Category Archives: Foreclosure

Consumer Financial Protection Bureau Proposes Rules to Regulate Debt Collection Companies

Posted on February 22, 2012 by admin

On February 16, the Consumer Financial Protection Bureau (CFPB) released a proposed expansion of the authority of the nonbank supervision program , whose mission is to ensure that nonbank financial institutions follow federal consumer financial regulations and to investigate potential risks to consumers from financial institutions.  The proposed rule will expand the CFPB’s authority to include supervision of the largest debt collection services and consumer reporting agencies, subjecting these businesses to federal regulation for the first time.  The proposed rule is available for public comment for 60 days after its publication. The CFPB was created under the authority of the Dodd-Frank Wall Street Reform and Consumer Protection Act in response to the 2007 recession.  The Bureau assembles the majority of federal consumer financial protection authority in one place. Its mission is to protect consumers who are in the market for financial products and services and to supervise consumer financial businesses that had not been subjected previously to federal oversight.  The CFPB protects American consumers from abusive, deceptive, and unfair financial practices.  The CFPB has already issued guidelines for revised, easier-to-read credit card agreements . The Bureau is authorized to investigate any type of business that may be violating the law, but it has limited direct supervisory authority.  The Dodd-Frank Act specifies that the CFPB would have the authority to supervise “larger participants” in some nonbank financial markets. However, the Bureau must define what kind of businesses are “larger participants” by a rule, the initial version of which must be issued by July 21, 2012. Approximately 30 million American consumers are the subject of debt collection, with the average amount of debt being $1,400.  The CFPB will regulate three types of debt collection companies: those that collect debts for clients for a fee; those that buy debts and collect the proceeds for themselves, and attorneys that acquire debt payments through litigation.  Many companies use all three methods to collect debt payments. The proposed rule issued on the 16 th would give the CFPB authority over debt collection companies with more than $10 million in annual receipts, an estimated 175 businesses in the debt collection market.  Although they constitute only approximately 4% of the debt collection businesses, the larger providers bring in 63% of the total annual receipts for the industry. The proposed rule would also cover the largest credit reporting companies, including consumer report resellers and specialty consumer reporting companies.  Credit reports and credit scores influence the lives of many American consumers by determining eligibility for mortgages, credit cards, and other types of credit.  The three top credit reporting companies alone hold information about 200 million Americans and the industry issues an estimated 3 billion reports a year. The proposed rule would give the CFPB supervision over consumer reporting agencies with more than $7 million in annual revenue, representing approximately 30 consumer reporting agencies. The affected agencies make up only 7% of the market, but account for an estimated 94% of the market’s annual receipts. Continue reading →

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The Envelope Please – An Easy Way to Get Control of Your Finances

Posted on February 22, 2012 by admin

Setting a budget is an important part of being financially fit, but many people have trouble sticking to their budget once they get it down on paper.  One way to resolve this problem is to use an envelope system.  This system works best for people who only pay cash for items instead of operating with credit or debit cards; however, almost anyone can make the envelope system work for them. How the Envelope System Works The envelope system involves creating an envelope for each of the different categories of spending that are in your budget and that aren’t fixed or automatic expenses.  Essentially, you should create an envelope for expenses other than things like a mortgage, utility, debt payment or savings, all of which should be deducted automatically from your paycheck as soon as it comes in.  For instance, assume you want to spend $400 on groceries each month, $300 on entertainment, $100 on dining out and $20 on clothing.  You would create an envelope for groceries, entertainment, dining out and clothing. Once you have an envelope created for all of your expenses each month, you will put the amount of cash you have allocated for that particular type of spending into that particular envelope. If you plan to spend $400 on groceries each month, you would put $400 into your grocery envelope. Each time you incur an expense in a particular category, you then use that envelope to pay from. This means when you go to the grocery store to pick up your week’s groceries, or a carton of milk or any other item, you would pay cash out of your grocery envelope. Once the money in that envelope is gone and has been spent, you do not spend any more money on that category until the next month when it is time to refill the envelope. This forces you to remain accountable and to stick to your budget so that you do not have any unexpected overages at the end of the month.  It also makes you more aware of how much you are spending, especially when the cash in your envelope starts to get low. Modifying the System to Use Credit Cards and Debit Cards Those who use cash may like the envelope system, but if you are using debit or credit cards, you might wonder how it could be of help to you.  The answer is that you use the system in pretty much the same manner, but you have to be a bit more disciplined about moving the money over. The basic premise is that when you charge the money on your credit card or use your debit card, you move the money from the relevant envelope into a different envelope dedicated to paying your credit card.  When you charge $20 on your debit card for groceries, remove $20 from your grocery envelope.  You can also do this virtually by setting up different sub-accounts on online banking websites. Of course, using this method requires a lot more discipline and is not the ideal way to use the envelope system as it defeats the purpose of physically handling the cash and seeing the cash decline over the course of the month.  Still, for those who simply cannot use cash, a modified envelope system can still be a good way to get control of your finances and ensure you do not overspend. Continue reading →

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Dallas Mortgage Rates Survey – Week of February 20, 2012

Posted on February 22, 2012 by admin

According to a recent Primerates.com survey of Dallas mortgage rates offered by the largest area banks & credit unions, four Dallas institutions offered rates below 4.000% on 30-year fixed-rate conforming loans in the Dallas area for well-qualified borrowers. Wells Fargo ( www.wellsfargo.com ) and Compass Bank ( www.bbvacompass.com ) offered the lowest rates of the city with 3.75% while JP Morgan Chase ( www.chase.com ) and Capital One ( www.capitalone.com ) offered 3.88%. Two other institutions, Bank of America ( www.bankofamerica.com ) and the Comerica Bank ( www.comerica.com ) offered higher rates with 4.38%. While most lenders will push one of the three products on the list below, there are other options for the borrower.  The 30-year fixed rate loan is the most popular since it offers the lowest monthly payment.  The trade-off is paying a higher interest rate.  For those who have a better cash flow, the 15-year product may be more suitable.  The 15-year fixed rate loan will allow the borrower to pay more toward principal with each payment, and since it has a lower interest rate the overall amount of money that is paid in interest will be much lower.  While many people steer clear of the 5/1 ARM it is beneficial to some borrowers.  For instance, a person with a smaller loan (usually due to refinancing) may have the cash flow to pay off their ARM in 5 years or less.  This person could save an extra 1% in interest payments over the 15-year product and never worry about the rate adjusting later in the life of the loan. Top DallasArea Banks and Credit Unions As of 30 Yr-Rate 30 Yr- APR 15 Yr- Rate 15 Yr- APR 5/1 ARM-IR 5/1 ARM-APR Bank of America 02/17/2012 4.38% 4.54% 3.50% 3.77% 3.13% 3.45% JP Morgan Chase 02/17/2012 3.88% 3.97% 3.00% 3.13% 2.38% 3.08% Wells Fargo 02/17/2012 3.75% 3.92% 3.13% 3.42% 2.38% 3.19% Compass Bank 02/17/2012 3.75% 3.95% 2.75% 3.12% 2.63% 3.25% Comerica Bank 02/17/2012 4.38% 4.44% 3.47% 3.58% 3.13% 3.32% Capital One 02/17/2012 3.88% 3.98% 3.25% 3.29% 2.63% 2.70%   Listed rates from banks, thrifts, and credit unions were listed on their websites on the date indicated for conforming loans with 0 points.  Data is believed accurate at time of collection, can change without notice, and will vary based on an individual’s credit history.  Contact a specific institution for current rates. Continue reading →

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Boston Mortgage Rates Survey – Week of February 20, 2012

Posted on February 22, 2012 by admin

According to a recent Primerates.com survey of Boston mortgage rates offered by the largest area banks & credit unions, two Boston institutions offered rates below 4.000% on 30-year fixed-rate conforming loans in the Boston area for well-qualified borrowers. Sovereign Bank ( www.sovereignbank.com ) and Century Bank and Trust ( www.centurybank.com ) offered the lowest rates of the city with 3.99%. Four other institutions offered rates higher than 4.00%. While most lenders will push one of the three products on the list below, there are other options for the borrower.  The 30-year fixed rate loan is the most popular since it offers the lowest monthly payment.  The trade-off is paying a higher interest rate.  For those who have a better cash flow, the 15-year product may be more suitable.  The 15-year fixed rate loan will allow the borrower to pay more toward principal with each payment, and since it has a lower interest rate the overall amount of money that is paid in interest will be much lower.  While many people steer clear of the 5/1 ARM it is beneficial to some borrowers.  For instance, a person with a smaller loan (usually due to refinancing) may have the cash flow to pay off their ARM in 5 years or less.  This person could save an extra 1% in interest payments over the 15-year product and never worry about the rate adjusting later in the life of the loan. Top Boston Area Banks and Credit Unions As of 30 Yr-Rate 30 Yr- APR 15 Yr- Rate 15 Yr- APR 5/1 ARM-IR 5/1 ARM-APR Bank of America 02/17/2012 4.13% 4.31% 3.50% 3.76% 2.88% 3.37% RBS Citizens 02/17/2012 4.13% 4.16% 3.38% 3.44% 2.75% 3.20% Sovereign Bank 02/17/2012 3.99% 4.15% 3.25% 3.53% NA NA Rockland Trust 02/17/2012 4.13% 4.21% 3.38% 3.52% 3.25% 3.44% Century Bank and Trust 02/17/2012 3.99% 4.04% 3.25% 3.34% 3.00% 2.97% Danversbank 02/17/2012 4.00% 4.15% 3.25% 3.51% 2.88% 3.23%   Listed rates from banks, thrifts, and credit unions were listed on their websites on the date indicated for conforming loans with 0 points.  Data is believed accurate at time of collection, can change without notice, and will vary based on an individual’s credit history.  Contact a specific institution for current rates. Continue reading →

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Atlanta CD Rates Survey for the week February 20, 2012

Posted on February 22, 2012 by admin

According to a recent Primerates.com survey conducted on February 20, 2012 of Atlanta CD rates offered by the area banks & credit unions, Atlanta’s largest financial institutions offered short-term savers 6 month CD’s with rates between 0.05% at Wells Fargo ( www.wellsfargo.com ) and 0.25% at SunTrust Bank ( www.suntrust.com ) and United Bank ( www.accessunited.com ). SunTrust Bank ( www.suntrust.com ) also has the highest 2-year and 5-year CD rate, with 0.65% CD and 1.29% CD respectively. CD’s are typically insured up to $250,000 by the FDIC. As CD’s mature, banks typically re-price the rates on deposits. Make sure that you track when your CD’s mature so that you can roll them over into new CD’s and keep your money working as hard as possible.   Banks 6 month 1 year 2 year 3 year 4 year 5 year SunTrust Bank 0.25% 0.45% 0.65% 0.85% NA 1.29% Wells Fargo 0.05% 0.05% 0.55% 0.90% 1.15% 1.15% Bank of America 0.20% 0.35% 0.40% 0.60% 0.85% 1.19% Regions Bank 0.15% 0.15% 0.25% 0.40% 0.60% 0.75% State Bank & Trust 0.20% 0.30% 0.55% 0.80% 0.95% 1.00% JP Morgan Chase 0.20% 0.25% 0.40% 0.50% 0.50% 1.00% United Bank 0.25% 0.50% 0.65% 0.95% 1.10% 1.25%   Rates from banks, thrifts, and credit union were posted on their websites on the date indicated for a $10,000 certificates of deposit meeting the specific holding requirement. Data is believed accurate at time of collection, can change without notice, and will vary. Contact a specific institution for current rates. Continue reading →

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Energy Prices Rise 6.1% in Last Year While Food Prices Up 4.4%

Posted on February 21, 2012 by admin

On February 17 th the Bureau of Labor Statistics ( BLS ) released the Consumer Price Index for January.  The report for January showed an average 0.2% increase in the cost of goods, which was slightly less than the consensus of 0.3%.  The year-on-year index, or the trailing 12 months, shows an increase of 2.9%.  When looking more closely at the categories, the report shows that many of the prices rose by between 2% and 3% with the exception of food and energy.  These two rose by 4.4% and 6.1% respectively As can be seen, the indexes for food and energy prices are very volatile, they can swing because of a good crop year, changes in the weather, or a decision by OPEC.  Since the prices for such goods often change without regard to demand from consumers, they are left out of some of the CPI calculations.  This “core” inflation indicator is what the Fed watches.  As we can see in the latest FOMC Minutes , the Fed is seeking a modest 2% inflation for the year 2012 (average inflation since the BLS started collecting data in 1913 is just over 3%).  When we look at the change for just the core data (items less food and energy) there was a change of 2.3% for the trailing 12 months ending in January 2012.  As long as the Fed can keep things on track, they should have no problem meeting their goal of 2% inflation. This report, which is released every month, follows the prices of a set basket of goods.  The average change of the cost goods is reported in a month-to-month, and a year-to-year change.  This economic indicator is the most widely used indicator to determine inflation.  By looking at the basket of goods (made up of 40% commodities and 60% services), the BLS can see how the costs of living have changed.  The Fed will then use this information to adjust the monetary policy in order to encourage inflation, or encourage deflation. Besides determining how much buying power the dollar has (if the value of the dollar goes down, inflation goes up) the CPI can give investors and consumers a good picture of what the economy is doing.  In the event of rapid inflation there is too much money available, and the costs of good would be rising to meet the demand.  In the event of deflation, as seen in 2009, there is not enough money is available, and consumers are not able to keep buying and keep the economy moving.  In the event of hyperinflation (a very sharp rise in the price of goods) lending institutions would need to rapidly raise their rates to stay profitable, which would discourage borrowing.  In order to maintain order, and to keep the money moving, while keeping the cost of goods growing at a healthy rate, the Fed monitors the CPI and adjusts the money supply and interest rates as needed. Continue reading →

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What is Private Mortgage Insurance?

Posted on February 19, 2012 by admin

Keywords: PMI, Private Mortgage Insurance, Mortgage Private mortgage insurance, or PMI, is an insurance policy that home buyers are required to purchase in certain cases when getting a mortgage for a home.  Unlike standard insurance policies that protect you from financial loss, PMI is an insurance policy designed to protect the bank in case you default on the mortgage.  The cost of PMI is normally set as a percentage of the mortgage balance and can be an expensive addition to your monthly mortgage bill. When Is PMI Required? PMI is required when you purchase a home and put down less than a 20 percent down payment.  In other words, if you buy a home worth $100,000 and you put down less than $20,000 on the home, you will be required to purchase private mortgage insurance by your bank. You may be able to avoid paying for PMI if you can structure your mortgage into two separate loans as opposed to a single loan for more than 80 percent of the value of your home.  For instance, if you purchased a $100,000 home and only put down $10,000, you would technically have to pay PMI if you borrowed $90,000 in a single loan. To avoid PMI, you might choose instead to borrow $80,000 in a first mortgage and $10,000 in a second mortgage.  This is commonly referred to as an 80-10 loan.  80-20 loans are also a possibility and involve putting down nothing, but these have become very difficult if not impossible to qualify for.  Even 80-10 loans are now more difficult to obtain due to tougher regulations in the mortgage market, but they are still available for people with excellent credit. Why is PMI Required PMI is required to protect the bank or mortgage lender from potential loss.  When you purchase a home, you are supposed to have some of your own money invested in that home.  This is referred to as owner’s equity.  When you have your own money in your home, this protects the bank in several important ways.  First, if property values decline, the value of the home (the collateral for the loan) is less likely to dip below the amount that you owe, resulting in you being underwater on the mortgage.  Second, when you have your own money invested, you are less likely to simply walk away from the mortgage and leave the bank holding the bag if property values do go down. Because owner’s equity is important for the lender’s protection in making the loan, PMI is required when you do not have such equity.  PMI insures the loan and the bank is paid in the event of a default.  It does not protect you as the borrower; you still have to make payments and you can still be subject to a foreclosure action if you do not pay.  Despite the fact that PMI protects only the lender and not the borrower, the borrower is still the one who needs to pay for the cost of the insurance. How Much Does PMI Cost? The cost of PMI is typically set at a percentage of the total amount borrowed. This percentage is between .5 percent and 1 percent of the entire loan amount annually.  Because the cost is quite significant, it is best to avoid PMI whenever possible by saving an adequate down payment before buying a home. Continue reading →

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Sacramento CD Rates Survey for the week February 13, 2012

Posted on February 17, 2012 by admin

According to a recent Primerates.com survey conducted on February 13, 2012 of Sacramento CD rates offered by the area banks & credit unions, Sacramento’s largest financial institutions offered short-term savers 6 month CD’s with rates between 0.050% at Wells Fargo ( www.wellsfargo.com ) and U.S. Bank National Association ( www.usbank.com ), and 0.300% at Bank of America ( www.bankofamerica.com ). El Dorado ( www.eldoradosavingsbank.com ) has the highest 2-year CD rate, with 0.600% CD, while Union Bank ( www.unionbank.com ) has highest CD rate for 5-year, with 1.500% CD. CD’s are typically insured up to $250,000 by the FDIC. As CD’s mature, banks typically re-price the rates on deposits. Make sure that you track when your CD’s mature so that you can roll them over into new CD’s and keep your money working as hard as possible.   Banks 6 month 1 year 2 year 3 year 4 year 5 year Wells Fargo 0.050% 0.050% 0.330% NA NA NA Bank of America 0.300% 0.350% 0.400% 0.600% 0.850% 1.210% U.S. Bank National 0.050% 0.100% 0.450% 0.700% 1.000% 1.400% Citibank 0.150% 0.250% 0.300% 0.500% 0.750% 1.000% El Dorado 0.250% 0.350% 0.600% 0.950% NA 1.450% Umpqua Bank 0.200% 0.250% NA NA NA NA Union Bank 0.200% 0.300% 0.500% 0.600% 1.010% 1.500%   Rates from banks, thrifts, and credit union were posted on their websites on the date indicated for a $10,000 certificates of deposit meeting the specific holding requirement. Data is believed accurate at time of collection, can change without notice, and will vary. Contact a specific institution for current rates. Continue reading →

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Pittsburgh Mortgage Rates Survey – Week of February 6, 2012

Posted on February 17, 2012 by admin

According to a recent Primerates.com survey of Pittsburgh mortgage rates offered by the largest area banks & credit unions, three Pittsburgh institutions offered rates below 4.000% on 30-year fixed-rate conforming loans in the Pittsburgh area for well-qualified borrowers.  First Commonwealth ( www.fcbanking.com ) and The Northwest Savings Bank (www.northwestsavingsbank.com) offered rates at 3.875% and the Dollar Bank ( www.dollarbank.com ) offered rates at 3.750%. Three institutions offered rates around 4.000% while the PNC bank ( www.pnc.com ) and Fidelity Savings Bank ( www.fidelitybank-pa.com ) offered the highest rates with 4.500% and 4.625% respectively. While most lenders will push one of the three products on the list below, there are other options for the borrower.  The 30-year fixed rate loan is the most popular since it offers the lowest monthly payment.  The trade-off is paying a higher interest rate.  For those who have a better cash flow, the 15-year product may be more suitable.  The 15-year fixed rate loan will allow the borrower to pay more toward principal with each payment, and since it has a lower interest rate the overall amount of money that is paid in interest will be much lower.  While many people steer clear of the 5/1 ARM it is beneficial to some borrowers.  For instance, a person with a smaller loan (usually due to refinancing) may have the cash flow to pay off their ARM in 5 years or less.  This person could save an extra 1% in interest payments over the 15-year product and never worry about the rate adjusting later in the life of the loan. Top Pittsburgh Area Banks and Credit Unions As of 30 Yr-Rate 30 Yr- APR 15 Yr- Rate 15 Yr- APR 5/1 ARM-IR 5/1 ARM-APR PNC Bank 02/13/12 4.500% 4.442% 3.625% 3.629% NA NA Citizens Bank of Pennsylvania 02/13/12 4.000% 4.038% 3.250% 3.317% 2.625% 3.152% Dollar Bank 02/13/12 3.750% 3.900% 2.990% 3.127% 2.480% 3.209% First Commonwealth 02/13/12 3.875% 4.054% 3.125% 3.438% 2.750% 2.899% Northwest Savings Bank 02/13/12 3.875% 3.919% 3.250% 3.291% 3.750% 3.222% ESB Bank 02/13/12 4.000% 4.071% 3.250% 3.374% 3.375% 3.444% Washington Financial Bank 02/13/12 4.125% 4.138% 3.375% 3.396% 3.625% 3.312% Fidelity Savings Bank 02/13/12 4.625% 4.676% 3.875% 3.961% 3.250% 3.134%   Listed rates from banks, thrifts, and credit unions were listed on their websites on the date indicated for conforming loans with 0 points.  Data is believed accurate at time of collection, can change without notice, and will vary based on an individual’s credit history.  Contact a specific institution for current rates. Continue reading →

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San Antonio Mortgage Rates Survey – Week of February 13, 2012

Posted on February 17, 2012 by admin

According to a recent Primerates.com survey of San Antonio mortgage rates offered by the largest area banks & credit unions, three San Antonio institutions offered rates below 4.000% on 30-year fixed-rate conforming loans in the San Antonio area for well-qualified borrowers.  USAA Federal ( www.usaa.com ) and Wells Fargo ( www.wellsfargo.com ) offered rates at 3.875% while Compass Bank ( www.bbvacompass.com ) offered the lowest rates with 3.750%. The Bank of America ( www.bankofamerica.com ) and the JPMorgan Chase ( www.jpmorganchase.com ) offered 4.125%. While most lenders will push one of the three products on the list below, there are other options for the borrower.  The 30-year fixed rate loan is the most popular since it offers the lowest monthly payment.  The trade-off is paying a higher interest rate.  For those who have a better cash flow, the 15-year product may be more suitable.  The 15-year fixed rate loan will allow the borrower to pay more toward principal with each payment, and since it has a lower interest rate the overall amount of money that is paid in interest will be much lower.  While many people steer clear of the 5/1 ARM it is beneficial to some borrowers.  For instance, a person with a smaller loan (usually due to refinancing) may have the cash flow to pay off their ARM in 5 years or less.  This person could save an extra 1% in interest payments over the 15-year product and never worry about the rate adjusting later in the life of the loan. Top San Antonio Area Banks and Credit Unions As of 30 Yr-Rate 30 Yr- APR 15 Yr- Rate 15 Yr- APR 5/1 ARM-IR 5/1 ARM-APR USAA Federal 02/13/12 3.875% 4.044% 3.000% 3.313% NA NA Bank of America 02/13/12 4.125% 4.276% 3.500% 3.729% 2.750% 3.293% Wells Fargo 02/13/12 3.875% 4.054% 3.125% 3.438% 2.250% 3.156% JPMorgan Chase 02/13/12 4.125% 4.219% 3.375% 3.538% 2.250% 3.044% Compass Bank 02/13/12 3.750% 3.931% 2.875% 3.137% 2.625% 3.248%   Listed rates from banks, thrifts, and credit unions were listed on their websites on the date indicated for conforming loans with 0 points.  Data is believed accurate at time of collection, can change without notice, and will vary based on an individual’s credit history.  Contact a specific institution for current rates. Continue reading →

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