Cutting the Financial Cord: Adult Children

Cutting the financial cord with adult children can be a very hard thing to do, and most people put in this situation don’t have a good answer on how to make the situation better.   There are now three generations that find themselves providing some sort of financial aid to their adult children. The silent generation, the baby boomers and now Generation X have all managed to find themselves in similar situations. What started as lack of job market, generosity or by simply “helping out” as the generation prior had, these generations are offering loans, giving cash or paying bills to their adult children at record levels. It is no secret that unless these situations are managed properly, it can create a big hole in their finances, even jeopardizing their retirement. A July 2014 survey by the Boston nonprofit American Consumer Credit Counseling found that a higher proportion of U.S. households (1 in 3) provide financial assistance to adult children than support for elderly parents (1 in 5).   This is putting a huge wrench into retirement savings,” says Pamela Villarreal, a senior fellow with the National Center for Policy Analysis in Dallas. “The more boomers put out for adult kids, the less they can put aside for themselves.” As a result, some older adults are going back to work, reducing their own living expenses or even declaring bankruptcy.   What can help for parents who want to help out their adult children is to determine if the money that they are giving is going to fix the problem or merely delaying the inevitable. “Loaning money works well,’ says Kathleen Gurney, who runs the Financial Psychology Corporation, “If the process is objective and well planned.”   Here’s a look at three ways parents can financially assist their children in the area of home ownership:  
  • Gifting a down payment. This allows a borrower to use money that has been gifted as a down payment. A married couple can each give $14,000 to a child and the child’s spouse, for a maximum of $56,000 in four separate gift checks.
 
  • Offering a family loan. Giving a loan to a family member is a winning combination, as the parents would get more interest from the loan then they would from a typical Certificate of Deposit, and the child would be able to get a lower interest rate then they would from a bank. Also a borrower whose offer is not contingent on obtaining financing could realistically offer the seller a quicker closing, which could be a huge advantage in such a competitive sellers’ market.
 
  • Cosigning the mortgage.If an adult child’s income is too low to qualify for a mortgage on the home they want, a parent can cosign on the mortgage. One thing to remember however, is that this will show up on your credit as an outstanding obligation, which could complicate matters if the cosigner wanted to refinance or buy another home.
  Helping grown children with financial obstacles can be a very positive thing in the right circumstances. Take to your financial advisor before you commit to any major or long term financial lending situation to make sure you can comfortably afford to help without jeopardizing your financial security. If you don’t have a financial advisor and would like more information, Midwest Wealth Management can help. Visit us at www.midwest-wealth.com, or call 317-288-4989.     Hymowitz, Carol. Parents are risking their retirement to subsidize their kids. Bloomberg Businessweek. 5, Mar. 2015. http://www.bloomberg.com/news/articles/2015-03-05/parents-risk-retirement-to-support-millennial-kids   Gustke, Constance. Reopening the Bank of Mom and Dad, to Help Adult Children. The New York Times. 9, Oct. 2015. http://www.nytimes.com/2015/10/10/your-money/financial-assistance-to-adult-children.html?_r=0
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Back to School Season: College Tuition

It is that time of year where high school graduates are preparing themselves for the next step in their academic career, college. The preparation for parents and grandparents undoubtedly started well before the summer after their senior year, especially when it comes to cost of tuition.   Parents and grandparents are often the first to help new children prepare for the high cost of college tuition by opening some sort of savings vehicle in their name. A popular choice as of late has been tax-advantaged state-run 529 plans. These savings plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.   Out of state, in-state or private colleges do not play a factor in starting a 529 or choosing a state’s plan. You are more than welcome to use any state’s 529 plan. In fact, 34 states currently offer residents a full or partial tax deduction or credit for plan contributions. The contributor can make their decisions based on tax credits, fees, asset allocation or historical performance, and these decisions are usually determined with the advice of the contributor’s financial advisor.   A 529 plan offers many other benefits any family member can appreciate: For one, they can be assured the money they are giving their children will be used for its intended purpose. To avoid incurring income taxes and a 10% penalty on the earnings portion of the withdrawal savings in a 529 account must be spent on qualified education expenses such as:    -Tuition - Books and supplies - Technology Items - Room and Board   Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, so they will grow tax-free as long as you use withdrawals for eligible college expenses, such as those listed above. If one child does not use up all the funds you have provided, you can change the beneficiary to another child without any tax implications.   These 529 plans are a great way for a guardian to help out their children manage the high costs associated with college. To learn more about these and more college savings opportunities, visit us at midwest-wealth.com or call us at 317-288-4989.  
The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that a college-funding goal will be met. In order to be federally tax-free, earnings must be used to pay for qualified higher education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10-percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses.
An introduction to 529 plans. U.S. Securities and Exchange Commission. http://www.sec.gov/investor/pubs/intro529.htm Flynn, Kathryn. Eight Reasons why Grandparents love 529 plans.savingforcollege.com. 16, July.2015 http://www.savingforcollege.com/articles/eight-reasons-why-grandparents-love-529-plans-671 Name the top 7 benefits of 529 plans. savingforcollege.com http://www.savingforcollege.com/intro_to_529s/name-the-top-7-benefits-of-529-plans.php
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What I’m Watching: Debt Ceiling & Trade Deals

What can often be the most frustrating part of my job and ironically the area investors enjoy discussing most, is the spontaneous and ongoing geopolitical events that surround the underlying economic data. It is not to say they are not important, but they often make for better news headlines and can cloud the fundamentals at which a strong or weak economy is graded on.   Situations I am closely watching at this point include:   - U.S. debt ceiling debate - Italian national election - North Korea situation - Pending trade deals with the G-20 nations   The biggest risk, at this point, appears to be the debt ceiling. This will require action by late summer, most likely. Should Democrats and Republicans be unable to agree, it could rattle financial markets.  In the abstract, it’s hard to see what the problem is. All of the borrowing is to pay for spending specifically authorized by Congress itself. Not raising the debt limit is equivalent to whipping out the credit card and then not paying the bill when it comes due. This has not stopped the debt ceiling from becoming a perennial problem, however.   Part of me says this time will be the same as last time. We will see both sides pushing to get maximal concessions on their priorities, trying hard to use the risk of not raising the limit to force agreement on their terms.   Even if we do get a debt ceiling face-off, or any of the other potential issues, known or unknown, the underlying strength of the economy is likely to limit the damage. We have seen many situations in the not-so-distant past that were equally as scary and they didn’t knock the economy or markets off their path.   The biggest risk, given that strength, is that the expansion cycle has been much longer than usual, and the supporting trends are starting to decay. Still, based on history and current conditions, growth is likely to last through the end of the year.   While the risks are real, then, and growth will not last forever, the rest of 2017 looks likely to bring more of the same. More economic growth, slow but steady; more market appreciation, ditto; and more normalization across the board. After the turmoil in recent months and years, this is not a bad place to be.
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G20 Summit in Hamburg

While many Americans were busy celebrating the long weekend of our nations birth and independence, our nations newly elected leaders took to Hamburg for the highly anticipated G20 Summit.   G20 Riots and Protests. Pictures 3 days of peaceful protests turned into riots that ended with cars being lit ablaze, water cannons being fired and tear gas dispersed. Most protestors were not residents of the Hamburg area, 15,000 officers with more called in as back up.       G20 wants to connect all citizen across the world by 2025. “We need to bridge digital divides along multiple dimensions, including income, age, geography and gender. We will strive to ensure that all our citizens are digitally connected by 2025 and especially welcome infrastructure development in low-income countries in that regard. We will promote digital literacy and digital skills in all forms of education and life-long learning. We recognize that information and communication technology (ICT) plays a crucial role in modernizing and increasing efficiency in public administration.”   US threat of Steel Tariffs could spark trade war. President Trump signed a memorandum in late April asking Commerce Secretary to prioritize the probe, which would result in higher tariffs for Chinese and other foreign steel firms. This was in party to help create an equal playing field for the U.S. steel Industry.   -Foreign firms are selling large quantities of steel in the US at prices that are far below the market price.   -Experts believe duties on foreign steel are more likely to hurt Europe, Canada and Japan, than of China.   -Canada has already been hit with tariffs on certain kinds of lumber, and the White House is also looking at new duties on aluminum and solar panels.   Ivanka sits in for Donald. In what was seen as a controversial move, the president’s daughter, Ivanka, took her father’s place in a meeting with the Chinese, Russian and Turkish presidents, the German Chancellor and the British Prime Minister.   -Bloomberg news agency says she had taken her father’s place on at least two occasions during Saturdays meeting, on both occurrences, she did not speak.   -The meeting was addressing the African migration and health issues, coordinating efforts to a fund that Trump and the World Bank had just announced.   Britain’s Next Trade Partners: Post Brexit -Britain has currently made free trade agreements with more than 50 countries, however; most of these countries are small and will not affect trade in the slightest.   -The big three that Britain hopes to secure deals with are the US, China, and India.   -Post-Brexit they will be able to open big farm products such as meat (beef and lamb) and fruits and vegetables (potatoes), to producers from outside European Union.   -UK beef exports are viewed as a global premium and currently, send large amounts of pork to China.   -For Britain, free trade with the rest of the world will be a very big issue, as this was one of the major points to them being prosperous outside of the EU.
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The Cryptocurrency World

What is a Cryptocurrency?   In the past, currency has been issued by governments and managed by financial institutions (banks), which are in turn regulated by the financial arm of the government (e.g., in the United States, the Federal Reserve System regulates banks). In other words, money has been inseparable from nation states and banks. We have historically placed our trust in these third parties to manage our money.  Now the rise of cryptocurrency is promising to separate currency from both nation states and banks.   By definition, cryptocurrency is a digital currency that relies on cryptography (the process of writing or reading secret codes) for security rather than established third parties (e.g., governments and banks). Because cryptocurrency takes the form of code rather than currency (e.g., coins and bills), the currency is impossible to counterfeit. Most importantly, because the currency theoretically belongs to no single person, business or government, it is also immune to outside interference.   Blockchain Technology   To understand how cryptocurrency works, it is important to understand blockchain technology. Simply put, if bitcoin is the train, blockchain is the rails on which it runs. While bitcoin is actual currency, blockchain is ledger technology that speeds up network transactions. As already noted, historically we’ve trusted governments and banks to manage our money. Now these trusted third parties are essentially being replaced by blockchain technologies.   Blockchain-based currency exchanges are managed by a distributed database (one with many connected computers based in many different locations). In theory, anyone trading blockchain currencies can see every transaction that has ever taken place in the blockchain, since all data is stored in the cloud. As such, all the accounting is autonomous (run by a network of computers and not by a centralized group of people).   Types of Cryptocurrencies   Bitcoin was the first digital currency to reach the market, and it has the highest market cap at close to $39.4 billion. Bitcoin is a popular currency for consumers and merchants who want to be free of banks and traditional finance. Other cryptocurrencies have made up ground in popularity and application use by speeding up the transaction period.   Ether is the currency of the decentralized network idea known as Ethereum. Smart contracts application has raised a lot of investment dollars from Fortune 500 companies: JP Morgan, Cisco, Thomson Reuters and UBS. Their investments backs the idea that Ethereum is currently the most versatile and sophisticated form of cryptocurrency. However, its pricing and market capitalization has been quite volatile as the price has moved from under $10 to $400 and back to $200, with a current market cap of $25 billion.   A slightly different technology to bitcoin in that it does not rely on mining protocol is a cryptocurrency named Ripple, with a market capitalization of around $7.4 billion. Ripple is both a transport protocol and a currency (XRP). Its main appeal has been its lighting-fast transaction, causing Ripple to gain popularity and establish partnerships with major Chinese Banks.     Government Regulations May Not Disappear   Although demand for cryptocurrencies is rising at a rapid rate, what digital currencies really need is government regulation. The word of the government, and acceptance of a currency for taxes, gives that currency value and, more importantly, instills investor confidence.   Even more desired by cryptocurrency investors is an exchange-traded fund (ETF). This would allow institutional investors to trade in bitcoin. So far, regulators are not accepting bitcoin ETFs; the SEC has rejected two applications for bitcoin-backed exchange-traded funds, the Winklevoss Bitcoin ETF and the SolidX Bitcoin Trust. The futures market may end up being another explorable option for cryptocurrency  investments. The Commodity Futures Trading Commission considers bitcoin a commodity. What’s more, according to Coindesk, an increasing number of governments are issuing guidance on bitcoin, for example, Japan, Jersey, Malta, Sweden, and Switzerland.   With no centralized authority and the ability of buyers and sellers to operate entirely under the radar, there are legitimate fears that in the future, cryptocurrencies will increasingly be used to support criminal activities, such as tax-evasion, money-laundering, and even the financing of terrorist activities. In some jurisdiction, such as New York State, legislators have already started to crack down on cryptocurrencies. The state’s Bitlicense requires virtual currencies to comply with most of the regulations already imposed on banks and other financial operators, including payday lenders. Other government bodies, including the European Union, are also currently working to place restrictions on cryptocurrencies, which they consider a threat to both financial and personal security.
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Where Do We Go From Here? U.S. Economy

I previously mentioned that the best way to analyze the U.S. economy was to look specifically at each category that comprises our gross domestic product (GDP.)   Consumer spending: Consumer spending growth requires two things: the ability to spend, which comes from jobs and wages, and the willingness to do so, which depends on confidence.   The number of jobs has continued to grow, albeit at a slowing rate. Although the decay in the job growth rate raises concerns about the future, based on historical trends, growth should continue through 2017. A growing number of employed people will enable spending to grow faster.   Beyond the number of people employed, wage growth also contributes to the ability to spend more. As the labor market tightens, wage growth should remain at current levels of between 2.5 percent and 3 percent, or it could increase. Overall, labor income growth, which includes both job growth and wage growth, has remained around 4 percent on a nominal basis, indicating that the ability to grow spending is there.   The second part of the equation—the willingness to spend—depends on consumer confidence, which is doing even better than income growth. Confidence has risen to levels last seen in 2001, and although it has pulled back a bit from the peak, it remains at levels that historically have led to faster spending growth.   Business Investment: Business investment had been a weak spot, but that started to change in early 2017. After languishing in negative territory in 2016, private investment growth has bounced back, in some cases, to levels not seen since before the financial crisis.   Government spending: What business gives, however, government is likely to take away. After supporting the economy in 2016, all levels of government have actually decreased spending in 2017. Although the decreases are small, the transformation of government from an economic tailwind to a headwind will hurt growth in 2017 as a whole. In fact, this was a major reason for the first-quarter slowdown. The decline is particularly damaging given expectations at the beginning of the year for fiscal stimulus, which has not happened.   Exports and imports: Exports and imports continue to expand. Over the past several years, imports have grown faster than exports, subtracting from economic growth. The most recent data, however, shows changes in trade in rough balance, taking this sector back to net zero from a negative in the second half of 2016. This should also help maintain economic growth.   Interest rate policy driven by stability The Fed is now saying—more clearly than in years past—that the risks of not raising rates are greater than those of raising them. So, expect continued slow increases, to 1.50–1.75 percent by the end of the year. Also, expect the Fed to start rolling off its asset base, not by selling but by lowering the reinvestment rate. Markets now largely expect continued policy tightening, so absent any surprises, the impact should be minimal, as it has been so far.   Financial markets supported by revenue and earnings growth A growing economy and a normalization of monetary policy mean global stock markets are likely to continue to trade on fundamentals, such as revenue and earnings growth. Here in the U.S., both revenue and earnings growth were greater than expected at the start of the year, a trend that should continue through 2017. Revenue growth, in particular, has been strong, at levels last seen in the immediate recovery from the financial crisis.  Strong revenue growth should also support growth in earnings, with the rest of 2017 expected to be quite strong.   All of these areas are still not without their risks. Whether it is data-driven, political or geo-political there are a number of items that I believe should be observed with a watchful eye and will be discussing soon.
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Technology Meets Finance: Budgeting in 2017

Before the marriage of technology and finance, many families in Indiana knew that maintaining a budget on paper was not always an easy task. Over-sized ledger books, somewhat legible writing and stacks of statements were all part of this unwieldly process.   Thankfully technology has helped create hundreds of budgeting and personal finance apps for adults. Most users today find the trouble is filtering through the app store and finding the best budget tool for their personal needs.  There are even a library of apps that can help parents talk and teach their children about money. Starting with the grownups, here are a few favorites:  
  1. Mint.com: Allows in-depth personal budget management and expense logging and lets you sync your bank and card details for an up-to-date and secure look at your financial state.
 
  1. Expensify: If you are a business traveler, you’ll love this handy app that allows you to manually track expenses, photolog receipts and import purchase info from your credit card for eReceipts.
 
  1. IOU Debt Manager: Now you can keep track of who owes you what or what you owe other people.
 
  1. PocketGuard: This all-in-one bank account tracking and budget management app shows you how much is in your account and what you can afford to spend for the day.
 
  1. Home Budget with Sync: Includes a neat Family Sharing feature that allows users to easily set a budget, and then sync income and expenses between multiple devices. Also contains charts and infographics.
  To get your kids used to the idea of handling money, there are apps that help them learn money skills. Money Apps For Kids You find seven different apps that use a smartphone to teach your children savings and budgeting lessons developed for different ages, from 5 and 6-up to 13+. For more information and financial tips, visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 317-288-4989.
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Where do we go from here?

As we move into the second half of 2017, we find ourselves in a familiar place. Once again, as in 2016, we saw a weak first quarter and rising concerns that the economy was rolling over. And once again, we have seen stronger data in the second quarter, which should lead to another solid year for the economy and markets. Employment continues to grow, both consumers and businesses remain confident, and markets have responded by moving up around the world, even hitting new highs here in the U.S. The fundamentals remain sound from both an economic and a market standpoint, and at this point, it seems likely the rest of the year will show continued growth and market appreciation.   There are risks, of course, but they are more political than economic. Even the real political risks, however, have not been as damaging as feared. Both the French and British elections, for example, failed to derail markets, and the political turbulence here in the U.S. has not prevented markets from reaching new highs. Strong economic fundamentals have allowed us to sail through the political storms, and this should continue to be the case.   The big picture, then, is one of continued improvement through the rest of 2017. The economy should continue to grow, perhaps a bit faster than it did in 2016. Corporate revenue and earnings have increased by more than most analysts expected, and that trend is likely to continue as well. Add in high levels of consumer and business confidence, and financial markets are also likely to continue to rise.   The U.S. economy is still growing, but more slowly   The best way to analyze the U.S. economy is to go back to basics. Gross domestic product comprises consumer spending, business investment, government spending, and the net result of trade. We need to consider each separately and I look forward to elaborating on each in the weeks to follow.
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The Next Cancer Cure: Gene Therapy

Nearly one in ten people are expected to develop a genetic disease as a consequence of carrying defective genes. More than 7,000 distinct rare diseases exist, and approximately 80 percent are caused by faulty genes. And, of the rare diseases, 50 percent of the people affected are children, making rare diseases one of the most debilitating for children worldwide.   This focus on curing diseases via the use of what is called “gene therapy” has evolved into of the most exciting developments in medical research. By correcting an underlying genetic defect, gene therapy can provide for transformative effects based on only a single treatment.   What is gene therapy? In the simplest terms, gene therapy involves the replacement of a gene that is defective. The process involves the packaging of a functioning copy of the defective gene into a viral vector. This vector is based on a naturally occurring virus (such as HIV), which has been modified so that the virus cannot spread within the person’s body. A virus has a natural ability to introduce genes into human cells, and thus, its role in the delivery of the gene is critical in the gene therapy process. This vector acts as the delivery mechanism for transporting the functioning gene into the blood stem cells taken from the patient. Rather than offering solutions that only address a patient’s symptoms, gene therapy corrects the underlying genetic defect that is the actual cause of the disease.   The first out-and-out-cure: During 2016, Italian scientists at Milan’s San Raffaele Telethon Institute for Gene Therapy reported that they had cured 18 children of a rare but terrible immune deficiency disease, ADA-SCID. They removed the children’s bone marrow, added a gene to make the ADA enzyme their bodies lack, and replaced it. It took 14 years to develop and test and was approved in May of last year in Europe.   Rewiring the Eye: RetroSense, a company that was quickly acquired by Allergan (AGN) for $60 million is currently injecting genes from light-sensing algae into the eyes of a blind person. This was the first time a whole gene from a different species had been used in a human being. It was also the first test in a human of optogenetics, the technique of using light and gene therapy to control nerve cells.   From Gene Replacement to Gene Editing: Today’s gene therapy is about adding genes, to replace one in your body that isn’t working.  Gene editing could be a way to erase such diseases, with a one-time, permanent alteration of a person’s DNA. A scientific resolute, known as the CRISPR technique is often likened to a “search and replace” function for DNA.   It’s a step beyond conventional gene therapy— The gene for dystrophin, for instance, is too large to fit inside a virus, as CRISPR’s DNA-snipping proteins can. And sometimes a faulty gene that’s doing harm needs to be silenced, so adding a new one won’t help. CRISPR’s ability to delete and swap out genetic letters makes a huge new range of treatments possible. Some doctors are now calling CRISPR “gene therapy 2.0.”   In early-stage lab experiments, academic scientists are showing that gene editing offers new ways to attack cancer, to knock out HIV and hepatitis infections, even to reverse blindness and deafness. Companies aren’t far behind. Three startups in the Boston area have already raised a combined $1 billion and partnered with some of the world’s biggest drug companies, like Bayer (BAYN) and Novartis (NVS).   CAR T-cell therapy in cancer: Another exciting development in gene therapy involves the use of the patient’s own immune system to fight off cancer. Known as CAR T-cell therapy, the process involves genetically engineering a patient’s T cells outside the body to produce special receptors called chimeric antigen receptors (CARs). Thus far, there has been tremendous progress made with CAR T-cell therapy as it relates to treating blood cancers. Because of this, many of the bigger biotech companies have been scrambling to partner with specialists in the space. Celgene (CELG) announced a $1 billion deal with Juno Therapeutics (JUNO) to collaborate on several CAR T-cell cancer therapies. The big question is whether or not the early indications for success in blood cancer can translate to successful treatment of solid tumors.   The optimism is based not only on the game-changing potential for the related therapies, but also for the need of big biotechnology companies to diversify their portfolios and how this could lead to more M&A activity in the space. .   Although the gene therapy field has had its share of ups and downs, this once-questionable method of treating diseases now seemingly has the potential to become one of the most game-changing advancements in medical history.
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Credit Scores are Rising: What Does That Mean for Consumer Lending

Credit scores for U.S. consumers just hit a record high. Average scores hit 700 in April 2017, the highest the scores have been since 2005, according to Fair Isaac Corporation. Accompanying the credit score good news is that the share of risky borrowers has hit record lows. Consumers with a score below 600, traditionally considered “risky,” accounted for 20 percent of U.S. adults in the spring of 2017, down from a peak of 25.5 percent in 2010.   Boosting credit scores are the sloughing off of financial mishaps from tarnished credit reports. Over six million U.S. adults will see past personal Chapter 13 bankruptcies disappear from their record over the next five years, a blister that can aggravate an individual’s credit report for seven to 10 years. Chapter 7 bankruptcies too are finally disappearing from credit histories. Around 500,000 Chapter 7 bankruptcy cases were filed in 2007 and over one million in 2010, according to the Administrative Office of the U.S. Courts. But those who filed in 2007 for Chapter 7 protection can breathe a sigh of relief as cases are being expunged from their histories. Mortgage foreclosures, another bane, remain on credit reports for up to seven years, but these are waning. According to Attom Data Solutions, foreclosures peaked in 2009 at 2.1 million, reached 1.8 million in 2010, and remained above the one million mark through 2012.   The Landscape of Lending   The financing industry has experienced a sea change since the financial crisis. Traditional lenders, who rely on credit scores for lending decisions, have faced fierce competition from Fintechs, who use big data to provide rapid financing through apps to iPhone-wielding Gen-Xers and Millennials. Following the recession, qualifying for a loan was difficult, and many people turned to alternative lenders such as Lending Club and OnDeck. With refreshed credit reports, consumer may return to conventional lenders once again, and the competition in this space is palpable.   What does this mean for consumers and the financing industry? How will it affect the alternative lenders, who have thrived since the recession, versus conventional lenders? How will better credit scores affect baby boomers, Gen Xers, and Millennials?   Baby Boomer Borrowing Baby boomers typically have the best credit scores having been fiscally conservative over the years. Baby boomers have held steady jobs and bought houses during better times. However, many are now having to supplement and care for aging parents, which is adding to their financial burden.   As many baby boomers delay retirement and live frugally, they will be encouraged by the economy, improved credit environment, and their access to financing.   Gen-Xer Libation ... At Last   Gen-Xers have struggled to bring up families in difficult economic times. This generation has experienced student loan and credit card debt, a weak job market, and little support from strapped parents. Many are saddled with debt, and Millennial home owners have seen their properties drop in value.   This generation will be happy to see a freer lending market, and Gen-Xers will likely take advantage of their improved scores. With a sensible financial plan, this generation can recover from debt by tackling highest interest loans first.   Millennials Alt-lending Maneuvers   Millennials have been risk-averse and far from eager to jump into debt after seeing the fate of their parents. A 2016 study by FICO found that only 67 percent of 18 and 24-year-old Millennials have a credit card – less than any other age group. But the reluctance to borrow among Millennials has prevented the generation from building a credit history. Consequently, many Millennials are excluded from traditional lending markets because providers base decisions on credit scores.   This group is the most likely to turn to alternative lending when financing a home or a car because they lack a credit profile and face high-interest rates from traditional lenders.   Something for Everyone   While alternative lending might be by-passed by those with a strong credit history, all generations will be affected by a change in regulations expected to occur around the beginning of July. The Consumer Data Industry Association reports that most tax liens and civil judgments will be removed from people's credit scores by July 1, or thereabouts, making the latter half of 2017 rosy for those feeling a little credit-pinched. Almost 1 million Americans could see their credit score improve by up to 20 points, and 700,000 Americans could see their FICO score increase by up to 40 points.  
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