Credit Card Offers

The number of mortgages that were successfully altered by the federal government’s Home Affordable Modification Program slipped about 13 percent to slightly more than 87,000 in February, according to the latest monthly statistics from the nonprofit group Hope Now. That figure is based on the more than 61,000 proprietary modifications granted during the month, and the 26,147 permanent alterations that were completed.

About 49,000 of these alterations were able to successfully reduce the troubled homeowners’ monthly interest payments, as well as the loan principal, the report said. Of

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An active-duty soldier whose mortgage servicing company reported him as “seriously delinquent”—even though he never missed a payment—recently won $21 million from the company in federal court.

U.S. Army Sergeant David Brash bought his house in Columbus, GA for $160,000 in 2007. He set the monthly $1,200 payment to be withdrawn automatically from his paycheck every month, according to court documents.

But Coldwell Banker Mortgage, the nation’s 8^th-biggest mortgage servicing company, made mistakes on the original loan paperwork. These cau

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Last week, one of the biggest stories in the news was how much General Electric paid in federal taxes. The genesis of the story was a New York Times article in which the third paragraph said:

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

GE responded, tweeting:

GE paid significant U.S. fed income tax in 2010, along w/ $1B+ in payroll, state & local

Henry Blodget dug a little deeper (so did many others, such as Megan McArdle, Business and Economics Editor for The Atlantic). As always, the truth is somewhere in the middle.

Let’s be honest, GE is like any other person – they want to minimize their taxes. It’

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Tax Returns

The IRS processed 230 million tax returns in 2010, down 2.6% from 236.5 million returns in 2009. California accounting for 27.2 million of those returns, the most of any state. Texas sported the second most returns with 17 million followed by a near neck and neck competition for third between Florida (15.3 million) and New York (15.2 million).

Can you guess the state with the fewest returns? If you guessed Alaska, you’d be wrong (that’d be my guess, but they’re actually 4th fewest). Wyoming had the fewest with 502,569 returns, with Vermont coming in second with 560,428. Third

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Reverse Convertible Security

A reverse convertible security is a short term note, usually one year, that linked is to a stock and has a high coupon rate. When the note matures, you get the par value of the note if the stock has appreciated or held steady. If the stock price has fallen below the “knock in level,” you may receive a predetermined number of shares in the stock instead of cash. The maximum you can earn from the investment is the sum total of all the coupon payments. The most you can lose is the entire note’s value minutes the coupon payments.

If you want a more technical explanation, there are two parts to the reverse convertible security – a debt instrument and an underlying put option derivative. The deb

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I’m one of the moderators of the Personal Finance sub-reddit (at Reddit.com), which routinely sees plenty of credit score related questions. This recent one made my blood boil when user wooga told me that his lender advised him to carry a balance to improve his score.

wooga: I was told by the lender that if I paid down to 1/3 of my balance that it would improve my score by 100 points in a few months, more then it would to keep a zero balance(or pay off each month) which is what I normally do. I didn’t believe it. …

I’m glad he didn’t because it’s flat out wrong.

Lenders would like you to believe that your credit score improves when you pay interest but it’s simply not true. Credit cards report your balance when your statement closes. They report it again when the next statement closes. They are snapshots in time with no information about what happens between those two moments. The reports are the same whether you carry a balance or pay off the balance in full, so carrying a balance does not improve your score.

It’s important to remember that the FICO credit score is designed to calculate the likelihood you will default on a loan. Whether or not you carry a balance is not any better an indicator than your balance at statement’s close. If you charge $500, pay off $500, and then charge $500, you are no riskier than someone who charges $500, pays the minimum plus interest, and carries the $500 forward.

Don’t carry a balance if you can avoid it and certainly don’t do it because you think it’ll improve your credit score.