Smartcards

Smartcards

Smartcards

The next kind of plastic the banks want you to keep in your wallet is a smart card. They come in different varieties and most are not yet ready for a mass distribution, but, at this writing, pilot projects are forging ahead. Promoters of smart cards make the assumption that you don’t like to carry cash. You do not like fishing for bills and coins to buy a newspaper or a soda. You would to rather put down plastic instead.

This kind of card has money on it, embedded in a computer chip. A $50 card, for example, will give you $50 in spending power. If you buy a 5o cent newspaper, the seller will put your card in a special terminal and drain off 50 cents. Identification or signature is not required.

You now have a card with $19.25 left on it. After spending $1 on a soda, the value of your card goes down to $18.25. If you forget how much you have, you can check it with a little portable card reader. Some readers might also list the last five things you have bought.

If every merchant, street vendor, cab driver, and bus accepted smart cards, you would not have to have cash on your pocket. To some, that would be a huge convenience; to others, it is a shrug. If some merchants took smart cards and others did not, however, you would have to carry both.

What is in it for the bank? Eventually (although not at first), the bank will charge you for the card. There might be a fee when you accessed the ATM to load it up. The merchant would also pay a fee in return for getting what is presumably a more secure transaction.

What is in it for you? Convenience, maybe. Putting down a card is a tad quicker than pulling out cash. You always have the equivalent of exact change. You would not have to count you change (but you would have to use the card reader to be sure the merchant’s terminal deducted the right amount). You might also use the card to make small purchases over the Internet.

For a while, the smart cards probably would not have any more than $100 on them and the limit might be lower than that. So they are strictly for walking around money. You would still need your credit card, debit card, or checkbook for more serious shopping.

If the card malfunctions say, it registers $14 when you are sure you were carrying $36 the bank can check the balance on the computer chip.

Credit Card

Unauthorized Use: Here is what you have to pay if your credit card is stolen and charges are run up: Nothing if you reported the loss to the bank before a fraudulent charge occurred. Up to $50 for charges run up before the theft was reported to the card issuer and banks often waive even that small fee. Nothing if you still have your card, but your number was used fraudulently, for example, in a mail order transaction or a transaction over the internet. This covers both business and consumer transactions.

Billing Errors; you are fully protected against consumer billing errors. If you have already paid an erroneous bill, you will get money back.

What Are You Saving Money For?

What Are You Saving Money For?

What Are You Saving Money For?

A savings account is not something to hang on the wall and stare at, like a Rembrandt. You are not hoarding. You are preparing to use your money in a different way.

Refer, please, to your Spending Plan. It says that your current goal is to pay down debt. Or 3 month’s living expenses in the bank. Or $2,000 more in a college account this year. Or $5,000 for long-term investments. Or $1,000 to play the slots in Vegas, where you will really make some money. Tithing, or semi tithing, is how you are going to raise your stake.

Here is how to accomplish it:

First, write down how much you are going to save (5 or 10 percent of each paycheck).

Second, write down how long it will take to reach your goal. At $250 a month, you will have your college account in 8 months. (Tip: It is easier to save $59 a week than $250 a month. The smaller sum sounds more doable, even though it comes to the same in the end.)

Third, note each future $250 (or $59) payment on your calendar and check off every one you make. That may sound hokey, but it is a strong motivational tool. Every time you turn to a new week or new week or new month, there is a written reminder to keep up your resolve. Saving money is easier if you see it climb toward a specific end. It is like polishing the car. You feel that you have accomplished something.

Fourth, when you have reached your goal give yourself a little present. Then start the process all over again.

Should you build up a bank account instead of paying off debt?

No, no and again, no. Repeat after me: paying off debt is a form of saving. In fact, debt repayment is one of the most lucrative ways to save. It is nuts to keep money in the bank at 4 percent interest while carrying credit card debt at 18 percent. You are losing 14 percent a year on that deal (the 18 percent cost of the debt minus the 4 percent earned on the bank account). Take most of your money out of the bank and reduce the debt. If you need quick cash, you can borrow against your card again, and in the meantime, you are saving yourself a mountain of interest.

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Pay Cash or Take out a Loan?

Cash or Take out a Loan?

Cash or Take out a Loan?

It is cheaper to pay cash. But many auto dealers (who make money on car loans) have come up with a clever, computerized gimmick to bamboozle customers into thinking that loans are a better deal.

For example, say you have $10,000. You can put it into a certificate of deposit earning 6 percent interest or use it toward buying a new car. The dealer may argue that it is smarter to choose the CD and take out an 8.5 percent auto loan.

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Here is the dealer’s four step “proof”:

  1. If you leave you $10,000 in the bank for 4 years, you will earn $2,712 in interest, pretax.
  2. A 4 year, $10,000 auto loan will cost $1,832 in interest (the interest is less than you think because it is paid on a declining balance).
  3. So by keeping the CD and taking the loan, you are $880 ahead. (You are only $121 ahead after federal taxes in the 28 percent bracket, but the loan may still look good to people who hate to part with savings.)
  4. Furthermore, the dealer croons, debtors do even better when the loan’s term is up. Say the car is worth $5,000 from the trade in. That is all the cash the buyer has in hand. But the borrower supposedly gets an amazing $15,880 adding together $5,000 from the trade in, the $880 gain interest, plus the $10,000 still in the bank.

Before you decide that the road to riches is paved with auto loans, sit back and think a minute. There is something the dealer overlooked. Where does the money come from to repay the loan?

If you take the monthly payments out of your bank account, your savings will be wiped out before the loan is entirely repaid.

If you make the monthly payments out of earnings, you will be giving up $11,832 that you could have saved or invested. Either way, the loan costs you more.

So pay cash. Then take the equivalent of the monthly payment, which you are not spending on the auto loan, and use it to replenish your savings. At the end of the term, you will or have your car and more than $10,000 back.

I would vote for the loan only if your fat savings account was a windfall a gift, an inheritance, a winning lottery ticket that you would never be able to replace.

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If You Can’t Pay Your Bills

If You Can’t Pay Your Bills

If You Can’t Pay Your Bills

Don’t hide. Don’t cry. Don’t shove unopened bills into a drawer. Don’t have your cousin tell the bank that you have gone to Sicily for the summer. That would not help. Someone will find you probably a bill collector and you will be in more trouble than you were before you got your commercial truck title loan.

What is your biggest problem when you can’t pay your bills? Money, you say. I say it is fear. You are sure that everyone will point and sneer. Your son will be kicked out of Boy Scouts. The police will hang you up by your thumbs. But nothing like that is going to happen. You are not Jack the Ripper. You do not beat up babies or set fire to cats. All you did wrong was to buy more things than you can pay for right away. That is an error will be forgiven.

If you can’t pay your bills, write a letter to your creditors and tell them so. For a really big bill, like a mortgage, make an appointment to see someone in the credit department. Don’t slump in like a bankrupt. Approach the interview like a business person with a problem to solve.

To do this you need: a spending plan showing how much money you need to live on; a repayment plan showing how much you can spread among your creditors every month; a specific offer for each creditor, as in, “I will pay you $50 a month and clear up this bill in 10 months.” If your situation is dire, offer your unsecured creditors a settlement say, 50 cents on the dollar.

Each creditor will want more. But if you hold firm and keep making the payments you have decided on they will eventually accept the deal. If someone threatens to sue, do not ruin your rehabilitation plan by trying to accommodate him. Keep on talking, keep making your payments, even go to court. No judge will order you to pay more than you can afford, and your creditors know it. Your strengths are three: the lender would rather stretch out payments than repossess, it is cheaper to talk than to hire a debt collector, and the interest you pay is compensation for the delay.

If you can’t handle these negotiations yourself, or if you are such a spendaholic that you find yourself hurtling toward bankruptcy, nonprofit credit counselors can help with your Atlanta car title loan.

How To Get Your First Credit Card

How To Get Your First Credit Card

How To Get Your First Credit Card

If you are in college, you will be bombarded with credit card offers. It is smart to take one (and use the card prudently, of course). Young students can get cards even though they have no income or credit records. Issuers tacitly assume that if they can’t pay, their parents will. Once students leave school, however, that presumption vanishes. So they should grab a card and start a credit history while they still get the benefit of the doubt. Don’t put more on the card than you can pay for! Otherwise, you will start out in life with wrecked credit and a mountain of student loans and car title loans Atlanta.

Sometimes parents are asked to co-sign their student’s card. Assuming that you trust the child, go ahead and do it. Credit cards can help kids out of a jam like a car breakdown on the way home from college. They are accepted in places where a personal check might not be. Once children are well established, they can cancel the co-signed card and get one entirely on their own. Any debt on the old card should either be paid off or transferred to the new one.

If you do not have the college student advantage, start your credit life with a checking account at a bank or S&L. After a few months, apply for a Visa or MasterCard. If you are turned down, make an appointment with the credit card manager and ask what you have to do to qualify. Then do it.

If you have had a steady job and address for a few months, go to a major retailer (one that will report your payment history to a credit bureau) and apply for a charge account. At the start, you will be given a low line of credit, but that does not matter. Once you prove your reliability, you will be able to charge more.

What if you are a widow whose credit history and credit cards were all in your late husband’s name? This problem occurs much less than it used to; all credit held jointly is now reported in both spouses names. You might have a credit history without knowing it, so check and see.

If you do not, however, start with a bank where you have always done business. Instead of applying for a card and letting the computer turn you down, make a personal appointment with the credit manager from the commercial vehicle title loans.

Ways to Improve Your Credit

Ways to Improve Your Credit

Ways to Improve Your Credit

Having a bad credit score will definitely not do you any good in your day to day dealings with the rest of the human race. Get more information on how your credit score affects your life financially, socially and even politically. The good news is that there are many ways in which you can improve your credit score for the better, without having to overly strain and stress yourself. Some of these ways include:

Paying your bills on time

When you start paying your utility bills and monthly debt repayments on time, you will be able to reduce the interest payments that you are supposed to pay if you default on your payments or if you fail to pay on time. This will work in your favor as your debt obligations will only reduce, instead of ballooning and increasing to unsustainable levels.

Control your spending

It is also important for you to limit your monthly expenses, especially those that will reflect on your credit cards. Overspending on liabilities (things that only take money out of your pocket instead of bringing more money) will only serve to further degrade your credit score. You will need to exercise some financial discipline in order to climb out of the deep hole that you have found yourself stuck in.

Prepare a budget

Having a monthly budget that sets out the amount of money you will spend on particular categories in the home will also go a long way in introducing order and planning into your financial life. By setting limits and caps on items such as entertainment and clothes, you will be able to free up more money that can go towards paying off the debts that you already have, fast-tracking your way to financial security.

Federal Deposit Insurance Corporation

Security Interests in Rents

Security Interests in Rents

Security Interests in Rents

Mortgage lenders frequently view real property as providing two separate and distinct sources of security for the mortgage obligation. They rely not only on the real property itself, but also on the rents it produces. However, in lien theory states, it is important to realize that simply taking a garden –variety mortgage on the debtor’s fee simple absolute will not adequately protect the lender with respect rents and profits. As one federal judge aptly observed, such instances, the logic is that the borrower has retained all the incidents of possession, including the right to rents, profits and crops, and these he may do with as he pleases. It is only when the lender takes possession or does so constructively, as by having a receiver appointed, that he is entitled to the ordinary incidents of possession, like rents, profits and crops. First Federal Savings of Arkansas, F.A. v. City National Bank of Fort smith, Arkansas.real property as providing two separate and distinct sources of security for the mortgage obligation. They rely not only on the real property itself, but also on the rents it produces. However, in lien theory states, it is important to realize that simply taking a garden –variety mortgage on the debtor’s fee simple absolute will not adequately protect the lender with respect rents and profits. As one federal judge aptly observed, such instances, the logic is that the borrower has retained all the incidents of possession, including the right to rents, profits and crops, and these he may do with as he pleases. It is only when the lender takes possession or does so constructively, as by having a receiver appointed, that he is entitled to the ordinary incidents of possession, like rents, profits and crops. First Federal Savings of Arkansas, F.A. v. City National Bank of Fort smith, Arkansas.

Consequently, mortgages commonly require mortgage language or collateral agreements by which the mortgagor” assigns” or mortgages” the rents as additional security for the mortgage loan. In relatively rare situations, such agreements give the mortgagee immediate access to the rents. In these situations, the mortgagees may, from the inception of the loan, actually collect the rents from mortgagor’s tenants and apply them to the mortgage indebtedness. More commonly, however, the mortgagee’s   right of access to the rents is triggered by mortgagor default. See generally, Haroldson, Perfecting a Security Interest in Future Rents from Mortgaged Real Property, 40 Drake L. Rev. 287 (1991).

Today an assignment of rents agreement is enforceable in every jurisdiction, irrespective of whether it follows the lien or title theory or mortgage law. This unanimity ends, however, as soon as courts confront the question of when such assignments become effective and at what point the mortgage acquires the actual right to commence collection of the rents. As to those latter questions, mortgage law theory can sometimes play a significant role, as the following material illustrates.

What recording or filing requirement must be followed with respect to an assignment of rents? Perhaps out of an excess of caution, mortgagees frequently not only record in the real estate records, but attempt to perfect a Uniform Commercial Code security interest in rents as well. This “belt and suspenders” approach stems from a concern that rents may be characterized as “personality” and that recordation of an assignment in the real estate records will not provide the mortgagee with sufficient protection. In theory, this concern is misplaced. Under Article 9of the UCC, the Code is inapplicable “ to the creation or transfer of an interest in or lien on real estate, including a lease or rents thereunder.”

Escrow Accounts for Taxes and Insurance

Escrow Accounts for Taxes and Insurance

Escrow Accounts for Taxes and Insurance

The material above suggests that mortgagees have a strong and legitimate concern that their mortgagors maintain and pay the premiums for casualty insurance on the mortgaged premises. Mortgagees are perhaps even more insistent that mortgagors promptly pay the real estate taxes and special assessments accruing against the property. The reason for this concern, as Professor Durfee once aptly pointed out, is that “in most tax systems the burden of the ordinary tax on land and the burden of special assessments for local improvements rest on both mortgagor and mortgagee in the sense that unless these charges are satisfied by someone before the axe falls, the interests of both parties will be rubbed out. The state goes after the land and its claim overrides all prior interest whatever their character.” Durfee, Cases on Security, p. 136 (1951) (emphasis added). In other words, a “first” mortgage on real estate will be wiped out by a sale under a subsequently a rising real estate tax lien for more information click here.

Thus, mortgages generally utilize mortgage clauses specifically imposing the duty to pay taxes and insurance premium on the mortgagor and making failure to so pay a cause for acceleration of the mortgage debt. As additional protection, many mortgagees demand that mortgagors set up accounts with the mortgagee into which the mortgagor will pay 1/12 of the annual taxes and insurance premiums each month (along with the regular monthly payment of principal and interest), and out of which the mortgagee will actually make the tax and insurance payments as they fall due. These accounts are usually termed “escrow,” “impound,” or reserve” accounts. The usual obligations paid out of escrow accounts are ad valorem property taxes, special assessments, and casualty insurance premium. Sometimes other items are included, such as condominium or PUD homeowner association assessments and ground rents if the security property is ground leased land. Use of escrow accounts ensures that the mortgagor will “save enough money to pay the escrowed items, and provides the lender with and “early warning system;” as soon as the mortgagor misses even one monthly payment, the lender is immediately aware of the default and can take measures to protect itself.

Escrow accounts are also an important source of revenue for lenders. If the mortgagee is not required to pay interest on the account to the mortgagor, it can invest the funds on hand and earn interest on them for its own benefit until they need to be paid out read more here.

Discharge of The Debt and Mortgage

Loans and Finance

Discharge of The Debt and Mortgage

Everyone recognizes instinctively that when a borrower pays off the mortgage debt in full, the mortgage itself is extinguished. The popular mythology of the borrower “burning the mortgage” reflects this basic concept. The concept is indeed correct, but it is a bit more complex and requires some further explanation read more.

To being with, a mortgage may be paid off by either of two classes of persons: those who are “primarily responsible” for paying it and those who are not. Who is “primarily responsible?” the concept is not dependent on the existence of personal liability on the debt. Most obviously, the mortgagor is “primarily responsible” if he or she still owns the real estate, whether the debt is recourse or not. Likewise, if the real estate is sold, the grantee becomes “primarily responsible,” whether the grantee assumed personal liability on the debt or not. Even a tenant in common, a life tenant, or other holder of a limited interest in the real estate is “primarily responsible” except to the extent that someone else has a duty to reimburse him or her for part of the payment he or she might make.

If a complete payoff of the loan (including any validly accrued interest, prepayment fees, and other miscellaneous items) is made by somebody who is “primarily responsible,” the mortgage is indeed extinguished. Legally, it doesn’t exist anymore. Of course, that doesn’t make it disappear from the public records. Hence, the mortgagee has a duty to provide a suitable document, recordable in form, showing that the mortgage has been released. The person marking the payoff can then records it clear the records. We can correctly refer to the payoff as “redemption” of the land from the mortgage.

Incidentally, the great majority of states have statutes that formalize the mortgagee’s duty to provide a recordable document discharging the mortgage. The name customarily given to the document varies from one jurisdiction to another; it may be called a release, a satisfaction piece, a discharge, or (particularly where deeds of trust are commonly used) a re-conveyance. The name has little significance. Theses statutes often provide a fixed time period (e.g., 10 to 90 days) within which the lender must provide the document of discharge. Many of them impose financial penalties on lenders who fail to comply, and, in addition, allow the payer to recover any actual damages resulting from the lender’s failure to provide a discharge from a title loan Atlanta.

Disbursement of Foreclosure Sale Proceeds

Disbursement of Foreclosure Sale Proceeds

Disbursement of Foreclosure Sale Proceeds

Where the foreclosure sale produces a surplus, the rules governing who participates in that surplus and the priority of that participation are generally clear. Statutes often regulate the distribution of the surplus, especially in the power of sale setting. Some simply codify the principles described a car title loan in Atlanta, others seen their face to give the surplus to the mortgagor and make no reference to the rights of junior lienors. However, these latter statutes have generally been interpreted to give junior lienors right in the surplus and the priority over mortgagors generally described in the preceding paragraph. A few statutes make no mention of priorities, but simple authorize the mortgagee or trustee to pay the surplus to the clerk of court.

Suppose that for some reason a senior lien has been foreclosed and a surplus was produced, but a junior lien exist that is not in default. Should that junior lioner be entitled to pay from the surplus? Some courts have said yes. On the other hand, in re Castillian Apartments is an interesting case in this regard, in that case, a senior mortgage was foreclosed and produced a substantial surplus. The junior mortgage was not in default and contained no acceleration clause that would have made it due and payable whenever the senior mortgage went into default. Moreover, because the junior debt had previously been determined to be usurious, under North Carolina law all right to receive interest on it was forfeited. As a result, the North Carolina Supreme Court approved a lower court determination that the surplus should not be paid to the junior lienor and that it instead should be invested in a certificate of deposit for junior lienor’s benefit but with interest to be paid to the debtor.

The foregoing situation is relatively uncommon for several reasons. First, when foreclosures sale result in a surplus, the debts of junior lien claimants normally will be in default. This will be true automatically with respect to junior judgment lionors. Moreover, if the mortgagor has allowed senior debt to go into default, the chances are strong that the junior debt is in default as well. Second, even if the mortgagor has not otherwise default on senior debt, many junior mortgages provide a ground for acceleration that any default or foreclosure with respect to a senior encumbrance will give the junior mortgagee the option to accelerate the junior debt. Acceleration for such a reason is generally upheld. Finally, a few states appear to give junior lienors that are not default the right to be paid from a foreclosure surplus at the car title loan in Atlanta.