Monthly Archives: January 2015

2015
01/25

Category:
Debt Settlement

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Britain’s FTSE share index ends higher on ECB stimulus hopes

* FTSE 100 closes 0.8 percent higher

* Sainsburys volatile after trading update

* Boohoo.com plunges following profit warning

By Atul Prakash

LONDON, Jan 7 (Reuters) – Britains top equity index gained
nearly 1 percent on Wednesday, rebounding from a three-week low
as euro zone consumer price data raised expectations of new
stimulus from the European Central Bank.

The blue-chip FTSE 100 index, which had fallen in
the last three sessions and hit its lowest since mid-December on
Tuesday, finished 53.32 points, or 0.8 percent, higher at
6,419.83.

Data showing euro zone consumer prices fell more than
predicted in December heightened expectations the ECB will
announce a government bond-buying programme, or quantitative
easing (QE), at its policy meeting later this month to try and
revive prices and the euro zone economy, analysts said.

(ECB President) Mario Draghi will find it very difficult to
deny the euro zone is suffering from a fall in the cost of
living at the ECB meeting later this month, and this could force
him to fire up the printing press, IG analyst David Madden
said.

Traders still cant shake the looming political uncertainty
in Greece but, for now, they are content to ride the QE gravy
train.

European stock markets have been choppy in the past days
ahead of a Jan. 25 election in Greece. Investors are concerned
that if the Syriza party leads the next government, then the
risk of a sovereign default for Greece will increase and the
country could leave the euro zone. Syriza has promised to end
austerity and renegotiate the countrys debt.

Retail stocks remained volatile. Sainsburys rose
more than 4 percent in early trading after reporting
better-than-expected results in the Christmas quarter. But its
shares closed down 2.1 percent on concern it might lose more
market share to discounters and could suffer in an intensifying
price war.

Sainsburys numbers were better than expected, but I am not
a buyer of the stock for now, as top line guidance remains
unchanged, said Securequity sales trader Jawaid Afsar.

Grocer Tesco, which posts an update on Thursday,
gained 1.8 percent and Marks Spencer rose 1.9 percent.
WM Morrison shares, however, fell 1.3 percent.

Among other retailers, shares in the online fashion company
Boohoo.com, which is not in the FTSE 100 index, slumped
42 percent after cutting its profit outlook.

Aggreko, which fell 12 percent in 2014, rose 3
percent. The worlds biggest temporary power provider raised its
2014 trading profit expectations following a debt settlement.

(Additional reporting by Sudip Kar-Gupta; Editing by Larry King
and Susan Fenton)

2015
01/25

Category:
Mortgages

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FHA to lower insurance premiums on mortgages

The Federal Housing Administration plans to lower its annual mortgage insurance fees by 0.5 percent – a move that it says will allow more buyers to jump into the real estate market.

This action will make homeownership more affordable for over two million Americans in the next three years, said Julián Castro, secretary of the federal Department of Housing and Urban Development.

According to the White House, the change will save the average borrower about $900 a year. The lowered premiums will help more than 800,000 homeowners save on their monthly mortgage costs and enable up to 250,000 new homebuyers to purchase a home, the Obama administration said.

The FHA doesnt make its own loans, but insures mortgages made by lenders. Borrowers pay for that insurance through yearly premiums, which have risen to 1.35 percent of the loan balance, to make up for losses suffered when mortgages went bad during the housing crash. The premium now will be lowered to 0.85 percent. While thats higher than the 0.55 percent charged before the crash, it is expected to ease the way for many low- and moderate-income buyers who choose FHA loans because they allow for down payments as low as 3.5 percent, plus lower credit scores.

It will make homeownership possible for a slightly expanded group of homebuyers, Keith Gumbinger, vice-president at the Riverdale-based mortgage information publisher HSH.com.

Gumbinger said the FHA probably was responding to pressure from the National Association of Realtors and other groups that promote homeownership, as well as to an announcement last month by Fannie Mae and Freddie Mac that they will back certain mortgages requiring only a 3 percent down payment. The two mortgage finance companies require a 5-percent minimum down payment on most of the products they guarantee.

With the Fannie Mae and Freddie Mac offerings, FHA stands to lose part of its business, Gumbinger said. Lowering the annual insurance premium, he said, is a way to better compete for that group of borrowers.

Several North Jersey real estate agents said the lower annual premiums will help buyers afford mortgages, and stimulate the market.

A lot of buyers use FHA, said Ron Aiosa, a Coldwell Banker agent in Butler. Its a great program that allows buyers to get into a home with a low down payment, but that [mortgage insurance] is a killer. Lowering the premiums, he said, will attract more buyers to FHA loans.

I have worked with many first-time buyers, particularly below the $400,000 price range, who utilize FHA loans since they dont have the sufficient down payment, too much debt, or credit issues to obtain a conventional loan, said Wendy Dessanti, a Weichert agent in Tenafly. The reduced premium will encourage these types of buyers to buy, and will also help them to qualify for the loan.

Marc Stein of Links Residential Real Estate in Teaneck, however, said that the annual savings wont be significant enough to make a difference in most households ability to buy. It wont have that much of an effect on the market, he said.

The news of the less expensive FHA financing gave a bounce to homebuilders stock Wednesday. Shares of Red Bank-based Hovnanian Enterprises Inc. rose 2.8 percent to close at $3.97 Wednesday, and the shares of the other publicly traded homebuilders also rose.

Email: lynn@northjersey.com

2015
01/25

Category:
Mortgages

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$800K donated to families of slain NYPD cops for mortgages

The widows of slain NYPD Officers Wenjian Liu and Rafael Ramos embraced Wednesday after a New York City charity announced it had raised enough money to cover the costs of their mortgages.

Their eyes filling with tears, Pei Xia Chen and Maritza Ramos clutched each other and Tunnel to Towers Foundation Chairman Frank Siller after he announced the group had exceeded its goal of raising $800,000.

Words cannot express the appreciation that is in my heart, Lius widow said before hundreds of uniformed cops gathered at the Conrad New York Hotel in lower Manhattan.

DAILY NEWS LAUNCHES FUND TO HELP SLAIN COPS FAMILIES: FIND OUT HOW TO DONATE

2015
01/24

Category:
Secured Financing

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Salem Harbor cements financing for natural gas power plant

The developer of a natural gas-fired power plant at the site of the decommissioned coal plant at Salem Harbor said Friday that it secured financing to finish the project.

Footprint Power LLC, the New Jersey-based company that bought the Salem Harbor coal plant in 2012 and shut it down last year, said it had secured investments from a pair of infrastructural finance companies and gave a final green light to the builder of the new gas-powered generator. Footprint also obtained $730 million in credit commitments from a group of lenders.

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2015
01/24

Category:
Debt Settlement

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10 Tips to Find Free or Low-Cost Help to Conquer Your Debt

By Marilyn Lewis

Looking for help with debt? You are not alone. Nearly a fifth of Americans with debt told pollsters recently that they expect to die in debt. Although most Americans dont carry a balance on credit cards, about 38 percent of us do. Those carrying a balance in 2013 owed a median (half owed more, half less) of $2,300, according to the Federal Reserves Survey of Consumer Finances.

Fortunately, there are many excellent, trustworthy credit counseling agencies able to help. Unfortunately, customers of debt settlement companies often achieve little relief, and far from becoming debt-free, many end up in worse financial condition, Markita Morris-Louis, an attorney for a Philadelphia-based nonprofit that helps consumers with debt and financial problems, wrote in a column in the Delaware County (Pa.) News Network.

The federal Consumer Financial Protection Bureau explains how to tell the difference between a credit counselor and a debt settlement company.

Find Trustworthy Help

To be safe, get financial counseling from a nonprofit agency. Heres where to find a good one:

  • The National Foundation for Credit Counseling is a national network of agencies that are vetted and accredited by the Council on Accreditation. The foundations agency locator shows local, regional or national organizations operating near you that provide credit, debt and budget counseling in person, online or by phone. You can get started by submitting information online.
  • The Association of Independent Consumer Credit Counseling Agencies represents independent nonprofit agencies providing credit counseling and debt help to consumers. The agencies are accredited by the Council on Accreditation.
  • Other sources of help. Many universities, military bases, credit unions, housing authorities, and branches of the US Cooperative Extension Service operate nonprofit credit counseling programs, the Federal Trade Commission says. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

What to Expect

Trustworthy credit counseling agencies offer help with reducing debt and establishing and maintaining good credit. They can help you set up a budget. With their debt management plans, you may be able to have fees waived and interest rates and monthly payments reduced. But they cant reduce the balance (the total amount) of debt you owe.

ClearPoint Credit Counseling Solutions, a NFCC network member, explains a debt management plan: Its a systematic, step-by-step, personalized plan for paying off 100 percent of your debt. Participants make a single monthly payment to a consumer credit counseling service such as ClearPoint, and the agency distributes the funds to their creditors. Expect to take three to five years to pay off your debts.

Be Wary

Credit counselors can negotiate with your creditors to reduce your payments by lowering your interest rate or spreading payments over a longer time. But be wary of companies promising to reduce the amount of debt you owe. The CFPB says to distrust debt settlement companies that typically offer to pay off your debts with lump sum payments that are less than the full amounts you owe. For example, for every $100 of a loan that a creditor agrees to forgive, the debt settlement company will charge you some portion in fees.

If you sign up for a debt management plan, make sure it includes all of your debts, not just some. And be certain that youll be able to receive regular reports on your accounts. The National Foundation for Credit Counseling explains in detail how to assess debt management plans and credit counselors. When shopping for help managing your debts, heres what to look for:

  1. Free or low-cost counseling. Many nonprofit credit counseling services provide free advice about credit, debt and budgeting. And when it comes to getting help with a debt management plan, USA.Gov says theres no reason for an agency to charge consumers high fees: The cost of setting up this debt management plan is paid by the creditor, not you.For example, for a debt management plan, GreenPath Debt Solutions, an NFCC member, charges a one-time setup fee of zero to $50 and monthly fees averaging $36.
  2. Straight talk about fees. Dont trust a company that gives you the runaround when you inquire about the cost of its services.
  3. Free information. You should be able to learn all the details you need about an agency and its debt management plans for free. Dont surrender your personal details to get information about a company or its fees.
  4. Free help for serious hardships. Agencies should waive fees if you have a serious financial hardship. If an organization wont help you because you cant afford to pay, go somewhere else for help, advises USA.gov.
  5. A variety of services. Stay away from businesses that only offer debt services, and avoid companies offering debt reduction plans. Trustworthy agencies offer a variety of types of help, including budget, credit and debt counseling; debt management plans, in which you make a single payment to the agency, which pays your creditors and helps you get debts under control and paid off; and possibly counseling on bankruptcy, student loans, housing and mortgages.
  6. Education. Trustworthy nonprofits typically offer free public classes and workshops on financial subjects. The absence of any true education offered to the general public is a red flag, says the NFCC.
  7. Professionalism. Back away if youre feeling pressure or hear unrealistic promises. Be suspicious of counselors who push products, come on like salespeople or offer a one-size-fits-all solution.
  8. A thorough interview. An agency should take an hour or more to get the details of your financial picture, including income and debts. Be prepared to bring copies of bills and credit card and bank statements. Some clients bring along bags of bills and statements theyve been afraid to open.
  9. No minimum debt size. You should be able to get help whether your debts are large or small. If a company says it requires a minimum amount of debt to help you, youre in the wrong place.
  10. No black marks. Check out counseling agencies you are considering. Learn if your state attorney general has received complaints about an agency. Locate additional consumer protection resources in your state at USA.gov.

2015
01/23

Category:
Mortgages

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Reverse Mortgages: What Every Retiree Needs to Know

Source: Department of Housing and Urban Development.

Millions of retirees face the financial challenge of making ends meet, and for many of them, the equity they have in their homes is their largest untapped asset. Yet many retirees dont want to make the dramatic decision to sell their family home in order to free up the home equity theyve built up over the years, preferring instead to stay where they are and consider alternative ways to gain access to much-needed cash. In that vein, reverse mortgages promise to give retirees an easy way to pull out their home equity, but there are several technicalities that you should understand before considering a reverse mortgage. Lets take a closer look at what reverse mortgages are and whether theyre right for you.

What a reverse mortgage is

One of the biggest confusions about reverse mortgages is the terminology involved. In its most traditional form, a reverse mortgage involves making an arrangement with a lender whereby the lender makes monthly payments to you. But reverse mortgages have several different payment arrangements. One allows you to take payments for as long as youre alive and remain in the home. Others let you take payments for a fixed number of years, in a lump sum, or at the future time of your choosing through a line of credit. Which option you choose will affect how much youre able to borrow, but in general, the percentage of your home equity that youre allowed to tap will be higher for older retirees and lower for those at or near the minimum required age of 62.

Source: Images Money.

The Federal Housing Administration runs a government-insured reverse mortgage program that uses private lenders to extend reverse mortgage loans. The primary benefit of FHA reverse mortgages is that as long as the reverse-mortgage borrower remains in the home as a principal residence, the loan wont come due. Only after the borrower dies, sells the home, or moves elsewhere does the reverse mortgage immediately become due. Moreover, if the loan amount outstanding exceeds the value of the home, then the government is on the hook to cover the difference, protecting the lender and making sure that the lender wont come after you for any shortfall.

The costs of a reverse mortgage 

The benefits of reverse mortgages come at a price, though. Initially, youll pay between 0.5% and 2.5% of your loan amount as a mortgage insurance premium, and every year, youll pay another 1.25% of the outstanding mortgage balance to cover insurance costs. In addition, lenders are eligible to charge origination fees of as much as $6,000, with charges of up to $2,500 for the first $125,000 of value, 2% of the next $75,000, and 1% of the value above $200,000 subject to the overall maximum. Finally, monthly servicing fees can add $30 to $35 to the cost of a reverse mortgage.

To make things easier for retirees, the FHA often allows you to incorporate these costs into the total amount of the loan. That means you dont have to pay them out of pocket, but they also reduce the amount thats available to you to borrow or receive in monthly payments.

The surprise gotcha with reverse mortgages

2015
01/23

Category:
Secured Financing

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US LNG Exports Receive Major Boost

A US regulatory agency has approved plans by Cheniere Energy to proceed with building a liquefied natural gas (LNG) terminal in Corpus Christi, Texas, on the coast of the Gulf of Mexico. Construction of the terminal will begin early this year if the project wins final approval from the Energy Department.

The Federal Energy Regulatory Commission (FERC) announced the approval on Dec. 30, saying it was convinced that Cheniere, based in Houston, will operate the facility responsibly. The terminal is approved for both imports and exports and is expected to be big enough to liquefy and ship up to 15 million tons of LNG each year.

We conclude that, with the conditions required herein, Corpus Christi liquefactions project results in minimal environmental impacts and can be constructed and operated safely, the FERC said.

Related:Why US Shale May Fizzle Rather Than Boom

In an effort to win approval, Cheniere said it had approached several banks and other financial institutions to ensure it had the $11.5 billion it estimates it will need to complete the project. It also said it already had found some customers for its LNG.

One customer it named is EDF, the largest gas company in Portugal, which committed itself to buy about 8.4 million tons of gas per year from the terminal.

Now that Cheniere has the FERC approval, the US Department of Energy (DOE) must decide whether the terminal should be allowed to ship LNG to countries that dont have free trade agreements with the United States.

That decision will probably come soon because of the dozens of LNG companies that have sought similar shipping approval, but only Cheniere already has the FERC blessing, according to Chris McDougall, an industry analyst at Westlake Securities in Austin, Texas.

They have already secured financing commitments, and [the FERC blessing] is the major regulatory approval from a difficulty standpoint, McDougall told Bloomberg News. Its going to be relatively easy for the DOE to approve these projects.

Related:LNG Export Hopes Fading Fast For US

Cheniere is also building a terminal at the Sabine Pass, an outlet of Sabine Lake to the Gulf of Mexico on the Texas-Louisiana border. Cheniere CEO Charif Souki says it is expected to begin operating as early as October. He said that would make his company the first to export gas extracted during the American boom in shale gas.

This new source of gas should be able to meet up to 80 percent of the expected increase in worldwide demand for American LNG, according to the US Energy Information Administration. Yet it cautioned that the effects on overall economic growth [from the emerging LNG market] were positive but modest.

There also is some controversy over the approval of the Corpus Christi terminal. Environmental groups, including the Sierra Club, say increased exports would only lead to increased hydraulic fracturing, a shale-extraction technique that many believe poisons groundwater.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:

  • Will Low Oil Prices Shatter LNG Hopes?
  • Is The Canadian LNG Export Dream Dead?
  • Cheniere Making Big Gambles With Other Peoples Money

2015
01/22

Category:
Debt Settlement

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CORRECTED-UPDATE 1-Aggreko sees boost to trading profit after Argentina deal

(Corrects outsourcing firm to Serco from G4s in last paragraph)

LONDON Jan 7 (Reuters) – Shares in Aggreko, the
worlds biggest temporary power provider, rose more than 5
percent after it raised its 2014 trading profit expectations
following a debt settlement.

The British firm, whose kit powers major events and covers
electricity shortfalls, said it had negotiated a contract in
Argentina which included a settlement on an outstanding debt.

Aggreko said it had agreed to extend an existing 300
megawatt (MW) of capacity with Energia Argentina for two more
years. This enabled it to reach a settlement of debt for which
it had previously set aside provisions.

The company said it had also signed a two-year contract to
provide an additional 150 MW of diesel-fuelled power with
Energia Argentina and won an extension to a contract in Ivory
Coast.

Shares in Aggreko rose more than 5 percent to 1,511 pence in
early trading, making it one of the biggest gainers on the FTSE
100 index.

Its a little bit of good news at the start of the year
after the stock has been pretty weak, said Andrew Nussey,
analyst at Peel Hunt.

CEO Rupert Soames left the firm last April to join
outsourcing company Serco and in August it warned that
the strength of the British pound would hit its trading profits.

(Reporting by Li-mei Hoang; editing by Sarah Young and Jason
Neely)

2015
01/21

Category:
Mortgages

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New Rules For Reverse Mortgages: Credit Checks, Cash Flow Analysis

Seniors may want to tap their homes equity for retirement cash flow. But selling the home might not be desirable or practical.

One solution: a reverse mortgage. Recent rule changes have made them harder to get. But other wrinkles add safety and flexibility.

Reverse mortgages are loans. You get cash backed by your home. Only primary residences can secure this loan. You owe interest on the loan you receive, which you or your heirs pay along with principal in a lump sum when you vacate the residence or die and the house is sold.

If the home is sold, any excess proceeds go to you or your heirs.

Nearly all reverse mortgages are called Home Equity Conversion Mortgages (HECMs) by the Federal Housing Administration. Private lenders make them, and the FHA insures them. HECM borrowers must be at least age 62.

One recent change requires lenders to perform a financial assessment on all HECM applicants. A credit check and cash flow analysis must be included.

Thats to make sure borrowers can afford to maintain the house backing the loan. The borrowers still own the home, so they must continue paying property tax and insurance premiums. They also must pay for repairs and upkeep.

Applicants with questionable finances may be denied an HECM. Or they may be required to set some of the loan proceeds aside to cover costs. So HECMs can be difficult to get.

Age-Old Concerns

A recent change may encourage married couples to seek HECMs. Heres the background:

The amount that you can borrow with an HECM depends on several factors, including the borrowers age. Older HECM borrowers can get more cash than younger ones.

The older the borrower, the shorter the life expectancy and the sooner the lender can expect to be repaid. So loans for older borrowers tend to be larger.

For that reason, some married couples borrow only in the name of the older spouse in order to increase the amount theyll receive.

This strategy has posed problems when the older spouse (who is the only official borrower) dies.

Then the surviving spouse, not named on the mortgage, would have to repay the loan, including the outstanding interest, usually promptly. Failure to repay could result in foreclosure.

Under pressure, the federal government changed the rules in 2014. Now a nonborrowing surviving spouse can remain in the home if certain conditions are met.

The nonborrowing spouse must be named on the loan documents, for example. And he must have a legal right to remain in the home.

The survivor also must agree to all the borrowers obligations described in the loan documents. Assuming that everything has been done correctly, loan repayment remains deferred until the survivor dies, moves or sells the house.

Another type of HECM, the HECM for Purchase, lets seniors buy a primary residence theyre not living in. These loans, known as H4Ps, have their own rules. They may appeal to retirees who want to downsize or relocate.

Seniors shouldnt shift into a reverse mortgage without careful planning. Multiple fees are involved, and they can add up, crimping your retirement. You should expect to remain in the home for several years to make paying reverse mortgage costs worthwhile.

2015
01/21

Category:
Debt Settlement

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The Don’ts Of Managing Excessive Debt Or Seeking New Ones

VENTURES AFRICA When embroiled in a debt debacle, specialists often caution against taking a drive through the risks suburb, as it could in the process leave a huge scar on on your credit score skin, as well as swell the fees and taxes you pay. But asides a risky drive, there are some ideas we might have about managing excessive debts, some of which can be considered very dumb.

California based general interest website, How life works, has identified some of the dumbest ways of handling too much debt or even seeking fresh capital (debt); all of which should be avoided.

Paying a creditor less than you owe

When you pay only a portion of your debt, it heightens the growth of the amount owed. This deed in turn compounds the original problem and forces you to seek help from different, and less dependable sources. In such cases, you might not be in the position to set the repayment terms, worsening the overall debt situation you attempted getting out of in the first place.

Relying on Relatives

Contrary to the perceived conception, friends and family are not usually the best option when managing problems such as debt. In the long run it will put a strain on your relationship with some of the most important people in your life. This may also give off the impression of generally poor managerial skills and lessen your chances of seeking for fresh loans.

Avoiding Cheaper Credit Counsellors

When unable to handle debt problems personally and you attempt to pursue professional advice, it is important to approach someone candid; who will offer the best advice for a reasonably affordable fee. This ensures you do not incur more debt in terms of consulting cost should you not get the best of advices. It also allows a professional walk you through the recovery process by revising your expenditure or taking a ‘debt consolidation loan‘ at a competitive price, with very little cost in exchange for such services.

Declaring Bankruptcy

Declaring a state of bankruptcy can affect your future financial rating, having a far reaching effect on your borrowing prospects. It is therefore advisable to avoid such decisions especially when debt settlement seems like the best option for you. It is a myth that bankruptcy ruins your credit for only seven to 10 years; it goes far beyond decades.

However if you are convinced that debt settlement is the best option, it would be wise to approach a company that will offer a large, one-time payment toward a current balance in return for letting the rest of the debt slide. For example, someone who owes $20,000 on a single credit card can bring forth a one-time payment of $16,000, and in return the credit card company agrees to wave the remaining $4,000.