Archive for: ‘August 2013’

Government Relaxes Mortgage Down Payment Standards

August 30, 2013 Posted by kingcade

This week, Federal regulators proposed a new rule that would make mortgage lending standards less restrictive. The proposed Qualified Residential Mortgage rule was supported by both consumer advocates and mortgage industry members- an otherwise rare occurrence- largely because it eliminates much stricter down payment rules that the previous version of QRM would have created.

The Consumer Financial Protection Bureau’s Qualified Mortgage (QM) rule requires lenders to underwrite home loans based on the borrower’s ability to repay the loan, a step the agency took to combat some of the bad lending practices that led to the housing crisis.

Under the CFPB’s QM rule, borrowers must provide income documentation that they can repay the loan, and that their debt-to-income ratio does not exceed 43 percent, among other requirements. It does not, however, have any rules requiring lenders to ask for a set down payment amount.

QRM would have required lenders to demand a 20 percent down payment from borrowers. The rule was intended to prevent unqualified borrowers from taking out a mortgage they can’t handle, but housing advocates and mortgage industry members argued that it instead prevented too many qualified and responsible low- to middle-income borrowers from taking out a mortgage.

According to some housing experts, aligning the QRM rule with the QM rules will allow more American families to become homeowners and ensures that housing markets can remain strong in the future. This is especially important for communities that are still rebuilding from the foreclosure crisis.

The National Association of Realtors President Gary Thomas called it a “a victory for homebuyers and the future of homeownership in this country.”

Click here to read more the new rule that would make mortgage lending standards less restrictive.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the website, www.miamibankruptcy.com.

A Roadmap out of Bankruptcy

August 29, 2013 Posted by kingcade

People who file for bankruptcy can sometimes feel ashamed, hopeless and overwhelmed. But it may be a comfort to know that you are not alone. According to the American Bankruptcy Institute, the number of July bankruptcy filings came to 87,684.

Below are eight tips on how to recover after filing for bankruptcy:

1.) Address what caused the bankruptcy. This will help you avoid ending up in the same predicament five years later. Set a new budget and look for different employment opportunities.

2.) Identify your goals. These can include paying off old debts or rebuilding your credit score. Whatever these may be, it’s important to write down these goals and work towards them.

3.) Check your credit score. Inaccurate information on credit reports is becoming more common and can affect everything from qualifying for the best mortgage rates to getting hired for that dream job you recently applied for. Simply removing incorrect information from your credit report can oftentimes improve your score.

4.) Gradually re-establish credit. Taking out two credit cards and paying them off monthly can help rebuild your credit score. After seven to 10 years of doing this, your score could look as good as new!

5.) Find a new credit card issuer. While lenders are sometimes hesitant to give credit to people that have recently filed for bankruptcy, there are some that are willing. The terms may not be ideal at first, but these new accounts will help rebuild your credit over time.

6.) Avoid unfair deals. Predatory lenders oftentimes target the most vulnerable groups, including recent bankruptcy filers. You should be weary of payday loans and rent-to-own deals that carry high interest rates.

7.) Seek support. Surround yourself with positive people following your bankruptcy. Online communities of people going through the same thing can offer much needed support.

8.) Think positively. Most people’s credit improves after filing for bankruptcy. Many of the clients I help, their only regret is that they didn’t file sooner. While bankruptcy will stay on your credit report for up to 10 years, many creditors are more than willing to lend you credit after you have filed for bankruptcy.

Click here to read more on a roadmap out of bankruptcy and into recovery.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

FHA Shortens Waiting Period for Borrowers Who Experienced Foreclosure or Bankruptcy

August 28, 2013 Posted by kingcade

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu or short sale to reenter the market in as little as 12 months. Previously, borrowers who experienced a foreclosure had to wait at least three years before getting a chance to be approved for an FHA loan. To qualify for the more lenient approval process, documents must show ‘certain credit impairments’ were from loss of employment or loss of income that was beyond the borrower’s control. The lender must also verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling. Housing counseling must come from a HUD-approved housing counseling agency and be completed at least 30 days but no more than 6 months before applying for a loan. Recovery from an economic event involves reestablishing ‘satisfactory credit’ for at least 12 months. The criterion for ‘satisfactory credit’ includes 12 months of good payment history on either a mortgage, rent or credit card account.

This more lenient approval process applies to case numbers assigned on or after August 15, 2013 and is effective through September 30, 2016.

Click here to read more on the FHA’s more lenient approval process allowing borrowers to reenter the housing market in as little as 12 months.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the website, www.miamibankruptcy.com.

How Bankruptcy Could Help Solve the Student Loan Debt Crisis

August 27, 2013 Posted by kingcade

Last week, President Obama introduced a proposal that would give colleges federal money based on performance and affordability to students. This so called ‘ratings system,’ Obama said would require accountability at colleges across the country in an effort to curb the escalating costs of student loans.

However, experts say there may be another more effective way to solve the student loan debt crisis: bankruptcy law. Under the current system, student loans are near impossible to get discharged through bankruptcy, unlike most other forms of unsecured debt, such as medical bills and credit card debt. Legal experts say this is creating a generation of Americans who are unable to get out from under the crushing weight of college debt and falling off the economic grid.

The Consumer Financial Protection Bureau found that total student loan debt is approaching $1.2 trillion, which would exceed credit card debt by more than 28 percent. According to a recent study done by the Center for American Progress, forty-five percent of all American families now have student loans.

With unemployment high among recent college grads, default rates on these student loans have risen as well. The economy is different today and college grads are leaving school with $50,000 to $100,000 in debt unable to find jobs. Experts say allowing college graduates to discharge their student loan debt in bankruptcy will allow them to have a ‘fresh start’ and return to being participants in the economy.

The ability to discharge student loans in bankruptcy has become increasingly difficult over the years to the point where now the borrower has to prove that any student loan, even a privately issued one, would cause an “undue hardship” to them in order to get it discharged. Another hurdle is that in order to discharge a student loan debt, a debtor must file a separate action and argue in front of the bankruptcy court, a process that usually requires an attorney and additional money.

Experts have proposed a number of fixes that would help out borrowers stuck under unmanageable debt burdens. One proposal discusses allowing all private loans to be dischargeable in bankruptcy. Another discusses loan forgiveness programs — in which a borrower repays an affordable amount over 20-25 years before getting the rest discharged. Another proposal allows bankruptcy courts to value a debtor’s student loan at its fair market value, which is what another investor would be willing to pay to buy the loan off the original lender, and discharge anything above that value. A similar process is currently available to some debtors on their mortgages in bankruptcy.

Experts on the topic still feel it is going to take a lot more than the President’s recent proposal and bankruptcy to fix the system. It’s really going to come down to looking at institutions, both for profit and nonprofit, who are doing innovative things to get students to graduation and employment.

Click here to read more on how bankruptcy could help solve the student loan debt crisis.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

President Obama’s New ‘Ratings System’ and what it means for Student Borrowers

August 26, 2013 Posted by kingcade

President Obama recently went on a two-day bus tour to push a new proposal aimed at creating a college ratings system that evaluates schools on a number of criteria including tuition, graduation rates, debt of graduates and alumni’s earnings.

He claims the ratings system will make college more affordable since federal aid will be allocated based on the results of the ratings.

College affordability is something President Obama has stressed will help restore the middle class since his election into office. The student loan debt epidemic is affecting all age brackets and more than 38 million Americans.

On August 9, the president signed the Bipartisan Student Loan Certainty Act, which ties interest rates on Stafford and PLUS loans to the fluctuations of the 10-year Treasury bond. But while the passage of this new law, which Republicans and Democrats claim will help students, is temporarily lowering interest rates, in five years, it is estimated that interest rates will actually end up being higher than before the bill was signed. According to the Congressional Budget Office, it will make the government an extra $715 million.

The CBO reports that the government is already making an estimated $184 billion from student loans — and this new bill increases the number to a staggering $184,715,000,000.

Click here to read more on Congress’ latest student loan bill and the President’s new ratings system.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.