Archive for September, 2015

Cyber Attacks Could Threaten Bank Credit Ratings

Posted on September 30, 2015 by Saldutti

Banks with weak cybersecurity controls could be downgraded even if they haven’t been attacked, said Standard & Poor in a recent report.  While it hasn’t yet downgraded a bank based on its computer security, the ratings company said it would consider doing so if it determined the lender was ill-prepared to withstand a data breach. It would also drop a bank’s rating if an attack caused reputational harm or resulted in losses that hurt profit, S&P said. “We view weak cybersecurity as an emerging threat that has the potential to pose a higher risk to financial firms in the future,…

The Average American Household’s Income by Age

Posted on September 29, 2015 by Saldutti

It’s the great upside-down U. Those in the workforce are familiar with the typical earnings arc in America: You start out at the bottom, work your way up, then experience a rather significant downward trend in earnings once you hit your Golden Years.  The Census Bureau just came out with its most-recent report on income in America, and it supports this broad generalization. Here’s what the data revealed about the median American household’s income, based on the age of the primary breadwinner. As you can see, there’s a steep increase in earnings from your teens through your mid-fifties. Between the…

Fed Can’t Solve Housing Puzzle Alone

Posted on September 28, 2015 by Saldutti

“There has never been a better time to buy a home.”  That phrase, or variations on it, can be found in thousands of advertisements from real-estate agents and home builders. While impossible to disprove without the benefit of hindsight, it is safe to say the slogan’s prominent use at the peak of the housing boom was unfortunate. Maybe it was even used during the Lyndon Johnson administration, which was the last time the U.S. homeownership ratio was so low. With that in mind, it is worth asking whether the Federal Reserve’s decision last week to keep interest rates near zero for a bit longer…

A Tipping Guide for All Situations

Posted on September 25, 2015 by Saldutti

Tipping is an issue that brings out all sorts of passionate opinions and questions.  Who should you tip? How much should you tip? When is it appropriate to leave a bad tip? And is the whole idea of tipping flawed in the first place?  If you’ve ever asked those questions, this post might provide a little clarity on the all-important subject of tipping etiquette. When in doubt about whether or not to leave a tip, always err on the side of generosity. Remember, your tip says more about you than the person you’re leaving a tip for.  The folks at DaveRamsey.com…

Could Your Smartphone Be a Financial Risk?

Posted on September 24, 2015 by Saldutti

The smartphone can add significant security to payments, but it is also a tool that fraudsters can exploit. Researchers and scammers have already found several unique attacks that rely on mobile devices. Facial Farce – There is a lot of attention around using facial recognition with mobile devices, such as MasterCard’s SelfiePay and Alibaba’s Smile to Pay. These systems typically require the user to blink to prove that they are not a fraudster holding up a still photograph, but a Popular Science writer was able to fool this type of system with a video of himself blinking. Heat of the Moment – For a…

The Reason(s) Borrowers Can't Pay Their Mortgage

Posted on September 23, 2015 by Saldutti

Loan performance has improved since the housing crisis. But credit challenges persist, while higher housing costs combined with a plateau in wages have put increased strain on some borrowers’ finances.  A recent National Mortgage News feature listed the following 7 stresses that affect a borrower’s ability to repay. Some Modified Loan Rates Are Higher – Certain borrowers who had their loan rates reduced through the government’s Home Affordable Modification Program could see gradual increases in their monthly bills, with the national median for an upward adjustment totaling about $200. Resets Hike Payments on Certain HELOCs – About 3 million borrowers who took out home…

Do You Make These 5 Money Mistakes With Your Kids?

Posted on September 22, 2015 by Saldutti

Personal finance expert and author of the forthcoming book “Make Your Kid a Money Genius (Even If You’re Not),” Beth Kobliner discovered that many parents have a harder time explaining how money works to their kids than talking about sex or drugs.  “Part of it is that parents are afraid they don’t know enough to talk to their kids, and another part of it is that we’re afraid to reveal our own money foibles to our children,” explained Kobliner, who also wrote the New York Times best-seller “Get A Financial Life.” “That’s a problem because we now know the number…

Coming This October 1st: The Premiere of EMV Cards

Posted on September 21, 2015 by Saldutti

You may have started receiving new credit and debit cards in the mail — if you haven’t, be on the lookout.  The U.S. is about to experience a nationwide migration to EMV technology, meaning the credit cards we use will be different and the way we pay with them will change.  The new credit cards are outfitted with microchips on the front. Rather than reading the magnetic strip on the back of your card, payment-processing systems will read the chip, meaning you’ll no longer swipe your cards – you’ll “dip” them. “The principle thing that EMV chip cards do is address counterfeit…

5 Money Apps to Teach Financial Literacy to Children

Posted on September 18, 2015 by Saldutti

While educators and parents often resort to games of yore, today’s modern phone apps and electronic games can provide a much more engaging educational opportunity, especially when it comes to money.  “Money management can really be an abstract concept,” said Jennie Cogbill, a mother of three.  “I don’t ever carry cash so trying to explain the cost and ultimately the value of things like shoes or sports equipment is tough.” Stuart Ritter, a father and senior financial planner at T. Rowe Price, agrees. “As soon as they start asking questions about it and realize that money buys things, we need to be talking to…

Commercial Credit Is the New Mortgage Credit

Posted on September 17, 2015 by Saldutti

In the wake of an unprecedented U.S. housing bust that evolved into a global financial crisis, the business of bundling home loans that aren’t backed by the American government into bonds that can be sold to investors has all but disappeared.  It’s a point underscored by Laurie Goodman, director of the Housing Finance Policy Center at the Urban Institute, in a paper titled: “The Rebirth of Securitization: Where Is the Private-Label Mortgage Market?” Sales of residential mortgage bonds that don’t come with any sort of government backing have fallen off a cliff in the time period, while issuance of other types of debt has been…