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Personal Finance News 08/2010

UBS to hire Goldman and BofA execs (Reuters)
Reuters - UBS AG said on Sunday it plans to hire executives from Goldman Sachs Group Inc and Bank of America Corp to build its mortgages and lending business in the U.S.

MetLife lowers outlook of Alico buy (Reuters)
Reuters - MetLife Inc lowered its estimate of how much of a boost it will get from acquiring Alico, the foreign life insurance business of AIG, and announced fund-raising plans to help pay for the deal.

Understanding the Psychology of Retirement Planning (U.S. News & World Report)
U.S. News & World Report - Perhaps one of the greatest financial missteps people make is believing that retirement is an event or a "zone" one enters later in life. So says Gregory Salsbury, author of Retirementology: Rethinking the American Dream in a New Economy. Salsbury sees it more as a process: "All of your financial behavior--earning, saving, borrowing, investing--impacts your retirement. It begins as soon as you're able to put money away, not sometime in the future," he says. ...

Jim Rogers: The Next Bubble Is the Bond Market (The Motley Fool)
The Motley Fool - Predicting bubbles has become the sport of choice lately. After the tech bubble of the '90s and the recent implosion of the housing bubble, everyone seems to be in the bubble-forecasting business. So, should you listen to Jim Rogers when he predicts that the bond market is the next bubble to burst?

Are Consumer Companies Doomed? (The Motley Fool)
The Motley Fool - Kellogg (NYSE: K - News) shareholders are likely battling sour stomachs after last week's earnings release, which not even a merry band of Keebler elves could couch in a positive light.

Countrywide agrees to pay $600M to settle lawsuits (AP)
AP - Countrywide Financial Corp. agreed to pay $600 million to settle shareholder lawsuits in the largest payout so far from the mortgage meltdown.

Fannie Mae unveils consumer website for borrowers (AP)
AP - Mortgage company Fannie Mae is introducing a website to help consumers who are struggling to avoid foreclosure learn about ways to get help.

Ally Financial posts $565M profit in 2Q (AP)
AP - Ally Financial Inc. on Tuesday posted a second-quarter profit of $565 million, driven by improvements in its home mortgage business and more demand for auto loans.

How Financial Reform Affects Home Buyers (U.S. News & World Report)
U.S. News & World Report - While the financial reform legislation won't upend the conventions of buying or selling a home, it will precipitate key changes within the mortgage market. Even after all of the new rules are implemented, most consumers will still encounter the same figures--real estate agents, mortgage brokers, home inspectors--that have long defined the home-buying process. But the legislation includes a number of specific provisions that, while perhaps less visible to house hunters, will have a profound effect on the type of mortgage that buyers end up with. ...

The Top Stock of Multimillionaires And 4 More Like It (The Motley Fool)
The Motley Fool - Would you like to know how successful entrepreneurs, former partners of Wall Street investment firms and top executives at Fortune 100 companies have invested their personal wealth? Michael Sonnenfeldt knows the answers to that question.

Summary Box: Ally Financial posts 2Q profit (AP)
AP - IN THE BLACK: Ally Financial Inc., the consumer lender 56 percent owned by the federal government, posted net income of $565 million in the second quarter, thanks to improvements in its home mortgage business and demand for auto loans.

On the Call: What AmeriCredit means for Ally (AP)
AP - Consumer finance company Ally Financial Inc. has long been the lender-of-choice for General Motors Co. But in recent months, GM has said it wants to do more business with customers that have lower credit scores. The automaker views this group as underserved and an important source of business as it prepares for its initial public offering.

Home loan purchase demand up 3rd straight week (Reuters)
Reuters - The demand for mortgage applications to purchase homes rose last week for a third straight week as interest rates tumbled, the Mortgage Bankers Association said on Wednesday.

Mortgage applications rise 1.3 percent last week (AP)
AP - Applications for home loans edged up last week as mortgage rates continued to hover near the lowest level in decades.

3 Big Bets on Health Care (The Motley Fool)
The Motley Fool - There's been a lot of turmoil and gnashing of teeth surrounding recent health-care reform, but even in the absence of reform, it's hard to deny that the health-care sector will play an increasingly important part in all our lives in the future. Though we have yet to see how these new measures will play out in the real world, you can't argue with demographics. A growing elderly population, especially as the first wave of baby boomers retires, means an escalating demand for health-care services.

Big drop expected from Ind. local income taxes (AP)
AP - Local governments across Indiana are projected to see big declines in their income tax revenue in the coming year, which will follow budget troubles that many have already seen from statewide property tax caps.

2 charged in first-of-its-kind credit fraud case (AP)
AP - Federal prosecutors have charged a California woman and Florida man with helping at least three people build false credit histories that allowed them to obtain millions of dollars in mortgage loans.

Mortgage rates hit low of 4.49 pct. (AP)
AP - Mortgage rates dropped to the lowest level in decades for the sixth time in seven weeks, offering the most attractive opportunity for those who qualify to refinance or purchase a home.

Mortgage rates hit record lows (Reuters)
Reuters - Mortgage rates fell in the past week to the latest in a series of record lows amid concerns about the state of the economy, according to a survey released on Thursday by Freddie Mac.

Should Young People See a Financial Planner? (U.S. News & World Report)
U.S. News & World Report - Most young people who are just starting out don't have a lot of money to save or invest--much less pay a professional to advise them on how to save and invest. But some experts say financial guidance at a young age is worth the cost. Yuval Bar-Or, founder of The Light Brigade, an Ellicott City, Md.-based company that offers financial literacy consulting, says financial planners are a good resource because they can examine your complete financial picture. "A planner can help by using their knowledge ... to come up with a game plan. ...

Senate approves higher gov't mortgage fees (AP)
AP - Higher monthly fees are coming for consumers who take out home loans guaranteed by the Federal Housing Administration, the primary source of mortgages for first-time homebuyers.

China Opens the Flood Gates for Gold and Silver (The Motley Fool)
The Motley Fool - Now that the world's attention has drifted away from Europe's crisis, the U.S. dollar is back in focus as the troublemaking currency du jour.

Summary Box: 15-year loan rates below 4 pct. (AP)
AP - RARE OPPORTUNITY: Homeowners can now lock in a 15-year fixed-rate mortgage at a rate of less than 4 percent, the lowest in decades.

Fannie Mae loss shrinks to 3.1 billion dollars (AFP)
AFP - Troubled mortgage firm Fannie Mae said Thursday it lost 3.1 billion dollars in its second quarter, far less than the whopping 13.1 billion dollars suffered in the first three months of the year.

Summary Box: Fannie Mae asks for $1.5B in aid (AP)
AP - TAXPAYER AID: Mortgage buyer Fannie Mae is asking for less money from the government, requesting $1.5 billion in assistance in a sign the taxpayer bill for bailing out the company could be billions lower than once thought.

Fannie seeks less money, bailout price may shrink (AP)
AP - Fannie Mae is asking for less money from the government, a sign that the cost to taxpayers for bailing out the mortgage giant could be billions lower than once thought.

Many ways to replace Fannie and Freddie: Bernanke (Reuters)
Reuters - It should be possible to create a U.S. housing finance system without the need for potentially risky entities like government-sponsored mortgage finance agencies Fannie Mae and Freddie Mac, Federal Reserve Chairman Ben Bernanke said.

ALL BUSINESS: Risks abound if too many refinance (AP)
AP - Lots of homeowners are frustrated these days that they can't seem to get a mortgage refinance even though interest rates are at historic lows. It turns out they're not alone.

PHH to offer $350 million in senior notes (AP)
AP - Mortgage company PHH Corp. said Friday it will offer $350 million in senior notes.

5 Nonfinancial Ways to Prepare for Retirement (U.S. News & World Report)
U.S. News & World Report - We discuss the importance of saving and investing for retirement so often that we sometimes forget the importance of other areas of our lives. While tucking away enough money is important, having a comfortable retirement is so much more than just having enough money to draw on. Here are five nonfinancial ways we all need to plan for retirement.

Consumers cut back on credit cards again in June (AP)
AP - Consumer borrowing fell in June for a fifth straight month as households keep cutting back on credit card use.

Is Super-Investor John Paulson Turning Bearish? (The Motley Fool)
The Motley Fool - On Wednesday, the Financial Times reported that uber-successful hedge fund manager John Paulson had reduced his exposure to stocks. This is the same person who told his investors in a conference call at the beginning of May that "there is a lot of upside in U.S. markets," citing rising corporate profits. When an investor of this caliber changes his outlook in a market that is driven by macro considerations, what are the lessons we can learn?

US consumer credit falls fifth month (AFP)
AFP - Americans cut borrowing for the fifth straight month in June, the Federal Reserve said Thursday, as the US economic recovery showed signs of stalling.

Clarification: Genworth ratings story (AP)
AP - In a story Aug. 6 about Genworth Financial Inc., The Associated Press reported that Fitch estimates Genworth's life insurance companies will lose $800 million over the next 12 to 18 months, but that they are manageable because of the company's capital base and statutory earnings. The story should have specified that Fitch's projections involved a stress scenario, and that the potential $800 million in losses would be investment losses.

Lawmaker wants hearing into Fannie allegations (AP)
AP - A House Republican is calling for a hearing into a former Fannie Mae employee's allegations that the mortgage giant fired her after she criticized how the company was running a government loan assistance program.

More HAMP homeowners falling behind (Reuters)
Reuters - The Treasury Department on Friday acknowledged that the number of homeowners in trouble again despite getting help from the administration's signature mortgage aid program was higher than earlier estimates.

House lawmaker calls for probe of Fannie Mae allegations (Reuters)
Reuters - The top Republican on the House Financial Services Committee called on Friday for an investigation into charges that mortgage finance giant Fannie Mae pushed borrowers into a mortgage aid program so it could receive incentive payments from the U.S. government.

A Fool Looks Back (The Motley Fool)
The Motley Fool - The coffee market continues to expand. Starbucks (Nasdaq: SBUX - News) announced that it moved $100 million of its Via instant coffee packets in their first 10 months on the market.

'India may let foreigners invest in share market' (AFP)
AFP - India may loosen rules to allow foreign individual investors to invest in the country?s share markets as part of moves to reform Asia's third-largest economy, a report said Monday.

Freddie Mac says needs $1.8 billion from taxpayers (Reuters)
Reuters - Mortgage finance giant Freddie Mac on Monday said it would need another $1.8 billion in aid from taxpayers, bringing its total request since it was taken over by the government two years ago to more than $64 billion.

Freddie Mac requests $1.8B in aid after 2Q loss (AP)
AP - Government-controlled mortgage buyer Freddie Mac is asking for $1.8 billion in additional federal aid after posting a larger loss in the second quarter.

US mortgage firm suffers $6 bln quarterly loss (AFP)
AFP - Troubled US mortgage firm Freddie Mac reported Monday a second quarter net loss of six billion dollars and sought another 1.8 billion dollars from the Treasury to contain the red ink.

How to Sink Your Credit Score (U.S. News & World Report)
U.S. News & World Report - The suits at Fair Isaac Corporation sure are good at what they do. How else can you explain the meteoric rise in importance of the lowly credit score? It's not just any credit score, either. The FICO credit score stands head and shoulders above the competition by a wide margin. In fact, all non-FICO scores are pejoratively referred to as FAKO scores since, while "valid," carry little weight with creditors.

Are You Prepared for a Market Correction? (The Motley Fool)
The Motley Fool - Don't let the August market doldrums lull you into complacency. The market will very likely get much more volatile before the end of the year. If you're not prepared, a spike in the level of volatility could lead you to take rash action, which rarely produces the best outcomes. Worse still, you could miss out on the opportunities that price action creates. Here are some ideas to prevent that from happening.

Summary Box: Gov't likely to keep housing role (AP)
AP - THORNY QUESTIONS: Keeping mortgage giants Fannie Mae and Freddie Mac alive will cost taxpayers billions more. But analysts say the government is unlikely to end its support of the mortgage business.

Nelnet 2Q profit jumps sixfold on loan servicing (AP)
AP - Nelnet Inc. said Monday its second-quarter profit rose sixfold on higher revenue from servicing student loans for the government.

You Need These Stocks in Your IRA (The Motley Fool)
The Motley Fool - Smart investors use every tool they have to protect their hard-earned money. When it comes to retirement savings, there's no better place to save than a tax-favored account like an IRA. But once you have money in your IRA, how can you make sure you take maximum advantage of the benefits it offers?

Wall Street pares losses after Fed comments (Reuters)
Reuters - Stocks cut losses on Tuesday after the Federal Reserve announced measures designed to boost the sluggish economic recovery.

Fed takes fresh steps to support fragile recovery (Reuters)
Reuters - The Federal Reserve on Tuesday took fresh steps to lower borrowing costs amid a softening economic recovery, announcing it would use proceeds from its maturing mortgage bonds to buy more government debt.

Will Smartphones Kill Credit Cards? (The Motley Fool)
The Motley Fool - As if financial reform hasn't given credit and debit card companies enough to worry about, they must now grapple with an entirely new threat. The billion plastic payment cards we carry may soon be obsolete, their functions incorporated into cell phones.

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