The financial services company known as E-LOAN is offering FHA loans as a reaction to the tightening credit market.
Officials with E-LOAN say, "Unfortunately, we are seeing an unprecedented number of homeowners being forced to foreclosure on their homes because they cannot afford their newly adjusted mortgage interest rates. For many, the flexible guidelines and competitive rates of these FHA mortgage loans will mean the difference between losing their homes and being able to keep their piece of the American dream fully alive."
FHA loans are becoming more popular in the wake of tightening credit standards and declining home values. With FHA loans, down payments can be as low as 3%. In addition, down payments can be gifts from a relative. With FHA loans, borrowers can refinance from high adjustable rate loans and lock into low, fixed-rate loans. The loans are also federally insured and are particularly appropriate for 1st-time borrowers.
As E-LOAN officials have stated, "This is a great loan product for the millions of buyers out there struggling to find a way to buy their first home - especially in today's ever-tightening credit markets. It is also ideal for borrowers with adjustable-rate mortgages that are getting ready to reset into a higher rate."
E-LOAN calls itself a "nationwide financial services company dedicated to providing consumers with a simple, easy and open way to obtain mortgage, auto loans, home equity loans, and online savings and certificate of deposit accounts."
Since it began in 1997, E-LOAN has gained a reputation for improving lending in innovative ways. Studies indicate that E-LOAN ranks as one of the top 20 most trusted companies for privacy in America today. Since it began, E-LOAN has funded more than $32 billion in mortgage and consumer loans.
Meanwhile, industry experts say they don't expect the troubled housing market to turn around until the middle of this year.
Source
Monday, December 28, 2009
Tuesday, December 15, 2009
Higher interest rates hurt E-Loan 3Q
Higher interest rates will put a crimp in E-Loan's (Nasdaq: EELN) third quarter results, the company said Thursday.
E-Loan, an online mortgage originator, said third quarter sales will be roughly $4.7 million to $5 million with pro forma loss of 34 - 35 cents a share. According to First Call, analysts were expecting a loss of 29 cents a share.
The company, which went public in June, said higher interest rates pummeled its refinancing revenue. E-Loan's mortgage refinancing volume fell about 38 percent in the quarter. Third quarter mortgage-related revenue was also hurt by its ability to process loans purchased in the secondary market. E-Loan is trying to increase its number of purchased loans to boost revenue. Typically, it passes loans on to other lenders.
E-Loan's funding of purchase loans increased 163 percent from the second quarter, growing from 18 percent of total second quarter originations to 50 percent of total originations in the third quarter. Officials said purchased loans make revenue more predictable.
"These capacity issues did not affect our ability to serve customers," said CEO Chris Larsen, on an analyst conference call. Larsen said the inability to process the loans meant E-Loan's interest rate locks expired. The company has hired more employees to compensate. The company maintained that capacity problems were a "one-time issue."
The sequential third quarter revenue growth is bleak for E-Loan considering the third quarter includes $300,000 to $400,000 in revenue from CarFinance.com, which was acquired Sept. 17. Revenue from the second quarter will be about flat. In the second quarter, E-Loan reported sales of $4.6 million and a pro forma loss of 30 cents a share. In the third quarter of 1998, E-Loan reported sales of $2.1 million and a loss of 11 cents a share.
Nevertheless, E-Loan implied it was doing better than its industry peers. The company said mortgage applications increased 35 percent in a quarter where rising interest rates caused a 24 percent decline in industry-wide mortgage applications.
To lessen its exposure to interest rate risks, E-Loan said it is diversifying with CarFinance.com and forging alliances to offer credit cards and home equity loans. The goal is to fulfill "all consumer debt needs online," the company said.
Source
E-Loan, an online mortgage originator, said third quarter sales will be roughly $4.7 million to $5 million with pro forma loss of 34 - 35 cents a share. According to First Call, analysts were expecting a loss of 29 cents a share.
The company, which went public in June, said higher interest rates pummeled its refinancing revenue. E-Loan's mortgage refinancing volume fell about 38 percent in the quarter. Third quarter mortgage-related revenue was also hurt by its ability to process loans purchased in the secondary market. E-Loan is trying to increase its number of purchased loans to boost revenue. Typically, it passes loans on to other lenders.
E-Loan's funding of purchase loans increased 163 percent from the second quarter, growing from 18 percent of total second quarter originations to 50 percent of total originations in the third quarter. Officials said purchased loans make revenue more predictable.
"These capacity issues did not affect our ability to serve customers," said CEO Chris Larsen, on an analyst conference call. Larsen said the inability to process the loans meant E-Loan's interest rate locks expired. The company has hired more employees to compensate. The company maintained that capacity problems were a "one-time issue."
The sequential third quarter revenue growth is bleak for E-Loan considering the third quarter includes $300,000 to $400,000 in revenue from CarFinance.com, which was acquired Sept. 17. Revenue from the second quarter will be about flat. In the second quarter, E-Loan reported sales of $4.6 million and a pro forma loss of 30 cents a share. In the third quarter of 1998, E-Loan reported sales of $2.1 million and a loss of 11 cents a share.
Nevertheless, E-Loan implied it was doing better than its industry peers. The company said mortgage applications increased 35 percent in a quarter where rising interest rates caused a 24 percent decline in industry-wide mortgage applications.
To lessen its exposure to interest rate risks, E-Loan said it is diversifying with CarFinance.com and forging alliances to offer credit cards and home equity loans. The goal is to fulfill "all consumer debt needs online," the company said.
Source
Saturday, November 28, 2009
ELoan Mortgage Bails on the Subprime Borrower
ELoan Mortgage bailed out on the subprime market about a year ago. Back then ELoan Mortgage was the first of many lenders to turn their backs on the subprime borrower.
As I predicted a few posts back, the bruised credit borrower would be left out in the cold the minute the big boys figured out the subprime loans they pushed so feverishly just 18 months ago are ticking time bombs ready to explode.
ELoan Mortgage subprime lending division showed a $39 million loss. This lead to the retirement of the wholesale operations President, Cameron E. Williams.
Like ELoan Mortgage, Mortgage Lenders Network of Connecticut also closed their bad credit wholesale operation so abruptly as to leave borrowers in the lurch for loans already approved. (see comments below)
On a personal note, a real estate agent friend of mine recently corroborated this ever increasing problem when 3 out of 4 of her closings were stalled while the buyer’s mortgage broker scrambled to find another lender after the first one bailed for the exact same reasons.
If you are a consumer needing a bad credit loan, or you’re in one of these loans now requiring a refinance to avoid increasing rates, you’ve probably already missed the boat.
A word to the wise…
Of course, their A paper lending division is still up and running as their TV commercials never stop!
ELoan Mortgage whose slogan is “Radically Simple” has widespread TV ad campaigns touting no cost loans. This review of them here would have to be negative since that right there puts them in the dog house with me. Perpetuating the idea mortgages are free sends a mixed message and does no one any good.
Of course, if you’ve read any Mortgage Insider articles on no cost loans you know the only way they can deliver on that message is to charge higher rates…much higher. You would also know that since ELoan Mortgage is a bank they will never have to disclose the “extra” profit they make over and above covering the closing costs.
I’ll conclude my ELoan Mortgage review by saying they are also owned by a Puerto Rican mega-bank called Popular, Inc. I don’t know about you but I’m not sure I’d want private financial information sitting off-shore.
Some thoughts about ELoan Mortgage to ponder before submitting a “Radically Simple” online loan application!
Source
As I predicted a few posts back, the bruised credit borrower would be left out in the cold the minute the big boys figured out the subprime loans they pushed so feverishly just 18 months ago are ticking time bombs ready to explode.
ELoan Mortgage subprime lending division showed a $39 million loss. This lead to the retirement of the wholesale operations President, Cameron E. Williams.
Like ELoan Mortgage, Mortgage Lenders Network of Connecticut also closed their bad credit wholesale operation so abruptly as to leave borrowers in the lurch for loans already approved. (see comments below)
On a personal note, a real estate agent friend of mine recently corroborated this ever increasing problem when 3 out of 4 of her closings were stalled while the buyer’s mortgage broker scrambled to find another lender after the first one bailed for the exact same reasons.
If you are a consumer needing a bad credit loan, or you’re in one of these loans now requiring a refinance to avoid increasing rates, you’ve probably already missed the boat.
A word to the wise…
Of course, their A paper lending division is still up and running as their TV commercials never stop!
ELoan Mortgage whose slogan is “Radically Simple” has widespread TV ad campaigns touting no cost loans. This review of them here would have to be negative since that right there puts them in the dog house with me. Perpetuating the idea mortgages are free sends a mixed message and does no one any good.
Of course, if you’ve read any Mortgage Insider articles on no cost loans you know the only way they can deliver on that message is to charge higher rates…much higher. You would also know that since ELoan Mortgage is a bank they will never have to disclose the “extra” profit they make over and above covering the closing costs.
I’ll conclude my ELoan Mortgage review by saying they are also owned by a Puerto Rican mega-bank called Popular, Inc. I don’t know about you but I’m not sure I’d want private financial information sitting off-shore.
Some thoughts about ELoan Mortgage to ponder before submitting a “Radically Simple” online loan application!
Source
Sunday, November 15, 2009
Popular, Inc. Reports Financial Results for the Quarter and Nine Months Ended September 30, 2009
Popular, Inc.
("the Corporation") (Nasdaq: BPOP) reported a net loss of $125.0 million for
the quarter ended September 30, 2009, compared with a net loss of
$183.2 million for the quarter ended June 30, 2009, and a net loss of
$668.5 million for the quarter ended September 30, 2008. For the nine months
ended September 30, 2009, the Corporation's net loss totaled $360.7 million,
compared to a net loss of $541.0 million for the same period in 2008.
Refer to the accompanying Exhibit A - Financial Summary for "per common
share" information and key performance ratios. Also, refer to Exhibit B for
credit quality information and to Exhibit C for summarized income statement
information by reportable segment. As indicated in previous filings, in 2008,
the Corporation discontinued the operations of its U.S. mainland-based
subsidiary Popular Financial Holdings ("PFH"), and thus the results of PFH are
presented as part of "Loss from discontinued operations, net of income tax" in
Exhibit A.
"Third-quarter results still reflect the effects of a deepening recession
and rising unemployment in Puerto Rico. The island's residential construction
market remains stagnant with low absorption rates, requiring a high level of
provisioning," said Richard L. Carrion, Chairman of the Board and Chief
Executive Officer of Popular, Inc.
Carrion continued, "While some U.S. economic indicators have shown some
improvement, our consumer and mortgage portfolios are still feeling the impact
of job losses on the U.S. mainland. We expect these economic trends,
particularly in Puerto Rico, to continue for the foreseeable future. We
continue to work on improving our U.S. franchise and maintaining our dominant
position in Puerto Rico for the turn of the cycle."
During the third quarter of 2009, the Corporation took steps to increase
its capital position that resulted in total additions of $1.4 billion to Tier
1 common equity.
On August 25, 2009, the Corporation completed the settlement of its
previously announced Exchange Offer to issue up to 390 million shares of its
common stock in exchange for its Series A and Series B preferred stock and for
its trust preferred securities. As part of the Exchange Offer, the Corporation
issued over 357 million new shares of common stock for a total of over 639
million common shares outstanding. This Exchange Offer resulted in an increase
in common stockholders' equity of $919.1 million, resulting from the exchange
of Series A and Series B preferred stock and trust preferred securities into
common stock. This included newly issued common stock and surplus of $608.4
million and a favorable impact to accumulated deficit of $310.7 million,
including $80.3 million in gains on the extinguishment of trust preferred
securities recorded in the consolidated statement of operations for the
quarter ended September 30, 2009.
Also, as announced on August 10, 2009, the Corporation agreed with the
U.S. Treasury to exchange all $935 million of its outstanding shares of Series
C preferred stock of the Corporation for $935 million of newly issued trust
preferred securities (the "New Trust Preferred Securities"). The New Trust
Preferred Securities have a distribution rate of 5% until December 5, 2013 and
9% thereafter (which is the same as the dividend rate on the previously
outstanding Series C preferred stock). The transaction with the U.S. Treasury
settled on August 24, 2009. The particular exchange with the U.S. Treasury
resulted in a favorable impact to accumulated deficit of $485.3 million
resulting from the excess of (1) the carrying amount of the securities
surrendered (the Series C preferred stock) over (2) the fair value of the
consideration exchanged (the New Trust Preferred Securities).
The Corporation's Tier 1 common equity to risk-weighted assets ratio
increased from 2.45% as of June 30, 2009 to 6.88% as of September 30, 2009 as
a result of the transactions described above. See "Reconciliation of Non-GAAP
Financial Measure" for a reconciliation of Tier 1 common equity to common
stockholders' equity and a discussion of our use of this non-GAAP financial
measure in this press release.
Source
("the Corporation") (Nasdaq: BPOP) reported a net loss of $125.0 million for
the quarter ended September 30, 2009, compared with a net loss of
$183.2 million for the quarter ended June 30, 2009, and a net loss of
$668.5 million for the quarter ended September 30, 2008. For the nine months
ended September 30, 2009, the Corporation's net loss totaled $360.7 million,
compared to a net loss of $541.0 million for the same period in 2008.
Refer to the accompanying Exhibit A - Financial Summary for "per common
share" information and key performance ratios. Also, refer to Exhibit B for
credit quality information and to Exhibit C for summarized income statement
information by reportable segment. As indicated in previous filings, in 2008,
the Corporation discontinued the operations of its U.S. mainland-based
subsidiary Popular Financial Holdings ("PFH"), and thus the results of PFH are
presented as part of "Loss from discontinued operations, net of income tax" in
Exhibit A.
"Third-quarter results still reflect the effects of a deepening recession
and rising unemployment in Puerto Rico. The island's residential construction
market remains stagnant with low absorption rates, requiring a high level of
provisioning," said Richard L. Carrion, Chairman of the Board and Chief
Executive Officer of Popular, Inc.
Carrion continued, "While some U.S. economic indicators have shown some
improvement, our consumer and mortgage portfolios are still feeling the impact
of job losses on the U.S. mainland. We expect these economic trends,
particularly in Puerto Rico, to continue for the foreseeable future. We
continue to work on improving our U.S. franchise and maintaining our dominant
position in Puerto Rico for the turn of the cycle."
During the third quarter of 2009, the Corporation took steps to increase
its capital position that resulted in total additions of $1.4 billion to Tier
1 common equity.
On August 25, 2009, the Corporation completed the settlement of its
previously announced Exchange Offer to issue up to 390 million shares of its
common stock in exchange for its Series A and Series B preferred stock and for
its trust preferred securities. As part of the Exchange Offer, the Corporation
issued over 357 million new shares of common stock for a total of over 639
million common shares outstanding. This Exchange Offer resulted in an increase
in common stockholders' equity of $919.1 million, resulting from the exchange
of Series A and Series B preferred stock and trust preferred securities into
common stock. This included newly issued common stock and surplus of $608.4
million and a favorable impact to accumulated deficit of $310.7 million,
including $80.3 million in gains on the extinguishment of trust preferred
securities recorded in the consolidated statement of operations for the
quarter ended September 30, 2009.
Also, as announced on August 10, 2009, the Corporation agreed with the
U.S. Treasury to exchange all $935 million of its outstanding shares of Series
C preferred stock of the Corporation for $935 million of newly issued trust
preferred securities (the "New Trust Preferred Securities"). The New Trust
Preferred Securities have a distribution rate of 5% until December 5, 2013 and
9% thereafter (which is the same as the dividend rate on the previously
outstanding Series C preferred stock). The transaction with the U.S. Treasury
settled on August 24, 2009. The particular exchange with the U.S. Treasury
resulted in a favorable impact to accumulated deficit of $485.3 million
resulting from the excess of (1) the carrying amount of the securities
surrendered (the Series C preferred stock) over (2) the fair value of the
consideration exchanged (the New Trust Preferred Securities).
The Corporation's Tier 1 common equity to risk-weighted assets ratio
increased from 2.45% as of June 30, 2009 to 6.88% as of September 30, 2009 as
a result of the transactions described above. See "Reconciliation of Non-GAAP
Financial Measure" for a reconciliation of Tier 1 common equity to common
stockholders' equity and a discussion of our use of this non-GAAP financial
measure in this press release.
Source
Thursday, October 15, 2009
Top 45 Mistakes Made When Seeking a Loan
1. Not investigating all your options: This is probably the biggest mistake in all domains, not only in finance. Many people use credit unions for loans, while others find good deals from their local banks. The key is to investigate all potential lending options, and by by this I mean ALL. I remember I used to read about every information related to this, including internet reviews for a whole year before taking the decision! Several sites, such as LendingTree. com, E-Loan. com and Amortization-Tools. com will help you make financing comparisons and calculate the best loan you can afford.
2. Not using an mortgage loan calculator: Not using an mortgage loan calculator with amortization schedule table to see exactly how you stand and what you can afford could be again one of the biggest mistakes you ever did, and believe me, I'm not saying that just because I own this website.
3. Making verbal agreements: If you're asked to sign a document containing instructions contrary to your verbal agreements, don't! The written contract will override the verbal contract.
4. Signing documents without reading them: Whenever possible, review in advance the documents you'll be signing. (Even though some specifics of your transaction may not be known early in the transaction, the documents you'll sign are standard forms and are available for review. ) It's unlikely that you'll have sufficient time to read all the documents during the closing appointment.
5. Failing to negotiate the loan: Be careful not to fail the negotiation of the prepayment penalty or a proper interest rate lock. Never believe the lenders when they say that there are some standards and you can not negotiate. Remember, always try to negotiate! You will give them a lot of money, so they will be happy to negotiate if they see you are about to go to another company.
6. Not determining what you can comfortably afford: Unlike a home mortgage, in which people look long and hard at what they will be able to pay over the next 10 to 30 years, car buyers do not always take such payments into careful consideration. "It is only for three years" is a familiar excuse for not evaluating the impact of such payments on your budget. Before taking any kind of loan, you need to consider how much money you can put down, and how much you can afford to pay on a monthly basis.
7. Accepting the first offer: Again, some people are very wrong by trusting the first loan officer interviewed. Be sure to shop around.
8. Believing 100% in internet reviews about mortgage companies: Believing 100% in internet reviews about mortgage companies is a also a big mistake because some of these reviews are paid articles by some mortgage companies. Be sure to believe only in you and in your calculations not only in what others say.
9. Not checking to see if your loan has a prepayment penalty clause: If you are getting a "NO FEE" home-equity loan, chances are that it has a hefty prepayment penalty clause. This can be very important if you are planning to sell your house or refinance in the next 3-5 years.
10. Getting too large a credit line: When you get too large a credit line, you can get turned down for other loans, because some lenders calculate your payments based on the available credit and not just the used credit. Having a large equity line indicates a large potential payment, which makes it difficult to qualify for loans. Note: this argument holds even if your equity line has a zero balance.
11. Not understanding the difference between an equity loan and an equity line: An equity loan is closed––i. e. you get all your money up front and then make fixed payments on that loan, until you pay it off. An equity line is open––i. e. you can get an initial advance against the line and then reuse the line as often as your want during the period that the line is open. Most equity lines are accessed through a checkbook or a credit card. On equity lines, you only pay interest on the outstanding balance. Use an equity loan when you need all the money up front––e. g. home improvement, debt consolidation. Use an equity line if you have an ongoing need for money or need the money for a future event––e. g. you need to pay for your child's college tuition in three years.
12. Not checking the life cap on your equity line: Many credit lines have life caps of 18%. Be prepared to pay payments at higher interest levels if rates move upwards.
13. Going by rate alone: The rate is only part of the equation. You need to know how much you'll be putting down and the terms of the loan before making a decision.
14. Choosing subjectively by your emotions: Make sure that you have done your research up front, and you know which loan you want and how much you are prepared to pay.
15. Not reviewing your credit ratings first: You should access your credit report and know what your FICO score is. This way you'll know exactly what the dealer is looking at, so that he or she cannot tell you your number is lower than it actually is. Additionally, if there are any errors, you can inquire about them beforehand.
16. Being quick to accept the dealership financing offer: Dealerships typically offer higher rates because they buy financing from banks and other sources, and raise the rate to make a profit. Shop around.
17. Focusing on payments over price: If you are focused more on low monthly payments than on the value of the car, home or mortgage, you may be paying more in the end. Know the overall value you need and consider the APR, terms, and length of the loan.
18. Not being able to walk away: Once you begin negotiating, especially at a dealership, you are not obliged to stay. If you do not like the offer or the manner in which the negotiations are headed, walk away.
19. Getting a loan from your local bank without shopping around: Many consumers get their equity line from the bank that they have a checking account with. Use your bank, but shop around first.
20. Not getting a good-faith estimate of closing costs: Your mortgage company is required to provide you with a written good-faith estimate of closing costs within 3 working days of receiving the application.
21. Not taking the shortest term loan you can afford: You'll always want to pay off the loan in the shortest time period you can afford. While the monthly payment will be higher in the short term, the interest payment will be lower. But, be very careful not the do it to short, as you wont be able to pay the monthly payment.
22. Not reviewing your credit report: By reviewing your report and FICO score in advance, you can make an effort to improve your credit rating if necessary or have any errors corrected.
23. Not getting pre-approved: This is the first step toward securing a mortgage and buying a home. Without preapproval, you do not know how much you will qualify for in a mortgage loan and what you can afford to spend.
24. Not shopping around: There are many sources of mortgage loans. It is a mistake to go to the one that is most convenient or that was recommended by a friend without checking the rates and terms offered elsewhere.
25. Shopping by interest rate alone: The lowest rates do not always mean the best mortgage loan. For example, you can get a low rate on an adjustable mortgage that becomes a significantly higher rate later on. You may also find that the lender is charging various fees that other lenders do not charge. There is also the question of whether you will be asked to pay discount points. You need to compare the overall package and not just the rate.
26. Not understanding the terminology: You need to know the difference between fixed and adjustable loans, what closing costs are, and what various other key terms are before seeking a mortgage loan. Web sites and books about attaining a mortgage loan can help with the terminology.
27. Mismanaging your credit cards: Prior to loan shopping you want to make a concerted effort to have your credit card balances paid off on time and in full. You also do not want to be opening and closing various credit card accounts. Plan in advance and have three or four credit cards at the most.
28. Not having the right mortgage broker: You want a mortgage broker that is in tune with what you are seeking. In addition, if the broker works with several investors, you have more options than if he or she works with just one.
29. Not knowing how much you have available to put down: You cannot look for a mortgage loan unless you know how much you need. To do so you should first determine how much money you have available for the down payment.
30. Not assessing your monthly expenses: A mortgage will mean paying a monthly amount on top of your current monthly expenses. You need to determine how much you can comfortably afford to pay without dipping into funds necessary for other living expenses. Mortgage calculators are readily available on Web sites to help you determine how much a mortgage loan, with interest, will cost you on a monthly basis. Also factor in property taxes.
31. Neglecting to consider closing costs: There are always closing costs when buying a house, such as escrow, title, and loan-related fees. This will vary from lender to lender and across different regions. Remember to account for closing costs.
32. Assuming that your home equity loan is tax deductible: In some instances, your home-equity loan is NOT tax deductible. This may be the case if you make too much and fall into the AMT trap, or if you have pulled out more than $100,000 cash from your home. Do not depend on your mortgage company regarding this matter––check with an accountant or CPA.
33. Assume your initial quoted rate will be your ending rate quote: Lenders often have some other excuse to change your original deal. For example, rate lock with the cave at all monies will be refunded if the appraisal comes in too low. Make sure you get some guarantees.
34. Assuming that a home-equity is always cheaper than a car loan or a credit card: A credit card at 6. 9% is cheaper than a credit line at 12%, even after the tax deduction. To compare rates, compute the effective rate of your home-equity loan, with the rate on a credit card or auto loan. Effective rate = rate * (1 - tax bracket) Example : If the rate of the home-equity loan is 12% and your tax bracket is 30%, your effective rate is : 12% * (1-0. 3) = 12%*0. 7 = 8. 4% If your credit card is higher than 8. 4%, then the equity loan is cheaper, otherwise it is not. Besides the interest rate, you may also want to compare monthly payments and other terms of the loan.
35. Getting a home-equity line of credit if you plan to refinance in the near future: Many mortgage companies look at the combined loan amounts (i. e. the first loan plus the second) even when they are refinancing the first mortgage. If you plan on refinancing your first, check with your mortgage company if getting a second will cause your refinance to get turned down.
36. Getting a home-equity line to pay off your credit cards if your spending is out of control: When you pay off your credit cards with your equity line, don't put your house on the line by going out and charging up those credit cards again! If you can't manage the plastic, tear it up!
37. Thinking that renting it doesn't worth: If you can rent cheaper while saving money to buy your first home or car, it's not necessarily an unwise decision.
38. Paying unnecessary lender add-ons: for mortgage life insurance, credit insurance or other expensive but unnecessary lender add-ons
39. Paying for something free: Paying hundreds of dollars to have a company set-up a bi-weekly mortgage payment plan, which is something the borrower can generally do at no cost.
40. Not gathering all of the required paperwork: Check all the applications and documents for accuracy. Mistakes in your paperwork might result in delay or denial, so be sure to proofread everything you do before applying for a loan.
41. Choosing a lender just because they have the lowest rate: While the rate is important, consider the total cost of your loan including the APR , loan fees, discount and origination points. When receiving a quote from a lender or broker, insist that the discount points (charged by the lender to reduce the interest rate) be distinguished from origination points (charged for services rendered in originating the loan). The cost of the mortgage, however, shouldn't be your only criterion. Have confidence that the company you select is reputable and will deliver the loan with the terms and costs they promised. If in the final hours of the transaction you determine that the lender has suddenly increased their profit margin at your expense, you won't have time to start again with a different lender. Ask family and friends for referrals. Interview prospective mortgage companies.
42. Not receiving a Good Faith Estimate: Within three business days after the broker or lender receives your loan application, you must receive a written statement of fees associated with the transaction. This is both the law and the best way to determine what you'll pay for your loan. Bring the Good Faith Estimate (GFE) with you when you sign loan documents. You should not be expected to pay fees which are substantially different from those contained in your GFE.
43. Not getting a rate lock in writing: When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and program details. Get it signed!
44. Not providing documents to your mortgage company in a timely manner: When your mortgage company asks you for additional documents, provide them immediately. They are doing what's necessary to get your loan approved and closed. Delays in providing documents can result in costly delays.
45. Getting a second mortgage before you refinance your first mortgage: Many mortgage companies look at the combined loan amounts (i. e. , the first loan plus the second) when refinancing the first mortgage. If you plan on refinancing your first loan, check with your Loan Officer to find out if getting a second will cause your refinance transaction to be turned down. You may wonder why did I chose 45 mistakes and not a round number like 50? Well, I could easily invent 5 mistakes to make it 50, like some of those ho make lists do, but, instead of just making a beautiful title out of it, I preferred to keep the quality intact. So, the conclusion is: Shop around, Shop around, Shop around! "Think twice, do it once!"
2. Not using an mortgage loan calculator: Not using an mortgage loan calculator with amortization schedule table to see exactly how you stand and what you can afford could be again one of the biggest mistakes you ever did, and believe me, I'm not saying that just because I own this website.
3. Making verbal agreements: If you're asked to sign a document containing instructions contrary to your verbal agreements, don't! The written contract will override the verbal contract.
4. Signing documents without reading them: Whenever possible, review in advance the documents you'll be signing. (Even though some specifics of your transaction may not be known early in the transaction, the documents you'll sign are standard forms and are available for review. ) It's unlikely that you'll have sufficient time to read all the documents during the closing appointment.
5. Failing to negotiate the loan: Be careful not to fail the negotiation of the prepayment penalty or a proper interest rate lock. Never believe the lenders when they say that there are some standards and you can not negotiate. Remember, always try to negotiate! You will give them a lot of money, so they will be happy to negotiate if they see you are about to go to another company.
6. Not determining what you can comfortably afford: Unlike a home mortgage, in which people look long and hard at what they will be able to pay over the next 10 to 30 years, car buyers do not always take such payments into careful consideration. "It is only for three years" is a familiar excuse for not evaluating the impact of such payments on your budget. Before taking any kind of loan, you need to consider how much money you can put down, and how much you can afford to pay on a monthly basis.
7. Accepting the first offer: Again, some people are very wrong by trusting the first loan officer interviewed. Be sure to shop around.
8. Believing 100% in internet reviews about mortgage companies: Believing 100% in internet reviews about mortgage companies is a also a big mistake because some of these reviews are paid articles by some mortgage companies. Be sure to believe only in you and in your calculations not only in what others say.
9. Not checking to see if your loan has a prepayment penalty clause: If you are getting a "NO FEE" home-equity loan, chances are that it has a hefty prepayment penalty clause. This can be very important if you are planning to sell your house or refinance in the next 3-5 years.
10. Getting too large a credit line: When you get too large a credit line, you can get turned down for other loans, because some lenders calculate your payments based on the available credit and not just the used credit. Having a large equity line indicates a large potential payment, which makes it difficult to qualify for loans. Note: this argument holds even if your equity line has a zero balance.
11. Not understanding the difference between an equity loan and an equity line: An equity loan is closed––i. e. you get all your money up front and then make fixed payments on that loan, until you pay it off. An equity line is open––i. e. you can get an initial advance against the line and then reuse the line as often as your want during the period that the line is open. Most equity lines are accessed through a checkbook or a credit card. On equity lines, you only pay interest on the outstanding balance. Use an equity loan when you need all the money up front––e. g. home improvement, debt consolidation. Use an equity line if you have an ongoing need for money or need the money for a future event––e. g. you need to pay for your child's college tuition in three years.
12. Not checking the life cap on your equity line: Many credit lines have life caps of 18%. Be prepared to pay payments at higher interest levels if rates move upwards.
13. Going by rate alone: The rate is only part of the equation. You need to know how much you'll be putting down and the terms of the loan before making a decision.
14. Choosing subjectively by your emotions: Make sure that you have done your research up front, and you know which loan you want and how much you are prepared to pay.
15. Not reviewing your credit ratings first: You should access your credit report and know what your FICO score is. This way you'll know exactly what the dealer is looking at, so that he or she cannot tell you your number is lower than it actually is. Additionally, if there are any errors, you can inquire about them beforehand.
16. Being quick to accept the dealership financing offer: Dealerships typically offer higher rates because they buy financing from banks and other sources, and raise the rate to make a profit. Shop around.
17. Focusing on payments over price: If you are focused more on low monthly payments than on the value of the car, home or mortgage, you may be paying more in the end. Know the overall value you need and consider the APR, terms, and length of the loan.
18. Not being able to walk away: Once you begin negotiating, especially at a dealership, you are not obliged to stay. If you do not like the offer or the manner in which the negotiations are headed, walk away.
19. Getting a loan from your local bank without shopping around: Many consumers get their equity line from the bank that they have a checking account with. Use your bank, but shop around first.
20. Not getting a good-faith estimate of closing costs: Your mortgage company is required to provide you with a written good-faith estimate of closing costs within 3 working days of receiving the application.
21. Not taking the shortest term loan you can afford: You'll always want to pay off the loan in the shortest time period you can afford. While the monthly payment will be higher in the short term, the interest payment will be lower. But, be very careful not the do it to short, as you wont be able to pay the monthly payment.
22. Not reviewing your credit report: By reviewing your report and FICO score in advance, you can make an effort to improve your credit rating if necessary or have any errors corrected.
23. Not getting pre-approved: This is the first step toward securing a mortgage and buying a home. Without preapproval, you do not know how much you will qualify for in a mortgage loan and what you can afford to spend.
24. Not shopping around: There are many sources of mortgage loans. It is a mistake to go to the one that is most convenient or that was recommended by a friend without checking the rates and terms offered elsewhere.
25. Shopping by interest rate alone: The lowest rates do not always mean the best mortgage loan. For example, you can get a low rate on an adjustable mortgage that becomes a significantly higher rate later on. You may also find that the lender is charging various fees that other lenders do not charge. There is also the question of whether you will be asked to pay discount points. You need to compare the overall package and not just the rate.
26. Not understanding the terminology: You need to know the difference between fixed and adjustable loans, what closing costs are, and what various other key terms are before seeking a mortgage loan. Web sites and books about attaining a mortgage loan can help with the terminology.
27. Mismanaging your credit cards: Prior to loan shopping you want to make a concerted effort to have your credit card balances paid off on time and in full. You also do not want to be opening and closing various credit card accounts. Plan in advance and have three or four credit cards at the most.
28. Not having the right mortgage broker: You want a mortgage broker that is in tune with what you are seeking. In addition, if the broker works with several investors, you have more options than if he or she works with just one.
29. Not knowing how much you have available to put down: You cannot look for a mortgage loan unless you know how much you need. To do so you should first determine how much money you have available for the down payment.
30. Not assessing your monthly expenses: A mortgage will mean paying a monthly amount on top of your current monthly expenses. You need to determine how much you can comfortably afford to pay without dipping into funds necessary for other living expenses. Mortgage calculators are readily available on Web sites to help you determine how much a mortgage loan, with interest, will cost you on a monthly basis. Also factor in property taxes.
31. Neglecting to consider closing costs: There are always closing costs when buying a house, such as escrow, title, and loan-related fees. This will vary from lender to lender and across different regions. Remember to account for closing costs.
32. Assuming that your home equity loan is tax deductible: In some instances, your home-equity loan is NOT tax deductible. This may be the case if you make too much and fall into the AMT trap, or if you have pulled out more than $100,000 cash from your home. Do not depend on your mortgage company regarding this matter––check with an accountant or CPA.
33. Assume your initial quoted rate will be your ending rate quote: Lenders often have some other excuse to change your original deal. For example, rate lock with the cave at all monies will be refunded if the appraisal comes in too low. Make sure you get some guarantees.
34. Assuming that a home-equity is always cheaper than a car loan or a credit card: A credit card at 6. 9% is cheaper than a credit line at 12%, even after the tax deduction. To compare rates, compute the effective rate of your home-equity loan, with the rate on a credit card or auto loan. Effective rate = rate * (1 - tax bracket) Example : If the rate of the home-equity loan is 12% and your tax bracket is 30%, your effective rate is : 12% * (1-0. 3) = 12%*0. 7 = 8. 4% If your credit card is higher than 8. 4%, then the equity loan is cheaper, otherwise it is not. Besides the interest rate, you may also want to compare monthly payments and other terms of the loan.
35. Getting a home-equity line of credit if you plan to refinance in the near future: Many mortgage companies look at the combined loan amounts (i. e. the first loan plus the second) even when they are refinancing the first mortgage. If you plan on refinancing your first, check with your mortgage company if getting a second will cause your refinance to get turned down.
36. Getting a home-equity line to pay off your credit cards if your spending is out of control: When you pay off your credit cards with your equity line, don't put your house on the line by going out and charging up those credit cards again! If you can't manage the plastic, tear it up!
37. Thinking that renting it doesn't worth: If you can rent cheaper while saving money to buy your first home or car, it's not necessarily an unwise decision.
38. Paying unnecessary lender add-ons: for mortgage life insurance, credit insurance or other expensive but unnecessary lender add-ons
39. Paying for something free: Paying hundreds of dollars to have a company set-up a bi-weekly mortgage payment plan, which is something the borrower can generally do at no cost.
40. Not gathering all of the required paperwork: Check all the applications and documents for accuracy. Mistakes in your paperwork might result in delay or denial, so be sure to proofread everything you do before applying for a loan.
41. Choosing a lender just because they have the lowest rate: While the rate is important, consider the total cost of your loan including the APR , loan fees, discount and origination points. When receiving a quote from a lender or broker, insist that the discount points (charged by the lender to reduce the interest rate) be distinguished from origination points (charged for services rendered in originating the loan). The cost of the mortgage, however, shouldn't be your only criterion. Have confidence that the company you select is reputable and will deliver the loan with the terms and costs they promised. If in the final hours of the transaction you determine that the lender has suddenly increased their profit margin at your expense, you won't have time to start again with a different lender. Ask family and friends for referrals. Interview prospective mortgage companies.
42. Not receiving a Good Faith Estimate: Within three business days after the broker or lender receives your loan application, you must receive a written statement of fees associated with the transaction. This is both the law and the best way to determine what you'll pay for your loan. Bring the Good Faith Estimate (GFE) with you when you sign loan documents. You should not be expected to pay fees which are substantially different from those contained in your GFE.
43. Not getting a rate lock in writing: When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and program details. Get it signed!
44. Not providing documents to your mortgage company in a timely manner: When your mortgage company asks you for additional documents, provide them immediately. They are doing what's necessary to get your loan approved and closed. Delays in providing documents can result in costly delays.
45. Getting a second mortgage before you refinance your first mortgage: Many mortgage companies look at the combined loan amounts (i. e. , the first loan plus the second) when refinancing the first mortgage. If you plan on refinancing your first loan, check with your Loan Officer to find out if getting a second will cause your refinance transaction to be turned down. You may wonder why did I chose 45 mistakes and not a round number like 50? Well, I could easily invent 5 mistakes to make it 50, like some of those ho make lists do, but, instead of just making a beautiful title out of it, I preferred to keep the quality intact. So, the conclusion is: Shop around, Shop around, Shop around! "Think twice, do it once!"
Monday, August 10, 2009
Popular Commences Exchange Offer to Issue up to 390 Million Shares of Common Stock in Exchange for Any and All Issued and Outstanding Shares of Its Series A Preferred Stock and Series B Preferred Stock and Issued and Outstanding Trust Preferred Securities
In connection with the Exchange Offer, for each share of Series A Preferred Stock, share of Series B Preferred Stock or Trust Preferred Security accepted in accordance with the terms of the Exchange Offer, the Corporation will issue a number of its shares of Common Stock equal to the Exchange Value, set forth in the table below, divided by the "Relevant Price". The "Relevant Price" will be equal to the greater of (1) the average Volume Weighted Average Price, or "VWAP," of a share of our Common Stock during the five-trading day period ending on the second business day immediately preceding the expiration date of the Exchange Offer (which we currently expect to be
Source
Monday, July 20, 2009
An overview of Home Mortgage Loan Rates
These days’ real estate prices are going high and on contrary to this rate of interest for Home Mortgage Loans are going low because of cut throat competition in market. Everybody wants to tempt borrowers and they do this by lowering the interest rates, sometimes by making loans accessible for bad credit holders also. In a nut shell they do not leave a single stone unturned to please the borrowers.
Home Mortgage Loan Rates play crucial role while choosing a loan. Many things depend on the interest rate of the loan like the cost of property, monthly installments etc. People want to take loan for as lower interest rates as much as they can so that they can save a bit of money. They must do so because buying a house is life long process as these loans are long-term loans i.e. for 10 to 30 years.
On the basis of rates home mortgage loans are divided into two types- Fixed rate loans and adjustable rate loans (ARMs). Rate of interest remains same for entire life of the loan for fixed rate loans and for ARMs it keeps varying. Rate of interest for Home mortgage Loans vary according to economic index. With economic index margin is added to the rate which actually is the lender’s profit. A small difference in rate can lead you to save significant amount of money.
Rate of interest for borrowers also vary according to type of Home mortgage Loan they are borrowing. For instance, interest rates for adjustable rate mortgage loans in starting five years are very low but after five years it increases significantly. To find best suitable loan, you need to study about all the types of Home Mortgage Loans. You also need to search the interest rates of different loan lending companies with their terms and conditions.
For instance E-loan is offering loans at 5.8% while countrywide is offering at 6.1% but with different programs leading you to get benefits in different ways. To find a best suitable loan for you, you should shop around and collect the quotes from several loan lending companies. For this you do not have to go anywhere, you can do it at your home on internet.
Find low Home Mortgage Loan Rates but do not get trapped into tempting offers of false lenders who may trap you and lead you to loss. Better search well about the loan lending company and then apply for Home Mortgage Loan. Do not do anything in haste because haste makes waste.
Source
Home Mortgage Loan Rates play crucial role while choosing a loan. Many things depend on the interest rate of the loan like the cost of property, monthly installments etc. People want to take loan for as lower interest rates as much as they can so that they can save a bit of money. They must do so because buying a house is life long process as these loans are long-term loans i.e. for 10 to 30 years.
On the basis of rates home mortgage loans are divided into two types- Fixed rate loans and adjustable rate loans (ARMs). Rate of interest remains same for entire life of the loan for fixed rate loans and for ARMs it keeps varying. Rate of interest for Home mortgage Loans vary according to economic index. With economic index margin is added to the rate which actually is the lender’s profit. A small difference in rate can lead you to save significant amount of money.
Rate of interest for borrowers also vary according to type of Home mortgage Loan they are borrowing. For instance, interest rates for adjustable rate mortgage loans in starting five years are very low but after five years it increases significantly. To find best suitable loan, you need to study about all the types of Home Mortgage Loans. You also need to search the interest rates of different loan lending companies with their terms and conditions.
For instance E-loan is offering loans at 5.8% while countrywide is offering at 6.1% but with different programs leading you to get benefits in different ways. To find a best suitable loan for you, you should shop around and collect the quotes from several loan lending companies. For this you do not have to go anywhere, you can do it at your home on internet.
Find low Home Mortgage Loan Rates but do not get trapped into tempting offers of false lenders who may trap you and lead you to loss. Better search well about the loan lending company and then apply for Home Mortgage Loan. Do not do anything in haste because haste makes waste.
Source
Subscribe to:
Comments (Atom)