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What is Loan Modification?

Mathew — Tue, 10 Nov 2009 22:16:17 +0000

We hear the phrase more and more often: loan modification. What exactly is loan modification?

When borrowers get in trouble, they can’t make loan payments. The bank is left with a few options that are ugly for everybody. Often, the best option is loan modification.

Loan modifications allow the bank to make loan payments more affordable for borrowers. They may change interest rates, loan terms, loan balances, or other parts of the loan agreement.

We hear the phrase more and more often: loan modification. What exactly is loan modification?When borrowers get in trouble, they can’t make loan payments. The bank is left with a few options that are ugly for everybody. Often, the best option is loan modification.

Loan modifications allow the bank to make loan payments more affordable for borrowers. They may change interest rates, loan terms, loan balances, or other parts of the loan agreement.

Portfolio – Deep Value Stocks

admin — Sun, 25 Jan 2009 10:13:18 +0000

THEY are believed to carry hidden treasure on Dalal Street. While investors call them the low-lying unpolished gems of the stock market, brokers say there are big bucks to be made if you can identify these stocks early. No prizes for guessing this, we are talking about deep value stocks which can do wonders to one’s portfolio when market re-assesses them.

According to analysts, a deep value stock can be defined as something which is low priced in relation to the margin of safety the stock provides, to limit losses when a mistake is made. Lets get some insight into how to identify these stocks, what should be your ideal portfolio allocation and reasons behind their low valuations in the market.

SLEEPING GIANTS

They are like any other stock traded on the exchange, but there is no hypothetical understanding of them. A section of traders on the Bombay Stock Exchange even call these stocks as ‘sleeping giants’.

There are two ways in which you can identify a deep value stock.

First, what Benjamin Graham recommends for the defensive investors in his 1949 classic – that the stock price should not be more than 15 times its average earnings per share over the past three years and the overall PE of the portfolio should not be more than 13. Or

Second, the stock should be trading below its 10-year median PE. The other things to be kept in mind is to stick with companies that have a long history of consistent profit growth and steady dividend payouts and the fact that not every cheap stock would turn out to be a bargain. He believes that PSU banks like Oriental Bank of Commerce, which is trading at a PE of 5.6 with book value of Rs 240 for FY09, is a perfect example of a deep value stock. “In a growing economy like India, banks should do well as the GDP expands,” he reasons.

These stocks generally remain neglected by the stock markets. The best (or you may call it worst) part is that people know it’s a great story but still they don’t want to touch it. If one saw the real estate boom in India five years back and bought into Unitech, his portfolio returns would have multiplied phenomenally.

As far as portfolio allocations are concerned, analysts feel that an investor could invest 80% in growth stocks and 20% in value stocks (after keeping some cash balance or investments in fixed income instruments). In case of a pure deep value investor, that typically 80% the investment of investible funds should be in these stocks and 20% of the funds should be kept aside for fixed income instruments or cash balance. “However, a hybrid investor should follow a strategy in between the two. The basic principle followed is the Pareto’s principle – the 80/20 rule.

SOW TO REAP

Though opinions differ on an ideal investment horizon, most analysts agree that it should not be less than a year and which could extend up to three to five years to reap big dividends. The first thing an investor needs to do is to ask himself whether he is a speculator or an investor. “If he is a speculator, then there is no chance for him to stay in these stocks. If he is an investor, a time period of three to five years is what makes sense. However, if the stock does not give the required return even after holding for three years, there is something more than one ’s own understanding about the stock. In such a scenario, you could sell the stock and move to something else. However, if there are compelling reasons, you could continue holding the stock.

On why these stocks have ridiculously low valuations the market sometimes tends to overlook an industry. And usually these stocks are not popular with brokers. Apart from that, analysts explain that there could be reasons such as high transaction impact costs (small caps can have transaction impact costs as high as 30-50% ) and fear of uncertain events or adverse macro environment conditions such as rise in oil and interest rates, government policies, etc. You must also understand that fear always resides in the near term. And that’s why there is lower visibility of the future even though the broad picture remains intact in these cases.

UNPOLISHED GEMS

Here are some deep value stocks which experts feel have great potential

ONGC – The stock is in a sector which is very strategic in nature, has a history of good profitability and dividends and trading at ridiculous valuations.

MAHINDRA & MAHINDRA AND MARUTI – The industry is in a growth phase in India as opposed to a saturation phase in the western world – trading at a PE of around 10 for FY09

LIC HOUSING FINANCE – A company growing at 25-30% available at a PE of 7x for FY09 and EPS of Rs 55. Book value of the company in FY09 would be Rs 260 and ROE would be 20% (Assuming no dilution)

BIRLA CORPORATION AND INDIA CEMENTS – Trading at single digit price multiples for FY09. Overall infrastructure spending is close to $500bn in the 12th five year plan and that we are nowhere close to capacities that exist in China

HDIL – It is trading at a considerable discount. The infrastructure sector has strong revenue visibility, and growth opportunity in the target markets with possible value unlocking opportunity.

SBI - The stock is trading at single digit multiple for FY10E. Apart from holding largest land bank holdings, it has an x-factor too – human resource valuation

For further related articles refer to http://prajnacapital.blogspot.com

Effectively Learn Currency Trading

admin — Sun, 25 Jan 2009 01:50:58 +0000

To effectively learn currency trading can be long process, but if you stick to that process, I guarantee you will become very good at it. This is a business that really favors effective learning through experience and if you’re willing to do that, you will do great.

Do I need a plan?

Yes. Everyday, you should have a plan of action. Something that lists each action in order. This is the best way to apply a technique over and over again. You can look back after a short period of time and determine if the plan is good or not. If you don’t have a plan, that means you’re going to have to figure it out every time you attempt to trade. You’re going to have to invest a lot of energy on figuring that out, and you won’t have much energy left over to apply it. That is why you need a daily plan you apply over and over again. It makes it easy on the head and for you.

What on the news should I be watching out for?

You should be looking out for economic and political news. The political news should mainly about economic issues, but things like domestic terrorism can have an effect. What is going on inside a country has an effect on the value of a currency. Each currency is just a piece of paper, the value comes for the economy of a country. Pay particular attention to economic news like interest rates, GDP growth, unemployment rates, etc. Also pay attention to political policies that effect taxes, regulations, business, etc.

What kind of software should I get?

You should get a nice piece of forex software that is automated, like Forex Killer. It will automatically do your trades and find out profitable trends for you to profit on.

The automated software of Forex Killer will give you an immediate edge in the market. Make trades that work for your profit line. For more information on the Forex Killer software, check out Forex Charting Software.

To Finance Or Not to Finance Laptops and Mobile Phones

admin — Wed, 21 Jan 2009 18:01:18 +0000

Laptop computers are popular. So are mobile phones. Unfortunately, they can also be costly. If you’re considering investing in a new laptop or cell phone, do your homework first. In some instances, it may be a wise decision to finance your purchase. At other times, paying cash is best. Learn the ins and outs of financing products such as laptops and mobile phones below.

Laptops or Cell Phones for Personal Use

If you’re planning to buy a laptop or cell phone for personal use, you’ll probably want all the latest features at the lowest cost. A mobile phone will typically be priced anywhere from $300 to $4,500, depending on its features, style, brand name, etc. A laptop computer is usually priced according to the amount of memory or disc space available, key features, pre-installed programs and the brand name. Laptops are priced anywhere from $1,000 to $10,000.

If purchasing a mobile phone or laptop that’s on the high end of the price scale, you’re looking at a fairly large investment. You may not have the cash on-hand at the date of purchase. When buying a notebook computer for personal use, consider the total purchase price, the interest rates that are available at your lending institution, and the number of years you will finance. Laptops can decrease in value quickly because computers are always changing – there’s always a new feature or type of computer on the market. In reality, your notebook computer could become obsolete within a year or two!

The same is true for cell phones. They tend to become obsolete quickly as well. On the other hand, paying a little more for a cell phone you know will enjoy for many years to come may be worth financing a higher amount.

For personal use, it is recommended to finance your mobile phone or laptop only if necessary, and at the lowest interest rate possible. You may be able to take advantage of a personal loan at your local bank or credit union. Finance companies tend to be much higher in interest. If you must pay high interest, be sure to lessen your finance payment period. You’ll pay much less interest by financing for two years instead of three.

Laptops or Cell Phones for Business Use

When buying products for business, financing can be a good thing. Sometimes, paying $5,000 cash is possible, but not wise. If you have $5,000 on-hand, you could use part of it as a down payment for your notebook computer or mobile phone. The remainder can be used to do more promotions for your business, thus, increasing your profits. Also, the finance charges and depreciation value of the laptop may be a helpful tax write-off at the year’s end! So by financing, you may be able to increase business profits, buy your much-needed equipment, and save on taxes!

Before financing products such as laptops or mobile phones, speak with your accountant to find out if it’s the right decision for you. The time of year, cost, interest rate and other factors will ultimately determine if financing will benefit or hurt your business.

Products like mobile phones and laptop computers are very useful for individuals and businesses. Consider the tips above before buying a laptop or cell phone to make your investment worthwhile!

Chris Robertson is an author of Majon International, one of the worlds MOST popular internet marketing companies on the web. Learn more about Financing Mobile Phones or Laptops

Finance Online Personal – What’s Wrong With Indexed Annuities?

admin — Tue, 20 Jan 2009 12:27:26 +0000

A few months ago, Dateline NBC ran a supposed expose on Indexed Annuities- most of their assertions I find fault with. I decided to sit down and provide a counterpoint view of why indexed-linked products- whether they’re life insurance, annuities, CDs, or corporate notes- have some unique advantages that no other financial product can compete with.

First of all, it’s important to note that the S&P 500 long-term growth averages fail to reach double digit levels. The only reason you see returns of between 11-12% are because of the dividends specific stocks within the index pay out. Without these dividends, the average return on the S&P 500 between the years of 1951 and 2001 (in ten year intervals) was only 9.49%.

The assertion that Dateline NBC and other critics put out there that index-linked products only credit about 60% of the upward movement of the stock market is merely a half-truth. What they’re not telling you is that index-linked products credit interest rates based on only the upward movement of the underlying index with the cap rates configured into the products.

If you’re not familiar with the way indexed-linked products work, you can find some useful information within the archives on my website, twintierfinancial.com. Essentially, every indexed product works the same in that they credit the policy in proportion to the upward only variations of the S&P 500, generally up to a pre-known cap of between 6-8%. Generally, the better the product, the higher the cap will be. Also, the better the product, the less the fees will be associated with it.

Now, let’s revisit the half-truth of the 60% return. The problem herein is that this figure is obtained by figuring in the down years of the index as well. The nature of indexed-linked products is that they treat the naturally occurring downward turns in the stock markets as no growth. In other words, the stock market might lose 5% in one month (quite like this year), but your indexed-linked product will simply credit 0% growth for that month, while still preserving the principal you already have.

By the time you substitute all the downward trending values with zeros, you’ll find that indexed products return a full 30% more than the 60% returns originally claimed by the critics. For well designed indexed products, the long-term honest rate of return is truthfully within the 8-9% range. Considering that the long-term average of the S&P is 9.49%, an 8% return with no downside risk doesn’t seem like a bad prospect at all, right?

Additionally, most indexed-linked products also have a minimum rate of return. In the shaky financial situation that the economy has been experiencing this year, the stock market has already lost 40% of its value from this time last year. However, the people who were secured into indexed-linked products have not only preserved their initial investment and the gains they’ve already secured, but they have also been credited between 1-3% depending on the minimum gains guarantee written into their product. Not too shabby.

David C Lewis, FMM, RFA is the founder of Twin Tier Financial – a financial services company based in upstate NY which specializes in providing information related to finance online, personal financial problems and retirement planning. For more info, please visit http://www.twintierfinancial.com

Commercial Hard Money Loans

admin — Fri, 16 Jan 2009 19:58:14 +0000

Hard money loans are a specific type of asset-based loans. In this type of loan, a borrower receives funds that are secured by the value of a parcel of real estate. These loans are paid back with a higher interest rate than conventional commercial or residential property loans. This type of loan is rarely, if ever, issued by a commercial bank or other deposit institution.

Hard money loans are very similar to bridge loans. Bridge loans typically have similar criteria for lending. They also have similar costs to the borrower. The primary difference between a hard money commercial loan and a bridge loan is that a bridge loan frequently refers to a commercial property or investment property that is in transition. The property may not fully qualify for traditional financing yet. Hard money commercial loans refer not only to asset-based loans with a high interest rate but also loans for a financial situation that is possible distressed. Examples of this include cases where someone is arrears on an existing mortgage or where bankruptcy and foreclosure proceedings are already in process.

Hard money mortgages, both commercial and residential, are made by private investors. They typically make loans only in their local areas. The credit score of the borrower is not important because the loan is secured by the value of the collateral property. The maximum loan to value ratio is 65-70%. This means that if a piece of property is worth $100,000, the lender would give the borrower $65,000 to $70,000. This low LTV (loan-to-value) ratio gives the lender added security in the event that the borrower cannot pay and the lender has to foreclose on the property.

Commercial hard money lender programs are similar to traditional hard money loans in terms of the LTV requirements and interest rates. A commercial hard money lender is typically a strong financial institution with the deposits and abilities to make discretionary decisions on loans that are non-conforming. These borrowers do not conform to the standards of Fannie Mae, Freddie Mac, or other residential conforming credit guidelines. Since it’s a commercial property in question, the loan does not generally conform to a standard commercial loan guideline either.

Traditional commercial hard money loans are very high risk and have a higher than average default rate. Just like in a normal commercial loan, when a property owner defaults on a commercial hard money loan, he or she can potentially lose the property to foreclosure.

For more information on hard money lending, please visit http://www.pitbullmortgageschool.com.

Joseph Devine

admin — Fri, 19 Dec 2008 03:08:53 +0000

titleManaged Forex Accounts – EUR-USD Outlook 2008, 1 of 3/titlepThe US dollar was the big story in 2007 – if you were selling it. Compared to 2001, the value of the dollar has gone down by 40 percent against the Euro. And values at the beginning compared to the ending of 2007 were significantly down: the dollar was down about 13 percent versus the euro, 10 percent versus the yen, and 8.5 percent versus the pound sterling. Its value was at such a record low that supermodels and popular rappers made public their preference for getting paid in Euro, no dollars, please. The US dollar did stop skidding towards the end of 2007, but the question now becomes: has the dollar bottomed out or will the slide continue in 2008?/ppWhy the Dollar Weakened in 2007/ppThe dollar seemed so weak in 2007 because the rest of the global economy continued to grow even as US growth stalled, due in part to steady demand from the Middle East, China and India markets. Countries acted more independently, as illustrated by the Australian central banks decision to increase rates to stave off inflation at precisely the time the US Federal Reserve was cutting interest rates. Before December in fact, interest rate cuts happened only in the US. In short, some sort of decoupling occurred in the global economy, and this was a key factor to the strengthening of the other currencies and the weakening of the US dollar./ppThere are signs, as we begin 2008, that the phenomenon will no longer obtain this year and the global economy will again move more closely in step. In the latter half of 2007, economic growth in the UK and Canada slowed down indicating that the two countries were being weighed down by the weak US economy. In addition, the shock waves of the US subprime mortgage crisis have also shaken the financial markets of many countries, particularly the UK, where growth in the past years has depended on housing, mortgages, and the public sector. There are also signs of strain in the Eurozone, notwithstanding the ECBs hawkish position on monetary policy. The pressure to reduce rates will increase if growth continues to weaken further in the US or in other countries. The pressure already forced the UK Bank of England to cut rates in December and more cuts are forecast for 2008./ppInterest rate cuts will be the thing to watch in the currency market. The US Fed has already lowered interest rates 100bp in 2006 and another reduction will be more in line with expectations; but if the Eurozone begins to lower rates, this would be a significant departure from current policy, which could signal a major change in the outlook for the euro./ppWhere US Economy Is Going/ppThe big question is whether or not the US economy is going into a recession, which would seriously impact global growth. Majority of the American public thinks the economy is already in recession, according to polls released in December. Public perceptions notwithstanding, economists think otherwise. A Business Week survey on 54 economists in December showed that the group believes the country will reflect a 2.1 percent growth by the end of 2008 (it registered 2.6 percent growth in 2007). They believe that although the first half of 2008 will be difficult, consumer spending will not stop, albeit more restrained. Fundamentally, the forecast of no recession rests on the assumption that the Federal Reserve will continue its round of rate cuts. Although financial losses in the subprime sector will continue, consumer confidence will depend largely on the Federal Reserves actions to support economic recovery./ppA a TARGET=_BLANK href=http://www.fx-forextrading.com/managed_forex_account.htmmanaged forex account/a can generate 10%* interest or more a month! Let our professional forex managers trade your forex account! With a a TARGET=_BLANK href=http://www.fx-forextrading.com/managed_forex_account.htmmanaged forex account/a you are always in control of your funds! a TARGET=_BLANK href=http://www.fx-forextrading.com/managed_forex_account.htmhttp://www.fx-forextrading.com/managed_forex_account.htm/a/pp*Past performance is no guarantee for future performance!/pbrbr

Bridging Loans UK – Finance to Fill the Cash Void

admin — Sat, 13 Dec 2008 17:59:59 +0000

Generally, before purchasing a new property, you tend to sell of the existing one. But the transaction does not seem to be so simple. What if you do not have the required cash to procure the property prior to the selling of existing property? There is nothing to worry as the UK loan market is now offering bridging loans. These loans offer you the financial support, so that you can clinch the deal without facing too many obstacles. The main function of these loans is to fill the cash void and hence justifies the name.

These are secured loans where in you have to pledge your existing property as collateral, as an assurance for the lender. Through these loans, you can avail amount in the range of £100,000-£400,000 and is mostly based on the equity value present in the collateral. Although these loans are secured against an asset, the repayment term is small and stretches for a period of 1-12 months. This time period is sufficient enough to sell off your existing property and repay the borrowed amount, within the stipulated time period.

Although the amount is secured against an asset, the loans carry a marginally high rate of interest. This is due to its short term availability. Further these are interest only loans i.e. you have to pay the interest only for the entire duration. Therefore, before availing the loans you should make a proper research to spot lenders offering competitive rates.

These loans are also made available even if you are having a history of bad credit such as CCJs, IVA, arrears, defaults etc. However the interest rates levied will be slightly higher. in fact , by paying back the borrowed amount the borrowers can increase their credit ratings.

Most of the borrowers prefer to avail these loans through the online mode. There are scores of lenders in the online market who are offering these loans at competitive rates. By collating and comparing the quotes, you can pinpoint lenders offering low rates that suit your circumstances.

By availing bridging loans UK, you do not have to worry about arranging the finances to bridge the cash gap. Thus with these loans, you can procure you dream property without any hiccups.

Peter Taylor is a senior financial analyst at 24hrbridgingloan with an acumen for finance and insurance. In recent years he has taken up to provide independent financial advice through his informative articles. To find Bridging Loans UK,bridging loans, 24hr bridging loan, short term bridging loans, easy bridging loan visit http://www.24hrbridgingloan.co.uk.

“Secured Personal Loan Finance Uk-Features & Benefits”

admin — Wed, 10 Dec 2008 07:39:51 +0000

This Article is aimed at those Uk clients undecided whether to Remortgage or take out Secured Personal Loan Finance. Lets examine the Generic features of why someone may choose secured Personal Loan Finance:-

Combine all monthly credit outgoings into 1 single monthly payment

High interest rates on existing credit is unmanageable

Those requiring to quickly raise funds as Remortgaging is slower

People that have heavy Mortgage redemption penalties to exit existing Mortgage Lender

Been declined a Remortgage due to low Income multiples

Home loan is based on affordability not income multiples

Existing Mortgage rate is highly competitive & do not wish to Remortgage

May not wish to pay potential upfront fees for a Capital Raising Remortgage

Existing credit profile is poor & you do not wish to fully remortgage to a Sub Prime Lender

You wish to wait until your poor credit is out of date before remortgaging again

Declined a Remortgage by their Mortgage Lender due to their Loan to Value property rating

Mortgage arrears currently & existing lender will not advance further funds to remortgage

Note these features are for guidance purposes only & are not to be seen as a personal recommendations.

We act as Secured Personal Loan Finance Introducers only to professional brokers authorised & regulated by the FSA and FISA therefore we do not give advice. Credit subject to status. This will give you an idea of what may be possible.

Thank you for reading this article. Need Secured Personal Loan Finance Broker help on this subject – please click on the link below.

http://www.creditfinancecentre.co.uk/secured_personal_loan_finance.html

Martyn Spencer Bcs (Hons) Cert PFs – has 25 years experience in UK Financial Services. He is Director of the UK Credit Finance Centre, a unique website allowing customers to access UK Brokers for those looking for Mortgages, Loans, Debt Consolidation & Insurance.

CYTO: CYTO is a Great Buy

admin — Tue, 25 Nov 2008 01:21:45 +0000

Coming off its 52 week high and its recently reported earnings (August 7, 2006), Cytrogen Corporation may be one of the best buys you can find out there. The company recently posted excellent fundamentals with a 0.32 EPS when the market was expecting -0.30, and increased both its revenue and profit relative to one year ago.

For the most part, a lot of the extra income had come from Cytrogen’s joint venture with PSMA Corporations, but such an activity does not mean that CYTO is not a perfect buying opportunity. While a few investors may argue that the stock was recently near two dollars which exceeded its previous 52 week low, CYTO is continuously growing and still presents itself as a chance for a profitable mid to long term investment.

As a biopharmaceutical company, such a sector usually does well during periods of slow economic growth. As interest rates are at near its maximum, economic growth will become a bit of concern but should ironically help CYTO’s price. Typically, during slow growth inelastic goods and services produced by companies such as in healthcare tend to do well because the decrease in income help consumers allocate more of their assets into these inelastic companies. Such distribution aids in future earnings and revenue growth, and CYTO is no exception to such a trend.

With excellent fundamentals, and optimistic outlook, and price just coming out of its 52 week low, I would look for CYTO to be a real bargain around the 2.30-2.50 mark. Having a 52 week high of near 5.30, a 17.00 one year target, and positive, but relatively not to high P/E ratio this quarter, I would absolutely recommend Cytrogen as a strong buy.

Dennis Biray presents advice on all kinds of topics ranging from finance and investing to fitness to sports. For more information email him at dbiray@gmail.com, or to view other articles written by him visit http://www.biraynetworks.co.nr/.