Classification of Loan Assets

Classification of Loan Assets

*Dr.P.Shanmukha Rao **Dr.N.V.S.Suryanarayana

The main function of the banking is to provide loans through various schemes acceptance of the deposits and to get interest from the prospective borrowers. Simultaneously the borrowers by having their required loans are starting their career and are being. In the same time unemployment problems are being solved to some extent. But if the banks after providing loans does not monitor or supervise the borrowers then many a times the loans become NPA(non-performing Assets). Under prudential norms, total advances or loans of a bank are classified under four segments depending on the performing of assets.Classification of Loan Assets Advances



Performing Assets Non-Performing Assets



Standard assets Weak Assets

sub-standard doubtful loss

assets assets assets



Performing assets:

Performing assets are assets, which do not carry any problems more than normal risk, attached to the business.

Standard assets:

Standard Assets are those, which do not disclose any problem and which do not carry more than normal risk attached to the business. These are performing assets. Further advances against 100% security by lien on terms deposits, national savings certificates (NSCs) eligible for surrender, indira vikaspatra, kisan vikas patra and LIC are to be classifies as standard assets and no provision as required in these accounts. The government guaranteed are exception in the sense that even when they are classified as NPA for the purpose of income recognition for the purpose of assets classification, they must be treated as standard Assets.

Weak standard assets:

The accounts having the following irregularities are being treated as weak standard Assets.




¨ Accounts where interest and installment have not been serviced for more than one quarter.

¨ Continuous over drawings.

¨ Development of letters of credit.

¨ Invocation of guarantees.

¨ Accounts overdue for more than 4 months.

¨ No operation in the account.
Non-performing assets:

Non- performing Assets are those loans given by a bank or financial institution where the borrower delays interest or principal payments. According to the RBI guidelines any loan repayment, which is delayed beyond 90 days, has to be identified as NPA. Banks are not allowed to book any income from NPA's. they have to make provisions for the NPA's or keep money a side, increase they can't collect from the borrower which affects profitability.

1. Sub standard assets:

Substandard assets are those, which have been classified as NPA for a period not exceeding two years. In such cases, the current net worth of borrower/guarantor or the current market value of the security charged to the bank is not enough recovery of dues in full. In other words such an asset will have well defined credit weaknesses that may jeopardize the recovery of the debt in full and there are district changes that the bank will sustain some loss, if the deficiencies are not corrected.

In case of term loans, where the terms of loan agreement regarding interest and principle have been renegotiated or rescheduled after commencement of production, should be classified as sub standard and should remain in such category for two years of satisfactory performing under the terms.

2. Doubtful assets:

Doubtful assets are assets, which have remained NPA for a period exceeding two years. As in the case of sub standard assets, here the rescheduling does not entitle a bank to upgrade the quality of the advance automatically. the loans of this category have all the weaknesses inherent in those classified as sub standard with the added characteristic that the weaknesses make collection in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. Depending upon the period for which, the loan assets has remained doubtful 20% to 50% of the secured on the following basis.

If Considered doubtful: Upto one year 20%. One to three years 30%.

More than three years 50%.

3. Loss assets:

A loss assets is one where loss has been identified by the bank or internal auditors or the RBI inspectors, but the amount has not been written off wholly or partly. In the other words such an assets is considered uncollectible and have such little value that its continuance as a bankable assets is not warranted, although there may be some salvage value or recovery.

The loss assets requires 100% provisioning, as the value of the security is negligible.

Steps Taken By Banks To Reduce The Level of Npa

The huge amount of NPA not only reduces the yield on advances the but also reduces the profitability of the banks. The steps taken by the banks to reduce the level of NPA could be classified into two categories, namely, legal measures and non-legal measures.

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About the Author

S.R.PADALA & NVS SURYANARAYANA

*Dr. SHANMUKHA PADALA : The author is a well qualified and posses Vast teaching experience in Field of Management. He has great interest in... (show bio)

How to Get Mortgage Loan Leads: The Top Ways to Generate Leads for Your Mortgage Loan Business

Generating leads is an important aspect of any business, and the mortgage industry is certainly no exception. So if you are a mortgage agent or broker looking for information on how to get mortgage loan leads, then you will need to understand the top methods for doing so as well as how they work and which will be the most effective for you and your mortgage loan business.

The 2 Most Common Ways to Generate Mortgage Loan Leads:

1- Off-line Advertising: Mortgage agents often utilize a variety of advertising techniques to generate leads for their business, one of them being the traditional offline methods of newspaper ads, direct mail post-card ads, radio and tv commercials and even billboards. When looking at how to get mortgage loan leads, you will need to consider where your budget is currently at and if it will allow the time and money that is necessary for this kind of advertising, since offline techniques are not usually cheap.

2- Lead-Generating Companies: Another method that agents may consider when looking at how to get mortgage loan leads, is the possibility of purchasing their leads through a lead generating company. There are many companies which claim to provide fresh, real-time leads at a variety of prices depending on the company. However, you should keep in mind, that while this method can sometimes be effective, the leads can not be guaranteed buyers and are often just casual prospects that filled out an online survey just for curiosity's sake.

The Most Effective Way to Generate Qualified Mortgage Loan Leads:

If you are looking at how to get mortgage loan leads, then it's safe to say that you don't want to play around with paying for uninterested leads, or leads that are not ready to buy now. And if that is the case, then you will want to look into utilizing the power of the internet to attract a more steady flow of truly interested mortgage loan leads that fit your criteria to become a permanent client.


If this is the case, then you will need to enroll in anInternet Marketing Mentoring and Coaching Center that will have the tools and resources necessary to train you in all the current Online Marketing techniques. This will help to set you apart from the competition and position you as a leader in the Mortgage industry so that you can attract a steady flow of traffic to your websites, using techniques such as keyword research and search engine optimization.

The techniques you need to learn for how to get mortgage loan leads are not difficult skills to master, but they are also not the type of thing to overlook if you really want your website and online marketing content to rank high in the search engines and be found by the greatest amount of potential mortgage loan leads as possible. So be sure not to overlook this!

Remember, that in order to truly attract the best mortgage loan leads it is absolutely critical that you receive on-going training from a qualified internet advertising and marketing system that will be able to help position you where you want to be in order to generate the best, highest-converting leads for your business.

Next, continue reading more about How to Get Mortgage Loan Leads by learning the top techniques and strategies that are necessary to attract and generate qualified leads to your business; fill out the form on the first page, follow the instructions that will be sent to your email and then watch the videos on step #2 and 3 of the second page to start learning the top techniques that you can start using now to promote your Mortgage Loan business and attract more Mortage Loan Leads today!

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Shawn Stoik

Shawn Stoik is an Online Marketing Coach, Mentor and Corporate Trainer for what is arguably the World's Largest Internet Marketing School... (show bio)

Ideal Creation of a Loan Agreement Template

There are different ways for each individual or organization to create a loan agreement template. Ideally, the document is drawn up in front of a lawyer to ensure that the document contains valid details, terms, and conditions. Since it is not an accessible method for most people, you can draft your own loan agreement by following basic instructions on how to create one. Be advised though, that the structure of the details should be carefully considered not only the conditions themselves. This type of contract is deemed valid in court once signed so can therefore be a liability on your end if you cannot carry out the responsibility stated in the agreement.

Indeed, the world is within your reach nowadays. You can get anything and everything at a click of a button. Going into the internet provides you with the data you need without spending so much effort. You can surely obtain a loan agreement template from the World Wide Web. There are certain points, however, that you need to check before you formally use the document.

The following are points to include in the loan agreement you are drafting:
- Interest rate, if any
- Mode of payment of loan
- Schedule of payment if instalment method
- Due date of payment or instalment schedule
- Late fees and penalties when payment is delayed


There are cases wherein the loan agreement template was not drafted according to these agreements that the parties have made. Sometimes, these points are not included altogether. It is helpful to see the scheduled amount and date for referral of both lender and borrower. There would be no need for reminders or arguments over payments and late fees, for example.



Basic information you will find in a loan agreement template are the full names of both parties involved in the loan, their addresses, names of witnesses, and the lawyer who notarized the document. Terms and conditions should be specified in detail aside from the basic information since this is the area that both parties should abide by.

Secondary information may include the amount loaned, mode of payment, amount of scheduled payment if paid through instalments, due date for payment or scheduled payment. The document should also plainly state if there is any interest rate on top of the loanable amount. It is better to include a computation of payable amount with interest so that questions regarding the aspect can be resolved if conflicts come up. If details of computation pertain to amount of instalment payments, it is also good to include the computation for total amount to be paid with the interest.

Finally, penalties and other charges should be clearly stated in the document so that there will be guidelines on what needs to be done when the borrower fails to deliver his or her responsibilities.

Although these information or points seem pretty straightforward and memorable, oftentimes common individuals fail to include all data in their loan agreement template. It is best to take note of this guide so that you will have a solid contract to present to legal authorities if need be.

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Gerri Mason

Gerri Mason is an author of diverse legal documentation. Due to his extensive research and work experience, he is able to share his in-depth... (show bio)

Cenlar Loan Modification Denied - What Should I Do Now?

So you've had your Cenlar loan modification denied and you're now having a panic attack. Your family home will be on course closer to the foreclosure process and the constant worry can be overpowering. If you happen to continue reading this article, you may save your family residence from the foreclosure sale.

Top Reasons For a Denial
Despite the fact that a loan modification is very much the greatest option around for households having to deal with economic difficulties, numerous individuals are not qualifying. At this time, you will discover quite a significant increasing number of individuals who have tried to file for a modification loan by themselves but without the appropriate advice and a comprehension of new legal guidelines and restrictions, these families were quickly denied for the modification. The most notable reasons for a loan modification denial are frequently as a consequence of insufficient data or for incorrectly submitting the necessary forms. There could be also more causes for rejection that you do not realize.

There's Still Hope
In the event you have had your Cenlar loan modification denied, there is still hope for turning your troubles around and protecting your family home from property foreclosure.The first task is to re-apply again, however, it is highly recommended that you use a specialist. Having a loan mod expert will not only minimize the strain in addition to the frustration of filing, but with their aid, the procedure could be more efficient and your probability of approval can be increased. They'll have the ability to understand why you had been denied earlier and explain what adjustments you need to make. Try to remember, these kinds of specialists talk your loan company's language and also have the knowledge and practical experience needed to ensure an approval.

Keep in mind that you need to first get yourself a totally free loan mod review so you can really feel comfortable using the specialist you may be working with. Try to remember, it is your home on the line and you need to make certain the specialist working as your representative can give you hands on courteous service. You deserves the most beneficial service so you are certainly not denied a Cenlar loan mod for a second time.

Where To Find Cenlar Loan Modification Help
The loan mod process can be frustrating and overwhelming. Having a specialist on your side can greatly reduce the stress, as they do all the negotiating and paperwork on your behalf. Visit best loan modification companies to learn why having a loan mod company is crucial to saving your home and and how you can get a FREE evaluation to help determine why you were denied the first time.

Don't risk losing your home. Visit www.BestLoanModificationCompanies.org to get started.

Benefits and Drawbacks of Mortgage Loan Modification

Mortgage loan modification is a way to avoid foreclosure. If you're falling behind on your mortgage payments, it's definitely something to consider. The best time to consider this type of modification is actually before you're late on one single payment. If you anticipate problems paying your mortgage, now might be the time to talk to your lender about loan modification.

If you or your spouse has lost a job, for instance, you know your income will soon be drastically reduced. This is a scenario where you may not have been late on a payment yet but you anticipate problems. And this is a situation where a mortgage loan modification could be right for you. You need to contact your bank or your lender and explain to them your changed financial situation. You'll have to fill out paperwork and prove your finances have dropped from when you originally took out the mortgage.

You're not guaranteed to qualify for the modification, but you can't get in unless you go through the application process. The bank or lender will either grant the modification, deny it, or possibly offer you a different option like refinancing.

A mortgage loan modification doesn't require refinancing. It's simply the act of changing the terms of the mortgage for a period of time which usually runs about five years. After the five-year period is over, the mortgage terms revert to their original numbers. Most lenders consider the first three months after a modification to be probation. As long as you make your newly reduced payments on time for the probation period, the modification will go through. If you're late on one of those three payments, the modification can be tossed out.



The benefits of a mortgage loan modification are clear. You get a reduced payment that's more in line with your current income, and possibly a reduced interest rate, but this depends on your lender in your particular situation. A reduced payment will help you make your payments and keep your home from being foreclosed on. This is a huge benefit for anyone who's risking the loss of their home.

The drawbacks of mortgage loan modification can be far-reaching, however. The modification will show on your credit report and will affect your credit score. It can drop your FICO score quite a bit at first, but the score will recover over time. If you anticipate needing credit for anything else in the near future, however, that dropped score will affect your ability to get credit. You may still qualify for credit, but your interest rates will be higher because of your lower score. And in some cases the score may be lowered enough that creditors turn you down.

There is also a chance that your current credit card rates will rise because of the lower score. Even if you're not late on a payment with them, the mortgage loan modification showing on your credit report can cause them to raise your interest rates and in some cases can greatly offset the money you save with a lower mortgage payment.

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Leonard Carson

Leonard Carson has assisted and advised several clients on the ins and outs of mortgage modification. After practicing as a financial... (show bio)

Commercial Loan Modifications - Modify Commercial Loan Now!

The streets are littered with “For Lease” signs, the unemployment rate is the highest it’s been in decades, and vacancy rates are increasing. As a result of these factors, many commercial property owners are falling behind on their mortgage payments. In order to prevent an enormous commercial mortgage meltdown, the United States needs banks to start issuing more commercial loan modifications.

Commercial loan modification is simply the process of restructuring the terms of a commercial loan. It is a matter of renegotiating the loan so that it is more favorable to the borrower. For example, one can negotiate a lower interest rate with their lender, extend the term of the loan, defer mortgage payments, or even reduce the principal balance of the loan.

If a commercial property is not generating enough income to pay the mortgage or the operating expenses, a commercial lender may consider a temporary or permanent interest rate reduction. Reducing the interest rate will in turn lower the payment to allow the commercial property owner to increase the cash flow of the building. An interest rate reduction is ideal for property owners who have high vacancy rates. Lowering the interest rate should allow the borrower to service the debt while the vacant units are filled. On multi-million dollar loans, reducing the interest even just 1% can amount to savings of thousands of dollars per month.

Another common form of commercial loan modification is to extend the loan term. Extending the term or the maturity date of a loan can help commercial property owners avoid balloon payments and reduce their monthly mortgage nut. Many commercial loans have short terms, sometimes as few as 1 or 2 years. When the loan matures after only 1 or 2 years, the borrower is responsible for making a large balloon payment to pay off the principal balance entirely. Most lenders will consider a loan extension, but sometimes at a cost.

They may charge a point, or 1% of the loan amount, or extend the term at a higher rate of interest. Commercial property owners with loans nearing the maturity date may want to contact a commercial loan modification attorney to prevent this type of bullying by the lender.

In addition to lowering the interest rate or extending the term, a commercial mortgage lender may consider a deferment of payments as a form of loan modification. Sometimes called a payment moratorium, lenders may allow a borrower not to make a mortgage payment for 3 to 6 months. During this time, the borrower is able to build up cash reserves and rent out vacant units.

Before the economic downturn, property owners could refinance their commercial loans in order to lower interest rates and avoid balloon payments. Now, with the decline in property values, and the reduction in income of commercial properties, even borrowers with good credit are having their loan applications denied.

According to Deutsche Bank, by the end of 2012 over $153 billion in commercial loans will become due, and possibly $100 billion of that group will not be able to refinance.
What will happen then? Commercial lenders will have to consider loan modifications in order to stay in business. Until recently, many commercial lenders would prefer to foreclose on a building rather than modify the loan. However, today’s political and economic climate will favor commercial loan modifications, and we may soon have government bailout programs for commercial lenders.

Commercial loan modification will not only help stabilize the economy, it will also salvage the deteriorating commercial real estate market. The United States needs commercial loan modifications. There is no better time than now to apply for a commercial loan modification.

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Dean Owens

By the way, do you want to learn more about Commercial Loan Modifications? If so, get a free consultation to discuss your commercial... (show bio)

Acquiring The Right Loan and Insurance for Your Horse Trailer

The acquisition of a horse trailer whether you intend to buy a new or used one is a major purchase. Most people are not able to pay the entire cost upfront and it's a good thing that there are a number of ways to have horse trailers financed. As with any other purchases, different factors such as the borrower's credit score and the cost of the horse trailer will decide the amount to be financed, the term and number of payments to be made.

To get started, find out first if financing is offered by the business or individual that you'll be buying the horse trailer from. Most dealers to offer them. To be certain that you're getting the best deal, it's best to compare the terms that is being offered by the bank and a private lender. Don't lose hope if you have bad credit because there are bad credit lending specialists that will still entertain you. If you're buying from a private seller, you may pay in installment but they usually will not allow you to take trailer until you are fully paid.

Apply for the loan through your choice lender. Lenders that offer boat and car loans also usually provide horse trailer loans. If you can get a financing plan with simple interest, that'll be much better than compounded interest. Since horse trailers are classified as recreational, they may have slightly higher interest rate than home or car loans. Some lenders even set a minimum amount for the loan.

Credit card is another option to finance your horse trailer. This is a good option if your credit limit can cover the amount of the trailer and if you have no other ways to finance your purchase. Credit cards however have compounded interest and have higher interest rates

Acquiring the trailer is not enough, it's illegal to have a trailer out on the road without insurance. This is also something that you need to get done. As horse trailers are expensive and are used to haul live animals, it's important that you have it insured to help protect your investment.

To get it insured, be sure to have all the information that you might need such as the model, make, year, and serial number, among others. You also need to provide details such as the number of horses the trailer can haul, that trailer's hitch, it's size specification and the purchase price. This is important and it helps the insurance company determine the quote for the insurance. Insurance companies might also ask if the trailer may be used for commercial purposes like hauling horses to be sold or just hauling services. Insurance coverage differs from commercial and personal use.

Shop around first for different insurance companies that do cover horse trailers. You can begin with your car insurance provider. Sometimes, getting more than one insurance product from one company can help get you discounts if you have existing policies with them. When you're all set with your insurance, your horse trailer is now all set for the road. Sometimes dealing with your bad credit can be a hassle. If you need money, but have bad credit you are often forced to consider a bad credit loan. Companies like BHM financial specialize in bad credit loans.






Most people are not able to pay the entire cost upfront and it's a good thing that there are a number of ways to have horse trailers financed. As with any other purchases, different factors such as the borrower's credit score and the cost of the horse trailer will decide the amount to be financed, the term and number of payments to be made.

To get started, find out first if financing is offered by the business or individual that you'll be buying the horse trailer from. Most dealers to offer them. To be certain that you're getting the best deal, it's best to compare the terms that is being offered by the bank and a private lender. Don't lose hope if you have bad credit because there are bad credit lending specialists that will still entertain you. If you're buying from a private seller, you may pay in installment but they usually will not allow you to take trailer until you are fully paid.

Apply for the loan through your choice lender. Lenders that offer boat and car loans also usually provide horse trailer loans. If you can get a financing plan with simple interest, that'll be much better than compounded interest. Since horse trailers are classified as recreational, they may have slightly higher interest rate than home or car loans. Some lenders even set a minimum amount for the loan.

Credit card is another option to finance your horse trailer. This is a good option if your credit limit can cover the amount of the trailer and if you have no other ways to finance your purchase. Credit cards however have compounded interest and have higher interest rates

Acquiring the trailer is not enough, it's illegal to have a trailer out on the road without insurance. This is also something that you need to get done. As horse trailers are expensive and are used to haul live animals, it's important that you have it insured to help protect your investment.

To get it insured, be sure to have all the information that you might need such as the model, make, year, and serial number, among others. You also need to provide details such as the number of horses the trailer can haul, that trailer's hitch, it's size specification and the purchase price. This is important and it helps the insurance company determine the quote for the insurance. Insurance companies might also ask if the trailer may be used for commercial purposes like hauling horses to be sold or just hauling services. Insurance coverage differs from commercial and personal use.

Shop around first for different insurance companies that do cover horse trailers. You can begin with your car insurance provider. Sometimes, getting more than one insurance product from one company can help get you discounts if you have existing policies with them. When you're all set with your insurance, your horse trailer is now all set for the road. Sometimes dealing with your bad credit can be a hassle. If you need money, but have bad credit you are often forced to consider a bad credit loan. Companies like BHM financial specialize in bad credit loans.

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Rachel Schwartz

Rachel Schwartz is the Marketing Manager of BHM Financial - one of the most trusted names in the bad credit loan industry. This company may... (show bio)

How Does a Multi-Family Loan Work? Here Are the Details

Multi-family loans can be acquired through mortgage brokers and directly through a variety of financial lending companies. A multi-family loan is designed for the purchase or refinancing of multi-family properties. A multi-family property is defined as one in which five or more dwelling units exist and no more than 20 percent of the net rentable area is rented to or will be rented to non-residential tenants.

Multi-family housing investors can locate economical, flexible, and tailored financing options when they are looking to acquire a multi-family loan. A broad array of financing options exists for a variety of multi-family housing as well as a broad array of loan amounts. Since the loans are often tailored to the specific type of multi-family housing, it is important to note the differences.

Four specific types of multi-family housing properties exist. Multi-family housing communities can include affordable housing, seniors housing, manufactured housing, and student housing properties. This type of property can include apartment buildings, condominiums, or cooperatives with five or more individual units and they can be located within rural or metropolitan areas.

Multi-family affordable housing is defined as one in which certain rent and occupancy restrictions are in place for the property. In particular, at least 20 percent of the individual units that are rented will be rented to households in which the gross earnings are 50 percent or less of the median income for the area. This monetary figure is adjusted for family size. The amount of rent is restricted to a figure that is affordable to individuals in this category.

Additionally, at least 40 percent of the individual units that are rented will be rented to households in which the gross earnings are 60 percent or less of the median income for the area. This monetary figure is adjusted for family size. Additionally, the amount of rent is restricted to a figure that is affordable to individuals in this specific category.







Senior housing can include independent living, assisted living, assisted living with Alzheimer's, or a combination of any of these categories. Typically, this type of multi-family housing involves a large number of individual units. Additionally, age restrictions and percentages for rentals per specific age bracket are usually in place as well.

Manufactured housing typically involves higher quality, professionally managed manufactured housing communities with a specific minimum number of sites ranging from 15 to 50 to even higher numbers. The limits on the number of rentable units are determined by the specific lender and the parameters that have been set for each specific type of loan.

Student housing involves a tenant base of student population, specifically, undergraduates or graduate students. To qualify as dedicated student housing a minimum occupancy rate must be preexisting. Typically, this type of multi-family housing is located near a college or university with a minimum number of enrolled students as well as being located within a specified radius of the campus.

As with any type of loan, multi-family loans have minimum amounts that must be borrowed in order to acquire the terms that are attached to them. Terms might include a fixed rate, variable rate, and a term between 5 and 30 years. Other terms also apply including prepayment provisions, vacancy assumptions, escrows, and more.

Multi-family loans are used for financing mixed-use properties. They sometimes have the potential for assumable financing as well as low or no pre-pay penalties. Many of these loans have flexible multi-family loan amortization rates. A multi-family housing project is a large venture. Acquiring the right type of loan, a multi-family loan, is essential to the project's success.

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Joe Silla

To read about what do lizards eat and lizard repellent, visit the Types Of Pet Lizards site.(show bio)

Writing a Letter: Sample Loan Modification in the US

Everyone who has ever tried to do a loan modification by themselves knows how hard it can be. The process is very threatening. You might want to refer to a sample loan modification in the US. The process of course has a lot of twists and turns. First off, there is the application form that you need to form completely. This is more straightforward than the other tasks. But still, there are some tricky things you have to go through. Then there are the negotiations with your creditor. This can be handled well if you research the conversion of rates others are offering. Then there is the letter expressing the hardship of your situation. This part is perhaps one of the trickiest because you really need to balance your tone. So here for your reference is an example letter. Read this sample loan modification in the US if you need a guide.


To Whomever It May Concern:

This letter is a formal follow up to my loan modification application which I have sent this past August 12, 2009. The details of what we are looking to have are in the application, but of course it does not delve into the conditions that put us into a precarious financial situation.

Due to the recession, there were many jobs losses and cutbacks in our company a couple of months ago. Because of this, I was transferred into a lower paying job position. I consider myself one of the lucky ones because at least I still have a job, but my new salary is less than half of what I used to receive. Our financial situation got so bad that we had to break our savings so that we could pay our monthly mortgages while keeping up with our other expenses. Then, a couple of months ago, things got worse as our interest rate shot up from 8 percent to 11 percent since we were not able to pay the mortgage monthly.



In light of this, my request is that our rate be brought down around eight to nine percent. This seems like a fair amount for all parties. We were never late in our monthly payments until I was demoted. Also, my wife is about to start on a higher paying job two months from now. We are very willing to negotiate a compromise that will make both parties happy.

Sincerely,
John Doe


This sample hardship letter, as you can see, is very direct. You can even be more direct than this letter. The statement here is that you will not be able to pay the high interest due to a loss of income. Just mention why you had lost your income in the first place. Make sure you elaborate that there is no other way that your family can manage the bill right now.

Also, it is quite important as shown in sample loan modification in the US that you state the new rate that you want to have. Save them the time and effort. Think about how many applications they have to sift through. They will not have time to look for the definite adjustments.

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Joel Owens

A computer graduate and loves to travel. Reading current news in the internet is one of his past times. Taking pictures of the things around... (show bio)

Can You Still Get A Car Loan With Bad Credit?

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Are you one of the many people who have loan problems? No need to worry, for you are not alone. Bad credit is not something to be ashamed of. Anyone can end up having it, just like the common cold. After some time and some effort on your part, you can turn a bad credit rating to a better one.

The good news is, even people with bad credit can be financed on bad credit car loans. Once you get there, you need to remember a few things, though, in order to turn your bad credit to the advantage of your bad credit car loan. Remember not to take on a car payment that you truly know in your heart that you can't afford. Know what you can and cannot afford before talking to a car salesman.

There are many ways by which you can get a bad credit car loan even when you have a bad credit. You need to have sufficient income that can pay up all your bills including additional payment for your bad credit car loan, insurance, accessories, repairs and maintenance costs. A steady and sufficient income could get you that bad credit car loan even if you have a bad credit. Your lender would like to see that you've had your current job for at least a year and this could make them overlook your bad credit hence increase chances in approving your bad credit car loan. Try to maintain your address for a while, as well, for this can keep your bad credit at bay and help in the approval of your bad credit car loan.

Having a large down payment will also help in getting your new bad credit car loan. Your down payment will depend on the car model you wish to buy. It could range from hundreds to thousands of dollars.



If you want to have a better chance at having your bad credit car loan approved, you can be a member of a credit union. Even if you have bad credit, you can apply to them for a bad credit car loan. Their credit criteria is often more relaxed compared to banks and finance companies. The longer you have been a member in a credit union, the more positive the response is for your bad credit car loan despite a bad credit rating.

The same thing works for a local bank. Should you have had a previous loan with them, they could still want to take a chance with you on your bad credit car loan. If by any chance you have paid off a previous loan, they could consider your bad credit car loan application even if you have bad credit history in other banks of finance companies.

You could also get a bad credit car loan by having a co-signer. Your co-signer must have good credit rating himself and meet the necessary requirements.

Bad credit will indeed affect your bad credit car loan application, but you can still explore other possibilities. A large volume new car dealer can give you deals you can bank on. Choose your vehicle and come up with a deal. Afterwards, talk with a finance manager who will work with you to get a bad credit car loan despite your bad credit. The trick is to see an aggressive finance manager who will see you through choosing your vehicle, overlooking your bad credit and getting a bad credit car loan soon.

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Uchenna Ani-Okoye

Uchenna Ani-Okoye is an internet marketing advisor and co founder of Free Affiliate Programs For more information and resource links on... (show bio)

How To Get The Construction Loan You Need

Being able to move into your new house is a great day. Knowing that you got the right construction loan to do it will help you sleep at night after you move in. With so many choices available today, it could be difficult to know where you should start looking and what features are the best. Here are a few tips for you to enable you to find a good deal on your construction loan.

The first thing you will need to do is to find out from a lender exactly how much you are able to obtain for your financing. After you know that figure, then you will understand how much you have to spend toward the whole project. You should also have a real good idea what additional costs there will be such as closing costs and other expenses needed to provide the house with all utilities, too.

After that, it comes time to select a home design. After choosing a general plan, you need then to talk to an architect and contractor. The architect will charge a rather hefty fee to adopt the general plan to your specific design, so you should know what it is and how many revisions it will give you. After talking with them and getting your plans drawn up, this will give you a near accurate representation of what it will cost to build your dream house. After you have your figure, you will need to go back to the drawing board and redesign your house - especially if it costs more than your budget allows.







After your plans are finalized, then you can approach your lender for the construction loan. He (or she) will require these plans before you are given any money. Keep in mind that a preapproval (which is often free) is not the same thing as having the construction loan.

You should learn all you can about the construction loan options available to you. It is easier if you have a construction loan that is convertible to a permanent loan. This will enable you to save some money and will be easier to obtain because it will be from the same lender. Be sure you have this feature in your contract.

Construction loans will usually require a Downpayment of 10% in order to qualify. A Downpayment of 20% will be required in order for you to not have to pay private mortgage insurance. Another way to avoid PMI, is to piggyback your loans. This means getting a first mortgage for 75 to 80%, and then taking out a second mortgage for the balance of 20 to 25%.

When it comes time to change from your construction loan to a permanent loan be sure that you are aware of the trends in interest rates so that you will understand whether it would be better to get an adjustable rate mortgage or a fixed rate mortgage. It is also possible to have a small cash flow on some mortgages that will allow you to make some additions to your new home.

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About the Author

Joseph Kenny

Joe Kenny writes for the UK Loan Store, offering views on homeowner loans in the UK, also visit them today for any adverse credit secured... (show bio)

Usda 100% Financing,The Loan That Will Allow More Buyers To Own Homes In The New Lending Environment

If you are thinking about or have decided to enter the real estate market to purchase a home, congratulations! This article is for you. Due to the huge inventory of homes for sale at bargain prices, it is a great time to be a buyer in this market. As you consider financing options for the property, your head may be spinning from all the mixed messages that we keep hearing in the media. Just yesterday I heard a so called "financial expert" on the news who said a buyer could not purchase a home without having a 750 credit score and a twenty percent down payment. Nothing could be further from the truth. It is true the guidelines have tightened up, but choosing the right loan program is the key to getting the mortgage.

I am here to help clear this up and let you in on a loan product that is helping more people get in to homes these days due to the tightened guidelines of conventional loans. Meet the USDA (US Department of Agriculture) Rural Housing Loan that allows no down payment, no mortgage insurance, and great rates as well.

This is a loan product that has been around for many years, but not many people know about. The guidelines allow people buying owner occupied homes with 100% financing on a market rate 30-year fixed mortgage, with no mortgage insurance requirements. I know it sounds too good to be true, but this program does exist. However, you must be purchasing a home that is in an eligible area and your income must not exceed the moderate income guidelines set for the area in which you are purchasing.

The rural development loan program which is guaranteed by USDA is not eligible in highly populated areas like cities, and highly populated towns, but it is available in many small and mid size towns across the United States. This loan allows people who fit the guidelines to purchase a home with no money out of pocket. Closing costs may be rolled in, or the seller may pay all closing costs including taxes and insurance.



The USDA loan makes sense for even those who are putting money down on the home. With conventional financing, if less than twenty percent is put down, the loan would require mortgage insurance adding additional monthly expense to your loan payment. This is not the case with the USDA program. For people who qualify for this loan product, there is no better financing package. It even beats the popular FHA loan, because with the FHA there is a three and a half percent down payment and there is monthly mortgage insurance no matter how much of a down payment is put in the deal.

It would make sense to see if your gross income as well as the town or address of the property (if it is known) is eligible for the USDA program. Once you know the location and your income is qualified, the next step is to find a mortgage professional who has experience with the USDA loan. There are pit falls that can only be avoided with proper knowledge that comes from proper experience closing these types of loans. In order to have a smooth and stress free loan process, a proper package must be submitted to the right lenders who have experience underwriting the USDA loan program. I hope this information was helpful. Keep in mind that if one is qualified for this loan, there is no better loan product on the market.

Mike Dell'Ovo has been helping people buy homes with no money out of pocket using the USDA Rural Housing Loan since 2003. If you would like more information on USDA Rural Financing or would like to check your area and income eligibility, please visithttp://www.MortgageWorkbench.com/usda/ for a Video and to use the USDA Eligibility Tool.

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About the Author

Mike DellOvo

Mike Dell'Ovo has been helping people buy homes with no money out of pocket using the USDA Rural Housing Loan since 2003. If you would like... (show bio)

Wells Fargo Loan Modification In 7 Days!

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For those of you who have a Wells Fargo loan, the good news is that your lender has typically shown a willingness to work with borrowers in the past. This means that they do approve loan modifications for those borrowers who qualify.

The main problem for homeowners trying to get approved for any Wells Fargo loan modification, whether it be an in-house lender program or a government sponsored one, is meeting the guidelines.

If there was one thing I had to pick that stands out from everything else, it would be your income and expense documents. This is where most homeowners fail to get approved.

Typically, you don't want to make too much money and you don't want to make too little. When you add up all your income and subtract your monthly expenses, you want to be somewhere around one hundred dollars plus or minus. This seems to be the magic number.






Before you go off and make up a bunch of numbers to get in the sweet spot, let me remind you that you lender has access to your credit report and knows exactly how much you pay each month for anything listed on it. Don't change any of those figures!

If you would like expert assistance preparing your Wells Fargo loan modification, just visit the links below. You can read reviews on some of the top no upfront fee loan modification companies and even try out a free HAMP loan modification calculator that will tell you what your new payment would be.

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Bob Mason

To see if you qualify for a Wells Fargo loan modification in record time, just visit wells fargo loan modification or HAMP loan modification... (show bio)

Keybank Loan Modification - Telling Keybank About Your Situation

You are behind on your mortgage with Keybank, and you have finally realized you need to get help. You have tried to figure out how to fix things with the resources you could find. However, you just have not been able to find that much money in the couch cushions, and your relatives are unable to come up with the money, either. So, you have decided to seek a Keybank Loan Modification.

Click here to get loan modification help today!

A loan modification through the Making Home Affordable Program could be the answer you are hoping for, if you qualify. This program encourages banks to rewrite existing mortgages so that the homeowner can stay in their home. Another benefit of the program is that the homeowner obtains a lower house payment to prevent the situation from happening again.

This type of loan modification is targeted to homeowners who have been affected by financial hardship. Financial Hardship is something that you had no control over that caused your income to decrease or your expenses to increase. The burden of communicating your circumstances falls upon you. This is one of the most important tasks you have as you go through the loan modification process. You might wonder how you are supposed to get this across to your loss mitigation representative.


Besides your regular application materials, you will be asked to submit a financial hardship letter to Keybank. You will need to clearly explain what happened to you and what you have done to improve things for the future. This letter should only be 1 1/2 pages long, and it should be very compact and condensed. The bank representative is overwhelmed with applications, and you don't want your application to be placed to the side and forgotten. If you are hoping to obtain a Keybank Loan Modification, you should be sure you convey the details of your situation to Keybank in a clear fashion.

For must know facts about how you can get approved for a loan modification, visit our blog athttp://1MortgageModifications.com/ to get help today.

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Christine Clover

Christine Clover is a loan modification expert. She has written hundreds of articles on loan modification. She has taken the initiative to... (show bio)

Mortgage Loan Shopping: Lendingtree, E-loan Or Quicken Loans?

The number of people running around to catch hold of the ideal mortgage has the best options online. It is said that over the next 5 years, ten to twenty percent of mortgages will mainly be Internet-based and eighty five percent of equity and refinanced mortgages will be done electronically. This is due to the fact that the Internet ensures that the job of comparing loans is quick and easy. And added advantage is that loans taken online provide a twenty four-hour convenience, are processed sooner and are more economical.
Everything comes with a risk so does the mortgage; online mortgages are not without their dangers.
Rather than offering the loans directly itself, LendingTree gathers up financial and personal information from customers and then submits the acquired information to its member banks that then competes for your business.
E-loans are fast, convenient and simple. You are just required to fill out an application from your computer. You are normally approved or disapproved within a matter of few minutes. Firstly, it has to be kept in mind that the credit rate can affect the amount and interest rate of your loan. It is quite pivotal that you check your credit score before you start looking for a loan. The hitch that comes into picture is the revealing of your personal information on-line, if the thought of entering so much personal data on- line worries you, then you can call and speak live with a LendingTree representative. They will take your information over the phone and then forward it electronically to the member banks and other lenders for evaluation.
Quicken loans come with a no down-payment scheme that makes it easier for the applicant to go ahead with applying for a loan that does not cause any problems for him in accordance to his finances. Online financial services at their best: fast, cheap, and convenient also includes shedding of unwanted paperwork. But it has a disadvantage that of commonly experienced dishonesty, failure to update clients on potential changes and promises that only seems to be speculations. The applicant must go through various reviews of people who had opted for quicken loans as they would be able to give a better insight into the choice of mortgage loans to opt for.
Options are many, the choice from the alternatives depends solely on you as an applicant, as the wiser choice you make the better will you stand as mortgage loan applicant.

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Keith Gill

Keith Gill is an experienced and successful Real estate investor and professional mortgage banker. Keith has made himself and others rich by... (show bio)

Loan Modification Law - California State Senate passes Bill 94

The California State Senate has passed Senate Bill 94 (”SB 94?), legislation proposed by Sen. Ron S. Calderon (D-Montebello), Chairman of the Banking, Finance & Insurance Committee. The senate passed the bill on May 21, 2009, by a vote of 21 to 14. It is now in the state assembly where it has been read once and “held at desk,” which means that it’s awaiting referral to a committee.

Senate Bill 94 is intended to protect California homeowners from scam loan modification companies.

In my view, the problems with SB 94, as written include:

1. It was created to protect consumers from loan modification “scammers” who charge distressed homeowners up front fees and deliver nothing in return, but it was written without the benefit of accurate data on the contribution being made by the legitimate loan modification industry in California. Without knowing how many homeowners the private sector loan modification firms save each month, or the sustainability of the modifications obtained by the private sector, it would not be possible to design a solution in the best interests of homeowners and the state’s economy.

2. The SB 94 bill, as written, is based on a fundamental misconception. As stated in the in bill’s narrative:

“It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge.”

While both of these statements are technically true, this language ignores the fact that there are also reputable private sector firms that homeowners may choose to hire to help them negotiate with their banks when seeking a modification of their mortgages. Private sector firms, including those licensed by the state’s Department of Real Estate and/or law firmsoffering that such services, have helped tens of thousands of California homeowners get their mortgages modified. With the number of foreclosures continuing to increase each month, it would seem clear that the state’s homeowners would not benefit from any legitimate avenue being overlooked or unfairly maligned.




3. Defrauding a homeowner has always been against California law, so in that sense, SB 94 is redundant. When you consider that “scammers” who did in fact defraud consumers in conjunction with the promise of a loan modification, did so in violation of existing law, it would seem that a new law making it illegal to charge an advance fee when offering to assist a homeowner with a loan modification would be unlikely to prevent future scammers from attempting to do the same.

4. Legitimate firms offering to assist troubled homeowners could be regulated and monitored, without requiring these firms to operate at a financial disadvantage by disallowing advance fees. The process of obtaining a loan modification is not similar to other real estate transactions in several key ways:

A. The process can take six weeks, or six months… and in some cases even longer. The lenders and servicers are not consistent in how loan modifications are handled or on what basis they are granted.

B. There is no escrow, or objective standard for “satisfaction,” in conjunction with a loan modification transaction, and therefore there is no assurance that a company would receive payment from the homeowner once the mortgage has been modified.

These are just a few of the issues with SB 94. The law is attempting to protect homeowners, but is actually protecting the lender guaranteeing that homeowners will not be adequately represented when dealing with the lender. The lenders will take advantage of this and will offer homeowners loan modifications that do not help their situation.

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About the Author

August Blass

Stephen Hoshida is the Manager of the NLA Legal Portal. Mr. Hoshida is responsible for design, research, and management of all information... (show bio)