Metavante Will Showcase Its Lending Solutions for All Financial Services Organizations at the 2008 Financial Services Technology Forum

Aug 26, 2008 – Toronto, Canada – Metavante will showcase its integrated banking and payment solutions for financial service organizations at the 2008 Financial Services Technology Forum scheduled on October 28 & 29, 2008 at the Design Exchange in Toronto, Canada.

Metavante Lending Solutions provides technology and service solutions for mortgage, home equity, consumer and indirect retail finance loan origination. Lending solutions are offered for point-of-sale origination, processing, closing, automated underwriting, decisioning and business process management, as well as processing, settlement and document generation services. Metavante’s lending solutions are used to better market, sell, process and close loans through all distribution channels, including retail, wholesale, Internet and correspondent. Metavante Lending Solutions helps clients of all sizes, from community banks to the top financial institutions in North America, including five of the top 20 U.S. mortgage lenders.

The 2008 Financial Services Technology Forum focuses on new, cutting-edge enterprise applications and solutions that are sustainable, flexible, and increase profitability, presented via interactive expositions and engaging conference sessions presented to all corporate users, from service providers to small, medium and large businesses alike.

About WowGao Inc.

WowGao Inc. is an Event Management Company that organizes and manages internationally renowned conferences and expositions focusing on latest innovations and developments in Information Technology Industry since 2003. We have been honored with an award for our excellence. Our featured events are:

- 2008 Financial Services Technology Forum, October 28 & 29, 2008
- 2009 Government & Health Technologies Conference and Expo, April 28 & 29, 2009
- 2009 Wireless & Mobile Expo and Conference, June, 2009

- 2009 RFID Forum, June, 2009

For any media queries:

Director of Marketing,
416-292-0038 ext 812
attendee@wowgao.com

Technorati Tags: 2008, Financial, Forum, Lending, Metavante, Organizations', Services, Showcase, Solutions, Technology

Asset Based Lending- A Flexible and Cost Effective Way To Finance Your Business

Any kind of commercial venture needs funds to grow. An enterprise cannot survive just because it has a competitive product, a promising market or an excellent network of distribution. The foundation of all this is money.

Business owners and entrepreneurs must have sound knowledge of financing, how indispensable it is, and last but not the least, why one form of financing is considered better than another form. Even though, you are starting a very small business as an experiment, yet you need finance from an external source. Among the various options available in today’s commercial world, Asset Based Lending is considered as a wise option because it is flexible and cost effective.

What is Asset based lending?

Asset based lending is a kind of a specialized loan offered to businesses, who hold assets, as collaterals to the financing companies. This provides the borrowers with high financial leverage and marginal cash flows. As just mentioned, this type of lending uses assets such as receivables and inventory as collateral for the loan. In asset based lending, the quality of the collateral becomes preeminent in determining the creditworthiness of the customer. While traditional bank relies a lot on balance sheet ratios and cash flow projections as a loan criteria, asset based lending uses a client’s business assets as its primary factor for lending. As a result it usually gives a borrower far greater borrowing power than is possible through a traditional cash flow banking means.

Asset based lending is Ideal

In the contemporary competitive commercial arena, every venture needs more than one resource to survive and grow. In the absence of adequate resources, even the best performing companies may suffer either losses or face serious obstacles, in the way of its further expansion and growth. In such a scenario, asset based lending comes as a godsend grace, providing the much needed finance. It is not only cost competitive and effective, but also more versatile and flexible than most of the other lending.

Advantages of asset based lending

There are a number of advantages of assets based lending. The most important advantage is the less rate of interest as compared to an unsecured loan. What accounts for the lower interest rate is the fact that in the asset based lending; the lender’s money is always safe, even in a case of a default by a borrower. The lender can always recover his money by confiscating the securities and assets of the borrower.

Asset based lending is suitable for any kind of financial expansion or growth in businesses. One can also resort to asset based lending for management of buy-ins and buy-outs, business takeovers and mergers, refinancing existing business loans as well as turnaround financing. Asset based lending is determined by the value of inventory, accounts receivables, fixed assets. The borrower gets revolving credit and term loan against the security of the assets. Usually term loan up to 40 % of the total value of assets can be sanctioned. The term loan may end between 5 and 15 years, depending on the life of the assets. Asset based lending focuses on collateral and liquidity followed by cash flow and leverage. It provides the borrower with more liquidity at the same time requiring less formal financial agreements.

Technorati Tags: Asset, Based, Business, Cost, Effective, Finance, Flexible, Lending

Subprime Mortgage Lending – Expanded Guidance

In June 2007 the federal financial regulatory agencies together issued a Statement on Subprime Mortgage Lending.  This statement contained references to an earlier document issued by the Comptroller Office’s for Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision.  The latter document, the 2001 Expanded Guidance for Subprime Lending, is recommended unequivocally by the agencies as the defining document to which lenders should turn to find the criteria for considering a borrower “subprime”.

Even in the late 1990s, subprime lending was becoming more and more of a problem. The 2001 Expanded Guidance was an expansion of earlier statements about this issue. The agencies’ focus was the responsible use of subprime lending to assist subprime consumers to win back their credit ratings. Regaining lost credit would enable these people to enhance their financial situations.  At the same time, the agencies stressed that lenders who assume a greater risk by lending to subprime individuals must also show evidence of ability to maintain their duty of upholding the public’s trust in financial matters.  It is the lender’s responsibility to assess most carefully whether or not the borrower is likely to be able to repay the debt incurred.  Painstaking effort is required to create strict rules of underwriting to assist in such assessment. Only when controls like this exist will both borrower and lender enjoy minimized risk of loss.

This Expanded Guidance clearly defined for the first time the criteria used to decide whether a potential borrower will be classified as “prime” or “subprime.”  It states that at least one of these issues will characterize a borrower as subprime when the person applies for a loan:

·  Low credit score

·  Bad credit history, including

·  collection accounts

·  repossessions

·  late payments of invoices

·  bankruptcy

·  debts that have been written off as uncollectable, called “charge-offs”

·  high ratio of debt to income

·  decreased ability to pay off the loan.

Further, the document describes these attributes of the subprime borrower:

·  has a Fair Isaac Corporation (FICO) credit score of less than 660;

·  has collection activity, liens, charge-offs, or judgments within the past two years;

·  within the past year, has had two late payments;

·  within the past two years, has made a payment that was more than 60 days late;

·  has a ratio of debt to income of at least 50%;

·  has declared bankruptcy in the past five years;

·  has been assigned a score by another credit rating service that would equate to a FICO score of 660.

All lenders use these standards to identify subprime borrowers.  Bear in mind that even if you have a FICO score that is better than 660, you will still be considered a subprime borrower if you possess a single one of the attributes listed above.

Expanded Guidance offers a clear definition of lending practices to be considered “predatory.” The agencies in no way insinuate that predatory lending practices characterize all subprime lenders. In fact, it is their belief that benefits for both the borrower and the lender come from using subprime loans that are administered properly.  Nonetheless, the public should be made aware that predatory lending practices do exist, and that borrowing at subprime may leave them vulnerable to such practices.  In predatory lending, the exchange between borrower and lender is very unequal: the lender gets the borrower’s money and the borrower gets not much of anything!

Most  predatory lending practices fall into three categories.

·  Many car loans and housing mortgages are made based on assets pledged by the borrower as collateral, rather than on the borrower’s actual ability to fulfill the debt.

·  “Loan flipping” occurs when a lender coerces or talks a borrower into refinancing a mortgage, at no advantage to the homeowner, but at great advantage to the lender, who may collect sizeable fees for the transaction.

·  Failing to reveal to the borrower all the hidden fees and costs of a loan, and concealing information or providing fraudulent information to the borrower.

·  Very often, these practices are perpetrated on vulnerable borrowers, like the elderly, minority homeowners, or low-income families. In many cases, these people would actually have qualified for a mortgage at prime rates; but they are at a disadvantage because of their lack of knowledge.

If you are thinking of borrowing at subprime for a mortgage, you should familiarize yourself with the 2001 Expanded Guidance for Subprime Lending.  It is available on the Internet, and is definitely worthwhile reading. It laid a fine foundation for further definition of the responsibilities of subprime lenders and the needs and rights of subprime borrowers.

Technorati Tags: Expanded, Guidance, Lending, Mortgage, Subprime

Subprime Mortgage Lending – What are Its Effects?

ubprime lending is really nothing new. It was originally designed to enable people with less-than-sterling FICO scores to purchase homes, cars, and other items for which they couldn’t get conventional loans. Also known as “second chance” lending, its purpose was to provide responsible individuals with a second chance to become homeowners. In the mid-1990s, with real estate values continuing to climb, subprime lending became very popular. Unfortunately, many of the people who got involved with subprime lending were not really responsible, or did not fully understand what they were getting into. Some of them interpreted subprime lending as a means of buying a house without a down payment; others saw it as a means for entering a real estate market that was changing very rapidly. Subprime lending was never intended for these purposes.

You can see the effects of misuse of subprime lending in real estate markets all over the United States. For example, people who have bought homes during the last few years using subprime lending usually have not been able to provide a down payment of 20% on their purchase. Private mortgage insurance (PMI) is required in such cases. Private mortgage insurance is available at additional cost to the buyer, above and beyond the required homeowners insurance. With PMI, the lender has a guarantee that if the buyer defaults on the loan, the mortgage amount will be repaid to the lender. The cost of PMI is now deductible from the buyer’s income tax!

Defaults on subprime loans are becoming more and more common. One reason for this increase in defaults is that, lulled by the ready availability of subprime lending, many people have purchased homes they really cannot afford. Some of these are carrying adjustable rate mortgages (ARMs), which are readjusted every couple of years – always upward. In past years, someone who was interested in an ARM needed to qualify not only for the initial rate, but also for two subsequent upward rate adjustments. In recent years, this has not been true. These ARMs have been offered at extremely low introductory “teaser rates,” and those who qualified for the introductory rates were not required to qualify for subsequently adjusted rates. Rates have gone up by several percentage points. Mortgage rates for many people have nearly doubled. In combination with the record high cost of gas and oil, along with steadily rising prices for food and commuting by public transportation, this means that large numbers of families are unable to continue to pay on their subprime mortgages.

Another effect of easily-available subprime loans is that many people who knew nothing about real estate or property management decided to buy real estate. One reason real estate prices were driven to levels that were both unrealistic and unsustainable is that “flipping” properties had become common. This means that people were purchasing real estate, “fixing it up” a bit, and then reselling it for a very good profit. In time, these artificially high “bubbles” burst. Prices fell suddenly and dramatically, and these inexperienced individuals found themselves with property they had bought with the intention of reselling quickly — and with no buyers. The value of many of those properties is less than the amount owed on them. Foreclosures are rampant. Foreclosure sales in a particular neighborhood reduce property values in that neighborhood still more. This kind of cycle is not easy to break.

Subprime lending, then, can be an excellent way to provide a second chance to restore credit and to purchase a home. On the other hand, its effects can be very dangerous if they encourage inexperienced individuals to jump into a rapidly-changing real estate market. Be sure you understand the expected effects before you take any action involving subprime lending!

Technorati Tags: Effects, Lending, Mortgage, Subprime

Good Lending Practices (As Compared to Predatory Lending)

This is one of several videos created for Idaho Legal Aid Services to help bring awareness to predatory lending. This video demonstrates what a lending experience should look like. To learn more about predatory lending or your fair housing right, visit our website at www.idaholegalaid.org

Technorati Tags: Compared, Good, Lending, Practices, Predatory

Making a Profit on Investment From Social Lending Sites

The worldwide lending industry is a multi-billion dollar industry where people borrow from banks, financial institutions and other private lenders. In the last couple of years, the lending industry has gone through an evolution and has given way to social lending as the new and promising mode of lending. Also known as peer- to- peer lending or person to person (P2P) lending, one of the first companies to set the base for social lending are Zopa, Prosper and more recently LendingClub.

Zopa is considered the first social lending marketplace in the world and its roots are in the United Kingdom. With the launch and immediate success of Zopa, other similar peer to peer lenders have sprung up like Prosper in the US, Boober in Netherlands and Smava in Germany.

If you are wondering whether the P2P loans offered at the social lending sites are worth it or not then the answer is most likely yes. There is not much of a difference as far as the P2P loans from these lending hubs and from a bank is concerned. The difference lies in the fact that there are no banks, no long procedures, and no middleman and above all the entire process is transparent for both the lenders and borrowers (no more hidden hard to find loan agreements!).

The main objective of the social lending hubs is to offer an online loan with the best interest rates and to make customers feel like they are borrowing from a friend or community. This peer to peer borrowing is increasingly being seen in a new light and is being considered as a part of community borrowing (which was more traditionally offered by small local community banks).

Other benefits:

1.class, which they can add to their portfolio because it doesn’t fall under an investment or even a savings account.

2.Choosing interest rates and loan repayment: There are several benefits for lenders as well as borrowers. In social lending hubs like Zopa or Prosper, lenders have the freedom and the flexibility to choose a loan repayment time period as well as the interest rate on the p2p loan.

3.Active community participation: one of the salient points is that this kind of a lending hub make borrowers feel as if they are following from an actual person and not an organization or a faceless institution. Hence it helps in developing a strong community feeling.

Lenders at any of the social lending websites have the power to set a minimum interest rate that they want to earn and can bid in an increment of $50 till $25,000 through loan listings. Borrowers can create a loan listing for a period of 3-years, and borrow an amortized and unsecured loan of up to $25,000 and also provide the maximum interest rate that they will be able to pay a lender.

The success of Zopa lies in its facts and figures. They are the largest lender today and have loaned out in excess of $930,000. The return on investment for lenders has been around 5.01%, which is healthy especially in the wake of the fact that social lending is still in its nascent stages. One of the top lenders even got an ROI of 19.8% on social lending websites.

The Lenders

By now you are probably thinking who these lenders really are? Are they banks in disguise or are they really other people? The truth is that they are really people. Let’s take Zopa and Prosper for example. Both the social lending hubs are backed by Benchmark Capital who also funded eBay. Zopa or Prosper are the best alternatives that anyone can have to banks or other financial lending institutions, however they are restricted to the UK and US markets.

The current business model of Zopa is based on a 1% exchange fee that borrowers are paying them upfront. In return, Zopa is offering borrowers a better interest rate by cutting out the bank middleman. More than that, a borrower will have more control of the entire lending process and has the flexibility to establish an interest rate.

Zopa is the acronym for Zone of Possible Agreement, and its lenders include only U.K. residents who are over 18 years of age. To qualify as a lender, a person needs to have a valid bank account and a high personal Equifax credit rating. There are two restrictions for becoming a lender and they are:

•Lenders have to be individuals and not businesses.

•Lenders will not be allowed to have anything in excess of £25,000 ($47,000) in outstanding loans at a given point in time.

The American counterpart of Zopa is Prosper and they also handle maximum loan of $25,000 at a time. At this point the future of social lending looks bright as it has now hit New Zealand and Australia with the first peer to peer lending hub in Australia to launch shortly being Lending Hub (you can see their site at lendinghub.com.au and their active blog at blog.lendinghub.com.au) which will offer P2P loans with a strong community focus to ensure a truly social experience for both borrowers and lenders rather than just being a transactional online loan tool.

Technorati Tags: From, Investment, Lending, Making, Profit, Sites, Social