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Personal Finance News 06/2011

BofA CEO says foreclosure deal will take time (Reuters)
Reuters - A settlement between a coalition of federal and state agencies and banks over foreclosure practices will take longer to hammer out than many expect, Bank of America Corp Chief Executive Brian Moynihan said on Wednesday.

6 Investing Tips for Today's Market (U.S. News & World Report)
U.S. News & World Report - The S&P 500 has nearly doubled since reaching a low point in March 2009. Many factors impact the economy and the markets including high energy costs, financial problems in many European countries, and our own debt issues in the U.S.

The Student Loan Ranger's Mailbag Express: Forgiveness and Repayment (U.S. News & World Report)
U.S. News & World Report - The Student Loan Ranger would like to give a special shout out to all you new graduates!

Your Sovereign Debt Crisis Survival Guide (The Motley Fool)
The Motley Fool - This article has been adapted from Fool U.K., our sister site across the pond.

Do We Need Fannie and Freddie? (U.S. News & World Report)
U.S. News & World Report - The United States doesn't need government-sponsored enterprises such as Fannie Mae and Freddie Mac to sustain the housing market. At least that's what Anthony Sanders, professor of real estate finance at George Mason University, told the House Subcommittee on Capital Markets and Government Sponsored Enterprises last week.

Can You Save Too Much for Retirement? (U.S. News & World Report)
U.S. News & World Report - There are many rules of thumb for retirement investing. Some people say that if you save 10 percent of your income, you'll be fine. Other people recommend maxing out your retirement plan at work or maxing out your IRAs. Some investment advisers recommend a combination of retirement accounts and additional investments. Rarely do you hear a retirement planner say you are saving too much for retirement, but this is becoming a popular sentiment in some circles.

John Bogle Knows a Thing or Two About Investing (The Motley Fool)
The Motley Fool - Recently, Robert Pozen, chairman emeritus of MFS Investment Management and author of a new book The Fund Industry: How Your Money is Managed, spoke to us at Fool HQ about mutual funds and the future of money management.

Fixed mortgage rates drops for 7th straight week (AP)
AP - Fixed mortgage rates slid for the seventh consecutive week, but the lowest rates of the year have done little to lift the struggling housing market.

5 Things to Consider Before Taking in Renters (U.S. News & World Report)
U.S. News & World Report - Thinking about renting out your basement or mother-in-law suite? While the decision to become a landlord is not something to take lightly, it can be a great source of income, says Robert Griswold, author of Property Management for Dummies and Inman News columnist. "It helps you with mortgage payments and the beauty of it is if anything goes wrong, you're right there," he says.

Mortgage rates for the past 52 weeks, at a glance (AP)
AP - Mortgage rates for the past 52 weeks, at a glance

Despite mortgage crisis, home ownership remains cherished American dream (Exclusive to Yahoo! News)
Exclusive to Yahoo! News - by Charlie Cook National Journal Last week's confirmation that the gross domestic product grew only 1.8 percent in the first quarter came when economists were already busily revising their growth forecasts downward for the rest of this year. A double-dip …

The Last Housing Mistake You'll Ever Make (The Motley Fool)
The Motley Fool - With the housing market seeing signs of a double dip in prices, homeowners who got in over their heads have looked to save money by any means necessary. Now, thanks to extremely low interest rates, adjustable-rate mortgages are luring borrowers away from locking in rates with longer-term fixed mortgages. Although you can score from savings in the short run, choosing an ARM over a fixed-rate mortgage could prove to be a big mistake in the long run.

Goldman may release papers to counter report: report (Reuters)
Reuters - Goldman Sachs Group Inc could release documents to counter a Senate subcommittee report that said the bank misled clients about mortgage-linked securities, the Wall Street Journal reported, citing people familiar with the matter.

A Guide to Buying Life Insurance (U.S. News & World Report)
U.S. News & World Report - Many people obtain life insurance when they first have children and then forget about it, except when the premium bill comes due. But an effective financial plan includes reexamining your life insurance needs throughout your life to ensure that the assets you've accumulated are protected and to provide additional opportunities to create wealth. Keep in mind that you never want to become insurance poor--overbuying insurance can be counterproductive as well.

Goldman sells mortgage unit Litton for a loss (AP)
AP - Goldman Sachs is selling a subprime mortgage servicing business at a loss.

How Safe Is Amazon's Position in Cloud Computing? (The Motley Fool)
The Motley Fool - The cloud underpins the Internet like Atlas holding up the sky. However, recent outages have caused Atlas to shrug. Amazon's (Nasdaq: AMZN - News) Elastic Compute Cloud is going through some growing pains, causing headaches for some of the popular start-ups that are using its cloud resources.

Grubb & Ellis Healthcare REIT II extends IPO (AP)
AP - Grubb & Ellis Healthcare REIT II Inc. has extended its initial public offering by 12 more months.

Consumers borrowed more for 7th straight month (AP)
AP - Americans borrowed more money in April for the seventh straight month, but they cut back on using their credit cards.

Consumers borrowed more for 7th straight month (AP)
AP - Americans borrowed more money in April for the seventh straight month, but they cut back on using their credit cards.

Mortgage applications slipped last week: MBA (Reuters)
Reuters - Applications for home mortgages eased last week, although demand for refinancing improved as interest rates edged down, an industry group said on Wednesday.

Wells Fargo rolls out fixed-rate student loans (AP)
AP - Wells Fargo is hoping to make its student loans more attractive to families.

Slow economy weighing on stock market, finally (AP)
AP - The stock market comeback has proceeded at a rapid clip for more than two years. Yet the economic recovery has been frustratingly slow.

Fixed mortgage rates drop for 8th straight week (AP)
AP - Fixed mortgage rates have dropped for an eighth straight week, but the low rates have done little to boost the depressed housing market.

Gov't faults 3 lenders over mortgage-aid efforts (AP)
AP - The Obama administration is blaming the three largest U.S. mortgage lenders for the failures of its foreclosure-prevention program. It says they've done little to help people at risk of losing their homes.

Americans' equity in their homes near a record low (AP)
AP - Falling home prices have shrunk the equity Americans have in their homes to nearly the lowest percentage since World War II.

Mortgage rates for the past 52 weeks, at a glance (AP)
AP - Mortgage rates for the past 52 weeks, at a glance

Summary Box: Gov't faults lenders for mortgage aid (AP)
AP - PLACING BLAME: The Obama administration said the three largest U.S. mortgage lenders did little to help people at risk of losing their homes through the government's foreclosure-prevention program.

Summary Box: Americans' home equity nearing low (AP)
AP - HOME EQUITY FALLS: Average home equity plunged from more than 61 percent at the start of 2001 to 38 percent in the January-March quarter this year, the Federal Reserve said Thursday.

Mortgage debt is down, Americans' net worth up, but analysts call gains fragile (The Christian Science Monitor)
The Christian Science Monitor - An increase in household net worth appears to be improving the financial condition of American families, but slowly.

Ally Financial delaying IPO: sources (Reuters)
Reuters - Ally Financial, the auto and mortgage lender majority-owned by the U.S. government, is delaying its initial public offering due to bad market conditions, two sources familiar with the situation told Reuters.

Americans' equity in their homes near a record low (AP)
AP - Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago.

Slow economy weighing on stock market, finally (AP)
AP - The stock market comeback has proceeded at a rapid clip for more than two years. Yet the economic recovery has been frustratingly slow.

States Are Rejecting Millionaire Taxes (BusinessWeek)
BusinessWeek - Millionaires can breathe a bit easier. While President Barack Obama says he wants to let income tax cuts that benefit only the wealthiest Americans expire in 2013, several states are rolling back tax increases for top earners.

Goldman Closes the Door on Subprime (BusinessWeek)
BusinessWeek - When Goldman Sachs bought Litton Loan Servicing, a firm that collects mortgage payments from homeowners, in 2007 for an unannounced price, it seemed like a simple way to get an on-the-ground view of the subprime market. The insight would help Goldman Sachs figure out how much to pay for loans, and Litton would work with borrowers to get them back on track. Other sophisticated investors, including billionaire Wilbur L. Ross and private equity firm Centerbridge Capital Partners, bought mortgage servicers with a similar strategy in mind.

20 Questions for Warren Buffett (The Motley Fool)
The Motley Fool - It's that time of year again: Warren Buffett is auctioning off a lunch -- with himself. The eBay auction ends this afternoon. Last year's winning bid hit $2.6 million. As of Friday morning, the top bid was $2.3 million (proceeds go to charity).

Former TBW execs get prison time for roles in fraud (Reuters)
Reuters - Two former senior Taylor, Bean & Whitaker Mortgage Corp executives were sentenced on Friday to several years in prison for their roles in a nearly $3 billion fraud that took down the big lender and a major bank.

TBW execs involved in $3B fraud sentenced (AP)
AP - Two executives at what had been the nation's largest private mortgage lender were sentenced to six and two-and-a-half years for their roles in a $3 billion fraud that officials have called the biggest criminal case to develop out of the nation's housing and financial crises.

Wal-Mart Can't Just Duct Tape This Massive Problem (The Motley Fool)
The Motley Fool - The world's largest retailer, Wal-Mart (NYSE: WMT - News), saw its revenues rise in the latest quarter, but U.S. same-store sales figures fell for the eighth consecutive quarter. U.S. operations have been struggling since the recession and now, rising crude oil prices and budget-conscious shoppers are playing their part to spoil the party.

10 Things You Should Know About Your IRA (U.S. News & World Report)
U.S. News & World Report - Individual retirement accounts held an estimated $4.7 trillion in 2010, which is just over a quarter of all retirement assets in the United States. Some 49 million Americans had at least part of their nest egg stashed in an IRA last year. How well you choose IRA investments and minimize taxes using these accounts will play a big role in how prepared you are for retirement. Here are 10 things you should know about your IRA.

Summary Box: Aetna buys Genworth Medicare business (AP)
AP - THE DEAL: Aetna Inc. said Monday it will buy Genworth Financial Inc.'s Continental Life Insurance Co. for about $290 million. Continental Life's business includes Medicare supplement insurance, accident and health coverage and some coverage for funeral services and other financial expenses.

Banks get more time to submit foreclosure plans (AP)
AP - Federal regulators are giving the nation's largest mortgage lenders an extra month to show how they plan to address problems with their foreclosure practices.

Step Away From That Growing Pile of Money (The Motley Fool)
The Motley Fool - The all-too-common practice of borrowing from retirement accounts is much more dangerous than you probably think.

New York extends mortgage probe to trustees: source (Reuters)
Reuters - New York's top legal officer is seeking information from Deutsche Bank AG and Bank of New York Mellon about their role as trustees for mortgage-backed securities, an expansion of his probe of mortgage practices, said a person familiar with the matter.

BofA mortgage woes do not crimp capital: analysts (Reuters)
Reuters - Bank of America Corp will not likely need to raise capital unless it is forced to recognize mortgage losses sooner than expected or is required to boost capital levels faster, a Sanford Bernstein analyst wrote on Monday.

Bank of America hindered foreclosure review: filing (Reuters)
Reuters - Bank of America Corp unnecessarily burdened U.S. regulators who were reviewing the mortgage giant's foreclosure practices, according to a court filing.

Why It's Worse Than the Great Depression and You Haven't Been Given a Raise (The Motley Fool)
The Motley Fool - Here's some sick news: Real wage growth over the past decade hasn't just been below average. It isn't even just the lowest in post-war history. Real wage growth from 2001-2011 was actually slower than during the Great Depression decade of 1929-1939. That's scary. It's sad. It's pitiful.

JPMorgan dismisses mortgage head Lowman (Reuters)
Reuters - JPMorgan Chase & Co has pushed out its head of home lending, David Lowman, who had been sidelined in February after the bank racked up billions of dollars in losses on mortgages and became mired in litigation over foreclosures.

Banco Santander: 1 of the Best International Banking Stocks (The Motley Fool)
The Motley Fool - Foolish investors may want to make room for international stocks in their portfolios to mitigate some of the risk posed by a U.S. economy grappling with inflation and severe default anxiety. I think I've found one solid stock that can do precisely that.

Another Retailer Struggling Mightily (The Motley Fool)
The Motley Fool - Women's apparel retailer Talbots (NYSE: TLB - News) has struggled to woo shoppers to its stores lately, and that trend is not likely to change anytime soon. The Massachusetts-based company had a disappointing quarter that saw it perform dismally on almost all fronts. In its wake, shares fell a staggering 40% as the company warned of further weak results.

A Game Changer for Mutual Funds (The Motley Fool)
The Motley Fool - Investors looking for the best mutual funds for their portfolios have typically had little direction in making those decisions. While the Morningstar star rating system has often ended up standing in as a recommendation service, it wasn't really designed to serve that purpose. Because the star system looks at past performance and risk-adjusted returns, star ratings are usually a better rear view mirror look at a fund, rather than a forward-looking dashboard view.

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