The Small Business Administration reminded disaster victims that they do not have to wait to settle with their insurance companies before applying for disaster loan assistance.

Specifically, victims of severe storms and flooding in Kentucky on Aug. 4, 2009, should return their completed loan applications as soon as possible, said an SBA press release. Homeowners, renters, businesses and non-profit organizations of all sizes in Jefferson County, Ky., are eligible to apply for SBA physical disaster loans.

Disaster loans up to $200,000 are available to homeowners to repair or replace damaged or destroyed real estate. Homeowners and renters are eligible up to $40,000 to repair or replace damaged or destroyed personal property. Businesses and non-profit organizations of any size may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory, and other business assets, said the SBA.

Loan amounts and terms are set by the SBA and are based on each applicant’s financial situation.

SBA representatives will be at Disaster Recovery Centers in the area to issue loan applications and answer questions. Click here for more information.

The Obama administration announced recently it will expand its $50 billion housing aid plan to help more homeowners avoid foreclosure.
The changes, aimed at homeowners who do not qualify for other aid, will make it easier for them to sell their homes for less than the cost of the mortgage or transfer ownership to the lender.

The president’s Making Homes Affordable program, launched in March, reimburses mortgage companies that modify borrowers’ loans to help homeowners make the payments and keep their homes. To qualify for a modified loan, borrowers must provide proof of income and a letter stating why they need help.

Companies have made more than 55,000 offers to modify borrowers’ loans, according to the Associated Press.

Some mortgage brokers complain the loan modification plan is too complicated.

“Our experience at the ground level has been, so far, frustrating,” Michael van Zalingen, director of homeownership at Neighborhood Housing Services of Chicago, a counseling group, told the AP. Some mortgage company employees are either steering borrowers away from the plan or are unaware of it, he said.

Not all homeowners will qualify for loan modification. But Faith Schwartz, executive director of Hope Now, a mortgage industry group formed in response to the foreclosure crisis, told the AP, “This is a very well-thought out plan. People have to be a little bit patient.”

The recent revisions are meant to help borrowers who owe significantly more on their mortgages than they can afford to pay and so don’t qualify for the loan revision program.

In the first quarter of 2009, foreclosure filings topped 800,000, according to RealtyTrac, an online marketer of foreclosed properties.

Good news ahead for the banking industry?

Wells Fargo turned a profit in the first three months of 2009, but could also post record quarterly earnings with net income of $3 billion, according to an April 10 story in USA Today.

Investors naturally cheered, sparking a big rally in bank shares.

Wells Fargo jumped 32 percent to $19.61 per share, USA Today said, while other banks like Bank of America, which bounced 35 percent to $9.55, enjoyed similar gains.

Economists and investors hoped the run of good luck meant the system was finally stabilizing.

USA Today said Well Fargo’s results show that homeowners took advantage of low rates. “The bank saw $100 billion in new mortgages in the quarter, with more than 450,000 people purchasing or refinancing homes. Mortgage applications rose 64% from the fourth quarter of 2008 to $190 billion,” the paper said.

Analysts were buoyed, but cautioned against jumping to too much of a rosy conclusion, citing that the results of the government-ordered “stress tests” on bank assets had not yet been revealed.

Ben Wallace, an analyst at Grimes & Co., told the paper: “It’s a good start.”

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