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    FHA reducing mortgage insurance rates this year

    Government says falling foreclosures make reduction possible

    The cost of things usually go up, not down, but the U.S. government's Federal Housing Administration (FHA) is reducing the yearly premiums for mortgage insurance by 25 basis points for most new mortgages closing on or after January 27.

    When borrowers take out an FHA loan, they can borrow up to 96.5% of the home's purchase price. For any loan in which the borrower puts up less than 20% of the money, the borrower is required to purchase mortgage insurance.

    Since the government is guaranteeing the loan, the mortgage insurance reimburses the government in the event of default. The mortgage insurance premium is added onto the borrower's monthly payment.

    Saving $500 a year

    That money goes into FHA's Mutual Mortgage Insurance Fund (MMIF), which has grown in value by $44 billion since 2012. U.S. Housing and Urban Development Secretary Julián Castro says that increase means type mortgage insurance premium will go down by $500 in 2017, lowering the typical FHA house payment by more than $41 a month.

    Castro says 2016 marked the fourth straight year that the mortgage insurance fund significantly increased in value, largely because there have been far fewer FHA loan defaults since the housing market crash of 2008.

    "The reduction in the premium is a result of our industry's and FHA's shared commitment to quality underwriting, and consumers will benefit as [a] result,” David Stevens, President & CEO of the Mortgage Bankers Association, said in a statement. “Reducing the cost of FHA loans benefits borrowers, but other changes to reduce uncertainty for lenders would be required to truly invigorate the FHA program.”

    Castro said the decision to lower mortgage insurance premiums was made possible by the fact that current borrowers are doing a good job of managing their loans.

    Passing on the savings

    “After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” Castro said. “This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.”

    HUD officials say they carefully weighed the risks of lowering premiums and concluded the fund's value is more than adequate to reimburse the government in the event of default.

    There have been significantly fewer foreclosures in recent years since mortgage lenders raised lending standards. Unlike the lower standards in place during the early 2000s housing bubble, borrowers must document income and employment and have higher credit scores.

    Since the housing meltdown, Castro says FHA raised mortgage insurance premiums several times to increase the size of the MMIF. While it increased the health of the fund, he says it also significantly increased the cost of credit to qualified borrowers.

    Now that the cost of mortgage insurance is coming down, National Association of Realtors (NAR) President William E. Brown says more consumers will be able to qualify for an FHA loan.

    “This is a question of simple math,” Brown said. “Every time we cut the cost of mortgage insurance it means more borrowers meet the debt-to-income ratio required to purchase a home.”

    The cost of things usually go up, not down, but the U.S. government's Federal Housing Administration (FHA) is reducing the yearly premiums for mortgage ins...

    Get trending consumer news and recalls

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      Toyota recalls model year 2017 Toyota 86 vehicles

      It may be possible to remove the ignition key without the transmission being in the "Park" position

      Toyota Motor Company is recalling 94 model year 2017 Toyota 86 vehicles manufactured July 1, 2016 through August 11, 2016 equipped with an automatic transmission and ignition key.

      Vehicles with a push-to-start button or manual transmission are not affected.

      It may be possible to remove the ignition key without the transmission being in the "Park" position. As such, these vehicles fail to conform to the requirements of Federal Motor Vehicle Safety Standard number 114, "Theft Protection and Rollaway Prevention."

      If the key can be removed from the ignition when the transmission is not in the "Park" position, the vehicle could roll away increasing the risk of a crash and occupant or pedestrian injuries.

      What to do

      Toyota will notify owners, and dealers will inspect the ignition key/transmission interlock wiring connections, correcting them as necessary, free of charge. The recall is expected to begin in January 2017.

      Owners may contact Toyota customer service at 1-800-331-4331. Toyota's number for this recall is G0E.

      Toyota Motor Company is recalling 94 model year 2017 Toyota 86 vehicles manufactured July 1, 2016 through August 11, 2016 equipped with an automatic transm...

      Route 11 recalls sour cream & chive flavored potato chips

      The product may be contaminated with Salmonella

      Route 11 Potato Chips is recalling its Sour Cream & Chive Potato Chips in 2-oz. and 6-oz bags, produced with best by dates from February 2 – June 10, 2017.

      The product may be contaminated with Salmonella.

      There have been no reported illnesses associated with this product to date.

      What to do

      Customers who purchased the recalled product should return it to the store where purchased it for a full refund.

      Route 11 Potato Chips is recalling its Sour Cream & Chive Potato Chips in 2-oz. and 6-oz bags, produced with best by dates from February 2 – June 10, 2017....

      Ford recalls F-250 and F-350 Super Duty trucks

      The fuel tank strap may separate from the frame

      Ford Motor Company recalling 7,105 model year 2017 F-250 and F-350 Super Duty trucks manufactured August 10, 2016, to September 17, 2016.

      The frame reinforcement bracket may not have been attached to the front fuel tank strap, allowing the fuel tank strap to separate from the frame.

      A fuel tank strap that separates and allows the fuel tank to contact the ground may cause a fuel leak, increasing the risk of a fire.

      What to do

      Ford will notify owners, and dealers will inspect and, if necessary, install the reinforcement bracket, free of charge. The recall is expected to begin February 6, 2017.

      Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 16S45.

      Ford Motor Company recalling 7,105 model year 2017 F-250 and F-350 Super Duty trucks manufactured August 10, 2016, to September 17, 2016.The frame rein...

      Toshiba expands recall of laptop computer battery packs

      The lithium-ion battery packs can overheat

      Toshiba America Information Systems of Irvine, Calif., is expanding its March 2016 recall of Panasonic battery packs used in Toshiba laptop computers by about 83,000.

      Some 91,000 units were recalled in March 2016. In addition, 10,000 were sold in Canada and 5,000 in Mexico.

      The lithium-ion battery packs can overheat, posing burn and fire hazards to consumers.

      The firm has received five reports of the battery pack overheating and melting, including one additional report since the first recall announcement. No injuries have been reported.

      This expanded recall involves Panasonic lithium-ion battery packs installed in 41 models of Toshiba Satellite laptops, including the Satellite models affected by the March 2016 recall.

      Toshiba has expanded the number of battery packs to include those sold between June 2011 and November 2016. The battery packs also were sold separately and installed by Toshiba as part of a repair. Battery packs included in this recall have part numbers that begin with G71C (G71C*******). Part numbers are printed on the battery pack.

      A complete list of battery pack part numbers included in this recall can be found at http://go.toshiba.com/battery.

      Battery packs previously identified as not affected by the March 2016 recall are included in this expanded announcement.

      The batteries, manufactured in China, were sold at Office Depot, Staples and other electronics stores nationwide, and online at Toshibadirect.com and other websites from June 2011, through November 2016, for between $500 and $1,000 for the laptop and between $70 and $130 for the battery pack.

      What to do

      Consumers should immediately go to the firm’s website and click on the battery pack utility link in the first shadowed box on the page.

      Consumers also can perform a manual check using the laptop and battery pack’s model, part and serial numbers. If it is part of the recall, consumers should power off the laptop, remove the battery and follow the instructions to obtain a free replacement battery pack.

      Until a replacement battery pack is received, consumers should use the laptop by plugging into AC power only.

      Consumers may contact Toshiba toll-free at 866-224-1346 any day between 5 a.m. and 11 p.m. (PT), online at http://go.toshiba.com/battery or at www.us.toshiba.com and click on “Consumer Notices” under the Support heading at the bottom of the page.

      Toshiba America Information Systems of Irvine, Calif., is expanding its March 2016 recall of Panasonic battery packs used in Toshiba laptop computers by ab...

      Feds & NY challenge Prevagen, which claims to improve memory in seniors

      "Clear-cut fraud, from the label on the bottle to the ads," NY attorney general argues

      The Federal Trade Commission and New York Attorney General Eric T. Schneiderman have sued dietary supplement maker Quincy Bioscience, LLC, charging that it deceptively markets the widely-sold supplement Prevagen by falsely claiming that it improves memory, despite lacking reliable scientific evidence.

      “The marketing for Prevagen is a clear-cut fraud, from the label on the bottle to the ads airing across the country,” said Schneiderman. “It’s particularly unacceptable that this company has targeted vulnerable citizens like seniors in its advertising for a product that costs more than a week’s groceries, but provides none of the health benefits that it claims. Quincy Bioscience must be held accountable for deliberately misleading consumers across the country.”

      Quincy Bioscience said it "vehemently disagrees" with the allegations and said the case was "another example of government overreach and regulators extinguishing innovation by imposing arbitrary new rules on small businesses like ours."

      “Prevagen is safe. Neither the FTC nor the New York Attorney General has alleged that Prevagen can cause or has caused harm to anyone. And hundreds of thousands people tell us it works and improves their lives," the company's statement said. 

      Prevagen, which can cost up to $69 per bottle, is sold at major retailers and pharmacies across the country, including CVS, Walgreens, Rite-Aid, the Vitamin Shoppe, and Amazon. Sales of Prevagen in the United States from 2007 through mid-2015, minus refunds, totaled $165 million.

      "Clearer thinking"

      In its advertising and product labeling, Quincy Bioscience claims that Prevagen is “clinically shown” to support “clearer thinking” and to “improve memory within 90 days” – yet, the primary support Quincy Bioscience has for these claims is a single study that failed to show a statistically significant improvement in the treatment group over the placebo group on any of the cognitive measures used, Schneiderman said.

      Quincy Bioscience developed and marketed Prevagen on the theory that its active ingredient, apoaequorin, a dietary protein, enters the human brain to supplement proteins that are lost during the natural aging process. Yet the suit charges that Quincy Bioscience lacks any studies showing that this orally-administered protein can cross the human blood brain barrier, and in fact, Quincy’s own studies show that the protein is rapidly digested in the stomach and broken down into amino acids like any other dietary protein.

      “The marketers of Prevagen preyed on the fears of older consumers experiencing age-related memory loss,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Yet despite the defendants’ claims, there is no scientific proof that use of the product will improve memory or provide any other cognitive benefit.”

      In its statement, which was not attributed to any specific individual, Quincy insisted its product works as claimed.

      “Quincy has amassed a large body of evidence that Prevagen improves memory and supports healthy brain function. This evidence includes preclinical rat studies, canine studies, human clinical studies, and, most importantly, randomized, double-blind, placebo-controlled human clinical testing. This type of testing has long been acknowledged by both the FTC and the FDA to be the ‘gold standard’ for scientific evidence.

      The lawsit was filed in the U.S. District Court for the Southern District of New York and seeks a ban on further false claims about Prevagen, restitution for consumers, disgorgement of ill-gotten gains, and civil penalties for violations of state law. 

      The Federal Trade Commission and New York Attorney General Eric T. Schneiderman have sued dietary supplement maker Quincy Bioscience, LLC, charging that it...

      Heartburn medicine in pregnancy linked to increased risk of asthma in children

      Researchers say the potential link is worth studying in greater depth

      Heartburn is just one of the many symptoms you can you expect when you’re expecting. During pregnancy, acidic digestive acids tend to splash back up as a result of hormonal changes and pressure on the stomach from a growing uterus.

      Nearly half of expectant mothers experience the uncomfortable, chest-focused burning sensation throughout their pregnancy. Heartburn medication may ease the discomfort, but could it have a negative effect on a womb’s occupant?

      New research suggests that children born to mothers who take heartburn medication during pregnancy may have a greater risk of developing asthma. The potential association was uncovered following a review of eight previous studies involving more than 1.3 million children.

      One third more likely

      Experts say the link isn’t conclusive, and moms-to-be should continue using heartburn medicines as recommended by their doctors. Further research will help determine whether the pills affect the health of children or if the association is caused by a separate, linked factor.

      Nevertheless, researchers found that children born to mothers who had been prescribed acid-suppressing drugs during pregnancy were at least one third more likely to have visited a doctor for symptoms of asthma. 

      “We don’t yet know if the heartburn medication itself is contributing to the development of asthma in children, or if there is common factor we haven’t discovered yet that causes both heartburn in pregnant women and asthma in their children,” said Dr. Samantha Walker, Director of Policy and Research at Asthma UK.

      Jean Golding, an emeritus professor of pediatric epidemiology at the University of Bristol, says the heartburn itself, not the drugs used to treat it, may be the most important association. Other experts say obesity in the expectant mother could play a key role. 

      More research needed

      Acid-blocking drugs called H2-receptor antagonists and proton pump inhibitors have been considered safe to use in pregnancy because they do not affect the development of the baby. 

      However, previous studies suggested that these drugs may impact the immune system of an unborn baby, leading to an increased risk of allergies. Subsequent studies to investigate the link were inconclusive, the researchers noted.

      The new study, published in the Journal of Allergy and Clinical Immunology, was led by the Universities of Edinburgh and Tampere in Finland. The investigators stress that the research is still at an early stage.

      “Expectant mums should continue to take any medication they need under the guidance of their doctor or nurse,” Walker said, adding that the study "points us towards something that needs further investigation which is why we need to see more research carried out into the causes of asthma.”

      Heartburn is just one of the many symptoms you can you expect when you’re expecting. During pregnancy, acidic digestive acids tend to splash back up as a r...

      Technology competes with style and performance at Detroit Auto Show

      Automakers offer fresh takes on popular models

      The North American International Auto Show (NAIAS), more commonly called the Detroit Auto Show, is underway with manufacturers vying for attention for their new concept cars.

      Forbes reports crossovers from Audi and Infinity have gotten a lot of the early attention, but that important changes have also been announced for the Toyota Camry, BMW 5-Series and Lexus LS.

      New technology will also be on display, from in-car comfort and convenience to the latest in driver-assist features. In fact, the marriage of cars and technology has become so important that the automotive press showed up at last week's Consumer Electronics Show and the technology press is well-represented this week in Detroit.

      “We expect to see new technology debuted at the show and, importantly, existing technology more widely offered,” said Michelle Krebs, senior analyst at AutoTrader. “That’s what consumers are most interested in – in-car technology.”

      Technology rates higher than brand with consumers

      Krebs said Autotrader's recent Tech Impact Study demonstrated the right technology is more important to consumers than ever. For a growing number of buyers, she said technology is more important than brand.”

      With SUVs and crossovers proving to be popular with consumers, it's no surprise carmakers have brought plenty examples to the show. GM has a number of redesigned SUVs for the 2018 model-year. The 2018 Chevrolet Traverse features more traditional SUV styling while providing the requisite comfortable, high-tech interior.

      “Last year’s introduction of the Chrysler Pacifica breathed new life into the minivan segment,” Krebs said. “Honda ups the ante with the remake of the always-popular Odyssey.”

      Electric cars may have lately fallen out of favor with falling gasoline prices, but automakers are betting that won't last. GM says the new Chevy Bolt offers a breakthrough in EV technology, extending the range without running up the price.

      The new Genesis G90 from Hyundai is also turning heads. It offers traditional luxury features at a significantly lower sticker price. Volvo is also getting some attention with its S90. It is said to combine luxury with enhancements in its infotainment system.

      The North American International Auto Show (NAIAS), more commonly called the Detroit Auto Show, is underway with manufacturers vying for attention for thei...

      iPhone introduced 10 years ago today

      Device arguably changed how humans interact

      “Today, Apple is going to reinvent the phone,” Apple co-founder Steve Jobs said on January 9, 2007.

      In a presentation to the Apple faithful, Jobs proceeded to introduce a new mobile phone that not only turned an industry upside down, but changed how human beings interact with one another.

      In the 10 years since Apple's introduction of the iPhone, smartphones have been used less for talking and more for communicating on social media, buying things online, getting directions and watching TV. In other words, they have become computers in our pockets. Chances are, you're reading this on one.

      It was a vision that Jobs, who died of cancer in 2011, laid out in the presentation below.

      Exclusive to AT&T

      Apple partnered with AT&T in the development of the iPhone and for several years, AT&T was the exclusive carrier for the device.

      In his presentation Jobs mentioned that Apple had patented its revolutionary design, expressing confidence that the smartphone future belonged to Apple. But after Google's Android operating system appeared and was adopted by many electronics manufacturers, a protracted legal battle ensued. In the end, Apple found that it had to share the smartphone space.

      According to Statista, there are approximately 215 million smartphone users in the U.S., with the number estimated to reach 222.9 million this year. The number of users worldwide is projected to reach 2 billion by the end of this year.

      “Today, Apple is going to reinvent the phone,” Apple co-founder Steve Jobs said on January 9, 2007.In a presentation to the Apple faithful, Jobs procee...

      TreeHouse Foods amends “best by” dates in mac & cheese recall

      The products may be contaminated with Salmonella.

      TreeHouse Foods is amending the “best by” dates used in its December 2016, recall of macaroni and cheese cup products.

      The products contain cheddar cheese seasoning that may be contaminated with Salmonella.

      There have been no confirmed illnesses to date.

      The following list contains the products being recalled with their amended “best by” dates:

      DescriptionUPCBest By Date
      Big Win Original Macaroni & Cheese Dinner001 182 258 40310/24/2017
      10/25/2017
      Cheese Club Express Mac Macaroni & Cheese
      Dinner
      004 149 817 16710/20/2017
      10/21/2017
      10/22/2017
      10/23/2017
      10/28/2017
      10/29/2017
      10/31/2017
      11/1/2017
      11/2/2017
      11/3/2017
      11/4/2017
      11/10/2017
      11/11/2017
      11/16/2017
      11/17/2017
      11/18/2017
      11/21/2017
      11/22/2017
      11/23/2017
      11/28/2017
      Great Value Macaroni & Cheese Original Cups007 874 208 24910/18/2017
      10/19/2017
      10/21/2017
      10/22/2017
      10/26/2017
      10/27/2017
      10/28/2017
      11/3/2017
      11/6/2017
      11/7/2017
      11/17/2017
      11/18/2017
      11/19/2017
      11/20/2017
      11/21/2017
      11/22/2017

      What to do

      Customers who purchased the recalled products should dispose of or return them to the place of purchase for a full refund.

      Consumers with questions may call 1-800-756-5781, Monday – Friday, 7:00 a.m.– 6:00 p.m. (CST).

      TreeHouse Foods is amending the “best by” dates used in its December 2016, recall of macaroni and cheese cup products.The products contain cheddar chee...

      5 habits of financially fit consumers: #5, Saving and investing

      Personal finance experts offer tips for starting a savings program

      If you adopt the habits of financially fit consumers – checking your credit report, analyzing your budget, setting goals and managing debt, chances are you're going to find you have money left over at the end of each month.

      That, after all, is the objective. So, what does the financially fit consumer do with that left over money?

      Paul Golden, spokesman for the National Endowment for Financial Education, says it's important to understand the difference between saving and investing. Interest rate changes, inflation and economic turbulence are factors to be considered.

      “Talk to a Certified Financial Planner, who can make investment recommendations based on your specific life and financial situation,” Golden told ConsumerAffairs. “Interview several candidates before selecting a financial advisor and make sure you know how he or she is paid.”

      Golden says some financial planners work for flat fees, while others take a percentage of your portfolio or earn a commission for selling certain products.

      Sometimes it's hard to get started

      That's very much in Michelle Perry Higgins' wheelhouse. Higgins is Principal and Financial Planner of California Financial Advisors, in San Ramon, Calif. She often hears consumers say it's hard to save because they live paycheck-to-paycheck. In that case, she advises to start small.

      “I call it the 1% rule, she said. “Start saving 1% of your income into your employer retirement plan and 1% into your emergency reserve. Then, try to increase each bucket another percent every year.”

      To prevent backsliding, she recommends making savings to these accounts a non-discretionary systematic withdrawal.

      “Beginning is always the hardest part and the 1% savings is typically not missed and easily achievable for families on a tight budget,” Higgens said.

      Pay yourself first

      Diane Moogalian, Vice President, Customer Care, Equifax, agrees with that approach. She suggests consumers pay themselves first.

      “It’s a simple concept, but with today’s life conveniences at our fingertips, it’s one that’s often overlooked,” Moogalian said. “Think about how much some of the little things we like to call 'coffee and conveniences' may add up – a daily cup of coffee that you pay for may add up. Make sure that you pay yourself first and contribute to your savings account.”

      Bruce McClary, Vice-president of Communications for the National Foundation for Credit Counseling, also recommends starting small with a savings program, saying the goal has to be reasonable.

      “Sometimes that means starting very small, like setting aside all the spare change you get in a month,” McClary said. “At the end of the month, count it and calculate a 10% increase for the next month. That becomes your new savings goal in the month ahead.”

      At the same time, he says consumers should be looking for ways to trim their budget here and there.

      “For motivation, create a reward for reaching a milestone after six months or a year,” he said. “Treat yourself with a portion of what you saved, but be sure to leave most of it alone so it can continue to grow over time.”

      Once you become a financially-fit consumer, McClary says you'll be surprised at how much you will be able to put into savings each month. Setting aside 20% or more of income, he says, is not unusual.

      If you adopt the habits of financially fit consumers – checking your credit report, analyzing your budget, setting goals and managing debt, chances are you...