Maybe they were listening.

I've railed about the credit card industry in the last few months jacking up rates, hiking minimum payments, changing card terms – all in a seeming effort to get things done before Feb. 1, when a new credit card law will restrict some of their most anti-consumer activities.

They’ve just been doing more of the bad stuff now.

A web site, BillShrink.com, says that since August, Wells Fargo has actually increased its rates by 12 percent.

Thursday, Reps. Barney Frank, D-Mass., and Carolyn Maloney, D-NY., introduced a bill to push up the new law, making its reforms effective Dec. 1.

“It’s clear that credit card companies are taking advantage of this period between the signing of my bill and the current effective date,” Maloney said in a statement. “Americans need relief now.”

Faster than you can say annual percentage rate, consumer-advocates across the country were calling for the bill’s passage. “Let’s stop the consumer pain,” wrote Ed Mierzwinski, director of consumer programs for the U.S. Public Interest Research Group.

> Discuss this entry

Cong. Barney Frank, D-Mass., chairman of the House Financial Services Committee, blasted the Federal Reserve for its record on consumer protection. He's rolling toward the creation of a Consumer Financial Product Commission and he's rolling hard.

One point he makes: The Fed only acted to reign in the mortgage industry after the subprime loans and securities filled with them, exploded.

Read Frank's full Fed report card on consumer protection after the jump

> Discuss this entry

Faced with the prospect of legislation and possibly a Federal Reserve-imposed regulation, two of the nation's largest banks have decided to change the way they handle overdrafts and what they charge customers.

This has become a source of billions in revenues for all banks. And major irritation for consumers.

Not an easy knot to untie. Chase and Bank of America have made a start. Good news.

http://www.sun-sentinel.com/business/yourmoney/sfl-overdraft-092309,0,783281.story

> Discuss this entry

It’s all about the pay, some days. Amazing pay for the seller, but what sort of payoff for the investors.

The Securities and Exchange Commission yesterday announced a settlement with Regions Bank, over huge hidden fees and the activities of U.S. Pension Trust.

Regions acquired Union Planters in 2004. Union Planters began the bank's relationship with USPT in 2001.

Here’s what was happening, according to the SEC complaint:.

USPT managed to convince 14,000 investors, most of them living in Latin America, to invest $255 million into a collection of mutual funds. Trouble was, the organization didn’t disclose that it was taking as much as 85 percent of investors’ annual contributions in sales commissions and profits for itself. If instead you invested one lump sum, the charge was as much as 18 percent.

Regions agreed to a cease and desist order and will pay a $1 million penalty.

> Discuss this entry

Household incomes in South Florida have remained flat or even declined over the last five years, according to newly released Census figures.

For Broward County households, between 2003 and 2008, median annual income went up $1,671. For Palm Beach households, income actually declined, by $1,182.

“If people feel like they’re not any farther ahead than they were five years ago, it’s not all in their minds,” said Cora Barnhart, associate professor of economics at the Rinker School of Business at Palm Beach Atlantic University.

South Florida’s flat-to-declining household incomes in recent years were far outpaced by the strong upward trend in prices for consumer goods.

In South Florida, local inflation was high, pushing prices up at a 5 percent to 6 percent rate in 2006 and 2008.

The Census report makes it clear that Florida has been through a major change in fortunes.

Between 2003 and 2007, state and South Florida incomes rose in several years, although some changes were small and there were declines in some years. In good years, incomes generally were growing along with the housing industry’s boom until the bubble burst in 2007.

“We were seeing a nice up trend until we hit the worst recession since the Depression,” said economist Sean Snaith of the University of Central Florida. “Anytime economic output falls, so does income.”

The kick of the recession that began in 2007 was especially hard on South Florida.

Income normally goes down during a recession, but the drop in incomes last year was much sharper than in other economic downturns. In 2008 compared to 2007, after inflation is subtracted, the median household income for the nation fell 1 percent. Half of all household incomes where higher and half, lower.

Median household incomes fell 4 percent statewide in Florida, 3 percent in Miami-Dade, 5 percent in Palm Beach and 6 percent in Broward.

In the recession of March to November 2001, household incomes after inflation fell 3.5 percent nationwide. In the recession before that, from July 1990 to March 1991, incomes fell 3.9 percent.

Where does declining income leave Floridians? With far less purchasing power, said Economist Antonio Villamil, dean of the St. Thomas University School of Business. He said such figures give him doubts about the strength of the economy’s recovery.

“Consumer spending will be relatively weak for the next year or so. The consumer needs to recover,” he said. “Since 2003 they’ve been living on credit cards and flipping condos. The bottom line is, that’s over now. And the banks have tightened consumer lending and second mortgages.”

What’s more, Snaith said, people are saving more, as they try to recover from losses in the stock market.

For this year, labor expert Bruce Nissen, who is on leave from Florida International University, said he expects the income-drop to continue.

When 2009 figures are collected, Nissen suspects the median household income for 2009 will be less than it was in 2003.

> Discuss this entry

My weekly list of things I meant to say, follow-ups, requests, all the personal finance news that need to be cleaned up and aired out.

First, off, First-time home buyer...
When I was writing recently about the looming deadline for first-time homebuyers to get their act together and to buy the house by Nov. 30, I assumed the real estate lobby would want to get that deadline extended. But it's not. At least openly. Openly, the real estate folks want us to get those deals done now. Quietly, I wouldn't be surprised at all that they're working furiously to get more help from a tax break?

Second, Got a question?
We're going to do a Financial Planning Helpline, as we did last year, using members of the Financial Planning Association to answer your calls. If you'll submit a question in the box at right, I'll be handing them out and trying to get answers.

Third, Did you notice?
We really do have deflation in Florida, which is an overall decline in prices. I reported last week that local prices for consumer goods have fallen by the largest amount in 31 years, according to a federal Bureau of Labor Statistics report.

The local measure of consumer prices fell 1.8 percent on an annual basis through August.
August was the sixth consecutive month in which inflation has been absent from the local economy, replaced by falling prices or deflation.

Fourth, Probably doesn't feel any better.
Because, on average, your income hasn't been going up. Writing that story for tomorrow.

More later.

> Discuss this entry

Fort Lauderdale Securities attorney David Weintraub has been out and about, testing and entertaining financial planners and trust officers bankers and estate attorneys with his Jeopardy-style game of financial questions. This week, he did his game-show special for the Financial Planning Association in Broward.

And the category is: Lawyers in Love (with themselves) for $200
The answer: Plead no contest in 1973 to failing to pay $29,500 of federal income tax.
The question: Who was Vice President Spiro T. Agnew?
You get it.

Now let's see if you're smarter (financially) than a fifth-grader. Weintraub says his most recent audience did very well.

The category: Equities for $400
The answer: A complex investment that pays
investors part of the capital
appreciation in a stock index
and guarantees a minimum
return if held to maturity
The question: You guess.

The category: Elder Investors for $200
The answer: Reporting elder abuse to the state's central abuse hotline.
The question:

The category: Equities for $800
The answer: The tax advantage of purchasing a variable annuity inside an Individual Retirement Account or other qualified retirement account.

The questions are below:
Equities for $400: What is an equity indexed annuity?
Elder investor for $200: What is a bank's obligation when it has reasonable cause to suspect exploitation of an elderly person?
Equities for $800: What is none?

Weintraub, whose web site is www.stockbroker litigation.com, has actually made this stuff fun.

> Discuss this entry

Consumer prices are going down in South Florida, driven by dropping gasoline, housing and clothing costs.

Overall, local prices for consumer goods have fallen by the largest amount in 31 years, according to a federal Bureau of Labor Statistics report Wednesday.

The local measure of consumer prices fell 1.8 percent on an annual basis through August.
August was the sixth consecutive month in which inflation has been absent from the local economy, replaced by falling prices or deflation.

The rest of the nation is experiencing deflation, too. Atlanta’s prices are going down at the fastest rate, 3.8 percent, followed by Detroit, at 2.3 percent.

Nationwide, prices are falling, but not as rapidly as in those cities or in South Florida.

The national consumer price index has declined 1.5 percent on an annual basis, even though for the month of August, the CPI actually rose 0.4 percent.

When volatile energy and food costs are stripped out, the core CPI is going up at a 1.4 percent annual rate – the smallest rate of increase in more than five years.

The South Florida core CPI is also rising, but at a slight 0.3 annual rate.
In South Florida, “We are seeing acceleration in the decline that has been going on in Miami,” said BLS Economist Matthew Dotson.

Driving prices down was a 9.2 percent annual decline in transportation costs – including gasoline.

“Think about what you paid for gas last summer, “ Dotson said.

Housing costs, which haven’t fallen in South Florida since September 1986, came down 0.6 percent on an annual basis, the BLS said.

Apparel has plummeted by 14.9 percent since last year.

“With the loss of wealth form of home equity, the tremendous loss in investment portfolios and high unemployment, those take the wind out of consumer demand,” said Economist Sean Snaith of the University of Central Florida. “That’s why sales are showing up for apparel,”

The BLS measures inflation nationally every month and local inflation in ten cities every other month. It records prices in Miami and Fort Lauderdale, but not in Palm Beach County. Local economists say the price trends there are similar, however.

In Miami and Fort Lauderdale, consumer prices fell 0.3 percent in April, 1.6 percent in June and now 1.8 percent in August.

Those are the only decreases – other than a one-time dip of 0.1 percent in July 1986 – that the BLS has recorded since it began publishing local inflation figures in 1978.

That’s in sharp contrast to last year, when prices were growing at annual rates of 4.9 percent to 5.8 percent.

In recent years, the peak South Florida annual inflation rate was 6.1 percent at the start of 2006.

> Discuss this entry

Federal Reserve Board Chairman Benjamin Bernanke may think the recession is over, but the average Floridian has a hard time seeing signs of the end.

With high unemployment, low consumer confidence and weak consumer spending, Floridians stand on uncertain ground, one year after the collapse of Lehman Bros.

Bernanke said Tuesday the worst recession since the 1930s is probably over. But he conceded that the economic pain won’t go away quickly.

“It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was,” he said.

The recession nationwide began in December 2007, although Florida analysts say it began here earlier that year, probably in March.

Although nationwide unemployment stands at a 26-year high of 9.7 percent, Florida's rate is higher, at 10.7 percent statewide in July. It's even more in Palm Beach County at 11.3 percent. Broward's rate is 9.5 percent.

One year ago, when Lehman Bros. collapsed Sept. 15, 2008 in the largest corporate bankruptcy in U.S. history, Wall Street was teetering. It had already survived the demise of Bear Stearns in March, 2008, as the firm folded after the collapse of two hedge funds tied to subprime mortgages.

> Discuss this entry

While I don't pretend that widespread financial literacy would have prevented our economic difficulties, I am certain that fewer consumers would be in such deep trouble if more Americans had the knowledge they need to properly evaluate offers and make solid financial decisions. If more Americans were financially literate, fewer Americans would be struggling today with debts that they are unable to repay.

-Susan C. Keating, president and chief executive officer, National Foundation for Credit Counseling, speech during NFCC annual conference in Washington, D.C., Sept. 14.

NFCC members counseled 3.2 million people last year, more than double the figure in 2006.
.

> Discuss this entry

Here's Sunday's column....

"I have a college degree, but you know, I just don't know anything about mortgages and what's the right thing to do."

When I heard a South Florida home buyer say this the other day, it sounded so familiar. I hear that sentiment so often, not just about mortgages, but about life insurance, investments, annuities, 401(k)s and mutual funds.

Plenty of smart, conscientious people don't have a great understanding of personal finance, of financial products and how they work.

In fact, most people don't, judging by a handful of surveys, including the first National Financial Literacy Challenge, conducted last year among 46,000 high school students. Average score: 56 out of 100. That's an F.

I suspect the findings also apply to lots of post-high school grads.

Financial illiteracy is the norm, even though we have foundations, government initiatives, regulatory programs and private industry-funded educational institutes -- all designed to raise your level of financial knowledge.

I've looked at this issue for years and I think that Wall Street really doesn't want to increase the nation's financial literacy. Nor do most school systems.

The impacts of financial ignorance are significant: Far too many people live beyond their means, don't save, pay high fees for investment and insurance products, get out of the stock market at the wrong time and make life-changing financial decisions without an ounce of clear information.

Why bother to worry about this now? Congress is considering setting up a Consumer Financial Products Commission to evaluate the stuff the financial services industry sells ¡V because consumers certainly can't do it all.

Even more crucial is this: Because most of us have to plan and fund our own retirement, such widespread ignorance is dangerous.

"I've made this point many times. If we are thinking we are going to address the lack of financial literacy by informing people at one seminar, let's not even start that discussion. You don't cure pneumonia with an aspirin," said Annamaria Lusardi„©, professor of economics at Dartmouth College. Lusardi is editor of Overcoming the Saving Slump: How to Increase the Effectiveness of Financial Education and Saving Programs.

Financial illiteracy is a serious condition, she says, and it requires a serious response.

Her prescription: Start with financial education programs that aren't a one-size-fits-all. First, she says, educators ¡V at schools and any other institution -- should listen to what consumers want to know, which problems they'd like to solve. Let the consumer needs guide the educational program. Then provide solutions to their specific issues. And do all this in a clear and simple format.

I asked the same questions of Jane Bryant Quinn, the columnist and best-selling personal finance author. Quinn is wrapping up a re-write of her classic Making the Most of Your Money . "I think a lot of people have indeed learned from us [in the press]. That they should invest in index funds, things like that," Quinn said. "The personal finance press has done a great job of combating all the stuff you hear from Wall Street where they sell you all the terrible products with the high fees and the same from the insurance industry."

The next frontier, she thinks, may be financial products that are designed to get consumers to do the right thing ¡V such as college that require students to show that they tried to get financial aid before applying for a loan.

I think there's another important aspect to increasing financial literacy. That's timing.

I have a gut-level conviction that you can present all the information you want about finances to people and they won't hear it until they are ready. Tell 'em to save for retirement when they're trying to figure out how to budget for the new baby and your message won't get across.

"We are in a big teachable moment," Lusardi said. "The financial crisis has shown us how dire and how important financial mistakes are."

Harriet Johnson Brackey can be reached at hjbrackey@sunsentinel.com.

> Discuss this entry

My weekly list of things I meant to say, follow-ups, requests, all the personal finance news that need to be cleaned up and aired out.

Has anybody used the new crop of websites that claim to rate and review financial advisors?

The ones I know of are www.evaluatemyadvisor.com and fabeetle.com (in development). Are there others?

I've already looked at -- and don't plan to look at again -- a self-promotional site called FinanicalPlanningCertificationCenter.com. Supposedly it was designed to clear up confusion over the credentials that financial advisors typically use. But it really just promotes one designation, Chartered Financial Consultant, over another one, the Certified Financial Planner designation.

I'm hearing from readers that....
There's a foul-up in the system for allowing the unemployed to pay only part of their health insurance premiums through the Cobra provisions. One reader says he's been paying, but the company the state of Florida contracted with to funnel federal subsidies to the health insurers is running four months behind. Result: He was told his health insurance with Blue Cross Blue Shield of Florida wasn't in force

Consumer groups chastise Chase

(Heard about this one from readers, too)
Consumers Union, the National Consumer Law Center and U.S. Public Interest Research Group have called on Chase to stop hiking the minimum payments for their credit card customers who have fixed-interest rate cards. The hike was to 5 percent of the balance, up from 2 percent. The only way Chase was allowing customers to keep paying a 2 percent minimum was if they signed up for much higher interest rate after a low-rate promotional period.

> Discuss this entry

So I do have a few thoughts on investment fraud left, after so many stories about it recently. There seem to be Ponzi schemes cropping up all over the place. After talking to dozens of victims, I think victims have to take some of the responsiblity. But there's more. From Nightly Business Report...

http://tr.im/yqOP

> Discuss this entry

The Florida Legislature said it would put $30 million toward giving first-time home buyers a cash advance and the buyers could pay the money back when they get that new $8,000 federal income tax credit.

That was the idea, anyway.

Less than half of the money allocated has arrived. The process for people to apply isn't even open in some cities. And good luck getting through this in time to buy a house before the tax deadline.

My story in today's newspaper:

http://tr.im/yluL

> Discuss this entry

My weekly list of things I meant to say, follow-ups, requests, all the personal finance news that need to be cleaned up and aired out.

I hear....

That Michael and Diane Bienes' names have been taken down at the (formerly) Bienes Diagnostic Center at Holy Cross Hospital. Bienes, you will remember, ran one of those Madoff feeder funds until the SEC shut him down. Many of the investors in his fund then invested with Madoff directly. Bienes told me he had to stop his many charitable contributions last year, because he, too, had his money with Madoff. Anyone else know if this is true? I've put in a call to a Holy Cross spokeswoman to check this out. ..

And I learned....

Some of the new rules for mortgage disclosures from FDIC Consumer News, http://www.fdic.gov/consumers/consumer/news/cnsum09/index.html

-Starting Oct. 1, the loan documents will have to disclose any fees the lender pays to a mortgage broker for bringing in your business.
-In effect since July 30 is a Federal Reserve rule that says lenders have to give borrowers disclosures about the loan at least seven business days before the loan closes. This is for mortgages as well as refinancing a loan.
-Starting Jan. 1, HUD will limit how much the actual costs can go up from the good faith estimates.

Watch Me...

On Wednesday, on Nightly Business Report. My commentary will be about why I think there's been such an increase in investment fraud. The show airs on Public Broadcasting System stations nationwide.

> Discuss this entry

My weekly list of things I meant to say, follow-ups, requests, all the personal finance news that need to be cleaned up and aired out.
The ship is coming in
State money from Florida tax receipts that will be an advance on the $8,500 tax credit for first-time homebuyers is beginning to make its way through the system. But the money is still not in the hands of anxious homebuyers that I'm hearing from in South Florida. I'm told more than $5 million has been dispersed to Broward County and 60 other local governments. More on this later.

UBS
One reader in Palm Beach says he has proof that UBS set up a Swiss bank account without his permission. Anyone else?

Small fry investor losses
That’s how we came to refer to the story I wrote for Sunday’s paper about the huge increase in investor disputes with advisors and allegations of investment fraud. I called it small fry because, gee, next to Madoff, almost any investment fraud seems small potatoes. Yet these are painful losses. My question that remains: Do small fry investors have trouble getting a lawyer to help them? Do regulators pay attention to the small fry complaints?

If you missed the story, it's here:
http://www.sun-sentinel.com/business/yourmoney/sfl-smallfry-losses-082909,0,1642153.story
and here's the sidebar:
http://www.sun-sentinel.com/business/yourmoney/sfl-smallfry-sides-082909,0,5865169.story

Best reaction to small fry investor losses
The reader who called to say, no, that research from FINRA on who becomes a victim of investment fraud, that didn’t apply to him. He wouldn’t’ fall for a fraud.

(The FINRA research noted that most victims of investment fraud direct their own investments, rather than use an advisor. The anonymous caller said that couldn’t possibly be true. A big problem, FINRA’s investment education foundation president John Gannon said, was getting people to believe that anyone, including the smartest, self-directed investors, could fall victim to fraud.)

Here's the link
To my commentary on Marketplace Money,
the American Public Media show on National Public Radio, that aired on Saturday.
Title: No credit card for my college-age son.
http://marketplace.publicradio.org/display/web/2009/08/28/mm-moneyforcollege/

Textbook rentals
Looking for people who have experience with renting college textbooks. It’s starting to take hold and I want to know how well it’s working. Let me know if you or your student is using this service.

Banks
That FDIC report on bank earnings last week had the headline that more than one in four FDIC-insured institutions lost money in the second quarter of this year. A lot of that had to do with charge-offs for loans. There's an interesting glimpse into the nation’s personal finances included here. And it's a bit better than the picture you see of business borrowers. Both are in poor shape. But the FDIC report noted that the increase in charge-offs for commercial loans was about double the increase in charge-offs for credit cards. Commercial loan charge-offs increased 165 percent, while credit card loans charge-offs increased 84.5 percent

Overall, these are rotten records. For 52 straight months, the rate of bad loans has been rising.

Madoff
Didn’t see any report from the SEC on how it mishandled Madoff and what it learned. I guess we all wait.

> Discuss this entry

Hey, I was mistaken.

I believe, after reading Rush Limbaugh's comments for the umpteenth time, that Limbaugh was saying car dealers are collecting sales tax based on the full purchase price of vehicles, which includes the Cash for Clunkers rebate of up to $4,500.

So, you get to pay tax on that $4,500, even though you didn't actually pay that amount, the government gave it to you.

I had thought, first time around, that he was talking about income tax. I was wrong.
I have taken my original post down.

The Cash for Clunkers rebate payment is not taxable income.

> Discuss this entry

Consumer expectations for the future are turning positive, showing the most improvement since the recession began — even in Florida, one of the hardest hit states.

Rising home sales, stock market gains and no economic setbacks on the horizon have lifted consumer spirits, according to a University of Florida survey.

The index of Florida’s consumer confidence rose three points to 70 in August. It was the first increase since April.

“We are not out of this recession yet, particularly here in Florida, but things are not nearly as bad as they were a year ago,” said Chris McCarty, survey director of the university’s Bureau of Economic and Business Research.

Nationwide, the Conference Board said its consumer confidence index rose to 54.1 from 47.4 in July, The Associated Press reported. For the previous two months, the index had declined.

> Discuss this entry

Watching government this morning. The news will get ugly and uglier, I suspect.

What interests me this week:

-The Securities and Exchange Commission's inspector general's report on how and why it never uncovered Madoff's ponzi scheme. Don't know what day it will come out, but an early version has been circulating on Capitol Hill since July, according to one report.

-Thursday's report on bank earnings for the second quarter, from the FDIC

-

> Discuss this entry

Anyonoe can be caught by investment fraud. That's becoming clearer every day in this economy.

"When the tide goes out, it reveals all the shipwrecks." That's what securities lawyers say, according to attorney Scott M. Dimond, a shareholder at Dimond Kaplan & Rothstein in Miami.

Like other attorneys, he suspects the receding tide is uncovering the largest number of investment frauds since tech stocks collapsed in the bear market of 2000-2002.

A group of state regulators, the North American Securities Administrators Association, issued its list of the top ten investment scams -- from investing in infomercials to promissory notes.

Look at their list here:

http://tr.im/wCld

In fact, it was a busy day on the fraud front. Finra, the Financial Industry Regulatory Authority, and the SEC, issued an investor alert about leveraged Exchange Traded Funds and inverse ETFs. If you're considering one, read this first...

http://tr.im/wCyk

I'll be out of the office for a few days. Talk to you next week.

> Discuss this entry

So, what about your pay next year?

I mean, forget this year.

We can put 2009 down as the year of the pay cut, either with a knife or the pay cut that’s not called a pay cut.

It’s called a furlough or a forced unpaid vacation or a reduction in hours or the announcement that there will be no raises this year. In my reporting, I found so many examples of that.

And don’t forget the salary offers for new hires that recruiters said are coming in, across the board, at 10 percent to 50 percent less than a year ago.

So what’s ahead? The consultants at Hewitt Associates surveyed employers across the globe and found that salaried employees can expect a pay raise of 2.6 percent in 2010.

Before you start the party, know that 2.6 percent is an increase over 2009, when base salaries rose only 1.8 percent. That was the lowest such figure in 33 years. Hewitt started tracking this in 1976.

Okay, it’s better. But is it good?

Yes, at least by one estimate. In 2010, the Congressional Budget Office projects we'll have 1.7 percent inflation. So salaries will outpace rising prices.

This year, the CBO’s view is that we’ll have almost no inflation, a 0.1 percent rise in the Consumer Price Index, so pay was rising in real terms this year, as well.

But somehow, with all the stories of pay cuts, it doesn’t feel like it did at all.

> Discuss this entry

Missed my Sunday column?
It was about a pretty scary thing. If you do get your mortgage loan modified, watch out.

The lender can report this to the credit bureau as a "partial payment," and this will slam your credit score.

It's distressing that borrowers trying to keep their homes would get hurt. And I'm hearing more and more people who simply can't get any help from their lenders. I'll be covering this mortgage crisis, I believe, for some time to come. So anyone who wants to share his or her story, drop me a line at hjbrackey@sunsentinel.com.

Here's the column...

http://tr.im/wxuI

> Discuss this entry

Here I go, mixing it up with the financial services industry.

It surprises me to get emails from people who don't seem to know Wall Street is getting a lot of criticism. So much so that the Obama administration has proposed a major overhaul of how it is regulated.

Here's my commentary that aired this week on Nightly Business Report on PBS

http://tr.im/woVP

> Discuss this entry

I couldn't figure out at first why you would want to do this. But SmartMoney has started a daily tweet of headlines from a year ago, so we can all Relive The Crash. Aren't we still living it? It's not over yet, is it? But then I had a look. I got a hearty laugh out of reading this headline from one year ago today:

Greenspan: The End Is Near

(Whose end are we talking about?)

The story reports that the then-Fed chairman predicts that home prices will bottom out in the first half of 2009. Greenspan wasn't much of a seer into the future, was he? Of course, big parts of the present seem to have escaped him as well. I remember his later admission that he didn't completely see the extent of the subprime mortgage market and the danger it posed to the economy.

If you enjoy the details of doom as it unfolded, you, too, can track the ballooning budget deficit, the bailouts, the growing foreclosures, the whole thing at :

smartmoney.com/crash

or just have it pester you daily, tweet by tweet, on Twitter at

http://twitter.com/ReliveTheCrash

> Discuss this entry

Hey, Watch Me!
I'm on PBS tonight. Doing my monthly commentary on The Nightly Business Report. In South Florida, that's on Channel 2, WPBT, airing at 7 p.m. Tonight, I'm talking about Wall Street's biggest issue with its customers.

And, speaking of consumers, here's the story I had in the paper, with updates.

The Florida Office of Financial Regulation, under fire for its role in not uncovering what prosecutors say was Allen Stanford’s $7 billion bank fraud, has a new commissioner who represented the state's banking industry for more than two decades.

Gov. Charlie Crist's Cabinet appointed J. Thomas Cardwell, an Orlando attorney who has served as general counsel for the Florida Bankers Association for 25 years, as the new chief.

Previous Commissioner Don Saxon resigned last year after an award-winning Miami Herald investigation revealed that Florida allowed thousands of criminals to become mortgage brokers.The Stanford operation, based in Texas, had a large operation in Miami that apparently didn't draw state regulators' attention until the Securities and Exchange Commission stepped in during February.

“I have every expectation that Tom Cardwell will bring a strong enforcement mentality and responsible approach,” Florida Chief Financial Officer Alex Sink said in a news release.

But consumer advocates didn't share that view.

“The governor should have appointed a consumer advocate instead of an industry shill,” said attorney Robert Murphy of Fort Lauderdale.

“That he’s a banker says a lot about who the governor sides with,” said attorney Jeffrey Tromberg of Fort Lauderdale. “I certainly hope he’s going to jump in to what’s going on throughout the state with foreclosure scam artists preying on people suffering the most these days.”

Cardwell called me after deadline to say he has spent quite a bit of time in his career advocating for consumers. He is chair of Akerman Senterfitt's Financial Institutions group and in that role served as the banker's outside general counsel.

He said he was also a founder of Orlando's legal aid program and he was also a chairman of the local housing finance authority, which helps low-income consumers.

"I am not personally an industry ideologue," he said. "That's not my style."

In addition, he says it takes one to face off with one.

"My background and experience on the industry side probably puts me in a position of not being able to be buffalo-ed by what the industry may say."

The Office of Financial Regulation oversees state-chartered banks, credit unions, finance companies, non-depository financial firms and some parts of the securities industry.

> Discuss this entry

Conversations with readers from last week about their mortgages, short sales and loan modifications, which mostly, aren’t happening or are going haywire.

The saddest story first: Helen Rudinksy, a Wells Fargo borrower, says she has been trying to modify her mortgage since the fall of 2008. She says her documents got lost a few times in Wells Fargo’s offices and she had to start the process over. Despite her efforts and because she says of delays on Wells Fargo’s part, her home was scheduled to be sold at auction last week.

So she drained her IRA, knowing she’ll face penalties for that, and borrowed money, rushed to the bank minutes before the sale and saved her home.

Next, Wells Fargo told her that she was missing documents and that’s why they were planning to sell the home. But she had check list and a letter documenting that they had received all that was needed.

The kicker: She’s a widow, raising a two-year-old who has autism. She was, at the time of the scheduled sale, across the country getting treatments for her child.

The true meaning of ruined credit: A friend called to say she had indeed sold her home in a short sale. This friend has been in financial peril for some time. What was surprising was what she said is the true cost of ruining your credit. When she rented her new apartment, she had to put down one year’s worth of rental payments. A year’s rent?

The misunderstanding of the Obama plan: A reader from Boynton Beach called to inquire who would qualify for a loan modification under the Making Home Affordable program. Her son, she said, was told he couldn’t qualify. The son’s monthly mortgage payment: $800. Due to loss of his job, his monthly income had fallen to about $1,000- $1,200. What’s wrong: The program aims to cut monthly mortgage payments to 31 percent of a borrower’s income. There’s no way this borrower can fit the mold. He doesn’t have enough income to have that mortgage anymore. The mother was not happy. She wanted to know who then does the program help.

> Discuss this entry

If you are the thrifty type, this weekend it is time for a sales tax vacation.

It's been two years since Florida had a back-to-school season sales tax holiday in early August. But other states still do.

In Alabama, North and South Carolina, and Tennessee, the tax-free holiday begins Friday. August 7 and runs through Sunday.

You'll be able to keep the 4 percent through 9.75 percent sales tax in those states if you're buying school supplies, clothing and in some cases, computers.

If your vacation plans are taking you elswhere across the country, you can see a complete list of all 16 state sales tax holidays in the August issue of Real Simple magazine and at Kiplinger.com.

For more information, go to:
http://www.kiplinger.com/features/archives/2009/07/sales_tax_holidays.html

> Discuss this entry

Now we all know that banks, with a few exceptions, really aren't modifying mortgages for borrowers in distress. Look at the comments on yesterday's post. The stories there are difficult to accept. And, we know the Obama administration thought somehow that publishing the list of which banks had done what would bring public embarrassment to the banks.

Me, I don't think that's going to do much. The outrage they're hearing from consumers today also is not moving them off the dime.

I'd like to hear from anyone who has successfully managed to get a mortgage modified. I'd like to know your advice, your tips, for others who are beginning this tortured process.

> Discuss this entry

The mortgage crisis is so far from being resolved.

Five months into the Making Home Affordable program, the Treasury Department reports today that only 15 percent of homeowners eligible for the loan modification program have been offered help. Less than nine percent have actually had their loans modified.

That leaves millions out in the cold.

"I think the banks are looking at the market bottom and trying to hold on to som eof their loans and properties until things get better," said Bill Newton, executive director of the Florida Consumer Action Network. "But it sure doesn't help the rest of us, especially since they're working with government bailout money."

The numbers from the first monthly Servicer Performance Report through July: 400,000 offers have been extended to 2.7 million borrowers who are more than two months behind in their payments. Of those, only 235,000 have started on the three-month trial period to begin a loan modification.

Some servicers, including PNC Financial, haven’t modified any loans at all. Or next to none.

National City Bank, the report says, has modified four loans but it has 37,126 eligible for the program.

The figures released are nationwide. Here are the details on some lenders that are active in South Florida:

Bank of America, 796,467 eligible, 27,985 modified
IBM Southeast Employees Federal Credit union, 72 eligible loans, 4 modified
J.P. Morgan Chase (which took over Washington Mutual), 394,075 eligible, 79,304 modified
Ocwen Financial, 55,516 eligible, 2,517 modified
Wachovia Mortgage, 62,852 eligible, 1,356 modified
Wells Fargo Bank, 329,085 eligible, 20,219 modified

> Discuss this entry

Here's my column from Sunday, in case you missed it.

http://tr.im/viyX

> Discuss this entry

I enjoyed the discussion about broker pay, commissions and finding a financial advisor.
More comments?

And here's today's topic, because it's on my mind. Just had a chat with the investor education foundation folks at FINRA, the Financial Industry Regulatory Authority.

My question: Who is the typical victim of investment fraud?

The answer from their studies:

A man, age 55 to 65, who has a college education, financial literate, who is an active investor and whose portfolio is self-directed.

Not the little old lady, sittiing alone, waiting for that telemarketer's call.

.

> Discuss this entry

It’s the old Watergate adage, whispered in that dark garage, that has governed a lot investigative journalism. I think it’s one that investors should follow, too, to protect their own interests.

It is: Follow the money.

The Obama administration’s proposals to broaden the Securities and Exchange Commission’s powers include a provision that follows the money.

The SEC could write rules to ban brokers or investment advisors from receiving pay that is unfair or compensation that stacks the deck against the investor, such as bigger commissions for selling this in-house mutual fund rather than one from an outside company that might be better for the customer.

But the SEC gets to decide which pay practices it could regulate and what is fair or unfair.
So could it ban broker commissions? Should it?

Should it set maximums for fees for investment advice?

What should the SEC do about pay?

Would regulation of pay help investors get better advice?

> Discuss this entry

The Wall Street Journal reports that four major Wall Street brokerage firms watched $8 billion flow out of their hands last year. At the same time, registered investment advisors gained $108 billion in new money to manage.

People are and have been on the hunt for new advisers. And I know this is a nail-biting experience for many. They aren’t sure who to call. What questions to ask. How to make a good decision. How even to measure whether they’ve done the right thing.

I’ve written those “How to pick a financial adviser” stories or “Here’s what the credentials mean” columns several times. Each time I do, the phone rings. And a reader asks, “So, those questions are good, but, do you know anyone? Who do I call?”

If not lead to a brokerage by some zillion-dollar marketing campaign, the public seems to be lost. People have trouble finding an investment advisor. (And you'll notice I didn't even say a good one.)

For the life of me, I can’t figure out why. If all sorts of professionals -- attorneys and doctors come to mind -- advertise or do something else to make their names known, why don’t good financial advisers do the same?

I guess you don’t see too many accountant ads, either. Is it unseemly? Would it make any difference, considering most people go on word-of-mouth referrals? Are there some professional rules against it? Is it complicated by the notion that some advisors can also act as brokers? Are they hiding?

There has to be a reason, but I’m not sure what it is.

Why don’t advisers try to connect with the public? How do they expect the public to find them?

> Discuss this entry

Camp, college, back-to-school shopping soon. It’s a busy season for families

A reminder from the IRS: There are new tax breaks available for college costs. There’s a maximum $2,500 per student credit designed to offset the cost of the first four years of college. It’s broader than the Hope tax credit for this year and next. It will be available to higher-income and lower-income taxpayers. It can be used for tuition, fees and books.

And, there’s a special tax provision for that laptop that the colleges require. If you plan to use money in a Section 529 college savings plan to pay for college, the law now says you can use it to buy computers, Internet access and related equipment or services. No games software, but educational things.

So save those receipts. You’ll need ‘em at tax time.

> Discuss this entry

Regulators are fighting other regulators over financial reform this week.
Meanwhile, some very important (to consumers) reforms that Congress passed just two months ago are already being derailed.
Heard enough from me yet about credit cards? No, no you haven't. Here's my latest commentary from The Nightly Business Report on PBS.

> Discuss this entry

As if having teen unemployment north of 20 percent were not enough -- right, it's twice as high as the unemployment rate in Florida -- there's one little bomb tucked into Friday's federal minimum wage hike: It won't apply to teenagers with summer jobs.

There's a special subminimum wage for anyone younger than 20 during the first 90 consecutive days of employment. It is only $4.25 an hour. After that, the pay must go up to the federal minimum for everyone else, which will be $7.25 as of Friday.

So that means a teenager would have to had started his or her summer job back in April in order for the new minimum wage to apply now. At least of the teenagers I know, very few were working at that time. They didn't start until school let out.

(Oh, and, there's a special summer job exemption, too, which says places like camps don't have to pay the minimum wage at all.)

But the good news: "I have never seen anybody pay the teenager training rate," said Maria Perez, president of the Broward County Association of Payroll Professionals.

The reason: No one would apply for those jobs. Other employers are paying more than the minimum, she says. And the statistics back her up. Very, very few workers get the minimum wage any more.

The teenager training rate was inserted into the law back in 1996, but attorney David Buchsbaum, a partner in the Fort Lauderdale office of Fisher & Phillips, a labor and employment law firm, says he wouldn't advise employers to use it.

That's because there's another provision in this section of the law that says employers cannot get rid of another worker just to hire that teenager and pay the sub-minimum rate.

"If that teenager at the subminimum wage is taking a spot that used to be held by someone else, I would have some concerns about the displacement issue," he said.

> Discuss this entry

If you haven't heard me rail about credit cards often enough, tonight's your chance.

Catch me on television, talking about how credit card reform is being derailed by the industry.

Tune in to The Nightly Business Report on PBS stations nationwide. I'm doing the Money File segment, near the end of the show.

In South Florida, NBR airs at 7 p.m. on WPBT Channel 2.

> Discuss this entry

I'm so not worried about inflation.

And it's not because I believe Federal Reserve Chairman Ben Bernanke in this morning's Wall Street Journal.
It's because the signs all around are pointing the other way, for some time to come.

Others think so too.

Try these articles from SmartMoney.com:
http://tr.im/tkM8

You'd have zero sense of history to think the Fed has lost all sense of how to fight inflation and the importance of the battle. I mean, we've been there. Not that anyone needs to have lived it, but its legacy is huge and respected and economists learned from it.

You can go through two days of Bernanke testimony, if you can make it to the end of it all, and you won't get much more than what he said in today's column: We have tools to fight inflation and we'll use them. When the time comes. But it's not now.

> Discuss this entry

Readers certainly do have strong feelings about Rochelle Strauss, the single parent of two teenage girls that I wrote about on Sunday. Working with Certified Financial Planner Thomas Balcom, we tried to give her some direction for living on a budget of $54,600. She pays out nearly one-quarter of her after-tax income for tuition to a private religious school for her daughters. She values education and her religion very highly and is willing to live with the stress this puts on her finances.

"I can really identify with the mother," said one caller. "But she should talk to the school about cutting the tuition." Answer: She already has. The more than $10,000 that she pays is a discounted rate.

"It was sickening to see that she can't save on $54,000," said another. "She should call me for advice on how to do that."

"I am a 26 year old single mother, making an income of $34,000 with no child support or help, responsible for rent, bills, food, child care, and a car payment," wrote Denise Brown. "I work a full-time and part-time job, seven days a week, just to make ends meet. I could only dream of putting my child in a private school!"

And there was this, from Michael Saba, who offered to provide Strauss with complimentary dry cleaning at his small chain of stores. "As a businessman I am always reading about the economical crisis the world is in, and very often think to myself, if all the American businesses would all do one small thing for someone else we would all get through these tough times and still be standing with an even stronger business at the end."

Here's the story:
http://www.sun-sentinel.com/business/sfl-makeover-harriet-072009,0,477324.story

Here's her budget:
http://www.sun-sentinel.com/business/sfl-makeover-boxthree-071209,0,6584855.story

Here's how to get your own Money Makeover:
http://www.sun-sentinel.com/business/sfl-makeover-boxtwo-071209,0,7987518.story
--

> Discuss this entry

I warned you.

I have had such a problem with my credit card that I'm telling my story. On video.

Why not have a look...And then, maybe you can tell me yours.

> Discuss this entry

I hate my credit card.

But more on that later.

David Lazarus of the Los Angeles Times reports that JPMorgan Chase increased its monthly minimum payments to 5 percent, from 2 percent of the balance, for about 1 million cardholders.

Other shenanigans:

Fixed-rate cards are becoming variable-rate cards.

In May, a Federal Reserve survey showed that 65 percent of senior loan officers said they had lowered credit limits to their customers.

Average late fees can be as high as $38.50, Bankrate says

Most cards charge you if you want to pay by phone with a human being involved.

All this bad behavior is normal for some credit card issuers.

But others are prompted to act now before the new credit card reform legislation takes effect next February

Once again, consumers are the target.

Did they notice what's happening to consumer spending? Did they notice that credit card defaults are up?

Do they really want us to dislike their cards so much that we don't want to use them?

> Discuss this entry

Maybe my sense of humor is warped, but I'm cracking up over some of the lines in a new book, 1,001 Things They Won't Tell You, by Jonathan Dahl and the editors of Smart Money magazine. (Workman, $16.95)

We'll let you borrow more than you can afford -- from the college financial aid office.
We'll disconnect you in a heartbeat -- from the utility company
This bottled water is actually tap water - from the gourmet grocer
We're more secretive than the CIA - from the home insurer
Once you'll move in, you'll never see me again - from the home builder

It's hilarious, in a consumers-are-toast sort of way.

I learned something from each one of these statements. And the utility, by the way, will charge you a disconnect and a reconnect fee in addition to just cutting you off.

I'm not much into guides on how to spend money, but this one is good. The subtitle: An Insider's Guide to Spending, Saving, and Living Wisely.

Kudos to anyone who can make consumer battles amusing and turn them into something we can learn from.

> Discuss this entry

It's advantage UK, at least for investors.

Financial advisors in England and the rest of the United Kingdom won't be allowed to receive commissions when selling investments pension or life insurance products, starting in 2012.

The UK's Financial Services Authority, the industry regulator, came to this conclusion as part of its review of the British financial services industry, The Financial Times reported.

Investors will be given a choice: Choose to pay a fee or have the cost of financial advice deducted from m their investment." The amount the advisor receives will be negotiated with the investor.

Harold Evensky, of Evensky & Katz in Coral Gables, doesn't hold out much hope that the same standard will ever be adopted here. But he and a small group of well-known certified financial planners and advisors are trying. They're circulating a petition to get Congress to adopt a "fiduciary standard" for the financial services industry.

Their first demand is that the advisor "put the client's best interest first."

Another plain-language concept in their petition: "Do not mislead clients; provide conspicuous, full and fair disclosure of all important facts."

"It will probably be a while (i.e., never) before we catch up with the investor protection provided investors in the U.K.," Evensky said in an e-mail.

But there's a chance. Congress seems to be in the mood to consider it.

Advisors, it would seem, may be more interested in this idea than ever before. That's considering how much suspicion is circling around their profession, due to the Madoff scandal, trouble in financial products that seemed straightforward (think target-date funds) and generally lousy investment results.

> Discuss this entry

A lawsuit alleges the IBM employees credit union in South Florida caused its members to lose millions by steering them to investments in bonds from a now-bankrupt Georgia finance company that made loans to churches and faith-based organizations.

The claim, made in a lawsuit filed this week in federal district court in West Palm Beach, is against the 85,000-member IBM Southeast Employees Federal Credit Union, which is based in Boca Raton. It has $800 million in assets and 22 branches, according to the credit union's web site.

The suit says the credit union directed members to Wellstone Securities, a broker-dealer that has gone out of business, and that Wellstone recommended members buy bonds issued by Cornerstone Ministries Investments, which is now in liquidation and under investigation by George securities regulators.

"The credit union and its CEO Lary McCants deny the allegations and intend to vigorously defend themselves in court," said its attorney Michael D. Lozoff of Adorno & Yoss in Miami.

He said the suit is one of many where victims of fraud, bad judgment or the troubled economy seek to "recover their losses by imposing blame on the nearest deep pockets."

Three South Florida law firms -- Sallah & Cox in Boca Raton, Dimond, Kaplan & Rothstein in Miami, and Blum & Silver in Boca Raton - filed the suit on behallf of Claudie Schorrig, a retired IBM employee. The suit sees class-action status, for what the attorneys say are "hundreds of victims."

> Discuss this entry

Sorry, I have gotten behind on my blogging. I think I'll blame Bernie.

Here's what I've been writing for the newspaper this week. First, Wednesday's column about a dysfunctional Florida program that aims to help homebuyers but it doesn't have any money or procedures for people to use it. The story is here:
http://tr.im/qwO2

And the second is a screed filled with the the anger of South Floridians at Bernard Madoff. My story about his sentencing is here:
http://tr.im/qwPn

And the third was last Sunday's column, about term life insurance, where rates have been low for years, but premiums are going up soon.
http://tr.im/qwTO

> Discuss this entry

I'm always wary when someone says, "It's different this time."

But maybe it is.

The National Foundaiton for Credit Counseling says one-third of Americans think they'll never be able to afford a home.

Even more telling results from its recent poll: Almost half don't believe owning a home is a good way to build wealth.

What a change that would be from the basic message politicians and the tax code have been sending for years.

What could replace a home as a way to build wealth?

What do you think? Owning a home, does it make sense? Will it ever?

> Discuss this entry

Don't think too much about your retirement.

I know that's the opposite of what most financial advisors say. But I think most people's retirement plans work the other way, surviving on neglect. Which saves them in troubled times, when any pot of money might get raided.

Summertime is the time to set up your account and, well, here's the rest. My most recent commentary from The Nightly Business Report on PBS...

http://tr.im/p3Qf

> Discuss this entry

Florida’s recession is worse than anything this state has seen in more than a half century, when it comes to money in your pocket.

The Bureau of Economic Analysis said Thursday that Florida now has had three consecutive quarters -- a total of nine months -- in which the personal income of state residents has declined.

That hasn’t happened since the BEA began keeping records in 1948. Florida hasn’t even had two consecutive quarters of falling income until now.

Personal income is a measure of all the income to residents of the state. BEA said job losses, low interest rate payments and cuts in dividend income, plus direct pay cuts are to blame for the decline.

“Salaries have taken a drastic hit,” said Jorge Roca, a recruiter for Spherion in the Miami Office. He says it’s not uncommon to see a candidate in a sales position who was making $150,000 in salary plus commission now be offered a position that offers total compensation of $60,000 to $70,000.

The worst period for Floridians’ income in 61 years could have been even worse, had it not been for Social Security, unemployment and other so-called “transfer payments” that held steady.

“Those are very important in all the states because that’s really the only thing supporting personal income these days,” said BEA economist David Lenze.

Florida recorded a 0.9 percent fall in personal income in the first quarter of this year, compared to the fourth quarter of 2008.

The nation as a whole saw personal income fall 0.5 percent. In the fourth quarter, U.S. personal income fell 0.4 percent.

Florida’s first-quarter decline was larger than income cuts in all but seven states.

Expect more of the same for the remainder of this year, experts say. Roca, the recruiter, says the number of jobs to be filled has been growing, but pay levels remain depressed because employers have so many candidates to choose from in the ranks of the unemployed.

> Discuss this entry

Don’t know why so many people don’t seem to know this, but let me correct a misperception.

You may believe that if you sell your home in a short sale, you could be in for a big tax bill – as if getting out from under your old mortgage is the same as actually making some money.

That’s not true, at least when it comes to taxes.

There’s a two-year-old law that allows you to avoid federal income tax on forgiven mortgage debt, such as what you’d have in a short sale or a loan modification, under certain conditions.

The IRS says the Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude from your taxable income:

-Up to $2 million in mortgage debt

-If it’s forgiven between 2007 and 2012

-If the debt t is discharged due to a decline in the home’s value or the taxpayer’s financial condition

-If it was for your principal residence

It’s a break, for those in dire distress.

> Discuss this entry

President Obama’s financial reform proposal, what do you think?

I am all for the Consumer Financial Protection Agency in concept, but the list of what it might do seems weak. I want this board to have true power to shake down financial products and let consumers know what they are and what dangers they pose. From what I see, it looks like this board will primarily require mortgages to be simpler. Not enough consumer protection for me.

I do like that the Securities and Exchange Commission is told to hold stockbrokers to a fiduciary standard when they give advice. That means, brokers would have to put your interests ahead of their own. Right now, under SEC rules, brokers need only recommend something suitable for you. And who defines suitable? If two products are suitable, why not recommend the one that pays the higher commission? Suitability is squishy. A fiduciary standard is a much higher standard. I’d like to see it be the rule, for everyone who dispenses investment advice.

But then again, I come at this from a perspective of people making long-term plans to accomplish their own financial goals. I’m not the take-the-money-and-run type.

To read the Obama adminstration's proposal, go here:
http://www.treasury.gov/news/index1.html

> Discuss this entry

In case you didn't see it, my latest story, about modifying your mortgage....

If you know you’re headed for trouble with your mortgage or you already are there, brace yourself.

It’s a mess for borrowers trying to re-negotiate the terms of their mortgages right now. That’s despite a highly publicized, $75 billion, Obama Administration program that pays lenders to modify loans.

If you need to get a new deal on your mortgage – as millions of people do -- the best thing you can do is to arm yourself with information, about the problems you’ll face and what you can do to get around them.

“People are confused,” said Kevin Walker, president and chief executive officer of MortgageReport.com, a new website that helps borrowers learn if they’re e eligible for loan modifications. “Frankly lenders are still trying to figure out the procedures they’re supposed to follow to implement these programs.”

Not many loans are being modified under the Making Home Affordable program, which was announced in February.

By mid-May, the Treasury Dept. reported that the program had resulted in 55,000 loan modifications so far. Lenders can modify loans on their own, not using the program. Hope Now, an industry coalition that’s trying to combat the flood of foreclosures nationwide, said its members had independently modified 127,000 loans in April and made 143,000 new repayment plans, a record number.

But even those figures combined are a drop in the bucket against the Obama program’s stated goal of helping up to 9 million homeowners refinance or modify their loans.

Nothing has turned back the tidal wave of foreclosures sweeping Florida and the nation. Between January and the end of May, the Center for Responsible Lending estimates that 1 million new foreclosures were filed nationwide. Moody’s Economy.com expects 1.54 million new foreclosures this year, on top of 1.44 million foreclosures last year.

Still, the program is new and some lenders appear to be still kicking its tires.

In South Florida, Allen Robinson, managing partner of First Trust Mortgage Corp., said lenders don’t seem interested in drastically altering mortgages. They aren’t reducing the principal owed, he said, but are cutting rates or extending terms.

And there’s the problem of loan servicers handling a flood of applications. Jessica Cecere of the Consumer Credit Counseling Service of Palm Beach said she thinks fewer than 2 percent of loans are being modified.

“We haven’t necessarily seen a lot of denials, just not a lot of answers,” she said.
Lenders say they’re trying to keep up with the demand, but the number of troubled borrowers is huge and still growing. In April, almost 3 million home loans nationwide were 60 days or more delinquent, according to the Hope Now alliance.

“The pipeline of people requesting loan modifications has grown tremendously since March,” said JP Morgan Chase spokeswoman Nancy Norris.

Lenders and services are making some efforts to meet the demand.

Chase has opened five offices in Florida devoted only to loan modifications, including one in Aventura and one in Miami. Norris said Chase can modify loans from Chase, Washington Mutual and a small lender named EMC. Those loan offices are open evenings and weekends.
Wells Fargo, which owns Wachovia, has put details of the program on a special website devoted to mortgages, www.wellsfargo.com/homeassist.

What can you do if you need to rework your mortgage loan? Here’s some advice:

Get informed

This is easier than you think. Start off at www.makinghomeaffordable.gov, the official Treasury Department web site for the program.

You’ll find such details as you can refinance your loan using the program if you are current on your payments, but if you’ve fallen behind, you’ll need to seek a loan modification.

The site points out that loans that are “underwater” – where the value of the home is less than the current mortgage – can qualify, for loans that are up to 105 percent of the home’s current value. Moody’s Economy.com estimates that up to 15.9 percent of all home loans are “underwater” to some degree this year.

Seriously underwater loans – those where the home’s value has dropped more than 20 to 25 percent – won’t qualify.

Lenders will be given financial incentives to modify loans.

The Treasury says it will share the lender or servicer’s cost of reducing payments to some borrowers, plus it will pay up-front fees of $1,000 for each loan modification and up to $3,000 for
three years for successful modifications

Borrowers have the potential to gain, too. The Treasury can make payments in loan modifications that would reduce the principal owed by up to $5,000 for borrowers who make timely payments for the first five years.

Get Help

Some web sites will show you the terms of the loan modification program and figure out whether you qualify.

One is MortgageReport.com, which comes from the same firm that created SimpleTuition.com, a student loan comparison tool. MortgageReport.com gives borrowers a “diagnosis” for their loans. There is no charge to borrowers, who input their loan amounts and other debts. But users who do qualify for a modification will be provided with a list of lenders. Borrowers can then decide whether to send on their own information.

Another site has the advantage of providing borrowers with a free credit score. Fair Isaac, the company that produces the FICO credit score that is commonly used for mortgages, launched Mortgage ReliefOnline.com in April. The site, which is also free to users, allows you to see if you qualify and then refers you to mortgage counselors

You can also get help the old fashioned way -- by talking to someone.

You can find thousands of U.S. Department of Housing and Urban Development-trained counselors by calling the local consumer credit counseling service or through the federal Hope Now program, 888-995-Hope (4673).

Get your documents together

“Be prepared,” said Dale Vermillion, a mortgage industry consultant and author of Navigating the Mortgage Maze. “Have your credit report available and know your credit score.”
Expect to be asked for copies of recent tax returns or pay stubs, information on your loan and any other loans, including a car loan, student loans and personal debts.

Don’t give up

“The first three or four people (you speak to) don’t have any power at all,” said Ryan Smart, vice president of RightTrack Financial Services, a Delray Beach firm that negotiates loan modifications. “The whole system exists to keep people away. They give you “negotiators” who have no power to negotiate the loans.”
Keep going until you get to someone who does have the power to change your loan.

> Discuss this entry

Students, burdened with big college loans, will be very glad to see June end.

Because starting July 1, there’s a new repayment option on federal student loans that will allow some borrowers to reduce their monthly payments.

According to the Project on Student Debt, the new income-based repayment option pegs what you must pay to income and family size – and cuts debts for those in the lower-income brackets.

“For example, a single person earning $30,000 a year with $30,000 in debt could cut her or his standard monthly payment amount in half. All federal loans made to students are eligible for this program, regardless of when they were taken out, from which lender, whether for graduate or undergraduate study," the Project’s web site reports.

The new provision is part of a 2007 law that will be effective next month.

Another part of that law, already in place, wipes out student debt for many borrowers who have full-time careers in public service and who have been repaying the loan for 10 years.

The public service professions that qualify include: military service, public safety and law enforcement, public health, social work, librarians, college faculty and public defenders.

Debts to those borrowers, when they are wiped out, won’t be taxable, FinAid.org says.

Unfortunately, the income-based repayment option is only available for direct federal student loans, not for the federal student loans made to parents and for private student loans.

You can find more details at:

http://projectonstudentdebt.org/july1-2009.vp.html

and at:
http://www.finaid.org/loans/ibr.phtml

> Discuss this entry

The way I read it, the Obama administration is indeed cracking down on executive pay, but only on the companies or banks that have received TARP money. Those folks can only receive a bonus of up to one-third of their salaries.

But for the rest of the public corporations, the administration is planning to introduce a bill allowing a non-binding shareholder vote on compensation.

So, there’s not much there, is there? Nonbinding votes, saying please don’t hand out millions in bonuses, sent to compensation committees that hand out millions in bonuses?

I don’t think this pay debate will ever go anywhere. Big bonuses will go on.

What do you think?

> Discuss this entry

Got an extra $100,000?

You may need it in retirement to cover health care costs.

Today, the Employee Benefit Research Institute put out some numbers on that pricetag, which many people overlook when planning their retirement.

For a man, retiring in 2009 at age 65, EBRI’s low estimate is between $68,000 and $173,000, depending upon his health needs. For a woman, same situation, the number is $98,000 to $242,000 (they live longer).

If you (or your friends or relatives) are age 55 now and will retire in ten years at 65, the estimates are higher. EBRI projects the savings a man will need will be between $114,000 to $634,000 and a woman, $164,000 to $754,000.

As any senior will tell you, Medicare (for which seniors pay premiums) takes up the bulk of the costs, but all those out-of-pocket expenses for supplemental insurance, co pays and prescriptions add up.

You might think you’ll just ignore this if you’re working and retirement is a distant goal, or even something you think you’ll never reach.

Well, this matters to working people, too. EBRI notes that the main Medicare trust fund is heading toward insolvency in 2017. To address than, one proposal is to raise the payroll taxes workers and their employers together pay to support this fund, from 2.9 percent to 6.78 percent.

And that would make it more difficult to save for your own health care trust fund for retirement.

> Discuss this entry

I'm back from vacation and....

Ready to hear what you think. The issue at hand: The SEC charged Andrew Mozilo and other former high-ranking Countrywide Financial executives with fraud.

What exactly is the alleged fraud? Making subprime loans with a wink and a nod and no attention to what would happen to the borrowers in the end? Not somehow mentioning how loose the lending standards had become? Making so many shaky loans that eventually credit markets blew up? Giving false hope to those who should never have been homeowners? Leaving neighborhoods riddled with foreclosures?

Yes, a list of frauds. Do you have one to add?

All this wasn't exlcusive to Countrywide, of course. And courts will sort it out.

Meanwhile, if you’re interested in catching my next speech about personal finance, it’s at noon tomorrow.

Join me at the Hollywood Chamber of Commerce’s Women Owners, Managers, Executives Network luncheon. .

It’s at Memorial Hospital South, 3600 Washington St., Hollywood. Tickets are $20 for members, $30 for non-members and $40 at the door. 954-923-4000 or www.hollywoodchamber.org.

> Discuss this entry

In case you missed it, here's my column from Sunday:

http://www.sun-sentinel.com/business/yourmoney/sfl-sfl-harriet-bank-safety-0531sbmay31,0,41551.column

Don't know why the subject of FDIC insurance brings up so many questions and calls and confusion. But it does.

So, here is a simple, easy to understand fact sheet, for those who want more:

http://www.fdic.gov/deposit/deposits/DIfactsheet.html

I'll be away the rest of this week, celebrating a few graduations. I'll be posting again next week.

> Discuss this entry

My idea of a personal finance stress test seems to be taking hold.

The concept is to compare your situation now against the worst possible case – a major

illness, a cut in pay, the loss of your job.

That would give you a sense of where you need to get to work – save more, reduce your risks or set up emergency lines of credit, for example.

In my column, I’ve suggested some questions you should ask yourself.

Here are a few other ideas from a reader who calls herself Catwoman. If you have some questions for a personal finance stress test, I’d love to hear ‘em.

She says to ask yourself:

5. How many other people are relying on your income? If you die, do you have a plan in place for those people?

Here are the four most important question I'd ask -- and the answers:
http://blogs.trb.com/business/columnists/brackey/blog/2009/05/could_your_finances_pass_a_str.html:

Here's my column on a personal finance stress test:
http://www.sun-sentinel.com/features/time-money/money/sfl-harriet-money-051709,0,1621410.column
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> Discuss this entry

My favorite part of the credit card legislation passed by the Senate yesterday: If the bill is due on a Sunday or a holiday, no more late fees because your payment arrives the next day.

My last credit card payment was due on both. A Sunday and a holiday. Easter Sunday.

I was mailing it close to the due date and that's when I realized it was impossible to get this bill paid on time. I then took out my old bills. The previous month, the due date was also a Sunday.

So of course I was late. More on that story later.

Here's a sense of how hard it was to get credit card reform moving into law.

“I’ve been in Washington twenty years. For the first 19 we couldn’t even get a committee vote on credit card reform," Ed Mierzwinski, consumer program director of U.S. Public Interest Research Group, said in an email.

I'll write more about the details after this legislation goes back through the House. It looks like it has plenty of good news for consumers.

> Discuss this entry

Consumer prices in South Florida fell by the largest amount in 31 years in April.

Inflation declined at a 0.3 percent annual rate in the Miami-Fort Lauderdale metro area for the year ending in April the Bureau of Labor Statistics reported Friday. The decline was the largest ever in the history of the local consumer price index, which was first released in November, 1978.

The only other time prices in South Florida went down, the BLS said, was in 1986, at an annual rate of 0.1 percent.

Nationwide, consumer prices were essentially flat in April. Over the last year, the consumer price index has fallen 0.7 percent, the largest one-year decline since June, 1957. Nationwide, the annual inflation rate has been negative for two consecutive months, the first such trend since the 1950s.

Inflation essentially has disappeared from South Florida’s economy, in contrast to last year, when prices were growing at annual rates of 4.9 percent to 5.8 percent. South Florida’s annual inflation rate’s recent peak was a 6.1 percent at the start of 2006.

Driving prices down were declining gasoline prices. “Transportation costs, year-over-year, fell by 12.2 percent,” said BLS Economist Stephen Rondone.

But not all prices went down. The category of “other goods and services” in Miami was up 5 percent, primarily because of rising tobacco prices and the cost of other personal care products and services.

Other cities saw even greater declines in consumer prices. The BLS said its measure of inflation fell 3.5 percent on an annual basis in Atlanta, 2.2 percent in Chicago and 1.3 percent in Los Angeles.

The BLS reports a national inflation figure every month. Six times a year, it reports a local figure for the Miami metro area and nine other major cities. The BLS does not measure consumer prices in Palm Beach County.

> Discuss this entry

Four questions for your Personal Finance Stress Test

Ask yourself:

Ignoring your mortgage for the moment, does more than 10 percent of your monthly take home pay go to debt payments – credit cards, home equity loans, student loans?

If it does, that’s high. Work to reduce it.

Now add you mortgage payment to that debt payment. Is the total more than 36 percent of your take-home pay?

That’s when the bells begin to go off. If you have stretched above that number a bit, because your income isn't all that great and home prices are high, your goal should be to get back down below that limit.

If you lost your job, how many months would you be able to live off your savings?

If you answer is, why didn’t you say weeks, this is an issue. Your goal should be to build up an emergency fund that would cover at least three months’ worth of expenses. Or more.

If your pay is cut by 10 percent or if you were forced to go on unpaid leave for a short time, would you still be able to cover your monthly bills?

If you answer is no, then it is clear you are not living on less than you make. And the people who win the savings game do. No matter what your income is, you should not be spending it all.

Do you have some questions of your own you think would fit on this list? Send them to me.

I'm writing a column about everyone doing a stress test on their own balance sheets. Should be interesting.

> Discuss this entry

Four questions for your Personal Finance Stress Test

Ask yourself:

Ignoring your mortgage for the moment, does more than 10 percent of your monthly take home pay go to debt payments – credit cards, home equity loans, student loans?

Now add you mortgage payment to that debt payment. Is the total more than 36 percent of your take-home pay?

If you lost your job, how many months would you be able to live off your savings?

If your pay is cut by 10 percent or if you were forced to go on unpaid leave for a short time, would you still be able to cover your monthly bills?

Tomorrow: I'll answer the questions.

Tell me how you do on this test.

And send me your suggestions for other questions. I'm writing a column about everyone doing a stress test on their own finances Should be interesting.

> Discuss this entry

Another piece of good news:
Consumers borrowing dropped in March, by the largest amount in 18 years.

Are we getting smart or what? No longer adding to our debt, but actually paying it down?

The Federal Reserve report on consumer credit showed that the amount of debt on credit cards dropped 6.8 percent in March, after falling 12.1 percent in February.

Menwhiile, a survey from Mintel, a market research firm, said more than two in five adults say they're using debit cards more offten and credit cards less. They're spending money they actually have..

Wow.

I think spending is beginning to come back, but I hope it will do so slowly, on a more solid foundation than borrowing.

.

> Discuss this entry

Here's something I don't like:

I hear that rates for term life insurance policies at some major carriers are rising.

Term life nsurance has been one of the best bargains around for years. I hope this isn't a major turnaround.

Anybody out there shopping for life insurance and wants to share the experience with me? I plan on writing about it soon.

> Discuss this entry

Good news of the day:

A group of important economists said this morning that the recession is starting to slack off. The National Association for Business Economic survey, which has been going on since 1982, showed the lowest ever reading for industry demand and capital spending four months ago. Now, the indicators are looking better. Not falling at the same rate. Maybe getting down to the bottom of the V in this economic free-fall.

Other good news: The Obama administration, which must be filled with crisis junkies, has found a new disaster it needs to fix: Credit card abuses. Hurray! This one is never going to be resolved by the private sector or by new Fed rules that don’t go into effect until next year. Let’s get going. Consumers need credit cards that work with them. And banks need consumers to be able to pay these debts.

What particular aspect of your credit card bugs you the most? Tell me. Let's make a list of worst business practices. Things cards should never do.

> Discuss this entry

Paycheck news: f you’re feeling a bit more flush, let me explain why.

In the first three months of this year, the median weekly earnings of the 100.4 million still-employed full-time workers around the nation went up. The increase was no great shakes. Just a 2.6 percent rise over the year before, said the Bureau of Labor Statistics Thursday.

But, that came at a time when there was no inflation. None. So workers got a real 2.6 percent increase in pay.

The trend has been going on for six months. In the final quarter of last year, wages rose 4 percent, while inflation was up just 1.6 percent. Workers' real pay rose 2.4 percent.

This is a reversal of recent history, in which paychecks were losing ground. Because as wages went up, inflation went up faster. For example, in the third quarter of 2008, wages went up 3.6 percent but inflation rose 5.3 percent, so real wages fell by 1.7 percent.

That meant you and your paycheck had less purchasing power. More money didn’t add up to much at all. It left the impression that there’s never enough.

With low to no inflation, any perk up in pay is feels good. And it makes a difference in your well-being.

> Discuss this entry

Did you notice a little bump in your paycheck?

Anyone who is part of a double-income couple better watch his or her paycheck closely. This boost now may cost you next April 15

Here's why: Employers started using a new withholding table by April 1. In one of many recent tax law changes, Congress decided to give wage earners an up-to-$400 per person cut in payroll taxes. The plan was to get this money into workers' hands quickly and out into the economy. Rather than wage earners waiting until next year to file their taxes and get the benefit of this tax cut, the plan was to take less out of paychecks starting now.

But, the new withholding tables in some cases cut too much. If that happens to you, you'll have to pay it back next year.

The tax and accounting business of Thomson Reuters looked at the new tables and found that for a husband and wife who both work and who each earn $75,000, the new tables might mean a cut of $1,228 cut in payroll taxes. But their maximum new tax credit is only $800. So next year, they'd have to pay the extra $428 back.

Thomson Reuters says others who might have too little tax withheld include people who work two jobs, people who receive taxable pension payments and teens or others who are claimed as dependents on parents’ or others’ tax returns.

What to do?

If you think you don't have the right amount of tax withheld, look at IRS Publication 919, How Do I Adjust My Tax Withholding, says CCH, a Wolters Kluwer business and a provider of tax, accounting and audit information.

This new tax break isn't available to everyone. It begins to phase out for those whose adjusted gross incomes are more than $75,000 for singles and $150,000 for married couples filing joint returns.

> Discuss this entry

When you're paying, you know how much you're paying, right?

No.

And when it comes to credit cards, when something goes wrong, like a late payment, would you know how long that will hurt your credit?

Nope.

A survey out from TrueCredit.com, a unit of TransUnion, says we're really not well informed at all.

The poll by Zogby International was an online survey of 2,557 adults taken earlier this month. It showed:

Most people have no idea what's a normal interest rate on a credit card. Fully 84% said they don't know the current average interest rate on a credit card. It's 13.6 percent, Bankrate.com reports.

More than half (or 54%) don't know how long a late payment will remain on their credit report. The answer is seven years.

Oh, and, 90 percent believe a credit score is included on a credit report. It isn't. Generally, you have to pay to get it in a separate report, while you can get a credit report for free once a year.

Dismal as the report is, it's a giant flashing arrow to the lesson of the day: Get your credit card facts straight. A little bit of knowledge will help you select the best deal out there.

> Discuss this entry

Are your dreams of retirement gone?
No. No. Don't let that happen.

You can get there. The question is, when you do, will you Sink or Swim? That's what my friend Frank Armstrong III asks in his new book, The Retirement Challenge (FT Press) that he's written with securities attorney Jason Doss.

Frank, a certified financial planner and investment manager, and Doss, who represents clients who have disputes with the financial services industry, have put together a plain-spoken guide that respects your basic intelligence about your own money.

They give you the facts to support your own decision-making. But when a choice is a bad one, they say so.

I first got to know Frank because a long time ago he published a very good investment book online, for free, that anyone could download. "My marketing technique was to supply lots of useful information to the masses. It worked," he says in a new release. He manages more than $400 million.

He's honest, he's straightforward like a former fighter pilot would tend to be and he makes sense.

An example from the book is their discussion of whether to pay off a home mortgage in retirement. Lots of people want to do this. Frank then discloses that if you were his client, you'd be withdrawing your money from his firm's accounts and therefore he'd earn a smaller fee for managing it. So his financial incentive would be to say no, don't take the money.

But he lays out the pros and cons for you to choose. "The answer to whether you should pay off the mortgage depends on how comfortable you are with financial leverage and how much leverage you are willing and financially able to bear."

Credit card debt? Get rid of if Annuities inside an IRA? No. If you're living paycheck-to-paycheck before retirement, don't take a lump sum distribution for your pension.

Good, solid stuff. Excellent book.

The only thing I don’t like about this volume is its online companion web-stie, which comes across as gimmicky. Every web user has preferences and this site to me isn’t as easy to use as it should be.

> Discuss this entry

It's hard enough to understand this financial crisis, much less get a picture of it in your head.

But some folks have tried. Good magazine sponsored a contest asking people to d describe how our financial system managed to blow up. Take a look at some of their graphics here:

> Discuss this entry

President Barack Obama seems to be comfortable telling Americans how to handle their personal finances. A while back, didn't he say it was a good time to buy stocks? And today, he says it's a good time to refinance your mortgage.

This in from AP: "Speaking at the White House, Obama on Thursday emphasized that that average rates on 30-year fixed-rate mortgages have dropped to 4.78 percent. That is the lowest rate on record.

Said the president: "People can really take advantage of this."

(Note to the Chief: When Freddie Mac later on announed the weekly average, it had popped upt o 4.87 [ercemt.)

It's still good rate and it might even go lower in weeks to come.

This chance to grab low rates may not come back around again for a while. At least, while our Financial Advisor-in-Chief is in office.

I wrote about the rush to refinance two weeks ago. You can have a look at my story here:
http://www.sun-sentinel.com/features/home/sfl-flzrefi0328sbmar28,0,8300.story

> Discuss this entry

Oh good grief. The number of home mortgages that are at least 90-days in arrears practically doubled in February compared to the year before in the Miami-Miami Beach-Kendall area. If it's that bad down there, you know it's probably that bad or near as bad in the rest of South Florida. That's according to a survey from First American CoreLogic in a survey released Tuesday.

Also released Tuesday, in the last year, home prices in the Miami metro area fell by 29.4 percent, according to the S&P/Case Shiller Home Price Index.

Hey, like maybe you want to surprise us?

The drumbeat of bad, bad, more bad news is there, but there are faint sounds that some people are actually buying houses. Stuart Miller, head of Lennar, said it Tuesday. People have to live somewhere.

Should we give people more tax breaks for buying? Find a way to funnel them cash?

Is it irresponsible to walk away from a home that's worth less than the mortgage?

What should we do to solve the housing crisis? Put your ideas down in writing and let me know....

.Here are some other posts on this topic. Keep the conversation going.

http://blogs.trb.com/business/columnists/brackey/blog/2009/03/housing_crisis_tell_me_your_so.html

http://blogs.trb.com/business/columnists/brackey/blog/2009/03/solve_the_housing_crisis_chang_1.html

> Discuss this entry

One of the ideas for solving this real estate crisis is to force banks to get real. To lower the amount of many home mortgages.

And how? Attorney Jeffrey Tromberg of the Florida Debt Relief Center in Fort Lauderdale wants to see the bankruptcy law changed. So that judges can force banks to lower the mortgage loan amount.

They can't do that now. Bankruptcy judges can force a change in the mortgage on a vacation home. But the judge can't do anything about the mortgage on a primary residence.

The lenders pretend this "loss" hasn't happened. But South Florida home prices are down, on average, by 45 percent from the 2005 peak. If you borrowed back then, your home is not nearly worth what you paid for it.

"Would someone who bought a stock at $100 and reads the papers today seeing the stock is now at $40 pretend that he still has a $100 asset?" Tromberg asked.

The $60 is gone, whether the investor sells the stock or not.

The Obama administration favors the idea of changing the bankruptcy law, too.

Guess who doesn't like it?

Banks and mortgage lenders.

So tell me what you think? Should banks be forced to lower loan amounts -- to reflect the real value of home mortgages?

> Discuss this entry

What do you think would solve the real estate crisis? That's something i will be talking about on television next month and I'd like to hear your ideas.

I think low mortgage interest rates, now the lowest in almost 60 years, might get things started.
Here's what I wrote about that today:

http://www.sun-sentinel.com/features/home/sfl-flzrefi0328sbmar28,0,8300.story

> Discuss this entry

This just in, from the self-regulatory organization that polices stock brokers...

"Washington, DC — The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Morgan Stanley & Co. $3 million — and ordered it to pay more than $4.2 million in restitution to 90 Rochester, NY-area retirees — to resolve charges that its supervisory system failed to detect and prevent brokers from persuading Eastman Kodak Company and Xerox Corporation employees to take early retirement based upon unrealistic promises of consistently high investment returns and by espousing unsuitable investment strategies."

Which leads me to remember...

Financial Self-Protection Rule Number 67854098&%@#:

Don't take retirement advice from someone who wants to get his hands on your retirement money.

> Discuss this entry

Here’s why I don’t like to write about fraud:

It’s always the same story over and over again.

Somebody with bad intent swindles an investor because the investor didn’t look into the person, the brokerage or the investment. The investor trusted. Asked no others for advice. Didn’t check the background. Assumed because the person was on the radio or in his church that it was all good. Never heard a negative word about the person.

Second reason I don’t like to write about fraud: There’s too much of it. It could be all I ever write about.

Last week, an official with the Securities and Exchange Commission said the SEC has “dozens” of investigations underway, looking for fraud in hedge funds, in derivatives, in mortgages, in homebuilders.

Fraud surrounds us, especially in South Florida, where daily, it seems, court cases and law enforcement officials have a growing, never-ending stream of cases.

Each one is important.

And that’s why, even though I don’t like it, I write fraud stories anyway.
.

> Discuss this entry

Should you refinance your mortgage to take advantage of falling interest rates?
Here are some answers on interest rates and getting a new mortgage.

How low will mortgage interest rates go?

Lots of people are talking about 4 percent, down from today’s 4.98 percent average.
I hope the market will not get locked up, as buyers insist on not refinancing their mortgages until rates fall to 4 percent.

How quickly should you try to grab a better rate?

At least one mortgage broker tells me that the drop will be very swift and short, meaning homeowners should refinance as quickly as possible. But you have to note that the last time the Treasury started buying up bonds, rates fell sharply at first, but drifted downard for more than a month afterward.

Will you qualify?

You can, for up to 105 percent of your home’s current value, under Treasury Department guidelins.

Can you get the deal done?

Mortgage companies and banks have cut and cut staff in the last year and a half. They are at bare bones staffing levels, I’ve heard.
And yet I saw that applications to refinance loans surged 21 percent last week.
So it may not be easy to put in your application, because there may not be enough workers there to handle it.

If you are refinancing, tell me how it's going. I'm working on a story about it and I'd like to chat.

> Discuss this entry

Need help with your taxes?

Internal Revenue Service offices in Miami, Plantation and West Palm Beach will be open to offer help this weekend. For free.

Dozens of volunteer tax assistance sites will also be working Saturday. For a list of Florida volunteer tax program sites and their hours this weekend, click here;

http://www.irs.gov/individuals/article/0,,id=204543,00.html

The IRS will prepare tax returns, for free, for those whose income is $42,000 or less.

Employees will also answer questions and offer advice to those who are having trouble paying their taxes due to the downturn in the economy.

IRS offices normally don’t have weekend hours.

But on Saturday, the South Florida IRS offices that are open from 9 a.m. until 2 p.m. are:

7850 SW 6th Court, Plantation
1700 Palm Beach Lakes Blvd., West Palm Beach
51 SW First Ave., Miami

(Beyond South Florida, the other Florida offices open Saturday are:
2891 Center Pointe Drive, Fort Myers
400 West Bay St., Jacksonville
7410 S. US 1, Port St. Lucie
9450 Koger Blvd, Saint Petersburg
5971 Cattle Ridge Blvd., Sarasota
3848 W. Columbus Drive, Tampa)

> Discuss this entry

The Mortgage Bankers Association reported yesterday that nearly 60 percent of the sub prime loans in Florida in the fourth quarter of 2008 were delinquent or at the start of foreclosure.

Okay, that's it for the even-handed journalist tone.

Six out of ten loans gone bad? And whose fault is that?

I mean, six out of ten Floridians are not unemployed.

So, if they have jobs, what is wrong?

Is it, perhaps, the loans? Or the lenders who made them?

If, six times out of ten, we tried to make a telephone call but the system could not connect, would we accept it? If the lights didn't go on six times out of each ten that we flipped the switch, would we all say, that's not the electric company's fault?

No. We'd grab those companies and say you're part of our structure. We cannot be a civilized developed country unless this works right, unless there's power and telecommunications.

And we can't function with lenders who do not know how to lend.

If I were a banker or a lender, I'd be standing on top of a hill calling for regulating the whole lot of 'em in the mortgage industry. Hey everybody, here are the new rules and we all play by them.

You want to lend to speculators? Go ahead. But charge a high price because you're taking a high risk.

But you don't wreck our system by paying big commissions to someone who can push a loan on to a borrower you know won't be able to repay.

This is a dream but, Could we perhaps find out who made each of those delinquent loans and send them out to cut the weeds down around the house and to bring the full force of the lending institution into a discussion about what can be done at this point? I mean, they talked to them when they made the loan. They can't talk now, when the loan went bad?

Could we go trailing after the bank and lending executives and their bonuses over the last six years and ask them to pay the money back, to stabilize the system today?

Six out of ten loans gone bad? That's the borrowers' fault?

Apparently 22 percent of loans made in Florida are sub prime, more than the national average. And far more have gone bad here than in the rest of the nation.

That's not the sign of a sick industry?

Or, maybe not. Maybe these lenders are amazing good at pinpointing the deadbeats and turning them all into homeowners.

If they're so good at that, it should be cinch to recognize someone who will pay back a loan because they promised to.

Nationalize the banks? Nope. I don't want to own them.

But regulate them. Or what's left of them.

> Discuss this entry

If the government buys into Citicorp, should you?

Sounds like a solid idea.

In concept, what could feel more secure these days? The government picks the winner, backs it up with cash, and probably will be there for a long time to watch over its investment.

And it came in when the price was so low, too. Not too bad.

I don't like the idea, mind you, that we're in this terrible economic situation, where our huge financial institutions are teetering and in need of help.

I don't want to start speculating on who is next, because the list of banks in trouble is very long. Banks everywhere are weak.

The terms aren't entirely clear, as to what will eventually be there for shareholders. And of course, nobody should make a single bet. Any stock you buy should be in the context of a diversified portfolio.

But if it's time to start placing bets on who will be here ten years from now, then my list would begin with any bank the government buys into.

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