Consumer News

The recent hurricane activity in the Gulf Coast demonstrates how important it is to be prepared in the event of an emergency. Take a few minutes and consider whether you and your family are prepared for emergencies ranging from an earthquake or hurricane to a potential terrorist threat or even just that blackout.

The Department of Homeland Security (DHS) wants to make sure you are, and has identified September as National Preparedness Month. Hopefully you'll never be faced with an emergency situation of your own, but if you are, having an emergency kit will help ensure that you and your loved ones will have the bare necessities such as food, water, and items to keep you warm. And determining all the right items for each member of your family, pets, and those with special needs could normally be a very grueling process. But the DHS has made this process very simple.

To help you get started preparing your emergency kit, The Department of Homeland Security has developed a user friendly website that allows you to download and print all of the items that you will need to gather. Just hit this link: DHS Emergency Kit, and you can get a quick list of the basics, such as water, food, radio, flashlight and batteries - including a printable list of the quantities and types that should be purchased, based on your families needs.

So take a few minutes to visit the site, and forward this article on to your friends, family members, and colleagues...or better yet, prepare a starter kit for them as a gift. When the power snaps off unexpectedly...or worse...don't be caught unprepared.

Last month, President Bush signed the "Housing and Economic Recovery Act of 2008" into law. This $300 Billion rescue plan is aimed at helping struggling homeowners avoid foreclosure, as well as boost confidence in the housing market. Although the bill is several hundred pages long and contains a number of far-reaching provisions, here are a few of the major provisions in the legislation that impact homeowners and homebuyers:

1. Tax credits. First-time homebuyers who purchase their primary residence on or after April 9, 2008 and before July 1, 2009 are eligible for up to $7,500 in tax credit, provided they haven't owned a home in the last three years and fit certain income parameters. The credit is generous, but it is actually an interest free loan, paid back over 15 years at $500 per year when taxes are filed.

Special note: Some types of seller-paid down payment assistance programs are being eliminated as of October 1st as well - so purchasing a home before then may gain you a double benefit of tax credits AND seller-paid down payment assistance while it is still available.

2. Larger loans at lower rates. There have recently been provisions in place that have allowed loans larger than $417,000 to qualify for better financing rates than normally would be available for "jumbo" loan amounts of that size, thanks to Fannie Mae and Freddie Mac. Although these provisions were set to expire, they are being extended...however, the top end of the loan size that will be allowed under these programs will be dropping down from $729,750 to $625,500 as of January 1, 2009.

3. FHA Hope for Homeowners. This provision is designed to help homeowners who are "upside down" on their mortgages--that is, they owe more on their house than they can sell it for in today's market. Essentially, this plan allows homeowners who meet the requirements and are upside down to refinance their mortgage to a new 30-year Fixed FHA mortgage. There are a number of qualifying details that must be met and requirements to be agreed to -- including agreeing to split the equity in your home with the government in the future. Still, if you're upside down on your mortgage and struggling in today's economy, this is an option worth exploring in more detail.

These are just a few of the provisions that may benefit you, and there are a number of other items that impact the housing and mortgage industry as whole. But the bottom line is, home prices are extremely reasonable right now, home loan rates are low, and new incentives are in place that may help make the decision to buy even more appealing than before. If you're in the market for a new home or need to make some changes with your current mortgage...there's never been a better time to act. Just get in touch so we can start the planning process together.

If you have any questions or concerns regarding the new legislation and how it may impact you, please call or email to schedule a time to talk.

After the failure of California-based IndyMac Bank, many people have wondered how safe their accounts really are. While the Federal Deposit Insurance Corp. (FDIC) guarantees most bank deposits, here are some important details to remember.

What types of accounts are covered?

The FDIC protects checking and savings accounts, certificates of deposits (CDs), Christmas club accounts, and money-market savings accounts. However, Stocks, Bonds, and mutual fund shares...even those purchased through an FDIC bank...are not protected.

What are the limits of FDIC insurance?

Bank accounts that have less than $100,000 in them and certain retirement accounts (IRAs held in CDs and money market accounts) that have less than $250,000 are fully protected by the FDIC even if the bank fails. If you want to exceed these account limits, you can keep your deposits fully protected by:

• Dividing your money among several different bank companies. Note that dividing your money among several different branches of the same bank does not guarantee full protection.
• If you prefer to keep your money in the same bank company, you can still be fully protected if you divide your money among various "ownership categories". Ownership categories include a personal account in your name, a personal account in your spouse's name, a joint account co-owned by you and someone else, and a trust account that names someone other than you as a beneficiary.

What are some common ways customers end up with uncovered deposits?

If you purchase a CD through an investment broker, this CD will often be placed with a bank at which you already have an account. If the CD and your other accounts exceed the $100,000 limit, you may not be full protected. Before purchasing CD's through a broker, ask where they will be placed.

In addition, keep track of the interest your accounts earn so you don't exceed the limits this way.

What will happen if your bank fails?

In most cases, depositors can fully access their funds by the next business day. Typically, failed banks are closed on Fridays, and funds are available by the following Monday. People can also usually use their ATM cards and write checks over that weekend as well. And for customers whose accounts exceeded the FDIC limit, all hope is not lost. Though this amount has varied, they can generally expect to recover 70 cents on the dollar of their uncovered funds after the bank's assets are sold.

The good news is that the vast majority of US banks are secure, but the above information will help you stay fully protected. For more information, visit www.fdic.gov.