Line Of Credit

MNC Financial Inc., the parent company of Maryland National Bank, announced today that it is continuing negotiations with its syndicate of banks, headed by Morgan Guaranty Trust Co., on the terms of a $750 million credit line.The announcement comes two days after a Dec. 14 deadline that had been set to come up with a new arrangement. No new deadline has been released by MNC. Morgan officials were not available for comment.MNC needs the line of credit from Morgan to continue to pay its bills and to meet debt obligations that are coming due soon.

The letter starts off ordinarily enough, with a typical salutation in the form of "Dear Mr. Gilbert." But its next sentence is set off in boldface type as its own paragraph: "Congratulations, you are pre-approved for a Home Equity Line of Credit." It's not jarring to you, I suppose. You don't see a thing appalling or outrageous about this letter. Perhaps you, like the officer of the bank who signed the letter, believe that Mr. Gilbert is qualified for a home equity line of credit. Let me let you in on a little secret.

The Baltimore Development Corp. said yesterday that it has granted a $400,000 line of credit to enable Parks Sausage Co. to keep operating while its owners search for an investor or buyer to save the financially troubled sausage-maker.John Sundergill, acting president of the city's quasi-governmental economic development agency, said the city agreed to the 90-day line of credit to give Parks enough time to evaluate offers and resolve its financial crisis."We're very concerned about Parks' survival . . . and preserving jobs for all those people," Mr. Sundergill said.

Two years ago, Bank of America gave Brian DeCunzo and his wife an unsecured line of credit for $40,000 - two-thirds of the couple's annual income. The Hampstead landscaper used about $23,700 of the line to pay off loans and consolidate other debt. That was then. Bank of America recently lowered the credit limit to $24,300. Suddenly, it appears the couple is maxed out and their credit has suffered as a result, DeCunzo says. A bank official told the couple their credit limit was cut because their debt level had gone up, but DeCunzo says they have less debt now than when they opened the account.

To the delight of Wall Street, Marriott Corp. announced yesterday a new line of bank credit and a series of moves designed to strengthen the financial condition of the debt-laden hotel and restaurant company.At the heart of the good news is a new $150 million line of credit Marriott negotiated with Bankers Trust Co., Citibank and Bank of Nova Scotia."We believe we have enough cash not only to cover our capital expenditures and interest coverage but also to begin to pay down the debt levelwe have," said Marriott spokesman Robert T. Souer.

Environmental Elements Corp. said yesterday that its primary bank, Mercantile-Safe Deposit and Trust Co., agreed to increase the company's credit line to $12 million, from $7 million.EEC is a Baltimore-based supplier of industrial air pollution control systems.The company will use the additional credit as working capital to support its recent growth, said E. H. Verdery, EEC's chairman and chief executive. EEC recently doubled its number of new contracts and is pursuing others in international markets, he said.

Much of the consumer spending boom of the past few years has been fueled by Americans tapping into the equity in their homes, but not everyone may be getting at their money in the smartest way. There are three ways to turn the equity in your home into cash: refinancing your mortgage, taking out an equity line of credit or getting an equity loan. Each has its pluses and minuses. Both home equity products can have closing costs, although they are usually much smaller than with a first mortgage.

What I wanted was a temporary line of credit from a bank where I've been a steady, uncomplaining, service-fee-paying, sporadically saving, non-check-bouncing customer for seven years.The young woman who answered the phone said, "Oh, yes. Sure. Of course," enough times to give the impression that she was hanging onto every word.She was not.The next day she called with news that my "loan" had been approved, adding, "You can come and get your money any time. On the other hand, interest begins accruing now."

MNC Financial Inc. today announced that it has renegotiated a crucial line of credit with a syndicate of banks headed by Morgan Guaranty Trust Co. of New York.Under the new terms, the Baltimore bank holding company must repay $375 million on that line of credit on Jan. 14, an MNC spokesman said.MNC, the parent company of Maryland National Bank, repaid the bank syndicate $175 million on its debt today.To come up with the cash, MNC said, it closed the sale of its Leasing Division to General Electric Capital Corp.

Ten days into the job, new Chief Executive Richard P. Crystal announced yesterday that Merry-Go-Round Enterprises Inc. has obtained a $90 million line of credit, offering breathing room for the fashion retailer mired in Chapter 11 bankruptcy."

Sure, you get a tax deduction for the interest you pay on your mortgage, but that doesn't mean you aren't heartsick about all that interest. Should you try to pay your loan off early and cut out a chunk of the interest due? If you make half your mortgage payment every other week, that's 26 half-payments - or 13 full ones rather than 12, shaving a month each year. But it's not worth it if your lender charges you a fee to do so, says Bankrate.com's Greg McBride. You're better off making an extra payment once a year or adding 1/12th of that amount to each monthly payment.

A former Mercantile Bankshares Corp. vice president was sentenced yesterday to one year and one day in federal prison after being convicted of two counts of mail fraud in connection with a scheme to bilk the company out of more than $900,000 according to the Maryland U.S. attorney's office. Thomas W. Small, 53, of York, Pa., also will have to serve five years of supervised probation and pay back $913,000 taken from the Baltimore-based company between March 1997 and August 2003, when he was vice president in charge of information technology.

Bill Me Later Inc., the Timonium company that offers a credit-card-free way to shop online, announced yesterday plans to expand its Maryland employee count by about 25 percent and add office space in Hunt Valley as it moves into a new stage of growth. The company said it's in the process of hiring 70 "customer service, help desk and transaction management operations" people to work in the 26,000-square-foot Hunt Valley space. Bill Me Later currently employs about 265 people. The company, founded in September 2000, also has plans to open information technology offices in San Francisco and hire 25 people to operate them.

With help from the Abell Foundation, the Maryland Zoo in Baltimore has received a $1.2 million bank credit it needs to get through the next two months without firing employees and stiffing vendors, officials said. Zoo officials do not expect to spend the entire line of credit from PNC Bank because revenues have improved since the March birth of an elephant -- whose name will be unveiled at his public debut Saturday. And officials are optimistic that a baby camel's visit in May will continue to boost attendance.

How's this for loan terms? You borrow $100 for two weeks and you're charged an annual interest rate of 884 percent. No, this isn't a payday loan. This is basically the deal you get from banks and credit unions when they give you a short-term loan to cover an overdrawn account. A few years ago lenders would return a check or deny an electronic transaction if you didn't have enough money in your account. Now they make an overdraft loan -- often without your consent -- and charge a hefty fee averaging $34, according to a recent study by the Center for Responsible Lending.

When my wife, Georgina, and I paid off our $100,000 mortgage early 19 years ago, we saved $97,468.70 in interest. We did it simply by enclosing a second check with our regular mortgage payment each month. If your goal is to pay off your mortgage early, you can do as we did without having to fall for gimmicky strategies that overstate your savings or hide your cost. And there are plenty out there. "Would you like to pay off your mortgage in 15 or even 10 years without having to change your current lifestyle?"

Sure, you get a tax deduction for the interest you pay on your mortgage, but that doesn't mean you aren't heartsick about all that interest. Should you try to pay your loan off early and cut out a chunk of the interest due? If you make half your mortgage payment every other week, that's 26 half-payments - or 13 full ones rather than 12, shaving a month each year. But it's not worth it if your lender charges you a fee to do so, says Bankrate.com's Greg McBride. You're better off making an extra payment once a year or adding 1/12th of that amount to each monthly payment.

Whether you call it a rainy-day fund, an emergency fund or a cash cushion, making plans to have significant cash available when bad things happen is fundamental to financial planning. But what exactly constitutes an emergency fund? The most conservative definition - and most repeated advice - is cash equal to three to six months of living expenses sitting in a safe account earning minuscule interest. But for many people, that could be overkill, said Sheryl Garrett, founder of the Garrett Planning Network, a group of financial advisers who provide money advice at hourly rates.

SAN FRANCISCO -- Oakland resident Dominique Pfaff had a little extra time before boarding a flight to her native France this summer, so she used her credit card to get 100 euros in pocket money from a foreign-exchange service at San Francisco International Airport. She knew there'd be some kind of conversion fee involved, but she didn't find out until her Bank of America statement arrived in August that she'd been hit with a $10 "cash advance fee." Also, there was a $1.43 finance charge because she hadn't yet paid off the cash advance.