Archive for August, 2008
Posted on August 31, 2008 10:16:58 AM
Options Â? Your Choice In The Stock Market
By: Daniel Kertcher
As you read this stock market article, you have a few choices. You could choose to continue reading, or you could choose to stop reading it and watch t.v. It?s your option. You don?t have the obligation to go and watch t.v, just the option.
For the average person, the share market is the most visible form of financial market, and perhaps the only market in which they have some direct contact. The options market is usually seen to be too risky or too complicated. Well, the truth is, the options market provides many benefits to share investors and traders, for those that spend some time learning what options have to offer.
Options warrant attention
There have been options traded on the Australian share market since the 1960?s, and they are still big business today. Exchange traded options (ETO?s) became very popular in the 70?s, as these allowed a greater number of traders to enter the market. So why are options so popular? Options provide a variety of benefits over ordinary shares, which, when used correctly, can drastically reduce the risks involved in owning shares.
But before we understand how options can help us, it is necessary to know what an option is.
An option is a contract between two parties regarding the price direction of a particular share. One party believes the price of the share is going to rise in a certain time, the other believes the price is going to fall in that time. Depending on which direction each party believes the price is going to go, they will either buy or sell an option.
The person who purchases the option has the right but not the obligation, to buy or sell a set number of shares, at a pre-determined price on or before a set date in the future.
As you can purchase the right to either buy or sell shares, there are thus two types of options, a Call option and a Put option. A Call option gives the owner the right to BUY shares, whereas a PUT option gives the owner the right to SELL shares.
For example, let?s say that you believe that XYZ limited shares are going to rise in value over the next month. They are currently trading at $1.00 per share. You can either purchase 10,000 shares right now, and invest $10,000 or you could buy the right to purchase them at $1.00, one month from now. For this right, you will pay premium. The premium you will pay will be approximately 4 cents per share.
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04 x 10,000).
If the share price of XYZ goes up to $1.20 in the month, then you can exercise your right to buy the shares at $1.00. You will therefore make a profit per share of 16 cents ($0.20 profit ? $0.04 premium). With 10,000 shares, you will make a profit of $1,600, or 400% on your original investment.
Had you invested $10,000 in the first place, you would have only made $2,000, or 20% profit.
At the same time, had the price fallen below $1, say to $0.80 cents, then you would not exercise your right to buy the shares and you would walk away, losing only your $400. You have the option to buy the shares, not the obligation. But, if you had bought the shares, you would have lost $2,000, or 20% of your original capital.
Options can act as a risk management tool. That is, you can limit your losses, whilst still taking advantage of the share price increases.
One of the major advantages over purchasing shares outright, is that with options, you can also buy the right to sell, in case the share price falls. Therefore, you can profit from the market if it is rising or falling in value!
Options are a little more complicated than shares to understand, but with a little practice, you will discover that options are a fantastic financial instrument. With options you can ?insure? your share portfolio, generate a monthly income and return 100% and more on trades. You just have to know how. The Platinum Pursuits report will feature many articles on options and we welcome you to attend our monthly seminars, where we will teach you how to profit with options.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9612.shtml
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Posted on August 30, 2008 10:00:41 AM
Check A Payment Protection Policy Very Carefully Before Buying
By: Simon Burgess
A payment protection policy is taken out by those who have credit repayments to make each month and who wish to protect those repayments. A policy can be taken out to cover against being unable to work if you should have an accident or get ill, or become unemployed through no fault of your own.
However, there are certain conditions that could mean a policy would not benefit the individual. Due to the exclusions present in all policies designed to safeguard payments, you have to check the cover thoroughly before taking it out. Those individuals who suffer from a pre-existing illness, are of retirement age, only work part-time or are self-employed would certainly have to read the small print very carefully. The cover can be valuable and give a much needed income, but only if the policyholder meets the set criteria. It is also worth nothing that statistics show that only 4% of those who take out a policy actually claim on it. Furthermore, 25% of those who do make a claim find their claim rejected by the provider.
You should also make sure that you are not covered for being unable to work by some other means. Around 85% of employers will actually offer much more than the statutory sick pay they have to pay out. Those who are extremely lucky will find their employers will pay out a full wage for a certain period of time. This of course means if you are able to get back to work quickly you would not need a protection policy.
If you believe protection cover would benefit you then go with a standalone provider for a quote. Protection products can be extremely expensive but by choosing to shop around for your quotes with an independent provider you can save as much as 80% on the premiums. While you can take cover alongside the loan at the time of borrowing this could mean you would pay five times more than you would if you shopped around.
The high street lender can play many tricks when it comes to offering protection.
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This means that instead of quoting you a monthly premium for the cover you will be paying interest on it. On the other hand, a standalone provider will give you a quote for monthly premiums. This is based on the monthly amount of your debt and your age at the time of applying. In some cases the savings you make are immense.
Another huge benefit of going with a specialist provider for your protection quote is that they are more ethical. They will ensure that consumers have access to the FAQs regarding a policy and will explain the technical jargon in plain English, which takes the confusion out of buying a policy.
The majority of policies offered by an independent payment protection specialist will begin to provide the policy holder with a tax-free income from between the 30th and 90th day of being incapable of working. The policy gives peace of mind and allows the individual to relax and concentrate on getting well without financial worries. The pay out would last between 12 and 24 months depending on the terms set out by the provider. You can find the terms and conditions in the key facts that are supplied by the provider on their website before signing up for cover. This makes comparing and deciding if a policy is value for money so much easier.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9746.shtml
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Posted on August 29, 2008 09:46:38 AM
Quick loans Â? preparation before applying for a loan
By: David Lynes - Loans4
It is important that you do your homework before you make an application for a loan, as this will not only help to ensure affordability for you, but could also help to speed up the whole process, enabling you to get the loan you need without any unnecessary delays. By doing your research you will find that the whole loans process can be faster and easier, and you can get the money that you need far more quickly.
The type of preparation that you need to make depends on the type of loan that you are applying for. There are both secured and unsecured loans available depending on your needs and circumstances. Secured loans are loans that are secured against an asset, which is usually the home, and are therefore available to homeowners only. An unsecured loan is based on contract and not secured against any asset, and these loans are available to non-homeowners as well as homeowners, but you will usually need very good credit to get an affordable unsecured loan.
Whether you are applying for a secured or an unsecured loan conducting some research into the different products available is vital in order to increase affordability. You should browse a range of loans from a variety of lenders to find deals that offer competitive rates and suitable terms. You can do this with ease and speed online, and you can also make your application online, which will help to speed things up if you are looking for quick loans. You may want to consider using a specialist broker who can do the legwork for you, as this can save you time and hassle, and can increase your chances of finding a suitable loan.
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This includes things such as payslips and proof of address. If you are looking to take out a secured loan you will need to know the value of your property, and therefore it is a good ideal to get a valuation done in advance so that you know how much equity you have in your property.
You also need to make sure that you check the eligibility requirements from one lender to another before you decide which loan to apply for. This will also help to speed things up, as you will not be wasting your time applying for loans that you are not even eligible to take out. Again, you can do this online with ease and speed, or you can simply use the services of a broker, who will be able to determine which loans you are eligible for based on the information that you provide.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9634.shtml
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Posted on August 28, 2008 09:32:17 AM
Homeowner loan Â? for whatever your needs
By: David Lynes - Loans4
If you are looking to borrow money for one of a wide range of purposes there are a number of options open to you as a homeowner. If you have good credit then you will find that you are likely to be eligible for an unsecured loan or a secured homeowner loan. If, on the other hand, you have poor credit you may find that your only option is a homeowner loan, as many lenders will not consider offering an unsecured loan to someone with bad credit.
With a homeowner loan you can enjoy a range of benefits, in addition to being more likely to get one of these loans even if your credit history is damaged. You can look forward to competitive rates of interest, increased borrowing power based on your equity levels, and longer repayment periods that can help to keep your monthly repayments down.
The good news is that you can use a homeowner loan for just about any purpose, so whatever your needs you will find that this type of loan is an effective and affordable solution to funding. There are many popular purposes for homeowner loans, and as equity levels in UK properties have risen over the course of the last few years more and more homeowners have turned to this type of finance to fund various things, from home improvements to consolidation of debts.
Whatever your needs you are likely to find that this type of loan will prove an effective finance option. Many people take out a homeowner loan to carry out home improvements, which offers the added bonus of adding value to the home. Some people are looking to cut back on the hassle and cost of dealing with debt through consolidating their debts with a low cost homeowner loan and getting rid of costly credit card debt and high interest loans. You may be looking to raise money for a new car, treat yourself to a luxurious once in a lifetime holiday, or fund a dream wedding.
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With some very competitive deals available on homeowner loans finding something to suit your needs and your pocket should not prove too difficult. You can do this easily and conveniently using the Internet, and can save yourself additional time and hassle by using the services of a specialist broker, who can source one of a range of suitable homeowner loans to make sure that you get the right loan without compromising on affordability and value for money.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9660.shtml
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Posted on August 27, 2008 09:13:51 AM
Mortgage Protection Insurance Is Still Not Transparent But Changes Are Set To Come In March
By: Simon Burgess
A big change for the better will be seen in March this year when the Financial Services Authority introduces comparison tables for payment protection products. Payment protection consists of three policies: mortgage protection insurance, loan payment insurance and income protection. Currently all three policies are hard to understand and, depending on where you buy the cover, very little information can be given.
The comparison tables will ask the questions relating to their circumstances and help the consumer choose the most suitable type of cover, if any. They will also make the individual aware of the exclusions and terms and conditions, including how much a policy will cost. It is hoped that this will open up the payment protection sector and make it more transparent when it comes to buying. Consumers need to understand a policy and what it is and is not capable of doing, to ensure they choose the right cover.
Some of the most frequent policy exclusions to be found include only working on a part-time basis, being self-employed or retired, or suffering an illness that is ongoing at the time of applying. Providers can slip other exclusions in and the terms and conditions of each provider do differ. It is for this reason you have to compare not only the premiums but also the key facts. You have to delve deep into a policy before buying. For example, although a pre-existing medical condition would mean a policy is not suitable, if the condition has not occurred within the past two years you might be able to claim.
A lack of information is what leads to confusion and individuals buying cover that they cannot hope to claim against. The majority of polices that have been mis-sold have been done so when the consumer has taken on a loan or mortgage and the cover at the time of borrowing. While this might seem to be the best option for taking out mortgage insurance it can be the dearest. High street lenders are known to charge way over the odds for the premiums.
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Mortgage protection insurance would give the policy holder a tax-free income if they found themselves unable to work. A policy would give protection against being made redundant, suffering from an illness or having an accident. Depending on the terms of the cover a policy could begin to pay out from day 31 but it can be as late as day 90. Once the cover has started to provide the holder with benefit it would then continue for between 12 to 24 months. This income would provide great relief and peace of mind by allowing the individual to keep up with their mortgage repayments and not get into arrears. If the homeowner could not afford to keep up the repayments they would risk losing the roof over their head to repossession. When taken out with your circumstances in mind, mortgage cover can stop this worry.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9743.shtml
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Posted on August 26, 2008 08:29:25 AM
Government To Make Billions From The Mortgage Crisis
By: Aubrey Clark
The mortgage crisis has had a negative impact on everyone, not just homeowners. Elected officials are working hard to pass legislation that is designed to prevent future banking debacles. Unfortunately, history has proven that when legislators over-regulate banks that it tightens the reins on lending. This is done by raising the bar on what it takes to qualify for a mortgage or installment loan. Predictably, it?s the middle class that will feel the pinch more than anyone. Specifically, it?s the middle-class, self employed small business owner that be injured the worst.
Most people are aware that you can reduce your taxes by deducting expenses and qualified charitable contributions. What most people don?t realize is that small business owners live and die by those deductions. Tax rates have risen on the self employed more than any other segment in our society. To counter these tax hikes, legislators created more ?loop-holes? write off?s and deductions for small business owners to use.
For this reason, small business owners rely on creative CPA?s to maximize their deductions in order to show less income and pay less taxes.There are nearly 23 million small businesses in America and over 35 million sole-proprietors and almost every one of them employ savvy CPA?s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove enough income on paper when applying for a loan or a mortgage.
Traditional mortgage lending practices of yester-year required that borrower?s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. At the same time the self employed borrower’s ?provable? income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn?t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.
This new business paradigm literally forced the banking industry to create lending products that catered to small business owners who could not prove all of their income. These products were called ?stated? income loans and did not require borrowers who had good credit to prove their income. These products originally required good credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.
It is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending.
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The definition of ?irresponsible? is did the borrower have the capacity to repay the loan, meaning did they prove enough income. This bill will kill stated income loans, period.
So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for car loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.
This means the government will rake in billions in extra revenue as a result of this bill. For example, let?s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If she was in a 40% tax bracket she would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, car loans and business loans. Assuming she?s in the same tax bracket, she would now have to pay $32,000 in taxes.
Multiply $32,000 by 23 million business owners and that?s one huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put good wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually need these loans to stay in business.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9792.shtml
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Posted on August 25, 2008 08:28:12 AM
Homeowner loan Â? let your property equity work for you
By: David Lynes - Loans4
Homeowners across the UK have been fortunate enough to see their equity levels rocket over recent years, with property values in the UK soaring and equity levels going through the roof. Since property prices and equity levels have risen many homeowners have realised that they can unlock the cash that is tied up in their property without having to sell up and move on in the form of a homeowner loan.
Many homeowners have found that taking out a homeowner loan in order to raise finance for one of a wide range of purposes is an effective and affordable way to borrow, enabling them to make the most of he equity in their homes. You can really make your property equity work for you by using it to gain greater financial leverage, and you will find a wide range of competitive homeowner loans available from a variety of lenders.
You can use your equity to get an affordable homeowner loan for a range of purposes, so whether you are planning to make improvements to your home to further increase the value of your home or whether you want to pay off your debts through consolidation and enjoy easier financing and lower monthly outgoings this could prove to be the ideal solution for your financial needs.
Non-homeowners often get a raw deal when it comes to borrowing money, and many are forced to go for high interest unsecured loans that demand high monthly repayments. Homeowners with equity in their properties don?t have to put up with paying over the odds for their borrowing, as their equity enables them to enjoy competitive rates, longer repayments periods, and lower monthly repayments.
The amount that you will be able to borrow by way of a homeowner loan will depend on a number of factors, including the amount of equity that you have in your home. The higher your level of equity the more you will be able to borrow, although this is also subject to other factors such as your financial status and credit rating. This means that you can really make the most of your equity by enjoying the ability to get low rate finance to suit your needs.
You should make sure that you compare the different homeowner loans that are available so that you get the most competitive rates available.
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Even if you have bad credit you can make the most of your equity by taking out a competitive homeowner loan, as those with bad credit are often able to get a homeowner loan even if they cannot get an unsecured loan. You will, of course, pay higher rates of interest than someone with good credit, but you can still get a competitive rate based on your circumstances if you compare the different loans available from a number of lenders.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9651.shtml
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Posted on August 24, 2008 08:09:51 AM
Bad Debt Consolidation: Help You Get A Cheaper Alternative
By: Gracie Bishop
Now, having a debt burden is not an amazing fact for any one. The easy accessibility of the financial helps has infused you with the several financial facilities that often turns wrong for you. Your financial condition sometimes fails to repay these debts and left you with a situation of bad debt. Since, this situation can create a lot of credit problem for you, you need an instant help to eliminate it. To help you in this situation now, bad debt consolidation is provided that works effectively to reduce your debt burden.
Generally, your failures on the previous debts result into a bad debt situation. A bad debt condition can worsen your credit status and create impediments in your further financial approvals. Moreover, depending upon the severity of the failure on your previous repayment, it can even push you in situation of bankruptcy. So, a bad debt consolidation is the right solution for you in this time.
Bad debt consolidation is process to lower your debt burden to make the repayment affordable to your financial condition. The general reason for taking a bad debt consolidation help is to find lower alternative for existing higher interest rate, paying the several debts with one loan, and to enlarge the duration of repayment for the convenience of your financial condition.
Bad debt consolidation helps you get a new loan that replaces all your previous debts together. This new loan has a comparatively lower interest rate and can help you pay the several debts with a single monthly installment.
Generally, a number of unsecured debts are replaced by a new secured one that is usually secured by your home any fixed asset. But, with the wide options in the market; you can have also the option of replacing your several debts with a new unsecured loan facility.
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You can contact them to avail an effective and right solution for your bad debt situation. These agencies can help you get a right financial help to make your debt burden lower and make you able to pay off the existing debts with your financial condition.
Your bad debt situation simply notifies that that your financial condition is not helping you getting rid of the existing burden you have. Moreover, your situation can be worsening more if it is not solved at a time. So, a bad debt consolidation is the need of your situation that can certainly reduce your debt burden to a considerable level. It can help you get a lower interest rate, an extension of repayment, and settlements of several debts into one that can certainly soothe you on your current financial condition.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9726.shtml
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Posted on August 23, 2008 07:15:25 AM
Bad Credit Loans: Get Money And Solve Your Cash Issues
By: Simon Tauffel
When the problems are numerous, friends are few. These words are very apt when it comes to the situation of bad credit. Fulfilling your cash needs when having a bad credit history, it may be difficult to get the support you want. Getting external help will still suit you as the money is available without any hassle through bad credit loans.
The borrowers who have a credit score which is lower than 580 in the FICO report may be suffering from this problem due to various factors. It can be arrears, defaults, missed repayments or CCJs that have caused this problem. But the borrowers still deserve a chance to avail these loans for their needs.
Through these loans, the borrowers can choose whichever option that they like out of the secured and the unsecured form, according to suitability. The loan form also depends upon the ability of the borrower to pledge collateral with the lender for the money. If a bigger amount is required by the borrowers, they can take up the secured form by pledging an asset with the lenders. Amounts can be borrowed within the range of £5000-£75000 for a term of 5-25 years. The home, car or any asset of the borrower can be pledged as collateral.
Borrowers who need smaller amount can also take up money and that too without pledging any assets. This is possible through unsecured form of these loans.
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Tenants and non-homeowners can also take up these loans for their needs easily.
Adverse credit history of borrowers may entail a higher rate of interest. But with the help of online research and comparison, the borrowers can take up low rate deals with the help of comparison of the loan quotes easily.
Bad credit loans are a great opportunity for the borrowers to avail money at the most needful times. It is a great respite for borrowers stuck in bad credit.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9790.shtml
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Posted on August 22, 2008 06:39:42 AM
How Does a \”Deed in Lieu of Foreclosure\” Work?
By: Dave Dinkel
A “Deed in Lieu of Foreclosure” is when a lender accepts a deed to the homeowner’s property in foreclosure instead of continuing the foreclosure process and incurring more expenses to get the deed anyway. However, this does not mean the homeowner is no longer responsible for a loan deficit if the lender sells the home for less money than is owed.
This legal transaction starts after the homeowner has fallen behind on his loan payments and is in foreclosure. Even if the foreclosure has not started yet, the lender can be approached and asked if they will accept a “deed in lieu of” continuing into the foreclosure process. Sometimes the lenders regulations require the homeowner to be behind on his payments before they will consider accepting the deed, usually 90 days in judicial foreclosure states and 30 days in non-judicial states.
Unfortunately the homeowner is, or shortly will be inundated by people trying to help with his foreclosure because he has become part of the public record and usually he is getting information from well-meaning but uninformed people. However, he will be set upon by professionals looking to sell him foreclosure services or take the equity from his home by buying his home very inexpensively.
As soon as the homeowner notifies the lender of his impending problem or when he is 30 days late on his mortgage payment, the lender orders a BPO (Broker’s Price Opinion) to determine its market value. With this information the lender can immediately determine if he wants to take the home at the foreclosure auction, take a “deed in lieu of” or work with a loan modification or forbearance agreement to stop the pending foreclosure. The lender will make a purely financial determination about what is best for the lender, not the homeowner. By taking the home back though the foreclosure sale, there are higher legal costs, extended loss of interest on the loan, real estate market risk, carrying and closing costs, and increased reserve requirements for the Federal Reserve. However, if there are other open liens on the property, the lender will have to get the junior liens to assign them to the primary lender or extinguish them so they don’t become the burden of the first mortgage lender. In many cases it is simpler to go through the foreclosure process to extinguish these junior liens.
The lender determines if it is quicker to accept the “deed in lieu of” or continue with the foreclosure and sale. The lender may take the deed from the homeowner and continue the foreclosure anyway for the reasons mentioned above. In this case there is no advantage for the homeowner to give the lender the deed, especially if the lender requires the homeowner to sign a personal note for the potential deficit that the lender may incur when he sells the property. It is not entirely uncommon for a homeowner to have junior liens that are larger than the first mortgage and in these cases, the primary lender must continue the foreclosure so the junior liens either buy him out or have their interest in the property extinguished at the auction.
If the lender agrees to accept a deed in lieu of foreclosure, the responsibility for the mortgage deficit is not finished. The lender generally has the homeowner sign an Acceptance Agreement as well as a new deed. This agreement will stipulate that if the lender sells or transfers the property for less than what is owed on the loan (including all penalties, interest, and attorneys’ fees), the guarantor of the loan (usually the homeowner) will owe any deficiency. This deficiency amount can then be pursued in the courts as a deficiency judgment or the lender can issue the homeowner an IRS Form 1099.
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Federal legislation enacted in December 2007 now allows the homeowner to avoid income taxes on this phantom income under certain strict circumstances.
So is a “deed in lieu of” an ideal solution for a homeowner in foreclosure? The answer is clearly “no” since very little is accomplished by the deed transfer because the homeowner or guarantor, is still responsible for any loan deficiency after the sale. If the homeowner does nothing, he will not have to sign the Acceptance Agreement. By not signing this agreement, the homeowner will not be opening himself to even further liability. The terms of the Acceptance Agreement should release the homeowner (guarantor) from future liability (i.e. deficiency amount). The bottom line is that if the “deed in lieu of” isn’t a better solution for the lender, the lender has no motivation to take back the deed. If the lender readily takes back the deed, the homeowner should be concerned there may be substantial equity in the property that the lender will receive “free and clear”. If there are additional liens on the home, the lender does not need the deed since he has to complete the foreclosure action to extinguish them.
In summary, it is a best questionable whether it makes economic sense to give back a “deed in lieu of” unless the Acceptance Agreement clearly stipulates that the homeowner does not have an obligation for the deficiency amount. You should not sign any documents from the lender or anyone else without having an attorney review and approve your signing.
Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9631.shtml
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