House prices to drop 10% in 2009

House prices will end 2009 25 per cent lower than the peak of the market, according to new analysis.

The Royal Institution of Chartered Surveyors (Rics) predicts a 2009 still defined by house price falls – with a ten per cent drop over the year.

Simon Rubinsohn, Rics chief economist, said: “Lenders are likely to remain cautious in the near term in the absence of any ‘guarantees’ on mortgage backed securities.

“This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009.”

However, the body forecasts a ten per cent rise in the number of housing transactions, as the number of buyer enquiries is now starting to rise.

But much still remains on whether mortgage lending will ease in the coming year, so buyers can take advantage of the lowest interest rates since the 1950s.

Mortgage approvals are currently hovering just above 30,000 per month compared to the 129,000 seen at the height of the most recent boom in November 2006.

“With lenders likely to remain generally cautious for some time to come and the economy heading deeper into recession, early relief for the housing market seems improbable,” the report found.

The Rics report also highlights the problems over the economy and how they will affect the property market.

It states: “A sharp rise in unemployment will inevitably have some impact on buyer confidence, depressing transactions. At the same time, the downturn threatens to push up repossessions and forced sales, increasing stock on surveyors’ books.”

House building is also expected to drop further. Rics predicts that new housing starts for 2008 are unlikely to be much above 110,000, a figure far lower than recorded during the recession of the 1990’s.

Home building output is set to plunge to a new low in 2009 with new starts expected to fall comfortably under the 80,000 mark.

Rics claims this low level is house building is planting the seeds for even house price volatility in the coming years. It also blows the government's target for building two million new homes by 2016 to the wind.

Mr Rubinsohn added: “A major concern is the massive reduction in the number of new homes now being built.

“It is likely that there will be even fewer new starts in 2009 leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases.

Workplace becoming lucrative for insurance business

By L.M. SIXEL Copyright 2008 Houston Chronicle
Dec. 12, 2008, 10:41PM

It’s annual benefits enrollment season, and companies increasingly are stuffing their packets of offerings with more than just the usual medical, dental and vision care policies.

The workplace has morphed into a popular — and lucrative — place for insurance companies to find new customers. Instead of cold-calling prospective clients at home, agents are showing up at conference tables and lunchrooms armed with PowerPoint presentations to sell cancer insurance, prepaid funeral expenses, various supplemental coverages and other kinds policies, even for pet care.

And employers, eager to provide workers with a wider array of benefits without having to subsidize them, are welcoming them in.

“It’s becoming a bigger and bigger market as employers try to find a way to offer employees value and not incur a cost,” said Jill P. Watson, managing partner of Gallagher Benefit Services, which evaluates insurance products for its corporate clients.

Short-term disability and extra life insurance are the most popular offerings, Watson said.

As companies increase health care deductibles, boost co-pays and eliminate some coverage, the extra policies give workers more tools to prepare for the worst, said R. Kiah Townsend, Houston territory manager for Colonial Life, one of the biggest sellers of what’s known in the industry as “voluntary” insurance.

Full cost
One of the reasons Jessica Montgomery bought the three types of extra insurance the city offers — auxiliary cancer, hospitalization and accident policies — is to make sure she’s protected from the unexpected.

“So many people don’t realize that there are several things that their normal insurance won’t cover,” said Montgomery, administrative assistant for the Houston Film Commission. She pays $69 every two weeks for the extra coverage for herself and her husband.

She ticked off some of the benefits: a $1,000 cash payment on the initial cancer diagnosis, experimental treatment and lodging for out-of-state medical care.

The fear of getting strapped for cash during a medical emergency is what drives city employees to sign up, said acting human resources director Candy Clarke Aldridge.

Employees pay the full cost of the insurance, which is deducted directly from their paychecks, said Aldridge. It has been offered by Aflac since 1994 when the city’s benefits package was revamped.

Aldridge estimates about 35 percent of the city’s 23,000 employees have bought one or more voluntary plans.

‘A mixed bag’
Many of the extra policies make more sense for some workers than others. For instance, a young, healthy non-smoker might get a better deal on life insurance in the open market, said Watson, the benefits services executive. But a smoker with a history of health problems might save money with the one offered on the job.

Some of the products are loaded with commissions, Watson added.

“It’s kind of a mixed bag,” said Steve Alderman, vice president of human resources for South Texas College of Law.

Don’t miss the money
The policies cover expenses that aren’t part of typical health care plans, he said: “But as far as the percentage of people who benefit, it’s relatively low.”

For many employees, the first time they have had someone explain life insurance or disability policies is during one-on-one work-site talks with agents, said Jennifer Daniel, assistant director of voluntary sales for the Principal Financial Group in Des Moines, Iowa, who this year spoke before a meeting of benefit administrators in Houston.

For Principal, Daniel said, those individual counseling sessions are effective, doubling the number of employees who end up buying voluntary insurance to about 60 percent.

Employees also like the fact they can pay the premiums directly from their paychecks. “You don’t even miss the money, and the idea of knowing you have some extra coverage is really good if something does happen,” said Montgomery, who sat down recently with an Aflac representative to review her options.

Personal touch
That personal touch also has worked well for MetLife, whose biggest workplace seller is extra life insurance. Its homeowners and auto insurance products are popular, too.

Increasingly, employees are getting used to buying their financial protection and retirement planning products at work, said Randy Stram, vice president of employee benefit sales for MetLife in Bridgewater, N.J.

A MetLife survey found that 52 percent of employees in 2007 bought their extra life insurance and other policies at the office compared with 46 percent the previous year.

The survey, which was conducted online and on the phone, questioned 1,200 employees and 1,600 employers.

It was during annual enrollment time a couple of years ago that Judi Taliaferro enrolled in a supplemental hospitalization insurance program that would pay her $100 a day for out-of-pocket expenses.

Previously Taliaferro, director of convention services at the Greater Houston Convention and Visitors Bureau, had emergency surgery and wondered whether she could shoulder another hospital stay.

“I felt it was a benefit, and I’m getting older,” said Taliaferro, who pays around $44 a month for the coverage but isn’t sure she’ll renew it for 2009.

lm.sixel@chron.com

The Highlands of Golden Oaks Village Leads Retirement Communities in Poconos with Free Retirement Guide

White Haven, PA (PRWEB) December 8, 2008 -- The Highlands of Golden Oaks Village, one of the finest retirement communities in the highly sought-after Pocono real estate market, is pleased to announce that its FREE 2008 Guide to Remarkable Retirement in the Western Poconos has been warmly received by the market. "We know there are lots of seniors and soon-to-be-seniors that consider themselves active adults and are looking for that special place to retire," said John Herman, CEO of Highlands of Golden Oaks Village. "With all of the homes for sale in PA, our free guide has information about this area's four seasons of recreational activities, championship golf courses and ski areas, and of course our pristine lakes and state parks. In short, the guide has everything an active adult researching retirement communities would need to consider when looking at the Pocono real estate market."

The FREE 2008 Guide to Remarkable Retirement in the Western Poconos is available on the website of Highlands of Golden Oaks Village, which can be found at www.PoconoHighlands.com. Simply fill out the form requesting the guide and you will soon receive all of the information for active adults interested in retirement homes for sale in PA.

About Highlands of Golden Oaks Village:
Pocono real estate doesn't come any picture-postcard prettier or more affordable than the Highlands of Golden Oaks Village. Conveniently located on Route 940 just one mile from I-476 (the PA Turnpike's Northeast Extension) and I-80 near shopping, healthcare facilities and hospitals, The Highlands' combination of energy efficient, low maintenance homes and wooded-view home sites means you get access to homes for sale in PA -- and the retirement of your dreams -- at a price you can afford. Property taxes, insurance and utilities are very inexpensive. With four-season sports, golf, casinos, NASCAR, harness racing, hiking, biking, water sports, on-site fitness center, planned indoor swimming pool and a low cost of living, the Highlands of Golden Oaks Village is Pocono real estate that is everything an active adult could wish for.

Post Office has Christmas covered

By Becca Talbot becca.talbot@consumerchoices.co.uk

The Post Office is increasing its home insurance cover by 10% for the whole of December to ensure customers are fully protected over the Christmas period.

During December, the Post Office (www.postoffice.co.uk) will increase home insurance cover for new and existing customers, to protect against theft over the Christmas period.

The increase will be in affect from Monday, 1 December to Wednesday, 31 December.

The level of cover for Post Office contents insurance is automatically increased, at no extra cost during major celebrations such as Christmas, to ensure that any gifts or extra valuables in the home are covered.

Head of home insurance at the Post Office, Emma Baunach, said: “At this time of year people often have more valuables in their homes than usual. Over Christmas you don’t want to be worrying about whether or not you have enough cover on your home insurance, so we made the extra cover automatic to make sure you are protected.”

New Post Office home insurance customers can also claim £50 cashback when taking out a combined Post Office buildings and contents insurance policy in any UK branch until 31 March, 2009.

For more details on what the Post Office has to offer for home insurance, visit your local branch, go to www.postoffice.co.uk, or call 0800 169 6500.

Chris Eagle, commercial manager at CreditChoices.co.uk said: “The 10% extra cover offered by the Post Office is a nice little Christmas bonus, but if you expect to have very expensive items in your house, it’s essential to check the terms and conditions of your policy to ensure that they are covered in the event of an accident.”

Insure4USA.com Launches Website to Provide Local Provider Comparisons

Insure4USA.com recently announced the launch of their new online service which provides individuals with fast, free insurance quotes from their local insurance representatives.

(PRWEB) November 29, 2008 -- Insure4USA.com recently announced the launch of their new online service which provides individuals with fast, free insurance quotes from their local insurance representatives. Unlike other websites that use nationwide services to fill customer insurance requests, Insure4USA.com aims to provide its users with results from insurance companies that the individual can meet with face-to-face.

The Insure4USA.com website covers most insurance types with auto insurance, life insurance, health insurance, and home insurance being at the forefront of their services. Users simply enter their zip code and fill in a short survey based on the type of insurance they are interested in purchasing.

Auto insurance quotes are available on any vehicle type and rate comparisons are provided to make sure customers receive the best rates locally. In addition, all insurance types (auto, home, life and health) provide discounts that have been established through exclusive partnership programs between Insure4USA.com and local representatives.

"Insure4USA.com aims to add a personal approach to the online insurance market," founder Alex T. stated. "Unlike other services that provide a 1-800 phone number and a website for customers to contact, we provide a local address, a local phone number and even driving directions if they are needed."

It is this personal approach that both propels and separates Insure4USA.com from its much larger and less intimate competition. The company's goal in creating the website was to provide the possible customer-centered experiences in ways that matter to is user base.

"We realized early on that it's difficult to compete with monster-sized insurance company finders that aim to provide traffic to equally monster-sized insurance companies. So, we decided that we would work for the local insurance companies, the ones whose core values remained unchanged and whose customer service and personal approaches have kept them in business for decades," Alex T. added.

In the end, it is the customer who wins, both by receiving excellent rates on insurance and by being able to invest their resources locally with insurance companies that share the common goals of success with the customer.

About Insure4USA
Insure4USA has been offering free auto, health, home and life insurance quotes online since 2008. For more information, visit Insure4usa.com (http://www.insure4usa.com).

Buying foreclosed home can -- sometimes -- make best of bad situation

by Melissa Burden | The Flint Journal
Sunday November 16, 2008, 12:57 AM

You've seen the foreclosure notices posted in the windows of your neighbor's home.

And while they're certainly nothing to gloat about, to many people scouting for a great housing deal at an affordable price, foreclosures pose a boon.

Foreclosure sales continue to drive the local real-estate market and likely account for more than half to 60 percent of the houses selling here, said Mark Dickens, director and chief executive officer of the Flint Area Association of Realtors.

The good news: Year-to-date association sales --ย which primarily cover Genesee County -- are up 18.6 percent (4,782 compared to 4,033).

The bad: The average sales price is down 22.9 percent ($84,773 compared to $109,969 through the same time in 2007), Dickens said.

"Most of these homes are selling for about 60 percent to two-thirds of what their peak value was in 2005," said Randy Haney, broker/owner of Flint Township-based American Associates Inc. Realtors and Builders.

Foreclosures are popular and are attracting the likes of not just investors, but people who you normally wouldn't think of us home buyers.

Someone like Jessica Coblentz, 18, a 2008 Davison High School graduate.

Coblentz works as an assistant for INCA Realty in Flint Township and bought her first home, a foreclosed three-bedroom Cape Cod in Richfield Township, earlier this year.
She closed on the deal right after her graduation open house.

Coblentz said she wasn't looking to buy a home, but came across a foreclosure listing just a few blocks from her parents' house.

She paid $47,500 for the roughly 1,600-square-foot home that needed some cosmetic work. She was able to roll the closing costs into a mortgage totaling about $52,000.

Coblentz may be young, but she knows a deal when she sees it.

The house recently appraised for about $88,000. It had sold for $142,000 in 2001.
Now, while many of her friends are living in apartments, she's paying about $570 a month total -- "pretty much the same as they are," she said -- for a house payment, insurance and taxes.

So how can you find a foreclosure?

One way is to simply look around and pay attention to what's happening in your own neighborhood.

Secondly, filings on homeowners who have defaulted on their mortgages and are heading for foreclosure are listed in publications such as the Flint-Genesee County Legal News.

There also are several Web sites that list foreclosed properties. Realtors also have access to foreclosure listings on the multiple listing service database.

Ann Fotenakes, a real estate broker for Signature Real Estate Ltd. in Flint Township, buys foreclosures herself and said her office runs daily searches through the MLS for about 10 people looking for such buys.

So now that you know where to scout the potential deals, what else should you expect if you're interested in buying a foreclosure?

โ€ข Buyer beware: Not all the houses are in good condition.

Some may have been sitting vacant for six months or longer. And they might have flooded basements or burst pipes, or interiors pilfered and left a mess, area Realtors say.

"They'll take light fixtures. They'll even take things that are new, such as a furnace," said Haney, who lists Countrywide Financial and Wells Fargo Home Mortgage foreclosures.

Haney said in one foreclosure, someone removed half of the kitchen countertops and cupboards.

"(Potential buyers) want to expect there's going to be some expenses," Haney said. "Sometimes it's real obvious."

To safeguard yourself, order an inspection on the property at your own expense. With foreclosures, this generally occurs after the bank accepts your offer.

Despite the horror stories, area Realtors say some foreclosures are nice and need minimal, if any, repairs.

"Just because it's a foreclosure, it doesn't mean it's in bad shape," said Wilson Lahoud with INCA Realty in Flint Township. "Some are in move-in condition, as well."

• You may have to wait longer to get an answer on an offer. Patience is key, Realtors say.

Fotenakes said depending on if a bank owns the property and where the bank is located, clients sometimes wait a few days to up to three weeks to hear whether their offer was accepted.

That differs from traditional owner-occupied sales where you likely hear back from the seller or seller's real estate agent the next day.

• Your offer may not be accepted.

Some of the hot foreclosures are garnering multiple offers, meaning yours might not be the winner.

Lahoud said you should give your best shot with an offer the first time.

That's because, unlike in a traditional sale, a bank doesn't always counter the offer. They may just reject it.

To make an offer, be sure to have a pre-approval letter from a mortgage company or bank saying you can get a loan, or proof of funds if you're making a cash offer.

Lahoud said if you don't have the letter in hand and find something you like, you may have to wait two to three days to get the written pre-approval. And that might be enough time to lose out on a deal.

A cash sale at least may go faster than those that require financing.

Bob Prusinski, 63, of Flint is scheduled to close on a 1,000-square-foot, three-bedroom ranch foreclosure later this month in Flint Township.

Prusinski is paying $17,000 for the house that sold four years ago for $94,000. He said he's rolling another $10,000 in needed repairs into a special 203(k) mortgage offered through the Federal Housing Administration.

Prusinski, a retired postal carrier, said the home needs a new furnace and he'll repair the bathroom and kitchen and paint the interior.

He said the process is taking longer than expected (he put his offer in in early September) because he had to answer numerous questions for the mortgage approval. He also had to get contractor quotes for the repairs, which had to be approved by the underwriter.

"I feel I'm getting a very good buy of the house," Prusinski said. "Secondly, down the road I believe the property I'm buying is going to appreciate after the housing crisis subsides."

Insurance for Brown tops Craig's list of positives

BY BRAD BIGGS bbiggs@suntimes.com
The Bears can feel good that Craig Steltz is one of the most improved players since training camp closed.

The rookie safety stepped in for Mike Brown in the second half Sunday and came up with a big interception in the end zone and generally impressed, a good sign considering Brown's fragile history.
''If Craig doesn't make the interception, who knows,'' coach Lovie Smith said. ''You need your free safety to make some plays like that. Craig did a lot of good things. He's been paying attention, ready for his opportunity, and it was good to see him make plays like that.''

Brown is nursing a right calf injury. He was positive when he left the stadium Sunday and it's not expected to be serious, but any injury involving the veteran warrants close attention. Brown strained his left calf in practice before Week 14 in 2005. He sat out all practices for two weeks and wound up missing the final four regular-season games. Even with the first-round bye, Brown was unable to make it through the playoff game in mid-January.

''[There is] concern because it's happened so many times, but right now Mike just has a calf injury,'' Smith said. ''Mike doesn't have a season-ending injury, so right now I'm looking at it like other injuries that we have. Hopefully, it's not anything that will keep him out for long.''

Any time that Brown misses will put the Bears in an interesting position. Steltz is considered a strong safety, and playing at him at free safety might create issues even though the Bears insist their positions are interchangeable.

Rooting interest
It wasn't Cade McNown announcing that fans who wish to boo should stay home and serenade their televisions, but it was interesting to watch middle linebacker Brian Urlacher twice walk off the field Sunday with his arms raised, signaling for the crowd to bring more boos as the Lions racked up 23 points in the second quarter.

''When you go through adversity a little bit, I see everyone rallying together, being positive, using positive reinforcement,'' Smith said. ''Negative reinforcement has never really worked for me. We don't do it that way. I would just hope that most of the time we'll hear positive reinforcement to help us get through some of those times. That's what a team does.''

Nickel for your thought
Corey Graham stepped aside for Nathan Vasher to reclaim his starting cornerback job, but Graham still got a lot of work as the nickel back and subbing for Vasher against double-tight-end formations. He finished with six tackles, five of them solos, and made perhaps the biggest special-teams play of the game when he downed a Brad Maynard punt on the 1-yard line.

''Corey did some good things,'' Smith said. ''It's still a work in progress. You just don't move to that position [nickel back] and play your best game the first time out, but Corey did a lot of good things like he normally does. He's a good player, and we'll continue to get him involved.''

Tackling the issue
Linebacker Lance Briggs led the team with 11 tackles after coaches reviewed game film, pulling him within one of strong safety Kevin Payne for the season lead. Charles Tillman made eight tackles, and Tommie Harris had three stops and three quarterback hits to go with a tackle for loss and a sack. Urlacher was credited with five tackles.

Rebuilding a home after a fluke flood

By Kathy Price-Robinson
October 25, 2008
Three days before Christmas 2006, as chef Matt Beville was sliding a tray of pastries into the oven at work, he had no idea events were unfolding at his 1924 Burbank home that would displace him for 18 months and lead to a $209,000 whole-house remodel.

The first sign of trouble came when a neighbor called to say that a roofing truck had backed over the fire hydrant in front of Beville's house and a geyser had sprung up. Beville, who is 42 and bought the house when he was 27, recalled saying: "That's cool. I wish I could see it."

A series of follow-up phone calls from the neighbor suggested -- with increasing intensity -- that Beville should come home. When told that water shooting from the sheared hydrant was falling on his house, he thought about the pastries in the oven, which were for a catering job, and asked if the neighbor could shove some towels up against the door sills.

But towels would be useless against what would happen next, which was witnessed by neighbors and later recounted by them to a local TV news station, which aired a report.

A sort of sink hole developed underneath the hydrant, causing it to tilt toward Beville's house and point nearly its full gusher onto the flat roof covering the rear of the structure. Falling inside parapet perimeter walls, which stood a few feet above the roof, the water collected into a pool that became heavier and heavier until, all at once, it crashed through, into the house, and forced its way out through doors and windows, taking out some walls.


Beville still remembers the final call from his neighbor: "The side of your house just blew out."

To begin the repair and rebuilding process, he met with an insurance adjuster and received a list of contractors. He hired one to demolish the rear of the house, which had the most damage. But Beville wanted to find a contractor with a sensitivity to older homes. After asking friends for recommendations, he met and decided to work with Burbank contractor Mark Bethanis on the rest of the project.

"It was a disaster," Bethanis said of the home. Even though he's a fan and restorer of older homes, he thought this one might be beyond salvage. "If Matt had more of a budget, I would have told him to tear it down."

However, the insurance company would not pay for a total rebuild. The first offer was for $126,000, then was raised to $157,000 after Bethanis and Beville pointed out mistakes they said the inspector had made, and then finally to $175,000. He paid for the remainder of the remodel out of his own pocket.

But even if he could have afforded it, Beville probably would not have torn down the house.

"I love my place," he said, pointing out the Spanish-style home's hardwood floors, moldings, barrel ceiling in the living room, arched French window and fireplace covered with vintage Batchelder tile.

Plus, he had come to love his neighbors, and Burbank itself. "Where could I go and get all this?" he asked.

Beville's main goal was to rebuild the back of the house in a vintage style compatible with that of the front, and to repair the front portions that had been damaged. And, as long as he was at it, remodel the kitchen.

Haggling with the insurance company took months, and because the first contractor had removed the home's power panel along with the damaged walls, there was no electricity to run the filter on the backyard pool. The water turned a deep green and ducks moved in.

During the months of waiting, the homeowner and the contractor planned the remodel. Although the 1,360-square-foot home had only one bathroom, situated between the two bedrooms, it was big enough to split into two and turn the master bedroom into a master suite.

Other improvements included bolting the frame of the house to the foundation to give it more stability during earthquakes and adding panels to the walls for the same purpose. The whole roof was rebuilt, with the original clay tiles in the front part of the house put back into place. The exterior was replastered, new gutters were installed, and new landscaping was planted.

To save money, Bethanis installed lower-cost vinyl windows, rather than top-of-the-line wood ones, but he added the full array of moldings, sills and skirts to match the originals.

"It's kind of a nice compromise," Bethanis said. "You want it to look old and function new."

He had new doors made to match the older ones and added crystal-like knobs and metal back plates. For comfort, forced air conditioning and heating were added too.

Bethanis took a lead role in the design and construction of the house, while Beville worked at his job at Canelé restaurant in Atwater Village. Beville recalled the comforting statement his contractor often made: "We can make it work."

In the kitchen, Beville had been happy with the original knotty pine cabinets. But the wall they were attached to got saturated during what he has come to refer to as "The Great Flood of '06," and the cabinets could not be saved. So the whole room was gutted and reconfigured around Beville's prized Viking stove.

Although Beville had a few panic attacks about the colors and materials for the kitchen, he's pleased with how it turned out. The room now has custom-made Shaker-style cabinets, granite counters and a backsplash of sea-foam green subway tile. The floor looks like slate, but is really sheet vinyl, which is easier for the active cook to keep clean.

Beville, who had been living in a rented apartment, moved back into his house in April. While giving a tour of his house recently, he punched and rolled out dough for pizza as two buddies watched sports on TV in the living room.

After the negotiations with the insurance company were complete, Beville said he started to feel better about the whole thing, but the experience is still bittersweet.

"Am I happy with what happened?" he asked. "No. Am I happy with the end result? Yes."

Price-Robinson is a freelance writer.

kathyprice@aol.com

Americans eye bailout, and continue cutting back

By ERIN McCLAM

Relief on Wall Street over the hard-won passage of a $700 billion bailout package for the financial system apparently hasn't yet trickled down to the pubs, storefronts, car lots and malls of Main Street.

Many Americans spent an uneasy weekend wondering whether the rescue would help in time — or at all — and trying to figure out where next to cut back as the economic screws tighten.

Would financing come through for the new washing machine? Could the old car hold out another year? Would a nice dinner out bust the budget?

"People are afraid," said Linda Morrow, who owns a shoe and handbag store in a Dallas mall. "People basically don't know what the future will bring. They're afraid to spend. They want to see what the bailout will do. They're waiting till after the election."

In more than two dozen interviews with The Associated Press across the country over the weekend, Americans described those concerns, from tighter personal credit to worries about small businesses to doubts about simply making ends meet.

Matt Watson, a 41-year-old sales manager at a showroom of motorcycles and all-terrain vehicles in Morgantown, W.Va., said his family has cut back on dinners out and is buying more generic products.

The other day, he grabbed a $5 bill off his dresser and headed to a Walgreen's drugstore for milk and bread.

"I could not buy milk and bread for $5," Watson said, shaking his head in disbelief.

Aimee Robinson needs a $200,000 loan soon for her business, which sells eco-friendly furniture in Seattle, and wonders whether the bailout might ease the way. The interest rate on her store's credit card just jumped to 17 percent from 8 percent.

"Everything came to a standstill" this summer, she said. "It hit me really, really bad."

The bailout plan, quickly signed into law by President Bush after it passed the House by a comfortable margin Friday, will buy bad mortgage debt off the books of staggering banks in hopes of shoring up the American financial system.

It was put together during a harrowing three weeks for the U.S. economy that began with the bankruptcy of investment house Lehman Brothers and a government bailout of insurer American International Group.

The damage has seeped into far-flung corners of the economy. At a company called Tortilla Lady in Flagstaff, Ariz., five women make 1,500 to 1,800 dozen tortillas in an average week, some sold in the shop and others to stores.

For the week of Sept. 15, the week Lehman Brothers collapsed and the crisis took hold, production was only about 1,000 dozen.

"Once this really got into the news and people started understanding what Wall Street meant to them, they've become more conscious of their own budget and the limitation of their budget," said Phebe Faus, an owner of Tortilla Lady.

An AP-GfK poll released last week before the House passed the revised bill found Americans divided on whether they supported the bailout. But a solid majority, eight in 10, said they feared the financial crisis would hit them directly. Many said they were conflicted, lamenting that taxpayers had to step in but believing something had to be done to prop up the economy.

Among that type of adherent is Morgan Cavanaugh, owner of a 75-year-old Irish pub that sits a few blocks from Lake Erie in downtown Cleveland. Standing behind the weathered mahogany bar, he said the bailout stinks.

"I don't believe we should let them off the hook," he said. "Either we pay now or we pay later. To me, it's extortion."

To him it's also necessary: The same day, he was talking on his cell phone to a man who has been trying to buy a suburban bar from Cavanaugh but has not been able to secure a loan.

"It passed," Cavanaugh told the man just after the House vote Friday. "Let's work something out." He said the man planned to try for the loan again and said the prospects were "looking up."

As for business at the bar: Cavanaugh has lowered his drink prices for his customers, a crowd heavy with bankers and brokers. He calls the special the Bankers' Booze Bailout Fund.

Tight credit remains at the heart of the crisis. In a financial climate of fear and mistrust, banks are charging one another much higher rates to borrow money, and they are snapping their wallets shut to Americans.

The bailout package may get the gears of lending moving again, but it hasn't happened yet.

Last year, Pennsylvania auto dealer Bill Rosado's customers had no trouble arranging financing for the cars and trucks they bought. Banks were lined up to provide cash even for people with a risky credit history.

Those days are gone. A customer with decent credit who might have been approved for 100 percent financing not long ago is lucky to get a loan at all today, and even then the interest rate is almost guaranteed to be higher.

"The people with horrible credit, I can justify saying, 'No more," Rosado said. "But this is affecting people whose credit isn't that bad. People with 650 credit scores are being turned down."

The rescue was aimed in part at restoring confidence in the financial markets. As the crisis worsened, stocks took a huge hit, and Americans seeing their stock funds and retirement savings sapped are more reluctant to spend money.

"A lot of people who come here are wealthy people, and they've lost a lot of money in stocks," said Jaime Galvan, who manages a car wash in Long Beach, Calif. "Most of the people, they're concerned. They don't want to spend."

And a turnaround is no guarantee. President Bush has warned it will take "some time" for the full effects of the bailout bill to take hold in an economy that had a world of trouble even before the banking crisis.

In the meantime, Americans are left find ways to cut back even further.

In Dallas, sales assistant Yvonna Vaughan downgraded from Newport cigarettes to less expensive Kools and wonders whether she'll be smoking generics before long.

In Denver, secretary Bernice Adolf pays close attention to the sales at her grocery store and makes spaghetti at home with her husband on Friday night instead of their usual dinners out.

"We're trying to save wherever we can," she said. "I don't think the bailout is going to last too long."

At Zeitoun, a Mediterranean restaurant not far from the Miami airport, owner Samira Marino has noticed everyone is ordering water and more people are sharing meals.

Mike Belo of Columbia, S.C., hasn't put off any major purchases — yet. But he's keeping an eye on his business as a property insurance agent, which has dipped as new home sales have slowed.

"It's hard to get a handle on it," he said of the bailout. "I'm not in favor of bailing out a bank, but I guess if it's the No. 1 bank that offers the money ... we're in a no-win situation, really."

"If I go under," he said, "no one's going to bail me out."

Contributing to this report were Associated Press writers Linda Stewart Ball, Felicia Fonseca, Kelli Kennedy, Page Ivey, Phuong Le, Joe Milicia, Todd Richmond, Michael Rubinkam, Vicki Smith, Amy Taxin and Catherine Tsai.

http://ap.google.com/article/ALeqM5jOzxfNn1jhXErEemMbUQlBdl4F5wD93KM2MG3

More than 1,500 Hurricane Ike evacuees remain in Dallas-Fort Worth shelters

By KIM HORNER / The Dallas Morning News
khorner@dallasnews.com

More than 1,500 Hurricane Ike evacuees are still sleeping on cots at 14 area shelters despite a federal program that was supposed to transition them into hotels and motels.
Many cannot afford to move out of the shelters – despite lodging paid for by the federal government – because they have no money for food and other expenses. Others are having trouble getting approval for hotel rooms from the Federal Emergency Management Agency.

Although thousands of evacuees have made the move to hotels throughout North Texas, many of them are struggling after draining their bank accounts to pay for hotels and food following two hurricane evacuations within several weeks.

North Texas charities have been swamped with requests for food, gas cards and laundry assistance from evacuees at area hotels.

The city of Dallas, which has spent more than $800,000 sheltering Hurricane Ike evacuees, is trying to figure out how to help Gulf Coast residents who either cannot afford to leave a shelter or cannot qualify for FEMA's transitional housing assistance.

"It's a mess," said Kenny Shaw, director of Dallas' Office of Emergency Management. "FEMA needs to come out with a stronger program, in my opinion, and support these people or get them back home."

Some cannot get help because they were homeless in their hometowns; others are illegal immigrants, Mr. Shaw said. Another evacuee was told her renter's insurance should pay that bill, he said.

FEMA spokesman Dean Cushman acknowledged the financial dilemma many cash-strapped evacuees face.

"They're caught between a rock and a hard place," Mr. Cushman said. He said the agency has not provided cash assistance, as it did after Hurricane Katrina, because that disaster left people neck-deep in water with nothing but the clothes on their backs. He advised evacuees to seek help from social-service agencies.

As for evacuees who cannot qualify for assistance, Mr. Cushman said that FEMA needs an address to provide the help. He also said the agency cannot provide hotel rooms to illegal immigrants.

Dallas officials worry that some evacuees will return to a shelter so they can at least get free meals. More than 700 were still at the Dallas Convention Center shelter late in the week – even though some might qualify for hotel rooms – because it provides meals, activities for children, a phone bank, Internet access and a post office.

"The problem everybody's been telling me is, you still need gas and food," said Celethia Edwards of Beaumont, who stayed at the downtown shelter with her husband, five children and extended family. "People are having problems with living expenses. We said it's better to stay here."

Devora Knoxson of Galveston, who also evacuated to Dallas before Hurricane Rita three years ago, said she wanted to find a hotel, but she did not know how to get help.

"If I was in a hotel, at least I would have facilities to take a shower every day," she said.

No agency has an estimate of how many evacuees are staying in North Texas. But area charities have been busy serving large numbers seeking help.

Irving Cares, which usually serves 350 families a month, served nearly 300 families in the last week, mostly people in area hotels.

The charity has provided food that doesn't need to be cooked, said Teddie Story, the agency's executive director. Evacuees also have asked for help with laundry and gasoline, things the charity does not typically provide, she said.

"We're doing what we can to help them," Ms. Story said.

Mia Paul of Port Arthur, Texas, said she has spent all her money paying for food and other expenses.

"When we go home, we don't know how we are going to pay the bills," said Ms. Paul, who is staying at an Irving La Quinta Inn & Suites with extended family.

Joe and Ann Fondren and their 20-year-old son, Chase, of Nederland, Texas, said they were eating one meal a day after paying for several hotel nights. They recently moved to a La Quinta Inn & Suites in Irving, where they can get an additional meal because the hotel provides breakfast.

"We're happy to be here and to be well taken care of," Mr. Fondren said.

While some evacuees cannot wait to go home, the Fondrens were wary after evacuating two hurricanes this month and Hurricane Rita.

"We're tired of evacuating the storms," Joe Fondren said. "We're thinking of moving here."

Faced with staying in Dallas possibly through mid-October, many evacuees said they're trying to make the best of it.

"God has blessed us to be able to have our lives," said Ms. Edwards of Beaumont. "I know we're going through adversity; we'll rise above it if we keep a positive outlook."

Now another British tour operator goes bust as 63,000 stranded XL holidaymakers plead 'Just get us home'

Hundreds of British holidaymakers were stranded in Turkey today after another tour operator went bust.


K&S Travel is the second holiday company to close in four days after the collapse of XL Leisure Group left tens of thousands stuck.


The closure of K&S yesterday meant more than 500 holidays, worth thousands of pounds, were cancelled.

The Civil Aviation Authority was today arranging emergency flights home.


A CAA spokesman said all the K&S tourists - most of whom were in the resort of Bodrum - would get full refunds through the Atol protection scheme.


K&S, which was based in Dalston and also traded as Travel Turkey, organised package tours to the country and chartered flights with Onur Air from Gatwick and Stansted.


The CAA is rechartering planes from Onur to minimise disruption and said tourists should be able to fly home on their original departure date.


Two other travel companies have collapsed in recent weeks, XL on Friday and Zoom Airlines last month. Both blamed the credit crunch and soaring fuel prices.


About 63,000 holidaymakers still did not know how they would get home today after XL's collapse.


The CAA is mounting a rescue operation with more than 22,000 passengers already allocated seats on repatriation flights.


Customers who booked XL packages will get a refund but those with flights only are not covered by Atol.


CAA director of consumer protection Richard Jackson said the rescue operation was a 'massive logistical operation.'


Many families say they have simply been abandoned to fight their own battles. Hundreds have been forced to sleep on airport floors.


As the full scale of the holiday crisis became clear, it also emerged that:


Some 10,000 people not covered by compensation schemes are being forced to fork out sums running into thousands;

Others are being hit with £1,000 surcharges on accommodation because XL has not paid hoteliers;

Families stuck on Greek islands have had to take ferries and wait for hours at airports;
Taxpayers and future tourists could end up paying some of the vast costs of the collapse.
Last night Sir Richard Branson, who runs Virgin Atlantic, criticised the massive rescue 'airlift' being organised by the Government's Civil Aviation Authority.

He said XL's own aircraft, which have effectively been impounded by the firm's administrator, should be used in the operation.

'It does not make sense for those aircraft to be lying idle at UK airports,' said Sir Richard.

'There is enormous pressure in the industry to help with the rescue, which we are happy to do, but it should not be like this in future.'

Ensuring Your Legacy Lives On

(ARA) - You have a lifetime to live. Proper planning can reduce your chances of having to depend on others for financial support and help ensure that you have a legacy to pass on to your loved ones; two of the top worries for seniors.

Working toward those goals isn't as complicated as it might seem. In fact, if you have a savings account, 401(k) or investments, you're already on your way. But that may not be enough. It is important to consider how insurance can help to protect your savings from unexpected costs.

"One of the most common mistakes we see seniors make is to short-change themselves when it comes to life and health insurance coverage," says Scott Perry, president of Bankers Life and Casualty Company, a national life and health insurer focusing on seniors. "A serious illness can eat into even large savings accounts and investment portfolios in a very short time."

Many people fail to realize their risk for illness and the impact that can have on their savings. According to the Centers for Disease Control and Prevention (CDCP), over 30 percent of adults over age 65 fall each year. A study of seniors, age 72 and older, cited by the CDCP, pegged the average health care cost of an injury caused by a fall at $19,440.

The non-profit organization Life and Health Insurance Foundation for Education (LIFE) notes that even when their children are grown, life insurance can still play an important role in preserving a couple's retirement plans.

While many nearing, or at retirement, think they no longer qualify for coverage, LIFE says that's not always so. According to their statistics, Americans, age 60 and older, are among the fastest growing markets for life insurance purchases. The key is to purchase while you are still healthy, and since premiums increase with age, waiting can mean higher rates.

For those at risk of needing care in the future, long-term care insurance can play an important role in protecting savings too. And, while it may seem expensive, it's still much less than the cost of care. According to America's Health Insurance Plans, one year in a nursing home can average more than $50,000, and in some regions, it can cost twice that amount.

"There are many insurance products that people can benefit from," adds Perry. "However, it's important that they take the time to understand what's available, so they purchase a product that meets their needs and ensures protection from an event that could be financially devastating."

Once your plans for the future are made, share them with your children. Bankers' "Aging in America" survey found gaps in perception between elder adults' actual decisions on long-term care issues and younger adults' perceptions of what their parents' viewpoints were.

Misconceptions like these reinforce the need for communication between parent and child, and not just about health care plans. Parents should also share their preferences on how they would like be cared for in the future as well as how they would like to be remembered.

Addressing these issues today can prevent future family conflicts and ensure that your legacy lives on according to your wishes.

For more senior topics, visit www.bankers.com.

Courtesy of ARAcontent

Weather system threatens Caribbean

As Tropical Storm Fay began losing her punch over the Gulf Coastal states residents and visitors in the Caribbean were keeping an eye on Invest 94 in the southeaster Caribbean Sea.

Invest 94 was a tropical wave producing a large area of disorganized showers and thunderstorms.

Atmospheric conditions appeared conducive for some sort of development over the next few days and a tropical depression could form as it moves west to west–northwest at 10 to 15 miles per hour over the eastern and central Caribbean Sea.

Computer models at www.wunderground.com have Invest 94 tracking all over the map with two of the models putting the system near Jamaica and the Cayman Islands.

As for Fay, it was downgraded to a tropical depression, but cities along the Gulf Coast still weren’t in the clear.

Forecasters say the storm could continue to dump six to 12 inches of rain from the Florida panhandle to eastern Louisiana through the next several days.

As a tropical storm, Fay set a record with four landfalls in Florida and was blamed for at least 11 deaths there and another in Georgia.

Though the storm weakened as it traveled inland Saturday, with maximum sustained winds of about 35 mph, cities from Pensacola to New Orleans were still preparing for possible flooding.

"People automatically assume that if it weakens, the hazards go down with it, but in the case of rainfall, it’s not a function of wind speed," said Jamie Rhome of the National Hurricane Center in Miami. "Slow–moving systems dump a lot of rainfall."

At 11 p.m. EDT Saturday, the tropical depression was 30 miles north–northeast of Pensacola and 60 miles east–northeast of Mobile, Ala. It was moving west–northwest at 8 mph.

The forecast indicates the depression could slow in the next few days and possibly stall Monday over southern Mississippi or eastern Louisiana, Rhome said. It was expected to bring heavy rain to southern Alabama and Mississippi on Sunday.

The U.S. Coast Guard in Mobile closed numerous ports and waterways between Panama City in Florida and the Alabama coast to the east.

In Alabama, Gov. Bob Riley declared a state of emergency and officials opened shelters Saturday in the coastal counties of Mobile and Baldwin. Trucks capable of rescuing people from floodwaters were also in place. Utility officials said thousands of people lost power.

In the New Orleans area, which is approaching the third anniversary of Hurricane Katrina, forecasts called for several inches of rain. In St. Bernard Parish, site of some of the worst post–Katrina flooding, emergency officials were handing out sandbags Saturday.

Officials in Slidell, La., said emergency vehicles had been fueled and workers were on call.

Sandbags were also distributed in Ocean Springs, Gulfport and Biloxi on the Mississippi coast. The Air Force Reserve’s 403rd Wing evacuated aircraft Saturday from Keesler Air Force Base in Mississippi to locations in South Florida and Texas. The 403rd includes planes known as "hurricane hunters" that officials said would be available to continue to monitor Fay.

The Gulf Islands National Seashore closed a campground area and four barrier islands to the public.

Thousands of homes and businesses in Florida were inundated with flood waters this week as the storm worked its way north from its first landfall in the Florida Keys and zigzagged across the peninsula.

Fay’s center made its fourth landfall early Saturday about 15 miles north–northeast of Apalachicola, Fla., according to the National Hurricane Center.

Rains and strong wind gusts blitzed Tallahassee, the state capital, for more than 24 hours, knocking down trees and power lines and cutting electricity to more than 12,000 customers.

In southwest Georgia, officials said a boy drowned Saturday while playing in a drainage ditch swollen by 10 to 12 inches of rain.

His death, along with the 11 deaths in Florida, brings the toll from Fay to at least 35. A total of 23 died in Haiti and the Dominican Republic from flooding.

Fay’s wake caused widespread flooding along Florida’s east coast, especially in Jacksonville near the storm’s third landfall.

The Office of Insurance Regulation reported Saturday that roughly 6,700 homeowners filed claims, although only some were because of flooding.

Gov. Charlie Crist has asked the federal government to declare the worst–hit areas major disaster areas.

Fay had been an unusual storm since it was named Aug. 15. After hitting the Keys on Monday, it crossed open water again before hitting a second time near Naples on the southwest coast. It limped across the state, popped back out into the Atlantic Ocean and struck again near Flagler Beach on the central eastern coast. It was the first storm in almost 50 years to make three landfalls in the state as a tropical storm. Its fourth landfall as such was the first in recorded history.

"This is unprecedented in terms of the slow nature of this storm, the large circulation and the fact that it’s impacted probably about 90 per cent of the state with heavy rains and severe weather," state meteorologist Ben Nelson said.

Text message and cannabis cook up an explosive mix

A cell phone text message is believed to have sparked a fireball which razed a house and almost blew up a man who was cooking cannabis oil in his bedroom with the door closed, a court has been told.

Police said Darren Jeffries, 23, was caught in the fireball and ran "smoking from his head" to alert his partner and two children who were in the house.

Detective Constable Daniel MacIntosh said police speculated a text message sparked the fire.

Heavy vapour had formed as the cannabis and alcohol were heated on a small electric element in the Johnsonville house in January. As Jeffries opened his cellphone, the text lit up more than its screen - lawyer Noel Sainsbury said Jeffries "nearly blew himself up".

In Wellington District Court yesterday, Mr Sainsbury said the explosion had turned Jeffries' life around. He had been making the cannabis oil to feed his addiction.

"The good that has come out of that is that the shock - one can only imagine the shock - seems to have brought him to his senses."

He says he has sworn off cannabis. He pleaded guilty to trying to make cannabis oil and recklessly damaging the Philip St house with the fire that also burned his face and hands.

Jeffries, a furniture mover, was sentenced to eight months' home detention, to be followed by alcohol and drug treatment and anger counselling. Insurance covered the $88,000 damage.

Action demanded on Belfast floods

Flood victims in Belfast have been telling Newsbeat they want more help from the local authorities.

It's the second time in 14 months many homes in the city have been flooded.

There was so much water, the drains couldn't cope, forcing raw sewage into homes in the east of the city.

Hundreds of people had to be evacuated and many are still clearing up the mess.

The whole of Neil Shearer's ground floor was flooded.

"We've basically lost the cooker, washing machine, fridge, TV, the sofas and all of my DJ equipment. It's all wrecked," he said.

"We haven't even tallied it up yet but I'd say you'd be talking a couple of grand."

Stacks of furniture and electrical equipment are piled high outside people's homes on Merok Crescent where Neil lives with his mate Sammy.

One of the main issues residents are worried about now is hygiene.

Neil said: "Some of the neighbours in the street have said they've seen rats running about.

"Their concerns are that they've got young kids, you know what I mean?"

And that's what the Blakely family, four doors up, are worried about.

Not only was their street under three feet of rain water, it was covered in sewage too.

It all came through Phillip's back door.

He said: "We've got two young kids here and it was just raw sewage coming in.

"There was excrement floating in it. There was actually faeces and toilet paper floating about. It was just disgusting."

Sewage concern

Five-year-old Maya saw it all. She said: "It looked all brown. It was like all over the kitchen.

"It looked like a dirty old pool, deeper than my brother Jude."
And it's the second time in just over a year Phillip and Joanne have had to mop up this sort of mess.

Joanne is Phillip's wife. She said: "Last year we thought it was a one off, extremely bad weather that couldn't happen again.

"We put it down to bad luck and now 14 months later we can't believe we're sitting in the same position."

Joanne's main concern is the sewage left behind on the streets.

Joanne said: "It is a hygiene issue. How often can you be bleaching the floors and rugs?

"You can't be doing that everyday with two young children."

The Government's promising each house £1,000 in compensation, but many people say that's not enough.

Neil Shearer says they just need more help.

He said: "At the moment, to be honest with you, we're just not happy having to live upstairs for four months basically waiting for the flood water to pour out."

Flooding worry

Many people are worried about their homes being flooded again.

The rains have eased for now, but residents want something to be done in case the bad weather returns.

"We want to see the drains sorted out, even digging them up to see what the problem is," said Phillip.

The Blakelys say they won't be able to claim on their insurance for a third time and are concerned the floods may affect the value of their home.

Joanne says she can't go through all of this for a third time.

She said: "At the end of the day we want to see action not talk.

"It's all very well being given £1,000 compensation but it doesn't really go anywhere near.

"We just want to live in a nice house and keep it that way."

New Housing Bill Makes Substantial Changes to Reverse Mortgage Program

Aug. 11, 2008 – Reverse mortgages were not part of the problem in the current home financing debacle but Congress decided to make some changes, while they were trying to create a bill to stop the slide of the housing market and collapse of mortgage companies. The government has, among other things, raised the allowable limits on these FHA backed reverse mortgages to $417,000, up from about $362,000.

The limit can be increased to $625,000 if the borrower lives in a high housing-cost area.

The Housing and Economic Recovery Act that becomes effective in October “makes it easier and less expensive for seniors to access the cash value of their homes on a tax-free basis through a reverse mortgage, and expands the amount that can be borrowed,” writes Terry Savage, who frequently appears in publications and on television as an expert on personal finance.

Writing in TheStreet.com, August 3, she said:

“Reverse mortgages had nothing to do with the mortgage mess -- they are a safe and easy way for homeowners age 62 and older to maintain control and ownership, while tapping their home equity for tax-free cash.

“Now there will be a higher borrowing level on FHA reverse mortgages -- with $625,000 of home value as a cap, and a $417,000 borrowing limit. Fees will be capped at 2% of the first $200,000 borrowed, and 1% on the balance -- with an absolute maximum of $6,000 in fees.

“These rules apply to FHA mortgages, which insure the lender against the possibility that the homeowners will stick around far longer than anticipated!

“Other lenders provide "jumbo" reverse mortgages for higher amounts, taking larger fees to offset their risk. But there is no risk to the homeowner, who gets the money -- and the house -- for as long as the owner chooses to live there.”

Savage writes, “A reverse mortgage may be the perfect answer for seniors who want to stay in their homes, but have a cash flow problem. They can get a monthly stream of tax-free income, or a lump sum, and it's tax-free. Their ability to access the equity in their home does not depend on their ability to repay, as in the case of a home equity loan.

“Reverse mortgages were largely created for seniors who are cash-poor and house-rich — meaning they have a lot of equity in their homes but little or no savings,” writes Michelle Singletary, a personal finance columnist for The Washington Post.

What Singletary likes best about the new law is that it reduces fees on this type of loan. He also sees new protection for senior citizens in the bill.

New protections for senior citizens

He also points out that “except for title insurance, hazard, flood, or other such products, lenders are prohibited from requiring borrowers to purchase insurance, annuities or other similar products as a condition of getting a reverse mortgage.

“The law also restricts individuals who are originating reverse mortgages from working with, employing or providing incentives to other professionals trying to sell seniors other financial products as part of application process.

“Part of the reason the housing act included a provision for reverse mortgages was out of concern that seniors were inappropriately — and sometimes fraudulently — being sold other financial products.”

In the article carried by ProJo.com, he says, “In some cases, seniors have been encouraged to use the proceeds for their reverse mortgage to buy annuities or long-term care insurance. The Financial Industry Regulatory Authority (FINRA), which regulates the securities industry, has issued several warnings about reverse mortgages, particularly cautioning seniors about doing business with financial professionals who want them to obtain a reverse mortgage in order to fund a particular investment product.”

Many others, however, are not as enthusiastic as Savage and Singletary.

There are a number of problems

Author Dan Solin says, “While reverse mortgages can be a valuable source of cash for seniors, there are a number of problems with them.

“The fees are very high. Typical fees for a reverse mortgage on a $250,000 home can exceed $25,000,” he says.

He also points out that interest charges are added every year the loan remains outstanding.

“While you may not care as long as you get your money, you should realize that the diminution in the remaining equity in your home will affect the money you will receive if you sell your house and the amount of money your heirs will receive upon your death,” he says.

Solin sees the reverse mortgage is “particularly ill-suited” for those who will only remain in their homes for a “relatively short period of time.”

He also cautions that if a seniors financial situation causes them to rely on government programs (like Medicaid), the receipt of proceeds from a reverse mortgage may cause them to fail to continue to qualify for these programs.

He also reminds seniors that a reverse mortgage does not alter your obligation to maintain your home, pay property taxes and insurance.

“Before committing to a reverse mortgage, seek financial counseling,” he says. It is required for FHA-insured reverse mortgages, but even if you are considering private reverse mortgages, it is critically important that you understand the full financial ramifications of these loans.

Another expert that urges caution on senior citizens is Frank N. Darras, who claims to be the nation's leading disability and Long-Term Care insurance lawyer.

Reverse lenders reignite their marketing programs

“When the President signed into law a $300 billion housing bill to help homeowners renegotiate their mortgages, reverse mortgage lenders reignited their marketing programs focusing on seniors, says Darras.

Darras says the intrigue of reverse mortgages has been that as you age, you can have "your house pay you." The convincing argument is that reverse mortgages can be used to pay for living expenses, prescription drugs, health care, or to pay off an existing mortgage.

Reverse mortgages are actually, in legal terminology, Home Equity Conversion Mortgages (HECMs) and are insured by the Federal Housing Administration. HECMs allows folks to tap home equity and not have to make monthly payments. The HECM has been limited to the value reflected in a home's appraisal. The range and loan limits were, before the new law, between $200,160 and $362,790, depending on the location of the home.

Darras says lenders are dangling a golden carrot with phrases like "Seniors may be able to borrow as much as $625K in home equity to use any way they please!"

"Be very careful," warns Darras. "Rising costs on a fixed income can be a dangerous combination. Don't let fear and the lure of an easy solution drive your decision. The new legislation is promising to make it less expensive to borrow but it can cost you in the long run, if you are not careful."

Keep in mind that the amount of your loan will depend on the home's value, location, interest rates and the age of the youngest borrower on the note. Also remember, even though the loan will come due only when you die, sell or move away permanently, it will have to be repaid somehow. Are you setting up a financial disaster that could wipe out your life's savings, your estate and leave heirs with financial obligations they cannot meet?

If you are not sure about taking out that reverse mortgage, wait until the new law comes into affect in October and more protections are in place to protect you.

“These days, the rest of your life can be 30-40 years, so make your decisions carefully, regardless of great marketing, fancy brochures and short-term fixes,” says Darras.

Insurance expert warns Brits over holiday homes

A leading industry expert on insurance has advised Brits to make sure their holiday homes are fully covered.

Public relations manager for the AA, Ian Crowder, has said that too many Brits are forgetting to take out or renew insurance on their second homes.

He has also estimated that a third of all UK households don''t have contents insurance at all and many that do are underinsured.

He said: "It''s important to make sure you''ve got sufficient cover for everything and that you do include everything."

Mr Crowder also advised holiday home owners to exercise common sense.

"If … you''ve left the main window wide open and you go out for the day, and someone comes in and does the place over, you''re not going to get a very sympathetic ear from the insurer," he commented.

Zurich Private Clients discovered in a recent survey that the average holiday home contained valuables worth £15,200.

The latest statistics from the Department for Communities and Local Government showed that 211,000 Brits had second homes abroad in the year between 2005 and 2006.

House Burns Sunday AM

Shortly before 8 am Sunday, Public Safety arrived to flames rolling from the front porch at a Sharpe Street home. The home was a total loss.

It was reported that the occupants tried to put out the fire before calling 911. No one was injured in the blaze that consumed the home. Decatur County Fire and Rescue and volunteers from several stations were called as the heat took it's toll on the Public Safety Officers.

It was the home of Barbara Myrick since 1989. The home where she raised 7 children and 23 grandchildren is now in ashes.

Surrounded by family, all Ms Myrick could do was watch. She told us that she had no insurance on the home, "It got too expensive to insure" she said, "because the house was so old."

Now with nothing but memories, she will start over. Ms. Myrick has been employed at the hospital for 3 years in the housekeeping department. If you would like to help Ms. Myrick please contact her at 246-2443 or 400-6470.

Demographic Profile Germany: Government Policies

The taboos that long paralyzed population and family policies in Germany are disappearing, but it could already be too late to prevent steep demographic decline. The government is looking for ways to cope with an aging population and better integrate the country's seven million immigrants.

Family Policy

The fact that the Nazis pushed German mothers to have as many children as possible during the 1930s and 1940s has cast a shadow over postwar governments willingness to tackle population issues. Even though the birthrate has been clearly sinking since the early 1970s, politicians have been reluctant to intervene for fear of being branded as far-right.


But after over thirty years of neglect, German politicians can no longer ignore population issues. To soften what is likely to be a bumpy demographic decent from the "baby boom" heights of the 1960s, the quickest solution would be to start having more kids - fast. But with more women in the workforce than forty years ago, fewer are willing to sacrifice their careers to start families.


Since 2005, government has tried enable young women to have both - a career and kids. The centerpiece of this new family policy is Elterngeld ("parent money"), a concept taken from successful Scandinavian family policies begun in the 1970s. The German government now pays one parent per household two thirds of their net wage (up to 1,800 euros) while they take up to a year off to care for their baby. Elterngeld is extended by another two months if another parent - usually the father - also wants to stay home.


The German family ministry has also pledged to invest 1.8 billion euros to triple the number of daycare places in Germany by 2013, and give parents a legal right to a daycare place for all children under three years old. Nurseries will also stay open later into the afternoon, whereas they traditionally closed around lunchtime.

Fed falls short

Two years after the mortgage meltdown started, the Federal Reserve finally released updates to its mortgage regulations this week, replacing rules that were so lax and ineffective that the Fed bears significant responsibility for the mortgage debacle and the larger financial fallout.

Unfortunately, the Fed still hasn't gotten at many of the root causes of the problem. In the face of the collapse of IndyMac — the second-largest thrift failure in U.S. history — and the foundering of Fannie Mae and Freddie Mac, one expected more.

The new rules are heavy on regulating mortgage advertising and require income-verification for subprime borrowers. The rules also place some restrictions on when lenders can charge prepayment penalties and require escrow accounts for property taxes and homeowners insurance on some loans.

But the Fed failed to tackle one of the most important players in the subprime market: mortgage brokers.

More than half

The Fed's own report states that 60 percent of loans were originated through mortgage brokers in the past several years. The report candidly acknowledges that consumers "often are unaware, however, that a broker's interests may diverge from, and conflict with, their own interests."

And yet the Fed left the brokers alone.

Particularly problematic has been the abuse of "yield-spread premiums," which gave brokers higher compensation for placing a consumer in a higher-interest, riskier loan. Instead of stamping out this perverse abuse, the Fed withdrew its proposal for even a modest rule requiring brokers to disclose whether they were getting a premium.

The regulations also fail to establish a fiduciary-duty standard for mortgage brokers, with common-sense requirements such as making reasonable efforts to secure a loan advantageous to the borrower considering all the circumstances; safeguarding and accounting for money handled by the borrower; acting with reasonable skill, care and diligence, and following all reasonable and lawful instructions from the borrower.

Ripoffs to continue

Study after study showed that from 55 percent to 61 percent of borrowers had a high enough credit score to qualify for traditional fixed-rate home loans but were steered into riskier subprime loans. Why? In part because mortgage brokers were able to line their own pockets that way. Without adequate new regulations and broker duties, unscrupulous brokers will continue to get away with ripping off consumers.

Other predatory practices stayed out of the Fed's sights too. It didn't ban "negative-amortization loans," which allow the consumer to pay back less than even the interest on the loan each month. Instead, the difference keeps being added to the principal, leading toward a balloon payment that few homeowners can afford.

The Fed also failed to regulate "loan flipping," in which a lender or broker refinances a borrower into a new loan in a short period with little to no advantage to the borrower.

At the height of the mortgage frenzy, the Fed bought the mortgage industry's arguments that it should be left alone. Former Fed Chairman Alan Greenspan even argued in a now-infamous speech on Feb. 23, 2004, that nontraditional loans offer better value to the homeowner.

Greenspan was wrong

The massive market failure of the past two years has revealed just how wrong Greenspan, the Fed and the home-loan industry were.

But even now, as the Fed tries to make amends, it is falling far short of what is needed.

It's up to the states now to fill in the gap and close the loopholes. Legislatures in New York and North Carolina, for example, have gone far above and beyond the Fed's proposals to rein in out-of-control lending practices. Other states should do the same.

Ted W. Lieu represents California's 53rd Assembly District. A Democrat, he is a former chairman of the Assembly's Banking and Finance Committee.

New homes for just £104,996

An innovative new scheme from George Wimpey East Midlands lets househunters move immediately onto the property ladder for just an amazing £104,996. The ‘easystart' scheme means the buyer does not even have to worry about saving up a deposit. They simply secure a mortgage for 75% of the purchase price through Halifax. George Wimpey then provides a rent and interest-free loan on the remaining 25% of the purchase price for up to 10 years. From day one the purchaser owns 100% of their new home for 75% of the price.

The scheme is available on a range of George Wimpey properties at its Poppyfields development in Corby, Northamptonshire. The ‘easystart' prices for homes available under the scheme include the three-bedroom ‘Heather' for just £104,996 and the three-bedroom ‘Davenport' townhouse for £116,996.

"This scheme just couldn't be more straightforward," says Lynne Hartshorn, regional sales and marketing director. "The purchaser owns 100% of the property from day one and is free to make payments during the 10 years period to suit their individual circumstances - this could mean up to three smaller payments, repaying the total amount early or waiting until the end of the period.

"We believe that this is just the sort of simple and effective scheme that people are currently looking for and we're expecting a great deal of interest from savvy buyers."

As an alternative to the ‘easystart' scheme, George Wimpey's ‘easymover' programme provides a range of special incentives on selected properties for first-time buyers, while customers with a house to sell can reserve their new home and then sit back and relax while the housebuilder finds a buyer for their current property - guaranteeing 100% of the market value - and pays the estate agents' fees.

Customers can also take advantage of the leading housebuilder's House 2 Home bespoke moving package comprising free UK removal regardless of distance or size of property, full packing and unpacking service and insurance cover.

Poppyfields is located just over a mile from Corby town centre, home to a wide choice of shops, leisure amenities and schools catering for children of all ages.

For commuters, the development is a short drive from the A14, providing easy links to the M6 and M1, and regular services operate from Corby rail station to the main line at Kettering, putting London just an hour away by train.

Over the next few years, up-and-coming Corby is to undergo a visionary transformation, including a new £60 million town centre with new shopping, leisure and cultural facilities, new schools and colleges and thousands of new jobs. To find out more about the regeneration project, visit Moreincorby.co.uk.

For further details about ‘easystart', including full terms and conditions, visit the Sales Centre, located off Butland Road, Corby, and open every day from 10.30am to 5.30pm, or log on to Georgewimpey.co.uk/easystart.

LGA warns gov plans could create 'eco-slums'

The Local Government Authority (LGA) has warned the government, the proposals for the creation of ten eco-friendly communities could end in the creation of ten 'eco-slums'.

Warning the plans for the development of ten new eco-towns were "seriously flawed", the LGA argues local democracy and planning processes are being by-passed to impose the schemes on an unwilling public.

"The whole planning process is undemocratic. The government are the promoters of this scheme but they are also the judge and jury," said councillor Gillian Brown of Arun district council, when asked about the proposal to build one of the new developments at Ford, West Sussex.

"They will decide whether it will go forward to the next stage. We are just consultees."

The report - Eco-Towns, back to the future? – finds the government has not learned the lessons from the creation of the last generation of new-towns, which included Milk and Beans.

While initially choosing "highly unsuitable locations", eco-towns will also have unelected management bodies to help develop and manage them, effectively neutering the role of local government, argues the LGA.

"Councils are determined to fight their corner because they know only too well that by-passing the planning process will allow developments to be built in isolated areas without the essential facilities needed by people in their everyday lives," said Sir Simon Milton, chairman of the LGA.

"These schemes are set to include up to 50 per cent social housing, but could become eco-slums of the future if they are built without regard to where residents can get to jobs or training."

Plans bypass usual planning process and ride roughshod over locally agreed development plans, argues the LGA, with previously rejected settlements now back on the agenda, having been repackaged as eco-towns.

"If eco-towns become dormitory towns with poor public transport connections, any carbon reduction achieved by the design of home and community facilities will be more than offset by people driving miles to buy a loaf of bread or take their children to school," argued Mr Milton.

"Added to that, developers are concerned that the highest criteria for zero-carbon homes could add £30,000 to building costs. Housing minister Caroline Flint has admitted that the new homes could be built at a much lower standard, little different to those set for all new development.

"Without local councils being involved in their development, the future looks bleak for eco-towns and for those who will have to live in them."

Floods rebuilding effort goes on

A year on from the floods that devastated swathes of the UK, people in the worst-hit areas are still trying to rebuild their homes and lives.

The flooding in June and July 2007 forced thousands of people from their houses, prompting the "biggest recovery operation since the Second World War", according to Floods Recovery Minister John Healey.

While the majority of people have managed to return to their homes in the 12 months since the disaster, more than 4,700 households are still in temporary accommodation, caravans or the top floor of their house.

One of the worst-hit places in the UK was Hull which was inundated on June 25 last year following heavy rain. On the Orchard Park Estate, residents remain relatively positive although many have lived in caravans for nearly a year while their homes are refurbished or partly rebuilt.

Former hospice worker Jean Wright, 71, has lived on the estate in Hull for 43 years but has been in a caravan with her husband Alan, 76, since the floods.

She said: "I was lucky to have contents insurance but work only started on my house about two months ago. I kept ringing up my insurer and eventually when I told them I could take no more they sent one of their men out to me. From there the work started on rebuilding my home."

In the village of Toll Bar, just north of Doncaster, many streets are still crammed with contractors' vans as work on dozens of homes continues. On the special caravan park built by the council to house around 50 families whose houses were devastated, around half of the temporary homes are still occupied.

In Tewkesbury, Gloucestershire, flood campaigner Julie Irwin said her partly-refurbished house felt "like someone else's home", after spending 10 months in a caravan with her husband and three children.

Ms Irwin, 43, who created a range of Christmas cards designed to remind Gordon Brown of flood victims, said she still felt "displaced" after six weeks back in her home. And she warned: "We have to stop building on the floodplain. I'm not scaremongering, just being realistic."

Around 500 families in Gloucestershire are still living in temporary accommodation. The majority of those are in Tewkesbury, whose historic Abbey surrounded by water became a symbol of last summer's floods.

Obese man fetes birthday on bed

Mexico's Manuel Uribe, once the world's most obese man, celebrated his 43rd birthday on Wednesday with a very short trip outside his house. In only his third outing in six years, Mr Uribe, sitting on his huge reinforced bed, was dragged outside his garage bedroom and onto the pavement outside his house in Monterrey in northern Mexico. Presents of suckling pig and lamb arrived.

Still weighing the size of three hefty men, Mr Uribe sat on his bed wearing only a bedsheet, drank a beer and chatted to his mother, girlfriend and neighbours in the cool evening air, waiting for a cake.

"I'm happy that it is my birthday," he told reporters interviewing the man who weighed 324 kilos in May after losing 235 kilos since March 2006 on a diet of grapefruits, egg-white omelets, fish, chicken and vegetables.

Mr Uribe is still unable to move his swollen legs and his dream is to walk again and visit the mountainous countryside around Monterrey. He had spent the 1990s eating pizzas and burgers in the United States where he worked as a computer repairman. Addicted to junk food, he eventually tipped the scales at 560 kilos back in Mexico, binging on greasy tacos.

Friday 13th not more unlucky
Unlucky for some? Dutch statisticians have established that Friday 13th, a date regarded in many countries as inauspicious, is actually safer than an average Friday. A study published yesterday by the Dutch Centre for Insurance Statistics (CVS) showed that fewer accidents and reports of fire and theft occur when the 13th of the month falls on a Friday than on other Fridays.

"I find it hard to believe that it is because people are preventatively more careful or just stay home, but statistically speaking, driving is a little bit safer on Friday 13th," CVS statistician Alex Hoen told the Verzekerd insurance magazine.

Manhole memo prompts mutterings
Mumbai city officials are upset by an American warning about the risks of falling into manholes in India's commercial capital during the monsoon season.

An item posted on the US consulate website said that municipal workers in Mumbai sometimes open manhole covers at times of heavy flooding and then leave them unattended and unmarked.

"It's possible that you could inadvertently step into an open manhole," said the warning, issued after the monsoon rains arrived at the weekend.

The Brihanmumbai Municipal Corporation rejected the statement, and said it had e-mailed the US consulate stating it had cast the city in a bad light. Elizabeth Kauffman, speaking for the consulate, said they did not mean to hurt anyone's feeling. The consulate has since added a single sentence to its online advisory, saying open manholes are sometimes marked with tree branches.

Jail break foiled by air vent
A woman who attempted to escape from jail in Sydney had to be rescued by police after she became stuck in an air conditioning duct, police said yesterday. The 22-year-old woman had just been refused bail by a Sydney court when she attempted the escape, but then spent about an hour stuck in the air vent before she was rescued.

Police in the New South Wales state said the woman would now face an extra charge of attempting to escape.

'Spiderman' defends skyscraper climb
The man known as the French "Spiderman" bristled at accusations his feat of scaling a New York skyscraper encouraged novice copycats and said the act of "free speech" was a tribute to the city.

"This was not about, 'Alain Robert is climbing the building.' This is a fight against global warming," the climber, Alain Robert, 45, told reporters outside New York State Criminal Court, after appearing briefly before a judge on Wednesday.

Mr Robert scaled the 52-storey, 348-metre skyscraper last week, and six hours later another climber, Renaldo Clarke, made an apparent copycat ascent to raise awareness of malaria that was broadcast live on television. Both men appeared before separate judges on Wednesday on misdemeanour charges of criminal trespass and reckless endangerment as well as disorderly conduct, a violation. The charges carry a maximum penalty of one year in jail.

Robert has climbed more than 80 skyscrapers and landmarks including Chicago's Sears Tower and Taipei 101 in Taiwan, the world's tallest building.