Posts Tagged Insurance

More on the Free Credit Score Amendment

Posted by Tetyana Matychak in Banks on May 28th, 2010

The Senate approved an amendment to the financial regulatory bill that would provide free credit scores to some consumers in some circumstances.

Here’s how it would work if it survives the reconciliation process with the bill from the House and President Obama signs it, according to staff members from the office of Senator Mark Udall, Democrat of Colorado, who introduced the amendment:

When any lender or insurance company rejects your loan application or gives you a worse rate or quote than it might have because of information in your credit report (or if an employer refuses to hire you based on that information), the lender must then give you a copy of the credit score that it used in its decision making. That would presumably be a FICO score, which is what most lenders use.

So, memo to cynics like me: The big credit bureaus (Equifax, Experian and TransUnion) would not be involved in distributing the free scores and thus won’t have an opportunity to pass off their proprietary or educational scores as real FICO scores. If you didn’t get a decent loan or a job because of your credit, you’ll get the actual FICO or other score that was used to judge you. Read the rest of this entry »

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The Skinny on Buying Disability Insurance

Posted by Tetyana Matychak in Budget on March 3rd, 2010

Disability-insurance benefits from the workplace and the government are getting harder to come by—and that’s putting more pressure on consumers to purchase their own coverage in case a medical condition keeps them from working.

But disability insurance can be confusing. Policies may include conditions that make it tough for people filing claims to actually qualify for the benefits. And some policies may limit payouts for certain diagnoses, particularly mental illness. To protect themselves, consumers considering buying disability coverage need to read the fine print.

The percentage of companies that paid all or part of the cost of workers’ private long-term disability insurance fell to 48% last year, from 59% in 2002, according to LIMRA, an association of financial-services and insurance companies. Many employers are “taking a step back in terms of what they pay and putting the onus on employees” to purchase richer benefits if they choose, says Michael Bailey, a principal at Mercer, a consulting unit of Marsh & McLennan Cos.

At the same time, disability claims are pouring in to the Social Security Administration, and that’s resulting in bigger backlogs. The agency expects claims to jump to 3.3 million in the current fiscal year, ending Sept. 30, from 2.6 million two years earlier. That’s led to a greater number of cases pending—about 794,000 this month, up from about 557,000 in late 2008. Read the rest of this entry »

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New and improved mortgage forms

Posted by Tetyana Matychak in Banks on January 7th, 2010

Starting Jan. 1, new rules go into effect that simplify and clarify exactly what mortgage lenders will charge for a loan.

The initiative from the Department of Housing and Urban Development (HUD)requires that a new “Good Faith Estimate” form be given to all applicants, one that makes it easier to compare true costs of loans from different lenders.

“The main purpose is to give consumers the tools to be able to compare apples to apples,” said Robert Grosser of Luxury Mortgage, a New Jersey-based direct lender. “All lenders must use a specific form and disclose fees in the same spots on the same forms.” (See the new form.)

Until now, borrowers might have focused on interest rates or monthly payments to compare mortgages options. But fees play a big part in total cost, said Vicki Bott, HUD’s Deputy Assistant Secretary for Single Family Programs.

There are generally two blocs of fees. Read the rest of this entry »

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‘Cash for clunkers’ program gains speed

Posted by Tetyana Matychak in Budget on July 27th, 2009

Customers and auto dealers have moved rapidly to take advantage of the “cash for clunkers” program that’s designed to entice motorists into more fuel-efficient vehicles.

The Car Allowance Rebate System program was signed into law in June, but details weren’t finalized until Thursday.

Dealers were allowed to register with the National Highway Traffic Safety Administration to participate beginning Friday morning.

Some began touting the much-discussed program weeks ago, and customers quickly responded. Crater Lake Ford sales manager Mike Frame said the dealership already had deposits for some purchases prior to Friday and another 50 customers had indicated they were ready to buy.

“It’s good for dealers and sparked interest from people who may not qualify,” Frame said.

“We expect to be extremely busy for the next week to 10 days.”

The government estimates the $1 billion program will generate sales of 250,000 vehicles at the nation’s 19,700 new-car dealers. If the anticipated sales were spread evenly among all the dealerships, it would amount to about 12 cars per dealer. Read the rest of this entry »

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Are You Saving Too Much for Retirement?

Posted by Tetyana Matychak in Investing on April 24th, 2009

A new free online tool performs some extremely complex calculations to make financial planning simpler for small investors.

ESPlannerBasic, set to be officially launched later this week, takes a different approach than many competing online tools. Rather than calculating your odds of meeting your spending goals in retirement, the tool is intended to help you maintain a stable standard of living throughout your life. It’s available at www.esplanner.com/basic.

Many retirement-planning calculators ask people to estimate their own spending needs in retirement, a feat that Laurence Kotlikoff, the Boston University economics professor who developed the tool, says is nearly impossible. “It’s like asking them to make their own penicillin,” he says, “when we have the antibiotics that work.”

Instead of pulling spending goals out of thin air, ESPlannerBasic asks users to enter information about their age, earnings, assets, housing costs, special expenses and other factors. The program then offers advice on how much to spend and save each year, and even how much life insurance to buy, so that the user and his or her spouse can maintain a steady living standard through their retirement years.  Read the rest of this entry »

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