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FHA guidelines we've been told to look forward to in the Spring are

• The requirement for higher credit scores to qualify for the low down payment option. In fact, scores under 600 may knock you out of the running immediately; and it isn't just FHA loans, it is also conventional mortgage loans.
• Higher mortgage insurance premiums. The upfront mortgage insurance premium will go from 1.75% to 2.25%.
• Fewer seller concession. Historically six percent seller concessions were acceptable across the board, FHA and conventional. Now the FHA is expected to allow only a three percent contribution from the seller.

So, in order to get a mortgage, you're going to need more cash (higher down payment and covering the closing costs with reduced assist from the seller) and, maybe even more importantly, a higher credit score. Look for articles on upping your score here in the next few weeks. We're doing a ten part newsletter called "Credit Score Survival for the American Consumer".

As for having more money . . . Well, we're all working on that one, aren't we!

Today a law goes into effect that could actually help your financial profile.  The credit card reform laws are designed to protect consumers, and they may in fact do so.

• A newly opened account must keep the opening interest rate for 12 months; if it changes after the first 12 months, it is only for future purchases, not the balance you may be carrying for your first year's purchases. Delinquencies on the account, hardship arrangements on past dues may be exceptions, so pay those bills on time.
• College kids will find it harder to get credit (HOORAY). You'll probably need a co-signer or a job that will pay enough to support your bill.
• Over-limit fees are out of the ballgame unless you opted to have the protection and consent to pay for it.
• If you don't like the new terms on your credit card, opt out of the contract. They can close your account, but you will be given options regarding paying off the debt.
• Changes to the terms of your agreement must be given to you 45 days in advance, instead of the previous 15.
• Your bill is now due on the same date every month. No more calculating billing period from month to month!
• Universal default, raising your interest rate on one card because you were late on other bills, is out the door.
• Statements must be mailed 21 days ahead of the due date.

These are very positive changes to the way the American Consumer has been treated in the past. Use the assist wisely!

Rep. Barney Frank, Chairman of the House Financial Services Committee wants more regulations for wall street, and to pass laws "addressing" executive compensation.  I'm guessing "address" here means limit.

Obama's 'banking czar' Paul Volcker has his reform proposal, and it seems everyone in the country who doesn't make as much money as wall streeters or bankers wants them to make less.

I think truly those people would probably be happy if they made more, but since most of us  don't see million dollar bonuses in our futures, we think about how much those guys are making.  Especially since most of them are still making it and some of us are making nothing.

We have a couple of issues here - everyone is unhappy, and with reason, over what the financial markets have managed to do to us, and at the same time, do for them.

So lets look again at what they did:

At the most simplistic level:

1. They came up with dozens of ways to make money - they came up with new products to sell to everyone from other investment banks to institutional investors, to those people who had never paid a bill in their life, but still wanted to own their own homes.
2. They did this with encouragement from the Clinton Administration (changes to Fannie/Freddie guidelines to assist more people into home ownership)
3. They did it with help from the Federal Reserve (who kept credit really really cheap, not just for institutions, but for EVERYONE in the country)

Am I okay with it?  Hardly.  My life has been turned inside out.  But I believe that the people who are trying to FIX this problem don't understand exactly how we got where we are. 

Read any book written on Lehman Brothers, they'll all tell you that Lehman Brothers Chairman and CEO Richard Fuld - who by the way made over $30 million the last year his company was still breathing - didn't understand the markets and what his people were doing to them and doing with them.  

And not to just pick on Dick Fuld (although a lot of people will agree with me that he deserves it), Long Term Capital Management's John Meriweather wasn't aware that his traders were hanging him out to dry.  That was the first of the almost crippling blows to the economy. 

And it should have been the first red flag that maybe, just maybe, leveraging capital (someone else's capital) to the tune of 40 to one may have been more than just a bad idea.

I don't think it is possible for people completely outside the hallowed money walls to get to the root, fix it, and keep the US afloat while they do it.  Hell, the Fed and the SEC weren't doing anything when those guys were playing fast and loose with our lives and our livlihoods, how can Senators and Congressmen begin to get a grasp now and figure it out, then make the necessary corrections?

I read in THE WEEK's Confidential Intelligence Briefing (touted as some of the most intriguing information and opinion printed in THE WEEK in the last year):

 

A new study revealed that "functional psychopaths" make better investors, [and] CEOs ... than normal people because they lack normal human emotions.

I don't know who did the study, and I don't care.  It makes a good story, doesn't it?  And those Wall Street Guys that dreamed up those products, sliced and diced credit derivatives, and sold them off in a thousand different directions, they made great investors, didn't they? Most of them? The ones we've heard about?  They made money for themselves and for the financial institutions for whom they worked. Trouble is, they made if off the backs of their countrymen, and the backs of half the world, and that's not okay with us.

But I fear the worst from those who run out screaming now that they will fix this and fix that. Why didn't they notice when it was happening? Why didn't anyone get a handle on it then?

And, really, how'd they get so much smarter here lately?

If the coffee you drink could change the world, would you change the coffee you drink?

I've just met some people that I'm really happy to know, the folks at LaEsperanza Farms, a coffee grower in Venezuela.

They have several things going for them . . . one of which is they have fresher coffee than you've ever tasted, unless you visit coffee plantations!

Whether you call it coffee, cafe, Kaffe, or a cup of joe; whether you prefer brewed, french press, cappucino, expresso, turkish, or any of the many ways it is prepared; whether you get your coffee from Starbucks™, Dunkin Donuts™, your local roaster, or the Internet, Harvest fresh coffee will give you a whole new appreciation for a fine cup of coffee.

The other thing going for them is that ALL their profits go to support African relief. that's the reason this is their logo

It is their goal to change the world. Want to help? Shop for coffees . . . delivered to your door. Fresher coffee than you've ever tasted.

Buy for your home, for your office, for gifts.

Buy it to change the face of the world.