Financial Update For June 21, 2010

• TSX -18.38 record bullion prices kept a lid on otherwise broad-based losses across nearly all sectors.
• DOW +16.47
• Dollar +.55c to 97.92cUS
• Oil +$.39 to $76.79US per barrel.
Gold +$9.70 to $1,257.40 USD per ounce a new record high close for gold as investors bought the metal to protect wealth from Europe’s financial turbulence and on concern that the economic recovery isn’t as strong as expected. Gold, up 15% this year, is heading for its 8th straight weekly gain and its 10th consecutive annual gain, the longest winning streak since at least 1920


Seeing through home sellers' camouflage
by Stephanie Farrington, Bankrate.com
Mortgage rates have started to climb again. While that's probably a good sign for the economy, it may also be a wake-up call for people who have been hitting the snooze button on the time in which they hoped to buy a house.

If you're one of the many Canadians just entering the buyer's market, it's easy to get caught up in the critical aspects of home buying and forget some of the details. The clock is ticking, rates are rising and what matters in a house is location, location, location, right?

Yes and no. Location matters, but if you're not careful and observant when making your choice, you could get a great location and still end up with a money pit.

In some cases, people anxious to sell their home have been known to make a few cosmetic adjustments to hide the areas where their house might need a little extra care or even some serious repairs. Here's what to watch out for.

A fresh coat of paint in the basement

Dean Langner, a Canadian Residential Appraiser, or CRA, with Kors & Associates, in Victoria, has worked for 15 years as an appraiser and home inspector. During that time, he's seen a lot.

"One thing I find suspicious is a recently painted concrete floor and two or three feet of foundation in an unfinished basement," he says. "A lot of times, basements will leak, and they'll get that mineral stain around the concrete. Before they sell, some owners will cover it up with a coat of paint."
Langner says if you suspect a problem, go back for a second visit. "The only way to tell is to wait for a good heavy rain and visit again to check for moisture. If you're still uncertain, you can hire a plumber with a camera, and they can look down the pipes."

Checking pipes like this is not done in the course of a usual inspection, but Langner says it's worth making it a condition of the sale if you're really worried, because drainage problems can be very difficult to fix.

New sewage or drainage pipes

Around the foundation of every house is a permanent, porous piping system, called weeping tile, that acts as a drain and keeps water from entering your basement. "Over time, this pipe can fail. It can fill with debris and mud and stuff, and it is not easily fixed," says Langner.

In older houses, weeping tile isn't even made of pipes -- it's a series of half-round, clay tiles placed next to each other. So, if the house or the land shifts, you could be in for trouble.

The money you spend to have a plumber look at your drains could end up saving you thousands of dollars, to say nothing of the time and inconvenience of digging a trench around the perimeter of your house to replace the draining system.

A recently pumped septic tank

Jeffrey D. Leiser, author of "The Home Buying Inspection Guide" and "You Can Sell Your House: For Sale By Owner," has his own cautionary tales about plumbing. "The worst is when a home owner is hiding problems with a septic or sewer system. Having the septic tank pumped out prior to an inspection can give the appearance of a well working system," he says. "A failed septic system can cost well over $20,000 in replacement costs."

He says sewer systems can also be bladed -- which involves using a long tube with a rotating blade at one end to clean pipes and cut out blockages -- so that they appear to be working without backups. But, again, this is a short-term solution to an expensive, long-term problem.

Unusual smells

Your senses are your first and one of your best methods of avoiding deception. Mould smells like mould. It's easy to hide the visual signs of mould with paint, but it's a hard smell to mask. Don't be afraid to sniff around any area that makes you feel uneasy.

Suspicious piles and large plants

If something looks out of place, ask about it. A pile of bricks stacked against the side of the house could just be a pile of bricks, but it could also be a way of hiding a cracked foundation.

That newly planted yet mature tree in the back yard, the one in front of the retaining wall? Look behind it. Just as people will paint over stains, they sometimes landscape over cracked retaining walls or other problem areas.

Protect yourself

Follow your gut. If you think someone is lying to you, ask more questions and use your written offer as a means to get the truth. Contracts are there to protect you, and conditions of sale are a good way to ensure you're covered. If you're unsure about how to do this, ask your real estate agent or your lawyer, but do not go in unprotected. It's usually easier to avoid buying a problem than it is to fix it.

If, in the end, you find yourself left holding the bag despite your best efforts, where can you turn?

Danny Berehula, director of the Saskatchewan branch of the Better Business Bureau, or BBB, says the BBB will try to help, but the help they can offer is limited because the transaction does not typically take place between a business and an individual but rather between two individuals.

"We're another resource for them, but most people, when this happens, would probably want to call their lawyer," he says. "There are laws in place, and if it's a serious matter, then it will become a legal matter. They can use us as a mediation service, but once it becomes a legal issue, we stand out of it."

So, take your time and think through your purchase carefully. All of the experts agree on one point -- sometimes you have to accept a few problems to get your dream house, but it's best to understand how much the trouble your home might cost you before you sign on the bottom line. http://ca.finance.yahoo.com/personal-finance/article/bankratecanada/1597/seeing-through-home-sellers-camouflage

RBC to fund programs helping Canadians avoid credit problems
Garry Marr, National Post • Sunday, Jun. 20, 2010
You find yourself deep in debt and you can’t get out. Who is responsible? Is it the financial institution who handed you the rope you used to hang yourself? Or should you be looking in the mirror?
This past week, Credit Counselling Canada awarded Royal Bank of Canada with its creditor of the year award. “They won it for thinking outside the box,” says Patricia White, executive director of the Toronto-based group.
For years, not-for-profit credit counselling groups have received donations from banks to assist their debt management services. Credit counselling agencies help people organize their finances to avoid bankruptcy. But RBC is also giving money to financial education aimed at helping Canadians — especially younger ones — avoid debt problems.
Until they come up with a vaccine for taking on debt you can’t afford, a little preventative education is probably the next best thing.
“Hopefully, it will stop people from getting into trouble in the first place,” said Ms. White, noting other banks have also been supportive of counselling and education. “But RBC has stood up and said they will support this with some funding. We already go into high schools, but this will help us do more.”
With Father’s Day tomorrow, I can’t help think there is an important role for parents to play in terms of helping children avoid serious credit problems.
Ms. White agrees. “As a parent, I started educating my kids early. I said here’s 5¢ and tried to get them to understand the value of money.”
A survey out of the United States this week by the National Foundation for Credit Counseling found 41% of Americans say they learned their personal finance skills from their parents. Is there any reason to believe Canadian children are any different?
The funny part is, the same U.S. survey asked parents to rate their own financial literacy and 34% gave themselves a grade of C, D or an F. At least they are being honest.
The U.S. group points out that children learn by watching. If they see you saving, they’ll save. If they see you unorganized with your expenses, guess what? The group also suggests involving your children in family financial decisions.
Jeff Bennett, managing director of RBC Collections, says educating consumers earlier in their lives is something the bank is interested in promoting. “We are trying to separate the two important components the not-for-profit credit counselling firms are doing — the educational and financial literacy component from the debt management and budgeting component,” he says.
“We’d like to move things further up in the life cycle to keep people out of trouble, rather than helping them once they are in trouble.”
While some people blame the high interest rates the banks charge on things like credit cards for getting them into trouble, Mr. Bennett says financial institutions have no interest in seeing customers wrestle with debt problems.
“The best thing we can have is a customer who understands the financial requirements of his life and makes plans for the future. Someone who doesn’t have problems is a happy client and a client who will refer people to us,” he says.
Everybody has a role in financial education and Mr. Bennett says it’s never too early to begin teaching about money.
Read more: http://www.financialpost.com/news/fund+programs+helping+Canadians+avoid+credit+problems/3166884/story.html#ixzz0rU9rbZkJ