This post features the articles gathered by Phillip this week relating to assistive technology, disability issues, financial literacy, and housing. Thanks Phillip! Have a great weekend everyone!
ASSISTIVE TECHNOLOGY
(BLOG from StarNewsOnline.com [Wilmington, NC])
San Diego Chosen to Host CSUN’s 25th Annual International Technology & Persons with Disabilities Conference
NORTHRIDGE, January 28, 2010 – California State University, Northridge (CSUN) today announced that the International Technology & Persons with Disabilities Conference, the world’s largest technology event of its kind, will be held in San Diego for this year’s historic milestone marking 25 years of service to people with disabilities. The conference will take place from March 22 to March 27, 2010 at the Manchester Grand Hyatt Hotel.
Thousands of people from around the world—from entrepreneurs and tech industry executives to academics and persons with disabilities—will gather to explore new ways technology can help those with disabilities. This conference examines all aspects of technology and disability and features a faculty of internationally recognized speakers, two days of pre-conference workshops, more than 300 general session workshops and more than 140 exhibitors displaying the latest in assistive technology…
In addition to the conference celebrating its 25th anniversary, the U.S. Department of Defense’s Computer/Electronic Accommodations Program (CAP) will be marking its 20th anniversary of providing free services to federal employees with disabilities and wounded service members with a special event following the keynote address.
For more information about the conference or how to register, visit the Center on Disabilities’ Web site at http://www.csunconference.org or call the center at (818) 677-2578 V/TTY.
(BLOG from Home Medical Equipment News [hmenews.com])
Apply now for specialty certification in seating and mobility
ARLINGTON, Va. – Assistive technology professionals (ATPs) can now apply to become seating and mobility specialists (SMSs). RESNA last week posted the application for the specialty certification to http://www.resna.org (click on “certification” then “seating and mobility certification”)…
Applicants for the specialty certification must have 1,000 hours of direct customer service experience. They must also meet any two of the following seven criteria: clinical service delivery, advocacy, mentoring/supervision, presentations/formal instruction, learning/continuing education, publications and research.
In most cases, RESNA expects to process applications within one week. But getting their applications approved is only the first step ATPs must take to become SMSs. They must also sit for a $250 computer-based exam at one of numerous testing centers across the country. The four-hour exam has 165 questions, including questions that involve photos and video… RESNA expects the first exam to be given March 15…
Unlike the ATP, the SMS certification won’t be a requirement, at least not right out of the gate. However, RESNA is working with NCART and NRRTS to determine the appropriate provider qualifications for complex rehab as part of efforts to create a separate benefit for the product category.
(OP/ED from the Los Angeles Times via PatriciaEBauer.com)
Op-ed: Regulation not needed to close ‘digital divide’
Software improvements are already bringing a ‘new era of empowerment’ for those with disabilities
Writing in the Los Angeles Times, Berin Szoka notes that recent technological innovations are radically improving access for people with disabilities. For example, he says, a speech-recognition application for the iPhone now allows users to dictate email, text messages and full documents. Apple and Microsoft have built powerful accessibility features into their latest operating systems, and Google has announced it will caption all the videos on YouTube.
Szoka argues that these and other improvements were spurred by competitive forces, and will improve profits for tech companies. He opposes using regulation to force manufacturers to expand access for people with disabilities.
An excerpt:
“Equal access” to the latest gadgets may sound appealing, but policymakers should recognize that regulation will only stifle the innovations that could most help the disabled.
Szoka is director of the Center for Internet Freedom at the Progress & Freedom Foundation
(From PRWeb.com)
Skydiving For Dollars: Local Non-Profit Parachutes To Raise Funds For Los Angeles-Based Assistive Technology Center
EmpowerTech To Host “Sky’s The Limit” Event on April 24, 2010
Los Angeles (PRWEB) January 25, 2010 — Proving that anything is possible and, in fact, the “Sky’s the Limit” for persons living with disabilities, EmpowerTech, a Los Angeles-based non-profit organization that provides computer training to persons with physical and developmental disabilities, will host day of skydiving in Lake Elsinore, CA on April 24, 2010. The event, which is open to the public, requires individual jumpers to recruit friends, relatives, and colleagues to sponsor a jump by pledging money to support EmpowerTech. The minimum total pledge per jumper is $1,000 ($750 for students and persons with disabilities).
Joan Anderson, Executive Director, of EmpowerTech commented, “At EmpowerTech we have always said that the “Sky’s the Limit” for our students. Now we are putting those words into action with what I think is the most amazing event we have ever been a part of. Whether you are a veteran jumper or a novice, this stunningly beautiful jump over Lake Elsinore, with its panoramic mountain view, is one you definitely want to make. ”
“Sky’s the Limit” begins with a first jump at 7:30 A.M. at Lake Elsinore Skydive in Lake Elsinore, CA, followed by 20 jumpers per hour throughout the day. All jumps will be “tandem” jumps with professionals from Lake Elsinore Skydive. On the ground there will be live entertainment, kids’ activities, food and fun for the whole family. Anderson stated, “Skydiving will not only showcase our students’ the ability of to accomplish great things, but it will give people a taste of what it is like to face and overcome a tough obstacle–something our students and instructors do every day.”
Founded in 1986 as the “Computer Access Center” by a group of concerned parents and professionals, EmpowerTech today uses modern Assistive Technology to help persons with disability obtain the skills and the confidence to perform important computing tasks that many take for granted such as accessing and using the Internet and creating and reading documents. From programs for blind/low-vision adults to classes for disabled children, EmpowerTech uses state of the art Assistive Technology to help disabled persons experience the freedom and fulfillment of self-sufficiency. EmpowerTech is funded entirely through grants and individual donations. To learn more about “Sky’s The Limit” and to view some of EmpowerTech’s many, many success stories, please visit:
(From InsideINdianaBusiness.com)
INDATA to Open Equipment Depot
An effort to provide assistive technology to Hoosiers with disabilities is looking for equipment donations and volunteers. The INDATA Project says its new INDATA Depot will repurpose the equipment to people throughout the state. The depot will be based in Indianapolis and is expected to open in March.
(From the South East Missourian)
Goodwin earns assistive technology certification
J.D. Goodwin of Home Medical Supply has earned the Assistive Technology Professional certification from the Rehabilitation Engineering and Assistive Technology Society of North America. RESNA is a national organization that serves people with disabilities seeking technology applications to maximize their ability to function in their home, school and work environment. A trained assistive technology professional analyzes the needs of individuals with disabilities, assists in the selection of the appropriate equipment and trains the consumer how to properly use the specific equipment.
DISABILITY ISSUES
(From the Des Moines Register)
Disabled men didn’t work for Henry’s, company says
Henry’s Turkey Service is denying allegations that it employed the mentally retarded men who lived in an Atalissa bunkhouse for most of the past 35 years. The company filed court papers last week arguing that the Atalissa men “were all employees of West Liberty Foods while working at the West Liberty plant.” Henry’s Turkey Service, a Texas labor broker, sent hundreds of mentally retarded men to labor camps scattered throughout the United States in the 1970s and 1980s. One of those labor camps was in Atalissa, where Henry’s placed at least 65 men in a bunkhouse rented from the city.
The men worked at the West Liberty turkey-processing plant. Henry’s kept most of the men’s wages as compensation for room, board and care, which meant the men’s net wages often averaged 41 cents an hour. The bunkhouse was shut down 11 months ago, with state officials citing fire-safety concerns. In November, the U.S. Department of Labor sued Henry’s Turkey Service; an affiliate, Hill Country Farms; and one of the companies’ two owners, Kenneth Henry. The department alleges violations of the Fair Labor Standards Act and seeks back wages for 37 workers plus interest and damages…
Henry’s also claims in its response to the lawsuit that the Atalissa workers were “residents of the state of Texas” even though they lived and worked in Iowa for decades. In its court filing, the company did not make clear why residency was a relevant issue. The company’s claims about employment aren’t consistent with other federal and state records. The workers’ W-2 forms, obtained by The Des Moines Register last year, list each man’s employer as “Hill Country Farms.” Each Atalissa worker’s address is the same on all of the W-2 forms: Route 3, Box 240 in Goldthwaite, Texas – the home of Jane Ann Johnson, co-owner of Henry’s Turkey Service… In their response to the lawsuit, the defendants are also taking the position that they “provided no rehabilitative services” to the Atalissa workers. That claim is likely to raise questions as to why Henry’s routinely deducted substantial sums of money from each worker’s paycheck for what it called “kind care.” For example, bunkhouse resident Keith Brown worked 149 hours in February 2008, earning $1,124 at the plant. Henry’s deducted from Brown’s pay $487 for room and board, plus $572 for kind care. That left Brown with $65 in earnings for the month…
[Article continues]
(From the Houston Chronicle)
Family-leave law finally covers pilots, flight attendants
Nearly 17 years after a federal law gave other workers time off to care for sick family members, the nation’s flight attendants and pilots finally got the same privilege. Just before Christmas, President Barack Obama signed into law a bill giving airline crews the same 12 weeks of leave that every other worker in the United States has already taken for granted…
In 1993, one of President Bill Clinton’s first official acts when he took office was to sign the Family and Medical Leave Act. It was a long time coming — the legislation had been debated for years — and workers rejoiced that they could take up to 12 weeks of leave to recover from their own illnesses, tend to newborns or take care of their sick children, parents or spouses. While the leave is unpaid, employees’ jobs are protected while they shore up the home front. But there was a wrinkle — to qualify, employees had to work 1,250 hours in the previous 12 months. That’s easy for full-time workers, who typically put in about 2,000 hours a year.
However, it was a huge hurdle for flight attendants and pilots, who are only paid for their time in the air and not when they’re on the ground waiting for delayed flights or loading and unloading passengers and bags. That means that a typical full-time flight crew employee logs 70 to 80 hours per month, Caldwell said — too low to reach the Family and Medical Leave Act threshold…
[Article continues]
(From USA Today)
Analysis: Poor ratings persist for 1 in 5 U.S. nursing homes
One in five of the nation’s 15,700 nursing homes have consistently received poor ratings for overall quality, a USA TODAY analysis of new government data finds. More than a quarter-million patients live in homes given another set of low scores within the past year, according to data released today by Medicare, which first released the star ratings of the nation’s nursing homes in late 2008. The ratings are derived from inspections, complaint investigations and other data collected mostly in 2008 and 2009.
DATABASE: See ratings for nursing homes near you, loved ones
USA TODAY found that all 50 states and the District of Columbia have homes with poor ratings from one year to the next. And dozens of those facilities are the only nursing homes for miles. Late in the Bush administration, the Centers for Medicare & Medicaid Services began assigning nursing homes one to five stars for quality, staffing and health inspections, as well as an overall score. Nearly all homes that repeatedly received few overall stars — one or two stars — were owned by for-profit corporations, the data show…
The newspaper’s analysis found the lowest-rated homes had an average of 14 deficiencies per facility, which can include quality-of-life measures and safety violations…
[Article continues]
(From USA Today)
Caregiving strains families of veterans with severe injuries
Kevin Kammerdiener’s mother, Leslie, takes care of his every need, which would be fine if he were in preschool. The thing is, “Kamm” is 21. He suffered a traumatic brain injury, shattered bones and burns on 25% of his body in Afghanistan in May 2008, which left him in a wheelchair, unable to speak and in chronic pain. Leslie moved from Pennsylvania to her son’s home in Riverview, Fla., to care for him after he spent months at a military hospital in San Antonio.
Now Leslie Kammerdiener, 44, spends her days making sure Kevin eats well, is clean and comfortable, and is not in pain. More recently, she has been helping him rebuild his vocabulary (he can say about 100 words), which he lost after a suicide bomber drove a vehicle full of explosives into his Humvee. By night, she soothes him when he is wakeful, which she says is pretty much all the time… Mostly, Leslie just wants her once-strapping son to be safe and happy — to teach him enough words so he can let people know what he needs, maybe even have a relationship one day, she says hopefully, mentioning the prom photo he sometimes cradles and sobs over.
Kammerdiener is among thousands of unpaid caregivers — parents, spouses, siblings and war buddies — helping veterans injured in the Iraq and Afghanistan wars get through each day, says Barbara Cohoon, deputy director of government relations for the non-profit National Military Family Association. She says the caregivers are a vulnerable group, often under-recognized, and in need of help to navigate the military’s medical system. Cohoon says not all caregivers receive military benefits, even though many have quit jobs, moved out of their homes and drained their savings to care for their loved ones.
“Nobody’s got a handle on numbers, but 7,500 is the number bandied about,” says Cohoon, whose organization provides counseling and helps families negotiate the health system. The range of injuries caregivers attend to spans from gashes and fractures that will heal, to comas, amputations, burns, paralysis, nerve damage and brain injuries so severe that cognitive function lingers at the toddler level or below.
The Defense Department’s most recent tally of Afghan and Iraq war-related traumatic brain injuries is 161,025. A 2008 report from the non-profit research company RAND, however, put the figure at 320,000 out of the 1.64 million deployed by that time. Cohoon says it’s estimated that about 350 to 400 such patients are so severely hurt they will need full-time care for the rest of their lives. “Invisible” mental health wounds, including post-traumatic stress disorder, are also a major concern for returning veterans, even those who show no outward wounds, says Rene Bardorf, director of the Bob Woodruff Foundation, a non-profit organization that helps the families of injured veterans. It was launched by Bob and Lee Woodruff after the ABC News anchor almost died from a brain injury in Iraq in 2006. Bardorf says it’s estimated that more than 300,000 service members have psychological wounds…
Q&A: Bob and Lee Woodruff answer questions on brain injuries, caregiving
OTHER SIDE: Combat’s positive effects examined
Losses all around…
Gap in understanding…
[Article continues]
(From the Columbus [OH] Dispatch via PatriciaEBauer.com)
Ohio districts diverting special-ed funds for other uses
For many Ohio school districts, the recent influx of federal stimulus money has doubled the federal dollars they receive for special education. New state regulations are making it easier for them to use the extra cash to shore up their shaky budgets, and disability rights advocates are crying foul.
Advocates say Ohio is cheating vulnerable students, and claim the state has taken the most extreme approach of any state in allowing local districts to divert the money for other purposes.
“It just seems completely mind-blowing to me,” said Jennifer Cohen, a policy analyst at the Washington, D.C.-based New America Foundation. “I think it’s sneaky, and I know there are a lot of special-education advocates out there who are upset about the implications.”
(From the Detroit News via PatriciaEBauer.com)
Riders with disabilities claim shoddy transit service in Detroit
Disability rights advocates are threatening to file federal ADA complaints over Detroit’s para-transit service, saying they regularly encounter unkempt and poorly equipped vans and rude drivers who engage in reckless driving, don’t show up at the appointed time and place, and drop clients at the wrong addresses.
The complaints come as the city is engaged in an ongoing contract dispute with its para-transit provider, prompting city officials to hire taxicabs and van services while attempting to resolve the dispute. Veolia Transportation has sued the city in federal court for breach of contract and a claim of $5.4 million.
City officials charge that Veolia is fanning complaints against the city in an attempt to win speedy resolution of its claims.
(From the San Antonio Express-News)
San Antonio Housing Authority uses stimulus funds to upgrade senior apartments
The San Antonio Housing Authority and city officials officially kicked off a $6.42 million renovation project of the Lewis Chatham Apartments with a ribbon-cutting Tuesday afternoon.Repairs and improvements to the 119-unit complex in the 6500 block of South Flores Street will be paid for with federal stimulus funds.
SAHA president and CEO Lourdes Castro Ramirez and District 3 Councilwoman Jennifer Ramos spoke to residents at the apartment entrance, book-ended with designs of the completed project. Residents of the housing complex for seniors and disabled were relocated to other rental properties and public housing at the end of 2009. Ramirez said the stimulus money means not only enhancing the housing unit but also creating a sense of community…
Renovation of the apartments, built in 1973, will include such modernizations as energy-efficient heating and air-conditioning, security, lighting, fire systems, upgraded plumbing and elevators. One of the residents, Robert Alvarez, 70, said he looked forward to the renovations before he helped cut the yellow caution tape at the entryway… Ramos said the renovation was a perfect project that highlights what stimulus dollars are doing for the community.
[Article continues]
(From the Associated Press via the Houston Chronicle)
Thousands of vets could get benefits upgrade
WASHINGTON — A military review could bring millions of dollars in benefits to thousands of Iraq and Afghanistan veterans discharged with post-traumatic stress disorder. The military has agreed to review the records of recent veterans discharged with PTSD to decide whether they were improperly denied benefits.
The agreement stems from a judge’s order in a class action lawsuit originally filed by seven combat veterans. They alleged the military illegally denied benefits to those discharged, at least in part, because of the disorder during a six-year period that ended Oct. 14, 2008. Legal notices are currently being mailed to about 4,300 veterans informing them they can “opt-in” to the lawsuit until July 24 to be part of the expedited review. Attorneys for the veterans estimate that millions of dollars could be paid to veterans under the agreement, with some veterans receiving hundreds or more dollars in increased monthly benefits…
PTSD is an anxiety disorder that can develop after a terrifying event in which the person was physically harmed or felt threatened. Symptoms can range from flashbacks to problem drinking. At issue is the disability rating given by the military to veterans discharged with PTSD. Each of the seven plaintiffs was given a rating of 10% or less. The law requires the military to assign a disability rating of at least 50% to those discharged for PTSD, said Bart Stichman, co-executive director the National Veterans Legal Services Program, a nonprofit organization that represents the veterans. Since October 2008, the military has given the 50% rating to those discharged with PTSD, Stichman said…
[Article continues]
___
On the Net:
Information on lawsuit: http://www.ptsdlawsuit.com/
National Veterans Legal Services Program: http://www.nvlsp.org/
PTSD Information Center: http://www.ptsd.va.gov
(From the Corpus Christi Caller-Times)
South Texas Lighthouse for the Blind increase recruiting
CORPUS CHRISTI — South Texas Lighthouse for the Blind is stepping up recruiting as a result of a new contract. The nonprofit organization strives to provide job opportunities for those who are blind or visually impaired.
This new project, producing chin straps for soldier’s helmets, is targeted to begin April 1 at South Texas Lighthouse for the Blind’s manufacturing facility, 4421 Agnes St. Employees hired for this project will work on automated equipment to produce this product. On-the-job training will be provided and there are full-time positions available. Beginning pay is $8.50.
Call Jill Dryden at 883-6553, Ext. 142 to have an application mailed to you, or download one at http://www.stlb.net or stop by the office, 4421 Agnes St.
(From the San Antonio Express-News)
When to apply for disability benefits
Note: On Monday a fourth Social Security Administration office for the San Antonio area will open at 402 Isom Road, north of Loop 410 between San Pedro Avenue and East Ramsey Road. The new office will be staffed with personnel who are being transferred from the administration’s downtown office. The downtown office will remain in the Federal Building, only with a smaller staff.
In addition to the four area offices, services are available at http://www.socialsecurity.gov, or by calling (800) 772-1213 between 7 a.m.-7 p.m., weekdays.
Question:
I’m 49 years old and have had two heart surgeries. I’m recuperating now and plan to go back to work in another year or so. But I’m worried I may not be able to. Should I go ahead and apply for disability benefits?
Answer:
Yes. If you have a disabling condition that keeps you from working and is expected to last a year or more, you should apply for benefits now. You can learn more and get started online by visiting http://www.socialsecurity.gov/disability. You can start the process by calling 1-800-772-1213 (TTY 1-800-325-0778). Apply as soon as you can because disability claims can take several months to process. Be prepared to give us the names, addresses, and phone numbers of all the doctors, clinics, hospitals, etc., where you received treatment. Make a list of all the medications you take, and make a separate list of all the jobs you’ve held in the last 15 years, together with a summary of your job duties.
Question:
What’s the difference between “SSID” and “SSDI”?
Answer:
SSID, or SSI, is the way some people refer to “Supplemental Security Income (SSI) disability” benefits. SSI disability benefits are paid to people who have limited incomes and resources. SSDI is the way some people refer to “Social Security disability insurance benefits.” Social Security disability benefits go to people who have worked and paid Social Security taxes for a long enough time to be covered for Social Security. Some people qualify for both “SSI” and “SSDI” if their Social Security benefit is low enough for them to receive SSI. To learn more about Social Security and SSI, visit http://www.socialsecurity.gov.
Oscar Garcia is a Public Affairs Specialist with the Social Security Administration. You can direct your questions to him at: SSA, 411 Richland Hills Drive, San Antonio, Texas 78245. You can also email him at oscar.h.garcia@ssa.gov.
(From the Jackson [MI] Citizen Patriot via PatricaEBauer.com)
ACLU: School violating girl’s rights by banning service dog
Michigan’s chapter of the American Civil Liberties Union has accused a local school district of breaking the law by preventing a 5-year-old with cerebral palsy from bringing her service dog to school.
Ehlena Fry’s parents argue that her medically prescribed, certified service dog, Wonder, must accompany her to school in order to help her to become an independent member of the community. Ehlena’s IEP team in the Napoleon Community Schools concluded that the girl’s needs are being met by her full-time classroom aide.
“To force a 5-year-old girl with cerebral palsy to choose between her independence and her education is not only illegal, it is heartless,” said Michael J. Steinberg, ACLU of Michigan legal director. Community members helped the Frys raise more than $13,000 last year to get the dog from 4 Paws for Ability.
(From the Washington Post via PatriciaEBauer.com)
Special ed official inspired by exclusion of childhood friend
Alexa Posny, the recently confirmed assistant secretary for special education and rehabilitative services, tells Education Week that she became a special educator after seeing a childhood playmate barred from school because he had Down syndrome. Posny is 57, according to the Washington Post. An excerpt:
Q. What inspired you to work in special education?
A. During my childhood, I learned that children with disabilities often were not educated the way other children were. One of my playmates was a child with intellectual disabilities (Down syndrome). Although he would play with me and other children in my neighborhood, I soon discovered that he did not go to school.
At that time, I could never understand why he was never with us. He was more like us than unlike us, but he never entered the school door. Thirty some years later, the lives of students with disabilities have greatly improved and I have been engaged in this field during this entire time.
(From the Baltimore Sun via PatriciaEBauer.com)
New magazine targets those with disabilities
Zarifa Roberson couldn’t find a magazine aimed at people who have disabilities, so she decided to start one herself. The result is “i.d.e.a.l.,” an acronym that stands for “Individuals with Disabilities Express About Life.”
“Talking with young people with disabilities is kind of disheartening because they don’t know what to do with their lives,” she says. “Not everyone can be the next Stevie Wonder. This is why I started the publication.”
(From the Associated Press via USA Today)
Studies: MS pills show promise, risk
ATLANTA (AP) — Tests of the first two oral drugs developed for treating multiple sclerosis show that both cut the frequency of relapses and may slow progression of the disease, but with side effects that could pose a tough decision for patients. Two experts not involved in the studies said the drugs appear effective but with potentially dangerous side effects. It’s too soon to know if the pills will be approved by the government or widely adopted by physicians, they said.
About 2.5 million people around the world have multiple sclerosis, a neurological disease that can cause muscle tremors, paralysis and problems with speech, memory and concentration. The studies involve the most common form of the disease, in which people are well for a while and then suffer periodic relapses. Current treatments can reduce the duration and severity of symptoms but require daily or regular shots or infusions.
The new studies tested two types of pills. Cladribine, made by Merck Serono, is already sold to treat a rare blood cancer. For MS, it would be taken eight to 10 days a year. Fingolimod is a daily MS pill being developed by Novartis. The research found that patients on the pills were about half as likely to suffer relapses of symptoms as those who took dummy pills or a commonly prescribed shot for MS. But they also found both drugs significantly lowered immune defenses that allowed latent herpes viruses to rage in some patients — in one study, two people died of unchecked herpes infections.
The side effects detailed in the new studies are giving some physicians pause… The new studies reveal the trade-offs:
• A two-year study gave 1,300 MS patients cladribine or dummy pills. Patients on the drug were only half as likely to suffer relapse as those on placebo, and were 30% less likely to have worsening disability. However, 20% to 30% of the cladribine patients developed low counts of infection-fighting white blood cells, compared to just 2% of the others. And 20 cladribine patients suffered herpes infections versus none in the dummy pill group.
• A two-year study gave about 1,000 patients fingolimod or dummy pills. Only 17% of fingolimod patients had worsening disabilities from MS after three months, compared to 24% in those on placebo. Herpes infections were about the same in the pill and placebo groups, but respiratory infections like bronchitis and pneumonia were nearly twice as common in the fingolimod patients.
• A one-year study of 1,200 patients tested fingolimod against shots of Avonex, a form of interferon. Those taking the pills had less brain shrinkage — a measure of progression of the disease. About 20% of patients on the pill had relapses versus 30% on the dummy pills.
In that study, 9% of those on fingolimod had serious side effects, compared to 6% of those on Avonex. Two people on fingolimod died of herpes infections; six had eye swelling and eight had skin cancers.
All three studies were funded by Novartis or Merck Serono, the pill manufacturers…
[Article continues]
FINANCIAL LITERACY
(From USA Today)
Fed keeps interest rates near zero; economy continues to ‘strengthen’
The Federal Reserve sees signs of improvement in the economy but still plans to keep short-term interest rates near zero to help a recovery take hold. The Fed’s Open Market Committee, which sets interest rate policy, said Wednesday that “economic activity has continued to strengthen” since December and that “the deterioration in the labor market is abating.”
Household spending is growing modestly, held back by high unemployment, slack income growth and tight credit. The panel voted to keep the fed funds rate that banks charge each other for short-term loans at between 0% and 0.25%. The committee once again declared that the sluggish recovery from the deepest recession since the 1930s warrants keeping the rate “at exceptionally low levels … for an extended period.” Investors were looking closely for a change in that language, which might have signaled a decision to start pushing rates back up again sometime soon…
The Fed also plans to wind down programs designed to calm credit markets, disappointing those who hoped it would extend beyond a first-quarter deadline its purchases of mortgage-backed securities to support the battered housing market. Still, the Fed said it’s “prepared to modify these plans if necessary to support financial stability and economic growth.”
(From the Associated Press via the Houston Chronicle)
Lenders start signing up for ‘piggyback’ mortgage plan
WASHINGTON — Mortgage companies are finally starting to sign up for a long-delayed piece of the Obama administration’s $75 billion foreclosure-prevention program. The administration had been offering lenders who made so-called “piggyback” mortgages — second loans that allowed consumers to make a little or no down payment — incentives to lower payments or eliminate the loans entirely. But no one signed up until Tuesday when Bank of America became the first to do so.
During the housing boom, lenders readily gave such second loans. While home prices soared, such mortgages were even extended to borrowers with poor credit and people who didn’t provide proof of their incomes or assets. Those loans are now an obstacle to alleviating the housing crisis. That’s because piggyback lenders — fearing they won’t be repaid — can veto a borrower’s efforts to modify their primary mortgage.
Consumer advocates and even some on Wall Street have been calling on the government to help the roughly one in three homeowners who owe more on their mortgages than their homes are now worth.
The administration has been studying ways to encourage investors to cut borrowers’ mortgage balances. Many want to do so but say they have been blocked by investors in second loans. The Obama administration is hopeful that the piggyback program could help, said Bill Apgar, a senior adviser at the Department of Housing and Urban Development.
(From quizzle.com via Shine from Yahoo!)
Dealing with Debt: Which Debt Should You Pay off First?
If you’ve racked up a lot of debt on your credit cards, you’re not alone. In fact, of the 90 million households in the United States that own at least one credit card, the average debt totals a whopping $10,691, according to CardTrak.com. Many of these households are only paying the minimum payments on their credit cards too. If that sounds like you, here’s some food for thought: If you carry the average credit card debt of $10,691 and only pay the minimum payments each month, it will take you nearly 33 years to pay off your balances completely.*
Clearly, the minimum payment method is not a great way to manage your debt. It’s time to start paying down your balances and rid yourself once-and-for-all of that perpetual black cloud. But where do you start?
If you have several credit cards – and many of us do – it’s smart to devise a payoff plan. There are two ways to do this that are widely talked about, each of which focus your energies on a single debt, while paying just the minimum payments on your other debts.
Keep in mind that these strategies will work for all of your debt, including auto loans, student loans and home loans, but for the sake of keeping it simple, let’s concentrate on credit card debt:
Focus: Highest Interest Rate… [Article continues]
Focus: Lowest Balance… [Article continues]
More from the Quizzle Blog:
• How to Save Money While Enjoying Time with Friends
• 5 Tips to Get You Ready for Your Study Abroad Trip
• I’ve Found My Dream Home… Now What?
• 10 Financial Resolutions for 2010 (Plus Tips to Achieve Them)
• How to Mix Money When Moving in Together
*Assumes minimum payment of 2% and an average interest rate of 14%.
(From USA Today)
More schools require students to learn personal finance
MIAMI — Each day after school, 17-year-old Phyllis Quach goes to a warehouse filled with silk flowers, stuffed animals and other gift items her parents sell through their South Florida wholesale business. The recession hit the family hard and they can no longer afford the building. Quach helps pack the goods for a move to a cheaper location. On weekends, her mother often goes door to door, hoping to find new retail customers.
“I never want to go through what they go through,” Quach said, tears gathering in her eyes. So Quach is taking a a personal finance course at her Miami high school — getting early lessons on managing credit, balancing a budget and buying a first home. Experts say the recession’s length and severity means it could affect the students’ lifelong financial behavior, as the Great Depression affected their grandparents’ frugal generation.
The number of states requiring public high schools to offer a personal finance course rose from nine to 15 between 2007 and 2009, according to the Council for Economic Education. Thirteen states require a personal finance course for graduation, up from seven in 2007. Many schools elsewhere offer or require such courses. The U.S. Treasury Department also recently announced a national award program to encourage financial education in schools…
For many years, schools relegated personal finance to a home economics course, if they taught it at all. Students picked up the spending patterns of their parents — good and bad… Meanwhile, personal finance became more complicated, credit card debt increased dramatically and families began opting into risky adjustable-rate mortgages they didn’t understand to buy homes they couldn’t afford, all elements of the recent meltdown of the economy…
[Article continues]
(From the Washington Post)
Stakes are high as government plans exit from mortgage markets
For more than a year, the government pulled out the stops to revive home buying by driving down mortgage rates. Now, whether the housing market is ready or not, the government is pulling out.
The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble, and it would deal a body blow to President Obama’s efforts to get the economy on track.
Keeping the mortgage rates at historic lows, which required a commitment of more than $1 trillion, was viewed within the administration as a central plank of the economic strategy last year, senior officials said. Though the policy did not attract as much attention as rescue efforts to bail out banks, it helped revitalize home buying in some parts of the country and put money in the pockets of millions of homeowners who were able to refinance into lower monthly payments, the officials added…
[Article continues]
(From MartketWatch.com via Yahoo! Finance)
Credit-Card Issuers Find Creative Ways to Skirt New Law
Between now and Feb. 22 when the new credit-card rules go into effect, you’ll see a lot of excited media types talking about all of the good to come out of those regulations, but as a consumer you should worry about what’s still on the menu. The card issuers have been cooking up all kinds of new things that their bottom line will find appetizing, but that may make you sick.
The Credit Card Accountability, Responsibility and Disclosure Act, known as the CARD Act, aims to help consumers deal with card issuers’ more troubling policies, but by the time this reform is fully in place, the industry will have moved on to new ways to skin the customer, ways that have become evident over the last few months as the first provisions of the law came into play and financial-services businesses scrambled to squeeze through loopholes…
The new law was designed to defeat several bad practices. For example, starting in February, due dates for monthly payments must be the same each month. Any payment amount beyond the minimum must be applied to the highest-rate debt on the account. Rate hikes on existing balances on fixed-rate cards are prohibited under most conditions. Card issuers can’t charge additional fees when consumers pay by mail, electronic transfer, online or phone unless the customer requests an expedited payment to avoid a late fee. Other practices, like “double-cycle billing” — where the issuer adds finance charges for previous billing cycles to an account that was paid off because there was an average daily balance until the debt was paid — are off the menu too.
It’s all good, but be wary of what’s coming next…
[Article continues]
(From the Houston Chronicle)
Finding dollars and sense in feminist economics
Mention economics, and most people think of interest rates and unemployment statistics. That’s part of it, but the field is really about people and how their behavior influences the production and distribution of goods and services. Feminist economics takes that further, considering how economic policies affect such hard-to-quantify issues as the care of children and the elderly. Diana Strassmann, an economist at Rice University and the founder and editor of Feminist Economics, the academic journal of the International Association for Feminist Economics, recently spoke with reporter Jeannie Kever.
Q: Tell me a little about feminist economics as a discipline.
A: The field is diverse, but it evolved through women economists noticing that the (standard economic) theory didn’t make sense of their lives. It treated anything that wasn’t work for pay as leisure. It didn’t make sense to distinguish the value of an act by whether it was paid or not. Economists in the U.S. have traditionally been white, male, heterosexual and pretty high income. They tended to model what was important to them … and not what is important to a broader economy.
Q: How did you get into the field?
A: My first year at Harvard in the Ph.D. program, I had a professor who argued that the marriage tax was a good idea, because he thought that would discourage wives from working. He thought they should stay home with their children. I was single then, I didn’t have children, but that struck me. After I came to Rice and had children and had similar experiences, I decided to try to bring gender into economics. A major influence on me has been the work of Amartya Sen, (an economist originally from what is now Bangladesh) who found in 1990 that 100 million women would be alive if they had had equal access to resources. Not great access, but just the same access as men and boys. This isn’t just identity politics, where people want to be treated with more respect. It’s life and death.
Q: What are some of the areas of study within the field?
A: Most economies are compared through their GDP (gross domestic product, a measure of economic activity), but much of that growth is through activities that are paid. If more women are taking jobs that are paid, and less care work is done, that exaggerates growth. Children may not be cared for as well, the elderly may not be. We want to understand the impediments to that work being shared more equally between women and men. What is the impact of family leave? Another issue we think about is breast-feeding. If a baby is bottle fed, that leads to a higher level of GDP, because formula is marketed. If you distribute a lot of formula in hospitals, you might have a higher level of GDP, but it may not be in the best interest of the mother and children. The measurement of growth and output don’t necessarily capture the picture of well-being.
Q: Have economists in the field looked at micro lending and other projects designed to promote self-sufficiency in the developing world?
A: If you look at the United Nations … goals for women, they have a number of goals — strengthen the opportunities for education, increase women’s representation in government, make sure women have access to credit. The research on micro finance have actually been mixed in terms of how much they change gender norms.
Q: The theory sounds so good.
A: It does, but it’s just not enough. If you can get a loan for a sewing machine or a cow, that’s great, but it’s not the same as an education. That doesn’t mean it’s not a useful tool. A lot of evidence shows it does a better job of helping people at a very low level keep things together than changing their circumstances in any permanent way.
Q: Have you seen policies change as a result of feminist economics?
A: Absolutely. Not so much in this country, but I think one of the more exciting concepts is gender mainstreaming, which is now part of required policy in the European Union, in Australia and South Africa. At every stage of developing a policy, the impact on gender has to be brought into consideration. If we’re developing a policy that might affect people’s lives in profound ways, that might not have anything to do with gender, but it might.
jeannie.kever@chron.com
(From US News & World Report via Yahoo! Finance)
21 Things We’re Learning to Live Without
What do you really need? It’s become a national question. With jobs and money scarce, consumers are taking inventory and tossing lots of stuff once deemed important into a humongous discard pile. To safeguard the essentials–a safe home and supportive community, the kids’ education, Internet connectivity, sustenance for a pet–Americans are giving up lots of other things. Some sacrifices are painful; others bring surprise benefits.
To gauge America’s changing priorities, I synthesized market research, business trends, economic data, and reports from hundreds of consumers into a list of things that many people seem to be significantly cutting back on, or living without completely. Here are 21 of them:
Monthly payments. Old mentality: I don’t care about the price, as long as I can borrow to pay for it and I have enough income to cover the monthly payment. New mentality: I’ve already got too much debt, and the banks won’t lend me the money anyway. Result: More cash purchases and a lot less financing of cars, furniture and other costly items…
Window shopping. Browsing used to be an acceptable pastime. But consumers have discovered that window shopping encourages them to buy tons of stuff they don’t need…
Bells and whistles. The technology arms race is slowing, with consumers gravitating to simpler gizmos like Netbooks, prepaid cellphones, and older, used electronics…
Clutter. As Americans downsize, do more of their own cleaning, and look for stuff they can sell online, they’re discovering tons of things around the house they can get rid of…
Cable TV. Many people are cutting back on pay-TV services or canceling them altogether, which saves $50 to $100 a month…
A home phone. How many phones do you need, anyway???
Privacy. Got room on the couch? To save on rent or mortgage payments, roommates are doubling up and grown kids are moving back in with their parents…
Prepared foods. More people are cooking at home, and they’re doing it with fewer premade sauces, marinades, dressings, and other ingredients…
Tupperware parties. Sales of Tupperware and other storage products are up, since people are cooking at home more and husbanding leftovers…
Packaged cigarettes. The average price of cigarettes is about $5 a pack or $45 a carton, which mounts quickly for regular puffers…
Lattes. The $5 daily coffee is always one of the first small luxuries to go…
Guilt. Keeping up with all the latest trends and technology takes an emotional toll…
Extra calories. Some Americans say they’re eating less to save money and drinking more water or doing other things to suppress their appetite…
Newspapers and magazines. It’s bad news for the publishing industry, but millions have canceled subscriptions to print periodicals and started getting free news and information online (which is probably where you’re reading this article!)…
Healthcare. A forced reduction in healthcare coverage is probably one of the most crushing effects of a weak economy, as the unemployed and others without insurance make drastic trade-offs to cut costs and get by…
New gifts. Regifting is a time-tested practice–but there’s always room to refine your strategy…
New cars. It’s no secret that new-car sales plunged to levels 40 percent lower than the peak in 2006…
Comfort. Thermostats all across America are going lower in winter, higher in summer…
A daily commute. If you’re unemployed, obviously there’s no job to drive to, one reason the number of vehicle miles driven has dipped to 2004 levels (and traffic on some of the most congested highways has eased)…
Fancy dates. Online dating services like Match.com are growing, but courtship is a bit of a comedown these days…
Debt. Who needs it???
(Motley Fool Fiscal Fitness through Shine from Yahoo!)
Fiscal Fitness: Get Cash for Your Castoffs
The Motley Fool’s Fiscal Fitness Boot Camp is in session! Every weekday this month, we’ll walk you through a fresh money-saving/money-making tip as we work toward finding $2,000 in savings you didn’t know you had. Stop picking the spinach from your teeth with that unredeemed gift card, and stop using that old MP3 player as a paperweight. There’s cash to be had for your castoffs — even if it’s just $40 for an early-generation iPhone or 70% of the value for the remaining balance on a gift card… Here’s a brief rundown of some services that can help turn your trash into cash. Start your sales research here (this is by no means an all-inclusive list)… Old electronics and other gadgets: Most of us have a veritable gadget graveyard somewhere in our home. (Attention Smithsonian curators: I recently unearthed a stack of five-inch floppy discs at the bottom of a closet.) Here are a few places that’ll help you clear out some drawer space and get some cash…
Gift cards: You might think they’re duds, but gift cards can be worth, well, almost their face value to other folks. With billions of dollars of gift card balances going unredeemed every year, it’s no wonder there’s a crop of services to help consumers off-load them…
Unused airline miles or points: At Points.com, you can swap, share, or redeem your unused rewards…
Oddball, unusual, and limited-appeal stuff: To get top dollar for your collectibles and other items that might not have mass appeal, eBay is still the obvious first choice…
As long as you’re cleaning out the garage … : If you’re burdened by a car lease agreement you no longer want or cannot afford, check out Leasetrader.com and Swapalease.com for some financial relief. These sites match folks looking for a short-term lease with those looking to get out of their contract early. Clean out the attic and get cash this weekend
There are plenty of other places to sell your unwanted stuff…
[Article continues]
(From the Washington Post via the Houston Chronicle)
Obama proposes limiting banks’ risk-taking practices
WASHINGTON — President Barack Obama expanded his new offensive on Wall Street on Thursday, proposing rules that would freeze the growth of the largest banks and bar them from making what he called “reckless” investments. The proposal comes as the administration is shifting from its year-long effort to save financial firms toward a new willingness to confront them with explicit prohibitions on activities that fueled the economic crisis. In essence, Obama is now aiming to force the firms to choose between the federal benefits that come with being a bank and the unbridled pursuit of profits.
After opposing proposals such as hard limits on executive bonuses, the administration is embracing a tougher line — more evidence that Obama has the industry in its sights as he seeks to show middle America that he feels their economic pain. Obama’s plan would bar banks from making investments that are not intended to benefit customers, including the creation of proprietary investment funds solely to benefit employees and shareholders. New limits also would make it difficult for the largest banks to become any bigger.
While the proposed restrictions are narrower than the now-defunct law that segregated Wall Street trading from commercial banking for much of the 20th century, they share a similar goal: to subsidize banking — which the administration considers vital to the economy — without having taxpayers subsidize highly speculative activity…
[Article continues]
(From Fortune Magazine via the Dallas Morning News)
Texas has 2nd most firms on Fortune’s ‘best places to work’ list
Texas had the second highest number of companies represented with 13. California was No. 1 with 16 companies, and New York was third with 10. Only 14 companies on the list pay 100% of their employees’ health-care premiums. Nearly one-third offer on-site child-care. Nineteen companies offer fully paid sabbaticals including the Container Store at No. 36. It’s the 11th year on the list for the Coppell-based organization products superstore chain.
Container Store was also one of only 18 companies on the Top 100 that have never had layoffs. Other Texas companies that have been on the list multiple years include Whole Foods Market and TD Industries.
Almost all this year’s list allows employees to work from home at least 20% of the time.
TEXAS COMPANIES ON THE LIST
Rank. Company [Headquarters]
10. Camden Property Trust [Houston]
17. Methodist Hospital System [Houston]
18. Whole Foods Market [Austin]
21. NuStar Energy [San Antonio]
33. Shared Technologies [Coppell]
36. Container Store [Coppell]
38. Scooter Store [New Braunfels]
39. TD Industries [Dallas]
45. USAA [San Antonio]
67. EOG Resources [Houston]
68. Men’s Wearhouse [Houston]
76. Balfour Beatty Construction [Dallas]
87. National Instruments [Austin]
SOURCE: Fortune Magazine
HOUSING ISSUES
(From the Houston Chronicle)
Plan for veterans housing in doubt
The Department of Veterans Affairs says it does not plan to participate in the Harris County Housing Authority’s proposed mixed-use development for veterans, leaving the future of the $400 million project in doubt. County Judge Ed Emmett said the federal agency’s lack of interest probably dooms the project, known as Patriots by the Lake. The Housing Authority, a public agency, has spent $6.5 million for 91 acres of land on Lake Houston and more than $700,000 on design and other pre-development costs.
Casey Wallace, who chairs the Housing Authority’s board, insisted on Wednesday that talks with the VA are continuing, and said he is confident the agency will secure a lease agreement for facilities the federal agency would operate on the site. Casey could not explain the discrepancy between his assertion and the VA’s statement to the Houston Chronicle that the project “does not fit into our priorities at this time”…
Changes at the top
The authority’s chief executive, Guy Rankin, said last April that the VA lease agreement was expected to be secured the following month…
Affordable housing advocates also have questioned whether a public housing authority should be developing a project with mostly market-rate housing…
Developmental shift
The development also would include 160 subsidized apartments for the elderly…
[Article continues]
(From the San Antonio Express-News)
Homeowners speak against binding arbitration
AUSTIN — Homeowners distraught about their safety and property values after a retaining wall collapsed in their San Antonio neighborhood told state lawmakers Wednesday they feel hit again by a binding-arbitration clause in their purchase contracts. The clause, common in home contracts, requires purchasers to go through an arbitration process with the developer and builder to settle complaints…
The subdivision is home to the members of 91 families who were at least temporarily displaced. Certificates of occupancy were suspended for 25 homes. Consumer advocates said arbitration has its place, but forced arbitration — arranged before a dispute ever arises — can put consumers at a disadvantage. They said it’s more expensive than a court hearing and that arbitration service providers can favor the businesses that repeatedly hire them over consumers who usually are one-time users of the service…
The situation left several Rivermist homeowners thinking they were stuck. They said arbitration proceedings should be public, and that they shouldn’t be required. They are concerned about the cost…
[Article continues]
(From the Washington Post)
Housing recovery could take a decade, economists warn
Even as the housing market shows signs of improvement, including in new data released Tuesday economists warn that it could take up to a decade for many homeowners to regain equity in their homes, while some people in the hardest-hit regions of the country may not see a recovery during their lifetime.
Home prices have fallen 30% since reaching their peak in 2006, and many economists think they will take another tumble this year as more foreclosures pile on the market. The pace of recovery will vary throughout the country, with homes in the most battered markets taking the longest to regain value. Meanwhile, millions of homeowners who are “underwater” — owing more on their mortgages than their homes are worth — face years of negative equity that puts them at a higher risk of foreclosure…
Economists worry that the housing market could stumble later this year when government measures to boost sales, including ultra-low interest rates and a tax credit for home buyers, expire…
Signs of strength
There are some signs that the housing market is strengthening. Homes sales last year increased 5% from 2008 and the backlog of unsold homes on the market fell significantly. The Standard & Poor’s/Case-Shiller home-price index released Tuesday showed that in 20 major cities home prices rose 0.2% on a seasonally adjusted basis between October and November, the sixth straight month-over-month increase…
Speculative buying
…To achieve a healthy recovery, the housing market would need to avoid the quick run-up in prices experienced during the housing boom, economists said. If home prices rise significantly faster than inflation, it could lead to another housing bubble, they said. During a normal market, home prices rise 3% to 5% a year, Yun said. But during the housing boom, the appreciation rate was twice that in many areas. In the Washington region, home prices rose by 10% or more a year between 2001 and 2005, he said. “In the Washington market, which was one of the more bullish markets, it’s going to take many years for people who bought at the peak to see those” prices again, Yun said.
(From the Fort Worth Star-Telegram)
D-FW one of four U.S. metro areas to see higher home prices in November
Home prices in Dallas-Fort Worth increased 1.4% in November from the same month a year earlier, putting the Metroplex among just four major metropolitan areas in the U.S. to see a positive annual gain, according to the latest Standard & Poors/Case-Shiller Home Price Index.
On average, the 20 cities in the index saw a 5.3% drop, the report said. D-FW recorded the highest increase; Las Vegas saw the largest drop, 24.5%. Although home prices were still down in most of the country in November, the dip is slowly turning around, the report said. November marked 10 months of smaller price declines, and it was the third consecutive month that the decline was in the single digits. In the previous 20 months, the year-over-year declines were in double digits…
From October to November, there was no change in D-FW home prices. That compared with a 0.6% decline in October from September. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for the past six months compared with the previous month, the report said. However, Charlotte, N.C.; Las Vegas; Seattle; and Tampa, Fla., posted new lows in November, the report said.
(From the Washington Post)
Existing-home sales take a big fall in December
Existing-home sales take a big fall in December
Sales of previously owned homes took their biggest tumble in at least 40 years last month as the impact of a buying spree spurred by a tax credit for first-time buyers waned, according to industry data released Monday. Those who rushed to meet the original November deadline to take advantage of an $8,000 tax credit for first-time home buyers caused a surge in sales earlier in 2009, but left the market wobbly by the end of the year. First-time buyers, who made up more than 50% of sales earlier last year, represented just 43% of the market in December. The shift also resulted in fewer sales of lower-cost homes, which first-time buyers typically seek.
After three months of increases, sales of existing homes, including condos and single-family residences, fell 16.7% to a seasonally adjusted annual rate of 5.45 million in December compared with the previous month, according to National Association of Realtors data. That was a bigger drop than analysts had expected and the lowest sales rate since August. It was also the biggest monthly decrease on records that date to 1968, according to the industry group…
Congress extended the tax credit until April 30 and expanded it to more potential buyers, raising hopes among some analysts that sales will pick up in the spring. The surprisingly large drop in December raises questions about the strength of the recovery once the revamped tax-credit program expires, analysts said…
The weak sales come as a Federal Reserve program that has kept interest rates near historic lows is set to expire. If interest rates rise this year, it could make a home purchase too expensive for some buyers, analysts have said. The weak labor market and an expected uptick in foreclosures are also expected to weigh on the housing market this year, they said.
[Article continues]
(From USA Today)
Home sales fall on tax credit uncertainty
Home sales last month saw their biggest drop in more than 40 years as buyers left the market because they weren’t sure Congress would extend a tax credit for first-time home buyers. After a surge in sales from September through November, existing home sales tumbled 16.7% in December from November, according to a report Monday from the National Association of Realtors (NAR). That is still 15% above the December 2008 level. For all of 2009, there were 5.1 million existing home sales, which was 4.9% higher than the 4.9 million sales in 2008 — the first annual sales gain since 2005.
Demand for existing homes had accelerated in large part due to the tax credit of up to $8,000 for first-time home buyers, but that credit was due to expire on Nov. 30, 2009. Many new home buyers rushed to buy before that deadline, pushing up sales.
It’s also why 51% of purchasers were first-time home buyers in November. But with the tax credit due to expire, sales — and first-time buyers — dropped out of the market; purchases by first-time buyers slipped to 43% of homes last month…
[Article continues]
(From the Fort Worth Star-Telegram)
Existing-home sales rose in 2009, but median price fell
Sales of previously occupied homes rose in 2009 for the first time in four years, despite a December slump due to a tax credit that led many buyers to complete sales earlier. Still, prices plunged more than 12% last year — the sharpest fall since the Great Depression. The drop — to a median of $173,500 — showed that the housing market remains too weak to help fuel a sustained economic recovery.
Concerns remain that home sales will weaken after March 31, when the Federal Reserve is set to end its program to buy mortgage securities to keep home loan rates low. Once that program ends, mortgage rates could rise. Adding to the worries, a newly extended home buyer tax credit is set to run out at the end of April…
Area impact
Jim Gaines, a research economist with the Texas A&M University Real Estate Center, speaking Monday to the Greater Fort Worth Association of Realtors, agreed that home sales will weaken after the tax credit for first-time buyers expires…
Decline of new buyers
The poor December results reported Monday by the National Association of Realtors occurred after Congress extended the tax credit, easing pressure on buyers to act quickly. December sales fell 16.7% to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the Realtors report said. It was the largest monthly drop in 40 years of record-keeping. Sales had been expected to fall by about 10%, according to economists surveyed by Thomson Reuters. For all of 2009, sales totaled nearly 5.2 million, up about 5% from 2008…
[Article continues]
(From the Dallas Morning News)
Feds find dubious home tax credit claims from Texas
Federal inspectors scouring tax returns that contain a credit for first-time homebuyers have found something curious about claims from Texas. Nearly 1,000 were filed by people employing a special taxpayer identification number primarily used by illegal immigrants, who are not entitled to the credit. The Texas filings represented nearly one-third of the 3,200 suspicious homebuyer credit claims submitted by noncitizens around the country. The value of the credits from all the noncitizen claims was $20.8 million, a U.S. Treasury Department inspector general said. Texas’ total was almost double that of similar suspicious filings from California, a state estimated to have nearly twice as many illegal residents.
Russell George, the Treasury inspector general for tax administration, declined to offer his assessment on the disproportionate number of suspicious homebuyer credit claims from Texas discovered by his investigators…
Boosting the market
The program, which was recently extended to April 30, permits low- and middle-income people who have not owned a home in the previous three years to receive up to $8,000 in tax credits if they purchased a home during the specified time period. The credit was intended to boost the sagging real estate market. The Internal Revenue Service says 1.5 million taxpayers have filed claims for the credit…
Federal action
To date, the Justice Department has filed one criminal case and one civil injunction against tax preparers for submitting false claims for the homebuyer credit. One preparer was from Jacksonville, Fla. The second was from Mission, Texas…
BY THE NUMBERS: HOMEBUYER TAX CREDIT FRAUD INVESTIGATION
3,200 – Suspicious claims for an $8,000 tax credit for first-time homebuyers submitted by noncitizens using an Individual Taxpayer Identification Number
$20.8 million – Value of all ITIN claims
990 – Claims submitted by ITIN filers from Texas
About 160 – Active criminal investigations by the IRS into possible fraudulent homebuyer credit filings
About 100,000 – Claims flagged for review
Figures are from October 2009
SOURCES: IRS; inspector general for tax administration
(From US News & World Report via Yahoo! Finance)
Home Prices Stabilize Further, But More Drops May Be in Store
Although home prices continued to stabilize in November, real estate experts believe we have another 5% or 10% of declines in store before values finally hit bottom. Home prices in 20 major cities declined 5.3% in November 2009 from a year earlier, a significant improvement over the 13.3 annual drop posted in July, according to the most recent S&P/Case-Shiller home price report. The figures, released Tuesday, represent the third month in a row of single-digit declines following 20 consecutive months of double-digit drops. But a number of factors–including the effects of a federal tax credit, still-elevated home inventories, and the prospect of higher mortgage rates–threaten to drag home prices lower from here…
After the historic housing crash dragged real estate values down nearly 33% from the second quarter of 2006 through April of 2009, prices in 20 major U.S. cities have stabilized since. The improvement is rooted in several factors. First, lower prices have made home buying more affordable to many Americans who were priced out of the market in the boom years. Second, a Federal Reserve asset-purchase program has pushed mortgage rates down to near historic lows. Rates on 30-year, fixed mortgages hit 4.88 in November of 2009. Meanwhile, Uncle Sam’s $8,000 first-time home buyer tax credit has helped prod would-be buyers off the sidelines…
And more inventory is on the way. Even if home sales pick up, the market will have to chew through additional properties that will arrive via foreclosure… Moody’s Economy.com expects nearly 2 million foreclosure sales to take place this year.
At the same time, the Fed program that has been instrumental in driving down mortgage rates is slated to expire at the end of the first quarter. Although the Fed could always resurrect the program if mortgage rates get too high, most analysts expect rates to climb from the rock-bottom levels consumers have enjoyed over the past year. Higher rates could siphon off housing demand and create downward pressure on home prices…
[Article continues]
(From US News & World Report via Yahoo! Finance)
Home Sales Tank: What it Means for You
Existing home sales plunged in December, falling nearly 17% from November in their largest month-over-month drop since record-keeping began. Meanwhile, December’s inventory represented a 7.2-month supply of unsold homes, notably higher than the 6.5-month supply recorded in November, the National Association of Realtors reported Monday. Although the monthly decline was larger than expected, the figures are much less jarring when compared with December 2008. Existing home sales remain 15% higher than a year earlier, while raw unsold inventory fell 11% from December 2008 to its lowest level since March 2006.
Although the monthly drop-off was steep, it had been expected for some time. Buyers scrambled to close transactions by November to qualify for the $8,000 first-time home buyers’ tax credit, which was originally set to expire at the end of November. The credit–which was later extended through June–worked to juice home sales figures in November at the expense of December. “The collapse in sales simply reflects the bringing forward of transactions to beat the originally planned expiration of the first-time buyer tax credit,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a report. Here’s a look at what the December existing home sales report means for homeowners, home sellers, and home buyers:
For homeowners: Property owners who have watched home values at the national level drop roughly 30% from their 2006 peaks will see some optimistic-looking data in the report…
For home buyers: Those looking to purchase a home this year should be encouraged by the report, which signals that buyers will at least retain leverage in the real estate market through the spring season…
For home sellers: Although home sales should rise from December’s depressed levels, those looking to sell property this spring will still have to have to work for it…
[Article continues]
(From the Dallas Morning News)
Nailed by recession, remodelers look to rehab results in ’10
LAS VEGAS – Home remodelers that have been hammered by the recession can look forward to better times in 2010. Forecasters say the home improvement and fix-up business should pick up this year after a 25% slide in activity since 2007…
The Harvard researchers said nationwide remodeling expenditures are likely to rise about 6% in the coming quarters. Baker said the cutbacks in home improvement and repair activity during the recession were substantial but were less than half what the homebuilding business experienced…
North Texas outlook
The outlook for increased home remodeling is good news for North Texas builders, some of whom have diversified during the downturn… Even in Dallas-Fort Worth, some homeowners have put fancy fix-up projects on hold for the last year or so…
Smaller projects
Homeowners in the market for a redo are taking a more measured approach. The days of over-the-top remodeling and double-size additions are mostly gone, analysts say… Energy-conserving or environmentally friendly upgrades are still on many homeowners’ must-have lists…
[Article continues]
(From the NY Times)
Huge Housing Complex in N.Y. Returned to Creditors
The owners of Stuyvesant Town and Peter Cooper Village, the iconic middle-class housing complexes overlooking the East River in Manhattan, have decided to turn over the properties to creditors, officials said Monday morning.
The decision by Tishman Speyer Properties and BlackRock Realty comes four years after the $5.4 billion purchase of the complexes’ 110 buildings and 11,227 apartments in what was the most expensive real estate deal of its kind in American history.
The surrender of the properties, first reported by the Wall Street Journal, ends a tortured real estate saga that saw the partnership make expensive improvements to the complex and then try to rent the apartments at higher market rates in a real estate boom. But a real estate downturn and the city’s strong rent protections hindered those efforts, leaving the buyers scrambling to make payments on loans due for the properties, which have been a comfortable harbor for the city’s middle class since they opened in the late 1940s…
Metropolitan Life built the complexes for World War II veterans in the 1940s, when the city was in desperate need of new housing. It received tax breaks and other incentives in return for maintaining low rents. The buildings became home for generations of workers searching for an affordable spot in Manhattan…
[Article continues]
(From the Dallas Morning News)
Builders say home sizes are shrinking
LAS VEGAS – The economic bust hasn’t just shrunk the U.S. job market and retirement accounts. New homes are downsizing for the first time in years… In the last couple of years, there has been almost a 10% drop in the median size of homes started in the U.S., according to statistics from the builders’ association.
The average size of a house completed last year in the U.S. was less than 2,500 square feet – the smallest in three years. And the median size of homes started in 2009 but not yet finished fell further, to 2,094 square feet. The average new home size has been more than 2,000 square feet since the late 1980s. Buyers and builders are becoming more frugal, industry analysts say…
Sales of new homes priced at $150,000 and less were up almost 20% while new houses priced at $300,000 or more fell in 2009. Builders are also eliminating glitzy options… Homebuilders are doing away with fancy outdoor entertaining spaces to concentrate on money-saving options such as energy-efficient cooling and heating systems.
Buyers on board
A new survey of potential homebuyers shows they’re on board with making do with less. “Downsizing continues,” said Eliot Nusbaum of Better Homes and Gardens magazine, which commissioned the study. “36% of people told us they are planning for a smaller home – about a 12% increase from last year…
A big reason home sizes are falling is that there are more first-time buyers in the market taking advantage of price bargains and federal tax incentives, housing researchers say. But the demand for smaller, more efficient homes is more systemic in the market. Both consumers and lenders are tempering their appetites for big houses…
[Article continues]
(From Tech Ticker via Yahoo! Finance)
Home Economics: The Hidden Costs of the ‘American Dream’
The past few years have certainly challenged the idea that real estate prices only go in one direction. But the downside of the “American Dream” is even more pronounced, says James Altucher of Formula Capital. Owning a home has “never been a great investment,” Altucher says, noting housing went up a dismal 0.4% annually vs. 8% for the stock market from 1890 to 2004, according to the Social Security Advisory Board.
Moreover, Altucher says the notion buying a home is a ticket to financial security is a “scam” perpetrated on the American people by corporations seeking to keep us in debt, less mobile and with the storage to purchase all sorts of needless consumer goods. That’s a provocative statement, hard to prove, and certainly subject to debate. Such a view also leaves out the intangibles of home ownership, such as the stability and other benefits raising a family in a community can bring.
Still, it’s hard to argue with Altucher’s main point, as detailed in a recent Daily News article: from a purely economic basis, there’s a lot of downsides and hidden costs to home ownership that get lost in the “American Dream” discussion:
• Insurance premium.
• Property taxes (which usually offset any tax deduction you get from your mortgage interest).
• Maintenance (pipes break, electricity problems, etc.).
• Remodeling costs.
• Utilities (utilities and maintenance for renters is often reflected in the rental price, but it’s not reflected in a mortgage when you own).
• Yard work, pest control, etc. (again, rents usually have this built into the price, but mortgages don’t).
• A down payment of at least 15%, which is $90,000 on a $600,000 home.
Closing costs, usually 5% of loan amount, or another $25,000.
[Article continues, link has video feed]
The ASSET*AmeriCorps Blog 
Joel,
The new site and layout look great! Thanks for putting it together.
–Phillip
Unfortunately that Henry’s Turkey story just keeps dragging on and no one is accepting responsibility.
The story about the service dog is also disappointing, there has to be some sort of explanation.