Content tagged “Loans”

Up to $50K available in BR to some homebuyers through assistance program

Mayor Kip Holden's office announced today that prospective homebuyers can receive up to $25,000 in assistance for the purchase of existing homes and up to $50,000 on new construction under the City-Parish Office of Community Development's Homebuyer Assistance Program. Funded by the U.S. Department of Housing and Urban Development, the program provides interest-free loans as gap financing for people who might not otherwise qualify for the mortgages necessary to purchase the homes. Participating homebuyers must have not owned a home in the last three years, or they can also qualify as a displaced homemaker or single parent. They also must meet certain income limits. For example, a two-person household can earn a maximum of $42,500 per year to qualify. A household of four can earn a maximum of $53,100 annually. The interest-free loans must be paid off upon the sale or transfer of the purchased property. However, borrowers who take advantage of the program can repay the loan at any...

Payday loan rates in La. would be capped under new bill

Payday lending businesses in Louisiana that offer quick, upfront cash for costly repayment rates are targeted for tougher regulations this year by organizations that represent the elderly and the poor. The Associated Press reports they want lawmakers to cap the fees that can be charged by the storefront lenders at an interest rate of no greater than 36% annually. Supporters of the proposal say the short-term loans currently carry exorbitant fees that put borrowers in never-ending cycles of debt. The tougher restrictions are proposed in bills sponsored by Rep. Ted James of Baton Rouge and Sen. Ben Nevers of Bogalusa. They will be considered in the legislative session that begins Monday. Payday lenders say if lawmakers approve the measures, they could put payday loan stores out of business and send their customers to more expensive, unregulated borrowing options. Louisiana Budget Project Policy Analyst David Gray recently estimated


Payday lenders, often seen operating out of low-rent storefronts, give customers stopgap loans that typically are due in two weeks. Critics say these businesses charge exorbitant interest rates and trap borrowers in a cycle of high-cost loans. But the industry says it provides a useful service for people without access to traditional loans or credit.

Financing the boom

The manufacturing boom looming large in south Louisiana has brought with it not only a boom in construction but a boom in financing as well.

LBP advocates for legislative reforms on La. payday lenders

Payday lending storefronts outnumber McDonald's restaurants 4 to 1 in Louisiana, according to David Gray, a policy analyst with the Louisiana Budget Project. Addressing the Baton Rouge Press Club today, Gray said the payday lenders are concentrated in low-income areas of the city—such as the Plank Road and Florida Boulevard corridors—and typically target potential long-term borrowers, because that's where the profit lies. When a borrower can't pay back a loan in two weeks, Gray said, they're typically forced to either refinance the loan or take out a second loan from a different lender to pay back the first. This creates a vicious cycle of long-term debt, Gray said; one in which more than 57,000 Louisiana households are trapped, according to an LBP estimate. The average borrower trapped in this cycle will take out an average of nine loans per year and pay as much as $270 in fees for a one-time loan of $100, Gray said. Payday lenders in the state are allowed to charge up...

Winding down Fannie and Freddie could cost borrowers

President Barack Obama announced Tuesday his support for a bipartisan Senate effort to "end Fannie and Freddie as we know them" to reduce market reliance on the government-sponsored enterprises. For Baton Rouge-based mortgage lender GMFS, selling loans to Fannie Mae and Freddie Mac is a key part of the business model. Tee Brown, the company's president and CEO, says that while changes may be needed, the government's role in the housing market likely can't be eliminated entirely without significant risks to the economy. He says "jumbo" home loans not backed by the government, typically made to high-income borrowers with little risk of delinquency, tend to be about 75 basis points (0.75%) more expensive than a 30-year fixed rate Fannie Mae-backed loan. "If the government is out, private capital will be expecting a much higher return," Brown says. Certified mortgage banker and Real Estate Weekly columnist Brian Andrews says Fannie and Freddie deal in apartment financing, not just...

Big banks may finally be warming to small businesses

It has become a familiar refrain from capital-starved small business owners over the past few years: the notion that "banks just aren't lending." That may finally be changing. A series of data released in the past week point to relaxed credit standards and more money flowing into small companies, reports The Washington Post. One recent report shows small business loan approval rates surged to an all-time high of 17.4% in July. Business lending platform Biz2Credit, which published the report on Tuesday, noted that the rate has jumped more than 50% in just the last year. Small business approval rates at credit unions inched higher last month, too, ending a streak of 13 consecutive months of decline. That uptick is yet another sign that a credit freeze that many have blamed for holding back the economic recovery may finally be coming to a close, at least on Main Street. Nearly a third of banks reported an increase in demand for commercial and industrial loans from small...