AEA Progresses But Have Problems with Bad Debt

Based on the call report of the credit union during the first quarter of this year, there are a few flickers of progress for AEA. The call report was put online this week in the website of National Credit Union Administration.

However, it is still struggling with bad debt and its net worth to total assets ration is still supported by a $20 million worth of cash infusion which NCUA gave to AEA during December.

According to NCUA public affairs specialist John Zimmerman, the credit union was supported by giving additional capital through a deposit, also known as subordinated debt. Consequently, AEA’s net worth to total assets ratio for quarter four 2011 was 2.69 percent.

At the end of March, AEA’s ratio was up to positive 2.85 percent. One year earlier, their ratio was minus 7.77 percent.

Moreover, AEA’s profit for quarter one 2012 was $839,000. That is in line with the profit-making trend observed during 2011, with a $6.2 million ending cumulative profit.

During quarter one 2012, AEA reported shares and deposits up by $11 million. But the membership is decreasing from 46,015 members one year earlier to 41,750 members this year.

Zimmerman added that AEA constantly developed its performance for quarter one and AEA is developing its net worth as well. For the month of March, it reported $7 million of net worth, which is an increase from $6.1 million during December. On the other hand, the credit union had minus $18.6 million net worth during March of last year.

AEA might be converting delinquent loans to foreclosures since there was a decline in the number of delinquent loans but an increase in the number of foreclosures.

During December, AEA had $8.9 million loans overdue by 12 months or more, but it was down to $2.4 million during March. In contrast, AEA’s foreclosed and repossessed assets reached $7.8 million during quarter one 2012, which is up from $2.1 million foreclosures in 2011.

Debts Beyond The Grave

Investigations by the United States’ authorities have found out something disturbing, nothing can make you safe from identity thieves, not even death. According to recent data, the new stolen IDs used the personal information and SS numbers of over 2 million people who have already passed away. These thieves use the identities to get credit cards and cell phone services.

Moreover, not all the perpetrators were intending to use the identity of a dead person, in fact, 1.6 million of the SSN they had no idea belonged to a deceased citizen. They only intended to use the numbers to create a phony name and a fake identity to manipulate dealers.

Every year crooks would use 2.5 million fake identities they have stolen from deceased victims. Investigations are able to match these stolen identities to about 100 million transactions from January to March of last year.

Dr. Stephen Coggeshall, ID Analytics chief technology officer says that these cases pose a large problem for organizations and businesses and most especially for the remaining family members of these deceased that would inherit the account and the liability. He further states that it is important that the living relatives should monitor the accounts of their dead loved ones, in case they were being used by these identity crooks.

According to data, these cases would happen at least 2,000 times in a day; criminals would purchase online and use a fake ID belonging to someone who has already passed away. The ID Analytics’ ID Network is now being used by authorities to be able to identify whether someone is using a dead person’s name to transact loans, credit card, cell phone purchases, rents and other financial businesses.

So far, about 800,000 of the identities have been identified to have been used knowingly by crooks.

The Power of Debt

The recession suffered by the United States has left many businesses declaring bankruptcy, led to companies closing, people losing jobs and some being forced to being overwhelmed with debt.

A person being engulfed by debt would very well blame everyone and everything in his surroundings for his struggling situation. Being overwhelmed by debt has a chain effect in a person’s financial situation. He gets bad credit, he has to sell his assets, pawn his car, and his family might start bickering about money, and so on.

The damage has already been done and there is no use to continue pointing fingers to whoever should be blamed for the predicament that the country is facing financially. The best thing to do is to move on, and to try anew in rebuilding your life. But this is the difficult part.

Though the knowledge you need to get back up on your feet is easy to comprehend, they are hard to follow because they need consistency and self-discipline. The basic building block of being successful is knowing how to use debt to your advantage.

Getting a loan or borrowing money can get you a large liability you have to give back in the future; you can become lucrative if you know how to handle it to your advantage. You have to think like a businessman. When a company is going to borrow money, the big question they ask themselves is if the loan will gain them more money in the future.

When you borrow money you should ask yourself is what you are going to do with the money will benefit you and gain you more money, or will it do more harm than good?

Investing for college is one very good reason for loaning. Whenever you want to get a car, you should first weigh whether it is going to benefit you more than it will cost you to purchase the item.

But according to experts the best things you should invest in are schooling and a good household. It is best to think twice when you want to loan for a car or for health related circumstances.

Good management of your liabilities is the best way to start in your road to financial recovery, while smart borrowing is the key for a good and worry-free life.

Homes Act to Provide More Affordable Housing in California

The state leaders of California are discussing whether or not they should tax homebuyers to be able to provide more affordable housing for those who cannot buy or even rent a house.

One-third of homeowners in the United States have more mortgage debts than the cost of their houses. These families are drowning in debts and having problems with their housing.

When a family loses a house to the bank, then they begin to compete with other families in renting apartments or small houses, which have limited living space. There is a one in a million chance that these families rent a good apartment considering the fact that they most likely have poor credit and no savings left.

California’s state policy makers know that their constituents still cannot afford to buy a house. As a result of the elimination of Redevelopment Agencies, $1 billion was deducted from the funds for annual affordable housing. Also, this caused Californians who earn a small income to struggle from finding an affordable housing that is adequate for their small budget.

Now, there is a bill called Housing Opportunity and Market Stabilization Act (HOMeS Act) or also known as SB 1220. This bill suggests a $75 addition to all real estate transactions in California, and the earnings would be used to fund affordable housing.

This bill is criticized by many and they say that the $75 could damage California’s weak housing market.

Despite criticisms, the $75 would actually accumulate and reach $400 million to $1 billion annually. Consequently, this could already finance a lot of houses to be given to families and individuals who earn little or who have no homes.

Over the years, Californians have been considered as trendsetters of the state because of, for instance, living a healthy lifestyle or taking care of the environment. Now, California might make a new trend in helping its constituents through providing more affordable housing.

How do I get out of debt?

This question is being asked more and more these days. In fact, it appears that people have reallly taken this to heart. Appartently it looks like credit card balances have declined overall in the US. That is a good thing.

It means that we are saving more and more these days. Afterall, we are not sure what is going on with the economy, and for many it is better to save than spend.

If you are saving and are able to get out of debt, then good for you. But, for some, especially those that have bad credit, and others that have very bad credit, it may seem pretty daunting.

Well, if you are trying to figure out how to get out of debt and how to get back on track to building your credit again, have no fear.

4 Ways to Get Out of a Debt Cycle

Since the President and Congress are already taking their own steps to decrease national debt, maybe it is also time for you to do the same thing. Here are four ways that you can take to lower your debt or get yourself out of a debt cycle.

1.) Try refinancing at a lower rate
Transfer your balances from a high rate credit card to one with low charges or zero interest. But, make sure to take caution with the balance transfer fees and the rates after the expiration of the introductory balance transfer. You may also opt to borrow from home equity or retirement plan as these options usually comes with lower rates.

2.) Monitor your expenses and decide where you can cut back
You can start doing this by reviewing your credit card and bank statements for the last three months. Then, record your expenses if you can. It may also be helpful for you to keep receipts and list down your expenses to monitor your cash spending.
If you see that there’s not much room to cut down your spending, decide on what to prioritize. Begin with your basic needs such as food, housing, utilities and transportation. Remember that it is better to miss a payment to your credit card than to go through a foreclosure, repossession or eviction.

3.) Begin paying your debt
Start with high interest bearing debts and make minimum payments with the low interest ones. If you still have difficulties with this term, talk to your creditor and negotiate a payment plan. Tell them that you are trying to avoid bankruptcy. If you cannot come up with a good deal, ask a credit counseling agency to negotiate for you. As your last option, consult a bankruptcy officer. This may hurt your credit for several years but it will give you a fresh start.

4.) Focus on you budget plans
Take out a loan only for things that can increase in value or provide you with more income. These include a home, education or car. Do not get tired of tracking your expenditures so that you are able to stick on your budget. Divide your non-monthly expenses such as insurance bulls, holiday funds and vacation to a monthly amount and put it in a savings account. Finally, make sure to keep some for emergency bills by saving at least 3 to 6 months’ worth of your monthly expenses.

When you take a look at these tips for getting out of debt, you will realize that there is no secret answer or magic bullet. A great deal of the answers come from being disciplined and also budgeting and planning.

If this is new for you, know that you can do it! Start small and gradually work your way up.

If you make a mistake, do’nt be too harsh on yourself. Identify that you made the error and get back on the wagon!

Over time you will be surprised at how you were able to improve your credit score, get out of debt and save money!