Star-Telegram.com: Teresa McUsic

Savvy Consumer: Special programs still offer help for first-time home buyers

Thu, 28 Aug 2008 23:04 CDT

TERESA McUSIC

Seller-financed down-payment assistance programs, or DPAs, are likely drying up soon, but consumers should know there are still a number of government-based grant programs to help you get into a house.

Many of these programs cover the middle class as well as lower-income families, and several said they would be receiving new funding this fall.

A program operated by the city of Fort Worth, funded by $1 million annually from the U.S. Department of Housing and Urban Development, is one of five government programs I found for local home buyers that offer down-payment grants to moderate and low-income families.

"Our call volume has kicked up from some of our lenders looking for another source for down-payment help," said Patricia Jackson-Bell, senior loan-service representative processor for the city’s housing department.

No doubt more first-time home buyers and lenders will be turning to these programs after Oct. 1, when the recent housing law passed by Congress requires that seller-financed DPAs be abolished.

Seller-financed DPAs — which allowed builders to increase the cost of the house, pass the increase on to a nonprofit organization and then grant it to home buyers — is ending none too soon for some lenders and the Federal Housing Administration, which has tried to stop the practice for years.

"Those programs were not part of the solution, they were part of the problem," said David Motley, president of Colonial Savings’ mortgage-product division, adding that the company stopped using seller-funded DPAs two years ago. "We began to see a pattern in seller-funded DPAs where if we had to foreclose, the property value was not worth what it was when we made the loan."

FHA found the same problem and told Congress about one-third of its loan portfolio was in trouble because of seller-funded DPAs, prompting Congress to make them illegal.

But with exotic mortgages like zero-down and piggyback loans no longer available to most consumers, home buyers strapped for cash for a down payment and closing costs will have to do some homework to find alternative programs.

"We’re back to core programs like the 97 percent financed FHA mortgage," said Chad Bates with Legacy Financial in Arlington. In that program, home buyers must pay a 3 percent down payment, which is climbing to 3.5 percent after Oct. 1.

Help for consumers

Cherise Hobbs was one of those consumers who didn’t think that she could ever afford to buy her own house.

But last year, the single mother and full-time account manager for a prescription-benefit company heard about Fort Worth’s housing-assistance program through her uncle, who is a real estate agent.

Hobbs applied, took homeowner education classes and was able to buy a foreclosed home earlier this year in southwest Fort Worth for $78,400 with the help of an $8,000 grant from HUD distributed by the city.

Now her two young daughters each have their own room, and Hobbs is happy to be out of apartment life.

"The grant definitely made a difference," she said.

How it works

The city assists more than 110 homeowners each year with deferred-payment loans of up to $14,999 to pay for down payments and closing costs, Jackson-Bell said. If the home buyer stays in the house for five years, they do not have to pay back the grant.

The maximum income to be eligible for the program is 80 percent of the area medium income, or $50,700 for a family of four.

Help for home buyers
Here are some government programs that can help moderate- to low-income home buyers with down-payment assistance:

Texas opening new prepaid tuition fund next month

Fri, 22 Aug 2008 06:33 CDT

TERESA McUSIC

Texas is launching its second prepaid tuition plan next month — and not a moment too soon.

More than ever, parents need to plan for college expenses.

"It’s going to be one of the major purchases across a lifetime, and so the old model of how to plan for this no longer applies," said Tom Joyce, senior vice president of college lender Sallie Mae, which conducted an extensive study with Gallup on how Americans pay for college.

"We need to try to get families away from a semester-to-semester fire drill in terms of how they’re going to pay for this."

Texas will announce details of its new Texas Tuition Promise Fund, a prepaid tuition fund, on Sept. 10, with a Web site and toll-free number for parents interested in paying tuition ahead of time through a savings plan.

Before then, parents can submit a request for more information on the state comptroller’s Web site at www.texastomorrowfunds.org.

"Under the new plan, you’ll be buying tuition units equal to a percent of the year’s costs as opposed to buying credit hours," comptroller spokesman R.J. DeSilva said.

Texas’s last prepaid tuition plan, the Texas Guaranteed Tuition Plan, stopped accepting enrollment after tuition deregulation in 2003 when the Prepaid Higher Education Tuition Board recognized that the state would have trouble guaranteeing payment. There are 27,000 college students enrolled in the plan, with 91,000 contracts outstanding.

Steve Blankenship, a certified financial planner with Heritage Financial Planning in Grapevine, said details of the new plan are sketchy, but he recommends that parents take a look.

"The last plan at the time didn’t look like that great a deal, but in retrospect it was," he said.

Where does the money come from?

Prepaid tuition plans and 529 college savings plans are still a very small part of the bundle of resources parents use to pay for college.

Now, 47 percent of parents and students are borrowing to pay college tuition bills, according to the Gallup study. On average, public-school students and their parents borrowed more than $6,000 last year; private-school students and parents borrowed $13,000. Most of the money came from low-cost sources like federal student loans and PLUS loans.

Private education loans also played a big part in parent and student borrowing for college.

Twenty-three percent of borrowing students took out a private education loan for school costs last year worth $7,694, according to the Gallup survey, while 22 percent of borrowing parents took out a private education loan for $6,910.

Other forms of borrowing were also used that are not generally recommended by financial planners

According to Gallup, 1 in 5 borrowing parents took out a home-equity loan and 5 percent took out a loan from their retirement plans to pay for their child’s college. Although home-equity lines of credit can be a low-cost way to fund education, it is generally not recommended by financial planners. And borrowing from your 401(k) plan is definitely a bad idea.

"College funding should never threaten a parent’s financial position," Blankenship said. "Ultimately, it’s the child’s responsibility."

The final piece of the borrowing picture is the worst place to go for college funding — 19 percent of parents who borrowed used credit cards, racking up $5,822 of credit-card debt to pay for college last year. Students were slightly better, with 8 percent of those who borrowed using credit cards to pay for college costs, defined strictly as tuition, room and board.

What you can do

The Savvy Consumer: Savings abound on back-to-school items

Thu, 14 Aug 2008 23:02 CDT

TERESA McUSIC

The back-to-school sales-tax holiday is upon us, and if you’re willing to fight the crowds, you can save approximately $8 for every $100 you spend on clothes, shoes and back packs.

But the tax break doesn’t apply to everything that students need — including school supplies, textbooks, physicals and eyeglasses.

If money is tight, there are other ways to save while shopping for your returning student.

School supplies

Let’s start with school supplies.

A recent survey by Neilsen suggested that more consumers will be buying their school supplies at grocery stores as parents combine store trips to save on gas. Some shopping-tip Web sites recommended using dollar stores this year for school supplies; others suggested buying the supplies online.

None of these ideas rang true with me, so I decided to go shopping myself. I found the 20 items needed from an Arlington district school for a sixth-grader and tried several venues, including a grocer, dollar store, office-supply store, online store and two discount retailers.

The hands-down winner overall was Target. With a 24-count crayon box costing 17 cents, two glue sticks for 22 cents, and a five-spiral package, 150-sheet ream of notebook paper, and 10 red writing pens all for 50 cents each, Target’s prices were considerably lower than those of other stores.

Wal-Mart was comparable or even slightly lower on some items, but the store I visited was very disorganized and after considerable searching, a full one-fifth of the items on my list either didn’t have prices posted or were not found. Wal-Mart’s back-to-school slogan plastered all over the store was "Do the Math." That’s pretty difficult to do when there aren’t prices to be found on store shelves or the products.

The grocery store and dollar store did offer $1 promotions on several school supplies on my list, but a dollar doesn’t look as good when the same thing is at a discount house for 50 cents or less. Also, neither had all the items I needed.

Textbooks

Although the Web didn’t seem to be too helpful in terms of low-cost pricing for school supplies, for textbooks savings, it seems to be pretty spectacular.

The average four-year college student will spend $988 this year on books and supplies, according to the College Board. Community-college students aren’t much better off, spending on average $921 for books and supplies.

More and more college consumer advisers suggest that students conduct online textbook searches. On average, students can save about half on their textbook costs, said Anirvan Chatterjee, founder of BookFinder.com.

The process is simple: Students find the ISBN number of their textbook (either at the bookstore or online), enter it into a search engine and out will spill Web stores from major retailers like Barnes & Noble and Amazon to smaller booksellers that will offer impressive prices, despite the shipping costs. BookFinder searches 150,000 booksellers in more than 50 countries to find cheaper textbook options, Chatterjee said.

Other textbook search engines to try out include Textbooksx.com and BigWords.com. Most of these sites offer ways to sell your books as well back to bookstores. EBay also runs a brisk trade in the textbook realm and is worth checking out.

Sports-related costs

If your student is involved in sports, he or she likely will need a physical before starting school. Your regular doctor may be where you first turn, but if your insurance doesn’t cover physicals or you don’t have insurance, you may be in for sticker shock of $100 or more.

First, ask your doctor if they give any discounts if your insurance doesn’t cover physicals and you pay cash. Asking never hurts, and doctors are becoming increasingly aware of the squeeze many families are feeling over the high cost of medical care.

There also are a couple of local clinic options. One is CareNow, which has 21 health clinics in the Dallas-Fort Worth area. With an online coupon at www.CareNow.com, you can get a school physical for $20. A sweeter deal happens Aug. 23, when all the clinics are offering a one-day special of $12 school physicals.

Savvy Consumer: Help is on the way for distressed homeowners

Thu, 07 Aug 2008 23:13 CDT

TERESA McUSIC

The new housing law signed last week has some relief for virtually all homeowners:

For property-tax payers, it offers a new deduction, even if you don’t itemize.

For first-time home buyers, a new tax credit is available that acts as a 15-year no-interest loan.

For senior citizens, the new housing bill means lower fees on reverse mortgages, higher loan amounts and more protections.

And for homeowners fearing default, there is more money available for housing counseling and a new program for lenders to transfer failing mortgages to government-backed loans.

David O’Brien Jr., executive director of Housing Opportunities, a housing-counseling service, says he is "guardedly optimistic" that the new law will help homeowners facing foreclosure today.

"Some of these things in this bill common sense would say lenders are already doing on a pre-emptive basis," he said.

In fact, many now are. O’Brien said lenders have changed significantly in the past six months in terms of negotiating remediation plans that include loan modifications and repayment plans. In addition, lenders are now dedicating personnel to borrowers in trouble.

"Most of the large lenders have assigned people in a triage program for people who call in," he said. "Before, it was hard to get a loan servicer to respond."

Key to avoiding foreclosure is letting your lender know as soon as your financial problems begin, O’Brien said.

"The earlier you diagnose the problem and seek some kind of help, the better off it’s going to be," he said.

Help for homeowners

The new law says that homeowners who spend at least 31 percent of their gross income on a mortgage are eligible for refinancing under a new, more-affordable government-insured mortgage. But there’s a caveat written in the law that says it’s still up to the lenders to decide if they want to participate, O’Brien said.

In addition to homeowners facing possible foreclosure, the new law is offering some tax relief for homeowners who pay state and local real-property taxes and don’t normally itemize deductions, said Lacey Riley, an Arlington CPA with Pickens Snodgrass Koch L.L.P.

"It’s a tiny bit of relief for our high property taxes," she said.

The new law allows a deduction for individuals who pay property taxes of up to $500 and married couples filing jointly of as much as $1,000, Lacey said.

But remember this is just a standard deduction, so your tax savings will be based on your tax rate. It’s not an adjustment to your adjusted gross income. So if you are married and in the 25 percent tax bracket, your tax bill will go down $250.

Boost for first-time buyers

A better deal is being offered to first-time home buyers.

"They are getting essentially a no-interest loan," Riley said. "That’s going to be a pretty good deal."

Savvy Consumer: Texas takes lead in energy-efficient houses

Fri, 01 Aug 2008 02:09 CDT

TERESA McUSIC

One good piece of news has come from higher utility prices in the state — energy-efficient houses are becoming more the norm than an exception.

Forty-four percent of new houses built in Dallas-Fort Worth last year were designated with the energy-efficient Energy Star designation, compared with 12 percent of houses built nationwide, according to the Environmental Protection Agency.

Mary Denton, who bought a 1,900-square-foot Energy Star home in Keller from Choice Homes last year, said she was looking for low utility costs.

She got them: Since she moved to the house in December, her gas bill has not exceeded $20 and her highest electric bill was $120, she said.

"And I set my thermostat at 76 degrees — even lower when I’m working out in the morning," she said.

Denton, a real estate agent, said her clients are focused squarely on energy efficiency.

"The Number 1 concern is keeping the bills down," she said.

D-FW is behind only Houston in the number of Energy Star homes in its inventory, with 92,369 houses compared with Houston’s 126,670 houses, according to the EPA.

Texas ranks first in the nation in the Energy Star program with more than 255,000 houses with the EPA ranking, although it should be noted that California’s residential building codes are more stringent than the EPA program.

What’s happening

State consumers are driving energy efficiency in home-building, local builders say.

"Energy efficiency is top of mind for our consumers," said Daniel Couture, president of Choice Homes in Irving, which built 527 Energy Star homes in the Metroplex last year. "Everyone wants to know what the cost of ownership is going to be."

Starting this year, Choice committed to building all of its Texas houses with the specifications of the Energy Star program. In addition, it will add efficiency touches of its own, including radiant-barrier decking to roofs, vinyl windows, air conditioners with a 14 SEER rating and only compact-fluorescent light, or CFL, bulbs, Couture said

Dallas-based Centex, which built 1,183 Energy Star-rated homes in the Metroplex last year also recently announced that it will add a suite of energy-efficient features to all of its houses beginning in 2009.

Among those standard features will be energy monitors to track kilowatt usage, radiant-barrier roofs, Energy Star appliances, high-efficiency heating and air-conditioning systems and CFLs.

What it means

The energy monitor can reduce energy usage by between 4 and 15 percent, based upon published studies reviewed by the NAHB Research Center, a subsidiary of the National Association of Home Builders.

"Our Centex energy advantage program is a blueprint of where home construction is going to be in the future," said Clayton Traylor, director of environmental affairs for Centex. "We’re making homes tighter, better insulated, better protected so the appliances don’t have to work as hard."

Consumers who buy an Energy Star home will see substantial savings in their utility costs, said Jonathan Passe, spokesman for the Energy Star residents program with the EPA.

"The 2006 International Energy Conservation Code housing code is so rigorous that Energy Star homes are built about 15 percent above it in terms of energy efficiency," he said. "But for the first time, we included Energy Star appliances be required in the houses, so the overall savings to the consumer is closer to 20 or 30 percent."

Savvy Consumer: Franchise tax takes bite out of small businesses

Thu, 24 Jul 2008 23:03 CDT

TERESA McUSIC

Consumers may see more price increases from Texas businesses this summer — but this time it’s not because of rising fuel or grain prices.

This summer a revised franchise tax went into effect that increases state taxes for 180,000 businesses based in Texas, according to an estimate by the Texas office of the National Federation of Independent Businesses.

Nearly half of those affected will be passing those costs on to their customers, according to a survey released last week by the NFIB, which represents 25,000 businesses including restaurants, grocers, home-repair companies, medical professionals, attorneys and other small businesses.

The state has collected $4.3 billion this year from more than 132,000 companies, according to a report given by the state comptroller at a meeting Monday of the Business Tax Advisory Committee in Austin. The committee was formed by the Legislature to study the effects of the new business tax and to issue a report to the Legislature and the governor at the beginning of the regular session.

An estimated 50,000 companies have yet to pay the tax, which was due June 15, and have filed for extensions. The comptroller’s initial projection for collection on the new franchise tax is $5.9 billion.

The revised tax has caused major increases for many businesses, often causing their franchise tax bills from last year to double or more.

Local businesses affected

A survey by the NFIB of its members in May showed that 84 percent of companies affected by the revision saw their state taxes double, and nearly half of that group saw an increase of 500 percent or more.

"It’s awful," said Kirk Godby, president and co-owner of Corporate Couriers, a courier service in downtown Fort Worth. "This tax that was $2,500 for us is now over $18,000."

Andy Ellard, owner of Manda Machines Co. in Dallas, said his franchise tax increased from $900 to $8,000.

"The frustrating part is the Legislature passed the tax bill not knowing the effects of it," Ellard said. "Instead they said, 'Let’s see what it does in two years.’ "

How it happened

The franchise-tax increase is a result of legislation passed in 2006 to cap property taxes, both commercial and residential, and create an equal playing field among small and large businesses for each to pay their fair share of costs toward public education.

Under the new franchise tax, most partnerships, associations, limited liability companies and corporations must pay a tax. The tax is now the primary source of funds used to buy down property-tax rates, and already $1.42 billion of the franchise tax has been transferred to the property-tax relief fund, according to R.J. DeSilva, spokesman for the comptroller. The remaining amount collected has been sent to the state’s general revenue fund.

"The new tax is expected to hit about 12 percent of Texas firms, compared with the previous tax’s 6 percent," according to a report on the tax by Jason Savings, senior economist at the Federal Reserve Bank of Dallas. "Among the firms will be roughly half the state’s nonsole proprietorships."

Consumers feel the bite

Passing such costs onto consumers is a natural course for businesses, Savings said.

"It’s safe to say any time businesses’ taxes increase, the prices paid by consumers are also going to rise," he said. "To some degree, consumers are going to pay for this change to the franchise tax."

Members of the Independent Electrical Contractors of Texas are raising prices to offset the franchise-tax increase, said Renea Beasley, spokesperson for the IEC of Texas.

"When our contractors’ costs go up, they have to pass it on to the consumer," she said. "These are huge increases. The tax ate up all their profits and anything they planned they have had to put on hold."

The Savvy Consumer: If you take the 401(k) cash, you may live to regret it

Fri, 18 Jul 2008 00:39 CDT

TERESA McUSIC tmcusic@savvyconsumer.net

Although automatic features are taking fire in retirement plans these days, many in the younger half of the work force are taking the cash from their 401(k)s and running when they switch jobs, according to a new survey by Fidelity.

Forty percent of workers age 20 to 40 cash out their 401(k)/403(c) plans when they changed jobs instead of rolling it into an IRA or their new company’s retirement plan, the survey said.

More than half said they later regretted the decision, according to the study.

Here’s why: Even just $5,000 in a retirement plan with a relatively modest growth rate of 7 percent in compounding interest will grow to $53,000 in 35 years, said Lauren Brouhard, vice president of rollover business management for Fidelity.

"Even a small contribution to a 401(k) or IRA can make a big difference in retirement," she said. "Young people think they have their whole lives to save, but if you talk to a 50- or 60-year-old, they wish they had started earlier."

Cashing out a retirement plan also has considerable upfront costs. That same $5,000 in a retirement plan will likely only net you about $3,300 once the penalty (10 percent if under age 59½) and federal taxes (if you are in the 25 percent tax bracket) are taken out in an early cash-out.

While that may still sound like a lot of money to a younger worker wanting a car or house or to pay off a student loan, the costs to their retirement savings are higher, Brouhard said.

Such practice is likely to increase as more workers enroll in 401(k) plans, said Jack VanderHei, research director at the Employee Benefits Research Institute.

More new employees, especially lower-income workers, are enrolling in their company’s retirement plans because of a relatively new automatic feature where employees actually must "opt out" of the plan to not be enrolled, VanderHei said.

"Now there’s a whole segment of the population only in these plans because their employer put them in," he said. "When they change jobs, they are much more likely to grab the money."

What’s happening

Enrollment in company retirement plans is surging two years after the Pension Protection Act removed barriers that prevented companies from automatically enrolling new employees in the plans.

A study by the Vanguard Center for Retirement Research of 50 Vanguard plans found that 86 percent of new hires enrolled in plans when it was automatic, double the number of employees who enrolled when the plans were voluntary.

More companies are adding the feature since the law was passed, and some are even expanding it to all employees, not just new hires, to be automatically enrolled, according to EBRI.

Once in, employees need to educate themselves about the plans, including knowing better options than cashing out when they need money, said Steve Blankenship, a certified financial planner with Heritage Financial Planning in Grapevine.

"Cashing out is a more common practice than it ought to be," he said. "It’s often a symptom of not having a properly funded emergency fund."

What’s recommended

Most planners recommend having four to six months worth of spending in a money-market and checking account to cover emergencies from a job loss, death or other difficult financial period. Using your retirement fund to get you through tough times should only be a last resort, Blankenship said.

Getting a loan from your retirement account may be even worse than cashing it out, however, he warned. Employees with 401(k)s can take out a loan of $50,000, or 50 percent of the amount you’ve invested, whichever is smaller, without penalty.

The loans are attractive because of their low interest rates, usually just 1 or 2 percent above prime.

The Savvy Consumer: Texas seeks to boost long-term care coverage

Thu, 10 Jul 2008 23:37 CDT

TERESA McUSIC

This fall, a new long-term care insurance program will be offered in Texas aimed at getting moderate-income consumers to buy this protection.

It’s called a long-term care insurance "partnership" program, a plan to encourage Texans to buy long-term care policies that will protect some of their assets from the high costs of nursing-home care.

The concept was started by four states in the 1990s. After federal legislation allowed for such partnerships in 2003, dozens more states are enacting their own plans to curb nursing-home costs to Medicaid.

In 2005, Medicaid paid for 43.9 percent of all nursing-home care nationwide, compared with just 7.5 percent paid by private insurance, according to the Department of Health and Human Services.

An additional 26.5 percent of the $112 billion spent on nursing-home care that year was paid out of pocket, HHS reports.

In Texas, the Medicaid numbers are worse, with 67 percent of all nursing-facility care paid by the federal program for low-income individuals. Fewer than 400,000 Texans have long-term care insurance.

And don’t think you won’t need long-term care. At least 70 percent of people over age 65 will require some long-term care services at some point in their lives, according to HHS.

What’s happening in Texas

To encourage more Texans to purchase long-term care insurance, state lawmakers last year passed legislation sponsored by state Sen. Jane Nelson, R-Lewisville, to establish the long-term care partnership program.

In it, asset protection and other guaranteed features will be included in a policy offered to the general public, said John Greeley, spokesman for the Texas Department of Insurance, which is coordinating oversight of the product with HHS.

"The whole point is to get people to think about their long-term care needs to take the burden off Medicare," Greeley said.

The policy can also provide protection to a friend or relative paying for long-term care.

In 2004, more than 44 million caregivers provided long-term care for an adult family member or friend.

While final rules for the policy are still being written, Greeley said it will mirror model legislation from the National Association of Insurance Commissioners.

Central to the policy will be an asset-protection element.

"Consumers will be eligible to protect any assets equal to the insurance benefits received, so those assets will not be taken into account in qualifying for Medicaid," Greeley said.

How it works

Say a consumer purchased a long-term care policy with $100,000 in benefits and has $100,000 in assets. He enters long-term care and uses up the benefits in the policy. At that point, his $100,000 in assets will not be considered when determining if he qualifies for Medicaid.

Currently, an individual entering long-term care must have very limited assets and income to qualify for Medicaid. Often consumers must "spend down" their assets in order to be eligible for long-term care under Medicaid. (It should be noted that Medicare only covers the first 100 days in a nursing home, and that’s only after a hospital stay and if you need skilled care.)

How much it costs

Savvy Consumer: Hey, what's in this drink?

Thu, 03 Jul 2008 22:26 CDT

TERESA McUSIC

The Fourth of July is traditionally the biggest beer-selling day of the year, according to the Beer Institute.

But for Americans imbibing that holiday, finding the calorie and carbohydrate count of their favorite beer, wine or mixed drink would have taken some digging.

Until now.

This week, the Consumer Federation of America came up with a comparative alcohol facts guide of 26 top-selling alcohol brands, including:

13 beers such as Coors, Budweiser and Heineken, and flavored malt beverages such as Mike’s Hard Lemonade and Bartles & Jaymes Classic Original.

Eight spirits products, including vodka, rum, whiskey, gin and tequila.

Five brands of wine, including Almaden, Beringer, Franzia and Gallo.

It’s pretty sobering news.

Take, for instance, Mike’s Hard Lemonade. It sounds light and breezy in contrast to a beer, but an 11.2-ounce bottle has 220 calories, compared with 12-ounce servings of light beers that come in at under 100 and regular beers at around 140. And the carb level was off the wall — 32 grams per serving, versus around 10 for regular beer and 3 to 5 for light beer.

The spirits part of the guide looks pretty good — no carbs and around 100 calories per drink — until you remember that most of these drinks come with mixes. A 6-ounce margarita (smaller than most restaurant versions) is close to 400 calories, according to Amy Goodson, a registered dietitian at Harris Methodist Fort Worth Hospital. Most serve a 12-ounce version, with a whopping 800 calories, or even larger drinks.

Beyond the labels

When it comes to alcoholic beverages, most of us don’t pay much attention to nutrition, Goodson said.

"People tend to look at it as a beverage and not as calories," she said.

CFA and other consumer groups are trying to change that.

"Consumers have no way of knowing the most basic information about alcoholic beverages," said Chris Waldrop, director of CFA’s Food Policy Institute.

Alcoholic products fall under the oversight of the Alcohol and Tobacco Tax and Trade Bureau (TTB) and are not required to carry nutritional food labels, as are products regulated by the U.S. Food and Drug Administration, Waldrop said.

"We’re asking the federal government for additional information in a standardized way on these products," he said.

The FDA’s nutritional food-labeling program, begun in 1995, has been considered a success by nutritionists and dietitians.

Most adults (95 percent) have read food labels at some point when making food choices to learn nutritional information about a product, and 51 percent said they always or very often refer to food labels, according to a 2006 Harris Interactive/Wall Street Journal poll.

"I see people at the grocery store all the time studying and reading labels on everything," Goodson said.

The Savvy Consumer: Tips for shopping for the new digital-TV conversion box

Thu, 26 Jun 2008 23:03 CDT

TERESA McUSIC

The countdown is on -- 235 days until the end of analog television broadcast in the U.S. -- and many North Texans still aren't ready.

"TV is about to become complicated," said Phillip Swan, author of TV dot COM: The Future of Interactive TV and founder of TVPredictions.com.

Consumer concerns over buying and installing converter boxes that will allow televisions to pick up the new digital signals are coming in force, said Swan and Joel Kelsey, policy analyst for Consumers Union.

"We’re hearing a lot of confusion in the marketplace," Kelsey said.

Already 1 million of the $40 coupons to offset the cost of the converter boxes offered by the National Telecommunications and Information Administration have expired without being used, according to the NTIA website. (The coupons have a 90-day expiration date by law.)

Consumers also are finding only one or two converter-box models in big-box retailers like Wal-Mart, Target and Best Buy, leaving little room for comparison shopping, Kelsey said.

And some are finding they need an upgrade to their antenna once they buy the converter boxes to get some of the channels they had over the air before, Swan said.

What’s happening

Just 60 percent of Americans know that Feb. 17, 2009, is the day free television over the airwaves will effectively end. Beginning then, households without cable, satellite or a digital television set will no longer be able to tune into programming without a special converter box, according to a recent survey by Best Buy.

More than half surveyed don’t understand why the transition is happening. For the record, the government mandated the switch to digital broadcasting for every full-power station to free up part of the broadcast spectrum for other services, including police and fire departments, emergency rescue and advanced wireless services.

One in five, or 544,670, households in Dallas-Fort Worth will need a digital converter box hooked up to their televisions in order for them to work after the conversion, according to Neilsen Media Research. The Metroplex is second behind Los Angeles in households with only over-the-air television programming.

Get your converter box

Texans have been snapping up those $40 coupons rapidly to offset the cost of the converter box, which generally ranges from $40 to $80. So far, 475,000 coupons have been requested by people in the Dallas-Fort Worth market and 114,000 of those coupons have been redeemed, according to Todd Sedmak, spokesman for the Commerce Department, which is distributing the coupons through the NTIA.

Although that sounds like most households in the market have received the coupon, keep in mind that each household can order two coupons. And many consumers have ordered the coupons for an extra set that is not hooked up to their cable or satellite service. Nationwide, 18 million coupons have been requested and 4 million have been redeemed, Sedmak said.

"The program is off to a strong success," he said. "But there's a lot of work to happen before we're done."

The television industry, including broadcasters, retailers and manufacturers, has been ordered to launch a $1 billion education campaign to inform consumers about the change and the need for the converter box, Sedmak said.

Now what?

With coupon in hand, consumers didn't find much information for comparison shopping for the converter boxes until now.

Consumer Reports has tested 14 of the models for picture and sound quality, as well as a number of other tests, like how easily the remote works and whether the letterbox picture in which the digital signal transmits can be switched to a full-screen picture easily.

The full report can be found at www.consumerreports.org/cro/electronics-computers/televisions/digital-tv-converter/ratings/dtv-converter-boxes-ratings.htm.