Asset Planning, Inc Blog

The preliminary proposal to reform Social Security has been release. The National Commission on Fiscal Responsibility and Reform is spearheading the effort to restructure Social Security in hopes of saving the program which is expect to become insolvent if left as is. The organization is expected to release their final proposal to Congress Dec 1st.  The main proposed changes are as follows:

• Increase the amount of income taxed by 2050
• Reduce benefits for high income earners
• Reduce COLA's (cost of living adjustments)
• Increase the full retirement age

To read more about the proposal Click Here

Carol Somoano will be one of the certified financial planners offering advice pro bono this Saturday October 23, 2010 at the Huntington Beach Central Library as part of the FPA's Financial Planning Day.

Financial Planning Day is a free event open to the public. The event runs from 10am-3pm. The library is located at 7111 Talbert Ave Huntington Beach, CA 92648. Registration and event details can be found HERE

This is a good quality event as all volunteers are prohibited from selling products and soliciting business. It is truly for educational purposes and we encourage all that want to learn about personal finance to attend. There will be a variety of 50 minute workshops as well as an opportunity to speak with a planner one on one.

                         

Below is a link to a great article in Kiplinger's detailing all the various caveats for obtaining credit these days.

It touches on how self employment, credit scores, debt to income, etc. effects your ability to get a loan.

For those that can qualify, now could be the best time to refinance debt as rates are at their lowest point in history.

To read the article "What it takes to get a loan" in it's entirety CLICK HERE 

The government just announced another mortgage refinance program in hopes to aid underwater homeowners. The new program is called The FHA Short Refinance Option and it allows borrowers to refinance up to 97.75% of their home's value. However, a borrower's current lender must be willing to write down at least 10% of the current principal balance and the total mortgage debt on the property can not exceed 115% of the home's value.

A borrower must meet the below criteria to qualify:

• Be current on payments for their underwater mortgage
• Refinance their primary residence
• Have a mortgage debt-to-income ratio of less than 31 percent
• Have a total debt-to-income ratio of less than 50 percent after the refinance
• Have a credit score of at least 500

For more information on the program please vist the HUD website.

The CoreLogic delinquent home borrower report released last week shows that late payments have increased from last year by 2.6% in Orange County and 3.15% across California.

The report can be found on the The Orange County Register website. 

Asset Planning, once again, is ranked among the top wealth managers in the country. We would like to say thank you to all of our clients that make this honor possible. To view and find out more about the ranking please visit Wealth Manager Magazine.

Below is a an excerpt from a Marketwatch article  that details the BP shares owned by state pension.  BP is coming under political pressure to cut it's dividend even though the company has the financial means to keep paying it.  The shortfall in funding of state pensions has been much publicized over the past few years. We can expect the states will fight back to preserve BP's dividend and share value.

• The New Jersey Division of Investment (51 million shares)

• The California Public Employees Retirement System (36 million shares)

• The Pennsylvania Public School Employees Retirement System (7.1 million shares)

• The Teachers Retirement System of Alabama (4.5 million shares)

• The Employees Retirement System of Texas (4.1 million shares)

• The Ohio Public Employees Retirement System (1.1 million shares)

• The Illinois State Board of Investment (1.1 million shares)

• The Indiana Public Employees' Retirement Fund (0.7 million shares)

• The Washington State Investment Board (1.2 million shares)

Of special note, the United Nations Joint Staff Pension Fund holds 21.9 million shares of BP.

For those of you that didn't catch last Sunday's paper, Sandy was the featured planner in the Money Makeover article. This time, she helped a young couple that was spending quickly through a large inheritance develop a budget and preserve what's left of their windfall.

Click here to read the full article. 

Two new bills went in effect in April to aid distressed homeowners. The first bill is called the Home Affordable Foreclosure Alternative Program or for short HAFA. HAFA is intended to help people that don't qualify for a loan modification under the first government program HAMP. Under HAFA borrowers and lenders will get cash from the government to complete a short sale. A short sale, basically, is when a lender agrees to accept less than is owed on a property in order to sell the house to a new buyer. In addition to the financial incentive given, the government program requires lenders to approve and set the terms of the short sale prior to the house being listed and release the borrower of all future liability on the first lien mortgage. The program will be in effect April 2010 until December 2012.

The second government program offered this month is from the state of California. This law changes California tax code to absolve homeowners from income tax owed on canceled debt. Perviously, debt forgiven in foreclosure, short sale, or loan modifications was treated as taxable income. This change in California tax code mirrors the 2007 Federal Government tax relief program called the Mortgage Forgiveness Debt Relief Act.

This week the Secretary Health and Human Services, Kathleen Sebelius, issued a word of precaution against scam artists claiming involvement in the new health care reform.

Imposters are going door to door claiming you must sign up and pay now for the expanded government assisted health coverage. They are telling their victims that there is a "limited enrollment period". The coverage for the uninsured doesn't even begin until 2014. Please be guarded with anyone showing up at your home or calling offering to sell you coverage. In general, when dealing with unfamiliar solicitations, I recommend you always take the sales person's name, employer, and phone number so you can research them before proceeding.