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Posted by on Aug 11, 2009 in BORROWING SOMEONE ELSE’S MONEY | 0 comments

Here are 7 questions to ask your mortgage lender

On the Money From the  August 7, 2009 print edition The Federal Reserve Board has proposed changes to Regulation Z, which is how the Truth in Lending Act is enforced. Since 1968, Regulation Z and the Truth in Lending Act supposedly have been protecting consumers from deceptive lending practices. The Federal Reserve Board has proposed changes in both the content and timing of what will be required of mortgage lenders. In general, Regulation Z directs that disclosures be made to potential borrowers during the application, underwriting and consummation process. Underlying the regulation’s effectiveness is the assumption that the potential borrower will read, and understand, the implications of the disclosures. Lenders will be required to supply a new one-page Federal Reserve Board publication, titled “Key Questions to Ask About Your Mortgage,” which would explain potentially risky features of a loan. Whether enacted into law or not, the following seven questions contained in the new publication are worth asking the lender: Will my monthly payments reduce my loan balance? Some loans let you pay...

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Posted by on Jun 5, 2009 in WATCHING THE MONEY | 0 comments

Finding the fiscal facts in these times of change

On the Money From the  June 5, 2009 print edition It’s tough to recall a time with so much overlap between government and private business enterprise. Government monetary and fiscal activities are drawing more attention than ever. Relationships that previously were devoutly separate have begun to merge. For example, auto union workers are being transformed into shareholders, and banks now plead to return money to the government rather than accept it. The terms “public” and “private” are becoming hard to distinguish. Witness the most recent initiative by the U.S. Department of the Treasury – the Public Private Partnership Investment Program (PPPIP). A new word, “privblic,” may enter the financial glossary. As government’s commercial activities become more integral to private business, they reach down into everyone’s daily life to a greater degree than ever. It may not be enough to rely only upon the media to provide a meaningful synthesis of these new and untested activities and relationships. Access to information at its source is critical to finding clarity. Here are some...

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Posted by on Apr 4, 2009 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

Some trusts — illegally — try to avoid paying taxes

On the Money From the April 4, 2008 print edition Tax avoidance is the legal utilization of the tax law to one’s own advantage. A person is entitled to reduce their amount of tax by legal means. In Gregory v. Helvering (1935), the U.S. Supreme Court stated that, “The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” Tax evasion is when illegal means are used to not pay taxes. Evasion usually involves deliberate misrepresentation, concealing the true state of fiscal condition, and in particular, dishonest tax reporting. To prove that if a scheme is creative or complex enough it must be legal, some have developed elaborate structures called “tax shelters.” When a tax shelter legitimately limits taxation, it’s called avoidance. If the shelter dishonestly pays no tax, it’s called evasion. More specifically, the structure becomes an “abusive tax shelter” or “abusive tax scheme.” These schemes are characterized by the...

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Posted by on Apr 3, 2009 in RISKS WITH MONEY | 0 comments

SEC takes dim view of abusive naked short selling

On the Money From the  April 3, 2009 print edition As the world economy collapsed last fall, (and some would say it’s premature to use the past-tense of that verb), regulators took aim at activities that have a depressing effect on the financial markets. One of the activities that drew the SEC’s ire was the practice of “abusive naked short selling.” As opposed to “long trading,” which is purchasing a stock for cash and selling it later after the price has increased, “short trading” is the reverse. That is, the short-seller borrows a stock and sells it, and at a later time buys the stock in the market, hopefully at a lower price, and returns the shares that were borrowed. Notice that the first part of a short sale is borrowing the stock, not selling it. That might seem obvious. After all, how can anyone sell something they don’t own? Enter the abusive naked short-seller. In an abusive naked short transaction, the seller doesn’t actually borrow the stock, and fails to...

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Posted by on Feb 6, 2009 in THE INEVITABLE TAXING OF YOUR MONEY | 0 comments

Be sure not to overlook any of the 24 changes to tax law

On the Money From the  February 6, 2009 print edition Form 1040, one of the most foreboding phrases in the English language, had its origin a scant 96 years ago with the passage of the 16th Amendment to the Constitution. In 1913, electricity itself was still rare, let alone electronic appliances. Today, most of what we do is electronic – even replacing paper books and newspapers with eBooks. Much of the financial system runs on electronics including banking, bill paying, trading stocks and now an expanded ability to contribute to the fiscal well-being of the country by filing Form 1040 from the comfort of your own computer. On Jan. 16, the IRS announced its expanded e-File program. According to the IRS, the new e-file program includes improvements to the Free File program that will allow virtually all taxpayers to e-file — free. Filing electronically with direct deposit can produce a refund to the taxpayer in as few as 10 days. To receive a refund in 10 days, the taxpayer should use...

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