During 1997 through 2006, mortgage lenders created a variety of no money down type programs and “loan to own” mortgages which eliminated the strict requirements previously needed to get a mortgage. Individuals did not have to prove their ability to repay the mortgage or have sizeable downpayments during this period, and lenders like Bank of America, Wells Fargo and Citigroup lent millions of mortgages to people they knew had little chance of fully repaying them.

The original mortgage lending practices are returning, where borrowers are required to come up with a 20% minimum down payment to qualify. To contract the difference, in 2006 the average home down payment was 4% of the purchase price, while in 2010, across nine major United States cities the median down payment was 22%.

Lower down payments make it possible for more homeowners to get into homes, but it leaves them with costly mortgages they can’t afford and results in high numbers of foreclosures. Even individuals who have managed to avoid foreclosures through mortgage refinancing programs offered recently are experiencing long term financial distress – since they owe so much more than their homes are worth in today’s market.

If borrowers can’t come up with 20% or more for a down payment, they can look at loans backed by the Federal Housing Administration (FHA). Currently, these loans require 3.5% at closing, but come with private mortgage insurance expenses and higher than average interest payments. While it offers the opportunity to get into a home, the monthly payments will be higher.

Resource:

http://www.housingpredictor.com/2011/banks-want-more-money.html

Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), Citigroup (NYSE: C) Penalties Likely to End “No Money Down” Programs was created by and is property of American Consumer News.

Citigroup mortgage customers are still facing foreclosures due to the inability to make monthly mortgage payments. This is largely due to the unemployment rates that have affected a family’s ability to keep steady income. Even when modifications are in place, homeowners still can’t keep up with payments regularly. This results in customers having their Make Home Affordable modifications cancelled.

Now Citigroup is offering additional options for those homeowners that can not meet the requirements as set up by Obama’s Make Home Affordable program. Additional modification programs are being created in-house to help homeowners. Throughout the month of August, more than 35,000 borrowers were given access to the alternative modification programs offered through Citigroup.

Other homeowners who are still in need of assistance with their mortgage payments are finding relief through another program called the Home Affordable Unemployment Program. This program is set to helping people who are without a job. The program helps initiate a forbearance status on mortgage payments until the time they can make other modification arrangements when they secure a steady income source.

Homeowners who have loans with Citigroup are encouraged to contact the bank as soon as they realize they will have trouble meeting mortgage payment obligations to see what options can be afforded before the mortgage loan goes into default and foreclosure status.

Citigroup (NYSE: C) Goes Outside HAMP to Offer Loan Modifications was created by and is property of American Consumer News.

The employee speaking out now works for a real estate agent. Part of her responsibilities relates to short sales for homeowners who have loans through Bank of America. The woman spoke only on the condition of anonymity for fear the lender would seek retribution through her current clients.

The former employee worked at Bank of America as part of their call center staff. She was instructed to follow a phone script which involved congratulating customers on their loan modification approval and then set up a notary to deliver paperwork to the homeowners. The woman now says she feels like the actions were not being offered as a convenience to customers but in an effort to pressure homeowners into making decisions they were not ready to make about a home loan modification.

The employee, who is bilingual, feels the worst of the pressure fell on Spanish-speaking customers who did not understand the documents they were signing because they were all written in English. The employees at the call center did not have access to the documents homeowners were receiving and therefore could not help explain what was going on. The former employee did state she did advise customers to seek outside legal advice but admits she was told by her employers not to do so. She was later fired for taking a photo on bank property.

Bank of America has addressed pressuring of homeowners’ claims by issuing the following statement: “Bank of America has a long standing tradition of providing the Hispanic community with Spanish language assistance for their home loan needs. We are always looking for opportunities to improve our communication and we will review the final permanent modification process to provide our Spanish-speaking homeowners with additional support where needed.”

Bank of America (NYSE: BAC) Reevaluating Loan Modification for Hispanic Customers was created by and is property of American Consumer News.

The Home Affordable Modification program fell short of its initial expectation. The program was created to help three million homeowners who could no longer afford mortgage payments. However, more than half of the 1.3 million applicants of the Home Affordable Program were dropped from the program because they were not eligible for the assistance. In order to qualify for a permanent modification on a mortgage loan, a borrower must participate in a trial modification which requires three consecutive mortgage payments and the completion of the necessary documents.

Rebecca Mairone, default servicing executive at Bank of America Home Loans stated “Our HAMP results in recent months show a reduced number of customers starting new trial modifications, due mainly to the implementation of a full-documentation requirement. As a result, we are seeing a smaller increase in completed HAMP modifications month-over-month at this time.”

When a homeowner is not eligible for the government’s help, the bank looks for alternative foreclosure prevention initiatives. Bank of America offers homeowners second-look modifications for those who do not qualify for HAMP but who are still able to prove their ability and intent to make mortgage payments if they were more affordable.

Bank of America has also developed a streamlined cooperative short sale options who do not qualify for any home mortgage modification plan. In some circumstances, Bank of America may provide a cash allowance to assist a homeowner with transitional expenses, including the costs of moving and rental deposits in exchange for the deed to the property

Bank of America (NYSE:BAC) Head Above the Rest for Home Modifications was created by and is property of American Consumer News.

DFS claims they invested almost $2 million of its own funds in preparation for providing services to the foreclosed properties on Bank of America’s list. The lawsuit also outlines the damage to the DFS reputation when the bank provided them with incorrect information to enter homes said to be in foreclosure but were actually properties that had been resold and currently occupied by the new owners. The bank is said to have pointed the finger at DFS for the mistakes and in turn, stopped future work orders with the company. DFS had to lay off most of its staff, including more than 300 field workers. Diversified Field Solutions has been devastated by the profit loss and Bank of America’s failure to follow through with its obligations.

“At all times DFS acted in good faith to meet its contractual obligations with BAC in a timely and professional manner,” said Senior Vice President of DFS Taymor Niazi. “Banks are required by law to prevent foreclosed homes from becoming blights to their communities. They hire small companies like ours to do the actual work needed to comply with this requirement. But in doing so, BAC has ignored the terms of its own contract to the detriment of our business and workers.”

The lawsuit was filed Monday in California by DFS lawyers Burkhalter Kessler Goodman & George. In a press release Eric Goodman, a partner with BKGG stated “Homeowners are not the only victims of this crisis; it extends to firms like DFS and onward to the mom-and-pop businesses who actually mow the lawns and clean the countless homes that now sit empty.”

Bank of America (NYSE: BAC) Sued Over Foreclosure Work was created by and is property of American Consumer News.

The Making Home Affordable program was developed to help the large amount of homeowners who were suddenly unable to meet the demands of their monthly mortgage due to the flailing economy, the high rates of unemployments, or the downfall of the mortgage industry. While Citigroup may be finding success, overall there are still many issues causing homeowners to still worry about their mortgage loan. With the rates of unemployment and the amount of people who are upside down on their home loans due to the real estate market, the Obama administration is looking to expand their mortgage assistance options.

New programs are set to be used over the next few months by a collection of lenders. Two such programs include assistance for principal reductions of mortgages and an underwater forbearance program. As homeowners are still struggling to make their monthly mortgage payments, there are some lenders who are not very keen on the new plans. Specifically many take issue with principal reductions. These lenders however are likely to offer programs in-house to help customers who can’t pay their mortgage bill each month.

One group that has used a principle reduction program is Citigroup. The company plans to continue with the program and providing their customers with solutions for assistance when they do not qualify for the Making Home Affordable program. Customers are continually seeking solutions that are quick and effective at solving their mortgage payment problems.

For homeowners who are looking for help, experts advise that consumers speak directly with their lender and inquire about the available programs. Many lenders are using a variation of different programs to help customers but not all homeowners will be eligible for each program. Homeowners are also advised to act quickly before falling behind on their debt, otherwise assistance may not be available down the road or the homeowner may not be eligible to receive help if too much time has passed.

Citigroup (NYSE: C) Successful in Modification Program was created by and is property of American Consumer News.

The intent of the quarterly report is to provide greater transparency into the company’s lending practices. Bank of America supports the United States economy in 10 areas of economic recovery – from home loan modification solutions to small business loans to financing of Community Development Financial Institutions.

Brian T. Moynihan, president and chief executive officer of Bank of America feels the economic recovery is fully underway,

Bank of America contributed to this recovery in the first quarter by extending almost $150 billion in credit across both the consumer and commercial sectors, driving economic activity in the U.S. significantly. We are also vigorously modifying home loans and credit card balances for consumer and business customers in addition to eliminating debit card overdraft fees – steps that are necessary to help customers overcome financial challenges and succeed in this economy.

Home Lending and Neighborhood Preservation

Bank of America assisted more than 323,000 people buy a home or refinance an existing mortgage by extending nearly $70 billion in first mortgages. Close to $17 billion of this money was used to provide low and moderate income families money to buy homes.

In addition, Bank of America helped over 560,000 families with a permanent mortgage modification loan since 2008, with 77,000 of the loan modifications taking place in the first quarter of 2010. Furthering their focus on home lending and neighborhood preservation, Bank of America was the first company to join and extend offers to new customers through the government’s Second Lien Modification Program. They created a new program with a strategy for earning principal forgiveness on certain types of mortgages to enable more families to avoid foreclosure and stay in their homes.

Small Business Commitment

In an effort to help stimulate economic activity and support small business growth, during the first quarter, Bank of America extended $3.4 billion in new credit to small businesses. Existing small business credit card owners received an interest rate freeze, helping them make their payments easier.

The full Lending and Investing Initiative Report, which provides detailed summaries of Bank of America’s progress in key growth sectors and other areas, can be accessed at bankofamerica.com/ahead.

Bank of America’s (NYSE: BAC) Lending and Investing Initiative Report Shows Almost $150 Billion Credit Lent in the First Quarter was created by and is property of American Consumer News.

This program has been delayed for months, but once Citigroup (NYSE: C) came on board with the plan to reduce second mortgages for troubled borrowers, Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM) followed.
With nearly one in three homeowners currently underwater on their mortgages (according to Moody’s Economy.com), this program is long overdue, many critics believe. Home foreclosures have increased despite the Obama administration’s effort to prevent them. Previous attempts to reduce the number of foreclosures is a problem plagued by more than 100 different mortgage companies. The existing efforts saw 1.1 million homeowners applying for modification programs and assistance to keep their homes, but only 170,000 homeowners have been able to complete the process.

“We remain dubious about government mortgage modification efforts,” wrote Jaret Seiberg, an analyst with Concept Capital’s Washington Research Group. “So far none have lived up to expectations and we see little reason to believe the latest effort will turn out any different.”

This new mortgage loan forgiveness plan under the Obama Administration requires the mortgage companies participating to slash the amount of principal the borrowers owe, or eliminating second mortgages like home equity loans that have blocked many loan modification options for borrowers previously – in exchange for incentive payments from the government. Now that the big four players in the mortgage industry are on board, Citigroup, Bank of America, Wells Fargo and JPMorgan Chase – many people have greater hope for it’s success.

Citigroup (NYSE: C), Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM) Join the Obama Administration to Reduce Second Mortgage Balances was created by and is property of American Consumer News.

Bank of America had ordered Snyder Property Services to ‘enter, seize, padlock’, ‘winterize’, and ‘take possession’ of the woman’s home because they believed it to be in default. The property service followed instructions and turned off the water, cut the power, and filled the drains with antifreeze. After the home was taken care of, the woman’s parrot was then taken from the home.

The woman, Angela Iannelli of Pittsburgh, arrived back at her home and found new locks on the doors, furniture and carpets that had been damaged, and her belongings strewn about. Most devastating, the parrot was gone. The plaintiff had been making her mortgage payments on time but contacted Bank of American, who did confirm the seizure of the home. They also admitted to knowing where the bird was located. The plaintiff states in her lawsuit that she continued to call to claim her bird but Bank of American told her to stop calling and hung up on her because they were ‘tired of hearing from her’.

It took a week before Bank of American would confess to making a mistake about seizing the wrong house. They also admitted the location of the bird, a three hour drive away which the plaintiff made to get the bird back.

In the lawsuit, the woman alleges that Bank of America was knowingly deceptive and does not have policies to prove foreclosure validity or to stop a wrong seizure from occurring. The plaintiff said that Bank of America did try to make offers to repair her damaged belongings once she obtained the services of a lawyer. Spokespeople for Bank of America declined to comment on the Allegheny County lawsuit.

This isn’t the first time Bank of America has foreclosed on the wrong house. There are several other lawsuits in other cities that allege improper foreclosures. In one such case, the contractor hired by Bank of America had the wrong address. In most other cases, the foreclosure mistakes were seemingly avoidable.

Bank of America Hijacks Parrot, Forecloses Wrong House was created by and is property of American Consumer News.

Falling home prices have lead to homes being sold for less than what is still owned. Homeowners who have lost their jobs or their ability to pay back mortgage loans often sell quickly through a short sale for less than what is owed out of desperation. Those who find themselves in foreclosure may think they are better off than sellers because the debt has been relieved only to find out later there is a delinquency judgment against them for a remaining balance after the home has been resold for less. Oftentimes, the thousands of dollars in delinquencies are more than an individual can financially bear, forcing them to file for bankruptcy.

Will It Happen to You?
You may still be responsible for the costs of your foreclosed home but it will depend on a number of factors. First, it matters what state you live in. To date, 30 states can pursue deficiency judgments including in Florida, Texas, and New York. California is one of the state that do not allow such judgments. It will also be influenced by your other mortgages or property liens. However, once a judgment is rendered, your financial life can be heavily investigated. You may be required to turn over all of your financial records, have money garnished from your pay, and you can even wind up in jail per a judge’s orders. If you are looking to do a short sale on your home before it goes into foreclosure, seek the assistance of a real estate attorney to ensure you are protected from future financial obligation.

What Happens If You Are Delinquent?
Some lenders will not pursue you immediately. They may monitor your financial situation until they know you are again stable before pursuing the debt with interest. Depending on your state, a lender may have between 5-20 years to collect on a debt. In other cases, many banks and lenders quickly turn over the account to a third party, who may be an aggressive debt collector ready to pursue the debt at all costs. Experts caution sellers to pay close attention to what documents they are signing for the sale and be sure there are no agreements included that state the seller is still liable for remaining debts. Since many people follow the orders of a realtor without asking questions, they have ended up implicating themselves with a single signature.

With foreclosures and judgments coming fast and furious, it is advisable that consumers seek legal assistance before making a move to sell or when dealing with a foreclosure. By checking the laws in your own state, you may be able to prevent a delinquency judgment on your home now and in the future.

Lose Your Home To Foreclosure? You Might Still Get A Bill was created by and is property of American Consumer News.

Some of the changes will include:

Increase in Premiums

The up-front mortgage premium will be increased from 1.75% to 2.25%.  There will also be a inquiry to Congress to continue with rate hikes moving forward, which is currently averaging at .5% monthly.

Better Credit Scores

The changes will require that borrowers have credit scores of at least 580 in order to qualify for the down payment program of 3.5%. Lower credit scores will warrant a down payment amount of at least 10%.

Closing Cost Assistance

New policies will limit the amount of closing costs sellers can give to buyers. It used to be up to 6% of the price of the home but new policies will drop it down to 3%.

Limiting FHA Mortgages

The agency also plans to monitor the performance and compliance of lenders offering FHA mortgages. They require mortgage companies who issue FHA loans to assume liability for loans they underwrite and originate.

Since FHA mortgages are one of the few options for many consumers to buy a home, their popularity is not expected to decrease so the agency feels that these measure will offer some protection against another outbreak of defaults. It is estimated that upwards of 50% of all first-time homebuyers use the FHA loans to buy their home in 2009 with  total of more than $360 billion in single-family mortgages, which is four times the amount the FHA backed just two years prior.

The FHA hopes the new policies will help balance out the situation and allow them to still serve communities and the nation’s economic recovery process. The FHA will still be one of the largest ressources for home-financing for many communities even after the belt-tightening measures.

If Your Looking To Buy

Since many consumers are looking to take advantage of the homebuyer tax credit, experts recommend shoring up a low credit score and working to pay off debts before applying for a home loan. A better credit score affords more options for interest rates and loan terms. Saving for a down payment should also be a priority before shopping for a home. Most all lenders now demand high credit scores and more downpayment money than ever before to ensure the best rates and prevent the risk of defaults that have been so prevelant in the last year.

Stricter Guidelines Being Announced for FHA Mortgages was created by and is property of American Consumer News.

During the housing bubble, many people bought up houses at ridiculously low prices. They would then turn around and sell these homes for much more than they originally paid. Once the bubble burst, people that had bought up these homes were stuck with them. No one wanted to buy a home in a time where their prices were steadily declining. On top of all of this, many banks had loaned to these “bubble-buyers”, and once the bubble was gone, the buyers were unable to pay back their loans. Because of this, many banks are hesitant to loan to prospective home buyers in these tough times.

For those of you that are still in the market to buy a home, it is possible to get amazing deals as long as you look hard enough and do the right research. Most people think the best type of home to buy is a foreclosure property, but this is a common misconception. Many buyers came in to new developments and bought up the new homes, and then could not find a tenant. Because of this, there are many brand new homes sitting empty, ready to be moved in to for low prices.

Research New Homes First
Because many of these homes have been sitting for a long period of time, their owners are desperate to unload them quickly. This means that their price could be the same or less than many of the foreclosed houses on the market.

Find Long-Time Listed Homes
If a home has been on the market for a long period of time, usually more than 90 days, their owner will probably be more likely to make a deal on the property. If this is the case, bid lower than is originally listed.

Look Into New Developments
Certain places have new developments sprouting up everywhere. Many of these developments had been in the works for a long time, way before the bubble burst. Now that the homes are built, they need people to move in. Some of these places may still be unreasonable, but if you look hard enough you may find a great deal.

While these economic times can be scary, if you use them to your advantage, you could find a great deal on a new place to live. Be careful, do research, and be smart about anything you sign.

New Homes: A Better Deal than Foreclosures? was created by and is property of American Consumer News.

The Buy Down Incentive
For many years, private home builders and sellers have been willing and able to pay an extra fee that “buys down” the interest rate on a mortgage loan. The fee is paid upfront as is calculated in points, each point equal to 1% of the loan’s amount. When a builder/seller pays for each point, the interest rate on the loan is reduced. Partial points can also be used. The buy down incentives are used to entice home buyers into buying one of their homes specifically and it often works because the loan rate is so good.

Buy downs work in different ways. Some will only allow the interest rate reduction to be good for a specified period of time, say one to three years of the loan. If that is the case, the regular interest rate of the loan will return to a fixed rate for the life of the loan. There are builders and sellers that will offer a buy down incentive for the full 30 year term of the loan, which equals big savings for the homeowner over the life of the loan.

The buy down incentive is also good for new home buyers to qualify for the loan. Since the monthly payments are lowered, it improves the debt to income ratio for the loan applicant. However, qualifying for the loan in the first place is not so easy. Only those consumers with excellent credit scores and a sizable down payment will usually fit the build and be approved for the loan.

Where To Find the Incentives
If you are looking for a home, it is the new home builders you should turn to to find out about the buy down loan incentives. Especially since the new home market has been in decline in light of the current economy, there may be more opportunities for lower interest loans. Builders have an excess of inventory they would like to see sold soon so it is likely they will continue with inexpensive loans that offer the buyer considerable savings over a 30 year loan period.

There is a good chance that a new development is in your area and it should be the first stop on your search for a new home. Ask what kind of deal you can get in each development you visit. Remember that not all builders offer a buy down incentive so find one that does and one that offers the buy down incentive for the full life of the loan. Also keep in mind that these incentives are not always offered in all states and some dedicated research may be required on your part. If you live in an area where there is a large volume of home developments, consider visiting the larger builders first. Many times they will have their own mortgage company in-house and will require a buyer to obtain a loan through them. This gives the builder/lender a bit more flexibility in the negotiation of incentives. Remember to look at the total package you are getting as well as the amount of savings. You want a house you can afford but also a home that you will enjoy.

Qualified for a Interest Rate Buy-Down? Take Advantage and Save was created by and is property of American Consumer News.

They have options that can help fit your situation. Your job is to contact several of these institutions and find a loan that will fit your circumstances.  Do not forget to check your local credit union as well.  Banks and credit unions will offer you the best rates available.

Mortgage brokers. Just as an independent insurance agent offers policies from several different companies, a mortgage broker operates on the same principle.  They have many more options and loan products from which you can choose.  Basically, you will pay higher fees with a mortgage banker because that is the way they make their money in the form of origination fees and servicing fees.

These types of lenders have no large bank which backs the loans that they process, so they must use backing outside of their company.  You will find these in the federally guaranteed mortgages of a Fannie Mae or Freddie Mac type.  Most often, once the mortgage has been closed, you will find them selling the mortgage to another bank.  This is merely a transfer and does not change the terms of the mortgage itself.

Determining which one is right for you is not a cut and dried decision.  It is a process that depends in part on your comfort level in dealing with these institutions.  Many times, a real estate agency can make recommendations that are neutral and reliable, because of the number of real estate deals that they see.  They are not immune to the good and bad that goes on in the mortgage funding business.  If you take your time and ask around, you can find a good source of money for your home loan in your community.

Mortgage Banker or Bank for Your Home Loan? was created by and is property of American Consumer News.

Credit Scores of Old
A credit score of 720 used to be considered excellent to lenders but this is no longer the case. Many mortgage companies want to see a 740 or higher to feel confident in lending. As a result of the 2008 situation, most lenders have tightened their belts and have issue stiffer requirements than ever before. So it will be highly important you know where you stand credit-wise. Order your copy of your credit report today and find out what your score it. If it falls short of the 740 mark, start working towards paying down your debt and decreasing your debt to income ratio. Analyze your credit report for errors and report them immediately to the credit bureau. If the credit bureau can not ascertain that the mistake is legitimate, the correction could help to improve your score rather quickly.

Proof of Income
Not long ago, those applying for mortgages would go through the extensive application process and think there couldn’t possibly be any more paperwork to complete. However, now that lenders have upped the anty, applicants are required to do even more extensive work. For instance, it used to be good enough to state your income on the application. Now most lenders will also require solid proof of how much money you make. Applicants looking to breeze through a no-documentation loan may want to reconsider their option because loans with little or no documentation are very rare. Before applying with a lender, make sure you have copies of all your tax returns in recent years as well as copies of your pay stubs put in order. The last thing you want to have to do is scurry around looking for missing paperwork.

Other Records
In addition to your income, expect to provide other documentation during the application process. As your clear through 2008 documents for your upcoming taxes, you should keep a separate file to collect your bank statements, monthly bills you are paying on, and other relevant documents. If your debt to income ration is high, the lender may require some additional convincing.

Saving the Cash
As you pour over your finances and necessary documentation, you should also start putting away as much cash as possible for your down payment. Because improving your credit and getting your financial records in order takes time, you can focus on the renewed importance of saving as much as possible to get the house you’ve been dreaming about without too much hassle.

Tips for Getting a Mortgage in 2009 was created by and is property of American Consumer News.

Here is a list of 5 money lessons to remember about your personal finances.

1. Automobiles

Buy a used automobile and plan to drive it for ten years to save yourself thousands of dollars, compared to what you would spend buying new. If you must buy new, make sure you are prepared to put down at least 20% down on the vehicle you want and only agree to a monthly payment that is less than 10% of your income. Never finance your new car for longer than four years in order to keep your spending under control.

2. Student Loans

Students may not always know what they will be after graduation but many of them will at least have an idea of what field they would like to enter once out of school. A good rule of thumb for student loan borrowing is to borrow only around the amount you can expect to earn during your first year of work. Planning for college should include planning to prevent debt. Lenders will be happy to let you borrow a lot of money but you need to see the reality of how much and how long it will take to pay back a student loan.

3. Home Mortgages

If you plan to buy a home, you need to figure out if you can afford to purchase the home at a 30 year fixed interest rate. If you can not, you simply can not afford the house. Especially now, in light of the multitude of foreclosures around the country, it is much more financial sound to use the 30 year fixed term than to deal with alternative types of mortgages such as interest-only loans.

4. Emergency Funds

Your ideal number for an emergency fund should equal about three month’s worth of your total living expenses. This emergency fund money can be used in the event of a lost job or other crisis. Until you are able to sock away that amount of cash to have on hand, you should keep room on a credit card or other line of credit in the event something unexpected should happen until you are able to save up the amount of money equal to your three month’s income.

5. Positioning Your Money

Everyone always wants to know how to divide their financial priorities. It seems the order of importance is retirement funds, paying off credit cards, followed by emergency savings fund. Planning for your future should be your top financial priority and the earlier you begin saving the better off you will be. Repaying your credit card debt should be the second most important priority, especially when interest rates are so high and your debt is affecting the rest of your finances. Lastly, your emergency fund should continue to grow in the event something happens without warning, such as health problems, job loss, or even home repairs.

Serious debt can be overwhelming, that’s why you need to seek professional debt advice to get yourself back on your feet as soon as possible. There are various debt solutions available, like an IVA, debt consolidation, bankruptcy or debt management. Get debt help now to find out which one is right for you and start getting out of debt now!

5 Quick Money Lessons to Learn Now was created by and is property of American Consumer News.

For several months a lot of the major mortgage lenders stopped providing some of the worst offenders in the sub-prime mortgage loan market. Very few companies were offering option payment loans, 50 year mortgages, and interest only loans with a massive balloon payment at the end of the term. It seemed that the mortgage market had returned to sound statistics and reasoning as to whether or not to originate a loan, but as the real estate market decline very few people were buying homes and thus very few people were taking out mortgages. The volume of mortgages that the real estate industry has seen has shrunk dramatically, leading some mortgage companies to desperate measures to originate new loans.

Many of the mortgage companies which were hit the hardest by the collapse of the sub-prime lending market are now offering the same types of loans which got them into that mess in the first place because they’re so desperate to generate any type of new mortgages they can. Countrywide Home Loans is sending out mailers with offers for a $511,000 jumbo mortgage to refinance or remortgage your home. According to the LA Times, aI I number of other mortgage companies are sending out flyers for option payment loans, which are loans in which the customer is not even required to pay off the interest each year! If you’re in brittian, consider a buy to let mortgage.

Just because these loans are becoming available again does not mean you have any business taking them out. You might get initially a low payment for the first few months, but after that the rate will adjust upward and you’ll be paying much more in the long run. Stick to a conventional 15 or 30 year fixed mortgage, pay your payments each month, and you won’t have any surprises along the way.

Lenders Still Making the Same Mistakes Which Caused the Sub-Prime Mortgage Mess was created by and is property of American Consumer News.

Check and Correct Errors on Your Credit Report – Most studies show that 1 out of every 3 Americans have mistakes on their credit reports that are significant enough to cause us to not qualify for the best interest rates available to us. Head on over to AnnualCreditReport.com and check your three credit reports for free to make sure everything on them is accurate and correct! If there are any errors, dispute them and get them corrected.

Reduce Your Consumer Debt – If you have credit cards or other consumer debt, pay down on them! This will lower your debt utilization ratio and improve your overall credit score.

Don’t Open New Accounts – Six months before you apply for a mortgage, don’t sign up for any new credit cards or other accounts. Credit inquiries and opening new accounts will lower your credit score by anywhere from 10 to 50 points.

Pay Your Bills On Time – It seems simple, yet many people don’t keep good track of their finances and make a payment late every once and a while. Even a few late payments will significantly lower your credit score and prevent you from qualifying for an optimal mortgage. Make sure to pay each payment early or on time each and every month!

Don’t Close Paid Off Accounts – A common misconception about credit scores is that if you pay off an account and close it, your credit score will go up. People think that if they have large credit lines with no balance that the bank will think they could potentially just go out and borrow a bunch of money and be in a much worse situation. It would make sense that having a bunch of credit available to you would damage your score, but quite the opposite is true. If you have a large amount of credit available to you, but don’t use it, you will have a much lower debt utilization ratio and have a higher score.

Don’t think that you’re stuck with whatever mobile home loans the bank will offer you now. Take active steps to improve your credit score so that you can get a better loan from the bank.

Looking to Buy a Home? 5 Tips to Improve Your Credit Score to Get a Better Mortgage was created by and is property of American Consumer News.

The US House recently voted to enact the “Mortgage Reform and Anti-Predatory Lending” act which would do a number of things to make sure that consumers know what they’re getting into when they take out a mortgage and ensure that they can only take out loans that they can reasonably afford to pay back.

The bi-partisan legislation passed on a 291-127 vote and would establish a federal licensing and registration system for mortgage lenders. In addition it would establish a new department in HUD called the office of “Housing Counseling” which would assist consumers in avoiding a foreclosure. The legislation would also make it illegal for banks to give loans to consumers that there’s no reasonable way for the consumer to repay and prevent lenders from pushing predatory loans on to consumers. The legislation will now move onto the senate and then the desk of the president.

Banks and other mortgage lenders have been fighting tooth and nail to prevent this legislation from being passed. They have absolutely refused to work with congress in coming up with some sort of reasonable compromise and have nothing to say on the legislation but “No Way, No How!” Major banks’ lobbies spent several weeks trying to derail the legislation while it was in committee and are now trying to prevent it from passing in the US Senate.

These large financial institutions have shown that they have not policed themselves properly. Banks which lend mortgages to people believe they have no responsibility to sell you the product that makes the most financial sense, but rather the one that makes them the most money. They have put people into mortgages which they simply cannot afford to repay by qualifying them on low teaser rates rather than what they would actually be repaying over the long haul.

Banks hate this legislation because they do not want to have what’s called as “fiduciary responsibility” to their customers, meaning that they would have to give them the product which is the best deal for the consumer, not the banks pocketbook. They’re also opposed to the bill because it would make it so that people had to qualify based on the actual payment, not the teaser rate. Mortgage companies are unhappy with the legislation because it would require them to spell out in plain English what the true cost of the mortgage is on a monthly basis as well as the costs and fees of the loan to the consumer.

By working against this legislation, banks are showing that they have little concern as to what’s in the best interest of the consumer and are rather only concerned about increasing the number of mortgages they originate and their short term quarterly profits.

Major Banks At it Again, Fighting Against “Truth in Mortgage Lending” Legislation Which Would Decrease Foreclosures! was created by and is property of American Consumer News.

For the last five years or so, many of the nation’s major banks and financial institutions have been originating all sorts of non-traditional mortgages such as interest only loans, adjustable rate mortgages, mortgages with balloons, fifty year mortgages, and a whole slew of other financial products that no consumer should ever buy. Unsurprisingly, many consumers could not continue to afford their mortgages as they adjusted upward and the home-buying market is very weak right now, leading to all sorts of delinquencies and foreclosures and now it’s starting to catch up with Bank of America and E*Trade.

All sorts of rumors are flying about a potential bankruptcy over at E*Trade. Said rumors actually dropped their stock price by 60% after the news hit. After news of a potential buyout or takeover hit, it rebounded slightly. Unfortunately there are 60,000 individuals who will be out of luck if E*Trade were to file bankruptcy. These people have more than $100,000 invested into FDIC insured accounts through E*Trade and would be out of a lot of money if the company were to go bankrupt. If you fit into this category, drop your savings inside of E*Trade to less than $100,000, that way you won’t lose your money if the bank goes under.

The exotic mortgages that Bank of America were giving out are starting to catch up with them as well. The financial institution had to provide $600 million dollars to avoid having the share-price of their money market funds dip below $1.00. Traditionally money markets are designed to keep at exactly a price of $1.00 per share, and it’s considered very bad if the price ever drops below that. Bank of America had used money from their investors in money market funds and invested that money by loaning it out to people in all sorts of exotic mortgages. When the real estate market collapsed in on itself, the price was dangerously close to “breaking the buck.” BOA did the smart thing to replenish its money market fund, because if the share price had dropped below $1.00, most investors most likely would have taken their money elsewhere.

Banks made a major mistake by offering mortgages to people who cannot afford to pay them back. One of the major financial magazine’s covers this week features a number of major bank presidents and the headline, “What Were They Smoking?” in regards to the sub-prime mortgage mess. Chances are we will see other banks hit hard times because of woes in the real estate market. Make sure that your money is at a solid and performing bank and that you do not have more than $100,000 at any particular financial institution.

E*Trade and Bank of America Get What’s Coming to Them for Offering Exotic Mortgages was created by and is property of American Consumer News.