If you have ever played the board game Monopoly, you’ll surely remember how much “rent” you had to pay when you landed on a property with a house or hotel – and how fast that can wipe out your bank account! There’s a real-life financial lesson in this game, and it’s that collecting rent is better than paying it.

For those that pay rent, there is a new opportunity that can help you start collecting it sooner. If you are among the 50 million Americans who have little credit history, or no score at all, but you pay either rent or a seller-financed mortgage, and/or other bills on-time, like your cell phone, electric, insurance, etc. there is a new and legitimate way to add this missing information to your credit score, just as homeowners do with their mortgage payments. To learn more click here.

Pay Rent, Build Credit (PRBC) is helping individuals and families take important first steps towards asset-based wealth because the higher your score, the more money you can save on auto loans, mortgages, and other big-ticket items. This monthly cash savings enables hard working families to save and build wealth through insured-savings, investment, education, and the purchase of traditionally appreciating assets such as real estate - homeownership and income-producing property. To learn more, read about PRBC on BusinessWeek Magazine.

Michael Nathans is the founder and chairman of Pay Rent, Build Credit, Inc., a national FCRA compliant credit bureau.

The California Homeownership Preservation Initiative has announced that over the next two years, mortgage counseling agencies will receive $5 million to conduct outreach, hire, and train mortgage counselors throughout the state.

It is predicted that half a million California mortgage borrowers will struggle to make payments on their home loans in the next two years. To address this growing need, grants have been awarded to 39 mortgage counseling agencies enabling them to serve over 40,000 troubled home loan borrowers residing predominantly in low-moderate income neighborhoods, communities most impacted by predatory subprime loans.

California Reinvestment Coalition partnered with Merryl Lynch, HSBC-North America, Wachovia Bank, Comercia Bank, Wells Fargo Bank, Countrywide Financial, Citi, Bank of America, Washington Mutual, JP Morgan Chase, San Francisco Foundation, and California Community Foundation to create this $5 million initiative.

Now that Congress and the White House have agreed on an economic stimulus package to spur spending and try to keep the U.S. economy from going into recession (if it isn’t there already), it’s time to think about ways to encourage more saving and investing in America.

Millions of Americans are barely getting by, living from paycheck to paycheck, or going into debt using high-cost financial services. One in five families lacks sufficient assets to survive at the federal poverty level for three months if they lose their income, according to CFED’s 2007-2008 Assets & Opportunity Scorecard.

What messages are workers and families in America hearing every day? Spend, spend, spend. Although continued consumer spending might help the broader economy and some families to stay afloat in the short term, this continued spending craze is not helping families living on the edge to become more financially secure in the long term.

What we need are policies that encourage people to save — for a rainy day, for home ownership, for college, for retirement, and for their children’s futures. Most of the current policies that encourage saving and investing primarily benefit those who already have assets. We need policies that also help low-income families to save and build wealth.

States and tribal governments can encourage public benefit recipients to use mainstream financial services and begin saving for the future by counting financial education as a welfare work activity, eliminating asset limits that discourage saving, facilitating direct deposit of cash benefits, supporting free tax counseling and preparation programs, and allowing taxpayers to split state refunds. Allowing self-employment as a welfare work activity and supporting car ownership programs expands the range of work options available to low-wage workers.

States, schools, and banks can partner to develop teen bank programs that bring a new generation into the financial mainstream and prepare teens for jobs in the high tech financial services industry. Savings programs such as Individual Development Accounts, Lifelong Learning Accounts, Family Self-Sufficiency accounts for public housing residents, universal Child Development Accounts, and automatic enrollment into portable retirement accounts help adults and children save for postsecondary education and training, homeownership, small business development, retirement, and other asset goals.

Banks and credit unions can partner with cities and states to bring everyone into the financial mainstream through innovative programs such as Bank on California and America Saves.

Policies that protect consumers from high cost financial services such as check cashing, payday loans and consumer installment loans, refund anticipation loans, and predatory mortgage loans allow people to redirect those resources into savings and investments.

Let’s work to implement these policies and encourage people to save, save, save!

Dory is Supervising Attorney for Community Investment at the Sargent Shriver National Center on Poverty Law in Chicago. For more information, contact Dory Rand at 312.368.2007 or doryrand@povertylaw.org.

Adjustable Rate Mortgages originated during the housing boom are expected to reset for tens of thousands of families in California in the coming year. An overwhelming number of California homeowners will be looking to modify the terms of their loans as payments become unaffordable. Anticipating the growing need for effective housing counselors in the State, the California Reinvestment Coalition has raised $4 million dollars in funding from major financial institutions for a two year initiative aimed at increasing capacity of mortgage counselors to better assist troubled homeowners.

Thus far Merrill Lynch, HSBC, Wachovia, Countrywide, Comerica, Wells Fargo, Bank of America, and Citibank have contributed to this program and fundraising efforts are ongoing.

CRC expects to work with partners to issue an RFP making funds available for housing counseling agencies to help families suffering from the sub prime crisis.

The APIC blog will post updates on this RFP as the project evolves.

Under a recent plan announced by Governor Arnold Schwarzenegger, four major subprime lenders promised to freeze the initial, lower mortgage interest rates for subprime borrowers who cannot afford their escalating mortgage payments. According to Barclays research estimates, this will help about 12 percent of borrows with adjustable-rate subprime loans.

Countrywide Financial Corp., GMAC Mortgage, Litton Loan Servicing and HomeEq Servicing—together have serviced more than 25% of California’s subprime loans, however under this voluntary agreement, the four lenders have agreed to contact borrowers before their rates adjust and establish a streamlined process for handling loan modifications. To qualify for this special program, the borrower is required to occupy the home, have made their payments on time, and prove they cannot afford payments with the higher interest rate.

The agreement states that all four loan servicers will provide this interest freeze program for a ‘sustainable’ period of time.

“Lenders could freeze rates for five years or longer, but terms will depend upon each borrower’s situation” Schwarzenegger said.

“We’ve been in like a desert of despair. There’s not been any good news, and it had not appeared the state was taking sufficient steps to intervene…This seems to be a significant step.” Said Kevin Stein, associate director of the California Reinvestment Coalition who was quoted in The Sacramento Bee. Advocates for lending policy change remain cautiously optimistic about the impact of these approaches, and note that the real impact will be driven by program design details.

I was just a child during the Vietnam War. It didn’t really register for me. When I moved to San Francisco as a young adult and did advocacy work with homeless people, I was upset to learn that a third of the folks on the city’s street were military veterans and most had served in Vietnam. They were soldiers who returned from the trauma of war, to a country ambivalent (at best) about their service and shamefully unprepared to help them make their way back to a stable civilian life.

Fast-forward thirty years. America is again engaged in a protracted, potentially futile, certainly unpopular war. But now I’m a grown up; this war is happening on my generation’s watch. The people fighting are our peers, and some are even our children. Regardless of what we think about the current war, it is imperative that we not neglect our soldiers, as this country did after Vietnam. We must remember that for the soldiers, the struggle isn’t over when the war ends.

Already more than one third of Iraq and Afghanistan war veterans are suffering from post traumatic stress disorder (PTSD) or traumatic brain injury (or both), and these numbers are certain to grow. Forty percent of our soldiers are Reservists and National Guard members.

They tend to be older and have left behind families, financial responsibilities and jobs. After serving multiple tours, they are too often returning to find their jobs gone and their families in economic distress.

Unemployment among young veterans (ages 20-24) is currently 15%, three times the national average for this age group. And preliminary research shows extremely high rates of sexual trauma for women in the service (20%-40%), making them particularly vulnerable to PTSD.

Some of our policymakers are waking up to this reality, recognizing that many veterans and their families will need substantial services and opportunities to successfully transition back to civilian life. In its November e-newsletter, APIC highlights recent legislation including the proposed Twenty-First Century GI Bill of Rights Act (SB1409), which would expand education benefits, business development assistance and favorable homeownership financing for veterans of the Iraq and Afghanistan wars.

These are critical initiatives. But those of us devoted to helping low-income people build wealth and achieve lasting economic advancement also need to take a fresh look at this issue: How can we tailor asset-building strategies to ensure they reach and are of value to veterans and their families? It is a challenge well-worth grappling with and I look forward to your thoughts.

Amanda Feinstein is the Program Officer for Economic Security at the Walter and Elise Haas Fund in San Francisco.

California is ground zero in the nation’s subprime mortgage foreclosure crisis. According to Realty Trac, California ranks third among all states, and is home to six of the 10 hardest hit metropolitan areas in the country, from Sacramento down to Stockton and Fresno, and through the Inland Empire to San Diego. Like the demographics of subprime lending, foreclosures are falling disproportionately on Latino and African-American homeowners, taking not just most of their wealth, but also the chance to pass along wealth to their children. All told, more than one in five of all subprime mortgages originated in 2006 will end in foreclosure, with as many as 500,000 lost homes coming from loans made between 1998 and 2006. And foreclosure stories dot the front pages and business pages of all California’s major dailies.

Despite the large and growing sweep of the foreclosure problem, the response of state lawmakers has been muted. Unlike other hard hit states like Ohio, Massachusetts and Colorado, California lawmakers have not even attempted to provide any relief to subprime borrowers who are at risk of foreclosure. These states have mobilized stakeholders, energy and resources to fund and train housing counselors to help borrowers negotiate with lenders and have crafted creative financing mechanisms to help borrowers in crisis. Other states, like North Carolina and Maine, have embraced far-reaching reforms to provide subprime borrowers with greater protections in the future. By contrast, California took almost a year to enact limited federal regulatory protections (after 35 other states) and passed ineffective reforms to the appraisal process. Lawmakers could not even agree on providing non-English speakers the right to receive a simple summary of key terms in their native language.

I’m not sure what explains the lack of attention to this immediate crisis which threatens to plummet California’s economy into recession, though I have a few theories. First, the crisis emerged last winter well after the state’s big ticket legislative agenda—including prison reform, the state budget and health care reform had been set. Second, the legislature’s banking committees are dominated by industry-friendly moderates who are expected to generate large campaign contributions from banks and other mortgage lenders, while those affected by foreclosures are a diffuse, disorganized constituency who don’t necessarily look to Sacramento for help. Third, the sheer size and scope of the problem may have paralyzed lawmakers from attempting to tackle it despite the massive media attention.

Whatever the reason, it’s time for the legislature and the governor to show some leadership and work immediately to help borrowers at risk of losing their homes right now and provide subprime borrowers with greater protections in the future.

Paul Leonard directs the California operations of the Center for Responsible Lending (CRL) a non-profit, non-partisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation’s largest community development financial institutions.

Speaking to the Congressional Black Caucus, Democratic front-runner Hilary Clinton spoke about her baby bond proposal saying, “I like the idea of giving every baby born in America a $5,000 account that will grow over time so when that young person turns 18, if they have finished high school they will be able to access it to go to college, or maybe they will be able to put that down payment on their first home, or go into business.”

Her announcement sparked a short, but heated national debate over the feasibility and success of such a policy. Rudolph W. Giuliani opposed Clinton’s idea saying, “Now, I know this never occurs to the people like Hillary and the other Democrats here in Washington…[that] This costs money.”

The Los Angeles Times published an article in reference to the criticism and the negative media spin sparked by her proposal. The LA times argued that baby bonds are actually more feasible than critics claim. Not only do similar policies enjoy bipartisan support in the US, but countries such as Britain have instituted very similar programs. “The intellectual history of this idea is property ownership…the idea is to put children on a path toward lifetime savings and wealth accumulation, a notion that appeals to conservatives and liberals” said Ray Boshara, Director of the Asset Building Program at the New America Foundation.

For example, “When everyone was talking about Social Security and savings and retirement security, this was the only idea that brought Democrats and Republicans together.” Boshara argued in a recent piece in the Washington Post.

Unfortunately, Clinton has publicly disavowed her baby bond idea, declaring to the Wall Street Journal that it was off the table. Policy makers and advocates of similar policies such as the ASPIRE Act are sad to lose Clinton’s ability to give currency to this idea. Hilary’s public disavowal begs the question of whether the asset building field risks losing further momentum after her change of heart.

The good news is that Hilary is offering new savings plans that would match every 401(k) retirement account up to $1,000 annually. Here’s hoping this proposal has a longer shelf life!

California fares poorly—receiving an overall “C” grade—in the 2007-2008 Assets and Opportunity Scorecard, a biannual report released by the national Corporation for Enterprise Development (cfed). This report presents a comprehensive look at wealth, poverty, and the financial security of families on a national and state level. The 50 states, along with the District of Columbia, are assessed on 46 performance measures in five major areas: financial security, business development, homeownership, healthcare, and education.

According to the report, California is at the forefront of small business development, receiving an “A” grade for Business Vitality. However, California still has a long way to go in areas of asset poverty, homeownership, and access to health care. For example, California ranked:

• 39th in asset poverty
• 50th in affordability of homes
• 51st in median mortgage debt
• 49th in homeownership rates
• 42nd in percentage of uninsured low-income children
• 39th in percentage low income parents without health insurance

Overwhelming new data for the golden state indicates a need for:

• More asset-building saving programs
• State earned income tax
• A public health insurance programs to cover all low-income residents
• Eliminating asset limits on public benefit programs such as CalWORKs and MediCal

Grim data such as this is just the beginning if legislatures and advocates fail to respond to California’s growing insecurity.

Countrywide Financial Corporation, one of our nation’s largest mortgage lenders is under heat for allegedly selling high cost, subprime loans to borrowers who would otherwise qualify for more favorable loans.

Inside the Countrywide Lending Spree, an article recently published in the New York Times, accused Countrywide for swindling many of its borrowers by only offering high cost or subprime loans to clients during the mortgage lending boom. For years brokers and sales representatives in the subprime unit were unable to input borrowers’ cash reserves when assessing risk and determining the kind of loan the borrower would get access to. This meant the borrower was able to show fewer assets and thus posed a higher risk, ultimately giving lenders free reign to offer high cost or even subprime loans to clients.

According to this article, one of the reasons subprime loans are lucrative for Countrywide is because “…investors who bought securities backed by the mortgages were willing to pay more for loans with prepayment penalties and those whose interest rates were going to reset at higher levels. Investors ponied up because pools of subprime loans were likely to generate a larger cash flow than prime loans that carried lower fixed rates.” Therefore, the company’s incentive structure provides higher commission rates to brokers who sell risky subprime loans. For example, a broker who sold subprime loans made 0.50 percent of the loan’s value while receiving only 0.20 percent on loans that were slightly more favorable.

Last year 45 percent of Countrywide’s loans carried adjustable rates and because Countrywide has a large presence in California, more than 46 percent of Countrywide’s clients are Californians.

“As of June 30, almost one in four subprime loans that Countrywide services was delinquent, up from 15 percent in the same period last year, according to company filings. Almost 10 percent were delinquent by 90 days or more, compared with last year’s rate of 5.35 percent.”

The “spin” coming from spokespeople in the lending industry, and from elected officials on both sides of the aisle is that the current crisis was spurred by consumers’ irresponsible choices. But stories like the NYT piece on Countrywide’s incentive structure force us to re-evaluate the way we should consider the context in which these choices were made. Is this not similar to the debate about where to draw the line between allowing people to purchase cigarettes knowing they cause cancer? Rather than placing the blame solely on consumers, policy makers should take a hard look at the way the lending industry and its regulators operate.