Secure Loan

Published by: Jennifer Quilter

A secure loan will offer you the lowest interest rates and most flexibility from your lender. Of course, these benefits don't come without an added risk from you.
When you borrow money you offer the lender some form of security, also called collateral. The most common type of collateral is your home. This is the only type most banks will take as second mortgages. When you use your home, or vehicle, as collateral you can go on using your property as normal, but sign a note stating that if you don't make the payments the lender can repossess the property and sell it to make up the rest of the money you owe.
If neither of these collateral options work for you there is also the option of using jewelry or other collectible items of value. Not all lenders will do this so you'll need to search around, but it shouldn't be too difficult. You will need to have the item appraised before applying. When you use this form of collateral the lender will typically hold the item in a safe until the secure loan has been repaid in full.
Interest rates are largely determined by the amount of risk the lender is taking. By offering collateral the lender has a way of obtaining their money one way or another, so you have lowered that risk. Of course you have also raised your risk because if you are unable to pay you will lose your property, but because of this risk you are able to enjoy the benefit of a lower interest rate and more flexible terms. If you have bad credit you'll find lenders much more willing to work with you, and if you need to extend the life of your loan they'll be much more willing to work with this.
If you are looking for the best treatment from lenders and need specific things from a lender, you'll have a much easier time doing that with a secure loan.

ref: sooperarticles.com/finance-articles/loans-articles/secure-loan-14025.html

The Four Road Blocks That Are Slowing Loan Modifications

Published by: Feldman Law Center

Hope and optimism emanating from the announcement of the Obama Administration's "Making Home Affordable" plan have been replaced by the cold reality that the program has gotten off to start deemed by industry watchers as "anemic". After almost four months since President Obama first announced the $75 billion mortgage rescue effort, the administration continues to tweak the program in an attempt to reach its originally stated objective of saving up to 5 million homeowners from foreclosure. Standing between the anemic start and lofty goals of the program are four roadblocks:

1) Overloaded loan modification processors – While the specifics of the plan were released in the first week of March, lenders couldn't start handling applications until systems were re-programmed and processors were brought up to speed, which took an additional four to six weeks. Processors were immediately buried with stacks of applications that had been accumulating during the conversion to the new guidelines. Participants in the process report that servicers are still digging out from the initial rush as applications continue to flood their desks. Troubled borrowers, many backed up against the possibility of foreclosure, have become increasingly frustrated to the point where they have abandoned the process to retain their own legal assistance. JP Morgan Chase spokesman Tom Kelly recently said of the ramp-up, "It's an enormous task. We're moving quickly, although not as quickly as an individual might wish."

2) Investors – The massive sums of money that supported the real estate/mortgage boom came from investors on Wall Street, pensions, and other institutions. Servicers say those investors are now balking at some of the terms being presented when a loan needs to be modified. The net present value test, a little known aspect of the plan, allows for a calculation to determine whether the greater return for investors will be achieved via modification or foreclosure. In the modification versus foreclosure decision, investors have been threatening lawsuits against servicers when the servicers are deemed to not be acting in the best interests of their investors. The threatened legal action adds another layer to the home loan modification process and can draw out the approval process even more. The "safe harbor" bill recently passed by Congress was intended to alleviate that logjam by protecting servicers from investor lawsuits but it's likely that lawsuits will arrive on the servicers doorsteps anyway, safe harbor or not.

3) Lenders – Lenders are caught in a three sided bind between the above mentioned borrowers/investors and their own capital structure. No longer required to mark their loans to market, they can carry the value of the loans in their own portfolios at values they can rationalize, whether factual or not. Loan modifications could generate reviews of portfolio values, and nobody wants to go there in the current environment.

4) Unemployment - According to John Taylor, head of the National Community Reinvestment Coalition, "Unemployment is becoming a bigger factor than almost anything." When sub-prime mortgages started blowing up it was attributed to the risks inherent in lending to lower quality borrowers. Increasing unemployment, in addition to taking down the lower quality borrowers, is now hitting prime mortgages. In fact, primes are now going into default at a much faster rate than sub-primes as previously solid borrowers are now being affected by the contracting economy.

Of the four roadblocks, the toughest barrier is unemployment due to the fact that, regardless of credit scores, if a homeowner doesn't have a job a loan modification isn't going to help. Short sales, cash for keys, or foreclosure become the next options. At that point every side of the three sided bind ends up on the losing end.

ref:  sooperarticles.com/finance-articles/mortgage-articles/four-road-blocks-slowing-loan-modifications-9472.html

Buying a car

For many of us, buying a car is probably one of the biggest purchases we will ever make. There are plenty to choose from, whether you’re buying new or second hand, and at a variety of prices. It’s a good idea to think things through, as there’s more than the initial cost to think about, such as car tax, insurance, servicing and repairs. Here are some useful tips to help you get started.

Can you afford it? >

Work out your budget to make sure you can afford the initial and ongoing costs.

How to pay >

There are lots of ways you can cover the cost of buying, some more expensive than others. Find out which method is right for you.

Initial costs >

It’s not just the cost of the car you have to think about. Don’t forget the road tax, MOT and insurance.

Other running costs >

You will also need to keep your car going, so remember to consider other regular costs such as fuel and maintenance.

Insurance >

As well as motor insurance to keep your car on the road, you may be offered, or you may want to consider taking out further insurance, for example Payment Protection Insurance (PPI) or breakdown cover.

ref: moneymadeclear.fsa.gov.uk/guides/everyday/buying_a_car.html