All posts by Barbara Nevins Taylor

Helpful Tips: Consumer, Helpful Tips: Mortgage and Homeowners, Helpful Tips:All

Consumer Watchdog Outlines Mortgage Safety Rules

By Matthew Vann

With the goal of avoiding another housing bubble, the Consumer Financial Protection Bureau today announced new lending guidelines to ensure mortgage borrowers can afford to repay their loans.

Banks must now verify a borrower’s income, debt and employment status before approving a loan.

“The Ability-to-Repay rule will help ensure that lenders and consumers share the same basic financial
incentives,” said Richard Cordray, the bureau’s director, in a statement on the agency’s website. “When consumers sit down at the closing table, they shouldn’t be set up to fail with mortgages they can’t afford.”

With these rules, lenders can expect several restrictions, such as bans on “interest-only”, “no documentation” loans, and loans that burden borrowers with payments exceeding 43 percent of their income.

Lenders must follow several guidelines to make sure the loan they provide is a “qualified mortgage”, which eliminates risky loan features such as interest only or balloon payments.

The new rules aim at getting banks back into the habit of lending again, which they have been slow to after the Dodd-Frank Act placed new banking regulations into effect in 2010.

The CFPB guidelines also create a safe harbor for banks and lenders who follow the rules, which effectively ensures they can’t be sued for reckless practices. Borrowers can only sue if they are able to show they didn’t have the required income to pay the mortgage and living expenses

Banks will have up until January of next year to begin complying with the CFPB guidelines.

All 55 Plus, Helpful Tips: Retirement, Helpful Tips:All, Helpful Tips:Money

Key Steps to Plan Retirement


by Barbara Nevins Taylor

Who wants to consider aging, or the prospect of being old? You know the answer.

So the word “retirement,” and the phrase “retirement planning,” often seem like they involve other people. But here’s where optimism about the future needs a boost from a plan that you make, whatever you call it.

A MetLife Mature Market Institute study found that a 65-year-old man today has a 41% chance of living to 85 and a woman has a 63% chance. With those long lives ahead of us, we need to think about how we will support ourselves, protect ourselves and maintain control over our lives and assets.

Remember the saying, “Necessity is the mother of invention?” While no one is sure who said it, maybe Plato, necessity in this case means creating a blueprint for the way that you want to live the important years of your life.

We need to treat the inevitability of getting older the way we’d approach our business or professional lives.  Attorney Stuart Schoenfeld says, “The sooner you start to plan the more choices have. The longer you wait the more likely it is that you lose your independence and control.”

You want to put your ideas about your future, and what comes later, on paper.

Here are the first steps to take:  

  1. You need a WILL.
    Your will should clearly spell out how you would like to leave your assets to your heirs or others.  Planning saves heartache and headaches for you, and eliminates any questions people may have later.
  2.  You need a HEALTH CARE PROXY
    A health care proxy is extremely important.  This document legally designates someone to help with doctors and hospitals if you get sick. Experts advise it, and I know it it’s true because of my personal experiences caring for my mother and elderly relatives.  If you don’t have a health care proxy, the current laws prevent medical professionals from discussing your case with anyone but you. And that’s okay to a point.  But it’s imperative to have an advocate when you deal with doctors especially in an emergency setting. So a health care proxy designates the person you want to help you get the best care possible.
  3.  You need a LIVING WILL
    This makes your wishes crystal clear about how you want medical personnel to treat you in extreme situations. You can choose to say that you want to be resuscitated and kept on life support,  or say that you do not want extreme measures used to keep you alive. This is all up to you, and your wishes should be recorded in a legal document.
  4. You need a POWER OF ATTORNEY
    This designates someone to handle your personal and business affairs while you’re alive, if you cannot do things yourself.  Even if you can do things, it’s always a good idea to have a trusted person assist. It’s smart to get a qualified estate lawyer to help make these plans and put them on paper. If you can’t afford a lawyer, some states and local bar associations offer online forms. But be careful. The American Bar Association, www.aba.org offers a state-by-state list of clinics and not-for-profits that offer affordable and even free legal help.

 

MONEY AND SAVINGS

Studies also indicate we don’t start thinking about saving money for retirement early enough. Many wait until their fifties, or later.   And more than 36% of Americans are not saving for retirement according to a recent Capital One Sharebuilder survey.

Even if you are just starting out experts advise that you take advantage of every opportunity to save.

  1. Your company 401 KA 401K is set up by your employer. It allows you to invest money regularly. This money is not subject to taxes, if you keep it in the plan until  retirement. If you withdraw money before you are 59 ½ there’s a 10% penalty.  The downside is that your company decides where the money should be invested.
  2.   Creating an IRA
    An IRA (Individual Retirement Account) allows you to put money, before it’s taxed, into an investment plan. You can choose how the money is invested, but if you withdraw it early there is a 10% penalty.
    You do pay taxes on your profits when you withdraw from an IRA at retirement. And you have to begin withdrawing money when you are 70 ½.
  3.  Creating a Roth IRAA Roth IRA differs from a traditional IRA in that you pay taxes on the money before you invest in the plan and your contributions are not tax deductible. The upside is that your earnings are tax-free once you start to withdraw money. And the IRS says money from a Roth account does not have to be withdrawn until after the death of the owner.
  4.  Savings
    Socking money away in a savings account is still a solid way to save. But because interest rates are so low at this time, you won’t make much money by allowing a bank to hold it. For more on the tax consequences of investing plans visit www.irs.gov

SOCIAL SECURITY

Faye Reddit of the MetLilfe Mature Market Institute says, “We think of retirement as a three-legged stool. We know that basically it’s built on the idea of having a pension, which many people don’t have, although many people have a 401 K, personal savings and Social Security.

  1. Social Security is our basic benefit.
    Although you qualify at 62, it’s suggested you wait until you’re at least 66 to claim the monthly payments.  Every year that you wait, you get an extra 8% up until 70 years old.
    For example: If you start to collect at:
    62-you qualify for $650 a month
    66-you’d get $1,000 a month
    70-you’d get  $1320.

After you’re 66 you can work, earn an unlimited amount, and still collect Social Security without deductions from your monthly benefit.

readmore Pension Advance Investigation

 

HOME

Our homes are usually are biggest assets and as with everything else, it’s important to think about how you will use this asset and the money that it has made for you over the years.

Tax attorney Robert Barnett says, “The IRS code allows special exemptions for the sale of your house. They will allow a single person to say $250,000 will be exempt, and a married couple will double that to $500,000. So people who bought their homes years ago and have seen a large fluctuation in value need to protect the ability to maintain those exemptions.”

Lawyers suggest putting your home, stocks and other assets into a trust to avoid probate court fees after you die. A trust allows you to live in the home. But the house and assets go to your heirs. A trust also gives you the opportunity to lay out instructions about what to do with the money in the trust.

  1. Revocable Trust
    Can be changed.
  2. Irrevocable Trust
    Can’t be changed.

MEDICAID AND THE TRUST

Protecting the assets become an issue if you become very ill, or go into a nursing home and need to use Medicaid to supplement Medicare.  In addition, putting assets in a trust early may help you qualify for what’s called “Community Medicaid.”  That allows you to stay at home and get Medicaid help for care.

Medicaid is primarily funded by the federal government, but administered by the states. And each state has different income and asset requirements. In New York State, for example, the income limit for one person is $14,250. In New Jersey it’s about $5,000.

It’s difficult to hide your money. Medicaid in every state does a five-year review for eligibility.  Attorney Stuart Schoenfeld explains, “If you’ve transferred assets to a trust or children within five years, you’ll be disqualified from Medicaid for a period of time.

FIGURING IT OUT

This is all extremely complicated, but it is not rocket science and you can conquer the information to take control of your destiny and your money.  Legal help is important, and a good geriatric care manager can be invaluable.

New York City-based geriatric care manager Joanne Lehman says, ”We come in and do an assessment of your needs and create a plan. We help you investigate all of the options, fill out the paperwork, work with attorneys and follow up to make sure that you have what you need.”

You can find a geriatric care manager through the professional organization at www.caremanager.org

 

Helpful Tips: Mortgage and Homeowners, Helpful Tips:All, Helpful Tips:Money, Mortgage News

Find Out If Refinancing Is Worth It

2 Comments

Before mortgage rates start inching up, you might want to consider refinancing But first, get ahead of the banker, or broker, and  figure out if refinancing is worth it for you.

Refinancing is great only if the fees you pay to get the new mortgage don’t exceed the amount you’ll save and don’t add to your mortgage debt. The cost is often surprising.

KEEP FEES LOW

Treat this like a business deal. You want to keep the fees low and try to get the best interest rate possible.  Every bank has a different set of rules and offers different deals. Real estate attorney Adam Leitman Baily says, “Banks are competing for your business. Let them do that.”  

Shop around.

Eric Ruskiewicz, Vice President of Residential Lending at Amalgamated Bank says, “Every bank will have different goals at a certain time.”

Be aware that rates change weekly and the rate you get is likely to depend upon your credit score.  Banks use the Fico Score, which is a statistical compilation of your credit-worthiness to determine what rate they will offer you.

FICO scores range from 350 to 850 and the higher the score the better. In New Jersey, Kenneth Totten, Vice President of Metuchen Savings Bank says, “If you have a 740 or better, that’s considered A-credit.

But again, each bank has its own way of doing business, and that’s good news for you. TD Bank‘s Senior Vice President Mike Copley says, “We would look at anything from 680 and up. 

At Amalgamated Bank, Ruskiewicz says, “The lowest we go is 620, which most people would qualify for.”  

GOOD FAITH ESTIMATE

Once the bank decides it wants your business and offers an interest rate, ask about the fees. The bank will give you a Good Faith Estimate, which will list the fees. Fees generally cost 2-3 percent of the loan. 

For example, if you have a $500,000 mortgage and pay 2 ½ percent, you’ll spend $12,500 on fees.

Some fees are negotiable.  But they generally don’t tell you that upfront.

You have to be willing to ask the bank to drop a fee, or lower it. Rusckiewicz says “Fees you can negotiate, like everything else in life.”

That’s why you need to know what the fees are as early in the process as possible.

Almost the minute you start, you pay an APPLICATION FEE – $65 to $640 depending upon where you live. You can usually ask the bank to refund that if you go with their deal.

The LOAN ORIGINATION FEE – $2,000 to $3,000 – comes next. That’s for paperwork and processing the loan.

A lender may charge POINTS.

Each point is 1% of the loan. Banks charge points to reduce your interest rate, or to protect themselves with cash upfront if they don’t think your credit score is high enough.

These fees are often negotiable.

You must ask if you can get the loan without points. A bank may say, “Yes,” but charge a slightly higher interest rate.  Then you have to calculate what works for you.

Before the bank will make a loan, it orders an appraisal of your property. You pay the APPRAISAL FEE – $300 to $1,000. 

But again, if you ask the bank may pay for it.

You will pay an ATTORNEY’S FEE – the bank’s attorney – $500 to $1000.

You’ll also pay a NOTARY FEE – $250, and you’ll pay for a TITLE SEARCH, generally $700 – $900 or more

Title searches are particularly important if you are buying a property. Both the bank and you need to know that no other person, corporation or bank has a claim to the property. 

But because you are refinancing, you can ask to limit the title search to the amount of time that you’ve owned the property.  That should bring the fee down significantly.

Nevertheless, you’ll pay for TITLE INSURANCE for you and the lender. It’s usually a percentage of the loan. Fees range from $175 to more than $4,000 depending upon where you live.

And banks generally require PRE-PAID TAXES and HOME OWNERS INSURANCE, which they hold in escrow until they’re paid out.

GOVERNMENT RECORDING FEES and TRANSFER TAXES also add to the bill. These vary from state to state. 

New York State has the Consolidation Extension Modification Agreement, or CEMA. This is an agreement between banks that transfers the tax you paid originally, so that you don’t have to pay it twice. But some banks don’t honor the agreement and they are not required to do so. 

My husband and I recently refinanced and we stayed with the bank that originally made our mortgage because it does not transfer the tax required if you refinance with another lender.

We essentially were held hostage but without the transfer tax and with other fees we negotiated down, we got a good deal.

Yet, sometimes the overall fees are so high that it’s not worth refinancing. Amalgamated’s Rusckiewicz points out, “If you only have $30,000 left on your mortgage, it really doesn’t pay. You’re better off taking that money you pay for closing costs, putting it into your mortgage and doubling up your payments.”

Once you know what all of the fees are, shop around to see if you can get a better deal with another lender.  If you do that, make sure that you get a copy of your credit report, and don’t let the second or third bank run the report again.  Multiple inquiries affect your credit score.  

Money News, Mortgage News, News

More Mortgage Modifications


There’s finally a little good news about foreclosures all across the U.S.   134,000 homeowners received help and mortgage modifications from Fannie Mae and Freddie Mac in the third quarter of 2012.  Since 2008 Fannie and Freddie say they prevented more 2.5 million foreclosures with permanent loan modifications.  About 45 percent of these homeowners had their mortgage payments lowered by 30 percent.  And 38,000 homeowners who couldn’t hang on were able to complete shorts sales or turn their deeds over to lenders in-lieu-of foreclosure.  Both procedures are less damaging to credit ratings than straight-out foreclosure.

Overall, late mortgage payments declined by 9 percent in 2012. But in Florida about 29 percent of those who are delinquent owe more than a year’s worth of payments.

Here are a few positive stats from the states

New York-Almost 89,000 got help and close to 84,000 kept their homes.

New Jersey – More than 79,000 got help and almost 70,000 kept their homes.

California – Almost 335,000  got help and more than 260,000 kept their homes.

Illinois- Almost 124,000 helped and almost 105,000 kept their homes.

Consumer News, News, Scam News, Travel News

Phishing Scam Warning From American Airlines

American Airlines warns of phishing scams that use the company’s logo and ticket information.  Typically, you receive what looks like a legitimate communication from the airline and you’re asked to follow a link, or button. 

Once you click you’re led to a “spoof” site that looks official and asks for credit card information, or other personal financial data. Some of the emails may have viruses attached. 

The airline also warns that bulk faxes and mailings are now used by the scammers to try to grab your information. American Airlines says it, “will never ask you to perform security-related changes to your account in this fashion or send emails to collect user names, passwords, email addresses or other personal information. I

f you receive an email claiming to be from American Airlines, that asks for account information, it should be considered fraudulent and an attempt to obtain personal information that may be used to commit fraud.”

TAKE ACTION

1. Don’t open links, or attachment, call phone numbers for follow any instructions in the email.

Forward it to webmaster@aa.com.

2. If you get one of these queries by mail, or fax sent to AA’s webmaster, and file a complaint with the U.S. Postal Inspection Service American Airlines says this is a typical phising fax. American Airlines says this is an example of a phishing letter using its logo. Praise for American Airlines Employeesreadmore

Consumer News, News, Uncategorized

Jump In E-Book Readership

Good news for writers. 75% of Americans over 16-years-old said they’ve read a book in the past year according to the Pew Internet and American Life Project.  Researchers found the number who read e-books  increased from 16%  to 23% in 2012, while print book readers fell to 67% from 72%.   Not surprisingly, the increase in e-book readership grew with the popularity of  iPads, Kindles, Nooks and other tablet reading devices.   Turns out 25% of us now own them,

Libraries are also seeing a change. 5% of library readers used e-books in 2012 as opposed to 3% in 2011.

Who is doing the reading?

Most are between 30-49, have  college or graduate degrees and live in households earning more than $75,000, and

 

Consumer News, Immigrant News, News

100,000 + Dreamers Approved For Deferred Action

2 Comments

More than 100,000 dreamers gained approvals in the  Deferred Action for Childhood Arrivals Program.  The U.S. Citizen and Immigration Services data extends to December 13th, so there may even be more. 157, 151 applications are still under review.  Out of the 355,889 who applied, only 12,014 were rejected and that amounts to just a little over 3%. We’re not odds makers, but it seems like the chances are in your favor.

Most of the applications were made by young people who came to the U.S. from Mexico and most applications were made in California – 98,531 and Texas- 57,42.  But it continues to surprise us that only 21,635  applied from New York, and 11,779 from New Jersey.   Why are the numbers so small?

This is a great program for young people who entered the U.S. before they were 16-years-old.  This means, if approved, they can work legally in the U.S., get a social security number, get a driver’s license and live openly

Let us know about your experience.

 

If you haven’t applied yet, check out our video, How to Apply for Deferred Action, it walks you right through the process.  And you won’t have to pay a lawyer.

 

Money News, News, Scam News

Sandy Hook Scams Warning

1 Comment

The Sandy Hook Elementary School shootings broke our hearts and made us want to help in any way we can.  Scammers know it and that’s why law enforcement officials throughout the country are warning about potential charitable scams. Many compassionate people stepped up immediately after the tragedy and many still want to open our wallets. And so of course,  plenty of others know where to find their easy marks.  The Connecticut Department of Consumer Protection (DCP) Commissioner William M. Rubenstein and Attorney General George Jepsen caution us all to :

• Donate to well-known, established charities; it is the best way to ensure that your donation is used appropriately. Find a charity with a proven track record that is making help available to the families and community of Newtown.

• When giving to any organization, specify the purpose of your donation (e.g “for the victims of the Newtown shooting”), and do so in writing whenever possible.

• Be extra cautious when responding to e-mail and telephone solicitations on behalf of supposed victims. These methods of solicitation are more likely to be part of a scam.

• Delete unsolicited e-mails and don’t open attachments, even if they claim to contain video or photographs. The attachments may be viruses designed to steal personal financial information from your computer.

• Watch carefully for copycat organizations. Criminals are likely to set up bogus sites to steal the identities and donations of generous, unsuspecting individuals. When giving online, be sure to find the charity’s legitimate website. You can access accurate links to the sites of each bona fide charity at Charity Navigator (www.charitynavigator.org).

• Social media sites can also perpetuate scams. Do not blindly give via these vehicles. As with any charity, investigate the groups behind such pleas to ensure that they come from a legitimate organization.

• Both the need for donations and the opportunity for giving will be present for some time.  Therefore, do not feel pressured into making contributions; reputable charities do not use coercive tactics.  If you feel pressured at all, you are most likely being scammed.

• Do not give your personal or financial information to anyone who solicits contributions.

• Avoid cash donations if possible.  Pay by debit or credit card, or write a check directly to the charity.

• Do not make checks payable to individuals.

Insurance News, Money News, News

A Tax On Health Benefits?

More than half of American would either switch to a less costly insurance plan, shop around, or drop coverage,  if Congress taxes health benefits  to raise money as part of the deal to avoid the fiscal cliff.  It’s one of many ideas being floated,  but  the nonpartisan Employee Benefit Research Institute (EBRI) found if employer based coverage becomes taxable:

  • 26 %  want to switch to a cheaper plan
  • 21% say they’d  shop directly with insurers
  •  9 %t say they’d  drop their coverage.

MANY LIKE THEIR COVERAGE

Yet nearly 39%  say they would continue with their current level of coverage.

The EBRI found  health benefits are a key a factor for workers when they choose a job, and health insurance is the most important employee benefit.

“Most Americans are satisfied with the health benefits they have now and prefer not to change the mix of benefits and wages,” said Paul Fronstin, director of EBRI’s health Research and Education Program and author of the report. “About three-quarters say they are satisfied with the health benefits they currently receive, while 15 percent say they would trade wages to get more health benefits, and 9 percent say they would surrender health benefits for higher wages.”

Here are 2 additional stats from the study:

  • 34% preferred to choose their insurance plan, have their employers give them the money that was being spent on their behalf, and then pay the remaining amounts themselves.
  • 23% prefer their employers give them money and allow them  to decide whether to purchase coverage, and how much to spend.