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Financial

WASHINGTON — Pressured by consumer-protection regulators, the Federal Housing Administration is expected to end one of its most controversial practices: charging borrowers interest on their home mortgages for weeks after they’ve paid off the entire principal balance.

Though FHA officials declined to discuss the matter, the agency will have to eliminate its long-standing policy of collecting a full month’s worth of interest — hundreds of dollars extra in many cases — even when borrowers terminate their loans earlier.

For instance, if you pay off your FHA loan July 3 in order to buy a new house with a conventional mortgage, the FHA will demand interest charges on your mortgage through July 31, collecting it out of the settlement proceeds. read more »

 

WASHINGTON — Homebuyers considering a government-insured mortgage should make extra room in their budgets.

In an effort to reduce a potential budget shortfall, the Federal Housing Administration (FHA) will require homeowners to pay a monthly insurance premium for a longer period. This follows a decision this year to raise the premiums for all borrowers, the fifth such increase since 2009.

Although the increase should bolster the agency’s bottom line, it will make things more expensive for borrowers who depend on FHA-insured mortgages.

The insurance premium that buyers pay in addition to their monthly mortgage payment usually expires once 22 percent of the principal loan is paid. Now, all new borrowers will have to pay the premium for at least 11 years and up to the entire duration of their mortgage, according to the rule that went into effect Monday. read more »

 

OLYMPIA — The average annual wage in Washington increased 3.4 percent in 2012, to $51,595, surpassing $50,000 for the first time, according to the state Employment Security Department.

The average weekly wage rose from $959 to $992. These figures include only those wages that are covered by unemployment insurance.

Much of the increase was driven by a 6.1 percent increase in the number of insured workers earning more than $75,000. Overall, the average number of workers in Washington covered by unemployment insurance grew by 52,519 in 2012, an increase of 1.9 percent, and total earnings grew by nearly $7.4 billion, an increase of 5.4 percent. read more »

 

WASHINGTON, D.C. — A bill that would keep federally subsidized student loan rates from doubling in July fell short of the votes needed to move it forward for debate in the U.S. Senate. The vote June 6 on advancing the Student Loan Affordability Act of 2013 was 51-46, short of the 60 votes needed to move to debate.

If Congress fails to act, student loan interest rates will double from 3.4 percent to 6.8 percent on July 1. According to the U.S. Department of Education, that would impact 104,863 students in Washington state who carry more than $390 million in subsidized Stafford Loans. The Project on Student Debt reports that Washington state college seniors who graduated in 2011 had an average of $22,244 in student loan debt. read more »

 

OLYMPIA — Borrowers who submitted a valid foreclosure payment claim through the National Mortgage Settlement will receive a check this month for approximately $1,480, much higher than the amount of $840 first announced.

Eligible borrowers had their mortgage serviced by one of the settlement’s five participating mortgage servicers, lost their home to foreclosure between January 1, 2008, and December 31, 2011, and submitted a valid claim form. The servicers in the settlement include Ally (formerly GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo.

These checks come from a $1.5 billion payment pool negotiated by attorneys general across the United States and set aside as part of the National Mortgage Settlement. Payment does not limit a borrower from seeking relief through a separate lawsuit or other claims. read more »

 
Financial

One of my clients brought by a ledger his mother kept from January through February 1956. His mom was trying to track where all their money was going because they had no idea why they didn’t have enough left at the end of every month. What’s fascinating to me about this ledger is the impact inflation has had over the last 57 years. Here are a few items from this 1956 ledger that caught my attention: rent $40 per month; car payment $44 per month; gas & electric $11 per month; groceries about $80 per month; black and white TV payment $13 per month; and a swamp cooler payment of $6 per month. Their income was $77 per week; $309 per month; $3,706 per year.

When I plug some of these numbers into the Bureau of Labor statistics inflation calculator I found that $40 for rent in 1956 would be $342 today. I can’t imagine a family could find a home to purchase or rent at $342 per month today. read more »

 
Financial

Edward Jones financial advisor Donald Logan is hosting a free educational seminar titled Family Matters with Long-term Care on June 27 at Edward Jones Investments, 2416 NW Myhre Road. Ste. 102 in Silverdale.

During the seminar, participants will learn more about:

  • The common funding options to provide quality long-term care
  • How long-term care insurance can play a significant role in helping to preserve one’s assets
  • How one can take control of where and how he or she receives long-term care services.

The one-hour seminar is free, but space is limited. To make a reservation, call Logan or Beth Halvorson at 360-692-1216.

 
Financial

It probably doesn’t show up on your calendar, but May is Disability Insurance Awareness Month. And you might agree that such a month is useful, when you consider the following:

  • Three in 10 workers entering the workforce today will become disabled before retiring, according to the Social Security Administration.
  • At age 42, you are four times more likely to become seriously disabled than to die during your working years, according to National Underwriter Life & Health.
  • Disability causes nearly 50 percent of all mortgage foreclosures, according to Health Affairs, a health policy research journal.

Given these statistics, it’s not surprising that the Life and Health Insurance Foundation for Education (LIFE) sponsors Disability Insurance Awareness Month to encourage Americans to address their disability income needs. read more »

 
Financial

Interest rates are at historic lows. But they will rise eventually. If you invest in fixed-income vehicles, such as bonds, what might higher rates mean for you?

As is almost always the case in the investment world, there’s no simple answer. First, it’s important to distinguish between short-term and long-term interest rates. The Federal Reserve is determined to keep short-term rates low until unemployment improves, but, in the meantime, longer-term rates may well rise.

Depending on your situation, a rise in long-term rates can present both opportunity and concern. The opportunity: Rising rates can mean greater income if you invest in newly issued bonds. read more »

 
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