Archive for the ‘debt’ Category
admin on December 2nd, 2008
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A senior citizen couple in New Mexico recently faced foreclosure over a $2 debt. The elderly couple had obtained an SBA loan almost 30 years ago with a small and miscellaneous charge of $1 per year that had seemed to go unnoticed. However, the lender that had just come into ownership of the loan decided to foreclose on the home instead of forgive the small payment. The $2 debt was satisfied for $4, but not without the aid of attorneys and a full blown foreclosure proceeding. The lender was fully under their rights to foreclose on the property, although many critics of today’s banking system felt this was an unnecessary expenditure in time and administration by the lender. You can read the full story here.
admin on November 14th, 2008
In an effort to stave a off a further decline in the housing market, the government has announced a plan to prevent foreclosure for homeowners with mortgages guaranteed by Fannie Mae and Freddie Mac. The plan will provide some relief to a small fraction of the still growing number of distressed homeowners. The government hopes that similar programs will be adopted by financial institutions to head off further losses by the banks and the America homeowner.
The government’s mortgage rescue plan will adjust mortgages by lowering interest rates, extending amortization periods from 30 to 40 years and allowing balloon payments at the end of the loan term to defer loan principal. These efforts are being made to bring mortgage payments below 38 percent of the homeowners’ monthly gross income.
Some banks are testing similar programs that even extend to homeowners not in default. These rescue plans are being emphasized in highly depressed economic areas, like Michigan. Michigan has experienced a higher than national average of unemployment and coupled with the automotive industry woes could see an even more dramatic increase in home loss.
Many of the program’s critics think the plan to save homes will only delay the inevitable foreclosure of these saved homes. Secretary of Treasury Paulson’s announcement that the $700 billion bailout would not be used to buy troubled mortgage-backed securities, drove the stock market way down and projected an even bleaker future for the housing market. The government’s new mortgage plan could potentially aid hundred of thousands of struggling homeowners, breathe some life into an ailing housing market and eventually assist in turning the nation’s economy around.
admin on June 2nd, 2008
Understanding credit card terms can help you to be more aware of precisely what is stated in the fine print of your credit card application and contract. Here are some of the most important terms in the field of credit cards and what they mean for you.
Average Daily Balance: The Average Daily Balance is the average dollar amount that exists on the card at any given point in time. Over a period of time, usually thirty days or the number of days in a month, the total balance is added up and then divided by the total number of days. The Average Daily Balance is used by credit card companies in the Average Daily Balance Method to determine the amount of interest due on a credit card.
Annual Percentage Rate: The Annual Percentage Rate is the total amount of money that a person will pay each year in interest on the amount of money that they spend with the help of their credit card. It is important to be aware that you will not just have the pay interest in the form of the Annual Percentage Rate, but there will also likely be simple interest attached to your purchases as well. The lower APR you can secure with your credit card, the better. Credit Card companies are required by law to reveal to you the APR for their cards.
Cardholder Agreement: A Cardholder Agreement is probably the most important document that you will receive from the credit card companies with which you work. This agreement will cover all specifics of the agreement that applicable to your relationship with the credit card company including any legal options available to you if you have a problem with the company. All questions dealing with the terms and regulations of the agreement can be found in this document.
Cash Advance Fee: When you use your credit card in order to get cash up front, you will be charged a specific fee just for getting this cash. This is an up-front fee that needs to be paid by the card holder.
Finance Charge: Finance charges can take the shape and form of many different charges on your credit card bill. In general, a finance charge is any amount representing the cost of using or borrowing money, in this case through the use of a credit card. These fees can include interest and transaction fees, late fees, over the limit fees and more.
Grace Period: The Grace Period is the length of time between the due date of your payment and the date on which penalties will start to accrue, due to the lateness of the payment.
Minimum Payment: This is the very least amount of money that needs to be paid to the credit card company that you utilize. It is a fraction of your total balance due.
Periodic Rate: The Annual Percentage Rate (APR) is used in order to calculate your annual interest rate, but the periodic rate looks at the amount of money due in interest for each period. Usually, the period of a credit card is one month. You can determine your Periodic Rate by dividing your APR by the twelve months within a single year. If your APR is twenty-four percent, you would divide twenty-four by the twelve months in a year, and the Periodic Rate would be calculated as two percent.
Variable Interest Rate: Your variable interest rate will move up and down over time, based on the changes that may occur in the market.
Balance Transfer: Transferring your debt from one credit card to another is known as a balance transfer. The entirety of the amount due on your one credit card will be transferred to the other through this process.
admin on May 24th, 2008
Not being able to pay your mortgage is a serious problem. However, this does not mean that there are no options available to you. Here are five separate options that you can consider if you are in a position that makes you unable to pay your mortgage.
Repayment Plan
Sometimes, in order to get the money that they are owed, lending institutions will work with you in order to create a repayment plan. This is beneficial for you since you will be able to keep your home and it will be beneficial to the bank in that the lending institution will be able to recoup the money that they have invested in you and your home. This is a great option for individuals to consider since it can cause the least amount of stress and strain on your life.
Modification
If you are having problems with your mortgage and you do not foresee any end to the financial strain in your life, you can discuss the problem with your lending institution. They may be able to provide you with a mortgage modification. This modification has the ability to change the terms and regulations of your mortgage in order to make it possible for you to afford the payments of your mortgage and keep your residency.
Deed in Lieu of Foreclosure
To avoid foreclosure, you may be able to offer up the deed from your home to your lender. This would wipe out your debt without the stigma of foreclosure.
Short Sale
A short-sale is negotiated by the lender in order to sell your home for less than the amount of money that is owed on the home. While this would end your debt, it also would leave you with no equity for your next home. Nonetheless, it is a great option if you are really trying not to foreclose on your home.
Foreclosure
Lastly, if you cannot afford your mortgage, you may have no choice but to foreclose. When you apply for a loan on your house, you often provide the home as collateral for the lending institution. If you cannot afford your mortgage, you may need to give up your home in order to pay your debt to the lending institution, referred to as a foreclosure.
admin on May 22nd, 2008
If you have any credit cards or loans, you are known to collection agencies and financial institutions as a debtor. When you owe companies or individuals money, you are mandated to be treated fairly by the individuals or establishments to which you are indebted. Your debt is not decreased or limited in any way by the Fair Debt Collection Laws that are in place, but certain methods of debt collection are prohibited under the Laws. You do need to be treated fairly by those whose job it is to collect your debts. These collectors are known as debt collectors, and they make their living trying to recoup the money owned to their employers or companies.
A number of different debts are covered under the federal Fair Debt Collection Laws, as established in the United States of America. These debts include personal loans, family loans and general household debt. Automobile purchases, medical care and credit card accounts are some of the specific situations that are covered.
Debt collectors are limited in when and how they may contact you. These individuals may not contact you outside the hours of 8 am to 9 pm, unless you have given the debt collectors specific permission to do so. You may be contacted by phone, fax, mail or in person, but you may not be contacted at work if it is known that your employer would not approve of such contact. These collectors may not threaten you with violence, publication or any type of harassment. They are also prohibited from making any false statements, such as that they are employed by the government or that they are attorneys.
You can prohibit debt collectors from contacting you by sending them a letter telling them to stop, but this does not erase your debt and you may end up being sued by your original lender if you do not take care of the debt. Debt collectors may not continue to try to recoup the money if you have sent a letter to them advising them that you do not owe money and that perhaps the debt is an error. However, they can resume such collection practices if they find that you do, in fact, owe money.
If you feel that a debt collector who has contacted you has broken the law, you do have some resources available to you. You are able to sue the collector or the collection agency for damages, attorney fees and court costs. Complaints can be placed at FTC.GOV.
