In this issue of Home Base:

A much more robust HARP program is needed.

In his State of the Union speech, President Obama announced legislative initiatives to significantly expand the Home Affordable Refinance Program (HARP) program, in order to help underwater homeowners save money by reducing principle balances and refinancing their mortgages at today’s historically low rates. “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape.” he told Congress.

The existing HARP 2.0 program has been in effect only two months and early reports suggest that it is unlikely to reach its goal of one million refinancings. President Obama’s proposal would allow all underwater borrowers to refinance. The current program expires at the end of 2012 and applies only to those with government-backed loans (Fannie and Freddie hold about 60 percent of the nation’s mortgages). The initiative could cost as much as $10 billion and help up to 2 million at risk homeowners. According to Zillow.com, 28.6% of single-family homes with mortgages (about 15 or 16 million homes) are currently in a negative equity position.

The President’s proposal faces major challenges on several fronts. The first is the federal deficit. The majority of voters support deficit reductions. Unless the Administration is willing to propose cuts elsewhere and/or enact new revenue sources, it will be hard to fund the initiative. A potential new revenue source is a millionaire’s surtax, which the President also proposed in his State of the Union address.

Even though it is supported by a majority of voters, the millionaire’s surtax is heavily opposed by Republican legislators, which points to the second major challenge to the proposal. We’re in an election year, which only make it harder for an increasingly divided Congress to agree on any policy issue. The third challenge is that mortgage lenders and servicers will oppose mandated write downs of their mortgages. Even though those write-downs would effectively only require that lenders mark their mortgage assets down to their true market current value, this could create a significant threat to the financial sector’s viability and to economic recovery. One of the reasons that some lenders have shown forbearance in foreclosing on troubled homeowners is that they are still carrying those mortgages on their books at their current balance levels. If they foreclose and sell at a loss, the balance sheets of many major banks will be severely weakened, which could lead to another financial crisis.

In his SOTU address President Obama also announced a new joint federal and state initiative to seek criminal charges against senior mortgage lender and financial service firm employees who have violated the law. “This new unit will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans.” the President noted. The Justice Department will head up the effort with a team of 55 attorneys, agents and analysts. The group also will include representatives from HUD, the Consumer Financial Protection Bureau, the Department of the Treasury, and the FBI.

“This effort is overdue.” said American Homeowners Grassroots Alliance President Bruce Hahn. “Many guilty savings and loan executives went to jail as a result of their illegal actions which helped precipitate the S&L crisis in the 1980’s. We haven’t had serious problems in the S&L sector since. Throwing some of the current bunch who also violated the law in the slammer should have a similar salutary effect.”

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How to celebrate many more Valentines Days in the Future.

February is known to be about hearts, but not just the kind Cupid aims for on Valentines Day. It’s also National Heart Month, and a great time to learn about taking the best care of your body’s most important muscle. Here are some important facts that you may not know, and tips you can use to keep your heart healthy:   

Heart disease is the leading cause of death in the United States. Over time it can cause a heart attack, and many people are unaware of the warning signs—which can be rather mild. Chest pain or discomfort, pressure or squeezing, along with shortness of breath, and nausea, are all symptoms of heart attack. Although not everyone who has a heart attack experiences the same symptoms, it’s important to take notice and know what to look for in order to get proper help quickly.

Risk factors such as age and heredity cannot be changed, so be sure to see your doctor regularly and make sure they know your family’s history of heart problems.

Heart issues are often associated with men, when in fact 1 in 4 women have heart disease. Being overweight, a smoker, or inactive all contribute to heart disease. Luckily, you can prevent these risks by making good food choices, quitting smoking, and getting more exercise. While this can sound daunting, making small daily changes can go a long way: avoid adding salt to your food, gradually cut back on cigarettes, and make an effort to take a walk each day.

Diets that are high in fat can lead to elevated levels of cholesterol in your blood, which can cause heart complications by creating blockages in your arteries. There are medications to help with high cholesterol including statins, bile acid sequestrants, fibrates, and niacin. Each has potential side effects, so talk to your doctor to devise a plan for what will work best for you.

For more information on heart disease and other health matters wherever you are, download the free Medlineplus mobile app and visit Publications.USA.gov’s health section.

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Facebook has also changed it's privacy rules.

Google has caught a lot of flak from consumers over the years, and the nation’s antitrust agencies have also been investigating possible Google antitrust violations. The American Homeowners Grassroots Alliance has been among Google’s leading critics. “The problem is that Google doesn’t consult other stakeholders before making decisions that affect privacy and competition” AHGA President Bruce Hahn observed. “They do their analysis based completely on the bottom line impact on Google, so of course they often don’t notice that their decisions can harm others.” Despite AHGA’s complaints Google is still putting photos of people’s homes on Google’s Street View without first seeking the homeowner’s permission. Embarrassing personal photos of homeowners taken without their knowledge have gone viral, and Google’s Street View provides a great scouting tool for car thieves looking for late model cars in people’s driveways, or burglars looking for homes whose access is well screened by landscaping.

The Federal Trade Commission has been investigating Google for possible antitrust violations for some time. In giving preference to content from its social networking site Google+ in Google’s search results, it gains an advantage over competitors such as Facebook and Twitter. As a result users might receive ads in Gmail that resulted from YouTube videos they have seen. Even conservative Republican legislators are raising their eyebrows at Google’s recent actions. Representative Marsha Blackburn (R-TN), castigated Google for trying to "eradicate consumer choice" which might "unilaterally and unnecessarily invite even broader government regulations on everyone else."  AHGA supports the FTC's decision to include the search changes in its probe.

In January Facebook also announced changes in its privacy policy. Beginning in February it will share user information from Facebook ‘s Timeline format across its various services. That decision has also lead to a public outcry could result in an interesting outcome in the future. Last month powerful corporate lobbyists who supported changes in federal laws affecting Internet privacy got their comeuppance . A groundswell of public opposition by Internet consumers deluged Congress and stopped the legislation in its tracks. What if Facebook and Google users employ their social networks to put pressure on Congress to tighten privacy laws affecting both of them?

That could be interesting, but we’ll have to wait and see. In the meantime Timeline is becoming mandatory, which gives Facebook users a brief period to clean up their profiles before the switch. Timeline will then make links, photos, and personal thoughts from prior lives much easier to find. If you don’t want those frat party shots from your college days floating around, you might want to remove them soon. Like right now.

Highlight stories will be most visible but all story content will be accessible. Use the Years tool to search specific time periods that you might want to clean up. It is possible to limit the audience on any individual photos or piece of content. Just go to the post your want to change and select the appropriate audience. Also keep in mind that Facebook accounts are forever. If you have one that you haven’t used in a while you might want to clean up or delete your Facebook files now.

Make sure those who aren't friends can't see your stuff. Remember anything on the site, such as your date of birth, will be in cyberspace forever. Click “Limit Old Posts” to limit Timeline only to friends. Also make sure that your whole Facebook profile is only viewable by your friends. (Use the View As tool and click Public.)

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Scammers are using the opportunity to go phishing.

The Internal Revenue Service receives thousands of reports each year from taxpayers who receive suspicious emails and phone calls claiming to be from the IRS. Many of these scams fraudulently use the IRS name or logo to make the communication appear more authentic and enticing. The goal of these scams – known as phishing – is to trick you into revealing your personal and financial information. The scammers can then use your information – like your Social Security number, bank account or credit card numbers – to commit identity theft or steal your money.

Here are five things the IRS wants you to know about phishing scams.

1. The IRS never asks for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts.

2. The IRS does not initiate contact with taxpayers by email to request personal or financial information. If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site:

• Do not reply to the message.
    
• Do not open any attachments. Attachments may contain malicious code that will infect your computer.
    
• Do not click on any links. If you clicked on links in a suspicious e-mail or phishing website and entered confidential information, visit the IRS website and enter the search term 'identity theft' for more information and resources to help.

3. The address of the official IRS website is www.irs.gov. Do not be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on the suspicious site and report it to the IRS.

4. If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence.  You can forward a suspicious email to phishing@irs.gov.

5. You can help shut down these schemes and prevent others from being victimized. Details on how to report specific types of scams and what to do if you’ve been victimized are available at www.irs.gov. Click on "phishing" on the home page.

1. The deadline to file your taxes this year is April 17. The deadline is pushed back two days because of the weekend and Emancipation Day, a Washington, D.C. holiday. If you can’t make this deadline, you can request an extension and file your taxes later, however, if you owe money, you still need to pay by the April 17th deadline.

2. If you think you could use some help filing your taxes, find out if you’re eligible for free tax counseling. The elderly, military members and their families and people with low to moderate incomes may be eligible for free tax counseling. The IRS has trained tax counselors who might be able to answer your questions.

3. The IRS makes it easy to file your taxes online using the e-file system. The benefit to online filing is that it’s free, it reduces the risk of making a mistake and it lets you get your refund more quickly.

4. If you decide you don’t want to file online and would rather submit a paper return, make sure you have all the forms you need. You can download them online from the IRS or may also be able to find them locally at your post office, credit unions, office supply or grocery stores. You will also find instructions to fill out the forms that you can read online or download to a Kindle device.

5. Once you’ve filed your taxes, you can track your refund status easily to find out when you’ll get your money. If you e-filed you will be able to get your refund information 72 hours after the IRS receives your information. If you filed a paper return, you can check your refund status in three to four weeks. You can also check the status of your refund using IRS2Go, a mobile app available for iPhone and Android devices.

By following these five tips and getting your return in early, you’ll be able to watch your refund roll in and avoid that last minute scramble.

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The federal income tax debate grows more heated.

In his State of the Union speech, President Obama said that “If you make more than $1 million a year, you should not pay less than 30 percent in taxes.” He justified his position on the basis of fairness and economic priorities. Most voters agree that it is not fair that a millionaire should have a lower tax rate than his secretary. The President added that those tax breaks “either adds to the deficit, or somebody else has to make up the difference.”

Opponents of the millionaire’s surtax argue that the problems of the poor wouldn’t be helped much by taxing the rich. They correctly point out that it won’t provide enough revenue to begin to address the myriads of challenges they face. Instead, many critics point out, we need to modify the U.S. tax code to encourage future economic growth. Cutting U.S. corporate tax rates would help the recovery and encourage job creation, and the lack of available jobs is a big factor in driving income inequality. This is a good point, and the President’s State of the Union address did call for some corporate tax cuts. It also called for some corporate tax increases primarily intended to repatriate jobs back to the U.S. While President Obama’s intentions in the latter regard are good, there is a real chance that his proposed corporate tax increases could have the opposite effect.

Most voters also strongly support deficit reduction, and for many voters this is an even more important national priority than tax rates. Mitt Romney has proposed substantial federal spending reductions. All the details aren’t yet available, but if all nondefense programs were reduced proportionately to achieve his targets, we would achieve an across-the-board spending cut of 17% in 2016, according to the Center on Budget and Policy Priorities. Many taxpayers are willing to bear their fair share of those cuts.

Mr. Romney also proposes reductions in taxes on the wealthy, and if that would also help economic recovery they would deserve our support. Unfortunately history shows that there is no correlation between the tax rates on the rich and economic prosperity. Marginal individual income tax rates have steadily declined over the last 60 years - from 90% during the Eisenhower era, to 70% during the Nixon era, to 50% at the beginning of President Reagan’s term, and to the approximately 15% effective tax rate paid by Mr. Romney in 2010. Over that same period, the economy has swung back and forth many times. Personal income tax rates clearly have little or nothing to do with overall economic performance, business investments, or employment.

When fully implemented and if it applied across the board, Mr. Romney’s economic plan would cut Social Security benefits by 17%. A retiree’s monthly benefit would be cut by $210, pushing more than 2,600,000 into poverty. His tax proposals would save Mr. Romney about $2.5 million in 2013 (assuming no changes in his income or in other U.S. tax laws, according to Citizens for Tax Justice). To plug the $2.5 million Romney tax cut deficit, 11,905 social security recipients will each have to take a $210 whack, and of course millions more will have to do the same to actually reduce federal spending. Many social security recipients may not consider the impact of Mr. Romney’s economic plan on his own balance sheet as their idea of “sharing the burden.”

The reality is that every penny we can find for deficit reduction and/or cutting corporate tax rates is needed. Since individual rates don’t impact the economy and most voters agree that Mitt Romney and Warren Buffet should not be paying lower tax rates than their secretaries, why just settle for President Obama’s 30% millionaire surtax? Why not just go back to the Eisenhower era and restore the 90% marginal personal tax rate on the very highest earners, such as Mr. Romney and Mr. Buffet? Then, no one would be able to accuse the wealthy of not doing their fair share to help the recovery, and far fewer would complain far less about being asked to do our fair share as well.