American Education Services is a private company that offers information and applications for a variety of governmental and private financing options for students all under one roof. Their website http://www.aessuccess.org/ allows students and their parents to compare various college loan programs, search out financial aid and scholarships available at various schools, practice and prepare for standardized tests include the SAT, ACT, GRE and GMAT.

In addition to offering lots of student loan and financial aid information, AES student loans sponsors a website www.youcandealwithit.com that helps students and graduates learn to manage money, student loan obligations, budgeting, credit cards and offers ways for graduates who are having problems with repayment to defer or consolidate their outstanding student loans.

In addition the financial features and loan applications, prospective college students and their parents can search a database of over 4,000 colleges, order information packets and admission applications, and review requirements and available financial aid. A scholarship search feature boasts over $8 billion in available aid to qualifying students.

Graduates with outstanding loans with AES can make payments on their loans directly from the AES website. Military personnel can research armed forces loans and also deferment and forbearance options from the site.

On the loan information page http://www.aessuccess.org/find_aid_for_school/index.shtml students and their parents can compare different kinds of loans and weigh their options. Detailed explanations of different types of loans are available, and applications for each can be made directly from the website.

In general, student loans are broken down into four basic categories: Stafford Loans (loans sponsored by the US federal government), Parent Plus Loans (loans to parents wanting to pay for their child’s education), Graduate Plus Loans (loans to graduate students who need to fill the gap between financial aid and the actual cost of their graduate education), and Alternative Loans (loans to consider after free aid and federal loan products have been exhausted).

AES also provides excellent information and help with filling out the FAFSA, or Free Application for Federal Student Aid, which is the first necessary step in applying for loans and grants. Students and their parents can fill out and file the FAFSA form directly from the AES website, or they can download the form, print it out, and mail it in. FAFSA worksheets are available in English or Spanish at the AES website.

Prospective college students can set up their own internet college application and financial aid calendar at the AES website, and be notified via email or text message about deadlines and upcoming events. Students can customize their calendars and AES account to prioritize what is most important for them.

With many states and lenders pulling back on student loans because of the credit crunch and the hardships faced by state and local government, the AES website can be an invaluable tool for parents and students seeking other resources and possibilities for funding a college education. The AES student loan site pulls together so much disparate but helpful information that anyone contemplating a college or graduate education would be well advised to spend as much time researching the AES site and all their available options as soon and as often as possible.

US Bank Mortgage is the mortgage lending arm of US Bancorp, the parent company of US Bank, which the 6th largest bank in the United States. With over 2500 branches across the US and over 4100 ATMs, US Bank offices can be found close to almost any location in the continental United States.

US Bank Mortgage offers competitive rates on a wide variety of conventional mortgage products. Current rates can be viewed at the Bank’s website at: http://www.usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/interest_rates.cfm

Fixed rate mortgages are available for 10, 15, 20, or 30 year terms, and can be bought down by paying points (or percentages of the balance owed). US Bank Home Mortgage offers three or five year ARMs, also with the option to buy down the rate, and Jumbo 15 or 30 year fixed rate mortgage loans for balances exceeding $417,000 (or $625,500 in Alaska or Hawaii).

Twenty percent down payments are required for conforming and Jumbo fixed rate or ARM mortgages in order to qualify for US Bank’s Home Mortgage division’s best rates. They also write FHA mortgage loans with 3% down, and VA loans with 0% down. It’s refreshing to see such straightforward mortgage terms listed by a major bank.

They also provides lots of good solid general information at their website, such as a clear, simple explanation of the difference between the interest rate and the APR (annual percentage rate), and explanation of how home mortgage interest is calculated, a percentage for estimating origination fees, and the approximate dollar amount of monthly payment per $1000 borrowed for each separate type of mortgage.

Lots of excellent, free calculators are also available at:

http://www.usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/interest_rates.cfm

Calculators include the standard payment calculator, a calculator for determining both how much a buyer can borrow and how much the same buyer can afford, a points calculator, and an ARM payment calculator.

The FAQs page at the website for US Bank Home Mortgage discloses a lot more solid, useful information upfront, a transparency that seems to be in short supply on many other mortgage lender sites.

Explained on the FAQs page are application costs, the difference between preapproval and prequalification, explanation of escrow, PITI, hazard insurance, origination fees, closing costs, and much more:

http://www.usbank.com/cgi_w/cfm/personal/products_and_services/mortgage/faqs/faq.cfm

US Bank Home Mortgage has weathered the subprime loan crisis better than a lot of other mortgage lenders, perhaps because of their more traditional approach to mortgage underwriting. US Bancorp stock has held steady the first quarter of 2008, unlike a number of other financial institutions that are currently all over the map and extremely volatile.

Warren Buffett actually increased his stake in US Bancorp in February of 2008, and analysts have been recommending its stock as one of the few good places in the financial sector to park money. Dick Bove, an analyst at Punk Ziegel recently put it this way, “…these guys were not at all innovative in banking. [U.S. Bancorp] did not become involved with the capital markets activities of their peers. The net result is that few problems are being handed to the current management team. This is a huge benefit in today’s markets.”

While US Bank may not offer all the bells and whistles of some of the more creative financing options that other financial institutions advertise, their rates are quite competitive and their willingness to disclose and explain their policies and procedures is exemplary. When searching for a mortgage, finding a lending institution with that kind of transparency should be as vital to a new borrower as finding a decent rate and palatable terms.

Who is Sallie Mae?  She sounds like someone’s very nice aunt or grandmother, doesn’t she?  Well, actually, she’s the nation’s leading provider of student loans.  In fact, Sallie Mae Student Loans are held by millions of college students.

Like many student loan providers, Sallie Mae is the actually lending institution behind many different federal loan programs.  In addition, Sallie Mae offers private loans that are not federally guaranteed.  This description from their website pretty much sums it up:

Sallie Mae®, the nation’s leading provider of student loans and administrator of college savings plans, has helped millions of Americans achieve their dream of a higher education. The company primarily provides federal and private student loans, including consolidation loans, for undergraduate and graduate students and their parents.

What Sets Salle Mae Student Loans Apart?

Sallie Mae is set apart from other lenders for a couple of reasons.  First of all, it was originally formed as a Government Sponsored Enterprise in 1972.  Although it became a private entity at the end of 2004, there are still close ties between Sallie Mae and the federal government.  This gives Sallie Mae an advantage in its understanding of the federal student loan process.

In addition, Sallie Mae offers more than just funding for college – it offers a wealth of materials and resources on preparing for and, well, surviving college.  Some of the materials available on their site include:

• Selecting a school
• Finding sources of free money
• Financing K-12 private schools
• Saving for college
• Dealing with debt
• Finding a job
• Starting a small business

Perhaps most useful is Sallie Mae’s 1-2-3 approach to paying for college.  This step-by-step program tells you all you need to know to find all the appropriate funds for financing your higher degree.

How Can I Apply for Sallie Mae Student Loans?

First of all, know that if you’re looking for federal funds, you must fill out the Free Application for Federal Student Aid (FAFSA Form), which is available at the Sallie Mae site.  This will help determine your eligibility for certain federal guaranteed loans (that come with favorable interest rates).  Once you are eligible, lenders like Sallie Mae will serve as the administrators of the loans.

If you find that federal student loans are not enough to finance the full cost of your education, you should consider the private loans options available through Salle Mae and others.  While these do not offer the same favorable interest rates as the federal loans, they are still often much better than traditional private financing.  Private loans should be approached with caution.  As the Sallie Mae site puts it:

You should only use private student loans as supplemental funding after you have exhausted all other sources of financial aid, including grants, scholarships, Work-Study, and federal student loans.  As with any student loan, be conservative and only borrow what you absolutely need.

Once you’ve gone through the Sallie Mae student loan process, you’ll be on your way to a college degree!

Wells Fargo Home Mortgage is one of the few large US mortgage lenders to remain profitable and relatively unscathed by the subprime mortgage crisis of 2007 and 2008. The company offers competitive rates on conforming fixed rate mortgage terms of 15, 20, 30 or 40 years, and also on a 5 year ARM, or Jumbo fixed rate or ARMs. Their rates can be viewed at:

https://www.wellsfargo.com/mortgage/rates

Wells Fargo also writes 30 year fixed rate FHA mortgages for amounts that vary according to the location of the property. The website advertises free prequalification for first time homebuyers, and also offers mortgage refinancing, home equity loans, and home equity lines of credit at good rates.

Wells Fargo Home Mortgage does offer a number of “creative financing” options, and it did make quite a number of subprime loans during the housing boom. However most of those mortgages are retained in Wells Fargo’s own portfolio and managed by Wells Fargo Home Mortgage itself.

Because Wells Fargo Home Mortgage does not immediately sell off most of the mortgages it makes, its underwriting tends to be more responsible than some of the more opportunistic lenders that are now struggling with foreclosures, defaults, and other huge mortgage-related losses.

One of the creative financing options offered is a mortgage that starts with a preset interest-only payment period, and then resets to a payment that makes up the lost principal amount. This mortgage is advertised with a disclosure that the reset payment can be much higher than the initial interest-only payment, and the interest rate itself may be higher, depending on the specific loan.

It’s hard to know whether they make a lot off these loans, especially after so many of them failed after the feeding frenzy the preceded the subprime crash, but to the lender’s credit they disclose the dangers in plain English up front.

They also advertise Blended Jumbo mortgages, or what some lenders call “Piggyback loans”; which means a conforming fixed rate first mortgage is written with an adjustable-rate second mortgage tacked on in order to cover the amount that needs to be financed. Another blended financing option is a first mortgage written with a home equity line of credit that is immediately tapped for the down payment on the first mortgage.

Stated income mortgages are advertised on Wells Fargo Home Mortgage’s website. These are mortgages made to people who do not work in ways that can be tracked with a regular paycheck. Retired persons, freelancers, and small businesspersons often fall into this category.

Bridge loans are also an option. Bridge loans are mortgages that cover both a property that is up for sale and a new property so the buyer can move even though the old property is still on the market. Once the old property is sold, bridge loans typically are redone in conventional terms on the new property only.

For buyers who may need some creative options and have a good credit history, Wells Fargo Home Mortgage is a good place to start. Wells Fargo Bank, the parent of Wells Fargo Home Mortgage, is a regional Western and Midwestern full service bank with over 3200 location and 6800 ATMs. To see their full line of products and services, or locate a nearby Wells Fargo Bank or Wells Fargo Mortgage office, visit the website at: https://www.wellsfargo.com/per/more/banking

ABN Amro Mortgage, one of the largest mortgage loan originators and servicers in the United States, was the mortgage lending arm of the international Dutch Bank ABN Amro. ABN Amro Mortgage was purchased by Citigroup in early 2007. Citi Mortgage now hosts a website dedicated to the 1.5 million existing ABN Amro customers it inherited, as well as prospective new mortgage customers at: http://www.mortgage.com/

At the time of the sale to Citigroup, ABN Amro Mortgage was headquartered in Ann Arbor, Michigan and was a unit of ABN Amro’s regional LaSalle Bank.

The mortgage-servicing portfolio was valued at $224 billion when it was purchased, although the purchase price was not disclosed. An additional $9 billion in other ABN Amro assets was included with the sale.

AMN Amro was the result of a merger of two Dutch banks in 1990: ABN, and Amro. The history of the two banks dated all the way back to 1924. From 1991 through 2007, the merged bank, ABN Amro became one of the largest banks in Europe. Then in October of 2007, the Royal Bank of Scotland, Fortis, and Banco Santander together made an offer on the Dutch Bank, and by November 2007 the three European banks had acquired 97% of ABN Amro’s stock, making the purchase the largest bank takeover in history.

LaSalle Bank, which was once the wholesale lending arm of ABN Amro and for a time included the US ABN Amro Mortgage division, was sold to Bank of America in October of 2007. Today, Bank of America own LaSalle Bank, and Citigroup owns what used to be ABN Amro Mortgage.

If that sounds confusing it might be because toward the end of its life, ABN Amro was a huge financial institution with a complex organization. The current CEO of ABN Amro is Royal Bank of Scotland’s Mark Fisher. ABN Amro, the European bank, is being reworked and reorganized to steam line and refocus operations.

At the same time, Citigroup is now busy divesting itself of its mortgage holdings as quickly as it can, and drastically reducing the number of new mortgage loans it makes. Not long after purchasing ABN Amro Mortgage, Citigroup experienced huge losses as a result of the US subprime mortgage crisis, and had to seek a cash infusion to stay afloat, which it did finally get from the Arab nation of Abu Dhabi.

Citigroup replaced its CEO shortly after posting the heavy subprime losses with Vikram Pandit, who immediately combined the new acquired ABN Amro mortgage portfolio, the subprime lending arm of Citigroup called Citi Financial, and Citi Mortgage, all under the umbrella of Citi Mortgage.

Citi Mortgage eliminated 2,000 jobs in March of 2008, and intends to reduce its entire mortgage portfolio by 20% or $42 billion by the beginning of the third quarter.

Changes in the banking industry, and especially in the mortgage industry, have been coming fast and furious over the past several years, and will likely continue as financial markets attempt to stabilize and recover from the subprime fiasco.

European bankers had been speculating about a merger or acquisition for several years before the takeover of ABN Amro by RBS, Fortis, and Banco Santander. Ironically, Citigroup has been the topic of similar gossip for a number of years in the US. Some analysts feel Citigroup has grown much too large and too complex to be effectively managed as a single financial entity.

Wall Street will be watching Citigroup CEO Vikram Pandit closely to see if Pandit, formerly the President of Investment Banking and Institutional Securities at Morgan Stanley, will be able to streamline Citigroup and refocus it so as to make it a profitable, manageable financial entity.

High risk loans are loans that put the lender at increased risk of losing the money that is loaned out. Loans made to borrowers with poor credit are the most common type of high risk loan.

Typically these loans are for four figure amounts or smaller, and the terms are less than ideal. The fees will generally be high, the interest rate will be high, and stiff penalties for late or missed payments will be part of the loan contract.

These loans are easier to get if the borrower has collateral, that is, property that the lender can lay claim to should the borrower default on the loan. High risk loans that require collateral are called “secured” loans.

One common type of small, secured high risk loan is a secured credit card. The person applying for the card deposits money in the financial institution issuing the card to “secure” the debt. The money on deposit cannot be withdrawn. The borrower makes payments at a high interest rate to show that he or she can be counted on to pay on time. The intent is to rebuild good credit so that later on, the borrower can qualify for a better rate.

Some high risk unsecured loans are quite bad and should not be used, ever, period. Payday loans are a good example of this.

A payday loan shop will promise to hold a check written from a personal account until the borrower’s payday, at which time they cash the check, with a fee. The fee commonly amounts to an APR of up to 400%, and if the borrower can’t pay back the loan on the pay date, the amount owed increases rapidly.

“Usury” is a term that means the loaning of money at a rate above what is legal. While payday loan shops are often legal, their rates are so far above what is customary they are clearly usurious.

Secured high risk loans are somewhat easier to get, although that has probably changed in recent months with the rash of defaults on subprime mortgages and home equity lines of credit. Lenders have been pulling back even from the safest loans in 2008. For a period of time, even customers with stellar credit could not qualify for mortgages, and it is not likely that creative financing terms will continue to be popular.

High risk loans are not always good for the borrower either. Sometimes the best thing you can do when your credit has gone bad is to examine why it happened and start the slow process of rebuilding.

Borrowers should be extremely wary of loan terms that sound great when they know they are high risk. The lender could be hiding any number of unpleasant terms and conditions that in the long run will do much more damage to the borrower than the lender.

If you must look for a loan and your credit is bad, try to stick with reputable lenders that require some kind of collateral. Be scrupulous about making payments on time and keep working on whatever problems caused your bad credit rating to begin with. High risk means just what it sounds like: Both sides should proceed with caution.

Karl’s mortgage calculator, available at http://www.jeacle.ie/mortgage/, offers so many pertinent features for analyzing mortgage financing and repayment options that it’s hard to quit playing with it. That’s a good thing; because it makes understanding different mortgage terms and conditions easy to see and understand, even for a novice. All mortgages are not created equal, and Karl’s mortgage calculator helps anyone to clearly see the differences quickly and easily.

The calculator is split into three sections for ease of use: sliders, graphs and tables, and input boxes.

If a quick snapshot of your estimated monthly mortgage payment is all you think you really need, the slider function on Karl’s mortgage calculator makes your task easy and quick. The slider function is set with your payment amount as the default option, so all you have to do is slide the mortgage term in years to the correct number, choose the start month, and enter your principal amount and your projected payment appears instantly on the payment slider.

The fun part of Karl’s mortgage calculator however is the table and graph sections. By plugging different numbers into the input boxes, you can see exactly when your principle payments will be larger than your interest payments, and how much interest you will pay over the life of the loan depending on how you set up the mortgage term. The graphs and tables also show how prepayments or extra payments impact your final payoff date, and even how an adjustable rate will play out over the life of the loan.

It’s one thing for someone to tell you that you pay less interest on a fifteen versus a thirty year mortgage. It’s quite a different experience to see the numbers right in front of you with illustrations to make them easy to understand. Thinking about numbers can be confusing when shopping for a mortgage, but as the saying goes, a picture is worth a thousand words.

Karl’s mortgage calculator instantly creates graphs and tables that show the interest in red, the principal in blue and extra payments in yellow, so you can see at a glance how your mortgage is set up. Individual payment breakdowns are available in standard amortization schedules, which are also presented at the click of a mouse. The net result is a user-friendly mortgage tool that teaches a novice more about mortgages in a few minutes than an afternoon seminar, yet is sophisticated enough for financial experts to use and enjoy too.

The amortization charts created by Karl’s mortgage calculator rely on a standard amortization formula which calculates mortgage interest once a month. Although this formula is commonly used worldwide, as Jeacle points out, some financial institutions now calculate interest on mortgage on a daily basis.

This information on how amortization is calculated is valuable even to a first time consumer, since it creates an opening for asking questions of if the payment amount created by Karl’s mortgage calculator differs significantly from the one provided by the bank or broker estimate. A good lender will try to be as transparent as possible in regard to its lending practices. If you don’t get clear answers to direct questions that alone is a sign that it might be time to shop around a bit more.

Karl’s mortgage calculator is available in fifteen different languages and is a Java based program. If you don’t already have it, you can download Java at http://java.com/ . Canadian mortgages are charged interest once every six months in stead of once every month. A formula for converting US estimated payments to Canadian ones and vice versa is also included at the website.

A variety of other good financial calculators created by Karl are available at: www.drcalculator.com, and include a standard ‘how much can I afford’ mortgage calculator, a balloon payment calculator, a prequalification calculator, and a variety of other useful money tools.

Under the Fair Credit Reporting Act, or FCRA, you are entitled to one free credit report each year from each of the major credit reporting agencies: Experian, Equifax and TransUnion. A copy of your free report can be obtained by visiting a central website the reporting agencies have set up especially for this purpose, www.annualcreditreport.com . You can also call the toll-free number associated with this website to order your free reports, 1-877-322-8228.

If you prefer to mail a request for your free annual credit report, you can print a request form out at the website and send it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can request all three at once or choose only one agency.

Requests for reports that are made online are usually filled immediately. In other words, if you request your free annual credit report at the website www.annualcreditreport.com you will in most cases see your report right away. You will be asked for your name, social security number, and address. If you request the report by phone or mail, the turnaround time is approximately 15 days.

You can also pay for additional reports by visiting the website of the credit reporting agencies themselves or calling them:

• Equifax can be reached at 1-800-685-1111 or by visiting www.equifax.com
• Experian can be reached at 1-877-397-3742 or by visiting www.experian.com
• TransUnion can be reached at 1-800-916-8800 or by visiting www.transunion.com

Unfortunately, lots of copycat websites promise free credit reports and lead the visitor to think that the reports are free, which in actual fact the consumer who visits the site and fill out the request is signing up for a paid service.

If you think you have been a victim of fraud by getting charged for a report you thought was free at one of these websites, you can file a report against them at the Federal Trade Commission website www.ftc.gov . You can also file an affidavit of fraud at your bank or credit union, and they will help you recover the money and get it back into your account.

Checking your credit report once a year is a good idea. Banks, insurance companies, mortgage lenders, and other businesses that extend credit and make loans rely heavily on your credit report to help them decide whether to loan you money and how much to charge you for it.

Mistakes can be made on the reports, and you can start a process of correcting any errors you see by writing the reporting agency within 30 days of finding incorrect information on the free report. Many victims of identity theft do not realize their identities have been stolen until they see a loan or debt they do not have as a negative item on their credit report.

Another good reason for knowing what is on your credit report is that if you know what is negative and on the report, you can take steps to prevent negative items in the future.

Especially damaging are late or skipped payments on credit cards or unsecured lines of credit, defaults, bankruptcies, and having much more debt than you have income. Negative items stay on your report for ten years, so eventually they do fall off and your credit will begin to improve. Knowing your credit score will protect you from fraud, help you to understand how lending and underwriting works, and allow you to begin to take control of your financial life.

The 1040 Tax Form is the standard federal income tax form most people use to file their taxes. Anyone can file federal income taxes using this form, but some people who have few or no deductions to claim can benefit from filing the shorter versions of the form which are form 1040A and form 1040EZ.

The 1040 tax form can be picked up at most post offices or local libraries, at tax time, at an IRS office or tax center, or downloaded or ordered by mail at the IRS website at http://www.irs.gov/formspubs/lists/0,,id=97817,00.html.

People without access to the internet can order the form sent to them by mail by calling a toll-free IRS automated phone menu at 1-800-829-3676. Taxpayers who routinely mail in their tax returns each year will receive a 1040 tax form and instruction booklet by mail automatically for the next calendar year.

Lots of information is available online about your 1040 tax form and what to do with it:  for example, what deductions are available, how to qualify for deductions, which additional forms you may or may not need to claim various deductions, when to seek professional help in preparing your return, when to use the simpler 1040A or 1040EZ forms, and which receipts and records to keep throughout the year to back up and maximize future deductions.

About.com is a good resource for basic information on all sorts of topics. Their webpage regarding the 1040 tax form is at http://taxes.about.com/od/preparingyourtaxes/a/1040.htm.

The IRS also has a webpage devoted specifically to all issues concerning income tax filing with the 1040 tax form called “1040 Central.” The 1040 Central IRS page is available at http://www.irs.gov/individuals/article/0,,id=118506,00.html.

Included at the IRS 1040 Central site are instructions on how to set up direct deposit for your federal tax refund, details on the Alternative Minimum Tax and how to determine if this tax affects you,  details and explanations of tax law changes, links and instructions for free e-filing through the IRS, info on the 2007 tax rebates and tools for checking on the amount and status of your rebate and how to determine if you are entitled to one,  and helpful tips for how to choose a tax preparer if you need more help.

A particularly useful page that can be accessed from IRS 1040 Central is http://www.irs.gov/advocate/article/0,,id=98206,00.html which explains your rights as a taxpayer and how to contact a tax advocate if you need one, civil rights protections in place regarding your tax obligations, and how to locate and get help at a low-income taxpayer clinic in your area.

Keep in mind that, although lots of help and information is available at commercial sites like 1040.com, e-filing your taxes is only completely free if you do it through the IRS website. Use the calculators and tools at the commercial site, but don’t use the commercial sites to actually file.

Some good 1040 tax form calculators and tools are available at:

• http://www.1040.com/site/TaxTools/tabid/63/Default.aspx
• http://www.bankrate.com/brm/calculators/tax/1040ez_tax_form_calculator.asp, and also at
• http://www.dinkytown.net/java/Tax1040.html.

You can even view a good two-minute instructional video on how to fill out a standard 1040 tax form at YouTube at http://www.youtube.com/watch?v=5e3yyLsdZx0.

Hi Everyone,

Here are some carnivals that we participated in a few weeks ago.  There have been fantastic contributions at every carnival, so head on over and pay them a visit.

- Carnival of Personal Finance #171 (The Celebrate Fall Edition) was hosted by Sound Money Matters and you can find our post entitled EMC Mortgage: Guilty As Charged! listed there.

- Finance Fiesta #17 (The Buzzer Beater Edition) was hosted by Mighty Bargain Hunter and you can find our post entitled Funeral Services Are Being Held For Lehman Brothers, AIG & Merrill Lynch listed there.

- Money Hacks Carnival #31 (The Crisis and Bailout Edition) was hosted by Moolanomy and you can find our post entitled Hypermiler In The Making listed there.

- Festival of Frugality #144 (The Host Bailed Out Edition) was hosted by My Two Dollars and you can find our post entitled Pampers Coupons Comes In Handy If You Are Diapering Sextuplets listed there.