Major changes coming to how your credit score is calculated –

Major changes coming to how your credit score is calculated

by: Ken Sweet

NEW YORK (AP) — The math behind your credit score is getting an overhaul, with changes big enough that they might alter the behavior of both cautious spenders as well as riskier borrowers.

Most notably for those with high scores: Abiding by the golden rule of “don’t close your credit card accounts” may now hurt your standing. On the other side, those with low scores may benefit from the removal of civil judgments, medical debts and tax liens as factors.

 Beyond determining whether someone gets approved for a credit card, a credit score can affect what interest rate and what spending limit are offered.
The new method is being implemented later this year by VantageScore, a company created by the credit bureaus Experian, TransUnion and Equifax. It’s not as well-known as Fair Isaac Corp., whose FICO score is used for the vast majority of mortgages. But VantageScore handled 8 billion account applications last year, so if you applied for a credit card, that score was likely used to approve or deny you.

Using what’s known as trended data is the biggest change. The phrase means credit scores will take into account the trajectory of a borrower’s debts on a month-to-month basis. So a person who is paying down debt is now likely to be scored better than a person who is making minimum monthly payments but has been slowly accumulating credit card debt.

“This is a really big deal,” said John Ulzheimer, an expert in credit reports and credit scoring. Ulzheimer said taking trended data into account has long been considered by the credit score industry, but hasn’t been implemented on a meaningful scale. He expects more lenders to adopt it.

People with high credit scores may be affected the most, since the goal of trended data is to see warning signs long before a borrower actually gets into serious trouble.

 “When it comes to prime borrowers, you may not have bad behavior on your credit file, but a trajectory provides very powerful information,” said Sarah Davies, senior vice president for research, analytics and product development at VantageScore.

The change also shakes up the maxim that had people keeping open accounts they’d opened long ago. An important metric in calculating credit scores has been the portion of their available credit people are actually using. A person with $5,000 in credit card debt with a $50,000 limit across several cards could score better than someone with $2,000 in debt on a $10,000 limit because of that ratio.

But VantageScore will now mark a borrower negatively for having excessively large credit card limits, on the theory that the person could run up a high credit card debt quickly. Those who have prime credit scores may be hurt the most, since they are most likely to have multiple cards open. But those who like to play the credit card rewards program points game could be affected as well.

Taking civil judgments, medical debts and tax liens out of the equation comes after a 2015 agreement between the three credit bureaus and 31 state attorneys general. The argument was that civil judgments and tax liens —which can significantly hurt a person’s credit score — were often full of errors. Medical debt was being reported on a person’s credit report before there was time for insurance to reimburse.

People with those items on their credit reports now could see a bump of as much as 20 points. But it won’t help much if they also have negative marks like delinquencies and debts that have gone to collection.

Mortgages, though, won’t be affected. The government-owned mortgage companies Fannie Mae and Freddie Mac require a FICO score for eligibility. Because of their outsized influence on the market, few mortgage lenders use VantageScore.

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Why Bed Bugs Are Becoming So Much Harder to Kill –

Why Bed Bugs Are Becoming So Much Harder to Kill

by: Amanda MacMillan

Bed bugs are developing resistance to two common insecticides, according to a new study in the Journal of Economic Entomology. Experts warn that many infestations can no longer be defeated with chemicals alone.

The common bed bug, Cimex lectularius, has previously shown considerable resistance to several other insecticides, including a commonly used one called deltamethrin. The reduced effectiveness of these chemicals is considered a main cause of the bed bug’s resurgence over the last decade, especially in big cities.

To find out if bed bugs were also developing resistances to two other common insecticides, bifenthrin and chlorfenapyr, Purdue University researchers gathered 10 different bed bug populations from Indiana, New Jersey, Ohio, Tennessee, Virginia and Washington, DC, and exposed them to the chemicals for seven days.

In five of these populations, they found reduced susceptibility to bifenthrin—meaning that more than 25% of the bed bugs survived. Three populations also had reduced susceptibility to chlorfenapyr.

Concerns about insecticide resistance aren’t new, says lead author Ameya Gondhalekar, research assistant professor at Purdue’s Center for Urban and Industrial Pest Management. “The longer you use any product for the control of a particular pest, the more resistance issues you are going to have,” he says. In 2015, a University of Kentucky survey found that 68% of pest management professionals considered bed bugs the most difficult pest to control.

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Mental health housing opening on Alexander Street –

Mental health housing opening on Alexander Street

New York State announced the opening of a housing development for people with psychiatric disabilities and low-income families.

The $16.6 million mixed-use housing development is called Alexander Commons. On-site behavioral health services will be provided by East House.

There’s 60 units in the building; 30 for people recovering form mental illness, and 30 are available to low-income families.

Wells Fargo customers in $110 million settlement over fake accounts –

Wells Fargo customers in $110 million settlement over fake accounts

by: Matt Egan

Wronged Wells Fargo customers are finally getting a bit of payback.

Wells Fargo has reached a $110 million preliminary settlement to compensate all customers who claim the scandal-ridden bank opened fake accounts and other products in their name.

 It’s the first class action settlement by Wells Fargo since authorities revealed in September that the bank opened up to 2 million fake accounts to meet unrealistic sales targets that have since been eliminated.
Wells Fargo said on Tuesday the payments to customers will be in addition to refunds the bank has already paid out.

The settlement is expected to cover several lawsuits: including one filed in May 2015 in the Northern District of California, a separate one launched last September by customers, as well as 10 others.

Wells Fargo’s $110 million settlement marks a reversal from just a few months ago when it tried to kill a fake account lawsuit by forcing victims to resolve their claims quietly in closed-door arbitration instead of open court.

But Wells Fargo (WFC) apparently decided not to enforce those controversial forced arbitration clauses and reach a settlement instead. The bank cited a desire to “move forward and avoid continued litigation.”

Wells Fargo said the $110 million settlement will cover “all persons” who claim that without consent the bank opened an account in their name, submitted an application or enrolled them in a product or service. The period covered begins on January 1, 2009 and ends whenever the settlement is executed.

Customers who believe they were impacted by Wells Fargo’s fake accounts don’t need to take action yet because a court still needs to sign off on the agreement that was reached in principle.

Wells Fargo said once preliminary approval is received, a notice will be sent out explaining the process for customers to make claims.

It’s not clear yet how much each customer will receive because it’s too early to say how many of them will be included in the settlement.

After attorneys’ fees, Wells Fargo said the $110 million will be used first to compensate customers for out-of-pocket losses. That includes fees incurred due to unauthorized account openings.

Wells Fargo said whatever is left in the pool after that will be split among customers in the class, “based on the number and kinds of unauthorized accounts or services claimed.”

These payouts are on top of the $3.2 million Wells Fargo has paid to customers over 130,000 accounts over potentially unauthorized accounts. That works out to a refund of roughly $25 per account.

A Wells Fargo spokesman told CNNMoney that “in most cases” customers who received a remediation check are eligible to take part in the settlement.

“It really pissed me off,” Brian Kennedy, a retiree from Maryland who discovered a Wells Fargo checking account he never asked for, told CNNMoney in September.

“They expect people to not be paying attention and hope you don’t notice,” Kennedy said.

Wells Fargo CEO Tim Sloan said in a statement that the settlement is “another step in our journey to make things right with customers.”

Despite the settlement, Wells Fargo doesn’t sound like it’s moving away from its practice of enforcing the fine print agreements that require customers to enter arbitration when issues arise. Forced arbitration has been criticized because it allows companies to hide misbehavior in private mediation rather than opening it up to public scrutiny in court.

“Wells Fargo continues to believe that arbitration is an efficient and effective way to resolve disputes,” a Wells Fargo spokesperson said.

KBW analyst Brian Kleinhanzl wrote in a report that the settlement is a positive for shareholders because it removes “another overhand” related to the scandal.

But he noted that Wells Fargo’s sales results “remain subdued” since the settlement. Wells Fargo recently revealed its credit card applications plunged by 55% in February, the worst performance since the scandal.

The one thing everyone should do (but no one does) before buying a house – USAToday

The one thing everyone should do (but no one does) before buying a house

By: Jim Wang

Sometime in my mid-twenties, I decided I wanted to stay in the Maryland area and buy a home.

I could afford a mortgage around $1,500 per month based on my expenses—mostly student loan payments—and salary. If I found the perfect home, I could stretch to afford around $1,750 per month.

As I searched for my future home, I played a financial game with myself. I’d soon be saddled with a $1,500 mortgage, so why not spend like I had one already? Why not pay a “pretend mortgage” before my real one so I had a better idea of what it would feel like?

When I was looking for a home, I was sharing a two-bedroom apartment with a friend and paying $600 a month, plus utilities. It was a steep jump to go from $600 to $1,500 a month, so playing this game was important.

At the time, I was budgeting using an app, so I knew I could handle the increase.

I could maintain one of my key money ratios, paying less than 30% of my salary to housing. But I still needed to know how it felt. It’s one thing to see it in an app and another to feel it.

How ‘playing house’ worked for me

Every month, I paid my $600 for rent and set aside $900 in savings. As you’d expect, I didn’t just transfer money from one account to the other, because who has $900 sitting around? If I did, I wouldn’t need to play house!

I had to make adjustments. I contacted my human resources representative to reduce my 401K contributions so I’d have more in my paycheck. I had to adjust my other savings goals as well because I wouldn’t be saving as aggressively.

Making those trade-offs became easier — and easier to explain to friends without having to deal with grumbling, because I was making a clear choice. I was cutting some social time because I wanted to buy a house. I wasn’t saving money for the sake of it. I had a very good reason: to buy a house.

The housing search took about 18 months and I played house for only 12 of them, so I had an extra $10,000 or so saved up in my mortgage account. I took that money and put it toward the down payment.

The house ended up having a mortgage that was a little less than $1,500, and after living with the mortgage payment for a year and a half, I had no trouble adjusting to it.

If you’re thinking about buying a home or making a similar large purchase, consider playing house first.

Todd Baxter leaving Veterans Outreach Center – Democrat & Chronicle

Todd Baxter leaving Veterans Outreach Center

By: Todd Clausen

After three years, Todd Baxter has announced that he will leave his job as executive director of the Veterans Outreach Center

He said in a letter that his last day will be April 14.

“As our youngest Zach is about to graduate high school and go on to college, my wife Mary and I are taking stock in our lives and contemplating future endeavors,” he wrote. “It is for this reason that I will turnover of the management of the Veterans Outreach Center.”

Baxter’s departure marks the second blow to the Veterans Outreach Center in recent months. Founder Thomas Cray was diagnosed with brain cancer, his daughter said in January.

Cray, a Navy veteran of the Vietnam War, counseled veterans for a group called the Veterans Outreach Project, which was founded by Vietnam veterans in 1973 to help veterans adjust to civilian life. In 1981, Cray oversaw the incorporation of the project into the nonprofit Veterans Outreach Center, which he led until his retirement from the organization in 2010.

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Report: Rochester housing market fully recovered –

Report: Rochester housing market fully recovered

by: Velvet Spicer

Rochester’s housing market has recovered nicely since the Great Recession, a new report from shows., an online publisher of mortgage and consumer loan information, ranked 100 housing markets nationwide by analyzing the Federal Housing Finance Agency’s Home Price Index as a basis to determine which markets have fully recovered and which lag the recovery.

Since the last recession, Rochester’s housing market has recovered fully and is nearly 11 percent higher than its peak HPI value of 140.25 during the housing boom.

The HPI data series began in 1991 with a base of 100. So, if Rochester’s average home price was $100,000 in 1990, for example, that would be the basis for a score of 100. Each annual increase or decrease in median home values would be reflected in an increase or decrease in the base score.

The U.S. Census Bureau reported the median value of owner-occupied housing units in the Rochester metro area was $138,900 in 2015. reported the Las Vegas metro area has the largest recovery gap. The region’s housing market is nearly 41 percent lower than its peak value during the housing boom.

The Denver metro area has made the most progress in housing values since the Great Recession; the region is more than 60 percent higher than at its HPI peak during the housing boom.

The Buffalo metro area made the nation’s top 10 with a more than 28 percent increase over its peak housing boom HPI.

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What the Fed rate hike means for homebuyers –

What the Fed rate hike means for homebuyers

by: Kathryn Vasel

It’s a tough market for homebuyers. Prices are high and supply of available homes is low.

And while the Federal Reserve’s rate hike could make home buying more expensive, house hunters shouldn’t start panicking yet.

 The Fed increased its benchmark interest rate by one-quarter of a percentage point on Wednesday.

The Fed doesn’t directly set mortgage rates, but its actions can affect the housing market.

Mortgage rates tend to move with the government’s 10-year Treasury note, which serves as a benchmark for many forms of credit, including mortgages. Interest rates on the notes have already risen since Donald Trump was elected president and on signals the Fed would continue to tighten monetary policy.

But Wednesday’s hike was widely expected, meaning the markets had already priced it in. So many experts don’t see rates moving much higher in the coming weeks.

“The last couple of times the Fed made a move, the rates firmed up in advance of the decision, and when it happened they kind of faded,” said Keith Gumbinger , vice president of

The Fed has now raised rates three times since the end of 2015. Following the first hike in December 2015, mortgage rates started 2016 with a drop for the first few weeks.

Related: Why it takes years to save for a down payment

Plus, rates are still relatively low, and many experts don’t expect them to rise above 5% this year.

Last week, the average rate of a 30-year fixed mortgage climbed to 4.21% — a 2017 high. A year ago, it was 3.68%.

At the current interest rate, buyers will pay $57 more per month compared to a year ago, assuming a $235,000 price tag and a 20% down payment.

That might not be a deal breaker for many buyers, but it could hurt those shopping in more expensive neighborhoods, or those right on the margin of being able to afford a home.

“That is going to create a bit of sticker shock for some buyers looking to buy this spring,” said Len Kiefer, deputy chief economist at Freddie Mac. He expects rates to stay around 4.25% to 4.30% this buying season.

Calculate: How much house can you afford?

Right now, the Central Bank is expected to raise rates three times this year, but if its actions become more aggressive, it could bring a sharper upswing in mortgage rates.

And it’s not just the Fed that can influence mortgage rates.

“The global economic picture is a little warmer and things are pretty good. Markets aren’t just reacting to what the Fed is doing, but the prospects of the rest of the world as well,” said Gumbinger.

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Proposed Batavia apartment project would aid program for veterans graduating transitional housing –

Proposed Batavia apartment project would aid program for veterans graduating transitional housing

by: Jim Krencik

BATAVIA — A residential project revealed Tuesday would add another level of support for veterans seeking stability in Genesee County.

The project is a partnership between Home Leasing and Eagle Star Housing.

The Rochester housing developer and manager intends to construct a four-story, 55-unit apartment building at 552, 554 and 556 East Main Street in Batavia, according to an introductory sketch provided to the City of Batavia Planning and Development Committee.

A quarter of the $12 million facility’s units — which are projected as a mix of studios, one-bedroom and two-bedroom apartments — would be set aside for veterans who are “graduating” from Eagle Star’s transitional housing apartments.

Eagle Star Executive Director Zach Fuller said the project is a first for his organization, which in Pembroke serves up to 16 veterans in the early stages of their recovery from homelessness and unstable living conditions. Fuller believes the proposed project would offer a permanent housing option and access to veterans services in a supportive environment.

“A lot of the guys come into a situation where they need housing that is clean, safe, and to be honest, with other veterans,” Fuller said. “The veterans pick each other up and being with other veterans helps them get through their hardships in their recovery to full integration back into society.

“Our transitional facility (in Pembroke) is at about 90 percent occupancy,” he continued. “The guys coming in from Buffalo and Bath and Genesee County love Batavia. They want to stay here but they need safe, affordable housing. We feel that with Home Leasing, we can make this happen for them.”

Officials from Home Leasing, the firm behind a redevelopment of the old Holley High School, said they would not begin construction until at least 2018. Financing from the state’s Office of Homes and Community Renewal and site plan approval are still in early stages.

At first blush, the planning and development committee supported the mission laid out, but were far less sold on the proposed design.

The targeted property sits nearly across the street from DePaul’s Batavia Apartment Treatment Program. It is currently three homes that Home Leasing is purchasing, with the proposed project a completely new build.

Tuesday’s presentation was an informal discussion, Bob Bringley of Marathon Engineering said before showing a concept drawing and a potential interior layout.

Under the initial pitch, the 1.2-acre site would narrowly fit the facility — which is to the east of an envisioned combined parcel and oriented facing the west. Fifty-nine parking spaces would run along the west and southern sides in an L.

Bringley said the proposal would need variances for the parking levels and setbacks from East Main Street and a property to the east. The four-story design is allowed in the commercial zone with a special use permit, Codes Enforcement Officer Doug Randall told the committee, but they favored a scaled-down building.

“It seems to be a little intense, not really compatible to the neighborhood,” said committee member Ed Flynn, who recommended downsizing the project and changing the look and placement of the structure. “It’s a little over the top … it’s square, it looks like a hotel, a DoubleTree.”

The design also featured balconies for many of the units, raised gardens and a gazebo. Inside, developers said there would be community spaces, fully accessible apartments for handicapped residents and a laundry facility.

It would be ideal for a downtown project, the committee told Home Leasing to murmurs from city officials and residents who stayed after an earlier discussion about the City Centre site.

Adam Driscoll, a development manager for Home Leasing, said the East Main Street site was chosen after other options within the city were deemed unsuitable. Some had wetlands, or weren’t properly zoned.

Attempts to expand the proposed site to a larger acreage have been unsuccessful as of now, but the developers see enough room to realize their vision.

“Ideally, we were hoping for more units,” said Driscoll, who noted the proposed size is near the minimum Home Leasing targets for sites with a full-time, on-site manager. “We’re trying to make this work as best as possible for the demographics and for us as a developer.”

“We’re very proud of what we do,” he added. “We’re mission-based and we care about the community and our neighbors … we want to accommodate the veterans to be able to stay in the area.”

A preliminary market study for the project identified a primary market area within Genesee County, roughly an oval pulled toward Pembroke but largely in Batavia and surrounding towns.

Driscoll and Megan Houppert, a development manager at Home Leasing, said the rental costs for 31 non-veteran one-bedroom apartments are targeted at individuals and families with incomes at 60 percent of the county’s $64,900 average median income.

The project would also include eight two-bedroom units priced at around $850 a month for residents at 60 to 90 percent of the AMI.

“It’s housing for about 11 percent of the population that’s out here,” Houppert said, similar to Conifer’s proposal phase II project on West Main Street Road and the DePaul project proposed further down East Main Street. Both have been factored into the market analysis.

Developers said after the meeting they intend to keep pursuing the project while considering the committee’s recommendations.

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Shopping for a home? You better act fast –

Shopping for a home? You better act fast

by: Diana Olick

If you’re out shopping for a home this weekend, bring your checkbook.

There may still be ice on the ground in much of the nation, but the spring housing market is the hottest it’s been in a decade. Consumer sentiment in both the economy and the housing market is rising and that is translating into strong demand from homebuyers. The trouble is, the supply of homes for sale is incredibly weak and getting weaker. What is for sale is selling fast.

The typical home that sold last month went under contract in 60 days, eight days faster than one year ago, according to a new report from Redfin, a real estate brokerage. Nearly 15 percent of all homes listed for sale in February were off the market within two weeks, up from 11.7 percent last year. This is the fastest February market Redfin has recorded since it began tracking in 2010.

 The speed and the competition are combining to push home prices higher. Redfin recorded a 7 percent annual jump in median sale prices in February. Homeowners now have a lot of equity. In fact, total home equity hit a new peak at the end of last year, according to research by the Federal Reserve.
“While great for homeowners, continuously strong price growth across the U.S. since 2012 has posed significant challenges for first-time buyers, especially given such low supply in affordable price-tiers,” said Nela Richardson, Redfin’s chief economist. “There is a silver lining on the horizon, however. Rising prices and increased equity may tip the scales for homeowners who have been delaying their decision to move up, which could add much-needed starter-home inventory to the market.”

More homeowners think now is a good time to sell, according to the latest housing sentiment survey from Fannie Mae. More also consider now to be a good time to buy as well, but the same is not true for renters. Confidence in home buying is slipping among renters as affordability sinks.

“Inventory conditions are even worse than a year ago, and home prices and mortgage rates are on an uphill climb,” said Lawrence Yun, chief economist for the National Association of Realtors. “These factors are giving many renter households a pause about it being a good time to buy, even as their job prospects improve and wages grow. Unless there’s a significant boost in supply levels this spring, these constraints will, unfortunately, slow or delay some prospective buyers’ pursuit of purchasing a home.”

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