Stanford Financial Accused of a Long-Running Scheme

By JULIE CRESWELL and CLIFFORD KRAUSS
Published: February 27, 2009

Late last fall, one of Stanford Financial Group’s top salesmen in Miami sent a frantic e-mail message to Laura Pendergest-Holt, the chief investment officer for the brokerage firm. A client with $20 million in Stanford’s Antigua-based bank affiliate had grown nervous about its financial safety and wanted to withdraw his money.

In truth, the funds were far from secure. Inside the Stanford empire, Robert Allen Stanford and his chief lieutenant, James M. Davis, were preparing to sell off large chunks of the bank’s investment portfolio and move hundreds of millions of dollars in and out of the bank’s three-tiered structure.

But Mrs. Pendergest-Holt, who had been groomed for a role at Stanford since the age of 15 by Mr. Davis, a patriarch from their hometown of Baldwyn, Miss., told the salesman he could report that nothing was wrong and that his client’s assets were safe.

On Friday, the Securities and Exchange Commission accused Mr. Stanford and Mr. Davis of executing a “massive Ponzi scheme” over the last decade, in which they misappropriated funds and made more than $1.6 billion in “bogus” loans to Mr. Stanford. The agency, in a revised complaint, also accused the men of falsifying financial statements to investors who bought $8 billion worth of certificates of deposit whose large returns turned out too good to be true.

Also Friday, Mrs. Pendergest-Holt appeared at a bail hearing in Houston after the F.B.I. arrested her for obstructing the S.E.C.’s inquiry into one of the largest suspected international financial frauds to come to light. Authorities say she failed to reveal the extent of her knowledge about where as much as $5 billion of the banks’ assets were when she testified before the agency in early February. Her defense lawyer, Dan Cogdell, said she would plead not guilty when she is arraigned in Dallas, where the criminal charge was filed. He said there was “no proof” she did not cooperate with investigators.

The government lawyer, Paul Pelletier, said, “She is one of three people who had access to $6 billion now missing to investors.”

Numerous interviews with former Stanford employees and testimony provided in court documents indicate that over time, top managers surrounded themselves with a team of friends, family and acquaintances who had little financial experience, but were as close-knit as the small Southern towns from which several of them came. On Friday, the S.E.C. said these ties created an environment that left “no independent oversight" over the Antiguan-based bank’s assets.

Indeed, the comfortable relationships meant that Mr. Stanford and Mr. Davis were almost never questioned about what they were doing with the money, according to Stanford employees.

In earlier testimony to the S.E.C., Mrs. Pendergest-Holt said that only Mr. Stanford and Mr. Davis knew the status of billions of dollars stashed in an opaque part of the bank’s portfolio known as Tier III. Tier I, roughly 10 percent of the bank’s assets, was in cash, and Tier II, another 10 percent of assets, was overseen by Mrs. Pendergest-Holt and invested with more than a dozen fund managers worldwide.

According to the F.B.I., however, only four days before testifying, Mrs. Pendergest-Holt gave a presentation in Stanford’s Miami office that was attended by Mr. Davis, as well as a number of Stanford executives and an unidentified outside lawyer representing Stanford Financial. The purpose of the meeting was to discuss the financial details she would need to present in her testimony to the S.E.C.

According to the F.B.I. affidavit, during the meeting “executive B,” or Mr. Davis, gave her a data drive showing that the Tier III asset group included more than $3 billion in real estate holdings and $1.6 billion that turned out to be a “loan to shareholder,” believed by those present to be Mr. Stanford. The information shocked and upset a number of executives present, all of whom had been told time and again that the firm’s investments were legitimate. A number of them are now cooperating with government investigators.

In her S.E.C. testimony, however, Mrs. Pendergest-Holt did not reveal these details, despite repeated questioning. Thomas V. Sjoblom, a lawyer with Proskauer Rose who represented the firm and who was present during Mrs. Pendergest-Holt’s testimony before the S.E.C., withdrew his counsel the day after her testimony. Two days later, Mr. Sjoblom, who had spent 20 years with the S.E.C. before entering private practice, disavowed all previous oral and written representations he had made to the S.E.C. on behalf of the firm.

Calls to Mr. Sjoblom’s offices were not returned. Mr. Stanford and Mr. Davis, who have not been criminally charged, could not be reached for comment.

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"Mortgage Loan Welfare"

Posted by: Chris Palmeri

Figuring out a solution to the foreclosure crisis is turning out to be a divisive issue. Nobody wants to see people get kicked out of their home, but as my wife said reading the paper yesterday “Can I get a reduction in my mortgage too?”

Congress is presently debating Rep. Barney Frank’s proposal and others to offer federal funds to restructure home loans. The Bush Administration says its against such a widespread bailout. FreedomWorks, a Libertarian non-profit with former House majority leader Dick Armey at its head, is busy drumming up opposition to such a bailout. Their AngryRenter.com Web site says its generated 44,000 emails from folks protesting the bailout to the White House.

They’ve got a funny video as well, telling the story of one guy (Bob) who bought more house than he could afford and a woman (Sally) who saved her pennies in the hopes she could buy a home down the road. “Tax Sally to bail out Bob?” the video asks. It’s what the site calls “Mortgage Loan Welfare.”

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Existing U.S. home sales, prices drop in January

By Lucia Mutikani

WASHINGTON (Reuters) - Sales of previously owned U.S. homes plunged in January, reversing the previous month's surprise jump, and prices spiraled down to a six-year low as the deep recession and rising joblessness took its toll.


A drop in number of unsold homes offered some hope for the housing market, the main trigger of the worst financial crisis in the post-war period.

The pace of sales of existing home fell 5.3 percent to a 4.49 million-unit annual rate in January, the National Association of Realtors (NAR) said, from the 4.74 million rate reported for December.

U.S. stocks extended losses on the dour housing report. Government bond prices, which normally rally on weak economic data, were depressed by worries about the amount of debt the Obama administration will issue to rescue the economy.

"The housing market remains the Achilles heel of the U.S. economy as prices fall and demand wanes," said Kathy Lien, director of currency research at GFT Forex in New York.

The median national home price declined 14.8 percent from a year ago to $170,300, the lowest since March 2003 when the median was $169,400, the NAR said.

Lawrence Yun, chief economist at the NAR said roughly two in five home sales were "distress" transactions where the mortgage company must erase some of the original loan amount in order to complete the sale.

"We are seeing worsening economic conditions - loss of housing wealth and in the stock market ... Very low confidence," Yun told reporters.

The collapse of the U.S. housing market and the resulting global credit crisis pushed the domestic economy into recession in December 2007.

Few buyers are willing to take advantage of the lowest home prices in several years as most households are experiencing sharp declines in wealth, compounded by rising unemployment and collapsing stock market prices.

BUYERS HOLDING BACK

"Home prices are continuing to slide. They're down 14.8 percent over the past year. That makes housing very affordable relative to income, but buyers are still holding back," said Gary Thayer, a senior economist at Wachovia Securities in St. Louis, Missouri.

"We probably need to see a little more confidence in the economy to get buyers back into the housing market and that's just not happening yet."

A separate report showed applications for mortgages fell last week as mortgage rates edged higher. The decline followed recent robust increases in applications after the government unveiled its strongest action yet to aid struggling homeowners.

The Mortgage Bankers Association's seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, fell 15.1 percent to 743.5 in the week ended February 20 after surging 45.7 percent the prior week.

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You’re fired — and you owe us money

Posted by: Adam Pasick

Taking back banker bonuses — known as “clawbacks” — has been mooted in the U.S. bailout of the financial industry, but Microsoft briefly broke some new ground this week by introducing the concept to severance payments.


Citing an accounting error, Microsoft notified laid off employees that they would need to give back part of their severance pay. The company graciously offered to accept either checks or money orders.

“An inadvertent administrative error occurred that resulted in an overpayment in severance pay by Microsoft,” a letter obtained by the blog TechCrunch reads. “We ask that you repay the overpayment and sincerely apologize for any inconvenience to you.”

Late on Monday, the software giant realized that its request may have seemed just a teensy bit insensitive, and dropped the “clawback” request.

“This was a mistake on our part,” said a Microsoft spokesman. “We should have handled this situation in a more thoughtful manner.”

If you lost your job and your former employer asked for some of the severance money back, what would your response be? (Reminder: this is a family-friendly website, so keep it clean!)

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Compare Student Loan Consolidation Rates in Selecting a Lender

by Torrie Cantor

If you want to select the best lender, compare student loan consolidation rates. A lot of students who have just graduated find it advantageous to consolidate student loans at once. The next crucial step would have to be choosing the right lender from which to apply a student loan consolidation from. Nowadays, there are many lenders that offer you different loan consolidation programs, each with various requirements, interest rates, and etc.


This article will give you some things to consider when choosing a lender. Although it is very important for you to compare student loan consolidation rates, you should also take into account some details in choosing a loan consolidation program and a lender.

Comparing School Loan Consolidation Rates

You could cut your student loan payments by up to 50% or more if you consolidate your student loans. This could mean big savings and thousands of dollars on the life of your loan. You could also be able to lock down a low and fixed interest rate for your monthly payments.

Inquire about the rates. When choosing a lender, you should ask them about the rates that they can give you. Usually, the interest rate on a consolidation loan is calculated by getting the weighted average of the interest rates (as of the date the application is received by the lender) on all the loans you are consolidating, rounded up to the nearest one-eight of a percent.

Other Things to Consider

Of course, there are other things to look into. It will also be wise if you ask your lender to figure out your monthly payments and how long it would take for you to fully pay the total loan balance. Also, you should try asking about incentives, like additional breaks on interest if you make your payments through automatic debits each month or if you consistently make on-time payments for a specific period of time.

Requirements

Lenders may ask for different requirements. There are some lenders that will require you to have a co-signor, some optional, and some do not require this at all. In lending companies that posts this as optional, having a co-signor with a good credit background will let you enjoy some benefits like lower interest rates.

While some lenders require collateral, some don’t. Some lenders also set a minimum balance policy, and the amount varies from one lender to another.

Application

Easy application process is also one thing to look for in a lender. Now, there are some lenders that provide online application that can be accomplished in just a matter of minutes. The process is quick and all information released is kept confidential. After 15 minutes of submission, you will be immediately called by a customer service representative on the contact number that you provided.

Service

Service is very important. If you’re comfortable and satisfied with your current lender’s service, then you can just check with them to see if they offer loan consolidation. Either that, or you can check your school’s financial aid offices for a list of preferred lenders who have provided tried-and-true working experience to former students.

Those are some things to look out for. So if you are choosing a lender, compare student loan consolidation rates and other details.


About the Author:
Start applying for school loans consolidation online. Compare student loan consolidation rates from the top sources online.

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Loans - Personal Loans on the Internet

by Hanes Bauer

The internet is a wonderful place to find information. You can educate yourself about personal loans on the internet. There are many great sites that explain the types of loans to you. Here you will find definitions for terms pertaining to personal loans. You will also find sites that offer you tips and pointers for getting the best possible personal loan. If you are interested in comparing personal loan rates, the information is at your fingertips.

You can use the information on the internet about individualized loans to educate yourself about the dangers of scams in the area of individualized loans. This is valuable information that all of us can learn from. You can access the Better Business Bureau online to help you investigate a lender about doable issues prior to pursuing a individualized loan with them.

Many websites suggest we profitable collection for personal loans. A report is really extensive as good as a site is good designed. There have been dual sections upon a site which concede us a little good some-more aged selling for personal loans. A single territory is for cumulative loans as good as an alternative is for unsecured loans.

There are consolidation tools that allow you to enter the amount of money you own on various loans as well as the interest rate. The tool gives you the total amount you will pay overall to repay that debt. This will give you a number to use when deciding if a individualized loan to consolidate your debt with be cost effective.

Another great tool found on the internet will help you find the lenders who offer personal loans that meet your profile. This means you will be able to apply for a loan with a lender that is more likely to approve your loan than just randomly choosing a lender. To use this tool, answer questions with the drop down option that best matches your criteria. The questions will be about your credit rating, employment, the loan amount you are looking for, the length of repayment you are interested in, the purpose of the loan, and what types of collateral you have available.

Informing yourself about individualized loans before you apply for one will help ensure you are approved for the loan you need at the best doable rates. Using the tools acquirable online helps you make an informed decision about such loans as well as prevent you from falling victim to the scams out there. The online tools will help you find out if you can benefit from a individualized loan for debt consolidation as well as help you locate the lenders that are likely to offer a individualized loan that fits your individualized profile.

You can find the information on personal loans as well as the wonderful calculation tools for free on many websites. Don’t waste your money paying for such services when you can find it for free. If you have questions about any of the information you find on the internet regarding personal loans, consult a financial institution. This is very important to do if you are finding conflicting information on the internet. In addition to educating yourself on personal loans, consider looking up information on budgeting and financial planning to help ensure you will have a healthy financial history and credit score down the road.

About the Author:
More information on how to finance investment property ? defense finance accounting service You can visit: Financestar24.com

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Bad Credit Personal Signature Loan

by Rick Barrus

Even with a tarnished credit history it’s possible for you to obtain a bad credit personal signature loan, in fact they are just for people in your situation. With this ever changing financial market there are always new ways to lend and borrow money. Even though it’s best to come to the lending table with a good credit history, it can be done with a less then stellar one and the main setback you’ll come across will be the higher interest you’ll be charged.

So how can you get a bad credit personal signature loan? Well you’ll need fill out an application and see if the lender is willing to take a risk on you. There is no need for collateral with type of loan, just some personal information and a signature is all you need.

Since personal signature loans are based solely upon the good credit rating of the borrower, those who have a good credit history can get a signature loan more easily then those with a bad credit history. But do not dismay, because it is possible for someone with a roughed up credit history to obtain this type of loan. It might just mean that you may not be able to borrow as much money as your good credit history counter-part.

The most obvious use for this type of loan is to consolidate debts but they can be used for just about anything. From using them as student loans to pay for educational expenses to purchasing home appliances. It may even be the case you you’ll need this type of loan if you need some extra money until your next paycheck arrives.

No matter how you use it, a bad credit personal signature loan can get you through any tough spots in your financial journey. The good news is by consolidating you debts you’ll often get a lower interest rate overall then what you were paying individually on those debts. By doing this and by making your payments on time, you’ll not only help build a better credit score but you’ll also be satisfying all your creditors.

In this article we’ve covered the importance of a good credit score, but we’ve also talked about how it’s possible to get the money you need through a bad credit personal signature loan with your tarnished credit history. We’ve covered the best ways to use your signature loan and how it can help your credit score to make payments on time. If you’re smart you can really make great strides in improving not only your credit rating, but your quality of life.

About the Author:
If you’ve missed payments or had damaged credit in the past, Rick can show you how to get personal loans for bad credit and shows people how to qualify for the best personal loans uk.

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Secured Loans News - Loan Arrangers UK

Make sure the rate of interest doesn’t change
by Rem

For many couples, whether first time buyers or not, the prime thought when looking at a fixed rate mortgage is the monthly payment cost. A large number of people these days have decided to wait and are purchasing homes later but they also wish to settle their mortgage earlier. Although before signing any documentation, there is a great deal to consider.

Over the course of the mortgage, it’s essential to remember to make sure the interest rate doesn’t change. It is always wise to avoid agreements that appear to too good to be true because they invariably are. The interest rate remains the same for long term fixed rate mortgages over the life of the mortgage. There are no hidden surprises which is great for many people that need a set monthly mortgage payment. Both my wife and I decided to explore fixed rate mortgages when we started looking at homes for sale. Although it was fundamental for us to pay off our loan as soon as we could, we didn’t need high, unrealistic monthly payments which we would have a problem sustaining.

In addition to considering loans for a long term, fifteen year fixed mortgage rate we also looked into loans that spanned 30 years as well. The problem was that we weren’t very happy about having a mortgage still running close to when we both retired and hoped that a fifteen year fixed mortgage rate would still be accessible to us. We felt there was lots of insistence to have the house settled as soon as practicable and for the most part we agreed with this.

There were many things that factored into this; first of all, I learned that my wife was having a baby. Because my wife wanted to be at home for our child, her financial income would be uncertain and unreliable. Alas, a higher monthly payment is the downside of loans on a 15 year fixed mortgage rate plan. It was a case that we plainly didn’t wish to get in too deep and cause troubles in the future.

Despite the trepidation of having a longer term loan, the 30 years fixed mortgage rate did reduce the monthly installments considerably. During the year, if we have some spare cash, we can make additional repayments which helps to lower the amount owed. Just by making a handful of additional repayments throughout a one year period you can knock years off of your mortgage period.

As such the thirty year fixed mortgage rate brought the monthly installments down quite a bit. During the year, if we have some spare cash, we can make additional installments which helps to lower the sum of money owed. Just by making a handful of supplemental payments throughout a twelve month period you can knock years off of your loan period. Although this takes some discipline, it is well worth it in the long term. Under different conditions, we would have preferred to have taken out a mortgage with a 15 year fixed mortgage rate but we had to consider our other commitments as well. Despite all our worries, things turned out well for us in the end and we don’t regret our decision.
About the Author:
Also have a look at Cheap Home Blog and Low Cost Home Blog

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Personal Injury Lawyer

A personal injury lawyer is a lawyer who provides legal representation to those who claim to have been injured, physically or psychologically, as a result of the negligence or wrongdoing of another person, company, government agency, or other entity. Thus, personal injury lawyers tend to be especially knowledgeable and have more experience with regard to the area of law known as tort law, which includes civil wrongs and economic or non-economic damages to a person’s property, reputation, or rights.

Even though personal injury lawyers are trained and licensed to practice virtually any field of law, they generally only handle cases that fall under tort law including, but not limited to: work injuries, automobile and other accidents, defective products, medical mistakes, slip and fall accidents, and more.

The expression "trial lawyers" can refer to personal injury lawyers,[citation needed] even though most cases handled by personal injury lawyers settle rather than going to trial and other types of lawyers, such as defendants' lawyers and criminal prosecutors, also appear in trials.

Responsibilities
A personal injury lawyer has numerous responsibilities in serving his or her clients. These responsibilities encompass both professional and ethical rules and codes of conduct set forth by state bar associations where the lawyers are licensed. Once licensed to practice law by their state bar association, lawyers are legally permitted to file legal complaints, argue cases in state court, draft legal documents, and offer legal advice to victims of personal injury.

Also referred to as a plaintiff lawyer, a personal injury lawyer is responsible for interviewing prospective clients and evaluating their cases to determine the legal matter, identify the distinct issues rooted within the plaintiff’s larger problem, and extensively research every issue to build a strong case. The ultimate professional responsibility of a personal injury lawyer is to help plaintiffs obtain the justice and compensation they deserve for their losses and suffering through advocacy, oral arguments, client counseling, and legal advice.

Personal injury lawyers must also adhere to strict standards of legal ethics when dealing with clients. While the guidelines vary according to state, the basic codes of conduct state that a lawyer must knowledgeably evaluate legal matters and exercise competence in any legal matter undertaken. Moreover, personal injury lawyers owe their clients a duty of loyalty and confidentiality and must work to protect their clients’ best interests.

Certification and education
In order to practice law in the United States, a personal injury lawyer must pass a written bar examination and, in some cases, a written ethics examination. Bar examinations vary on a state-to-state basis. However, most states require applicants to have completed a four-year college degree and a law degree from an accredited law school (California is one notable exception, but the non-accredited law school must meet certain requirements.)[1]

In all states, a personal injury lawyer is required to take the Multistate Bar Examination (MBE), the Multistate Essay Examination (MEE), and the Multistate Professional Responsibility Examination (MPRE) and a state bar exam. Some states require another exam, the Multistate Performance Test (MPT), as well.

Once admitted to the state bar, personal injury lawyers must remain up-to-date on the latest legal and non-legal developments in their field of practice, by completing a required number of continuing legal education (CLE) courses to help personal injury lawyers stay abreast of developments in their field.

Lawyers can concentrate their practices to certain areas of law, which is typically true of personal injury lawyers. By limiting the range of cases they handle, personal injury lawyers are able to acquire specialized knowledge and experience. However, to be certified as a specialist in personal injury, a lawyer must complete a specialty certification program accredited by the American Bar Association (ABA).

Certification programs have set standards of competence, knowledge and experience that lawyers must meet in order to be recognized in their area of practice as a specialist. Lawyers who have completed a specialty certification program in personal injury law at an accredited certifying organization are recognized as personal injury specialists. Some states, such as New Jersey, offer a certification as a "Certified Trial Attorney", which can be for both plaintiff and defense attorneys.

Career structure
The career structure of most lawyers varies widely. Once licensed, a lawyer may take on any kind of case whether or not they have much experience in it. However, legal ethics require an inexperienced lawyer to enlist appropriate help or take the time to learn the issues to competently represent the client. Most lawyers prefer to stick to one area of the law to gain the knowledge and experience necessary to provide the highest quality legal representation to their clients.

Personal injury lawyers choose to delve into a more specialized area involving only personal injury litigation. Personal injury litigation involves a large number of claims including accidents, medical malpractice, product liability, workplace injury, wrongful death, and more. Some personal injury lawyers choose to devote the majority of their time and energy to one area of litigation within personal injury law, thus becoming more experienced at handling very specific types of cases (e.g. medical mistakes, aviation accidents, work accidents).

Doing business
As with other types of lawyers, personal injury lawyers may choose to start a solo practice or join a small, mid-size, or large law firm as an associate. Personal injury lawyers may also be partners (owners) of a law firm or strive to be a partner.

Sole practitioners of personal injury law offer a number of benefits to potential clients, which include more personal attention and a one-on-one working relationship between the lawyer and the client. Sole practitioners are also more willing to take on smaller cases and often have lower fees and costs.

A small law firm generally consists of two to ten lawyers who can provide more expertise in a given area of personal injury law and can handle a wider range of legal issues. Mid-size law firms with ten to 50 lawyers offer legal representation in almost every major area of litigation and may house several highly experienced and knowledgeable personal injury lawyers. Large law firms with more than 50 lawyers are often the most reputable, having built up the firm for a number of years and consisting of lawyers with high levels of expertise.

Compensation
Typically lawyers’ fees are based on a number of factors, which may include the time and energy spent on a case, the outcome of a case, the difficulty of a claim, the experience and prominence of the lawyer, and the costs associated with the case. There are several standard payment options a personal injury lawyer may offer his/her clients. These options include contingency fees, hourly rates, flat fees, and retainers.

A contingency fee is a prior arrangement between lawyer and client in which the lawyer receives a set percentage of the amount of recovery awarded to the plaintiff in a case. This means that a client has no obligation to pay his/her lawyer unless the case is successfully resolved. Most personal injury lawyers work on a contingency fee basis. An hourly rate is also a common payment option that involves an agreed amount of compensation for each hour the lawyer spends on the case until its resolution. In some cases, personal injury lawyers charge a flat fee, which is a set amount, or a retainer, which is an arrangement where a certain amount of money is paid before legal representation begins. These fee arrangements may also be combined.

Professional regulations and associations
Personal injury lawyers are regulated by codes of conduct established by state bar associations, which have the power to take disciplinary action against lawyers who violate professional or ethical regulations. The American Bar Association (ABA) Joint Committee on Lawyer Regulation offers assistance to state bars, helping them to draft, implement, and/or promote regulatory policies regarding personal injury lawyers.

Personal injury lawyers may belong to any number of professional associations, some of which are mandatory and others voluntary. For instance, personal injury lawyers are licensed by their state bar associations, of which they must be members. Among the more common professional associations that personal injury lawyers may voluntarily join are the following:

• American Bar Association – a professional association dedicated to improving the legal system and providing accreditation for law schools and continuing legal education programs (
• Association of Personal Injury Lawyers – an association founded in 1990 by personal injury lawyers on behalf of accident victims
• Association of Trial Lawyers of America – also known as ATLA, an association of trial lawyers that was founded in 1946 by a group of plaintiff’s attorneys committed to safeguarding victims’ rights. In 2007, ATLA changed its name to the American Association for Justice, also known as the AAJ, however the internet web site may still be located at http://www.atla.org

Criticism
The aggressive representation of injured parties by personal injury lawyers has spawned movements to establish tort reform in the United States in recent years. Tort reform proponents argue that such reforms are necessary because personal injury litigation has led to a substantial increase in health care costs; they further claim that many doctors have had to leave practice or relocate because of cost-prohibitive medical malpractice insurance rates. A recent publication by the Harvard School of Public Health found that in only 60% of medical malpractice litigation cases was there evidence of medical error.

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About Very Cheap Car Insurance

Are you searching for extremely cheap car insurance? Think you can use the money you save to invest in your home or have fun out on the town? Well, think again. Very cheap car insurance can hurt you in the short and long run. It hurts you when you want to receive good customer service, make a claim, pay off third-party vehicle or bodily injury damages and get better insurance. These three things may end up causing you a big financial loss, which will eat up all of the money you save in car insurance premiums.

Warning
Ever pay attention to those TV commercials advertising very cheap car insurance? The people in them look like the kind of folks you would rather not meet up with in a dark alley. And, unfortunately, they represent the kind of service you will get from insurance companies that specialize in cheap insurance. The callbacks and payments for claims are slow, and sometimes the people are rude. It all has to do with a substandard mentality about insurance coverage. So if you get into a jam and really need help from your agent or claims adjuster, you could be stuck without a lifesaver.

Effects
Very cheap car insurance has high deductibles and absent coverages. For example, collision and comprehensive deductibles will usually be $1,000 or above. If you hit a tree and have a $900 auto repair bill, you won't get paid anything. Also, similarly, if you decide to forgo collision and comprehensive coverage and get a liability-only policy, you won't be paid a dime for a stolen vehicle. As a result, you will pay more for your losses than if you had just paid for more expensive coverage.

Considerations
Another downfall of very cheap car insurance is that liability limits are usually low. Liability is the coverage that pays for an innocent party's injuries or car damages. It kicks in if you cause an auto accident. Unfortunately, if these limits are low, you could exhaust them and end up owing for outstanding medical bills or vehicle damages. Consequently, you won't be absolved from responsibility just because you run out of insurance. An attorney can put a lien on your house to compensate for his injured client. It's a scary situation that does happen to people with very cheap insurance.

Potential
The last way very cheap insurance can hurt you is when you want to get better insurance. If you decide that you want to pay for higher liability limits or add on additional coverage such as collision, it may not be available to you. Some insurance companies and agencies that specialize in subprime, cheap insurance don't offer a wide range of coverages to their customers. So if you want better coverage, you actually have to cancel with them and find coverage with a new company. It's a frustrating process that can take up a lot of your time.

Prevention/Solution
As you can see, there are a lot of things to consider when you purchase very cheap car insurance. Overall, you must decide if it is worth the risk. If you have a new car or a little money in the bank, it's best to pay the extra money to get adequate, full coverage. It is the only way to protect yourself from financial devastation in the future because of an auto accident.

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Finding Mortgages With Bad Credit

So, what do you do if your credit reports make you want to hide under the covers and never use your credit cards again? Relax, you can turn your ratings around.

Mortgage lenders look at the "age," dollar amount, and payment history of your different credit lines. That means opening accounts frequently, running up your balances, and paying on time or not at all can impact your credit score negatively. Just changing one of these components of your spending behavior can positively affect your credit score. Also, bad credit does not necessarily mean you can't get a mortgage, it will just come at a higher cost.

"Why Me?"

If you are having trouble getting a loan, ask your lender why. Chances are it will be one of these reasons for rejection:

• Overextended credit cards: If you miss payments or exceed your limit, that's a red flag to lenders.
• Failure to pay a previous or existing loan: If you have defaulted on other loans, a lender will think twice.
• Bankruptcy: Filed for bankruptcy in the past seven years? You might have trouble getting a loan.
• Overdue taxes: Lenders check your tax payment record.
• Legal judgments: If you have a judgment against you for such things as delinquent child support payments, it could harm your credit.
• Collection agencies: Lenders will know if collection agencies are after you.
• Overreaching: You might be seeking a loan outside what you can reasonably afford.

Fixing It

Many financial experts suggest common sense strategies to turn your credit report around:

• Always pay your minimum balance on time. Let's face it, credit card companies make profits on you when you maintain a balance. Just make sure you send them their due each month. Better yet, only spend what you can expect to pay back at bill time.
• Try to reduce balances. Even throwing in an extra $20 to $50 each month will help reduce the overall debt, and paying extra looks good on your credit report.
• Don't run up the entire balance: Having $100 left on a $10,000 line of credit doesn't look so hot. Lenders look at the dollar amount of credit available to you and, from there, what percentage of that credit you have used. In other words, if you have a card with a $1,000 limit and you've spent $900 on that card, you've used 90% of your available credit; this looks a lot worse than having a balance of, say, $200 on the card.
• Throw away new credit card offers. Don't apply for new cards and lines of credit right before you go home shopping. And when those clerks in the stores offer you a discount if you just open an account, say no. Banks will not turn a blind eye to numerous inquiries for new credit.

If bad credit continues to dog you, the FHA loan programs may be your ideal option. With down payments as low as 2%, Americans with good and bad credit have been getting into their first homes with these federally insured loans since 1934.

Bad Credit

Having bad credit is not the end of the world. It still may be possible for lenders to give you a loan, provided your credit score is not too low. But be aware that you may pay a higher interest rate and more fees since you are more likely to default (fail to pay the loan back).

There are ways you can improve your credit score, such as paying down your debts, paying your bills on time, and disputing possible errors on your credit report. But on the flip side, there are ways you can also hurt your score, so remember:

• DON'T close an account to remove it from your report (it doesn't work).
• DON'T open too many credit accounts in a short period of time.
• DON'T take too long to shop around for interest rates. Lenders must pull your credit report every time you apply for credit. If you are shopping around with different lenders for a lower interest rate, there is generally a grace period of about 30 days before your score is affected.

Fix Mistakes

In addition to cleaning up your debts, you also need to check your credit report to make sure it is accurate. This is important: Items that are just plain erroneous can stay on your report for up to 10 years if they are not disputed. By disputing it, you put the wheels in motion to clean up the report and get a better mortgage. Your credit bureau will attempt to get the disputed items deleted from your report by contacting the creditors involved. After 30 days, if the creditors do not respond, the item is deleted from the report. (You can also contact the creditors yourself.)

Even after you reverse the downward spiral of your credit history, you might need to tell a prospective lender that there may be some signs of bad credit in your report. This will save you time, since he will look at different loans than he might otherwise.

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Student Loan Consolidation

Consolidation combines your federal student loans into one new loan, which is then held by a single lender.

Quick Facts About Consolidating Student Loans
– Your new loan will have new terms and may have a new lender, servicer,or guarantor
– Consolidation can be facilitated by an outside agency that works on behalf of a lender
– Many lenders require a borrower to have at least $7,000 in student loans to consolidate
– Spousal consolidations (the combination of spouses’ loans) are no longer allowed
– You cannot consolidate while you are in the middle of your educational program. You must wait until you have stopped or completed the program
– You must have at least 1 eligible federal student loan to consolidate
– You cannot consolidate private and federal loans together
– Consolidators strive to include all outstanding federal student loans when you apply. To ensure all of your eligible loans are included in the consolidation, research your loan history before applying for consolidation. Start with the database at the National Student Loan Data System (NSLDS)
– When you consolidate, your new repayment schedule is reset to the standard repayment schedule. You may then choose a different payment schedule with your lender or servicer
– Loan consolidation cannot be reversed, and you can’t reconsolidate a loan unless you borrow additional federal Stafford or PLUS Loans


Parent’s Section
Parent PLUS borrowers can also take advantage of federal loan consolidation. In addition to consolidating the PLUS loans you have taken for your children, you can also consolidate your own student loans together with your parent PLUS loans or Grad PLUS loans. However, you may not consolidate your loans with your child’s loans.

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The Risk from Underwater Homeowners

Obama's $75 billion mortgage rescue plan doesn't address the danger that more homeowners whose equity has evaporated might just walk away

By Peter Coy and Theo Francis

The Obama Administration's $75 billion homeowner-rescue plan offers a lot of help to people in imminent danger of losing their homes. It does far less for those who are deep underwater on their mortgages but have the wherewithal to keep making their monthly payments. And that could be a problem—not only for those homeowners themselves, but for the banking system and the economy in general.

Here's the dilemma: Many homeowners owe more on their mortgages than their homes are worth, and—rightly or wrongly—increasing numbers of them may decide to give up and mail in the keys. The taboo against reneging on debts already shows signs of fading in hard-hit markets like Phoenix and Las Vegas. More abandonments would increase losses for lenders while damaging the vitality of neighborhoods.

There's not much in the Homeowner Affordability and Stability Plan announced on Feb. 18 to deal with this looming problem. Provisions to reduce monthly loan payments for homeowners who are struggling don't prevent these so-called "voluntary foreclosures," since in many cases the payments already are affordable. The most effective way to keep underwater homeowners from walking away en masse would be a big writedown of the principal they owe. That would give them positive equity in their homes—or at least the hope for it once prices begin creeping upward again—and with it, a reason to stay put. Although the Obama plan permits principal writedowns—and even pays off up to $5,000 of principal for homeowners who remain current on their payments—they aren't required, or even central to the proposal.

Temptation to Walk Away

Writing down mortgage debt on houses that are underwater could total $1 trillion or more. The value of underwater homes could be as much as $700 billion below the mortgage values, according to financial analysts and informal government estimates. Keep in mind, though, that this is not an actual expense because no dollars would change hands: The debt holders would simply be bringing their valuations in line with the reality that many of the loans are destined to be defaulted on. And banks would recoup even less if the homes are allowed to go into foreclosure unnecessarily than they would have in a writedown, because the owners will stop paying entirely. What's more, vacant houses are subject to vandalism that further erodes their value, and foreclosures drag down the value of neighboring properties.

For some of the roughly 10 million underwater homeowners, especially those with spotty credit records, the temptation is great to walk away. "It's just common sense," says Yale University economist John Geanakoplos. He takes pains to say he's not defending the behavior, but adds, "If your house is worth much less than the loan, you're pretty sure you'll never really own it. You'll just go rent somewhere. The only bad thing is the mark on your credit rating, which for these people wasn't too good in the first place."

Even for those who want to keep their homes at the moment, reducing monthly payments without addressing negative equity may just postpone the inevitable. "The reality is, people lose jobs, especially in a recession. People get transferred, people have to move at some point," says Sean O'Toole, founder and CEO of ForeclosureRadar.com, which tracks California foreclosures. "By lowering payments and not principal balance, you're guaranteeing the extension of this crisis for years to come."

Why Default Rates Skyrocket

How big is the risk that many more Americans will give up and walk away from their homes, figuring that paying the mortgage every month is throwing good money after bad? A widely cited study by the Federal Reserve Bank of Boston found, seemingly reassuringly, that only about 6% of people who were underwater on their mortgages in the 1991 regional housing slump eventually faced foreclosure.

But Yale's Geanakoplos says the danger is much greater this time. Housing prices have fallen more, and many more of the loans were made to people with bad credit. His research using more recent data finds that default rates skyrocket when subprime or option adjustable-rate mortgage borrowers owe more than their houses are worth. The default rate is about nine times as high for people who are way underwater as for people with substantial equity in their homes, all else equal, Geanakoplos found.

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Pssst! Wanna Go to College for Free?

Tuition-Free Colleges

Ever thought the only way your children were going to get a free college education was if they were football stars or award-winning trombonists? Think again

By Alison Damast

Students and parents obsessing over how they are going to pay for college might want to consider one of higher education's greatest secrets: tuition-free colleges.
Although these schools are few and far between, they remain an attractive option for students looking to walk away from college debt-free. Most were founded nearly a century ago and are able to offer students zero tuition because of hefty endowments and magnanimous donors. These colleges range from liberal arts schools to ones that specialize in engineering, art, and music. Some come with unusual work-study requirements—such as requiring students to put in time on the school's dairy farm—or mandatory campus activities. Students who attend these schools can save as much as $32,000 or more in tuition each year, savings that can add up to more than $120,000 over a four-year period. Not surprisingly, some of these schools are among the most competitive to get into in the U.S.
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Trump's "golden" image on trial after bankruptcy

By Helen Chernikoff and Ilaina Jonas - Analysis

NEW YORK (Reuters) - Trump Entertainment Resorts Inc's bankruptcy filing is only the latest disappointment to attach itself to the Trump name, once a byword for luxury and high living.

Donald Trump, the real estate mogul who has splashed his name on everything from skyscrapers to neckties to bottled water, has suffered a string of recent reversals that threaten to dilute his cachet, say branding experts. His name, which he often licenses to real estate projects in which he has no direct control, has earned him millions.

"His brand is associated with success and making money. And every time the word bankruptcy appears next to Trump, that's not good," said Allen Adamson, managing director of Landor, a brand consultancy. "He can take a few chinks in the armor, but I think he's probably at the limit."

Famous for shouting "You're fired!" at the contestants who aspired to his tycoon status and lavish lifestyle on "The Apprentice," his long-running reality TV series, Trump would never fire himself. But image watchers will be looking for signs he may have lost some of his luster, as the latest season of his show premieres on March 1.

Deutsche Bank Trust Co Americas, a unit of Deutsche Bank AG, is suing Trump for $40 million, the personal guarantee he pledged as security on a $640 million construction loan for the Trump International Hotel & Tower, according to lawsuits filed in New York Supreme Court in Queens.

He defaulted in November, arguing he should not have to pay over $330 million he owes because the world economic crisis constitutes a "Force Majeure" -- equating it with war or an act of God.

He also seeks $3 billion in damages, according to court documents.

Becoming "president" of the development was the prize awarded to Bill Rancic, The Apprentice's first winner.

In Dubai, Nakheel, the property arm of Dubai Holdings, has postponed work on Trump International Tower and Hotel.

Similarly, Florida developers decided not to proceed with a Trump-branded project even after they paid $2.84 million plus half the net sales to put his name on it, according to court documents filed in U.S. District Court in Tampa.

Another risk Trump runs is the clash between his reputation for luxury and living large and the tough economic times, which calls for understatement, Adamson said.

BRAND BUILDING

Trump's merchandise, as advertised on his website, is far from understated.

"Dress for success," reads the text touting his men's suits. "Made from luxurious fabrics with elegant details including silk lining and gold piping on the interior, the collection exudes confidence and high-end style."

That tone sounds a false note today, Adamson said, because the trumpeting of big spending is out of fashion.

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9 million +

The housing plan President Obama unveiled today could directly help up to 9 million people -- but indirectly, it will help all of us.

"In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen," President Obama said today in Phoenix, AZ. "But if we act boldly and swiftly to arrest this downward spiral, every American will benefit."

He laid out the four key elements of the Homeowner Affordability and Stability Plan:

1. refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
2. new incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
3. steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
4. additional reforms designed to help families stay in their homes

"The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly," the President said, "by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments."

We've put together a few documents that will help you understand the plan, how it will work, and how it will affect you:

Executive Summary
Fact Sheet
Housing Example Sheet
Q&A

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Launching bussiness-reader.blogspot.com

Thanks for visiting B-R (bussiness-reader.blogspot.com). We’re here to provides trusted World and USA business news. If you’re interested in business, finance, science, technology, and entertainment news, we hope you’ll bookmark us or subscribe via RSS. We’re new, so we’re keeping things simple for now.

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