Friday, January 29, 2010

State Tax Revenue Drops

let us take a look

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State Tax Revenue in U.S. Drops Most Since 1963, Study Says

Jan. 7 (Bloomberg) -- U.S. state tax collections fell the most in 46 years in the first three quarters of 2009 as the recession shrank revenue from sources including personal income, the Nelson A. Rockefeller Institute of Government said.

Revenue dropped 13.3 percent, or $80 billion, compared with the same nine months of 2008, to $523 billion, the institute said. Collections in the third quarter alone sank 10.9 percent to about $162 billion, according to the report released today by the Albany-based body. It was the fourth straight quarterly decline. The institute is the public policy research arm of the State University of New York.

“The first three quarters of 2009 were the worst on record for states in terms of the decline in overall state tax collections, as well as the change in personal income and sales tax collections,” Rockefeller analysts Lucy Dadayan andDonald J. Boyd wrote in the report. The institute explores ways to help state and federal governments work better.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5OM27Cn39Yk

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Home Sales Down

WASHINGTON - Sales of previously occupied homes in the United States took the largest monthly drop in more than 40 years last month, plunging far deeper than expected after lawmakers gave buyers extended time to use a tax credit.

The National Association of Realtors says sales fell 16.7 per cent to a seasonally adjusted annual rate of 5.45 million in December, from an unchanged pace of 6.54 million in November. Sales had been expected to fall by about 10 per cent, according to economists surveyed by Thomson Reuters.

Buyers were no longer scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30, but Congress extended the deadline until April 30.

http://money.ca.msn.com/investing/news/business-news/article.aspx?cp-documentid=23324654

Avoid Credit Card Late Payment Penalty

let us take a look:

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Credit card penalty rates can top 30 percent; how to avoid them

Think it costs a lot to borrow on your credit card now? Make a late payment and your interest rate could jump to more than 30 percent.

Default interest rates -- the penalty rates charged when borrowers violate the terms of their card agreements -- can be two to three times higher than regular rates on your credit card. The current national average default rate stands at 27.88 percent and the mean default rate is 28.99 percent, according to data compiled by CreditCards.com. And while credit card reforms are tightening the rules on how quickly issuers can implement them, default rates are still an indignity that should be avoided at all costs.

http://www.foxbusiness.com

Lenders Sue Walkaways

let us take a look:

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Lenders Pursue Mortgage Payoffs Long After Homeowners Default

Jan. 28 (Bloomberg) -- When John King stopped making payments on his home in Coral Gables, Florida, two years ago, he assumed the foreclosure ended his mortgage contract, he said. Last month, a Miami-Dade County court gave collectors permission to pursue him for $44,000 stemming from the default.
King is among a rising number of borrowers who are learning that they can be on the hook for years after losing their homes. Amid a crisis that stripped $6.4 trillion, or 28 percent, from the value ofU.S. residential real estate since the 2006 peak, lenders are exercising their rights to pursue unpaid mortgage balances. To get their money, they can seize wages, tap bank accounts and put liens on other assets held by debtors.
“The big dogs get a bailout, and the little man gets no mercy,” said King, 39, referring to the U.S. government’s rescue of banks and other financial institutions.

http://www.bloomberg.com/apps/news?pid=20603037&sid=aIf_vUQZFt.s

Oregon PERS Unsustainable

let us take a look:

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Climbing PERS expenses face Oregon pension board, agency budget writers

The cost of Oregon's Public Employees Retirement System is about to skyrocket to budget-busting levels.

As a result of PERS' $17 billion investment loss in 2008, every state agency, municipality and school district that participates in the system is staring at an average 50 percent increase in the base rates PERS charges to fund their employees' retirement benefits in 2011 and 2012.

http://www.oregonlive.com/business/index.ssf/2009/10/looking_down_the_barrel_of_per.html

Sunday, January 24, 2010

Bankruptcy on the Rise

let us take a look:

Personal Bankruptcy Filings Rising Fast

The number of Americans filing for personal bankruptcy rose by nearly a third in 2009, a surge largely driven by foreclosures and job losses.

And more people are filing for Chapter 7 bankruptcy, which liquidates assets to pay off some debts and absolves the filers of others. That is significant because a 2005 overhaul of federal bankruptcy laws aimed to encourage Chapter 13 filings, which force consumers to sign onto debt-repayment plans in exchange for keeping certain assets.

The changes were designed to make it more difficult for people to shed their debt, particularly in a Chapter 7 filling. A "means" test, for example, was introduced to separate those who could afford to repay their debt from those who couldn't. A Chapter 7 filing is off the table if the means test determines a person is able to pay back at least a portion of the debt after it is restructured.

The worst U.S. recession in a generation is testing the effectiveness of these laws. The economic downturn also has prompted more middle-class Americans to file for bankruptcy protection.

Overall, personal bankruptcy filings hit 1.41 million last year, up 32% from 2008, according to the National Bankruptcy Research Center, which compiles and analyzes bankruptcy data. It is the highest level of consumer-bankruptcy fillings since 2005. Consumers rushed to file in 2005 before the new bankruptcy laws took effect in October of that year.

Chapter 7 filings were up more than 42% as of November 2009, compared with the same period a year earlier, according to the research center. November is the most recent month with analyzed data available. Chapter 13 filings rose by 12% and made up less than a third of 2009 filings as of November.

http://online.wsj.com/article/SB126263231055415303.htmlw

Loan Modification Program bogging down

let us take a look:

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450,000 at risk in foreclosure-prevention program

"................About 450,000 homeowners currently have HAMP trial modifications and have demonstrated a willingness and ability to make timely payments for at least three months," said Richard Neiman, superintendent of the New York State Banking Department.

"Now, unfortunately and very alarmingly, these same homeowners face the prospect of foreclosure strictly on account of documentation issues," he said.

Paperwork has proved a major stumbling block for the president's foreclosure-prevention program. Homeowners complain that their servicers continuously lose the documents they send in, while financial institutions argue that borrowers have not been sending in their paperwork..........."

http://money.cnn.com/2010/01/23/news/economy/loan_modification_problems/index.htm

Thursday, January 21, 2010

Credit Card Defaults on the rise

let us take a look:

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Fitch: U.S. Retail Credit Card Defaults Hit Near-Record Levels with No Relief in Sight

U.S. consumers defaulted on store-branded credit cards at near-record levels during the holiday shopping season, with 2010 likely to bring more of the same trend, according to Fitch Ratings.

Fitch's December Retail Credit Card Index results show that more than one in every eight dollars of receivables was written off as uncollectable during the November collection period on an annualized basis. Taken with the recent delinquency trends and Fitch's expectation for unemployment, Fitch expects retail card chargeoffs to remain elevated throughout first half-2010.

"We do not foresee any meaningful improvement in the retail card credit quality in the coming months," said Managing Director Michael Dean. "U.S. consumers remain under stress on a number of fronts, most notably on the employment front, and retail card chargeoffs will continue to reflect those pressures."

http://insurancenewsnet.com/article.aspx?id=154105

New rules for mortgage 2010

Let's take a look:

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New mortgage rules curb closing-cost surprises

Buying a home should be a joyful experience, but all too often, the mortgage settlement process leaves consumers confused, angry and paying more than they anticipated.

The reason? Closing costs and fees that are significantly higher than the lender's original estimates. Borrowers find themselves faced with two unappealing choices: Pony up or walk away and start searching for another house.

Now, after years of wrestling with different factions of the mortgage industry, the Department of Housing and Urban Development has adopted rules designed to prevent last-minute closing surprises. The rules, which took effect Jan. 1, will reduce closing shocks and save home buyers money, says Timothy Dwyer, CEO of Entitle Direct Group, a title insurance company. In addition, he says, "You'll be better informed and educated."

The biggest change involves the good faith estimate, the form lenders give consumers when they apply for a mortgage. The good faith estimate isn't new, but in the past, the document wasn't particularly helpful to consumers, says Sylvia Alayon, vice president of operations at the Consumer Mortgage Audit Center. What has changed:

http://www.usatoday.com/money/economy/housing/2010-01-17-closing-cost-rules_N.htm

Mortgage Motification not delivering results.

Let's take a look:

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Why Mortgage Modification Isn't Working

The loan adjustment success rate is just 1%.

Last year more than two million Americans lost their homes to foreclosure. This year that number is expected to be even higher.

Foreclosure takes a huge toll on homeowners and their families, and sends shock waves throughout the economy. Yet since the start of the recession in 2007, more than five million homes have been taken back by lenders. The Center for Responsible Lending estimates that as many as 13 million more homes could fall into foreclosure over the next five years.

To combat the foreclosure epidemic, the Obama administration created the Home Affordable Modification Program (HAMP) last February. As part of this program, the Treasury Department plans to spend up to $75 billion in financing mortgage "modifications" for struggling homeowners.

The modification process changes the terms of the mortgage with the aim of making it more affordable, typically by reducing a borrower's interest rate, lowering his monthly payment, or waiving or reducing past charges. Unfortunately, HAMP has had less than stellar results.

Since the program began, more than three million homeowners have become eligible for assistance. In turn, mortgage servicers have reached out to these borrowers, initiating the modification process. Roughly 760,000 homeowners have received loan modifications on a trial basis. But just 31,000 modifications have been made permanent.

That's a success rate of just 1%. This means that up to 99% of eligible homeowners struggling with their mortgage payments have been unable thus far to modify their loans.

http://online.wsj.com/article/SB10001424052748704541004575011420045962424.html?mod=googlenews_wsj

Friday, January 8, 2010

Consumer Credit Record Drop

Let's take a look

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Consumer Credit in U.S. Drops Record $17.5 billion:

Jan. 8 (Bloomberg) -- Consumer credit in the U.S. dropped a record $17.5 billion in November as unemployment close to a 26- year high discouraged borrowing and banks limited access to loans.

The slump in credit to $2.46 trillion was more than anticipated and followed a revised $4.2 billion drop in October, Federal Reserve figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News projected a decrease of $5 billion. The series of 10 straight declines was the longest since record-keeping began in 1943.

A labor market that’s shed 7.2 million jobs since the recession started in December 2007 is restraining consumer spending that accounts for about 70 percent of the economy. Fed policy makers have said tighter bank lending standards and reductions in credit lines are hampering the recovery.

http://www.bloomberg.com/apps/news?pid=20601087&sid=axUfVp0dw8wA&pos=1

Wednesday, January 6, 2010

Prime Credit Next Foreclosures

let us take a look:

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Jan. 4 (Bloomberg) -- Homeowners with the best credit are the next big risk for the U.S. housing market.

An increase in mortgage defaults amongprime borrowers in 2009 is likely to accelerate this year, slowing the real estate recovery even as Americans become more optimistic about the economy, said Robert Shiller and Karl Case, the economists who created the S&P/Case-Shiller Home Price Index.

“There will be continuing foreclosures, and not just subprime, it will be prime mortgages,” Shiller, a professor at Yale University, said in an interview. “This is creating a huge shadow inventory of homes that are still owned, but they’re going to be on the market in the next year or so.”

The number of prime mortgages overdue by at least 60 days more than doubled in the third quarter from a year earlier to 838,000, according to a Dec. 21 report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Unemployed homeowners struggling to pay their bills willdefault on their home loans and increase foreclosures, Shiller and Wellesley College’s Case said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=am2z88Oy1kJs

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Tuesday, January 5, 2010

Higher FICO Lower Payment

Let us Take a Look

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.......................A $200,000 30-year fixed rate loan in California would cost a borrower with a 760 FICO $1,182 per month, or $364 less on each payment than for a borrower with a score below 620, according to myFICO.com, Fair Isaac's consumer-oriented Web site.............................

.............................HIGHER FICO, LOWER PAYMENT

As the credit-scoring system grew larger, it became more prone to errors, critics say. Credit reporting companies process some 4.5 billion pieces of data every month, and some 79 percent of consumer credit reports contain errors, according to a 2004 report by the Federation of State Public Interest Research Groups.

Congress in 1970 required that companies verify and correct incorrect information within 30 days, opening the door for a new industry of credit repair services that often hound credit bureaus to get information expunged......................

http://www.foxnews.com/story/0,2933,271594,00.html

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Sunday, January 3, 2010

2010 the Year of the Short Sale?

Banks are increasingly participating in short sales. Let us take a look.

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Luxury-Home Owners in U.S Use 'Short Sales as Defaults Rise

Dec. 17 (Bloomberg) -- Homeowners with mortgages of more than $1 million aredefaulting at almost twice the U.S. rate and some are turning to so-called short sales to unload properties as stock-market losses and pay cuts squeeze wealthy borrowers.

“The rich aren’t as rich as they used to be,” said Alex Rodriguez, a Miami real estate agent with JM Group USA Inc., whose listings include a $2.9 million property marketed as a short sale because the price is less than the mortgage, leaving the bank with a loss. “People have reached the point where they can’t afford the carrying expenses of a $2 million home.”

Payments on about 12 percent of mortgages exceeding $1 million were 90 days or more overdue in September, compared with 6.3 percent on loans less than $250,000 and 7.4 percent on all U.S. mortgages, according to data fromFirst American CoreLogic Inc., a Santa Ana, California-based research firm. The rate for mortgages above $1 million was 4.7 percent a year earlier.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQED_96QBBkk

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Saturday, January 2, 2010

Credit Card Fees On The Rise

Let us take a look:

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Banks Roll Out New Check, Card Fees

The nation's banks will be bombarding customers with new fees and products in 2010 as they try to replace more than $50 billion in revenue wiped out by new rules that clamp down on certain business practices.

So far, the changes are mostly concentrated in checking accounts and credit cards. In addition to attaching new fees to old products, banks are introducing new types of accounts that they hope will reel in new customers and reduce their funding costs.

For plastic, the new rules go into effect in February as part of the Credit Card Act of 2009. The rules will limit some interest-rate increases, require more disclosure to customers and prohibit banks from raising interest rates on current balances unless a customer is at least 60 days behind in a payment.

Credit-card issuers collected $22.9 billion in penalty fees—such as those assessed for late payments—in 2009, up from $19 billion in 2008, said Robert Hammer, who runs a credit-card consulting firm in Thousand Oaks, Calif.......

http://online.wsj.com/article/SB10001424052748704162104574630360393559766.html?mod=rss_Today's_Most_Popular

Loan Modification Pitfalls

Let us take a look

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U.S. Loan Effort is Seen Adding to Housing Woes

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good..............

....................desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

http://www.nytimes.com/2010/01/02/business/economy/02modify.html?scp=2&sq=mortgage&st=cse

Friday, January 29, 2010

State Tax Revenue Drops

Home Sales Down

Avoid Credit Card Late Payment Penalty

Credit card penalty rates can top 30 percent; how to avoid them

Lenders Sue Walkaways

Oregon PERS Unsustainable

Climbing PERS expenses face Oregon pension board, agency budget writers

Sunday, January 24, 2010

Bankruptcy on the Rise

Personal Bankruptcy Filings Rising Fast

Loan Modification Program bogging down

let us take a look:

450,000 at risk in foreclosure-prevention program

Thursday, January 21, 2010

Credit Card Defaults on the rise

New rules for mortgage 2010

Mortgage Motification not delivering results.

Let's take a look:

Why Mortgage Modification Isn't Working

The loan adjustment success rate is just 1%.

Friday, January 8, 2010

Consumer Credit Record Drop

Wednesday, January 6, 2010

Prime Credit Next Foreclosures

Tuesday, January 5, 2010

Higher FICO Lower Payment

Sunday, January 3, 2010

2010 the Year of the Short Sale?

Saturday, January 2, 2010

Credit Card Fees On The Rise

Banks Roll Out New Check, Card Fees

Loan Modification Pitfalls

Credit Repair

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