Preferred Financial Services

Review of the Senate version of the Financial Regulations Reform Bill

May 25th, 2010

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Preferred Financial Services, Inc reviews and analyzes the final version of the Financial Regulations Reform Bill recently passed by the Senate….

Andover, Massachusetts May 25th 2010—Preferred Financial Services has analyzed and reviewed the final version of the Financial Regulations Reform Bill that passed the senate last week. The final version of the bill has many positive aspects for consumers but also failed to go far enough in certain areas. President Obama has said this bill is vital for consumers and the country in general so that a future financial meltdown like we witnessed between 2008 and 2009 will never happen again. The bill introduces many new regulations for the Financial Services industry and is designed to protect consumers from risky and deceptive financial products. President Obama would like to see the house and senate bill reconciled in the next few weeks so that he can sign it into law.

This bill deals with everything from mortgage standards to consumer protection agencies and stock market regulations. The most beneficial part for consumers is the creation of Consumer Financial Protection Bureau. This bureau will be tasked with protecting consumers from unfair and potentially predatory consumer loan and credit card company practices. Just like the house bill, the senate bill also deals with how to regulate and supervise “too big to fail” companies. These are the types of firms that almost ruined our economy when they failed. The proposed fund to deal with these firms from the House bill has been removed from the senate version and congress will now have to work together to find a way to regulate and wind down firms that could threaten the American economy as whole.

When it comes to dealing with mortgages and mortgage backed financial products, the senate bill is designed to protect consumers from risky financial bets that paid of handsomely in the past but also led us towards the financial meltdown of 2008. In the past, many consumers were given loans with no verification of their income or ability to pay back the loan. This practice would be outlawed in the senate bill. Firms that trade in mortgage backed securities and financial products will also be required to keep at least 5% of the value of the product in house. This should lower the risks being taken by banks and minimize the chances of another financial meltdown. As soon as the bills are reconciled and the final version is signed into law by the President, we at Preferred Financial Services will analyze it and inform consumers on the changes they can expect and how it will impact their financial futures.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit: www.pfsdebtrelief.com

Contact:

Stephan Tavernini

Rising Strategic Default Rates

May 21st, 2010

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Preferred Financial Services, Inc analyzes the recent news of rising Strategic Mortgage Defaults….

Andover, Massachusetts May 3rd 2010—Preferred Financial Services has analyzed and reviewed the recent news of a rise in the number of strategic mortgage defaults occurring throughout the country. The economy has hit everyone hard, and homeowners were not spared. The first casualties were those consumers who were given loans with little ability to pay it back for overpriced homes during the peak of the housing bubble. These sub prime lenders took advantage of the availability of cheap credit while assuming that the good times would never end. They did, and these were the first people to file for bankruptcy and see their home be foreclosed on. The recent rise in strategic defaults shows a shift away from those who can’t afford the payments to those who choose not to make the payments.

What would drive someone to just stop making payments? In general, these people own homes that are now valued below their remaining mortgage balance. With their mortgages “under water”, many homeowners see their continued mortgage payments as a complete waste of money and instead choose to focus on their unsecured consumer debt. This is partly responsible for the recent rise in consumer spending with no comparable rise in employment. The other group of homeowners that are turning to strategic defaults are those looking for a loan modification. Many creditors do not offer better rates or reductions in principle as long as the payments are current. This is forcing many who are facing foreclosure in the mid term to opt for a strategic default now and force the banks to the negotiating table.

While some homeowners see this as an easy way out of a mortgage with negative equity, a strategic default is just as damaging to a homeowners credit as a conventional default. The late and missed payments will cause a long term dip in your credit score and future lenders will see that you walked away from a previous obligation. While it can be beneficial in the short term, a strategic default can cause much more damage in the long term. Paying off unsecured debts while nice should be secondary to your secured debt payments. In general, credit card debt and other unsecured debts have much higher interest rates, and thus you are paying far more in interest with those accounts. Even if you lose the home to foreclosure, you will still need to find a new place to live in, and your savings will not be what you had planned.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit: www.pfsdebtrelief.com

Contact:

Stephan Tavernini

Original Article by Jody Shenn

http://news.yahoo.com/s/bw/20100511/bs_bw/1020b4178045116389

Update – Financial Regulation Reform Package Passes

May 21st, 2010

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The reform package that has been debated in congress for over a month and the amendments that go with it has been approved. Stay tuned for a review of how it will impact you early next week!

Consumer Spending Data for March

May 18th, 2010

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Preferred Financial Services, Inc reviews and discusses the most recent consumer spending habits released by the Commerce Department ….

Andover, Massachusetts May 18th 2010—Preferred Financial Services has read and reviewed the most recent consumer date released by the Commerce Department and sees some interesting trends in consumer behavior. The economy is still limiting consumer spending, but there has been a marked improvement compared to the past few quarters. While spending is increasing, wages are not keeping track and the national savings rate is starting to decline again. All of this means that we are seeing a new but perhaps familiar type of consumer decision making when it comes to spending, saving, and household debt.

The newest data released for the month of March shows a very different outlook on household finances than what we had come to expect throughout the recession. Consumer saving, spending, and incomes all changed to various degrees. The most important part of the US economy is consumer consumption, so the .6% rise in consumer spending is good news for the future of our economy. However, this good news was offset by some equally troubling news. This .6% rise in spending was counteracted by a .3% drop in personal savings. This drop has left the personal savings rate at 2.7% of net household income, the lowest it has been since September of 2008. The savings rate climbed throughout 2009 to a high of 4.3% as Americans stockpiled their earnings and prepared for a prolonged recessions. This recent drop in saving shows that the increase in spending can be partly attributed to people spending more of their after tax income and saving less. While good for short term economic news, this troubling trend indicates that while the economy and stock market have both improved over the past few quarters, the bad financial decisions and habits that led us to this recession appear to be making a comeback.

From an income standpoint the news is even worse. Personal income grew a miniscule .3% rise last month, not keeping pace with spending or inflation. As it is less than the rise in consumer spending, this too indicates consumers are trending back towards their pre-recession habits of spending more than they should. This small rise in incomes also indicates the job market has a ways to go before it can recover fully. High unemployment will keep wage growth low as there is an oversupply of skilled labor which will stifle growth in the long term and limit our ability to return to pre-recession levels of spending, earning, and living. What can be said with 100% certainty is that as long as the job market remains in a slump, the US economy can not realize its full potential and lead a global recovery.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit: www.pfsdebtrelief.com

Contact:

Stephan Tavernini

Citation:

http://finance.yahoo.com/news/Consumer-spending-advances-apf-134515370.html?x=0 by Martin Crutsinger, AP Economics Writer

Preferred Financial Services Identity Theft Policy

May 12th, 2010

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Preferred Financial Services, Inc prepares to enact its own Red Flag Rules in regards to consumer Identity Theft…..

Andover, Massachusetts May 12th 2010—Preferred Financial Services has reviewed the new Red Flag Rules being enacted by the FTC and is preparing to roll out its own by the deadline of June 1^st, 2010. Over the past few years consumer ID theft has become a hot button topic that has caused millions of Americans stress and huge financial problems. With the spread of online finances and the ease with which personal information can now be found on the internet, ID theft continues to increase and consumers need to do everything possible to protect themselves from this relatively silent threat to their finances. As a result, the FTC has created new legislation that requires financial firms dealing with consumers personal data to create and implement a set of procedures to protect their private information.

The new rules encompass four main ideas that in theory should protect all sensitive information from ID thieves. The first step that a Ref Flag program needs to take is to identify possible red flags in a company. This means identifying when and how personal information could be compromised. The second step is detecting red flags that have been identified as possible problems. The third step is to prepare appropriate responses to red flag occurrences. The fourth and final step is to continuously update the red flag procedures to stay ahead of the changes in technology that causes information to become vulnerable. When these four steps are implemented by a firm, consumer information should be protected from the unwanted eyes of potential thieves.

Preferred Financial Services realizes the risks that are out there and has taken the threat of Identity Theft very seriously. As such, it will not take much too fully comply with the new rules coming out of Washington. We already have a robust system in place to identify and prevent external threats to consumer information. We are currently in the process of identifying any possible internal threats and will then create a program to ensure any red flags are addressed as quickly and efficiently as possible.

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

For more information, please visit: www.pfsdebtrelief.com

Contact:

Stephan Tavernini

PFS News

Credit Card Reform Act of 2009

May 6th, 2010

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Andover, Massachusetts May 6th 2010—Preferred Financial Services has read and reviewed the Credit Card Reform Act of 2009 and sees many changes that Americans need to be aware of so they can act accordingly. Everything from new restrictions on minors to the new presentation of monthly statements has been covered by this bill, and if Americans don’t understand the changes, they will continue to make the same mistakes this bill was created to avoid.

The first visual change consumers will notice is how the monthly statements are presented. Gone are the basic balance due figures and in its place there are now sections that show how long it will take to pay off the balance if only the monthly minimum is paid as well as how much they would have to pay each month to eliminate the debt in 3 years. Both figures should help consumers understand just how harmful minimum payments are as well as pointing out just how expensive items are if not paid off in a short time period.

The law has also outlawed arbitrary rate increases which means consumers now get at least 45 days notice before their interest rates go up for no reason. The practice of any-time, any-reason interest changes that used to occur on a daily basis is now a thing of the past. This means that the popular double cycle billing practice has now been outlawed. This practice allowed companies to charge consumers interest on items that were paid in full the previous billing period. It basically punished Americans who paid their bills in full on time one month but not in full on time the next.

The act has also changed how vulnerable people of society can be targeted by credit card companies. Anyone under the age of 21 now must prove their income or have a co-signer in order to get a credit card. It has also outlawed prize giveaways at college campuses which used to be a popular way of enrolling new students into credit card programs. Both provisions should prevent future students from running up massive credit card debts while still in school, a common occurrence under the previous rules.

For more information on the act and all the changes, please visit www.whitehouse.gov and search for Credit Card Reform Act

Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.

Contact:

Stephan Tavernini

stavernini@pfs1.net

www.pfsdebtrelief.com

Update to Financial Regulation Reform Package

May 5th, 2010

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Since my last post, congress has worked hard to iron differences between the Democrats and Republicans in regards to a few contentious elements of the reform package. As of this morning, Democrats have removed the “$50 billion bailout” fund that was intended to be used to disolve failing financial institutions in the future. Republicans believed this fund would just be a continous bailout fund that would allow companies to stay in business by tapping the fund whenever they were in financial trouble. This concession by Democrats should allow for the reform package to be passed with bipartisan support in the coming weeks.