Posts Tagged ‘loans’
Written on November 29th, 2011 by Samanthano shouts
The stock market’s most recent rise is due to the lifting of cash access restrictions made on European banks—due to the serious decline of confidence in the European banks recession recovery.
According to an article distributed by the Associate Press, “‘The central banks of the world have resolved that there will not be a liquidity shortage,’ said David Kotok, chairman and chief investment officer of Cumberland Advisors. ‘And they have learned their lessons from 2008. They don’t want to take small steps and do anything incrementally, but make a big bold move that is credible.’” The stocks of huge American financial institutions such as Morgan Stanley, J.P. Morgan Chase, and Citigroup have gone up between 6 and 7 percent, on Tuesday. These are being seen as big gains in such a shifting economy.
Essentially, rates for loans have been lowered to a point that simply makes it much easier for banks to borrow all of the money that they wish. This is a great alleviation for these banks and gives them more liquidity. However, experts have also been issuing caution to these large establishments and to the world at large. They have noted that this may just be the catalyst for another bubble effect later on and that this latest move may only be a matter of passing the buck. According to them, there has to be a sturdier foundation from which to build a stronger economy than what we are experiencing now—and since 2008.
“‘People are taking comfort that it’s globally coordinated,’ said Peter Tchir, who runs the hedge fund TF Market Advisors. ‘In itself it does nothing, but the bulls are anticipating that this is just the beginning of central bank and other actions’ to ease market pressures.”
“A successful action would be expected to reduce borrowing costs for Italy and other nations, Tchir said. Italy’s borrowing costs edged lower Wednesday, but the nation was still paying more than 7 percent interest for 10-year borrowing — a dangerously high level.”
—The Associated Press
Banks may be relieved at what may be considered a holiday miracle; however, some experts have noted that this could be a set up for an even more devastating financial upset later on down the line.
Even with cautionary mentions, the upward climbs of stocks have given a clear indication that there is more confidence within the market. Perhaps the infusion of morale will foster greater results instead of a more negative financial outcome. The Dow has increased by enough points to take them out of the pointed low the Dow was in only a week ago. The Standard & Poors index increased by almost 4 percent, on Tuesday. However, in another AP article, Standard & Poors is noted as decreasing the credit value of particular US banks—Bank of America, J.P. Morgan Chase & Co., Citigroup, Morgan Stanley, and more. This may also prove to be a most confusing time for some.
Standard & Poors have been noted as lowering credit ratings due to new practices and/or procedures recently adopted by particular banks.
Resources:
David Wagner, “Stocks leap on central banks’ coordinated action,” The Associated Press: http://www.ap.org
Yahoo! News: http://news.yahoo.com
Written on October 26th, 2011 by Samanthano shouts
College graduates have been having a really hard time of it lately. Unemployment is high and moral has been low. Trying to consider how to repay college loans in such an economy is more than challenging. The Obama administration has recognized this and has asserted a plan to help out college students with repaying college loans.
The Obama administration is going to ratify a college loan repayment cap in January 2012 instead of waiting to do so in 2014, according to a recent Reuters article. The cap would be at “10 percent,” of the college student’s income. This is a much welcomed and needed boost for our nation’s college graduates. At the very least, this plan is a start.
This is an independent change that does not have to have the approval of Congress for it to go forward.
According to the article, there are more Americans with college loan debt than with credit card debt right now. The amount of college loan debt is expected to increase and “exceed 1 trillion dollars this year, according to the Federal Reserve Bank of New York.”
The loan changes are expected to be announced this week by President Obama.
There will be more changes for students with this plan as well. According to the article, there will be ”debt forgiveness,” after twenty years. Currently debt forgiveness is set at twenty-five years. The plan will also offer a loan bundling deal for some students. The plan will also allow for interest payment reductions for qualified students that choose to participate in the program.
Only a minimal amount of Americans in college loan debt are currently making use of the college loan “repayment by income” programs that are now in place. The administration is hoping that this will increase use of the program, while reducing the amount of monthly debt that students have to pay back.
Most people go to college as a way to elevate themselves to a skill set that will make him or her highly valuable to potential employers. College students work very hard and usually make very little money while in school. This is all done with an implied promise of success. However, today’s job market is so sparse. It is simply difficult to get a job that can allow for being independent, much less able to repay back significant college loans. The disparity among other reasons, have summoned low expectations for the future of American college graduates.
The Associated Press has reported that more than any other decade before, the “2000’s,” has proved to be an especially tough economic crunch on college students and their families.
College students were a huge force in getting Obama elected. Perhaps this has added to a persuasive atmosphere and called on the attention of those that can make a difference. Being able to pluck some of the more fixable issues out of the vast pool of economic despair may be a step in the right direction.
Resources:
Associated Press: http://www.ap.org
Reuters: http://www.reuters.com
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Filed under Cost Of Living, Loans
Tags:American dream, college, college loans, cost of livng, debt, economy, education, employment, finances, jobs, loans, money, new cap on college student loans
Written on September 13th, 2011 by credit2meno shouts
Avoiding collection calls won’t get them off your back. You have to take action when you can’t pay your bills. Too often, the lenders are seen as the enemy but they are really just trying to get what is due to them. Of course they should be treating you with respect when you talk to them on the phone. Being late on bills isn’t just cause for them to harass you.
If you can’t pay your bills on time, contact who you owe and let them know. They may be able to have you pay an interest only payment for a few months. You won’t pay anything on principal. Then they will tack those payments on to the very end of your loan. They may be able to reduce your payment as well into smaller amounts, but you will have to pay for it over a longer period of time.
Still, being able to get your debts reduced can ease the monthly burden of what you have to pay out. As your circumstances improve, you can start to pay more to the lenders once again. If you owe a large amount of money, you may be able to get a lump sum settlement. This will pay off what you owe and then you can be free and clear from it.
When you accept such a settlement, make sure you get something in writing that verifies what the agreement will be. That way you have some proof should the attempt to come after you again in the future for the remaining balance.
You want to do all you can to avoid your bills going to collection agencies. When that happens you may have to pay legal fees and fines on top of what you already owe. This will only compound the problems that you have. When creditors don’t hear from you, they will assume that you don’t care. They may freeze your bank account or they can garnish your wages to get what you owe to them.
There are plenty of debt consolidation companies out there, but you do have to be careful. Many of them charge high fees and that is money that could be going to pay down your debt. They can negotiate balances, but you should be able to do that on your own with many creditors.
You may find that consolidating your debt though is a good idea. You will want to carefully evaluate the overall cost of it. If the rate of interest will be low enough, it could save you a large sum of money. You may find that getting a home equity loan can help you to pay off your debts. Then you can start over with a clean slate and have peace of mind. You don’t want to worry every time your phone rings that it is someone trying to get you to pay a bill.
Written on September 13th, 2011 by Samanthano shouts
Another Growing Trend
The Banking conglomerate is cutting approximately “30,000 jobs” over the next few years. It is estimated that this will save them billions of dollars, according to a report in the Associated Press. CEO, Brian Moynihan stated that the bank has made some significant changes over the past two years. According to the report, the Bank of America has new goals and is setting a new direction for the company – it wants to become a smaller (and possibly more manageable) bank. The bank has already “eliminated 6,000 jobs,” before the announcement, according to the report.
New Executive Team
There has certainly been a change on who is running the show at the Bank of America, as top executives have left the bank, leaving their duties to the “Commercial Banking Chief” and “Investment Banking Head,” according to the article. They will both be answering to the CEO in their new positions. There has been no official word on the exact reasons why the former executives are leaving.
Stocks Going Up
As a seemingly direct result of this restructuring, Bank of America stocks have gone up a bit on Monday.
Why The Change?
There is a lot of speculation – of course the first thing that may come to mind is all of the trouble the bank has had to face recently. According to further reports (AP), the bank has lost “value” over the past few months due to the eventual fall out of “poorly written mortgages,” it purchased. This is a direct result of the bank’s acquisition of mortgages from Countrywide Financial Corp., three years ago, according to the report. They also purchased Merrill Lynch a year after the Countrywide purchases. This was during the big bursting of the housing bubble, as I am sure you can recall. This set a downward spiral into place for the bank. Now, all three lenders are being sued by, “investors and regulators,” as a result of the failing value of those mortgages (acquired), according to the report.
Further reports note that the Bank of America has the highest amount owed, out of the other 16 banks currently being sued for “mortgage-backed security sales,” at over $55 billion dollars. The bank has paid back a little more than $12 billion so far according to those same reports. Experts believe that settlements may be offered very soon with regulators; however, no mention of the same with “investors,” according to the reports.
What This Means to You
If you are an investor, it seems that you are already in line, or will have to get into line for your remedy. Customers or other consumers may expect the usual occurrence when large companies diminish staff: customer care failings, possible fee hikes, service changes, or longer waiting periods for proper service overall. Of course this is only speculation right now. On the other hand, things may improve after the transitional period is over. That is a very real possibility as well.
There are currently no reports of any of the other banks being scrutinized, cutting large amounts of staff or restructuring their line of executives or other departments.
Resources:
Associated Press: http://www.ap.org
Yahoo! News: http://www.news.yahoo.com
Written on September 4th, 2011 by Samanthano shouts
What You Should Know
There has been a lot of talk lately regarding the ratings of financial institutions. Standard & Poor’s financial recent rating statement regarding the U.S. has really put the world in a spin about the American debt crisis. The thing is what does all of this really mean for the average American?
Standard & Poor’s, Moody’s, Fitch, A.M. Best
These are the four main U.S. entities that specialize in rating financial institutions. What they do is to figure out how well a financial institution or other such entity’s credit rating is by using similar standards as done for individuals seeking credit. This includes calculating how much debt has accumulated, the time frame of this accumulation, the ability to meet the payment schedule, and the frequency of requests for credit, just to name a few bits of the criteria. This helps to determine if these institutions are worthy enough for investment. These ratings can make or break an institution’s capability to borrow: which is an extremely important aspect in big business. This will determine how far an entity may be able to expand or grow. Without the ability for growth and expansion a potential borrower will surely be stifled and soon shrivel to competitors. And recovery from such a perilous fall may take a very long time.
These four rating powers inspect and report on the credit ratings of institutions such as banks, not for profit organizations, federal and state financial institutions including governmental entities.
Foreign Matters
S&P created an international ripple effect reaction to their announcement, downgrading the American financial status from AAA to AA, in August. This is the first time in the history of S&P that they have given the U.S. such a rating. This has had an upsetting impact on the way people are conducing their business ar0und the world as well as giving way to very public criticism against the U.S. Countries such as China have immediately brought up questions about the stability of the U.S. dollar continuing to be used as an international “reserve” dollar. However, S&P is the only one of the American agencies that has marked the U.S. with a downgrade, so far. Fitch and Moody’s still have the U.S. under the highest rating for their standards.
Meanwhile other regions like Australia have been showing their strength in having a stronger credit rating. They are currently being seen as having one of the strongest economies right now, with stable credit activity.
What this means for the average American
The average American will feel the effect of the downgraded American credit rating if any part of their income is supplemented with foreign funding. A lowered credit rating could mean that the U.S. will have less financial resources to borrow from to use as a reserve to support particular American programs such as government retirement benefit programs, as well as other social specific programs. The U.S. has also been using foreign money to supplement military functions including war efforts in recent history.
Only time will really be able to tell what is going to happen next. For right now a primary task at hand will be to improve job growth and reducing the U.S. debt crisis. This combination will be a sure road to economic recovery and the rebuilding of the American financial status.
Resources:
CNN: http://www.cnn.com
EHow Money: http://www.ehow.com
Maps of World – Finance: http://www.finance.mapofworld.com
Written on August 26th, 2011 by credit2meno shouts
If you don’t have good credit or you don’t have any credit at all, you may have a hard time borrowing funds. One of the ways to get around that could be to get a co-signer on the loan with you. This is an individual that is willing to take on the responsibility for that debt. If you don’t pay it according to the terms and conditions, then they will be legally responsible for it.
Of course being a co-signer is a huge responsibility, so you aren’t going to ask just anyone to do it. Many parents are willing to do this to help their children establish credit for an apartment or to get a vehicle. They may also co-sign for their children to get student loans for college.
You can ask your friends, other family, and even people you work with to co-sign for you. Give them all of the facts so that they have time to think about it. They need to know that you are going to be reliable so that they don’t have to pay your debt. If you have a good work history and you are good with your money, then they shouldn’t have a problem with it.
Getting a co-signer can be very important for someone with no credit. It can be frustrating to be turned down because you have never been given a chance before. Due to the high default rates, many lenders don’t offer funds to someone that has no credit history. Getting a co-signer on a vehicle for a couple of years though can help them to get that credit in place.
Some individuals have poor credit due to no fault of their own. Perhaps they were very ill and couldn’t work for a while. They may have gone through a divorce and they are struggling to get back on their feet. The death of someone in the household can also affect financial stability. There are numerous reasons why people have less than perfect credit, so don’t be too quick to judge them.
If you do ask someone to co-sign on a loan for you, keep in mind how it is going to affect their own credit. Make sure you do everything within your power to keep the payments current. In fact, strive to pay off the debt in less time so that both of you can be free from it. If you are going to be late on a payment or miss a payment for any reason, make sure you let them know. It is better than they find out from you than they get a collection call from the creditor.