What has happened to the SBA Community Express loan program?
In recent months, the #1 SBA program has been all but non-existent. A program which was the savior to most people in need of quick capital has been all but put on hold. This is due to the federal government enforcing a CAP on community express lenders. The SBA rules state that a pilot program can not exceed more than 10% of the entire 7a loan volume within a given year. This year, due to the economic recession and credit restraints the banks have imposed on their lending criteria, the SBA Community Express Loan was helping people with the financing of their business. Thus, the program exceeded the 10% production volume and the government decided to audit the program to verify its efficiency.
The Community Express Loan has an SBA guarantee of 85%, limiting the lenders risk to only 15% compared to a 100% risk the banks would have on conventional non-SBA loans. This makes it easier for lenders to approve deals due to the lower risk. Typically, individuals who do not qualify for a loan are eligible under the Community Express program because the SBA’s goals are to enhance Small Business activity throughout the country by offering guarantees to the bank on behalf of the client.
The two top Community Express Lenders, Innovative Bank and Superior Financial Group are now in a phase of slow down due to the cap. In late May, the lenders were told by the SBA that they were not to exceed a certain number of loans per month. Superior Financial Group was told that they were not allowed to fund more than 75 loans per month compared to the 250 loans they were funding monthly. This means that the 175 loans which were being pushed to the next month were not only getting delayed but rather the new loans coming in month 2 were set to fund at even a later date.
In mid July, we were told that the cap has once again been reduced from 75 loans to 10 loans a month. We were not only shocked but worried that the Community Express Program which was set up to assist Small Businesses with capital was going to be around long enough to continue to make an impact on the growth of Small Businesses. Due to the latest restraints on the program, only the businesses which are approved for the highest amounts are being funded because lenders make the most money on the higher loan amounts due to the interest income received.
What’s next for the Community Express Loan program?
We are told that once the audit is over there will be a decision on the program come the new SBA fiscal year which begins October 1-st. We think that there are really 3 things that may happen. 1. The program passes the audit and the Community Express Program continues as a permanent loan program instead of its current pilot status. 2. The program is restructured with new guidelines and requirements. 3. The program is canceled due to its inefficiency. Whatever happens to the program, SBA will remain a key advocate for small businesses through its other programs and services.
Secured loans UK are particularly useful in situations where you want a big loan amount. The philosophy behind secured loans is same as in the case of ‘give and take’ concept. In case of secured loan, a borrower gets a big loan amount and the lender gets security for that loan amount. So, the lender feels assured in the presence of a security, and the borrower gets a big loan amount at low rate of interest. Secured loans UK are beneficial for both the borrowers and the lenders.
The loan amount that you can get in case of secured loans depend on many factors like the value of your security, your loan-to-value (LTV) ratio, credit rating, repaying capability, etc. The equity in your home affects the amount of loan that you can get from the lender. The loan to value ratio is the amount of loan expressed as a percentage of the total value of the equity. The lower the LTV, the more favourable will be your chances of getting secured loans UK.
You can take secured loans UK for many purposes like debt consolidation, home improvement, car purchase, etc. Secured loans UK allow you to repay your existing debts. If you are repaying monthly bills to several credit card companies, then debt consolidation process may result in huge savings as far as the interest payments are concerned. However, if you are in a financial crunch and want only to extend the loan repayment period, you may do so at the cost of additional interest payment. Similarly, if your home improvement plans require huge funds, secured loans UK may be a right choice.
Before you finally close the deal with your lender, make sure that you have properly understood the nuances of the loan agreement. Any confusion should be sorted out beforehand, so as to avoid later complications.
It is suggested that you get to know these key mortgage terms before you purchase a home refinance your current loan, or take out a second mortgage. Understanding these terms can help you find the right loan and you might even save some money refinancing with your industry knowledge.
Adjustable Rate Mortgage (ARM)
A mortgage loan with an interest rate that changes periodically based on the changes in a specified index. The adjustment period is the frequency that the lender adjusts the interest rate on a variable-rate mortgage loan. For example, a 3-year ARM would have an adjustment period after the first 3 years.
The amount of time required to amortize the mortgage loan. The amortization term is evaluated as a number of months. (ie. a 15-year fixed-rate mortgage, the amortization term is 180 months.
Annual Percentage Rate (APR)
The effective interest rate paid on a loan, expressed as an annual rate. APR measures the true interest cost of borrowing by including any fees or prepaid interest involved in obtaining a loan. For instance, if a borrower pays $2,000 in closing costs to obtain a $10,000 loan but only receiving net proceeds of $9,500. The federal Truth-in-Lending Act requires lenders to disclose the APR.
The Appraised value is the market value of an asset that is derived from the appraisal process. Depending on the asset, the method used to appraise the asset will differ. For homes, appraisers often use a method that includes recent sales data of comparable homes. They may also use the replacement method, which is the cost to replace the home at today’s prices.
An increase in the value of a property due to changes in market conditions or other causes.
Anything of monetary value that is owned by a person. Assets include real property, and personal property. Liquid assets like bank accounts, stocks, retirement are important.
Cash Out Refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. Refinance loans offer the borrower additional money for multiple purposes.
Combined Loan-to-Value (CLTV)
The unpaid principal balances of the 1st and 2nd mortgages on a property divided by the homes’ appraised value.
An interim loan for financing construction costs. The bank or lender makes payments to the builder at periodic intervals as the work progresses.
A report of a person’s credit history reported by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness. (3 Credit Repositories are Trans Union, Experian and Equifax.)
Debt to Income Ratio
Monthly debt and mortgage payments divided by gross monthly income.
Deed of Trust
The document used in some states instead of a mortgage; title is conveyed to a trustee.
A decline in the value of a home or a decrease in your home’s equity.
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
Equity Line of Credit Draw
Draws are withdrawals that you make on a 2nd mortgage line of credit. With a credit line, you only pay interest on the amount of money you access, and only for the period that you have borrowed the money.
Fair Market Value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
This institute is chartered by Congress, and is a shareholder-owned company that is the nation’s largest supplier of home mortgage funds.
A government mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
A mortgage that is the primary lien against a property.
Fixed Rate Mortgage
A mortgage in which the interest rate does not change during term of the loan. Fixed rate mortgages have a specified number of payments.
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
Good Faith Estimate
An estimate of charges which a borrower is likely to incur in connection with a settlement.
Insurance protecting against loss to real estate caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.
Home Equity Line of Credit
A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. The minimum payment due each month is interest only.
Home Equity Loan
a loan secured by a second deed of trust on a house, typically used for debt consolidation or for home improvements.
Interest-Only Loan Option
Loan payments have two components, principal and interest. An interest-only loan has no principal component for a specified period of time. These special loans minimize your monthly payments by eliminating the need to pay down your balance during the interest-only period, giving you greater cash flow control and/or increased purchasing power.
Jumbo Mortgage Loan
Loan amounts above $417,000 are considered non-conforming or jumbo mortgages and are usually subject to higher pricing.
Lien An encumbrance against property for money due, either voluntary or involuntary.
Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. Usually required for loans with an LTV higher than of 80%.
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.
Mortgage loans used for paying off one loan with the proceeds from a new loan using the same property as security.
A home equity loan, mortgage or lien against a property, held in 2nd position.
Stated Income Loans
Some loan products require only that applicants “state” the source of their income without providing supporting documentation such as tax returns.
Insurance against loss resulting from defects of title to a specifically described parcel of real property.
A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.
A government agency guaranteeing mortgage loans with no down payment to American veterans.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.