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Personal Finance News 03/2011

Geithner wants housing overhaul bill in 2 years (AP)
AP - Treasury Secretary Timothy Geithner is telling Congress that the Obama administration wants Congress to approve legislation overhauling Fannie Mae and Freddie Mac, the nation's troubled housing finance giants, within two years.

Geithner: mortgage costs to rise with reform (Reuters)
Reuters - Treasury Secretary Timothy Geithner said on Tuesday that future mortgage costs likely will be "modestly higher" after reforms are completed to the national housing finance system.

Republicans must nail down housing option: Geithner (Reuters)
Reuters - Republicans must come to grips with how to overhaul housing finance if they are serious about ending the government's leading role in the wrecked system, Treasury Secretary Timothy Geithner said on Tuesday.

4 Ways Investors Get Inflation Wrong (The Motley Fool)
The Motley Fool - Between fears of a new oil shock and the Fed's money printing, it's only natural for investors to be concerned about the risk of inflation. If you want to manage that risk intelligently, make sure the following four myths don't trip you up.

AIG to accelerate MetLife sales, government repayment (Reuters)
Reuters - Bailed-out insurer American International Group will sell off its stake in MetLife Inc months earlier than expected, accelerating its repayment of the U.S. government and giving MetLife more control of what had been an overhang for its shares.

IRS Has $1.1 Billion of Your Money (ContributorNetwork)
ContributorNetwork - The Internal Revenue Service (IRS) has been enjoying an interest free loan of $1.1 billion courtesy of the 1.1 million United States taxpayers who failed to file their 2007 income tax returns. In a recent press release, the IRS reminded Americans who failed to file their 2007 tax returns that they have just a few more weeks, until April 18, 2011, to file their 2007 income tax returns (Form 1040), or that loan to the IRS turns into a gift.

Why I Didn't Pay Off My Mortgage Before Retirement (U.S. News & World Report)
U.S. News & World Report - I have a confession to make. I retired with a mortgage. Most retirement planning professionals say this is a big no-no. I'm not so sure.

Former Alabama bank exec pleads guilty to fraud (AP)
AP - A former executive at Alabama-based Colonial Bank pleaded guilty Wednesday to a nearly billion-dollar fraud conspiracy that contributed to the collapse of both the bank and what had been one of the country's largest mortgage lenders.

How Your Credit Score Affects Your Mortgage (U.S. News & World Report)
U.S. News & World Report - When my wife and I bought our first home (circa 1993), we had no idea what our FICO score was. Back in the day, you couldn't simply fire up the computer and check your score. In fact, we applied for our mortgage over the phone, not over the Internet. My, how things have changed!

Santander, BlackRock 'eye' Citigroup unit (AFP)
AFP - Spanish bank Santander and US investment fund BlackRock have set their sights on the consumer finance unit of Citigroup in what could be a $2 billion deal, the Financial Times reported.

Don't Miss Out on These Tax Breaks! (The Motley Fool)
The Motley Fool - There's no way around it: Paying taxes hurts. Sure, we get a little thing called "civilization" in return -- police, schools, roads, courts, parks, and more. But nonetheless, most of us would like to pay as little as we need to. Fortunately, you may be able to shave a lot of dollars off your bill by taking advantage of some often-overlooked tax breaks.

A look at mortgage rates over the last 52 weeks (AP)
AP - A look at mortgage rates over the last 52 weeks

Summary Box: Fixed mortgage rates drop this week (AP)
AP - MORTGAGE RATES FALL: Freddie Mac said the average rate on the 30-year loan slipped to 4.87 percent this from 4.95 percent last week. The average rate on the 15-year fixed home loan fell to 4.15 percent from 4.22 percent.

How to Control Your Investment Costs (U.S. News & World Report)
U.S. News & World Report - Even the best financial planners and investors can't predict what the stock market will do, much less control it. But there is something just as important that you can control: Your investment costs.

Business entertainment deductions can be complex (AP)
AP - Taking a customer to lunch, dinner or the theater is part of doing business. And often, a lot of fun. But company owners may find that claiming such entertainment expenses as income tax deductions is complicated, and maybe painful.

Funds ride the bull market rebound, and then some (AP)
AP - The pain of the stock market meltdown is becoming a more distant memory thanks to the stunning rebound of mutual fund returns.

Banks receive proposals on troubled mortgages: report (Reuters)
Reuters - U.S. banks received a proposal from state attorneys general and several federal agencies that could require them to reduce loan balances of troubled mortgage borrowers, the Wall Street Journal said, citing people familiar with the matter.

British house prices slip in February: survey (AFP)
AFP - British house prices slipped by 0.9 percent in February, offsetting a modest gain in January, data from a top home-loans provider showed on Friday.

Is Free Money for College Worth It? (The Motley Fool)
The Motley Fool - If you have a child, you know how important it is to start saving early for your child's education. But when times are tough, it's easy to put off college saving in favor of more immediate needs -- especially if your child has a long time to go before graduating from high school.

How to Choose Your Mortgage Type (U.S. News & World Report)
U.S. News & World Report - At the moment, adjustable-rate mortgage rates are being offered for roughly one-and-a-half percentage points below fixed-rate mortgage rates, which makes them tempting. Zillow's Mortgage Marketplace, which tracks real mortgage rates offered to consumers, reports that the average rate on a 30-year fixed-rate mortgage was 4.72 percent last week, while 5/1 ARMs were going for 3.22 percent.

South Korea: Don't Call It an "Emerging Market" (The Motley Fool)
The Motley Fool - The following commentary was originally posted on, the website of Motley Fool Asset Management, LLC, on Feb. 25. With permission, we're reproducing it here in its original form.

5 Financial Tips You Should Ignore (U.S. News & World Report)
U.S. News & World Report - Have you heard the one about houses being a sure-fire investment? Or the tip that you should close all your credit card accounts? Bad financial advice can circle the web faster than the latest e-mail scam from Nigeria, and some of it originates from personal finance gurus themselves (although their words are often twisted). Here are five popular financial tips you should ignore:

How to Save $3,000 This Year (U.S. News & World Report)
U.S. News & World Report - As you wrap up preparing your taxes this year, I hope you're one of the many people set to receive a healthy tax refund. Last year, the average tax refund was over three thousand dollars! Three thousand can make a huge dent in some debt or fund a pretty nice vacation.

Car-buying fuels increase in consumer borrowing (AP)
AP - Consumers borrowed more in January to purchase new cars but were once again frugal with their credit cards, offering a mixed sign of their confidence in the economy.

Car-buying fuels increase in consumer borrowing (AP)
AP - Consumers borrowed more in January to purchase new cars but were once again frugal with their credit cards, offering a mixed sign of their confidence in the economy.

Iowa AG says months before final foreclosure deal (AP)
AP - Iowa's attorney general said Monday it will be several months before a final deal is reached with five big U.S. banks on changing the system of foreclosures to compel lenders to modify more struggling homeowners' loans.

Underwater mortgages rise as home prices fall (AP)
AP - The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.

Bank of America long-term profit forecast cheers investors (Reuters)
Reuters - Bank of America Corp expects to get past large mortgage losses over the next few years and reach pretax profits of as much as $40 billion annually, its chief executive said.

The Key to Beat Inflation in Retirement (The Motley Fool)
The Motley Fool - Stocks go up and stocks go down, but the one thing you can count on is this: Prices of just about everything you'll need after you retire will go up over time. The challenge is figuring out how to make your retirement investments grow enough to keep up with the rising prices of your basic necessities. But with a little work, you can find the best ways to beat inflation -- and they aren't necessarily where you might expect.

Summary Box: Underwater mortgages in US rise (AP)
AP - UNDERWATER MORTGAGES RISE: The number of Americans who owe more on their mortgages than their homes are worth rose in the October-December quarter to 11.1 million. About 23 percent of all mortgaged homes are underwater.

Mortgage applications at highest level in 3 months: MBA (Reuters)
Reuters - Applications for home mortgages jumped to the highest level in three months last week, buoyed by improvements in the job market, an industry group said on Wednesday.

Mortgage applications spike; home sales still weak (AP)
AP - The number of people applying for a mortgage jumped last week. But analysts cautioned that the increase was likely driven by investors, not first-time homebuyers who are needed to help housing markets recover.

Help Available for Public Servants Drowning in Debt (U.S. News & World Report)
U.S. News & World Report - A number of articles have appeared in the press in recent weeks about students graduating with advanced degrees, mortgage sized-debts, and few job prospects to pay it back. These stories come as no surprise to those of us who advocate for educational debt relief programs. The amount of student debt that many young professionals have incurred is indeed staggering--even if the graduate has a job.

Markets "Are Not Fair" (The Motley Fool)
The Motley Fool - Events in the Middle East have dominated the news in recent weeks, and been a major factor in the rise in energy prices. George Soros, whose ongoing feud with Fox News got a bit more heated of late, commented:

Republicans question foreclosure settlement proposal (Reuters)
Reuters - Republicans are pushing back against a proposed mortgage servicing settlement sent to large banks last week, saying it is an abuse of power that could harm markets.

House panel OKs bill to kill Obama mortgage plan (Reuters)
Reuters - Republicans in the U.S. House of Representatives on Tuesday took a step toward killing President Barack Obama's signature foreclosure prevention program, though the move will likely be blocked by the Senate.

Rate on 30-year mortgage ticks up to 4.88 pct. (AP)
AP - Fixed mortgage rates were relatively flat this week, with the 30-year loan just under 5 percent.

Beware: China Has a New Plan (The Motley Fool)
The Motley Fool - In case you had forgotten that China is still a communist state, this week's launch of its latest five-year plan should come as a handy reminder.

AIG offers to rebuy toxic assets from New York Fed (AP)
AP - American International Group Inc. is offering $15.7 billion for a heap of toxic mortgage bonds that the Federal Reserve Bank of New York took off its hands at the peak of the financial crisis in 2008.

AIG offers U.S. government a $15.7 billion buyback (Reuters)
Reuters - American International Group offered on Thursday to buy back, for $15.7 billion cash, mortgage-backed securities the U.S. government took off the bailed-out insurer's hands during the financial crisis.

States Test Mortgage Principal Write-Downs (BusinessWeek)
BusinessWeek - Financial institutions have grudgingly modified mortgages for thousands of distressed homeowners by lowering interest rates, spreading principal repayments over more months, even forgiving some overdue interest. They've tried almost anything -- except lowering the total amount owed.

House GOP wants to end emergency mortgage aid (AP)
AP - Republicans on Friday muscled a bill toward House passage that would kill federal loans to struggling homeowners as the GOP and Democrats waged their latest fight over how to balance frugality and compassion at a time of massive federal deficits.

AIG offers to buy toxic assets from Fed (AFP)
AFP - US insurer American International Group has offered to buy back $15.7 billion in mortgage-backed securities from the central bank as part of its efforts to emerge from a government bailout.

99 Cents Only Shares Popped: What You Need to Know (The Motley Fool)
The Motley Fool - Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

While States Raise Income Taxes, Tenn. Senate Issues Permanent Ban (ContributorNetwork)
ContributorNetwork - While states like Illinois are gingerly raising their income tax rates in an effort to balance wildly out of control budget deficits, Tennessee's Senate has voted 28 to 5 in favor of an amendment to their state constitution that will permanently ban any new tax on income, including payroll taxes.

How to E-File Your Taxes for Free (U.S. News & World Report)
U.S. News & World Report - The federal income tax filing deadline is coming up next month. If you still haven't filed your taxes you want to make sure you e-file your taxes. If you go to a big chain tax preparation firm you could pay $30 or more just to e-file your taxes. If you have them prepare your taxes they will allow you to e-file for free but you will hundreds of dollars in preparation fees. There is no need to pay to e-file and for many people there is no need to pay for tax preparation. The IRS wants you to know that they give you several ways to prepare and e-file your taxes for free.

Fannie ex-CEO may face claims in SEC probe: report (Reuters)
Reuters - Daniel Mudd, the former CEO of government-sponsored mortgage firm Fannie Mae, has received notice from U.S. regulators that he may face claims for allegedly misleading investors about the mortgage company's exposure to subprime loans, Bloomberg said.

Nine Months is Not a 'Severe Punishment' Fitting Survivor Winner Hatch (ContributorNetwork)
ContributorNetwork - COMMENTARY | As a tax accountant, the only thing I find more obnoxious than reading about celebrities like Al Pacino and Martin Scorsese shrugging off their obligation to pay income tax like us mere mortal are those celebrities or reality television stars, like Richard Hatch, who, despite conviction of tax evasion, still refuse to pay the taxes due.

Aflac says Japan sales face minimal impact (AP)
AP - Aflac Inc., a U.S.-based insurance company that sells health and life insurance to one out of every four people in Japan, said Monday that its Japanese sales will likely face only a minimal impact from the earthquake and tsunami there.

7 Things You Don't Know About Taxes (The Motley Fool)
The Motley Fool - Whether you're writing a big check in April, or watching a fat chunk of your income vanish with every paycheck, it hurts to hand over your money to Uncle Sam. But a few little-known facts about paying your taxes could make this year's check-in with the IRS a little less painful.

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