MLA LINE - April 13, 2009

DOE recently announced it will invest nearly $8 billion in state and local weatherization and energy efficiency efforts as part of the recent stimulus legislation (The American Recovery and Reinvestment Act). The funds will be divided between the Weatherization Assistance Program, which will receive nearly $5 billion, and the State Energy Program, which will receive up to $3 billion. DOE says this will help families save hundreds of dollars every year on their energy bills, while creating approximately 87,000 jobs. To jump-start the job creation and weatherization work, DOE is releasing $780 million in the next few days, and will release more as the states demonstrate that they are using the funding effectively.

The State Energy Program funding will be used to provide rebates to consumers for home energy audits or other energy-saving improvements; to develop renewable energy and alternative fuel projects; to promote Energy Star products; to upgrade the energy efficiency of state and local government buildings; and other innovative state efforts to help families save money on their energy bills. The weatherization funding will improve the energy efficiency of the homes of low-income families by adding more insulation, sealing leaks, or modernizing heating and air conditioning equipment, at a cost of up to $6,500 per home. The energy efficiency upgrades will be available for families making up to 200% of the federal poverty level. For a family of four, this translates to about $44,000 per year in the lower 48 states, $55,140 per year in Alaska, and $50,720 per year in Hawaii. See the Weatherization Assistance Program Web site and the State Energy Program Web site.

It is important to note that all assistance is disbursed through the states and local governments. This is not a direct grant program from the federal government to consumers. The best guidance for consumers that want to apply for weatherization assistance can be found on this site:

http://apps1.eere.energy.gov/weatherization/apply.cfm#happens.

NLBMDA LIKES GOP HOUSING PROPOSAL

Just a few days after their legislative conference in the Capital, the National Lumber and Building Material Dealers Association (NLBMDA) is encouraged by something new on the Hill: the House Republican Economic Working Group’s “Responsible Homeowners Act.”

The proposal would “go a long way” toward encouraging more home purchases, in turn creating new jobs and restoring confidence in the housing market, according to Michael O’Brien, president and CEO of the NLBMDA.

The proposal was unveiled Wednesday at a press conference by Reps. Eric Cantor (R-Va.) and Mike Pence R-Ind.). The act would:

Provide a $15,000 homebuyer tax credit for all purchases of primary residences provided that the buyer has a 5% down payment (covers purchases made before July 1, 2010);

Equalize the treatment of a home purchased as a primary residence with a home purchased for rental purposes (defined as being rented to the same tenant for at least 181 days out of the year) by providing the same exclusion from taxes for any future appreciation in the home value (covers purchases made before July 1, 2010);

Provide a $5,000 refinancing tax credit to help families cover the costs of a mortgage refinancing, buy down points or reduce their principal balance (covers refinancings through July 1, 2010).

The NLBMDA commended the House working group. “As we have said on several occasions, in order for the housing market to fully recover, we must spur housing demand while effectively dealing with the foreclosure crisis,” O’Brien said. “This legislation addresses both those key points.”

The legislation includes important provisions to encourage lenders to work with homeowners in danger of foreclosure, according to the NLBMDA. For instance, the lender would not be taxed on profits that might arise from future home appreciation – as long as the borrower agrees to share such profits and the lender takes steps to keep the homeowner in his home. Those steps include refinancing the mortgage or lowering the owner's monthly payments.

“If adopted, this legislation could go a long way toward reviving the housing economy by encouraging more home purchases, creating new jobs and restoring consumer confidence in the housing market,” said O’Brien.

Source: ProDealer Digest, Home Channel News, April 1, 2009

VISA & MASTERCARD INCREASE PROCESSING FEES

“New transaction fee rate increases announced by credit card companies Visa and MasterCard are slightly under two cents per affected transaction, yet are expected to raise more than $600 million in revenues, according to a report by DigitalTransactions.com

“MasterCard will increase its ‘Network Access and Brand Usage Fee’ April 17, from 0.5 cents per transaction to 1.85 cents – a 270 percent increase – while Visa will increase its ‘Acquiring Processing Fee’ from 0.5 cents to 1.95 cents – a 290 percent increase, with additional fees possible,” according to NACS – the Association for Convenience and Petroleum Retailing, which opposed the proposed hikes.

What can you do about it?

If you haven’t already taken a look at the MLA credit-card program, now may be the time. The attached flier tells you how to get started. If you have questions, call MLA at 800-747-6529.

SAVE THE DATE

April 30-May 1 – MLA Swing-into-Spring Event – Lake of the Ozarks, Mo.

June 12 – Kansas Sunflower Shootout – Salina, Kan.

Nov. 5-6 – MLA Fall Fling – Kansas City, Mo.

Call the MLA Office – 800-747-6529 – for additional information or email: mail@themla.com

LUMBER NEWS – QUICK GLIMPSES

What Might Be Hurting Home Values… Growing numbers of appraisers and consumer groups think that low-balled value estimates on short sales and bank-owned foreclosures are artificially depressing property values. Their complaints focus on what are called “broker price opinions,” or BPOs, which substitute for appraisals. Unlike standard property valuations performed by licensed appraisers, which can cost hundreds of dollars, BPOs often cost $50 and are performed by real estate agents who may have minimal or no appraisal training and are subject to no regulatory oversight. BPOs have become a booming business as foreclosures and short sales have risen sharply. When banks that own foreclosed houses need to put values on them for resale, increasingly they order BPOs that can be delivered quickly at rock-bottom prices. Selling BPOs to value houses violates the law in 23 states, according to appraisal industry leaders. In other states, BPOs may not be prohibited, but critics say they may be far off the mark in accuracy, typically coming in below appraised value. When BPO-valued houses are listed at fire-sale prices, they pull down the values of other houses in the neighborhood because, under current lending industry underwriting guidelines, appraisers must consider recent listing prices as well as closed sale prices. (www.washingtonpost.com)
Washington Post (3/28/09)

Source: NAHB Nation’s Building News, March 30, 2009

EFCA Backers Seek New Language… Supporters of the Employee Free Choice Act (EFCA), the bill that would make it easier for unions to organize worksites, have begun examining how to make the legislation more palatable now that several important senators have backed away from the measure.

Several Senators softened their positions on the bill after Sen. Arlen Specter, R-Pa., declared on the Senate floor last week that he would not side with Democrats and end any potential filibuster over the bitterly divisive issue.

Click here to read more.

Source: ProSales Business Update, April 1, 2009

Unions Are Not Going to Stop… Union officials will launch a major grass-roots drive for "card check" legislation during the two-week spring break, targeting possible GOP Senate pickups and potentially wavering Democrats in an all-out push for the labor organizing bill.

"We're going at this full throttle," said a labor official with knowledge of the grass-roots campaign.

Some 20 field staff have already been tapped to begin operations in an undisclosed number of states ... The effort will feature a huge leafleting drive at workplaces, accompanied by phone calls and letters to lawmakers.

Source: U.S Chamber of Commerce, April 2, 2009

CFLs Under Review… Compact fluorescent light bulbs (CFLs) have long been hailed as the darling of the green-minded consumer for their energy savings – even though they contain mercury vapor. The Environmental Protection Agency has long recommended them as a net positive for the environment.

But what if they don't work? That's a question the New York Times posed recently in a story under the headline, "Do New Bulbs Save Energy if They Don’t Work?" The article describes an expanded effort by the government to test bulbs for lifespan and luminosity.

Source: Weekly Digest, Home Channel News, April 3, 2009

IP Announces Multiple Closures… International Paper has announced that it will permanently close plants in Virginia and Kansas, and schedule a two week shutdown in New York.

The Chesapeake, Va. corrugated container plant will close in early June, costing around 100 jobs. The Kansas City, Kan. cardboard box plant will also close in June, and also cost 100 jobs.

Source: LBM Daily, April 6, 2009

Home Depot News… (Topeka, Kan.) Despite recent efforts to scale back some of its retail growth, Home Depot continues to invest in the support of its remaining store operations. The home improvement retailer has signed a 20-year lease to occupy a 465,000-square-foot regional distribution center here. The facility is being built on 74 acres of land by USAA Real Estate Co., in partnership with Seefried Industrial Properties. This new warehouse will be part of Home Depot’s initiative to convert several direct-delivery facilities to Rapid Development Centers.

Source: NRHA eNewsletter, April 6, 2009

Getting the Message? Congress may be getting the message that last year’s Consumer Product Safety Improvement Act (CPSIA) has too many unintended consequences. Several bills have been introduced to modify the law. Most recently, the proposed Consumer Product Safety Solutions Act would provide more time for companies to comply and give additional flexibility to the Consumer Product Safety Commission (CPSC) to address concerns.

Of specific interest to hardware/home improvement retailers is a provision that would make CPSIA lead provisions prospective and give retailers a year after manufacturing standards take effect to sell existing inventory. Currently, compliance is retroactive. For example, CPSIA requires that paint sold to consumers after Aug. 14, 2009, cannot contain more than 0.009 percent lead; CPSC says that the law includes paint already on retail shelves in the ban.

Source: NRHA Washington News, April 6, 2009

Window Manufacturers Sense Business Growth… Between the springtime call for home renovation and new tax credits available for energy-efficient home improvements, window manufacturers are gearing up for what is promising to be a busy and productive spring.

Simonton Windows hired back 110 employees to its West Virginia and Illinois facilities, and is actively seeking to hire employees at its Oklahoma facility. Andersen Windows has hired back 180 employees, while Pella Corporation will soon ramp up production in its facilities in Ohio, Illinois, and Iowa, which had cut back to a four-day workweek for about 3,900 of the company's 8,600 total employees.

Source: NJBMDA Bulletin, April 6, 2009

U.S. Elects to Impose Duty on Canadian Softwood Lumber… U.S. Trade Representative Ron Kirk Tuesday announced the government's intention to impose a 10 percent customs duty on softwood lumber imports in response to Canada's offer of a smaller-than-anticipated cash settlement of C$46.7 million. The offer came after an international court of arbitration ordered the country to institute a 10 per cent tax on softwood-lumber shipments until $68 million was collected to compensate the U.S. for Canada's miscalculation of its export quotas in 2007.

Source: LBM Daily, April 8, 2009

Lumber Analyst Expects Strong Rebound in Housing Starts in 2010… The home construction market is about to enter a comeback that will see a near-doubling of housing starts over the next 20 months, leading in turn to a spur in lumber dealers' need to stock up on softwood, a leading economist for the lumber industry forecast.
Read More

Source: ProSales Business Update, April 8, 2009

2009 Sustainable Forestry Tour Program… The Temperate Forest Foundation invites YOU to join their teachers on an intensive hands-on experience to learn about forest stewardship and the forest products sector. Sustainable forestry has moved from a conceptual phase to implementation of best management practices on millions of acres across North America. You will learn how sustainable forestry is practiced on various regional landscapes and visit a variety of wood manufacturing and educational facilities. The tours run from a Tuesday afternoon to a Friday morning, and include two days full of woods and mill visits, and educational stops (tree farms, state parks, learning centers, experimental forests, harvesting operations). Your experience will provide you with the insight and understanding of the social, ecological and economical values derived from modern forestry. Click "Here" to read about the program.

Source: NAWLA Bulletin, April 9, 2009

DIY Product Sales Are on the Rise… Across the country, Americans are deciding to plow their own driveways, mow their own lawns and clean their own houses. Although this trend hurts some service companies, the DIY market looks like it will be one of the first markets to recover from the recession.

Research firm Mintel International, which follows a narrow segment of the market ranging from tool rentals to building and decorating supplies, predicts the DIY market will make steady gains over the next two years, ultimately growing to a $15.1 billion market by 2013, reflecting a 50 percent growth over a decade.

Home Depot and Lowes Cos. Inc. have reported stronger sales on snow blowers this winter, and sales of gardening and house cleaning products are expected to increase this year. “We sense that people want to get their hands dirty,” says Home Depot CFO Carol Tomé. “There's something to be said about playing in the dirt right now when you’re feeling miserable about everything else.”

Source: NRHA eNewsletter, April 12, 2009

STABLE PRODUCTS IN AN UNSTABLE TIME

The current financial environment is clearly one of instability and uncertainty. It is critical that you choose your life insurance company carefully. You want a stable company that will be there to fulfill the long-term promises inherent in life and annuity products.

Your decision should include a clear understanding of the insurer’s financial strength and history. A key is to find out how the insurer is rated by the insurance industry’s top rating organizations.

Federated’s life, disability income, and annuity products are conservatively reserved and remain stable, safe, sound and secure, as reviewed by highly respected, independent rating organizations. Federated Life^® ranks among the top tier of insurers rated A+ (superior) by the A.M. Best Company^®. In addition, Federated Life^® was named to the 2008 Ward’s 50^® group of top performing life insurance companies.

Our annuity and universal life products have competitive, current interest rates, while providing the security of a minimum guaranteed interest rate at the same time. Based on a consistent, prudent investment approach, our products provide steady, secure growth. We are confident in the long-term investment performance of our portfolio.

Our investment portfolio is constructed to maintain liquidity and reduce investment risk. Investments are selected for safety and preservation of capital, as well as competitive rates of return.

We understand that our policyholders entrust their funds to us for their life insurance and annuity needs. The financial integrity and strength of Federated Life^® provide the security and value our clients expect.

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

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