Hard Money Loans

Detroit, MI, United States (AHN) – General Motors is looking to fill 1,000 jobs in Michigan. The new hires would develop more electric and hybrid vehicles similar to GM’s Chevrolet Volt, which the auto manufacturer rolled out Tuesday.

GM Chief Executive Daniel Akerson said the new jobs will be in engineering and research as the company attempts to have more offerings in its lineup of energy-efficient vehicles. Akerson added the concentration of new jobs in Michigan seeks to help ease unemployment in the state, which has the second highest unemployment rate in the country next to Nevada.

About 800,000 jobs were lost in Michigan in the last 10 years as demand for new cars slumped, leading the state to suffer from a 12.8 percent unemployment rate.

Akerson said the electric car would be one key to help revive the global automotive industry, which suffered a decline at the height of the financial crisis and had to be bailed out by the government to the tune of $50 billion.

The Volt was named by Green Car Journal the Green Car of the Year. It is the first electric vehicle to be given the award. Chevrolet Vote runs purely on electricity for 25 to 50 miles on a single charge.

The manufacture of electric cars has led to a boom in production of batteries and other auto parts needed by electric cars. So far 17 firms are manufacturing batteries or battery parts, which is expected to create 63,000 new jobs in Michigan over the next decade.

On Tuesday also, Chryler said it would hire 1,000 new engineers and technicians in early 2011 to work on next-generation small and midsize vehicles.

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There are a number of places that have been substantially damaged by the slumping economy in the United States. These are all places that have been impacted in that home values are going down and unemployment levels are going up. These are places where people are less likely to be able to handle their loans. This is why more loan modifications are being offered. Loan modifications from agencies like 1st Foreclosure Mortgage can work to get anyone to stop a foreclosure and save a home.

The Unites States Department of Housing and Urban Development has created new services through its Neighborhood Stabilization Program. This is used to help with giving out grants to local governments that can help to assist homeowners who are at risk of having their homes foreclosed upon. The services that are being offered are working to handle loan concerns that people who are at risk of foreclosure can have.

It is estimated that six billion dollars has been handled through the NSP for handling services. Every state government got a base support payment of $19.6 million. Some of the money that has not been handled yet will be doled out to areas that have to deal with higher foreclosure and unemployment rates. These include places like Michigan, California and Arizona.

This is an important service for people in states that have been impacted severely by foreclosures to see. Many loan modification specialists like the ones with 1st Foreclosure Mortgage will be working to see that clients are going to be able to work with this money. This is needed because of how this money can work to make a better loan modification easier for one to handle. It can also be used as an incentive for lenders to work with loan modification services in a number of hard hit areas.

Another beneficial thing to see is that the government is working to support counseling for people who need services. Loan modification agencies like 1st Foreclosure Mortgage are receiving $150 million in funds to use for housing counseling services. This is used to get people to learn how to handle different services and how to deal with funds that will be used for paying off a mortgage after it has been modified. These funds are needed as a means of making sure that loans can be properly modified.

Many local agencies that can work with loan modifications can work with the standards that have been imposed by the government. This is provided that they work to handle agreements with HUD and to work with a guarantee. Failing to work with a good guarantee will cause an agency to lose money through a series of penalties.

Loan modifications can be great to see in areas that have been impacted substantially by the economy. HUD is working to handle different types of services and is offering funds in grants and counseling services to local governments and to loan modification specialists. These funds are being used to ensure that loan modifications can be easily handled.

Lansing, MI, United States (AHN) – Four Loko the popular alcohol infused energy drink popular on college campuses has been banned in Michigan. Stores now have 30 days to remove it from shelves, but store owners aren’t worried they know a new drink will take its place or consumers will make their own mixes.

On Thursday Michigan’s Liquor Control Commission on a 201 voted to ban alcoholic energy drinks like Four Loko. The ban came a day after Chicago’s City Council proposed their own ban on energy drinks that contain alcohol and follows an already enacted ban in Utah.

Health experts have signaled out Four Loko in their campaign to have the product banned and just recently students in Washington and New Jersey were hospitalized after drinking Four Loko.

“The popularity of these drinks are increasing among college students and underage youth,” Commission spokeswoman Andrea Miller said. “They felt it necessary that this product should be banned in Michigan until further research.”

Phusion Projects the company which makes Four Loko said the popular product contains 12 percent alcohol and a 23.5-ounce has as much caffeine as a tall Starbucks coffee.

However critics of the drink say the caffeine masks the effects of the alcohol. Thereby, leaving young consumers unaware of their intoxication level and prompting them to drink more.

Phusion contends consumers have been mixing alcohol and caffeine for years in such drinks as Red Bull and vodka and rum and cola for years.

Michael Mansour, owner of Spartan Spirits near the Michigan State University campus told The State News, “If they can’t get it prepackaged in one unit, then they’ll buy it separately and mix it themselves. They’re going to do it, whether they package it that way or not.”

He went on to say, “In this market, we are always changing and staying on top of what our students’ appeal is. We are constantly staying up on what’s the latest, greatest newest product, so something will come out.”

Phusion plans on challenging the action and released a statement Thursday saying that Michigan’s liquor commission did not provide advance notice of its proposed action and “did not give parties who will be affected by the ban any opportunity to be heard on whether the ban is warranted or authorized by law.”

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Marshall, Michigan, United States (AHN) – Enbridge Energy Partners said it remained highly committed to complete clean-up efforts near Marshall, Michigan in the aftermath of July 26 oil spill that has stricken Kalamazoo River by the September 27th deadline.

The Environmental Protection Agency (EPA) set the two-month deadline for Enbridge to clean up after the oil spill caused by the firm’s leaking pipeline.

This comes as the company works to clean up another recent oil spill in Romeoville, Illinois.

“We continue to treat the Michigan spill as a top priority. While we moved some equipment we had demobilized to Illinois to assist with the response, we continue to provide ample resources to clean up the Michigan spill,” Enbridge said in a statement.

“Our response efforts continue to be focused on meeting our EPA-enforced Sept. 27 clean-up deadline safely and efficiently. Clean-up teams have implemented a five-step approval process for evaluating and inspecting clean-up sites to meet EPA criteria. Many areas in Divisions D and E have reached the fourth and in some cases, fifth phases of the process,” the company stressed.

As of Sept. 9, some 2,055 people are working on the Michigan site where they deployed a total of 124,982 feet of boom in 25 locations.

“Work on backfilling along Talmadge Creek is ramping up through the weekend. Division A at the release site is now complete and initial restoration is well underway. The hydroseeding completed in the area has resulted in sprouting and new grass is visible in places,” Enbridge reported.

A total of 1,247 animals have been cared for with some 866 animals rehabilitated and released while 294 animals are currently in care at Wildlife Response Center.

The media and general public are invited to tour the Wildlife Response Center located at 14998 Old U.S. 27 N. in Marshall, Michigan, on Sept. 14 at 2:00 p.m. ET. Tours have limited availability and those interested should make reservations by calling public information hotline at 1-800-306-6837.

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Ann Arbor, Michigan, United States (AHN) – General Motors (GM) Ventures and Itochu Technology Ventures have poured in $4.2 million investment to strengthen manufacturing and sales of next-generation lithium-ion batteries by developer Sakti3, Inc.

The collaboration aims to push commercialization of Sakti3 battery cells as the two new strategic investors joined previous investors Khosla Ventures and Beringea.

Michigan officials welcomed the recent development citing continuing growth and huge potentials in manufacturing and auto sector.

“This investment is the latest piece of strong evidence that many U.S. companies and especially Michigan companies are thriving as the auto industry moves toward a future of technologically advanced energy-efficient vehicles,” Senator Carl Levin said in a statement.

The investment is a major additional step forward as Sakti3′s solid-state advanced battery technology offers tremendous potential for powering the next generation of electric drive vehicles in the U.S. and around the world, he said.

“Regrowth of manufacturing in Michigan is a high priority. As we grow America’s auto industry, Sakti3 is a great example of how we can bring together our expertise in manufacturing and academia to create new opportunities and new jobs,” Senator Debbie Stabenow stressed.

In 2009, Sakti3 was awarded a $3 million grant from Michigan Economic Development Corporation (MEDC) and has been designated as a State of Michigan Center of Energy Excellence (CoEE) in partnership with University of Michigan.

“Sakti3 is an exciting, next-generation battery company with cutting-edge technology and a brilliant team. We’re thrilled that Sakti3, one of our CoEE has chosen Michigan as the place to bring its breakthrough technology to scale,” said Governor Jennifer M. Granholm.

“GM Ventures is making strategic investments in new technology to support our core automotive business. Our objective is to identify start-up companies that offer the best future technology for our vehicles, including next generation propulsion systems,” GM Ventures President Jon Lauckner said.

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Commercial hard money should only be thought of as an option after you have exhausted all other sources and have come to the conclusion that you just won’t qualify for a conventional loan.  The choice, though hard for many borrowers, is normally simple.  Either lose your business or building or accept the terms offered by the hard money lender. 

It’s a survival tactic.  You’re giving yourself something very valuable in exchange for the expense of the loan – time.  Time to repair, time to restore whatever the issues are.  Whether it’s getting the business back to profitability, paying down debt, time to continue leasing out the property, restore personal credit, etc.  We see so many borrowers let the egos get in the way and end up turning this into something it’s not.    

What it really is is an act of courage that you are facing the problems head on and doing everything you can to solve it.  And no matter how bad it is, you can still have some pride in that.  Many people simple hide and let the problems overwhelm them.

Remember the old sales saying of comparing apples to apples.  You just cannot compare a hard money loan to a bank loan you may have been eligible for 3 years ago.  You have to be realistic and compare it to your current alternatives.  And here’s what they are 1. Take on a partner 2. Lose the business 3. lose the building. 

Say you have a building worth $2,000,000 and owe $500,000.  You have $1,500,000 of equity you stand to lose vs. paying for an expensive loan.  Or say you take on the wrong partner because you are pressed for time and need cash.  Now you stand to lose whatever equity you have in the business, building and have additional legal issues by having to get rid of the partner.  And even if it works out with the partner you will likely have to give up much more to the partner than pay in fees to the lender. 

Most hard money lenders charge 6% on the front of the loan, which is obviously very expensive.  Say, using the numbers above you wanted an additional $500,000 to bring the total loan balance to $1,000,000.  You would pay $60,000 in fees…  Versus losing $1,500,000.  It’s hard, but simple.  Don’t let your ego get in the way of this one.  Face the problem head on, and fix it.   

Why would any borrower accept 15% rates and 5% on the front of a hard money commercial loan?  Because their other options are worse.  For example they may lose a substantial amount of equity out right or have to take on a partner that may take a higher percentage of their equity than a hard money lender would charge in fees.

Also the commercial hard money loans are easier and more reliable to attain than finding, negotiating and bringing on a partner or waiting months for a conventional loan to close (assuming the borrower qualifies).  Partners also have the high potential of creating legal issues if the project does not work out as planned.

Hard Money Commercial Loans  

For borrowers seriously considering going with a hard money commercial lender it is wise to only use a source that has been referred to borrowers by an experienced, unbiased third party.   This segment of the industry is filled with unethical people that have the bad habit of taking $15,000 good faith deposits with no intention of funding loans.  For many borrowers this $15,000 may be their last chunk of cash and they can’t make the mistake of going with the wrong commercial hard money lender.   Borrowers have almost no recourse either as most have to sign agreements stating that the fee is non refundable and the Letter of Intent is only a letter of “interest”.   Which of course, relieves the hard money lender of funding the deal. 

From the frying pan into the … Business owners that “elected” to secure a Commercial Hard Money loan for their business are often surprise how quickly the time passes when they are expected to pay off that debt. There are of course only 2 real solutions to this. 1. Sell the property and pay off the loan or 2. Refinance the debt with another lender. The third option is to call your rich uncle and have him pay it off.

The game plan of course with most business owners is to give themselves some time to restructure their books, business, improve their credit score and essentially put themselves in a stronger position to get a conventional mortgage in a year or two. However, this may not be enough time or the problems were more difficult than expected.

We see a lot of people that their primary issue is their personal credit score with the belief that they will increase it dramatically but at the end of the term there score has only moved up slightly. Regardless of the reason, the borrower may not be eligible for a typical conventional commercial mortgage.

One traditional option for business owners to get of the hard money loan is to go the SBA 7a loan route. This is because the 7a program allows credit scores as low as 520, loan to values as high as 90% on refinances and the borrower is allowed to use projections rather than just historical financials which may not show enough income to service the debt.

But this option has had several negatives that make it, almost as low of an option as the hard money loan to begin with. For example the rate normally floats over prime at around 1-2.75%, adjusting once per quarter – with no caps on the rate. In addition, the SBA normally requires a Guarantee Fee of 2.75% of 75% of the total loan amount. So in short, the benefit is that the borrower gets an option besides hard money and the rate is normally lower, depending on what Prime is than what they could get from another hard money lender.

However, not all SBA lenders are the same and it pays to be informed. For example there is a bank that offers the SBA 7a with a 5 year fixed rate at Prime + 1 and the bank absorbs the guarantee fee… As of this writing Prime is at 5.25% so most borrowers rate would be 6.25% fixed for 5 years and amortized over 25 years. This is one of the best commercial mortgages in the industry – regardless if the borrower is perfect or not.

So, if you’re facing a ballooning hard money loan and you operate your business out of a building you own you may consider going the SBA 7a route. Regardless get out there and shop because there are more options out there than your local bank is aware of.

The price of housing is a major challenge in the United States. Some estimates note that more than 50% of the population cannot afford a median priced home. According to National Association of Home Builders (NAHB), of the total number of new and existing homes sold nationwide during the third quarter, only 40.4 percent were affordable for families earning the median U.S. income of $59,600.

But it is good news that housing affordability on the national level has not changed much in the third quarter in spite of a rise in the mortgage interest rates during the last quarter. This was because many markets saw a slight decrease in their home prices, which helped offset the rise in mortgage rates.

Indianapolis (Indiana) is the most affordable city for homes in America, based on the 2006 third quarter report of the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). The city achieved this status for the fifth consecutive quarter.

Of the total number of housing units sold in Indianapolis during the third quarter, 86 percent of homes were priced at or below the U.S. median household income of $65,100. Homes in this metro area had a median sales price of $122,000, which is slightly higher from $120,000 of the previous quarter.

It is interesting to note that the most affordable U.S. cities for homes, condos and other real estate are largely from the northern industrial metro areas. The other larger cities that top the list for affordable homes in the third quarter after Indianapolis are Youngstown-Warren-Boardman (Ohio-Pennsylvania); Detroit-Livonia-Dearborn (Michigan); Buffalo-Niagara Falls (New York); and Grand Rapids and Wyoming (Michigan).

The report also lists the top seven smaller cities in America that have the most affordable housing markets. These are: Bay City in Michigan, Springfield in Ohio, Mansfield in Ohio, Lansing-East Lansing in Michigan, Lima in Ohio, Battle Creek in Michigan and Canton-Massillon in Ohio.

For both major metros and small metros, many of the least affordable cities are located in California. The least affordable major metro areas are Santa Ana-Anaheim-Irvine, Modesto, Stockton, and San Diego-Carlsbad-San Marcos, in that order. The least affordable smaller metros (less than 500,000 people) include: Salinas, Merced, Madera, Napa, and Santa Barbara-Santa Maria.

The good news for homebuyers is that there are many affordable cities in the United States. Moreover, even for cities that rated poorly for affordability, there may be some communities within the larger city that have affordable housing. For example, although the San Diego metro in California rated poorly overall for affordability, there are some communities in San Diego priced to meet the needs of lower-income home buyers. A good real estate agent can help you choose a community where you want to live based on your housing budget and needs.

The foreclosure market is an attractive option for buyers wanting to invest in real estate. A foreclosed property is a mortgaged property that has been taken over by the lender due to non-payment of the mortgage. The lender then sells the property in order to recover the money, often at below market prices. Foreclosed homes, condos and other properties can for make excellent investments and is a popular choice for those entering the real estate market.

The October 2006 issue of Business 2.0 Magazine ranks the top 10 foreclosure markets in the United States. Greeley in Colorado tops the list followed by Detroit in Michigan, Miami in Florida, Indianapolis in Indiana, Ft. Lauderdale in Florida, Denver in Colorado, Dayton in Ohio, Dallas and Fort Worth in Texas, and Atlanta in Georgia.

Greeley, CO, has the largest number of foreclosure households in the country, with 0.59% of homes falling in the category, an increase by 14.7% since January 2006. The report holds aggressive residential development, risky underwriting practices and stagnant wages as the main causes.

Detroit, MI, stands next with 0.51% of the households in foreclosure. The badly performing auto industry and the resulting impact to autoworkers’ incomes has contributed to number of homes in foreclosure in this city.

Third on the list is Miami, FL, where 0.37% of the households are in foreclosure, a staggering 91% increase since January 2006. The report states a weakening economy, higher property insurance premiums, and rising energy and interest rates, as the reasons for this rapid increase.

The fourth among the top ten foreclosure markets is Indianapolis, IN. Although the foreclosure rates are slightly lower from last year, still the portion of households in foreclosure stands at 0.35%. Setbacks and layoffs in the city’s auto industry together with falling home prices have contributed to foreclosure rates in this city.

Fort Lauderdale, FL, stands fifth with 0.34% of households entering foreclosure, which is up by a whopping 118.5% since January 2006.

Denver (with 0.33% of households in foreclosure), Dayton (with 0.33% of households in foreclosure), Dallas (with 0.31% of households in foreclosures), Fort Worth (with 0.31% of households in foreclosure) and Atlanta (with 0.31% of households in foreclosures) round out the top 10 foreclosure markets.

If you are looking to invest in the foreclosure market, consult a real estate agent who can help you clinch the best deal on the foreclosure property of your choice.