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And still, there is no eviction crisis plan | Editorial Columns

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She was an incredibly successful realtor, a member of the Million Dollar Sales Club for more years than she would appreciate me calling out. In the twilight of a stellar career in residential brokerage, our friend was starting to shrink her own real estate portfolio as she considered retirement, downsizing and potentially a life at her beach house — one of three properties she owned and rented out, in addition to her very elegant and well-appointed home. Our friend sold her own home during the hot seller’s market, receiving an offer well above the asking price, during the spring of 2020.

Soon after, during the beginnings of a declared national emergency, the CDC put in place a moratorium against evictions and foreclosures, if nonpayment of rent or mortgage was due to job loss or reduced income caused by the pandemic.

Months passed and no rent checks came from the beach house, the townhome or the third residence our experienced realtor owned. Meanwhile, all of her expenses on those properties continued — mortgage payments, insurance, property taxes and maintenance costs. She soon found that none of the tenants were putting much effort into finding or replacing that lost income and at least in one case, a sub-tenant may have actually moved into her property paying rent to her non-paying tenant.

The U.S. Supreme Court recently struck down the CDC’s latest attempt to extend the moratorium until October of this year. DeKalb County, Georgia, and several other states have also put in place their own eviction moratorium extensions lasting until the end of the year. A moratorium on evictions or foreclosures by the way is not a solution, it is simply a stall. Unless the tenant or mortgage holder pays up in full, their credit will be significantly damaged and relocating to another rental property, or buying that next home will be particularly problematic. And yet, not only are we likely to see a record number of evictions and potentially foreclosures, but those simultaneous downward credit strikes will make it nearly impossible to secure housing in the tightest area of most every market — entry-level and affordable housing. And still, at the federal, state and local levels, there is no plan.

In Texas, the state decided to cut through the clutter, complicated forms and asks for details and documentation that many lower-income tenants simply could not produce, by making payments directly to the landlords and lenders, with sign-off/certification by the tenant or mortgage holder on the amount in delinquency and arrears. Landlords typically have bookkeeping or accounting staff, and are much more accustomed to credit applications and government forms, as are lenders.

Current CARES Act and related housing aid funding ($46.6 billion), will start reverting, if unspent, back to the federal government in late September. President Biden and the U.S. House would do well to strongly examine the Texas model, if the objective remains keeping folks housed. Though overseen by the U.S. Department of the Treasury, instead of the U.S. Department of Housing and Urban Development (HUD), the current failing efforts rely on a patchwork of more than 450 state, county, municipal and charitable organizations, lacking uniformity or simplicity, to hand out the rent/mortgage relief funding.

HUD could fund or partner with local housing authorities and nonprofits on a number of pilot initiatives to absorb thousands of those about to re-enter the entry level market, with bad credit and limited budgets. Tiny houses, converted rail cars, 3D printed homes, trailers and alternative dwelling units (ADUs) — better known as garage and basement apartments or converted she sheds — could all quickly come into play here.

And as the pandemic does continue, the same CDC and state governments with extended emergency powers could also suspend for a period of months, local area building codes, which often limit things like boarding houses or shared housing, sub-tenant rentals and even building smaller dwellings as most communities now prohibit the construction and code approval of any residence of less than 1,000 square feet.

If our realtor friend only could plunk her head down right now in a tiny house that she owned, while still paying for the three others which she cannot access, and until very recently could not remove her non-paying tenants. Purchasing a truck during this same pandemic, I had promised myself I would find a way to decline from helping too many folks ‘move,’ but the offer has already been made to our dear friend, to be able to assist her deadbeat tenants in moving out.

Bill Crane is a senior communications strategist who began his career in broadcasting and has worked at the state capitol and in Washington in both political parties. Contact him at bill.csicrane@gmail.com.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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