Your rates of bank

Dear Terry,
Why does the Toyota dealership in Daytona Beach, Fla., deem it good practice to add $3,000 to $6,000 to their Prius manufacturer suggested retail price, while St. Augustine Toyota (45 miles away) quotes an MSRP with no markup? They are both in the Southeastern Toyota district.
You don’t suppose Daytona Beach is taking advantage of people who really want to help reduce gas consumption and planet pollution, do you?
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Inflation to complicate the Fed’s task

Untitled DocumentInflation to complicate the Fed’s task

Maybe the sixth time will be the charm. Then again, it might ultimately create more issues than it resolves. The Fed will most certainly cut interest rates for a sixth time at Tuesday’s meeting in an effort to erase payment increases on adjustable rate mortgages, cushion the economic blow of a recession and vanquish the credit crunch.

A sixth interest rate cut, much as with the previous five, will be received with open arms by those with resetting ARMs. Homeowners with adjustable rate mortgages facing a reset in the coming months have the Fed to thank for an adjustment that will be much ado about nothing, or can in some cases even cause the payments to decline. Talk about a mulligan. Millions of homeowners will get a yearlong reprieve from a painful payment adjustment thanks to the repeated Fed moves, something that will be far more significant to far more people than any foreclosure relief plan or coalition of government and lenders.

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Dear Terry,
We purchased a 2002 car about two years ago. We want to refinance for a lower interest rate. Is our car too old to refinance?
— Cate

Dear Cate,
No car is too old to refinance if the owner has good credit. You should have no problem finding a lender, but interest rates are likely to be higher now than when you bought the car two years ago, assuming your credit situation is the same today as it was then. (more…)

Dear Terry,
We bought our 2007 Honda Odyssey last September and we are paying a car loan with an 8 percent annual percentage rate. So, right now we want to refinance the loan. When is the right time to apply for it?
— Arthur

Dear Arthur,
Since you bought the Honda, car loan rates have gone up. It’s doubtful that you can do better than your 8 percent rate on a refinance. However, you can use Bankrate’s compare auto loan rates feature to try to find a better rate. (more…)

Dear Terry,
I think I’ve made a terrible mistake. My husband and I just bought a car and because of a 2-year-old discharged bankruptcy (me only) we were financed with a high-risk company at 15.25 percent. We have signed all the paperwork.
We wanted to put $2,000 down on the car (used) but the finance company said to put only $400 and that after 30 days we could start putting extra above the monthly payments.

We have now found a way on our own to finance with 11 percent interest. Can we approach the car dealership and cancel the first financial company deal and pay off the car with our new financial option? Or, will we have to deal with the credit company and pay a penalty for paying the car off right away?

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It seems that mortgage servicers aren’t satisfying anyone these days.- advertisement -

Homeowners get fed up when they try to work something out with their servicers, to no avail. Real estate agents complain that mortgage companies drag their heels on short sales. Regulators are restless about the lack of “meaningful improvement in foreclosure prevention outcomes.”

If there’s a lesson for foreclosure-avoiding consumers, it is this: Be patient, don’t take mortgage servicers’ actions personally and be ready to send paperwork multiple times.

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Nina Smith was among those who obtained, but never tapped, her HELOC. Instead, Smith — who owns properties in Nevada and California — thought having an open line of credit for a home she uses as a rental investment in Phoenix would be a smart way to access cash in case of some big emergency.

“Obviously, I have plenty of savings and investments, but I like to have someplace where I have cash that’s liquid. It’s my backup to my backup,” says Smith.

Not anymore. In February, Smith was among 122,000 borrowers who got letters from Countrywide Lending informing her that she couldn’t use her credit line after all.

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Readers sound off on oil, credit

Thursday, July 24
Posted 2 p.m. Eastern

Readers sound off on oil, credit

Fulfilling an earlier promise, here are some of your responses to my post earlier this month on oil prices. My thanks to those who took the time. I’ve interjected a comment or two along the way.

–”I wanted to say I agree with you on the drive-through bit and people sitting there using up fuel … I have been pondering this and several other points of “slack” in our driving habits, that need to be quantified and probably changed. Someone call the CEOs of every fast food place and bank out there and close the bloody drive-through — it’s costing us …”

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Dear Terry,
I went to a car dealership and I saw a beautiful 1999 Dodge Dakota with 75,000 miles for $2,995. This car dealership usually offers “buy here, pay here,” but the dealer said that since this truck has such low miles, I have to buy it straight out.
So he offered me a deal to buy it over time and keep it there until it’s paid for. I gave him $1,000 down and came back a few days later and started the truck up and heard a ticking noise from the front end. It ended up being the motor, so I asked for my money back. He refused. What can I do?
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It’s not just homes that are being taken away these days — cars are also being repossessed at startling rates.- advertisement -

Today’s all-too-frequent recipe for hard times — resetting mortgages, increasing foreclosures, declining home prices and soaring prices for food and fuel — is now peppered with increasing numbers of consumers falling behind on car payments.

Thomas Webb, chief economist at Manheim Consulting, a wholesale vehicle auction operator, says 1,505,000 vehicles were repossessed in 2007, a 10 percent increase over 2006. He predicts another 10 percent increase in repossessions during 2008, sending repo numbers to one of the highest levels in a decade.

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The fallout from the credit crisis and the downturn in the U.S. automobile market is picking up, and buyers who are in position to take advantage can benefit.

First up is a new program by GMAC Financial Services that can help get certain people who have leases on large pickups and sport utility vehicles.

Under the program, first reported by Automotive News, GMAC will offer consumers whose leases are due to expire within the next three months the chance to buy their vehicles for a price considerably below the residual value set when their leases began.

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Dear Terry,
My boyfriend is interested in buying a nice used car. His credit is not good but he has saved up a few thousand dollars. Could you provide me with a list of online lenders or financial lenders who help people with bad credit?
— Cynthia

Dear Cynthia,
There are a wide range of lenders who cater to people with less-than-perfect credit. I can’t endorse any one of them, but here’s a few that you can start with — BarNone.com, CreditOneBank.com and eLoan.com. (more…)

Whether you’re buying a home or refinancing an existing home loan, you’ll soon find out that lenders today are a picky and demanding bunch when it comes to loan approvals. Even well-qualified borrowers are expected to jump through some pretty high hoops to qualify for financing. - advertisement -

But fear not: These tips and suggestions can help you make the best possible impression on the lender of your choice.

Just as job-hunters may wonder what top employers want to see on a resume, prospective borrowers may be curious about what lenders look for on a loan application.

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The sound of the B-52s — quirky, cutting, dance-a-riffic — was not just perky and fun, but always very much of its time. It’s hard to hear “Rock Lobster” or “Dance This Mess Around” without being transported to the days of bizarre new-wave hair and ’80s fashions; by the same token, “Roam” and “Love Shack” are equally transporting to their own era.- advertisement -

So it wasn’t that surprising to learn that the band — Fred Schneider, Kate Pierson, Cindy Wilson and Keith Strickland — had gone 16 years without recording. When news emerged, then, that the band was finally going to release a new record, the curiosity factor was high.

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It’s a common misconception, but in fact, the FHA is not a lender. Nor does the FHA give people money to buy a home or set interest rates on home loans. Rather, the FHA, or Federal Housing Administration, is a federal government agency that offers mortgage insurance on loans originated by lenders that are approved by the agency. This insurance protects the lender in case the borrower defaults on the loan.- advertisement -

The FHA was set up in 1934 after the Great Depression and is a division of the U.S. Department of Housing and Urban Development, or HUD. FHA-insured loans enjoyed decades of popularity, but then fell out of favor during the recent housing boom in part because lenders began to offer subprime loans that had artificially low initial interest rates and monthly payments. These subprime loans have since proved disastrous. As a result, lenders have tightened their credit standards and borrowers have flocked to the comparative safety and familiarity of FHA-insured loans.

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As the FDIC mops up the mess that was once IndyMac Bank, consumers are left with unpleasant images of long lines of worried customers waiting to get their uninsured deposits back. There was approximately $1 billion in uninsured deposits spread among consumers, businesses and nonprofit organizations.- advertisement -

The sad reality for those customers is that they’re getting $0.50 on the dollar for their excess deposits. Anything they get above that will be determined by the sale of IndyMac assets. You can bet many individuals had substantial amounts of money not covered by FDIC insurance and may end up losing at least a quarter of their funds.

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Job market: bad to worse

Untitled DocumentJob market goes from bad to worse

The March employment report released this morning was anything but pretty. The unemployment rate increased from 4.8 percent to 5.1 percent, which isn’t unexpected at all. But more troubling is the fact that we’ve now seen three straight months of job losses. Last month, when we were at two in a row, was enough to convince me we are currently in a recession. The news was even worse this time around.

In March, payrolls shrank by 80,000 jobs. The two preceding reports for February and January were revised lower, from 63,000 job losses in February and 22,000 job losses in January to a loss of 76,000 jobs in EACH month. So the job losses for the first two months of the year double and the initial March reading showed even more job losses.

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Fed blog: Fed cuts rates

Untitled DocumentFed cuts rates by 3/4 point

Just eight days before a regularly scheduled meeting, the Federal Open Market Committee took aggressive action, slashing short-term interest rates by three-quarters of a percentage point. The federal funds rate is now 3.5 percent, and the prime rate will subsequently decline to 6.5 percent.

In doing so today, as opposed to last week when it was a drumbeat of one poor economic release after another, the Fed will open itself to criticism of pandering to stock investors and being too far behind the curve to help the economy avert recession. Global stock indices have declined by more than 10 percent in some cases, just this week.

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Where did all these high-mileage cars come from all of a sudden?

It seems you can’t watch TV, surf the Internet or pick up a newspaper without seeing an advertisement from an auto manufacturer touting a vehicle that gets 25 to 30 miles per gallon or more.

If all these thrifty and, by extension, environmentally friendly vehicles are out there, why didn’t we know about it before now?

The truth, as always, is in the fine print.

General Motors is shouting the loudest about this, boasting that it sells more vehicles that get 30 miles per gallon or more than Toyota or Honda.

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Dear Terry,
I need some real help. My husband decided to buy a truck I told him he couldn’t afford, he has terrible credit. And with me being a trusting wife, I let him put my name on the truck.

Shoved aside by the hot mortgage products of recent years, Veterans Affairs mortgage loans are making a comeback and are a viable financing alternative for veterans looking to secure an attractive fixed-rate loan with little or no money down.- advertisement -

The loans, guaranteed by the federal government, are available through local banks and mortgage brokers around the country.

If you’re an honorably discharged veteran, are currently serving on active duty or have completed a total of six years of service in the National Guard or selected reserves, you are eligible for a loan. Certain surviving spouses of veterans are also eligible.

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Stefanie Powers has been thrilling audiences for over 50 years with her looks and talent.- advertisement -

Although she appeared in feature films, including “Stagecoach,” “The Interns” and “McLintock!” it’s her small-screen credits that have brought her worldwide recognition: “The Girl From U.N.C.L.E.,” “Deceptions,” “The Burden of Proof” and, of course, the ’80s hit, “Hart to Hart.”

At age 15, Powers, who was born in Hollywood, was signed to a movie deal with Columbia Pictures. She married actor Gary Lockwood in 1966, a union that lasted six years. In 1974, Stefanie formed a friendship with actor William Holden that later blossomed into a romance. Holden was passionate about wildlife conservation, co-founding the Mount Kenya Game Ranch in Africa, a game preserve and animal orphanage. After he died in 1981, the William Holden Wildlife Foundation was created in his memory to further animal conservation education and efforts.

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Dear Dr. Don,
My husband wants to cash in a $25,000 CD to pay off an auto loan of about $23,000. We are in our late 50s. We have some money in pension plans and invested in 401(k) plans. We would not have six months of emergency funds if we go ahead with this plan.
The auto loan is at about 7 percent and the CD is paying roughly 4 percent. We are in disagreement about how to handle this situation. Please help give any advice you can on this topic.
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Homebuyers are looking for a steal; home sellers are looking for an out, and homebuilders and banks are selling homes at cut-rate prices. Combined, these conditions have triggered a wave of lowball offers to buy homes in distressed U.S. housing markets.- advertisement -

Conventional wisdom claims that lowball offers don’t work. Homebuyers are warned not to “insult” sellers, who are counseled not to counter offers from “disrespectful” buyers. Real estate salespeople are stuck in middle, oftentimes unwilling to engage in prolonged negotiations that might not earn commissions.

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What to make of the GDP?

Untitled DocumentThursday, Aug. 28
Posted 4 p.m. Eastern

What to make of the GDP?

The revised Gross Domestic Product for the second quarter was issued this morning, and the number was surprisingly high. The economy expanded at a 3.3 percent annualized pace during the second quarter, a sharp upward revision from the 1.9 percent pace reported just one month ago. Much of the revision is attributable to exports - in other words, goods purchased not by American consumers, but consumers in other countries.

With other major economies around the globe in even worse shape than the U.S. economy (Japan, Germany and the United Kingdom to name a few), such a boost is unlikely to be sustained.

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