Archive for the 'Consumer Loans' Category

How Can You Create an Effective Hardship Letter for Loan Modification?

Loan modifications could be requested by you, once you are experiencing problems in repaying your loans for whatever reasons. The hardship letters for home modifications are given to the creditors having the content of explanations why you are experiencing difficulties and include a request to give you ways to ease your present situation.

This hardship letter is one of the important requirements for loan modification process. Your attorney will be asking you to have one to be included to your necessary financial documents. The attorney will then try to evaluate your current situation as well as the factors that cause the hardship and present to your creditor in behalf of you.

While you are writing the hardship letter, always remember that lenders will find the reasons of your delay and why you are not able to pay your monthly mortgage. So you need to be straightforward and honest so that the lender will consider your request.

You have to make your hardship letter for loan modification straight to the point. Most creditors do not like to spend more time in reading hardship letter, so if possible compose a 5-minute letter to read. Creating a single page letter is the best, because if you will go further, the lender might not read it all and can possibly skip the most important part of the letter. To do this, remove the unnecessary details and include only the important ones.

Start your letter stating the purpose why you are writing the hardship letter. Tell the creditor that you request them to modify your loan and give them the reason why. After that intro, you can write in the next few paragraphs the important details.

Make sure that you are creating a letter that explains the hardship that you are suffering and make sure that they are valid financial hardship. The valid hardships are natural disasters, unemployment, extensive medications, or divorce that caused you not able to pay for the mortgage.

Close your letter by informing the creditor again about the purpose and you only have this option to stop the foreclosure. Also make sure that you have all the intentions to pay the regular payments when your loan will be modified. Be humble and end the letter with gratitude and anticipation about doing business with them.

How Can I Avoid Foreclosure?

Foreclosure is the occasion that several people face when a change of economy occurs, radical adjustments in variable rates in interest happen, or when unemployment renders the homeowner not capable to maintain their payment of monthly mortgage. Luckily, there are some ways to possibly avoid foreclosure and lose your home.

If you do not want foreclosure to happen, you have to understand that attempts to make potential solutions must start with you. This means that you ought to assess your existing financial situation. After you have prepared all the documents properly, you have to be positive and get in touch with the bank or financing company having your mortgage. Banks seldom want to retrieve a house; the task entails a big deal of effort and time in filing paperwork and going through legal procedures associated with foreclosure.

There is an excellent opportunity that the owner of the mortgage will agree to make some kind of alternative arrangement, probably even refinancing of loan if you repaid already a considerable amount of the primary loan in regular manner. Finally, the financing bank still takes the money and will really make additional interest from your business.

If refinancing with the bank is not applicable, consider to look for another lending institution before any repossession efforts will occur. While your present conditions might have impaired your credit score somewhat, your present earnings and your former credit history are still there to show your good confidence.

Before you become depressed and consider that the option left is selling your property and repay the bank, you have to search for various mortgage and financing companies to help you. For sure you can find the lender that can provide you the repayment arrangement that suits well your new conditions and hence avoid foreclosure before they could even begin.

Avoid foreclosure and residing in your house is of great importance because it may probably save you great amount and also it will guarantee that you keep the capability to be qualified to future programs, with the presumption that there is improvement in your financial standing later on. Learning these strategies is the most important step in saving your treasured home.

How to Refinance Loan After Bankruptcy?

After declaring bankruptcy, you can still be capable to apply for refinance home. Although you have worse credit, there are still lenders that can help, even though they can not offer the finest terms accessible. By changing your present home loan to a totally new mortgage, you may obtain a lesser rate on interest, save money, and you can start upgrading your credit.

Here some important tips how to refinance loan after bankruptcy:

You have to set up a good credit – Regardless of the recent bankruptcy that you have declared, you can be able to start again. Try to pay your balance and pay on time. Try to save more money. Save money in the bank. Try your best to pay your bills regularly and existing mortgage and do your insolvency payment on schedule. This will help you greatly so that the lender will consent to refinance your mortgage. Make sure to pay all payments on time.

Ask the help of a bankruptcy lawyer – Get advice from him about your eligibility for refinancing. This depends greatly on the kind of bankruptcy you have filed, the type of your current mortgage, and the lender.

Make a research and get quotes definite to your condition – Spend some moments in doing your research about mortgage lenders and the rates they offer. Look at lenders that particularly specialize on refinancing after insolvency, like subprime lenders.

Choose the most suitable terms – You can be capable to obtain a superior rate depending in the kind of mortgage agreed to and the duration of the loan. Ask the lending source what type of mortgage is the most suitable for you.

Apply online – After choosing which lender you have to go and the kind of mortgage that suits best your needs, you have to complete the application online. Of course, you like to make it fast in order that you could avail of the low interest rate they offer. The interest rate may change and become higher if you hang around for a longer period. Set a schedule in closing the loan so can have sufficient time to have any final details to take care of. However, it will still allow you in closing the loan quickly.

Bad Credit Affects Jobs Not Just Mortgages and Home Loan Refinance

25 states are proposing 49 debatable bills to give restrictions to employers who are using the job applicant’s credit histories in the hiring process.

According to the National Conference of State Legislature’s analyst Heather Morton, the bills passed concerning credit standing and employment are the response of legislators to the effect of recession on employment. The Privacy Rights Clearinghouse director Beth Givens further added that the legislature’s bills result from the growing concern on fairness. Givens says that the decision to hire based on an applicant’s credit report is a value judgment that is somehow sending the message that the applicant is an irresponsible and careless person because of a poor credit standing. This is an unfair basis for employment especially for people of color says privacy and civil rights advocates.

In the state of California, the combination of foreclosures and a 12.4% rate of unemployment have negatively impacted the credit scores of its residents. This is according to Tony Mendoza, the state’s assembly member responsible for California’s bill. A credit report is an unfair basis for job acceptance, added Mendoza. Despite this fact, 60% of employers in the U.S still perform credit checks on their job applicants says the Society for Human Resource Management.

The top bureaus namely Experian and Trans-Union oppose the bills. They say that it is an employer’s prerogative to know if their applicant had been prudent in their previous employments. Trans-Union spokeswoman Colleen Tunney-Ryan further adds that the credit report can be used as a tool to assess the employer’s job applicants. The chairman of Credit.com Adam Levin says that job applicants must be prepared to answer any questions related to their credit when applying for a job.

Although the associate counsel for SHRM, Elizabeth Bille says that credit reports are mostly used in the latter part of the hiring process and for managerial positions, Nat Lippert, a research analyst of a labor union says otherwise. According to the analyst, more employers are using credit reports to hire people for low-paying jobs, the jobs that are sought for by workers of color. Credit report as a hiring tool should not be used because of its discriminatory impact added Lippert.

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Credit May Be Loosening Up, and Consumer Loans May Be Out There

There is no doubt that the credit supply still is tight, especially in mortgages, despite prodding by government officials to increase lending. So even if you are one of those peoople who may have less than stellar credit, you may be able to get some of the thing you want… Subprime borrowers got just 9%, or $44 billion, of all consumer loans in the fourth quarter, the latest period for which figures are available, according to Experian PLC and Oliver Wyman. That is down from 18% in 2007′s second quarter.

But some lenders are starting to take more chances on consumer loans. Many financial institutions that survived the credit crisis and resulting recession are desperate for earnings growth, but loans to businesses amount to less than 20% of all outstanding loans, said Frederick Cannon, co-director of research at investment bank Keefe, Bruyette & Woods Inc. Again, that being said, it still means that there are people that will not qualify for loans because of different circumstances.

So Can I get A Loan if I Have Bad Credit?

Depends….

Another strong lure: Fewer borrowers are falling behind on payments. Excluding mortgages, about 5.5% of consumer loans were at least 30 days past due at the end of the second quarter, down from the year-earlier 6%, according to Equifax Inc. and Moody’s Analytics.

Some lenders said they are willing to stretch because borrowers who take on credit in the early stages of an economic recovery often are less risky and thus more profitable than those who borrow later. Federal Reserve Bank of St. Louis economist Williams Emmons said some credit loosening is normal given the U.S. economy’s growth since the end of the recession.

Financial institutions also claim they are getting smarter about who deserves a loan.

If you are working on cleaning up your debt, and getting a better credit score… and years have passed since you have had your situation, then you may be in a position to qualify for a loan even if you have bad credit.