In the mid 1990’s, the mortgage industry saw the credit score and its predictive power to assess a borrower’s ability to repay a mortgage step into the limelight as one of the most indicative factors for loan approval. After conducting statistical test after statistical test, Fannie, Freddie and Ginnie, the 3 big lending institutions, mandated that the credit score should be used in conjunction with manual underwriting to assess loan approval. Not too long after, automated underwriting systems (AUS) were developed that expedited and streamlined the underwriting process even further for lenders. A loan officer today simply inputs a borrower’s key information into the preferred underwriting automatic engine, such as his/her credit score, income, amount being borrowed, cash reserves, employment and housing history, and the value of the property. A response is returned by the underwriting engine recommending approval or denial for the loan.
If your loan receives a denial from an AUS, the buck doesn’t necessarily stop there. Life happens to people, and oftentimes it’s going to take a real live person understanding the nuances of a file to make an underwriting decision. That’s when your lender may suggest submitting your file to underwriting for a manual review. After all, not everything in life can be automatic, right?
A perfect scenario for a manually underwritten file would be someone who has no credit scores. No credit scores? Yes, it is possible. I’ve had customers who, being old school and always having paid for everything in cash, had never established traditional credit lines that reported to credit reporting bureaus. In a case such as this one, I had to submit non-traditional lines of credit to underwriting, something a machine can’t assess. This means I had my customer bring in bills he had paid on time for the past year to create a credit history. Typical ones used are car insurance, utility bills, cell phone bills and cable bills. You can expect to have to provide 3-4 different trade lines if you haven’t established a traditional credit history and score.
“The most typical reason we see a file submitted to us for manual underwriting is for either no credit score or an error reported on a credit report,” reflects Patricia Haynes, onsite Government Underwriter at Mortgage Investors Group. “For instance a judgement that doesn’t really belong to the borrower. Maybe it’s really Dad’s judgement reflected on the son’s report because Junior and Dad have the same name. That’s when I can overwrite an AUS decision because I have the documentation to support my decision to do so in front of me.”
Another very common reason to submit a loan for a manual underwrite is when your customer’s credit score is below 620 and gets an AUS denial. If this is the case with your loan, be prepared to provide more than average documentation about your credit history, as well as written explanations as to why your credit score has suffered recently. Maybe two years ago you had a financial meltdown due to a medical illness, but in the last twelve months, you can prove you are back on your game and have been repaying debt. However, your credit scores haven’t exactly caught up with your actions. An underwriter is going to piece together the different aspects of your file and see if it makes sense. Your home lender should be able to review your file and guide you as to what documentation an underwriter will want from you to grant you loan approval.
Naturally, if your credit score is really low and you have very little explanation for your state of credit affairs other than you failed to pay your bills on time, don’t hold your breath for loan approval. An underwriter can see through smoke and mirrors. After looking at files as long as they have, they can basically sniff out a loan that has merit from the ones that are too risky.
So, even as our world gets more and more automated every day, it’s nice to know that you can’t replace genuine common sense, even in the mortgage industry. And it’s nice to know that you can plead your case for credit worthiness to a real live human being.

Everyday we read about the worldwide financial crisis and, specifically, about the U.S. banking and housing crisis.  To understand the challenges facing borrowers during the Housing crisis, it is critical to understand adjustable rate mortgages – how they work and how they can impact you. 

ARMs offer both advantages and disadvantages. Unlike a fixed-rate mortgage, an ARM provides interest rates that change periodically – and payments that go up or down accordingly.  At first, lenders generally charge lower interest rates for ARMs and this makes an ARM easier to afford initially.  If interest rates remain steady or move lower, this can work to your long term advantage. It is important, however, to weigh the risk that if interest rates increase in the future, so will your monthly payments. 

The initial rate and payment on an ARM will remain in effect for a limited period–ranging from several months to 5 years or more. After this initial period, the interest rate and monthly payment may change at regular intervals – every month, every year, every 3 years.   This period between rate changes is called the adjustment period.

The interest rate on an ARM is determined by two things: the index and the margin. The index is usually a standard measure of interest rates and the margin is an extra amount that the lender adds. If the index rate goes up, so does your interest rate and monthly payment.  On the other hand, if the index rate goes down, your monthly payment may go down. Not all ARMs adjust downward, however so be sure to read the details about any loan you are considering. 

Lenders base ARM rates on a variety of indexes. You should ask what index will be used for your ARM, how it has fluctuated in the past, and where it is published.  

The margin may differ from one lender to another, but it is usually constant over the life of the loan. The fully indexed rate is equal to the margin plus the index. For example, if the lender uses an index that is currently 4% and adds a 3% margin, the fully indexed rate would be 7%.

Some lenders base the amount of the margin on your credit record – the better your credit, the lower the margin. In comparing ARMs, look at both the index and margin for each program.

An interest-rate cap places a limit on the amount your interest rate can increase. Interest caps come in two forms: A periodic adjustment cap, which limits the amount the interest rate can be adjusted up or down from one adjustment period to the next, and a lifetime cap, which limits the interest-rate increase over the life of the loan.  By law, virtually all ARMs must have a lifetime cap.

In addition to interest-rate caps, many ARMs limit, or cap, the amount your monthly payment may increase at each adjustment.  A payment cap can limit the increase to your monthly payments but also can add to the amount you owe on the loan. This is called negative amortization.

If you are considering an ARM, ask yourself: 

 

Golden Rule:  Before you consider any loan, ask questions and read the details. For information and news please visit Loan Modification Help Center

I’m in my 20’s, working hard and my girlfriend and I am thinking of buying a house. Being one of those “creative types”, I have limited knowledge of what exactly is involved in buying a house. Firstly, I want to know, what I have to do to qualify for a home loan / bond. Secondly, I want to know how big a bond I can get. Thirdly, I want to know whether my boyfriend and I can buy a house together, thus apply for a bond together.I set out to do some research before going out to look for our dream house. Starting at my number one question, “What do I have to do to qualify for a home loan / bond?” I started searching the Internet for more information. I discovered that there are certain criteria that one has to meet in order to qualify for a bond. Firstly, I discovered that you have to be at least 21 years of age before you will even be considered for a home loan. You have to earn a minimum salary of between R8000 to R10 000- that’s as a single income, or as a joint income of you and your partner. You must take into consideration that your credit history will be checked- any negatives on you credit history will count against you when you apply for a home loan / bond! Further more, you need to have a permanent job, where you have worked for at least 6 months, or in the case where you are self-employed you need to have been at it for a minimum of two years.The above mentioned are the basic requirements in order to qualify for a home loan. Secondly, I was interested to know how big a home loan I could get. As soon as I knew how much, I could start searching for a house. According to numerous reputable websites online, it seems that the size bond I could qualify for is roundabout 25 -30% of my salary (or you and your partners joint salary). The bigger your salary, the bigger the bond you will qualify for and the bigger house, or rather more pricy house you can buy.Thirdly, I was interested in finding out whether or not my boyfriend and I could apply for a home loan together. This means that even though we are not married, I wanted to know if we could still buy a house together and how this will influence us in the long run. I wanted to know whether “partner” or “couple” means married or not.According to my bank manager, my boyfriend and I can apply for a bond together, but there are certain things we must take into consideration when we do. It is best to register the house in both our names just incase our relationship ends somewhere in the future. According to Bonny Feldman (First National Bank’s Media Liaison), ‘common law’ relationships are not recognised by South African law. This means that if a relationship ends and the house/property is only registered in one of our names, the other will lose out. She further states that “because you’re not seen as husband and wife, the one in whose name the property is registered in is entitled to the full property, even if the other partner contributed significant amounts to settle the bond, for instance. The unlucky partner could try to recover some of this money, but that would involve a legal case, and you’d have to have records of everything spent over the years – and that’s not very practical!”. Taking the above into consideration, I’ve realised that buying a house together is not a small step in ones relationship. There are a lot of things to consider and you will have to work with knowledgeable people who will help you make sure you don’t step into any flames later on.While doing my investigating I came across quite a few websites, which apply for your home loan or bond- making everything easier in the sense that they do all the hard work for you. They call themselves “independent bond origination” companies and all they need from you are certain documents. Their specialised home loan consultants will contact you and help you through the process step by step. I think this sounds like a definite option to consider as we are first time buyers and still need some form of guidance. Who knows, this home loan / bond thing might still be easier than I expected!

More info at http://loan-news.info

If you’ve ever been a plaintiff in a lawsuit or been involved with a plaintiff in a pending lawsuit then you’ve probably came across the term lawsuit loan or settlement loan at one time or another. A lawsuit settlement loan is a method for a plaintiff involved in a lawsuit to get access to funds prior to a settlement or verdict in their pending lawsuit. The funds can be used for whatever purpose the plaintiff needs it for, including medical bills, legal bills, and mortgage\car payments or even to purchase a new home or automobile.

 One of the most favorable aspects of a lawsuit settlement loan to plaintiffs is the fact that lawsuit loans are considered non-recourse debts, and not actual loans. The phrase “settlement loan” or “lawsuit loan” is just static in the industry, when in fact they are really non-recourse debts. The reason they are considering non-recourse debts and not actual loans is the pay back agreement they are based upon. A settlement or lawsuit loan is not required to be paid back if the lawsuit reaches a verdict in favor of the defendant. However, if the plaintiff gets the favorable verdict and receives monetary awards the plaintiff is liable for repayment on the loaned amount, interest and any fees.

 Another aspect that is enticing to a plaintiff is the approval process of lawsuit settlement loans. Since lawsuit settlement loans are non-recourse debts the approval process is based on the merit of the physical lawsuit itself. A plaintiff’s credit history, employment history and income status play no role in the approval process; again this is due to the fact that the only way a lawsuit settlement loan provider gets payment back is if the lawsuit reaches a verdict in favor of the plaintiff. Since legal agreements signed by the settlement loan provider, attorney and the plaintiff secure how awards are distributed there is no need for the plaintiff to actually pay back the loan; the portion owed to the provider is directly paid to them via your attorney or settlement payout provider.

 There are some side effects to lawsuit loans, they tend to have interests rates that higher than the normal average interest rate at any given time. This is understandable due to the nature of how these companies receive payment back from the plaintiff. There are usually one-time fees included with lawsuit settlement loans and are usually based on the amount of money being loaned to the plaintiff. Beyond those two facts lawsuit settlement loans are a great way for plaintiffs to secure funding during their pending lawsuit. If you’d like to learn more about settlement loans please follow the below information.

The news about the housing market has ‘not been good’ for some time now. It seems that we are bombarded on a daily basis with fresh headlines by Caty Couric or Charles Gibson about the latest woes to befall sub-prime mortgage home-owners. The sheer plethora of news on the subject is getting so depressing that I think it could actually be adding to the overall mental state of the nation, almost willing us into a recession.

The facts are undeniable. Foreclosures are up to 7.6% from 7.3% of loans past due or in foreclosure. The biggest rise in these numbers relate to what are called sub-prime mortgages. These are mortgages that were sold to lower income families where the original starting payments were set at a reduced rate. When interest rates rose, the borrowers of this type of mortgage were caught out. Instead of having to make a payment that they had been quoted when the mortgage was sold to them, they faced much higher payments in line with the higher interest rate prevailing at the time.

Now its easy to say that this is their own fault and that they should have been more careful when entering into the loan and that the duty of care is on the borrower to ask about the risks involved and the potential downside that a rise in interest rates would cause. The worrying thing is though, that many of these loans were sold to people who were novices in owning their own home and such complicated financial instruments. They came from low income households and were ‘blinded’ by a dream that most of us take for granted.

I am not the only one who thinks so. The Attorney General in Illinois is already investigating Countrywide Financial Corp for its potentially illegal targeting of minority groups for the purchase of high cost loans. This is just one of many State and Federal investigations underway.

Countrywide is also under scrutiny as its CEO Angelo R Mozilo is now being investigated for possible illegal securities transaction in which he cashed nearly $120 million dollars worth of stock shortly before his company announced bad loans of $422 million in the fourth quarter of 2007. Countrywide who are currently being taken over by Bank of America has also been named by the F.B.I. today,(9th March 2008), as one of fourteen lenders being investigated for lending practices.

As with most investment stories, when people are losing money, there is usually someone making it. It emerged in recent days that Warren Buffet may be about to step in to take a stake in Countrywide. Mr Buffet, who recently topped the world list of the richest men on the planet, knocking off Bill Gates after thirteen years, has been sitting on a cash-pile of some $50 billion dollars for some time now. His investment company, Berkshire Hathaway has reported taking a stake in Bank of America recently and rumours abound that he is looking to get involved once again in the financial & mortgage securities markets. As usual, Mr Buffet, your timing is impeccable!

Even ‘The Donald’ could be seen recently on National TV bestowing the virtues of property investment. I have to agree with Mr Trump that those who have the ability to invest in property in a depressed market are possibly the people who will profit the most. For the average man in the street though, I think the message is clear. When taking out a home loan or refinance package, get some professional advice. Check the small print and know the downside before signing the agreement.

Become a Loan Consolidation Student, if you’re about to graduate you may want to start thinking about becoming a Loan Consolidation Student early that way are ahead of the game. Every Loan Consolidation Studenthas a six month grace period after graduation before payments begin, but the consolidation loan application process can take several weeks, especially if you haven’t gathered all your loan information and decided on a lender. It can take many weeks to get through the loan process, however when it comes to repaying your loan the lender gives you six months after you graduate to start pay back your student loan consolidation. Inventory your student loans. Document all your loans, including type of loan, lender, the amount of your loans, interest rates and the amount of your payments. Analyze your loan documents, contact your lenders or loan servicers or go to the National Student Loan Data System (NSLDS) website. Hopefully you never lose your pin number but if you do, you can ask for a new one and they send it to you. Expect to wait a week or two for the PIN to arrive, so best to get it done early.

Add up If you are already in a repayment status, you will know your exact monthly payments. However, if you are still in school or in your grace period, you should estimate your monthly non-consolidated loan payment based on the current interest rates and your loan balance. If you’re still going to school or still in your grace period, you can estimate your non-consolidated loan payment using the balance and interest of your loan. Your lender can also provide you with the details of finding the approximate amount of your monthly repayment. What’s a Budget? Sounds like a crazy question, but you’d be surprised at the amount of people who never use one, and it’s such a great benefit, loan consolidation students, knowing if a Student Consolidation Loans will help you. Once you have a source of income, set aside funds to use for repayment of your loan. This amount should be based on a realistic budget. Then see if the estimated loan payment amounts you calculated above will fit into our budget.

Sometimes you’ll find that your budget isn’t working out as planned, if that becomes the case just go over it again until it makes good financial sense. What ways can you adjust your finances? Weather its more money in or less money out. If it’s a short term issue (expected raise in pay, getting a part time job, etc.), consider your deferment or forbearance options. Select loans for consolidation. Determine which of your loans are eligible for federal consolidation. A number of loan consolidation student loans can be consolidated in addition to Stafford and Private student loans are not eligible to be consolidated through the Federal consolidation programs. You might lose some discharge or cancellation benefits or deferment benefits if you include certain types of loans in your loan consolidation student loan like Federal Perkins Loans, for example. You can contact the lenders of your loans to find out what the impact of your loan consolidation student will be on your current benefits. If you want to consolidate your loans try going through the Federal Direct Loan Consolidation Program. You can get the application online.

If you have graduated, but are still in the grace period, begin the consolidation process approximately two months before the end of the grace period. This will allocate enough time to have your loan consolidation student loan processed before the grace period expires, yet not so early that you lose too much of your grace period if you have a FFEL consolidation loan. (If you consolidate FFEL loans during the grace period, you will give up whatever portion of your grace period remains. You get to keep all of your grace period, even if you get a Direct Consolidation Loan.) Some FFEL lenders offer to hold off on disbursement of consolidation loans until the end of the grace period to give borrowers opportunity to minimize their interest rate and maximize their grace period. Check with your lender to be certain. Keep in mind that if you consolidate during your grace period, you can lock in an interest rate at least a half percent lower than the current repayment rate. Most banks will grant you a discounted rate if you agree to sign up for auto- pay and make a certain number of consecutive on time payments, about 36 of them. When filling out the consolidation application, make sure you provide all your complete and correct addressand personal information, you may be asked to include two references, and sign the promissory note. Overlook any of these and you will delay the processing of your application. If you are already in repayment, continue making payments on your loans until consolidation is the completed application. If you need immediate payment relief you can always ask the lender for a deferment or forbearance until you are able to start repayment or until your deferment time is up.

By: Vernosha Anderson

To consolidate student loans debt can be the most important and responsible decision that you as a student can very well undertake in your life. If you have not done any college loan consolidation, you might ask – why is that? Is it an inevitable thing that I have to go through in my college life? What beneficial effects does it actually have in my finances? Is it more like another one of those student loans that I have already taken in the past?

If you are poised to consolidate student loans, then you are almost assured of a much easier financial position, far better than what you are now experiencing with all the federal and private debts that you already have.

Definitely with the pile-up of multiple debts under your name – there is no other way to do right but consolidate all them. You might ask – another loan again? I don’t think I need one more to further aggravate my financial miseries.

Think again. College loan consolidation is not just any other type of loans. Instead it is a special program intended to help out students who in dire need of help from all the financial burden that they carry because of their unmanageable loans.

What actually happens when you consolidate student loans?

Great things happen, as far as the financial aspect of your life is concerned.  First of all, it lowers your monthly payment. In fact, it transforms all you monthly dues into a single payment because now of the new loan that you now have in place of the multiple loans. In effect, you are given a much lighter repayment responsibility because if this one monthly payment.

So now that you do not have to spend all your money on multiple payments, you now have more cold cash on your hands, ready for dispensing on any expense or purpose that you might have. If you are one who loves to save, then save it for future important use.

I believe that one of the most important benefits when you consolidate student loans is the positive effect that it has on credit ratings. Remember, with consolidation, your new lending company basically pays of your multiple loans –wholly. This means a lot when it comes to trying to improve on your credit ratings. Another thing, since you consolidate student loans with a single lender, this is a plus factor in the improvement of your credit standing.

If you are greatly interested in more relevant college loan consolidation articles and discussions, do visit our http://easycollegeloanconsolidation.com/ blog.

You’ve heard of the term school loans consolidation. But, do you know what it means? If you have been worrying about how to be able to pay your student loans with the high interest rate and a short time to pay, then you should consider consolidating your school loans.

If you’re interested, then read on. This article will give you some information about school loans consolidation, what it can do for you, and where and how you can apply for one.

Student Loan Consolidation

What can it do for you?

Here are some advantages of loans consolidation. After graduation, consolidation loans can really help ease the burden of repayment. It does this by bundling all your student loans into one, single loan with one lender and with one repayment plan. Both the students and parents are eligible to apply for student loans consolidation.

That’s not all. With student loan consolidation, you could cut your student loan payments in as much as 50%. That means saving thousands of dollars on the life of your loan. You can lock in a low monthly payment with a fixed interest rate for the life of your loan, and you would never have to worry about application fees, origination fees, credit checks, income verifications, or prepayment penalties. This will really help reduce your monthly payments.

Another great thing about it is that when you consolidate your loans, you not only get a lower interest rate, you can also extend the time to repay for up to 20 more years. This is to help you be able to settle all your accounts easily. Just think: lower interest rates and a longer time to repay.

Federal Student Loan Holders

When you have a federal loan like PLUS and Stafford you are qualified to avail of Federal Consolidation Loan program so that you will still be able to lower your monthly payments for as much as 60%.

Private Consolidation Loan

Private loans is another thing. If you have already consolidated your federal loans, or you have private student loans to repay, don’t worry. You can still refinance all your student loans, including private loans, at low rates that can save you money. This is through the Private Consolidation Loan.

Where and How You Can Apply for One

Applying for student loans consolidation couldn’t get any simpler. Now, you can go online and complete the whole application process in just a matter of minutes. All you have to do is fill up some forms. Make sure that when asked for a contact number, you give one that is working and where you can easily be reached. This is because in some companies, customer service representatives will contact you within 15 minutes of submitting the application forms. Just check with the company you choose regarding the requirements. There are some that will require you to have a co-signer, and there are some who don’t. Those who do will give you an incentive, like getting even lower interest rates if you have a co-signer with good credit background. Also, you can terminate your co-signer after making on-time payments for a specified time. It really depends on the company you choose, so put some thought into this and choose wisely.

More and more students are taking to school loans consolidation as the solution to paying off their debts. This is really a good way to aide you in repayment of your school loans.

Federal loan consolidation is all about providing loans to students in need of finance. These student debt consolidation loans come as a fresh lease of life to students who are already reeling under the impact of student loans taken earlier. These loans have a longer repayment date and are provided at a much lower rate of interest. You can take advantage of these loans in many ways. Students with bad credit or no credit can apply for federal loan consolidation. Your application does not go through a credit card check. You do not have to give any guarantee of income. Best of all, you do not have to pay any fees.

The Benefits Of Federal Loan Consolidation

The greatest advantage of federal loan consolidation is that it has the guarantee of the government. Private student loan consolidation companies try to entice borrowers by offering loans at a reduced rate of interest. Usually, the students get a package, in which they get a reduction in interest rates, a longer duration of payment and a lower monthly installment. During the term of the loan even if you miss an installment due to a financial crunch, you do not have to lose sleep over it as you can always apply for extension. You can also offer a date on which it will be possible for you to pay. Because of the ensuing benefits, federal loans are extremely helpful for student debt consolidation.

When you opt for federal loan consolidation, you should tread very carefully and choose your lender very carefully. You get only one chance to take a federal loan. Make sure that the lender is at a reachable distance and one with whom you can interact freely. Also, see that the lender gives you proper respect and consideration. A federal program helps you to save thousands of dollars in terms of interest. Besides, you have a longer tenure and lower fixed installment to pay. However, this program may be available for only a short term, so do not lose time and apply for a federal loan consolidation immediately.

Some More Benefits

Moreover, this is not all; students who pay on time get rewards and incentives from the government. You also improve your credit-rating if you a pay on time. With a federal loan consolidation program, you can save up to 60%on your monthly payment besides getting tenure as long as 30 years if the amount of loan is bigger than $10000. For all purposes, student loan consolidation companies are more than eager to provide loans under a federal loan consolidation program. This is a new loan for the student and he no longer needs to worry about the previous loan installments.

Federal loans are available for a big section of student loans and other loans. HPSL, NSL, FISL, ALAS, SLS, NDSL, HEAL, PLUS and LDS. The US government supports federal loans consolidation under certain conditions. You should try to repay your loan according to the terms and conditions; otherwise, the government pays the lending companies, and extracts the same from the borrower, which can be very inconvenient for the borrower.