Subprime Mortgages – How should a good mortgage be now?

In this section, we will summarize what the subprime mortgages of the United States were and why they were so controversial, although we noticed that it was a very complex situation. To understand it well, we must first know that the US mortgage system is different from Spain’s. There, the mortgages are categorized according to the profile of the applicant: the entities have a rating scale and award points according to the level of income and solvency of the client.

Since only those who fulfilled certain requirements could obtain mortgages, in the early 2000s the lenders saw a gap in those people who did not meet the minimum requirements but did not pose a risk to them, since the money came from private investment funds. So, to generate more income, the profile of people who could get a mortgage was broadened. The normal thing was to have a rating above 800 and subprime mortgages were granted to people who qualified below 620 points.

Little by little, banks accumulated a large number of subprime mortgages. So that they did not affect their balance, they decided to sell them to Wall Street investment funds. To place all those subprime mortgages, some with the highest delinquency rate were grouped in the same package with some safer ones. Thus, the mortgage packages seemed easier to sell and perceived as an attractive investment. In addition, nobody believed that the price of the house fell, so if the mortgage was not paid, by selling the house they would recover the investment.

The packages with lower risk were sold to institutional investors such as insurance companies, pension funds, banks and foreign governments. On the other hand, the mortgages with the highest risk of what Wall Street banks were left with. These mortgages, having a higher delinquency rate, also applied a higher interest, which generated more performance in the beginning.

However, this situation was not sustainable and investors began to perceive alarm signals: the interest on mortgages was increasing, but so was the mortgage delinquency, so they did not earn money with them.

Finally, those who had applied for all these subprime mortgages could not continue to face the debt and had to return the house. The rest of the history we know: nobody wanted to predict what would happen and the housing bubble burst.

The term subprime does not refer to the type of mortgage granted, but to the rating that these “investment packages”. The term “prime” means “excellent” in English, rating awarded to investments with maximum guarantees. Qualifying these mortgages as subprime was a way of indicating that although they did not have the same quality, they did not represent a significant risk.

Characteristics of junk mortgages

Characteristics of junk mortgages

 

In the United States, banks only lent to a solvent mortgage profile, so they could not grant mortgages to people with economic situations that were below a minimum threshold. In this way, they delegated the sale of mortgages to financing entities or brokers. They did lend money to people without stable income and, in many cases, they did not even have an indefinite or full-time work contract. For this reason, the characteristics of a subprime mortgage were different :

  • As the risk of those who lent the money was higher, the interest was higher, in general, between 1.5 and 7 points higher.

  • They used to include more commissions than for a normal mortgage.

  • Financing exceeded 80 %, sometimes even more funding could be obtained than with a 100 mortgage since the applicants did not have enough savings to open the mortgage.

What would a good mortgage be like?

What would a good mortgage be like?

 

In order not to repeat the mistakes of the past and the banks to grant mortgages again, we define below the characteristics that a good mortgage should have:

  • An interest that suits what the market offers at that time. Currently, for a linked mortgage we should not accept more than one interest of Euribor + 1.25% for variables and 3% for fixed. If we do not want to link with the entity, the interest should not be higher than 2.50%.

  • A financing that does not exceed 80%. In this way, the risk for both the bank and the mortgaged is much lower.

  • Without abusive clauses. The contract should not include either the floor clause or very high late payment interest. Justice is trying to end the abusive clauses that harm the mortgaged and also do not understand what they are.

  • With the flexibility of payment so that the mortgaged can comfortably assume the installments and in case of any unforeseen event, the bank provides options so that it does not have to end up seizing the home.

Mortgage profile now

The garbage mortgages have disappeared from the catalogs of the banks, which have in fact hardened their requirements so as not to suffer the wave of defaults that occurred during the hardest years of the crisis. Therefore, if we want to do with a mortgage in 2018, it will be essential that we meet the following conditions at least for an entity to be willing to accept our request:

  • Sufficient savings of 35% of the value of the home, that is about 35,000 euros of each 100,000 mortgage. 20,000 euros will go to pay the part that the bank does not finance, and about 15,000 euros, to assume the management costs of opening a mortgage and taxes. We can only achieve a 100% financing in case of acquiring one of the floors of banks, homes that in the past have been foreclosed and that are now owned by the entities.

  • A stable and better job if it is in a booming sector. In addition, the minimum monthly income should be about 2,000 euros.

  • Do not borrow beyond the possibilities of each, that is, not allocate more than 35% of monthly income to pay the mortgage.

  • Do not appear in any ASNEF or RAI delinquent record and not have failed in any payment of any other loan.

Use the Help My Cash guide to get the best mortgage

Use the Help My Cash guide to get the best mortgage

 

The guide on how to request a loan prepared by the experts of Loans-n-Loans.com can be of great help for the negotiation of the loan. The guide contains 25 key questions to ask the entity before signing the contract. In this way, we will know exactly what we commit to before signing. In addition, in the guide, we will find tips to get a cheap mortgage.

These financial products are complex and contracting them involves a very high debt in the very long term. Therefore, the experts of HelpMyCash.com have developed this useful practical guide in which the following keys are given:

  • What do the technicalities that banks use to describe their mortgages mean?
  • What are all the dangerous or abusive clauses that we should avoid
  • How can you calculate if you can afford the mortgage contract?

Video games 'made in Barcelona'

It is one of the most powerful cultural industries in the world.

It is one of the most powerful cultural industries in the world.

And it’s still going to grow much more. It is not strange that the market is hectic. It is a global cake of 80,186 million euros and so far this year the giant of leisure and communication Vivendi (Canal +, Universal Music) has launched hostile opas against large videogame companies such as Gameloft – which has already acquired- and Ubisoft , which for now resists. And Activision Blizzard has been made for 5.9 billion euros with King, the creator of the popular mobile game Candy Crush.

the videogame sector, with 1,083 million euros of turnover in 2015

the videogame sector, with 1,083 million euros of turnover in 2015

adds more than cinema and music sales together. In the entire state there are 15 million video game users, the fourth largest European market. However, it is only the eighth developing country. Public institutions and some investors have begun to support this industry that creates jobs of high qualification and wealth, but there is still a huge way to go and is the weakest flank for the growth of the sector. And, even so, in the Catalan capital there are already some videogame companies that look like they were taken from a film about Silicon Valley. Horacio Martos, CEO of Socialpoint , a Catalan company specialized in mobile games, believes that Barcelona can become a big hub of the videogame in the coming years.

Socialpoint demonstrates: it has eight floors in a modern building of 22 @ that welcomes 280 workers and invoices more than 120 million dollars a year with games such as Monster Legends, Dragon City, Dragon Land or World Chef. Games that succeed in the world, because only 1% of the firm’s revenues come from the Spanish market. Entering the Socialpoint building is entering a universe where talent is pampered and creativity is fostered in ways that in other companies are mere science fiction. Half of a plant is dedicated to a fabulous gym with physiotherapist and the other half to a games room, where there are from musical instruments to giant screens, machines of the million and … a hairdressing salon. Among the social benefits of the company there is even medical insurance for pets. 30% of the workforce is foreign and their average age is 30 years.

Martos founded Socialpoint together with Andrés Bou with 60,000 euros from a family member in 2008. “We were in France studying a master’s degree and the idea of ​​making a video game on Facebook came up. At that time there were very simple videogames for this platform and we saw the opportunity to create more complex, deeper and more social ones. Then there were very few people making video games in Barcelona and in almost ten years the sector has changed a lot. Today Barcelona has ten very important companies and 50 start up, a lot. The sector grows a lot. We would like it to be faster, but we are convinced that Barcelona will become a video game hub in the next five or ten years, because more and more global companies are betting on it, as there is a lot of talent “.

Of course, he says: “When I compare Barcelona with other cities in the world, the most important difference I see is government support. We have never received help and although now small businesses are given some credit, it is not a strong, solid and convinced bet. There is no such philosophy that technology start-ups have to be what makes the economy grow. And when they work, they generate very high quality jobs. Then, hiring foreign people is very complicated; a huge mistake, because you have to be able to bring experts from outside to grow the talent here and the ecosystem continues to grow. I would like it to be easier because people want to come to Barcelona, ​​it is very attractive to live and develop and many international companies set the goal of opening studios, branches, in it “.

Socialpoint has 20 million active users per month, five million per day.

Socialpoint has 20 million active users per month, five million per day.

He left Facebook for mobile phones and his income model is free to play, in which the biggest players make payments of 1 to 50 dollars for special elements within the game. Games that take between one and two years of development by teams of fifteen to thirty people and cost several million euros.

The competition of Socialpoint is in Barcelona itself with King, whose offices are located on Tarradellas Avenue and L’Illa and employing 500 workers. David Picón landed in 2012 as team leader in this center of creation and development of video games for mobile phones that this multinational born in Sweden and creator of the popular Candy Crush opened in Barcelona. And he points out that three very successful games have come out of here: Papa Pear, Diamond digger and Bubble witch 2.

Gamer since childhood, his father worked at IBM, and having made a career in Electronic Arts in London, Picon says that the video game has been a process of progressive democratization in which the quantum leap have been mobile: “Any user of mobile He has become a gamer. ” For Picón, the situation of Barcelona in the sector is very positive. “One of the problems in Spain is that the industry is very atomized, but in Barcelona several international companies have been established. It is very attractive for the capture of talents: when I recruit very specific profiles, I tell an English ‘come to Barcelona’ and do not think about it for five seconds. “

In King, which reaches 400 million monthly users and has fantastic offices in Barcelona to encourage creativity as they do in Socialpoint, the projects they develop in the Catalan capital are born in it and are in agreement with the company’s strategic line. And he explains that they arise in many ways, some not so obvious: “Papa pear arises from a portal that we have where there are more than 200 online games, tiny games where hundreds of thousands play, we analyze the metrics and see which ones are more successful”.

Picón believes that the sector has a long way to go because

Picón believes that the sector has a long way to go because

he says, “we carry the games in the genes, we play consciously or unconsciously since the stone age, there are basic activities such as exploration, learning and using what we learned, improving ourselves, interacting with others, socialize, improve your abilities … and all that videogames synthesize it in a very immediate way “. And in that growth, coincides with Martos, the problem of Barcelona is the support at the time of undertaking. “In Silicon Valley there are very strong investment systems
You have an idea and you have not finished writing the e-mail and you already receive a message of how much you want, I give you 5 million. People who bet on a hundred things or lose time and money. “

Jesús Alonso, director of the masters of videogames at the UPC, is one of those self-taught gamers that started when there was barely anything to do. He studied computer engineering only because it was programmed. I wanted to make videogames and ended up riding masters and degrees at the UPC. “When I started the video game degree there were few companies; Now, a lot. Some very large, although nothing compared for example to the study of Ubisoft in Canada, with almost 3,000 people “. The growth is incredible in Barcelona, ​​but he recognizes that there is a lot of small study and points again to the need for financial support to overcome this problem. That the investors “instead of brick they do it in the most important industry. But there is a certain fear. As a well-known case of investor is Gerard Piqué, who has dared to set up his business in something that he likes and the project is doing very well, the Kerad Games studio. It is a case to follow “. Because, he says, “the level of preparation here has nothing to envy the US.” And the scope of the video game is such that it will be extended to many other areas: “In the learning will largely replace the books. The game is the natural way to motivate us, we are born with the game “.

One of the small studies that have appeared successfully in the Catalan scene is Lince Works.

 

Three friends launched and got Sony’s support for Aragami, a video game that appeared a week ago and has already recovered the investment. David León studied computer engineering and then ended up launching to the UPF videogame master’s degree. There with other companions they created a project, Path of Shadows, which would later become Aragami. In his team there are ten people and his headquarters is located in the Sagrada Família area, in a plant much more modest than those of Socialpoint or King. “Some of the big companies move a lot of money, then the indies industry is a little laboratory rats, many small companies that support everything, eating crumbs and experimenting. One thousand survives and achieves success, “he says. And it is also, remember, it is not the same to create games for mobile from Barcelona than for consoles or PC.

There is much less money. But his and his friends’ passion was for videogames and instead of another more lucrative job, they bet on it. They charged 600 euros a month during the three years of the project and now they see the results. “We have grown playing videogames, our idols have been game designers and our monalisas or quijotes have been Marios, Zeldas and Metal gear; each generation, a type of medium that idolizes. We wanted to be able to do something like that. ” They went through Barcelona Activa, asked for a personal loan of 20,000 euros, obtained a participatory loan from the State for innovation and then the Gamebcn program, where the Generalitat and La Caixa are located. And in 2015, after publishing a video on YouTube of the game, they contacted Playstation Europe in London and gave them the money to finish it. It cost 400,000 euros and in a week they have earned 500,000. But Leon points out again that the financial environment is complicated; public aid, small, and missing medium-sized companies so that all the talent that is being formed now does not end in another country.

Coinsa will appeal to Skyline and denies link with current advice

Coinsa will appeal to Skyline and denies link with current advice

Image result for grupo coinsaElche (Alicante), Aug 10 (EFE) .- Francisco Pérez, a lawyer for the Coinsa Group, said today that the group he represents will have recourse to the award by the Valencian Institute of Finance (IVF) of the credit granted by the majority shareholding of Elche CF to the firm Skyline and denied having any connection with the current club council.

The representative of Coinsa explained that his group is willing to invest 41 million euros in the Elche, for what he considers that his offer is “infinitely better” than that of the multinational Qatari, which was chosen by the IVF last Friday as the adjudicataria.

“It’s a good, viable and transparent offer, the IVF should take us into account,” said Pérez, who dissected point by point his group’s proposal to demonstrate that “it’s better than Skyline’s”

“We are supported by justice and reason and we are going to appeal to be the winner, we are not going to sit idly by because it is the best offer for Elche, for the IVF and the one that offers the best guarantees and finances”, explained Pérez. who said that the will of his group is not “to polemicize but to help”.

Pérez assured that there is no link between Coinsa and the club’s current board of directors “beyond a meeting with an exquisite treatment in which we were given all the information of the club” and ensured that his signature “will renew” the governing body of the entity if it obtains the majority shareholding.

“It is possible that we had someone from the current council for their knowledge of the club and the city, we would also be permeable to the presence of prestigious people of the Elche society, but we have not come to leave the control of the club in the hands of anyone.” , he clarified.

Coinsa’s lawyer wanted to apologize to the head of the IVF, Manuel Illueca “or anyone who might have felt offended” by his statement last Saturday, which questioned the transparency and legitimacy of the process of awarding the credit.

“It was a moment of tension in which we wanted to express our discomfort, we believe that Mr. Illueca was not successful in offering a press conference and showing his preferences for an option before the end of the term,” Pérez recalled.

Francisco Perez explained that the offer of his group can reach 41 million in the Elche, with an immediate payment of three million at the signing of the award of the loan, “somewhat superior to what Skyline offers”.

He also defended that the proposal of his group is the only one that guarantees the payment of one hundred percent of the debt with the IVF.

The company is committed to endorse the payment of the European Commission’s debt (4.1 million) and announces its intention to negotiate the termination of the contract with Eventos Pechina, a firm that has half of the players’ transfer rights, after a payment of three million.

He also explained the creation of a schedule of payments to the IVF based on the possible promotion to First of the team, although in the case that it was not achieved in ten years Coinsa will pay the 14.6 million, and a minimum capitalization of the debt of 10,761 .744 euros.

The Coinsa Group also plans works to create a sports city next to the stadium worth six million euros, reform the template with players of the highest level and is committed to finding a sponsor for the shirt for the next ten seasons for a value of 1 , 5 million euros.

The Galician lawyer defended the guarantees presented by his group “backed by firms of the highest international reputation” and revealed that when he presented them, before the deadline, the auditing firm BDO had already issued his verdict in favor of the other option.

“We are serious people and we were disrespected, we see a comparative grievance, but we do not want to polemicize, but to collaborate,” said Pérez, who added that he is struck by “that we are required to provide guarantees while the other offer has not been made. even the deposits. “

Finally, Francisco Pérez confirmed that Luis Oliver, disqualified for his management at Betis, maintains a friendly relationship with the group “to whom he advises on sports matters”.