Mr. Sam has been working on applying for unemployment benefits. Sadly, Florida makes it super difficult to apply and obtain benefits. Florida puts up so many road blocks regarding the collection of benefits that they are being investigated by the Department of Labor. Mr. Sam's application process took about three hours, which includes a very long application and a skills test. Luckily Mr. Sam has access to internet, the only way one can apply, he speaks English and he is educated. Even so, he remarked at how difficult the process was, which is probably why only 17% of Floridians who are eligible actually received these benefits.
Florida also provides a maximum weekly benefit of $275, which is the fifth-lowest amount in the country. Mr. Sam should qualify for the maximum benefit which means $1,100 per month for three months (benefits cut off after 12 weeks).
Showing posts with label Legal Eagle. Show all posts
Showing posts with label Legal Eagle. Show all posts
Tuesday, July 30, 2013
Wednesday, June 19, 2013
When is a Sale Not a Sale?
Earlier, I wrote about the psychological impact of shopping without actually buying the product you are shopping for.
Now comes news on something I've suspected for many years, at some stores sale prices are not really sale prices. Rather, as Today News reports certain stores, including J.C. Penny, Kohl's and Macy's have been caught advertising and pricing items on sale when they are actually selling the product for the manufacturer's suggested price.
There are almost an unlimited number of techniques companies use to get us, the public, to part with our money either by increasing purchases and/or by increasing the purchase price. A "sale" when its not really a sale is just another technique but one that the savvy customer should be aware of by comparison shopping and doing their own research.
Now comes news on something I've suspected for many years, at some stores sale prices are not really sale prices. Rather, as Today News reports certain stores, including J.C. Penny, Kohl's and Macy's have been caught advertising and pricing items on sale when they are actually selling the product for the manufacturer's suggested price.
There are almost an unlimited number of techniques companies use to get us, the public, to part with our money either by increasing purchases and/or by increasing the purchase price. A "sale" when its not really a sale is just another technique but one that the savvy customer should be aware of by comparison shopping and doing their own research.
Thursday, June 13, 2013
Diamonds and Dollars - Update
Back in August of 2012, I wrote about a claim we had submitted in the DeBeers diamond price fixing case. Well, yesterday Mr. Sam received a $270 settlement check.
I have no idea if this is a fair or reasonable settlement for the damages suffered by the consumer class (I understand, from my research that the wholesaler class is getting much larger checks) since I never studied the claims or undertook any analysis as to Mr. Sam's damages. I understand from the diamonds class action web site that "payments were calculated based on several factors, including how much you paid, the quantity and quality of the diamonds you purchased, the amount of money that is available for your Class or Sub-class, and how many Class Members filed claims."
Anyways, assuming we never would have thought to bring a claim related to the diamond in my engagement ring, we are happy to recover $270 and we are putting it into our vacation fund.
This is the second time I've recovered more than $200 in one of these class settlement scenarios, so I'll continue to fill out the paperwork.
I have no idea if this is a fair or reasonable settlement for the damages suffered by the consumer class (I understand, from my research that the wholesaler class is getting much larger checks) since I never studied the claims or undertook any analysis as to Mr. Sam's damages. I understand from the diamonds class action web site that "payments were calculated based on several factors, including how much you paid, the quantity and quality of the diamonds you purchased, the amount of money that is available for your Class or Sub-class, and how many Class Members filed claims."
Anyways, assuming we never would have thought to bring a claim related to the diamond in my engagement ring, we are happy to recover $270 and we are putting it into our vacation fund.
This is the second time I've recovered more than $200 in one of these class settlement scenarios, so I'll continue to fill out the paperwork.
Friday, March 15, 2013
The Doctor Will See You
I'm not surprised at all about that this NBC News.com article identifies south Florida as a hot spot for identity theft by and at health care providers. Time after time staff at Florida hospitals and doctor's offices are in the news for stealing patient's Social Security numbers for identity theft purposes.
Think about it, every time you see a new doctor and fill out an intake form there is a spot for your Social Security number and most people think you have to provide it. "Quick said: 'you do not have to provide your Social Security number, but you do have to provide enough information for you to be distinguishable from other people.'"
I stopped providing my SS number to doctor's offices long ago and from time to time I get some push back on it. A couple of years ago I was trying to make an appointment with a new health care provider, a dermatologist, and the intake person would not give me an appointment unless I gave her my Social Security number. I declined and sought out care from another provider. That has been the only time I had a real problem with declining to provide the number to a health care provider.
If you are utilizing a government health care insurance system, i.e. Medicare, Medicaid the VA, you, unfortunately, have to provide your Social Security number because that is the way those programs identify you. But most private insurance companies no longer utilize Social Security numbers as an identifier and there really is no reason for a doctor to need this information from you except to increase there ability to collect a debt.
This handy list from the IRS provides the situations where there is a legal requirement to fork over your numbers.
Think about it, every time you see a new doctor and fill out an intake form there is a spot for your Social Security number and most people think you have to provide it. "Quick said: 'you do not have to provide your Social Security number, but you do have to provide enough information for you to be distinguishable from other people.'"
I stopped providing my SS number to doctor's offices long ago and from time to time I get some push back on it. A couple of years ago I was trying to make an appointment with a new health care provider, a dermatologist, and the intake person would not give me an appointment unless I gave her my Social Security number. I declined and sought out care from another provider. That has been the only time I had a real problem with declining to provide the number to a health care provider.
If you are utilizing a government health care insurance system, i.e. Medicare, Medicaid the VA, you, unfortunately, have to provide your Social Security number because that is the way those programs identify you. But most private insurance companies no longer utilize Social Security numbers as an identifier and there really is no reason for a doctor to need this information from you except to increase there ability to collect a debt.
This handy list from the IRS provides the situations where there is a legal requirement to fork over your numbers.
Wednesday, March 13, 2013
Free Report or Free Snoop
You may have heard that public officials, like Hillary Clinton and Vice President Biden, as well as celebs, like Beyonce and Jay-Z, were the victims of hacking and that their personal finance information was disclosed.
Well now, it sounds like, according to this report, that some of that information came from AnnualCreditReport.com. AnnualCreditReport.com is the site which the three credit reporting agencies set up so consumers can gain free access to their credit reports. Scary stuff to hear that, possible, hackers were able to defeat the security features of the site (which I've had trouble answer for myself). But, I guess, now that I think about it, if your bio details are out in the public domain someone with time and energy could probably answer the questions posed by this site.
The last time I checked my credit report was right before our refinance. This news story reminds me that it is probably time to check again.
Well now, it sounds like, according to this report, that some of that information came from AnnualCreditReport.com. AnnualCreditReport.com is the site which the three credit reporting agencies set up so consumers can gain free access to their credit reports. Scary stuff to hear that, possible, hackers were able to defeat the security features of the site (which I've had trouble answer for myself). But, I guess, now that I think about it, if your bio details are out in the public domain someone with time and energy could probably answer the questions posed by this site.
The last time I checked my credit report was right before our refinance. This news story reminds me that it is probably time to check again.
Thursday, February 14, 2013
Happy St. Valentine's Day - Part II
Are you planning to get engaged or married over St. Valentine's Day?
If so, there is a tool that let's you know whether you'll end up with a marriage tax bonus or a marriage tax penalty. But, first you'll need to get your hands on your intended's tax return as the tool needs some serious data to give you an accurate result.
A marriage tax penalty is when:
A marriage bonus occurs when:
Marriage penalties only hit couples where both spouses work. And, under the 2013 Fiscal Cliff work compromise, it appears that the marriage tax penalty has gotten worse for those at the upper end of the income range. I'm still trying to sort out all the tax changes from the Fiscal Cliff compromise, but this article from Bloomberg provides some guidance on the various thresholds for when higher taxes and higher tax rates kick in.
I try not to get into politics here at Adventures of Sam, so I don't want to get into a Republican/Democratic Party debate on taxes. But I'll state for the record that I'm actually in favor of higher taxes and I'm in favor of a progressive tax system.
But, I'm not in favor of a system that provides for a marriage tax penalty on $150,000 in income. Higher tax rates kick in at $400,000 for an individual and $450,000 for a married couple. Sure, if a couple is making more than $450,000 a year its hard to have any sympathy for them. But, think about a hard working professional couple in which both spouses are putting in 12+ hour days, they may have significant student loans that paid for those professional degrees, a mortgage, expenses related to kids and our government is penalizing (with higher taxes) either the wife (more often its the wife) or the husband for having a professional career. I'd like to see the marriage penalty reduced even at the higher income levels, if higher tax rates kick in at $400,000 for an individual than maybe the higher tax rates for couples should kick in at $600,000 or something like that.
If so, there is a tool that let's you know whether you'll end up with a marriage tax bonus or a marriage tax penalty. But, first you'll need to get your hands on your intended's tax return as the tool needs some serious data to give you an accurate result.
A marriage tax penalty is when:
- a wife and husband pay more income tax filing jointly as a couple than they would if they had remained single and filed as individuals.
A marriage bonus occurs when:
- a couple pays less tax filing jointly than they would if they were not married and filed singly.
Marriage penalties only hit couples where both spouses work. And, under the 2013 Fiscal Cliff work compromise, it appears that the marriage tax penalty has gotten worse for those at the upper end of the income range. I'm still trying to sort out all the tax changes from the Fiscal Cliff compromise, but this article from Bloomberg provides some guidance on the various thresholds for when higher taxes and higher tax rates kick in.
I try not to get into politics here at Adventures of Sam, so I don't want to get into a Republican/Democratic Party debate on taxes. But I'll state for the record that I'm actually in favor of higher taxes and I'm in favor of a progressive tax system.
But, I'm not in favor of a system that provides for a marriage tax penalty on $150,000 in income. Higher tax rates kick in at $400,000 for an individual and $450,000 for a married couple. Sure, if a couple is making more than $450,000 a year its hard to have any sympathy for them. But, think about a hard working professional couple in which both spouses are putting in 12+ hour days, they may have significant student loans that paid for those professional degrees, a mortgage, expenses related to kids and our government is penalizing (with higher taxes) either the wife (more often its the wife) or the husband for having a professional career. I'd like to see the marriage penalty reduced even at the higher income levels, if higher tax rates kick in at $400,000 for an individual than maybe the higher tax rates for couples should kick in at $600,000 or something like that.
Tuesday, February 5, 2013
Debit Card Diversion
We use our debit cards for 95% of our day to day transactions (the other 5% is cash). As a result, I review our accounts online at least two or three times a week.
In the middle of last week I noticed a "funny" transaction that was in my pending transactions. What was funny about it? First, it was a debit card transaction and I do all of my transactions as check card (meaning I don't enter my PIN code). Second, it was an online transaction for an entity that I did not recognize. So that would mean that my PIN code would have been used for an on-line transaction, something that I never do. I checked with Mr. Sam, as he sometimes uses my debit card, and he didn't recognize the company name either. But, since the details on my pending transactions become clearer when they are no longer pending I figured I would give it a day or two.
So on Friday, at happy hour, I went to pay the check with my debit card and it was declined. Yikes! First, having my card declined embarrasses me no matter what. So I called Wells Fargo and it was tough getting past the questions they use to verify that I'm me. Besides giving them the charge/debit card number, my on-line id, the answers to my security questions, they also had to verify recent transactions not just on my personal account (the one tied to my debit/charge card) but on my other accounts.
Once I had verified that it was me, the representative from Wells Fargo indicated that my card had been flagged for fraud based on recent transactions. She read through the transactions, totaling almost a $1000 and I confirmed that those transactions were not mine (the charges took place at stores that I don't shop at and further took place in another state that I have not visited recently). So my card was canceled and my friend paid the happy hour bill.
When I got home I went through my online history and called Wells Fargo back, as instructed, and challenged the other transaction that I had eyed earlier in the week and another pending transaction that had occurred in Ohio (I live in Florida). The transactions that the Wells Fargo representative had covered with me on the phone had all been trapped by the fraud algorithm so that money was never debited from my account. The second Wells Fargo representative that I spoke to flagged the pending transaction and indicated that they would give me a conditional credit on the first transaction that had gone through and debited my account.
The next day, on Saturday, I visited my local Wells Fargo branch and they gave me a temporary debit/charge card while I await my new card. The pending Ohio transaction never debited my account and has disappeared as of this week from my online statement.
In the many, many years that I have had a debit/charge card with Wells Fargo (f/k/a Wachovia and First Union) this is the first time I've had a fraud problem. I was impressed that Wells Fargo's fraud alert system caught the vast majority of the fraudulent charges before they made it to my account and the money was debited. I was also happy that Wells Fargo promptly provided a conditional credit of the one debit card transaction and that money was in my account the next day. I am also happy that I have a temporary debit/charge card to use while I wait on my new card.
In the middle of last week I noticed a "funny" transaction that was in my pending transactions. What was funny about it? First, it was a debit card transaction and I do all of my transactions as check card (meaning I don't enter my PIN code). Second, it was an online transaction for an entity that I did not recognize. So that would mean that my PIN code would have been used for an on-line transaction, something that I never do. I checked with Mr. Sam, as he sometimes uses my debit card, and he didn't recognize the company name either. But, since the details on my pending transactions become clearer when they are no longer pending I figured I would give it a day or two.
So on Friday, at happy hour, I went to pay the check with my debit card and it was declined. Yikes! First, having my card declined embarrasses me no matter what. So I called Wells Fargo and it was tough getting past the questions they use to verify that I'm me. Besides giving them the charge/debit card number, my on-line id, the answers to my security questions, they also had to verify recent transactions not just on my personal account (the one tied to my debit/charge card) but on my other accounts.
Once I had verified that it was me, the representative from Wells Fargo indicated that my card had been flagged for fraud based on recent transactions. She read through the transactions, totaling almost a $1000 and I confirmed that those transactions were not mine (the charges took place at stores that I don't shop at and further took place in another state that I have not visited recently). So my card was canceled and my friend paid the happy hour bill.
When I got home I went through my online history and called Wells Fargo back, as instructed, and challenged the other transaction that I had eyed earlier in the week and another pending transaction that had occurred in Ohio (I live in Florida). The transactions that the Wells Fargo representative had covered with me on the phone had all been trapped by the fraud algorithm so that money was never debited from my account. The second Wells Fargo representative that I spoke to flagged the pending transaction and indicated that they would give me a conditional credit on the first transaction that had gone through and debited my account.
The next day, on Saturday, I visited my local Wells Fargo branch and they gave me a temporary debit/charge card while I await my new card. The pending Ohio transaction never debited my account and has disappeared as of this week from my online statement.
In the many, many years that I have had a debit/charge card with Wells Fargo (f/k/a Wachovia and First Union) this is the first time I've had a fraud problem. I was impressed that Wells Fargo's fraud alert system caught the vast majority of the fraudulent charges before they made it to my account and the money was debited. I was also happy that Wells Fargo promptly provided a conditional credit of the one debit card transaction and that money was in my account the next day. I am also happy that I have a temporary debit/charge card to use while I wait on my new card.
Wednesday, January 23, 2013
Insurance Homework - Follow Up
Six months or so ago I posted about how we were in the process of obtaining life insurance. And in September, I posted information about an umbrella insurance policy we were investigating.
I pleased to report we can cross these tasks off our "to do" list.
Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market. I have a $500,000 life insurance policy through work which is very reasonably priced. When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates. So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.
As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens. Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.
We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy. Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low. Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.
So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year. As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.
I pleased to report we can cross these tasks off our "to do" list.
Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market. I have a $500,000 life insurance policy through work which is very reasonably priced. When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates. So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.
As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens. Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.
We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy. Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low. Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.
So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year. As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.
Tuesday, January 8, 2013
401k Spillover
In December 2012, after Mr. Sam had maxed out his 401k, I noticed that he was still contributing to his 401k in something called an "after-tax option."
We both thought the "after-tax option" was his Roth 401k option. I was certain that he couldn't go beyond the contribution limit of $17,000 between his regular 401k and his Roth 401k. And, I was correct, the 2012 contribution limit of $17,000 applies both to the 401k and the Roth 401k or a combination of contributions to both. So, I promptly freaked out as I was concerned that he had gone above and beyond the 2012 contribution limits and we were going to be back on the naughty list for the IRS (we previously were audited).
So three calls to Fidelity later and we learned that Mr. Sam's company offers an after-tax spillover contribution option in its 401k. What that means, is that Mr. Sam can max out his 401k with pre-tax dollars up to the contribution limit of $17,000 ($17,500 in 2013) and then he can continue contributing to his 401k with after tax dollars up to a maximum of $50,000.
This is one of those retirement options that most people have never heard about. So, why would we want to put more after-tax money into Mr. Sam's 401k? For us, the big advantage is the company match. Mr. Sam gets a great match and that match continues with the after-tax spillover contribution. So for each extra dollar he puts in he gets an immediate 20% return. While, his match is in company stock, since he is vested he can sell that stock at any point.
Now that we know about this option, we need to figure out how we better take advantage of this investment option in 2013.
Have you heard about the after-tax spillover? Do you have that option in your plan? If yes, do you use it?
We both thought the "after-tax option" was his Roth 401k option. I was certain that he couldn't go beyond the contribution limit of $17,000 between his regular 401k and his Roth 401k. And, I was correct, the 2012 contribution limit of $17,000 applies both to the 401k and the Roth 401k or a combination of contributions to both. So, I promptly freaked out as I was concerned that he had gone above and beyond the 2012 contribution limits and we were going to be back on the naughty list for the IRS (we previously were audited).
So three calls to Fidelity later and we learned that Mr. Sam's company offers an after-tax spillover contribution option in its 401k. What that means, is that Mr. Sam can max out his 401k with pre-tax dollars up to the contribution limit of $17,000 ($17,500 in 2013) and then he can continue contributing to his 401k with after tax dollars up to a maximum of $50,000.
This is one of those retirement options that most people have never heard about. So, why would we want to put more after-tax money into Mr. Sam's 401k? For us, the big advantage is the company match. Mr. Sam gets a great match and that match continues with the after-tax spillover contribution. So for each extra dollar he puts in he gets an immediate 20% return. While, his match is in company stock, since he is vested he can sell that stock at any point.
Now that we know about this option, we need to figure out how we better take advantage of this investment option in 2013.
Have you heard about the after-tax spillover? Do you have that option in your plan? If yes, do you use it?
Thursday, November 15, 2012
IRS and Paranoia
Ever since we were audited in 2010, each of the last two years we have received additional correspondence from the IRS after our taxes were completed and our payment submitted.
So, this year, when we received correspondence saying we owe additional taxes I am officially paranoid. I've done some research and I can't find anything to support my position that once you've been audited your future tax returns receive additional scrutiny. But, thanks to Jim R. as he found a CNNMoney.com article indicating that if you have been audited in the past you're on the audit hit list for at least a few years.
We are, of course, not claiming the deduction that got us in trouble before, and not (in my opinion) being aggressive in our tax avoidance efforts. We are, also, paying a CPA to prepare our taxes. We are paying our taxes on time although we have sought an extension the last few years.
In researching the form we received this year, a CP14, I understand that it is a form indicating an underpayment of taxes not based on a math error. Often times, individuals receive a CP14 if their tax payment was not received at all. I know for certain that the IRS received our tax payment because (1) I have a copy of the cancelled check and (2) the amount that is show due on the CP14 is less than a hundred dollars and we paid a ton more in taxes than that.
More than likely, I'll just pay the amount the IRS is claiming that is due because I am terrified of the IRS and do not want to end up being audited again. But, since I understand (based on my own research) that these CP14 notices are computer generated and are often wrong I've asked my CPA to review and advise. I also understand from my research that a GAO study found that 47% of this type of correspondence to taxpayers was incorrect and the IRS just collects and keeps the money.
So, this year, when we received correspondence saying we owe additional taxes I am officially paranoid. I've done some research and I can't find anything to support my position that once you've been audited your future tax returns receive additional scrutiny. But, thanks to Jim R. as he found a CNNMoney.com article indicating that if you have been audited in the past you're on the audit hit list for at least a few years.
We are, of course, not claiming the deduction that got us in trouble before, and not (in my opinion) being aggressive in our tax avoidance efforts. We are, also, paying a CPA to prepare our taxes. We are paying our taxes on time although we have sought an extension the last few years.
In researching the form we received this year, a CP14, I understand that it is a form indicating an underpayment of taxes not based on a math error. Often times, individuals receive a CP14 if their tax payment was not received at all. I know for certain that the IRS received our tax payment because (1) I have a copy of the cancelled check and (2) the amount that is show due on the CP14 is less than a hundred dollars and we paid a ton more in taxes than that.
More than likely, I'll just pay the amount the IRS is claiming that is due because I am terrified of the IRS and do not want to end up being audited again. But, since I understand (based on my own research) that these CP14 notices are computer generated and are often wrong I've asked my CPA to review and advise. I also understand from my research that a GAO study found that 47% of this type of correspondence to taxpayers was incorrect and the IRS just collects and keeps the money.
Friday, October 12, 2012
Refinance Update - Part 11
We knew at closing that our mortgage would immediately be sold from the broker to another lender. Yesterday we received notification that it will be CitiMortgage. While I own stock in Citi and we have one of our rental mortgages with Citi, I can't say they are my favorite company when it comes to levels of customer service.
But, I keep telling myself 2.75% and 15 year term, and we are saving $180,000. I look forward to getting an electronic account set up and getting back to paying our extra $415 in principal each month (one of our 2012 savings goals).
But, I keep telling myself 2.75% and 15 year term, and we are saving $180,000. I look forward to getting an electronic account set up and getting back to paying our extra $415 in principal each month (one of our 2012 savings goals).
Tuesday, September 18, 2012
Rental Update
Rental #2 has turned over. Our last tenant broker her lease and has moved out of town. We already had her last month rent (September) and her lease break fee. She never really moved all the way in and wasn't there much so the rental turn over consisted of changing the locks and cleaning.
This is our best rental property and as such we have already rented the place for October and collected the first month rent. I wanted to increase the rent by $30 a month, and we did initially advertise it at that level but then we reduced it as Mr. Sam would rather not lose a month of rent than collect a few hundred over the course of a year. Before our new tenant moves in we are having the property tented for termites.
Rental #3 is also vacant. The tenants that were in rental # 3 were there for quite some time. I have no idea as to the status of the property although I'm sure Mr. Sam has checked on it. I assume there will be some turn over costs and we are unlikely to have the property ready for advertising for October. Which means we likely will be losing a month's rent.
This is our worst rental property for a variety of reasons but because it is a three bedroom we do get quite a few family candidates who are interested in it because it is cheap.
Thursday, September 13, 2012
Refinance - Part 10
Well it took four hours, 25 e-mails, and three conference calls, but we signed our refinance paperwork yesterday.
As I previously posted, I have not been particularly impressed with the level of service we have received from either the mortgage broker or the closing agent. But, as I noted previously we are very happy with the rate and term and the bigger banks (the ones with better service) were not able to match these terms.
First, lets start with the positives. We got a 2.75% fixed interest rate, which is a rate reduction for us of 2.05%. We also went from a 25 year term, on which we had 22 years to go, to a 15 year term, which means we are cutting seven years off our loan term. Overall, the new loan will save us approximately $180,000. Our actual mortgage payment is only going up a $100 a month.
Additionally, our closing costs were approximately $3,100, which is about $1,700 less than we paid in closing costs when we refinanced in 2009.
And, while I thought there was a prepayment restriction the first two years of the loan term, I was incorrect. Rather, there is no restriction on prepayment so we can continue to work the goal of getting our primary home paid off.
Now the negatives . . .
If you follow my adventures regularly, you know that I am not a fan of bank escrows for tax and insurance. But to get the best rate, we were required to escrow our property taxes. I plan to, once the loan is assigned (the mortgage broker will be immediately reassigning our loan), contact the lender and see if we can reach an agreement to waive escrow after a certain period of time. I have done this before and have had success. We also have to prepay our property taxes, as part of our closing costs, since our property taxes are due to be paid in November. However, I don't count that as closing costs since we would be paying that money in November regardless of whether we refinanced our property. And, since we do our own escrowing, we already had that money set aside.
I thought the level of customer service during the closing process was dismal. I had asked to receive our closing documents a day in advance of the closing and I was told that I could not have them until closing. We have bought, sold, refinanced a number of properties in the last 10 years and I have never had a problem with requesting documents a day in advance. The mortgage broker actually suggested, and I would say pressured, us to sign the documents without reading them because there is a three day rescission period. I'm not sure how the rescission period would help me if I found an error after the fact, since the rescission period applies to the whole loan and we would likely lose our great rate and term. We actually went several rounds, before I put my foot down and demanded sufficient time to review the documents in advance of signing them.
So, the closing documents were delivered to my office and then closing was scheduled for three hours later. Do you want to guess what I found in the documents? Errors, errors and more errors. My husband's name was incorrect throughout the documents. My husband and I, like many professionals, do not share the same last name and his name on many of the closing documents utilized my last name. While he is used to being called Mr. Sam, obviously on legal documents you need to sign your legal name. For a while yesterday, it was unknown if we would be able to close, but it was determined that the important documents were correct (i.e. the note, the mortgage, etc.) and on the other documents he could correct and initial.
Regarding the HUD-1 settlement statement form, borrowers are entitled to receive the document one day in advance of closing. Despite repeated requests, we did not receive same until the day of closing and only shortly before we were supposed to close. After closely reviewing same, I located an issue such that the HUD-1 had to be corrected and reissued. The problem I uncovered related to how much daily interest was calculated to pay off Wells Fargo versus the amount of daily interest the new lender planned to collect until our first mortgage payment is due. There was more than a week where there was overlap, such that double interest was calculated to be collected. I fully expect that we would have gotten a refund either from Wells Fargo or the new lender, but I'd rather the figures just be correct. Since we did not receive the HUD-1 a day prior to the closing, we could not make arrangements for payment of the closing costs at the actual closing. So now, we will be wiring the closing costs funds tomorrow.
Again, these are all issues that could have been address and corrected prior to closing, if I had received the documents as requested and, for the HUD-1, as required by law. The mortgage broker kept blaming the closing agent and the closing agent blamed the broker. I would say that they were both at fault and I certainly would be cautious in recommending either company to others. I might recommend the broker because he was able to give us such a great rate and term and I thought the closing costs were reasonable, but I would absolutely warn others about the closing issues we encountered
As I previously posted, I have not been particularly impressed with the level of service we have received from either the mortgage broker or the closing agent. But, as I noted previously we are very happy with the rate and term and the bigger banks (the ones with better service) were not able to match these terms.
First, lets start with the positives. We got a 2.75% fixed interest rate, which is a rate reduction for us of 2.05%. We also went from a 25 year term, on which we had 22 years to go, to a 15 year term, which means we are cutting seven years off our loan term. Overall, the new loan will save us approximately $180,000. Our actual mortgage payment is only going up a $100 a month.
Additionally, our closing costs were approximately $3,100, which is about $1,700 less than we paid in closing costs when we refinanced in 2009.
And, while I thought there was a prepayment restriction the first two years of the loan term, I was incorrect. Rather, there is no restriction on prepayment so we can continue to work the goal of getting our primary home paid off.
Now the negatives . . .
If you follow my adventures regularly, you know that I am not a fan of bank escrows for tax and insurance. But to get the best rate, we were required to escrow our property taxes. I plan to, once the loan is assigned (the mortgage broker will be immediately reassigning our loan), contact the lender and see if we can reach an agreement to waive escrow after a certain period of time. I have done this before and have had success. We also have to prepay our property taxes, as part of our closing costs, since our property taxes are due to be paid in November. However, I don't count that as closing costs since we would be paying that money in November regardless of whether we refinanced our property. And, since we do our own escrowing, we already had that money set aside.
I thought the level of customer service during the closing process was dismal. I had asked to receive our closing documents a day in advance of the closing and I was told that I could not have them until closing. We have bought, sold, refinanced a number of properties in the last 10 years and I have never had a problem with requesting documents a day in advance. The mortgage broker actually suggested, and I would say pressured, us to sign the documents without reading them because there is a three day rescission period. I'm not sure how the rescission period would help me if I found an error after the fact, since the rescission period applies to the whole loan and we would likely lose our great rate and term. We actually went several rounds, before I put my foot down and demanded sufficient time to review the documents in advance of signing them.
So, the closing documents were delivered to my office and then closing was scheduled for three hours later. Do you want to guess what I found in the documents? Errors, errors and more errors. My husband's name was incorrect throughout the documents. My husband and I, like many professionals, do not share the same last name and his name on many of the closing documents utilized my last name. While he is used to being called Mr. Sam, obviously on legal documents you need to sign your legal name. For a while yesterday, it was unknown if we would be able to close, but it was determined that the important documents were correct (i.e. the note, the mortgage, etc.) and on the other documents he could correct and initial.
Regarding the HUD-1 settlement statement form, borrowers are entitled to receive the document one day in advance of closing. Despite repeated requests, we did not receive same until the day of closing and only shortly before we were supposed to close. After closely reviewing same, I located an issue such that the HUD-1 had to be corrected and reissued. The problem I uncovered related to how much daily interest was calculated to pay off Wells Fargo versus the amount of daily interest the new lender planned to collect until our first mortgage payment is due. There was more than a week where there was overlap, such that double interest was calculated to be collected. I fully expect that we would have gotten a refund either from Wells Fargo or the new lender, but I'd rather the figures just be correct. Since we did not receive the HUD-1 a day prior to the closing, we could not make arrangements for payment of the closing costs at the actual closing. So now, we will be wiring the closing costs funds tomorrow.
Again, these are all issues that could have been address and corrected prior to closing, if I had received the documents as requested and, for the HUD-1, as required by law. The mortgage broker kept blaming the closing agent and the closing agent blamed the broker. I would say that they were both at fault and I certainly would be cautious in recommending either company to others. I might recommend the broker because he was able to give us such a great rate and term and I thought the closing costs were reasonable, but I would absolutely warn others about the closing issues we encountered
Wednesday, September 12, 2012
Refinance - Part 9
We are scheduled to close on our refinance today. I can't say that I have been particularly pleased with the level of service we have received from either the mortgage broker or the title company. But, I keep reminding myself that we are getting a great rate and term. I further remind myself that Wells Fargo, which gave us great service when we originally got the loan (it was Wachovia then) and when we refinanced in 2009 could not match the rate we are getting.
I know/suspect/expect that as soon as we close, the loan will likely be reassigned to one of the bigger banks. And I hope that we will get better service from the servicing institution.
Wish us luck.
I know/suspect/expect that as soon as we close, the loan will likely be reassigned to one of the bigger banks. And I hope that we will get better service from the servicing institution.
Wish us luck.
Friday, September 7, 2012
More on Insurance Home Work
As I previously posted, Mr. Sam and I are working on obtaining term life insurance, we met with our insurance agent last night and completed the life insurance application for each of us. We have settled on $1 million in life insurance for each of us for a term of 20 years.
We also are exploring umbrella insurance. An umbrella insurance policy provides broad and additional insurance above and beyond home owner and car insurance. Because we have three rental properties and an additional property (just land) and because our net worth has now hit the $1 million mark (and has held there for a few months) an umbrella insurance policy makes sense for us. We don't have control over four properties that we own from day to day, the three rental properties obviously involve people who may or may not hurt themselves or invite people onto our properties that might hurt themselves.
Step one of obtaining an umbrella policy is to increase our car insurance coverage. Luckily, increasing our coverage and combining our previously separate policies, as a married couple, will decrease our overall car insurance costs. The umbrella policy we are looking at requires underlying $250,000 bodily injury per person and $500,000 per accident coverage which is normal for umbrella coverage, so we are increasing our coverage.
Step two of obtaining an umbrella policy is to increase our liability coverage on each real property (and/or determine that we have sufficient liability coverage). The umbrella policy we are looking at requires underlying $300,000 liability coverage for each home and property we own. At present, we have determined that one of our homes has sufficient coverage, the other three homes covered by Florida's Citizens Property (the state run insurance organization) most likely do not because Citizens has reduced liability coverage across the board. But, we need to check. To the extent our Citizens' insurance policies do not provide sufficient coverage we will need to purchase gap insurance to provide the additional $200,000 in liability coverage which will run $200 per year per property (so probably $600). We also have property up north which is undeveloped, and, as such, it never crossed my mind that we should have an insurance policy on it. But, of course there is a chance that someone could enter our property, get hurt and sue which is why a liability policy is required on that property before we can get an umbrella policy. So I've called an insurance agent up north to see how much a liability policy will cost, hoping its cheap as the risk seems quite low.
We also are exploring umbrella insurance. An umbrella insurance policy provides broad and additional insurance above and beyond home owner and car insurance. Because we have three rental properties and an additional property (just land) and because our net worth has now hit the $1 million mark (and has held there for a few months) an umbrella insurance policy makes sense for us. We don't have control over four properties that we own from day to day, the three rental properties obviously involve people who may or may not hurt themselves or invite people onto our properties that might hurt themselves.
Step one of obtaining an umbrella policy is to increase our car insurance coverage. Luckily, increasing our coverage and combining our previously separate policies, as a married couple, will decrease our overall car insurance costs. The umbrella policy we are looking at requires underlying $250,000 bodily injury per person and $500,000 per accident coverage which is normal for umbrella coverage, so we are increasing our coverage.
Step two of obtaining an umbrella policy is to increase our liability coverage on each real property (and/or determine that we have sufficient liability coverage). The umbrella policy we are looking at requires underlying $300,000 liability coverage for each home and property we own. At present, we have determined that one of our homes has sufficient coverage, the other three homes covered by Florida's Citizens Property (the state run insurance organization) most likely do not because Citizens has reduced liability coverage across the board. But, we need to check. To the extent our Citizens' insurance policies do not provide sufficient coverage we will need to purchase gap insurance to provide the additional $200,000 in liability coverage which will run $200 per year per property (so probably $600). We also have property up north which is undeveloped, and, as such, it never crossed my mind that we should have an insurance policy on it. But, of course there is a chance that someone could enter our property, get hurt and sue which is why a liability policy is required on that property before we can get an umbrella policy. So I've called an insurance agent up north to see how much a liability policy will cost, hoping its cheap as the risk seems quite low.
Friday, August 31, 2012
Tax Time
It is that time of the year and we have just received the notice of proposed property taxes for our various properties in Florida.
Florida's homestead law complicates the real estate tax situation. Florida's homestead law provides protection against forced sale of one's primary home. One of the reasons O.J. Simpson lives (or lived, he is in jail at present) in Florida is because of the generous protections from creditors provided for one's primary dwelling no matter how big or expensive.
For our purposes the homestead law provides a tax exemption from our real property taxes. A family with a homestead property receives a $50,000 tax exemption for all real property taxes except for school taxes (for which $25,000 of that exemption applies). So a family with a home valued at $200,000 would only pay taxes on $150,000 of the value and $175,000 for the school district taxes.
Even more important though is the protection provided against the rate at which taxes can increase from year to year. For a Florida homestead property, the rate at which taxes can increase is 3% or the rate of inflation which ever is less. For 2012 that increase is 3%. So, that means, when we receive our proposed taxes for our primary home there are two numbers for our home, the assessed value (which is the market value for our home and land less the $50,000 homestead tax exemption) and the taxable value. The taxable value can only rise by a maximum of 3% year over year and that is the number we pay taxes on. For our Florida investment properties the assessed value and the taxable value are the same and there are no exemptions.
While the Florida real estate bubble deflation has been hard on our net worth, the upside (gotta look on the bright side) has been that the assessed value went down on all of our Florida properties, which means that our real estate taxes and overall carrying costs have gone down. Now that property values are starting to edge up we have the 3% tax rate cap protection for our primary home so it will be quite few a years untill we are paying taxes at the level we were paying back in 2007 and 2008 (at least on our primary home).
For some long time Florida home owners, during the recession their real estate taxes continued to go up because there was such a huge gap between their assessed value and taxable value. For folks like us, landlords to three Florida properties and our primary home was purchased in 2004 our real estate taxes have come down to be similar to the rate that the long term residents of our neighborhood pay. We live in a very eclectic area so the disparity in real estate taxes is not as glaring as newer construction areas, where you could have, during the boom time, two identical sized homes with one owner paying $4000 in real estate taxes and the other non-homesteaded resident paying $8000 in real estate taxes.
Florida's homestead law complicates the real estate tax situation. Florida's homestead law provides protection against forced sale of one's primary home. One of the reasons O.J. Simpson lives (or lived, he is in jail at present) in Florida is because of the generous protections from creditors provided for one's primary dwelling no matter how big or expensive.
For our purposes the homestead law provides a tax exemption from our real property taxes. A family with a homestead property receives a $50,000 tax exemption for all real property taxes except for school taxes (for which $25,000 of that exemption applies). So a family with a home valued at $200,000 would only pay taxes on $150,000 of the value and $175,000 for the school district taxes.
Even more important though is the protection provided against the rate at which taxes can increase from year to year. For a Florida homestead property, the rate at which taxes can increase is 3% or the rate of inflation which ever is less. For 2012 that increase is 3%. So, that means, when we receive our proposed taxes for our primary home there are two numbers for our home, the assessed value (which is the market value for our home and land less the $50,000 homestead tax exemption) and the taxable value. The taxable value can only rise by a maximum of 3% year over year and that is the number we pay taxes on. For our Florida investment properties the assessed value and the taxable value are the same and there are no exemptions.
While the Florida real estate bubble deflation has been hard on our net worth, the upside (gotta look on the bright side) has been that the assessed value went down on all of our Florida properties, which means that our real estate taxes and overall carrying costs have gone down. Now that property values are starting to edge up we have the 3% tax rate cap protection for our primary home so it will be quite few a years untill we are paying taxes at the level we were paying back in 2007 and 2008 (at least on our primary home).
For some long time Florida home owners, during the recession their real estate taxes continued to go up because there was such a huge gap between their assessed value and taxable value. For folks like us, landlords to three Florida properties and our primary home was purchased in 2004 our real estate taxes have come down to be similar to the rate that the long term residents of our neighborhood pay. We live in a very eclectic area so the disparity in real estate taxes is not as glaring as newer construction areas, where you could have, during the boom time, two identical sized homes with one owner paying $4000 in real estate taxes and the other non-homesteaded resident paying $8000 in real estate taxes.
Wednesday, August 29, 2012
Lease Break
Ugh, one of our tenants has decided to break her lease. Our tenant has a job opportunity that is requiring her to move and its an opportunity that she can't pass up so she has opted to break her lease.
Mr. Sam normally handles the interactions with our tenants, because I can be too tough and over the years he has done a better job at working and managing our tenants. This is our plan, we will review the lease and abide by the lease. I'm sure you are thinking, of course you'll abide by the lease, well Mr. Sam can be too nice and not charge fees that we ought to be charging. So, because we only got notice late in the month, we will charge her the last month of rent (which we have in our tenant account) because we won't be able to lease the unit before September first. If we rent the place quickly (i.e. mid-month) we will refund part of her last month's rent, meaning we won't collect the rent twice for the same unit. We also will charge her the lease break fee (which we also have in our tenant account) since she is breaking the lease. The lease break fee covers the expense of advertising the unit and any other expenses related to re-renting the unit (i.e. there is a utility fee for transferring the utilities back to our name).
Friday, August 10, 2012
Recycling Bandits
Today, Friday, is recycling day in my small City. We utilize a single stream collection system. Which means that all our recycling, paper, cardboard, plastic, glass, cans, etc. is put into one large bucket. Then the City utilizes an automatic pick up truck system that grabs the bucket and dumps it into the truck (which looks like the below image from another city).
The recycling program doesn't cost anything to the City, or the tax-payors, because the recycling program pays for itself by recycling and selling off the higher value recyclables. In fact, there has been some discussion about a program in which the City will start tracking the weight of each household's recycling and eventually provide rebates (that will go to cover cost of waste removal) based on higher levels of recycling.
As you know, we live in South Florida. South Florida has a large immigrant population (both legal and illegal). I have general objection to the Federal government not enforcing our immigration laws and the fact that the illegal immigrant population strains our tax funded resources. However, on a personal level, I generally have no problem with the illegal immigrants that make their home in our City. Most of these folks are hard working, family orientated, peaceful folks who are doing their best to make a better life for themselves and their children.
But, every Friday I see, without fail, a group of immigrant women who goes around and collects the cans from the recycling buckets. As far as I'm concerned this activity is theft from the City and from the citizens, because it is undermining our recycling program. On the other hand, I'm sure these folks probably don't see any harm in their efforts since what they are stealing from is trash. Some municipalities have criminalized recycling theft or scavenging but I can't find that our City has done so. As such, if there is no ordinance against the activity I'm not sure anything can be done at this point.
At this point, I'm thinking about reaching out to my local commissioner, what would you do?
The recycling program doesn't cost anything to the City, or the tax-payors, because the recycling program pays for itself by recycling and selling off the higher value recyclables. In fact, there has been some discussion about a program in which the City will start tracking the weight of each household's recycling and eventually provide rebates (that will go to cover cost of waste removal) based on higher levels of recycling.
As you know, we live in South Florida. South Florida has a large immigrant population (both legal and illegal). I have general objection to the Federal government not enforcing our immigration laws and the fact that the illegal immigrant population strains our tax funded resources. However, on a personal level, I generally have no problem with the illegal immigrants that make their home in our City. Most of these folks are hard working, family orientated, peaceful folks who are doing their best to make a better life for themselves and their children.
But, every Friday I see, without fail, a group of immigrant women who goes around and collects the cans from the recycling buckets. As far as I'm concerned this activity is theft from the City and from the citizens, because it is undermining our recycling program. On the other hand, I'm sure these folks probably don't see any harm in their efforts since what they are stealing from is trash. Some municipalities have criminalized recycling theft or scavenging but I can't find that our City has done so. As such, if there is no ordinance against the activity I'm not sure anything can be done at this point.
At this point, I'm thinking about reaching out to my local commissioner, what would you do?
Wednesday, August 8, 2012
Diamonds and Dollars
Have you ever received mail alerting you to the fact that you are a presumptive member of some class action lawsuit? If yes, what did you do? Did you ignore the mail, toss it, investigate and then toss, respond, file a claim, opt out?
Maybe you have heard news reports about the Nutella class action lawsuit (over the issue of whether chocolate nut spread is nutritious or not), wherein the settlement to the class was for coupons to buy more delicious, but not nutritious, Nutella. In fact, many class action settlements involving retail wrong doing involve discounts or coupons for future services or products. As a result, in some class action settlements, response rates are lower than 25%.
Yesterday, Mr. Sam received follow up mail from the Diamonds Claim Administrator for the DeBeers diamond price fixing settlement. While neither of us have any recollection of submitting a claim, I assume I filled out the paperwork and submitted it back in 2008 (my research indicates that claims were due in 2008). I have been prone to submit class claims ever since I received a check for almost $200 for a test prep class I took years ago in advance of professional school.
So, now the claims administrator is looking for actual proof of purchase for the engagement ring diamond that Mr. Sam purchased back in 2005. Since my engagement ring is our most expensive piece of jewelry I do have a detailed file. I have the GIA grading report and the Gemprint Certificate of Registration for the center diamond. I also have the documentation regarding the wedding band and insurance paperwork, but nothing in my files that documents how much Mr. Sam paid for the main diamond.
Part of the problem is that Mr. Sam went through a diamond broker and bought the center diamond from a wholesaler and then had the engagement ring designed by a jeweler. As such, there is no receipt for the ring as a whole. Thank goodness for Yahoo email, after I dug through our hard copy file and came up empty, he was able to go back to his 2005 e-mail records and find a receipt. Hooray!!
Today, I will copy all of the diamond material and will send it off to the claims administrator. Who knows how much we will get, but something is better than nothing.
Maybe you have heard news reports about the Nutella class action lawsuit (over the issue of whether chocolate nut spread is nutritious or not), wherein the settlement to the class was for coupons to buy more delicious, but not nutritious, Nutella. In fact, many class action settlements involving retail wrong doing involve discounts or coupons for future services or products. As a result, in some class action settlements, response rates are lower than 25%.
Yesterday, Mr. Sam received follow up mail from the Diamonds Claim Administrator for the DeBeers diamond price fixing settlement. While neither of us have any recollection of submitting a claim, I assume I filled out the paperwork and submitted it back in 2008 (my research indicates that claims were due in 2008). I have been prone to submit class claims ever since I received a check for almost $200 for a test prep class I took years ago in advance of professional school.
So, now the claims administrator is looking for actual proof of purchase for the engagement ring diamond that Mr. Sam purchased back in 2005. Since my engagement ring is our most expensive piece of jewelry I do have a detailed file. I have the GIA grading report and the Gemprint Certificate of Registration for the center diamond. I also have the documentation regarding the wedding band and insurance paperwork, but nothing in my files that documents how much Mr. Sam paid for the main diamond.
Part of the problem is that Mr. Sam went through a diamond broker and bought the center diamond from a wholesaler and then had the engagement ring designed by a jeweler. As such, there is no receipt for the ring as a whole. Thank goodness for Yahoo email, after I dug through our hard copy file and came up empty, he was able to go back to his 2005 e-mail records and find a receipt. Hooray!!
Today, I will copy all of the diamond material and will send it off to the claims administrator. Who knows how much we will get, but something is better than nothing.
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