Money Management – Thought Free Meditation http://thoughtfreemeditation.com/ Sun, 25 Sep 2022 11:08:28 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://thoughtfreemeditation.com/wp-content/uploads/2021/06/thought-free-meditation-icon.png Money Management – Thought Free Meditation http://thoughtfreemeditation.com/ 32 32 Check it out: cake molds and other unexpected loans from the library https://thoughtfreemeditation.com/check-it-out-cake-molds-and-other-unexpected-loans-from-the-library/ Sun, 25 Sep 2022 10:00:00 +0000 https://thoughtfreemeditation.com/check-it-out-cake-molds-and-other-unexpected-loans-from-the-library/

By Jessica Hermiller
Director of Bluffton Public Library

September marks a special month in libraries – it’s the National Library’s pay-per-view month.

Anyone can benefit from a library card and registration is simple. Adults, go to the library and bring photo ID and proof of address. Anyone under the age of 18, bring a parent/guardian and make sure they have their photo ID and proof of address.

When you have a library card, you can view our extensive collection of materials! We offer books (of course) but many other things, such as:

Audio books (books on CD, MP3 or digital player)

BluRays and DVDs

Comics and graphic novels

Magazines and newspapers

Music

Having a library card also opens up possibilities outside of the library. You can use your card at home or on the go and enjoy a variety of databases, access to the Ohio Digital Library (eBooks, audiobooks, magazines, and comics), and services such as language applications. Still can not find what you are looking for ? We can borrow the article from another library.

Each library has its own collection of materials, but it may also have its own collection of unique items, some of which may be requested and some of which may be reserved for local members (depending on whether they are safe to ship). Cake pans, Ellison cutouts, book club kits and video games are common requests.

When you search the library catalog, if you use the term [realia] in the search bar you will see a variety of options – you can also use a search term for a specific item, such as cake pans, games consoles or kits. A few libraries have collections of toys and games for their local patrons, some have educational kits for classrooms and one even has a light therapy lamp! Our library has a special collection of video games, big books, one-off comic book issues, early learning kits, and Ellison cutouts.

Be sure to drop by the library in September (or any other month) and sign up for a library card. By using our library services, you are helping our community grow, learn and create – we hope to see you soon.

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The state of education, loans and more…see what’s happening in the Allen community | American Allen https://thoughtfreemeditation.com/the-state-of-education-loans-and-more-see-whats-happening-in-the-allen-community-american-allen/ Sat, 24 Sep 2022 14:44:00 +0000 https://thoughtfreemeditation.com/the-state-of-education-loans-and-more-see-whats-happening-in-the-allen-community-american-allen/

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OPINION: Me against my student loans | Opinion https://thoughtfreemeditation.com/opinion-me-against-my-student-loans-opinion/ Thu, 22 Sep 2022 14:30:00 +0000 https://thoughtfreemeditation.com/opinion-me-against-my-student-loans-opinion/

I am an adult of age (whether in spirit also remains to be determined). It’s known and accepted by everyone, including my parents, but there are still some things that my mom doesn’t let me forget despite this new phase of my life. Un: She brought me into this world and, if she needed to, could take me out of it. Two: it would be wise to portray her well as someone she raised, or as she puts it, “don’t embarrass me there.” And three: I have a decently sized debt hanging over me, waiting to be taken care of after I graduate in December.

She will bring this into our conversations every few months or so and urge me to think about how I can repay the loans I have taken out. I never really get an answer, so I rely on my nonverbal communication skills—heavy sighs, low grunts—just to stop her. I know she won’t.

It bothered me until the sight of the end of my college experience began to creep into my life. Today, it’s squarely in plan, but it’s not exactly centered. Soon, however, a director will wave his hand, signaling him to go up some stairs. In a few months, I’ll be done, and I’ll have a degree and tens of thousands of dollars in loans to prove it.

When President Joe Biden announced plans to forgive up to $20,000 in student debt for American borrowers, my mom and I talked about what it meant to me. Sure, that’s a reduced amount, but it only reduces a dark 6-foot figure to, like, 5-foot-10. My debt is basically the average size of an American man. The match was not canceled. I’m always being waved on the mat, and I have to find a way to pin it down. For reference, I am only 5ft 3in.

Writing this has been easy so far, but now I’m getting nervous. At some point, I will have to bring up the topic of how I accrued this undisclosed amount of debt. I can already see the comments on Facebook about people who got away with it and paid for their education without any help, especially government help. I imagine that if the text could speak, the last part would be whispered. Who is to blame besides me and my lack of financial literacy? they will ask. They will ignore my words that blamed no one, and they will also ignore any evidence that larger systemic issues may be at play for the $1.75 trillion student loan debt this country has.

To them, I’m just a black girl complaining and angry that I couldn’t get an all-expenses-paid trip to higher education. Maybe that’s right. What’s not fair is that student loan debt disproportionately affects black students, making them the racial group most likely to have higher student loan debt and not be able to repay it. What’s not fair is that without at least a bachelor’s degree, people will earn an average of $30,000 a year, according to the Association of Public and Land-Grant Universities. For those who borrowed large sums just to earn a coveted degree that was supposed to propel them toward upward economic mobility, a good portion of their post-graduation earnings will now have to be repaid.

There’s no way the level playing field will ever be level as long as there are people drowning in debt. Up to $20,000 forgiven is a good start, but it’s not a solution.

I would not write this without having taken out loans. It took a lot to go to a private school in my first two years of college, but since the transfer, I’ve always found myself having to use them to pay my rent. I couldn’t dedicate myself to learning to be a journalist without doing it.

In addition to loans, I have a job and scholarships, so I have the privilege of not having to worry about money now. However, I cannot deny that the fight that I and so many others have fought and will have to fight to repay our loans is frightening. And after December, I’ll have new access to a part of our world that often feels like it’s betting people like me to lose.

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VA Loan Vs. Conventional Loan: Your Guide https://thoughtfreemeditation.com/va-loan-vs-conventional-loan-your-guide/ Thu, 22 Sep 2022 05:11:10 +0000 https://thoughtfreemeditation.com/va-loan-vs-conventional-loan-your-guide/

What are the main differences between VA loans and conventional loans?

Conventional loans generally have stricter loan requirements than VA loans and other government-backed loans — such as FHA and USDA loans — because lenders assume most of the risk with conventional loans.

Let’s dive deep into the different requirements for VA and conventional loans so you can decide which mortgage product is best suited to your home buying needs and goals.

VA Loan Vs. Conventional Loan: Property Type

One of the biggest differences between VAs and conventional mortgages is the type of property you can finance with each type of home loan.

  • VA Loans: According to the VA loan occupancy requirements, if you are financing with a VA loan, the home or property must serve as your primary residence. Although you cannot use a VA loan to directly purchase a second home, investment property, or vacation home, you can purchase a multi-family property of up to four units for rent – as long as you occupy one of the units as Principal residence. .
  • Conventional loans: Conventional loans do not require you to occupy the home you are buying as your primary residence. This means you can use a conventional mortgage to buy a second home, vacation home, rental home, or other investment property with no strings attached, as long as your lender approves it.

VA Loan Vs. Conventional Loan: Credit Score

Because your credit score represents how well you’ve managed your debt, mortgage lenders rely on this three-digit number to assess your risk as a borrower.

And while the VA doesn’t set a minimum credit score requirement, you’ll still need to meet your lender’s minimum credit score requirement, no matter what loan product you’re applying for.

Here are the credit score requirements for conventional and VA loans:

  • Conventional loans: The minimum benchmark credit score varies by lender, but in general you will need a score of at least 620 to qualify for a conventional loan.
  • VA Loans: Since the government insures VA loans, lenders may offer lower credit score requirements than conventional loans. Some lenders may still require a score of 620 credits, but a score of 580 may qualify you for a VA loan with Rocket Mortgage®.

VA Loan Vs. Conventional Loan: Down Payment

One of the coolest features of VA loans is that they generally don’t require a down payment, although some lenders may require a small down payment if your credit rating is low.

For conventional loans, most lenders will require you to pay at least 3% of the purchase price, depending on your financial situation and credit score. However, if you make a down payment of at least 20%, you can also waive paying for private mortgage insurance (PMI) at the start of your loan term.

VA Loan Vs. Conventional Loan: Mortgage Insurance

Depending on your loan type, down payment amount and other factors, lenders may charge you mortgage insurance to offset the risk of default. Mortgage insurance can be a one-time cost you pay at closing, a regular fee built into your monthly mortgage payment, or both.

Let’s look at the mortgage insurance requirements for conventional versus VA loans:

  • Conventional loans: Lenders will require you to pay private mortgage insurance (PMI) on a conventional loan until you reach 20% of the equity in your home. Although the exact amount varies from lender to lender, the PMI is generally 0.1% to 2% of your loan amount per year. Once you reach 22% of your home’s equity, your lender should automatically remove PMI from your monthly payments, but you can ask them to do so once your home’s equity reaches 20%.
  • VA Loans: Although VA loans do not require mortgage insurance, they do require you to pay a VA financing fee, which is an upfront cost of 1.4% to 3.6% of the loan amount. Like mortgage insurance, finance charges offset the potential risk of default and can be rolled into the total loan amount.

PV Loan Vs. Conventional Loan: Debt to Income Ratio (DTI)

Your debt-to-income ratio (DTI) is a percentage representing the portion of your gross monthly income spent on recurring monthly debts such as rent, student loans, auto loans, and credit card payments.

Your lender reviews your DTI to determine how likely you are to make your mortgage payments on time each month. The lower your DTI, the less risk you pose to your lender.

  • VA Loans: Although VA loans do not have specific requirements for DTI, most lenders prefer a DTI of 41% or less. Lenders are also required to review compensating factors — such as your credit score, cash flow, or military benefits — so you can potentially qualify with a DTI above 41%.
  • Conventional loans: While most lenders prefer your DTI to be below 40%, you could qualify for a conventional loan with a DTI as high as 50% – although your lender will likely increase your mortgage interest rate to compensate for the risk that your high DTI may pose.

VA Loan Vs. Conventional Loan: Mortgage Rates

Housing market conditions, inflation and even the Federal Reserve are all factors that affect current mortgage rates. The interest rate on your personal mortgage will also be influenced by the amount of your loan, your down payment and your credit score, as well as whether you are applying for an adjustable rate mortgage (ARM) or a fixed rate mortgage. fixed.

VA mortgages generally offer lower interest rates than conventional loans, with a percentage difference of 0.25% to 0.42%. For example, for a 30-year fixed rate loan ending at the end of July 2022, the average mortgage rate for a VA loan was 5.375% compared to 5.5% for a conventional loan of the same duration.

However, if you took out a 15-year fixed-rate conforming loan at the end of July 2022, you might have locked in an interest rate as low as 5.125% in exchange for a higher monthly payment.

VA Loan Vs. Conventional Loan: Loan Limits

For a single-family home in most US counties in 2022, you can use a conventional loan to finance a home for up to $647,200. The conforming loan limit increases to $970,800 for high-cost areas in California, Alaska, Hawaii and other states. If your property exceeds the conforming loan limits for your area, you will need to use a jumbo loan – a type of conventional non-conforming loan.

VA loans technically have no loan limits. Instead, they have VA loan rights. If you’ve never used your VA loan benefit — or if you’ve fully repaid a VA loan — you’re fully entitled, which means the VA will repay up to 25% of any loan amount you’re approved for. .

However, if you are making payments on a VA loan or have defaulted on a VA loan, you have partial entitlement. You can still buy a home with a VA loan using a partial entitlement. The VA, however, will only guarantee your loan up to the conforming loan limit minus the entitlement you are using.

VA Loan Vs. Conventional Loan: Closing Costs

Closing costs are various fees you pay to your lender to process your loan. These costs include origination fees, home appraisal fees, title search fees and more.

While VA loans cap their origination fees at 1% of the total loan amount, those fees also tend to range only from 0.5% to 1% for conventional loans. Appraisal fees for conventional loans are generally lower, typically ranging from $300 to $400 for a single family home versus $425 to $875 for a VA appraisal. It is important to note that the appraisal fee for a loan financed home can cost north of $600 or even $2,000 depending on where you live, the size of your home, etc.

Overall, you’ll typically pay 3% to 5% of your loan amount to close your VA loan, and you’ll likely pay 2% to 6% to close your conventional loan.

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September 19, 2022 – Loan Rate Schedule – Forbes Advisor https://thoughtfreemeditation.com/september-19-2022-loan-rate-schedule-forbes-advisor/ Mon, 19 Sep 2022 14:13:17 +0000 https://thoughtfreemeditation.com/september-19-2022-loan-rate-schedule-forbes-advisor/ Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

The average interest rate on 10-year fixed-rate private student loans fell last week. For many borrowers, that means rates continue to be low enough to make private student loans a decent option, especially if you have good credit.

The average fixed interest rate on a 10-year private student loan was 7.18% from September 12 to September 17. This is for borrowers with a credit score of 720 or higher who have prequalified in Credible.com’s student loan marketplace. The average interest rate on a five-year variable-rate loan was 7.81% among the same population, according to Credible.com.

Related: Best Private Student Loans

Fixed rate loans

Last week, the average 10-year fixed rate fell 0.45% to 7.18%. The previous week, the average was 7.63%.

Borrowers looking for a private student loan can now qualify for a higher rate than they would have at this time last year. At this time last year, the average fixed rate on a 10-year loan was 5.61%, 1.57% lower than the current rate.

A borrower financing $20,000 in private student loans at today’s average fixed rate would pay about $234 per month and about $8,089 in total interest over 10 years, according to Forbes Advisor’s Student Loan Calculator.

Variable rate loans

Average variable rates on five-year loans rose last week from an average of 5.88% to 7.81%.

Unlike fixed rates, variable interest rates fluctuate over the term of the loan. Variable rates can start lower than fixed rates, especially during times when rates are generally low, but they can increase over time.

Private lenders often offer borrowers the option of choosing between fixed and variable interest rates. Fixed rates may be the safest bet for the average student, but if your income is stable and you plan to pay off your loan quickly, it might be beneficial to choose a variable loan.

Let’s say you financed a loan of $20,000 over five years with a variable interest rate of 7.81%. You would pay around $404 on average per month. You would pay approximately $4,223 in total interest over the life of the loan. Keep in mind that since interest is variable, it can fluctuate up or down from month to month.

Related: How to get a private student loan

How to Compare Private Student Loans

First, look at the overall cost of the loan. Consider both the interest rate and the fees. Also, look at the type of help each lender offers if you are unable to pay your payments.

Keep in mind that the best rates are only available to those with good or excellent credit.

How much should you borrow? Experts generally recommend not borrowing more than you will earn in your first year out of college. How much can you borrow? Some lenders cap the amount you can borrow each year, while others don’t. When shopping for a loan, let lenders know how the loan is disbursed and what costs it will cover.

Apply for a private student loan

If you meet the annual borrowing limits for federal student loans or don’t qualify, private student loans may be a good choice. But consider a federal student loan as your first option since interest rates are generally lower. You will also benefit from more liberal repayment and forgiveness options with federal student loans.

Obtaining a private student loan usually involves applying directly through a non-federal lender, such as a bank, credit union, or online entity. You may also be able to obtain a private student loan through a nonprofit organization, state agency, or college.

Keep in mind that undergraduates with limited credit histories often need a co-signer who can meet the borrowing requirements of the lender.

When applying for a private student loan, consider the following:

  • Your qualities. Private student loans are credit-based. Lenders typically require a credit score above 600. This is where having a co-signer can be particularly beneficial.
  • Where to apply. You can apply directly on the lender’s website, by mail or by phone.
  • Your choices. Look at what each lender offers and compare the interest rate, term, future monthly payment, origination fees and late fees. Also check to see if the lender offers a co-signer release so that the co-borrower can potentially opt out of the loan.

How your interest rate is determined

The rate you receive varies depending on whether you get a fixed or variable loan. Rates are partly based on your creditworthiness – those with higher credit scores often get the lowest rates. But your rate is also based on other factors. Credit history, income, and even the degree you’re working on and your career can all play a part.

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Financial products to obtain up to $224 million in loans for the acquisition of real estate https://thoughtfreemeditation.com/financial-products-to-obtain-up-to-224-million-in-loans-for-the-acquisition-of-real-estate/ Mon, 19 Sep 2022 03:36:02 +0000 https://thoughtfreemeditation.com/financial-products-to-obtain-up-to-224-million-in-loans-for-the-acquisition-of-real-estate/







Newswires MT 2022

All news about FINANCIAL PRODUCTS GROUP CO., LTD.

2022 sales 50,500M
353 million
353 million
2022 net income 7,000 million
49.0M
49.0M
Net debt 2022

PER 2022 ratio 16.1x
2022 return 3.02%
Capitalization 113B
790 million
790 million
capi. / Sales 2022 2.24x
capi. / Sales 2023 2.02x
# of employees 336
Floating 66.1%

Chart FINANCIAL PRODUCTS GROUP CO., LTD.


Duration :

Period :




Financial Products Group Co., Ltd.  Technical Analysis Chart |  MarketScreener

Trends in Technical Analysis FINANCIAL PRODUCTS GROUP CO., LTD.

Short term Middle term Long term
Tendencies Bullish Bullish Bullish




Evolution of the income statement

Sale

To buy

Medium consensus TO BUY
Number of analysts 1
Last closing price ¥1,323.00
Average target price JPY1,150.00
Average Spread / Target -13.1%


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Financial regulators aim to ‘buy now, pay later’ https://thoughtfreemeditation.com/financial-regulators-aim-to-buy-now-pay-later/ Fri, 16 Sep 2022 21:07:00 +0000 https://thoughtfreemeditation.com/financial-regulators-aim-to-buy-now-pay-later/

Millions of Americans have adopted the practice of buying items at low cost and paying for them in installments, a model increasingly popular among retailers known as “buy now, pay later” loans. But many consumers struggle with the “pay later” part of the equation.

While these loans can help consumers purchase goods they would otherwise struggle to afford, they are largely unregulated and can lead to problems down the road. To prevent people from getting burned, the federal Consumer Financial Protection Bureau plans to develop rules for buy now, pay later lenders.

“Buy now, pay later is a rapidly growing type of loan that is closely replacing credit cards,” CFPB Director Rohit Chopra said in a statement Thursday. “We will work to ensure borrowers have similar protections whether they are using a credit card or a buy now, pay later loan.”

Buy now, pay later loans have grown in popularity alongside the rate of inflation in the United States, with some borrowers using them to purchase basic necessities such as groceries, gasoline and pet care products. company. Loans are generally interest-free and range from $50 to $1,000 and are repaid in four installments. Yet, although the loans are interest-free, they are subject to late fees if a borrower misses a payment.

In 2021, buy-now-pay-later loans totaled $24 billion, up from $2 billion in 2019, according to a CFPB report. The payment option has become ubiquitous in stores and online, forcing regulators to catch up. At the same time, the agency has seen a steady increase in the percentage of borrowers falling behind.

“To be quite frank, regulation hasn’t kept up with fintech,” Associated Press reporter Ken Sweet told CBS News.


MoneyWatch: Debt Cancellation and Inflation

06:09

While the loans are often marketed as a “zero risk” credit option, regulators note that the loans don’t have the same protections as traditional credit products. Borrowers could also be forced to make automatic payments or be subject to multiple late fees if they miss a single payment.

“Digital Watch”

According to the CFPB, providers of buy-now, pay-later loans, such as Affirm, Afterpay and Klarna, could also collect and sell consumer data, potentially threatening consumer privacy.

“[W]We find that companies that buy now, pay later are building business models dependent on digital surveillance. In some ways, these companies aren’t just lenders, they’re also advertisers and operators of virtual malls,” Chopra said. “Because they are deeply integrated as a payment mechanism for e-commerce, buy now, pay later, lenders can collect extremely detailed information. information about your buying behavior, unlike traditional cards.”

Another major concern for regulators: buy now, pay later. The loans are designed to encourage consumers to spend – and borrow – more. Meanwhile, lenders don’t provide data to major credit reporting agencies, making it easy for consumers to take out loans they can’t afford to repay and rack up debt.

In other words, buying now and paying later can fuel unhealthy financial habits that seriously threaten consumers’ financial well-being.

The CFPB said it was working on rules that would subject lenders buy now, pay later to the same type of oversight as credit card companies. It also examines the extent of data collection from lenders and works to develop credit reporting practices that reduce the risk of borrowers accumulating too much debt.

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Underserved businesses and individuals in Arkansas have the opportunity to grab a portion of a $1 billion investment a Mississippi credit union is planning for a five-state region in the Deep South.

The Hope Credit Union of Jackson, Mississippi, announced Thursday that it will pour $1 billion into Arkansas, Alabama, Louisiana, Mississippi and Tennessee to support more than 150,000 homebuyers, businesses and families.

“It will be open statewide,” Charity Hallman, senior vice president of community and economic development for Hope in Arkansas, said Thursday, adding that loans will be “demand-driven” and no specific dollar amount. is reserved for each state.

It will be the credit union’s biggest investment since it began operations in 1994, Hallman said. “It’s going to be very catalytic for Hope,” she said. “We’ve had a cohesive mission of serving underserved communities to help close social, racial, and economic gaps. This allows us to enhance that work.”

Hope, which is a Black and women-owned community development financial institution, will use a $92.6 million investment from the U.S. Treasury Department to leverage and attract private funding for the effort.

The organization plans to fund businesses, homebuyers, affordable rental housing, healthcare facilities, schools, and nonprofit service providers, among others, over the next decade.

“With this historic Treasury investment, Hope will ensure that for families, entrepreneurs and communities in the Delta, Black Belt and rural and inner city areas of the Deep South, access to affordable financial tools will only be no longer a barrier to their success,” Bill Bynum, chief executive of the lender, said in a statement announcing the program.

“This investment allows us to continue what we’ve been doing, just at greater volume,” Hallman said. “This allows us to increase our loan size and lend to more people on an annual basis than ever before.”

The organization, Hallman said, is a “relationship lender” that provides technical support and assistance to borrowers who may have difficulty qualifying for loans.

Hope has three offices in Arkansas, two in Little Rock and one in West Memphis. It has more than 36,000 members in the five states where it operates, including more than 3,600 in Arkansas.

More information about the program and applications can be found at hopecu.org.

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Oregon dentist pleads guilty to stealing millions in COVID-19 relief loans https://thoughtfreemeditation.com/oregon-dentist-pleads-guilty-to-stealing-millions-in-covid-19-relief-loans/ Tue, 13 Sep 2022 22:48:55 +0000 https://thoughtfreemeditation.com/oregon-dentist-pleads-guilty-to-stealing-millions-in-covid-19-relief-loans/

PORTLAND, Ore. (KOIN) — On Sept. 13, a former West Linn dentist pleaded guilty to wire fraud and aggravated identity theft in federal court to stealing nearly $11.5 million in funds allocated to the COVID-19 relief.

Salwan Adjaj submitted multiple fraudulent loan applications to the Small Business Administration from September 2020 to at least May 2021, federal prosecutors say, and stole funds from the Economic Impact Loan and Paycheck Protection Program that were authorized by the Coronavirus Aid, Relief, and Economic Security Act which was intended to support small businesses affected by the pandemic.

Adjaj falsified certain details to impersonate several businesses in need of assistance, such as names, employer identification numbers, start dates and locations, prosecutors said. Although most of those requests were sent under other people’s names, he often registered his home address as the company’s mailing address, authorities said. Each application was reportedly submitted from Adjaj’s workplace IP address.

The SBA rejected most of its EIDL applications, so Adjaj reportedly focused on the PPP program and the Restaurant Revitalization Fund, which provides economic relief to businesses in the food and beverage industry. In May 2021, he submitted requests on behalf of fictitious restaurants he believed were located in Florida, prosecutors said.

Adjaj was formally charged with a criminal complaint of wire fraud and aggravated identity theft on October 14, 2021. Two months later, on December 14, he was arrested for an alleged violation of provisional release. The following day, he received an order stating that he would be detained pending further legal proceedings.

Additionally, Adjaj pleaded guilty to illegally distributing thousands of controlled substances in a separate criminal case on July 13. The former dentist confessed to using his profession to access the substances, prosecutors said.

He could be sentenced to a maximum of 22 years in prison, receive a $250,000 fine and a three-year supervised release for his COVID-19 relief fraud case. For his drug offenses, Adjaj faces a maximum sentence of 10 years in prison, a $500,000 fine and three years of probation.

U.S. District Court Judge Michael W. Mosman will sentence Adjaj for the two federal cases on Dec. 6. As stated in his plea agreement, Adjaj will compensate his crimes against the SBA and victim lenders with no less than $10.5 million.

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Lending standards tighten as appetite for riskier loans declines https://thoughtfreemeditation.com/lending-standards-tighten-as-appetite-for-riskier-loans-declines/ Tue, 13 Sep 2022 15:07:59 +0000 https://thoughtfreemeditation.com/lending-standards-tighten-as-appetite-for-riskier-loans-declines/

Lending standards tightened in August amid a deteriorating economic outlook and signs of slowing house price growth.

The Mortgage Credit Availability Index (MCAI) edged down 0.5% to 108.3 in August from the previous month, according to the Mortgage Bankers Association (MBA). A decline in the MCAI, pegged at 100 in March 2012, indicates that lending standards are tightening while an increase in the index suggests an easing in credit.

“The availability of mortgage credit declined slightly in August as investors reduced their offerings of ARM and non-QM loan programs,” said Joel Kan, associate vice president of economic and industry forecasts at MBA. Kan added that some lenders continue to streamline their operations by dropping certain loan programs to simplify their offerings, with origination volume expected to decline about 48% to $2.3 billion in 2022 from $4.4 billion. last year.

“With a deteriorating economic outlook and signs of slowing house price growth, the appetite for riskier lending programs has been reduced,” Kan said.

The conventional MCAI, which does not include government-guaranteed loans, fell 1%, and the government MCAI, which reviews FHA, VA and USDA loan programs, remained essentially unchanged. Among the indices that make up the conventional MCAI, the MCAI Jumbo fell 0.7% and the MCAI Compliant fell 1.2%.

The drop in the availability of mortgage credit follows the volatility of mortgage rates which ended August at 5.8%, according to Black Knightof the Optimal Blue OBMMI pricing engine before falling back in July. With the fifth interest rate hike expected this month after the Federal Free Market Committee (FOMC), the 30-year fixed rate jumped to 5.98% on September 12.

The decrease in the availability of mortgage credit was offset by a slight increase in the new home equity line of credit (HELOC), a revolving line of credit that allows borrowers to draw money from the line of credit up to to a predefined limit. While workable equity, defined as the amount an owner can borrow against while maintaining a 20% equity stake, is expected to decline this quarter, it hit a record $11.5 trillion in the prior quarter.

“With overall home equity still at high levels, HELOCs could benefit borrowers who may want to forgo their current low mortgage rate, but want to use their home equity to support other spending plans. “, said Kan.

Amid a rapid decline in mortgage lending, non-bank lenders capitalized on rising home equity, a space that was dominated by custodian banks.

In August, rocket mortgage and his wholesale arm Rocket Pro TPO started offering home equity loans and Guaranteed rate introduces a digital HELOC. Companies considering deploying HELOC products include loanDeposit and New residential investment company.

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