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British house prices fell for a fourth month running in February to post the lowest annual rate of inflation in more than two years, the Nationwide Building Society said on Friday.

It said house prices fell 0.5 percent on the month in February after a downwardly revised 0.3 percent fall in January. Analysts polled by Reuters had forecast a flat reading on the month.

Annual house price inflation fell to 2.7 percent — its lowest since November 2005 — from 4.2 percent in January.

“The trend in prices is clearly weakening, but the size of the drop in the annual rate between January and February perhaps overstates the rate of cooling as it partly reflects the particularly strong increase in prices in February last year,” said Fionnuala Earley, Nationwide chief economist.

The average house price fell to 179,358 pounds($356,688) from 180,473 pounds.

The figures add to evidence of a downturn in the housing market and may heighten worries of a sharp retrenchment in consumer spending.

A survey earlier this week showed consumer confidence fell in February to its lowest in more than 13 years with shoppers more reluctant to splash out on big purchases than at any time since 1990.

Nationwide is forecasting flat house prices in 2008 as a whole but many private economists are predicting falls of up to 5 percent.

The Bank of England has cut interest rate twice in the past three months and investors expect further cuts over the course of the year.

Information is taken from: Reuters

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An impending stock sale from Visa could amount to the largest initial public offering in U.S. history.

The credit-card network giant announced the proposed terms of its long-anticipated IPO�today, saying it intends to sell up to $17 billion in stock. Visa said it plans to sell 406 million shares, priced between $37 and $42 a share. An additional 40.6 million shares will be available for purchase by underwriters to cover any excess demand. Visa said it plans to offer the stock “as soon as practicable” after the registration statement takes effect.

Even if its shares price at the low end of its estimated range, Visa’s IPO would far surpass the $10.6 billion AT&T Wireless raised when its stock debuted in 2000.

“Visa operates the world’s largest retail electronic payments network and manages the world’s most recognized global financial services brand,” the company said in its prospectus filed with the Securities and Exchange Commission. “Based on the size of our network, the strength of the Visa brand and the breadth and depth of our products and services, we believe we are the leading electronic payments company in the world.” Visa’s transactions by both number and dollar amount exceeded those of rivals MasterCard and American Express in 2006.

While credit card issuing banks have been impacted by consumer credit woes, as a card processor, Visa’s revenues are tied to the use of plastic payments, which continue to gain ground against more traditional payment methods involving cash and checks.

Visa plans to follow in the footsteps of rival MasterCard in going public. MasterCard raised $2.39 billion in May 2006 with its IPO, and its stock has surged in value since that time. Meanwhile, credit card issuer Discover Financial Services went public with its stock in July 2007.

In June 2007, Visa had outlined its “restructuring” plan to establish a new corporation known as Visa Inc. via mergers involving Visa USA, Visa Canada and Visa International.

Visa said it has applied to list its shares on the New York Stock Exchange under the symbol “V.”

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The sharp drop in mortgage rates has sparked a wave of refinancing. But not everyone qualifies.

When Elaine Chen, a 39-year-old marketing executive in New York, saw interest rates falling in January, she called her mortgage broker to see if she could get a lower rate to finance Manhattan condo. She estimated the lower rate could save her $300 per month.

Her broker said she could get a 5.625 percent rate on a 30-year, fixed-rate mortgage if she hurried and paid $5,000 in closing fees. But Chen, suspecting that rates would fall more, didn’t bite. By the time rates fell further, she couldn’t get her busy broker on the phone.

“I never heard back from him,” she said. “I still haven’t decided what I’m going to do. I’m not sure I can act fast enough to catch the best rates.”

Ted Woelken, a 51-year old telecom manager in Sammamish, Wash., said he and his wife decided against refinancing their adjustable rate mortgage, which is not due to reset for two more years. To justify moving to a 30-year fixed loan, Woelken said they would need to get 5.1 percent rate rather than the 5.4 percent rate their lender offered.

“When you have a first and second mortgage, just because rates on 30-year fixed loans are coming down doesn’t mean you’ll benefit right away by converting,” he said. “We have two more years below 5 percent, so we’ll wait and look again.”

Chen and Woelken, like many borrowers, are finding that their options aren’t as attractive as they’d expected. They’re lucky though. With full-time jobs, good credit, and more than 20 percent equity apiece in their properties, refinancing is largely a matter of optimizing affordable loans. Other borrowers with spotty credit or job histories, and those facing adjustable rate mortgage resets or living in a home that’s lost value, will have a harder time refinancing and may face difficult repercussions for failing to do so.

Wondering if you can refinance? Here’s a look at possible scenarios:

You can consider refinancing if …

You have a fixed or adjustable mortgage with an interest rate over 6 percent. With rates on 30-year fixed loans below 6 percent, many homeowners want to lower monthly payments or move from an adjustable to a fixed mortgage. You’ll need to run numbers to see if closing costs justify the new rate’s monthly payment savings, but many lenders say that if you can save 50 basis points (0.5 percent), or even 25 basis points with no closing costs, it might be worthwhile.

Your credit score is over 650. To get a good rate on a non-government loan, your score needs to be at least 650 — maybe 680, depending on the lender and market. It’s worth pulling scores before approaching lenders, as scores help determine your rates.

You live in an expensive urban market and have a mortgage over $417,000. Government-set maximum limits on conforming mortgages, previously capped at $417,000 in most markets, will rise starting in March to $729,750 in California and other pricier markets. If your loan exceeds $417,000, you could refinance from a “non-conforming” to a more desirable “confirming” loan.

Dick Lepre, senior loan officer at Residential Pacific Mortgage in San Francisco, says he expects more than 50 percent of mortgage loans in California have balances that fall in the new, higher range, and thus his state will see what he called “a massive refinancing boom.” Dave Zitting, chief executive of Primary Residential Mortgage in Salt Lake City, agrees, saying: “It’s going to fend off a recession.”

You’re eligible to refinance to an FHA loan. Loans offered by Federal Housing Administration, typically targeted at first-time or smaller-budgeted buyers, are usually offered to people buying a property priced below a local market’s median price. New rules going into effect in March are lifting FHA lending limits to 125 percent of median prices in a local market (up to $729,750 in some markets) and will help many borrowers, says Bob Walters, chief economist for Quicken Loans.

Bill Glavin, special assistant to the FHA commissioner, says FHA refinance loans don’t have strict credit score criteria and those who use them can qualify with as little as 3 percent equity in their property —even in a so-called “declining market” where other lenders demand more equity.

You have at least 10 percent equity in your home and aren’t FHA-eligible. To get good rates, you’ll need to have equity in the home. In most markets, 10 percent equity is a minimum. In more volatile markets like California, lenders want to see as much as 30 percent equity, says David Zugheri, president of First Houston Mortgage, which lends in Texas, Florida and California. If you have minimal equity but have poured work into your home, an appraisal may reveal that remodeling has increased your home value sufficiently to create the equity you need.

Source: msnbc

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Concerned consumers, breathe a sigh of relief: A report released yesterday by Javelin Strategy & Research reveals that identity fraud is on the decline in most of America. It also reinforces a three-year trend that the majority of information stolen by criminals is taken from personal belongings and phone calls — not online.

A key survey finding is that identity fraud is down an estimated 12 percent since 2006, which means criminals illegally obtained $6 billion less than the year before. While overall fraud has declined over the last three years, the report noted that out-of-pocket expenses for identity fraud victims have risen. Fortunately, approximately 300,000 fewer American adults became identity victims in 2007 than in 2006.

The lowest risk for fraud was found to be in the Northeast, while residents in California, Illinois, Idaho, West Virginia and Delaware have the highest incidences of identity fraud.

The report found that traditional criminal methods still pose the greatest risk. In 2006, only 3 percent of identity theft victims’ information was accessed through mail or telephone transactions. In 2007, the figure leapt to 40 percent. The main phone method was through vishing, in which criminals use voice over Internet protocol (VoIP) or other telecommunications to make calls posing as a nonprofit organization, billing company or financial institution. Many of the consumers hand over their Social Security numbers, bank account numbers and credit card information thinking they are giving it to a legitimate business, when they are actually placing it into the hands of a criminal.

The report presumes that the decline in fraud can be attributed to “greater consumer vigilance and awareness, improvements in systems and practices by companies that manage personal information, the increased frequency of viewing personal account information and consumers more frequently updating spyware and anti-virus software.” Javelin expects fraud reduction to continue as businesses and consumers work together to protect sensitive data — especially financial information online.

“Javelin’s 2008 Report confirmed what we believe to be true: that while fraud is declining, it is still a concern for the American public,” says Javelin’s president and founder, James Van Dyke, in a press release. “The good news is the leadership role many businesses are taking in educating consumers about ID fraud risk factors is paying off. Still, fraudsters are getting creative and leveraging new techniques to commit fraud, so Americans need to be as diligent as ever in protecting their personal information.”

Remember, just because someone asks for your personal information over the phone instead of through e-mail does not mean it is legitimate. Never give out personal or financial information when you have been solicited. It is only wise to do so when you have placed the call, and you know you are dealing with a trusted business. If you get a call and it sounds like it’s from a trusted institution, hang up, look up and call the customer service number and find out whether that business truly needs your information. Better safe than sorry!

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Now that presidential candidates, senators and the Federal Reserve have all weighed in with their thoughts on credit card reform, it looks like the House of Representatives has decided to have its turn.

House Financial Institutions and Consumer Credit Subcommittee Chairwoman Carolyn B. Maloney today introduced the “Credit Cardholders’ Bill of Rights Act of 2008” (H.R. 5244), “comprehensive credit card reform legislation aimed at leveling the playing field between credit card companies and consumers.”

The bill is aimed at “major industry abuses that unfairly hurt consumers while fostering fair competition and free market values,” A summary of the bill provides the highlights:

• Requires card companies give cardholders 45 days notice of any interest rate increases.

• Prevents the so-called “universal default” rate increase.
• Prevents the so-called “double-cycle billing” practice.
• Gives cardholders time to pay their bills by requiring card companies to mail billing statements 25 calendar days before the due date (14 days is the current minimum).
• Requires that payments made before 5 p.m. EST on the due date are considered timely.
• Prohibits card companies from charging late fees when a cardholder presents proof of mailing his/her bill within 7 days of the due date.
• Prevents card companies from charging over-the-limit fees on a cardholder with a fixed credit limit.

“A credit card agreement is supposed to be a contract, but in recent years cardholders have lost the ability to say no to unfair interest rate hikes and fees,” said Maloney, a Democrat who represents Manhattan and Queens. “This balanced, moderate bill simply levels the playing field between card companies and cardholders while fostering fair competition and free market values. It sets no rate caps, fees, or price controls, nor does it dictate any business models to card companies.”

The bill has broad Democratic support, with the release naming House Financial Services Committee Chairman Barney Frank and 40 representatives as original co-sponsors.

A spokeswoman for Maloney’s office said hearings are likely to begin in early spring.

Source: CreditCards.com

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It’s something most consumers dread — a debt collector calling to ask about an unpaid credit card debt, past due student loan or medical debt.

Consumer credit counselors, debt collectors and state regulators all agree that ignoring debt collectors’ letters and phone calls is a bad idea. Deal with it, they say, otherwise matters can only get worse.

Experts offer the following 11 tips for dealing with debt collection:

1. Avoid debt collection altogether. Try to negotiate with the original creditor and work out a reasonable payment arrangement before the account is sold to a third-party debt collector.

2. Educate yourself about your rights. The U.S. Federal Trade Commission (FTC) has several publications designed to educate consumers about their rights under the Fair Debt Collection Practices Act. Harassing and nuisance phone calls, threats and abusive language are illegal and should be reported to the FTC and your state attorney general’s office. Find your state attorney general through the National Association of Attorneys General.

3. Take your head out of the sand. Don’t ignore letters or phone calls about debts or court notices about debt lawsuits. The law allows consumers to send written requests for verification of debt within 30 days of being contacted by a debt collector. Don’t dawdle if the debt isn’t yours: Debt collectors can place negative information on your credit report that remains there for seven years, which can affect your ability to get a mortgage or other loans, cheaper car insurance rates or even jobs.

4. Find a consumer lawyer. If you are served with a notice of a lawsuit, find an attorney who specializes in consumer law to represent you in court. Some suits are filed by debt collectors who have little or no proof of the original debt owed, says Mary Spector, an associate law professor at Southern Methodist University’s Dedman School of Law. Depending on the state, the statute of limitations may have expired on the debt. “Without a party appearing in court to challenge the sufficiency of the evidence, the creditor wins — often based on scanty information,” she says. Chances of having the lawsuit dismissed in court may be greater if you show up in court and have representation, Spector says.

5. Keep copies and records. There is no consensus on how long documents should be kept. Some experts say keep them as long as you would keep tax documents; some believe they should be kept for as long as the statute of limitations for the state where the original purchase was made or your home state, whichever is longer. Still, others say keep documents — especially proof of settlement or resolution of debts — forever. If a question ever arises about the debt, you will have documentation.”I still have proof where I paid off my student loans,” says Kurt Johnson, president of the North American Collection Agency Regulatory Association, a group of collection industry regulators from 20 states. “I’ve seen cases where they came after someone after 18 years for a student loan.”

6. Safeguard bank accounts. Debt collectors can file suit against consumers for nonpayment of debts. Freezing savings or checking accounts is one of the court-ordered options for collecting debts. This can be extremely problematic for family budgets and cash flow, and experts advise having separate bank accounts for funds such as Social Security or disability checks, which are exempt and cannot be used as a source of court-ordered debt payments. “I would urge people not to co-mingle other funds into the bank account to which the Social Security and disability payments are going. That would help a lot of people,” says Rozanne Andersen, executive vice president of ACA International, the largest credit and debt collection industry trade group. “It would be a lot easier for the consumer to clarify to the debt collector that the only funds in this account are my Social Security payments.”

7. Don’t make it too easy. Some experts say consumers should avoid giving debt collectors their bank account and routing numbers. Make payments with money orders or some other third-party payment service so that you have proof of payment but avoid paying with a personal check. They also advise against allowing collectors to make direct electronic withdrawals from bank accounts.

8. Record conversations. If abusive language or threats are used, recording the conversation will document it. In a dozen states, you need the other party’s permission to record the conversation. “I just feel that that’s a prudent thing to do if you’re really in a pickle and you’re getting lots of collection calls,” says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. “I doubt that anyone would cross any of those lines if they know the call is being taped.”

9. Get it in writing. Any agreements for making debt collection payments should be confirmed in writing and signed by a representative of the debt collector before sending in any payments. This avoids misunderstandings about the amounts to be paid or time period to make payments.

10. Certify that mail. Letters can be lost in the mail. Most experts advise sending all correspondence with debt collectors via certified mail; some suggest getting a return receipt as proof that your letter was received.

11. Debt management. Find an accredited counseling agency to help you sort through the bills and draft a payment plan. “If a client is enrolled in our program, generally, creditors, if they have questions, will call us,” says Leesa Kumley, an accredited counselor for nonprofit Pioneer Credit Counseling of Rapid City, S.D. The two major accrediting agencies for credit counselors are the National Federation of Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. Work out a payment plan that works for your family budget. The FTC advises consumers to avoid for-profit credit repair companies.

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Americans love the convenience of shopping online, but many still get a twinge of nervousness when typing that credit card number into the computer, and those who have the least harbor the most fear.

That’s the major finding of research released this month by the Pew Internet & American Life Project.

Americans have largely gotten over their initial resistance to using their credit cards online, with 66 percent of those who have online access saying they have purchased a product online. But ambivalence remains: Three out of four Internet users either agree or strongly agree that they don’t like giving out their card numbers or personal information online.

“Our analysis suggests that if concerns about the safety of the online shopping environment were eased and if shoppers felt that online shopping saved them time and was convenient, the number of online shoppers would be higher,” concludes John Horrigan, associate director at the nonprofit research firm.

There are billions of dollars at stake in easing those doubts. If retailers and the card industry can allay the lingering fears — something that the steady drumbeat of identity theft reports makes unlikely soon — the number of Americans willing to shop online would rise from 66 to 73 percent, the study estimates. The amount of money spent online, which stood at $34.7 billion in the third quarter of 2007, would rise accordingly.

Gender and race have little to do with people’s attitudes toward shopping online, but income is a very large factor.

If you compare people in households with less than $25,000 in income and compare them to those in households with annual incomes of $100,000 or more, those with less are far more nervous about using credit cards, and far less likely to describe the online shopping experience as convenient.

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Having stunned investors one week ago by unexpectedly slashing short-term interest rates, the Federal Reserve appears poised to announce another rate cut on Wednesday as insurance against a recession.

But policy makers face difficult questions about how deep to cut rates, given that a recession has yet to materialize and that inflation pressures remain a nagging concern in the background.

On Wall Street, where the clamor about a recession remains at a fever pitch, investors are betting heavily that the central bank will lower the overnight federal funds rate by an additional half a percentage point, to 3 percent.

That decrease would come on top of last week’s surprise reduction of three-quarters of a percentage point, and could set the stage for lower interest rates on home equity loans, car loans and business lending.

But the outcome of the meeting is far from certain. While recent data on the housing market and retail sales has reinforced the impression of a stalling economy, economists were surprised on Tuesday by an unexpectedly strong jump in orders for durable goods in December.

The Commerce Department reported that orders for all durable goods — big-ticket items like commercial aircraft and auto parts — jumped 5.2 percent last month. Excluding orders for transportation goods, which are volatile from month to month, orders climbed 2.6 percent, the first increase since September.

Ben S. Bernanke, the chairman of the Federal Reserve, and other Fed officials are already under fire from two directions. Many analysts on Wall Street complain that the central bank has moved too slowly in response to signs of a faltering economy. They point to a plunge in housing that does not seem to have hit bottom, slowing growth in retail sales and tight credit.

But a significant minority of economists argue that policy makers have let themselves be unnecessarily alarmed by panicky swings in the stock market. If the central bank props up the economy with easy money, they warn, the result will be higher inflation in the future.

Richard DeKaser, chief economist at the National City Corporation, a Cleveland bank, is skeptical that the economy is headed for a recession, despite the common assumption that it is. “Few seem to take seriously the prospect that we are not going into a recession,” said Mr. DeKaser, who cites the latest labor market data, showing fewer weekly claims for unemployment benefits and encouraging layoff numbers, which suggest to him that the nation has added a hefty number of jobs in January.

And despite the huge losses and write-offs stemming from subprime mortgages, he added, business borrowers have yet to face a credit squeeze.

Members of the central bank’s Federal Open Market Committee, which decides interest rates, have shown clear signs of disagreement among themselves.

At the meeting last week, conducted by videoconference, the president of the Federal Reserve Bank of St. Louis, William Poole, voted against any rate cut. The committee’s previous rate cut, in December, a quarter-point cut to 4.25 percent, provoked a dissent from another member, the president of the Boston Fed, Eric S. Rosengren. He wanted a bigger reduction.

Fed officials acknowledged this month that they had lowered their forecasts for economic growth this year, even though their previous forecast had already assumed a slowdown in the first half of this year.

Mr. Bernanke acknowledged on Jan. 10 that the housing market was still in a free fall and that the turmoil in subprime mortgage markets had shaken the broader credit markets.

Warning that financial markets were “fragile” and that the labor market appeared to be weakening, Mr. Bernanke bluntly declared that “additional policy easing may be necessary” and that the Fed stood ready to take “substantive additional action.”

When the Fed surprised investors by cutting its overnight rate at an unscheduled meeting on Jan. 22, officials left little doubt that they would lower the rate yet again at their regularly scheduled two-day policy meeting this Tuesday and Wednesday.

To the extent that investors remain fearful about credit risks, markets for mortgage-backed securities are likely to remain dysfunctional and banks will be forced to write down even more of their loan portfolios. That could aggravate a broader credit problem, which in turn could slow investment and economic activity.

But analysts say Mr. Bernanke faces a difficult challenge in trying to manage expectations. On the one hand, they say, the Fed wants to act decisively enough to reassure investors and the public that it will prevent the economy from sinking. On the other hand, they say, Mr. Bernanke does not want to be seen as panicking in response to a plunge in the stock market.

Fed officials say they have changed their outlook primarily because of considerably grimmer economic data over the past month. Net job creation almost stopped in December, and unemployment jumped to 5 percent, from 4.7 percent.

Mr. Bernanke made it clear in his speech on Jan. 10 that the Fed was paying particular attention to the housing market, and the recent data had been unremittingly bad. New-home sales in December dropped 4.7 percent, to an annualized rate of 604,000 units — down 41 percent from a year earlier and the lowest level in 13 years.

On Tuesday, Standard & Poor’s, the bond ratings agency, reported that its S.& P./Case-Shiller index of home prices dropped at a record rate in November. The index for 10 major metropolitan areas was down 8.4 percent from a year earlier.

Source: NY Times

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