Due to the recession many Americans have exhausted all formal resources to borrow money and are looking to relatives for a bailout. Some relatives are able to help out my loaning money to needy families. The probability of a relative being able to pay back the money they borrowed from you is a lot lower than the probability that they will ask you for money again so decide if you want to be their personal bank or if you want to make them stand on their own two feet.
Here are some questions to consider before loaning money to a relative:
1. Decide if it will be a loan or a gift
2. Will you charge interest?
3. What are the consequences if they don't pay the money back?
4. Will the loan you give put your relative in a financial bid?
5. Is the loan for a legitimate reason?
Here are 11 tips when loaning money to relatives.
1. Keep your head above water. Don't go further into debt to help a relative, not even your mother. If you go into debt and lose your job, your mother can no longer get help and may are jobless and in mounds of debt with no one to help you
2. Ration out help. You can occasionally help relatives for emergency purposes but don't make it a habit because you will only hinder them instead of help them. Give a man a fish and he eats for a day, teach a man to fish and he eats for a lifetime.
3. Give advice. Give advice on how you got out of a financial crisis and become financially stable. Encourage them to develop better spending habits or seeking professional help.
4. Don't be a sucker. Don't fall for the tears, sobs and emotional pleas for help for relatives who do not manage their money wisely.
5. Ask for the address. If a relative asks for money to pay a bill and you want to help, ask them to give you the bill and you can send the money to pay the bill. If they refuse, they you know they wanted the money for something frivolous and didn't really need help.
6. Agree with your spouse. Work with your spouse to discuss the situation. If it is her family, then be sensitive to her needs. Take a stand. If your spouse advises you not to help a his/her relative listen to your spouse. They know their relatives better than you do.
7. Don't co-sign for relatives. You can’t control how other people spend their money. If they don't pay the bill, you are responsible for the debt and risk the chance of ruining your credit.
8. Direct them to social programs. Tell your relatives to seek help from their local church, American Red Cross. Visit www.bailafamilyout.com.
9. Assume you won't get the money back. Always assume that you won't get the money back. If makes it easier to loan the money.
10. Draw up a loan agreement. You can have your relatives sign a contract if you want to feel better about ensuring you will get your money back.
11. Consider other relatives. If you loan money to a relative and your other relatives find out they will want a loan too, be prepared to deal with the backlash if you don't lend money to all your relatives who ask for a loan.
Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Monday, August 10, 2009
Sunday, May 17, 2009
How Bank Bailout Money Was Used for Lobbying Congress
Congress is considering credit card legislation to help consumers. However some members of Congress believe that the banking and financial industries have too much influence on members of Congress. Unfortunately the banking industries does have a great influence on Congress which is not good for consumers. Some banks increased the amount of money spent on lobbyists last year including Wells Fargo and Bank of New York Mellon Corp.
Some of the top recipients of contributions from companies receiving TARP money are members of Congress who chair committees tasked with regulating the financial industry and overseeing the effectiveness of TARP program including Senator Chris Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs who received $854,200 from the companies in the 2008 election. Senator Max Baucus, chair of the Senate Finance Committee received $279,000.
Members of the Senate Finance Committee and House Financial Services Committee and Senate Committee on Banking, Housing and Urban Affairs, received $5.2 million from TARP recipients in the 2007-2008 election cycle.
The 300 or so companies that have been received aid from TARP, 26 of them paid lobbyists $76.7 million to represent them on Capitol Hill in 2008. The 161 companies approved for TARP money gave $37.5 million to federal candidates, parties and committees in the 2007-2008 election.
Bank of America spent $14.5 million towards campaign contributions for Congress, received $45 billion from the bailout and spent $8.78 million on lobbying. Citigroup was also one of the top companies that spent the most, $12.5 on lobbying expenses and campaign contributions, and received $50 billion from the bailout. American Express spent $3.79 million and M&T Bank spent $10,000 on lobbying.
The top 10 companies that received the $700 billion bailout spent $9.5 million on federal lobbying during the first 3 months of the 2009. Citigroup Inc. and JPMorgan Chase & Co. spent over $1 million in lobbying. Bank of America Corp spent $660,000 in lobbying, Wells Fargo $700,000 in lobbying, PNC Financial Services Group, spent $135,000, and U.S. Bancorp spent $170,000 on lobbying.
Write your state congressman and representative and voice your opinion about the banking and financial industry lobbyists.
Some of the top recipients of contributions from companies receiving TARP money are members of Congress who chair committees tasked with regulating the financial industry and overseeing the effectiveness of TARP program including Senator Chris Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs who received $854,200 from the companies in the 2008 election. Senator Max Baucus, chair of the Senate Finance Committee received $279,000.
Members of the Senate Finance Committee and House Financial Services Committee and Senate Committee on Banking, Housing and Urban Affairs, received $5.2 million from TARP recipients in the 2007-2008 election cycle.
The 300 or so companies that have been received aid from TARP, 26 of them paid lobbyists $76.7 million to represent them on Capitol Hill in 2008. The 161 companies approved for TARP money gave $37.5 million to federal candidates, parties and committees in the 2007-2008 election.
Bank of America spent $14.5 million towards campaign contributions for Congress, received $45 billion from the bailout and spent $8.78 million on lobbying. Citigroup was also one of the top companies that spent the most, $12.5 on lobbying expenses and campaign contributions, and received $50 billion from the bailout. American Express spent $3.79 million and M&T Bank spent $10,000 on lobbying.
The top 10 companies that received the $700 billion bailout spent $9.5 million on federal lobbying during the first 3 months of the 2009. Citigroup Inc. and JPMorgan Chase & Co. spent over $1 million in lobbying. Bank of America Corp spent $660,000 in lobbying, Wells Fargo $700,000 in lobbying, PNC Financial Services Group, spent $135,000, and U.S. Bancorp spent $170,000 on lobbying.
Write your state congressman and representative and voice your opinion about the banking and financial industry lobbyists.
Saturday, February 07, 2009
What the IndyMAC Sell Means
The FDIC announced last month that it would sell IndyMAC to a group of private investment firms for $13.9 billion. The buyers include J.C. Flowers & Co. and hedge fund Paulson & Co plus several other firms.
The bank will be controlled by IMB Management Holdings and managed by Steven Mnuchin, who is chair and co-chief executive of Dune Capital Management. Terry Laughlin, will serve as chief executive of IndyMac and previously headed Merrill Lynch Bank & Trust.
The failure of IndyMac bank will cost the FDIC between $8.5 billion and $9.4 billion and the deal is expected to close within the next three months.
The private buyers will put $1.3 billion in capital into the IndyMAC bank. IMB Management has agreed to continue the streamlined loan modification program that FDIC Chairman Sheila Bair put into place to continue to receive the FDIC's loan loss protection.
The IndyMac loan modification program will assist homeowners who are experiencing problems by adjusting their mortgage payments to no more than 38% of their monthly income. This is achieved by either reducing the interest rate or extending the length of the loan.
According to the FDIC, more than 8,500 mortgages have been modified and over 9,400 are in the process of being modified. The new bank will have 33 branches in the Los Angeles area.
The bank will be controlled by IMB Management Holdings and managed by Steven Mnuchin, who is chair and co-chief executive of Dune Capital Management. Terry Laughlin, will serve as chief executive of IndyMac and previously headed Merrill Lynch Bank & Trust.
The failure of IndyMac bank will cost the FDIC between $8.5 billion and $9.4 billion and the deal is expected to close within the next three months.
The private buyers will put $1.3 billion in capital into the IndyMAC bank. IMB Management has agreed to continue the streamlined loan modification program that FDIC Chairman Sheila Bair put into place to continue to receive the FDIC's loan loss protection.
The IndyMac loan modification program will assist homeowners who are experiencing problems by adjusting their mortgage payments to no more than 38% of their monthly income. This is achieved by either reducing the interest rate or extending the length of the loan.
According to the FDIC, more than 8,500 mortgages have been modified and over 9,400 are in the process of being modified. The new bank will have 33 branches in the Los Angeles area.
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