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Government shutdown didn't end without repercussions Article courtesy of "Credit Card Builders" Premium Newsletter. The government shutdown has ended – at least for the moment. But the first shutdown since 1995 did take a toll on the country. Of course, the shutdown occurred because House Republicans were insistent that new spending bills include language that damaged or eliminated Obamacare; while Democrats were just as insistent it remained intact. Most people only think about the billions of dollars that were lost, such as the estimated $24 billion in lost economic output; and $450,000 per day in revenues lost at National Parks. But there were other things that went basically unseen. For example, the job reports didn’t come out on time due to delays caused as a direct result of the shutdown. Additionally, the folks who usually inspect eggs and fresh berries (and just about anything else you could put on a plate outside of red meat) were on furlough. Additionally, the FDA skipped untold numbers of inspections at dairies, processing plants and other food companies; what’s more, the FDA couldn’t do many follow-up inspections to ensure problems they’d already found were fixed. Why? Nearly 1,000 of their 1,602 inspectors were furloughed! Worse yet, the federal Center for Disease Control and Prevention (located in Georgia) sent 9,000 of their 13,000 workers home, which meant they couldn’t give their best effort to curbing the salmonella outbreak in chicken that reached 18 states. That’s bad enough – but that’s just one area that suffered. The Equal Employment Opportunity Commission wasn’t running, so discrimination cases weren’t making it into court. The Occupational Safety and Health Administration wasn’t doing business, so untrained employees could operate dangerous equipment. Children and adults wishing to use government sites such as NASA or the Census Bureau discovered these sites were not available due to the shutdown. Doctors could not apply for federal funded research grants to find cures for diseases, which may set their research back by as much as a year. Even the FCC was closed, so our country’s citizens couldn’t call to complain about a radio, television or Internet broadcast that offended them. But just because the shutdown has ended, don’t forget that this is just a temporary fix. The 16-day shutdown ended with a deal that raises the debt ceiling and allows current spending levels to remain the same through January 15, 2014. However, with Republicans saying they’ll “do anything” to derail the health care laws put in place by President Obama, there may be another one just around the corner.
Interesting article about the dropping jumbo mortgage rates. Article credit: Credit Card Builders - www.creditcardbuilders.com Anyone who routinely pays relatively close attention to mortgage rates is aware that they’re on the rise these days. But what you might not know is what is going on with some specific rates. Jumbo rates (rates for a loan of more than $417,000) have come down significantly – to the point where they are nearly the same as a conventional rate (those $417,000 and under). In fact, according to the Mortgage Bankers Association, a 30-year conventional mortgage rate in mid-August was 4.56%; meanwhile, the average Jumbo loan was an almost-identical 4.57%. So what event led to these numbers becoming so similar? Basically, it is a perfect storm of several things. First, because underwriting became more stringent, the loans given out became higher quality loans – thereby increasing demand for them. Second, non-agency jumbo lenders began to throw their hat into the ring. Third, Fannie Mae and Freddie Mac (which are involved in about two-thirds of all conventional loans) have nearly doubled the “guarantee fees” they charge to protect themselves against potential default, since they’re on the hook if a borrower defaults. Finally, many jumbo mortgages are being done by banks who are holding onto them and keeping them in their own portfolios. Why? Because the interest paid on consumer deposits in banks is still low enough that a lender can still make a tidy profit. Fannie Mae and Freddie Mac’s decision to raise these fees is making it possible for private individuals and companies to become lenders. Ironically, this has been done intentionally. Not only do the fees protect Fannie and Freddie, the result is that they purposely reduce the industry’s dependence on them – and by doing so, it helps encourage private investment at the same time; a win-win. Meanwhile, the more high-risk loans will still be absorbed by Fannie and Freddie.