Are your friends credit-worthy?

The news this week that really caught my attention was about social media being used to determine your credit worthiness.  MSN Money gives examples of 2 lending companies, though there are others, that are using the credit histories of your Facebook friends to judge just how likely you are to pay your debts on time.

Lenddo, their first example, scans your Facebook friends for payment and default data.  This is just one of the thousands of  'points' lenders are now using.  Another company, Kreditech, out of Germany, uses up to 8,000 data 'points' when assessing a loan application.  They not only use Facebook data but also eBay and Amazon accounts as well.  They also look at the amount of time people spend reading over the company's on-line application and give negative assessments to those that fill out the form in all-caps or no caps.

Since they have access to information on people that most of us don't, perhaps the wave of the future will include a credit report attachment whenever you send a friend request to someone of Facebook.  But for now, maybe it's a good idea to brush up on your keyboard skills.

Upsizing and Downsizing: Titillating Tidbits

One segment of the real estate market that keeps the business chugging along is people needing more room or less room. While it is possible to get a Huntington Beach home with 10,000+ square feet, Fountain Valley homes are more 'quaint',  topping out at a more manageable size of 4000+ square feet.  In both cities you can buy a home as small as about 500 square feet.  But what about famous people?  Funny you should ask.   Here's some figures I found online:

Even the very wealthy downsize sometimes.  Margrit Mondavi, widow of Robert Mondavi, now has a new home.  Their Napa Valley Estate was 11,500 square foot storied property including a pool in the living room.

Now, she lives in a 2 bedroom and 2 and one half bath home in Napa.  She converted a 3000 square foot, 4 bedroom and 5 bath home, and it has all the amenities you would ever desire.

Her price downsize: $25M to $4M.

On the other side-upsizing:  Rihanna, 25, singer, bought a 11,000 square footer for $12M; Sean Parker, 33, Napster founder, a $20M Manhattan townhouse; Justin Bieber, 19, a $6.5M in Calabasas Park; Chelsea Clinton, 33, Stanford Grad and her husband, a $10M full-floor condo in Manhattan; Katy Perry, 28, pop star, a $11.2M in Hollywood Hills; Megan Ellison, 27, daughter of Larry Ellison who founded some small company, three houses including one for $14M; Ekaterina Rybolovleva, 24, daughter of a Russian Billionaire, $88 Manhattan penthouse.

 I will console myself with the knowledge that those houses would take way too long to clean...

California's newest tax and real estate

We knew this was coming. Of course it hits those making over $1 million a year.  But Orange County has a fair number of people in that category so it will have some impact here.  I got this from an online source called RE-Insider:

"Many of California’s richest entrepreneurs have begun to move out to Nevada for one reason – to avoid personal state income taxes. Since the passing of Proposition 30 this past November, income tax has increased by almost 30% for those who make over $1 million a year – a tax of 13.3%.

This increase has led many to flee the state, and Nevada – a state with no personal income tax – seems to be one of their favorite places to establish primary residence. This is easier for wealthy individuals who are empty nesters rather than those with school aged children.
....With the increase of personal income tax brought on by Proposition 30, many potential out-of-state buyers may be deterred to move to California. This is especially true considering that the state now has the highest personal income tax in the nation, as well as some of the highest corporate taxes and sales taxes out of all the states.

The impact that this increase in taxes will have is still unknown, but we will surely see the effects in upcoming months. "

My first thought of Nevada is Las Vegas, a hot, busy place.  But there's also Lake Tahoe, a beautiful city that straddles the border of California and Nevada.  And while it has winter, which many Californians disdain, there are those that may find winter palatable if they are able to keep substantially more of their wealth.  Plus, Tahoe to Sacramento is just 104 miles, so in a couple of hours people can be right in the heart of a major California city.  I think that if I was in that $1 million + category it would be a tempting consideration.  But then, I'd have to be able to afford to move my extended family there too.