The Ticker

Fed: Student loan 
deliquencies soar

Student loans had a higher delinquency rate than credit cards, auto loans and home mortgages over the past three years, the Federal Reserve Bank of New York reported recently.

Outstanding student loans in the country have reached $1.16 trillion, an increase of $77 billion from a year ago. About 11.3 percent were in default — more than 90 days delinquent — in the last quarter of 2014, compared with 11.1 percent in the previous quarter.

By comparison, 3.5 percent of car loans were past due, as were just 3.1 percent of mortgage loans.

"Although we've seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student loan balances and delinquencies is concerning," Donghoon Lee, research officer at the Federal Reserve Bank of New York, said in a statement.

But even as borrowers struggle to make payments, more continue to jump into the loan pool to help finance their schooling. Moreover, the age of student-loan borrowers is creeping upward. More than a third are older than 40, according to the New York Fed's Liberty Street Economics blog.

Vermont defends Gruber contract

A top aide to Vermont Gov. Peter Shumlin is defending the administration's handling of a contract with Massachusetts Institute of Technology health economist Jonathan Gruber, after criticisms were lodged by the state auditor.

Administration Secretary Justin Johnson made public his reply to Vermont Auditor Doug Hoffer, in which Johnson says officials in the state office of health care reform kept a close eye on work done by Gruber.

Hoffer says the evidence suggests that Gruber overstated the hours worked by a $100-per-hour research assistant, and that top state health care officials ignored the obvious signs that something was amiss.

The state rewrote its contract with Gruber after he generated national headlines when videos were released of him talking about the "stupidity of the American voter."

Today

 Standard & Poor's releases S&P/Case-Shiller index of home prices for December and the fourth quarter.

 The Conference Board releases the Consumer Confidence Index for February.

TOMORROW

 Commerce Department releases new home sales for January.

THE SHUFFLE

CBRE Group Inc. announced that Todd Trehubenko has joined CBRE Capital Markets' debt & structured finance team as senior vice president. Based in Boston, he will originate multifamily loans with a particular focus on FHA-insured debt. Trehubenko previously worked at Walker & Dunlop, and also served as CEO of Recap Real Estate Advisors in Boston.

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Boston.com hires two editors

Boston Globe affiliate website Boston.com yesterday announced the hiring of two new editors to "strengthen a website beset by controversy."

Editor Tim Molloy and Deputy Editor Kaitlyn Johnston will begin March 16.

"Bringing in two great, experienced journalists with sound judgment and strong experience can only improve our process for telling great stories," Corey Gottlieb, Boston.com's general manager, told the Herald. Molloy was the digital editor for the PBS news magazine "Frontline." Johnston was digital editor at Boston magazine.

Boston.com was stung when a former deputy editor hawked T-shirts poking fun of a Harvard professor embroiled in a $4 flap with a Chinese restaurant owner — a story she reported on — and posted an article accusing the professor of sending a racist email. Another editor was fired for making light of death threats to U.S. House Speaker John Boehner.

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IUDs, hormone implants growing more popular among US women

CHICAGO — Long-acting but reversible methods of birth control are becoming increasingly popular among U.S. women, with IUDs redesigned after safety scares and the development of under-the-skin hormone implants, a government report shows.

Birth control pills remain the most popular contraceptive method nationwide, but intrauterine devices and implants are more effective at preventing pregnancy and they last for several years.

Highlights of the new report, released Tuesday by the Centers for Disease Control and Prevention:

RISING USE

National surveys show 7 percent of U.S. reproductive-aged women used long-acting contraceptives in 2011-13, up from less than 2 percent in 2002. The most popular are IUDs, T-shaped devices containing hormones or copper that are inserted into the womb. They can work for up to about 10 years. Implants are matchstick-size plastic rods containing hormones that are inserted beneath the skin of the upper arm. They last about three years. Both types can cost hundreds of dollars but should be covered with no co-pays by most insurance plans under contraception mandates of the Affordable Care Act.

Long-acting contraceptives were used most by women in their mid-20s and 30s — 11 percent or more than double the rate in younger or older women. They were also more popular with women who had at least one child, versus those who'd never given birth. Use increased among whites, blacks and Hispanics from 2006-2013.

HISTORY

IUD use dropped sharply nationwide after serious complications linked with a now-defunct brand in the 1970s, but other brands have been redesigned. Hormonal implants using several small rods were introduced in the United States in the 1990s; single-rod implants became available about 10 years later.

The American College of Obstetricians and Gynecologists recommended IUDs and implants as the most effective forms of reversible birth control in 2011 and called them safe for most women. Both long-acting methods are nearly 100 percent effective, with lower failure rates than birth control pills, patches and injections.

The brief report suggests newer IUD designs and availability of implants that last as long as some IUDs may make these methods appealing for more women, though it doesn't include specific reasons for the rise in popularity. 

OTHER METHODS

Among the nearly 61 million U.S. women aged 15-44, almost two-thirds used some form of contraception in 2011-13, an earlier CDC report found. Pills were the most common, used by 16 percent. About 15 percent chose sterilization but its popularity declined during those years. About 9 percent chose male condoms, which unlike pills and long-acting forms, protect against sexually transmitted diseases.

___

Online:

CDC: http://tinyurl.com/86pez7a

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Plugged-in blower is no ordinary Joe

Snow Joe SJ623E Ultra Electric Snow Thrower (SnowJoe.com, $249.99)

This review was done under duress, following the untimely demise of a lesser snowblower that was no match for the unprecedented snow accumulations in my Charlestown patio and driveway.

I had this electric snowblower overnighted in a panic last week.

With an 18-inch clearing width, 20-watt halogen light, 15 amp motor and strong metal blades, this little guy arrived just in time for yet more snow.

The good: Unlike a battery-powered snowblower that might last 45 minutes, this machine plugs into an outlet.

With less maintenance than gas-powered blowers require, the Snow Joe is light, powerful, and blows snow more than a hundred feet away.

The bad: The power cord has to be purchased separately.

The bottom line: Need to clear a foot or more of snow in a pinch? Look no further than this quality device from Snow Joe.

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Startups innovate to attract young talent

Constrained by limits on time, staff and money, many Bay State startups are relying on small meet-and-greet events to find top talent from Boston-area schools — students who might 
otherwise be lured away by larger companies here, in New York or in Silicon 
Valley.

"These small enterprises are heads down, working on their startups," said Pat Larkin, director of the Innovation Institute at the Massachusetts Technology Collaborative, or MassTech, a public agency working to support the state's economy. "They don't have the resources to send teams of recruiters to college campuses. So these events are a godsend to them."

Last Thursday, MassTech, the nonprofit hack/reduce and the New England Venture Capital Association hosted the first "Start It Up: Company Showcase for Students" at hack/reduce's Cambridge headquarters to help connect students with some of the Boston area's hottest tech startups.

"We're casting a wide net to find the best and the brightest, people who are high-energy, hardworking and creative," said Adam Fuchs, chief technology officer at SQRRL, a Cambridge software company that does data analytics for cybersecurity. "Going to a headhunter is our worst possible fallback. They find good people, but they're expensive. An event like this allows us to contact students directly, which helps you find better people."

Venues like "Start It Up" also help get the word out about new companies that are based on new ideas.

"We ourselves have a large education gap to attack," said Jay Greenberg, co-founder and CEO of Boston's LexShares, which crowdfunds commercial litigation. "When I tell someone what we do, they look at me like I have three heads. An event like this increases our exposure to students and students' exposure to us. So it's mutually beneficial."

LexShares, SQRRL and the other startups offered crash courses in their companies, and students have time afterward to meet the executives.

Shshank Chawathay, 25, of Waltham is a graduate student in marketing 
analytics at Bentley University who's shopping for an internship.

"My ideal company is one that's open to new ideas; you should be able to approach any manager without any restrictions," he said, "And when you go to work, you should learn something 
every day."

Chawathay prefers venues like "Start It Up" to recruiting events on campus, where company executives sometimes meet hundreds of students in one day "and are less likely to remember you."

"In a small setting like this," he said, "you can interact with people and make more of an impression."

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Booting Up: Laptop security hole puts buyers at risk, damages trust in company

When the government issues a warning about someone else's potential electronic spying, you're bound to feel as if we're teetering on the edge of a 1984 dystopia.

But that's exactly what happened on Friday, when the Department of Homeland Security warned that Lenovo — a highly regarded manufacturer of computers — had "spyware" 
preinstalled on consumer laptops that could expose secure communications to hackers.

Companies pay big bucks to pre-load their insidious programs on computers. In this case, the controversial software came from a Silicon Valley startup called Superfish, which has pioneered visual recognition technology. Its software captures images of products that users view online and then shows them ads for similar products. Security experts say Superfish also installs its own fake certification on computers to trick Internet browsers into giving it access to secure connections.

Even worse, the Superfish software on certain Lenovo laptops also allows hackers access to those connections. The software has security holes that enable hackers to spoof secure websites and steal critical data. So when users visit secured or encrypted websites such as banks and credit card companies, their information can be easily stolen, according to security experts and the government.

"This means websites, such as banking and email, can be spoofed without a warning from the browser," wrote the cybersecurity division of Homeland Security in a statement, calling the Superfish program a "critical vulnerability" that could 
allow a remote attacker "to read all encrypted web browser traffic, successfully impersonate (spoof) any website, or perform other attacks on the affected system."

For its part, Superfish has said the vulnerability was "introduced unintentionally by a third party." Lenovo has apologized to customers and released a software tool on Friday allowing customers to remove the Superfish code from their laptops.

Both Superfish and Lenovo are in damage-control mode. And neither has adequately taken responsibility for the spyware scandal. The truth is there's no reason any non-critical software should be bundled with laptops to begin with. At best, this scandal exposes a chilling lack of oversight on what gets installed on machines. At worst, it exposes something nefarious. Either way, Lenovo has sold out its customers.

This controversy couldn't come at a worse time for Lenovo as the company faces growing competition from Microsoft's Surface line of PCs. Those computers, by the way, do not come with adware whatsoever.

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Getting homes shown this winter ‘daunting’

More than 8 feet of snow has put a damper on a Boston-area real estate market already constrained by limited inventory — creating logistical issues for home-sellers, buyers and real estate agents — but opportunity awaits for those undaunted by the weather.

"It's really light these past four or five weeks because people won't put their house on the market," said broker Glenna M. Gelineau, owner of Gelineau & Associates RE in Waltham. "Not to mention people don't want to come out in this weather."

Streets are hard to navigate, snow mounds are so high that for sale signs are buried, and buyers can't identify homes that are on the market.

"It's just daunting," Gelineau said. "It's dangerous. There's no parking. People have ice dams. They don't want snow trucked through their house. They have their own problems. It's just one whole layer to life that, unless people are absolutely under the gun, they'll say, 'I'll (list) it when the snow dissipates.'"

Home inspections can't be completed because homes and their foundations are covered in snow.

"(An) issue right now being presented by the ice dams is potential damage being done to a listing and the fact that either renovations or other temporary measures have to be taken before the property can be shown," said John Dul-
czewski, executive director of the Greater Boston Association of Realtors.

There also are liability issues for homeowners if buyers slip or fall on their property, said Michael Carucci, president of Group Boston Real Estate.

"Then, of course, we have the issue of no school and a bunch of kids at home," he said. "We typically don't like to show property when the owner is actually home. Where are they going to go in this weather — outside for three hours?"

Carucci has in excess of $10 million in inventory that won't hit the market until spring because of the weather. But there is a bright side, he said.

"My view is anybody out there in weather like this is seriously qualified," he said. "I don't think you're going to have tire-kickers out there."

And inventory is so light — a pre-existing issue exacerbated by the snow — that people are jumping at available opportunities.

Linda Burnett, a Realtor at Keller Williams Realty Boston-Metro, listed a four-bedroom West Roxbury colonial for $699,000 on Feb. 9, in the midst of another snowstorm, and had it under agreement the next Monday.

With more snow in the forecast, she shortened the normal open house schedule to that Saturday for 2.5 hours and asked real estate agents to show up in one car with their clients because of parking constraints. She brought in "staging" furniture for the house in between storms, along with shoe covers and extra boot trays.

"We had over 30 parties visiting the open house," Burnett said. "That's like an open house on a perfect day in June. If anybody is considering putting their house on the market during this horrible weather, I recommend doing that because there's no inventory. People who are motivated will really do well."

Eight offers were submitted for the West Roxbury home, and it sold for significantly more than the asking price, Burnett said.

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Montreal knows where to stick snow

After roughly 8 feet of snow in three weeks, mammoth snowbanks everywhere and a problem-plagued public transit system, many Bostonians are thinking there's got to be a better way to deal with snow.

In Montreal, which has been pounded by about 8 feet of snow this winter, once precipitation starts, crews go to work, spreading salt on sidewalks and streets. Once the snow reaches an inch, the city deploys 1,000 pieces of equipment manned by as many workers to begin clearing both sidewalks and streets.

"Our citizens don't have to shovel sidewalks," in contrast to Boston, Jacques Lacavallee, a city spokesman, said.

By the time the snow reaches 6 inches, Montreal deploys 2,200 pieces of equipment and 3,000 workers.

"It's literally an army that takes over the city," Lacavallee said. "This is part of our daily life, unlike you guys, who have been caught by surprise."

Small plows tackle the sidewalks, while two trucks working side by side clear the roads. One is essentially a huge blower that eats up the snow and then spits it out through a tube on top into an adjacent dump truck.

The trucks carts the snow away to one of 12 city-owned lots, or to one of 16 chutes connected to a water-
treatment unit, where salt, dirt and other impurities are removed.

The end result? Fresh water.

Unlike Boston's 118-year-old subway system — America's oldest — Montreal's is only 49 years old and, as far as Lacavallee can remember, has shut down only once — in 1972.

Bonnie McGilpin, a spokeswoman for Boston Mayor Martin J. Walsh, said the mayor's Office of New Urban Mechanics has reached out to companies and professors from local universities, searching for innovative ways to deal with the record snow.

"One thing to keep in mind about Montreal," McGilpin said, is that its snow removal budget is $153 million, or 3.2 percent of its total budget, whereas Boston's is $18.5 million, or 0.7 percent of total spending.

Boston's streets also are not wide enough to accommodate the kind of large snowblowers and dump trucks that make their way, side by side, down Montreal's roads, she said.

Boston's Public Works Department uses more than 600 pieces of equipment during the height of storms to clear the streets. The snow is then brought to as many as 10 snow farms throughout the city, McGilpin said.

Since the first winter storm at the end of January, McGilpin said, the department has removed nearly 22,000 truckloads of snow, plowed 287,743 miles of roadway, put down more than 76,152 tons of salt and plowed for 180,314 hours.

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Lenders easing requirements for mortgages

WASHINGTON — A closely watched index that tracks mortgage credit availability — lender requirements on credit scores, down payments and other key loan terms — has some good news for potential homebuyers: Things are finally loosening up.

After years of progressively tighter rules on borrower eligibility in the wake of the housing bust, banks and mortgage companies have begun modestly easing their requirements and even expanding the types of mortgages they offer. The Mortgage Bankers Association's latest credit availability index reported improvements in all four of its loan categories during January. The improvements mainly reflect positive lender responses to government efforts to ease regulations and improve affordability in the housing market — all of which means an improved environment for mortgage shoppers.

Among the initiatives: Giant investor Fannie Mae's allowing of purchases of conventional mortgages with as little as 3 percent down. Freddie Mac, another major investor, is planning to begin similar 3 percent down loan purchases for mortgages closed on or after March 23. According to Mike Fratantoni, chief economist for the mortgage banker's group, "roughly 40 percent of investors" already have begun offering the Fannie 3 percent down program. The guidelines for the Freddie Mac program are in lenders' hands and there's likely to be a strong rollout for it.

Also contributing to better affordability: the Federal Housing Administration's reduction late last month of its costly upfront mortgage insurance premiums, a move that could expand eligibility for home purchases to thousands of buyers, according to industry estimates. Virtually all lenders who work with the FHA program began offering the lower mortgage insurance premiums when the reduction took effect in late January. FHA insures loans with down payments as low as 3.5 percent.

Brad Blackwell, executive vice president of Wells Fargo Home Mortgage, the country's largest-volume mortgage originator, is certain about what's underway in the market: "Things are looking better for homebuyers and refinancers" ­— not only in terms of underwriting requirements, but in the cost of credit as well.

Wells Fargo has been "gradually opening up the credit box," Blackwell told me in an interview, in part because of helpful policy clarifications and changes at Fannie Mae and Freddie Mac. Those changes give lenders greater confidence in lending to a broader spectrum of borrowers, including those who don't have high credit scores and ready cash for big down payments. For example, he said, though the bank previously had a credit score minimum — 660 FICO on conventional loan applications — now it requires no hard and fast minimum. Instead, if Fannie Mae's and Freddie Mac's automated underwriting systems accept the application — say you've got a relatively low credit score, but strong compensating factors such as solid income, ample reserves and a large-enough down payment — the bank won't say no to you solely because of the low score. This could be especially important to people who had tough economic experiences during the recession that damaged their credit, but who are now excellent candidates for a loan. On FHA applications, the bank will now accept FICO scores as low as 600, down from its previous 640 standard.

Wells Fargo also has relaxed its policy on gifts to borrowers by relatives and friends to defray part of the down payment and closing costs. On conventional loans with 5 percent or lower down payments, Wells Fargo previously required borrowers to contribute at least 5 percent of the total costs from their own financial resources. Now that's been cut to 3 percent, which allows for more generous gift assistance.

Some major real estate firms confirm that they are seeing the first signs of credit easing by mortgage lenders, but that most potential first time and move-up borrowers are not yet aware of the changes.

Bottom line: If you've been stuck on the home buying sidelines, check out what's going on. Talk to lenders and mortgage brokers. Who knows? Maybe the opening of the credit box, even if it's just a crack, might be enough to help you buy a house at today's near-historic low rates.

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Confidence in Bay State soars

Massachusetts consumer confidence has soared to its highest level in 13 years — the latest sign, experts say, that the state's economy is improving as people find jobs and open up their wallets.

The Mass Insight Consumer Confidence Index rose sharply this quarter, with the overall score increasing nine points to 106. That marks the highest rate since April 2002 and the first time since October 2006 that the index surpassed the 100-point level.

"Consumer confidence is at its highest level in over a decade, primarily based on better economic conditions led by an increased availability of jobs," said William Guenther, chairman, CEO and founder of Mass Insight, a Boston firm that organizes public-private initiatives on competitive issues affecting the state. "After reporting quarter after quarter of 'see-saw' scores, this is the first time in two years we've seen the index consecutively increase, which may be a new trend resulting from an improving economy."

Fred Breimyer, a regional economist at the Federal Deposit Insurance Corporation, attributed the increase in consumer confidence largely to declining unemployment and sharply lower gasoline prices.

"With more people back to work and with reduced transportation and home heating costs, people have more money to spend," Breimyer said in a statement. "Furthermore, a large majority of those we surveyed indicated that now is a good time to spend, and that drives consumer confidence."

The state's unemployment rate stands at 5.5 percent, and more than 60,000 new jobs were added last year, marking the single biggest year-to-year employment growth since 2000.

"The rise in consumer confidence is attributable primarily to a better labor market for job seekers, reflected in persistently strong net job creation and an increasing number of employees voluntarily changing jobs," said Andre Mayer, senior adviser to Associated Industries of Massachusetts.

Like Breimyer, Jon Hurst, president of the Retailers Association of Massachusetts, attributed greater consumer confidence also to lower gas prices.

"It's been a long haul — over a decade when the consumer has not been confident — but that now has turned, and that speaks well for the rest of 2015," Hurst added. "We've had a setback because of the weather, but hopefully that will turn around in the spring."

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