Mortgage Refinance During Hard Times

by Robert Melkonyan The term recession has been thrown around a lot lately and it seems every time we turn on the television we are hearing about people who are struggling to keep their jobs or their homes, and about shortages of food. This is a time when many people are looking at all of the things that they own and seeing how they can save and mortgage refinance seems like a great option because it can help you substantially reduce your monthly payment, giving you a bit more leeway where your finances are concerned. Mortgage Refinance Can Help Even if you are not currently having a hard time and you are just trying to prepare for the worst as you watch people around you losing their homes and their jobs, you may find that mortgage is an option for you. Through this process you have the ability not only to save money, but change the loan program that you are currently on so that your financial situation can be as stable as possible. When you look into mortgage refinance you may be looking to get the lowest monthly payment possible. Before jumping at the lowest option you need to consider how long you plan on living in your home. If you only plan on being there for a short period of time it may be worth looking into an adjustable-rate mortgage, because this will offer you the lowest interest rates and payments initially, but the interest rates and payments will rise considerably as time goes on. If you plan to be in the home for many, many years, it may be more beneficial to go with a fixed-rate loan. With a fixed-rate loan your interest rate will be a bit higher but you have the security of an interest rate that will not change over time, which will offer you more financial stability so you can plan for later on down the road. If you are already having a hard time paying your mortgage it is still worth looking into mortgage refinance and seeing what can be done to help you. Sometimes lowering your payment just a little bit each month is all you need to get back on top. You would be surprised to see how much you can lower your payment, if you just find the right loan program at the right time. You need to know what your plans are when refinancing so you can choose the right loan, but it’s worth the time and small amount of effort that goes into putting your feelers out there and seeing what you come up with in the way of more affordable mortgage options. Everyone hits hard times during their home ownership. Instead of simply shaking your head and throwing up your hands, see what you can do to keep your home. Mortgage refinance has helped a lot of people get through their hard times with their home still in their names. This may be just the thing that you have been looking for to give you that bit of stability that you need as you get through this time. Refinancing won’t provide a miracle, but it may be that little bit of help that you have been looking for that will allow all of the cards to fall into place so your finances become a bit more optimistic. Refinance.com is managed by a group of professionals in the Mortgage refinance field who are able to provide expert advice to help you refinance even during difficult situations, to learn more visit our site at http://www.refinance.com/ Article Source: BlissPublisher - Free Article Directory

Business Loans; Negotiation, Types And How To Secure Commercial Finance

by prettyone

Business loans come in all manner of different varieties including unsecured and secured. Secured loans are very much like a mortgage in the respect that it is secured against assets. Fundamentally this means that it is possible for the lender to repossess a property if the loan is not repaid. Unsecured loans do not have the same restraints although they typically have a higher rate of interest. Ultimately what the loan is secured against determines the level of risk when taking a loan. Hence it is essential that business owners conduct a great deal of research when obtaining business loans.

When utilising business loans the finance rarely has to be taken at face value, many lenders will be open to negotiation before the loan is granted. Typically a borrower will have to find common ground with the lender over the issues of interest rates and the overall term of the loan. When considering the borrowing period, it is always advisable to keep this timescale in line with the lifespan of the asset, fundamentally it is foolhardy to have a term that is too long.

However it is not always the case that once business loans have been obtained that the repayment schedule is set in stone. Many banks will allow borrowers to alter the details of their loan during the term. Normally loans come up for review at some point during the borrowing period, the bank will usually expect a renegotiation process at this time, as you are acting for financial reasons as much as they are.

Choosing loans however is often confusing; with the myriad of options available on the market this is understandable. The following will detail some of the more common forms of loans and how they can help a business to succeed.

Lines of credit are used regularly by those starting in the world of business. They are versatile loans that allow people to borrow only what they need and pay interest purely on the amount borrowed. They are extremely useful for businesses that may have variances in their income over the year, meaning that they are able to make changes to the loan amount as and when cash flow becomes a problem.

Business credit cards are used by many business owners whose borrowing needs may be smaller than others. They are perfect for businesses that need money to cover the cost of everyday items such as office supplies or the occasional dinner. As the amount borrowed on the card is typically quite small, the credit limit does not have to be overly large and hence the card repayments can be more affordable.

Traditional business loans are the ideal way for those starting a company to obtain that initial capital that is so important. Normally they are used to pay for new equipment or office space and come in both secured and unsecured varieties; however it is important to remember that banks will scrutinise financial records before granting the loan. As always however it is worth viewing exactly what is available on the market to find the best deal over the entire period of the loan.

With the choice of fixed term loans, secured and unsecured and a wealth of credit to be had there are many options for the business that needs to obtain additional finance. It is however only though a detailed and conscientious research process that the right loans can be found to provide a stable and secure financial business platform.

About the Author

Financial expert Thomas Pretty studies the varieties of business loans on the market and how best to obtain commercial finance.

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Identifying and Avoiding Mortgage Fraud

By Brian S. Icenhower

Recent financial industry distress publicly attributed to widespread mortgage loan defaults has generated mounting pressure on federal prosecutors to increase investigations into incidents of mortgage fraud across the nation. On February 6, 2004, CNN reported that the FBI warned that mortgage fraud was becoming so rampant that the resulting “epidemic” of fraud could trigger a massive financial crisis. Mortgage fraud has now become so prevalent that the United States Department of Justice and the Federal Bureau of Investigation have been forced to create an entirely new category for tracking these cases. According to a CBS news report, the number of FBI agents assigned to mortgage related crimes increased by 50 percent from 2007 to 2008. Prosecutors and investigators on both the state and local levels are also feverishly organizing task forces and creating real estate fraud departments to counter this burgeoning wave of crime. CRIME & PUNISHMENT The primary focus of these investigations appears to be on borrowers, investors, mortgage brokers, appraisers and real estate agents. Some of the charges levied against these perpetrators have included making false statements on loan applications, bank fraud, mail fraud, wire fraud, conspiracy to launder funds and a number of applicable state laws. However, the primary legal vehicle implemented by federal prosecutors has been section 1014 of Title 18 of the United States Code which declares mortgage fraud as a federal crime encompassing anyone who willfully overvalues any land or property, or knowingly makes any false statement, for the purpose of influencing a financial institution upon a loan application, purchase agreement or other related documents. A violation of the federal mortgage fraud law (18 U.S.C. § 1014) alone is punishable by up to thirty years imprisonment and a one million dollar fine. MORTGAGE FRAUD SCHEMES The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: “fraud for housing” and “fraud for profit”. Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home. These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain. FRAUD FOR HOUSING Income Fraud This occurs when a borrower inflates his or her amount of income to qualify for a loan or a larger loan amount. Although recent reductions in the use of “stated income” or “no-doc liar loans” has somewhat curbed income fraud, daring borrowers are increasingly generating more fraudulent documents to falsify income. Information technology and photocopy equipment have become so advanced that very convincing documentation, such as income statements, savings accounts and tax returns, can be produced on demand. Employment Fraud In order to justify overstated income in a loan application, borrowers will claim self-employment in a non-existent company or represent having a higher position in a company than the borrower actually holds. Failure to Disclose Liabilities The debt-to-income ratio is an important part of the loan underwriting criteria used to determine a borrower’s eligibility for mortgage loans. Consequently, borrowers will conceal financial obligations like newly acquired credit card debt, other mortgages, and private loans to artificially reduce their debt-to-income ratios. Occupancy Fraud Generally occurs when a borrower states on a loan application that he or she intends to occupy a property as a primary residence to secure a lower interest rate when the borrower actually intends to obtain the loan to acquire an investment property. FRAUD FOR PROFIT Equity Skimming and Cash-Back Schemes A straw buyer is typically implemented as the buyer of the property due to his or her creditworthiness and resulting ability to obtain favorable financing. Unknowing straw buyers can be manipulated by mortgage brokers and real estate agents to purchase a property as a primary residence with the broker or agent later serving as a property manager to collect anticipated rental income. After the escrow closes and the mortgage and real estate brokers collect their commissions, they proceed to collect rental income and fail to make the mortgage payments. Complex schemes can involve a knowing straw buyer, an appraiser who intentionally overstates the property’s value, a dishonest seller that intentionally inflates the selling price, and a dishonest settlement officer that makes undisclosed disbursements from the loan proceeds. All of these conspirators collaborate to collect portions of the proceeds of an inappropriately large loan before eventually letting it go into default. Appraisal Fraud or Price Inflation This fraud occurs when a dishonest appraiser intentionally overstates the value of a property or when an existing appraisal is altered to reflect a higher value. When a home is overvalued, more money can be obtained by the seller in a purchase transaction or by the borrower in a cash-out refinance. The New Appraisal Fraud: Price Deflation When done legitimately, a short sale occurs when a borrower that owes more than his or her property is worth sells the property below market value and the lender agrees to accept the lower repayment amount and forgive the difference. A new hybrid of fraud has emerged where an appraiser or a real estate agent drastically devalues the property in an appraisal or broker’s price opinion (BPO) so that the home will sell with ease at a price well below market value. Of course the new buyer is in collaboration with the seller, agent and appraiser, so all of the conspirators proceed to sell the home at a higher price for a big profit. Identity Theft Identity theft fraud occurs when a victim’s identity is assumed by another to obtain a mortgage without ever intending to make any payments on the loan. The perpetrators often abscond with a portion of the loan proceeds and sometimes are daring enough to lease the property and collect some deposits and rental income before disappearing. The Buy and Bail This completely new scheme is perpetrated by a home owner who cannot sell the home because more is owed on the property than its worth. Because no lender will provide the owner a loan for a second primary residence, the owner tells the lender that he or she plans to rent out the current home despite having no intention of doing so. Sometimes a falsified rental agreement is used to further support the falsehood. Once the second home is purchased, the owner “bails” on the original home and fails to make any further mortgage payments. AVOIDING & PREVENTING FRAUD Mortgage fraud frequently emanates from groups that complete an abnormal amount of similar transactions or churn out many offers to purchase at once. These outfits may appear disorganized or unprofessional due to the large amount of transactions they are attempting to manage. It is also no coincidence that mortgage fraud has significantly increased as housing values have decreased since most fraud schemes involve a financially distressed or otherwise vulnerable seller. It is equally important to remember that agents owe a very strict fiduciary duty to act in their clients’ best interests. So before reporting a client to your local authorities, speak with legal counsel or your state real estate licensing department to ensure that your proposed actions don’t constitute a breach of your fiduciary duty to your client. Real estate agents are in a unique position that enables them to identify and even prevent the occurrence of fraud by recognizing the red flags, asking appropriate questions, and giving the principals in their transactions the full picture of what consequences are associated with participating in mortgage fraud. While a lot of damage has been done in the real estate market, we can prevent more of the same from occurring in the future.

Brian S. Icenhower, Esq., BS, JD, CRB, CRS, ABR, a California Association of Realtors Director, practicing real estate attorney, a real estate expert witness and litigation consultant, a prosecution consultant of Tulare County District Attorney Real Estate Fraud. He may be contacted at bicenhower@icenhowerrealestate.com, or http://www.icenhowerrealestate.com/.

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