Fewer Americans believe homeownership and real estate are worthy investments. Photo Credit: Infrogmation/Wikimedia Commons/CC-BY

Americans are becoming less convinced that getting mortgage loans to buy real estate is a good idea. A recent survey found that the number of people who believe owning a home is a worthy investment has dwindled to the lowest level in years. Home sales have been sluggish to recover from the housing crash.

Fewer see homeownership as good investment

American real estate has been shaken to its core during the past few years. One of the side effects has been that fewer people believe homeownership is something to aspire to and that owning a home is not as good an investment as once thought, according to Reuters. Mortgage investment house Fannie Mae performs a quarterly survey on attitudes about home ownership, called the National Housing Quarterly Survey, which found that 64 percent of respondents believed that the tradition of going to a bank or loan company to get a loan and buy a house was a good investment. That marked a declined from early 2010, when 70 percent of respondents thought so. In 2003, the figure was 83 percent.

More people turning to rentals

As fewer are buying houses, more are going with paying landlords instant cash through renting. The percentage of vacant rental units declined over the fourth quarter of 2010 to 9.4 percent from 10.3 percent in the summer of 2010. That is the lowest percentage of available rental units since 2007. The same survey from Fannie Mae found that nearly 75 percent of respondents said they thought it would be harder to get a mortgage from a loan lender than to  rent.

Home sales fall

New home sales plunged over the month of January 2011, according to CNN. Some areas where prices are dropping are able to sell more inventory, but areas like Arizona and other places with highly inflated prices have difficulty liquidating housing inventory. However, after stops and starts over the fall, new home sales fell 11.2 percent over January 2011, marking an 18.2 percent reduction between January 2010 and January 2011. The housing market is down more than 80 percent overall from a peak point in 2005.

Sources

Reuters

CNN

Home sales have been increasing, but home values are declining. Image from Wikimedia Commons.

Nationwide home prices are declining, but home sales are beginning to rise. The past year has been volatile for real estate, but more people have been consulting with loan lenders to purchase a home. The low prices are thought to be the reason for the spike in purchases.

Wealthy and investors buying houses again

Figures for nationwide home sales from the National Association of Realtors indicate that an increasing number of people are purchasing homes, according to CNN. Home sales rose 2.7 percent over January 2011, to a seasonally adjusted rate of 5.36 million per year. The increase is also a 5.3 percent improvement over January 2010, marking the first time in seven months that home sales have been higher than figures from a year ago. However, the increase may be bolstered by people who don’t need to go to loan lenders to finance a home purchase. The number of cash purchases was 32 percent of all sales, up from 26 percent in January 2010. Sales to investors made up 23 percent of sales, which accounted for 17 percent of home sales in January 2010.

Foreclosures may have made up difference

The increased number of cash and investor purchases likely is due to deep discounts available on foreclosed properties. Distressed properties, according to Bloomberg, accounted for 37 percent of January 2011 home sales. More homes are available at rock bottom prices, and many a loan company is anxious to get a home off its balance sheet. There aren’t many people who have enough instant cash to pay for a home out of pocket, even one sold at half its value. The median home price has declined 3 percent since January 2010, to $158,800.

Home prices dropping

Many major metropolitan areas are still experiencing declining home values, according to USA Today. The Standard & Poor’s Case Shiller Index recorded drops in all but one of the 20 major cities it tracks. Only Washington D.C. did not see home prices decline. Areas with inflated real estate values such as Arizona, California and Florida have experienced the worst in decline, but southern states like Mississippi and Alabama are also experiencing price declines. The rise in sales may signal reversing demand, and many economists believe 2011 will be a year of dramatic recovery.

Sources

CNN

Bloomberg

USA Today

Experian is adding renters history to its formula for credit scores, which is good news for many people. Image from Wikimedia Commons.

Credit score bureau Experian is now including renter history in its formula for adding up credit scores. Previously, only negative marks on a renter’s history, like evictions from non-payment, were added. Now positive marks will be added.

Pay the rent on time and do some credit repair

Credit bureaus typically do not factor renter’s history when calculating credit scores, except when things go horribly wrong. Paying rent on time doesn’t get noticed by credit agencies even if “the rent is too damn high” as Jimmy McMillan astutely observed. However, eviction for financial reasons is reported. The credit bureau Experian is going to start adding rental activity to its score formula, according to CNN. That will include rent payments, whereas only mortgage payments were previously included in calculating a credit score. Now a person only needs to pay rent on time to do a little credit repair.

Participation unfortunately limited

Rental history being reported to credit bureaus would be fantastic for many people, as it would mean a positive history is established before trying to get a loan for a home or a car. However, participation is going to be limited for some time. Experian’s RentBureau unit is only getting reports from 45 rental property management companies and info on  eight million renters so far. Unfortunately, college students from Arizona to Alabama and beyond might not be improving their scores by being responsible. Those interested to know should contact their landlords to find out if they report to Experian or request a credit report from Experian.

New rules for credit scores

Credit bureaus have new rules to abide by because of the Dodd Frank Act and the Fair Credit Reporting Act, which alter the rules for credit disclosure, according to the Wall Street Journal. A person applying for an installment loan has the right to know what their credit score is. However, the laws don’t mandate that loan lenders disclose which credit bureau’s score was used. However, one free annual credit report from Experian, Equifax and TransUnion can be requested through AnnualCreditReport.com.

Sources

CNN

Wall Street Journal

Payday lenders are having to turn to Indian tribes to form partnerships that can keep their businesses open. Photo: Chika/Flickr.com/CC-BY

In order to circumvent state regulations, payday lenders are turning to Indian tribes to stay in business. Indian tribes are protected legally by a doctrine known as sovereign immunity, which exempts them from some state and federal laws. Demand is well established for payday loans, but states are starting to regulate them out of business.

Stifling regulation sends payday lenders to tribes for legal shelter

Payday lenders have been subject to an increasing amount of regulation, to the point it is difficult for operators to keep their doors open. Some lenders are beginning to form business partnerships with Indian tribes in order to circumvent strict regulation that prevent lenders from being able to make a living in the payday loans industry, according to the Wall Street Journal. Indian tribes are protected by a legal doctrine called sovereign immunity, which grants certain exemptions from regulation and lawsuits. Payday loan lenders need only incorporate their business on tribal lands and form an agreement with the tribe in order to offer a cash advance in whatever manner the firm sees fit.

Sovereign immunity

Essentially,  an entity with the protection of sovereign immunity is protected from prosecution or lawsuit, but the extent of immunity varies. Native American tribes and reservations are considered nations unto themselves, and businesses incorporated on tribal lands are not subjected to the laws of the state or states the reservation is located in. For instance, say a short term loan lender incorporates on a reservation located in Arizona but doesn’t have offices on the reservation. Even though the loan company is not located on a reservation, it is incorporated on tribal land. Sovereign immunity exempts the company from having to comply with Arizona law regarding small loans.

The scourge of payday loans

Payday loans are treated like a leper by some within the financial services industry. Even though the demand for the services is well established and similar businesses existed before the Statue of Liberty was built, many have called for the industry to be legislated out of existence. Payday lending as an industry represents more than $10 billion in the U.S. economy as a whole.

Sources

Wall Street Journal

Up to 27 percent of homeowners could be under water on their mortgages. Image from Wikimedia Commons.

It is estimated that a record number of people are now under water on their mortgages because of falling home values. The value of houses nationwide has been steadily sliding downward as foreclosures, unemployment and tight credit take a toll on real estate. Values could continue to fall.

Nearly a third of all mortgages could be under water

Home prices have been falling for the past few years during the recession. Because of continuing foreclosures, high unemployment and fewer homes being sold, the value of houses has continued to trend downward. It is estimated that 27 percent of American homeowners could be under water on their mortgages, meaning payments to the loan company cost more than the home is worth, according to Bloomberg. Real estate information company Zillow released a report stating that more than 15 million home loans were under water. Home prices are estimated to have fallen by almost 6 percent in the last year and almost 3 percent since September, 2010. Values are expected to decline 5 percent more in 2011.

Deceptive decline in foreclosures

Foreclosure activity has been closely watched over the past year in the hopes that a slowing rate of foreclosure would mean a real estate market close to recovering. A decrease in foreclosures occurred in January, but that doesn’t mean that the crisis is over, according to CNN. Because of the “robo-signing” scandal, where foreclosures were initiated by banks without reviewing the paperwork, the foreclosure process has been held up. The number of homes and installment loans foreclosed on will likely increase once the backlog of foreclosure cases in courts and at loan lenders is reduced.

Areas with inflated value still reeling

Areas where real estate values are the highest are still plagued by high foreclosure and rates of negative equity. Nevada, Arizona and California still lead the nation in foreclosure-affected states. Florida, though, has started to improve, falling to ninth place nationally in foreclosure rates.

Sources

Bloomberg

CNN

Fannie and Freddie have raised risk fees for mortgage loan lenders, making it that much harder to buy a home. Image from Wikimedia Commons.

Fannie Mae and Freddie Mac have announced a raise in the risk fees they will charge mortgage loan lenders. The mortgage insurance houses are charging lenders more to buy the loans and sell them to investors. Higher costs for obtaining loans may be passed on to borrowers.

Fees charged to mortgage loan lenders to rise

Fannie Mae and Freddie Mac, the mortgage insurers that received billions from bailouts, are raising risk fees charged to mortgage loan lenders, according to USA Today. The fees aren’t being raised astronomically, but risk fees are now being assessed on mortgages lent to some of the least risky borrowers. The way Freddie and Fannie work is that when a  bank or other loan company lends a mortgage to someone trying to get a loan, Freddie or Fannie buys the loan and guarantees lenders that they will receive payment and not lose money on the loan, should the borrower default. Then Freddie or Fannie can sell the loan to investors as an investment. The loan lender is charged a fee by the mortgage insurers for taking on the risk.

Fees to include least risky borrowers

Freddie and Fannie are now including fees on all mortgages, not just the risky ones. Previously, risk fees were not assessed on loans to borrowers who had credit scores of 711 or better and paid at least 20 percent down. From now on, anyone who borrows a mortgage loan without a credit score of 740 and 25 percent down is likely to warrant a risk fee assessed to the lender by Freddie and Fannie. These fees are likely to be passed on to consumers. The amounts will vary, depending on the credit score and amount of down payment of the borrower.

Least likely to affect wealthy borrowers

Those least likely to face risk fees are those who have perfect credit or who are well off enough to not worry about it. People trying to get a piece of the American dream of home ownership, whether it’s in Jackson, Mississippi, or in Scottsdale, Arizona, now have one more thing to contend with. Risk fees are expected to be incorporated into new mortgages nearly immediately.

Source

USA Today

Retail stores are branching out into financial services such as check cashing to appeal to the growing number of consumers wary of banks. Image from Wikimedia Commons.

Giant retail store chains have begun branching out into the world of alternative financial services. Store chains such as Walmart, Kmart and Best Buy have started offering financial services to unbanked customers — those without bank accounts. Almost 20 percent of Americans do not have a bank account.

Alternative financial services at retail stores

Large retail chains are beginning to offer alternative financial services to customers who don’t have bank accounts, according to the Washington Post. Services such as money orders and check cashing have been available in retail stores for years, though some retailers are expanding their offerings. Walmart offers check cashing and sells prepaid debit cards in stores and is expanding by putting a financial services section called Walmart Money Center in stores. The Money Centers, which are currently in more than 1,100 stores nationwide, offer check cashing, money orders and prepaid card services in a bank or credit union-like format. The company is planning to expand the number of Walmart Money Center locations from Alabama to Arizona to Alaska, but Walmart does not appear to be planning on offering cash advances yet.

Kmart and Best Buy expand financial services

Retail chains Kmart and Best Buy are also expanding into offering financial services to customers. Kmart is offering pilot programs of check cashing, money orders and prepaid debit card services in some stores. The layaway program that Kmart re-launched at the height of the recession has also been very popular, as fewer people want to use installment loans or credit cards to make purchases anymore. Best Buy has launched a series of kiosks run by Tio Networks that customers can use as an electronic bill paying system. Instant cash is fed into the machine, which uses an electronic payment network.

The unbanked

The unbanked are people who do not have a bank account of any sort and use alternative financial service providers such as check cashing services to handle transactions. About 70 percent of the unbanked earn $30,000 per year or less and many choose not to patronize banks because of bank fees or mistrust of banks. Surveys done by Walmart indicate that one in five customers do not have a bank account.

Source

The Washington Post

New estimates for Social Security indicate the program will run deficits until 2037, when the trust fund will run as dry as the Bonneville Salt Flats. Image from Wikimedia Commons.

New estimates project that Social Security will run out of cash by 2037. The estimates, from the Congressional Budget Office purport that Social Security will run a deficit until 2037, when the trust fund will be completely depleted. Recent tax cuts already have given advance cash out of Social Security revenue.

Constant deficits projected for Social Security

A new series of projections for the Social Security program by the Congressional Budget Office estimates that Social Security will run a deficit from now until 2037, according to MSNBC. The new projections are a reversal from last year, when the CBO had a far rosier estimation of the health of the Social Security Administration. In 2010, the SSA ran a deficit for the first time since the Reagan administration, but the CBO estimated Social Security would recover from any shortfalls by 2012. Previous estimates had projected a $45 billion shortfall for 2011, but it is now estimated that the shortfall will increase to $130 billion. The CBO also contends that Social Security will continue to post deficits until 2037, when the Social Security Trust Fund is expected to run out, leaving retirees from Alabama to Arizona high and dry.

Rare losses

The Social Security Administration had not run at a loss since the 1980s, though it is the single largest expenditure in the national budget. Budget surpluses of Social Security, which have been constant until recently, were put into the Social Security Trust Fund but have been a frequent source of emergency loans for the U.S. government. This year, the government is expected to run a $1.5 trillion deficit, which is more than a government can take out some personal loans to cover.

Tax cuts a partial culprit

Part of the problem, if the CBO’s estimates prove correct, is that the Bush era tax cuts that were re-extended included a reduction of Social Security payroll taxes. The loss of revenue will only exacerbate the loss, though Congress has pledged to put up the necessary funding to cover the loss.

Source

MSNBC

At a recent congressional hearing, the government mortgage modification program was blasted as being a "failure." Image from Wikimedia Commons.

The Inspector General of government bailout programs has labeled the mortgage modification program a failure. Neal Barofsky, appointed to oversee the bailout programs including the Home Affordable Modification Program, blasted the program in a Congressional hearing for being ineffective. More than half a million applicants have gotten their mortgages modified.

Mortgage modification program blasted in hearing

Recently, there was a joint Congressional hearing about whether certain programs in government bailouts had been effective, including the mortgage modification program. The program, which was nicknamed Make Home Affordable, but titled the Home Affordable Modification Program or HAMP, was blasted in the hearing as “a failure,” according to USA Today. Neil Barofsky was appointed as a special Inspector General in charge of bailout programs and funding and told the Congressional oversight committee that the mortgage modification program was not working. He went on to say that an increasing number of people will continue to want the program canceled, “and understandably so.” However, some have pointed to slow moving loan lenders as being part of the cause of the program’s problems.

Call to repeal HAMP

An increasing number of people are calling for the HAMP program to be cut. On the same day that the oversight committee met, three House Republicans submitted a bill that would end the  HAMP program. Doing so would cut $30 billion from unused funding for bailout emergency loans. HAMP was intended to help 3 million to 4 million people avoid foreclosure by modifying existing loans with loan companies, but only 549,620 mortgages have been successfully modified. However, the cash advances lent to banks, more than $341 billion, have been viewed as very successful.

Foreclosures still epidemic

The rate of foreclosure has started to fall in the worst hit areas, especially states like Arizona with higher than normal real estate values, according to CNN. Las Vegas, the worst hit city in the United States, has seen the rate of foreclosure fall by 7 percent over the last year, but one in nine homes there has been in some form of foreclosure activity. However, in a survey of more than 200 metro areas by RealtyTrac, the overall foreclosure rate rose by 72 percent in 2010.

Sources

USA Today

CNN

Border Patrol authorities have seized a marijuana catapult that was used by smugglers to fling drugs into the U.S. Image from Wikimedia Commons.

Border patrol has discovered a marijuana flinging catapult near the American border. Smugglers used the catapult to fling marijuana into the United States, and it was filmed by the National Guard. Mexican law enforcement has since seized the catapult.

Marijuana catapult discovered near Mexican border

Apparently the war on drugs has gone medieval; border patrol found a marijuana-throwing catapult being used at the U.S. and Mexico border, according to ABC. Smugglers had used the catapult to throw drugs over the border, and it was captured on a night vision surveillance camera by the National Guard units that were patrolling the area. The National Guard has regular patrols near Naco, Arizona, which is situated near the Mexican border. During the patrol, film was taken of a group of smugglers, who would tow the catapult on a flatbed trailer behind an SUV. Once they set up the siege engine, they would hurl bags of marijuana that weighed more than four pounds into the desert on the American side.

Latest discovery in drug crusade

Once the National Guard had documented the discovery, the Guard contacted Mexican authorities. Mexican law enforcement officials showed up to apprehend the smugglers, who fled the scene and avoided being captured. The SUV, the catapult, the trailer and about 45 pounds of marijuana in four-and-a half-pound bags were seized. The catapult was constructed on a flatbed trailer about seven feet in length, which folded for transport. Once the throwing arm was put in place, it stood just more than 10 feet tall.

Another drug operation goes up in smoke

Though record drug busts — such as the 20-ton pot seizure several months ago — continue to happen, drug smugglers have shown repeatedly that they can be extremely creative in getting around the authorities. However, the diligence of the National Guard in patrolling the border ensured that this operation went to pot.

Video of the pot catapult

Source

ABC

A Tuscon restaurant has canceled a promotion of lion tacos after receiving death threats. Image from Wikimedia Commons.

A restaurant in Tuscon, Ariz., announced recently that it would offer lion meat tacos for one day as a promotional event. The restaurant offers tacos made from various exotic game meats every Wednesday night and planned to offer lion. However, the restaurant canceled the lion tacos after receiving threats.

Death threats get lion meat tacos clawed off the menu

A restaurant in Tuscon, Ariz., Boca Tacos y Tequila, has canceled promotion of lion meat tacos after receiving death threats for planning to serve them, according to ABC. Restaurant owner Bryan Mazon has a weekly promotion called “Exotic Taco Wednesday,” where tacos made with exotic game meats are served. The restaurant has offered alligator, turtle and python in the past and planned on offering a limited number of lion tacos for Wednesday, Feb. 16. However, plans were scuttled after Mazon started receiving death threats at the restaurant and at his home. Mazon said he had more calls telling him “to go to hell” than pre-orders for lion tacos, so he canceled the promotion.

No cats in the kettle

Mazon was purchasing lion meat from an exotic meats company that raises its own lions. Exotic game meats can be quite healthy and  nutritionally superior to pork or beef, especially the beef mixture Taco Bell is being sued over. Venison such as elk or deer is higher in protein and leaner in fat than beef, as is bison and many other meats. Kangaroo meat is beginning to become popular worldwide for the same reason. Though kangaroos are portrayed as cute in the media, native Australians will insist that they are dangerous pests.

Meat and greet

Exotic meats are becoming a booming industry. There are numerous services that offer exotic meat, for instance Exotic Meats USA offers lion, alpaca, alligator, buffalo, kangaroo, rattlesnake and much more, as other companies do. However, exotic game meats often come at a premium price, so be prepared to shell out big bucks when placing an order.

Sources

ABC

Exotic Meats USA

People are going to have to pay advance cash to banks more often to use their checking accounts. Image from Wikimedia Commons.

People who bank with the nation’s largest banks are going to have to start paying advance cash for having a checking account. Free checking accounts are all but gone at major banks, now that U.S. Bank is rumored to be jumping on the account fee bandwagon. Increasing bank fees are a trend unlikely to cease.

Banks charging advance cash

Free checking accounts, from the customer’s standpoint, were far preferable to checking accounts with fees. It used to be an account holder simply had to pay for blank checks, they didn’t have to pay the bank advance cash to keep the account open for another month. Account holders at the nation’s largest banks can bid goodbye to those days, as free checking accounts are becoming a thing of the past. Bank of America, Wells Fargo and JP Morgan Chase all introduced new fees on checking accounts, and U.S. Bank is likely going to hop on the bandwagon, according to CNN. More people can expect to have to part with some instant cash to use their own money.

Get around fees

Avoiding bank fees is one of the more common reasons people take out a payday loan, but there are other ways around bank fees as well. Consumers should check with their banks to find out what loopholes they might be able to use to get around fees. For instance, check to see if a minimum balance can get any maintenance fees waived and whether monthly direct deposits can get fees waived. Some banks will waive account fees after a minimum number of purchases with a debit card.

Free checking will not die

Just because major banks are instituting fees does not mean free checking is going extinct. For instance, many community banks and credit unions offer free checking accounts and lower fees than major banks. Fees at those institutions go back into the community, not toward funding an executive ski chalet in Scottsdale, Arizona.

Source

CNN

A key portion of the Dodd Frank act, named for Senator Chris Dodd (pictured) and Rep. Barney Frank, takes effect this year. Image from Wikimedia Commons.

There are a new set of rules taking effect this year concerning credit scores. The financial reform bill, or the Dodd Frank financial reform act, changed federal laws regarding reporting of credit scores. If a person is applying for any large loans in the future, these are good things to know.

Change in credit scores law starts in July

On July 21, 2011, a provision of the Dodd Frank Wall Street Reform and Financial Protection Act, or the Dodd Frank Act will take effect, according to USA Today. The new regulations say when people apply for loans — such as a personal loan, large installment loan or mortgage loan — and get denied or get approved for a higher interest rate, the loan lender has to give them a copy of their credit report for free.

Other provisions enacted earlier

This is the second provision of the Dodd Frank Act to take effect this year. On Jan. 1, a related provision took effect that has to do with what is called “risk based pricing.” Risk based pricing is prices or interest rates that are determined by credit score, like a mortgage on a cabin in Scottsdale, Arizona, or a loan for a new car. Similar to the other law that takes effect in July, people who qualify for an interest rate higher than what was desired have to be notified of risk based pricing and instructions on how to get a free copy of their credit reports.

Always a good time to raise credit scores

There is never a bad time to do a little credit repair. The better a person’s scores, the better the rate he or she will qualify for when trying to get a credit card or get a loan that requires a credit check. These laws won’t have an effect on most payday lenders, who generally do not check credit scores.

Get professional credit repair help

Speak to a professional today and take proactive steps to repair your credit. For a FREE credit consultation, call 1-877-563-2076.

Source

USA Today

For those who can qualify at their local bank or real estate office, current mortgage rates mean low interest loans. Image from Wikimedia Commons.

People looking to purchase a home can get some low interest loans if they act soon. Current rates on mortgages are beginning to rebound from record lows, so there’s no time like the present. The only snag might be qualifying for financing.

Low interest rate mortgage loans available

Banks want to get anyone they can get to buy a home, or at least anyone who can qualify for the financing. Higher credit scores are usually required these days, though that isn’t always the case. People looking to get low interest loans for purchasing a home are better off acting sooner rather than later. Current rates on bank loans for homes are at all time lows for fixed rate mortgages, according to USA Today. The market rate for the 30-year fixed mortgage is currently at 4.77 percent, down from 4.86 percent from a few weeks ago. The market rate for a 15-year fixed mortgage is 4.13 percent. The 15 year fixed mortgage rate is down from 4.20 percent a few weeks ago.

Rebound from record lows

If there is a time to get a loan for a home, it’s now. Mortgage rates are rebounding after epic lows, as the housing industry took a downward turn over the course of 2010. Fewer people were buying homes after tax credit expired, and fewer people felt confident enough to buy, despite values being slightly down from Arizona to Alabama and all points in between. The market rate for 30-year fixed hit 4.17 percent in November of 2010, the lowest interest rate in 40 years. The rate for 15-year fixed home finance loans hit 3.57 percent in November, the lowest since 1991. Those who can come up with the instant cash for a down payment should do so soon.

Rates will rise eventually

The adage “What goes up, must come down” and vice-versa applies to a lot of things. Buying low and selling high is what many homeowners aim to do, and with mortgage rates so recently having been at record lows, there’s no time like the present.

Sources

USA Today

A minimum wage in seven states gets low income workers a little more pay day cash, but it's only pennies more an hour. Image: MoneyBlogNews/Flickr.com/CC-BY

A small hike in the minimum wage in several states is going to provide some workers with a little extra pay day cash. Minimum wage differs between states, as some peg the minimum wage to inflation. There are seven states raising the minimum wage.

Minimum wage going up in seven states

Seven states are raising the minimum wage by varying amounts, which means a little more pay day cash will be going to workers in those income brackets, according to USA Today. An estimated 650,000 people will get a raise of anywhere from 9 to 12 cents per hour, depending on which state they live in. Colorado, for instance, is getting an 11 cents an hour raise to $7.36 an hour. Washington state is raising the minimum wage by 17 cents, allowing the Evergreen state to maintain the highest minimum wage in the nation at $8.67 per hour, but that hardly keeps anyone from needing a loan until payday, as the raises are all due to higher prices of consumer goods.

Minimum wages vary

All states vary in how the minimum wage is set, though most use the federal minimum wage. Some states, such as Alabama or Mississippi, have no minimum wage laws. Ten states peg the minimum wage to cost of living, and seven states have seen a sufficient rise in consumer price indexes to raise it. Colorado, Arizona, Washington, Montana, Ohio, Oregon and Vermont have all legislated a little more quick cash for the lowest paid workers, though the raises are not by very much. The raises won’t mean that workers will suddenly never need installment loans ever again, but they will get a little more help.

Every little bit helps

Those who have to make a living on minimum wage do not have an easy time of things, and even a tiny increase can be a benefit. Minimum wages have been controversial for some time, and many have argued for either a radical increase or getting rid of it altogether.

Sources

USA Today

Minimum Wage in the U.S.

The largest national loan lenders might settle quickly in the investigation of "robo signing." Image from Wikimedia Commons.

The largest loan lenders may be the first to settle with various state attorneys general. All 50 states are investigating foreclosure practices and procedures of various banks and loan companies. The findings indicate not everyone has played by the rules.

Quick settlement may be forthcoming from large loan lenders

As every state attorney general is looking into foreclosure practices, especially the “robo-signing” controversy, the nation’s largest loan lenders for mortgages are lining up to reach a settlement as quickly as possible, according to Reuters. A widespread probe into mortgage foreclosures began several months ago, conducted by attorneys general from all 50 states, so foreclosures from Scottsdale, Arizona, to Birmingham, Alabama, will be scrutinized. It appears that the nation’s largest loan lenders are ready to settle, including Bank of America, Wells Fargo, Ally Financial, JP Morgan Chase and Citigroup, according to a recent statement from Iowa Attorney General Tom Miller. No concrete settlement has been reached, and no instant cash handed over for fines yet, but that could be the case fairly soon.

States shun bad practices

The finance industry has been under heavier scrutiny over the past few years, and the revelation that banks may have mechanically produced foreclosure documents without merit, which is called “robo-signing,” certainly does not paint the largest loan companies in the nation in a good light. People may have been issued foreclosure notices even though they were up to date on the installment loans they borrowed for their homes; this explains why all 50 state attorneys general are looking into the matter.

Housing market still down

The housing market is still on a shaky foundation. Homes have been losing value, and fewer people are confident about buying. If consumers become less confident that the institution that their mortgage was obtained through is honest or trustworthy, it could be a recipe for disaster.

Sources

Reuters

More people got bank loans and bought houses in November, but sales are still sluggish overall. Image from Wikimedia Commons.

The number of people getting bank loans for houses is increasing. Existing home sales crept up over November for the third increase in four months. However, sales are far below the levels that were seen last year.

More homes being sold and bank loans taken out for purchases

The housing market is still struggling to recover, but there are glimmers of hope in that the number of people taking out bank loans or going to a loan company to purchase a home is increasing, according to USA Today. The seasonally adjusted rate of existing home sales increased to a rate of 4.68 million units per year. The increase for November home sales was the third increase in the rate of home sales in four months. Western states had the largest increase, as sales in the West increased by 11.7 percent, though areas like Nevada and Arizona are still struggling. The Midwest had a boost of 6.4 percent. The Northeast and the South had the smallest increases, rising by only 2.7 and 2.9 percent, respectively.

The bad news

Despite an increase in home sales and more people willing to take out personal loans to buy a home, it isn’t all good news. Home sales over the past year, as opposed to just the past few months, are still dismal. November home sales for 2010 were actually a big drop. About 30 percent fewer homes sold in November 2010 than in November 2009. It’s harder to get a loan, and few people feel safe enough to buy. Home sales are on pace to record the lowest levels in sales since 1997. Applications for mortgage loan modification and new loans dropped in November, but that may be due to few people wanting to buy so close to the holidays.

Not the greatest signs

The real estate industry is still struggling to regain its footing, and the supply of available homes, more than nine months worth, is still more than it should be in a healthy market. However, as long as gains keep getting posted consistently, it will get there eventually.

Sources

USA Today