagine it would be "For the Love of Money" by The O'Jays: "For the love of money, people will lie, Lord, they will cheat. For the love of money, people don't care who they hurt or beat."

Unlike the fate of the people in the O'Jay's anti-greed ballad, Treasury Secretary Henry "Hank" Paulson rewarded the Wall Street executives who wrecked our economy with a $700 billion handout -- while millions of regular folks are losing their homes, jobs, nest eggs, retirement accounts and college funds. Families lucky enough to still have the money to pay their mortgage are watching their equity implode as housing prices plummet.

Nevertheless, addressing the immediate and crushing problems of the average American family paying for the $700 billion bailout, says Paulson, a Wall Street multimillionaire, wouldn't be a good investment. Paulson will be removed from the Treasury Department come Jan. 20, 2009.

Unless we address the tsunami of foreclosures still sweeping through every town and city in America, the forecast for the financial health of the average American family will be even bleaker. According to Credit Suisse, a minimum of 2 million family homes will be lost to foreclosure in 2009. That's on top of the 700,000 homes already lost to foreclosure. Almost 3 million families -- that's approximately 12 million men, women and children in America kicked out of their homes. read more

Tips on whether to refinance your mortgage

2008-12-17T20:43:00.000+08:00

Figure out whether lower rate will still save money after you factor in closing costs.

The Federal Reserve's decision to buy up mortgaged-backed securities has caused mortgage rates to fall and created new opportunities. But it has also raised a question: Should you refinance your mortgage now?

Before you rush to refi, take a few minutes to determine if it's the right move. Refinancing involves starting over and applying for a new loan. Whether homeowners deal with the original lender or a new one, the new loan will pay off the old loan and the borrower then makes payments according to new loan terms.

Good reasons to refinance include getting a lower interest rate, shortening the term of the mortgage to build equity faster, lowering monthly payments or switching from an adjustable rate to a fixed-rate mortgage.

Even if you just secured a new mortgage recently, it might make sense to refinance. Homeowners should consider refinancing if, in the long run, it will save them money.

First you have to find out the cost of getting the new loan. Refinancing can cost around 2 percent to 3 percent of the total loan amount. To determine if it will save you money, calculate your break-even point. You can calculate it by dividing the mortgage fees by the monthly savings. The answer you get tells you how many months it will take for you to break even. read more

The Judge Live: Your questions answered - part 1

2008-12-16T20:40:00.000+08:00

The estate agent I signed up with to sell my house demanded double the money when the first buyer pulled out and it had to be re marketed. Do I have to pay him?

The likelihood is yes, but you should refer to the contract you signed with the estate agent for clarification. It is common for a contract to state that payment is due only upon conclusion of missives. But as the first buyer withdrew, he should be responsible for the costs. Pass the matter to his lawyer as part of your claim for damages in terms of the buyer's breach of contract.

I have been working for a firm for four years but do not have a contract. I have asked my boss for one but I'm getting nowhere. I also tried to claim out of pocket expenses as other employees do, but have been told I can't as I don't have a contract. What can I do?

You are entitled to a written contract within two months of your employment commencing and as the company has not provided this, you have the right to take the matter to an employment tribunal. The tribunal would also decide whether or you have a right to expenses. read more

Center owner cites debt in filing

2008-12-15T20:37:00.000+08:00

More than two months after the abrupt closing of the Sylvan Learning Center on North Main Street, owner Mitchell J. Kupperman, of Longmeadow, has filed for Chapter 7 bankruptcy.

The East Longmeadow, Glastonbury, Conn., and Madison/Clinton, Conn., centers were franchises operated by Northeast Learning Center Inc., based in West Springfield. Most parents learned the East Longmeadow center had closed when they read a sign on the door Sept. 25 stating the building was "temporarily closed."

"No one ever informed us personally," said Steven Koldys, the father of a 7-year-old boy who took courses at the East Longmeadow center. "We were left to deal with the corporate offices."

Representatives from Sylvan Learning's offices in Baltimore, Md., encouraged parents to transfer their children to another location.

The closest centers to East Longmeadow are in Hadley, Vernon, Conn., and West Hartford, Conn. Another option is to enroll children in Sylvan's reading and math programs online.

Sarah Hollman, director of the East Longmeadow center at the time of the closing, said there were at least 79 students receiving tutoring.

Kupperman, represented by Springfield lawyer Edward V. Sabella, filed for Chapter 7 bankruptcy Nov. 26 at the U.S. Bankruptcy Court for the District of Massachusetts Western Division. read more

Research and Markets: This Essential 2008 Report on UK's Non-standard Unsecured Personal Loans is Now Available

2008-12-14T19:44:00.001+08:00

Research and Markets ( http://www.researchandmarkets.com/research/ebc8b4/uk_nonstandard_un) has announced the addition of the "UK Non-standard Unsecured Personal Loans 2008" report to their offering.

The recent depressions in the financial markets have affected consumer lending significantly, not least in the non-standard segment. As the country's economy wanes, the number of non-standard individuals is set to increase, but what does this really mean for non-standard unsecured lenders and the related market? This report provides the answers.

Scope

Sizes the UK non-standard population, the UK unsecured loans market and home collected credit market and presents five year forecasts for each. Discusses competition in the UK unsecured loan market and provides market share data for the major competitors in the home collected credit market. Gives insight into the future challenges of these markets.

Highlights of this title:

With economic growth waning slightly, 2007 brought further increases, spurred on primarily by changes in employment status. As the credit crunch starts to impact the economy, particularly through mortgage defaults and repossessions, the non-standard population looks set to increase dramatically going forward. The non-standard unsecured loans market recorded yet another subdued performance in 2007 as the cost of lending increased due to the freezing up of the wholesale money markets. The market is now bracing itself for some very difficult challenges as factors that have previously driven this market are declining significantly. The competitive dynamics of the home collected credit market are set to change, as some lenders seek to reduce exposure while others continue to mop up additional market share. While this market has continued to perform poorly in financial terms, lenders remain upbeat. read more

Foreclosure looms for owners of Duncanville's Cherry Pit swingers club

2008-12-13T19:41:00.000+08:00

The owners of Duncanville's Cherry Pit swingers club face foreclosure on the home where they have hosted sex parties for hundreds of Dallas-area swingers.

According to a case filed in Dallas County's 116th District Court, Jim Trulock is six months late on payments to his $163,600 mortgage. He owns the Cherry Pit along with Julie M. Norris.

The foreclosure hints at the couple's financial difficulties stemming from a slew of legal trouble that began last year when the city of Duncanville approved an ordinance outlawing the sex club operation.

Mr. Trulock, 60, recently posted a message on the Cherry Pit Web site asking for investors to donate $100 to help with legal fees and court fines imposed on the couple.

"In the past we have asked for donations for the legal defense fund to fight the illegal activities of the city of Duncanville," it says on the Web site. "Now we seek investors, both large and small, who want to invest in our defense and get a return on their money when the civil suits are settled against the city.

"If you cannot invest," the posting continued, "think about people you know who might be interested in investing in a landmark swinger's case and making a good return on their investment." read more

Time is on your side

2008-12-12T19:35:00.000+08:00

ARM with a long fixed-rate term gives homeowner time to plan

Question: I have a mortgage that is 12 months into the loan. The mortgage is an interest only jumbo, 6.5% fixed for 10 years, then it is adjustable for the next 20 years. I have been paying on time and my credit score is 820. Do you think I can get the bank to agree to give me a new loan fixed for 30 years with interest and principal? I worry that after the 10-year, interest-only period, the payment will shoot up to a point that I might not be able to pay. I am self-employed. A no-doc loan was recommended because it was easier to get approved. I worry that I won't be able to stay in house when it comes time to retire. Mat.

Answer: Calm down there, Mat. You have nine years to go before the loan switches to an ARM. That's a long, long time in the mortgage rate world, and no one -- I repeat, no one -- has even the slightest clue what loan costs will be in 2017. Hopefully, by then things will have settled down to a point that resembles normalcy. Hopefully, they will settle down sooner, much sooner.

Also, I want you to look at your loan documents to see if there is an interest-rate cap. Usually, there is a ceiling above which your rate cannot go, no matter what the market does. Typically, it's two percentage points above the market rate at the time you took out your loan. The cap is your fail-safe point. You will never, ever be charged more than that rate. So at least you know what your worst possible situation can be, and you can proceed from there.

For the time being, watch rates closely so that if they drop down to a comfortable level, you can try to refinance. But be forewarned, the jumbo market is all but closed, even to folks with superior credit. If you were lucky enough to find a lender who is dabbling in that sector, the cost is very expensive, probably one or two points about the rate for conventional conforming mortgages. Also, since you are self-employed, you'd probably be hit with a risk premium that would take your rate higher yet. read more

Former Atascadero developer Gearhart and lenders being investigated over loan defaults

2008-12-11T19:28:00.001+08:00

Two North County hard-money lenders, Hurst Financial and Real Property Lenders, and real estate developer Kelly Gearhart are the subject of a criminal investigation, Deputy District Attorney Steve von Dohlen confirmed Thursday. The state departments of Real Estate and Corporations, the District Attorney’s Office and the FBI are cooperating in the high-profile investigation.

A criminal investigation into a third lending company, Estate Financial Inc. of Paso Robles, led to arrests in October of the principals of that firm — Karen Guth and Joshua Yaguda. They face more than 20 felony allegations for crimes such as fraud. They remain in County Jail, with bail for each suspect set at $5 million. The arraignment for the pair has been continued to Dec. 12.

All three companies — Hurst, Real Property and Estate Financial — pooled investors’ money to fund high-interest loans to real estate developers. Lending was based on the value of real estate used as collateral. The companies charged higher interest rates than banks because the deals were considered riskier, and typically did not conform to bank standards. read more

Restore TARP to Its First Purpose

2008-12-08T19:30:00.000+08:00

This month, the stock market dropped precipitously after the announcement that the emphasis of the Troubled Assets Relief Program would be shifted to direct equity infusions into banks and away from buying their "toxic" mortgages. This change was especially confounding because, when he first proposed TARP, Treasury Secretary Henry Paulson suggested that the financial crisis would not end until the mortgage market stabilized. The favorable reaction to the plan to backstop Citigroup's mortgage portfolio, as well as the government's announcement yesterday that it will buy additional mortgage-backed securities, is powerful evidence that Paulson had it right the first time.

The market wants to understand the dimensions of the losses that banks face from their mortgage holdings. We believe that using a significant portion of TARP's remaining assets for its original purpose -- buying distressed mortgage assets -- is the fastest and most reliable way to achieve that. read more

Excellent credit to bankruptcy' in two years

2008-12-07T19:28:00.000+08:00

Hoping to earn $50,000 in three years to help pay for their son's college education, an Iowa couple joined what was described as a risk-free housing investment program run by a Springfield company -- only to find their lives in financial ruins two years later.

"From excellent credit to bankruptcy, you can't imagine the stress," said Tammy Speidel of Bettendorf, Iowa.

The lives of the couple -- and other investors in Greenleaf Company of Springfield -- have been unraveled by Greenleaf's failure to get enough occupants into the homes it had persuaded the investors to purchase during the housing boom.

Whatever money it receives these days from paying occupants, Greenleaf uses to keep itself afloat -- rather than remitting the money to investors who own the homes so those people could meet their own mortgage obligations.

Some investors have seen their homes foreclosed on, and occupants often have little clue their homes are being lost to foreclosure.

Greenleaf is blaming the mess on a soured economy, and company officials have been telling investors and others for months that help is on the way, although they declined to provide specifics. read more

Let bankruptcy help fix bad mortgages

2008-12-06T19:25:00.000+08:00

I watched a middle-aged widow lose her home recently. Her story was familiar. She owned her simple brick residence outright until four years ago, when a mortgage broker stopped by and offered her a loan too good to be true. In exchange for taking on a modest monthly payment, she could make some needed repairs and consolidate other debts.

More sophisticated than many borrowers, she realized she was getting an adjustable-rate mortgage. What she didn't realize was that, in the biggest "bait-and-switch" ever pulled by an entire industry, her ARM was not tied to the prime rate or any other index, as adjustable-rate mortgages have traditionally been. Her rate adjusted periodically, ever upward. When it hit 14 percent, her social worker's salary could no longer cover the payments.

I watched this story unfold in court, from my seat in a bankruptcy judge's chair. While a Chapter 13 filing temporarily stopped the foreclosure on this woman's home, it did little more than buy a few months' time.

Under existing law, bankruptcy courts cannot modify the terms of home mortgages. To keep her home, this debtor needed to demonstrate sufficient income not only to make her ongoing payments but also to cover the payments she had defaulted on. Her proposed plan was clearly not feasible based on her salary, so I had no choice but to lift the stay and allow the foreclosure to continue. read more

Home Business & Finance Markets Deals Mergers & Acquisitions IPOs Private Capital Hedge Funds Regulatory News Dealmakers Small Business Industries In

2008-12-05T20:13:00.000+08:00

U.S. banks and thrifts are launching an offensive against a proposed federal rule that would boost costs on one of their last reliable sources of funding for loans.

Financial institutions have sent more than 100 letters to the Federal Deposit Insurance Corp over the past month protesting a proposal that the government agency says would help restore its deposit insurance fund.

The FDIC charges U.S. banks to insure their deposits. The agency is considering boosting fees on banks that fund loans in significant amounts through secured borrowing from institutions such as the Federal Home Loan Banks rather than through deposits.

The rule is meant to ensure that banks pay insurance fees that are proportional to the risk they pose to the insurance fund. Under current rules, a bank that borrows from a Federal Home Loan Banks pays smaller insurance fees than one that relies on deposits, even though risks of failure and costs to the FDIC may be the same, the agency said.

Bankers say loan advances from the Federal Home Loan Banks are now one of their few reliable sources of funds. The proposed increase of up to 50 percent over current assessments could stifle lending at a time when credit is already at its tightest in years, and economists say a long U.S. recession appears inevitable. read more

Feds Uncover Massive LI Mortgage Scam, Cocaine Ring

2008-12-04T20:09:00.000+08:00

Sixteen people were charged in a grand jury indictment that was unsealed on Nov. 19 with bilking mortgage lenders out of more than $13 million dollars in loans in connection with approximately 28 Long Island properties, according to federal prosecutors. Three of the defendants charged with mortgage fraud were also indicted for participation in a cocaine distribution ring, says a spokesman for the U.S. Attorney for the Eastern District of New York.

Immigration and Customs Enforcement investigators, along with members of the Organized Crime Drug Enforcement Task Force, uncovered the two separate fraud schemes and the drug ring. The complex scams involved mortgage brokers, real estate appraisers, loan processors, and a bank employee, Gloria Espenas, the former vice president of a JP Morgan Chase branch in Nassau County.

In the first alleged scheme, Robert Guerrero, owner of Property Cash in Greenlawn, and Gary Jacques, owner of Home Cash in Huntington Station, used their companies to purchase Long Island real estate. In some cases, the men would trick homeowners who were in danger of defaulting on their mortgages into signing over their property titles to Home Cash or Property Cash, after promising the victims they could prevent their homes from being foreclosed upon, prosecutors say. read more

Foreclosed and forgotten

2008-12-03T20:06:00.000+08:00

It's a massive problem affecting thousands of Indiana homes and, no matter where you live, it's happening in your neighborhood, too. 13 Investigates takes you inside the area's dangerous - and even deadly - foreclosure crisis.

From starter homes in Greenwood to million-dollar mansions in Geist, tens of thousands of homes throughout central Indiana are now vacant, abandoned or in foreclosure.

While some of the properties are being well maintained, most are not.

The high weeds, garbage, neglect and abuse outside the homes create an eyesore for neighbors, but what lies inside the houses can be even worse.

Open door policy

Because many of the properties are not properly secured, WTHR found many homes with doors, windows and garages that provide easy access. In fact, some are wide open.

13 Investigates' tour of abandoned homes found properties that have been ransacked and vandalized. Others have collapsed ceilings. Rotten food, mold and mildew create foul odors that neighbors call "unbearable."

Janice Banks lives across the street from two foreclosed and vacant homes on Villa Avenue in Indianapolis. She says it's been years since she has seen anyone care for the unsecured properties, which are now surrounded by high grass and weeds and littered with trash.

"Somebody's got to do something," Banks said. "It's a mess and I don't want to live across from that."

City officials tell WTHR they have not received any recent complaints about the Villa Avenue properties, but after seeing the homes firsthand, they admit the homes do need attention. read more

Author reveals Eight Ways to Save or Sell a Home in this Terrible Real Estate Market

2008-12-02T20:03:00.001+08:00

The current Real Estate market stinks. Selling your property will require a discounted value and a long time to sell. When their is so much supply and little demand, basic economics falls into play. The current free fall of housing values, increase in foreclosures and no process to borrow has created the "Perfect Storm". The American Dream has become the American Nightmare. How can you survive in this market?

Lets examine the different approaches the homeowner can take to survive in this current economy. If you want to sell your property ,but the price of the house has declined by 10% to 30% what can you do. The conventional approach will not work, So lets examine different approaches. The Lease Option Conversion Program allows the owner to market to a potential buyer who can make payments but needs time to save up the downpayment. Example, if the rents in the area are $1,500.00, the a Lease Option will generate about $2,200.00. This amount should be enought to cover the mortgage payment, the option money would be about $5,000.00 and over a 2-3 year period the potential buyer can save up enough with credits, to exercise the contract. The Contract of Sale program allows the seller to market their property to buyers who make good income but need to repair their credit. With so many foreclosures potential buyers who need tax benefits, can purchase while they repair their credit..

Tax benefits go to the buyer and fee title stays with the seller. Under the contract the vendee/buyer pays the underlying mortgage, property taxes, insurance and all expenses. The short sale is done after all other methods to sell the property have been tried. The short sale is where the seller is either going into foreclosure or has to sell. The seller can not receive any proceeds but can stay in the house while it sells. The house sells at a discount, the homeowner is relieved of the debt and under current hardship laws is forgiven. The homeowners credit is hurt but not as bad as a foreclosure/bankruptcy. Finally, if you want to leave the house, but it cannot be sold, try to interact with the lender and offer a Deed in Lieu of foreclosure. The mortgage company might take back the house if you co-operate, rather than go through the foreclosure process. read more

Housing crisis hitting home

2008-12-01T22:33:00.000+08:00

Hammer on nail formed the economic drumbeat in McHenry County for many a year.

For more than a decade, growth spelled boom times for trades people, Realtors, developers, building material suppliers and retailers. It pumped millions of dollars into the local economy through wages, purchases and sales taxes. Government coffers reaped a steady flow of the funds that come with increasing property values where new homes replaced cornfields.

The dust flew as bulldozers tore into the earth, carving thousands of foundations for homes and the businesses that follow rooftops.

In Huntley alone, 1,157 single-family home permits were issued as recently as 2003.

Lately, though, the silence is deafening. Through October of this year, Huntley has seen just 100 detached single-family home permits pulled. The story resounds in communities throughout McHenry County, from Cary, where four permits were issued during its last fiscal year, to Woodstock, where 32 permits had gone out this year through Sept. 1. read more

DBS launch a new portfolio of niche loan websites:

2008-11-30T22:37:00.000+08:00

DBS are proud to announce the launch of 12 new niche sites aimed at specific areas of the UK secured and unsecured loan market. The company has enjoyed sustained success over the last 4 years and felt with the current economic situation to adopt a growth strategy to provide a better and more tailored service to specific loan seekers.

DBS Finance use advanced RSS and XML technology to find the widest selection of lenders within the UK, with emphasis on speed and efficiency in getting back to their clients. As soon as an enquiry is submitted to our core site or any of the niche sites, our technology process kicks in to action. A series of technology steps ensures the secure movement of data in to a system where master brokers get to work by calling the client back. An extensive needs analysis is conducted and all relevant information collected to generate a credible loan application. read more

Downturn Drags More Consumers Into Bankruptcy

2008-11-29T22:34:00.000+08:00

The economy’s deep troubles are pushing a growing number of already struggling consumers into bankruptcy, often with far more debt than those who filed in previous downturns.

Plummeting home values, dwindling incomes and the near disappearance of credit have proved a potent mixture. While all the usual reasons that distressed borrowers seek bankruptcy — job loss, medical bills, divorce — play significant roles, new economic forces are changing the calculus of who can ride out the tough times and who cannot.

The number of personal bankruptcy filings jumped nearly 8 percent in October from September, after marching steadily upward for the last two years, said Mike Bickford, president of Automated Access to Court Electronic Records, a bankruptcy data and management company. read more

Credit for home buyers begins to thaw

2008-11-28T20:00:00.001+08:00

A hard freeze crippled the credit market in September, leaving borrowers scrambling for mortgages.

But with the huge moves that the federal government has made to encourage banks to make loans, mortgage lending has thawed in recent weeks.

Buyers with mid-level or even damaged credit are now able to get mortgages by going through the sometimes complex Federal Housing Administration loan guarantee program. Even those buying second or investment homes are getting loans.

The region's lenders, Realtors and mortgage brokers attribute the thaw to a return pre-boom lending requirements: proof of income, a stable job and a down payment.

"We had those lending practices for years and years and years, but then anyone who was breathing could get a loan," said Lee Wetherington, who builds luxury homes from a base in Lakewood Ranch. "That is when it all went to hell." read more

Losing it all: Subprime loan mess slamming doors on homebuyers in Central Virginia

2008-11-27T22:30:00.000+08:00

Auctioneer Nancy Steffen conducts a foreclosure auction on a house on St. Cloud Avenue in Lynchburg on Wednesday.

You wouldn’t expect a $1 million home on Easy Street on Smith Mountain Lake to end up in the same situation as a $20,000 house from inner-city Lynchburg.

One was built as a lakeside mini-mansion in 2006. It has 5,200 square feet, granite countertops, cathedral ceilings and geothermal heat.

The other was built in 1892 with a wood frame and siding. Its 1,500 square feet are warmed with electric baseboard heaters.

Both met the same fate this year.

Foreclosure.

So did more than 200 other homes in the Lynchburg area. After homeowners failed to make mortgage payments, lenders ultimately took the homes to foreclosure auctions.

An examination by The News & Advance of land records in Lynchburg and the counties of Amherst, Appomattox, Bedford and Campbell show that more people have lost their homes this year than last year, up 33 percent overall.

From January through August, local property owners — including individuals and a few businesses — lost 211 properties to foreclosure. Records showed 159 foreclosures over the same period in 2007. read more

Company owners explain how they are scrambling to fund operations

2008-11-26T22:27:00.000+08:00

Desperate times call for desperate measures.

Small-business owners across the Valley have adopted that attitude as the ongoing credit crunch shows little sign of easing.

They are wiping out their personal savings, outsourcing work and cutting salaries.

Other owners are opting to throw in the towel by shutting their doors or filing for bankruptcy.

The credit crunch has a direct economic effect on small businesses in Arizona - a state where 97.3 percent of employer firms are classified as small businesses, according to the U.S. Small Business Administration. Employer firms are businesses that have employees and are not sole proprietorships.

Businesses that can't obtain credit often nix expansion projects, freeze hiring and cut back on the number of employees.

Companies with healthy balance sheets and stellar credit histories say they've had luck obtaining bank financing. Still, the credit crunch, plummeting home values and the rising price of goods have pummeled consumers, who are the lifeblood of most small businesses. That has made it harder for them to maintain strong balance sheets. read more

Running on empty

2008-11-25T22:25:00.000+08:00

A litany of troubles drives a Brooklyn bus company into Chapter 11; nightly visits from the repo man

It's hard to lose a school bus. But when a driver for Caravan Transit scoured the company's Brooklyn yard early one morning in August, he couldn't find his vehicle.

So he called General Manager Edwin Maldonado. "You're blind, it's gotta be there," Mr. Maldonado said to himself. "Just check again," he told the driver. The driver checked again. No sign of his bus.

Mr. Maldonado rushed to Caravan's headquarters and soon realized that 24 other buses were missing. The wire for the security camera perched above the front entrance had been sliced. The steel chain that secured the yard's sliding gate had been cut. He called the police.

But it turned out that creditors, not criminals, were the culprits. The buses had been repossessed.

When another 13 buses vanished in the middle of the night less than a month later, Caravan owner Jeffrey DeStefano realized his time was running out. Some $2 million in debt, he filed for Chapter 11 bankruptcy protection last month. read more

Deregulation Blunders and Moral Hazard

2008-11-24T22:24:00.000+08:00

Part of the current banking crisis is due to the deregulation that Congress brought in known as the Gramm-Leach-Bliley Act of 1999 or the Financial Services Modernization Act. But that deregulation was part of a general movement during the 1990s, approved by piecemeal government regulations and deregulations, that allowed both investment banks and banks to become universal banks.

As universal banks, bankers could engage in all manner of highly questionable financial activities and expansions that are totally inconsistent with the safety of bank deposits. Given the government’s guarantees of bank deposits, these sorts of activities should never have been allowed. When there are such guarantees combined with the central banking money system, market discipline is greatly eroded. No doubt, lobbying efforts and contributions to politicians have much to do with this deregulation and erosion. There are big bucks to be made by gaming the system of government regulation.

The system we have is the furthest thing from lawful free markets. It is not "financial capitalism," as France’s President Sarkozy would have it. To be fair to him, Mr. Sarkozy’s views require separate elaboration. We will be hearing more from him, I am certain. Like De Gaulle, he may want a place for gold. For the moment, statements like these "Laissez-faire is finished" and "The all-powerful market which is always right is finished" should be recognized as incorrect and misleading. We have not experienced either laissez-faire or an all-powerful market. How could we when we have not had monetary freedom at any time and especially since 1913 and then the New Deal? read more

MARTIN FARRIS: Quit calling it a bailout

2008-11-23T22:23:00.000+08:00

Last time, I gave some background on the financial system bailout. This column I will go into a little more detail.

First of all, I think that whoever coined the term "bailout" to describe the plan did the entire country a huge disservice. When you say bailout, I picture a government giveaway program - and judging from the response of a majority of Americans, I am not alone - but that is not an accurate description of the plan.

Initially, the plan was for the government to buy some of these undervalued assets (primarily pools of loans) from institutions, thereby creating a market for them, and allowing the institutions to generate some much-needed cash that could be used to make new loans and strengthen their balance sheets. The government would buy the assets at a discount, then hold them until the loans paid off or resell them at a later date after other investors re-entered the market. read more

FDIC May Alter Guarantee Plan After Banks Complain

2008-11-22T22:20:00.001+08:00

The Federal Deposit Insurance Corp. may revise a $1.4 trillion debt-insurance program to address complaints that it would spur an exodus from the $250 billion market for overnight loans between banks.

The FDIC is considering charging different fees depending on the maturity of the debt, instead of its previous plan for a flat fee. Companies including JPMorgan Chase & Co. and Bank of America Corp. said the original proposal threatened to make the overnight federal funds market too costly compared with alternatives such as direct loans from the Federal Reserve.

``We are definitely thinking through how to respond to some of the concerns that have been raised,'' Art Murton, director of the FDIC's insurance and research division, said in an interview. ``Complexity is somewhat inevitable. We're doing our best to take away unnecessary confusion.''

The FDIC today announced it would take up the issue at a board meeting set for 2 p.m. on Nov. 21. The agenda calls for the final rule to be discussed and voted on. read more

Woman forged loan papers to keep her house

2008-11-09T18:50:00.000+08:00

A WOMAN who forged a credit union loan document has been warned by a judge that the forgery could have resulted in imprisonment for contempt of court.

Start Mortgages Ltd secured an order for possession of a house at Old Callan Road, Kilkenny, against Eileen Tynan but a stay was placed on the order for a month.

Ms Tynan had secured a mortgage of €174,000 in December 2005 and there were arrears of €33,000, the High Court was told.

Ronan Murphy SC, for Start Mortgages, said that on October 24th, Ms Tynan had produced a letter in court purporting to be issued by her credit union which indicated a loan application for €45,000 had been approved. read more

Non Secured Loans: Perfect Finances Without The Need Of Attaching Any Collateral

2008-11-08T18:49:00.000+08:00

Your specific needs and requirements are bound to change with the time. You are always on the lookout to make your life more comfortable and hassle free. For the same you can go to any length, if necessary you will not think twice before availing financial assistance. Loans are only a medium, which assist you to realize your dreams and wishes. Non secured loans are a part of the medium, which mainly offers financial assistance, so as to help you meet your small time monetary requirements.

Like any other conventional loans, these loans are mainly offered by lenders such as banks and financial institutions. While applying for the loans, there is no need to pledge any valuable asset as collateral for its approval. The collateral free condition of the loans is in fact a boon for the borrowers such as tenants and non homeowners, who do not have any asset of their own. Besides, asset owners who do not want to risk their priceless assets can also make use of the loans. you are free to use the loans to serve various needs like consolidating past debts, purchasing a car, renovating home, educational purposes, wedding, going for a vacation and many more. read more

Want to avoid the negative equity trap? Build your own home

2008-11-07T18:44:00.000+08:00

Self-builders enjoy a 35 per cent equity gain the day they move in. And they save on Stamp Duty. Laura Howard reports on a bright spot in the market

For years, the term "negative equity" barely featured in the vocabulary of the modern homeowner. But things have changed. The Bank of England revealed last week that 1.2 million homeowners are likely to find themselves trapped in a home worth less than the mortgage secured against it as prices continue to tumble. But one type of homeowner could be better equipped to fight the return of negative equity than the rest – those who build the homes they live in.

Self-builders benefit from an average 35 per cent equity gain from the day they move into the property, according to John Hay, marketing director at self-build specialist BuildStore. "When the house is complete, it should be worth around 35 per cent more than the total cost of the land and the build. This cushion against negative equity means that now is the perfect time for self-build." read more

Smart homeownership: What everyone should know about foreclosure

2008-11-06T18:42:00.000+08:00

Faith's house was sold at auction last week on the front steps of the Catawba County Justice Center.

The Newton woman, who asked not to be identified to protect her privacy, said making payments on the three-bedroom house had been a struggle from the time she bought it nearly five years ago. A second mortgage and payments on a home equity line of credit put the 51-year-old divorcee in debt and kept her there.

When her lender started foreclosure proceedings in late summer, Faith did what many people in similar circumstances do. She walked away from the house without even talking with her lender. read more

Fast Cash Loans Help Ease Recession Letting Worries

2008-11-05T18:38:00.000+08:00

Would-be landlords are increasingly turning to unsecured home improvement loans to make their properties more attractive to tenants, reports Credit Problems No Problem. Letting property or even a spare room within the family home is becoming more popular as families seek to raise cash in the recession.

Newton Abbot, Devon, UK (PRWEB) November 2, 2008 -- Would-be landlords are increasingly turning to unsecured home improvement loans to make their properties more attractive to tenants, reports Credit Problems No Problem

Letting property or even a spare room within the family home is becoming more popular as families seek to raise cash in the recession.

But many need to invest in home improvements first to make their properties stand out from the crowd amid burgeoning competition among landlords.

And for those with poor credit, home improvement loans can be difficult to source.

Some 18.1 per cent of applicants seeking fast cash loans from Credit Problems No Problem cite 'home improvements' as the reason for borrowing.

"Home improvements have always been popular among our applicants," said a spokesman for Credit Problems No Problem, which specialises in loans for people with a poor credit rating.

"However, now the difficult housing market conditions are making unsecured loans more attractive to landlords - particularly those new to the letting market."

UK house prices are now 14.6 per cent lower than they were 12 months ago, according to latest figures from Britain's biggest building society, Nationwide.

The price of the average UK property fell to £158,872 in October - £27,172 lower than it was a year ago. read more

The Freedom Recovery Plan for Distressed Borrowers and Impaired Lenders

2008-11-04T22:30:00.000+08:00

With the passage of the Emergency Economic Stabilization Act of 2008 (“EESA”), the twin housing and mortgage crises have now forced the government to directly battle, with massive financial intervention, the systemic implications for our banking (and shadow-banking) institutions. Notwithstanding the magnitude of government support that EESA will bring to the resolution of the credit and banking crises, the financial and social implications arising from the housing bubble, for homeowners and the broader economy, require the consideration of additional unconventional solutions that are not inconsistent with the rubric of our system of laws and property rights. Such solutions must also place less reliance on direct intervention from a heavily extended government (and its taxpayers). The Freedom Recovery Plan (the “Plan”) is a structured package of government and private-sector measures that amount to a national “workout” of the residential real estate elements of the overall crisis in the capital markets. The housing sector’s ongoing meltdown presents unique challenges that were not front and center in prior boom and bust cycles. Accordingly, special actions are necessary to limit the damage to vast population segments and the knock-on effects of such damage to our normally resilient financial sector and economy. That such actions should endeavor to maximize the role of the private sector should be self-evident to those with lingering concerns about the total costs to which the government has already committed. read more
Source:http://www.rgemonitor.com/financemarkets-monitor/254085/the_freedom_recovery_plan_for_distressed_borrowers_and_impaired_lenders

Repossession leaves thousands out of home and in a world of worry

2008-11-03T22:19:00.000+08:00

EACH one is a poignant reminder of hopes dashed and dreams shattered.
On the Wilson Auctions website last week at least 13 of the 45 properties for sale were advertised as being owned by the organisation that provided the mortgage – a clear sign that the homeowners who purchased the property back in the heady days of low interest rates had long departed the place that they wanted to call home.

They were not just properties at the cheaper end of the market either. One was a four-bed duplex penthouse on Edinburgh Waterfront, where developer Gregor Shores last week went into administration.

It was a home that, at the height of the property boom, could have fetched a sum approaching seven figures. It was sold at auction last month for around the guide price of £225,000. Someone, somewhere, got a major bargain. read morehttp://www.blogger.com/post-create.g?blogID=3397713675279201980#

Source:http://scotlandonsunday.scotsman.com/comment/Repossession--leaves-thousands-out.4606858.jp

Placing blame in financial crisis

2008-11-02T22:27:00.000+08:00

Question: I was wondering if you have any thoughts on who is to blame for the current financial crisis? I don't need a political answer. I need a business answer.
-Barbara, Phoenix

Answer: Thank you for being quite blunt with me. As an independent, the only answer you will get from me is a business answer. I believe that there is plenty of blame to go around for the current financial crisis. So, let us round up all the suspects.

• The U.S. Congress: It is not a Republican or a Democrat problem. The entire Congress is to blame. Congress enacted the Glass-Steagall Act in 1933, which prohibited banks and investment banks from combining. This combining had supposedly contributed to the crash of 1929. The Congress repealed this law in 1999, setting up the scenario for the current crisis. Apparently, after 70 years we had forgotten the lessons of 1929.
read more
Source:http://www.azcentral.com/arizonarepublic/business/articles/2008/10/19/20081019biz-asksteve1019.html

Take your pick, take the money

2008-11-01T22:17:00.000+08:00

Equity release is a way of gaining a cash lump sum secured on your home with repayment put off for decades.

There are two main types of equity release scheme: lifetime mortgages and home reversion plans.

Lifetime mortgages

These are the more popular of the two schemes and allow a homeowner to receive a cash sum and stay in a property, with the loan repaid from the sale of the home after death, or if the borrower moves into care. The principle is that rising property values will cover the interest on the original debt. Borrowers with lifetime mortgages typically don’t make monthly repayments, but defer or “roll up” the interest and capital so that it is repaid when the home is sold.

Interest rates are slightly higher than “mainstream” mortgages to reflect the “no negative equity” guarantee that they now offer as standard.

The older the homeowner, the more they can borrow. For example, a 55-year-old can typically borrow 15 per cent loan to value, while an 80-year-old can raise nearly half the value of their property. read more
Source:http://www.ft.com/cms/s/0/a23d683c-9c78-11dd-a42e-000077b07658.html?nclick_check=1

Court action against home owners at highest level since 90s housing crisis

2008-10-31T22:16:00.000+08:00

The number of home owners facing repossession has reached its highest level since the worst years of the early 1990s property crash.

Figures from the Ministry of Justice reveal that lenders have applied to county courts for a repossession claim in nearly 80,000 cases during the first six months of this year.

With the housing crisis getting worse with each passing month that could see the annual total exceed 160,000. In 1991, the total number of claims reached 186,649. The following year the number fell to 142,162.

Repossession claims are the first step in the legal process which can ultimately lead to a home being seized by a bank or building society. read more
Source:http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3222736/Court-action-against-home-owners-at-highest-level-since-90s-housing-crisis.html

Building Flawed American Dreams

2008-10-30T22:14:00.001+08:00

Grandson of Mexican immigrants and a former mayor of this town, Henry G. Cisneros has spent years trying to make the dream of homeownership come true for low-income families.

As the Clinton administration’s top housing official in the mid-1990s, Mr. Cisneros loosened mortgage restrictions so first-time buyers could qualify for loans they could never get before.

Then, capitalizing on a housing expansion he helped unleash, he joined the boards of a major builder, KB Home, and the largest mortgage lender in the nation, Countrywide Financial — two companies that rode the housing boom, drawing criticism along the way for abusive business practices. read more
Source:http://www.nytimes.com/2008/10/19/business/19cisneros.html?_r=1&bl&ex=1224561600&en=7c34162074e34513&ei=5087%0A&oref=slogin

Financial crisis: Somehow we have to break the chain

2008-10-29T19:23:00.000+08:00

The blame game is already under way. Five masters of the universe have already fallen on their swords as part of the price of the taxpayers' unprecedented bail-out of our stricken banks. But the enforced departures of those who ran HBOS and RBS are only the start of the story.

As an angry, bewildered public search out the culprits, no one would be too surprised if Threadneedle Street comes to resemble some latter-day Appian Way, lined with crucifixions of the bankers, brokers and traders who brought our economy to its knees.

But perhaps we all bear some share of the blame. The banks and finance houses bombarded us with credit cards, personal loans, mortgages and remortgages up to ludicrous multiples of annual income, and elastic overdrafts. No one made us take the money. Many of us were happy to rack up debts comforted by the thought that ever-rising house prices would float us off the rocks of personal bankruptcy. read more
Source:http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/10/20/do2004.xml

HOEPA: New Hope for Outlawing Abusive Mortgages

2008-10-28T19:20:00.000+08:00

Another new law that may do more to help homeowners in trouble.

New federal regulations designed to prevent the kind of home loan abuse that led to a $1 trillion bailout, ironically may have fallen under the radar because of all the bailout and economic meltdown news.

Less dramatic than spending hundreds of billions of dollars to bail out the nation's economy, Federal Reserve Board amendments to the "Home Ownership and Equity Protection Act (HOEPA)" could have a much more lasting effect.

That's because the new HOEPA rules outlaw abusive mortgages, specifically to eliminate future runs on bad home loans. What's more, with the loans removed from the market, consumers will be forced to change misdirected savings, budgeting and mortgage shopping habits. read more

Source:http://www.consumeraffairs.com/news04/2008/10/homeowner_hope.html

Inflation brings fixed rate home loans to a close

2008-10-27T19:59:00.000+08:00

Mortgage firms are abandoning fixed interest rate schemes for flexible options that can offer them room to manoeuvre the changing market conditions as runaway inflation and a raging global financial turmoil shifts economic fundamentals in the lending environment.

Analysts said this policy shift coming from the big lenders is the latest signal that Kenya is yet to find a suitable interest rate-fixing mechanism away from the current dependence on public debt instruments.

Fixed mortgage rates were introduced in the Kenyan market four years ago after the benchmark Treasury Bill rate fell below five per cent – the lowest in nearly three decades and the Narc Government assured the market of a stable economic environment on the domestic front. read more
Source:http://www.bdafrica.com/index.php?option=com_content&task=view&id=10695&Itemid=5812

Bank Mutual Corporation Reports Earnings for the Third Quarter of 2008 and Nine Months Ended September 30, 2008

2008-10-26T19:57:00.000+08:00

Bank Mutual Corporation (NASDAQ Global Select Market® : BKMU) reported net income of $1.6 million or $0.03 per diluted share for the three months ended September 30, 2008, compared to $3.7 million or $0.07 per diluted share for the same period in 2007. Earnings in the most recent quarter were impacted by a $2.3 million impairment loss on a mutual fund that invests in mortgage-related securities, a $1.4 million impairment loss related to Federal Home Loan Mortgage Corporation (“Freddie Mac”) common stock, and a $1.0 million loss provision related to a loan secured by a completed condominium development project. The after-tax impact of these developments was approximately $3.1 million or $0.06 per diluted share.

Bank Mutual Corporation also announced net income of $11.0 million or $0.23 per diluted share for the nine months ended September 30, 2008, compared to $13.0 million or $0.23 per diluted share for the same period in 2007. The earnings comparison between these periods was impacted by the developments described in the previous paragraph, as well as an additional impairment loss of $2.1 million in the second quarter of 2008 on the mutual fund mentioned above ($1.4 million or $0.03 per diluted share after income taxes). read more
Source:http://www.istockanalyst.com/article/viewiStockNews+articleid_2714178.html

Citizens Republic Bancorp Announces Third Quarter 2008 Results

2008-10-25T19:55:00.000+08:00

Citizens Republic Bancorp(Nasdaq: CRBC) announced today a net loss of $7.2 million for the three monthsended September 30, 2008, compared with a net loss of $201.6 million for thesecond quarter of 2008 and net income of $31.8 million for the third quarterof 2007. Diluted net income (loss) per share was $(0.07), compared with$(2.53) for the second quarter of 2008 and $0.42 for the third quarter of2007.

For the first nine months of 2008, Citizens recorded a net loss of $197.7million, or $(2.36) per diluted share, compared with net income of $72.9million or $0.96 per diluted share for the same period of 2007. The decreasewas primarily the result of the goodwill impairment charge, credit writedownand fair-value adjustments in the second quarter of 2008 as well as a higherprovision for loan losses. read more
Source:http://www.ibtimes.com/prnews/20081016/mi-citizens-rep-ern.htm

The Bank Bailout's Side Effect: Rising Mortgage Costs

2008-10-24T19:48:00.000+08:00

The government's effort to boost bank lending to end the credit crisis is hurting one of the areas critical to the nation's recovery: mortgage rates. In the past week, the average mortgage rate on a 30-year fixed home loan has jumped more than one half a percentage point to 6.74%, according to Bankrate.com. That might not sound like much, but it is the biggest one-week rise in the normally stable lending rate in 21 years. Some economists say mortgage rates could soon top 7%, a level they have not seen in more than six years.

"Certainly the moves the administration have made so far are not directly attacking the financial issues that affect American homeowners," says John Vogel, a finance professor at Dartmouth's Tuck School of Business. "We need to refinance million of homeowners into affordable mortgages, and if rates go up that makes that job just much harder to do." read more
Source:http://www.time.com/time/nation/article/0,8599,1851203,00.html?imw=Y

Reform to help owners facing default

2008-10-23T19:45:00.000+08:00

NEW ways of thinking are necessary as Australia weathers the worst financial crisis in our lifetimes. The path forward as we navigate the fallout from the subprime-induced credit meltdown will be a suite of new measures to deliver greater transparency and tougher financial sector regulations, along with innovative solutions to assist working families in financial hardship.

In many cases, the horse has already bolted and we cannot undo the damage that will emerge from predatory lending. Action is urgently needed on special measures to help Australian home owners at risk of foreclosure.

For young families struggling to meet high mortgage or rental costs, a sudden reduction in income caused by a slowdown in the economy, pregnancy, illness or the loss of a job can risk the roof over their heads through foreclosure or eviction.
read more

Source:http://business.theage.com.au/business/reform-to-help-owners-facing-default-20081016-52fj.html

HDFC net up 32% to Rs 534 cr in Q2

2008-10-22T19:35:00.000+08:00

HDFC, the country’s largest housing finance company, reported a net profit of Rs 534 crore for the quarter ended September 2008. This is
an increase of 32% over last year’s second quarter net profit of Rs 403 crore. If the exceptional items from the sale of BPO arm Intelenet in 2007-08 were included in last year’s profit, this year’s Q2 net profit would be down 17% over last year.

While the profit growth is healthy and in line with market expectations, the rate of disbursements has slowed down marginally. Disbursals grew 23% to Rs 10,584 crore in the second quarter, while approvals rose 26% to Rs 14,184 crore. The slower growth reflects reduced lending to corporates and builders. According to officials, the retail loans grew at a healthy 31%. Analysts fear a slowdown in retail loan growth if troubled builders stall projects. read more

Source:http://economictimes.indiatimes.com/News_by_Industry/HDFC_net_up_32_to_Rs_534_cr_in_Q2/articleshow/3610236.cms

Heritage Oaks Bancorp Reports Third Quarter Profits; Sets Aside $3.2 Million Into Allowance for Loan Loss Provision; Remains Well Capitalized

2008-10-21T19:32:00.000+08:00

Heritage Oaks Bancorp (HEOP:6.75, -0.50, -6.9%) , the parent company of Heritage Oaks Bank, today reported that following a $3.2 million provision for loan losses, it earned $534,000, or $0.07 per diluted share for the third quarter of 2008, compared to $1.6 million, or $0.23 per diluted share, in the third quarter a year ago. For the first nine months of 2008, net income was $2.9 million, or $0.37 per diluted share, compared to $4.9 million, or $0.70 per diluted share, in the first nine months of 2007. Earnings per share was impacted by the October 2007 acquisition of Business First National Bank of Santa Barbara, in which Heritage Oaks Bank issued 850,213 shares, resulting in an 12% increase in the number of average diluted shares outstanding compared to the third quarter of 2007.

"Our core business remains sound as is evidenced by our improving efficiency ratio," stated Lawrence P. Ward, President and CEO. "Although our increased provision for loan losses put a drag on earnings, our strong operating results allowed us to take a large provision while still remaining profitable. We will continue to move away from balance sheet growth and focus on asset quality and capital preservation, as we work through these credit quality issues." read more
Source:http://www.marketwatch.com/news/story/heritage-oaks-bancorp-reports-third/story.aspx?guid={6A65A684-678E-4915-9688-2D8843181E48}&dist=hppr

United Financial Bancorp Reports Earnings Per Share of $0.15, Declares Dividend of $0.07 Per Share and Announces Strong Capital and Liquidity Position

2008-10-20T19:29:00.000+08:00

United Financial Bancorp, Inc. (the "Company") (UBNK:13.99, -0.51, -3.5%) , the holding company for United Bank (the "Bank"), reported net income of $2.4 million, or $0.15 per diluted share, for the third quarter of 2008 compared to net income of $1.3 million, or $0.08 per diluted share, for the corresponding period in 2007. The Company's improved results were largely due to a significant increase in net interest income, driven by net interest margin expansion and growth in average earning assets, and to a lesser extent, growth in non- interest income. The quarterly operating performance was also affected by increases in the provision for loan losses and non-interest expenses. For the nine months ended September 30, 2008 the Company's net income was $6.3 million, or $0.39 per diluted share, compared to net income of $3.1 million, or $0.18 per diluted share, for the same period in 2007. The Company also announced a quarterly cash dividend of $0.07 per share, payable on December 1, 2008 to shareholders of record as of November 6, 2008. read more
Source:http://www.marketwatch.com/news/story/united-financial-bancorp-reports-earnings/story.aspx?guid={0B4456E2-7252-4BB5-ADD4-179129B60A7B}&dist=hppr

Why consider mortgage refinancing?

2008-10-19T17:58:00.000+08:00

Lowering your interest rate
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Source:http://foodconsumer.org/7777/8888/Other_N_ews_51/101707522008_Mortgage_Refinancing.shtml