agencies-to-propose-amending-cra-regulations-to-conform-to-hmda-regulation-changes-and-remove-references-to-the-neighborhood-stabilization-program

The federal bank regulatory agencies today issued a joint notice of proposed rulemaking to amend their respective Community Reinvestment Act (CRA) regulations primarily to conform to changes made by the Consumer Financial Protection Bureau (CFPB) to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA).

Since 1995, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have conformed certain definitions in their respective CRA regulations to the scope of loans reported under Regulation C and believe that continuing to do so produces a less-burdensome CRA performance evaluation process. In particular, the agencies are proposing to amend their CRA regulations to revise the definitions of “home mortgage loan” and “consumer loan,” as well as the public file content requirements. These revisions would maintain consistency between the CRA regulations and the recent changes to Regulation C, which generally become effective on January 1, 2018.

In addition, the draft proposal contains technical revisions and would remove obsolete references to the Neighborhood Stabilization Program.

Comments on the proposal will be accepted for 30 days after publication in the Federal Register. The agencies anticipate that the proposed amendments to their CRA regulations will become effective also on January 1, 2018.

• Attachment (PDF)

Media Contacts:

Federal Reserve Board

Susan Stawick

202-452-2955

FDIC

Greg Hernandez

202-898-6984

OCC

William Grassano

202-649-6870

agencies-to-propose-amending-cra-regulations-to-conform-to-hmda-regulation-changes-and-remove-references-to-the-neighborhood-stabilization-program

The True Cost of Gray Divorce

You’re sitting across the kitchen table from your spouse, when they inform you that they want to separate. After decades of marriage, you’re facing divorce.

SEE ALSO: QDRO: Critical Letters in a Divorce Case

While becoming unwillingly single can be difficult at any stage of life, splitting up after the age of 50 can be doubly devastating, because you have a limited amount of time to financially recover before retirement.

According to Pew research, you’re hardly alone. That’s because while the American divorce rate has actually declined for every other age demographic, the divorce rate among U.S. adults ages 50 and older has roughly doubled since the 1990s.

America is facing what’s being called the “gray divorce epidemic.” Many studies have been done about its cause, some concluding that once the children leave the nest, couples discover they’ve lost their shared purpose and don’t have much in common anymore. But no matter what the underlying cause, divorce is expensive, and once it becomes inevitable, you have little choice but to reactively take steps to protect yourself financially.

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How Expensive is Divorce?

Right from the first phone call, depending on their ZIP code, a divorce attorney might charge you anywhere from $250 to $650 an hour. In brass tacks, the average cost of an amicable divorce falls somewhere between $25,000 and $50,000. But being that divorces are typically emotionally charged, clean breaks are rare. Typically, the longer you’ve been together, the more assets you’ve acquired, and the more expensive the process.

I’ve seen couples spend $200,000 in legal fees in a tug of war over a $1.5 million estate. That’s partly because older people, while usually not involved in long, drawn-out child custody battles, have less time to rebuild financially, which means divorce can literally be a fight for your future standard of living.

It’s difficult to recover from divorce when you’re older because, after 50, you’re more likely to have maxed out your earning potential, your assets may be mostly fixed, and your employment opportunities tend to become more limited. And while it’s true that older divorcers generally have more assets than younger people, they often don’t have as much money as they think they do.

Case in point: I worked with a 67-year-old client who had over $1.5 million in a traditional IRA, and whose husband had filed for divorce. He was insisting that he was entitled to half that amount, or $750,000. He wanted a cashier’s check.

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He’d forgotten that the money in traditional IRAs — and also 401(k)s — is taxed when it’s withdrawn (the actual percentage depends on things like the amount of your other income, along with the amount of the distribution). Plus, if you’re under age 59½, an extra 10% early-withdrawal penalty may apply.

See Also: Financial Triage for the Suddenly Single

Of course, there are divorce decree exceptions, which allow the IRA or 401(k) participant to forgo the 10% penalty (if the money is rolled over into the spouse’s IRA), but the money is not liquid, and once it’s withdrawn, combined federal and state tax rates as high as 52% (depending on your state’s income tax rate) could be assigned.

And what about brokerage accounts? If you need to liquidate investments in your brokerage account(s) to settle a divorce decree, you’ll get hit with long-term capital gains (as high as 20%, but it varies).

How much you end up paying depends on the factors listed above (such as the tax rate of the state you live in), but I’ve seen jaws literally drop open in disbelief over the actual post-tax value of once-bragged about brokerage accounts.

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Emotion: The Biggest Expense of All

But retirement and brokerage accounts can seem relatively straightforward when compared to the division of other assets. Probably the key asset that gray divorcers must divide is the value of the home.

What makes the home asset substantially more complex is that, often, one of the partners wants to stay put. This means they may have to give up their rights to other assets in return for a house that could experience a substantial decline in value in a relatively short period of time.

Emotional attachments to assets can be tricky. I worked with the family of a well-employed, recently divorced woman who bypassed her claim to all other marital assets in exchange for keeping the house, which, when appraised, had almost $1.6 million in equity. Even though she agreed to give up the balance of her 401(k), she was still only in her 50s, and with seemingly many more years left to work. At the time of the divorce, it appeared she’d made out reasonably well. Unfortunately, in rapid succession, she was forced to retire due to a health emergency that coincided with the onset of the 2008 real estate collapse. Eventually, with all her eggs in that one basket, she lost her only real asset to the bank via repossession.

But, conversely, throwing up your hands and agreeing to sell a house is not cheap, either. First, there are the repairs, upgrades and inspections, which often lead to still more repairs. Next, the cost disposal of the home is going to be at least 6% to 7% of its value.

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Then, afterward, whether you go on to buy or rent, the next financial shock to the system of a gray divorcer is the current cost of housing, which is almost certainly higher than when you purchased the home. This means your budget is going to be strained and your settlement (or alimony, in certain cases) is going to quickly lose purchasing power.

Yet all of the above are just the basics. Other common financial sticking points for older divorcing couples include the division of debt, the difficulties of splitting hedge funds or private equity holdings, premarital assets that have risen in value, comingled inheritances that are now marital property, pensions, collectibles, Social Security, and the fact that the person paying alimony might be forced to carry life insurance with a death benefit for the duration of his or her obligation to their former spouse.

Stay Together, or Part as Business Partners

So, divorce is especailly costly for people over 50. Is there a solution? First, if you have no choice in the matter, and you absolutely must divorce, save time and money by knowing the precise value (and amounts) of every asset before meeting with attorneys. Meet with your Certified Financial Planner™ professional and your accountant, together with your spouse (if possible).

Another way to save substantial sums of money, if the split is amicable and the value of the assets are clear, is to steer negotiations and the division of assets and debts toward an experienced divorce mediator. There is no law that states you must hire a divorce attorney. As illustrated above, hiring attorneys could result in 15%, or even more, of your assets unnecessarily going to legal fees. Just remember, you were married to your spouse for a long time, and if you extend the olive branch, and are fair, even if the marriage can’t be saved, consider it a business transaction.

That 15% savings may make a huge difference to your standard of living down the line.

See Also: Strategically Thinking About Divorce

Scott Hanson, CFP, answers your questions on a variety of topics and also co-hosts a weekly call-in radio program. Visit HansonMcClain.com to ask a question or to hear his show. Follow him on Twitter at @scotthansoncfp.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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The True Cost of Gray Divorce

Car-veat Emptor: Tips to Control Car-Buying and Repair Costs

Last week I spent a couple of hours helping a client buy a new car. Betty, who is in her mid-70s and divorced, had been in an accident a week before that totaled her car. Upon learning of her misfortune, I offered to accompany her to help buy her new vehicle. While such assistance isn’t a service I routinely offer clients, my experience told me a single woman might need an ally when dealing with an automotive purchase.

SEE ALSO: How Do You Know When You’re Ready to Retire?

For routine oil changes, I usually take my car to a well-known national auto repair shop. For anything more than an oil change, I take it to a trusted local repair shop. I’ve been a customer of the local repair shop for nearly 20 years and feel like they practice their profession the same way I practice mine — putting the client’s interest first. However, I don’t have the same level of trust with the national shop.

At the national shop that I go to I like to wait while my oil is changed, and over the years I’ve noticed the repair estimates discussed with women tend to be expensive and complicated. Rarely do the women opt for a second opinion, ask what minimum work is required or ask if there is a less expensive option.

Gamesmanship and lack of transparency make the car-buying process an unpleasant experience in many cases. Betty knew what car she wanted and was agreeable to a couple of color options. Unfortunately, the dealership didn’t have any of those colors and pushed her to buy the colors in their inventory. I’d checked the inventory of a couple of nearby dealerships and was quick to share with the salesman that a local competitor had the colors we wanted in stock. In the end, we negotiated a purchase of the car Betty wanted for just a few hundred dollars over the invoice price. It wasn’t easy, and Betty was grateful I was there to help.

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See Also: Death of a Spouse: The Under-Discussed Risk in Retirement

Here are a few tips to help level the playing field when dealing with car buying and servicing:

• Do Your Homework. Car pricing can be found at numerous places on the Internet. Car repair costs can also be found on websites such as RepairPal and YourMechanic. This info can give you an idea if the repair estimate is in line with the diagnosed problem.


• Get a Second Opinion. Car repairs are outside the circle of competence of most of us. If you’re presented with a four-figure repair estimate, seek a second opinion.


• Beware of Framing. When the salesman presented the initial offer, he immediately highlighted the monthly payment. This is a common tactic to make a purchase seem more palatable. $325 per month seems a lot less than $23,000. I was quick to bring the discussion back to the figure that really mattered — the bottom line. When dealing with repairs, insist on an itemized estimate.


• Good Cop / Bad Cop. Don’t go alone. Take a friend or family member along and ask them to play the “bad cop.” Let the bad cop mention nearby dealers and push for pricing discounts. It’s always easier to stand firm when you have someone by your side.

The purchase and maintenance of one’s car is a major expense in most households. Be a wise consumer and make sure you aren’t paying more than you need to.

See Also: Is $1 Million Enough to Retire?

Mike Palmer has over 25 years of experience helping successful people make smart decisions about money. He is a graduate of the University of North Carolina at Chapel Hill and is a CERTIFIED FINANCIAL PLANNER™ professional. Mr. Palmer is a member of several professional organizations, including the National Association of Personal Financial Advisors (NAPFA) and past member of the TIAA-CREF Board of Advisors.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Car-veat Emptor: Tips to Control Car-Buying and Repair Costs

Mortgage, new car? Negotiate loans to save big money on purchases - Chicago Tribune

Seeking to remodel a kitchen or looking for ways to free up some cash for another purchase?

One way to save big bucks is to be a better negotiator when taking out a loan. Whether it’s a new or refinanced mortgage or car loan, financial experts say consumers are leaving thousands of dollars behind by simply not asking for better terms. That means less money to buy home items, add after-market improvements for a car or spend on other goods.

David Osborn and Paul Morris, authors of the New York Times-best-selling book “Wealth Can’t Wait,” said people negotiate the house’s price, but never consider negotiating with their lender, even though it may eventually save them more money.

“If you negotiate down one-eighth of (an interest-rate percentage) point and live there 30 years, it could be $50,000 in savings. You should negotiate harder over the money than you do over the price of the house,” Osborn said.

Similarly, few people negotiate car loans, said Miron Lulic, founder and chief executive officer of SuperMoney, a financial-services platform. Citing data from the Federal Reserve, 76 percent of people negotiate the car’s price, but only 31 percent of people negotiate their car’s loan. When it comes to car loans, dealers know buyers will focus on the payment, not the total cost of ownership, he said. That means the dealer’s finance office can hide ballooning payments later in the life of the loan.

To save money — which could be spent elsewhere — start by shopping for loans. For mortgages, home buyers should apply with at least two lenders, say Osborn and Morris. Greg McBride, chief financial analyst at Bankrate, agreed.

“Doing so gives you a couple of advantages. One, it helps you sort out who’s got the best deal. And it also gives you somewhat of a bridge in negotiating things like rates and fees paid,” McBride said.

Try to apply with different lenders in the same day, but don’t worry about having multiple inquiries hurting credit scores, McBride said. Multiple inquiries within that 30-day period are treated as one.

McBride said to consider mortgage application fees and other costs when comparing lenders’ offerings. These include fees charged by the lender to provide the credit, as well as third-party costs passed on to the applicant, including for appraisals, credit reports, home inspections, title insurance and taxes.

A home buyer can try to negotiate a lower fee or choose a different third-party vendor for those services.

Watch out for “junk fees,” McBride, Morris and Osborn said, such as high processing fees or delivery charges. Lenders can waive or lower their fees, Morris said.

“Are they entitled to a $100 processing fee, sure. One thousand dollars? That’s excessive,” Morris said.

If the mortgage lender says there are no closing costs, it is likely the lender is charging a higher interest rate to make its money, Osborn said.

Like house hunters, car shoppers should also shop for loans ahead of time before heading to the showroom, McBride and SuperMoney’s Lulic said. Car financing is completely negotiable, although in the dealer’s finance office, there’s little transparency, Lulic said. The average new-car loan is now close to 70 months, according to car-research website Edmunds.com.

Having loan offers in hand gives buyers both knowledge and leverage, they said, and can be used as a fallback option if the dealer’s offer isn’t as good. Buyers who take the dealer’s offer need to scrutinize all fees and question the purpose. Avoid the hard sell by being willing to walk away, they said, which is easy to do with a new car purchase since there’s usually another dealer close by.

Considering the average new car loan is closing in on six years, Lulic said it can be worthwhile to look into refinancing an expensive car loan.

“You can save a ton of money, maybe even shorten the life of the loan,” he said.

Debbie Carlson is a freelance writer.

How to gracefully offer help to a broke friend »

How to ask for money that is owed »

A friend still thinks you owe her money. You paid her. What next? »

If you don’t Instagram your festival experience, did you even go? On the Go Tours, a popular travel website, recently scoured Instagram and compiled a list of the most popular festivals around the world. Based on what? Hashtag, of course. And there’s an event to pique almost every interest — from beer drinkers (hint hint) to music junkies. Find out who took the flower crown with more than 3 million posts. All hashtag counts are as of August 2017.

Mortgage, new car? Negotiate loans to save big money on purchases - Chicago Tribune

Oil Market's Rally Loses Steam

• GDP


• Unemployment


• Interest Rates


• Inflation


• Business Spending


• Energy


• Housing


• Retail Sales


• Trade Deficit

GDP	2.1% pace in ’17, 2.4% in ’18 More »
Jobs	Hiring pace should slow to 175K/month by end ’17 More »
Interest rates	10-year T-notes at 2.4% by end ’17 More »
Inflation	1.4% in ’17, down from 2.1% in ’16 More »
Business spending	Rising 3%-4% in ’17, after flat ’16 More »
Energy	Crude trading from $40 to $45 per barrel in December More »
Housing	Existing-home sales up 3.5% in ’17 More »
Retail sales	Growing 3.5% in ’17 (excluding gas) More »
Trade deficit	Widening 4% in ’17, after nearly flat ’16 More »

Crude oil prices are treading water after the oil market rallied sharply last month. At about $47.50 per barrel, benchmark West Texas Intermediate is off slightly from a week ago because of lingering oversupply concerns. Despite pledges to cut production, OPEC actually boosted its collective exports. Meanwhile, U.S. oil production continues its slow but steady rise. And now, with the summer driving season wrapping up, oil demand is likely to soften.

We see WTI trading between $40 and $45 per barrel in December, down modestly from its current level. Global stockpiles of oil and refined fuels held in storage remain higher than normal, and global demand just doesn’t look strong enough to soak up the excess supply anytime soon.

Via E-mail: Energy Alerts from Kiplinger

Prices at the pump are largely holding steady. At $2.34 per gallon, the national average price of regular unleaded gasoline is down a penny from a week ago. We look for the average price to remain between $2.30 and $2.40 for the rest of the summer. The price of diesel, now averaging $2.53 per gallon, is also unlikely to move much.

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Natural gas prices are also stuck in a rut. At $2.96 per million British thermal units (MMBtu), the benchmark gas futures contract remains very close to our expected summer trading level of $3. A major heat wave could change that by stoking electricity demand and forcing gas-fired power plants to kick into high gear. But weather forecasts aren’t calling for such a scenario, meaning that gas demand figures to remain modest. That should keep gas futures prices near $3 per MMBtu until fall temperatures goose heating demand.

Source: Department of Energy, Price Statistics

Oil Market's Rally Loses Steam

There are 7 ‘sins’ the retail industry keeps committing and it's killing the stocks

Credit Suisse has released a list of “seven retail sins,” highlighting some problems faced by retailers that the firm’s analysts saw emerge in a slew of earnings reports over the past few weeks.

“Results last week, particularly in the sporting goods space, serve as a reminder of some of the key issues impacting the retail sector,” wrote Credit Suisse analyst Seth Sigman in Monday’s note to clients. “Our view is that retail is not dead, but needs to change, and take the pain.”

Major retail stocks including Dick’s Sporting Goods and Foot Locker plunged last week after reporting feeble sales, pulling down other retailers in their wake. After Foot Locker’s report, shares of Nike fell in response, down more than 5 percent since last Thursday.

As fears of Amazon dominance drag on the retail industry, Credit Suisse analysts will be looking for retailers that can tackle these seven “sins” to better protect themselves against gloomy sales.

Here are the seven “sins” as described by Credit Suisse.

1)“Pricing is too high, in an increasingly more price transparent world. We are seeing more retailers respond by lowering prices (most recently Dick’s), or trying to vertically integrate to support margins (e.g., Michaels).”

2) “Retailers that are over reliant on brands are in trouble, as those brands expand distribution and struggle with their own growth. We believe that was one of the key issues for Hibbett Sports and Dick’s. It’s a big issue for Bed Bath & Beyond as well.”

3) “Retail is over-stored.”

4) “‘Omni-channel’ still needs to be figured out.”

5) “E-commerce investments are disruptive to the model and seem to be never ending. Best Buy has openly discussed the need to continue investing. “

6) “Retailer cost structures are too high. We have recently seen the first round of cost cuts in years, including at Bed Bath & Beyond, Dick’s, Lowe’s, Party City, among others.”

7) “There is little, if any customer loyalty to retailers without their own brands.”

The worst performer in the S&P 500 this year is Foot Locker, down more than 50 percent. Macy’s, L Brands, Advance Auto Parts, Signet Jewelers and Under Armour are also among the 10 worst performers this year in the benchmark, making the list dominated by retail.

One retailer bucking the trend this year is Best Buy, whose shares are up 40 percent so far in 2017.

Best Buy “cut its prices, improved its online offering, enhanced the store experience and partnered with vendors, all of which supported a reacceleration in market share, and then margin improvement,” writes Credit Suisse in the note about the electronic seller’s resurgence.

There are 7 ‘sins’ the retail industry keeps committing and it's killing the stocks

Home loan mortgage calculator & apply now! & personal loans - monroviaweekly

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Home loan mortgage calculator & apply now! & personal loans - monroviaweekly

Why the 'Trump Effect' Continues to Affect Us

It’s kind of fun to watch the ways the stock market moves, and then theorize about what’s happening and why.

SEE ALSO: Donald Trump’s Presidency and Your Investment Portfolio

But if you’re reacting to each new “expert opinion” when managing your own portfolio, or examining every trend and pattern, well … good luck. It’s folly to imagine you can outguess the greed, optimism, fear and other emotions of Wall Street and your fellow investors.

How Wall Street Got the Election Wrong

Take, for example, the so-called Trump Effect, when stocks soared after the presidential election and then continued to produce record-setting highs.

It all seems pretty logical now, with a businessman-turned-president who is expected to cut taxes, roll back financial regulations and, in general, be corporate- and investor-friendly. But that giddy market optimism certainly wasn’t what most experts were predicting before the election.

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In contrast with what’s going on today, going into 2016, there didn’t seem to be a lot of confidence in the markets, here or globally, regardless of who the presidential candidates might be. Chinese markets actually used their “circuit-breaker” system multiple times, thereby suspending their markets, because things were so volatile. In the U.S., the S&P was down 5%, the Dow was down over 5.5% and small stocks as measured by the Russell 2500 Index were down 8%.

By all measures, it seemed the party was over and the bull market that started in 2009 finally might be running out of steam just as the election was getting close.

Conventional Wisdom Goes Awry

After the conventions, Hillary Clinton seemed to be Wall Street’s lesser of two evils: The market likes certainty — or so the conventional wisdom goes — and with her, at least you knew what to expect. Donald Trump was a wild card, the talking heads said. (And Clinton had a 90%-plus chance of winning, they told us.)

SEE ALSO: Why Trump’s Move to Dismantle Rule Protecting Investors Isn’t a Bad Idea

Of course, each party was predicting that if the other won, it would take the economy over a fiscal cliff. And even before the election, investors were wondering if they should just get out.

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So, the election-night surprise was Trump’s win, and not the futures market’s reaction. According to CNN Money, Dow futures dove 870 points at 12:10 a.m., about a half-hour after Trump was projected to win Florida. (To put that into context, on the worst day in 2008, that number was 800.)

And yet, by the time Trump gave his victory speech, things had rebounded somewhat, and the day after the election, the Dow finished up 257 points. That means the total swing in about a 12-hour period was 1,000-plus points, or more than 5.5%.

Investors’ Worst Enemy: Themselves

Since the election, the S&P is up over 10%, as of early July; the Dow is up over 12%, and the Russell 2500 is up almost 12%. And all those people who tried to guess at what to do just before and just after the election? A lot of them likely guessed wrong — selling low and then buying high to get back in.

Now, this may be one of the more well-known and recent examples of a profound market mood swing, but phenomena like the Trump Effect are not at all unusual.

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According to the most recent Dalbar study, the 2016 “Quantitative Analysis of Investor Behavior,” the main reason investors who participate in the markets underperform over time is psychology, due to behaviors such as panic selling and herding.

In other words, trying to time the market hurts far more than it helps.

No More Knee-Jerks … Take a Long-Term Approach

Why are investors so skittish? Information overload. We have so much information to sift through, it’s almost impossible to decide what’s good and what’s biased. And you can’t turn it off. It’s like trying to diet on a cruise ship.

We end up forming an opinion based on what we feel, and we tend to opinion shop until we find a financial professional who matches our preconceived biases, without really knowing that person’s track record or what information he or she has.

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That’s why, these days, for financial professionals, educating our clients has to be one of our top goals. Your adviser should be coaching you and monitoring your plan, making sure your risk level is appropriate for your situation and helping you navigate through conflicting signals.

Because, as you can see from the Trump Effect, the markets can move really quickly — for reasons that sometimes can, but often cannot, be predicted or explained.

Kim Franke-Folstad contributed to this article.

SEE ALSO: What Investors Need to Know About Risk

Blake Morris is a CERTIFIED FINANCIAL PLANNER™ professional with The Lloyd Group Inc., based in Suwanee, Ga., where he develops customized plans for retirees and soon-to-be retirees. Blake is licensed to sell insurance.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Why the 'Trump Effect' Continues to Affect Us

Avoid Getting Entangled by Taxes in Retirement

If you’re not careful about planning ahead, taxes could trip up your retirement plans.

SEE ALSO: 6 Tax-Efficient Strategies to Keep More of Your Money in Retirement

Taxes should never be overlooked in retirement planning. Fifty years ago, most Americans would have their homes as their largest assets. But now, with millions of Americans using IRAs and other retirement accounts, their retirement savings are often their biggest assets.

Too often we assume that our taxes will go down when we retire, but that’s not always the case. Even when you are doing the right things and planning ahead, you might be setting yourself up for a tax trap down the road. You might be paying into a retirement account and enjoying the immediate tax benefits, but that money could be taxable in the future.

It’s important to understand how those taxes can affect you in retirement based on your tax bracket, your filing status and other factors, including Social Security and pension benefits. You might even end up in the same or possibly a higher tax bracket in your retirement than you were while you were working.

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All of this underscores the importance of planning ahead for your retirement. You need to figure out which tax breaks, exemptions and deductions you will be able to qualify for when you have retired. When you start receiving Social Security, you will have to calculate your provisional income to see how much of it will be taxed.

Social Security can also muddy the waters as you try to figure out what your taxes will be in retirement. One thing to keep in mind in your retirement planning is that Social Security is taxed based on your other income, meaning you have to look at the tax rates and tax brackets to know how much of your Social Security will be considered as provisional income. With Social Security in the mix, you also have to understand what your effective tax rate is when you reach retirement. Throw in non-taxable interest, capital gains, dividends and other income, and the taxes can add up. This often requires some drilling down.

Too many of us are under the wrong impression that Social Security isn’t taxable. That’s simply not correct as up to 85% of your Social Security benefits can be taxable. The more income you pull in, the more taxes you will pay. If you file as an individual, you have to pay taxes if your combined income, including half of what you take from Social Security, is more than $25,000. In that case, as much as 50% of your Social Security benefits can be taxed. If your combined income is more than $34,000, you might have to pay taxes on 85% of your Social Security benefits. If you and your spouse have a combined income of more than $32,000 in combined income, you will have to pay taxes on what you draw from Social Security, with as much as 50% being taxable. If you and your spouse earn more than $44,000 in combined income, up to 85% of your Social Security benefits may be taxable.

SEE ALSO: Making Next Year’s Taxes Less Painful

Often people who decide to start taking Social Security benefits at 62, the earliest age to opt in, and continue to earn good incomes are hit the hardest when it comes to paying taxes on Social Security.

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There are other factors to calculate as you plan ahead to your retirement. When you reach age 70½, you have to start taking required minimum distributions (RMDs) from your IRAs and other retirement plans. The RMDs are based on calculations from a life expectancy table. More often than not, RMDs are taxed as ordinary income, though you can choose to send the funds to charity, making it a qualified charitable distribution (QCD) instead of taking the withdrawal. That can often prove an advantageous tax strategy in retirement. As you get older, RMD rules require you to take an ever-increasing percentage out of your retirement accounts, starting at 3.6% when you’re 70 and rising to 5.3% at 80 and 8.8% at age 90.

While it’s unpleasant to think about, your filing status also comes into play. Surviving spouses are often confronted with higher tax burdens going into a less favorable tax bracket after the loss of their loved ones.

You might have spent decades stashing your hard-earned income into retirement accounts. But you might also find that you will pay more taxes when you pull that money out of those retirement accounts than you saved when you put it in.

It’s daunting to think about. Nobody wants to pay higher taxes in retirement than they did during their years in the workforce. Thankfully, there are plenty of alternative strategies to help avoid some of these taxes and reduce your tax burden in retirement. These include diversifying your retirement savings in tax-deferred accounts like traditional IRAs and 401(k)s and tax free ones including Roth IRAs. You can also look at alternatives including life insurance policies, annuities, real estate investment trusts (REITs) and other investment possibilities.

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It’s important to bring in an experienced financial adviser who specializes in helping with retirement planning to ensure your retirement isn’t entangled by taxes and more of your money stays in your pocket.

Kevin Derby contributed to this article.

SEE ALSO: Taxes Can Be a Real Threat to Your Retirement

Don Ross, founder and president at Ross Wealth Advisors, has more than 25 years’ experience in the insurance and financial services industry. He has passed the Series 7 securities exam and holds a life insurance license in Ohio. Retired from the military after more than 20 years of service as a pilot in the Ohio National Guard, Ross lives in Upper Arlington, Ohio, and enjoys traveling, yard work and cycling. He and his wife, Joni, have three children: Judith, Ryan and Lance.

Comments are suppressed in compliance with industry guidelines. Click here to learn more and read more articles from the author.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Avoid Getting Entangled by Taxes in Retirement

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Do Lenders Allow You To Borrow Your Down Payment?

Is it okay to borrow your down payment? At first glance, the rules mostly say no. Except for a few programs, lenders prefer you to use your own resources. The risk of default goes down when homebuyers have “skin in the game,” and lenders know this.

But there can be ways around those rules. However, depending on the route you take, you may have to tread carefully.

Click to see your low-downpayment loan eligibility (Jul 23rd, 2017)

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Enjoy the Seasoning

Suppose that just before you apply for a mortgage, you apply for a personal loan or cash advance on your credit cards. Your lender will assume it’s for your down payment.

But, just like wood, borrowed money seasons and changes its properties. It becomes indistinguishable from money that you saved.

And, after a short time, lenders become blind (for down payment purposes only) to differences between your personal loan and money you earned, inherited or were given.

How To Borrow Down Payment Funds

For many lenders, it takes only 60 days for that blindness to set in. That means you’ll then be able to put your personal loan toward your down payment. No questions asked.

Take Your Time

However, not all lenders observe that 60-day cut off. Some want three or more months of bank statements. So it’s a good idea to land your personal loan several months before you make your mortgage application.

Lenders also look at your bank statements for large deposits, and they compare your average balance to your current balance. Leaving the money in there longer will reduce the chance of your average balance being a lot lower than your current balance.

Finally, getting your credit score into the best shape possible should be a big priority for you. Even a variation of a few points in your score can make an appreciable difference to the mortgage rate you’re offered. Use this time to improve it.

Protect Your Credit Score

Your personal loan application will hit your credit score. Not just once, but twice:

1. Every time a lender makes a “hard inquiry” (one where it accesses your credit report to decide whether to lend to you), your score is dinged. (Different rules apply when you’re rate shopping for a mortgage.)


2. Opening a new account reduces the average age of all your accounts. And that too damages your score.

Shop For A Mortgage Without Lowering Your Credit Score

Time Heals

Providing you make prompt payments on your new account, your score should bounce back within a few weeks.

What Is A “Good” Credit Score, And How Do You Make It Even Better?

So give your score breathing space. Some suggest you don’t open or close any accounts during the six months before you make a mortgage application.

Watch Your Debt-to-Income Ratio

Lenders may soon become blind to your personal loan when assessing your down payment sources. But they’ll see it when evaluating your ability to afford your new mortgage.

Central to that evaluation is your “debt-to-income ratio” (DTI). This is the proportion of your monthly income that goes out in regular monthly debt payments.

Your Debt-To-Income Ratio Can Tell You How Much Home To Buy

When you apply for your mortgage, by law you must disclose your personal loan balance and payment. And it’s likely to show up on your credit report anyway.

When Lenders Don’t Care If You’ve Borrowed

There is an exception to lender rules about borrowed mortgage down payments: when you borrow from yourself.

Most lenders (though fewer financial advisers) don’t mind you raiding your retirement accounts for your down payment. In fact, they often won’t count your payments back into your funds as part of your DTI.

You Don’t Need 20 Percent Down To Buy A Home

But borrowing from these funds is a big step. So check with your tax accountant before doing so to make sure you recognize all the pros and cons, including any tax implications.

Your 401(k)

Different 401(k) programs have different rules. So talk with the people who manage yours to explore your options.

Loans may or may not be available. You also need to know what will happen if you switch employers and leave the program before the loan’s fully repaid.

Read This Before Borrowing From Your 401(k) To Buy A Home

But, whatever your program’s rules, you won’t be able to borrow more than half your current balance, up to a maximum of $50,000. That’s the law.

However, there’s a legal exception if your balance is $20,000 or less: You can borrow the whole amount up to $10,000, subject to your program’s rules.

Your IRA

The rules for individual retirement accounts (IRAs) are stricter, certainly if you want to avoid standard penalties. They include:

• You can’t withdraw more than $10,000.


• You’re buying a home.


• You haven’t owned a home (or had any “ownership interest” in one) for the previous two years.


• You can borrow in this way only once in your entire life.


• You must use the funds within 120 days of their arrival.


• You may still have to pay income tax on the sum you withdraw.

How To Buy A House With No Money Down In 2017

You really need professional advice to make sure you comply with these and other rules. Or at least research your plans through the IRS website or call center.

Gifts from Family and Friends

You can use gifts from close family to fund all or part of your down payment. However, these will have to be fully documented, including a letter from each donor confirming the money is not a loan.

How To Give And Receive A Cash Down Payment Gift For A Home

Grants and Loans

Don’t forget to explore all your options for funding your down payment before borrowing. Some employers offer exceptionally cheap loans just for that purpose. And a few even provide grants, which don’t have to be repaid.

The Lowdown On Down Payment Grants

And the same applies to government and charitable programs. This is called DPA, or down payment assistance. Studies have shown that many who qualify for such programs have no idea that they even exist.

Loans from Family and Friends

Meanwhile, there’s sometimes nothing to stop you borrowing your down payment from family and friends.

While such a loan won’t normally show up on your credit report, you should disclose the debt so your lender can factor it into your DTI ratio.

The Family Mortgage: Borrowing From Loved Ones Instead Of A Bank

It’s worth noting that lying on a mortgage application comes with maximum penalties of 30 years in federal prison and $1 million in fines.

Avoid Down Payments Altogether

Before getting too hung up on your down payment, make sure you need one. A surprising number of borrowers can put down small sums or even nothing.

Getting Sellers To Pay Your Closing Costs

With seller concessions, you can reduce what you need for closing costs as well.

What Are Today’s Mortgage Rates?

Today’s mortgage rates are especially attractive after recent dips. But most experts predict rates and housing prices to trend higher. If borrowing a down payment can get you into a home before this happens, it’s probably a good decision.

To get the best mortgage rates, compare quotes from several lenders and choose the one with the best terms.

Click to see your low-downpayment loan eligibility (Jul 23rd, 2017)

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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Mortgage Rates Lowest in July

Mortgage rates moved lower today, setting yet another new low for the month of July. For the past 2 weeks, rates have been pushing back against a fairly abrupt spike that took place heading into the month. Concerns over the European Central Bank’s (ECB’s) bond buying plans sparked the move higher, but those concerns were officially put to rest as of yesterday. In simpler terms, extra demand for bonds pushes bond prices higher and rates lower. The ECB buys LOTS of bonds. This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit). There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds (thus the rate spike heading into July). While that day will likely come eventually

Mortgage Rates Lowest in July

as-mortgage-demand-cools-and-competition-heats-up-more

June 26, 2017

As Mortgage Demand Cools and Competition Heats Up, More Lenders Are Planning to Ease Credit Standards

Katie Penote

202-752-2261

WASHINGTON, DC – More mortgage lenders say they have eased credit standards recently and expect further easing in the coming months, according to Fannie Mae’s second quarter 2017 Mortgage Lender Sentiment Survey^®. On net, the share of lenders reporting they have eased mortgage credit standards over the prior three months has ticked up gradually since the fourth quarter of 2016. Additionally, when anticipating the next three months, the net share of lenders saying they plan to ease credit standards for GSE eligible, non-GSE eligible, and government loans reached or surpassed survey highs this quarter.

Concerns regarding economic conditions were a top driver for changes in lending standards. Across the three loan types, the share of lenders who reported growth in purchase mortgage demand dropped to the lowest net reading in years for the second-quarter period. The drop in purchase mortgage demand also reflects the latest findings in the Fannie Mae National Housing Survey^®, in which the net share of consumers who reported that now is a good time to buy a home dropped to a record low. The results of both surveys mirror the ongoing narrative for housing: Tight inventory has pushed up home prices, which is weighing on affordability and constraining sales.

“Expectations to ease credit standards climbed to survey highpoints in the second quarter as more lenders reported slowing mortgage demand and increasing concerns about competition from other lenders,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Lenders cited additional contributing factors such as diminishing compliance concerns and more support from the GSEs, including clarification on representations and warranties and tools that provide greater certainty during the loan underwriting process. Easing credit standards might also be due in part to increased pressure to compete for declining mortgage volume. For the third consecutive quarter, the share of lenders expecting a decrease in profit margin over the next three months exceeded the share with a positive profit margin outlook. For the former, the percentage citing competition from other lenders as a reason for their negative outlook reached a survey high.”

MORTGAGE LENDER SENTIMENT SURVEY HIGHLIGHTS

Purchase mortgage demand

• The net share of lenders reporting demand growth over the prior three months has fallen for all loan types when compared with Q2 2016 and Q2 2015, reaching the lowest reading for any second quarter over past two years.


• However, the net share of lenders expecting increased demand over the next three months remains relatively stable for the same quarter year over year.
  
  

Refinance mortgage demand

• The net share of lenders reporting rising demand over the prior three months fell significantly to a three-year low, across all loan types.


• The net share of lenders reporting demand growth expectations for the next three months has changed little from last quarter (Q1 2017).

Easing of credit standards

• The net share of lenders reporting easing of credit standards over the prior three months has gradually ticked up since Q4 2016.


• Net easing expectations for the next three months have also gradually climbed. In particular, the net easing share for GSE eligible loans and government loans for the next three months reached new survey highs this quarter (though modest in absolute percentage) and that for non-GSE eligible loans tied a survey high reached in Q2 2014.

Mortgage execution

• On net, lenders continue reporting expectations to grow GSE (Fannie Mae and Freddie Mac) and Ginnie Mae shares over the next 12 months and reduce portfolio retention and whole loan sales shares.

Mortgage servicing rights execution

• This quarter, slightly more lenders reported expectations to decrease rather than increase the share of MSR sold and the share of MSR retained and serviced in-house (as opposed to by a sub-servicer).


• The majority of lenders continued to report expectations to maintain their MSR execution strategy.
  
  

Profit margin

• The net share of lenders reporting a negative profit margin outlook has declined since reaching the survey’s worst reading in Q4 2016. However, more lenders reported a negative outlook than a positive outlook.
  
  • Mid-sized institutions are most likely to expect a net decrease in profit margin, while larger institutions are more likely to expect an net increase in profit margin.
  
  


• Concern about competition from other lenders set a new survey high this quarter across all profit-margin drivers, cited as the key reason for lenders’ decreased profit margin outlook.


• The perceived impact of “government regulatory compliance,” which declined sharply in Q4 2016, has remained low the past three quarters relative to most of the prior two years’ readings.

The Mortgage Lender Sentiment Survey by Fannie Mae polls senior executives of its lending institution customers on a quarterly basis to assess their views and outlook across varied dimensions of the mortgage market. The Fannie Mae second quarter 2017 Mortgage Lender Sentiment Survey was conducted between May 3, 2017 and May 14, 2017 by Penn Schoen Berland in coordination with Fannie Mae. For detailed findings from the second quarter 2017 survey, as well as survey questionnaires and other supporting documents, please visit the Fannie Mae Mortgage Lender Sentiment Survey page on fanniemae.com. Also available on the site are special topic analyses, which focus on findings and analyses of important industry topics.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) group or survey respondents included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/FannieMae.


as-mortgage-demand-cools-and-competition-heats-up-more

freddie-mac-june-2017-outlook

MCLEAN, VA–(Marketwired – Jun 23, 2017) – Freddie Mac (OTCQB: FMCC) today released its monthly Outlook for June, which shows that despite some recent bumps, the U.S. housing market remains on track to exceed last year’s best-in-a-decade levels for housing starts and home sales.

Outlook Highlights 

• May marked the 80^th consecutive month of job gains. The unemployment rate dropped another 0.1 percentage points to 4.3 percent. Despite last month’s lull in housing data, the economy will continue to bolster the overall housing market.


• In April, housing starts fell 2.6 percent and permits for single-family homes also declined. After a strong March, home sales also a took a hit with new home sales falling 11.4 percent and existing home sales falling 2.3 percent in April. These recent declines are likely to reverse as low mortgage interest rates and solid job gains boost the housing market. 


• Average mortgage rates have declined more than they have risen in recent weeks. However, they are still almost 50 basis points higher than last year’s low. Unless rates fall below 3.5 percent for an extended period, refinance volume will fall short of last year’s levels. Expect mortgage origination volumes to decline $370 billion for 2017.


• Strong demand and a short supply of housing in many markets continues to push house prices higher. Expect house price appreciation to be over 5 percent for 2017.


• In the first quarter of 2017, the homeownership rate was 63.6 percent — six percentage points lower than its peak in 2004 when it reached its all-time high of 69.2 percent.

Quote: Attributed to Sean Becketti, Chief Economist, Freddie Mac.

“After a strong March, the housing market, from housing starts to new and existing home sales, took a hit in April. The recent declines are likely to reverse as low mortgage interest rates and solid job gains boost the housing market. We expect housing starts and home sales to firm in the coming months and for 2017 to exceed 2016’s best-in-a-decade levels.”

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

freddie-mac-june-2017-outlook

Job Growth Looking Better, Wage Growth Not

• GDP


• Unemployment


• Interest Rates


• Inflation


• Business Spending


• Energy


• Housing


• Retail Sales


• Trade Deficit

GDP	2.1% pace in ’17, 2.4% in ’18 More »
Jobs	Hiring pace should slow to 175K/month by end ’17 More »
Interest rates	10-year T-notes at 2.4% by end ’17 More »
Inflation	1.6% in ’17, down from 2.1% in ’16 More »
Business spending	Rising 3%-4% in ’17, after flat ’16 More »
Energy	Crude trading from $40 to $45 per barrel in September More »
Housing	5.5% price growth by end of ’17 More »
Retail sales	Growing 3.5% in ’17 (excluding gas) More »
Trade deficit	Widening 4% in ’17, after nearly flat ’16 More »

Good growth — 222,000 new jobs in June and upward revisions to May and April figures — paint a rosier picture of the labor market. This momentum may extend the time of strong job growth. However, monthly job gains are still expected to slow to 175,000, on average, by the end of the year. As the labor market tightens, it becomes harder for employers to find suitable candidates.

The upticks in retail and government sectors were a surprise. Department stores and other general merchandise purveyors added 12,200 jobs, breaking a four-month string of losses. However, this positive news is not likely to last. Local governments filled a boatload of positions, but government hiring surges tend not to be sustained.

Industries that have been doing well continued to do well. Mining added jobs for the eighth month in a row. Health care, professional and business services, and food services continued their strong hiring activity. Restaurant hiring should be slowing down, given sluggish sales growth and higher minimum wages in some localities.

via e-mail: Kiplinger Alerts — Intelligence for your business success

The unemployment rate ticked up to 4.4%, as more folks who had given up on job hunting responded to the strong hiring activity by looking for jobs again.

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Wage gains for nonsupervisory workers in June slipped to 2.3%, indicating that rising wage pressures from a tighter labor market are still a ways off. Nonsupervisory workers compose four-fifths of the workforce and tend to spend more of their paychecks, so prices and consumer spending tend to reflect their pay increases. Stronger wage growth should happen eventually, but history shows that it takes time for low unemployment to provoke higher wage growth. Also, cost-of-living raises are fairly low because the inflation rate is less than 2%.

See Also: The Best Jobs for the Future

Source: Department of Labor, Employment Data

Job Growth Looking Better, Wage Growth Not

Equifax Announces Earnings Release Date and Conference Call for Second Quarter 2017 Results

ATLANTA, June 28, 2017/PRNewswire/ —Equifax Inc. (NYSE: EFX) will release its financial results for the second quarter ending June 30, 2017, in a press release to be issued after the New York Stock Exchange closes on Wednesday, July 26, 2017. The press release will also be available at www.equifax.com.

Equifax will host a conference call at 8:30 a.m. ET on Thursday, July 27, 2017 in which senior management will discuss financial and business results for the quarter. Please dial the appropriate number 5-10 minutes prior to the start of the call to complete registration. Name and affiliation/company are required to join the call.

Conference call numbers: U.S. and Canada: (800) 263-0877; International: (719) 457-1036.

Replay: A replay of the conference call will be available beginning July 27, 2017 at 11:30 a.m. ET and ends at 11:30 a.m. ETAugust 10, 2017. To access the replay please register.

About Equifax

Equifax is a global information solutions company that uses trusted unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its database includes employee data contributed from more than 7,100 employers.

Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,700 employees worldwide.

Some noteworthy achievements for the company include: Named to the Top 100 American Banker FinTech Forward list (2015-2016); named a Top Technology Provider on the FinTech 100 list (2004-2016); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2017); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015-2016). For more information, visitwww.equifax.com.

FOR MORE INFORMATION

1550 Peachtree Street, NE
Atlanta, Georgia 30309

Marisa SalcinesMedia Relations

678-795-7286

Marisa.Salcines@equifax.com

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/equifax-announces-earnings-release-date-and-conference-call-for-second-quarter-2017-results-300481026.html

SOURCE Equifax Inc.

Equifax Announces Earnings Release Date and Conference Call for Second Quarter 2017 Results