Finance Globe

What is Escrow?Escrows are used in other circumstances, but the most widely known types of escrows are mortgage-related. The escrow account is managed by the mortgage lender. The lender collects escrow payments from the borrower, and keeps the money in an escrow account until the tax or insurance payments are due. The lender takes care of paying those bills, and the borrower usually doesn't have to do anything else. When you hear about principal, interest, taxes,...

Electronic payments are safer than cash.Credit and debit cards are such a convenient way to pay that many consumers use a card for nearly every purchase. And not only are cards convenient, but they're safer than carrying around lots of cash. A cautious person whose paying at the register, with a wallet full of cash, instinctively looks around to make sure nobody has noticed how much money they're carrying. You never see that from a person...

Consumers and businesses suffer from identity theftIdentity theft is a major threat for consumers. Often, a consumer doesn't even realize their identity has been stolen until they've been denied credit and then find the delinquent accounts on their credit report. Then, the consumer may have to write letters, make phone calls, and file police reports to clear up the defaulted accounts that were opened or stolen by the thief. Sometimes it is difficult to prove that...

Creditors and financial institutions are required to develop and implement an Identity Theft Prevention Program by November 1, 2008. The Federal Trade Commission (FTC) has issued a list of 26 red flags to help give businesses a starting point in developing their program; this is not meant to be an all-inclusive checklist, but rather as a guideline to aid establishments in developing their program to suit the type, size, and complexity of their business. A fraud...

Unfinished business in the wake of the housing bust My neighborhood is still under construction. The back of the subdivision has unfinished gravel roads, and some of them are still dirt. Empty, weed-grown lots abound, scattered with a few finished houses on a few paved roads. "Lot available" signs dot the land on what used to be acres and acres of cornfields. There were supposed to be three phases of construction, but this third phase has...

Credit cards issuers have reacted to the credit crunch by slashing credit limits.As credit cards issuers position themselves to prevent further long-term losses originating from the sub-prime mortgage mess, card holders should prepare for the possibility of some unwelcome changes in their credit cards.Card issuers are tightening their lending standards, even with consumers who have responsibly managed their debts in the past. Your FICO score and whether you have the income to support your debts have...

President Bush signed the housing rescue bill into law on Wednesday.The new laws have two main objectives; to help struggling homeowners refinance into affordable loans guaranteed by the Federal Housing Authority (FHA), and to give additional funding to Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that buy or back about half of all U.S. mortgages. These actions are hoped to bring stability back to the housing market and give a boost to our...

Living from paycheck to paycheck? Using your credit cards to pay your monthly expenses? Wondering how you'll ever get on top of your debt when the credit card balances seem to grow little by little each month? You're not the only one. Though it may be possible to play the game for some time, it's important to take back control of your finances now, before the problem grows any bigger. Small steps will get you back...

What is a credit protection plan?A credit protection plan - also known as credit insurance - is an optional add-on with many types of loans, meant to protect your credit in the case that you are not able to pay your bills due to death, disability, or unemployment. Auto loans, mortgages, personal loans and credit cards may offer a credit protection plan to consumers. It is illegal to require you to buy credit insurance to gain...

The credit crunchThe U.S. mortgage meltdown of 2007 started the whole process of a global credit crunch. Extreme bank losses, due to record numbers of defaults and foreclosures, put some lenders out of business, and caused many secondary mortgage markets to dry up.And, to limit losses, the financial institutions that survived the meltdown have tightened the grip on their cash, becoming more cautious in granting any type of credit, whether credit card, home mortgage, or auto...