Home Equity Loan

Don’t make HEL hell. Home Equity loan or HEL is a matter of interest, as it helps one to get her/his dream home.

Especially first home-buyers are often so excited to get into their new home that they failed to understand the entire picture. I mean the strain of high monthly payment.

Everyone knows that a home equity loan is a type of loan in which the borrower uses the equity in their home as collateral.

I am giving a very brief list of possible fees that may apply to your home equity loan such as appraisal fees, originator fees, title fees, stamp duties, arrangement fees, closing fees, early pay-off and other costs are often included in loans. There may be other types of fees.

There are broadly two types of home equity loans, namely:

• Closed end: (The borrower receives a lump sum at the time of the closing and cannot borrow further.)
• Open end: (In this case the borrower can choose when and how often to borrow against the equity in the property, with the lender setting an initial limit to the credit line based on criteria similar to those used for closed-end loans.)

There are many places to go for getting a home loan to buy your own house. Trying your own bank is always helpful, if your credit is good. The problem arises if your credit is not so good. Though there are many organizations that are offering loans of every type including the home loan. But you need to carefully read and clearly understand all the terms & conditions, mentioned. Sometimes interest rate is so high and placed so tactfully with introductory lower interest rates that you’ll be unable to live peacefully in your new home.

You must go through application for several home loans at different lending organizations. More you check better will be your idea of how much money you actually have available to you.

It’s a good thing, IFF carefully tackled.

Feel free to leave comments, if you have any question or doubt. I and my expert friends will answer them.

Cya soon.

City Bank Stole from It’s Customers

Three years of investigation reveals that City Bank was stealing from Its customers. It’s a shame.

I was really thinking of writing a post on credit card traps. And see. I already got a news to share with you. City Bank has stolen approximately $14 million from it’s customer. That’s why I always say to check credit card report and to be cautious about their traps. City bank was running a computerized process, called “credit sweep” to automatically remove credit balance.

Oh! my God!

From the press release by the California attorney general: (http://ag.ca.gov/newsalerts/release.php?id=1602) :

California Attorney General Edmund G. Brown Jr. today announced that he has reached a settlement with Citibank after a three-year investigation into the company’s use of an illegal “account sweeping” program. Nationally, the company took more than $14 million from its customers, including $1.6 million from California residents, through the use of a computer program that wrongfully swept positive account balances from credit-card customer accounts into Citibank’s general fund.

“The company knowingly stole from its customers, mostly poor people and the recently deceased, when it designed and implemented the sweeps,” Attorney General Brown said. “When a whistleblower uncovered the scam and brought it to his superiors, they buried the information and continued the illegal practice.”

Between 1992 and 2003, Citibank employed a computerized “credit sweep” process to automatically remove positive or credit balances from credit-card customer accounts. An account could show a credit balance if a customer double-paid a bill or returned a purchase for credit. The credit sweeps were done without notifying the customer and without regard for whether the customer had any unpaid balances or other charges owed to Citibank.

The credit sweeps targeted more than 53,000 customers nationwide. All of the affected accounts were in a recovery status, which includes accounts of customers who have died, sought bankruptcy protection, or been the target of litigation or other collection efforts by Citibank.

In July of 2001, a Citibank employee uncovered the practice and brought it to the attention of his superiors. The employee was later fired for discussing the credit sweeps with an internal audit team. In the words of a Citibank executive, “Stealing from our customers is a business decision, not a legal decision.” The same executive later said that the sweep program could not be stopped because it would reduce the executive bonus pool.

The Attorney General launched its investigation of Citibank in 2005 to determine whether the company violated the California False Claims Act by filing false holder reports with the California State Controller that omitted any reference to the swept funds. The 3-year investigation led to today’s settlement.

You may read the full story at the above link, specified or you may download that in PDF format: News Release: City Bank Was Stealing from Its Customers .

Check your credit report and synchronize that with your purchases. If you can figure out any dispute or forgery, let our readers know.

$85 billion loan to Save AIG

US Federal Reserve Issues $85billion loan to Save AIG.

The US Federal Reserve Board has decided that the Federal Reserve Bank of New York will lend up to $85 billion to the American International Group (AIG) in a plan aimed at saving the insurer from a “disorderly failure” that could wreak economic havoc.

The Fed said in return for the loan, the government will receive a 79.9 percent equity stake in AIG.

The loan will facilitate a process under which AIG will sell certain of its businesses in an orderly manner, with the least possible disruption to the economy.

“AIG, is considering selling more than 15 businesses, including its aircra’FT’ leasing unit, a stake in a large US re-insurer and billions of dollars in properties in an effort to repay USD 85 billion government loan and secure its future as an independent company,” the ‘Financial Times’ reported.

In latest move in changing economy period,   Barclays, a UK based Bank is in process of buying Lehman’s US investment banking and capital markets businesses for $250m.

I read an interesting news at CNN that shows the conversation, which appeared on “Larry King Live”.
Here Suze Orman said,

“AIG is an international giant that just doesn’t have ramifications here in the United States. It is worldwide. They’re like in 130 countries. They have 100,000 employees. Everybody has an AIG insurance policy. So in this particular case, my opinion, thank God, they bailed out AIG.”

Bailing out AIG may be helpful but this upsets Republican lawmakers. You may read what they are saying.

It’s really a crisis period for all as everyone is connected by a finance chain. What ever the outcome is will affect your personal finance directly or indirectly.