Indymac Federal Bank Loan Modification(By Susan V. Gregory)
How to Apply
Are you stuck in a bad loan and trying to get help with an Indymac loan modification? Well, now is the time to get started learning how you can qualify for a new, lower mortgage payment when you apply for a Indymac Federal Bank mortgage modification. The truth is that it has been a long hard battle for millions of homeowners, but here are some valuable tips that will help you successfully reduce your monthly payments.
Indymac Federal Bank has been offering some borrowers very aggressive loan workout plans. But for many homeowners, that help has been elusive. Why are some borrowers approved and others denied? The secret to getting the help you need is simple-you must be able to prove in black and white that you meet the guidelines for acceptance. The first step is learning what those guidelines are-so here are the basics that you need to know:
You must prove that you have suffered a financial hardship due to circumstances beyond your control. This means that explain in a clear and compelling manner the circumstances that got into this situation and the steps you are taking to try to find a solution to stay in your home. Do you know what circumstances are considered an acceptable hardship?
Indymac Federal Bank must be provided with proof of your income and expenses so that they can verify your ability to pay and maintain the new, modified mortgage. The bank does not want to modify your loan only to have you fall behind again. Do you know how to complete your financial statements to convince them that you are a good candidate for a loan workout?
Do you know what documents you will have to provide to the lender in order to submit a complete and accurate loan modification proposal? It's easy when you follow a submission checklist and document stacking order.
An Indymac Federal Bank loan modification can be done successfully by the average homeowner with just a little bit of information and preparation. You do not have to pay thousands of dollars to a company or attorney to get the results you need. All you need to do is to make the commitment to learn, prepare and work hard to obtain the loan modification you need and deserve. Help is available-you just need to know how to get it.
Sunday, October 10, 2010
Banks and Monetary Policy
The Mechanics of Interest Rates Setting(By Luigi Frascati)
We hear a lot about interest rates, and not only in my professional field of expertise. Interest rates are everywhere to be found in our daily lives: credit card interest, interest on deposits, car loan interest, personal loan interest, treasury bond interest. The other day I received a spam e-mail that said: "Need new socks ? Apply for our Family Loan - competitive interest rates". Since I am single and own approximately fifty pairs of socks - they seem to be the preferred Christmas present in my household - I decided not to push the 'Click Here' button. But just what are the mechanics of interest rate setting? Who decides which interest rate to charge to whom - and how?
Paul Volcker, while chairman of the Board of Governors of the Federal Reserve System (1979-87), was often called the second most powerful person in the United States. Volcker triggered the "double-dip" recessions of 1979-80 and 1981-82, vanquishing the double-digit inflation of 1979-80 and bringing the unemployment rate into double digits for the first time since 1940. Volcker then declared victory over inflation and piloted the economy through its long 1980s recovery, bringing unemployment below 5.5 percent, half a point lower than in the 1978-79 boom and helping Ronald Reagan convert the American people to Reaganomics. Volcker was powerful because he was making monetary policy. Central banks are powerful everywhere for the same reason, although few are as independent of their governments as the Fed is of Congress and the White House. Central bank actions are the most important government policies affecting economic activity from quarter to quarter or year to year.
Monetary policies are technically demand-side macroeconomic policies. They work by stimulating or discouraging spending on goods and services. Economy-wide recessions and booms reflect fluctuations in aggregate demand rather than in the economy's productive capacity. Monetary policy tries to damp, perhaps even eliminate, those fluctuations. It is not a supply-side instrument. Central banks have no handle on productivity and real economic growth. A central bank is a "bankers' bank." The customers of the Federal Reserve Bank are not ordinary citizens but "banks" in the inclusive sense of all depository institutions--commercial banks, savings banks, savings and loan associations, and credit unions. They are eligible to hold deposits in and borrow from the Federal Reserve System and are subject to the Fed's reserve requirements and other regulations. The same relationship exists in Canada between the Bank of Canada and the individual banking institutions.
Banks are required to hold reserves at least equal to prescribed percentages of their checkable deposits. Compliance with the requirements is regularly tested, every two weeks for banks accounting for the bulk of deposits. Reserve tests are the fulcrum of monetary policy. Banks need "federal funds" (currency or deposits at Federal Reserve System) to pass the reserve tests, and the Fed controls the supply. When the Fed buys securities from banks or their depositors with base money, banks acquire reserve balances. Likewise the Fed extinguishes reserve balances by selling Treasury securities. These are open-market operations, the primary modus operandi of monetary policy. A bank in need of reserves can borrow reserve balances on deposit in the Fed from other banks. Loans are made for one day at a time in the "federal funds" market. Interest rates on these loans are quoted continuously. Central Bank open-market operations are interventions in this market. Banks can also borrow from the Federal Reserve Bank at the announced discount rate. The setting of the discount rate is another instrument of central bank policy. Nowadays it is secondary to open-market operations, and the Fed generally keeps the discount rate close to the federal funds market rate. However, announcing a new discount rate is often a convenient way to send a message to the money markets.
How is the Fed's control of money markets transmitted to other financial markets and to the economy? How does it influence spending on goods and services? To banks, money market rates are costs of funds they could lend to their customers or invest in securities. When these costs are raised, banks raise their lending rates and become more selective in advancing credit. Their customers borrow and spend less. The effects are widespread, affecting businesses dependent on commercial loans to finance inventories; developers seeking credit for shopping centers, office buildings, and housing complexes; home buyers needing mortgages; consumers purchasing automobiles and appliances; credit-card holders; and municipalities constructing schools and sewers. Banks compete with each other for both loans and deposits. Because banks' profit margins depend on the difference between the interest they earn on their loans and other assets and what they pay for deposits, the two move together. Thanks to its control of money markets and banks through monetary policy, the Fed influences interest rates, asset prices, and credit flows throughout the financial system. Arbitrage and competition spread increases or decreases in interest rates under the Fed's direct control to other markets including, of course, real estate.
We hear a lot about interest rates, and not only in my professional field of expertise. Interest rates are everywhere to be found in our daily lives: credit card interest, interest on deposits, car loan interest, personal loan interest, treasury bond interest. The other day I received a spam e-mail that said: "Need new socks ? Apply for our Family Loan - competitive interest rates". Since I am single and own approximately fifty pairs of socks - they seem to be the preferred Christmas present in my household - I decided not to push the 'Click Here' button. But just what are the mechanics of interest rate setting? Who decides which interest rate to charge to whom - and how?
Paul Volcker, while chairman of the Board of Governors of the Federal Reserve System (1979-87), was often called the second most powerful person in the United States. Volcker triggered the "double-dip" recessions of 1979-80 and 1981-82, vanquishing the double-digit inflation of 1979-80 and bringing the unemployment rate into double digits for the first time since 1940. Volcker then declared victory over inflation and piloted the economy through its long 1980s recovery, bringing unemployment below 5.5 percent, half a point lower than in the 1978-79 boom and helping Ronald Reagan convert the American people to Reaganomics. Volcker was powerful because he was making monetary policy. Central banks are powerful everywhere for the same reason, although few are as independent of their governments as the Fed is of Congress and the White House. Central bank actions are the most important government policies affecting economic activity from quarter to quarter or year to year.
Monetary policies are technically demand-side macroeconomic policies. They work by stimulating or discouraging spending on goods and services. Economy-wide recessions and booms reflect fluctuations in aggregate demand rather than in the economy's productive capacity. Monetary policy tries to damp, perhaps even eliminate, those fluctuations. It is not a supply-side instrument. Central banks have no handle on productivity and real economic growth. A central bank is a "bankers' bank." The customers of the Federal Reserve Bank are not ordinary citizens but "banks" in the inclusive sense of all depository institutions--commercial banks, savings banks, savings and loan associations, and credit unions. They are eligible to hold deposits in and borrow from the Federal Reserve System and are subject to the Fed's reserve requirements and other regulations. The same relationship exists in Canada between the Bank of Canada and the individual banking institutions.
Banks are required to hold reserves at least equal to prescribed percentages of their checkable deposits. Compliance with the requirements is regularly tested, every two weeks for banks accounting for the bulk of deposits. Reserve tests are the fulcrum of monetary policy. Banks need "federal funds" (currency or deposits at Federal Reserve System) to pass the reserve tests, and the Fed controls the supply. When the Fed buys securities from banks or their depositors with base money, banks acquire reserve balances. Likewise the Fed extinguishes reserve balances by selling Treasury securities. These are open-market operations, the primary modus operandi of monetary policy. A bank in need of reserves can borrow reserve balances on deposit in the Fed from other banks. Loans are made for one day at a time in the "federal funds" market. Interest rates on these loans are quoted continuously. Central Bank open-market operations are interventions in this market. Banks can also borrow from the Federal Reserve Bank at the announced discount rate. The setting of the discount rate is another instrument of central bank policy. Nowadays it is secondary to open-market operations, and the Fed generally keeps the discount rate close to the federal funds market rate. However, announcing a new discount rate is often a convenient way to send a message to the money markets.
How is the Fed's control of money markets transmitted to other financial markets and to the economy? How does it influence spending on goods and services? To banks, money market rates are costs of funds they could lend to their customers or invest in securities. When these costs are raised, banks raise their lending rates and become more selective in advancing credit. Their customers borrow and spend less. The effects are widespread, affecting businesses dependent on commercial loans to finance inventories; developers seeking credit for shopping centers, office buildings, and housing complexes; home buyers needing mortgages; consumers purchasing automobiles and appliances; credit-card holders; and municipalities constructing schools and sewers. Banks compete with each other for both loans and deposits. Because banks' profit margins depend on the difference between the interest they earn on their loans and other assets and what they pay for deposits, the two move together. Thanks to its control of money markets and banks through monetary policy, the Fed influences interest rates, asset prices, and credit flows throughout the financial system. Arbitrage and competition spread increases or decreases in interest rates under the Fed's direct control to other markets including, of course, real estate.
Inventory Loans
Financing Inventory Assets(About Author..By Stan Prokop)
Inventory loans or the financing of your inventory as a component of working capital are critical to the success of your business if your firm has a strong inventory component in working capital.
Inventory is one of the two components of working capital - the other is of course receivables. More often than not the receivable asset is typically larger, on a monthly basis than the inventory assets - but some firms based on the nature of what they do have a very heavy investment in inventory.
Inventory converts into receivable which convert into cash. We all know that. The crux of the matter though is the time in which this happens. Your ability as a manufacturer, wholesaler, etc to purchase inventory, re work it, bill your customer, and then, wait for your account receivable to get paid in many cases can take 2-3 month. The financial analysts call this whole process the cash conversion cycle - the only way you can slow that cycle down and improve cash flow is, unfortunately, to delay payments to suppliers as long as you can. That's not a desirable operating strategy.
Inventory financing and inventory loans work best when they are often within the context of a true asset based lending arrangement for a combination of inventory and receivables. However the bottom line is as we have stated - financing in this critical area of business financing is available, it's specialized, but when properly put in place can significantly grow sales and profits.
So is there a solution. There is of course, and in Canada it is a highly specialized solution involving the financing of inventory as a key driver to improve your cash flow and working capital. If done properly you do not incur extra term debt - the reality is that all you are doing is 'monetizing 'inventory to generate additional cash flow and working capital for your growth and profits.
One or two critical challenges continually obstruct our client's ability to properly monetize their working capital. Let's examine some of those challenges and determine how they can be overcome.
The first challenge is simply that it is becoming increasingly difficult to obtain inventory financing from traditional sources such as the Canadian chartered banks. In fairness to our friends at the banks it simply is difficult for them to properly value and monitor and understand each company's different inventory financing needs and the cash cycle around that inventory that we have discussed. One further technical issue arises here, which is simply that if your firm has an operating lender in place that lender has probably, sometimes unknowing to yourself, taken a security on the inventory as a part of their security agreement. That's not optimal, your inventory is collateralized, but you don't receive any funding or margining against it.
We meet with many clients who are in this position, and need to work with them to unravel their current financing to properly allow for the monetization of their inventory via an inventory loan or margining facility.
Inventory financing in Canada is specialized - as we've noted. We strongly recommend you seek and work with a trusted, credible, and experienced advisor in this area.What are the benefits of such a relationship. First of all your inventory will be properly 'understood 'and valued, allowing you to borrow against its value accordingly. It is an unwritten but generally acceptable rule that most banks lend approximately 40% against inventory assets. Two points here - if you can get bank financing on inventory and get that 40% advance we would pretty well recommend you take it; however if that becomes insurmountable, as it does for most clients, you actually can get anywhere from 40-75% from a true inventory financier.
Are there any special requirements to get proper inventory financing? In general no - a standard business financing application applies, and you must be able to demonstrate, preferable via a perpetual inventory system, that you can account for and report on your inventory on hand, usually on a monthly, but perhaps on a weekly basis.
Inventory loans or the financing of your inventory as a component of working capital are critical to the success of your business if your firm has a strong inventory component in working capital.
Inventory is one of the two components of working capital - the other is of course receivables. More often than not the receivable asset is typically larger, on a monthly basis than the inventory assets - but some firms based on the nature of what they do have a very heavy investment in inventory.
Inventory converts into receivable which convert into cash. We all know that. The crux of the matter though is the time in which this happens. Your ability as a manufacturer, wholesaler, etc to purchase inventory, re work it, bill your customer, and then, wait for your account receivable to get paid in many cases can take 2-3 month. The financial analysts call this whole process the cash conversion cycle - the only way you can slow that cycle down and improve cash flow is, unfortunately, to delay payments to suppliers as long as you can. That's not a desirable operating strategy.
Inventory financing and inventory loans work best when they are often within the context of a true asset based lending arrangement for a combination of inventory and receivables. However the bottom line is as we have stated - financing in this critical area of business financing is available, it's specialized, but when properly put in place can significantly grow sales and profits.
So is there a solution. There is of course, and in Canada it is a highly specialized solution involving the financing of inventory as a key driver to improve your cash flow and working capital. If done properly you do not incur extra term debt - the reality is that all you are doing is 'monetizing 'inventory to generate additional cash flow and working capital for your growth and profits.
One or two critical challenges continually obstruct our client's ability to properly monetize their working capital. Let's examine some of those challenges and determine how they can be overcome.
The first challenge is simply that it is becoming increasingly difficult to obtain inventory financing from traditional sources such as the Canadian chartered banks. In fairness to our friends at the banks it simply is difficult for them to properly value and monitor and understand each company's different inventory financing needs and the cash cycle around that inventory that we have discussed. One further technical issue arises here, which is simply that if your firm has an operating lender in place that lender has probably, sometimes unknowing to yourself, taken a security on the inventory as a part of their security agreement. That's not optimal, your inventory is collateralized, but you don't receive any funding or margining against it.
We meet with many clients who are in this position, and need to work with them to unravel their current financing to properly allow for the monetization of their inventory via an inventory loan or margining facility.
Inventory financing in Canada is specialized - as we've noted. We strongly recommend you seek and work with a trusted, credible, and experienced advisor in this area.What are the benefits of such a relationship. First of all your inventory will be properly 'understood 'and valued, allowing you to borrow against its value accordingly. It is an unwritten but generally acceptable rule that most banks lend approximately 40% against inventory assets. Two points here - if you can get bank financing on inventory and get that 40% advance we would pretty well recommend you take it; however if that becomes insurmountable, as it does for most clients, you actually can get anywhere from 40-75% from a true inventory financier.
Are there any special requirements to get proper inventory financing? In general no - a standard business financing application applies, and you must be able to demonstrate, preferable via a perpetual inventory system, that you can account for and report on your inventory on hand, usually on a monthly, but perhaps on a weekly basis.
Bad Credit Loans
(About AUTHOR...By Millie Borris)
It is often hard to get a loan if your credit score is less than perfect. For up to 50% of people, their credit report is a major problem and is very hard to improve. There are lenders, however, who will give loans to people with bad credit. There are more difficult rules to abide by and more stipulations on bad credit loans, but they are not impossible to achieve.
The first step in applying for a loan with bad credit is to try to get some help with your credit. Programs such as credit monitoring offer a way for people with less than perfect credit to improve their credit score. Credit monitoring helps keep track of your credit rating to let you know about changes in your credit rating. It is much easier to get a loan if you can find a way to improve your credit score than if you have outstanding problems with your financial history and aren't working on it.
People with bad credit who apply for loans can expect to need proof of income, residence, and a steady lifestyle in order to get a loan through a private lender. Most private loans come with extremely high interest rates and a very strict schedule for repayment. Most private lenders will take a minimum payment because they make money off the interest, and the longer you wait to pay your balance off in full, the more money they make off of you. Most private lenders will give a full disclosure statement to you upon applying for your loan so that you know what the requirements for your loan repayment will be.
Bad credit can also be remedied by getting help with debt consolidation. Sometimes if you are in the process of paying off debt and can prove it, lenders are more likely to let you have a loan. Most personal lenders are more than willing to help someone out who is making a serious attempt to reclaim their credit stability. Some people take out loans from a bank or financial institution while under credit monitoring or debt consolidation, and can simply have the cost of the loan added in to their payment schedule.
It is often hard to get a loan if your credit score is less than perfect. For up to 50% of people, their credit report is a major problem and is very hard to improve. There are lenders, however, who will give loans to people with bad credit. There are more difficult rules to abide by and more stipulations on bad credit loans, but they are not impossible to achieve.
The first step in applying for a loan with bad credit is to try to get some help with your credit. Programs such as credit monitoring offer a way for people with less than perfect credit to improve their credit score. Credit monitoring helps keep track of your credit rating to let you know about changes in your credit rating. It is much easier to get a loan if you can find a way to improve your credit score than if you have outstanding problems with your financial history and aren't working on it.
People with bad credit who apply for loans can expect to need proof of income, residence, and a steady lifestyle in order to get a loan through a private lender. Most private loans come with extremely high interest rates and a very strict schedule for repayment. Most private lenders will take a minimum payment because they make money off the interest, and the longer you wait to pay your balance off in full, the more money they make off of you. Most private lenders will give a full disclosure statement to you upon applying for your loan so that you know what the requirements for your loan repayment will be.
Bad credit can also be remedied by getting help with debt consolidation. Sometimes if you are in the process of paying off debt and can prove it, lenders are more likely to let you have a loan. Most personal lenders are more than willing to help someone out who is making a serious attempt to reclaim their credit stability. Some people take out loans from a bank or financial institution while under credit monitoring or debt consolidation, and can simply have the cost of the loan added in to their payment schedule.
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