Current Events in August 2012

Kumho Tire U.S.A., Inc. is recalling more than 1,200 Kumho Solus KH25 passenger car tires, size 225/45R17, produced in the weeks of 3411 through 2512 (August 21, 2011 through June 23, 2012).

The affected tires could develop cracking in the sidewall, which could result in air loss. Rapid air loss while the vehicle is in use may result in a tire failure that could cause a crash.

Kumho will notify owners, and dealers will replace the affected tires free of charge. The safety recall is expected to begin this month. Owners may contact Kumho at 1-909-428-3999.

Back in the day when I had a bigger tolerance for roughing it, and a deeper desire to experience nature first-hand, I went on a lone camping trip to a place called Assateague, an island not too far from Ocean City, Md.

One of the attractions of this particular campground is its wild ponies that walk around the site. They all seem to be friendly and used to us humans.

For 24-hours it was just me, a sleeping bag and the ponies which was a little too rough for a novice camper like me. Even for that short amount of time.

After the night was over, I realized two things: One, that I probably romanticized the idea of camping and being in nature a bit, and two: Roughing it in the great outdoors might just be a little too rough for my particular taste.

I think the overall experience of the camping trip would have been better if there were a few amenities and comforts added, which is where companies like RVC Outdoor Destinations come in.

RVC caters to consumers who like the natural sights and sounds of camping, but not the challenging aspects -- you know, sleeping on the hard ground or staying in a rundown cabin with tattered furniture.

“Traditional camping typically assumes roughing it. RVC is allowing our guests to camp comfortably and on their own terms,” said RVC founder Andrew F. Cates, in an interview with ConsumerAffairs. “We provide great outdoor environments with lots of amenities and comfort.”

Glamping

Now classing up the camping experience with convenient extras isn't entirely new, as the term “glamping” -- short for glamorous camping -- has been growing in popularity among nature-seekers and travelers for quite some time.

 If you think of a melded combination of an outdoor camping experience and staying in a posh hotel, you'll get an idea of what glamping is.

Take the place Costanoa for example. The West Coast camp site doesn't offer you a flimsy tent and mildewy sleeping bag, it instead provides you with spruced-up bungalows that are more like full-on hotel rooms. The beds even come with heated mattresses.

Some places offer gourmet food throughout the stay, which just might be a little too fancy for those who want to still feel like they're camping. RVC says their vacations are in the middle of traditional camp sites, and high-end glamping locations.

While some enjoy downscaling their usual lifestyle for a few days when camping, many don't want to fish for their meals or head down to the stream for a cool drink.

For those hardy, souls, there are still plenty of RV sites and campgrounds that seemingly refuse to upgrade their locations, and assume that campers prefer a rougher, tougher and more traditional experience.

“It's safe to say that the RV park and campground industry hasn't changed in a meaningful way for over four decades,” says Cates. “This is due to a few things, including the fact there has been no real segmentation, differentiation or consistency in the market. RVC is creating and leading the high-quality full service (i.e. “Hilton”) niche in what has become the inevitable evolution of the industry.”

“Also, many owners simply don't have the capital to improve and/or don't believe it is worth improving outdated, obsolete properties,” he said.

Cates also says the kind of trips RVC provides can be a moneysaver for consumers, compared to going on a traditional family trips like Disney World, for example.

Free wi-fi

“You can choose from multiple lodging options [like] RV sites, fully furnished and climate controlled yurts, [and] cabins. And no matter how you stay with us, you will get free Wi-Fi, great pools, fitness center, good coffee, wine/beer availability, hiking, boat access, cable TV and more — all included with your rate,” he explains.

He also says camping is ideal for children, because of its educational benefits and opportunities for good physical activity.

“Quality family time and connection to nature -- you simply cannot beat getting kids outside and doing it alongside parents and/or grandparents,” Cates says.

RVC Outdoor's destinations are mainly located on the East Coast with several grounds in Florida, one in Georgia, one in Arkansas, and one in North Carolina.

The cost of stay for an RVC trip depends on which type of lodging package you choose. A resort cabin that sleeps four is $139.95 per day. It's equipped with a TV and kitchen, plus heating, air-conditioning and Wi-Fi.

You can also opt for a smaller cabin for $89.95 a day, which also sleeps four. Or, a 16-inch yurt that costs $67.95 a day. Obviously, the bigger housing packages you go with the higher the costs will be.

So the next time you have a taste for camping but don't want to rough it or glamp it. You may want to check out RVC. It's pretty cost effective and could be a unique vacation experience for you and your family.

A group of lawyers is accusing Spirit Airlines of pulling a fast one.

The law firm Podhurst Orseck, based in Miami, Fla. said the airline duped customers by saying its Passenger Usage Fee was a government fee, when it was allegedly just a fee set by Spirit to increase its profits.

A class action suit has been filed against the airline and millions of passengers are expected to be covered, said the firm.

Katherine Ezell, one of the lawyers working on the suit, says Spirit purposely misled customers into believing the passenger fee was a mandatory expense. She also accused the airline of going against federal regulations by not being forthcoming about its costs.

“Since 2008, Spirit Airlines intentionally employed deceptive pricing practices, unlawfully extracting more than $40 million from the class,” she said. “With every ticket sold online or over the phone, Spirit clearly disobeyed the Department of Transportation with the goal of duping its unsuspecting customers. Our lawsuit will aim to hold Spirit accountable for its actions.”

In November 2011, the Transportation Department fined Spirit $50,000 for violating federal aviation laws and the Department’s rules prohibiting deceptive price advertising in air travel.

For a period of time in June 2011, the latest lawsuit says, Spirit used billboards and hand-held posters to advertise new service from Los Angeles that contained an asterisk next to the advertised fare.  On the billboards, the asterisk led to small print which stated that additional taxes, fees and conditions would apply, but did not disclose the amount of those taxes and fees.  The posters did not include any information about the taxes and fees or their amounts. 

Spirit hasn't really built a reputation of offering the most luxurious travel experience, and some even consider the Miramar-based airline to be the Greyhound of the skies when it comes to service and comfortable flights.

“We had a very rough takeoff from Las Vegas,” said Wesley of Fort Worth, Texas in a ConsumerAffairs review. As soon as the wheels left the runway, the pilot was adjusting the plane constantly - back, forth, side to side, etc.

“When coming into Dallas, it was even worse than the takeoff. There were moments that I felt like death was imminent. The plane was rocking back and forth; we hit an air pocket not far from the ground that sent everyone into temporary weightlessness. When landing, the nose of the plane was much higher than usual and the landing was rough,” he said.

Wesley isn't alone. We conducted a computerized sentiment analysis of consumer attitudes based on 36,000 postings to social media over the last year and found results that were, well, somewhat turbulent.

Spirit never reached crusing altitude, climbing at one point to a 43% net sentiment rating but then hitting an air pocket and falling to -19% a few months later. 

Passengers displayed a full range of opinions, with some appreciating the cheap fares and others complaining about poor service.

No benefit

The questionable passenger fee, which ranges from $9 to $17, doesn't provide any customer benefit after purchasing a ticket, and the company has yet to fully explain the true purpose of the cost.

“It's an illusory fee,” Ezell said in a published interview. “It's really a tack-on to the fare, it's to increase their profits and under the DOT regulations, it should be disclosed so that the customers know what they're paying for the fare.”

“Instead they have chosen to embed it with other fees that are either required or sanctioned by the government — and they give it an innocuous name -- so that it sounds like one of the other fees,” she said.

This has been a pretty fine-heavy season for Spirit Airlines, as the company was forced to pay $100,000 earlier this year for not addressing or remedying complaints filed by passengers with disabilities.

And last month the airline lost a decision by the U.S. Court of Appeals in Washington State, which said each airline had to plainly list its ticket prices, including taxes and extra fees.

According to Ezell, this new lawsuit is about making Spirit Airlines accountable for what she and her colleagues consider to be not only deceptive business practices, but a huge moneymaker for the company.

“We don't know, but we think it's possible that they've made as much as $40 million in profit,” she said.”

Spirit Airlines has since denied the claims of doing anything deceitful or illegal.

Inspectors from the Manatee County, Fla., Building and Development Department inspected 27 homes in a KB Home development and found 20 of them to be "unsafe."

KB Home, one of the largest homebuilders in the U.S., has offered repairs but residents have refused. They are demanding that KB Home buy back the houses.

The development in question is the Willowbrook subdivision in East Bradenton,  near Sarasota. Homeowners have complained for years about what they say are  substandard materials and shoddy workmanship, particularly in the stucco.

'Plagued with water intrusion'

"Our community of Willowbrook has been plagued with water intrusion issues and more," Andy, a Willowbrook resident, wrote in a post on ConsumerAffairs.

Andy and other residents complain that water continuously leaks into their homes, damaging strucco, rotting wood and forming mold. The video below, shot by a local TV station, illustrates some of the homeowners' complaints.

Company statement

A spokeswoman for KB Home released a statement saying the company remains committed to customer satisfaction and stands behind its product.

"We were actively making the necessary repairs and then received a claim from the (Willowbrook) Association, which caused some delays on our part as we evaluated the claim, the statement said. Today, KB Home continues to work closely with the Association and building department to reach a resolution and begin the repair process within the next few days."

But the only resolution the homeowners say they will accept is for KB Home to repurchase the damaged homes. Meanwhile, a review of complaints from owners of KB Home properties in other developments in Florida suggests Willowbrook might not be an isolated case.

Elsewhere in Florida

"The biggest problem is our stucco issues," Robin, of Jacksonville, wrote in a ConsumerAffairs post. "It has been cracking since day one and we have said something about it since day one and all they say is that it is the warranty guidelines. Now, two years into our brand new home, there are three areas where our stucco is bulging and about to fall off. The only thing KB wants to do is fill in the cracks and paint it. I actually had a stucco specialist come out and take a look at it who wrote up a report stating that KB's contractors applied the stucco wrong, that it is always going to crack and how it can't be fixed the right way."

In fact, stucco issues appear to be a prevailing theme in complaints from Florida about KB Home.

"In 2011 we hired an engineering group and they conducted an inspection of the community," Gail, of Clearwater, wrote to ConsumerAffairs. Results of engineer inspection: every building has improperly installed stucco over wood frame which has created water damage. Paints and sealants were improperly applied. Very few control joints were found in stucco panels, which causes cracks on the outside walls and allows water to get in. Flashing is improperly installed. Building codes/instructions were not followed by the subcontractor."

Major player

According to its corporate profile at Yahoo Finance, KB Home delivered 5,812 homes in fiscal 2011. It has operations in Arizona, California, Colorado, Florida, Maryland, Nevada, North Carolina, Texas, and Virginia. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in 2001. It was founded in 1957 and is headquartered in Los Angeles. 

But the complaints from customers have yet to be noticed on Wall Street. Just this week JPMorgan Chase upgraded KB Home stock, raising its price target from $9.50 to $13.

Surging gasoline prices in California and the Midwest are pushing the national average price of gasoline sharply higher this week.

The national average price of self-serve regular today is $3.673 per gallon, compared with $3.567 last Friday, according to AAA's Fuel Gauge Survey. The price has jumped 29 cents a gallon in the last month.

Diesel fuel is also rising. The average price today is $3.878 per gallon, versus $3.794 a week ago.

A refinery fire at Chevron's massive facility in Richmond, CA, has created shortages on the West Coast that have driven up prices. Prices in the Midwest, meanwhile, are still sharply higher because of a pipeline leak and refinery problems in that region. The higher prices in those states have contributed to the jump in the nationwide average prices this week.

At the same time, the U.S. continues to draw down its stockpiles of crude oil at a faster-than-expected rate. It's not clear, however, whether the drawdown is more attributable to an increase in demand or a reduction in imports.

Among the states, prices appear to be rising slowest in the mountain west and southwest. Arizona, New Mexico, Utah and Wyoming are now among the states with the least expensive fuel. Virginia and Louisiana have dropped out of that category.

The states with the highest gas prices this week are:

• Hawaii ($4.155)
• Illinois ($4.021)
• California ($3.986)
• Michigan ($3.942)
• Connecticut ($3.937)
• Alaska ($3.918)
• Wisconsin ($3.907)
• New York ($3.879)
• Indiana ($3.841)
• Ohio ($3.803)

The states with the lowest gas prices this week are:

• Arizona ($3.348)
• South Carolina ($3.396)
• New Mexico ($3.402)
• Mississippi ($3.440)
• Utah ($3.450)
• Alabama ($3.466)
• Tennessee ($3.467)
• Arkansas ($3.483)
• Wyoming ($3.493)
• Texas ($3.495)

At the beginning of 2012 retailer J.C. Penney, under the new leadership of CEO Ron Johnson, embarked on a number of bold, dramatic changes. The reaction from many long-time Penney's customers was not overly positive.

Since then the company has struggled and now reports it lost $81 million, or 37 cents a share, in the second quarter of the year. That's on top of the $163 million the department store chain lost in the first quarter. The second quarter loss would have been even steeper if not for the sale of some company assets during the period.

"We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are confident the transformation of J.C. Penney is on track," Johnson said. "The transition from a highly promotional business model to one based on everyday value will take time and we will stay the course."

Alienated consumers

From the start, many existing Penney's customers objected to the changes initiated under Johnson's new regime. In particular customers questioned why Penney's would do away with its sales and coupon promotions. The "fair and square" pricing system seemed to confuse some. Others objected to the company's television advertising.

Complaints to ConsumerAffairs, however, have tapered off in recent months, suggesting that angry consumers who vowed to stop shopping at Penney's have been true to their word. And the falling sales suggest that could be the case.

Perhaps more significant than the quarterly loss, J.C. Penney withdrew its guidance -- its expectations for the rest of the year to guide Wall Street investors. But rather than revising the guidance, as is common on Wall Street, it did not offer a new number. Back in May the company said it expected to earn $2.16 a share for the year.

Doubling-down

In June, amid falling sales, Johnson backtracked a bit, reinstating periodic sales at Penney's stores. Despite that concession, the company appears to be doubling-down on its transformational course.

"We continue to learn and adjust, and fully expect that our unique, specialty department store experience will drive J.C. Penney's long-term success," he said. "Our rock solid balance sheet will support the execution of our transformation and position us for growth beginning in 2013."

Perhaps, but there are plenty of doubters on Wall Street. Goldman Sachs analyst Adrianne Shapira told Forbes the company lacks "meaningful traffic drivers" without coupons and she was not surprised Penney's was forced to "retract what proved to be overly optimistic initial guidance.”

A technology that saves gasoline by stopping and starting the engine when a vehicle is idle is gaining ground in the U.S.

The stop-start system, a technology that shuts off a vehicle's engine when stopped in traffic, is fairly common in Europe and Japan. Lux Research predicts that more than eight million vehicles in North America will be equipped with engine stop-start systems by 2017.

As the name implies, the system shuts down the engine when the vehicle comes to a stop, such as at a traffic signal. It springs back to life when the driver touches the accelerator. With each start and stop it saves a few drops of fuel.

Around since the 80s

The technology has been around for a while -- as far back as the 1980s. But while 40 percent of the vehicles in Europe and Japan are equipped with the feature, it hasn't caught on in the U.S. But that's going to change, experts say, as more cars for the U.S. market are being equipped with the technology.

Currently all hybrid cars have stop-start capability but use a different technology than the systems on conventional powertrains. The first non-hybrid stop-start systems in the U.S. market are on 2012 highline vehicles from BMW, Mercedes and Porsche, according to AAA.

Jaguar is adding the system for the 2013 model year, as are popularly priced models from Ford and Kia. Even trucks will start to see some systems with Dodge adding stop-start to its V6-powered Ram 1500 pickup for a one mile per gallon fuel economy improvement.

Savings aren't dramatic

Does it save gas? Yes, but consumers should understand the savings are not dramatic, which may be one reason why it hasn't caught on in the U.S.

If gasoline costs $3.75 per gallon, the owner of a car that normally gets 20 mpg and is driven 12,000 miles per year would save an estimated $167 per year in fuel costs. It would take two years for the system to pay for itself.

Consumers should also understand the system takes some getting used to. Drivers new to the technology will need to learn that engine shutdown at idle is a normal thing and not a sign of a problem.

In some vehicles, heating and air conditioning performance could suffer if the engine remains shut down for an extended time. Finally, the larger and more powerful batteries that are required for stop-start systems will be more expensive to replace when the time comes.

That explains it

You may now begin to see why the system, until now, hasn't really been all that popular in the U.S. It raises the prices of the car, requires adapting to a new way of driving, and uses more expensive batteries. So why is it suddenly appearing in more U.S. vehicles?

"This technology is only going to gain momentum as vehicle manufactures work to meet the more stringent Corporate Average Fuel Economy (CAFE) standards set for 2016," said John Nielsen, AAA's Director of Automotive Engineering and Repair.

The savings in fuel aren't that significant for individual consumers, but cumulatively they could add up to significant reductions in gasoline demand, reducing the amount of oil the U.S. is required to import.

The Federal Trade Commission (FTC) is mailing 9,282 refund checks to consumers who were deceived by false promises that they could earn substantial income if they bought and followed the "Stefanchik Program" to buy and sell privately held promissory notes and mortgages.

The agency alleged that claims made by John Stefanchik and his company, Beringer Corporation, were false and unsubstantiated, and that most consumers made no money at all. The refunds are a result of a court settlement resolving a money judgment against the defendants.

More than $855,000 is being returned to consumers; each payment will be $92.16. Consumers who receive the checks from the FTC's refund administrator should cash them within 60 days of the date they were issued. The FTC never requires consumers to pay money or provide information before redress checks can be cashed.

Consumers with questions should call the refund administrator, BMC Group, at 1-888-768-2051, or go here.

Anyone thinking about a work-at-home opportunity should read Looking to Earn Extra Income? Rule Helps You Avoid Bogus Business Opportunity Offers.

Affected by one of the worst droughts on record, U.S. corn growers are forecast to harvest 87.4 million acres in 2012 -- down two percent from June estimates, according to the National Agricultural Statistics Service's latest Crop Production report.

The growing season began on a very optimistic note, with the fastest corn planting pace on record. However, growers’ optimism waned when the warm spring was followed by a very dry summer, developing into a drought throughout most of the Corn Belt states.

Despite planting the largest number of acres to corn in the past 75 years, growers are forecast to produce 10.8 billion bushels in this year -- down 13 percent from 2011. Based on conditions as of August 1, corn yields are expected to average 123.4 bushels per acre -- down 23.8 bushels from last year.

The effect of the smaller-than-forecast crop is likely to be felt by consumers when they go grocery shopping. Several food makers have already said they plan to pass the higher prices on to shoppers.

Soybeans down, too

Just as with corn producers, soybean growers are greatly affected by the drought conditions. This year’s soybean production is forecast at 2.69 billion bushels, down 12 percent from 2011. Soybean yield is expected to average 36.1 bushels per acre, down 5.4 bushels from the 2011 crop.

In contrast to corn and soybeans, all wheat production remains largely unaffected by the drought and is forecast at 2.27 billion bushels, up 13 percent from 2011. Based on August 1 conditions, the yield for all wheat is forecast at 46.5 bushes per acre, up 0.9 bushel from last month, and up 2.8 bushels up from last year. Harvest in the 18 major producing states was 85 percent complete by July 29.

Good year for cotton

The report also included the first indication for this year’s cotton production. Growers are forecast to produce 17.7 million 480-pound bales this growing season -- up 13 percent from 2011. Producers expect to harvest 10.8 million acres of all cotton, up 14 percent from last year. This forecast includes 10.6 million acres of Upland cotton and 233,400 acres of Pima cotton.

NASS interviewed more than 28,000 producers across the country in preparation for this report. The agency also conducted field and lab measurements on corn, soybeans, wheat and cotton in the major producing states, which usually account for about 75 percent of the U.S. production.

The agency is also gearing up to conduct its September Agricultural Survey, which will focus on wheat, barley, oats and rye growers. That survey will take place during the first two weeks of September.

Following a public comment period, the Federal Trade Commission (FTC) has accepted as final a settlement with Facebook resolving charges that Facebook deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public.

Marleen of Rotterdam,is among those unhappy with the way Facebook does things. “Facebook intentionally breached the privacy policy by involving improper and unauthorized collection, use, disclosure, retention and disposal of my personal information/account,” she said in a ConsumerAffairs post. “Therefore, I will press charges against Facebook. I am fed up and I will publicly warn people against the danger of an account on Facebook.”

The settlement requires the social media giant to take several steps to make sure it lives up to its promises in the future, including by giving consumers clear and prominent notice and obtaining their express consent before sharing their information beyond their privacy settings, by maintaining a comprehensive privacy program to protect consumers' information, and by obtaining biennial privacy audits from an independent third party.

Split decision

The Commission vote to approve the final order and letters to members of the public who commented on it was 3-1-1 with Commissioner J. Thomas Rosch dissenting and Commissioner Maureen K. Ohlhausen not participating.

A statement written by Chairman Jon D. Leibowitz and Commissioners Edith Ramirez and Julie Brill affirmed that -- based on the extensive investigation of the staff -- there is a strong reason to believe that the settlement is in the public interest, and that the Order's provisions make clear that Facebook will be liable for a broad range of deceptive conduct.

As set forth in a separate statement, Commissioner Rosch dissented from the acceptance of the final consent order, questioning whether Facebook's express denial of liability provided "a reason to believe" that the settlement was "in the interest of the public" and expressing concern that the final consent order may not unequivocally cover all representations made in the Facebook environment. 

With a collapsed real estate market, you might expect that the market would be flooded with homes for sale. That might have been true at one point, but it isn't now.

Redfin, which describes itself as a technology-powered real estate broker, says it tracks trends in major U.S. markets and in all of the markets measured, the number of houses for sale declined since July 2011. In 16 of 18 markets, the company says, the decline was by 20 percent or more.

"Because inventory is so low, when clients find a house they love, they will do almost anything to get it," said Brad Le, a Redfin Agent in Silicon Valley. "Buyers are offering all-cash and no contingencies, one to three months of free lease-backs in case the homeowners want to stay in the home after closing, and even escalation clauses."

No longer a buyer's market

Escalation clauses, in which a buyer's bid automatically is raised in the event of a competing offer, were quite common during the housing boom but have been almost non-existent since 2008.

As a result of fewer homes on the market, prices for homes are beginning to rise, a trend first noted earlier in the year. The National Association of Realtors (NAR) reports the median existing single-family home price rose in 110 out of 147 metropolitan statistical areas(MSAs) in the second quarter.

Three areas were unchanged and 34 had price declines. In the first quarter of 2012 there were 74 areas showing price gains from a year earlier, while in the second quarter of 2011 only 41 metros were up.

Industry insiders say the trend is encouraging but might not be lasting.

Might not have legs

"Last month, we noted that the market was strong in June but could falter in July as sellers began to test demand at higher asking prices," said Redfin CEO Glenn Kelman. "Now the market has flattened, and will likely sag in the months to come.

Lawrence Yun, NAR's chief economist, is more hopeful, saying home prices should rise in even more markets during upcoming quarters.

“It’s most encouraging to see a growing number of metro areas with rising median prices, which is improving the equity position of existing homeowners. Inventory has been trending down and home builders are still under-producing in relation to growing demand.”

Yun also noted that some of the improvement in prices is due to a smaller share of sales in low price ranges where inventory is tight. The national median existing single-family home price was $181,500 in the second quarter, up 7.3 percent from $169,100 in the second quarter of 2011.

It's the strongest year-over-year increase since the first quarter of 2006 when the median price rose 9.4 percent, but even with the gain the current price is 20.1 percent below the record set in 2006.

The Consumer Financial Protection Bureau (CFPB) is proposing rules to protect homeowners from surprises and costly mistakes by their mortgage servicers.

“Millions of homeowners are struggling to pay their mortgages, often through no fault of their own,” said CFPB Director Richard Cordray. “These proposed rules would offer consumers basic protections and put the ‘service’ back into mortgage servicing. The goal is to prevent mortgage servicers from giving their customers unwelcome surprises and runarounds.”

Mortgage servicers are responsible for collecting payments from the mortgage borrower on behalf of the loan’s owner. They also typically handle customer service, escrow accounts, collections, loan modifications, and foreclosures. Generally, the borrower has little say in the choice of mortgage servicer. Lenders frequently contract out servicing after the mortgage deal is signed.

Even before the financial meltdown, the mortgage servicing industry had experienced problems with bad practices and sloppy recordkeeping. Now, with millions of homeowners in distress, many borrowers have complained about problems seeking loan modifications or other alternatives to and information about avoiding foreclosure. Borrowers say that servicers lose their applications and paperwork for loan modifications. And borrowers say that when errors arise, they find it difficult to have them corrected.

Vince of Spring City, PA's case is not unique. “We started the paperwork in February 2012 for a loan modification on our mortgage from Chase,” he said in a ConsumerAffairs post. “It is now the end of July 2012 (5 months later) and they are still asking for paperwork. Either they never received it, or the paper work is outdated. Every 2 weeks, they ask for 4 to 5 additional things; and at times, the same paperwork that was sent previously.”

Proper information

The first set of CFPB’s proposed rules would provide consumers with clear and timely information about their mortgages so they can avoid costly surprises. They would bring greater transparency to the market. The proposed rules would do this with:

• Clear Monthly Mortgage Statements: Servicers would be required to provide regular statements which would include: a breakdown of payments by principal, interest, fees, and escrow; the amount of and due date of the next payment; recent transaction activity; and warnings about fees.
• Warning Before Interest Rate Adjusts: Servicers would have to provide earlier disclosures before the interest rate adjusts for most adjustable-rate mortgages. This disclosure would include information about alternatives and counseling resources if the new payment is unaffordable. This requirement would provide greater clarity to borrowers about the impact of interest rate changes. Existing disclosures for interest rate adjustments that cause a change in mortgage payments would be amended to include improved information and arrive earlier so that borrowers can anticipate consequences of payment changes.
• Options for Avoiding Costly “Force-Placed” Insurance: Servicers have the responsibility to ensure that borrowers maintain property insurance. If the borrower does not maintain this insurance, however, the servicer has the right to purchase insurance to protect the lender’s interest in the property. This is called “force-placed” insurance and is typically more expensive than insurance the borrower could privately purchase. The CFPB is proposing a rule that would provide more transparency in this process, including requiring servicers to give advance notice and pricing information before charging consumers for this insurance. The servicer would also be required to terminate the insurance within 15 days if it receives evidence that the borrower has the necessary insurance and the insurer would refund the force-placed insurance premiums.
• Early Information and Options for Avoiding Foreclosure: Servicers would be required to make good faith efforts to contact delinquent borrowers and inform them of their options to avoid foreclosure.

'No-runaround' rules

The second set of proposed rules would impose common-sense requirements for handling consumer accounts, correcting errors, and evaluating borrowers for options to avoid foreclosure. These “no-runaround” rules would include:

• Payments Promptly Credited: Servicers generally would have to credit a consumer’s account as of the date a payment is received.
• Maintain Accurate and Accessible Documents and Information: Servicers would be required to establish reasonable policies and procedures to provide accurate and current information to borrowers and minimize errors. They would have to submit accurate legal documents that comply with applicable law, help borrowers on options to avoid foreclosure, and provide oversight of their contractors and foreclosure attorneys.
• Errors Corrected Quickly: If a consumer notifies the servicer that she thinks there has been an error, the servicer would be required to acknowledge receiving the notification, conduct a reasonable investigation, and -- in a timely manner -- inform the consumer about the resolution.
• Direct and Ongoing Access to Servicer Personnel To Assist Delinquent Borrowers: Servicers would be required to provide delinquent borrowers with direct, easy, ongoing access to employees who are dedicated and empowered to help delinquent borrowers.
• Evaluate Borrowers For Options To Avoid Foreclosure: Servicers that offer options to borrowers to avoid foreclosure, such as loan modifications or other payment plans, would be required to promptly review applications for those options. Servicers would be prohibited from proceeding with a foreclosure sale until the review of the borrower’s application is complete. Servicers would also be required to let borrowers know when applications are incomplete and to allow borrowers to appeal certain servicer decisions.

The CFPB’s proposed rules would mean that consumers would get better and timelier information about where they stand in the long foreclosure process. If their loan modification application is missing paperwork, for example, the servicer would have to tell them. Critically, the servicer would not be able to actually foreclose on the consumer without fully considering borrowers’ timely and complete applications for alternatives to foreclosure. The servicer would only be able to proceed with foreclosure if: a borrower does not qualify for options to avoid foreclosure; the borrower rejects a servicer’s offer of such options; or the borrower fails to keep up his or her end of a deal for such an option.

All of these proposed rules are part of the CFPB’s continuing effort to address servicing problems and create uniform standards for the mortgage servicing industry -- regardless of how big or small the servicer, where it is based, or what is its business charter.

Seeking your opinion

In addition, CFPB is working with the Cornell University e-Rulemaking Initiative (CeRI) to make it easier for the public to comment on the proposed rules through a pilot project called Regulation Room, which provides an online environment for people and groups to learn about, discuss, and react to selected rules proposed by federal agencies. Individual contributions to Regulation Room will not become formal public comments on the CFPB’s docket, but CFPB expects contributions will be incorporated into a public report prepared by CeRI researchers and submitted to the CFPB’s docket for use in preparation of a final rule.

The public will have 60 days -- until October 9, 2012 -- to review and provide comments on the proposed rules. The CFPB will review and analyze the comments before issuing final rules in January 2013.

The Federal Aviation Administration (FAA) is proposing a $681,200 civil penalty against Federal Express Corp. (FedEx), of Memphis, Tenn., for allegedly violating U.S. Department of Transportation (DOT) Hazardous Materials Regulations.

The FAA alleges that between Aug. 2 and Aug. 12, 2010, FedEx employees in numerous locations around the country improperly accepted several dozen shipments containing hazardous materials for transportation by air. Agency inspectors discovered the alleged violations during an inspection and records check of FedEx facilities in the Los Angeles area.

Further infractions

The FAA also alleges that in 19 instances on Aug. 12, 2010, the airline failed to provide pilots of flights to and from Los Angeles with the required "accurate and legible written information" about shipments of hazardous materials it accepted for transportation by air. Additionally, the the government contends FedEx failed to document hazardous materials training and testing for three individuals who were among those accepting the shipments for the company. The training includes security awareness, and initial and recurrent training on the handling of hazardous materials. This training is necessary to ensure compliance with the hazardous materials regulations.

"To ensure the safe transport of hazardous materials aboard aircraft, operators must follow appropriate rules and procedures, and provide proper training," said Acting FAA Administrator Michael P. Huerta.

Federal Express has 30 days from the receipt of the FAA's enforcement letter to respond to the agency. 

The U.S. Food and Drug Administration (FDA) has approved Marqibo (vincristine sulfate liposome injection) to treat adults with a rare type of leukemia called Philadelphia chromosome negative (Ph-) acute lymphoblastic leukemia (ALL).

ALL is a rapidly progressing form of blood and bone marrow cancer that is more commonly diagnosed in children than adults. According to the National Cancer Institute, an estimated 6,050 men and women will be diagnosed with ALL and 1,440 will die from the disease this year.

Seriously ill

Marqibo is approved for patients whose leukemia has returned (relapsed) two or more times, or whose leukemia has progressed following two or more regimens of anti-leukemia therapy. Marqibo contains vincristine, a commonly used anti-cancer drug, encased within a liposome, a drug delivery vehicle composed of material similar to that of cell membranes. It is an injection administered once a week by a health care professional.

“Marqibo’s approval demonstrates the FDA’s commitment to the development and approval of drugs that address serious, unmet medical needs,” said Richard Pazdur, M.D., director of the Office of Hematology and Oncology Products in the FDA’s Center for Drug Evaluation and Research. “Marqibo provides an additional option for Philadelphia chromosome negative acute lymphoblastic leukemia patients whose disease is unresponsive to available therapies.”

Speedy action

Marqibo is approved under the FDA’s accelerated approval program, which allows the agency to approve a drug to treat a serious disease based on clinical data showing that the drug has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit to patients. This program provides earlier patient access to promising new drugs while the company conducts additional clinical studies to confirm the drug’s clinical benefit and safe use. Marqibo also received orphan-product designation by the FDA because it is intended to treat a rare disease or condition.

The drug’s effectiveness was evaluated in a single clinical trial in adult patients whose leukemia had relapsed at least two times despite standard treatments, and who had at least one previous treatment response lasting at least 90 days. The study objective was to determine the response rate to Marqibo, as either a complete remission (CR) or a complete remission with incomplete blood count recovery (CRi). Of 65 patients enrolled, 10 patients, or 15.4 percent, responded with either a CR or CRi. In the 10 patients achieving CR or CRi, the median duration of documented remission was 28 days. The median time to the first event of relapse, death, or next therapy was 56 days.

The safety of Marqibo was evaluated in two single-arm trials of 83 patients who received the clinical treatment regimen. Serious adverse events such as low white blood cell counts with fever, low blood pressure, respiratory distress and cardiac arrest occurred in 76 percent of the patients studied. The most common side effects observed during clinical studies include constipation, nausea, low blood cell counts, fever, nerve damage, fatigue, diarrhea, decreased appetite, and insomnia.

Prescription warning

Prescribing information for Marqibo will carry a Boxed Warning alerting patients and health care professionals that the drug must be administered only through a vein (intravenously) because it is deadly if administered in other ways, such as into the spinal fluid.

The Boxed Warning also states that Marqibo has different dosage recommendations than vincristine sulfate injection alone. To avoid overdose, it is important for health care professionals to verify the drug name and the dose before administration. Special requirements for preparation of the drug are detailed in the label.

As expected, Google will pay $22.5 million to settle federal charges that it disregarded consumers' privacy settings on Apple's Safari Web browser. It is the largest civil penalty ever assessed by the Federal Trade Commission (FTC) for violating a Commission order. 

Perhaps more significantly, in a conference call with reporters, an FTC official said the commission finds it "troubling" that Google says the privacy violation was inadvertent.

Google has said the whole affair was a "mistake" and said it stopped placing unauthorized cookies on users' machines as soon as the Wall Street Journal published a story about it.

"I think that defense raises red flags to regulators," said David Vladeck, Director of Consumer Protection at the FTC. "Their intent is immaterial."

Like a police officer talking to a motorist who argues he didn't know there was a speed limit, Vladeck spelled it out: "Their intent is immaterial. It's troubling to us that Google says they didn't know it was going on. A company like Google is the steward of personal information from hundreds of millions of people and they have to do better."

Google has never publicly apologized to consumers who were misled.

Cookies disabled

In addition to the civil penalty announced today, the order also requires Google to disable all the tracking cookies it had said it would not place on consumers’ computers.  

In the conference call, James Kohm, Associate Director for Enforcement at the Commission, said that most of the illicit cookies have already been removed but said that under the terms of the order, Google has until February 15, 2014 to remove all of them.

"The extra time is because they can only remove the cookies when somebody visits a site in their ad network," Kohm said. "The stragglers are those who haven't gotten to those places yet."

Kohm said that, besides an outside auditor, the FTC has "a very active monitoring compliance program." 

Wired was wrong

Kohn and Vladeck disputed published reports in Wired magazine and elsewhere that the FTC did not know of the issue until a Stanford researcher went public with his discovery of the privacy violations.

"Don't believe everything you read in magazines. We were aware of this problem very early on," Vladeck said. "We were investigating this well before any publication in the Wall Street Journal or otherwise. The Wired article was wrong.

"We were on this shortly after this problem arose," Vladeck insisted. "It takes time to build a case that will stand up in court. As a law enforcement agency, we operate under legal constraints and our investigations are not public."

Long rap sheet

It's the latest in a long series of "accidental" privacy violations by Google. It pales in comparison to the so-called "Wi-Spy" case back in 2010, when Google admitted it invaded Wi-Fi networks and downloaded private data from those networks as its fleet of gadget-encumbered cars crept through neighborhoods around the world, collecting information for its street-mapping project.

The commission in April fined Google $25,000, saying it was obstructing the agency's investigation of the matter. Google, as usual, said any such obstruction was inadvertent. It didn't apologize. 

Last year, in a settlement with the Justice Department, Google agreed to pay a $500 million penalty for promoting and advertising unlawful sales of prescription drugs through its ubiquitous AdWords program. It said its role in establishing a global network of illicit drug sites was unintentional.

Heavy price

Responding to questions about whether the penalty was adequate, Vladeck said Google was "paying a heavy price."

"$22.5 million may not seem like a lot of money to Google but given the magnitude and duration of this violation, we think it's quite substantial," he said. "We have Google under order for another 19 years and this sends a message that the FTC isn't kidding around," he said.

Ads, ads, ads

Google, the developer of the world’s most popular Internet search engine, generates billions of dollars in revenues annually from selling online advertising services, including the delivery of targeted ads online.  Cookies are small pieces of computer text that are used to collect information from computers and can be used to serve targeted ads to consumers.  By placing a tracking cookie on a user’s computer, an advertising network can collect information about the user’s web-browsing activities and use that information to serve online ads targeted to the user’s interests or for other purposes.

In its complaint, the FTC charged that for several months in 2011 and 2012, Google placed a certain advertising tracking cookie on the computers of Safari users who visited sites within Google’s DoubleClick advertising network, although Google had previously told these users they would automatically be opted out of such tracking, as a result of the default settings of the Safari browser used in Macs, iPhones and iPads. 

According to the FTC’s complaint, Google specifically told Safari users that because the Safari browser is set by default to block third-party cookies, as long as users do not change their browser settings, this setting “effectively accomplishes the same thing as [opting out of this particular Google advertising tracking cookie].”  In addition, Google represented that it is a member of an industry group called the Network Advertising Initiative, which requires members to adhere to its self-regulatory code of conduct, including disclosure of their data collection and use practices.

Broken promise

Despite these promises, the FTC charged that Google placed advertising tracking cookies on consumers’ computers, in many cases by circumventing the Safari browser’s default cookie-blocking setting.  Google exploited an exception to the browser’s default setting to place a temporary cookie from the DoubleClick domain. 

Because of the particular operation of the Safari browser, that initial temporary cookie opened the door to all cookies from the DoubleClick domain, including the Google advertising tracking cookie that Google had represented would be blocked from Safari browsers.

The FTC charged that Google’s misrepresentations violated a settlement it reached with the agency in October 2011, which barred Google from – among other things – misrepresenting the extent to which consumers can exercise control over the collection of their information.  The earlier settlement resolved FTC charges that Google used deceptive tactics and violated its privacy promises when it launched its social network, Google Buzz. 

When it comes to purchasing a laptop or tablet at a retail location, many think of Apple stores first.

With Apple's neon signage, wide open floor space, and many products to test out, the chain has done a good job of making their stores a fun and interactive place to visit.

But what if you're not a Mac person and Apple is not your choice of fruit when it comes to buying electronics? You might want to head to one of Microsoft's retail locations.

First being introduced to the public back in 2009, Microsoft retail stores have kind of lingered in Apple's shadow when it comes to electronic brick-and-mortars. The first store opened on the West Coast and eventually spread out to the East by 2011.

Today you can find stores in many neighborhoods and malls throughout the United States, and it seems Microsoft has taken some of Apple's store ideas when it comes to making its shopping experience seem eventful.

This was apparent when I went into the Microsoft store in Tysons Corner, Va., inside the Washington, D.C. area's largest shopping mall.

Not only was I eager to see what was available in the laptop and tablet world, I wanted to get a peek at what the overall shopping experience was like, since I've been only to Apple stores a lot lately.

Upon walking into the Microsoft store, I noticed a very similar set-up to Apple locations.

Plenty of eager store associates were spread around the floor ready to pounce with assistance, and the surroundings had a lot of colors and bright images to make the place seem part gadget store and part discotheque.

Vizio CT15

But it's all about the store's products, right? Of course a cool shopping experience is nice, but what's actually on the shelves ultimately separates any store from its competition. So the first thing I checked out was the Vizio CT15 laptop for $1,249.

The first thing I noticed was how thin the laptop was, but ironically it wasn't that light in weight. It's almost like my eyes and brain were deceived, because one usually associates thinness with lightness, but not in this case.

Also the overall design of the model is pretty ho-hum, as it seems Microsoft kind of wants to stay away from extreme flash. Maybe this is a conscious decision by company execs wanting to further separate their products from Apple's teeny-bopper looking devices.

But what the Vizio lacks in prettiness it makes up for in its processing speed and sharp image display. I was able to move through different applications pretty quickly, and the internal touch pad made for a smooth navigation experience from window to window.

I was also eager to check out the speakers because laptops, whether Microsoft or Apple, are notorious for their horrible sound. It's almost as if the two companies have improved many of their products' functions, but ignored improving laptops' speakers entirely.

Bob Dylan's “Rolling Stone” seemed to be good place to start to check out both the high and low frequencies of the speakers. There's something about Dylan's interesting whiny voice that serves as a good tester for a laptop's sounds for music or video.

The speakers disappointed though, as they provided the same thin and small musical output that most laptops provide.

The Vizio's key pad was just okay too.

The wide square buttons were big enough, but when pressed, it seemed like my fingers met with resistance, as if the buttons should be allowed to be pressed down further. I would imagine in the long term, it wouldn't make for the most comfortable typing experience.

Sony Vaio E15

I also checked out the Sony Vaio E15 for $699.

Upon lifting it, I found it to be pretty heavy. For those who tote their laptops to and fro, the six pounds it weighs could be a little labor intensive, especially if you carry the thing in a laptop bag with a shoulder strap.

Have you ever received that painful shoulder-strap skin indentation? It usually happens when the device you're carrying weighs too much. It's not fun at all.

The Sony's display screen was pretty decent too. It's safe to assume that Apple has raised the display-screen bar. The Vaio E15 offered a bright and lively looking picture, with colors that seemed to sort of move off the screen.

Its speed was also noticed, as it seemed to process requests just as fast as the more expensive Vizio. But I didn't care for the small buttons on the Vaio. Just like many small computers with tiny keys, they don't have a lot of “give” or bounce-back when being pressed.

Speaker-wise, the Vaio was better than the $1,249 Vizio. I brought up the same Dylan song, at the same volume, and the sounds were delivered in a more prominent fashion. The loudness and clarity of the speaker sounds were pretty impressive by laptop standards.

As far as the design -- you guessed it -- basic black with no eye-catching qualities. It's a bit puzzling why Microsoft laptops remain so bland looking.

Acer Aspire V3

Next was the Acer Aspire V3, for $499. The laptop didn't feel either compact or light-weight at 5.7 pounds. Again, score one for Apple laptops that seem to all be pretty light and easy to carry.

The small keys seemed like they wouldn't be too kind to the fingers after a while, and the plain black design provided no eye-candy at all, unless you like licorice.

The display wasn't bad but nothing to write to mom about. The images were bold enough for everyday use, but compared to other machines around it, the contrast was very noticeable.

The Aspire also comes with a 4.5-hour battery life, which isn't too long with some batteries going eight hours or more these days. The speakers were also just average, similar to the speakers I tried on the Vizio CT15.

Samsung Series 7 Tablet

If you're one of the many consumers who are choosing tablets over laptops these days, The Samsung Series 7 Tablet PC for $1,299 might be the one for you. A cool touch screen is always nice to use, as users can bounce back and forth between applications with seamless ease.

It also brings up a virtual keyboard that's pretty small in size, but you can adjust the wideness by dragging the corners of the keyboard with your finger.

For those who prefer an actual keyboard you can purchase one for $59.99, but the buttons are pretty small and not made for wide fingers. Also, carrying around both tablet and keyboard could be a bit cumbersome for many, but that's obviously a sheer matter of preference.

The overall display screen was great though, and it seemed better and brighter than any of the laptops I tried in the store.

The processing speed of the Samsung tablet was smartphone-fast, and the overall weight of the device was light and easy to carry. A good buy if you prefer tablets over laptops, and if you don't mind the $1,299 price tag.

Microsoft has continued to do a good job of competing with Apple retail stores, in terms of a fun shopping experience with plenty to see and do.

Sure you can buy one of Microsoft's products at many retail locations, but going to the actual store will better allow you to compare them to other store items.

The sales people are quite helpful too, and could possibly give you more in-depth answers than say a person working at a Best Buy or Staples.

And with the new Windows 8 coming out just around the corner, people will be racing to Microsoft stores just to see how it works and compares to Windows 7. The sales person said an official release date or price point hasn’t been established yet, but stay tuned.

Splenda Essentials promises to "make everything you sweeten a little bit better for you" but a lawsuit filed today says the promise is false and charges that Splenda Essentials provides no health benefits whatsoever.

Splenda Essentials is, essentially, the no-calorie sweetener Splenda with a few B vitamins, antioxidants and fiber added. Those additions are designed to give the impression that Splenda Essentials will help one lose weight, avoid disease, or confer other health benefits.

"Make everything you sweeten a little bit better for you with Splenda Essentials Sweetener Products!" is how the product line is described on the Splenda Essentials Web site, which goes on to tout the sweeteners' "small boost of healthy nutrients–B vitamins, antioxidants, or fiber."

Splenda Essentials with B Vitamins' label states that the product "helps support a healthy metabolism," and the Splenda web site describes how the vitamins support the metabolism of fats, carbohydrates, and proteins.

The lawsuit filed in the U. S. District Court for the Northern District of California on behalf of Barbara Bronson and others alleges that that kind of language implies the burning of additional calories and the prospect of weight loss.  But not only are most Americans not deficient in B vitamins, no reliable studies show that supplementation with B vitamins promotes weight loss or weight management, according to the complaint.

Going strong

Besides purchasing Splenda Essentials with B Vitamins to stir into her own coffee and sprinkle on her cereal at home, Bronson, 71, would put it out for patrons of her Corte Madera, Calif., hair salon.

"I was attracted to the idea of keeping my metabolism going strong, and I'd talk with my clients about how it might shed a pound or two," said Bronson. "It's really terrible that Splenda would try to make us believe something that isn't true."

The packaging of Splenda Essentials with Antioxidants' claims that it contains "20% of the Daily Value of antioxidants vitamins C and E, like those found in fruits and vegetables." But despite the pictures of antioxidant-rich fruit on the label, the antioxidants used in the product are from fortification.

In fact, the complaint charges, the type of vitamin E used in Splenda Essentials is a synthetic version, dl-alpha-tocopheryl acetate, and the vitamin C is synthetic ascorbic acid. In clinical studies, supplementation with pure vitamins has generally failed to provide the health benefits of fruits and vegetables.

Intact fiber

Similarly, Splenda Essentials with Fiber's label depicts foods high in intact fiber, such as strawberries, apples with their skin on, and whole grain cereal. And its web site says the "small boost of healthy fiber" is an "easy way to bump up your fiber intake," and points out that most adults are deficient in their fiber intake.

But the lone gram of fiber in a packet of Splenda Essentials is refined corn fiber and the suit argues that there is no scientific consensus that a refined fiber functions like the intact fibers found in whole foods such as whole grains, vegetables, fruits, and legumes.

"It's ridiculous – but apparently profitable – to claim that bulking up Splenda with vitamins or powdered fiber is going to make it a magical health food," said Michael F. Jacobson, executive director of the Center for Science in the Public Interest, the nonprofit nutrition watchdog group that is helping to bring the suit. "It's an artificial sweetener, not pixie dust."

An online survey conducted by ORC International's Online Caravan found that up to 68 percent of 1,014 respondents formed incorrect perceptions of Splenda Essentials' potential benefits after being exposed to packaging or advertisements for each of the products, the suit alleges.

This is not the first time that McNeil Nutritionals, the Johnson & Johnson subsidiary that manufactures Splenda Essentials, has misled consumers about the sweetener. In a 2005 campaign, the company ran ads claiming the product is "Made from sugar, so it tastes like sugar," triggering a lawsuit from Merisant, the manufacturer of the competing sugar substitute Equal, as well as a complaint filed by the Sugar Association, an industry trade group.

In fact, Splenda is created by chemically reacting sucrose with chlorine, forming a unique molecule that is 600 times sweeter than sugar.

GE Appliances, of Louisville, KY, is recalling about 1.3 million GE, GE Adora, GE Eterna, GE Profile and Hotpoint Dishwashers. An electrical failure in the dishwasher's heating element can pose a fire hazard.

GE has received 15 reports of dishwasher heating element failures, including seven reports of fires -- three of which caused extensive property damage. No injuries have been reported.

The recall involves GE, GE Adora, GE Eterna, GE Profile and Hotpoint brand dishwashers. They were sold in black, white, bisque, stainless steel and CleanSteel exterior colors and finishes. The model and serial numbers can be found on a metallic plate located on the left tub wall visible when the door is opened. Model and serial numbers will start with one of the following sequences:

The dishwashers, manufactured in the United States, were sold at appliance dealers, authorized builder distributors and other stores nationwide from March 2006 through August 2009 for between $350 and $850.

Consumers should stop using the recalled dishwashers immediately, disconnect the electric supply by shutting off the fuse or circuit breaker controlling it and inform all users of the dishwasher about the risk of fire. For all dishwashers, contact GE for a free in-home repair or to receive a GE rebate of $75 towards the purchase of a new GE front-control plastic tub dishwasher, or a rebate of $100 towards the purchase of a new GE front-control stainless tub dishwasher or GE Profile top control dishwasher. Consumers should not return the recalled dishwashers to the retailer where they purchased as retailers are not prepared to take the units back.

For additional information, contact GE toll-free at (866) 918-8760 between 8 a.m. and 5 p.m. ET Monday through Friday or visit the firm's Website.

Struggling homeowners fell further behind in the second quarter of the year. The Mortgage Bankers Association (MBA) reports the delinquency rate for loans on one-to-four-unit residential properties increased to 7.58 percent of all loans.

That's up slightly from the first quarter, though down 0.86 percent from the second quarter of 2011. As a means of comparison, the delinquency rate was only 4.7 percent of loans in the first quarter of 2006 -- the height of the housing bubble.

What do the numbers tell us about the housing market and the economy? Jay Brinkmann, MBA’s Chief Economist, says even though the increase in delinquencies was small, it's still troubling.

Positive trend reversed

"Perhaps more important than the small size of the increase, however, is the fact that it reversed the trend of fairly steady drops in delinquencies we have seen over the last year," Brinkmann said. "This is consistent with the slowdown in the economy during the first half of the year and our stubbornly high unemployment rate. Whether this is just a temporary blip or a sign of a true change in direction for mortgage performance will fundamentally depend on the direction of employment over the remainder of the year.”

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the second quarter was 0.96 percent -- unchanged from last quarter and from one year ago.

The percentage of loans in the foreclosure process at the end of the second quarter was 4.27 percent, down slightly from the first quarter and one year ago. The serious delinquency rate, the percentage of loans 90 days or more past due or in the process of foreclosure, was 7.31 percent, also down quarter-over-quarter and year-over-year.

11.62 percent late or in foreclosure

That means that the combined percentage of loans in foreclosure or at least one payment past due was 11.62 percent -- higher than the first quarter but lower than the second quarter of 2011. Taken together, the numbers seem to suggest that while improving as quickly as many economists would like, the situation regarding homeowners' ability to make their payments is better this year than 2011.

Another eye-catching stat in the MBA report was the huge jump in foreclosure starts on FHA loans. The rate set an all-time record for FHA loans, but it was only slightly higher than the previous high set in 2010.

Brinkmann says the jump was due to one or more large servicers of FHA loans restarting foreclosure actions on delinquent FHA loans after the completion of the Department of Justice review and the mortgage servicing settlement. He says it does not represent a significant decline in FHA performance.

These loans had been considered seriously delinquent for some time and have now been moved from the 90-plus day delinquency bucket to the in foreclosure bucket, with little net change.