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Some days you’re just not up to a heart-thumping Spin class. Or maybe working out just isn’t your idea of a good time. Well, here’s some great news: You can melt away fat while having fun and without stepping foot in the gym. Try these eight no-sweat tricks for burning 100 calories while doing stuff you love (think gardening, hosting a party and playing with your pooch). Slimming has never been so enjoyable—or so simple!
5 Foods that keep you thin
It's true: Apples can help you stay thin. (Thinkstock)
"The word 'diet' is negative and implies people can go on and off them," said Jane Korsberg, a senior instructor in the department of nutrition at Case Western Reserve University in Cleveland.
Korsberg is one nutritionist who thinks it would be better to re-think the whole concept of dieting.
"'Diet foods' are confusing to many people," she explained. "What diet is the 'diet food' geared for? Is it low-calorie, low-fat, low-sodium, low-sugar, gluten-free, et cetera?"
Besides, many of the foods that specifically target dieters seem to rarely satisfy. Take those 100-calorie snack packs, for example, made to help people control calories. Those often don't even work, Korsberg says. After all, few people actually stop at only one pack.
You don't need fancy plans or complicated point systems to be thin. All you need to do is make smart food choices, watch your portion sizes and stay active.
"Learning to eat properly for a lifetime is more beneficial," Korsberg said. "The emphasis should be on choosing healthful foods every day and changing lifestyles for the better."
So instead of sticking to diet fare, fill up on nutritious, wholesome foods. And if you need some recommendations, you can start with these five options, which are among the many delicious foods that make a good addition to healthy eating while keeping you slender.
Apples
Apples are a good source of dietary fiber. Dietary fiber not only contributes to a healthy digestive system and reduced cholesterol, but it also benefits smart eaters by yielding no calories while keeping them satisfied.
And there's something else about the fruit that might help you feel full. A study in the journal "Appetite" found that when women added either three apples or three pears to their daily meals, they lost more weight than people who added three oat cookies to their diets -- even though the fruit and the cookies contained the exact same amount of dietary fiber.
Although the reason behind this finding may be a mystery, there is something to be said for the findings. According to Alan Aragon, a nutritionist and author of "Girth Control: The Science of Fat Loss & Muscle Gain," crunchy foods in particular can trick a person into feeling fuller. The act of chewing may send satiety signals to your body, he says, making you think you've eaten more than you really have and keeping hunger at bay.
Almonds
If you're looking for a tasty midday snack, a handful of almonds are a well-regarded option. A study in 2009 in "The American Journal of Clinical Nutrition" found that women who ate nuts at least two times a week were more successful at keeping weight off than those who didn't eat this food.
One particular favorite among some nutritionists is almonds, says Aragon. One ounce of this food contains only 167 calories, plus it packs roughly 6 g of protein and 3 g of fiber, both nutrients that can make you feel full. Furthermore, like apples, almonds are crunchy and require a lot of chewing, so they, too, can make you feel like you've eaten more than you actually did and keep you fuller longer.
Salmon
If you're uncertain about fish, there's no need to fear. Seafood can be part of a healthy diet. And there's some evidence that the fat in foods such as salmon can boost satiety levels, says Aragon. For example, a study published in the "International Journal of Obesity" found that when dieters ate salmon a few times a week, they lost about two more pounds than those who didn't include seafood in their meals.
And in spite of the mention of salmon's fat content, the food is relatively low in calories. One 3-oz. serving has just 175 calories. Salmon is a good source of protein as well.
Eggs
There's no doubt that protein, like fiber, has impressive satiating powers. And while eggs seem to have a bad reputation in some circles, there can be no contesting their ability to help keep your weight in check.
Research has shown that eating eggs at breakfast can help you fight weight gain all day long. A study reported in 2008 in the "International Journal of Obesity" found that when dieters ate two eggs for breakfast for five days out of the week, they lost 65 percent more weight than dieters who consumed a bagel in the morning. Although protein is likely to fill you up whenever you eat it, some scientists suspect that having more in the morning can keep you feeling fuller all day long.
Tomatoes
It's true that most veggies make for great diet fare. Non-starchy vegetables in particular, such as carrots, celery and spinach, are filled with fiber. Like other foods high in fiber, they can help keep you feeling satiated.
Plus, they're pretty self-regulating, says Aragon. You can't really overeat with nonstarchy vegetables. After all, how many baby carrots can a person eat without needing to dunk them in some ranch dressing?
So while there are many veggies that can help you stay slim, tomatoes might be a particularly good option because they're so tasty. And, besides, with that whole a-tomato-is-a-vegetable-no-it's-a-fruit argument, you might have forgotten all about eating them. One cup of cooked, red tomatoes contains just 43 calories, but tastes just as delicious as any number of high-calorie foods.
And that's at least half the secret, finding foods that are both healthy and tasty. The good thing is, they do exist. Over time, you'll discover what wholesome, filling foods you prefer, expanding your choices while shrinking your waistline.
(c) Livestrong.com, Kristin McGrath
5 Tax Friendly State for Retirees
(c) by Mary Beth Franklin
Where's the best state for you to retire? Here's a good place to start your search: These five impose the lowest taxes on retirees in the contiguous U.S., according to our research. All these retiree tax heavens exempt Social Security benefits from state income taxes. Many of them exclude government and military pensions from income taxes, too, or offer blanket exclusions up to a specific dollar amount for a wide variety of retirement income.
Although relocating to an income-tax-free state such as Florida or Texas may sound appealing, sometimes the best retirement destination is a state that imposes an income tax but offers generous exemptions for retirement income.
Once you narrow your search to a few key states, zero in on local taxes. Municipalities can impose hefty property taxes or other assessments, or they may layer local sales taxes on top of statewide levies. Federal taxes? If you claim the standard deduction, they'll be the same no matter where you live. But if you itemize your deductions, you'll be able to write off real estate taxes and state income taxes, reducing your federal tax bill and easing some of the pain.
#1 Wyoming
State Income Tax: None
State Sales Tax: 4%
Estate Tax/Inheritance Tax: No/No
Thanks to the abundant revenues that Wyoming collects from oil and mineral companies, its residents have one of the lowest tax burdens in the nation, according to the Tax Foundation, a nonprofit research group in Washington, D.C. There is no state income tax. The state sales tax is 4%, and counties in the Equality State can only add up to 1% in additional levies -- a very low ceiling. Plus, prescription drugs and groceries are exempt from state sales taxes. For most property, only 9.5% of market value is subject to tax, so a home worth $100,000 is taxed on $9,500 of assessed value.
#2 Mississippi
State Income Tax: 3%-5%
State Sales Tax: 7%
Estate Tax/Inheritance Tax: No/No
Mississippi offers a sweet income-tax deal for retirees. It not only exempts Social Security benefits from state income taxes but also excludes all qualified retirement income -- including pensions, annuities, and IRA and 401(k) distributions. Remaining income is taxed at a maximum 5%. In addition, the Magnolia State is home to some of the lowest property taxes in the nation. Residential property is taxed at 10% of assessed value, and seniors qualify for a homestead exemption on the first $75,000 of value. The statewide sales tax is 7%, and counties and cities may add up to 3% to the state rate. But prescription drugs and health care services are exempt.
#3 Pennsylvania
State Income Tax: Flat rate of 3.07%
State Sales Tax: 6%
Estate Tax/Inheritance Tax: Yes/Yes
True to its Quaker roots, Pennsylvania extends a friendly hand to retirees. It offers unusually generous exclusions from state income tax on a wide variety of retirement income. Pennsylvania does not tax Social Security benefits or any type of public or private pensions. Nor does it nick distributions from 401(k)s, IRAs, deferred-compensation plans or other retirement accounts. Remaining income is taxed at a low, flat rate of 3.07%. Food, clothing and medicine are exempt from state sales taxes. Property taxes can be high in the Keystone State, especially near larger cities, but rates vary widely. One caveat for the wealthy: Your heirs won't get off so easily. Pennsylvania is one of the few states to have both an inheritance tax, paid by the heirs, and an estate tax -- though it applies only when an estate is large enough to trigger federal estate taxes ($5 million or more).
#4 Kentucky
State Income Tax: 2%-6%
State Sales Tax: 6%
Estate Tax/Inheritance Tax: No/Yes
The home of the Kentucky Derby is a good bet for retirees. It exempts Social Security benefits from state income taxes, and it allows residents to exclude up to $41,110 per person in retirement income from a wide variety of sources, including public and private pensions and annuities. Personal income-tax rates range from 2% to 6%. A 6% sales tax is imposed at the state level only. Homeowners 65 and older qualify for a homestead provision that exempts part of the value of their property from state taxes. The Bluegrass State has an inheritance tax, but immediate family members are exempt.
#5 Alabama
State Income Tax: 2%-5%
State Sales Tax: 4%
Estate Tax/Inheritance Tax: No/No
Alabama is a tax haven for retirees. Social Security benefits, as well as military, public and private defined-benefit pensions, are excluded from state income taxes. Remaining income is taxed at the state's low rates, which range from 2% to 5%. Alabama also has some of the lowest property taxes in the U.S. Homeowners 65 and older are exempt from state property taxes, but some cities assess their own property tax. The only downside is sales taxes. Although the statewide rate is just 4%, cities and counties in the Yellowhammer State can impose their own levies, and together the taxes can add up to a whopping 10% or more in some cities. Food is taxed, but prescription drugs are not.
Red, White & Green: Eco-Friendly Tips for the Fourth of July
Image courtesy of Creative Commons
• BBQ
Smoke from all the barbecues emits a ton of pollution into the air and burns up resources. This year when you have a barbecue, consider using a natural gas barbecue. These barbecues are more energy efficient. In addition, buy some organic or natural charcoal lumps.
• Plates & Cutlery
Disposable plastic plates and cutlery are terrible for the environment and most of the time end up being left on the grounds of beaches and parks. This year, opt for bamboo plates or recycled plastic cutlery, plates and cups. Another alternative is to reuse some of the plates, cups, and cutlery you have at home!
• Fireworks
Avoid having your own fireworks show at home as it is very damaging to the air. If you want to watch some fireworks, go watch a show nearby. It is also helpful to talk to the city hosting the fireworks about eco-friendly firework methods.
• Food
When shopping for groceries, look out for local organic food. These products are chemical free and because they are produced locally, that means less resources were used in transporting them. Try to incorporate a bunch of veggie based items that are more eco-friendly.
• Fresh Air
Take your festivities outdoors! Get your family and friends together and celebrate during the day in the beautiful weather or at night when it’s cooler. You’ll all have a chance to enjoy nature and not have to worry about the energy costs associated with indoor facilities!
• Decorations
Every year, tons of decorations are used on this holiday. Instead of throwing them out after the holiday, save them! You can reuse them for next year (save money and trash).
(c) Lauren Sigler, Four Green Steps.com
Try These 17 Brain-Boosting Foods
1. Beef, extra lean: High in iron, a mineral that improves memory, alertness and attention span.
2. Beets: Contains phenylalanine, an amino acid that helps relay signals from one brain cell to another.
3. Blueberries: Excellent source of antioxidants and “anthocyanins,” compounds thought to help protect brain cells from toxins, improves use of glucose in the brain, and promotes communication between brain cells.
4. Broccoli: Packed with antioxidants and phytonutrients that help protect brain tissue from toxins.
5. Carrots: High in beta carotene and other natural substances that help protect brain tissue from toxins.
6. Chicken: High in tyrosine, an amino acid required for the production of the alertness chemicals dopamine, epinephrine and norepinephrine. When your brain is producing these, you think and react more quickly, and feel more motivated, attentive and mentally energetic.
7. Citrus fruits: Contain vitamin C and other antioxidants that help maintain sharp memory and help brain cells resist damage.
8. Edamame: Contains phenylalanine, an amino acid that helps relay signals from one brain cell to another.
9. Eggs: High in the B vitamin choline, which helps with memory.
10. Egg whites: High in protein, which can improve alertness by increasing levels of norepinephrine, which helps keep your brain at its sharpest.
11. Hot chilies: Contains the fiery-tasting chemical capsaicin. Capsaicin stimulates circulation, aids digestion, opens your nasal passages and, even better, sends a feeling of euphoria straight to your brain.
12. Legumes: Provide glucose to fuel the brain, and the fiber they contain slows the absorption of glucose, helping to maintain stable levels of energy and support alertness and concentration overtime.
13. Pork: Loaded with vitamin B1, which protects myelin, a fatty substance that helps facilitate communication among cells.
14. Romaine lettuce: High in folate, a B vitamin important for memory and nerve cell health.
15. Spinach: Packed with iron, which is involved memory, concentration, and mental functioning.
16. Tuna: Full of omega-3 fatty acids, which help build and maintain myelin.
17. Yogurt: A probiotic food that has been found in many studies to boost mental alertness
(c)
6 Simple Diet Game-Changers
Your Security At Risk
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What cops and crooks say you're doing wrong.
You're an easy target. That's what we heard when we talked to police, experts, and especially people who have spent time on the other side of the law. As vacation season begins, and crime doesn't take a holiday, these security missteps may surprise you -- or at least remind you what police dramas taught: Be careful out there. Here are the mistakes to avoid at home, with your electronics, and for your personal finances:
At Home
Making a break-in too easy
"About half of all break-ins aren't break-ins but walk-ins," says Bob Portenier, consultant, lecturer, and former burglar. "Families get in a hurry in the morning -- kids going to school, running late for work, doctors' appointments, what have you -- and forget to take that one or two minutes to check the doors and locks, usually on the back side. You have a pet, you let it out to do its business -- and then forget the security French door or sliding glass door."
Remember, don't forget to turn on your home alarm. In a security survey of 1,038 U.S. homeowners we conducted in February, 43 percent of people in our survey who had an alarm said they at least occasionally don't turn it on when they're not at home. Some other troubling numbers. Nineteen percent of people in our survey said they at least occasionally leave doors at home unlocked when they're out, and 26 percent of survey respondents said they at least occasionally leave windows unlocked when they're not at home.
![]() Photo illustration: Stephen Webster |
Leaving your garage door open
In addition to providing access to everything in the garage, the door most likely leads to an interior door and access to your house. That interior door probably isn't as strong as an exterior door. And once a burglar's in your garage, the neighbors can't see him.
Obscuring your house
Tall hedges and fences hide windows and doors, giving thieves cover to work, says Walter T. Shaw, former burglar and co-author of "A License to Steal."
Leaving valuables in sight
"When we targeted a house, we would approach the door and look in -- the quality of furniture, whatever there was -- to give us an idea of how these people spend their money," says Portenier. "So with mirror-tinted windows, it eliminates that."
Advertising a vacation
People often don't do anything to make the house look occupied, says Maj. Kurt Philipps of the Memphis police department. Lt. John Dzwlewicz of the New York City police department suggests this trick: Put some inexpensive kids' toys on the lawn. On Facebook, share news of your trip only after you return.
![]() Photo illustration: Stephen Webster |
Being carefree with keys
Leaving keys under the doormat or elsewhere outside the home is a risk that 12 percent of people in our survey say they often take. Another 7 percent say they do it occasionally. And 66 percent say they have given a key to someone other than a resident of their home.
And avoid hiding your car keys inside or outside the car. That just makes it easier for thieves to engage in a spur-of-the-moment theft, authorities say. Many of today's cars make it difficult to lock your keys inside. If you're concerned about that anyway, keep a spare in your wallet or purse. Eleven percent of people in our survey said they at least occasionally leave car keys in the ignition when parked. And 52 percent of people from non-metro areas in our survey said they at least occasionally leave their car unlocked outside.
Tossing prescription bottles
Prescription labels on pill bottles can contain important information such as phone numbers, doctors, and prescription numbers. Remove the labels and shred them. Also be careful with medical records. And also treat your benefit claims forms, insurance reimbursements, and even medical tests as confidential information and destroy them before discarding.
Thinking a gun is your best defense
Gun ownership is a controversial topic, but research has shown that homeowners with guns increase the risks in their home. Homeowners might make the mistake of not getting proper training and not securing their firearms. Thirty-two percent reported having a gun as a security measure. And 73 percent of gun owners thought it was very good or excellent for protection.
With Your Electronics
Using lazy passwords
It pays to make the passwords you use tougher to guess. Don't make it easy for hackers. That means never using passwords such as "welcome" or "password." Instead mix up letters and numbers to make for tougher encryption.
Falling for phishing
The e-mail that contains what looks like a link to your financial institution might be phony; cyber thieves will record your keystrokes as you enter passwords, giving them access to your accounts. Don't click on such links; type the correct Web address into the browser.
Running outdated software
![]() Photo illustration: Stephen Webster |
Always run the latest version of your browser, which will probably include better security features, says Kevin Mitnick, a former infamous computer hacker and now CEO of Mitnick Security Consulting, a computer-security business. And Mitnick says that when a software company such as Adobe tells you there's an update for your software, pay attention and run the update. Programs such as Flash and Adobe Acrobat are among the most exploited by cyber criminals.
Instant-messaging programs and media players are also targets. To make sure software on your computer is up to date, Mitnick advises running a program such as the free Personal Software Inspector.
For Your Personal Finances
Banking from a public computer
Keylogging malware that can capture account numbers, passwords, and other vital data is a risk that has been linked to use of open Wi-Fi connections and public computers such as those in hotel lobbies.
Using unfamiliar ATMs
Thieves have been known to put out-of-order signs on a legitimate ATM and set up nearby freestanding bogus ones that "skim" data from your card. ATMs located inside banks within view of surveillance cameras aren't risk-free, but they pose more challenges for crooks installing skimming equipment.
Two other important pieces of advice related to ATMs: Separate your PIN code from your ATM or debit card. Almost 1 in 10 people carry their code with the card, says ACI Worldwide, a payment systems company. And when typing your PIN into an ATM or card reader, use your free hand to shield the keypad from the view of hidden cameras or anyone nearby.
![]() Photo illustration: Stephen Webster |
Dropping your guard at gas pumps
Card-skimming at gas stations is likely to increase during summer months, especially in vacation areas, so use cash or credit cards at the pumps if possible. If you must use a debit card, select the option to have the purchase processed as a credit-card transaction rather than typing in your PIN.
Ignoring your credit or debit cards
Monitor your accounts at least weekly to spot and report unauthorized transactions as soon as possible. Use services offered by your bank or card issuer that can help protect you, such as an e-mail or text alert if a transaction occurs for more than a certain amount.
Abandoning your receipts
Many transactions, such as filling up your tank and making a debit-card withdrawal, leave a paper trail. Don't toss away receipts in the ATM lobby or leave them at the gas pump. Hold on to them until your transactions have cleared your bank account to make sure the totals match. Then shred the receipts if they have any information a thief might use.
Trashing your bills
Thieves harvest sensitive data from account statements and other financial documents placed in the trash and use them for ID theft, says Inspector Michael Romano of the U.S. Postal Inspection Service. Shred them first.
6 Ways to Stay Safer
1. Watch out for imposters
The fastest-growing scam in the past year has been imposter fraud, according to the latest annual report on consumer complaints from the Federal Trade Commission. Thieves claiming to be someone they're not (such as a friend or relative stranded overseas in need of cash to get home, a bill collector, or an employee of a government agency) use Facebook messages, e-mail, phone calls, and text messages to persuade people to send money or divulge personal information such as Social Security or account numbers. Last year, 60,000 people reported that they were affected by this form of fraud, up from just five cases reported in 2008.
2. Learn to parallel park
Car thieves are becoming more professional. They're stealing new cars by putting them on a flatbed tow truck, our expert says. Parallel parking hinders access to the front and rear of your car, making it difficult to tow. Also, be careful about whom you bump into at the grocery store, especially if your car has keyless entry and a push-button ignition. A thief with an antenna and a small kit of electronics can transmit your key's code to another thief standing near your car, allowing him to open it, start it, and drive it away.
3. Hide the stuff in your car
Don't leave electronics and other valuables visible inside your car. GPS units are less of a magnet these days; cell phones and laptops more so. Holiday gifts are a big target, so don't stack them up in the backseat. Is there a worse move? Yes. Leaving your stuff in the back of a pickup truck.
4. Change your PIN
Make it a habit to routinely change the secret code for your debit card or ATM card. That gives you better protection against any thieves or skimming schemes.
5. Keep a financial inventory
Once a year take out all of the cards in your wallet, make a list of the account numbers and contact information you'll need to cancel cards if they become lost or stolen, and hide it in a safe place, says Mark Rasch, a former Department of Justice computer-crime prosecutor who is a director at CSC, a business technology firm based in Falls Church, Va.
6. Change your Wi-Fi password
If you have a home wireless network, choose the highest-security option. That way your Web-browsing and financial transactions will be more protected. Go a step further and create your own administrative password rather than rely on a default password supplied by the router.
Mortgage rates at lows for year
(c)by Inman News™
Rates on 30-year fixed-rate mortgages averaged 4.71 percent with an average 0.7 point for the week ending May 5, down from 4.78 percent last week and 5 percent a year ago.
The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, and so far this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February.
Rates on 15-year fixed-rate mortgages averaged 3.89 percent with an average 0.7 point, down from 3.97 percent last week and 4.36 percent a year ago. That's a new low for 2011, but well above the all-time low in records dating back to 1991 of 3.57 percent, set in November.
Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 3.47 percent with an average 0.6 point, down from 3.51 percent last week and 3.97 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.
Rates on 1-year Treasury-indexed ARM averaged 3.14 percent with an average 0.5 point, down from 3.15 percent last week and 4.07 percent a year ago.
Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans remained well below last year's levels.
The MBA's Weekly Mortgage Applications Survey showed demand for purchase loans was up a seasonally adjusted 0.3 percent during the week ending April 29 compared to a week ago, and down 36.9 percent from the same time a year ago. Requests for refinancing accounted for 62.7 percent of all applications.
In an April 14 forecast, MBA economists said they expect rates on 30-year fixed-rate loans will climb to an average of 5.6 percent during the final three months of the year, and average 6 percent in the final quarter of 2012.
12 Foods With Super-Healing Powers
FICO to walkaways: You're on our screen
Will early-warning system make homeowners think twice?
(c) Ken Harney, Inman News™
Fair Isaac, developer of the ubiquitous FICO score, has a new warning for homeowners plotting a strategic default or walkaway: We can now spot you in advance. We've developed a black-box risk-identification tool that enables lenders and mortgage servicers to tag you months in advance -- and then pursue their own strategic measures to intervene.
The tool is so effective, according to FICO, that it can "capture nearly 67 percent of strategic defaulters" who are otherwise unremarkable and undetectable, paying their mortgages on time.
Sound a little spooky? Not for the major lenders who are working with FICO to install the new statistical risk-scoring model, aimed at some of the costliest and most perplexing defaulters in the marketplace: people who just stop paying on their loan abruptly, without ever previously being late, even though they have the income to pay.
Strategic walkaways are a multibillion-dollar headache to banks and investors. A study by researchers at the University of Chicago's Booth School of Business found that during last September alone, 35 percent of mortgage defaults in the U.S. were strategic -- up sharply from 26 percent in March 2009.
With an estimated 23 percent of all residential mortgages underwater as of March of this year, according to data from consulting firm CoreLogic, spotting -- and dealing with -- walkaways has become a high priority for the biggest banks.
Walkaways are also more than a slight concern to default risk-scoring giants like Fair Isaac and Vantage Score LLC, the joint venture created by the three national credit bureaus: Equifax, Experian and Trans Union.
Both companies have been stunned to find that the very consumers they deemed the least likely to go into default -- people with 800-plus FICOs and 900-plus Vantage scores -- are statistically more likely to default strategically, with no outward signs of impending payment stoppages, than the lower-scoring masses.
People with low FICO scores still default more often than high scorers, but when high scorers do default, they are far more likely to do so out of the blue. In the lowest score category (300 to 499) more than twice as many people default nonstrategically -- they begin missing payments over time, typically because of income declines -- than strategically.
These walkaways are especially vexing to score-modeling experts like Andrew Jennings, Fair Isaac's chief analytic officer and head of FICO Labs. "They open up new credit accounts" before stopping their mortgage payments, he told me in an interview last week. "They prepare."
They intentionally default on their mortgages in part "because they believe it is in their best financial interest, and because they believe the consequences will be minimal," Jennings said.
Jennings supervised Fair Isaac's work in developing a special tool that pinpoints likely strategic defaulters while they're still cocooning and haven't yet revealed their intentions to lenders.
Some of the research involved examining massive samples of credit bureau data -- 5 percent of all U.S. mortgage accounts -- during a recent one-year period, looking for telltale clues, month by month, that would separate out strategic defaulters from ordinary defaulters.
What the project turned up, said Jennings, helped formulate the model that FICO has now created for lenders and servicers.
So what's in the black box? Obviously the complex statistical model and exactly how it works is proprietary. But Jennings said it looks at a composite of separate risk factors from credit and real estate databases, and enables servicers to identify borrowers whose profiles match those of strategic defaulters most closely.
Some of the key characteristics include:
--How long have the borrowers owned the house? The shorter the time span, the higher the risk.
--Are they good to excellent managers of their household finances and credit relationships? Do they make modest and responsible use of credit cards and other revolving debt? Do they pay their accounts on time as a rule? Do they rarely, if ever, go over the limits on their cards -- or even come close?
--Have they departed from their past credit usage patterns in recent months by opening up multiple new accounts?
--Based on local property-value indexes, is it likely that they have slipped into negative equity territory? Remember: How deeply underwater is only a moderately predictive factor. Lots of owners whose properties are worth far less than their mortgage balances do not strategically default, but keep plugging away paying every month, while borrowers who fit the FICO strategic defaulter profile may be only slightly underwater but still walk away abruptly.
By the way, location is not a key factor in the equation. FICO found that 40 percent of all strategic defaulters live in "recourse" states where lenders can -- and do -- pursue defaulters for any un-recovered debts following a foreclosure.
Of course, the model cannot peer into would-be walkaways' minds and motivations. "We're not trying to explain their psyches," Jennings said, "but you see the patterns" and certain borrowers' profiles light up like flashing neon signs.
The top bracket of high-risk homeowners identified by FICO's new model are 110 times more likely to strategically default than other borrowers -- even though they otherwise appear to be solid customers, according to Fair Isaac.
Armed with these risk profiles, what are banks and servicers likely to do as they scan their portfolios? Fair Isaac recommends that they intervene early with what it calls "pre-delinquent treatments."
These include contacting high-risk borrowers to warn them about the consequences of strategic defaults: Their credit scores will tank by 150 points or more, they'll be hampered or penalized in applications for rentals, employment, car loans or leases, and they can forget about buying another home for at least several years, possibly as long as seven.
If they live in a state that allows deficiency recoveries, servicers will probably emphasize their determination to do so in the event of any default.
Will all this work? Major banks and FICO think it should help. The jury is out at the moment, but if the early detection concept is valid, who knows?
Maybe it will cause some homeowners to think twice and discourage them from taking that first, crucial step: Secretly plotting their walkaway, months in advance.
Displaying blog entries 21-30 of 219







