Lending standards have tightened and some types of loans may be difficult to get.
It is true that credit availability dramatically tightened since the coronavirus crisis hit hard in February 2020. Credit supply was down 30 percent. With millions out of work, some could no longer afford to pay their mortgages. That meant lenders had less money to lend at a time when they were also not receiving payments on existing loans.
Since February, the situation has somewhat improved. While credit supply for conventional loans dropped 6.9 percent in May, it rebounded in June to just a one percent drop.
With renewed talk of coronavirus increases, lenders of all types have tightened limits and availability in anticipation of possible job losses.
One good sign of an improving economy is that mortgage applications rose 2.2 percent for the week ending July 3 over the previous week. Forbearance rates (the number of mortgage holders who can’t pay and have to make an arrangement with the lender) dropped 8 basis points to 8.39 percent in the first week of July. That means more mortgage holders were able to make their payments.
The news for buyers with cash for down payments and high credit scores, is the incredible 3.26 percent mortgage interest rate on a 30-year fixed rate loan.
People with a credit score of at least 700, with a 20 percent down payment, should be able to get financing. Lenders have cut back on jumbo loans, which are generally loans of more than $510,400.
Category: General
Small business responds to Covid-19 crisis
So, now what?
Their stores closed. The offices vacant. Their income limited.
Small business had to answer the question of what they can do right now.
And, for the most part, they did.
About 92 percent of small business owners reinvented themselves, according to Small Biz Trends.
Digital technology was the answer for many small businesses.
- 58% created new online delivery channels.
- 40% created a new virtual service.
- 36% made a new offline delivery channel.
- 31% created a new product.
- 19% worked for a new customer group.
Small restauranteurs and stores selling unique goods all could have had a website presence, but many owners were too busy to make it happen before the coronavirus crisis. When lockdowns happened, they had to set those up.
Virtual services are not just for schools. Trainers, chefs, music teachers all have tried to involve local customers in virtual classes. While they might find new customers, the same services also find they compete with existing businesses online.
For some, new products have helped. Some small manufacturers began making the things most in demand: masks and sanitizers, for example. Breweries made sanitizer. Pillow companies made masks and medical scrubs.
For some it has worked. Fifty-one percent of businesses that did a pivot say they have increased business against forecasts. But small businesses are still facing issues with skills and staffing for new skills, as well as a lack of money.
Deed theft is real
You have probably heard the ads, and they may seem bizarre. People steal a deed to a house and suddenly the owner is not the owner.
House stealing is actually a thing and has been since at least 2008, according to the FBI. It tends to pop up in major cities and targets properties that are empty or used infrequently, like vacation homes.
Here is how it works:
Bad guys pick out a house — usually a rental, vacation home, or vacant home — then they research the owner. After obtaining fake IDs and forged signatures, they file a transfer of ownership with the county’s registrar of deeds. They quickly sell the home, or borrow against it, taking out all the equity. Then, poof. They are gone.
Many counties these days are offering free community notifications. When you register, you will receive an email or text when a document is recorded for your property.
You can also sign up for a title lock service that will monitor your home’s deed to prevent fraud. The cost is usually minimal, about $150 per year.
Buy rental insurance to protect your personal property
Imagine a fire in your building. Terrified, you run to safety, happy that you escaped uninjured.
You stand outside watching the building burn and count your blessings.
What you may not know at that moment is that, without rental insurance, you lose your possessions. Your Xbox is gone, all your clothes, the furniture you have bought over the years. Not many people can reach into their pocket and pull out $20,000 to replace everything.
Contrary to what many renters think, they aren’t covered under the property owner’s insurance. That only covers the structure, not the items inside it.
Only one kind of insurance protects your lifetime investment in your possessions: Renter’s insurance.
Unexpected perils abound: fire, wind, hail, or even a car crashing into your rented property. All of these can destroy or damage possessions accumulated over the years.
Renter’s insurance protects your personal property in an apartment, condo, or house from unexpected disasters. It will even cover the cost if, say, your sink overflows and soaks down through the floor into someone else’s apartment.
In addition, renter’s insurance can help protect you if someone is injured in the rental.
What to look for in renter’s insurance
Before you find yourself standing outside watching your belongings burn up with your apartment, consider buying renter’s insurance.
It doesn’t cost that much. For about $16 a month, you can be reimbursed if your possessions are destroyed by a disaster.
According to the Insurance Information Institute, renters are the majority in the U.S., but only a third of them carry renter’s insurance. Yet, while property owners ensure the structure, renters are on their own in cases of fire, theft, wind or hail damage, or even rioting.
Decisions
You’ll have to make several decisions when you apply for renter’s insurance.
The first is on the deductible. If you make a claim on your policy, the insurer will subtract a deductible from what they pay. You can choose this amount when you buy your policy. If you have a high deductible (meaning in case of a claim the insurer will subtract more), then you will pay less for your policy. Deductibles typically run from $500 to $1,000.
Another decision you will have to make in buying renter’s insurance is how the insurer will pay you. You have two choices:
Replacement Cost Value – This is the cost to replace an item with a new one. There will be limits on items. A fancy music system might only be covered for $3,000. With your deductible of $500, you would be paid $2,500 to replace the item.
Actual Cash Value – If your policy pays ACV, then the policy pays based on what the item is worth today. If the music system was expected to last 10 years, and it is destroyed by fire in three years, it would be valued at 30 percent less than you paid for it. That is 10 percent per year. The $3,000 system would be valued at $2,100 and then the $500 deductible would be subtracted. That makes the payout $1,600. The ACV policy pays less but it also costs less.
What is not covered by renter’s insurance?
Generally, any damage from flood, underground water, earthquakes, mudslides, settling, sinkholes, deterioration, contamination, nuclear hazard, birds, rodents, insects or domestic animals is not covered.
If in areas prone to earthquakes or floods, homeowners and renters should take out special policies.
Work-related pursuits or professional services are usually covered only under business owner’s policies.
Motor vehicles such as ATVs and boats usually have to be covered under separate policies, but contents might be covered by renter’s insurance.
Document your possessions
When you take out renter’s insurance, you will be asked to list your possessions and maybe to photograph them.
It is easy to forget to do the same when you buy that new television, but it might be important in the case of disaster.
One idea is to closely video every room of your house, paying special attention to getting the brand names and even serial numbers.
For every major purchase, store receipts in a fire-proof safe or photograph them separately or as part of your video and save the pictures ‘in the cloud.’
2020 has been bad. But not the worst.
Let’s hope that no one looks back at 2020 and thinks: Those were the good old days. That implies there are going to be worse days.
Still, as bad as 2020 has been, there were countless really bad years in recorded history. There have been so many bad years, how do we really choose? If we choose death as a yardstick, we really should narrow that down. Do you want death by war, disease, bad policy, starvation, drought, or what? Or maybe we choose sheer brutality. Tons of choices there. Or, how about choices that seemed okay at the time, but had long-lasting terrible ramifications? Maybe, natural disasters?
Here are four really bad years plucked out of history for their general awfulness:
- Disease and Natural Disaster Award: 1300s. In 1315, Europe’s warm period of prosperity ended with a bang. Possibly because of volcanic activity, winters became brutal and summers cold and rainy. Crops failed. About 80 percent of animals died of infections. Famine took hold. Life expectancy was about 29 years. Cannibalism, infanticide, and mass starvation were characteristics of a 60-year period in that century. As for disease, 1348 was a banner year. The terrifying black death visited not just on struggling Europe, but also the world. In 18 months, up to 200 million people worldwide died. Bodies were unburied in the streets where animals tore them apart. Survivors lived in fear, stench, and desperation with no understanding of the Plague and no way to fight it.
- Political Chaos, Disease, Social Unrest Award: 1919. In the economy, inflation and unemployment skyrocketed after World War I. Influenza killed 500,000 Americans. The bloody summer of 1919 was filled with race riots, with 500 wounded and 38 dead in five days of violence in Chicago. Across the country, 76 black Americans were lynched. A million workers went on strike, affecting the steel and coal industries, and even the Boston police force. Bombs were mailed to federal officials and fear gripped the nation.
- Dashing of Hope Award: 1968. Mass demonstrations for civil rights both buoyed and frightened Americans. A sense of positive change was in the air. But the worst moments were yet to come: The assassinations of Martin Luther King, Jr., and Robert Kennedy. The riots at the Democratic National Convention in August shook the nation.
- Cruelty Award: 1943. In Germany, systematic deportation of Jews to extermination camps was well underway. Everyone knew about it. No one stopped it. In the U.S., 240 instances of interracial battles in cities and military bases terrorized communities. But, according to historian Matt Delmont, public awareness of atrocities did not prevent them from continuing.
Insurance can cover costs associated with rioting
It’s a scenario that has happened all over the country.
The owner of a small restaurant or boutique just gets the store ready after the long coronavirus quarantine and then, a riot. Windows smashed. Building vandalized. The entire inventory ransacked and stolen.
Were they finished for good?
For the insured, there was good news in May and June and for those whose enterprises were not hit, there were lessons learned.
Business Insurance
A standard Business Owners Policy typically covers fire, riots, civil commotion or vandalism. Plate glass insurance can be purchased separately. The key is whether the insurance was sufficient to cover all losses, including inventory and equipment. According to the Insurance Information Institute, some small business owners, cutting costs after the virus quarantine left them without income, may have discontinued insurance policies.
Income Interruption Insurance
Business Interruption Insurance pays for loss of income when businesses are forced to close because of rioting or some physical damage to the premises. However, according to the Institute, only about 40 percent of small businesses have this coverage.
Businesses have to document their income and expected loss from the looting. If a business was closed due to the virus outbreak, and then was looted, most insurers will assess the loss based on a 12-month income picture, according to the Claims Journal.
Outlook for Business Insurance
Property losses were still ongoing, but with rioting taking its toll on cities across the country, insurers were estimating losses to be the biggest in U.S. history, the Claims Journal reported in June.
For the insurance industry, the timing of the riots is especially difficult since the Atlantic hurricane season began in June. Hurricane and flood claims are extremely high.
Most observers expected insurance premiums to rise overall while the industry limits coverage. Insurers are likely to stop writing policies that cover looting and rioting.
Out of quarantine: What we need first
If you have just been in isolation for months (or someone you care for has), some basic human needs will have to be renewed upon social opening.
– Touch. The deprivation is real. It often doesn’t require a full-on massage, but all people need the connection of touch. Light, caring touches on the back and shoulders mean a lot. Hugging and holding communicate love, trust, and well-being. Often the people who touched us the most are gone.
– Shared laughter. Think of the funniest stories you remember about childhood, vacations, silly moments, even frustrations and disappointments — what can you laugh about now that didn’t seem so funny then. Laughing together is part of being known to each other and being known is one of the best parts of being human.
– Eating together. We certainly don’t have to go to a restaurant to enjoy a shared meal! A light dinner with family and friends is a simple pleasure that boosts spirits and forges connections.
– Foot care. Two or three months alone in the house can take a toll on feet. Get to a podiatrist or a pedicure place for toenail cutting and moisturizing. A lot of time spent in bed can result in pressure sores on the heels. Check for sores, especially if you or your patient are diabetic.
– Hair care. Nearly everyone joked about needing a haircut during quarantine and lockdown, but with things opening up, it’s time to get out and fix up for both pleasure and health.
– Enjoying nature. Getting out. Just getting out of the house, especially if it means being able to sit in a park, see flowers and plants, breathe in the trees around you. These things renew the spirit and connect people with the earth.
How people are responding to crisis financially
A new survey has found that 60% of adults are concerned about their finances over the next six months.
The study by Fidelity shows that people are taking steps to improve their financial goals.
- 48% are cutting back on non-essential spending.
- 44% are working to boost emergency savings.
- 15% are investing more money in the stock market. Very low stock prices on solid companies have made cash investing attractive. However, according to Motley Fool, people should only invest money that they won’t need for at least seven years.
Vaccine technologies: Why a Covid vaccine will take months, not centuries
The smallpox virus raged among humans for 10,000 years before a leap of insight led to the vaccine that killed it forever. The insight took about 300 years to develop.
Today, in the wake of the Covid crisis, drug companies throughout the world are experimenting with vaccines. One company, Moderna, took 42 days to create an experimental vaccine.
Why so fast?
The most obvious reason is the research infrastructure: Laboratories, drug companies, medical systems — systems we take for granted — have never before been available on such a wide scale. Humans are in the era of science and technology.
Still, of the seven known coronaviruses, there are no known human vaccines.
According to Johns Hopkins Senior Scholar Dr. Amesh A. Adalja, the key to the new rapid development of vaccines is new vaccine platform technologies. Writing in leapsmag.com, Adalja says these platforms use the same building blocks to make more than one vaccine. Using the basic platform, researchers are able to, in effect, switch out one targeted virus (or bacteria or other organism) like a person switches out a video game cartridge. One example of that is the ebola vaccine, which uses another virus as a platform with the ebola protein inserted.
A variety of different approaches are being used to create a Covid vaccine. Moderna is using an RNA approach. Inovio is using a DNA model in which genetic material is injected into the platform and human cells translate it into a viral protein. At that point the immune system makes antibodies.
Other approaches include nanoparticles (by Novavax), while other companies try to adapt an avian coronavirus vaccine.
According to Adalja, a coronavirus vaccine could possibly confer protection against other human coronaviruses, eliminating their use as a biological threat in the future.
And, even curing the common cold.
One virus was the scourge of humans
As bad as Covid-19 has been, it is not even close to the worst viral disease that has swept humanity.
That honor probably goes to smallpox, a disease so toxic that it wiped out entire populations, killing up to 500 million people in the 20th century alone. It was especially deadly for children, killing up to 80 percent. Survivors of any age were left disfigured, blind, or both. After exposure, symptoms began within a week to 19 days. High fever, fatigue, aches, and vomiting appeared first, followed by red sores on the face, hands, arms, and, finally, trunk of the body. These sores left deep, pitted scars on survivors.
According to estimates by the Centers for Disease Control, the Covid virus kills between 0.26 percent and 0.4 percent of infected people. Smallpox killed no less than 20 percent and up to 60 percent in some populations.
According to the Annals of Internal Medicine, the earliest written accounts were from China in about 400 BC, but possibly earlier.
The good news
Today smallpox is gone. The last case in the U.S. was in 1949 and the last case in the world was in 1978. Today the only remnants of smallpox are the light scars left by vaccinations on people born before the 1980s. In 1979, it was declared eradicated after massive inoculation campaigns on every continent. It is thought to live only as a sample in three labs in the world.
First vaccinations
For more than a thousand years, people knew that once a person contracted smallpox, they would ever after be immune. This knowledge led to the first genuine vaccinations.
In China, as early as 400 BC, smallpox scabs were ground up and injected into the noses of healthy people.
The first western experimentation was in 1789 by English doctor Edward Jenner, who found that a similar virus, cowpox, could protect humans. The technique, which used fluid from an active smallpox sore, was scratched into the skin or vein.
The technique was not perfect. People contracted a fever and perhaps some sores but recovered. However, there was a risk of contracting the active disease.
