Israel faces housing bubble – or bust, OECD warns
The Media Line Staff
Jerusalem, Israel David Rosenberg (The Medi – Home prices – an anxious subject for both Israeli consumers and policy makers as they first raced higher and then suddenly started to sink – remain a threat to the economy, the Organization for Economic Cooperation and Development (OECD) warned on Monday.
Although the price rises have eased as the government has clamped down on mortgage lending, Israel is by no means out of the hole yet, the Paris-based organization said in a report. Israel faces a twin risk of prices spiraling upward to bubble levels, if current measures don’t bring about long-term stability, or conversely dropping sharply.
“There is still a risk that a soft landing may not be achieved and house prices (and loan repayments) in relation to rents and incomes may reach ‘bubble’ proportions, heightening the risk of a sharp and damaging correction,” the OECD said. “On the other hand, the early stages of weakness may presage an imminent sharper-than-desired decline in prices.”
The warning has special meaning for Israel, which unlike the U.S. and much of Europe, succeeded in avoiding the catastrophic collapse of its housing market and the financial crisis that followed. But ironically the country’s record of almost uninterrupted economic growth, combined with low borrowing rates, caused home prices to start climbing in Israel just as much of the developed world was seeing prices fall at double-digit rates.
The increase caused the Bank of Israel to undertake a series of measures to reduce demand for mortgages at the same time it was raising interest rates through much of 2010 and 2011.
“There’s a lot of concern that there will be crash. Prices are heading down – the only question is how fast and how far,” Pinchas Landau, an independent financial consultant, told The Media Line.
“For first time in 15 years, there’s more supply than demand. There isn’t massive building. You have a multi-year backlog, but it’s not American situation,” he said. “There could be widespread pain, but if prices come down 20 percent I don’t think that’s a crash. You have to look at how much they went up before.”
Home prices in the 12 months through September climbed 10.5 percent and the central bank has reversed course and lowered its base lending rate in the past two months, a move that could encourage more home loans. Nevertheless, there are signs that they may have reached a plateau.
The rise over the past 12 months is far less steep than the 20 percent recorded in 2010 and August-September prices dropped for the first time since 2008, according to Israel’s Central Bureau of Statistics (CBS).
Meanwhile, residential construction is increasing while sales of new homes are falling. The number of building starts in the 12 months through August reached 43,672 units, compared with annual rates of less than 35,000 up through 2009. But only 1,057 new homes were sold in October 2011, down by more than 50 percent from a year ago, the CBS reported at the end of November.
A survey of senior real estate executives in Israel conducted by the accounting firm Deloitte Brightman Almagor Zohar in November found that 46 percent expected home prices to decline as much as 10 percent in the coming 12 months and another 9 percent saw drops of 10-20 percent. Fifteen percent, however, foresee rises of up to 10 percent.
The OECD said that warning indicators, such as the ratio of home prices to rents had not reached “critical levels” and lauded the measures taken by Israel to restrain the rises. But it did recommend that the government, which controls the lion’s share of land in the country through its Israel Lands Authority, speed up the sale of leaseholds, reduce delays in planning approvals and work to develop a market in mortgage-backed securities “with a good deal of caution.”
It said tax exemptions for homeowners and property investors should be pared back and housing policy geared more toward encouraging more rental housing and helping low-income families.
In spite of growing signs of recession in Europe, which is Israel’s biggest trade partner, Israeli gross domestic product will likely post another year of growth in 2012, the OECD said. Real GDP growth will shift down to 2.9 percent in 2012 from 4.7 percent this year, but accelerate to 3.9 percent in 2013.
“This is substantially better than in many OECD countries, but Israel benefits from relatively rapid population growth,” OECD economist Peter Jarrett said Sunday while visiting Israel for the Globes Business Conference in Tel Aviv. “Europe is leading the world into another period of very slow growth, if not outright recession.”
The report addressed two other issues that have dominated economic policy in the past year amid a gathering storm of social protests over the high cost of living and growing income inequality. The protests began quietly against hikes in gasoline prices, morphed into a nationwide boycott of cottage cheese and erupted over the summer into tent cities and mass rallies that drew hundreds of thousands demanding a wide range of economic reforms.
The government responded by appointing a committee to examine socio-economic policy and has since adopted some of the recommendations of the so-called Trajtenberg panel.
The OECD said that Israel’s “deep socio-economic cleavages,” expressed in high rates of poverty and income inequality, is weighing down on the economy by lowering growth rates for productivity and per capita income. Although the problem is concentrated in Israel’s ultra-Orthodox and Arab populations – which account for 60 percent of poor households, double their proportion of the population – they are not the only Israelis trapped in poverty.
The report noted some progress in overhauling education, where Israeli students have performed poorly in international comparisons of achievement in science, math and reading. But the OECD faulted efforts to encourage people to join the workforce, pointing to the abandonment of the Wisconsin program, which had put the responsibility job placement in the hands of private sector firms.
The OECD was also supportive of efforts to increase business competition and restrict the size and power of holding companies. It backed plans to separate financial institutions, such as banks and insurers, from other businesses, while faulting the government for the slow progress toward creating competition in electricity generation.
The OECD said the scope for increasing competition in other industries is limited due to the small size of the Israeli economy.
Bank of England warns U.K. banks that eurozone crisis poses biggest threat
Linda Young – AHN News Writer
London, United Kingdom (AHN) – The head of the Bank of England issued a strongly worded warning to United Kingdom banks to get their financial houses in order to shield themselves from repercussions from the eurozone credit crisis.
Although the UK is not on the euro, the crisis in the 17-member nation eurozone could seriously affect the UK.
Governor Sir Mervyn King said the eurozone financial problems posed the largest threat to UK banks. King said the eurozone crisis presented a “significant and immediate threat to UK financial stability” and could cause a second credit crunch.
He warned UK banks to develop contingency plans in case of a break-up in the eurozone.
King warned the banks to raise more funds, by cutting bonuses to staff and dividend payments to shareholders. However, he said they should not stop lending to households and businesses.
Deputy governor Paul Tucker also warned banks, saying the situation represented an exceptional peril in which conditions could degrade to allow virtually anything to happen.
King, speaking in his role as chair of the interim Financial Policy Committee (FPC), the Governor told commercial banks that they must build up their reserve funds in order to serve as increased insurance against potentially catastrophic developments in the eurozone.
While strongly advising banks to continue lending while cutting staff bonuses and shareholder dividends, the committee suggested issuing new shares to raise capital for reserves if necessary.
Bad Credit Loans For People on Benefits- A Golden Opportunity For Disabled People
If you are on benefits, then you will be the right person to explain how it goes when you are denied loans from any lender. As most of the lending institutions are finicky about credit score of any loan applicant and if they find a person with poor credit score, they will be simply denied loans not only on the grounds of the person on benefits but also with a poor credit score. This is the worst situation when a person will go through who is already on benefits, has been denied loans owing to his bad credit score. As there is a sunrise after every sunset, in the same way one should not loose hope. There are some lenders who really consider the conditions of the person running on benefits and provide loans without checking his or her credit history. These loans are known as bad credit loans for people on benefits which are helpful in meeting the urgent and daily expenses.
The other bad factors are not taken into account like foreclosures, missed payments, IVA (Individual Voluntary Arrangement), County Court Judgment (CCJ), defaults, etc when the bad credit loans for people on benefits are sanctioned to the loan applicants who are on benefits with a bad credit history. Fair Issac Corporation determines the credit score of a borrower ranging form 300 to 800 points and anyone below 600 points will be declared as bad creditor. If the person is also running on benefits, he would qualify for bad credit loans for people on benefits. The loan amount would range between 1000 and 75000 and it entirely depends upon efficiency of a person to repay the loans or the value of property he has declared as a mortgage to obtain loans. Repayment period has been designed on flexible terms ranging from 1 to 25 years.
There are two different categories of bad credit loans for people on benefits which are unsecured bad credit loans for people on benefits and secured bad credit loans for people on benefits. Unsecured bad credit loans for people on benefits are appropriate for the tenants and non property holders who cannot pledge a property to obtain a loan and secured bad credit loans for people on benefits are ideal for the bad credit people on benefits who are capable of mortgaging their property in the exchange of loan amount. The rate of interest is little bit higher for unsecured bad credit loans for people on benefits whereas a moderate rate of interest is associated with secured bad credit loans for people on benefits.
It is very necessary to look for right kind of lender who would offer loans for people on benefits with bad credit scores on the internet and online assistance is also there for applying during anytime of the day and as a result approval for the loans also become faster.
Achievement of Personal Unemployed Loans in Two Forms
As you have planned for your wedding to arrange in a grand manner but being closed by your wedding you are obfuscated. If you are really feeling yourself helpless or bad and are not finding out any financial aid from banks as well as lending agencies. You also cannot expect from your kiths and kinds. For your failures at every place, your unemployment is the hindrance. As you know that unemployment means, there is no source of income. This is because lenders feel risk in lending money to the unemployed borrowers. But via this article you can bless your life and arrange your occasion in a grand manner. You can apply for personal loans which are available in two forms, and hence enjoy your occasion without any delay.
These loans are available in two categories. That’s why it is compulsory to know well about these loans. You can derive finance in secured and unsecured forms. The secured loans endow the benefits to the homeowners only as for obtaining the loan amount given in it, you need to place a valuable asset as collateral which can be anything akin to a home or real estate. The interest rate is very low for the larger sum of the amount. The unsecured loans are contrary to what are the secured loans? In matter of unsecured form, you can be levied with a higher interest rate and the offered amount too is smaller as compare to the secured form. But the important factor is that you don’t need to be a homeowner as you don’t need to pledge any collateral for securing the funds.
Another remarkable thing about the personal unemployed loans is that all kind of creditors are acceptable. Whether you are a good creditor or a bad creditor, be confident that you will be offered with the loan amount. So, people who are blemished with adverse credit records like defaults, County Court Judgments, late payment, arrears, bankruptcy, IVA or skipping of installments can also raise the benefits. All borrowers can utilize these loans to purchase a used or a brand new car, home renovation, pay off the previous debts, pay for higher education of their children, go for vacation, and so on.
Skip the Bank and Get a Loan!
Do you know about the lending club?
The Lending Club is an online financial community that brings together borrowers and lenders. Their mission is to create al alternative to banks that offers borrowers a great rate introducing borrowers to lenders via the internet.
Peer-to-peer lending is not new, but the Lending club is one of the main innovators in this area. Borrowers hurt by the credit squeeze can turn to peer lending to find financing from investors looking to lend.
You can use the lending club to pay off credit card debt, look for an alternative to banks for business funds, find a lender for a micro loan, etc.
How to start:
The application process is easy,
A) Apply for a Loan Online in minutes
B) Get funds in a few days
C) Make Fixed monthly payments
They are commited to be more competitive than a regular bank by reducing the cost and complexity of bank lending
The online process is fast and easy, you can apply in minutes and get an instant rate quote
Members are using these loans for:
Loan Consolidation
Paying off Credit Cards
Car or Vehicle loans
Unsecured Loan
Home Improvement
Business Loans
Special Events
Green Loans, green home renovations, installing solar panels, etc.
Other Personal Loans, wedding, extra expenses, elective surgery, vacation, and much more,
You can borrow up to $35,000 at a lower rate than the bank typically offers.
Start today for a Personal Loan or a Low Interest Loan
*information based on Lending Club website on 4/13/2010
Long Term Bad Credit Loans: Great Finance Despite Bad Credit
Great Britain has been passing through tremendous financial crisis for some years. The same is true for the British citizens many of whom are to secure loans to meet demands of the day. Income is always limited and it is rarely proportionate to expenditure. Hence, large number of men and women fail to pay off loans, and they are to borrow again and again from several sources for this very reason. One day, they find that they have credit score less than 600 as per FICO. Fortunately, there are plenty of lending agencies in the financial market and long term bad credit loans are available.
Persons having history of bad credit can apply for long term bad credit loans
. Long term bad credit loans are available in two options: secured and unsecured.
The borrowers must have valuable possessions if they want to secure long term bad credit loans in the secured option. They are to allow their worthy assets to be pledged to get this loan. The lenders are ready to pay an amount within the range £10 000 to £75 000, and they want the loan amount to be cleared within a period between 5 and 25 years. The interest rates for this kind of loans are low.
The lenders do not want any guarantee for long term bad credit loans in the second option, that is, in the unsecured option. The loan amount comes within the range from £1000 to £25 000 for a tenure of 1 to 10 years. The borrowers are to pay interests at higher rate.
Economic crisis has favored the borrowers, as the financial market has become highly competitive. The lenders are to invest, and sometimes they are forced to offer quotes at lower rates of interest. The loan-seekers can take advantage of the situation. It is good for them to search the web sites of the lending agencies on the internet. They can find several quotes and can compare and contrast them. It is possible to find a favorable option to the best of their capacity and demand.
The borrowers having bad credit record can use long term bad credit loans to gather strength for the future. They can improve their credit record. They can apply online at ease.
The applicant must be a citizen of United Kingdom, and he must be at least 18 years of age. He must hold an active bank account. The applicant must be employed in any legally approved organization and his monthly income must be at least £1000.
Long Term Loans: Secure Finance at Favorable Terms
Provisions of long term loans made by the financial market have benefitted large number of people in Great Britain, people who could not otherwise secure this kind of loans which they require to fulfill some of their dreams. Many of them have considered buying a piece of land so that they can build up a home of their own in future. Many others have decided to buy a home. Sometimes it is also difficult to purchase a desired vehicle as financing for it is hardly possible. Long term loans are of great assistance when one has to respond positively even to a wedding ceremony in the family.
Long term loans are classified in two categories: secured and unsecured.
The borrowers must provide valuable assets like a costly vehicle or his home or a piece of land or anything of this kind if they want to get the long term loans in secured form. The valuable possessions of the borrowers are used as collateral against which the loans are offered. The lenders will have the right to take over this property if the borrowers fail to clear the loan amount in time. The lenders, of course, warn the borrowers before taking such drastic step.
There are some advantages in getting long term loans in secured form. The loan amount is good and the loan-seekers can secure an amount between £5000 and £75000. The borrowers are given 5 to 25 years to repay the loan. The interest rates are comfortably low.
One can apply for long term loans in unsecured form. The loan amount ranges from £5000 and £25000, and the loan must be cleared within 1to 10 years. The rates of interest for the loan are again comparatively high.
The applicant must be at least 18 years of age and he must be a citizen of United Kingdom. It is important that he must possess a valid bank account. The applicant must work in a legally approved organization and must earn at least £1000 in every month.
It is, however, not hard to find the lending agencies or the lenders. The loan-seekers can search the web sites of the lending agencies on the internet. They can select a quote suitable for them and they can apply online.
Bad Credit Loans and Lender Questions & Answers
Q: What is a private investor and how do they differ from a hard money lender or a subprime lender?
A: A private investor is an individual who lends out their own funds to borrowers who are unable to obtain a loan from a traditional lender such as a bank. It is also possible for private investors to pool their money into a fund that lends out money on a larger scale. Private investors are often wealthy or retired individuals who want a better return on their investments than they could expect to make in the stock market or other investment vehicles.
A private investor is essentially the same thing as a hard money lender. A private lender differs from a subprime lender in that the latter still funds loan through a lending institution such as a bank, although the interest rate is higher than a traditional conforming loan.
Q: Why would a bad credit lender fund my loan when traditional banks would not?
A: Hard money lenders, sub prime and bad credit lenders are often referred to as “high risk lenders.” These lenders have a unique understanding of specific types of real estate situations and markets. As long as the lending situation fits into the lenders comfort zone, they will usually make the loan. It isn’t that a bad credit lender gravitates towards overly risky loans or situations. Rather, there are additional safeguards in place for a bad credit lender. Namely, a borrower must have a 20% or higher equity stake in a property to qualify for a bad credit loan — the loan is therefore secured by a larger property ownership portion than many traditional loans.
In addition, the bad credit lender receives a higher rate of return than a bank would with a traditional conforming loan. The greater the risk for the lender, the higher the interest rate for the borrower. If one or more traditional lending institutions deny a borrower’s loan because of credit problems or a small level of liquid assets to use as collateral, a borrower will need to apply with a subprime, hard money or bad credit lender.
Q: If I qualify for a hard money loan, is there a way to eventually work into a normal loan?
A: Of course. A bad credit loan should be a short term loan – anywhere from several months to 2 years. After a borrower has spent a year or 18 months paying off their private loan, our mortgage team will try to transition you into a subprime or alt A loan. Hopefully, this is enough time to rebuild your credit and get on a more stable footing financially.
Q: What kind of financial documentation does a borrower have to show to qualify for a bad credit loan?
A: While the type of documentation needed to secure a loan will vary from lender to lender, most require either bank statements or income tax returns. The lender will usually need to see an appraisal of the property, as well as the title to make sure that the borrower is indeed the owner and to see if there are any existing liens or legal issues with the property in question. Each bad credit lender will analyze the necessary documents and then decide whether to provide the loan.
Q: What if I have damaged or bad credit as well as a low FICO score?
A: The majority of bad credit borrowers apply for a bad credit loan due to damaged credit along with a lower than normal FICO score The whole point of hard money or private loans is to provide a loan to an individual with past, recent, or current credit issues so they can rebuild their credit and eventually refinance to a more traditional type loan.
Q: What is my FICO score and how can I find out what mine is?
A: A FICO score is a basic credit score that estimates the creditworthiness of a borrower and is used by financial institutions to determine credit limits and interest rates. FICO scores are held by the three major U.S. credit agencies (Equifax, Experian and Trans Union) and all vary slightly depending on the formula used to generate the score.
FICO scores range from about 300 to 850. A score above 720 is considered to be “good credit,” while a score below 600 is considered to be fair to poor. Conforming lenders want to see a credit score of usually 640 and higher. High risk lenders will look at credit scores as low as 500, as long as the borrower has 25% or higher equity in a property for collateral.
Q: How do I Apply for a Bad Credit Loan?
A: Do a search on the internet for “bad credit loans” or “bad credit lenders” and will find different bad credit lenders that offer bad credit loans in various states. Then either call them and explain your situation to them or fill out their short online application to be considered for a hard money loan. Be sure to read the language of the loan documentation carefully to protect your self from predatory lending.
Corey Senn is a Senior Partner with Bad Credit Lender, a California based private lender that specializes in hard money loans and bad credit loans. Located in La Jolla, California, Bad Credit Lender provides competitive private California hard money loans, bad credit home loans, and bridge loans. In addition, Corey is one of the main contributors to the California Home Mortgage Loan web blog.
Author: Corey Senn
Article Source: EzineArticles.com
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Bad Credit Loans and Lender Questions & Answers
Q: What is a private investor and how do they differ from a hard money lender or a subprime lender?
A: A private investor is an individual who lends out their own funds to borrowers who are unable to obtain a loan from a traditional lender such as a bank. It is also possible for private investors to pool their money into a fund that lends out money on a larger scale. Private investors are often wealthy or retired individuals who want a better return on their investments than they could expect to make in the stock market or other investment vehicles.
A private investor is essentially the same thing as a hard money lender. A private lender differs from a subprime lender in that the latter still funds loan through a lending institution such as a bank, although the interest rate is higher than a traditional conforming loan.
Q: Why would a bad credit lender fund my loan when traditional banks would not?
A: Hard money lenders, sub prime and bad credit lenders are often referred to as “high risk lenders.” These lenders have a unique understanding of specific types of real estate situations and markets. As long as the lending situation fits into the lenders comfort zone, they will usually make the loan. It isn’t that a bad credit lender gravitates towards overly risky loans or situations. Rather, there are additional safeguards in place for a bad credit lender. Namely, a borrower must have a 20% or higher equity stake in a property to qualify for a bad credit loan — the loan is therefore secured by a larger property ownership portion than many traditional loans.
In addition, the bad credit lender receives a higher rate of return than a bank would with a traditional conforming loan. The greater the risk for the lender, the higher the interest rate for the borrower. If one or more traditional lending institutions deny a borrower’s loan because of credit problems or a small level of liquid assets to use as collateral, a borrower will need to apply with a subprime, hard money or bad credit lender.
Q: If I qualify for a hard money loan, is there a way to eventually work into a normal loan?
A: Of course. A bad credit loan should be a short term loan – anywhere from several months to 2 years. After a borrower has spent a year or 18 months paying off their private loan, our mortgage team will try to transition you into a subprime or alt A loan. Hopefully, this is enough time to rebuild your credit and get on a more stable footing financially.
Q: What kind of financial documentation does a borrower have to show to qualify for a bad credit loan?
A: While the type of documentation needed to secure a loan will vary from lender to lender, most require either bank statements or income tax returns. The lender will usually need to see an appraisal of the property, as well as the title to make sure that the borrower is indeed the owner and to see if there are any existing liens or legal issues with the property in question. Each bad credit lender will analyze the necessary documents and then decide whether to provide the loan.
Q: What if I have damaged or bad credit as well as a low FICO score?
A: The majority of bad credit borrowers apply for a bad credit loan due to damaged credit along with a lower than normal FICO score The whole point of hard money or private loans is to provide a loan to an individual with past, recent, or current credit issues so they can rebuild their credit and eventually refinance to a more traditional type loan.
Q: What is my FICO score and how can I find out what mine is?
A: A FICO score is a basic credit score that estimates the creditworthiness of a borrower and is used by financial institutions to determine credit limits and interest rates. FICO scores are held by the three major U.S. credit agencies (Equifax, Experian and Trans Union) and all vary slightly depending on the formula used to generate the score.
FICO scores range from about 300 to 850. A score above 720 is considered to be “good credit,” while a score below 600 is considered to be fair to poor. Conforming lenders want to see a credit score of usually 640 and higher. High risk lenders will look at credit scores as low as 500, as long as the borrower has 25% or higher equity in a property for collateral.
Q: How do I Apply for a Bad Credit Loan?
A: Do a search on the internet for “bad credit loans” or “bad credit lenders” and will find different bad credit lenders that offer bad credit loans in various states. Then either call them and explain your situation to them or fill out their short online application to be considered for a hard money loan. Be sure to read the language of the loan documentation carefully to protect your self from predatory lending.
Corey Senn is a Senior Partner with Bad Credit Lender, a California based private lender that specializes in hard money loans and bad credit loans. Located in La Jolla, California, Bad Credit Lender provides competitive private California hard money loans, bad credit home loans, and bridge loans. In addition, Corey is one of the main contributors to the California Home Mortgage Loan web blog.
Author: Corey Senn
Article Source: EzineArticles.com
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Options For Loans For The Unemployed: Unsecured Loans
Obtaining a loan can be a arduous proposition, compounded further by the current economic situation presently being faced by many Americans. This can be even that much more difficult should you find yourself to be unemployed. Traditional lending institutions often have rigorous standards with to whom they loan money. Being out of work can often make someone ineligible for most loans. The good news is that loans for the unemployed are still available; even so, you may have to explore some out-of-the-box solutions. Unsecured loans offer the funding you need; however, the are often accompanied by stringent guidelines which can make them an unsettling option for the borrower.
Unsecured loans are those loans which are not guaranteed by any security or collateral. Conversely, secured loans are those loans which are guaranteed against default by collateral security (often times a home deed, car deed, stocks or bond certificates), which can be used in the event of a default to help offset the balance of the loan. Unsecured loans are not without their risks, often being met with restricted terms, lower loan amounts and higher interest rates. Given the tight parameters of lending unsecured loans present a lower risk to the lender. While the potential for default still exists the threshold for loss is limited due to the smaller size of the loans. Outside of conventional lending institutions unsecured loans can be obtained through private parties (often family or friends) with the help of a simple yet legally binding contract. In case of default through private parties, your contractual agreement is enough to hold up in small claims court.
It is tough but not impossible for an unemployed person to get a loan. Someone in this situation may have to think outside of the box in order to obtain funds. Some options include personal loans and loans given by financial institutions, but either way, the borrower must be open to accepting conditions that are less than ideal. Unsecured loans can offer a great option for quick funding if your willing to accept less that optimal terms.
