Just When You Thought We Were Done Talking About All-Time Lows

Mortgage rates plunged well into new all-time lows this week, which is a striking turn of events given the vastly different outlook at the end of last week.

Specifically, a series of strong economic reports led to significant losses in the bond market (bond losses = higher rates) and gains in stocks. The unspoken warning was that rates had been too complacent in the face of a potential economic rebound.  

Now this week, markets are singing a different tune. Recently strong economic data was great to see, but with coronavirus numbers spiking in several states, the sustainability of the economic improvement is in question.

Sentiment shifted on both sides of the market with stocks giving signals that their recent gains may have been a bit too euphoric. The result was the biggest sell-off since March. 

Conversely, the bond market had its best week since March, and again, when the bond market is doing well, rates are falling.  The 10yr Treasury yield moved all the way back into the range it had so abruptly departed last week.

20200612 NL1

The news was even better for mortgage rates, which hit new all-time lows by Thursday afternoon.  Considering the chart above shows gradual upward movement in 10yr Treasury yields over the past few months, how is it that mortgage rates continue hitting record lows?

Simply put, mortgages never improved as quickly as Treasuries on the way down.  So even if Treasury yields remain flat to slightly higher, mortgage rates have some room left to close some of this gap.

20200612 NL3

The mortgage market received another vote of confidence this week from the Fed.  Although the Fed was already buying huge amounts of Treasuries and mortgage-backed bonds, they were doing so on an “emergency” basis.  That meant the amount had been changing every week (and generally declining).  The fewer bonds purchased by the Fed, the worse it could be for rates.

With this week’s announcement, the Fed officially committed to buy at least as much as they have been buying, thus providing certainty about demand in the bond market.  This move wasn’t necessarily unexpected, but the confirmation was worth something–especially for the mortgage bond market which tends to play second fiddle to Treasuries as far as the Fed is concerned. 

In separate news, the Fed also released a quarterly update to its economic forecasts.  They now see the Fed Funds Rate remaining at 0% through 2022.  At first glance, some mortgage shoppers might think this has a bearing on mortgage rates, but it is almost completely unrelated.

The Fed Funds Rate applies to overnight loans between large financial institutions.  Mortgage rates are based on mortgage-backed bonds which tend to have life spans measured in years instead of hours.  The low Fed Funds Rate will keep the shortest-term rates near 0%, but longer-term rates will continue to fluctuate based on the economic outlook, inflation, and the supply/demand equation (which is greatly benefited by the Fed’s bond buying commitment).  

As for the road ahead, everyone would like to know if we’ll continue deeper into all-time low mortgage rates.  After all, the answer to that question looked very different last week.  

Notably, the x-factor was a shift in the coronavirus narrative.  As states gradually reopen, it’s safe to assume that markets will continue to take major cues from covid-19 numbers and the resulting impact on the economy.  The better it goes, the more upward pressure we might see on rates.  The worse it goes, the greater the possibility of a return to all-time lows.

There is an important caveat here.  The benefit of waiting to lock a rate for those in a position to do so is arguably too small to take the risk.  Each time we hit all-time lows, the incremental improvements get smaller and smaller, and the risks increase for a bigger-picture bounce.

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10 Steps for Building Your Business Credit Rating

Like personal credit, it’s important to regularly monitor your business credit. Having a business solid score can help you in a number of ways, including:

  • Obtaining a business loan or line of credit more easily and with better terms;
  • Convincing suppliers to extend business credit and/or offer you better payment terms; and
  • Boosting your business’ reputation with potential partners, vendors, and suppliers.

You should begin building your business credit rating as soon as your business is up and running. And if you’re already going, it’s never too late to start. Here are some ways to do it.

1. Consider Incorporating or Forming a Limited Liability Corporation (LLC)

If your business is a sole proprietorship, it may be harder to keep your business and personal finances separate. Building business credit is one reason why forming an LLC or corporation could be the right structure for your business. A Limited Liability Corporation (LLC) combines the limited liability of corporations with certain tax benefits.

2. Obtain Your Employee Identification Number (EIN)

Get an EIN for your business. This 9-digit number, like a Social Security number for businesses, is assigned by the IRS. Having an EIN number can make it easier to open a bank account or secure funding from lenders.

3. Separate Business and Personal Funds

It’s a best practice to operate your business as a separate financial entity. Opening a business bank account and keeping personal and business funds separate not only provides an opportunity to build business credit, but it can also simplify tax preparation.

4. Separate Business and Personal Credit

Business loans—in addition to helping keep your personal and business finances separate—can help build your business credit as well as categorize and track expenses.

5. Pay Your Bills on Time

Paying all of your debts on time—including payments to utility companies, vendors, landlords, credit-line payments, and business credit card companies—is critical to building a strong business credit rating.

6. Have More Credit Available Before You Need It

Consider how much available credit you want on-hand as a financial cushion if you run into a cash flow crunch. If you have more credit available than you need, and keep your utilization across each line of credit to less than 30% you’ll gradually build your business credit rating.

7. Get a Business Loan to Help Manage Cash Flow and Expansion Goals

Business loans and lines of credit are powerful tools for funding necessary expenses, including hiring, marketing, or covering unexpected emergencies. They also enable you to grow your business without relying on high-interest credit cards. They’re a great way to build your business credit rating.

8. Verify Your Information

Make sure the three major business credit reporting agencies have complete and accurate information on your business, including your EIN. Keep them updated on any changes to your business, such as a new address or contact information. Quickbooks Capital partnered with a leading agency, Dun & Bradstreet to provide a free business credit score to to help Quickbooks customers get a better handle on their score.

9. Be Sure Your Creditors Are Reporting Your Payments to the Business Credit Bureaus

Not all companies report payments to the business credit bureaus. Therefore, you may have to ask your vendors directly to do this on your behalf. Quickbooks Capital reports to the agencies to help customers build their credit score.

10. Check Your Business Credit Report Regularly

Once a quarter, check your business credit report and your business credit rating with each of the three credit bureaus. If you spot any errors or inaccuracies, take steps to correct them. You’ll also be able to see if your credit rating is declining for legitimate reasons, such as late payments or overused credit, and take steps to change that behavior. If you’re a Quickbooks Capital customer, you may already have access to a free score provided to our customers by Dun & Bradstreet.

A strong credit rating is critical for small business. Taking these long- and short-term steps can help you have more and better options available when you decide to seek additional funding for your business.

Apple could announce move to put its own chips in Macs during WWDC event: report – MarketWatch

Apple Inc. undefined could make an announcement as soon as this month about its plans to put its own main processors in its Mac computers, according to a…
— Read on www.marketwatch.com/story/apple-could-announce-move-to-put-its-own-chips-in-macs-during-wwdc-event-report-2020-06-09

Apple Preparing Monthly iPad, Mac Payment Plans for Apple Card

Mark GurmanBloombergJune 6, 2020

(Bloomberg) — Apple Inc. is preparing to allow customers to buy many of its products, including iPads, Macs and AirPods, over monthly installments via its Apple Card credit card.

The Cupertino, California-based technology giant is planning to roll out the service in the coming weeks, according to people familiar with the plan. The offering will let customers buy a product through Apple and split up the cost over several months with interest-free payments.

The company will offer a 12-month interest-free payment plan for iPads, Macs, the Apple Pencil and iPad keyboards, as well as the Mac XDR Display monitor, and six months with no interest for the AirPods, Apple TV, and HomePod, the people said.

An Apple spokeswoman declined to comment.

The payments will be managed through the Apple Card section in the Wallet app on the iPhone and charges will be added to a customer’s monthly Apple Card bill. Apple started a similar program for the iPhone last year, offering 24 months no interest.

The program is similar to those by carriers selling phones and other products, offering consumers another avenue to purchase these items with monthly payments.

The service is also designed to spur enrollment for the Apple Card, a joint effort with Goldman Sachs Group Inc., and boost sales of Apple products by letting users split up the cost over time. It will be compatible with Apple’s education discounts, the people said.

Apple Chief Executive Officer Tim Cook said on the company’s second-quarter earnings call in April that the company would launch an installment payment service for products beyond the iPhone, but he didn’t specify timing or features.

For more articles like this, please visit us at bloomberg.com

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©2020 Bloomberg L.P.

Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, by Keeanga-Yamahtta Taylor (University of North Carolina Press) – The Pulitzer Prizes

The 2020 Pulitzer Prize Finalist in History
Finalist: Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, by Keeanga-Yamahtta Taylor (University of North Carolina Press)
A deeply researched and rigorously argued account of the public-private partnership that replaced redlining with even more predatory and destructive practices.

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Race for Profit
By Keeanga-Yamahtta Taylor

 
By the late 1960s and early 1970s, reeling from a wave of urban uprisings, politicians finally worked to end the practice of redlining. Reasoning that the turbulence could be calmed by turning Black city-dwellers into homeowners, they passed the Housing and Urban Development Act of 1968, and set about establishing policies to induce mortgage lenders and the real estate industry to treat Black homebuyers equally. The disaster that ensued revealed that racist exclusion had not been eradicated, but rather transmuted into a new phenomenon of predatory inclusion.

Race for Profit uncovers how exploitative real estate practices continued well after housing discrimination was banned. The same racist structures and individuals remained intact after redlining’s end, and close relationships between regulators and the industry created incentives to ignore improprieties. Meanwhile, new policies meant to encourage low-income homeownership created new methods to exploit Black homeowners. The federal government guaranteed urban mortgages in an attempt to overcome resistance to lending to Black buyers – as if unprofitability, rather than racism, was the cause of housing segregation. Bankers, investors, and real estate agents took advantage of the perverse incentives, targeting the Black women most likely to fail to keep up their home payments and slip into foreclosure, multiplying their profits. As a result, by the end of the 1970s, the nation’s first programs to encourage Black homeownership ended with tens of thousands of foreclosures in Black communities across the country. The push to uplift Black homeownership had descended into a goldmine for realtors and mortgage lenders, and a ready-made cudgel for the champions of deregulation to wield against government intervention of any kind.

Narrating the story of a sea-change in housing policy and its dire impact on African Americans, Race for Profit reveals how the urban core was transformed into a new frontier of cynical extraction.

— from the publisher

BIOGRAPHY

Keeanga-Yamahtta Taylor is assistant professor of African American studies at Princeton University and author of From Black Lives Matter to Black Liberation and How We Get Free: Black Feminism and the Combahee River Collective.

— Read on www.pulitzer.org/

Here’s how unpaid debt is handled when a person dies

PUBLISHED THU, MAY 28 20207:58 AM EDTUPDATED THU, MAY 28 20209:06 AM EDTSarah O’Brien@SARAHTGOBRIEN

  • Creditors generally try to collect what’s owed to them by going after the decedent’s estate during a process called probate.
  • There are instances, however, where the surviving spouse, or another heir, may be legally responsible.
  • Some assets don’t count as part of a person’s estate for probate purposes.

It’s not unusual for a person to pass away and leave behind some unpaid debt.

For the heirs — typically the surviving spouse or children — the question often is what, exactly, happens to those obligations. The answer: It depends on both the type of debt and the laws of the state.

A person’s assets — no matter how meager or massive — become their “estate” at death. That includes their financial accounts, possessions and real estate. And, generally speaking, it’s the estate that creditors go after when they try to collect money that they’re owed.

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“Fortunately for surviving spouses or other beneficiaries, in most cases that debt isn’t something they’d be responsible for,” said certified financial planner Shon Anderson, president of Anderson Financial Strategies in Dayton, Ohio.

However, there are some exceptions.

First, though, some basics.

The process of paying off all your debt after your death and then distributing any remaining assets from your estate to heirs is called probate. Each state has its own laws governing how long creditors have to make a claim against the estate during that time. In some places it’s a few months. In other states, the process can last a couple of years.

WATCH NOWVIDEO01:05Key steps you need to establish an estate plan

Each state also has its own set of rules for prioritizing debt that should be paid from the estate, said Steven Mignogna, a fellow with the American College of Trust and Estate Counsel.

“In most states, funeral expenses take priority, then the cost of administering the estate, then taxes and then most states include hospital and medical bills,” Mignogna said.

However, he added, not all of a person’s assets necessarily are counted as part of an estate for probate purposes.

For instance, with life insurance policies and qualified retirement accounts (e.g., a 401(k) or individual retirement account), those assets go directly to the person named as the beneficiary and are not subject to probate. Additionally, assets placed in certain types of trusts also pass on outside of probate, as does jointly owned property (e.g., a house) as long as it is titled properly.

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In fact, a person could pass away with an insolvent estate — that is, one lacking the means to pay off its liabilities — and yet have passed on assets that didn’t go through probate and generally can’t be touched by creditors.

However, a handful of states have “community property” laws, which make debt at death a bit more complex.

Generally, those states view both assets and certain debt that accumulated during the marriage as equally owned by each spouse — meaning a surviving spouse could be responsible for paying back the debt, even if it was only in the decedent’s name.

“Debt that couldn’t have been avoided during the marriage — like medical expenses or a mortgage — generally becomes the responsibility of the surviving spouse in community property states,” said CFP Bill Simonet, principal advisor at Simonet Financial Group in Kyle, Texas.

6 Things Your Mortgage Lender Wants You To Know About Getting a Home Loan During COVID-19

1. Rates have dropped, but getting a mortgage has gotten more complicated

First, the good news about mortgage interest rates: “Rates have been very low in recent weeks, and have come back down to their absolute lowest levels in a long time,” says Yuri Umanski, senior mortgage consultant at Premia Relocation Mortgage in Troy, MI.

That means this could be a great time to take out a mortgage and lock in a low rate. But getting a mortgage is more difficult during a pandemic.

“Across the industry, underwriting a mortgage has become an even more complex process,” says Steve Kaminski, head of U.S. residential lending at TD Bank. “Many of the third-party partners that lenders rely on—county offices, appraisal firms, and title companies—have closed or taken steps to mitigate their exposure to COVID-19.”

Even if you can file your mortgage application online, Kaminski says many steps in the process traditionally happen in person, like getting notarization, conducting a home appraisal, and signing closing documents.

As social distancing makes these steps more difficult, you might have to settle for a “drive-by appraisal” instead of a thorough, more traditional appraisal inside the home.

“And curbside closings with masks and gloves started to pop up all over the country,” Umanski adds.

2. Be ready to prove (many times) that you can pay a mortgage

If you’ve lost your job or been furloughed, you might not be able to buy your dream house (or any house) right now.

“Whether you are buying a home or refinancing your current mortgage, you must be employed and on the job,” says Tim Ross, CEO of Ross Mortgage Corp. in Troy, MI. “If someone has a loan in process and becomes unemployed, their mortgage closing would have to wait until they have returned to work and received their first paycheck.”

Lenders are also taking extra steps to verify each borrower’s employment status, which means more red tape before you can get a loan.

Normally, lenders run two or three employment verifications before approving a new loan or refinancing, but “I am now seeing employment verification needed seven to 10 times—sometimes even every three days,” says Tiffany Wolf, regional director and senior loan officer at Cabrillo Mortgage in Palm Springs, CA. “Today’s borrowers need to be patient and readily available with additional documents during this difficult and uncharted time in history.”

3. Your credit score might not make the cut anymore

Economic uncertainty means lenders are just as nervous as borrowers, and some lenders are raising their requirements for borrowers’ credit scores.

“Many lenders who were previously able to approve FHA loans with credit scores as low as 580 are now requiring at least a 620 score to qualify,” says Randall Yates, founder and CEO of The Lenders Network.

Even if you aren’t in the market for a new home today, now is a good time to work on improving your credit score if you plan to buy in the future.

“These changes are temporary, but I would expect them to stay in place until the entire country is opened back up and the unemployment numbers drop considerably,” Yates says.

4. Forbearance isn’t forgiveness—you’ll eventually need to pay up

The CARES (Coronavirus Aid, Relief, and Economic Security) Act requires loan servicers to provide forbearance (aka deferment) to homeowners with federally backed mortgages. That means if you’ve lost your job and are struggling to make your mortgage payments, you could go months without owing a payment. But forbearance isn’t a given, and it isn’t always all it’s cracked up to be.

“The CARES Act is not designed to create a freedom from the obligation, and the forbearance is not forgiveness,” Ross says. “Missed payments will have to be made up.”

You’ll still be on the hook for the payments you missed after your forbearance period ends, so if you can afford to keep paying your mortgage now, you should.

To determine if you’re eligible for forbearance, call your loan servicer—don’t just stop making payments.

If your deferment period is ending and you’re still unable to make payments, you can request delaying payments for additional months, says Mark O’ Donovan, CEO of Chase Home Lending at JPMorgan Chase.

After you resume making your payments, you may be able to defer your missed payments to the end of your mortgage, O’Donovan says. Check with your loan servicer to be sure.

5. Don’t be too fast to refinance

Current homeowners might be eager to refinance and score a lower interest rate. It’s not a bad idea, but it’s not the best move for everyone.

“Homeowners should consider how long they expect to reside in their home,” Kaminski says. “They should also account for closing costs such as appraisal and title insurance policy fees, which vary by lender and market.”

If you plan to stay in your house for only the next two years, for example, refinancing might not be worth it—hefty closing costs could offset the savings you would gain from a lower interest rate.

“It’s also important to remember that refinancing is essentially underwriting a brand-new mortgage, so lenders will conduct income verification and may require the similar documentation as the first time around,” Kaminski adds.

6. Now could be a good time to take out a home equity loan

Right now, homeowners can also score low rates on a home equity line of credit, or HELOC, to finance major home improvements like a new roof or addition.

“This may be a great time to take out a home equity line to consolidate debt,” Umanski says. “This process will help reduce the total obligations on a monthly basis and allow for the balance to be refinanced into a much lower rate.”

Just be careful not to overimprove your home at a time when the economy and the housing market are both in flux.

For more smart financial news and advice, head over to MarketWatch.Lauren Sieben is a writer in Milwaukee. Her work has appeared in the Guardian, Washington Post, Milwaukee Magazine, and other outlets. Follow @laurensieben

Microsoft Issues Windows 10 Update Warning

05/29 Update below. This post was originally published on May 28

Microsoft has made a massive new Windows 10 upgrade available to users around the world. Unfortunately, the company has also confirmed it is full of problems. 

Microsoft, Windows 10, Windows, Windows 10 update, Windows 10 problem, Windows 10 upgrade,
Microsoft has warned users a major new Windows 10 update has multiple known issues STEVE KOTECKI

In its official release information for Windows 10 v2004 (also known as the ‘May 2020 Update’), Microsoft has listed 10 significant “Known Issues” which are currently active. These include problems with Bluetooth, audio, gaming, connectivity, graphics card drivers and system stability. 

05/29 Update: picked up by Windows Latest, Microsoft has confirmed additional problems with Windows 10. In a new blog post, the company states that Windows 10 PCs which take advantage of the Fast Start feature (automatically enabled on many modern PCs – here’s a manual How To guide) may not install updates when they are shut down. Instead, users will have to restart their computers for updates to be applied. Microsoft has not put a timeline on a fix for this feature and users concerned about the buggy spate of Windows 10 updates recently may not be too unhappy that they are not installed, but the company has promised “to address this in a future Windows version.”Most Popular In: Consumer Tech

Among these, the most high profile are incompatibilities with certain Nvidia display drivers (details), Conexant and Synaptics audio drivers (details), broken mouse control (details), plugging and unplugging Thunderbolt docks (details), broken variable refresh rates with Intel graphics (details), difficulty connecting to more than one Bluetooth device (details) and unexpected restarts with certain network adapters (details). 

Furthermore, while the May 2020 update does bring some welcome security upgrades, there are some concerns here as well

To its credit, Microsoft has taken two proactive steps. First, it is applying an algorithm which attempts to establish whether your PC will upgrade reliably before starting the update. Second, it is currently only rolling out the May 2020 update to users who “Check for Updates” – although that is admittedly a sizeable number. 

Ultimately, the pros will outweigh the cons in Windows 10 v2004 (there is a lot of good stuff) but there are a number of road bumps to be overcome and I would advise mainstream Windows 10 users stay away from it for the time being. May has been a difficult month for Microsoft with the endless list of problems caused by KB4556799 and it has been in firefighting mode

But right now, Microsoft needs to dust itself down and refill the extinguisher. 

___

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A New Windows 10 Update Just Compromised Google ChromeGordon Kelly

I am an experienced freelance technology journalist. I have written for Wired, The Next Web, TrustedReviews, The Guardian and the BBC in addition to Forbes.

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