Monthly Archives: September 2015

2015
09/23

Category:
Establishing Credit

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Overview of the benefits of hiring a commercial foreign exchange company

Globalization, the Internet, ecommerce, and a liberalized approach by countries towards trans-national and international trade have enabled firms, small and big, to look beyond their domestic markets and explore global trade prospects.

While catering to an international clientele offers significant benefits and advantages, firms must also be prepared to face risks and challenges that domestic companies and firms never face.

This is where relying on a reputed and trustworthy commercial foreign exchange company can prove to be very beneficial. Read ahead for an overview of the benefits of working with such intermediaries when finalizing international contracts and carrying out large international transfers.

Minimize Impact of Exchange Rate Volatility

Finalizing a contract worth $100,000 with a domestic client will result in a guaranteed income of $100,000 for your firm. There is no question of any revenue uncertainty. However, international contracts where payments are made or received in foreign currencies involve an inherent risk of exchange rate volatility.

Chinas decision to devalue its currency or a decision by a European Union member nation to default on its debt can result in forex market volatility, which can consequently lead to an adverse impact your expected revenue or anticipated costs.

The biggest challenge involved in such transactions is that it is virtually impossible to anticipate how the exchange rates will move. A commercial foreign exchange company can help you hedge your positions and minimize impact of adverse changes to the exchange rate. If you are finalizing a Euro contract, then locking your exchange rate in advance can help you stabilize costs and revenue well in advance.

This will help you take exchange rate volatility out of the equation when finalizing multi-currency contracts with your foreign clients and suppliers. This will ensure your costs and revenue calculations are not subject to variations due to factors beyond your control. This certainty will help you make swift adjustments to your trade practices to overtake competitors who are subject to frequent exchange rate variations.

Process Large International Transfers

Unlike domestic contracts, unanticipated delays in processing of international payments or receipts can result in significant complications, including avoidable and unnecessary litigation.

Sending money to a foreign client can involve multiple instances of currency conversions and completion of formalities involving many international financial institutions. Similarly, receiving payments or establishing credit lines can involve many additional procedures and formalities.

Hiring the services of a reputed foreign exchange company will help you carry out large international transfers without worries of delays or inadvertent procedural violations. You just need to issue the necessary instructions and wait for the client to confirm receipt of your payment.

Enhance your Firms Presence and Reach

With the right foreign exchange firm by your side, you can proceed ahead with international contracts in different currencies like Euro, Yen, and the Renminbi without any worries. You lack of knowledge about how international currency markets function and how foreign currency transfers are processed will not impair your ability to benefit from global opportunities.

Deploy Forex Strategies to Maximize Revenue

A smart entrepreneur will never let go of any opportunity to improve revenue and maximize profits. Commercial forex companies can help you leverage your existing exposure to take advantage of anticipated changes in the value of your currency. You can create a safe strategy where risk of losses is minimized to boost your income.

Expert forex market guidance combined with strategic advice and assistance can help you extract double benefits from your firms foreign currency transactions.

Strategic Advice and Guidance

Should you setup foreign currency deposit accounts for receiving foreign revenue and making foreign payments? Or, should you continue converting all receipts into your domestic currency before initiating forex payments? A professional firm will help you analyze the pros and cons of different strategies after considering relevant regulations, compliance norms, and costs.

The combination of expert advice and online access can help you carry out foreign currency transactions in a manner no different than executing a domestic transfer. There was a time when only big firm with deep pockets could consider exploring international markets.

Today, a competitive strategy combined with the services of a professional foreign exchange company can help you expand your presence to different parts of the world without facing significant risks.

2015
09/23

Category:
Mortgages

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Adjustable Rate Mortgages Bouncing Back – But Are They Right For You?

NEW YORK (MainStreet) — Adjustable rate mortgages, the bane of consumer advocates, and the trap door for hundreds of thousands of homeowners who saw their mortgage payments rise in the heat of the Great Recession, are staging a comeback.

Now there are signs that adjustable rate mortgages, which faded out of sight a few years ago, may be achieving a new life of sorts, says Michael Moskowitz, president of Equity Now, a direct mortgage lender in New York. Some borrowers see them as a way to save money and to make it easier to qualify for a mortgage.

Mostly, ARMs are rallying around larger mortgages. The Wall Street Journal reportsthat ARMs comprised 22% of all mortgages between $417,000 and $1 million in 2013, but that rate jumped to 31% in 2014, and continues to climb.

Moskowitz says adjustable rate mortgages work best if you only plan to live in a home for a short period of time. In that case, an ARM is worth it.

If you have a choice between a 30-year fixed loan at 3.82% and a hybrid 5/1 ARM, which stays fixed for five years, at 3.32%, the savings over the first five years can save big bucks on mortgage payments, Moskowitz says.

Those who may want to consider ARMs include those who work for a company that moves people around every five years or so or those who are planning to sell their home in five years and move to Florida, he adds.

2015
09/22

Category:
Mortgages

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Cook: Beware the misleading claims of reverse mortgages

On a trek across Wyoming with my dog, I visited with someone who lives 300 miles away.

His backyard features a dog run, though his canine friend is long gone. While the small, 100-year-old home is cute as a button — he upgraded it to serve his needs, adding and a wood-burning stove — it’s also burdened with a reverse mortgage.

When he entered the deal, he held a mortgage from a bank that valued the home at $50,000. The reverse-mortgage lender assured him that the home was worth $90,000, which meant money to cover debts incurred by an outsize divorce and a law practice that’s less than cost-effective.

Fast forward a few years later to the present.

The reverse-mortgage lender sends monthly statements that show his modest home at a price of $150,000, meaning he’ll never be able to opt out of the deal. Like the protagonist of “Sixteen Tons” who says, “I owe my soul to the company store,” my Wyomingite owes his soul to his lender.

“What if you need assisted living?” I asked. In that case, the lender will let him off the hook but confiscate the house. My friend has lost his one asset of value, yet he pays on it every day.

CNBC says a Home Equity Conversion Mortgage is a loan allowing homeowners ages 62 or over to get cash based on the equity in their home. They can get a lump sum, monthly payment or a line of credit. As long as they stay in their home, borrowers need not repay the reverse mortgage. The balance is due when the last surviving borrower dies, sells or moves out. But if homeowners outlive the amount of equity, they must sell or go back to work — if they can. If not, they face foreclosure.

Practically every AARP publication sports full-page ads showing smiling couples claiming to have found security in knowing that, thanks to reverse mortgage, they are free of mortgage payments and safe from monthly increases. You might see images of youthful retirees on the golf course or enjoying other leisure activities in a reverse mortgage advertisement — on television, radio, in print and on the Internet. Many feature celebrity spokespeople discussing the benefits of reverse mortgages without mentioning risks. Much less do they warn that financing retirement with debt is a big mistake. You can’t win the money game by going into debt — especially when you’re older.

The US Government Accountability Office last year found dozens of misleading marketing claims about reverse mortgages, in materials distributed by several large lenders. For example:

  • Lifetime income. Not true. Income from a reverse mortgage stops if you sell your house or move.
  • Never lose your home. Not true. You can lose your home if you can’t afford to pay taxes, insurance or maintain the home.
  • Never owe more than the value of your home. Not true. If your loan exceeds the value of your home, you or your heirs will have to make up the difference if the home isn’t sold when the loan is due.
  • Implications that a reverse mortgage is a government benefit rather than a loan. Some lenders even use government logos to convince you to buy.

2015
09/21

Category:
Filing Bankruptcy

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Can I give money to my son before filing bankruptcy?

I want to give my son $20,000 for a wedding present, probably by borrowing from my 401K account. But I also need to file bankruptcy. Would that be a problem?

2015
09/20

Category:
Mortgages

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Fewer Colorado Springs homeowners upside down on their mortgages, report shows

Rising property values, an improved economy and fewer foreclosures are putting many Colorado Springs-area residents in a better financial position when it comes to owning their homes, according to a new report this week by CoreLogic, a California-based housing data firm.

During the second quarter of this year, 5,726 – or 3.7 percent – of Springs-area residential properties with a mortgage were in negative equity, the CoreLogic report shows.

By comparison, 7,274 – or 4.6 percent – of local residential properties with a mortgage were in negative equity during the second quarter of 2014.

Negative equity refers to property owners who owe more on their mortgages than their properties are worth – commonly known as being upside down or underwater.

If homeowners owe more on their mortgages than their properties are worth, they typically cant qualify to refinance or cant sell their homes without bringing cash to the closing table.

The shrinking numbers of property owners in negative equity is in sharp contrast to the past several years, when home values tumbled as a result of the recession. In the second quarter of 2010, nearly 30,000 Springs-area properties were in negative equity, according to CoreLogic.

But the economy has recovered locally and nationally. The economic upswing, historically low mortgage rates and a tight supply of existing homes for sale have combined to spark a demand for single-family housing and drive up property values.

Local home prices have increased in 15 of the last 16 months, the Pikes Peak Association of Realtors has reported. Also, the median price of single-family homes rose to a record of $243,000 in May, and then set another record in June when it rose to $250,000.

At the same time, the number of property owners falling into foreclosure has declined since the recession. Through August, new foreclosure filings were on pace to finish the year at their lowest total since 2001, according to the El Paso County Public Trustees Office.

Contact Rich Laden: 636-0228

Twitter: @richladen

Facebook: Rich Laden

2015
09/19

Category:
Finance

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RI finance director to retire

ROCK ISLAND — City of Rock Island finance director Cindy Parchert has announced shes retiring in January.

Ms. Parchert is in her second stint working for the city, after being hired as finance director by city manager Thomas Thomas in late 2011. She previously worked for the citys finance department for 11 years.

2015
09/18

Category:
Finance

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College of DuPage financial officials fired

The College of DuPages top two finance officials were fired Wednesday for poor money management at the publicly funded college, allegations that their attorneys said were politically motivated and without merit.

Treasurer Thomas Glaser and Controller Lynn Sapyta, who have been on paid leave since June, were the first top administrators fired for cause since a new majority took over the Glen Ellyn-based schools board of trustees in April. They each were provided nine reasons for their terminations, including violating the schools investment practices and accounting problems tied to the colleges high-end restaurant.

2015
09/17

Category:
Finance

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State-owned finance sprawl needs better management – watchdog

LONDON Britain should overhaul the way it runs a growing sprawl of state-owned financial bodies ranging from nationalised banks to institutions that manage student loans and business lending, the countrys spending watchdog said on Thursday.

Britain now has 54 state-controlled financial institutions, double the number in 2007, many of which were created as the government battled to keep the economy afloat during the financial crisis.

They now make up a sizeable chunk of the governments balance sheet — wholly-owned government institutions represent a total asset value of 222 billion pounds — but no single government agency commands an overview of them, the National Audit Office (NAO) warned.

The NAO also said it was hard to distinguish whether some of these bodies were supposed to be temporary.

Most of these institutions are unregulated which makes it difficult to see how the government can fully understand what is going on across these bodies or ensure taxpayers money is being properly protected, said Meg Hillier, an opposition Labour MP who chairs parliaments committee of public accounts.

The NAO concluded the government should take a portfolio approach to managing its financial institutions.

The government is reducing its exposure to the financial sector by selling shares in Lloyds Banking Group and RBS, two major banks which were bailed out with taxpayer funds during the crisis.

But at the same time it will expose itself to more debt through a further expansion of student loans, as well as programmes like the Help to Buy mortgage subsidy scheme.

Overall, the government risks losing more than the 200 million pounds it expects to see over the next five years.

The governments poor track record in achieving value for money from selling shares and getting back the money will give the public little confidence that the debt increase will be limited to 200 million pounds, said Hillier.

Last year Hilliers committee was critical of the governments sale of Royal Mail, which it said was blighted by a fear of failure and poor advice from state-appointed banks.

(Reporting by Andy Bruce; editing by William Schomberg)

2015
09/17

Category:
Establishing Credit

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Cash is king when it comes to security

These days, you rarely have to touch a dollar bill if you dont want to. In addition to the limitless amount of shopping you can do online, credit and debit cards are ubiquitous in the offline world, accepted by vendors large and small.

Also, mobile phone payments like Apple Pay and the forthcoming Samsung Pay and Android Pay (really original names, by the way) promise to make electronic payments even easier and more secure.

I did a quick survey of five coworkers, all of whom are 31 or younger. Four of them had no cash on their person. The other had a whopping $16. (Ill accept that there is a slight margin of error in my study because I didnt frisk them to make sure, and some of them could have been lying because they thought I was about to borrow money from them.)

In my experience, my young colleagues are not unique; the exclusive use of cards and phones to pay for things has become the norm for an entire generation of people. But electronic payment methods of all kinds are vulnerable to ever-scarier modes of attack. This is why I still like cash.

In many ways, cash is the most secure form of payment. It carries no personal data of any kind, so youll never have to worry about giving away your identity. Sure, if cash gets lost or stolen, its gone for good. But if thieves get your cash, they wont automatically have access to more of it.

Meanwhile, the theft of credit or debit card information begets more theft. Daily Press editor Steve Hunt told me a story of how his bank account was compromised while he was on vacation. Not only did the crooks clear out his checking account, they figured out a way to get an advance on his paycheck and steal even more money.

It was a mess that took quite a while to clear up, but luckily he had plenty of cash on him so he didnt end up stranded and penniless.

Steve told me another story about how identity thieves recently stole his debit card information without ever getting their hands on the card. He was likely a victim of a particularly scary type of cybertheft, where crooks use an electronic scanner that can capture your card information through the air. They only need to stand near you, and your information is hacked without you ever knowing it.

Steves bank alerted him to the fraudulent charge attempts and nipped it in the bud, and they sent him a new type of card that is supposedly less susceptible to these types of attacks. Still, its enough to make you worried about all the data youre carrying around in your wallet.

Theres now a special security sleeve available that claims to protect your cards from these scanners. While I cant speak to the efficacy of these sleeves, the more I learn about high-tech credit card fraud, the more I think I should buy one.

So what about Apple Pay? One of its selling points is its supposed security. You hold up your iPhone to a sensor that collects a payment from the phone. No actual credit card number passes through the air, and the payment is not sent until you unlock it with your fingerprint.

This payment form might be reasonably secure, but it has its flaws. According to a Los Angeles Times report from earlier this year, scammers are loading stolen credit card numbers onto Apple Pay accounts and running wild with fraudulent purchases.

It seems the bottom line is that no matter what type of electronic payment youre using, the bad guys will find a way to exploit it. Id love to just go off the grid and use cash exclusively, but its not really possible. Good luck trying to borrow money without establishing credit in your name, not to mention that having a credit or debit card is pretty much mandatory for certain things like renting hotel rooms or cars.

I can also admit that its just not practical or safe to carry around huge amounts of cash, but I like to always have some on me and use it for payments whenever possible. The anonymity and identity-theft security cant be beat.

In a cashless age where thieves are moving from the street to cyberspace, one way to mitigate the risks is to carry a few more greenbacks.

2015
09/16

Category:
Finance

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Hillary Clinton boosts small donors in campaign finance reform plan

The proposal, which was outlined by Clinton aides, takes on an issue that invigorates liberal Democrats who see money in politics as a corrupting force.

By proposing a campaign finance plan, Clinton is meeting her most ardent primary opponent — independent Vermont Sen. Bernie Sanders — on his home turf.

Clintons calls for overturning Citizens United, a 2010 US Supreme Court decision that opened the floodgates for outside money in politics, by pledging to appoint only justices to the Supreme Court who will rule against it. As she does regularly before Democratic audiences, Clinton said Tuesday that she is open to a constitutional amendment to end Citizens United.

We have to end the flood of secret, unaccountable money that is distorting our elections, corrupting our political system, and drowning out the voices of too many everyday Americans, Clinton said. Our democracy should be about expanding the franchise, not charging an entrance fee.

Clintons proposal was coupled with a video that pulls from stump speeches Clinton has delivered on campaign finance. The video makes the pitch personal, too, noting that the Citizen United case was started when corporate money made an anti-Clinton video during the 2008 election.