The newly formed government agency, U.S. Consumer Finance Protection Bureau, reports that the Credit Card Accountability, Responsibility, and Disclosure (CARD)Act has caused the U.S. credit card industry to revise policies while reducing and eliminating some penalty fees. Highlights of the report include:

• Over-limit fees have all but disappeared.
• Prior to the CARD Act, 15 percent of credit card issuers reset credit card interest rates annually, but now approximately 2 percent of issuers are resetting interest rates each year.
• Assessed late payment fees fell to $427 million in December 2010. This represents a decrease of more than half of the January 2010 amount of $901 million.
• Since the inception of the CARD Act, credit card late fees have fallen from an average of $35.00 to $23.00.

These developments are a step in the right direction toward helping consumers with debt management.

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Sarah S asks the question: My teacher is using the book by Samuelson in the class but for quizzes we get True and false like “if the price of beer falls and as a result people demand more of it, we say demand has increased.” Can anyone tell me where these are coming from.. I mean which book she must be using to get these true and false questions.. i know she is not making them up herself.. kindly help.?

Answer:She is making them up herself. To be honest, that sound more like a microeconomics question.

In this case, she is relying on your knowledge that if prices fall, demand increases (assuming that supply remains unchanged).

Nice to hear that the classics are still being used. I rode on an elevator with Samuelson a few years ago when I was teaching at MIT. It Read more…

Home loan application volume slipped 6.5 percent during the week ending February 25, according to the latest weekly survey from the Mortgage Bankers Association.

The refinance index fell 6.5 percent and and the seasonally adjusted purchase money mortgage index decreased 6.1 percent, though the results didn’t include an adjustment for the President’s Day holiday,

The unadjusted purchase index was off 3.5 percent compared to one week earlier and 19.6 percent lower than a year ago.

That pushed the refinance share even lower, from 65.7 percent of total applications to just 64.9 percent, despite an improvement in mortgage rates.

Purchases are slated to eventually overtake refinances later this year, as rates climb and home-buying demand heats up.

Mortgage Rates See More Relief

The popular 30-year fixed mortgage averaged 4.84 percent during the week, down from 5.00 percent, while the 15-year fixed drifted to 4.17 percent from 4.28 percent.

Mortgage points on the loan programs increased to 1.30 from 0.96, and to 1.07 from 0.80, including the loan origination fee, respectively.

The MBA no longer covers the one-year adjustable-rate mortgage, which fell out of favor with homeowners long ago.

Note that the rates above are good for conforming mortgages with a loan-to-value ratio of 80 percent.

Jumbo mortgage rates will always price higher.

() - German engineers saw a surge in new orders in the beginning of 2011, engineering industry association VDMA said on Wednesday.

New orders rose 46% year-on-year in January in real terms. Domestic orders increased 53% and foreign demand climbed 42%.

During the three months from November to January, new orders increased by 44%, with domestic orders increasing 38% and foreign orders gaining 47%.

Europe’s ministers fear for a potential flare up in the Euro debt crisis when meeting next Monday as an increasing number of investors worry that they might not come up with an ample solution to the current economic decline.

Chief finance ministers from the 17 Euro nations are traveling to Brussels for an afternoon meeting. They last met in mid-January and the atmosphere at the meeting was characterized by contemporary calm in the bond markets, previous meetings in November and December had entailed emergency planning on how to bail out Ireland and prevent the crisis from spreading to Portugal and Spain.

The hope of preventing other nations of falling in the downward facing debt spiral was however dimmed earlier this month after European leaders argued over yet another suggestion on how to deal with the growing debt crisis.

Another meeting is due to be held in Helsinki, Finland on the 4th of March where 14 Euro leaders will gather to prepare a comprehensive plan to respond to the crisis. T

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Last month, the seasonally adjusted annual rate for FHA loan applications fell to an estimated 1,450,900, the lowest January since 2007, according to the FHA Single-Family Outlook released this week.

The agency blamed severe storms throughout the country for part of the lull in applications – higher mortgage rates were probably to blame for the rest of the shortfall.

During the month, a total of 103,991 single family loan applications were received, including 55,417 for home purchases, 41,178 to refinance, and 7,396 reverse mortgages.

The total was down 7.6 percent compared to December and 17.5 percent lower than a year earlier.

Meanwhile 119,521 mortgages were endorsed during the month, including 63,887 purchase money mortgages, 49,167 refinances, and 6,464 reverse mortgages.

Endorsements were down 10.5 percent from a month earlier and 24.6 percent lower than a year ago.

At the same time, loan servicers reported to the FHA that 612,443 mortgages were in a serious default, yielding a default rate of 8.9 percent.

That was up slightly from 8.8 percent a month earlier, but down from 9.2 percent last year.

However, the FHA has already paid out 115,272 claims so far this fiscal year, 48 percent more than the 77,887 paid out during the same time last year.

Most of these claims were loss mitigation payments and a number of others were pre-foreclosures.

So far this fiscal year, the FHA has received 182 applications for its short refinance program and 363 applications for the Hope for Homeowners program, insuring 40 and 93, respectively.

Just 12 Hope for Homeowners applications were endorsed in fiscal year 2010 – Congress originally made available $300 billion for these types of loans, anticipating as many as 400,000 families would benefit from the loan program.