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Personal Finance News 12/2010

Mortgage applications dropped last week (AP)
AP - Applications for mortgages tumbled last week, led by a sharp decline in refinancing as rates ticked up.

5 Dates to Circle in December (The Motley Fool)
The Motley Fool - December is typically a sleepy month for financial news, especially as traders and boardrooms make the most of the holiday season. The calendar never sleeps, though. Here are a few of the days that I plan to approach with eyes wide open this month.

SEC and several banks discuss to end mortgage deal probe: report (Reuters)
Reuters - U.S. securities regulators are in preliminary talks with several banks to resolve probes involving sales of complex mortgage bond deals that led to the financial crisis, the Wall Street Journal said, citing people familiar with the matter.

Toll Bros posts profit, but contracts slip (Reuters)
Reuters - Toll Brothers posted a quarterly profit on Thursday, helped mainly by cost cuts and an income tax benefit, and shares of the largest U.S. luxury builder rose more than 1 percent.

Mortgage rates rise to 4.46 pct. as economy lifts (AP)
AP - Rates on fixed mortgages edged up again this week after hitting their lowest level in decades last month.

5 Money Lessons Every Woman Should Learn (U.S. News & World Report)
U.S. News & World Report - Manisha Thakor, co-author of On My Own Two Feet: A Modern Girl's Guide to Personal Finance, wants you to be financially secure. Specifically, she wants all women, and not just the high net-worth ones catered to by the financial services industry, to have access to the same personal finance lessons that have helped her earn security at age 40. That's why she developed a new online course, Money Rules, designed to help women get on top of their money. I recently spoke with Thakor about money myths and facts, and five money lessons every woman should learn. Excerpts:

How to Examine the Personal Part of Your Finances (U.S. News & World Report)
U.S. News & World Report - You would immediately think I'm wasting your time with obvious advice if I told you to consider your own situation when it comes to financial planning. Yet, too many people seem to forget the "me" in the whole retirement equation. Sure, we already know the basics like moving to safer assets as we approach retirement. But we also need to balance out other risks in our lives through our investments. Here are a few examples of when you need to adjust your investment choices to your individual situation.

Summary Box: Mortgage rates rise to 4.46 percent (AP)
AP - RATES RISE: The average rate for a 30-year loan reached 4.46 percent, up from 4.40 percent last week, Freddie Mac said. The 15-year loan also rose, to 3.81 percent from 3.77 percent.

Lawmaker calls for end to Obama mortgage aid program (Reuters)
Reuters - The incoming head of a House of Representatives panel overseeing the Obama White House on Thursday called for pulling the plug on a widely criticized program to help struggling borrowers stay in their homes.

Mortgage interest deduction: Can US debt panel keep it on the chopping block? (The Christian Science Monitor)
The Christian Science Monitor - Most people getting ready to buy a home have done the drill, totaling their monthly payments to see if they could afford to borrow enough money to buy the house they want.

NH banking chief strikes deal to retire (AP)
AP - New Hampshire Banking Commissioner Peter Hildreth agreed Thursday to retire Jan. 1 rather than risk being fired for not doing enough to stop a mortgage firm from swindling investors.

ETFs Limit IPOs and Increase Risk? Not So Fast! (The Motley Fool)
The Motley Fool - Last month, the Kauffman Foundation published an 85-page report that reached troubling conclusions about exchange-traded funds (ETFs). According to its authors, these popular investment vehicles prevent startups from easily tapping the capital markets, while increasing systemic risk.

Pa. lawsuit: Firm let nonlawyers file foreclosures (AP)
AP - A Philadelphia law firm used nonlawyers to file untold numbers of mortgage foreclosures across the state and fraudulently collected attorney's fees that caused people to lose their homes in cases which should be legally nullified, a Pittsburgh lawyer claims in a lawsuit.

Bill blocked to let upper-income tax cuts expire (AP)
AP - Senate Republicans have blocked legislation allowing taxes to rise on upper income taxpayers on Jan. 1.

Senate showdown may pave way for year-end tax deal (AP)
AP - Senate Republicans derailed legislation Saturday to extend expiring tax cuts at all but the highest income levels in a political showdown that paradoxically clears a path for a compromise with the White House on steps to boost the economy.

Michael Glimcher: Musings of a REIT Maven (BusinessWeek)
BusinessWeek - Investor appetite for income has made commercial real estate investment trusts, many of which own regional shopping malls, among the hottest stocks this year. As of Oct. 29, Glimcher Realty Trust racked up the biggest return of the bunch, rising 183.4 percent to top Bloomberg's ranking of commercial REITs. Glimcher, which started out as a lumber and building-supply company in 1959, has grown into a publicly traded, $741 million company that owns 27 properties, mostly regional malls, across 14 states. On Dec. ...

3 Things Your Financial Pro Will Never Tell You (The Motley Fool)
The Motley Fool - This?: "Retire at 45? Sure! Let's make it happen!"Or this?: "There are two ways to realistically achieve your financial goal: Increase your annual savings 25% (cutting your spending, downsizing, or other means), or add five to 10 years to your time frame."

Rising Stars Buy Recommendation: Costco (The Motley Fool)
The Motley Fool - Believe it or not, a warehouse retailer with fluorescent lights and concrete floors has social responsibility at its heart. This month's pick for my socially responsible portfolio is Costco (Nasdaq: COST - News).

Teach Your Kid a Lesson in Investing (U.S. News & World Report)
U.S. News & World Report - This holiday season, consider giving your kids a head start on their financial future with a lesson in personal finance. By opening up an investment account on their behalf--or even just buying them a share or two of stock--you can help them get started investing at an early age. It's also a good opportunity to educate your kids about personal finance and help them begin saving, whether it's for their first car, college, or even retirement.

Obama, GOP reach deal to extend tax cuts (AP)
AP - Brushing past Democratic opposition, President Barack Obama announced agreement with Republicans Monday night on a plan to extend expiring income tax cuts for all Americans, renew jobless benefits for the long-term unemployed and grant a one-year reduction in Social Security taxes.

What Germans Think About the Euro Crisis (The Motley Fool)
The Motley Fool - Yesterday, the financial headlines in Germany were, one after the other:

Why You Should Love "Unstable" Investments (The Motley Fool)
The Motley Fool - Sure, you can find plenty of legitimate criticisms of the S&P 500 index. But don't kick it out of your portfolio solely because you think it's unstable. That very quality actually makes it more attractive.

AP - Consumer credit up by largest amount in more than 2 years, led by rise in student loans.

4 sentenced in $3 million mortgage fraud scheme (AP)
AP - Federal prosecutors say four people have been sentenced for taking part in a $3 million mortgage fraud scheme.

The Risks of Contributing Too Much to a 401(k) or IRA (U.S. News & World Report)
U.S. News & World Report - There are many ways to save for retirement. You can open a Roth IRA with a financial institution, contribute to a 401(k) or Thrift Savings Plan account through your employer, make contributions to a self-employed retirement plan, or use some combination of these accounts. Having several retirement accounts to choose from offers you flexibility when planning your retirement, but it can also open the door for making honest mistakes such as exceeding the annual contribution limits. Once you reach your contribution limits, you must stop making deposits into the account. ...

Consumer credit jumps by most in more than 2 years (AP)
AP - Consumer borrowing rose in October by the largest amount in more than two years, led by a big rise in the category that includes student loans.

October consumer credit up $3.4 billion (Reuters)
Reuters - WASHINGTON (Reuters) -- Total Uconsumer credit rose $3.4 billion in October on rising student loans, which offset a decline in revolving credit, including credit cards, Federal Reserve data showed on Tuesday.

House Dem leaders not persuaded by Obama on taxes (AP)
AP - House Democratic leaders have not been persuaded by President Barack Obama's arguments in favor of a tax deal he made with Republicans that would extend income tax rates for all Americans, including the wealthy.

Retirees Largely Shut Out of Obama Tax Compromise (U.S. News & World Report)
U.S. News & World Report - The tax deal reached between President Obama and Republican leaders is great for wealthy Americans (no tax increases and reduced estate taxes). Businesses would get some nice investment tax breaks to encourage them to expand and hire more people. Working people get a year-long, $120 billion benefit through lower Social Security taxes. Millions of people who have been out of work for a long time would continue to receive long-term unemployment benefits. Parents would receive education and tax breaks. Low-income citizens would enjoy an expanded earned income tax credit.

Summary Box: October consumer credit posts gain (AP)
AP - CONSUMER CREDIT: Consumer borrowing rose 1.7 percent in October, the biggest gain since July 2008.

MBIA sues Morgan Stanley over mortgage securities (Reuters)
Reuters - Bond insurer MBIA Inc accused Morgan Stanley in a lawsuit of misrepresenting the quality of mortgage backed securities insured for over $223 million.

Fannie, Freddie in talks with government on mortgages: report (Reuters)
Reuters - Fannie Mae and Freddie Mac are in discussions with U.S. government officials to join government programs aimed at reducing mortgage balances where borrowers owe more than the values of their homes, the Wall Street Journal reported on Tuesday citing people familiar with the situation.

Are You Fouling Up Your 401(k)? (The Motley Fool)
The Motley Fool - Many people rely on their 401(k) account as a safe, trustworthy ticket to a stable retirement. Unfortunately, several common mistakes could sabotage your 401(k)'s performance over the long haul.

Mortgage applications fell last week (AP)
AP - Applications for mortgages slipped last week, as a drop in refinance activity offset a gain in purchase applications.

Roth IRA vs. 529: Best Way to Save for College, Retirement (U.S. News & World Report)
U.S. News & World Report - Parents who want to save money for their own retirement and save money for their children's college expenses have many complicated choices. One of the most basic and important is where to invest the money.

You Need Private Student Loans Like You Need a Hole in the Head (U.S. News & World Report)
U.S. News & World Report - Need money for college? Go for federal student aid. If you have to borrow money for college, federal student loans are your best bet.

Group accuses banks of violating gov lending rules (AP)
AP - A national housing and consumer rights group alleged in a series of complaints to the U.S. Department of Housing and Urban Development that Bank of the West, MetLife Bank N.A, Paramount Residential Mortgage Group Inc. and other lenders are unjustly denying government-backed loans to borrowers with low credit scores.

How to Avoid a Bidding War on Your Next Home Purchase (U.S. News & World Report)
U.S. News & World Report - The housing market is making a comeback and mortgage interest rates are low, but there's a new challenge for home buyers. Competition from other buyers is on the rise as more people are taking advantage of the situation. This is driving up the home prices as well as shutting potential buyers out of the homes they want.

3 Reasons to Pay Off Debt Before Saving for Retirement (U.S. News & World Report)
U.S. News & World Report - When it comes to saving for retirement, the earlier you get started, the better. With each passing year, the amount you need to save annually for a comfortable retirement increases. And with an economy that is showing no signs of improvement, planning for your future has become more important than ever.

PrimeLending paying $2M in alleged discrimination (AP)
AP - The government says mortgage lender PrimeLending has agreed to pay $2 million to resolve allegations of discriminating against African-American borrowers by charging them higher interest rates on home loans than white customers with similar financial situations.

AP IMPACT: Caught by mistake in foreclosure web (AP)
AP - Christopher Marconi was in the shower when he heard a loud banging on his door. By the time he grabbed a towel and hustled to his front step, a U.S. marshal's sedan was peeling out of his driveway. Nailed to Marconi's front door was a foreclosure summons from Wells Fargo, naming him as a defendant. But the notice was for a house Marconi had never seen — on a mortgage he never had.

HUD investigates lenders' fair-housing practices (AP)
AP - Federal officials launched an investigation Wednesday to determine whether 22 mortgage lenders have been discriminating against qualified African-American and Latino borrowers by denying them government-insured loans.

AP IMPACT: Caught by mistake in foreclosure web (AP)
AP - Christopher Marconi was in the shower when he heard a loud banging on his door. By the time he grabbed a towel and hustled to his front step, a U.S. marshal's sedan was peeling out of his driveway. Nailed to Marconi's front door was a foreclosure summons from Wells Fargo, naming him as a defendant. But the notice was for a house Marconi had never seen — on a mortgage he never had.

Tax deal squeezes potential home buyers (Reuters)
Reuters - For Kathryn Confer, refinancing the mortgage on her home in Erie, Pennsylvania, became a race against time -- first because she was drowning under a 10.5 percent interest rate and then because of Congress.

British house prices dip in November: survey (AFP)
AFP - British house prices fell 0.1 percent in November from a month earlier, a survey from major home-loans provider Halifax showed on Thursday.

Mortgage rates hit 4.61 pct.; refi's could slow (AP)
AP - Rates on fixed mortgages rose for the fourth straight week this week. The surge could slow refinancings and further hamper the housing market.

The Messy Euro Project and How Buffett Won the Lottery (The Motley Fool)
The Motley Fool - The big financial news over the past month was the IMF agreement to provide soft loans to Ireland -- the causes of that crisis are many and various, but one Dragon from the Irish version of Dragons' Den includes the false sense of security provided by the appearance of financial regulation:

Summary Box: Mortgage rates rise again (AP)
AP - MORTGAGE RATES RISE: The average rate on the 30-year fixed mortgage increased to 4.61 percent this week from 4.46 percent last week, while the rate on the 15-year loan rose to 3.96 percent.

3 stock funds far above their 2007 market peaks (AP)
AP - Few stock mutual funds have managed to return investors' balances to levels at the market's peak in late 2007, before stocks fell sharply. Despite the recent rally, an investor with $10,000 in a stock fund at the peak has less than that now, in most cases.

Australia unveils sweeping banking reforms (AFP)
AFP - Australia unveiled tough changes to finance laws on Sunday, banning unpopular mortgage fees and cracking down on price collusion between major banks in a bid to boost competition in the sector.

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