Finance – Lost Nomad http://lostnomad.org/ Fri, 21 Jan 2022 15:11:22 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 http://lostnomad.org/wp-content/uploads/2021/05/lost-nomad-icon-150x150.png Finance – Lost Nomad http://lostnomad.org/ 32 32 2 Reasons You Might Want a Credit Card with an Annual Fee http://lostnomad.org/2-reasons-you-might-want-a-credit-card-with-an-annual-fee/ Thu, 11 Mar 2021 06:19:23 +0000 http://lostnomad.org/2-reasons-you-might-want-a-credit-card-with-an-annual-fee/

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  • It is not uncommon to see a credit card with an annual fee, sometimes up to $550 per year.
  • First, you may want to pay an annual fee if the value of a card’s perks and benefits outweighs that fee.
  • You may also have to pay an annual fee if you have poor credit or no credit and are limited in the number of cards you can open to start building your credit score and qualifying for the cards you you wish.
  • Learn more about personal finance coverage.

When there is so many different credit cards there, why would you pay an annual fee?

Two reasons in particular come to mind: First, you might want to pay an annual fee if the value of a card’s perks and benefits outweighs that fee. You may also have to pay an annual fee if you have poor credit or no credit and are limited in the cards you can open to begin with. build your credit score and qualify for the cards you want.

Many people pay annual fees for their credit cards — some even pay thousands every year. Although the motivation to pay $550 a year for the beloved Chase Sapphire Reserve®, for example, is different from the reason to pay for a secured credit card to build your credit, both make sense.

Here’s why:

If you can squeeze enough of the benefits out of the card to offset the annual fee, it might be worth it.

People who have their eyes on best rewards cards and the most generous sign-up or welcome bonuses will likely have to pay an annual fee. One of the most popular travel rewards cards, the Chase Sapphire Preferred® Card, has an annual fee of $95, but you can earn 60,000 points (equivalent to $750 on travel if you redeem through Chase’s portal ) once you have spent $4,000 within the first three months of account opening.

Even if you choose a cash back credit card, some of them also offer huge rewards. For example, the Blue Cash Preferred® card from American Express offers 6% cash back at US supermarkets on up to $6,000 in purchases each year (and then 1%) (cash back is received in the form of reward dollars). If you can spend at least $61 a week on groceries, you’ll be able to offset the annual fee (see rates) and more.

Other credit cards that have much higher annual fees also offer other additional benefits that might be worthwhile, especially if they are services or products that you will pay for whether you have the card or not. .

Suppose you need to rent cars for some upcoming trips and you tend to buy main car rental cover. Some credit cards offer it for free as long as you book your rental with them so the credit card can help you save money on these charges. Or you and your family travel frequently with United Airlines and like to check your bags. If you get the United℠ Explorer card, you and your booking companion can get your first check for free. This can save you up to $140 total round trip, easily offsetting the $95 annual fee, waived in the first year.

Just because a credit card offers pretty stellar rewards doesn’t mean you should sign up for it. However, if you want to maximize your redemptions and take advantage of all the benefits it offers, a card with an annual fee might be worth it.

Read more: The best credit cards with no annual fee

If you have a limited or no credit history, you may have no choice but to pay

In some cases, you may have no choice but to pay an annual fee if you have bad credit or a limited credit history. There are secure credit cards – where you are required to put down a security deposit which acts as a credit limit – and unsecured credit cards. Both can come with an annual fee.

Unfortunately, your options are limited, but paying a card with an annual fee for about a year can help you build your credit. You will be able to establish a positive credit history which can help you increase your credit score and potentially eligible for other types of credit cards down the line.

Many of these cards don’t offer perks like travel miles, but some do offer cash back like the Capital One QuicksilverOne Cash Rewards credit card. This card comes with a $39 annual fee, but you get 1.5% cash back on all purchases. If you can qualify, you may be able to offset the annual fee by spending at least $2,600 on the card within a year.

Note that there are credit cards for people who need to build up credit that have no annual fee, like the petal card. If you’re looking for your first credit card or a good card to boost your credit, be sure to research your options.

Regular APR

26.99% variable

Credit score

Medium, Fair and Limited

  • Advantages and disadvantages

  • Details


  • Advantages
    • No bonus categories to track; you earn 1.5% on everything
    The inconvenients
    • Other cards offer higher cashback rates
    • Earn unlimited 1.5% cash back on every purchase, every day
    • Earn cash rewards without signing up for rotating categories
    • Automatically be considered for a higher line of credit in as little as 6 months
    • Monitor your credit profile with the CreditWise® app, free for everyone
    • $0 fraud liability if your card is lost or stolen
    • No limit to the amount of cash back you can earn, and cash back does not expire for the life of the account
    • Help build your credit for the future through responsible card use
    • Receive personalized alerts and manage your account with the Capital One mobile app

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    Thrifts Vs. Banks: What’s the Difference? http://lostnomad.org/thrifts-vs-banks-whats-the-difference/ Thu, 11 Mar 2021 06:19:23 +0000 http://lostnomad.org/thrifts-vs-banks-whats-the-difference/

    If your holiday traditions include watching Jimmy Stewart learn that “It’s a Wonderful Life,” you probably remember the spunky Bailey Bros. Building & Loan Association and how it financed hundreds of single family homes in good old Bedford Falls.

    But although not as common as they once were, savings and loan associations, or “savings,” still play an important role in the financial lives of many Americans.

    The biggest difference between a savings bank and a conventional bank is that savings banks are designed to serve American consumers rather than businesses. By law, savings must have 65% of their loan portfolio tied up in consumer loans, says Tanya Marsh, a law professor at Wake Forest University in Winston-Salem, North Carolina.

    RATE SEARCH: Get a great rate on your savings by browsing money market accounts

    What do the savings

    A typical consumer probably won’t notice many of the obvious differences between a savings and, say, a community bank. Like community banks, thrifts are typically smaller, local institutions and don’t have the reach or resources of a large national bank like Chase or Bank of America, Marsh says.

    Savings offers customers many of the same deposit products you can get at a bank, such as checking accounts, savings accounts and certificates of deposit, as well as credit products such as home loans and cars and credit cards. Just like with a bank, all of your deposits up to $250,000 are backed by the full trust and credit of the US government through the Federal Deposit Insurance Corp.

    From a consumer perspective, savings have one big advantage over banks: a higher interest rate on customers’ savings.

    “Because savings can borrow money from federal mortgage banks at a low interest rate, this generally results in higher interest rates on savings savings accounts compared to commercial banks. “, explains Marsh. “That has traditionally been one of their advantages.”

    What savings don’t do

    Savings typically doesn’t offer the kind of one-stop-shop for financial services you’ll find at many banks, says Brett Rabatin, CFA, analyst and principal at Piper Jaffray, an investment bank and asset management firm based in Minneapolis.

    “If you enter a savings and credit or savings branch, compared to a commercial bank, the product set will be much simpler,” says Rabatin.

    This means that you are likely to find fewer account types and fewer wealth management, foreign exchange and insurance products and services than at a conventional bank.

    Stand up for the little guy

    Thrift stores have been around for a long time, starting as “building societies” in the UK in the late 18th century and eventually making their way to the United States.

    “Savings charters actually date back to before the Civil War,” says Chris Cole, executive vice president and senior regulatory advisor at Independent Community Bankers of America.

    The description of thrift stores in that old movie “It’s a Wonderful Life” is in some ways pretty accurate. Whether mutual (owned by their customers) or corporate (owned by shareholders), they served a primary purpose in the American economy: to ensure that working-class people could obtain mortgages to buy single-family homes. .

    Millions of post-war Americans bought homes with savings loans; at some point in the post-war period, they were doing the majority of mortgages in the United States, Cole says.

    That changed when deregulation of the financial services industry, followed by a wave of failures in the 1980s, decimated savings.

    “The savings industry has not recovered from the S&L (savings and lending) crisis decades ago,” says Wake Forest’s Marsh.

    RATE SEARCH: Search for a checking account near you today.

    May be harder to find in the future

    These days, the lines between savings banks and conventional banks have blurred, says Rabatin of Piper Jaffray. Savings and credit associations are turning more to commercial lending and construction, and a growing number are converting to conventional banks.

    In addition, many of the advantages that economies enjoyed, including less stringent regulation, have been eliminated over the years, most recently by the Dodd-Frank Financial Reform Act.

    “I don’t know why anyone would start a thrift store today,” says Marsh. “People are loyal to local institutions, so some of them may hang on. But it’s a rapidly consolidating industry overall.

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    Is Crestwood Equity Partners Stock a Buy http://lostnomad.org/is-crestwood-equity-partners-stock-a-buy/ Thu, 11 Mar 2021 06:19:22 +0000 http://lostnomad.org/is-crestwood-equity-partners-stock-a-buy/

    Crestwood Equity Partners (NYSE: CEQP) initially thought 2020 would be a banner year. The Master Limited Partnership (MLP) was putting the finishing touches on a multi-year expansion program, which should pay dividends in 2020 and beyond. Unfortunately, oil prices crashed early in the year, which torpedoed his grand plan. Due to this slowdown, MLP shares have lost about 35% of their value this year. This pushed its payout yield to 12.5%.

    Here is an overview of whether the energy company has the fuel to make a comeback in 2021.

    Image source: Getty Images.

    Explore the numbers from Crestwood Equity Partners

    Crestwood Equity Partners entered 2020 believing it could generate between $590 million and $620 million in adjusted revenue EBITDA This year. This implied a 15% increase from the 2019 level at the midpoint. Meanwhile, the company estimated it could produce between $350 million and $380 million in cash. That would have been about enough to cover its payout, which the company grew 4.2% quarter-over-quarter at the start of the year, as well as most of its $150-200 million in remaining capital expenditure.

    Unfortunately, soaring oil prices put a damper on that plan, forcing most of its customers to shut down some producing wells and stop drilling new ones. Meanwhile, one of his biggest clients, Chesapeake Energy, filed for bankruptcy. For this reason, Crestwood only expects to produce $520-570 million in adjusted EBITDA this year. Although this is a measly 3.5% ahead of the 2019 midpoint level, the company currently expects to meet or exceed the upper end of this range. Additionally, after reducing capital expenditures to a range of $140-160 million, the company expects to generate enough cash to cover its distribution and capital expenditure plan with headroom, giving it donate funds to pay off debt.

    To put these numbers in a different perspective, Crestwood currently has a enterprise value by $4.4 billion after its units fell 35% this year. With MLP on track to generate $545 million in EBITDA in the middle of its guidance range, it trades at around eight times its EBITDA. That’s a very cheap valuation for a company generating stable cash flow.

    Explore what awaits Crestwood Equity Partners

    Although it’s still early days, Crestwood recently released its preliminary guidance for 2021. The company currently estimates that it can generate approximately the same amount of EBITDA next year as it did in 2020, or between $520 million and $570 million. dollars. Meanwhile, he only plans to invest $40 million in growth capital projects. As such, it is expected to generate a significant cash surplus in 2021 after funding its distribution program and capital expenditures. This will give it the flexibility to pay down debt, make acquisitions and buy back some of its beaten up equity. While maintaining low leverage is a near-term priority, Crestwood expects to end 2020 with a debt-to-EBITDA ratio between 4.0 and 4.1 times, which is just in the mid-range. above its long-term target range of 3.5 to 4.0 times.

    Meanwhile, there are benefits to this plan if oil prices rebound strongly, which would give its customers the liquidity and confidence to ramp up their drilling activities. On top of that, the company could add more fuel if it makes an acquisition. On the other hand, it could increase its earnings per share by using its available cash to buy back a significant amount of its discounted equity.

    Get paid well while waiting for the rebound

    Crestwood’s operations have proven remarkably durable during this year’s oil market downturn. For this reason, it’s one of the few midstream companies that hasn’t cut its high-yield payouts this year. That stability seems achievable again in 2021, given what Crestwood is planning. Add to that its performance, strong balance sheet and updated valuation, and Crestwood looks like a compelling buy these days for investors who have the patience to wait for the oil market to rally.

    This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

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    Can Tesla still deliver more than 500,000 vehicles this year? http://lostnomad.org/can-tesla-still-deliver-more-than-500000-vehicles-this-year/ Thu, 11 Mar 2021 06:19:21 +0000 http://lostnomad.org/can-tesla-still-deliver-more-than-500000-vehicles-this-year/

    After the market closes on Thursday, You’re here (NASDAQ: TSLA) announced first-quarter deliveries well ahead of analyst estimates. This impressive achievement has helped allay concerns about the extent of the negative effects of the COVID-19 pandemic on the business.

    But one important piece of information was missing from the report: an update on whether management still plans to meet its full-year delivery target in these uncertain times. As the list of companies that have reduced or suspended their annual forecasts continues to grow each day, Tesla remains reluctant.

    Does management still think that electric car company can deliver over half a million vehicles in 2020?

    Production of Tesla vehicles. Image source: The Motley Fool.

    Record deliveries in the first quarter

    Tesla’s first quarter shipments were 88,400, a record high for the first quarter, but down from around 112,000 in the previous quarter. Compared to the first quarter of 2019, however, deliveries increased by 40%.

    Management said the combined Model 3 and Y units made up 86% of total shipments in the quarter, with its more expensive Models S and X making up the remaining sales. Since model Y deliveries only started in March, and as car production of new models is slow to ramp up, the Model Y likely accounted for a very small percentage of deliveries for the quarter.

    On average, analysts expected shipments of 79,900 in the first quarter. But that consensus forecast was based on revised estimates in the weeks leading up to this quarterly update. Analysts expected COVID-19 headwinds in China early in the year and other markets towards the end of the quarter to weigh on shipments. But analysts’ downward forecasts were apparently overly cautious.

    Reach 500,000 units

    While it should be noted that Tesla beat its guidance for the quarter, the company has its work cut out for it when it comes to meeting its annual target of over 500,000 deliveries, up from around 368,000 in 2019. To meet these forecasts, it will need 137,200 deliveries on average during each of the next three quarters.

    The company’s recent launch of the Model Y, which Tesla says will eventually achieve higher annual sales volume than the Model 3, will likely help the automaker in its efforts to increase deliveries. In addition, Tesla’s new factory in Shanghai, where it builds vehicles for Chinese customers, will likely also act as a catalyst this year. But for now, there’s one major obstacle in Tesla’s path: Its plant in California, where it builds most of its vehicles, is closed.

    To exceed its forecast of 500,000 vehicles in 2020, Tesla will need this factory to get back online – and soon. Whether or not Tesla hits its forecast, therefore, depends primarily on California’s ability to curb the spread of COVID-19.

    Progress in Shanghai

    Tesla highlighted the progress made at its Shanghai plant in its update of first quarter deliveries, noting that it “continued to achieve record production levels, despite significant setbacks.”

    Additionally, the automaker said in its fourth quarter update that it has installed enough capacity in Shanghai to achieve an annualized production rate of 150,000 units. But since the plant did not start producing vehicles until the end of 2019, it will take time for the automaker to reach a production rate of 150,000. Incremental production at the Tesla plant in Shanghai may fail. not enough to make up for a stop in California.

    While management hasn’t lowered its full year delivery outlook with its first quarter update, investors shouldn’t be hopeful. The longer the automaker’s California plant remains closed, the lower Tesla’s chances of meeting its targets.

    This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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    Mortgage defaults hit 10-year high, but there’s more to the story http://lostnomad.org/mortgage-defaults-hit-10-year-high-but-theres-more-to-the-story/ Thu, 11 Mar 2021 06:19:21 +0000 http://lostnomad.org/mortgage-defaults-hit-10-year-high-but-theres-more-to-the-story/

    Image source: Getty Images

    There is a very big reason why so many mortgages are in arrears today.

    Many homeowners sign up for a mortgage just to fall behind on their payments. Factors like job loss, illness, and other unfortunate circumstances can create a scenario where borrowers become delinquent. Once this happens, problems can arise.

    People who cannot meet mortgage payments risk losing their homes to foreclosure. Every missed payment can also seriously hurt your credit score.

    In light of that, it’s bad news, at least on the face of it, to see that mortgages with late payments of 90 days or more are on the rise. Indeed, home loans outstanding for at least 90 days are at their highest level since 2010, reports Black Knight.

    A 90-day default is considered serious because borrowers will have missed three monthly payments. And Black Knight says there are currently more than 1.8 million more serious crimes than before the coronavirus pandemic.

    But when we look at why longer-term delinquencies have increased, the explanation paints a less frightening picture.

    Why are mortgage defaults on the rise?

    Many homeowners have had no choice but to put their mortgages on hold during the COVID-19 pandemic. Under the CARES Act, distressed homeowners are allowed to request 180 days of forbearance, then an extension of 180 days for a total of 360 days during which mortgage payments are suspended.

    Thanks to CARES providing financial relief in light of the crisis, mortgage accounts that land in forbearance as a result of COVID-19 cannot be reported negatively to the three major credit bureaus.

    The reason delinquency rates are so high is that Black Knight’s tally includes nonpayments that are subject to forbearance agreements. In other words, everyone whose loans are currently on hold is still counted in the above statistic. Even though from a credit report perspective, they are not recorded or accused of being delinquent. The result, however, is the same, with delinquencies still reaching a 10-year high.

    Should you suspend your mortgage now?

    Normally, suspending a home loan is not a decision to be taken lightly. This is because a forbearance can appear as a negative mark on your credit report. But as we just said, borrowers who have been affected by the coronavirus need to be protected against it.

    As such, if you think you won’t make an upcoming mortgage payment, or multiple payments, it’s better to put your loan on hold than to be late. Late mortgage payments could not only hurt your credit; they could also put you at risk of seizure, and that’s a load of stress you just don’t need.

    Of course, one thing to keep in mind is that you will be must be prepared to repay your missed mortgage payments once your forbearance period ends. Before rushing to ask for a forbearance, ask your lender what their repayment policy will be. Knowing how long you will have to find that money will help you better prepare.

    Finally, before putting your loan on hold, you may want to discuss other relief options with your lender. If you’re in a position where you can make partial payments on your mortgage, for example, that may be better than putting your loan payments on hold completely so you don’t fall too far behind. It’s always worth being open with your lender, especially at a time like this when so many Americans are struggling financially.

    A historic opportunity to potentially save thousands on your mortgage

    There is a good chance that interest rates will not stay at multi-decade lows any longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger to buy a new home.

    Ascent’s in-house mortgage expert recommends this company for a low rate – and in fact, he’s used them for refi himself (twice!). Click here to find out more and see your price. While this does not influence our opinions on the products, we do receive compensation from partners whose offers appear here. We are by your side, always. See The Ascent’s full announcer disclosure here.

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    After the subprime meltdown, non-bank lenders once again dominate riskier mortgages http://lostnomad.org/after-the-subprime-meltdown-non-bank-lenders-once-again-dominate-riskier-mortgages/ Thu, 11 Mar 2021 06:19:20 +0000 http://lostnomad.org/after-the-subprime-meltdown-non-bank-lenders-once-again-dominate-riskier-mortgages/

    PennyMac, AmeriHome Mortgage, and Stearns Lending have several things in common.

    All of them are among the largest mortgage lenders in the country, and none of them is a bank. They are part of a growing class of alternative lenders who now make more than 4 in 10 home loans.

    All of them are headquartered in Southern California, the epicenter of the subprime lending industry for the past decade. And all of them are led by former executives at Countrywide Financial, the once-giant mortgage lender that made tens of billions of dollars in risky loans that contributed to the 2008 financial crisis.

    This time, the leaders say, it will be different.

    Unlike their subprime ancestors, companies maintain they adhere to strict new lending standards to protect against massive defaults.

    Still, some observers are concerned about the boom in housing markets across the country and in Southern California, where prices have risen by a third since 2012.

    So-called non-bank lenders once again dominate a riskier corner of the housing market – this time, Federal Housing Administration-insured loans for first-time buyers and buyers on credit. These lenders now control 64% of the market for FHA loans and other veterans-like loans, up from 18% in 2010.

    A Times analysis of federal lending data shows that FHA mortgages from non-bank lenders experience more defaults than similar loans from banks. Only 0.9% of FHA insured loans issued by banks from October 2013 to September this year were seriously past due – several months overdue – compared to 1.1% of non-bank loans. In other words, non-bank FHA loans are about 23% more likely to go wrong than those issued by banks.

    ————
    FOR REGISTRATION:

    Non-bank lenders: In Section A of November 30, an article on the growth of non-bank mortgage lenders indicated that a review of federal lending data showed that FHA and VA non-bank loans were about 23% more likely to hurt turn than those issued by banks. Data did not include VA-backed loans.
    ————
    Consumer advocates fear the new generation of mortgage companies, especially those with ties to now defunct subprime lenders, could once again take advantage of borrowers.

    “The idea that many of the people who benefited from subprime are now back in action calls for closer examination,” said Kevin Stein, associate director of the California Reinvestment Coalition, a fair loan advocacy group in San Francisco.

    The surge in non-bank lending has also sparked concern at Ginnie Mae, a crown corporation that monitors FHA and VA lenders. Ginnie Mae chairman Ted Tozer has requested $ 5 million in additional federal funding to hire 33 additional regulators.

    “These companies have grown so fast,” he said.

    FHA borrowers can deposit as little as 3.5% of the loan amount and have a credit score as low as 580, which could signal past bankruptcy or debts sent for collection.

    Even for borrowers with good credit, smaller down payments add risk. If home prices drop even a little, these borrowers may end up owing more than their home’s value, which may encourage some to default.

    But a small deposit was interesting for Abraham and Crystal Cardona. They both have high credit scores, close to 800, but in September they took an FHA loan from a non-bank lender when they bought a $ 500,000 home in La Mirada.

    The minimum down payment of $ 17,000 saved them enough to buy a few appliances and put up a fence around their back pool.

    “We were thinking what our monthly payment would be, not where the loan came from,” said Abraham Cardona, 32.

    In 2005, non-bank lenders, many subprime loans, accounted for 31% of all home loans, according to a report by Goldman Sachs.

    Many of these companies have gone bankrupt. In 2009, only 10% of home loans came from non-bank organizations.

    But last year, nonbanks accounted for 42% of all mortgages.

    At a conference in September, John Shrewsberry, chief financial officer of Wells Fargo, said the bank was not interested in lending to riskier borrowers, even those who meet FHA standards.

    “These are the loans that are going to default, and these are the defaults that we are going to assert in about 10 years,” he said. “We’re not going to start over. “

    Bank withdrawal is a problem for Ginnie Mae, who guarantees FHA and VA loans bundled into bonds and sold to investors. It is much easier to ensure banks have reserves to cover defaults than it is to harvest new lenders, with a variety of business models.

    “Where will the money come from?” asked Tozer. “We want to make sure everyone will be there during the next downturn. “

    Consider Moorpark-based PennyMac, now the country’s sixth-largest mortgage lender, according to trade publication Inside Mortgage Finance. It has a corporate structure that might be difficult for regulators to grasp. The business is made up of two separate but related publicly traded companies, one that creates and manages mortgages, the other a real estate investment trust that purchases mortgages.

    SUBSCRIBE to the Free California Inc. Business Newsletter >>

    PennyMac is managed by Stanford Kurland. He was number two for Angelo Mozilo, the founder of Countrywide who came to symbolize the excesses of the subprime mortgage boom. Kurland maintains that PennyMac is not too complicated and takes care to distance itself from subprime excess. He was fired from Countrywide in late 2006, before his worst loan was granted, due to disagreements with other executives, he said.

    Two years later, he and other former Countrywide executives founded PennyMac, which completed $ 36.9 billion in mortgages in the first nine months of this year.

    Kurland has said he agrees that Ginnie Mae needs more resources to monitor non-bank lenders, but he bristles at the idea that they are making riskier loans.

    “The fact that someone is a non-bank organization does not give them the possibility of granting a loan outside the standards,” he said.

    Kurland noted that PennyMac’s FHA borrowers have an average credit score of 692, above the FHA average of 679.

    At Stearns Lending in Santa Ana, the default rate on loans issued over the past two years was 0.8%, slightly lower than the average bank rate.

    “As you start browsing banks and non-bank institutions, you will find people who are massively underperforming and massively outperforming,” said Brian Hale, managing director of Stearns and former president of the Countrywide division. “It comes down to execution.”

    Delinquency rates vary, according to data from the Department of Housing and Urban Development.

    FHA loans from Anaheim’s Carrington Mortgage Services non-bank lender, for example, have a default rate of around 2.9%, while loans from Detroit-based non-bank giant QuickenLoans have a default rate of just 0. 4%.

    Among banks, Wells Fargo’s rate is only 0.5%, while at Great Plains Bank in Elk City, Oklahoma, it is 2%.

    For now, regulators are not worried.

    Sandra Thompson, deputy director of the Federal Housing Finance Agency, which oversees government-sponsored mortgage buyers Fannie Mae and Freddie Mac, said non-bank lenders play an important role.

    “We want to make sure that there is ample liquidity in the mortgage market,” she said. “It gives borrowers options. “

    For now, these options seem relatively safe.

    The rules of the Dodd-Frank Wall Street Reform Act of 2010, enforced by the new Consumer Financial Protection Bureau, require all lenders to examine borrowers’ income, assets and debts to verify that they can afford the repayment – whatever. something subprime lenders never had to do.

    The related rules also provide lenders with some legal protection when they take out loans to meet the federal standard for a “qualifying mortgage”.

    However, there is market share to be gained by issuing loans outside of these standards.

    Impac Mortgage from Irvine, a publicly traded non-bank lender, almost went bankrupt during the housing crisis because it specialized in Alt-A mortgages, loans made without proof of income or assets. Now it is back in the lending business, primarily the origin of standard government guaranteed loans.

    But about a year ago, he started offering “AltQM” loans, as: an alternative to qualified mortgages. These higher rate mortgages may have interest-only payment periods, adjustable rates, or exceed debt guidelines.

    The company declined to comment, but noted in the documents that it targets borrowers who need more flexibility, which could mean high net worth clients with other large loans.

    For now, bond investors are playing the card of caution, preferring low-yielding bonds backed by qualified mortgages, especially after so many plunged into riskier mortgage bonds a decade ago.

    But some expect investors to eventually acquire an appetite for higher yield bonds backed by riskier mortgages, which would encourage more lenders to issue them.

    “Everyone says they’ve learned their lesson,” said Guy Cecala, editor of Inside Mortgage Finance. “But we know everyone has short memories.”

    james.koren@latimes.com
    Twitter: @jrkoren

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    Stimulus Check on Death: How to Return a Check to the IRS http://lostnomad.org/stimulus-check-on-death-how-to-return-a-check-to-the-irs/ Thu, 11 Mar 2021 06:19:20 +0000 http://lostnomad.org/stimulus-check-on-death-how-to-return-a-check-to-the-irs/

    The IRS made mistakes with the stimulus control program, and now Uncle Sam is asking some people to resend their payments.

    Since CARES Law past and pledged coronavirus relief payments of up to $ 1,200 per adult to millions of Americans, people have had questions – of Who is eligible and who gets paid first, How do you want follow your dunning check, and what if the payment is Wrong amount or was sent to bad bank account.

    Recently, the IRS tried to clarify one of the more puzzling questions: What should you do if a stimulus check has been issued to a deceased person?

    It is not known how many widows and other family members of the recent deceased are in this situation at this time. During the first four weeks of the program, the IRS sent 130 million payments, and plans to send out about 150 million stimulus checks in total. And on May 6, the IRS added a new language to its FAQ page for Economic Impact Payments (aka Stimulus Checks), stating that deceased people are not eligible for payments.

    This is because checks issued to deceased persons are supposed to be returned or refunded. Here’s exactly what the IRS says:

    The new provision that stipulates that stimulus payments to deceased persons must be repaid may come as a surprise. Like The money has already paid off, tens of thousands of similar stimulus payments were mistakenly sent to people who died during the Great Recession, possibly due to a lag in reporting deaths to government agencies. At the time, there was little to no effort on the part of the IRS to recover payments to the deceased. Additionally, in recent weeks, many tax and legal experts felt that the 2020 stimulus payments sent to the deceased likely would not have to be returned.

    Now the IRS says otherwise. Even so, it is still unclear what will happen if an ineligible stimulus payment is not returned to the IRS. (More on this below.)

    Who else is not eligible for stimulation control?

    As of May 6, the IRS also clarified that a few other groups of people were not eligible for stimulus payments, and that those payments should be reimbursed: incarcerated people and “foreigners” (aka non-citizens) who are either non-residents or non-residents. -eligible residents.

    Who exactly counts as incarcerated for IRS purposes – and therefore is not eligible for $ 1,200, and is supposed to reimburse the money it was received – can be complicated. Are people who were in prison when the CARES law was passed but are now free eligible? Here’s what the IRS says about it, and you’ll likely need an accountant to sort it out: “A person is incarcerated if they are described in one or more of clauses (i) through (v) of Section 202 (x) (1) (A) of the Social Security Act (42 USC § 402 (x) (1) (A) (i) to (v)). “

    If you are not a US citizen, the IRS considers you a foreigner. Non-resident aliens, or undocumented immigrants, are not eligible for payments. (Please note that some independent coronavirus relief fund provide emergency assistance to people who fall into this category.) Resident aliens are only eligible for payments if they have a valid Social Security number and are considered “eligible” by the IRS – which generally means that you have a green card and / or have lived in the United States for at least 31 days this year and 183 days in the previous three years. (This is how the IRS determines the tax status of foreigners, and definitions of things like resident aliens vs non-resident aliens.)

    If the IRS says you’re not eligible for a stimulus check but you or a family member still received a payment, the agency expects you to return it.

    Note that, according to the parlance of the IRS, even a person who died very recently might not be eligible. If your spouse or a relative died at any time before you received the payment – even a day in advance – technically the IRS says that person is not eligible and the money must be repaid.

    On the other hand, the IRS says that U.S. citizens living abroad are eligible for stimulus payments, and people living in U.S. territories, such as Puerto Rico, Guam, and American Samoa, are also generally eligible for. receive payments.

    How to Return a Stimulus Check for a Deceased Person

    In addition to new explanations of who died and incarcerated ineligible for payments, the IRS has a new entry in its Stimulus Payments FAQ Page (Q41) explaining how to return a dunning check.

    Basically if you received a paper stimulus check from the Treasury Department and it has not been filed, you must write “CANCELED” on the back, mail it to your regional IRS office, and “include a note indicating the reason for the return of the check. The IRS says.

    If you received an ineligible payment by direct deposit, or if you received a check and have already deposited it, the IRS expects you to return the money, by personal check or money order. payable to the US Treasury. You are asked to write “2020EIP” on the check, as well as the social security number or ITIN (Individual Taxpayer Identification Number) of the non-eligible beneficiary on the check. Please also “include a brief explanation of the reason for the return of the PIE,” the IRS says.

    What happens if you don’t return a pacing check?

    While the IRS certainly seems clear in its guidance that some stimulus payments are ineligible and should be refunded, tax experts aren’t so sure.

    Garret watson, a senior policy analyst at the nonprofit organization Tax foundation, told Money that there were many questions about the IRS guidelines regarding who is and is not truly eligible for stimulus payments.

    “The reasoning of the IRS is not clear for asking for refunds from incarcerated people because the CARES Act does not prohibit them from being eligible. this is not contained in the reasoning of the IRS and is not true for other tax situations involving incarcerated persons, ”Watson said by email.

    Also, because each stimulus payment is technically a early discount from your income tax returns for previous years, it appears that someone who died in the past year may be entitled to a check. “If a deceased person were alive in 2019, for example, they should arguably be entitled to a prepayment based on their 2019 income,” Watson said. “It looks like the IRS is pretty much disqualifying both groups.”

    Nina Olson, Executive Director of the Center for Taxpayers’ Rights, also asked how and why the IRS decided to seek reimbursement of these payments. “What is the legal reasoning for this and why is this position different from the IRS position in 2008?” »Olson says AARP, noting that the IRS made little effort to recover similar “ineligible” payments during the Great Recession. “The government has the right to change its mind, but without explaining its rationale, this position appears arbitrary and capricious.”

    So what if you don’t repay a stimulus payment that the IRS deems ineligible? Granted, some people won’t return the money, either because they’ve spent it already, don’t know the IRS rules, or just don’t want to pay it back.

    No one really knows what the IRS will do at tax time next year, but the answer could be nothing.

    “I suspect the IRS will encourage people to reimburse payments made incorrectly, but the agency is less likely to sue people legally or during tax season 2021,” Watson of the Tax Foundation said. “It is important to note that IRS FAQs are not considered legal documents or even formal advice. Therefore, while they are useful in establishing the agency’s position, we would need more details before knowing if they would have a strong case to prosecute individuals legally. on payments. “

    Money has asked the IRS for comment, and this story will be updated if we get a response.

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    Is your commute killing your car? http://lostnomad.org/is-your-commute-killing-your-car/ Thu, 11 Mar 2021 06:19:20 +0000 http://lostnomad.org/is-your-commute-killing-your-car/

    Getting to work is a reality for most people, and the daily chore puts many of us in some sort of rush hour traffic. This can often be the most stressful moment of day for people and for their cars. Stop-and-go traffic can really wreak havoc on your vehicle’s parts a lot faster than you think.

    It is always important to pay attention to your vehicle and how it is driven. Your car may even tell you about its problems, and if you know how to listen, you may be able to keep your car in good condition for longer. Let’s take a look at some of the most damaging wear and tear on your car that your daily driving can cause.

    Harmful conduct

    Rush hour driving is one of the most dreaded parts of any commute, and your car is okay with it. Driving in traffic jams, generally considered a “serious driving condition”, will put extra strain on your vehicle. The impacts of this can affect your car in several ways.

    • Motor – When driving at peak hours, your engine will idle longer than usual, which means poor engine ventilation. This can cause carbon to build up in your engine, which can be the start of costly damage. You may also find that you need to change your oil more often.
    • Brakes – Heavy traffic can cause you to use your brakes more frequently and harder than usual, which can cause them to wear out faster. Have your brakes checked often and watch for signs of abnormal wear, such as pulling to one side when braking.
    • Transmission – Like your engine, your transmission fluid needs time to warm up. But driving with excessive stops and starts can cause your transmission fluid to overheat, which means it may not perform as expected. In addition, difficult starts and stops during peak hours can have a negative impact on your transmission media.
    • Tires – Proper tire maintenance is always a good idea, but driving with stops and starts can cause your tires to wear more than normal. It can also be more difficult to access the shoulder of the road if you fall flat during rush hour.

    Practice appropriate preventive procedures

    Vehicle wear is inevitable, but you can protect your car from lasting damage by perform regular maintenance on the pieces that your reader has the most impact on. Be sure to consult your owner’s manual for recommended maintenance schedules for severe conditions, as they may differ from your vehicle’s normal schedules.

    Another tip: Drivers with a shorter than average commute also face a higher risk of damage to the vehicle, especially to the engine. This is because your vehicle may not have time to warm up properly and operating your car below normal operating temperatures can lead to damaging carbon buildup in the engine.

    The bottom line

    If you need a new vehicle for your commute, but credit problems are wearing you out, Auto Express Credit can point you in the right direction. Let us connect you with a dealer in your area who has the loan resources available to help those facing difficult credit situations. Our service is free and without obligation. Take the first step now by filling out our online form auto loan application form!

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    How to choose the right offer for your home http://lostnomad.org/how-to-choose-the-right-offer-for-your-home/ Thu, 11 Mar 2021 06:19:19 +0000 http://lostnomad.org/how-to-choose-the-right-offer-for-your-home/

    Just recently, Rob Kallick, founder of the Los Angeles-based Take Sunset team of real estate brokerage company Compass, had a listing that drew 20 bids. Another brought in 12. The two changed hands for well above the asking price.

    “For the house with 20 offers, we probably did 40 showings and half wrote an offer,” Kallick said. “I’ve never seen this before.” The future owner of the three-bedroom residence has offered $ 200,000 more than the asking price of $ 1.4 million, Kallick said. The case ends next week.

    In the United States, more than half of agent offers with Redfin real estate brokerage made in June faced at least one competing offer, according to the firm. Auction wars were the most common for single-family homes, with just over 56% of Redfin’s bids contesting other bids. Reception several offers can be a boon for sellers. But it can also be intimidating, as the best deal isn’t necessarily the one with the highest initial price.

    “With multiples it can get a bit chaotic,” said Heather Roy, an agent for Douglas Elliman in Beverly Hills. “It’s not always just money. We speak with [sellers] in the time. There is an emotional component. They weigh a lot. Roy advises homeowners to create a spreadsheet to compare offers by purchase price, contingencies and financing terms.

    Means of payment

    “Money is always king,” said Martha Gundersen, a Douglas Elliman real estate broker in the Hamptons in New York City.

    Cash offers are exempt from the usual mortgage requirements, which take time to be approved and come with specific conditions such as inspections and appraisals. This means that cash buyers can execute trades quickly. For sellers, this convenience, however, can come at a cost.

    Cash buyers know they have leverage, said Bill Hernandez, who co-leads the Bill and Bryan team at Douglas Elliman in South Florida. They can start a negotiation by saying, “I’ll give you the money to close, but now I’m looking for a 25% to 30% discount. Does business happen like this all the time? No, but sometimes they do.

    Cash offers are generally more common in multi-million dollar homes, but even luxury home buyers are now opting for financing to take advantage of today’s record mortgage rates.

    When buyers resort to financing, it is often best to consider those who have been pre-approved for a loan, which saves time and ensures that the buyer will indeed qualify for a loan at the agreed price. In addition, the more money a buyer commits to the deposit and the deposit deposit, the stronger the offer.

    A down payment of at least 20% of the home’s value creates a sense of security for sellers, even if lenders don’t always ask for it. Not only does this make approval for a mortgage more likely, but a large down payment can indicate that the buyer is financially prepared to meet the unforeseen expenses of the selling process.

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    Offer contingencies

    Regardless of how they pay, most buyers will require some contingency to get the deal done. These provisions allow the buyer to withdraw in the event of rejection of his loan application, the the rating is low or an inspection reveals major structural problems with the property. Some buyers will tie the offer to their ability to sell their existing home first.

    “Too much contingency can kill an offer,” Gundersen said. “The cleanest transaction is the one with the highest price and the least amount of surprises.”

    Faced with fierce competition in today’s market, some buyers are forgoing the vagaries of expertise, claiming that they would pay the difference between the bid price and the appraisal if the expertise is low. If they don’t close the gap and opt out of the contract instead, they risk losing their deposit.

    “These are buyers trying to differentiate themselves by showing a willingness to go above appraisal and say, ‘I’m not afraid to put in a bigger down payment. I’ll make sure I’m eligible for this loan, ”said Billy Rose, co-founder and president of The Agency.

    A strong buyer is also someone who accepts as short an escrow period as possible. Escrow is the time between signing a contract and completing the sale. “The more you are in receivership, the more potential you have for the buyer to reconsider what they’re doing,” Rose said.

    How determined is this buyer?

    Sometimes a rejected mortgage application or an unexpected job loss can cause a buyer to withdraw from a contract. But often a successful deal depends on the buyer’s commitment. “A buyer can promise the world, but then they get a 70 page inspection report and they’re like, ‘Whoa, you know what, it’s not worth it,'” said Lauren Forbes, co- head of the Los Angeles-based Forbes Corrales Coastal Group at Compass.

    Some home buyers write personal cover letters to reinforce their offerings, which gives insight into their reliability as buyers. “We’ll see a beautifully written letter, but then I’ll see the wrong address,” Forbes said. “By that I can tell that they also made an offer on another property. “

    A buyer with a few rejected offers can be very determined to make it work, Roy said. “But if they’ve lost 10, you want to get to the bottom of it to see if it’s because of them,” she said.

    Some of the things to ask are if the buyer has worked with their lender before, which increases the chances of a smooth financing process and a quick close. It is also helpful to know if the home buyer has any other offers pending, which can show how committed they are to a particular transaction.

    “If you think about it, when we have an accepted offer the buyer sort of goes out and the seller is married, locked into the deal,” said Learka Bosnak, who leads the Heather & Learka team at Douglas Elliman with Roy. . “They can’t change their mind about the buyer. But the buyer can go out with someone else at the same time.

    Counter offers

    In a multi-offer environment, agents say that presenting a counter-offer to everyone ensures fair treatment and allows sellers to get the highest price and the best deal.

    “Sometimes people will go above and beyond at the asking price,” Rose said. “Sometimes they’ll use what’s called an escalation clause that basically says, ‘I’ll give you X dollars on top of the highest price you get. “”

    A counteroffer should describe the seller’s preferences, such as a sale-leaseback agreement or a shorter emergency period, both of which gained popularity during the pandemic. Sellers can also indicate what closing costs they are willing to incur and what furniture and appliances they would leave behind. Sellers, however, should exercise caution when stating terms. A 10-day loan contingency, for example, can be a daunting task right now, as lenders struggle to deal with the influx of mortgage applications.

    “You don’t want buyers to have an unrealistic contract because then they default from the start,” Roy said.

    Sellers can also choose to disclose the highest price they have received so far, allowing buyers to adjust their bids. Still, “it depends on the price increase,” Kallick said. “Can you reasonably expect more than that?” Or are you already at a place that is basically a record breaking price? If you go too far, you risk losing all of your interest.

    When finalizing a winning bid, sellers should also consider a back-up bid, Forbes said, so that if the first bid fails, they can avoid re-listing the house. Returning to the market after a failed sale can undermine the attractiveness of the property and possibly lead to a low purchase price.

    “Right now the market is doing very well,” Hernandez said. “You don’t want to lose an opportunity with a buyer. Because of this, everyone takes a close look at every line on the offer, making sure the deal comes true.

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    When are taxes due in 2021? http://lostnomad.org/when-are-taxes-due-in-2021/ Thu, 11 Mar 2021 06:19:18 +0000 http://lostnomad.org/when-are-taxes-due-in-2021/

    Pay taxes is something we all need to do to anyone who earns an income, and knowing when they are due could help you avoid the hiccups. Each year, the default tax filing deadline is April 15, and 2021 is no exception.

    Sometimes it happens that April 15th falls on a Saturday or Sunday. When this is the case, the tax filing deadline is extended by a day or two, as needed. In other words, if April 15th is a Saturday, the IRS will not move the deadline until Friday 14. Instead, it will extend the deadline to the following Monday. But in 2021, April 15 falls on a Thursday, so you should plan to file your tax return by then.

    Image source: Getty Images.

    Will the IRS extend the 2021 tax filing deadline due to the pandemic?

    Many people were thrown on a loop this year when the coronavirus outbreak exploded in March. As such, the IRS gave filers a three-month extension and extended the tax filing deadline to July 15. Not only did the filers have three more months to file a tax return, they also had three more months to pay any taxes. debt they owed from 2019 without incurring interest or penalties on this amount.

    But it remains to be seen whether the IRS will allow a similar extension in 2021. Even though there are several promising coronavirus vaccines in preparation, they may not be deployed to the general public before mid-2021 or even beyond. As such, there’s a good chance the pandemic will still be an issue until the April 15 tax filing deadline of next year.

    That said, this year the pandemic took everyone by surprise. Next year, it won’t be a surprise – it will be more of an ongoing situation, and so, in theory, reporters should have the wherewithal to get around it. In fact, many tax professionals have switched to online services and have secure portals where clients can submit tax documents, so even if in-person meetings are not secure in the months leading up to April 15, 2021, filers should still have a way to do their taxes on time.

    Of course, those who fail to complete their taxes by April 15 of next year can still apply for a six-month extension. The IRS automatically grants these extensions to filers who request one. But tax extensions don’t actually give filers more time to pay off an overdue tax debt – they just allow them to take longer to submit a return without incurring a non-filing penalty.

    Get a head start on your 2021 tax return

    Chances are, the world is still pretty volatile when taxes are due in 2021. Your best bet, then, is to get the ball rolling when you get back as soon as possible. Typically, you will receive the tax forms you need, such as your W-2 and 1099 forms, by the end of January. Once you’ve done that, you can start working with your tax preparer to prepare your return (or if you’re filing just one, you can start the process yourself).

    Also, keep in mind that you are allowed to submit a tax return before the filing deadline, and the sooner you do, the sooner you will get a refund if you owe money. The IRS typically starts accepting tax returns at the end of January, so if you find yourself ahead of the game, you could be in line for some money much sooner than most tax filers.

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