Foreclosure Crisis - Learn what Lenders don't want you to know

Foreclosure Crisis - Learn what Lenders don't want you to know
Did you know most of the foreclosures taking place now
could have been avoided? With all the foreclosures taking
place because of adjustable rate mortgages (ARM's), this
could have been avoided if the lender had put families in a
30yr fixed mortgage. During the real estate boom,
individuals that had less than perfect credit were put into
sub-prime loans. There were millions of families put into
sub-prime loans that had the qualifications to go FHA,
which is a 30 yr fixed mortgage. The reason why was because
there were many mortgage companies that did not have the
necessary funds to get their license to originate FHA
loans. So the mortgage company had no choice but to stick
their client into a sub-prime ARM loan. Was this unethical,
I would have to say yes. Also the mortgage companies that
were sticking people in 2 year Sub prime loans sold
everyone on 2 yr ARMs when they could have put them in a
30yr fixed sub-prime loan. Here is what took place.

2 year ARM sales pitch. Here is what mortgage companies
sold to potential borrowers. Sir or Mam you don't have the
credit to go with a prime conventional loan but we can put
you into a 2 yr ARM. With good credit history we can
refinance you in 2 years into a 30 year fixed mortgage.
This is what was being told all over the United States.
Guess what? These people could have been put into a 30 year
fixed sub prime mortgage as well. But the rate was lower on
a 2 year ARM, and the lender made more money selling the
ARM loan. Also the lender would get there business again
two years down the road. So it was like machine during the
real estate boom. This is the secret that lenders did not
want you to know, and most of them never gave the option to
the potential borrower.

The builder problem During this boom the builders were
doing more than selling 2 year ARMs, they were selling low
payments. They would sell all these bogus incentives to use
their mortgage company and along with the bad loan they
were put into they sold them on low payments because of the
un-improved taxes on the property. Yes there was this
sneaky disclosure used to explain un-improved property
taxes at closing, but they blew through it so quick the
borrower never really understood it. Also the loan officer
providing the loan never explained the repercussions of not
collecting escrows for the mortgage. Most of the 2 year
sub-prime borrowers with builders did not escrow their
taxes and insurances. That is the other way they were sold
on this whole process. During the excitement of this whole
process, the borrower did not see the danger down the road.
To talk a little about un-improved property taxes, here is
how that nightmare works. When you buy a property, the
taxes on the property if it's a new build is usually based
on the land only. That is why the taxes and along with you
payment is so low. But guess what, you will have an escrow
shortage in about a year. Which means your payment will go
up around $300 to $400 dollars. This is part of the reason
for the foreclosures as well. Builders pretty much do what
ever they want due to a lack of good legislation.

2 year ARM is up Your 2 year ARM is up, and you now have
two problems. First you cannot refinance because you don't
have the credit. Second your property value has declined
and you don't have the equity to roll in closing costs
which is required to do a refinance, unless you have the
money to pay all your closing costs. Since you cannot
refinance your payment jumps up around $400 dollars and now
you cannot afford your home. This is what is going on all
over the country.

This is a example of how greed is going to destroy our
country. It's unfortunate that our lending industry took
advantage of people. This is going to affect us for a
while. If you found yourself in this situation, the best
thing you can do is work on your credit, and make sure you
pay everything on time.

Check your free credit score report often so you know where
you stand credit wise.

----------------------------------------------------
About the Author: Mike Clover is the owner of
http://www.creditscorequick.com/ . CreditScoreQuick.com is
the one of the most unique on-line resources for free
credit score report, fico score, Internet identity theft
software, secure credit cards, and a BlOG with a wealth of
personal credit information. The information within this
website is written by professionals that know about credit,
and what determines ones credit worthiness.

Getting on the Property Ladder

Getting on the Property Ladder
More and more first-time homebuyers are finding that
climbing up the property ladder is becoming more and more
like scaling a mountain. The sentiment is brought about by
rising interest rates and skyrocketing house prices. These
concerns are further compounded by the fact that lenders
have stopped offering affordable mortgages. However, these
do not imply that first-time homebuyers are doomed to
struggle forever, as there are other ways for them to go up
that ladder.

According to Nationwide, the price of the average
first-time homebuyer's home in London is nearing
£250,000, and the snowballing effects of five interest
rate increases add £80 a month to the cost of a
£100,000 mortgage. This is proof that the property
ladder is indeed getting harder to reach. In theory, young
buyers are better off compared to the older generation.
They are hard-working, well-educated and are well-paid
However, the significant lack of supply and high prices are
now making them stay off the market.

Obviously, there are solutions to this dilemma, including
more affordable housing, mortgage tax relief and the
cancellation of stamp duty for first-time buyers. In spite
of this, buyers have to wait a long time before they can
start enjoying these perks, if they ever come to
realization at all. Fortunately, there are other options
that first-time buyers can resort to.

Those who are considering a purchase may want to look at
other schemes towards making home ownership a possibility.
The following are some of the ownership methods made
available even for those who have low income.

Shared Ownership

This type of home ownership scheme allows a homebuyer to
buy a share of a property while the rest is owned by a
housing association. This means the consumers pay a
mortgage on the share they own, and rent on the rest. They
can purchase more shares at a later time if they want to.
Eventually, they may have the capacity to afford to buy the
entire property.

This alternative is typically appropriate for those with
regular income, but cannot afford to buy their own homes
outright. Compared to buying a house privately, this option
is considered less risky and more affordable because there
is no need for a big mortgage. Shared ownership plans are
usually run by housing associations.

Homebuy

This plan was initiated to assist housing association and
council tenants purchase property on the open market. The
homebuy scheme typically entails lending 25% of the
purchase price. A buyer uses a mortgage and/or savings to
pay the 75% balance. While he will not be obliged to pay
anything towards the loan until the property is sold, he
has the option to do so. During the sale of the property,
the housing association will take 25% of the sale price, or
less, if part of the loan has already been repaid.

This option is NOT available to:

1. Those who have rent arrears.

2. Buyers who are on housing benefit or have received it
during the past 12 months.

3. Tenants who have violated the terms of their tenancy
contract in the past.

Homebuy is obtainable in some areas only, and the number of
loans is limited. Those who want to avail of said scheme
must contact their landlord or the Housing Corporation.

Starter homes initiative

This alternative was developed for teachers, the police,
nurses and other health workers, and is available to
first-time buyers only. The initiative assists those who
want to purchase a home near the community where they work
but can't afford the property prices due to their
astronomical proportions.

Those who avail of this scheme may be entitled to:

* An interest-free loan

* A lump sum that doesn't have to be repaid until the
property is sold

* A shared ownership contract

Starter home initiatives are not available in all places,
and the number of loans is limited. Most of these plans are
offered in London and the south east. Interested buyers may
get in touch with their local council or the Housing
Corporation.

With these home ownership schemes, first-time buyers have
other options to get a foot on the property ladder. Until
such time when affordability is not an issue anymore, these
alternatives will serve as better opportunities for
consumers to buy their own homes.

----------------------------------------------------
Parmdeep Vadesha is a property investment expert and
founder of the largest community of property entrepreneurs
on the web who buy below market value properties from
distressed homeowners facing repossession, divorce and
bankruptcy. He writes a monthly newsletter for over 70,000
property investors worldwide -
http://www.Property-System.com

Following the Footsteps of Property Tycoons

Following the Footsteps of Property Tycoons
Young people in Britain dream of buying their own homes.
However, for the majority of these wannabe first time
homebuyers, owning one is plain wishful thinking. Adding
insult to injury for these dreamers are the research
results from industry-leading market intelligence provider
MINTEL. According to the company, there are millions of UK
homeowners who own a second home in the UK or abroad, just
the exact opposite of what the younger homebuyers are going
through.

According to MINTEL, most of these property tycoons are buy
to let landlords who own property in the UK that they rent
out, while the rest are those who simply take pleasure in
owning more than one place they can call home. The research
also revealed that more homeowners are set on having
another UK property that they can let out. This means that
buy to let is no longer limited to professional portfolio
landlords.

It is not unexpected that almost every wannabe tycoon has
joined the property bandwagon in an attempt to reap their
own millions. It cannot be denied that many people would
lead some to think that making mint out of bricks and
mortar is simple. But some property advisers claim that it
is not exactly the case.

Like in any business endeavor, the first step to becoming a
successful property businessman is to have the money to
invest at the outset. While having £2 million will
greatly help in the undertaking, many property tycoons
started out with very little. What made the difference is
that they were ready to take risks to realize their
long-term goals and they had the ambition to become what
they are today.

In recent times, too many are out to make property the
source of quick money. But the truth is that to be
successful entrepreneurs, wannabe tycoons need to take the
long-term view on where they want to be, and not just think
about the speed with which it will earn money.

Experts suggest that nascent property tycoons follow these
tips:

1. Be courageous. The tycoons of property didn't get to
where they are now if they didn't take big chances. Taking
big risks can result to reaping big rewards.

2. Have enough money to support your venture. Having a
banker and a good lawyer will help sort things out as you
go along your way.

3. When investing in property, use your head. If you want
to make business sense, avoid emotional investing.

4. Make sure you have taken a close look at the
fundamentals. Check the location of the property, its
structural soundness and the type of tenants living in the
establishment.

5. Take the long-term outlook. Don't get in the market to
make quick bucks. Buy to let is a long term investment and
should not be viewed as something that will yield profit in
6 to 12 months.

6. Seek professional advice. Investors would do well if
they had the expert guidance of property mentors.

Investors in buy to let who want to become genuinely
successful would do better if they placed their focus on
these important tips provided by experts in the field. In
due time, these tycoon hopefuls will be able to harvest the
fruits of their labor, and ultimately become the property
tycoons they have always dreamed about.

----------------------------------------------------
Parmdeep Vadesha is a property investment expert and
founder of the largest community of property entrepreneurs
on the web who buy below market value properties from
distressed homeowners facing repossession, divorce and
bankruptcy. He writes a monthly newsletter for over 70,000
property investors worldwide -
http://www.Property-System.com

What Kind Of Auto Insurance Coverage Do You Want?

What Kind Of Auto Insurance Coverage Do You Want?
In most states, car insurance is not an option. Some sort
of coverage is mandatory in order to operation a motor
vehicle lawfully. That being said, you may be wondering
what sort of auto insurance coverage to purchase. There
are two approaches taken by most motorists. On the one
hand, you have those who want the minimal amount of
coverage, meaning they want liability coverage. Yet,
others want full coverage so they have wider range of
protection.

The question you will probably ask is whether one form of
auto insurance coverage is better or worse than another.
As noted above, the minimal amount that you will need is
liability. This based upon the guidelines of most state
laws. Clearly, if you wish to drive legally you will at
least have to purchase some sort of liability insurance
policy. This type of insurance is meant to protect you
from legal repercussions in the event that you cause a
injury to another motorist or property damage.

Liability coverage is arranged by different numerical
components. There are three numbers used to describe
coverage levels. For example, if you have 30/50/10, the 30
defines the amount ($30,000) that the insurance company
will pay to cover any bodily injuries sustained by a single
person, with each accident. The second number, 50, equals
$50,000 and is the maximum amount that the provider will
pay for every injury that is a result of a particular
accident. Finally, the third number 10 equals $10,000.
This last value is used to cover property damage.

Now, full coverage affords the motorist far more area and
levels of protection than basic liability coverage. This
does not mean that it is absolute coverage. Rather, the
term "full" means that it includes additional coverage
beyond foundational liability. Two major
components—other than liability—include
comprehensive and collision. Full coverage has some
flexibility attached to in that you can choose to add
comprehensive without adding collision, but if you want to
collision you are required to have comprehensive.

Briefly, comprehensive guarantees protection against damage
caused by theft, vandalism, fires, and natural disasters
like hail. Collision affords protection to the motorist in
the event they are injured in a collision and proves
options for getting repairs made or for the purchase of a
replacement vehicle.

You can understand now what the essential difference
between full coverage and basic liability coverage is now.
Still, you will have to make a decision about how much
coverage you will need or must have. Factors like vehicle
type, year, and whether you are currently under financing
to purchase a vehicle can determine what sort of auto
insurance you will need. Costs for full coverage insurance
plans will typically be more than simple liability.
Anything you add will cost you extra. So bear that in
mind. Also, you will probably have to look at different
providers to get the perfect protections for your
individual needs.

Auto insurance should not be taken lightly. You know that
you will need it drive responsibly, so you should take the
time to make wise choices about how much coverage you want
and how much you wish to pay.

----------------------------------------------------
Gary Milton writes auto articles for many years and writes
for auto insurance, http://www.ridoe.net and for auto
loans, http://www.one38.org

Wage War on Your Debt - 5 Ways To Consolidate Debt Loans - Without Using The Bank!

Wage War on Your Debt - 5 Ways To Consolidate Debt Loans - Without Using The Bank!
Forget the Battle of the Bulge - are you losing the Battle
of the Bills? If so, don't surrender to your debt.
Instead, be smart, gather your bills, and read on because
I'm going to tell you about 5 ways you can consolidate debt
loans without using your home's equity!

CREDIT CARD TRANSFER - I know this is Old Faithful in the
financial services world, but if you can qualify for 0%
financing for a year, not only does it save you money, but
it may help you kick some unwanted debt out of your life.

Before transferring existing debt onto a new credit card,
keep in mind that if you can't pay off the balance before
the introductory rate expires, it could cost you in the
long run. If you're certain that you can pay the account
off during the introductory period it could be a wise move.

WHAT'S YOUR LIFE WORTH? - Do you have a whole life
insurance policy with cash value that you're not using
right now? If you do, you can borrow against its value in
order to pay off some bills. The good news is that the
interest rate on this kind of loan is usually better than
you can get on the open market and if you default it won't
hit your credit report. The bad news is that if you die
before you repay the loan, your beneficiary will receive
less money. Which is OK if you really don't like your
beneficiary anyway...?

NOT FOR PROFIT CONSUMER CREDIT COUNSELING AGENCIES- If your
back's against the wall, this option may be your best
choice for debt relief, because they can usually negotiate
better repayment terms than you can get on your own.

This option also has a possible drawback: depending on what
they negotiate, you could wind up with some credit score
damage by utilizing the services of a consumer credit
counseling agency.

But then again, minor credit damage is probably preferable
to the financial devastation that could come about if your
financial house of cards comes tumbling down.

In addition, these services usually offer free or low-cost
debt counseling services that can keep you from making the
same mistakes that got you into this situation in the first
place. You could chalk up the minor credit score damage as
the cost of a priceless financial education.

WHO'S YOUR DADDY? - I normally frown upon borrowing money
from family or friends, but if you have a relative that has
offered to help you out, you might want to consider taking
them up on it.

If you do, be smart about it. Don't borrow more than you
can afford to repay, have a written agreement - and stick
to it. Don't take advantage of the generosity of the
family member or friend.

Treat this obligation issue like you would any other credit
obligation. A hit on your credit report will stick around
for seven to 10 years, but potential damage to a
relationship can last longer. If you're mindful of the
dangers, your relationship will stay on firm footing.

RETIREMENT ACCOUNT - While it can be expensive to do so, if
it's only a limited amount of money and you eliminate the
accounts you pay off with the proceeds, this could be a
smart financial move, regardless of the fact that you'll
probably incur a tax penalty. Because this is your
retirement, this option should be used as a last resort.

See? It is possible to consolidate debt loans without
using your home as an ATM machine. Do you have any
creative ideas for consolidating debt? What are they?

----------------------------------------------------
Darrin Roseborsky is a Refinance Specialist with OMAC
Mortgages, seminar speaker and president of the Roseborsky
Group and HomeRefinanceCoach.com. Darrin can help you
MAXIMIZE your equity PROPERLY and help you find options
that make the MOST SENSE for your situation! Learn more
about how it works at: http://www.homerefinancecoach.com

Understanding the Annual Percentage Rate (APR) and What It Really Means In Real Estate

Understanding the Annual Percentage Rate (APR) and What It Really Means In Real Estate
The annual percentage rate (APR) gives you the yearly cost
of a mortgage in the form of a percentage. The rate
calculations include interest, mortgage insurance, and the
origination fee (points).

The APR has two main purposes.

1. it allows borrowers to compare loan programs from
different lenders so they can see which program is the
cheapest.

2. It creates a "level playing field" for lenders. And,
three, it prevents lenders from advertising teaser rates
and hiding fees from consumers.

The Federal Truth in Lending law requires mortgage
companies to disclose the APR when they advertise their
rates. Typically the APR is found next to the rate; for
example, "30 year fixed...8%...1 point...8.107% APR."

APRs can be useful for consumers in determining the cost of
a mortgage; however, they do have one problem you need to
be aware of, and that problem is that APRs can be very
confusing because different lenders calculate APRs
differently! This means that a loan with a lower APR may
not actually have a better rate.

To find out the truth about a particular APR on a loan, you
have to do digging and calculations on your own.

The first step is to ask lenders for a good-faith estimate
of their costs on the same type of loan (e.g. 30-year
fixed) at the same interest rate.

Once you have the estimate, the second step is to delete
all fees that are independent of the loan (e.g., homeowners
insurance, title fees, escrow fees, attorney fees, etc.

The third step is to add up all the loan fees and then
choose the lender with the lowest loan fees.

You may wonder why there's so much confusion about APRs.
Well, there are several reasons

Reason 1:

The rules to calculate APR are not clearly defined.

APR is calculated using a complex formula prescribed by the
Consumer Credit Act (1980). But, there are three different
ways of calculating the Annual Percentage Rate! Lenders
must inform you of the APR calculation method before you
sign a loan agreement, but that doesn't mean it's easy to
understand.

Reason 2:

It's not always clear what fees are included in the APR.

The following information about fees will show you what I
mean.

A. Fees generally included in the APR are:

1. Points - both discount points and origination points a.
Pre-paid interest. Note: This is the interest paid from the
date the loan closes to the end of the month. Most mortgage
companies assume 15 days of interest in their calculations.
However, some will use any number between 1 and 30.

2. Loan-processing fee

3. Underwriting fee

4. Document-preparation fee

5. Private mortgage insurance

B. Fees sometimes included in the APR:

1. Loan-application fee 2. Credit life insurance (insurance
which pays off the mortgage in the event of a borrower's
death).

C. Fees not normally included in the APR:

1. Title or abstract fee
2. Escrow fee
3. Attorney fee
4. Notary fee
5. Document preparation (charged by the closing agent)
6. Home-inspection fees
7. Recording fee
8. Transfer taxes
9. Credit report
10. Appraisal fee

Reason 3:

The APR doesn't tell you how long your rate is locked in
for. This means that one lender who offers you a 10-day
rate lock may actually have a lower APR than a lender who
offers you a 60-day rate lock.

Reason 4:

APR calculations for adjustable and balloon rates are
complex.

The future rates for adjustable and balloon rates are
unknown, so calculating APRs becomes very complex. This
results in more confusion for borrowers.

Reason 5:

Comparing APRs of different loans creates false comparisons.

Consumers sometimes make the mistake of comparing the rates
of different loans; i.e., comparing 30-year loans with
15-year loans using the respective APRs.

Example: A 15-year loan may advertise a lower interest
rate, but have a higher APR because the loan fees are
amortized over a shorter period of time. So, don't ever
compare the two!

Reason 6:

Different lender computer software programs may calculate
different APRs Lenders often use computer software programs
to calculate their APRs and don't even know what baselines
are used in these programs. Worse, the same lender with the
same fees may use two different software programs. It's
entirely possible that these programs may calculate two
different APRs!

Here are my two recommendations in regard to the APR:

First, use the annual percentage rate only as a starting
point when dealing with lenders.

Second, as I mentioned earlier, get good-faith estimates
from lenders and then exclude any costs that are
independent of the loan.

Key Point: When it comes to APRs, do your homework!

Jack Sternberg

----------------------------------------------------
Jack Sternberg is a nationally recognized expert on real
estate investment and the creator of the renowned "Buyers
First Program" who's been in the business for more than 30
years. Sternberg's deals have totaled over $750 million and
he's been to the closing table more than 1,500 times. For
more, visit http://www.askjacksternberg.com

Divorce and Affordable Auto Insurance

Divorce and Affordable Auto Insurance
As the saying goes, "Marriage is about love, and divorce is
about money." Dividing property accumulated over the years
can be as emotional as it can be difficult and fraught with
legal complications. Deciding who gets which car may be an
obvious decision in a divorce, but careful consideration of
how to take possession of an affordable auto insurance
policy may be a little more difficult. While auto insurance
regulations and collision coverage requirements vary by
state, there are enough similarities to offer this quick
checklist to make sure that you're covered.

Communicate

Be sure to inform your insurance agent when you and your
spouse first separate. Depending on your state's auto
insurance laws, you may need to purchase a separate policy
if you and your spouse are not living in the same home or
are legally divorced. Removing your ex from your auto
insurance policy now will clear you of any possible future
liability in the event of his or her involvement in an auto
accident.

Shop around

Just because you've always had an insurance policy with a
particular company while you were married doesn't
necessarily mean their rates are going to be the best for
you now that you are single. Call or get an online auto
insurance quote, do your research and obtain cost
comparisons to make the best financial decision for you.

How much do you need?

Review your auto insurance policy and make sure that it
provides you with adequate coverage in your current
situation. Your newly single self may need to add some
features not covered in your previous policy, such as
towing, car rental reimbursement and emergency roadside
assistance. If your car is an older model and paid for in
full, you might think about raising the deductible and
eliminating collision and comprehensive coverage. Another
way to save money is if your circumstances have
necessitated you move back home with your parents; they
might be able to add you to their auto policy.

Who gets the car (and the car insurance)?

Typically, whoever gets possession of the car is
responsible for paying the automobile insurance premiums.
Be sure that your new policy clearly states who is
responsible for paying the auto insurance premiums and that
your insurer knows your current address, which person is
driving which car, and if there will be significant changes
in the type or amount of driving that you will now be doing.

Sometimes, if there are children involved, and the
custodial parent incurs additional transportation costs
such as driving more miles per year or needing to purchase
a newer or larger car to take care of the kids' needs, then
the non-custodial parent may be ordered to pay all or part
of the custodial parent's auto insurance policy. Also, if
it is necessary for one of you to purchase a new vehicle, a
gap car insurance policy or a new auto insurance policy
will be required before the car can be registered.

----------------------------------------------------
Ryan Patterson is president of US Insurance Online, based
in Austin, TX. He graduated in 2000 from the University of
Texas with a combined business and computer science degree,
and started US Insurance Online in May of 2005 with fellow
entrepreneur Jim Waltrip. Visit
http://www.USInsuranceOnline.com for help shopping for
insurance and for free insurance quotes.