Credit Card Reform

Despite credit card reforms that are scheduled to take place in 2010, Congress has passed a new reform bill that addresses many unfair and deceptive practices perpetrated by credit card companies. Some of the key components:

Creditors cannot increase the annual percentage rate (APR) during the first 12 months of opening up an account.

Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes.

Credit card issuers are prohibited from charging a finance charge based on double billing cycle methods.

Creditors are required to provide a grace period for payments.

Creditors are prohibited from opening a credit card account for any college student who does not have any verifiable annual gross income or already maintains a credit card account with that creditor.

Not surprisingly, credit card companies are not happy with having to show some accountability. They much prefer their current carte blanche status. But don't cry for them. They've already laid out their new plans for going after those with great credit by adding or increasing annual fees, cutting or eliminating cash back and reward programs, and charging interest immediately on a purchase instead of allowing a grace period. I mean, why should credit card companies have to take a hit after decades of abusive practices?

Notarizing Documents In A Foreign Language

I recently received a troubling phone call from an individual who was trying to get a notarization done. The document was written in Spanish. She went to UPS and was told that they could not notarize a document in another language. She went to her bank and was told the same thing. Unfortunately, neither UPS nor her bank have even a basic understanding of a notarization. You don't notarize a document, you notarize a signature. A notary's duty is to identify the signer and witness the signature. The contents of the document is irrelevant as is the language of the document. The notary has no responsibility to understand the contents and there's nothing in the Michigan Statute (I'd guess nothing in any state's statute) that indicates that a document must be in English. For all we care, the document could be written in Klingon. Does the signer understand the document? Great, don't play lawyer. Add the appropriate loose certificate, jurat or acknowledgment, identify the signer, witness the signature, and you've done your job.

More Well Spent Bailout Money

Bailout recipients have once again found an interesting way to spend our money. Over $10 million was spent in the first three months of this year on political lobbyists aimed at blocking executive pay limits and tougher financial regulations. Is that really how our taxpayer money should be spent? The poor decisions and arrogance of these companies just continues to amaze.

Just A Sign Of What We Deal With In Detroit

Even the great leaders (cough cough) of Detroit can't meet their mortgage responsibilities. And this guy's running for mayor:

Detroit Councilman packs up and walks away from mortgage

We Bid Farewell To Another Tax Season

Can We Finally Put Winter Behind Us?

Bank Stocks Continue To Rebound

Another strong day for the stock market, again led by Wells Fargo and other lenders. Wells Fargo expects record 1st quarter profits, and Bank of America, JP Morgan Chase, and Citigroup all saw strong gains.

The New York Times also reported that federal officials examining the banking industry believe the industry is in better shape than many people believe. Great. When do we get our bailout money back?

There's No Limit To What The Bottomfeeders Will Do

I suppose it was inevitable. The attorney general has announced that it's investigating thousands of loan modification scams. Many of the cases involve companies that mislead borrowers into thinking they are taking advantage of the government loan modification plans when in actuality they are not.

The FTC has sent warning letters to 71 companies running suspicious advertisements.

My Life, My Card?

Despite recent advertising from credit card companies telling us how helpful they are, many consumers have been blindsided by some of their nasty tactics. This includes:

Arbitrarily raising interest & fees regardless of credit worthiness or standing

Canceling cards without explanation

Reducing customers' credit limits without warning

Canceling cards that haven't been recently used

Penalizing customers who asked for lower interest rates by lowering their credit limits or freezing accounts (how evil is THAT?)

The new credit card law addresses much of this, but the law won't take effect until July of 2010.

Read more: The Credit Card Companies Are Not Your Friend

A Little More Good News

Pending home sales took a surprising jump in February of 2.1%. Though only a modest increase, the positive news was unexpected and was led by a 14.5% increase in the Midwest.

Congress Is Outraged! Outraged I Tell You!

But while our politicians trot out one by one to voice their disdain over bonuses paid to executives of firms that took bailout money, they apparently have no problem taking campaign contributions from these same firms. Hypocrisy? You betcha.

MSN Report

Home Prices Rise In January

More good news this week as average home prices rose by 1.7% in January, the first monthly increase in a year. Great Lakes states led the way with a 3.9% price increase.

Stock Market Has Its Best Day This Year

The Dow rose by almost 500 points today on the strength of financial stocks. Today's strong showing came on the heels of an unexpected rise in existing home sales and Treasury Secretary Geithner's announcement in the Wall Street Journal that the government will offer a plan to encourage private investors to help buy banks' toxic assets. JP Morgan Chase, Bank of America, and Citigroup all saw strong gains.

Detroit Rent City

Got a buck in your piggy bank? Then you can buy a home in Detroit. Investors worldwide have been scooping up Detroit homes in bulk for a fraction of their value; many under $10,000 and some for as low as a dollar. Detroit has been targeted due to a large volume of single home dwellings and home values that have plummeted much more than other areas in the country. The effect of these large scale investor purchases is that Detroit now has the lowest home ownership rate of the 20 largest cities in the country. The positive of all of this is that many previously run down homes have been repaired and neighborhoods have been revitalized. The negative is that non-foreclosed homes can't sell and owners have seen their home values sink.

In Like A Lion Out Like A Lion

Old Man Winter isn't ready to leave quite yet. He's just creating havoc in a different way. The snow, sleet, and ice has been replaced by the constant pounding of rain, wind, and flooding. I snapped these photos today near a city appropriately called Luna Pier. Only this isn't the pier.

Congratulations PennyMac

Things have been great for PennyMac. PennyMac was formed by former Countrywide president Leo Gerald and several ex-Countrywide executives. Their business model: buy foreclosures for pennies on the dollar and then resell them. Nice gig if you can get it. Never mind that most analysts believe it was Mr. Gerald and company that in large part contributed to the subprime mess and that many of these homes were lost due to this crew. In fact John Lawrence, head of loan servicing for PennyMac is practically gloating. Business has been "off the charts good" he gleefully declares. Others are not so gleeful. As Gail Collins of the New York Times notes in her column, “It’s like Jeffrey Dahmer selling body parts to a clinic.”

So congratulations on your Huffington Post "Creep of the Week" award. Momma must be so proud.

Details Begin To Emerge On Mortgage Rescue Plan

The program hopes to assist up to 9 million Americans in lowering their mortgage payments. The plan offers refinancing options for homeowners who have less than 20% equity in their home or owe more than their home is worth and also gives at risk homeowners an opportunity to modify their loan terms in an attempt to lower their monthly payments. Only homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac are eligible and borrowers must be current on their loan. The program runs through June 2010.

The Washington Post has a simple two page article that asks and answers basic questions involving the plan.

The full set of guidelines can be downloaded in PDF form HERE.

Your Secret Credit Score

It's your FICO score, but you're no longer allowed to see it. Although the FICO score is used by 90% of the largest U.S. lenders in determining whether or not you qualify for a mortgage, Experian has decided that your score is none of your business. Experian has backed out of its agreement with myFICO.com, which had been the only place where consumers could get their true FICO scores (other scores, such as the Experian's PLUS or VantageScore are not true FICO scores and use different formulas). Of course lenders still have full access to your FICO score. How can a score that lenders use extensively to evaluate credit worthiness be kept from consumers? At a time when it already seems like a Herculean task to even qualify for a mortgage, this is a slap in the face to consumers trying to stay afloat.

Want to call Experian corporate headquarters and let them know what you think? Here you go:

714-830-7000