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Somewhat Stronger Wage Gains Likely Later This Year

July 18, 2012 2:24 am

Private sector workers will likely see somewhat stronger wage increases overall in the coming months, according to the final second quarter Wage Trend Indicator™ (WTI) released recently by Bloomberg BNA, a leading publisher of specialized news and information.

The index rose to 98.67 (second quarter 1976 = 100) from 98.42 in the first quarter.

"The latest WTI indicates the pace of wage growth will strengthen but probably not dramatically so," economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA's WTI database, said. "We're still seeing mixed signals in the labor market, with small, steady job gains," Kobe said.

Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the Department of Labor's employment cost index (ECI). A sustained increase in the WTI forecasts greater pressure to raise private sector wages, while a sustained decline is predictive of a deceleration in the rate of wage increases.

Kobe said she expects annual wage gains overall in the private sector to reach 2.0 percent or more, compared with a 1.9 percent year-over-year increase in the first quarter, as measured by the ECI. The WTI does not forecast the magnitude of wage growth, only the direction.

Reflecting recent economic conditions, five of the WTI's seven components made positive contributions to the final second quarter reading, while two factors were negative.

Of the WTI's seven components, the five positive contributors to the final second quarter reading were forecasters' expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia; job losers as a share of the labor force and average hourly earnings of production and nonsupervisory workers, both reported by DOL; and the share of employers planning to hire production and service workers in the coming months and the proportion of employers reporting difficulty in filling professional and technical jobs, both tracked by Bloomberg BNA's quarterly employment outlook survey. The negative factors were industrial production, measured by the Federal Reserve Board, and the unemployment rate, reported by DOL.

Source: Bloomberg BNA

Published with permission from RISMedia.


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REALTORS Testify Broad Qualified Mortgage is Critical to Housing Finance System

July 18, 2012 2:24 am

The National Association of REALTORS® recently urged Congress and the Administration to develop a broadly defined Qualified Mortgage (QM) regulation.

The QM regulation is designed to ensure that lenders only make loans to borrowers who have the ability to repay the loan. If the QM regulation is too narrowly defined it could threaten the burgeoning housing and economic recovery by denying creditworthy borrowers access to safe, quality loan products, said NAR's 2012 Vice President and Liaison to Government Affairs Scott Louser in recent testimony before the U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit.

In his testimony, Louser said that current underwriting standards are already tight and are contributing to the slow housing market recovery. NAR believes that an unnecessarily narrow QM definition that covers only a modest proportion of loan products and underwriting standards and serves only a small proportion of borrowers would undermine prospects for a full housing recovery and threaten the redevelopment of a sound mortgage market.

Louser said that a narrowly defined QM would put many of today's loans and borrowers into the non-QM market, which means that lenders and investors would face a high risk of a steering or ability to pay violations. The increased risks would result in costlier loans that lack important consumer protections, he said.

To that end, NAR supports a QM definition that provides strong incentives for lenders to focus on making well-underwritten mortgages affordable and abundantly available to all creditworthy borrowers, which requires a legal safe harbor for lenders and investors and a clear, objective definition of the QM that is not unduly restrictive.

Source: National Association of REALTORS®

Published with permission from RISMedia.


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Back-to-School Spend Means Good News for Economy

July 17, 2012 2:22 am

According to the results of the PriceGrabber® 2012 Back-to-School Shopping Forecast survey, 63 percent of consumers plan to spend up to $500 this back-to-school shopping season (compared to 48 percent in 2011). Twenty percent of respondents plan to spend between $500 and $1,000 and 17 percent of shoppers said they don't have a back-to-school shopping budget this year.

In June, PriceGrabber released its initial back-to-school survey results indicating nearly half (46 percent) of consumers are planning to spend more this back-to-school shopping season than in 2011. Conducted from May 22 to June 5, 2012, the survey includes responses from 4,450 U.S. online shopping consumers, with 1,509 of the respondents planning to shop this back-to-school season.

Although tech product purchases are on the rise, consumers are once again putting basic school clothing and supplies at the top of their back-to-school shopping lists. When asked to select all of the items they plan to purchase this back-to-school shopping season, 83 percent selected general school supplies such as notebooks, binders, and pencils. Seventy-nine percent of consumers plan to send their children back to school in style with new clothing; 51 percent said they plan to purchase a backpack or tote bag; and 50 percent of shoppers said they plan to purchase books.

This year, consumers are branching out, setting their sights on laptops and tablets for tech-savvy students heading back to school. According to survey results, 40 percent of respondents plan to purchase a tech-type item as part of their back-to-school shopping. When those respondents were asked to select all of the types of tech-related products they plan to purchase, 50 percent indicated a new laptop splurge and 49 percent selected a tablet computer. Twenty-eight percent of shoppers indicated they plan to purchase a smartphone and 10 percent selected a desktop computer.

Many savvy consumers are utilizing the Internet this year to take advantage of the latest and greatest back-to-school shopping deals coupled with in-store purchases; 79 percent indicated they plan to shop online compared to 69 percent in 2011.

Source: PriceGrabber.com

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If a Mom Takes Time for Herself When Everyone Else is Asleep, Does it Still Count?

July 17, 2012 2:22 am

The paradoxical results of a national survey regarding a mom's quest for time for herself reveal that while the majority of busy mothers (87.8 percent) are still carving out time for themselves on a regular basis, well over half (58.8 percent) of these women are finding that time either late at night or early in the morning. According to survey sponsors mom.me, this raises the question of how much sleep and other evening rituals are sacrificed in order for moms to find some “me-time.”

"We commissioned this survey because we want to understand what women are doing when they aren't being a mom – because our editorial team is trying to speak to the woman inside the mom," explains Anne-Marie O'Neill, editorial director at mom.me. "While it is great to know that so many women are making time for themselves, by digging deeper we find that it is mostly at a time of the day when you can't leave the house and your friends are asleep."

Taking me-time late at night can also suggest going out, but of those polled, very few (3.8 percent) actually did. Additional results reveal that most women are spending their me-time alone (81.4 percent), with about a third (30.8 percent) reading a book, and others watching TV (19.2 percent) or spending time online (11.8 percent).

"We can extrapolate that moms could be cutting into their much-needed rest in order to carve out me-time. We hope that this survey can help instigate a conversation among moms about whether our assumption is true, and if so, how to change it," says Gail Berman, co-owner and founding partner of BermanBraun, the parent company of mom.me. "We built into mom.me a feature called 'Ask Other Moms' and hope to leverage this as well as our community on Facebook to drive this discussion."

Source: mom.me

Published with permission from RISMedia.


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Fannie Mae Announces Foreclosure Prevention Program

July 17, 2012 2:22 am

Fannie Mae launched Know Your Options Customer Care, a customer engagement strategy and training program for servicers aimed at preventing foreclosures by developing consultative relationships with struggling homeowners. Under the program, Fannie Mae personnel conduct trainings for servicers' call center employees, provide scripting for interactions with homeowners and help implement ongoing quality control measures.

Fannie Mae has been developing the Know Your Options Customer Care program for approximately one year and is already implementing it with 18 of its largest servicers. One of the key elements of the program is creating a single point of contact in the call center for each customer to ensure that rapport is built with the homeowner, regular contact is maintained through the loss mitigation process, and that foreclosure prevention options are properly presented and pursued. Servicers that have participated in the program have typically seen 20-30 percent increases in workouts. The training is now being made available through online webinars and program materials so all servicers may participate and implement Know Your Options Customer Care. The program is available free of charge to servicers.

In addition to Know Your Options Customer Care, Fannie Mae reports taking a number of steps to help prevent foreclosures, including:
  • Launching the KnowYourOptions.com website to provide educational tools and resources for homeowners
  • Opening 12 Mortgage Help Centers in areas hardest hit by the housing crisis to provide individual assistance to Fannie Mae homeowners
  • Implementing the Servicing Alignment Initiative with the Federal Housing Finance Agency and Freddie Mac to require early outreach by servicers to struggling homeowners
  • Requiring servicers to reduce timelines for short sales
  • Developing and implementing the Servicing Total Achievement and Rewards (STAR) program to evaluate and motivate servicers' performance in helping homeowners
  • For more information, visit knowyouroptions.com.
Source: Fannie Mae

Published with permission from RISMedia.


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How to Protect Yourself from Tornadoes

July 16, 2012 2:22 am

Most people take fire safety seriously and have fire extinguishers handy and escape routes pre-planned should a blaze threaten their home. Yet while tornadoes and the violent storms surrounding them are far more common than homeowners realize, many homeowners don't take the necessary steps to prepare for these destructive storms. According to the Hanover Insurance Group, on average, some 1200 tornadoes appear each year in the U.S.

While tornadoes can occur in the United States during any month, weather conditions produce a peak season that runs through October. In areas of the country subject to the harshest storms, winds can far exceed those of even the strongest hurricanes, averaging between 110-205 mph.

"Tornadoes can form in every state east of the Rockies," explains Mark Desrochers, president of The Hanover's personal lines business. "Preparing for a tornado is a practical safety precaution that should be taken by all households in these states. This also enables homeowners to recover quicker."

To help prepare for a tornado and respond in the event one strikes, The Hanover suggests doing the following:
  • Make an action plan. Prepare in advance so that when a tornado watch is issued, you already have an existing plan of action. Unlike hurricanes, which tend to be closely monitored for days, tornadoes can spring up quickly. In many cases, you will have to take shelter within minutes in your own home or a below-ground storm shelter. Experts advise never trying to outrun a tornado by car. Instead, move to the basement or to an inner windowless room or interior hall. Protect your head and neck with your arms and hands. Ensure everyone knows the action plan.
  • Create a survival kit. After a storm, it may be impossible to use roads for several days. You may be forced to live in your home for a while even if it is wrecked or you're without electricity and water. So, it's wise to assemble a survival kit containing a week's worth of non-perishable food, bottled water, paper plates and cups, eating utensils, medicines, first aid handbook and bandages, blanket, a radio, batteries, flashlight, soap and toiletries, bleach for disinfecting, and spare clothing. Store the kit in the basement or other safe area.
  • Have debris removal tools on-hand. There may be a significant amount of debris following a tornado that will have to be moved just to exit your structure. Some of this will be splintered wood and glass. With this in mind, store helpful items - including heavy soled shoes, gloves, eye protection and a small shovel to safely move debris. This should be kept in the same area as your survival kit.
  • Create a home inventory. Tornadoes can destroy your home and its contents, making it difficult to document your property losses, which can impede your recovery. With a proper home inventory you will have an acceptable means of documenting ownership and value in the event of a claim. Photograph or shoot video of your entire home or business, including the contents of each room, and store these with a written inventory and serial numbers in a fireproof safe or safe deposit box.
  • Create and share contact info. All family members should have personal and business contact information (phone/email) for quick communications. Also ensure you have your agent and insurer's claims office numbers stored in your mobile phone. After a storm, cell service may be more accessible than local land lines. Have important numbers on hand to help expedite your recovery after the storm. It's important to keep your cell phone charged in advance, as power may be out for days.
  • Wait for official notice before returning home. If there is an evacuation after a storm, wait for official notice that it is safe to return to your home. When returning to your home, be cautious when entering a damaged structure. Stay away from damaged or weakened walls.
  • Take photographs and/or video documenting claim damage. Should your home or business be damaged in a tornado, take pictures of the entire scene and document all damage - provided it is safe. Try not to remove items until an insurance adjuster has had an opportunity to visit the property and assess the damage.
Source: The Hanover Insurance Group, Inc.

Published with permission from RISMedia.


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New Rental Assistance Proposal Could Help Low-income Families

July 16, 2012 2:22 am

The Center on Budget and Policy Priorities will hold a conference call briefing on Tuesday, July 17 at 11:00 a.m. (ET) to discuss a new rental assistance proposal that has the potential to make housing affordable for 1.2 million low-income renter households.

Barbara Sard, vice president for Housing Policy and former senior advisor on Rental Assistance to Housing and Urban Development Secretary Shaun Donovan, and Will Fischer, senior policy analyst, will discuss the new proposal — a federal renters' tax credit — that could help reduce rents for over a million poor families at a modest cost and advance a more balanced housing policy.

The new proposal, which could be considered as part of a larger tax reform proposal to improve the efficiency of the tax code and help reduce deficits, would complement existing programs to help address the growing need for rental assistance. Under the proposal, states would administer and implement rental assistance credits through a public-private partnership with property owners and banks. States could award families credit certificates to help them rent a modest unit of their choice or could allocate credits to owners or lenders to make units affordable to low-income families. The proposal has the potential to reduce rents by an average of $400 and lift 250,000 families out of poverty.

After initial presentations, the panelists will field questions. The call will be moderated by CBPP President Robert Greenstein.

Source: Center on Budget and Policy Priorities

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Data Shows Negative Equity Decreases in First Quarter Of 2012

July 16, 2012 2:22 am

Recently released data shows that 11.4 million, or 23.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2012. This is down from 12.1 million properties, or 25.2 percent, in the fourth quarter of 2011. According to the report from information and analytics provider, CoreLogic, an additional 2.3 million borrowers had less than 5 percent equity, referred to as near-negative equity, in the first quarter.

Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

Together, negative equity and near-negative equity mortgages accounted for 28.5 percent of all residential properties with a mortgage nationwide in the first quarter, down from 30.1 percent in the fourth quarter of 2011. More than 700,000 households regained a positive equity position in the first quarter of 2012. Nationally, negative equity decreased from $742 billion in the fourth quarter of 2011 to $691 billion in the first quarter, a fall of $51 billion in large part due to an improvement in house price levels.

"In the first quarter of 2012, rebounding home prices, a healthier balance of real estate supply and demand, and a slowing share of distressed sales activity helped to reduce the negative equity share," explains Mark Fleming, chief economist for CoreLogic. "This is a meaningful improvement that is driven by quickly improving outlooks in some of the hardest hit markets. Reducing the number of underwater households is an important step toward reducing future mortgage default risk."

Further highlights from the first quarter of 2012 include:
  • Of the 11.4 million upside-down borrowers, there are 6.9 million first liens without home equity loans. This group of borrowers has an average mortgage balance of $212,000 and is underwater by an average of $47,000. For all first-lien-only borrowers, the negative equity share was 19 percent while 42 percent of all first-lien-only borrowers had a loan-to-value (LTV) ratio of 80 percent or higher.
  • The remaining 4.5 million upside-down borrowers had both first and second liens. The average mortgage balance for this group was $299,000, and they were upside-down by an average of $82,000. The negative equity share for all first-lien borrowers with home equity loans was 39 percent, more than twice the share for all first-lien-only borrowers. More than 60 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
  • Nearly 17 million borrowers were between 80 percent and 125 percent LTV in the first quarter of 2012 and, purely from an LTV perspective, eligible for the Home Affordable Refinance Program (HARP) under the original requirements first introduced in March 2009. The removal of the 125 percent LTV cap via HARP 2.0 means that more than 22 million borrowers are currently eligible for HARP 2.0 when just considering LTV alone.
  • The low end of the market is where the bulk of the negative equity is concentrated. For example, for low-to-mid value homes valued at less than $200,000, the negative equity share is 31 percent for borrowers, almost twice the 15.9 percent for borrowers with home values greater than $200,000.
  • As of the first quarter of 2012, there were 1.9 million borrowers who were only 5 percent underwater. If home prices continue increasing over the next year, these borrowers could move out of a negative equity position.
Source: CoreLogic

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Survey Reveals Waterside Code of Conduct

July 13, 2012 2:18 am

Many of us seem to forget our manners when it comes to lounging by the pool or spending the day at the beach. In fact, according to the result of TripAdvisor’s annual beach and pool etiquette survey of more than 1,400 U.S. travelers, 83 percent of respondents believe people often violate some form of beach or pool etiquette, up from 74 percent in 2011. Thirty-one percent have asked a stranger to stop behaving rudely at the beach or pool, up from 26 percent last year.

According to the survey, the top three beach violations are: blasting loud music (18 percent); people not picking up after their dogs (11 percent); and beach chair hogging (9 percent). Top pool violations are: pool chair hogging (29 percent); blasting loud music (11 percent); and smoking (10 percent).
Other interesting survey results include:
  • 84 percent get agitated when others save beach or pool chairs by leaving belongings on them.
  • 37 percent maintain there should be a 30-minute limit on seating being saved, while a further 30 percent will tolerate up to one hour – and just 14 percent think chair hogging for any longer than that is acceptable.
  • 19 percent maintain that saving chairs should not be allowed for any time period.
  • The closest acceptable distance to sit next to another stranger at a crowded beach is three feet, according to 27 percent – while a further 26 percent set a boundary of six feet, and 15 percent say four feet meets their comfort levels.
  • On non-crowded sands, 34 percent consider 20 feet to be the closest acceptable distance to sit next to a fellow beach-goer, while 24 percent say seven to ten feet is appropriate, and 18 percent say 11 to 14 feet.
  • 89 percent think smoking at the pool should be prohibited.
  • 69 percent think that smoking at the beach should not be allowed.
  • 35 percent consider it a breach of etiquette not to rinse off before entering the pool – although 80 percent confess to not always doing so.
Source: TripAdvisor

Published with permission from RISMedia.


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Bankrate: Mortgage Rates Hit New Record Lows

July 13, 2012 2:18 am

Mortgage rates moved lower once again, with the average 30-year fixed mortgage rate setting a new record low of 3.79 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.40 discount and origination points.

The average 15-year fixed mortgage rate fell to 3.05 percent, while the jumbo 30-year fixed mortgage ticked lower to 4.44 percent, both record lows. Adjustable mortgage rates were mixed, with the average 3/1 ARM rate inching higher to 3.08 percent while the rate on the popular 5/1 adjustable dipped to a new record low of 2.95 percent.

A disappointing jobs report raised further concerns about the U.S. economy and helped push mortgage rates to the 10th new record low in the past 12 weeks. The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 3.79 percent, the monthly payment for the same size loan would be $930.78, a difference of nearly $311 per month for anyone refinancing now.

Survey Results

  • 30-year fixed: 3.79% -- down from 3.87% last week (avg. points: 0.40)
  • 15-year fixed: 3.05% -- down from 3.13% last week (avg. points: 0.35)
  • 5/1 ARM: 2.95% -- down from 2.96% last week (avg. points: 0.35)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

Source: Bankrate

Published with permission from RISMedia.


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