MonthMarch 2019

Loans with high charges and high rates | Information for consumers

If you are refinancing your mortgage or applying for a mortgage loan in installments, you may be covered by the Housing Property Protection and Mortgage Amortization Act (HOEPA). This law deals with certain deceptive and unfair practices of loans with mortgage guarantee and establishes requirements for certain loans with high fees and charges. This type of loan is also called “Mortgage Section 32” since that is the name and number of the section of the law that establishes the corresponding regulations.

  • HOEPA loans
  • Mandatory informational data
  • Prohibited terms and conditions
  • If the provider breaks the law

Mandatory informational data

Mandatory informational data

If your loan meets the criteria of the HOEPA law mentioned above, the lender must provide you with several informative data within a minimum period of three business days prior to the closing date of the loan, namely:

  • A written notice stating that it is not necessary to finalize the loan, even if you have signed the loan application and received the mandatory information. After receiving the informational data stipulated in Section 32, you have three business days to decide if you want to sign the loan agreement.
  • The notice should warn you that because the lender will have a mortgage on your home, you may lose your residence and all the money you would have paid for it if you did not make your payments.
  • The APR rate, the amount of the regular payment (including any applicable global payments), and when it comes to the refinancing of a mortgage, must inform you of the loan amount (and if the loan amount includes the credit insurance premiums as well) must declare it). For variable rate loans, the lender must inform you that there may be an increase in the rate and the monthly payment, and you must also declare the maximum amount of the monthly payment.

Prohibited terms and conditions

Prohibited terms and conditions

The following terms and conditions are prohibited in the loans of high fees and charges:

  • For loans of less than five years, global payments are prohibited – in cases where regular payments do not completely cancel the principal balance and a lump sum payment of more than double the amount of the regular payments is required. There is one exception: global payments are allowed for bridge loans with a term of less than one year that are used to buy or build a house.
  • Negative amortization – an increase in the balance of a loan caused by adding unpaid interest to the balance of the loan. This happens when the regularly scheduled payment does not cover the amount of interest owed.
  • Interest rate due to default or payment default higher than the rates applied prior to default.
  • Interest reimbursements in case of default that are calculated by any method less favorable than the actuarial method.
  • A repayment program in which more than two regularly scheduled payments are consolidated that must be paid in advance with the money obtained from the loan.
  • Most penalties for early payment, including reimbursements of unearned interest calculated by any method less favorable than the actuarial method. An exception applies if:
    • The lender verifies that your total monthly debt (including mortgage) equals 50 percent or less of your gross monthly income;
    • You get the money to repay the loan from any other source unrelated to the lender or an affiliate of the lender;
    • The lender exercises the penalty clause during the first two years after the mortgage started; Y
    • The regularly scheduled payment amount for the principal and interest can not change during the first four years after the loan is initiated.
  • A clause of payment under demand, except:
    • If you commit a fraud, or if you deliberately conceal or falsify facts related to the loan;
    • If you do not repay the loan according to the terms established in the loan agreement; or
    • If you take any action that adversely affects the creditor’s guarantee.

The providers can not do the following either:

  • Give you a loan based on the collateral value of your property without initially considering your ability to repay the loan, including your current income and logically anticipated income, your employment, your other assets other than the asset consigned as collateral, and your current obligations (including those obligations related to mortgages). In addition, the money for home improvement loans must be given directly to you, jointly with you and the contractor who will do the improvement work, or in some cases, an escrow agent.
  • Refinancing a HOEPA loan by converting it into another HOEPA loan within the first 12 months of its origination, unless the new loan is more favorable to you. This rule also applies to assignees (whether persons or entities) that retain or administer the loan.
  • Erroneously document a high-cost non-renewable loan as a renewable loan. For example, a high-cost mortgage can not be structured as a home equity line of credit if there is no logical expectation that additional transactions will occur.

If the provider breaks the law

If the provider breaks the law

You may have the right to sue a lender who violates the requirements of the HOEPA law. If you win the lawsuit, you can recover statutory and actual damages, court costs and attorney’s fees. Also, maybe you could cancel the loan up to three years after closing.

Loans without importing Financial Institutions: frequently asked questions about them

Quick loans have become a very useful solution when urgent money is needed. It is no longer necessary to endure long queues and wait for a loan, and this is very important when it comes to an emergency. But, in addition, you can currently apply for loans without importing Financial Credit Institutions. This means that, even if you are on a list of defaulters, such as Financial Credit Institutions, you will not have problems when it comes to obtaining financing.

Let’s see some of the most frequently asked questions people ask about this financial service.

Frequently asked questions about loans regardless of Financial Credit Institutions

Frequently asked questions about loans regardless of Financial Credit Institutions

The loans with Financial Credit Institutions have raised many questions among the people who are on this list of defaulters. But, from today, all these doubts will be resolved. From Astro Finance we will answer the most frequently asked questions about this type of financing.

Loans without importing Financial Credit Institutions: are they safe?

Loans without importing Financial Credit Institutions: are they safe?

In the past it was very complicated to be in a register of defaulters and get financing safely. However, there are currently many serious and proven secure companies that offer microcredits to people registered with Financial Credit Institutions. Therefore, if you choose the lender from a trusted website, you can find companies that offer you money without complications.

Why do companies risk lending money to people in Financial Credit Institutions?

Why do companies risk lending money to people in Financial Credit Institutions?

Private lenders have noticed that there is a lack of liquidity in people with Financial Credit Institutions and they want to solve their problems. In most cases, people who are in delinquent records are not usually inveterate delinquents. It is usually someone who did not agree with an invoice or was late in paying for a supply or service. Therefore, it is generally not about people with a “high risk of default”, as banks usually think.

Can anyone in Financial Credit Institutions request a loan?

Can anyone in Financial Credit Institutions request a loan?

If you are in Financial Credit Institutions for any of the reasons we have said (a delay in an invoice, a non-payment in a supply …) you can apply for a loan. However, if the reason for your registration is a financial debt for another loan or credit card, it will be very difficult for you to find a company that provides financing. It will also depend, according to the lender, on the amount of debt you have.

Are the credits with Financial Credit Institutions more expensive?

Are the credits with Financial Credit Institutions more expensive?

The most logical answer may be yes. However, the reality is very different. Credits that accept users registered in delinquent registers are not limited to this type of profile. They also offer loans to other people without debt. In addition, the cost of the loan does not vary depending on whether or not you are in Financial Credit Institutions. Therefore, we can say that loans for indebted people have the same cost as for people exempt from debt.

Is it possible to apply for a loan with Financial Credit Institutions without having a payroll?

Is it possible to apply for a loan with Financial Credit Institutions without having a payroll?

Yes. Just as it is possible for those who do not have debts, so it is for those who do. Although not having a payroll does not mean not having an income. Your income, as for all other people, must meet three requirements: be regular, demonstrable and of a sufficient amount to be able to repay the loan when the time comes. Therefore, even if you do not have a salary, it could be an unemployment benefit, a pension, an aid or the income that you have as a self-employed person.

Finding loans without importing Financial Credit Institutions is easier than ever. From Astro Finance we invite you to, if you are in a register of defaulters, take a look at the loan companies that accept clients in your situation. Sure you will be surprised by the number of options you have at your fingertips.

Urgent Loans for individuals

Urgent loans are financial products that, until the arrival of this new century, had not been precisely the preferred part of the population that was looking for funds for their projects outside the realm of family and friends.

What is what has led to this situation, in which they have become an alternative to which more and more people join? The answer is not univocal and, in addition, it has been configured in different times. That is why it is worthwhile to review why urgent loans have been consolidated as suitable options for the financing of individuals. Take note of what, next, we are going to tell you.

Urgent loans are for individuals

Urgent loans are for individuals

In the first place, we have to clarify that there is a circumstance that usually coincides in all the profiles that are interested in this type of financial products. It treats, as the own denomination of said product implies, of the urgency with which a financing is needed that does not stand out by its high amount.

For these reasons, these loans have been designed for individuals and not for companies. Resorting to them implies that, given the need to deal with certain immediate payments, there is neither solvency nor liquidity. A solvency and liquidity that customers who request these loans rely on recover in the short and medium term.

It is a punctual lack that has originated the request of the urgent loan, but the same accreditation of a regular income requested by the credit institution that grants it, proves that this problem is circumstantial and temporary and can be corrected by means of income. which, in the near future, will get the beneficiary.

As you can imagine, a private person does not ask for these loans, for example, for expenses as large as paying the furniture of a new house. One of these loans, in these cases, would only be good for paying a percentage that he would not have to pay for the total purchase. Nor are they loans designed for large companies. However, an SME itself could make timely use of one of these financial products, without going any further, to be able to afford a machine.

Why are these financial products adapted to specific user profiles?

Why are these financial products adapted to specific user profiles?

Little by little we have been defining the profiles that are going to feel a special interest for the urgent loans. Broadly speaking, they are financial products that have very attractive characteristics for entrepreneurs.

We refer both to people who are starting to start their own business and to those who have been working with them for some time and who still need occasional financing to keep them afloat or make them grow. The self-employed are, without a doubt, the workers that can most require these loans.

But they will not need them, in principle, to pay the abundant taxes they have to face in our country every month. In the same way that a private individual should not make use of these contributions to pay for what we know as current expenses. Expenses such as electricity and water supplies or the children’s school fee, which will have to be met each month.

To pay for all these expenses, it is necessary to have a stable economic situation in the medium term. An urgent loan has not been devised for this kind of monthly disbursements, but for the occasional and circumstantial needs. If you can not pay the usual expenses on a regular basis, what you have to do is reformulate the item you allocate to expenses of your domestic budget.

Resorting to immediate loans can save you from the problem on occasion, but it should not become a frequent wildcard. If this use were made of them, it would not take long to be over-indebted, due to the accumulation of interest payable.

An evolution that has consolidated them attractive

An evolution that has consolidated them attractive

Urgent loans exist since the financing activity began to be regulated officially. There were always people who needed the money with greater speed and, therefore, were willing, to get it, to stick to the conditions of return that agreed with those who left it. Conditions that, in general, used to be more demanding than those that characterized common loans, for whose return a longer period of time was contemplated.

Closer to our days, these loans were regularized as special financial products within the framework of the credit market. At the end of the twentieth century they were already differentiated from the usual loans and credits and were announced in the mass media as immediate loans. The speed with which the money was received was particularly valued, which outlined a very specific market niche for these products. They were, therefore, still secondary products in the financial field. Because of their conditions (especially because of their interests), they were referred to very isolated uses.

However, with the arrival of the 21st century a key event in the history of humanity was going to take place, which would also have very positive consequences for the evolution of these financial products: the popular consolidation of the Internet.

Internet as a key to the growth of these loans

Internet as a key to the growth of these loans

The possibility of communicating in a network (beyond the number of people and the distance between them) in real time has undoubtedly the greatest advantage when it comes to betting on these financial products. If the old fast loans already offered the telephone attention as an advance, in comparison with the meetings in the seats of the traditional banks, in matter of immediacy, the possibility of operating by Internet surpassed this agility in the managements.

In this sense, the relative savings to work on the Internet (need for fewer workers and real estate) allowed certain credit institutions, alternatives to life banking, to make economies of scale that made it possible to offer more advantageous conditions to customers. .

The online processing facilitated, on the one hand, the convenience of carrying out the requests for the urgent loan. On the other hand, it helped to promote more attractive products and that customers would not see them only as a last resort, as it used to happen at the end of the nineties of the last century.

Another historical event would be key when it comes to consolidating these financial products among Spaniards. Pay attention to what we are going to tell you.

An economic crisis as a relaunch of urgent loans

An economic crisis as a relaunch of urgent loans

Just as the arrival of the Internet in our lives meant an evident improvement in our communication conditions, which would no longer have the same limitations of time and space, a negative historical episode would contribute to boost urgent loans.

We are referring to the structural economic crisis that began in 2008, which significantly affected the banking system of our country. So much that it became necessary a reform that happened, in addition to a rescue with public money, by the demand for more severe control measures. As it was found that there had been excessive defaults on the repayments of the loans approved during the years prior to this crisis, more in-depth controls were imposed on the risk departments of the banks.

These controls were intended to verify that they were going to begin to tighten the conditions for the approval of the loans. Consequently, requirements such as an endorsement, a payroll or not having been registered in the census of defaulters managed by organizations such as Financial Credit Institutions and RAI would begin to be requested as guarantees for the repayment of the loans.

The present of a rising financial product

The present of a rising financial product

As an intermediary in the operations between lenders and borrowers, at Astro Finance we are interested in the potential clientele of the urgent loans having all the opportune information at the time of choosing them.

Among the advantages offered by these loans, we emphasize that they will save time and money in the making of photocopies and their subsequent delivery in the offices of banks. You will not have to keep your queues in front of the offices of attention of the venues or stick to your opening hours of the branches. On the contrary, you can do all the procedures from your own home, with the convenience of carrying them out at the time that comes to you right and from your own computer.

Remember that you have to register a user and enter the platform, where you will find the loan simulator. You will choose how much money you want (between 300 and 800 euros, for example) and you will decide to return it within a specific period of time, which will generate the operating fees.

Once you have also entered your personal and banking information, if the loan is approved, the money will reach your checking account as quickly as the credit institution has committed.

In short, urgent loans are convenient to avoid problems of occasional defaults and to deal with specific incidentals.