What does that mean for members?

Even if you currently have Courtesy Pay, you will need to contact GHCU and officially “opt in” in order to keep your Courtesy Pay privileges. The new regulations take effect on July 1, 2010, so if you have not expressed to GHCU a desire to retain Courtesy Pay before then, you will automatically be opted out.

These changes do not apply to ACH transactions (automatic payment by direct debit from your GHCU account, for example) or to checks—those will still be covered by other overdraft protection services you may already be using. These regulatory changes will only affect ATM transactions (withdrawing money at an ATM) or when you use your debit card to pay for everyday purchases such as groceries, gas or dinner at a restaurant. If you choose to not opt in to Courtesy Pay and you don’t have sufficient funds in your account, your debit card will be denied under these circumstances (including your ATM withdrawals).

How do I opt in?

Members will be given several opportunities to opt in. You may express an interest in opting in now by calling our Virtual Branch or by notifying a staff member at your GHCU branch—but please remember that you must be eligible for Courtesy Pay, and this new opt-in will not take effect until August 15, 2010. If you opt-in now, we will mail required disclosures to you in order to ensure you are making an informed decision. You may also wait until you receive further notification from us in your monthly statement or by mail.

Please be careful. Identity thieves are already taking advantage of the overdraft protection regulation changes and running scams to elicit personal information from the public. Do not supply your member number to anyone unless you’re absolutely certain they are an authorized GHCU employee.

You can read more about the federal government’s changes to overdraft protection programs at the website of the Federal Reserve.

Home equity loans or home equity lines of credit (HELOCs) are great, low-interest ways to have the cash you need, when you need it. GHCU’s home equity rates are generally far lower than credit card rates, and with no annual fees or upfront closing costs, the money you borrow goes even farther.* Additionally, home equity loans can have tax benefits, though you’ll need to consult with your tax advisor to determine if you qualify.

The difference between a home equity loan and a line of credit

A home equity loan usually has a fixed-rate, meaning your interest rate doesn’t change over the life of the loan. Additionally, you receive the amount of the loan all at once and repay it over time, plus interest. The advantage of this type of loan is that you have the money you need upfront—which can be very convenient if you know how much your project is likely to cost.

A home equity line of credit is revolving credit, so you only take out—and pay interest on—as much of the available line as you need at any one time. This is a useful feature when you have several smaller projects strung out over time and you don’t need a large sum of cash all at once.

GHCU has made accessing your home equity funds very simple. With a home equity loan, borrowers receive the money in a single lump sum. Borrowers with HELOCs can access their money either through online banking with an Online Access HELOC or by using a special Visa card with a Visa Access HELOC.

Whatever you need the money for, whether it’s a new roof, repairs to your water heater or simply bringing outstanding debt under one, low-interest umbrella, a home equity loan or line of credit can be a smart, cost-effective solution. Call GHCU or visit a branch for more information: 800-562-5515 or 206-298-9394.

*All GHCU loans are subject to credit approval. Upfront closing costs may apply to some property types.

Of course, in order to realize value from a home purchase, it’s important to buy the right home with the right mortgage. Here are some questions to consider, when you’re preparing to buy:

1. How much home can I afford?  Many lenders and advisors will tell you that your monthly costs should not exceed 28% of your income—and that should include not only your mortgage but also insurance, upkeep, homeowner’s dues if you purchase a condo, and utilities. Don’t forget to add closing and moving costs into your initial purchase estimate. GHCU has an online calculator that can help you establish your home-buying budget.

2. How long am I planning to stay in this house? The answer to this question may help you determine what kind of mortgage will work best for you. If you’re in it for the long haul, a 30-year fixed rate offers stability and predictability; if you plan to sell in a few years, an Adjustable Rate Mortgage (ARM) with a low initial rate may save you money.

3. Where should I get my mortgage? Before you sign, shop around. Compare rates, but also consider closing costs as well. The amount you pay at closing can vary considerably from lender to lender, so be sure you get your Good Faith Estimate (GFE) and add that in when making your budget and choosing your lender. Feeling comfortable with and confident about your lender is important too; don’t hesitate to drop by and chat. Your home is likely to be the biggest investment you’ll make, so only deal with a lender you trust.

4. Is now the right time? Interest rates are still hovering at historical lows, and a fixed-rate mortgage at a low rate can save a homebuyer thousands of dollars in interest. There’s still a glut of homes on the market, and construction companies with idle workers may be willing to cut a deal on building you your new home. If your credit score is in good shape, and you have enough saved to make a solid down payment, now might just be an excellent time to buy.

If you’re considering buying a home, the more information you have, the better. You’re always welcome to stop by a GHCU branch to talk about your mortgage options.

Your member number, like your Social Security number or Driver’s License number, is private information that could potentially be used to steal your identity. Please keep such numbers safe and secret and never reveal them on a public forum like a blog.

If you have any questions about identity theft, what it is and how it happens, the WA State Attorney General’s office has some excellent information.

We love your comments and questions, so please keep them coming–just be careful that you don’t reveal any personal information!

According to the Financial Crimes Enforcement Network (a bureau of the US Department of Treasury), instances of mortgage modification and foreclosure rescue fraud have increased dramatically in the last year. The scams are usually perpetrated by scammers professing to be modification or foreclosure “specialists” and generally fall in one of two categories:

Quit-Claims

When a grantor signs a quit-claim deed, he or she renounces any interest in a piece of property. These deeds are perfectly legal, often used in cases of divorce, sale of property or the passing of property to the next generation. In instances of fraud, however, the owner of the home is persuaded to sign a quit-claim deed. Owners sign, believing this will release them from their mortgage repayment obligations, perhaps in exchange for the right to remain in their homes as renters. Sometime thereafter, the owners, who no longer have a legal right to remain in their own homes, are evicted. The scammers have sold the house, but the original mortgage is still unpaid and the responsibility of the evicted owners.

Foreclosure Rescue

In foreclosure rescue scams, the scammers claim to be loan-modification specialists, perhaps even  affiliated with the distressed homeowner’s lenders. They require a substantial upfront payment for loan modification assistance, then do nothing. Under the Obama Administration’s Making Home Affordable Program, loan modification counseling with a Housing and Urban Development (HUD)-approved housing counselor is free, so no homeowner should work with a counselor who demands pay for his or her services.

If you’re concerned about your ability to pay your mortgage, seek help from a reliable source that can offer genuine assistance. You can find a HUD-approved counselor on the Making Home Affordable website or by calling 888-995-4673. If your mortgage is with GHCU, call our Member Solutions Department at 800-562-5515 (206-298-9394 locally). You don’t have to struggle with possible foreclosure on your own. There’s help.

Can you put a firewall around your mailbox? Probably not, but there are some steps you can take to reduce your risk of identity theft. This month our experts take on Identity Theft and answer the question, “What can I do to protect myself?”

From Matthew Hensley, Branch Sales Manager at our Northgate branch:

1. Protect your Social Security Number (SSN)–Don’t carry your card in your wallet and never write it down on a check or other negotiable instruments. Give your SSN only when absolutely necessary; if at all possible, use other identifiers. If your SSN is used on your State’s Driver’s License or Medical Insurance Card, ask if you are able to substitute another number.
2. Treat your garbage and mail carefully–Thieves have no problems digging in your trash or mailbox if it means they can get your credit card number or other information to use your identity fraudulently. I highly recommend paying bills online and receiving paperless statements via online/email. If you must mail sensitive information, use the post office—not a blue drop box but an actual United States Post Office. Despite all the reports of database theft, the most common method thieves use to steal our personal information is through traditional rather than electronic channels. The Justice Department (2006) found that in the cases where the method was known, 68.2% of information was obtained off-line vs. only 11.6% obtained online.
3. Use complex passwords–put passwords on all credit cards, bank accounts and phone accounts. When selecting passwords for these and your online accounts, avoid using anniversary or birthdates, mother’s maiden name or the last four digits of your SSN. I would even go as far as to not use your pet’s name because you never know who is listening when you are walking your dog or calling your cat to come in. The strongest passwords are combinations of letters and numbers or special characters.

 A great reference for tips for Identity Theft Protection or a resource for victims of Identity Theft is provided by the Federal Trade Commission.

From Drew Baker, Risk Specialist,

Tips to avoid ID theft: ID theft can involve plastic card fraud and check washing. If someone uses your plastic card or check, they are assuming your identity. Here are a few ways to try to avoid these frauds.

1. Avoid check washing by switching to online billpay: that’s the quickest and easiest solution. It’s also better for the environment and uses less paper and fuel to drive your paper where it is going. If you still must write paper checks, use the Uniball 207 Gel Pen, as it is touted as an anti-check washing pen. Don’t put personal checks in your outgoing mail if your mailbox is unsecured.  Avoid giving unknown individuals checks for payment. If you must pay someone that you don’t know for goods or services, use cash, money order or a cashier’s check.
2. Avoid plastic card fraud. Skimming devices are increasingly being used to copy cards and PINs which are then used to make counterfeit cards. These skimming devices are usually placed as an overlay onto an ATM machine or pay-at-the-pump gas station kiosk. You should always visually inspect any card reader that you put your card into. If you see that the plastic overlay is loose, off-colored or comes off in your hand, don’t use it and report this to the police. Run your hands over the card reader and key pad to make sure they are not fake ones placed on top of the real thing. The crooks are also placing fake speakers, brochure holders or other devices with cameras pointed at the key pad to capture the pin numbers. Use an ATM that you are familiar with, so you know what it looks like. Watch your account activity carefully: crooks will “test” a stolen card number to make sure it works by sending through a small authorization first (iTunes for $1.00, for example) so you may not notice or care. The big transactions will show up later; count on it!

With rates for mortgages still dipping into historically low territory, many homeowners are wondering if the time is right for a refinance. Refinancing to a lower rate could potentially save thousands of dollars in interest, shorten the time left on a loan or both. How do you know when a refinance is worth the work?

If you’re considering refinancing, ask yourself the following:

• Do you owe more than the house is worth? If what you owe on your home (including any home equity loans or lines of credit) is more than 105% of the home’s value, you may qualify for the federal Home Affordable Refinance Program (HARP) or the Home Affordable Modification Program (HAMP).  If you feel you may be eligible for HARP or HAMP, contact your mortgage servicer for assistance.
• Will you save at least one point on the Annual Percentage Rate (APR)? If your current mortgage rate is 6.25% APR, a rate of 5.25% APR or lower may well save you some money.
• What will your closing costs be? Shop around for a lender with low closing costs—you don’t want to have the savings from your reduced monthly payment eaten up by fees.
• Will you be extending the terms of your loan? If you’re 10 years from paying off your mortgage, then refinancing out another 30 years may not make sense for you. Of course, you can always make additional principle payments. Check that your lender has no prepayment penalty.
• Can you shorten the term of your loan? Perhaps, with a reduced interest rate, you can shift from a 30-year mortgage to a 15-year and save yourself some interest.
• Is your credit score ready? If you believe a refi is in your future, be sure you qualify for the best rate possible by checking and cleaning up your credit histories (you can get these free at annualcreditreport.com).

If you think this might be the right time to refinance, the Personal Finance Representatives at Group Health Credit Union have worksheets and calculators to help you know for sure. Visit one of our branches to get started. But don’t delay! Most financial experts predict a sharp rise in mortgage interest rates in time for the high demands of spring and summer.

There’s never a bad time to begin or boost your retirement savings, but tax season is a particularly good time to consider your IRA options.

What are the choices?

A traditional IRA allows you to make contributions for immediate tax savings. The earnings of the IRA grow tax-deferred until you begin making withdrawals in retirement. The amount of your contribution which you are able to deduct from taxable income may depend on participation in an employer 401(k) and income level.

A Roth IRA doesn’t give you the immediate tax savings,  but withdrawals are tax-free in retirement. There are income limitations that determine who can contribute and how much; consult with a tax advisor for information on eligibility.

Who is eligible to invest?

Anyone under age 70 ½ who is still earning an income can invest in a traditional IRA. For both types of IRA, if you’re under 50, you can invest up to $5,000 a year; those 50 and over can invest up to $6,000, depending on your Adjusted Gross Income (AGI).

Which IRA is better?

Which IRA you choose depends on your needs. Here are some questions that may help you determine which IRA will work better for you:

• Is your first priority to reduce your taxable income for 2009? A traditional IRA may reduce your taxable income when you make your contributions.
• Are you in a stronger position to take the tax hit now than you will be in retirement? The earnings of a Roth IRA are tax-free rather than tax-deferred like a traditional IRA; you pay the tax now rather than later.
• Does participation in your employer 401(k) plan plus your income make you ineligible for the tax benefit of a traditional IRA? You can still enjoy the tax-free, qualified withdrawals from a Roth IRA down the road.
• Are you concerned about the tax burden on your heirs? Roth IRAs don’t require minimum distributions after age 70 1/2, so your earnings continue to grow, and your heirs will be able to take out that money without paying income tax.

Some experts predict that Americans will need as much as 85% of our working income in retirement. That requires a great deal of careful thought and prudent investing. But it’s never too early or too late to begin, so consult with a financial expert to determine your goals and begin working toward a secure retirement. For more information on retirement plans and IRAs, you can visit the IRS.gov website.

You may have received an email recently, claiming to be from Intuit Online. The email claims that you need to update your account by downloading a new “tool” that was created to increase online security. The email targets members of financial institutions, including GHCU, and may even mention Group Health Credit Union by name.

This email is NOT from Intuit, nor is it from GHCU. If you receive an email claiming to be from Intuit or requesting any kind of account information, do not click on the link, and do not provide any personal information. Clicking on the link may infect your computer, and any information you give may be collected to use in identity fraud.

“Phishing” scams usually begin with a message via email, text messaging or instant messaging. Scammers hope to lure victims to a fake website and trick them into giving up personal details which can then be used to perpetrate identity fraud. Phishing scams such as this one have become commonplace, so it’s crucial to know how to protect yourself.

A recent phishing scam from criminals pretending to be a bank actually launches a “live chat” window. Customers, believing they are talking with a bank official, have been persuaded to give up full names, account numbers, birthdates and more.

The best way to avoid phishing scams is never to click on links or respond to emails or texts when you did not initiate the conversation. No reputable institution will ever come to you for personal information—if you have a relationship with them, they should already have the information they need!

For more information on what scams are out there, how to protect yourself or what to do if you feel you may already by a victim, consult the Anti-Phishing Working Group website. This consortium of global business and law-enforcement track malicious activity on the Internet and cell networks and is a useful resource in the fight against cyber crime.

Remember: GHCU will never ask you to disclose personal information on the Internet or by text. If you are ever concerned that an email or text claiming to be from GHCU is not legitimate, do not respond. Instead, visit a branch or call us at 206-298-9394 or 800-562-5515 to verify.