Buyers who are considering the purchase of a condominium should inspect the health of the home owner’s association before they close.
The seller should provide the buyer all financial documents relating to the association in time for an attorney for the buyer to review them before closing.
Here’s some advice from Leonard Baron, professor of finance at San Diego State University, about the information that the seller should consider:
Does the association budget include money for operating expenses such as water, lights, elevator maintenance, and landscaping?
Is there extra money set aside in a reserve fund for long-term maintenance? If there is an outside reserve study, that should be provided. If not, there should be adequate money in the reserves right now to cover 50 percent of the estimated cost of repairs over the next 30 years.
Do the condo’s expenses exceed revenues due to a high foreclosure rate or other reasons that owners’ debts go unpaid?
If there is a shortfall, does the association have a plan besides cutting back on services for making it up?
Source: The Wall Street Journal, June Fletcher (10/17/2009)
Wednesday, October 21, 2009
Tuesday, October 20, 2009
Texas Stadium Demolition
The city has moved forward with plans to demolish Texas Stadium via implosion, which was determined to be the safest way to remove the structure.
Dallas-based Weir Brothers was awarded approximately $5.9 million to implode the iconic stadium. The company will help ensure that the city’s environmental stewardship goals are satisfied. Included in these initiatives is a directive for 95 percent of the concrete and steel to be recycled.
The Texas Department of Transportation is leasing the stadium property for a staging area during reconstruction of the adjacent highways. Notice to proceed with the demolition is expected this month. Preliminary scheduling places the implosion in early 2010, with a completion date of next July.
Monday, October 19, 2009
Stricter Noise Guidelines to Help Ensure a More Peaceful, Quiet City for Irving Residents
To help give Irving residents a more peaceful and quiet environment in which to live, the city has strengthened its noise guidelines. New language allows the Police Department to provide enhanced enforcement of several ordinance clauses.
Highlights of the enhanced guidelines include: •Prohibiting commercial vehicle idling in excess of 15 minutes within residential areas or within 300 feet of a residential structure.
•Prohibiting devices that cause vibration beyond the boundary of the source property.
•Limiting construction and repairs generally between 6 a.m. and 9 p.m. on weekdays, and between 7 a.m. and 8 p.m. on weekends.
•Testing of emergency signals only between 7 a.m. and 9 p.m.
“Our goal is to provide the public with a greater understanding of the ordinance and to offer a more comprehensive list of prohibited conduct,” said Police Chief Larry Boyd. “We are hopeful that the enhanced ordinance will be a more effective tool for law enforcement.”
Additional changes to the ordinance included the elimination of outdated language. Violations of any ordinance clause may result in a fine.
Highlights of the enhanced guidelines include: •Prohibiting commercial vehicle idling in excess of 15 minutes within residential areas or within 300 feet of a residential structure.
•Prohibiting devices that cause vibration beyond the boundary of the source property.
•Limiting construction and repairs generally between 6 a.m. and 9 p.m. on weekdays, and between 7 a.m. and 8 p.m. on weekends.
•Testing of emergency signals only between 7 a.m. and 9 p.m.
“Our goal is to provide the public with a greater understanding of the ordinance and to offer a more comprehensive list of prohibited conduct,” said Police Chief Larry Boyd. “We are hopeful that the enhanced ordinance will be a more effective tool for law enforcement.”
Additional changes to the ordinance included the elimination of outdated language. Violations of any ordinance clause may result in a fine.
What's Ahead For Mortgage Rates This Week: October 19, 2009
Mortgage markets worsened last week on better than expected economic data, causing mortgage rates to rise.
Last week was the third consecutive week that mortgage rates moved higher and, since touching a multi-month low in early-October, conforming mortgage rates are up by about a half-percent.
It's likely rates will continue to rise, too. That's because the same force that held rates down for so long is now the force pulling them up -- expectations for the U.S. economy.
Over the last 6 months, it wasn't clear in what direction the country was headed. The housing sector has been gaining in strength, but the rest of the economy has been a question mark.
Last week put an end to some of those questions:
•Retail Sales posted stronger-than-expected results
•Consumer Sentiment matched September 2008 levels
•Jobless and continuing claims fell below consensus estimates
Expectations for the U.S. economy are changing on the fly. As a result, stock markets gained last week and mortgage markets lost.
This week, rates could move higher still. There are an unusually large number of key economic reports including on housing and inflation, plus a handful of speeches from key Federal Reserve members.
With each positive announcement, mortgage rates should rise.
Last week was the third consecutive week that mortgage rates moved higher and, since touching a multi-month low in early-October, conforming mortgage rates are up by about a half-percent.
It's likely rates will continue to rise, too. That's because the same force that held rates down for so long is now the force pulling them up -- expectations for the U.S. economy.
Over the last 6 months, it wasn't clear in what direction the country was headed. The housing sector has been gaining in strength, but the rest of the economy has been a question mark.
Last week put an end to some of those questions:
•Retail Sales posted stronger-than-expected results
•Consumer Sentiment matched September 2008 levels
•Jobless and continuing claims fell below consensus estimates
Expectations for the U.S. economy are changing on the fly. As a result, stock markets gained last week and mortgage markets lost.
This week, rates could move higher still. There are an unusually large number of key economic reports including on housing and inflation, plus a handful of speeches from key Federal Reserve members.
With each positive announcement, mortgage rates should rise.
Friday, October 9, 2009
~Tips for Homeowners With Pets When Facing Home Foreclosure~
If you are facing home foreclosure and you have pets, here are some tips to help you relocate with your pets or find other safe placement for them. Never leave pets behind when you vacate your home!
Take Your Pets With You or Find Them a Safe Place to Stay:
•Take your pets with you when you vacate your home; they will not survive if abandoned in the home or set loose. In addition, the comfort and companionship of pets can provide therapeutic benefits to family members by easing the strain of moving to a new residence.
•Follow these steps to find safe placement for your pets if you are unable to vacate your home with them:
-Ask family, friends and co-workers if they will care for your pets while you relocate.
-Ask your veterinarian if you can receive low-cost boarding for your pets, or set up a payment plan for boarding costs, while you relocate.
-If you cannot find temporary placement for your pets, visit www.petfinder.com to search for animal shelters and animal rescue organizations in your area where you can surrender ownership of your pets and which do not euthanize adoptable animals.
This will provide peace of mind that your pets will be safe until they are adopted into a new home. Some shelters and organizations may offer to house your pets for a period of time (60 days, for example) at no cost, or at a reduced cost, while you find new housing, so you can be reunited with your pets. If you do not reclaim your pets within the time period, they may be placed for adoption. Always ask if this is an option.
-You also can surrender your pets to your local open-admission animal shelter, but be advised that open-admission shelters are required to accept all animals (including strays), and the adoption of your pets cannot be guaranteed. Thus, if the shelter is overcrowded, it may be forced to euthanize your pets.
Don’t Leave Pets Behind:
•Never vacate your home and leave pets behind or set them loose. It’s inhumane and may be illegal.
-If you leave pets indoors or release them outdoors, state criminal animal-cruelty laws may apply (e.g., abandoning or neglecting your pets), even if you believe you have left sufficient food and water for your pets.
-If you leave pets behind and have arranged for someone to periodically check on them, you may still be in violation of criminal animal-cruelty laws. In addition, when the mortgage lender takes possession of the home, your pets will be removed by the local animal control agency, which will leave your pets at risk of an uncertain future that may include euthanasia.
When faced with foreclosure, please remember to provide for your pets to ensure that they are safe and that you do not face a criminal investigation and possible criminal charges for abandoning or neglecting them. By following these simple steps, this will help you, your family and your pets have a better future.
Take Your Pets With You or Find Them a Safe Place to Stay:
•Take your pets with you when you vacate your home; they will not survive if abandoned in the home or set loose. In addition, the comfort and companionship of pets can provide therapeutic benefits to family members by easing the strain of moving to a new residence.
•Follow these steps to find safe placement for your pets if you are unable to vacate your home with them:
-Ask family, friends and co-workers if they will care for your pets while you relocate.
-Ask your veterinarian if you can receive low-cost boarding for your pets, or set up a payment plan for boarding costs, while you relocate.
-If you cannot find temporary placement for your pets, visit www.petfinder.com to search for animal shelters and animal rescue organizations in your area where you can surrender ownership of your pets and which do not euthanize adoptable animals.
This will provide peace of mind that your pets will be safe until they are adopted into a new home. Some shelters and organizations may offer to house your pets for a period of time (60 days, for example) at no cost, or at a reduced cost, while you find new housing, so you can be reunited with your pets. If you do not reclaim your pets within the time period, they may be placed for adoption. Always ask if this is an option.
-You also can surrender your pets to your local open-admission animal shelter, but be advised that open-admission shelters are required to accept all animals (including strays), and the adoption of your pets cannot be guaranteed. Thus, if the shelter is overcrowded, it may be forced to euthanize your pets.
Don’t Leave Pets Behind:
•Never vacate your home and leave pets behind or set them loose. It’s inhumane and may be illegal.
-If you leave pets indoors or release them outdoors, state criminal animal-cruelty laws may apply (e.g., abandoning or neglecting your pets), even if you believe you have left sufficient food and water for your pets.
-If you leave pets behind and have arranged for someone to periodically check on them, you may still be in violation of criminal animal-cruelty laws. In addition, when the mortgage lender takes possession of the home, your pets will be removed by the local animal control agency, which will leave your pets at risk of an uncertain future that may include euthanasia.
When faced with foreclosure, please remember to provide for your pets to ensure that they are safe and that you do not face a criminal investigation and possible criminal charges for abandoning or neglecting them. By following these simple steps, this will help you, your family and your pets have a better future.
Thursday, October 8, 2009
Ways To Reduce Heating Costs
Furnace
The furnace or boiler is the largest energy user in most homes.
•If health permits, keep thermostat at 68°F or below.
•Lower thermostat at night and when you're gone (55°F lowest setting).
•Check the furnace filter once a month during the heating season. Change or clean when dirty.
•Have a professional tune-up of your heating system every other year.
•Replace your older, 60% efficient furnace with one of at least 90% efficiency.
The furnace or boiler is the largest energy user in most homes.
•If health permits, keep thermostat at 68°F or below.
•Lower thermostat at night and when you're gone (55°F lowest setting).
•Check the furnace filter once a month during the heating season. Change or clean when dirty.
•Have a professional tune-up of your heating system every other year.
•Replace your older, 60% efficient furnace with one of at least 90% efficiency.
Wednesday, October 7, 2009
Preparing your Home for Sale: Weekend Projects to Get Your Home in Tip top Shape!
There are loads of things that need to be done when you’re selling your home. And sprucing it up should be on the top of the list.
But what should you tackle yourself and what should you leave to the professionals? A good rule of thumb is to call in the help of a professional when dealing with gas, electricity and plumbing. Otherwise, rolling up your sleeves and tackling a few of those neglected household projects can help draw attention to your home and get it sold.
Great Weekend Projects
1. Sand and stain the deck - A weathered, faded deck sticks out like a sore thumb. On the other hand, a freshly stained, clean deck can go a long way at sprucing up your outdoor living space.
2. Repaint the trim and shutters - Curb appeal is a huge selling point for any home. After all, making a great, first impression goes a long way toward a quick sale. A fresh coat of paint on your home’s trim, gutters and front door is a great way of sprucing up your home’s exterior.
3. Weed and landscape the front yard - Again, great curb appeal can not be stressed enough. Get your hands dirty and clear the flower and plant beds of weeds and mulch them to add the finishing touch.
4. Paint the interior - A fresh coat of warm, neutral paint on your home’s interior walls can instantly transform the rooms of your home. Choose a calm, warm color that will appeal to a variety of buyers.
5. Scrub down the kitchen appliances - Sparkling clean kitchen appliances can take a dull, dingy kitchen and give it an instant face lift. Scrubbing down your kitchen appliances - inside and out - is also essential if the appliances are staying with the home.
6. Steam clean the carpets - Stained carpets are a great way to lose potential buyers. Rent a steam cleaner and spend the weekend getting your carpets in tip-top shape.
7. Have a garage sale! - Is there any better way to spend your weekend than making money? A garage sale can help you rid your Irving home of unwanted junk that is cluttering up your home and distracting buyers from your home’s selling points. Plus, it can help you earn some cold, hard cash to cover your moving expenses!
~9 Web sites that can make your life easier~
Back to the future
Do you wish your present self could tell your future self something? Huh? FutureMe.org lets you write yourself a letter (via e-mail) that it will deliver to you on the future date of your choosing, from 30 days later to 25 years later. It’s totally free. Capture something you’re feeling this very moment and make sure that 20 years later, you remember how important it is. You can think about where you think you’ll be in say, two years, and see how accurate or wrong you were, and be reminded that life isn’t predictable. It also lets you send a letter to someone else’s future self. You could write one to your son the day he’s born and have it delivered 18 years later. There’s an option to make your letter public, as about 15 percent of users do. The public letters available for perusal range from inspiring to sad to intriguing.
The whole nine yard sale
Spending a Saturday morning finding treasure on the cheap is now a lot more manageable. Find all the yard sales on a given day in your area with Yard Sale Treasure Map. The free service mines Craigslist (where most yard sale ads are placed) and presents to you the yard sale information posted there in the easiest, most useful way. Plan your yard-sale-ing adventure by selecting the sales you wish to attend; the site will map them and determine the optimal route and order in which you should visit them You can search by items that will be for sale, for instance, “furniture” or “electronics.” Yard sales are back with a vengeance as we all try to reuse and recycle, and of course, spend less.
Spending a Saturday morning finding treasure on the cheap is now a lot more manageable. Find all the yard sales on a given day in your area with Yard Sale Treasure Map. The free service mines Craigslist (where most yard sale ads are placed) and presents to you the yard sale information posted there in the easiest, most useful way. Plan your yard-sale-ing adventure by selecting the sales you wish to attend; the site will map them and determine the optimal route and order in which you should visit them You can search by items that will be for sale, for instance, “furniture” or “electronics.” Yard sales are back with a vengeance as we all try to reuse and recycle, and of course, spend less.
Go ask Alice ... for more toothpaste
Alice.com is a new online, replenishing convenience store for things like toiletries, cleaning products, garbage bags and laundry supplies. When you set up your account, you tell Alice about who lives in your home and what you use. Alice then stocks all your home essentials, keeps track of when it’s time to restock, and delivers the goods for free. Plus, goods are priced lower (often 20 to 30 percent) than at many other retailers. She’s so nice she also finds relevant coupons for you and applies them automatically.
Elephants don’t forget
One thing no one ever tells you about adulthood is that it involves an inordinate amount of time spent remembering to buy people presents, and then to write thank-you notes when you’re on the receiving end. Gift Elephant is an online system that keeps track of all the presents you’ve ever given and received, for free. It manages your thank-you notes and reminds you of upcoming holidays and birthdays and special occasions. For a small fee, they’ll even print and mail thank-you notes on your behalf, personalized with your own photos if you wish.
Taken to task
Task.fm is a productivity tool that really acts like a personal secretary, or nagging mother. You can use it to manage to-do lists, remember to pay bills and arrange a wake-up call, and most features are free. You don’t have to go in and manually set dates and times, because it understands natural language. For example, if I typed in, “DailyCandy dinner Tuesday at five,” that would be enough information to get it to remind me at just the right time. It’s pretty amazing. You can create reminders on the site, or you can e-mail it or Twitter it to set up reminders, and you choose whether it reminds you via text, e-mail or phone call. In the pro version, $3.99 per month, you do not see any ads and you have unlimited use, but the free version gives you a lot to work with.
Meet in the middle
Find coffee shops and other cozy places to meet almost exactly halfway between far-away friends that are a drive apart with A Place Between Us. It’s free. Type in the addresses each person will be coming from, then describe the sort of place at which you’d like to meet. The default is coffee shop, but you can also pick a certain kind of restaurant, like “donut shop” or “tacos.” It will find you a place like that as close to the middle as possible. It will map directions to the meeting place for each of you. You can enter as many addresses as you like and it really does find a perfect midpoint!
Vocally local
We all want to buy more locally produced food and products, but how to find them? Locallectual helps you search for products from wood tables to honey, made in your neck of the woods. You can search based on where things are made, down to 25 square miles of where you are. Search by type of product and/or distance from a certain place (“Soap” and “Pennsylvania”) or browse their edited listings of responsible, quality producers.
Stay centered
A superb, free online planning tool, Centerd saves you time, paper and sanity with online templates for school events — or any type of event, really. Coordinate and manage volunteers for everything from soccer games to fundraisers. E-mail reminds organizers which slots have been filled and which tasks still need doing, and alerts hosts about last-minute dropouts. Event details, including Google maps to destinations, are posted online. You can also browse ideas for things to do in your area, and “copy” other people’s great plans.
Candid panda camera
Ok, maybe this isn’t useful in the traditional or technical sense of the word, but there is no pick-me-up like watching live pandas frolic in their habitat. Panda Cam is a live feed from the home of the four pandas of Zoo Atlanta! The scintillating broadcast is live every Monday through Friday from 10 a.m. to 5 p.m. If all this organization and streamlining and usefulness has left you worn out, this is just what you need to unwind!
Do you wish your present self could tell your future self something? Huh? FutureMe.org lets you write yourself a letter (via e-mail) that it will deliver to you on the future date of your choosing, from 30 days later to 25 years later. It’s totally free. Capture something you’re feeling this very moment and make sure that 20 years later, you remember how important it is. You can think about where you think you’ll be in say, two years, and see how accurate or wrong you were, and be reminded that life isn’t predictable. It also lets you send a letter to someone else’s future self. You could write one to your son the day he’s born and have it delivered 18 years later. There’s an option to make your letter public, as about 15 percent of users do. The public letters available for perusal range from inspiring to sad to intriguing.
The whole nine yard sale
Spending a Saturday morning finding treasure on the cheap is now a lot more manageable. Find all the yard sales on a given day in your area with Yard Sale Treasure Map. The free service mines Craigslist (where most yard sale ads are placed) and presents to you the yard sale information posted there in the easiest, most useful way. Plan your yard-sale-ing adventure by selecting the sales you wish to attend; the site will map them and determine the optimal route and order in which you should visit them You can search by items that will be for sale, for instance, “furniture” or “electronics.” Yard sales are back with a vengeance as we all try to reuse and recycle, and of course, spend less.
Spending a Saturday morning finding treasure on the cheap is now a lot more manageable. Find all the yard sales on a given day in your area with Yard Sale Treasure Map. The free service mines Craigslist (where most yard sale ads are placed) and presents to you the yard sale information posted there in the easiest, most useful way. Plan your yard-sale-ing adventure by selecting the sales you wish to attend; the site will map them and determine the optimal route and order in which you should visit them You can search by items that will be for sale, for instance, “furniture” or “electronics.” Yard sales are back with a vengeance as we all try to reuse and recycle, and of course, spend less.
Go ask Alice ... for more toothpaste
Alice.com is a new online, replenishing convenience store for things like toiletries, cleaning products, garbage bags and laundry supplies. When you set up your account, you tell Alice about who lives in your home and what you use. Alice then stocks all your home essentials, keeps track of when it’s time to restock, and delivers the goods for free. Plus, goods are priced lower (often 20 to 30 percent) than at many other retailers. She’s so nice she also finds relevant coupons for you and applies them automatically.
Elephants don’t forget
One thing no one ever tells you about adulthood is that it involves an inordinate amount of time spent remembering to buy people presents, and then to write thank-you notes when you’re on the receiving end. Gift Elephant is an online system that keeps track of all the presents you’ve ever given and received, for free. It manages your thank-you notes and reminds you of upcoming holidays and birthdays and special occasions. For a small fee, they’ll even print and mail thank-you notes on your behalf, personalized with your own photos if you wish.
Taken to task
Task.fm is a productivity tool that really acts like a personal secretary, or nagging mother. You can use it to manage to-do lists, remember to pay bills and arrange a wake-up call, and most features are free. You don’t have to go in and manually set dates and times, because it understands natural language. For example, if I typed in, “DailyCandy dinner Tuesday at five,” that would be enough information to get it to remind me at just the right time. It’s pretty amazing. You can create reminders on the site, or you can e-mail it or Twitter it to set up reminders, and you choose whether it reminds you via text, e-mail or phone call. In the pro version, $3.99 per month, you do not see any ads and you have unlimited use, but the free version gives you a lot to work with.
Meet in the middle
Find coffee shops and other cozy places to meet almost exactly halfway between far-away friends that are a drive apart with A Place Between Us. It’s free. Type in the addresses each person will be coming from, then describe the sort of place at which you’d like to meet. The default is coffee shop, but you can also pick a certain kind of restaurant, like “donut shop” or “tacos.” It will find you a place like that as close to the middle as possible. It will map directions to the meeting place for each of you. You can enter as many addresses as you like and it really does find a perfect midpoint!
Vocally local
We all want to buy more locally produced food and products, but how to find them? Locallectual helps you search for products from wood tables to honey, made in your neck of the woods. You can search based on where things are made, down to 25 square miles of where you are. Search by type of product and/or distance from a certain place (“Soap” and “Pennsylvania”) or browse their edited listings of responsible, quality producers.
Stay centered
A superb, free online planning tool, Centerd saves you time, paper and sanity with online templates for school events — or any type of event, really. Coordinate and manage volunteers for everything from soccer games to fundraisers. E-mail reminds organizers which slots have been filled and which tasks still need doing, and alerts hosts about last-minute dropouts. Event details, including Google maps to destinations, are posted online. You can also browse ideas for things to do in your area, and “copy” other people’s great plans.
Candid panda camera
Ok, maybe this isn’t useful in the traditional or technical sense of the word, but there is no pick-me-up like watching live pandas frolic in their habitat. Panda Cam is a live feed from the home of the four pandas of Zoo Atlanta! The scintillating broadcast is live every Monday through Friday from 10 a.m. to 5 p.m. If all this organization and streamlining and usefulness has left you worn out, this is just what you need to unwind!
Halloween Safety Tips for Homeowners
Expecting trick-or-treaters on Halloween? Practice indoor fire safety, leave the porch light on, keep walkways clear, confine pets elsewhere and offer non-candy treats.
Setting up a spooky yard haunt is an awesome way to celebrate Halloween and wow visitors. But even if homeowners have chosen not to turn their houses into yard haunts, they should still expect little trick-or-treaters, hence the need for homemakers to learn some Halloween safety tips.
Find out how to make the house safe on the night of haunting when visitors come asking for treats.
Practice Indoor Fire Safety
Candles are often used to illuminate Jack-O-Lanterns and many lights with special effects are turned on to give the house an eerie and fun look. Whenever possible, use votive candles if a real fire source must be used. Better still, use batter-operated lights or chemical light sticks to light up carved pumpkins. If many lights are used to decorate the house, don’t overload extension cords or let them run through water or snow in the ground.
Also, ensure that smoke detectors, alarms and sprinklers are in good working condition. Have a few fire drills with the family before Halloween and make sure all the kids know what the escape route and exit locations are. This will help prepare everyone in case a fire breaks out amidst the fun.
Leave the Porch Light on for Trick-or-Treaters
Adequate light is essential for visitors and trick-or-treaters to see where they are going. Leave the porch light on and if needed, install additional lights in the front yard to avoid someone tripping over something he or she can’t see.
Read more: http://holiday-entertaining.suite101.com/article.cfm/halloween_safety_tips_for_homeowners#ixzz0THhTY3SU
Setting up a spooky yard haunt is an awesome way to celebrate Halloween and wow visitors. But even if homeowners have chosen not to turn their houses into yard haunts, they should still expect little trick-or-treaters, hence the need for homemakers to learn some Halloween safety tips.
Find out how to make the house safe on the night of haunting when visitors come asking for treats.
Practice Indoor Fire Safety
Candles are often used to illuminate Jack-O-Lanterns and many lights with special effects are turned on to give the house an eerie and fun look. Whenever possible, use votive candles if a real fire source must be used. Better still, use batter-operated lights or chemical light sticks to light up carved pumpkins. If many lights are used to decorate the house, don’t overload extension cords or let them run through water or snow in the ground.
Also, ensure that smoke detectors, alarms and sprinklers are in good working condition. Have a few fire drills with the family before Halloween and make sure all the kids know what the escape route and exit locations are. This will help prepare everyone in case a fire breaks out amidst the fun.
Leave the Porch Light on for Trick-or-Treaters
Adequate light is essential for visitors and trick-or-treaters to see where they are going. Leave the porch light on and if needed, install additional lights in the front yard to avoid someone tripping over something he or she can’t see.
Read more: http://holiday-entertaining.suite101.com/article.cfm/halloween_safety_tips_for_homeowners#ixzz0THhTY3SU
Monday, October 5, 2009
Federal Index Shows Home Prices Rising
U.S. home prices rose 0.3 percent in July compared to June, the Federal Housing Finance Agency said Tuesday.
The index is 4.2 percent below what it was in 2008 and 10.5 percent off its peak in April 2007.
The index excludes most expensive homes from its calculations, so prices appear to have declined less than they have by other measures.
The report "supports other evidence that the three-year long decline in prices has come to halt," Paul Dales, U.S. economist with Capital Economics, wrote in a note to clients.
Other economists were less positive. "We think house price indexes are likely to edge somewhat lower in the fall when foreclosures become a larger share of home sales," Barclays Capital economist Nicholas Tenev wrote in a note to his clients.
The index is 4.2 percent below what it was in 2008 and 10.5 percent off its peak in April 2007.
The index excludes most expensive homes from its calculations, so prices appear to have declined less than they have by other measures.
The report "supports other evidence that the three-year long decline in prices has come to halt," Paul Dales, U.S. economist with Capital Economics, wrote in a note to clients.
Other economists were less positive. "We think house price indexes are likely to edge somewhat lower in the fall when foreclosures become a larger share of home sales," Barclays Capital economist Nicholas Tenev wrote in a note to his clients.
Sunday, October 4, 2009
Early 401k Withdrawals Thwart Long-Term Goals
RISMEDIA, October 1, 2009—(MCT)—A forthcoming federal report on retirement savings recommends easing a penalty for hardship withdrawals from 401(k) plans and that workers receive better education about the consequences of such decisions.
The Government Accountability Office (GAO) report suggests ways for Congress and federal agencies to reduce the long-term impact of early withdrawals, or “leakage,” from retirement plans. The economic downturn has caused many 401(k) participants to take drastic measures with their retirement accounts. About one in seven cashes out of a plan after a job change or loss (without rolling over the money to a new account), take hardship withdrawals, or borrow against their portfolio, according to the GAO report. “Even small amounts of leakage can have a significant impact on the retirement savings of some plan participants,” the GAO said.
Some Washington lawmakers are concerned that by tapping 401(k) funds for immediate needs, workers are jeopardizing their long-term retirement security.
“Americans’ retirement savings have taken a huge hit due to the recession,” said Sen. Herb Kohl, D-Wis., chairman of the Senate’s Special Committee on Aging, in a written statement. “Despite the financial hardships many are facing, people need to resist raiding their 401(k) because it’s a really bad deal for them over the long run.”
The GAO study says Congress should consider changing a rule that prohibits 401(k) participants from making additional contributions for six months after a hardship withdrawal. The suspension also includes employer matches. The requirement, the GAO report said, may in fact make the leakage problem worse “by barring otherwise able participants from contributing to their accounts.” In addition, the GAO said the Labor Department should encourage employers to give workers “understandable and useful information” about the adverse long-term consequences from hardship withdrawals, loans and cash-outs. Also, participants could view projections of their account balances when left in a tax-deferred portfolio versus the results if they cashed out. The GAO also said the Treasury Department should clarify 401(k) regulations that require participants to exhaust all available loans before resorting to hardship withdrawals that subject workers to taxes and early-withdrawal penalties.
“Participants facing sudden and anticipated hardships would also benefit from the assurance that they are using the most appropriate and least damaging option,” the report said, “thereby minimizing the negative impacts on their overall retirement preparedness.”
The year-long study, completed in August 2009, was commissioned by the Special Committee on Aging. The report takes particular aim at cash-outs, noting it can be “the most damaging form of 401(k) leakage,” is the least regulated, and runs “counter to the goal of retirement savings.” (In a cash-out, the money is not rolled over to another retirement account). Cash-outs of any amount—partially or in full—can impact a participant’s account balance at age 65 more than comparable amounts taken either in a hardship withdrawal or a loan, the GAO said.
“Participants who voluntarily cashed out their entire 401(k) account balance at job separation experienced the largest reductions in the amount of retirement savings that accumulate over their working careers,” the report noted. For example, a participant who cashed out his entire 401(k) at age 35 would forfeit more than $183,000 in savings by his 65th birthday, according to the report. Cashing out later in a career, when there is less time to recover from losses, leaves an even bigger wealth gap. Yet many participants choose to cash out of a plan when they leave a job, in part because they aren’t given enough information about the potential hit to their finances, the GAO said.
The report noted: “With better information on the consequences of the various forms of leakage, participants may choose to preserve their retirement savings, resulting in a better retirement outcome.”
The Government Accountability Office (GAO) report suggests ways for Congress and federal agencies to reduce the long-term impact of early withdrawals, or “leakage,” from retirement plans. The economic downturn has caused many 401(k) participants to take drastic measures with their retirement accounts. About one in seven cashes out of a plan after a job change or loss (without rolling over the money to a new account), take hardship withdrawals, or borrow against their portfolio, according to the GAO report. “Even small amounts of leakage can have a significant impact on the retirement savings of some plan participants,” the GAO said.
Some Washington lawmakers are concerned that by tapping 401(k) funds for immediate needs, workers are jeopardizing their long-term retirement security.
“Americans’ retirement savings have taken a huge hit due to the recession,” said Sen. Herb Kohl, D-Wis., chairman of the Senate’s Special Committee on Aging, in a written statement. “Despite the financial hardships many are facing, people need to resist raiding their 401(k) because it’s a really bad deal for them over the long run.”
The GAO study says Congress should consider changing a rule that prohibits 401(k) participants from making additional contributions for six months after a hardship withdrawal. The suspension also includes employer matches. The requirement, the GAO report said, may in fact make the leakage problem worse “by barring otherwise able participants from contributing to their accounts.” In addition, the GAO said the Labor Department should encourage employers to give workers “understandable and useful information” about the adverse long-term consequences from hardship withdrawals, loans and cash-outs. Also, participants could view projections of their account balances when left in a tax-deferred portfolio versus the results if they cashed out. The GAO also said the Treasury Department should clarify 401(k) regulations that require participants to exhaust all available loans before resorting to hardship withdrawals that subject workers to taxes and early-withdrawal penalties.
“Participants facing sudden and anticipated hardships would also benefit from the assurance that they are using the most appropriate and least damaging option,” the report said, “thereby minimizing the negative impacts on their overall retirement preparedness.”
The year-long study, completed in August 2009, was commissioned by the Special Committee on Aging. The report takes particular aim at cash-outs, noting it can be “the most damaging form of 401(k) leakage,” is the least regulated, and runs “counter to the goal of retirement savings.” (In a cash-out, the money is not rolled over to another retirement account). Cash-outs of any amount—partially or in full—can impact a participant’s account balance at age 65 more than comparable amounts taken either in a hardship withdrawal or a loan, the GAO said.
“Participants who voluntarily cashed out their entire 401(k) account balance at job separation experienced the largest reductions in the amount of retirement savings that accumulate over their working careers,” the report noted. For example, a participant who cashed out his entire 401(k) at age 35 would forfeit more than $183,000 in savings by his 65th birthday, according to the report. Cashing out later in a career, when there is less time to recover from losses, leaves an even bigger wealth gap. Yet many participants choose to cash out of a plan when they leave a job, in part because they aren’t given enough information about the potential hit to their finances, the GAO said.
The report noted: “With better information on the consequences of the various forms of leakage, participants may choose to preserve their retirement savings, resulting in a better retirement outcome.”
Subscribe to:
Posts (Atom)
