Housing
Federal regulators are cracking down on overzealous home lenders over concerns that some are being too lenient with borrowers. Officials worry that some mortgage lenders have gone much too far in lowering their standards to take advantage of torrid markets for mortgage and equity loans. They suspect that lenders are approving buyers without fully checking income and asset levels, accepting credit risk scores that are too low and lending out more than a home is worth.

Regulators fear widespread home loan defaults will result, triggering a bond market crisis.
Officials won’t issue new regulations ... but will make sure existing rules are followed.
In time, scrutiny will slow the lending pace, adding to a slowing of housing markets in 2006.

Real estate commissions will keep falling ... from an average 5.25% now paid to agents to about 4% by the end of the decade. The reasons? The sizzling market, which has homes selling quickly and for top dollar; comparison shopping on the Internet; and hotter competition among agents.
Some agents even agree to do away with a straight commission, charging hourly rates to show a house or negotiate with the other party.

Soaring home costs are leading some firms to make adjustments. When key workers in a Manhattan firm, for example, hinted they’d quit, the firm opened branch offices in Denver and Charlotte for them.
Hardest-hit areas: Southern Calif.; NYC; and Washington, D.C.

Health
When they’ll be needed most, geriatricians will be hard to find. Doctors specializing in the care of the elderly play a major role in holding down costs. By coordinating with a patient’s other physicians, they can eliminate duplication, avoid needless tests and prevent errors.
They’re already in short supply, and the shortage will grow acute in coming years as baby boomers swell the ranks of senior citizens.
Why the gap? Mainly money. Medicare reimbursement policies favor doctors who perform surgery and other procedures, not physicians who spend time talking to patients or conferring with other doctors.

Two important deadlines for firms that offer Rx drug coverage:
Sept. 30. That’s the cutoff for employers to apply for subsidies available to firms that provide drug coverage to retirees on Medicare. The subsidy for next year will average about $670 per participant.
And Nov. 15. Employers that cover drugs for workers 65 or older have until then to tell them how their company drug benefits stack up against those offered under the new Medicare law. Such notification can help workers decide whether to switch to Medicare’s drug coverage.

The economy
The economic outlook is brighter than it seemed a few weeks ago. An upward revision in first-quarter GDP growth to 3.5% from 3.1% plus surprising buoyancy in this quarter improve the prospects for 2005.
GDP is on course to expand by 3.5% this year, despite headwinds from the trade deficit, high energy prices, and rising interest rates. Consumers, bolstered by job growth and a whiz-bang housing market, show no sign of reining in spending. Meanwhile, a pickup in new orders following a deep slump during March is encouraging businesses to invest.

© 2005 The Kiplinger Washington Editors, Inc.