What consumers did realize though is that requesting a mortgage modification, even if not in foreclosure, could negatively impact credit ratings. This has angered consumers trying to do the right thing and discovering they are penalized anyway for years to come. People in foreclosure are not surprised to find their credit rating lowered due to late payments. But even consumers who have not made any late payments are finding their credit scores lowered by asking for modifications to their current mortgages.

According to the logic of lenders and credit rating agencies, anyone asking for a modification is indicating they are having financial problems. The credit score can drop by as much as 100 points when a temporary mortgage modification agreement takes effect. It does not drop again when the temporary agreement becomes permanent. But consumers who apply for the loan modification program and are not approved will see more than 100 points drop off their credit score.

The drop in the credit score affects the ability to get credit for years. Housing counselors agree with consumers that the negative credit scoring is not fair. Homeowners were not told their credit ratings would be impacted before applying for the modifications. Consumer advocates believe consumers are being punished even though they are acting responsibly and trying to stave off mortgage defaults.

Lenders like to point out that the loss of credit points is much less under the modification program than it would be due to foreclosures. A foreclosure can cost 150 points or more, but that is really little consolation. Already feeling victimized by the banks, consumers now feel victimized by their own government.

Lenders believe that the credit point drop is justified because consumers asking for loan modifications are obviously in financial trouble. The lenders believe the lending market should be aware of the consumer’s true financial status. If the credit score was left unchanged, borrowers would still qualify for loans they cannot afford.

The Obama “Making Home Affordable” program has been an enormous disappointment. Meant to help a million homeowners, only 170,000 have actually found assistance as of February. Many of the applications are bogged down due to missing documentation and mortgage companies dragging the process down through delays. The Obama administration has tried to put pressure on lenders to speed up the process, but to date the efforts have been largely unsuccessful.

The discovery that credit scores can fall even when not in mortgage default was yet another blow to embattled consumers. The Treasury Department and the banks offer little advice other than to say that paying bills on time in the future will lead to higher credit scores.

The Virginia State Corporation Commission has proposed regulation changes that are intended to stop what it considers unfair or misleading practices by title lending companies. Some consider these proposals to be unnecessarily harsh and unfair.

The State Corporation Commission has proposed the following regulation changes. First, it wants businesses accepting car titles in exchange for loans to send those titles to the Department of Motor Vehicles. This is so the lien against the title can be recorded at the state level.

Second, the state wants to limit loans against car titles to one. In other words, consumers could only borrow money if there are no other credit lines secured with the auto title.

Third, the state wants loan businesses that are operating with payday loan operations to have to follow the same regulations. This refers to car title businesses and payday loan businesses that share the same space.

The reason the state wants a borrower to surrender the car title is because that makes it clear to the consumer the car title now has a lien on it. It is a physical act that clearly reminds the borrower the car can be repossessed in the event the loan is not repaid.

Not everyone is happy with these proposals. The vice president of the Community Financial Services Association of America is Tommy Moore. He said, “Such a regulation is unnecessary and unduly burdensome.”

Though the purpose of the legislation is to prevent people from obtaining loans under false pretenses, some people feel the proposed regulations are unfair and violate the intent of the payday loan law.

The payday lender laws in Virginia do not prohibit car title loans. But there is a group called the Virginians Against Payday Loans that believes there should be tighter controls placed on the auto title loans and other small loans with high interest rates.

Some people view the payday loans and the auto-title loans in the same light as they view gambling. They believe these kind of loans prey on desperate people who should not be borrowing money just like gambling attracts people who cannot afford to gamble. By eliminating loans on autos that already have loans against the title there is much less opportunity for lenders to lure people into borrowing money.

In addition, if the lien against the title is not reported, it is possible to sell the auto as if it has a clear title. When a car is purchased at a dealer, the loan company keeps the title until the loan is paid off. The state regulations would have the state performing an equivalent role when the loan is made by an auto title lender.

Opponents of the new state regulations believe that payday and auto title loans serve an important purpose. These types of loans make credit available to people who could not get loans elsewhere.

What seems particularly aggravating for American consumers and taxpayers is the fact that the government has not only been bailing out the automakers, but also the auto lenders, who arguably caused a lot of the problems now facing the United States. This is the third round of bailouts for auto lender GMAC. The bailout total for GMAC will top $25.5 billion so far.

The key difference between this bailout and the bailout of banks is that the banks appear to be stabilizing and making profits again, whereas domestic automakers are still in financial turmoil. Perhaps the best case to be made for bailing out the auto industry, though, is the fact that automakers and auto lenders provide so many jobs in the US, and allowing them to go bankrupt at a time when unemployment has nearly topped 10% would be irresponsible.

In addition, news recently broke that the federal Cash for Clunkers program managed to get just under 700,000 vehicles sold. It is estimated that taxpayers paid $24,000 per car for the program.

Apparently, only 125,000 of the total vehicles sold were ones that would not have been sold anyway, according to automotive website Edmunds.com. On the heels of news about third quarter GDP growth of 3.5%, approximately half of that GDP growth can be attributed to automotive sales, and a large percentage of those sales can be attributed to the Cash for Clunkers program.

The motivation for selling cars under the Cash for Clunkers program was to get up to $4,500 in rebates to trade in a less fuel-efficient “clunker” for a new vehicle that met certain fuel economy standards. This was intended both as a way to jumpstart the sagging automotive sector and to improve vehicle emissions across the country.

Based on Edmunds.com and its analysis, even though the rebate was only $4,000 on average, the fact that most of the sales would have taken place anyway undermines the success of the federal program. Had the Cash for Clunkers program not occurred, Edmunds.com posits that October sales would have been higher than they currently reported.

Naturally, there are multiple ways to look at both the bailout of the automotive industry and the outcome of the Cash for Clunkers program. The ultimate goal of both programs was to stabilize an economy that has been crippled by a housing crisis, high unemployment, a credit crunch, and the financial struggles of large institutions. Whether these programs have succeeded or not is hard to say, but the real question that should be on Americans’ minds is: Are these programs temporary fixes, or have they truly helped us to put the worst of this recession behind us?

Either way, news has looked up recently. With GDP growth the highest it’s been in the past several quarters and a stock market rally, times do seem to be looking up. Whether the growth is a fluke caused by government stimulus or a foundation from which the economy may continue to recover, only time will tell.

For example, before the recession many people were sold mortgages with variable interest rates they believed were backed by the federal government. Others bought houses with mortgages that had affordable payments the first few years and then the payments skyrocketed at some point. Still other consumers took on loans that had them paying only interest payments and when housing prices fell they were sitting there with an overvalued home and no equity.

What has come out of the near collapse of the mortgage industry and the selling of toxic assets is the fact many consumers did not fully understand their mortgage agreements. You might be telling yourself this the fault of the consumer, but at a mortgage closing, pages and pages of fine print documents are presented that are all written in legal language. Unscrupulous lenders would conveniently leave out important information in their verbal explanations too.

The new rules that are in affect now make it necessary for lenders to be more forthright in their loan explanations. They also forbid twisting the truth by not telling the full story. For example, lenders can no longer say a loan has a fixed interest rate if the rate will actually change at any point during the life of the loan.

Another new rule requires all fees and charges attached to the mortgage to be clearly stated in an understandable format. It is amazing how much critical information is literally buried in fine print. The lender will have consumers initial each page of the agreement and that’s how they were getting away with adding all these charges without the consumer even knowing.

The rules also address loan advertising. Advertisements for mortgages can no longer use misleading language to give false impressions to consumers as to eligibility or as to how the loan is structured. If there are special loan conditions those conditions must be clearly stated. In addition, when different types of loans are compared to calculate various payments, the comparisons must be done fairly, accurately and honestly.

Even more important is the fact that lenders are no longer allowed to extend credit until the consumer’s ability to repay the loan is fairly assessed. This addresses the fact that many people in foreclosure today have loans they should have never qualified for based on their income and assets.

So what is predatory lending? Predatory lending can take many different forms, but the bottom line is that it is when a company uses false information to qualify people for loans. The false information could be false appraisals or false income statements or creating false expectations or presenting false facts.

Predatory lending is also when a loan is approved that should never be approved if reasonable standards are applied. For example, the figures are manipulated to make consumers loan eligible or second mortgages are approved that over commit the property.

Many of the “under water” homes that exist today have multiple liens against them such as a first mortgage and an equity loan. When housing prices dropped and wage earners lost their incomes due to unemployment, many of the equity loans had been fully accessed leaving the owners with payments they could not afford and unable to sell the house for enough money to pay off the loans.

Predatory lending also involves convincing people to refinance property when it is not in their best interests.

These are not all of the predatory lending tactics used by debt suppliers, but it gives you a good idea. The US Congress is determined to prevent the mortgage bubble that collapsed from ever forming again. Before signing any dotted line it is important to clearly understand the debt you are assuming. The new predatory lending laws should make that much easier to accomplish from this point forward.

The national driving survey polled more than 5,000 licensed U.S. drivers. The results have served as a confirmation in the eyes of many industry experts that less may really be more. The Federal Highway Administration has reported that Americans have traveled up to 112 billion miles less in the last 13 months.

The GMAC survey has shown a variety of reasons why consumers are driving less. For example, worry about the economy has accounted for 74% while effort to lower financial costs accounted for 24%. About 33% cited a desire to lower their environmental impact. There were 26% who said they wanted to drive less to help maintain the vehicle’s value. Another 11% said they planned to drive less so they could receive a discount on their car insurance.

The bottom line is that no matter the reasons, GMAC has decided to reward those drivers who are currently altering their driving habits, or who want to help the environment or economy by offering Pay-As-You-Go insurance options.

Such programs provide benefits for those drivers who have already instituted a new driving approach, the biggest of which is lower premiums for their coverage. GMAC’s survey has noted that 35%, or one in three drivers, would sign up for Pay-As-You-Go insurance if their insurer provided the option.

For those interested in GMAC Insurance’s Low-Mileage Discount, the only thing drivers have to do is opt-in and let their savings begin automatically. The discount is available to all eligible and active OnStar subscribers who are driving less than 15,000 miles a year. Depending on the miles driven, they may save up 54% for their insurance coverage

More consumers are also availing of online financing companies, which cater to potential car buyers by offering better deals even when you do have weaker credit. It is an effort to help the economy bounce back and give would-be car buyers a second chance at also improving their poor credit ratings.

Most of the time, if you follow a few guidelines you can obtain the sort of lower rates that making purchasing that new vehicle a possibility.

Other lenders make it harder to get financing to protect themselves from losses like defaults on the loans they make. They will look at a poor credit history and see the negatives. It will show them whether you are an acceptable risk to receive funds for an auto purchase.

In order to facilitate more auto purchases, a number of lenders have actually relaxed their normal regulations despite the risks involved. They wager that if they make the process easier and provide doable rates, that more buyers will have an opportunity to get a vehicle – and the more likely they will be to pay for it.

This does not change the fact that consumers with bad credit must pass some bear minimum requirements in order to receive financing. Lenders are not giving the money away after all.

For instance, the borrower must prove their credibility to repay the monthly installments.

When borrowers with bad credit browse the market for auto financing, there may only be a few lenders that offer them loans for cars. This makes the web a valuable time saving tool.

Online lenders have many subprime auto lending options available as a part of their coverage networks. This allows you to find a loan that specifically accommodates your credit type and gives you access to better interest rates.

Even though the program is has now ended and yielded approximately 700,000 sales, the critics point out that Cash for Clunkers did stimulate economic growth but rather redistributed wealth and saddled gullible consumers will new debt loads they can’t manage.

Some opponents of the program suggest that Cash for Clunks will cause more harm to American consumers that good. According to these groups, the less fortunate among them may find themselves in worse financial shape as a result of jumping on the supposed deal.

But, is this gloom and doom at all accurate?

With all the supposed reports circulating around about the program’s debilitating effects on new car owners, you may be surprised by some of the following facts about the typical Cash for Clunkers deal. What’s clear is that there is a bit of exaggeration on the part of one group.

For instance, one the most common vehicles that qualified for a trade in was the 1998 Ford Explorer. If you had one of these and traded it in for a brand new Ford Focus, you could earn a credit worth $4,500, which would lower the MSRP on the Focus to about $11,500. With a down payment and some good negotiation for an additional discount, you could see about $10,000 in financing.

That’s for a four-year loan at approximately 7.5% interest. This would mean that your monthly payment would be below $250 a month. This is a far cry from the burdensome payments that have been suggested by the critics.

The bottom line is that the Cash for Clunkers program has been a legitimate help to the U.S. economy. It has given more people the opportunity to purchase affordable, lower-emission, and higher-MPG automobiles.

The new deal is still in the developmental stage, with many of the terms under consideration by Bank of America executives and other parties privy to the development of the program.

According to the latest reports, a deadline has been set for September 3 for interested investors to put in their requests to purchase asset-backed debt as part of the Federal Reserve’s latest distribution of its touted Term Asset-Backed Securities Loan Facility or TALF.

Insiders have stated that the Federal Reserve is relying on the TALF program to reduce the overall costs for borrowing and remove the restrictions that are currently block the flow of credit to consumer sand small businesses across the country.

The program has as much as $200 billion in loans available to finance the purchase of asset-backed securities that are a big part of new consumer and small businesses financing loans.

The Federal Reserve is hoping that this latest measure does the trick and provides the incentive needed for continuing the long journey to economic recovery and the revival of the country’s important credit markets.

U.S. consumers and small businesses alike are holding their collective breath regarding the reissue of the TALF program. Bank of America represents just one substantial interest in the development and success of the Federal Reserve program. The sales of bonds backed by auto loans are just one of a several proposed asset-backed securities deals that are in the works.

The line of investors includes a number of big companies as well as individuals seeking to play a small part in getting the United States economy going strong again.

Within six years, American automakers will be able to produce 2.71 million small cars a year in North America alone. This would increase from the current 1.66 million today. The capacity will increase to 7.5 million cars from the current 4 million.

The fact remains that consumers may simply not be ready for such an overflow of small automobiles that will eventually hit the market.

Any projections aimed at small vehicle purchasing indication that sales figures by 2015 would have to increase by almost twice the current annual record to account for the new output.

All of this pushing for smaller vehicles is being driven by the federal mandates that fuel efficiency increase by 40% to an average of 35 mpg by 2016.

The sales of small automobiles currently occupy 18.1% of the total U.S. market as of last year. This rose from 15% back in 2007. One company estimates that the small car’s share of sales may increase to 22.3% in 2015.

At that estimate, the total auto market would have gone beyond 33 million vehicles in order to compensate for an annual production capacity of 7.5 million small cars.

Between now and 2015, small-car production capacity will rise 58% to 1.35 million at GM, 61% to 870,000 at Ford, and 83 % to 495,000 at Chrysler, according to one analyst.

The numbers of compact and subcompact models in the United States should reach 46 by 2013. In 2005, there were 28 models; last year, the total was 36.

Currently, GM is still in the process of establishing firm guidelines and ironing out the details of its vehicle-leasing program. In the beginning, the program would be limited to a select number of General Motors’ higher profile models, such as the Cadillac CTS.

A spokesperson from General Motors did not immediately confirm the automaker’s plans, but was able to provide a few hints regarding studies that have been conducted to find ways to reinter leasing in the upper end of the vehicle market.

General Motors has been in discussion regarding various proposals that would allow for more leasing options via banks, including GMAC.

One unnamed executive privy to the decision-making process said the following: “Credit is easing, banks have capacity and residual (vehicle) values have been steadily increasing.”

GM has not be idle but has play a serious role in making leasing possible again by attempting a variety of measures, including the increase of transaction prices on the new cars and trucks it sells. This example would help to stabilize the resale values of its vehicles.

With its leasing efforts limited to the Cadillac, General Motors would be making its first hesitant steps back into a style of financing that is entirely focused on those who are able to afford luxury automobiles, as well as buyer of costly sport-utility vehicles.

General Motors was forced to withdrawal from the auto leasing markets back in August 2008 when it had to compensate for losses on vehicle resale values. It was a move that left the market open to other automakers to cut a more competitive edge when looking for customers who want vehicle leasing. Before it pulled out of leasing, GM leased approximately 20% of all new cars it sold.