Archive for the ‘Home Loan Questions’ Category

Predatory Lending Illinois

Payday loans are a very controversial subject. There are movements all of the country to ban this popular financial service. Those who oppose payday lending believe it is nothing more than overpriced, predatory scam. Supporters of payday lending believe it provides a valuable service to families with few other choices. The popularity of payday loans speaks for itself. Unfortunately, so do the amounts of defaults and failures to make payment. Taking one loan out usually leaves the next paycheck so depleted that another one is needed to make ends meet, and another, and so on. Those who come to depend on payday lending often find themselves in this vicious cycle, which is difficult to break out of and results in thousands of dollars in loan fees. If you are currently feeling the strain of being trapped under payday loan debt, there are some things you can do to break this cycle.

1. Stop the cycle before it begins. Payday loans are expensive, and form cycles of debt that are hard to break out of. If you get a payday loan, you must exercise restraint. If you need $100 to make ends meet, resist the temptation to take out more money just because it is being offered to you. This will make the borrowing process much easier on future paychecks.

2. Stop cold turkey. If you are still at the point where you are not in too deep to payday lenders, stop borrowing from them, cold turkey. You may find you have a lean two weeks between paychecks, but a lot of families find they are able to make sacrifices to stop the cycle of payday lending. If you are able to survive on the money left over from your paycheck after all advances clear, do so! Cut corners wherever you can, and realize that things will return to normal after those two tough, financially burdened weeks.

3. If you can't stop cold turkey, try taking out gradually less until you break even. This means if you take out a $500 loan this paycheck, next paycheck make yourself mange with $400. Then next paycheck, borrow $300. You can step down more or less, but the faster you get off of payday loans, the more money you will save. This method often fails because it keeps people in the payday loan cycle, and makes the temptation great to borrow more.

4. If you are completely overwhelmed with payday loan debt, try taking out a consolidation loan from a bank or credit union. This will allow you to pay off your payday loan debt, and make reasonable monthly payments. This requires good credit, collateral or a credit-worthy cosigner.

5. Try negotiating a monthly payment plan that would stop payday lenders from taking the entire overdue amount out of your next paycheck. Alabama, Alaska, Florida, Illinois, Michigan, Nevada, Oklahoma and Washington require by law that payday lenders allow you to make smaller, more reasonable monthly payments if you request them. Some lenders in other states will make similar arrangements.

6. Consult with a payday loan consumer support agency. These agencies exist to educate people about their payday loan options, and can often help you find a solution to your debt situation. They are armed with legal expertise about the lending laws in your areas. One such agency is the Center for Payday Loan Consumer Information.

7. If all other options are exhausted, honesty is your best policy. Be upfront with your lenders and explain your situation to them. They may be able to offer you solutions to help you pay off your debts. Talk with lending institutions in your area to see if they offer support for people trying to overcome payday loan debt. The absolute worst thing you could do is to switch banks and allow the lenders to overdraw your account. They will still come after you for their money, and you will have a hefty amount of bank fees added in. On top of that, you may be unable to open a new bank account in the future.

Whatever you do, don't give up hope, and don't run away from your debts. Facing payday lenders head-on, armed with knowledge about your options, is the best way to make the borrowing cycle a thing of the past.

About the Author:

Brunotan has a wide experience within wellness, fitness and diets. His hobbies are running on his
tredemølle
, relaxing in his
massasjestol
and evaluating
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.

Article Source: ArticlesBase.com - Tips For Getting Out of Payday or Cash Advance Loan Debt

Change that Works for You: Chicago, IL

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Predatory Lending Florida

Illinois foreclosure listings represent the fourth highest in the country.

California is at the top of the list with 32,500 followed by Florida with

approximately 27,000 listings and Colorado at roughly 11,000 filings.

Combined with Illinois, these four states account for 52% of all homes in

foreclosure nationwide.

The staggering foreclosure rates in Illinois prompted Governor Rod

Blagojevich to file amendments to HB 4050, the Illinois Predatory Lending

Database Program. HB4050 protects consumers fight predatory lending

practices by shifting focus on the lenders who offer non-traditional types of

loans.

Under the proposed rules for HB 4050, Cook County first time homebuyers

and owners opting to refinance their primary residence will be

recommended for financial counseling if the loan they are considering

contains any of the following provisions:

? Permits interest-only payments;

? Allows payments that results in negative amortization;

? Total points and fees payable by the borrower exceed 5% of the

amount of the mortgage;

? Approval of the loan relies on the stated income of the borrower;

? A pre-payment penalty is included; or

? The financing transaction includes a second lien on the property,

often known as an 80/20 loan.

HB 4050 main purpose is to alert consumers that subprime lending

practices can lead to financial ruin. Todays housing market focuses so

much on the credit history of the homebuyer, and with some homebuyers

who have had past credit issues, spotty employment or not enough funds

for a down payment --- some lenders have gone to great lengths to get

their business. However, this practice is costing the same homebuyer way

more than they can afford ¨C without them even realizing it. By enacting HB

4050, these same homebuyers will be instructed and informed regarding

the types of loans available, the type of loan they are considering and

what it means to their financial future. Many of these items are not

currently provided by the lenders who practice subprime loan lending.

Luckily, Governor Blagojevich has an eye on his Illinois homebuyers and the

lenders who serve the Illinois residents. Currently, HB 4050 is in the pilot

program phase and is being piloted in Cook County. Illinois residents

outside of Cook County should expect to see it offered to them also in the

near future. The governors¡¯ mission is to see the Illinois foreclosure listings

numbers drop and this is a great start to realizing that mission.

About the Author:

Bob Smith is a freelancer but regularly writes for ForeclosureListingsNationWide.com. You can get more information on Illinois foreclosure listings at http://www.foreclosurelistingsnationwide.com.

Source - Illinois Foreclosure Listing Tops 11,000 Addresses, Governor Steps In!

Foreclosure Lawyer - StopForeclosureLawyer.com

Predatory Lending Consumer Protection Act

On July 30, 2008 United States President George W. Bush signed into law the Housing Stimulus Bill H.R. 3221, now dubbed the “Housing and Economic Recovery Act of 2008”. This historic bill was previously passed in the House of Representatives by a vote of 272-152 and in the Senate by a vote of 72-13. As with most bills signed into law, this act is comprised of a multitude of compromises on a variety of housing and financial issues that have recently plagued the nation’s economy. Therefore, in order to contemplate the lasting impact that this legislation will have on the nation’s economy one must first examine each of its key components individually.

First, the Government Sponsored Enterprises (GSEs) known as Fannie Mae and Freddie Mac, which purchase and insure loans originated by lending institutions, have been subjected to a new federal regulator that was created to ensure the stability of these entities and the integrity of the loans they purchase. Further, the U.S. Treasury Department was authorized to make loans to and buy stock from the GSEs to ensure they do not fail. The limits on conforming loans, which are loans that can be purchased on the secondary loan market by GSEs and offer lower interest rates than jumbo loans, have been permanently set at the greater of $417,000 or 115% of the local area median home price – capped at a maximum loan amount of $625,500. A national affordable housing trust fund was also created to hold a percentage of the GSEs’ profits in order to cover the costs of defaulted loans and to ultimately be used to fund affordable
housing developments
across the country.

The recently increased limits on Federal Housing Administration (FHA) loans, which have low down payment requirements and attractive interest rates, have also been made permanent at the greater of $271,050 or 115% of the local area median home price. Conversely, the down payment requirement for FHA loans has been increased from 3% to 3.5% of the home price in an attempt to help guard against FHA loan defaults. In addition, down payment assistance for FHA loans will no longer be permitted by any person that has a financial interest in the sale of a home. In other words, home sellers will not be permitted to assist buyers with down payment funds.

A refinance program has also been developed to assist qualified homeowners with sub-prime loans. Lenders write down these mortgages to 85% of the current appraised value and borrowers will receive a new FHA 30 year loan for 90% of the appraised value. However, borrowers would then have to share 50% of all future appreciation of their homes’ value with FHA, which is intended to offset the write downs that FHA will absorb on behalf of the lenders that held the sub-prime mortgages.

In an attempt to curb predatory lending practices, a nationwide mortgage originator licensing and registration system will be created to strengthen the state regulated systems currently in place. Increased minimum licensing and education requirements will be required of all lenders, mortgage brokers and other loan originators in an attempt to prevent fraud and protect consumers.

Qualified first-time homebuyers will also receive a tax credit of 10% of a home’s purchase price up to a maximum amount of $7,500 for homes purchased between April 8, 2008 and June 30, 2009. This credit will reduce the home purchaser’s tax liability for the year of purchase, and acts like an interest-free loan as homeowners will have to repay the credited amount in installments over 15 years.

The Community Development Block Grant program has also been allotted $4 billion in neighborhood revitalization funds for local communities to purchase and refurbish foreclosed homes.

Congress’ efforts to craft a piece of balanced legislation are clearly visible as most provisions of the
Housing and Economic Recovery Act
show the give and take required for our two major political parties to sign a bill of this magnitude into law. Conservatives can be comforted that any components that resemble a government bail-out are countered by more stringent lending regulations or the recapture of government funds over time. Liberals will be assured that many of those currently struggling financially will be provided an opportunity for assistance. Only time will tell as to whether this historic act has the requisite strength to achieve its legislative intent, but in the meantime we can take solace in the fact that our democratic form of government still can work as it was initially intended.

About the Author:

Brian S. Icenhower, Esq., BS, JD, CRB, CRS, ABR, a California Association of Realtors Director, practicing real estate attorney, a real estate expert witness and litigation consultant, a prosecution consultant of Tulare County District Attorney Real Estate Fraud. He may be contacted at [email protected], or www.icenhowerrealestate.com

Article Source: ArticlesBase.com - The U.s. Housing and Economic Recovery Act

Rep.Langevin On Mortgage Reform