With the recent arrest of a suspect in the failed bombing of Northwest flight 253, one of the questions asked was why was this person allowed to get on an airplane if his name was in one of the US databases of suspected terrorists? What follows is a very brief description of four databases that are relevant to the recent bombing situation.
Terrorist Identities Datamart Environment (TIDE)
This is the US government's central repository of information on international terrorist activities. The database includes people who commit terrorist activities, who plan such activities, or perform supporting activities such as fund raising providing safe houses. The suspect, Umar Farouk Abdulmutallab, was added to this database last month, and there are about 500,000 unique individuals in the database, of which 95% are non-US citizens. For more details, you can view the fact sheet on this database.
Terrorist Screening Database(TSDB)
only individuals who are known or reasonably suspected to be or have been engaged in conduct constituting, in preparation for, in aid of, or related to terrorism. This database consolidates information that used to be located in several different US government agencies. It is more restrictive than the TIDE database, and contains about 400,000 names. The suspect in the bombing was not one of them. The FBI has a list of frequently asked questions about this database.
Selectee List
Maintained by the Transportation Security Administration (TSA), this database contains the names of individuals who must undergo additional security screening before being permitted to board an aircraft. This list, which has about 14,000 people, is a subset of the TSDB.
No-fly List
As the name implies, this is a list of people who are not allowed to board an airliner. Like the Selectee List, this No-fly list is maintained by the TSA and is a subset of the TSDB. This list has fewer than 4,000 names.
So far, the US government has admitted that there was insufficient information available on the suspect to place him in any of the last three lists, including the no-fly list. Also, the suspect's US entry visa, which was granted in 2008 before he was placed on the TIDE list, was not restricted or revoked after being placed on that list.
December 29, 2009
December 23, 2009
Food Stamp Use at Record Levels in the United States
Nationwide, food stamps reach about two-thirds of those eligible, with rates ranging from an estimated 50 percent in California to 98 percent in Missouri.
There are 239 counties in the United States where at least a quarter of the population receives food stamps, according to an analysis of local data collected by The New York Times.
The counties are as big as the Bronx and Philadelphia and as small as Owsley County in Kentucky, a patch of Appalachian distress where half of the 4,600 residents receive food stamps.
From the ailing resorts of the Florida Keys to Alaskan villages along the Bering Sea, the program is now expanding at a pace of about 20,000 people a day.
More than 36 million people use inconspicuous plastic cards for staples like milk, bread and cheese, swiping them at counters in blighted cities and in suburbs pocked with foreclosure signs.
Virtually all have incomes near or below the federal poverty line, but their eclectic ranks testify to the range of people struggling with basic needs. They include single mothers and married couples, the newly jobless and the chronically poor, longtime recipients of welfare checks and workers whose reduced hours or slender wages leave pantries bare.
In more than 800 counties, it helps feed one in three children. In the Mississippi River cities of St. Louis, Memphis and New Orleans, half of the children or more receive food stamps. Even in Peoria, Ill. — Everytown, U.S.A. — nearly 40 percent of children receive aid.
While use is greatest where poverty runs deep, the growth has been especially swift in once-prosperous places hit by the housing bust. There are about 50 small counties and a dozen sizable ones where the rolls have doubled in the last two years. In another 205 counties, they have risen by at least two-thirds. These places with soaring rolls include populous Riverside County, Calif., most of greater Phoenix and Las Vegas, a ring of affluent Atlanta suburbs, and a 150-mile stretch of southwest Florida from Bradenton to the Everglades.
Like many states, Ohio has campaigned hard to raise the share of eligible people collecting benefits, which are financed entirely by the federal government and brought the state about $2.2 billion last year.
A recent study by Mark R. Rank, a professor at Washington University in St. Louis, startled some policy makers in finding that half of Americans receive food stamps, at least briefly, by the time they turn 20. Among black children, the figure was 90 percent.
Across the country, the food stamp rolls can be read like a scan of a sick economy. The counties of northwest Ohio, where car parts are made, take sick when Detroit falls ill. Food stamp use is up by about 60 percent in Erie County (vibration controls), 77 percent in Wood County (floor mats) and 84 percent in hard-hit Van Wert (shifting components and cooling fans).
By contrast, in the federal cash welfare program, states until recently bore the entire cost of caseload growth, and nationally the rolls have stayed virtually flat. Unemployment insurance, despite rapid growth, reaches about only half the jobless (and replaces about half their income), making food stamps the only aid many people can get — the safety net’s safety net.
Almost 90 percent of beneficiaries nationwide live below the poverty line (about $22,000 a year for a family of four). But a minor tempest hit Ohio’s Warren County after a woman drove to the food stamp office in a Mercedes-Benz and word spread that she owned a $300,000 home loan-free. Since Ohio ignores the value of houses and cars, she qualified.
Food Stamp Use by County
----------------
http://www.fns.usda.gov/FSP/applicant_recipients/eligibility.htm
As of Oct. 1, 2008, Supplemental Nutrition Assistance Program (SNAP) is the new name for the federal Food Stamp Program. The new name reflects the changes we’ve made to meet the needs of our clients, including a focus on nutrition and an increase in benefit amounts. SNAP is the federal name for the program. State programs may have different names.
To see if you might be eligible for Supplemental Nutrition Assistance Program (SNAP, formerly food stamp) benefits, visit our pre-screening tool.
For Households in the 48 Contiguous States and the District of Columbia Oct. 1, 2008 through Sept. 20, 2009. To get SNAP benefits, households must meet certain tests, including resource and income tests:
Resources
Income
Deductions
Employment Requirements
Special Rules for Elderly or Disabled
Immigrant Eligibility
Resources:
Households may have $2,000 in countable resources, such as a bank account, or $3000 in countable resources if at least one person is age 60 or older, or is disabled. However, certain resources are NOT counted, such as a home and lot, the resources of people who receive Supplemental Security Income (SSI), the resources of people who receive Temporary Assistance for Needy Families (TANF, formerly AFDC), and most retirement (pension) plans.
Licensed vehicles are NOT counted if they are:
used for income-producing purposes,
annually producing income consistent with their fair market value,
needed for long distance travel for work (other than daily commute),
used as the home,
needed to transport a physically disabled household member,
needed to carry most of the household's fuel or water, or
if the household has little equity in the vehicle (because of money owed on the vehicle, it would bring no more than $1,500 if sold).
For all other vehicles, the fair market value over $4,650 or the equity value, whichever is more, is counted:
one per adult household member, and
any other vehicle a household member under 18 drives to work, school, job training, or to look for work.
For all other vehicles, the fair market value over $4,650 or the equity value, whichever is more, is counted as a resource.
Income:
Households have to meet income tests unless all members are receiving TANF, SSI, or in some places general assistance. Most households must meet both the gross and net income tests, but a household with an elderly person or a person who is receiving certain types of disability payments only has to meet the net income test. Households, except those noted, that have income over the amounts listed below cannot get SNAP benefits.
(Oct. 1, 2009 through Sept. 30, 2010)
Household size
Gross monthly income
(130 percent of poverty)
Net monthly income
(100 percent of poverty)
1
$1,174 $ 903
2
1,579 1,215
3
1,984 1,526
4
2,389 1,838
5
2,794 2,150
6
3,200 2,461
7
3,605 2,773
8
4,010 3,085
Each additional member
+406 +312
There are 239 counties in the United States where at least a quarter of the population receives food stamps, according to an analysis of local data collected by The New York Times.
The counties are as big as the Bronx and Philadelphia and as small as Owsley County in Kentucky, a patch of Appalachian distress where half of the 4,600 residents receive food stamps.
From the ailing resorts of the Florida Keys to Alaskan villages along the Bering Sea, the program is now expanding at a pace of about 20,000 people a day.
More than 36 million people use inconspicuous plastic cards for staples like milk, bread and cheese, swiping them at counters in blighted cities and in suburbs pocked with foreclosure signs.
Virtually all have incomes near or below the federal poverty line, but their eclectic ranks testify to the range of people struggling with basic needs. They include single mothers and married couples, the newly jobless and the chronically poor, longtime recipients of welfare checks and workers whose reduced hours or slender wages leave pantries bare.
In more than 800 counties, it helps feed one in three children. In the Mississippi River cities of St. Louis, Memphis and New Orleans, half of the children or more receive food stamps. Even in Peoria, Ill. — Everytown, U.S.A. — nearly 40 percent of children receive aid.
While use is greatest where poverty runs deep, the growth has been especially swift in once-prosperous places hit by the housing bust. There are about 50 small counties and a dozen sizable ones where the rolls have doubled in the last two years. In another 205 counties, they have risen by at least two-thirds. These places with soaring rolls include populous Riverside County, Calif., most of greater Phoenix and Las Vegas, a ring of affluent Atlanta suburbs, and a 150-mile stretch of southwest Florida from Bradenton to the Everglades.
Like many states, Ohio has campaigned hard to raise the share of eligible people collecting benefits, which are financed entirely by the federal government and brought the state about $2.2 billion last year.
A recent study by Mark R. Rank, a professor at Washington University in St. Louis, startled some policy makers in finding that half of Americans receive food stamps, at least briefly, by the time they turn 20. Among black children, the figure was 90 percent.
Across the country, the food stamp rolls can be read like a scan of a sick economy. The counties of northwest Ohio, where car parts are made, take sick when Detroit falls ill. Food stamp use is up by about 60 percent in Erie County (vibration controls), 77 percent in Wood County (floor mats) and 84 percent in hard-hit Van Wert (shifting components and cooling fans).
By contrast, in the federal cash welfare program, states until recently bore the entire cost of caseload growth, and nationally the rolls have stayed virtually flat. Unemployment insurance, despite rapid growth, reaches about only half the jobless (and replaces about half their income), making food stamps the only aid many people can get — the safety net’s safety net.
Almost 90 percent of beneficiaries nationwide live below the poverty line (about $22,000 a year for a family of four). But a minor tempest hit Ohio’s Warren County after a woman drove to the food stamp office in a Mercedes-Benz and word spread that she owned a $300,000 home loan-free. Since Ohio ignores the value of houses and cars, she qualified.
Food Stamp Use by County
----------------
http://www.fns.usda.gov/FSP/applicant_recipients/eligibility.htm
As of Oct. 1, 2008, Supplemental Nutrition Assistance Program (SNAP) is the new name for the federal Food Stamp Program. The new name reflects the changes we’ve made to meet the needs of our clients, including a focus on nutrition and an increase in benefit amounts. SNAP is the federal name for the program. State programs may have different names.
To see if you might be eligible for Supplemental Nutrition Assistance Program (SNAP, formerly food stamp) benefits, visit our pre-screening tool.
For Households in the 48 Contiguous States and the District of Columbia Oct. 1, 2008 through Sept. 20, 2009. To get SNAP benefits, households must meet certain tests, including resource and income tests:
Resources
Income
Deductions
Employment Requirements
Special Rules for Elderly or Disabled
Immigrant Eligibility
Resources:
Households may have $2,000 in countable resources, such as a bank account, or $3000 in countable resources if at least one person is age 60 or older, or is disabled. However, certain resources are NOT counted, such as a home and lot, the resources of people who receive Supplemental Security Income (SSI), the resources of people who receive Temporary Assistance for Needy Families (TANF, formerly AFDC), and most retirement (pension) plans.
Licensed vehicles are NOT counted if they are:
used for income-producing purposes,
annually producing income consistent with their fair market value,
needed for long distance travel for work (other than daily commute),
used as the home,
needed to transport a physically disabled household member,
needed to carry most of the household's fuel or water, or
if the household has little equity in the vehicle (because of money owed on the vehicle, it would bring no more than $1,500 if sold).
For all other vehicles, the fair market value over $4,650 or the equity value, whichever is more, is counted:
one per adult household member, and
any other vehicle a household member under 18 drives to work, school, job training, or to look for work.
For all other vehicles, the fair market value over $4,650 or the equity value, whichever is more, is counted as a resource.
Income:
Households have to meet income tests unless all members are receiving TANF, SSI, or in some places general assistance. Most households must meet both the gross and net income tests, but a household with an elderly person or a person who is receiving certain types of disability payments only has to meet the net income test. Households, except those noted, that have income over the amounts listed below cannot get SNAP benefits.
(Oct. 1, 2009 through Sept. 30, 2010)
Household size
Gross monthly income
(130 percent of poverty)
Net monthly income
(100 percent of poverty)
1
$1,174 $ 903
2
1,579 1,215
3
1,984 1,526
4
2,389 1,838
5
2,794 2,150
6
3,200 2,461
7
3,605 2,773
8
4,010 3,085
Each additional member
+406 +312
December 13, 2009
Mortgage Defaults Increasing in Late 2009
http://www.mortgagebankers.org/NewsandMedia/PressCenter/71112.htm
Title: Delinquencies Continue to Climb in Latest MBA National Delinquency Survey
Source: MBA
Date: 11/19/2009
WASHINGTON, D.C. (November 19, 2009) — The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from the second quarter of 2009, and up 265 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 108 basis points from 8.86 percent in the second quarter of 2009 to 9.94 percent this quarter.
Top Line Results
The delinquency rate breaks the record set last quarter. The records are based on MBA data dating back to 1972.
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 4.47 percent, an increase of 17 basis points from the second quarter of 2009 and 150 basis points from one year ago. The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.42 percent, up six basis points from last quarter and up 35 basis points from one year ago.
The percentages of loans 90 days or more past due, loans in foreclosure, and foreclosures started all set new record highs. The percentage of loans 30 days past due is still below the record set in the second quarter of 1985.
Increases Driven by Prime and FHA Loans
“Despite the recession ending in mid-summer, the decline in mortgage performance continues. Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP. Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent,” said Jay Brinkmann, MBA’s Chief Economist.
“Prime fixed-rate loans continue to represent the largest share of foreclosures started and the biggest driver of the increase in foreclosures. 33 percent of foreclosures started in the third quarter were on prime fixed-rate and loans and those loans were 44 percent of the quarterly increase in foreclosures. The foreclosure numbers for prime fixed-rate loans will get worse because those loans represented 54 percent of the quarterly increase in loans 90 days or more past due but not yet in foreclosure.
“The performance of prime adjustable rate loans, which include pay-option ARMs in the MBA survey, continue to deteriorate with the foreclosure rate on those loans for the first time exceeding the rate for subprime fixed-rate loans. In contrast, both subprime fixed-rate and subprime adjustable rate loans saw decreases in foreclosures.
“The foreclosure rate on FHA loans also increased, despite having a large increase in the number of FHA-insured loans outstanding. The number of FHA loans outstanding has increased by about 1.1 million over the last year. This increase in the denominator depresses the delinquency and foreclosure percentages. If we assume these newly-originated loans are not the ones defaulting and remove the big denominator increase from the calculation results, the foreclosure rate would be1.76 percent rather than 1.31 percent reported.
“Once again the states of Florida, California, Arizona and Nevada have a disproportionate share of the mortgage problems. They had 43 percent of all foreclosures started in the third quarter, down only slightly from 44 percent both last quarter and the third quarter last year. They had 37 percent of the nation’s prime fixed-rate loan foreclosure starts and 67 percent of the prime ARM foreclosure starts. As of the end of September, 25 percent of the mortgages in Florida were at least one payment past due or in foreclosure.
“The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve. First, it is unlikely the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace. Perhaps more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates. Second, the number of loans 90 days or more past due or in foreclosure is now a little over 4 million as compared with 3.9 million new and previously occupied homes currently for sale, although there is likely some overlap between the two numbers. The ultimate resolution of these seriously delinquent loans will put added pressure on the hardest hit sections of the country.”
Change from last quarter (second quarter of 2009)
The seasonally adjusted delinquency rate increased 43 basis points for prime loans (from 6.41 percent to 6.84 percent), 107 basis points for subprime loans (from 25.35 percent to 26.42 percent), and two basis points for VA loans (from 8.06 percent to 8.08 percent). The delinquency rate for FHA loans decreased six basis points (from 14.42 percent to 14.36 percent). The non-seasonally adjusted delinquency rate for FHA loans however, increased 134 basis points this quarter (from 13.70 percent to 15.04 percent).
The non-seasonally adjusted percentage of loans in the foreclosure process increased 20 basis points for prime loans (from 3.00 percent to 3.20 percent), and increased 30 basis points for subprime loans (from 15.05 percent to 15.35 percent). FHA loans saw a 34 basis point increase in foreclosure inventory rate (from 2.98 percent to 3.32 percent), while the foreclosure inventory rate for VA loans increased 22 basis points (from 2.07 percent to 2.29 percent).
The non-seasonally adjusted foreclosure starts rate increased 13 basis points for prime loans (from 1.01 percent to 1.14 percent), increased 16 basis points for FHA loans (from 1.15 percent to 1.31 percent), and increased 19 basis points for VA loans (from 0.68 percent to 0.87 percent). This rate decreased 37 basis points for subprime loans (from 4.13 percent to 3.76 percent).
The seriously delinquent rate, the non-seasonally adjusted percentage of loans that are 90 days or more delinquent, or in the process of foreclosure, was up from both last quarter and from last year. This measure is designed to account for inter-company differences on when a loan enters the foreclosure process.
Compared with last quarter, the rate increased 82 basis points for prime loans (from 5.44 percent to 6.26 percent), 216 basis points for subprime loans (from 26.52 percent to 28.68 percent), 89 basis points for FHA loans (from 7.78 percent to 8.67 percent), and 37 basis points for VA loans (from 4.69 percent to 5.06 percent).
Change from last year (third quarter of 2008)
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country.
Title: Delinquencies Continue to Climb in Latest MBA National Delinquency Survey
Source: MBA
Date: 11/19/2009
WASHINGTON, D.C. (November 19, 2009) — The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from the second quarter of 2009, and up 265 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 108 basis points from 8.86 percent in the second quarter of 2009 to 9.94 percent this quarter.
Top Line Results
The delinquency rate breaks the record set last quarter. The records are based on MBA data dating back to 1972.
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 4.47 percent, an increase of 17 basis points from the second quarter of 2009 and 150 basis points from one year ago. The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.42 percent, up six basis points from last quarter and up 35 basis points from one year ago.
The percentages of loans 90 days or more past due, loans in foreclosure, and foreclosures started all set new record highs. The percentage of loans 30 days past due is still below the record set in the second quarter of 1985.
Increases Driven by Prime and FHA Loans
“Despite the recession ending in mid-summer, the decline in mortgage performance continues. Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP. Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent,” said Jay Brinkmann, MBA’s Chief Economist.
“Prime fixed-rate loans continue to represent the largest share of foreclosures started and the biggest driver of the increase in foreclosures. 33 percent of foreclosures started in the third quarter were on prime fixed-rate and loans and those loans were 44 percent of the quarterly increase in foreclosures. The foreclosure numbers for prime fixed-rate loans will get worse because those loans represented 54 percent of the quarterly increase in loans 90 days or more past due but not yet in foreclosure.
“The performance of prime adjustable rate loans, which include pay-option ARMs in the MBA survey, continue to deteriorate with the foreclosure rate on those loans for the first time exceeding the rate for subprime fixed-rate loans. In contrast, both subprime fixed-rate and subprime adjustable rate loans saw decreases in foreclosures.
“The foreclosure rate on FHA loans also increased, despite having a large increase in the number of FHA-insured loans outstanding. The number of FHA loans outstanding has increased by about 1.1 million over the last year. This increase in the denominator depresses the delinquency and foreclosure percentages. If we assume these newly-originated loans are not the ones defaulting and remove the big denominator increase from the calculation results, the foreclosure rate would be1.76 percent rather than 1.31 percent reported.
“Once again the states of Florida, California, Arizona and Nevada have a disproportionate share of the mortgage problems. They had 43 percent of all foreclosures started in the third quarter, down only slightly from 44 percent both last quarter and the third quarter last year. They had 37 percent of the nation’s prime fixed-rate loan foreclosure starts and 67 percent of the prime ARM foreclosure starts. As of the end of September, 25 percent of the mortgages in Florida were at least one payment past due or in foreclosure.
“The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve. First, it is unlikely the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace. Perhaps more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates. Second, the number of loans 90 days or more past due or in foreclosure is now a little over 4 million as compared with 3.9 million new and previously occupied homes currently for sale, although there is likely some overlap between the two numbers. The ultimate resolution of these seriously delinquent loans will put added pressure on the hardest hit sections of the country.”
Change from last quarter (second quarter of 2009)
The seasonally adjusted delinquency rate increased 43 basis points for prime loans (from 6.41 percent to 6.84 percent), 107 basis points for subprime loans (from 25.35 percent to 26.42 percent), and two basis points for VA loans (from 8.06 percent to 8.08 percent). The delinquency rate for FHA loans decreased six basis points (from 14.42 percent to 14.36 percent). The non-seasonally adjusted delinquency rate for FHA loans however, increased 134 basis points this quarter (from 13.70 percent to 15.04 percent).
The non-seasonally adjusted percentage of loans in the foreclosure process increased 20 basis points for prime loans (from 3.00 percent to 3.20 percent), and increased 30 basis points for subprime loans (from 15.05 percent to 15.35 percent). FHA loans saw a 34 basis point increase in foreclosure inventory rate (from 2.98 percent to 3.32 percent), while the foreclosure inventory rate for VA loans increased 22 basis points (from 2.07 percent to 2.29 percent).
The non-seasonally adjusted foreclosure starts rate increased 13 basis points for prime loans (from 1.01 percent to 1.14 percent), increased 16 basis points for FHA loans (from 1.15 percent to 1.31 percent), and increased 19 basis points for VA loans (from 0.68 percent to 0.87 percent). This rate decreased 37 basis points for subprime loans (from 4.13 percent to 3.76 percent).
The seriously delinquent rate, the non-seasonally adjusted percentage of loans that are 90 days or more delinquent, or in the process of foreclosure, was up from both last quarter and from last year. This measure is designed to account for inter-company differences on when a loan enters the foreclosure process.
Compared with last quarter, the rate increased 82 basis points for prime loans (from 5.44 percent to 6.26 percent), 216 basis points for subprime loans (from 26.52 percent to 28.68 percent), 89 basis points for FHA loans (from 7.78 percent to 8.67 percent), and 37 basis points for VA loans (from 4.69 percent to 5.06 percent).
Change from last year (third quarter of 2008)
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country.
December 6, 2009
Sometimes the IRS Will Audit You for Not Making Enough Money
The other day, I read a story that was almost too crazy to believe. The IRS audited someone because they just couldn't believe that a hard working family can live in a high cost city while earning less than poverty level wages.
A December 6, 2009 story in the Seattle Times tells the story of a how the 2009 tax return of hard working single mother of two who got audited because the IRS believed that it was not possible for her family to get by in Seattle with her income alone and thought she may have unreported income. The story describes how the IRS had their own charts that showed a family needed about $36,000 a year to get by.
The story gets more bizarre. Her 2006 and 2007 returns were found deficient for the same reasons, and she was slapped with a $16,000 tax bill. Read the full story for the gory details, but the bottom line was that the IRS was interpreting the law incorrectly, but it took $10,000 of her money and her parents money to get the IRS to figure that out.
Poverty in Seattle
Seattle is not a cheap city to live in. An average looking three bedroom house in a bad neighborhood can easily be worth $300,000. In spite of the higher than average prices, about 10% of the people in Seattle live in families that make less than poverty level income. The US government, specifically the department of Health and Human Services, says that for most of the US, the poverty level in 2009 for a family of three is $18,310. While the woman in the story was slightly above this level, she earned enough money to take care of her kids, but did so by in part by living in one of her parent's houses and getting by without a car.
Lessons Learned
What can you take away from a story like this? One lesson is that sometimes the IRS gets it wrong, and if they get it wrong for your return, it may take a lot of money and time to figure it out. Another is that you don't have to have a high income or great wealth to get audited. If the IRS wants to come after you, there isn't much you can do. The best thing you can do is to be prepared by filling out your tax returns to the best of your ability, and to keep any paperwork or receipts that you think you may need.
A December 6, 2009 story in the Seattle Times tells the story of a how the 2009 tax return of hard working single mother of two who got audited because the IRS believed that it was not possible for her family to get by in Seattle with her income alone and thought she may have unreported income. The story describes how the IRS had their own charts that showed a family needed about $36,000 a year to get by.
The story gets more bizarre. Her 2006 and 2007 returns were found deficient for the same reasons, and she was slapped with a $16,000 tax bill. Read the full story for the gory details, but the bottom line was that the IRS was interpreting the law incorrectly, but it took $10,000 of her money and her parents money to get the IRS to figure that out.
Poverty in Seattle
Seattle is not a cheap city to live in. An average looking three bedroom house in a bad neighborhood can easily be worth $300,000. In spite of the higher than average prices, about 10% of the people in Seattle live in families that make less than poverty level income. The US government, specifically the department of Health and Human Services, says that for most of the US, the poverty level in 2009 for a family of three is $18,310. While the woman in the story was slightly above this level, she earned enough money to take care of her kids, but did so by in part by living in one of her parent's houses and getting by without a car.
Lessons Learned
What can you take away from a story like this? One lesson is that sometimes the IRS gets it wrong, and if they get it wrong for your return, it may take a lot of money and time to figure it out. Another is that you don't have to have a high income or great wealth to get audited. If the IRS wants to come after you, there isn't much you can do. The best thing you can do is to be prepared by filling out your tax returns to the best of your ability, and to keep any paperwork or receipts that you think you may need.
December 3, 2009
You May Not Have to Pay Some of Your Old Debts
A term that you may have heard on your basic cop show is something called a statute of limitations. What works on cop shows works in financial life as well. Each state has a statute of limitations on money that you owe for some kinds of debts. If you stop paying on those debts, after that period of time, which varies from state to state, you can no longer be sued by your creditor to get money from you.
The Statute of Limitations is Not an Excuse to Avoid Paying
This is not a free ride, you should be a responsible person and intend to pay any bill that you have. If you have the money to pay it, go ahead and do it, even if you think that the person or the company that you owe the money to is greedy, evil, or unworthy. The bottom line is that a deal is a deal.
What Kinds of Debts Have a Statute of Limitations?
Depending on your state, the statute of limitations rules depend on the kind of agreement you have. Basic kinds of agreements include:
- Oral Contract: This is a verbal or handshake agreement to pay back money loaned to you.
- Written Contract: You agree to pay a debt or loan under the terms written down in a document signed by you and your debtor.
- Promissory Note: This is a written loan payment agreement with scheduled payments and interest on the loan spelled out in the promissory note. A mortgage are one type of promissory note.
- Open-ended Accounts: These are revolving lines of credit with varying balances and sometimes varying limits and interest rates. Credit cards are one kind of revolving account.
Statute of Limitations and Credit Cards
If you stop making credit card payments for whatever reason, the credit card company can sue you for payment. The statute of limitations starts is the date of your last payment. For example, if your last payment was on September 11, 2001, and the statute of limitation in your state for credit card debt is 10 years, your credit card company has until September 11, 2011 to sue you to recover the unpaid credit card balance.
What Is the Statue of Limitations In Your State?
That information is described in state laws, and you can go to any public library and find that kind of information out for the kind of debt you owe. If your situation is complicated, contact a credit counselor or even a lawyer to figure out your situation. Please note that the initial consultation with these kinds of professionals is usually free. Also, there may be nonprofit or community based organizations that that can help you get the information for free.
Other Things to Consider
Your situation will be different for each debt. For example, an unpaid debt may stay on your credit report long after the statute of limitations has passed. For some kinds of debts such as mortgages or car loans, the company that you owe may take other actions like foreclosure or repossession long before the statute of limitations runs out. Also, a sneaky debt collector may lie to you and say that the statute of limitations does not apply to you. When in doubt, contact someone who can give you expert advice about your situation.
Please note: That some states consider credit card agreements to be an oral contract,other states consider it a written contract, and some states have specific laws pertaining to credit card lawsuits. If you have unpaid credit card debt and are concerned about your legal rights, a lawyer can brief you on the specific laws for your state.
The Statute of Limitations is Not an Excuse to Avoid Paying
This is not a free ride, you should be a responsible person and intend to pay any bill that you have. If you have the money to pay it, go ahead and do it, even if you think that the person or the company that you owe the money to is greedy, evil, or unworthy. The bottom line is that a deal is a deal.
What Kinds of Debts Have a Statute of Limitations?
Depending on your state, the statute of limitations rules depend on the kind of agreement you have. Basic kinds of agreements include:
- Oral Contract: This is a verbal or handshake agreement to pay back money loaned to you.
- Written Contract: You agree to pay a debt or loan under the terms written down in a document signed by you and your debtor.
- Promissory Note: This is a written loan payment agreement with scheduled payments and interest on the loan spelled out in the promissory note. A mortgage are one type of promissory note.
- Open-ended Accounts: These are revolving lines of credit with varying balances and sometimes varying limits and interest rates. Credit cards are one kind of revolving account.
Statute of Limitations and Credit Cards
If you stop making credit card payments for whatever reason, the credit card company can sue you for payment. The statute of limitations starts is the date of your last payment. For example, if your last payment was on September 11, 2001, and the statute of limitation in your state for credit card debt is 10 years, your credit card company has until September 11, 2011 to sue you to recover the unpaid credit card balance.
What Is the Statue of Limitations In Your State?
That information is described in state laws, and you can go to any public library and find that kind of information out for the kind of debt you owe. If your situation is complicated, contact a credit counselor or even a lawyer to figure out your situation. Please note that the initial consultation with these kinds of professionals is usually free. Also, there may be nonprofit or community based organizations that that can help you get the information for free.
Other Things to Consider
Your situation will be different for each debt. For example, an unpaid debt may stay on your credit report long after the statute of limitations has passed. For some kinds of debts such as mortgages or car loans, the company that you owe may take other actions like foreclosure or repossession long before the statute of limitations runs out. Also, a sneaky debt collector may lie to you and say that the statute of limitations does not apply to you. When in doubt, contact someone who can give you expert advice about your situation.
Please note: That some states consider credit card agreements to be an oral contract,other states consider it a written contract, and some states have specific laws pertaining to credit card lawsuits. If you have unpaid credit card debt and are concerned about your legal rights, a lawyer can brief you on the specific laws for your state.
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