California Housing Market Shows Upswing

Figures collated in February show a small but significant improvement in the housing market in Southern California. As compared to February 2009, prices have risen by about 10%. The positive turn is not limited to sale prices alone. Fewer foreclosures were recorded last month, showing that the local homeowners are in better financial situation than they were last year. [Read more…]

Senators Up in Arms against Yuan Manipulation by China

China’s currency policy is likely to come under fire if a bill introduced by a bipartisan group of senators in the US is accepted into the legal framework of the country. The legislation is aimed at prompting Obama’s administration to take effective and immediate action against countries like China, which have been suspected, for some years, of purposely pressuring down its currency to gain an edge in the international trade. [Read more…]

Home Construction Rates Fall But Still Exceed Expectations

Although home construction rates declined in the month of February, they still exceeded the expectation of analysts and economists. The government published the home construction statistics recently, which revealed this trend. [Read more…]

Common Misconceptions about Credit Scores

A number of misconceptions float around about credit scores; most of them are actually propagated by totally profit centered debt settlement companies. It is important to be aware of what is true and what is not, to avoid getting fooled by manipulative people. Here are some of the popular misconceptions about credit scores. [Read more…]

How to Prepare for Health and Medical Expenses

Medical expenses have been rising despite the recession and they have become one of the biggest burdens faced by people in the post retirement phase of their life. Financial experts have tried to educate the public about the need to plan for medical expenses but very few people in the U.S. do any kind of future planning for medical bills that are likely to pile up as they grow older and lose some of the benefits that come with employment. [Read more…]

How to Get Yourself Out of Debt

If you’ve lost your job in the recent economic turmoil or lost money in the stock market, or if the price of your new house has collapsed, you could be looking for a way to get yourself out of debt. It is easy to feel worried and disheartened, but that is exactly what you should not do in this situation. Keep a clear mind and try to find a way out. Here are some things that you should try. [Read more…]

Falling Credit Card Debt Numbers Could Be Because of Charge Offs

It has been reported recently that credit card debt is falling, which we are told is a clear sign that the financial situation of consumers is improving. These reports emerge from the data released by the Fed, showing that revolving credit on the books of financial companies is falling. But these figures could be misleading. [Read more…]

Revised Financial Reform Legislation Made Public

Senator Chris Dodd, Chairman of the Senate Banking Committee, has released a revised version of the financial reform legislation that intends to prevent another financial crisis. The bill has been redrafted after consultations with several Republicans and Democrats who had rejected the first draft.

The revised bill has incorporated many of the suggestions made by the Republicans, which critics argue would make the legislation ineffective. However, despite the changes, the Republicans have once again opposed the bill.

The key proposals of the bill are:

Consumer Protection Agency

The biggest change that Dodd has proposed is that there should be a consumer protection agency to prevent banks from exploiting customers. This is in response to the subprime crisis where lenders extended a huge number of risky loans that brought the whole financial industry close to a collapse. Many economists were demanding an independent agency to look after the interests of the consumers, but Dodd has agreed to Republican objections and has suggested creation of an agency under the Fed umbrella.

Regulation of Credit Rating Agencies

Credit rating agencies like Moody’s had come for severe criticism after they incorrectly assessed the risk on mortgage backed securities, which crashed in value once the housing prices fell. The bill proposes that these agencies should now be made responsible for their actions and they should be regulated by the SEC to prevent similar errors in future.

Limits on Trading Activities of Banks

The bill has also given a nod to the Volcker Rule, which will restrict proprietary trading of banks. Currently banks can invest the depositors’ money in risky hedge fund trades. Such trades brought many of the Wall Street banks close to bankruptcy as the financial crisis unfolded. Regulation has also been proposed on derivatives trading by banks.

Financial Stability Oversight Council

The council’s job would be to identify risks in the overall financial system so that they can be dealt with before they result in a large scale crisis. However, once again the Fed has been given most of the duties, while the council will only sign off on decisions.

The bill looks like a compromise formula, and it will certainly face a lot of opposition from both pro-reform and anti-reform camps. Another problem is that even if it is passed, the success of the legislation will not be tested until the economy faces another crisis, and at that stage it will be too late to make any changes.

TARP Fraud Involving Bank President Uncovered

An ex- president of a private New York based bank has achieved the dubious distinction of being the first person to be charged with misappropriation of TARP funds. Charles Antonucci, president of Park Avenue Bank between June 2004 and October 2009, was arrested earlier this week, accused of stealing US Government funds. [Read more…]

How to Get the Best Health Insurance Deals

If you are about to apply for health insurance, you might be worried about what rate you will be charged and if you’ll be able to get a good deal. But you need to stop worrying and be proactive about it. Here are a few things that you can do to get a better deal. [Read more…]

Diversify Your Investments Before It’s too Late

Don’t put all eggs in one basket. This adage holds true even in the highly sophisticated world of finance. Investors have always been advised to spread their investments among different baskets of assets that do not depreciate in value at the same time. This diversification is believed to make investments less risky, as even if one asset starts falling in value, your profits from other assets can offset that loss. [Read more…]

Credit Card Charge Offs and Delinquencies Show Positive Trend

Data released by five leading credit card companies in the US has shown a positive trend in delinquency and charge off rates. The rates were found to be either lower than before or stayed at the same level, highlighting the improved financial situation of customers when compared to the last two years. [Read more…]

Credit Card Companies Improve Their Rewards Programs

Credit cardholders will agree that shopping is beginning to pinch with firms charging higher interest rates and fees. However, if you are a frequent spender and a loyal customer of the company, you can benefit from the many reward programs to offset these costs. [Read more…]

If You’re Facing Foreclosure Learn How to Use a Mortgage Audit to Reduce Debt

Borrowers facing foreclosure because of default on payments can use mortgage audit as a means of getting their mortgage terms softened. However, there are drastically differing views on whether this tactic will actually work. [Read more…]

How to Start Saving Now for Retirement Now

Everyone looks forward to putting their briefcase and laptops down for good so they can enjoy the finer things in life. But considering the unpredictable state of the economy, you would need a big enough financial cushion to protect you and your family from any unforeseen circumstances. [Read more…]

The Basics of Debt and How to Identify a Bad from Good Debt

Every person takes debt in his life whenever he acquires an asset or takes the benefit of a service without immediately paying for it in return. When viewed in this perspective, it becomes apparent that debts cannot be avoided completely. However, understanding debt can go a long way in ensuring that you take up more of good debts than bad. [Read more…]

Financial Reform Could Include Legislation on Financial Planners

If a proposal from Democrat Senator Herb Kohl finds its way into the financial reform bill, and if that bill is passed, the financial planning profession could soon be regulated.

Currently there are no restrictions or laws governing people who call themselves financial planners. This is in stark contrast to other financial professions. For example, an investment adviser has to be registered with the SEC, and an insurance agent needs a license to sell insurance policies. There are many laws that govern what these professionals can and cannot do when selling their products or when providing a particular service. [Read more…]

Is Your Inheritance Threatened If Your Spouse Files for Bankruptcy?

Asset protection can be a complicated financial and legal process whether you are married, separated or seeking divorce. It is important to be aware of the possible legal implications in case of a spouse filing for bankruptcy, while the other is due to receive an inheritance. [Read more…]

Moody’s Says US Credit Rating Under Threat

Credit ratings agency Moody’s has warned that the Aaa credit rating of top developed nations like the U.S., Germany, U.K., and Spain could be under threat as their deficits go out of control.

Moody’s has published a new report on the creditworthiness of these countries and has come out with a gloomy picture. Although it said that currently the ratings are stable and there is no immediate risk of downgrades, it warned that countries like the United States are much closer to downgrades now than they were before the financial crisis. [Read more…]

New Bubbles in the Economy Could Be Forming with Cheap Money

With interest rates close to their historical lows, some economists believe that new bubbles might be forming in some areas of the economy. If this is true, the Fed could be solving the current crisis but giving rise to a similar problem in future. [Read more…]

CARD Act Brings Good News for Credit Card Holders

The Credit Card Accountability Responsibility and Disclosure Act, or the CARD Act, is good news for all credit card holders. The act contains many provisions which are beneficial to card holders, especially pertaining to revision of interest rates by the lender. [Read more…]

IRS to Hold 1,000 Open Houses & Offers Assistance to Taxpayers in Distress

RS Commissioner Douglas Shulman has announced 1000 open houses at various venues across the country to allow distressed taxpayers to meet IRS officials and get a potential resolution to their tax troubles. The list of the venues and time of these open houses is given on the IRS website. [Read more…]

Factors that Affect Your Auto Insurance Cost

Everyone wants to get a low premium on insurance, but it isn’t always possible. Although there are some things that are in your control and can help you reduce your premium, there are many other things, which you can’t do anything about. Either way, it helps to understand which factors are going to impact your premiums so that you can shop smartly around those factors. [Read more…]

Positive Sign for Consumer Spending as Home Equity Loans Set to Rise

Home equity loans, which accounted for almost 2% of all consumer spending in 2001-2005 are all set to rise again. This could be good news for the overall economy as it will give a boost to consumer spending, which further triggers business activity and GDP growth. Home equity lending activity had seen a dip during 2008 and 2009 as house prices fell continuously. [Read more…]

Chinese Premier Disapproves of US Call to Revalue Yuan

Wen Jiabao responded to Obama’s call to revalue the Yuan’s exchange rate by saying that he doesn’t think that the Chinese currency is currently undervalued and there is no need to make any changes with regards to it. Wen’s statement comes in response to Obama’s comments on Mar 11, when he urged China to adopt market driven exchange rates. [Read more…]

How to Improve Your Credit Score

The recent turmoil in the economy has made credit card companies much more selective about who they give a card to. Only those who have good credit record are able to get a credit card with lucrative terms. [Read more…]

Beware of Claims by Debt Settlement Companies

Many people are in huge debts since the housing bubble burst. If you are behind on your mortgage payments or have other debts and interest payments piling up, you might have been lured by advertisements of debt settlement companies that offer to reduce your obligations considerably. Don’t get fooled by these misleading claims as they could do more harm than good to your financial situation. [Read more…]

Lehman Brothers Investigation Causes a Stir

The report on an investigation into wrongdoing at Lehman Brothers before the company collapsed has caused quite a stir among regulators and the financial industry.

The comprehensive report, which was authored by Anton R. Valukas, an examiner appointed by court to investigate the company’s bankruptcy has blamed Lehman’s top management and auditor Ernst and Young of using accounting gimmicks to hide troubled assets. The most controversial was the use of an accounting trick known as Repo 105 that allowed the company to shift a massive $50 billion of toxic assets. [Read more…]

Four Tips to Help Startups Businesses Manage Money Better

Money is not easy to come for startups, and managing what you have becomes very important. Going for investor money may be the easier route to feeling cushioned, but it has its own disadvantages. Seeking investment early on will make you lose significant equity and control. It may not be a desirable situation considering the business is your brain child in the first place.

So if you are on tight budget, running a tight ship is the best way forward. Let’s have a look at a few things that will help you manage money better and give you the cushion to stride ahead with confidence. [Read more…]

How Long Does Negative Information Remain on Your Credit Report?

This question haunts the mind of every person who had to go through a rough credit phase and is now stuck with a blemish on his or her credit report. Negative information or history of your bad credit, affects your credit score adversely. This could mean more expensive insurance premiums, higher interest rates on credit cards, loans and mortgages and in extreme cases even decline of credit line. [Read more…]

Steady Progress on Financial Reform Bill

There has been heightened activity among Democrat lawmakers as they try to give one final push to getting the financial reform bill ready. The contents of the bill are to be made public next week but so far it has faced fierce opposition from the Republicans, and even from some Democrats.

The bill, which is being authored by Senator Christopher Dodd, who is the chairman of the banking committee has attracted controversy and there have already been heated debates on what actions need to be taken to ensure that there is no repeat of the financial crisis.

The latest strategy to secure some bipartisan agreement on the bill has been private consultations with some Republicans to understand their reservations and make appropriate changes to the bill. But this has not gone down well with some Democrats and their supporters as they feel that any major compromises would make the bill ineffective.

Some of the key objectives of the legislation would be to put an end to government bailouts of reckless financial companies. These bailouts cost the taxpayers a huge amount and the policy has attracted a lot of anger from voters. Other proposals that could be included in the bill are restricting private banks from indulging in proprietary trading, where the bank makes investments in hedge funds and private equity funds using its own money. It has been argued that such trading significantly weakens the position of the banks and can lead to accumulation of toxic assets.

The creation of a consumer protection agency to ensure that borrowers do not suffer because of malpractice of large banks could also be one of the proposals in the bill. It would be aimed at preventing another subprime crisis, which was blamed at aggressive lending tactics by banks. Such an agency already exists in some countries, including Canada. These countries remained relatively shielded from the financial crisis. The Republicans have argued that it is the job of the Federal Reserve to oversee the functioning of banks, while Democrats say that the Fed has clearly failed in this duty. A potential compromise could be a new agency that works under the Fed umbrella.

A lot hinges on the success of the financial reform bill and it would be a major test of the Obama administration. Some economists have argued that a weak reform could be worse than no reform, as it would give a false sense of security and make the economy vulnerable to another crisis.

170,000 Get Mortgage Modifications Under Foreclosure Prevention Program

Government’s foreclosure prevention program has been successful in providing permanent aid in the form of mortgage modifications to 170,000 distressed home owners. Another 91,800 homeowners’ permanent modification applications have been approved by lenders and will come in effect upon the borrower’s acceptance. This will up the tally of total number of people receiving permanent aids under the program to more than 250,000. [Read more…]

Pennsylvania Housing Finance Agency Offers Financial Assistance

The economic crisis has affected a large number of people, leaving many unemployed and unable to pay back their mortgage. But the Pennsylvania Housing Finance Agency (PHFA) is showing that with the right assistance, most people can back on their feet and get rid of their liabilities. [Read more…]