the recent failure of indymac bank has brought attention to just what “fdic insured” means.  the federal deposit insurance protects the first $100,000 of deposits that you may have in a bank.  anything beyond that and, if your bank fails, it’s a loss.  in the case of indymac customers, about 5% of the total deposits were uninsured.  while i would suggest that people make sure their funds are fdic insured, the following article caught my eye....

i have a pet peeve with banks - i find it disturbing to be called at home by someone purporting to be from my bank, who asks me about my accounts and charges on those accounts.  my normal reaction is to give them absolutely no information and to request a name and phone number from them.  it may seem somewhat paranoid, but with identity theft a very real issue, it’s the safest way.

Every three years, the Federal Reserve Board conducts a survey on finances of U.S. families.  The survey includes information on income, assets, net worth, pensions, etc.  Being curious, I decided to see what the last survey had to say.  What exactly ~is~ the status of U.S. families?  How are they faring?

from www.chron.com:

Mortgage lenders are bracing for a flood of defaults as many adjustable-rate mortgages originated in 2005 and 2006 during the height of the housing market frenzy reset to higher interest rates.

The loans were initially attractive options for buyers because of their cheaper “teaser” interest rates that kept monthly payments low, but even a small percentage increase can translate into a far higher payment.

With home sales in decline and prices down or flat in many regions, more homeowners are landing in foreclosure because they can’t afford to sell their homes after falling behind on payments.

It seems they’re right.

Credit Freezes will be available to all consumers by November 1st, whether or not they have been victims of Identity Theft.

from bankrate:

Consumers in all 50 states already have the right to place a fraud alert, regardless of whether they are victims of ID theft. The fraud alert lasts for 90 days and alerts new creditors and other businesses checking the creditworthiness of an applicant that the consumer may be a victim of fraud.

While the fraud alert merely asks the lender to take additional precautions, a credit or security freeze prevents third parties from receiving a copy of the consumer’s credit report or credit score, making businesses less likely to grant credit or services to the applicant. Only businesses with a permissible purpose, or for whom the consumer lifts the freeze may obtain the consumer’s credit information.

A recent study on identity theft by the center for identity management and information protection focused on identity theft offenders rather than victims, as in previous studies.  The purpose of the study, funded by the Dept of Justice, was to assist both public and private sectors in order to combat identity theft crimes.

The Secret Service cases (517 cases, 933 defendents) that were reviewed included only those where personal information was used to commit fraud.  “Personal information includes name, address, social security number, and date of birth, but excludes credit cards, debit cards, and other bank cards.”

The results of the study included some interesting findings:

alternet reviews the documentary “in debt we trust”, by veteran TV journalist and media critic Danny Schechter.

If you wonder why borrowed money fuels the lifestyles of all ages, turn on a new documentary, “In Debt We Trust,” by the veteran dissenting TV journalist and media critic, Danny Schechter. “In Debt We Trust” vividly shows how Americans get ensnared in a web of debt spun by a “credit industrial complex” that almost seems to function like a conspiracy to drive people into financial servitude. Schechter’s central insight is bold, provocative and timely. As he quotes a Brooklyn consumer activist, “Debt is profitable.”

Zachary: What can be done?

Schechter: The first step is raising awareness. People don’t usually talk about this problem. It’s a point of embarrassment to be overwhelmed by debt. When you give people permission to talk about this, they pour out. We also need grassroots political action to promote responsible lending. We have to roll back the bankruptcy law changes. We have to fund counseling and advice. We need to make financial literacy part of our educational system.

read the story here: young borrowers face a life of debt and, if you’re interested in the documentary, see in debt we trust.

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