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To: patron_anejo_por_favor who wrote (48798)	3/28/2006 1:18:47 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Study reveals financial crisis of 18-40 year olds Patrick Collinson Tuesday March 28, 2006 The Guardian An official government study into Britain's personal finances reveals a lost generation of 18- to 40-year-olds unable to cope with debts and soaring house prices, with alarmingly low levels of savings and little hope of building a decent pension. The study, by the Financial Services Authority (FSA) and Bristol University, published today, is the biggest of its kind undertaken in Britain. It paints a picture of a generational divide fuelled by higher education costs and the collapse of company pension schemes - with 42% of adults now with no pension and 70% with no meaningful savings. The FSA will call today for a new national strategy to improve Britain's financial capability, including workplace-based financial seminars targeted at 4 million employees; making personal finance more prominent in the national curriculum from 2008; and "money doctor" packs which will be sent to 1.5 million new and prospective parents each year. FSA chief executive, John Tiner, said: "There is an urgent and serious need to help the young. They are the first generation to be leaving college with massive debts, and while housing has always been a challenge, it's become extremely difficult for young people in parts of the country. Yet at the same time the young have become serious consumers. It was difficult for an 18-year-old to get a credit card 20 years ago but today it is relatively easy." Around one-quarter of adults aged 20 to 39 have fallen into financial difficulties over the past five years, compared with 5% of over 60-year-olds, said the report. It highlights a striking generational gap with regard to credit; 24% of young adults are currently overdrawn, compared to 11% of over-50s and just 4% of over 60s. The study blamed financial problems among 18- to 40-year-olds not on low incomes but on rapidly changing economic and social trends presenting young adults with greater challenges than their parents. "Even after lower incomes and limited experience are taken into account those in the 18 to 40 age group are less financially capable than their elders," said Mr Tiner. In a simple quiz on money matters, young adults scored particularly badly. Over 40% of 18- to 20-year-olds failed a question on interest rates and percentages, compared with 14% of people aged 50 and above. The education secretary, Ruth Kelly, said the report highlighted the need to make personal finance education "more explicit in the national curriculum" and promised support for teachers "to bring this to life in the classroom". But Help the Aged criticised the report which, it said, ignored the needs of older people. The worsening outlook for pension provision highlighted in the report is likely to fuel demands for a higher basic state pension, as recommended in the recent Turner report but fiercely resisted by the chancellor, Gordon Brown. It is also likely to spark fresh debate about introducing compulsory pension saving. The report said 81% of people of pre-retirement age think the state pension would not provide sufficiently for their old age, yet four out of 10 people are not paying into an occupational or personal pension to top up their state pension. Worries over Britain's £1 trillion debt mountain may be overstated. The report found that only 1% of over 18-year-olds - equal to 500,000 people - have severe financial problems, although 6% of people (around 2m households) face a "constant struggle" to keep up with commitments. Bristol University conducted more than 5,000 45-minute long interviews at home with respondents across the UK as part of the FSA research. money.guardian.co.uk

To: patron_anejo_por_favor who wrote (48798)	3/28/2006 1:20:40 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Price of gold doubles in Zim Tue, 28 Mar 2006 Fidelity Printers and Refiners has increased the price of gold in Zimbabwe by more than 100 percent to narrow the gap with the black market valuation, the state-owned Herald reported on Tuesday. Gold is now Z$2.5-million per gram, up from Z$1.2-million compared to the black market price of Z$2.7-million, a move that has been welcomed by industry officials who said it was "long overdue", the paper said. "Fidelity, a subsidiary of the Reserve Bank of Zimbabwe, has suffered from a sharp decline in gold deliveries in the past year as miners opted for the more lucrative black market," it added. Rampant smuggling Gold deliveries last year fell by 37 percent, to 13 000 kilograms compared to 21 300 kilograms in 2004. The decline was attributed to rampant smuggling due to lax controls. Official estimates are that Zimbabwe could have been "prejudiced of as much as US$500-million", the Herald stated. "Of late, miners have been outspoken about the effect of low gold prices and a fixed exchange rate system, which they said made operations expensive. They also lamented the large price disparity between Government's price and that on the black market, which until Thursday, was Z$1.1-billion per kilogram. Fidelity's price is now Z$2.5-billion to the black market's $2.7-billion per kilogram," the report added. "This is a good development and we hope it will promote more deliveries to Fidelity Printers and Refiners who are the established producers," David Murangari, the Chamber of Mines' chief executive told the Herald. Daniel Guruve, the secretary-general of the Zimbabwe Miners' Federation said the review was long overdue. "The price increase was long overdue and we welcome it. Miners have been facing increasing operational costs, therefore the increase in the gold price must be made timeously. We urge them to keep making these price reviews in response to the rising operations costs so that miners will be cushioned," he said.

To: patron_anejo_por_favor who wrote (48798)	3/28/2006 1:34:35 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bonuses to Loan Brokers Scrutinized Lenders often reward those who arrange high-interest mortgages. Many borrowers don't know they qualify for a lower rate, officials say. By Jonathan Peterson, Times Staff Writer March 27, 2006 WASHINGTON — A little-known reward for brokers who arrange home loans at high interest rates is drawing scrutiny from law enforcement authorities, who say these bonuses can cost unwitting homeowners thousands of dollars over time. Lenders pay the bonuses to independent brokers who sign up borrowers for mortgages at higher interest rates than they qualify for. With these brokers now writing an estimated 60% of home loans in the U.S., regulators are concerned that many people are being steered into higher-rate loans without being aware of the higher costs. .... latimes.com

To: patron_anejo_por_favor who wrote (48798)	3/28/2006 1:46:47 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

The "danger years" for homeowners money.cnn.com Delinquencies peak the third and fourth years of mortgages. Will risky terms add to the problem? By Les Christie, CNNMoney.com staff writer March 28, 2006: 10:09 AM EST NEW YORK (CNNMoney.com) - Millions of mortgage borrowers are entering their "danger years," when delinquencies peak and owners risk losing their homes. Although borrowers are often told that the first year is the hardest, delinquencies have historically reached their highest points during the third and fourth years of mortgages, according to Doug Duncan, chief economist for the Mortgage Bankers Association (MBA). "As a mortgage ages, things can go wrong," he says. The are a few forces at play: After years of strained budgets, borrowers may have little in savings to draw on to handle a crisis; this is also the period when major repairs begin to crop up; finally, many home buyers go through life changes, including starting a family. The number of Americans affected by the coming danger years could be huge. Half of all mortgage loans are three years old or less, according to the MBA. Nearly $3 trillion in mortgages originated in 2002, $4 trillion in 2003 and $3 trillion again in 2004. Many were refis, but there were also record totals of new purchases as well. In addition, many of these transactions involved risky loans, such as interest-only ARMs and no-down payment loans. A recent report from the National Association of Realtors found that the median new home buyer put down just 2 percent in 2005. Forty-three percent put down no money at all. And according to SMR Research, some 25 percent of loans were interest-only, do nothing to reduce the debt on the house. "Lenders used to offer interest-only loans to only the best credit-quality prospects. That's no longer true," said Stuart Feldstein, founder of SMR Research. Adjustable rate loans accounted for nearly half, by dollar volume, of loans issued in 2004 and 2005. Because interest rates have risen and are expected to increase further, those loans will adjust upward and monthly payments will be higher. With a $200,000 loan adjusting upward from 4 percent to 6 percent, the monthly bill would increase to about $1,200 from $955. "There are very vulnerable groups out there," says Allen Fishbein, Director of Housing and Credit Policy for the Consumer Federation of America. "We found many consumers severely underestimated what their payments would be when they adjusted. Some didn't even know how to calculate what their payments would amount to." Most homeowners are safe Duncan tends to downplay the perils of non-traditional mortgages. He points out that 35 percent of all homeowners carry no mortgages at all and another 50 percent have traditional fixed-rate loans, which leaves only 15 percent of all homeowners at risk. And, he points out, some who have opted for nontraditional mortgages are affluent and choose these products to free up cash for more lucrative investments. The risk to these financially savvy individuals is low; most can pay off their mortgages any time. Furthermore, those who bought a few years ago in hot markets may already be in safe territory, as the value of their homes has grown enough that they now have enough equity to ride out financial storms. Out-sized gains in housing prices lately has probably helped keep delinquencies as low as they've been. But even if the percentages of borrowers who may go into default remains modest, even an increase of a few percentage points can add up to millions of households. Big price gains are ending And housing markets seem to be headed, if not into a decline, at least into a period of much more stable, slower growth. The median home is predicted to inch up by only a few percent in 2006, according to NAR. In many markets, prices may fall. Home buyers cannot count on increasing home equity to bail them out of tight situations. Fishbein recommends that most mortgage borrowers convert to fixed rate loans as soon as practical. "Consumers have enough uncertainty in their financial lives,' he says, "Nailing down their housing payment is a good course for most consumers." "People are really stretched," says Dean Baker, macroeconomist and Co-Director of the Center for Economic and Policy Research. "They are banking on everything turning out right for them. That they won't lose their jobs, that they won't run into unexpected expenses. They're betting that the housing market will continue to appreciate."