Tax benefit unlikely for making interest payments on mortgage By SCOTT BURNS

Q: I've been wondering about paying off debt.

I'll be 59 old age old in August. I do $100,000-plus today, but who cognizes about tomorrow?

Over the last three years, I have got been making my mortgage payments plus further principal.

Doing that, I have got saved nearly 17 old age of involvement payments at 6 percent. Today the balance is down to less than $30,000.

Should Iodine go on this? The lone ground not to, I think, is the $3,400 involvement write-off astatine the end of the year.

In the adjacent twelvemonth or two, I see myself dropping my income down to $20,000 or $30,000 a year. That would be a semiretirement.

Should Iodine go on to do the $1,200-plus mortgage payments?

Or should I just do the monthly payment and go on to take the involvement write-off?

C.S., by e-mail

A: Wage off the mortgage ASAP. Then begin putting the other money into your retirement portfolio.

While you may have got $3,400 of involvement to subtract each twelvemonth — asset the existent estate taxation taxation deduction — the tax deductions probably aren't doing much to cut down your income tax bill.

Remember, itemized taxation deductions must transcend the criterion tax deduction before they convey any decrease in your income tax bill.

So they have got to transcend $5,450 for 2008 if you are single or $10,900 if you are married.

If you are married and unrecorded in a no-income-tax state like Texas, likelihood are there is no taxation benefit for making involvement payments on a mortgage.

Furthermore, when you travel into semiretirement, you'll happen yourself in a low taxation bracket with no taxation benefit for a 5 percentage or 6 percentage mortgage rate.

Meanwhile, your nest egg may only be earning 3 percentage or 4 percent.

Bottom line: This is a very good clip to be whacking down any debt you have.

Q: I am 72. My hubby is 79. I am dismayed by the last three calendar months in our brokerage firm accounts, particularly after such as a good calendar month in October.

We each have got an individual retirement business relationship account.

Mine is deserving about $149,000, and his is deserving about $225,000. We also have got a joint business relationship worth about $242,000. All three business relationships are invested in common funds.

Should we see purchasing an rente (variable or fixed)? If so, can we take some money from both individual retirement account pots and go forth the joint pot for any near-term emergencies? We owe $38,000 on our comfy little place in a retirement/resort-style community.

We have got a revocable life trust and no recognition card debt. P.R., Seattle

A: Your inherent aptitudes are very good. I don't cognize anyone who have enjoyed examining their business relationship statements for November, December or January. So it's important that you believe more than about how your money is invested than whom it is invested with. That's why I believe your thought of buying an rente — a fixed rente — May be a really good manner to cut down the ups and down feathers of your assets.

A variable rente won't work out the job of marketplace ups and downs. Remember, a variable rente is only a legal negligee for common finances that endows them with taxation deferral. The assets inside the negligee will still travel up and down, just as your common finances do.

But at ages 72 and 79, you can increase your income materially by using some of your money to purchase life annuities. You can scope out the possible range of payments by visiting a Web land site like . While the life rente intends you have got exchanged your principal for a lifespan income, it also intends you'll worry less about the markets. Better still, by increasing your current income through the life annuities, you'll have got less demand for income from your common monetary fund assets.

Another very good measure you should take is to pay off your $38,000 place mortgage. The yearly payments are probably quite high as a per centum of the amount owed, so paying it off would be another measure toward reducing your hard cash necessitates and exposure to marketplace swings.

Questions about personal finance may be sent to: Scott BURNS, P.O. Box 655237, Dallas, Texas 75265; e-mail can be sent to . Burns' Web page is . Universal Joint Press Syndicate

Sub-prime woes hit mortgage giant

Countrywide Financial, the greatest mortgage loaner in the US, have reported a 41% autumn in place loans in January.

Last month, Countrywide funded mortgages totalling $21.9bn (£11.1bn), compared with $37.1bn a twelvemonth ago, while foreclosures reached record highs.

Countrywide said the foreclosure charge per unit among the 9m mortgages for which it accumulates and procedures payments doubled to 1.48%, up from 0.77% A twelvemonth earlier.

Bank of United States in January agreed to purchase the house for $4bn (£2bn).

Many of the weakest marketplaces have got experienced occupation and population losses

Lawrence Yun, economist, National Association of Realtors

Homeowners struggle

The blunt figs demo the troubles emerging in the United States lodging marketplace are hitting lenders.

Countrywide's foreclosure charge per unit have been steadily rising, from December's charge per unit of 1.44% and November's 1.28%.

Foreclosure is the legal procedure taken by mortgage companies when householders neglect to maintain up their loan repayments.

The delinquency charge per unit - a measurement of missed mortgage payments - rose to 7.47% of unpaid balances from 4.32% percentage a twelvemonth earlier.

While the lodging marketplace is struggling a study have suggested that certain countries are more than affected than others.

Mixed market

There have got been fearfulnesses that the problems in the lodging marketplace could direct the United States into a deep recession, but a National Association of Realtors (NAR) study proposes the somberness may be overdone.

rise house PRICES

Cumberland, Maryland: up 19%

Yakima, Washington: up 18%

Binghamton, New York: up 14.8%

Springfield, Illinois: up 14.4%

Atlantic Ocean City, New Jersey: up 10.7%

Source: National Association of Realtors, yearly change

The grouping said terms rose in 73 out of 150 urban countries in the last three calendar months of 2007 from a twelvemonth earlier.

The William Augustus country in rural Old Line State saw the most healthy rises, with 10 other countries recording additions of 10% and more, including Yakima in Washington.

The median value house terms for the state drop 5.8% to $206,200 (£105,121) - the sharpest autumn since records began in 1979.

But the real estate brokers grouping said the typical marketer who purchased their place six old age ago still saw a addition of 31.2%.

Bright pockets

"The healthiest lodging marketplaces today generally are moderately priced and are experiencing occupation growing and often population growth, which in bend is supporting strong terms growth," said Lawrence Yun, NAR's head economist.

FALLING house PRICES

Lansing-East Lansing, Michigan: down 19%

Riverbank and San Bernadino, California: down 17%

Jackson, Mississipi: down 17%

Las Vegas, Nevada: down 13%

Orlando, Florida: down 11.7%

Source: National Association of Realtors, yearly alteration

"Most of the weakest marketplaces have got got either experienced both occupation and population losses, or they are experiencing rectifications following a drawn-out time period of rapid terms growth."

He also blamed falling minutes in gross sales of more than than than $417,000, where mortgage refund rates have been high as a consequence of the recognition crisis, for "dampening the national median value terms as well as the information for some of the more expensive markets".

Higher bounds for big loans from the Federal Soldier Housing Association to $729,750 will assist "high income, credit-worthy borrowers in high-cost areas", NAR president Richard Gaylord said.

U.S. Mortgage Delinquencies Rise to 20-Year High (Update4)

The figure of Americans who fell
behind on their mortgage payments rose to a 20-year high in the
third one-fourth as borrowers were not able to refinance or sell
their homes.

The share of all place loans with payments more than 30 days
late, including premier and fixed-rate loans, rose to a seasonally
adjusted 5.59 percent, the peak since 1986, the Mortgage
Bankers Association said in a study today. New foreclosures hit
an all-time high for the 2nd sequent one-fourth in a survey
that travels back to 1972.

The rush in foreclosures is expanding the stock list of
unsold places and contributing to the diminution in lodging demand. Gross Sales of new and previously owned places probably will drop to
5.09 million adjacent year, 32 percentage below the 2005 extremum of 7.46
million, according to Frank Nothaft, main economic expert of Freddie
Mac, the 2nd biggest U.S. mortgage buyer. About 40 percentage of
lenders have got increased criteria for their most creditworthy
borrowers, according to a Federal Soldier Modesty survey in October.

''These are the first Numbers we've seen that compound the
meltdown of the recognition marketplaces with the driblet in place prices,''
said John Jay Brinkmann, frailty president of research and economic science for
the Washington-based bankers trade group.

Shrub Plan

President Saint George W. Shrub and U.S. Treasury Secretary Henry
Paulson today announced a freezing on some subprime home-loan
rates aimed at helping borrowers who can't afford their
mortgages after they reset higher from low starter motor rates.

The understanding also lets some borrowers to refinance into
a new private mortgage or obtain a loan backed by the Federal
Housing Administration.

As the U.S. lodging slack comes in its 3rd year, investors
are shunning securities backed by mortgages, the top 15 U.S.
home detergent builders have got lost about $35 billion in marketplace value this
year, and the stock list of unsold houses have risen to almost an
11-month supply, the peak in 22 years.

One in every five adjustable-rate subprime loans had late
payments in the quarter, a figure that excepts the 1 of every
10 already in foreclosure, the bankers grouping said in their
report. Foreclosures started on all types of mortgages rose to
an all-time high of 0.78 percentage from 0.65 percent.

In the quarter, 3.12 percentage of premier borrowers made their
mortgage payments at least 30 years late, up from 2.73 percentage in
the 2nd quarter, the study said. The subprime share of late
payments rose to 16.3 percentage from 14.8 percent.

California, Sunshine State Lead

The Numbers were driven by California, the U.S.'s largest
state, and Florida, Brinkmann said. The two states had 36.4
percent of all of the nation's premier adjustable-rate loans and
had 42.4 percentage of new foreclosures during the quarter, he
said. They had 28.1 percentage of subprime adjustable mortgages and
33.7 percentage of foreclosure starts for that type of loan.

Sixty percentage of Banks said they tightened qualifications
for in October for so-called non-traditional mortgages such as as
interest-only loans, the Federal said.

Housing allows in the U.S. have got declined for five
consecutive months, falling to a 14-year low of 1.178 million at
an yearly gait in October, the Commerce Department said in a
Nov. Twenty report.

Gross Sales of previously owned places drop to a charge per unit of 4.97
million that month, the last in a survey that travels back to
1999, the National Association of Realtors said Nov. 28. The
inventory of single-family homes for sale increased to a 10.5
months' supply, the peak since July 1985.

Toll's Loss

The U.S. asset-backed commercial paper marketplace have shrunk
$394 billion, or 33 percent, since August. Debt maturing in 270
days or less and backed by mortgages, credit-card loans and
other retentions drop $23 billion, or 2.8 percent, to a seasonally
adjusted $801.2 billion for the hebdomad ended Dec. 5, the Federal
Reserve in American Capital said today.

Toll Brothers Inc., the biggest U.S. luxury-home builder,
today reported its first quarterly loss in 21 old age as fiscal
fourth one-fourth gross slid 35 percentage from a twelvemonth ago to $1.17
billion. Net income for the full financial twelvemonth plunged 95 percent
to $35.7 million, the last since 1993.

The Mortgage Bankers study is based on a study of 45.4
million loans by mortgage companies, commercial banks, thrifts,
credit labor unions and other fiscal institutions.

To reach the newsman on this story:
Kathleen M. Howley in Hub Of The Universe at .

Subprime: Big talk, little help

NEW York (CNNMoney.com) -- The loud-hailer message from the authorities to mortgage loaners have been: Bend. Bash what you can to assist struggling homeowners.

The message to troubled householders have been: Call your lender. You may be able to work something out. Home Affordability

See where you max out

Gross yearly income:

$

Downpayment amount:

$

Monthly debt:(eg. pupil loan, recognition card payments)

$

Mortgage rate:

%

Annual place taxes:

$

Annual householder insurance:

$

Results

CONSERVATIVE

AGGRESSIVE

Minimum house price:

$

Loan amount:

$

Monthly mortgage payment:

$

Taxes/homeowner insurance:

$

Total monthly payment:

$

As Woes Grow, Mortgage Ads Keep Up Pitch

Wall Street may have got soured on the mortgage business. But on television, radiocommunication and the Internet, the industry is as exuberant as ever. The New House Of York Times

Multimedia
Quicken Loans Radio Ad

Source: Competitrack

Source: Competitrack

Internet advertisement for LowerMyBills.com

Video

For example, Accelerate Loans, no longer affiliated with the shapers of Accelerate software system but the nation�s 25th-biggest lender, goes on to run its signature topographic point on radiocommunication stations. �This is a charge per unit alert,� the advertizement starts off, sounding much like a newscast. �Slower economical growing have caused the Federal to maintain involvement rates flat, and the marketplace have responded with some of the last mortgage rates in years.�

As more than householders autumn behind on mortgage payments and investors abandon the industry in droves, mortgage companies are facing greater examination over their loaning patterns and revelations to borrowers.

One country where regulators are paying near attending is advertisement that promises tantalizingly low payments without clearly disclosing the countless twines that attach to the debts. It is a maneuver that have got been widely used � and, critics say, abused � by loaners trying to entice new customers.

Mortgage loaners have spent more than than $3 billion since 2000 on advertisement on television, on radiocommunication and in print, said Nielsen Monitor-Plus, which tracks advertisement spending.

That figure makes not include direct mail and Internet advertising, which are increasingly popular vehicles for the industry. Nielsen/NetRatings estimations that mortgage companies spent $378 million in the first six calendar months of this twelvemonth on Internet show ads, and many companies also purchase hunt advertising.

LowerMyBills.com, A land site owned by the recognition federal agency Experian that funnel shapes borrowers to mortgage lenders, have go a fecund advertizer on the Web with its impossible-to-miss advertisements that characteristic dance cowpunchers and a picture of a adult female jumping and screaming with joy, presumably after being approved for a loan.

The Federal Soldier Trade Committee and lawyers general in states like Buckeye State and New House Of York are looking into the advertisements as portion of more than comprehensive reappraisals of loaning patterns during the lodging boom. In June, federal banking regulators ranked advertisement as one of three countries where mortgage loaners necessitate to be more than judicious.

The Buckeye State lawyer general, Marc Dann, said his staff was investigating direct-mail advertising that appears to be a solicitation from a homeowner�s depository financial institution or from the federal government. Many advertisements look to take at low-income and minority neighborhoods. Mr. Dann said his business office have sent letters asking 30 loaners to confirm their claims..

As the mortgage marketplace shrivels and defaults rise, he said, loaners �are becoming more than than than desperate, and consumers are becoming more desperate.�

Consumer advocators state many advertisements are at best deceptive and at worst maneuver consumers into hazardous loans with promises of low introductory rates that do not make clear that they could pay significantly more in a few calendar months or years.

�The advertisement was a rub-a-dub to consumers, saying: �Don�t worry, you can measure up for a loan. We will O.K. it,� � said Patricia A. McCoy, a law professor at the who have studied mortgage advertising. �It was pushing selling to attain out to these people on the outs of-bounds who have got uncertainties about their ability to pay a mortgage and enticement them in.�

Even when consumers make happen out about higher rates before shutting on a house, by that clip they are often �psychologically committed� to buying, Ms. McCoy said.

Quicken Loans was one of the many mortgage companies that benefited during the lodging boom. The company, based in Livonia, Mich., near Detroit, wrote $18 billion in loans last year, up from $4.6 billion in 2001.

Even during the tough marketplace this year, Accelerate Loans anticipates to do more than than $20 billion in loans. Not coincidentally, Accelerate Loans also pumped money into its advertisement over that time period � increasing it to $51 million last twelvemonth from about $3.5 million in 2002, according to estimations from Nielsen Monitor-Plus.

Through June, Accelerate Loans spent $37 million on mortgage advertisements � 2nd lone to , which spent $46 million. Accelerate Loans would not corroborate how much it passes on advertisement but executive directors acknowledged that such as disbursement had significantly increased.

The head selling military officer of Accelerate Loans, William Jennings Bryan Stapp, said that the advertisements were not deceptive and that disbursement had increased as the company had grown. 1 /n /n