Upside Down Mortgage

Archive for February, 2008

Predatory Lending Virginia

Regulation of lending institutions is handled primarily by individual states, and this growing industry exists atop an active and shifting legal landscape. Lenders lobby to enable payday lending practices, while opponents of the industry lobby to prohibit the high cost loans in the name of consumer protection.

Payday lending is legal and regulated in 37 states. In Georgia and 12 other states, it is either illegal or not feasible, given state law. When not explicitly banned, laws that prohibit payday lending are usually in the form of usury limits: hard interest rate caps calculated strictly by APR.

In the United States, most states have usury laws which forbid interest rates in excess of a certain APR. Some payday lenders have succeeded in getting around usury laws in some states by forming relationships with nationally-chartered banks based in a different state with no usury ceiling (such as South Dakota or Delaware). This practice has been referred to as "rate exportation", the "lender/servicer" model, or the "rent-a-bank" model. Under the legal doctrine of interest-rate exportation, established by Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp. 439 U.S. 299 (1978), the loan is governed by the laws of the state where the bank is chartered, regardless of the borrower's state of residence. This is the same doctrine that allows credit card issuers based in South Dakota and Delaware states that abolished their usury laws to offer credit cards nationwide. As federal banking regulators became aware of this practice, they began prohibiting these partnerships between commercial banks and payday lenders. The FDIC still allows its member banks to participate in payday lending, but it did issue guidelines in March 2005 that are meant to discourage long term debt cycles by transitioning to a longer term loan after six payday loan renewals. As a result, no federally insured banks engage in the business of payday lending as of 2007 using an agency model.

For usury laws to be effective, they need to include all loan fees as part of the interest. Otherwise, lenders can charge any amount they want as fees and still claim a low interest rate. State laws in the United States generally preclude charging of fees other than those expressly permitted by law, and the federal Truth In Lending Act requires disclosure of all fees. Payday loans, because of their simplified pricing structure, do not contain hidden fees or charges.

Some states have laws limiting the number of loans a borrower can take at a single time. This is currently being accomplished by single, statewide realtime databases. These systems are required in Florida, Michigan, Illinois, Indiana, North Dakota, New Mexico, Oklahoma, and Virginia. These systems require all licensed lenders to conduct a real time verification of the customer's eligibility to receive a loan before conducting a loan. Reports published by state regulators in these states indicate that this system enforces all of the provisions of the state's statutes. Some states also cap the number of loans per borrower per year (Virginia), or require that after a fixed number of loan renewals, the lender must offer a lower interest loan with a longer term, so that the borrower can eventually get out of the debt cycle. Borrowers can circumvent these laws by taking loans from more than one lender if there is not an enforcement mechanism in place by the state. Some states allow that a consumer can have more than one loan outstanding (Oklahoma).

Federal regulation

In the US, although payday lending is primarily regulated at the state level, the United States Congress passed a law in October 2006 becoming effective on Oct. 1, 2007 that caps lending to military personnel at 36% APR as defined by the Secretary of Defense. The Defense Department called payday lending practices "predatory", and military officers cited concerns that payday lending ruined low-paid enlisted men and women's finances, jeopardized their security clearances, and even interfered with deployment schedules to Iraq.

Some federal banking regulators and legislators seek to restrict or prohibit the loans not just for military personnel, but for all borrowers, because the high costs are viewed as a financial drain on the working and lower-middle class populations who are the primary borrowers.

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Article Source: ArticlesBase.com - Regulations For Payday Loans And Their Effect On Payday Lending

The Case for Brian Moran

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Subprime Auto Loan Rates

Subprime auto loans are easier to get than the normal auto loans. Most of the auto loan’s applications happen to belong to these only. It is the best option to arrange funds if you are suffering from bad credit.

According to FICO score if your credit score is below 620 then it is considered as poor credit score. You can ask for you credit score from Equifax, Trans union and Experian. It is safe to keep a copy of your report with you. Subprime auto loans are offered to the poor credit people. But there are many lenders who are dishonest so the borrowers must be careful to choose the lenders. There are lenders who ask for pre-payments, and then you must not borrow from them as there is no need for pre-payments in these loans. Forceful arbitration is also done by some lenders which is not right. Adding more than 1%-4% of the loan amount is the sign of predatory lenders.

Subprime auto loans have higher interest rate. The loan amount depends on the car and the rate of interest varies from lender to lender. The loan term depends on the car types like used car or new car. To avail these loans you should have poor credit status which is below 620. You should be in a position to repay the loan timely. Once the loans are repaid the borrower’s credit status goes up.

Subprime auto loans at cheaper rates are difficult to find. You can apply online and a little shop around can get you cheaper loan rates. After getting the loan rates you can apply for the loan online. These loans are approved fast and all the procedures are done online. Online calculators are there to help the borrowers with loan calculations. These calculators are available in almost every websites.

About the Author:

Kalvin Jason is proficient in the credit market because of a degree in finance from the esteemed University of Oxford. He has also done his masters in insurance management from the Risk Management Research Institute. To find quick car loans , best car loans, easy car loans visit http://www.driversamerica.com

Article Source: ArticlesBase.com - Accelerate Your Life With Subprime Auto Loans

Bad Credit Auto Loan

Loss Mitigation Title Services

There are many homeowners who are in danger of being foreclosed upon on their homes and the number of foreclosures is only going to continue to increase throughout the rest of 2008 and 2009. The reason why is because of two trends that are linked to one another that is going to simply compound the foreclosure problem.

The first trend is record number of homeowners due to relaxed lending requirements by sub prime lenders and low interest rates over the last five years. Many people who currently own a home either would not have qualified for a loan under traditional lending requirements or would not have qualified for a home at the price they got qualified under.

As a result of these loose lending requirements people who currently own a home are now realizing that they can no longer afford the home any longer. Perhaps they might have suffered a decrease of hours on their job. Maybe they may have lost their job and forced to take a low paying job. Others may have been counting on bonuses from their jobs and these bonuses have been cut back or eliminated due to performance by the company. Whatever the reason is, these homeowners can no longer afford their home.

The second trend is the economic financial recession that is taking place in the United States and other parts of the world. Although the US economy is not in a recession by the technical definition (Real Gross Domestic Product declines for 2 straight quarters), GDP numbers can be revised at a point in the future. Therefore most economists typically don't declare a technical recession until, in many cases, after a recession has already occurred.

All signs point to the fact that we are in an economic recession right now. According to a recent article in Newsweek magazine, "There has never, in the postwar U.S., been a 1 percentage point increase in unemployment without a recession having been declared, and much of that increase in unemployment occurs after the recession started..." Considering that we are closing in on a 2 percentage point increase, that's a clear sign that we are in a recession.

The foreclosure trend continues to drive higher as a result of the economic recession. When the economy slows down people lose jobs or have less money. Less money means they can't pay their bills and if one of those bills is a mortgage, foreclosure occurs.

The economic recession continues to drive higher as a result of the foreclosure trend. When foreclosures increase it causes a major hindrance on the economy. Foreclosures increase the supply available for real estate, putting price pressure on the values of real estate. This hurts home builders, real estate agents & brokers, mortgage professionals, title company owners, property managers and any type of professional who is tied to the real estate industry.

By starting a foreclosure prevention business you can help limit the amount of foreclosures that occur and continue to drag the economy. While certainly there are a large number of home buyers who got loans they probably should have never qualified for that distracts from the fact that there are many other home buyers who can afford their home and just need help in getting back on track.

How can you tell the difference between a homeowner who can't afford their home vs. a homeowner who experienced a temporary setback? Here are some examples and we'll also show you some solutions as to how you can help these homeowners as well.

One example of a homeowner who you can help is homeowners who have adjustable rate mortgages. These are people who had mortgages that they could afford previously. However, due to the mortgage adjusting to a higher rate, their mortgage is no longer affordable.

Through your foreclosure prevention business you can negotiate with the bank on the homeowners' behalf to do what is known as a loan modification. This is where the lender agrees to change the terms of the loan, usually either the interest rate or the length of the loan (i.e. 30 years to 40 years) to help the borrower be able to make mortgage payments.

What type of knowledge will you need to be able to provide this service for people? You will need to learn how to contact the bank on the client's behalf, get in touch with the loss mitigation department and negotiate with the bank on various options to help the homeowner become current on their mortgage payments.

You will also need to learn how to direct the homeowner to provide the necessary documentation and paperwork that will increase the chances of the bank accepting the loan modification.

The key to getting loan modifications accepted is to be able to clearly demonstrate to the bank that the situation that caused the borrower to fall behind is a temporary situation and a situation that is beyond the borrowers' control. For instance, if the borrower lost his or her job and it took 6 months to find another job, that's an example of a situation that can get a loan modification approved.

With a foreclosure prevention business you can earn anywhere from a couple of hundred dollars a deal all the way up to a couple of thousand dollars a deal. More importantly, this service can also position to acquire deals that you otherwise would not have came across if you only offered buying the property as a solution.

About the Author:

Mike Warren is a real estate investor who is an expert in the fields of pre-foreclosures, defaulted notes and judgments. Mike is the creator of a 3 day seminar that teaches how to benefit from
Orlando foreclosures
. This seminar is dedicated to teaching real estate investors how to create Multiple Income Streams with
Orlando foreclosures
.

Article Source: ArticlesBase.com - Benefit From Orlando Foreclosures in a Down Economy

Another Title Company Shut the Door on Double Closings