Monthly Archives: August 2015

2015
08/31

Category:
Mortgages

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Factors to consider on interest-only mortgages

One reason is that many of those borrowers qualified for their loans on the basis of their ability to repay the lower, interest-only payment. When their monthly payment reset higher, many couldnt keep up.

Thats no longer the case. Now lenders are required to determine whether borrowers qualify for any interest-only loans, or other adjustable-rate mortgages, based on whether they can afford to make the eventual bigger monthly payments that await them once the initial interest-only period ends.

As a result, such interest-only loans now make up only about 0.2 percent of all adjustable-rate mortgages, or ARMs, which account for about 4 percent of all home loans for purchase and refinancing, according to data from CoreLogic.

Use of interest-only mortgages peaked 10 years ago at the height of the housing bubble at around 10 percent of all ARMs.

The big difference here is interest-only loans are back to being the niche product that they traditionally had been, said Greg McBride, chief financial analyst at Bankrate.com. The go-go days of the housing boom were the exception.

Still, rising home prices can make interest-only loans a tempting option for borrowers who are interested in a lower mortgage payment and can qualify for such a loan under todays stricter guidelines.

At least one lender is looking to expand access to interest-only loans to a broader range of homebuyers, not just the affluent buyers who typically take advantage of such loans.

Last month, United Wholesale Mortgage began making interest-only home loans through its network of mortgage brokers. The loan program covers mortgages as low as $250,000. Thats just above the US median home price of $236,400, but well below the recent median price in Southern California of $426,000.

Even with todays stricter guidelines aimed at ensuring borrowers can handle interest-only loans, they carry potential financial risks. Here are some things to consider when weighing whether such a loan is right for you:

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PAYMENT CHANGES

Interest-only mortgages can come with a fixed or variable interest rate and an initial period when the borrower only pays interest on the loan. Thats usually three, five, seven or 10 years. After the interest-only period, the monthly payment can increase sharply as the borrower begins to also pay down the principal on their loan.

In addition, the borrower is left with 20 years to pay off the balance of the loan.

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2015
08/30

Category:
Pay Day Loans

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Thousands seek help for debt and homelessness amid "devastating impact" of …

Senior advisor Chris Lowry said: People believe that Cheltenham is an affluent town with no social problems.

However, every day we see people in our waiting room who are either homeless or within a few days of being so.

Cllr John Rawson, deputy leader of the borough council and cabinet member for finance, said: CCPs comments are a vivid reminder of the devastating impact which benefits cuts are having on many people in Cheltenham.

I am under no illusion that everyone in Cheltenham is affluent I know that some people are struggling to keep a roof over their heads.

Although we cannot reverse the effects of government policies, we see it as the councils responsibility to do all we can to help people who are in genuine hardship.

Since March last year the charity has managed some £863,000 of debt for people in Cheltenham and dealt with more than 213 benefit problems.

It also handled housing problems and prevented homelessness for 373 people to March 2015.

On the issue of debt, Mr Lowry added: There are a range of reasons but the rise in pay day loans has not helped. People are being cut to the bone and taking pay day loans to live.

CCP works with the borough council to provide support for people with social problems.

Its advice service shares the Cheltenham First Stop building, in the High Street, with Cheltenham Borough Homes housing service.

Cllr Rawson added: Thanks to the hard work of these teams, the number of households becoming statutory homeless remains at record lows, in spite of the pressures placed on people on low incomes by the welfare changes.

I would advise anyone who is homeless or worried about losing their home to approach Cheltenham First Stop for advice.

The support available will depend on individual circumstances, but emergency accommodation is available for people who are very vulnerable or have children and who have become homeless through no fault of their own.

2015
08/30

Category:
Mortgages

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There Are Actually 3 Types of Reverse Mortgages

If you are considering taking out a reverse mortgage home loan, there are three different types to consider. Well give you the details so you can better decide which one is right for you.

Home Equity Conversion Mortgage (HECM)

The most popular of the three reverse mortgage types is the Home Equity Conversion Mortgage (HECM). This is considered the most commonly issued loan of this type, according to the HUD. One reason: it often comes with lower rates and lesser fees than those that would be offered by private lenders. In addition, the FHA backs these loans, making them a more lucrative option for the banks that issue them.

Qualifications include:

  • You have to be at least 62 years old.
  • You have equity on your home.
  • Your home must meet certain building requirements.
  • You must have undergone reverse mortgage counseling.
  • There are no income or credit requirements.

Since these loans are FHA backed, they do have some conditions that must be met. These include:

  • There are loan limits, and the loan cant exceed 100% of the homes value.
  • A Mortgage Insurance Premium (MIP) is required for all HECM reverse equity loans.

Reverse Annuity and Home Equity Conversion Mortgages

The other option that you have is with reverse annuity and home equity conversion mortgages. A reverse annuity mortgage comprises an agreement between the lender and the homeowner, where the homeowner borrows against existing equity in the home. The money borrowed has to be repaid only when the home is refinanced or is sold. While reverse annuity mortgages do have three different classes, the most common is the Home Equity Conversion Mortgages (HECM) because its backed by the FHA.

Private Company Reverse Mortgage

It is possible to get a non-FHA backed loan of this type, commonly referred to as a private company reverse mortgage. But these types of mortgages are typically based upon income and credit score as well as existing home equity, since they are privately backed, and can often come with higher interest rates and more fees because they are offered by private lenders.

If you are considering a reverse mortgage loan, make sure you take the time to research all of your options. You will likely arrive at the conclusion that an HECM loan is the best suited for your needs, namely due to how lucrative they are in comparison to your other borrowing options.

For more stories you like, visit NowItCounts.com, the new destination for Americans 50+ covering financial, health, beauty, style, travel, news, entertainment and sports.

2015
08/29

Category:
Secured Financing

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Landfill Energy Contract Extended

Director of Solid Waste Timm Schimke says California-based Waste To Energy Group has suffered numerous delays in securing funding, but finally appears ready to proceed. They have given us documentation showing us they have secured financing for the project, and they have given us a fairly detailed milestones schedule; and they have given us some draft documents of both Community Development and DEQ permit applications. So, the county feels comfortable that progress is being made.

2015
08/28

Category:
Mortgages

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Bank of New York Mellon (BK) Stock Down on Faulty Mortgages Lawsuit

NEW YORK (TheStreet) –Bank of New York Mellon (BK – Get Report) stock is declining 3.12% to $42.80 on heavy trading volume on Thursday afternoon, after the Federal Deposit Insurance Corp sued the financial company over the sale of $2.06 billion in mortgage-backed securities to a failed bank, Reuters reports.

The FDIC alleges Bank of New York Mellon failed to protect its investors in its role as bond trustee leading the US regulator to lose more than $440 million when it sold the securities in 2010 in its role as receiver for the shuttered Guaranty Bank.

Guaranty Bank closed in 2009 and its deposits were assumed by a US division of Banco Bilbao Vizcaya Argentaria (BBVA), Reuters added.

2015
08/27

Category:
Debt Settlement

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ON THE MONEY: Managing your debt, Part II

Let#x2019;s assume that you are in debt up to your eyeballs; creditors are calling demanding payment, and you can see no way out of the morass that you are in. Is there any action to can take to begin to crawl out of the debt hole that you find yourself in?

First things first, my advice is not to use a debt consolidation or debt settlement firm to resolve your situation. Remember that a debt consolidation firm is a for-profit concern, unlike a consumer counseling firm, which is usually nonprofit.

A debt settlement firm will tout that they can negotiate with lenders and reduce the amount of debt that you owe. In fact, creditors will sometimes refuse to work with these companies.

2015
08/26

Category:
Mortgages

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On the House: Presidential hopefuls and the mortgages they keep

You cant tell the 2016 presidential hopefuls without a scorecard, but thanks to the Loan Depot, we know something about their houses and how much their mortgages are.

I cant do them all in this space, so if anyone thinks Ive slighted their favorite hopeful, you can view the full list here.

Jeb and Columba Bush live in Coral Gables, in a 3,485-square-foot, four-bedroom, four-bath townhouse purchased in August 2011 for $1.3 million. Its assessed value in 2014 was $1.1 million. In July 2013, public records show, they refinanced their mortgage to a 30-year conventional loan for $754,000.

2015
08/26

Category:
Secured Financing

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Investment Analysts’ Recent Ratings Changes for Franklin Street Properties …

Franklin Street Properties Corp. (NYSE:FSP) last issued its quarterly earnings results on Tuesday, July 28th. The real estate investment trust reported $0.27 earnings per share (EPS) for the quarter, meeting the Thomson Reuters consensus estimate of $0.27. Analysts anticipate that Franklin Street Properties Corp. will post $1.06 EPS for the current fiscal year.

The firm also recently announced a quarterly dividend, which will be paid on Thursday, August 13th. Shareholders of record on Friday, July 24th will be paid a dividend of $0.19 per share. This represents a $0.76 annualized dividend and a yield of 6.46%. The ex-dividend date of this dividend is Wednesday, July 22nd.

Franklin Street Properties Corp. (NYSE:FSP) is a real estate investment trust (REIT). The Company is focused on commercial real estate investments primarily in office markets and operates through real estate operations segment. The real estate operations segment involves real estate rental operations, leasing, secured financing of real estate and services provided for asset management, property management, property acquisitions, dispositions and development. FSP Corp holds, directly and indirectly, 100% of the interest in three former subsidiaries: FSP Investments LLC, FSP Property Management LLC, FSP Holdings LLC, and FSP Protective TRS Corp. The Company operates some of its business through these subsidiaries.

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2015
08/25

Category:
Secured Financing

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iContainers helps companies move freight globally through its online service

Several years ago, two freight forwarders in Spain found to their dismay that they had lost a client.

The customer called their Barcelona company after hours to urgently request information on a freight shipment — transportation schedules, costs, alternative ocean routes — but could not reach the two agents and switched to a competing company.

The two Spaniards — Iván Tintore and Carlos Hernández — decided they needed to offer a more efficient way to meet the needs of their international clientele, who move large volumes of cargo each year by ocean and air freight.

As a result, they developed iContainers, a pioneering online service that allows shippers anywhere to log onto iContainers.com 24 hours a day, search thousands of transportation options, and find the best routes, schedules and rates for moving their merchandise.

“We realized that the freight-forwarding industry was old-fashioned and needed to change,” said Hernández, iContainers’ co-founder and global managing director. “We are like Kayak.com and Expedia.com, but instead of moving people, we move freight.”

The two developed the first Internet-based freight-forwarding system in Barcelona at the end of 2007, secured financing from venture capital firms and set up the new company. “We offer our clients the option of searching for the best routes for ocean or air freight, and quoting and booking online,” Hernández said. “Essentially, you log onto iContainers.com and compare the cost of shipping goods from point A to point B, anywhere in the world.”

One of the main pages on the iContainers website, showing a cargo vessel loaded with multicolored containers in the background, summarizes what the company offers: “SEARCH. CHOOSE. BOOK. Best rates guaranteed.”

The company helps clients move freight throughout Europe, North and South America, Africa, Asia and Australia via sea and air, charging a fee for its services.

“Our platform aggregates freight rates for more than 100,000 trade routes covering over 300 destinations,” said Hernández, who obtained a bachelor’s degree in business and an MBA from Barcelona’s ESADE business school and worked as a venture capital analyst before becoming a full-time freight forwarder.

The new service quickly caught on in Europe, and last year handled over 4,000 shipments globally, each of which involved anywhere from one container to more than a score.

In 2013, the company decided to set up a subsidiary in Miami, a major center for international trade in the Americas. Hernández came here to open iContainers USA, which now has eight employees. The home office in Barcelona has 25.

iContainers USA began operating in Miami in 2014 and is a fully licensed and bonded international freight forwarder. The company mainly offers “door to port service,” which means the company makes arrangements to pick up merchandise from the customer’s place of business, move it to PortMiami or Miami International Airport, and send it on to its destination. It also provides “door-to-door” service for some freight routes between two countries, and is expanding this service, Hernández said.

“This is a first step in developing our global platform that will allow companies to ship everywhere from everywhere,” he added.

iContainers works with large firms, small and mid-sized businesses (SMEs) and individuals. Once a customer books a shipment online, employees at the Miami office handle the details of arranging the shipment and keep the customer informed of the merchandise’s movements.

Aside from these duties, iContainers’ employees in Miami provide guidance to SMEs and to individuals who want to ship or receive goods but who may not be aware of the complex international import/export regulations, duties and other red tape.

iContainers USA is also sponsoring a series of international trade seminars and webinars. These events focus on how to optimize the logistics process in international trade and explain best practices developed by exporters and importers.

While iContainers was a pioneer in developing an online system like Kayak.com for freight, Hernández said that Google recently launched a website that “mimics iContainers’ platform,” and that a few other companies are following the same route.

“What we’re seeing is a ‘seed boom,’ where competitors were essentially waiting to see if iContainers’ concept and technology works,” Hernández said.

Despite looming competition, iContainers’ strategy is to continually improve its technology, enhance its platform and enlarge its network of shipping partners.

“The shipping industry has a long and rich history,” Hernández said. “Key players have been around for many decades and it’s essential to create an international network of partners who trust our service and believe in our ability to provide a full range of services, including door-to-door.”

One key element in iContainers’ strategy is to continue the company’s outreach to SMEs — a rapidly growing segment in international trade — as well to multinational companies, Hernández said.

“Through our efforts in communities and our events, we plan to educate businesses about the ease and affordability of going global,” he said.

2015
08/24

Category:
Pay Day Loans

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Rebecca Coulson: Students, class – and why debt isn’t always bad for you

Rebecca Coulson is a freelance classical musician and writer, and was Parliamentary Candidate for the City of Durham at the 2015 General Election.

I wouldn’t say I’m an Andy Burnham fan. I was never into Thunderbirds, and I don’t buy the whole enemys enemy is my friend thing. But a point he made last week has stuck with me. I think we need to return to it – though I don’t agree with his reasons for doing so. Sorry, Nick Clegg, to exhume old wounds. Sorry, Ed Miliband, to rerun your embarrassment). Sorry, ConHome, I know I’ve addressed this topic before. But here we are, anyway, back to higher education (HE) funding with Burhams proposal to replace tuition fees with a graduate tax.

He gets away with this posturing because, clearly, enough people still don’t (or choose not to) understand the system in place. This incomprehension or misdirection is exemplified by those who, like Labour’s Captain Scarlet, continue to call for a graduate tax. It’s hilarious, of course, because what the Conservative-led coalition introduced is practically that. Although, surely, it’s actually preferable to one: it is, effectively, an income-contingent, fixed-term tax liability. Students don’t pay anything until they can (if ever) afford to, at which point it’s taken from their wages gradually, until it’s paid off.

There’s something else, however, which isn’t quite so hilarious. Obfuscation hasn’t simply led to political opportunism; it’s also led to a different and much more concerning confusion.

We all know that we have a problem with debt. And that this problem isn’t peculiar to Britain. Admirably, current Conservative economic policy centres on an attempt to move away from this – to move from being a debt-based society. This needs to be an aim not just for the country, but for individuals, too: debt, unsurprisingly, is a serious cause of poverty.

In that sense, opposition to substantial tuition fees which are paid through what is referred to as a loan is to be expected. Regardless of how and when it’s settled, students are, technically, taking on an immense amount of personal debt ‘averaging at more than £44,000’. And this will, most likely, continue to rise, as the limits at which universities are allowed to set their fees change over the years. Ok, this might change for the better; I don’t have time now, but I’d argue that greater freedom over charging would be advantageous. The situation will develop, however and some students will, almost certainly, acquire larger loans.

Whilst the American higher education system has much to be envied its range of educational programmes, broader undergraduate degrees, and philanthropy-exploiting financial support network – its costs, and, consequently, its fees, are spiraling out of control, as institutions compete over what can they offer.

Ivory Tower, which aims to reveal how students end up paying more and more, yet gaining less and less, points out that ’68 per cent of students in public universities don’t graduate in four years’ – whilst sketching a culture of climbing walls in atriums, drunken fights in swimming pools, and online teaching replacing classrooms. The film’s sensationalism somewhat depletes its credibility, but it does make a strong argument for students needing to think carefully about value for money, and which form (if any) of higher education will give them a fitting education, rather than fit photos for their Facebook account.

And what about the cost of living? Criticisms that Conservatives only want the rich to benefit from university education were reignited by the Budget’s announcement that maintenance grants will be replaced by loans. The biggest flaw in these criticisms is that this approach in which students pay when they, themselves, can afford to further removes one’s familial socio-economic background from the higher education equation.

Detractors also miss the point that whilst the current support system is extensive providing (tapering) grants to those whose parental income goes up to £42,620 it is already highly dependent on loans. If student living costs are between around £5,070 and £10,590 per year, then even the highest grant amount (£3,387 for those whose parental income is less than £25,000) cannot be sufficient in itself. The maximum maintenance loan is £8,009; it will increase in 2016.

But, surely you cry all this still hinges upon debt, doesn’t it? And we’ve decided that debt is bad, haven’t we? But that said, there are different kinds of debt, aren’t there? And taking on some of them is usually deemed to be necessary, or even sensible. Yet the media furore surrounding student loans seems to bracket them with pay-day loans rather than mortgages. (I’m not suggesting that they’re usefully comparable to either.) Yes, student debt is a huge and to many, worrying responsibility, but we need to be clearer about what it means. We need to decide where student loans fit into the wider debt question: students should be clearer in their choices about this, and politicians in their rhetoric.

It looks as if the current system might offer a sustainable method of funding universities. And this is crucial because remember they don’t charge fees to conform with some corrupt ideological global order. Rather, Britain is fortunate to have truly world-leading universities, and this is expensive. More and more students, and higher and higher standards, means more and more cost. University education was never free, and it’s only fair that its increasing amount of elective beneficiaries contribute to its increasingly vast expense.

Happily (if you think that constant expansion is good), this hasn’t dulled demand. Indeed, making higher education free at the point of delivery has (let’s forget about the correlation/causation chasm for now) inspired more people and, particularly, those from disadvantaged backgrounds to apply to university. This claim was at the heart of the Conservative election campaign: ‘In 2015, 18 year olds from across the UK were more likely to apply to higher education than in any previous year () In 2015, application rates of 18 year olds living in disadvantaged areas in all countries of the UK increased to the highest levels recorded.’

But even if we agree that the system is working, we must reconsider how we regard student loans. If we want growing numbers of people from all backgrounds to continue to apply to university, we should examine whether attitudes towards debt are influenced by familial experience. And whether taking out a student loan increases one’s chances of having an unhealthy relationship with debt later in life.

We need to educate people about education, and its costs. And we need to do it in a fair and clear way. It’s can’t be as simple as changing the term from ‘loan’ to ‘tax’. But thinking about that could be a place to start.

*Whilst attempting to establish the average cost of student living, I came across this helpful report; it’s essential that we’re all aware (see final page) of comparative levels of chess spending.

America Andy Burnham MP Conservatives debt Labour Students Universities amp; Skills