Your Questions About Save Loan Associations

Daniel asks…

Does this article from say we’re coming to a cashless society?

MILWAUKEE, Dec. 26, 2006 – Metavante Corporation today announced it is the first certified and first operational processor supporting reload transactions on a leading international card association’s prepaid card load network. Metavante is the banking and payments technology subsidiary of Marshall & Ilsley Corporation (NYSE: MI).
On Dec. 4, 2006, the card association issued a news release in which it stated the prepaid load network allows consumers to add funds to eligible re-loadable prepaid cards at participating retail locations. According to the announcement, the service has been introduced at more than 1,550 retail locations nationwide including participating Safeway, Carrs, Dominick’s, Genuardi’s, Pak ‘n Save, Pavilions, Randalls, Vons and Tom Thumb stores.

Processing reload transactions allows Metavante to help prepaid card issuers, such as financial institutions, realize the full potential of the checking account alternative that enables electronic payment card transactions for the un- and under-banked population. As Metavante helps make it easier for cardholders to reload eligible prepaid cards at convenient retail locations, a financial institution can benefit from increased card use, promote its brand with un- and under-banked consumers to potentially develop a traditional banking relationship, and gain wallet-share of a consumer otherwise out of reach.

“Without convenient reload, prepaid cards have largely been disposable, which limits their ability to act as a full-service alternative to a checking account and the accompanying payment cards,” said Frank D’Angelo, group president, Metavante Payment Solutions. “Marrying expedient reload to prepaid cards creates the opportunity for people without a traditional banking relationship to carry a full-fledged payment card that’s arguably as easy to reload as a checking account.”

According to a recent Celent payments industry analyst report: “There are an estimated 14 million un-banked households in the U.S…and [prepaid debit] holds value because it stands to capture segments of the market other electronic payments [credit and debit] could not otherwise touch. This is particularly the case among the un-banked and youth populations that have limited access to such accounts.” 1

“Every year card-based payments chip away at the market share of cash and checks and the advent of online shopping and electronic payments has accelerated that trend. By supporting an easier way to reload prepaid cards, Metavante helps open the world of online transactions to consumers such as teens, who often have disposable income to spend,” added D’Angelo. “Metavante offers the most comprehensive suite of payment solutions and as evidenced by our support of prepaid reload, we continue to provide and support the newest payment technologies.”

About Metavante
Metavante Corporation delivers banking and payments technologies to financial services firms and businesses worldwide. Metavante products and services drive account processing for deposit, loan and trust systems, image-based and conventional check processing, electronic funds transfer, consumer healthcare payments, and electronic presentment and payment. Headquartered in Milwaukee, Metavante ( is wholly owned by Marshall & Ilsley Corporation (NYSE: MI).

1 Celent, “The Future of Consumer Payments,” Nov. 2006, Ariana-Michele Moore, Senior Analyst.

John answers:

It’s certainly a symptom!

Fewer and fewer merchants take checks. Consumers can’t make hotel reservations, take advantage of special internet pricing or internet exclusive products, purchase at the ever growing number of un-manned retail locations (gas stations, etc.), rent a car or sometimes even order food for delivery without a credit/debit card of some sort. COD is almost non-existent.

Prepaid cards offer the ability to do these things as well as many others for demographics who are not able to obtain a credit/debit card. Once this method of payment is fully accepted by this demographic, the need for cash will be greatly lessened. I just don’t think that this will happen anytime soon.

Paul asks…

I have an underwater mortgage but would like to move up. Will I qualify?

I purchased a condo in 2006 that, of course, has greatly depreciated. Even though I put 20% down, half of the neighborhood foreclosed and the condo value depreciated from $120K to about $40-50K! I still am underwater by about $30-40k.

Since then, I met and married my wife and she moved in. We would like to move out of my “bachelor pad” and start a family. We want to keep the condo to avoid selling at the bottom of the market and taking a bath, while still qualifying for a new house. I could easily rent my condo to cover most or all of the costs. We are hoping to close this fall (October 2011)

As always with these types of questions there are a lot of parameters, so I’ll lay them out for you:

Our monthly gross income is $8,000 – this is solid w-2 income, not self employed or any other type of income.

Our monthly debt is as follows:
Mortgage: $618
Association fee: $124
Property taxes: $133 (and dropping)
Car payment 1: $583 – 0% loan will be paid off in March, 2012
Car payment 2: $421 – 0% loan will be paid off in May, 2014
Student loans: $20

Credit: the lowest of both of our credit scores from any of the 3 bureaus is 720.

Down payment: We will have $47,000 available for down payment and closing costs.

Loan amount: We are interested in homes valued around $250-260k, so the loan amount would be around $210-220k depending on closing costs.

Other assets: approx $40K in non-liquid or retirement assets.

Doing the math, our current debt-to-income back ratio is 24%. However, if you exclude car payment 1, which will have 5 payments left by the time i apply for this, its about 16.8%. I could even use some of my cash to just pay it off if a lender wanted to include it as debt.

I think this leaves a lot of wiggle room for us to qualify for a new mortgage, even if I have to pay PMI I would love to get out of here. Note that I did not include rental income in the equation because
I do not want to rely on having a tenant 100% of the time, I want to be able to afford both payments on my own.

Short selling,strategic default, etc. are last-resort options at this time. I feel they are unethical since I can pay the bills comfortably and I do not want to ruin my credit.

So all of my math seems to point to qualifying for a loan in my desired price range, without pushing the DTI above the limits.

I plan on speaking with an advisor on this but I wanted to know before i start this process if we are likely to qualify based on this information? Sometimes it seems that honest people who save and pay their bills on time are getting screwed in this world, and I just want to make sure I’m not off base with anything.
update: thanks for the response – the insurance is rolled into the association fee, which is why it is excluded. The larger car payment can be excluded because it will be paid off.

John answers:

The mortgage on the condo is going to hurt you until you have at least a full year of stable rental income, preferably from a single tenant. At that point most lenders will look at it as a wash if your rents cover most of your outgoing cash on the rental unit.

A $200k note will run you about $972 P&I per month at 4.15% (assumes a 750+ FICO) so figure $1,300 a month for PITI. That pegs your DTI at close to 40%, well outside the affordability target of 34%. That’s partially offset by a housing cost ratio of around 17%.

Once you have a tenant in the condo for a year the condo costs will drop from the ratio (they won’t consider the income, just treat it as a wash) and with the higher car note being paid off your total DTI drops to below 22%.

While the numbers look to be a bit of a stretch right now, things are moving in the right direction. Although most lenders have tightened lending criteria the ones who are being shut out are those with no chance of being able to afford the payments. You’re not in that position if you keep moving in the direction that you are so you may be able to find a lender who will work with you.

I would like to see some rainy day savings too. If you use the $47k for down payment and closing costs, your emergency funds will be wiped out. That’s never good. I did a re-fi while I was unemployed back in 2009 largely because I had over a year’s worth of income in readily available liquid investments, so having (or not having) a significant emergency fund can impact the lending decision.

Donna asks…

Please help me………………….?

1Demand for a product is likely to be price-inelastic:
Athe smaller the number of substitutes.
Bthe smaller the number of complements.
Cthe higher the price.
Dthe grater the fraction of income spent on it.

2If a raise in price from £1 to £1.10 caused supply to extend by 27%, price elasticity of supply would equal:

3A trade union may try to rise the wages of its members by all of the followings except:
AIncreasing their productivity.
BThreatening strike actions.
CIncreasing the supply of labour.
DAccepting revised working practices.

4These can be issued by a public company
Aordinary shares.
Bloans stocks.
Cbank loans.

5These shares have special rights concerning the distribution of dividends
ALoans stocks.
BOrdinary shares.
CPreference shares.
DCommon stocks.

6The stock market is a market for:
ANew issues of shares.
BStocks of goods and services.
CFinancial products.
DNew and second-hand shares.

7Which of the following is a function of the Central Bank
AMaking personal loans.
BMaking mortgages.
CSupervising the banking system.
DProviding low-cost loans

8Which of these types of banks in a modern economy specialized in helping large business organization to fund their operations and expansion, helping them to issue and sell stocks and shares on the stock market.
ASaving Banks.
BCredit Unions.
CInvestment Banks.
DIslamic Banks.

9Which of these types of accounts is a safe place to store your savings and to earn interests.
Acurrent account.
Bsavings account.
Cchecking account.
Ddeposit account.

10A ………………, is repaid with interest over a fixed period, it is a short-term loan, up to 5 years
A…commercial loan
B…personal loan

11A shareholder is
A any person or organization that is a part owner of a corporation’s stock
B any person or organization that is a part owner of a limited private company.
C any person or organization that owns a stock exchange.
D any person or organization that owns treasury bonds.

12The management tier of the union trade with executive members elected by unions members to run the union nationally is a
BDistrict committee.
CShop stewards.
DNational Executive.

13Which one of these is NOT a function of Trade Unions?
ASecuring improvements in member’s working conditions.
BEncouraging firms to increase worker participation in business decision-making.
CPromoting the distribution of dividends.
Dimproving member pay and other benefits.

14Which of these types of Trade Union best describe the National Union of Mineworkers in South Africa (NUM)?
AGeneral Union.
BIndustrial Union.
CCrafts Union.
DProfessional associations.

15Which of the following is NOT a function of a commercial bank
AMaking personal loans.
BProviding financial advise.
CProviding methods of payment.
DIssuing notes and coins.

If you answer all correctly I will ask another q, and choose you as best answer for nothing
so you get 20 points.

John answers:

This is YOUR homework not OURS – read the book and try to figure out the answers!

Mary asks…

What do you think If 1 in 10 U.S. households at risk of losing their homes should we abolish the Dream Act?

Our own people are suffering and Obama save the homes programs failed. What should come first illegals getting free college educations or helping out fellow Americans ?WASHINGTON — One in 10 American households with a mortgage is at risk of losing its home, and the foreclosure crisis could worsen if jobs remain scarce.

About 9.9 percent of homeowners had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association said on Thursday. That number, adjusted for seasonal factors, was barely down from a record-high of more than 10 percent as of April 30.

The Labor Department said requests for unemployment benefits fell sharply last week. The drop in first-time claims to a seasonally adjusted 473,000 was the first decline in a month and a hopeful sign after a raft of dismal economic reports.

Still, unemployment claims remain much higher than they would be in a healthy economy. Employers are reluctant to hire as economic growth appears to be slowing.

The number of Americans who are missing payments and falling into foreclosure has followed the upward trend in unemployment. The jobless rate has remained near double digits all year.

“Ultimately, the housing story, whether it is delinquencies, homes sales or housing starts, is an employment story,” Jay Brinkmann, the Mortgage Bankers Association’s top economist, said in a statement. “Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers.”

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc. Economists expect the number of foreclosures to grow well into next year.

Besides forcing people from their homes, foreclosures and distressed home sales have pressured home values and crippled the broader housing industry. They have made it difficult for homebuilders to compete with the depressed prices and discouraged potential sellers from putting homes on the market.

The housing market is struggling even as mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks. Mortgage buyer Freddie Mac said the average rate for a 30-year fixed loan fell to 4.36 percent this week.

Rates have fallen since the spring as investors, spooked by a slowing economy, shifted money into the safety of Treasury bonds. That has lowered the yields on long-term Treasurys. Mortgage rates tend to track those yields.

The economy has grown for four straight quarters. But the pace has slowed from a 5 percent annual rate in last year’s fourth quarter to 3.7 percent in the January-to-March period. It has weakened even further in the past several months.

Many economists expect the government Friday to revise lower its growth estimate for the April-to-June quarter to below 2 percent. That’s weak in normal times and even more worrisome after a steep recession.

John answers:

Its time our country start to take care of our own people.

The only reason unemployment rates are showing at a lower percentage is because many of the unemployed are not longer qualified to receive unemployment and some of the unemployed have taken part time jobs which is all they can get.

What is stated above is correct, the job market needs to improve before housing becomes stabilized.

My son lost his job over 2 years ago, after awhile of looking for jobs and becoming tired of staying at home, he entered a new field, home health care, but that is only a part time position. However, because he had this part time job that paid him almost as much as his unemployment did, the was no longer qualified to receive any unemployment. Therefore, he is now 9 months behind on his mortgage and has made a deal with the bank to have the house listed to sell so that the mortgage can be paid off, and the realtor will get paid, IF the house ever sells, my son has lived in this house since 1991 and now will lose the house and walk away with no money.

I say a big ThankYou to our deal old Uncle Sam who has seen fit to screw as many Americans as they can.

TO our Government…START HELPING THE AMERICAN PEOPLE! We are losing every thing this country was based on.

Susan asks…

Home sales are actually up? Does that home sales are actually up, make you feel the “depression” isn’t real?

According to the national Realtor association home sales are up 17.4% in the last two months.

November home sales leap –

NEW YORK ( — After surging 10% in October, sales of existing homes jumped again in November, growing 7.4% compared with October to an annualized rate of 6.54 million units, according to the National Association of Realtors.

“This clearly is a rush of first-time buyers not wanting to miss out on the tax credit,” said NAR’s chief economist, Lawrence Yun.

November was originally going to be the last month in which sales to first-time homebuyers would qualify for a federal tax credit of up to $8,000. However, that deadline was extended through June.

In addition, the tax credit was expanded to cover people who already own a home. They can qualify for a $6,500 tax credit if purchase a new house before the end of June. That should encourage “trade-up” buyers.

The strength of sales in November surprised the industry. A panel of experts compiled by had forecast month-over-month sales growth of just 2.5% to 6.25 million from 6.1 million a month earlier.

The sales total was also a huge improvement over a year ago. Sales rose 45.7% over the paltry annualized rate of 4.49 million units during November 2008.

The contribution made by first-time buyers is evident in a separate survey NAR conducted of its members. They estimate that 51% of sales in November were by newcomers to the market, up a point from 50% in October. Normally, first timers account for about 40% of sales.

Also propelling sales higher were rock-bottom interest rates. The average for a 30-year, fixed-rate loan during the month was just 4.88%, down from 4.95% in October and 6.09% a year ago.

With rates that much lower, homebuyers can save more than $150 a month on a $200,000 mortgage.

The industry expects home sales to slacken December, partially because of the tax credit’s originally scheduled demise. That caused some buyers to push up their closing, stealing sales from December.

However, sales will not fall off a cliff, though, according to Walter Molony, a NAR spokesman. “The psychology seems to be turning around,” he said. “Potential buyers, who had been staying on the fence, now believe we’re at or near the market bottom.”

One X-factor, however, is the vast numbers of homes that may come to market over the next few months. There is a large “shadow inventory” — homes owned by banks and mortgage companies — that have not yet been put up for sale. It could be as many as 1.7 million units, according to First American CoreLogic.

In addition, another spate of foreclosures could be hitting the market as a number of option-ARM mortgages are set to default.

All that may drive prices down, according to Shari Olefson, author of “Foreclosure Nation: Mortgaging the American Dream.” And the impact of these renewed price declines could again alter the market psychology.

“People think that prices have bottomed,” she said. “I don’t think they have. People will see price declines and that will discourage them from buying.”

Mike Larson, a real estate analyst with Weiss Research has preached all through the bust that price declines are what will “fix” the housing crisis.

“We needed to see prices fall to make ownership competitive with renting again, and to restore the normal relationship of house prices to income,” he said. “That has now happened and you’re seeing buyers come out of the woodwork as a result.”

Still, they will have to come out in large numbers to offset the inventory overhang in some of the worst markets, according to Olefson. In the Florida condo market, for example, there is a 35-to-40 month supply of units at the current rates of sale, she said.

Prices still almost certainly have further to fall



John answers:

Home sales were down again in November – and there are millions more homes that will probably be foreclosed in the next yr or two, which will keep house prices down – the real estate market has years to go before most homeowners (including me) have positive equity again

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