Monthly Archives: September 2014

2014
09/26

Category:
Revenue

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Video: Apple Pay Revenue Tied To Mobile Card Share

Apple Pay could bring in anywhere from $300 million to $700 million in US revenue in three to four years, depending on how fast Apples (NASDAQ:AAPL) share of credit-card transactions done with mobile phones grows, analysts say.

Speculation over Apples revenue generation from Apple Pay has continued since the iPhone 6 launch earlier this month.

2014
09/25

Category:
Repairing Credit

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When to Trust or Not Trust a Credit Repair Service

Credit repair can be a very spammy business, so much so that the government has gone to great lengths to regulate the services as much as possible. Even though there are rules that credit repair services must abide by, it doesnt mean that all of them do. So when can you trust your credit repair service? Here are some guidelines to follow:

Not Trust: If they guarantee theyll raise your credit score.

This is a big red flag. Credit reports and the credit bureaus can be fickle. In addition, everyones credit report is different. If your credit report is free of errors and doesnt have much wiggle room for negotiation with lenders, it may be extremely difficult to raise your credit score. If they guarantee they can raise your credit score without even looking at your credit report, it is a good sign that they may just be after your money.

Trust: If they let you drive the ship.

Credit repair services are experts (for the most part) on how to handle credit report situations, so letting them advise you on the areas to focus on can be a good idea. However, if a credit repair service is pressuring you to focus on a certain area of your credit report to fix, especially an area you dont want them to focus on, or is not letting you give any input into what they should be doing, they may be trying to prolong the process, which will cost you more money in the end. Pick a service that is going to let you choose the best plan of action for fixing your credit.

Not Trust: If they make you pay in advance.

The Credit Repair Organizations Act (CROA), which is monitored by the Federal Trade Commission, doesnt allow credit repair services to ask for money unless they have completed services that were already agreed on. Some credit repair services ask for an initial fee, which is legal, but if they ask for payment for services up front before completing any work, that is a big red flag.

Trust: If they have a convenient cancellation policy.

The CROA also specifies that credit repair services must offer certain cancellation rights, which means you should be able to cancel the services within a certain amount of time. Most of the top credit repair services are month-to-month, so you can even cancel after your first month if you are not satisfied.

As an added bonus, a few credit repair services offer a guarantee, not that theyll raise your credit score, but that they will complete the work that you agreed upon. Sky Blue Credit Repair actually offers a guarantee if you were not pleased with their service in any way, which is unusual for a credit repair service.

Not Trust: If everything is not in writing.

By law, all credit repair services must present all contracts in writing. Get everything in writing. Everything. If the service promises things, like raising your credit score or removing a specific item from your credit report, but does not include those promises in your contract, you should think twice before using that service. In general, you should never trust a service that does not include a contract in writing.

Trust: If they make you pull your own credit report.

Credit repair services are not allowed to pull your credit report for you. Some credit repair services have deals with certain credit bureaus, like Experian, so they have access to your Experian credit report without having to pull it. However, any credit repair service that pulls your three-bureau credit report for you is probably not playing by the FTC rules.

Not Trust: If they delay the process.

Credit repair services usually charge by the month, so the longer it takes them to fix your credit, the more they get paid. Stay on top of the credit repair service and make sure they arent delaying things on purpose. If they are disputing a negative item on your report, it is law that the credit bureaus can only take 30 days to make a decision, so if its been over a month, you should contact your credit repair service and ask about the progress.

Not sure which credit repair services to trust? Here is a good comparison of the two top credit repair services, Sky Blue Credit Repair and Lexington Law, as well as a list of the top credit repair services with details about each.

2014
09/25

Category:
Pay Day Loans

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Short Term Lending, Micro Lending And Payday Lending

The economic and financial crisis has created stricter credit
terms for clients to obtain credit from banking institutions. This
has subsequently led to the creation of niche Financial
Institutions providing short-term, unsecured loans to clients who
may need a small amount of money. This activity is commonly known
as micro lending, short term loans or payday loans.

A number of operators in this field have found Malta to have the
right regulatory framework for this type of activity. In fact, the
Malta Financial Services Authority has already licensed a number of
institutions carrying out the business of lending, specializing in
short-term unsecured loans.

An institution providing micro lending is able to grant loans of
small amounts to borrowers, which need to be paid within a period
ranging from 30 days to 6 months. These loans are often required by
clients who are in emergency financial situations and who satisfy
the stipulated minimum requirements posed by the institution
concerned. These usually include the provision of personal
information and a steady income.

There is no fixed interest rate cap in Malta, however any APR
charged should be a reasonable amount for the short term lending
market and the amount of the loan granted has to be proportionate
to the income of the individual.

Full disclosures of all charges, fees and any risks of pay day
lending would have to be made to the clients.

Once a pay day lender obtains authorisation in Malta as a
Financial Institution, it is possible to lend to clients overseas
by means of reverse solicitation.

It is estimated that by 2016, internet payday loans will cover
around 60% of all cash advance loans.

EMD can assist with the structuring, setting up and licensing of
financial institutions providing micro lending, pay-day loans and
short-term lending.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

2014
09/25

Category:
Revenue

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DOF warns of revenue loss equivalent to 1.5% of GDP if tax reform bill is passed

Even as the Department of Finance (DOF) admitted the need to review the Philippines tax system, it warned lawmakers on Wednesday that reducing the individual income tax rates may cause the government to lose revenues totaling as much as 1.5 percent of the countrys Gross Domestic Product (GDP).

DOF Undersecretary Jeremias Paul urged members of the House Ways and Means committee to adopt a holistic approach to studying the proposals to overhaul the income tax system in order to pass legislation that will balance the governments fiscal needs and the taxpayers welfare.

We already see the writing on the wall that both Houses of Congress are dead-set on adjusting income tax rates. Ang pakiusap lang namin is for lawmakers to look at the proposals from a holistic approach. Based on our estimatesdepende sa version [ng bill lowering income tax rates]the revenue hole [this will cause] will be from a low of 0.3 percent of the GDP to as high as 1.5 percent, he said at the panel hearing.

At the sidelines of the deliberation, Paul told reporters that the government stands to lose at least P30 billion if a bill lowering income tax rates is passed.

While Congress works for the passage of the tax reform bill, it should also consider legislating measures to offset the revenue that will be lost from reducing income taxes, the DOF official said.

We need to have a compensating measure. It has to be revenue-neutral. Yun lang naman ang request namin eh, Paul said.

Ways and Means committee chair Rep. Romero Miro Quimbo earlier said they are working on legislating revenue-generating measures at the same time as the tax reform bill.

The House panel is considering the passage of bills imposing excise taxes on carbonated drinks and mining activities to help the government recover the revenue lost due to reduced income tax collection.

Unfair tax system

Despite the DOFs warning about the consequences of reducing income tax rates, Quimbo said it is about time for Congress to overhaul what he described as an unfair and inequitable tax system.

The current tax system is unfair because todays wages have been outpaced by the tax rates… The burden of paying for 85 percent of our total individual income tax collection has fallen on ordinary workers who have no choice but to pay taxes because its withheld at source, he said.

Under the existing system of progressive taxation, individuals with a taxable income of at least P500,000 annually are considered to be in the top tax bracket and are taxed 32 percent.

The Philippines has the highest income tax rate among Southeast Asian countries at 32 percent.

For his part, Pasig City Rep. Roman Romulo said overhauling the tax system has become necessary because ordinary workers deserve to have more control over their income.

Panahon na para tingnan naman ng DOF yung other side, which is yung [kapakanan] ng taxpayers. kapag naman binawasan ang income tax rate, tataas ang spending power ng mga mamamayan. Mababawi pa rin ng gobyerno yung nawalang revenue mula sa income tax collection, he said.

On Monday, leaders of the House of Representatives and Senate agreed to fast-track deliberations on a comprehensive tax reform bill after including it in the list of priority measures it intends to pass as soon as possible.

Quimbo said Congress targets the passage of the law reducing income tax rates by next year. BM, GMA News

2014
09/24

Category:
Mortgages

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BofA Execs Promise Restraint on Mortgages

And while mortgages will continue to be an important arena for the bank, “we’re building it the right way,” said Dean Athanasia, who spoke Tuesday with co-head Thong Nguyen at the RBC Capital Markets financial conference in Boston.

“It is going to be a steady business for us,” Mr. Athanasia continued. “We’re not going to get into correspondent. We’re not going to do things to attract all sorts of non-customers.”

Call it a lesson learned for Bank of America, once the biggest mortgage lender in the US and a bellwether for the rest of the industry – and a primo target for the regulatory investigations and customer lawsuits that flowed from the financial crisis.

If anything, Mr. Athanasia’s statement renews a commitment to changes the bank has already made. In 2010 and 2011, the bank broke from its biggest competitors and stopped buying mortgages made by other lenders and brokers, focusing instead on only those mortgages that were made by Bank of America employees. The bank has also pivoted to focus on making mortgages only to people who are already Bank of America customers, a strategy that it is matching throughout the consumer bank. For example, bringing in a new credit-card customer via direct mail costs the bank about $250, Mr. Nguyen said. Getting a current Bank of America customer to open a credit card costs the bank about $35.

The changes are meant to rein in risk at the bank, which found itself with more than enough of it after buying Countrywide Financial Corp., a lender known for exotic mortgages, in 2008.

But the changes also mean that Bank of America is a much smaller player in mortgages than it used to be, and some investors wonder if the slimmed-down mortgage unit missed out on some of the benefits of the refinancing boom over the last few years. Bank of America makes less than 5% of the mortgage loans in the US Thats down from nearly 22% in 2009, after it bought mortgage lender Countrywide, according to the trade publication Inside Mortgage Finance.

Wells Fargo amp; Co. and JP Morgan Chase amp; Co. have a bigger percentage of the overall mortgage market, though they still get a significant proportion of their mortgage revenue by buying mortgages from third parties. (Measuring just retail mortgages made directly to customers, Bank of America is No. 2 behind Wells Fargo and controls more than 7% of the market, according to IMF.)

Tuesday’s presentation marked the first public appearance for Mr. Athanasia and Mr. Nguyen since they were named co-heads of the consumer bank last month.

2014
09/24

Category:
Mortgages

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Pundits are trying to bring subprime mortgages back. Don’t let them

Mortgages are hard to get, with demands for high credit scores and a perfect lending history, so some say it’s time to bring back subprime mortgage lending.

This is, obviously, a bad idea. The financial industry has plenty of reasons to offer the same high-risk, high-return loans that made so many bankers rich during the housing bubble before everything crashed. But it’s less clear why any sensible commentator wants to cheer the industry on.

Story after story lately follows the same flawed logic: the shoddy lending that caused the financial crisis has now swung too far in the other direction, preventing deserving people from getting mortgages. The poor or middle class can’t access credit, which is the fault of “over-regulation” of banks.

This strange thinking is becoming more prevalent and commanding larger platforms. For example, Binyamin Appelbaum, in a New York Times magazine story this weekend, wondered if subprime mortgages should make a comeback. “The lending freeze is not just preventing people … from chasing their dreams. It’s bad for the overall economy too.”

Maybe this sounds reasonable to pundits. Lending ran too hot, so obviously now it’s running too cold.

But we should question this perceived wisdom. Instead of just buying the false reasoning that self-interested industry lobbyists whisper in an effort to make regulations disappear, maybe it’s time to look at the other factors holding back the mortgage market.

Former Countrywide CEO Angelo Mozilo became the face of the subprime crisis, leaving behind a trail of homeowners who suffered foreclosure. Some pundits are apparently nostalgic.
Photograph: Kevin Lamarque/ Kevin Lamarque/Reuters/Corbis

The first and most important factor, for instance: most people don’t have any money to buy a house.

The Federal Reserve’s recent survey of consumer finances found that median income dropped 12.4% between 2004 and 2013, a dramatic decline in fortunes. The US Census bureau’s annual poverty report shows that real median household income peaked at $56,895 – all the way back in 1999.

Only incomes at the very top have grown; for everyone else they’ve contracted.

Consider this incredible statistic from the research analyst Redfin: through this April, sales of the McMansions of America – the top 1% of homes by price – rocketed up 21% compared to last year.

But sales of the other 99% of homes were down 7.6%.

In other words, we have two housing markets, one for the rich and one for the rest.

This mirrors our unequal economy generally, and it’s the proximate reason why most Americans feel like we’re still in a recession.

This bifurcation between rich and poor has naturally led to a vanishing of homes for sale in the middle market. New construction has increasingly concentrated on the high end: luxury condos or mini-mansions.

The square footage of homes shot up 9% last year alone, because “that’s where the demand has been”, Sam Khater of research firm CoreLogic told the Washington Post.

Meanwhile, multi-family housing construction has surged, as builders recognize that only rentals or mansions can sell. Since not everybody is in the top 1% – in fact, only 1% are! -this understandably leads to lower overall home purchases.

So it’s not surprising to see a drought in lending, and a reduction in homeownership rates from 69% in 2005 to 65% at the beginning of 2014. It has nothing to do with bank regulation; it has to do with the wrong supply of houses for the current demand.

Yet the drumbeat grows for the return of subprime, with think tanks getting in on the action. An Urban Institute study claims that lenders could issue 1.2m more mortgages simply by returning to the lending standards of 2001.

But economist Dean Baker dispatches with this argument, noting that the housing market was already overheated by 2001, with prices out of line with historical trends.

The only thing “wrong” with the housing market is what’s wrong with the broader economy, and if you want to fix it, you only have a couple solutions: better wages or loans to people who cannot afford them. I know what looks better from here.

In fact, the New York Federal Reserve just ran a study of why younger households, the kind you would expect to step up as first-time homebuyers, are not purchasing mortgages. The only two responses with majority support were “do not have enough money saved, or have too much debt” and “do not make enough money”.

Coming in third place was “my credit is not good enough”, which led the Washington Post’s Dina ElBoghdady to spin an entire article about tight credit as a major factor in the housing slowdown. But the survey respondents could check more than one reason for not buying a home. And if a majority feels they don’t make enough money and carry too much debt to own, of course they would have anxiety over their credit score.

The subprime crisis swept both America and Europe. Here, Ross McEwan, CEO of the Royal Bank of Scotland giving a speech earlier this year on how the bank plans to clean itself up.
Photograph: Lefteris Pitarakis/AP

The Washington Post ran another article stating outright that government regulators – particularly those at mortgage giants Fannie Mae and Freddie Mac – discouraged lending to borrowers with low credit scores. The argument was that Fannie and Freddie purchase a large majority of loans made today, and if they find misrepresentation after the fact, they will demand that the lender buy them back. Because of this tight regulatory noose, ElBoghdady claims, lenders have become more cautious, and refuse to work with low- or moderate-income borrowers.

It’s hardly an original thought, but its origins are chilling. The argument that Fannie and Freddie are killing low-income lending matches precisely with what Wells Fargo CEO John Stumpf and JPMorgan Chase CEO Jamie Dimon argued last month.

But the facts tell a different story. The lenders basically want it both ways: they want Fannie and Freddie to take all the risk while they take all the gains. Freddie Mac’s own inspector general wrote in a 2011 report that the agency did not go after bad loans strongly enough, letting banks off the hook for passing them junk. A subsequent report from the inspector general found Fannie and Freddie negligent in failing to sanction banks over making spurious insurance claims. Fannie and Freddie are hardly tough-as-nails regulators punishing banks; the two agencies could barely review the claims they were supposed to.

Nevertheless, these crocodile tears from the banking industry get an all-too-successful airing. Bankers know that the complaints can act as a lever to pry away pesky regulations that put a limit on irresponsible practices.

The argument that Fannie and Freddie are killing low-income lending matches with what JPMorgan CEO Jamie Dimon argued last month.
Photograph: Chip Somodevilla/Getty Images

For example, the banking industry has backed a House Republican bill called the Access to Affordable Mortgages Act, which would exempt “high-risk” mortgage loans under $250,000 from standards like property appraisals.

This is basically a license to rip off homeowners by removing the safeguard of an independent valuation of the home.

But if banks keep whining that they are prevented from lending to low-income borrowers – and the press gives their argument a helping hand – suddenly this kind of pretext to predatory lending starts to look reasonable.

To see where a return to deregulation can take us, look merely at the fast-decaying market in subprime auto loans, not coincidentally the only lending sector not monitored by the Consumer Financial Protection Bureau, thanks to a legislative carve-out.

Lenders have encountered higher-than-expected defaults, in what could be the beginning of a wider crash. These subprime loans have driven a temporary resurgence in auto production and boosted the economy, but if the market washes out, nobody will say it was worth it.

Banks destroyed the housing market when they were allowed to ignore lending standards and sell whatever loans they wanted with impunity. They’re not exactly disinterested observers when they talk about regulation. Considering that they’re asking for the keys to the sports car they just wrecked, we might want to take their claims with a mountain of salt.

2014
09/23

Category:
Revenue

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Rabbitte rejected plan for Revenue to collect broadcasting charge

Former minister for communications Pat Rabbitte rejected a proposal from civil servants suggesting the Revenue Commissioners collect the new broadcasting charge in the same way as property tax.

Revenue was amenable to collecting the public service broadcasting charge, which will replace the TV licence fee next year, on the same basis as the local property tax; from every household in the country and on a single liability date.

Revenue’s database of properties would have been expected to address the high evasion rate for paying TV licence fees, estimated at 15 per cent. This has led to a revenue shortfall of over EUR25 million a year.

2014
09/23

Category:
Establishing Credit

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TAG Announces New Hire Sharon Barboza as NetSuite Consultant

La Jolla, CA, August 30, 2014 –(PR.com)– TAG, Southern Californias premier NetSuite Solutions Provider and enterprise software consultancy firm announces a new strategic hire within the NetSuite division. With five years of experience as a NetSuite user within Finance, Barboza has worked in all aspects of NetSuite accounting including Fixed Assets, Inventory Cost, Accounts Payable, and Accounts Receivable.

Barboza is a Certified Public Accountant with over 17 years of experience in public accounting and private industry. She has extensive knowledge of accounting principles, financial reporting, taxation policies and hands-on accounting experience with primarily small to mid-sized companies and senior level management positions.

We are fortunate to have Sharon join our NetSuite division at TAG, said Adam Baruh, Director of NetSuite Professional Services. She brings industry experience to our team and is dedicated to optimizing NetSuite for TAG clients and streamlining the implementation process.

Prior to joining TAG, Barboza was the Corporate Accounting amp; Financial Reporting Manager at Memjet Technology and took a leadership role during their global NetSuite ERP implementation and spearheaded the process across four countries. In the role, she coordinated with supply-chain to set up purchasing and procurement systems, designed the fixed assets management and inventory management systems, while establishing credit policies and revenue analysis.

Barboza is a Chartered Global Management Accountant and earned her Bachelor of Science degree in Accounting at the University of Phoenix. She is an active member of CalCPA, AICPA, California Society of CPAs and the Treasurer of High Tech High North County PA.

About TAG:
TAG is an authorized NetSuite Solution Provider and offers valued financial and business resources and counsel for companies and individuals on the move. With over 400 clients in the Southern California region, TAGs partnership with NetSuite provides a revolutionary solution for companies in any stage of growth. TAG is located at 1227 Prospect Street, Suite 200, La Jolla, CA 92037, with additional offices in Rancho Santa Fe, CA and Newport Beach, CA. www.teamtag.net

2014
09/22

Category:
Establishing Credit

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Govt to Mobilise U.S. $250 Million for Farmers

Minister Chinamasa said government had also engaged the banking sector to increase its lending to farmers.

Government acknowledges the role of the banking sector in supporting A2 and other farmers in view of its limited financing capacity. In this regard, the Reserve Bank has engaged the financial services sector in establishing credit facilities under direct bank credit extension to the farmer.

Furthermore, contract farming arrangements will also be available to finance crops such as tobacco, cotton, soya beans, barley among others, he said.

Minister Chinamasa said realising the importance of input suppliers in the agricultural chain, government had made efforts to capacitate suppliers ahead of the forthcoming farming season.

Already obligations related to outstanding debts to input suppliers have been extinguished through a combination of both cash payments and Treasury Bill issuance to the tune of $27,4 million, with a further $30 million in TBs being issued in consultation with CBZ, he said.

Zimbabwes agricultural sector, which had declined over the past decade mainly due to limited funding and poor rainfall patterns, is on the recovery path with output of crops such as maize and tobacco exceeding targets.

Maize output last year reached 1,46 million tonnes from the original target of 1,3 million tonnes while tobacco output surpassed the initial target of 171 million kilogrammes to reach 215,2 million kilogrammes.

2014
09/22

Category:
Mortgages

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Canadian household-debt ratio nears record as mortgages grow

Canadas ratio of household debt to disposable income approached a record high between April and June, underscoring the central banks concern about imbalances in consumer finances.

Credit-market debt such as mortgages rose to 163.6 percent of disposable income, from a revised 163.1 percent in the first quarter, Statistics Canada said Friday in Ottawa. The measure reached a record 164.1 percent in the third quarter of last year, and has averaged 119.7 percent since 1990.