No More Mortgage Surprises During the Closing of your Loan.If it hasn't happened to you, you can almost be sure you know someone it has happened to. That is the costs and fees of your mortgage loan are different when you go to sign your documents than they were the last time you saw your numbers. While there were valid reasons for many of those changes, it was not unheard of to have changes made at the last minute to boost fees to the mortgage company who knew you wouldn't walk away from the loan and lose the home you wanted so badly. Hopefully, that's over with now.
No More Surprises During Closing on Mortgage Loans: New HUD Rules for Mortgages
If you’ve ever bought a home, you may have been shocked to see that the estimate you received for your closing costs from your mortgage loan lender was much less than what you ended up having to pay. You may have sat back and contemplated, “Do I just strike a check for it or should I fold on this deal to find a new house?” Most people who are faced with this question, usually just pay the difference hoping that their added expense won’t hamper their financial situation too much. That’s until, they are bombarded with another surprise a year or two later, an increase in their monthly mortgage payment! Just another stipulation that was never explained during the mortgage process.
HUD Steps on the Brakes with New Rules for Mortgages
Department of Housing and Urban Development or HUD has identified these problems with the mortgage process and has restricted lenders from giving inaccurate information to their applicants. The following are some of the new rules put in place to ensure that applicants are aware of their financial obligations.
The good faith estimate document is now longer (three pages) and much more detailed.
Lenders must provide a good faith document to applicants no later than 72 hours so they can decide if they want to go elsewhere to compare rates and fees.
Lenders must document situations in which the applicant’s mortgage payments may rise over the course of their term and how much the mortgage payment could go up to.
Lenders also need to explain that if the applicant gets a lower interest rate, he/she may have to pay more in upfront costs.
One day before closing, lenders need to provide applicants with documentation about settlement costs.
Lenders cannot change origination and processing fees from the original estimate on the good faith estimate document.
Appraisals and title insurance costs can change but only up to 10%.
Author / Marcelina Hardy – who has written 70 posts on Buying, Selling and Maintaining a Home – Homespace.
Aside from her experience in buying and selling homes, Marcelina Hardy takes an active interest in news and trends within the real estate and mortgage industries. She has a MSEd in Counseling from Old Dominion University and a BA in Psychology from the University of Massachusetts at Amherst.
I don't know if it's poetic justice, down right scary, or just as sign of the times. The Mortgage Bankers Association has to sell it's headquarters because it's underwater. Do you think they were able to get a loan modification when so many homeowners are not getting the help they were told they would get?
Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders.
But the trade group for mortgage lenders is refusing to say exactly how it extracted itself from that predicament.
On Friday, CoStar Group Inc., a provider of commercial real estate data, announced that it had agreed to buy the MBA's 10-story headquarters building in Washington, D.C., for $41.3 million. The price is far below the $79 million the trade group says it paid for the glass-walled building in 2007, while it was still under construction. The price also is far below the $75 million financing that the MBA received from a group of banks led by PNC Financial Services Group Inc. to finance the purchase.
John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. "We're not going to discuss the financing," he said. A spokeswoman for the MBA added that the MBA has reached "an agreement with all relevant parties" regarding the outstanding amount on that loan but declined to provide any details.
A spokesman for PNC, a banking company based in Pittsburgh, declined to comment.
Holliday Fenoglio Fowler LP, a real estate advisory firm, announced in June 2008 that it had arranged the $75 million financing for the MBA. At that time, HFF said the acquisition loan took the form of a variable-rate, 30-year taxable bond transaction backed by a letter of credit from PNC. HFF said such bonds are typically sold to money market funds.
In an interview late last year, Mr. Courson said he believed mortgage borrowers should keep paying their loans even if that no longer seemed to be in their economic interest. He said paying off a mortgage isn't only a matter of personal interest. Defaults hurt neighborhoods by lowering property values, Mr. Courson said. "What about the message they will send to their family and their kids and their friends?" he asked.
CoStar, currently based in nearby Bethesda, Md., plans to move its headquarters into the MBA building at 1331 L Street NW in Washington. The company was "fortunate to be able to take advantage of what we see as a historic opportunity to secure an exceptional asset at a greatly reduced price," Andrew Florance, CoStar's chief executive officer, said in a statement.
The MBA will move out of the building and rent elsewhere in Washington, the spokeswoman said. She added that a new space hadn't yet been found.
When the MBA announced the purchase of the building in early 2007, the trade group's president at the time, Jonathan Kempner, said: "We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association." In October 2009, however, the MBA informed its members that it had put the building up for sale. At that time, the MBA said that continued ownership of the building, which was financed with $75 million of variable-rate debt, would be "economically imprudent."
The MBA spokeswoman said some members have since then concluded that the trade group shouldn't be in the business of owning real estate.
The MBA had trouble finding tenants for the space in the building it didn't occupy. The trade group uses about 40% of the building's 169,000 square feet and tenants occupy about 10%, the spokeswoman said.
Falling membership and heavy debt costs related to the building have squeezed the MBA's finances in recent years. The MBA's membership totals about 2,400, down from a peak of 3,000 several years ago, but has increased recently, the spokeswoman said, and the organization expects to show a small surplus in its accounts for the fiscal year ending Sept. 30. The MBA's staff has dropped to 107 from a peak of about 150, she said.
CoStar said the District of Columbia encouraged it to move its headquarters to Washington. CoStar is to receive $6.1 million in property-tax abatements over 10 years if it meets certain conditions, including hiring 100 District residents. CoStar said it may be eligible for additional tax benefits from the District.
Most of us don't realize how much our emotions are tied into our spending habits and our build up of debt. Both of which eat away at our future by reducing how much we are contributing and building for retirement. Many of our clients at No More Mortgage have felt the same way until they experienced the peace of mind that comes with being in control of your finances and having a solid plan in place.
Do you have a fear of your financial health lurking around in the back of your mind? It's normal. Until you get a handle on your finances and your debt, knowing exactly where you stand and putting a plan in place, you're living in the financial wilderness. And the wolves are waiting to pounce on your money and your future.
We're all familiar with the term "comfort food" and often partake when fear, worry, or frustration are eating at us. The same can go for spending for many people. They go out and spend when they fell stressed out or frustrated. Or they buy something on "impulse" without thinking about how it affects their bottom line and their future.
Fear, worry, and stress all create a climate for making bad choices and a lack of focus on what you should be doing and what you want for your future. And as you buy more of what you really don't need, your robbing yourself of your future income for retirement by not contributing more, or even enough. Your emotions can lead you to become focused on today and trying to comfort yourself while you push your needs for tomorrow into the back of your mind. If you aren't thinking about your future, it's one less thing to be stressed about. So when are you going to think about your future?
Where do you feel you are right now financially? Are you treading water with no land in sight? Are you on a path where you think you're heading in the right direction but aren't really sure? Are you just winging it and hoping for the best? Or do you have a plan in place and know right where you are financially?
I'm going to guess that where you are today is not where you thought you would be if you had written it down 10 years ago. Most people haven't made much progress in the last 2 years on paying down their debt and many have increased their debt.
If you're not where you want to be, getting ahead of your debt and building your future, why aren't you? Let's look at a couple of the pitfalls or mistakes we make in managing our finances.
First of all, who do you listen to? Are you getting advice on your finances from your friends or family? They're usually in the same financial situation that you are. We tend to spend our time with people that are a lot like us. So if they aren't in a drastically better place than you are, why would you listen to them? You need to listen to people that are either much better off than you due to what they did themselves about their finances, or you need to listen to a financial professional with a track record.
What about the people on TV, talk shows, or the internet? Be careful there. You have to remember that many of the big personalities make a lot of money off of books, website subscriptions, advertising, and newsletters. They may not appear to be charging people for their "advice", but they are getting paid a lot money through other ways. Some of them give great advice and some of them really don't. And it's easy to get into information overload when you spend your time watching or listening to them since they have to cover many topics to appeal to a large audience.
Another mistake that almost everyone makes is to not know how much money they really owe when you include the interest that you will pay out based on how you've actually been paying your bills. You can't rely on looking at the balances due on your statements.
Fortunately, you can change the path you are on quite easily. You really need to find out how much you owe on all of your debt and how long it will take to pay off. Knowing this alone could help you make better decisions and could help you reduce unneeded spending.
We offer a free service at No More Mortgage where we create a "no cost, no obligation" analysis of your debt that shows you not only how much money you will pay out on your debt but how long it will take to pay it off based on how you pay your bills today. Our analysis also shows how much you could save in interest and how much sooner you could be completely debt free with our automated program that does the work for you.
Watch this short video on No More Mortgage and then call us for your free analysis at 800.285.9102
There are very important differences between No More Mortgage's automated debt elimination plan and debt settlement. You should know about these differences and how they can affect your financial future.
Let's look at the how each one comes into play in your quest to eliminate your debt and get back on track financially.
First of all, let's ask why you may be considering debt settlement. This is the most important step as it tells you which path is best for you. Cash flow is our first comparison.
If you are cash flow negative, can not cover your bills, and are headed towards losing your home, then you should talk to a bankruptcy attorney and ask about debt settlement and bankruptcy. In some cases, debt settlement is not going to help you and may hurt you more if you are headed into bankruptcy anyway. The attorney is a better place to start as many of the settlement "counselors" want to sign you up and may not be competent enough to give you the best advice.
If you can afford to pay your bills today, want to protect and improve your credit, and get on track to building a bigger and better retirement fund after becoming debt free, then read on and we'll go over some other differences. Our program isn't for someone who is cash flow negative. But we could do wonders for you if you are able to pay your bills today.
First, let's go over why you hear so many ads today for debt settlement and how it is being touted as the "path to being debt free". Debt Settlement is being advertised in much the same way the option arm mortgage was in years past. It has certain advantages for a small percentage of people, and is easy to sell. Through mass marketing and media advertising it is being offered to anyone who "qualifies" regardless of whether it's a good choice for them.
Our next comparison is about the type of debt you can "eliminate". Debt Settlement is typically targeted at someone with heavy credit card debt usually defined as "over $10,000". Settlement companies target credit card debt because it is un-secured, so they can negotiate with the creditors. If it was secured debt, such as an auto, the creditor can simply take their asset (your car) back. So unsecured debt can not help you with much of your debt that is secured, such as your home, your cars, and other physical property.
No More Mortgage's debt elimination plan is designed to help you with all of your debts, regardless of whether they are secured or unsecured. If it is a debt that is paid on monthly and can be paid off (unlike utility bills) our program could be ideal for you.
The next comparison has to do with your credit. Debt settlement can damage your credit harshly for at least 2 years and will likely continue to hurt you for much longer. The short term savings you may gain in settlement could easily cost you that and more over time as you will pay higher interest rates on any credit or lending you need after that. And that is "if" you can get credit after that for the first few years or more.
With our debt elimination program we don't do any settlement nor do we contact your creditors. And our comprehensive debt analysis system generally accelerates the pay down of your debt by attacking revolving credit first, such as credit card debt. Revolving credit can make up 30-35% of your credit score. So as your revolving credit is being paid down your score is not only "not damaged", but you could actually see your credit score improve faster than it would normally based on how you pay your bills today.
Our program does not harm your credit, and should improve it faster. Your credit score and history are used in determining not only whether to provide you with credit, but is often being reviewed when considering someone for future employment and in other ways. Your credit score is becoming more important every year. You want to keep yours in the best shape possible.
Let's compare where your money is going during the programs. With debt settlement, your money is collected and often held in an escrow account, where part of the money is being paid to the settlement company and the rest is held until there is enough to negotiate the first debt.
In our program your money is paid out directly to your creditors each month through our advanced bill pay system that does the work for you. Our system meets all of your obligations while making your payments according to your personalized analysis to save you the most time and money. We ensure on time payments while working your plan for you. And your money is transferred and paid out to your creditors by a top rated financial institution that handles transfers for many of the country's top banks.
We've helped thousands over the years to get on track to becoming debt free is a safe program that works, and does the work for them to ensure their success.
Contact us for a free CD that will further discuss our program or better yet, call us and ask for a free debt analysis that will show you how much your debt will cost you and how long it will take to become debt free based on how you pay your bills today. It will compare and show you how much sooner you could be completely debt free and how much you could save if you choose to join the thousands that are already on this path.
Everyone should know how much their debt is going to really cost them and how long it will take to pay it off the way they are paying it today. Knowing where you really stand helps you make better decisions and can help you make better choices in your spending. Get your free analysis at no cost and with no obligation. That's our gift to you for taking an important step and learning something 95% of your friends and family don't know about their own finances.
You can fill in the form at the top left for a free cd or call us and get your free analysis at .800.598.1657
If you're like most people, you think of the balances on your statements for your mortgage, credit cards, and other debts as what you owe.
Well, yes it is and no it isn't. Yes, at one moment in time a statement can show what you owe if you were to pay it off completely. And no it isn't when you factor in interest payments over time.
That interest over time is what steals your future like the thief that it is. Your debt can rob you of hundreds of thousands of dollars you should have at retirement. Debt sneaks up on you and stretches the pain out slowly so you don't notice how much it is costing you. Did you know that half way into a 30 year mortgage you can still owe 75% of the principle? We've seen credit cards that would stretch out to 40+ years or even more at the minimum payment.
Think about this for a minute. You pay your creditors back based on a schedule that they create, and they earn their living off of the interest that they charge you, along with extra fees and charges So do you think they create their payment schedules with your best interest in mind? Is your money going towards building your future, or theirs?
What they know is that most people think about the balance on their statements and figure that's about what they'll pay back. What they don't want you to know is that by utilizing a program like ours at No More Mortgage, you could pay them back significantly less and save yourself a great deal of money. Our program creates a new payment schedule that meets your obligations with your creditors and pays them back up to 75% faster allowing you to keep far more of your money and get out of debt that much faster.
The creditors also know that most people won't follow through with this on their own as they either don't have the financial discipline or the time to work their plan, month in and month out, for the time it will take to get out of debt. That's why our program does the work for you. We work to ensure that you are successful at eliminating your debt safely and wisely. Our program can often improve your credit faster than would normally happen too.
So, do you really know how much you owe on your debt, and how long it will take to pay it off based on how you're paying your debts today? We can easily show you that and also compare that to how much you could save and when you could become debt free if you take advantage of our program. We offer a free debt analysis with no obligation that will show you all of this.
To make good decisions, you need good information. Knowing how much you really owe and how long it will take to pay it off has an impact that you will not soon forget. And it can influence your financial decisions for the better. Call No More Mortgage and ask for a free debt analysis. It doesn't take long once you give us the info we need to run your analysis. And we don't need any information that would put your identity at risk. You can ask for our free audio cd using the form on the left side of the page too. It has some great information on it that could save you a lot of money.
Give us a call and let us help you get on track to a debt free future with less stress and more financial security.We're at (888) 239-3765
CREDIT CARD REFORM BILL TRIES TO HELP CASH-STRAPPED CUSTOMERS, BUT COMPANIES HAVE NEW WAYS TO BOOST PROFITS
Credit card companies are socking it to consumers left and right. They're hiking interest rates to as much as 36% and doubling minimum monthly payments, frustrating customers who are already cash-strapped and credit-crunched. In an effort to curb these abusive practices, President Obama signed into law a credit card reform act in May that's rolling out in three parts over 12 months. At the same time, credit card companies have been hard at work coming up with new ways to boost profits while sidestepping the reforms. "Card issuers are making sure they can make up the lost money in new ways," said Bill Hardekopf of Lowcards.com, a research company funded by a commercial debt collector. The first part of the law, which took effect in August, requires banks to give customers more notice ahead of major changes to their accounts, like rate hikes. Starting in February, limits will be imposed on when issuers can raise rates on existing card balances, and on new cards. In August 2010 some credit card penalty fees will be will reined in. But no legislation can fully shield consumers from the credit card industry's ongoing efforts to boost the bottom line. The worst part? "All of these hikes are taking place simply because they can," Hardekopf said.
1) RATE HIKES: Interest rates are out of this world. "They've increased steadily over the past 5 years, and in general are higher than they've ever been," said Josh Frank, senior researcher at the Center for Responsible Lending (CRL), who says he's seen annual percentage rates as high as 36%. No current laws cap credit card interest rates, according to Pamela Banks of Consumers Union, the nonprofit publisher of Consumer Reports, so technically the sky's the limit. But the CARD act will help curb abusive practices. As of February, issuers won't be able to arbitrarily raise rates on existing balances. But cardholders will still be subject to interest hikes for late payments and various other infractions. And card companies will be able to raise their rates as high as they want, whenever they want, on future purchases even after the reform bill kicks in completely. The act will bring protections for new customers; issuers will no longer be able to hike rates on new accounts in the first 12 months, unless the borrower is delinquent by more than 60 days or the increase is stated in the contract. Keven Vallance recently saw the rate on his Sears card increase from 9.99% to 13.99% for no apparent reason. When Vallance called Sears Credit, which is owned by Citibank, a rep told him every cardholder's rate is increasing by 4%. Citi spokesman Samuel Wang said in an email that the company has "adjusted pricing and card terms for some customers as part of our regular account reviews." Consumer outrage is boiling over. Last month, a disgruntled Bank of America customer posted a YouTube video complaining her bank "jacked up my interest rate to a whopping 30% APR." Her rant went viral, and BofA dropped her rate back to its original 12.99%.
2) NEW FEES: Fees aren't just rising -they're multiplying. Cardholders are getting slapped with fees they've never seen before. The hitch: New laws can address only existing fees and business practices; they can't predict what credit card companies will do in the future. "Theoretically, they could create a fee for names that begin with 'J,'" said Lowcards.com's Hardekopf. In reality, customers are seeing new annual fees, inactivity charges and more. Not of these charges are unheard of, but many fees that were unusual are becoming commonplace. Earlier this month, for instance, some Bank of America customers were shocked to learn that their no-fee credit cards would be subject to a new annual fee. BofA spokeswoman Betty Riess said the fees are part of a company test that affects 0.5% of all consumer accounts, and that the fees range from $29$99. The charges will be levied in February, and Riess said customers were chosen "based on risk and profitability" but have the option to reject the fees by canceling their accounts. Fifth Third Bank recently introduced a $19 inactivity fee for customers who don't charge anything for 12 months, and Citibank is hitting some consumers with a fee if they put less than $2,400 on their card annually. To address this problem, House Financial Services Committee Barney Frank (D-Mass.) has proposed a new regulatory body, the Consumer Financial Protection Agency, which would approve new credit card fees. While the House Financial Service Committee approved the agency, it remains to be seen whether legislation will pass; lawmakers are battling over this and other reform proposals floating around Washington.
3) HIGHER MINIMUM MONTHLY PAYMENTS: Banks are also demanding bigger and bigger minimum payments. Chase has bumped up the minimum payment for some consumers to 5% of the monthly balance from 2%. For someone who carries a $5,000 balance, that means the monthly payment of $100 skyrockets to $250 -a whopping 150% increase. Consumer Union's Pamela Banks says her organization has compiled a wealth of anecdotal evidence that indicates such increases in minimum monthly payments are widespread. "This is making payments virtually impossible for some people," she said. "It's throwing people off when they were living on a tight budget anyway." Some good news is on the way, however. After February, card companies won't be able to increase monthly minimum payments by more than 100%. For example, a bank cannot increase a 2% minimum payment to any higher than 4%. And this so-called "doubling" will be allowed only once during the life of the card.
4) FEWER REWARDS: Say goodbye to beach vacations and new iPods just for swiping your card. Rewards programs have been enticing shoppers to charge a purchase rather than paying cash -but card issuers are cutting back those perks. "This is happening with a significant amount of cards," Hardekopf said, adding that many consumers are now receiving 1% cash back instead of the 2% or 3% they once enjoyed. American Express recently cut its Blue Card's cash back policy from 1.5% to 1.25%. And all AmEx customers who make a late payment will no longer accrue points on their purchases -however, those points can be reinstated with a $29 fee.
5) SLASHED CREDIT LIMITS AND CANCELED ACCOUNTS: Without so much as a call from the bank, some customers are learning their credit limits have been slashed by as much as 75%, or that their accounts have been closed altogether, according to the Center for Responsible Lending's Josh Frank. Citibank recently closed what a spokesman called a "limited number" of MasterCard gas cards co-branded with Citgo, ExxonMobil, ConocoPhillips and Shell. "People go to make a purchase, and they find out about these huge changes only when they're denied," Frank said. "It's a shock, and it's been happening a lot." Even cardholders who don't charge anything might find their accounts abruptly closed, Frank said. With credit losses at a record high, companies see inactive cards as a red flag and close the accounts to avoid the worry of future writedowns. "Usually cardholders have this credit line available for an emergency, for this kind of current economic situation," Frank said. "But now they're turning to it when they need it, and it's gone."
What's a cardholder to do? Consumers must pay close attention to the terms of their contracts, staying alert to any changes. "It's boring reading, and it can be hard to understand, but that's where everything is spelled out," said Lowcards.com's Hardekopf. Of course, while there are laws aimed at helping consumers, legislation can't do it all. "As we close the loopholes on some things, they open up elsewhere," said Consumer Union's Banks. "Reform acts don't cover everything, and cardholders have to watch out for their own accounts." And if you don't like your credit card's new terms? "Shop around -you are not married to your card," Hardekopf said. "It's a partnership, not a lifelong contract."
STEPHANIE SKINNER RECENTLY RECEIVED ONE OF THOSE LETTERS THAT CREDIT CARD ACCOUNT HOLDERS DREAD; her 11% rate had been raised to 29.99%. And when she called Citibank to complain, she was placed squarely between a rock and a hard place. Accept the higher rate, she was told, or close the card and accept the damage to her credit score.
"I said to them, 'You're giving me the option to either shoot myself in the foot or shoot myself in the hand. That's just unacceptable,'" said Skinner, from Greenville, S.C. She holds only two credit cards, so the hit to her credit score from closing one would be significant. "What am I supposed to do?" she wondered. It's a frequent question for American consumers these days. Half of all account holders say they've been hit either with a higher rate or a lower limit in recent months. While consumers are customarily given the choice to decline the new terms and close the account, doing so flies in the face of all standard advice from personal finance experts because closing credit cards usually has a negative impact on credit scores. "Credit utilization" is one of five important factors used to determine a consumer's score. Closing a card with a $10,000 limit means the consumer has $10,000 less in credit. If that consumer owes $5,000 on a second card with a $10,000 limit, their utilization just shot from 25 to 50 percent, a credit score killer.
So which bad choice is right for Skinner and other consumers facing the same conundrum? The answer is perhaps even more maddening than the question: "It depends" and "there's no surefire way to know ahead of time." But there are some clear guidelines that can help. For starters, closing an account will never help your credit score, despite persistent mythology to the contrary. The only time closing a credit card account is a good idea is when keeping it open will do even more damage than the lowered credit score. No one can say precisely how much closing a credit card account will hurt your credit score -too many other dynamic factors go into calculating the number. Fair Isaac, which owns the credit score formula, says the impact can range from zero points to "dozens of points," according to spokesman Chris Groppa.
Dozens of points doesn't sounds so bad, right? Wrong, says Credit.com's John Ulzheimer, himself a former Fair Isaac employee. "The amount of their score drop isn't as important as whether or not they cross the lines between approved and declined, and better rate or not as good of a rate," he said. "Example: If my score goes from 685 to 675 then that's only 10 points so no big deal, right? But what if (the consumer) applied for a car loan and the lender offered 7.9 percent above 680 and 9.9 percent for someone below 680. Then the 10 points become very meaningful. This isn't unrealistic as all lenders use score-tiered decision tables." In other words, if you are planning to buy a house or a car in the next month or two, closing a credit card is a terrible idea -even if your interest rate is about to skyrocket. But outside of that backed-into-a-corner situation, consumers should feel comfortable exercising their right to fire their credit card company and accept the consequences. "People shouldn't let worry over FICO scores rule their lives," Groppa said.
For starters, a higher rate will cost money today for anyone who doesn't pay their balance in full. A credit score drop of 20 points or so might cost you money tomorrow. But you don't know how much, and you don't know how long the credit score hit will last. It's smart to take the sure savings today and close the card. There are strategies for minimizing the negative impact once you do so. First, carrying a low balance or paying off your cards is the best insurance against the penalty of closing a card. If a consumer closes a card and loses $10,000 in available credit, but pays off $10,000 in debt on other cards, the available credit would remain equal and there would be no or minimal impact on a credit score, he said. Of course, that's not always realistic. A second route to a similar result is to open new credit cards with limits that replace the lost credit.
In August, prices rose in 17 oF 20 cities. Only Charlotte, Cleveland and Las Vegas recorded month-to-month declines. In the past year, prices are down 11.3% in the 20 cities. Prices in all 20 cities were lower in August 2009 than in August 2008, but in general, year-over-year declines have lessened. "We do want to remind people of the upcoming expiration of the federal first-time buyer's tax credit in November and anticipated higher unemployment rates through year-end," said David Blitzer, chairman of the index committee at S&P. "Both may have a dampening effect on home prices."
Economists at Goldman Sachs said they expect a further 5% to 10% decline in prices. Falling values have been a major factor contributing to the chaos in the global economy, because financial institutions made too many bad bets that U.S. home prices would never fall. Millions of homeowners have found themselves owing more on their house than it is worth. They cannot sell for what they owe, and they cannot refinance their home loans. Nor can they borrow against their home to finance their consumption. Trillions of dollars of wealth have evaporated. Rising unemployment is now driving foreclosures. Another wave of foreclosures from interest-payment-only mortgages is anticipated, beginning in spring 2010.
Following are, in descending order, the price changes in each of the 20 cities in August:
Minneapolis, up 3.2%
San Francisco, up 2.8%
Detroit, up 1.9%
Chicago, up 1.7%
Los Angeles, up 1.6%
Phoenix, up 1.6%
San Diego, up 1.6%
Washington, up 1.4%
Miami, up 1.1%
Atlanta, up 1%
Denver, up 1%
Boston, up 0.9%
New York, up 0.5%
Tampa, up 0.4%
Portland, up 0.3%
Dallas, up 0.2%
Seattle, up 0.1%
Las Vegas, down 0.3%
Charlotte, down 0.4%
Cleveland, down 0.5%
Following are, in descending order, the price changes in each of the 20 cities from August 2008 to August 2009:
Las Vegas, down 29.9%
Phoenix, down 25.1%
Detroit, down 22.6%
Miami, down 18.8%
Tampa, Fla., down 17.7%
Seattle, down 14.7%
Minn., down 13.7%
Chicago, down 12.7%
Portland, down 12.5%
San Fran., down 12.5%
Los Angeles, down 12%
Atlanta, down 10.6%
New York, down 9.6%
San Diego, CA down 8.9%
Charlotte, NC, down 8.6%
Washington, down 7.9%
Boston, down 4.2%
Cleveland, down 2.8%
Denver, down 1.9%
Dallas, down 1.2%
From an article found on The Daily Reckoning, we have some not-so-exciting news:
Take a look this graph, from The Economist, which shows the industrial production of emerging Asia compared to the United States.
Click for larger image
Looks like Asia is recovering pretty well. The chart above clearly illustrates the "decoupling" that became such a hot topic of discussion last year. The idea was that the Emerging markets would not necessarily follow lockstep with the Western countries.
The Developed World suffers through what Richard Koo, the chief economist at Nomura Research in Tokyo, calls a "balance sheet recession." The Western world suffers from too much debt. That fact shifts the focus from making profits to repaying debt, according to Koo. Debt repayment will continue until the West repairs its balance sheets, a process that takes years to correct, as Japan's long recession shows.
So the same dynamics that make emerging markets look good, work in reverse for the Developed World. According to Anderson's model, the stressed balance sheets of the Developed World predict slow growth.
As investors, then, we'll have to continue to look to the emerging markets for growth. The market never ladles out its rewards evenly, though. To drill down further, the big winner is really Asia and its big markets of China, India and Indonesia.
Anderson estimates that these regions could grow 7% or more annually, well above the tepid rates of developed markets and better than most emerging markets. "This is a very hefty gap," he writes, "and one that is very likely to continue to reward investors who take advantage of the opportunity."
Census Bureau reports that Maryland had the highest median income level in 2008, at $70,545, while Mississippi ranked very last with $37,790. Maryland is the nation's top-earning state for the third year in a row, with a median household income of $70,545 in 2008, according to a U.S. Census Bureau report released Monday. The states with highest median incomes are concentrated in the far West and in the Northeast, around the District of Columbia. Most of the lowest-earning states are in the South. Mississippi had the lowest median income of just $37,790, while West Virginia ($37,989), Arkansas ($38,815), Kentucky ($41,538), and Alabama ($42,538), round out the bottom five. The four highest earning states after Maryland, are New Jersey, which has a median household income of $70,378, Connecticut ($68,595), Alaska ($68,460) and Hawaii ($67,214).
Real Earning Power: But if you're thinking of moving to Maryland in search of big bucks think twice. While Maryland's median income is nearly twice that of Mississippi, the locals there aren't necessarily walking around with twice as much money in their pockets, because of the difference in the cost of living in each region. "It's very important to compare cost of living," said Erol Yildirim, chief economist for the Council for Community and Economic Research. "Purchasing power is very different for different areas." And the cost of living in Bethesda, Md., is about 52% higher than it is in Tupelo, Miss., according to Yildirim. A dozen eggs costs $1.93 in Bethesda, compared with $1.30 in Tupelo, while a loaf of bread is $1.66 compared with $1.17. And there is a huge difference in housing costs. The average apartment rental in Bethesda is $1,464 a month versus just $512 in Tupelo. And the median home price in Bethesda is $529,707 compared with just $220,000 in Tupelo. Taking these living expenses into account wipes out much of the advantage of Maryland's higher income. Once purchasing power is taken into account, Southern and Midwestern states become much better bargains. In fact, all things considered the Number One state for income and cost of living is…are you ready… North Dakota! (the state also has a budget SURPLUS, the only one in the Union that can boast this distinction).
Change in Pay: Florida was the only state where median income actually declined, falling 0.01% before adjusting for inflation. Michigan and Montana barely inched up, by about 0.3% in each case. Income in Indiana (1.1%) and Maine (1.5%) also increased very modestly. But with inflation at over 3%, those states were effectively in negative territory. Louisiana saw the biggest jump in income, up 6.9%. But that may be the result of all the Federal dollars flowing into the area to rebuild it after Katrina. The state's unemployment rate averaged less than 5% during 2008. Another big winner was the District of Columbia, which saw median income rise 6.7% in a year when the White House changed hands. Alaska (6.4%), Hawaii (6.3%) and Delaware (6.2%) also recorded solid gains. Brookings Institute demographer William Frey notes that the current economic downturn may have actually given these median income levels a boost. That's because when times get tough, many of the lowest-paying jobs disappear, artificially boosting income statistics. And many of the workers who hold the lowest-paying jobs are immigrants, who are often highly mobile, and may elect to return home and opt out of the U.S. workforce altogether. Frey notes that in 2008, the percentage of foreign-born U.S. residents fell to 12.5% from 12.6% in 2007, due mostly to a downturn in net immigration from Mexico, said Frey. "When many low income people leave," said Frey, "median income can go up."
It was very impressive, and exciting to see Bryan Kariya make such big plays, and receive such high commendation from coaches and team mates for his performance in BYU's win over Oklahoma. Bryan spent his summer working at NO MORE Mortgage as a Personal Finance Analyst, helping families put in place a disciplined and customized financial plan to help win the battle against debt. The mission of NO MORE Mortgage is to reverse the tide of consumer debt in America.
Excerpt:
"BYU coach Bronco Mendenhall doesn't like to single out individual players for their perfomances, but he couldn't help himself Saturday night after the Cougars edged past shell-shocked Oklahoma 14-13 at Cowboys Stadium.
"'Bryan Kariya, if it were up to me, he would be the player of the game,' Mendenhall said. 'No one knew that he could play at that level on this stage, except maybe us. We had complete trust in him.'"
The “real” cost of living is important in finding out which states are the cheapest, and which states are the most expensive. In other words, New York and California are TRULY the most expensive states in the nation. Alaska is #1.
According to 2006 census estimates from the American Community Survey, the median household income in California was $56,645…
NO MORE Mortgage urges each parent to give serious consideration to the financial education of their children. The attached is a great set of suggestions for parents to help their teens take more financial responsibility. The websites in suggestion #1 seem especially helpful.
Your kids are heading back to school to dive into stuff like math, English, history, checkbook balancing. Oops, I guess you caught me day-dreaming with that last one.
But why shouldn't kids learn the basics of practical money management? Isn't that an essential part of growing up, even more so than, say, square roots? Shouldn't they know how to deal responsibly with credit cards, how to tell the difference between term- and whole-life insurance, how mortgage amortization works, how to create a household budget?…..
BOSTON — The Federal Deposit Insurance Corp. reported Thursday that the number of distressed banks rose to the highest level in 15 years as its insurance fund continued to shrink.
More lenders ran into financial trouble during the second quarter with recession saddling banks with soured loans, according to the report.
The FDIC said that the number of troubled banks rose to 416 at the end of June from 305 at the end of March. This is the largest number of banks on its "problem list" since June 30, 1994, when 434 banks were on the list, which isn't disclosed by the FDIC.
Assets at troubled banks totaled $299.8 billion, the highest level ever recorded, the agency said.
Banks insured by the FDIC swung to a total quarterly loss of $3.7 billion from last year when they reported a total profit of $4.8 billion….
Maybe a utility bill went unpaid after you moved and the missed payment went into collections. Or, perhaps there are unpaid library fines or parking tickets in collections that are hanging onto your credit history and affecting your FICO credit score, which is widely used by lenders to evaluate your ability to repay a debt.
With the newest version of the FICO credit-scoring system, however, minor delinquencies are now overlooked in calculating creditworthiness.
Under the updated scoring model, called FICO 08, small, missed payments lingering in collections with original amounts of $100 or less will no longer do damage to your credit score.
NO MORE Mortgage looks at the History, Predictions and Competition of technology and Industry.
Wriston's Law is named after the late Walter Wriston, a giant of banking and finance. In his 1992 book, The Twilight of Sovereignty, he predicted the rise of electronic networks and their chief economic effects.
Wriston said capital (meaning both money and ideas), when freed to travel at the speed of light, "will go where it is wanted, stay where it is well-treated."….
NO MORE Mortgage thinks that there is nothing worse than fear in the markets.
In the markets it is often said that stocks can climb a “wall of worry” but when the mentality starts to turn, and people begin to fear that the rally is over-extended, and when there is really no fundamental change in the economy on which to justify a 40% rally, then one or two triggers can send the market into a tailspin.
NO MORE Mortgage wants to point out a few realities a) the TARP money (bailout) has benefitted banks, not regular business. b) the “shovel ready projects” are just that, PROJECTS. They are not JOBS. They are not new CAREERS. They are only temporary. c) Cash for Clunkers is the same thing—temporary. What will happen to car sales in September once the program expires? d) businesses keep on laying people off, and home values still keep on going down. This is what popped the bubble in the first place. The root causes of the recent market break are still not cured.
Here is the report from NEW YORK (MarketWatch) — U.S. stocks dropped at Wednesday's start after a steep drop in Chinese equities fanned worries that stock valuations had surpassed reasonable expectations of a potential global economic recovery.
NO MORE Mortgage waits to see what the national effect is going to be on the legislation of Credit Card Accountability, Responsibility , and Disclosure act of 2009.
Consumer advocates and a banking-industry association are pointing to
bank regulations signed into law in May as the catalyst for a host of
new fees instituted on consumer credit cards.
The legislation, known as the Credit Card Accountability,
Responsibility, and Disclosure Act of 2009, (CARD), places new
restrictions on credit card lending and eliminates some fees –
including the over-the-limit fee — which banks have traditionally
charged consumers who break through spending limits……
NO MORE Mortgagecontinues to believe taxes are ON SALE right now, and those who have money in an IRA might well consider moving the money over to a ROTH. In our minds, the advantages of a ROTH far outweigh the benefits of a traditional IRA, and when you can spread the tax impact over 2 years, that is an additional perk.
