Global surveyors want greener appraisals

–Housingwire

The issue of whether or not a property is more environmentally friendly when compared to neighboring homes is not currently taken into great account during the appraisal process.

It’s a practice that should end, according to a recent white paper from the Royal Institute of Chartered Surveyors.

RICS is suggesting that, in cases when homes contain sustainability features such as solar panels or tankless water heaters, it should favorably impact the appraisal.

“A property’s sustainable status can cover a range of social, environmental and economic matters that can potentially lead to changes in demand and therefore affect value,” said Ben Elder, RICS global director of valuation.

While RICS is most recognized in the United Kingdom, the independent land valuation association maintains a network of 100,000 qualified members and more than 50,000 students and trainees in 140 countries, including the United States.

Sustainability features can also include a home’s energy efficiency rating and green materials used in construction, but RICS says the concept needs to go even further.

For example, if the home is close to public transportation, it lowers the carbon footprint of residents. This should also make the property more valuable, the white paper states.

“When calculating a property’s worth, the market doesn’t always take the issue of sustainability into account, but this could also have been said for central heating way back in the 1970s when people weren’t convinced it was going to have a market impact,” said Elder, who is expecting some industry headwinds.

“With the increased emphasis on green living and energy efficiency, it is highly possible that the market will need to adapt,” he added.

Homes built in the aftermath of the U.S. financial crisis should be more efficient in their use of space and energy to address a renewed emphasis on cost-consciousness among homebuyers, New York-based residential developer Mitchell Hochberg, principal at Madden Real Estate Ventures, told HousingWire in an interview appearing in the September issue.

Homebuyers are willing to pay more to get green features because they realize the operating costs of the home long term are far more important than the potential additional costs associated with buying a green home, he said.

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Dodd-Frank Act a Favorite Target for Republicans Laying Blame

–The New York Times

On the stump, words like “Obamacare” roll off the tongue. “Swap execution facility,” not so much.

That has not stopped Republican presidential candidates from using the Dodd-Frank Act, the sprawling regulatory effort to address the causes of the financial crisis, as their newest anti-Obama target for what ails the economy.

Republicans have repeatedly invoked the law’s 848-page girth — and its rules on, among other things, trading derivatives and swaps — as a symbol of government overreach that is killing jobs.

But in trying to turn Dodd-Frank into the new Obamacare, the disparaging term that opponents use to refer to the new health care law, Republicans are largely ignoring the basic trade-off that the financial law represents, supporters say.

“Dodd-Frank is adding safety margins to the banking system,” said Douglas J. Elliott, an economic studies fellow at the Brookings Institution. “That may mean somewhat fewer jobs in normal years, in exchange for the benefit of avoiding something like what we just went through in the financial crisis, which was an immense job killer.”

So far, only a small portion of the law, which was signed by the president in July 2010, has taken hold. Of the up to 400 regulations called for in the act, only about a quarter have even been written, much less approved.

Dodd-Frank aims to rein in abusive lending practices and high-risk bets on complex derivative securities that nearly drove the banking system off a cliff. It creates a bureau to protect consumers from financial fraud, cuts the fees banks charge for debit card use, and sets up a means for the government to better supervise the nation’s largest financial institutions to avoid expensive and catastrophic failures. And it calls for swap execution facilities, or exchanges on which derivatives and other complex financial instruments are traded.

Republicans say Dodd-Frank is the root of some of today’s economic problems. It has stopped banks from lending to “job creators,” they contend, and is a direct cause of high unemployment. “It created such uncertainty that the bankers, instead of making loans, pulled back,” said Mitt Romney, the former Massachusetts governor, speaking at a South Carolina rally over Labor Day weekend where he again called for the law’s repeal.

“I think part of that flows from the fact that the people who were putting that together, Dodd and Frank,” he continued, referring to Democratic lawmakers former Senator Christopher J. Dodd of Connecticut and Representative Barney Frank of Massachusetts, “as much as anyone I know in this country were responsible for the meltdown that we had.” 

Mr. Frank demurs.  “Their claims are literally based on nothing but misconception,” he said. “The legislation is very popular. Nobody wants to go back to totally unregulated derivatives. Nobody wants banks to go back to making loans without having to retain some of them. This is a debate that is being conducted for the right wing.”

Rick Perry, the governor of Texas, has also called for the repeal of Dodd-Frank. “We have to end it right now,” he said, on the same weekend in the same state as Mr. Romney. Newt Gingrich said it is “a devastatingly bad bill” that is “killing small banks, killing small business, killing the housing industry.”  Representative Michele Bachmann regularly reminds voters that she introduced the first Dodd-Frank repeal bill this year.

Former Gov. Jon Huntsman of Utah agrees, but he wouldn’t stop there. He would also eliminate the Sarbanes-Oxley law passed in 2002, which set standards for corporate accountability in the wake of the Enron scandal.

The candidates could find that there are some political dangers to their deregulation strategy, as Republicans in Congress learned last year during the debate over the legislation. Then, opponents of measures to address the causes of the financial crisis found themselves rather easily painted as defenders of Wall Street financiers and the banking industry, rather than being on the side of borrowers and consumers. Mr. Obama has signaled recently that in the 2012 campaign he plans to portray Republicans as defending corporations and the wealthy.

These political risks probably account for the Republicans’ current effort to portray Dodd-Frank as an enemy of jobs rather than as a burden to banks. Most of the regulations included in the law fall on the big banks that were at the center of the financial crisis — Bank of America, Citigroup, Wells Fargo and JPMorgan Chase.

Those names rarely pass the candidates’ lips, however, as Republicans have turned Dodd-Frank into a piñata. Instead, they invoke community bankers — the small-town lenders who are more likely to be seen coaching a Little League team than wearing a pinstripe suit — as the beleaguered victims of overregulation.

Community bankers worry about Dodd-Frank rules setting limits on how much banks can charge for debit card transactions. Those rules have yet to go into effect. In the meantime, the bankers say, they have plenty of money to lend, but small-business owners are not asking for loans.

“There are a lot of qualified borrowers who don’t want to borrow, because they are not sure what is going to happen with the economy,” said R. Todd Price, president of the First State Bank of Mesquite, Tex. “I don’t know if that can be directly associated with Dodd-Frank,” he added. While the law “will put a whole lot more regulations especially on community bankers,” he said, “I think they’re yet to come.”

The arguments of the Republican candidates have some support among economists, particularly conservatives. Todd J. Zywicki, a senior scholar at the Mercatus Center at George Mason University, says that credit is the lifeblood of the economy, and that Dodd-Frank was designed to decrease access to credit. “Dodd-Frank is the thing that is most harming the economy right now,” he said. “Big business can deal with regulatory uncertainty, but it makes small businesses reluctant to take on risk and expand their operations.”

Unless Republicans capture the presidency and can also muster 60 votes in the Senate, it appears unlikely that Dodd-Frank will be repealed in full. Senate and House Republicans introduced such bills, but they have never been brought up for floor votes.

But there has also been relatively little resistance from Democrats in defense of Dodd-Frank. Federal agencies have been busy writing regulations to put the law into effect, but those efforts have not generated the widespread public debate that occurred when the legislation was debated in Congress. Without someone on the Democratic side actively fighting on its behalf, Dodd-Frank, for the moment at least, has been left without a champion.

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G.O.P. Urges No Further Fed Stimulus

–The New York Times

Even though the financial markets have been counting on the Federal Reserve to take action, Republican Congressional leadership sent a letter to the Federal Reserve chairman on Tuesday evening urging it not to engage in further stimulus.

The letter was sent in the midst of a two-day meeting in which Fed officials are widely expected to undertake policies to lower long-term interest rates. That move would be intended to loosen up credit in hopes of promoting growth. The meeting ends Wednesday, and the Fed is expected to release a statement Wednesday at 2:15 p.m.

“We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy,” said the letter, signed by four of the top Republicans in Congress: Mitch McConnell of Kentucky, the Senate Republican leader; Jon Kyl of Arizona, the Senate Republican whip; House Speaker John Boehner of Ohio and House Majority Leader Eric Cantor of Virginia.

The Fed’s chairman, Ben S. Bernanke, has not said further stimulus was in the works, but economists and analysts have repeatedly asserted that they believe the central bank will announce more easing.

“I just don’t think the Fed will sit idly as momentum fizzles in this recovery,” said Dana Saporta, a United States economist at Credit Suisse.

Minutes from the Fed’s latest meeting revealed sharp dissent within the group of policy makers, so further stimulus is not necessarily a sure bet.

As the Republican letter notes, economists are divided on how much the move would help the stalled recovery. The Fed, after all, has tried several rounds of monetary stimulus in the last four years.

Republican Congressional leaders expressed not only skepticism that further easing would improve the recovery, but also concerns that such actions might be damaging.

“Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers,” the letter from Republicans said.

Many economists, however, are unconvinced by these risks and argue that a weakened dollar would be good for the country because it would make American exports more attractive.

With unemployment at 9.1 percent and Congress unable to agree on fiscal policies that might encourage job creation, many advisers have been calling on the Fed to continue using whatever ammunition it has left.

The Federal Reserve is an independent body whose decisions do not have to be ratified by the president or Congress, and efforts to influence monetary policy are discouraged to maintain its credibility.

“Even if I agreed” with the Republican letter, Tony Fratto, a former adviser to President George W. Bush, wrote in a Twitter post, “I’d still disagree with the effort to put public political pressure on Bernanke.”

Over the years, there have been many efforts by members of both parties, from both the White House and Congress, to influence Fed policies, according to Allan H. Meltzer, a political economy historian at Carnegie Mellon.

Less than a year ago Michele Bachmann, a Minnesota congresswoman who is running as a Republican presidential candidate, sent a letter to Mr. Bernanke urging him to refrain from the last round of stimulus, which the Fed ultimately decided to do.

In recent months other Republican presidential candidates have stepped up their attacks on Fed policy, with Rick Perry, the governor of Texas, calling further easing “treasonous.”

Fed critics have said they are merely trying to counter pressure from Democrats for the Fed to do more.

“This is the most politicized Fed we’ve ever had,” Mr. Meltzer said. “They’ve been doing the Treasury’s work for quite some time, buying things like Treasuries and bonds. It’s no surprise that there’s political pressure coming from the other direction.”

The Federal Reserve was meant to be independent so that it would be shielded from short-term political interests, and Fed officials have repeatedly said they are unmoved by external political pressures. A Fed spokeswoman acknowledged receiving the letter on Tuesday evening but she declined to comment further.

Appearing to cave to political interests — on the left or the right — could compromise the Fed’s authority and jolt markets even more than a popular or unpopular policy decision.

If anything, Federal Reserve members seem to be trying show their ability to exert their own influence. Traditionally, Fed officials have refrained from commenting on fiscal policy except in the vaguest of terms, but in an August speech Mr. Bernanke called on Congress to avoid steep spending cuts in the near future. He also gave specific recommendations for fiscal measures to promote long-term growth.

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Fed Runs Risk of Doing Less Than Investors Expect

–The New York Times

Investors have concluded that the Federal Reserve will announce new measures to promote economic growth after a meeting of its policy-making committee ends Wednesday. Long-term interest rates have moved as if the Fed had already spoken.

The central bank is often described as facing the choice of whether to do more to improve the economy. But the anticipatory behavior of investors means the Fed really faces a slightly different choice, one it has confronted often in recent years: whether to risk doing less than expected.

The overriding argument for action is the persistent weakness of the American economy, which has left more than 25 million Americans unable to find full-time work.

The Federal Reserve chairman, Ben S. Bernanke, who has made a series of unusual efforts to revive growth, has not discouraged speculation that he is ready to try again.

“I think the Fed has no choice but to act,” said Krishna Memani, director of fixed income at Oppenheimer Funds. “If the Fed were not to do anything having built market expectations to a pretty decent level, I think the markets would react quite negatively to that.”

But the Fed also faces mounting pressure against additional action, including strident criticism from Republican presidential candidates and divisions in the policy-making committee. Moreover, the options available to the central bank have less power to generate growth, a greater chance of negative consequences, or both, than those it has already tried.

Some close watchers of the central bank say investors’ behavior could let the Fed offer a token gesture now, postponing any larger move at least until its next meeting in November. After all, the Fed is reaping the benefits of action without the costs.

“There is no reason for the Fed to rush,” Lou Crandall, chief economist at Wrightson/ICAP, wrote in a recent note to clients predicting such an outcome. “It is in the Fed’s interest to milk the anticipation effect as long as possible.”

The move markets are anticipating is a new effort to reduce long-term interest rates, which would allow businesses and consumers to borrow more cheaply. Yields on the benchmark 10-year Treasury note fell to a record low of 1.88 percent at the start of last week, reflecting the Fed’s earlier efforts to lower rates and investors’ pessimism about the economy.

The hope is that an additional reduction in rates will provide a little more encouragement for companies to build factories and hire workers and for consumers to buy cars and dishwashers.

The Fed has held short-term rates near zero since December 2008, by increasing the supply of money.

To further reduce long-term rates, the Fed bought more than $2 trillion in government debt and mortgage-backed securities, reducing the supply available to investors and thereby forcing them to pay higher prices — that is, to accept lower interest rates.

The Fed could seek to amplify that effect by adjusting the composition of its portfolio, selling short-term securities and using the proceeds to buy long-term securities, which it predicts would further reduce rates.

An analysis by the forecasting firm Macroeconomic Advisers estimated that such an effort by the Fed could raise gross domestic product by 0.4 of a percentage point over the next two years, and create about 350,000 jobs. That is comparable to estimates of the impact of the central bank’s most recent aid campaign, the QE2, or quantitative easing, purchases of $600 billion in Treasury securities, which concluded in June.

Mr. Bernanke announced in August that the Federal Open Market Committee, the policy-making board, would meet for two days, extending its scheduled one-day meeting this week to include both Tuesday and Wednesday, to consider that and other options.

The Fed could take smaller steps, like promising to maintain current efforts longer. It may also consider options that could deliver a more powerful jolt to the economy, like increasing the size of its investment portfolio again. But more aggressive measures have little internal support.

The Fed, Mr. Bernanke said, is “prepared to employ these tools as appropriate to promote a stronger economic recovery in a context of price stability.”

He still commands a solid majority of his 10-member board despite the emergence of the largest bloc of internal dissent in two decades. Three members voted against the decision last month to declare an intention to hold short-term interest rates near zero for at least two more years, replacing a stated intention to maintain the policy for an “extended period.”

The central bank has also become a target of conservative politicians, with several Republican presidential candidates denouncing its efforts to increase growth. But even Mr. Bernanke’s internal critics dismiss these attacks.

“I don’t spend a lot of time worrying about what any one candidate says about us,” Richard W. Fisher, president of the Federal Reserve Bank of Dallas, told Fox Business Network in a recent interview. “The issue is to get it right.”

Of greater concern is the possibility that the Fed is nearing the limits of its powers. Interest rates are already depressed and, like a board mounted on a spring, pushing down gets harder as the floor gets closer.

Studies also have found the Fed’s success in reducing rates has not yielded the full measure of predicted benefits. Mortgages and small business loans may be cheap, but because lenders remain cautious, they are not easy to get.

The research firm Capital Economics said recently any renewed effort by the central bank would be unlikely to overcome those obstacles.

“We don’t expect it to have any dramatic impact on the wider economy because many households will still not qualify for loans at those lower rates,” it said.

The Fed also would face an increased risk of losing money on its investments.

And only so many Treasuries are available for sale. If the Fed sold all of its securities maturing in the next four years and bought only securities maturing in more than 17 years, maximizing its impact, it would end up with 70 percent of the available long-term inventory. That could interfere with the normal operations of insurance companies and other traditional buyers.

Laurence H. Meyer, a former Federal Reserve governor who now leads Macroeconomic Advisers, said he expected the Fed to conclude that the potential benefits outweighed these issues, but that it needed more time to hammer out details.

“We expect them to come out of the committee meeting feeling that they’ve decided and have a consensus to move in November,” he said.

Mr. Meyer suggested that the Fed could mollify the markets by announcing what amounts to a preview, by investing the proceeds of maturing securities — about $20 billion each month — in longer-term debt.

Such a move might not do much to move the economic needle, because the amounts involved would be minute by the standards of monetary policy, but it could be enough to preserve the valuable conviction that the Fed will do more soon.

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Fannie and Freddie Could Raise Fees in 2012

–Realty Biz News

Analysts believe that the government may need to charge higher fees to lenders and increase mortgage insurance from borrowers in order to guarantee loans when they go ahead and overhaul Fannie Mae and Freddie Mac – a move that could lead to increased borrowing costs.

The government is trying to boost competitiveness within mortgage markets, and at the same time reduce their expenses over the next ten years by $28 billion.

Currently, government-sponsored enterprises (GSEs) purchase mortgages before packaging them into securities which are sold on to investors. As part of the transaction, GSEs ask for a “guarantee fee”, and this is set to be increased next year.

Such an increase, says the Wall Street Journal, would result in borrowers seeing a modest increase in their monthly repayments. If guarantee fees are increased by just 0.1%, as has been proposed by the government, a $220,000 mortgage’s monthly payments would rise by about 15%.

In order to reduce the risk to taxpayers, Fannie Mae and Freddie Mac would likely ask borrowers to take out additional mortgage insurance, as GSEs have been federally-owned since 2008.

However, any changes would have to be introduced gradually, says Edward DeMarco of the Federal Housing Finance Agency, in order to avoid causing any more harm to fragile housing markets.

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Bank regulators to unveil "living will" plan

–Reuters

U.S. regulators are set to vote next week on a final rule governing the plans large banks must draft on how they can be liquidated if they are heading toward failure.

The 2010 Dodd-Frank financial oversight law requires these “living wills,” which are part of the government’s new power to seize and break up large, failing firms.

The Federal Deposit Insurance Corp announced plans on Thursday for its board to vote on the final rule on Tuesday. It is drafting the rule with the Federal Reserve.

Regulators have to approve the plans once banks submit them. They can force changes to the structure of banks or other large financial companies if they believe the institution could not easily be liquidated once in trouble.

Former FDIC Chairman Sheila Bair, who left her post in July, had stressed the need for regulators to force banks to simplify their operations, such as by creating more subsidiaries, if the plans could not be easily executed.

The rule applies to banks with more than $50 billion in assets and to other large financial companies whose sudden failure could roil financial markets.

Proponents of this new power to seize and liquidate firms argue it will curb taxpayer bailouts and limit the sort of market turmoil caused by the 2008 bankruptcy of Lehman Brothers.

But analysts and market participants have expressed skepticism, saying the government would not let a large bank fail out of fear it would wreak havoc on the economy.

The banking industry raised some concerns about the earlier proposed version of the living will rule, which was released in April.

Banks such as Wells Fargo have said regulators need to do more to ensure that the plans remain confidential and not subject to disclosure through lawsuits or Freedom of Information Act requests.

Banking groups have also asked regulators to start off with a pilot program rather than subject all eligible institutions to the requirement right away.

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11 credit report myths

–Bankrate.com

Most people have heard about the alligators in New York’s sewers and the little kid with cancer who wants a zillion postcards. Unfortunately, those aren’t the only myths floating around out there.

A lot of the things that people “know” about credit reports and credit scores have about as much validity as those monstrous Manhattan alligators.

Credit report myths

1. Paying my debts will make my credit report instantly pristine
2. Credit counseling always destroys my credit score
3. Canceling credit cards boosts my score
4. Too many inquiries hurt my score
5. Checking my own credit report harms my standing
6. FICO scores are locked in for six months
7. I don’t need to check my credit report if I pay my bills on time
8. All credit reports are the same
9. A divorce decree automatically severs joint accounts
10. Bad news comes off in seven years
11. I can always pay someone to fix or repair my credit

1. Paying my debts will make my credit report instantly pristine

A credit report is a history of your payments, not just a snapshot of where you are at the moment, says Maxine Sweet, vice president of public education for Experian, one of the three major credit reporting agencies. As the author of the popular Web column “Ask Max,” she reminds people that you can’t change the past.

2. Credit counseling always destroys my credit score

Attending a credit counselor’s debt management program is not considered negative in the scoring models.

“We don’t want consumers to consider credit counseling to be detrimental to their FICO scores,” says Craig Watts, public affairs manager at Fair Isaac Corp., the company that developed the FICO score.

However, if the credit counselor negotiates a lesser contractual obligation, the lender decides how it wants to report that. So if your $500 monthly payment is refigured for $300, the creditor may either legally report that as $200 in arrears every month or reward you for not filing bankruptcy by reporting the account as up to date.

“As long as the accounts are delinquent and not brought up to date, it will be viewed negatively by lenders,” says Deborah McNaughton, owner of Professional Credit Counselors and author of “The Get Out of Debt Kit.”

However, she says, “If everything is current, whether it’s a home loan or not, they’re not going to view it as negative. The FICO scores are not affected by it.”

The credit score system ignores any reference to credit counseling that may be in your file.

Although credit counseling does not by itself influence your credit score, it is apparent on the report that you’ve been through, or are currently in, counseling — and that is something individual lenders may not like. Or they might never know.

“If they looked manually at your credit report and saw that debts were being repaid through a debt management program, they probably wouldn’t open a new account for you,” Sweet says. Of course, “you shouldn’t be opening a new account if you’re in a debt management plan.”

However, most lenders these days will never see your actual report.

“They don’t look at reports manually anymore,” Sweet says. “Some small creditors might, but most of any size use automated scoring systems of one model or another.”

Once you’ve successfully emerged from credit counseling with your formerly tattered credit pieced back together, the history of consistent payments is what matters the most. “Even mortgage lenders will work with consumers who have successfully gone through debt management counseling and will work to get them a mortgage,” McNaughton says.

3. Canceling credit cards boosts my score

Open accounts spell available, potential debt, so better to close them, runs the legend. But experts agree that most creditors want to see at least two or three pieces of active credit to prove you can manage debt responsibly.

And, Watts chimes in, those unused cards lying in your jewelry box aren’t wreaking havoc with your score.

“The myth is that they look ominous to potential lenders,” he says. “Reality is that paying your bills on time and not being overextended is more important than having $5,000 worth of available credit on a card you’re not using. We continue to evaluate this ‘total credit limits’ statistic, and we simply don’t find it falling into one of those highly predictive areas.”

On the other hand, extremes never look good. Opening one charge account occasionally to take advantage of a 10 percent offer is negligible. Going wild and signing up for five during the holiday season probably would invite a decreased score, he says.

4. Too many inquiries hurt my score

Once upon a time, this statement was true. But get with the times — in this millennium, the credit agencies recognize a shopping mind-set when they see one. If a batch of mortgage or car loan inquiries arrives within 30 days, it doesn’t count at all, Watts says.

“Outside that 30-day period, if we locate a mortgage or car inquiry that occurred 180 days ago, and then see more mortgage- or auto-related hits in the accompanying 14-day window, we err on the consumer’s side and still assume she’s shopping for one item,” he says.

“We really feel like we are capturing the true consumer experience and not holding it against them for being an aggressive or smart rate shopper.”

Furthermore, there’s no such thing as some fixed number of points associated with these inquiries, Watts says.

“Inevitably, when a consumer or a lender evaluates a credit file, they think this item must be worth 20 points, this is worth 100 points,” he says. “In reality, we design the FICO scoring model so that each credit report item is given a reasonable or statistically valid number of points.”

In English, that means credit scores are designed to predict the likelihood that you’ll fall seriously behind in repaying one of your creditors within the next two years. Some things have predictive value and some don’t. Inquiries fall in the middle.

“They’re not incredibly predictive, so they’re in the model but they don’t drive the boat,” Watts says.

5. Checking my own credit report harms my standing

The reporting agencies distinguish between soft and hard pulls. When Target calls to check before issuing its line of credit, the agencies chalk that up as a hard pull and it counts against your score. Personal requests and credit counselors — if they do it correctly (insist on this as part of your agreement terms) — fall under soft pulls, which do not reflect negatively on the evaluation.

Using a company that promises credit reports as a perk can turn this myth into a self-fulfilling prophecy, however, McNaughton says.

Because they are merchants in disguise, their freebie costs you. Citizens must go directly to the three bureaus if they want a soft pull. Ditto FICO.

“Pulling your credit scores is quite empowering,” says Watts. “You have a choice: You can either be very aggressive with your credit management and pull your score with some regularity or take a more passive approach once a year to see how all those credit cards are actually doing.”

6. Credit scores are locked in for six months

Fair Isaac Corp.’s models are dynamic, meaning that your FICO score changes as soon as data on your credit report change.

“When we calculate a score, for all intents and purposes it then goes away and is recalculated the next time someone pulls your file,” says Watts.

7. I don’t need to check my credit report if I pay my bills on time

When the Consumer Federation of America and the National Credit Reporting Association analyzed credit scores in the summer of 2002, they discovered that 78 percent of the files were missing a revolving account in good standing, while 33 percent of files lacked a mortgage account that had never been late. Twenty-nine percent contained conflicting information on how many times the consumer had been 60 days late on payments.

“There can be a lot of other activity going on that you don’t have any clue about,” McNaughton says.

In her experience, 80 percent of all credit reports have erroneous information ranging from a wrong birth date to accounts you never applied for.

8. All credit reports are the same

Way wrong. These days, most creditors across the country do report their information to all three major agencies: Equifax, Experian and TransUnion.

But “that was not true in the past,” Sweet says.

And, because they are separate companies, the speed in which they update records isn’t necessarily equal.

Additionally, the agencies use inquiry activity to update your address, phone numbers, employment status and the like. Because creditors typically pull only one company’s report, it’s possible that, say, TransUnion doesn’t show your current address.

McNaughton says she’s never seen a client yet for whom all three reports spit out the same records and scores.

9. A divorce decree automatically severs joint accounts

The judge may have rubber-stamped your plans to divide credit card, car and house payments, but that carries absolutely no legal weight with the creditors themselves, Sweet says.

“We see so many people who, a year or two after the divorce, are just outraged and hurt because their credit report reflects their ex-spouse’s missed payments,” she says.

Unfortunately, at that point, they are helpless to erase the damage.

Divorcing parties must contact the creditors and either close current accounts or have the booted name sign a letter of consent for this action. And assuming certain debts isn’t a unilateral decision on your part, says Sweet. Creditors typically do a credit check on your name and if they don’t deem you financially stable enough to assume that $30,000 car loan, for instance, they won’t agree to remove the other person.

10. Bad news comes off in seven years

Some of it does. Chapter 13 (reorganization of debt) disappears seven years from the filing date. But if you filed Chapter 7 bankruptcy (exoneration of all debt), the window is 10 years from the filing date.

On the good-news side, accounts in bankruptcy can be deleted seven years after the date of your first missed payment, so those individual pieces may disappear before the word “bankruptcy” on your report. And if you pay off or close an account that had no delinquencies or problems, it, too, remains on the record for 10 years rather than the previous seven, say Experian experts. Again, this means positive information hangs around longer, which benefits consumers.

11. I can always pay someone to fix or repair my credit

Yes, you can clear up erroneous information posted to your account, such as a repossessed car that you didn’t purchase in the first place. But if you paid your Sears bill three months late in 2004, that’s a hard fact.

Companies claiming to fix your credit deliver on their promises by generating a flood of dispute letters to the credit reporting agencies, which in turn ask the creditor to verify or document the entry. If they cannot, the listing must come off at that time. But if the creditor later does verify or document it, the agency slaps it right back into the file after 30 days.

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20 Ways to Add Curb Appeal

–Better Homes and Gardens

If your home’s curb appeal makes a great first impression, everyone — including potential homebuyers — will want to see what’s inside. Check out these simple, low-cost improvements that you can do in a day, a week, or a month.

In a Day

Create perfect symmetry

Symmetry is not only pleasing to the eye, it’s also the simplest to arrange. Symmetrical compositions of light fixtures and front-door accents create welcoming entryways. This door is flanked by two sidelights. The black lantern-style sconces not only safely guide visitors to the door, but also coordinate with the black door and urns.

Replace old hardware

House numbers, the entry door lockset, a wall-mounted mailbox, and an overhead light fixture are all elements that can add style and interest to your home’s exterior. If they’re out of date or dingy, your home may not be conveying the aesthetic you think it is. These elements add the most appeal when they function collectively, rather than as mix-and-match pieces. Oiled-bronze finishes suit traditional homes, while brushed nickel suits more contemporary ones.

Dress up the front door

Your home’s front entry is the focal point of its curb appeal. Make a statement by giving your front door a blast of color with paint or by installing a custom wood door. Clean off any dirty spots around the knob, and use metal polish on the door fixtures. Your entry should also reflect the home’s interior, so choose a swag or a wreath that reflects your personal style.

Do a mailbox makeover

Mailboxes should complement the home and express the homeowner’s personality. When choosing a hanging drop box, pick a box that mirrors your home’s trimmings. Dress up posted boxes by staining or painting the wooden post to match the house’s trim and woodwork. Create structures for your box from materials found throughout the hardscaping. Warning: Consult a professional when designing and building structures.

Install outdoor lighting

Low-voltage landscape lighting makes a huge impact on your home’s curb appeal while also providing safety and security. Fixtures can add accent lighting to trees or the house or can illuminate a walking path. If you aren’t able to use lights that require wiring, install solar fixtures (but understand that their light levels are not as bright or as reliable).

Create an instant garden

Container gardens add a welcoming feel and colorful appeal to any home exterior — quickly and affordably. You can buy ready-made containers from garden centers or create your own with your favorite plants. For most landscapes, a staggered, asymmetrical arrangement works best to create a dynamic setting.

Install window boxes

Window boxes offer a fast, easy way to bring color and charm to your home exterior. Choose boxes made from copper or iron for a traditional look, or painted wood for a cottage feel. Mix and match flowers and plants to suit your lighting conditions and color scheme.

In A Weekend

Make a grand entry

Even with a small budget, there are ways to draw attention to your front door. Molding acts like an architectural eyeliner when applied to the sides and top of the doorway. Notice how the white door casing makes this door pop.

Add outdoor art

Give your yard a little spunk by adding weather-resistant artwork. Choose pieces that complement your home’s natural palette and exterior elements. Birdbaths, metal cutouts, sculptures, and wind chimes are good choices for outdoor art. Water sculptures not only function as yard art, but the burbling sounds soothe and make hot days feel cooler. Place fountains on level ground in optimum hearing and sight vantage points. Avoid spots in leaf-dropping range.

Add shutters or accent trim

Shutters and trim add a welcoming layer of beauty to your home’s exterior. Shutters also control light and ventilation, and provide additional security. Exterior shutters can be made of wood, aluminum, vinyl, composite, or fiberglass. New composite materials, such as PVC resins or polyurethane, make trim details durable and low maintenance.

Add arbors or fence panels

Arbors, garden gates, and short sections of decorative fence panels will enhance your garden and the value of your home. These amenities can be found in easy-to-build kits or prefab sections you simply connect together. For best results, paint or stain these items with colors already on your house.

Create a new planting bed

Add contrast and color to your home exterior with a new planting bed. Prime spots are at the front corners of the yard, along driveways or walkways, and immediately in front of the house. When creating a new bed, choose features that will frame your home rather than obscure it. Opt for stone or precast-concrete blocks to edge the bed. Include a mix of plant size, color, and texture for optimal results.

Replace gutters and downspouts

If your home has an older gutter system, odds are it’s also suffering from peeling paint, rust spots, or other problems that can convey a sense of neglect. Replace old systems with newer, snap-fit vinyl gutter systems that go together with few tools and require no painting. Copper systems, while pricier, convey an unmistakable look of quality.

In A Month

Tile your doorstep

Create a permanent welcome mat by tiling or painting a design that contrasts with the porch floor or front stoop. Not only will you not have to worry about replacing the mat when it gets ratty, but you can impress your visitors with your creativity.

Dress up the driveway

If your driveway is cracked or stained or has vegetation sprouting from it, you can upgrade it without doing a complete redo. First repair the cracks and stains (and kill the weeds), then dress it up by staining the concrete or affixing flagstones. If you need more room to move your car or park, add stone, brick, or pavers to the sides of the drive to widen it with flair.

Build a walkway

Well-designed walkways make your home feel warm and inviting. For a dramatic improvement to a straight concrete path, replace it with a contoured one made of stone or brick. For a less radical upgrade, apply a colored concrete resurfacer to the old walkway, then edge with brick or stone borders. Brick pavers offer traditional, classic beauty to the landscape of any home.

Upgrade railings

Porch and stoop railings can deteriorate quickly if not treated properly. If your railings are past their prime, look for quality wood or metal components to replace the existing material. As with other improvements attached directly to the house, make sure the color, scale, design, details, and material are compatible with the home’s main features.

Renew paint, siding, and trim

An exterior facelift (new paint, siding, or trim details) automatically transforms the look of a home. Periodic maintenance of that exterior surface is the surest way to keep your house looking its best. Any obvious defects, such as cracked or rotting material, can downgrade the aesthetic and quickly turn away potential homebuyers. Once defects are repaired, look for ways to add personality with color, trim, or shingles.

Apply stone veneer

Nothing carries pedigree and permanence like stone. It’s a great option for dressing up exterior features such as concrete foundations, column footings, and other masonry details. Natural and manufactured stone can be costly options for large expanses, but both are affordable and well suited for use as accent material..

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Fannie, Freddie refi market set to enter housing Twilight Zone

–Housingwire

U.S. residential mortgage lending volume will struggle to reach the mid-$800 billion range in 2012, according to market research, as the recent boom in refinancings dries up at Fannie Mae and Freddie Mac.

Furthermore, the report from iEmergent, paints a picture of a housing market floating in its own Twilight Zone — a reality where “the distribution and location of local lending opportunities will continue to re-shape and reset the long-term home financing prospects and projections for most U.S. communities.”

This year, roughly 838,400 Fannie and Freddie loans received a refinancing, according to data released by the Federal Housing Finance Agency.

In 2012, this market share is likely to dry up, according to the forecasting and advisory firm (click chart below).

Even more unfortunate, the other side of the mortgage origination — new home sales, is unable to fill the gap in business.

“Home affordability indicators have never been better, yet total buyer demand shows no signs of life,” the iEmergent report states.

The reason for this forecast, according to the analysis, is that housing is in its own dimension of economic recession.

The nation’s economy may be recovering, but in terms of housing, lack of jobs, lower income and continued high levels of negative equity, America’s property ladder is missing more than a few rungs.

“The middle-class buyers on whom future home buying demand depends will continue to struggle to re-build their cash reserves, pay down their debts, and grope their way out of the shadows,” the report states. “Their recovery will be very slow.”

But there is a silver lining to the forecast that Fannie Mae, Freddie Mac will see higher purchases, yet very low refinance volume in 2012 (click chart below).

In the total originations market, outside of the government sponsored enterprises, iEmergent projections indicate purchase home loan volume might actually rise 0.3%. However, through 2012, mortgage originations as a whole will see less business.

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Another Fannie servicing portfolio up for sale

–Housingwire

MountainView Servicing Group will help sell a $485 million servicing portfolio of Fannie Mae mortgages.

Nearly all of the loans in the portfolio are fixed rate and primarily located in Illinois. The average delinquency rate on the portfolio is 2.21%. Interest rates average 4.67%, and the average FICO score is 761. The portfolio also carries an average 30-basis-point servicing fee.

A spokesman for MountainView said the portfolio is being sold by a private mortgage bank but did not specify which one. Bids will be taken until Sept. 7.

So far in 2011, MountainView has helped sell more than $800 million in Fannie Mae servicing portfolios. In April, the firm began marketing a $262 million portfolio. It also sold a $110 million portfolio in January.

It is also marketing a $45 million portfolio of Ginnie Mae servicing rights. All of these loans are fixed rate with more than 78% of the mortgages located in California. The seller of these loans will be taking bids through Sept. 7 as well.

MountainView is a financial services firm specializing in asset management and valuation, among other services. It is also a subsidiary of MountainView Capital Holdings, a financial advisory firm to banks, thrifts and credit unions.

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