National Credit Report

As part of Fannie Mae’s loan quality initiatives, consumers could see their credit reports pulled and scores recalculated a second time just before closing. The idea is to close the credit reporting gap between the date the initial credit reports were pulled and the date of the actual closing, which could be well over a month. Fannie wants to know if you’ve taken on any new debt, which wasn’t disclosed on the first set of credit reports. New debt can change your debt to income ratio so that it becomes unacceptable.

Fannie Mae would also likely take into account any adverse changes to the credit reports and FICO scores caused by new inquiries, new accounts or new debt. And, don’t think it’s just new accounts they’re looking for. If you’ve charged a large purchase on your existing credit card, that’s also going to cause alarms to go off.

The good news is that any credit card debt that has been paid off within the past month would likely be reflected on your credit reports and taken into account in your scores, which could actually lead to higher scores the second time around. Now, whether or not your loan terms would be improved thanks to the second set of data is yet to be determined. It’s certainly much easier to just kill a deal because of degradation in your credit than it is to sweeten the deal because of an improvement.

One thing is for certain, the credit bureaus and FICO should be very pleased with this initiative. This likely means more credit reports and scores would be purchased, twice as many as in the past. And FICO and credit bureau revenue is largely a “units x price = revenue” model. This will certainly increase the units variable.

Filed under: Celebrity News, News

With the arrival of the new TBS show, ‘Are We There Yet?’ the black community is getting another option for network television viewing. We all know that black shows are rare these days, with few outside of the family sitcom genre even getting produced. There is much family fare on TBS now, including the shows created by Tyler Perry, ‘House of Payne’ and ‘Meet the Browns.’ But these two black sitcoms are based on what some perceive to be stereotypes of the African American family. The characters tend to be loud and animated, in scenarios in which dancing and jokes that are sometimes a little ignorant abound. We can only hope that ‘Are We There Yet’ will offer more balanced images of African Americans. But it is troubling that, despite our diversity of experience, the only new major black show in years is another sitcom.

There is always room for a good black comedy — but it’s sad that black shows have been limited to such a narrow form over the years, and often a vehicle for stereotypes at that. It’s true that the most successful black shows in history have been family comedies, including ‘The Jeffersons,’ ‘Sanford and Son,’ and ‘Good Times.’ At the same time, most of us can’t think of a serious black show that has been on the air for more than one season. Why? And what does this mean for the African American community?

Dr. Alvin Pouissant of Harvard Medical School said this about the state of blacks on television in an interesting article on FamilyEducation.com: “Overall, the position of blacks on TV is better than that of other minorities, but it is hampered by the racial conflicts and segregation that are embedded in American society. Historically, black actors have been grouped stereotypically and assigned to comedy and buffoonery.” That seems about right.

Much of the reason that network executives are more interested in black comedy is because they know that it is a recipe that works. Other types of unproven shows are risky. The money necessary to produce a show can be substantial. Networks put their money in places where they know they are going to get a solid return on their investment. And complex black shows are not the place. This puts the black community into a position in which quality shows like ‘The Game’ are canceled, while black family sitcoms are continually produced because they are like printing money — for giant corporations with no interest in supporting diverse African American representation. This lack of representation is harmful to the self-esteem of the younger generations, leaving an immense psychological vacuum. This not only harms young blacks, but encourages young whites to see black people in dehumanizing ways.

One solution to these issue is for more blacks to get into positions where they can make decisions regarding which shows are going to be picked up by the networks. There should also be a greater emphasis on media ownership and creation of the capital needed to finance quality programming. Another possibility is digital production, and Internet distribution, which African Americans can more easily control. The Federal Trade Commission may need to get involved to ensure that we have a more diverse set of shows on the air — fueled by more diversity in network executive offices. By pointing out the issues and analyzing them carefully, we might then be able to make government entities aware of the problems so we can start fixing them.

When it comes to diversity of the black experience on television, we should ask ourselves the question “are we there yet?” The answer to that question is a resounding “no.”

Lawrence Watkins is the Founder of Great Black Speakers. He is also the owner of speakers’ bureaus dedicated to Hispanic speakers and Christian motivational speakers. His book, “Frame Your Future: 8 Principles to Effectively Focus on the Future and Not Dwell in the Past”, will be released in August 2010. If you would like Lawrence’s articles delivered directly to your email, please click here.

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This is the third and final part of my interview with J.D. Roth, the publisher of the personal finance blog Get Rich Slowly and the author of Your Money: The Missing Manual, which was recently published by O’Reilly Media.

Your Money: The Missing Manual lays out a plan for getting out of debt, making and keeping a budget, and investing for the future. Really, the book is about how your financial decisions play a role in the larger goal of establishing a way of life that’s personally rewarding and meaningful.

(Here’s part 1 of my interview with Roth, where he talks about his decision to learn about personal finance, and about the importance of setting realistic and measurable financial goals. Here’s part 2, where Roth offers advice on curbing compulsive spending and designing a simple but useful budget.)

Mark: What should people know before buying big-ticket things like houses, cars, and vacations?

J.D. Roth: When you make these purchases I think it’s very important to A) do your research so that you know what you’re getting into and B) decide what is affordable for you and your budget and your situation, and use that as a guideline instead of what other people tell you. If you listen to your real estate agent or your mortgage broker, she’s almost always going to tell you that you should buy as much house as you can afford, and she’ll try to steer your towards the upper end of your budget range, and I think that’s a very dangerous thing. We saw with the recent mortgage bubble that when people bought at the top end of their range they got into trouble. I recommend aiming low. Aim for something modest that you know you can absolutely afford. That way if something goes wrong, you have the ability to fall back onto something manageable instead of having to stretch.

Mark: Could you quantify what "aiming low" means?

J.D. Roth: From everyone I talked to, those who are able to keep their housing expenses at 25 percent of their income are so much happier.

Mark: I believe it. One more question. You have a chapter about getting control of your credit cards. Could you summarize your advice on that subject?

J.D. Roth: There seem to be two opposing views on credit cards. One view is that credit cards are great. They’re convenient. They’re a way to get things you can’t really afford. This is the attitude I used to have when I was in my 20s. I saw a credit card as a license to spend, and I think that’s why so many people get in trouble with credit.

The other view is that you shouldn’t use credit cards at all. Credit cards are evil. Credit cards are wrong and there’s no way to use them responsibly because they’re rigged against you. When I started getting out of debt I kind of went over to that side. I was very anti-credit. Now I find myself in a third camp, and this is what I want to encourage readers to get to. It is possible to use credit responsibly and the key is to be very aware of what the terms of your agreement are.

I’m a big proponent of reading your credit card agreement, understanding what the terms are, and then to actually use the credit as if it were cash. For me, when I use credit, I don’t think, "Oh, I can’t afford this so I’m going to use the credit card to buy it." Instead, I think, "Do I have money for this in the bank?" And if I do, then the credit card becomes a convenience. It’s a tool to put all of my expenses in one place, and in my case I use a credit card that gives me 1 percent cash back so it’s as if I’m getting a 1 percent discount on everything I buy.

The credit card also offers some buying protection, but if I run into a situation where I don’t have the money in the bank, I’m not going to use the credit card to purchase it. I think that’s very important.

After you determine that you can pay cash for an item, you should ask yourself, "Would I pay cash for this item?" If you wouldn’t pay cash for it then why are you using credit?

Mark: That’s good advice. Thank you for taking the time to talk to me, J.D.

J.D. Roth:: You’re welcome.

Mark Frauenfelder – Editor-in-chief of MAKE magazine and the founder of the popular Boing Boing weblog, Mark was an editor at Wired from 1993-1998 and is the founding editor of Wired Online.

Filed under: Personal Finance, Dr. Boyce Money

Most Americans are not ready for retirement. Many of us will go broke during old age or find ourselves working until the grave. Let’s be clear: you have to be prepared. The government has borrowed its way into a hole from which it will never be able to emerge and Social Security is dying. So, whether or not our titanic is actually sinking, it doesn’t hurt to ensure that you have a good lifeboat.

Planning for retirement is very simple. You can think of it in three pieces: Your social security benefits, your pension and your retirement savings. You don’t have to save enough money to pay all of your bills, but you should ensure that you have enough saved to compensate for the difference between your financial needs and those being fulfilled by social security and pension plans.

Here are some things you can do to both prepare for retirement and ensure that you have enough:

1) Remember that you are going to live for a while after you stop working. As modern medicine finds more and more ways to keep us alive, we are going to live longer. What’s also true is that your life expectancy after you reach 65 is going to be higher than it was when you were born, mainly because you’re one of the people who made it that far. Therefore, your retirement may last 20 or 30 years, which means you have to have enough money to make it that far.

2) Pay off as many bills as you can before you retire. When you retire, you should try to make sure your home and car are both paid off. In fact, I recommend getting rid of almost all of your debt. This will keep your monthly expenses low and ensure that you at least have access to the basic essentials: food, shelter, and transportation.

3) Start saving early if you can. A person who starts saving $10,000 per year in a 401k at the age of 22, earning 8% per year in interest, will have roughly $3.2 million in their retirement account by the age of 65. A person who waits just 10 years and starts saving the same amount at the age of 32 is going to have less than half that amount. Getting an early start is critical when planning for retirement.

4) Don’t forget inflation. Remember that $50,000 per year might seem like a decent living now, but if you retire today and live for another 15 years, that same $50K won’t go so far. So, when you set up your retirement savings plan, make sure that you account for the fact that you are going to want your monthly income to grow by about 3 – 4% per year to keep up with the pace of inflation. Your financial planner can help you factor inflation into your estimates.

5) Don’t forget the medication. One thing that stinks about getting old is that your body starts to break down. Eventually, your medicine cabinet starts to look like a pharmacy. These drugs are expensive, and pharmaceutical companies could honestly care less if you are able to afford your medication or not. Be sure to budget in the cost of additional medical care as you get older, to ensure that this doesn’t bust your budget.

Remember: Most Americans are not prepared for retirement. So, to be sufficiently prepared, you should not do what your neighbors are doing, you should expect to do something different. Start saving right now, so you can be happy and independent during your golden years.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of the book, “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” To have Dr. Boyce commentary delivered to your email, please click here.

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Filed under: News

In part one of our series on Nollywood, we covered the history of the film industry in Nigeria. This week, we will be looking at the current movers and shakers expanding the seasoned industry into an international phenomenon. “What is sustaining the industry are the millions of people from Africa and the Caribbean, and African Americans that are willing to see movies about Africa.” This is what Jide Thomas, a distributor and investor of Nollywood films, recently told Black Voices. Thomas owns the website African Movie Place, a online marketplace for African movies. But how does the second largest movie industry in the world continue to grow? What are its best business practices?

Big Business

Credit: Jamati

In Nigeria, a film can sell 50,000 copies. Shot on digital cameras, these films go straight to DVD and VCD format. At about $2 dollars a disk, the films are both affordable for many Nigerians and profitable for producers. However, piracy often poses problems for both producers and distributors of Nollywood films. For distributors, it is a race against time to sell as many copies as possible before bootleggers get a chance to. Distributor Jide Thomas is constantly engaged in this race.

“If you don’t sell your 10,000 copies in a couple of days, the bootleggers take the market. And you have to release them before they release it in Nigeria. Because, once they release it in Nigeria, you’ve lost your market gauge.”

Thomas, who is based in New York, states that Nollywood films are especially popular among Caribbean woman in the U.S., however, some outside of Africa are yet to catch onto to the trend. For some, quality, the length of the films (often these films have at least two parts, sometimes more), and the amount of films that come out in a given year are a major turn off.

“The films are made for the African market and the dynamics involved in making the quantity is based on the African market. And where we don’t have 24-hour cable and other form of entertainment, it’s only natural for the films to be coming out in bulk like that. While people are complaining about the amount of movies, 50-70% of the movies that are produced in Africa, we don’t even see. The only thing that we see here are the movies made in the English language.”

The English-language films tend to do better internationally, however in Nigeria, the native language films (such as those shot in Yoruba) are the top sellers. United States and UK distributors often buy the marketing rights to English-language films.

The Future

Wilson Ebiye, CEO of RockCity Entertainment (producer of ‘Amazing Grace’), feels that to be a major player in Nollywood you need to produce more films that will go to theaters, rather than straight to video. His current project ‘Black Gold’, pairs him up again with friend and writer-director Jeta Amata. Ebiye produced the film, while Amata wrote and directed it.

Credit: RockCity Entertainment/Jeta Amata Concepts

“‘Black Gold’ is the first major collaboration between Nollywood and Hollywood,” states Ebiye. The film is a powerful story about the fight over oil taking place in Nigeria.

“The indigenous people, the people who produce the oil, they feel that the government hasn’t spent money developing the area. They feel that the multinational oil companies are just coming into their region to explore and exploit the land by taking the oil. So, basically the indigenous people rose up and formed a militant group. They took up arms against the government and the oil company.”

The film stars Billy Zane and Nigerian actor Hakeem Kae-Kazim.

“The film is helmed by a Nigerian. Jeta Amata wrote and directed the film. So, we know that he is going to do a good job about telling the story of our people, about how the people who are actually creating the wealth for Nigeria are being marginalized.”

Ebiye plans to widely release ‘Black Gold.’

Credit: RockCity Entertainment/Jeta Amata Concepts

“When we release the film in Nigeria, it’s going to be the most widely distributed film. We just have to think outside the box in order to make sure that we recoup the money that was invested.”

Ebiye feels that his innovative way of distributing the film, which he won’t reveal yet, will change the Nollywood game for the better. “It will definitely help the industry. What’s going to happen once this film comes out is that the other producers and directors in Nigeria are going to have to step up their game. Other producers, who are going to go make quality films in Nigeria, will benefit from the new distribution network.”

I’m confident that the Nigerian movie industry will continue to grow. I look forward to films that will depict the everyday realities of Nigerians and other continental Africans as well Africans in the diaspora. I hope that the films will not suffer from Westernization and instead retain the unique essence, which initially drew audiences to these films, which was the imagery of Africa and Africans from the perspective of Africans themselves. Imagine if Nollywood and “Black” Hollywood pooled its resources to invest in each other and command the images of Black people all over the world — using effective and proven economic models. Now that would be some real Black star power.

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Filed under: The Economy

America rejoiced at the election of President Barack Obama. African Americans took an unprecedented level of interest in American politics, and the world celebrated the possibility of peace. The end of the Bush administration even inspired the Nobel Prize committee to give its coveted award to President Obama, based on the mere hope that he might make the world a better place.

The world has changed a bit since then. The happy political bash of the election became the tired and draining after party, and the excitement has worn off. America is no longer drunk with the thrill of having an intelligent president. So, this takes us to one final question (inspired by our friend over at the Average Bro blog): Is life better or worse under President Obama?

I focus this article on African Americans, since that is the target audience of this Web site. But every American is asking that question right now, especially after living through one of the most tumultuous economic downturns in the past 50 years. The people in the Gulf region are probably not better off, as they are facing what many are calling the worst oil spill in U.S. history. This spill has destroyed the livelihoods of thousands who depend on the sea and tourism to make a living.

African Americans have a few yardsticks they can use to measure their quality of life during the Obama presidency. You might start with the unemployment rate. Black unemployment hovers around 16.5 percent for African Americans, compared with 9 percent for whites. This differential hasn’t changed since Obama became president, so perhaps it can’t be linked to his presidency. We can at least say that he hasn’t done much about it one way or the other, so those who expected Obama to change their lives significantly might end up a bit disappointed.

Another area where the well-being of African Americans can be measured is wealth. A recent report by the Institute for Assets and Social Policy showed that the wealth gap between whites and blacks actually grew during the past two decades. In fact, while the median wealth for whites, excluding home equity, grew from $22,000 to $100,000, the median wealth for blacks only grew from $2,000 to $5,000. Again, this is not Obama’s fault and it might be unrealistic to expect him to shrink the gap. But he can also be censured by the black community for not mentioning the gap as a priority in his administration.

Obama can be credited for creating opportunities for African Americans at the highest levels, especially those who attended Harvard and Yale. He has made some key appointments of African Americans in his administration, including Senior Adviser Valerie Jarrett and Attorney General Eric Holder. Also, psychologists at San Diego State University cited an “Obama Effect,” in which the test scores of black children improved as a result of his presidency. Therefore, it appears that the president’s success may have had a good psychological impact on the African American community.

Whether you think the Obama presidency has been good for black America probably depends on what you think about Obama himself. Most African Americans love him. His approval ratings are above 90 percent. He will probably go down in history as one of the most widely respected black men our nation has ever seen, and that fact won’t be easily changed.

But we ask you, the readers of Black Voices, do you think you are better off since the election of President Obama? Economically speaking, or perhaps socially or spiritually? Please leave your thoughts below. What would you hope the president can help us as a community achieve?

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Filed under: Personal Finance, Savings, Budget, Lynnette Khalfani-Cox

For years, my husband and I relied on Geico to insure our two SUVs. This business relationship lasted close to seven years, and even longer if you count the years that my husband used Geico before we were married. Our confidence in Geico was reinforced by everything from a cute talking Gecko and funny cavemen to a pair of giant eyeballs sitting on top of a heap of money — all while we jammed to a remix of Rockwell’s hit ‘Somebody’s Watching Me.’

Well, this relationship came to an abrupt end recently, when, during a round of home-budget cuts, we decided to check out auto insurance rates offered by competitors. As a Money Coach, I always tell people to comparison shop and to make sure they’re getting the best deal on the products and services for which they’re paying. And in this economy, who couldn’t stand to save more money? So my husband, Earl, and I routinely review all of our expenses, big and small, and break them into two categories: need to have and like to have. Obviously, the “like to haves” come under the most scrutiny. But sometimes an expense we deem as necessary might still be cut and replaced with a less expensive “need to have.”

Which leads me back to our review of the insurance we pay for month after month. I don’t know about you, but we’re insured up the wazoo. Life insurance. Health insurance. Homeowners insurance. Car insurance. The list goes on and on. And all these costs add up to thousands of dollars — per month.

I should add that we’re not living high on the hog, nor are we rolling around in fancy sports cars or late-model vehicles. I drive a 2002 Toyota Highlander; Earl drives a 2003 Chevy Tahoe. My car suits me just fine. I haven’t had a car payment in over five years, and my Highlander is perfect for shuttling around our three kids. As for Earl, he’s secretly lusting after a new Escalade, but that’s another story. For now, he’s content, too, with his Tahoe.

So after we logged on to the online insurance quote service NetQuote, we got a live response from a representative at a nearby Liberty Mutual office. My husband faxed over a copy of our declaration page from Geico and asked the rep for a competitive quote. Earl told the rep upfront that if the quote was not significantly lower not to bother sending over anything.

Later that day, we received a quote which appeared to be the same as Geico’s quote. But upon closer investigation, we realized that Liberty Mutual’s annual quote was the same as Geico’s quote for just six months of coverage. That worked out to nearly a 50 percent savings on car insurance. After doing a double take, and then triple checking everything, we promptly canceled Geico. And so far we are pleased with Liberty Mutual.

There are at least two lessons to be learned here:

1. Review your rates for services on a routine basis.
2. Don’t be afraid to try a new company’s services, even if you are already satisfied from the services offered by your current company.

I guess the last thing I learned from this is not to buy into marketing. Just because some company positions itself as the “low cost” leader in a certain category, doesn’t mean it really does always offer the best deal.

Lynnette Khalfani-Cox,

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Filed under: Professional Profiles, Celebrity News, News, The Economy

♦Oprah Winfrey’s Angel Network Charity to Close Down
Oprah Winfrey’s charity, the Angel Network, is shutting down as her talk show draws to a close. The network stopped accepting donations this week and said on its Web site that it plans to dissolve as soon as its remaining funds are disbursed. [The Huffington Post]

♦Leader of First Black-Owned Business to Go Public Dies
African American business community leader and former Parks Sausage Co. chief executive Raymond V. Haysbert Sr. has died at age 90. Haysbert, who led Parks, the first black-owned business to go public in 1969, and the Baltimore Urban League, died Monday at Union Memorial Hospital. [The Grio]

♦Court Says Black Firefighter Lawsuit Can Proceed
The Supreme Court ruled Monday that a group of African Americans did not wait too long to sue Chicago over a hiring test they challenged as discriminatory, freeing them to collect a lower court judgment. [The Network Journal]

♦Apple Overtakes Microsoft as Biggest Tech Company
Apple shot past Microsoft as the world’s biggest tech company, based on market value. It’s the latest milestone for the maker of the iPhone, which nearly went out of business in the 1990s. [Reuters]

♦Most Europeans swindled by Madoff get money back
A majority of the European victims of Ponzi scheme mastermind Bernard Madoff got their money back, their lawyers said Tuesday in New York. About 720,000 investors, or 80 percent of Madoff’s European clients, received a total 15.5 billion dollars after an agreement was reached with intermediary credit institutions, the lawyers said. Javier Cremades and Gaytri Kachroo told a press conference that most of Madoff’s victims overseas had been reimbursed. [Google News]

♦Michigan Incentives Transforming Motor City To Movie Magnet
With flicks like “Machine Gun Preacher” starring Gerard Butler, “30 Minutes of Less” by “Zombieland” director Ruben Fleicher, 50 Cent’s “Love Me or Love Me Not” and Dreamworks’ $80 million sci-fi flick “Real Steel,” with Hugh Jackman, all set to start production in Detroit this summer, one has to wonder if the state is really banking on the hosting gig. [The Atlanta Post]

♦Scientists prove even the thought of money spoils enjoyment
The idea that money does not buy happiness has been around for centuries, but now scientists have proven for the first time that even the thought of money reduces satisfaction in the simple pleasures of life. [PhysOrg.com]

♦Twenty-One Women Entrepreneurs Reveal Their Favorite Business Books
If you”re looking for some summer reading, take advice from the experts. We asked 21 women entrepreneurs what business books were most influential to them. Responses range from recent bestsellers like ‘The Four Hour Workweek’ to feminist classics such as ‘Games Mother Never Taught You.’ Read on to see what books Kathy Ireland, Nell Merlino and other women in business recommend. [Forbes]

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Credit repair is the process whereby consumers attempt to get negative but accurate information removed from their credit reports. Opinions vary on the practice. Some would have you believe that credit repair companies are scam artists. Still others would say that credit repair is as legitimate as hiring someone to change your oil, a service that you can likely do yourself but choose not to. Wherever you fall on the credit repair debate one thing is certain, they are here to stay. And in almost all states their services are perfectly legal as long as they follow state and Federal law, such as the Credit Repair Organizations Act.

One credit repair company boasts that they had over 1,000,000 negative credit entries removed on behalf of their clients in 2009. Others are not so bold with their success meters. The process involves submitting dispute letters to the credit reporting agencies asking for verification of credit entries. If the credit bureaus cannot confirm their validity they must remove them until confirmation is received. According to Stuart Pratt from the Consumer Data Industry Association, the trade organization of the credit reporting agencies, "Our members estimate that on average across our members operating as nationwide consumer reporting agencies, no less than 30% of disputes filed are tied to credit repair." This number is estimated to be greater than 15 million annually across all credit reporting agencies.

The fees charged to credit repair customers range from $39 per month subscriptions (and higher) to several thousand dollars as a flat fee. Some claim to have found the magic formula for getting negative data removed from credit reports yet boast websites that look like they were built by 7th graders. Some insinuate “insider” access at the credit bureaus, which would be a criminal act. And some insinuate to have found legal methods for getting negative data removed. And while non of these claims can be substantiated, there’s little doubt that the credit bureaus will find themselves dealing with credit repair companies for the foreseeable future, especially with lenders increasing their credit scoring requirements.

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.