A ThinkGlink reader is thinking about paying off his mortgage before he retires later in the year. Ilyce explains why refinancing the mortgage would be better due to the large tax bill he would have to pay to remove money from his retirement account.

By Liz Morris

American Express announced a new program today that would allow mortgage payments to be charged to its credit cards for the first time.  The program will begin with just a single mortgage lender partner, American Home Mortgage, but should spread to additional partners in the future.

The Express Rewards Mortgage program, as it is known, will be open to good credit customers opening a new mortgage or refinancing an existing mortgage. While the program will thus allow American Express cardholders to earn Membership Rewards points on their mortgage payments, the attraction may be blunted somewhat by the fact that a $395 fee is required to join the program. A mortgage holder paying $1,000 in mortgage payments might need three years to break even given the initial fee.

American Express has previously made its mark in the housing payments arena by allowing rent payments and condo down payments to be charged in limited areas, usually within the luxury segment of the real estate market.

By Justin McHenry

Government officials continue to turn up the heat on credit card companies.  After being dragged in front of multiple Congressional hearings and seeing a new bill introduced that would force a plethora of changes to the way they do business, credit card companies today got a kick from the Federal Reserve, which proposed changes to the rate and fee  disclosures that card companies provide consumers.

The Fed conducted a number of surveys and focus groups in the recent past, and came up with a list of suggestions that the Board feels would help consumers better understand card terms, as well as give them the opportunity to compare cards more intelligently. Among those suggestions:

• Credit card companies would have to give 45 days notice when making changes to credit card terms, compared to the current 15 days.
• When card terms are changed, card companies would send out notices that clearly spell out what has been changed from the original agreement, versus the common practice today of simply sending out a new document spelling out all the terms and conditions of the card.
• Changes to card terms would be included on the monthly bill itself, versus a separate insert that is often ignored by consumers today.
• Disallow describing cards as “fixed rate” unless a specific time frame is spelled out. Today cards can be called fixed rate but card companies can change the rate with the 15 days notice mentioned above.
• Change disclosure language concerning the rate cardholders would pay if they are late with payments, go over their card limits, or other behaviors that trigger a higher rate.  Today this higher rate (which is often over 30%) is called the “default APR.” This would be changed to the “penalty APR.”
• Redesign the “Schumer box,” the large grid-like box that currently shows information such as interest rate, annual fee, days in a billing cycle, etc. to include more information on fees and penalty interest rates, information that today is often described below this box.

All of these changes are proposed amendments to Regulation Z, which came about with the Truth in Lending Act of 1968. The Federal Reserve Board is looking for public comment on the proposed changes, allowing at least 120 days for that process.  When final decisions could be expected was not announced, but given the comment period, it would be fall of this year at the earliest.

A ThinkGlink reader purchased a newly built home 4 years ago and now has water in her basement. Ilyce explains the various issues the homeowner needs to consider before suing the developer.

A ThinkGlink reader owns 12 rental houses and is setting up 12 separate LLCs. Ilyce and Sam explain why this complex arrangement may not be the best idea for this real estate investor.

A ThinkGlink reader would like to add his partner as a 50 percent owner to a condominium. Ilyce and Sam explain the best way to proceed.

A ThinkGlink reader would like to quit claim his property to the IRS. Ilyce explains that he will have to sell the property and pay the IRS from the proceeds.

ThinkGlink reader is planning how to divide her property among her children when she dies. Ilyce explains why a trust will be her best option.

A ThinkGlink reader is in the process of getting a divorce and would like to lower her mortgage payment. Ilyce explains how this divorcee should plan for her future.

Maintenance free communities are becoming increasingly popular. Ilyce discusses the never ending need to maintain a house.