The Loan Xperts Blog

The "Loan Xperts" Blog

Finally - Funding Available For Small Business Owners !!

March 7th, 2009 11:51 AM

American Recovery and Reinvestment Act of 2009

As part of the American Recovery and Reinvestment Act of 2009, signed by President Obama on February 17th, the Small Business Administration has been allocated $730 million intended to fund fee reduction, program policy changes and new loan programs that will collectively help to provide immediate financing assistance to small business owners. While the program and policy procedures have not yet been finalized by the agency, the following incentives were announced:

1. $375 million for temporary fee reductions or eliminations on SBA loans for the 7(a) Guaranty and 504 Loan Programs, as well as an increased SBA- loan guaranteed percentage up to 90% for certain loans

2. $255 million for a new SBA loan program which would provide up to $35,000 in guaranteed financing to help small businesses meet existing debt payments

3. $30 million for expanding the SBA Microloan Program through new lending and technical assistance grants to participating micro lenders

4. $20 million for technology systems to streamline SBA’s lending and oversight processes

5. $15 million to expand the SBA’s Surety Bond Guarantee Program

6. $25 million for increased staffing

7. $10 million for the Office of Inspector General

The SBA is working quickly to develop the policies necessary to implement the provisions of this act. Our Commercial Division, First American Financial has relationships with several of the top direct SBA Lenders. If you are looking for capital to purchase or expand your business we welcome the opportunity to assist you with your financing requirements.

Posted by Don Apelian on March 7th, 2009 11:51 AMPost a Comment (0)

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SBA Statement on Small Business Lending Steps Announced by President Obama

March 17th, 2009 6:56 PM

Statement from SBA Acting Administrator on Recovery Efforts Announced by President Obama Today

WASHINGTON – The following statement was issued today by Acting
Administrator Darryl K. Hairston of the U.S. Small Business Administration following the announcement by President Barack Obama of important steps being taken by the SBA and the U.S. Department of Treasury to address the economic challenges facing small businesses and entrepreneurs across the country.

“U.S. small businesses employ about half our nation’s workers and over the last decade have created about 70 percent of all new jobs. But their access to credit and lending markets has dried up, making it harder every day for small businesses to keep their doors open and their employees working. American
small businesses are one of the strongest engines for economic prosperity in the world, and we can’t let this crisis continue to undermine their growth and potential. Today President Obama reiterated his belief that we owe it to America’s small businesses to be the partner they need in the midst of this
crisis. At SBA, we couldn’t agree more.

“SBA this week is implementing two key provisions laid out in the Recovery Act – we are temporarily eliminating certain loan fees and raising guarantees on some 7(a) loans up to 90 percent. With these critical steps by SBA, and the Treasury Department’s commitment of up to $15 billion aimed at getting
lending markets flowing again, we are standing up with small business owners across this country and telling them how we are going to put much-needed capital in their hands.

“We hope small businesses will take the opportunity to ask their banks about the SBA loans that might be available to them. And, we encourage community banks and other lenders to work with us to reach as many qualified borrowers as we can during these difficult times.”

Beginning today, the SBA will:

• Temporarily raise guarantees to up to 90 percent on SBA’s 7(a) loan program, through calendar year 2009, or until the funds are exhausted. This increase in guarantee levels will help provide banks with the greater confidence they need to extend credit during the current recession, will mean more capital available to small business owners around the country.

• Temporarily eliminate fees for borrowers on SBA 7(a) loans and for both borrowers and lenders on 504 Certified Development Company loans, through calendar year 2009, or until the funds are exhausted. This will mean more capital available to small businesses at a lower cost. The fee elimination is retroactive to February 17, the day the Recovery Act was signed. SBA is
developing a mechanism for refunding fees paid on loans since then.

Additionally, the President announced today that the Treasury Department will commit up to $15 billion to help unlock the frozen credit markets by purchasing small business loan securities currently frozen on the secondary market. By
purchasing these securities, it will unlock these secondary markets, and in turn, free up more capital to jumpstart lending for small business owners. The SBA has worked closely with the Treasury Department to address the need to unlock these secondary markets for SBA loans.

For more information on the SBA and Treasury initiatives announced today by the President, visit the SBA Web site at http://www.sba.gov.

Posted by Don Apelian on March 17th, 2009 6:56 PMPost a Comment (0)

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Making Home Affordable Program Launched !!

March 5th, 2009 7:19 PM

The U.S. Treasury Department on Wednesday launched the Making Home Affordable program, which was announced recently by President Barack Obama. The program's two branches, refinance and modification are estimated to apply to some 9 million homeowners either behind on payments or at risk of falling behind due to dropping home values, job loss, or other hardship.

The modification program will be effective only for mortgages originated on or before Jan. 1, 2009 on owner-occupied, single-family one- to four-unit properties that serve as a primary residence, the Treasury said. Borrowers in bankruptcy are not eligible, but those facing foreclosure will see foreclosure action suspended during a trial period or while borrowers are considered for preventative options. Within hours of the announcement, the government-sponsored entities (GSEs) and a variety of the largest U.S. lenders and servicers began rallying in support for the program.

Freddie Mac quickly announced the launch of two initiatives to compliment the administration's housing plan. Freddie's new relief refinance mortgage product, which can be as high as 105 percent of the property's value, is designed to reduce interest rates or amortization terms for borrowers to improve their position for long-term homeownership success. Freddie also rolled out a modification initiative to begin April 1; borrowers with Freddie-owned or guaranteed mortgages originated on or before Jan. 1 will be eligible to receive a workout, in some cases before they fall behind on their mortgage payments, Freddie said in a media statement.

A GSE-wide foreclosure sale suspension at Freddie, originally announced in November is set to expire Friday. Freddie announced Wednesday it would continue to suspend foreclosure sales on mortgages eligible for the modification program within the Making Home Affordable plan. Freddie will instruct its servicers not to complete a foreclosure sale without a complete and thorough effort to contact the borrower with workout options. For all other mortgages, Freddie said servicers retain authority to postpone foreclosure sales on a case-by-case basis if some other modification is being pursued.

Fannie Mae also announced Wednesday two similar initiatives; a refinance program with added flexibility so underwater borrowers can refinance up to 105 percent of their home's value, and a modification program that will target a 31 percent payment-to-gross-income range, apply to qualified borrowers even before they fall behind on their payments, and work in concert with a foreclosure pause to allow time for servicers to evaluate borrowers and determine need and eligibility.

Citigroup Inc. responded promptly to the Treasury's announcement, issuing a statement of support within hours of the plan rolling out. Bank of America Corp. also threw in its support, saying it would continue the foreclosure sale moratorium on borrowers that potentially qualify until the company becomes operationally ready.

JP Morgan Chase & Co. came out in strong support of the plan, saying it approved of the fair and consistent guidelines, the targeted bracket of homeowners with mortgages below $729,750 on owner-occupied homes only, the requirement for full income documentation and evidence of financial hardship, and the collective impact of all factors (and incentives) of the program on servicers to pursue the most financially beneficial modification for the borrowers. There is no silver bullet, CEO Jamie Dimon said of the troubled economy and tight financial market. The thoughtful and rapid roll-out of various programs is the only intelligent way to begin to solve these problems. These mortgage modifications are economically and morally the right thing to do for individual customers.

Wells Fargo Home Mortgage under parent company Wells Fargo & Co. said Wednesday it would offer the modification program for its own loans and loans it services for GSEs Fannie and Freddie, as well as for all other investors whose servicing contracts allow. The company will also offer the refinancing options to its customers with Fannie and Freddie loans. We believe the administration's plan is thoughtful and comprehensive, and it addresses the current challenges our nation faces, said Mike Heid, co-president of Wells Fargo Home Mortgage, in a media statement Wednesday. Importantly, it helps customers facing true financial hardships while guarding against moral hazard.

We recommend that you call your lender immediately to see if you qualify for any of these programs. If you do not qualify and/or staying in your home is no longer an option, Save Our home From Foreclosure can facilitate a short sale preventing you from having to face the devastation brought about by foreclosure. We can be contacted at (800) 305-7121 Ext 401.

Posted by Don Apelian on March 5th, 2009 7:19 PMPost a Comment (0)

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