Smart Borrower Blog

Archive for the ‘Other’ Category

Federal ARC Loans Aim to Keep Small Businesses Open

The American Recovery and Reinvestment Act launched the ARC loan program in June to provide financial resources to small businesses operating during the recession. Its intent is to keep small businesses operating despite a weakened economy. The ARC program is funded with federal recovery dollars and operates through the U.S. Small Business Administration. The loans are provided to small businesses and have no interest, as well as deferred repayment. Loans are issued in varying amounts depending on need and eligibility, up $35,000. While the loans cannot be used to start a new business, existing small businesses can use the interest-free,... more »

Will America’s Recovery Capital Loan Program Work for Small Business Owners?

America’s Recovery Capital Loan program (ARC) will provide up to $35,000 in short-term relief for small businesses having problems meeting expenses. Small Business Administration (SBA) lenders are generating these loans, which will be available for small businesses until September 30, 2010. This $255 million loan program has been in effect for approximately one month. Some of the program’s detractors are having doubts about the effectiveness of the program. The SBA plans to approve $190 million in loans in 2009, and $150 million in 2010. The plan is to bail out 11,000 small businesses and retain 55,000 jobs. An article on... more »

Consumer Delinquency Rates Grow, Unemployment to Blame

A recently released report from the American Bankers Association (ABA) showed that 3.35 percent of consumers were behind on their loans during the first three months of this year, compared with 3.16 percent in the last quarter of 2008. These consumer loans include home equity loans, home improvement loans, direct and indirect auto loans, marine and RV loans, mobile home loans and personal loans. Of those categories, the delinquency rate on direct car loans grew the most from 2.03 percent to 3.01 percent. ABA chief economist James Chessen said in a statement: “The number one driver of delinquencies is job... more »

Small Business Lending Increasing

The New York Times has a interesting article today about how to get a business loan in the current environment. With national lenders facing a liquidity crisis and business credit card issuers not accepting new users, it’s easy to see why some think it is impossible to get a loan these days.  The SBA however reports that there has been a 25% increase in lending to small businesses since March. The key to getting a loan seems to be focusing on smaller regional banks.  They avoided a lot of the complex financial tools that got the big boys in trouble... more »

Crisis In The Commercial Mortgage Market

Following the mortgage market as I have this past 2 years, I see the domino effect of trouble in one market falling over into the next.  Residential mortgages and that market have taken a big ding this past year, with billions lost and foreclosures looming on every horizon.  Experts in the field do not see an end to the bleeding yet, and this situation is affecting almost every area of the country, from gasoline prices to retail sales.  Now looming on the horizon is another event that has the bankers worried. According to the Washington Post, the value of commercial... more »

Mortgage Fraud Ring Uncovered

When discussing the nationwide mortgage troubles, most people will tell you that the problem lies with subprime mortgage lenders, coupled with the many homeowners who do not bother to understand the terms of their agreement before signing for a loan. But on Monday, 19 people were reported to have been charged with targeting homeowners who were facing foreclosure and stealing over $12.6 million from them. The victims, 115 of them so far, were scammed by a major mortgage fraud ring that tricked them into turning over the title to their homes. The homeowners, who were all facing foreclosure at the... more »

Lower Home Values Cause Upside Down Mortgages

According to a recent report on CBS news, 20 million households are about to be upside down on their mortgage. An upside down mortgage is when the home owner owes more on the house than it’s worth. The result of an upside down mortgage is usually that the homeowner takes a loss on the sale. The other choice is for the home to go into foreclosure. But it costs banks around $50,000 to foreclose on house. So many lenders don’t want to bother. If 20 million is the correct figure, that means 43% of all mortgage holders would be stuck... more »

Why Buy a House that the Bank Owns?

With all the homes that are going into foreclosure these days, there are tons of bank-owned properties, called REOs, for sale. As a buyer, there are good reasons to purchase these properties — the main one being that the banks will sell them cheap. Let’s see why. Banks are not in the real estate business, so they are not interested in making a profit from the sale. They just want to get their money back, and the money the bank has invested in the house is often significantly lower than the market value. Also, owning the property is a risk... more »

Sellers can Help Buyers with Mortgage

In today’s somewhat slow housing market, sellers are wondering whether they will have to sit on their property forever before it sells. The answer is, you don’t have to. A property will sell if it is priced at an attractive value to a buyer – and it will most likely sell quickly if you offer an incentive. After all, developers do it all the time. They are able to actually save money in the long run, because they do not have to hang onto finished, empty properties so long. Consider following their example. If you would like to get your... more »

Mortgage Crisis Does Not Imply You Shouldn’t Buy or Sell

I had an interesting email from the National Association of Realtors the other day. It reminded me that “all real estate is local.” This is a point that all homeowners need to keep in mind. With the current market in turbulence, nobody is really sure what to do. The fact is that every market is unique, so don’t depend on national trends to make your own decisions. There are still houses being sold—sales are just slower than before. Sellers If you are interested in selling your home, you won’t find the jumping “hot” market that existed a couple of years... more »