What the experts say

Hedging your dollar bets; Beware hidden mortgage fees; Money funds: Squeezed, but safe

What the experts say

Hedging your dollar bets

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Beware hidden mortgage fees

Homeowners struggling to keep up with mortgage payments are just now discovering certain questionable fees charged by lenders, said Aleksandra Todorova in SmartMoney. Lenders charge delinquent borrowers fees for everything from overnight delivery to drive-by property inspections, according to a recent study by University of Iowa law professor Katherine Porter. The fees “go well beyond the typical late charge,” in many cases adding up to thousands of dollars. And delinquents aren’t the only ones who get hit. “Unsuspected and unexplained charges can be tacked on to a borrower’s account as soon as they are late with a single payment,” Porter says. With that in mind, study your mortgage statements for unusual charges. “Most statements don’t include detailed explanations of the fees charged, but you can request a breakdown.”

Money funds: Squeezed, but safe

The current credit crunch is even affecting money funds, said Jonathan Burton in Marketwatch.com. Some investors are wondering how safe their cash really is. Money funds “are considered one of the most secure parking places for cash.” But, unlike banks’ money-market funds, money funds aren’t insured by the Federal Deposit Insurance Corp. That said, investment firms “have given money-fund holders an implicit guarantee that the net asset value of their fund will not fall below $1 a share.” While money funds’ performance may suffer, says Bankrate.com financial analyst Greg McBride, individual investors need not lose sleep worrying about their money funds actually losing value. Financial institutions, he says, will “move mountains to keep that net asset value at $1 and preserve investors’ confidence.”