Wells Fargo Sued In Illinois For Allegedly Pushing Mortgages On Borrowers Who Couldn’t Repay

Wells Fargo Sued In Illinois For Allegedly Pushing Mortgages On Borrowers Who Couldn’t Repay

(Hammerin Man)

Five years on from the nadir of the housing crisis and the lawsuits against the few remaining big banks continue to be filed. This time, it’s Wells Fargo being sued by prosecutors in Cook County, IL (home to Chicago), alleging that the bank deliberately issued “predatory” high-interest, subprime loans to borrowers — primarily minority — who may not have been able to pay back those loans.

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Thinking of buying a fund this month? Think again

Thinking of buying a fund this month? Think againBroken pencil on financial newspaper(Photo: Stockbyte, Getty Images)If you’re a mutual fund investor, and thinking of buying a fund in a taxable account between now and Dec. 31, here’s a tip: Don’t.Mutual funds typically distribute their taxable gains as well as dividends once a year, and usually that’s in December. You owe taxes on those distributions. If you buy just before the fund pays out its distributions, you’re paying taxes on gains you didn’t enjoy during the year.Here’s one example of how it works. Fidelity Investments released its distribution estimates for 2014 on Tuesday. Contrafund, one of its largest stock funds, will pay 25.5 cents per share in qualified dividends and $5.92 per share in long-term capital gains.For someone with 100 shares of Contrafund who was in the 25% tax bracket, that would mean:A qualified dividend distribution of $25.40. The tax on qualified dividends for those in the 25% tax bracket is 15%, so the investor would owe $6.36.A long-term gains distribution of $592. The tax on long-term gains for those in the 25% tax bracket is also 15%, so the investor would owe $148 in capital gains taxes.Total tax bill: $154.35.AS of Nov. 24, 100 shares of Contrafund would be worth $10,439, so the extra tax hit would be just 1.48% of our fictional investor’s holdings. Other funds are reporting larger tax distributions: Vanguard’s Morgan Growth fund, for example, will pay out $2.81 per share in capital gains, which represents about 10.09% of the fund’s share price.Taxes can be a drag on performance over the long term. Contrafund has gained an average 10.35% a year the past decade, according to Morningstar. After taxes, that return shrinks to 9.66% a year. (Those returns are after Contrafund’s ongoing expenses.)USA TODAYRegan: Stock rally not done because it's 'game on' for the FedFunds have to net out gains and losses on securities they have sold. They pass on any capital gains or income to shareholders, who pay taxes on the distribution.After five years of a bull market, capital gains distributions are getting larger, says Russel Kinnel, director of mutual fund research for Morningstar. “Most of the big fund shops have their estimates out, and they look bigger to me,” he says. Furthermore, most funds have exhausted any accumulated capital losses from the bear market, which could reduce those capital gains payoffs.The easiest way to avoid capital gains distributions is to invest through a retirement account, where you can either defer or eliminate taxes on gains and distributions. You can minimize gains by investing in index funds, which often – but not always – minimize capital gains payouts.

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