Loan, personal loan, auto loan and more

New Privacy Policy For Personal Loans For Bad Credit Services Announced by USAPaydayForever.com

2011-12-20T02:57:00.000-08:00

(PRWEB) December 20, 2011

An article in the financial section of Yahoo news recently said that Asian stocks and the Euro remained steady after some sell offs. It mentioned some of the sell offs had to do with moving from risky investments over to dollar investments after North Korea’s leader died. The article stated, “Market players said thin pre-holiday trade was likely to exaggerate price swings, but that further heavy selling was unlikely until there was another catalyst, such as European sovereign ratings cuts.” USAPaydayForever.com acknowledged while this might be a good sign of market stability that it could also be some quiet before a storm. To USAPaydayForever.com this further confirms more economic troubles ahead. They reason that their privacy policy needed further updates for their personal loans for bad credit services. In doing this they plan to provide additional transparency to consumers to satiate their concerns about such services.

A statement was released by USAPaydayForever.com about their revisited privacy policy for their personal loans for bad credit services. In this statement they said, “People are still struggling financially in our current economy. It’s still true that they tend to also have bad credit. Getting traditional loans can be difficult, therefore these consumers seek out personal loans for bad credit. For example, they may seek our payday loan services. Unfortunately, many consumers still fear our personal loans for bad credit. This is the reason we are putting our writers to the task of doing another rewrite of our privacy policy to make sure they are more transparent. As far as personal loans for bad credit are concerned, we feel our customers should be at ease."

In recent news, there been other new changes that have come from USAPaydayForever.com. They recently announced a new hiring of a website copywriter. It is expected they are going to use this writer to be the one in charge of rewriting their privacy policy for personal loans for bad credit services. USAPaydayForever.com is doing this, among other things; in a campaign to shore up people’s fears by educating them about they way they do business.

About USAPaydayForever.com – USAPaydayForever.com is an online company that helps consumers find and obtain personal loans for bad credit. For more information about USAPaydayForever.com, please visit their website at http://www.usapaydayforever.com.

Personal Loans: Personal Loans for Personal Requirements

2011-11-29T00:46:00.001-08:00

There may be conditions when you might get trapped into personal financial trap because of any reason. Usually this happens because of loss in business or because of being extravagant. Whatever your fault may have been but now the question arises how to combat with present situation and that too in smart way. You can find your answer at many financial institutions or loan lending companies lending Personal Loans. These loans provide you with financial assistance for your any personal purpose like to provide you with funds to buy car, pay for dream cruise or that remote island escapade, buy a boat, pay mortgage arrears, finance your home improvement plans, payment of alimony or paying for credit card bills etc.

Loan lending companies expect you to live up to their expectations like your credit score should be good, you should be an earning hand, you have your saving bank account etc. The most important of them is credit score. Usually people fail to maintain their good credit score and then they have to suffer a lot when they apply for loan. Good credit score means surety of getting Personal Loan and that too at low interest rate. Though it is not so that people with bad credit score cannot apply or they cannot get Personal Loans but they have to compromise with many things like they have to pay high credit score, they have to give more charges and sometimes they get less money for the loan.

Personal Loans are broadly divided into two types of loans Secured Personal Loans and Unsecured Personal Loans. Secured ones are lent to the people who place their movable or immovable property to lender so that in the case if non repayment lender can seize the property to cover its money. In contrary to this Unsecured Personal Loans are lent to the people who do not want to place their property as collateral. But, this does not depend only on the wish of the person rather this loan has higher interest rates and lesser amount can be borrowed through these types of Personal Loans.

Apply for a loan only if you can afford it

2011-09-11T01:34:00.002-07:00

Most people borrow money at some point in their lives. When there isn't enough cash to pay for the household bills, a child's education or a medical treatment, a loan from the bank can be a lifesaver in troubled times.

However, as much as everyone wants to get the money they want to borrow, the lending business just doesn't work that way. Some loan applicants get approvals without so much hassle, others don't.

In recent times, lending standards have tightened and many personal loan requests have been denied. Borrowing funds to repay credit card debt has proved particularly difficult.

It is not surprising to see banks unwilling to lend easily. Prior to the financial crisis, lenders were handing out credit with far too much ease.

"Many of the banks were heavily burnt by defaulting loans not too long ago and this will not be forgotten easily," notes Rupert Connor from Acuma Wealth Management.

Unsecured credit

Popular among average-income earners, a personal loan is a form of unsecured credit that is not backed by a collateral or security of a property. Repayments are made out of salary, end of service indemnity or any other form of legal income. Loan interests can range from 11 per cent to 22 per cent per year, although rates levied on credit card debt can be doubly expensive.

When reviewing personal loan applications, each bank follows its own rule about salary size or age of borrowers and reviews an individual's bank statement, to see clues about how he manages his money. Some banks also blacklist residents, companies or even market sectors they deem unworthy.

So, your credit approval partly hinges on whether or not your employer has been blacklisted by the lender. Low income and bad credit behaviour such as late payments, exceeding credit limits or having overdue accounts will also prompt a rejection.

If you constantly maximize your credit card balance, it suggests you are living beyond your means and this alone may cause a rejection, according to Steve Gregory, managing partner at Holborn Assets.

"Any defaults and previous police cases may also count against you, though it is not always possible for a bank to learn of them in this country, let alone if they occurred abroad."

At Lloyds TSB, an applicant's credit history is an important part of the scrutiny and it is something that is carefully taken into consideration. The bank generally looks at the last six months in terms of income and expenditure, to ensure that it gets an accurate picture of the customer's circumstances.

"The decision to approve a loan is one that we make following detailed conversations with the customer to understand their financial circumstances and their existing obligations," says Richard Musty, managing director at Lloyds TSB in the Middle East.

"We work carefully with our customers to provide them with the support that they need, but within the boundaries that they can afford."

The same is true at Emirates NBD, which carefully reviews every applicant's monthly income, debt burden ratio, employer and repayment history. "Lending is based on individual credit behaviour," says Shekhar Krishnamurthy, head of retail assets and liabilities at Emirates NBD.

Despite tight lending rules, Krishnamurthy says all "credit-worthy" individuals continue to avail themselves of loans from the bank.

"These loans are extended only after carefully assessing the applicant's monthly financial commitments. Once we are fully convinced of the repayment capacity of the applicant, a loan is disbursed with a suitable repayment tenor that enables the borrower to repay comfortably."

Besides, banks have been recently mandated to follow UAE Central Bank guidelines on personal loan applications, so borrowing can be more challenging for some people, especially those in the low-income bracket. The amount of money anyone can borrow has been set at 20 times the salary or the total income of the borrower. "Banks and finance companies must make sure that this limit is not exceeded," the Central Bank said in its circular.

Repayment

Borrowers have up to 48 months to repay personal loans. To keep monthly instalments and interests reasonable, banks have to ensure the repayments don't exceed 50 per cent of a borrower's gross salary or regular income.

So, if your objective is to convince a bank to grant you a loan, you'll have a tough time unless you meet the requirements of both the lenders and the Central Bank. "Anyone not complying with the rules of the UAE bank is not going to get a loan," notes Gregory.

"Banks have their own rules about salary size and age of borrowers for example, and if your profile does not fit, they will not lend to you. It's not about presenting your case for a loan, but rather about meeting the requirements of the bank."

But the more information and clarity that you can provide to your bank, Musty says, the smoother the process will be to apply for and receive the result of a loan request. "It is important to have regular conversations with your relationship manager to ensure that you are on top of your finances and that they are being managed in the best possible way."

Watch out for interest rates, charges

If you really need to take out a loan, it is critical to shop around to get the best deal possible.

Taking the first loan offered can result in paying a higher interest rate than needed, and make the purchase more expensive.

Go for fixed interest The first thing to do is check if the interest payable is fixed or flexible. Gurnos Stonuary of Nexus Group warns that if the loan has flexible interest, monthly payments may rise when the interest rate rises.

Keep it short Always aim to have a loan for the shortest possible period, because the longer you take a loan, the more interest you pay. Don't get tempted when lenders offer to extend your loan amount over a longer period.

"This can look inviting as it will reduce your monthly repayments, but beware the longer the loan, the more interest you will have to pay overall," says Stonuary.

Don't pay it off soon

However, if you decide to pay off your debt before the end of the loan period, watch out for a redemption charge.

"Consider also consolidating any loans you have such as credit card loans, overdraft into one loan where you may be able to save on the interest that you pay and to have a single set amount to pay each month," he adds.

Look At Total Cost Of Personal Loan Before You Decide Which One's Right For You

2011-09-11T01:34:00.001-07:00

Florida (OPENPRESS) September 8, 2011 - When shopping around for a personal loan, you will find lots of information on how these loans are available for any purpose, and that there's minimal paperwork.

But what isn't usually discussed is the interest rate. When looking for the right personal unsecured loan for you, be sure you consider this important factor - Ask yourself: How much will this loan ultimately cost me?

Unsecured personal loans do not require any collateral, as opposed to secured personal loans, which do require collateral. For those with bad credit in need of a loan, the unsecured personal loan may be the best option.

There are several advantages in choosing a personal loan. First of all, you can benefit from the loan, even if you've got bad credit. If you repay the loan according to the terms, you will see your credit score, as well as your credit history, improve.

Another advantage is the ease of application. Many lenders operate online, and their application processes are quick and easy, requiring minimal information and just a few clicks.

Probably one of the biggest advantages of a personal loan is that the loan can be used for any purpose, and you don't have to reveal any details about how it will be used in the application process. This means you can get a personal loan for any reason, from taking a much-needed vacation to getting dental work done to an emergency car repair.

But just as with every coin, there is a flip side. There is also a disadvantage to personal loans. The higher interest rate, due to the increased risk of unsecured loans, can be cumbersome for most consumers. To avoid paying a lot of interest on a personal loan, it is smart to make sure, even before you apply, that you can pay the loan back as quickly as possible. But be aware that there are lenders who charge fees for early repayment - be sure to ask about such fees before you sign on the dotted line.

As you can see, personal loans can be the perfect solution, whether you have good or bad credit. These loans can be a tool to get your credit back on track, as well as provide for a financial need.

But before you move forward on any loan, be sure you shop around. Look carefully at the terms and rates offered, and make sure you get the best offer available. Don't get roped in by flashy websites or empty promises. Read the fine print, ask questions and get answers.

Brits Still Focusing On Finance Repayments

2011-03-09T04:03:00.001-08:00

Britons are shunning unsecured credit and continuing to focus on repaying their debts, according to new figures from the British Bankers’ Association (BBA).

The BBA data shows that demand for unsecured credit has declined by 2 per cent over the last 12 months, while personal deposits have increased.

Net personal loan and overdraft lending by the UK’s main banks fell by £323m in January, although credit card lending rose by £106m.

Overall, unsecured borrowing remained subdued during the month, with Britons repaying £217m more than they borrowed – the 18th month in a row in which repayments have exceeded credit lending levels.

David Dooks, the BBA’s statistics director, said there has been "little change in the borrowing environment" so far this year, with both consumers and businesses putting more emphasis "on repayment rather than new borrowing".

Where to Get the Best Personal Loans

2011-03-09T04:02:00.001-08:00

Knowing where to get the best personal loans can save you a lot of money in interest. There are loan companies that are happy to oblige you with a loan, but some have sky-high interest rates. If that is the only way you can get a personal loan, try to pay it off as soon as possible to save money on the finance charges. Make sure the company does not have a prepayment penalty before you even take out the loan.

Finding personal loans is no proble m. There are companies everywhere that want to lend you money. However, the trick is to find the best loan, not necessarily the fastest or easiest one. Knowing where to look helps a lot. Here is a tip for you: The best one might not be the company that mailed you an offer for a guaranteed loan. Look at the interest rate before you contact them.

Where to Find the Best Personal Loans

1. Banks. Banks are very competitive, and if you have good credit you can get a loan that will not beat you up with interest rates.

2. Credit unions. Credit unions notoriously offer the lowest interest rates on any kind of loan. You do not always have to be in one that is job related. Some allow people to join who are students, military, veterans and for a variety of other reasons. It is definitely worth looking into.

3. Personal loan companies with low interest rates. They do exist, especially for people with good credit. You will have to look around and maybe even negotiate the terms of the loan. If you are not having luck with a bank or credit union, consider one of these loan companies; just be sure to shop them well.

It is worth taking the time to locate the best personal loans. You do not want to get trapped into paying high interest. That would mean that your monthly payment is not taking as much off the balance as it would with a low interest loan. If you have enough money to not worry about that, you probably don’t need the loan anyway.

Foreign banks shift focus to unsecured loans

2011-03-09T04:01:00.000-08:00

Better economic environment, demand boost confidence.

Hopes of accelerated growth in the domestic economy, coupled with expectations of wage increments and an improved demand for consumer goods, have encouraged foreign and private lenders to switch their attention back to the unsecured loan market.

We have selectively started increasing the sourcing of unsecured loans. We believe it will remain an important part of our portfolio,” Neeraj Swaroop, Standard Chartered Bank’s regional chief executive for India and South Asia, told Business Standard.

Typically, unsecured loans comprise credit cards and personal loans and are perceived to carry greater risk. These loans, however, charge higher interest rates and offer higher margin than secured advances.

The global financial crisis, with its cascading effect on Indian economy, saw most private and foreign banks moderate growth in their unsecured advances locally as delinquencies increased in the same.

For instance, the Hong Kong and Shanghai Banking Corporation (HSBC) slowed its unsecured loan disbursements after high loan-impairment charges hit its pre-tax profit in India in 2009.

“Winding down of the unsecured loan book and recoveries in corporate loans helped us improve our asset quality,” Stuart Davis, chief executive officer of HSBC’s India operations, said in a conference earlier this month.

However, the bank had started growing its unsecured loan portfolio since the fourth quarter of calendar year 2010, he added.

Analysts reckon an improved economic environment has given banks the confidence to re-enter this segment.

HDFC Bank, the country’s second largest private lender, said as the demand for some unsecured products was picking up again, the growth in those products would also look up.

“We moderated our growth in unsecured loans. However, we did not exit or completely de-grow those portfolios. Having stayed in that business, we have figured out the segments that work well. Our focus on unsecured (loans) has been a lot towards our own internal customers, those who have a relationship with us,” Paresh Sukthankar, executive director of HDFC Bank, said.

Bankers said while they were keen to grow their unsecured loans, they would prefer doing it selectively, focusing more on their internal customers to minimise the risk of deterioration in asset quality.

“We will have to be careful. It is a segment, which is amenable to over-leveraging if not done carefully. however, if we do it carefully, it is a good business to be in,” Standard Chartered’s Swaroop said.

Things You Can Do To Get a Personal Loan Faster

2011-03-09T04:00:00.000-08:00

There comes a time in a person’s life when they will need to apply for personal loans because of an unexpected emergency. You may need to receive a loan as soon as possible. Some personal loans can be received quicker than others. It all depends on the financial institution. Most of the time if you are in good standing with a finance company, they will write you out a check either the same day or the next. In order to apply for a personal loan, you may need to check your credit report to see if there is anything on your report that will stop you from receiving a loan. You can receive all three of your credit reports for free at the AnnualCreditReport website. If there is any debt showing that isn’t yours, you can have it removed. Once you are ready to apply for personal loans, there are two places you can receive one quickly.

Payday Loans

One of the fastest places to obtain a loan is through your local payday loan center. These personal loans can even be obtained even if you have bad credit. With a payday loan, you may borrow up to $1,500. The money may have to be repaid back quicker, but you will be able to receive the money into your checking account in 24 hours or less. In order to receive a payday loan, you must have a valid checking account and a steady monthly income of at least $800. You can apply online at MoneyMutual.com. The information that you input online will be kept safe and secure.

Finance Companies

Another place that you can get a quick loan is through your finance company. Many people have a finance company that they used to purchase furniture or a car. If you are in good standing with the finance company, they may allow you to borrow some money. You can call or go into the finance company’s office to see if you qualify for a personal loan. If you qualify, you may walk out of the office with a check.

Credit Brokers Warned Over Unfair Business Practices

2011-03-09T03:56:00.000-08:00

Credit brokers in the UK are being warned they could lose their licences unless they improve their methods of dealing with customers’ upfront fees.

Credit brokerage refers to the practice of introducing customers seeking credit or goods on hire to businesses that provide credit, or other credit brokers .

The warning from the Office of Fair trading (OFT) comes after the watchdog recently revoked the credit licences of two associated businesses, NIZ Financial (UK) Ltd and First Money Direct Ltd, for unfair business practices.

The OFT said it was concerned that NIZ Financial (UK) Ltd and/or its associates had debited the current debit or credit cards of consumers without their authority; taken upfront brokerage fees when no loan had been provided or it was later offered at a higher APR/lower amount; and not refunded brokerage fees when told to do so.

NIZ Financial had also used a trading name, Bentley Cooper, which did not appear on its licence, the OFT added.

Both NIZ Financial (UK) Ltd and First Money Direct Ltd were associates of Carter and Carter Financial (Management) Limited, theloansupermarket.co.uk Limited, Easysteploans (UK) Limited and TLG Loans Limited, which were shut down by the Insolvency Service last May.

Small Business Administration yet to set rules on new loan program

2011-02-12T20:26:00.001-08:00

two-year program set up by Congress to help small businesses refinance their mortgages is already five months old, but business owners are still waiting for the SBA to release rules on how it will work.

A new federal loan program signed into law five months ago to help small businesses refinance the mortgages on their buildings could help save thousands of firms.

If only the program could get started.

Businesses can't apply for the loans or even determine if they qualify for them until the Small Business Administration releases rules for the program. The wait is not only problematic for stressed businesses, it's also eating up time.

As passed by Congress, the program runs for two years — beginning when the law was signed.

"We have less and less time to actually be able to use the program the longer the SBA takes to get the rules out," said Kurt Chilcott, president of CDC Small Business Finance, a nonprofit lender. "And what that means is there will be a limited number of small businesses that will be able to access the program."

The SBA, which provides loan guarantees and other help for small businesses, won't comment on why it's taking so long to develop regulations for the program. But spokeswoman Hayley Meadvin said officials always expected to release them some time this month.

"We're still on track to meet that goal," Meadvin said.

Loan to Pay Credit Card May be Bad Idea

2011-02-12T20:24:00.000-08:00

Dear Debt Adviser,
Is it possible to convert my credit card debt to a personal loan? If yes, will it affect my credit score?
-- Pondering P.

Dear Pondering,
Yes and yes!

It is definitely possible to convert your credit card debt to a personal loan. That is, as long as your credit is good enough to qualify for a personal loan. Many reasons come to mind for why you may be thinking about consolidating your debt into one loan. One, you may be looking for a lower interest rate and payment. Two, you may need the discipline enforced by a regular monthly payment as opposed to the choice to pay only the minimum amount due. Three, you may be unable to afford the minimum payments and need a loan with a monthly payment you can afford. Four, you may have maxed out your card and want to continue to overspend. Let's look at each of these four in more detail.

Finding a lower interest rate. To get a break on interest rates with a personal loan, you will need to have good to excellent credit -- FICO credit score range of 680 to 850. Interest rates are going to be higher on a personal loan than a secured loan, such as a mortgage or car loan. That's because the lender has no collateral to back the loan. So, unless you have really good credit, you may not qualify for a personal loan, or at least for an interest rate that would create a big savings for you. An alternative you might consider is transferring your credit card debt to one credit card with a low interest rate. Be sure you understand any transfer fees or one-time charges.

Locking in a payment. Should you want a more structured repayment that a personal loan provides, but you don't qualify for one, you have other choices. Under the right circumstances, you could consider a home equity loan to pay off the accounts with a regular monthly payment at a lower interest rate. Keep in mind if you choose this option that you are transferring unsecured debt to secured debt, and most likely lengthening the time it will take to pay off what you owe.

Lowering your payment. If you can no longer afford your monthly payments, you might consider contacting your creditors and asking for a hardship program. They frequently have programs that last for a set period of time to help you make more permanent arrangements to pay your regular balance due. They can't raise your rate just for asking, like they could in the pre-CARD Act days.

Increasing your spending limit. If you are maxed out, you could ask for a higher credit limit, but I don't recommend it. In this situation, I'd much prefer to see you close the account so you can't add to your balance, and pay at least the minimum while applying any windfall income like tax refunds or birthday money to the balance. It's no fun, but unless you stop charging, you'll never get out of debt.

As to your question about the effect of a personal loan on your score, yes it will lower it initially. Between the inquiry from the lender and the new credit line, you can expect it to negatively affect your score for a while. Once you show that you can manage the new credit over time, expect the negative impact to go away. The variety of accounts should then count in your favor and you may see a score increase.

My bottom line advice is to make the move to a personal loan or other financial solution only if you believe it will help you get out of debt and improve your overall financial situation.

Student loan cut worries colleges

2011-02-12T20:19:00.000-08:00

Concerned about the possible expiration of a federal loan program for low-income students, Joseph E. Aoun, Northeastern University president, is leading a coalition of university presidents urging President Obama’s administration to protect the low-interest loans.

More than 30 university presidents, including three from the Boston area, signed a Feb. 9 letter to US Education Secretary Arne Duncan expressing their concerns over the looming end of the Federal Perkins Loan Program. The program is set to expire in 2014.

“Ending this program would be directly at odds with President Obama’s ambitious goal for the US to have the highest proportion of college graduates in the world by 2020,’’ said the letter signed locally by Aoun; Robert A. Brown, president of Boston University, and Lawrence S. Bacow, president of Tufts University. “We want to work with you to find a solution.’’

The university leaders said in the letter that students who depend on the funds could be forced to drop out of college or take high-interest loans when the program expires. Some high school seniors might forgo college all together, the letter said.

“We need to find ways for fam ilies to go to college, and not curtail the opportunities for that,’’ Aoun said. He said Perkins loans are a critical bridge in education funding gaps.

Created by Congress in 1958, the Perkins program provides low-interest (5 percent) loans to low-income undergraduate and graduate students. Distributing the money is left to the discretion of universities, which often use it to fill gaps in students’ financial aid packages, administrators said.

The program annually awards about $1 billion in need-based aid to more the 500,000 students nationwide, according to the US Department of Education. Last year, loans averaged $2,125 per student, though undergraduates can borrow up to $5,500, the department said.

Despite the fact that Congress has not added capital to the program since 2004, more than 1,800 colleges and universities participated in the program last year, underscoring the higher education community’s commitment to the program, the letter said.

Six banking fees you could avoid

2010-11-04T03:30:00.000-07:00

If you have a bank account, there is a good chance you've paid an unnecessary fee at least once, whether it was a check you wrote but forgot about, or not keeping enough money as a buffer. But, with a little planning, you can avoid those fees and keep your cash where it belongs - in your wallet

Better Personal Loans For People With Bad Credit

2010-09-18T00:46:00.002-07:00

It’s not impossible to get personal loans for people with bad credit, but getting the right loan, at the best rate, takes some know how. We’ve all gone through some ups and downs in our lives with our finances, but just because you may be a little down right now, it doesn’t mean that there’s no hope.

Personal loans with bad credit are indeed out there, but before you make any decision that will impact your credit profile for the future, you should be doing some research, and asking some important questions to ensure that you don’t make the same mistakes that so many other people have. These then, are a few things you should be considering:

Is My Credit That Bad? There’s only one way to be sure, and that is to look at a copy of your credit report, which you can get for free from someone like Experian, Equifax, or TransUnion. People make mistakes, and you should examine your report to be sure that it is both error free and not out of date. You may end up being surprised, and able to save yourself some money.

Where Will You Get The Loan? Loan offers seem to be everywhere these days, from banks and credit cards, to credit unions and payday loans. While some of these are better offers than others, it is strongly suggested that you go online to double check rates. Since you are able to search a much wider network of lenders, your chances increase for getting a better loan.

Be Smart About Your Loan. You may receive a number of different personal loan offers, but besides choosing the best rate and terms, you should think carefully before accepting a large loan. Do you really need all that money? Typically, the smart move is to borrow only what you need, and try to pay it back quickly. Done correctly, you will be helping your credit score instead of worsening it.

Don’t Fall For A Bad Personal Loan.

This is where a financial adviser (FA) might come in handy, if you aren’t totally comfortable with the loan process. A FA is often able to offer more insight, as well as valuable tips and other information, which all might help to save you some money.

Just because times are tough, it is no reason to panic, or to make rash decisions—instead, do a little research and gather some helpful hints concerning getting a personal loan. The time that you take now will serve you will in the near and distant future, and will probably save you some money!

Home, personal loans to cost more

2010-09-18T00:46:00.001-07:00

The Reserve Bank of India (RBI) on Thursday hiked policy interest rates, sending a message to banks that they need to do the same for their loans. The silver lining is that interest rates on fixed deposits will also rise from the current 7-8% levels.

The RBI increased the repo rate (the rate at which it lends money to banks) by 25 basis points to 6% and the reverse repo rate (the rate at which the RBI takes out excess cash in the banking system) by 50 basis points to 5% with immediate effect.

The central bank did this primarily to contain inflation and to ‘normalise’ policy rates, considering the speed at which India’s economy is growing. Interest rate is a monetary tool used by central banks to ensure that a fast-growing economy doesn’t get out of hand — primarily, that prices of goods, or inflation, don’t spiral out of control due to excessive demand, the hallmark of fast-growing economies.

This is done essentially by controlling the amount of money floating in the economy by raising or lowering interest rates. When an economy declines, the opposite happens — central banks lower interest rates so that people are persuaded to buy goods and thereby generate demand.

“The RBI believes inflation has plateaued (and the declining trajectory inline with its projection), but it highlights that it will remain at ‘unacceptably’ high levels for a few more months.
It hence believes that there is a need for continued policy response to contain inflation and anchor inflation expectations,” said Ashutosh Datar, economist with the brokerage IIFL.

“The broad indication of the RBI action on Thursday is that lending rates will rise. We will take a call in a few days on increasing our personal and home loan rates because the impact of this rate hike will have to be passed on to consumers,” said Kamlesh Rao, executive vice president (personal loans and home finance), Kotak Mahindra Bank.

The timing of the hike will vary from bank to bank, depending on the cost of their money.

Citigroup exits student loan business

2010-09-18T00:43:00.000-07:00

Financial services giant Citigroup said Friday it will sell off its student loan business to Sallie Mae and Discover Financial Services, a move that consolidates the sector after the government took over much of the business.

Sallie Mae paid $1.2 billion and Discover paid $600 million, which comes after legislation passed in July that enabled the Education Department to issue new federal student loans.

"It's basically fallout from the government takeover of the federal student loan program," said Matt Snowling, an analyst with FBR Capital Markets.

In the deal, Sallie Mae will be able to collect payments and service $28 billion worth of existing loans that are backed by the federal government. Discover Financial Services took on $4 billion worth of private loans that do not carry federal guarantees but produce higher interest rate payments from borrowers.

Investors in Sallie Mae, which is moving from Reston to Delaware next year, cheered the deal, sending shares up 4.72 percent. They closed at $11.75.

Citigroup was able to sell off its 80 percent stake in what was known as Student Loan Corp. The remaining 20 percent of Student Loan Corp.'s shares trade publicly. Student Loan Corp. is the second-largest student lending business in the country behind Sallie Mae.

"We are one of four companies selected to service federal student loans on behalf of the federal government, and this transaction adds to that servicing business," said Sallie Mae spokeswoman Martha Holler. "We purchased assets that satisfy our target for asset quality and return on investments, and that would increase our customer base."

The student loans were part of Citigroup's portfolio of non-core assets that the company had identified as unnecessary.

"You are either one of the remaining servicers of student loans like Sallie Mae, or you are basically one of the companies just dealing with the runoff from this business," Snowling said. "I suspect Citi saw it was going to have to hold onto this portfolio for 15 years in a business in decline and decided to get whatever cash it could for it and move on."

Sallie Mae, formally known as SLM Corp., has been cutting jobs and restructuring as it adjusts to the new parameters in the wake of the July legislation.

It increasingly is moving towards servicing loans that are backed by the federal government and issuing private loans, although that sector has been shrinking. With the Citigroup deal, Sallie Mae will add 1.3 million new customers.

Customers seek personal loans to pay for surgery

2010-07-25T21:07:00.002-07:00

Personal loans used to pay for surgery.
New figures show that a significant amount of money is being borrowed to fund private surgery. Here, CompareandSave.com looks at how consumers are turning to personal loans to pay for medical and cosmetic procedures.

Cosmetic surgery on the rise

A growing number of people are opting to have cosmetic surgery, despite the financial difficulties presented by the recession. Figures from the British Association of Aesthetic Plastic Surgeons (BAAPS) revealed that the number of surgical procedures exceeded 36,400 in 2009, representing a 6.7% rise from 2008. Meanwhile, the UK's largest cosmetic surgery provider, the Harley Medical Group, published performance figures for the 2008-09 financial year which revealed overall growth of 4%, including a 23% increase in abdominoplasty and a 13% rise in liposuction.

The Harley Medical Group claims that both surgical and non-surgical procedures have become more popular despite the recession and new figures from Sainsbury's Bank suggest that many patients have been comparing personal loans in order to proceed with their cosmetic surgery ops.

Unsecured loans for surgery

According to the Sainsbury's Bank figures, Britons took out £11.57m in personal loans last year to pay for surgery. About 800 loans, accounting for nearly £5m of the total amount, were taken out by people planning cosmetic surgery, while the remaining £6.8m was borrowed to pay for other forms of elective surgery, such as hip replacements. Although joint replacement surgery is available on the NHS, patients often face a long and painful wait before they reach the front of the queue. For this reason, many patients prefer to find the £7,000 to £9,000 needed to have their hip replacement performed in a private hospital.

Steven Baillie, head of loans at Sainsbury's Finance, commented: "Although the majority of personal loans are taken out for the usual domestic reasons such as home improvements and buying cars, a significant number, even in today's economic climate, are used to fund more unusual expenditure such as cosmetic surgery."

Mr Baillie noted that anyone who is considering borrowing money to pay for a surgical procedure should compare personal loans carefully before filling out an application form, "as this could save you hundreds or thousands of pounds in repayments".

Banks start raising interest rates

2010-07-25T21:07:00.001-07:00

Local banks are raising interest rates for personal loans and mortgages after the Bank of Korea raised its key rate by 25 basis points to 2.25 percent on July 9.

According to industry sources yesterday, Citibank raised the interest rate for personal loans by as much as 12 basis points.

Three-month personal loan rates at Citibank increased 7.76 percent from 7.64 percent, while those for a one-year loans rose to 7.91 percent from 7.84 percent.

Hana Bank also raised rates for personal loans by 12 basis points following a 20 basis point increase last month, with loan rates ranging from 5.61 percent to 7.97 percent depending on the duration of the loan.

On July 9, immediately following the rate hike by the BOK, banks collectively raised mortgage loans tied to the value of 3-month certificate of deposits (CDs) by 17 basis points.

Housing loans tied to the cost of funds index, or Cofix, jumped 34 basis points.

Loans for small and midsized companies (SMEs) have also been affected by the interest rate hike.

Commercial banks have raised interest rates for SMEs from 2 basis points to 15 basis points.

The BOK interest rate hike is estimated to have increased the annual interest burden by 3.5 trillion won ($2.92 billion), particularly affecting lower-income borrowers and SMEs, which are subject to relatively high interest rates.

The calculation is based on an estimated 1,400 trillion in loans, including principal, that is held by companies and individuals.

In addition, citizens with low credit ratings are usually forced to turn to money lenders who charge sky-high interest rates since they have problems securing loans from banks.

Financial experts advise that new credit facilities should be established that would occupy the middle ground between banks, who charge interest rates of less than 10 percent, and private lenders, with 30 to 40 percent interest rates.

Hyun Oh-seok, the chairman of Korea Development Institute, warned that further interest rate hikes were likely.

He said in an interview with Yonhap that “the current key interest rate is at quite a low level” and “should be raised to gain room” for economic readjustments.

“If Korea reaches an economic growth rate of 6 percent this year and consumer prices rise 3 percent, a key interest rate of 3.15 percent is appropriate,” said Park Deok-bae, a fellow of the Hyundai Research Institute, in a report.

Payday loans: Helping people in their needs

2010-07-25T21:05:00.000-07:00

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China tells local govt to clean up investment agencies amid debt fears

2010-06-13T02:44:00.001-07:00

BEIJING (AP) - China's Cabinet ordered local governments Sunday to better manage their investment agencies amid concern that their borrowings — estimated at hundreds of billions of dollars — could cause problems for Chinese banks.

The State Council also directed banks to control lending to these agencies by targeting loans at specific projects and monitoring how the credit is used.

Chinese banks have escaped the mortgage-related turmoil that hit Western financial institutions and triggered the global economic downturn, but analysts warn that a lending boom driven by government stimulus spending could leave lenders with a mountain of bad loans.

In May, the State Council ordered a review of the investment agencies after the World Bank and central bank warned about debt levels and said banks could face losses if the agencies cannot repay their debts. Such agencies invested heavily in real estate and infrastructure as part of Beijing's stimulus spending.

"There are some problems that have occurred that require a high degree of attention," said a statement dated Thursday but only posted on the State Council's website Sunday.

"Mainly, the size of debt-financing of the financing platform companies has swelled rapidly, while their operations are not standardized," it said. Finance platform companies refers to the investment agencies.

Chinese media say local government investment agencies owe 6 trillion yuan ($880 billion) to state banks. An American researcher, Victor Shih of Northwestern University, estimates total local government borrowing in 2004-09 at 12 trillion yuan ($1.6 trillion).

The State Council statement said some banks and financial organs had poor risk awareness while investment agencies lacked adequate credit management.

Local governments, it said, have also broken rules. They are not allowed to use state-owned assets or government revenues to offer guarantees, directly or indirectly, for the investment agencies.

State banks were long expected to prop up government companies, lending to them regardless of their ability to repay. The government has written off some $400 billion in non-performing loans at state banks in the past decade.

The central government paid for only one-quarter of its 4 trillion yuan ($586 billion) stimulus plan. The rest came from state companies and borrowing by lower-level governments from state banks.

Personal loans increasingly used for education

2010-06-13T02:42:00.000-07:00

There has been a rise in the number of people taking out personal loans to pay for education, figures from Sainsbury's show.

If found that the cost of education increased by 5% in the 12 months leading up to February, with £37 million of personal loans taken out last year to meet the cost.

This includes university fees, private school fees and general costs associated with education, Sainsbury's Finance claimed.

Head of Loans Steven Baillie commented: "These rises can be hard to bear in difficult economic times, so it is not surprising to see many people taking out personal loans to help with this cost."

London has the highest annual spend per household in the UK, followed by the south-west and south-east, the study identified.

Figures from the Sutton Trust show four in ten (42%) of the UK's most prestigious scientists and scholars were educated at private schools.

Obama’s Loan Modification Plan – The Requisites to Qualify

2010-06-13T02:41:00.000-07:00

Under President Obama’s loan modification plan, many people get the chance for some relief and they get to avoid the awful experience of foreclosure. These individuals are able to change up their loan a little bit to keep from going into foreclosure, which is something that is welcome for both the lenders and for today’s home owners. Not every person who has a mortgage can get in on this program, though. The federal government is taking steps to make sure that this initiative reaches out to the people that it has targeted specifically. This means that speculators are left out in the cold.

In order to qualify for loan modification, individuals have to occupy the home and it must be their primary home. This means that vacation homes are not eligible and you cannot use loan modification if you own the home as an investment or rental property. The idea behind the entire program is to keep people from losing the place where they live, so you can see why these strong requisites would be in place. The lenders who participate in this program are currently requiring people to submit lots of documentation to prove that they actually reside in these homes.

Additionally, the loan must not be for more than an outstanding balance of just less than $750,000, which means that excessively large and valuable homes are not taken into consideration. This program is not for brand new loans, as the cutoff date is the first part of 2010. If your loan falls in these parameters, then you have a chance to re-work the terms. You will have to show some financial hardship, though, as that is a big part of the equation. One of the primary items that you will need to show is that the monthly payment is at least 37% of your gross monthly income.

The lenders in play here have been quite vigilant about confirming that people are actually in financial need. You have to show documentation with financial records and you have to sign an affidavit verifying the things that you are claiming.According to the definition given by the federal government, is a situation where one might have lost a job or a primary funding source. It can include a bad divorce, a death in the family, or perhaps even going onto disability. Each case is looked at separately, so qualifying will require one to put together a nicely stated case.

Should You Buy or Rent?

2010-03-20T20:47:00.000-07:00

Renting may be smarter if home prices in your area will fall further.

If you're a renter, you may be champing at the bit to buy a house after watching prices fall for four years. Is it time to jump? It may well be, especially if you want to capture the home buyer's tax credit (you'll need to have a contract by April 30 and close by June 30). But before you leap, you need to go beyond calculating the impact on your monthly budget and figure out how much home-price froth is left in your local housing market.

Bubble Zone
The price-rent ratio -- a city's median home price divided by median annual rent -- is one sign of how stable home prices are likely to be. We have included the average monthly mortgage payment (based on a 10 percent down payment and 5.3 percent interest rate for a 30-year fixed-rate mortgage) and median apartment rent.

Encouraging signs
A key number to consider when switching from renter to homeowner is the price-rent ratio. This figure compares a city's median home price with its median annual rent. At the housing market's peak in 2005, the national median home price had inflated to nearly 21 times the median annual rent. By the third quarter of 2009, however, the ratio had deflated to 15, returning to the historical norm, according to Hessam Nadji, managing director of Marcus & Millichap, a commercial real estate brokerage company in Encino, Cal.

If the price-rent ratio where you're looking to buy is 18 or higher, your market may still be in the bubble zone, with a greater probability that home prices will fall after you buy. That could put you underwater -- meaning your home would be worth less than what you owe on the mortgage. If the ratio has fallen below 15, there's less chance that home prices will sink.

The table on Rent or Buy above shows the ten cities in which home prices are least likely to drop further, as well as those most likely to fall further, based on price-rent ratios. We also show the gap between median monthly apartment rents and median monthly mortgage payments. Five years ago, the difference between monthly mortgage payments and rent was $745 nationally; by the end of 2009, it was just $181.

To get a rough estimate of your local price-rent ratio, divide the average list price of several homes that meet your criteria by the average annual rent of several rental units with the same number of bedrooms and comparable amenities.

Weighing the decision
A year ago, the price-rent ratio in Phoenix was 14 -- down from almost 19 a year earlier. Home prices had fallen by half, and mortgage rates were at historic lows. Financial planner Brendan McNamar decided it was finally time for him to buy. He had rented since moving to the city in 2006, just after the housing bubble peaked, and was sitting on a nice nest egg from a home he had sold in 2004.

McNamar shopped for a long time, made offers on several houses and eventually bought a ten-year-old, four-bedroom, three-bathroom short sale listed for $219,000. (In a short sale, the sellers get permission from the lender to sell for less than the mortgage amount.) The house had sold for $355,000 in 2007. McNamar offered the full price, which the bank eventually accepted after 90 days. He put down 20% and took out a 30-year mortgage with a low fixed rate of 5.25%. He pays $1,176 a month (including taxes and insurance), which is more than twice his former monthly rent of $550. But because he hadn't owned a home in the past three years, he was able to snag the $8,000 first-time home buyer's tax credit.

From an investment perspective, McNamar wanted a house that would allow him to break even or earn a profit if he sold in three years. But given that prices have fallen even further in Phoenix since last spring -- the price-rent ratio is a rough guide, not an infallible one -- he reckons that his break-even point now may be four years away. But it's not a big financial setback to him because he has no plans to move.

Good deals for renters
Renting can be a smart strategy while waiting for this choppy housing market to settle down. Consider Jeremy Portnoff and his wife, Heather, of Edison, N.J. By mid 2009, the median home price in Edison had fallen a healthy 19%, to $317,000, from the market's peak in mid 2006.

The Portnoffs had their heart set on a home with three or four bedrooms to accommodate the family they hope to have, plus an office for Jeremy. The house they could afford was a starter home, probably a small townhouse -- which, on an after-tax basis, they figured would cost them about the same as renting.

But the Portnoffs also figured that if they sold it in three years, real estate commissions would consume any gains they could reasonably expect. Plus, Jeremy believed that the price of their ideal home in that area would continue to decline.

So they took a pass on buying and got a great deal on renting a two-bedroom townhome -- $1,550 a month, $300 less than when they looked at the same development three years before. The couple prudently plan to continue to pay down debt and save for a larger down payment on their next home.

In some markets, rental prices have dropped as supply has increased. By the end of 2009, the vacancy rate nationally had grown to 8.2%, a 30-year high, according to Nadji, of Marcus & Millichap. Meanwhile, rents had fallen 5.8% from the year before.

Markets with the highest vacancy rates include Jacksonville, Fla. (forecast at 14% in 2010), Atlanta, Houston, Las Vegas, Orlando, Phoenix, Tampa and Tucson. Renters in such markets can afford to shop around and negotiate hard. A building's leasing manager may be willing to lower the rent to attract or keep your business.

Nadji expects the vacancy rate nationally to tighten up a bit (to 7.8%) by year-end and start a rapid recovery beginning in 2011, with very strong rent growth between 2011 and 2015. Demographics (five million people will enter the peak renter age range of 20 to 34 over the next decade) and plummeting construction starts in 2009 and 2010 drive his forecast.

Not all cities have an excess of rental units, though. In some large cities, such as New York, downtown Chicago, San Francisco, Los Angeles and Washington, D.C., vacancy rates have remained tight -- and home prices have remained stubbornly high.

Credit scores can drop after getting loan help

2010-03-20T20:46:00.001-07:00

WASHINGTON (AP) -- Some homeowners who sign up for the government's mortgage assistance program are getting a nasty surprise: Lower credit scores.

For borrowers who are making their payments on time but are on the verge of default, the Obama administration's loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job.

Housing counselors say it's unfair, especially because the news often comes as a surprise to homeowners.

"Why should people's credit be hurt even worse when they're trying to do the right thing?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York.

And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich.

"It's a feeling of being duped," she said.

Still, the impact is far less severe than a foreclosure, where borrowers typically find their credit is in tatters for years. That's due to the cumulative impact of many months of missed payments and the foreclosure itself, which drags down a homeowner's' credit by 150 points or more on a scale of 300 to 850.

To enroll in the Obama administration's $75 billion "Making Home Affordable" program, borrowers enter a trial period in which they make at least three payments. But some are finding out that their credit score takes a dive during this trial phase. It happens once their mortgage company notifies the three big credit bureaus -- Experian, Equifax and TransUnion.

For delinquent borrowers, the damage was done when they fell behind on their loans.

But for homeowners who are having financial troubles but managing to pay their bills, a request for a loan modification is the first sign of difficulty. And that means a sharp drop in the borrower's credit score.

The credit rating industry defends the practice. People who sign up for loan modifications would not be asking for help unless they were having severe money troubles, said Norm Magnuson, spokesman for the Consumer Data Industry Association, a trade group in Washington that represents the credit bureaus.

"The consumer is going into the program because they're in a financial bind," he said. "Other lenders would need to be aware of that."

The Obama administration acknowledges that enrolling in the program can hurt credit scores. But Meg Reilly, a Treasury Department spokeswoman, said that foreclosure "brings far more serious financial consequences for borrowers and their families."

The credit score issue is an unexpected consequence of the program that has been plagued with problems and disappointing results since its launch last year. Only about 170,000 homeowners had completed the process as of February. Hundreds of thousands more are still in limbo.

Jim Owens, 46, of Harrisburg, Ore., was accepted on a trial basis for the Obama plan last year.

He and his family were in bad financial shape. They were barely able to pay the mortgage and utility bills.

The main reason: After being laid off and unemployed for six months, he took a job as maintenance director at a retirement home. But it paid only around $25,000 year, about $10,000 less than his former job in a city public works department.

He and his wife were also struggling with debt, after taking out a second mortgage four years ago to pay off debt and medical bills.

Late last year, he was searching for a used sport-utility vehicle. He got a 30-day approval for $2,000 car loan.

But that time ran out before he found a car, so he had to reapply for the loan. He was shocked to learn that, after signing up for the Obama plan, he was denied.

"I should have been told," that this might happen, Owens said. "Without credit, you can't do a whole lot in life."

A Citi spokesman, Mark Rodgers, said the company follows the Treasury Department's guidelines for reporting to credit bureaus. "We do not determine credit scores," said Rodgers, who declined to comment on Owens' case.

The impact is worse for borrowers who enroll in the Obama program and are then ruled ineligible.

If homeowners do manage to get accepted into the Obama program and have their loans permanently modified, lenders update the credit bureaus. The new status neither hurts nor helps the borrower's credit score. Over time, they can see their score increase.

"The best way to build credit back is to continue to pay bills as agreed, to use credit wisely," said Tom Quinn, vice president of scoring solutions at Fair Issac Corp., which designed the well-known FICO score system. "As time goes on, the score gradually increases."

Credit scores can drop after getting loan help

2010-03-20T20:46:00.000-07:00

Stimulus Funding for SBA Loans Runs Out—Again

2010-02-21T01:57:00.000-08:00

In a case of legislative déjà vu, the Small Business Administration has announced that funding for two popular lending programs is on the verge of running out - again.

The government agency has encouraged lenders to make more loans to Main Street businesses by reducing the fees and by offering a 90% guarantee to banks that make SBA loans. The original $375 million in funding for these two measures, enacted as part of last February's stimulus bill, first ran dry last November. By mid-December, another $125 million was appropriated to continue the program through February 2010.

But those funds won't last until the end of the month. In fact, it is unlikely that they will last until Monday, according to the agency.

On Friday, SBA Administrator Karen Mills released a statement indicating that the funds "will be used faster than expected" and that "loan volume has surged since earlier this week," when the agency reminded lenders that the program would expire at the end of the month.

In response to the surge, the SBA announced that it will once again activate a loan queue. Per the protocol from last November, loans will be accepted one at a time as previously-approved loans fail to disburse or cancel. This process, according to the administrator's statement, will "ensure that every remaining dollar possible is made available."

The 90% guarantee and reduced fees have catalyzed SBA loan activity, even as conventional loans have continued to decline. According to the SBA, average weekly loan volume has increased by nearly 90% since the stimulus measures kicked in one year ago. Without another extension, SBA loans will return to previous guarantee levels, which typically max out at 75%. Likewise, fees that are charged to lenders and borrowers would be reinstated.

"The volume of SBA loans will drop dramatically if the stimulus provisions are not extended," says Tony Wilkinson, president and chief executive of lobbying group National Association of Government Guaranteed Lenders in Stillwater, Okla. Mr. Wilkinson says lenders need more capital to approve a 75% guarantee compared to a 90% guarantee. In addition, he says, "some borrower fees could be over $50,000 and that discourages borrowers from participating."

In recent months, President Obama and members of Congress have acknowledged that small businesses continue to have difficulty accessing capital and credit, particularly from banks and other traditional lenders. Both the House and Senate small business committees credit the stimulus provisions with making some financing available. The question is whether legislation, such as one bill introduced in December by Senator Mary Landrieu (D–La.), who heads the Senate Committee on Small Business and Entrepreneurship, will pass to extend those provisions once again.

"[The senator] is figuring out how to move this forward," says committee spokesperson Richard Carbo, adding that there has not been much opposition to the legislation thus far because the nature of the issue is relatively bipartisan. "This is not just about lending but also about creating the jobs."

China Tightens Rules on Personal, Working Capital Loans

2010-02-21T01:56:00.000-08:00

China tightened rules on personal and working capital loans to prevent them from being used for speculation after credit growth and asset prices gained.

Lenders shouldn’t “over-grant” the loans that companies use to finance goods and services and must reasonably calculate their “real demand,” the China Banking Regulatory Commission said in a statement today. The rules took effect on Feb. 12.

The tightening reflects concern that funds might have been diverted to stocks and property, raising the risk of asset bubbles and bad loans. Banks extended 19 percent of this year’s 7.5 trillion yuan ($1.1 trillion) lending target in January and property prices rose the most in 21 months.

The regulator will punish lenders that freely distribute working capital loans and companies that use such loans for purposes such as capital expenditure, stake investment and some other areas that the government doesn’t allow, CBRC said.

China took the second step in a month to restrain inflation and damp asset prices by ordering lenders on the eve of a weeklong holiday to set aside larger reserves. The benchmark Shanghai Composite Index has declined 7.9 percent this year to 3,018.13 on Feb. 12, before the reserve-ratio announcement.

Liu Mingkang, chairman of the banking regulator, said in an opinion piece in January that bank loans had been channeled into stock and property markets and the watchdog “stepped in to stop that.” China tightened rules on loans for homes, automobiles, fixed-asset investments and working capital to limit speculative flows.

For personal loans, advances exceeding 300,000 yuan will be given directly to the borrower’s counterparty, rather than the borrower, CBRC said in a separate statement. The rules were also effective on Feb. 12.

Banks will be barred from issuing personal loans without identifying the intended use and they must meet the borrowers in person before granting credit to avoid fraud, the CBRC said.

Draft rules were announced in July and October, respectively.

US Bank Business Loans Down $600 Mln In Latest Week

2010-01-10T01:19:00.000-08:00

WASHINGTON (Dow Jones)--U.S. banks' commercial and industrial loans fell $600 million to about $1.338 trillion in the week ended Dec. 30, the latest week for which data are available, the Federal Reserve said Friday.

That followed a $6.6 billion increase the previous week.

Jumbo certificates of deposit grew $9.2 billion to about $1.908 trillion in the latest weekly data, after growing $7.7 billion the previous week. Revolving home equity loans fell $900 million to $600 billion after falling $700 million the previous week.

30-year home loan rates drop to 5.09 percent

2010-01-10T01:18:00.000-08:00

Rates for 30-year home loans inched downward last week, the first decline in a month, but remained above last month's record lows.
The average rate on a 30-year fixed mortgage was 5.09 percent last week, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday.

Rates dropped to a record low of 4.71 percent in early December, pushed down by an aggressive government campaign to reduce consumers' borrowing costs, but then rose steadily for the rest of the month.

The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring.

The average rate on a 15-year fixed-rate mortgage fell to 4.5 percent, down from 4.54 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.44 percent, unchanged from a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.31 percent from 4.33 percent.

TEXT-Fitch affirms Ariz. Educational Loan Marketing notes

2009-12-28T20:07:00.000-08:00

The following statement was released by the rating agency) Dec 28 - Fitch Ratings affirms and maintains the Stable Rating Outlook on
the senior student loan notes of the Arizona Educational Loan Marketing Corp
(1992-2003) Trust Indenture (AELMAC). The trust has been producing excess
spread, and the parity for the senior notes is at 281.78% as of September 2009
and increasing. A complete list of rating actions is at the end of this press
release.
Fitch's Global Structured Finance Rating Criteria were used to review the
ratings and the affirmation is based on the performance of the trust in-line
with the expectation. The existence of auction rate securities has not had a
significant impact on the trust performance. The Stable Outlook has been
maintained because, with the significant buildup of parity for the senior
notes, the ratings are expected to remain stable for the next two years. The
subordinate student loan notes will be reviewed separately upon the completion
of the updated basis risk analysis.
The collateral supporting AELMAC (1992-2003) notes consists entirely of
federally guaranteed student loans originated under the Federal Family
Education Loan Program (FFELP). FFELP loans are guaranteed at least 97% of
principal and accrued interest, depending on the loan origination date.
Currently, 100% of the loans are serviced by Sallie Mae, Inc., not rated by
Fitch.
Fitch affirms the ratings and maintains the Outlook on the following senior
classes of AELMAC (1992-2003) notes:
--Class 1998 A-3 at 'AAA/LS1'; Outlook Stable;
--Class 2001 A-3 at 'AAA/LS1'; Outlook Stable;
--Class 2001 A-4 at 'AAA/LS1'; Outlook Stable;
--Class 2001 A-5 at 'AAA/LS1'; Outlook Stable;
--Class 2003 A-1C at 'AAA/LS1'; Outlook Stable.
The following applicable criteria report is available on Fitch's web site at
'www.fitchratings.com': 'Global Structured Finance Rating Criteria' dated Sept.
30, 2009.
Contact: Emily Lee +1-212-908-0667 or Aoto Kenmochi +1-212-908-0867, New York.
Additional information is available at 'www.fitchratings.com'.
(New York Ratings Team)

Personal loans get carbuyer boost

2009-12-11T01:43:00.001-08:00

The personal loan sector is to be boosted by the continuing strength of customer demand for cars, a provider has said.

According to Sainsbury's Finance, around 8% of UK adults, or 3.7 million people, have either bought or are planning to buy a used car over the six months to February 2010.

Around £5,323 per vehicle will be spent on each of these purchases, with 13% of total costs being met via personal loan finance.

Sainsbury's also pointed out that the government's car scrappage scheme, through which customers can swap their old cars for a new vehicle in exchange for £2,000, has impacted on loan demand.

According to the firm's own figures, the typical value of car purchase loans has increased by 37% since the introduction of the scheme earlier this year.

Steven Baillie, head of Sainsbury's Loans, said: "It can of course be significantly cheaper to buy a second-hand car but buyers and sellers could save even more money if they do their homework.

"Sellers should for example ensure they understand the car's value in relation to the market so that they get the best deal - valuation calculators can be found online."

Demand for second-hand vehicles was revealed to be highest in Scotland, where 15% of adults will make the purchases over the six-month period.

Payday loan 'carries 994% APR'

2009-12-11T01:42:00.001-08:00

Customers who take out payday loans by text message are being charged APRs approaching 1,000%.

TxtLoan offers short-term credit via phone applications and has attracted around 15,000 customers since being launched in April 2009, the Guardian reported.

A total of £110 must be paid back by those who borrow a seven-day TxtLoan of £100.

This represents an APR of 994%.

By way of contrast, many mainstream providers offer personal loans of a much higher value and single digit APRs.

Figures from the Guardian suggest that costs can spiral quickly if the TxtLoan credit is not paid back on time.

By day 23, the amount owed by the customer rises to £200 due to late payment charges.

Speaking to the newspaper, a TxtLoan representative pointed out that the loans were best suited to customers who face sudden emergency cash crises.

"The nature of the service makes it a viable alternative to incurring unauthorised overdraft charges," the spokesman said.

TxtLoan's website also clearly sets out its various fees and penalty charges.

The firm also subjects applicants to credit checks and does not lend to those who have been declared bankrupt or were visited by a debt collector in the past 18 months.

Cash for clunkers 'doubles personal loan volumes'

2009-12-11T01:41:00.000-08:00

The car scrappage scheme doubled both the volume and value of personal loans approved by M&S Money over the summer of 2009.

In a new report, the personal loans provider said that the government policy has provided a significant boost to the sector.

Launched in April, the scheme offers drivers a financial incentive of £2,000 to trade their current vehicle in for a new model.

Only cars registered on or before August 31st 1999 qualify, leading the scheme to be widely dubbed as offering "cash for clunkers".

M&S Money also announced that it will reduce typical APRs on its personal loans from 9.9% to 8.7% from today (November 5th).

However, this reduction only applies for loans of between £7,500 and £15,000.

Colin Kersley, M&S Money chief executive, said: "It's good to see that increased numbers of customers have been able to change to new, more environmentally friendly models [through the scheme].

"With the new offer we hope that more will be able to upgrade their cars."

Figures from Sainsbury's Finance released earlier this week suggest that 26% of the financing used to buy new cars between September 2009 and February 2010 will be provided by personal loans.

Bill could revamp student loans

2009-09-17T03:46:00.000-07:00

WASHINGTON -- As more college students seek financial aid in the troubled economy, the U.S. House of Representatives today is set to overhaul the nation's student loan system.

For students, little in the application process would change beyond a shorter and more simplified form. But more money could be coming their way, and Congress would rework the bureaucracy to potentially save $87 billion in the next decade.

"Overall, it saves a lot of money and allows more money to go into college loans over 10 years," said U.S. Rep. Bob Etheridge, a Lillington Democrat. "It really gets the money into the schools rather than the financial institutions."

The bill would cut out banks and other private lenders who now are subsidized by federal taxpayers. Instead, all lending would be done through the federal government -- a switch that has some critics calling the proposal yet another government takeover.

The money saved by the switch would pay for education programs, including increases in Pell Grants for low-income students. The federal government would plow billions of dollars into programs to increase graduation rates, boost historically black colleges, and expand access to two-year community colleges.

"We have to educate our way to a better economy," Education Secretary Arne Duncan said to reporters this week. "This represents a better investment and commitment to our nation's young people."

But those opposed to the bill say it kills the free market.

"This legislation bears many of the hallmarks of a big government takeover," said U.S. Rep. Virginia Foxx, a Banner Elk Republican and former community college president, in a prepared statement.

"Not only will the government now completely dominate the student loan industry, but thousands of jobs will be destroyed and students will be rewarded with fewer choices," she said.

Democrats say the bill as it stands would save money and allow the government to pay down the deficit. But the nonpartisan Congressional Budget Office found last week that economic changes could boost spending overall by $10.5 billion.

The legislation comes as colleges are swamped with needy students.

UNC-Chapel Hill financial aid director Shirley Ort said 17 percent more students are applying for financial aid this year, and 23 percent more qualify for need-based assistance.

"We've never seen anything like that before," Ort said.

In North Carolina, student aid requests for the UNC system and private colleges have jumped 10 percent in the past year, according to Steve Brooks, executive director of the N.C. State Education Assistance Authority. For community colleges, the increase is 30 percent.

Both Brooks and Ort said that though they appreciate the increased financial aid, they're troubled by some of the legislation's provisions. Most significant, the bill would cut out the state education authority's work issuing federal loans in favor of direct government loans.

Ort said many in the state's financial aid community want to see private loans issued as they are now, with the assistance authority often as the preferred lender.

"We realize that may not happen," Ort said. "We think for years they've given us what one writer called 'dirt-cheap loans,' and they've helped generations of our students here."

A provision sponsored by Etheridge and Rep. David Price of Chapel Hill, both Democrats, tries to make up for some of the potential loss. The provision would allow nonprofit agencies to contract with the Department of Education for other loan-related work such as financial counseling.

The legislation is expected to pass today in the House.

It then goes to the Senate, where the education committee is scheduled to vote this month. North Carolina's senators, Democrat Kay Hagan and Republican Richard Burr, sit on the committee.

Wells Fargo CEO Sees Bad Loans Rising

2009-09-17T03:43:00.000-07:00

NEW YORK -- Wells Fargo & Co. Chief Executive John Stumpf reiterated Wednesday that he expects the San Francisco bank's nonperforming assets, or troubled loans, to increase next quarter. He also said the bank has used 21% of its credits for losses tied to some commercial and foreign loans from Wachovia Corp., which Wells Fargo purchased last year.

Speaking at a financial services conference in New York hosted by Barclays PLC, Mr. Stumpf said Wells Fargo has used $2.2 billion of an available $10.4 billion in credits for losses from the most troubled of Wachovia's commercial and foreign loans. Wells Fargo has a remaining $8.2 billion to cover future losses from the loans, which include mortgages tied to commercial properties like office buildings and housing developments.

Separately, Mr. Stumpf said he expects the bank's levels of nonperforming loans, or loans that may become uncollectible, to increase.

"Considering the current economic environment, we would expect our nonperforming assets to continue to increase," Mr. Stumpf said.

Wells Fargo issued a similar forecast when it reported its earnings for the second quarter.

Mr. Stumpf's message is a contrast to remarks on Tuesday from the chief executive of Regions Financial Corp., C. Dowd Ritter, who said nonperforming loans at his regional bank, based in Birmingham, Ala., likely peaked in the second quarter.

Shares in Wells Fargo were recently up 86 cents, 3%, to $29.44.

Wells Fargo bought its teetering rival, Wachovia for $12.7 billion at the end of last year after the Charlotte, N.C., bank began to crumble under losses from billions in risky home loans. A crucial component of Wells Fargo's merger of the two banks is whether Wachovia's piles of risky real-estate loans perform as Wells Fargo initially expected over the coming quarters and years.

During this decade, Wachovia expanded aggressively into mortgages for commercial properties such as housing developments and office buildings. Analysts widely expect commercial real-estate loans to hit banks with heavy losses over the coming year since losses from commercial loans typically rise months or years after losses from home loans surface.

At the time of the purchase, Wells Fargo was permitted by accounting rules to declare $96.2 billion of Wachovia's loans as "credit-impaired," or likely to produce losses. Wells Fargo was allowed to immediately write off the $40.9 billion losses it expected those loans to generate in order to prevent the bank from being damaged by Wachovia's loan troubles.

Of the $40.9 billion in credits for Wachovia losses, Wells Fargo said Wednesday that it has used $3.8 billion thus far to offset losses on Pick-A-Pay loans, a risky type of home mortgage.

"Overall, our impaired loans, including Pick-A-Pay and commercial real estate, have performed in line with our original expectations," Mr. Stumpf said. He called those loans "the two loan portfolios of most interest to investors."

Wachovia issued more than $120 billion of the risky home loans, which offered borrowers the option of four monthly payments, including a minimum payment that increased the loan's balance.

Wells Fargo expects the most troubled Pick-A-Pay loans, whose losses can be covered by the credits, to generate another $22.7 billion in losses.

FDIC Completes Pilot Troubled Loan Sale

2009-09-17T03:41:00.000-07:00

The U.S. government said Wednesday it was moving forward with a test program to help deal with the toxic loans still weighing on bank balance sheets, providing a glimmer of hope on an issue that has repeatedly stymied policy makers.

The Federal Deposit Insurance Corp. said Fort Worth, Texas-based Residential Credit Solutions had the winning bid to take part in the program to offload troubled real estate assets from both failed and still solvent banks. Residential Credit Solutions, which services mortgage loans, will pay $64.2 million in cash for an equity stake in a $1.3 billion portfolio of residential mortgage loans seized by the FDIC when a Texas-based bank failed last year.

The transaction is likely to be closely watched by investors and public officials eager to see if it resolves the issue of how banks will deal with the troubled assets on their balance sheets. The Treasury Department, FDIC and other government agencies have introduced a number of programs to deal with the problem, with little success to this point.

FDIC officials, discussing the transaction with reporters, said the goal of the Legacy Loans Program continues to be to "cleanse balance sheets to put banks in a position to raise capital."

The FDIC said the transaction with Residential Credit Solutions will give the firm an ownership stake in a newly created limited liability company that will receive the $1.3 billion loan portfolio from the FDIC, which has held the loans since the failure of Franklin Bank last November. In return for the portfolio, the new limited-liability company will issue a government-backed note worth $727.8 million to the FDIC, which the agency said it would likely sell into the open market in the future.

FDIC officials said that the transaction will likely mean the government receives 70 cents on the dollar for the portfolio, much higher than the 50 cents on the dollar that regulators originally expected to receive for the troubled mortgage loans. That should in turn reduce the $1.6 billion estimated loss the FDIC originally forecast when it took over Franklin Bank.

"It will be reducing the expected losses from Franklin because we are obtaining a higher expected return on the loan portfolio," and FDIC official told reporters.

The FDIC's troubled loan program was originally targeted at assets held by open institutions, but officials suggested Wednesday that the pilot program, if successful, could become another option for the growing collection of assets the FDIC holds as a receiver for failed banks. Officials said the FDIC has around $30 billion in assets in receivership, a figure expected to get larger as banks continue to fail at increased rates.

"We are likely to use a similar type of structure for the sale of assets, particularly distressed assets, for failed institutions," an agency official said.

Personal Loans for Bad Credit – Lower Interest Rates in September?

2009-08-27T18:49:00.000-07:00

Personal loans for bad credit are a financial tool that some struggling Americans are using to help get them by in this struggling economy. We are now living in an era of poor credit loans and bad credit mortgages so this should not come as much of a surprise. The salaries that many hard working Americans used to live off of is either not enough or gone altogether. Many workers have seen steep pay cuts or job termination. It makes it extremely hard to pay the bills when you aren’t making the same amount you used to make.

Knowing this, some Americans are resorting to personal loans for bad credit. For most smart financial minds this may seem ludicrous as you are digging deeper in debt to pay off debt. Well, that is definitely the case, but when you are put in a terrible position sometimes desperate times call for desperate measures. The one thing that we do know is that the economy will eventually get better. It may take three months, three years or three decades but eventually it will get better. We just have to bide our time to get back on our feet financially. The one good thing is that lower interest rates might be coming in September because the Federal Reserve Bank continues to push long term interest rates lower.

Many families feel that if they can just make ends meet for the time being that they can build there human capital which will help them make their financial ends meet in the very near future. The positive frame of mind is excellent but some people are finding that the more they dig themselves in debt, the harder the future is going to be. By using bad credit credit cards and signing bad credit mortgages, you are essentially admitting that it is going to take you several years to have a strong financial life. Unfortunately, this is the way it is for some Americans now.

Ultimately getting a personal loan for bad credit is not the best thing in the world but sometimes it is the best option. When you have bills to pay and you have no money, sometimes the interest rate on the loan does not matter if you can have the reassurance that bills are going to be paid on time. Sometimes we just need a few months worth of bills to get paid and then we can get back on our feet and figure out the next steps to make ends meet financially.

There are many companies out there that are offering personal loans for bad credit and it would be a very good idea to contact several of these companies before you decide on a bad credit lender. If you are good at getting a deal, you can use an offer that one company gave you against another. Many of these companies are strongly pursuing getting first time customers so they may offer you a lower interest rate and extra incentives. You never know until you try!

Easy and quick personal loans - what interest rate will you get?

2009-08-27T18:47:00.000-07:00

Easy and quick personal loans are something that many Americans are looking to go get by financially. In an era of poor credit loans, people of need some type of financial assistance to make ends meet. Credit scores have fallen while the unemployment rate has increased which has caused many struggles in America. The government is trying to help out by keeping mortgage rates at extremely lows but not everyone can get the low interest rates out there.

Throughout much of the recession many banks and lenders had to turn into some type of bad credit lender because so many people are now considered bad credit. There are only a few lenders, such as Wells Fargo, that have totally avoided the subprime borrower. It is highly likely that many more banks and financial institutions are going to resort to bad credit lending in the near future just so they can make the money to survive.

Easy and quick personal loans are not always considered to be a bad credit loan, but that is often the case today. If you are considered bad credit, it is likely that the interest rate that you will get is not going to be that great. The one good thing about the downturn in the economy is that there are many companies out there that are willing to work very hard to supply you with your personal loans. There are even some companies that will be willing to offer you a no credit check loan just to get your business.

Debt

2009-08-27T18:37:00.000-07:00

Debt is a word that strikes fear into the hearts of many people all over the United Kingdom, as it has become synonymous with anxiety and suffering. This is because once an individual takes on a considerably amount of Debt, it can be very difficult for him or her to get back to normal. Therefore, if this has become a problem for you, you will want to take a look at the various options that are available for you. The first option is to slowly pay off your bills until you slowly get yourself straightened out. This can be difficult, however, as creditors will call you non-stop and once you have one month paid off, another month will be waiting for you. Another option is to file for bankruptcy, which will allow for many of your payments to be forgiven. Unfortunately, this option will prevent you from financing anything for a long time and does not necessarily mean that you are out of Debt.

Therefore, getting out of Debt takes some creative thinking, as you must consider things like consolidation and management. Consolidation involved your Debt being paid off by a third party and then you will be responsible for paying this third party. While this will not eliminate your problems, it will make them much more manageable. Another method of lessening Debt is management. There are companies out there that will help you with this process and many of them will call individual creditors for you and help you to work out a payment plan. In the end, you will pay the management company every month and they will pay your bills for you.

With all of the options for getting out of Debt available, there is no reason for these problems to keep you up at nigh ever again. Debt does not have to be a lifelong problem if you take the proper steps to take care of them.

Homeowners fight for loan modifications from swamped mortgage servicers

2009-08-18T22:30:00.000-07:00

DALLAS - After losing his job in January, Stuart Miller has fought hard to keep his home out of foreclosure.

At the end of May, the 55-year-old Plano, Texas, man began trying to get Wells Fargo & Co. to review his application for a loan modification.

After making repeated calls, he finally was told that the company would place a three-month moratorium on his mortgage payments.

"They're going to give me July, August and September, but I haven't paid June yet," said Miller, a former trainer for a franchise company.

He's among many struggling homeowners who say their attempts to get a loan modification have been met with either long waits to get their case reviewed, no response at all or a runaround.

The Obama administration is leaning on mortgage servicers - the companies that collect and process mortgage payments - to step up modifications.

A report released last week by the Treasury Department showed wide variations in how quickly mortgage companies are helping troubled homeowners avoid foreclosures.

It also found the government's program is helping only a tiny fraction of struggling homeowners. As of July, only 9 percent of eligible borrowers had seen their mortgage payments reduced with modified loans, the report said.

"Much more progress is needed," Treasury Secretary Timothy Geithner and Shaun Donovan, secretary for Housing and Urban Development, wrote in a letter to mortgage companies. "There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications."

Mortgage servicers said they're committed to working out more loan modifications, but they're overwhelmed by the number of homeowners all wanting help at the same time.

"It's a new ballgame," said John Dalton, president of the Financial Services Roundtable's Housing Policy Council. "The delay is the fact that we've got 3 million people today who are 60 days past due on their loans. These servicers have not been accustomed to and were not geared up to deal with that many incoming calls with people having difficulty."

The industry also is reinventing itself to add loan modifications to its traditional role as the collector and processor of mortgage payments, he said.

"Loan modifications are a relatively new thing," Dalton said.

A loan modification is different from a traditional mortgage refinancing. When you refinance, you sign a new contract for a new loan. A loan modification involves changing the existing loan by lengthening its term or lowering the interest rate so that you can continue to afford your mortgage payment.

Homeowners may be eligible for a loan modification if they have a mortgage payment greater than 31 percent of their monthly gross income and can document that a financial hardship has made the payment unaffordable.

Miller, the Plano homeowner, hopes he will soon receive a confirmation letter from Wells Fargo with the details of his loan modification. He said the process he underwent to get to this point was frustrating.

"My frustration is the time that it takes," Miller said. "They have control of my financial life, and I can't talk to a decision-maker. They literally get to say whether I get to live in my house or my life gets completely turned upside-down, and I am literally at their mercy."

Wells Fargo officials said they're reviewing his situation.

"While the majority of our customers who request help are getting through to us and receiving the help they need, we know we've fallen short of our customer service goals in some cases," Mike Heid, co-president of Wells Fargo Home Mortgage, said this week. "We've recently undertaken new steps that will soon enable us to qualify most borrowers (for a modification)."

After I called a Wells Fargo spokesman for a response to Miller's situation, a company representative contacted him and told him that the financial institution would not report his delinquency to credit bureaus until his situation's resolved.

"I feel better now that I have a name of a person to talk to," Miller said.

Bonnie Mathias of Dallas hopes for a similar outcome. She has applied for a loan modification with her servicer, CitiMortgage.

"It's been a nightmare," said Mathias, a customer service representative at AT&T Advertising Solutions.

Her husband's company, which sold commercial exercise equipment, went out of business last September. He found another job, but his income is lower now.

Mathias applied for a loan modification in February.

"I'm having a difficult time getting my counselor from CitiMortgage to contact me," said Mathias, a chapter leader at ACORN, the community organization that has been putting pressure on mortgage companies to help struggling homeowners. "This is my second counselor, and I have yet to talk to either one of them."

Mathias received a letter last month from a Citi representative saying she had been trying to reach Mathias.

"I have left four messages on her voice mail," she said.

Despite the difficulty, Mathias doesn't plan to give up and advises others to do the same.

"Persistence absolutely is the key," she said. "Do not give up."

When you apply, have at the ready the necessary documents, such as tax returns, pay stubs and a letter describing why your mortgage is unaffordable, and what caused your income to fall or expenses to rise. Not having the necessary documents will gum up the process of getting a loan modification.

And if anyone says you have to be behind on your mortgage payment to be eligible, don't believe them.

Homeowners are eligible if they are "at risk of imminent default."

Unfortunately, many responsible homeowners have been thrown into financial chaos by the sour economy and are now at risk of default.

They're making desperate, good-faith attempts to save their homes. It behooves mortgage servicers to move much faster to help those people.

A Last-Minute Dash for Tuition

2009-08-18T22:24:00.000-07:00

Weeks or even days before classes start, hundreds of thousands of college students nationwide still don't know whether they'll be able to cover their tuition bills this year.

In Michigan, the state legislature continues to battle over the Michigan Promise Grant, a merit award of up to $4,000 given to 96,700 students. The State Senate recently passed a bill to cut it entirely and eliminate another $56 million in need-based aid for this school year.

In Illinois, the need-based Monetary Award Program was halved last month, leaving about 145,000 students without a spring-semester payout. The full award used to total nearly $5,000.
In Utah, the state cut the tuition subsidy to 40% from 75% in its New Century Scholarship, a merit program in which students earn their associates degrees while in high school.

And in Pennsylvania, a state budget impasse is leaving 172,000 students unsure what funding they'll get from the state Higher Education Assistance Agency. The maximum award is slated to be $4,700 for students who attend in-state schools.

Even where state budgets are more secure, parental layoffs and shrinking savings accounts have imperiled college funding for many, sending students and their parents scrambling to find last-minute sources of money for school.

"Without a doubt, this year is different from the past," says Rob Reddy, director of financial aid at Oberlin College in Ohio. The school, which charges an average of $50,484 for tuition, fees, books and board for the upcoming academic year, has seen hundreds of financial-aid appeals and other requests from families in extreme financial duress.

Paige Neff, an incoming junior at Brigham Young University in Utah, has applied for six separate jobs since finding out two weeks ago that her New Century Scholarship would cover only 40% of her tuition rather than the expected 75%. A school-funded scholarship will fill some of that gap, but she must still come up with money for her room, board and living expenses.

"I don't know exactly how I'm going to get that money," says Ms. Neff, 18 years old, who didn't qualify for need-based federal loans. "I'm scrambling to find work." She estimates that if she can find a job that pays $8 an hour, she'll need to put in 20 hours a week to cover housing and food—but she worries that her grades will slip.

Most students file for financial aid months before the start of the academic year, and high-profile scholarships are often awarded a full year before the funds are disbursed. Some money is still available from federal, school and private sources right before and even during the school year. But sources of state-based grants are drying up. And private lenders, to whom students often turn for extra help, are shying away from riskier borrowers with little credit history. Once they exhaust federal and school funding, students may be forced to defer or shift to part-time status, switch schools or give up entirely.

Cheaper Options
Some are deciding against attending their dream schools and are seeking cheaper options closer to home. Dylan Cinti, 18, of Ann Arbor, Mich., is starting at the University of Michigan's Honors Program a mile away from home this fall after his first choice, the University of Chicago, didn't offer him any aid. Federal Stafford loans barely made a dent in Chicago's $54,340 tuition and fees, and his parents, who still have another child to put through school, discouraged him from taking on pricey private loans. The in-state tuition at his final choice is much more affordable.

"When I got into Chicago, I was really excited to go there. It had been my first-choice school since ninth grade," says Mr. Cinti, 18. "But I would feel kind of guilty being at Chicago knowing that my family is paying more than they could afford."

Mr. Cinti's college counselor at Community High School in Ann Arbor, John Boshoven, says about half of the school's graduates who were admitted to Michigan usually attend. This year, it was closer to 90%.

Any student needing last-minute help should immediately contact the campus financial-aid office, say college-financing experts. There, staffers can point families toward available loans or grants or even recalculate aid offers under what's known as a "professional judgment."

"If a parent loses their job, or a student loses their job, if it's a significant decrease, and it changes their eligibility for Pell Grants or [state] grants, we'll take a look and make changes accordingly," says David Krueger, assistant director of financial aid at Illinois State University. The office will ask for documentation, such as medical bills or a pink slip.

Mr. Krueger's office—where about 20% of students were counting on state-funded Monetary Award Program grants—is particularly busy these days.

School aid offices will likely direct students to file the Free Application for Federal Student Aid. If they have already done so this year, students can't file a new application. But aid offices can also help them access additional federal funds that they may not have qualified for when they first applied.

All students can get up to $2,000 in unsubsidized federal Stafford loans. Those with financial need can take out other Stafford loans—as much as $5,500—as well as Pell Grants and low-interest Perkins loans. Aid officers say even parents should apply for government loans; if they are denied, their children will be eligible for higher Stafford loan limits.

Because many schools require at least some payment before registration, students who don't expect money to come through for weeks or months can pursue school-sponsored emergency loans. The terms are generally more attractive than private loans, from an interest-free loan of up to $300 at Purdue University to 7% for up to $1,500 at the University of Denver. Those loans are intended to be emergency stopgaps and require repayment in as little as a few weeks.

Students who still find tuition bills daunting can ask about tuition payment plans, which allow payments to be made in small installments. Southern Methodist University in Dallas, for example, offers a half-dozen options with terms ranging from four to 12 months, with enrollment fees of $50 to $150.

Some schools are releasing extra funds after finding their aid offices overwhelmed. Hiram College in Ohio, with about 1,000 students, raised $20,000 to provide needy students with one-time grants this year. And the University of Indianapolis, facing a drop in state aid, set aside up to $3 million for extra grants. But many institutions, facing their own budget problems, have come up dry.

Creative Financing
As a result, a number of students are looking elsewhere. Many are advertising their tuition needs on peer-to-peer lending Web sites such as Prosper.com, where groups of lenders provide funds directly to borrowers, or trade a portfolio of loan notes. Yet interest rates on such sites can climb to as high as 34%—far worse than even private bank loans.

Saving money on student loans

2009-08-18T22:21:00.000-07:00

Education is the key to getting a good job. The Census Bureau estimates that a college graduate will earn 75 percent on average more than someone who has only a high school diploma. Unfortunately, many college students graduate with a heavy burden of student loan debt.

To help the millions of Americans who are paying off federal student loans, Congress passed the College Cost Reduction and Access Act in 2007. Its provisions link repayment of student loans to income and family size. As a result, many borrowers are now able to cap their monthly loan payments at a reasonable percentage of personal income.

The new Income Based Repayment option is available to borrowers who are repaying new and existing federal student loans (either Direct Loans or Federal Family Education Loans). Those with high student loan debt relative to their income are likely to be eligible, resulting in reduced monthly payments and, in some cases, no monthly payments at all.

For example, someone with student loan debt of $25,000 at 6.8 percent interest would have a monthly payment of $288 under the standard 10-year repayment plan. Under the income-based program, if the borrower were single with no dependents and had an Adjusted Gross Income of $30,000, the monthly payment would drop to $172 per month, a reduction of $116 per month.

Payments are recalculated each year. (Note: lower payments, while more manageable, might result in longer repayment periods and increased total interest charges.)
Borrowers who work in public service jobs may be eligible for forgiveness of remaining loan balances after 10 years. Eligible public servants include firefighters, first responders, law enforcement officers, early childhood educators, public defenders and prosecutors, and men and women serving in the military.

The forgiveness program can be used in conjunction with Income-Based Repayment, but is available only in the Direct Loan Program. (Borrowers with Federal Family Education Loans can consolidate their loans into the Direct Loan Program in order to qualify.)

Other benefits that went into effect on July 1, 2009 include:

· Lower interest rates on need-based (subsidized) federal student loans. Interest rates on these loans dropped to 5.6 percent.

· Higher Pell Grant scholarships for low- and moderate-income students. Due to funding boosts provided by the American Recovery and Reinvestment Act, the maximum Pell Grant scholarship has increased to $5,550 – an $819 increase over two years ago. In future years, the size of the grant will increase at the same rate as inflation plus one percent.

In today’s economy, the need for financial aid is greater than ever. A recent study found that 40 percent of students who earned bachelor’s degrees in 2000 received at least one Pell Grant. The latest federal budget provides $129 billion in new grants, loans, and work-study assistance to help students get the education they need.

Treasury to Buy Small Business Loans, Report Says

2009-07-22T22:49:00.001-07:00

The Treasury Department is gearing up to start a $15 billion initiative to stimulate lending by the Small Business Administration by using funds from the federal bailout program to buy up SBA loans, The Washington Post reported.

The Treasury is putting the final touches on the program and could begin buying up the loans to small business within days, according to the newspaper.

The initiative, announced by the Obama administration in March, is intended to give the financing firms the ability to ramp up fresh lending after private investors grew reluctant last year about buying the SBA loans, The Post said.

While executives at some lenders told The Post that private financing for the SAB loans is already reviving, the newspaper noted that lenders still remain wary and the SAB loan markets remain vulnerable.

House Bill Would Make U.S. Sole Student Loan Provider

2009-07-14T21:41:00.000-07:00

The chairman of the U.S. House Education and Labor Committee is expected to introduce legislation Wednesday backing President Obama's proposal to eliminate private lenders from the federal student loan program and make the government the sole provider of such loans.

Banks and other private lenders made about $56.7 billion in government-guaranteed loans during the 2008-2009 school year; the direct loan program lent about $20.1 billion to students.

Under the proposal from Rep. George Miller, all new federal student loans -- the largest source of college aid -- would be made by the government's direct lending program as of July 1, 2010.

In recent months, private lenders have tried to convince the California Democrat to let them hold onto a piece of the market that they have dominated for years. Under a proposal they unveiled last week, the private lenders would still be able to make and service student loans but would eventually sell them to the government.

The lenders say they are more efficient and provide better service than the government's program. Lenders have said that a rapid transition to the direct loan program could cause chaos but the U.S. Department of Education maintains it can add sufficient loan processing capacity quickly.

The Congressional Budget Office estimates that relying on the federal direct loan program to make all loans would save about $87 billion over ten years.

Mirroring the president's proposal, Mr. Miller's bill would use $40 billion of that savings to increase Pell grants for low-income students and fund the $12 billion community college initiative that Mr. Obama announced earlier Tuesday in Michigan.

Some lending groups say they still hope to make changes in Mr. Miller's bill in the House although Brett Lief, president of the National Council of Higher Education Loan Programs, a trade group, said he holds little hope that existing lenders will be making student loans in the future. "I think all the capital will come from the federal treasury," he said.

John Dean, special council to the Consumer Bankers Association, a trade group representing lenders, said that while he expects the House to back whatever bill comes out of Mr. Miller's committee, it is likely to face more opposition in the Senate. "I don't think it's going to fly," he said.

Consumer loan delinquency hits record high in 1Q

2009-07-09T22:59:00.000-07:00

The number of people delinquent on loans rose to a record high in the first quarter, according to new data from the American Bankers Association.

The composite delinquency rate among eight types of closed-end installment loan categories increased to 3.23 percent of all accounts, from 3.22 percent in the previous quarter, the association said. Delinquency is defined as a payment that’s at least 30 days overdue.

The industry group blames the record wave of job losses as a major factor. More than 2 million Americans lost their jobs in the first three months of the year, and 6 million have lost their jobs since the recession began.

“Delinquencies won’t improve until companies start hiring again and we see a significant economic turnaround,” James Chessen, chief economist for the association, said in a release.

Bank card delinquencies rose to 4.75 percent of all accounts, from 4.52 percent in the previous quarter. But balances on those delinquent accounts rose to 6.6 percent of the value of all outstanding bank card debt — marking a record high — from 5.52 percent.

Chessen said the unemployed may be using bank cards to bridge a temporary income gap, especially with less home equity to fall back on as housing values continue to decrease.

Other delinquency rates on the rise in the first quarter:

• Home equity loan delinquencies increased to 3.52 percent of all loans from 3.03 percent.

• RV loan delinquencies rose to 1.52 percent from 1.38 percent.

• Mobile home loan delinquencies increased to 3.7 percent from 2.96 percent.

• Personal loan delinquencies grew to 3.47 percent from 2.88 percent.

• Direct auto loan delinquencies increased to 3.01 percent from 2.03 percent.

Loan delinquency rates in some categories posted a decrease over the quarter, the association said. Declines in delinquency rates were registered with property improvement loans, indirect auto loans and loans for boats and yachts.

Beginning Tomorrow, Student Loan Payments Will Become More Affordable for Millions of Americans

2009-06-30T23:41:00.000-07:00

Washington, D.C. – Speaker Nancy Pelosi issued the following statement today on a new initiative that will take effect tomorrow, July 1, that will make student loans more affordable by allowing borrowers to cap their monthly loan payments based on how much income they earn. This initiative, the Income-Based Repayment program, in conjunction with a lower interest rate on need-based student loans and an increase in Pell Grant scholarships, will help make college more affordable for millions of students.

"Our nation´s economic competitiveness depends on young Americans having access to the highest quality education available, regardless of financial need. That is why it is so significant that tomorrow we are launching a new initiative that will cap student loan payments in light of a borrower´s income.

"The Income-Based Repayment program will ensure that educational debt does not prevent our best and brightest students from pursuing their dreams. It also prioritizes national service by accelerating debt forgiveness for borrowers who devote themselves to public-interest careers. We need our college graduates to choose careers based on their talents and skills, rather than on the size of student loan payments.

"I am proud that the 110th Congress passed the largest investment in student financial aid since the GI Bill in 1944, the College Cost Reduction and Access Act. In addition to creating the Income-Based Repayment program, that legislation increased the maximum amount for need-based Pell Grants and slashed interest rates on need-based federal student loans. We cannot let the rising cost of education prevent the next generation of American leaders and innovators from realizing their full potential. Congress will continue to work to make education more affordable for all Americans."

Negative equity hits one in six prime mortgages

2009-06-23T22:13:00.000-07:00

Nearly one in six "prime" mortgages in the UK have fallen into negative equity, according to ratings agency Fitch. Households in Sunderland and Northampton are suffering most from the property crisis, it reveals.

Northern Rock has the most once-prime loans now in negative equity, said Fitch, with 32% of the mortgages in its controversial "Granite" book higher in value than the homes they are secured against.

The lender had specialised in offering 125% "Together mortgages" which combined a 100% home loan with a personal loan and were aimed at first-time buyers struggling to get on to the property ladder.

Bradford & Bingley, Birmingham Midshires and Alliance & Leicester – lenders the taxpayer has had to rescue – all have books of mortgages where one in five loans are in negative equity, said the report.

In a geographical analysis, Fitch found Northampton, Nottingham, Derby and Peterborough were the areas with the highest concentration of negative equity. In Northampton, 23.6% of mortgages are now bigger than the value of the property they were used to buy.

But it is a postcode in Sunderland, SR1, which is the UK's epicentre of negative equity. Fitch said that in the SR1 part of the city 43.7% of mortgages (by value) are higher than the current price of the property, and 28.1% by number.

On average, the debt over and above the mortgage in SR1 is just under £6,000. In contrast, in the Cambridgshire towns and villages covered by the postcode CB25, where 27.6% of mortgages are in negative equity, the average amount is £13,369.

Eurozone banks gear up for landmark ECB loan offer

2009-06-23T22:10:00.000-07:00

FRANKFURT (AFP) — Eurozone banks were expected to flock on Tuesday to an unprecedented loan offer at the European Central Bank, hungry for hundreds of billions of cheap euros (dollars) in what looks to be a landmark event.

The ECB said it would lend an unlimited amount of the single currency to banks for a full year for the first time at a record low rate of 1.0 percent, a move Goldman Sachs chief economist Erik Nielsen called monetary "easing by stealth."

The central bank has resisted the so-called quantitative easing practiced by the US Federal Reserve and Bank of England -- essentially printing money to buy government and private debt to boost recession-hit economies.

But the ECB has generated a flood of cash through loans that will now extend to 371 days, or 12 months, from three or six months in the past.

A previous one-day record of 348.6 billion euros (485 billion dollars) set in December 2007 could easily be surpassed, with Nielsen expecting a total of around 500 billion this time around.

Results of the operation were to be unveiled Wednesday, and many analysts reckoned banks would leap at the chance to get an unlimited one-year loan at the ECB's lowest rate ever.

The central bank has said that in subsequent one-year operations -- the next is scheduled for September 29 -- the rate could be higher depending on market conditions.

The practice of carry trades involves borrowing a currency at low rates to exchange it for another in which one can invest at higher rates.

By providing huge amounts of cash to commercial banks, the ECB aims to lower the cost of borrowing by companies and individuals, and spur economic activity.

Money markets influenced by central bank operations determine the availability of credit for vast numbers of people around the globe, from managers trying to fund their businesses to families and students seeking mortgages and personal loans.

Thai MPs approve 22-bln-dlr stimulus loan

2009-06-17T01:11:00.000-07:00

BANGKOK (AFP) — Thai MPs have approved two government bills to borrow 22 billion dollars for an economic stimulus package, despite a walkout by angry opposition legislators, premier Abhisit Vejjajiva has said.

The opposition, many of whom are loyal to ousted former prime minister Thaksin Shinawatra, refused to take part in the vote for the second of the bills after one of their members was ejected for using "improper" language.

The government has said that the 800-billion-baht loan, mainly from local money markets, will fund stimulus measures worth 1.4 trillion baht over the next three years as Thailand grapples with recession.

The lower house Tuesday overwhelmingly passed the first 400-billion-baht tranche of the money, while the second tranche was adopted early Wednesday after the opposition boycotted the session.

"They wanted to show their opposition... but I hope that the opposition will not do that today in the budget debate," Abhisit told reporters.

The Oxford-educated prime minister's shaky ruling coalition, led by his Democrat Party, began presenting its budget to parliament later Wednesday.

The opposition has said the bills for the stimulus package lack details, but Abhisit countered that they must explain to the public why they had boycotted the vote.

"We are very open for debate and it was the opposition who decided to walk out. We will explain every issue in the next two days' budget meetings which will be telecast live," he said.

The speaker of the lower house of parliament, Chai Chidchob, said he had asked an opposition member from the pro-Thaksin Puea Thai party to retract an "improper word" but he refused to do so during the overnight session.

"Since the member refused to retract those impolite words, I had to ask security to invite him out after he refused to comply," triggering the walkout, he told reporters.

The split over how to pull Thailand out of its worst economic crisis in more than a decade underscored the still simmering tensions in the kingdom since Thaksin was toppled in a military coup in 2006.

The country entered recession in the first quarter of this year as growth shrank by a bigger-than-expected 7.1 percent due to tumbling exports.

The government has also revised down its growth forecast for 2009 to between minus 2.5 and minus 3.5 percent.

Abhisit on Wednesday presented a budget of 1.7 trillion baht for the 2010 fiscal year, with a 350-million-baht deficit.

He said his cabinet would still be able to focus on key policies, despite making a 200-billion-baht cut from initial spending plans because of lower tax receipts.

"The government plans to restore confidence, stimulate the economic situation and create financial stability," Abhisit told parliament.

Thailand announced an initial 117-billion-baht stimulus package in January. Abhisit said on Sunday that the second package would create up to two million jobs.

Home Loan Interest Rates Easy Guide

2009-06-17T01:10:00.000-07:00

Interest rates represent the annual percentage and vary according to the amount borrowed, the profile and the loan to value. More precisely, the interest rate represents the amount of money clients pay monthly besides the loan rate, and it represents the profit the lender makes for borrowing money.

You should have decent funds or a good income to quality for a loan and make a nice real estate transaction. The major issue with home loan interest rates within the financial imbalance brought by the international crisis is that loan interest has a fluctuating tendency which is very much in the customer’s disadvantage.

The happiest of situations is when you get a home loan contract with fixed interest rates that remain unchanged until the full pay back. Many people do not pay enough attention to home loan interest rates because they get too enthusiastic about the chance they get to finance a home of their own.

Another little known aspect is that lenders and financiers have different policies concerning the interest rates. It has happened more than once for financial authorities to address criticisms and make sanctions for the home loan interest rates that have confusing conditions.

With financing companies you’ll hear a lot about adjustable and fixed interest rates or about balloon mortgages and unless you know what each refers to, it is easy to get entangled in the maze.

The fixed home loan interest rates are considered the most advantageous because there are not changes for the amount you pay monthly. The problem appears when there is a drop in the interest rate and the amount you pay is higher; for such cases you can get a refinancing in order to enjoy low rates too.

Adjustable rate mortgage or adjustable home loan interest rates are different from the fixed variant by the fact that they fluctuate with the ups and downs of the market. You pay little for a low interest rate, but, if it gets high, the monthly rate will increase.

Unfortunately, the transformations on the financial market are very unpredictable and abrupt for the common user, and sudden modifications may catch anyone unprepared. Such home loan interest rates cannot be contracted by everyone; consequently, don’t jump to take a loan you cannot afford.

Do not neglect the aspect of the home loan interest rates because it significantly influences the money you pay back to the lender. Increases of the interest rate will have negative consequences for your pocket.

For professional suggestions and recommendation in the field, talk to a financial consultancy agent and learn as much as you can about the home loan interest rates. Research is also possible online if you ask for conditions and offers from various banks and experienced lenders.

If you decide to make your own research on the Internet, you will see that all the banks’ websites offer certain tools that are helpful in working out the home loan interest rates that is most convenient to you. These tools are known as calculators. You insert your data and the calculator will come up with a calculation, providing you with an estimate of the rate corresponding to the loan.

Anyway, by getting all the necessary information you will be able to weigh the advantages and disadvantages pertaining to each type of home loan interest rates and then you will be able to make the best decision to suit your interest.

By: Allen Barckley

Federal Loans can help Small Businesses

2009-06-17T01:05:00.000-07:00

For business owner Rob Davis of alarm company Red Alert Inc., he noticed alarms going off when customers began scaling back on services or missed payments.

"Credit cards are declining when they weren't before, payments are coming in later, so our revenue flow is coming up with a shortfall in some months," says Davis.

With his customers not paying their bills, Davis has trouble paying his own bills. Banks are tightening their pursestrings, and he says he has had trouble getting a loan. The two fronts combine into an economic storm that leaves the security of his business in jeopardy.

"It's a cash flow issue, when we're coming up short, to pay the rent, to pay the electricity, to pay the staff, health insurance, trucks," says Davis.

Senator Charles Schumer says a new federal loan program called America's Recovery Capital, or ARC loans, will get money flowing once again. Established small businesses in need of short-term help can apply for up to $35,000 in loans, which are being guaranteed by the Small Business Administration.

"If they can't get a line of credit, if they can't get a loan it could be the end of a business and years and years of blood sweat and tears," says Schumer.

Schumer describes the terms as similar to student loans: once they receive the money, business owners have a year before they need to start making payments. After that, they have five years to pay it back entirely with no interest.

There are also no SBA fees to access this money, which Schumer says could be the life preserver small businesses need to stay afloat.

"The water's up to here. This loan isn't going to make the water go down but it might prevent it from going over your nostrils and drowning your business," says Schumer.

Davis says the money could not come at a better time. He has already cut back hours and hopes an ARC loan will prevent him from making tougher decisions down the road.

"We're trying not to get rid of any employees at the present time and hopefully with this loan we'll be prevented from doing so," says Davis.

"We can't forget Main Street. Wall Street is right across the beautiful harbor here, but nothing's more important that Main Street," says Schumer.

Big Car Bargains: Deal or No Deal?

2009-06-09T02:09:00.000-07:00

It's a buyer's market on car lots these days. As with almost everything, if you have the money, it's a great time to shop.

Dealers are also rolling out some eye-catching offers. Some will dovetail perfectly with your own plans.

Others, however, could tempt you into a buy that's not in your best interest.

Here's a closer look at some of the offers you might see and some you may want to avoid.

Buy one, get one free
The pitch: You pay for one vehicle and get a second one free.

Why it might not work for you:

Often you don't get to choose the car you get free. It might be a specific model or even a specific car, new or used. Often, these deals will pair two very large vehicles, like heavy-duty trucks, or a very large truck or SUV with a very small car.
You likely won't get as good a deal on the first car as you would have in a normal transaction, says Sutton. "In the real world, a free car is just not possible. It's a distraction. It takes you away from what you should be doing: finding the one specific car that makes the most sense for you, at the best price." Frequently with a twofer, you pay the manufacturer's suggested retail price, or MSRP, which is often $3,000 to $4,000 more for a car and $4,000 to $8,000 more for a truck or sport utility vehicle, says Jeff Ostroff, president and CEO of CarBuyingTips.com, an online car buying guide.

You probably won't get manufacturer or dealer incentives, or rebates. You can find the latest rebate and incentive information at Edmunds.com and at the manufacturers' own Web sites.

The primary vehicle could also include a host of dealer add-ons that will make it pricier, says Tim Jackson, president of the Colorado Automobile Dealers Association, or CADA.

If you use dealer financing, you'll likely pay a higher interest rate or have payments spread over a longer period, Ostroff says.

Your best bet: Compare prices and buy the vehicle, or vehicles, you actually need. What if you're looking for the exact two vehicles included in a two-for-one promotion? Consider the offer, but shop around. It's likely you can do as well or better if you purchase them separately, says Jack Gillis, director of public affairs for the Consumer Federation of America and author of "The Car Book."

Low-interest loans
The pitch: If you buy the car, the dealer or manufacturer will give you a low-interest loan. Why it might not work for you:

It could be a great deal if you can lock in zero percent to 2.9 percent for the model you want. "But the highly publicized low interest rates are available to very few of us," says Gillis. Credit scores often need to be in the 750 range, and frequently only select models are included in the offer, he says.

Sometimes these low-interest offers require a minimum down payment or a shorter loan term, says Bill Gerhard, director of bank products for AAA Financial Services.

Your best bet: Get financing from a bank or credit union before you hit the showroom. If the dealer can best that offer with a lower rate, take it.

Hammer out the best possible deal on the car before you start talking financing. Until you have your price locked in, consider yourself a cash buyer. Another caution: Don't apply for dealer financing accidentally. There have been reports that some dealers ask buyers to complete credit applications even if they don't want dealer financing -- under the pretense that the information is required by the Patriot Act, says Ostroff. It's not, he says. Unless you are actually applying for credit at a car dealership, do not supply your Social Security number and other personal or financial information.

Consumers 'avoid unsecured loans'

2009-06-09T02:08:00.000-07:00

The number of unsecured personal loans being taken out by consumers has dropped, new research has revealed.

Findings from the Finance & Leasing Association (FLA) revealed that FLA members have written £660m-worth of new unsecured loans during the first two months of 2009, compared with £1.1bn lent during the same period of last year.

The research showed that the value of secured loans for February 2009 fell by 83% compared with February 2008.

New credit card business also dropped by 11% when comparing the two periods.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: "Rising unemployment and low consumer confidence have led to a further drop in unsecured loan new business in the last two months."

However, the study showed that increasing numbers of consumers are using store instalment credit.

The FLA stated that the deals offered by shops including interest free credit and deferred payment are usually for small amounts which consumers are more confident about meeting the loan repayments on.

Students Relying on Loans Wonder Whether Forgiveness Will Last

2009-06-09T02:06:00.000-07:00

If you want to become a public defender, Georgetown University can be a great place to get your legal education. So Heather Gatnarek expects to take on well over $100,000 of debt to get her law degree there and hopes to graduate in three years.

Here’s the problem, though. She’s relying on a new federal program that forgives part of the student loan debt for graduates who enter public service fields. And she was scared out of her mind when she read a New York Times article on Wednesday on problems in Kentucky, where significant cuts in one of its loan forgiveness programs have put thousands of indebted public school teachers and nurses in a painful financial squeeze.

“I would be completely up a creek” without a loan forgiveness program, Ms. Gatnarek said. “I don’t know what I would do. Marry someone rich, I guess. People say that I could just do corporate law for a few years, but I wouldn’t last two days.”

The problem in Kentucky and another that emerged in Connecticut on Thursday raise a frightening question for millions of young Americans considering jobs like teaching or nursing: Are the state or federal programs that promise to forgive student loan debt for people in those or other public service professions backed by ironclad guarantees?

And if the forgiveness isn’t guaranteed, how on earth can anyone expect 18- or 22-year-olds to take on tens of thousands of dollars in debt?

Without such a promise, how can they know that they won’t one day find themselves in a police uniform or in a rural doctor’s office suddenly facing personal bankruptcy?

The good news here is that the federal Department of Education says that almost all its loan forgiveness programs are safe. “It doesn’t depend on some future Congress for us to come through on most of these,” said Robert Shireman, deputy undersecretary of education. “The majority of them get appropriations for the life of the programs.”

But many states say that financing their loan forgiveness programs depends on state budgets. Given declining tax revenues, that doesn’t inspire much confidence. On Thursday, for instance, Gov. M. Jodi Rell of Connecticut proposed cutting the state’s minority teacher grant program, which awards a stipend that is intended to help students pay off their loans, said Constance Fraser, a Connecticut Department of Higher Education spokeswoman.

The states’ changes — or the mere threat of them — are the latest of several ugly financial developments that have shaken individuals of all ages who thought they were playing by the rules. There are the investors close to retirement who thought they were being conservative only to watch their savings decline 25 percent before bouncing back a bit recently. And then there are homeowners in Miami and Las Vegas with plain mortgages who have found the value of their properties plummeting because of the bad behavior of many banks and their customers.

As for the loan forgiveness programs, they have been around since at least the late 1960s, according to Mark Kantrowitz, publisher of the financial aid site finaid.org. States sponsored them first, to keep residents from moving or to encourage graduates to enter careers where there was a shortage of professionals in particular locations or in certain lower-paying fields. Now, the federal government is involved, too.

The problems in Kentucky, Connecticut and potentially elsewhere, however, have an absurdist twist. Nonprofit state organizations and agencies say they do not have money for loan forgiveness programs in part because of cuts in federal subsidies for student lenders. At the same time, tight credit has also made it difficult for lenders to raise additional funds that they could then lend.

In other words, the college graduates from years ago who chose banking over teaching or nursing have now made such a big mess of the economy that the teachers who educate the bankers’ children have to worry about the status of the loans they took out to learn to teach. Pretty rich, no?

“Using Personal Loans For Credit Card Debt…”

2009-06-04T19:40:00.000-07:00

Credit card debt is widespread amongst the average American household and seeking ways of consolidating debt usually means utilizing the equity in ones home or seeking a personal loan to service the credit card payments. Using the equity in your home to apply for an equity home loan and directing the funds towards debt management is an excellent method for getting your house in order in regards to your finances.

A personal loan without collateral may sound inviting but rest assured any financial institution or broker is going to want a higher return for the added risk. Using the equity in ones home has become a popular form of liquidity to finance and consolidate existing credit card debt, however not without its risks. Be sure you read the fine print & beware of the risks of defaulting on any repayments when using the equity in your home for a equity home loan as you could end up losing your family home to your creditors should you fail to meet the repayments!!!

Consolidating debt for some means digging into their 401K for immediate relief to the detriment of their future well being. Immediate relief from credit card debt and the high fees and interest associated with such debts is a huge incentive for some to look for the 401K alternative. The compromise to such action is that you are forgoing future savings and security for immediate relief, but if the timing is right and you are confident of repaying the loan it certainly is a viable proposition. It is a very appealing short term debt solution which has its benefits as well as draw backs.

It is always wise to stack the advantages against the disadvantages in anything dealing with your finances and when formulating a wise debt management strategy. Any unforeseen event which can disrupt your repayment schedule could mean penalties due in the form of tax installments or the fulfillment of the principal on the borrowed loan.

Tax perks when saving with a 401K account are reduced when borrowing off your retirement, as you are reimbursing the account with after-tax dollars.

Be sure to negotiate a better interest rate on any repayments with any loan whether it be a personal or a home equity loan. The higher the interest rates, the higher the repayments, the less disposable income that is left for savings or other pleasures of life so ensure you manage your credit card debts first as they carry the highest interest rates of any form of credit.

The rate you are able to negotiate your interest will be fixed for the duration of your personal loan and you will be required to make monthly installments to service the loan which will be at a rate much lower than any credit card debt you are carrying. Undisciplined habits of making late and overdue credit card payments tends to incur extremely high fees and even higher interest rates which can become a major problem to most budgets.

A savings account allows you the luxury of redirecting resources to areas of debt which have the potential to erode ones worth very quickly if left unchecked!!! When you compare the interest rate you earn on a savings account and the cost of credit card debt it makes little sense not redirecting funds from you savings account towards servicing debts elsewhere??? Be smart and service your credit card debt before setting up any high yield savings account, you will be thankful you did in the long run.

UAE personal loans decline 11% in April

2009-06-04T19:39:00.001-07:00

Personal loans extended by UAE banks fell 10.9 per cent in April compared to the end of last year, while the gap between loans and deposits narrowed over the same period, Central Dank data showed.

Outstanding personal loans at UAE banks stood at Dh201.7 billion at the end of April, compared to Dh226.4bn on December 31, the Central Bank said in a statement on its website.

Loans and advances of Dh997.7bn on April 30 was up 0.2 per cent from the month earlier, the data showed. Total loans in February had fallen month-on-month as banks become more cautious about new lending during an economic downturn in the country.

Deposits at UAE banks rose 4.2 per cent in April from December to Dh961.6bn, the data showed. The gap between loans and deposits was Dh36.1bn – down from Dh71.2bn at the end of December, the data showed.

The UAE M1 measure of money supply fell 2 per cent in April from the month before, the central bank reported on its Web site yesterday. The M3 money supply gained 1.9 per cent over the same period, the bank said.

Attorney General Shuts Down Loan Website

2009-05-14T00:40:00.000-07:00

CHARLESTON -- Last week, the West Virginia State Credit Union was inundated with phone calls from consumers who had been victimized by this scam. Apparently, the crooks were advertising advanced fee loans online. If a consumer applied for a loan, he would receive an email that identified the company as a state credit union located at 2200 Washington Street, East, Charleston, West Virginia 25311 - the same address as the West Virginia State Credit Union. In the email, the consumers were told they would have to purchase insurance in order to qualify for the loan. Specifically, the email told consumers to wire $1,250.00 by Western Union or MoneyGram to a location in Canada. Once the money was wired, the consumer never heard from the crooks again.
“No legitimate bank or credit union will require a consumer to wire money in order to receive a loan or line of credit. According to Canadian authorities, a majority of these advance fee loan scams originating out of Canada have been linked to organized crime. When consumers submit loan applications, they are giving criminals their Social Security numbers, bank account numbers, and other personal identifiable information that will be used to steal their identity,” McGraw warned.

Working with GoDaddy Group, Inc., a domain registration company headquartered in Scottsdale, Arizona, the Attorney General’s office was successful in shutting down the statecreditunion.net website as of Monday afternoon, May 4.

“Last week, statecreditunion.net, was operational and had the potential to cause additional harm to consumers in West Virginia and around the country. Today, if you attempt to visit this fraudulent website, you will find a message that states the page cannot be found. My office took the steps necessary to protect innocent consumers from being victimized by this scam. We want the thieves to hear our message loud and clear - West Virginia will not be used as a haven for criminal activity,” said Attorney General McGraw.

If you have been a victim of this or any other consumer scam, please feel free to contact Attorney General Darrell McGraw’s Consumer Hotline at 1-800-368-8808 or visit his website at www.wvago.gov.

Any consumer complaints that McGraw’s office receives from victims of this scam will be referred to the Canadian authorities in Toronto, Ontario, Canada.

Payday Loans - Use The Loans To Serve You

2009-05-14T00:36:00.000-07:00

Cash flow management is perhaps one of the most important aspect in an individual’s life. Without proper management, life can go downhill easily. Imagine raking up personal loans with high interest rates. Such loans are notorious for having snowballing interests, which makes it almost impossible to pay off after some time. Your goal, would be to avoid being in a similar position at all cost.

The first thing you need to do, is to be aware of solutions that are available to you. Payday loans is one such example. There are many different types of loans in the market. Each exists to serve a different purpose. Be sure to use these loans to your advantage. Here is the proper way to approach payday loans.

Understand that payday loans are not there to provide you with free cash. There is no such thing as a free lunch, so stop expecting lenders to hand you free money on a silver platter. Payday loans are meant to be a stop gap solution. In other words, it’s meant to be a temporary injection of cash to fill a temporary gap. You are expected to repay the loan as soon as possible. And there is a good reason why you should do so.

A payday loan is a small amount of money, usually within the range of hundreds to perhaps several thousand. This amount is so small that banks are willing to take the risk and approve these loans without any proof of income or credit checks. In fact, your application can be submitted online, and it will be processed within a few days. Cash will then be directly deposited into your bank.

The reason why lenders are willing to approve these loans so easily is because they know that most borrowers have the capacity to pay off the loans on time. Because the loans are so small, there is very little reason for the borrower to default on the loan. Besides, the lenders deliberately set the interest rates to be sky high to deter borrowers from delaying payment.

Knowing the conditions that come with a payday loan is important. They call this the “payday” loan because they expect the loan to be returned once payday arrives. So be sure to repay the loan immediately when the check arrives. The moment you delay, you are incurring additional interest, which means you have to pay back an even higher amount.

Borrow only when you are sure that:

1) You have the ability to pay back as soon as possible.

2) It’s a small amount that you need immediately, and you can’t wait till payday. (E.g. paying off a down payment for a car.)

Payday loans are there for your convenience. They are not there to let you get yourself into debts. So don’t borrow just because you need some extra cash to spend. If it’s something you cannot afford, then you may have to put off purchasing the item. If you can wait till payday to make the purchase, then just wait till the check comes in. In other words, use payday loans to serve you. It’s not meant to damage your personal finances.

LOAN DEMAND UP

2009-05-06T10:02:00.000-07:00

Demand for home purchase loans, an indicator of home sales, far outweighed that for refinancing. The increase may help gauge how the hard-hit U.S. housing market is faring this spring, the peak home-buying season.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended May 1 increased 2.0 percent to 979.7.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.79 percent, up 0.17 percentage point from the previous week, when it nearly matched the all-time low of 4.61 percent set in the week ended March 27. The survey has been conducted weekly since 1990.

It was the highest since 4.89 percent in the week ended March 13, though well below year-ago levels of 5.91 percent.

Student Loans Increase

2009-05-06T10:00:00.000-07:00

COLUMBIA - The recession is driving more college students to the private loan market, that's one theory anyway.

In a recent national study, 14 percent of students used private loans in 2008. That's double than the previous year.

No one knows why, but Columbia high schools and universities have actually seen an increase in students filling out the FAFSA, or free application for federal student aid.

Most schools across the country require students to have the FAFSA but some students rely on private loans, outside the FAFSA process.

An increase in these applications may mean less money to divvy out. But students should always fill out the FAFSA first.

"Senior year we go in two times in the fall and also in the spring to talk about the community scholarship package," Rock Bridge counselor Melissa Melahn said. "And finalizing the FAFSA and how to sort through all the numbers and understand what all that information means when they've heard from a school."

Direct loans have high interest rates and inflexible payment plans while the FAFSA can lead to federal loans, grants and institutional aid.

"Free money is better than borrowed money," Stephens College Financial Aid Director Rachel Touchatt said. "So by filling out the FAFSA they may be eligible for free money."

Free money is good, but there may not be enough of it.

"There is only so much money to go around," Melahn said. "So when you see an increase in that, what's given to students decreases."

Sometimes students receive money from the FAFSA, but they also look to private loans.

"I'm just hoping to decrease my debt as much as I can," Rock Bridge senior Jennifer Heman said. "So I'm down with work study or getting a job or whatever since interest can be so high."

"Someday I'm going to say, 'oh gosh I have to pay all this money,'" MU student Jessica England said. "But it's nice knowing that I don't have to pay it now."

And there is other ways to pay for college as well.

"If you haven't looked at scholarships, I would do that," MU student Holly Hanover said.

Counselors and a school's Web site are great places to go for financial aid questions.

Reported by: Samantha Running

Demand for Fed's lending program perks

2009-05-06T09:56:00.000-07:00

By Kristina Cooke and Nancy Leinfuss

NEW YORK (Reuters) - The Federal Reserve's premier program to revive securitization markets and spur consumer and small business lending showed signs of life in its third round after an anemic start in March and April.

The program is a crucial part of the Fed's efforts to lower borrowing costs for consumers for everything from student loans to a new car, which had sky-rocketed after credit markets froze last year.

Investors on Tuesday requested $10.6 billion in loans in the May round of the Term Asset-Backed Securities Loan Facility (TALF). It was the strongest showing yet and is up 66 percent from the first two rounds combined, but still a small portion of the $200 billion the Fed has pledged to lend in the initial phase of the program.

"It's still a fraction of what they said they could lend ... but it seems like it finally got off the ground this month," after teething problems, said Stephen Stanley, economist at RBS Greenwich Capital. The Fed has said the TALF could grow to $1 trillion.

Through the TALF, the Fed makes loans to investors for the purchase of asset-backed securities. In the run-up to the May round, companies issued almost $14 billion of TALF-eligible securities backed by credit card, auto, motorcycle, equipment and small business loans -- more than twice the amount of the past two rounds combined.

Concerns that the government could retroactively change the terms of the deal if investors are seen as profiting too handsomely from it combined with the complexity of the paperwork slowed the program out of the starting block.

Analysts said they were encouraged by the jump in demand in May compared with April. Investors requested just $1.7 billion in April and $4.7 billion in March.

Analysts said interest would likely further increase once the Fed includes commercial mortgage backed securities in the program in June. The Fed has also said the program could be expanded to include lower rated, older assets as part of a comprehensive government plan to remove so-called toxic assets from banks balance sheets.

"It is perhaps still ramping up slower than people initially thought, but at least now you are seeing interest ramp up," said Michael Feroli, economist at JP Morgan.

"It's generally been beneficial for the markets... There were some concerns at the start, but success or failure should be determined by spreads -- and spreads are coming in."

IMF Eases Limit on Loans

2009-04-24T01:36:00.000-07:00

The International Monetary Fund doubled the borrowing limits of the poorest countries on Thursday after its sister organization, the World Bank, warned that the global economic crisis could push nearly 50 million people further into poverty this year if financing needs are not met.

"This crisis could have catastrophic implications," IMF Managing Director Dominique Strauss-Kahn warned in a speech. "As many as 3 million additional children may die between now and 2015 if the crisis persists. We could witness social unrest, political instability and even war."

With the collapse of world trade, commodity prices and remittances from abroad, many low-income countries have been severely affected by the deepest global recession since the Great Depression.

In addition, emerging and developing countries "are facing a sharp reversal in capital inflows," IMF chief economist Olivier Blanchard said earlier this week. "The source is, again, the financial crisis in advanced countries and the general increase in risk aversion which the crisis has triggered."

Mr. Strauss-Kahn said many affected low-income countries "had sound policies and solid fundamentals, and were largely innocent bystanders of the crisis."

In the past, the IMF required borrowing countries to follow stringent conditions, which often exacted a severe toll on the most vulnerable. Today, Mr. Strauss-Kahn said, "the IMF remains committed to protecting the poorest and most vulnerable." He cited several examples, including Ukraine and Pakistan, where recent IMF programs required "sizable increases in social spending in the midst of serious and needed efforts to cut deficits."

Not everybody agrees. Mark Weisbrot, co-director of the liberal Center for Economic and Policy Research, has examined 10 IMF agreements since September. "Despite the recession, all had cuts in spending and some required increases in interest rates. And they had other conditions to make it more difficult to raise demand during the recession," he said.

While the ultimate solution lies in the repair of the financial systems of advanced countries, this will happen "slowly, at best," Mr. Blanchard said. "Meanwhile, a number of countries are likely to face serious balance-of-payments problems."

The Group of 20 industrialized and emerging-market nations recognized these problems at the London economic summit early this month.

In addition to pledging to triple the IMF's lending capacity to $750 billion, the G-20 asked the IMF to provide an additional $6 billion in concessional funding to low-income nations over the next two to three years, Mr. Strauss-Kahn explained in his speech Thursday at the Center for Global Development at the Johns Hopkins School of Advanced International Studies.

Freddie Mac Boss Found Dead At US Home

2009-04-24T01:33:00.000-07:00

David Kellermann is thought to have committed suicide

A boss of US mortgage giant Freddie Mac has been found dead at his home in Virginia.

Acting chief financial officer David Kellermann is thought to have committed suicide.

Freddie Mac was one of the most high-profile casualties of the US sub-prime mortgage crisis.

It was heavily criticised for reckless business practices that some argued contributed to the financial downturn.

The company was taken over by the American government in September 2008.

Mr Kellermann, 41, had been acting CFO since September.

Police went to his house in Reston around at dawn onWednesday after his wife called them.

A police spokeswoman a crime scene crew and homicide detectives were investigating the death, but there did not appear to be any sign of foul play.

His death is the latest blow to the company, which owns or guarantees about 13 million home loans. Chief executive officer David Moffett resigned last month.

Freddie Mac and rival Fannie Mae own or back more than half of the home mortgages in the US.

They were hit hard by a big increase in loan defaults, as mounting losses on housing investments weakened their balance sheets.

The losses played a role in the US housing and global credit crisis. The companies have received about $60bn in aid from the government.

The CFO is responsible for the company's financial controls, financial reporting and oversight of the company's budget and financial planning.

Mr Kellermann took the job after the resignation of Anthony "Buddy" Piszel, who stepped down after the September 2008 government takeover.

Mr Kellermann had also been senior vice president, corporate controller and principal accounting officer. He was with Freddie Mac for more than 16 years.

Study: More undergrads take out pricey private student loans to pay for college

2009-04-22T00:11:00.000-07:00

BERKELEY, Calif. - A study finds the number of college students taking out private student loans has risen sharply in recent years.

The report released Tuesday by the Berkeley, Calif.-based Project on Student Debt found that the percentage of all undergraduates who took private loans rose from 5 percent in 2003-04 to 14 percent in 2007-08.

At for-profit colleges and universities, the percentage of students taking out private loans jumped from 13 percent in 2003-04 to 42 percent in 2007-2008.

Lauren Asher, acting president of the Institute for College Access and Success, which runs the debt project, says the trend is worrisome because private loans are typically more expensive to pay back than federal student loans.

Signs When to Call a Debt Expert

2009-04-22T00:06:00.000-07:00

You know you need help from a credit counselor when . . .

It may sound like a comedy-routine opener, but lots of people know it's definitely not a laughing matter.

Many folks who are weighed down with debt opt first for self-help, trimming back on spending and keeping a close eye on accounts. But much as when getting into shape, some people have the willpower to shed pounds on their own, while others require the help of a personal trainer.

When do you need to call in a financial-fitness expert? Here are 15 instances that could indicate your balances are getting the better of you and that credit counseling might help.

You may need credit counseling if . . .

Your credit card balances are rising while your income is decreasing.

You are paying only the minimum amounts required on your accounts or maybe less than the minimums.

You're juggling bills. For example, you apply for another credit card and use cash advances from it to pay an existing card.

You have more credit cards than a smart gambler has poker chips.

You are at or perilously near the limit on each of your credit cards.

You consistently charge more each month than you make in payments.

You are working overtime to keep up with your credit card payments.

You don't know how much you owe and really don't want to find out.

You have received calls or letters about delinquent bill payments.

You are using your credit card to buy necessities like food or gasoline.

You use your credit cards no longer for the sake of convenience but because you don't have money.

You are dipping into a savings account or your individual retirement account to pay your monthly bills.

You are hiding the true cost of your purchases from your spouse.

You're playing the card game by signing up for every credit card that sends you an unsolicited offer.

You have just lost your job or are fearful that you are about to and are concerned about how you will pay all your bills.

Look for a pattern
No magic number of these statements has to be true to indicate you have a credit problem. Even if you see yourself in several of these instances, you still might be able to deal with your credit crunch on your own.

But if you spot a trend, beware.

For example, don't panic if you occasionally shop surreptitiously, not letting your spouse in on your splurge. Similarly, paying off minimum balances once in a while could be acceptable. But if it's more than an isolated money-management misstep, you could be headed for trouble.

Don't wait too long
Getting help sooner rather than later can take months or years off the process of getting out of debt.

Once you've hit rock bottom financially, it's much harder to work your way out of it. To ease the stress and financial burden, seek credit counseling before tipping over into the abyss.

Any trip to a credit counselor should be preceded by a thorough analysis of your family's personal finances -- how much money you have saved, how much you owe, how much you have coming in each month and so on. Such an analysis will help you assess how much trouble you're in and how much assistance is required.

In the end, getting organized may be all the help you need.

Vietnam central bank takes steps to prevent economic recession

2009-02-22T02:58:00.000-08:00

Aiming to stabilize the economy and prevent a recession, the State Bank of Vietnam’s governor, Nguyen Van Giau, launched February 20 an action plan which includes monetary, credit and banking solutions.

He asked banks to expand credit, adopt reasonable interest rates, tackle problems in loan repayment and improve lending mechanisms to help organizations and individuals gain easier access to credit.

The Bank will have a quarterly meeting with its affiliates in provinces and cities to discuss measures to overcome difficulties facing banks. It will also expand credit to rural areas, poor households and other social targets, he said.

The Bank will soon submit a draft decree on credit policy to the government, he added.

The Bank will coordinate with other relevant agencies to mobilize capital at home and abroad for the Social Policy Bank to expand lending to poor families and students.

The Bank also asks commercial banks to arrange capital for key projects that help government plans to stimulate the economy. Commercial banks should step up negotiations with international donors to attract more ODA and other sources.

The Bank will strengthen controls over financial instruments, exchange rates and interest rates to help encourage production and exports, stabilize macroeconomic conditions and prevent illegal speculation and trade of foreign currencies.

Rock buy-out hit mortgage market

2009-02-14T23:52:00.001-08:00

Rock buy-out hit mortgage market
The nationalisation of Northern Rock compounded the problems in the already beleaguered mortgage market.
The group's decision to focus on repaying its Government loan as quickly as possible sucked billions of pounds out of the market at a time when wholesale funding had already dried up.
When Northern Rock was nationalised on February 17 last year it owed a total of £26.9 billion through Bank of England loans.
By the end of September last year, the latest period for which figures are available, it had repaid all but £11.5 billion of this.
Commentators estimate that by the end of the year Northern Rock's debt to the Government could have been as low as £9 billion.
But while this was good news for the Government, it was bad news for homeowners and first-time buyers as it intensified the mortgage drought.
The main source of money for Northern Rock to repay the Government was through accelerating the rate at which it ran down its mortgage book.
Customers were actively encouraged to remortgage with another lender when they came to the end of a deal, while the group also set up an arrangement with Lloyds TSB under which Lloyds could cherry-pick Northern Rock's best remortgage customers.
In 2007 Northern Rock was one of the UK's fourth biggest lenders in terms of new business, lending £29.5 billion during the year and writing nearly one in 10 new mortgages.
But during 2008, not only was this lending capacity lost, but the group's accelerated redemption strategy put massive pressure on the credit available at other banks as its former customers were forced to remortgage.
Copyright (c) Press Association Ltd. 2009, All Rights Reserved.

Parliament orders end of Tri-Star probe

2009-01-24T06:48:00.000-08:00

By CHARLES KAZOOBA (email the author)
Posted Friday, January 23 2009 at 21:35

Political differences and lack of evidence have convinced the Uganda parliament to indefinitely suspend its investigation into alleged misuse of a $22 million loan by Apparels Tri-Star-Uganda.

Ben Wacha, chairman of the Select Committee on Apparel Tri-Star, said it has been instructed by the Speaker to abandon the investigation.

The directive followed a request from the Attorney General that the investigation be stopped since there was a pending court case over the matter.

“The Speaker directed we should freeze all the investigations,” Mr Wacha told The EastAfrican.

The management of the Kampala-based garment factory has been under investigation for allegedly mismanaging the state-supervised facility, which closed down in 2006.

Parliament started the investigation after the Auditor General declined to verify and certify the company’s financial records.

A few months into the investigations, two Members of Parliament — Harry Kasigwa and Chris Kibanzanga — took Tri-Star to court.

The MPs wanted the garment firm to refund all the money it irregularly solicited from government through the Bank of Uganda.

Tri-Star was jointly sued with the Attorney General, the Uganda Development Bank, Stanbic Bank-Uganda and DFCU.

“While our clients said managing director (Kananathan) will appear before you, we regret to advise that all matters in respect of which you have requested a brief from him are ‘sub judice,’ being the same matters in issue in the pending High Court Civil Suit No. 32 of 2007,” Nester Byamugisha of Barya, Byamugisha and Co. Advocates, wrote to Mr Wacha.

But in an interview with The EastAfrican, Mr Kibanzanga said they had failed to establish evidence that implicates Tri-Star’s managing director Vellupilai Kananathan, even though the court is yet to set a date for the hearing.

Tri-Star had been promoted by the government to cash in on the US’ Africa Growth and Opportunity Act (Agoa), which allows African countries to export goods into the US market duty-free. Tri-Star imported fabric from Asia to make finished clothing products.

Capitala signs co-operation agreement with Abu Dhabi Finance

2009-01-17T22:27:00.000-08:00

Capitala, the Abu Dhabi based real estate company, today announced that it has signed a co-operation agreement (CA) with Abu Dhabi Finance to extend mortgage financing services to buyers of its maiden project Arzanah.

The CA, signed today in Abu Dhabi between the two companies, establishes the general framework of a Finance Agreement to be put in place in the next few weeks. The Finance Agreement will provide buyers with up to 85% financing for their new homes in Arzanah.

Arzanah, a $5-6bn landmark development on Abu Dhabi island, consists of two land parcels, one surrounding Zayed Stadium and a 2Km beachfront across the Khaleej Al Arabi road, both of which will be connected by several pedestrian bridges.
Deputy Chief Executive Officer of Capitala, Peter Wilding, said: 'Capitala is delighted to partner with Abu Dhabi Finance to offer our current and future buyers this new mortgage financing option for their purchases in our development.'

He added, 'In September last year, we launched and sold 80% of Rihan Heights, the first phase of Arzanah, within the first few weeks. We anticipate that this new source of loans, which will be in place later this month, will be another excellent financing option for our clients due to its flexible repayment methods and long term repayment schemes'.

Phil Ward, Chief Executive Officer of Abu Dhabi Finance, said: 'Abu Dhabi Finance was created to bring a refreshing new mortgage experience to people buying property in Abu Dhabi, and forming strategic partnerships is a crucial part of achieving that goal.'

'Capitala is developing one of Abu Dhabi's most attractive future residential areas, and we are very pleased to be able to offer those buying homes in Arzanah one of the most attractive mortgage options available in the UAE.'

Established in 2008, Capitala is a strategic joint venture company between Mubadala, a leading business development and investment company in Abu Dhabi with 51% shareholding and CapitaLand, one of Asia's largest real estate companies with 49% shareholding.

Abu Dhabi Finance, formed and launched in 2008 with a capital of Dhs500m, offers mortgages with a wide range of benefits, including loan-to-value ratios of up to 85%, loan terms of between three and thirty years, flexible repayment methods and debt service ratios of up to 55%.

Longtime National City stockholders bemoan sale to PNC

2008-12-20T23:05:00.000-08:00

Posted by Sabrina Eaton/Plain Dealer Bureau December 21, 2008 00:01AM

WASHINGTON -- Marianne Cosgrove's family has been socking away stock of National City Bank since the 1880s.

Fifteen years ago, the 96-year-old great-grandmother in Atlanta inherited 3,620 shares from her sister, Betty Lawrence, a former fashion illustrator at the old Shillito's department store in Cincinnati, who made her promise never to sell it.

The first shares of the prized investment were originally purchased by the Cincinnati family of Betty's long-deceased husband, Shirley Lawrence. Subsequent owners added to the stake. Every family member who owned the stock made their heirs pledge to keep it.

The retired federal worker kept the vow she made to her sister as she watched the stock's value plunge from more than $100,000 to about $6,300. The healthy quarterly dividend that she once relied on to make ends meet has dwindled to a pittance.

Cosgrove's situation came to light when the Federal Reserve recently sought comments from the public on the proposed acquisition of National City by PNC Financial Services Group Inc. of Pittsburgh. Ninety-six people weighed in, including Cosgrove's granddaughter, Melanie Allgood. She wrote about how her family planned to use the stock money someday to help pay for her grandmother's care.

But the ledger is about to close on the bank that generations of Marianne Cosgrove's family looked to for financial security. Shareholders of both banks are likely to sign off on the sale Tuesday when they vote in Cleveland and Pittsburgh.

Approval will mean the end of a 163-year-old Cleveland institution. If the deal closes as scheduled Dec. 31, National City's time will be up. PNC is buying National City, brought down by billions in bad loans, for the bargain price of $5.6 billion.

That's just $2.23 a share for a bank worth 15 times as much last year. And it means stockholders like Cosgrove are some of the biggest victims of National City's rapid decline and impending demise.

"This has really hurt me financially," Cosgrove said. "My husband is dead, and I don't have that much income, and things have gotten so expensive."

In her letter to the Federal Reserve, Allgood wondered what would become of her grandmother.

"This old lady suffers in a state-run nursing home while CEOs leave with millions from the money her family made for them," she wrote. "How sad."

None of the 96 public comments sent to the Federal Reserve endorsed the potential sale. Many expressed anger that Treasury Department officials told National City Bank it wouldn't get any of the money that Congress approved to bail out troubled financial institutions, and that PNC would instead get National City's share of the bailout money.

"I could be wrong, of course, but National City Bank seemed to be in good enough shape to have survived if PNC hadn't come along like greedy old Mr. Potter in 'It's a Wonderful Life' and squashed its little competitor," wrote Priscilla Hefner of Cleveland. "I feel like Cleveland is trapped in some giant Monopoly board game and is about to become the least valuable property."

Rollin Ross of Lakewood told the Federal Reserve how his father had retired as a security guard at National City's East Sixth Street and Euclid Avenue branch in downtown Cleveland.

"Never would he have imagined that the entire bank would have been stolen with the U.S. government at the helm of this robbery," Ross wrote.

Lenny Toth of Cleveland said he felt it was unfair for PNC to use tax dollars to acquire National City Bank.

"Conceivably, a Cleveland taxpayer would be paying for their own unemployment," he wrote. "How ludicrous is that?"

Like Cosgrove, 80-year-old Patricia Ross of Westlake was counting on National City stock for retirement income after the death of her husband, Don. She said she bought 444 shares herself over the years "with a hundred dollars here and there" from sacrificing a few luxuries. She said she invested in the bank because she liked the staff at her local branch.

"To think these young people, through no fault of their own, are going to be unemployed," wrote Ross, who is unrelated to Rollin Ross. "I hope the past president of this bank who escaped in time with his millions can sleep nights. I know I couldn't."

Jim Zinkan described how he started his specialty chemical company in Twinsburg more than 26 years ago with a $50,000 loan from National City Bank and has continued to do business with them over the years. He also bought stock because he likes the bank so much.
"Whatever would possess the Federal Reserve Banking Group to take this high handed approach and try to kill one of the most successful banks?" he wrote.

This week, the Federal Reserve Board signed off on the proposed merger, determining that it would "result in greater convenience" for customers of both banks and would help alleviate the "financial strains and liquidity pressures that National City has been experiencing."

A spokeswoman for the Fed said she couldn't comment further on the written order issued this week or the public comments the bank received.

National City's shareholders are set to vote on the deal at a Tuesday meeting. It would give holders of National City common stock 0.0392 share of PNC common stock for each National City share. Shares of National City preferred stock will automatically be converted into shares of PNC preferred stock with identical terms.

Patricia Ross, Jim Zinkan and Marianne Cosgrove all say they will vote against the merger.

"I think PNC is a great bank, but I don't think National City Bank should be struck down by the government, under the circumstances," said Zinkan.

Westside Express deal cost TriMet millions

2008-12-14T00:18:00.000-08:00

The agency contracted with a rail car company it knew was failing, and eventually had to seize control of it

By Les Zaitz
The Oregonian
TriMet pumped millions of dollars into a shaky Colorado company in recent months, keeping it alive despite mismanagement so it could finish the agency’s new commuter rail cars.

The agency handed $5.5 million to the nearly bankrupt Colorado Railcar Manufacturing on top of $17 million awarded to the company for four specialized cars. TriMet expected to easily reclaim $3 million of the extra payments, but a court fight jeopardizes that hope.

The mess explains in part why TriMet is late launching its new westside commuter service, and it shows what can happen when a public agency makes a risky choice to do business with an unproven vendor.

TriMet contracted with Colorado Railcar in 2005 even though agency officials knew the company was losing money and had little cash. They said they were aware of past business troubles of the company’s owner, Tom Rader.

TriMet’s general manager, Fred Hansen, told The Oregonian that Rader’s past was “not a major concern” because the problems happened years earlier.

Almost from the moment Colorado Railcar started work in late 2006, the company fell behind schedule. Company officials disguised the truth about why and then stalled TriMet by repeatedly claiming that new financing was just about in hand.

The company’s financial condition worsened through 2007, forcing TriMet to speed up payments to help. Company officials diverted some of the money to other work.

In early 2008, TriMet took charge of Colorado Railcar’s finances. It paid $1 million in interest to the company’s lender and covered unpaid bills, the rent and even the company owner’s $37,000-a-month salary.

TriMet executives defend their actions, saying they aggressively safeguarded the agency and public money. They said circumstances forced tough choices to get the rail cars done and shipped to Oregon.

Only one bidder

TriMet’s hopes for launching a new commuter service in Washington County hinged on finding the right vehicle.

The Westside Express Service, now scheduled to start in February, is designed to carry 4,000 passengers daily between Beaverton and Wilsonville. They will ride on self-propelled passenger cars, picked by TriMet to save fuel costs over locomotive-led trains.

In 2004, two companies said they could build what TriMet wanted, although neither had a customer using such cars. One international manufacturer quickly dropped out because it couldn’t find enough business to justify production.

That left TriMet with Tom Rader’s undercapitalized company.

Rader, 62, made millions in 1987 from selling a company that created Alaska rail tours. He moved into rail car manufacturing, starting in a former blimp hangar in Tillamook. Rader didn’t respond to interview requests or written questions, but associates and records portray a man with a passion for railroads and a genius for spotting opportunity.

One of his companies garnered notoriety in 1997, when cigarette maker Philip Morris canceled its order for a luxury train because it was behind schedule and over budget. Philip Morris paid Rader’s company $70 million before giving up.

His next company sputtered to a close when it couldn’t finish rail cars for a highly publicized Florida tour train. The Florida company said delayed deliveries strangled its business, forcing it into bankruptcy.

Rader was back in business in 1998, this time as Colorado Railcar Manufacturing. His opportunistic nature soon had him on a new track, designing rail cars for public transit.

TriMet knew the risk

When TriMet chose Rader’s company to build its cars, his company had only one other order on its books for a new car. Agency officials knew the company had little cash on hand and had slipped into the red in 2004.

Jim Fronk, TriMet procurement director, said in an internal memo dated Feb. 23, 2005, there was “some level of risk” in doing business with Colorado Railcar.

He recommended TriMet “mitigate that risk” with unusual contract restrictions, a lien on all parts of TriMet’s cars while under construction and a requirement for a $3 million letter of credit.

Fronk didn’t mention Rader’s business history in that memo or in an update he wrote seven months later.

TriMet executives insisted in interviews that they knew of what one characterized as Rader’s “checkered past.”

Neil McFarlane, TriMet executive director for capital projects, said agency officials didn’t seriously consider changing course despite the discoveries. Colorado Railcar had the “perfect product” for the commuter service, he said.

Yet, McFarlane said, “We knew that if this company got into trouble it did not have deep pockets to reach into.”

In contract negotiations in 2005, TriMet asked Colorado Railcar for a performance bond worth $8.5 million, or about half the contract. Such a bond could be turned into cash for TriMet if it had to take over rail car construction.

Colorado Railcar executives contended such a bond was too expensive. TriMet backed down and agreed to a $3 million letter of credit, projecting it would cover even a worst-case scenario.

Besides, Hansen said, the company said Rader was pledging his own assets to guarantee the letter of credit. If the company owner was putting his home and others assets on the line, he must mean business, Hansen concluded.

Rader never made that pledge, company officials now say, but TriMet officials didn’t know that when they signed the contract.

A ‘recovery plan’

In November 2006, Colorado Railcar went to work stitching together the first of 5,000 parts needed for one TriMet car.

Within weeks, TriMet engineers visiting the plant in Fort Lupton, Colo., detected that tasks were being done out of sequence. Construction also was slower than expected. Nosing around, they picked up rumors that workers didn’t have the parts they needed because unpaid vendors wouldn’t ship them.

Back in Portland, TriMet officials weren’t panicked. TriMet routinely encounters delays in major projects and just as routinely demands a “recovery plan” from contractors. In its plan, Colorado Railcar said it was a month behind on one car.

TriMet’s notes of a Feb. 22, 2007, conference call record Rader’s optimism that he would soon have $15 million in new financing. Vendors would be paid and parts would flow, Rader said. Colorado Railcar would catch up and make the date for a strength test of the rail cars.

This was crucial to the Westside Express Service. By spring 2007, TriMet had acquired five miles of route and contractors were laying rail. The work would be of no use without rail cars that one TriMet executive described as the “heart of the project.”

McFarlane, TriMet’s executive director, decided to dig deeper into Colorado Railcar’s affairs. He wrote to Rader that “TriMet is now required to exercise due diligence” in examining the company. He demanded more detailed information than requested before the contract was signed. McFarlane also dispatched a high-level team to Fort Lupton, about a half-hour north of Denver.

This time, Rader said he was just a week from financing. According to TriMet, he warned the visiting TriMet officials that if he couldn’t get the financing, “all bets are off.” Those notes characterized Rader and his executives as “engaging” and “candid.”

Rader didn’t share that he had recently acquired another venture -- the American Orient Express luxury train. He assumed $6 million in debt but didn’t put up any cash. He later used Colorado Railcar money to operate what one accountant described as his “personal toy.”

The acquisition helped cement the big loan package Rader had been chasing. In May 2007, Hilco Financial, a Chicago financier of troubled companies, loaned Rader’s companies $17 million.

TriMet officials figured that the sophisticated lender wouldn’t pour money down the drain.

“We all sighed a big sigh of relief,” said Tuck Wilson, TriMet special counsel managing the commuter project.

Banking Reform Must Ensure Lenders Don't Unreasonably Change Loan ...

2008-12-08T03:06:00.000-08:00

However, the Federation also criticised the Government for not using today's Queen's Speech to announce legislation to stop the big energy firms from overcharging the nation's six million prepayment meter customers.

Banking reform

The Federation says the banking reform, due to be implemented in the new Parliamentary session, must prevent lenders unreasonably imposing new terms on businesses.

Such a measure would safeguard the delivery of thousands of new social homes, as some lenders are making unreasonable changes to the terms of loans made to housing associations, meaning a number of associations may not be able to build as many new homes as planned.

With four million people on social housing waiting lists, and the building of affordable homes in rapid decline because of the economic downturn, this is an issue that could slow the delivery of social homes down to an almost complete halt.

Welcoming the focus on banking reform in the new Parliamentary session, Federation Chief Executive David Orr said:

"The banking reform must stop lenders from unwittingly threatening the delivery of our nation's new social homes, by unreasonably changing the terms and conditions of loans given to housing associations.

"At a time when the building of new affordable homes is slowing down by record rates we need to remove any unreasonable obstacle to housebuilding.

"We are facing a housing national crisis - and housing associations, who build this country's social housing, need all the help they can get to carry on building through the credit crunch."

Mortgage markets

The Federation has also said that the reform of banking must help kick-start the mortgage markets, which have currently seized up - as this is preventing thousands of people from being able to buy affordable homes.

David Orr said:

"New lending to homebuyers has all but dried up and this is quite simply preventing thousands of people from buying affordable homes, many of which are now simply lying vacant.

"Ministers must use the banking reforms to kick-start the mortgage markets and allow those who can afford to buy to be able to buy.

"The Government should also use the nationalised Northern Rock bank to provide mortgages for families who would like to buy a home under the low cost home ownership programme."

Prepayment meters

The Federation has expressed great disappointment that the Government has failed to use the Queen's Speech to outlaw the overcharging of the nation's prepayment meter users - especially as the Prime Minister, Chancellor and Energy Secretary have all promised tough action.

Last March, during his budget statement, the Chancellor said the Government would legislate to stop the big energy companies from charging the nation's six million prepayment meter customers up to £500 more for their gas and electricity than those on the best deals available, unless the energy firms stopped the practice voluntarily.

Since then, both the Prime Minister and Energy Secretary have pledged to outlaw the practice unless the firms voluntarily stop charging prepayment meter customers more than anyone else.

Some commentators had suggested that the Government would introduce legislation today to tackle the prepayment meter issue, however the fact they have not will be a source of disappointment for many of the six million prepayment meters.

Federation Chief Executive David Orr said:

"The Government has missed a big opportunity by not outlawing the overcharging of millions of prepayment meter customers in the Queen's Speech today.

"Millions of low income families on prepayment meters will be hugely disappointed that after so much talk, the Government has failed to act.

"This was open goal to score a major victory for justice and fairness and ministers have missed it."

Manulife Financial sees Q4 loss; to issue C$2.125 Bln in common equity

2008-12-02T07:01:00.000-08:00

(RTTNews) - Canada-based life insurance company Manulife Financial Corp. (MFC: News ,MFC.TO: News ) on Tuesday forecast a net loss for the fourth quarter, the first quarterly loss in its history as a public company. The company also said it will issue C$2.125 billion in common equity in a bid to strengthen its financial and capital position. In addition, the company provided earnings outlook for fiscal year 2008.

Manulife said that of the C$2.125 billion that it plans to issue in common equity, it will sell C$1.125 billion in a private placement to eight existing institutional investors, while the remaining C$1.00 billion would be sold to a syndicate of underwriters in a "bought deal" public offering, both led by Scotia Capital Inc.

The company also forecast a net loss for the fourth quarter of C$1.5 billion and net income for fiscal year 2008 of approximately C$900 million.

Manulife noted that the purchase price of the shares acquired by the private placement investors and under the public offering at C$19.40 per share, which represents a discount from the stock's closing price on Monday of C$20.46 per share on the Toronto Stock Exchange.

According to the company, the private placement investors will receive a commitment fee equal to 2.062% of their individual commitments. The company has granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days after closing, to purchase up to an additional C$150 million in common shares at the same offering price. In the event the over-allotment option is exercised in full, the total gross proceeds of the public offering would be C$1.150 billion.

Both the private placement and the public offering are expected to close on or about December 11, 2008. Concurrently, Manulife will reduce its credit facility with the Canadian banks, announced on November 6, to C$2 billion from C$3 billion.

In early November, Manulife said it executed a binding credit agreement with the six largest Canadian banks to provide a 5-year term loan of C$3 billion. The company said at that time that the loan would be fully drawn down by November 20, 2008 and be deployed, as necessary, to provide additional regulatory capital for its operating subsidiaries.

Northstar to take over Indonesian conglomerate Bakrie's debt

2008-11-29T02:42:00.000-08:00

JAKARTA (AFP) — Northstar Pacific Partners Ltd. has agreed Friday to take on 575 million US dollars of Indonesian conglomerate Bakrie group's debt, according to executives.

Holding company Bakrie Brothers, which is controlled by the billionaire welfare minister Aburizal Bakrie, will form a venture with Northstar to control giant coal miner Bumi Resources.

The agreement will allow Northstar to have a stake in Bumi as its shares were the debt's collateral, Bakrie president director Nalinkant Rathod told Dow Jones Newswires.

The exact percentage of Northstar's stake in Bumi was not confirmed.

Prior to the agreement, Bakrie agreed to sell its 35 percent stake in Bumi to raise 1.3 billion dollars to pay its debt.

But Bumi's stock fell to about half of the initial selling price of about 2,000 rupiah (16 cents) as of Friday.

Bakrie finance director Yuanita Rohali said the debt Bakrie owed to Oddickson Finance was the debt that Northstar would take over.

The British Virgin Island-based Oddickson lent 1.1 billion dollars in April to Bakrie and has had 70 million dollars returned.

Rohali said Oddickson had agreed to turn its remaining loan to Bakrie into stakes in other Bakrie companies, such as Bakrieland Development and Energi Mega Persada.

Rohali added that the Jakarta-based Anchora Capital planned to take over 72 million dollars of Bakrie's debt to JPMorgan and would convert the debt into a stake in Bumi.

Bumi operates the Kaltim Prima and Arutmin mines in Indonesia, the world's largest thermal coal exporter.

Bakrie Brothers still owes 105 million dollars to India's ICICI Bank and 81.5 million dollars to several local lenders.

Aburizal Bakrie, the main financial backer of President Susilo Bambang Yudhoyono's election campaign in 2004, was considered Indonesia's richest man with a family fortune estimated by Forbes Asia magazine at 5.4 billion dollars.

But the global financial crisis and plummeting commodity prices have damaged the family business. Lapindo Brantas, which is owned by a Bakrie subsidiary, has been ordered to compensate the victims of a volcano mudslide which displaced 36,000 people and is largely believed to have been triggered by Lapindo's gas exploration.

Last week, Aburizal Bakrie said he would not be seeking another term in the cabinet next year.

Nuns battle Central Highlands’ dark secret

2008-11-15T19:26:00.000-08:00

VietNamNet Bridge - Catholic nuns at Vinh Son shelter in Kon Tum Province are trying hard to stop several ethnic minority groups from burying infants alive when their mothers die.

The belief is that the child will continue to be nursed by his or her mother.

The nuns and members of the local Women’s Union and Youth Union have visited areas in the Central Highlands calling on people to give up this centuries-old custom.

"The custom was abolished in Kon Tum Province several years ago," nun Y Biut said. "Now our efforts are focused on ethnic groups in Gia Lai Province."

Lucky children

Residents in Kon Thup village in Gia Lai call it a miracle that Pi Yo Rong survived. The 18-month-old is now healthy and playful. His mother died last year when he was four months old.

"I was in An My Village when I got a call saying a boy was about to be buried along with his mother," Biut said. A motorbike taxi quickly took her to the village where preparations to bury the boy were underway.

"I persuaded the boy’s father and relatives to let me adopt him," she said.

Rong now lives at Vinh Son 1 shelter where he prefers to play with 11-year-old Y Loan, a Se Dang ethnic girl.

Loan’s mother died after giving birth to her on the bank of a stream in Plai Kan village, Ngoc Hoi District.

Hours later, her death was discovered by villagers and they then prepared to bury both the mother and the baby.

"We arrived in time to rescue the baby who was hungry and crying loudly," nuns at the shelter said.

Loan is now in sixth grade in the Hung Dao Junior Secondary School in Kon Tum town.

Rong and Loan are among the 70 children rescued by the nuns from being buried alive.

They and more than 300 orphans and abandoned children from the Ba Na, Se Dang, Gia Lai, and Gie Trieng ethnic groups now live at Vinh Son 1 and Vinh Son 2.

The former, a small house behind Kon Tum wooden church, was set up in 1947 to care for orphaned children.

With the number of children being sent to the shelter increasing, the Kon Tum People’s Committee set up Vinh Son 2 in 1996.

Both shelters are being managed by nuns from ethnic minorities of the Anh Phep La (Miracle Pictures) Order.

"The children come from many parts of the Central Highlands," Biut, who is also the manager of Vinh Son 1, said. "Many were abandoned by their parents at birth."

Charitable heart

The nuns wake up early every morning to prepare breakfasts for the children. "After breakfast, we clean the house and wash clothes," nun Y Lok said.

Vinh Son 1, which has 180 inmates, spends around VND700,000 a day for food.

The nuns, many of whom are more than 50 years old, work on a farm in Dakrowa village, 30km from the shelter.

"We grow vegetables and bananas to improve the quality of the children’s food," Lok said. "We also sell our farm products to get money to buy them clothes, books, and study materials."

Her colleague, Y Deo, said: "We’re pleased when the children are in good health and do well at school."

The nuns exhort the children to treat each other like members of a family.

Every day children who are in fifth and sixth grades teach the younger ones and help them with their homework.

Rewards

Many children, after finishing high school or vocational training courses, leave the shelters to find jobs and start their own families.

A Nam, who lived at Vinh Son 2 for 10 years, graduated from Kon Tum’s Teachers College two years ago.

He now teaches at a primary school in Ngoc Bay village. Y Thu is a student of Ha Noi’s Medical University.

Y Ly Kham goes to HCM City’s Social Sciences and Humanities University.

"Their success is the greatest reward for us," the nuns said.

Ca Ly Trang, who studies music at a military-run school, returned to visit the nuns last summer. "I have never forgotten the kindness I received from [them]," he said.

"Living far away from them, I always think of them and miss them very much."

A Huyen, who teaches ethnic minority students English in Dak Glei District, said he works hard and saves money to support the nuns.

"The nuns are my second mothers who brought me up and helped me become a useful person to society," Huyen said.

Tuesday Newspaper Review - Irish Business News and International Stories

2008-11-03T23:50:00.000-08:00

By Finfacts Team

The Irish Independent reports that the trickle-through of fallout from the collapse of US investment banking giant Lehman Brothers continued yesterday as two of Europe's biggest banks came clean on their exposure to the fourth-biggest US investment bank, which filed for bankruptcy in mid-September.

France's Societe Generale booked an 84pc fall in third-quarter profit on the back of a write-down related to Lehman. SocGen said non-recurring items from the collapse of the US giant and other write-downs related to the market slump cut €1.2bn from its pretax profit.

Net profit fell to €183m, with earnings also hit by a €244m loss at its corporate and investment banking division.

It has been an eventful year for the Paris-based bank, which was at the centre of a high-profile scandal in January after rogue trader Jerome Kerviel took wrong bets worth about €5bn on global stock prices.

The news comes after French President Nicolas Sarkozy last month earmarked €360bn to help bail out French financial institutions. France has also agreed to lend €10.5bn to its top banks, including €1.7bn to Socgen, to encourage them to lend more to businesses and kick-start the economy.

Meanwhile, across the Rhine, Commerzbank became Germany's first retail bank to turn to the government for a handout, taking €8.2bn from Berlin to help prop up its finances.

more detail at http://www.finfacts.ie/irishfinancenews/article_1015161.shtml

Victoria Beckham spices 'Vogue India' with sari clad photo shoot

2008-10-22T20:55:00.000-07:00

Spice Girl Victoria Beckham delights Indian fans as cover girl for 'Vogue India' November issue, dressed as an Indian bride in a sari.

The 34-year-old style icon, known for making bold style statements, tells the magazine which will be on stands within a week, "I've never played safe with my image."

Meanwhile, Victoria's husband David Beckham, 33, is set to move to Italy on loan from Los Angeles Galaxy to AC Milan in January.

How to get rich despite bloodbath at markets

2008-10-09T23:59:00.000-07:00

If there was one question that people would pay a million bucks to have the answer to, it would be – How do I get rich? The answer is really obvious – if you have a million to spare then why waste it on a foolish question.

Invest it and over the years you'll surely get your millions.

But that's not the answer they are looking for. Surely there has got to be something more to it -- some deep insights, some invaluable pearls of wisdom, some magic!

Not really. It's often just simple common sense. Like Robert Kiyosaki's best selling book Rich Dad, Poor Dad that should be made the Bible of the financial world. Here are four points from there on how you can do it:

1. The value of learning

Go back to your earliest memory. When you wanted to ride a bike on your street, the first thing you had to do was learn how to ride. Or when you wanted to pass your Maths exam, you had to learn your tables. Then why is it that when we want to make money, do we not understand that we have to learn good investing?

Instead we tend to just pick up the phone, speak to our stockbroker, buy a stock and start dreaming of becoming rich. That's exactly what rich investors don't do.

Instead, they 'learn' to 'invest'. They learn all there is to know about the art of investing in stocks. All about the stocks they wish to buy and only then do they take the plunge. Above all, they keep practicing what they have learnt. They keep sharpening their saw. This single factor of learning before hand separates the rich investors from the poor investors,

2. Shop at a discount

Another bit of common sense -- What do you do when your neighborhood super market announces a SALE? You flock into the stores and buy up every little item and build up at home piles of grocery, soaps, etc. But when stock markets reduce the prices of shares and announce a 'crash' every investor rushes in to 'sell' and runs away from the market.

Again, conversely, when Super Markets raise their prices, customers shy away and refrain from buying till the next 'sale'; but when Stock Markets announce rising prices, every investor rushes in to 'buy'.

This is not the way rich investors behave. They follow the same principle of buying at the super market. They buy stocks only when the stock markets crash. Ask Warren Buffet!

3. Define asset

If you own it, it's an asset. If you owe it, it's not. The rich never keep their wealth in the form of liquid money in a bank account. They always keep acquiring assets while the poor acquire liabilities, which they mistakenly believe are their assets.

A house bought on a loan is not an asset, it's a liability. The same goes for paying for groceries through credit card. So you need to learn the difference.

In life what is important is not how much money you 'make' but how much of that money you succeed in 'keeping' and 'multiplying'.

The rich know how to keep it because they know how to invest it. Money well invested is money well kept. Good investing is often more rewarding than good earning.

4. Make real money

Real money is made when you 'buy' an asset and not when you sell that asset is yet another gem from the author. Be careful of the price you pay when investing in an asset.

Don't rush into buying any investment at any price. Wait till the prices come down the way. The 'price' of the asset when you buy is the sole determinant of your profit on that asset when sold. If you buy that asset cheap, your profit on sale is obviously larger.

All these four seems rather straightforward now that you think about it. We known all this instinctively and we only have to apply it to the stock markets -- it's really common sense.

The only problem is that common sense isn't really all that common.

http://www.ibnlive.com/news/how-to-get-rich-despite-bloodbath-at-markets/75499-7.html

Bush urges $700B bailout

2008-09-21T03:37:00.000-07:00

Kevin Drawbaugh and Richard Cowan, Reuters
Published: Sunday, September 21, 2008
The Bush administration on Saturday sent Congress a $700-billion plan to purchase bad mortgage debt from U.S. financial institutions in a bid to confront the worst American financial crisis since the Great Depression.

Democrats, who control both chambers, questioned whether there were sufficient protections for homeowners and taxpayers, but said they also recognized the need to act quickly.

With the House and the Senate aiming to consider the legislation within days, aides for lawmakers from both parties were expected to huddle through the weekend on Capitol Hill to pore over the hastily drafted plan.

Aimed at shifting hard-to-trade mortgage-related debt off the balance sheets of U.S. banks and other institutions and into a massive government portfolio, the plan would give the U.S. Treasury Department extraordinary powers.

The government could acquire up to $700 billion in mortgage-related assets from U.S.-headquartered institutions, under the proposed program.

Details on precisely how the purchases would be executed were unclear.

The treasury secretary's decisions on the purchase program could not be reviewed by any court, according to a copy of the department's draft legislation.

To accommodate the program, the U.S. government's debt limit would rise to $11.315 trillion from $10.615 trillion.

Treasury Secretary Henry Paulson "is in effect becoming the dictator of the American financial system for a few months, subject to congressional oversight," said Wall Street historian John Steele Gordon, author of a book about the national debt.

Since the crisis began more than a year ago, the U.S. Treasury and Federal Reserve have put nearly $1 trillion of taxpayer money on the line to help credit flows, while banks have suffered more than $500 billion of writedowns and loan losses.

The crisis grew more acute this month with government takeovers of mortgage companies Fannie Mae and Freddie Mac; the bankruptcy of Lehman Brothers Holdings Inc.; Bank of America Corp.'s shotgun agreement to buy Merrill Lynch & Co.; and a bailout of insurer AIG.

This all coming just six months after a government-backed rescue of investment bank Bear Stearns.

Congressional Republicans generally praised the Bush plan and called for its swift enactment, while Democrats said it left key questions unanswered and needed work.

Democrats have said they might try to use the financial bailout legislation to reduce home foreclosures and put some limits on the pay of corporate chief executives.

"Main Street should not have to pay for the sins of Wall Street," said Montana Democratic Senator Max Baucus, chairman of the tax-focused Senate finance committee.

New York Democratic Senator Charles Schumer, chairman of Congress's joint economic committee, said the plan had no visible protection for taxpayers or homeowners, but he emphasized that speed was essential.

U.S. Republican presidential candidate Senator John McCain said: "I've spoken with (Treasury Secretary Henry) Paulson and look forward to reviewing the full administration proposal, as well as any modifications that might emerge in congressional negotiations."

A spokesman for his Democratic counterpart, Senator Barack Obama, said: "(Obama) supports the effort of Secretary Paulson and Federal Reserve chairman (Ben) Bernanke to work in a bipartisan spirit with the congressional leadership to find a systemic solution to our deepening crisis."

Bush said he initially thought the government could deal with the trouble on Wall Street "one issue at time," but the problems were at risk of spreading and required bold action to save jobs and retirement accounts.

"I'm sure there are some of my friends out there saying, I thought this guy was a market guy; what happened to him?" Bush said at the White House.

U.S. authorities have now turned their focus to part of the underlying problem -- the rising tide of bad mortgage debt choking the financial system.

Banks and other institutions bet heavily during the home price bubble on mortgage-backed bonds and other securities that have lost value as homeowners struggled to make their mortgage payments.

The bursting of the U.S. housing bubble makes it difficult now to value and trade these complex securities, which are clogging the inner workings of the financial system.

Treasury's purchase plan would at least help the market put a price on such broken assets, said Jan Hatzius, chief U.S. economist at Goldman Sachs, one of few major investment banks to survive this year's brutal Wall Street shake-out.

"Congress will want to add a lot of detail over the next few days so things could get pretty confusing," Hatzius said, noting it is not exactly clear how the plan would clarify banks' balance sheets or inject capital into them.

Under the draft legislation, Treasury could hire asset managers to handle the debt purchases, which could include residential or commercial mortgages and related instruments that were originated or issued on or before last Wednesday.

The authority to purchase would end two years from date of enactment, but authority to hold the assets would continue.

Banking industry sources said the government would hold "reverse auctions" in $50-billion tranches to let banks bid their assets for government purchase, thereby encouraging the lowest cost to taxpayers. But that level of detail was not spelled out in the draft legislation.

A Treasury official said Friday that hedge funds would not be eligible to offload troubled assets under the plan, but that was not explicit in the draft legislation.

Financial markets have shown approval so far of the Bush administration's latest efforts, but may be disappointed if Congress does not swiftly back the measures.

Is this the end of US bail-outs?

2008-09-15T04:12:00.000-07:00

The likely disappearance of two of Wall Street's biggest names - Lehman Brothers and Merrill Lynch - looks like a big change in US government policy.

In March, when fellow investment bank Bear Stearns had to seek emergency funding, it was acquired by JP Morgan, but the takeover was backed by the US central bank, the Federal Reserve, which sweetened the deal with a $30bn (£17bn) loan.

Only a week ago, the US government took over the giant mortgage finance providers Fannie Mae and Freddie Mac, which between them guarantee about $5.3 trillion (£3 trillion) of mortgages.

But over the weekend, when other banks were considering taking over Lehman Brothers, no incentives appear to have been offered by the government.

"The US Treasury has decided it was time for shock therapy, and taken an extremely gutsy gamble by letting Lehman fail, against widespread expectations that a solution would be brokered over the weekend," says Marco Annuziata, global chief economist at Unicredit.

"If it works, it should boost considerably the hopes that the global financial system can work itself out of the year-long crisis, but the risk is enormous."

'Very healthy'

Peter Douglas from the hedge fund consultancy GFIA agrees that there could be long-term benefits from the government's decision.

"The US and the Federal Reserve in particular, appear to be drawing a line under public funding," he says.

"Longer term this is very healthy as it accelerates the clearing process, and therefore the rehabilitation of the financial system."

But it is important to appreciate the differences between some of the institutions that have received government money, according to Jon Danielsson from London School of Economics.

"Bear Stearns was a change in policy for the US government because it had not fully appreciated the problem of how interconnected the banks are," he says.

He adds that government policy before that had been to help high street banks but not investment banks, but that it considered the damage that would have been done by Bear Stearns failing was so great that its takeover had to be supported.

"This policy came under such a lot of criticism in the US that it was not able to repeat it for Lehman Brothers," says Mr Danielsson.

Previous crisis

The government may be hoping that the banks themselves find a way out of the crisis, and indeed on Sunday 10 of the world's biggest lenders agreed to establish a $70bn emergency fund, which any one of them may tap up to a third of should they face any liquidity problems.

"If you look at previous crises such as the secondary banking crisis in 1973-75, that's the kind of solution you need rather than governments endlessly throwing money at the problem," says Terry Smith, chief executive of the brokerage Tullet Prebon.

It is in this atmosphere that AIG, formerly the world's biggest insurer, is approaching the Federal Reserve for a $40bn bridging loan.

"If they didn't give the money to Lehman they are not going to give the money to an insurance company," predicts Jon Danielsson.

Alitalia backer says 'No' to Air France stake: report

2008-09-02T06:31:00.000-07:00

MILAN (AFP) — Allowing Air France-KLM to take a stake in a restructured Alitalia would be a "fundamental mistake," one of the backers of the near bankrupt Italian airline's rescue said in remarks published Tuesday.

Gianluigi Aponte told the daily Il Sole-24 Ore that for the new Alitalia "to have a competitor as a shareholder would be a fundamental mistake.

"Personally, I am against the idea of having another airline as a shareholder," said Aponte, a shipowner who has stepped in with other leading industry and finance figures to support the Alitalia rescue plan.

Spurned as a buyer in April, Air France-KLM said last week, when the Alitalia rescue plan was being put together, that it would be ready to take a stake in the new airline.

Lufthansa has also expressed an interest while reports have put British Airways in the frame as well.

On Friday, Alitalia asked to be declared bankrupt and placed under special administration in the first part of a rescue plan that will see its profitable operations hived off into a new company.

Its unprofitable businesses and debt will be taken over by another firm.

Talks between Air France-KLM and Alitalia on a full takeover collapsed in April when the airline's future became an issue in elections won by now Prime Minister Silvio Berlusconi who promised voters an 'Italian solution' to its problems.

Alitalia's debt reached 1.7 billion euros (2.5 billion dollars) as of July.

It employs 11,100 people in its air transport operations and a further 8,300 in maintenance and services.

Union sources said Tuesday that projected job losses under the rescue plan would be about 4,500, much less than the 7,000 cited in press reports.

The company, in which the Italian state has a 49.9 percent stake, has been surviving on a loan of 300 million euros made in late April from public funds after the collapse of the takeover talks with Air France-KLM.

3.4 million have been rejected for first mortgages, remortgages, unsecured loans and secured loans in the past 18 months - GMAC

2008-08-25T04:13:00.000-07:00

The mortgage intermediary market has never been as important to consumers, reveals new research by GE Money Home Lending, one of the UK's leading special lenders. According to GE's research more than 458,000 mortgage and loan customers had to apply at least four times before successfully securing credit during the last 18 months...

With the recent trend of lenders tightening their criteria and focusing more efforts on direct offerings GE's research suggests that previously creditworthy people are now potentially being classed as a higher credit risk and therefore finding it more difficult to source the deal they need.

The research shows more than 3.4 million people claim to have been rejected for first mortgages, remortgages, unsecured loans and secured loans in the past 18 months covering 2007 and the first half of 2008 - the majority of which will be as a result of the credit crunch.

Crucially, the research also reveals what people subsequently did, with 13% going on to make four or more applications before being accepted for the loan they needed. Around 30,000 people made more than eight applications. Around 30% gave up once they were rejected while 12% - around 412,000 - were not accepted by any lender despite trying again.

GE Money Home Lending is warning lead to multiple failed applications. This could potentially increase the risk of borrowers being turned down as applications can be logged on credit records and could count against a borrower the next time they apply.

Consumers can take action themselves to increase their chances of a successful application by checking their credit file to ensure it is up to date, using credit agencies such as Experian. Other actions could include closing down unused credit cards and researching on the internet using price comparison websites before applying.

In addition for those seeking a mortgage, the lender believes the high number of rejections could potentially be cut if more consumers used brokers to help with applications. Borrowers can increase their chances of making a successful application by using a mortgage broker or packager. With the rapidly changing mortgage landscape they can advise on which companies are likely to accept them and steer consumers away from making applications which are doomed to failure.

Gerry Bell, Head of Mortgage Marketing, GE Money Home Lending:

"Multiple failed applications can be time consuming and, of course, can be detrimental to a borrower. With criteria changing regularly and the risk of decline increasing all the time, it is even more important that borrowers looking to obtain a mortgage use reputable mortgage professionals with broad experience, knowledge and systems at their disposal which will increase the chances of the borrower getting the deal they need.

"The focus in the mortgage market is now on availability more than anything else, with financially strong and experienced lenders the most likely to offer credit. In addition there are a number of dedicated specialist lenders with strong pedigree who may be able to help meet borrowers needs.

"The key to successfully navigating through the current storm is to ensure you do you homework, check you credit file looks as good as it can and potentially seek expert advice from a broker before making an application. Clearly consumers should try as far as possible to only apply to lenders where there is a good chance their application will be accepted and reputable, professional advisers are well placed to try to help to achieve this."

Make the most of falling property prices

2008-08-22T04:55:00.000-07:00

The beautiful new development, Orchard House, Hazlitt Drive, in Maidstone, Kent, has some superb properties at amazing prices, and if you are thinking of moving then make the most of it now, as it won’t last! Everyone is aware of the “credit crunch”, but of course nothing is forever, and those who are canny, can make some exceptional purchases.

We all know that from electrical goods to designer dresses prices are falling rapidly but the biggest purchase you will ever make is your house – and it is here that you can make real gains that will last a lifetime.

At Orchard House, a development of 8, three bedroom town houses and 15, one and two bedroom apartments, the superb reductions and schemes to facilitate purchasing can be clearly seen.

For instance the magnificent, three/four bedroom, three storey show home with single garage has been reduced from £319,950 to £299,950 –this is for a brand new home of excellent proportions for under £300,000! And, the property comes with carpets, curtains, light fittings, alarm and turf to rear garden!

Plot 2 is reserved but plot 3 is the same size and style as the show house and is now on the market at just £289,950.

Hillreed Homes has a number of schemes available to aid purchase for serious buyers and this includes up to 15% Shared Equity on plots 19 and 20. Both on the market at £319,950 under the scheme this brings down the initial purchase price to just £271,958.
The three bedroom town houses on three floors really are spectacular. The flexibility of use is tremendous and because you can live on the ground floor or the first floor – or both - you can create your own designer home.

Firstly the architect has divided up the space equally; 50% for living, 50% for sleeping. Secondly, because of the clever layout you can “mix and match” perhaps choosing to use the two bedrooms on the 2nd floor as cinema rooms/games rooms or as a master bedroom. The choice is enormous which makes them really good value for money at a floor area of 1435 sq feet overall.

The second floor is devoted to a sleeping area and provides two good sized bedrooms, (one with fitted wardrobes), plus bathroom. This is perfect for a home with children or teenagers. They have their own “space”, and it is slightly removed from rest of the house!

The first floor has the master bedroom, (again with fitted wardrobes) and benefits from en suite shower facilities. On this floor there is also the 15’10” living room with double opening doors onto a Juliet balcony.

On the ground floor the entrance hall leads directly to the very spacious family dining room, with double opening doors to the private rear garden. Some homes benefit from raised decking.

There is a well fitted kitchen and cloakroom. The house has a single attached garage plus off road parking for a 2nd vehicle.

The homes are offered with a very good specification and there is an opportunity to personalise the home of your choice, subject to stage of build.

Having a home in a centrally located position has many advantages – easy access to trains, buses and motorways which can save time and money if you are a commuter.

Secondly at Orchard House there are a number of schools in the area, a bus stop within a few minutes walk and the delights of the County town of Maidstone.

For more information on the Shared Equity Scheme and other helpful incentives why not visit the sales office on site which is open seven days a week? There is also a splendid show home now open.

Already this month some building societies have reduced their fixed rate loans and tracker mortgages which is a big step in the right direction. In the South East there is always demand for property which will be felt very strongly once the money lenders begin to loan more. If you buy now, within a couple of years your capital investment could have increased dramatically.

There really has never been a better time to buy. Why not seriously look at how you can move and how you can take advantage of the lower house prices. Besides, a dress in a sale is good fun but only lasts a few months – a home is for a lifetime with a far greater increase in your personal worth.

Show house £299,950
Houses from £289,950
Two bedroom apartments from £204,950 (Option for share equity bringing initial price down to £174,208).

How to pay your way through university

2008-08-19T05:37:00.000-07:00

The average debt piled on students as they leave university grow each year. More are having to earn an income to keep their heads above water.

Here's our guide to paying your way through Uni, with job ideas you may not have thought of, and tips from the UK student who turned an idea into a $1m money-spinner...

According to figures released by Halifax, almost half of all UK students (48%) have a job mainly for the purpose of aiding them in funding their studies.

If you are one of the unfortunate 48% who have no choice but to balance university studies with work then don't fear, This is Money has the perfect guide to what options there are out there for you.

This is Money has already provided a guide to help students budget their money, and now we have produced a practical breakdown on what job opportunities there are to help survive paying your way through uni – whether you're entitled to a student loan or not.

Searching for the job you want

Students may be attracted to the ease and lifestyle of bar or restaurant work, but these will seldom provide much above the minimum wage. Other jobs will offer higher pay and the opportunity for flexible working.

Here is a list we compiled of alternative student jobs - which may vary depending on different universities:
• Book keeper - a very good hourly rate at around £8 an hour.
• Annual fund student caller – These are teams of students who call ex students and staff looking for donations. Pay starts at £7 an hour.
• Administrator (recruitment/customer service) – Starting at £7 and can go as high as £9 an hour.
• After school nanny – between £7.50 and £10.
• After school tutor – varies considerably, can be anything between £6 and £15 an hour.
• IT programmer – no less than a £7 hourly rate.
• Gym staff – ranges from between £6.50 and £9.50.
• Waiter/Waitress – between £6 and £7 an hour.

If you haven't quite got the time to fulfil these time-sapping jobs then there are more free time-friendly positions on offer too, including:
• Receptionist – around £6 an hour
• Bar Staff – which is from around £6 an hour at most universities
• Café assistant – starting at £6 an hour

EXCLUSIVE: City in crisis as Shinawatra forced to borrow £2m from ex-chief Wardle just to pay the players

2008-08-11T16:47:00.000-07:00

The shocking extent of Thaksin Shinawatra’s financial difficulties at Manchester City can be revealed today as it emerged that only last month he had to borrow £2million from former chairman John Wardle to pay staff wages.

Sportsmail can reveal that Wardle, who resigned in protest at Thaksin’s reign on July 9,was so concerned City staff were not going to be paid that he agreed to loan the club’s owner £2m for the third time in less than a year.

Although Wardle has been repaid and no staff wage payments were missed, it is
clear City are operating on a hand-to-mouth basis each month. There are fears
within the club the problem will soon recur, with Wardle no longer around to bail
Thaksin out.

Barclays Premier League chief executive Richard Scudamore is demanding urgent talks with Thaksin, who fled Thailand to avoid facing corruption charges.

He said: ‘We are clearly going to have to establish the status of his return to England and where that leaves him in regard to the legal process in Thailand.

Our rules are clear that somebody has to be convicted of something to fail the “fit and
proper person” criteria and, until someone does, he still falls within our rules. But there is no point in having this test unless it is meaningful, as we have always said it is, and it has to be applied.

‘We need to make sure that, if somebody is guilty of something, we will deal with it.’

It is understood that if Thaskin is convicted in his absence, the Premier League
would investigate whether they could force him to relinquish control of City.

Last night Wardle would not comment, but he is known to be distraught at the manner in which the club he sold last summer are struggling under Thaksin’s leadership.

Thaksin has invested considerably less of his own money in City than first thought and has been seeking fresh investment while relying more heavily on other borrowed capital.

Meanwhile, City manager Mark Hughes faces a struggle of his own to gain direct
control of transfer policy after a weekend in which he came into confrontation with the
club’s new chief operating officer, Paul Aldridge, over the proposed transfer of Stephen
Ireland to Sunderland.

Hughes was said to be incandescent when he learned Ireland was not at the City of
Manchester Stadium for the club’s friendly against AC Milan on Saturday and blamed
Aldridge for allegedly trying to engineer the transfer.

Aldridge, formerly at West Ham, has denied this and the club have insisted that the
blame for the embarrassing affair lies at the door of agents.

Nevertheless, it is understood Hughes has made it clear to the club over the last 48 hours that he must be left in control of transfers if he is to continue in the job he took on in June.

Bookmakers have slashed the odds against Hughes being the first managerial casualty of the season over the last day or so and although there is not thought to be much likelihood of the former Blackburn boss quitting, he is said to be shocked at the manner in which the club is run.

The official line from City on the Ireland situation, and indeed Vedran Corluka’s aborted transfer to Tottenham, is that Hughes was in the loop throughout
and has not been undermined.

But Spurs are so angry at the way they feel City messed them about over Corluka that
they were considering legal action last night against their Premier League rivals.

With the Croatia defender having undergone a medical and agreed personal terms at
White Hart Lane, the transfer was about to go through until City pulled out on Sunday.

Last night the Premier League revealed that although Spurs’ transfer documents had been completed and submitted, City’s had not. This should leave City in the clear.

City are also known to be in negotiations for two new players, though given the financial turmoil now gripping the club, they are unlikely to involve large sums if players cannot be shifted out first.

As revealed in Sportsmail yesterday, Thaksin is back in London after refusing to
return to Thailand to face trial on corruption charges.

Parents save Wentworth College, Bournemouth, from closure

2008-08-09T03:54:00.000-07:00

A campaign by parents to save an independent girls’ school from closure has ended in success after an eleventh hour bail out by a leading church school charity.

The United Church Schools Trust (UCST), chaired by Lord Carey of Clifton, former Archbishop of Canterbury, will take over the running of Wentworth College in Bournemouth, which went into administration on July 28.

The entire independent sector is feeling the squeeze as a result of the credit crunch, as parents struggle to pay rising school fees and deal with escalating costs of food and fuel. One in 10 private schools is facing financial difficulties according to education experts. But groups of schools, run commercially or on a charitable basis, are stepping into the breach and taking over failing individual establishments to extend their portfolios.

Wentworth College, based in a mansion in a prime location, yards from the beach, near the affluent Sandbanks peninsula, faced closing its doors after more than 100 years. A recent Ofsted report described it as outstanding but it went into administration after a £400,000 loan from Lloyds TSB was withdrawn.

The school was trying to reverse a declining school population by going co-educational from September, but was said to have attracted only 40 boys when it needed 75. It borrowed the money to build sports facilities for boys but the bank –demanded payment with no notice.

Educational charity UCST – which owns and manages 11 schools based on Christian principles - presented its bid to take over the school to a packed hall of parents and teachers at the school on Thursday night.

Lord Carey told The Times that the discussions to rescue the school had moved very quickly. “Obviously we want to save the school. Our aim is to help.” He said the school would have a “broadly Anglican ethos” in keeping with the trust, but added that decisions were still in the early stages.

The rescue bid was confirmed at 12.30 am this morning just days before Grant Thornton, the administrator would have been liable for paying staff salaries, 14 days after the school was put into administration.

A campaign by the parent’s group to save the school raised £300,000 in promised interest free loans – half the amount needed to save the school. The campaign also asked parents to send in fees for next term a month early and up to 70 per cent have already been received.

Brian Cooley, one of the co-ordinators of the battle to keep the school open, said "parent power" had saved the school. "Wentworth is now really set and we hope for a huge positive chapter in its history if we can continue with the way we have been galvanised in the last couple of weeks."

He added that a “catalogue of errors” had put the school into administration. Mr Cooley, whose son is due to start at Wentworth College in September, said: “There was a lack of duty of prudence not to put the charity at any exposure to administration."

Andrew Barfield, a parent at the school said he was very relieved at the news. “We can see that the future for the school is very bright and positive and we’re very happy with United Church Schools Trust.”

But other schools remain in danger with at least six closing and dozens more are struggling. Those closing include, Dorset and Wispers school in Haslemere, Surrey. Four preparatory schools are also shutting down – Westbrook House in Folkestone, Kent; Sandhurst school in Worthing, West Sussex; Dorchester preparatory school in Dorset; and Fawkham House school in West Kingsdown, Kent.

Research by The Good Schools Guide, indicated that almost one in five has lost 10 per cent or more pupils in the past four years.

Barney Northover, head of education services at lawyers Veale Wasbrough, which represents 700 private schools, said groups of schools taking over schools that have fallen on hard times is a feature of the current market. “In challenging market conditions where banks are not in a position to give loans we could see more schools running into trouble. But this represents an opportunity for the groups of schools to acquire more schools to build their groups and that is their business plan.”

Charles Robinson, who is in charge of acquiring schools at Cognita, which owns and manages 46 schools, said there had been an increase in the number of institutions looking to become part of the group. He said small boarding schools for girls were particularly at risk of closure. “People don’t want to send their children away to boarding school and if they do they want them only an hour or two away and the preference for girls is for co-ed.”

The school will reopen in September under the UCST’s management. The charity runs the United Learning Trust, which is the UK’s largest sponsor of academies. Richard Tice a member of the United Learning Trust board, has called for academies to have the power to exclude troublemakers and sack poorly performing teachers.

Grant Thornton, the administrators, said they were not commenting on the case. UCST refused to comment.

Animals on show at museum

2008-07-28T05:16:00.000-07:00

By Web Reporter
A FURRY tarantula and cute African pygmy hedgehog were among the exotic animals on show at Epping Forest District Museum.

The event on Saturday (July 26) was so popular that museum staff had to turn people away from the half-hour hands-on sessions where children and families could get up close and learn more about the animals and insects.

Zoolab, which runs educational workshops and roadshows involving a whole range of animals, brought in the pygmy hedgehog and tarantula along with a snake, giant stick insects, cane toad, giant African land snails and a monitor lizard.

The event was part of the museum's current exhibition called Perfect Pets which looks at the history of different kinds of pets and includes trails and activities.

Museum curator Tony O'Connor said: "We ran four half-hourly sessions in which they talk about the animals and their welfare and how to look after them, and also give people the opportunity to handle them and get up close.

"It was very popular and we had to limit numbers to 50 per session. We are quite a small museum and each one of the sessions was completely full. At the end of the day we had to turn people away which is not something we like to do.

"I think there is public interest with being able to see and touch these types of animals."

And he said although the event was very much aimed at children the mum and dads were just as keen to get up close and personal.

Perfect Pets is a touring exhibition on loan from Luton Museums Service and is on display at the Waltham Abbey museum in Sun Street until August 26.

LATICS GET ZAKI DEAL DONE

2008-07-22T05:27:00.000-07:00

Wigan have completed the signing of Egypt international striker Amr Zaki.

The 25-year-old Zamalek striker has passed a medical and has put pen to paper on a one-year loan deal with the Barclays Premier League club.

Zaki said: "I've come to England to score goals. That's what I do.

"I want to show the manager and the fans of Wigan that they have made a good choice and now I am totally focused on trying to get in the squad and prove myself here."

According to FIFA's current rankings, the 27 goals he has scored in 48 appearances for his country put Zaki in the number one position in the world.

Latics manager Steve Bruce said: "It's been a real tough deal to push through but I'm delighted that Amr's finally a Wigan player.

"Everything has been sorted, and now he can just get on with the job at hand.

"Anyone with a one-in-two strike-rate or better over 50-odd international games knows where the back of the net is.

"Although he hasn't played in the Premier League, I am convinced, having seen him personally on several occasions, that this boy can do the business.

"I think our supporters will love him because he's a passionate boy who plays with his heart on his sleeve.

"He is all-action, physically powerful, great in the air, with two great feet and a good turn of pace."

Zaki - recently named Egyptian player of the year - scored 22 goals in 54 appearances for his club side in Cairo.

£100000 for Troutbeck pool as Berners faces demolition

2008-07-18T04:44:00.000-07:00

A SOUTH Lakeland swimming pool has been awarded more than £100,000 of council funds – while another faces the bulldozer.

But campaigners for stricken Berners Pool in Grange say they were not afforded the same financial support by the authority last year.

The Edwardian town’s £3.5m award-winning building, which opened in 2003 and closed three years later, now faces an uncertain future while development options for the site - which include demolition – are considered.

Grange district councillor Tom Harvey, shadow portfolio holder for leisure, said he welcomed the news that extra investment was to be put into Troutbeck Bridge Swimming Pool to bolster provision in the area.

But he said: “SLDC recently refused to support the brand new Berners Swimming Pool in Grange yet seem happy to invest in this ageing site in need of substantial upgrading which has already gone into administration once.”

Grange mother-of-two Emma Wheatcroft also said she was disappointed the same lifeline had not been thrown to Berners. Mrs Wheatcroft, who helped collect thousands of signatures in support of the building, said: “We are all really pleased for Troutbeck Bridge – it’s a good facility that deserves to be saved. But equally we are disappointed that support was not given to Berners in the same way.”

Members of SLDC’s cabinet committee agreed the cash should be paid over three years to Lakeland Initiative for Fitness and Excellence Ltd – the new company hoping to transform Troutbeck Bridge Swimming Pool into a multi-million pound leisure complex.

The firm hopes the cash injection will help stabilise the troubled 35-year-old facility while plans are put in place to transform it into a world-class sports village.

Members of the council’s cabinet also agreed to write off a £60,000 loan paid to the previous pool operator before it went into administration in April.

Speaking at the cabinet meeting, Councillor Peter Thornton explained Troutbeck Bridge pool’s situation was different to that of Berners because a viable solution had been presented to the authority.

Cllr Thornton said: “A solution is being put forward here for Troutbeck Bridge pool that we can support. The pool is also in an important position in South Lakeland where we don’t have any similar facilities.

“Berners trust members closed the pool yet stayed in control of it for some months. This locked progress. Added to this are problems with the building itself.”

Ambitious plans put forward by LIFE, led by experienced leisure operator Sean Thornton, could see Troutbeck Bridge Swimming Pool redeveloped into a fitness centre with a six-lane pool, Swedish-style health suite and dance studio.

A link up with neighbouring sports college, The Lakes School, would add outdoor sports pitches and games courts.

Cllr Thornton conceded the pool had been in a worse condition than he had anticipated when the new company took it over. But he said repair work and complete redecoration had already taken place, increasing user numbers and securing a new programme of swimming lessons for 2008.

Cllr Thornton said: “The pool was in a poor state of disrepair but we worked incredibly hard, invested our own money in immediate improvements and honoured all existing swimming courses to reopen the doors on July 1.

“This investment means we can stabilise the pool while we put together detailed plans to take the development forward for the benefit of people across the area as well as visitors.”

Windermere Councillor Hilary Stephenson said: “I cannot emphasise strongly enough how much this means to the residents of the area and the users of Troutbeck Bridge pool. Everyone is extremely heartened to hear there is investment going into this important facility.”

Robin goes bobbin’ down the Thames for repairs

2008-07-01T05:57:00.000-07:00

By Tom Porter

THE oldest surviving steamship in the world has weighed anchor from its berth at Canary Wharf and headed down the Thames for urgent repairs.

The SS Robin is feeling its age at 120. So it slipped its Docklands mooring after 18 years to have a £1 million overhaul over the next six months in dry dock in Suffolk.

The repairs come after a campaign by volunteers and supporters to raise the funds to ensure the vessel's survival.

Crossrail stepped in with a £1.9m loan to help them out while they raise the cash because the vessel is being 'displaced' by a new Isle of Dogs station being built at West India Quay.

"We were rapidly running out of time to carry out the repairs when Crossrail stepped in," explained the SS Robin's director David Kampfner.

"Moving a vessel nearly 120 years old is risky at the best times, without taking on the uncertainties of the Thames Estuary and coastal waters of the North Sea.

"But we were confident she would come through with flying colours."

There is much hard fundraising to do. The Crossrail loan has to be paid back.

But David is passionate in his conviction that the Robin should be saved.

"We should celebrate these hard-grafting boats," he adds.

"This is a proper East End ship that helped build Britain in to a great industrial power."

The steamer was built in 1890 by Thames Ironworks at a time when the London docks were at the centre of world trade.

Steamships like the Robin were at the forefront of naval technology, transporting raw materials like steel and granite around the coast to fuel Britain's industrial might.

She was sold to Spanish owners in 1900 and saw service in the First World War with the French, with a naval escort to protect her from German U-boats.

The vessel was about to be broken up in 1974 when it was rescued from the scrapyard and restored to her London home by the Maritime Foundation.

The Robin has been named by the National Register of Historic Vessels as one of country's 60 ships of pre-eminent national importance alongside the Cutty Sark and HMS Belfast.

Longer subdivision construction time frames force shift in expenses

2008-06-26T04:55:00.000-07:00

by Carol Marshall | Oakland Business Review
Thursday June 26, 2008, 7:10 AM

Residential construction slowdowns that extend subdivision build-outs are forcing developers to absorb expenses typically turned over to homeowner associations.
In some cases, experts said, developer bankruptcy or foreclosure is shifting the burden to the new homeowners or residential builders for maintenance costs - such as landscaping and care for common areas - typically borne by developers.

"We're starting to see these problems now, and we're looking at the tip of the iceberg," said Michelle Harrell, attorney with Maddin, Hauser, Wartell, Roth & Heller PC. "We're on the edge of the cliff."

In the best cases, solvent and surviving developers foster relationships with the fledgling associations or new homeowners until they get to the tipping point where the association can manage the communities, even when the building timeline has stretched beyond what they anticipated.

That's the approach Larry Cohen, president of Cohen Homes, has taken with homeowners at his Commerce Township condominium development, Heron Hills. Of the 150 total units, 80 have been completed in the last four years, about twice as long as he typically plans to be responsible for the associations' functions.

"When we start a community, we have to seed - finance or underwrite - the money needed to operate the homeowners or condo association. Typically we seed enough for it to operate for the first two years," Cohen said. Though the seed money is technically a loan, it's his policy to forgive the loan at the end of the two-year period, or when the association is turned over.

But it's a challenge for an association like that at Heron Hills, which now has two resident members of the developer-run association, along with a volunteer advisory committee, to live within a budget.

Sometimes there simply isn't the critical mass of dues-paying members needed, and the association experiences a shortfall, said Darshan Grewal, president of Singh Homes LLC.

"When that happens, the developer will just pay the shortfall or some portion of it to help," Grewal said. And when it's practical, Singh Homes hires a property manager to look after the property during construction, he added.

Even when the transition isn't going perfectly, it helps that Cohen forgives the seed money, he said. He also encourages homeowners to form right from the beginning a volunteer advisory board to work with the company-run association. That prepares the homeowners to ultimately take over the association functions, and also encourages dialogue during the construction process.

"We like it to be a good hearted, pleasant turnover," Cohen said. "We work very hard to keep it non-adversarial, and it always helps that we will forgive this advance."

But not every development goes so smoothly. In the worst cases, financially strapped builders and developers neglect the maintenance and development of common areas and stormwater detention ponds, leaving the homeowners to pay for those services out of pocket with little to no chance of being reimbursed.

"The time to turn over the association to the homeowners is triggered by the number of lots sold. So what you're seeing now is all these developments with five or six prime corner lots built, then empty lots with tall weeds in between," Harrell said. "The homeowners don't want that, but the developers and the builders are overwhelmed with taking on maintenance of those lots for a lot longer than they thought they would have to."

When the developer is cash-strapped what often happens is he will put pressure on the builders to maintain the lots, Harrell said.

"That's not good because then the builder winds up going belly-up faster due to the pressure," she said. The situation creates a domino effect, she added.

"A lot of the problems come from the builders not being able to take down lots on the schedule they agreed to because they don't have the money. So then the developer puts even more responsibility on them, and they still can't buy the lots. So they often walk away from the whole thing," Harrell said.

The other alternative is equally painful, as some developers put the burden on the homeowners, and raise their assessments to cover the costs of maintaining the empty lots, landscaping and snow removal.

When that happens, the homeowners often believe they'll be able to recover those costs, particularly if the development is going through the foreclosure process.

It's during the six-month recovery period of a foreclosure when there is the most potential for chaos. Developers don't want to make the investment, and builders have either abandoned the project or have gone bankrupt themselves, leaving no one to pay for the maintenance but the homeowners.

"Most of my clients (developers) are willing to work with the builders, to a point. But if the builder's not performing, they're stuck with a patchwork of homes and a concept for a community that's not going to happen," Harrell said. "It's really a nightmare. It's really terrible to penalize the people who live there just because your development didn't work out."

Homeowners can't collect on those expenses if the development goes into foreclosure because any liens after the first mortgage aren't collectible, she said.

Often the wisest course of action may be for the homeowners to call the local government code enforcement authority, said Greg Gamalski, partner with Giamarco, Mullins & Horton PC in Troy.

"The association will always be second in line behind any mortgagee if the property goes through foreclosure," he said. "But if a municipality steps in to cut the weeds, they'll come in and charge everything back to the property owner. That will be put on the tax roles, and property taxes are ahead of everything else in terms of a lien on the land."

Often homeowners are just taking on the responsibility themselves, rather than call upon municipalities.

"Honestly, in these cases, the developers and the builders aren't even thinking about things like landscaping and detention ponds. I don't even know, in some cases, if anyone's collecting association dues. Of all the things developers have to worry about, this is the smallest of them," Gamalski said.

It'll probably be a year or better before the first wave of foreclosed subdivisions settles up with associations, he added.

"We're still early in the game unfortunately," Gamalski said. "When the dust settles, everyone is going to step back and say we need to talk to the homeowners associations.

"That problem will have to be faced next year. It's only now that people are starting to see the actual depth of the problem."

Sekerbank gets $100 million loan from Commerzbank, Emirates NBD, RZB and Wachovia

2008-06-22T05:56:00.000-07:00

By: Staff Writer

Emirates NBD and Wachovia have been appointed as the coordinating banks for the facility. The facility was launched into general syndication on 20 June with banks from across the globe invited to participate in the Facility. The margin of the loan is 80 basis points, has a tenor of 364 days and the loan will be used for pre-export and trade finance purposes.

Sekerbank T.A.S. was established in 1953 as the Sugar Beet Cooperative Bank in Eskisehir, Turkey. The bank commenced its activities by pooling the modest savings of the sugar beet producers who belonged to the cooperatives to support the financial needs of the sugar beet producers and the sugar industry. In 1956, the bank relocated its headquarters to Ankara and changed its name to Sekerbank T.A.S. In 2004, the bank again relocated its headquarters to Istanbul. Sekerbank became a full service bank in early 1970s.

The bank started partnership discussions with foreign investors during 2005 and 2006. In June 2006, Sekerbank Pension Fund signed a partnership agreement with Bank Turan Alem Group of Kazakhstan to sell 33.98 per cent of its shares to the latter and successfully concluded the partnership process in March 2007. The current shareholding structure of the bank is as follows: 32.04 per cent publicly traded on the Istanbul Stock Exchange, 33.98 per cent of BTA Group and 33.98 per cent Sekerbank Pension Fund of the employees.

The group’s extensive banking network consists of 250 branches across Turkey. The bank’s total assets and equity exceeded $5.4 billion and approximately $692.3 million respectively as at 31 March.

On 19 December, Fitch Ratings raised its long-term IDR foreign currency on Sekerbank to B from B- and affirmed the short-term counterparty credit rating at B, with a stable outlook.

Is your ipod breaking the law?

2008-06-13T04:50:00.001-07:00

Ottawa plans to target music, film piracy with fines of up to $20,000
Kelly Sinoski, Vancouver Sun, Sarah Schmidt, Canwest News Service, Vancouver Sun; Canwest News Service
Published: Friday, June 13, 2008
Canadian consumers who try to circumvent digital locks to copy protected CDs and DVDs -- even if they own them -- face fines of up to $20,000 under proposed federal copyright legislation.

The federal government tabled the legislation in the House of Commons on Thursday, billing it as a "Made in Canada" solution to stamp out online piracy.

But while Industry Minister Jim Prentice called the bill "truly a win-win" for consumers, critics argued Canada had caved to American pressure by adopting an approach that would strike the average Canadian the hardest and hurt the education sector.

"This is being touted in part to deal with the Internet and peer-to-peer [data transfer]," said Michael Geist, a law professor specializing in digital copyright at the University of Ottawa, "but it will have a dramatic impact on what Canadians do day to day."

Under the proposed legislation, consumers will be allowed to make a backup copy of a legally purchased CD or DVD, or transfer it to an MP3 player or other device for personal use, when companies do not put a digital lock on their material.

And while the bill proposes to make expressly legal the "time-shifting" of television programs through widely used personal video recorders, there is a catch.

The shows cannot be kept indefinitely to build a library of recordings, and if broadcasters block the ability to digitally record certain shows through broadcast flags, consumers will not be allowed to get around that lock legally. The legislation also proposes a ban against tools to circumvent digital locks.

"The effect of the digital lock provisions is to render these rights virtually meaningless in the digital environment because anything that is locked down cannot be copied," Geist said.

Gary Sandhu, who downloads movies each week from websites such as Bit Torrent and LimeWire, questioned how such a move was going to be enforced.

He noted that as soon as one website goes down, another four spring up, giving people a continuous stream of downloadable songs and movies.

The technology is so advanced, he said, that users will find other ways to get free products.

"Anyone who goes to university, they download everything. We just do it because we don't want to buy it," Sandhu said. "It's a little bit of a losing battle here they're fighting."

According to the latest survey from Statistics Canada, one in five Canadians aged 16 and older said he or she had downloaded or watched TV or movies over the Internet, an increase from 12 per cent in 2005.

The percentage of Canadians who downloaded music -- either paid or for free -- increased from 37 per cent to 45 per cent in the two-year span.

Part of that increase can be attributed to a change in methodology, as Statistics Canada for the first time included 16- and 17-year-olds in the study, a demographic more likely to download media than older groups.

Blair Traxler, 24, said he believes artists should be paid for the work they create, but still would rather get the product for free.

"I watch movies almost every day," he said. "They come out on Friday and I watch them on Sunday. Sometimes if I like the thing I download I'll buy it."

Mira Sundara Rajan, the Canada Research Chair in Intellectual Property Law and an associate law professor at the University of B.C., said the policy was developed in consultation with content creators and users.

She added the legislation doesn't tell people what's legal and what's not, but will increase compliance with copyright law because "people will be scared."

"It's going to send a signal to people that what they're doing is definitely illegal," she said.

"They're going to be afraid to be targeted and it's going to stifle some use on the Internet. They're not going to know if they're being watched or not."

Penalties for downloading copyrighted songs or other digitized material will be capped at $500. But when teenagers legally purchase songs online, then e-mail them to a friend or share them through a peer-to-peer service, the maximum penalty of $20,000 per copyrighted song will be in force.

The person who purchases the songs or movies and shares them will be the one penalized. This could have ramifications not only for the average Canadian but for teachers and students, who face fines for using a segment of a movie or a book for classroom lessons, Geist said.

"It represents a really significant setback for education," he said. "It directly affects millions of Canadians."

Prentice defended the approach, saying it strikes the right balance in changing times.

"Think about it in these terms: 10 years ago, the first portable MP3 player hit the market. The 1998 version bragged about storing up to one hour of music. Today's players can hold thousands of songs, videos and photographs," said Prentice, pointing out Canada's copyright law was last amended in 1997.

Duncan McKie, president of the Canadian Independent Record Production Association, was quick to praise the government for starting "on the right road. I think they've addressed the right issues. I think they've been sensitive to everyone's concerns."

McKie said the music industry isn't keen to take regular consumers to court to collect damages. The industry is more "concerned with the most egregious violators, people who try to make a business out of the trade of illicit and infringing materials. I'm not really concerned about people in their basements sharing a few files here and there."

The Canadian Record Industry Association, the Canadian Music Publishers Association and the Alliance of Canadian Cinema, Television and Radio Artists also applauded the draft legislation.

But the Canadian Music Creators Coalition slammed the bill, characterizing it as "an American-style approach to copyright. It's all locks and lawsuits," according to Safwan Javed, coalition member and drummer for the band Wide Mouth Mason.

"Rather than building a made-in-Canada proposal to help musicians get paid, the government has chosen to import American-style legislation that says the solution to the music industry's problems is suing our fans," said Javed.

The coalition of nearly 200 Canadian acts includes household names Avril Lavigne, Sarah McLachlan, Broken Social Scene, Matthew Good, Billy Talent, Sloan, Chantal Kreviazuk, Sum 41 and Sam Roberts.

Prentice was set to table the legislation last December, but pulled it amid concerns the Canadian legislation too closely resembled the U.S. Digital Millennium Copyright Act, recognized as the toughest legislation worldwide. Like the Canadian proposal, the U.S. law takes a hard line circumventing digital locks, even for legally purchased content for personal use.

If passed into law, Internet service providers in Canada will get a reprieve, an area where Canada deviates from provisions under U.S. law.

The American legislation requires ISPs to block access to allegedly infringing material or remove it from their systems when they receive a notification claiming infringement from a copyright holder or their agent. The proposed legislation will require ISPs to forward the notice of infringement to the subscriber, a so-called "notice and notice" system already widely used voluntarily in Canada.

But Geist says an absence of a U.S.-style "notice and takedown" system under Canadian copyright law could be meaningless if Canada signs on to the proposed Anti-Counterfeiting Trade Agreement (ACTA). Prentice confirmed Thursday that the government is working to reach such a deal with international trading partners.

An ACTA discussion paper, recently leaked on the Internet, could require ISPs to filter out pirated material, hand over the identities of customers accused of copyright infringement, and restrict the use of online privacy tools.

The fate of the Canadian legislation was already in doubt on the same day it was tabled, as opposition politicians lined up to question key aspects. The government will require support from some opposition MPs for the bill to become law. It could also die on the order paper if an election is held before it's fully debated.

Liberal heritage critic Denis Coderre suggested the maximum penalty of $500 for downloading copyrighted songs may not protect creators. Besides, he said, enforceability is a real problem. "Are we going to have cyber police now?"

Charlie Angus, digital affairs critic for the NDP, said the digital lock provisions around personal use pose a real problem. "The fact is this bill was not created with any serious consultation with any of the stakeholders, except, as far as we could tell, the American lobby interests."

The proposed legislation creates specific education and research provisions, which will allow teachers and students to use material they find online as long as it's used for educational or training purposes. They'll also be able to use copyright material in lessons conducted over the Internet.

Librarians will be allowed to digitize print material and send a copy electronically to a client through an interlibrary loan. The client, in turn, can make a copy.

"This is a huge benefit for educational institutions, and certainly the publishers and authors will be disappointed by the breadth of it," said Mark Hayes, a partner in the intellectual property group at the law firm of Blake, Cassels & Graydon.

ksinoski@png.canwest.com

Business Briefs

2008-06-03T05:37:00.000-07:00

Wachovia board ousts CEO
CHARLOTTE, N.C. » Wachovia Corp. Chief Executive Ken Thompson, pictured, was pushed out yesterday as head of the nation's fourth-largest bank, becoming the latest financial services executive to be ousted amid turmoil in the U.S. housing market.
Thompson joins Stanley O'Neal at Merrill Lynch & Co. and Charles Prince at Citigroup Inc., who both presided over huge losses from exposure to bad mortgages, and were subsequently forced out from their perches at the top of Wall Street institutions.

Also yesterday, Seattle-based Washington Mutual Inc. stripped Kerry Killinger of his chairman title, though he remains the chief executive at the nation's largest savings and loan.

Thompson's dismissal comes after several withering months of criticism from shareholders.

Charlotte-based Wachovia said last month that it lost $707 million in the first quarter, nearly doubling the losses it reported earlier after further review of its portfolio. When the bank announced it would cut dividends, it was Thompson, who had promised earlier that that would not happen, that became the target of shareholder angst.

Thompson will not receive any incentive pay for the 2008 fiscal year, but according to a filing with the Securities and Exchange Commission, he will get a severance of $1.45 million and accelerated vesting of $7.25 million in restricted stock.

FedEx to drop Kinko's name
MEMPHIS, Tenn. » FedEx Corp. said yesterday it plans to stop using the Kinko's name on its copy and office service stores and book an $891 million charge for the quarter that ended Saturday.
The charge relates to the value of the Kinko's name and a write-down of the value of its acquisition of the brand. The charge, which works out to $2.22 a share, was not part of FedEx's earnings forecast.

The company early last month cut its outlook to $1.45 to $1.50 per share, down from $1.60 to $1.80, because of increasing fuel costs. FedEx reports its financial results for the fiscal fourth quarter June 18.

The company said it will change the name of its FedEx Kinko's stores to FedEx Office over the next several years.

Some travelers need to register
WASHINGTON » Travelers who don't need visas to enter the United States will be required to register online with the U.S. government at least three days before they visit due to a security regulation set to begin next year.
Homeland Security Secretary Michael Chertoff will announce the rule today, according to a government official who asked not to be identified because the announcement had not yet been made.

Required online registration will begin in January and will be valid for a two-year period.

Those needing to register will be travelers from the 27 countries whose citizens are not required to obtain visas for U.S. entry. The counties include those in most of western Europe as well as Andorra, Australia, Brunei, Japan, New Zealand and Singapore. Eight other countries -- the Czech Republic, Hungary and South Korea among them -- are expected to be admitted to the visa waiver program.

Boylan Heights house stirs fight

2008-05-20T00:08:00.000-07:00

Josh Shaffer, Staff Writer
RALEIGH - A 72-year-old man in chronic trouble for housing code violations thinks he is being unfairly targeted by city inspectors and says that graffiti spray-painted outside his house are a racist message encouraging his family to leave.
R.J. Royster bought his house on Boylan Avenue west of downtown in 1970 -- an era when many of the buildings were condemned and you couldn't get a pizza delivered.

But now Boylan Heights boasts historic district status and houses routinely worth more than $300,000 -- and neighbors bristle at junk in the yard, shaky electricity and a drug call at Royster's house this year. He appears before the City Council today to address Raleigh's $297 charge for carting away debris, and a local NAACP official plans to air the elderly man's side.

A part-time bus driver, Royster has long drawn Raleigh inspectors citing him for junk in the yard, bad electricity, broken floors and cracked ceilings.

Police came to 715 S. Boylan Ave. to investigate a purported drug sale in January, a Raleigh police incident report indicates. Royster said that police accused his son of selling drugs to an undercover officer and that the son is now in jail. But it never happened in the house, said Royster, who insists he doesn't even allow cigarettes.

"The neighborhood kind of outgrew him," Councilman James West said. "He's got the historic district requirements, and he's of meager means. It was a different neighborhood in the '70s."

This afternoon, Royster will have help from J. Ronald White, president of the South Central Wake County Branch of the NAACP.

There is strong feeling among Raleigh's black activists that Raleigh would leave Royster alone if he lived somewhere else. Only a handful of black families still live on Boylan Avenue.

White said City Councilman Thomas Crowder told him he had warned Boylan Avenue residents to watch Royster's house and call 911 if they saw anything suspicious. Efforts to reach Crowder, who represents Boylan Heights, in his office and on his cell phone Monday were unsuccessful.

"Crowder says he's going to get them evicted and the house torn down," White said. "This family is being targeted."

Meanwhile, spray-painted images have appeared on two street signs outside Royster's house.

They show a man who appears to be in pain, with what Royster and White say looks like a rope extending from his head. It is painted several times with what appears to be a stencil, but it's an obscure image that could be interpreted many ways.

"It looks like a hate sign," Royster said. "First time I've ever seen anything like that."

West said he thinks Royster has made mistakes, but he hopes a solution can be struck. Otherwise, he said, low-income families all around Raleigh could be threatened by gentrification.

Royster paid $15,500 for his house in 1970. Today, Wake County assesses it at $301,785.

Royster has filed for bankruptcy twice. The city loaned him $18,000 to make repairs in 2006, making an exception in a program that normally tops out at $5,000.

Work finished in September of that year, and city inspectors signed off on it, giving Royster a certificate of occupancy.

In January 2008, inspectors returned with a long list of new violations: plumbing, cracks, combustible material, junk in the yard.

Records show many of them have been repaired, and Royster says his house is fine. He says, though, that he hired an unscrupulous contractor who failed to finish the original $18,000 work.

He has applied for another loan, but Raleigh has turned Royster down because he has numerous liens on the property.

Royster crosses his fingers. He doesn't want to leave. Anywhere else, he'd never live to see the end of house payments.

Buyers' market enables first-time buyers to drive a hard bargain

2008-05-08T06:41:00.000-07:00

First-time buyers are forcing down property prices, it has been claimed.

It seems that the group is becoming increasing influential as the credit crunch impacts on existing homeowners to make it a buyers' market.

As a result, first-time buyers have been able to drive down asking prices. Research conducted by moneyextra.com suggests the average property value now being considered by first-time buyers has fallen to £170,559, down 5.75 per cent on March levels.

"While it may be getting tougher to get a mortgage now, it would appear that those first-time buyers who are in a position to buy are driving much harder bargains with sellers," commented Robin Amlot, senior editor of Moneyextra.com.

"Housing is very definitely a buyers' market now rather than the sellers' market that existing homeowners had become used to."

However, first-time buyers are also taking on more debt than in the past in order to fulfil their property dream, the survey shows.

The average loan-to-value ratio is currently at its highest ever level - 82.89 per cent.

Silverjet completes successful fundraising

2008-05-05T03:45:00.000-07:00

Silverjet plc, the British exclusively business class airline, announces that on 2 May 2008 it entered into both a Subscription Agreement and a Loan Facility Agreement with Viceroy Holdings LLC which is affiliated with Viceroy Fund, an international luxury development fund based in the USA and UAE, details of which are set out below.

Lawrence Hunt, Chief Executive of Silverjet said:

'I am delighted to confirm that following the announcement on 30 April concerning the Memorandum of Understanding, Silverjet has now entered into a binding conditional agreement and secured the commitment of a high quality, long-term strategic investor'.

Viceroy is committed to the development and expansion of Silverjet, and proposes to inject further capital to develop the Silverjet proposition.

'This investment means that Silverjet is now well placed, both financially and strategically, to exploit the opportunities which exist in the airline and all business class market - a market which we now dominate'.

Used stuff sells in tough times

2008-05-03T05:07:00.000-07:00

Sue Stock, Staff Writer
A downturn in the economy is bad for consumers, but it has helped merchants who sell used stuff.
Proprietors of consignment, thrift and resale shops enjoy big sales as consumers tighten their spending and search for sources of extra income.

"We really do well when times are bad, because people try to trim corners," said Suzanne Wells, who owns CD Warehouse in Fuquay-Varina with her husband, Stuart.

"A lot of people don't even want to sell what they're selling," she said, "but they need gas and they need groceries."

The 18-month-old CD Warehouse store, which buys and sells used CDs and DVDs, started offering store credit instead of cash.

"We'd go out of business," Wells said. "A lot of people are coming in with these huge bags."

Like CD Warehouse, many businesses that sell used goods are seeing a double increase, said the National Association of Resale and Thrift Shops' executive director, Adele Meyer.

That demand comes from customers looking to unload unwanted items for cash and those shopping for cheaper used goods.

At ARound Again Consignments in Raleigh, customers wanting to sell things need an appointment. The store is booked into June, owner Rick King said.

"It says to me that people are looking for money," he said. "Typically, we see this kind of thing in September and October as we approach the year-end."

Still, King was hesitant to celebrate the uptick in business. His shop has been open for 17 years, and during some previous economic slowdowns, there was a slowdown in sales.

In 2001, "it slowed down some even in the resale industry because people were gun-shy," he said. "I expect that while we're doing well now, we may see some of that."

Already, some shops have seen a downturn.

Sandra Horton closed her Cary consignment shop, Genevieve's Closet, about a month ago. In the year or so that the store was open, sales were never enough for Horton to cover costs, and in the end, she was paying half of the $1,600 monthly rent out of her own pocket.

"We were having $25 days, $15 days," she said. "I just could not afford the rent."

Hang tough to thrive

Store owners might be tempted to cut back on spending during times of economic crisis, but that's exactly what they shouldn't do, said Meyer of the Resale and Thrift Shops Association.

"A recession is an opportunity for this industry," she said. "But like anything else in business, it depends on how people approach it.

"We can help consumers during bad economic times, but you have to let them know."

Getting the word out has been the toughest challenge for mother and daughter Lina and Marcia Lee, who opened a home-furnishings consignment store, Home Again in Raleigh, about a year and a half ago.

Business was slightly up in April, Lina Lee said. She didn't know whether to attribute that to the economy, the nice spring weather or the fact that word is getting out about their store.

"My thinking is that people get up in the mornings and say, 'Today I have to go buy groceries,' " she said. "They don't get up in the morning and say, 'Today I have to go buy three or four antiques.' These are not things that people have to have."

Recession opportunity

If the economy continues to slump, consumers could make a definitive shift toward stores such as Home Again and used items, Meyer said.

"I remember the recession of the early '80s," she said. "I had just purchased a building to move my store into so that I didn't have to pay rent anymore. I purchased the building, and then I applied for a loan to redo the building. Within six weeks, I didn't need the loan. I had the money to redo the building on my own."

That kind of boom is hitting at least some area consignment and thrift shops already.

Maria Lowe was shopping Friday at Raleigh's ReTails Thrift Shop, which sells donated items to benefit $20 Fix, a program that helps people get their pets spayed and neutered.

Lowe said she has been shopping at consignment and thrift stores for a decade, because she likes the low prices and she feels reusing items is helpful to the environment. But she said she has noticed a change lately.

"There's a Goodwill [store] off of Six Forks Road," she said. "There's BMWs and Mercedes outside now. It's affecting this whole economy and trickling down."

More shoppers also have flocked to My Girlfriend's Closet in Apex, where sales have doubled this year. Owner Lois Cozart expanded her consignment shop for women's clothing in September.

Shop through the drop

But Cozart offered a less scientific reason for her success.

"I think women are really going to shop no matter what," she said. "They will find a way to buy something new, because it's an emotional thing. It has nothing to do with the economy."

Still, Cozart is hedging her bets, offering parties in which she teaches women how to dress properly for their body types and goodies such as in-store refreshments. "You should give people as much incentive as you can," she said. "Sometimes it could be the weather, you know?"

Inventive program coming to Main Library

2008-05-01T05:39:00.000-07:00

DOWNTOWN AKRON — Invent-a-Palooza is coming to the City of Invention.

The daylong event, set for May 17 at the Akron-Summit County Main Branch Library, will be the place for inventors and would-be inventors to find out more about the nuts and bolts of taking a concept from idea to market.

Librarian Francie Labriola said she has been planning the event for about eight months.

“In the past, we’ve had people come to the library from the U.S. Patent and Trademark Office ... but this is the first year we’ve made this a family event,” Labriola said.

Invent-a-Palooza will feature educational presentations and networking opportunities with government officials, local business organizations and area inventors’ groups. There also will be activities for children and teenagers.

Labriola is one of two librarians in Akron who work with local inventors. In 1995, the Akron-Summit County Public Library was designated a Patent and Trademark Depository Library by the U.S. Patent and Trademark Office. There are about 80 such libraries in the country.

“As part of our mission, we are to disseminate patent and trademark information and support the intellectual property needs of the public,” she said.

The library holds classes twice a month on topics like patent searching, but Labriola hopes this daylong event will let inventors know about the local resources available to them.

As part of the event, Christine Ingemi will appear as keynote speaker from 10:15 to 11:30 a.m. Ingemi, a New Hampshire resident, was a finalist in the 2007 Modern Marvels Invent Now Challenge for her invention of the IHearSafe™ earbuds. The invention, which she sells on her Web site, is meant to keep children from damaging their hearing from too-loud earbuds.

Labriola said Ingemi agreed to appear at the Akron event as soon as she was asked.

“This has all happened pretty fast for her,” Labriola said. “She’s getting a patent and selling (her product). It’s great.”

Ingemi will likely share her story and give advice to attendees who have ideas.

Invent-a-Palooza events will be held from 10 a.m. to 5 p.m. Exhibit tables featuring local organizations will be staffed throughout the day. Also, the National Inventors Hall of Fame will loan “patent models” to the library for the event. The scale models, crafted out of wood, are what was required of inventors in the 1800s.

“We will have one that’s a canal boat,” Labriola said. “Some of them are widgets. They tried to send the more interesting ones.”

Scheduled activities at Invent-a-Palooza include:

Welcome by Summit County Executive Russ Pry at 10 a.m.;
Keynote speaker Ingemi from 10:15 to 11:30 a.m.;
Invention-themed story hour from 11 a.m. to noon in the Children’s Library;
Presentation on “How to Conduct a Patent Search” by Tom Turner, of the U.S. Patent and Trademark Office;
Hands-on interactive program on inventions and inventors in the Children’s Library from 2 to 3 p.m.;
Competition to build the tallest free-standing sculpture out of drinking straws to win a prize in the Teen Area from 2 to 3:30 p.m.; and
Panel discussion on local resources for inventors and entrepreneurs with Heather Barnes, a registered patent attorney with Brouse McDowell; Howard Tolley, public relations and communications counselor with Akron SCORE; and Richard Rebadow Jr., vice president of economic development for the Greater Akron Chamber of Commerce.
The Main Library is located at 60 S. High St. For details, call (330) 643-9075 or go to www.akronlibrary.org.

Why the U.S. Credit Crunch Will Not Affect India

2008-04-27T05:00:00.000-07:00

I’ve received numerous questions from colleagues and associates asking for my opinion on the U.S. credit crunch and its potential impact on the India economy and specifically the India real estate market. While complicated the short answer is no*, the impact should be minimal. You may have noticed that I added an asterisk and I’ll explain further below. First, we’ll quickly explore how the U.S. and Europe have been impacted, then discuss why Asia has minimal exposure, and finally I’ll explain the potential risks regarding my analysis.

The U.S. is undergoing a massive credit crunch due to the losses by large U.S. and European investment banks in the collateralized debt obligation markets (CDOs). The credit crunch is a result of banks and other financial institutions’ reluctance to buy CDO’s which in turn reduces the credit and loans extended by traditional mortgage lenders. At the same time, the exposure of banks to such non-performing obligations has reduced the willingness of other banks to lend to them and for banks to lend to developers. That in turn has caused property prices to go down (if you can’t get a loan then housing supply increases causing prices to go down) which gives consumers less money to spend which is causing a slow down in the economy. How’s that for a quick snapshot?

Since Indian banks have had almost no exposure to the U.S. CDO markets the loss potential from the U.S. credit crunch is minimal prima facie. However, some argue that the slowdown in the U.S. economy will reduce the amount of capital inflows to India thus hurting the India economy. This theory has largely been debunked by the European Central Bank report, "The transmission of U.S. cyclical developments to the rest of the world", which concluded that a one percent drop in U.S. domestic growth translated to a 0.1-0.5 percent drop in Asian GDP rates. Thus even a 2% drop in U.S. domestic growth will only slightly affect the projected 8% India growth rate.

The dollar rupee exchange rate is a concern as the rupee continues to appreciate versus the dollar however the effect is not pronounced enough to yet change the U.S. and European corporation from moving more jobs to India. In fact, at A.T. Kearney, I witnessed first hand how a slow down in the U.S. economy in 2001 forced the Fortune 1000 to examine cost reduction strategies with business process outsourcing [BPO] at the top of list. A.T. Kearney published a paper and survey with India as the leading country for BPO and the F1000 rush to India was on and has not let up. Thus I believe the further the U.S. slides into a recession the more business India will receive due to the cost savings. According to Mint (Wall Street Journal India), there is evidence of this phenomenon occurring today.

In a recent study conducted by the US India Business Council [USIBC] and Ernst and Young entitled 2008 USIBC Business Perception Survey, their overwhelming assessment of India is, and will continue to be, a premier destination for investment. Ernst and Young polled senior member-company executives to gauge their perception of India as a destination for investment and to identify progressive steps which will further enhance investor interest and confidence in India. Thus, the survey concludes, India will be an island of robust investment activity despite the global slow down.

India’s real estate sector is expected to reach $90 billion by the year 2015 from $14.8 billion in 2007. The increased real estate costs and a shortage of qualified IT talent in Tier I and II cities are forcing IT/ITES companies to locate offices in Tier III cities like Mysore, Jaipur, Chandigarh, and Nagpur.

India’s phenomenal growth in the real estate sector has lead to a bubble of speculative activity which has given early investors inflated returns. Those high profits have generated intense global interest with nearly all of the large foreign investment banks announcing new real estate funds or investments in current real estate funds. These funds along with local India investors have pushed real estate valuations to new heights. For example, when we first started in 2004, we passed on land being offered to us close to the new Bangalore airport. Now that same land has gone up by a factor of 10. However, it now appears supply is outpacing demand and the air in the bubble is starting to let out.

Some point to the slow down in the India real estate market as proof the U.S. credit crunch is currently affecting India. It is simply coincidence that the two are happening simultaneously. Moreover, the India real estate slow down is not uniform. There are areas in India where the commercial real estate market continues to appreciate (e.g. Gurgaon, Salt Lake V, Kolkata, and Bangalore CBD) because of high demand. The main reason for the current slow down in India is due to over-supply caused by developers building too fast to fill a limited supply situation. The current real estate slow down in India is simply a cyclical correction and should continue its upward cycle by early 2009.

Foreign investors, wealthy Indians and NRIs (see Table I) are still acquiring property around the country at an astonishing pace, making the real estate market among the most lucrative in the world yielding average returns of 25% annually, and according to some as high as 50%-60%. India’s real estate liberalization in the form of relaxed lending provisions (Bank loans for commercial real estate have grown 500% to $2.4 billion during the past four years) has also helped fuel the real estate market. Finally, we have seen building construction laws (such as the height of buildings and increased floor area ratios [FAR]) have been increased as well, instantly creating a more valuable project.

* Estimated – Table Source AssoCham

The all important asterisk and caveats to my analysis each in isolation should not greatly impact the India growth story. However, if some or all occur, then India may fall victim to a new set of concerns. For instance, increasing oil prices could lead to a slow down in the India economy due to India’s reliance on foreign oil. India bank losses in Asia that cause India banks to tighten their credit could impact the real estate developer who needs a construction loan. India foreign exchange fluctuations that make it more expensive for U.S. and European countries to outsource to India will have an impact on BPO services provided by India companies. Escalating food costs can quickly increase inflation thus hurting India’s economy. Lastly, a negative global perception could impact India’s real estate growth story despite India’s strong fundamentals.

In summary, India’s growth prospects are strong. There is no direct relationship to the U.S. credit crisis and the current real estate slow down is cyclical and geographically uneven. A subprime crisis in India is near impossible since only 3-5% of all home purchases have been completed with mortgages and within those, there are no sub-prime mortgages. U.S. and European companies will continue to outsource to India (especially in a recession) and India will begin to produce its own intellectual property (I’ll discuss this in part II) which will start an era of self reliance. There are many risks for India to guard against, but in isolation those risks will be mitigated by the India growth story.