Changes to Google Privacy Policy and Terms of Service

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Dear Google user, We're getting rid of over 60 different privacy policies across Google and replacing them with one that's a lot shorter and easier to read. Our new policy covers multiple products and features, reflecting our desire to create one beautifully simple and intuitive experience across Google. We believe this stuff matters, so please take a few minutes to read our updated Privacy Policy and Terms of Service at http://www.google.com/policies. These changes will take effect on March 1, 2012.
One policy, one Google experience
Easy to work across Google Our new policy reflects a single product experience that does what you need, when you want it to. Whether you're reading an email that reminds you to schedule a family get-together or finding a favorite video that you want to share, we want to ensure you can move across Gmail, Calendar, Search, YouTube, or whatever your life calls for with ease.		Tailored for you If you're signed into Google, we can do things like suggest search queries – or tailor your search results – based on the interests you've expressed in Google+, Gmail, and YouTube. We'll better understand which version of Pink or Jaguar you're searching for and get you those results faster.		Easy to share and collaborate When you post or create a document online, you often want others to see and contribute. By remembering the contact information of the people you want to share with, we make it easy for you to share in any Google product or service with minimal clicks and errors.
Protecting your privacy hasn't changed Our goal is to provide you with as much transparency and choice as possible, through products like Google Dashboard and Ads Preferences Manager, alongside other tools. Our privacy principles remain unchanged. And we'll never sell your personal information or share it without your permission (other than rare circumstances like valid legal requests).		Got questions? We've got answers. Visit our FAQ at http://www.google.com/policies/faq to read more about the changes. (We figured our users might have a question or twenty-two.)
Notice of Change March 1, 2012 is when the new Privacy Policy and Terms will come into effect. If you choose to keep using Google once the change occurs, you will be doing so under the new Privacy Policy and Terms of Service. Please do not reply to this email. Mail sent to this address cannot be answered. Also, never enter your Google Account password after following a link in an email or chat to an untrusted site. Instead, go directly to the site, such as mail.google.com or www.google.com/accounts. Google will never email you to ask for your password or other sensitive information.

Peer to Peer Lending: Discretionary Investing

Peer to peer lending is often considered riskier than other forms of investment. Looking at peer to peer lending sites like Lending Club, they state the risk of investment is at your own risk and if you are not able to loss your money don't invest. This is stated on their prospectus with the SEC and this represents the worse case scenario for investors. This admission is often enough to scare the majority of people away. So why is peer to peer lending so risky and if it so risky why are people still lending?

The overall risk is based in the nature of the loan issued. It is unsecured. Meaning, it has no real collateral backing the loan as in an auto loan or mortgage. There is only a promise to pay the loan by the borrower. This is not the only type unsecured loan today. Every credit card and store credit is an unsecured loan. These loans or lines of credit carry a high rate of interest due to the fact they are unsecured. The same is in true of peer to peer lending.

How is peer to peer lending different than a credit card? There time period to pay off the loan or maturity. Loans are usually over a three year period. The borrower pays installments and not minimums. The goal is to completely pay off the loan by the term.

So how risky are the loans? They often carry the same risk that credit cards and other types of unsecured debt. The risk is always present of non payment or late payment, but many steps are taken by lending institutions to reduce this risk.

First, the qualifications for borrowers are clearly stated and include a credit check. The institution reviews the credit history, utilization, credit score and several other factors as well as employment to assign the borrower's loan a grade. If a person does not meet loan standards they are rejected. These are often posted for investors to review. This provides reassurance that the institution is doing its job. Second, the pertinent information from the background and credit check is posted with the loan request. Lenders are allowed to review this information and make their own decision as to whether to invest or not. Third, lenders are not required to invest in just one loan. Lenders can take their capital and spread it out among several loans. This has the effect of diversification and helps to further reduce risk to the lender.

So why are people investing in peer to peer loans? The returns are high. A site like lending club list a return in the range of 6% to 19% depending on the loan funded. This is an extremely high rate of return and is far better than other investments. Secondly, the default rate is low. Lending club is currently listing defaults of 120 plus around 2%.

The risk is always present, but the right steps need to be taken to avoid them. Find a reputable site for peer to peer lending. They make sure the proper background checks are performed and reject the borrowers that are too high of a risk. A lender should diversify their holdings of loans to further reduce their exposure to risk. For most lenders, the returns out weigh the risk and make it a feasible investment.

Peer to Peer Lending: an Emerging Industry

For individuals seeking a loan for the reasons of debt consolidation, auto loan, student loan, small business loan or any other personal loan, there is a new option of funding through peer to peer lending. This option is relativity new and has become a completely separate industry. It is growing at a fast pace and for many people find it services a need not easy filled by other options.

The idea is based in person to person lending and is much like lending family members or a friend money. The bank involved acts to connect individuals who want to engage in lending or borrowing. For the borrowers, the bank helps find lenders. For the lenders, it does all the due diligence on borrowers such as a credit check and handles collection of payment. The credit checks have the purpose to reduce risk to the individual lenders and assign a max amount the borrower can get and sometimes the interest rate on a loan.

Why do borrowers love peer to peer lending? There are several benefits. The first reason why, it is most commonly used is debt consolidation. It often gets a lower rate than other forms of consolidation and at the term of the loan the debt is completely paid off. The second reason is it is easy to seek funding. If trying to start a business, a business loan is very difficult to get from your local bank and if denied the person has to go bank to bank. With peer to peer loans, lenders often find you. There is a bit of selling your loan in the market place, but it is available for funding to thousands of potential lenders. Third, the interest rate is often lower than other forms of personal loans. Peer to peer loans reported by Lending Club, a peer to peer lending site, have an interest rate starting at 6%. This depends on your credit standing. In comparison, a credit card is usually around 10% to 20% interest and can go as high as 30%. Furthermore, the rate is set and not subject to change like a credit card.

Why do lenders love peer to peer lending? The biggest reason is return. The rate of return, reported by Lending Club, ranges from 6% to 19%. This is extremely high rate of return in any investment. The second reason is actions taken to reduce default by peer to peer websites like Lending Club such as the initial credit screening. They list the default rate at just above 2%. This is low considering these loans are unsecure, meaning there is no collateral backing the loan. To further curb the risk, lenders are not allowed to fund just one loan with their capital. They must spread it out among several loans as to diversify their risk.

There are several other reasons and many could be personal to the individual lender or borrower as to why people love peer to peer lending. Its history is relatively short and for the most part unknown. The trend of growth in peer to peer lending will not slow for sometime as more people discover this alternative method of investment and credit.

Subprime Mortgage Lending - What’s Wrong With It?

or the past couple of years, it seems that every time you open a newspaper or turn on the television, you come up against the subject of subprime lending. Everyone seems to have something negative to say about it. You'd think it was the root of all evil!

It's true that subprime lending has many things about it that are not especially positive. For example, for whom was subprime lending designed? For the subprime, not-quite-good-enough borrower, of course. Often, the person who finds it necessary to borrow at subprime is the person whose credit rating is a bit tarnished, and therefore someone who is considered more likely to default on the loan. Subprime lenders generally specialize in this area. They tend to charge more, both in fees and in interest rates, to make up for the increase in risk of default.

How did we allow this to happen? It has a lot to do with greed. Borrowers were greedy, and wanted a way to buy houses they really could not afford. Subprime lenders and mortgage brokers were greedy, and offered mortgages to people they knew shouldn't be borrowing money at all. Add easy-to-access money and low interest rates into the mix, and it's a disaster waiting to happen.

Once upon a time, not so long ago, you could borrow on the equity in your home – an amount equivalent to 125% of its value. While interest rates were low, many people began refinancing their homes, or taking out lines of credit and loans on their home equity. At the same time, American real estate markets were growing faster than ever before. These individuals figured it would be easy to sell their homes, or refinance again, if they wanted to. Such extravagant growth led to a sudden, but inevitable, decline in the housing market.

At this point, these people are in a real bind. They are unable to sell their houses: the value is nowhere near the amount of the mortgages they hold. They are in a position of negative equity: that is, the mortgage is more than the value of the house, and their savings are insufficient to fill the gap. They may have an adjustable rate mortgage (ARM) that escalates regularly. That's a whole lot of trouble for a whole lot of people! Foreclosures on homes are at a record high. These foreclosures will make the situation even worse, as houses are sold at auction for a fraction of their full market value.

There are several other kinds of subprime loans out there that may look tempting to a borrower who has no money for a deposit. An 80/20 mortgage is one of these. This one is the epitome of greed; no borrower with an ounce of financial responsibility should even consider these loans. Eighty per cent of the asking price is borrowed through a conventional fixed-rate mortgage or an adjustable rate mortgage. Then you borrow the remaining 20% of the price as a loan on your home equity. The rate of the latter mortgage will be higher. The lender can decide to readjust some of these mortgages on a whim. Negative amortization mortgages and interest-only mortgages are also motivated by greed. Both types benefit only the lender, not the borrower; as time goes by, the loan just gets bigger. Although monthly payments are not too large during the five-year or ten-year term of the loan, none of the principal has been repaid, and there is an enormous "balloon payment" awaiting the borrower when the term ends.

These are a few of the things that are wrong with subprime lending. Keep an eye out for mortgage plans that actually are of greatest benefit to the lender!

Subprime Mortgage Lending - 2007 Statement

The United States Treasury Department, along with several other federal financial regulatory agencies, released a Statement on Subprime Mortgage Lending in June 2007. This sizeable document (it is 31 pages long) is aimed at people involved in borrowing and lending for mortgages at subprime rates. Of particular concern to the authors are adjustable rate mortgages (ARMs). The Statement provides guidelines that will ensure more appropriate practices regarding ARMs. The agencies are concerned that lenders persuade borrowers to take out ARM loans by giving them an extremely low rate of interest (called a "teaser rate") for the first few months. Unfortunately, this rate adjusts upward very soon to a formula based on and exceeding the prime rate. Now the loan is no longer within the means of the person who is classified as a subprime borrower, and it will cause extreme financial hardship. Other issues covered by the Statement are below.

Adequate documentation of income for subprime borrowers is not always required by lenders. This practice is of concern to the agencies because it leads to so-called "liar loans." A borrower can put whatever inflated number he chooses on the application form, knowing there will be no effort to verify that this is truly the amount of his income. These loans greatly increase the chance that the borrower will default, which is a problem for the lender as well.

The agencies also address the problem of the introductory rate period. Most ARM loans include significant penalties for early prepayment, and the penalties extend well past the initial period. In addition, borrowers are not always given full information about additional monthly payments that will be required, such as taxes and homeowners insurance. This failure to disclose such information leaves the borrower at an enormous disadvantage, and will no longer be permitted.

It is interesting and unusual that, three months before releasing the Statement on Subprime Mortgage Lending, the agencies involved in creating it requested comment from the public, from members of Congress, and from financial institutions that engaged in mortgage lending. From the industry came the comment, over and over, that they are opposed to disclosing to borrowers all the details of ARM fees and rates. They think that would result in "overloading the consumer with information"! This is of great concern to the agencies, and to the author of this article as well. We don't think the average consumer requires the protection of subprime lending agencies from information overload. Consumers can handle information just fine! Failure to disclose costs and fees for which the borrower will be responsible is nothing short of deception.

Virtually all comments reflected uneasiness that there was no adequate definition of the term "subprime" within the Statement. When the final revision appeared in June, readers were requested to refer back to the definition of a subprime borrower contained in the earlier guidelines document Expanded Guidance for Subprime Lending (2001). All the pertinent characteristic are listed there, and can be used in determining whether a particular borrower should be classified as subprime.

The Statement also requires that every borrower be given a full repayment schedule, including information on amortization, and an estimate of the amount of insurance and taxes that will be applicable. This must be done whether or not the extra costs are escrowed and are included in the loan. The extra charges must be part of a mandatory and accurate calculation of the borrower's debt ratio.

The Statement on Subprime Mortgage Lending is a valuable effort to remedy some of the ailments of the current housing market, and insure that subprime borrowers as well as subprime lenders are not left with a financial disaster on their hands because of imperfect communication between them.

Subprime Mortgage Lending - Pieces of the Puzzle

The current housing market is disastrous. More than that, it is also something of a puzzle. There are several elements that have worked together here. If you understand each of these elements, you'll see how they fit together, and how the puzzle has grown. We should hardly be surprised that subprime mortgages are being foreclosed at a great rate. How in the world did we let ourselves get into this situation? Read this article, and then you decide.

The "prime" rate is the rate charged by all banks in the country. The prime rate doesn't change regularly or often, only when 75% of the country's top 30 banks decide they need to change it. People who have a decent credit rating are usually given mortgage and other loans at prime rate.

Subprime borrowers are people who probably have pretty poor credit ratings. They may have a history of bad financial management, perhaps including collection accounts, repossessions, maybe even a bankruptcy. At any rate, they are perceived to be more likely than the average borrower to default on this loan. A subprime lender exists to lend money to borrowers who are not expected to act responsibly in the repayment of the debt. The interest rate that a subprime lender charges will be higher than usual because of that increased risk of default. Subprime lenders know about the risk; they fully understand that these borrowers cannot really be counted on to repay their debt. Why should they be surprised when it turns out exactly the way they expect it to?

Lending takes place when one business or individual lets out money to another business or individual, for a defined period of time, and at a specified rate of interest. When you're talking about a mortgage, it might be – for example – a fixed-rate loan for 30 years, at 5.7% interest. (The annual percentage rate is referred to as the APR.) This is a common type of mortgage: the borrower agrees to pay the lender back over a period of 30 years, at a yearly 5.7% interest rate.

So there are three elements of the puzzle: borrowing, subprime, and lending. What else has contributed to the current situation? Lending practices of dubious quality joined with a huge number of subprime borrowers whose ability to repay their loans was questionable. Yes, we are definitely in a mortgage crisis; foreclosures have never been higher. Whose fault is that?

When a homeowner falls behind in monthly payments on a mortgage, the bank takes notice. If payments are not made for three months, generally the process of foreclosure is initiated. This is a lengthy and costly process that often spans many months. The home is foreclosed and the property is repossessed by the bank.

Actually, the bank would prefer the borrower to repay the debt rather than have to take the property. A bank is not a real estate company. There is also the risk of censure from the federal government if too many of their loans are defaulted upon. For these reasons, foreclosures can take a very long time. The bank is in no hurry.

The majority of subprime mortgages are nowhere near as easy to understand as the example we gave above. Lenders have gotten more and more creative in the last few years, in an effort to attract more subprime borrowers. Many of these borrowers are now carrying an adjustable rate mortgage (ARM). The initial low interest rate of these loans allowed lots of people to get involved in a loan for which they might not have qualified otherwise. When the loan resets in about two years, the interest rate usually goes up considerably. In addition, some of these loans have prohibited refinancing in the first several years.

Borrowers, subprime mortgages, lending, and foreclosure have all worked together to give us this picture. Contributing in addition were falling house prices, rising mortgage payments, changing real estate markets across the country, difficulty of finding accessible mortgages, and a glut of houses for sale on a market where few people are buying. Here's the completed puzzle: the mortgage mess.

Subprime Lending: Trojan Horse Of The Home Loan Lending Industry

Home loan lending used to be relatively simple. Lenders were so hungry for business they readily accepted no-down mortgages, interest-only loans, and E-Z refinancing for borrowers with bruised credit. Recently, however, a wave of bad loans wiped out small independent mortgage brokers, devastated bad-credit lenders, and prompted the industry itself to tighten lending practices.

Today, it has become harder than ever for cash-strapped would-be homeowners to obtain home loan lending.

Who Is To Blame?
Experts blame subprime lenders for the recent home loan lending debacle. In the past, people with poor credit scores or large debts and modest incomes would not have been granted a loan. In recent years, however, a new breed of mortgage brokers - called subprime lenders - burst onto the market. Instead of denying loans to people with poor credit history, they let these people take out mortgages and then charge them higher interest rates to offset the high risks associated with the loans.

Such action on the subprime home loan lending front enabled a huge part of the population to own houses. Subprime home loan lending morphed dramatically from a start-up business into a $600-billion-a-year enterprise. The problem with high risks, however, is that they either pay off magnificently or go bust, and this is just what happened. The subprime market fell, and it was not long before homeowners who financed their purchase with subprime loans found themselves with foreclosure notices in their hands.

Stringent Loan Standards
When applying for home loan lending, expect more than run-of-the-mill scrutiny. The industry is cracking down on the so-called "liar loans." These are mortgages obtained without verification of the buyer's declared income, under a "stated income loan" or "no documentation loan."

Additionally, the home loan lending industry has become more conservative in attaching value to houses. Before, bankers generously appraised homes for so much more than they're worth. Today, the appraisal is based not on the recent market value of similar homes but on worst-case scenario market pricing. Worst-case scenario value is not the amount a house can be sold for, but the amount it will fetch once it goes into foreclosure.

The Silver Lining
That home loan lending implements stricter regulations is sure to dismay everyone, from borrowers to lenders . However, three good things can come out of this. First, inexperienced and even fly-by-night mortgage brokers will be driven out of business, leaving the home loan lending market to legitimate lenders. Second, with lenders no longer eager to grant high-risk loans, there will be more money and better rates for borrowers with sufficient downpayment and good credit. Finally, fewer high-risk loans that never should have been granted in the first place will be floated into the market. This will result in fewer homeowners being dismayed and losing their homes due to inability to meet payments.

Every story has a moral, and this article contains only one. If something sounds too good to be true, it probably is too good to be true. So when buying a house, do not be tempted to take shortcuts. Go the longer but perfectly legitimate and business-sound home loan lending route.