January 2009 Archives

The Wall Street Journal

By Jane J. Kim

January 29, 2009

Fair Isaac Corp. is rolling out its new-and-improved FICO score, but it's likely to take a while before consumers see how they stack up under the new system.

On Thursday, Fair Isaac and one of the three major credit bureaus, TransUnion LLC, will start offering the revamped score, dubbed "FICO 08," to lenders. Equifax Inc. is expected to follow in the second quarter, while Experian Group Ltd. declined to comment due to pending litigation with Fair Isaac.

The Wall Street Journal

By Jacob Goldstein

January 30, 2009

As leaders in Congress and the Obama administration look to expand health-insurance coverage while controlling costs, they are considering changing the way doctors are paid for treating patients covered by Medicare.

Critics of the current system, in which most doctors are paid for each procedure they perform, say it creates a financial incentive for unnecessary treatments. Alternatives such as paying a fixed annual rate for each patient have been criticized for giving providers an incentive to withhold potentially helpful treatments.

The Wall Street Journal

By Laura Meckler

January 30, 2009

WASHINGTON -- The Senate voted Thursday to expand the State Children's Health Insurance Program, one in a series of early steps Congress is taking on health care.

These early efforts are serving as a warm-up of sorts for the broader debate coming over an overhaul to the health system, where many of the same issues and significantly more federal spending will be on the table.

The Brown Daily Herald

By Alexandra Ulmer

January 29, 2009

Four Brown students are launching Providence's first microfinance bank in Olneyville next month to give loans to poor entrepreneurs and to immigrants looking to become permanent residents and citizens.

Mollie West '09, Andy Posner GS, Raisa Aziz '11 and Nabeel Gillani '12 started the Capital Good Fund project last month in the predominantly low-income, Hispanic community of Olneyville. The neighborhood, one of the city's oldest, is located near Federal Hill.

Grand Rapids Press

Editorial

January 29, 2009

Things are getting worse for Michigan's children. The annual Kids Count in Michigan report is sobering because we know kids who live in poverty suffer difficult lives. The daunting numbers show that one out of every five children lives in poverty. That should serve as a powerful reminder to Gov. Jennifer Granholm and lawmakers that economic growth is the antidote to what's ailing families living in indigence, or on the verge.

In these hard times, there must also be a commitment not to shred programs that meet the needs of struggling families. A serious look at strengthening the safety net is in order as unemployment remains the highest in the nation at 10.6 percent.

Omaha World-Herald

By Erin Grace

January 29, 2009

Help the working poor and you'll help the state's economy, the Nebraska Appleseed Center for Law in the Public Interest argues in a report to be released today.

With one in four Nebraska families struggling to meet basic needs, the Appleseed Center is calling for Nebraska to beef up its existing public benefits programs and to expand educational and work force opportunities.

"I'm hoping this draws attention to the importance of low-income working families in our state (and) the vital role they play," said Kate Bolz, community educator for the Appleseed Center.

By Adam Jadhav

January 24, 2009

Dave Diekmann sat at his dining room table recently musing about the trappings of home: pictures on the walls, a grill on the deck, a neatly trimmed lawn, kids playing video games in separate rooms, a giant mop of a white cocker spaniel flopping around on the floor.

All of that seemed out of reach last spring when real estate agents told Diekmann and his girlfriend, Sherri Ross, that having a house of their own wasn't an option, given their mediocre credit and the gloomy market. Better find a rental and wait it out.

The Washington Post

By Amy Goldstein

January 28, 2009

President Obama plans to sign into law tomorrow the first legislation of his White House tenure, reversing a recent Supreme Court ruling that had restricted the ability of women and other workers to sue for pay discrimination.

Congress passed the measure yesterday with a lopsided House vote, handing a swift victory to women's and labor advocates on a civil rights expansion that Obama's predecessor had vowed to block.

BusinessWorld

Editorial

January 28, 2009

More than 106 million of the world's poorest families received a microloan in 2007, surpassing a goal set 10 years earlier, according to a report released today by the Microcredit Summit Campaign.

Microloans are used to help people living in extreme poverty start or expand a range of tiny businesses such as husking rice, selling tortillas, and delivering cell phone services to remote villages.

"This is a tremendous achievement that many people thought was far too difficult to reach," said Nobel Peace Prize laureate and Grameen Bank founder Muhammad Yunus who was present for the announcement.

The Washington Post

By Bill Gates

January 28, 2009

Bill Gates released an annual letter this week outlining the state of his foundation and its goals for 2009. Following are excerpts from the section on education:

Warren Buffett [says] every American, including him, is lucky to have been born here. He calls us winners of the "ovarian lottery."

But even within the United States, there is a big gap between people who get the chance to make the most of their talents and those who don't. Melinda and I believe that providing everyone with a great education is the key to closing this gap. . . .

By Michaela Saunders

January 28, 2009

Erick Lopez-Quintana clutched his $40 and savings passbook close to his chest as he prepared to fill out a deposit slip.

The 10-year-old was excited to get that money - his allowance for several weeks - into the bank. And he didn't have to leave school to do it.

Students wait with passbooks and money in hand at Omaha's Spring Lake Elementary Magnet, where Security National Bank opened a "branch" Tuesday.Erick attends Spring Lake Elementary Magnet, near 21st and F Streets, where Security National Bank opened a "branch" Tuesday morning. The branch offers non-interest-bearing savings accounts for students and school staff.

Editorial

January 26, 2009

World poverty won't be solved by grand schemes or government programs. As the worldwide microcredit movement has demonstrated, it will be solved one person at a time. Incredibly, that approach has now reached more than 100 million individuals, which was the goal the movement established a decade ago.

By Karen Peterson

January 25, 2009

In a recent posting on his santafereview.com Web site, city observer George Johnson says that there are more than 800 properties for sale in Santa Fe County for $300,000 or less - by Santa Fe standards, affordable. Given that, Johnson wonders, "do we need to be designing whole new neighborhoods of moderately priced homes?"

But let's deconstruct the figures. , a Web site compiled from the Multiple Listing Service used by Realtors nationwide, www.realtor.com shows just over 1,000 properties for sale in Santa Fe for $300,000 or less. But more than half of these listings are for land or lots, not homes. According to the Web site, a total of 511 residential housing units are for sale in that price range. Of these, 266, or just over half, are townhomes and condominiums.

The New York Times

Editorial

January 26, 2009

If you have a 401(k) retirement plan at work, you don't need us to tell you that you've taken a hit in the past year. The really bad news is that the damage to your retirement security is likely worse than what the numbers say on your statement.

Many Americans didn't have enough savings coming into the downturn. And employers are increasingly cutting back or suspending their 401(k) match. FedEx, Eastman Kodak, Motorola, General Motors and Ford, among others, have announced such moves.

The Hill

By Jeffrey Young 

January 26, 2009

House Speaker Nancy Pelosi (D-Calif.) sought to clarify that Democrats will take significant steps this year on healthcare reform after comments by one of her deputies appeared to downplay those chances.

A spokesman for Pelosi predicted Monday that the House would "take a major step" toward comprehensive health reform this year.

House Democrats are already taking "incremental steps" toward health reform, Pelosi spokesman Brendan Daly wrote in an e-mail before suggesting more sweeping action in the near future.

The Wall Street Journal

By John Hechinger

January 27, 2009

College endowments have suffered a sharp blow in the financial crisis, with aggregate investment losses of at least $94.5 billion, according to a new survey.

The losses, covering the period between July 1 and Nov. 30 of last year, likely understate the severity of the hit schools have taken, since they don't include losses in illiquid, hard-to-value investments that many schools have loaded up on. Schools warned that the declines could lead to cutbacks in financial aid.

The Wall Street Journal

By Mike Spector

January 24, 2009

Geoffrey Canada has spent decades building a strategy for saving poor children from crime-ridden streets and crumbling public schools.

His "Harlem Children's Zone" now serves thousands of kids, some of whom are showing impressive test scores. He has attracted the attention of the new White House because of his charity's model: Instead of tackling problems here and there, the program envelops an entire neighborhood, with services ranging from parenting classes to health clinics to charter schools.

By William Schweke

January 25, 2009

The recession is taking its toll in North Carolina. Personal bankruptcies, foreclosures, unemployment and food stamp numbers are up; tax revenues are way down.

The state government budget gap may reach $1.6 billion this year and possibly $3 billion in the next. State agencies during the last part of the Governor Easley's administration already adopted a 5 percent across the board cut.

By Laura London

January 22, 2009

During its meeting Jan. 15, the Otero County Commission voted 2 to 1 to write a letter of support endorsing a nonprofit company that wants to build low-income housing in the area.

Rudy Clarke, president of the just-forming Humanity Enterprise Inc., had asked the commission during its work session Jan. 7 for a letter expressing the county's support for the organization's application to Community Housing Development Organization status. He explained he needed a local government body to send its letter of support to the New Mexico Mortgage Finance Authority.

Kansas City Star

January 22, 2009

Saying he will not bleed Missouri's colleges and universities in the state's budget, Gov. Jay Nixon has signaled some long-overdue respect for higher education in Jefferson City.

In exchange for stable state funding in the coming fiscal year, leaders of four-year colleges and universities have agreed to hold tuition rates steady.

The New York Times

By Kevin Sack and Katie Zezima

January 22, 2009

Medicaid rolls are surging, by unprecedented rates in some states, as the recession tightens its grip on the economy and Americans lose their employer-sponsored health coverage along with their jobs.

In a number of states, Medicaid populations grew by 5 percent to 10 percent in the last 12 months and, in many, the growth rate was at least double what it had been in the previous year. State Medicaid officials also say that because enrollment often lags behind job losses by several months, the growth in 2008 may represent only the leading edge of heightened demand.

Mission Local

By Caitlin Esch

January 16, 2009

Jose Quiñonez came to the United States in 1980; he was an undocumented 9-year-old immigrant from Mexico. Eighteen years later, Quiñonez graduated from Princeton University with a master's degree in public affairs.

As executive director of Mission Asset Fund, a fledgling nonprofit organization on South Van Ness Avenue, Quiñonez is working to help low-income recent immigrants achieve their American dream by opening bank accounts, building credit, and saving money for long-term investments.

The Wall Street Journal

By Conor Dougherty

January 20, 2009

Barack Obama promised change. But the country he will lead is already changing in many ways that would challenge any president.

The U.S. is well on its way to becoming a "majority minority" country, where fewer than half the residents will be whites of European ancestry, raising issues of national identity and cohesion. Good-paying jobs in manufacturing continue to disappear, as they have for decades, but now high-paying ones in the financial sector are likely to vanish too. Among the fastest-growing age groups are Americans between 55 and 64; that increase highlights the growing burden of health care and pensions. Americans are more anxious than they've been in decades about their economic future.

The Washington Post

By Michelle Singletary

January 15, 2009

It's hard to keep up with all the legislative changes taken as the federal government grapples with the recession.

So, on occasion, I'll be writing about the new laws affecting your pocketbook. You may have already heard about the changes, but it can't hurt to confirm what you know or think you know.

One change that President Bush signed just before Christmas affects a lot of seniors.

MarketWatch

By Andrea Coombes

January 15, 2009

From tax breaks for college costs to an expanded credit for first-time home buyers and perks for businesses, U.S. taxpayers would see about $275 billion in tax cuts under a fiscal stimulus plan proposed Thursday in the House of Representatives.

According to details posted by the House Ways and Means Committee, the proposed plan includes President-elect Barack Obama's much-touted "Making Work Pay" tax credit worth up to $500 for single workers and $1,000 for married couples. That credit is widely expected to be paid through a reduction in payroll taxes, so workers would see a slight increase in their paychecks.

The New York Times

By John Leland

January 15, 2009

As home values across the country continue to plummet, the authorities say a new breed of swindler is preying on the tens of thousands of homeowners desperate to avoid foreclosure.

Carol McClelland turned to third parties that offered to renegotiate their mortgages but did nothing and was evicted.

One company told Maria Martinez that for $1,000, they would negotiate with her mortgage company to lower her interest rate. Until recently, defrauders tried to bilk homeowners out of the equity in their homes. Now, with that equity often dried up, they are presenting themselves as "foreclosure rescue companies" that charge upfront fees to modify loans but often do nothing to stave off foreclosure.

The Boston Globe

By Jenifer B. McKim

January 13, 2009

Adding empirical evidence to what many community and housing activists already know anecdotally, a new report by the Federal Reserve Bank of Boston documents how minorities in Massachusetts were disproportionately affected by the mortgage crisis.

African-Americans, for example, overwhelmingly used subprime mortgages to buy homes in 2004 and 2005. And in 2007 almost half of African-Americans who moved out of their homes did so through foreclosure rather than a sale, the report said. Many of those lost homes were small multifamily properties. As a group, these houses make up 10 percent of the state's housing stock, but they made up nearly half of all foreclosed housing units in Massachusetts in 2007, according to the study. About two-thirds of foreclosed multifamily properties were purchased by minorities between 2003 and 2006.

The Seattle Times

By Kyung M. Song

January 11, 2009

Eight-year-old Sarah McIntyre was set to enroll in perhaps Washington's best health-insurance deal: full medical, dental, vision and prescription-drug coverage with zero deductibles and zero co-pays all for just 30 bucks a month.

But the Yakima girl, who suffers from bronchial asthma and needs expensive inhalers, lost her taxpayer-subsidized health coverage even before she could sign up.

The Wall Street Journal

By Laura Meckler

January 13, 2009

WASHINGTON -- Democrats are using an early vote on a children's health-care bill to advance a longstanding effort in the more controversial area of immigration.

A bill renewing the Children's Health Insurance Program is expected to pass Congress easily and is being teed up to give President-elect Barack Obama an early victory.

The New York TImes

By M.P. Dunleavey

January 9, 2009

After all the trouble in the economy, no one needs to persuade me of the importance of saving money for a rainy day. What is hard is actually doing it.

The standard advice is to save three to six months' worth of living expenses -- which sounds wise. But really, how are you supposed to salt away that much cash, given all the other demands on your income?

Saving is a deceptively difficult task for many people (born savers, I salute you!). Actually saving some money -- let alone the thousands you might need to weather a crisis -- results from a chain of habits and choices that does not, for many people, come naturally.

By Vicki Lee Parker

January 11, 2009

Geraldine Falgout bought her first home on Nov. 7.

At 60, Falgout had thought she was too old to buy one.

Then, through her employer WakeMed, she met a housing counselor with the Raleigh Area Development Authority's Employer-Assisted Home Buyer Program. The counselor showed her that she could buy a home, and how to do it.

Falgout learned her lessons well. She walked away from the first house she considered buying in early September.

The Washington Post

By Rourke O'Brien and David Newville

January 11, 2009

As foreclosure rates continue to reach record highs here in the Washington region and across the country and the global economy reels, many Americans have begun to question whether expanding homeownership is a wise strategy. While there is plenty of blame to go around for this mess, the goal of expanding homeownership is still an important one and should not be sacrificed.

It can be done responsibly and should remain a priority. In fact, one of the best examples of how it can be done is right here in the District. An innovative housing program here is the largest of its kind in the country and will create 1,000 new units of permanently affordable housing. More important, it provides an excellent model for responsibly expanding homeownership to low- and moderate-income families across the country in the post-subprime-loans era.

The Washington Post

By Nancy Trejos

January 11, 2009

Shashi Bellamkonda would like his 16-year-old daughter to get a credit card as soon as she is eligible.

Okay, that might sound kind of dangerous considering how much we have heard about teenagers (and let's face it, adults) getting into trouble with credit cards. Aren't there members of Congress who want to ban credit card companies from marketing to college students and young people in general? (The answer is yes.)

Triangle Business Journal

By Lee Weisbecker

January 9, 2009

RALEIGH - North Carolina's two major cash-for-jobs incentives programs have pumped a major portion of their largesse into the state's wealthiest counties, and "a new approach is needed," concludes a just-released study.

Between 2003 and 2006, some 49 percent, or roughly $22 million, of the money paid out from the One North Carolina Fund to grow jobs in corporate expansions went to firms in the 20 richest counties.

By Laura London

January 8, 2009

A group in Otero County is forming a nonprofit corporation to build low-income housing in the area. The organization's head came before the county commission during its work session to ask for its support Wednesday.

Rudy Clarke, president of the just-forming Humanity Enterprise Inc., went before the commission's Wednesday work-session to ask for a letter expressing the county's support for the organization's application to Community Housing Development Organization status.

In late-December, 15 people graduated from the Individual Development Account program. An IDA is an account in which every dollar saved by the individual is matched with $4 of federal and state funds. The maximum amount that may be matched is $1,000, leaving a successful graduate with $5,000 in savings to help with running a business, becoming a first-time homeowner, attending school or other expenses.

The Wall Street Journal

By Simona Covel

December 26, 2008

After spending nearly 20 years building her own business, Cookie Driscoll thinks it might be over.

Ms. Driscoll owns C. Cookie Driscoll Inc., of Fairfield, Pa., which sells animal-themed gifts and office-promotional products. In the past year, she has seen nine of the mom-and-pop shops that buy her goods shutter -- often without paying their outstanding invoices. Her bank revoked her credit line. She expects revenue to be under $60,000 this year, down from a peak of nearly $230,000 a few years ago. She is taking almost no income from her business and paying bills with the last $16,000 from her retirement account.

"I'm as close to a panic as I've ever been," says the 57-year-old Ms. Driscoll. "This is the most terrified I've ever been in my life."

The Wall Street Journal

By Susan Schmidt and Maurice Tamman

January 5, 2009

California Rep. Joe Baca has long pushed legislation he said would "open the doors to the American Dream" for first-time home buyers in his largely Hispanic district. For many of them, those doors have slammed shut, quickly and painfully.

Mortgage lenders flooded Mr. Baca's San Bernardino, Calif., district with loans that often didn't require down payments, solid credit ratings or documentation of employment. Now, many of the Hispanics who became homeowners find themselves mired in the national housing mess. Nearly 9,200 families in his district have lost their homes to foreclosure.

The Wall Street Journal

By Kelly Evans

January 6, 2009

BOISE, Idaho -- Rick and Noreen Capp recently reduced their credit-card debt, opened a savings account and stopped taking their two children to restaurants. Jessica and Alan Muir have started buying children's clothes at steep markdowns, splitting bulk-food purchases with other families and gathering their firewood instead of buying it for $200 a cord.

 As layoffs and store closures grip Boise, these two local families hope their newfound frugality will see them through the economic downturn. But this same thriftiness, embraced by families across the U.S., is also a major reason the downturn may not soon end. Americans, fresh off a decadeslong buying spree, are finally saving more and spending less -- just as the economy needs their dollars the most.

Reporter-News

By Kathy Edwards McFarland

January 4, 2009

Reporter-News photo by Nellie Doneva Pam and Rick Bowden and their children, from left, Kallie, Tyler, Trevor and Tatum live in a house that was made more affordable by a United Way program.

Pam Bowdin, 44 years old, found that renting was a no-win situation. She knew, as she struggled with her life as a divorced, single mom of five, that there had to be an alternative. In 2005, she applied for a Habitat for Humanity home in Abilene and began a yearlong program to build assets toward putting a down payment on a house through the Community Action Program, Inc. of Taylor County Individual Development Account.

The Washington Post

By Lori Montgomery

January 3, 2009

With President-elect Barack Obama and congressional Democrats considering a massive spending package aimed at pulling the nation out of recession, the national debt is projected to jump by as much as $2 trillion this year, an unprecedented increase that could test the world's appetite for financing U.S. government spending.

For now, investors are frantically stuffing money into the relative safety of the U.S. Treasury, which has come to serve as the world's mattress in troubled times. Interest rates on Treasury bills have plummeted to historic lows, with some short-term investors literally giving the government money for free.

But about 40 percent of the debt held by private investors will mature in a year or less, according to Treasury officials. When those loans come due, the Treasury will have to borrow more money to repay them, even as it launches perhaps the most aggressive expansion of U.S. debt in modern history.  

The Washington Post

By Michelle Singletary

December 28, 2008

The New Year is a good time to begin new practices, especially concerning money management.

As we enter 2009, it's especially important to begin handling your credit card differently -- because in more than a year, the credit card industry must change the way it treats you. And trust me, there will be little room for you to make a mistake in how you use such credit because the industry wasn't happy about the forced changes.

The Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration approved new regulations for credit card issuers prohibiting certain "unfair acts."

The Advocate

By Sarah Chacko

December 25, 2008

Last year, Lakeshia Robertson was wondering where she was going to live with her three children after divorcing her husband.

"I didn't want them to think that just because one bad thing happened, nothing good could come from it," said Robertson, 31.

Today, she and her children are celebrating Christmas in the first home of their own, secured with the help of an asset building program through the state Department of Social Services.

Business Journal - Central New York, The

November 21, 2008

New York State has approved more than $9 million in financing to create and preserve 245 units of affordable housing in Onondaga County.

The New York State Housing Finance Agency (HFA) and its subsidiary, the New York State Affordable Housing Corp. (AHC), made the approval.

The HFA approved $5.4 million to build 28 units on the east side of the city of Syracuse, and it approved a $2.695 million loan to purchase a manufactured home park in the town of Elbridge. In addition, AHC approved $950,000 to acquire and renovate 45 homes in Onondaga County. 

The Washington Post

This bedroom community is populated overwhelmingly by minority families, who were lifted by a wave of easy credit over the Altamont Pass and into dream homes. And if Stockton today is the foreclosure capital of the nation -- as several surveys show it to be -- it also showcases a little-known upside of the "subprime crisis": the elevation nationwide of hundreds of thousands of African Americans into homeownership.