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This is great news for all of us.

The nation's struggling economy is one step closer to receiving a huge shot in the arm as both the House and the Senate overwhelmingly pass an emergency aid package. President Bush indicates he will sign the legislation, which includes sending rebate checks of $600 to $1,200 to most taxpayers -- possibly by May.Congress, facing the prospect of an election-year recession, passed an emergency plan Thursday that rushes rebates of $600 to $1,200 to most taxpayers and $300 checks to disabled veterans, the elderly and other low-income people. President Bush indicated he would sign the measure.

House passage by a 380-34 vote came a few hours after Senate leaders ended a drawn-out stalemate over the bill. Still, by congressional standards, lawmakers approved the legislation with exceptional speed to jolt the weak economy. The plan, which adds $168 billion to the deficit over two years, is intended to provide cash for people to spend and tax relief for businesses to make new investments — boosts for an economy battered by a housing downturn and credit crunch.

1. DON’T APPLY FOR NEW CREDIT OF ANY KIND. Including those “You have been pre-approved” credit card invitations that you receive in the mail. Every time that you have your credit pulled by a potential creditor or lender, you lose points from your credit score immediately. Depending on the elements in your current credit report, you could lose anywhere from 2-50 points for one hard inquiry.

2. DON’T PAY OFF COLLECTIONS OR CHARGE OFFS during the loan process. Paying collections will decrease the credit score immediately due to the date of last activity becoming recent. If you want to pay off old accounts, do it through escrow, and make sure that 1) you validate that the debt is yours, and 2) that the creditor agrees to give you a letter of deletion.

3. DON’T CLOSE CREDIT CARD ACCOUNTS. If you close a credit card account it will appear to the FICO that your debt ratio has gone up. Also, closing a card will affect other factors in the score such as length of credit history. If you have to close a credit card account, do it after closing, and make sure it is a more recent account.

4. DON’T MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD ACCOUNTS. This is the fastest way to bring your score down 50-100 points immediately. Try to keep your credit card balances below 30% of their available limit at all times during the loan process. If you decide to pay down balances, do it across the board. Meaning, make an extra payment on all of your cards at the same time.

5. DON’T CONSOLIDATE YOUR DEBT ONTO 1 OR 2 CREDIT CARDS. It seems like it would be the smart thing to do, however, when you consolidate all of your debt onto one card, it appears that you are maxed out on that card, and the system will penalize you as mentioned above in 4. If you want to save money on credit card interest rates, wait until after closing.

6. DON’T DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM. This would include adding new accounts, co-signing on a loan, changing your name or address with the bureaus. The less activity on your reports during the loan process, the better.

7. DO JOIN A CREDIT WATCH PROGRAM. If you join a credit watch program, you can check your reports weekly, or even daily depending on the program you select. (When you pull your own reports, you don’t get dinged for a hard inquiry.) This way, if something does show up on your reports that have caused your score to go down, you’ll know it immediately, and you may be able to take care of the problem before closing.

8. DO STAY CURRENT ON EXISTINGING ACCOUNTS. Like your mortgage and car payments. One 30-day late can cost you anywhere from 30-75.

9. DO CONTINUE TO USE YOUR CREDIT AS NORMAL. Red Flags are raised easily with the scoring system. If it appears that

You are changing your pattern, it will raise a red flag, and your score could go down.

10. DO CALL YOUR BROKER if you receive something in the mail from a creditor or collection agency that you may be able to supply you with the resources you need to stop any derogatory reporting to the bureaus. Believe may affect your score during the loan process.

FirstTrust Financial

New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast a continues snide in 2008 as the housing market braces for anticipated recession.

National reports per msn.com reported Monday that “sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.”

The government is currently reporting that the average price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.

While sellers are taking it on the chin right now, it is a buyers market thus keeping the mortgage industry in busy times. With refinance, mortgage cash outs and investment property being a hot commodity the mortgage industry is prepared to report record numbers in 2008.

The prolonged slump in housing is raising concerns that the weakness could be severe enough to push the country into a full-blown recession. In an effort to guard against that threat, the Federal Reserve cut a key interest rate last week by the largest amount in more than two decades with a further rate cut expected on Wednesday when the Fed completes a two-day meeting.
President Bush and House leaders reached agreement on a $150 billion economic stimulus package last week which included items to boost housing by increasing the size of the mortgages that Fannie Mae and Freddie Mac and the Federal Housing Administration can handle. But critics said the continued plunge in housing showed that more dramatic action is needed.