Housing bill to shield firms modifying loans (Reuters)

Reuters - U.S. bankruptcy judges would get power to modify home loans and mortgages services who alter loans would win protection from bondholder lawsuits under a bill to be considered by U.S. lawmakers later this week, sponsors of the legislation said on Monday.

Democrat leader sees bankruptcy bill this week (Reuters)

Reuters - The leader of the U.S. House of Representatives said on Monday lawmakers expect to begin debating legislation this week that would let judges erase some mortgage debt for borrowers who file for bankruptcy.

Northern Rock bank to boost UK home loans (AFP)

AFP - State-owned British bank Northern Rock announced Monday that it would lend an additional 14 billion pounds (16 billion euros, 20.5 billion dollars) to would-be homebuyers in the next two years.

Freddie Mac investigates self over lobby campaign (AP)

AP - Lawyers hired by mortgage finance giant Freddie Mac are quietly investigating the firm's own $2 million lobbying campaign, The Associated Press has learned. The lobbying effort helped quash proposed new regulations on the company before the housing market collapsed.

Nationalized UK bank to expand mortgage book (AP)

AP - Britain's government is throwing nationalized lender Northern Rock back into the home loan business in a bid to spur the market for mortgages, a government official said Sunday.

Delphi salaried retirees fight benefit cuts (AP)

AP - Nancy Shade's father and grandparents had enjoyed the security of General Motors' benefits before they helped draw her to a job there, too. Now, the five-year breast cancer survivor is wondering how she'll afford her own health coverage if GM's spun-off parts maker, Delphi, terminates medical and life insurance benefits for salaried retirees.

Essential Tools for Your Retirement Toolbox

There are certain fact of life that are out of your control such as unexpected emergencies or changes in the political climate that will affect your retirement savings plans and strategies. It is difficult to plan for those unknowns; nevertheless you must make the best possible plan based on what you know. One of the biggest certainties in life is that one day you will retire. Retirement is an event that everyone dreams about but is too overwhelmed to plan for and avoiding the issue will not make it any easier. That’s why you need to be familiar with various financial tools available to you so that you may build the retirement savings plan to match the scope of your dreams and aspirations. Your investments do not need to be risky; you can easily invest your money in ways that are very safe, which will show a reasonable return over a long period of time. The investments that you ultimately choose will depend on your tolerance for risk and time horizon.

First consider the basic retirement savings tools, the Money Market and Certificates of Deposit (CDs). These are the safest retirement tools around and can be found at your local bank. Usually money markets and CDs are FDIC insured. The benefit of such instruments it that they can pretty much guarantee a return of your principal. I know what you are thinking; a retirement tool with a guarantee to never lose money? Sounds amazing, sign me up! Not so fast, although your deposits are guaranteed, the interest rates are pretty low. The biggest concern when using these tools is loss of value due to inflation. Since retirement is a long term goal and those who are already in retirement can expect to live twenty to thirty years, you need to make sure that the tools you choose are strong enough to beat inflation.

A bond is a financial tool you can use and have a better chance at beating inflation. There are various types of bonds that you can purchase. Bonds are similar to Certificates of Deposit. Instead of being issued by banks, however, there are many issuers of bonds. The safest bonds are issued by the Government and gradually increase in risk followed by Municipalities, and Corporations. The type of bonds that you decide to buy will determine the interest rate (yield) and term that is offered. Government and Municipal bonds have some tax advantages and are considered safer because they can always increase taxes to raise the cash they need to pay back their debts. Corporate bonds tend to pay higher rates to compensate for the higher level of risk. Each bond has a rating that can help you choose the right amount of risk and reward.

Stocks are another great tool for long term investments. Although stocks are considered the riskiest asset class, they have the best potential to beat inflation and help you achieve your retirement savings goals. Shares of stocks are essentially pieces of equity in the company you are investing in. Equity equals ownership like the equity in your house. Buying stock essentially makes you a fractional owner of the company you invested in. When the company does well financially, the value of your stock rises. However, if a company is doing poorly, your stock value drops. Even though there is a greater amount of risk, you can still purchase stock in sound companies and diversify in many different companies, industries, and regions domestically and internationally. By diversifying your stock holdings, you are lowering your risk.

Mutual funds can be as safe or risky as the investments they hold within. A mutual is like a basket with either a specific investments like stocks or bonds or it can be a mix of cash, stocks, and bonds all in one. A mutual fund is a way for a group of investors put their money together to buy stocks, bonds, or other investments. A fund manager typically decides how the money will be invested. Mutual funds are great tools for retirement savings plans because they allow you to invest relatively small amounts of money and achieve the greatest level of diversification which is essential to managing risk.

These are the basic tools you can use to construct a retirement savings plan. It is critical to do your research and put together a plan before investing your money for long term. Start as early as possible, save as much as you can, and stick to your plan. When researching mutual funds to invest in choose a fund that is well established, has a proven track record, and low fees. If you aren’t quite ready to take the risks involved with mutual funds or stocks, at the very least invest in bonds that are guaranteed by the Government.

Prudential to take 9.9% stake in China Life (AFP)

AFP - British insurance group Prudential Plc. Friday agreed to acquire a 9.9 percent stake in Taiwan's China Life Insurance, the two firms said after signing the deal.

Ask AP: Mortgage help, troops in Afghanistan (AP)

AP - You're struggling to make ends meet, but each month you manage to scrape together your mortgage payment, if just barely. Are there any programs out there that might help you lower your payments to something a little more affordable?

How the major market indexes fared Thursday (AP)

AP - Wall Street sold off again Thursday, driving the Dow Jones industrials to their lowest close in more than six years. Investors see no immediate end for the recession, already 14 months old, and have been unassuaged by the Obama administration's economic stimulus package and mortgage relief plan.

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