Equity

IF YOU HAVE private mortgage insurance, you could be on the verge of getting important new federal consumer protections designed to prevent you from being hit with abusive overcharges on premiums.In rapid succession last week, legislators in both the Senate and House introduced bills that would force all lenders for the first time to disclose to borrowers how and when they can cancel their mortgage insurance coverage. One bill, the Homeowners Protection Act of 1997, would go even further: It would require that private mortgage insurance be terminated automatically whenever the borrower's loan balance is equal to or less than 80 percent of the value of the home at the time the loan was closed.

A federal program to aid seniors in need of cash has yet to make it into the mainstream. But those involved with reverse mortgages, which let seniors tap equity in their homes, say the concept is gaining ground. With reverse mortgages, homeowners at least 62 years old with low mortgage balances can borrow money through private lenders to pay bills, make home improvements or even take a vacation. In contrast with a conventional loan, the money doesn't have to be paid back until the owner moves or dies, and lenders cannot foreclose on the properties.

Jeff Ciesla had watched people making money in the real estate market long enough. So, when he and his wife, Quinn, recently decided to trade up to a larger home, he made his move. Instead of putting their Canton rowhouse on the market, the couple cashed out $22,000 in equity to buy a Harford County townhouse with double the space and kept their city house, betting that its value would continue to grow. "We had the conversation of wanting to buy a big single-family home, but we'd basically pay the mortgage and be house poor," said Jeff Ciesla, 29, a pharmaceutical sales representative.

More people than ever are applying for reverse mortgages as the financing plan gains popularity and lenders work to change a stigma sometimes attached to the loans. According to statistics from the Department of Housing and Urban Development, during the first five months of the 2004 fiscal year the number of reverse mortgages nationwide increased 112 percent to 12,848 loans from the corresponding period a year earlier. In the Baltimore area during the same five-month period, there was a 119 percent rise in reverse mortgages to 138 loans compared with the 2003 period.

The home is the castle. The rock. Something not to be put into jeopardy. For many older homeowners, after mailing in 30 years of monthly mortgage payments and paying off a house, the last thing that they want to hear about is a mortgage.But more and more older Americans are finding that a relatively new product -- the reverse mortgage -- is allowing them to use their home to increase their quality of life and, in some cases, help them overcome financial strains."I didn't want a cruise, that's not for me, but I love my house," said Elizabeth Tanner, 84, of Glen Burnie.

WHO SAYS American families are hocking their homes to the hilt, racking up new debt to pay off credit cards and auto loans?A major new study of the housing debt loads carried by Americans suggests that many homeowners don't fit that mold:Nearly 40 percent of all homeowning households now have no mortgage debt -- no first deed of trust, no equity line of credit, no second mortgage.Nearly one of five homeowners between ages 18 and 34 has no mortgage debt. Half of all homeowners between ages 55 and 64 have zero debt against their houses.

The top executives of T. Rowe Price Group Inc. saw their compensation rise last year, the Baltimore-based investment firm reported. CEO James A.C. Kennedy earned $8.4 million in total compensation last year, a 7 percent increase over 2011 and Brian C. Rogers, Price's chairman and chief investment officer, earned $8.3 million in total compensation, an 8 percent increase from 2011, the company reported in a recent filing with the U.S. Securities and...

There comes a time for every trader to tally the bets that paid off, revalue the stinkers and recalibrate assumptions according to changing facts. Mutual funds do this every day. Banking companies, which still hold subprime mortgage bonds that are vastly overvalued on their books, don't do it often enough. Business columnists, if they are honest and faithful, mark their beliefs against reality every few months, if only to themselves. When they stop writing a semiweekly column after more than a decade, however, perhaps the reckoning should be explicit and public.

RATINGS: IDC Financial Publishing Inc. [Box 140, Hartland, Wis. 53029] based its 1994 second-quarter ratings on the financial reports filed for the three-month period ended June 30 with the Federal Deposit Insurance Corp. IDC then calculates 38 financial ratios and compares those values for the various banks and produces a single rating for each institution. The chart also shows the rating of the previous quarter.The rating of individual bank performance falls into six categories. The ratings categories are: 300-to-200, superior; 199-to-165, excellent; 164-to-125 average; 124-to-75, below average; 74-to-2, lowest ratios; 1, rank of one, (highest failure probability)

IF YOU'RE ONE of the millions of American homeowners with an active credit line tied to the equity in your house, the odds are strong that you're not using the money to fix up your property, pay for college tuitions or invest in a business venture.A new national study of home-equity borrowers reveals that, while home improvement used to be the main reason people took out home equity loans, borrowers now tap their real estate equity primarily to pay off high-cost credit cards, charge account and personal loan balances with lower-cost, tax-deductible home equity dollars.