Today, if you are planning to buy a flat costing Rs 50 lakh (excluding stamp duty and registration), the bank can provide a maximum of Rs 40 lakh as loan and you will have to bring the remaining Rs 10 lakh. You will also now have to pay from your own pocket the stamp duty (6% in Karnataka), registration charge (1%) and other levies like surcharges (0.72%).

“In the short term, RBI’s move may lead to a slight reduction in home sales. However, buyers will be reconciled to it in the medium to long term,” said Om Ahuja, CEO-residential services at real estate consultancy Jones Lang LaSalle India.

Pranab Datta, MD of real estate consultancy Knight Frank India, said prospective buyers would bargain hard to negotiate a good deal in the current scenario.

The RBI’s move is an attempt to introduce an additional lever to ensure that the buyer does not overstate the realizable value of the property. This is an important metric for banks in the event that the borrower defaults.

But developers say such riders will choke the industry’s growth. “We are totally directionless. Does the RBI want to promote housing or kill the industry? RBI’s latest move will persuade customers to defer home purchases,” said Sushil Mantri, CMD of Mantri Developers.

Jackbastian Nazareth, CEO of Puravankara Projects, said the mid-segment in housing would be affected to a large extent. “The extra 10% that buyers will now have to bring in is significant in the Rs 60-80 lakh bracket,” he said. This segment is the one where inventory has been piling up already, with demand slowing down.

Nazareth, however, said the RBI move could give a boost to the lower end of the housing market. In fact, for sub Rs 20 lakh loans (classified as priority advances), banks can sanction a loan up to 90% of the value of the property.

The deal with 49 of the 50 states requires five of the largest banks to reduce loans for about 1 million households at risk of foreclosure. The lenders also will send checks of $2,000 to about 750,000 Americans who were improperly foreclosed upon. The banks will have three years to fulfill the terms of the deal.

It’s the biggest settlement involving a single industry since a 1998 multi-state tobacco deal.

Kentucky’s share in the settlement amounts to $58.8 million, while Indiana’s is $145 million.

The money will go toward modification of loan terms and principal writedowns, refinancings for “underwater” borrowers who owe more than their homes are worth, cash payments of up to $2,000 for foreclosed homeowners and state-administered consumer protection efforts.

It’s unclear exactly how many current and former homeowners in each state might be affected. But the cash payments of up to $2,000 might be available to up to 13,000 in Indiana and 5,400 in Kentucky, according to the attorneys general offices in each state.

Meanwhile, analytics company Corelogic puts the number of “underwater” homeowners at 25,000 in Kentucky — a figure Attorney General Jack Conway repeated Thursday — and 68,000 in Indiana. But not all those homeowners’ loans are owned or serviced by the five banks involved in the settlement — Bank of America, Wells Fargo, JP Morgan Chase, Ally Financial (formerly GMAC) and Citigroup.

“This is a good deal,” Conway said.

He called it “a first step in holding banks accountable for the mortgage foreclosure crisis” and stressed that the settlement doesn’t limit states’ rights to pursue further civil or criminal actions against banks. It also does not limit homeowners’ ability to bring legal action against banks, he said.

Because of the complexity of the mortgage market and the deal itself, homeowners will not be able to determine immediately whether they are eligible for relief under the settlement, according to a document distributed by Conway’s office.

The agency supported $1.6 million in total; $195,000 went to four new businesses that created 24 new jobs, the SBA said.

“It is critical that small businesses have access to capital in order to start and grow,” said Mark S. Hayward, director of the SBA Rhode Island office.

Many of the loans were made to businesses located in northern Rhode Island; in Pawtucket, three businesses were granted loans totaling $630,700.

Since the beginning of the federal fiscal year on Oct. 1, 2011, the SBA has guaranteed 93 loans worth more than $24 million.

As of Jan. 31, the top five Rhode Island SBA lenders are:

• Bank Rhode Island – 12 loans, $808,000.
• Coastway Community Bank – 11 loans, $1,385,000
• BankNewport – 9 loans, $2,186,300.
• Citizens Bank – 9 loans, $641,500.
• The Washington Trust Company – 8 loans, $396,500.

Since the beginning of the federal fiscal year, the top municipalities where businesses received SBA loans are:

• Providence – 11 loans, $1,931,000.
• Pawtucket – 9 loans, $1,134,000.
• Cranston – 7 loans, $1,840,000.
• Portsmouth – 7 loans, $1,234,000.
• Westerly – 5 loans, $724,000.
• Warwick – 5 loans, $420,000.

The MTD board voted Wednesday to increase its borrowing limit with both Busey Bank and Commerce Bank from $3 million to $5 million.

MTD Managing Director Bill Volk said the move would allow the agency to borrow enough to finance the purchase of 10 buses, plus provide coverage in case state aid payments are delayed for long periods. When borrowing money, the MTD is required to use a line of credit, he said.

“Most of this is because we’re trying to be conservative. The line of credit doesn’t cost us anything unless we borrow something. And given the state’s situation, basically slow payments as well as our heavy use of debt service from our operating account with the state, this is the right way to go.”

Volk said the move doesn’t guarantee that the MTD will spend more money.

“I’m not sure we’ll get above $6 million but it’s a conservative approach from a financial management standpoint to hopefully guarantee that we won’t get into a cash flow problem,” he said. “We used about $5 million this year, and if we buy buses next year, 10 buses will cost about $6 million.”

Further, he added, “if we were to get into a situation where the state was nine months behind in payments — I don’t anticipate us having to do that — but it doesn’t cost us anything to get the line of credit. We’re just trying to cover ourselves in case the worst case scenario came.”

Also Wednesday, the MTD board accepted the resignation of board member Yuki Llewellyn, who has moved to Columbia, Mo. The board members forwarded Llewellyn’s resignation letter to Champaign County Board Chair C. Pius Weibel. The county board will appoint a successor.

Board members also were informed that a disappointing number of applicants have sought the new chief financial officer position with the agency. The MTD had hoped to hire someone for the position, which is expected to pay $80,000 to $90,000 annually, by March 1. The process could be set back about a month, Volk said.

“I think we’re going to look at what we can do to increase the number of applicants,” he said. “There are qualified folks who we’ve gotten applications from. But we just think we need to broaden the pool a little bit. We haven’t determined how we’re going to do that yet.”

Volk also reported that the MTD is having trouble with some of its year-old hybrid passenger vans and may have to replace them. The bell housing on the vans has cracked, he said.

“They have 35,000 to 40,000 miles on them and they are spending a great deal of time at a Ford dealership in Bloomington on warranty,” he said. “We have three of the five vans there. When we have 14 vans and three of them are down, that becomes somewhat problematic.

“It’s also problematic that because these were federal dollars that were involved, we have to keep them for nine years.”

The replacement of an undetermined number of vans, along with some other capital items, will require adjustments to the MTD budget in the coming months, Volk said.

Finally, MTD ridership in December was down 2.5 percent from December 2010, the first time in several months that the agency reported a year-to-year decline. Volk attributed the ridership downturn to the mild weather last month and the fact that there was one fewer attendance day at the University of Illinois compared with a year earlier.

“Buying a car is a major decision and requires some preparation,” said Eric Hoffman, AWARE spokesman. “With holiday festivities behind us and a New Year beginning, consumers have a chance to plan for the future by making informed financial decisions.”

AWARE offers 12 New Year’s resolutions for consumers in 2012:

Review your financial situation and set a monthly budget. Be sure to take into consideration any payments you need to make on holiday related purchases.

Determine what you can reasonably afford for a down payment and for a monthly payment.

Check your credit report; you can obtain a free copy from www.annualcreditreport.com . Immediately dispute any errors with the credit reporting agency and settle outstanding debts.

Research what vehicles are in your price range.

Familiarize yourself with common finance terms. Visit AWARE’s glossary at www.autofinancing101.org/resources/glossary.cfm .

Know the differences between buying and leasing, and choose the option that is best for you.

Understand the value and price of optional products such as extended service contracts, credit insurance, and guaranteed auto protection. If you do not need or cannot afford these products, do not sign up for them.

Comparison shop for financing from multiple sources.

Negotiate your financing arrangement and terms. Stay within the price range you determined you could afford when you calculated your budget.

Carefully review the contract and make sure all of your questions have been answered before signing it.

Make your payments on time.

If you experience difficulty making your payments, contact your creditor.

Additional educational information in English and Spanish can be found at www.autofinancing101.org .

AWARE is a vehicle financing industry coalition to help consumers understand how auto financing works. The group provides potential buyers of new and used autos with the tools and resources they need to successfully navigate the auto financing process.

AWARE’s members include: American Financial Services Association, National Automobile Dealers Association, National Association of Minority Automobile Dealers, American International Automobile Dealers Association, Ally Financial, American Honda Finance Corp., American Suzuki Financial Services, AutoNation, Ford Motor Credit Company, Group 1 Automotive, Inc., Lithia Motors, National Auto Finance Co., Nissan Motor Acceptance Corp., Saab Financial Services Corp., Sonic Automotive, Inc., Toyota Financial Services, United Auto Group, Inc. and Wells Fargo Auto Finance.

Doral Financial Corp. (NYSE:DRL) is currently trading at $0.96 up 7.42% in today’s trading. DRL is trading 0.72% above its 50 day moving average and -31.39% below its 200 day moving average. DRL is -64.85% below its 52-week high and 70.71% above its 52-week low.

Doral Financial Corporation is a financial holding company engaged in banking, mortgage banking and insurance agency activities through its wholly-owned subsidiaries.

Vestin Realty Mortgage I Inc (NASDAQ:VRTA)is currently trading at $1.10 up 4.76% in today’s trading. VRTA is trading 0.44% above its 50 day moving average and -7.81% below its 200 day moving average. VRTA is -32.93% below its 52-week high and 35.80% above its 52-week low.

Vestin Realty Mortgage I, Inc. is a real estate investment trust, whose core business is investing in commercial real estate loans.

Impac Mortgage Holdings Inc. (NYSE:IMH) is currently trading at $2.01 up 3.08% in today’s trading. IMH is trading 2.98% above its 50 day moving average and -19.78% below its 200 day moving average. IMH is -49.62% below its 52-week high and 38.62% above its 52-week low. IMH’s PE ratio is 4.06 and their market cap is $15.23M.

Impac Mortgage Holdings, Inc’s business includes the long-term mortgage portfolio and the mortgage and real estate fee-based business activities conducted by IRES.

Tree.Com Inc. (NASDAQ:TREE) is currently trading at $5.59 up 1.64% in today’s trading. TREE is trading 6.27% above its 50 day moving average and 4.46% above its 200 day moving average. TREE is -40.85% below its 52-week high and 20.47% above its 52-week low.

Tree.com, Inc. through its subsidiaries, operates a lending business and a real estate business.

Institutional Financial Markets Inc. (NYSE:IFMI) is currently trading at $1.44 up 1.41% in today’s trading. IFMI is trading -14.80% below its 50 day moving average and -47.82% below its 200 day moving average. IFMI is -71.00% below its 52-week high and 9.92% above its 52-week low.

Institutional Financial Markets, Inc. is a financial services company specializing in credit-related fixed income investments.

Invesco Mortgage Capital Inc. (NYSE:IVR) is currently trading at $14.05 up 1.01% in today’s trading. IVR is trading -2.99% below its 50 day moving average and -17.07% below its 200 day moving average. IVR is -30.74% below its 52-week high and 17.12% above its 52-week low. IVR’s PE ratio is 3.71 and their market cap is $1.61B.

Invesco Mortgage Capital is a real estate investment trust that acquires, finances and manages residential and commercial mortgage-backed securities and mortgage loans.

BRT Realty Trust (NYSE:BRT) is currently trading at $6.34 up 0.96% in today’s trading. BRT is trading 1.84% above its 50 day moving average and 0.34% above its 200 day moving average. BRT is -15.01% below its 52-week high and 8.38% above its 52-week low. BRT’s PE ratio is 17.44 and their market cap is $87.54M.

The Company’s primary business is to originate and hold for investment senior mortgage loans secured by commercial and multi-family real estate property in the United States.

KKR Financial Holdings LLC (NYSE:KFN) is currently trading at $8.73 up 0.92% in today’s trading. KFN is trading 4.77% above its 50 day moving average and 0.69% above its 200 day moving average. KFN is -12.12% below its 52-week high and 33.53% above its 52-week low. KFN’s PE ratio is 4.81 and their market cap is $1.54B.

KKR Financial Corp. is a specialty finance company that uses leverage with the objective of generating competitive risk-adjusted returns.

Ellington Financial LLC (NYSE:EFC) is currently trading at $17.17 up 0.42% in today’s trading. EFC is trading -0.61% below its 50 day moving average and -9.02% below its 200 day moving average. EFC is -22.78% below its 52-week high and 11.57% above its 52-week low. EFC’s PE ratio is 12.76 and their market cap is $281.98M.

Ellington Financial LLC is specialty finance Company formed to acquire and manage mortgage-related assets.

Hercules Technology Growth Capital Inc. (NASDAQ:HTGC) is currently trading at $9.44 up 0.32% in today’s trading. HTGC is trading 1.49% above its 50 day moving average and -0.09% below its 200 day moving average. HTGC is -11.88% below its 52-week high and 23.97% above its 52-week low. HTGC’s PE ratio is 9.60 and their market cap is $412.25M.

Hercules Technology Growth Capital, Inc is a finance company which provides debt and equity growth capital to technology-related companies at all stages of development from seed & emerging growth to expansion & established stages of development.

Marlin Business Services Corp. (NASDAQ:MRLN) is currently trading at $12.70 up 0.08% in today’s trading. MRLN is trading 2.49% above its 50 day moving average and 7.26% above its 200 day moving average. MRLN is -6.94% below its 52-week high and 36.24% above its 52-week low. MRLN’s PE ratio is 29.51 and their market cap is $162.56M.

Marlin Business Services Corporation through its main operating subsidiary, Marlin Leasing Corporation is a provider of equipment financing and working capital solutions primarily to small businesses.

America First Tax Exempt Investors LP (NASDAQ:ATAX) is currently trading at $4.94 down -0.40% in today’s trading. ATAX is trading -0.73% below its 50 day moving average and -4.12% below its 200 day moving average. ATAX is -9.13% below its 52-week high and 5.42% above its 52-week low. ATAX’s PE ratio is 55.11 and their market cap is $144.04M.

America First Tax Exempt Investors, L.P. acquires a portfolio of federally tax-exempt mortgage revenue bonds that are issued to provide construction and/or permanent financing of multifamily residential properties.

Dynex Capital Inc. (NYSE:DX) is currently trading at $9.13 down -0.65% in today’s trading. DX is trading 5.52% above its 50 day moving average and 5.13% above its 200 day moving average. DX is -6.67% below its 52-week high and 29.70% above its 52-week low. DX’s PE ratio is 8.51 and their market cap is $371.09M.

Dynex Capital, Inc. is a real estate investment trust, which invests in mortgage loans and securities on a leveraged basis.

CIT Group Inc. (NYSE:CIT) is currently trading at $34.87 down -0.71% in today’s trading. CIT is trading 2.51% above its 50 day moving average and -7.11% below its 200 day moving average. CIT is -29.66% below its 52-week high and 25.98% above its 52-week low. CIT’s PE ratio is 92.42 and their market cap is $7.05B.

CIT Group Inc provides commercial financing and leasing products and other services to small and middle market businesses across a wide variety of industries.

HFF Inc. (NYSE:HF) is currently trading at $10.33 down -1.34% in today’s trading. HF is trading -6.56% below its 50 day moving average and -18.62% below its 200 day moving average. HF is -39.16% below its 52-week high and 31.93% above its 52-week low. HF’s PE ratio is 12.03 and their market cap is $376.71M.

The Refinance Index rose 9.3 percent from the previous week, while the seasonally adjusted Purchase Index decreased 8.2 percent.

However, the four week moving average for the seasonally adjusted Market Index inched up 0.65 percent from the previous week. The four week moving average edged up 1.55 percent for the seasonally adjusted Purchase Index, while this average ticked up 0.69 percent for the Refinance Index, according to the survey.

The refinance share of total applications increased to 79.7 percent, the highest share since this year, from 76.0 percent the previous week, said the survey.

In addition, the association said that the average contract interest rate for 30-year fixed-rate mortgages last week decreased to 3.94 percent, the lowest rate this year, from 3.98 percent, while the average contract interest rate for 15-year fixed-rate mortgages dropped to 3.44 percent, also the lowest rate this year, from 3.53 percent.

The U.S. government in October announced a series of changes to the Home Affordable Refinance Program (HARP) to make it easier for homeowners to refinance their mortgage loans, which is considered to stimulate mortgage refinance activities.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

“The trade-finance program is filling persistent market gaps, but it will become even more important,” Steve Beck, who heads the Manila-based ADB’s unit that provides credit and guarantees for imports and exports, said in an interview. “With some major European banks retrenching from the trade-finance business, we see that the gaps are increasing,” he said, without naming the lenders.

Beck sees growth in his $3 billion operation accelerating from a pace already in excess of 25 percent this year, with a credit crunch having the biggest impact on poorer emerging markets including Sri Lanka, Bangladesh and Vietnam. At stake is averting a 2008-style collapse in trade that impairs growth in the continent that led the world out of the global recession.

European banks are rushing to raise their capital ratios as the euro-region’s debt crisis continues unabated. The lenders are likely to de-leverage by 1.5 trillion euros ($2 trillion) to 2.5 trillion euros, Morgan Stanley estimated last month. Among the non-core assets at risk is trade finance in Asia, where nations outside Japan exported $4.1 trillion last year.

“European banks that had exposure in Asia have had to repatriate some of the money from Asia, and that’s why you see volatility” in the region’s exchange rates, said Iwan Azis, who heads the ADB’s Office of Regional Integration.

Signs of Stress

Currencies from the Philippine peso to Indonesian rupiah and Indian rupee tumbled in September, when European debt woes deteriorated as Greece teetered toward a potential disorderly default. During the week of Sept. 19, Asian currencies tumbled the most since the region’s financial crisis in 1998.

Beck said another sign of distress is a jump in the number of companies refusing to do business without trade finance, where banks insure that exporters will get paid for their products.

“There are a lot of people in the industry who are predicting that it’s going to be worse than 2008,” he said, referring to import-export financing.

“Demand for our products is already affected,” said Thomas Patrick, director of finance at Duferco SA, which is based in Lugano, Switzerland and estimates that it’s the world’s largest steel trader. “We have a healthy order book but it is at reduced levels.”

Customers Squeezed

European banks with Asian operations are scaling back, causing medium-sized companies that purchase Duferco products to find less readily available credit lines or payment guarantees, Patrick said.

“A lot of companies particularly in distribution and trading are holding low stock levels — to make sure to avoid having exposure if there is a major crisis,” he said. “We all had a very difficult experience in 2008 and we don’t want it repeated.”

A European retreat offers opportunities for lenders from Asia and other regions, including the U.S., said Richard Jerram, chief economist at Bank of Singapore Ltd.

“They will be interested in filling the gap,” particularly if borrowers are prepared to pay higher interest rates on loans, according to Jerram. “But life’s never perfect in the sense that you can always find a substitute. There’s going to be some stress.”

Banks That Benefit

HSBC Holdings Plc and Standard Chartered Plc — U.K.-based banks with large Asian operations — may be among the “key beneficiaries,” Barclays Capital regional bank analysts led by Thomas Quarmby in Hong Kong wrote in a Nov. 29 note to clients.

Among others expected to benefit are Mitsubishi UFJ Financial Group Inc. of Japan, Australia & New Zealand Banking Group Ltd., Singapore’s DBS Group Holdings Ltd. and Taiwan’s Mega Financial Holding Co., Barclays Capital analysts said.

“There are more companies coming to us,” said Mark Evans, ANZ Bank’s Sydney-based global head of trade and supply chain. “The numbers of customers and transactions have increased significantly. I am optimistic we will continue to see opportunities coming our way as a consequence of what’s going on in Europe.”

ANZ Bank’s trade finance revenue from Asia rose 58 percent in the financial year through September from the same period a year ago, Evans said.

Cost of Borrowing

Even with others stepping in, the price of the financing will likely increase as European lenders downsize.

“The cost of borrowing will go up — there’s no doubt about it,” said Azis, who previously taught at Cornell University and testified to U.S. lawmakers during the Asian financial crisis.

A more broad-based exit by Europe’s banks, should the sovereign-debt crisis worsen, could pose a deeper economic threat, because of an influx of capital into Asia since the 2008-2009 global recession spurred by its faster growth rates, according to the World Bank.

Trade data already point to a darkening picture for Asian exports, hit by diminishing European demand as the euro-region veers toward a recession. That’s particularly troubling for countries from Thailand to South Korea, where shipments make up the equivalent of half or more of gross domestic product. Exports out of both China and South Korea increased at the slowest pace since 2009 in October, while Japan’s slid the most since May.

Threats Deepen

Asian economies are facing “much greater downside risks” now because of the possibility of a recession in the U.S. and Europe and the threat of destabilizing capital flows, the ADB said in a report today. Emerging East Asian economies may grow 7.2 percent next year after expanding 7.5 percent in 2011, less than the lender’s September forecast, according to the report.

Credit outstanding from European lenders to developing East Asia was $427 billion, or the equivalent of 6 percent of GDP, in June 2011, according to the World Bank. Almost 70 percent of all loans from banks that report to the Bank for International Settlements was of shorter maturities, exposing Asia to “sudden-withdrawal” risk, the World Bank said in a Nov. 22 report.

Malaysia at Risk

Potentially among the most vulnerable is Malaysia, where loans from European banks amount to more than 25 percent of the nation’s GDP, World Bank data show. Other middle-income countries such as Indonesia, Thailand, the Philippines and Vietnam have exposures of between 7 percent and 11 percent of GDP to European lenders. In China, such funding totaled $268 billion, or 5 percent of GDP.

Asian nations have fiscal scope to respond to a global slowdown, with government borrowing levels lower than other regions, the World Bank said in its report.

Even so, that ability of policy makers to respond hasn’t defused concern about the outlook for exports.

“2012 will be very difficult for us, it won’t be easy to get financing,” Sofjan Wanandi, chairman of the Employers Association of Indonesia, said in an interview. “Until the end of this year, everything will still be doing well, as all our contracts are through month-end, but we’re really concerned about next year,” he said, referring to averages for members of the group — Indonesia’s most representative business lobby, incorporating industries from mining to retail.

That’s up 25 percent from the $120,000 the trade group spent in the second quarter, but down 35 percent from the $230,000 it spent in the third quarter of 2010.

The trade group lobbied on issues related to banking, securities, commercial real estate capital market finance, securitization, credit rating agencies, financial services regulatory reform and insurance, according to a disclosure report filed Oct. 20.

Besides Congress, the group lobbied the Treasury Department, the Federal Deposit Insurance Corp., the Securities and Exchange Commission and the Office of the Comptroller of the Currency.

Martin Schuh, who worked on the Senate Committee on Aging, was among those lobbying on behalf of the group during the quarter.

The latest report was filed Oct. 20 with the U.S. House of Representatives and the U.S. Senate.

And the market was “subdued” with most loans going to people remortgaging rather than moving to a new home.

Richard Sexton, of chartered surveyors, e.surv, said only one in every 100 loans went to people with a deposit of 10% or less compared with 13 in every 100 in 2007, prior to the credit crunch.

“Unless the economy gets moving, and the crisis wreaking havoc in the Eurozone dissipates, there is a very real chance the first-time buyer market will enter a state of near paralysis,” he said.

Nicholas Leeming, a director at Zoopla.co.uk, said: “First-timers hold the ignition, key, it’s time more was done to help them turn it.”

Leeming is one of many in the industry to call on Chancellor George Osborne to use his autumn statement this month to do more to help first-time buyers.

There is a growing lobby urging him to extend the stamp duty holiday on properties costing up to £250,000 which ends in April.