What is a mortgage holiday? A mortgage repayment holiday is simply a financial ‘break’ from your monthly repayment. This is available for customers who are unable to make their usual monthly mortgage payments.
How will it impact my finances? Payment holidays may not be right for everyone. It’s important to remember your payment will not be waived but simply deferred.
If you choose to take a payment holiday you will need to be aware that the amount you owe will increase as you’ll still be charged interest and the missed payments will be made up over the remainder of the mortgage term.
Will my credit rating be affected? Taking a payment holiday will not impact your credit rating.
How much notice to do I need to give my Bank? Each bank has its own timescale, it is typically between five to 10 working days from the time of your request.
If you’re concerned about making your monthly mortgage repayments, get in touch with your bank as soon as possible.
How do I apply? Most banks have online forms to help make it easier for customers if they know this is the best option for them, look at your mortgage provider’s website for all of the contact options.
How long can I take a repayment holiday for? Covid-19 repayment holidays are currently in place for a maximum of three months.
It’s important to remember your term will not be extended beyond this but if you’re still concerned about your monthly payments, then speak to your bank for help. They can assist and find the best option that is suitable for you.
Steven Mnuchin, U.S. Treasury secretary (right), and Jovita Carranza, administrator of the U.S. Small Business Administration (SBA), in the East Room of the White House in Washington on April 28, 2020. MUST (Bloomberg photo by Al Drago)
U.S. companies have canceled at least $18 billion in loans from the government’s centerpiece coronavirus relief program for small businesses, a much larger number than figures previously disclosed by publicly traded firms that gave millions of dollars back after a public backlash.
The $18 billion value was calculated by Bloomberg News using data released by the Small Business Administration from the first round of the Paycheck Protection Program and the second so far. Cancellations include returned funds, duplicative loans and loans not closed for any reason, according to the SBA. An agency spokesman declined to comment.
The SBA has recently started to release net numbers for the program. As of Tuesday night, there were almost 4.4 million Paycheck Protection Program loans worth $512.9 billion approved. Through May 8, the agency had reported $531 billion for the two rounds.
The amount of canceled loans is likely higher because new approvals continue to be made, and the agency hasn’t provided a comprehensive accounting. The data indicates that more funds were returned this week: Between Saturday and Tuesday, the net amount declined by almost $350 million. Agency Administrator Jovita Carranza, who’s in charge of the $669 billion program, tweeted on April 27 that more than $2 billion of the first round of Paycheck Protection Program funding was either declined or returned.
The reasons behind loan cancellations are unclear. Most of them are from unidentified, closely held companies. Publicly traded firms had disclosed returning 67 loans worth $433.7 million through Wednesday morning, according to data compiled by FactSquared.
Many companies rushed to cancel loans after an outcry when businesses such as Shake Shack and the Los Angeles Lakers got millions in loans at the expense of mom-and-pop shops. Both said they returned their loans. It prompted the Trump administration to warn that firms with substantial market value and access to capital markets would be unlikely to qualify for the Paycheck Protection Program — and that all loans of more than $2 million will be reviewed to determine whether they qualified.
The volume of returned loans shows that the challenges of the program go well beyond the larger companies that shouldn’t have taken loans. Some smaller firms said they were uneasy about taking or keeping funding because uncertainty about the program rules meant they might have to repay a loan they thought would be a grant.
Treasury Secretary Steven Mnuchin initially said companies that improperly certified that the loans were needed had criminal liability. Then the Small Business Administration and the Treasury Department announced May 13 that all borrowers with loans of less than $2 million will be automatically deemed to have certified them in good faith — and anyone with a larger loan that’s questioned could return it with no further action.
The back-and-forth and lack of guidance created confusion among small businesses. Some firms said they were holding their loans or considering returning the money because they didn’t know how much they may have to repay without more guidance on calculating the amount that can be forgiven. The SBA and Treasury Department finally released an 11-page application and instructions Friday night — almost three weeks past an April 26 deadline.
The volume of canceled loans has contributed to the slowing pace of loan approvals. The first round of $349 billion in funding ran out April 16 after 13 days. Based on the latest daily Small Business Administration report on Saturday, there was still more than $100 billion left in the second round of $320 billion that started April 27.
The data shows that the size of the loans got much smaller in the second round, after the government took measures to ensure that the smallest firms left out in the first round get access to funding. A Paycheck Protection Program report released Monday shows the average loan size for the entire program so far is $118,000. It was $206,000 in the first round.
Large banks with more than $50 billion in assets have accounted for 37% of the approved loan amount so far, while lenders with less than $10 billion had 43%, according to the latest report. Loans of $150,000 or less accounted for 26% of the total, based on the dollar amount, while those of more than $2 million were 22%, the report shows.
Groups representing both small businesses and lenders are lobbying for changes in program rules, such as lengthening the eight-week period that loan proceeds must be spent and relaxing a rule that at least 75% must be used for payroll. Many firms say they won’t be ready to reopen or fully functional after eight weeks and want to spend more on other expenses.
There are efforts in both chambers to loosen the program rules, although it’s too soon to say whether they will succeed.
Sen. Marco Rubio, R-Fla., said in a video posted on Twitter on Wednesday that he expects there will be an effort in the Senate this week to pass a measure extending the loan-forgiveness period by as much as eight weeks that would have bipartisan support. The question, Rubio said, is whether Democrats will have other demands and whether the House would pass it.
House Speaker Nancy Pelosi, D-Calif., told reporters on Wednesday there will also be a vote next week on a bill to make changes to program rules, including extending the loan-forgiveness period and changing the requirement that 75% be spent on payroll.
Ed Sheeran was once homeless before he found fame and now, he’s the proud owner of an expansive property portfolio worth £57 million, which he reportedly paid for in cash. The Castle On The Hill singer is said to own a staggering 22 properties in London alone after ploughing money into the investments, as well as the huge estate he calls home in his beloved West Sussex. According to The Sun, Ed decided to pay outright for each one of his houses to avoid owing banks with a mortgage. TOP ARTICLES 3/5 Mel Gibson blockbuster Force of Nature criticised for stirring ‘trauma’ of Puerto Rico hurricane What a dream. In London, the 29-year-old is said to own a £20 million house in Notting Hill, and two properties nearby for a combined £4 million. He also has a restaurant and bar, Bertie Blossoms, on west London’s trendy Portobello Road. The pop star’s portfolio also includes properties in Covent Garden and two flats near Battersea Dog and Cats Home. Ed resides on his Suffolk estate (Picture: Rex) Ed mostly resides at his West Sussex estate, which is made up of a collection of five houses which he purchased in 2012 for a modest £895,000. A source revealed: ‘He has a great portfolio of properties and he owns the lot free and clear. There was no need to borrow the cash from a lender because he already had it. ‘Some people have the cash tied up so need to raise a mortgage but Ed has piles of the cash in the bank so there was no point in letting a bank earn money by lending him the money. He just bought them outright.’ Makes sense! Ed previously revealed how he struggled to settle in one place before finding fame and was even homeless.
You may have noticed that when we are in a recession, there tends to be increased consumer interest in mortgagerefinancing. You might see or hear advertisements about lower interest rates and how you can lower your monthly mortgage payment. However, there are several factors to take into account when deciding when – or if – you should refinance your mortgage, including the expected trajectory of mortgage rates. Here are a few scenarios where you should consider refinancing.
Mortgage Interest Rates Dropped
The most popular reason people refinance their mortgage is to receive a lower interest rate. When the Federal Reserve drops interest rates, it’s typically because the economy is struggling. Cutting rates has an indirect effect on the mortgage rates; indeed, one reason the Fed cuts interest rates is to encourage consumers to purchase real estate.
Refinancing at a lower interest rate may decrease your monthly payment. You could refinance your mortgage at a lower rate but also change the terms of your mortgage. For example, if you have 20 years left on a 30-year mortgage, you may be in a financial position to refinance your home to a 15-year mortgage and still pay a similar amount each month.
Lower interest rates do not always mean that you should refinance your home. However, if you hear that interest rates have dropped and you have a good credit score, you may want to speak with a financial advisor or a mortgage lender to evaluate if this is the right move for you.
Your Home’s Value Increased
Another reason to refinance your mortgage is if the value of your home has increased. This allows you to do what’s called a cash-out refinance – an especially valuable option if you have high-interest debt that you need to pay down.
For example, you may have purchased a $200,000 home and put a $40,000 down payment on it, leaving you with a $160,000 mortgage. You’ve made regular interest payments and now owe $100,000. However, over the last several years, the value of your home has increased from $200,000 to $250,000. This means you can take out a mortgage for more than the remaining cost of your mortgage and pocket the difference. You can then use it for any needs, whether that’s financing an addition to your house or paying down some high-interest credit card debt.
This can be a viable way to consolidate your debt. However, you should only do this if you can make the new regular payments on your mortgage. Your total debt will not decrease, but by paying off high-interest debt you can save money by paying less total interest.
Your Credit Score Rose
When determining your interest rate, your credit score is one of the biggest factors lenders consider. Therefore, if you had a lower credit score when you first purchased your home, you might be able to refinance at a lower interest rate.
For example, let’s say you applied for a $200,000 mortgage with a 30-year mortgage, had a credit score between 660 and 680, and received an interest rate of 4.55%. But, if your credit score was between 700-779, your interest rate could be closer to 4.25%. Over the 30-year life of the loan, having a better credit score would save you over $12,417.
You Have an ARM and Rates Are Rising
If you have an adjustable rate mortgage (ARM), your interest rates can increase during your repayment term. Therefore, you might have a lower interest rate during the first few years of your loan, but as interest rates increase, you are responsible for larger payments. Therefore, you might want to refinance and get a fixed-rate mortgage to help you cap your payments.
(India Parthia seeds), popularly known as Ghana seeds in Nigeria also called magic seed is most powerful laxative, which has stimulant action on bowel movement. It has potent effects and work very fast in anybody’s system that is…
Rearrange ones system and keep you free after usage it is mainly for both male and female and also children can use it, giving you complete cleansing and you will be perfect after few hours.
Ghana seeds can also cure the following after usage….
Excess tummy fat (constant usage) Removal of excess body water Fight diabetes Menstrual cramps Fallopian tube blockage High blood pressure (BP) Flush the bowel system. And very good for ladies before they get pregnant…
HOW TO USE: Chew two or three seeds (if your system is too strong 3 seeds) CONSTITUENTS :
The seeds yield fatty oil composed principally of :
Narratives are essential. Humans are, after all, “helpless story junkies”. Business and economic success depend much more than is commonly acknowledged on getting the narrative right. And if there is a narrative where getting it right or wrong matters hugely, it is the narrative about Africa’s industrial development.
Africa is the poorest continent. It is likely to be the most affected by climate change. It is the continent where terrorist groups are spreading fast.
Therefore, African industrialisation is essential. Unfortunately, the dominant narrative is that Africa has been de-industrialising, even prematurely. In this narrative, it is also questioned whether Africa can ever industrialise. African countries have even been advised not to try. The World Bank’s “Trouble in the Making” report concludes that manufacturing is becoming less relevant for low-income countries.
Fortunately, a very different narrative is possible. In a recent paper, I argue that Africa can industrialise because of three factors. These are “brilliant” new technologies enabling digitisation, smart materials and 3D-printing; a more vibrant entrepreneurship scene; and Africa’s growing middle class (as measured by the share of households that earn between $11 and $110 per person per day), which supports the continent’s first generation of indigenous tech-entrepreneurs.
Consider therefore the following narrative: More than 300 digital platforms, mostly indigenous, are operating across the continent. There are also more than 400 high-tech hubs, and more are being added. In addition, venture capital funding into African tech start-ups increased ten-fold between 2012 and 2018.
Moreover, manufacturing has more than doubled in size in real terms since 1980. And since 2000, manufacturing value added has grown at more than 4% a year. That is double the average between 1980 and 2000 (numbers from the Expanded African Sector Database).
As a result, total employment in manufacturing in 18 of the largest African economies (for which there is data) grew from roughly 9 million in 2004 to more than 17 million by 2014. That is an 83% increase in ten years. The proportion of labour in manufacturing for Africa as a region grew from roughly 5% in the 1970s to almost 10% by 2008.
So, how will these trends shape the future? I argue that they will result in three varieties of industrialisation.
Three varieties
The first variety can be labelled “acquiring traditional manufacturing capabilities”. This variety is implied by Overseas Development Institute researchers Karishma Banga and Dirk Willem te Velde. It will be experienced by countries and sectors where technological change is too fast and complex to benefit immediately. These countries and sectors will need time to first put complementary investments in place, while at the same time continuing to promote traditional labour-intensive manufacturing.
The second variety, “fostering sectors with the characteristics of manufacturing”, is elaborated in a recent UNU-WIDER book. Here it is argued that service sectors can take up “the role held by manufacturing in the past”. In many countries, services such as ICT and telecoms, tourism and transport, financial and farming services can lead to productive development.
The third variety, “resurgent entrepreneurship-led industrialisation” is based on my earlier work. I point to the growing list of achievements of African countries in terms of high-tech manufacturing. For example South Africa leads in advanced manufacturing in having one of the world’s largest 3D-printers, used to manufacture parts for the aviation industry.
Different combinations of these varieties will dominate in different countries. For example, Kenya is already experiencing the simultaneous development of high-tech financial services alongside growth in traditional manufacturing, such as food processing and textiles, as well as clusters of advanced manufacturing. While every country’s pathway will be a unique combination of these varieties, what they will have in common is that progress will require that they deal with the impact of new technology, especially digitisation, on manufacturing.
To ensure momentum is maintained, the narrative about industrialisation has to change. As Israeli historian Yuval Noah Harari pointed out, neither land – the core resource of feudalism – nor physical capital – the core resource of 20th-century capitalism – will be decisive for competitiveness in the future. Instead, data and data science, free information flows, ICT (data) skills, and decentralisation of decision-making will be the decisive factors.
What needs to be done
With an outdated story that gives up on manufacturing, Africa will fail to close the huge digital gap it still faces. The gap is reflected in the fact the continent contributes less than 1% of world’s digital knowledge production. To reduce this gap, African countries will have to start by expanding internet access and use. If internet use across the continent can be expanded to the same rate as in high-income countries, 140 million new jobs and US$2,2 trillion could be added to GDP.
What must be done to change the narrative? What do African governments need to do? The first is that its leaders need to start telling more stories about the future than about the past. Perhaps, like China’s leaders, they can even be inspired by science fiction. British best-selling author Neil Gaiman relates how China started to embrace science fiction after sending a delegation to
“the US, to Apple, to Microsoft, to Google, and they asked the people there who were inventing the future about themselves. And they found that all of them had read science fiction when they were boys or girls.”
Helping to imagine the future of African industrialisation, South African President Cyril Ramaphosa recently stressed that fact that Africa is one of the early adopters of mobile telephony and moreover that the continent needs to aspire to more:
We need to focus on the new technologies that are going to revolutionise the world, and we need to be ahead of the curve.
This is the right narrative. It is necessary, although not sufficient for African industrialisation. For this, words need to lead to actions. And some consistent actions, at least for a start, would be for African governments to refrain from creating stumbling blocks for their brave new tech-entrepreneurs, such as curbing access to the internet, restricting digital information flows, under-investing in science, technology, engineering and mathematics education, neglecting data-privacy legislation, and restricting the rights of women to work in manufacturing.
Wim Naudé, Professorial Fellow, Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT), United Nations University
Peter Fife admits he is partly to blame for getting himself into a financial mess, but he still feels the payday loan companies which supplied him with high-interest loans should also take responsibility.
“I dug the hole, but they gave me the shovel,” he told 7.30 from his Innisfail home in Far North Queensland.
The disability pensioner had paid off one payday loan in early April, but days later he received texts offering him “COVID-19 relief loans”.
“How come I’m getting hounded and harassed by these payday lenders? This has never happened to me before,” Mr Fife said.
“Peter didn’t need a large loan, he needed $50 for basic groceries,” financial counsellor Conrad Dwyer, from the Indigenous Consumer Assistance Network, said.
“I don’t think that is what we want, where people are turning to these sorts of companies to take out small-amount loans but then be loaded with significant debt over the six months.”
Coronavirus update: Follow all the latest news in our daily wrap. ‘Like profiteering off a really bad situation’
Financial counsellors have told 7.30 they have had many reports of a spike in targeted messaging by payday lenders over the past couple of months.
“We’ve heard a lot of that sort of activity happening,” Belinda Watson, from Logan-based community group YFS, told 7.30.
“It’s almost like profiting off a really bad situation.”
But one of the organisations that represents small short-term lenders says the COVID-19 shutdown has been bad for business.
“Our members have actually decreased the turnover of new loans by about 30 per cent,” Haydn Cooper, president of the Financiers Association of Australia, said. He accused consumer groups of drawing attention to extreme cases that exaggerate the problems with payday loans.
“I would say that all of the consumer advocate claims about what goes on in the industry is actually, basically anecdotal,” he said.
Payday lenders offer small loans of up to $2,000 and under Australian law are allowed to charge an establishment fee of up to 20 per cent of the amount borrowed and a monthly service fee of up to 4 per cent.
But some of Mr Fife’s loans were taken out with a company called Cigno, which Australia’s corporate regulator, ASIC, accuses of exploiting a loophole to charge much higher fees.
ASIC is currently using its public detriment power to shut Cigno down.
Mr Cooper says Cigno does not represent the industry.
“Cigno has really damaged the industry’s reputation, [but] in every industry around the world there are people who will push the boundaries to the very edge of what is normally considered correct,” he said.
‘I get two or three a day’ Aaron White is currently paying off four payday loans.(ABC News: Chris Gillette) Clients of other payday lenders have also complained of aggressive texting and emailing during the COVID-19 crisis.
“I usually get about two or three a day — sometimes hourly,” Aaron White from Kingston, south of Brisbane, said.
Mr White is currently paying off four payday loans with the help of a financial counsellor and has managed to resist the temptation to take out another.
“When it comes to loans, I’m getting a lot better. I’m seeing the signs and I go, hey, wait, I don’t need the money and I can’t afford to pay it back.”
Consumer advocates are concerned about what happens when Government welfare support during the COVID-19 crisis runs out later this year.
Hayden Cooper wears a blue collared shirt and glasses. Haydn Cooper says problems with payday loan companies are exaggerated.(ABC News: Chris Gillette) “It is a ticking time bomb,” Katherine Temple, from the Consumer Action Law Centre, said.
“We’re going to see more and more people I think taking out these loans and finding themselves in that debt spiral.”
That puts the focus on a private member’s bill, currently before the Senate, which would restrict the amount a person can borrow from payday lenders and ban unsolicited texts.
Mr Cooper says the proposal is over the top.
“If you were in a restaurant and you couldn’t actually email or text message your consumers, your diners, to come and have another meal for two years, how long do you think those businesses would last?” he said.
Americans stimulus checks were supposed to be spent on basic needs such as groceries, mortgage or rent. However, there is evidence that many Americans also spent their money on non-essentials including electronics, clothes and toys, according to major retailers. At the same time, the Mortgage Bankers Association reported that more than 4.1 million homeowners are temporarily skipping their mortgage payments.
Americans Stocked Up on Essentials Initially
During the first wave of stimulus checks, Americans used the money to stock up on essentials. In mid-April when the number of coronavirus cases was still climbing and the payments were initially distributed, “most people immediately spent on groceries,” said Stuart Sopp, CEO and founder of Current, a New York City-based mobile-banking startup.
In the next wave of payments, which occurred towards the end of April, more people used the funds “for everyday means.” That includes ordering more food delivery and takeout, and gas.
Some Americans Spent Stimulus Money on Non-Essentials
Both Walmart and Target saw increased consumer demand for discretionary goods in mid-April as the stimulus payments from the $2.2-trillion CARES Act flowed into Americans’ bank accounts, the companies’ CEOs said this week. Apple saw an uptick in demand for its products “across the board,” CEO Tim Cook said April 30.
At Walmart and Target, shoppers bought more TVs, electronics, gaming equipment and apparel. Walmart also saw increased demand for adult-sized bikes, MarketWatch reported.
“Call it relief spending, as it was heavily influenced by stimulus dollars, leading to sales increases in categories such as apparel, televisions, video games, sporting goods and toys,” Walmart CEO Doug McMillon said during the company’s earnings call Tuesday.
Target Corp. also experienced “a rapid increase in traffic and sales” for discretionary goods driven by the distribution of stimulus checks, CEO Brian Cornell said on the company’s Wednesday earnings call. “We certainly saw an uptick as we reported starting on April 15, as those checks arrived across America,” Cornell said on the company’s call.
Customers, he said, are “still seeing the benefits of the stimulus check.” People are shopping across all categories including apparel, which has been especially hard hit by the coronavirus-driven economic downturn.
Over Four Million Americans Skip Mortgage Payments as Coronavirus Hammers Finances
More than 4.1 million homeowners are temporarily skipping their mortgage payments as the coronavirus pandemic batters Americans’ finances, but the number of people needing assistance is beginning to slow.
A weekly survey from the Mortgage Bankers Association released Monday found that 8.16 percent of total loans are now in forbearance plans, up from 7.91 percent as of May 3. It was the smallest increase in forbearance since March 10, when the outbreak of the virus first paralyzed the nation’s economy.
Half of Working-Age Americans Might Not Have a Paycheck in May as Layoffs Surge
Fewer than half of working-age Americans could earn a paycheck in May as the coronavirus pandemic triggers millions of job losses.
Layoffs in April alone could push the unemployment rate to 16 percent, James Knightley chief international economist at ING, wrote in an analyst note last week. If an additional 10 million Americans file for benefits in May, that would push the unemployment rate to 22 percent – just below the peak of 25 percent in 1933 during the Great Depression.
How Will This Affect the Recovery
The past is the past and how Americans want to spend their money is nobody’s business, but the data may offer clues as to what the U.S. recovery will look like once the entire country ends its lockdown restrictions.
The current price action in the stock market suggests that investors are betting on a swift recovery. The fact that some consumers spent their stimulus checks on non-essentials suggests they were prepared for unemployment and all the other economic issues being caused by the spread of the virus.
If investors guessed right and the economy recovers quickly then it will look as if the government was right when it issued $2.2 trillion in stimulus. This may have actually stabilized the economy.
This implies that a second stimulus package, currently being debated in Congress, may be enough to solidify the economy and could put it on path for the widely anticipated swift recovery.
Following the news from HM Treasury regarding the mortgage holiday extension, the Building Societies Association (BSA) has released data outlining perceptions around this form of support.
Among those that have taken up a mortgage holiday, 90% found it to be fairly or very helpful, with only 8% saying it has been not very or not at all helpful.
For landlords, however, the proportion that have found payment holidays to be not helpful rises to 21%.
HM treasury mortgage holidays extended
Mortgage payment holidays extended for a further three months The majority (68%) of these borrowers are fairly or very confident that they will be able to meet their mortgage payments once their payment holiday ends.
However, 27% are not very or not at all confident that they will be able to pay.
Landlords seem to be less certain than homeowners, with 34% stating that they are not very or not at all confident.
The preferred repayment method for most is to repay over the remainder of their mortgage term, with 53% of homeowners and 32% of landlords favouring this approach.
Among homeowners taking a mortgage holiday, 15% say that they would seek an extension to their payment holiday, compared to 18% of landlords.
Commenting on the announcement regarding the mortgage holiday extension, Robin Fieth (pictured), chief executive of the BSA, said: “We welcome today’s announcements by the Economic Secretary to the Treasury and the FCA and the close collaboration between Treasury, lenders and regulators which has led to them.
“Looking ahead we would encourage those borrowers who are able to pay to do so, as this will be to their own longer-term benefit.
“However, borrowers can also be assured that there will be no cliff-edge moment as tailored support will be available for those who need it, whenever that may be.
“Mortgage payment holidays will continue to be available until 31 October for those who have not had one.
“We are pleased that there will be no automatic blanket extension to existing payment holidays as we do not believe extending payment holidays will be in the best interests of most borrowers, although individual extensions remain an option which may be right for some.
“Possession is always a last resort for lenders and with the extension of the repossessions moratorium, homeowners should also be reassured that they are secure in their own homes.
“Lenders will be contacting all borrowers with a repayment holiday before it comes to an end to lay out potential next steps and the support that is available.
“Any borrower with concerns is encouraged to get in touch with their lender sooner rather than later.
“Lenders will be working hard to provide support to all who need it as quickly as they can.”
