Financial Crisis Inquiry Commission D2 - Canadian Banks and Fraud

A New Cash Back Credit Card For The New Year?

This post was written by guest blogger Jesse D. from Credit Card Forum, where he reviews the best credit card deals. His work is published on the aforementioned site every Tuesday and Thursday.

Many of us make New Year’s resolutions. Maybe it’s to lose weight, to exercise more, or some other goal. But there’s something everyone should do for the new year and that is to re-evaluate their credit cards. Are they still the best ones to have?

What’s new for 2011?
During 2010 we saw several new reward credit cards hit the market. Meanwhile, many existing cards changed the way their reward programs work. So it’s important to pull those old cards out of your wallet or purse and see how they measure up.

To make it easy for you, here are some of the biggest changes we had in 2010 as far as credit card rewards are concerned…

The Chase Sapphire card is launched
The Chase Sapphire card is a new premium rewards card that is marketed to upper middle-class households. The regular version has no annual fee and gives you points that can be used for purchases on any airline, anytime, with no blackout dates. The Chase Sapphire Preferred does have an annual fee, but it gives you higher rewards and some additional benefits.

AmEx introduces the “Premier” Gold card
The AmEx Gold has been around for decades and continues to be a hit. It carries a $125 annual fee and offers a wide array of benefits. For those willing to shell out an extra $50, they can now get the “Premier” version of the Gold card, which offers higher rewards – 3x points on airfare, 2x points on groceries and gas, and 1x point on every other purchase.

The Citi Forward card cements itself as the best for restaurants
Now the Citi Forward card has been out for a few years and is well known for its 5x points on restaurants and fast food, but it wasn’t the only card to ever that. However due to reward program shakeups in 2010, the Citi Forward credit card is now the only one left on the market that still gives 5x points on those categories. Therefore if you eat out a lot, the Citi Forward card is definitely one to consider.

The Chase Freedom changes its rewards program
This card has been out for several years and is one of the most popular cash back credit cards on the market. Previously, the card gave an unlimited 3% cash back on your top 3 categories of spending. In 2010 they changed their rewards program – now they give 5% on categories that rotate every quarter, on up to $1,500 of spending in those categories. For some people this change will be beneficial, but for others it will be a step back.

Conclusion?
During 2010 the credit card rewards scene changed tremendously. Make sure you familiarize yourself with the new reward cards, as well as those which have changed their programs.

Comparing Mortgage Programs

In today's real estate financing marketplace there are a variety of home loan programs to choose from. From low money down FHA loans, VA mortgages , and USDA rural housing loans to non-conforming jumbo loan programs it can be a bit overwhelming when trying to select the right product. Luckily there are plenty of qualified mortgage professionals who are ready, willing, and able to help you navigate the waters. Prior to contacting a mortgage lender or broker, take a few minutes to answer the following questions:

1. How much money do you have to put down? Or, in the case of a refinance, how much equity do you have in the home? The answers to these questions will immediately narrow down you choices. If the answer is less than 5% you are probably going to be looking at a government backed product (ie a VA, FHA or a USDA loan).

2. What is your credit score and that of the co-borrower? If the scores are above 740 you may be able to qualify for some of the best rates out there. If your score is below 620-640 your options are going to be very, very limited. American Financial Resources offers a low credit mortgage product for people with scores down to 600.

3. How long are you planning on being in the home? If the answer is less than 7-10 years, you may want to consider an adjustable rate mortgage. Adjustable rate mortgages have an introductory rate which is fixed for a set period of years prior to adjusting up or down based upon a loan's margin and the index that the loan is tied too. ARMs do carry added risk so be sure to weigh the pros and cons before moving forward.

4. Realistically, what can you afford to pay every month? If we learned anything in the recent housing crisis it should have been that we need to try to do a better job living within our means. Banks have tightened their guidelines which helps reduce the risk of high debt-to-income ratios.

5. What is the current state of your real estate market? Housing prices in many parts of the country are slowly coming back but there are plenty of communities where prices are still in freefall. If you are planning on putting down 5-10% on a 5/1 ARM and the value of your home drops 10-15% over the next 3-5 years, you may find yourself upside down and unable to refinance out of the adjustable rate mortgage.

Once you have answered these questions you can engage a mortgage professional and let them know your goals and lay out any concerns you may have. When selecting a mortgage lender or broker, always do a little homework by checking the company's standing with the Better Business Bureau and/or their licensing authority. Best of luck finding a great deal on your next home loan.

Proper education on credit

It is very important to know about your credit ratings since it has a significant role in your financial life. You will get qualified for new credit or get a decent job based on your credit ratings.

The creditors with whom you have different accounts will report your spending and payment habits to the credit bureaus. As per the information provided by the credit grantors, a numerical score will be created for you. Your score is called a FICO score and it has a significant effect on everything you do from buying a home to getting a cell phone.

Credit scores are considered like the grades for the grown ups and credit report is looked as a report card. Your credit ratings is said to be better if you have higher grades. Credit scores range from 300 to 850. A person having credit scores of more than 700 is considered to have good credit ratings.

If you have good credit scores, you will be able to get better deals on mortgage rates. Due to the recent economic recession and the foreclosures being on the up, most of the banks are paying close attention to a person’s FICO scores before granting any new home loan. You will save a lot of money just in interests if you have a good credit scores. For example, if you get a home loan of $200,000 at 2% APR, you will save around $100,000 in interests!

You will also get lower rates on insurance if you have good credit ratings. Most auto and health insurance companies will check your credit ratings before setting the premium on your insurance. Most of the people with high credit scores are statistically less likely to file a claim against their policy. The consumers are rewarded when they get lower rates on their life, health or auto insurance.

Good credit ratings have a deep effect on employment opportunities also. Most of the employers will review your credit report and go through the past account history. This is done to determine your ability to be responsible with money. People with good credit scores will be given more preferences than someone who has a bad credit..

Credit ratings have a significant effect on almost every area of your life. You will live a much better life if you have good credit ratings. It is crucial to monitor your credit because it changes over time and new information is always being added.

Mobile home refinance loans with any credit

Most of the people who have a mobile home would like to refinance it. There can be many reasons for doing this because they may want to pay off their existing debts, or buy a bit more land, use the money to add one, or it can be for any other specific reasons. There are certain things you should know before refinancing your mobile home, as it is quite different from a typical loan. Follow these tips if you are looking to refinance your mobile home

If you do not have your own land, then you need to work out a plan so that you are able to purchase some land for your mobile home. This will make the financing process much easier and you will not have to pay any rent for a spot in a park. If you have pets or children, then they will get more space to play in your new land. You can always extend your mobile home on this land later.

When you make a mobile home, make sure that it is fixed to the ground and should not be on wheels. Most of the banks will not offer a loan if they find your mobile home attached to a trailer hitch. This will give them a feeling that your home can be easily moved anytime. This will help you when appraisal time comes because there will be no pictures with wheels or a hitch to help underwriting tell you no. This is a must and most lenders will not even touch you if you do not get rid of the wheels and hitch.

When you apply for a mobile home refinance loan, make sure that it has a positive effect on your credit ratings. Review your credit report thoroughly and see if you have any unpaid debts from the past. You need to pay off the previous debts first so that you can keep your debt to income ratio low as much as possible and you will have better chances of getting approved for a mobile home refinance loan.

Reverse Mortgage Gives a Source of Tax-Free Income

With the rising costs of essential items for daily consumption, such as food, medical expenses and rent, seniors have to trim and prune their expenses and budgets, especially more so in these times of economic problems. They can take a reverse mortgage to utilize the equity in their home if they are aged 62 or above. A reverse mortgage is a federally insured loan insured through the FHA (Federal Housing Administration). The FHA uses approved appraisers to determine the value of the home or property being reverse-mortgaged and charges a 2% MIP (Mortgage Insurance Premium).

The FHA requires that borrowers would need to undergo counseling before submitting an application to a reverse mortgage lender. The property being reverse mortgaged would need to be the primary place of residence for the borrower. There are no other credit or income requirements.

The money got from a reverse mortgage is tax-free and can be treated like any other monthly income, a credit line, a lump sum or any combination of these. Home owning borrowers would still need to pay taxes and insurance on their homes.

Proceeds from the reverse mortgage loan are in addition to any Social Security or medicare benefits. The evaluation criteria for reverse mortgage are based on age of borrower, value of property and interest rates. The FHA has recently raised the cap on reverse mortgage values to $625,500. The older the senior is, the more is the money he or she will receive. The reverse mortgage programs are insured by the FHA, so even if there is a decline in home values, senior is protected.

A reverse mortgage can be used to pay off an existing mortgage, and to prevent a foreclosure. Seniors can make use of the tax-free cash in any way they please, such as a vacation, a home remodeling, a new car or travel.

As long as the senior remains in the same home, the money does not have to be repaid. When the home is sold and the senior is moving out or has passed away, then the mortgage debt and the fees have to be paid and the remaining money then can be passed on to the estate/heirs.

The law has been changed recently so seniors can purchase a new home with the money from a reverse mortgage. The money from reverse mortgage can be availed of in any of the following forms:

• in lump sum
• as monthly payment
• line of credit
• any combination of the above options.

The heirs of the borrower can retain the remaining equity in the property after completing repayment by sale of the house or through a refinance.

The Three Biggest Mistakes You Can Make When Searching for a Mortgage

Acquiring financing is often the most intimidating and daunting aspect of buying a home. This is very a crucial step that should not be taken lightly as it will affect your financial history now and in the future. To ensure that you are getting off to a positive start, here are some mistakes to avoid when searching for a mortgage loan:

Mistake #1: Not Asking for a Lower Rate

Too often, borrowers assume that interest rates are set in stone with the lender – but this is not always the case. If you are looking to borrow money from a particular lender, you have the right and the obligation to ask if they can give you a lower rate than what they originally quoted you. If successful, this tactic can result in a lower annual percentage rate and significant savings in the long run. There are a variety of comparison tools online that can help you compare mortgage rates from lender to lender.

Mistake #2: Not Using a Lawyer

Not consulting a real estate lawyer to look over your mortgage documents when obtaining financing is another crucial mistake that might cause trouble in the future. Mortgage documents are both complex and lengthy and as a result it is often necessary for a lawyer to review the documents and offer legal advice. A knowledgeable attorney will also be able to explain any areas you are unclear about in the financial agreements and/or closing documents. Buying a home is a major investment as is taking out a mortgage so paying an attorney to look after your interests is well worth the cost.

Mistake #3: Not Checking Your Credit History

Before you even begin to look for a mortgage loan, you definitely want to look into your credit history, if you haven’t already done so. Because lenders are going to offer you mortgage rates that are in relation to your credit history, knowing how you rate can help you determine if they're offering you the best rate for your financial status. If not, you can move on to someone who will.

Also, when you are obtaining a loan, you need to be absolutely sure that you understand what you are getting into. The main problem concerning many of the borrowers forced into foreclosure as a result of the recent mortgage crisis lied in the fact that they did not understand how their mortgages worked and they subsequently became too expensive for them. Do not let this happen to you.

Using your payroll debit card

According to American Payroll Association, only three percent of the total population is using their payroll debit cards, presently known as the Pay cards. In future, maybe 22000 members, half of the association members, are thinking of using these types of cards in their payroll system sometime in the future. Although, there are many banks who offer these kinds of services, but there are still many more who are not aware of these cards. Employers who are keen in using these kinds of services of paying wages to their staff can learn more and implement it in their system.

US is considered to be one of the most technologically advanced countries but there are still many companies who still write a number of checks to pay wages to their staff every pay period. Those companies who have been implemented the use of Pay cards have got satisfactory results with the new bank service.

One of the benefits of using payroll debit cards for employers is a drastic decline in payroll processing costs. It hardly costs 20 cents per transaction while loading a pay card. Paper checks are more expensive and can cost up to $2. There are many companies that employ part time workers who do not have a bank account and these pay cards will sound to be very helpful in their cases. Recent statistics say that almost 17% of the total working US population does not have an active checking or a savings account. A debit card payroll system can help growing businesses in managing their payroll electronically.

There are many benefits of using a payroll debit card. Employers do not have to pay any fees to check cashing shops when the staff wants to encash their salaries. Some of these check cashing places may charge 10% for every pay check that they cash in. Besides, carrying card is always safer than carrying hard cash. Pay cards can also be used as debit or credit cards. So online transactions can be done very easily and pay monthly utility bills and make other purchases online. Using these pay cards can be a very happy experience for both the employer as well as the employee.

How to cut your grocery bill to half?

With the rising prices, many people are finding ways to save money and one easy way of doing this is to clip coupons so that few dollars can be saved on the groceries. You must have often seen on the televisions or heard on the radio that it is possible to cut down the grocery bills to less than half by simply using coupons. There are certain ways to do this and if you follow the tips, you should also be able do some savings.

Go through the grocery ads that come weekly. This way you should be able to plan your expenses in the right time when the offers come in. You should also start collecting the coupons that come in the mail or on the newspapers. Most people cut those coupons only that they often use and leave the rest that they do not use. Well, there’s no harm in keeping all the coupons altogether and use them with the grocery ads to get the best value.

There are certain days when the total value of the coupon gets doubled. You can use your coupons on those days so that you can get maximum savings. If you have done your planning in an organized way, you should be able to get some good deals on juice, frozen foods, and even dairy products for mere pennies.

Browse through the internet and you will find a lot of forums where people interact about these coupons and best offers. By joining into such groups, you will get to know more on cutting your grocery bills to less than half. With the way economy is moving, it is important to save as much as possible by learning the tricks of the trade.

President Obama’s loan modification program

Many homeowners will be thinking who will qualify for the President’s loan modification program in the current recession period? The Affordability and Stability Plan will allocate $75 billion dollars to help the borrowers and save them from possible foreclosure. The question is who will actually qualify for this program since it is not everyone and also because all the lenders are not participating in it.

The goal of the new home loan modification plan is to help 7 – 9 million borrowers stay in their homes. This program is voluntary and each lender will determine which borrower will actually qualify for this plan. The federal government will offer incentives to lenders who participate, but the final decision is up to the bank whether to participate in this plan or not. The homeowners will have to show certain documents and complete the loan modification forms that will be reviewed for eligibility. Here are some basic guidelines on how to qualify for the Affordability and Stability plan

You must live in the home as your primary residence
Not available on second mortgages
You must be able to prove your income
Your current house payment must equal 31% or more of your gross monthly income
You do not have to be delinquent to apply for this loan modification program
No charge to apply-Free loan modification program

Interested homeowners will start collecting the required paperwork and complete the necessary forms. Borrowers will have to prove their financial hardship, provide their income and expense details in order to be considered as a potential candidate for the mentioned plan.

The program is on a voluntary basis and the banks will decide whether to participate in it or not. Since the federal government is offering the incentives, so most banks are willing to offer this plan to the borrowers who qualify.

Successful borrowers will also be given a financial incentive for keeping their new modified loan current. The incentives will keep on increasing each month so that the borrowers do not default in the repayments, with a possible $5000 bonus that will be applied directly to their mortgage balance at the end of 5 years. The financially strapped borrowers can begin learning more about how to qualify in this plan and submit their paperwork for approval.

Logical spending with your cash

Turning your finances around is a logical game. It needs a lot of great effort to be able to do this. The most important step is to pay off your existing debts and become debt free. When you are going through this emotional ride of paying for a debt, you will have this in your mind and you will never make this kind of mistake again that led you reach to this point.

Presently, due to the recession, it will be a dream comes true if you manage to come out of debts. Take the time to think if you were not contributing a portion of your budget for the debt payments. What happens to that extra money if you did not have any debts? What will you do with the extra time if you do not devote it towards some part time job and earn money to pay off some of your bills?

If you have a huge amount of debt, paying high interests on the principal amount will never let you rest in peace. Besides, constant calls from the credit card companies asking for payments will be highly annoying. Have you ever realized why this is all happening?

Spending excessive amount of money for designer clothes seems logical. If you have been stressful at work for the whole week, then you will definitely need some therapeutic shopping. After a month, the bills will come and you realize that you don’t have the money to pay it back. Is that true stress reliever?

You should have a total control on your spending habits. If you are earning $1000, you should not be spending more than that amount, otherwise you will fall in debts. And the fact is that most people do not realize this and they make this mistake. It is easier to swipe a credit card and make the purchase, but paying the amount back in the due date is a different story

Protect yourself from spending haphazardly with your credit cards. If you can’t use your credit cards properly, then you should throw it away. You should instead live on cash or a debit card.
When you are in the process of getting out of debts, be in your control and use the strict regimen of “buy as needed”. Monitor your bills regularly and don’t spend on things that you don’t need at all. For example, a gym membership that you hardly attend to or that expensive cable TV package.

By keeping it up with the effort to revolutionize your spending habits in your pursuit for a debt-free life, you will soon be rewarded with the life without the hassles from debt paying. Only by having the relief of living a life debt-free, will you get more out of life.

Finding A Mortgage Structure That Works: Reverse Mortgage Types

Though not right for everyone, there are many senior homeowners that can benefit from a reverse mortgage, especially those that have lost substantial amounts of money in the recent financial crisis.

Reverse mortgages come in three kinds: single-purpose loans, home-equity conversion mortgages, and private reverse mortgage.

Single-purpose loans-those offered by state and local government agencies and nonprofit organizations, is by far the most common reverse mortgage type. They are granted to seniors for the purpose of lifestyle maintenance, home improvements, and other major expenses. Single-purpose loans are typically a lower cost option compared to HECM’s and private reverse mortgages
HECMs are sponsored by the Department of Housing and Urban Development and can be used for any purpose that the borrower wishes. One of the best things about a reverse mortgage is that there are no health, income, or medical restrictions to qualify. The only qualifications are that you be 62 years of age or older, in addition to either completely owning your home or have a current mortgage loan balance that is low and can be paid off with proceeds from the loan.

Private reverse mortgages are loans that are developed and backed by private lenders, not the government. If considering a reverse mortgage from a private lender, it is important to carefully scrutinize the mortgage contract and terms, as many of the lenders who previously sold subprime loans now sell reverse mortgages. However, there are still a lot of trustworthy and reliable lenders available, and with a good credit rating and a substantial amount of equity, you will be able to qualify for the best terms.

Do remember that regardless of type, your reverse mortgage will become fully due if you decide to move. Also keep in mind that there are high upfront fees and charges that borrowers usually incur with reverse mortgages. It would be wise to not borrow the full amount of your home’s equity if you plan to move in the future or want to leave your home to your heirs.

As with any type of loan, if you are thinking of taking out a reverse mortgage, be sure to speak with a financial counselor to discuss goals and qualifications.

The art of war loan modification style

Due to the current recession, you might be one of the many who is in the danger of losing your home! If you do not fight hard, and fight now, you will lose almost everything. Never forget that this is a kind of a war where you have to fight for your rights.

Grab your armor and weapons and start training for the fight of your life. You are getting set for a battle with one of the toughest and most powerful opponents in the world. Big money banks, lenders and investors!

Banks are some of the oldest and most powerful institutions in the world. They have had hundreds of years of practice, influencing political parties and economic systems the world over.

In order to win, you must not forget that you are in the fight of your life. Any good fighter will tell you that when you plan to fight with an opponent, you must first analyze the strength and weaknesses.

Be aware of your lenders strengths:

1. A lien on your property in the form of a mortgage.
2. The right to take your home in foreclosure to satisfy the lien
3. The law is currently on their side
4. A loss mitigation system designed to discourage you.
5. A negotiation process geared towards getting naïve homeowners to accept an arrangement not in your best interest.

Apart of the strengths, your lender has certain weaknesses as well:

1. Prospect of foreclosure in a down market with few buyers.
2. Costs of foreclosures.
3. Depreciating assets REO properties.
4. Liability of carrying properties
5. Tied up capital and reserves for bad loans
6. Possible errors in loan documents
7. Possible violations in loan documents
8. Incorrect interest calculations in ARM rates
9. Court cases that can cause PR problems, costly litigation, and possible creation of legal classes.

Suffice it to say, lenders have plenty of things to fear in this market when it comes to trying to recover their losses. In most cases, if the matters are on the verge of going to the court, 95% of the lawsuits are settled and never reach trial. Banks know this better than anyone, and they don’t want to have to face the prospect of lawsuits from borrowers that they have wronged.
Over the years, lenders have gotten fat and little lazy in their training habits and fighting tactics. Knocking homeowner, after homeowner out in foreclosure. Winning fight after fight.

Their cocking and arrogance have put them in a bad position. This is just plain stupid because the banks have made many mistakes in the laws which they tend to manipulate with their major contributions of campaign money.

For more infor about loan modification you can read: http://www.hud.gov/offices/hsg/sfh/nsc/faqlm.cfm

Home mortgage refinancing in 2009 with the latest FHA rules

The economic recession has shaken the entire world and many industries have been adversely affected due to it. There are many struggling homeowners who are facing a hard time in making their mortgage payments on time. Just to avoid any kind of default in their mortgage payments or a possible foreclosure, these people are trying every possible means to get their loan modified by their lender or the mortgage bank. Refinancing of mortgage means that you will be able to make temporary or permanent changes on the terms of the loan. This will allow you lower monthly payments so that it can nicely fit into your monthly budget. You will have to talk to the bank and explain your present financial situation. Be true to your lenders and explain the reasons why you want the mortgage loan to be modified or refinanced. Depending upon your individual situation, banks will offer you several options, but you have to negotiate with them for new terms that will work in your favor. If you are not able to convince your lender, they will not make any changes on your existing loan terms.

If you are considering a loan modification program, these are the salient features:

If your mortgage loan is having a convertible adjustable rate, it will be changed to a fixed rate.

You will get a lower principal balance to pay off.

Any missed payments in the past will be forgiven in the loan modification program.

Any late fees on the loan amount will be waived off.

Before you get your mortgage loan refinanced, make sure that you are aware of the guidelines set by the bank. You need to follow these guidelines properly so that you can meet the lender’s requirements and you don’t face any problems in getting the loan refinanced. Make sure that you collect all information about the agency to avoid any kind of possible confusions.

FHA means federal housing administration home mortgage refinancing which is available to those people who have a very low income and does not exceed from average income. FHA loans are available to help those homeowners who have a very low credit score and face a lot of difficulties in qualifying for the mortgage. Refinancing can result in lowering the monthly principal and the interest payments for the borrower’s so that they are able to make the mortgage payments easily under new terms.

If you are looking for mortgage refinancing, see the latest FHA rules for a fair understanding:

• Borrowers can refinance their home with 5 percent down or less and make a payment to the lenders.
• Conventional loan limit for single-family can be now equal to 87 percent of the limit to the borrowers. These new terms make FHA loans more competitive, especially to those who are in financial crisis.
• Budget can be revised to meet the requirements of FHA program. Borrower's have to make a minimum FHA down payment that minimize the costs for prepaid expenses, repairs, improvements, etc.
• Finally, calculate the loan amount and select the maximum amount that could be borrowed under the guidelines.

Debt solution tips for people in overwhelming debts

Being in debts can cause a tremendous hazard to your financial situation. The moment you realize that it’s getting unmanageable to control your debt relation problems, its time to call it off. Take an example of a water tank when you are trying to pour water in it. You will have to stop pouring water when it’s full. And if you try to pour more water, it’s going to fall down. Meaning, you should always be aware of your debt situation and know where to put a stop when you need to.

Debt has caused a lot of upheaval in nations that are struck by the disease. When the majority of the population is suffering from this disease, there will be increasing number of criminal activities and the financial situation of that country is also going to get affected adversely. In such a situation, relief is required to bring stability and security amongst people. Simple answer to all such problems is finding immediate debt solutions.

There are several debt solution plans that are now floating in the market. Bankruptcy is one of the oldest schemes. It is both a flexible and rigid program. People who are struck in overwhelming debts and have no way of coming out of it can consider bankruptcy as a viable solution. Either you can get all your debts discharged or you will be provided with re-structured, lesser rate of payment.

Debt consolidation is the most popularly claimed debt solution plan. This is a kind of program where the interest rate is negotiated with the creditors agreeing to pay the full principal amount. If you can afford the monthly payment plan in the debt consolidation program, you should consider this as one of the best solutions. In case, you are not able to afford the monthly payment plan set in the debt consolidation program, then you look into the other debt solution program called the debt negotiation or the debt settlement plan. In this program, negotiations are done with the creditors to knock down the total outstanding balance to something less than half so that it can be paid off in lower monthly payments.

If you are fighting through your debt situation, consult a financial expert who can advise you with a best suitable option after analyzing your present financial situation. He will work out a plan with your creditors and this will be your first step towards a debt free life.