CitiBank To The "Rescue"

CitiBank Strikes Again

Most consumers are aware that the credit card vendors are raising their rates, lowering limits, enacting fees, and just outright closing accounts of their card holders before the new law comes into effect in Feb. 2010. Credit card holders must always remember that the credit card vendor will never look out for your interests; only their own. You are their meal ticket and they want you fattened up. This is all about making money off of (or taking from) the consumer and enriching the banks.

Now comes CitiBank with their latest attempt to appear as the white hat good guys riding in on their white horses to offer the card holder a way to reduce their interest rates. By using circular logic they offer you a reduction of the interest rate (that they just jacked up) if you regularly spend more. (I smell a trap at the pass awaiting all who enter there.)

Please read the linked article below and be aware that this is probably just the first of many more schemes and gimmick offerings by the credit card industry to get deeper into your pocket and keep their hand in there longer.

I don't know if I should recommend you take aspirin or oxygen as you read this. But I will say this: BEWARE - THE CONTENT OF THIS ARTICLE COULD BE VERY HARMFUL TO YOUR FINANCIAL HEALTH.

http://www.thestreet.com/story/10630251/1/citigroup-gets-creative-to-boost-cards.html

United Credit Source

Foreclosures Hitting More People With Good Credit

WASHINGTON - 11/19/09

The foreclosure crisis likely will persist well into next year as high unemployment pushes more people out of homes, pulls down housing prices and raises concerns about the broader economic recovery. The latest evidence was a report Thursday that a rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure. That's a shift from last year, when riskier subprime loans drove the housing crisis.

The report from the Mortgage Bankers Association also found that 14 percent of homeowners with a mortgage were either behind on payments or in foreclosure at the end of September. It was a record-high figure for the ninth straight quarter. The data suggest the housing market and the broader recovery will remain under pressure from the surge in home-loan defaults, especially as unemployment keeps rising. Lost jobs are the main reason homeowners are falling behind on their mortgages.


After three years of plunging prices, the housing market started to rebound this summer. That lifted hopes for the overall economy. But analysts say there are too many foreclosed homes that have yet to be dumped on the market and expect further price declines.

Among states, the worst damage is still concentrated in the states hardest hit from the start: Florida, Nevada, California and Arizona. Together, they accounted for 43 percent of new foreclosures. One in four mortgages in Florida were either past due or in foreclosure, the most in the U.S. Nevada was close behind at 23 percent.


"There's no indication in this data that foreclosures are going to abate anytime soon," said Mark Zandi, chief economist at Moody's Economy.com, who projects that nationwide home prices will fall up to 10 percent before bottoming next fall.

Driven by rising unemployment, prime fixed-rate loans to borrowers with good credit accounted for nearly 33 percent of new foreclosures last quarter. That compares with 21 percent a year ago. Many laid-off homeowners might be able to survive on their savings for a while, but "the longer the economic situation stays in place, the less likely they are to hold on," said Jay Brinkmann, chief economist at the Mortgage Bankers Association. In markets where foreclosures already are high and still rising, prices likely will remain soft. That will cause developers to keep their bulldozers idle and prevent the industry from making a big contribution to the economy's recovery. "Builders only start homes when they can make money," said John Burns, an Irvine, Calif.-based real estate consultant. "In a lot of areas, until prices go back up, construction doesn't make any sense."

The crisis has struck people like Betty Wilson of San Diego. She was laid off a year ago from her job at an insurance company. Since then, Wilson has managed to pay her $1,090 mortgage bill from collecting unemployment benefits, renting out a room and dipping into savings. But money is running low. She fears she won't make her payment for December. Wilson, 56, said she has tried to get her mortgage company, GMAC Mortgage, to lower her 6.25 percent interest rate or give her a temporary break from payments. Many mortgage companies will let a borrower skip up to six months of payments, though they require that the money be paid back eventually. After The Associated Press inquired about her case, a GMAC spokeswoman said Thursday that the company would offer Wilson reduced payments for four months, "while we continue to review her financials for a permanent solution."

After a typical recession, foreclosures peak about six months after the unemployment rate does. But the process could take longer this time, in part because loan-modification programs and new state laws have prolonged the process. Unemployment, now at 10.2 percent, isn't expected to peak until next spring or summer. Another unknown is the effectiveness of the Obama administration plan to attack the foreclosure crisis. As of last month, about 20 percent of eligible borrowers, or more than 650,000 people, had signed up. But most of those enrolled have been chosen for trials lasting up to five months. About 4 million homeowners were either in foreclosure or at least three months behind on their mortgage payments as of September, according to the mortgage bankers group. Even if some of them manage to stay in their homes, the market is likely to absorb a wave of new foreclosures. Those properties are concentrated in states like Florida and other already beleaguered areas.

Subprime loans with adjustable rates have fallen to 16 percent of new foreclosures, from 35 percent a year earlier. Loans backed by the Federal Housing Administration also show rising signs of trouble. More than 18 percent of FHA borrowers are at least one payment behind or in foreclosure.


The Mortgage Bankers Association's quarterly survey of 44.6 million loans is considered the most authoritative report on mortgage delinquencies. A separate report, issued monthly by foreclosure listing service RealtyTrac Inc., is based on courthouse filings.

By ALAN ZIBEL, AP Real Estate Writer - 11/19/09


More articles from ALAN ZIBEL - http://ap-127553.newsvine.com/

United Credit Source

Stop Payment Checks Can Come Back To Bite You

STOP PAYMENT ORDERS ON CHECKS DON'T ALWAYS WORK

A Watauga, Texas couple wrote a check and stopped payment on it at their bank the next day. Six months and six days later their bank, Washington Mutual, cashed the check for a customer who presented the check for payment. The couple was out $1,350.00 and the bank refuses to help. I did some research after I read this story. It turns out that the current standard banking practice allows banks to place a date limit on stop payment requests. There is no hard specific rule on how long a stop payment order is in place. Banks are free to make up their own policies in this matter.

Most banks now have a 6 month limit on stop payment orders. In order to continue a stop payment order, you must renew your stop payment request every six months, paying a substantial fee each time you renew. This seems completely outrageous, but it has apparently become a standard banking practice.

Further, if a check comes in to your bank that is dated more than six months old, at their discretion, your bank can decide whether it wants to pay the check or bounce it based on the old date. This also seems ridiculous but appears to be standard banking practice.

I checked these rules with my bank. They told me their policy was essentially the same as what I outlined above. After six months, a stop payment order expires. If a check comes in older than six months, they usually don't bother to check the date and process it anyway. Most checks are processed in bulk, and therefore they do not see the dates on the checks unless presented in person. If there are insufficient funds, the account owner gets nailed with overdraft fees. The only way to avoid this is to pay a $30 (approx.) stop payment order every six months until the check arrives. If it never arrives, you can continue to pay those fees forever.

Apparently the only safe way out is to close your account and open a new one. The fine print of the checking account agreement in that multi-page contract you signed when you opened your account will address the bank policy, or possibly, in the stop payment request form that you filled out.

Even if you have a statement like "Void after 120 days" printed on your check you can still be stung by your bank. Again, the fine print of the checking account agreement in that multi-page contract you signed when you opened your account will address the bank policy. Policies like these are in place to make it easier for the bank in their processing of checks, and are not intended to afford you, the customer, with any effective permanent protective measures.

This can be extremely frustrating and expensive should you get caught in this type of situation. However, the standard practices within the banking industry appear to rule.

Bottom line: A lot of people out there think that a stale-dated item cannot legally be paid. That is an urban myth and is simply not true. So, be very careful. It is always safer to not issue the check than to issue a stop pay order to your bank.

United Credit Source

Banks now need customer consent on overdraft fees

Banks will have to secure their customers' consent before charging large overdraft fees on ATM and debit card transactions, according to a new rule announced Thursday by the Federal Reserve.

The rule responds to complaints from consumer groups, members of Congress and other regulators that the overdraft fees are unfair because many people assume they can't spend more on a debit card than is available in their account. Instead, many banks allow the transactions to go through, then charge fees of up to $25 to $35.

For small purchases, such as a cup of coffee, the penalty can far exceed the actual cost of the transaction.

Under the Fed's new rule, which will take effect July 1, banks will be required to notify new and existing customers of their overdraft services and give customers the option of being covered. If customers don't "opt in," any debit or ATM transactions that overdraw their accounts will be denied, Fed officials said.

Many consumers do want checks and regular electronic bill payments to be covered in the event of an overdraft, Fed officials said. As a result, those transactions aren't covered by the rule.

Banks earn as much as $25 billion to $38 billion annually from overdraft fees, Fed officials said, but that total includes check overdrafts.

Many larger banks, including Bank of America Corp., JPMorgan Chase & Co., U.S. Bank and Wells Fargo & Co. began instituting similar "opt-in" plans in late September after coming under fire for the fees.

But consumer groups and other regulators, including Federal Deposit Insurance Corp. Chairman Sheila Bair, said new rules were still necessary to ensure smaller banks followed suit.

Many lawmakers have criticized the Fed for failing to provide sufficient consumer protection in the past, a defect they say contributed to last year's financial crisis. Sen. Christopher J. Dodd, D-Conn., on Tuesday introduced a bill that would strip the Fed of its consumer oversight.

Dodd also proposed legislation last month that would have imposed limits similar to the Fed's on the banks' ability to charge overdraft fees.

By CHRISTOPHER S. RUGABER, AP Economics Writer 11/12/09

United Credit Source

Five Ways to Make Credit Cards work for you

We've all been warned of the dangers of credit cards, and how they can work against you. However, they can also work in your best interest if you follow these five simple rules.

1. Pay off the balance each month. This will keep you from having to pay interest on your purchases and keep your spending from snowballing out of control.

2. Make your payments on time. If you don't, you can accrue late fees and trigger an interest rate increase.

3. Limit the number of cards you have. You really don't need more than a few. Applying for lots of cards causes inquiries on your credit report and can hurt you credit score.

4. Read the fine print of your contract so that you know what your credit limit is, your interest rate & when your payment is due. You need to know what you're getting into.

5. Don't exceed 50% of your credit limit. Keep it no more than 30% if possible. Credit Bureaus are interested in how much of your credit is available at any given time and that can affect your credit score as well.

If you're sick of credit cards and want to swear them off, that's understandable. If you're tired of receiving those pre-approved offers in the mail, you can opt out by calling 1-888-5 OPT-OUT or visiting this website .

United Credit Source can help educate you on your rights as a consumer and how to help improve your financial outlook and stability. There's hope, no matter what your situation.