Defaulted Bank Loan Workouts
June 16th, 2010
Most people frequently speak about SBA guaranteed loan workouts which have their own specific requirements. There are, however, an enormous number of traditional secured and unsecured bank loans which are in default and require workouts resulting in debt forgiveness. There are consulting companies who do hundreds of these every year. They are different and frequently easier to work out as there is far more local authority and flexibility as the banker and the ruling committee has the option of making whatever decision they choose to make without the restrictions than with SBA requirements and objectives which can handcuff a banker’s decision.
The bank can modify, defer and compromise its loans as it deems appropriate. Consultants can fashion more creative workout resolutions which will work even better for the borrower as well as the lending bank. It is far more of an open negotiation and works out very well; frequently better than SBA guaranteed loan workouts.
Unfortunately, the opposite can also happen as the local bank being unrestricted and not under anyone’s control can act irrationally, emotionally and contrary to workout logic either making unreasonable demands or simply refusing to resolve a workout unless under their terms.
Fortunately, loan default consultant experts seldom have such issues and their secured bank workouts are always well done and totally satisfactory to the borrower, with similar results as their experience with SBA guaranteed loan workouts… pennies on the dollar. These consultants perform the same strategies, protecting the assets and eliminating the personal guaranties. The difference is these consulting experts are dealing with the bankers’ personalities and their own guidelines.
They seldom have any difficulties. Bring your secured and unsecured bank loans and they will work them out as successfully as they do the SBA guaranteed loans.
By: Don Todrin
Student Loan Debt Advice
June 16th, 2010
Perhaps the best student loan debt advice can be well crunched down into four good tips. The first would be simply to keep a control on your interest rate. Now if you think that is easier said than done as student rates are variable and tend to change every 1st of July then here is some good news. You can lock in your rate of interest permanently if you consolidate your loan. This is because consolidated loans have fixed interest rates.
The next tip would be to use automatic payments. More than a few lenders will offer you a lowered rate of interest if your student loan payments are deducted on an automatic basis from your savings or checking account. This is a big relief as it can well add up to large amounts of savings. Also, you will not have to deal with the additional hassle of remembering to write a check every single month. Another marked benefit is that you will always be on time with your loan payments.
The third bit of advice would have to be that you must not get behind on any of your payments. This kind of delay in repayment must be avoided to the fullest. In case you are having some trouble in making your student loan payments, you must contact your loan servicer immediately so that you can know whether you have eligibility for any kind of deferment or forbearance. Just as is the case with any other kind of loan, a late payment of a student loan will affect your credit in a negative manner.
The last piece of valuable advice would be to make a wise decision of your payment option. You must ensure that you choose a payment option that is best suited and beneficial for you. There are multiple options for payment that are available to student loan borrowers who choose to consolidate their loans. A payment plan that will fit into your current financial situation best will most certainly help you to keep up with your loan repayments. Keep this advice in mind and you are sure to have an easier time managing your student loan debts.
By: Max Bellamy
How Does a Loan Modification Work? Guidelines For Approval
June 16th, 2010
Just how does a loan modification work and will this home retention option be a good choice for you? Each homeowners faces a unique set of circumstances that may be helped with a loan workout. A new lower monthly payment so that you can afford to stay in your home could help you avoid foreclosure and also help stabilize your neighborhood home values.
Obama has realized that the federal government needs to step up and help qualified homeowners with a program to assist them get low affordable mortgage payments. HAMP, or Home Affordable Modification, is an option for borrowers facing a financial hardship situation and unable to afford their current mortgage. How does a loan modification work under HAMP? Here are some basic guidelines:
Primary residences may be eligible for a lower payment under the federal program, investment properties or second homes do not qualify for this particular plan. Loans that have a current balance of $729,750 or less and were taken out prior to January 1, 2009 could be reviewed for a workout and lower payment Homeowners facing a financial hardship due to loss of income, increased expenses, using savings to pay bills, or other circumstances may receive assistance with HAMP. Mortgage payments can be modified so that they equal just 31% of the gross monthly income using a set formula-reduce the interest rate, extend the loan term or forgive or defer some principal balance.
Learning how a loan modification works is the first step to applying and qualifying for assistance. Part of the process is completing a hardship letter and a financial statement. These forms tell the lender about your current financial situation and help them determine if you qualify for HAMP. It is so important to prepare your forms correctly-if you fit into the formula you have a good chance of approval. If you do not show the bank that you fit the guidelines then you will not get help. It just makes sense to use the very same formula your bank will use and prepare your financial statement correctly.
Do you know how to figure your debt ratio or asset ratio? What about your new target payment or disposable income? Take the confusion and guess work out of fine tuning your budget with a software program designed just for homeowners. Simply input your own income and expenses and all the calculations are done automatically for you. Now is not the time to take chances and just hope for the best. Now is the time to get informed and be prepared to find out how a loan modification works so you can succeed.
By: Susan V. Gregory
How Can Property Taxes Go Up in a Declining Market?
June 15th, 2010
Every home owner have already received their new tax assessment for 2009, by now. The tax is up and the house value is down with the real estate market. Why the property value is down is easy to understand under current circumstances, but why the property tax goes up is not so obvious.
The explanation provided for us in the state of Michigan (it should be similar for your state also) is:
In a booming or declining market, a property’ State Equalized Value will rise or fall with the market, while a property’ Taxable Value will remain at a steady, gradual increase. This is because the Taxable Value is not tied to the market, but rather to the lesser of five percent (voted capped value in Michigan) or Consumer Price Index – the annual national inflation rate from October to October.
The vocabulary and assessing terminology along with some tax knowledge is required to comprehend the above statement.
State Equalized Values (SEV) is equal to 50 percent of the market value of your property. When buying a property we ask the city assessor the current tax info on file to have this SEV number, the 50 percent of the market value. For example the SEV is $85,000, than the house values is a bit more than $170,000.
In 1994, Michigan voters approved a constitutional amendment known as Proposal A. Proposal A was designed to limit the increase in property taxes to either 5% or the annual change in the Consumer Price Index (CPI), whichever is less, until ownership of the property is transferred.
When you buy a property, the purchase price, more exact half of it becomes the new State Equalized Values.
In Michigan the Taxable Value (TV) is he lower of SEV or Capped Value. The Capped Value number is calculated multiplying the previous years’ Taxable Value by the CPI.
Call the State /City Assessor’ Office in your area to learn more.
By: Ernest Ionescu
Loan Modification
June 15th, 2010
People should know that in many states it is not allowed to charge any money for a loan modification. The only way that a company may charge you money is after the amendment been done and all this in writing with or without a special APPROVAL. But many companies are charging in advance which is against the law. The reason that these companies charge in advance is because they know that not all qualify for a modification but having already claimed the money, it is very difficult to try to recover it.
For example, the weekend I found an agent who said working for a loan company but is devoted to modifying loans. This person has a real estate license restricted. Be very careful with companies that claim to make changes… Here are some tips for your help:
The right way is through the department of mitigation of losses from the bank. The structuring, must be well planned because much income leads to the bank’s refusal to do so and declare little income causing no qualification for the amendment of the loan and raise suspicions at the bank and could lead to a judicial foreclosure.
To extend the terms of the loan – this proposition is now accepted by some banks, the banks typically extend the term of the loan in order to recover the full loan.
Freeze the repayment of the loan – This is quite difficult, because this proposal is based at the bank when the homeowner suffers a temporary decline in revenues. The banks have to accept this proposal to be well secured by the property value or special situations in the housing market as we are experiencing at present.
Qualified professionals in this type of recording of income and ability of the banks are closer to the people who have more chances of success.
By: Donald Morris
Mortgage Modification in Chapter 13? Rejected!
June 14th, 2010
The mortgage meltdown and ensuing global financial crisis, in the fall of 2008, still reverberates today. The New York Times reported on the essentials of the credit crisis and pointed out the breadth and depth origins of this crisis and likened these times to the Great Depression.
I have previously reported on the financial crisis in The Economy of Bankruptcy; while The National Association of Consumer Bankruptcy Attorneys [NACBA] has been following SB61 since its inception. SB61 essentially will allow bankruptcy judges to modify the terms of a mortgage. Recently, NACBA Director, John Rao testified on the matter in October, before the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts.
As posted in the New York Times, House Passes Far Reaching Bill Tightening Financial Rules. Unfortunately, the banking industry struck a win when the House voted to reject the proposed amendment, known as “mortgage cramdown,” which is the measure that would allow bankruptcy judges to change the terms of mortgages for distressed homeowners. This vote reversed the House’s passage in March of a cramdown measure that subsequently died in the Senate.
American homeowners need a real solution and based on what I read over at The National Bankruptcy forum, our Bankruptcy Courts may not be equipped to handle the tsunami of bankruptcy cases that would result in the passage of such legislation. To date, few mortgages are being permanently modified, as reported by the LA Times.
My solution is for every American to obtain independent financial freedom by paying off their debts outside of bankruptcy, if possible. For those Americans struggling to pay their bills, consider either a chapter 7 or 13 bankruptcy and never look back. The rules of bankruptcy do not require that you spend down all of your savings and lose your assets in order to file for bankruptcy protection. The goal here is financial freedom and independence from the banking industry FOREVER. The new paradigm as Dave Ramsey so eloquently puts it, “DEBT IS DUMB AND CASH IS KING!”
By: Christine Wilton
Need a Short Term Personal Loan?
June 14th, 2010
Short term personal loan is similar to pay day loans. If you have a financial emergency like a car repair, medical emergency or an unexpected expense these loans come in handy. If you have a bad credit history and you have difficulty in obtaining a long term personal loan then this kind of a loan is an answer to your prayers.
The advantages of this kind of a loan are multifold, firstly they are issued without a credit check. So if you have a bad credit history you need not despair there is an option open to you. These loans can be quickly obtained the waiting time is often 24 hours or less. The flip side is that the interest rate charged is often very high and if you calculate the interest rate of a short term personal loan in terms of APR the percentage rate can be extremely high.
You can obtain short term loans with a money lender like a bank, financial institution etc and also obtain a loan online. These kinds of loans meet personal emergencies such as a high credit card bill. Suppose you have a huge credit card bill and opt to make the minimum monthly payment then this amount eventually gets charged a huge interest rate and the more you delay the payment the higher the interest rate you have to pay.
You may even find that your credit is damaged and you are in the vicious cycle of credit card. A short term loan due too its very nature avoids this cycle. It gets paid off sooner as they are usually issued from pay cycle to pay cycle. Use short term personal loans sensibly to ward off any financial problems.
By: Graham Rieger
Title Loan Companies
June 14th, 2010
Title loan companies have gotten a bit of bad rap in the recent past. While they can charge high interest rates, they also provide quick cash for many individuals with bad credit who have difficulty otherwise obtaining a cash loan in a time of crisis. This article details how a loan from a title loan company works and whether they might be a good idea for you in a time of emergency.
At its simplest a car title loan is a cash loan secured by a piece of property, your car, truck or other vehicle. The way it works is that you bring your car title and your car to the title loan company. They will appraise your vehicle and tell you the maximum amount of loan that are willing to extend. Most loan companies will not loan more than 50% of the appraised value of your vehicle. For instance, if you bring a car to a title loan operation and they value the car at $5000, you will probably not be able to obtain a loan for more than $2000.
Now, in order for a loan to be processed you must own your car clear. If you are making payments or if the car’s title is not in your name, you will not be granted a loan. If you co-own the car with a spouse or family member, you must both be present to sign the loan paperwork.
The issue with car loans is their terms. In most cases, even though your loan is secured, you end up paying more than 300% in annual interest rates. Now, if you are able to pay off your loan in full at the end of the 30 day period, you will pay much less. But, even in that instance, you will still pay at least 20% for the loan, which is considerable interest on a loan of only 30 days.
However, if you do not have great credit or access to other sources for quick cash, title loan companies provide a critical service in times of emergency. In a true emergency, most people are willing to pay 20% to get out from a jam. But, these loans are not for everyone, so it is critical that you educate yourself about the associated fees before you sign any papers.
By: Ovri Ellington
How to Get A HSBC Loan Modification Application Approved – Insider Tips on the HSBC Loan Process
June 14th, 2010
Borrowers are always ready to get their loan processed as quickly as possible. For this, they have to remember certain things that will help their loan modification approved. You should make sure that the application should not be incomplete and incorrect otherwise, it will not be accepted by the lender. A complete and professional loan modification application will only help you to review the process of loan quickly.
Tips for Quick HSBC Loan Process
Here are some tips that will help your loan modification application to get approve quickly.
Change in Texas Law May Make Reverse Mortgages More Popular
June 13th, 2010
Texas was one of the last states to allow homeowners to take out home equity loans. Laws going back to the nineteenth century strictly prohibited home equity lending, as legislators feared that unscrupulous lenders would take advantage of homeowners for the purpose of seizing their homes through foreclosure. This made it impossible for citizens of the Lone Star State to use their equity for home improvements, debt consolidation or paying medical bills, as homeowners in other states may do.
In 1997, the Texas constitution was amended to allow homeowners to borrow against their home equity. The amendment allowed for traditional term loans, lines of credit, and reverse mortgages, but did not allow a line of credit on a reverse mortgage.
In a reverse mortgage, owners of homes who are at least 62 years of age may borrow against the equity in their home. They need not pay the money back until they die, move or sell the home. Reverse mortgages have become quite popular in the last few years, especially in areas like California, where homeowners may be cash poor but may have a lot of equity in their homes. Nationally, nearly 90% of homeowners who take out a reverse mortgage do so with a line of credit. In Texas, however, the only options are a lump sum or monthly payments. There are several advantages in taking a reverse mortgage in the form of a line of credit, rather than a lump sum. The most significant is the fact that interest is only due when money is actually drawn from the credit line. This saves the homeowner substantial amounts of interest over the life of the loan when compared to a lump-sum payout. Reverse mortgages have been quite popular in Texas since the law was changed to allow them, but lenders say that the demand should increase substantially if lines of credit are allowed.
The Texas Legislature has recently approved a constitutional amendment that will allow lines of credit.for reverse mortgages, and this amendment is expected to be on the ballot in Texas this fall. This bill is expected to pass easily, and once it does, Texas may become the leading state in the country for issuing reverse mortgages.
By: Charles Essmeier
