Archive for February, 2009

Routine credit checks by employers screening job applicants may not be so commonplace in the future if several state legislators have their way.

Lawmakers in Hawaii, Connecticut, New York, Missouri and Texas, as well as the Obama administration’s acting chairman of the Equal Employment Opportunity Commission, have criticized unrestricted credit checks that unfairly rule out job candidates.

According to a USA Today story, roughly 43% of U.S. employers review job applicants’ credit reports for late payments on mortgages, rent, credit cards or student loans, which some argue has nothing to do with a job applicant’s ability to perform a job. Credit screening has jumped in the post-9/11 era, but in this economic slump, millions of laid-off workers are desperate for a job.

Two of the proposed bills would require employers to demonstrate that such checks were essential for hiring. Credit screening is most frequently done for bank teller positions, cashiers and others working in financial services jobs, but many times, it’s also done routinely.

What do you think about an employer checking a job candidate’s credit report? Do you think it’s important for an employer to have this information, or does it depend on the type of job that’s involved?

When you shop for a used car, it can be like venturing into unknown territory, not knowing the history of the car or whether it’s been in accident.

Now, a new National Motor Vehicle Title Information System (NMVTIS) lets car buyers type in a Vehicle Identification Number (VIN) to quickly check a car’s title, odometer reading and other details about its previous life.

Car sellers have plenty of incentive to rebuild a wreck on the cheap and then sell it to unsuspecting buyers for more than the car’s worth. A quick or shoddy repair job can also endanger the safety of drivers who are unaware they’ve just purchased a totaled or salvaged car that was sold at auction and then rebuilt improperly.

According to an MSNBC story, 37 states are now participating in the NMVTIS database. Three states ⎯ California, New York and Pennsylvania ⎯ contribute to the database but don’t permit residents to access it. “Critics say these states don’t want to lose the millions of dollars they now make from selling this data to private companies like CarFax and AutoCheck,” MSNBC reported.

I’m going to type in my car’s VIN number and see what comes up.

Today’s economy forces people to make concessions at every turn — and weddings are no exception. The countdown is on to “wedding season,” but the landscape of the wedding receptions in 2009 will probably look a lot different than it has in years past.

Over-the-top fairytale weddings are quickly becoming another casualty of a weakened economy. Bubbling brides-to-be all over America have to put their dreams of wedding-day grandeur aside in the face of cold, hard numbers.

CNN.com recently profiled a number of brides from across the country who ditched their dream wedding plans on account of the economy. Whether due to unexpected layoffs, or just reined-in budgeting, all of the couples had to cut back, and in some cases completely cut out, aspects of their weddings they previously thought were a given — like guest lists exceeding 250 people. Some couples chose one big item over another: an expensive photographer instead of a fancy reception hall, or cute cupcakes to replace an overpriced wedding cake.

While the thought of skimping on their “big day” might seem heartbreaking, all of the brides CNN talked to agreed that the main point of the day is to celebrate the marriage — not the wedding. If this is the “back to basics” America everyone’s talking about, I say, “cheers… to the bride and groom.”

Has the recession changed your wedding plans? Are you keeping all of the frills but fewer guests? All of the guests but fewer frills? Or are you sticking to your original big blowout plan?

One person’s trash is another person’s treasure — or in the case of foreclosed homes, one person’s tragedy can be another’s lucky day. U.S. News & World Report noted that in the third quarter of 2008 there were more than 750,000 foreclosure filings on U.S. properties. According to RealtyTrac, this is a 71% increase over the same period just a year earlier.

If you’re in the market to buy property, the number of foreclosures available at lower prices just might seem like the deal of a lifetime. While you can often purchase foreclosed properties at below-market value, there are a number of costly mistakes you’ll want to avoid. The top 6 mistakes of buying foreclosed homes, according to U.S. News, include:

1. Trying to buy a foreclosed home without the help of an experienced agent
2. Relying on real estate agents for legal advice instead of a real estate attorney
3. Expecting the foreclosed property to quickly increase in value after the purchase
4. Becoming blinded by a low sticker price and forgetting that most foreclosures require substantial (and costly) repairs
5. Trying to search all foreclosures at once rather than targeting a specific location
6. Assuming banks will accept any offer

For more on the pros and cons of foreclosure purchases, see Should You Buy a Foreclosed Home?

According to the News Tribune, Harvard Professor Elizabeth Warren thinks mobsters are envious of the power that student loan debt collectors wield. Federal student loan companies have the ability to garnish a borrower’s wages, seize Social Security or disability payments and even tap into your personal bank account (without a court order) if you don’t make payments on your student loan. It seems that loan companies benefit more when students default on their loans.

Private student loans are considered a private debt, and debt collectors in those cases don’t have quite as much power as those pursuing payment on federally funded loans. Private lenders can garnish your wages if you bring home more than $175 a week, but Social Security and other benefits are exempt from private debt collection.

Of course, it’s always better to make your payments, but should you run into tough financial times, try to work out payment arrangements with your student loan lenders to avoid defaulting.

Much the same way many Americans are taking a closer look at the way we spend our dollars, so too are the businesses looking to lure (or keep) us spending the dollars we do have in their establishments. In this new economy, no marketing tactic is too base, no idea too outlandish, even if it means turning a brand it’s taken years to build on its heels to remain a viable factor in our budgets.

We began cutting back on recreational shopping, so retail stores respond with a state of seemingly perpetual sales. We started driving less, and prices at the pump took a nosedive. Even car dealers chose to “assure” us not to be afraid to buy a new car; we can just return it if we lose our income — no harm, no foul.

Even Starbucks, a company known for catering to coffee aficionados looking for more than the average cup of joe — and previously willing to pay for it — quickly learned how much things have changed. The days of throngs of customers stopping by for their daily grande-half-caf-skinny-latte fix are proving to be a thing of the past. For many, that daily coffee run was among the first line items to hit the cutting-room floor, and the coffee-brewing giant has definitely felt the effects. Their business has dropped by 10 percent in the first quarter.

So to stay alive, a company built on coffee elitism is taking its cues from an industry designed for the Average Joe: fast food. That’s right, the house that yuppiedom built is willing to sully its reputation by offering value meals. (I’m sorry, discounted “pairings.”)

Starting March 3, instead of a $4 designer coffee, Starbucks fans can get a coffee and breakfast item or “artisan” sandwich for around the same price.

This latest development just seems like another sign that the economy has come full circle and shows how far we’ve moved away from conspicuous consumerism back to practical consumption.

What’s your take on Starbucks’ attempts to relate to the needs of consumers today? Will value meals lure you back to Starbucks? Did you ever leave?

It may be galling to think that those banks involved in subprime lending, which led to massive foreclosures, sharp drops in state tax revenue, a credit freeze and even today’s recession, may ask again for taxpayer-funded handouts, but city and state government leaders aren’t sitting idly by.

Ticked off officials trying to get compensation for homeowners and communities have filed a string of lawsuits against lenders involved in the subprime lending frenzy of the last few years.

• The Memphis City Council and Shelby County Board of Commissioners are considering a class-action lawsuit against alleged predatory lenders who participated in what’s being called “reverse redlining.” Reverse redlining offers only high-cost loans to targeted minority neighborhoods. The practice is illegal.t
• The city of Baltimore is involved in a similar effort and filed a federal lawsuit last month against Wells Fargo Bank. The city claims that the bank’s practices resulted in bad loans and mass foreclosures.
• The city of Birmingham, Alabama, has filed a lawsuit against Wells Fargo, Regions Bank and Countrywide Financial. The suit contends that the lenders violated the Fair Housing Act by engaging in predatory lending practices, causing the city to lose tax revenue due to foreclosures and forcing it to spend money to maintain or demolish abandoned properties, deal with increased crime and spend more on police and fire protection.
• Pennsylvania’s Attorney General reached a $150 million settlement with Countrywide for mortgage relief and cash assistance for state residents following an investigation into subprime mortgages sold by the firm. The investigation determined that Countrywide engaged in deceptive and misleading practices, including bait-and-switch tactics and disclosure omissions.
• The city of San Diego filed a lawsuit in October alleging that Washington Mutual (now taken over by JPMorgan Chase) practiced unlawful subprime mortgage lending practices. The city also sued Countrywide Financial earlier last year. The state of California filed a similar suit against Countrywide with 10 other states.
• Similar court cases are popping up around the country, including Cleveland, Texas and Tennessee.
• The NAACP has filed a landmark lawsuit alleging racial discrimination in subprime home mortgage lending against 15 major lenders, including Ameriquest Mortgage Co, Chase Bank USA, Citimortgage, GMAC Mortgage Group, JP Morgan Chase & Co, and SunTrust Mortgage.

If you were the sitting judge in one of these cases, how would you decide the case, and how do you think those bringing the lawsuits should be compensated?

Is it time to take advantage of a crashing housing market? If you ask around, it seems two schools of thought are emerging regarding the right time to buy a new home. If you have the means to purchase a home, some believe there’s no time like the present, whereas others are banking on deeper home discounts further down the road.

While it may seem counterintuitive in today’s economic climate — one rife with foreclosures and a skyrocketing unemployment rate — home prices are actually the most affordable they’ve been since the National Association of Realtors started measuring home affordability in 1970 (the Affordability Index is calculated based on home prices, mortgage rates and family income, and their relationship to each other).

If you’re in a position to buy a home and are looking for more than friendly opinions on the matter, MarketWatch.com’s Amy Hoak outlines “Five Reasons To Buy a Home This Year”. She points to first-time homebuyer perks like a $7,500 tax break (which could go up to $15,000 in the new stimulus package) and sellers desperate to move inventory and very willing to negotiate as reasons to jump into the housing game feet-first.

At the opposite side of the spectrum, Ms. Hoak also shares “Five Reasons Not to Buy a Home This Year”. She cites an unstable job market and housing prices that are predicted to continue to fall for at least the immediate future, and most likely through 2011, as justification for unsure buyers to hold back for a little bit longer.

Debt consolidation is one of the best ways to get excessive debt repayments under control. Consolidating all of your debts into a single monthly payment with a lower interest rate makes it easier to pay what you owe. As long as you can stop taking on new debt after consolidating existing debt, a debt consolidation loan can improve your credit score. Here are three big benefits of debt consolidation:

1. One monthly payment. If you’re currently trying to keep track of multiple credit card and loan payments, it can get complicated. When you have to pay several different bills each month, it’s easy to miss a due date or forget one completely. Consolidating each of your debts into a single payment will eliminate this problem.

2. Lower interest rate. When you consolidate multiple debts with various interest rates, you can usually get a lower interest rate than what you’re paying on the accounts separately. The interest rates on your existing debt can fluctuate throughout the term of the loan, while consolidation loans typically feature a fixed interest rate until the balance is paid in full.

3. Reduced stress levels. Anyone who’s ever experienced debt knows it can trigger a range of emotions. From depression and anger to anxiety and insomnia, debt is a monster that can overshadow many aspects of your life. Consolidating your debts and making payments more manageable will ease the strain and improve your mental outlook.

Everyone makes financial mistakes from time to time. The important thing is to learn from them. If you use a consolidation loan to manage your finances, don’t let your credit card use get out of hand or you’ll find yourself in worse shape than you were before you got the debt consolidation.

The job-loss numbers in America are staggering. Every day, more companies announce layoffs, only increasing competition for the positions that are available. Job hunters need think creatively if they want to rise to the top of the resume stack.

Try these four job-hunting tricks to put yourself ahead of the pack:

1. Pull out all the stops. Aggressive job hunters may want to take a cue from Joshua Persky. He’s strolled New York City’s streets wearing a sandwich-board resume declaring “Experienced MIT Grad for Hire.” While it may seem a bit extreme, his stunt worked! He’s now employed as a senior manager at accounting firm Weiser LLP, thanks to a recommendation by a recruiter who saw him in all of his sandwich-board glory.If nothing else, Persky’s approach shows us that no tactic is too “out there” when looking for employment — and that creativity counts. If you’re not ready to parade around town wearing your resume, try hand-delivering it to businesses instead. This will give hiring mangers the opportunity to match an actual person with a name, setting yours apart from an inbox full of faceless resumes.
2. Use your social network page as a business networking platform. It’s important to put your best foot forward, even online. But in addition to tailoring your page as an interactive resume, take the opportunity to “friend” business acquaintances, former colleagues or anyone else who can help you with job leads and recommendations.
3. Check out alternative job boards. Websites like CareerBuilder and Monster are great resources for job hunters, but be aware that everyone else is looking there too. Instead, try Craig’s List or company websites where you’d like to work.Also, look into job boards specific to your industry, like MediaBistro.com for media industry professionals. From teaching to healthcare, construction to fashion, a simple Internet search will reveal job boards in many professions.
4. Make a video resume, and bring your image into the 21st century. If a picture is worth a thousand words, then a talking picture is priceless. A video resume is a great option to explore if you’re confident you can pull off a dynamic, professional-looking piece that will boost your employment opportunities.