New Repayment Break on Student Loans Begins July 1

It’s not an easy time to be graduating from college with student loans. With the unemployment rate soaring toward 10 percent and the average starting salary for college graduates down 2.2 percent this year, student loan borrowers — whose average debt from student loans tops ,000 — are now having an even tougher time affording their student loan payments.

The good news? Starting July 1, 2009, graduates with federal college loans may be able to qualify for a new government program that can reduce the monthly payments on their student loans based on their income.

The income-based repayment program, created by Congress in 2007 as part of the College Cost Reduction and Access Act, will cap a borrower’s monthly student loan payments at a percentage of her or his income, when the borrower’s income is at least 50 percent higher than the current federal poverty line for the borrower’s family size.

These income-based student loan payments will be calculated as 15 percent of the amount by which a borrower’s adjusted gross income exceeds 150 percent of the poverty line.

(For individuals, the 2009 poverty line is ,830 in all states except Alaska and Hawaii. The complete federal poverty guidelines for 2009are available on the website of the U.S. Department of Health and Human Services.)

For example: 150 percent of the current individual poverty line of ,830 is ,245. If a borrower’s annual adjusted gross income is ,000, the monthly payments on her or his eligible student loans would be capped at 9.44 — 15 percent of the difference between ,000 and ,245, divided by 12 months. If a borrower’s annual adjusted gross income is ,000, the monthly payments on any eligible student loans would be capped at 6.94 (,000 – ,245, multiplied by 15 percent, divided by 12).

Income-based monthly payments will be adjusted annually, based on a borrower’s federal tax return from the previous year. As a borrower’s income rises, the income-based repayment cap will also go up. If the income-based repayment cap reaches a level higher than what a borrower’s monthly payment would be under a standard 10-year student loan repayment plan, the borrower will no longer qualify for income-based repayment for her or his student loans.

Borrowers whose adjusted gross income falls below 150 percent of the poverty threshold won’t be required to make any payments on those student loans that qualify for income-based repayment.

Even if no payments are due, however, interest will continue to accrue on those college loans. Unpaid interest will also accrue if a borrower’s income-based monthly payments aren’t sufficient to cover the full monthly interest on the qualifying college loans. Any accrued unpaid interest will be added to the student loan principal and capitalized when the borrower no longer qualifies for income-based repayment.

For those borrowers who hold subsidized student loans or a federal consolidation loan that included subsidized Stafford loans or Perkins loans, the government will cover any unpaid interest on those subsidized loans (or on that portion of a student loan consolidation that’s comprised of subsidized loans) for the first three years that a borrower is in income-based repayment.

The longest that a borrower can remain on the income-based repayment plan is 25 years. After 25 years of income-based payments, the government will forgive any remaining principal and unpaid interest — although borrowers should note that under current tax law, this forgiven student loan debt would be taxable.

Borrowers who are employed full-time in qualifying jobs in the public service sector may have their remaining student loan debt forgiven after just 10 years in the income-based repayment program, and this forgiveness would be tax-free, thanks to a ruling from the U.S. Treasury last year.

To find out if you qualify for income-based repayment on your federal college loans, you’ll need to contact your lender and provide information about your financial situation — you’ll need to demonstrate “partial financial hardship,” as defined by federal regulations.

Only federal Stafford and Grad PLUS student loans in good standing, along with consolidations of these college loans, are eligible for income-based repayment. Federal Perkins loans are eligible only if they’ve been included in a federal student loan consolidation. Other college loans are ineligible:

The income-based repayment program applies only to federal student loans. If you’re having problems meeting the monthly payments on your private student loans, you should contact the lenders to see if they’re willing to work out more affordable repayment plans for you. Keep in mind, though, that private student loans typically have less flexible repayment options than federal student loans.
If your parents took out PLUS parent loans to help you pay for college, they won’t be able to take advantage of income-based repayment on their PLUS loans. Consolidation loans that included PLUS parent loans are also excluded from income-based repayment. Any Grad PLUS loans you took out as a graduate student, however, as well as consolidations of Grad PLUS loans, are eligible.
Your student loans don’t have to be new to be eligible — even long-time graduates may be able to qualify for income-based repayment on college loans taken out years ago. But you can’t be in default on your loans. To qualify for an income-based repayment plan, any federal college loans you have in default will need to be rehabilitated first.

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Qualifying For a Mortgage Loan – What Are Some of the Requirements For a Loan?

Qualifying for a mortgage loan has always been somewhat of a pain. I can remember my dad complaining years ago about the “prying” that the bank would do any time he applied for a loan. That was back in the 1970′s and, although there was a number of years where things did become much easier, the reality today is that qualifying for a mortgage is tougher than ever. The requirements for a loan have not only become more stringent, but satisfying the bank’s underwriting department (the people who actually approve/deny your loan) is often a frustrating experience. So what exactly are the requirements for a loan and how does one go about qualifying? Well, the first thing you need to know is that the rules change all of the time. Just when you think you understand it, everything will change. The second thing you need to know is the requirements for a loan also depend on the type, amount and purpose of the loan. For instance, qualifying for a mortgage refinance of 0,000 can be completely different from qualifying for a purchase loan of 0,000. Here are some of the requirements for a loan and what you can expect when you apply.

It may come as a surprise to you, but just a few years ago, you could have qualified for a mortgage loan without having to document any income. You might have paid a bit more for this privilege, but nonetheless, you could have done it. Today, forget about it! To meet the income requirements of a loan, you will need to plan on providing your last 2 years of federal tax returns (all pages and schedules) along with every 1099 and W-2 that you have received during the same time period. You are also going to need the last 30-60 days of pay stubs from your current job. If you have worked more than one job in the past 2 years, you are probably even going to be asked for the last pay stub from that job. If you work for someone who pays you “under the table” or if you are self-employed or have any difficulty at all proving your income, then you could have trouble qualifying for a mortgage loan.

This boils down to how much money you have in the bank and where did that money come from. Requirements for a loan dictate that almost any deposit into your bank account over 0 can be questioned and you may be asked to prove where that money originated. This becomes a huge problem if you have a large number of miscellaneous cash deposits. Banks want to make sure that you did not borrow any of the money for your down payment, so when you are qualifying for a mortgage loan, they are going to look carefully at your bank statements- especially all of the deposits. If you just happen to have a bunch of cash that you are planning to use for your down payment, you better be able to prove where and how your accumulated the cash. You can not just show up at the bank with a suitcase full of money and expect to get approved for a mortgage loan. Asset documentation is responsible for many last minute loan denials as borrowers are unable to meet the asset requirements for a loan.

This is another one of those areas that has changed dramatically in the past 3-4 years. In 2004, there were actually lenders that allowed you to qualify for a mortgage loan even if you had a very recent bankruptcy. Predictably, those lenders are now out of business and the remaining guys are much tougher. The minimum requirements for a loan say that you must wait two years after a bankruptcy and four years after a foreclosure before you can qualify for a new loan. However, most banks have instituted more rigid guidelines. You’ll need to check with your lender for their bankruptcy and foreclosure requirements. In addition, any judgments, collections, and tax liens will almost always need to be paid in full. So what if you have great credit but your spouse has bad credit? Once upon a time, it wasn’t too tough to just leave the “bad” spouse off the loan. Now, qualifying for a mortgage loan independently of your spouse is a rare occurrence. Yes, it can happen, but lenders will almost always want to see credit reports from BOTH spouses. It has also become very common that you need to provide a written explanation to the lender for every negative item that appears on your credit report. If you have some derogatory history, you should plan on doing some writing if you are qualifying for a mortgage loan.

In conclusion, you should keep two things in mind when qualifying for a mortgage loan. The first is patience. You will be asked for “stuff” and then more “stuff” and then more “stuff”. It is challenging, but if you don’t jump through all the hoops, you won’t get the loan. Second, make sure you are working with a knowledgeable loan officer with a reputable company. The first hint of a problem is usually when a loan officer tells you “no problem”. The ever changing requirements for a loan mean that no deal is “no problem” in this market. So get with someone that knows the rules and you will save yourself a ton of time and frustration.

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Year in Review: Housing, Foreclosures and Loan Modifications

Continued doubts in our economy shutter the housing market and weaken the outlook on a positive 2011.  After dragging the US economy into a major recession, property markets across the country are now relying on an economic recovery to help cure the housing market.

Foreclosures will continue well into the 2011 year and perhaps for the next few years. The glut of unsold homes on the market needs job growth to put consumers back into the stores and to bring back consumer confidence.  Talk about the mortgage tax deduction being eliminated could cause potential homeowners to not even consider buying a home.  Of course the number one thing we all should be concerned with is the overall economy and if jobs do not rebound that could make for a very, very messy and long road to recovery in every sector.

As for housing it has been a rocky road, from foreclosure fraud as of late to the government’s Home Affordable modification program, coming up short in helping homeowners stay in their home.  Now there is talk about the mortgage tax deduction being eliminated, which could stall out the recovery of the real estate market.

The first half of 2010 we saw some improvement due to the tax incentive to purchasing a new home, but after the credit expired, housing has once again slowed down.  It will take almost a year for us to work through the current housing inventory.  As mortgage rates slowly begin to rise as well, only spurs more talk about how long of a road we are looking at in terms of housing.

However, in the wind of all this negative talk about the housing recovery, there is talk about a spur of recovery due to low housing prices, overseas investors, and construction prices at levels we haven’t see in more than 40 years!  This should help buyers to come out of the wood work to look at purchasing; the only downside to this is the lenders tight lending policies as of late.

Even though there has been a lot of buzz about the HAMP program and it falling short on the number of people it was projected to help, it is still a very viable option if you are behind on your mortgage.  Don’t forget most lenders also have their own loan modification workout programs, so even if you do not qualify for HAMP, you can still make out in saving your home and reducing mortgage payments and interest rates by applying.

The loan modification application process, what documents you will need to get started

If you haven’t already applied for a loan modification and you are wondering how to get started this article will point you in the right direction. So let’s get started!!

W2 employees:  2 most recent pay stubs

Self employed:   A quarterly profit and loss or a 3-6 month profit and loss

** This will only have your business expenses (do not include personal).

Bank statements: provide ALL pages to your checking & savings accounts

** remember if you have more than 3 months of principal and interest in your checking, savings (including 401k’s) you will NOT qualify for the Home Affordable Modification Program “HAMP”.

Sign and date this letter: You want to keep it short and to the point.  DO not turn it into a novel! One page is enough and should explain the following:

A). what caused you to fall behind? Give a time line date and month when it started.

B). is the hardship over? IF so when did it stop?

This is the actual government application form.  Nothing on this form can be left blank, especially the DOB (date of birth), social security numbers. Make sure you review carefully before submitting. SIGN AND DATE!

This is the government’s request for copies of your tax returns filed with the IRS.  You will need to provide this even if you have given the lender your tax returns.  Make sure you sign, date and fill in your phone number.

A breakdown of your monthly expenses and income.

You may have other sources of income for example: rental income, renting a room, child support, alimony. You will have to show proof or this other income and the documents required by the lender may vary.

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Best way to present your financial information to your lender for loan modification assistance

You are sitting at home and starring at a lender application form for your loan modification.

You ask yourself “should I disclose little Jimmy’s income?” Little Jimmy who lives in your basement and pays cash for rent.

Here is short list to help you sort through it all.

1)  First thing you need to do is sit down and on a piece of paper or computer go over your monthly expenses.  List what goes out every month and what comes in for income.

2)  Add everything together and see where you are everything month.  Are you negative a few dollars, a few hundreds dollars, or maybe thousand and more…

Maybe you’re not even negative maybe you are positive every month…

Lenders want to see you can at least afford your current mortgage payment.  If you are seriously over extended and are carrying to much monthly debt, you may need to reevaluate your financial priorities.

Once you have the bottom line figured out this is what you need to know:

Not only do lenders want to see that you can afford your current mortgage payment, they also do not want to see you to much in the red (negative) or too much in the positive (green).

Susie brings home gross income of 00.00 a month, her monthly expenses total including mortgage payment is 40.00.  She is negative 0.00 each month meaning she is spending more than bringing in.

This can pose a problem because even though Susie is only 0.00 in the red, what is the likely hood of her keeping her payments on time.  There is no cushion for unexpected expenses… However, if you are the too positive 0.00 and above (this also depends on lender guidelines), the underwriter might just say you can afford your current mortgage payment and not offer you a loan modification assistance.

Unfortunately, it is a formula that is not always known and even though the government program guideline is 31% of total gross income excluding other expenses, this isn’t really the case.  Reason being if you are denied for the government program and you are negative 0.00 a month you will NOT qualify for any other assistance.  So the key here is to be positive around 0.00 -0.00 a month.  This is a safe number because it show’s a tiny cushion but not too big of a number where you may get disqualified.

I have only found ONE website that actually has an automated software program for that does this for you.  Yes, I said folks!! www.freeHAMPreport.com.

Check it out!!

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Self Employed Borrowers seeking a Loan modification

If you are one of the many people in the country who are self employed and do not use Quick books or an account to keep track of your monthly business expenses. You may want to consider doing so in the future, your accountant would probably appreciate it and secondly it’s good business sense to keep track of your business income and expenses in a nice organized fashion.  In regards to applying for a loan modification, if you are self employed you will need to provide a 3 or 6 month profit and loss statement.  The lender will require this in order to underwrite your file.  You can do this simply by taking your monthly income from business minus your monthly business expenses and average the total over the number of months.

Total business income for 3 months =            ,000.00

Total business expenses for 3 months =          ,000.00 (minus)

Total:               $ 10,000.00 (divide by # of months) 3 =

Monthly average income: 33.33

So if the lender is looking for a 6 month profit and loss, you would do the same calculation but over 6 months.  If you do not have a profit and loss statement you can ask if your lender can provide one or you can make one in a word format.  Some do it yourself companies will have samples you can download and use. When applying for your loan modification it is always a good idea to ask exactly what the lender will require.  Sometimes they may actually even want a year to date profit and loss.

It is important no matter what the format may be especially if you prepare the profit and loss yourself to make sure you sign and date the document.  A good thing to keep in mind as well is to keep your home expenses separate from what you may include as business expenses.

Underwriters will want to see clearly what is being used as business expenses, so in other words do not include your personal home cable, internet, and food as business.  It is however, different if you work out of your home, but use common sense after all the underwriter is still going to look at your business and personal tax returns.  The lenders do have to follow the HAMP guidelines to determine if you may qualify for the Home Affordable Modification program or any one of the governments housing loan modification programs.

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I’m unemployed what are my options for a loan modification or a reduction in mortgage payment?

Under the Home Affordable modification program if you are unemployed you may be eligible for a loan modification or forbearance under the governments UP program.

You can still apply for assistance under the UP program for unemployment.  Once the servicer confirms you will be getting unemployment benefits, they should offer you a forbearance plan.  They will not need to wait to confirm you are receiving the unemployment benefits.  The plan will let you pay a reduced mortgage payment for about 3 months and can be extended if warranted.  Servicer’s will be able to track your employment status to determine when you may be able to be flipped back into a trial loan modification at the time of your new employment.

You can apply for UP consideration can be made by phone, mail or email.  Your servicer must document your request and date the UP request in your file.  After receiving your evidence of unemployment benefits, the servicer is then required to determine if you are eligible for the UP program. If for some reason you do not qualify your servicer must send you a non approval notice within 10 business days following the date of the servicer’s determination.

If you are eligible for the UP program or an extension the servicer must send you the terms of the forbearance plan.

Duration of the forbearance plan along with the Forbearance Period Effective Date and

the expiration date;

Periodic payment amount, if any;
Brief explanation regarding what will occur when the borrower is re-employed or when

the forbearance plan expires; and

Borrower’s responsibility to provide updates to his or her employment status during the

forbearance plan, if applicable.

The Second Lien Modification Program (2MP) seeks to lower payments on second lien mortgage loans. Under 2MP, when a borrower’s first lien is modified under HAMP, a participating 2MP servicer must offer to modify the borrower’s second lien by:

Modifying the borrower’s second lien mortgage;
Accepting a lump sum payment from Treasury in exchange for full extinguishment of the second lien; or
Accepting a lump sum payment from Treasury in exchange for a partial extinguishment and modify the remaining borrower’s second lien.

For more details outlining this program you can visit the Making Home Affordable website.

Not every Foreclosure Defense Attorney or Loan modification company is out to get you!

It is just another day trolling the web looking for stories relevant to the foreclosure market and the latest news.  The internet is just crawling with stories about , new laws to protect consumers and revisions to the government’s mortgage loan modification program Home Affordable.  I came across website and many articles advising homeowners to stay away from and companies.  Many of these sites and articles state you should work with your lender or a certified .  Which by all means is fine, however, isn’t it partially the lender’s fault for the real estate mess?  After all if they had actually underwritten the loans they way they should of and had maintained some sort of guidance and didn’t let greedy investors say “sure let’s ride it out and deal with it later”, maybe our real estate nightmares wouldn’t be so bad.  After all who is crazy enough to approve a loan that states no income or a loan that basically lets you lie about someone’s true income?  Really?  Did we do that?

So now we are warned about foreclosure scams, one of my favorite sayings is, “you make the bed you sleep in.” Not to say there are not seedy, greedy attorneys or others in the industry, obviously it is just the nature of business and people.  However, the flip side to all of the negative news we hear about foreclosure scams, in truth many of these companies are actually an active part of the process and I’m sure with no doubt they have helped more homeowners than we really know.

After all don’t the homeowners who were scammed have to take some sort of responsibility for being somewhat lazy and not wanting to educate themselves about their options?  I’ve been in this industry for a while and I’ve seen both sides of the coin.  Some people are just that LAZY; they want someone else to fix their problem and will get mad at you just because you didn’t give them the outcome they wanted.  Well I’m sorry if you don’t qualify it is what it is.  You want me to lie? I don’t think so!  Isn’t that one of the reasons why we are in this mess?  Some people need a reality check!

Bottom line is as a consumer we have a responsibility to educate ourselves and not be duped into scams.  There is only one thing certain in life and as morbid as this may sound, our time on this planet is limited, that my friends is the true reality of our lives.

The 3 most common blunders homeowners make when applying for a home equity loan….and how to avoid each one

Let’s dive right in….with the 3 most common blunders I see homeowners
make – and of course, how to avoid each one.

I see this all the time with wannabe borrowers.

Most people get excited about the idea of getting fast cash and rush to
get their property appraised.

But here’s what happens….

It costs them 0 to find out that their home is valued lower than they thought. (especially in today’s market) Your home you swear is worth 5,000, the stupid appraiser thinks is only 0,000. Just like that the ,000 equity you wanted to borrow vanishes into thin air. (along with your 0)

So what do you do?

The answer is simple. Check the home values in your neighbourhood before you do an appraisal. Here’s how. Have your mortgage broker compare properties in your area and see if your home is in the right range for you to get approved. It’s free, and you will avoid wasting your time and money.

I can’t tell you how many times I see this one.

Everything looks good. Your house has lots of equity, the appraisal is complete and things are going smoothly. Then the unthinkable happens. They ask you to provide a Notice of Assessment (NOA). Oops! You haven’t done your taxes for the last 2 years. Just like that…loan declined.

Solution: Find out first what income proof the lender needs. Sometimes all they require is a pay stub and a job letter. (Some lenders don’t need income verification at all.) You will save yourself hours of grief and aggravation. Or, if you want to be safe, just call your accountant and get your taxes done!

This one really is really bad. Don’t do this !!

Here’s the scenario….

The lender approves your home equity loan and It’s time to get your money.
You go to the lawyers office and they tell you their is a problem.
Shocked? Well you shouldn’t be. Remember that secured loan that went bad 3 years ago? Guess what. It’s now registered as a lien against your property.

Here is some free advice. Tell the lender everything before you apply. And I do mean everything.
Trust me. Every title issue, lien or debt secured against your property WILL show up
when the lawyer does his search. If this happens your loan will get declined – guaranteed.

There you have it.
Avoid these these 3 common mistakes and you can get your home equity loanapproved with a lot less hassle and get the cash you need right away.
Hope this helps.

Strategic Capital Network is a licensed mortgage brokerage specializing in home equity loans. If you would like to find out if you qualify for a loan please visitwww.loansforontariohomeowners.com to get a FREE pre-approval.

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A Fast Cash Payday Loan Can Literally Bail You Out

To put it simply, we currently have the ability to use the internet and access real money in almost no time at all. In fact, a is just a click away for many people, and if you were smart you would think about using it too.

Some people will say things like “,” and just use it as a marketing ploy to try and get you interested in their specific information. The payday loans system is anything but just some marketing system. In fact, if you take a look at what many users have experienced in their specific pasts, a

If you don’t think that’s what having your money “now” means, then I just don’t know what to tell you. Today, online lenders provide nearly instant approval for payday advances.  These are loans that give you an advance on your next payroll deposit. If you don’t have a regular deposit, then you won’t qualify.  However, people with a steady job are approved in seconds.

As technology continues to advance further and further, the speed at which things are done continue to get stronger and faster as well. It used to be that by trying to get money fast you would hope to have it “overnighted” at a best case scenario. Today, however, it is completely important to remember that with electronic direct deposits you can actually have the money that you have been looking for in no time at all.

Just imagine what it used to be like before payday loans were this convenient. You can now just walk right into a payday loans center and end up getting a hold of all the cash you need in payday advance. Or, if you don’t want to actually travel to a store’s physical location, you are able to visit their website and have the application, review, and money transfer all take place online. That’s what I call a fast cash payday loan.