Loan Case study:

Additional information: John and Jane

Creditor Type Date Opened Date Closed Beg Balance/Limit Current Balance Payment 30+ Days Late 60+ Days Late 90+ Days Late Open Bank of America Mortgage 6/1/2009 240,000 235,000 1,900 1 0 0 VyStar Credit Union Auto 5/1/2014 25,000 21,000 500 0 0 0 MBNA Credit Card 5/21/1999 10,000 2,250 1 1 0 Sallie Mae Student Loans 8/31/1995 40,250 30,000 300 0 0 0 Navy Federal Credit Auto 3/25/2012 19,000 1,500 350 0 0 0 HSBC Credit Card 5/1/2015 5,000 5,000 100 0 0 0 Closed VyStar Auto 5/21/1999 5/21/2004 22,000 0 450 0 0 0 VyStar Auto 10/1/2006 10/1/2010 30,000 0 600 0 0 0 Circuit City Credit Card 6/1/1999 10/1/2005 1,000 0 25 4 3 1 Victorica Secret Credit Card 7/1/2000 10/1/2005 500 0 25 3 0 0 Target Credit Card 8/1/2001 10/1/2005 500 0 25 5 2 1 Chase Credit Card 9/1/2002 10/1/2005 2,500 0 25 2 1 1 Bank of America Mortgage 4/1/2002 5/31/2009 150,000 0 1,200 2 2 0 Credit Scores John 710 Jane 690

In this assignment, please two case studies using the scenarios below. For both cases, you should assume that you work as a loan officer, and you will be presenting your thoughts to the credit committee at your institution.

John and Jane Doe

John and Jane Doe are both 40 years old with two children, ages 12 and 10. John is an assistant principal making $80,000 per year. He has been in the same school district for over 10 years, working in different positions. Jane works part-time, making around $14,000 per year. The couple has about $25,000 in equity on their current home and $30,000 in savings. They came to your office seeking a pre-approval for a new mortgage.

A presentation for your credit committee describing the couple's creditworthiness and your recommendation for pre-approval/denial. If you do pre-approve, include the maximum amount you would recommend.

720+	690-720	650-690	600-650	Below 600
30 Year Loan	4%	+.25%	+1%	+1%
15 Year Loan	3%	+.15%	+.75%	+.75%
5/1 ARM	3.25%	same	+.5%	N/A
1/1 ARM	2.75%	same	+.5%	N/A

Additionally, an outlining a new credit card you would like to offer to John and Jane Doe. Include your rationale and the limit you are suggesting.

Dan and Roseanne Smith

Dan is a 50-year-old policeman who is also retired from the Marines. Between his pension, police salary, and overtime, he makes $120,000 a year. Roseanne is a 45-year-old homemaker. Dan and Roseanne would like to trade in their car, which is financed at Navy Federal, and purchase a new car financed with you at VyStar. The home they own currently is worth around $280,000, and they have around $10,000 in a savings account.

A presentation to other members of your credit committee regarding the Smiths. Include pertinent ratios, credit history, and the size of the loan you would approve them for. Use the following table as an interest rate guide when calculating your payments.

	720+	690-720	650-690	600-650	Below 600
5 Year Loan	7%	+1%	+2%	+3%	+6%
4 Year Loan	6%	+1%	+2%	+3%	+6%
3 Year Loan	5%	same	+2%	+3%	+5%
2 Year Loan	4%	same	+2%	+3%	+5%

Next, using Dan and Roseanne Smith's information, add an additional writting on any other products you would offer to them and explain why.

Additional information: Dan and Roseanne Smith

Creditor Type Date Opened Date Closed Beg Balance/Limit Current Balance Payment 30+ Days Late 60+ Days Late 90+ Days Late Open Bank of America Mortgage 6/1/2009 200,000 190,000 1,600 5 3 1 VyStar Credit Union Auto 5/1/2014 35,000 21,000 750 8 4 2 MBNA Credit Card 5/21/1999 10,000 9,500 10 10 5 Sallie Mae Student Loans 8/31/1985 40,250 11,000 300 0 0 0 Navy Federal Credit Auto 3/25/2012 19,000 1,500 350 5 4 2 HSBC Credit Card 5/1/2015 5,000 5,000 100 0 0 0 Closed VyStar Auto 10/1/1988 10/1/1993 14,000 0 175 4 2 1 VyStar Auto 4/1/1996 4/1/1999 18,000 0 245 3 2 1 VyStar Auto 5/21/1999 5/21/2004 22,000 0 450 6 3 1 VyStar Auto 10/1/2006 10/1/2010 30,000 0 600 7 5 3 Chase Credit Card 6/1/1989 10/1/2005 1,000 0 25 12 6 3 Macy's Credit Card 7/1/1995 10/1/2005 500 0 25 10 2 1 Target Credit Card 8/1/2001 10/1/2005 500 0 25 14 1 1 Best Buy Credit Card 9/1/2002 10/1/2005 2,500 0 25 9 6 3 Bank of America Mortgage 4/1/1992 5/31/2009 100,000 0 800 3 2 1 Credit Scores Dan 600 Roseanne 610