Hard Money Loans

News that global miners Rio Tinto and BHP Billiton have abandoned plans for an iron ore joint venture is unlikely to hit the steel market, analysts say.

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Reserve Banks warns that large capital inflows into emerging market economies is likely to persist for some time, which implies that the rand could remain strong.

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London, England, United Kingdom (AHN) – To purchase a house, a Briton buying a unit for the first time would need $105,000 (70,000 pounds) savings to qualify for a mortgage. The amount is three times the average salary of British workers.

It is also $30,000 (20,000 pounds) more than the deposit required just four years ago after mortgage firms increased the required deposit to 43 percent in September, which is up from 30 percent in December 2006.

The move makes it even more difficult for first-time home buyers to acquire a house and reinforces a Bank of England warning issued last week that banks are implementing stricter rules before lending money because of fears more home owners would default on their loans as workers are laid off.

Because property prices in Britain remaining are so high and tax breaks to encourage first-time home buyers arenot sufficient to prevent another downturn in the real estate market, the International Monetary Fund warned of a double dip in the country’s property market.

The IMF pointed out a decline in property purchases after the stamp duty holiday on properties worth up to $262,500 (175,000 pounds) expired on December 2009. Former British Chancellor Alistair Darling replaced the stamp duty holiday in the March budget with a two-year exemption for first-time home buyers up to $375,000 (250,000 pounds).

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Toronto, Ontario, Canada (AHN) – The battle for a larger share of the $16.8-billion Canadian cellphone market continues to be waged by industry players.

In a bid to make as many hand held units available to consumers, more Canadian supermarkets are including mobile phones on their aisle offerings.

Loblaws announced on Wednesday new partnerships with majority of Canada’s cellphone makers, which would add five new brands to over 500 Loblaw chains across the country. Loblaws has actually been offering cellphones in its retail outlets since 2005.

Shoppers Drug Mart made a similar move in July when it carried Rogers Communications hand held units in its 36 stores across Ottawa. The deal with Shoppers, which sells cosmetics and drugs, was timely for Rogers which ended its dealership with electronics chain The Source after the latter was purchased by Rogers’ rival Bell Canada in early 2009.

Loblaws Vice President of Telecom Services Maria Forlini said the company decided to expand its cellphone offerings because of their belief that the market still has room for growth. Forlini cited Canada’s 70 percent mobile phone penetration rate – which is one of the lowest in the world.

Forlini said with 13 million consumers shopping at Loblaws weekly, the supermarket chain could be a major retailer of cellphones in Canada.

Even new telecom companies such as Wind Mobile and Public Mobile have entered into deals with supermarkets to make their products within reach of more consumers in an attempt to have a larger share of the cellphone market.

According to Bank of America Merrill Lynch estimates, cellphone subscriber growth would continue to expand at an annual rate of 7.5 percent. That would translate into at least 3.9 million new clients.

The growth is also expected for the more expensive smartphone market, particularly in the U.S. Technology trends company ComScore reported on Wednesday that Research in Motion’s BlackBerry is still the top smartphone in the U.S. with a 37.6 percent market share, followed by Apple’s iPhone with 24.2 percent.

On third spot were phones that use Android operating systems, which includes Samsung, LG and Motorola.

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Foreclosure Real Estate Investing: How NOT To Lose Your Shirt At The Foreclosure Sale For real estate professionals, this past year has been one of the most painful in recent times — defaults are up, homeownership is down, foreclosures have soared and the poorly performing housing sector is starting to create negative ripple effects in the broader national economy. Since all projections indicate that 2008 will be equally as challenging, should property investors run for the hills, put all their money in AAA rated munis, and ride out the storm until the next boom? Absolutely not! There’s no question that 2008 will bring reduced housing demand, lower prices in some areas, and fewer loan options, yet 2008 looks strong for treasure hunters. At HMB, we’ve been seeing investors scoop up bank REO’s for 40 to 50 cents on the dollar and selling them off at nice profits. After all, people will always buy property if they can get a great deal, no matter what the market conditions. Your job is to simply find the best deals. Many great deals will most certainly come from foreclosures over the next 24 months.

If you intend to jump into foreclosure auctions, follow these tips to help insure a profitable transaction: A? Do your homework: I recently had one of my investors call me and ask me if he would be risking anything greater than his security deposit if he simply walked away from a house he purchased at auction. Because he was intimately familiar with the neighborhood, he didn’t bother to visit the property. After the auction, he learned the damage to the property was more extensive than he anticipated. In a aEoehotaE? market, price appreciation could have bailed him out but, in today’s market, he was sunk. Lesson? Never buy a property sight unseen, and make sure to get the best contractor estimates possible prior to auction day. A? Read the advertisement carefully: The devil is in the fine print. You could buy a lot of trouble if you don’t read and understand every word. Examples: Many auctioneers require a Buyer’s premium. In my area, it could be as much as 10%. If your bidding on a $120,000.00 property, that’s an additional $12,000.00 expense! Even worse, you may be required to pay interest on the prior owner’s defaulting Note from date of auction forward to the date of settlement. That’s an additional 30-45 days of interest expense (or more in some instances). Worst of all, in some cases the auction purchaser could be responsible for certain outstanding liens due at the time of sale, such as water, taxes, or even condo liens. Do you really want to be responsible for the prior owner’s $3,000.00 past due HOA bill because you didn’t read the ad? A? Be careful of flipping: Flips are still possible in this market but could be dangerous to the financial health of an unseasoned or careless investor. If you intend to flip to another investor, remember he or she will be leery of buying anywhere close to retail because of the likelihood of additional price erosion over the next few years.

Did you properly discount your bid price for this? Will the property cash flow at your proposed sales price? Many investors use the 1% Rule as the aEoegold standardaE? aE” a $100,000.00 purchase price should yield a renter at $1,000.00. If you don’t carefully account for these factors, you could get stuck in the property. If you are using short-term hard money and your credit is weak, you even run the risk of loan default because you won’t be able to refinance out of your hard money loan. A? Setting property values: In addition to recent comps, you may want to go back to 2004-05 tax assessment records to review pre-bubble pricing. Is it possible for prices to retrace back to those levels? Maybe yes, maybe no, but it doesn’t hurt to bid based upon worst-case scenarios. A? Keep your cool: Don’t get caught up in the emotion of the auction. Know your absolute high price going in. Once the bidding has exceeded that price, don’t even think about it anymore. Walk to your car and leave. There’s always another deal tomorrow. A? Get finances in order before bidding: You will be required to bring to the auction a cashier’s check for the advertised deposit amount. But you may also be asked to increase the initial deposit to 10% of total purchase price within a certain time period after the auction date.

Check with the auctioneer the day of auction. Also, get lender approval prior to the day of auction. A hard money lender can be your best friend in these situations, as an approval from a hard money source accomplishes 2 things: 1) you’ll know up-front whether you’ll be able to close on the property, thereby reducing any risk of losing your deposit; and 2) you’ll get a second, and often expert, opinion on the conservative value of the property. Even if you end up using conventional lending, the hard money approval can give you great peace of mind. A? Insurance: It is critical to get a hazard insurance policy in place the day of auction. Many times, the risk of loss is contractually passed to the successful auction bidder. If you don’t have insurance and the building burns down, you lose! A? Bankruptcy: Call the auctioneer the night before (for early a.m. auctions) or the morning of the auction to make certain the foreclosed-upon borrower has not filed a bankruptcy. A bankruptcy filing stops the foreclosure process, even if it is filed one minute before auction. Probably 90% of foreclosure auctions get cancelled this way, so you’ll waste a lot time if you don’t call beforehand. A? Default: Always remember that the re-auction of a property is almost always aEoeat the risk and expense of the defaulting bidder.aE? This means if you bid on a property and don’t follow through, you could be sued for a lot more than just your deposit. Jeffrey Shiller, Esq. MD DC VA Hard Money Lender

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Jeffrey Shiller, Esq. www.hardmoneybankers.com MD DC VA Hard Money Lender

Technology companies and established power-systems suppliers are vying for a share of the global electricity-management market

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The latest economic and housing market outlook from Freddie Mac predicts this year’s residential originations from all U.S. lenders will come in at $1.4 trillion. Projected activity is a 30 percent decline from 2009′s estimated activity. Next year, Freddie sees production staying at the same level as 2010.

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A Great New Niche for Mortgage Brokers aE” Hard Money Lending With the subprime crisis of a few years ago, and the recession of the past couple of years, the demand for the services of mortgage brokers has diminished. These facts along with tighter lending standards, has led to tough times for mortgage brokers, with many having difficulty finding enough clients to maintain their business. Although lending standards have tightened, real estate investors are still finding ways to fund their real estate projects. Many are turning to hard money lenders to obtain the financing they need to flip a property, invest in a foreclosure, fund a new construction, and other real estate projects. These hard money loans are asset based loans, using the intrinsic value of the property as collateral for the loan, rather than relying on the investor’s credit worthiness. Mortgage brokers, who find themselves short on clients, can look to hard money lending to expand their clientele. Lending to real estate investors will allow them to take advantage of this growing segment of the market. Those who have jumped into the hard money lending arena find that they have little competition with other brokers, and have many clients looking for a broker to help them with their financing needs. An added advantage is that real estate investors, unlike individual homeowners are repeat customers. Most will make multiple investments in a year, seeking new financing for each, thereby increasing your business two, three, and even four fold per new client. Helping real estate investors find proper financing is an underserved market, and a broker who teams up with the right hard money lenders can quickly capitalize on this need.

A broker wanting to expand into hard money lending should research the market as well as the availability and reputations of the hard money lenders in their area. Start by doing an internet search on the hard money lenders in your area, and assess their offerings, experience, and dedication to hard money lending. Then set up interviews with the firms that stand out. You want a hard money lender who is very knowledgeable about the local real estate market, who strictly deals with hard money lending, and is well capitalized, with many financial backers. They should be very professional, organized, and of course ethical. Hard money lending can be a very profitable niche for mortgage brokers who team with the right hard money lenders.

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Jason Balin www.hardmoneybankers.com

Many real estate investors overlook hard money loans as a strategy for acquiring property. That’s because these loans are typically used by desperate property owners looking for a way out of the real estate market, rather than into it. But hard money can work for anyone, and it can be particularly useful if you’re a new investor looking to build your portfolio quickly.

Hard money loans can generally be described as high interest loans available to borrowers with any credit rating, as long as they can can provide solid collateral – usually equity in real estate, such as a home. These loans are almost never issued by banks or deposit institutions, but rather by private lenders who specialize in short term lending at high interest.

Normally a home owner in need of a big loan would apply for a second mortgage, using real estate equity as collateral, but bad credit can make things difficult here. If a home owner has missed a few mortgage payments, the banks may refuse to provide more financing – hard money might be the only option in this case.

The limit for hard money loans typically hover at about 60 to 70 per cent of a property’s quick sale value, defined as the price a lender could reasonably expect to realize if the borrower defaulted on the loan, and the property was liquidated fast. The interest rate for a hard money loan is usually in the 15 to 25 per cent range.

Investors can take out hard money loans to buy a property, as long as they provide acceptable collateral – in this case it could even be the property they’re buying. The strategy here is to find a pre-foreclosure property, or any real estate with an owner prepared to sell below below market value as long as the sale is fast. If the investor can re-sell the property at full market value, before too much interest is paid on the hard money loan, he or she can make a significant profit. Hard money loans have helped many successful investors get started in real estate.

Foreclosure rates are on the increase all over the country, causing alarm. The market has also seen an increase in defaults and higher loan-to-value ratios are making it more difficult than ever before for borrowers to find refinancing. However, no matter how bleak things seem, there is still an alternative to foreclosure in the form of hard-money loans. Also referred to as bridge loans, since they provide temporary financing for credit repair and property seasoning purposes, hard money loans can help to stop a foreclosure.

Homeowners who have been out of work and have now found a job may still be unable to meet the full payment demanded by the bank. But, due to improved circumstances, they will be able to make their regular monthly payments. A home foreclosure at this stage would ruin their credit rating and their current ability to make payments, seems like an unnecessary and extreme step. However, the lender may not be willing to accept anything less than the payment in full, leaving the homeowner with very few options. This is a typical situation where a hard money loan can be of help.

Depending on the amount of equity in the house and its current worth, some homeowners can qualify for a hard money loan. Such loans are generally offered by specific lenders and in spite of no special costs being involved, these lenders can close on a loan quite quickly. Hard money loans are available from groups of private investors, pooling their money to invest in real estate. These loans are used when the borrower has limited time left to close a loan. Alternatively, they can be used when the borrower does not want to give out their credit history or when they plan to keep the property only for a limited period of time or when there is already a plan to refinance in a short while after closing.

Real estate is the collateral asset in hard money loans and the lender assumes a lien on the property. The size of the loan, its rate and the term is based on the equity, the marketability of the property and the financial standing of the borrower can be used quickly by homeowners running out of time and options, to stop a foreclosure. There are myths about these loans, based on the impression that they have soaring interest rates and low loan-to-value ratios. In truth, hard money loans do carry a higher interest rate, but they are generally in the 12% range rather than the 18% range. The key issue is the valuation of the property. One of the methods for determining value is an appraisal by an objective third party with no connection whatsoever to the transaction. An accurate valuation of the market purchase price must be extensive and include relevant information about the property. Most such reports also feature a comparison with similar properties and an overview of the local real estate market, along with other relevant issues.

Homeowners who qualify for these loans may have to pay a premium to get this new loan to stop a foreclosure in progress. Hard money lenders can charge 4 to 5 points of the loan as their fee. Hard money loans are a perfectly viable solution for homeowners in foreclosure who are able to meet the requirements. Although expensive, these loans provide foreclosure victims a short term solution, giving them a chance to keep their homes. It allows them to rebuild their payment history.