50 Plus Finance

Saturday, March 3, 2012

Prosper.com Now Offering IRAs and Other Tax Deferred Accounts

Prosper.com is the website that believes in the power of peer-to-peer lending, cutting out the middleman. Prosper.com puts together creditworthy borrowers who want to borrow money with lenders seeking consistent and predictable high-yield returns. At Prosper.com you can expect seasoned returns of up to 10.46%. Borrowers can apply for unsecured loans at rates starting at 6.59%.

With 1,250,000 members and over $311,000,000 in personal loans funded, Prosper.com has attracted much attention. The loan process and forms are all done online. Easy and quick for the borrower. The lenders see a high rate of return and the advantage of diversifying over several loans. There is relatively low risk associated with a peer to peer loan because lenders invest a small amount (as low as $25) in many different loans, there’s always some risk but you get to spread it around many loans.

Now, to make investing even sweeter at Prosper.com they are offering Traditional, Roth, SEP and 401(k) rollovers in a Prosper IRA. The minimum investment requirement is $5,000. The federal deadline to fund a Prosper.com IRA is Tuesday, April 17, 2012.

Benefits of a Prosper IRA are:

Tax advantages: returns grow faster tax-deferred with the Traditional IRA, and tax-free with a Roth IRA.

No fees: all fees for accounts with balances of at least $10,000 are paid by Prosper.com.

Broad diversification: a portfolio of consumer loans helps reduce an investor's portfolio volatility.

Easy reinvestment: Prosper.com’s Automated Quick Invest tool reinvests earnings so that returns compound over time.

Personalized service: To ensure the best service, Prosper.com has partnered with Sterling Trust3, the self-directed IRA custodian with over $10 billion under custodial and retirement administration.

For more information, Prosper.com is hosting a free webinar on Thursday, March 15 at 7 p.m. ET / 4 p.m. PT. Prosper.com’s Chief Investment Officer, Joseph Toms, and Mike Kurka, Institutional Sales Executive at Sterling Trust will lead the conversation: “Boost Your Retirement Savings: The Advantages of a Self-Directed IRA for Your Peer-to-Peer Lending Investment.” Register here.

Personal loans at rates as low as 6.59% APR. No hidden fees. No pre-payment penalties

Friday, March 2, 2012

How Long Does A Foreclosure Remain On My Credit Report?

Foreclosure auction signs (Photo credit: niallkennedy)
Foreclosures are one of the worst things any family can go through. They not only turn your life upside down, they damage your credit for years to come. But as the years pass and by following the guidelines from the FHA, Fannie Mae, and Freddie Mac, you can become a homeowner again.

All the major government entities that have influence over the foreclosure rules in the U.S. wield a lot of power over banks. Though they are not direct lenders what they say is what the banks and credit lenders must do.

Many people don't even realize that the guidelines used in making their mortgage have been set down by the FHA, Fannie Mae, and Freddie Mac.

Here are the guidelines for your ability to apply for a new mortgage after foreclosure:

FHA Guidelines

Foreclosure.

3-year wait.
Reduced wait if borrower has re-established good credit and can show extenuating circumstances.

Short Sale

No wait if not in default.
3-year wait if in default at closing of short sale.
Reduced wait if borrower has re-established good credit and can show extenuating circumstances.
Deed in lieu of foreclosure
Same as FHA’s foreclosure policy.

Bankruptcy

Chapter 7 (liquidation):

2-year wait from the discharge date of the bankruptcy.
1-2 year wait if borrower can show extenuating circumstances.

Chapter 13 (repayment plan):

1-year wait from the discharge date of the bankruptcy.Fannie Mae

Fannie Mae Guidelines

Foreclosure

7-year wait from the completed foreclosure sale date.
3-year wait if borrower can show extenuating circumstances (additional underwriting requirements apply for 4 years after 3-year waiting period).
7-year wait for a second home, investment opportunity, or cash-out refinancing.

Short Sale

2-year wait if the borrower puts 20% or more down.
4-year wait if the borrower puts 10-20% down.
7-year wait if the borrower puts less than 10% down.
2-year wait time if borrower can show extenuating circumstances and puts 10% or more down.

Deed in lieu of foreclosure

Same as Fannie’s short sale policy.

Bankruptcy

Chapter 7 or Chapter 11 (reorganization, usually involving corporations or partnerships):

4-year wait from the discharge or dismissal date of the bankruptcy.
2-year wait from the discharge or dismissal date may be accepted if borrower can show extenuating circumstances.

Chapter 13:

2-year wait from the discharge date or 4-year wait from the dismissal date.
2-year wait for a dismissal if borrower can show extenuating circumstances.

Multiple bankruptcies:

5-year wait if the borrower has filed more than one bankruptcy petition in the past 7 years.
3-year wait if borrower can show extenuating circumstances.

Freddie Mac

Foreclosure

5-year wait from the completed foreclosure sale date.
3-year wait if borrower can show extenuating circumstances.

Short Sale

4-year wait.
2-year wait if borrower can show extenuating circumstances.

Deed in lieu of foreclosure

Same as Freddie’s short sale policy.

Bankruptcy

Chapter 7 or Chapter 11:

Same as Fannie’s bankruptcy policy.

Chapter 13:

2-year wait from the discharge date of the bankruptcy.
2-year wait from the discharge or dismissal date of the bankruptcy if borrower can show extenuating circumstances.

Multiple bankruptcies:

Same as Fannie Mae’s policy for multiple bankruptcies.

Source: FHA Handbook, Fannie Mae Selling Guide, Freddie Mac Selling Guide

Before taking any steps to rebuild your credit make the decision to seek out professional assistance. Look to professionals, such as a bankruptcy lawyer and a CPA specializing in bankruptcy provisions, before making major financial decisions.

For HUD-approved counselors, go to: http://www.hud.gov/offices/hsg/sfh/hcc/fc/index.cfm.

You can also call 1-888-995-HOPE for help from the Homeownership Preservation Foundation.

Tuesday, February 28, 2012

How to Amend Your IRS Tax Return

It's great to do your taxes early. All the stress and aggravation is long passed and your enjoying that nice fat refund check. But in the mail today came an additional W-2 income form. You completely forgot about it, what are you going to do now? The I.R.S. has just the solution to your problem. It's called form 1040X. With this form you can amend your incorrect tax return and satisfy your obligation to Uncle Sam.

Here are a few tips to help you with your 1040X:

When to amend a return You should file an amended return if your filing status, your dependents, your total income or your deductions or credits were reported incorrectly.

When NOT to amend a return In some cases, you do not need to amend your tax return. The IRS usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return.

Form to use Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend a previously filed Form 1040, 1040A or 1040EZ. Make sure you check the box for the year of the return you are amending on the Form 1040X. Amended tax returns cannot be filed electronically.

Multiple amended returns If you are amending more than one year’s tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS processing center.

Form 1040X The Form 1040X has three columns. Column A shows original figures from the original return (if however, the return was previously amended or adjusted by IRS, use the adjusted figures). Column C shows the corrected figures. The difference between Column A and C is shown in Column B. There is an area on the back of the form to explain the specific changes and the reason for the change.

Other forms or schedules If the changes involve other schedules or forms, attach them to the Form 1040X.

Additional refund If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.

Additional tax If you owe additional tax, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges.

When to file Generally, to claim a refund, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.

Processing time Normal processing time for amended returns is 8 to 12 weeks.

Links:

Form 1040X, Amended U.S. Individual Income Tax Return
Instructions for Form 1040X

Sunday, February 26, 2012

Grants for Adults Returning to College

NRC Chairman Klein Presents Grant Money to University of Illinois (Photo credit: NRCgov)

For 2016 an up-to-date list of current active scholarships and grant programs at the end of this post.

Many adults have never finished their college degrees or even started them. Through the many twists and turns of life we just don't do it. Either family needs take precedent or we just don't have the money. Today many adults are returning to college to start or finish a degree.

They now have the time or have changed jobs forcing the question of returning to school to the forefront. They never have realized that there are many grants available, specifically for adults returning to school.

A grant is money given to a student that does not need to be paid back when they complete their degree. Some grants are one time events, while others are renewed yearly, as you progress through school. Usually grants are given based on your financial needs or provided when you chose a specific path of study.

Even though you are working full time, this doesn't keep you from obtaining money for college tuition. For adult students you don't have to sign up as a full-time student to receive grant money. Adult grants understand that you still have work and family obligations to juggle while going to school.

Federal Education Grants.

The largest government grant option is called Pell Grants. This money is given to you and does not have to be paid back. For the 2010-2011 school year, the value of the federal Pell grant was $5,550. In order to qualify annually for a Pell grant, you must be working toward a degree.

To apply for Pell Grants you must complete the Free Application for Federal Student Aid (FAFSA) forms. The FAFSA forms must be completed annually to continue to receive government grants. Income information is necessary for completing FAFSA forms, so it is helpful to submit your tax forms early and have your most recent tax return documentation available when you complete the forms.

You must apply before June 30th, but if you submit in early February you will get a quicker response and more grant money than those that wait till June. There is a limited amount of money and the sooner you apply the better. FAFSA forms and information can be found here: Fafsa.Gov.

Federal Supplemental Education Opportunity Grant (FSEOG).

This other federal grant is offered by the government for people with a greater financial need. Also there are grants offered based on gender, race, nationality, and other specific groups. To find other government grants, visit Students.Gov

State School Grants.

Even some states offer grants to students who attend their state college or choose a specific career path. Some states are in need of teachers so they offer specific grants for that vocation. Check your states government website, education and grants section, for more information.

College Grant Providers.

Colleges themselves often have grant monies available for students. Some colleges have separate programs for adult students, and corresponding grant programs to assist the students with tuition costs. Whether the college has a separate program for adults or not, the financial aid officers at the college should be able to direct adult students to specific grant and scholarship programs that can assist them.

Employer Grants.

Many larger companies offer grants or tuition reimbursement programs for employees that want to continue their education. Check your companies human resources department for more information.

Community Grants.

Many cities have organizations that offer grants and scholarships to adults students going back to school. Many scholarships are available by a variety of clubs, organizations, civic groups, and religious organizations. The only problem is there is no one source to track down these services. You will have to use the phone and Internet and search for these organizations one by one.

Though many grants and scholarships are generous in the amount of money they offer, remember they will not cover the totality of your education costs. You still need to have some money saved for uncovered expenses. You could fill in your need for money by taking loans, but it may be better to pay for education when you have the cash available.