Category Archives for "credit"

The Mortgage Market Is Rigged Against Borrowers

by Jack Guttentag

Yes, the mortgage market is more rigged against borrowers than ever before. If only PMI had been required on all buyers between 2001 and 2007…what if?

In my last column, I indicated that most mortgage borrowers who need private mortgage insurance are not aware that they have options in the kind of premium plan they select. Almost all are directed into monthly premium plans. Yet for many borrowers, the total cost over the period the borrowers will have the mortgage will be higher on a monthly premium plan than on a single financed-premium plan. In every case, furthermore, the increase in payment will be larger on a monthly premium plan.

A Market Rigged Against Borrowers: Why aren’t borrowers offered the option?

More on Mortgage Market Rigging

, ,

Debt Consolidation Solutions

Guest post by Mark Parker

Christian debt consolidation solutions aim at providing ultimate solutions to fellow catholic communities who are burdened with debt. Piling up debt can be quite uncomfortable for one and all. In order to sustain a better financial portfolio, debtors should ideally seek out Christian debt consolidation solutions all the time. The basic premise behind Christian debt consolidation solution is that it will consolidate debt from various credit sources and present competitive payment terms and lower interest rates to the debtors in just about no time at all. As a result, managing debt becomes a lot easier and a streamlined process. 

Christian debt consolidation solutions can be powered through with the help from expert debt consolidators and financial advisors. Based on the risk profile, debt consolidation quotations can be provided to the debtors in just about no time at all. Christian debt consolidation solutions are known to have been offering cutting edge debt management solutions to those who are in-debt burden. The smarter solutions have indeed helped millions of debtors in a seamless manner. Debtors have appreciated the intrinsic fact of a debt consolidation program viz. to provide substantial savings to the debtors though Christian debt consolidation initiatives.

In order to ensure longer term benefits it is imperative to seek services from reliable Christian debt consolidation providers at all times. This will power through the liquidity crunch portfolio with ample positive cash flows and at the same time will ensure that the monthly debt payments are delivered to the creditors without fail. Christian debt consolidation solutions can provide a win-win scenario for both debtors and creditors. 

Debtors generally get to benefit from lowered interest rates on the go in just about no time at all. Whereas the creditors can be rest assured of their timely payment schedules because of a Christian debt consolidation solutions. In quest to reach to more audience in shorter span of time, online channels can also be explored for Christian debt consolidation solutions. These can provide competitive landscape of solutions to one and all in a fair manner. Prospective borrowers can get to earn endlessly from online Christian debt consolidation solutions. 

They can iteratively play around with the risk factors and input parameters in order to arrive at the best in class competitive interest rates on Christian debt consolidation programs in just about no time at all. Get going and benefit from Christian debt consolidation programs on the go in order to power through financial concerns.

Mark Parker is a contributory writer associated with the Debt Consolidation Care Community and has written several articles for various financial websites. He holds his expertise in the Debt industry and has made significant contribution through his various articles.

Despite Spiraling Contagion Fears, Spain Debt Worries Are Overblown

[Editor's Note: Investors battered stocks again yesterday (Wednesday) over fears that the Greek debt contagion will spread to Portugal and even to Spain. Money Morning's Martin Hutchinson, a former merchant banker who has written extensively about the European debt crisis, explains why the Spain debt situation isn't so dire.]  

Spain FlagIt had a huge housing boom, and is now dealing with the fallout. It has a left-of-center government and a big budget deficit, but relatively low debt in relation to its gross domestic product (GDP). And it has a worrisome current account deficit.

I'm talking, of course, about Spain, which investors clearly fear will be the next domino to fall as a result of the Greek debt contagion.

I disagree. 


The Spain debt outlook is nothing like that of its Greek counterpart. When you get right down to it, Spain looks more like the United States than it does the other European "PIGS" (Portugal, Ireland, Greece and Spain, or "PIIGS," if you wish to include Italy). It's because of those U.S. similarities that Spain is fairly unlikely to share the fate of its Mediterranean neighbor, Greece, which is essentially insolvent.

Indeed, in one respect, Spain's position is actually much better than its U.S. counterpart. We'll see why shortly.

A Tale of Two Monocracies

Like Greece, Spain suffered from a reviled dictatorship that exited the scene in the 1974-1975 time frame. The dictatorship in Greece ended in 1974 with the collapse of the "Regime of the Colonels," while the curtain came down on Spain's autocracy in December 1975 with the death of General Francisco Franco.

However, both the tenure of the dictatorships and the two countries' reactions to the collapse of their respective regimes were quite different.

Greece's dictatorship lasted only seven years, was never stable, and occupied itself mostly with corruption, military expenditure and saber rattling in Cyprus. Franco, on the other hand, after winning a truly devastating civil war in 1939, devoted himself over his remaining 36 years to developing his country's economy on a more or less free-market basis, with low public spending, while maintaining an international posture of caution and neutrality.

With the two countries traveling down such divergent paths, it's no surprise that they experienced very different outcomes. By 1975, Greece was a total basket case, with only its offshore (and non-taxpaying) shipping sector flourishing, whereas Spain was a rapidly developing tourist magnet, with a substantial industrial economy behind it.

The Next Phase

After 1975, the two countries continued to develop very differently. Greece – which had exiled its king, Constantine II – elected the leftist socialist Andreas Papandreou and in 1981 joined the European Union (EU), where it became a master in the art of subsidy corruption: After all, Greece was the union's poorest country at that time.

Spain, on the other hand, kept King Juan Carlos, who thwarted a coup in 1981, elected a moderate social democrat government under Felipe Gonzalez followed by a very good center-right one under Jose Maria Aznar. The nation also developed the best luxury tourism sector in Europe, together with one of its best business schools in the University of Navarra's IESE.

Today, while both countries have similar per-capita GDPs – $33,700 for Spain and $32,100 for Greece – Spain is ranked 32nd on Transparency International's Corruption Perceptions Index, while Greece is ranked 71st – below much poorer countries like Bulgaria and Ghana.

Spain's debt load – at about 55% of GDP – is less than half of its Greek counterpart. Clearly, Greece's GDP per capita needs to be sharply deflated for the country to regain competitiveness; it's much less clear that Spain needs to do the same.

Why Spain Won't Flinch

In addition to a budget deficit of 11.5% of GDP in 2010 – very similar to that of the United States – its banking and real estate mess (though the largest bank, Banco Santander SA (NYSE ADR: STD) is pretty solid), and its relatively low debt, Spain (also like its U.S. counterpart) also has itself a left-leaning government with a proclivity for overspending.

Prime Minister Jose Luis Rodriguez Zapatero was unexpectedly elected on an anti-U.S. platform after a terrorist attack in 2004, and was re-elected in 2008 – both times by small majorities. Zapatero is undoubtedly responsible for much, though not all, of Spain's budget problems; he undertook two economically damaging "stimulus" packages in 2008 and 2009 and has raised public spending from about 38% of GDP when he took office to 46% of GDP today.

In fairness to Spain, the big run-up in spending wasn't due to a big run-up in poorly thought out handouts: The country moved enthusiastically – perhaps too much so – into the green-technology sector, to the point where an all-too-familiar boom-and-bust scenario played out.

Like the United States, Spain is stuck with its left-leaning administration until 2012 (both have four-year electoral cycles; Spain's is seven months earlier). However, it has one enormous advantage over the United States – a savings ratio (personal savings as a percentage of disposable income) that stood at an extraordinary 24.7% in the 2009 fourth quarter, compared with a mere 2.7% in the latest month here in the United States.

Admittedly, Spain's saving is highly cyclical, so the annual average is only about 20%. Nevertheless, the much-higher level of domestic saving suggests Spain should be able to finance its budget deficit domestically much more easily than will the United States.

With public debt also lower than in the United States – let alone in Greece – Spain's position is thus fundamentally sounder. It should be relatively easily able to navigate the current storm and ride out the current government's spendthrift tendencies – giving the voters the chance to put a more-fiscally-appropriate government in place in the next election.

That being said, investors have to acknowledge that panic can trample logic. Indeed, as U.S. investors learned all too well back in 2008, in a market panic even well-run institutions can get into trouble (not that many of the Wall Street houses of that year were well-run, but a few were).

The same is true of countries, and Spain under Prime Minister Zapatero has weak-and-economically damaging leadership, which the voters are stuck with for another two years. Nevertheless, with its debt rating still a very respectable "AA," only the worst storm should cause Spain to take the same kind of crisis-spawned battering that Greece continues to face.

[Editor's Note: With Martin Hutchinson, Money Morning readers have seen it time and again – the kind of creative, profit-focused thinking that's allowed him to succeed again and again where other experts have failed – one right after the other. And Hutchinson has pulled off this string of successes in the face of the worst financial crisis since the Great Depression – a financial crisis that, not surprisingly, Hutchinson is widely credited for having predicted and warned about well ahead of time.

For those who aren't regular readers, and who might like an additional illustration of Hutchinson's abilities, consider dividends, the icon of the super-conservative investing set, and gold, the safe-haven nest of perpetual inflation hawks.

With his "Alpha Bulldog" investing strategy – the crux of his Permanent Wealth Investor advisory service – Hutchinson has managed to combine dividends, gold and growth in a winning formula that has developed eye-popping returns for subscribers. To find out more about opportunities related to dividends, gold, "Alpha-Bulldog" stocks and The Permanent Wealth Investor, please click here.]


iShares MSCI Spain Index (ETF) (Public, NYSE:EWP)

Tips to Ward Off the Evils of Credit Card Fraud

A guest post by Dorothy of the [redacted due to the guest poster’s idiocy]

Credit cards are a common financial accessory that people use for their day to day transactions. So it is important that we protect our credit cards. As information technology is booming, scammers are taking advantage of it and are fraudulently stealing credit card numbers. As a result, credit card frauds are leaving people distressed and pushing them towards a severe financial crisis.

Credit cards come with a lot of utilities. But if they are stolen or forged, it takes a heavy toll on your finances. In the U.S. you will find various credit card debt management or consolidation plans. However consolidating debts could ruin your credit score as well. There are many consolidation firms that mislead people with their flashy adverts and a false promise. Confide into them only when you have cross-checked their goodwill. One reason why these credit card frauds are increasing is losing your cards or leaving your receipt after shopping or making any other transactions. This allows credit card fraudsters to access your card numbers. Here are some tips for you for not getting into the trap of fraudsters:

  • Make sure you check your monthly statements and evaluate them. You can also use the direct bill payment system through your credit cards to avoid frauds.
  • It is very important to protect your Personal Identification Number (PIN) if your card has an access to an Automated Banking Machine.
  • Make sure you dispose of all your unwanted cards and destroy them as well.
  • In case your card is stolen, report it immediately. Card frauds take place within a few hours after the theft.
  • If you suspect a fraud, report it to your credit card company.
  • Ensure that your card has security features such as signature panel, hologram, magnetic stripe and embossing.
  • Never sign a credit or debit receipt without an amount. If you find blank spaces, mark X or draw a lime across the space.
  • You can also go for a registration service. You will have to pay a small fee to manage your credit cards. In case you lose your cards or they get stolen, the service will report this loss and request for new credit cards.

Fraudsters often get access to your credit card from various fraud companies. So never give out your account details to a company who has called you. You can check out the reputation of a company at your local consumer protection office or Better Business Bureau. The moment you lose your credit card report it. Remember that you can never be made liable for any unauthorized charges.

The FTC works for the consumer to prevent credit card frauds and other criminal practices. To file a complaint or to get free information on consumer issues, visit or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Moving Beyond the Holiday Hangover

Guest Post by Christian Gordun

The holiday hangover is not over yet – most of us still have a stack of holiday shopping bills piled up on our coffee tables or desks to deal with. In a recent post, we addressed one way people can rebound from the holidays and start anew this year, but just like any hangover, the ultimate cure involves more than just one simple trick.

Let’s take a look at some reasons why shoppers often end up with a massive debt headache and arm you with some simple but effective money-saving tips that will help you stick to your budget and avoid the infamous holiday shopping hangover.

The Cause

During the holiday season, shoppers are often rushed to check off all the items on their list and will forgo some of the easiest ways to save money such as checking out competitive prices or using coupons. As they get caught up in the holiday buying frenzy, many are forced to make impulsive purchases while last-minute shopping at stores, instead of researching different options online. The holiday rush causes consumers to forget how much they are spending and rack up massive credit card debt, which has shoppers making New Year’s spending resolutions they know they’ll never keep.


The Cure

Instead of making all those impossible resolutions, we’re going to let you all in on a little secret that will leave you debt-free after every holiday shopping season: you never have to pay full price for anything again! As a result of the recession, more retailers than ever are giving you the chance to save money via online coupon codes and deals. It’s simple, just follow these rules:

  1. Go Online: Stop printing and start clicking! If you come across an invalid coupon, it’s easier to find a replacement when you’re shopping online rather than when you’re at a store.
  2. Think Outside the Grocery Cart: Step away from the idea that coupons should only be used to buy groceries. There are coupon codes for almost every item that you can buy online – from magazine subscriptions to electronics and flowers.
  3. Time it Right: The best online deals are offered three times a month: the very beginning, the very middle and the very end. Online stores post fresh coupons the 1st-3rd of the month, the 14-16th, and the 28th through the end of the month.
  4. Avoid Shared Coupons: Avoid using sites that let users post coupons because the likelihood they will be faulty or expired is much higher. Instead use sites which ONLY post coupons that are approved by the retailer.

Coupon Craze is an online coupon code and deal site that will help you follow these coupon commandments. Like we said last time, if you’re hungover, you take aspirin, have a greasy breakfast, get hydrated and sometimes swear that you’ll never do that again! Treat a financial hangover the same way. Create a budget and then stick to it by using online coupons.

Are you ready to make online coupons a part of your shopping routine? Let us know!


About the Author

Christian Gordun is the founder and CEO of Coupon Craze, a free consumer resource with online coupon codes and deals from over 10,000 retailers. He founded the company in 2000 as a hobby, and prior to taking it on fulltime, spent five years as a senior programmer and technical project manager. He received his master’s degree from London Business School in 2008.