Using your house to pay for higher education

Dear Ms. Mortgage Maven,

I am 65 years old and need about $30,000 to help my daughter pay for college. My house is worth about $500,000 and I owe about $120,000 on it. I would like a home equity line of credit but my credit score is not the best because I went through bankruptcy several years ago. I am a senior citizen and receive social security, and I also have a part-time commission-only job. My combined income is about $20,000/year.

Can I get a home equity line of credit?

-SD

Dear SD,

Two things immediately jump out at me. First, many people think that their credit score is lower than it actually is and second, you should compare getting a home equity line of credit to getting a reverse mortgage and see which one makes the most sense for you.

If you have been paying your bills on time since your bankruptcy, your credit score may be higher than you think. You should look at your credit report not just to learn your score, but to verify that it contains only accurate information. Especially since you have been through a bankruptcy, it is important to make sure that the collection accounts that were discharged through the bankruptcy are properly noted on your report.

For example, if your bankruptcy was discharged in April 2003, those collection accounts should not be reported as current collections. You want a relatively small amount of money, but you also are retired and do not make a lot of money. Do you enjoy working your part-time commission job? Do you think it could soon bring you more income for you to live comfortably for several years?

If so, then a small home equity line of credit may make sense, but remember that you will be paying your first mortgage (on $120,000) and a second mortgage (on $30,000) every month. If you answered no to both questions above though, you may want to consider a reverse mortgage.

A reverse mortgage allows you to use the equity in your home without having to make any sort of monthly payment. Unlike regular mortgages, there are no income or credit requirements, and the money you receive is not taxed by the government because it is a loan, not income. You can choose from a lump sum payment, a line of credit, a monthly payment to you for the rest of your life, or for a fixed duration, or a combination of the three.

news source : http://media.www.districtchronicles.com/

Why annual reports are a waste of time.

It's spring, which in corporate America means it's time for the annual reports. If you own a few shares of stock, or someone in your house does, you've seen them. Many are beautiful. Most are banal: full of jargon, vague mission statements and feel-good pictures of smiling customers, spotless manufacturing facilities and diverse employees. Here's Merrill Lynch's annual report, with several pages of beautiful photography. And here's the McDonald's annual—68 pages of good times, good food and good statistics.

It saddens me to say this—especially at a time when people in the word and image trades are suffering—but annual reports are archaic and essentially worthless. Those thuds you hear are hundreds of thousands of meticulously crafted marketing documents being dumped into the garbage can. Given that every American corporation is trying to be greener and save money, it's astonishing that annual reports are still produced.

Once upon a time, annual reports were a necessity. The New York Stock Exchange required companies that listed their stock on the exchange to send every shareholder an annual report—a document offering a state-of-the-company address from the CEO plus crucial operating data. In addition, the Securities and Exchange Commission required companies to send 10-Ks (detailed annual reports shorn of the PR junk) and proxy statements (like 10-Ks but with more information about compensation and the directors up for election). In their day these were highly useful documents: news organizations would keep collections of them, and professional investors could mine them for insight.

news source : http://www.newsweek.com/id/133228

Citigroup reports loss on writedowns, credit costs

(Bloomberg) - Citigroup Inc. posted a $5.11-billion loss today and cut 9,000 jobs, sending its shares up as much as 7 percent in New York trading.

Citigroup, the biggest U.S. bank by assets, reported almost $16 billion of writedowns and increased bad loan reserves as customers fell behind on home, car and credit-card payments.

U.S. index futures rose and the dollar advanced against the euro after Citigroup announced the results, fueling investor optimism that the credit-market contraction may be easing.

Citigroup climbed $1.40, or 5.8 percent, to $25.43 at 10:18 a.m. in New York Stock Exchange composite trading, after surging as high as $25.80 earlier today.

The bank's writedowns and credit losses from the collapse of the subprime mortgage market now total almost $40 billion, more than Zurich-based UBS AG and Merrill Lynch. Vikram Pandit, Citigroup's chief executive officer, has bailed out about 10 investment funds, replaced his chief risk officer and raised $30 billion to replenish capital since he succeeded Charles O. "Chuck" Prince in December.

Pandit's finance chief, Gary Crittenden, said today that the bank would eliminate 9,000 jobs in the next 12 months. That includes 2,000 of the 6,200 cuts the bank has already announced.

news source :

Great Credit Score Gets More Important

Billionaire investor Warren Buffett has a FICO credit score of 718, just under the U.S. median, according to a published report.

That might seem low for someone with so much net worth. But a high income doesn't boost a score and a lot can hurt one, limiting a person's ability to get mortgages or other loans at a favorable interest rate.

Knowing the score and keeping credit squeaky clean is especially important now that lending standards for mortgages and other kinds of loans have tightened.

"Today, great credit is worth a lot more than it was just a few years ago," said Alan Rosenbaum, chief executive of mortgage firm Guardhill Financial in New York.

Besides late payments, carrying a balance on many accounts or running a high balance relative to one's credit lines can cut a score. So think twice before getting new loans or co-signing on someone else's. Many lender inquiries over time can dent a score, as can credit report errors. One looks likely in Buffett's case, reported by Fortune magazine.

Excellence Starts At 750

The FICO score is named after its creator, credit-rating firm Fair Isaac (FIC). It is the most widely used consumer credit rating model in the U.S. A FICO score from 750 to 850 is typically considered excellent, 660 to 749 is good, 620 to 659 is fair, and anything below 619 is poor. The national median is 723.

A statistical analysis of a person's credit report at a major credit bureau -- Equifax (EFX), Experian or TransUnion -- determines his FICO score. It is meant to reflect creditworthiness, the likelihood that a person will pay his debts.

"The formula for an individual's score does not evaluate income. Therefore, a high-net-worth individual may not have a high FICO score and vice versa," said Careen Foster, Fair Isaac product manager.

Banks using FICO scores in lending decisions may deny credit, charge more interest, demand more collateral, or require extensive income and asset verification if the applicant's score is low, Foster says.

In the housing boom, a score around 700 was more than enough to get a mortgage and a good interest rate. Today, many lenders want a 720, even a 740, to qualify for the best rates, Rosenbaum says.

Say someone wants a jumbo home loan of $1.5 million and can pay 30% down. Today a lender with particularly desirable rates may not give him the loan unless his FICO is at least 740, Rosenbaum says.

A few years ago, those scoring 680 or lower got such loans, he says.

No More Lenience

Today, an applicant with a score in the high 600s and not too much credit card debt could secure a loan from a traditional lender for about $200,000 but not higher, says Steve Habetz, president of Threshold Mortgage in Westport, Conn.

When loans are granted, lower scores mean higher interest rates.

"Twelve months ago, if you had 640 credit score you saw no differential in what your cost was for a loan and your ability to get a loan, compared to someone with a 720," Habetz said. "But things are different now."

Rosenbaum says someone with a score of 740 might get a 5-year adjustable jumbo mortgage at 5.5% with no points. Someone with a 700 score may get a 5.875% rate. Loan-seekers who score lower might have to hunt to land loans with interest rates of 6.25% or higher.

More Than A Score

Lenders today still do consider liquidity and income, not just a FICO score, Rosenbaum says.

But according to mortgage banker Peter Grabel, at Indymac Bank, many lenders will now only loan to people with very high credit scores.

"What we're seeing from most lenders is that the lending rate is becoming far more credit-score driven," he said.

It comes at a tough time. Many people are having trouble meeting credit obligations already. U.S. job losses hit 232,000 in the first quarter. The price of gas and goods has been rising.

What Next?

Amid economic challenges, hard-pressed consumers could go deeper into credit card debt and have trouble keeping their scores up.

A rise in revolving debt, including credit card debt, impacts a credit score. In December, this debt type grew at a 2.8% annualized rate nationwide. That rose to 7.1% in January, throttling back to 5.9% in February, the Federal Reserve says.

news source : http://money.cnn.com/news/newsfeeds/

Insurance credit scoring here to stay

I just received my FICO score and VantageScore ranking. My FICO score was 5 points less than my VantageScore ranking, yet FICO gave me a "good" rating and Vantage gave a "nonprime" grade D scoring. My vehicle insurance went up because of this score. Is there any way to dispute this?

-- Stephanie

Dear Stephanie,

Don't I wish you could dispute your insurer's decision! My insurer did the same thing to me while insisting I was still saving more money on my insurance than if the company didn't use scoring. Go figure.

What's really interesting about your situation is the big difference in how FICO and VantageScore rated your scores.

First, let me talk about my actuarial friends. Insurers have the right in most states to view your credit history and include what is found there in their calculations of your personal risk.

Why? Well, insurers say -- and our fearless state representatives agree -- there is a correlation between how a person handles credit and the likelihood of filing an insurance claim.

So to help everyone manage the difficult situation of who gets charged what rates, or gets coverage at all, insurers rely on a scientific model. All things considered, it is probably fairer than the old insurance underwriting technique of redlining based on neighborhood or race.

The bottom line of the situation is that insurance credit scoring is here to stay.

You can ask the insurer's customer service why your rates went up, but you'd probably have more luck asking my cat Stinky for answers. Each company has its own scoring models and considers them to be trade secrets.

However, you can get a version of your generic insurance score from TrueCredit. You will receive an auto and homeowner's coverage score along with advice for improving your score. Insurers may not look at the information contained in your credit reports and scores in the same way that a potential lender would. For example, an insurer may be more interested in your payment history than in how much you owe.

Your FICO and VantageScore credit scores are based on the information contained in your credit reports at each of the three major credit bureaus -- Experian, Equifax and TransUnion. Because each bureau has different data in its files about you, you will have a different score depending on which type of data they use.

Although you cannot dispute your scores, you can check your credit reports to assure that the information used to calculate those scores is correct. If you find inaccurate or out-of-date information, you should file a dispute with the bureau that reported it.

VantageScore is a relative newcomer to the credit-scoring industry. It was developed by the bureaus and they claim the VantageScore ranking is more up-to-date than a FICO score. Different math and weightings are used to figure your score and each has its own range of scores. FICO scores go from 350 to 850, while VantageScores range from 501 to 990 and also include a letter grade.

Once you have your credit reports in the best shape possible, your only other alternative for saving money on your insurance premiums is to shop around for different insurance carriers. Because insurers each use their own scoring systems, you could have a much better score with carrier A than you do with carrier B, and your premium will reflect that.

news source : http://www.scrippsnews.com/node/32303

Mintel Comperemedia Report: Credit card mailing volume continues to decrease

The estimated amount of direct mail sent by credit card companies in the United States dropped 3% from December 2007 to January 2008, according to research from Mintel Comperemedia, a media monitoring service.

The decrease is representative of a trend that first started in October. According to the report, mail sent by credit card companies has declined by 19% since October of 2007. Mintel Comperemedia speculated that the change in mail volume is the result of an “unsteady, unsure market.”

“There have been a few peaks and valleys in 2007, but we observed consistent monthly declines starting in October 2007,” said Lisa Hronek, a senior research analyst for Mintel Comperemedia, when reached by e-mail. “Overall, mailings observed during 2006 were higher than 2007.”

From December 2007 to January 2008, direct mail sent to current cardholders dropped by 30%, the report said. In contrast, mailings to non-customers increased by 7%.

During the same period last year, direct mail sent by credit card companies increased by 7%, Hronek said. Overall, there were more offers sent to both non-customers and existing customers last year. However, the year before that, from December 2005 to January 2006, there was a decrease of 5%, she added.

Not every credit card company decreased its direct mail efforts from December 2007 to January 2008. Six of the top 10 mailers of 2007 actually increased mailings to non-customers from December to January, Mintel Comperemedia said. However, four out of the 10 reduced mailings to non-customers and existing cardholders.

These top ten mailers included in the reporte were Chase, Bank of America, Citibank, HSBC, American Express, Capital One Bank, Discover, Washington Mutual, Barclays Bank and First Premier Bank, Hronek said.

When contacted earlier this year, Paul Hartwick, a spokesman for Chase, confirmed that the company had decreased the amount of direct mail it sends out.

“In general, our direct mail efforts have decreased as we have acquired customers through different channels, including our branch network, the channels of our co-brand partners and the Internet,” Hartwick said in an e-mail.

In contrast, when contacted in late February, a representative from American Express stressed the importance of mail in its direct marketing efforts.

“Direct mail is an extremely important part of our mix, we remain committed to direct mail and it continues to be a successful channel for us for not only acquisition but also as a way to communicate and educate our card members on the benefits and services they have,” said Desiree Fish, VP of public affairs for American Express. “It continues to increase as does the other channels for us.” she added.

news source : http://www.dmnews.com/Mintel-Comperemedia-Report-Credit-card-mailing-volume-continues-to-decrease/article/108670/

Credit cards at ski resort compromised

A Vermont ski resort has been the target of a security breach that may have compromised tens of thousands of credit cards.

Okemo Mountain Resort said Monday that hackers broke into its computer network and potentially gained access to credit card data from 28,168 transactions between Feb. 7 and Feb. 22 and 18,401 credit cards between January and March 2006.

The number of affected cardholders is unknown but Okemo said it expects it to be lower than the number of transactions.

Okemo is working to protect any personal information transmitted through its system from further unauthorized access. The resort has alerted credit card companies, which are notifying affected cardholders.

Cardholders are advised to monitor their credit card activity and credit reports and report any suspicious activity.

news source : http://www.businessweek.com/ap/financialnews/D8VOMSOG0.htm

Their curious eyes, your credit report

DALLAS – James Alderman’s efforts to remove what he says is a costly error on his credit report provide a lesson on who can pull your credit report and what you can dispute on the all-important document.

Businesses can pull your credit report under several circumstances, and they don’t always have to ask your permission. And the mere act of a creditor pulling your report can affect your credit score, depending on how the query is classified.

Your credit report is your lifeline to obtaining loans, insurance or credit cards. Maintaining a “clean” report is vital, so it’s always in your best interest to dispute anything you consider inaccurate.

“My credit file is of utmost importance to me right now, given that I have an aging vehicle and a 25-year-old house and I’m in the process of adopting a 12-year-old orphan boy,” Alderman said. “Major expenditures are in my near future, and I can’t afford to pay more for everything because some … company wrongfully pulls my credit report and drives the score down.”

Alderman, an engineering technician from Carrollton, Texas, said his dispute with Avis Rent A Car System LLC started last November while he was on vacation in Hawaii. He reserved and paid in advance for a rental car from Avis as part of a vacation package.

When he went to pick up the car, he used a debit card instead of a credit card to secure the deposit needed.

Avis declined to talk specifically about Alderman’s case. However, company spokesman John Barrows did say the company pulls a credit report only when a customer uses a debit card to rent a car “as opposed to simply using it to pay for their charges upon return.”

“This is a typical procedure in our industry in order to minimize the potential for loss associated with this form of payment,” Barrows said in an e-mail response.

Alderman’s situation brings up issues consumers need to know about their credit report and who can access it.

“The big problem, and where our consumer protection laws are woefully inadequate, is that they pulled a credit report without my authorization,” Alderman said. “This practice should be illegal.”

It isn’t. The only time you must give written permission is when your employer, or prospective employer, seeks to check your credit report.

“Congress felt that because employment is someone’s livelihood, that there be should some special additional protections for consumers, knowing that this information may play a role in their employment decision,” said Rebecca Kuehn, assistant director of the Federal Trade Commission’s Division of Privacy and Identity Protection.

The law lists other “permissible purposes” for which your credit report may be pulled without your express permission. Those include:

• Credit transactions or collections.

• Underwriting insurance.

• Determining eligibility for a license or other benefit granted by a government that’s required to consider an applicant’s financial responsibility or status.

• A business transaction initiated by a consumer.

• A review of an account to see if a consumer continues to meet the terms of the account. An example is your credit card company checking your credit report regularly to determine whether you’re still creditworthy.

The second issue that Alderman disputes on his credit report is the classification of Avis’ viewing the report as a “hard inquiry,” which he says can hurt his credit score.

He’s right.

There are two types of inquiries. Soft inquiries occur when you check your own credit report or when a credit card issuer prescreens you before sending an unsolicited credit card offer. They don’t hurt your credit score.

But hard inquiries do affect your score. That’s when you apply for a loan and a lender checks your credit.

Lenders typically view multiple hard inquiries over a short period of time unfavorably, interpreting them as an indication that you’re looking to take on new debt.

Equifax ultimately agreed to remove the hard inquiry from Alderman’s credit report.

His experience underscores the importance of asking whether your credit report will be pulled. If you want to dispute an inquiry on your credit report, go through the same process as you would with any item you’re questioning on your report.

Consumers sweat over inquiries more than necessary, said Rod Griffin, manager of consumer education at credit bureau Experian.

“No one is ever declined solely because of an inquiry,” he said. “It’s the late payments (and high balances) and other problems that are really what’s important. Inquiries lose any value in a very short period of time.”
news source : http://www.thenewstribune.com/business/story/315513.html

Know Your Score

(CBS) Should you decide to use a lending institution, your power to borrow money is linked to your credit score. Do you know yours? Stephanie AuWerter, editor of Smartmoney.com, joined us with some advice on learning and improving your score.

In times like these, a good score is more important than ever. Because of the ongoing credit crisis, lenders have pulled back. Whether you're looking for a mortgage, a credit card or a small business loan, the standards are now tougher. If you want to get the best rates, you need a great score. FICO scores range from 300 - 850 and you should shoot to have a score of 750 or higher. The good news is you can take steps to increase your score fairly quickly. Step number one is to know where you stand and you can pull your score at myFico.com.

The worst thing you can do to your credit score is not pay a bill on time. It will crush it. But if that's happened to you, you have nothing to lose by calling up the lender and asking that they remove it from your credit report. They have absolutely no reason to accommodate you, but if you've been a good customer and if you have a good reason they may be willing to work with you. It certainly doesn't hurt to ask.

You also need to pay down your cards. Not surprisingly, big debts hurt your score. FICO does not like to see you reaching the upper limits of your credit line. And that's particularly tricky right now because some credit card companies are lowering the credit lines of certain customers. You want to keep your balances at 50% or less of your total available line. So pay down those debts .

Also, hang onto unused credit cards. Old cards that you don't use much any more may be helping your score. Part of your credit score is based on the length of your credit history. Also, cards that have untapped balances help with your credit utilization rate. It helps that you have untapped credit. So don't cancel an old card, provided you're not paying for it, and maybe once a year or so, make a purchase with it. It will help.

Finally, fix your mistakes. Nearly 80% of credit reports have mistakes on them, 29% of which are serious enough to result in a credit denial. So pull your report and give it a good review. You can do it for free once a year at annualcreditreport.com. If you find a mistake the credit bureau has 30 days to verify that the information is accurate, or else it has to be removed.
news source : http://www.cbsnews.com/stories/2008/03/23/business/main3960888.shtml

Credit Card Hearing Starts With a Surprise

The first big surprise of Rep. Carolyn Maloney's hearing on her proposed credit cardholders' bill of rights was who wasn't speaking. A few minutes before the hearing began Thursday, her spokeswoman explained that the consumers the congresswoman had invited to testify were no longer being asked to do so, out of concern that credit card providers couldn't respond to the consumers' tales of woe unless waivers had been signed. It wasn't clear why the waivers weren't immediately handed out and signed. (Maloney later released a statement expressing her disappointment and commitment to having the "regular people" testify at a future date.)

Maloney's bill of rights would mandate 45 days' notice of any interest rate increases and prohibit card companies from raising rates because of behavior related to other accounts. It is one of a handful of credit card reform proposals being debated in Congress. Sens. Ron Wyden and Barack Obama have also proposed a five-star rating system to help consumers easily evaluate cards' policies.

Industry groups, including the American Bankers Association, vigorously oppose such changes. "The Maloney bill could lead to a lot of negative consequences," says Ken Clayton, managing director and general counsel at ABA. He says controls that limit credit providers' ability to price credit according to risk—that is, charge higher rates to consumers who are more likely to default—will increase prices and limit credit access for all consumers.

news source : http://www.usnews.com/blogs/alpha-consumer/2008/3/14/credit-card-hearing-starts-with-a-surprise.html

Bill would allow credit reports to be frozen

Without dissent, the Senate on Thursday gave preliminary approval to Arizona’s first law allowing consumers to freeze their credit reports.

SB1185 is designed to stop identity thieves from applying for credit cards, loans or other debt in the name of innocent — and unaware — victims.

The measure crafted by Sen. Amanda Aguirre, D-Yuma, permits individuals to forbid the three major credit reporting agencies from providing credit reports without their specific permission. Without such a report, businesses and lenders are unlikely to extend credit to someone.

The measure, which now needs a final Senate vote, sets up procedures for consumers to unfreeze their reports using a personal identification number when they want to buy something.

news source : http://www.eastvalleytribune.com/story/111408

Asia Day Ahead: U.S. Stocks Decline; FBI Probes Countrywide

March 10 (Bloomberg) -- U.S. stocks fell a second day after the biggest drop in jobs since 2003 sent energy and mining companies lower, overshadowing an advance in banks spurred by a Federal Reserve plan to make more cash available to lenders. The dollar dropped for a fourth straight week against the euro after the U.S. unexpectedly lost jobs for a second month in February.

TOP STORIES/MOST READ ON BLOOMBERG

TIPS Show Fed Loses Control of Inflation as Yields Go Negative

Bond investors have never been so sure that the Federal Reserve will lose control of inflation. They're so convinced that they're giving up yields just to buy debt securities that protect against rising consumer prices.

Countrywide Is Probed by FBI for Possible Fraud, Person Says

Countrywide Financial Corp., the largest U.S. mortgage lender, is under investigation by the Federal Bureau of Investigation for possible securities fraud, according to a person familiar with the probe.

IMF Nods to Spending Spree by Asian Countries Hit by U.S. Slump

Asian governments are abandoning spending restraint and trying to get their consumers to do the same in their battle to overcome slowing growth.

MAIN ECONOMIC RELEASES TODAY Japan's January Machine Orders Seen Rising 2.7% From December China's Trade Surplus Seen at $22.5 Billion, Narrows Vs Year Ago China's Feb. Producer-Price Inflation Seen Accelerating to 6.9% Japan's Money Supply, Bank Lending Figures for February Are Due Japan's Merchant Confidence Index for February Will Be Released South Korea's Producer Price Index for February Is Released New Zealand's House Prices Report for February Will Be Released

MAIN COMPANIES/EARNINGS

MAIN ANALYST UPGRADES/DOWNGRADES *CHINA NETCOM CUT TO `NEUTRAL' AT CREDIT SUISSE *NATIONAL AUSTRALIA BANK CUT TO `SELL' FROM `BUY' AT CITI *HUTCHISON TELECOM RAISED TO `OUTPERFORM' BY CREDIT SUISSE *SEKISUI HOUSE CUT TO `NEUTRAL' AT CREDIT SUISSE *ST. GEORGE BANK RAISED TO `BUY' FROM `NEUTRAL' AT MERRILL *ALLCO FINANCE CUT TO `SELL' FROM `HOLD' AT CITI *FORMOSA INTERNATIONAL HOTELS CUT TO `UNDERWEIGHT' AT JPMORGAN *DR. REDDY'S LABS CUT TO `HOLD' FROM `BUY' AT CITIGROUP *CONSOLDIATED MEDIA CUT TO `NEUTRAL' BY MACQUARIE *SINGAPORE PETROLEUM CUT TO `PEER PERFORM' AT BEAR STEARNS

ASIAN MARKETS

The Nikkei 225 futures contract due in March tumbled 460 points to 12,780. The Hang Seng Index futures for March slumped 610 to 22,560. The S&P/ASX 200 Index futures due in March dropped 94 to 5,176 at 6:35 a.m. in Sydney.

U.S. STOCKS DROP ON UNEXPECTED LOSS OF JOBS; ENERGY SHARES FALL

U.S. stocks fell for a second day after the biggest drop in jobs since 2003 sent energy and mining companies lower, overshadowing an advance in banks spurred by a Federal Reserve plan to make more cash available to lenders.

TREASURY THREE-MONTH BILL RATES RISE AS FED INCREASES LENDING

Treasury three-month bill rates rose after the Federal Reserve announced plans to add as much as $200 billion to the banking system over the next month to offset a deepening credit crisis.

DOLLAR HAS 4TH STRAIGHT WEEKLY DROP VERSUS EURO ON JOBS LOSSES

The dollar dropped for a fourth straight week against the euro after a government report showed the U.S. unexpectedly lost jobs for a second consecutive month in February.

EUROPEAN STOCKS DECLINE; AXA, BHP BILLITON, VEOLIA LEAD DROP

European stocks fell for the fourth day this week as investors speculated credit-market losses will deepen for financial companies and an employment report added to evidence the U.S. may slip into a recession.

EUROPEAN BONDS HAVE WEEKLY GAIN ON STOCKS DROP, GROWTH CONCERN

European 10-year government bonds rose for a second week as traders bet losses in stocks and signs economic growth is faltering will boost demand for the safest securities.

CRUDE OIL FALLS AFTER U.S. JOBS REPORT SIGNALS ECONOMIC SLOWDOWN

Crude oil fell after a report showed that the U.S. lost jobs last month, signaling that demand will slow in the world's biggest energy-consuming country.

GOLD DECLINES AS DOLLAR REBOUNDS AGAINST EURO; SILVER STEADY

Gold fell after the dollar rebounded from a record against the euro. Silver was little changed.

HIGHLIGHTS FROM NEWSPAPERS

Nissan to Sell Electric Car in France by 2012, Ghosn Tells JDD

Nissan Motor Co., Japan's third-largest automaker, will introduce an electric vehicle to France by 2012 at the latest, Chief Executive Officer Carlos Ghosn told Journal du Dimanche.

news source : http://www.bloomberg.com/apps/news?pid=20601101&sid=aQsCsRfNBfPo&refer=japan

Time to refinance

NEW YORK (CNNMoney.com) -- Interest rates on 30-year mortgages are down and mortgage applications are up. Is it time to refinance?

The big headline here is that interest rates on the 30-year fixed mortgage are at historic lows. According to the Mortgage Bankers Association, the rate is at 5.98%.

"Back in the 1980s, rates were at 15% or 16%," says Bob Moulton of Americana Mortgage. Remember, interest rates don't automatically go down when the Fed cuts the prime rate. Instead, interest rates respond to overall market sentiment.

2: Wanted: Good Credit

Even after the rate-cutting binge the Fed has been on, the rates on a 30-year fixed mortgage went up. That's what makes this decline so newsworthy. So, if you have an adjustable rate mortgage, and you plan to stay in your home for at least 2 to 3 years, you may really benefit from refinancing.

Banks want to loan money to people with good credit. In fact, they're insisting on it according to Melissa Cohn of Manhattan Mortgage. For some lenders, that's a score of 680, while other lenders are only considering those with credit scores above 720. Banks are being more selective in terms of borrowers according to Moulton.

So, if you do have excellent credit, take advantage of the products out there. If you want to refinance, negotiate with your lender. You have leverage here, especially if you refinance with a lender who holds your original mortgage.

3: Jumbo loans

If you can, take out a home equity line of credit. You don't have to tap into it, but it's nice to have in an emergency.

A jumbo loan is a mortgage that's more than $417,000. As part of the economic stimulus bill signed by the president, the limit for these mortgages will be temporarily raised from to $729,750.

This has been a tough area because lenders are reluctant to back these loans. And if that becomes a reality, it means you may be able to get a lower interest rate on a jumbo loan.

4: There are bargains

Here's another bit of good news, if you bought a no-income jumbo loan and your credit score has improved and you're able to provide tax returns, you may be able to get a full-income jumbo loan, says Moulton. And that's cheaper and less risky than a no-income jumbo.

Home prices are the lowest they've been since 2004 according to a report by lender National City Corp. Price declines and improved affordability during the last three months of 2007.

So, if you've been on the sidelines, wondering whether to invest in this turbulent market, it's time to start doing your research. No one really knows when the market will hit bottom. It makes sense to thoroughly investigate the area you're interested in.

news source : http://money.cnn.com/2008/03/06/pf/saving/toptips/

Commodities strong as investors flee credit markets

A big week for commodities last week as yield and profit hungry financial investors continue to pile into the sector desperate for performance after the disasters of credit markets.

Gold set an historic high above $US975 on Friday, as speculators chased it higher, despite the late climb in the US dollar against the euro.

The driving force was more fears about the US economy and worries about financial stocks, including America's biggest insurer, AIG, which reported a big loss from credit derivatives, sparking worries about its health.

The late strength in the greenback saw traders take profits, while silver jumped to a 27-year peak near $US20 an ounce before falling. Palladium surged nearly 4 percent to its highest price in over six years.

Comex gold set a record for the third day in a row, hitting $US975.90 an ounce before falling to $US975 an ounce for the April contract. The spot month, March, finished at $971.10, both new record closes.

Gold has risen 16% this year on the top of 2007's 32% rise.

Silver rose to $US19.92 an ounce on Comex before falling to $19.808 for March spot and $US19.861 for April delivery.

Platinum hit a high of $US2,161 an ounce and was ended at $US2,158 for the spot month and last week's record of $US2,192.

Sugar rose to its highest level in 18 months after Federal Reserve Chairman Ben Bernanke urged the US to cut tariffs on imports of cane-based ethanol from Brazil, the world's largest producer.

Brazil used more than half of its sugar-cane crop to make ethanol for domestic consumption, instead of for human use.

The call came as oil prices returned to over the $US101 a barrel level.

The US imposes a tax of 54 US cents a gallon on ethanol from Brazil to protect the locally made ethanol, which is sourced from corn.

The tariff has allowed a number of big companies, such as Archer Daniel Midland and Cargill establish large ethanol businesses, while there's a fleet of smaller operation which are now struggling as corn prices hit record levels.

The tariff is due to finish at the end of this year but it's an election year, so you'd have to bet on it being extended if only for crass political gain and not any economic or business reason.

Sugar futures for May delivery finished at 14.69 US cents a pound in New York after touching 14.83 US cents, the highest for a most-active contract since August 2006.

Mr Bernanke told the US Congress on Thursday that he favoured open trade. "I think that allowing Brazilian ethanol, for example, will reduce costs.'' If commodity prices come down, including energy prices and raw-food prices, I would expect to see finished-food prices come down as well.''

Including Friday's gain, sugar prices have risen by more than 35% so far this year, thanks mainly to the activity of speculators and hedge and index funds.

News source : http://www.livenews.com.au/Articles/2008/03/02/Commodities_Strong

Reddy Ice Reports Fourth Quarter and Full Year 2007 Results

Revenues for the fourth quarter of 2007 were $64.3 million, compared to $59.3 million in the same quarter of 2006. The Company's loss from continuing operations was $6.7 million in the fourth quarter of 2007, compared to $5.0 million in the same quarter of 2006. The Company's net loss was $6.6 million in the fourth quarter of 2007 versus $4.9 million in 2006. Diluted net loss per share was $0.30 in the fourth quarter of 2007, compared to $0.23 in the fourth quarter of 2006. Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization, and the effects of certain other items, was $6.9 million in the fourth quarter of 2007, compared to $8.3 million in the fourth quarter of 2006. Adjusted EBITDA from continuing operations was $7.0 million in the fourth quarter of 2007 versus $7.9 million in the corresponding 2006 quarter. Available Cash for the fourth quarter of 2007 was $3.4 million, compared to $2.0 million in the fourth quarter of 2006. A discussion regarding the presentation of Adjusted EBITDA and Available Cash in this press release, including reconciliations of Adjusted EBITDA to EBITDA and net income and the calculation of Available Cash, is set forth below in the section titled, "SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL INFORMATION."

"We were challenged on several fronts in 2007, including unusually volatile weather in certain key months and increased cost pressures," commented Chairman and Chief Executive Officer William P. Brick. "Despite last year's difficulties, we enter 2008 with sound fundamentals and are well positioned to take advantage of opportunities, including further acquisitions and the continued implementation of our ongoing cost savings initiatives, as well as to respond to the challenges that we see on several fronts."

Revenues in the full year 2007 were $339.0 million, compared to $335.0 million in 2006. The Company's income from continuing operations was $9.4 million in 2007, compared to $15.9 million in 2006. Net income in 2007 was $10.3 million, compared to $14.7 million in 2006. Diluted net income per share was $0.47 in 2007, compared to $0.68 in 2006. Adjusted EBITDA was $83.8 million in 2007, compared to $88.7 million in 2006. Adjusted EBITDA from continuing operations was $82.7 million and $86.0 million in 2007 and 2006, respectively. Available Cash for the full year 2007 was $46.1 million, compared to $55.5 million in 2006.

In connection with its ongoing acquisition strategy, the Company completed three acquisitions during the fourth quarter of 2007, bringing the total number of acquisitions in 2007 to twenty. No acquisitions have been completed to date in 2008. These twenty acquisitions, together with the acquisition of one facility in the fourth quarter which had previously been leased, had an aggregate acquisition cost of approximately $27.2 million. Annual revenues and Adjusted EBITDA associated with these twenty acquisitions, together with the leased facility acquisition, are approximately $17.0 million and $4.9 million, respectively.

news source : http://www.foxbusiness.com/

Michigan AG: Predatory Lending, Credit Top Consumers' Concerns

Michigan’s Attorney General Mike Cox recently said in a press release that issues involving predatory lending and personal credit topped Michigan's list of consumer concerns last year.

Cox’s assertion is based on 85,700 consumer complaints received by his office in 2007.

Ranking first in the top ten list of consumer complaints is the heading of “credit and financial concerns,” which means a larger portion of Michigan's consumer complaints last year were related to predatory lending, credit reports, finance charges and identify theft.

news source : http://www.dsnews.com/view_story.cfm?id=2101

Ringing Up Big Charges For "Free" Tones

What's wrong with the ringtones that come with the phone?" CBS News investigative correspondent Sharyl Attkisson asked teenager Kelsi Dolan.
"They're Beethoven!" Kelsi said. So imagine Kelsi Dolan's excitement when she got a text message on her brand new phone. "It said, 'you've qualified for a free ringtone,' and they sent it to me three times," Kelsi said. "So I asked my Mom if I could get it and she said 'no.' So I texted 'no' back."
But saying "no" wasn't enough. A charge for $19.99 showed up on her phone bill. When her mom tried to get it removed, her phone company told her it was a monthly subscription and it couldn't be stopped.
"I didn't even want a refund for the first month because I figured, 'okay, ya got me.'" Debbie Dolan, Kelsi's mother, said. "Fine I'll take the $20 hit. But when you're gonna keep doing it and you won't do anything to stop it?!" It's called "cramming," Attkisson reports: Charges for services you didn't order and don't want that can be next to impossible to stop. And it's not just happening to kids. Last year, the FCC ordered millions of dollars returned to angry cell phone customers who said they were scammed. Rebecca Anderson did nothing more than search the Web for free ringtones. Then she, too, got hit by monthly charges.
"I did not agree to any charges. I did not download anything," Anderson said. An innocuous-looking website run by a company called Ringaza. Peel away the layers of Ringaza and you find a man named Scott Richter, better known to some as "the King of Spam."
A few years ago, Richter was one of the biggest e-mail spammers in the world. He even paid a $7 million settlement over it. And now he's in the ringtone business. He didn't respond to our repeated interview requests.

But carriers like Ringaza owe some of their success to carriers like Verizon Wireless ... which agree to add the charges to your regular phone bill. "If you believe that you've been charged in error or that you didn't subscribe, we'll credit that charge," said Verizon Wireless spokesman John Johnson. Johnson says if you suspect fraud, all you have to do is call. But it's not always that easy. "Verizon said that this was an outside carrier and they were not responsible for these charges," Anderson said. And in Dolan's case: "They told me they wouldn't take it off and they couldn't stop it.

---

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It turns out the big carriers are making money off the deal. "What is Verizon's share?" Attkisson asked Johnson. "What kind of cut do you get from these bills?" "I don't have a percentage," Johnson said. "Does 30 to 40 percent sound accurate?" she asked. "It doesn't sound unreasonable, but again I don't know," Johnson said. It looks to the customers like Verizon or other companies may not be very responsive because they're getting a cut of the action. "Well, sometimes it looks that way and that really concerns us," Johnson said. Since CBS News first began working on this story, Verizon decided to change its policy. Customers can now block those unwanted charges. And Kelsi is still looking for the right ring tone ... one that's really free.

news source : http://www.cbsnews.com/stories/2008/02/22/eveningnews/main3867197.shtml

Same Name, Wrong Credit Report

Viewers contact Seven On Your Side frequently, asking for help correcting mistakes on their credit reports. But one viewer's problem really caught our attention because the same mistake could happen to you. We discovered that court judgments can easily show up on the wrong person's credit report because they're filed using very little information.

Will the real Kenneth Kaliski please step forward? Said Kenneth Kaliski of Anderson, "I can't refinance this house until this judgment is removed."

A mix up with another Kenneth Kaliski stopped this Kenneth Kaliski from refinancing his home. Said Kaliski, "The mortgage lender said to me, do you know anything about this civil judgment? I said what civil judgment?"

Kaliski says he never lived at the address on the judgment and was not involved in the case, which he says he learned was a battle over a house payment.

Said Kaliski, "I have nothing to do with this. I'm an innocent victim here. This other person has a name similar to mine, its not me, they're a young couple."

So how did it get on his credit? Court clerks tell us credit bureaus routinely check court records for unpaid judgments.

Here's the problem. Court records are usually filed with just a name. Maybe an address, if your lucky. There's no social security number, no date of birth. If you have a common name, you could be out of luck.

Kaliski filed a dispute with the credit bureau TransUnion and it was removed from his credit. So we asked TransUnion how they verify who's who on judgments. The answer?

Steven Katz with TransUnion sent us this statement: "While TransUnion cannot discuss specifics of our verification process for security reasons, we do actively encourage consumers to check their three credit reports frequently to ensure that each appropriately reflects how they've managed their credit health over time. If consumers see an item on a report that they don't recognize, they should first consider going directly to the party reporting the item - the card issuer, mortgage lender, etc. If they still require assistance, they can file a dispute through TransUnion either directly via phone, online or in writing if they prefer. Details can be found at www.transunion.com."

Kaliski has now refinanced his home and believes court judgments should list more identifying information. Said Kaliski, "I believe there should be another resource for them to before entering a judgment onto somebody, have a more pertinent information on you than just a name and address."

But is that the answer? Court records are public. Court officials tell us more personal information could expose you to identity theft.

So for now, the answer may be to regularly check your credit to make sure Kenneth Kaliski's or any other judgments aren't on yours.

You can check your credit reports once a year for free. If your report lists any debt that is not yours, you can dispute it to have it removed. Credit reports usually come with dispute forms. Fill it out and send it back with any documentation showing the debt is not yours

news source : http://www.wspa.com/midatlantic/spa/

Asian stocks mostly lower on US holiday; Australia hit by ANZ provisions UPDATE

SINGAPORE (Thomson Financial) - (Updates with closing figures throughout)

Asian stocks closed mostly lower in subdued trade Monday with Wall Street closed for a public holiday and Australia falling after the third-largest bank Australia and New Zealand Banking Group said it would book losses on bad loans and exposure to a US bond insurer.

'We're in an environment where the market doesn't deal with disappointment very well,' said Justin Gallagher, head of sales trading at ABN Amro in Sydney.

'If you're in the financial sector you're probably under a little bit more scrutiny than some of the other sectors. That safe haven tag (the banks) have enjoyed for a long time is not appropriate at the moment.'

The S&P/ASX 200 closed down 0.9 percent at 5,558.4 and the All Ordinaries was down 0.8 percent at 5,634.0.

ANZ slid 6.1 percent to 22.46 Australian dollars, after Chief Executive Michael Smith said the bank was taking a 200 million US dollar one-off loss provision relating to a troubled US monoline bond insurer.

The Nikkei closed up 0.1 percent at 13,635.40, shedding most of its early gains. The broader Topix was down 0.1 percent at 1,332.99.

The Hang Seng closed down 1.6 percent at 23,759.25, ending a four day winning streak.

'There is still no evidence that the housing and financial sectors in the US are getting better, so investors will remain cautious,' said Francis Lun, general manager at Fulbright Securities.

Elsewhere, the Kuala Lumpur Composite closed down 1 percent at 1,412.83 and the Philippines Composite lost 0.6 percent to 3,163.25. The Singapore Straits Times closed down 0.2 percent at 3,083.34 and the Jakarta Index closed down 0.1 percent at 2,684.70.

India's Sensex provisionally closed down 0.4 percent at 18,048.17.

The Shanghai Composite bucked the downtrend, gaining 1.6 percent at 4,568.15.

The official Shanghai Securities Journal reported that Bank of China Investment Management Co and AXA SPDB Investment Managers have won approval to launch two new open-ended stock funds.

Separately, nine fund management firms were reportedly given the go-ahead to offer wealth management services to institutions.

The Kospi rose 0.1 percent to 1,696.24 and the Taiwanese Taiex was up 0.2 percent at 7,890.90.

ANZ slumps

The Dow Jones Industrial Average closed down 0.2 percent at 12,348.21 on Friday after data showed declines in consumer confidence and factory activity in the New York area.

Consumer electronics retailer Best Buy cut its outlook for 2008, citing weak customer traffic in January, adding to the gloom.

Investors are looking ahead to US consumer price data due this week as well as results from Wal-Mart, the world's biggest retailer.

A homebuilder survey due on Tuesday and housing starts due Wednesday are expected to show continued stress in the housing market.

Meanwhile, investors will keep a close eye on the bond insurance market after New York Governor Eliot Spitzer warned last week that the big monoline insurers need to take swift action to recapitalize and keep their crucial Triple A ratings.

ANZ is the first bank to disclose losses related to the recent downgrades of the bond insurers.

CEO Smith said the bank expects losses arising from the global credit crunch to wipe out profit growth this year, describing the crunch as 'a financial services bloodbath.'

The bank's revelations have caught the market by surprise, said ABN Amro's Gallagher.

'I guess the problem the market is having is that we've been led to believe that everything is okay and that certainly isn't the case. We're seeing evidence now that the bad and doubtful debt provisioning is a bit conservative,' he said.

'While they are saying there is no subprime exposure, that's almost irrelevant in the sense that there are other issues coming to the surface that are having a similar impact.'

ANZ said it's also exposed to other bad loans including 90 million Australian dollars lent to a commercial property group and 50 million dollars lent to a resources group. That brings its total potential losses to more than 360 million dollars.

Other Australian banks fell in sympathy with ANZ. Commonwealth Bank shed 5.1 percent to 44 dollars, National Australia Bank closed down 3.7 percent to 29.51 dollars and Westpac Banking Corp fell 3.7 percent to 22.50 dollars.

Toshiba rallies

In Tokyo, Toshiba closed up 5.7 percent at 829 yen, on reports it's considering abandoning its HD DVD format for high definition DVDs as it's losing the battle for market dominance to rival Sony Corp's Blu-ray format.

Analysts said the move would mark the end of a long battle over next-generation DVD formats between Toshiba and the Blu-ray camp led by Sony Corp and Matsushita Electric Industrial Co.

On Friday, Wal-Mart announced it would shift to exclusively selling movies on Blu-ray.

Weekend reports said losses for Toshiba could reach tens of billions of yen if it decides to pull out.

Sony closed up 1 percent at 4,900 yen.

TFN.newsdesk@thomson.com

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news source : http://www.forbes.com/markets/feeds/afx/2008/02/18/afx4665713.html

Beat the credit card blacklist

CREDIT-CARD companies are to start sharing information in the spring that will help them weed out prudent and therefore “unprofitable” customers for the first time.

Banks have been talking to industry bodies for several months about a new initiative that will enable them to identify consumers who clear their balances in full every month, or who constantly switch to 0% deals. Such customers make the banks no money because they do not pay punitive interest charges of up to 28%.

The disclosure follows Egg’s controversial decision to cancel the cards of 160,000 customers this month. It claimed they were “high risk” – in other words, they had missed payments or borrowed beyond their means.

However, hundreds of Egg customers came forward to say their cards had been cancelled even though they had never missed a payment, or cleared their balances in full every month.

This raised speculation that Egg, owned by America’s Citigroup, had cancelled the cards simply because it was not making money from them – and this will become much easier under the new initiative.

At present, the only information banks share includes when a card was issued, when it was closed, the balance and whether or not there have been any missed or late payments. From the spring, however, customers can be vetted by lenders to see if they pay off their balance in full each month, and make use of promotional 0% deals.

Card firms will also be able to see more signs of “high risk” behaviour such as withdrawing cash with a credit card, and big changes in a customer’s credit limit.

The sharing of this additional “behav-ioural” information will conclude a two-year project overseen by Apacs, the UK payments authority, to help lenders better judge risk.

However, consumer groups warn the move – the first change for more than a decade – could mean more customers are denied credit.

Steve Willey, head of credit cards at Moneysupermarket, the price-comparison site, said: “Though this information is meant to help lenders make more informed decisions, there is a danger they could use it to deny customers who aren’t necessarily a risk.”

Credit-card providers such as Barclaycard, HSBC and others have already tightened their lending criteria in response to the credit crunch by asking customers who don’t use their cards to justify why they need them.

Lloyds TSB charges some customers a £35 “inactivity fee” if they have not used their cards in 12 months.

Equifax said its latest survey, conducted just before the credit crunch, showed a 10% increase in the number of credit-card rejections over the past year.

Neil Munroe at the credit-reference firm said: “Minor misdemeanours, such as missing a telephone-bill deadline, which may have been overlooked in the past, may not be now.”

Although the “behvioural” information will be made available in the next couple of months, some industry insiders say it is already being circulated under a “principle of reciprocity”, where banks will pass information between each other if another bank is prepared to disclose a similar level of information.

Here we answer your questions.

What information is currently kept on me by credit reference agencies? The number of credit cards you’ve applied for, when they were issued, when they were closed, the balance and whether or not there were any missed or late payments.

They also hold information about how many bank accounts and loans you have, what your credit limit is, how many times your credit file has been checked by lenders, and any county-court judgments against you.

What information is kept on me by my bank? Banks have more detail about the way you use cards. This behavioural data includes how much of a balance you pay off each month, and how often you use your card.

So is that why Egg could throw out customers who had a good score from the credit reference agencies? Yes. There is no guarantee you will have a good credit score with your bank even if a credit-reference file labels you as low-risk. This is because lenders have their own rating system which uses “behavioural” information. It will also weigh information differently from credit-reference firms or other banks.

What will the new initiative mean in practice when I apply for a card? A lender you have never used before will now have a better idea of the way you use your card and could, for example, decide it does not want to offer a card to a customer who simply makes use of promotional 0% deals, or pays off their balance in full each month as this will not make them any profit.

Isn’t data sharing against the rules? No. Sandra Quinn of Apacs said: “When you sign up to a credit card, you are giving permission for the firm to pass on this information to other providers.”

Could I be thrown out? Banks could cancel your card even if you have a good credit rating on your file if they don’t like your behaviour. They do not have to explain why or give details of the score they hold for you.

Alternatively, a bank could reduce your credit limit if you do not use your card enough or if you hold a number of cards.

If your credit limit is reduced, a bank is unlikely to demand you pay off the balance above the new limit. Instead it will gradually reduce your limit as you reduce the balance on the card.

If your card is cancelled, the lender will stop allowing you to make additional purchases on the card. It will allow you to continue making payments to reduce the balance until it is settled.

FIRMS THAT MARK YOUR CARD

- Barclaycard has lower credit limits for those who have never held a card before.

- Barclaycard and HSBC customers who do not use their cards for more than a year may be contacted and asked if they wish to continue holding it.

- MBNA charges £10 if you have a positive balance on your card.

- Halifax will start to reduce your credit limit if you have lots of credit cards.

- Lloyds TSB has introduced a £35 annual fee for customers who have not used their card for 12 months.

- Coop customers have complained that their credit limits have been cut after making large purchases.

HOW TO CLEAN UP YOUR FILE

- You can check your file by contacting Callcredit, Equifax and Experian. It costs £2 for each file to be looked into.

- If you regularly take advantage of 0% deals, and then forget to cancel a card at the end of the promotional period, your lender may reduce your credit score.

- If you missed repayments on an account you have subsequently paid off, check this has been removed from your file. Lenders take the number of searches on your credit file into consideration.

- If you spot an error, write to the credit-reference agency to ask it to remove or change the entry, explaining why it is wrong and sending evidence. The agency has 28 days to act, and the entry is marked as ‘disputed’ in the meantime.

news source : http://business.timesonline.co.uk/tol/business/