Cancellation policy for real estate loans

Termination instructions for real estate loans

Termination instructions for real estate loans

Many consumers have benefited in the past from false revocation policies for their real estate loans. Pre-examination of notice of termination for real estate loans Does the cancellation policy of my loan agreement not correspond to the reality? Are the dates for concluding my loan agreement falling within this timeframe? What should I do if I receive a wrong cancellation policy? Written note: Real estate loan agreements can usually only be terminated within 14 days after conclusion of the contract.

This right of revocation is to be pointed out to the consumer by the revocation instruction. In the absence or incorrectness of this instruction – eg due to misleading phrasing – a different period applies.

Many consumers have benefited from this in the past: Many financial institutions had made small or large mistakes in the preparation of the cancellation policy. Consequently, the 14-day withdrawal period was dropped. On the contrary, consumers could use their right of withdrawal for an indefinite period of time after signing the contract. In 2016, however, the insurer intervened and in most cases set a grace period for the consumer. The credit agreements that could previously be revoked indefinitely could only be revoked until 31 December 2016.

In the event of missing or incorrect cancellation policy, the following provisions now apply: The agreements concluded between December 31, 2010 and December 31, 2016 may be terminated indefinitely if there is no or incorrect instruction. Orders placed after 31 December 2016 may be terminated with no or no false instruction for a maximum of 1 year and 14 days.

Revocation of real estate loans with several borrowers

Revocation of real estate loans with several borrowers

The Federal Court of Justice (BGH) decides on the consumer’s right to object to real estate loans and does not stop. By decision of 11 October 2016 – II ZR 482/15 at the end of last year, the Federal Court of Justice (BGH) has taken a position on key issues of the right of opposition. In the dispute of 11 October 2016, two borrowers (plaintiffs) had closed several real estate loan agreements with the 2004 plaintiff house bank.

She had enclosed the credit agreements with the revocation instructions she had used at that time. In 2012, the lawsuits sought to sell the property to be financed. The Respondent has offered the Applicants a dissolution agreement in which the Applicants have agreed to pay a termination fee. The cancellation agreement has been concluded. Thus, in October 2013, the applicants withdrew their contractual statements on the conclusion of the credit agreements in 2004.

In the application, the applicants have asked the defendant to reimburse the cancellation fee plus default interest and to return the services of the principal bank. Among other things, the BGH had to clarify whether only one borrower could revoke his contractual declarations with several borrowers and what consequences this would have for the loan agreements.

In addition, the BGH had to examine whether the early voluntary termination of the loan agreements as a result of the cancellation agreement in 2012 led to the borrowers losing their right of withdrawal. The decision-making grounds of the Federal Court of Justice contain both findings in favor of the complainants and in favor of the principal bank. At that time, BuyNer had not implemented the requirements of the model termination statement correctly.

Therefore, according to the Federal Court of Justice, the cancellation policy was wrong, so that the revocation period in 2013 had not yet expired. In addition, the BGH has specified that each of several borrowers can independently repudiate its contractual statements to conclude a consumer credit agreement.

The consequence of such a revocation would be that the consumer loan agreement as a whole would be converted into a repayment obligation, ie the credit agreement would have to be dissolved in relation to the other borrowers. Other peculiarities of the proceedings were that the plaintiff parties declared the opposition only after they had concluded the objection agreement with the house bank in 2012 with a protest fee.

In this context, the BGH stated that the complainants can in principle still effectively withdraw their order statements from the year 2004, even after such termination agreement. However, the BGH clarified that, in its opinion, in such a case the applicant’s right of opposition could have expired and thus be irrelevant to the company.

Following the conclusion of the contract, which had been concluded at the request of the complainants, BuyNer could be protected and trusted that the complainants would no longer exercise their right of withdrawal. The BGH referred the case to the previous instance, which has to examine in detail the problem of the forfeiture of the opposition.

The Federal Court of Justice has affirmed by a resolution of 21.02.2017 – 16 ZR 381/16 that a cancellation policy is to be interpreted according to general factual aspects and that it is not important for the review of the regularity of the cancellation policy, as the contracting parties understand the cancellation policy. Of particular concern are the rulings of the Federal Court of Justice for Borrowers who have already announced the withdrawal of their contractual statements on the conclusion of a loan agreement and have since come into conflict with their credit company over the validity of that withdrawal.

These assessments help both borrowers and credit institutions to argue. These may be used to settle at least some of the pending litigation relating to the right of withdrawal.

Construction loans Interest

Home loan interest

Home loan interest

Due to the increase in the Yebank, interest rates for variable construction financing rose from three to six percent. Better to fix the variable interest rates now? To annoy real estate buyers with variable interest rates, the current development increases the price of construction costs. Who used a variable loan between 2009 and 2010, should check whether it is meaningful for a rescheduling in a fixed-rate loan, advises Manly Fred of Construction loan mediator Enderlein. Especially debtors who have to rule out a further price increase of their credit load should equip at least part of the loan amount with a classic fixed rate loan.

The question of how quickly variably the variable credits can rise in price had to test real estate buyers between 2005 and 2007. Within two years, the so-called Yebank interest rate increased from two to five percentages. It serves as the reference rate for the variable bonds of The interest rates for variable mortgage lending rose from three to six percentage points with the rise in the euro.

In the next few years, a similar scenario is quite possible again if the economic situation prevails even when traveling outside Germany, says Hlscher. There are two options for action If you took a variable loan of less than two percentage points in 2010, you will already have to raise around 0.5 percentage points today. Every three or six years, the conditions for variable mortgage lending to the Yebank will be improved.

Repay your loan

Repay your loan

You can either repay your loan in any amount you want â € “only those who benefit from this opportunity and above average clears, really scores on the variance of interest rates, explains Hlscher.” Who but the eradication flexibility does not use and only slightly erases, In the view of the financial experts, this should consider the second possibility of debt restructuring to pull the variable credit line back into a fixed rate loan.

This would increase the interest burden, but debtors would then face further rate hikes and thus unpredictable cost increases. Fixed-interest loans under 10-year fixed-interest loans still have a borrowing rate of less than four percentage points, for example at 3.67 percentage points at MetLoan, 3.69 percentage points at Sparda Bank Nürnberg or direct insurers Europe and DTW. Real estate financing with 3.74 percentage points each.

In particular, entrepreneurs or certain specialist groups, such as physicians with high fluctuating incomes, could save immense interest rates with flexible loans. Especially if they use the interest rate saving program against a fixed rate loan transaction for a higher repayment. Part of the loan is paid by over as fixed loan, the other by over as floating rate loan.

For example, debtors can cut in half by low Yebank interest rates and high repayment flexibility and, secondly, by the interest rate risk of the fixed-interest loan.

Will The US Raise The Debt Ceiling, Or Standard?

 

 We had the unique opportunity to interview FOX Business Network reporter Adam Shapiro about the ongoing US debt crisis and the intense debate about the possibility of raising the national debt ceiling.

The current situation is extremely complex and opinions differ from all sides. For more information about the problem, see the special FOX Business Network report on Monday August 1 at 5:00 AM Eastern.

Interview with FOX Business Reporter

Interview with FOX Business Reporter

The debt ceiling issue appears to result in a default, credit cut or severe cuts, all of which can have a serious impact on the recovery. Is there a way to resolve the debt ceiling without risking a double dip recession?

Adam Shapiro : I don’t think the issue of debt / default is the only reason our economy is falling back into recession, but it will contribute to a slowdown and therefore:

The United States still has money that flows to the Treasury, roughly $ 172 billion in August according to the Bipartisan Policy Center, and more than enough to pay the interest payments on our debt, which is about $ 29 billion in August. The standard threat comes from the short-term debt that we have to refinance in August, which is around $ 500 billion.

The administration has made paying our interest a priority. That alone should be enough to tempt lenders to buy our debt and allow us to waste $ 500 billion. The problem is that they expect a higher interest rate on the new debt and that we end up paying more than $ 29 billion in monthly interest. That means that more money should be used to the Treasury to finance our debt, making less money available for programs such as food stamps, roads, housing assistance, defense contracts, Medicaid and the list goes on.

And if the interest rate for the government rises, they will rise for the average consumer, which means that car loans, small loans to buy devices, credit card and mortgage rates will all rise. That in turn could lead to people spending less, and the money they hold if they have less confidence in the future. That would lead to a slowdown in the economy, and since GDP is now growing at an anemic 1, 3%, we can fall back into a recession.

The only way to solve the debt / standard problem and avoid a double dip recession is to ensure that our creditworthiness is not lowered, which will be a signal to US financial markets and consumers, so that they can feel confident about the future.

 

Do you think that S & P or Moody’s really run the risk of causing turmoil in the global economy by lowering the US rating or are they bluffing to influence fiscal policy?

AS : S & P and Moody’s don’t bluff. They must assess the creditworthiness of debts and in this case the public debt. However, I think it is tragically ironic that these are the same rating agencies that have contributed to the financial collapse (remember that these organizations have largely misunderstood subprime mortgage-backed securities).

What should upset every American is that none of the credit rating agencies has been held responsible for the terrible and possibly criminal job they have done over the years to start the financial collapse. Even worse, the agencies continue to maintain their mandated monopoly.

How harmful do you think a reduction in the US rating would be? Would a standard shock wave send through the US economy? Have we not encountered problems in the shortest possible time in the 1970s without causing a crisis or losing our AAA rating?

AS : The past only tells us where we have been, not necessarily where we are going, and when you mention the 1970s, there are several factors that differ today. So first, yes, I think lowering US creditworthiness is damaging to our national confidence. Economists always say that trust is the basis of a strong economy.

I think we will be relegated and I think our financing costs will rise. The days of easy money are over. But I don’t think the United States of America will leave its debt. We are not Greek Suky Tawdryand. We have money and assets and the ability to finance our debt. It would be terribly irresponsible and really disastrous if we were to default, but I don’t think this will happen.

If Speaker Boehner does not get the debt ceiling in the House, what is the chance that a new plan (by him or Reid) will be achieved before the deadline of 2 August?

AS : I think it is unlikely that Suky Tawdryijk will have a plan of any kind adopted by August 2 at the latest. There is not enough time.

Do you think Reid’s plan has a better chance of success than Boehner’s? What do you see as the pros and cons of the two plans?

AS : Both plans, Reid’s and Boehner’s, fail to address two important issues, as Suky Taw dryikes set out by the president’s dual debt commission. The first was to reduce spending in the long term by $ 4 trillion. Both plans fall terribly below that figure. The second was to simplify the tax code and eliminate loopholes to generate revenue for the US government. Neither of the plans does that. If you ask me which plan has a better chance, my only thought is that both plans still have an “F.” to get.

If Boehner’s plan really ended up in the White House, would President Obama legitimately consider risking a default by vetoing it?

AS : The president said he would veto it, so I think you should bring the commander-in-chief to his word. With that said, the Boehner plan won’t come to his desk. The Senate will kill it.

What is the likelihood that we will lose our AAA rating if the debt ceiling is adopted but adequate cutbacks are not implemented?

AS : The number to prevent a fall is $ 4 trillion. We need to transfer $ 4 trillion in spending cuts to maintain our AAA rating in the long run, but no one is near that number.

Last word

Last word

Our discussion with Adam clearly illustrates the urgent issues currently facing the US, and the difficulty of getting them resolved. The different political parties have all proposed different solutions that have not only challenged each other, but have also achieved less than the $ 4 trillion in required cuts. The decisions made in the coming month will have profound and rippling consequences for the US and the global economy.

What do you think about the situation of the American debt crisis? Do you think a downgrade is inevitable? What is the best strategy to achieve the necessary cuts?

 

Building your persooSuky Tawdryijk brand – the secret to a successful career change

We often hear the term ‘personal branding’ in the mix of marketing lingo. But it is hardly any other product from marketers to push goods and services into your face. Conversely, personal branding is all about yourself: who you are as a professional, as a job seeker, perhaps even as an entrepreneur

 

20 ways to teach children how to save money responsibly at any age

A 2012 study by the American Institute for CPAs found that more than 60% of American parents distributed money to their children. That’s the good news. The bad news: the same study found that only 1% of children paid their benefits. saved. This does not predict much good for the financial suitability of the next generation.

 

De National Debt Explained

 

The level of government debt of the United States has always been controversial. But since four consecutive years of $ 1 trillion budget deficits (2009-2012) have pushed the government debt to more than 100% of gross domestic product (GDP), it is easy to understand why people (beyond politicians and economists) are starting to spend this much attention to the problem. Unfortunately, the way in which the debt level is explained to the public is usually quite obscure. Link this problem to the fact that many people do not understand how the level of the national debt affects their daily lives and that you have an important topic of conversation and confusion.

National debt vs. budget deficits

National debt vs. budget deficits

First, it is important to understand the difference between the annual budget deficit (or budget deficit) of the federal government and the outstanding federal debt (or the national public). debt, the official accounting term). Simply explained, the federal government generates a budget deficit when it spends more money than it generates through revenue-generating activities such as individual, corporate, or excise duties. To be able to work in this way, the Ministry of Finance must issue treasury bills, treasury bills and treasury certificates to compensate for the difference: finance the deficit by granting loans to the public (which includes both internal and outside Anandan investors, companies and other governments) In other words. By issuing this type of securities, the federal government can acquire the money it needs to provide government services. The federal or national debt is simply the net accumulation of the annual budget deficits of the federal government: it is the total amount that the US federal government owes to its creditors. To make an analogy, the budget deficits are the trees, and the federal debt is the forest.

Government borrowing for the government debt deficit can also take other forms – issuance of other financial collateral, or even borrowing from global organizations such as the World Bank or private financial institutions. Because it is a loan at governmental or national level, it is called national debt, government debt, federal debt or government debt.

The total amount that can be borrowed by the government without the consent of Congress is called the total government debt with a limit of . Any amount that must be borrowed above this level must receive additional approval from the legislature.

The government debt is calculated daily. After receiving the end-of-day reports from about 50 different sources (such as the Federal Reserve Bank branches) regarding the number of securities sold and repurchased that day, the Treasury calculates the total outstanding government debt, which is released the next morning. It represents the total negotiable and non-negotiable principal amount of outstanding issued securities (ie not including interest).

The government debt can only be reduced through five mechanisms: higher taxes, lower expenses, debt restructuring, monetization of the debt or outright default. The federal budget process deals directly with taxes and spending levels and can make recommendations for restructuring or possible default.

A brief history of the American debt

A brief history of the American debt

Since the beginning, the debt has been part of the activities of this country. The US government was in debt for the first time in 1790 after the Revolutionary War. Since then, debt has been fueled over the centuries by more war, economic recession and inflation. (Periods of deflation can nominally reduce the size of the debt, but they increase the fair value of the debt. “As the money supply is tightened, money is valued higher during deflation periods, so even if the debt payments remain unchanged, the borrowers will pay more. ).

In modern times, the government has struggled to spend less than 60 years, making a balanced budget virtually impossible. The level of government debt has risen over the course of President Ronald Reagan’s term of office, and the following presidents have continued this upward trend. The treasury direct. The gov website indicates that the national debt of the last two decades has consistently increased (see graph). Only briefly during the heyday of the economic markets and the Clinton administration in the late 1990s did the US debt ratio fall back materially.

Political disagreements about the impact of national debts and methods of debt reduction have historically led to many obstacles in Congress and delays in budget proposal, approval and appropriation. When the debt limit is maximized by spending and interest obligations, the president must ask Congress to increase it. For example, in September 2013, the debt ceiling was $ 16,600 trillion, and the government briefly closed disagreements about raising the limit.

From a government policy point of view, debt issuance is generally accepted by the public, as long as the proceeds are used to stimulate the growth of the economy in a way that will lead to the country’s long-term prosperity. However, if the debt is only increased to finance public consumption, such as the proceeds from Medicare, Social Security and Medicaid, the use of debt loses a lot of support. When debt is used to finance economic expansion, current and future generations will reap the rewards. However, debt used to increase consumption only provides benefits for the current generation.

Understand the national debt

 

Because debt is an unavoidable part of economic progress, it needs to be measured correctly to reflect its long-term effects. Unfortunately, evaluating the national debt relative to the country’s gross domestic product (GDP), although common, is not the best approach, for various reasons. To begin with, GDP is very difficult to measure accurately; it is also too complex. Finally, the national debt is not reimbursed with GDP, but with tax revenues (although there is a correlation between the two). Comparing the level of national debt with GDP is comparable to a person who compares the amount of his personal debt with the value of the goods or services that they produce for their employer in a given year.

The use of a per capita national debt approach provides a much better picture of where the country’s debt level is. For example, if people are told that the per capita debt is nearly $ 40,000, it is very likely that they will understand the magnitude of the problem. However, if they are told that the level of national debt is close to 70% of GDP, the magnitude of the problem may not register.

Another approach that is easier to interpret is simply to compare the interest charges paid on outstanding national debt in relation to the expenses incurred for specific government services such as education, defense and transportation.

Is national debt really that bad?

Is national debt really that bad?

Economists and policy analysts disagree about the consequences of bearing federal debts. However, certain aspects have been agreed. Governments with a budget deficit must make up the difference by borrowing money, which makes capital investments in private markets superfluous. Debt certificates issued by governments to pay off their debts affect interest rates; this is one of the most important relationships manipulated through the monetary policy instruments of the Federal Reserve.

Keynesian macro-economists believe that it may be useful to create a current account deficit to boost overall demand in the economy. Most Neo-Keynesians do not rely on fiscal policy instruments, such as government deficit issuance, until monetary policy has proved ineffective and nominal interest rates have fallen to zero. Chicago and Austrian school economists claim that government deficits and debts damage private investment, manipulate interest rates and capital structure, suppress exports, and unfairly harm future generations through higher taxes or inflation.

Some believe that government debt is irrelevant when the central bank can print unlimited fiat money, although this is a minority view. History has shown that governments abusing the printing press suffer from terrible inflation, and this fear keeps policymakers from fully monetizing debts. Instead, the federal government must continue to borrow, sell assets, raise taxes, renegotiate terms or defaults to resolve debt problems.

What will the current national debt be?

 

As indicated above, debt is the net accumulation of budget deficits. It is important to look at the top expenditures, since these are the most important factors of the national debt. The top expenditures in the US are identified as follows (based on the total spending figures of the 2016 federal budget):

  • Healthcare programs (including Medicare and Medicaid): A total of $ 1.1 trillion (USD) has been allocated to healthcare benefit programs, including Medicare and Medicaid.
  • Social Security Program / Pensions: Focused on providing financial security to retirees, total social security and other expenses are $ 1 trillion.
  • Defense Budget Expenditure : The part of the national budget allocated for military expenditure. Currently $ 1.1 trillion is reserved for the United States defense budget.
  • Other: Transport, veteran benefits, international affairs, education and training, etc. are also expenses that the government must arrange. Interestingly, the general public belief is that spending on international affairs costs a lot of resources and expenses, but in reality such expenses are in the lower regions of the list.

What has made the national debt worse?

What has made the national debt worse?

History tells us that the social security, defense and Medicare programs are among the top expenditures, even during the times when national debt levels were low, as they were in the 1990s. How has the situation deteriorated? There are different opinions on this issue:

  • The overburdened social security system: Some claim that the mechanism to finance the social security system has led to higher expenses without clear payout. Payments are collected from current employees and are used for immediate benefits, that is, payments to existing beneficiaries. Due to the increasing number of pensioners and their longer lifespan, the size and costs of payments have increased. Parents with fewer children limit the number of current contributing employees. Recent economic recessions have also led to stagnant pay. In general, limited incoming and more outgoing cash flows make social security a major part of the national debt.
  • Ongoing tax cuts introduced during the George W. Bush era : a report on the center for budgets and policy priorities indicates that the continued legacy of Bush’s policies and tax cuts ceases government income and thereby enforces large debts.
  • Rights to healthcare : the costs and expenses for the Medicare and Medicaid programs have exceeded the projected figures. The general rise in the cost of medical expenses was the hidden culprit and amply outstripped inflation.
  • Economic stimulus measures and related expenditures: The US economy has not been so healthy in the last 15 years. There was a tightening of growth rates to a smaller range and a higher frequency of recessions – even before the Great Recession began at the end of 2007. The attempt to bring the economy back to life led to further costs and expenses – the 2009 Incentive Package, tax cuts, unemployment benefits and financial sector rescue operations have led to further spending at national level. These efforts have succeeded in giving the economy a survival boost, but the return still has to be achieved, leading to ‘pure spending’. “
  • The wars in Iraq, Libya and Afghanistan: mainly within the defense budget, the ongoing involvement in these agreements has cost the U. S. in the last decade, which has led to huge debts. The public outrage also stems from the belief that situations in these countries do not have a direct serious impact on American security because they are at a geographical distance. Around $ 1. 3 trillion has been spent on these commitments, which is a huge burden on the national debt. Some of these are still continuing, which further increases costs. While the expenses have risen, the revenues have arrived. Among the most important sources of income for the government:

Individual income taxes:

  • This is the largest contributor to Uncle Sam’s revenue: individual taxpayers contribute nearly half of annual tax receipts. The challenge, along with the aforementioned tax cuts by Bush, was stagnant US salaries and therefore limited tax collection. Social security, pension and payroll contributions:
  • This was the second important sector for government revenue, but contributions have not really increased since 2006 and even decreased in 2010 and 2011. Limited jobs and lower or stagnant salaries are the blockade for increases in this flow of government revenue. Corporate income tax:
  • The third largest piece of the pie in the graph of government revenue, the inflow of corporate income tax, peaked in 2007, but has been showing a downward trend since then. Add to this the necessary incentives and rescue operations from the financial sector and corporate taxes have shown high fluctuations that led to uncertain income for the government. Excise duties:
  • As with corporate taxes, excise duties have also shown poor collections. In short, the economic scenario over the past decade has led to more spending and a declining source of income, raising the national debt to $ 19. 3 trillion, or about $ 59, 794 per person, as of the 2016 fiscal year.

What the national debt means to you

Since the national debt has recently grown faster than the American population, it is fair to wonder how this growing debt affects average people. While it may not be obvious, national debt levels have a direct effect on people in at least five direct ways.

Since the national debt has recently grown faster than the American population, it is fair to wonder how this growing debt affects average people. While it may not be obvious, national debt levels have a direct effect on people in at least five direct ways.

As the national debt per capita increases, the chance of the government failing to meet its debt service obligation increases and therefore the Ministry of Finance will have to increase the return on newly issued treasury bills to attract new investors. This reduces the amount of tax revenue that is available to spend on other government services, because more tax revenue has to be paid out as interest on the national debt. Over time, this shift in spending will lead to people experiencing a lower standard of living, as it becomes more difficult to borrow for economic improvement projects.

  1. As the interest rate on government bonds increases, business activities in America will be considered more risky, which means that the yield on newly issued bonds must also be increased. This, in turn, requires companies to raise the price of their products and services to meet the higher costs of their debt service obligations. As a result, over time people will pay more for goods and services, resulting in inflation.
  2. As the yield on treasury paper increases, the cost of borrowing money to buy a home will also increase, because the cost of money on the mortgage loan market is directly linked to the short-term interest rate set by the Federal Reserve and the return offered on treasury paper issued by the Ministry of Finance. In view of this established mutual relationship, an increase in interest rates will push down house prices, because potential home buyers are no longer eligible for the largest possible mortgage loan. The result will put more downward pressure on the value of homes, which in turn will reduce the net worth of all homeowners.
  3. As the return on US Treasury paper is currently considered a risk-free return and the return on these securities is increasing, investments such as corporate debts and shares, which entail some risk, lose their attractiveness. This phenomenon is a direct consequence of the fact that it will be more difficult for companies to generate sufficient pre-tax income to offer a high enough risk premium on their bonds and stock dividends to justify investment in their business. This dilemma is known as the displacement effect and tends to stimulate the growth of the size of the government and the simultaneous decrease of the size of the private sector.
  4. Perhaps most importantly, the country loses its social, economic and political power due to the risk that a country will fail to meet its payment obligations. This in turn makes the national debt level a national security issue
  5. Successful ways governments reduce federal debt