tag:blogger.com,1999:blog-79400390282308569452023-10-25T04:37:12.736-07:00Finance For LifeHome Decoratinghttp://www.blogger.com/profile/09134736427386394041noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7940039028230856945.post-62885231313686589382013-07-11T07:43:00.004-07:002013-07-11T07:43:41.758-07:003 Ways Your Life Insurance Company Is Scamming You<div style="text-align: justify;">
Although it makes sense to get in touch with a life insurance company to cover your dependents in the eventuality of your untimely death, there are integrity issues surrounding the insurance companies and agents. Broadly there can be 3 ways your life insurance company is scamming you. We have enlisted them for your benefit.<br /><br /><br />Selling Coverage that you don’t need! <br />The insurance companies thrive on the fact that most people don’t understand their life insurance needs. With standard products, they try to sell you coverage that you might not need, but, which are lucrative for them. The insurance agents expedite the process so that you skip the fine print and sign up for a coverage that is ill-suited to your needs. The trick is to play on your fear factor and sell you heavy insurance, even if you don’t have dependents. <br /><br /><br />Coaxing you to pay ‘Cash’ <br />We strongly suggest, do not pay your premium through cash to an agent. Further, do ensure that you get a receipt for the payment. There are numerous fraudulent entities posing as genuine insurance agencies that extract hard cash from you in lieu of insurance premium. They ask you to sign at blank spaces in a form, assuring you that it is just a formality. Once you have fallen for their trick, you are left without an insurance coverage. The worst part is that most victims only come to know of this scam, when they have met with some mishap and there is not insurance to cover them. <br /><br /><br />Luring you with benefits! <br />Insurance agencies and agents have a way of promising you unbelievable benefits out a life insurance policy. Life insurance agents might offer you plans, with a guarantee that the policy would run premium-free for a specific period. Some agents play it smart and offer you great discounts for signing you up for a new policy, while replacing an old policy. The trick is that the old coverage gets terminated and new coverage does not get initiated due to the cumbersome procedural bottlenecks. Thus, exposing you to risk without cover. 5 <a href="http://healthinsurance-guides.blogspot.com/" target="_blank">Basic Facts About Health Insurance Policies In A Bad Economy</a></div>
Home Decoratinghttp://www.blogger.com/profile/09134736427386394041noreply@blogger.com3tag:blogger.com,1999:blog-7940039028230856945.post-61603218026141674212013-05-08T23:04:00.000-07:002013-05-08T23:05:27.253-07:00<div style="text-align: justify;">
According to a FDIC report, 478 banks have failed since 2007. In 2012 there were 51 USA bank failures (actual count was 50). 45 of those banks had less than $500MM in assets and 50% of them were located in three states, i.e. GA, FL and IL. 42 of the failed banks had 5 branches or less. In just 4 months of 2013, 10 banks have failed. The economy and real estate meltdown continue to take the blame while lending mediocrity solders on.
The other most common and obvious reason attributed to bank failure is severe undercapitalization. True, but that is the last straw! Several months and possibly years before failing, a bank will have gone through lengthy and painful processes dealing with delinquent or bad loans - endless credit meetings, examinations audits, numerous reports, collections, write-offs etc. But what are the underlying causes of capital depletion? Capital depletion is caused by a number of events. Top on the list is poor underwriting and credit administration which lead to bad loans. Bad loans don't pay interest as scheduled.
Consequently, interest income decreases as allowances for loan loss increase. Other reasons are credit concentration; aggressive organic growth; loss on investment securities; undue reliance on volatile liability; out-of-territory lending; risky participation, fraud; liquidity failure and sustained losses among others. Let me examine these reasons briefly and hopefully some of you will make genuine attempts to avoid capital erosion of your bank's capital:
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1. Poor underwriting and credit Administration
Most banks are copy cats. They merely follow what the other banks are doing on the market. For example, they will relax credit to win business from a competitor. Some try to cut cost by recruiting mediocre underwriting staff. Some of them have very controlling senior lenders or chief executives who dominate credit decision making while others are grossly understaffed. The list goes on and on. Fortunately, banks can avoid these pitfalls by outsourcing credit underwriting to professional credit underwriters who provide objective credit underwriting and recommendations.
2. Unwarranted credit concentration
According to the Comptroller of Currency, pools of individual transactions that may perform similarly because of a common characteristic or common sensitivity to economic,financial, or business developments have been the primary cause of credit related distress. Yet many banks either ignore or completely misunderstand this simple logic by confining analysis to portfolio content and downplaying issues relating to one counterparty, borrower, or group of related counterparties or borrowers, same source of repayment, industry or economic sectors, same collateral, geographical area etc.
3. Aggressive growth
Rapid growth strategies lead to high concentrations that end up being funded with nontraditional, riskier funding sources
4. Bad investment securities
While banks tend to engage in proprietary trading in un-hedged derivatives, other banks' debt, large blocks of marketable securities, exotic instruments and illiquid investments, regulators believe this to be a high risk undertaking.
5. Participation purchases
Often lending officers are too lazy to analyze participation purchase to ensure that they conform with prudent lending practices and in particular their institution's own lending policies. As a result they book risky assets that really have no control of.
6. Fraud
Fraud arising from weak controls can lead to huge losses and capital erosion.
7. Liquidity failure
Over-lending and non-performing loans deprive banks the working capital needed for operations.
8. Sustained losses
Consecutive losses over a period of more than two years can be devastating to a bank, particularly if it is marginally capitalized.
9. Insider loans
Inappropriate loans made to directors and insiders for real estate and many other projects that are ill-conceived are likely to result in huge losses and bank failure.
10. Asset/liability mismatch.
When a bank's assets are unmatched to the liabilities supporting them, severe problems can arise. For example, if floating deposits finance a fixed rate loan. If interest rates rise, the bank pays more and more interest on deposits while the fixed rate loan pays the same rate. This mismatch can result in a huge loss. When a large portion of a bank's portfolio is mismatched, the results can be devastating.
11. Unfavorable Economic Environment
Certain environmental conditions, such as economic collapse, busting of real estate bubble etc. can cause losses for banks. However, banks that pursue prudent lending, adhere to credit policy and engage experienced credit underwriters can survive such an unfavorable phase.
12. Rising non-funding expenses
Uncontrolled non-funding expenses can drive cost of doing too high resulting in huge operational losses.
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Home Decoratinghttp://www.blogger.com/profile/09134736427386394041noreply@blogger.comtag:blogger.com,1999:blog-7940039028230856945.post-24619882092135574682013-05-08T10:12:00.001-07:002013-05-08T10:12:26.751-07:00Are You Struggling With the Dilemma of Refinancing?<div style="text-align: justify;">
In today's market, it is certainly not uncommon to hear about homes being foreclosed or short-saled. It is an unfortunate situation but in some cases, homeowners can avoid that nightmare by refinancing their home. It is not an easy process or a quick-fix, but there is definite potential. Many folks just aren't sure if refinancing is the best decision for their family's home.
Refinancing a mortgage, whether equitable or not, is one of the most important things that some of us will have to do at least once in our lives. It is a demanding task that requires a lot of thinking and presence of mind. Full appraisal for the exterior matters and interior matters is very much essential while refinancing a loan. It is essential for determining the value of any kind of property that you own. There are many licensed appraisers who are very good at this job so it's up to you when it comes to selection.
Whenever an appraiser visits a place for evaluation purposes, he or she needs to determine the value of that property as efficiently as possible. Any necessary upgrades or repairs will be taken into consideration. There can be some deficiencies, but in many cases, a negative evaluation from an appraiser can hit you very hard and result in serious consequences.
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A good appraiser is one who compares the property value of recently sold properties. Different properties have their own face value, but when it comes time to sell, the value could have changed significantly depending on the circumstances. No two homes or property areas are the same, so it is necessary for the appraiser to visit and analyze each one separately.
There is a cost value for the appraiser, which depends on the amount you need to pay for rebuilding the home. The value of homes has dropped in recent years, which has resulted in a drastic increase in the market value of the appraisals. As such, it may be difficult to get a proper and accurate refinance. The value that is appraised for the home must always be greater than the amount of the mortgage. This is called the ratio of loan to value, and it plays a very important role in determining the overall transaction amount. The appraisal value should always be 20% over the amount of the loan, or higher.
The property value always has significance in refinancing the loan. Homeowners should always keep a record of any and all upgrades or improvements made to the home. The price at which houses in your own neighborhood sell for also has a huge impact on your sale. Even if you only seek minor improvements in your mortgage system, it will improve your mortgage situation to a great extent.
Article Source: http://EzineArticles.com/7528748</div>
Home Decoratinghttp://www.blogger.com/profile/09134736427386394041noreply@blogger.comtag:blogger.com,1999:blog-7940039028230856945.post-4316388154573091342013-05-08T10:10:00.000-07:002013-05-08T10:10:32.313-07:00How to Compute the Loan-To-Value Ratio of Your Property<div style="text-align: justify;">
The computation of loan-to-value ratios is important to banking and finance organizations. Banks rarely lend money that's equal to the amount needed by borrowers to buy real property or construct a house. Most financial institution prefer to give an amount that's equal to or less than 80% of the property's actual value, which is the agreed selling price between buyer and seller, or the recent market value of the property. Even when the loan is way below the required percentage, lenders prefer to use the lowest value between the property value and the purchase price when calculating home loan ratios.
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Property owners looking to use their home or land to secure a loan should ask for a thorough appraisal before submitting an application. Meanwhile, people looking to buy a new home or vacant land to develop should confirm the final price asked for by the seller before going for a loan application. These amounts will be used in the formula for the loan-to-value ratio, which is commonly abbreviated as LVR or LTV. Usually, a downpayment of 20% is expected from the borrower before the loan can be released. Some banks may require their borrowers to have 5% of the property value in genuine savings.
Let's take for example the situation of James. He wants to buy a house and lot, which have been assessed with a property value of $100,000 after depreciation and taxes, but actually sells only for $80,000 in the market because of its location and the effects of economic recession. James and the seller closed the deal at $80,000 for the house and the land it stands on. In this case, lenders prefer to use the purchase price of the property rather than its appraised value when computing for the LTV ratio.
For a single loan, the computation is very simple. If you were James, then you should multiply $80,000 by 0.80 to get the LVR. This means the borrower is expected to apply for a loan or loans equal to or less than $64,000 in total. Only people with a high credit rating with a spotless credit history can request for a loan higher than the recommended amount. For multiple loans, the LTV ratio is computed using the total of all loans requested. For example, one loan is for $15,000 while another loan is made for $25,000, which totals to a 50% ratio. This is a low-risk proposition that most finance corporations and mortgage companies may approve.
Article Source: http://EzineArticles.com/7560802</div>
Home Decoratinghttp://www.blogger.com/profile/09134736427386394041noreply@blogger.com