Estates By The Beach Blog

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Aug. 25, 2017

‘Boomerang buyers’ hit by recession are back in the housing market

Getting A Mortgage

VIA Spokesman By Tamara Lush (Associated Press)

TRINITY, Fla. – Tears still spring into Debbie Cooley-Guy’s eyes when she thinks about her dream home, with its wide, sweeping porch. It overlooked a bayou filled with wading birds, a glittering blue pool and the space for not only a 12-foot Christmas tree, but a grand piano as well.

She bought the home in a suburb west of Tampa for $637,000 in 2002. Seven years later, after the economy tanked, she sold it for less than she owed on her mortgage to avoid foreclosure. She recalls the black moment when she was still caring for the lawn but not living there. A falling branch knocked down an outdoor staircase railing.

“It made the house look so sad. I was so sad,” said Cooley-Guy, 60. “I drove away crying. I just didn’t think it was how the story would end with this house.”

On that dark January day, Cooley-Guy thought her home-owning days were over.

Just a few years later, she’s back in a new, smaller home, one of America’s growing ranks of “boomerang buyers.”

Seven years after the real estate bust, many who lost their homes have rebuilt their credit and are back in the market. Experts say these boomerang buyers will be an important segment of the real estate market in the coming years.

About 700,000 of the 7.3 million homeowners who went through foreclosure or short sales like Cooley-Guy’s during the bust have the potential to get a mortgage again this year, said Daren Blomquist, vice president of Realty Trac. That compares to the 3 million people overall who got a mortgage between October 2013 and September 2014.

A recent increase in loans from the Federal Housing Authority also shows first-time homebuyers and boomerang buyers are helping drive the market, Blomquist said.

It generally takes seven years for a foreclosure to drop off a credit report. Short sales take less time, generally three or four years.

John Councilman, president of the Association of Mortgage Professionals, said a swath of people with past credit problems are seeking mortgages, not only foreclosures or short sales. “We have a lot of people with issues and many are coming back into the market.”

That describes Cooley-Guy. As a mortgage loan originator herself, she should have known the pitfalls, but she said she was caught up in the boom.

“I used to look at people like me and think, ‘How did you let this happen?’ ” she said. “In hindsight, I had set myself up so well. Just because you can afford things, it doesn’t mean you should buy them.”

The boom was good to her. By 2002, she was making $250,000 a year and her husband made another $150,000. She had two vacation homes, $100,000 in a retirement account and $60,000 in cash savings.

She qualified for a mortgage for the 3,500-square-foot Key West style home with just her income. During the closing, she handed over a $120,000 check.

In hindsight, there were signs her business, and the entire Florida real estate industry, were built on quicksand. Poorly paid waitresses were getting loans for investment properties. Realtors were buying six pre-construction properties at once. People were buying million-dollar homes just to flip for a profit.

“I bought into the whole thing that my customers did,” she said.

In October 2005, she first noticed something was wrong.

“There was a real silence in the real estate office,” she recalled. “The Realtors were like, ‘What’s going on? This is quiet.’ I got nervous.”

But in 2006, Cooley-Guy took the biggest risk of all: she started her own loan origination company, taking out a $100,000 line of credit against her dream home, which had been reappraised at $1.2 million.

In 2008, her income dipped to $150,000. The next year she made $38,000. Her husband’s trucking company folded. They cashed in the retirement fund, spent the savings and started living off credit cards.

Cooley-Guy agreed to a short sale for $598,000, which covered her first mortgage. The bank forgave all but $40,000 of her $100,000 second mortgage, but she’s still making payments.

She and her husband rented a home. She slowly started paying bills, settling with credit card companies until she had absolved her $60,000 debt.

As the economy improved, so did Cooley-Guy’s income. She underwrote loans and soon nearly half her business was with people back after past problems with mortgages. People like her.

Cooley-Guy had socked away some money and was yearning to buy again. This time, she and her husband found a $225,000, three-bedroom, two-bath in Pasco County, some 20 miles inland from her dream home. Because she had repaired her credit, she qualified for an FHA loan and in April 2014, bought again.

The 2,000-square-foot home with mint green trim is smaller than her old house. But there are high ceilings, space for her Mexican and Indonesian-themed art, a small pool. The back patio overlooks a canal with wading birds.

But the home represents more than stucco and beams. The whole ordeal changed Cooley-Guy.

“I’ve learned to be so much of a better listener,” she said. When prospective clients come in with records of foreclosures and short sales, she empathizes. She tells them her story and encourages them.

A new beginning is possible, she tells them.

Posted in Mortgage
Aug. 25, 2017

7 Things Every Homeowner Should Do Once a Year

Home Restored


When you bought your house, there were a million things you needed to do. Then real life set in, and those driveway pavers you always meant to replace are still staring you in the face. Stay on top of your home maintenance to-dos by making sure you tackle each of the following once a year.

Clean your gutters. Old Frisbees. Dead leaves. Dead rodents. Nasty stuff can accumulate in your gutters, and keeping them clear is important for getting rain off that fancy new roof you just replaced. Here’s the best part: If you get them cleaned right now, you won’t have to think about them again for another year.

Steam clean your carpets. Yes, you’re a hygienic person who generally doesn’t track gross stuff into your house. But over time, buildup has a way of accumulating ? especially in wet or dusty regions, or if you’ve got children or pets. Rent a steamer (or hire a professional), and relish in a pile that’s as plush and vibrant as the day you bought it.

Wash your windows… like, for real. Again, you’re probably already Windex-ing the inside of those suckers on a weekly or monthly basis. But the outsides need love, too. Most modern windows pivot inward, so you can wash the whole thing from inside your house. But if you live in an older building and can’t get to windows on the second or third floor, hire someone with a squeegee and a ladder.

Empty all your drawers. OK, this one isn’t just for home owners. Everyone should really be in the habit of emptying and assessing every drawer one time per calendar year. Tackle it room-by-room, taking everything out, deciding if you really need it, then purging accordingly before neatly repacking.

Trim your trees. Next-door neighbor Frank hates when your sycamore cascades over his tool shed. Trim that puppy once a year for the health of your tree (a heavy bough is never a good thing) and, of course, your neighborly relations.

Schedule the exterminator. If you think you only need to talk to Larry the Roach Guy when you’ve actually got creepy crawlers, think again. Getting your house checked and treated preemptively for bugs gives you a much better chance of not finding something disgusting (or paying thousands of dollars for termite damage) down the road.

Check out an open house in the neighborhood. Even if you plan to live in your home until they take you out on a stretcher, it’s always a good idea to get a sense of the market. Plus, aren’t you dying to know what Kenny and Margaret did with that hideous wood-paneled rec room?

Adapted from a blog by PureWow on HuffingtonPost.

Posted in Tips and Advice
Aug. 10, 2017

Orange County’s housing bubble, 10 years later

VIA: OCREGISTER  BY: Johnathan Lansner 

Too much debt and too many layoffs pushed too many homeowners to the financial brink during the Great Recession. Owners rushed to sell and with bankers hitting the market with their repossessed properties. In June 2007, 13 percent of homes sales were either short sales -- banks agreeing to take less than owed -- or sales of foreclosed properties

I’m not sure anyone popped any bubbly to remember the 10th anniversary of one particular peak of the housing bubble.

In June 2007, Orange County median home selling price hit $645,000 — a high point near the end of that era’s crazy, risky lending and homebuying insanity. In less than two years, a violent downturn slashed the typical local home’s value almost in half.

Last year, that old peak was topped and this year’s continued run-up pushed the median to $695,000 in June, an 8 percent rise above the previous record set 10 years ago.

But other than this historic milestone, does beating the old pinnacle mean the market has fully recovered? Or ominously speaking, is it a signal that pricing once again has suspect fundamentals?

My review of Orange County housing conditions now and a decade ago from several data sources — CoreLogic, ReportsOnHousing, California Association of Realtors, National Association of Home Builders, PropertyRadar, state employment records and Freddie Mac — shows far different market conditions today vs. 2007.

THE NUMBERS: Your ZIP vs bubble

Yes, the countywide median home price is $50,000 higher than the previous peak. But not every benchmark, market niche or neighborhood has enjoyed the same rebound. And the mere fact that a widely watched broad metric of pricing has exceeded the peak of 2007 doesn’t signal a similar fate for property owners in this cycle.

So 10 years later, here are a dozen reasons why local housing isn’t as crazy today as it was then.

1. Geography: At the neighborhood level, prices in June were above June 2007 levels in only 55 of 83 Orange County ZIP codes. That’s  no full recovery in roughly one-third of the market. Communities still below June 2007 include a diverse slice of Orange County: parts of Anaheim, Costa Mesa, Dana Point, Fullerton, Garden Grove, Irvine, La Habra, La Palma, Lake Forest, Ladera Ranch, Laguna Beach, Newport Beach, Orange/Villa Park, San Clemente, Santa Ana and Seal Beach.

2. House size: Smaller, existing homes also have yet to fully recover. A decade later, the median selling price of homes less than 1,000 square feet is off 3 percent from June 2007. Houses from 1,000 to 1,500 square feet? Off 1 percent. Bigger house prices are back above June 2007, with the mid-range property — 1,500-to-2,000 square feet — leading the way with a 5 percent gain.

3. Cheaper homes: While the median of 2007 and of this year are relatively the same, the composition of what buyers paid is not. Remember, the median is the mid-point of all homes sold. But it says nothing about the mix above and below. This year, Orange County homes priced below $600,000 made up 34 percent of all sales vs. 41 percent in June 2007. (Conversely, above $700,000: 50 percent now, 43 percent then!) This reflects today’s shortage of lower-priced options and confirms the notion that the lower-end of the market hasn’t fully recovered.

4. Mortgage payments: The check sent to the lender has shrunk. The typical Orange County homebuyer who financed their deal had an estimated monthly house payment of $3,245 in June. That’s $168 a month less — or 5 percent — than in June 2007. You can thank cheaper mortgage rates for much of that improvement as the average 30-year, fixed-rate loan has fallen to 3.9 percent from 6.7 percent in 10 years. And note that 18 percent of buyers a decade ago were all-cash vs. 31 percent in June 2017.

5. Adjustable-rate borrowing: In case you forgot, one thing that boosted home prices a decade ago was risky loans made to borrowers with limited ability to pay. One example was scores of house hunters using variable-rate financing. In June 2007, 54 percent of Orange County buyers who financed used adjustable-rate mortgages. In June 2017? Only 18 percent. The past cycle’s aggressive financing was key to vast overpricing of lower-priced homes. Why? Less-wealthy house hunters needed lenient loan qualifications to qualify.

6. Affordability: Yes, it’s hard for a typical household to pay for an Orange County home today. It was worse in 2007. Look at it from two metrics: 21 percent of Orange County household could comfortably buy this spring vs. only 12 percent in 2007. Or, 14 percent of local homes were deemed “affordable” this year vs. 4.4 percent a decade ago. Remember, in a decade, mortgage rates are 2.8 percentage points lower and local median household incomes are 12 percent higher!

7. Volume: Nothing signals a shaky market more than rising prices and falling sales activity. The bubble era’s sales peak was in 2005, and by the price peak in 2007, buying had pulled back by roughly half as lenders pared risk-taking and Orange County job growth stalled. After the recession ended, a local hiring spree re-energized house hunters, so much so June 2017’s home sales were 44 percent above June 2007. Note: Current buying pace is still 30 percent slower than 2005’s sales top.

8. Supply: At the bubble’s peak, the market was flooded with motivated sellers. At the end of June 2007, there were 17,250 existing residences listed for sale in broker networks. That’s almost triple the 5,936 available today. Of the last peak’s huge supply, 11,298 residences were priced under $750,000, or nearly five times the 2,304 on the market at the end of June 2017. Due to that rush of low-end sellers, average listing price was $900,000 a decade ago vs. $1.6 million in 2017. And the bloated inventory made selling difficult: ReportsOnHousing’s estimated in took nine months to sell a home in June 2007 vs. two months today!

9. Inflation: It was a sharp ride down from the bubble and swift bounce back in recovery. But the net results, prices going from peak to modestly higher and a new peak, look slim when pondering a decade’s time — and doesn’t include the impact of inflation on finances. If the Orange County median price had simply appreciated at the national rate of inflation since 2007, the median would have to top $758,000 to be at a new, inflation-adjusted record. So you could argue the broad market is still behind the economic curve.

10. Distressed property: Too much debt and too many layoffs pushed many homeowners to the financial brink. Owners rushed to sell as bankers hit the market with their repossessed properties. In June 2007, 13 percent of homes sales were either short sales — banks agreeing to take less than owed — or sales of foreclosed properties. That distressed share of selling would become roughly half of the market during the next five years. But by June 2017, that share settled back to just 7 percent. Fortunately, it’s only a history lesson today. The supply of foreclosures to buy has shrunk from 463 in late June a decade ago to only 27 as this year’s summer began.

11: Warning signs: Nothing screams “danger” more than owners skipping house payments. Ponder what lenders were doing in June 2007 vs. this past June. Default notices, a first step in foreclosure: 1,144 then, 310 today. Auction notices, the official threat to sell: 598 then, 213 today. Actual foreclosures: 281 then (and 1,084 in June 2008) vs. 21 today.

12. Jobs. Jobs. Jobs. Finally, no real estate analysis is complete without looking at employment trends. In May 2007, as the bubble was brewing, the Orange County job count fell on a year-over-year basis for the first time since 2002. Employment would fall for the next 38 consecutive months as the bubble burst into the Great Recession. Since August 2010, though, local employment has been up in 83 consecutive months. Yes, the recent hiring pace is as slow as it has been since the early days of the recovery … but even more workers means more potential house hunters.


Posted in Real Estate
July 25, 2017

Consumers grow more confident in future of economy

USA Economy

VIA BY Kelsey Ramírez

Consumers’ assessment of their current conditions remained at a 16-year high even as their confidence in the future edged higher, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.

The Consumer Confidence Index increased to 121.1 in July up from 117.3 in June. The Present Situation Index increased from 143.9 last month to 147.8 in July and the Expectations Index increased to 103.3, up from 99.6 last month.

In 1985, the index was set to 100, representing the index's benchmark. This value is adjusted monthly based on results of a household survey of consumers' opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, while expectations of future conditions make up 60%.

“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, The Conference Board director of economic indicators. “Consumers’ assessment of current conditions remained at a 16-year high, July 2001, 151.3, and their expectations for the short-term outlook improved somewhat after cooling last month.”

“Overall, consumers foresee the current economic expansion continuing well into the second half of this year,” Franco said.

Consumers’ assessment of their current conditions improved in July as those saying business conditions are good increased from 30.6% to 33.3%. Those who said business conditions are bad remained unchanged at 13.5%. Consumers also held a more favorable view of the labor market, as those saying jobs are plentiful increased from 32% to 34.1% while those saying jobs are hard to get decreased from 18.4% to 18%.

Americans also held a more optimistic short-term outlooks in July as the percentage of consumers expecting business conditions to improve over the next six months increased from 20.1% to 22.9%. Those who expect business conditions to worsen dropped from 10% to 8.2%.

The portion of consumers expecting more jobs in the months ahead remained unchanged at 19.2%, but those anticipating fewer jobs decreased from 14.6% to 13.3%. However, consumers were not as optimistic about their income prospects. The percentage of consumers expecting an improvement in their income dropped from 20.9% to 20%, while those expecting a decline increased from 9.3% to 10%.

Other reports also show a boost in confidence, not only in the economy, but also in the housing sector. More Americans than ever say now is a good time to sell their home, according to the Fannie Mae Home Purchase Sentiment index.

However, that optimism may not hold up as home prices continue to increase. A new report from Arch MI shows affordability will only continue to worsen into next year.

Posted in Finance
July 13, 2017

The Twelve Laws Of Karma

 Wold Smiles With You

VIA: Learning Mind

Did you know that the laws of karma influence your life in many ways?

The law of karma says that every action causes a reaction. However, because of the complicated nature of the universe, it is impossible to predict what that reaction might be. It is like the Butterfly Effect, the scientific theory that when a butterfly flaps its wings the action can, in the end, influence the weather on the other side of the world.

Although we cannot predict the reactions of Karma, we can influence how Karma acts in our lives. Any action has a certain energetic vibration and karma will react with the same vibration. For this reason, it is important to understand the potential consequences of our actions so that we don’t invite negative reactions.

If our actions are harmonious, compassionate and loving, the karmic reaction will cause these kinds of energies to come back to us. However, if our actions cause harm, exploitation fear or hatred, we can expect karma to respond in kind.

Karma is often misunderstood as a kind of God who deals out punishment for misdeeds in this life or the next. This is completely untrue. Karma is not this personal. It is more of a state of nature like magnetism. Like attracts like. But like the butterfly effect, karma works on a huge scale. For this reason, giving away money will not necessarily result in receiving money, especially as it depends on the energy behind the gift. If money is offered for the selfish reason of desiring to receive, then the karmic energy being sent out is actually selfishness, and it is on that level that the karmic energy will return.

Our intentions and actions are not meaningless, but every single one influences the world in some way. This is important because it changes the way we do things. For example, if we want to bring peace to the world, we might think we need to argue our point and make others agree with us or even fight for what we believe in. The laws of karma suggest that actually if we want to see more peace in the world, the best way to bring this about is by acting peacefully ourselves.

The twelve laws of karma can guide us to achieve the life that we desire:

1. The law of cause and effect

This is probably the main and the most well-known of the laws of karma. In essence, it says that whatever we put out into the universe comes back to us. So if we want peace, joy and love we need to give out peace, joy and love.

2. The law of creation

Life requires our active participation. To get the life we want, we have to actively create it rather than just waiting for it to happen. Begin to take actions in small ways to achieve the life you want and these actions will return magnified.

3. The law of humility

To grow, we must accept what is, rather than arguing that is shouldn’t be. When we judge others, we judge ourselves. To reach a higher state, we have to stop judging and accept life, while still taking action to make the world a better place.

4. The law of growth

The only way to change the world is to change ourselves. We should not attempt to control the behavior of others. When we change who and what we are within our heart our life begins to change too.

5. The law of responsibility

We must accept responsibility for our actions. When something is wrong we should look at ourselves rather than try to blame others. What surrounds us is just a mirror of ourselves. To change the outside world we must accept responsibility for what we have created and change ourselves for the better in order to see that change reflected in the world around us.

6. The law of connection

Every action we take contributes to the whole. Therefore, actions are neither big nor small as all actions influence the whole.

7. The law of focus

You cannot think of two things at the same time. When our focus is on higher values, it is impossible for us to have lower thoughts such as greed or anger.

8. The law of giving

You must live by the values that you hold dear. It is not enough to talk about patience, love, and harmony while acting from impatience, hatred or fear.

9. The law of here and now

If we live in the past or the future, we are unable to take action in the only moment that action can be taken, which is NOW.

10. The law of change

History repeats itself until we learn the lessons that we need to change our path in life. In order to move forward, we must accept the past and learn its lessons. Only then can we move forward.

11. The law of patience and reward

We must consistently take action towards creating the life that we want and the world that we hope for. Rewards may not come instantly, but we must not give up. In the end, doing work that is meaningful to us and that we love is its own reward.

12. The law of significance and inspiration

You get back from something whatever you have put into it. The true value of something is a direct result of the energy and intent that is put into it.

If we follow these laws of karma, we can be assured that our contribution to the world will be a positive one. We will also reap the rewards of peace, love and happiness in our own lives.


H/T: India Times



Posted in Life Style
July 11, 2017

Four Things You Need To Do If Your Facebook Account Gets Hacked

Computer Security


If you are the unfortunate victim of a “Facecrook”, and your Facebook account gets hacked, there are several steps you can take

to reclaim your account and your get your Facebook life back in order.

1. Attempt to Reclaim your Account - If your account has been hacked, your best bet is to visit the Facebook Help Center and attempt to reclaim your account. For more information about keeping your account secure, visit this Facebook Faq.

2. Change your Passwords – The hacker obviously gained access to your email address and password somehow, so you need to make sure you change the password to your email address immediately. If you use the same password to access other accounts, especially banking, financial institutions, and other email addresses, etc., then make sure to change those passwords immediately as well. Assume the hacker gained complete access to the email account you use to access Facebook. Carefully assess the impact of the compromise and try to do as much damage control as possible. If you need more information on creating a secure password, then see our guide: The Top Ten Commandments of Password Protection.

3. Scan your Computer  - It is possible that the hacker gained entry to your computer through a virus or other malware. Make sure you have a current and up-to-date anit-virus program installed on your computer, and do a thorough scan of your system. If you accessed your Facebook account from another computer, then let the owner of that computer know of the attack. They will need to scan their machine as well. It is also a good idea to check your Facebook Account for Rogue Applications and Rogue Browser Extensions and remove anything suspicious. If you find and remove any questionable Facebook apps or extensions, then change your Facebook password AGAIN.

4. Notify your Friends & Family – Getting hacked can be an embarrassing and humiliating experience, but don’t let this discourage you from notifying your friends and family of the incident. The hacker may use your account to send them malicious links and to phish for their personal information as well. By alerting them immediately, you can help them avoid the same situation you have found yourself in.

Lastly, take a deep breath and try not to panic! It may take a little bit of time and effort to correct the situation, but quick action on your part can help to minimize the damage caused by the incident and help get things back to normal.

As precautionary measures, we recommend setting up your ‘Trusted Contacts.’This will allow Facebook friends you have preselected to assist you in reclaiming a hacked account. It is also a good idea to enable “Login Approvals” on your account. This is Facebook’s two-factor authentication feature.

Posted in Life Style
July 10, 2017

Two major changes make getting a mortgage easier


VIA: HousingWire  BY: Kelsey Ramírez 

During May, two major changes will allow millions of new borrowers to enter the housing market.

The first change to take effect this month is the nation’s three major credit rating agencies – Equifax, TransUnion and Experian – will drop tax liens and civil judgements from consumers’ profiles if the information isn’t complete, according to an article by Diana Olick for CNBC.

Roughly 12 million U.S. consumers, or about 6% of the total U.S. population that has FICO credit scores, will see increases in those scores as a result of this change.

From the article:

"It's a significant impact for still a very large number of people," said Thomas Brown, senior vice president of financial services at LexisNexis, who is concerned that the move will add significant risk to the mortgage system.

"If you look at someone that has a tax lien or a civil judgment, they can be anywhere from two to more than five times more risky just because of the presence of that information," he said. "That's very, very significant."

The GSEs are also making major changes in the market. Recently, Fannie Mae raised its debt-to-income level in order to further expand mortgage lending.

From the article:

In addition to the FICO changes, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent. That is designed to help those with high levels of student debt. That means consumers could be saddled with even more debt, heightening the risk of default, but the argument for it appears to be that risk in the market now is unnecessarily low.

Source: CNBC


Posted in Mortgage
May 26, 2017

Freddie Mac: Mortgage rates now sit at lowest level in 2017

Freddie Mac Rates as of 5/25

VIA HousingWire.Com BY: Brena Swanson

30-year mortgage rate falls below 4%

As forecasted, mortgage rates continued to drop in the latest Freddie Mac Primary Mortgage Market Survey. And not only did rates drop, but they now sit at their lowest mark of the year.

Last week, mortgage rates fell slightly, but remained above the 4% mark. Freddie Mac Chief Economist Sean Becketti said at the time, “The 30-year mortgage rate fell three basis points this week to 4.02%. However, this week’s survey closed prior to Wednesday’s flight to quality.”

The latest survey results showed that the 30-year fixed-rate mortgage averaged 3.95% for the week ending May 25, 2017. This is down from last week when it averaged 4.02%, but up from 3.64% a year ago. 

The 15-year FRM averaged 3.19%, down from last week when it averaged 3.27%. In 2016, the 15-year FRM averaged 2.89%. 

In addition, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.07% this week, falling from last week’s 3.13%. A year ago at this time, the 5-year ARM averaged 2.87%.

“As we predicted, the 30-year mortgage rate fell seven basis points this week in a delayed reaction to last week’s sharp drop in Treasury yields. The survey rate stands at 3.95% today, a new low for the year,” said Becketti about this week’s rates.

Posted in Mortgage
May 25, 2017

This Regulatory Change Means a Credit Score Boost for 12 Million Americans

Credit Being Given

VIA The Motley Fool BY Sean Williams

Whether you realize it or not, your credit score and credit report will play an important role in your life -- and I'm not just talking about your ability to get a home loan or open a new credit card. Though most Americans probably associate their credit scores with buying a home, their credit report can have so much more bearing than they realize.

Your credit report is a gateway to opportunity (or peril)

For example, your credit report can be a puzzle piece that determines whether you get the apartment or house you want to rent or the job of your dreams. It's commonplace for landlords to request a peek at your credit report. If they see any accounts sent to collections, repossessions, or a history of late payments, you could be denied an apartment or house to rent.

Likewise, employers may request a look at a prospective employee's credit report to size up your character. If you have few black marks on your credit report, it could demonstrate to an employer that you're responsible. If you have multiple issues, it may be a red flag.

The same can be said for insurance companies and utility accounts. Insurers have found through statistical studies that consumers with poor credit are costlier than those with excellent credit, therefore people with bad credit tend to be charged higher premiums. Utilities, such as for water and electricity, can't deny service to a customer because of their credit history, but they can request a hefty deposit before starting service if your credit report is filled with black marks.

Traditionally, FICO scores are the most popular credit score measure. Ranging from a low of 300 to a high of 850, the higher your score, the more leverage you'll have when negotiating for a loan. Push your credit score into excellent territory (750 and higher) and you'll potentially even have lenders fighting for your business.

This regulatory change means a credit score boost for millions of Americans

According to data from FICO, which was aggregated by Bankrate, the average credit score across America hit an all-time high of 699 in April 2016. The approximate range of a "good" credit score is 700 to 749, putting Americans on the precipice of hitting the "good" credit score mark of 700 for the first time ever.  

However, a change in regulations expected to take effect around the beginning of July at the three credit reporting bureaus -- Equifax, TransUnion, and Experian -- will likely push the average American's credit score north of 700 .

According to the Consumer Data Industry Association, which represents the aforementioned credit reporting bureaus, most tax liens and civil judgments (e.g., a creditor taking a borrower to court over an unpaid debt) will be removed from people's credit scores by roughly July 1. In order for a tax lien or civil judgment to remain on a credit report, it would have to list three data points: a person's name, their address, and either their Social Security number or date of birth. It's uncommon that tax liens or civil judgments contain all three or four of these data points, meaning an expected 12 million people will see these negatives removed from their credit reports. As a result, just under 11 million Americans are expected to see up to a 20-point improvement in their credit score, while around 700,000 Americans could see a 20-to-40-point improvement in their FICO score.

Why make the move now, you wonder? It just so happens that the Consumer Financial Protection Bureau released a report earlier this month highlighting a number of shortcomings at the three credit reporting bureaus. One of those deficiencies was a need to improve standards for public-records data by using improved identity-matching criteria.

Long story short, millions of Americans could appear considerably more creditworthy to lenders in the second half of 2017.

Three key credit score takeaways

This regulatory change is great news for about 12 million people, but it also brings a few important credit score points into greater focus.

First, given the number of changes that could be ongoing at the credit reporting bureaus in the weeks and months to come, it's important that you stay on top of your personal credit report and examine it for errors at least once annually. A 2013 Federal Trade Commission study found that one in five people have an error on their credit reports, which can drag down your score, hurt your ability to get a loan, and possibly increase your loan costs via higher interest rates and fees. You can view your credit report from all three bureaus for free once annually at Being proactive now can save a lot of hassle later.

Second, don't forget the basics of what FICO is looking for when calculating your credit score. Sure, 12 million Americans are set to receive the gift of a credit boost, but that still doesn't beat the basics that really dictate your FICO score. Though FICO keeps its precise formula a closely guarded secret, here are the five factors that matter, along with their relative weighting in determining your credit score:

  • Payment history (35%)
  • Credit utilization (30%)
  • Length of credit history (15%)
  • New credit accounts (10%)
  • Credit mix (10%)

As you can see, just paying your accounts on time and keeping your total credit utilization under 30% account for a combined 65% of your credit score. Beyond that, keeping good-standing accounts open for a long time, restraining yourself from opening too many new accounts, and proving your ability to handle both installment and revolving accounts make up the remaining 35%.

Finally (and this is for you investors out there), be mindful that this sudden increase in credit scores doesn't mean that consumers' credit habits have improved one iota. Consumers' credit habits are unlikely to change between today and July 1, meaning lenders could find themselves at a higher risk of loan defaults as these tax liens and civil judgments are removed from people's credit reports.

5 Simple Tips to Skyrocket Your Credit Score Over 800!

Increasing your credit score above 800 will put you in rare company. So rare that only 1 in 9 Americans can claim they’re members of this elite club. But contrary to popular belief, racking up a high credit score is a lot easier than you may have imagined following 5 simple, disciplined strategies. You’ll find a full rundown of each inside our FREE credit score guide. It’s time to put your financial future first and secure a lifetime of savings by increasing your credit score. Simply click here to claim a copy 5 Simple Tips to Skyrocket Your Credit Score over 800.


Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Posted in Finance
May 24, 2017

Scented laundry products release carcinogens, study finds

Washing machine_Legs

VIA CBS News BY Ryan Jaslow

(CBS) Scented laundry detergent and dryer sheets make laundry smell great - but do they cause cancer?

A small study suggests scented laundry items contain carcinogens that waft through vents, potentially raising cancer risk.

"This is an interesting source of pollution because emissions from dryer vents are essentially unregulated," said lead author Dr. Anne Steinemann, professor of civil and environmental engineering and of public affairs at the University of Washington, said in a written statement. "If they're coming out of a smokestack or tail pipe, they're regulated, but if they're coming out of a dryer vent, they're not."

Previous studies have looked at what chemicals are released by laundry products, since manufacturers don't have to disclose ingredients used in fragrances or laundry products.

Needless to say, these researchers weren't thrilled with what they found.

For the study - published in the August issue of Air Quality, Atmosphere and Health - researchers enlisted two homeowners to volunteer their washers and dryers, which the team scrubbed clean beforehand. The researchers ran a regular laundry cycle for three scenarios in each home: once without any detergent, once with a scented liquid laundry detergent, and the last with both scented detergent and a leading brand of scented dryer sheets.

Their analysis found more than 25 "volatile" air pollutants - including the carcinogens acetaldehyde and benzene.

Benzene causes leukemia and other blood cancers, according to the American Cancer Society. Acetaldehyde has been shown to cause nasal and throat cancer in animal studies.

Steinemann thinks agencies focus too much on limiting other pollution sources when they should look closer to home.

"We focus a lot of attention on how to reduce emissions of pollutants from automobiles," she said. "And here's one source of pollutants that could be reduced."

The American Cleaning Institute, however, Steinemann's study, calling the findings "shoddy science" that didn't take into account many factors like washing machine brands, different load cycles, and non-scented products.

"Consumers should not be swayed by the sensationalist headlines that may come across the Internet related to this so-called research," the Institute emailed CBS News.

Posted in Health